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Subject: BI - Dow30 - Mar 6, 2012 Picks | Date: 3/6/2012 10:22 AM | |
Author: AllTooFoolish | Number: 5922 of 6035 | |
Based on the latest results, VL Mar 9, 2012 update, there are four stocks in the DOW30 that meet the criteria for a Long-term hold according to the TTD methods. The four companies meeting the TTD criteria for long positions are CSCO, AA, HPQ, and WMT. Using the same valuation technique in reverse, shows that BA is the most overvalued DOW stock and might be considered for a Short position. Also, the overall current downside risk in the market seems to be about -14%,while the upside is +29%. This implies we have moved more toward the middle as of late, but remain in a slightly oversold position. I am using the following TTD rules: 1. Year-over-Year EPS growth must > 10%, which is the next 4Q / current quarter + previous 3 quarters earnings results 2. VL 3-5 Year price appreciation < average price appreciation of the market 3. When calculating ROE and BV figures, ignore years when are negative, but must have at least 7+ years of data to be included in final consideration 4. Avoid erratic ROE ratios, that is where they are > 2std deviations = Curr ROE > (10 Year Avg + 2 * Std Dev) Summary of Results VL Current Down Up %<10Y EPS 3-5Y L 3-5Y H VL 3-5Y ROE Ticker Date Price Price Price Down Delta VL $ VL $ % Chg <2STD Name CAT 24-Feb-12 111. 79.47 141. 40% 20% 145. 215. 30% FALSE Caterpillar Inc. JNJ 24-Feb-12 64.81 74.82 94.98 -13% 2% 90.00 105.00 39% TRUE Johnson & Johnson MCD 2-Mar-12 99.17 81.65 117.06 21% 9% 110.00 130.00 11% TRUE McDonald's Corp. CVX 9-Mar-12 109. 116. 165. -6% 5% 130. 160. 19% FALSE Chevron Corp. XOM 9-Mar-12 86.36 80.80 112.40 7% -2% 120.00 145.00 39% FALSE Exxon Mobil Corp. BA 16-Dec-11 74.92 25.42 41.38 195% 10% 90.00 120.00 20% FALSE Boeing TRV 16-Dec-11 58.04 28.54 42.65 103% 78% 80.00 100.00 38% FALSE Travelers Cos. T 23-Dec-11 30.82 22.93 33.98 34% 16% 40.00 50.00 30% FALSE AT&T Inc. VZ 23-Dec-11 38.78 18.65 26.69 108% 18% 55.00 65.00 42% FALSE Verizon Communic. CSCO 23-Dec-11 19.72 23.55 43.16 -16% 35% 30.00 35.00 52% FALSE Cisco Systems HD 30-Dec-11 47.63 31.42 50.29 52% 10% 45.00 55.00 -6% FALSE Home Depot PG 30-Dec-11 66.64 52.88 69.30 26% 17% 90.00 110.00 35% FALSE Procter & Gamble INTC 6-Jan-12 26.77 37.90 68.60 -29% 0% 50.00 60.00 87% FALSE Intel Corp. HPQ 6-Jan-12 25.00 31.99 55.16 -22% 23% 55.00 75.00 120% FALSE Hewlett-Packard IBM 6-Jan-12 201. 149. 220. 35% 9% 235. 285. 17% FALSE Int'l Business Mach. AA 13-Jan-12 10.12 11.16 21.14 -9% 34% 20.00 30.00 98% FALSE Alcoa Inc. DD 13-Jan-12 51.31 37.15 55.40 38% 9% 95.00 120.00 85% FALSE Du Pont MRK 13-Jan-12 38.31 39.99 66.59 -4% 3% 40.00 50.00 4% FALSE Merck & Co. PFE 13-Jan-12 21.55 14.30 21.03 51% 45% 25.00 30.00 16% FALSE Pfizer Inc. GE 20-Jan-12 18.93 18.44 28.69 3% 21% 30.00 50.00 58% FALSE Gen'l Electric MMM 20-Jan-12 87.34 86.24 121.62 1% 6% 135.00 165.00 55% FALSE 3M Company UTX 20-Jan-12 83.92 65.73 97.62 28% 12% 110.00 135.00 31% FALSE United Technologies KFT 27-Jan-12 38.39 33.30 43.72 15% 14% 50.00 60.00 30% FALSE Kraft Foods KO 27-Jan-12 69.28 61.80 85.91 12% 9% 105.00 130.00 52% FALSE Coca-Cola WMT 3-Feb-12 58.95 72.07 93.62 -18% 12% 80.00 95.00 36% FALSE Wal-Mart Stores DIS 10-Feb-12 42.42 41.12 64.28 3% 18% 60.00 75.00 41% FALSE Disney (Walt) BAC 17-Feb-12 8.11 5.25 7.93 55% 2600% 11.00 18.00 36% FALSE Bank of America JPM 17-Feb-12 40.60 47.40 79.30 -14% 2% 60.00 85.00 48% FALSE JPMorgan Chase AXP 17-Feb-12 52.87 57.40 91.63 -8% 7% 70.00 95.00 32% FALSE Amer. Express MSFT 17-Feb-12 31.98 33.26 50.73 -4% -5% 45.00 55.00 41% FALSE Microsoft Corp. Dow30 12,972 11,196 16,740 17,415 21,971 Dow Jones Industrial Average Appreciation Potential -14% 29% 34% 69% VL Date is the date of the last summary report update from Valueline. Current Price is the closing price of the stock as of the time menthioned in the posting description. 10Yr Down is the 10 year downside price. The company must have at least 7 years of non-negative ROE data to qualify. 10Yr Up is the 10 year upside price. The company must have at least 7 years of non-negative ROE data to qualify. Both upside and downside are calculated using method outlined in TTD book. Also a discussion of calculating the upside and downside can be found at http://boards.fool.com/Message.asp?mid=20916205&sort=who......... %<10Y Downside is the current price divided by the 10 Yr downside expressed as a percentage. EPS Future Delta is the projected growth in EPS for the next 4 quarters versus the last four reported quarters. I use the latest EPS data from the VL spreadsheet which is updated as soon as new earnings are reported. 3-5 Y Low/Hi Price Est. is the downside/upside price estimate which is calculated using the projections of Book Value and ROE as discussed in TTD. Min VL Price Appreciation is the expected change in price from current price to low end VL projected 3-5 year appreciation price. ROE >2STD is part of my margin of safety consideration, which is briefly discussed in TTD on pg 70-71. I compare the current year's ROE versus the last 10 years of ROE data. If the current ROE is greater than average(10 Yr ROE) + (2 * stdev(10 Yr ROE)), than this column is YES, else it is NO. This tells me that the stock's ROE is much higher than it's historic average. |
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