Price The Market Part 6
Glen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Hi, my name is Glen Bradford and I finally decided to undertake an idea that I've had for quite some time. I have decided to price the S&P500.
28. Genuine Parts (NYSE: GPC) has a fairly solid dividend even though it's near all-time highs. Their dividend as far as I can tell is sustainable too. That said, they are a little rich for my taste. I figure they are worth between $45 and $55. Where's the growth that is presently priced in going to come from? That I have no idea.
29. Goodyear Tire & Rubber (NASDAQ: GT) is cheap on a price to sales basis. They are cheap on what is expected from them on a forward earnings basis. That said, they've got lots of European exposure, yuck. Note that their product lines are shifting toward higher end tires. That said they are setting records. I'm assuming that their higher material costs are a direct result of better tires. As such, I'll run with this one that made 60 cents this last quarter. Outperform. Target: $15-$25.
30. Harley-Davidson (NYSE: HOG) is Milwaukee-based, which is important to me since I lived there. Goldman recently put out news that I should buy calls on the HOG and frankly I've always done well doing the opposite of their advice. That said they upped their dividend this year and do have the potential to fulfill their old legacy and trade higher. Target: $34-$44.
31. Harman Int'l Industries (NYSE: HAR) apparently decided that after more than a decade of paying a paltry dividend of around a penny to up the ante and is now paying 7x as much. Jim Cramer has a worthwhile interview for those of you new to the story. I can't say that their belief in emerging markets needing as much audio infrastructure as they think they need will come through, but who knows. I do believe that as the rich get richer, they will want the highest end audio possible. Target: $37 to $50. Outperform.
32. Hasbro Inc (NASDAQ: HAS) kissed $50 and then ran back down to the $30's for cover. During the worst part of 2009 they dropped to the mid $20's. Since then, they've kicked up their dividend and are yielding around 3.29% on a trailing basis. I'm going to say this is worth $40-$45. Outperform.
33. Home Depot (NYSE: HD) is a play on the American Consumer going out and at least maintaining their home. Since 2007, their revenues have declined and so has their operating income. I think that they're a little pricey given my perspective that there are still 1-2 years before home prices start their next leg up but that at the same point, ex-Eurocrisis, we are in a muddle through scenerio where things for the most part don't do much. Price Target: $35-$45.
Wildcard: Central European Distribution Corp (NASDAQOTH: CEDCQ) sure is cheap. It's worth around double on a bad day but you know how lower prices cause panic which cause lower prices. It's a fire sale! Their TTM EBITDA is $123.4M and for a company worth $439M, I'd like to see that price double. This is a story of a terrible currency. May the Zloty cause all sorts of ruckus. Easily worth $10+.
Glen and his investors have no positions in any of the companies mentioned.