If the breakout follows through and begins a new uptrend, then I am in business. I ride it for all it is worth -- I hope for months, sometimes even years.
I also have a sell discipline, but I will cover that in other articles.
It also helps that Grainger is a large-cap dividend-paying stock. This is the number-four-ranked asset class at the current time.
Data from Best Stocks Now App In addition to performance and a healthy stock chart, I also demand a decent value. I have seen too many high PE momentum darlings crash and burn over the years.
Let's have a look at the current valuation of Grainger. Data from Best Stocks Now App The stock is currently trading at 16.9 times forward earnings. It is expected to grow by 14.4% per year over the next five years. This makes for a PEG ratio of 1.17 which is not bad. I then take next year's EPS estimate and extrapolate it out over the next five years at 14.4% per year. I then apply a multiple that I think is appropriate and come up with a five-year target price of $412 per year. This gives me almost 90% upside potential and a value grade of "A-". Grainger is currently one of my highest-rated large-cap conservative stocks. As the market gets a bit more defensive here, it should continue to do well. Speaking of doing well, I love the earnings the company reported on Tuesday! Data from Best Stocks Now App At the time of publication clients of Gunderson Capital Management are long GWW. Follow @pwstreet This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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