Wednesday, February 6, 2013

"Looking for Value? You don't have to look far to find these two stocks for your Superbowl Portfolio"

Dow Jones Industrial Average  14,009.79 (UP) Week ending 02-01-2013

Dow Jones 14,000. The folks that are on the sidelines with their pile of cash are steamed up because they have missed the rally. The folks that are in the market are happy for their gains, but are scared because they think back to 2007 and wonder if the swoon could happen again. Where am I at? 70/30. 70% in stocks and 30% in cash. 

So what do you do here early February? Continue to pick up stocks that are good values based on their growth, and only take partial positions. Start also taking off partial positions in stocks that have not performed well in the last two months. If they have not moved up during the rally, they are probably not going to.

So what are these value stocks that you can be adding here at these lofty heights?  Tractor Supply Co. (Symbol TSCO, $103.96) Return on Equity 26.53% and PEG Ratio 1.04

Tractor Supply is a solid retailer
which is expecting earnings per share of $4.43 for 2013 and $5.18 per share for 2014. Analyst have 13 strong buy and 3 buy recommendations on the stock. The company has had 5 year sales growth of 11.01% and has had a bold 5 year earnings growth of 49.50%. Currently long term earnings growth is projected at 17.90%

TSCO has generated a 1 Year Total Return of 23.38% and a 3 year Total Return of 312.78% . I would take that return all day and all year. If you buy the stock maybe they will send you one of these fun trucks pictured.

So you are wondering what the second "Value" stock is?
How about Apple Computer (Symbol AAPL, $453.62.). This thing is going to churn around a while up and down in a range. But when the dust clears, presto-chango, AAPL goes from the momentum stock camp to the value stock category with a new group of investors and starts its slow ascent back up in price.  Down in this price range here are the numbers on this stock. First, my standard measure, the Return on Equity for AAPL is 37.96% and the PEG ratio is 0.49. These are great numbers. 

  Here are some other numbers on the stock that will probably not repeat going forward.
5 year sales growth of 76.04%. 5 year earnings growth of 144.7%.  A PE ratio of 10.19 for Apple Computer!

The One year Total Return right now is (-1.32%) because of the recent contraction in price. The 3 Year Total Return is 132.08%. 

It even pays a dividend currently of 2.34%.

These guys still have great products being delivered and more new technologies on the way including more smartphone models, Apple I -TV and the streaming content market which is a hot area. 

Earnings for 2013 will be $44.45 per share an $50.73  per share for 2014. Those are big numbers. 
Here are the sales numbers for 2012. Sales 156.5 Billion dollars. Gross Profit 68.6 Billion dollars. 2012 Net Profit was 41.7 Billion.

Analyst have proclaimed 39 Strong Buy recommendations and 3 Overweight recommendations on the stock.

I just wanted to put down all these numbers so that people could see them in print to realize the potential of this company. You may not return 100% a year going forward but I think you will easily return 25-30% on your investment once we get out of this price churn period. Another words, a good 1 year to 3 year investment.

So pick these stocks up in small increments and Show Me the Money!       


No comments:

Post a Comment