Speaker 1: These are unprecedented times in the stock market for the United States. We see stocks priced fairly high and interest rates are still next to nothing at one point five percent.
And this video, Ali, you know, three stocks that I’ve been looking at for February twenty eighteen as a value investor. I also want to let you guys know that generally most of my stocks will have been verified by what I call a quality investor, maybe Warren Buffett. It might be adding them to his portfolio. One of my trusted investing podcasts that I listen to will be looking at the stock. I honestly think this is one of the smartest ways of investing. Screen your stocks through an investor you trust and then analyze them. They’ll just post stocks out of your back pocket and then start researching. Then look at stocks that other quality investors are already recommending. But I will say this, and this is so important, nothing will compensate for you doing your own research. You need to understand why you’re investing in the first place and the stock. And the reason can’t just be because other people on this thing, on it anyway, enough of that. Let’s not wait any longer. Straight to the first stock. Pick my first stock as Target Corp.. It’s like a symbol TGT. If you’re living in America and you haven’t heard of Target, then perhaps you might want to go back to your cabin in the woods and go. Go if you know what Google is. Target is the second largest discount store retailer in the United States, selling products through its brick and mortar stores and through digital channels, but mainly through its physical stores. Let’s be honest, an easy company to understand. They buy products and sell them for a markup. But the main thing else investors want to know is what the numbers are looking like. You’re paying basically seventy seven dollars for a share in the stock and that she will give you earnings of four point seventy seven dollars. That’s about a six point one percent return, which is a decent return in the saturated market.
Now, if you look at Target’s competitors, like Wal-Mart, they’re saying, pay me one hundred dollars and we’ll give you earnings of three point seventy one dollars. That’s a higher price and less earnings. So compared to its competitors and most other stocks out there, it’s giving us a nice, stable return, which is why I’ve got them as one of my stock picks. OK, onto my second stock pick, a General Motors company ticker symbol, GM. So GM Designs makes markets and distributes vehicles across six continents and one hundred twenty five countries. In short, it’s a massive car company. GM actually also sells financial services through auto finance solutions and its retail financial sector. General Motors have recently said that they are ready to mass produce a self-driving car that has no steering wheels or pedals. Sounds interesting. Now, these cars are undergoing testing at the moment and I’m unsure when they’ll be released. But this does give GM big opportunities for growth and profits through a new sector. Let’s get into the financials so they’ve got a PE of twenty one point five one. How does this pay as misrepresented? Because in the recent quarter they have three billion dollars worth of discontinued operations, which is a non-recurring expense.
This means the earnings is pretty much three billion dollars more than it saves. I know that sounds a little bit complicated, but realistically, they should have a PE of around nine or 10 without the non-recurring items. If you get into the really fun accounting, sort of analyzing the business, you can see that it actually has some solid financials, which is why it has made my stock pick. My final stock pick is Synchrony Financial Ticker symbol. It’s why if now, as with General Motors, Synchrony Financial is a stock that Warren Buffett has been adding to his portfolio, Synchrony Financial, as a financial services company mainly geared towards consumer finance or simply a company that loans money in return for interest that the largest provider of private loan credit cards. As you can see in this image, you’re paying forty dollars for a share and the stock and it’s generating earnings of two point sixty three dollars. That’s pretty good. Now, these earnings are also growing, albeit at a very tiny right. But in general, that’s a good sign to see. The thing that I’m most happy about is that this revenue is growing at an even higher rate than the earnings.
Now, if you look at one of the big competitors, Capital One, you can see that the earnings are actually decreasing. So with regards to the competition, they’re doing better. So there you have three stocks to look at closely. Last February, let me know what you think of these stocks in the comments section below.