Dow Jones Industrial Average 10,818 (Down) Week ending 08-19-2011
Earnings for the 2011 year ending December 31 are projected at $4.21 per share. For 2012 they are projecting $4.54 per share. That is a forward PE of 4.88 for 2012 for a company which huge revenues and good earnings. Other typical industrial companies with this type of revenues and earnings trade in the 60-80 a share range! This stock is at $22.16. So what gives? The share price is down 40% YTD. Even a blind monkey throwing a dart could get this one right. This company has almost 33 Billion in cash and short term investments. BUY GM, with a capital B.
Some other names I like here are Union Pacific Corp. (Symbol UNP, $85.69). When all else fails you can always buy a railroad that runs east-west and transports coal for electricity. UNP has a one year earnings growth rate of over 20%. Nothing but earnings upside surprises here. The stock is up 15% year to date.
Don't forget about Mastercard (Symbol MA, $300.16). It was one of my Top ten picks at the beginning of the year. Even after the large sell off we have had the stock is still up 45.45% Year to date. I like it and Warren Buffett likes it and owns it too.
Whatever you do, move slowly in smaller increments in whatever you purchase here, because it may be at an even better price next week.
If Chicken Little is right, and the "Sky is Falling", that will be a better strategy in the long run for you.
Lets see if 10,800 on the Dow holds support here and turns around this week.