Sunday, December 7, 2014

"Wild times as the Dow Jones approaches 18,000. Best to stick to basics here, Peg Ratio less then 1.5 and Return on Equity, (ROE) of 15% plus + "

Dow Jones Industrial Average 17,959 (UP) Week Ending 12-05-2014 

It seems like our TV is always on one of the shows presented by this network. Whether it is Food Network with Chopped, Drive-ins Diners and Dives or Restaurant Impossible or on HGTV with Love it or List It or Flip or Flop,  they all seem to be on my television all the time.

 Scripps Network Interactive, Inc. (Symbol SNI , $80.28) is a stock that meets my criteria as a stock to invest in here.  I like the PEG Ratio to be below 1.5 or bless and the stock currently has a PEG ratio of 1.22 according to GuruFocus website. The Return On Equity I like to be at 15% or better and Scripps steps up with a 27.43 ROE, (Return on Equity).

The stock is up 10.2% this year and it also adds a 1% dividend payment. That adds up  to a pretty nice annual return of 11.2%. I think in 2015 you will need to pick out stocks that give you that 10-15% return with the dividend included. It will be tougher to find those 30+ plus returns in 2015 and you may subject yourself to unwarranted risk trying to attain it.

The company has a market capitalization of $11 Billion dollars. SNI generates quarterly Free Cash flow of $248.42 Million dollars. Profit Margin is 40.1%. The company has a healthy balance sheet with a Quick Ratio or 6.3 dollars in Assets for every 1 dollar of Liability. Revenues last year were $2.651 Billion dollars.

 5 Year earnings growth for the company has been 16.4%. Earnings per share for 2013 were $3.68 and for 2014 we are looking at $3.90 per share and for 2015 we are projecting $4.47 per share. The current PE is 20.4 and the future PE based on projected earnings is 17.97. Expected earnings growth for this year is 12.07%.

Annual Net income for the company is $522 Million dollars. The IBD rating on earnings is 69 and the SMR Rating, (Sales+ Profit Margins+ ROE) is rated "A". The company has 102.8 millions shares outstanding.

The secret of this company is that there customers are interactive with their TV shows. The last Food Network Star for example was picked by the audience in the last show. This one is a winner that you can buy at anytime here. Stock symbol SNI.

Two of my favorite characters above from the show based on the real estate market in Toronto Canada, Love It or List It.


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