Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: AllTooFoolish Two stars, 250 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5980  
Subject: July 2012 Picks Date: 8/6/2012 5:39 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 7
Based on the latest results as of today’s data release, only Cisco would qualify as a Long candidate. 
Although several stocks are significantly overvalued according to the BI valuation methods, none would qualify as a short candidate.

Market Valuation: Data suggests we are at Parity valuation.
Downside -19%
Upside +20%

I am using the following TTD rules for Long position considerations:
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	Div    3-5Y L 3-5Y H VL 3-5Y   ROE	
Ticker	Date	        Price	Price	Price	Down	Delta   Yield   VL $	VL $	% Chg	<2STD	Name
CAT	25-May-12	 85.02 	81.53	144	4%	14%	2.5	145	215	116%	FALSE	Caterpillar Inc.
JNJ	25-May-12	 69.12 	62.96	79.92	10%	4%	3.6	80	100	31%	TRUE	Johnson & Johnson
MCD	1-Jun-12	 89.59 	66.92	95.93	34%	12%	3.1	110	130	33%	FALSE	McDonald's Corp.
CVX	8-Jun-12	 111	86.51	123	28%	9%	3.3	130	160	32%	FALSE	Chevron Corp.
XOM	8-Jun-12	 87.55 	67.55	93.98	30%	8%	2.7	110	135	42%	FALSE	Exxon Mobil Corp.
BA	15-Jun-12	 72.81 	45.77	71.02	59%	-9%	2.4	90	125	49%	FALSE	Boeing
TRV	15-Jun-12	 63.71 	45.24	66.57	41%	12%	2.9	80	100	43%	FALSE	Travelers Cos.
T	22-Jun-12	 37.58 	26.15	37.93	44%	8%	4.7	40	50	19%	FALSE	AT&T Inc.
VZ	22-Jun-12	 44.46 	21.39	30.57	108%	13%	4.5	55	70	40%	FALSE	Verizon Communic.
CSCO	22-Jun-12	 16.35 	20.76	34.55	-21%	21%	2.0	30	35	106%	FALSE	Cisco Systems
HD	29-Jun-12	 52.29 	32.58	51.18	60%	12%	2.3	60	70	26%	FALSE	Home Depot
PG	29-Jun-12	 65.50 	50.13	64.46	31%	-3%	3.5	90	110	57%	FALSE	Procter & Gamble
INTC	6-Jul-12	 26.23 	29.90	51.75	-12%	10%	3.5	45	55	92%	FALSE	Intel Corp.
HPQ	6-Jul-12	 18.26 	21.50	36.71	-15%	-17%	3.0	40	60	184%	FALSE	Hewlett-Packard
IBM	6-Jul-12	 198.52 	137.56	200.14	44%	9%	1.8	235	285	33%	FALSE	Int'l Business Mach.
AA	13-Jul-12	 8.37 	9.24	17.97	-9%	248%	1.5	16	25	150%	FALSE	Alcoa Inc.
DD	13-Jul-12	 49.47 	50.43	75.28	-2%	9%	3.6	100	120	124%	FALSE	Du Pont
MRK	13-Jul-12	 44.15 	35.69	58.05	24%	-7%	3.8	45	55	13%	FALSE	Merck & Co.
PFE	13-Jul-12	 24.28 	15.13	22.31	60%	14%	3.7	25	30	14%	FALSE	Pfizer Inc.
GE	20-Jul-12	 20.96 	20.60	31.17	2%	17%	3.3	30	45	82%	FALSE	Gen'l Electric
MMM	20-Jul-12	 91.70 	80.40	113.18	14%	11%	2.6	135	165	66%	FALSE	3M Company
UTX	20-Jul-12	 76.81 	62.62	90.09	23%	0%	2.9	115	140	71%	FALSE	United Technologies
KFT	27-Jul-12	 40.51 	33.78	44.52	20%	10%	3.0	55	65	54%	FALSE	Kraft Foods
KO	27-Jul-12	 40.42 	29.94	40.49	35%	8%	2.6	50	60	37%	FALSE	Coca-Cola
WMT	3-Aug-12	 74.55 	65.76	84.32	13%	8%	2.2	95	115	41%	FALSE	Wal-Mart Stores
DIS	10-Aug-12	 49.77 	41.26	62.53	21%	15%	1.2	60	75	37%	FALSE	Disney (Walt)
BAC	18-May-12	 7.43 	7.56	11.69	-2%	-8%	0.6	12	20	122%	FALSE	Bank of America
JPM	18-May-12	 36.09 	41.78	68.86	-14%	15%	3.4	60	95	120%	FALSE	JPMorgan Chase
AXP	18-May-12	 57.61 	49.10	74.15	17%	9%	1.4	75	105	59%	FALSE	Amer. Express
MSFT	18-May-12	 29.75 	33.68	49.49	-12%	12%	3.3	50	60	88%	FALSE	Microsoft Corp.

												
Dow30		        12,790  10,394  15,341 	               3.0	17,127 21,759 			Dow Jones Industrial Average
Appreciation Potential		   -19%	   20%				   34%	   70%	 66%

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 mentioned 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 here:
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 are updated as soon as new earnings are reported.

Div Yield is the current % dividend payout ratio per share.

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 a 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 TRUE, else it is FALSE. This tells me that the stock's ROE is much
higher than its historic average.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement