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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Corporate bonds may offer clues about stocks |
JSOnline - July 24, 2011 - By Kathleen Gallagher
When numbers add up, shares worth closer look
When John Collopy looks for stock market values, he sometimes turns to prospective companies' bonds.
Collopy, director of research for Oshkosh-based Carl M. Hennig Inc., calculates when investors are valuing a company's bonds more richly than its stock.
In such cases, he's found from past calculations, the company is worth a closer look.
"It looks like they believe the interest coverage is more secure than the growth prospects for earnings. But they may be misreading the growth prospects, which means there may be value in the common stock," Collopy said.
Collopy compares a company's price-to-earnings ratio - how much investors are willing to pay for $1 of earnings - to what he calls its bond P/E. He determines the bond P/E by dividing the price of a company's bonds (with maturities of at least 10 years) by the interest rate on the bonds.
Collopy doesn't do this calculation for financials or utilities. The biggest risk with this method is that, if interest rates rose, it would destroy the comparison, Collopy said. Housing issues, unemployment, Federal Reserve policy, demographics and the inventory overhang will likely keep rates low for the next few years though, he said.
Here are five Wisconsin companies whose bond P/Es are higher than their stock P/Es, based on 2011 earnings estimates:
Bemis Co. (BMS, $33.95), Neenah, makes flexible packaging. It has a bond P/E of 23.8 vs. a stock P/E of 15.4, Collopy said.
Bemis has increased its dividend for 28 straight years and currently yields 2.8%. The company has done a good job of reining in costs and has good technology in its packaging systems, Collopy said. These shares could reach an all-time high of $38 in the next 12 months, he said.
Generac Holdings Inc. (GNRC, $20.42), Waukesha, makes backup power generation products for residential, commercial and industrial markets. It has a bond P/E of 25 vs. a stock P/E of 11.8.
Earnings this year may be slightly below last year's $1.73 a share but are expected to rebound to $2 in 2012, Collopy said. Aided by the strength of industrial issues in the market, he said the shares could trade as high as $25 in the next 12 months.
For the complete article.
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