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STOCKS ARE STILL CHEAP despite market run up

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November 17, 2009 – Comments (8) | RELATED TICKERS: JNJ , WMT

If any one is taking money off the table because the market run up consider the vaulations on some of these stocks

JNJ- $62.17 PE of 13.57  Forward PE of 12.64    1/13.57 IS A 7.37% YEILD ON YOUR STOCK BOND. JNJ ROE has averaged at least 25% year over year for last 10 years PE 01/00 was 33.8        

now image if that PE was what it is now and the PE never changes... in 2000 earnings per share $1.39 times 13.57=  $18.86 now at the same PE in 2009 it trades at $62.17 that would have been 3.29 times your money in ten years thats not even adding in dividends.  OK the growth might not be as robust these next 10 years but with ROE at 25% 30.5% last year i have a great deal of confidence the next 10 will be pretty darn good. And dont worry price has to go up lets say it did trade at $18.86 in 2000 and it still traded at $18.86 today.... earning $4.57 a share that means your stock yeild would be a wopping 24.3% ........image that return on your money.... and u might say well i cant get it at $18.68 in 2000.... well if u buy it today at 62.17... U ARE!!!!! wait 10 years to sell and reap the rewards(money without work)

Do the work on WMT-same thing.... Buffet is buying, ARE YOU?

Buy the VERY BEST and dont mess around with lesser companies

8 Comments – Post Your Own

#1) On November 18, 2009 at 8:31 AM, chk999 (99.98) wrote:

I dunno.Projecting the past blindly into the future gives great precision, but bad accuracy. Since the future for healthcare will almost certainly not be like the past, (healthcare will be more than 100% of GDP if trends continue and that can't happen) that projection looks too bullish to me.

While stocks were certainly overvalued in summer of '07 and were certainly undervalued in march of '09, it would take some doing to convince me that the market is anything less than fair valued right now. Buying things at fair value or worse doesn't give good long term results. 

 Chris - long JNJ but not expecting 25% ROE for the next decade and not buying any at this price.

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#2) On November 18, 2009 at 9:16 AM, Gemini846 (88.73) wrote:

It's funny but every $ and their mother is chasing flagship companies just like you suggest.

Buy the VERY BEST and dont mess around with lesser companies.

There is so much uncertainty that people are parking thier money with these behemoths and running up the price. The number of stocks advancing is less than the number declining and the volume is terrible, but the money that is chasing the few companies that can make money time and again.

Buy it now? No. Why be a lemming? Sell it now if I owned it outright? Heck no since the yield reduces the risk.

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#3) On November 18, 2009 at 9:23 AM, Rebkong1 (< 20) wrote:

stocks worth nothing since your dollar is headed that way

 

buy all you want american fools...you get nothing for nothing 

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#4) On November 18, 2009 at 11:29 AM, chk999 (99.98) wrote:

Rebkong1 - amazing stock picking accuracy you have there. I've very impressed.

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#5) On November 18, 2009 at 11:45 AM, catoismymotor (71.79) wrote:

chk999, I am convinced Rebkong1 is Alstry's new handle.

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#6) On November 18, 2009 at 12:06 PM, prose976 (< 20) wrote:

I just love these self-riteous, indignant individuals who were partying and riding the wave of gains before the big slump.  After losing a good chunk of their gains, they are now pointing fingers and blame at the same economy they were embracing and rejoicing over so recently.  -  REBKONG1

Funny how it appears that all other governments and economies are pristine and are doing business the right way according to these clowns.  But if you really look at it closely, the only reason economies around the world collapse in unison is because those in charge of banks and money flow AROUND THE WORLD all enjoy untouchable positions, reap huge rewards and walk all over the citizens of the world.

It's not just the U.S., my friend, it's corruption on a global scale.  And you, and I are, in a way, casualties of their carelessness, greed and immorality.

But, wishing for the demise of an entire economy/country, etc. is like hoping your neighbor's house blows up - no doubt your house will suffer some serious damage and your neighborhood property values will probably suffer as well.

Why not approach a little more constructively and offer some points for discussion how we can improve our economy?

Fool on!

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#7) On November 18, 2009 at 3:08 PM, chk999 (99.98) wrote:

Cato - that would explain a lot.

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#8) On November 18, 2009 at 3:27 PM, budshex (< 20) wrote:

in rebkong's last post he was a global-warming denier/ "american patriot" and now he's a anti-american foreigner. must have been a hell of a week.

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