3 Stocks Warren Buffett Could Love


warren-buffett-featuredSome of the best minds in the business believe that stocks are fairly and fully valued today.

Warren Buffett was the first making the pronouncement. The Oracle of Omaha known for his value style of investing isn’t seeing many buying opportunities at the moment.

Next up is famed hedge fund manager Julian Robertson. He too sees a market at full price with little room for improvement.

Then there is little report from Society General; it says the market is likely to plunge in early 2014. Citing market prices that have reached a peak with nowhere to go but down, the bank says that Federal Reserve tapering will be the trigger for 15% move lower.

I suppose we should just throw in the towel and pack it in until things change.

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Wait! Time to go micro

Now hold on just a minute. These proclamations from some impressive sources may be scary and all, but they are macro in scope.

That means there are several micro stories that can do well irrespective of what happens with the rest of the market.

For example at the end of August, I found a little stock called INSYS Therapeutics (NASDAQ: INSY). The company showed up as a top-rated stock using a stock-rating system based on something I call the P/E Gap – the difference between a stock’s P/E ratio and its expected profit growth rate.

Since Sept. 1, INSY is up 78% as of early trading on Oct. 8. Those are huge gains and gains that can still be found in a market that is supposedly fully valued.

The PE Gap approach works because it identifies micro opportunities based on pricing inefficiencies. These pricing inefficiencies ultimately get corrected with the end result on the long side being significant gains.

Here are three stocks that are highly rated according to my P/E Gap approach ready to zoom higher in a fully valued market:

James (Jamie) Dlugosch is a contributing editor to MSN Money, The Street.com, InvestorPlace.com and Traders Reserve. He has a long and distinguished career in the investment industry that includes editorial and publishing stints with the highly rated Rational Investor, The Prudent Speculator and the current Penny Stock Winners. Jamie was a contributing editor to InvestorPlace Media where his content was syndicated to numerous on-line financial sites including MSN Money and AOL Finance. At the turn of the Millennium he was the President and CEO of Al Frank Asset Management where he honed his skills under the tutelage of the well respected guru, Al Frank. With The Rational Investor Jamie adapted Al Frank’s long-term market beating strategy to reduce risk and increase ease of use for subscribers. He was quickly rewarded for his efforts by compiling the second highest total return of all investment newsletters in 2004 according to The Hulbert Financial Digest. His investment approach has produced winning returns in competitions held by MSN Money in their long running Strategy Lab. He also has successfully raised private capital for a variety of private ventures including the purchase of Al Frank Asset Management, an investment now worth many times its original cost. Jamie is frequent guest and contributor to a wide range of financial television, radio and internet broadcasts including CNBC, Market Watch and MSNMoney. Jamie holds a B.A. in Political Science from UCLA and a Masters in Business Administration (MBA) from the University of North Carolina, Chapel Hill. He resides in Minneapolis, MN with his wife Sarah and two daughters, Julia and Ellie.

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