A DGI Wishlist

[Otter]

I probably have way too many holdings as it is, but am always on the lookout for more. There are a number of stocks that I would really like to own, but haven't been able to pull the trigger on the past several years, as the valuations just never looked right at the time I was looking. What stocks are on your wish list, and what's your target price for pulling the trigger? Mine are below:

AWR $51.00 (based on falling to 10yr average P/E of 24 for year-end 2020 projected earnings)
BF.B $52.00 (based on falling to 10yr average P/E of 28.2 for year-end 2020 projected earnings)
CL    $38.50 (based on falling to a P/E of 15 for year-end 2020 projected earnings)
ED    $63.50 (based on falling to a P/E of 15 for year-end 2020 projected earnings)
HRL  $26.50 (based on falling to a P/E of 15 for year-end 2020 projected earnings)
KO   $46.50 (based on falling to 10yr average P/E of 20.8 for year-end 2020 projected earnings)
MCD $174.00 (based on falling to 10yr average P/E of 20.5 for year-end 2020 projected earnings)
MDT $95.00 (based on falling to 10yr average P/E of 16.2 for year-end 2020 projected earnings)
MKC $85.00 (based on falling to a P/E of 15 for year-end 2020 projected earnings)
WMT $82.00 (based on falling to 10yr average P/E of 15.8 for year-end 2020 projected earnings)
WTR $36.00 (based on falling to 10yr average P/E of 22.8 for year-end 2020 projected earnings)

I guess it is also a list of dividend aristocrats that I think are crazy overpriced at the moment. Pretty much all of these have analyst estimates for low (single digit %) or no meaningful earnings growth in 2020 and 2021, compared to growthier earnings action over the past decade of the bull market. The ones that I set at a 15 P/E price target tend to be extra slow-growing consumer staples or utilities. Went with 10yr average P/E metric for the growthier ones (water utilities), or household names that typically command their own P/E premium (KO, MCD, WMT). 

I'd like to think that I'll have a chance at some of these in the not too distant future, as statistically we are likely to be closer to a bear market than a repeat of the past decade. 2008/9 and 2001/2 was the last time many of these names touched those sort of P/E multiples.

Curious what's on others' shopping lists for a downturn, that they don't already own.

[fenders53]

Great thread topic Otter.  There are a ton of stocks I just never pulled the trigger on, or I once owned them and bailed after what I thought was a too quick gain.  I try to not be greedy when I get a gift.  I do own a small position in some of these because I just gave up.  Waiting for the big opportunity and I hold too much cash hoping. I'll think of more later but some stocks I want to hold forever if I can just get in with a large position at a 15 PE or close enough ....

HON
MMM
BA
LMT
MSFT
CAT
V
UTES- XEL,NEE.AEP

[ChadR]

WM is one that I have wanted for a while, but I probably missed my chance last December. When it was at a decent price, I had no cash to pick it up.

[Otter]

(11-20-2019, 08:28 PM)fenders53 Wrote: Great thread topic Otter.  There are a ton of stocks I just never pulled the trigger on, or I once owned them and bailed after what I thought was a too quick gain.  I try to not be greedy when I get a gift.  I do own a small position in some of these because I just gave up.  Waiting for the big opportunity and I hold too much cash hoping. I'll think of more later but some stocks I want to hold forever if I can just get in with a large position at a 15 PE or close enough ....

HON
MMM
BA
LMT
MSFT
CAT
V
UTES- XEL,NEE.AEP

Personally, I think CAT is already in a buy zone (and I've been building an initial position). P/E's are tricky with cyclical industrial companies where the E side of the equation can change really fast. That said, it has traded sideways to slightly down for the last two years, and the P/E of 13 (blended basis reported by FAST Graphs) seems favorable, even with a flat forecast for 2020 earnings growth. 

MMM is a trickier call, but P/E of 18.3 (blended basis, not TTM) is below its 10yr average of 19.7, and forecasting 7% earnings growth in 2020. That said, if the P/E drops to 15 or below, you could see MMM in the $130s.

[fenders53]

I liked cat better sub 120. I have been selling puts on most of my wishlist for a year. Some of them just bounced up everytime. I would like some 160 mmm and that's not cheap enough for any margin of safety. It will take a recession to see 130 imo.