Has "hope" become a nasty four-letter word? It seems to me that recently some folks have been putting hope in the company of ... well, you know all of those other words.
What makes me so sure that hope has gotten mud kicked in its face? Consider, if you will, the recent scuffle that CNBC's Dennis Kneale has found himself in.
Haven't heard about this? Well, Kneale has taken it upon himself to deliver a message of hope and call an end to the recession. His missive was met by the financial blogosphere like a grizzly bear at a backyard cookout. It didn't help that he hurled a few choice insults at the blogging nation.
In short, Kneale was skewered to the point that even he noted that the Google search phrase "Dennis Kneale idiot" brings up thousands of matching results.
Does hope really deserve such hatred?
Danger, Will Robinson!
When I see stuff like this, my warning sensors start to blink like mad. While I have little interest in taking sides in the argument, I take great interest in the fact that this has gotten so heated. It's an actual, genuine argument that you might get into at the pub after having a few too many beers.
Just look at some of the things that have been said, like Kneale calling bloggers "cowardly" and labeling them with a certain word that he defines as "pond scum." Or consider the bloggers firing back by comparing Kneale to Beaker from the Muppets and calling him "functionally retarded." Obviously, cooler heads are not prevailing on either side.
If the market could be moved by sheer power of will, this might all be worth following, since the side that screams the loudest or demeans its opponent the most would be the one we'd want to back with our investment dollars. But for individual stock investors like us, the future of Microsoft (Nasdaq: MSFT) and Morgan Stanley (NYSE: MS) will depend on their ability to deliver profits, not which commentator or analyst is able to out-shout his detractors.
Skip that, do this
It seems that good TV and "smart" experts are built on rabidly held black-and-white views. But we don't live in a black-and-white world, and the best investors are going to be those who are able to stoically research and evaluate the data involved in an investing decision -- taking account of the valid points on all sides of the issue.
If we continue reading online publications and watching TV hoping to find consensus, balanced views, and, heck, sanity, we'll probably be waiting a while. I can't imagine that ratings or readership would react well to having sober experts on all the time presenting in-depth research that takes all sides into account. Chalk it up to the human condition -- we like conflict and drama.
So, we can allow ourselves to get whipsawed by the perpetually disagreeing experts on TV and the Web or we can duck out and spend our time actually finding investment opportunities. And while I'm not nearly as bullish as Kneale, I do think there are quite a few high-quality companies out there that the recession has knocked down to attractive prices.
Want to see what I'm talking about? Here are just a few of those potentially attractive deals. All of these companies have produced enviable returns on their total capital and are selling at attractive valuations.
|
Company
|
TTM Enterprise Value to EBITDA
|
TTM Return on Capital
|
|
Vale (NYSE: VALE)
|
5.7
|
13.5%
|
|
America Movil (NYSE: AMX)
|
7.3
|
23.8%
|
|
United Technologies (NYSE: UTX)
|
6.4
|
15.4%
|
|
3M (NYSE: MMM)
|
7.7
|
17.6%
|
|
Walgreen (NYSE: WAG)
|
6.8
|
13.5%
|
Source: Capital IQ, a division of Standard & Poor's.
TTM = trailing 12 months. EBITDA = earnings before interest, taxes, depreciation, and amortization, a commonly used measure of cash flow.
Maybe these companies pique your interest, maybe they don't. But the point, Foolish investor, is that opportunities are out there and our time is better spent digging into research rather than following financial forecasting feuds.
Of course I'm here playing the part of financial journalist, so maybe I'm just as full of hot air as everyone else. What do you think? Chime in below in the comments section. Or, better yet, get down to business and share your favorite investment ideas with the Motley Fool's CAPS community.
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