What's Going On With Jinpan International? [View article]
Hello Jim, I think it means they should have a better position than the average player in their industry...unfortunately that does not seem to be enough to ensure good financial results for the company! Thank you for your comment, Ben
General Mills: Good Business, High Price [View article]
Hello Sugar Charlie, I guess you struck a chord...I've been thinking quite a bit lately about my valuation criteria for companies I find to be great. The case in point right now for me are WMT and PEP which both have spotless records and are not that expensive on a 3-years earnings EPS (per Graham approach). While the valuation does not leave large margin of safety in many ways I think the margin of safety is in the company quality itself and hence may not need a large discount!!! I'm sort of struggling here but I think I'm coming to a conclusion. Have a great weekend! Ben
Stryker: Good Investment Candidate, Albeit Pricey [View article]
Hello DCarroll, I agree with you. The cash flow is higher than earnings which explains why there is a bit of a difference between the P/E and the cash return (FCF/EV) in the valuation section. On a cash basis SYK does indeed look better. Have a great weekend! Ben
General Mills: Good Business, High Price [View article]
Hello CPA, I am first and foremost looking for solid businesses with strong balance sheets... at a good price. Your comment is very "a propos" as I've been wondering over the last 2-3 days if my valuation threshold has been a bit too rigid - namely having a P/E below 15 and a EV/FCF<15 as well. One approach would be to go back to Graham's criteria of having an earnings yield greater than 2x the current AAA bond yield which at the current rate would mean a P/E of ~16.5x or lower...which would get GIS over that threshold. What do you usually consider for valuation? Happy thanksgiving, Ben
General Mills: Good Business, High Price [View article]
Hello Sugar Charlie, I agree that at the right price then buyng GIS is a good idea. For now I find it a tad too expensive and a little too much debt. However once those two (espcially the debt) get better I'll consider GIS a great idea. Are you a CFA too? Cheers, Ben
Hello jagmanvdp, Please see my response below to chemfro. In a nutshell this is a quick screen before looking more into details in FCF generation etc. Cheers, Ben
Hello Chemfro, Thank you for your comment. I completely agree with you! Once I have identified candidates I do what I call a review in which I evaluate FCF/Sales, ROE, ROA and growth on the business side. I also look into Debt/Equity and current ratio for B/S health and then finally I look at P/E and EV/FCF for valuation. If you have a chance to read one of those, please let me know your thoughts! Cheers, Ben
What's Going On With Jinpan International? [View article]
I think it means they should have a better position than the average player in their industry...unfortunately that does not seem to be enough to ensure good financial results for the company!
Thank you for your comment,
Ben
General Mills: Good Business, High Price [View article]
I guess you struck a chord...I've been thinking quite a bit lately about my valuation criteria for companies I find to be great. The case in point right now for me are WMT and PEP which both have spotless records and are not that expensive on a 3-years earnings EPS (per Graham approach). While the valuation does not leave large margin of safety in many ways I think the margin of safety is in the company quality itself and hence may not need a large discount!!! I'm sort of struggling here but I think I'm coming to a conclusion.
Have a great weekend!
Ben
Johnson & Johnson: Strong Company At an Attractive Price, Part 2 [View article]
Thank you very much for the endorsement!
Cheers,
Ben
Stryker: Good Investment Candidate, Albeit Pricey [View article]
I agree with you. The cash flow is higher than earnings which explains why there is a bit of a difference between the P/E and the cash return (FCF/EV) in the valuation section. On a cash basis SYK does indeed look better.
Have a great weekend!
Ben
General Mills: Good Business, High Price [View article]
Thank you for your thoughts. I am also looking at PEP which I also think is pretty close to a buy for me.
Have a good weekend,
Ben
General Mills: Good Business, High Price [View article]
But would you still buy GIS at current prices? or would you rather consider it a hold at this point?
General Mills: Good Business, High Price [View article]
I am first and foremost looking for solid businesses with strong balance sheets... at a good price. Your comment is very "a propos" as I've been wondering over the last 2-3 days if my valuation threshold has been a bit too rigid - namely having a P/E below 15 and a EV/FCF<15 as well. One approach would be to go back to Graham's criteria of having an earnings yield greater than 2x the current AAA bond yield which at the current rate would mean a P/E of ~16.5x or lower...which would get GIS over that threshold.
What do you usually consider for valuation?
Happy thanksgiving,
Ben
General Mills: Good Business, High Price [View article]
I agree that at the right price then buyng GIS is a good idea. For now I find it a tad too expensive and a little too much debt. However once those two (espcially the debt) get better I'll consider GIS a great idea.
Are you a CFA too?
Cheers,
Ben
What's Going On With Jinpan International? [View article]
Thank you for your comment - It seems consistent with what the numbers are saying as well.
Cheers,
Ben
12 Morningstar Dividend Stocks; 3 Investment Ideas [View article]
Ben
12 Morningstar Dividend Stocks; 3 Investment Ideas [View article]
Please see my response below to chemfro. In a nutshell this is a quick screen before looking more into details in FCF generation etc.
Cheers,
Ben
12 Morningstar Dividend Stocks; 3 Investment Ideas [View article]
Thank you for your comment.
I completely agree with you! Once I have identified candidates I do what I call a review in which I evaluate FCF/Sales, ROE, ROA and growth on the business side. I also look into Debt/Equity and current ratio for B/S health and then finally I look at P/E and EV/FCF for valuation.
If you have a chance to read one of those, please let me know your thoughts!
Cheers,
Ben
12 Morningstar Dividend Stocks; 3 Investment Ideas [View article]
Thank you for the comment. I will be posting a review of MCD soon, stay tuned!
Ben
12 Morningstar Dividend Stocks; 3 Investment Ideas [View article]
Why I'm Passing on Target [View article]
Glad you liked it.
Have a good week,
Ben