Value investors should approach these stocks with caution
The market is filled with companies with a lot of hype that
are touted as great investments, but Benjamin Graham taught that intelligent
investors must look past the hype and avoid speculating about a company's
future. By using the ModernGraham Valuation Model, I've selected five of the
most overvalued companies reviewed by ModernGraham.
Each company has been determined to not be suitable for
either the Defensive Investor or the Enterprising Investor according to the
ModernGraham approach. Defensive Investors are defined as investors who are not
able or willing to do substantial research into individual investments, and
therefore need to select only the companies that present the least amount of
risk. Enterprising Investors, on the other hand, are able to do substantial
research and can select companies that present a moderate (though still low)
amount of risk. Each company suitable for the Defensive Investor is also
suitable for Enterprising Investors.
Continue to read at GuruFocus to find out what Benjamin
Clark has to say about DO, HSY, NBL, OKE and PEP …