Peridot Capitalist

In today’s economic and financial market climate investors have to balance a stock market that is no longer cheap and an economy that has obvious structural damage. The consensus has concluded that below-average economic growth and employment could be with us for at least several more years. Given such circumstances we must be even more [...]

Long time readers of my blog know that for several years I was a long term investor in Kmart and then Sears Holdings, which was formed after Eddie Lampert orchestrated Kmart’s merger with Sears in early 2005. The bullish reasoning behind the deal, which was largely postulated in the financial media and analyst community given [...]

This is just one of the market valuations that I have not understood in the past (and still do not at the present). Amazon is one of my favorite companies and I buy stuff on the site all of the time. My caution on the stock in recent years (due to a sky high valuation) [...]

There appears to be debate on this question, which is puzzling to me. I think many people are mistakenly under the assumption that “small, fuel efficient” cars equate to miniature so called “smart” cars that we see every so often on the road and in Europe, as opposed to simply something other than a gas [...]

The following is a research update to Peridot Capital’s Select List model portfolio. Readers may sign up for a 30-day free trial to the Select List which has outperformed the S&P 500 by more than 8% year to date.
Taking Profits in Cheesecake Factory
April 22, 2009
After a 49 percent increase in the Select’s List consumer discretionary [...]

Back in November I wrote that Best Buy would be a prime beneficiary of Circuit City’s bankruptcy and given that they were already one of the best run retailers in the country, the stock was cheap at a single digit P/E (around $25 per share). Today Best Buy reported blowout fourth quarter earnings and predicted [...]

Meredith Whitney, long time bear on the banking sector, is pointing to the possibility that reductions in credit card lines could result in a sharp drop in consumer spending over the next year or two. In a recent television interview she predicted that outstanding credit card lines in the United States would drop from $5 trillion to $2.3 [...]

In November of 2004 I wrote a piece entitled “Sleepless in Seattle” which postulated that shares of Starbucks (SBUX) were trading at such a high valuation (forward P/E of 48) that even if the company grew handsomely over the following few years, the stock’s performance was likely to be unimpressive. I projected an aggressive three-year [...]

Last weekend’s issue of Barron’s highlighted a money manager’s bullish stance on shares of luxury retailer Saks (SKS). The stock is up more than 10% since then, and now fetches $4.50 per share. The manager in question believes Saks has normalized earnings potential of 50 to 60 cents per share, which he thinks will translate [...]

Last month I mentioned I thought Abercrombie and Fitch (ANF) stock looked undervalued. A December 8th Wall Street Journal article entitled “Abercrombie Fights Discount Tide” discussed ANF’s strategy to maintain its premium brand image by choosing to accept higher rates of sales decline, relative to lower priced competitors, in order to hold up profit margins and [...]