Closing Comment
Closing Comment - September 9, 2010
For the second straight day, the bulls beat the bears, and all the major U.S. indexes were up. That said, at the close, the indexes were off from their earlier highs. The S&P 500 led the way, gaining 0.5%, or five points. The Dow and NASDAQ both advanced around 0.3%. On the New York Stock Exchange, advancers beat decliners at a 3-to-2 rate. In particular, Beazer Homes (BZH) and Royal Caribbean (RCL) both advanced more than 5% on the day.
Stock Highlight
Adobe Should Benefit From a Policy Change at Apple
Software designer Adobe Systems (ADBE) stands to benefit from a policy change at Apple (AAPL), which has relaxed restrictions on developers regarding the use of third-party software, such as Adobe’s Flash, in the operation of applications for Apple's portable devices. Rising security concerns online had been the reason for the computer giant’s previously firm stance.
Stock Highlight
Dow 30 Profile: Exxon Mobil
Petroleum industry leader Exxon Mobil (XOM) is currently in an expansion phase that is helping to boost production of oil and natural gas. Its buildup of operations in refining and chemicals is more selective, though, targeting fast-growing Asian nations. The company’s size, efficiency, and financial strength are truly noteworthy. The stock is a core energy holding.
Stock Screen
Stock Screen: Dividend Paying Healthcare Companies September 8, 2010
When investors think about health care stocks, growth is often the first word that pops into their minds. This happens with good reason, as healthcare issues are often quintessential growth stocks. However, although healthcare is not traditionally associated with income, a number of healthcare companies such as Johnson & Johnson (JNJ) and Merck (MRK) pay dividends, and some of these stocks offer solid yields on both a relative and an absolute basis.
Commentary
The Winds Of Change Are Blowing Across U.S. Energy Sources
Alternative energies will likely begin to show widespread acceptance in the near future. This trend offers an interesting opportunity for investments. Not only can you potentially tap into the “next big thing”, but you would also be supporting the efforts to make the environment in which we live a cleaner, healthier place to call home.
Stock Highlight
UDR: Opening Doors to the Future
UDR (UDR) a Real Estate Investment Trust is using mobile technology in a new way to enhance its customers’ experience. The company has been able to connect with clients and potential clients like never before by using platforms like the web and, more recently, Apple’s (AAPL) iPhone.
Stock Highlight
Using the Value Line Page: McDonald’s September 3, 2010
In the late 1990s and early in the new century, investors were concerned that McDonald’s (MCD) was no longer a fast growing company. As a result, its shares dove during 2002. Since hitting a low of $12 a share in early 2003, McDonald’s has proven that growth at this multinational food chain is anything but over.
Stock Screen
Stock Screen: Major Insider Purchases and Sales September 6, 2010
There are any number of events that investors use as buy and sell signals. One of the most often viewed is insider decisions. This week, we ran a screen of insider purchases and sales and turned up interesting insider buying at Dish Network (DISH), PharMerica (PMC), and Titanium Metals (TIE). Selling activity, meanwhile, was seen at Medicis Pharmaceutical Corporation (MRX).
Using the Value Line Page: Johnson & Johnson August 27, 2010
Healthcare-related companies have been out of favor of late, which should present investors with long-term investment opportunities. This may very well be the case with Johnson & Johnson (JNJ). The Value Line research report for company helps to show why.
Performance of the Model Portfolios: August, 2010
Value Line manages four 20-stock Model Portfolios. They are reviewed in each week’s Selection & Opinion. August was a challenge for each of the portfolios. Portfolios I, II, and III declined more than their common benchmark, the S&P 500 Index (adjusted for dividends), which fell 4.5% for the month. In contrast, the loss posted by Portfolio IV was narrower than its benchmark, the Mergent Dividend Achievers Index, which declined 2.7% in August.
Stock Screen: Low-Risk Stocks for Worthwhile Total Return – September 3, 2010
Conservative investors can readily find low-risk stocks. Of course, there is a tradeoff between risk and return, and low-risk securities often produce commensurately low returns. With this in mind, we screened for stocks that combine below-average risk with worthwhile total return potential over the long haul. Given our stringent criteria, our screen only produced a few names, most of which are blue-chip companies like Intel Corp. (INTC).
The Value Line Industrial Composite - August 13, 2010
This week we are updating our forecast for The Value Line Industrial Composite (last published in Selection & Opinion on November 6, 2009). The Industrial Composite represents the pooled results of 886 major industrial companies and provides a yardstick for evaluating the historical performance and future prospects of the diverse industrial businesses reviewed by Value Line. All of the companies included in the Composite must possess operating histories of at least eight years.
What is a Relative PE and Why is it Important?
Before we can examine a stock’s Relative P/E (price to earnings ratio), we first need to look at its basic P/E. At Value Line, this is calculated by dividing the recent price of the stock by the total of the last six months of earnings and the next six months of estimated earnings. The resulting figure shows the multiple that investors are currently willing to pay for one dollar of earnings. As is the case with most financial ratios, P/E means very little when viewed on its own, which is why Relative P/E is so important.