Quality of Earnings: The Investor’s Guide to How Much Money a Company is Really Making
By Thornton L. O’glove and Robert Sobel
This week, . . .
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ACME Communications, Inc. (PINK: ACME) owns and operates six broadcast television stations in five medium-sized markets across the United States, all of which were previously WB Television Network affiliates. The company trades for a market cap of $17 million which is slightly less than its book value of $18 million. The interesting story of ACME is that it has recently agreed to sell several of its stations. In August 2010, it agreed to sell WBDT and WIWB for an aggregate purchase . . . In the fall, I wrote about Aeropostale (NYSE: ARO) and its strong returns on capital and earnings yield, even after including off balance sheet operating leases. Another teen clothing retailer is American Eagle Outfitters (NYSE: AEO) which, despite the market run-up over the last six months, is trading below where it was for most of November. AEO has zero bank debt, substantial cash and strong free cash flows. AEO trades at a P/E of 17, but has $734 million . . . A New York Times article points out the many opportunities being found in large cap tech stocks: By contrast, tech stocks are significantly less frothy than they’ve been in years. Historically, shares of technology companies have traded at about a 30 percent premium to the broad market, based on their P/E ratios. That’s because tech companies have traditionally enjoyed faster earnings growth than other types of businesses. Today, however, technology’s P/E is on par with that of the overall . . . The Omaha World-Herald recently provided some insight into Warren Buffett’s personal security: Since Buffett hired him in 1995, Clark has expanded protection to include measures such as security around the investor’s house in 2006. Clark said he follows his boss’s lead and adjusts to his lifestyle and personality. Buffett is known for not thinking twice about plunging into the swarm of stockholders to shake hands or have a barbecue sandwich. “We try to make our approach breathable with the . . . |
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