Blue chip – Jamiron http://jamiron.net/ Sat, 01 Oct 2022 03:36:34 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://jamiron.net/wp-content/uploads/2021/10/icon-20-120x120.png Blue chip – Jamiron http://jamiron.net/ 32 32 S&P 500 Index Bear Market: 2 Blue Chip Stocks That Haven’t Been This Cheap in Years https://jamiron.net/sp-500-index-bear-market-2-blue-chip-stocks-that-havent-been-this-cheap-in-years/ Fri, 30 Sep 2022 21:06:00 +0000 https://jamiron.net/sp-500-index-bear-market-2-blue-chip-stocks-that-havent-been-this-cheap-in-years/ It’s no secret that the economy is slowing, and investors should prepare for potential bad earnings news in the months ahead. However, it is also true that stocks sold off aggressively in anticipation of this. So actions like an industrial giant General Electric (EG -1.31%) and United Parcel Service (UPS -2.29%) now look like excellent […]]]>

It’s no secret that the economy is slowing, and investors should prepare for potential bad earnings news in the months ahead. However, it is also true that stocks sold off aggressively in anticipation of this. So actions like an industrial giant General Electric (EG -1.31%) and United Parcel Service (UPS -2.29%) now look like excellent value. Here’s why.

General Electric faces risk but also offers a significant reward

The industrial giant is symbolic of the value available in the market today. There is no doubt that its short-term earnings and cash flow projections are at risk. However, this threat stems primarily from its inability to overcome supply chain disruptions in its aviation, healthcare and renewable energy businesses. Ongoing issues reduce GE’s earnings potential and push back its free cash flow (FCF) generation.

GE HealthCare (a company set to be spun off in early January) is a good example. For example, during the recent Morgan Stanley Laguna Conference, GE CFO Carolina Dybeck Happe noted that the GE HealthCare team “had a tough couple of quarters,” but stressed that the problem was not “on the demand side.” In fact, GE HealthCare’s revenue growth has been significantly dampened by supply chain issues in 2022. As such, GE now expects to generate about $3 billion in healthcare profits in 2022, compared to a previous estimate of $3.1-3.3 billion. She’s right; after all, GE HealthCare’s orders grew 5% organically in the first half, and the company is likely to stick to its backlog once supply chain issues ease.

On valuation issues, the downward revision to short-term expectations is reflected in Wall Street analysts’ consensus estimates for GE as a whole. For example, the consensus is $6.5 billion in FCF in 2023 (compared to management’s target of $7 billion). Yet even that figure ($6.5 billion) would put GE at a 2023 price/FCF multiple of less than 11 times FCF. Put another way, GE (in its current form, including healthcare) could generate 9.2% of its market capitalization in FCF in 2023. That’s a very cheap valuation for a company with good long-term growth prospects. in aviation and healthcare, and strong power demand.

With many opportunities to catch up on cash flow in its aviation, healthcare and renewable energy businesses in the future, the potential reward of buying GE stock outweighs the risk of decline from a short-term reduction in earnings/cash flow expectations.

UPS continues to transform its business

Parcel delivery is a cyclical business and any economic downturn will hurt UPS sales. Indeed, UPS’s rival fedex has already warned of deteriorating end markets in 2022. And on the latest earnings call, UPS Chief Financial Officer Brian Newman said macro conditions in the second quarter were “challenging.” CEO Carol Tomé would go on to say that the weak environment has caused US domestic parcel volumes to decline “more than expected.”

There’s no doubt that, based on comments from FedEx and signs of weakness in the economy, UPS could disappoint investors in its Oct. 25 earnings report. Still, with the stock down 23% this year, it’s hard not to think that a lot of bad news is already priced in to the stock.

A quick look at the ratio of UPS’s enterprise value (market capitalization plus net debt) to earnings before interest, taxes, depreciation and amortization (EBITDA) shows how cheap the stock is on the basis of current EBITDA.

Data by Y-Charts

Additionally, there is ample evidence that UPS is achieving its goal of repositioning its business to maximize profitable deliveries rather than seeking volume for volume’s sake. Additionally, UPS is focused on sweating its existing assets rather than increasing spending to drive out less profitable e-commerce deliveries. In particular, its strategy of focusing on small and medium-sized businesses and healthcare is helping to boost profits and profit margins as it moves to be more selective about deliveries. This should continue as the economy recovers from slowing growth. So on balance, now seems like a good time to invest in a company that is improving its underlying fundamentals, even if it faces near-term earnings pressure.

Lee Samaha has no position in the stocks mentioned. The Motley Fool has posts and recommends FedEx. The Motley Fool has a disclosure policy.

]]>
Blue chip stocks to buy for long-term gains as market hits new lows https://jamiron.net/blue-chip-stocks-to-buy-for-long-term-gains-as-market-hits-new-lows/ Mon, 26 Sep 2022 22:27:00 +0000 https://jamiron.net/blue-chip-stocks-to-buy-for-long-term-gains-as-market-hits-new-lows/ Stocks continue to fall as Wall Street increases selling in response to heightened fears about slowing economic growth. The S&P 500 hit new 52-week lows on Monday. In fact, the benchmark is now trading at its lowest levels since November 2020, with a recession more likely as the US Federal Reserve and major central banks […]]]>

Stocks continue to fall as Wall Street increases selling in response to heightened fears about slowing economic growth. The S&P 500 hit new 52-week lows on Monday. In fact, the benchmark is now trading at its lowest levels since November 2020, with a recession more likely as the US Federal Reserve and major central banks around the world raise interest rates to fight the surge. of inflation.

The Fed and Jay Powell are willing to do anything they can to bring prices down and are willing to cause economic hardship to do so. The Fed’s 0.75% hike last week and its efforts in November and December should lift the fed funds rate to between 4.25% and 4.5% by the end of 2022.

The Fed’s aggressive actions and outlook, coupled with a flight to safety from investors around the world, propelled 10-year and 2-year US Treasuries to levels not seen during the financial crisis. Yields on the 10-year jumped to around 3.9% on Monday, from 3.5% at the mid-June market lows and 1.6% at the start of 2022. The 2-year is floating at 4.4%, from 0.80% at the start of 2022 and 0.30% this time last year.

Higher rates affect equity markets in various ways. High yields make safe investments such as bonds more attractive, while reducing what investors are willing to pay for risk in the form of valuation multiples, and more.

Higher interest rates have already significantly cooled the housing market and crushed growth-oriented stocks. Moreover, the overall earnings outlook for the S&P 500 is already moving strongly in the wrong direction as higher rates and prices cool economic activity and eat away at growth and earnings.

Image source: Zacks Investment Research

The fact that noticeably weaker growth is already showing in the earnings outlook and that interest rates are reacting to the Fed’s hawkish stance can be seen as a positive for longer-term investors looking to find points. solid entry into solid stocks. Now, it is impossible to call a market bottom in real time and stocks could continue to fall.

Fortunately, investors with long-term horizons shouldn’t be afraid to start small positions in blue-chip stocks amid economic headwinds. The United States will rebound and economic activity will continue even during recessions. And always remember that many people are more enthusiastic about buying stocks near the top of the market and are afraid to buy at what, in retrospect, turns out to be the bottom.

Here are two blue-chip stocks investors might consider adding to their long-term portfolios as the market falls to fresh 52-week lows.

Intuit Inc. INTU

Intuit’s growing portfolio includes online tax help giant TurboTax, as well as accounting software, small business money management tools, personal finance offerings and more. Intuit has spent the past few years expanding its portfolio even further with two major acquisitions. INTU purchased personal finance portal Credit Karma in December 2020 and Mailchimp last November.

The addition of Mailchimp, which also provides digital advertising services and customer relationship management tools, expands Intuit’s reach into entirely new pockets of the economy. The diversified portfolio helps Intuit provide more offerings to its small and medium-sized business customers and grow its customer base. Intuit now has over 100 customers worldwide.

Zacks Investment Research
Image source: Zacks Investment Research

Intuit has consistently increased sales over the past 20 years, with only two small year-over-year declines. This series includes sales growth of between 11% and 32% over the past seven years. The company’s FY22 (period ended July 31) adjusted earnings climbed 22% on sales up 32% (24% excluding Mailchimp). INTU’s estimates for FY23 and FY24 have held up well since their August 23 release as its management teams remain optimistic.

Zacks estimates that Intuit’s sales will climb 14% in FY23 and 13% next year to help boost its adjusted earnings by 16% and 15%, respectively. The growth outlook underscores how crucial Intuit’s portfolio remains in the face of a wide-ranging economic downturn. INTU’s earnings estimates have held up well to earn it a No. 3 (hold) Zacks rank.

Intuit has not remained above sales, which has particularly affected growth-oriented companies. INTU shares have fallen 45% below their 2021 highs. But the stock is still up 175% over the past five years to crush the 55% and 575% of the Zacks Tech sector over the past decade.

The sell-off, combined with its strong earnings outlook, has significantly recalibrated its valuation. Intuit is still trading at a significant premium to the tech sector at 42.1X forward 12-month earnings versus 19.1X. But that puts INTU near its own 10-year median.

Zacks Investment Research
Image source: Zacks Investment Research

Intuit’s tax and other software offerings should remain vital during periods of economic expansion and contraction. The company has a strong balance sheet and pays a dividend, which it recently increased by 15%. The INTU also approved an additional $2 billion in share buybacks to bring its current authorization to $3.5 billion.

Intuit stock is trading 50% below its current Zacks consensus price target. And Wall Street remains extremely bullish on the stock, with 16 of the 17 brokerage recommendations Zacks racking up at “Strong Buys.” Therefore, investors might consider starting a position in the diversified software stock despite the economic turmoil.

Mastercard Incorporated MA

Mastercardi is a consumer and business credit card powerhouse that operates an elaborate backend processing network. In addition to its core credit card segment, MA is actively diversifying to help transform the company into a financial technology titan designed to thrive in a digital payments economy alongside Block SQ, major Wall Street banks. and countless upstarts.

Some of Mastercard’s more recent efforts include cryptocurrency, buy-it-now, pay-later offers, and other efforts focused on the future of an economy primarily based on digital transactions. Mastercard’s core credit card segment remains strong, with its cross-border travel-focused segment thriving despite fears of an economic downturn. The company beat our second-quarter EPS and sales estimates at the end of July as “overall consumer spending remained robust.”

Zacks Investment Research
Image source: Zacks Investment Research

Mastercard provided an optimistic forecast at the time, as people continue to spend big despite high inflation for 40 years. It’s also key to remember that high-income customers make up a large portion of retail spending and are much less affected by 8% inflation. In fact, Mastercard managed to raise its FY22 outlook last quarter as inflationary pressures “have yet to have a meaningful impact on overall consumer spending.”

Mastercard’s revenue in 2021 jumped 23% to surpass its pre-pandemic totals by $2 billion. Meanwhile, its adjusted earnings for FY21 soared 31%. Zacks estimates forecast an 18% increase in sales in 2022 and an increase in revenue of more than 16% in FY23 to $25.89 billion. Mastercard’s adjusted EPS is expected to grow 27% this year and another 19% in 2023.

Zacks Investment Research
Image source: Zacks Investment Research

Mastercard’s ability to increase sales and profits by doubling the rate of inflation is exceptional. And it’s only managed to beat our EPS estimates once in the past five years. The company increased its quarterly dividend by 11% last year and still has $6.7 billion remaining on its current share buyback plan. Mastercard currently earns a Zacks Rank #3 (Hold) and 12 of Zacks’ 17 brokerage recommendations are “Strong Buys” with three more “Buys” and two “Holds”.

Mastercard shares had held up better than many other high-growth stocks in 2022 until they crashed alongside most of the market in mid-August. MA shares are down about 20% since Aug. 15 to close regular trading Monday at $290 per share. These levels offer a 42% upside to Mastercard’s current consensus price target on Zacks.

The recent downturn has readjusted Mastercard’s valuation, with MA now trading near its covid lows at 24.2x 12-month forward earnings. MA’s forward P/E marks a discount of 25% from its own five-year median and 10% from its ten-year median. The stock is trading at these levels even though Mastercard shares are still up 110% over the past five years and 1,800% over the past 15 years.

5 shares ready to double

Each was handpicked by a Zacks expert as the #1 preferred stock to earn +100% or more in 2021. Previous recommendations have skyrocketed +143.0%, +175.9%, + 498.3% and +673.0%.

Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.Today, check out these 5 potential home runs >>

Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report

Mastercard Incorporated (MA): Free Inventory Analysis Report

Intuit Inc. (INTU): Free Inventory Analysis Report

Block, Inc. (SQ): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

]]>
Multibagger’s blue chip shares turn ₹1 lakh to ₹30 Cr in 23 years: Buy? https://jamiron.net/multibaggers-blue-chip-shares-turn-%e2%82%b91-lakh-to-%e2%82%b930-cr-in-23-years-buy/ Thu, 22 Sep 2022 17:18:17 +0000 https://jamiron.net/multibaggers-blue-chip-shares-turn-%e2%82%b91-lakh-to-%e2%82%b930-cr-in-23-years-buy/ With a market value of ₹1 02 575.98 Cr, Eicher Motors Ltd. is a blue-chip company operating in the Consumer Discretionary Goods and Services (CDGS) industry. Flagship company of the Eicher Group, Eicher, the parent company of Royal Enfield, is a major player in the Indian automotive sector. Eicher and Sweden’s AB Volvo have entered […]]]>

With a market value of 1 02 575.98 Cr, Eicher Motors Ltd. is a blue-chip company operating in the Consumer Discretionary Goods and Services (CDGS) industry. Flagship company of the Eicher Group, Eicher, the parent company of Royal Enfield, is a major player in the Indian automotive sector. Eicher and Sweden’s AB Volvo have entered into a strategic partnership called Volvo Eicher Commercial Vehicles Limited (VECV). Eicher Motors is listed on the BSE and the NSE, and the stock has been benchmarked against the Nifty 50 index since April 1, 2016. In a 23-year long-term investment, Eicher Motors Ltd. is one of the multibagger stocks that has transformed investors. from lakhpati to crorepati.

Eicher Motors share price history

Shares of Eicher Motors Ltd closed today at 3,750.05 each, up 1.85% from the previous close of 3,682.05. Compared to the 20-day average volume of 928,626 shares, the stock had a total volume of 659,825 shares today. Of 1.22 on January 1, 1999, at current market price, the stock price rose significantly, posting a multibagger return and an all-time high of 307,281.15%. The return on investment would therefore be worth 30.73 cr. now if an individual had invested 1 lakh in stock 23 years ago.

The stock has appreciated 20.14% over the past five years and 31.26% over the past year. The stock has appreciated 37.93% since the start of 2022. On the NSE, the stock had hit a 52-week high 3,787.25 on (September 21, 2022) and a 52-week low of 2,159.55 on (8 Mar 2022), indicating that after hitting a new high yesterday, the stock was trading 0.98% below the high and 73.64% above the low at the close of today. At today’s closing price, the stock was trading above the 5-day, 10-day, 20-day, 50-day, 100-day and 200-day exponential moving average (EMA) and moving average single (SMA).

The value of the RSI indicator of Eicher Motors Limited as of 09/22/2022 is 71.6, which shows that the scrip is in the overbought zone. For the three months ended June 2022, the company recorded a developer stake of 49.21%, an FII stake of 29.50% (up 0.28% from the quarter), a DII stake of 10.13% (up 0.18% from the quarter), a government stake of 0.10% and a public stake. 11.06% (down 0.46% quarter-on-quarter).

Should we buy the shares of Eicher Motors?

Research analysts Aditya Welekar and Shridhar Kallani of brokerage firm Axis Securities said in their research report today that “Royal Enfield (RE) domestic sales contracted 13% CAGR in the financial year. 2019-22, under the effect of multiple headwinds. Covid-induced lockdowns and rising vehicle prices due to commodity inflation, weak consumer sentiment and supply chain constraints led to lower sales. However, demand and supply constraints are currently easing and lower raw material prices, coupled with vehicle prices that are expected to remain stable, would lead to increased sales going forward. In order to gauge market sentiment, we interacted with over 22 dealers on a pan-India basis. Our channel audits suggest a 20% increase in inquiries and footfall in September 2022 and strong customer reaction to the newly launched Hunter 350.”

They further added that “the number of RE wholesale sales stood at 70,112 on August 22, up 53% year-on-year and 26% month-on-month, indicating an easing of production constraints. If current sales volumes are maintained, RE will move into a volume growth phase. Against this backdrop, the September 22 wholesale figures will be critical in determining whether the production issues are resolved. With robust demand, an expanded product portfolio, streamlined supply chains, an expanding distribution network and rapidly growing international sales, we model volume growth of 19% CAGR FY22-25E. Volume growth will lead to higher operating leverage, which together with the commodity price correction should lead to EBITDA margin expansion (+510 bps over FY22-25).”

“We are deferring our assessment from March 24 to September 24 and upgrading our rating on the stock from HOLD to BUY with a revised TP of 4,125 ( 3120 earlier). We value the RE standalone business at 27x (vs. 24x earlier) on September 24 EPS ( 3,675) and VECV at 12x EV/EBITDA (vs. 11x earlier) Sep’24 EBITDA ( 448), implying an 11% increase in CMP,” they further claimed.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

Catch all the trade news, market news, breaking news and latest updates on Live Mint. Download the Mint News app to get daily market updates.

More less

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Post your comment

]]>
Good stocks to invest in now? 4 top stocks to buy according to analysts https://jamiron.net/good-stocks-to-invest-in-now-4-top-stocks-to-buy-according-to-analysts/ Tue, 20 Sep 2022 17:07:54 +0000 https://jamiron.net/good-stocks-to-invest-in-now-4-top-stocks-to-buy-according-to-analysts/ Blue chip stocks are popular stocks of large, well-established and financially sound companies. They are called blue chips because they are considered one of the safest and most reliable investments in the market. stock Exchange. Blue chip stocks tend to be less volatile than other stocks, and they are often offer high dividend yields. For […]]]>

Blue chip stocks are popular stocks of large, well-established and financially sound companies. They are called blue chips because they are considered one of the safest and most reliable investments in the market. stock Exchange. Blue chip stocks tend to be less volatile than other stocks, and they are often offer high dividend yields.

For these reasons, blue chips are often favored by conservative investors seeking stability and income. Although they do not offer the same growth potential as other stocks, best blue chip stocks are an excellent choice for risk-averse investors seeking stability and consistent returns. If you now want to search for blue chip stocks to buy [or avoid] now here are four to look into the stock market today.

Blue Chip Stocks to Buy [Or Avoid] Today

1. Auto Zone (AZO)

The first standing AutoZone Inc. (AZO) is one of the largest retailers and distributors of automotive aftermarket parts and accessories in the United States. Specifically, the company sells items such as automotive replacement parts, chemicals, tools, equipment and accessories through its AutoZone and AutoZone Online stores. To date, AutoZone operates over 6,100 outlets in the United States.

AutoZone (AZO) Recent Stock News

On Monday this week, AutoZone announced a beat for its fourth quarter 2022 financial results. In the report, AutoZone announced fourth quarter 2022 earnings per share of $40.41 per share, with revenue of 5 ,3 billions. That was better than analysts’ estimate for the quarter, which was earnings of $38.38 per share and revenue of $5.2 billion. Additionally, the company posted an 8.9% increase in revenue over the same period in 2021.

Bill Rhodes, Chairman, President and CEO, stated in his letter to shareholders:Our results are a testament to our AutoZoners’ ongoing commitment to providing exceptional customer service every day. Our retail operations performed well this quarter, which ended with positive same-store sales on top of last year’s strong performance. And our business growth continued to be exceptionally strong at 22%. The investments we have made in both inventory availability and technology improve our competitive position. We are optimistic about our growth prospects as we approach our new fiscal year.

Apart from that, today brokerages like Citigroup (NYSE:C), and Jeffries Financial Group (NYSE: JEF) raised their price targets on AutoZone shares. In detail, Citigroup raised its price target on AZO stock from $2,250 per share to $2,520 per share. Meanwhile, Jeffries also raised its price target from $2,350 to $2,450 per share.

AutoZone (AZO) Stock Chart

By mid-morning on Tuesday, AZO shares rose more than 1% to $2,120.12 per share. Given its strong neighborhood and street reaction, do you think now is a good time to add AutoZone to your watch list?

Source: TD Ameritrade Terms of Use

[Read More] 3 hydrogen stocks to watch in September 2022

2. Apple (AAPL)

Then we have the consumer tech giant Apple Inc. (AAPL). This business needs little to no introduction for the most part, but if you’re unfamiliar, here’s a quick primer. Apple is an American multinational technology company. The company designs, develops and sells consumer electronics products, software and online services. Specifically, some of the most popular products from Apple are items like the iPhone smartphone, iPad tablet, Mac personal computer, Apple Watch smartwatch, and many more.

Apple (AAPL) Recent Stock Market News

Earlier this month, Apple announced its new product line to investors. Specifically, the company announced that it will be rolling out a new iPhone® 14 Pro and iPhone 14 Pro Max. In detail, this new iPhone will include additional features such as an Always-On display and the first-ever 48MP camera on an iPhone, among others. In addition to this, Apple also announced the launch of the new Apple Watch® Series 8 and the new Apple Watch SE®.

Additionally, Greg Joswiak, Apple’s senior vice president of worldwide marketing, said:Our customers rely on their iPhones every day, and with iPhone 14 Pro and iPhone 14 Pro Max, we’re delivering more advancements than any other iPhone. iPhone 14 Pro introduces a camera system that empowers every user – from casual to professional – to take their best photos and videos, and innovative new technologies like Always-On Display and Dynamic Island, which offers new interactions for Notifications and Activities.

Carry on, just on Tuesday Evercore ISI (NYSE: EVR) reported an outperformance rating on Apple. Additionally, the brokerage raised its price target on AAPL stock from $185 per share to $190 per share.

Apple Stock Chart (AAPL)

Meanwhile, Apple shares year-to-date were down about 13.79% in Tuesday’s midday session at $156.77 per share. Given Apple’s track record and new product lineup, is now a good time to add Apple stocks to your long-term portfolio?

Action AAPL
Source: TD Ameritrade Terms of Use

3. Norwegian Cruise Line Holdings (NCLH)

After that, let’s move on to the cruise line Norwegian Cruise Line Holdings (NCLH). In short, Norwegian Cruise Line is the third largest cruise line by berths in the world. For an idea of ​​scale, the company has over 62,000 berths and operates 29 vessels. Additionally, Norwegian Cruise Line operates under three brands, which are Norwegian, Oceania and Regent Seven Seas. In May 2022, the company announced that it had redeployed its entire fleet. The company has redeployed its entire fleet from May 2022.

Norwegian Cruise Line Holdings (NCLH) Recent Stock Market News

Last month, the company announced its second quarter 2022 financial results. In detail, the company announced a loss of $1.22 per share in the second quarter, with revenue of $1.2 billion. . Meanwhile, analyst estimates for the second quarter of 2022 were a loss of $0.87 per share and revenue of $1.3 billion. Additionally, the company closed Q2 with $1.9 billion in cash equivalents. This means a significant improvement from pre-pandemic levels. In fact, NCLH reported a 27,079.1% year-over-year increase in revenue.

Frank Del Rio, President and CEO of Norwegian Cruise Line Holdings, had this to say about the quarter: “WWe are encouraged by the continued strong consumer demand we are experiencing, which is reflected in our record prices, accelerating booking volumes, particularly for 2023 and beyond, and the highest onboard revenue generation ever. recorded. Having emerged from the pandemic and resumed more normal operations, we remain true to our strategy and commitment to protecting our brand positioning and leading pricing, which we believe is the best way to maximize value. long term for all our stakeholders. .

On Tuesday, the company received an upgrade from the wait to buy from Financial truist (New York Stock Exchange: TFC). The brokerage raised its price target on NCLH shares from $18 to $19 per share, representing an upside of 23.94%.

Norwegian Cruise Line Holdings (NCLH) Stock Chart

Since the start of 2022, NCLH stock has fallen more than 30% to $15.45 per share in the Tuesday afternoon trading session. However, in the last month of trading action, shares of Norwegian Cruise Line rallied approximately 23.11%. Overall, do you think the time is right to invest in Norwegian Cruise Line Holdings?

NCLH Stock
Source: TD Ameritrade Terms of Use

[Read More] Stocks to invest in now? 3 lithium mining stocks for your list

4. Human (HUM)

Last but not least, Humana inc. (HUM) is one of the largest health insurance companies in the world. In detail, the company offers a variety of health plans, including individual and family plans, as well as Medicare and Medicaid plans. Humana also provides a wide range of other services, such as drug benefit management, dental coverage, and vision care. For an idea of ​​scale, Humana currently has over 20 million customers in the United States.

Humana (HUM) Recent Stock Market News

Last week, on Thursday, Humana announced a mid-term adjusted earnings per share target of $37 in 2025. Meanwhile, the company also raised its full-year 2022 EPS outlook to around $25 per share during of its last Investor Day. This would represent a compound annual growth rate of 14% above Humana’s updated EPS guidance for 2022.

Additionally, Bruce D. Broussard, President and CEO of Humana, said this in his statement to shareholders: “We are confident in our ability to generate attractive and sustainable earnings growth, both short and long term, which will continue to drive shareholder value. Our strong competitive positioning and unique capabilities in the highly attractive Medicare Advantage market, coupled with the ability to further expand and integrate our CenterWell healthcare services capabilities, positions us for enduring leadership in the healthcare industry. value-based care.

Tuesday, Morgan Stanley (NYSE: MS) upgraded HUM stock from equal weight to overweight. They also raised their price target from $494 per share to $549 per share.

Humana (HUM) Stock Chart

So far in 2022, Humana has outperformed the broader market, with shares up more than 8% year-to-date. In Tuesday’s early afternoon trading session, HUM stock is trading up another 1% to $506.07 per share. With this update, will you add the Humana stock to your list of stocks to watch today?

HUM-share
Source: TD Ameritrade Terms of Use

If you enjoyed this article and want to learn how to trade so that you have the best chance of making a profit consistently, you need to check out this YouTube channel.
CLICK HERE NOW!!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

]]>
2 Blue Chip Stocks Tiger Management Promotes Reliability During Turbulent Markets – Microsoft (NASDAQ:MSFT), Blackstone (NYSE:BX) https://jamiron.net/2-blue-chip-stocks-tiger-management-promotes-reliability-during-turbulent-markets-microsoft-nasdaqmsft-blackstone-nysebx/ Sun, 18 Sep 2022 20:33:31 +0000 https://jamiron.net/2-blue-chip-stocks-tiger-management-promotes-reliability-during-turbulent-markets-microsoft-nasdaqmsft-blackstone-nysebx/ The end Julian Robertsonfounder of hedge fund Tiger Management, had an annual return of 31.7% from its inception in 1980 until its peak in 1998, compared to 12.7% for the S&P 500. During the second quarter, Tiger Management reduced its portfolio from 33 positions to just 13. The most notable position change was in the […]]]>

The end Julian Robertsonfounder of hedge fund Tiger Management, had an annual return of 31.7% from its inception in 1980 until its peak in 1998, compared to 12.7% for the S&P 500.

During the second quarter, Tiger Management reduced its portfolio from 33 positions to just 13. The most notable position change was in the Invesco QQQ Trust, Series 1 QQQthe hedge fund having reduced its position by 325,000 shares, and also holds put options on these shares.

Although the billionaire investor has cut many positions as rising interest rates have driven stocks lower, there are still a few stocks that Robertson is keeping in his long-term arsenal. Here are two dividend-paying stocks Tiger Management still holds through the turbulent markets.

Blackstone Group Inc. Bx offers a dividend yield of 5.40% or $5.13 per share per year, making quarterly payments, with an inconsistent history of increasing its dividends. Blackstone is one of the world’s largest alternative asset managers with total assets under management of $940.8 billion, including $683.8 billion in remunerated assets under management, as of the end of June 2022.

During the second quarter, Tiger Management reduced the hedge fund position by 305,000 shares, but remains the firm’s fourth most-held position, accounting for 12% of the portfolio or 286,500 shares held.

Leaving: S&P 500, Nasdaq Futures Plunge After Consumer Price Inflation Surprises Rise – Twitter, Peloton, Oracle Stocks In Focus

Microsoft Corporation MSFT offers a dividend yield of 1.02% or $2.48 per share per year, paying quarterly, with a notable history of increasing its dividends for 19 years. Microsoft licenses consumer and enterprise software and is known for its Windows operating systems and Office productivity suite.

During the second quarter, Tiger Management reduced its stake in Microsoft by 99,300 shares, but it is still the third most-held position in the hedge fund, accounting for 12% of the portfolio or 104,100 shares held.

]]>
Federal Realty Investment Trust: Blue Chip for sale (NYSE: FRT) https://jamiron.net/federal-realty-investment-trust-blue-chip-for-sale-nyse-frt/ Fri, 16 Sep 2022 20:35:00 +0000 https://jamiron.net/federal-realty-investment-trust-blue-chip-for-sale-nyse-frt/ buzzer Federal Real Estate (NYSE: FRT) is an old-school mall REIT that I’ve long admired but never wanted to buy because it consistently traded high. After decades of high valuation, this REIT has finally been put up for sale, now trading at a reasonable FFO multiple of 14.5X and just over 80% of net asset […]]]>

buzzer

Federal Real Estate (NYSE: FRT) is an old-school mall REIT that I’ve long admired but never wanted to buy because it consistently traded high. After decades of high valuation, this REIT has finally been put up for sale, now trading at a reasonable FFO multiple of 14.5X and just over 80% of net asset value (NAV).

FRT prides itself on having strong properties in strong locations and for the most part the data backs up their claim. If you like investing in MSA gateways, FRT is a good way to get that exposure with its mix of quality and value.

Real estate portfolio

FRT’s portfolio is very different from that of its shopping center REIT counterparts. They focus on particularly large properties. With just 104 properties, they have 25 million leasable square feet, indicating an average property size of around 240,000 square feet. It would be a large industrial warehouse, but that’s especially important for shopping malls.

At the Bank of America conference 9/13/22, FRT describes their affinity for large properties rooted in the redevelopment opportunities they present. With so much acreage, they can always find ways to improve properties after purchase to improve the NOI. Its current enhancement pipeline is $1.3 billion.

A screenshot of a computer Description automatically generated with medium confidence

S&P Global Market Intelligence

As these come to an end, this will likely lead to a nice increase in FFO/share, as $1 billion of expenses have already been paid.

Beyond property size, FRT is quite particular about where it acquires. Their portfolio is located in high-income, high-density areas, as their presentation slide highlights.

Auto-generated chart description with low confidence

TRF

It should be noted that Urstadt Biddle (UBA) has been conveniently left out compared to his peers. UBA’s 3-mile household income is actually slightly higher than FRT’s. Here is the peer comparison table as UBA presents it.

Graph, scatter plot Description automatically generated

UBA

If we follow this chain of obfuscation even further, one might note that Whitestone REIT (WSR) is conveniently left out of UBA’s peer comparison. When considering the cost of living, Whitestone has the highest household income within its catchment areas.

While I would have preferred FRT to include the full set of peers in its presentation, its household income and population metrics are very good.

Overall, FRT’s portfolio of assets is of superior quality and should trade at the high end of the shopping center FFO multiple range.

Growth

Historically, FRT has achieved a moderate growth rate via a few mechanisms:

  1. Comparable store NOI growth
  2. Deviations acquisition
  3. Developments spread

These 3 levers remain available today, but the same store NOI growth is likely to be significantly above trend for a few more years as it rebounds from a recent low.

The same store’s NOI had been fairly consistently around 3% per year until a massive drop in the pandemic.

Chart, waterfall chart Description automatically generated

S&P Global Market Intelligence

This decline in comparable store performance was far more severe than that of comparable shopping centers, as shown in the slide below.

Chart, line chart Description automatically generated

TRF

It should be noted that the FRT did not suffer during the financial crisis, so its problems in 2020 were probably not related to the recessionary aspects of the pandemic. I attribute the underperformance to the location as its assets are mostly located in areas that have seen the longest and strictest COVID lockdowns.

Automatically generated map description

S&P Global Market Intelligence

It is also partly related to tenant diversity with substantial exposure to gyms and restaurants which are normally good tenants, but not during the pandemic.

While the hit to NOI was substantial, I think it’s pretty clear that the challenges were temporary in nature and not related to the desirability of their properties.

As these sites reopened, NOI quickly rebounded. Tenants have started paying rent again and new tenants have arrived with recent quarters with record rental volume. This activity facilitated an ascent of orientation.

Text, letter Description automatically generated

TRF

POI is the operating income of the property. It’s not a metric I’ve seen many REITs use, but it’s basically equivalent to the NOI of the same store which would be more standard. 5.5% to 7% is a good pace that should drive substantial FFO growth, as each percentage point of NOI growth typically translates into more than one point of FFO growth.

In combination with the upcoming redevelopments, FRT envisions moderate to rapid growth which is reflected in the consensus estimates.

Graphical User Interface, Application Description automatically generated

S&P Global Market Intelligence

Evaluation

FRT is still trading at a somewhat premium multiple to its mall peers.

A screenshot of a computer Description automatically generated

S&P Global Market Intelligence

It is, however, quite cheap compared to its own history as it has often traded at over 20X.

Chart, line chart Description automatically generated

S&P Global Market Intelligence

It is also cheap compared to its asset value.

Graphical user interface, graph, line graph Description automatically generated

S&P Global Market Intelligence

NAVs are of course based on a capitalization rate assigned by analysts and the capitalization rate used above is 5.12%.

While I believe this is the correct cap rate for current market conditions (actual property sales data), there is an argument that with rising interest rates, capitalization will increase slightly.

Thus, the FRT may be closer to 90% of NAV rather than 80% using cap rate data.

Dividend Aristocrat

A recent series of dividend increases is just the tip of the iceberg.

Graph, histogram Description automatically generated

S&P Global Market Intelligence

This company has been raising funds for 54 years, which places it in the rare club of dividend aristocrats.

At a current yield of 4.32%, this is also a better yield than most of this elite group.

I bring this up because I know that dividend history is a big issue for a large portion of investors who rely on dividend income, but I don’t think it has a particularly big impact on fundamental value. It’s a good indicator of a company that has been run in a conservative and generally shareholder-friendly way, but I wouldn’t pay too much to chase companies on the Aristocrats list.

That said, given the substantial pullback in the market price of FRT and the reduced FFO multiple, I think it would be reasonable to buy FRT at these levels.

how i play it

In malls, I have significant exposure to Whitestone (WSR) Kite Realty (KRG) and the retail portion of Armada Hoffler (AHH).

I prefer them due to their extremely cheap valuations and their exposure mainly to the Sunbelt. Consensus market pricing still shows a slight preference for coastal gateway markets with associated REITs trading at premiums, but I believe the Sunbelt will continue to fundamentally outperform.

]]>
Are these blue chip ASX stocks losing their defensive advantages? https://jamiron.net/are-these-blue-chip-asx-stocks-losing-their-defensive-advantages/ Fri, 16 Sep 2022 02:48:03 +0000 https://jamiron.net/are-these-blue-chip-asx-stocks-losing-their-defensive-advantages/ Image source: Getty Images Some investors place their portfolios in the consumer staples, utilities, and healthcare sectors in an actual or perceived bear market. The underlying idea is that companies in these sectors should continue their strong operations even if the rest of the economy is struggling. It’s because they sell products that people can’t […]]]>

Image source: Getty Images

Some investors place their portfolios in the consumer staples, utilities, and healthcare sectors in an actual or perceived bear market.

The underlying idea is that companies in these sectors should continue their strong operations even if the rest of the economy is struggling. It’s because they sell products that people can’t live without.

It would therefore be logical to assume that these defensive sectors would outperform the others in today’s volatile environment. But you would come to the wrong conclusion.

In fact, the S&P/ASX 200 Utilities Index (ASX:XUJ) was one of the worst performing sectors over the past month, posting a loss of 9.77%.

To complicate matters further, the S&P/ASX 200 Core Consumer Index (ASX:XSJ) also performed poorly, down 8.38% over the same period.

So, have blue chip defensive stocks started to fade? Let’s investigate by covering the highlights of these companies.

Woolworths Group Ltd (ASX: WOW)

Woolworths shares are down 10.23% over the past month. My colleague Fool Cathryn noted that the iconic Australian supermarket chain was challenged by supply chain and operational disruptions in FY22, which came amid a decline in its earnings before interest and tax (EBIT) reported for that year.

However, according to analysts at Goldman Sachs, Woollies could be turning things around. The investment bank just gave Woollies a Buy rating and raised its price target to $44.10.

Analysts said in a brokerage note yesterday:

Despite the weaker revenue environment, we believe WOW’s COVID cost reduction, Cartology’s strong growth as well as careful execution will result in an increased EBIT margin.

Coles Group Ltd (ASX: COL)

Coles shares have underperformed the Woollies over the past month, falling 13.68% at the time of writing. The supermarket received mixed coverage from analysts during this period, earning both an upgrade and a downgrade in its share price.

On September 6, a Citi broker said Coles would benefit from food inflation as prices rise. The bank has a price target of $20.10 for shares of the supermarket, which is expected to reach that level over the next 12 months.

The broker said:

Food inflation will significantly benefit supermarkets while operating costs are expected to remain below overall inflation, which will benefit margins.

Tough news arrived Sept. 14 in the form of a brokerage rating from Goldman Sachs, lowering its rating on Coles shares to a sell and reducing its price target to $15.60.

Goldman explained its position with the following:

Downgrade COL from neutral to sell with a new TP of A$15.60/sh, implying a 9.5% share price decline due to a delay in digital transformation, resulting in losses market share and entering a high investment cycle for digital and supply chain, putting pressure on margins in fiscal year 23/24.

Origin Energy Ltd (ASX: ORG)

Moving on to utilities, Origin’s stock price is currently down 3.48% over the past month. There was a lot of bad news for the energy producer, including analysis that it could be a “zombie company” with an interest coverage ratio of less than one and high debt.

Origin has also come under pressure to reduce its emissions. HESTA, a $68 billion Australian pension fund, has placed Origin and others on watch, saying that if they fail to address climate risks, they could be eliminated from the fund’s portfolio.

But the challenges for Origin began before the start of last month, with the company announcing a loss of $1.4 billion for fiscal year 22 on August 18.

]]>
MedLife leads blue chip winners on Bucharest Stock Exchange, most stock indexes end in green https://jamiron.net/medlife-leads-blue-chip-winners-on-bucharest-stock-exchange-most-stock-indexes-end-in-green/ Tue, 13 Sep 2022 15:35:00 +0000 https://jamiron.net/medlife-leads-blue-chip-winners-on-bucharest-stock-exchange-most-stock-indexes-end-in-green/ BUCHAREST (Romania), September 13 (SeeNews) – Romanian private health service provider MedLife [BSE:M]led the winners among blue chips at the Bucharest Stock Exchange (BVB) on Tuesday, according to data from the exchange. The total turnover of BVB shares amounted to some 81.9 million lei ($16.9 million/16.6 million euros) on Tuesday, compared to 41 million lei […]]]>

BUCHAREST (Romania), September 13 (SeeNews) – Romanian private health service provider MedLife [BSE:M]led the winners among blue chips at the Bucharest Stock Exchange (BVB) on Tuesday, according to data from the exchange.

The total turnover of BVB shares amounted to some 81.9 million lei ($16.9 million/16.6 million euros) on Tuesday, compared to 41 million lei on Monday, the site said. BVB website. Turnover was boosted by a 22.9 million lei deal with 17.5 million shares of investment firm Evergent Investments.

MedLife led the blue-chip gainers on Tuesday as its share price rose 3.15% to 19.64 lei.

Banca Transilvania prime lender [BSE:TLV] share price rose 1.97% to 19.68 lei in the highest trading turnover during the session, of 21.3 million lei.

First-class lender BRD Societe Generale Group [BSE:BRD] traded up 1.09% to 13 lei in the day’s second turnover of 11.81 million lei.

Premier oil and gas group OMV Petrom [BSE:SNP] share price rose 0.22% to 0.4570 lei in the third day’s sales of 11.09 million lei.

The details follow:

BET 11,924.88 0.37%
BET-TR 23,188.45 0.43%
BET-BK 2,216.40 0.09%
BET-FI 50,052.78 -0.47%
BET-NG 901.61 -0.03%
BET-XT 1,046.77 0.28%
BET-XT-TR 2,022.56 0.34%
BETAeRO 909.33 0.06%
ROTX 27,007.36 0.45%

BET is the first index developed by BVB and represents the benchmark index for the local capital market. BET reflects the performance of the most traded companies on the BVB regulated market, excluding financial investment companies (FIS). It now includes 20 companies.

BET-TR is the first total return index launched by BVB. It is based on the structure of the BET market benchmark. BET-TR tracks changes in the price of the stocks that make it up and is adjusted to also reflect dividends paid by constituent companies.

BET-FI is the first sector index launched by BVB and reflects the evolution of the prices of FIS and other similar entities.

BET-BK was designed to be used as a benchmark by asset managers and other institutional investors.

BET-NG is a sector index that reflects the evolution of all companies listed on the BVB regulated market included in the energy and related utilities sector. The maximum index weighting a company can hold is 30%.

BET-XT tracks the price changes of the 25 most quoted companies on the BVB regulated market, including FIS.

BET-XT-TR is the total return version of the BET-XT index, which includes the top 25 Romanian companies listed on the BVB.

ROTX is an index developed by BVB in collaboration with the Vienna Stock Exchange. It tracks, in real time, the price changes of top-notch shares traded on the Bucharest Stock Exchange.

BET AeRO is the first index for the AeRO market developed by BVB that reflects the price development of representative companies listed on the AeRO market that meet the criteria of liquidity and free-float market capitalization. It is a free-float, market capitalization-weighted index with a maximum weighting of 15% for an index constituent.

(1 euro = 4.9216 lei)

BRD – Groupe Societe Generale SA is one of the biggest banks in SEE, for more reference see Top 100 banks

]]>
Tinubu got rich buying shares of blue chip companies — Dele Alake https://jamiron.net/tinubu-got-rich-buying-shares-of-blue-chip-companies-dele-alake/ Mon, 12 Sep 2022 06:49:45 +0000 https://jamiron.net/tinubu-got-rich-buying-shares-of-blue-chip-companies-dele-alake/ Alake pointed out that he knew Tinubu was spending money and was rich even before he entered politics. By Jeffrey Agbo Director of Strategic Communication of the Congress of All Progressives (APC) Presidential Campaign Council Dele Alake says the party’s presidential candidate, Bola Tinubu, made his money buying the shares of blue chip companies. Tinubu’s […]]]>

Alake pointed out that he knew Tinubu was spending money and was rich even before he entered politics.

By Jeffrey Agbo

Director of Strategic Communication of the Congress of All Progressives (APC) Presidential Campaign Council Dele Alake says the party’s presidential candidate, Bola Tinubu, made his money buying the shares of blue chip companies.

Tinubu’s wealth has been individually questioned, with many alleging he was into illicit drugs. But Tinubu denied the allegations.

– Advertising –

It was also rumored that former Lagos State Governor Akinwunmi Ambode was denied the APC ticket for a second term in 2018 because he refused to give Tinubu 50 billion naira per month. Tinubu also denied the rumor.

During an interview on Channels Television’s Sunday Politics, Alake said: “He (Tinubu) bought stocks and bonds and all that. I am not a financier. So I’m not going to get into all of that. But I know he trades stocks.

READ ALSO:

Tinubu’s footman Alake comes under fire from Obi-Datti’s press office

“I know when you trade stocks and you’re a financier, you know how to juggle the stock market and all that. Those in the know know what I’m talking about. They wouldn’t begin to wonder how he made money with stocks.

– Advertising –

“He was buying blue chip company stocks and stuff. He made money and he spent money. He did all these years before taking office.

Alake pointed out that he knew Tinubu was spending money and was rich even before he entered politics.

Alake declined to disclose whether Tinubu owns or has investments in any business in Nigeria.

“It’s a foreign matter and as I always say to pander to the whims and whims of those who are jealous and extremely envious and suffer from Asiwaju’s OCH (Obsessive Compulsive Hate),” he said. -he declares.

]]>
I buy those blue chip stocks that yield 6%+ https://jamiron.net/i-buy-those-blue-chip-stocks-that-yield-6/ Sat, 10 Sep 2022 13:00:00 +0000 https://jamiron.net/i-buy-those-blue-chip-stocks-that-yield-6/ z1b Everyone has their own definition of a blue chip security. Some investors classify companies as blue chips simply based on their size. Others only look at their background. And some only consider the risk of the underlying business. My definition of a best-in-class stock is one that exhibits some of the following characteristics: The […]]]>

z1b

Everyone has their own definition of a blue chip security.

Some investors classify companies as blue chips simply based on their size. Others only look at their background. And some only consider the risk of the underlying business.

My definition of a best-in-class stock is one that exhibits some of the following characteristics:

  • The company is large and well established.
  • He has a solid track record.
  • Its activity is defensive.
  • He has a healthy track record.
  • It pays a constantly increasing dividend.
  • And it enjoys good growth prospects.

Simply put, a blue chip is a high quality business that has performed well in the past and should continue to deliver strong results over the long term.

Good examples would include companies like Walmart (WMT) or Procter & Gamble (PG).

Typically, these companies trade at high valuations and low yields because they are in high demand among investors.

But following the recent market decline, a few blue chip dividend stocks have become exceptionally cheap and are now offering yields above 6% in some cases. Such opportunities are particularly plentiful in the real estate sector as it is currently out of favor.

At High Yield Landlord we specialize in listed real estate investments, and we have rarely seen so many blue chips trading at such high valuations and in the following we highlight two opportunities that we are accumulating:

Residential real estate is generally considered a defensive investment because everyone needs a roof over their head whether the economy is doing well or not. It’s also something you can’t easily replace with technology, and a well-located property has always gained in value over the long term.

For this reason, residential properties typically sell at low cap rates, and the Real Estate Investment Trusts (“REITs”) that own them also at low yield prices.

Some popular names in the US include Mid-America (MAA), Equity Residential (EQR), and Independence Realty (IRT). They all have a yield of around 2-3%.

Central American Apartment Community

central America

But one of these companies is currently earning 6.5%, and against all odds, it’s actually one of the largest and most respected companies in this space:

Vonovia.

Vonovia is Europe’s largest landlord, with a portfolio of around €100 billion of properties, mostly located in Germany.

The company has all the characteristics of a blue chip:

  • He is tall.
  • He has a solid track record.
  • Its activity is defensive.
  • He has a healthy track record.
  • It pays a constantly increasing dividend.
  • And it enjoys good growth prospects.

But despite this, the company’s share price has crashed over the past year, dropping 50%, and as a result, its price is now at an exceptionally low valuation.

Chart
VONOI given by Y-Charts

Historically, Vonovia has been valued at a small premium to NAV and a low yield of 2-3% most of the time.

But currently, its price is discounted by 55% from the value of its assets and it pays a dividend yield of 6.5% – which is the lowest valuation in the company’s history.

The market priced it at such an exceptionally low valuation on fears that rising interest rates and the energy crisis in Germany could significantly hurt its business.

But we just don’t see it.

Sure, these are important short-term issues, but their long-term implications aren’t really important.

Vonovia has a strong BBB+ rated balance sheet with an LTV of 43% and well-laddered debt maturities. Only about 10% of its debt matures each year, and Vonovia has enough liquidity through its retained earnings (73% payout ratio) and its recurring asset sales program to repay debt maturing. deadline. Furthermore, interest rates only increase due to high inflation, which also increases Vonovia’s rental income and the value of its assets. In the first half of the year, the company’s funds from operations (“FFO”) per share rose another 5.5% and reached new all-time highs.

The energy crisis may seem even scarier, especially for US-based investors who lack grounding. But having lived in Germany for years, I’m not so worried.

What most investors seem to ignore is that tenants are responsible for paying energy bills. The direct impact on Vonovia is therefore not that significant. Sure, that may limit its ability to push for short-term rent increases since tenants can’t afford much, but it won’t suddenly kill Vonovia’s profitability as its stock price suggests. Vonovia’s properties are also more energy efficient than average, and its rents are affordable and below market, which should provide an extra margin of safety.

Finally, rent arrears were very low even at the worst of the pandemic. Germans are more conservative with their finances, have better savings, less credit, and are less likely to skip rent payments than in the United States. It’s also a cultural thing.

So this is at most a temporary crisis that will harm Vonovia’s growth in the short term, but eventually things will work out and its long-term prospects will not be affected.

Now you have the opportunity of a lifetime to buy Europe’s largest and bluest owner at a hugely reduced valuation. We buy it hand in hand at High Yield Landlord.

Another Blue-Chip: STORE Capital Corporation (STOR)

Historically, Berkshire Hathaway’s (BRK.A, BRK.B) largest REIT investment has been a REIT called STORE Capital. Apparently, Warren Buffett himself made the investment years ago.

In case you are unfamiliar with STOR, it is one of the leading net rental REITs. It primarily owns service-oriented single-tenant properties, such as KFC (YUM) fast food restaurants, car washes, pharmacies, and other recession-proof and e-commerce properties:

KFC |  Net Lease Advisor

Net Lease Advisor

STOR generates stable rental income from leases over 15 years with no landlord liability and the company’s cash flow increases thanks to contractual rent increases and new real estate acquisitions, which are being made with significant spreads on its cost of capital. It is generally considered a blue-chip as it has a strong BBB-rated balance sheet and one of the best track records and reputations in its industry.

But recently, Berkshire decided to exit its stake in STORE, which caused its share price to underperform. Many investors took this as a red flag, thinking that if Berkshire exits, then maybe they should exit as well.

Chart
STOR given by Y-Charts

But the reality is that STORE was a rather small holding for Berkshire and it seems they invested mostly through the company’s former CEO, Chris Volk. When he left, they decided to sell too. It’s that simple.

So we don’t see it as a red flag.

On the contrary, we see it as an opportunity to buy more shares at a historically low valuation. Basically, STORE is doing better than average with record cash generation and dividend payouts.

It is expected to increase its AFFO per share by around 10% in 2022, which is well above its historical average, and yet its current FFO multiple is well below its historical average at just 12x.

Its dividend yield is now also 6%, which is well above its historical average. The dividend is expected to grow by over 5% per year and is guaranteed with a low payout ratio of 74%.

We expect investors to earn a 12-15% annual return through yield and growth alone. And as investors outpace Berkshire’s recent decision to exit its position, we also expect STORE to revalue closer to 18x FFO, unlocking 50% upside for patient shareholders. 12x FFO is just too cheap for a blue-chip that is doing so well.

Conclusion

Vonovia and STORE Capital are two examples of blue chips in the listed real estate sector that are currently undervalued.

They’re doing better than ever, but their market sentiment took a hit in 2022. The last time these companies were this cheap was in early 2020 and we doubled our money the following year.

The best time to buy is when everyone seems to be selling. Today is no different.

]]>