John Dorfman Columns category, Page 2
John Dorfman: Pfizer, Schlumberger are January Bounce candidates
Stocks that struggle during the first 10 months of the year often fall further during November and December, as some investors sell to realize a tax loss. Once the tax-motivated selling subsides, such stocks frequently bounce back in January. Each year, I offer a few January bounce candidates — ones...
John Dorfman: Here’s another stock picking tool for your kit
Here’s a stock picking tool you might not have thought about. It’s called the PEG ratio. The PEG ratio is a ratio of two ratios. The numerator, or top line, is a stock’s price/earnings ratio, expressed simply as a number. This is the stock’s price divided by per-share earnings. If...
Citizens and Molson Coors look good based on book value
Stocks that are cheap relative to book value appeal to me a great deal. What’s book value? It’s basically a company’s net worth — its assets minus its liabilities. The figure is often expressed per share of common stock. General Motors Co. (GM), for example, has a book value of...
John Dorfman: These 5 stocks are hedge-fund faves
Many of this country’s most talented stock pickers choose to work at hedge funds, where salaries and bonuses often are more attractive than at bank trust departments or mutual funds. Gurufocus.com publishes a screen of stocks that are popular with leading hedge funds. For this column, I took that screen...
John Dorfman: Billion-dollar market value a sweet spot for stocks
I like companies with a market value around $1 billion. I think it’s a sweet spot — big enough to be “discovered” by institutional investors yet small enough to show dramatic growth. Each year around this time, I’ve written about a few companies in that size range, on the border...
John Dorfman: These 5 stocks make up Purloined Portfolio
Just because someone you respect owns a stock is no reason you should own it. On the other hand, you’d be a fool not to consider it. Once a year, I devote a column to stocks that show up in the course of my competition research. I collect a few...
John Dorfman: Occidental, Humana on Casualty List
“I can only buy on train wrecks,” famed money manager John Neff once said. Neff’s lament was that his fund (the Windsor Fund) had grown so large that he normally couldn’t buy a stock without pushing the price up. Accordingly, he felt that he could only buy on bad news....
John Dorfman: Dividends don’t (usually) lie
Geraldine Weiss, who died two years ago at age 96, was a successful investment newsletter writer at a time when few women were prominent in finance. She wrote a book called “Dividends Don’t Lie.” Weiss’ investment strategy was to invest in stocks with a dividend yield above that stock’s historical...
John Dorfman: What is the Dow Jones Industrial Average, Really?
You probably hear about the Dow Jones Industrial Average every day, but how much do you really know about it? Q: What is the Dow Jones Industrial Average anyway? A: It’s a venerable U.S. stock-market index that Charles Dow invented in 1896. It comprises 30 stocks, which the selection committee...
John Dorfman: Trader in France scores 3rd victory in short-selling contest
Laurent Condon, a professional stock trader in France, has won my annual short-selling contest for a third time. Condon scored a 99.7% gain on his entry from a year ago, Mullen Automotive Inc., an electric car maker based in Brea, Calif. The stock descended from $45 a share when the...
John Dorfman: Chief executives buy at HighPeak Energy and MRC Global
Jack Hightower is a well-known guy in the oil business. His company, HighPeak Energy Inc. (HPK), based in Fort Worth, Texas, is barely known by investors. In late August and early September, Hightower spent more than $2.8 million to increase his stake in HighPeak, a company he founded. That brings...
Harris, Trump and the future of corporate taxes
Kamala Harris and Donald Trump will clash over corporate tax rates in the next two months. As President, Trump pushed for lower corporate tax rates and got them. In 2017, Congress slashed the corporate tax rate to 21% from 35%. Corporate tax as we know it today was born in...
John Dorfman: Capital One, Tutor Perini look good on price-to-cash-flow
An old joke has a chief executive asking his accountant how much the company earned in the latest quarter. “How much did you want it to be?” the accountant replies. There’s always a bit of judgment that goes into financial figures. I’m a fan of GAAP earnings — profits measured...
John Dorfman: Sane Portfolio cruises into its 23rd year
Some people want to invest in the stock market but don’t want to be too daring. For the slightly conservative investor, I compile a collection of stocks I think may be suitable. I call it the Sane Portfolio. There are a dozen stocks in this portfolio, and I refresh the...
John Dorfman: A scorecard on women as CEOs
If Kamala Harris becomes president, she will break the ultimate glass ceiling. Other glass already has been shattered. About a quarter of U.S. senators are women, as are roughly a quarter of the nation’s governors. Women sit in the chief executive’s chair at about 10% of the corporations in the...
John Dorfman: Pilgrims Pride, Wabash National look good on this ratio
Want to invest in a company that is better at generating sales than profits? On the surface, that sounds like a remarkably bad idea. But investing in a company that has robust revenues and skimpy profits can sometimes pay off. New management, new products or plain old cost cutting may...
John Dorfman: Valero and D.R. Horton are on the Casualty List
Get ’em while they’re cold. That’s the idea behind my Casualty List, a quarterly compendium of stocks that have recently been knocked down, and that I believe will rise again. You’d never guess it from watching the market averages, but about half of all U.S. stocks were down in the...
Long live the Perfect 10 portfolio
Now that beach season is upon us, it’s time for the Perfect 10 Portfolio. This isn’t an homage to bathing beauties. It’s a collection of 10 stocks, each of which sells for 10 times earnings. That’s cheap. Over the years, most stocks have sold for about 15 times the company’s...
John Dorfman: Pfizer and 5 other dividend-yield standouts
“Would you kindly do a piece on high-dividend stocks?” a reader asked recently. Happy to oblige. My favorite high-dividend stock at the moment is Pfizer Inc. (PFE). In my view, Pfizer saved the U.S. from the covid-19 pandemic by developing both a vaccine and a treatment for the disease. That...
John Dorfman: These are the stocks I own
If you’re an investment manager and you tout the stocks you own, it’s called “talking your book.” I try not to do too much of it in this column. But once a year I write about the stocks I own personally and for most of my clients. Here we go...
John Dorfman: Graco and A.O. Smith boast high profit, low debt
Two qualities of outstanding companies are high profitability and low debt. Let’s look at a handful of companies that can boast both. Among the largest 2,000 U.S. companies, about 27% have high profitability, as gauged by a return on stockholders’ equity of 20% or more. About 15% of companies have...
John Dorfman: 4 CEOs who bought their own stock in May
Defying bad news, several chief executive officers bought their own companies’ stock last month. Here are four cases that caught my eye. Skyworks Solutions CEO Liam Griffin spent just over $1 million to buy 11,142 shares at Skyworks Solutions Inc. (SWKS). That brings his total holding to 153,431 shares, worth...
John Dorfman: ‘Do Nothing’ stocks have averaged 14% return
Investors often chase stocks that have soared or plunged. They may overlook stocks that have simply held still. But there are sometimes real bargains in stocks that have done nothing for a while. Each May, I write about such stocks. I call them the Do Nothing Club. Over 20 years,...
John Dorfman: 5 low-debt stocks for the ‘higher for longer’ era
Jerome Powell, head of the Federal Reserve, made it official a few days ago. “Higher for longer” interest rates are the policy of the nation’s central bank, and that’s likely to last for at least several months. The cost of carrying debt is biting companies harder than it did in...
John Dorfman: Checking in with top investors
The website Gurufocus.com tracks the stock picks and performance of a few dozen famous investors. In the past five years, half a dozen of them had annual returns exceeding 17%. Ron Baron leads the parade. His Baron Partners Fund had a 31.2% annual return. In today’s column, we’ll take a...
