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Undervalued Stocks Advisor
Wealth Building Opportunites for the Active Value Investor

November 23, 2022

Last week, we rolled our valuation and earnings estimate table forward by a year, dropping the 2022 estimates and adding the 2024 estimates.

Ohio State – Michigan Game

For sports fans, particularly those following college football, this week’s featured match-up is the Ohio State-Michigan game. Widely recognized as the biggest rivalry in the game, and possibly in all of American sports, these two teams have duked it out since their first pairing in 1897. Legendary head coaches like Woody Hayes, Urban Meyer and Bo Schembechler have paced the sidelines, bringing an intense mental battle to what often is viewed as a physical, on-the-field struggle. The stakes are high – a coach that has middling seasons but consistently beats the other team is seemingly assured of their job. But, losing two or more of these match-ups in a row, even if the team goes undefeated in the regular season, puts the head coach’s job in jeopardy.

The traditions surrounding the game can seem offbeat to non-fans. Check out the story behind OSU’s gold pants pendant, and Michigan’s attempt to replicate it, for a sense of what this rivalry produces.

Does anything about this game really matter in a world anxious about war, civil violence, inflation, intense political disagreements, a dangerous bear market and a wide range of other serious problems? No, not really. And that is why it matters.

For a few hours, or days, everyone can toss the big issues aside and focus on a game that has no worldly importance. It frees up one’s mind, one’s attention, one’s focus. The rivalry mixes people on both sides of every imaginable issue – we can come together to root for the same team, at least for an afternoon. We can get back to all of those serious issues and problems later.

This year, both teams are undefeated at 11-0. Michigan (currently ranked #3 in the country) won last year, so the pressure is on the Buckeyes (currently ranked #2) to produce a win. Game time is Saturday, 12 noon, Eastern time. Who am I rooting for? Let’s just say that the home team absolutely, without a doubt, will crush the visiting team. Not that it matters, of course.

Note on the Valuation and Earnings table:

Last week, we rolled our valuation and earnings estimate table forward by a year, dropping the 2022 estimates and adding the 2024 estimates. By this time of the year, stocks are starting to trade on estimated 2023 earnings, so our table now reflects these numbers.

Share prices in the table reflect Tuesday (November 22) closing prices. Please note that prices in the discussion below are based on mid-day November 22 prices.

Note to new subscribers: You can find additional color on our thesis, recent earnings reports and other news on recommended companies in prior editions of the Cabot Undervalued Stocks Advisor, particularly the monthly edition, on the Cabot website.

Send questions and comments to Bruce@CabotWealth.com.

Today’s Portfolio Changes
None

Last Week’s Portfolio Changes
None

Upcoming Earnings Reports
Big Lots (BIG) – Thursday, December 1

Growth/Income Portfolio
Cisco Systems (CSCO) is facing revenue pressure as customers migrate to the cloud and thus need less of Cisco’s equipment and one-stop-shop services. Cisco’s prospects are starting to improve under a relatively new CEO, who is shifting Cisco toward a software and subscription model and is rolling out new products, helped by its strong reputation and entrenched position within its customers’ infrastructure. The company is highly profitable, generates vast cash flow (which it returns to shareholders through dividends and buybacks) and has a very strong balance sheet.

On November 16, Cisco reported a reasonably solid quarter. Results were ahead of the consensus estimates, and guidance for the next quarter and the full fiscal year were above current estimates. While the guidance increments were small, they were positive, nonetheless, and the shares responded favorably as investors continue to underestimate Cisco’s resilience. Valuation remains unchallenging.

Earnings of $0.86/share rose 5% from a year ago and were 2% above the consensus estimate of $0.84. Revenues rose 6% and were 3% above estimates.

Revenues continue to increase, subscription-based revenues are growing faster than total revenues, and the backlog is growing which should help insulate Cisco from any early effects of an industry slowdown. Supply chain issues are starting to fade, helping the company move some backlogged products. Product orders fell 14%, indicating some weakness may lie ahead. Product gross margins slipped as some of its backlogged inventory was priced long ago but the component input costs jumped in the interim. Service gross margins jumped, encouragingly, but not enough to avoid a decline in the company’s total gross margin. We’ll accept this explanation for now but expect to see improvements in the next quarter, otherwise we will have to accept that product pricing pressure is increasing.

Operating costs rose only 5%, pointing to some incremental cost controls relative to revenue growth. The company announced a new initiative to re-align its costs, which may lead to incremental cost efficiencies net of reinvestment. Cisco continues to generate prodigious amounts of cash flow from operations, at $4 billion in the first quarter, up 16% from a year ago and reaching nearly 28% of revenues. Just over half of this $4 billion was spent on dividends and share buybacks – uses we find to be savvy given the shares’ depressed valuation. Cash net of debt increased to $10.7 billion.

CSCO shares rose 7% and have 37% upside to our 66 price target. The valuation is attractive at 9.4x EV/EBITDA and 13.6x earnings. The 3.2% dividend yield adds to the appeal of this stock. BUY

Comcast Corporation (CMCSA) – With $120 billion in revenues, Comcast is one of the world’s largest media and entertainment companies. Its properties include Comcast cable television, NBCUniversal (movie studios, theme parks, NBC, Telemundo and Peacock), and Sky media. The Roberts family holds a near-controlling stake in Comcast. Comcast shares have tumbled due to worries about cyclical and secular declines in advertising revenues and a secular decline in cable subscriptions as consumers shift toward streaming services, as well as rising programming costs and incremental competitive pressure as phone companies upgrade their fiber networks.

However, Comcast is a well-run, solidly profitable and stable company that will likely continue to successfully fend off intense competition while increasing its revenues and profits, as it has for decades. The company generates immense free cash flow which is more than enough to support its reasonable debt level, pay a generous dividend (recently raised 8%) and sizeable share buybacks.

With the return of Bob Iger to the CEO seat at Disney, that company may accelerate its likely plans to buy the remaining 33% stake in Hulu currently owned by Comcast. Disney has an option to buy the stake starting in January 2024, but of course, it can make a bid at any time. The current agreement locks in a $27.5 billion minimum value for all of Hulu, so Comcast could receive a minimum of $9.2 billion for its stake. Current estimates, however, suggest that Hulu could be worth as much as $50 billion, so if it sells its Hulu stake, Comcast could reap a windfall.

A remote possibility (and a bad one, in our view) is that Comcast offers to buy Disney’s 66% stake. This massive purchase, of possibly as much as $20-40 billion, would saddle Comcast with new debt and a higher-risk asset. Hulu is a streaming powerhouse with over 45 million paying subscribers, but Comcast seems to be withdrawing some of its support in advance of a potential exit.

Another outcome is that Hulu remains under split ownership, but this seems untenable.

Comcast shares rose 1% for the past week and have about 21% upside to our 42 price target. The shares offer an attractive 3.1% dividend yield. BUY

Dow Inc. (DOW) is the world’s largest producer of ethylene and polyethylene, the most widely used plastics. Investors undervalue Dow’s hefty cash flows and sturdy balance sheet largely due to its uninspiring secular growth traits, its cyclicality and concern that management will squander its resources. The shares are driven by: 1) commodity plastics prices, which are often correlated with oil prices and global growth, along with competitors’ production volumes; 2) volume sold, largely driven by global economic conditions, and 3) ongoing efficiency improvements (a never-ending quest of all commodity companies). Recent concerns about a recession have sent Dow shares to well below our estimate of their fair value, even as the company’s long-term prospects and ability to maintain its dividend are attractive. Dow shares are a recommended Buy in our sister publication The Cabot Turnaround Letter.

There was no significant company-specific news in the past week.

Dow shares were flat in the past week and have 16% upside to our 60 price target (same as in the Cabot Turnaround Letter). The quarterly dividend appears readily sustainable and provides an appealing 5.4% yield. The shares trade at a modest 6.6x EV/EBITDA multiple and 11.8x EPS on recession-minded 2023 estimates. BUY

State Street Corporation (STT) State Street is the world’s largest custodian bank, with $38 trillion in assets under custody/administration. About 56% of its revenues are produced from custody, client reporting, electronic trading and full enterprise solutions services for investment managers. The balance is produced from investment management fees on ETFs, foreign exchange fees, securities financing fees and net interest income. The industry has combined into four dominant firms due to economies of scale. State Street’s shares are out of favor and unchanged since 2007 due to concerns over its anemic growth and steady pricing pressure from competitors. However, we see State Street as a solid, well-capitalized franchise that provides critical services, with a slow-growth but steady revenue and earnings stream. Our interest in STT shares is that we can buy them at an attractive valuation. We also find the dividend yield appealing.

There was no significant company-specific news in the past week.

State Street shares slipped 2% in the past week and have about 21% upside to our 94 price target. The company’s dividend (3.2% yield) is well-supported and backed by management’s strong commitment. BUY

BUY LOW OPPORTUNITIES PORTFOLIO
Allison Transmission Holdings, Inc. (ALSN) Allison Transmission is a midcap manufacturer of vehicle transmissions. While many investors view this company as a low-margin producer of car and light truck transmissions that is destined for obscurity in an electric vehicle world, Allison actually produces no car or light truck transmissions. Rather, it focuses on the school bus and Class 6-8 heavy-duty truck categories, where it holds an 80% market share. Its EBITDA margin is sharply higher than its competitors and on par with many specialty manufacturers. And, it is a leading producer and innovator in electric axles, which all electric trucks will require. The company generates considerable free cash flow and has a low-debt balance sheet. Its capable leadership team keeps its shareholders in mind, as the company has reduced its share count by 38% in the past five years.

There was no significant company-specific news in the past week.

The shares rose 3% in the past week and have 9% upside to our 48 price target. The stock pays a respectable and sustainable 1.9% dividend yield. BUY

Arcos Dorados (ARCO), which is Spanish for “golden arches,” is the world’s largest independent McDonald’s franchisee. Based in stable Uruguay and listed on the NYSE, the company produces about 72% of its revenues in Brazil, Mexico, Argentina and Chile. At our recommendation date, the shares were depressed as investors worried about the pandemic, political/social unrest, inflation and currency devaluations. However, the company has a solid brand, high recurring demand, impressive leadership (including founder/chairman who owns a 38% stake) and successful experience in navigating local conditions, along with a solid balance sheet and free cash flow.

Macro issues have a sizeable impact on the shares’ trading, including local inflation and the Brazilian currency. Since early 2020, the currency has generally stabilized in the 1.00 real = $0.20 range – a remarkably favorable trait given the sharp declines in other currencies around the world. As the company reports in U.S. dollars, any strength in the local currency would help ARCO shares.

On November 16, Arcos reported an impressive third quarter that reflects the ability of its strong leadership and brand to navigate the post-pandemic period. Revenues rose sharply (+38% in constant currency) even with high inflation/currency erosion in Argentina that dragged reported revenues down to +17%. Revenues were about 3% above estimates. Adjusted earnings of $0.23/share nearly doubled from $0.12 a year ago and were nearly double the consensus estimate of $0.12/share. Adjusted EBITDA of $103 million rose 15% from a year ago and was 13% above estimates. In local currency, Adjusted EBITDA rose 27% but was weighed down by higher food, paper, royalty fees and overhead costs.

The company’s market position remains impressive. Guest traffic and market share increased, helped by continued strong growth in front-counter sales as the pandemic effects fade, but also buoyed by increases in McDonald’s out-of-store channels like digital and delivery. With its strong results, Arcos is accelerating its pace of new store openings. Cash flow from operations rose 70%, and the balance sheet remains sturdy.

ARCO shares were flat this past week and have 16% upside to our 8.50 price target. BUY

Aviva, plc (AVVIY), based in London, is a major European company specializing in life insurance, savings and investment management products. Amanda Blanc, hired as CEO in July 2020, is revitalizing Aviva’s core U.K., Ireland and Canada operations following her divestiture of other global businesses. The company now has excess capital which it is returning to shareholders as likely hefty dividends following a sizeable share repurchase program. We expect that activist investor Cevian Capital, which holds a 5.2% stake, will keep pressuring the company to maintain shareholder-friendly actions.

On November 9, Aviva provided its third-quarter trading update, which included revenues, capital and dividends but not earnings. Overall, the company remains solidly capitalized, is producing strong operating performance and reiterated its dividend and buyback plans. Please see our weekly note following the report for more detailed commentary.

Based on management’s estimated dividend for 2023, the shares offer a generous 6.7% yield. Aviva shares rose 6% in the past week and have about 29% upside to our 14 price target. BUY

Barrick Gold (GOLD), based in Toronto, is one of the world’s largest and highest-quality gold mining companies. About 50% of its production comes from North America, with the balance from Africa/Middle East (32%) and Latin America/Asia Pacific (18%). Barrick will continue to improve its operating performance (led by its highly capable CEO), generate strong free cash flow at current gold prices, and return much of that free cash flow to investors while making minor but sensible acquisitions. Also, Barrick shares offer optionality – if the unusual economic and fiscal conditions drive up the price of gold, Barrick’s shares will rise with it. Given their attractive valuation, the shares don’t need this second (optionality) point to work – it offers extra upside. Barrick’s balance sheet has nearly zero debt net of cash. Major risks include the possibility of a decline in gold prices, production problems at its mines, a major acquisition and/or an expropriation of one or more of its mines.

On November 3, Barrick reported a reasonable quarter, but the company’s profits and cash flows are being incrementally squeezed by modestly lower gold prices, modestly weaker production volumes and higher costs. The company’s financial and operating condition remains strong, but its underlying profitability is not as healthy as we had anticipated, even excluding the weaker gold price. We are staying with the Barrick position as it remains a well-managed company, is well-positioned to benefit from an eventual rebound in gold prices, has a solid balance sheet and pays a respectable base dividend that appears sustainable. Please see our weekly note following the report for more detailed commentary.

There was no significant company-specific news in the past week.

Over the past week, commodity gold fell 2% again to $1,745/ounce. The 10-year Treasury yield ticked down to 3.78%. Investors are anticipating the “end-game” in which Treasuries peak at a roughly 5.0% yield to roughly match or slightly exceed the anticipated inflation rate in a year or so. If this scenario pans out, gold and equity prices in general should rise.

The U.S. Dollar Index, another driver of gold prices (the dollar and gold usually move in opposite directions), ticked up 1% to 107.36.

While the Fed hasn’t changed the pace of its strident rate hike campaign, the favorable inflation reports point to an eventual slowing and stopping of the rate increases. This is favorable for gold. Investing in gold-related equities is a long-term decision – investors shouldn’t allow near-term weakness to deter their resolve.

Barrick shares were flat in the past week and have about 69% upside to our 27 price target. Our resolve with Barrick shares remains undaunted through the recent sell-off. BUY

Big Lots (BIG) – Big Lots is a discount general merchandise retailer based in Columbus, Ohio, with 1,431 stores across 47 states. Its stores offer an assortment of furniture, hard and soft home goods, apparel, electronics, food and consumables as well as seasonal merchandise. Our initial case for Big Lots rested with its loyal and growing base of 22 million rewards members, its appeal to bargain-seeking customers, the relatively stable (albeit low) cash operating profit margin, its positive free cash flow, debt-free balance sheet and low share valuation.

Our thesis was deeply rattled by the company’s dismal first-quarter results although second-quarter results, while dismal, were better than the market’s dour consensus. The company needs to offload its still-bloated inventory at sharp discounts while also now loading the company with what is probably permanent debt.

We are retaining our HOLD rating for now: investor expectations are sufficiently depressed to provide some downside cushion, while management should be able to extract itself from the worst of the inventory problem over the next few quarters. Nevertheless, the Big Lots investment is now high-risk due to the new debt balance, the lost value from the inventory glut and the likelihood of a suspension of the dividend.

Favorable reports from retailers like Home Depot and Walmart are lifting Big Lots’ shares. We’re happy to see the increase but view it as mostly pure speculation. Big Lots’ fate will rest on its own ability to work down its excessive inventory at respectable prices and then return to reasonably healthy profits in 2023.

Big Lots reports earnings on December 1.

Big Lots shares fell 8% this past week and have 89% upside to our 35 price target. The shares offer a 6.5% dividend yield, although, as noted, investors should not rely on this dividend being sustained.

We reiterate our view that Big Lots shareholders who are not willing or able to sustain further losses in the shares should sell now. There is no reasonably definable floor to a stock like Big Lots when fundamentals and valuation are ignored while investors reduce their risk exposure. HOLD

Citigroup (C) Citi is one of the world’s largest banks, with over $2.4 trillion in assets. The bank’s weak compliance and risk-management culture led to Citi’s disastrous and humiliating experience in the 2009 global financial crisis, which required an enormous government bailout. The successor CEO, Michael Corbat, navigated the bank through the post-crisis period to a position of reasonable stability. Unfinished, though, is the project to restore Citi to a highly profitable banking company, which is the task of new CEO Jane Fraser.

There was no significant company-specific news in the past week.

This past week, the yield spread between the 90-day T-bill and the 10-year Treasury bond, which approximates the drivers behind Citi’s net interest margin, widened to a negative 50 basis points (100 basis points in one percentage point), steepening the inversion of the yield curve over this horizon.

Citi shares trade at 61% of tangible book value and 7.3x estimated 2023 earnings. The remarkably low valuations assume an unrealistically dim future for Citi.

Citi shares rose 1% in the past week and have about 71% upside to our 85 price target. Citigroup investors enjoy a 4.1% dividend yield. We anticipate that the bank is done with share buybacks until there is more clarity on the economic and capital market outlook, which could readily be a year or more away. BUY

Gates Industrial Corp, plc (GTES) – Gates is a specialized producer of industrial drive belts and tubing. While this niche might sound unimpressive, Gates has become a leading global manufacturer by producing premium and innovative products. Its customers depend on heavy-duty vehicles, robots, production and warehouse machines and other equipment to operate without fail, so the belts and hydraulic tubing that power these must be exceptionally reliable. Few buyers would balk at a reasonable price premium on a small-priced part from Gates if it means their million-dollar equipment keeps running. Even in automobiles, which comprise roughly 43% of its revenues, Gates’ belts are nearly industry-standard for their reliability and value. Helping provide revenue stability, over 60% of its sales are for replacements. Gates is well-positioned to prosper in an electric vehicle world, as its average content per EV, which require water pumps and other thermal management components for the battery and inverters, is likely to be considerably higher than its average content per gas-powered vehicle.

The company produces wide EBITDA margins, has a reasonable debt balance and generates considerable free cash flow. The management is high-quality. In 2014, private equity firm Blackstone acquired Gates and significantly improved its product line-up and quality, operating efficiency, culture and financial performance. Gates completed its IPO in 2018, with Blackstone retaining a 63% stake today.

On November 4, Gates reported a reasonable quarter but reduced its full-year guidance as currency and supply chain headwinds aren’t relenting as fast as the company had hoped. The company continues to improve its execution and trim its cost structure. Its future looks bright once Gates passes through the currently choppy macro environment. Debt remains modestly elevated, but this is not an issue given Gates’ management quality, business franchise and healthy-enough free cash flow. Please see our weekly note following the report for more detailed commentary.

There was no significant company-specific news in the past week.

At the current price and based on estimated 2022 results, the shares offer an 11% free cash flow yield (free cash flow divided by market cap). This is a sizeable discount to what the company is worth. GTES shares fell 2% in the past week and have about 20% upside to our 14 price target. BUY

Molson Coors Beverage Company (TAP) is one of the world’s largest beverage companies, producing the highly recognized Coors, Molson, Miller and Blue Moon brands as well as numerous local, craft and specialty beers. About two-thirds of its revenues come from the United States, where it holds a 24% market share. Investors worry about Molson Coors’ lack of revenue growth due to its relatively limited offerings of fast-growing hard seltzers and other trendier beverages. Our thesis for this company is straightforward – a reasonably stable company whose shares sell at an overly discounted price. Its revenues are resilient, it produces generous cash flow and is reducing its debt. A new CEO is helping improve its operating efficiency and expand carefully into more growthier products. The company recently reinstated its dividend.

There was no significant company-specific news in the past week.

TAP shares rose 5% in the past week and have about 26% upside to our 69 price target. The stock remains cheap, particularly on an EV/EBITDA basis, or enterprise value/cash operating profits, where it trades at 8.5x estimated 2023 results, still among the lowest valuations in the consumer staples group and below other brewing companies. The 2.8% dividend yield only adds to the appeal. BUY

Organon & Company (OGN), a spin-off from Merck, specializes in patented women’s healthcare products and biosimilars, and also has a portfolio of mostly off-patent treatments. It may eventually divest its Established Brands segment. The management and board appear capable as they work to boost internal growth augmented by modest-sized acquisitions. The company produces robust free cash flow, has modestly elevated debt and pays a reasonable dividend.

On November 3, the company reported a weak third quarter with flattish revenues but a narrower profit margin. While the results were ahead of estimates, it reflects a company that is seeing a slower erosion relative to expectations, but a company that is eroding nonetheless. Organon raised its EBITDA margin guidance for the full year, but its other guidance remained largely unchanged. Organon’s net debt remains unchanged from the spin-off date, and we are wondering why Organon’s financial team can’t manage to convert more profits into cash. Please see our weekly note following the report for more detailed commentary.

There was no significant company-specific news in the past week.

OGN shares were flat in the past week and have about 84% upside to our 46 price target (using the same target as the Cabot Turnaround Letter). The shares offer an attractive 4.5% dividend yield. BUY

Sensata Technologies (ST) is a $3.8 billion (revenues) producer of nearly 47,000 highly engineered sensors used by automotive (60% of revenues), heavy vehicle, industrial and aerospace customers. About two-thirds of its revenues are generated outside of the United States, with China producing about 21%. Investors undervalue Sensata’s durable franchise. Its sensors are typically critical components that generally produce high profit margins. As the sensors’ reliability is vital to safety and performance, customers are reluctant to switch to another supplier that may have lower prices but also lower or unproven quality. Sensata has an arguably under-leveraged balance sheet and generates healthy free cash flow. The relatively new CEO will likely continue to expand the company’s growth potential through acquisitions. Electric vehicles are an opportunity as they expand Sensata’s reachable market.

There was no significant company-specific news in the past week.

ST shares fell 1% in the past week and have about 68% upside to our 75 price target. Our price target looks optimistic in light of the broad market sell-off, but we will keep it for now, even as it may take longer for the shares to reach it. BUY

Disclosure:The chief analyst of the Cabot Undervalued Stocks Advisor personally holds shares of every recommended security, except for “New Buy” recommendations. The chief analyst may purchase or sell recommended securities but not before the fourth day after any changes in recommendation ratings has been emailed to subscribers. “New Buy” recommendations will be purchased by the chief analyst as soon as practical following the fourth day after the newsletter issue has been emailed to subscribe

Growth/Income Portfolio
Stock (Symbol)Date AddedPrice Added11/22/22Capital Gain/LossCurrent Dividend YieldPrice TargetRating
Cisco Systems (CSCO)11/18/2041.3248.3817.10%5.80%66Buy
Comcast Corp (CMCSA)10/26/2231.535.111.40%3.40%42Buy
Dow Inc (DOW) *4/1/1953.551.57-3.60%5.40%60Buy
State Street Corp (STT)8/17/2273.9676.593.60%3.30%94Buy
Buy Low Opportunities Portfolio
Stock (Symbol)Date AddedPrice Added11/22/22Capital Gain/LossCurrent Dividend YieldPrice TargetRating
Allison Transmission Hldgs (ALSN)2/22/2239.9944.110.30%1.90%48Buy
Arcos Dorados (ARCO)4/28/215.417.2133.30%2.20%8.5Buy
Aviva (AVVIY)3/3/2110.7510.830.70%5.20%14Buy
Barrick Gold (GOLD)3/17/2121.1316.01-24.20%2.50%27Buy
BigLots (BIG)4/12/2235.2419.2-45.50%6.30%35Hold
Citigroup (C)11/23/2168.149.33-27.60%4.10%85Buy
Gates Industrial Corp (GTES)8/31/2210.7111.749.60%0.00%14Buy
Molson Coors (TAP)8/5/2036.5354.850.00%2.80%69Buy
Organon (OGN)6/7/2131.4224.83-21.00%4.50%46Buy
Sensata Technologies (ST)2/17/2158.5745.09-23.00%1.00%75Buy

*Note: DOW price is based on April 1, 2019 closing price following spin-off from DWDP.

Buy – This stock is worth buying.
Strong Buy – This stock offers an unusually favorable risk/reward trade-off, often one that has been rated as a Buy yet the market has sold aggressively for temporary reasons. We recommend adding to existing positions.
Hold – The shares are worth keeping but the risk/return trade-off is not favorable enough for more buying nor unfavorable enough to warrant selling.
Sell – This stock is approaching or has reached our price target, its value has become permanently impaired or changes in its risk or other traits warrant a sale.

Note for stock table: For stocks rated Sell, the current price is the sell date price.

CUSA Valuation and Earnings
Growth/Income Portfolio
Current
price
2023 EPS
Estimate
2024 EPS
Estimate
Change in
2023 Estimate
Change in
2024 Estimate
P/E 2023P/E 2024
CSCO 48.12 3.55 3.830.5%0.7% 13.6 12.6
CMCSA 34.76 3.78 4.260.0%0.0% 9.2 8.2
DOW 51.74 4.39 5.410.0%0.0% 11.8 9.6
STT 77.66 8.31 9.280.2%0.3% 9.3 8.4
Buy Low Opportunities Portfolio
Current
price
2023 EPS
Estimate
2024 EPS
Estimate
Change in
2023 Estimate
Change in
2024 Estimate
P/E 2023P/E 2023
ALSN 44.19 5.85 6.560.0%0.0% 7.5 6.7
ARCO 7.33 0.59 0.729.5%3.9% 12.4 10.2
AVVIY 10.83 0.55 0.630.2%0.5% 19.6 17.2
GOLD 15.96 0.76 1.01-1.0%-1.0% 21.0 15.8
BIG 18.50 0.70 4.040.0%0.0% 26.4 4.6
C 49.64 6.82 7.660.0%-0.8% 7.3 6.5
GTES 11.70 1.17 1.310.0%0.0% 10.0 8.9
TAP 54.73 4.12 4.360.0%0.0% 13.3 12.5
OGN 24.97 4.84 5.31-0.2%1.6% 5.2 4.7
ST 44.64 3.69 4.33-0.1%0.0% 12.1 10.3

Current price is yesterday’s mid-day price.
CSCO: Estimates are for fiscal years ending in July of 2023 and 2024

Bruce Kaser has more than 25 years of value investing experience in managing institutional portfolios, mutual funds and private client accounts. He has led two successful investment platform turnarounds, co-founded an investment management firm, and was principal of a $3 billion (AUM) employee-owned investment management company.