Today let’s look at the new positions added by two different mangers—one who looks at cash flow and liabilities before adding positions and one who looks for under-priced companies that pay dividends.
We’ve talked about Covestor manager Donald Jowdy’s Suncoast Equity model here. This week, Jowdy added Visa Inc (NYSE:V) to this cash flow and low liability focused model. A quick glance at their balance sheet shows that in 2009, Visa’s liabilities were substantially reduced from their 2008 numbers; they also increased their earnings per share. But their cash flow took a big hit in 2009. The company also has a higher price to earnings ratio than many of their competitors. The stock price has recovered much of its 2009 losses but, as of the date of this post, is at its lowest price for the year.
John Fattibene is the model manager for the Domestic Dividend model. The goal of this model is to invest in under-priced, high-quality companies that pay out dividends. This week Fattibene added Paychex Inc (NASDAQ:PAYX) to the model. Paychex, a payroll and human services outsourcing company, currently has a 4.8% dividend yield. They have a higher price to earnings ratio than many of their competitors which means the stock might be overbought. The stock’s price experience most of its growth between 1990 and 2000. The stock price has been fairly rocky over the past ten years and it has never again reached its November of 2000 high price of $59.69.
