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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (33481)	2/17/2012 4:45:01 PM
From: Paul Senior	1 Recommendation of 78730

OT? Heinz surprises with better-than-expected 3Q earnings. Emerging market results overcame lackluster USA results. Stock rises to near its 12-mo high. "Heinz now sees full-year per-share earnings of $3.27 to $3.29". online.wsj.com I'll just arbitrarily tack on a 10% earnings improvement for HNZ for the following year. P/e would be $54.47/$3.62 or 15. At a p/e of 15 I'm indifferent to the stock. I decided I'll just close my stub position today and average up on my few Emerson (EMR) shares. I like EMR for a reversion-to-mean play (forward p/e now is relatively low (i.e. relatively to EMR previous years) at about 13, per Yahoo). I'm guessing that if stocks in general are going to move up, it'll be because of multiple expansion and not so much due to great increases in revenues and/or earnings. That is, in a continuing low interest rate environment, I am hoping for a general market p/e expansion.

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