Finding the Value in Crap

It’s been a while since I have opined on the stock market.  Mostly because I have had other more important things to say.  Nevertheless, I still pay attention, and I think you should, too.  

Recently, Morningstar rated 20 stocks as “Undervalued and Sustainable,” which appeals to me because I hate overpaying for things, and want whatever I buy to be around in a decade or so - since I plan on that, too.

I went over the list (as you should, too) and found five that appear to be attractive in today's environment, and have some risk involved, with the requisite reward at the end of the supposed rainbow.

Mattel (MAT) looks like a disaster now, but their capital-allocation program has committed an incremental $250 million-$300 million to business improvements in 2017, potentially helping speed up the profit turnaround. So, if you are confident in their ability to turn the existing portfolio into a profitable enterprise, you could find a bargain here.  

HanesBrands (HBI). They aren't in the strict retail environment that is killing the likes of Macy's and Nordstrom.  Instead, they are selling products to them, and without a pure retail outlet, they may be able to make it work.  Free cash flow is still positive, and the company is buying back shares, which is a confident approach, and should attribute to earnings going forward.  Besides, who doesn't need underwear?

CapitalOne Financial (COF) This is a bit of a personal preference, since they are my bank and my credit card company.  While other companies like Visa (V) and MasterCard (MAS) have skyrocketed, CapitalOne has been left in the dust.  There is still value here. They continue to acquire assets, and our beloved Millennials continue to embrace debt and credit cards in particular, and Capital One is one of the underrated leaders in this space.

Starbucks (SBUX) Oh God, is it Starbucks?  I realize it's a retailer, and all, but despite ambitious growth aspirations, Morningstar believes Starbucks can sustain a 45%-50% dividend payout ratio over the next decade , implying mid-teens average annual dividend growth. It's hard to argue with that.

Kroger (KR) There's just something about this company that appeals to me.  I can't imagine that Amazon (AMZN) is going to kill retail altogether, so I figure that one or more has to sustain - and I think Kroger will be one of them.  If you're going to hold me responsible for any of these choices, then hold me responsible for Kroger, because I believe in the company and think that they will survive the onslaught of Amazon and the E-commerce of the 21st Century.

if you are a young investor, or have a young investor in mind, you could do worse than any of these five, or some others on the Morningstar list.  Take a look at all of them, but - in my opinion - for what that's worth, your money is best spent in these areas.

As usual, do your due diligence.

More Dribble-Drabble

Eighteen hundred and some-odd posts on this worn-out site.  Sometimes, I think I've covered it all - and other times, I think I haven't covered anything at all.  Or maybe it's both?  So, there's that.  Meanwhile, my fascination with how people connect lingers.

There's this story about the Las Vegas lunatic that shot-up a concert.  

LAS VEGAS (AP) — The girlfriend of the Las Vegas gunman said Wednesday that she had no inkling of the massacre he was plotting when he sent her on a trip abroad to see her family.   Marilou Danley issued the statement after returning from her native Philippines and being questioned for much of the day by FBI agents still trying to figure out what drove Stephen Paddock to open fire on 22,000 fans at a country music festival from his 32nd-floor hotel suite.

"He never said anything to me or took any action that I was aware of that I understood in any way to be a warning that something horrible like this was going to happen," Danley said in a statement read by her lawyer outside FBI headquarters in Los Angeles.

Well gee - no kidding.  What is fascinating about it to me is not that she had no idea, it's that he had a girlfriend to begin with.   I suppose I should be reassured, and think "Well, if a lunatic like that can have a girlfriend, then there's hope for me."  But, it's really the opposite.  If a lunatic like him can have a girlfriend, what's wrong with me?  That's the real question.

No inkling.  OK, then. 

Thank you, Julie - you beautiful soul.

Oh hell - we knew that, right? Aren't we all?

Sometimes we think we aren't worthy, even though we know we are flawed. And it makes me wonder ...

How some couples get along with being flawed and arguing over things, and others (me) can't make it through one disagreement without separating and parting ways for a lifetime.

Perhaps I watch too much TV - or not enough - that I believe couples can argue over things and still exist as a couple.  Or, perhaps I think that couples can form to begin with, which seems to be a problem, so why am I concerned with keeping something together that isn't together to begin with?

There is supposed to be a lid for every pot, but I wonder if some pots are English and some lids are metric?  It doesn't seem as simple as the lid/pot analogy makes it out to be.  I'd guess that somehow, the lids and pots that fit each other go undiscovered and their owners go a lifetime without knowing that there was indeed one of them for each of them.  It's not that difficult to comprehend.

And so, we are flawed - indeed. That is how we are made.  It is the flaws that makes the acceptance worthwhile.  After all, if we found that ideal "soul mate" that the TV ads tell us exists somewhere, then it would be easy to accept the flaws, right?  The issue comes in knowing that there are flaws and still accepting and - oh yeah - loving that person because you know that there is a soul within.  

If you are looking for someone that fits your mold, then you are playing a fools game.  We know we are flawed...

...and those of us who know that can accept the flaws in our partners - but, if the partner doesn't accept it, then we are left on our own ... and that's how it usually ends up.

Our true soul mates in life realize that we have flaws and yet - we are still worthy of love.  It's not about some earthly value.  It is about the love within us. The loyalty, and faith that we place in us that leads us toward each other.

Sadly, I have not found that yet.  I still have time, but the hourglass is running out of sand.

I feel like I am still worthy.