Paul Price

Value, growth at reasonable price, contrarian, newsletter provider
Paul Price
Value, growth at reasonable price, contrarian, newsletter provider
Contributor since: 2008
Company: Peter Lynch Portfolio Newsletter
An excellent presentation. Thank you for the good work.
TROW looks very cheap.
It's a best buy now.
PR had $120 million to pay for employee bonuses last week.
No money for their bondholders, though.
This explains why "simply printing more money" would be disastrous...
http://bit.ly/1SHN9fs
Similar options activity (unusual call buying) showed up some months ago on Precision Castparts (PCP).
http://bit.ly/1T95k26
The Wall Street Journal just announced that Berkshire Hathaway is in the final stages of a friendly buyout of PCP for more than $30 billion.
Options action often tips off coming events if you know what to look for.
An LBO on KORS could be brewing....
http://bit.ly/1KVhszg
Another take on Disney - Its drop was predictable.
http://bit.ly/1KVeRp7
Pardon the title, which came from my editors. It was not my choice.
For an alternative viewpoint on KMI see ...
http://tinyurl.com/ob8...

What the Greek situation truly represents.
http://bit.ly/1ggeubp
Bear Sterns did not go bankrupt.
It was bought out at a very low price ($2 /share initially, later revised to $10).
That is why creditors did not lose money. Taxpayers did lose, however, as there were financial incentives given to the acquiring firm for taking on the troubled company and its problems.
If 100% of current Greek debt was written off...
Greece would still be unable to function as it has previously. Their government has no idea of what 'living within their means' entails and no political will to do that.
Cutting off new credit is the only way to get them to understand economic reality. Politicians there, and here in America, have promised things that simply cannot be delivered.
http://bit.ly/1ggeubp
The best view of this Greek situation.
I was quoting YOUR calculation for the trailing 10-years.
An average implies there were periods of higher, and lower, multiples.
Ten years is a statistically significant indicator or how the market actually valued UPS. That historical P/E level does not match what YOU think it should be going forward.
History is real. Your projections are not grounded in fact.
You wrote that UPS has a historical 10-year median P/E of 19.15x.
Assuming that "the market" should pay 21.28x earnings (how precise- to the hundredths of a point!) flies in the face of the stock's actual trading history.
That makes your price target highly suspect.
EMR is one of the best low-risk stocks available right now.
15% - 25% in total return over the next 12- 18 months looks quite predictable.
Disney has a 10-year median P/E of just 16x (source: Value Line).
Yesterday's close was its highest valuation since early 2005. Paying too much is a total return killer. Disney peaked at $30 in the spring of 2005 and was available cheaper than that more than six years later, at $28.20, as recently as October of 2011.
You are fooling yourself if you expect a good ROI from today's price.
Use this link to see an alternative viewpoint on INTC.
http://bit.ly/1KTRfz4
A nice treatment of a complex topic.
Thank you for publishing it.
The January Effect refers to outperformance in January of mostly small-cap stocks, but also of other shares that had been beaten down badly due to tax-selling during December.
It did not refer to an overall extra pop in the broad indices.
TGT showed FY 2007 EPS of $3.33. TGT earned $4.38 in 2012.
They now expect $3.20 for FY 2014 (excluding their 44-cent data breach charge).
Target's shares peaked at $70.80 in 2007 and finished last week at $71.51 for a 1% cumulative move over 7.5 years.
Wal-Mart far outperformed TGT over the same period in both EPS and shareholder total return.
Why pay a premium price for what has been extremely crappy management?
XOM's 10-year median multiple has been 11.0x, so its 12 P/E, on likely to decline 2015 estimates, is not especially cheap based on its previous trading history.
Integrated giant Chevron (CVX) offers a similar picture. A moderate current P/E that is still well above its own normalized 8.5x multiple.
The dividend yields are decent but the stocks have a bit of downside and not much profit potential unless crude prices head upwards again.
I agree with creese. It is hard to take away any actual advice from your article.
Chuck,
Your article is a very nice presentation on value investing.
I've been using similar valuation techniques with great success for more than 35 years.
As a 'friend of Barrack'... Buffett will get a free pass on this.
Why did it take 5 years to find out there were no supporting facts?
Using a 2005 starting date for your calculation period seems inappropriate since the complexion of the company changed radically with the 2012 Medco merger.
The numbers, since the business combination, don't look impressive in ESRX's current iteration.
Separately: Putting 80% of your invested capital in any one stock is very bad risk management regardless of how well you might like a particluar company.
ConAgra (CAG) has a low P/E, a better than 3% dividend and great brand names. They and Kraft (KRFT) look like good bets to monetize their hidden values.
It's now been about 18-months since my article was posted touting ORCL over SAP.
Since then ORCL has risen 35.6% (from $30.92 to $41.93) while SAP has declined by 1.02% (from $77.21 to $76.42).
Case closed.
I'm declaring victory.
For an alternative, and well documented, veiwpoint click here http://bit.ly/1hHdOpA and here http://bit.ly/1hHeATe
There has never been a mechanical system that generates stock market riches.
Thought and judgment has always been required.