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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (49038)	8/9/2012 1:38:53 PM
From: Grommit	Respond to of 78519

I agree that it may not be rational to hold utilities as compared to other things, but since investors are desperate for yield i do not expect a change in their PE multiples. i see them as a place to park a little cash until the US government fiscal situation becomes clearer in 2013.

To: Paul Senior who wrote (49038)	8/9/2012 9:55:42 PM
From: Sergio H	2 Recommendations Read Replies (1) \| Respond to of 78519

I've also been feeling that its time to sell utes and I feel uneasy about pharmaceuticals as well. Out of curiousity, I took a quick look at the numbers comparing ATO with AMGN, ZMH, GOOG and AAPL, the stocks you mentioned. ATO is selling at 134% of its 5 year avg. P.E. AMGN is also above 100% in this metric and the three other stocks are selling at a discount to their 5 yr. avg. PE. Then, I looked at their p/b and ATO comes in at the cheapest. Or the rest, only ZMH had a p/b of >2. I also looked at each stock's 5yr avg. net profit margin. ATO barely squeecks out a profit while the other stocks ranged from 18-26%. And for kickers, I looked at each stock's GN. ATO is selling at just about its GN. ZMH just above its GN and the rest are selling at huge premiums to their GN. I should look at other metrics as well, debt particularly, but this is as far as my curiosity will take me. Conclusion: Same as yours. Based on al of the above metrics, ATO is not a bargain. And the other stocks you mentioned may not qualify using GN, but based on the other metrics may present a better value, noting that different sectors are generally given different book value weight by the market. I suspect that using EKS' GN method; applying expected EPS instead of reported EPS might make a value case for GOOG or AAAPL but not for ATO. And if so, and one happened to be inclined, it would be a good start for further evaluation.

To: Paul Senior who wrote (49038)	8/9/2012 10:38:55 PM
From: Dennis 3	Read Replies (1) \| Respond to of 78519

maybe people are attracted to utilities because dividend and there are certain parts of the U.S. high unemployment and foreclosures like California. ATO in Texas seems like a safe bet.... eventually employment will pick up which will benefit utilities.