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Ray Merola

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  • How To Identify Good Stocks, Part 1 [View article]
    Benjamin Graham was an outstanding fundamental investor and a clever writer, too.
    Apr 4 12:28 AM | 1 Like Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    You are welcome, Shawn. Hang in there and it will all fall into place. I enjoy the interaction with readers like you.
    Apr 3 11:14 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    mykie

    Prior to FAST graphs, I was able to generate the data from S&P 500 IQ reports, web site data, and corporate reports and filings. I still double-check some of the data with these sources, but the graphs are pretty darn good.

    S&P provides annual PE ratios whereas a normalized average can be done by hand; it even has high and low PEs for additional detail if you want it. However, a current report typically only goes back 10 years.

    Previous price info is easy to find via many sources. However, it takes time to correlate and organize it.

    Earnings data is easy to find, but tricky. It's important to measure operating earnings. This is reported differently contingent upon the source. The best place to get this is from the corporate web site.

    Finally, forward EPS can be gleened from several sources. Zacks, S&P, and Yahoo have some of it in various forms and function.
    Apr 3 11:13 PM | 2 Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Glad this article could start the journey for you, Pogoh. You may wish to check out Part 1 if you have not done so already. The two articles go hand-in-hand.
    Apr 3 11:08 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Express Scripts management is talking about it. The company generates considerable free cash flow. We shall stay tuned.
    Apr 3 06:19 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    I consider it a good day when I learn something new, too! Thanks for the comment.
    Apr 3 06:18 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Tony, I have seen some of your work and it is thoughtful and logical. I agree that P/E is not always the best story. The article touched on this point. Sometimes cash flow, FCF, or EBITDA multiples are best. However, day in and day out price, earnings and P/E multiples isn't a bad place to begin a thorough analysis.

    Congratulations on a fine stock selection track record.
    Apr 3 06:17 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    rali

    Actually not. I use FAST graphs and believe they are an excellent tool. For fundamental investors who actually roll up our sleeves and have done the analysis, it's a lot of work to dig up the raw data and calculate normalized, average P/Es, find 10-year old operating earnings, synchronize stock price points, etc.

    Try it.

    My reason for using FAST graphs is that it compresses the amount of time I need to accomplish basic financial analysis. My time is valuable.

    What is your investment philosophy and by what metrics do you fulfill it?
    Apr 3 04:59 PM | 9 Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Indeed, Ptstanford

    Even if the P/E falls a bit, it's overshadowed by the high growth rate. A stable P/E and met earnings forecasts would result in an investment home run.

    My investment M.O. is primarily to seek stocks below fair value (as described in Part 1). However, a little diversification into the growth world is good. However, if a growth stock misses a few quarterly earnings expectations it can be toast.

    More beta, but if carefully chosen perhaps more alpha.
    Apr 3 04:53 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 1 [View article]
    Dangerous stuff listening to me, raykrv6a! But thank you.

    (Very) long AFL.
    Apr 3 04:48 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    BuffaloBell

    I suspect you have overlooked 3 stock splits over the past 10 years. The split-adjusted price return over the period has been over 20% a year.

    However, the aforementioned in secondary. It is less important as to where a stock has been versus where an investors believes it will go.

    Even if Express Scripts' EPS growth eases to an average 15% over the next several years, and the multiple is compressed accordingly, investors may find it a profitable ride. I tend to emphasize current year EPS and one out versus longer-term projects. 2014 appears strong.

    While not covered in the article, ESRX is one of those stocks whereas free cash flow is a good yardstick. This likewise promises to be quite strong going forward.
    Apr 3 03:59 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Thank you SBF. I appreciate your bio. After reviewing it, I plan to "follow" you even though you came here to read my article.
    Apr 3 03:32 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 1 [View article]
    Yes, I figured you would appreciate them, Chuck. All the best.
    Apr 3 03:14 PM | Likes Like |Link to Comment
  • How To Identify Good Stocks, Part 2 [View article]
    Thanks for stopping by and the positive remarks, RS. Onward and upward.
    Apr 3 02:53 PM | 2 Likes Like |Link to Comment
  • Why I Sold All Of My Intel Shares This Week [View article]
    A key data point is Europe. The EU has been mired in recession for years and just recently has begun to show green shoots. This market is significant; representing developed nations and developed international businesses. When this region (in aggregate comparable to the United States) revives, I suspect it will provide a boost to PC sales. Businesses continue to provide employees with content-creating PCs (or PC hybrids).

    How well do investors believe future demand for this area has been forecast?
    Apr 3 08:00 AM | 2 Likes Like |Link to Comment
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