A Month of Consolidations… Buy Comcast (CMCSA) for Christmas/Holiday Presents. The S&P 500 ended at 2079 on October 31st and at 2080 on November 30th. This one point gain does not constitute what might be called an “exciting” month; it’s more like a month of what’s called “consolidating stock prices” (which means prices are firming up where they are). Specifically, the U.S. stock markets held up quite well despite the following negative elements:
- Collapse in commodity prices due to slow demand and disappointing global growth
- Headwinds in corporate profits
- Disconcerting slowdowns in China
- European economic malaise
- Ongoing Middle East tensions.
And to the surprise of many experts, U.S. stock markets are possibly forming a base for more positive results for December and into early 2016. This renewed confidence is due in large measure to overall improving economic scenarios which indicate “good enough” going forward. And if the U.S. Federal Reserve gives the economy a vote of confidence by raising rates in December, U.S. stock markets could follow that lead and head higher.
Hence, we believe no changes to our TSOA Retirement Allocation Model Portfolios are required at this time.
Buy Comcast (CMCSA)
A recent 5% correction in the price of the solid large-cap growth stock of Comcast (CMCSA) makes it an excellent long-term buy made even better with these additional positive investment indicators:
- Strong revenue growth (increased 11.2% compared to 2014)
- Attractive valuation (CMCSA’s Price Earnings [PE] ratio of 19.08 is lower than the industry average of 23.3)
- Excellent cash flow from operations (10.10% growth rate for each of the last 5 years)
- Solid financial structure (Debt to Capital Ratio of only 35.7%)
- Growing dividend payout each year (from $0.65/share in 2012 to $1.00/share projected for 2016 – a 54% increase in 4 years)
While Comcast is best known as one of the largest national cable providers, many investors are not aware that Comcast also owns Universal Studios, which in turn owns the Harry Potter theme parks in Orlando, Florida and the similar planned park in Southern California. The appeal of Harry Potter books and movies for children and young adults should continue to contribute to Comcast’s positive future.
Buy Comcast shares for your own portfolio, and buy them also for your kids and/or grandkids as Christmas/Holiday presents. They will appreciate this “gift” for years to come. Tell them they now “own Harry Potter” and share with them what that means. You might be amazed at the relationships you could build with your children and/or grandchildren with this gifting idea.
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Good investing and Happy Holidays!
Note: Jim Tso has invested in Comcast shares in his Roth IRA accounts and in his grandchildren’s college accounts.