The American dream still thrives in the stock investing market. It is the only investment vehicle that has proven to increase wealth over time and one that mitigates inflationary pressures. The question for the average stock investing person is how to find the offbeat stock that flies beneath the popularity grid yet still maintains the potential for a positive Return On Investment (ROI). The following indicates some not so glamorous stocks that have strong growth and high employee satisfaction. The employee satisfaction is an integral component of a successful operation because the satisfied employee goes the extra distance for the company, lessens the impact on employee benefit packages and thereby, enhances the Earnings Per Share (EPS). The following companies score in the Forbes, 100 Best Companies to Work For in 2008, while exhibiting positive growth.
The first listed company is Healthways (HWAY). The company’s market is disease management and in the current Salmonella/E-Coli environment it has strong potential for growth. Ranked at #60 in the Forbes list it has a 42% growth rate; a P/E Ratio of 23.08 and an EPS of $1.32 per share. It is currently trading off its projected 1 yr. target of $40.00 per share and is a premium at a discounted $30.39 per share. A covered call investing position for HWAY with August expiration currently has a potential return of 2.6% with 13.2% downside protection.
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The second company is FactSet Research Systems (FDS) with an annualized growth of 21%. It markets itself to on-line investors and has taken advantage of niche marketing to expand. It is trading at $57.61 (6/27/08 closing) and off its 52 week high of $73.99. It has a P/E Ratio of 23.81 and an EPS of $2.42. Its current dividend yield of 1.20% exceeds allowing your money to fester in a bank. Its 21% growth rate indicates that its engine will remain hot. For covered call investors, FDS currently has a covered call investing position with an August expiration generating a potential return of 5.5% – in only 40 days.
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While reading this article you might be utilizing a Herman Miller (MLHR) piece of furniture, which is the third in our series. The company is, Ho Hum, stable. Its pricing is fairly consistent across the 52 week period with a somewhat lower P/E Ratio of 10.73. However it has a strong EPS of $2.35 and pays a 1.40% dividend ratio (next due on 7/15/08). It has a projected valuation of $38.50, which is a bargain investment at $25.21. A covered call position is currently available for MLHR with August expiration and with a potential return of 4.7%.
EOG Resources (EOG) is the fourth in our series and ranks at 64 on the Forbes list. It is rather pricey at $130.19 (6/27/08) but has a strong moving average plus a dividend declared for July 31, 2008. The dividend is rather small, despite a healthy EPS of $4.46, but the valuation is where the money is to be made (up $4.00/shr. 6/27/08). However, despite a 17% growth rate, the projected stock value is near the high end so, one might approach with a degree of caution. A July expiration covered call is currently available for EOG with a very nice potential return of 3.4% – in only 12 days!
Cisco (CSCO) rounds out our list having nicely recovered from the beginning of the century’s financial downturn and currently experiencing a 17% growth. It is an information based technology firm and may be a good to place to run toward, as the financials continue their write-downs. Cisco currently trades at $23.61, well off its high of $34.24. The P/E Ratio is a mere 18.45 with an EPS of $1.28 (No dividend projected) although a continued growth could be a harbinger of a better return. Cisco my not be considered boring by some investors, and the potential return of its covered call investing positions are definitely not boring – 3.7% in only 40 days.
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[tags] Return On Investment, ROI, Earnings Per Share, Forbes, Salmonella, E-Coli, furniture, CSCO, Cisco Systems Inc., EOG, EOG Resources Group, FDS, Factset Research Sys. Inc., HWAY, Healthways Inc., MLHR, Miller (Herman) Inc., covered call investing, covered call investment strategy, investment strategy, iron condor, poweroptions, stock investing, stock option trading, stock options [/tags]