I have been tracking five stocks over the past month. In this article, I analyze five picks on a relative value basis and analyze each stock's performance over the past month.
McDonald's Corporation (MCD): When I reviewed this stock one month ago it was at $100.55 per share and today it's hovering around $100 per share. In the same time period the Dow Jones Industrial Average has risen from 12300 to 12862, a gain of 562 points. The stock is also just coming off its 52 week high of $102.22 per share and is following an established upward trend. In addition to the capital appreciation McDonald's stock provides, the company also pays a dividend of $2.80 per share (annually) which amounts to a dividend yield of about 2.8% 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 significantly on a consistent basis. The trailing twelve month price to earnings multiple on the stock is 18.98 on earnings of $5.27 per share-- compared to the industry average of 20.33. This suggests the stock is still underpriced compared to its pears and has room to run. The company's two closest competitors are Yum! Brands, Inc. (YUM) and Panera Bread Company (PNRA). Yum! Brands currently has a PEG ratio of 1.95 and Panera Bread Company has a PEG ratio of 1.80. McDonald's is slightly cheaper by comparison with a PEG ratio of 1.79. I believe this stock is a buy at current price levels.
SPDR Gold Trust (GLD, Financial): One month ago this stock was at $160.50 per share and today it's trading around the $167 mark. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. This stock is also following an established upward trend that has taken it from $130 per share twelve months ago. SPDR Gold Trust is an exchange traded fund that is meant to track the commodity price of gold bullion. The fund is set up to make it easier for an investor to invest in gold without the expense of investing in bullion itself. Gold is generally used in a portfolio for diversification purposes and as a safe haven against down turns in the economy. The company accepts deposits of gold bullion and distributes shares of the trust in return. In relation to its pears SPDR Gold Trust is presently the largest holder of gold bullion in the world with over 41 million ounces in deposit. The company's two closest competitors are UBS E-TRACS CMCI Gold TR ETN (UBG) and UBS E-TRACS S&P 500 Gold Hedged Idx ETN (SPGH). Since most exchange traded funds track the price of the commodity the only significant difference between them is the funds expenses and fees. I rate this stock a buy right now.
ZELTIQ Aesthetics (ZLTQ, Financial): When I checked in one month ago this stock was trading at $11.08 per share and today it trades around the $11 mark. In the same time period the Nasdaq has risen from 2650 to 2905, a gain of 255 points. ZELTIQ Aesthetics is a manufacturer of medical devices. The company is best known for its development of a device called CoolSculpting which selectively cools small areas of fat on the human body to aid in the elimination of the fat from the body. The company markets the product to physicians and charges fees for treatments. There is not much history available on the company as it just went public in October of 2011 (without much fan fare) and after a short period of capital appreciation dropped below its initial public offering price of $13 per share. However, the company has announced that it is in negotiations with world renowned Massachusetts General Hospital that may lend some credibility to the company's technology, but that remains to be seen. The company's main competitor in this (chilling) sector is Solta Medical, Inc (SLTM). Solta Medical currently has a PEG ratio of -2.41 and a five year earnings growth forecast of 25%. ZELTIQ Aesthetics is a little more expensive comparatively with a PEG ratio of -1.28 for its five year earnings growth forecast of 30%. It is for these reasons that I would avoid buying shares of ZELTIQ Aesthetics for now.
Advance Auto Parts (AAP, Financial): One month ago this stock was $72.08 per share and today it's trading around the $76 level and hitting new 52 week highs on a daily basis. The S&P has risen from 1280 to 1325 in the same time period , a gain of 45 points. In addition to the stock's capital appreciation the company also pays a dividend of $.24 (annually) which amounts to a dividend yield of about .3% at the stock's current price. Advance Auto Parts has paid this dividend consistently since 2006. The trailing twelve month price to earnings multiple on the stock is 16.36 on earnings of $4.70 per share-- compared to the sector average of 16.98. This implies investors are not yet willing to pay a premium on the stock. Advance Auto Parts is the second largest automotive parts retailer in the United States with over 3000 stores nationwide. The company's two closest competitors are O'Reilly Automotive, Inc. (ORLY) and Pep Boys-Manny, Moe & Jack (PBY). O'Reilly Automotive currently has a PEG ratio of 1.27 and Pep Boys currently has a PEG ratio of 1.53. Advance Auto Parts is relatively cheaper with a PEG ratio of only .97. I would rate this stock a buy right now, even at current price levels.
AutoZone (AZO, Financial): When I reviewed this stock one month ago it was at $345 per share and today it's trading around $354 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is presently hitting new 52 week highs on a daily basis and following a well established upward trend. The trailing twelve month price to earnings multiple on the stock is 17.25 on earnings of $20.47 per share-- compared to the sector average of 16.98, suggesting investors are willing to pay a premium on the stock. AutoZone is the largest automotive parts retailer in the United States with over 4000 stores nationwide. The company has been doing exceptionally well over the past few years as people are fixing there old cars rather than buying new ones in the economic downturn. The company's two top contenders in this market are O'Reilly Automotive, Inc. (ORLY) and Pep Boys-Manny, Moe & Jack (PBY). O'Reilly Automotive currently has a PEG ratio of 1.27 with a five year earnings growth forecast of 17.1% and Pep Boys has a PEG ratio of 1.53 with a five year earnings growth forecast of 14%. AutoZone is cheaper by comparison with a PEG ratio of only 1.06 and a five year earnings growth forecast of 14.2%. I rate this stock a buy right now based on its recent upward momentum and the trend of do-it-yourself home mechanics fixing their cars rather than buying new ones.
McDonald's Corporation (MCD): When I reviewed this stock one month ago it was at $100.55 per share and today it's hovering around $100 per share. In the same time period the Dow Jones Industrial Average has risen from 12300 to 12862, a gain of 562 points. The stock is also just coming off its 52 week high of $102.22 per share and is following an established upward trend. In addition to the capital appreciation McDonald's stock provides, the company also pays a dividend of $2.80 per share (annually) which amounts to a dividend yield of about 2.8% 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 significantly on a consistent basis. The trailing twelve month price to earnings multiple on the stock is 18.98 on earnings of $5.27 per share-- compared to the industry average of 20.33. This suggests the stock is still underpriced compared to its pears and has room to run. The company's two closest competitors are Yum! Brands, Inc. (YUM) and Panera Bread Company (PNRA). Yum! Brands currently has a PEG ratio of 1.95 and Panera Bread Company has a PEG ratio of 1.80. McDonald's is slightly cheaper by comparison with a PEG ratio of 1.79. I believe this stock is a buy at current price levels.
SPDR Gold Trust (GLD, Financial): One month ago this stock was at $160.50 per share and today it's trading around the $167 mark. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. This stock is also following an established upward trend that has taken it from $130 per share twelve months ago. SPDR Gold Trust is an exchange traded fund that is meant to track the commodity price of gold bullion. The fund is set up to make it easier for an investor to invest in gold without the expense of investing in bullion itself. Gold is generally used in a portfolio for diversification purposes and as a safe haven against down turns in the economy. The company accepts deposits of gold bullion and distributes shares of the trust in return. In relation to its pears SPDR Gold Trust is presently the largest holder of gold bullion in the world with over 41 million ounces in deposit. The company's two closest competitors are UBS E-TRACS CMCI Gold TR ETN (UBG) and UBS E-TRACS S&P 500 Gold Hedged Idx ETN (SPGH). Since most exchange traded funds track the price of the commodity the only significant difference between them is the funds expenses and fees. I rate this stock a buy right now.
ZELTIQ Aesthetics (ZLTQ, Financial): When I checked in one month ago this stock was trading at $11.08 per share and today it trades around the $11 mark. In the same time period the Nasdaq has risen from 2650 to 2905, a gain of 255 points. ZELTIQ Aesthetics is a manufacturer of medical devices. The company is best known for its development of a device called CoolSculpting which selectively cools small areas of fat on the human body to aid in the elimination of the fat from the body. The company markets the product to physicians and charges fees for treatments. There is not much history available on the company as it just went public in October of 2011 (without much fan fare) and after a short period of capital appreciation dropped below its initial public offering price of $13 per share. However, the company has announced that it is in negotiations with world renowned Massachusetts General Hospital that may lend some credibility to the company's technology, but that remains to be seen. The company's main competitor in this (chilling) sector is Solta Medical, Inc (SLTM). Solta Medical currently has a PEG ratio of -2.41 and a five year earnings growth forecast of 25%. ZELTIQ Aesthetics is a little more expensive comparatively with a PEG ratio of -1.28 for its five year earnings growth forecast of 30%. It is for these reasons that I would avoid buying shares of ZELTIQ Aesthetics for now.
Advance Auto Parts (AAP, Financial): One month ago this stock was $72.08 per share and today it's trading around the $76 level and hitting new 52 week highs on a daily basis. The S&P has risen from 1280 to 1325 in the same time period , a gain of 45 points. In addition to the stock's capital appreciation the company also pays a dividend of $.24 (annually) which amounts to a dividend yield of about .3% at the stock's current price. Advance Auto Parts has paid this dividend consistently since 2006. The trailing twelve month price to earnings multiple on the stock is 16.36 on earnings of $4.70 per share-- compared to the sector average of 16.98. This implies investors are not yet willing to pay a premium on the stock. Advance Auto Parts is the second largest automotive parts retailer in the United States with over 3000 stores nationwide. The company's two closest competitors are O'Reilly Automotive, Inc. (ORLY) and Pep Boys-Manny, Moe & Jack (PBY). O'Reilly Automotive currently has a PEG ratio of 1.27 and Pep Boys currently has a PEG ratio of 1.53. Advance Auto Parts is relatively cheaper with a PEG ratio of only .97. I would rate this stock a buy right now, even at current price levels.
AutoZone (AZO, Financial): When I reviewed this stock one month ago it was at $345 per share and today it's trading around $354 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is presently hitting new 52 week highs on a daily basis and following a well established upward trend. The trailing twelve month price to earnings multiple on the stock is 17.25 on earnings of $20.47 per share-- compared to the sector average of 16.98, suggesting investors are willing to pay a premium on the stock. AutoZone is the largest automotive parts retailer in the United States with over 4000 stores nationwide. The company has been doing exceptionally well over the past few years as people are fixing there old cars rather than buying new ones in the economic downturn. The company's two top contenders in this market are O'Reilly Automotive, Inc. (ORLY) and Pep Boys-Manny, Moe & Jack (PBY). O'Reilly Automotive currently has a PEG ratio of 1.27 with a five year earnings growth forecast of 17.1% and Pep Boys has a PEG ratio of 1.53 with a five year earnings growth forecast of 14%. AutoZone is cheaper by comparison with a PEG ratio of only 1.06 and a five year earnings growth forecast of 14.2%. I rate this stock a buy right now based on its recent upward momentum and the trend of do-it-yourself home mechanics fixing their cars rather than buying new ones.
