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Company name H.J. Heinz Company
Stock ticker HNZ
Live stock price [stckqut]HNZ[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $62.03
Target stock price (averages with growth) $65.45
Target stock price (averages with no growth) $54.43
Target stock price (manual assumptions) $59.59

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

H. J. Heinz Company together with its subsidiaries is engaged in manufacturing and marketing a range of food products throughout the world. The Company’s principal products include ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products. The Company’s products are manufactured and packaged to provide safe, wholesome foods for consumers, as well as foodservice and institutional customers. The Company manufactures and contracts for the manufacture of its products from a variety of raw food materials. The Company operates in five segments: North American Consumer Products, Europe, Asia/Pacific, U.S. Foodservice and Rest of World. In April 1, 2011, the Company acquired 80% stake in Coniexpress S.A. Industrias Alimenticias. In November 2, 2010, the Company acquired Foodstar Holding Pte (Foodstar).During the year ended December 31, 2010, the Company sold its Appetizers And, Inc. frozen hors d’oeuvres business.

 

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

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

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $80.32
Target stock price (averages with growth) $97.55
Target stock price (averages with no growth) $75.1
Target stock price (manual assumptions) $69.72

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 this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

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I repeatedly try to encourage my readers to cut back on spending to enable a higher level of savings. It is best if you automatically deduct 10% of your income from your paycheck and immediately divert it to another account in a separate institution. This means that you effectively take a 10% income hit.

In order to afford that income hit, you may need to reduce your spending. I came across this article on Mainstreet.com on the 12 things to stop paying for in 2012 but I think it is timeless. You shouldn’t pay for this stuff in ANY year.

  1. Coffee Shop Visits
  2. Incandescent Light Bulbs
  3. Disposable Water Bottles
  4. Baggage Fees
  5. Subscriptions You Don’t Use
  6. Baby Food
  7. Credit Score Fees
  8. Cable
  9. Landline Phones
  10. Cleaning Supplies
  11. ATM Fees
  12. Home Repairs You Can Do Yourself

You may find that this list includes things that are more frugal than you desire. This is false bravado. If you are not investing 10% of your after-tax income as I suggest in my book, The Confident Investor, then you are making a mistake. Do not be wasteful AND a poor investor!

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It is common for stock investors to be compared to gamblers. This comparison is even more common when discussing stock traders or those that move in and out of their holdings more frequently. While I am sure there are some stock traders that are gamblers, some long-term investors would more readily match the image of a gambler, much to the long-term investor’s chagrin.

Before I defend the previous paragraph, I think it is necessary to provide assistance to those in need of help. If you believe that your stock trading activity has begun to affect your life in an unhealthy manner, please seek help. Gambler’s Anonymous is a great organization that can help those that have become addicted to gambling. Gamblers Anonymous is a fellowship of men and women who share their experience, strength and hope with each other that they may solve their common problem and help others to recover from a gambling problem.

One of the habits of an addicted gambler is to push hard on a losing position. You have seen this in movies for decades even if you haven’t seen it in person. The gambler is losing badly and continues to play the same game in the same manner. Typically, the gambler loses it all.

I hate to say this, but this behavior is often what I see in the most cautious of investors. The investor that thinks that loyalty to a stock somehow is the honorable thing. That loyalty extends to even when the stock price drops 10-50%. That loyalty often is accompanied with logic that says that if the asset is held long enough, the loss will turn into a gain.

I am sorry, but I believe this is reckless behavior. You should have no loyalty to any individual stock. You only need commitment to your family that is counting on you. They want you to develop a reasonable return on your investment to provide for the future acquisition of the nicer things in life. I guarantee that the CEO of the company will not be personally offended if you sell the stock of his company!

I publish my favorite stocks on my Watch List. These stocks have gone through a filter that the majority of stocks cannot survive. These few stocks are not blessed forever – I regularly revisit my analysis of each company and cut them from the list when they have failed to meet my criteria. I also sell all my holdings as soon as I can in each company that has failed my tests. I explain my criteria in my book, The Confident Investor.

Even the companies on my list don’t get a free pass. I monitor each one for upward momentum. I invest heavily in the ones that are increasing in value. I pull out of those that experiencing a short-term bull market. I explain this strategy in my book, The Confident Investor, and I call it Grow on Other People’s Money (GOPM for short).

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.

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Company name Devon Energy Corp
Stock ticker DVN
Live stock price [stckqut]DVN[/stckqut]
Confident Investor Rating Poor

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

Devon Energy Corporation (Devon) is an independent energy company engaged in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in North American onshore areas in the United States and Canada. It also owns natural gas pipelines, plants and treatment facilities in many of its producing areas. Devon is engaged in the commercial development of natural gas from shale and coaled formations, and it is a using steam to produce oil from the Canadian oil sands. During the year ended December 31, 2011, the Company drilled 1089 wells in the United States and 1045 wells in Canada. In August 2012, Crestwood Midstream Partners LP completed the acquisition of gathering and processing assets from subsidiaries of Devon.
Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. It is not possible to confidently invest in a company that is not currently profitable.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.