Morningstar completed its review of oil prices, reducing the long-term price outlook by $5 per barrel to $70 Brent and $64 WTI. While $5 represents a relatively small adjustment, Morningstar is forecasting that crude markets will not approach any semblance of normalcy until 2017! So any quick pop in energy names is unlikely. I really like P&G here, just waiting on a solid down day to make a trade – also looking at Merck. Not as interested in ITC – it is a regulated Utility, with a rather small dividend yield.
| Name | Ticker | Price | Fair Value | Margin of Safety | Yield % | MOS % |
| Procter & Gamble Co | PG | 68.42 | 90 | $21.58 | 3.88 | 23.98% |
| ITC Holdings Corp | ITC | 32.26 | 42 | $9.74 | 2.32 | 23.19% |
| Merck & Co Inc | MRK | 52.09 | 67 | $14.91 | 3.46 | 22.25% |
| Amgen Inc | AMGN | 153.21 | 194 | $40.79 | 2.06 | 21.03% |
| Exxon Mobil Corporation | XOM | 72.69 | 92 | $19.31 | 4.02 | 20.99% |
| Wal-Mart Stores Inc | WMT | 64.65 | 79 | $14.35 | 3.03 | 18.16% |
| Philip Morris International Inc | PM | 79.47 | 92 | $12.53 | 5.03 | 13.62% |
| 3M Co | MMM | 141.26 | 160 | $18.74 | 2.9 | 11.71% |
| Coca-Cola Co | KO | 38.13 | 43 | $4.87 | 3.46 | 11.33% |
| Pfizer Inc | PFE | 32.97 | 36 | $3.03 | 3.4 | 8.42% |
| Johnson & Johnson | JNJ | 92.93 | 99 | $6.07 | 3.23 | 6.13% |
| PepsiCo Inc | PEP | 91.62 | 97 | $5.38 | 3.07 | 5.55% |
Based on the following screen:
- Stocks to Own Screen:
- Morningstar analysis available.
- Low fair value uncertainty.
- Wide moat.
- Morningstar rating 4 or more stars.
- Financial Health Grade >= B.
- Forward P/E <= 20.
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