In the Systematic Long-Only model managed by Ascendere Associates, the goal is to find stocks and ADRs with the potential for growth at reasonable prices and a market cap greater than $2.5 billion. Let’s take a look at three different positions recently added to the model.
The first is American Express Co (NYSE: AXP). Recent economic reports show consumer revolving debt declining, but with the holiday season upon us, it’s certainly possible that this trend of decreasing debt might be reversed for at least a few months. In 2008, AXP’s interest income totaled $7.2 billion and in 2009 it decreased to $5.3 billion. Their net revenues in 2008 were $31.9 billion and $26.7 billion in 2009. During the first three quarters of 2010, AXP has already reported $22.3 billion in net revenues for the year. Their price to earnings ratio is in the middle of the range set by peers. The company’s stock price has been climbing in recent weeks, rising from a closing price of $39.03 on October 22nd to $43.56 on November 10th.
The next position added to the model is the holding company Assured Guaranty Ltd (NYSE: AGO). AGO’s subsidiaries provide various credit enhancement products. AGO has a relatively low price to earnings ratio compared to competitors and their net revenues grew from $588.4 million in 2008 to $1.5 billion in 2009 due in part to their premiums earned which skyrocketed from $261.4 million in 2008 to $930.4 million in 2009.
Finally, shares of TRW Automotive Holdings Corp (NYSE: TRW) were added to the model. TRW has a low price to earnings ratio when compared to competitors. Their net revenues fell from $15 billion in 2008 to $11.6 billion in 2009, but during the first three quarters of 2010 the company had already reported 10.7 billion in net revenues for the year.
*All prices used in this post obtained from Yahoo! Finance.
