Rome wasn't built in seven days, but it only took that amount of time for the Dow Jones Industrial Average
Keep in mind that some companies deserve their current valuations. Bargain retailer Ross Stores
Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.
Winter is coming
The forecast could call for a blizzard to wipe out Activision Blizzard's
Use Shanda Interactive
Don't be a brat
Not to rain on the kids' parade, but Mattel
I can't say I'm very intrigued by its smaller counterpart Hasbro
One man's trash is ... trash
I admit the bias that I'm not a fan of the waste management sector. The business is a necessity which grants it certain "value," but this isn't a high-growth sector, so I feel it shouldn't support high-growth multiples. This week's beef is with Waste Connections
Although it's not uncommon for waste service companies to trade at 20 times earnings, Waste Connections does so at nearly three times book value and at more than 10 times cash flow. Larger rivals Waste Management and Veolia Environnement are valued at only seven and two times cash flow. Even though analyst estimates peg Waste Connections to grow at 16% over the next five years, I simply don't see how that's possible when the company sees revenue growth slowing. Do yourself a favor and send this one down the drain.
Sometimes it really is all about valuation. Although all three companies have been steady growers, macroeconomic problems coupled with cheaper competitors make them poor choices heading into earnings season.
What's your take on these stocks; are they sells or belles? Share your thoughts in the comments section below and consider adding Activision Blizzard, Mattel, and Waste Connections to your free and personalized watchlist to keep up on the latest news with each company.
The Motley Fool owns shares of Activision Blizzard, Waste Management, and Veolia Environnement, and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Waste Management, Activision Blizzard, Mattel, and Hasbro, as well as creating a synthetic long position on Activision Blizzard and writing a covered strangle position on Waste Management.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong and on Twitter @TMFUltraLong. 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 that never needs to be sold short.