Sometimes, over a span of many Years, a business will continue to grow, generating ever-increasing amounts of cash, repurchasing stock, paying increased dividends, reducing debt, opening new stores, expanding production facilities, moving into new markets, etc., while at the same tune its stock price remains stagnant (or even falls).
When this happens, the average and professional investors alike tend to overlook the company because they become familiar with the trading range.
Take, for example, Wal-Mart. Over the past five years, the retailing behemoth has grown sales by over 80%, profits by over 100%, and yet the stock price has fallen as much as 30% during that timeframe. Clearly, the valuation picture has changed. An investor that read the annual report back in 2000 or 2001 might have passed on the security, deeming it too expensive based on a metric such as the price to earnings ratio. Today, however, the equation is completely different--despite the stock pr
A. Find Hidden Value in the Market
B. Become Richer
C. Get Good Bargains
D. Identify Good Companies
Sometimes, over a span of many Years, a business will continue to grow, generating ever-increasing amounts of cash, repurchasing stock, paying increased dividends, reducing debt, opening new stores, expanding production facilities, moving into new markets, etc., while at the same tune its stock price remains stagnant (or even falls).
When this happens, the average and professional investors alike tend to overlook the company because they become familiar with the trading range.
Take, for example, Wal-Mart. Over the past five years, the retailing behemoth has grown sales by over 80%, profits by over 100%, and yet the stock price has fallen as much as 30% during that timeframe. Clearly, the valuation picture has changed. An investor that read the annual report back in 2000 or 2001 might have passed on the security, deeming it too expensive based on a metric such as the price to earnings ratio. Today, however, the equation is completely different--despite the stock pr
A. prominent
B. terrible
C. unchanged
D. progressing
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