News By Tag
News By Place
S&P 500 Valuation Not Excessive in Light of Corporate Earnings and Interest Rates
Profit Confidential, the popular stock market and economic e-letter, says today that the S&P 500 is not overvalued in light of stronger-than-expected corporate earnings and the prevailing interest rate environment.
According to Profit Confidential, “The S&P 500 is trading at 14.9 times current corporate earnings; not cheap, but not expensive either. However, the S&P 500 is trading at only 12 times estimated earnings for the 12 months ahead. With the S&P 500 beating analysts’ corporate earnings expectations 100% of the time over the past 11 quarters, achieving estimated earning in the current quarter and the next three quarters of 2012 is not a stretch.”
Profit Confidential says that the S&P 500 is priced at 12 times future earnings, an historic bargain. The dividend yield for the S&P 500 is presently 2.2%; better than what you can get on a 10-year U.S. Treasury (they’d rather own the S&P 500 than a 10-year U.S. Treasury for the next 10 years). The third quarter ended September 30, 2011 marks the 11th straight quarter that the corporate earnings of the S&P 500 have beat analyst expectations.
Michael Lombardi, lead contributor to Profit Confidential, writes, “Stocks are not a screaming bargain. But when you look at the interest rate environment today, when you look at the alternative investments to the S&P 500 and the Dow Jones Industrial Average, you realize that stocks are not a bad place to be, especially when the S&P 500 continues to surprise analysts and investors with corporate earnings that consistently beat estimates.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, the stock market, the U.S. dollar, the euro, interest rates, and inflation. To see the video, visit www.profitconfidential.com/