Worldpay Stock Price and Research (NYSE: WP)

worldpay stock price worldpay research nyse wp 2

Worldpay (NYSE: WP) is a large cap company that operates within the IT services industry. Its market cap is $24 billion today and the total one-year return is 17.09% for shareholders.

Worldpay stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Worldpay reported a recent EPS growth rate of 32.56%. That’s below the IT services industry average of 125.17%. That’s not a good sign. We like to see companies that have higher earnings growth.

✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the IT services industry is 37.41. And Worldpay’s ratio comes in at 70.12. Its valuation looks expensive compared to many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for Worldpay stock is 769.23%. That’s above the IT services industry average of 114.80%. That’s not a good sign.

✗ Free Cash Flow per Share Growth: Worldpay has decreased its FCF per share over the last year relative to its competitors. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✗ Profit Margins: The profit margin of Worldpay comes in at 8.91% today. And generally, the higher, the better. We also like to see this ratio above competitors. Worldpay’s profit margin is below the IT services average of 13.39%. So that’s a negative indicator for investors.

✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Worldpay is 26.11% and that’s above its industry average ROE of 22.63%.

Worldpay stock passes one of our six key metrics today. That’s why our Investment U Stock Grader gives it a Sell.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more.  …read more

DineEquity Stock Owner Insight

DineEquity stock revenue

DineEquity stock had a great day in the market on Tuesday February 20. Shares jumped 19.64% and closed the day at $65.41. They’re now trading 3.46% below their 52-week high of $67.75.

With today’s big gain, DineEquity now has a market cap of $2 billion. That makes it a small cap company.

The business operates in the retail-restaurants industry and employs 960 people. Its shares trade primarily on the New York stock exchange.

DineEquity has 18 million shares outstanding and 2.87 million traded hands for the day. That’s above the average 30-day volume of 263,720 shares. The amount of DineEquity stock is also dropping as the company buys back its own shares. In the last 12 months, it repurchased $23 million worth.

Over the last five years, DineEquity’s revenue is down by -41.04%. You can see this drop in annual revenue chart below…

In the last year alone, DineEquity’s revenue has dropped by -6.92%. That’s not a good sign for DineEquity stockowners.

We like to invest in companies that grow their sales. A growing top line is a sign of a healthy business.

For now, DineEquity will continue to pull in revenue. So let’s take a closer look at the company’s total financial health. And the best way to do that is by looking at its balance sheet… DineEquity’s cash comes in at $118 million and the company’s debt is close to $1.5 billion…

DineEquity’s cash pile is smaller than its total debt. This is common for many companies. They can issue debt at a lower cost to take on new projects… but the debt to cash level is a bit high and is a concern for the business.

What is DineEquity Stock Worth?

Let’s look at a few key ratios to determine the value of DineEquity stock…

Price-to-Earnings (P/E): This ratio comes in at 16.01 for DineEquity. That’s a reasonable level. A high P/E ratio shows that investors are already expecting high earnings growth.

Dividend Yield: Stable business are able to reward shareholders by returning cash. DineEquity returns about 4%. The company has also increased its dividend consistently over the last five years.

These metrics are a good starting point in valuing a company. The ratios look reasonable for DineEquity but investors should analyze all aspects of the business.

The decline in revenue is a concern but investors have already factored that into the price they pay.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more. …read more

Sasol Stock Price and Research (NYSE: SSL)

sasol stock price sasol research nyse ssl 2

Sasol (NYSE: SSL) is a large cap company that operates within the chemicals industry. Its market cap is $23 billion today and the total one-year return is 23.32% for shareholders.

Sasol stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Sasol reported a recent EPS growth rate of 53.57%. That’s below the chemicals industry average of 69.59%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the chemicals industry is 21.50. And Sasol’s ratio comes in at 13.88. It’s trading at a better value than many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for Sasol stock is 38.74%. That’s below the chemicals industry average of 65.30%. That’s a good sign. Sasol’s debt levels are not out of control.

✓ Free Cash Flow per Share Growth: Sasol has increased its FCF per share over the last year relative to its competitors. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✗ Profit Margins: The profit margin of Sasol comes in at 13.37% today. And generally, the higher, the better. We also like to see this ratio above competitors. Sasol’s profit margin is below the chemicals average of 14.17%. So that’s a negative indicator for investors.

✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Sasol is 9.73% and that’s below its industry average ROE of 22.65%.

Sasol stock passes three of our six key metrics today. That’s why our Investment U Stock Grader gives it a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more.  …read more

This Boring Resource Might Be the Perfect Investment

Jeremy Grantham is a value investing legend.

The founder of Boston-based investment giant GMO predicted both the dot-com bubble and the financial crisis of 2008.

Today, Grantham is worried once again.

With valuations sky-high, Grantham expects U.S. stocks to be a lousy place to make money in the coming decades.

But Grantham does expect one resource to fare unusually well – timber.

Grantham predicts timber will rise an average of 4.8% annually over the next seven years.

That sounds shockingly low, I agree…

Until you realize Grantham forecasts 4.6% annual losses for U.S. large cap stocks over the same period.

Put another way, Grantham expects timber to outperform the overall U.S. stock market by an eye-popping 9.4% per year!

No wonder Grantham has called timber the “perfect investment” for anyone with a time horizon of, say, 20 years or more.
Here’s What Makes Timber Special
You’ve probably never thought of investing in timber.

Here’s why you should start…

First, timber has some unusually attractive investment characteristics.

Companies go out of business every day. Countries may even disappear off the map.

But trees grew through two world wars, the Great Depression, the rise and fall of the Soviet Union, 9/11, and even Donald Trump’s election.

Trees will keep growing, no matter the latest financial or political shock.

Second, unlike wheat or corn, trees don’t need to be harvested every year.

You can harvest trees when timber prices are up…

And delay harvests when prices are down.

In other words, “banking timber on the stump” helps smooth out prices and ensures against crashes.

Third, the global supply of timber – the rate of tree growth – is falling even as demand is exploding.

The world has lost the equivalent of 1,000 football fields of forests per hour for the last 25 years. That’s about 10% of the world’s wilderness.

Meanwhile, there’s been a surge of demand for timber, primarily from China.

Exploding demand combined with dropping supply virtually guarantees higher prices in the future.

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How Timber Trumps the S&P 500
Historically, timber has been a terrific investment.

It has outperformed the S&P 500 for more than 100 years.

From 1971 to 2010, timber generated average annual returns of more than 14%.

That’s enough to have turned $10,000 into more than $1.6 million.

Timber has also been a terrific investment during times of financial crisis.

During the Great Depression, timber gained 233% even as the price of stocks fell more than 70%.

In 2008, while the S&P 500 fell 38%, the value of timber rose 9.5%.

Timber also performs exceptionally well during times of inflation.

From 1973 to 1981 – when inflation averaged 9.2% – timber prices increased by an average of 22% per year.

So if you’re looking to protect yourself against a financial crash or inflation (or both), before you look toward gold, think about timber.
How to Invest in Timber
While investing in timber is one way to insulate yourself from stock market fluctuations, it also has its hassles.

First, forests aren’t as liquid as stocks. You can’t sell timber overnight to raise cash.

Second, valuing assets that trade infrequently or aren’t generating cash is as much art as it is science. You never really know how much your …read more

Why You Should Know “The Indispensable Man”

Editorial Note: Our offices are closed in observance of Presidents Day. We hope you enjoy this historical reflection from Chief Investment Strategist Alexander Green.

As today is Presidents Day and the U.S. markets are closed, I’d like to take a break from the investment commentary and share a story about my favorite American president: George Washington.

A portrait of him hangs over the fireplace in my living room.

It’s a large oil-on-canvas replica of the famous 1851 painting by Emanuel Leutze that depicts him crossing the Delaware. It was Washington’s first move – you may recall – in his successful surprise attack against Hessian forces on Christmas Day, 1776.

Although the original painting – like my replica – is striking, it is riddled with historical inaccuracies.

For starters, the crossing took place in the dead of night. (But that wouldn’t have made a particularly inspiring work of art.)

The flag shown – the original “Stars and Stripes” – did not exist at the time of his crossing.

The boats are wrong. They were larger with higher sides. The men did not bring horses.

It was raining.

Washington – in all likelihood – did not stand inside the boat and certainly not in such a heroic fashion.

The Delaware, at what is now called Washington Crossing, is far narrower than the river in the painting. It was not filled with icy crags.

And, not incidentally, Washington and his men are heading in the wrong direction.

Given these many artistic liberties, you might reasonably ask why the painting hangs over my mantle.

That is a story I’m only too happy to tell…

George Washington was one of Virginia’s wealthiest men. (And, like virtually all plantation owners of his day, a slaveholder.) Yet few risked more in defying tyranny.

When the revolutionary leaders pledged their lives, their fortunes and their sacred honor, it was more than just fine-sounding words.

It was treason. The founders knew that if the king’s soldiers captured them, they would be hanged.

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Yet Washington left his comfortable, aristocratic life and led a ragtag army of ill-trained, poorly clothed, underfed soldiers against the armed forces of the king of England – and won our independence.

That’s not the reason I own the painting, however.

Washington was unanimously elected president and served two terms.

In 1787, he presided over the convention that drafted the American Constitution, the document that not only defined and limited the scope of government – and his own power – but also became a model and inspiration for free people everywhere.

Many historians regard Washington as “The Indispensable Man,” the crucial founding father and one of the two or three greatest presidents ever.

Yet that’s not why the picture is over my mantle either.

Washington’s greatest act, the one that made him internationally famous, was his resignation as commander in chief after the war.

Following the signing of the peace treaty and British recognition of American independence, Washington stunned the world when he surrendered his sword to Congress and retired to his farm at Mount Vernon.

Read the stories of Julius Caesar, Alexander the Great, Napoleon and other famous generals. Conquerors always …read more

Forward Guidance: Alexander Green on Why You Should Own Preferred Shares

Transcript:

Samuel Taube: Joining us by phone is Alexander Green, the Chief Investment Strategist of The Oxford Club. And today, we’re talking about the unique assets known as preferred shares.

Alex, thanks for joining us again.

Alexander Green: Thanks for having me, Sam.

ST: From what I understand, preferred shares aren’t exactly like a regular stock. They’re not exactly like a bond. What are they?

AG: Technically, they’re called hybrid securities. That means they have qualities of both stocks and bonds. For instance, they don’t have voting rights like a stock, but yet you do have an actual equity stake in the company.

And dividends are prioritized to be paid to preferred shareholders before common shareholders. That’s how it gets the “preferred” label. Also, in the unlikely event of a corporate liquidation, preferred shareholders stand in line ahead of holders of common stock.

So they have qualities of both stocks and bonds, but they have lots of advantages, especially in the sort of volatile markets we’ve seen lately.

ST: And given this kind of hybrid characteristic, how do preferred shares fit into your ideas about asset allocation? Do you treat them as a stock or a bond as far as portfolio makeup?

AG: Well, it’s actually an entirely different asset class and a surprisingly under-owned one, Sam. Most people I talk to don’t own any preferred shares at all.

And that’s unfortunate because they have lots of advantages. For instance, they’re far less volatile than individual stocks, so they have lower risk. They have regular quarterly payouts, and those payouts are much higher than the ones on common stocks.

For instance, right now, the S&P 500 is yielding about 2.3%. But the average preferred share yields almost three times as much – around 6%. And sometimes you see yields of 8%, 9%, 10% or more.

It’s very difficult to earn that kind of a yield in today’s market and have capital appreciation potential as well.

ST: That’s a powerful combination. You mentioned these shares are less volatile than regular stocks. Given their common characteristics with bonds, are they sensitive to changes in interest rates?

AG: They are interest rate sensitive because the yields are so high. Unlike bonds, most preferred shares don’t have a maturity date. They either will never mature or sometimes won’t for as many as 50 years.

But they also get more favorable tax treatment than bonds do. Interest on a taxable bond is taxable at your top marginal income tax rate, which can be as high as 39.6% (37% as of January 2018).

But the taxes on preferred shares are like common stock dividends. It’s a maximum of 20% plus the 3.8% “Obamacare” surcharge.

So you get higher income. You get preferred tax treatment. You have lower risk, but you still have great upside potential.

ST: It’s pretty clear why these are called preferred shares. They seem to have a lot of advantages. What have preferred shares done during this recent equity correction? Have they sold off less?

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AG: They hardly budged, Sam. You can pull up, say, the preferred shares iShares ETF. …read more

What the Market Sell-Off and Thunder Mountain Have in Common

The scariest roller coaster I’ve ever ridden was the Monster Mouse at Rye Playland in New York.

What made the Monster Mouse terrifying wasn’t the hills. In fact, the drops weren’t steep at all.

The reason your heart pounded was because the ride was so rickety.

It was built in 1966 but looked and felt as if it were from 1866.

You’d swear the entire structure shifted every time you took a turn. It felt as if the whole thing was about to come tumbling down.

When I go on a roller coaster at Disney or Universal, though the plunges are deep and the rides are moving at breakneck speeds, I don’t find them scary at all.

They have solid, long-term safety records and state-of-the-art technology.

It’s a good analogy for the market right now.

Though we had some drastic plunges last week, the foundation of the market is strong. The economy is humming along, corporate earnings are expected to rise and unemployment is low.

To me, the market is rolling down the tracks of Disney’s Thunder Mountain, not Playland’s shaky Monster Mouse.

And this kind of action isn’t even unusual, as you can see from this week’s chart.

Since the bull market began in 2009, the S&P 500 Index has fallen 10% or more five other times for an average loss of 15.2%…

April 2010 to July 2010: 17.1%
May 2011 to October 2011: 21.0%
April 2012 to June 2012: 11.0%
May 2015 to August 2015: 12.5%
November 2015 to February 2016: 14.5%.

From its high on January 26, 2018, to its low last Friday, the S&P 500 fell 11.8%, significantly less than the 15.2% average decline of the last five corrections within this bull market.

In fact, going back to 1980, the market has declined an average of 14.2% from its highs every year.

Certainly, some years will be less, and some will be more. But if you’re going to be in the market, you should expect double-digit declines on an annual basis.

Stock market declines are never fun. It’s agonizing to look at your statements and see that you have 10% less than you had just a month or so ago.

But keep things in perspective.

If you’re invested in the stock market, even after last week’s steep decline, the S&P 500 is still up 14% from where it was more than a year ago.

That’s a very good number. (And it’s up 4% from where it was at the end of the third quarter.)

So while the thousand-point drops in the Dow last week might have made you queasy, they’re completely normal in the course of market activity.

When the market shakes, rattles and rolls, keep your long-term perspective and remember… it’s nothing unusual.

This is Thunder Mountain. It’s not the Monster Mouse.

Good investing,

Marc

P.S. For more of Marc’s common-sense investment wisdom, check out The Oxford Income Letter. …read more

Entergy Stock Price & Research (NYSE: ETR)

entergy stock price entergy research nyse etr 2

Entergy (NYSE: ETR) is a large cap company that operates within the electric utilities industry. Its market cap is $14 billion today and the total one-year return is 12.81% for shareholders.

Entergy stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Entergy reported a recent EPS growth rate of 2.3%. That’s below the electric utilities industry average of 181.43%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the electric utilities industry is 45.79. And Entergy’s ratio comes in at 11.29. It’s trading at a better value than many of its competitors.

✗ Debt-to-Equity: The debt-to-equity ratio for Entergy stock is 182.43%. That’s above the electric utilities industry average of 129.19. That’s not a good sign.

✗ Free Cash Flow per Share Growth: Entergy has decreased its FCF per share over the last year relative to its competitors. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✗ Profit Margins: The profit margin of Entergy comes in at 12.38% today. And generally, the higher, the better. We also like to see this ratio above competitors. Entergy’s profit margin is below the electric utilities average of 27.84%. So that’s a negative indicator for investors.

✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Entergy is -9.36% and that’s below its industry average ROE of 8.99%.

Entergy stock passes one of our six key metrics today. That’s why our Investment U Stock Grader gives it a Sell.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more.  …read more

Eastman Kodak Stock Owner Insight

Eastman Kodak Stock Annual Revenue

Eastman Kodak stock had a great day in the market on Thursday February 15. Shares jumped 16.67% and closed the day at $7… but they’re still trading 54.25% below their 52-week high of $15.30.

With today’s big gain, Eastman Kodak now has a market cap of $298 million. That makes it a small cap company.

The business operates in the business equipment industry and employs 6,100 people. Its shares trade primarily on the New York stock exchange.

Eastman Kodak has 42.57 million shares outstanding and 3.12 million traded hands for the day. That’s below the average 30-day volume of 10.55 million shares. The amount of Eastman Kodak Co stock is also dropping as the company buys back its own shares. In the last 12 months, it repurchased $1 million worth.

Over the last five years, Eastman Kodak’s revenue is down by -70.03%. You can see this drop in annual revenue chart below…

In the last year alone, Eastman Kodak’s revenue has dropped by -9.71%. That’s not a good sign for Eastman Kodak stockowners.

We like to invest in companies that grow their sales. A growing top line is a sign of a healthy business.

For now, Eastman Kodak will continue to pull in revenue. So let’s take a closer look at the company’s total financial health. And the best way to do that is by looking at its balance sheet… Eastman Kodak’s cash comes in at $433 million and the company’s debt is $407 million…

Eastman Kodak’s cash pile is larger than its total debt. This and a steady cash flow has allowed the company to buy back shares.
What is Eastman Kodak Stock Worth?
To determine the value of Eastman Kodak stock let’s look at a few key metrics…

Price-to-Earnings (P/E): This ratio comes in at 6.48 for Eastman Kodak. That’s a reasonable level. A high P/E ratio shows that investors are already expecting high earnings growth.

Price-to-Book (P/B): This ratio is a cornerstone for value investors. A lower number here indicates a better value play. And at 6.63, Eastman Kodak looks reasonable… but P/B varies greatly based on the industry.

These metrics are a good starting point in valuing a company. The ratios look great for Kodak but investors should analyze all aspects of the business.

The decline in revenue is a concern but investors have already factored that into the price they pay. Kodak might be a great value investment over the next few years.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more.  …read more

The Wisdom of Charlie Munger

“Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. Wisdom acquisition is a moral duty. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know.”

– Charlie Munger, 2007
Coming out of law school, I had a job offer to work with a quirky law firm in Los Angeles named Munger, Tolles & Olson.

I recall the name because it was the only law firm that pursued me actively.

It was only many years later I learned that the “Munger” in the name was Charles (aka Charlie) Munger, Warren Buffett’s long-standing investment partner.

You’ve probably seen pictures of Charlie Munger.

He’s the staid fellow who sits on stage next to Buffett during Berkshire Hathaway’s annual shareholder meetings.

But don’t let Munger’s modest appearance deceive you.

The 94-year-old vice chairman of Berkshire Hathaway has one of the most remarkable minds on the planet.

Buffett and Munger have a lot in common…

Both hail from Omaha, Nebraska.

Both worked in the same grocery store when they were kids.

And both became billionaires through investing.

Based on their personal balance sheets, Buffett is the far more successful investor.

Munger’s net worth is a mere $1.7 billion compared with Buffett’s $84.6 billion.

But even Buffett is quick to admit that Munger is the far more interesting character.
The Remarkable Mind of Charlie Munger
Buffett has called Munger…

“The best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you even finish the sentence.”

What’s Munger’s secret?

He has spent his life studying the best ideas across all disciplines.

This practice helps him generate a set of “mental models” through which he sees the world.

Munger also embraces his role as a curmudgeon who acts as a foil to Buffett’s folksy image.

Buffett cites Dale Carnegie’s How to Win Friends and Influence People as an important influence on his life.

In contrast, Munger quotes philosophers like Epictetus and Cicero.
Munger’s Art of Worldly Wisdom
Surprisingly, Munger has never committed his mental models to paper.

I learned about them mostly by listening to Munger’s speeches.

Below are five that have stuck with me over the years…

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1. Ignore the Propeller-Heads of Modern Finance

Munger disdains the army of academics who created the discipline of modern finance.

Munger argues that equating financial risk to a security’s volatility is bunk.

Like Buffett, Munger was weaned on Benjamin Graham’s philosophy of value investing.

Munger transformed Graham’s concept of “margin of safety” – buying stocks at a discount to a company’s true worth in order to minimize losses – into the idea of a “moat,” or a company’s sustainable competitive advantage over time.

In other words, buy the right stock in a company with a hard-to-replicate product, brand or business model… and you may never have to sell it.

2. Avoid Difficult Decisions

Munger believes limiting yourself to the simplest ideas is the key to investment success.

Munger also …read more

Public Service Enterprise Group Stock Research (NYSE: PEG)

Public Service Enterprise Group (NYSE: PEG) is a large cap company that operates within the multi-utilities industry. Its market cap is $25 billion today and the total one-year return is 13.77% for shareholders.

Public Service Enterprise Group stock is underperforming the market. It’s beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✗ Earnings-per-Share (EPS) Growth: Public Service Enterprise Group reported a recent EPS growth rate of 20%. That’s below the multi-utilities industry average of 81.04%. That’s not a good sign. We like to see companies that have higher earnings growth.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the multi-utilities industry is 27.86. And Public Service Enterprise Group’s ratio comes in at 16.33. It’s trading at a better value than many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for Public Service Enterprise Group stock is 96.97%. That’s below the multi-utilities industry average of 137.08%. That’s a good sign. Public Service Enterprise Group’s debt levels are not out of control.

✗ Free Cash Flow per Share Growth: Public Service Enterprise Group has decreased its FCF per share over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✓ Profit Margins: The profit margin of Public Service Enterprise Group comes in at 17.45% today. And generally, the higher, the better. We also like to see this ratio above competitors. Public Service Enterprise Group’s profit margin is above the multi-utilities average of 5.28%. So that’s a positive indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Public Service Enterprise Group is 3.91% and that’s above its industry average ROE of -9.19%.

Public Service Enterprise Group stock passes four of our six key metrics today. That’s why our Investment U Stock Grader gives it a Buy with Caution.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more.  …read more

Is This Only the First Correction of 2018?

Mark your calendars… August 22, 2018.

If the bull run that began in March 2009 is still alive and kicking, it will officially become the longest in history.

As you can see in the chart below, since rising from the rubble of the financial crisis, the Dow Jones Industrial Average (DJIA), the S&P 500 and the Nasdaq have been on profitable runs, each gaining more than 200%.

And the markets were really goosed in 2017. The Dow posted 71 closing records in the year – the most ever.

In October 2016, I told investors to expect the bull to continue charging higher.

I wrote that the S&P would likely gain at least 19.4% in 2017 – which it did.

That’s part of the cycle we see in the markets.

But now there’s some reason for caution…
Too Much of a Good Thing
Complacency has crept in as investors have enjoyed what is quickly becoming the longest bull run ever.

We even saw a double-digit surge across the board in stocks from November 2017 to January 2018.

But over the last couple of weeks, investors have been battered by terrifying swoons.

Last week, two sessions ended in 1,000-point declines… and another swung wildly within a 1,000-point range.

On the Nasdaq, nine out of every 10 stocks fell.

And on February 5, the Volatility Index (VIX) shot up 282% for the year, hitting its highest level since August 2015.

It was one of the worst weeks for the markets since the financial crisis.

The Dow has tumbled more than 12% from its all-time high set on January 26. All three major indexes are negative for the year. And the 10% correction everyone was waiting for finally came.

But this recent sell-off was different, in part because of its unusual swiftness.

The S&P lost 10% of its value in only 13 days.

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Now, people will say, “In 1987, the market lost much more than that in a single day.”

That’s true. But that doesn’t mean 13 days is healthy.

Historically, it’s taken the S&P an average of 64 days to lose 10% of its value.

For example, in 2015, the last double-digit correction of the S&P took 100 days.

Something different is underway.

We can all agree the market was a little frothy. But a haircut that quick and that fast on the possibility of rising inflation? A new Fed chair? The rise of the machines?

And yet, the economic backdrop is positive.

So what happens when data becomes something to worry about?

That’s why I believe this was likely only the first correction of 2018.
With Every Cloud, There’s a Silver Lining
Over the last couple of weeks, we’ve all woken up to a head-scratcher of a premarket.

The indexes are either up or down an eye-popping amount. There is no middle ground. And likely, halfway through the day’s session, an about-face will occur. The early morning worry dissolves into euphoria or vice versa.

On top of that, the CAPE ratio – short for cyclically adjusted price-to-earnings ratio – is at its highest level since 2001. And the market-to-GDP ratio, or the Buffett Indicator, is currently at 139.3%, the highest …read more