Monday, October 22, 2007

Rino: Stock Valuation

My newest method to help me find some consistency in this volatile market environment is calculating what the company is worth. This is nothing new on wallstreet as P + E = M is the basic fundamental equation to price a stock. Nonetheless, I've neglected to use this equation and have thus far suffered mightily during the earning season.

So here are my predictions for 5 companies that are to report in the next two days.

AAPL - Monday after market close
Currently @ $170
I expect AAPL to beat the analyst estimate and report $1.00 per share in earnings.
With that EPS multiplied by current growth, my price target for AAPL by next earning period stands at $188.
I expect this stock to fall after earnings. However, after the earnings and a little pullback to around 150-155 area, I'd be a buyer.
Long Term - BULL; Short Term - BEAR

HAL - Monday before market open
Currently @ $39
I expect HAL to report $0.65 per share in earnings.
My price target for HAL is $40.
I see no surprise to the upside on this stock for the next quarter. However, expect big things for this stock after next earnings as I annoint this stock as the stock of 2008.
Long Term - BULL; Short Term - Not Interested

AMZN - Tuesday
Currently @ $90
I expect AMZN to report $0.16 EPS.
Price target of $105.
Like AAPL, I expect this stock to fall for now. I'd be a buyer after a moderate pullback.
Long Term - BULL; Short Term - BEAR

T - Tuesday
Currently @ $41.5
I expect T to report $0.77 EPS.
Price target of $57.
This stock has by far the largest discrepency between the current price vs my target price. I do not expect for it to reach $57 by January, but I do see a lot of upside to this stock. Pick up the stock if it falls enough today prior to earnings report.
Long Term - BULL; Short Term - WAIT & BUY

UPS - Tuesday
Currently @ $75
I expect UPS to report $1.03 EPS.
Price target of $80.
Not much upside or downside to this stock for the foreseeable future.
Long Term & Short Term - Nada

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