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Company name SunTrust Banks, Inc.
Stock ticker STI
Live stock price [stckqut]STI[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Poor
EPS growth Poor
P/E growth Good
EBIT growth Good
ANALYSIS
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $2070119.2
Target stock price (averages with growth) $48587.22
Target stock price (averages with no growth) $4.08
Target stock price (manual assumptions) $27.66

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

SunTrust Banks, Inc. (SunTrust) is a commercial banking organization. The Company is a diversified financial services holding company whose businesses provide a range of financial services to consumer and corporate clients. During the year ended December 31, 2011, it operated its business segments: Retail Banking, Diversified Commercial Banking, CRE, CIB, Mortgage, W&IM, and Corporate Other and Treasury. Through its principal subsidiary, SunTrust Bank, the Company offers a line of financial services for consumers and businesses, including deposit, credit, and trust and investment services. Additional subsidiaries provide mortgage banking, asset management, securities brokerage, capital market services, and credit-related insurance. SunTrust provides clients with a selection of branch-based and technology-based banking channels, including the Internet, automatic teller machine (ATMs), and round the clock telebanking.

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

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Company name Telefonica S.A. (ADR)
Stock ticker TEF
Live stock price [stckqut]TEF[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Poor
EPS growth Poor
P/E growth Good
EBIT growth Poor
ANALYSIS
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $7.09
Target stock price (averages with growth) $22.3
Target stock price (averages with no growth) $37.35
Target stock price (manual assumptions) $14.78

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

Telefonica, S.A. (Telefonica) together with its subsidiaries and investees operates in the telecommunications, media and contact center industries. Telefonica’s basic purpose is the provision of all manner of public or private telecommunications services, including ancillary or complementary telecommunications services or related services. It operates in three business segments: Telefonica Spain, Telefonica Europe and Telefonica Latin America. On October 26, 2010, it acquired Portugal Telecom’s, a 50% interest in Brasilcel. On September 27, 2010, it acquired 50% of the interest of Brasilcel (a Dutch company that owns interest representing, approximately, 60% of the interest capital stock of Brazilian company Vivo Participacoes, S.A.). On February 16, 2010, it completed the acquisition of 100% of the interest of HanseNet Telekommunikation GmbH. In January 2010, the Telefonica Group, through its wholly owned subsidiary Telefonica Europe Plc, acquired 100% of the interest of Jajah Inc.

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

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Company name Wells Fargo & Company
Stock ticker WFC
Live stock price [stckqut]WFC[/stckqut]
P/E compared to competitors Good
MANAGEMENT EXECUTION
Employee productivity Fair
Sales growth Poor
EPS growth Good
P/E growth Poor
EBIT growth Good
ANALYSIS
Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $52.07
Target stock price (averages with growth) $63.29
Target stock price (averages with no growth) $48.65
Target stock price (manual assumptions) $33.84

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

Wells Fargo & Company is a bank holding company. The Company is a diversified financial services company. It has three operating segments: Community Banking Wholesale Banking and Wealth, Brokerage and Retirement. The Company provides retail, commercial and corporate banking services through banking stores and offices, the Internet and other distribution channels to individuals, businesses and institutions in 50 states, the District of Columbia and in other countries. The Company provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, insurance agency and brokerage services, mortgage-backed securities servicing and venture capital investment. In September 2011, the Company acquired ISU Stetson-Beemer Insurance. On February 1, 2012, the Company acquired Burdale Financial Holdings Limited and the portfolio of Burdale Capital Finance Inc. from Bank of Ireland.

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

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A frequent question that I get on twitter (@ConfidentInvest) or on emails sent to me via this site is:

Why do I look at EBIT?

In particular, why do I look at the growth of this value?

My answer to this is quite straightforward, but first it my make sense for you to take a quick refresher on EBIT. Rather than typing a lot of words, I am going to ask Hamilton Lin of Wall Street Training to explain it.

As you heard Mr. Lin explain at about 1:20, EBIT is the core sustainable profitability from the core operations of the company. In other words, this is what the company does as a company, and this is how much the company makes for doing it. It is just simply logical that we want to look at this core value, and we want this core value to grow!

There are other metrics that I use to analyze a company. It concerns me when an analyst recommends a company that cannot get its core operations to grow. If the stock price is growing faster than the core operations is growing (taking into account the multiplier effect of P/E) then either the company was too cheap before or it is too expensive now.

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Company name Vale (ADR)
Stock ticker VALE
Live stock price [stckqut]VALE[/stckqut]
P/E compared to competitors Good
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) $65.96
Target stock price (averages with growth) $72.08
Target stock price (averages with no growth) $50.75
Target stock price (manual assumptions) $30.68

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

Vale SA (Vale) is a Brazil-based metals and mining company. The Company services are divided into four segments: Bulk Material, including the extraction of iron ore, manganese and ferroalloys, as well as pellet production; Basic metals, comprising the production of non-ferrous minerals, including nickel, copper and aluminum; Fertilizers, including the production of potash, phosphate and nitrogen; and Logistic services, including cargo transportation for third parties divided into rail transport, port and shipping services. Additionally, Vale is active in investments in joint ventures and associate in other businesses. The Company operates in more than 38 countries, including mineral exploration activities in 21 countries. As of December 31, 2011, the Company operated through 18 subsidiaries and three jointly-controlled entities, incorporated in Brazil, Peru, Indonesia, Chile, Australia, Austria, Canada, Colombia, Switzerland, Mozambique, New Caledonia, Oman, Singapore and the USA.

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