Tuesday, August 15, 2006
I'm Back!!!
Ok, time to get back at it. I've been busy, but that's no excuse not to make money. I have been doing well over the past few months in my 401k, driven primarily by RAI, DB and a few good trades. I recently sold RAI and may look to pick it back up, post split (today) and before the deadline for dividends.
As I said in my other blog, the new blog here will not only post picks, but reasons.
Well, I had just typed up my first pick and as I did more homework, changed my mind. I was going to say that HD is a good buy right now. Well, I would have been wrong. I think it could be a good buy soon, but at $34, even though its almost at a 3-year low, its still not a good buy. Upside potential for the end of next year is under $40 and this is no longer a growth stock. Let's assume the bad, housing market continues to fall, their margins shrink and sales fall. Next year's target EPS of 3.37 gets reduced to 3.10 and the P/E drops on confidence, you're staring $30 in the face or worse. So, it falls to $27, buy otherwise wait until Varney Bros. buys a new mixer, then buy.
As I said in my other blog, the new blog here will not only post picks, but reasons.
Well, I had just typed up my first pick and as I did more homework, changed my mind. I was going to say that HD is a good buy right now. Well, I would have been wrong. I think it could be a good buy soon, but at $34, even though its almost at a 3-year low, its still not a good buy. Upside potential for the end of next year is under $40 and this is no longer a growth stock. Let's assume the bad, housing market continues to fall, their margins shrink and sales fall. Next year's target EPS of 3.37 gets reduced to 3.10 and the P/E drops on confidence, you're staring $30 in the face or worse. So, it falls to $27, buy otherwise wait until Varney Bros. buys a new mixer, then buy.
