Sunday, March 12, 2017

A couple of Value investing names to keep you busy. They are PHM and BMY. I almost wrote about HSY Hershey Foods, but their joint venture with Lotte, the South Korean company was shut down in China temporarily. Hopefully not a sign of the times?

Dow Jones Industrial Average 20,902.98 (Up) Week Ending 03-10-2017
S & P 500 Average - 2372.60

I have been busy working on taxes, researching family genealogy, paying bills, and wearing many different hats. It has keep me from writing articles every week. Value stocks are not as easy to pick out as Growth stocks in this rollicking market. Sometimes you can get to close to the "third rail" with some of the Value stocks, such as I did with buying Adeptus Health, (Symbol ADPT, $2.13), a free standing Emergency Room hospital company. They ended up delaying their year-end 2016 -10K statement and the stock took a nosedive. My mistake was that the company only had $400 Million in annual revenues which allowed an uncalculated write-off, (even though they have a 3:1 Current Ratio), to devastate the stock price. A lesson learned here, be very vigilant with Small-Cap Value stocks because they could plunge into a dive that they may not recover from. We will find out what happens this week, when Adeptus Health is required to submit their report by March 16th. Stay away from this one for now.

So here are two that you can have confidence in:

Bristol Myers Squibb (Symbol BMY, $58.32) is recovering from some short term disappointments with two drugs not getting approved. They are an excellent company and will recover. They had a 22.3% quarter over quarter sales gain and have a good PEG Ratio and ROE. They also pay a 2.67% dividend.  

Pulte Group, Inc. (Symbol PHM, $23.53) is a residential home building company that is 60 years old. 28.4% quarter over quarter sales bodes well for this company. PEG Ratio of 0.73 and an ROE of 12.60. This company had $7.6 Billion dollars in sales last year so can weather a few interest rate raises by the Fed. Earnings for next year will be $2.68 per share and the company and analyst project a forward PE of 8.79. The company also pays a 1.53% dividend. 

I hope that you all have a great week,


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