Price The Market Part 3
Glen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
My name is Glen Bradford and I felt like pricing the entire S&P500 one morning a few weeks ago. This is my attempt to do something that other people would consider impossible because I find it very possible. Join me on my pithy journey.
13. CBS Corp. (NYSE: CBS) has one of the more interesting landslide stock charts that I've seen. Looks like they've tried to fight it with dividends that they had to cut in 2009. I'm thinking somewhere between $20 and $30.
14. Coach (NYSE: COH) handbags are a staple of American women everywhere. I actually judge women by their purses and a coach purse means that they want to pay enough to not stand out and fit in as acceptable. The price is a little woozy for me considering this was in the $11's back in 2009. But, it shouldn't have been. That was a P/E of 5. The equivalent price today is $15. I'd say it's worth somewhere between $45 and $70.
15. Comcast (NASDAQ: CMCSA) isn't that exciting to me. I figure it belongs somewhere between $18 and $25.
16. D R Horton (NYSE: DHI) looks pretty overvalued by my metrics considering the US private sector balance sheet recession. It's trading at around 30x forward earnings at a best case. This is worth much less given the current operating environment. Price target $6 to $8. Underperform.
17. DeVry (NYSE: DV) is part of the sector of private educational services that I continue to fail to be a fan of. It's funny that their historical growth is impressive and they're trading at an 8x multiple. Frankly, I have no clue but I was looking into a private placement for another private educational services company that was alleging that student loans on a forward basis are going to be a function of the recently educated's ability to pay their loans off. They made the rest of these private educational services companies look like they were going to be losing some serious market share or at least ending their growth trajectory. Target: $25-$35. Underperform.
18. Darden Restaurants (NYSE: DRI) is priced about exactly where I'd expect it to be given the price of everything else on the list thus far. Target: $40-$50.
Wildcard: American Airlines (NASDAQOTH: AAMRQ.PK) raged up 59% yesterday. I have a little insight into this because I get trade notifications from my uncle's account who works for American Airlines and always trades on panic. He bought around $2 and sold somewhere around $0.30. Last I checked, you can't really make money owning airlines. Perpetual bankruptcy filing is part of the game and it's hilarious to see bankers try to engineer sustainable loans for them. My research indicates that the surge in price relates to an SEC filing from one of these bankers. The company has come forward urging caution suggesting that the common shares might be worthless. My advice: Listen to management. Worth $0. Underperform.
Glen and his investors do not own any of the companies mentioned.