Monday, November 21, 2005


Buy That Earnings Yield -

Ken Fisher always has a few good stock ideas to share. In his latest article in Forbes, Fisher tells about how many companies there are that can currently borrow money in the bond markets to buy back stock and to boost the companies earnings per share. Of course, another company could borrow money to take these companies over and see an accretion to earnings the very first year.

One of the stocks he mentions is NSC. This one has been a good one for my family to own. The company is running full tilt hauling coal and other goods. One of these days, I expect it to be taken over, but I'm in no hurry. At 15 times the most recent 12 months of earnings, the company is throwing off a growing earnings yield of better than 6.5%. Bonds yields do not grow but railroad earnings do! Coal will stay in high demand even if oil goes back to $40.

Jump on board and ride one or more of Ken Fisher'sbucking broncos. Hang on with all your might because the temptation will be to get off in the middle of a great ride!