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Company name Merck & Co., Inc.
Stock ticker MRK
Live stock price [stckqut]MRK[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $86.24
Target stock price (averages with growth) $78.66
Target stock price (averages with no growth) $49.04
Target stock price (manual assumptions) $60.27

The following company description is from Google Finance: http://www.google.com/finance?q=mrk

Merck & Co., Inc. (Merck) is a global health care company that delivers health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products, which it markets directly and through its joint ventures. The Company consists of four operating segments, which are the Pharmaceutical, Animal Health, Consumer Care and Alliances segments, and one reportable segment, which is the Pharmaceutical segment. The Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. Effective February 25, 2013, Dashtag, a unit of Merck & Co Inc’s Schering Plough Corp subsidiary acquired 17.95% interest in Fulford (India) Ltd.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Merck & Co., Inc.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Merck & Co., Inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $55.75

Growth: 0.12

Current EPS (TTM): $1.53

P/E: 36

Future EPS Calc: $2.69

Future Stock Price Calc: $97.06

Target stock price: $60.27

I hope that this makes you a better investor. [/s2If]

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Company name Monster Beverage Corp
Stock ticker MNST
Live stock price [stckqut]MNST[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $97.26
Target stock price (averages with growth) $118.8
Target stock price (averages with no growth) $82.69
Target stock price (manual assumptions) $92.91

The following company description is from Google Finance: http://www.google.com/finance?q=mnst

Monster Beverage Corporation is a holding company. The Company develops, markets, sells and distributes alternative beverage, such as non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored and unflavored) with beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. It has two reportable segments, namely Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network. The Warehouse segment develops, markets and sells products directly to retailers.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Monster Beverage Corp.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Monster Beverage Corp calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $70.06

Growth: 0.17

Current EPS (TTM): $1.95

P/E: 35

Future EPS Calc: $4.27

Future Stock Price Calc: $149.63

Target stock price: $92.91

I hope that this makes you a better investor. [/s2If]

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Company name Lululemon Athletica inc.
Stock ticker LULU
Live stock price [stckqut]LULU[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $60.24
Target stock price (averages with growth) $96.53
Target stock price (averages with no growth) $85.7
Target stock price (manual assumptions) $62.4

The following company description is from Google Finance: http://www.google.com/finance?q=lulu

lululemon athletica inc. is a designer and retailer of technical athletic apparel operating primarily in North America and Australia. The Company’s yoga-inspired apparel is marketed under the lululemon athletica brand name. The Company offers a range of performance apparel and accessories for women, men and female youth. Its apparel assortment, including items, such as fitness pants, shorts, tops and jackets, is designed for healthy lifestyle activities such as yoga, running and general fitness. The Company’s fitness-related accessories include an array of items, such as bags, socks, underwear, yoga mats, instructional yoga digital versatile discs (DVDs) and water bottles. As of January 29, 2012, its branded apparel was principally sold through 174 stores that are located in Canada, the United States, Australia and New Zealand.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Lululemon Athletica inc.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Lululemon Athletica inc. calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $45.38

Growth: 0.18

Current EPS (TTM): $1.91

P/E: 23

Future EPS Calc: $4.36

Future Stock Price Calc: $100.5

Target stock price: $62.4

I hope that this makes you a better investor. [/s2If]

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Company name KLA-Tencor Corporation
Stock ticker KLAC
Live stock price [stckqut]KLAC[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $86.52
Target stock price (averages with growth) $112.58
Target stock price (averages with no growth) $90.13
Target stock price (manual assumptions) $78.46

The following company description is from Google Finance: http://www.google.com/finance?q=klac

KLA-Tencor Corporation (KLA-Tencor) is engaged in the design, manufacture and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. KLA-Tencor’s offerings include the Chip Manufacturing, Wafer Manufacturing, Reticle Manufacturing, Complementary Metal-Oxide-Semiconductor (CMOS) Image Sensors Manufacturing, Solar Manufacturing, light emitting diode (LED) Manufacturing, Data Storage Media/Head Manufacturing, Microelectromechanical Systems (MEMS) Manufacturing, and General Purpose/Lab Applications. It also provides refurbished KLA-Tencor tools as part of its K-T Certified program for customers manufacturing larger design-rule devices, as well as service and support for its products. The Company’s products are used in a number of other industries, including the LED, data storage and photovoltaic industries, as well as general materials research.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in KLA-Tencor Corporation.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of KLA-Tencor Corporation calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
[s2If current_user_can(s2member_level1)]
In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $63.1

Growth: 0.15

Current EPS (TTM): $3.49

P/E: 18

Future EPS Calc: $7.01

Future Stock Price Calc: $126.35

Target stock price: $78.45

I hope that this makes you a better investor. [/s2If]

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grow your investment portfolioDo you want to grow your investment portfolio?

That probably seems like a silly question. I doubt any investor under the age of 70 would answer the question about the desire to grow your investment portfolio with an emphatic, “No!” If you think of the opposite of that question (“Do you want your investment portfolio to get smaller?”) the original question becomes even more sillier.

But what if I told you that in order to grow your investment portfolio, you will quite often be wrong in your decisions. In fact, you need to be okay with having the wrong opinion on a given stock. You need to be okay with it only because you need to figure out what to do AFTER you are wrong.

When a company doesn’t perform the way you want it to perform, you need to cut your losses. Some investment advisers may suggest that you double down on the stock and buy it at a lower cost. That is likely a fools errand. Yes, you will lower your break-even point if the stock rebounds, but what if it doesn’t rebound. What happens if it continues to go down? In order to grow your investment portfolio, you need to cut your losses.

Understanding the stock market is as much of a study of human behavior as it is a mathematical exercise. You need to understand that the herd mentality of the market means that loser stocks tend to continue down until they hit a lower plateau.

In nearly every stock, there is a virtual floor and a virtual ceiling. In most cases, you can assume that the virtual floor and the virtual ceiling is the 52-week high and the 52-week low (this is a generalization). If the stock that you are doubling up on has broken through the floor, you don’t know where the bottom is! You will need to look at inflection points over the last 5 years to know the floor.

So how do you grow your investment portfolio after a drop?

Typically, you will not quickly recover a major drop in the value of a stock by staying with that stock.  You will need to cut your losses on that loser stock and invest in another stock that is increasing in value. At any given time (except for massive market corrections) there are stocks that are increasing in value while others are dropping in value. You need to be able to cut your losses to grow your investment portfolio and move to a growing stock.

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