To those taking time off for Good Friday: "May the Force Be with You!" To those working half days, enjoy your time with your families. The U.S. stock markets are closed today and that might be best so that we all can take a breather.
Given that stock markets all around the world were up yesterday, including ours -- again ... April Fool's Day! -- even day traders expressed confidence because they obviously were willing to hold stocks knowing the long weekend left plenty of time for unforeseen bad news to to slam their positions.
Continue reading Serious Money: Dow Top Ten -- If Only the Market Was Open
It was only a matter of time before Intuitive Surgical (ISRG
) surpassed it's previous all time high of $359.59 set on December 14, 2007. I have blogged many times about ISRG in my Chasing Value column. Today, I'm delighted that the stock is rising, but I think it is getting a bit rich and the value proposition has changed -- intra-day it hit $366.50.
Intuitive has a trailing P/E ratio of 61 and a projected P/E of 46. I commonly average the two for such volatile stocks which translates to 53.5. There are certain times when that might be alright, but with a PEG ratio (price-to-earnings-to-growth) of 2.05, this is not one of them. If you own it I am not suggesting selling it, but if you do not it might be wiser to put it on your watch list and wait for the market to calm down.
Continue reading Serious Money: Intuitive Surgical Hits New Highs
We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times
due to the volatile market.
The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.
Continue reading Serious Money: Market Looks Cheap to Me -- 35 Stocks
Best wishes to all and, next to world peace among people, we should hope for the same among world markets.
I have let some time pass before commenting on a recent example of how fragile a world we live in. This past year through a time of greater economic danger, fear and volatility than most of us has experienced in a life time, many people cannot fathom how close we came to the edge of Hades.
Continue reading Serious Money: Dubai Vaporizes $48 Trillion
If you're into Apple (AAPL
) or gold for the long term and you have been in for a long time you can stay put. If you are in them to make a quick buck, get out quickly!
Apple and gold are at all time highs. Yes, they may go higher, but not much and not soon.
The reason is that both Apple and gold (and probably golden apples) already include all the product info and inflation fears that could be. The next level is pure speculation. Do you want to speculate or invest? If the latter, invest elsewhere.
Continue reading Serious Money: Sell Apple, sell gold!
We started this review with 25 stocks
of companies noted for their quality of management and how successful they have been at nurturing new leaders as presented in Fortune magazine. After running them through a serious screening process using universally agreed upon key metrics, the list has been reduced to six candidates for potential investment.
I will reiterate that there is no imperative to invest in any of them even if they might be among the best opportunities from a select list. While I think all of the original companies listed and stocks screened are well regarded that does not mean now is the right time to invest.
Regardless of the outcome of this process, and since price and timing are critical, it would be smart to create a stock watch-list with the inclusion of all six of these companies.
Continue reading Serious Money: Fortune's 25 leaders, final 4
This is the third screening to find value among Fortune's 25 corporate world leaders that have demonstrated an ability to regenerate themselves from within. The list has been cut to 18 and will be cut further here.
The methodology of using basic stock data points to identify potential value investments only sets the stage for success -- it assures nothing. While it is true that paying less is better than paying more and getting a higher yield is better than less, this gives you a scant picture of what is in people's hearts and minds, and that is harder to judge. Like the weather, no matter the predictions, you may not find out it is raining until you are standing in it. Regardless, it should be advantageous to start with good stock (pun intended) before you take to whittlin', and that we have.
Continue reading Serious Money: Fortune's 25 leaders, 18 remain
Yesterday I started a review of 25 companies that Fortune deemed most successful according to their peers in developing quality leadership. Today I review the remaining 20, searching to find the ones that might be worth investing in.
Price-to-book (from 11/27/09) was used as the first value screen. The theory being from a value investor's perspective that buying for a price at or near the break-up value of the company provides downside protection. Of course that is easier said than done.
Continue reading Serious Money: Fortune's 25 leaders, now 20
The recent issue of Fortune magazine discusses how the best of the best train, guide and nurture top managers to become the leaders that will propel their corporations successfully forward. They list the top 25 companies, which I have used as the basis of a new review to see how they would fair against common metric screens.
In the past few months, many articles have posited that large-cap stocks should excel in the coming year based on their lagging the market behind smaller, more volatile stocks flying out of the March lows. I do not believe this is universally true. Plenty of large-cap stocks did well, such as Anadarko Petroleum (APC), Apple (AAPL) and Google (GOOG), while many small caps went nowhere. Even among the large caps included in Fortune's "Leadership 25," some have doubled.
Continue reading Serious Money: Fortune's 25 leaders among leaders
Next Page >