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Cornelius Chan Blog

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Weekly Bargain Bin Blue Chips Update Q3 Week 13

230 views  2012-09-29 11:15   Tagsblue  chip  bargain  bin  below  book  value 

Blue Chip Stock = minimum market cap 1B + minimum 10/10 continuous years of dividends.
Market Price = book value + premium for future growth.

The Dow closed at 13,437.13 this week, down -1.15% from two weeks ago. The DJIA is now up +105.24% from its 5-year low of 6,547.05 on March 9, 2009.

This week ends the third quarter of 2012! The summer is over and now we face Q4 to end out the year. To everyone who is wondering if the markets will end up or down for the year, learn to chill out and stop myopically focusing on daily market fluctuations. If you are a true long term investor, which we all should be anyway, try to concentrate on 5-year or 10-year plus time horizons. Meanwhile, with all the spare time freed up from checking your stock holdings every half hour, you can concentrate your valuable energy toward learning about the cheap stocks and whether or not their fundamentals warrant investment grade classification or not.

This weekly update is merely to find out what stocks are cheap... a jumping off point if there ever was one for being a contrarian and finding out the fundamentals of out-of-favor stocks.

One of the things I find most fascinating about stock market is how some stocks keep on falling when the market in general is rising. I will have to collect these stocks in a separate list and start updating them weekly.

Bargain Bin Blue Chips

Meanwhile, of the 262 stocks in my blue chip watchlist, 4 are now trading at or below half of price-to-book value: Sharp Corp. (SHCAY), Sony Corp. (SNY), Societe Generale (SCGLY) and Barclays (BCS).

Near-bargain-bin Blue Chips

As far as my list of blue chip near-bargain bin'ners, 22 are trading below 0.8 price-to-book value: 3 from the Americas, 9 from Asia and 10 from Europe.

Americas

From two weeks ago, Platinum Underwriters and Pengrowth Energy have fallen below 0.80 P/B.

Asia

Sony Corp. has fallen below half of P/B and Wacoal Holdings is back in the near bargain bin list.

Europe

Banco Bilbao has risen above 0.8 P/B while STMicroelectronics has fallen beneath.

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