money management – Page 4

Is Consolidated Water Co. Stock a Buy?

Investment research company Zacks recently reported Consolidated Water Co. (Ticker: CWCO) as a “strong buy”, but is the stock a buy?

CWCO constructs and manages water production and water treatment plants. They’re mostly found in the Bahamas, Cayman Islands, and the United States. They currently trade at a market cap of around $460 million.

The company currently has a p/e ratio (price divided by earnings per share) of 31.13 which I personally believe is pretty high. Last year, the company received $94.1 million in revenue and earned $5.86 million. The year before that they earned $66.86 million and earned around $875 thousand. The company also offers a dividend yield of 1.28%.

The reason this stock received a strong buy rating by Zacks is because they increased earnings 47.4% over the last 60 days. While that is impressive, the company does seem to be trading at a pretty hefty valuation premium still.

Looking at the stock’s fundamentals, one will find that the company currently has a price to book ratio of 2.56 and a price to sales ratio of 3.31. Both of these are traditionally viewed as very high. Looking at the company’s balance sheet, one will also find that the company has $2.38 million in total debt. This gives them a current ratio of 3.72. A current ratio this high could signal financial strength, but it could also indicate that the company is not good at investing the cash that it has.

Overall, I do believe that the company is overvalued, but most analysts do seem to place this stock between a strong buy and a buy rating. The stock is up 97.7% so far year to date at time of writing.

Join our email list to get more stock market themed posts emailed directly to you!

I created a list of the financial tools that I personally use. Check it out – https://mez.ink/cwtfinance

The Secret to Dividend Investing

When buying a stock, I look at the company’s growth to see if I will be able to sell the stock at a later date for more money than I bought the stock for. Obviously, if the business looks like it is in the decline, then I will not buy it at a premium valuation. Another thing that I look at is if the stock is paying a dividend. If a company is growing their earnings year-over-year while offering a dividend, I like that stock because I can buy into the company and get cash flow from the company that I can use to invest into other businesses. Not only will I benefit from the eventual sale of the stock, but I will be able to grow my cashflow along the way.

Many people take this idea and then try to find the stocks offering the biggest dividends. That can be a problem though. When one finds a stock offering a huge dividend, the question they should ask is why? Why is the company offering such a high dividend? One reason is often because they have to. If a company is seeing a massive decrease in share value, they might offer a bigger dividend to keep investors from selling. If one buys stock in a business at $40 a share and receives a 10% dividend but then that company decreases in value by 20%, they’re still losing money.

I like to buy into companies that are offering a dividend, but it is important that that company is still experiencing growth or at the very least not declining in growth. I also like to put high dividend paying stocks into a Roth IRA so that I do not have to pay taxes on the dividends I receive. Dividends are taxes as income which can put a good-sized dent into one’s overall return.

Enter your email down below to get more articles on investing emailed directly to you!

I created a page of finance tools that I personally use to better manage my finances. Check it out – https://mez.ink/cwtfinance

Warren Buffett Sold $8 Billion Worth of Stock. Does It Matter?

Warren Buffett’s Berkshire Hathaway has sold $8 billion worth of stock in the most recent quarter. Because of this, I have seen a ton of articles saying that this “raises fears of a crash”. Many “experts” have put out content talking about what this means or why he did it, but does it really matter at all?

While $8 billion is a lot of money, it is important to realize that that is a very miniscule amount of money for Berkshire Hathaway. As of last year, Berkshire Hathaway had $948.4 billion in assets. $8 billion is not going to make or break a portfolio like that.

I would imagine that Warren Buffett sold $8 billion worth of stock to help diversify the portfolio by trimming down a position. Either way, it doesn’t matter. If Buffett does think that the market is going to crash, selling $8 billion worth of stock isn’t really going to help him at all.

The market is very much in the green so far year-to-date meaning that a lot of people are once again trying to predict a crash. Of course, no one actually knows what the market is going to do short-term. Either way, Buffett selling a tiny fraction of his portfolio is not a clue.

Want to read more articles on the market? Of course you do! Enter your email down below!

Is SoFi’s Stock Approaching a Buying Opportunity

I have been buying shares of SoFi for a while now, and it is one of my biggest holdings in my portfolio. I bought most of my SoFi shares when it was trading at around $5 a share. The stock has been on quite an amazing run lately though as they make a lot of their money through student loan refinancing, and student loans are unpausing soon. Over the last month, however, SoFi has fallen back down by around 10%. Is the stock at a buying opportunity??

SoFi is an all-in-one finance app. They do loans, banking, investing, credit cards, and more. Their banking division has gotten a lot of their attention lately as they offer banking without having physical locations. This is attractive to investors because it keeps the costs of banking way down. Earlier this year, bank stocks massively took a hit after Silicon Valley Bank collapsed, and SoFi was no exception. That’s when I seriously cranked up my buying of SoFi as the market was being irrational.

SoFi currently sits at an $8 billion valuation. The company is not profitable, and it currently trades 4.12 times their sales. This might sound like a lot, and it definitely is, but SoFi is growing insanely quickly in both revenue and users. While SoFi is trading at quite a premium, long-term I believe it’s a good company.

My opinion is that right now, SoFi is a little overvalued. I could see the stock falling more in the short-term, but I think that long-term, SoFi shareholders will be very happy.

Want to read more articles on the stock market? Of course you do! Add your email down below!