The holiday rush is over, leaving really no reason to jump into new investments before year end. In the meantime, lets find some value to rock the market in 2008.
As far as equity trading goes, January is typically in the money. Why? Well one reason is that people like me are pouring money into new portfolios now that 2007 taxes are in the books. Since we have some time before the year turns, lets use it to pick out some winners, shall we?
Okay… winners, winners…. how exactly do you find one? Well for me, it’s all about finding an established company that has a promising future and is undervalued. As an example, lets pick on one of my 2008 hot-shots, Convance Inc (NYSE: CVD).
First off, Convance is by all means an established health care firm with a market cap over 5 1/2 billion. I like to use Yahoo! Finance to pull that number, and stop short if I see less
than 3 billion. Then I am going to look into their returns (this primarily means return on equity, assets, and capital). Returns are #1 for me because if a company can’t grow what investors are putting in, why would we give them our money? Over 10% across the board for the current year and past five years is a must. But I don’t check this on Yahoo, nope, the old forgotten MSN money takes the cake for me. For Convance, just mash in that ticker symbol and grab “Financial Results” –> “Key Ratios” –> “Investment Returns“. I want every number in that front column to be at or above 10%, which Convance takes with style.
Once I find companies that I can stand, I want to get over to the CAPS rating service to see if investors are bullish on the trade. Going into CVD, I’m seeing outperforms, growth upside and low risk. Now freeze. Does this mean I am buying? Absolutely not. This means it goes on my watch list, I am going to run valuations until I am certain I am making the right call with Convance. As it happens, S&P has Convance as a strong buy… undervalued next to its target price of $98.
Finding companies to check out isn’t too difficult with all of the tools out there. Check out the stock screeners at Yahoo! Finance to pinpoint companies that fit what you need in your diversified portfolio. Over the next few weeks, I’ll be throwing around some 2008 stocks you will want to have a look at, stay tuned!
-Jimvesting
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