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Equifax is still undervalued

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In June, the call was that Equifax (NYSE: EFX) was undervalued. Well, it's still undervalued, and I'm Reiterating my Buy rating, first recommended on June 3, 2009 at a price of $27.06.

Surprisingly, Equifax's shares have meandered in the past four months, and technically, there is concern about a possible double-top at/near $30.


Still, based on the modest P/E of 14 and Equifax's status as one of three global providers of consumer and commercial credit information, commonly called credit reports, the calculation is that the recent pull-back to $25 was just profit-taking on EFX's spring surge to $30 from about $19.

Hence, $30 probably will not represent formidable resistance. More-cautious investors, however, should wait for EFX to close above $30 for three consecutive days. The First Call FY2009/FY2010 EPS estimates for EFX are $2.26 to $2.44.

Stock Analysis: Equifax is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in EFX now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your EFX position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $17.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.


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Last updated: November 25, 2009: 08:10 AM

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