Of course, 1974 was the year of the OPEC oil embargo. Gasoline prices skyrocketed, sending shock waves through the economy. As a result, U.S. automobile production was 24% lower than the year before. It was also the year that President Nixon resigned as a result of the Watergate scandal. It's hard to believe that such an upbeat advertising campaign was launched in the midst of so much economic and political calamity. But as another U.S. president, Calvin Coolidge, once proclaimed: "After all, the chief business of the American people is business." Since then, GM has seen its fortunes rise and fall. After emerging from bankruptcy nine years ago, shares of GM have been stuck in neutral while the overall stock market has more than doubled in value. That may soon change. Now priced at only six times forward earnings, GM appears undervalued. Its price-to-earnings/growth (PEG) ratio of 0.35 is far below the 1.0 limit legendary mutual fund manager Peter Lynch considered a fair price to pay for a growth stock. I like GM at that price. Here are three more stocks I'd add to my "Independence Day" portfolio to complement the all-American themes from that iconic advertising jingle. Baseball There aren't any pure plays when it comes to investing in baseball. Sure, you could buy a major league franchise if you happen to have a few billion dollars lying around. If you don't, capitalizing off the considerable television revenue that it generates may be your best bet. In that regard, I like Sinclair Broadcast Group (NSDQ: SBGI) as a play on baseball. Two months ago, Sinclair purchased a package of regional sports networks from the Walt Disney Company (NYSE: DIS) for $10.6 billion. After this deal is consummated, Sinclair will own the broadcasting rights to 14 Major League Baseball teams. Although SBGI has already doubled in value this year, it does not appear overvalued priced at less than 11 times forward earnings. Sinclair pays a quarterly cash dividend of 20 cents, which works out to a yield of 1.5% at a recent share price of $55. Look at this way; the next time you pay $11 for a lukewarm beer at a baseball stadium, at least you may be getting some of that money back the next time Sinclair pays you a dividend. |
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