After The Bell: Name Brand Stocks That Got CRUSHED-American Greetings

Many people understand bargain shopping; except when it comes to stocks. For some reason, the average person will buy a blender on sale, negotiate a good deal on an automobile, but when it comes to stocks, people will over pay every time. Everyone loves to look at a chart of a stock that has gone up 1000% over a few years, but nobody wants to buy that lower left, best price on the chart. Why-unlike other things, buying cheap stocks is SCARY! Scary because of what makes them get cheap: earnings miss, downgrades, etc.

What I do is create a notepad file titled: Brand Name Stocks That Got CRUSHED! A person can make a living as a value fund manager by identifying these picks, then giving them time, months and months, to finally panic out the most bullish of bulls.

Today's add is American Greetings. Here is VectorVest views on AM:

Company Information
Business: American Greetings Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of greeting cards and other social expression products worldwide. It offers everyday and seasonal greeting cards, gift wrap, party goods, calendars, stationery, gift ware, and custom display fixtures.

Capital Appreciation
Value: Value is a measure of a stock's current worth. AM has a current Value of $20.78 per share. Therefore, it is undervalued compared to its Price of $13.23 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.

DY (Dividend Yield): DY reflects dividend per share as a percent of Price. AM has a Dividend Yield of 4.54 %. This is above the current average of 1.46% for all the stocks in the VectorVest database.

Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. AM has a Sell recommendation.

Conclusion: AM is most likely just beginning a 5 wave down move that will cut the shares at least in half from here. Currently with only a 500 million market cap on 2 billion revenue, paying 5% div yield to hold the stock, when the average yearly market s&p return is 7%, this play is a winner. Downside price targets can be projected, once we see this 1st leg down. Until then we keep it on our list, like a Christmas present in waiting.

Tim Kathlina