As I stated last week, I have taken the view of James Montier that a low price/sales ratio is an unreliable indicator of cheap stocks, since it ignores profit margins and capital structure. I have similarly adopted his view that an astronomically high price/sales ratio is a reliable indicator of overpriced stocks, because at a […]
Montier, in his Value Investing, made a spirited defense of value investing by demonstrating, not only that it works in a normal market, but also, based on the history of Japan, that it works effectively in a lost decade scenario. I find this significant because it strikes me that the United States faces a significant […]
Now that the BP well has been finally containmed, it is only natural that market participants have come to expect a great deal of the shrinkage in valuation of Gulf oil producers to reverse itself to some degree. Certainly there will be new regulations, and perhaps more onerous inspection standards, but on the whole it […]
I am recommending stock in Entercom Communications Corp (ETM), on the grounds that they are considerably undervalued. Of course, I wish I had issued this recommendation last week when they closed at $5.29 per share, but even now that they are at $7.30 per share, the company is still compellingly undervalued. Entercom claims to be […]
As I seem to be in a mood to find junk bonds lately, I am pleased to present you with the bonds of the Mohegan Tribal Gaming Authority. The Mohegan Tribe operates a massive casino in Connecticut, one of only two casinos in New England, as well as several other ventures. The company has been […]
I find that the stocks I like seem to come in pairs. I liked oil and gas producers Linn Energy and Breitburn; I liked phone companies Windstream and Qwest, and now in the contract manufacturing sectors, I liked Keytronic and now I like Amkor Technology (AMKR). Amkor produces semiconductor packaging for other manufacturers, and also […]
I have a certain weakness in my heart for junk bonds. Junk bonds, of course, are bonds with a sub-investment grade credit rating, and they can range from just barely on the cusp of investment grade to the point where the purchaser would have to be crazy to consider them. As Ben Graham wrote, an […]
The below post was a foray into the world of macroeconomics, a matter which I have no formal and little informal education in but I nonetheless feel perfectly qualified to give my opinion, just like everyone else. Now I would like to talk about issues in valuing United Online, a matter with which I have […]
I should make it clear at the outset of this article that I’m not an economist. But, like many people who begin their speeches with those words, I won’t let it affect what I have to say. I have made it clear in the past that I take a sanguine view of the possibility of […]
Benjamin Graham gave two useful pieces of advice that are applicable during earnings season. First, don’t pay too much attention to the results of a single quarter. Second, when paying too much attention to the results of a single quarter, make sure that you strip out the nonrecurring events in order to get a better […]