Purchased More PDCO
Purchased additional shares of Patterson Companies at $34.80. Here is the stock selection guide.
Patterson Cos. (PDCO)
SSG and PERT A | Google “Stocks: PDCO” | Company Website
Patterson has had a somewhat mediocre year but the company seems to be on track to improve sales and earnings in fiscal year 2007. (PDCO’s fiscal year begins on April 1.) PDCO has invested in sales and marketing. With its year-end earnings report, PDCO gave earnings per share guidance for 2007 of $1.61-1.64 (about 13% growth).
Growth. Value Line projects revenue growth of about 12% while Morningstar projects 13%. The revised stock selection guide uses 12%. Future growth will come from a combination of internal growth and small acquisitions. Internally, PDCO sets a goal for growth of 4% above the market. Its dental business is currently growing faster than its other lines of business.
Quality. PDCO remains a high quality stock (although Morningstar gives it a narrow moat). Manifest Investing rates quality at 71.3 (out of 100). Value Line rates PDCO’s financial strength an “A” and it earnings predictability 100.
Valuation. Projected average return is 13.5%. PDCO has always sold at relative high PE. Its current PE is about 24. The stock selection guide uses an average future PE of 24.
We purchased PDCO in March 2003 and have enjoyed an annualized return of 12.5%. It represents 2.25% of the portfolio. This would be a good time to add to our position.
More Open-End Mutual Funds
The Wise Investor show (WMAL, Washington, DC) on 06 May 2006 with guest David Teitalbaum discussed mutual funds. Here are some of the more interesting funds. His website at www.moneybalance.com includes back editions of his free newsletters. The following links are for the mutual fund web sites and for the Morningstar analyst summary.
- Value Funds (all caps): Fairholme Fund –> FAIRX and Muhlenkamp Fund –> MUHLX
- Mid Cap Value Funds: Third Avenue Value Fund –> TAVFX and FAM Value Fund –> FAMVX
- Small Cap Value Funds Third Avenue Small Cap Value Fund –> TASCX. The program also discussed the Royce small cap funds but their best open-end fund is currently closed to new investors. The Royce closed-end funds discussed below are probably better alternatives.
- International Funds: Dodge & Cox International Fund –> DODFX and Harbor International Fund –> HAINX.
The program also mentioned www.fundalarm.com a free, non-commerical web site that helps to idenitfy when to sell a mutal fund.