Ryan Lee, manager of the Covestor Model Long-Term Conservative bought McCormick & Co Inc (NYSE:MKC) this week. Lee looks for positions that are trading at a 30% discount to their intrinsic value and he values free cash flow with debt that is manageable. MKC has managed to keep its long-term debt almost stable over the past two years and in 2009 they had a positive change in cash and cash equivalents. The current price to earnings ratio and price to book ratio do not necessarily indicate that it is trading at a discount to intrinsic value, but since intrinsic value is not a universally recognized, pre-determined figure it is difficult to really assess that. McCormick is a relatively conservative pick and is likely to be able to continue to weather the economic storm since consumers often cook more at home when the economy has a downturn.
Covestor model manager John Rodgers bought Steel Dynamics Inc (NASDAQ:STLD) in his Resource and Commodity model. Rodgers adds only commodity and resource companies to this portfolio and chooses companies by looking at the sector overall to identify picks then looking at the fundamentals of the individual companies. STLD has a reasonable price to earnings ratio that is extremely attractive when looking at some competitors. The company’s stockholder equity has increased over the past three years but their net income and revenue suffered in 2009 as did their earnings per share. This week the stock has seen a decline in price though not as much a decline as its competitors.
