Monthly Archives: February 2017

February’s Pick

It might seem as though choosing a stock is a tricky thing to do. It is. Every month we update the relevant financials for each stock we follow (all 194 of them), assign the scores and narrow the list down to two or three candidates. Anyone who’s been following this blog will recognize that we often have trouble settling on just one. We’ve committed to always choosing a single stock, so, sometimes with much hesitation, we force ourselves to make a single recommendation. Regular readers will also note that we often add “But, hey – any of these suggestions would be a great choice.” This month is no different…

Target (NYSE: TGT) came out on top once the scores had been assigned and that’s official choice. The stock has been beaten down from $78 to $63 the last three months and is currently 24% off their 52-week high. The decline seems to have stopped as the price has stabilized over the last month or so and that’s why we’re suggesting it now. The company hasn’t changed – they still still reasonably priced products that we all want. That’s a good thing. What’s changed is that we can now buy shares in the company at a price that seems to be a pretty deep discount. Target has EPS of 5.45 and a P/E of 11.7. That P/E puts them in the top 10 of all stocks we follow which means lots of people out there will soon discover this stock is underpriced and will want to buy it. That’s also good for us. The current dividend rate is 3.76% which is not stellar but for a $36 B company is pretty much a guarantee and sure to increase year over year. We are, after all, dividend investors so we can enjoy that dividend payment while we ride the share price up. The other thing we like about this purchase is that it’s in the retail sector so it increases the diversity of our portfolio.

In case you’re wondering, CIBC (TSE: CM, NYSE CM), General Motors (NYSE: GM) and Ford (NYSE: F) rounded out the top four picks this month in a very close race.