London, UK, 5th Feb 2022, ZEXPRWIRE, In the Great Stock Market Crash of 2022, it’s been growth stocks that have dominated. But you wouldn’t know this from looking at some early year highs – like when Berkshire Hathaway was considered a sure thing for investors in 2020 before crashing back down to earth just last autumn!
Grand Pacific Trade broker Johan Samuelsson says the same can be said about AT&T Inc., Coca-Cola Co., and other boring value traps who handily outperformed their relevant benchmarks over recent months while we watched all others get thoroughly beaten up…
However, if we dig a little deeper into historic patterns in the stock market going all the way back to 1926 when Benjamin Graham “The Father of Value Investing” published his seminal work Security Analysis, we can see that many stocks considered to be in vogue today have begun paying off with dividends or positive price returns for investors who held on during periods of volatility at their absolute lowest point. In this article I’ll share some of my favorite handsomely valued stocks from The Wall Street Journal’s Top Dividend Stocks page with their lowest closing prices over the last twenty years! These returns include reinvested dividends and are current up through last Friday May 24th, 2019.
For example, the Oracle Corporation (ORCL) opened the year 1999 at $4.25 per share before soaring all the way up to $30.00 by 2014 only to fall back down again near its nadir to close out 2018 at $34.15; many investors who held ORCL during that time frame were handsomely rewarded for their patience with over 1,000% total returns (including dividends)!
While this same trend can be seen in hundreds of other dividend-paying stocks historically, there are some very notable exceptions like Netflix, Inc. (NFLX) which traded as low as 2¢ per share in 2002 and exploded over 34 million percent to reach a closing price high last October above $430!
I’ve always found it easier to make money investing when a stock market or stock has been declining in value, but this is only possible if you’re paying attention when everyone else is fleeing from their positions.
Latch, a company that provides access to apartments and security systems for the buildings they are in has some incredible numbers. For starters it’s only been around since 2020 which means its key metric of total bookings should be considered accurate but also consider what happened when their first apartment building opened up last year? The momentous event brought on by this success led investors all over Wall Street predict an increase not just within revenue expectations but even more importantly profitability as well!
Latch’s stock price has exploded above $70 compared to its initial public offering (IPO) price of just $12.50 last June, but now that it’s begun trading above that same valuation the company faces a difficult next few years if their profitability doesn’t line up with today’s share price; this is known as “Price to Earning” or P/E for short and will be explained further below!
The company is expected to see a 121% increase in bookings this year, which would bring their total revenue up from $40.2 million last time around during 2019-2020 all the way towards an estimated rate at almost double with growth coming out ahead of expectations by 269%. However, while these numbers look promising on paper, they may actually turn out differently once you consider how expensively priced shares currently sit – trading at 31 times future economic value rather than 6 times which is the current average for other tech stocks.
Latch’s high valuation compared to its revenue growth suggests there could be trouble in the future between profitability between 2019-2020, or what people often refer to as “the all-too-common Catch-22” where investors buy expensive shares hoping they’ll grow fast enough to make up for their price tag but when they don’t… because of the price tag!
So, while it may feel good when your stock starts climbing higher and higher, if things pan out differently than planned you may end up facing a much larger loss later on.
Wells Fargo is a great example of how to be successful as an investor. The company has been able not only resist the urge for reinvention but also thrive, even while many other companies were struggling with their businesses during this economic downturn. It trades at just 11 times earnings which makes it easy on your pocketbook too-you’ll never lose more than what you put in!
Wells Fargo has been one of the most profitable banks in America with a Return On Asset ratio that is more than twice as high at 3%. The company also pays 1.5% dividend and stands to benefit from rising interest rates coming down 2020’s pipeline because it will lead them into higher territory sooner rather than later! With WFC making progress every day towards lifting its Federal Reserve imposed cap on assets, we can’t help but wonder if this might happen before 2022 ends? Either way-every moment counts when you’re trying not only to survive but thrive and grow your business under constrained.
It’s a great time to be an investor!
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.