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

TST’s first Fundamental Friday will analyze Dell Computer (Ticker: DELL).

I am particularly fond of Dell, as its stock financed a portion of my college education. :)  Many years ago, my mother stumbled upon Dell Computer when it was trading around $3.  Between 1992 and 1999, Dell shot up and issued seven stock splits.  Dell’s post internet bubble performance has been pretty rough.  In 2008, the stock is down about 50 percent and is now trading just above $12 per share.  Let’s take a look at the fundamentals.
Valuation measures:
Price-earnings - Compares the current market value per share to the earnings per share.  P/E ratio for …read more