Colgate

Colgate (CL) is trading between its historical valuation range, thus in my opinion, represents good value,

On a 10 year earning justified chart - Colgate appears to be currently undervalued by around 10%.

Based on discounted cash flow analysis - CL is slightly undervalued.

My over all conclusion is that CL within 5 - 10% of its fair value. This is a high quality franchise selling at a fair price. No bargain - but a quality company.

Starbucks

SBUX is currently trading at a PE of 33.
Starbucks median PE over the last 10 years is 36.1 and over the last 5 years it is 28.3. Thus from a PE view point - the price is not out of line esp. given sbux's opportunity in expanding internationally. For perspective SBUX market cap is 39 billion and MCD's market cap is 98.3 billion.

>On a discounted cash flow basis SBUX is over-valued.

On earning justified basis - sbux continues to deliver earnings - therefore justifying its valuation. It is however priced to perfection (but not outrageously so) and if there is a stumble the stock can quickly go down 10 to 20% (which would be a buy in opinion). As long as SBUX continues to deliver it will be chased by momentum investors. The stock could go up another 10 - 20% based on earnings justified momentum.

(click on chart to expand)

As shown below SBUX continues to trade well within its p/e, p/s, p/b ranges so the value is justified.

The Procter & Gamble Company

P&G is trading close to the lower bounds on its valuation bands.

Using the DCF calculator - I arrive at a value of around $80.

Using p/e and p/s jusified earnings I come to a value around $75.00.

Meadwestvaco Cp (MWV)

In the figure below, I have drawn eps justified price for MWV using a P/E ratio of 20 and plotted it against price. MWV earnings are extremely cyclical - you can see clear peaks and valley's. MWV's earnings have started to drop. If history repeats itself there will be an opportunity to pick these shares up at a much greater discount.



MVW is trading at the higher end of the P/B and P/S bands.

Johnson & Johnson Inc.

JNJ is trading neat the lower bounds of its 10 year valuation bands.

Based on median P/E, P/S and P/B justified price over 5 years JNJ is worth around $75.

Based on discounted cash flow analysis it is worth around $90.

I am valuing the stock at around $80.

Pepsi

Coca- Cola

KO Discounted cash flow analysis gives a value of ~$80.

P/E and P/S justified price is between 70 to 90.

Cisco

Cisco is trading close to the low of its 10 year valuation bands.


Discounted cash flow valuation of Cisco:

Price/earnings and price/sales justified price is between 25 to 30.