Based on the latest results as of today’s data release, no companies 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 either.
Market Valuation: Data suggests we are at Parity valuation.
Downside -19%
Upside +19%
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 24-Aug-12 85.33 81 144 5% 12% 2.5 140 210 107% FALSE Caterpillar Inc.
JNJ 24-Aug-12 67.43 64 81 6% 3% 3.6 80 100 33% FALSE Johnson & Johnson
MCD 31-Aug-12 89.49 64 91 41% 7% 3.2 110 130 35% FALSE McDonald's Corp.
CVX 7-Sep-12 112 87 124 30% 9% 3.2 130 160 30% FALSE Chevron Corp.
XOM 7-Sep-12 87.30 67 93 31% 7% 2.6 110 135 40% FALSE Exxon Mobil Corp.
BA 15-Jun-12 71.40 46 71 56% -9% 2.5 90 125 51% FALSE Boeing
TRV 15-Jun-12 64.74 45 67 43% 12% 2.9 80 100 39% FALSE Travelers Cos.
T 22-Jun-12 36.64 26 38 40% 8% 4.9 40 50 22% FALSE AT&T Inc.
VZ 22-Jun-12 42.94 21 31 101% 13% 4.7 55 70 46% FALSE Verizon Communic.
CSCO 22-Jun-12 19.08 21 35 -8% 14% 3.0 30 35 71% FALSE Cisco Systems
HD 29-Jun-12 56.75 33 51 74% 11% 2.1 60 70 14% FALSE Home Depot
PG 29-Jun-12 67.19 50 64 34% 2% 3.4 90 110 49% FALSE Procter & Gamble
INTC 6-Jul-12 24.83 30 52 -17% 12% 3.7 45 55 106% FALSE Intel Corp.
HPQ 6-Jul-12 16.88 21 37 -21% 200% 3.2 40 60 197% FALSE Hewlett-Packard
IBM 6-Jul-12 195 138 200 42% 9% 1.8 235 285 34% FALSE Int'l Business Mach.
AA 13-Jul-12 8.56 9 18 -7% 248% 1.4 16 25 142% FALSE Alcoa Inc.
DD 13-Jul-12 49.75 50 75 -1% 9% 3.5 100 120 121% FALSE Du Pont
MRK 13-Jul-12 43.05 36 58 21% -7% 3.9 45 55 15% FALSE Merck & Co.
PFE 13-Jul-12 23.86 15 22 58% 14% 3.7 25 30 15% FALSE Pfizer Inc.
GE 20-Jul-12 20.71 21 31 1% 17% 3.3 30 45 81% FALSE Gen'l Electric
MMM 20-Jul-12 92.60 80 113 15% 11% 2.6 135 165 63% FALSE 3M Company
UTX 20-Jul-12 79.85 63 90 28% 0% 2.7 115 140 61% FALSE United Technologies
KFT 27-Jul-12 41.51 34 45 23% 9% 2.8 55 65 45% FALSE Kraft Foods
KO 27-Jul-12 37.40 30 40 25% 8% 2.8 50 60 48% FALSE Coca-Cola
WMT 3-Aug-12 72.60 66 84 10% 9% 2.2 95 115 45% FALSE Wal-Mart Stores
DIS 10-Aug-12 49.47 41 63 20% 7% 1.2 60 75 36% FALSE Disney (Walt)
BAC 17-Aug-12 7.99 8 12 5% -17% 0.5 10 17 70% FALSE Bank of America
JPM 17-Aug-12 37.14 38 62 -2% 10% 3.3 55 85 89% FALSE JPMorgan Chase
AXP 17-Aug-12 58.30 50 75 17% 9% 1.4 75 105 57% FALSE Amer. Express
MSFT 17-Aug-12 30.82 31 46 -2% 12% 3.2 50 60 81% FALSE Microsoft Corp.
Dow30 12,795 10,324 15,232 2.9 17,036 21,623 Dow Jones Industrial Average
Appreciation Potential -19% 19% 33% 69% 61%
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.
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