No. of Recommendations: 2
Buffett asked Combs to identify a stock in the S&P 500 that met three criteria. The first: a reasonably cheap price/earnings multiple of no more than 15, based on the next 12 months’ projected earnings. The stock also had to be one the managers were at least 90% sure would enjoy higher earnings over the next five years. And they had to be at least 50% confident that the company’s earnings would grow by at least 7% annually for five years or longer.
LULU
* TTM EPS : $14.71 / share
* Stock Price : $180 / share
* PE : 12.23
* Confidence level in higher earnings in next 5 years, 75%-90%
* Confidence level in 7% growth in earnings, 50%-75%
Even last quarter (which wasn't great), sales grew at 6.5% (from 2.37B to 2.53B) (but net-income dropped 5.6%).
This has been discussed on the Falling Knives board at length...
tecmo
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