Nurse preparing to administer a Moderna coronavirus vaccine. (Photo by Win McNamee/Getty Images)
រូបភាព Getty
On a hilltop in your town live two people. Joseph has an income of $400,000 a year but little savings. Francois has income of only $90,000 a year but $30 million in the bank.
Who would you rather be? Any sane person would pick Francois. And yet, when they go to pick stocks, many people pay tons of attention to the income statement, and no attention to the balance sheet.
In a modest effort to counteract that cockeyed situation, I compile each year a list of companies that are balance-sheet powerhouses.
To qualify, a company must have:
· A market value of $5 billion or more.
· Earnings of at least 20 cents a share in the latest fiscal year.
· Headquarters in the U.S.
· Debt no more than 10% of stockholders’ equity (corporate net worth).
· Current assets at least two times current liabilities.
This year 34 companies make the Balance Sheet Powerhouse list. I recommend the stocks of three of them.
Moderna
Few people had heard of ម៉ូឌែរណា (MRNA) until it developed a Covid-19 vaccine that was approved by the Food and Drug Administration for emergency use. The company’s name reflects its core technology, involving messenger RNA or mRNA for short.
The company believes that mRNA, wrapped in lipids (fats), can be used in vaccines to prevent many diseases, not only Covid-19. That claim seems credible to me.
Moderna currently has $3 billion in cash and $5.3 billion in marketable securities. Its debt is only 7 percent of corporate net worth.
Schneider ជាតិអេស។ ឌី។ ឌី
Am I really going to recommend a trucking company at a time when many economists predict a recession? Yes I am, Schneider ជាតិ.
In the past four quarters, Schneider has increased its revenue 17% and its earnings 12%. Its debt is only 8% of corporate net worth, which I believe will help it withstand any recession that is likely to develop this year.
The stock sells for about 11 times earnings, while its average multiple for the past decade has been about 14.
តក្ករង្វង់។CRUS
Based in Austin, Texas, តក្ករង្វង់។ makes computer chips used for audio and voice transmission. Over the past decade, it has grown its sales by nearly 13% a year and earnings by nearly 12% a year.
The past year was even better, with both figures jumping by more than 30%. Considering that, I think the stock is reasonably priced at 18 times earnings. Debt is only 9% of corporate net worth.
Those are the only Balance Sheet Powerhouse companies whose stocks I currently recommend. But I want to give recognition to all 34 companies, especially those that have made this roster repeatedly.
ត្រឡប់មកវិញម្តងទៀត
If you’re an audio buff, you probably know the name Dolby Laboratories (DLB). The San Francisco company makes stereo and surround-sound systems. It leads all competitors with 12 annual appearances on the Powerhouse list.
ហ្គេនតិច
SEI Investments
ក្រុមហ៊ុន Microsoft
Four time winners: អេលែចស៊ីស
Three time winners: Advanced Micro Devices
Two timers: សហគ្រាសអ័រហ្គោន
អ្នកចំណូលថ្មី
Two of the stocks I recommend, Moderna and Schneider National, are newcomers to the honor roll. So are Allegro Microsystems (ALGM), ស្ពូត
ការសម្តែងកន្លងមក
នេះគឺជាលេខ 19th column I’ve written about Balance Sheet Powerhouses. My picks from a year ago were up 45.1%, while the Standard & Poor’s 500 Total Return Index was down 5.5%. The big gain was mostly due to First Solar Inc., which more than doubled.
សូមចងចាំថាលទ្ធផលជួរឈររបស់ខ្ញុំគឺសន្មត់ ហើយមិនគួរច្រឡំជាមួយនឹងលទ្ធផលដែលខ្ញុំទទួលបានសម្រាប់អតិថិជននោះទេ។ ដូចគ្នានេះផងដែរការអនុវត្តកន្លងមកមិនបានទស្សន៍ទាយអនាគត។
For the past 18 columns, the average 12-month return was 15.4%, versus 9.5% for the S&P. Twelve of the 18 columns were profitable, but only eight beat the index.
Disclosure: I own Moderna shares personally and for several of my clients.
Source: https://www.forbes.com/sites/johndorfman/2023/02/13/moderna-cirrus-logic-and-other-balance-sheet-powerhouses/