A near 52-week high you may have missed.
You can't help but wonder if it's time to buy, sell or sit tight on stocks.
There's enough negative news out there to frighten even the biggest and bravest bull. But if there's reason to be optimistic about the stock market (hint: there almost always is), we Fools will find it.
We don't actually have to look too hard. You may have missed it, but the FTSE 100 (UKX) – the guest list of the 100 biggest public companies on the London Exchange – is shedding the doom and gloom and is just a few percentage points off its 52-week high. And digging a little deeper, we see other positive indicators such as…
- Consumers are still spending (fashion retailer ASOS (LSE: ASC) just reported a great first-quarter of 2012, as did high-end brand Burberry Group (LSE: BRBY))
- Housing is recovering (as evident by the solid half-year trading statements coming in right now from some of the UK's biggest builders like Persimmon (LSE: PSN), Taylor Wimpey (LSE: TW) and Berkeley Group (LSE: BKG)
- Corporate balance sheets are flush with cash (consumer-facing big brand Unilever (LSE: ULVR) as an example, just upped its dividend 8% at the quarter).
So, it seems all is not doomed.
But should investors just ignore the macro news? And how do the experts really feel about buying stocks when the economic news is such a mixed bag?
In a new feature we've dubbed the "Market Opportunity Gauge", or MOG, I'm asking nine of my colleagues here at The Motley Fool for their take on the quality of investing opportunities in the stock market right now. Then I asked them to rate those opportunities on a scale of 0-10.
For context, these guys spend an inordinate amount of time studying companies, researching the market and digging into annual reports. (They assure me they love their jobs, which is a good thing because I plan to ask them to provide this MOG feature monthly.)
So, here's how nine Fool pros are rating the market opportunities out there today.
Introducing the MOG –
or "Market Opportunity Gauge"
David Kuo, Senior Market Analyst
MOG Rank: 7
Depressed stock markets play right into the hands of income investors when company cash flows are healthy, dividend cover remains strong but share prices are low. I am happy to give the market an above-average rating of 7 because currently I see few indications that businesses intend to cut their dividends. Don't be afraid to buy on the dips if you want to give your portfolio a welcome kicker.
Charly Travers, Investment Advisor
MOG Rank: 4
I rate the opportunities I'm seeing at a 4. Most of the businesses I admire are still selling for a premium price despite all of the difficulties facing the UK and European Union economies. I find it a bit surprising actually that the market – which is typically forward looking – is not accounting for the potential for a downturn in corporate revenue and profits over the next year or two.
That said, I don't like making broad market calls because that's a fool's game (little f). Right now, I'm looking for high-quality businesses that had resilient profits during the financial crisis so that I can be confident that no matter what happens with the Eurozone the business should come out in great shape.
Nathan Parmelee, Investment Advisor
MOG Rank: 5
I'm seeing plenty of shares that are within 10% - 20% of being attractively valued and some that are gradually heading in the right direction. But too many companies remain stubbornly expensive for me to get excited given the weakness in the global economy.
Nate Weisshaar, Senior Analyst
MOG Rank: 4
The market has somehow climbed out of the hole the most recent Euro-scare created, but I don't see anything being better than it was before. Europe isn't going to be solved for several years, economies around the world look to be slowing, and the opportunities that were appearing only two months ago have dried up. For now. I'm still looking for strong cash flow generators with exposure to growing sectors and markets, but the bargains are harder to find.
Scott Phillips, Analyst, Motley Fool Australia
MOG Rank: 7
Market pessimism presents opportunity. The market is pricing shares as if earnings are permanently depressed. That's unlikely to be the case, and now is the time to pick up quality companies at attractive prices.
James Early, Investment Advisor
MOG Rank: 4
I'll start with a caveat: Remember that an overall rating is only useful if you're buying shares overall, such as via an index fund. You're reading this because you buy individual shares – some of which are always wonderful buys – so a modest rating actually raises the importance of proper share selection.
Finding shares that are undervalued whilst modelling conservative inputs requires just a bit more effort than average, but I'm a tough grader and lean toward modest growth assumptions, especially given the ongoing uncertainty gripping the Continent. Companies with emerging markets exposure model favourably, and the market appears to be ignoring low-glamour businesses for the moment.
Owain Bennallack, Investment Analyst
MOG Rank: 7
I think the stock market is showing plenty of value. Obviously the macro picture is awful, and everyone complains about short-term risk-on, risk-off traders and bots, but bring them on, I say – this should be a perfect environment for stock picking. Numerous shares look cheap, and it's not hard to find safe places for your money with plenty of downside protection.
Perhaps the biggest difficulty is it feels like the higher-quality companies I'd ideally prefer are a little more expensive than usual, relative to the market, which means you need to hold your nose and take on some riskier plays (financials, house builders, retailers and the like) if you want to beat the market on a shorter timescale. (That's "if..."!)
Stuart Watson, Premium Editor
MOG Rank: 6
Valuations still look pretty reasonable across the board, although uncertainty about bank balance sheets and the eurozone is likely to persist for a long while yet. The June quarter looks to have been a tough one for some companies, so I'd be looking to top up if any favourite shares get sold off.
Maynard Paton, Investment Writer/Editor
MOG Rank: 7
Right now this choppy market provides plenty of blue-chip names with established track records, respectable future prospects and appealing dividend yields. I am sure a diverse collection of such equities can withstand the wider economic gloom relatively well and deliver dependable returns over time.
However, I feel today's real bargains lay among smaller companies. The downturn has thumped the valuations of shares within the market's lower reaches, and I'm convinced many small-caps offering owner-focused boardrooms, cash-flush balance sheets and resilient recession performances are there for the taking.
Foolish bottom line
The hunt for great companies trading at even greater discounts never really stops at The Motley Fool.
Luckily, the stock market is an endless source of excitement and opportunity for business-oriented, long-term investors. And, ultimately, great stock-picking will win out.
If you'd like to see the types of stocks being recommended by our experts today, you can do so at Motley Fool Share Advisor. Membership includes monthly stock recommendations, weekly updates on the stocks we recommend, and the peace of mind that your stocks are being watched by our experts. Learn more here.
Want to learn more about shares, but not sure where to start? Download our latest guide -- "What Every New Investor Needs To Know" -- it's free. The Motley Fool is helping Britain invest. Better.
Further investment opportunities:
> Jill owns shares in Unilever.