Pick Your Price Target! 54
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 have a thing for pricing companies. I just can't stop doing it! I have a special one for you today. Stay tuned.
332. Roper Industries (NYSE: ROP) is out of my price range. Not only that but it's starting to get too expensive for me to want to establish a short. I think that that would happen at $100. Target: $83-$93. Even their price to free cash flow isn't making me jump on this bandwagon. I think that their present valuation is too steep and is setting up for an opportunity to short more than anything else. In the meanwhile, they are printing record backlogs and raising their guidance. Go ahead and call me a contrarian.
333. United Technologies (NYSE: UTX) is forecasting FY2012 EPS at about $5.90. That makes UTX look cheap in my opinion. Target: $75-$85. I wouldn't be willing to pay more than 15x forward earnings, but with global interest rates hitting all-time lows, I can see how analysts throw their price targets into the triple digits. In the meanwhile you can collect their dividend of about 2.5%. Anything over $90 is fully valued. For 2012 they expect their FCF will exceed their net income. This is something I like to see!
334. Tyco International (NYSE: TYC) is rapidly approaching fair value if it hasn't approached and passed through it already. Apparently I'm not alone in this casual observation as there appears to be increasing short interest at these relatively higher prices. It's my understanding that Tyco is splitting up in an attempt to unlock value. They seem to believe that by splitting up, their various business units can trade at industry valuations, which are higher than the combined valuation for the diversified company as it stands today. Target: $43-$47. I think Tyco is ahead of itself at present.
335. Union Pacific (NYSE: UNP) is blowing away estimates and is living la vida in the pricing department. Under normal circumstances, I'd forecast their present trends into oblivion with a handy excel spreadsheet and pop out a price target, much like an analyst would, that is much higher, perhaps as much as $120. Wow, this is fully valued. Union Pacific is trading at 15x FY 2012 earnings. The economic backdrop just makes me wonder if we can see another back-half of 2008. Target: $96-$115. This is 12x-15x FY2012 earnings projections.
Extra: DHT Holdings Inc. (NYSE: DHT) came to me as I was perusing a few message boards that were talking about a few of my other favorite companies. Yes, it is a shipper. Yes, the baltic dry index is falling. After reviewing the situation for about 30 minutes it didn't take long to realize that I needed to start making a market in this stock as I think it is worth $3. Target: $2.50-$3. They operate a fleet of crude oil tankers and with their $0.12 dividend rate are yielding 14%. I like the fact that they walk away from bad deals and that they have a safe cash position. Combined with their low cash break-even levels, I think that my decision to take a position this last week will yield significant returns.
That's all for now. Email me your companies at globalspeculation at gmail.com
The Motley Fool has no positions in the stocks mentioned above. Glen and his investors have long positions in DHT Holdings. 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.