John Dorfman Columns category, Page 5
John Dorfman: Bunny Portfolio has averaged 13.6% per year
What do you call a stock that has a great earnings-growth history yet sells for modest price? You might call it a paradox. I call it a candidate for the Bunny Portfolio. I invented the Bunny Portfolio in 1999 and have written about it almost every year since. It’s named...
John Dorfman: Executives buy at Align Technology, Black Stone Minerals
Company executives usually talk an optimistic game. When they put their money where their mouth is, that’s when I pay attention. Align Technology Joseph Hogan, president and chief executive officer of Align Technology Inc. (ALGN), spent about $2 million to buy his own company’s stock in November. Hogan had sold...
John Dorfman: Capital One, Kelly Services selling below book value
People can argue all day about whether book value is a good gauge of a stock’s value. I say it is, and I believe the results from this column tend to prove it. Book value is a company’s net worth – the sum of its assets minus its liabilities. It...
John Dorfman: What’s a fun-sized stock? Around $1 billion
A company with a market value of about $1 billion is small enough to grow fast, yet large enough so that it can begin to appeal to institutional investors such as pension funds. I define large-capitalization stocks as those with a market value of $10 billion or more, mid-capitalization stocks...
John Dorfman: Stealing from the best: Here is my purloined portfolio
A politician would be silly not to do opposition research. A baseball team would be goofy not to use scouting reports. By the same token, an investment manager would have to be singularly incurious not to check out what other managers are buying and selling. Once a year in this...
John Dorfman: Pioneer Natural and Alico boast dividend appeal
A time-honored investing method is to buy stocks that have rising dividends. In my opinion, it’s a sensible method. A dividend increase acts as a sincerity barometer, showing that management believes earnings progress is sustainable. Right now, with a bear market raging, I think it is especially sensible, since dividend-paying...
John Dorfman: After third-quarter carnage, look at the Casualty List
Investors suffered their third unpleasant quarter in a row in the quarter that just ended. After this pounding, quite a few stocks look attractive to me. I’ve highlighted a few of them on my Casualty List. This list, which I compile each quarter, contains stocks that have been smacked down...
John Dorfman: My buy-sell ratings on 20 largest stocks
The largest stocks dominate the headlines — and investors’ wallets. So even though I’m fond of off-the-beaten-path stocks, once a year I give my buy-or-avoid ratings on the 20 largest stocks. Today’s the day. • Apple Inc. (AAPL, $2.4 trillion market value). Buy. The company’s iPhones and Mac computers have...
John Dorfman: Short-selling contest has repeat winner
Laurent Condon, a professional trader in France, won my Short Sellers Don’t Have Horns short-selling contest — his second triumph in the annual competition. Condon won the contest in 2017-2018 and finished third the following year. He also has excelled in some of my other contests. In addition to the...
John Dorfman: Insiders have been buying at Intel, Fox
In the past few weeks, insiders have been buying their own shares at Intel Corp. (INTC) and Fox Corp. (FOX). Patrick Gelsinger, the chief executive officer at Intel, spent just over half a million dollars to buy shares in August, bringing his stake to a bit more than $7 million....
John Dorfman: As the Fed tightens, what stocks may do well
He wasn’t kidding. Jerome Powell, chairman of the Federal Reserve Board, said Friday that the Fed’s Open Markets Committee will “use our tools forcefully,” and keep raising interest rates until inflation comes down. This is “no place to stop or pause,” he said. Investors winced, and stocks tumbled. The so-called...
John Dorfman: Occidental Petroleum, U.S. Steel look good on cash flow
Suppose you run a successful food-delivery business. Two years ago, you spent $1 million on a fleet of a dozen new trucks. On your books and tax records this year, you will subtract $200,000 from your earnings (profits) reflecting depreciation on those trucks. But you aren’t actually laying out any...
John Dorfman: What stocks would value saint Ben Graham like today?
Value investors speak in reverential tones about Benjamin Graham. A hedge-fund manager, Columbia University professor and author, Graham (1884-1976) is widely considered the father of value investing. Once a year, I attempt to guess what stocks the maestro would buy if he were alive today. Graham Method I use a...
John Dorfman: Stock market sayings often have kernel of truth
Stock market sayings often have a core of wisdom — and sometimes a grain of falsehood. Here are some market quotations you’re likely to hear. Buy on the cannons, sell on the trumpets. This saying often is attributed to Nathan Rothschild, a London financier in Napoleon’s time (around 1810). Scholars...
John Dorfman: It’s time for a breath of sanity
After a drop of about 20% in the first six months of this year, investors feel nervous even though July has been good. This might be a good time to look at my Sane Portfolio. It is a hypothetical portfolio of 12 stocks. I started compiling it in 1999 and...
John Dorfman: Berkshire, Applied Materials combine growth and value
In my experience, stocks that display both growth and value characteristics are often promising stocks to hold. Right now, I believe that Berkshire Hathaway Inc. (BRK.B), Applied Materials Inc. (AMAT), Regeneron Pharmaceuticals Inc. (REGN) and Laboratory Corp. of America Holdings (LH) fit the bill. Should you buy these stocks now,...
John Dorfman: Foot Locker and CVS look good on price-to-sales
Stock-market bargain hunters are a little like baseball scouts, trying to find talent that other teams have overlooked. A scout might find a pitcher who is wild (walks a lot of batters) but has a thunderbolt of a fastball. An investor might find a stock with a low price relative...
John Dorfman: The Perfect 10 Portfolio has averaged 19.9% return
Summer is upon us, and after pandemic weight gains, few people will rate a “Perfect 10” on the beach this year. But my Perfect 10 Portfolio is ready to show off. This hypothetical portfolio contains 10 stocks, each of which sells for 10 times earnings. For example, MKS Instruments earned...
John Dorfman: In a sour market, these stocks have been sweet
While most stocks have nosedived this year, a few have gained altitude. Many, but by no means all, are energy stocks. And not all of them are expensive, either. Here are five stocks that are bucking the downtrend. Exxon As I write this, the market is down about 20% for...
John Dorfman: 5 stocks that could hold up in a recession
Suddenly, investors are looking for companies that can survive a possible recession. Corporations with high profitability and low debt seem a pretty good bet. Most corporate chief executives, in a recent Wall Street Journal poll, said a recession has either already begun or will begin in the next 12-18 months....
John Dorfman: The 26 stocks I own personally and for clients
I recommend about 250 stocks a year in this column, but in a typical client portfolio, I own only 20 to 30 stocks. Readers sometimes are curious about which stocks I own. Here’s a rundown on my current holdings. Communications The world clamors for American entertainment and information. I own...
John Dorfman: 3 bank CEOs gobble up their own stock
Chief executives at three regional banks have bought their own companies’ stock last month. That, coupled with the fact that bank stocks were strong in May, suggests that adding a bank stock to your portfolio now might be a good move. First Citizens First Citizens BancShares Inc. (FCNCA) is a...
John Dorfman: Time to weed your holdings, upgrade your portfolio
With the stock market down 18% from its peak as of May 20, now is a good time for a portfolio upgrade. You can weed out losing holdings and get a tax deduction on your 2020 tax return. With the proceeds, you can buy first-rate replacements at prices well off...
John Dorfman: My ‘Do Nothing Club’ returned 68% in the past year
Certain predators can’t see their prey if the prey holds still. It’s the same with some investors. Stocks that do nothing for a while might vanish from investors’ consciousness. But stagnant stocks can sometimes be good buys. Hence, my Do Nothing Club. It’s an annual compilation of stocks whose price...
Now’s the time for low-debt stocks to pay off
Companies with high debt lived in a sort of paradise in 2019-21. With interest rates extraordinarily low, their debt burden didn’t hurt. Now, it looks as if it was a fool’s paradise.Interest rates are rising, and the debt burden is beginning to bite. I relish low-debt companies. They have little...
