" We are heading into Black Friday so a few ideas for playing the arrival of Star Wars. Plus some work on refining my GARP/Value investing combo picks"

Dow Jones Industrial Average 17,824.00 (UP)   Week Ending 11/20/2015

The death star is coming!  The coming release of Disney's (DIS) first release of the Star Wars movies is quickly approaching. You could buy Disney of course, but I think there are some better ways to play this gigantic blockbuster.

First, you could buy the stock of
Electronic Arts, ( Symbol EA, $72.42) which has the rights to produce the Star Wars video game series.

  
Monica Gerson from Benzinga reported: 

"Electronic Arts has released a new game – the Star Wars Battlefront. The game is a 12-40 player online shooter set in the Star Wars universe and is available both online and at retail. Although the game has received relatively weak early reviews, it is still expected to be a mass-market hit and sell at least 13 million units in the quarter, analyst Ben Schachter mentioned, while adding that this could prove to be a conservative estimate.

The stock of EA has 15 Buy ratings on it and should perform well here. The company has done $4.52 Billion dollars of sales in 2015 and has Net Income of 875 Million dollars.

Another way to go, is to jump on the Star Wars toy bonanza and buy the stock of Hasbro Inc. (Symbol HAS, $75.49). I had read an article in the Wall Street Journal that said that Star Wars toys were already crowding out Snoopy and Peanuts on the toy shelves at stores even though there is a Peanuts movie out too. Hasbro has a 1.4 PEG Ratio and earnings should be on a steady climb for the next few years. Both EA and Hasbro stock prices have already done well in 2015 up 54% and 37% Year to date. Happy holidays for both of these winners.

So now on to some stocks that have good PEG Ratio's and Return on Equity, but yet also are trading at less than 3 times Price to Cash Flow and that are trading at less than 2 times Book Value.

Gannett Company Inc., (Symbol GCI, $17.00) is a spin-off from TEGNA, the old Gannett Company with broadcasting businesses.  GCI, with $2.96 Billion in revenues, is the spun-off publishing company, which adopts the name Gannett and  owns newspapers in 92 markets, including USA TODAY, and plans to acquire more papers and other media assets. Oddly they are looking to buy A.H Belo, that I discussed in last weeks blog, who owns the Dallas Texas newspaper. Carl Icann happens to own 7.4 million shares of this company. 

GCI has a Price to Book of 1.81 and a forward PE of 9.9. The company list a Return on Equity of 34% and pays a 4.71% dividend.

TEGNA had spun this company off because of the decline in newspaper advertising revenues. The company trades at 7.85 times Price to Cash Flow. Year to date the stock is up 20.82%.  I could see this stock trading to the $20 to $22 area, so a nice gain on your investment with a dividend kicker.

PDL BioPharma Inc. (Symbol PDLI, $4.00) according to their website,  "Manages a portfolio of patents and royalty assets, consisting primarily of its Queen et al. antibody humanization patents and license agreements with various biotechnology and pharmaceutical companies.  PDL pioneered the humanization of monoclonal antibodies and, by doing so, enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases for which it receives significant royalty revenue.  PDL is currently focused on intellectual property asset management, acquiring new income generating assets, and maximizing value for its shareholders."

That all sounds wonderful but here is the real important stuff.. The company has a Return on Equity 56.5% and a low PEG Ratio of  0.17.

PDL BioPharma has Revenues of $529.5 million  and a forward PE of 5.73. The Price to Book Ratio on the stock is 1.10 to 1 and the stock is trading at a Price to Free Cash Flow of 3.23.

There is more, the company pays a current dividend of 15.02% , (I doubt they will maintain this), and PDLI is in great financial shape with a Current ratio of 3.2 to 1. 

This company works on Royalty revenues from the companies that it invest in and have been quite successful. 2016 earnings are projected to be much softer,but still OK. I see a target here of $6 -$7 dollars per share on the stock price.

I asked for this book for Christmas for further learning in "Value" investing. I will let you know if Santa brings it. My hope is to bring you the best investing advice and that you continue to read my blog articles. Have a Happy and healthy Thanksgiving and holiday season.

Sincerely,

Freewilly

"This past week I had an epiphany to the virtues of "Value Investing" and how successful it can be. So I am combining my "Growth At a Reasonable Price" tenets with some traditional "Value Investing" tenets and want to see what results"

Dow Jones Industrial Average 17,910.33 Week ending 11-06-2015

Last weekend my wife and I attended a memorial gathering for a friend who was a gifted architectural historian. It was held at an estate of a gracious couple who were also friends of his. An intimate gathering to celebrate his life. Until we were introduced to our host, I had been unaware he is one of the great "Value" investors of our time.

Discussing stocks would have been inappropriate for this occasion, (although he did mention Warren Buffett a few times). Hopefully when we have the opportunity to meet again and he and I can discuss value investing as this is a topic I wish to pursue further.

Firstly let me say that I have limited expertise on this "Value Investing" subject, Anyone reading this blog that wants to "Value invest" should simply buy the stock of the world's leading experts, Warren Buffett and Charlie Munger, and may purchase shares of Berkshire Hathaway  Inc "B" stock (Symbol BRK.B , $136.33). This stock currently has a 1.38 price to book value. 

Anything written beyond this point is just a grand experiment!


So here is the spicy soup mix of screening that I came up with. I took PEG Ratio of less than 1.5, and ROE of 15% or higher, (My GARP tenets), and combined them with Value tenets of Price to Book value of 1.5 or less and Price to Cash Flow of 3 or under. Maybe a DaVinci Code for modern investing, ha,ha!  Here is what came up in the screening.

Iconix Group Inc. (Symbol ICON, $6.90)  a stock that got obliterated last week has a Book Value of 20.02. Even I can recognize this as a good value deal. PEG 0.18, ROE 14.40%, Price to Book 0.34 and Price to Cash Flow 1.91. 

A.H. Belo Corp.(Symbol AHC, $5.52) has a book value of $5.60 a share and is in the newspaper business. Who would want to own that? (Warren Buffett actually owns some newspaper companies, Washington Post). This company has an ROE of 65.5%, Price to Book 0.99, Price to Cash flow 1.42, and pays a 5.8% dividend. 

AU Optronics Corp. (Symbol AUO, $2.95) is a semiconductor company. It has a PE of 4.28, a PEG of 0.09, a ROE of 12.40, a Book value per share of $5.97, a Price to Book value of 0.49, and Price to Cash flow of 1.95.

The next one, and a few of these aren't perfect, is Concord Medical Holdings Limited, (Symbol CCM, $5.09) PEG Ratio 0.43, PE 8.63, ROE 10.50%, Book Value $6.54, Price to cash flow 11.86 (higher then my screen), Price to book 0.78. 

One stock that popped up based on Book Value but failed to pass a Warren Buffett tenet because of it being "Regulated by Government" is American International Group, (Symbol AIG, $61.93). Carl Icann is trying to remedy that situation by trying to get them to break up the company. Then they would no longer be in the "Too Big to Fail" category and under government scrutiny. Call these the "Honorable Mention" stocks.

AIG has a Book Value of near $80.00 per share with a Price to Book Value of 0.79. The current PEG Ratio is 1.16 and the forward PE is 11.32. It pays a dividend of 1.81% while you wait. The ROE is not great at 6.70 and the Price to Cash flow is off the charts at 25.25. But still may be a stock to look at.  General Motors (Symbol GM, $35.75) is another stock that might fall into this "interesting" category based on some, but not all of these Value screening criteria.

Another one in the honorable mention category in Mannatech Incorporated (Symbol MTEX, $25.10), which has had quite a run since September. PEG Ratio is 0.35 and PE is 6.06. Return on Equity is 34.60% and Price to book is 1.87. Price to Cash flow off the charts again at 13.73.  The recent run up in stock price may mean I am a little late to the game on this one. Still it makes the "Honorable Mention" category.

I may take a flyer out on ICONIX Brands, (symbol ICON), this week to test out my experiment. George Soros would tell me to double down on it if I am sure of myself. Let's see how the stock opens on Monday.

Have a great autumn weekend and enjoy your family and friends,

Freewilly

"This week the stock market doled out rewards and punishment with great clarity in regards to measuring stock prices. Amazon, Google, Netgear and Microsoft getting rewarded with gains and with Chipotle, Community Health, Pandora and Skechers getting taken down substantially in price. My pick this week, Visa (symbol V), has not been known to disappoint."

Dow Jones Industrial Average 17,646.70  (UP) Week ending 10/23/2015

This was a week in the market where there was no middle ground. If you did good, you were rewarded handsomely with a tremendous gain in stock price. If you did bad, on sales and earnings reporting, no quarter was given, and ETF's and institutional sellers came in pounding your stock price down, selling without showing any mercy. 

This has been a year of rotating financial stocks for me. I started with Discover Financial which although a great value it never made any headway in the stock market. I sold that 4 months ago and moved that money to American Express, another great value stock on paper. Luckily I dumped that on the afternoon before they reported earnings this week, where they were punished for a revenues and earnings miss and taken down 8%. 

 I decided to move into Visa (Symbol V, $77.07) which has done very well this year. The PEG ratio on the stock is higher than I like to pay, listed at 1.64 and 2.14 on two different websites. I do not like to pay over 1.5 PEG , but I decided that I needed to pay a premium to get into a better financial growth name in the space.  ROE on the stock is 21.01%.

VISA has been a stellar performer with a 1 year gain of 43.87% and a YTD gain of 17.57% and a 1 month gain of 8.63% , all according to the CNBC mobile website. Revenues are growing at 12% a year and Net income is growing at 16.36% per year.

VISA which operates in 200 different countries has just boosted their dividend up by 17% and it now returns 0.73%. The company has $39.429 Billion dollars in assets and has Zero Long Term debt. The Quick Ratio and the Current Ratio are 1.59 to 1.00, very solid numbers financially.

USAA has just announced that they are moving all their credit and debit cards over to Visa from Mastercard. Visa is also on the forefront of card "Chip" technology which should improve margins. 

Earnings at the company are growing at 11.6% per year and for 3 to 5 year it has been 20.4%. The forward PE on the company is 29.17 so it is valued like a growth stock.

Analysts are 17 Buy , 4 Out Perform, and 2 hold. This stock is a little more richly priced than I normally buy but I think it is necessary to own a good quality stock in the Financial area as a strong long term hold.

So buy some VISA stock, then relax and have yourself a nice meal, get a good night sleep, and wait for your stock to rise up in value. Visa is a good 1-3 year investment suitable for any investment account.

Hope your Fantasy Football team is doing good on this wonderful autumn day and have a great investment week,

Freewilly

"Adding some muscle to my lineup in this highly volatile market. A little growth, a little value, and one muscular biotech-pharma stock"

Dow Jones Industrial Average 16,472  (Up) Week ending 10-02-2015

Greetings. I am like all the other investors currently here trying to get a foothold 
and to position my portfolio correctly to move forward.

I even went so far as to listen to George Soros's lectures on Reflexivity and its relation
to financial markets, which are contrary to the traditional market accepted ideas on 
stock theory that emphasize Equilibrium as the rule. I had previously prejudged 
George S. because of his negative view on my George, (Bush 43). What Soros really
 is against is the Patriot Act. It is contrary to his views and philosophy on the 
"Open Society". It is a tough call between "freedom versus safety".  I have read
 his economic  theories with an open mind, and on that front, all must admit that he
 is absolutely brilliant. 

So while the market has corrected, I have taken some profit on winners and even 
sold out my Disney position. I took the cash to reinvest here and add to some 
smaller positions that I had established earlier in the year.

I wanted to add some muscle to my portfolio with these 3 picks. So the first 

thing I did was to add to my position in MobileEye N.V 

(Symbol MBLY). 

This growth stock has doubled revenues 3 years in a row. I added to a previous 

position I had taken in the stock to move MBLY into a "Top 10" position in my

portfolio. I feel it is a good "Growth" component in my portfolio going forward. 

Barron's Magazine this weekend had an article about how General Motors Corp. is

looking at their technology favorably. Safety is important and MobileEye's software 

is tops in that department. It does not meet either of my normal criteria on ROE 

and PEG ratio so from that standpoint it is somewhat speculative.

My second stock, is my value stock pick, that I added to my position in. Time Warner Inc. (symbol TWX). while everyone else is loading up on Netflix, I am buying this ignored owner of HBO, Turner Broadcasting and Warner Bros. and all their valuable media assets. The stock should be trading at $120 per share based on earnings going into 2016 and it is at $70 per share. HBO is winning all of the awards, so add to your position in this one right here. This stock meets both my ROE and PEG rules.

My third pick that I added to was Celgene (Symbol CELG). I broke 

Jim Cramer's rules and averaged "UP" when I added to this position, but I was 

buying it on a big recent dip. Sometimes you just need to use common sense 
and break the rules. It was an opportunity to put Celgene in the Top 10 in my portfolio
 and so  I took advantage of it. This company is rock solid for the next few years. 

So with these 3 stocks I have added great muscular strength to my portfolio. I felt that 

this was the best strategy in this trading environment, just add "Tough guys". 

Like Popeye below you need to feed your portfolio some "spinach" and keep it strong.

Trade carefully and always improve your stock positions. 

Freewilly

"Finally I get a chance to write about one of my 15 for 2015 stock picks. Oshkosh Corp. (Symbol OSK), which was already a great value stock, won a contract from the US. Army for $6.7 Billion dollars to build military vehicles"

Dow Jones Industrial Average 16,102.38 (Down) Week ending 09-03-2015

Oshkosh Corp. (Symbol OSK, $39.60) has always had great value fundamentals by my standards. A PEG Ratio of 0.83 and a Return on Equity of  15% were always good even though revenues had been declining for the last 4 years. It was one of my 15 for 2015 stock picks this year.

    Now that has all changed. August 25th, 2015 Oshkosh and Oshkosh Defense were awarded by the US Army a $6.7 Billion dollar contract to replace the military's aging fleet of Humvees with 17,000 Oshkosh JLTV vehicle. That amount is larger than its whole 2014 sales Revenue for the year! Add to that a 10 Million share stock buyback announced on Sept 1st and a possibility of another $50 Billion in contracts to replace the rest of the old Humvees and now you have a sweet 3-5 year story on a stock that already had pretty good fundamentals.

Some other good things about Oshkosh, the book value on the company is $25.57 a share so you are not paying much for the operations. Ben Graham and Warren Buffett would like the setup on this stock. Also the dividend on the stock is 1.72% so you get paid while you are waiting for your capital gain.

So lets look at some earnings information. 

The company is projecting 15% Annual earnings growth and should see that or better going forward. Earnings per share for 2015 are projected at $3.15 per share and for 2016 they are looking like $3.63 per share with a forward PE of 11.10 way below the market's current PE. (FYI, truck and auto stocks tend to trade at lower PE's in general when you a pricing them for valuation unless your name is Tesla.)

There is really good Insider buying on this one also. The future looks very bright here.
I purchased the stock around this price on Friday and you can buy it here with not to much downside risk. Even if we have another downside Tsunami in selling, this one should spring right back. China and interest rates will have no effect on the story here.

Enjoy your Labor Day weekend here in the USA. Everywhere else enjoy your regular weekend. Keep an eye out for bargains like this and leave comments with your own suggestions on my blog.

Freewilly

I don't think we are quite at a bottom yet, but there are some names that you can start to accumulate here for a long term investment. AXP, GILD,DIS,TWX, and AAPL

Dow Jones Industrial Average 15,459.75 (Way Down) Week ending 08-21-2015

(The Dow Jones averages have now corrected 10.9% off of its high for the year.)

 So after an ugly month of trading in August most accounts are back where the started back in January this year. Flat as a pancake, but oh what a fun ride. 

I don't think the market correction is quite over yet, but here are some names you can buy for the long term as we settle in and put in a bottom. These are all Large Cap names and should be familiar to you. Since it is September just about, we will look at 2016 forcasted earnings.

The first one is American Express Corp. (Symbol AXP, $77.15). This stock is trading at a PE of 13.54 and is forecasting earnings per share of $5.68. You will not go broke buying some of this.


2nd Pick would be Gilead Sciences Inc. (Symbol GILD, $105.33).  This stock has a PE of 10 and is projecting 2016 earnings per share of $11.55.  

 The third stock would be Walt Disney Corporation (Symbol DIS, $98.84). This one the bean counters have thought the "sky is falling" because of cable bundling coming undone. Evidently they do not understand the power of the "Force" and that Star Wars is coming one after another for the next 5 Years. Consider Disney 10 times more powerful than the Death Star in Star Wars. You can invest as much as you like in this name. Fire at will!  Disney has a current PE of 20.55 and is forecasting 2016 earnings of $5.59 per share.

Speaking of Death Stars, here is a little company that has $194 Billion dollars of cash on it's balance sheet, Apple Inc. (Symbol AAPL, $105.76). Apple currently has a PE of 12.21 and is forecasting 2016 earnings of $9.73 per share. The stock frankly should be trading at $160 - $180 dollars per share. This one is a layup at this price, a no brainer.


 The fifth stock is Time Warner Inc. (Symbol TWX, $72.70). This company has the least exposure to the fickle AD revenue business. They are about Content. HBO, Warner Bros., and Turner make up a powerful and expanding lineup. Time Warner Inc. currently has a PE of 17.1 and has 2016 projected earnings of $5.72 per share. This stock is rock solid and can be purchased here at this price.

As always be careful when buying stocks. Smaller is better because you can always buy more later.

Have a great weekend,

Freewilly

In this trading environment you need to look for solid companies with little debt. If you like the stock of Home Depot, you will probably also like the stock of American Woodmark Corp. (AMWD)

Dow Jones Industrial Average 17,690  (Down)  Week ending 07-31-2015

Greetings. I found a really nice small-cap stock that only two analysts are following. One has a Buy rating and one has a hold. My rating is to buy it on a pullback, because it just had a recent big breakout and run up in price. 

The company is  American Woodmark Corp. (Symbol AMWD, $65.76). 

"American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. American Woodmark was incorporated in 1980 by the four principal managers of the Boise Cascade Cabinet Division through a leveraged buyout of that division. American Woodmark was operated privately until 1986 when it became a public company through a registered public offering of its common stock.

 

American Woodmark currently offers framed stock cabinets in approximately 500 different cabinet lines, ranging in price from relatively inexpensive to medium-priced styles. Styles vary by design and color from natural wood finishes to low-pressure laminate surfaces. The product offering of stock cabinets includes 85 door designs in 21 colors. Stock cabinets consist of cabinet interiors of varying dimensions and construction options and a maple, oak, cherry, or hickory front frame, door and/or drawer front.

 

Products are sold under the brand names of American Woodmark®, Timberlake®, Shenandoah Cabinetry®, Shenandoah Value Series ™ , and Waypoint Living Spaces®."

Sales through Home Depot and Lowe's make up about 45% of American Woodmark's company revenues.

AMWD based in Winchester, VA. has an ROE of 16.30 and the PEG Ratio is a little out of whack at 3.72, (That is why you should wait for a little bit of a pullback before you purchase shares). The current PE is 29.76.

The company had revenues of $825.5 Million last year and has a market cap of 1 Billion dollars. The company has a very healthy Quick Ratio of 2.9 to 1 and a Current Ratio of 3.32 to 1. The company has little to no long term debt. It pays a 0.55% dividend currently.

Earnings per share for 2015 are looking like $2.54 per share and for 2016 they look like $3.13 per share. Earnings this year are up 68.7%. EPS for the past 5 years have averaged 27.7% gain per year. 2016 earnings growth is projected to be at 15.71% and for 2017 19.34%.

The stock price has performed very well recently with a YTD gain of 62.61% and One year gain of 123.67%.

So a really nice American small cap stock to buy for you. Again, need to wait for a little pullback to jump in. (maybe when the Fed raises interest rates this year in around a month from now.)

Then when you make you big profit money you can go out to Home Depot or Lowe's and get yourself some new kitchen cabinets made by American Woodmark. Then everybody is happy!

Catch you next time around,

    Freewilly    

   

"This roller coaster stock market wants to make you reach out to a comfort stock. This old friend has been in business 66 years and comes at a slight discount. I am talking about Dick's Sporting Goods Inc."

Dow Jones Industrial Average 17,760 (Down) Week ending 07/10/2015

So how is your stomach doing in these roller coaster US Markets? We even had a day with the NYSE main floor halted for some hours , though 80% of the trades happen on sister electronic trading exchanges anyway. 

The whole week was very disconcerting with Apple Inc. stock breaking through a main bottom support level then suddenly bouncing right back the next day. Even with the bounce back it was a worrisome week for the retail investor. 

A familiar name that I like and that falls within my PEG and Return on Equity rules is Dick's Sporting Goods Inc., (Symbol DKS, $51.19). DKS has a PEG Ratio of 1.25 and a Return of Equity of 19.41. This company with 603 stores is financially in good shape with a current ratio of 1.57 and has a low amount of debt.  DKS did $6.9 Billion dollars in sales last year. The company has 93.6 million shares outstanding and currently pays a dividend at a rate of 1.09%. Insider buying has been positive.

The stock has been muddling along because of investors worries about online competition. Still over a one year period the stock is up 11.53% and YTD it is up 3.10%.

On the earnings side, Dick's is projecting $3.18 per share in 2015 and then $3.55 per share in 2016 and a projected PE of 14.48. The One year EPS growth rate has been 11.3%. The IBD earnings rating on the company is 82, so a pretty solid company for a roller coaster market.

I think Dick's diversified product line of Sporting Equipment, Footwear, Hunting and Fishing equipment, Sportswear and Fitness equipment makes it very resistant to on-line shopping. Dick's products tend to lend them selves to the brick and mortar store experience where you can touch and feel the products. Hard to tell the weight and balance of a fishing rod on-line!

I could see DKS being the target of Private Equity purchasers trying to buy it at a discount here and add a premium. Recent articles have suggested the same.

Analyst are pretty evenly split between Buy and Hold on their opinions on the stock.

I think it is the perfect stock for these markets with the expectation of a 10% return per year and no worries on the roller coaster market. People are going to buy the stuff they sell such as Under Armor sportswear, Callaway Golf equipment and all kinds of sneakers.

(Also the equipment for the ever popular US sport now of Lacrosse) 

So strap on your seat belt in this roller coaster market and pick up a little DKS so that you can keep calm and not worry.

Have a great gardening or beach or mountain lake weekend,

Freewilly

"This is no time to be buying stocks. Greeks are not going to budge and the Chinese are leveraging up a bit. I am having trouble finding good stock values within my investment criteria"

Dow Jones Industrial Average 18,027.63 (UP) Week ending 06/19/2015
Dow Jones Industrial Average 17.949.12 (Down) Week ending 06/26/2015

Time to do a little profit taking on your stocks. I even lightened up a bit on my Apple (AAPL) stock position this week because they need to run a sales gain over last years $212 Billion in Revenues, a tough task.You need to access the risk in your portfolio and take some corrective action. (DO NOT sell everything!)

The market is looking for a reason to correct and sell-off here. Greece, no matter which way it goes, will cool off any gains in Europe. The Fed is sure to raise a 1/4 percent on interest rates and throw some cold water on the US stock market expansion. The Chinese are having to ease up on capital requirements, (i.e.leveraging) to keep their economy going at a high clip. It is simply time for a rest stop here. 

There are some stocks I like that fit my PEG Ratio under 1.5 and Return on Equity of 15% plus after we have a 8 -10% correction. These stocks are good building blocks for a solid portfolio.

PPG Corp. (PPG), Gilead Sciences(GILD),Middleby Corp. (MIDD) and Disney (DIS) would be some of the names to look at.

I would like Merck here , (MRK), if the stock had not flat-lined for the last five years in price. They have made efficiency cuts but have dropped in revenues for the last four years. They need an activist investor in here to stir things up a bit. They have a nice dividend if you want to buy it and wait for something to happen.

My worse blog call of the year: Keurig Green Mountain Coffee. (GMCR). These guys have come down from a high of $155.00 per share to now $77.96 and falling in six months. This is where you try to "catch a falling knife" and it takes your hand off. Avoid even at this price!I thought the interest from Coca Cola would hold this one up a little better.

So get to your Greek ATM and get your money out and batten down the hatches. This could be a rough ride for awhile here. 

If your bored and just need something to buy, 

Ironwood Pharmaceuticals Inc. Cl A ,(Symbol IRWD ), is not a bad speculative buy here at $12.03 per share. The conversion price on their $300 Million Senior debt offering is $16.58 per share, so you have a lot of headroom here for a gain. Linzess is their product and they should have positive earnings in 2016. You may want to let this Greek thing play out first and get even a better buying position.

"Remember. The train does not always stay of the track!"

Enjoy your summer and keep your money in your pocket for now.

Freewilly

I threw in the towel on DFS, Discover Financial Services, one of my 15 for 2015 picks. It trades to much like a bank. I moved that money into American Express Company , (AXP) which is more popular with institutional investors, and is currently trading at a discount because of the loss of the Costco account.

Dow Jones Industrial Average 17,899 (Down) Week ending 06-12-2015

Discover Financial Services still has great numbers, but the stock is unloved by wall street. The Momentum guys trade up on Visa and Mastercard which are are near all time highs. I decided to go with another value credit card company trading at a similar PE to DFS and that at least I can be pretty sure will be more popular with institutional investors which include Warren Buffett.
You cannot chase these other momentum credit card names here. Do not fall into the trap.

American Express Company ( Symbol, AXP, $79.53) with a PE of 13.95 seems to be a better way to go here. Bernstein likes it with a target price of $94 or $95 per share. 

American Express has a PEG Ratio of 1.62 and has a Return on Equity of 28.60 so fits my investment criteria.  The operate at a Gross Margin of 73.3% and pay a dividend currently at 1.46%.

EPS for next year is looking like a healthy $5.72 per share.  The company employees 54,000 employees worldwide.

"American Express, don't leave home without it"  I think it is a safe bet for a nice 1 to 3 year return on your investment.

Enjoy the nice weather and head to the garden or the beach,

Freewilly

One side is saying "Bullish herd" of homebuilders on May 26th and on the other side Raymond James downgrades all the housing stocks on on May 15th. Myself, I am willing to put some coin on the stock of Lennar Corp. Cl. A , at the right price.

Dow Jones Industrial Average 18,010.68 (Down) Week ending 05-29-2015
Dow Jones Industrial Average 17,849.00  (Down) Week ending 06-05-2015

I apologize for the lost Month of May on the blog. A weekend working in Washington, DC, a Memorial day driving 1100 miles out to Western Pennsylvania and Wheeling, WV. to a niece's graduation and family get together. Then last weekend finally worked on the backyard garden on Saturday only to get heat exhaustion on Sunday which lead into a week long upper respiratory viral infection. See you really didn't need to know all that, but I didn't want you to think that I am just slacking off. 

While stocks in the US continue to churn and burn and merge and rise, I think a place that is still undervalued is Real Estate. The Federal reserve really can't raise interest rates more than like a quarter percent because of the currency and trade imbalances it creates around the world. The IMF is imploring them not to raise and delay it. Also the United States with it's 18 Trillion dollar debt load cannot afford a large rise in the interest service payments. So this all bodes well for the continuing improvement in the real estate market.

One way to play this trend is to buy a high quality home builder of new houses that are moderately priced to sell easily. Lennar Corp. CL. A (Symbol LEN, $46.71) is just such a stock. 

The stock falls in close to my guidelines on ROE and PEG ratio. The Return on Equity of the stock is 14.49% and the PEG ratio is 1.08.

Q1 Revenue was up 20% over last years first quarter which continues a 3 year trend of strong sales growth. The stock price is up 14.01 % for 1 year and 4.06% YTD. 

Earnings this year are projected at $3.17 per share and for next year $3.60 per share. They also offer a small 0.34% dividend payment

I believe the stock will continue it's long term growth path and should hit my $60.00 price target by the end of next year. That would be a 28% return over the next year and a half.

Because of the demands on my time in the summer months to not be sitting at a computer, I may write blogs as good stock opportunities arise and should be recommended. 

If you need to park money somewhere in the meantime, just park it in stock of AT&T (Symbol T). It pays a 5.47% dividend and they are merging with Direct TV who has the exclusive on the NFL Ticket TV programming. That should keep you out of trouble.

Good health and happy and safe travels to you,

Freewilly