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Analyzing My 5 Picks for Performance

February 15, 2012 | About:
In this article, I analyze my favorite stock picks on a relative value basis and analyze each stock's performance since I last recommended them.

Robert Half International (RHI): When I last recommended this stock, it was at $28.87 per share and today it trades around $29 per share. The company also pays a dividend of $0.56 (annually), which amounts to a dividend yield of about 2% at the stock's current price. This dividend is paid on a consistent basis and the company also has a history of raising the dividend on a consistent basis. The trailing twelve month price to earnings multiple on the stock is 28.4 on earnings of $1.04 per share — compared to the sector average of 16.20. This implies investors are willing to pay a premium on the stock.

Robert Half International is a temporary employment agency that specializes in providing businesses with employees in the accounting and finance fields. In recent news the company posted strong metrics across the board but came up a penny short on earnings per share. The company's two closest competitors in this industry are Manpower and Kelly Services. Manpower currently has a PEG ratio of 1.56 and Kelly Services has a PEG ratio of .56. Robert Half International is moderately priced in comparison with a PEG ratio of 0.87.

Stanley Black & Decker Inc. (SWK): I recommended this stock at $72.61 per share and today it's at $75 per share. In addition to this capital appreciation the company also pays a dividend of $1.64 on an annual basis, which amounts to a dividend yield of about 2.3% at the stock's current price. The company also increases this dividend on a consistent basis and the payment is secure, even in an economic downturn, with the company generating over $700 million in free cash flow last year. The trailing twelve month price to earnings multiple on the stock is 18.6 with earnings of $3.96 per share-- compared to the segment average of 7.34, implying investors are willing to pay up for the stock.

Stanley Works is an American based manufacturer of hardware, home improvement products and power tools. The company also has operations in Asia and Europe. The company's two closest competitors are Danaher Corp. and Snap-On Inc. Danaher has a five year expected PEG ratio of 1.01 and Snap-On Incorporated has a five year expected PEG ratio of 1.28. Stanley Black & Decker is relatively cheaper with its five year expected PEG ratio of only 0.70.

Tractor Supply Company (TSCO): When I recommended this stock a month ago it was at $80.20 per share and today it's at $84 per share. The stock has been bumping up against its 52 week high for most of the month on normal volume suggesting the sellers have abandon the stock and a move upwards could be eminent. In addition to this capital appreciation Tractor Supply Co. also pays a dividend of $.48 (annualized) which amounts to a dividend yield of .6% at the stock's current price. The trailing twelve month price to earnings multiple on the stock is 29.87 on earnings of $2.72 per share-- compared to the industry average of 14.09. This implies investors are willing to pay a premium on the stock.

The company's two main competitors in this sector are Home Depot and Lowe's . Home Depot currently has a PEG ratio of 1.35 with a five year earnings forecast of 13.8% and Lowe's has a PEG ratio of 1.36 with a five year earnings forecast of 12.2%. Tractor Supply Co. is similarly priced in terms of growth with a PEG ratio of 1.40 and a five year earnings forecast of 16.5%.

Chipotle Mexican Grill (CMG): I picked this stock at $353.38 per share and today it's at $380 per share. The stock is presently hitting new 52 week highs daily and is following a well established upward trend. The trailing 12-month price to earnings multiple on the stock is 57.97 on earnings of $6.42 per share — compared to the sector average of 20.33. This suggests investors are very willing to pay a premium for the stock. In the company's latest earnings report Chipotle beat estimates on all metrics accept earnings per share by a wide margin. The shortfall was attributed to higher food costs and investors seemed to take the deficit in stride. The company's two closest competitors are Buffalo Wild Wings and Yum! Brands. Buffalo Wild Wings currently has a PEG ratio of 1.25 with a five year earnings forecast of 20.6% and Yum! Brands has a PEG ratio of 1.95 with a five year earnings forecast of 11.4%. Chipotle Mexican Grill is slightly pricy by comparison with a PEG ratio of 2.09 and a five year earnings forecast of 20%.

Magna International (MGA): When I recommended this stock a month ago it was at $39.40 per share and today it's at $43 per share. In the same time period the S&P has risen from 1280 to 1350, a gain of 70 points. The stock is bouncing out of a trough it's been in since August of last year when it fell from the $50 to $60 per share range to the $30 to $40 per share range. In addition to this capital appreciation the company also pays a dividend of $1 per share (annually) which amounts to a dividend yield of about 2.4% at the stock's current price.

The trailing 12-month P/E on the stock is 11.80 on earnings of $3.66 per share, compared to the sector average of 8.99, suggesting investors are willing to pay a slight premium on the stock. Magna International offers global auto companies a complete range of services from original equipment components to vehicle design and engineering. The company is one of the largest of its kind in the United States. Magna's two closest competitors are Dana Holding Corp. and Lear Corp. Dana Holding Corp. has a five year expected PEG ratio of .14 and Lear Corporation has a five-year expected PEG ratio of .89. Magna International is slightly pricy in comparison with a five year expected PEG ratio of 1.10.

About the author:

Dividend King
I am primarily an investor interested in creating passive income streams through dividends. I focus on finding and analyzing dividend paying stocks, MLPs and REITs that are a good fit for income investors.

I practice Judaism and my faith is very important to me. I visit family in Israel once a year, but I am educated and work in the United States where I hold an MBA and a bachelor’s in English. I am a patient man, enjoy wine but am not a connoisseur, and I listen more than I speak.

Visit Dividend King's Website


Rating: 3.7/5 (10 votes)

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