$NKE Nike, Inc is finally back to CHEAP-ENOUGH levelsMany years ago I had drawn this 1.7-1.3 level in the PSR (or Price-to-Sales Ratio) for NYSE:NKE and the recent smack down for NYSE:NKE stock has put it within reach of the 1.7-1.3 X Sales zone.
The RETURN for shareholders has been negative for the last 7 years in NYSE:NKE when adjusted for inflation. The stock is basically unchanged back to 2018 here (not factoring dividends).
What is the point of this?
When a stock gets sold down on bad news, there is an underlying level of value which will support it from that point forward. There are always portfolio managers looking to invest in stocks that have had solid long term fundamentals with rising sales and earnings and a nearly recession-proof business model.
The opposite is also true that there are NO BUYERS for a stock once it gets ridiculously overpriced and no one can justify buying shares are high prices. The only hope you have at that point is for momentum to attract new buyers who aren't paying attention to valuation and because of tax laws that encourage people to hold on for long term capital gains tax rates to kick in for holding periods greater than 1 year.
Thanks to TradingView for providing all of this high quality fundamental information AND for the ability to graph this data so we can visualize and see where the value is in the marketplace.
The value is down here in NYSE:NKE shares so it is a good time to start buying.
Cheers,
Tim
3:47PM July 1, 2024 76.67 last +1.30 +1.72%
Valuation
Wave of the day: Visa
5 good reasons for NYSE:V stock
1. Bounce from the value zone
2. Rising MACD histogram
3. Buying Volume coming in
4. Pocket Pivot on the last day
5. Analysts have set a mean price target forecast of 160.17. This target is 20.33% above the current price.
What's your take on Visa?Comment below
Legal Disclaimer: The information presented in this analysis is solely for informational and educational purposes only and does not serve as financial advice.
Soft landing calls for tough choices2023 has been a tough year for stock pickers. The gap between equity factor styles has been vast over H1. Growth, riskier in nature, posted the best performance up 24% year-to-date (YTD) followed closely behind by quality up 20% YTD1. The excitement around artificial intelligence (AI) reached a fever pitch in H1 2023, supporting growth-oriented technology stocks.
As we enter H2 2023, we remain constructive on select areas of global equity markets. The resilience of the US economy has defied all odds. The strength of the US consumer (accounting for 70% of GDP), alongside the fiscal impulse, has been the cornerstone of the US’ extraordinary resilience. While inflation has shown encouraging signs of decline in the US, strong economic momentum alongside a rebound in commodities raises the risk of a re-acceleration of inflation. In turn, rates could remain higher for longer, resulting in Federal Reserve (Fed) rate cuts being delayed until Q1 2024. In such an environment, an enhanced equity income approach could fit well. Even if the earnings outlook weakens in China, proactive policy support via rate cuts could support its stock multiples.
In Europe, where we are likely to witness a mild recession, we believe adopting a more cautious and defensive approach is warranted. Earnings revision ratios remain the strongest in Japan while they are the weakest in emerging markets.
US equities are the belle of the ball
It was the narrowest market in history, with just 25% of stocks outperforming the S&P 500. Expectations of cooling inflation aiding the Fed to end its current tightening cycle supported the performance of higher-duration growth stocks. For investors calling for a soft landing, rates are likely to remain at current levels or higher for a longer duration of time. A tight US labour market, with unemployment at historic lows and rising wages, is likely to slow the downward pricing momentum in the service sector. As the market regime transitions, it should provide a ripe opportunity for market breadth2 to improve. Markets may begin to favour value and dividend-paying stocks. History has shown us that breadth tends to improve as the economy recovers from a downturn.
Peak pessimism towards China
China’s reopening rebound has faded. The transition to a less debt-fuelled, less property-reliant and more consumer-driven economy is an important adjustment. We expect government stimulus policies to be aimed at enhancing the efficiency of the private sector. Further iterations of policy rate cuts by the People’s Bank of China (PBOC) are likely to follow; however, outright quantitative easing won’t be on the cards, as it is likely to further weaken the yuan, which the PBOC would like to avoid. With a low correlation to US equities (at 20x P/E)3 coupled with a high valuation discount, pockets of China continue to provide good investment prospects.
Pockets of opportunity in non-state-owned enterprises
Non-state-owned enterprises, particularly within the Technology, Communication Services and Health Care sectors, faced the brunt of China’s regulatory crackdown. These regulatory interventions stifled growth in key sectors such as e-commerce, mobile payment, ride-hailing, and online education. It also resulted in the suspension of initial public offerings (IPOs) and delisting of Chinese internet companies. Growing political frictions in supply chains are incentivising China to regain independence in the semiconductor and hardware space. Chinese technology companies are trading at a significant discount compared to US peers, offering plenty of room to catch up.
Prefer defensives over cyclicals as Europe runs out of steam
Nearly six months back, investors marvelled at how the euro-area economy had emerged from the energy crisis. That momentum appears to be fading as China’s recovery slows down, consumer confidence declines, and the impact of tighter monetary policy gains a stronghold on the economy. Higher inflation over the past year is holding back demand from households, which is hurting growth.
The monetary tightening over the past year not only triggered an increase in real rates, it also impacted borrowers’ credit metrics. Owing to this, eurozone banks have tightened their lending standards.4 Banks remain the primary source of corporate funding in Europe. The credit impulse—that is, the annual change in the growth of credit relative to GDP—in the euro area reached its lowest point since 2010.
TINA is alive in Japan
There is no alternative (TINA) to equities is still alive in Japan. This is evident from higher equity risk premiums of 2.97% for Japan compared to 0.41% in the US.5 While the rest of the world has been busy trying to quell the inflation fires, Japan has emerged from the COVID-19 lockdowns with a faster pace of growth and higher inflation. A combination of higher equity risk premiums, a weaker yen supportive of the Japanese export market, corporate reforms, and attractive valuations have been important catalysts for equities.
Policy shift still remains loose
The Bank of Japan (BOJ) took a significant step towards normalisation in July by announcing a further adjustment to its yield curve control (YCC) regime. The BOJ formally changing its course constitutes an acknowledgement that inflation is returning to the Japanese economy. Yet the BOJ lowered its (median) inflation forecast for fiscal year (FY) 2024 to +1.9% and left its FY 2025 projection unchanged at +1.6%, in effect justifying ongoing easing by the BOJ. With Japan’s nominal growth rising over the coming years, the revised policy by the BOJ still remains loose, supporting the case for Japanese equities. Historically, a weaker yen has benefitted the performance of Japanese exporters as it enhances their competitive advantage. Adopting a tilt towards dividend-paying Japanese equities is likely to reap the benefits of not only a weaker yen but also corporate governance reforms.
Conclusion
As we progress into year-end, the outlook remains more nuanced. In the US, we favour value and dividend stocks as equity market breadth improves. While China’s problems in the housing sector are likely to remain a drag on domestic demand, we do see pockets of opportunity in undervalued sectors – technology and healthcare. Given the strong manufacturing headwinds facing Europe, we expect weak growth in the eurozone for the remainder of 2023, potentially favouring a tilt towards defensive stocks.
Sources
1 Bloomberg as of 11 October 2023.
2 Breadth is measured by comparing the equal weighted performance versus the market cap-weighted performance of the US stocks listed on the S&P 500 Index.
3 P/E = price to earnings ratio.
4 Euro area Bank Lending Survey (BLS), April 2023.
5 Bloomberg, WisdomTree, as of 29 September 2023. Equity risk premium is the difference between the earnings yield and the respective 10-Year Government Bond Yield.
This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
SkyWest (SKYW), Valuation Chart for InvestingLooking at the average analyst target and Anchor for NASDAQ:SKYW I see some potential downside in the near future that could present some buying opportunities. The company has been one of the only Airlines that I am willing to invest in at the moment.
Overall, SkyWest has had a mixed earnings growth trend over the past 4 quarters. The company has reported both positive and negative earnings growth during this time period. The company's earnings growth trend is likely to be affected by a number of factors, including the overall economic environment, the performance of the airline industry, and the company's own operational performance.
This also should provide great opportunities to buy in... Fundamentals are looking good.
Valuation Chart for AMD, Average Analyst Targets and ForecastsFor those that believe that some how AMD will magically stay at these levels, please keep in mind, the average analyst target is $103.43. On top of that, I believe the company is Anchored at lower prices based on projected earnings growth and cost of equity. This stock will revisit lower levels once again.
Inflection PointBKI caught my attention for a few reasons.
1. Held by Scion Asset Mngt- if you haven't heard of them or Michael Burry, check it out. Crazy returns off the financial Crisis.
2. SP sitting at an inflection point at bottom of long term demand zone and near lowest long term demand zone.
3. BKI's shiller PE ratio range over the past 10 years is from 36.26-43.09 and currently sitting at 37.37 implying that it is near its lowest valuation in 10 years.
4. Mornings Star Fair Value market valuation sitting at $61.1. My own target of $77.5 is based on a Fibonacci retrace of 61.8% of 2020 highs.
Applying Warren Buffett and Peter Lynch valuations : SNAP stockWhen I was new, I traded just the picture of prices.
Later after living through a full cycles, I learned stocks were actually businesses.
Business sell stuff to customers and generate revenue each year.
Businesses have cash flows and earnings.
Thats why when we look book 10 to 20 years, most businesses are more valuable today then back then.
Valuation looks at what things are worth today and also looks at future potential.
Financial math is discounting the the future growth to make sure you get the best deal you can.
Valuation keeps you grounded.
You can still day trade, swing trade, and option trade all you want. Valuation just helps you know the true value inside the business so you avoid some losers and pick more winners.
Cheers and good luck on your journey!
#snap #warrenbuffett #peterlynch
Momentum vs Business Valuation"The momentum guys take it up to the moon,
the value guys pick it up off the floor.
Just watch out for the space between the two."
-Confucius the trader
have been reading up on the Turtle Traders and their momentum strategy. They would have bought anything as long as it meets their break out rules. Fascinating statistical strategy based on both 20 period price action and 55 day price action. Im sure they love the action in NVDA right now.
However, in the valuation books. The oldies but goodies books (Intelligent Investor by Benjamin Graham, Beating the Street by Peter Lynch) they would be less enthusiastic about the current valuation. Most useful would be Peter Lynchs PEG ratio, where growth rate is used to allow paying a higher price than normal for growth stocks.
The roughly 30% growth rate annual expectation in this case would mean if NVDA falls below 30pe, it would be attractive. Its almost twice that now. Thats not necessarily a reason to sell a quality stock. it just means that investors have already market up the stock and are buying it ahead of the future growth being expected. In this case, 2026s future growth.
Traders gonna trade. They dont care about the future value of a stock. they care about Profit this week or this month and then on to the next one.
however the investors do care. They are looking for getting a deal on something that can swell up with earnings and juicy future value dividends. Investors want a discounted price today, and 20 years of accumulated earnings so they can milk the future dividend payouts.
Any who, just watch out and be aware. Its a fast horse, its also a popular one.
Robert Kiyosaki & Peter Schiff right -Hard times make strong menXLF financials, Stocks to GDP and stocks to gold, all tell the story.
Our debt based system is bottlenecked. More money is 'needed'.
Valuation is the light when the stock market is full of darknessthe market only goes 2 ways, up and down, and yet it can still be difficult to see through the noise.
I used to just look at charts, and trade off of the pictures. boy was I a fool.
turns out stocks are businesses. if you knew that, you should have told me sooner :D
valuation changed my life.
on dark days like today, the market is falling and its feels scary and red and bad and scary and omg.
but it has to be this way.
this is how you get the 10 baggers or the 100 baggers the grow over the next decades.
yeah the market can go down 50%.
guess what, the storm will pass.
and then business and life will go on.
and companies will grow a little bit every month and every quarter.
whats 20% compounding for 10 years? do you even math bro?
its hard.
learn.
you can do it.
kthanxbye
Grab stock future value in 2031 using crayons and binocularsStocks are businesses. most of them anyways. some are expensive hobbies until the money runs out.
Its a good exercise to value opportunities as you see them. useful to weigh it and make notes in your files.
Maybe not now, but later, your pitch with be thrown, and you might be ready to swing at it.
Don't trust stock charts aloneValuation change my life. I was blind and now I see. not kidding.
I love technical analysis. I love it more when combined with valuation.
Stocks are actual businesses. Charts only track transactions. its like receipts in the trash outside the store :D
Warren Buffett used to collect bottle caps as a kid. Then would sort them to find out what drinks were most popular. He sold Coca Colas from his grandfathers grocery store based on this info and also later in life became a Coke Stock investor.
so what?
Maybe not you, but definitely me, Ive made the mistake of JUST LOOKING AT CHARTS and forgetting whats behind the charts. Actual businesses, people, and world governments acting out their motivations, resulting in what we see in the charts.
There is so much more information, that when combined with charts, makes for better decisions.
Shout out to trading view. Trading view allows for make fundamental data easy to overlay onto charts. gamechanger!
Macro/fed, accounting fundamentals, charts/trends, social sentiment/behavior, options pricing, all of this and more is out there for investors to consider.
Any who.
The video is about the market multiple on earnings which results in prices. Thats what prices are. Prices are a derivative on business earnings. Earning x multiple = price.
When I was noob young monkey, I wish I knew all of these concepts. So here I am trying to share.
Hope you dig it.
Cheers!
TSLA: The ReversalAbout a month ago, everything had turned around for Tesla. The company was being mercilessly mocked as wave after wave of bad news came out & the selling pushed prices down further and further. However, it was not to last. Now, after that (apparently) temporary scare, we are all the way back near $200.
In 2021, I did not like Tesla very much. The reason was because the valuation was something like 300 P/E. Running some sort of standard cash flow analysis gave a value far lower than the stock price.
I was astonished to find that now, the value is closer to $150 a share. The valuation of the stock has improved dramatically as it has fallen. Of course, $200 is above $150, but it is much closer to being fairly valued than it once was. This means it may not be permanently doomed.
The thing is that a reversal this strong likely needs some sort of strong signal/pattern if it were to be pushed back down again - e.g. a false break above $200 to trap anyone who believes too much in Tesla. It is up about 90% from its lows and has created a substantial bullish formation as a result.
I am not sure it has enough momentum to go too far further at the moment. It has shown a lot of strength & may become more bullish due to the better valuation, so it could be worth it to buy any sort of decline that is coming up.
I would also caution against calling one side against the other at the moment. Tesla stock is highly volatile (obviously) and the market could either toss it out the window or enshrine it in the throne of the new paradigm. You should make sure not to be too emotional if you dare to buy (or short) this stock.
Chat GPT Ai stocks list for 2023Is chat gpt and Artificial Intelligence the next boom theme?
Why are so many people talking about it recently?
How long can this new trend create opportunity for , years, decades?
How do we value the opportunity and avoid paying too much?
Dont get ripped off and caught up in the hype, use math and valuation to price the reward and risk in a balanced logical way.
The legends of investing have given us they formulas through lifetimes of trial and error. We just need to apply them.
Benjamin Graham, Peter Lynch, Warren Buffett, Phil Fisher, these guys used simple math to make fantastic decisions.
Concepts like Price to Earnings vs growth, and balance sheet valuation concepts.
Stick to the valuation math principles and make better logic decisions in these uncertain markets.
Cheers!
Overlaying stock valuation levels vs picture trading #gtbifI used stare at charts and colored bars and tried to find shapes to figure out the next move. Guess what, I missed out on a lot of easy opportunities to hold and ran scared out of good stocks because I didnt understand growth valuation.
Stocks will do things that dont make sense on the charts. Stocks are businesses.
We really need to understand the companies behind the charts. Its just lazy and a missed opportunity not to do so.
In this this video, I create some valuation assumptions and overlay them on the charts for insights.
Bear case valuations and bull case valuations.
Hope you enjoy it. Cheers.
SPX 17-18 PE above median average, and over 25 PE w/inflation what recession? what inflation? what rising discount rates?
"Stonks always go up". "What me worry?"
Just because stocks have come down in nominal price, it doesn't mean all these things are priced in.
Buying low means buying below historical median PE and having healthy growth prospects.
Buying low could also mean paying median PE with following years having healthy growth.
What we probably have now is the expectation that inflation raises revenue for nominal growth but not 'real' growth.
As in inflation adjusted, the growth my be less exciting.
COST - Who doesn't love costco?Costco is probably one of my favorite places to shop and I think the stock price over the last 14 years has proven that to be the case for a lot of people.
The main issue I have with buying this stock is valuation and growth of the company. I don't see how they will be able to grow fast enough to support a 35+ PE ratio.
Taking the fib from the 08 lows to the 2022 highs, we get targets around 395, 327, and 258 for the 38.2, 50.0, and 61.8 retracement levels. If you think about it, 258 from a valuation perspective only starts to make the stock a reasonable price at about a PE of 20 assuming 13.23 EPS.
It looks beautiful from a long term trend perspective and I think it has many more years to grow, but I wouldn't touch it unless it was 308 or less purely from a fundamental perspective. Might look to short this one this year.
This is not financial advice. Good Luck!
What should I pay for the sp500 if inflation continues?Where is fair value and where is cheap? Price and value are not the same. Price is snapshot of opinion while value is a moving story that changes over time.
PE price to earnings is how we gauge value, at least one of the main ways. I like to think of PE in terms of years. How many years of earnings am I paying in advance for this underlying business?. It helps me realize that there's a big picture story in every asset that will take time to play out.
Everything has fair value as well as premium and discount values. If we dont do the homework, we are just guessing and gambling. A dollar today is worth more than a dollar in one year. The current market interest rates is how we price the cost of time difference of money flows. Using interest rates to discount is how we calculate if an assets is expensive, fair, or discounted.
SPY SPX QQQ NDX DIA DJI VT VTI
The rule of 20 for valuation, 100 year looklets look at 150 years of stock prices and see how valuation with inflation played out, and apply the "rule of 20" as a guide. The rule of 20 is a benchmark regression that essential says when PEs and cpi inflation are added together they should be under 20 for stocks to be attractive historically. SPX DJI QQQ NASDAQ:NDX GOLD
Markets bottom between summer 2023 and Jan 2024Markets bottom between summer 2023 and Jan 2024
Everyone is bulled up right now after Powell's brookings speech but slowing the pace of rate hikes != pivot.
Also pivot != bull run. A pivot can just be the start of a relentless selloff.
Stonks go down.
Cisco Ponzied - Made in China - Huge Disaster - Small Cap SeasonThe gems are out there. *valuation matters
Beware Profits made overseas. *rising rates environment kilss Stonks & Crypto Ponzi Pogs.
#cannabisreform
#jobsandjustice
#thegem
Ethereum Blowoff*valuation matters. I love me some Ether. Love DigiDollar CBDC so much more. keep making #investingnfts. Don't sell them! lol. Silly kids. #trix
Stonks & Crypto Ponzi Pogs collapse.
ICICI securities breakoutNSE:ISEC breaking out from downtrend channel . Important levels are marked in the chart . The technicals are super bullish . Also the stock is pretty undervalued , compared to other zero discount brokers (groww etc.) . If it breaks 500 , next targets are 520 and 560 .
