Joshua Byrini's Market View
Byrini's obeservations should not be considered recommendations, advice or suggestions to buy, sell or hold securities, commodities, commodity contracts, options, futures, warrants, insurance contracts, real estate, gemstones, art work or derivatives, as he is neither a registered securities, commodities or real estate broker, diamond merchant, art dealer, or investment advisor. These observations are for informational purposes only. In other words, you are on your own chief.Tuesday, October 11, 2005
"Peg
It will come back to you
Peg
It will come back to you
Then the shutter falls
You see it all in 3-D
It's your favorite foreign movie"
PEG begins with Ben Graham's favorite measure, the P/E Ratio, which let's you disregard stock price and focus on what counts, the relative value of a company's shares based on its average earnings. And if it's good enough for Ben Graham, it's just fine for Josh. Ben Graham is the reason the world is off gold standard (however pissed off Steve Forbes remains about it), he taught Warren Buffett how to invest, and is basically to investing what Louis Armstrong is to popular music. So, we'll start with P/E, no matter what the four letter traders say.
Add an earnings growth factor (no, it's not available at Vitamins.com), which allows you to rank stocks with low P/Es in light of their average annual earnings growth, and presto. Now you've got a place to start looking for stocks selling for at a discount to their growth prospects. They are not necessarily unloved, or beaten down, or ignored; but maybe they are not noticed by the wall street machine yet. After all, you can be the best hockey player in Canada; but who knows it if the NHL scouts never show up on you pond.
It's a good method, as the best laid plans of mice and men go, and a hell of a lot easier when S & P does sorts out the market of stocks for you.
So here is where we begin, a sorting of securities by S and P based on their attractive PEG ratios and these criteria:
PARL
GOOD
HTRN
VIP
NNBR
BELM
XTO
BOO
RRA
TMI
CSE
ICTG
PENN
GW
CDIS
The bolded symbols are "strong buys".
And so we have a place to start looking for undervalued calls, which can put us in a position to catch some run up. All this to say what?
Well, so far, we like the Russian cellphone play in VIP for a few reasons. First, it has a low low price to cash flow of just 8, leading the field (or trailing it).
Next, it's actual PEG is low too, tied with PARL, the luxury odor maker growing leaps and bounds through sales at specialty retailers. And finally, it has calls, and LEAPS (the long kind), out to 07, which offers us a cheap way to get a slice of their pie. Here are a few "out of the money" positions to watch in Jan 06 and Jan 07, for your edification:
What's the frequency Kennith?
VIP also puts us on to the scent of other cell phone companies around the world, in similar circumstances (extracting large chuncks of cash from blabber mouths the world over, who would soon part with their shoes than give up Cell service, wherever they are). A quick look at their Peer group of ADRs, showing companies trading on the exchanges, with similar market caps, revenues, net margins, and Ben's P/E. Here are a few with P/Es close to VIP's at 17, and Net Margins close to VIP's 19 that seem to be doing as well doing the same kind of thing:
TSP (Brazil)
CN (China)
CHT (China)
CHA (China)
SCM (Switzerland)
TMX (Mexico)
TLS
PHI (Phillippines)
CTC (Chile)
SNGNY (Singapore)
It will come back to you
Peg
It will come back to you
Then the shutter falls
You see it all in 3-D
It's your favorite foreign movie"
PEG begins with Ben Graham's favorite measure, the P/E Ratio, which let's you disregard stock price and focus on what counts, the relative value of a company's shares based on its average earnings. And if it's good enough for Ben Graham, it's just fine for Josh. Ben Graham is the reason the world is off gold standard (however pissed off Steve Forbes remains about it), he taught Warren Buffett how to invest, and is basically to investing what Louis Armstrong is to popular music. So, we'll start with P/E, no matter what the four letter traders say.
Add an earnings growth factor (no, it's not available at Vitamins.com), which allows you to rank stocks with low P/Es in light of their average annual earnings growth, and presto. Now you've got a place to start looking for stocks selling for at a discount to their growth prospects. They are not necessarily unloved, or beaten down, or ignored; but maybe they are not noticed by the wall street machine yet. After all, you can be the best hockey player in Canada; but who knows it if the NHL scouts never show up on you pond.
It's a good method, as the best laid plans of mice and men go, and a hell of a lot easier when S & P does sorts out the market of stocks for you.
So here is where we begin, a sorting of securities by S and P based on their attractive PEG ratios and these criteria:
Criteria:
- EPS Gwth. (Proj. Next Yr vs. This Yr): Greater than or Equal to 25%,
- P/E (Next Year - Est.): Greater than or Equal to 10,
- EPS Growth (Proj. 5 Yr): Less than or Equal to 25%,
- EPS Gwth. (Proj. This Yr vs. Last Yr): Greater than or Equal to 25%,
- PEG Ratio: Less than or Equal to 1
PARL
GOOD
HTRN
VIP
NNBR
BELM
XTO
BOO
RRA
TMI
CSE
ICTG
PENN
GW
CDIS
The bolded symbols are "strong buys".
And so we have a place to start looking for undervalued calls, which can put us in a position to catch some run up. All this to say what?
Well, so far, we like the Russian cellphone play in VIP for a few reasons. First, it has a low low price to cash flow of just 8, leading the field (or trailing it).
Next, it's actual PEG is low too, tied with PARL, the luxury odor maker growing leaps and bounds through sales at specialty retailers. And finally, it has calls, and LEAPS (the long kind), out to 07, which offers us a cheap way to get a slice of their pie. Here are a few "out of the money" positions to watch in Jan 06 and Jan 07, for your edification:| -VIPAZ | Jan 06 43.3750 | 2.10 | 0.00 | 1.85 | 2.05 | 0 | 2,285 |
| -VIPAI | Jan 06 45.0000 | 1.45 | -0.10 | 1.30 | 1.50 | 100 | 3,417 |
| -OWYAI | Jan 07 45.0000 | 5.70 | -0.10 | 5.40 | 5.90 | 10 |
What's the frequency Kennith?
VIP also puts us on to the scent of other cell phone companies around the world, in similar circumstances (extracting large chuncks of cash from blabber mouths the world over, who would soon part with their shoes than give up Cell service, wherever they are). A quick look at their Peer group of ADRs, showing companies trading on the exchanges, with similar market caps, revenues, net margins, and Ben's P/E. Here are a few with P/Es close to VIP's at 17, and Net Margins close to VIP's 19 that seem to be doing as well doing the same kind of thing:
TSP (Brazil)
CN (China)
CHT (China)
CHA (China)
SCM (Switzerland)
TMX (Mexico)
TLS
PHI (Phillippines)
CTC (Chile)
SNGNY (Singapore)
posted by BoxedMerlot # 12:44 PM 
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