Summer is actually not an interesting time for stocks because no one really trades with keen interest. Stocks like Kellogg Company (NYSE:K), The Dow Chemical Company (NYSE:DOW) and Coach Inc (NYSE:COH).
Dominic Chu of CNBC discussed about the stocks that were trading at discounted prices and presented an opportunity to make profit for the buyers. The big names that were trading at discounts according to him were Kellogg Company (NYSE:K), The Dow Chemical Company (NYSE:DOW) and Coach Inc (NYSE:COH). These companies traded below their regular trading prices.
Kellogg Company (NYSE:K) is a stock from the food industry and it trades at about 13 times earnings while it usually trades much higher, about 17 times the earnings since the past 18 months. So these shares are now at at least 25% discount from a valuation point of view. So it looks a good bargain in the food segment stocks.
Dan Loeb’s Third Point LLC has taken a stake in The Dow Chemical Company (NYSE:DOW) and it has been reducing it off late. The stock trades about 13 times earnings and it normally trades 26 times the earnings over the past 5 years, so the discount for this particular stock is about 48%. So The Dow Chemical Company (NYSE:DOW) looks like a value stock for players looking into chemical stocks at bargain prices.
“It’s almost 50% off in terms of valuation, so that might be a value type pick to a certain investor who wants to go out there looking for at least some kind of a play on the chemicals or materials side of things that’s trading at a discount.” Chu stated about The Dow Chemical Company (NYSE:DOW).
People usually say that the stocks trade at discount for a reason and this applies to Coach Inc (NYSE:COH) because it has its own reasons to trade on a downside currently. However, it is still trading at about 11 times the earnings and the stock usually trades at around 17 times the earnings on average for the past 5 years. So it can still be called as a bargain stock.
Thought a lot of stocks are trading at discounts, not every one of them is bound to yield a good dividend. Kellogg Company (NYSE:K) and The Dow Chemical Company (NYSE:DOW) are on upside for some time now and bound to yield good dividends, while Coach Inc (NYSE:COH) has its problems.
“As we look towards stocks, that some investors are looking for; sometimes, they look towards valuation metrics and if they’re trading at a discount, they may be attractive to some of those investors.” Chu said how stocks like Coach Inc (NYSE:COH) might be good prospect for those looking at valuation metrics.
Disclosure: None
