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Category: Dow Jones, Nasdaq and S&P500
Date: 4 July 2020 We take a look at the performance of the Dow Jones, Nasdaq and S&P500 for the week ending 3 July 2020. The week was dominated by a sharp increase in coronavirus cases in the United States with various states reaching new all time high daily infection rates. States such as Florida and Texas being particularly hard hit. It was also a shortened trading week due to 4th of July holidays so markets were closed on Friday 3 July. Even with all the Covid-19 fears going around the major market indices all ended the shortened trading week sharply in the green.
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Warren Buffett the world's best known investor said, be greedy when others are fearful, be fearful when others are greedy. Basically sell offs providing buying opportunities for savvy investors. Note buying opportunities. Not selling opportunities."
Dow Jones, Nasdaq and S&P 500 all recorded decent increases for the week ending 3 July 2020
The image below shows the returns of the Dow Jones (DJIA), Nasdaq and S&P 500 over the last week (29 June 2020 to 3 July 2020). As the graphic shows all three major US market indices recorded moderate increases for the week ending 19 June 2020
Below the returns of the main market indices over the last week, 29 June 2020 to 3 July 2020 (sorted from best performer to worst performer)
We are surprised at the current strength of the financial markets considering the fact that there is an alarming spike in the number of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. We cannot see why markets are so positive at this point in time. We do expect that another sharp sell off is in the market's short term future.
- Nasdaq: 4.56%
- S&P 500: 4.02%
- Dow Jones: 3.25%
We are surprised at the current strength of the financial markets considering the fact that there is an alarming spike in the number of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. We cannot see why markets are so positive at this point in time. We do expect that another sharp sell off is in the market's short term future.
So lets take a look at some of the major market events during the last week
2 July 2020:
Dow Jones Updates: The Dow Jones ended the day, 2 July 2020 up by 0.36%
(13:08): The Dow Jones is currently trading up by 0.93%
(08:38 ET): Dow Jones futures are currently up by 1.59%
(06:38 ET): Dow Jones futures are currently up by 0.82%
(05:00 ET): The Dow Jones futures are currently up strongly by 1.06%
(02:01 ET): The Dow Jones futures are currently down by 0.11%
Website updates:
We covered the latest earnings report of Constellation Brands, owner of Corona and Modelo Beers.
So what is Constellation Brands (NYSE: STZ) stock worth based on the release of their latest earnings report and fiscal guidance provide? Based on their earnings report and the guidance provided our valuation model provides a target price (full value price) for Constellation Brands of $203.20 a stock (down slightly from our 4th quarter 2020 earnings report valuation of Constellation Brands). We therefore believe that the stock is undervalued at its price of $185.88
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $203.20. So a good entry point into Constellation Brands stock would be at $182.90 or below.
We expect the stock of Constellation brands to kick up from current levels to levels closer to our target price in coming weeks and months.
Read the full article here
1 July 2020:
Dow Jones Updates: The Dow Jones ended the day, 1 July 2020 down by -0.3%
(10:17 ET): The Dow Jones Industrial Average is training in the green right now, with the DJIA being up by 0.5%
(08:48 ET): Dow Jones Industrial Average futures are currently down by -0.46% so it looks like it will open in negative territory later today
(08:07 ET): The Dow Jones futures are currently down by -0.01%
Website updates:
Yesterday we did a battle of the sit down restaurant stocks and compared the stock of Cracker Barrel (CBRL) to that of Darden Restaurants. Below a short extract of that article
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following for both stocks:
Price/Stockholders equity per share for Cracker Barrel (CBRL) :6.62
Price/Stockholders equity per share for Darden Restaurants: 3.96
Based on this metric Darden offers far more value than Cracker Barrel. Most firms tend to trade at a ratio of between 2 and 4 times. Cracker Barrel is trading at well above the expected range and Darden is trading at just inside the expected range. Next up cash as percentage of stock price. Cash per share makes up just over 14% of Cracker Barrel's stock price while Darden's cash makes up 6.2% of their stock price. Total cash as percentage of total assets is as follows. Cash makes up 16.2% of Cracker Barrels' total assets while Darden's cash makes up around 7% of their total assets. So it does look like Cracker Barrel is better placed to ride out difficult times as is currently being experienced during Covid-19
We therefore believe at their respective prices, the stock of Cracker Barrel offers a better long term investment value than that of Darden Restaurants. Therefore in the battle of the sit down restaurants if we have to pick between Cracker Barrel and Darden Restaurants, we rate Cracker Barrel as the Winner.
Read the full article here
30 June 2020 :
Dow Jones Updates: The Dow Jones ended the day, 30 June 2020 up by 0.85%
(13:15 ET): The Down Jones is currently down by -0.2%
(10:39 ET): The Dow Jones is currently down by -0.19%
(4:37 ET): Dow Jones Industrial Average futures are up by 0.19% indicating that the Dow will likely open on a slightly positive note
Website updates:
So if one had to buy one of these airlines stock right now, which one would it be? Does United Airlines offer the most value as its stock has fallen further than Delta and Southwest over the last 3 years? Or is there an underlying reason why United has underperformed compared to Southwest and Delta? One of our first comparison metrics is the Price to stockholders equity per share ratio. What is the stockholders equity per share? Well if a firm decides to sell all their assets, pay all liabilities and distribute the rest to stockholders that is stockholder equity per share. So expressing that as a ratio to the price one gets a feel of how over/undervalued a stock is. Below the Price to Stockholder Equity per share ratio of the three airlines:
So Southwest Airlines is trading at almost double their stockholders equity per share, Delta about 30% above their stockholders equity per share and United Airlines 7% below their stockholders equity per share. So based on this one would say that United is the cheapest and Southwest the most expensive. Looking at price to earnings ratios wont help much now as they are all current loss making and not generating any earnings to calculate a price to earnings ratio. Cash on the balance sheet is another indication of value and how easily the company can ride out the current tough business environment.
Looking at the cash per share and the percentage it makes up of its current stock price
So again United Airlines comes out on top when looking at the cash per share expressed as a percentage of their stock price. While Southwest has far less cash per share on their balance sheet compared to the other two airlines it is a far smaller airline with a daily cash burn rate that is a lot lower than the two larger airlines. So from a balance sheet perspective they are far better placed to deal with the impact of the Covid-19 pandemic on the air travel industry. And Southwest is far more nibble due to their size to change their operations and business strategy due to the Covid-19 pandemic and its for these reasons we pick Southwest Airlines (LUV) as our Winner in the airline fly off battle
Read the full article here
29 June 2020:
Dow Jones Updates: The Dow Jones ended the day, 29 June 2020 up by 2.32%
(13:10 ET); Dow Jones Industrial Average is currently trading up by 1.79%
(10:41 ET): Dow Jones Industrial Average opened in the green and is currently up a strong 1.62%
(4:05 ET): Dow Jones Industrial Average futures are up by 0.42% indicating that the Dow will likely open on a slightly positive note
Website updates:
In our continued stock battles we pitted two brewers against one another in Constellation Brands (owner of Corona Beer) and Boston Beer Company (owner of Samuel Adams and Dogfish Head). Below an extract from that article.
One of our key metrics is the Price to stockholders equity per share ratio. When looking at this we find the following for both stocks:
Price/Stockholders equity per share for Boston Beer Company (SAM) : 9.1
Price/Stockholders equity per share for Constellation Brands (STZ): 2.22
Based on this metric Constellation Brands offers far more value than Boston Beer Company. Most firms tend to trade at a ratio of between 2 and 4 times. Boston is trading at well above the expected range and Constellation Brands is trading well within the expected range. The PE ratio of Constellation Brands is 22.1 compared to Boston Beer Company's PE ratio of 61.6
We therefore believe at their respective prices, the stock of Constellation Brands offers far better long term investment value than that of Boston Beer Company. Especially considering the strong stock performance of Boston Beer Company over the last three years. We do feel that Boston Beer Company's stock has run far ahead of its future earnings potential.
Therefore in the battle of the brewers if we have to pick we pick Constellation Brands as our Winner
Read the full article here
Dow Jones Updates: The Dow Jones ended the day, 2 July 2020 up by 0.36%
(13:08): The Dow Jones is currently trading up by 0.93%
(08:38 ET): Dow Jones futures are currently up by 1.59%
(06:38 ET): Dow Jones futures are currently up by 0.82%
(05:00 ET): The Dow Jones futures are currently up strongly by 1.06%
(02:01 ET): The Dow Jones futures are currently down by 0.11%
Website updates:
We covered the latest earnings report of Constellation Brands, owner of Corona and Modelo Beers.
So what is Constellation Brands (NYSE: STZ) stock worth based on the release of their latest earnings report and fiscal guidance provide? Based on their earnings report and the guidance provided our valuation model provides a target price (full value price) for Constellation Brands of $203.20 a stock (down slightly from our 4th quarter 2020 earnings report valuation of Constellation Brands). We therefore believe that the stock is undervalued at its price of $185.88
We usually suggest long term investors look to enter a stock at least 10% below our target (full value) price which in this case is $203.20. So a good entry point into Constellation Brands stock would be at $182.90 or below.
We expect the stock of Constellation brands to kick up from current levels to levels closer to our target price in coming weeks and months.
Read the full article here
1 July 2020:
Dow Jones Updates: The Dow Jones ended the day, 1 July 2020 down by -0.3%
(10:17 ET): The Dow Jones Industrial Average is training in the green right now, with the DJIA being up by 0.5%
(08:48 ET): Dow Jones Industrial Average futures are currently down by -0.46% so it looks like it will open in negative territory later today
(08:07 ET): The Dow Jones futures are currently down by -0.01%
Website updates:
Yesterday we did a battle of the sit down restaurant stocks and compared the stock of Cracker Barrel (CBRL) to that of Darden Restaurants. Below a short extract of that article
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following for both stocks:
Price/Stockholders equity per share for Cracker Barrel (CBRL) :6.62
Price/Stockholders equity per share for Darden Restaurants: 3.96
Based on this metric Darden offers far more value than Cracker Barrel. Most firms tend to trade at a ratio of between 2 and 4 times. Cracker Barrel is trading at well above the expected range and Darden is trading at just inside the expected range. Next up cash as percentage of stock price. Cash per share makes up just over 14% of Cracker Barrel's stock price while Darden's cash makes up 6.2% of their stock price. Total cash as percentage of total assets is as follows. Cash makes up 16.2% of Cracker Barrels' total assets while Darden's cash makes up around 7% of their total assets. So it does look like Cracker Barrel is better placed to ride out difficult times as is currently being experienced during Covid-19
We therefore believe at their respective prices, the stock of Cracker Barrel offers a better long term investment value than that of Darden Restaurants. Therefore in the battle of the sit down restaurants if we have to pick between Cracker Barrel and Darden Restaurants, we rate Cracker Barrel as the Winner.
Read the full article here
30 June 2020 :
Dow Jones Updates: The Dow Jones ended the day, 30 June 2020 up by 0.85%
(13:15 ET): The Down Jones is currently down by -0.2%
(10:39 ET): The Dow Jones is currently down by -0.19%
(4:37 ET): Dow Jones Industrial Average futures are up by 0.19% indicating that the Dow will likely open on a slightly positive note
Website updates:
So if one had to buy one of these airlines stock right now, which one would it be? Does United Airlines offer the most value as its stock has fallen further than Delta and Southwest over the last 3 years? Or is there an underlying reason why United has underperformed compared to Southwest and Delta? One of our first comparison metrics is the Price to stockholders equity per share ratio. What is the stockholders equity per share? Well if a firm decides to sell all their assets, pay all liabilities and distribute the rest to stockholders that is stockholder equity per share. So expressing that as a ratio to the price one gets a feel of how over/undervalued a stock is. Below the Price to Stockholder Equity per share ratio of the three airlines:
- Southwest Airlines: 1.98
- Delta Airlines: 1.27
- United Airlines: 0.93
So Southwest Airlines is trading at almost double their stockholders equity per share, Delta about 30% above their stockholders equity per share and United Airlines 7% below their stockholders equity per share. So based on this one would say that United is the cheapest and Southwest the most expensive. Looking at price to earnings ratios wont help much now as they are all current loss making and not generating any earnings to calculate a price to earnings ratio. Cash on the balance sheet is another indication of value and how easily the company can ride out the current tough business environment.
Looking at the cash per share and the percentage it makes up of its current stock price
- Southwest Airlines: $7.65 (21.8%)
- Delta Airlines: $9.36 (32.7%)
- United Airlines: $13.84 (39.2%)
So again United Airlines comes out on top when looking at the cash per share expressed as a percentage of their stock price. While Southwest has far less cash per share on their balance sheet compared to the other two airlines it is a far smaller airline with a daily cash burn rate that is a lot lower than the two larger airlines. So from a balance sheet perspective they are far better placed to deal with the impact of the Covid-19 pandemic on the air travel industry. And Southwest is far more nibble due to their size to change their operations and business strategy due to the Covid-19 pandemic and its for these reasons we pick Southwest Airlines (LUV) as our Winner in the airline fly off battle
Read the full article here
29 June 2020:
Dow Jones Updates: The Dow Jones ended the day, 29 June 2020 up by 2.32%
(13:10 ET); Dow Jones Industrial Average is currently trading up by 1.79%
(10:41 ET): Dow Jones Industrial Average opened in the green and is currently up a strong 1.62%
(4:05 ET): Dow Jones Industrial Average futures are up by 0.42% indicating that the Dow will likely open on a slightly positive note
Website updates:
In our continued stock battles we pitted two brewers against one another in Constellation Brands (owner of Corona Beer) and Boston Beer Company (owner of Samuel Adams and Dogfish Head). Below an extract from that article.
One of our key metrics is the Price to stockholders equity per share ratio. When looking at this we find the following for both stocks:
Price/Stockholders equity per share for Boston Beer Company (SAM) : 9.1
Price/Stockholders equity per share for Constellation Brands (STZ): 2.22
Based on this metric Constellation Brands offers far more value than Boston Beer Company. Most firms tend to trade at a ratio of between 2 and 4 times. Boston is trading at well above the expected range and Constellation Brands is trading well within the expected range. The PE ratio of Constellation Brands is 22.1 compared to Boston Beer Company's PE ratio of 61.6
We therefore believe at their respective prices, the stock of Constellation Brands offers far better long term investment value than that of Boston Beer Company. Especially considering the strong stock performance of Boston Beer Company over the last three years. We do feel that Boston Beer Company's stock has run far ahead of its future earnings potential.
Therefore in the battle of the brewers if we have to pick we pick Constellation Brands as our Winner
Read the full article here
Chart of the Dow Jones Industrial Average (DJIA) vs Nasdaq vs S&P500 over last 10 years
The graphic below shows the performance of the Dow Jones Industrial Average (DJIA) index over the last month. As soon as a user clicks on the Nasdaq or S&P500 the graphic recalculates and shows the returns of the additional indices selected. The graphic will recalculate the returns if users provide their own dates, within the last 10 year (or they can select predefined dates from our Zoom box in the graphic). Data for the graphic obtained from MacroTrends.Net
Below the returns of the main market indices over the last 12 months (sorted from best performer to worst performer)
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.
- Nasdaq: 25.06%
- S&P 500: 4.67%
- Dow Jones (DJIA): -4.07%
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.