Why Valspar Corporation Shares Could Soar to $100

Does this analyst make a good case? Or is it just more noise from Wall Street?

Jul 22, 2014 at 10:15AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of The Valspar Corporation (NYSE:VAL) gained 2% this morning after Goldman Sachs upgraded the paint manufacturer from neutral to conviction buy.

So what: Along with the two-notch upgrade, analyst Robert Koort boosted his price target to $97 (from $83), representing about 27% worth of upside to yesterday's close. So while momentum traders might be turned off by Valspar's flat trading in recent months, Koort's call could reflect a sense on Wall Street that its growth prospects are becoming too cheap to pass up.

Now what: According to Goldman, Valspar's risk/reward trade-off is particularly attractive at this point. "VAL now carries what we view as a substantial 4-6x P/E multiple discount [to larger peers]," said Koort. "We attribute this to VAL's smaller market cap, a diversified architectural/industrial product mix and broad global exposure. With VAL building traction through new business initiatives, cyclical lift in its industrial businesses, and recovery in its global paint markets, we expect improved investor awareness and a shrinking valuation gap." Given Goldman's solid stock-picking track record -- currently ranked in the top 15% of our CAPS community -- value-oriented Fools might want to take a closer look at Valspar.

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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