Price The Market Part 50
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 am attempting to price the market and I figured the S&P500 would be a good start.
315. PACCAR Inc. (NASDAQ: PCAR) has been bouncing back from 2008. Target: $40-$50. Outside of that range, you know what to do. Overall, I'm not a huge fan. I don't see much upside past that, but I do expect to see higher prices in the short term as PACCAR bounces off from below my lows. PACCAR is a solid company with a proven track record but I don't want to enter at this price. Don't be confused by the insider purchases, there are far more sales, even by the insider who did make the purchase.
316. Ingersoll-Rand PLC (NYSE: IR) is closing out the process of bottoming. The floor is set at $30. Target: $35-$40. Sure, the bottom line is volatile, but their top line has posted growth even in 2008, which is pretty good for a cyclical. I'm a fan. Estimates put bottom line growth for the next three years at 15% CAGR ballpark and the price presently just doesn't do that kind of growth justice. I also think that the US housing market is in the process of bottoming ex-European crisis blowup. I think they'll resolve it over there and sure, banks might need to be recapitalized. Heck, countries might need to be recapitalized. I think that management is making the right decisions to minimize risk and set the stage for solid growth in the coming years.
317. Pall Corp. (NYSE: PLL) is shooting into all-time highs. Sell it. Target: $47-$55. I think that any upside left in Pall Corp is simply a function of the company surpassing all-time highs and running into overvaluation. Justifying a price of $60 or over is a fools game. Pall has a buyback on the table and I certainly hope that they have taken it offline for now, but I can't confirm that and for the most part companies love buying back their stock at higher prices. Trading at 18x FY 2012 guidance, I am going to recommend that you sit out on this one for a short while and try to get back in and a better price.
318. Norfolk Southern Corp. (NYSE: NSC) is kicking out new all-time highs. They are consistently profitable and they are killing it this year. I think that analysts have their growth rate pegged higher than reality will allow. Target: $67-$80. I think that there is upside here as the valuation isn't too steep but at the same point there is extreme downside risk if we get an economic slowdown out of Europe, which I think will be effectively swept under the rug this time around. Things were looking rough Q3 of last year, but then the global powers in charge decided to pursue an easier money policy. I think we'll see $80, but I won't be betting on it.
Extra: Ametek (NYSE: AME) is close to setting new all-time highs as well. Target: $40-$45. I think that a lot of the future growth is priced in and would want to wait for a better entry point. If I was an owner I would have sold the rip above $45 and presently be preparing to re-enter below $40. I think this one is topping and getting ready for a pullback. From an operations standpoint, things are the best they've ever been. At 20x earnings and 17x forward earnings, I'll watch from the sidelines and hope that lower prices are in the near to mid future and that the fundamentals continue to improve as I expect they will.
That's all for now, send me your companies: globalspeculation at gmail.com
Motley Fool newsletter services recommend PACCAR Inc. The Motley Fool has no positions in the stocks mentioned above. bradford86 has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.