Has been a lot of positive pickup in auto sales in the US. She prefers General Motors (GM-N) because you can pick it up for half the price of Ford using valuations based on earnings and net position on the balance sheet. That’s also including all the pension liabilities in there.

This and Coca-Cola (KO-N) have very stable earnings streams and people love the product and don’t cut back on it. Both companies have been going into health areas. Most important part of the puzzle that drives stock returns are valuations. On this she is really not seeing much of a discount to where they have historically traded. Sees better opportunities elsewhere.

PE in the high teens. Consistently make money and have been consistently growing. As long as the business continues to do what it has been doing, that multiple will be there and the stock price will go up as much as they grow earnings. The risk to this is that if anything ever does happen to the business, the threat on the downside is that you have the valuation pulling off. Also, there isn’t really much upside if you are looking for capital gain.

Coal has been a problem for the rails. Utilities have been switching to natural gas. As well there has been a softness in China in steel production and this will be an impact for the next quarter or 2. She is looking for an entry point of $18.

US healthcare is one area that hasn’t been on people’s radar for quite a while but has been performing pretty well. Healthcare is typically one or 2 products that really drive the earnings of each company. This is an equal weighted ETF, so regardless of which company does well, as long as the overall sector does well it should do well.

Revenue is growing at a pretty good clip. Have 2 problems. Something called Virtual Good Sales makes up 15% of their revenue, which is something she does not want to touch. Also, there is a danger when you have a lot of expectations for the future. Trading at 50X next year’s earnings and she doubts they will be able to earn more in the future than they do today.

When Obama got re-elected the stock fell. Fears were on the tax side and whether income would be taxed at a different rate. Looking at the some of the 3 revenue streams including balance sheet, income from managing third-party capital and performance bonus (which is really starting to accelerate) this gives a NAV of about 20% higher. Dividend of 6.03%.

A lot of cash generation and free cash flow yield is very strong. Very strong balance sheet. Committed last year to a 50% return of free cash flow to investors. Likes companies that still have room to grow the dividend. Good balance between a very cash flow steady Eddie business on one side and newer businesses, which, last year 40% of them grew revenues at better than a 10% pace. Yield of 2.74%.