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 (NASDAQ:COGN) and Motley Fool Hidden Gems recommendation II-VI (NASDAQ:IIVI) , both of which hit new 52-week highs last week, the turtle often beats the hare. Here's a look at Friday's finest terrapins, courtesy of The Wall Street Journal:
|
Company |
Closing Price |
CAPS Rating (Out of 5) |
% Change |
52-Week Range |
|---|---|---|---|---|
|
Progressive (NYSE:PGR) |
$18.35 |
** |
2.51% |
$17.53-$25.16 |
|
Avon Products |
$40.13 |
**** |
2.16% |
$31.95-$41.85 |
|
Lockheed Martin (NYSE:LMT) |
$109.35 |
***** |
2.02% |
$84.89-$113.74 |
|
Discover Financial Services (NYSE:DFS) |
$17.82 |
*** |
0.68% |
$16.91-$32.17 |
|
BlackRock (NYSE:BLK) |
$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 (NASDAQ:GOOG), like Progressive, has been a two-star stock for much of its life in CAPS -- and it's been a seven-bagger.
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.
Cap off your day with related CAPS Foolishness:
- Check out Thursday's stock stars.
- No doubt about it; these really are the worst stocks in the world.
- Get your dynamic dividend stocks here.
