September 27, 2011 – 9:14 am
Most of my research and publishing tends to focus on companies manipulating accounting rules to make their reported earnings look better than the real economic cash flows of their business.
It is unfortunately rare that I find a company whose economic earnings are outpacing the reported accounting results and whose stock is cheap.
One such company is Lam Research (LRCX – very attractive rating). One of September’s most attractive stocks, LRCX offers investors hidden value.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged economic earnings, ETF predictive rating, excess cash, First Trust NASDAQ-100-Technology Sector Index Fund, Lam Research, LRCX, ProShares Ultra Semiconductors, QTEX, ROIC, USD, Very Attractive Rating
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August 11, 2011 – 1:34 pm
Here is a free copy of our report on RIMM for readers of Ask Matt.
The valuation of RIMM’s stock implies the company’s after-tax cash flow (NOPAT) will permanently decline by nearly 75%.
The valuation of NUE’s stock implies the company will grow its after-tax cash flow (NOPAT) by nearly 20% compounded annually for 20 years.
Yes, RIMM is losing market share and fast. Yes, RIMM’s Blackberry Playbook tablet is a dud. Yes, the stock has been a stinker recently. And yes, none of what I wrote at the beginning of this article would matter if the stock were not super cheap.
By David Trainer
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Posted in Stock Picks and Pans
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Also tagged AAPL, android, Apple, First Trust NASDAQ-100-Tech Index, GOOG, Google, ipad, iphone, LO, Lorillard, mobile computing, mobile phones, mobile technology, PowerShares QQQ, ProShares Ultra QQ, ProShares UltraPro QQQ, QLD, QQQ, QTEC, Research In Motion, RIMM, ROIC, TQQ
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Caterpillar Inc. (CAT) gets our Dangerous Rating. This means CAT’s quality-of-earnings are not attractive and the stock’s valuation is very expensive. For example, the valuation of the current stock price ($112.16) implies the company will grow its profits at 16% compounded annually for 20 years. The takeaway: there are better stocks to choose from. See details in our free report.
The risk/reward of this stock is quite compelling. Downside risk is low as the valuation already implies a permanent 54% decline in profits. How much worse can the valuation get? Upside reward potential is strong as the stock has to go over $77/share to trade at a value that implies the company’s profits will experience a 0% decline, still a no-growth scenario.
Is VHC the next Google? The market’s current valuation seems to suggest it is that and much more.
Very few times in the last 15 years have I found a stock as expensive as VHC. The only comparable situation that comes to mind is Google (GOOG) at its IPO.
SanDisk Corporation (SNDK) is not getting the credit it deserves for the level of profitability it achieved in 2010. And… Read more »
Recent weakness in Intel (INTC)‘s stock presents an excellent buying opportunity for investors. As one of March’s most attractive, INTC offers the rare combination of strong cash flow growth with a remarkably cheap valuation.
Caterpillar Inc. (CAT) gets our Dangerous Rating. This means CAT’s quality-of-earnings are not attractive and the stock’s valuation it very expensive.