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Michael Hamlett Jr
Michael Hamlett Jr
Articles (70)  | Author's Website |

Value Picks

August 28, 2014 | About:

Here are some stock picks from Morningstar in an overvalued market. Would these be great buys in a correction or market dip? Let's take a look:

HCP Inc. (NYSE:HCP) is a self-administered REIT that acquires, develops, leases, manages and sells healthcare real estate and provides financing to healthcare providers. HCP has a current dividend of 5%, which is great. HCP currently trades at 1.83 times its book value and about 28 times its free cash flow. One alarming figure is the $8 billion in long term debt, which is of course the financing used to acquire properties. Investors should wait to buy this stock, but it could be a bargain if a correction occurs.


Enterprise Products Partners LP (NYSE:EPD) is an energy pipeline company that provides services to producers and consumers of natural gas, natural gas liquids, crude oil and certain petrochemicals. They pay a 3.5% dividend. EPD has little cash, a large amount of receivables, and high current liabilities and $17 billion in long-term debt. Priced at almost 5 times its book value, and almost 70 times its free cash flow, EPD is overvalued and probably won't be a bargain in a market correction.


Schlumberger NV (NYSE:SLB) supplies technology, integrated project management and information solutions to customers working in the oil and gas industry across the globe. SLB has a dividend of 1.3%. SLB is priced 3.5 times its book value and 21 times its free cash flow. SLB may be pulled back to fair value in a correction, but most likely won't be a bargain.


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GuruFocus has detected 12 Warning Signs with HCP Inc $HCP.
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Performances of the stocks mentioned by Michael Hamlett Jr

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pbarker4610 profitable years, 0% Yield
jont017Low Ebitda/EV
pbarker46PB & PS
jjcarlin99Utilities - non-regulated
jjcarlin99MidStream Oil & Gas
pbarker46EV/EBITDA & P/Med PS
pbarker46High short
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