Monday, February 2, 2009

GE: A Value Trap or A Bargain?/Add of Adobe

I hope that General Electric is not my next Bank of America.  I did just add 30 shares in a Roth IRA at 11.80.  I also bought 30 shares of Adobe at 19.45. I am moving at a glacier pace into cash rich Tech Titans selling at depressed valuations.  I would caution that I do not consider myself a tech investor, but maybe I am okay at it considering I did avoid the 2000-2002 Nasdaq swoon. My thinking now on the subject is discussed in earlier posts. 

I have already expressed my negative comments about GE.  I was just stunned by the deal that GE struck with Uncle Warren, a mini Black Swan event for me.  For Adobe, I will discuss it in more detail when my position grows into something serious.  Suffice it to say,  Adobe has a dominant position in its niche.  It has over 2 billion in cash.  ADBE: Balance Sheet for Adobe Systems Incorporated - Yahoo! Finance   Earnings are estimated at 1.8 for the fiscal year ending November 2009 which is just over 10 times earnings for this high quality Tech name.   I did read the most recent analyst reports on Adobe that I have access to.  Morningstar did recently reduce its fair value to 30 but still has ADBE rated five stars.  Barclay's has it as an overweight with a 40 target.  S & P is more negative with a hold and a $27 target.  VL gives it an average timeliness rank with a lot of potential upside.  Microsoft is trying to edge into Adobe's domain with its introduction of XPS.  

I am adding to my meager positions in the Tech Titans at an extremely slow pace in terms of time and money. It is hard to see any reason to rush into anything at the moment. 

I am still just investing cash flow.  I also changed the distribution option on several more funds this morning to the payment in cash option. 


  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. I would not last a week.  In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. 

No comments:

Post a Comment