Since this is the final Friday of 2008, I decided to take it back to the basics…of stock valuation!
In late October I began hosting Fundamental Fridays to see if trading on the fundamentals could yield profits. So far I have used ratios like price-to-earnings (P/E), return on equity (ROE), and return on assets (ROA) to examine the valuation of four companies: Dell, Alcoa, Amazon.com and Nike.
Here are the results:

10/31: Dell (Ticker: DELL) - Recommendation: BUY, 12/24 Price: $10.65. At the time of this recommendation, shares of Dell were trading at $12.20…strike one!
11/14: Alcoa (Ticker: AA) - Recommendation: BUY, 12/24 Price: $9.39. Alcoa’s shares were trading at $11.20 …read more

In the third installment of Fundamental Fridays, TST will examine Amazon.com, Inc.
Amazon.com operates retail web sites and provides programs for third parties to sell products on its sites.  The company was founded by CEO Jeff Bezos (pictured at left) in 1994. In the past 52 weeks, shares of Amazon.com (Ticker: AMZN) have traded as low as $34.68 and as high as $97.43.  Shares closed yesterday at $47.32.  Let’s see what the fundamentals have to offer.
Valuation measures
Price-earnings - Compares the current market value per share to the earnings per share.  P/E ratio for AMZN: 28.24, P/E industry average: 16.75.  P/E sector average: 7.09. Signal: OVERVALUED
Price-sales – Compares the current …read more