We'd all like to invest like the legendary Warren Buffett, turning thousands into millions or more. Buffett analyzes companies by calculating return on invested capital, or ROIC, to help determine whether a company has an economic moat -- the ability to earn returns on its money above that money's cost.
In this series, we examine several companies in a single industry to determine their ROIC. Let's look at Procter & Gamble (NYSE: PG ) and three of its industry peers, to see how efficiently they use cash.
Of course, it's not the only metric in value investing, but ROIC may be the most important one. By determining a company's ROIC, you can see how well it's using the cash you entrust to it and whether it's actually creating value for you. Simply put, it divides a company's operating profit by how much investment it took to get that profit. The formula is:
Best Warren Buffett Stocks To Own Right Now: Intevac Inc.(IVAC)
Intevac, Inc. provides process manufacturing equipment solutions to the hard disk drive industry, and process manufacturing equipment and inspection solutions to the photovoltaic industry. The company operates in two segments, Equipment and Intevac Photonics. The Equipment segment designs, develops, and markets magnetic disks; hard disk drive equipment products, including disk sputtering and disk lubrication systems; technology upgrades; and spare parts and consumables, as well as installation, maintenance, and repair services. This segment also offers capital equipment for the photovoltaic solar manufacturing industry. The Intevac Photonics segment develops, manufactures, and sells digital-optical products for the capture and display of low-light images and materials identification used in military aircraft, ground vehicles, ground soldier head-mounted, and weapon-mounted applications. This segment also provides sensors, cameras, and systems for military applications; Ram an spectrometer table-top and handheld systems for use in forensics, homeland security, geology, gemology, medical, pharmaceutical, and industrial quality assurance applications; and low-light cameras for industrial inspection, bio-medical, and scientific applications. The company sells its products through direct sales force, system integrators, distributors, and value added resellers in the United States, Asia, Europe, and rest of world. Intevac, Inc. was founded in 1990 and is headquartered in Santa Clara, California.
Best Warren Buffett Stocks To Own Right Now: Snowfield Dev Corp (SNO.V)
Snowfield Development Corp. engages in the acquisition, exploration, and development of mineral properties in Canada. It explores for diamond, copper, silver, gold, zinc, molybdenum, tellurium, and iron minerals. The company holds interests in the Nahmint property covering approximately 8,000 hectares; and Snow property consisting of 4 mineral claim tenures, and 41 mineral claim cells totaling 8,406 hectares situated in Vancouver Island, British Columbia. It also has an interest in the Ticho property comprising an area of 16,188 hectares located in Yellowknife, Northwest Territories. The company was incorporated in 1987 and is headquartered in Vancouver, Canada.
Top 5 Casino Stocks To Own Right Now: Phillips-Van Heusen Corporation(PVH)
PVH Corp. designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. The company?s Calvin Klein Licensing segment licenses Calvin Klein Collection, ck Calvin Klein, and Calvin Klein brands for sportswear, jeanswear, underwear, fragrances, eyewear, men?s tailored clothing, women?s suits and dresses, hosiery, socks, footwear, swimwear, jewelry, watches, outerwear, handbags, leather goods, home furnishings, and accessories; and to operate retail stores. Its Wholesale Dress Furnishings segment markets dress shirts and neckwear principally under the ARROW, Calvin Klein, ck Calvin Klein, Calvin Klein Collection, IZOD, Eagle, Sean John, Donald J. Trump Signature Collection, Kenneth Cole New York, Kenneth Cole Reaction, JOE Joseph Abboud, DKNY, Tommy Hilfiger, Elie Tahari, J. Garcia, and MICHAEL Michael Kors brands. The company?s Wholesale Sportswear and Related Products segment offers sportswear, including men?s knit and w oven sport shirts, sweaters, bottoms, swimwear, boxers, and outerwear principally under the IZOD, Van Heusen, ARROW, Geoffrey Beene, Timberland, and Calvin Klein brands; and women?s sportswear, including knit and woven sport shirts, sweaters, bottoms, and outerwear under the IZOD brand. Its Retail Apparel and Related Products segment provides men?s dress shirts; neckwear and underwear; men?s and women?s suit separates; men?s and women?s sportswear, including woven and knit shirts, sweaters, bottoms, and outerwear; men?s and women?s accessories; sportswear; and men?s fragrance. The company?s Retail Footwear and Related Products segment offers casual and dress shoes for men, women, and children; and apparel and accessories. The company was formerly known as Phillips-Van Heusen Corporation and changed its name to PVH Corp. in June, 2011. The company was founded in 1881 and is headquartered in New York, New York.
Advisors' Opinion:- [By Stockpickr]
PVH Corp (PVH), which is set to release results on Tuesday after the market close. This company designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. Wall Street analysts, on average, expect PVH to report revenues of $1.28 billion on earnings of 95 cents per share.
This company is on deck to potentially beat Wall Street estimates for the fifth consecutive quarter. If they do continue with that trend and also raise their guidance, then this stock could potentially make a large move post-earnings to the upside.
Barclays recently issued a note where they maintained their overweight rating and price target of $80 a share on this stock. A Barclays analyst said they expect revenue of $1.28 billion, representing top-line growth of 16.4% over the same period last year. They see a strong revenue increase of 25.8% and 10.1% for the Tommy Hilfiger and Calvin Klein brands.
The current short interest as a percentage of the float for PVH sits at around 4.2%. That means that out of the 60.20 million shares in the tradable float, 2.58 million are sold short by the bears. This isn't a huge short interest, but it's enough to spark a sharp rally if PVH can report a strong quarter and guide higher.
From a technical standpoint, this stock is trading below its 50-day moving average but above its 200-day moving average, which is neutral trendwise. The stock recently fell from a July high of $75.86 a share to a recent low of $51.15 a share. Since that low, the stock has rebounded sharply back up towards $64 a share.
I would only be a buyer of this stock after they report if it trades above its 50-day moving average of $66.09 on strong volume. Look for volume the following day that's on track to be near or greater than its three-month average action of 1.2 million shares. I would target a run back towards $73 or possible the 52-week high of $75.86 a share if the bulls win the battle post-earnings.
I would only short this stock ! if it drops below $60 a share after they report their results on strong volume. I would add to any short position if it then drops below $56 a share, and I would target a drop back towards that big previous support zone at $51 a share. One way to confirm that this stock is going to drop post-earnings is if it fails to clear the 50-day and then drops on big volume through its 200-day moving average of $64.34 a share.
Best Warren Buffett Stocks To Own Right Now: Natus Medical Incorporated(BABY)
Natus Medical Incorporated provides neurodiagnostic and newborn care products worldwide. The company offers healthcare products used for the screening, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders. Its product offerings include neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology; newborn care products, such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and incubators to control the newborn?s environment; and software systems for managing and tracking disorders and diseases. The company provides newborn hearing screening product lines consisting of the ALGO, ABaer, AuDX, and Echo-Screen newborn hearing screeners; and hearing screening supply products that are used with newborn hea ring screening devices. It also offers diagnostic hearing assessment product lines, which include the Navigator Pro system, the Scout sport portable diagnostic device, and the AuDX PRO; and diagnostic hearing supply products. In addition, the company provides monitoring systems, balance and mobility products, newborn brain injury diagnostic products, thermoregulation products, and jaundice management products. Further, it offers photometers, radiometers, patient warming lamps, neonatal heatshields, pediatric scales, blanket warming cabinets, exam lights, oxygen hoods, restraining boards, and newborn circumstraints; neonatal noise attenuators, phototherapy eye masks, and x-ray shields for reproductive organs; and newborn screening data management products. The company serves hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Natus Medical Incorporated was founded in 1987 and is headquartered in San Carlos, California.
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