When large caps make a run for it, Fools pay attention.
Think of Motley Fool Inside Value pick Microsoft. After years of poor performance, Mr. Softy and his $300 billion-plus market cap kicked into gear last month, enriching investors who bought and stayed in.
Hence this column. As much money as investors can make from fast-movers like Cognos
Company |
Closing Price |
CAPS Rating (Out of 5) |
% Change |
52-Week Range |
---|---|---|---|---|
Progressive |
$18.35 |
** |
2.51% |
$17.53-$25.16 |
Avon Products |
$40.13 |
**** |
2.16% |
$31.95-$41.85 |
Lockheed Martin |
$109.35 |
***** |
2.02% |
$84.89-$113.74 |
Discover Financial Services |
$17.82 |
*** |
0.68% |
$16.91-$32.17 |
BlackRock |
$191.20 |
*** |
0.16% |
$139.20-$207.32 |
Shares of our top gainer, insurer Progressive, were up for reasons not yet reported. So be it. We Fools prefer buy-to-hold stock stories anyway. Are any of our large-cap leaders worth owning over the next three to five years?
Not really -- if you believe the 73,000-plus professional and amateur stock pickers in our Motley Fool CAPS community. Don't read too much into that, though. Google
Progressive can't claim anywhere near the same record. But it could be a budding value. CAPS industry tracker NetscribeInsurance explains:
[Progressive's] combined ratio of 86.7% in 2006 has been a decent improvement of 1.4% from 2005, and estimated 96% due to decreasing loss expense ratio. This has enabled it to earn a solid return on capital ... Hence the firm is taking the pricing gloves off to gain market share.
For investor jpmgator06, the thesis for Progressive is based on valuation:
A great, stable business. Along with GEICO, they are the two low cost providers in auto insurance ... Market share will only increase over time. P/E [below]10 and selling at 30% less than [its five-year] P/E average.
I'll add that, as much as I enjoy owning a stake in GEICO via Berkshire Hathaway, I think Progressive's marketing, like its pricing, is comparable -- and occasionally better. I'd be tempted to buy on weakness.
What about you? What would you do? Let us know by signing up for CAPS today. It's 100% free to participate.
See you back here tomorrow for more of the best of the biggest.
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