Saturday, December 31, 2016

"Repatriation of funds,and other mysterious processes that are expected to occur in 2017. Also Freewilly's Stockpicker blog 2016 beginning of the year stock pick performance recap revealed"

Dow Jones Industrial Average - 17,762.60 (Down) Week ending 12-30-2016
S & P 500 Average - 2238.83

Repatriation. The wonder cure to supercharge the USA economy in 2017. Repatriation on paper sounds great. Let companys do a one time return of overseas earnings dollars at a one time lower tax rate. Sounds easy.

BUT, just like in the movie "It's a Wonderful Life", George Bailey and his Bailey Savings and Loan does not have that money just sitting around. It is loaned out and put to work with companies in Europe and Asia and around the world. If there is a massive repatriation, it could break those banks or simply they could just say that they won't allow you to do it or that it would need to be done a little bit at a time.

Second, What does repatriation of funds mean?

"The process of converting a foreign currency into the currency of one's own country. The amount that the investor will receive depends on the exchange rate between the two currencies being traded at the settlement time." If A process like this were to take place and swing into motion, it would create wild fluctuations in world currency markets and disrupt the whole world economy. Not such a wonderful life! 😓

So it is my forecast, that this will not happen, or if it does happen it will be very limited and not have the massive impact that everyone is expecting.

On to the bold predictions from the beginning of 2016:

First the Growth stock picks did terrible, down (-6.98%) on average. 

PLKI, SNA, MBLY, CELG, SAM, SKX and AMWD. The worse performer, Sketchers,  SKX down (-18.97%) for the year of 2016.

Next the Value Stock Picks which did great, up +20.52% on average. 

 AAPL, TWX, TWTR, OSK, TK, ICON. The big winner was Oshkosh Corp. up 72.06% and the subject of my 12/28/2015 blog called "The Rainmaker". Which stock will be the Rainmaker in 2017???

Last, but not least, the Steady Eddie stocks, which averaged +7.57%. V,GE,JNJ were the three selections in this area. Johnson and Johnson, JNJ, the big winner with a +15.65% gain.

This has been a year of tremendous learning for me in regards to investing. Although I pick off the occasional growth stock trade like STMP, NTNX, DG and others this year, I have whole heartily made the conversion over to Value investing as an ongoing concern. Value investing will be the theme of most investments discussed in the Freewilly's Stockpicker Blog for 2017.  

Enjoy your last hours of 2016, and best of investments to you for the new 2017 year that starts tonight at 12:00 AM Midnight.

Good cheers to you,


Sunday, December 11, 2016

"A wild ride on Wall Street this week as stocks jet to new highs and sector rotation continues to whipsaw the healthcare stocks and bolster the financial stocks."

Dow Jones Industrial Average 19,756.85 (UP and New High)
S & P 500 Index 2259.53

You know that stocks are up near a peak when everybody is talking about the stock market and buying things because everything is going up. The Trump rally, I guess you can call it, with very favorable business and personal tax laws coming and many roll backs of stifling banking and energy regulations.They will probably also allow companies to repatriate cash back into the US with a one time lower tax rate consideration to fuel some capital investment and job hiring here in the USA.

With all the excitement going on we still need to stay the course with our Value investing discipline and pick out some good stock names.I will present them in no particular order.

J.C.Penney Company Inc.(symbol JCP, $10.21) . You are looking for excitement and I bring you an old line brick and mortar retailer! This is a recovery of business story. The company is going to earn $.0.07 cents per share this year and 2017 the earnings are projected at $0.68 cents per share for a forward PE of 14.60. The stock is up YTD 53.3% , so this is no joke. I think the stock can get to the $15 -16 dollar range by the end of the 2017 year which is a nice gain from here.

Rio Tinto PLC (Symbol RIO, $41.15) is a recomendation I heard this week on CNBC's Sqawkbox show in the morning and it came from Robert Bishop from Impala Asset Management who use to be a CIO for George Soros's fund. There was also an upgrade this week on the stock from Credit Suisse. Bishop thinks that Rio will double its earnings this year and that the price of the stock should double. A pretty simple formula. The company is going to earn $0.03 cents this year and is projecting a $3.70 per share earnings for 2017 which is a forward PE of 11.14. The stock of the company is up 48.98% YTD. This mining company is a major producer on Iron Ore.

The GoodYear Tire and Rubber Company (Symbol  GT, $32.18) is a company that is doing very well in the high-end tire business. The company is going to earn $1.21 per share this year and projecting to shoot up to $4.34 per share next year. That would be a forward PE of 7.41. The stock this year is down 0.47% YTD.
I could see this stock moving to the $55.00 - $60.00 price area, a very nice gain. 

Gilead Sciences Inc. (Symbol GILD, $72.70) are a prime target in the Pharma-Healthcare area which has been punished because of talk from the US President Elect to rein in the prices of drug medications. The company has over 30 billion in cash and is going to earn $10.78 per share this year and projecting earnings of $10.86 per share for 2017, that is a forward PE of 6.69. The stock is down 26.96% YTD. This stock should be trading at $120.00 per share based on future earnings and their ongoing profitable business.

 "I put in a picture of a young Sophia Loren just to see if you were paying attention"

So don't go crazy borrowing any money and pouring it into this hot market. Just invest the way you normally would and continue to read my blog and look for good opportunities. Please feel free to leave a comment if you have a good value investment idea. I will post it.

Have a great investment week and get ready for the holidays,


Sunday, November 13, 2016

" This election in the US may be the most reflexive event since BREXIT and 9-11. A Republican President, Senate, and House has caused a tidal wave of movement in the expectations for this stock market"

Dow Jones Industrial Average 18,847.66  (UP and New High) Week Ending 11/11/2016
S & P 500 -  Closed at 2164.45

The last time that we had a Republican President with a Republican Senate and a Republican House was back in 1928. If you will recall, the next year we had a stock market crash in 1929 and the Great Depression which went on in to 1939. Part of the reason was that expectations were very high and credit with the financial institutions was very loose so lots of folks tried to get rich quick by borrowing money and investing it in the stock market, speculating on margin. 

So lets forward to today. The expectations have been flipped over to investing in Financials, Health care, Industrial Materials, Technology, etc. and everybody knows it. George Soros would tell you that this massive change in thought will trigger a massive change in behavior that will reflexively change the market and thus effect you even if you stay consistent in your own investing behavior. 

So I have to wonder if the run up in the stock of NVIDIA CORP. (Symbol NVDA)  by 30% on Friday is the first bud of speculation rearing its ugly head??  If you are going to participate in this new speculative game of musical chairs be sure to jump out of it very quickly with your profit (or loss). I will not be chasing these stocks myself. 

This is the kind of stock I will be looking at.

Gannett Corp Inc. (Symbol GCI, $9.38). Gannett the owner of the national distributed newspaper USA Today pays a dividend of 6.82% currently. The stock which had been as low as $7.75 in November 2016, had a bump up here because of the Trump win and market run and because of the ending of a buyout bid for Tronc , (The Chicago Tribune and the Los Angeles Times).

Gannett Inc., (GCI) , had $2.92 Billion in sales and trades at 1 times current book value and a price to sales of only 0.38.  The company is going to earn $0.99 cents per share for this year and $1.18 per share is projected for 2017. That is a forward PE of 7.1. 

The target price for GCI is $11.75 so here is my total return math for the purchase. If we hit the target price that is not far away. A gain from here of 2.37 points would be a 25.27% gain. Add on to that the 6.82% dividend and you end up with a Total Return of 32.09%. 

 That is a number I can live with and would buy the stock right here but you could get a little profit taking and pick it up at $9.25 this week. If nothing happens I still end up with almost a 7% return. 

If you want to learn more about Gannett Inc., started in 1906, you can go to the following link:

It is my hope that Gannett Corp. buys the company Twitter, (Symbol TWTR), as an extension of its NEWS organization. I think it is a good match-up. I think NEWS is Twitter's strongest brand feature asset.

 "That George Soros wrote the book, "The Alchemy of Finance".  He may be the best stock trader ever."

Freewilly  signing off.  (Need to go watch the Steelers vs. the Cowboys NFL football game!)

Sunday, November 6, 2016

"Well it all comes down to Tuesday here in Pennsylvania. This election will be the biggest battle since Rocky Balboa fought Apollo Creed. Me, I'm looking at good value stocks, no matter who wins"

Dow Jones Industrial Average 17,888.28 (Down) Week Ending 11-04-2016

When I first started buying Value Stocks , I purchased stocks that were trading with current Book values of below 1.0. These are stocks that Warren Buffett would reverently call "Cigar Butts". You find them on the ground, pick them up, and smoke them till the end then drop them. This method does work lots of times, but you can sometimes end up with a stock that is low priced for very good reason and suffer an unwanted loss of capital. 

So a better idea is to buy higher quality stocks, that for some reason are temporarily out of favor. So say companies with a PEG Ratio below 1, with quarter over quarter sales gain of 5%, and a a Book Value below 5, and a half decent Return on Equity, over say 7%.

Here is a list of 5 Value stocks that I like that fit these kind of financial parameters:

American International Group, Inc. (Symbol AIG, $57.38)

CVS Health Corp. (Symbol        CVS, $82.31)

Scripps Networks Interactive, Inc. (Symbol SNI, $64.84)

Delphi Automotive, PLC. (Symbol DLPH, $66.76)

Toll Brothers Inc. (Symbol TOL, $27.42)

So these are the kinds of stocks that I would be looking at going through this US presidential election time frame. These stocks are all good quality and are presented at a value price here.

So whether it is President Trump or President Clinton you should still be looking for excellent quality investments to start your 2017 portfolio. 

"Who are you voting for? .... Alexander Hamilton. I liked him in that NY Broadway play."

A shout out to those Chicago Cubs for winning their first World Series in a 108 years. See hard work and perseverance do eventually pay off. 

Have a great week and keep an eye out for good values.


Sunday, October 2, 2016

Bubble? What bubble? I see plenty of good stocks to buy for 2017. This market has been in a self correcting mode all year in individual stocks.

Dow Jones Industrial Average 18,308.15  Week ending 09-30-2016

I am finally back. My first two picks are Growth stocks that are being offered at a value right now. You don't always need to look at companies trading below book value to find a margin of safety and a good value investment. The first two stocks are both discount product retailers.

Five Below ($40.20 Symbol FIVE) is a stock I have been following for a long time based right here in Philadelphia PA. This is the first opportunity I have seen it at a price that it can be purchased. The company has a PEG ratio of 1.49 and a Return on Equity of 26%. The company has no debt and a Current Ratio of 2.80. EPS for 2016 is $1.32 per share and projected to be $1.61 for 2017. I like this to buy here and to trade up the $55 per share. Sales for the last 5 years have been 33.4%.

Dollar General Inc. ($69.99 Symbol DG) is a stock that I like at a margin of safety here down from a $95.00 price. The company has a PEG ratio of 1.20 and a Return on Equity of 22.90%. The company is projected to open 1000 new stores in 2017. The company is projecting 2016 EPS of $4.27 and 2017 earnings of $4.91 per share with a forward PE of 14.26. This 75 year old company has EPS growth for the last 5 years of 16.70%. The company also pays a 1.43% dividend to kick in to your pot of wealth. I would buy it here and ride it back up to that $95.00 number. The 2017 earnings justify it. 

Community Health Systems Inc. ($11.54 Symbol CYH) is a pure value play here. This one has a current book value 0.68 and a Price to sales of 0.07. Community took a big right off hopefully cleaning the books so they can sell the company. The company is projected to earn $1.99 per share in 2017 which is a forward PE of 5.8. Sales in the past 5 years have been up 9% per year. Current Ratio is 1.80. I like this one back up to $17-$18 per share. 

GreenLight Capital RE, LTD ($20.44 Symbol GLRE) is the company of the famous hedge fund manager David Einhorn. This company will have 2016 earnings per share of $1.16  and projected earnings of $2.97 per share for 2017 which is a forward PE of 6.88. The company has no debt.
The current Price to book ratio is 0.96. The quarter over quarter sales are up 29.90%. I like it as a trade up to $30.00 per share.

Insys Therapeutics, Inc. ($11.79 Symbol INSY) is a biotech pharmaceutical company. Back in the 1980's every company ended with "-tronics". Now in 2016 every pharma company ends with the name "therapeutics"! This company is an odd combination of being a speculative pick and a value pick all at the same time. 2016 earnings per share are projected at $0.66 per share and for 2017 look like $0.86 per share. The company has a PEG ratio of 0.64 and a Return on Equity of 20%.  Also this "Therapeutics" company did $311 million in sales last year. A healthy Current Ratio of 3.30 , this company should trade up to its target price of $24 per share. EPS for the next 5 years is projected at 28% a year. I think any bad news is behind them and this is a great entry point. This company has some dynamic pharma products in the area of pain management. 

"It's about time Freewilly wrote another blog entry. I miss his value picks"

So don't panic here. The stock market is not coming to an end, it is just getting a little more complicated. Keep some cash handy so you can pick up bargains on your target list when they show up cheap on your radar. 

Enjoy the rest of your weekend.


Sunday, August 28, 2016

"Not a great time to be jumping into the market, but I found a nice boring paper and forest company with a nice steadily rising dividend over the years. Benjamin Graham would probably like this one"

Dow Jones Industrial Average 18,395.40 --- (Down) - Week ending 08-26-16

Schweitzer-Mauduit International Inc. (Symbol SWM, $39.15)

I think this company started out by providing cigarette papers and cigar wrappers to the tobacco industry. A pretty mundane business. They happen to be the largest producer of cigarette papers in the world. 

According to Google business and Reuters this is their diversified business now:

"Schweitzer-Mauduit International, Inc. is a producer of specialty papers and resin-based products. The Company manufactures and sells lightweight specialty papers, which are used in manufacturing ventilated cigarettes, reconstituted tobacco used in producing blended cigarettes and banded papers used in the production of lower ignition propensity (LIP) cigarettes. The Company operates through two segments: Engineered Papers, and Advanced Materials and Structures. Its Engineered Papers segment produces both tobacco-related papers and non-tobacco-related papers. The Company's tobacco-related papers include various porous papers used to wrap parts of a cigarette, such as tobacco column and filter, and reconstituted tobacco leaf (RTL), which is blended with virgin tobacco in a cigarette. It manufactures and sells a range of engineered resin-based, rolled goods, such as films, nets, foams and other non-wovens. The Company operates approximately 20 production locations."

 Benjamin Graham - The Father of Value investing
The reason I am suggesting it as a buy is because it pays a 4.09% dividend and has raised the dividend since 2012. The stock price has been on a wild ride this year with a big drop back at the end of February/March  2016 trading as low as $29.00 share. But it has climbed all the way back to near its previous 2016 highs.

SWM has a lot of stats that Ben Graham would like to go along with the steadily rising dividend and the business being boring. The Return on Equity is 19.40 and the PEG Ratio is 1.27. The price to the current book value is P/B of 2.30. Graham really likes the Price to Book to be under 1 and other noted value investors seem to like P/B to be below 1.4. (Christopher Browne, John Heins &Whitney Tillson). 

SWM also is in good financial condition to maintain that nice dividend with a Current Ratio of 3.50. They also had quarter over quarter sales increase of 19.50%.

On the earnings front, The foward PE is 11.53 and trailing 12 month earnings are $3.09 per share and 2017 earnings are projected at $3.40 per share. The current PE is 12.3, well below market average.

I would wait until this market corrects a little and try to buy this stock around the $37.00 price point. But you should see that sometime within the next 30 days. 

 SWM should give you a nice steady stream of dividends. Someday people will stop smoking cigarettes and cigars,  but I don't think it is going to happen for a long , long time. 


Sunday, August 14, 2016

"The numbers keep leading me to the home builder stocks. Analysts seemingly hate this one, but I like it. We are talking about Meritage Homes Corporation , (Symbol MTH, NYSE)

Dow Jones Industrial Average 18,576.47 (UP) and hit All-time high this week ending 08-12-2016

The last 5 out of 6 analyst reports on this stock have all been downgrades. JP Morgan, Deutsche Bank, Credit Suisse, FBN Securities, and Sterne Agee CRT have all downgraded this stock. For me though, the numbers tell a very different story for the long term investor. 

Meritage Homes Corporation, (Symbol MTH, $34.92) is a Top Ten home builder in the USA that is focused on building new houses in 9 of the fastest growing states in the USA. I found the stock looking for companies that were trading at close to current book value, plus that had run at least a 10% quarter over quarter sales gain, and that had a Return on Equity of better than 10%. 

MTH fit the bill. It trades at a Price to Book of 1.05 or just about at the current book value of $33.16 per share. This Scottsdale Arizona company had a 33.5% quarter over quarter sales gain and a 35.2% quarter over quarter earnings gain. The Return on Equity is 11.40% currently. 

I should mention at this point that the US markets are at all time highs and that it may be a good time to take off an item or two that have not worked in your portfolio. You should also take a little bit off the table of things that are approaching fully valued even though you still love them. Raise some cash so that you have it available if we get a correction to prices in the next few months.

If you look at the insiders's on Meritage Homes they are buying in at a 3 to 1 ratio. The company had $2.86 Billion in sales last year and for the past 5 years the sales have been up 22.3% so good long term trends. The Price to Sales is 0.49. Interest rates for mortgages are still cheap here in the US and should not rise dramatically.  

On the earnings side, MTH earned $2.97 per share in 2015 an is projecting $3.58 per share in 2016 and $4.08 in 2017. This is a current PE of 10.15 and a forward PE of 8.58. The PEG Ratio is a very healthy 0.95. (I like it below 1.5 as a general rule). EPS for the past 5 years have been up 52.91%

The company has a Market Cap of only 1.39 billion dollars so maybe could be a possible take out candidate. So how has the stock price done recently? YTD the stock is up 2.74% and for the last half year up 15.51% but the one year change has been -17.6% , so it has been moving up recently. 

So I would suggest to take a small position in this stock and then add to it on a dip and look to hold it for 2 to 3 years. It is mid August, and the rich guys are stacking up cash, so don't go crazy with anything here and don't speculate to try to increase your returns right now. 

Enjoy the sunny summer time and the summer wild flowers and dream about peaceful things.

Thanks for stopping by,


Sunday, July 17, 2016

I was looking over at the Vanguard Funds and the Vanguard REIT Index (VGSIX) jumped out at me with a 23.75% return this year. Some of that is a bid for dividends and total return, but maybe there is more to this US Real Estate story. Let's take a look at Toll Brothers (Symbol TOL).

Dow Jones Industrial Average -18516.55 (UP) Week Ending 07/15/2016

There seems to be something afoot in the Real Estate part of the stock market. I had already discussed Tri-Pointe, (Symbol TPH) ,earlier this year which is doing very well and now I am taking a look at Toll Brothers which is the number 1 builder of new luxury houses in the USA. 

Toll Brothers (Symbol TOL, $27.40) is a company with steadily increasing sales and earnings. It has a PEG Ratio of 0.68 and an ROE (Return on Equity) of 9%.

TOL has a current PE of 13.3 and a forward PE of 9.73 so looking very good as opposed to an overpriced market. The company did sales of $4.5 Billion last year. The one year EPS is up 37.2% and the 3-5 year EPS growth has been 34.3% as the real estate market slowly recovers.

2015 earning per share were $1.97 and 2016 is projecting at $2.58 cents per share.  2017 looking out is projecting at $2.97 per share. 

I think we might want to talk about book value now. The company has a Price to Book ratio of 1.11 which is very low and a current Book value of $24.62 a share. Also the Price to sales is also 1.01 so this stock has not been awarded its due value.

The target price on the stock is $36.62 which would be a 33.64% gain from these prices. Government policy seems to be pointing to keeping interest down and the jumbo loans have come down recently,  all are pointing towards a favorable real estate market.

I have already taken a small position in TOL and plan on adding to it at these prices or below as the market corrects a little. Of course, everyone just needs to have the open floor concept, and the double sinks with the Jacuzzi in the On-Suite- Master bathroom. (Not found in my house!). But alas , there are many people that have lots of money and they will buy Toll Brothers houses and make the stock price go up. The lest I can do is to financially benefit from their good fortune. 

Happy house and stock hunting,


Tuesday, July 12, 2016

Pokemon Go! Can I buy the stock. Nope, not at 22,480 Yen! (Nintendo Co. Ltd., PE 166). So I may as well tell you about a hard luck deep value stock. Community Health Systems Inc. (Symbol CYH) $12.87

Dow Jones Industrial Average 18,146.74 (UP) Week ending 07-08-2016

Pokemon Go! People are walking out into the street and into buildings playing this game. Stop it! You are going to end up in a bad place. Instead buy this value stock and make your real reality better than your virtual reality.

Community Health Systems Inc. (Symbol CYH, $12.87) is a stock that is having a down 2016 earnings year compared to its 2015 earnings year. So the stock has been pummeled to the point that the stock is down to $12.87 cents a share today. So we look to 2017 and a projected earnings of $2.67 per share and a forward PE of 4.82. Now you have my interest peaked. 

The current ROE and PEG Ratio are ugly. PEG 2.30 and ROE 2.20%.

But you are looking at a current Price to Book value of 0.35. This is a Book value $36.31 per share. A Price to Sales of 0.07 and a Price to Free Cash Flow of 4.17. Wacky numbers.

The company with this earnings down-draft has a 18.81% Short Float. If these earnings come in as predicted these shorts will need to be covered. This is really simply a recovery of earnings story.

I put up the map for their hospitals and they seem to be in markets where they can produce good margins. What I really like is that this company employees 137,000 people all in the United States.

Sales have averaged up 9% for the past 5 years. Yet, this year up only 1.80%, hence the low stock price. The current target price on the stock is $16.47. That would be almost a 28% gain from here. I like that in this market.

So what do the Community Health Systems insiders think? In the Last 6 Months there have been 40 Buys and 21 Sells. Very Favorable sentiment.

So I think you can go out and buy this stock here with the market up close to it's highs. I have been buying value stocks like this and peeling off layers of shares of my big winners , (MBLY, DG,and DEPO), to build up some cash to shop with later.

So lets keep that bull market running thorough the summer with these low US Treasurer Bond interest rates.  It is giving the market some spring in its step , but alas , it will not last forever.

" But when I heard your ragged voice, something switched in my perception, and I knew I was the victim, of a beautiful deception. All my once exact beliefs, like tangled threads unraveled, I walked out stunned and liberated and so began my travels. Keep the river on your right and the highway at your shoulder, and the front line in your sights, Pioneer. Keep your eye on the road, remember what you told her, this is all in code, my dear"    

Song the Long Strange Golden RoadThe Waterboys

Have a great and peaceful Summer,  Freewilly

Saturday, June 11, 2016

" It is time for this value investor to invest with confidence with one of the best value investors, David Einhorn. I am putting my money to work in Greenlight Capital RE LTD.. The stock is a great value right here and insiders are buying it. "

Dow Jones Industrial Average 17,865.34 (Down) Week ending 06-10-2016.

Greetings. I guess you have all heard of Berkshire Hathaway run by Warren Buffett's value investment team with its Geico Insurance company. Buffett takes the cash flow from his stock investments and invest it back into value stocks.

Well,  Greenlight Capital RE LTD.  (Symbol GLRE, $19.73 ) is in a number of different insurance and reinsurance businesses. Their cash flow is managed and invested by DME Advisors that is headed by hedge fund manager and prolific Value investor, (and also Chairman of the company ),  David Einhorn. David runs a Long/Short value based strategy with the companies investments and traditionally has done very well. 

Greenlight ,GLRE is a great buy right now because David is coming off of a real klunker of year in 2015 , with a per share earning loss of (-$9.07) per share. Sun Edison, Micron Technology and a double down on Consol Energy the big culprits of that 2015 loss year.  

So that has provided a great opportunity to get in the stock here at a ground floor price and have David Einhorn be involved with making himself and you some big money. GLRE back in 2014 and 2015 was trading at $35.00 per share. 

 David Einhorn - Value Investor
Greenlight is projecting 2016 earnings per share of $2.61 per share a PE of 6.36 and 2017 earnings per share of $3.29 per share with a forward PE of 5.64. 

Similar to MetLife, that I wrote about in my last blog article, Greenlight is trading under current book value at a 0.86 ratio and has a current book value of $23.04. The target price by analyst on the stock is $31.00 per share. I calculate that at around a 57% gain if it just returns to that historical mean number and target.

Sales Quarter over quarter are up 137.3 % and EPS Q/Q are up 218%. Very easy comparisons to go against from 2015. 

David is heavily weighted in consumer cyclical stocks at around 35% of his portfolio. We will just let him do his thing and get back to his winning ways. He has almost $6 Billion dollars under management. 

Einhorn, along with Soros and Buffett, has recently been buying up shares of Apple Inc., (Symbol AAPL) , at bargain prices here.

I like this stock as a buy and hold till it gets to its target price then I would review the situation again at that time. 

Mr. Einhorn is also a prolific poker player and prolific philanthropist.  I like that!

Have a wonderful summer. Remember you don't have to own every stock. Just own a few that give you the best odds in your favor of making some money. GLRE is one of them at this time.


Sunday, May 15, 2016

Looking around for great values and found MetLife Inc. trading way below current book value and that pays a nice 3.72% dividend. Too big to fail? Not according to the judge. Feds are fighting the ruling.

Dow Jones Industrial Average 17,535.32 (Down) Week ending 05-13-2016

When us Philadelphia Eagles fans drive up the Jersey Turnpike towards New York or New England we will inevitably pass by the N.Y. Giants football stadium with it's sponsor's logo on the front of the stadium, "MetLife". Now us Eagles fans aren't real kean on those NY. Football Giants because we play them twice a year and the games are very "Physical" because of our rivalry in the NFC EAST division, (which also includes the Dallas Cowboys and the Washington Redskins).

I have however taken an interest in the company that sponsors their stadium, that being MetLife Inc. (Symbol MET, $42.99). The company trades at an amazing low Price to current book value of 0.62 with the current book value at $68.83 per share. Part of the reason for this situation is because since the 2008 financial crisis the government had deemed them as "Too Big to Fail" and had added regulation and high capital requirements that the company had to abide by.  Well last month in court a judge had over-ruled that decision and declared that MetLife Inc. would no longer be under those rules and regulations and that they are free to run their finances as they wish. I hope that this will be a key catalyst to the stock price.

Well that has the "Snoopy Dog", the MetLife mascot symbol,  jumping for joy. Here are some of the numbers that the company sports:

A Peg Ratio of 0.78 well below my 1.5 criterion.

Earnings per share for 2016 are projected at $5.48 per share and for 2017 projected at $6.04 per share.  That is a current PE ratio of 9.21 and a forward PE of 7.12 , well below the current market. The expected 5 Year earnings increase is forecasted at 11.80% per year.

The ROE, return on equity has been low because of the regulations but that should rise in the future with the new financial freedom. 

The P/FCF Price to free cash flow is 4.55 , which is well below 10. The company did sales of almost $70 billion dollars in 2015 so there is allot of energy for forward synergy here. 

The company pays a nice dividend of 3.72% , so MET pays you a decent wage even if it doesn't rocket up right away. 

Zack's company says that analyst ratings are 9 Strong Buy and 2 Buy with 3 Hold ratings on the stock. There is a target price on the stock of $51.07 , but I would hope that the company could return to at least "1 times book value" which would be $68-69 dollars a share.

I would say that you can buy it right here in this rocky stock market. So take a little ride on the MetLife blimp and see your assets rise up also.

Have a great week. Sorry I have not been posting every week. It is not because of a lack of interest, but more about being very very busy. Always keep some money on the side lines , (10% to 15%) for good buying opportunities.