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Given the huge sales jump Apple [stckqut]AAPL[/stckqut] delivered by upsizing the iPhone 6 last year, it is fair to expect a more moderate performance this time around. But it is also fair to wonder if investors have gotten too pessimistic about the company’s prospects.

Apple now trades at 11.5 times forward earnings, which is a 43% discount to the Nasdaq’s multiple. Excluding about $148 billion in net cash, that multiple drops to about 9.2 times. That is particularly cheap for a huge company that has racked up $50.7 billion in net earnings for the trailing 12 months—up 32% year over year.

So Apple’s stock has plenty of room for expansion, even if the new iPhones sell modestly compared with their predecessors. The broader iPhone lineup may also get some help from the fact that the ever popular iPhone 6 and 6 Plus models from last year are now $100 cheaper. Apple also made a significant update to its Apple TV box Wednesday and launched a new iPad aimed at business users.

Those may be bit players in the grand scheme of things, and Apple investors get most excited by innovation. Even so, at this valuation, iteration can have its own rewards.

Source: Bruised Apple Can Still Shine

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Company name Ulta Salon, Cosmetics & Fragrance, Inc.
Stock ticker ULTA
Live stock price [stckqut]ULTA[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $231.47
Target stock price (averages with growth) $252.72
Target stock price (averages with no growth) $117.06
Target stock price (manual assumptions) $221.25

The following company description is from Google Finance: http://www.google.com/finance?q=ulta
Ulta Salon, Cosmetics & Fragrance, Inc. (Ulta) is a beauty retailer. The Company provides salon products and salon services in the United States. It offers a combination of more than 20,000 prestige and mass beauty products. As of January 31, 2015, it operated 774 stores in 47 states. The Company offers products in the categories, including cosmetics, which includes products for the face, eyes, cheeks, lips and nails; haircare, which includes shampoos, conditioners, styling products and hair accessories; salon styling tools, which includes hair dryers, curling irons and flat irons; skincare and bath and body, which includes products for the face, hands and body; fragrance; nail polish and nail care products; men’s skincare, haircare and fragrance products; private label, consisting of Ulta branded cosmetics, skincare, bath and body products and haircare, and other health and beauty products.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Ulta Salon, Cosmetics & Fragrance, Inc. as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

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 Ulta Salon, Cosmetics & Fragrance, 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.
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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: $157.7
  • Growth: 0.18
  • Current EPS (TTM): $4.45
  • P/E: 35
  • Future EPS Calc: $10.18
  • Future Stock Price Calc: $356.31
  • Target stock price: $221.24

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I hope that this makes you a Confident Investor.

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Here are twelve simple but effective steps to take control of your finances by taking control of your money.

  1. Set financial goals
    If you set goals, they can help guide you even when things get tough. When you have to make a decision about money, your goals can help you stay focused on what’s important.
  2. Track every penny you spend
    This is the best way to become conscious of how money actually comes and goes in your life as opposed to how you think it comes and goes. It doesn’t matter how you track your spending — the most important thing is to do it. This is also one of the most effective ways to lose weight if you are on a diet – just write down every calorie you eat and every calorie you burn.
  3. Develop a budget
    After you’ve tracked your spending for a few weeks (or months), use the data you’ve collected to develop a budget. Budgeting is one thing that sets the wealthy apart from the rest of us — 55% of millionaires keep a budget. Spending less money than you earn can put you ahead of your peers.
  4. Review your bills
    At least once each year, you should review the contracts and agreements you have with various banks and service providers. This is also a great time to review your financial accounts to be sure everything still matches your needs.
  5. Optimize your accounts
    Why do you have multiple credit cards? Do you really use your fitness center? Do you need to subscribe to Netflix and Hulu? Do you read that subscription to that website and can you get your news from a different source? Cancel things that you haven’t used in the last 30 days and then be intentional (see below) about adding them back to your life.
  6. Start an emergency fund
    After you’ve optimized your accounts, make it a priority to save money for emergencies. I think an emergency fund should come before anything else.
  7. Get out of debt
    Are you struggling under a heavy debt load from credit cards or student loans? Make it a priority to unload some of this this burden. If you have the mental discipline, you’ll save money by paying down your high-interest debt first. But if you’ve tried that method before and failed, consider using a debt snowball. Pay your debts starting with the smallest balance first.
  8. Fund your retirement
    If you’re young, you probably don’t think you need to start a retirement account. You’re wrong. No matter how old you are, now is the time to begin saving money for retirement. The extraordinary power of compound interest favors the young — and in a big way! 
  9. Automate your finances
    When you make things automatic, you remove the human element, making it more difficult for you to mess things up. One terrific advantage to automation: when you pay your bills and do your saving and investing automatically, it’s easy to tell how much you have left over to spend at the end of each month!
  10. Earn extra money
    You can meet a lot of your financial goals by reducing your spending and using the right tools. But nothing supercharges your progress like a boost in income. How can you earn extra money?
  11. Learn to only intentionally spend money
    Being frugal doesn’t mean you have to deprive yourself. You’re not giving up the good stuff for the rest of your life. Instead, frugality is about choosing to spend it on the things that are important to you while cutting back ruthlessly on the things that aren’t. Intentional spending implies that you’re actively choosing to spend on some things and not on others. The biggest way to intentionally spend is to never buy something on the same day that you see it. Always wait for 48 hours after you have found that perfect item, to actually buy it. Those 48 hours may convince you not to buy it and you will have more money for the effort.
  12. Educate yourself
    Knowledge is power. Personal finance doesn’t have to be a mystery. Subscribe to this site or subscribe to my newsletter. Follow me on Facebook, Twitter and StockTwits.Most of all, read my book. It is likely the best investment to your financial future that you will make. You can purchase my book wherever books are sold such as Amazon, Barnes and Noble, and Books A Million. It is available in e-book formats for Nook, Kindle, and iPad.I will do my best to make you a more confident investor.