October Was Quite A Surpise!
So far now in the market the easy money has been made for a while. We need to go back to being patient and giving our stocks some time to work as long as they don't go south based on a fundamental reason.
On this blog I discuss the state of the current stock market, my observations and opinions of and explanations of stocks that I think are good "relative value" investments. Relative value are stocks that have lower valuations and lower risk than competitors in the same sector or market that still offer as much or more upside. For a Free Trial Of Investment Newsletter Service See Our Website at: www.ValueStockTips.com
Federated Investors (FII) is a asset management firm with over $210 billion in assets under management. They have about 50% of assets under management in stocks and bonds and about 50% in money market funds. That's is why they are given a lower valuation relative to its peers because money market funds are less lucrative. However the valuation gap with this stock is so large relative to its peers that it is a lower-risk stock with great upside. It trades at about 19.5 times earnings versus its peers that trade at 24-27 PE for its competitors. The stocks trades at 3.75 times enterprise value divided by revenue versus 5-6 for competitors. The stock also has a 2.05% dividend and will go ex-dividend around Nov. 4th. If this company's valuation remains this low, it could be an attractive private equity takeover worth about $42 and on its fundamentals alone is worth about $39.