Stock Analysis

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Stock Picks and Analysis Choosing two profitable stocks amongst a myriad of potential alternatives is a daunting task to say the least. In order to narrow my choices from thousands to two, I examined several aspects of companies I was interested in. Among these were, company overview, alpha and beta ratings, price ratios, price charts, and company headlines. After evaluating this information, I chose Intuit INC (INTU) listed on the NASDAQ and Johnson and Johnson (JNJ) listed on the NYSE. Intuit, Inc. Intuit, Inc. is a provider of small business, tax preparation and personal finance software products and Web-based services that simplify complex financial tasks for consumers, small businesses and accounting professionals. The Company's principal products and services include Quicken, QuickBooks, Quicken TurboTax, ProSeries, Lacerte and Quicken Loans. Intuit offers products and services in five principal business divisions which include Small Business, Tax, Personal Finance, Quicken Loans and Global Business (Market Guide). Intuit develops, sells and supports small business accounting, tax preparation and consumer finance desktop software products, financial supplies, and Internet-based products and services for individuals and small businesses. This past fiscal year ended on 7/31/02 and revenues rose 18% to $1.36 billion. Net income from continuing operations totaled $69.8 million vs. a loss of $118.1 million. “Results reflected higher quicken loans division sales and lower acquisition-related charges.” (Market Guide) Inuit has continually met or surpassed previous financial estimates in a time when most companies are barely staying out of the red. On 9/8/02 Inuit, Inc had an Alpha rating of .0084 indicating it was performing better than previously estimated. Intuit also had a Beta rating of .24 indicating its volatility had decreased. This beta indicates that the company could possibly increase or decrease .76% less than the index. Due to this small Beta, Intuit is of relatively low risk as it is independent of the motion of the index. Inuit has a Relative Performance Rating of 53.81. This stock overperforms the NASDAQ 100 INDEX by 53.81 %. Intuit has gained 7.29% since December 31. The current price of Inuit was $45.900 with a P/E of 29.61. The stock’s fair value using its P/E Ratio was dismal at $24.58. From a fundamentalist view the stock should be sol... ... middle of paper ... ...On September 25, it announced a large clinical trial showed its experimental devices to treat clogged heart arteries performed significantly better than current technology. Doctors and analysts expect the new technology to revolutionize the treatment of coronary artery disease. Although many analysts downgraded Johnson and Johnson from a strong buy to outperform Monday, they still site it as a good buy. Johnson and Johnson has been trading above both its 50 and 200 day averages and is promising. Its current market position is very attractive as it may become a market leader when the DOW turns around. Johnson and Johnson’s undervalued price, market position, and earnings make it a good pick in a sea of ambiguity. After considering the market position I have decided to take a moderate risk approach. I will allocate 40% of my resources to Johnson and Johnson and 30% to Intuit, Inc. The remaining 30% I will hold in cash. Although the saying “Cash is trash,” applies to a bull market, I am still apprehensive as to when this turnaround will occur. For now I will benefit by holding cash, but if the market turns at the end of our two month period as many analysts believe, I will lose out.

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