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  • Dr. Paul Price post a new topic 05-29 08:32
    Peter Lynch Portfolio 29 - Trade Alert
    Peter Lynch Portfolio 29 – Trade AlertTook a quick profit in Xilinx (XLNX)We bought shares of Xilinx (XLNX) on January 22, 2015, when the stock pulled back to under $38. The stock then offered a historically low P/E and a larger than normal yield.Here...
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2015-05-26

  • Dr. Paul Price commented on The Science of Hitting's article 05-26 18:14
    Warren Buffett And Walmart
    A reader of my recent article about Walmart (WMT) made a comment about Warren Buffett (Trades, Portfolio)’s (BRK.B) original purchase of the...
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    Dr. Paul Price 05-26 19:14
    • Using only full-year stats takes away the ability to see intra-year valuation extremes.

      WMT touched $42.09 during September of 2007, a year the firm earned $3.16 per share. Its P/E at that low point was 13.3x that year's final earnings. Its yield was 2.09%

      During August of 2011 WMT got as low as $48.30 on what turned out to be $4.45 in FY EPS. The stock's yield at that moment in time was 3.02%.

      Those were the very best times, valuation-wise to have bought Wal-Mart.

      Buyers at the 2007 nadir had a chance to sell for a 51.5% gain in under 9-months.

      Those who dove in at 2011's bottom could have reaped a 68.5% move in about 19-months. 

      Neither of those figures includes dividends earned along the way.

      Failure to trade out pre-crash 2008 proved to be a bad move. WMT peaked at $63.80 before Lehman's demise and closed today at $74.95. That is just a 17.6% (plus diivdends) move for the buy-and-hold crowd over almost seven and a third years.

      Value line noted that WMT's total return, as of Mar. 31, 2015, had been 67.4% versus 94.5% for the Value Line Index (1700 companies). The broad market has gone up since March while WMT has regressed.

      Wal-Mart appears to offer low risk from today's quote but unexciting upside without a major profit boost. As of May 26th WMT's FY 2015 EPS are expected to be lower than all of the previous three years. 

      As with McDonald's (MCD) the yield tends to keep the price from decline by too much but the profit stagnation has held any share price gains to temporary blips.

      The best thing management could do would be to raise prices 1% across the board. That would increase profity margins dramatically even if the company lost a few customers. In reality there would still be nobody any cheaper excepting the 'pay to join' clubs which don't allow for small quantity buying.
  • Dr. Paul Price post a new topic 05-26 09:42
    Peter Lynch Portfolio 29 - Trade Alerts
    Two New Buys on Today’s WeaknessThe Peter Lynch Portfolio 29 equity mix added positions in Scippts Network Interactive (SNI) and Bio-Reference Labs (BRLI) this morning as the broad market sold off sharply.We now own 45 shares of SNI @ $66.93 for...
    Comment

2015-05-25

2015-05-19

  • Dr. Paul Price post a new topic 05-19 10:24
    Peter Lynch Portfolio 29 - Option Trade Alerts
    Three New Option Trades TodayThe Peter Lynch Put Writing Portfolio sold a pair of long-term puts on specialty retailer Urban Outfitters (URBN) and a single contract on Wal-Mart (WMT), also out to a Jan. 20, 2017, expiration date.Both companies reported...
    Comment
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