Novice Investing - Stock to Watch

Date: Monday 01st 2008f December 2008 04:46:52 PM

Stock To Watch - 10/17/2005

By: Novice Investing Staff

The 52 week low list is an excellent place to look for potential turnaround. Companies that are having short-term problems will get their stock price hammered. Occasionally, we will display a list of these kind of companies from Businessweek screener to help you getting started. Here are a few list:

Mattel Inc. (MAT). The maker of barbie's doll is not doing too well as it missed earning expectation today. Here is the earning story. It fell 4% on the day to $ 15.23. At this price, MAT is trading at a forward P/E of 12.7. MAT has brand name product line such as Barbie that can produce consistent cash flow. While it is not exactly at our buying point, it is worth a look.

Verizon Communications Inc. (VZ). VZ has been making the list for quite some time now. It has a juicy 5.40% dividend. Throw in Verizon's enormous debt of $ 11 per share, Verizon is trading at a forward P/E of 16.07. If you wait a little longer, Verizon might be a good investment considering the gloom and doom surrounding baby bells stocks.

Knight Ridder Inc. (KRI). Newspaper stocks generally has been weak due to the weakness in advertising revenue. KRI currently trades at $ 55, which implies a forward P/E ratio of 21 if long-term debt is included in the calculation. It doesn't look cheap. Furthermore, KRI has a substantial $ 1.82 Billion of goodwill. This makes KRI less attractive as an investment.

Kimberly Clark Corp. (KMB). The maker of personal care products hit 52 week low recently. Rising oil prices had cut into profitability as expenses are expected to soar. Including its long-term debt, KMB is trading at a forward P/E of 16.

Which one is our favorite? At current price, our favorite is ... none. Our methodology is to find companies trading at a discount to its fair value. Our fair value is defined roughly when a stock is yielding 3% above the rate of 10 year treasury bond. You can go view our portfolio criteria here.

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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Mattel Inc. (MAT) or any other securities.

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