Value investing is making a comeback and could continue to best growth strategies if markets remain rocky. That’s because low valuations can offer investors a margin of safety.
That could dampen Nucor’s earnings, but the company should remain highly profitable. Management thinks the stock is cheap as the company bought back stock equivalent to more than 10% of its current market value in 2021. The shares yield over 2%. The company, with a current market value of $60 billion, could have more than $20 billion of net cash and investments on its balance sheet at the end of 2022, meaning investors are paying little for its powerful messenger RNA franchise. Moderna could become a takeover candidate if the stock continues to languish.
The company has ramped up its stock buybacks lately, highlighting the industry’s financial strength. Investors can buy the company’s supervoting class B stock at around $80, a 15% discount to the more liquid A shares. Barron’s has written that the B shares are the best way to play Lennar. APA, an exploration and production company, has joined others in the industry in committing to return ample cash to shareholders. APA, whose shares trade around $28, plans to give out 60% of its 2022 free cash flow to holders in buybacks and dividends.
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Source: CNBC - 🏆 12. / 72 Read more »
Source: CNBC - 🏆 12. / 72 Read more »