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  • Why Jim Cramer's "Dogs Of The Dow" Will Stay Dogs

    On Monday night, Jim Cramer, reviewed the "Dogs of the Dow", the five worst performing (from a price point of view) components of the DOW index: IBM, XOM, CAT, CSCO, T.

    I've gathered the relevant growth statistics in this article below and they are indeed a mixed bag - nothing really stands out as good. Jim was negative on all stocks save for Exxon Mobil. All of these stocks feature dividends, but only AT&T's dividend is noteworthy.

    I agree with Jim that XOM doesn't look too bad here, its projected growth pattern is heading upward, but there is still a lot of uncertainty. Looking below, you can see that its growth expectations vary from positive to negative. If it can deliver at the high end of expectations, then you could see some real price appreciation, but the price has already run a bit from $86 to $93 and that makes me nervous, however, there has been a short term sell-off, so the bullish among you should enter now. XOM did clear its previous high of $94, technically, this is a good sign.

    (click to enlarge) Caterpillar has perhaps the ugliest numbers I've assembled here, but this is a situation where the bad news has likely been priced in and the growth picture is projected to improve from its awful base. For more on CAT, see here:

    Why you might want to take another look at CAT

    Cramer noted that IBM has good EPS growth, but no revenue growth, this coming from its stock buy backs, among other reasons. There is nothing in the future that indicates an improvement in the revenue picture.

    StockPEPrice/SalesDiv Yield (Trailing Annual)Volatility
    T25.781.45.1%0.15
    CAT16.130.92.6%0.18
    XOM12.2112.6%0.12
    CSCO11.562.32.4%0.31
    IBM12.441.92.1%0.22
    StockEPS Qtr. On Qtr. GrowthRev Qtr. On Qtr. Growth
    T14.3% 10/2013 7.6% 7/2013 11.7% 4/2013 N/A 1/20132.2% 10/2013 1.6% 7/2013 -1.4% 4/2013 0.2% 1/2013
    CAT-42.9% 10/2013 -42.9% 7/2013 -44.7% 4/2013 -55.2% 1/2013-18.4% 10/2013 -15.8% 7/2013 -17.3% 4/2013 -6.7% 1/2013
    XOM-14.4% 10/2013 -54.5% 8/2013 6% 4/2013 11.3% 2/2013-2.4% 10/2013 -16.4% 8/2013 -12.3% 4/2013 -4.4% 2/2013
    CSCO-5.1% 11/2013 16.8% 8/2013 15% 5/2013 47.5% 2/20131.7% 11/2013 6.2% 8/2013 5.4% 5/2013 4.9% 2/2013
    IBM10.5% 10/2013 -12.9% 7/2013 3.4% 4/2013 11.2% 1/2013-4.2% 10/2013 -3.3% 7/2013 -5.1% 4/2013 -0.6% 1/2013
    StockCurrent Qtr EPS Growth ForecastNext Qtr EPS Growth ForecastCurrent Qtr Rev Growth ForecastNext Qtr Rev Growth Forecast
    TN/A N/A N/A7.5% ( High ) 3% ( Ave. ) -7.5% ( Low )2.9% ( High ) 1.4% ( Ave. ) -1.3% ( Low )4.3% ( High ) 2.5% ( Ave. ) -0.3% ( Low )
    CAT33.5% ( High ) 23.9% ( Ave. ) 18.2% ( Low )12.2% ( High ) -4.6% ( Ave. ) -14.5% ( Low )-12.3% ( High ) -15.4% ( Ave. ) -20.8% ( Low )3.7% ( High ) -1% ( Ave. ) -6.4% ( Low )
    XOM5.4% ( High ) -10.1% ( Ave. ) -20.6% ( Low )4.7% ( High ) -6.1% ( Ave. ) -20.3% ( Low )3.9% ( High ) -5.1% ( Ave. ) -14% ( Low )9.1% ( High ) 0.5% ( Ave. ) -5.8% ( Low )
    CSCO-20.3% ( High ) -22% ( Ave. ) -23.7% ( Low )8.7% ( High ) 4.3% ( Ave. ) -2.2% ( Low )-7.9% ( High ) -8.8% ( Ave. ) -10.1% ( Low )-2.5% ( High ) -7% ( Ave. ) -10.4% ( Low )
    IBM19.4% ( High ) 17.1% ( Ave. ) 12% ( Low )30% ( High ) 21.5% ( Ave. ) 12.2% ( Low )-0.9% ( High ) -3.7% ( Ave. ) -7.8% ( Low )1.2% ( High ) -0.4% ( Ave. ) -3% ( Low )

    I've included the quarter on quarter chart for XOM, as it is Jim's favorite. Jim seems to think it will come in at the top of the range of expectations, and is thus, bullish. The fact that it has run a bit in price already makes me a bit nervous. Perhaps the market was a bit ahead of Jim in this case. Still, if XOM returns to solid growth, I could see Jim being quite right here.

    More charts like this on: QoQ Charts

    Disclosure: I am long CAT.

    Dec 03 1:13 AM | Link | Comment!
  • Be Careful Going Into Big Lots Earnings

    Big Lots earnings are rapidly approaching - December 6th, 2013. I've compared it to some of its peers (COST DG) to see if it might be a buy going into, or coming out of earnings. I can't help but conclude that it is not. It seems far inferior to two of its peers in the same industry. It is cheaper than Costco and Dollar General, but when viewed in the context of its growth, it is quite expensive. It begs the question - how much should you pay for a company that isn't growing and isn't expected to grow? Big Lots has run a bit and its fundamentals look bad - be very careful.

    For more stocks side by side, check out this site.

    As always, the stock could surprise and return to growth, but it is not expected to when looking at the estimates. It would have to surprise quite a bit to justify its current valuation.

    There are problems with Costco and Dollar General as well. Dollar general looks to have nice consistent growth going forward, but it is priced richly relative to that growth. Costco, while a solid company, looks to be facing tough compares, given its strong EPS growth over the past year. Its sales look to be solid moving forward, but it also is priced a bit richly. While both of these companies look solid, you are not getting a good bargain if you enter now.

    As an aside Dollar General has reached a technical buy point if one is looking to initiate a position. Costco and Big Lots have both run a bit, and this bodes ill for Big Lots earnings.

    Earnings are approaching rapidly for: DG BIG COST. Check out how much they might bounce, or drop, here. (click to enlarge) (click to enlarge) (click to enlarge)

    StockPEPrice/SalesDiv Yield (Trailing Annual)Volatility
    BIG13.490.4N/A0.17
    COST27.080.56.5%0.14
    DG19.091.1N/A0.18
    StockEPS Qtr. On Qtr. GrowthRev Qtr. On Qtr. Growth
    BIG-13.9% 9/2013 -11.1% 6/2013 19.3% 3/2013 N/A 12/20120.7% 9/2013 1.3% 6/2013 5% 3/2013 -0.4% 12/2012
    COST0.2% 10/2013 18.2% 10/2013 37.8% 3/2013 30.1% 12/20120.8% 10/2013 7.9% 10/2013 8.3% 3/2013 9.7% 12/2012
    DG17.2% 9/2013 6.3% 6/2013 13.4% 3/2013 24% 12/201211.3% 9/2013 8.5% 6/2013 0.5% 3/2013 10.3% 12/2012
    StockCurrent Qtr EPS Growth ForecastNext Qtr EPS Growth ForecastCurrent Qtr Rev Growth ForecastNext Qtr Rev Growth Forecast
    BIGN/A N/A N/A3.2% ( High ) 0.8% ( Ave. ) -3.5% ( Low )5.8% ( High ) 2.3% ( Ave. ) 1.4% ( Low )1.5% ( High ) -1.3% ( Ave. ) -4.7% ( Low )
    COST14.7% ( High ) 9.5% ( Ave. ) 6.3% ( Low )-0.8% ( High ) -4% ( Ave. ) -6.5% ( Low )12.4% ( High ) 7.4% ( Ave. ) 5.3% ( Low )11.5% ( High ) 8% ( Ave. ) 5.8% ( Low )
    DG16.1% ( High ) 12.9% ( Ave. ) 11.3% ( Low )11.9% ( High ) 8.8% ( Ave. ) 5.7% ( Low )12.7% ( High ) 11.5% ( Ave. ) 10.5% ( Low )12.9% ( High ) 11.7% ( Ave. ) 9.6% ( Low )

    I've included the nice looking DG chart, showing its consistent growth in EPS and Revenue.

    More charts like this on: QoQ Charts

    Disclosure: I am long COST.

    Dec 02 5:22 AM | Link | Comment!
  • In The Online Travel Space Priceline (PCLN) Trumps Expedia (EXPE)

    Jim Cramer recently claimed in this article, that despite the 1900% gain, Priceline (NASDAQ:PCLN) is still cheap. I tend to agree with him, particularly when looking at a peer stock - Expedia (NASDAQ:EXPE). Both stocks have turbo-charged growth - one needs to focus on the top line growth as EXPE has had some funky EPS growth. For more head to head comparisons like this, check out SideBySideStocks.

    Looking down quickly at the tables below, Priceline has a lower PE, lower volatility, more consistent EPS growth, and stronger revenue growth going forward. I definitely give it the edge in this head to head. When comparing two stocks in the same industry, with similar business models, often one emerges as the clearly better company - that is the one you wan to own. In this case, it is Priceline.

    StockPEPrice/SalesDiv Yield (Trailing Annual)Volatility
    PCLN33.19.2N/A0.27
    EXPE59.741.70.9%0.45

    Priceline has definitely been the consistent EPS grower over the past few quarters.

    StockEPS Qtr. On Qtr. GrowthRev Qtr. On Qtr. Growth
    PCLN34.8% 11/2013 21.9% 8/2013 34.5% 5/2013 27.5% 2/201333.1% 11/2013 26.6% 8/2013 25.6% 5/2013 20.2% 2/2013
    EXPE0.8% 10/2013 -32.9% 7/2013 N/A 4/2013 -90.7% 2/201316.9% 10/2013 15.9% 7/2013 23.9% 4/2013 23.8% 2/2013

    Going forward, PCLN has the advantage in revenue growth, while EXPE is coming up on easy compares, or even previous negative quarter EPS growth, hence the lack of data looking forward. In situations like this, focus on the revenue growth.

    StockCurrent Qtr EPS Growth ForecastNext Qtr EPS Growth ForecastCurrent Qtr Rev Growth ForecastNext Qtr Rev Growth Forecast
    PCLN53.5% ( High ) 47% ( Ave. ) 39.1% ( Low )64.9% ( High ) 48.9% ( Ave. ) 28.2% ( Low )31% ( High ) 26.8% ( Ave. ) 23.4% ( Low )34.4% ( High ) 26.7% ( Ave. ) 18.3% ( Low )
    EXPE2138.5% ( High ) 1699.2% ( Ave. ) 1469% ( Low )N/A N/A N/A23.1% ( High ) 16.9% ( Ave. ) 12.8% ( Low )19.6% ( High ) 15.6% ( Ave. ) 8.7% ( Low )

    Technical Analysis

    Beware, PCLN is overbought on a short term basis, and is hugging the top of its channel. If possible wait until it retreats to below that moving average. Hopefully the stock won't run away from you.

    (click to enlarge) I've included the quarter-on-quarter charts for these stocks as they can illustrate visually the growth data in the tables above. Consistency is what to look for in these charts - easy to see with PCLN.

    Source: QoQ Charts Source: QoQ Charts

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 22 11:34 AM | Link | Comment!
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