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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerThe New York Post reports on Corporate Leader magazine's poll of the top CEOs based on a survey of analysts and investors. Here's my assessment of the top five:
- Steve Jobs, Apple Inc. (NASDAQ: AAPL). With its stock up 94.4% in the last year -- though 13% below its 52-week high -- Apple's new products this year have been outstanding. But it's a pretty pricey stock; it trades at a Price/Earnings to Growth (PEG) ratio of 1.56 on a P/E ratio of 42.3 and Earnings Per Share (EPS) growth of 27.2% to $6.26 in fiscal 2009.
- Eric Schmidt, Google Inc. (NASDAQ: GOOG). With its stock up 27.8% in the last year -- though 15% below its 52-week high -- Google continues to take share from traditional advertisers while struggling somewhat to profit from all its innovations. But it's a somewhat pricey stock; it trades at a PEG ratio of 1.39 on a P/E ratio of 49.6 and EPS growth of 35.8% to $18.19 in 2008.
- Lloyd Blankfein, Goldman Sachs Group Inc. (NYSE: GS). With its its stock up 14.5% in the last year -- though 9% below its 52-week high -- Goldman has aced out its competitors through superior risk management. But it's quite pricey at a P/E ratio of 9.3 with EPS expected to drop 6.3% to $22.96 in 2008.
- James McNerney, Boeing Inc. (NYSE: BA). With its stock up a mere 1.4% in the last year -- and 17% below its 52-week high -- Boeing (about which I am writing a book) has its work cut out for it to deliver its popular 787 Dreamliner on schedule. But it's a reasonably priced stock -- it trades at a PEG ratio of 1.11 on a P/E ratio of 17.4 and EPS growth of 15.7% to $6.01 in 2008.
- Frederick Smith, FedEx Corp. (NYSE: FDX). With its stock down 18.1% in the last year and 22% below its 52-week high -- FedEx, which is still run by its able founder, has lowered its earnings outlook on higher fuel prices. But it's selling at a bargain price if its growth forecast is to be believed; it trades at a PEG ratio of 0.82 on a P/E ratio of 14.8 and EPS growth of 18.09% to $7.79 in fiscal 2009.
Of these five stocks, I'd say FedEx and Boeing look most attractive on a valuation basis. But I agree that all these five CEOs are doing an outstanding job.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
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