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+--- Thread: Aflac (/showthread.php?tid=151)
RE: Aflac - NilesMike - 11-16-2013
(11-16-2013, 10:45 AM)Kerim Wrote:(11-16-2013, 10:36 AM)NilesMike Wrote: Seeking to learn. How is AFL considered undervalued when it's near it's all time high and dividend yield is near 5 year lows?
Seems topped out, at least short term and I would only be a buyer on a good down move.
Good luck to all.
Gotta run out for errands, but the short answer is that price alone tells you nothing about valuation. Yield is more helpful, but not a whole lot more. A stock that pays no dividend at all can be extremely undervalued.
There are many ways to value a stock, and I am only now learning the ins and outs of valuation deeper than simple p/e and the such. But at its heart, valuation is all about pricing the future potential of the company. The thesis with AFL is that the market is improperly discounting its future earnings, and that over time, that will correct, as reflected in a stock price that is higher relative to earnings and other metrics.
Boy, I don't know about that. It may be correct but I sure don't want to try and be the smartest guy in the room.
I try and wait until it's a little more obvious for me to wade in. If the data indicates my probabilities are better than average that's about as good as I can do.
I know I can't interpret the fine data as well, let alone better, than the guys who it for a living.
Interested in keeping this learning discussion going.
RE: Aflac - fiveoh - 11-16-2013
(11-16-2013, 11:31 AM)NilesMike Wrote:(11-16-2013, 10:45 AM)Kerim Wrote:(11-16-2013, 10:36 AM)NilesMike Wrote: Seeking to learn. How is AFL considered undervalued when it's near it's all time high and dividend yield is near 5 year lows?
Seems topped out, at least short term and I would only be a buyer on a good down move.
Good luck to all.
Gotta run out for errands, but the short answer is that price alone tells you nothing about valuation. Yield is more helpful, but not a whole lot more. A stock that pays no dividend at all can be extremely undervalued.
There are many ways to value a stock, and I am only now learning the ins and outs of valuation deeper than simple p/e and the such. But at its heart, valuation is all about pricing the future potential of the company. The thesis with AFL is that the market is improperly discounting its future earnings, and that over time, that will correct, as reflected in a stock price that is higher relative to earnings and other metrics.
Boy, I don't know about that. It may be correct but I sure don't want to try and be the smartest guy in the room.
I try and wait until it's a little more obvious for me to wade in. If the data indicates my probabilities are better than average that's about as good as I can do.
I know I can't interpret the fine data as well, let alone better, than the guys who it for a living.
Interested in keeping this learning discussion going.
If you wait until it's an obvious time to wade in, most people will have beat you to it.
Aflac got crushed(the stock) the last few years because of their exposure to European countries involved in the crisis. They have since moved away from those investments.
Now one of the big concerns with them is the exposure to Japan.
AFL has a PE of 10.3ish, compared to a historical PE of 17.5. It has a low payout ratio and has increased its dividend for over 30 years.
IMO interest rates will probably rise from here and that will greatly benefit AFL.
As far as valuation is concerned I personally love fastgraphs. I also use Morningstar and value line along with the chowder rule and a few other things.
RE: Aflac - NilesMike - 11-16-2013
I just don't see the urgency to buy AFL near all time highs. I would much rather wait for a nice pullback. But to each his own. It hasn't traded with a 17 multiple in over 5 years.
Good luck to all.
RE: Aflac - fiveoh - 11-16-2013
(11-16-2013, 06:32 PM)NilesMike Wrote: I just don't see the urgency to buy AFL near all time highs. I would much rather wait for a nice pullback. But to each his own. It hasn't traded with a 17 multiple in over 5 years.
Good luck to all.
An all time high it hasn't hit since 2008 when EPS was 2.62, projected 2013 EPS is 6.28-6.52... hence the undervalued valuation.
To each his own. No reason to invest in AFL if you don't see the opportunity there.