Sometimes is seems like all anyone ever writes about are those stocks that investors should buy, but not every stock is going to make the average investor money. This can happen for a number of reasons but if the companies have a history of being great companies, then the probable reason is that they're currently being priced at a level that fully expresses their future potential.
For the most part, that's what's happened to the fifteen companies listed below. Each of these companies individually are great companies but analysts currently think they're overpriced based on today's fundamentals. They estimate that they're priced more appropriately for the projected fundamentals to be realized next year. Notice in the table below that the one year estimated capital gain for these stocks is so negative that even their expected dividend yield won't compensate for the pullback in the price. The result is an overall loss of wealth. This is not the kind of investing that I'm personally interested in.
Currently I'm avoiding the following companies, but only in the short term. These are great companies but I will refrain from putting any money into these stocks until either the price pulls back or the analysts estimates increase. If I can't expect to get a total return of at least 8.00% by combining both the capital gain plus the dividend yield, then I'm generally just not interested. There's always alternative investments that will provide 8% and more.
For the most part, that's what's happened to the fifteen companies listed below. Each of these companies individually are great companies but analysts currently think they're overpriced based on today's fundamentals. They estimate that they're priced more appropriately for the projected fundamentals to be realized next year. Notice in the table below that the one year estimated capital gain for these stocks is so negative that even their expected dividend yield won't compensate for the pullback in the price. The result is an overall loss of wealth. This is not the kind of investing that I'm personally interested in.
Currently I'm avoiding the following companies, but only in the short term. These are great companies but I will refrain from putting any money into these stocks until either the price pulls back or the analysts estimates increase. If I can't expect to get a total return of at least 8.00% by combining both the capital gain plus the dividend yield, then I'm generally just not interested. There's always alternative investments that will provide 8% and more.
| Company Cincinnati Financial Brinker International WalMart Casey's General Store Cintas Sysco Genuine Parts Air Products Automatic Data Processing Clorox Target Chubb Group Leggett & Platt Family Dollar Store CR Bard | 1 Yr Est CapGain -3.64% -2.63% -3.46% -2.44% -3.75% -6.23% -5.74% -5.98% -6.22% -7.30% -7.52% -6.79% -7.87% -7.95% -7.00% | Dividend Yield 3.46% 2.02% 2.26% 0.96% 1.16% 2.90% 2.26% 2.12% 2.31% 2.96% 2.88% 1.95% 2.95% 1.57% 0.53% | 1 Yr Est Net Loss -0.18% -0.61% -1.20% -1.49% -2.59% -3.33% -3.49% -3.86% -3.91% -4.33% -4.64% -4.84% -4.92% -6.38% -6.48% |
I intend to continue to monitor these stocks monthly and when it becomes advantageous to once again invest in these companies, I'll be the first in line to do so. For now, these are great companies but bad investments.
Good Luck and Good Trading.
Good Luck and Good Trading.
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