Coach Inc. is a very strong company, with healthy financials and a very consistent and promising level of growth in earnings. The company is suitable for the Defensive Investor, having passed every requirement except the PB ratio requirement.
Archives for December 2013
Suburban Propane Partners is a company that once had a very promising potential for profitable investing. However, the last few years have seen a significant fall in earnings, and the company now is not suitable for either the Defensive Investor or the Enterprising Investor.
Motorola Solutions Inc. presents an interesting scenario. The company is far from suitable for the Defensive Investor type, defined as investors that seek to have the least possible amount of risk, but is suitable for the Enterprising Investor despite failing the earnings stability requirement.
Schlumberger Ltd. has achieved moderate growth and may be suitable for the Enterprising Investor. For the Defensive Investor, the company fails to qualify due to a current ratio that is not quite strong enough and because it is trading at high PEmg and PB ratios.
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Cardinal Health Inc. is not suitable for either the Defensive Investor or the Enterprising Investor. The company’s current ratio is too low for either investor type, the company has not significantly grown its earnings over either a five year period or a ten year period, and the company trades at too high a PEmg and PB ratios.
Raytheon Company is a strong possibility for the Enterprising Investor. The company does not pass enough requirements in order to be suitable for the Defensive Investor, by not having a strong enough current ratio and trading at a high PB ratio.
AGL Resources Inc. does not qualify for either the Defensive Investor or the Enterprising Investor, due in part to its large level of debt relative to its current assets, but also as a result of its poor history of growth. This company may be suitable for those looking for a dividend, but if the company does not begin to see growth it is unlikely to be able to continue to grow dividends into the future.
Qualcomm Inc. is a very attractive company at a great price. The company nearly qualifies for the Defensive Investor, but fails due to a high PEmg ratio and a high PB ratio.
We looked at 10 different companies this week. Here’s a summary of the ModernGraham Valuations. For more detailed analysis, click on the name of the company. To see screens of all of our valuations, be sure to get a copy of this month’s edition of ModernGraham Stocks and Screens! The Elite (Defensive or Enterprising and Undervalued)