I am beginning to see some values emerge, but I'm not convinced that they won't get a lot cheaper in a month or so. So I'm making a list and checking it twice, just like Santa. These are stocks that I'm considering buying if they get a certain price target. These price targets aren't set in stone, as I realize that I am bad at calling bottoms.
Comcast(CMCSA)-This is still the largest cable operator in the United States, but its also still a bit too price for me. Cable is at a crossroads and I think that it'll be some time before they figure out how to take on the phone companies.
Citigroup-The government will not allow the largest bank in the country to fail or become a trading vehicle for wealthy Arabs. I have no idea how far this one will fall, but I'm buying at $17 and below.
Goldman Sachs(GS)- A trailing P/E of 6 and a forward one of 7. I should probably pull the trigger now, but I'm waiting for it to hit the 140s. Can you believe that Goldman is cheaper than Citi?
Johnson & Johnson(JNJ)-great household names and as well as a growing stable of drugs and medical devices. It's been flat for about three years. I am encouraged by the recent insider buying.
Bank of America(BAC)- Largest depositor base in the country, branches everywhere you turn. A really nice yield(6.8%)and trading at only 11x earnings. However, I don't feel great about the Countrywide transaction; it seems to have eventual write down written all over it. I'll wait to see what happens with that before plunking down cash.
Allied Capital Corporation(ALD)-These guys are basically corporate pawnbrokers. They lend to distressed companies on terms mostly favorable to themselves. They have an 11.8% yield and could actually
benefit from a recession. Still, earnings and cash flow are going in the wrong direction and the price is expensive. If it falls under book value, then I might pull the trigger.
Fording Canadian Coal Trust(FDC)-The group is expensive, even after taking a hit a few months back. No one's growing free cash flow and earnings are pretty flat for the major companies. Plus, there's all this talk about the death of coal and any other dirty source of energy. Well, it ain't happening. There's too much of this stuff around to ignore and the industry spends too much money on K Street. Plus China is not in the same rush that we are to go green so they'll be using a ton of this stuff for the forseeable future.
