According to MergentOnline, "Cardinal Health is a provider of products and services for the healthcare industry." Cardinal Health (CAH) has increased its dividend every year for 12 years straight.
Cardinal Health (CAH) is in a declining trend and is about to do a technical triple bottom. If successful, the stock of Cardinal Health will have a tremendous move up from the $27.75 level. On the other hand, if CAH cannot hold above $27.75 then the downside could take the stock to $9.60.
In June of 1997, Value Line Investment Survey said that with CAH trading at $25 the stock was expected to go to $50 by 2002. By 2002, CAH had gone to $70. In the Value Line dated May 29, 2009, CAH is conservatively expected to go to $85. If we cut that $85 in half we get $42.50 which is 42% above the current quoted price. Value Line has a mean price-to-cash flow ratio of 16. Based on 2008 cash flow figures, CAH is now selling 62% below the historical average price-to-cash flow ratio. Either the books are being cooked or this stock is ridiculously underpriced.
Applying Dow Theory to CAH gives us the following upside and downside targets:
Cardinal Health (CAH) is in a declining trend and is about to do a technical triple bottom. If successful, the stock of Cardinal Health will have a tremendous move up from the $27.75 level. On the other hand, if CAH cannot hold above $27.75 then the downside could take the stock to $9.60.
In June of 1997, Value Line Investment Survey said that with CAH trading at $25 the stock was expected to go to $50 by 2002. By 2002, CAH had gone to $70. In the Value Line dated May 29, 2009, CAH is conservatively expected to go to $85. If we cut that $85 in half we get $42.50 which is 42% above the current quoted price. Value Line has a mean price-to-cash flow ratio of 16. Based on 2008 cash flow figures, CAH is now selling 62% below the historical average price-to-cash flow ratio. Either the books are being cooked or this stock is ridiculously underpriced.
Applying Dow Theory to CAH gives us the following upside and downside targets:
- Upside
- $43.04
- $58.33
- $73.63
- Downside (focus on the downside risk)
- $28.70 (prior fair value based on 4/92 to 12/98 range)
- $23.80
- $9.60
If we were to invest in stocks the way that Charles H. Dow would then we would buy half of the intended amount now and purchase the second half if the price declines. For example, let's say that you wanted to invest $6000 in this company. What you would do is buy $3000 worth of stock now (approximately 100 shares) and hold the stock if the price goes up. If the stock goes down then you would invest the remaining $3ooo at the next level that you felt was ideal. This approach works well regardless of the market that you're in as long as you set aside the amount that you intend to invest before making the first purchase. Also, after making the first investment never invest the second half somewhere else.
The purpose of my research recommendations is to point out quality Dividend Achievers that have reached a new 52-week low. From this point begins the research to verify the quality of the stock for both short and long-term investing. These recommendations are within the context of the 2nd year of an 18-year bear market. A bear market that I expect to trade in a range between 16,000 and 5,000. Touc.
The purpose of my research recommendations is to point out quality Dividend Achievers that have reached a new 52-week low. From this point begins the research to verify the quality of the stock for both short and long-term investing. These recommendations are within the context of the 2nd year of an 18-year bear market. A bear market that I expect to trade in a range between 16,000 and 5,000. Touc.
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