ConAgra Foods, Inc. (CAG), Molson Coors Brewing Company (TAP): Reasons to Stay Bullish on the S&P 500

In addition to its comparative value advantages, Molson Coors also announced a quarterly dividend of $0.32 per share. First quarter earnings were much stronger than expected, and have propelled the stock to a new 52-week high with a year-to-date gain of nearly 9%. The company’s strong first-quarter sales, which beat analyst estimates by nearly 20% came largely as a result of added StarBev operations. Molson Coors Brewing Company (NYSE:TAP) has a long-term estimated EPS growth rate of 5.40%, creating an attractive opportunity for those still looking to be long in stocks.

Look for dips as new buying opportunities

Common market maxims suggest that investors should be looking for opportunities to “buy low and sell high.” With stocks trading at elevated levels, these practices become more complicated. Those with a bearish stance might argue that weakness in benchmark P/E ratios suggests a general lack of confidence for a sustainable economic recovery. In addition to this, the case can be made that the tech rally in the 1990s ultimately resulted in a market bubble that created $5 trillion in losses once the major downside corrections were seen.

But when we look closer at valuations based on profit performance, steady improvements become apparent and stock prices start to look more attractive on long term time horizons. Comparisons to rallies in recent years suggest that a more sustainable bullish scenario is in place. This means that downside corrections are likely to be limited and should be viewed as new opportunities to establish buy positions. Even with price levels in the S&P moving into the mid-1600s, share values are still relatively cheap in the broader picture.

The article Reasons to Stay Bullish on the S&P 500 originally appeared on Fool.com and is written by Richard Cox.

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