Weekend Homework - REVISED AND CORRECTED!

Sorry, everyone. Matt pointed out that I skipped SKX for my weekend homework list of low PE stocks. I don’t know how I missed it on my list. I consider it one of the best prospects. And Mike noticed that I mistyped CNC as CNCR and then just copied it down. CNC is the correct symbol. Here’s the revised list!

Saul (I am sorry about the error and the omission!)

A little homework for the weekend: This was a very good week for us. I started the week up 13.1% for the year to date and finished the week up 20.4%. That really is a good week for me. However, even after that nice bounce there are some real bargains out there. How can that be? Well lots of our stocks posted great earnings but the stock price didn’t go up, or even sold off because earnings didn’t go up as much as some analyst expected, or because of other worries. Here are some stocks I’m in which seem like real bargains (to me). I’ll list them starting with the lowest PE first, followed by their rate of growth of earnings this quarter, and for the trailing 12 months. Please evaluate them for yourselves! They may not be your kind of stock at all!


		 **PE**
LGIH		14.2
SWKS		16.3
SNCR		17.3
BOFI		17.8
INBK		17.9
AMBA	    	18.4
SKX		18.8
CNC		20.4
SEDG		21.4

	 **% growth of earnings for the quarter** 
LGIH		53%
SWKS		36%
SNCR		26%
BOFI		33%
INBK		82%
AMBA           138%  (Their Q ends in Oct so this is their July Q)
SKX		29%	
CNC		24%
SEDG	   	500% (Off a small base of 6 cents, to 36 cents)

	**% growth of 12 month trailing earnings** 
LGIH		50%
SWKS		63%
SNCR		29%
BOFI		37%
INBK	       118%
AMBA       	136%  (Their Q ends in Oct so this is their July Q)
SKX		73%
CNC		64%
SEDG	    	??%   (I get them at positive 96 cents, up from a loss the 12 months before)

		**Risks and worries**
LGIH		People will stop buying houses because the economy will tank. But great employment figures.
SWKS		Commoditization, no more new cell phones, AAPL moving to someone else. All unlikely. Amazingly low price
SNCR		Just not a sexy stock
BOFI		REAL risks here that have been extensively discussed on the board
INBK		Very small bank
AMBA          	I consider REAL risks here too (GPRO), but possible lot of growth.
SKX		I don't see any real threat at current price. (People stop buying comfortable shoes?)
CNC		Possible political risk but hard to say.
SEDG	        Dominates its field, but people worry about sun power after tax breaks disappear.
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8Saul, I want to thank you for being so gracious by sharing what has worked so well for you since 1989 or so. What a gift that you are so giving as to pass this on to all of us here in Motley Fooldom. I read your board every day, and often times multiple times each day and have been regularly following your board since this July or so. Having read the foundation and basis of your investing approach and read the 1YPEG excel spreadsheet, I am going to start using the Saul approach for a portion of my portfolio. I see now how important it is to understand and run the num ers for myself rather than just being a blind follower. Knowing that no one can time the market, it appears that there is no better time to infuse new money (into a bull market) than now. Thank you for being so selfless and for paying forward your knowledge to so many of us. I believe it speaks highly of a man’s character when one gives of himself so unselfishly as you have. Thank you Saul.

Tony (sjo)

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Thanks for your very kind words Tony!
Saul

I think the problem with SKX is completely down to the market ‘sitting on its hands’, being uncertain about what to enter as the likely future growth rate and the trend; confidence will return but it is saying ‘show me’.

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