The One Thing Equity Investors Are Good at
Monday, May 5th, 2008
By Mitchell Clark, B.Comm. for Profit Confidential
I can’t believe how well DeVry, Inc. (NYSE/DV) is performing. We talked about this stock only within the last month or so and the stock is up over 15 points. I can only surmise that investors felt that betting on a private education company was worthwhile while the rest of the economy stagnates.
This stock benefited recently from financial results that beat Street expectations and from a legislative proposal that would provide more financial aid for students looking to upgrade their skills. This stock is expensive now, but my best guess is that it will remain expensively priced because of the company’s track record of success.
Another bellwether stock I watch all the time is IBM (NYSE/IBM), and this one has really done well over the last two months. In fact, IBM just hit a new 52-week high and the stock is getting awfully close to its all-time record high set in the stock market craze of 1999.
I’d feel better about the general economy if companies like General Electric Company (NYSE/GE) were doing better, but you can’t have slowing economic growth without some commensurate effect on corporate earnings.
GE really hasn’t done a lot in the last three years. This benchmark stock is always worth keeping an eye on, and any sustained new upward trend in this stock will be a good sign.
I’m still really keen on Deere & Company (NYSE/DE), but I do recognize that this stock has already done exceedingly well in the last two years.
The broader market seems to be experiencing a bull move here and I think that investors are using the recent economic data, which weren’t quite as bad as expected, to speculate on the future. There is one thing that equity investors are always good at, and that is betting on the future.
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
