Some Simple Math on Why Stocks Are Falling
Stocks, of course, continue to tumble. Investors’ plates are overflowing with fears ranging from inflation to trade/military wars to financial collapse to the upcoming midterm elections in the United States. While it can be daunting to separate out how these affect stocks, we use some simple math (by far our favorite kind of math) below in an attempt to isolate what is dragging down share prices. Earnings and interest rates have a powerful influence on stock prices, and our work shows that nearly all of the market’s decline this year is driven by these two components.
Interest rates: the Fed and other central banks appear to be serious about raising interest rates to turn back elevated inflation. Interest rates are a key input into how every financial asset is valued, so when interest rates rise, the value of stocks, bonds and other financial assets fall. Using very rough numbers, when the discount rate on a 10-year bond(1) rises from 1% to 4%, the value of that bond falls about 17%. This kind of bond might be roughly equivalent to a typical stock in the S&P500 index. So, roughly speaking, most of the 24% year-to-date decline in stocks could be attributed to simply the change in interest rates.
Earnings: Estimates for 2023 earnings for the S&P 500 companies, based on Factset’s Earnings Insight, have slipped about 5% from their peak this past April. The lower estimates incorporate a possible recession, supply chain issues, cost inflation and other problems that would weigh on earnings. So, using straight-forward math, about 5% of the decline in the market is driven by lower earnings.
So, very roughly speaking, combining the 17% hit from rising interest rates and the 5% hit from lower earnings would produce about a 22% decline in stock prices year-to-date, fairly close to the 24% actual decline.
The other 2% decline in stock prices could be attributed to everything else.
What is the outlook for interest rates and earnings from here? Everyone is guessing on the Fed’s policy, but no one knows for sure, not even the Fed itself. We are eyeing a 4.5% to 5.0% peak rate on the U.S. ten-year Treasury but that is only a marker to help us gauge current conditions. In addition to the unknown of the eventual peak yield, the timing of reaching that yield, how long rates stay there, and if/when/how fast they come back down are other unknowns. Our marker may become worthless as soon as the Consumer Price Index is reported on Thursday morning (October 13).
Earnings season is just starting. Investors are fearful that the results and outlooks will be bad for nearly all companies. We’ll get more color on this over the next few weeks. Estimates for 2023 earnings have slid about 5% from their peak, as noted earlier, yet remain about 15% above their 2021 level of two years ago.
In a true recession, earnings could readily backtrack all the way to their 2019 level of about $163 for the S&P 500. This would be a painful 32% plummet from the current estimate for 2023 earnings of about $241. But the market would likely, and rightfully, look through this trough to a sharp bounce back and then resume the 6% or so annual earnings growth pace of the past 50 or more years.
The point of all of this playing with numbers isn’t to help us guess the market’s direction. Rather, it is to help us better understand what is going on in a world where little else seems to make much sense.
- We assume a 2% coupon as well.
Share prices in the table reflect Tuesday (October 11) closing prices. Please note that prices in the discussion below are based on mid-day October 11 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
Merck (MRK) – Moving from Hold to Sell.
Last Week’s Portfolio Changes
None
Upcoming Earnings Reports
Citigroup (C) – Friday, October 14
State Street Corp (STT) – Monday, October 17
Dow (DOW) – Thursday, October 20
Sensata Technologies (ST) – Tuesday, October 25
Allison Transmission Holdings (ALSN) – Wednesday, October 26
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.
There was no significant company-specific news in the past week.
CSCO shares have tumbled 37% from their 2021 high and now trade at the same price as in early 2018. Cisco holds a key role in the basic plumbing of technology systems. Near-term revenues and profits may be sloppy, but on a secular basis the company’s positioning seems at worst stable. Given its ability to adapt, it will likely return to revenue and earnings growth, albeit not at the rocket-like pace of newer tech companies riding some emerging trend. Cisco is essentially a dull company that grinds forward.
Yet, Cisco’s balance sheet is cash-heavy with $9 billion more cash than debt, it generates strong free cash flow which readily covers its dividend, and it is well managed. In three years’ time (admittedly a lifetime in today’s trading-oriented world), investors will likely be quite pleased with the shares’ total return. While waiting, investors receive an attractive dividend whose yield approximates that of the 10-year U.S. Treasury bond. Looked at another way, investors can earn a Treasury-like coupon yet hold an option for future growth in principal.
The shares fell 4% in the past week and have 66% upside to our 66 price target. The valuation is attractive at 7.9x EV/EBITDA and 11.3x earnings. BUY
Dow Inc. (DOW) merged with DuPont to create DowDuPont, then split into three companies in 2019 based on product type. The new 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). We see Dow as having more years of strong profits before capacity increases signal a cyclical peak, and expect the company to continue its strong dividend, reduce its pension and debt obligations, repurchase shares slowly and restrain its capital spending. 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 fell 5% in the past week and have 35% upside to our newly adjusted 60 price target (same as in The Cabot Turnaround Letter). The quarterly dividend appears readily sustainable and provides an appealing 6.3% yield. The shares trade at a low 5.4x EV/EBITDA multiple and 8.1x EPS on recession-like 2023 estimates. BUY
Merck (MRK) shares are undervalued as investors worry about Keytruda, a blockbuster oncology treatment (about 30% of revenues) which faces generic competition in late 2028. Also, its Januvia diabetes treatment may see generic competition soon, and like all pharmaceuticals Merck it is at risk from government price controls. Yet, Keytruda is an impressive franchise that is growing at a 20% rate and will produce solid cash flow for nearly six more years, providing the company with considerable time to replace the potential revenue loss. Merck’s new CEO, previously the CFO, is accelerating Merck’s acquisition program, which adds return potential and risks to the story. The company is highly profitable and has a solid balance sheet. It spun off its Organon business in June 2021 and we think it will divest its animal health segment sometime in the next five years.
Merck’s acquisition last year of Acceleron Pharmaceutical is showing promise as its sotatercept treatment for heart disease met Merck’s goals in a late-stage trial. Merck’s shares jumped on Monday following the report.
Merck shares rose 3% in the past week and have 8% upside to our 99 price target. They also have only about 3% upside to their all-time high. This is close enough to our price target to warrant a move to Sell. While there certainly could be upside in the stock from here, and there is nothing wrong with the company, its strategy, financial condition or outlook, we would rather devote our attention to stocks that are more deeply undervalued, particularly in this market. SELL
State Street Corporation (STT) – Based in Boston, 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 back-, middle- and front-office services including custody, client reporting, electronic trading and full enterprise solutions 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.
State Street reports earnings on Monday, October 17, with a consensus earnings estimate of $1.78/share.
State Street shares fell 6% in the past week and have about 53% upside to our 94 price target. The company’s dividend (4.1% 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 35% 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. Another indicator of its advanced capabilities: Allison was selected to help design the U.S. Army’s next-generation, electric-powered vehicle. 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.
Allison shares were unchanged in the past week and have 33% upside to our 48 price target. The stock pays a respectable and sustainable 2.3% 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. The shares are depressed as investors worry 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.
The results of the upcoming October 30 presidential election run-off will likely drive the broad Brazilian stock market and thus Arco’s shares.
There was no significant company-specific news in the past week.
ARCO shares slipped 5% this past week and have 14% 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.
A great example of hidden risks in financial markets is the liability-driven investing, or LDI, strategies that started becoming popular in the British pension system over a decade ago. Pension plans, of course, are pools of assets that are accumulated to fund current and future payments to a group of retirees. Managers of these plans work to make sure there are adequate assets to make all the payments, but this is a challenge as many plans haven’t received enough inflows (contributions) over the years. Liability-driven investing is a strategy that helps plans boost their returns to better match their obligations.
Unfortunately, these plans use complicated swaps and other derivatives, as well as leverage. As interest rates surged, the plans’ bond investments and many of its derivatives quickly lost value, which threatened margin calls, or demands by counterparties for more cash collateral. Pensions couldn’t make these payments which thus threatened the United Kingdom financial markets with a collapse. The British government has had to reverse course and support bond prices to prevent the collapse.
As a British insurer, Aviva is exposed to many of the same risks as the pension plans. We believe, however, that their capital levels are much stronger and their overall risks much lower than pensions, so they have a minimal chance of collapse. Nevertheless, investors are selling Aviva shares on this fear.
We look forward to an update on Aviva’s capital position and outlook when it reports interim results in early November.
Based on management’s estimated dividend for 2023 (which remains credible but is subject to a smaller increase than the current guidance for a 48% boost), the shares offer a generous 9.7% yield. Based on this year’s actual dividend, the shares offer an attractive 6.6% dividend yield.
Aviva shares fell 8% in the past week. The shares have about 64% 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 new and 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.
There was no significant company-specific news in the past week.
Over the past week, commodity gold fell about 2% to $1,683/ounce. The 10-year Treasury yield jumped to 3.90%. Investors are starting to anticipate the “end-game” when Treasuries will peak at a roughly 4.5% to 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), rose 2% to 112.94, supported by steadily rising interest rates and the safe-haven traits of the United States.
Any wavering by the Fed in its now-strident rate hike campaign would also likely result in gold rebounding sharply. Until this happens, gold will probably remain out of favor. Investing in gold-related equities is a long-term decision – investors shouldn’t allow near-term weakness to deter their resolve.
Barrick shares slipped 4% in the past week and have about 75% 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.
There was no significant company-specific news in the past week.
Big Lots shares rose 2% this past week. 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.
The stock has 90% 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. 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.
Citi reports earnings on Friday, October 14, with the consensus earnings estimate of $1.50/share.
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, jumped back to 0.51% on rising long-term interest rates. The current spread is still near the low end of its range over the past 40 years, with a 2.00 percentage point spread being a rough average. If spreads were to return to a two-point spread, bank profits would likely surge, assuming that other sources of profits including credit quality remained unchanged.
Citi shares trade at 52% of tangible book value and 5.8x estimated 2023 earnings. The remarkably low valuations assume an unrealistically dim future for Citi.
Citi shares fell 7% in the past week and have about 105% upside to our 85 price target. Citigroup investors enjoy a 4.9% 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 lineup and quality, operating efficiency, culture and financial performance. Gates completed its IPO in 2018, with Blackstone retaining a 63% stake today.
There was no significant company-specific news in the past week.
GTES shares fell 7% in the past week and have about 44% 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 fell 3% in the past week and have about 44% 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 7.9x estimated 2022 results, still among the lowest valuations in the consumer staples group and below other brewing companies. The 3.2% dividend yield only adds to the appeal. BUY
Organon & Company (OGN) was recently spun off from Merck. It specializes in patented women’s healthcare products and biosimilars, and also has a portfolio of mostly off-patent treatments. Organon will produce better internal growth with some boost through smart yet modest-sized acquisitions. It may eventually divest its Established Brands segment. The management and board appear capable, the company produces robust free cash flow, has modestly elevated debt and will pay a reasonable dividend. Investors have ignored the company, but we believe that Organon will produce at least stable and large free cash flows with a reasonable potential for growth. At our initial recommendation, the stock traded at a highly attractive 4x earnings.
There was no significant company-specific news in the past week.
OGN shares fell 8% in the past week, despite earnings estimates ticking up for this year (estimates for 2023 ticked down). Investors have basically given up on OGN shares.
The shares have about 94% upside to our 46 price target (using the same target as the Cabot Turnaround Letter). The shares continue to trade at a remarkably low valuation while offering an attractive 4.7% 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 safely 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.
Overall, the Sensata investment remains sharply underwater as its revenue growth is challenged by new economic cycle pressures on top of the post-pandemic supply chain issues. The company is well-positioned for the post-recession, electric vehicle environment, but investors will have to wait for perhaps a year for that to arrive. The shares are still worth holding onto given their now-low valuation and ability to financially endure the downturn.
There was no significant company-specific news in the past week.
ST shares fell 2% in the past week and have about 91% 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 subscribers.
| Growth/Income Portfolio | |||||||
| Stock (Symbol) | Date Added | Price Added | 10/11/22 | Capital Gain/Loss | Current Dividend Yield | Price Target | Rating |
| Cisco Systems (CSCO) | 11-18-20 | 41.32 | 39.58 | -4.2% | 3.8% | 66.00 | Buy |
| Dow Inc (DOW) * | 04-01-19 | 53.50 | 43.95 | -17.9% | 6.4% | 60.00 | Buy |
| Merck (MRK) | 12-9-20 | 83.47 | 91.05 | 9.1% | 3.0% | 99.00 | Sell |
| State Street Corp (STT) | 8-17-22 | 73.96 | 60.81 | -17.8% | 4.1% | 94.00 | Buy |
| Buy Low Opportunities Portfolio | |||||||
| Stock (Symbol) | Date Added | Price Added | 10/11/22 | Capital Gain/Loss | Current Dividend Yield | Price Target | Rating |
| Allison Transmission Hldgs (ALSN) | 02-22-22 | 39.99 | 35.75 | -10.6% | 2.3% | 48.00 | Buy |
| Arcos Dorados (ARCO) | 04-28-21 | 5.41 | 7.25 | 34.0% | 2.2% | 8.50 | Buy |
| Aviva (AVVIY) | 03-03-21 | 10.75 | 8.32 | -22.6% | 6.7% | 14.00 | Buy |
| Barrick Gold (GOLD) | 03-17-21 | 21.13 | 15.01 | -29.0% | 2.7% | 27.00 | Buy |
| BigLots (BIG) | 04-12-22 | 35.24 | 17.72 | -49.7% | 6.8% | 35.00 | Hold |
| Citigroup (C) | 11-23-21 | 68.10 | 40.45 | -40.6% | 5.0% | 85.00 | Buy |
| Gates Industrial Corp (GTES) | 08-31-22 | 10.71 | 9.70 | -9.4% | 0.0% | 14.00 | Buy |
| Molson Coors (TAP) | 08-05-20 | 36.53 | 47.75 | 30.7% | 3.2% | 69.00 | Buy |
| Organon (OGN) | 06-07-21 | 31.42 | 23.50 | -25.2% | 4.8% | 46.00 | Buy |
| Sensata Technologies (ST) | 02-17-21 | 58.57 | 38.18 | -34.8% | 1.2% | 75.00 | Buy |
*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 | Current 2022 EPS Estimate | Current 2023 EPS Estimate | Change in 2022 Estimate | Change in 2023 Estimate | P/E 2022 | P/E 2023 | |
| CSCO | 40.02 | 3.53 | 3.81 | 0.0% | 0.0% | 11.3 | 10.5 |
| DOW | 44.38 | 7.05 | 5.45 | -3.6% | -6.0% | 6.3 | 8.1 |
| MRK | 91.27 | 7.38 | 7.50 | 0.0% | 0.5% | 12.4 | 12.2 |
| STT | 61.58 | 7.06 | 8.35 | -0.4% | -1.2% | 8.7 | 7.4 |
| Buy Low Opportunities Portfolio | |||||||
| Current price | Current 2022 EPS Estimate | Current 2023 EPS Estimate | Change in 2022 Estimate | Change in 2023 Estimate | P/E 2022 | P/E 2023 | |
| ALSN | 36.03 | 5.80 | 6.61 | 0.9% | -1.0% | 6.2 | 5.5 |
| ARCO | 7.47 | 0.45 | 0.53 | 0.0% | 0.0% | 16.6 | 14.1 |
| AVVIY | 8.52 | 1.03 | 1.28 | -2.2% | 0.0% | 8.3 | 6.7 |
| GOLD | 15.46 | 0.94 | 0.96 | -0.8% | -1.5% | 16.4 | 16.0 |
| BIG | 18.38 | (4.55) | 0.72 | 0.0% | 0.0% | (4.0) | 25.5 |
| C | 41.39 | 7.21 | 7.15 | -1.2% | -0.6% | 5.7 | 5.8 |
| GTES | 9.73 | 1.20 | 1.27 | 0.0% | -2.3% | 8.1 | 7.7 |
| TAP | 47.91 | 3.94 | 4.19 | -0.3% | -0.5% | 12.2 | 11.4 |
| OGN | 23.72 | 5.04 | 5.39 | 0.8% | -0.9% | 4.7 | 4.4 |
| ST | 39.27 | 3.35 | 3.90 | 0.0% | -0.5% | 11.7 | 10.1 |
Current price is yesterday’s mid-day price.
CSCO: Estimates are for fiscal years ending in July of 2023 and 2024