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5 Exceptional Dividend Growth Stocks - Lower Volatility and Higher Total Return
by Chuck Carnevale of F.A.S.T. Graphs,
For many people these are troubled times where fears about our economy and the stock market are at a heightened state. Stock price volatility is higher than we've ever seen it, adding to investor nervousness. Therefore, we searched for a safe place for conservative investors to invest. Our due diligence identified five dividend growth stocks that possess stringent quality characteristics, while at the same time have produced strong above-average historical returns. But more importantly, each candidate had to have future consensus earnings estimated growth rates greater than the S&P 500.
Sell your Bonds and Gold and Buy Dividend Growth Stocks Before it is Too Late
by Chuck Carnevale of F.A.S.T. Graphs,
Although we generally believe in the soundness of the principle of diversification, we also believe that extraordinary times require extraordinary measures. Any historian of markets or economies would agree that financial markets are currently far from behaving ordinarily. We intend to point out several markets that are behaving both inefficiently and completely out-of-sync from sound and prudent economic principles. Therefore, we will argue that certain sacred cows that would and should apply during normal circumstances need to be questioned and challenged in these very uncertain times.
Strong Standard and Poor's 500 Earnings plus Weak Stock Values equals Opportunity
by Chuck Carnevale of F.A.S.T. Graphs,
Extensive research, experience and analysis spanning more than 40 years has taught me that earnings determine market price in the long run. I have dubbed this principle with the acronym EDMP. However, there also exists a short-run evil twin sister EDMP. This principle states that emotions determine market price in the short run. Currently, the evil twin sister EDMP is in charge. In the longer run, I believe this spells opportunity based on the oldest of all investing adages 'buy low sell high.'
8 Strong Growth Stocks Significantly Under-valued by Mr. Market
by Chuck Carnevale of F.A.S.T. Graphs,
We don't believe in investing in the stock market, we believe in investing in great businesses. Therefore, we tend to focus more on how the business is performing on an operating basis than we do on stock price volatility. True Worth valuation is what we monitor and measure most closely. Our rationale is based on the reality that any business, public or private, ultimately derives its value from the amount of cash flows and earnings it can generate for stakeholders. The bigger the income stream they can buy, the bigger the value they will eventually receive.
The Greatest Risk We Face: To Again Fall Into a Recession
by Chuck Carnevale of F.A.S.T. Graphs,
A spate of frightening headlines has led to two troubling declines in financial instruments. The first, of course, is the decline in equity prices that has everyone worried about their financial futures. The second troubling decline in financial instruments is the unprecedented drop in Treasury bond yields. This is troubling because frightened investors are fleeing to the safety of Treasury bonds at the precise time when the risk of owning them has perhaps been the highest in recorded history. This is especially true for the long bond, but also applies to shorter-term bonds.
FW: F.A.S.T. Graphs video blog on 3M Co. (MMM) and Emerson Electric Co. (EMR)
by Chuck Carnevale of F.A.S.T. Graphs,
At the special request of readers of our recent blog post titled Six High-profile Industrials with Staggering Three-year Performance? (Part 1) we have prepared a short video blog looking at 3M Corp. and Emerson Electric through the lens of our F.A.S.T. Graphs research tool. Click this link to view the video: youtu.be/EJrIx9sxhQ4
Cummins Inc. (CMI) Staggering Three-Year Annualized Performance?
by Chuck Carnevale of F.A.S.T. Graphs,
The recent history for Cummins Inc. (CMI) clearly illustrates that sometimes the greatest opportunities can be found during times of crisis. This gives credence to Warren Buffett's sage advice "be greedy when others are fearful, and fearful when others are greedy." Furthermore, stock price volatility is a fact that cannot be avoided when investing in publicly traded common stocks. On the other hand, we offer this analysis as evidence that over the longer run operating results are clearly more important than price volatility.
Six High-profile Industrials with Staggering Three-year Performance? (Part 1)
by Chuck Carnevale of F.A.S.T. Graphs,
As a general rule there is an undeniable relationship between earnings and stock price. Where earnings go, stock price is sure to follow. However, since there are exceptions to every rule, there will be occasions where earnings and price become disconnected. When price rises significantly above earnings, we call this overvaluation. On the other hand, when price falls significantly below earnings, we call this undervaluation. Consequently, on this basis the principles of valuation can be a reliable and profitable means that investors can use to make intelligent buy or sell decisions.
Six Attractively Valued Dividend Growth Stocks Reporting Earnings!
by Chuck Carnevale of EDMP,
Investors today have instant access to minute by minute changes in the stock prices of their portfolio holdings in real time. Since stock prices tend to fluctuate wildly from one day to the next, I for one do not feel that this information overload is a good thing. What makes matters even worse is how wildly the value of a stock can change from one day to the next. It's not uncommon to see a stock rise or fall by 10% or more on any given trading day. Yet common sense would dictate that the intrinsic value of a large publicly traded company could not possibly change that much that quickly.
Should Dividend Growth Investors Forgive General Electric?
by Chuck Carnevale of EDMP,
There was a time in the not-too-distant past when General Electric Co. (GE) was the darling of Wall Street and everybody's favorite stock to own. This was especially true during the Jack Welch Era, which spanned the years 1981 to 2000. In truth, I agree that Jack Welch should have been given a great deal of credit for the job he did in profitably running this large conglomerate. However, as I will soon demonstrate, I feel that Jack was given undue credit for General Electric?s stock price action during the last five years of his tenure.
The S&P 500 ends Q2, 2011 Fairly Valued, Year-end Target 1467
by Chuck Carnevale of EDMP,
Individual companies derive their value from the amount of earnings and cash flows they are capable of generating for their stakeholders. The market will inevitably capitalize a publicly traded company?s shares based on the velocity and volume of earnings generated. A PE ratio of plus or minus 15 generally applies to the average company growing earnings between zero and 12% a year. The essence behind this valuation is the idea that any company that generates a profitable income stream is worth more than one times earnings.
Visa and MasterCard Deserved a Higher Price
by Chuck Carnevale of EDMP,
Both Visa, Inc. and MasterCard, Inc. enjoyed explosive moves in their stock values on Wednesday, June 29, 2011. Visa was up over 15% and MasterCard over 11% thanks to the Fed?s more liberal-than-expected stance on debit fee regulations. In our opinion, this perceived regulatory overhang had caused the share prices of these consistent and powerful earnings generators to sit below their intrinsic value. Therefore, we believed that the Durbin Amendment, although problematic for both Visa and MasterCard, would be less impactful to their long-term business than their low stock prices indicated.
Five Dividend Paying Giants of Technology Trading at Absurdly Low Valuations?
by Chuck Carnevale of EDMP,
These five industry dominant, blue chip, leading technology stalwarts represent prima facie evidence of how absurd and irrational the stock market can be at times. The facts are that the fundamentals underpinning each of these strong and healthy technology giants are significantly better than average. Therefore, logic would dictate that the shares of these companies? stocks should command a premium valuation relative to the average company or the S&P 500. It makes no rational or business sense that they don't.
The S&P 500 is Fairly Valued
by Chuck Carnevale of EDMP,
We do not believe in forecasting stock markets or stock prices on individual stocks. Instead, we approach investing as the process of calculating intrinsic value based on fundamentals. The most important fundamental to be considered when evaluating the True Worth of a market is earnings. Therefore, it's important that the reader understands that this article is offered as a mathematical calculation of what the S&P 500 is actually worth based on earnings. The reason we believe this to be important is because we also believe that any deviations from fair value will ultimately self-correct.
5 Dividend Champions to Work Your Money as hard as You Worked for It!
by Chuck Carnevale of EDMP,
You worked hard over your lifetime to build a nest egg in order to fund your retirement. Doesnt it make sense that now that youre retired your money should work as hard for you as you worked for it? When you were working, you were accustomed to receiving a raise in pay each year. Why should that end now, just because you are retired? It doesnt have to, because investors today have the good fortune and opportunity to invest in blue-chip 'Dividend Champions' (companies that have increased their dividend every year for at least 25 years) which are trading at historically low valuations
Stop Losses are for Losers!
by Chuck Carnevale of EDMP,
First, the title of this article does not refer to people who use stop losses in their investing strategies. Instead, the title of this article refers to the actual status of the common stock that the stop loss is placed upon. Therefore, a specific definition of a loser is required for clarity. In general terms, our definition of a loser is a common stock that should not currently be owned in the first place. There are two primary reasons why this would be true. Either the company's fundamentals are permanently deteriorating, or the company?s stock price is irrationally overvalued.
A Primer On Valuation: 9 Very Fast-Growing Super Stocks
by Chuck Carnevale of EDMP,
We hope that this primer on valuing super fast growing companies provided insights into how the market can capitalize such enormous growth. It may not always make sense, but we feel it's valuable to be able to graphically see how the market values fundamentals. It's not always logical, or even fair, but if you look hard enough there usually is some logic that can be discovered. The important thing is that statistics alone do not adequately tell the true whole story, in our opinion.
A Primer on Valuation (part 2)
by Chuck Carnevale of EDMP,
To us, the evidence is crystal clear, fundamentals provide a critical perspective that investors should be aware of. Possessing a clear and accurate picture of how well a business has performed on an operating basis is a vital component towards making sound and prudent investment decisions. Contrary to what some might argue, the fundamental operating results of the business tend to persist. The nature of a company's business and the industry it operates in can be reliably evaluated and understood.
Ben Graham?s famed formula for valuing a stock works in the real world!
by Chuck Carnevale of EDMP,
These ten examples are based on our article: A primer on valuation: Testing the Wisdom of Ben Graham's Formula (part one) published on 2/08/2011. These represent just a few examples of many we could provide. Ben?s formula works because it is sound. The orange line on each logarithmic F.A.S.T. Graph below represents earnings multiplied by Ben Graham's formula. As you review each F.A.S.T. Graph note how the black price line tracks and correlates to Ben Graham's calculation of intrinsic value. In some cases, the correlation is almost perfect.
Testing the Wisdom of Ben Graham?s Formula (part one)
by Chuck Carnevale of EDMP,
Ben Graham?s formula for valuing a company V* = EPS x (8.5 + 2g) established a solid foundation for future value investors to build upon. The small ?g? in the formula represents your reasonably expected 7 to 10 year growth rate. Consequently, Ben Graham?s formula was forward-looking. In this article we looked at modern historical performance in order to test the validity of this famous value formula. Remarkably, the formula proves itself to being very precise when applied in the real world to businesses that grow earnings between zero and 5% per annum.
Results 501–520
of 520 found.