30 Stocks Worth Investigating for 2009

According to MotleyFool.com, InvestorPlace.com, Jubak’s Journal, Cramer, and FortuneMagazine.com these are the most attractive stocks to own in 2009.

Compare the sales growth priced-in to justify the current stock price (VE Sales Growth) to what the company has achieved in revenue growth over the last five years (5 Year Median Sales Growth) to see if what’s priced-in is a reasonable number for the company to meet or exceed expectations. Couple the expectation information with AFG’s ranking for a stock’s attractiveness relative to the universe (Value Score AFG) to find companies that we find attractive on a default basis that also have low expectations for growing sales compared to what they have delivered the past 5 years. Companies with High Value Score’s and low sales growth expectations will be the companies on this list that are more likely to out-perform.

Comments

[The Curious...:]

A very interesting list. Is it possible for you to explain the methodology used to assess expected sales growth and the value score?

Jan 06 12:08 PM

[Dan Jacome:]

elaborate on how Medco fits in there and your overall method to get to this list

Jan 06 02:42 PM

[feedback:]

Here is a link to some AFG basic concepts, we are working on more material to post on Seeking Alpha that will elaborate on this process.

Thanks


www.valueexpectations....

Jan 06 04:17 PM

[feedback:]

Here is a link to some AFG basic concepts, we are working on more material to post on Seeking Alpha that will elaborate on this process.

Thanks

www.valueexpectations....



On Jan 06 02:42 PM Dan Jacome wrote:

> elaborate on how Medco fits in there and your overall method to get
> to this list

Jan 06 04:18 PM

[User 283977:]

I see the list compilation is somehow dependent on past five year sales growth data. Those particular performance figures were obtained under market conditions far different from today. The economy is contracting and job losses are accelerating. Everything is changed, or is going to change.

A good example of the importance of that issue is demonstrated by the stock at the bottom of the list. Pulte Homes (PHM). A housing stock, in this market?? It took less than one minute to find that PHM was downgraded by Fitch on 12/12 with a negative outlook. PHM discontinued their dividend on 11/24. The founder and Chairman of Pulte Homes filed a form 144 on 12/3 where he announced he was selling 5 million shares of PHM.

I can certainly see why PHM has low sales expectations for 2009. What I don't see is any reason why anyone should consider buying PHM expecting it to be a good investment because it has low sales expectations coupled with good performance delivered under totally different market conditions. The logical basis of the decision support tool does not work for PHM.

How would you modify the logic to guard against this issue?

Jan 06 04:55 PM

[Market Folly:]

thanks for compiling this all into one comprehensive list, very helpful! one name stuck out to me in particular, Lorillard (LO). This one has seen massive hedge fund buying over the past few quarters. We've covered their hedge fund portfolio movements and have noted that many of these value oriented funds have picked up shares of LO including:

Chase Coleman's Tiger Global: www.marketfolly.com/20...

Daniel Loeb's Third Point: www.marketfolly.com/20...

plenty more have picked it up, just search "LO" in the search bar on our blog, it really is astonishing how many prominent funds have picked up shares.

Jan 07 01:00 PM

[oldman:]

GE has been on many buy list for at least 10 years.Great call, huh?

Jan 07 07:31 PM

[CHK Burned:]

Chesapeake continues to be overleveraged on future returns based on an over supply of natural gas. The $75 million dollar gift to Mr. McClenden is further proof that Chesapeake expects further decline in it's ROA. The stock lost over 60 percent of it's value in 2008 and it's still rated as an outperform? Would somone please enlighten me why this company continues to be rated so high?

It sounds to me like the board of directors is filling Mr. McClenden's pockets for his personal stock losses and is leaving other shareholders high and dry.

I really think that your list is a "sheeple" mentality. I see buys in WFC, CX, GE & DE.

Jan 08 11:53 AM

[applesauce:]

Hedged a large amount of gas at over $ 8 for two years and sold a large amount of land to majors in partnership. When nat gas comes back, and it will, they can leverage huge positions quickly with rigs and equipment company owned. It's -27 in the mid west and they are burning gas and Russia is playing games which will certainly cause a international event .


On Jan 08 11:53 AM CHK Burned wrote:

> Chesapeake continues to be overleveraged on future returns based
> on an over supply of natural gas. The $75 million dollar gift to
> Mr. McClenden is further proof that Chesapeake expects further decline
> in it's ROA. The stock lost over 60 percent of it's value in 2008
> and it's still rated as an outperform? Would somone please enlighten
> me why this company continues to be rated so high?
>
> It sounds to me like the board of directors is filling Mr. McClenden's
> pockets for his personal stock losses and is leaving other shareholders
> high and dry.
>
> I really think that your list is a "sheeple" mentality. I see buys
> in WFC, CX, GE & DE.

Jan 13 12:17 PM

[Mad Hedge F...:]

The longer crude stays below $40, the more production is being taken off the market. At this stage all 35 million barrels of storage at the Cushing, Oklahoma delivery point for west Texas intermediate are brimming with crude. The 709 million barrel Strategic Petroleum Reserve (SPR) is nearly full. And there is another 50 million barrels stored in supertankers at sea which is building by the day. Demand has collapsed so fast, that oil companies can’t shut down production fast enough. The scary thing about this is that when the next crude spike upward in crude comes, it will be worse than the last one. Take advantage of the current distress prices to accumulate oil infrastructure stocks. Kinder Morgan Energy Partners (KMP) has a PE multiple of 25 and a dividend yield of 8.3%. Enterprise Products Partners (EPD) has a $10 billion portfolio of fractionation facilities, storage, offshore drilling platforms, and 32,478 miles of product, natural gas, and crude pipelines, and carries a modest PE multiple of 12 X and a dividend yield of 9.2%. More expensive Kinder Morgan Energy Partners (KMP) with a PE multiple of 25 X and a dividend yield of 8.3% is also worth a look see.

Feb 20 12:37 PM