From a valuation point of view, PNR passes the test. It is currently trading at 17.7 times forward earnings. It is expected to grow these earnings by 14.3% per year over the next five years. It has a PEG ratio of 1.24.
As human beings we hedge all of the time. Even though I live in one of the sunniest cities in the world, I usually have a jacket ready, just in case. When I go holiday shopping I keep the tags, just in case I have to take everything back.
Some readers might remember a few years ago, I said: Sell everything under the sun – talking about solar stocks.
The great ones don’t stay great forever. Look at Microsoft (MSFT), Johnson & Johnson (JNJ), Merck (MRK), Cisco (CSCO), General Electric (GE). They are still good companies, no doubt, but these once mighty titans are not the engines of growth and prosperity they once were.
On Thursday of last week, the Dow closed above 16,000 for the first time in its history. I will never forget where I was on that day.
I am not a believer in the traditional asset allocation models that are built on the Model Portfolio Theory that says investors need so much money in stocks – often for growth -- and so much in bonds – often for income. And often so much in gold for security.
I cannot help but compare this company to Priceline.com (PCLN). I wrote about Priceline in my book a few years ago and I continue to own the stock. It has been one of the best performing stock in the entire market over the last one, three, five, and ten years!
I believe in being focused in the best areas of the market at any given point in time. Currently, the leading sectors in the market continue to be, internet, biotech, and pharmaceuticals. And recently a new leadership sector has entered into the fray: Oil and Gas Exploration stocks.
Every day I do my best to prepare for what the market will bring next. But let’s talk about the present and what is out there today because the money is made TODAY.
Value investors do it buying stocks they think have a greater intrinsic value than what they are trading at today.
There are a lot of lessons to be learned from the craziness that’s going on in the market right now. And we’re going to take a look at the facts as they present themselves at the current moment.
Recently the Dow Jones Industrial Average (DJIA) removed three stocks from its membership roster and added three new stocks in their place. The stocks that were kicked out—Alcoa (AA), Bank of America (BAC), and Hewlett-Packard (HP); the stocks added—Visa (V), Nike (NKE), Goldman Sachs (GS).
Why are mediocre stocks so popular when there are so many great ones out there ready to be discovered? That is the one question I keep posing to myself day after day after looking at so many portfolios full of stocks like Cisco, Johnson & Johnson, Lowes, Intel, Microsoft, and on and on.
When I extrapolate these numbers, apply an appropriate multiple, and carry them out over the next five years, I get a valuation of $170 on the stock.
Pandora is currently trading at about 98 times forward earnings with a 40% growth rate expected over the next five years. It has a PEG ratio of 2.44. This is a very rich PEG ratio.
Best Stocks Now!™ come in all shapes and sizes, as well as all types of packages. And Packaging Corp. of America (PKG) is no exception.
Here is a concept that is very important in the market—and I even saw it at work just last week when the Dow Jones Industrial Average (DJIA) finally kicked out three old duds.
I’ve said it before and I’ll say it again, 2013 has been the year of domestic stocks. Small and mid-cap domestic stocks are the hottest places to be in the market this year—for whatever reason.
If a CEO wants to work in an environment where he can do anything he wants and no one will notice for two years, I suggest he get a job running the Department of Energy.
I have written many articles in the past about what a great stock Visa (V) is. Well finally, somebody else besides me must also think it is a great company because it was just added to the DOW Jones Industrial Average.
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