Sunday, May 4, 2014

Investment Idea Sharing May 3, 2014

This Week's Activity – May 3, 2014: 
On Friday, May 1, Jim Beam (BEAM) was bought out by Suntory (STBFY) of Japan.  This buyout was announced in January 2014 at which time, Suntory offered a 25% premium to the price of BEAM the day before.  I wish I had bought BEAM on Jan. 18.  Read more here: http://seekingalpha.com/article/1945041-beam-time-to-drink-after-a-great-offer  
I maintain an archive of spreadsheets of corporate buyouts so I can look for patterns in the financial data of the companies that are bought out.  My hope is that I can someday find a pattern to apply going forward to help me find these buyouts BEFORE they happen.  So far I am not recognizing any patterns.  Please feel free to suggest your thoughts on ways I can improve this pattern search.  Here is the link to the Ultimate Stock Finder BuyOut Archive page:  http://www.ultimatestockfinder.com/stockevaluatorarchiveindex.html

Last week, Richard, one of our Investment Idea Sharing friends asked me to add two fields to Stock Evaluator.  Price/Free Cash Flow (P/FCF) and Shareholder Yield.  He found P/FCF at FinViz, so I made the proper RCHGetTableCell command to put this value into Stock Evaluator. 

Shareholder Yield is not directly readable from any website that we could find. 
Here is the definition:
"To calculate shareholder yield, go to the Yahoo Finance Cash Flow statement. Look in the section labeled – Financing Activities, Cash Flows Provided By or Used In.  To calculate shareholder yield, you have to determine the total amount of dividends that were paid to shareholders (Dividends Paid), the net amount of stock that was repurchased (Sale Purchase of Stock), and the net amount of debt that was reduced (Net Borrowings). Before you get started, remember you are dealing with a cash flow statement so cash outflows, such as dividends, are recorded as negative numbers.  

Add Dividends Paid + Net Share Buybacks + Net Debt Reduction.  This value is called Returned Capital.  Before you calculate Shareholder Yield, change the sign of Returned Capital. Remember, we are dealing with the cash flow statement so negative numbers are flows out of the company’s coffers to you.  Shareholder Yield is Returned Capital divided by Market Capitalization." 

Here is an excellent article with more detail about Shareholder Yield:

StockEvaluator.xls already contained Market Cap., so all I had to do was make RCHGetTableCell formulas to look up the 3 Cash Flow values from Yahoo Finance.

While looking around at FinViz, I found the 14 Day Relative Strength Index value, RSI (14). Michael B. has been asking for this data in Stock Evaluator, so I added it too.

These 3 new added fields are now in StockEvaluator.xls in the following columns:
 Price/Free Cash Flow (P/FCF) in Col. K
 RSI (14) in Col. L
 Shareholder Yield in Col. P

At this time, I am not including these 3 new data values in the Red cell count.  I have added Target values in Columns C & D for each, but am only turning their cells Yellow to show a warning when they do not meet their Target value.  I track these 3 values for a few weeks to determine the proper Target limit value for use adding them to the Red cell count.

This week, the world market indices were mixed with minor Up / Down movements except for the Brazil BOVESPA Index which was up 3.5%.  Here is an article discussing this week’s activities:  http://www.bloomberg.com/news/2014-05-03/u-s-stocks-gain-for-week-as-dow-hits-record-on-earnings.html?cmpid=yhoo

Summary Table of Worldwide Market Index Closing values for this week:


I still think the markets are overpriced but I continue to look for good values on individual stocks of good solid companies. 
 

StockEvaluator ‘Short List’
‘Short List’ screens using 12 fundamental value limits that I want to see in a stock before considering it as a possible buy. 
View our training video that shows how to enter your preferred values for each of these ‘Short List’ screening limits:

View the ‘Short List’ screening criteria and target limit values here: http://www.ultimatestockfinder.com/short_list_12_criteria.JPG

I also use FinViz stock screener as a parallel check along with my ‘Short List’ to find good fundamental stocks that are near their 52 Week Lows.  Here is the FinViz stock screener link set to the 9 out of 12 ‘Short List’ limits that are available at FinViz.  
This is in the FinViz ‘Custom’ view:

Next Monthly Meeting 2nd Tuesday of Each Month:
Tuesday, May 13, 2014, 7:30 PM at my house. 

Here are my Stock BUYs for This Week:
Stock Symbol:
Buy Date: 
Buy Price:  
Target Sell Price:

Here are my Stock SELLs for This Week:
Stock Symbol:
Sell Date: 
Sell Price:
Buy Price:
Buy Date:

Here are my Mutual Fund BUYs for This Week:
Fund Symbol:
Buy Date: 
Buy Price: 
Target Sell Price:

Here are my Option (CALL or PUT) Sells/Buys for This Week:
Option:
Stock Symbol:
Sell to Open Date:
Expiration Date:
Strike Price:
Option Price:

Visit www.ultimatestockfinder.com to download our Stock Evaluator and Mutual Fund Evaluator spreadsheets, read training articles and check out all our web links for investing information.

Please remember to send me any other investing ideas, information or questions that you want to share with the group.

Thanks,
John D.

Disclosure: The author has no positions in any of the stocks or mutual funds mentioned in this article unless clearly stated above. We certify that except as cited herein, this is our work product. We received no compensation or other inducement from any party to produce this article.  Please see our full legal disclaimer at:  http://www.ultimatestockfinder.com/stockevaluator_disclaimer.html
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