When it comes to investing in stock market or mutual fund, many of us hesitate to invest in stock markets. First thing that comes into our mind is that what will happen to our invested capital if market again crashes like it had crashed in 2008. Would we lose all invested capital or would our portfolio perform even in falling markets? These are normal questions which haunt us now before investing. People prefer to invest their money in government securities, FDs or any instrument returning a fixed yield rather than investing in stock markets or mutual funds.
Before 2008 market crash many of the investors were blindly investing in equity markets. More than 90% of their portfolio was into equity stocks or equity MFs. A lot of them have made good money in the stock market. However, after market crash millions of investors had to suffer great losses, lose back their profits, or have un-expected returns in their portfolios all because they had no plan, no coherent strategy for managing their assets, for obtaining a reasonable and consistent return, and managing or minimizing their risk; their greed made them blindly chase the hottest cake in town. However many of them have changed their view while investing. So the most buzzing question everyone is asking as to whether mutual funds are safe for investment? Let's have a look at some investment strategies which may help your portfolio sustain the next big market crash like the one we had in 2008.
Do not put your all eggs in one basket
In today's volatile markets, it makes sense to spread your investment across asset classes. Diversifying your investments can prove to be a great boon for you when one of the asset class enters its downward journey. If you diversify your portfolio, your overall portfolio performance should deviate less because losses from some investments are offset by gains in others. Therefore, you would face lesser risk than a person who puts all their money in any one type of asset class such as stocks, bonds, government securities and FDs. Diversification also makes sense because no single asset class performs best in all economic environments.
Invest in GOLD
Gold is an alternate instrument to invest. For several reasons gold has proved as good investment tool. The most important amongst them being that the value of gold as a commodity is an excellent store of value. If your grandfather had a kilo of gold dug down under the ground, and you re-discover it after decades, the same gold would help buy the same amount of goods for you that your grandfather would have been able to buy at his time. Gold value depends a lot on global demand and supply. The gap between which has been narrowing down uninterruptedly for very long periods of time. The value increase has always covered the price of inflation, making gold one of the few investments able to protect against currency depreciation. Equally important is the fact that the gold is very liquid, meaning that there will also be buyers for gold, no matter the economic difficulties the rest of the global economy goes through. You will be able to exchange gold for any currency in any part of this world.
Follow Asset Allocation
"Asset allocation" is dividing your portfolio among stocks, bonds, real estate, cash, and other investments according to your risk profile. Historically it's rare that all asset classes lose money at the same time. Spreading your money across investments will help lower the volatility of your portfolio. So it would be recommended to spread your risk our different asset class and most importantly STICK to it. Don't you regret withdrawing from your bond funds and investing into equities in 2007 when in the very immediate year stocks went crashing and bonds rewarded its loyal followers?
1 2
.gD_15nRedN{font:15px/20px Arial;color:#FF0000 !important;text-decoration:none;font-weight:normal;}
.gD_15nRed{font:15px/20px Arial;color:#FF0000 !important;text-decoration:none;font-weight:bold;}
.GoogleNewsTitle{font:14px/16px Trebuchet MS,Arial,Helvetica,sans-serif;color:#005066;text-decoration:none;} .GoogleNewsTitle:hover{text-decoration:underline} .GoogleNewsURL{font:12px Trebuchet MS,Arial,Helvetica,sans-serif;color:#000;text-decoration:none;} .GoogleNewsURL:hover{text-decoration:underline} .GoogleNewsTitleLine{font:20px/22px Trebuchet MS,Arial,Helvetica,sans-serif;color:#F01414;text-decoration:none} .GoogleNewsTitleLine:hover{text-decoration:underline} .GoogleNewsLineURL{font:12px family:Trebuchet MS,Arial,Helvetica,sans-serif;color:#000;text-decoration:none} .GoogleNewsLineURL:hover{text-decoration:underline}
Tags: stock market, mutual fund, crashed in 2008, GOLD, Asset Allocation
Know the finer points in clubbing income with spouse
Hilton Worldwide launches new global careers website
.scroll_hv .panel{width:250px !important; padding:10px 10px 25px !important} #scroll13{width:540px;} .hv_bx{margin-left:-10px;} .tab_data1{padding:0px;}
Mylan Inc. (MYL) recently announced that it has been sued by the privately held Aptalis Pharma. The patent challenge follows Mylan's filing of an abbreviated new drug application (ANDA) as it seeks to market its generic version of Aptalis Pharma's ulcerative proctitis drug Canasa (mesalamine). Mylan believes it may be the first-to-file an ANDA for a generic version of Canasa – if this is the case, Mylan would be entitled to 180 days of exclusivity on gaining approval from the US Food and Drug Administration (FDA) for its candidate. As per IMS Health data, Canasa sales in the US were $153 million for the twelve months ended Mar 31, 2013. Mylan, one of the largest players in the global generics market, has a presence in more than 140 countries. As of Jul 11, 2013, the company had 173 ANDAs pending FDA approval, representing $82.9 billion in annual sales. These include 35 first-to-file opportunities. Generic third-party net sales, derived from sales in North America, Europe, the Middle East & Africa and Asia-Pacific, came in at $1.41 billion in the first quarter of 2013, accounting for bulk of the company's total revenues. Mylan's generics business has been consistently performing well. Mylan's generic unit has seen quite a few launches over the past few months. One of the important recent launches includes the company's generic version of Pfizer Inc.'s (PFE) erectile dysfunction drug Viagra. Dr. Reddy's Laboratories Ltd. (RDY) too has been making multiple generic launches over the past few months. Mylan carries a Zacks Rank #2 (Buy). Simcere Pharmaceutical Group (SCR) appears to be equally attractive.
The stock market today has to contend with not-so-bad data out of China, but decidedly bad Retail Sales numbers on the home front. Investors will be looking for the market to build on last week's record close as the Q2 earnings season gets into high gear and Bernanke provides further clarification on the 'Taper' issue in testimony before Congress later this week.
On the earnings front, Citigroup's (C) better than expected report this morning following strong reports from J.P. Morgan (JPM) and Wells Fargo (WFC) on Friday sets us up the stage for a slew of banking sector earnings this week. Q2 earnings growth is resting solely on the banking sector and the group appers on track to come through on the promise.
China's in-line second quarter GDP growth rate of 7.5% provides further confirmation of a decelerating trend in the world's second largest economy, but it should ease some of the worst fears that suspected an even weaker showing. The country's new leadership team hasn't shown any nervousness about the slowdown as they move the economy away from investment-led growth and more geared towards domestic consumption.
To that end, today's data offers some promising signs as retail sales accelerated in June from the prior month's growth pace. But any shift in the economy's orientation will likely be a long-drawn and multi-year process as the the apparent retail sales momentum of 13.3% in June vs. 12.9% in May is mostly due to inflation. Importantly, consumption as a share of GDP fell in the first half of 2013 from 2012's level
China's retail sales data may or may not be showing momentum, but there are no questions about the weak tone of the June U.S. Retail Sales data from this morning. The Retail Sales disappointment runs counter to the positive momentum in the labor market and broader measures of consumer confidence. This will likely prompt further downward revisions to Q2 GDP estimates, which was steadily coming down in recent weeks to! begin with.
But the Q2 GDP weakness is not unexpected as consensus estimates all along expected the growth pace to bottom in the second quarter and accelerate back from Q3 onwards. The 'Taper' narrative reflects this growth outlook as well and we will find a bit more on how the Fed views the economy from Bernanke's Congressional testimony later this week.
Goldcorp Inc. (GG) has stopped construction work at the Eleonore gold project in Quebec. The company has also started to evacuate the employees due to forest fires in the James Bay region. According to Goldcorp, a fire, located roughly 100 kilometres from Eleonore, is progressing with prevailing winds toward the mine site. Goldcorp is working with local and provincial authorities so that the health and safety of all people in the area is ensured. The company will also keep a team at the site to manage and implement preventive emergency measures. Recently, Freeport McMoRan Copper and Gold Inc. (FCX) also announced a force majeure on shipments from the PT Freeport Indonesia (PT-FI) Grasberg mine. This ensued after a tunnel collapsed in the mine on May 14, claiming 28 lives. Though the accident had spared the area of operations, Freeport temporarily suspended mining and processing activities as part of the rescue and recovery operation. However, the company has resumed open pit mining, and concentrating activities at its Grasberg operations in Papua after it received approval from Indonesia's Department of Energy and Mineral Resources (DEMR). Goldcorp is one of the world's fastest growing senior gold producers and it provides its shareholders with superior returns from high quality assets. Goldcorp's first-quarter 2013 adjusted earnings (excluding one-time items) of 31 cents a share missed the Zacks Consensus Estimate of 40 cents and were well below 50 cents a share earned in the year-ago quarter. Profit, as reported, amounted to $309 million or 33 cents per share in the reported quarter, down roughly 35% from $479 million or 51 cents in the prior-year quarter, hurt by a double-digit decline in sales. Goldcorp posted revenues of $1.02 billion in the quarter, down roughly 16% year over year. It missed the Zacks ! Consensus Estimate of $1.39 billion. Goldcorp currently carries a Zacks Rank #3 (Hold). Other companies in the mining industry with favorable Zacks Rank are Brigus Gold Corp (BRD) and Lake Shore Gold Corp. (LSG). While Brigus Gold retains a Zacks Rank #1 (Strong Buy), Lake Shore carries a Zacks Rank #2 (Buy).
Whether a buy and hold investment strategy is a good idea or not is one of the most hotly debated investing concepts. From our point of view, the best answer as to whether buy and hold is a good strategy or not is that it primarily depends on the specific company or companies being considered. In other words, there are some companies that can and should be bought and held and conversely, there are companies that should not. And, equally important, you could pay too much for even the best company. Therefore, the principle of valuation is a second component behind implementing a viable buy and hold strategy. This logically moves us to the question of how do we define exactly what a correct, or good, buy and hold company is. Once again, the answer will be dependent to a great extent on the goals and objectives of the individual investor. For an income investor, the current yield coupled with the company's history of dividend growth would be important considerations. On the other hand, the aggressive growth investor will be most concerned with earnings growth and the price they have to pay to buy that growth. There are many nuances and calibrations between the pure income investor versus the pure growth investor that need be applied in order to correctly answer the question regarding exactly what is a good buy and hold company. The points we are endeavoring to illustrate are that buy and hold is an excellent strategy if it's properly executed. This means finding companies with the right characteristics to meet your goals and objectives, and then having the discipline and prudence to only invest in them when they make good economic sense. When this is done correctly, buy and hold is capable of producing appropriate returns at controlled levels of risk. And perhaps the most critical point is that the decision as to whether buy and hold is a smart idea or not is a question of specifics, not generalities. One of our pet peeves is how people attempt to argue the laurels of a buy and hold stra! tegy by providing evidence based on general markets or indices. Frankly, there are always a lot of companies in every index that should not be bought and held. Executing a Smart Buy and Hold Strategy for Growth Since pure growth stocks typically do not pay dividends, the pure growth investor's only real source of return is capital appreciation. Therefore, if your investment objective is growth, we believe there are several critical metrics that should be measured and focused upon. The first would be the rate of change of earnings growth, because capital appreciation will be solely a function of the marketplace capitalizing future earnings. Next, it's important to understand that the price or value you pay to buy the future earnings growth will have a great impact on both the return and the risk you take to generate it. Finally, the consistency or reliability of the company's record of earnings growth will usually correlate to how consistently the marketplace prices the company's stock. Therefore, when attempting to identify above-average growth stocks we place a very high premium on what we like to call the confidence factor. Our confidence will increase based on the consistency and the duration a respective company's earnings growth achievements. Also, in addition to being consistent, we also seek above-average rates of growth. Our own research indicates that an above-average earnings growth rate of 15% to 20% is both achievable and sustainable for truly above-average businesses. There are some growth stocks that can even grow faster than this, but they are very rare. Furthermore, although the law of large numbers will inevitably take its toll, well-positioned companies in appropriate industries can grow at these high rates for decades. An appropriate industry is one that facilitates the company's ability to grow based on its market opportunity and/or advantages such as patent protection, etc. Diagnostic Testing and Clinical Laboratories - A Reliable Growth ! Industry To forecast future earnings growth with any degree of accuracy, it seems logical to place great emphasis on recognizing major future investment opportunities. One way to identify growth opportunities is through the study and monitoring of demographics. For example, we believe that a great opportunity exists from understanding the economic impact of our population's current bi-modal distribution, namely, the graying of America and the baby boomer generation. Understanding the consumption tendencies of these and other demographic segments allows us to make informed forecasts as to the future health of several industries that will serve these large and growing markets. Of course, healthcare naturally comes to mind when looking for growth opportunities available from an aging population. On the other hand, healthcare is rapidly becoming politicized and, therefore, seekers of profitable growth need be very discerning. On the other hand, the demographic forces behind healthcare as a growth industry are obvious and undeniable. But as we will soon illustrate, diagnostic testing and diagnostic testing laboratories are a small part of the huge healthcare pie, but this industry has a large influence on the outcomes and utilization of the entire healthcare segment. Three Growth Stocks in a Well-Defined Growth Industry Modern medicine has come a long way from the days of the home visit from the family doctor with his little black bag of medical supplies. In modern times, the proper diagnosis and treatment regimens have become far more efficient and applicable thanks to the results from tests performed in the clinical laboratory. The ability to pinpoint the exact presence or absence of disease provides the data needed to prescribe the most effective treatment. This not only supports better patient outcomes, but also reduces costs from providing unnecessary or improper treatment therapies. In summary, laboratory tests play an important role in the detection, diagnosis, and tr! eatment o! f many diseases. But most importantly, it's cost effective and supportive of better patient outcomes and results. There are many healthcare experts and professionals that would agree that the practice of modern medicine would be impossible without the tests performed in the clinical laboratory. From an investor's point of view, these facts support an attractive growth industry to examine further. This article will look at three leading companies in the important diagnostic testing industry. About Bio-Reference Laboratories, Inc. taken directly from their website BRLI is a clinical testing laboratory offering testing, information and related services to physician offices, clinics, hospitals, employers and governmental units. We believe that we are the fourth largest full-service laboratory in the United States and the largest independent regional laboratory in the Northeastern market. BRLI offers a comprehensive list of laboratory testing services utilized by healthcare providers in the detection, diagnosis, evaluation, monitoring and treatment of diseases. BRLI primarily focuses on esoteric testing, molecular diagnostics, anatomical pathology, women's health and correctional health care.[quote] The following slide taken from the company's investor presentation provides an excellent summary of Bio-Reference Laboratories' business model that includes important niches. We especially like the opportunities from their genetics business Gene Dx. We believe that designer medicine based on DNA sequencing represents a major long-term growth opportunity. Since being acquired by Bio-Reference Laboratories in 2006, this specialized genetic laboratory has already grown over six-fold. With that said, we see growth potential over their entire spectrum of Bio-Reference Laboratories' clinical laboratories.  [ Enlarge Image ] Bio-Reference Laboratories Inc. (BRLI): A H! istory of! Consistent Strong Earnings Growth The following plotting of earnings per share growth (the orange line) since calendar year 2002 speaks volumes to the strength of this small but powerfully growing business. Of the three companies we will highlight, Bio-Reference Laboratories (BRLI) is the smallest but also the fastest-growing of the three. A quick glance of their historical earnings growth shows remarkable degree of consistent above-average growth averaging almost 25% per annum.  [ Enlarge Image ] When we introduce monthly closing stock prices to the equation we discover that stock price has closely tracked earnings per share growth over the years. However, although healthcare reform has apparently driven their stock price to historically low valuations it has thus far had very little effect on operating earnings growth. We would argue that this price drop is therefore unwarranted based on the idea that testing companies such as Bio-Reference Laboratories (BRLI) are part of the solution to out-of-control healthcare costs, not part of the problem.  [ Enlarge Image ] The historical performance for this strong growth company has provided shareholders a rate of return far in excess of the S&P 500. (As we were preparing this article for submission, Bio-Reference Laboratories reported an extremely strong first-quarter earnings report that has sent shares soaring find the link here.  [ Enlarge Image ] This next graph is drawn from the calendar year 2007 to current illustrates that recent earnings growth has remained extremely strong even considering the hangover from the recent recession coupled with threats of healthcare reform. Consequently, we believe ! the curre! nt stock valuation represents an uncommon opportunity to buy strong growth at a very attractive price.  [ Enlarge Image ] The following Estimated Earnings and Return Calculator show that five analysts covering this company expects future growth of 16% per annum. Frankly, we believe those estimates are understated and that the recently reported first quarter results backup our view.  [ Enlarge Image ] About Quest Diagnostics (DGX) taken directly from their website [quote]Quest Diagnostics is the world's leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is a pioneer in developing innovative diagnostic tests and advanced healthcare information technology solutions that help improve patient care." The following slide from Quest Diagnostics' investor presentation highlights the capabilities and opportunities of this the largest provider of diagnostic testing information and services. We believe this company is very well-positioned for future above-average long-term growth, and is the only company in this group of three that pays a dividend.  [ Enlarge Image ] A quick glance at their earnings record since 2002 shows that the company did experience very moderate earnings pressure just prior to the recession, but during the recession and after the recession earnings have held up reasonably well.  [ Enlarge Image ] When you bring monthly closing stock prices into the equation, we once again discover the importance of earnings. The correlation between price and earnings is very clear, and the impact of a slowing growth rate is also revealed as stock prices have fallen to historically low valuations.  [ Enlarge Image ] However, even with historical valuations at their lowest levels, Quest Diagnostics (DGX) was still able to dramatically outperform the S&P 500 since calendar year 2002. On the other hand, it's important to notice that the recent slowdown in earnings growth has caused them to freeze their dividend since calendar year 2007 at $.40 a share. But even more importantly, note that Quest announced a 70% increase in the dividend to $.17 per share, and further announced that they are no longer looking to make large or even midsized acquisitions. Instead, the board expressed a desire to focus on improving the businesses that they've already acquired. Therefore, the board also stated that they plan to return most of their cash flow to shareholders through a combination of dividends and share repurchase.  [ Enlarge Image ] The following earnings, price and dividend graph on Quest Diagnostics (DGX) since calendar year 2007 shows that stock price has reacted appropriately to their slowing earnings growth. On the other hand, perhaps the markets have been overly negative and, therefore, their share price is currently available at a better value than it has been in years.  [ Enlarge Image ] The consensuses of 22 analysts reporting to Capital IQ expect earnings growth to resume to double! -digit ra! tes from calendar year 2013 and beyond. Therefore, if this were to happen, Quest offers shareholders the opportunity for double-digit returns, including dividends, over the next several years.  [ Enlarge Image ] About Laboratory Corporation of America (LH) taken directly from their website Laboratory Corporation of America® Holdings, an S&P 500 company, is a pioneer in commercializing new diagnostic technologies and the first in its industry to embrace genomic testing. With annual revenues of $5.5 billion in 2011, over 31,000 employees worldwide, and more than 220,000 clients, LabCorp offers more than 4,000 tests ranging from routine blood analyses to reproductive genetics to companion diagnostics. LabCorp furthers its scientific expertise and innovative clinical testing technology through its specialized labs and the LabCorp Specialty Testing Group: The Center for Molecular Biology and Pathology, National Genetics Institute, ViroMed Laboratories, Inc., The Center for Esoteric Testing, Litholink Corporation, Integrated Genetics, Integrated Oncology, DIANON Systems, Inc., Monogram Biosciences, Inc., Colorado Coagulation, and Endocrine Sciences. LabCorp conducts clinical trials testing through its Esoterix Clinical Trials Services division. LabCorp clients include physicians, government agencies, managed care organizations, hospitals, clinical labs, and pharmaceutical companies. The following slide taken from Laboratory Corporation of America's (LH) investor presentation provides a great summary of both the long-term opportunity for healthcare in general, and the relevance and importance that laboratory testing offers investors. We feel that the most important point this slide provides is that the cost of laboratory testing relative to the overall healthcare spend is small, but at the same time its importance to the industry is huge. Consequently, we believe that diagnostic test! ing will ! play an important role in the long-term future of our healthcare needs.  [ Enlarge Image ] The following plotting of earnings per share growth since calendar year 2002 shows that Laboratory Corp. of America (LH) has produced a very consistent record of earnings growth exceeding 15% per annum. As previously stated, investors seeking long-term growth are looking for companies that are capable of producing exactly this kind of earnings record, but they are rare. It is precisely this type of consistent earnings growth that supports a buy and hold candidate.  [ Enlarge Image ] When monthly closing stock prices are added to the equation, we once again discover a very high long-term correlation between the direction and velocity of earnings and the movement of stock price. Although there will always be short-term volatility of stock price movements, inevitably the price will follow the profits.  [ Enlarge Image ] When reviewing the long-term operating performance of Laboratory Corp. of America (LH) we discover that it's only the overvaluation that existed in calendar year 2002 that caused shareholder returns to be less than earnings justified. On the other hand, even overvaluation did not keep this consistent grower from generating a rate of return that was significantly greater than an equal investment in the S&P 500.  [ Enlarge Image ] When we look at Laboratory Corp. of America over the shorter time frame, 2006 to current, we once again see a beginning valuation that was in excess of what earnings justified. However, we also see that stock price inevita! bly moved! back to earnings, and have tracked earnings ever since, notwithstanding a brief bout of overvaluation in calendar year 2011.  [ Enlarge Image ] The consensuses of 16 analysts reporting to Capital IQ expect Laboratory Corp. of America (LH) to resume growing earnings at the rate of 12% per annum over the next five years. Consequently, we would argue that Laboratory Corporation of America (LH) appears very attractively valued at current levels.  [ Enlarge Image ] Summary and Conclusions We believe that growth stock investing does contain a higher level of risk than is encountered when investing in blue-chip dividend paying stocks. On the other hand, if purchased at appropriate valuations, the power of compounding enables growth stocks to deliver much higher long-term returns than the average dividend paying company. But obviously this potentially stronger performance comes at a higher level of risk. Therefore, in order for this to happen, we further believe that the level of growth must be above-average and consistent in order for superior performance to be achieved. With the above said, we believe that the diagnostic testing industry offers investors the opportunity to find quality companies that can grow at above-average rates. Moreover, we believe that the three candidates discussed in this article are currently available at attractive valuations offering long-term above-average performance at reasonable levels of risk. Quest Diagnostics does provide a middle ground that may appeal to the dividend growth investor in need of more growth today with more income later. Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit! transact! ions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
LONDON -- A popular way to dig out reasonably priced stocks with robust growth potential is through the "Growth at a Reasonable Price," or GARP, strategy. This theory uses the price-to-earnings to growth ratio to show how a share's price weighs up in relation to its near-term growth prospects -- a reading below 1 is generally considered decent value for money. Today I am looking at AstraZeneca (LSE: AZN ) (NYSE: AZN ) to see how it measures up. What are AstraZeneca's earnings expected to do? 2013 2014 | EPS Growth | -19% | -5% | | P/E Ratio | 9.9 | 10.4 | | PEG Ratio | n/a | n/a | Source: Digital Look. AstraZeneca is expected to post further earnings declines both this year and next, following on from 2012's 12% earnings per share drop. As a consequence the pharma play does not offer a valid PEG rating during the next two years. The firm does, however, boast a price-to-earnings to growth ratio below the value benchmark of 10 for this year, although this is expected to edge above the threshold in 2014. Does AstraZeneca provide decent value against its rivals? FTSE 100 Pharmaceuticals & Biotechnology | Prospective P/E Ratio | 16.9 | 76 | | Prospective PEG Ratio | 4.7 | 2.5 | Source: Digital Look. Although AstraZeneca cannot be compared with the average of its FTSE 100 and pharmaceuticals counterparts on a PEG basis, at face value the company does appear cheap in terms of its P/E rating. Still, I believe that it is worth comparing the firm with GlaxoSmithKline, as a cluster of firms distort the entire pharma sector's readings. GlaxoSmithKline, which is expected to post EPS growth of 4% this year, carries a P/E rating of 14.5 and a PEG rating of 3.6. Although these metrics preclude GlaxoSmithKline from being considered a GARP stock, it has a decent product pipeline to deliver longer-term growth which AstraZeneca does not. Indeed, AstraZeneca's low rating can be attributed to fears over patent expiries, which are expected to last over the medium term at least. This not only rules out the firm as a viable GARP play, but the issue puts the firm at jeopardy of strong earnings pressure well into the future. Customizable conclusion
AstraZeneca has come under relentless pressure in recent years as its stable of products have lost patent protection. Last week, the U.S. authorities issued a temporary injunction banning the distribution of generic versions of the firm's Pulmicort Repsules medicine, which is used to combat asthma, after AstraZeneca appealed against an earlier ruling that rendered its patent invalid. But the company is fighting a losing battle as its drugs portfolio come under increasing attack. The loss of exclusivity in key regional markets for its Seroquel IR, Atacand and Crestor products in quarter one were decisive factors in AstraZeneca's 12% revenues fall, to $6.4 billion, a result that pushed profit before tax 31% lower to $1.3 billion. The pharma giant has announced massive transformation plans to boost R&D and deliver future growth, but this is expected to take years to turn the company's fortunes around. The inside track to hot stocks growth
If you do not like the look of AstraZeneca and are looking to significantly boost your investment returns elsewhere, check out this special Fool report, which outlines the steps you might wish to take if you are hoping to become seriously rich from other shares. Our "Ten Steps to Making a Million in the Market" report highlights how fast-growth small-caps and beaten-down bargains are all fertile candidates to produce ten-fold returns. Click here NOW to enjoy this exclusive "wealth report" -- it's 100% free and comes with no obligation.
Dividend checks continue to get fatter in corporate America, as more companies jack up their distribution rates. Readers of the Income Investor newsletter can certainly appreciate that kind of thinking. Let's take a closer look at some of the companies that inched their payouts higher these past few days. We can start with International Game Technology (NYSE: IGT ) .�The leading provider of gaming machines and systems for the casino industry is giving its investors more slot machine money. It's been more than four years since IGT abruptly slashed its quarterly dividend to $0.06 a share as the gaming industry reacted to the global recession. That's where the payout remained until late last year, when IGT bumped it up to $0.07 a share. That became $0.08 a share three months ago, and it's now up to $0.09 a share now. We're still a far cry from IGT's 2008 quarterly rate of $0.145, but there's nothing too shabby about three dividend increases in the past seven months. Top 5 Casino Companies To Watch For 2014: Penn National Gaming Inc.(PENN) Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania. Advisors' Opinion: - [By Quickel]
Penn National Gaming(PENN) squeaked past its guidance through improved cost controls, and investors praised its efforts. But expectations were low, and its upbeat outlook shouldn't be viewed as a message that regional markets are recovering. "Going forward, we project soft regional gaming revenue results over the next three to six months, as we do not expect to see a significant increase in consumer spending patterns given the uncertain economic environment," J.P. Morgan analyst Joseph Greff wrote in a note. Penn National raised its full-year earnings guidance to $1.18 from $1.13 a share, and up its revenue outlook by $26 million to $2.44 billion from $2.41 billion. During the second quarter, the company earned $9.2 million, or 9 cents a share, compared with $28.5 million, or 27 cents, in the year-ago period. Excluding items, Penn actually earned 29 cents a share, a penny higher than estimates. Revenue rose 3% to $598.3 million, higher than the $597.1 million Wall Street projected. The upside was driven by both better revenues and margins and was generally broad-based across many properties, especially larger venues in Charlestown, Lawrenceburg and Grantville, Pa. Penn National rolled out table games in West Virginia and Pennsylvania during the quarter, which should be a growth catalyst moving forward. The company also plans to open a slot facility in Maryland on Sept. 30 and expects its Toldeo, Ohio, location to open in the first-half of 2012. Its Columbus project is slated to open in the second-half of 2012. The company repurchased 409,000 shares during the quarter. "[This] sends a message to investors on the value of its equity, but perhaps indicating the lack of near-term acquisition opportunities," J.P. Morgan analyst Joseph Greff wrote in a note.
Top 5 Casino Companies To Watch For 2014: Pinnacle Entertainment Inc.(PNK) Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L'Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada. Advisors' Opinion: - [By Jeanine Poggi]
Pinnacle Entertainment(PNK) was the great transition story of 2010, with shares spiking about 45% this year. The regional casino operator's most impressive story has been in its gross margins, as management, under the leadership of new CEO Anthony Sanfilippo, is in the process of increasing the company's operating efficiencies and prudently allocating capital. Analysts believe Pinnacle is in the early stages of this process, and will continue to drive revenue growth. In its third quarter, Pinnacle reported a surprise profit of 10 cents a share on an adjusted basis, better than consensus estimates of a loss of 7 cents. Revenue grew 15% to $287.8 million, while property-level margins reached 23.4%, also ahead of forecasts. Last month, Pinnacle purchased Cincinnati's River Downs Racetrack for $45 million. The deal includes 155 acres, 35 of which are still undeveloped. The transaction is expected to close by the end of the first quarter of 2011. This deal could generate significant returns in the event that Ohio decides to legalize video lottery terminals at racetracks, Santarelli said. Pinnacle is also in the process of looking for a buyer of its oceanfront land in Atlantic City, where it originally intended to build a $1.5 billion casino, before squelching plans. The casino operator bought the land in 2006 for $270 million from groups affiliated with Carl Icahn and later added another piece of land for $70 million. While the land's currently value is $38 million, Pinnacle insists it will not sell it on the cheap, holding out for the best deal. Pinnacle currently has $228 million in cash and $375 million of availability under its revolver.
Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada. Advisors' Opinion: - [By Jeanine Poggi]
Wynn Resorts'(WYNN) run up of more than 55% this year has caused Wall Street to question its valuation. Currently, eight analysts have a buy rating on Wynn, 16 say hold, two rate it underperform rating and one says to sell the stock. "With little on the growth horizon in the intermediate term, new competition from Cotai coming in 2011 and 2012 ... and the unclear timing of a true recovery in Las Vegas, we see few catalysts not yet priced-in to pull valuation higher than current levels," Bain wrote in a note following its third-quarter earnings report. During the quarter, Wynn lost $33.5 million, or 27 cents a share, compared with a profit of $34.2 million, or 28 cents, in the year-ago period. The loss was attributed to charges related to servicing its debt. On an adjusted basis, Wynn actually earned 39 cents, matching Wall Street's outlook. Total Revenue grew to $1 billion from $773.1 million, better than the $990.8 million analysts predicted. In Macau, Wynn reported a 50% surge in revenue to $671.4 million, while EBITDA was $198 million, up 54.5% from $128.2 million in the third quarter of 2009. Earlier in the year the company opened its $600 million Wynn Encore Macau, which added 414 rooms to the market. Looking ahead, Wynn expects to break ground on its Cotai development in early 2011. The $2 billion to $3 billion project is slated to open in 2015, and management said it would provide additional details following its fourth-quarter earnings report. In Las Vegas, CEO Steve Wynn says the Strip is on the road to recovery. "I believe we have seen the bottom in Las Vegas," he said during the company's third-quarter conference call. "I don't know how fast it is going to get better but it isn't going to get any worse." Las Vegas revenue inched up 3.1% to $334.5 million during the three-month period, and EBITDA grew 9.3% to $76.5 million. Wynn also issued a cash dividend of $8 a share payable on Dec. 7 to sharehold! ers of record on Nov. 23.
Top 5 Casino Companies To Watch For 2014: MGM Resorts International(MGM) MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada. Advisors' Opinion: - [By Hawkinvest]
MGM Resorts International (MGM) is one of the world's largest hotel and casino companies, based in Las Vegas. Since December, MGM shares have been trading in a range of about $9, to almost $15 per share. The stock is now at the upper limit of the recent trading range which means that the risk of holding or buying this stock right now, could be elevated. MGM shares have rallied with the markets but appear extended and vulnerable to a sell-off. The company has a heavy debt load and it has been reporting losses. The balance sheet has about $13.45 billion in debt and only about $1.97 billion in cash. MGM could be impacted by higher oil prices because many consumers could cut back on spending if they go to Las Vegas, and some might decide not to go at all, and instead opt for a "staycation." With MGM facing challenges and the shares near recent highs, it could make sen se to sell now and buy on dips later this year. Here are some key points for MGM: Current share price: $14.18 The 52 week range is $7.40 to $16.05 Earnings estimates for 2011: a loss of 53 cents per share Earnings estimates for 2012: a loss of 39 cents per share Annual dividend: none
Top 5 Casino Companies To Watch For 2014: Boyd Gaming Corporation(BYD) Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in the United States. As of December 31, 2011, the company owned and operated 1,042,787 square feet of casino space, containing approximately 25,973 slot machines, 655 table games, and 11,418 hotel rooms. It also owned and operated 16 gaming entertainment properties located in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey. In addition, the company owns and operates a pari-mutuel jai-alai facility located in Dania Beach, Florida, as well as a travel agency in Hawaii. Further, it holds a 50% controlling interest in the limited liability company that operates Borgata Hotel Casino and Spa in Atlantic City, New Jersey. Boyd Gaming Corporation was founded in 1988 and is headquartered in Las Vegas, Nevada. Advisors' Opinion: - [By Hesler]
Boyd Gaming(BYD) posted a bigger-than-expected drop in its second-quarter earnings, citing weak performance in Las Vegas, the Midwest and the South. During the quarter, the casino operator earned $3.4 million, or 4 cents a share, a 73% plunge from $12.8 million, or 15 cents, in the year-ago period. Adjusted earnings came in at 5 cents a share, significantly lower than the 10 cents Wall Street predicted for Boyd. Boyd's revenue fell 6% to $578.4 million, also short of the consensus of $588 million. "The lingering effects of the recession have left consumers unusually sensitive to shifts in the economy, and they now react more quickly to economic data and other developments, such as fluctuations in the stock market," said CEO Keith Smith, in a statement. "Although conditions remain uncertain, we believe long-term stabilizing trends are still in place, and that year-over-year growth is achievable by the end of 2010." In the Las Vegas locals market, the rate of decline in earnings before interest, taxes, depreciation and amortization rose to 16.2% from 10.8%, J.P. Morgan analyst Joseph Greff wrote in a note. Boyd previously reported a 9.9% decline for its Borgata property in Atlantic City. Revenue came in at $186.9 million, a 2.4% decrease from the year-ago period. "We think second-quarter results are less important than the coming operating results in the second-half of 2010, when the Atlantic City market faces increased regional competitive pressures from tables in Pennsylvania and West Virginia and the first Philadelphia casino opens this summer," J.P. Morgan analyst Joseph Greff wrote in a note. Greff reaffirmed his underweight rating on Boyd, given increasing competition in Atlantic City, a weak recovery in the Las Vegas locals market and stagnant regional gaming trends. While there is no doubt the Atlantic City gaming market remains one of the most depressed, Borgata continues to dominate the market and gain share. Atlant! ic City saw gaming revenues plunge 11.1% in June to $286.8 million. Boyd co-owns Borgata with MGM Resorts, which is currently in the process of divesting its 50% stake.
Goldman Sachs' David Kostin and his team are out with their monthly chartbook about the economy and stocks. With the S&P 500 above 1,700, he sees another 4% rise through the end of the year and a 7% return in the next twelve months. But the rising tide won't lift all boats. Kostin also includes a list of forty stocks with the greatest upside and downside potential, based on the firm's target prices. As for companies with the most upside, Marathon Petroleum (MPC) tops the list, with 63.6%, followed by Autodesk (ADSK), Ventas (VTR), salesforce.com (CRM) and American Tower (AMT). Outside the top five, the list also includes big names like Schlumberger (SLB), Halliburton (HAL), Expedia (EXPE) and General Motors (GM). On the flip side, Advanced Micro Devices (AMD) takes the dubious honor of most overbought: It has 40.3% to fall, based on its Goldman target price. The top five includes Cablevision Systems (CVC) Hewlett-Packard (HPQ), Intel (INTC) and U.S. Steel (X). Other big players on the list are Microsoft (MSFT), Cliffs Natural Resources (CLF), and Staples (SPLS).
Uh-oh, Apple (NASDAQ: AAPL ) . Bill Gates says iPad users are "frustrated" because they don't have access to Microsoft's Office suite of productivity software. Gates is right only in that users don't have access to Office. Otherwise, there seems to be little interest in using the iPad as a laptop replacement. Instead, it's become a preferred device for playing games and watching video, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video. Gates is concocting problems where none exist. And it's not like those who want to use the iPad as a business device aren't without options. Many Google (NASDAQ: GOOG ) apps function quite well on the iPad, Tim says, pointing to his own frequent use of Google Drive for creating and editing documents. Meanwhile, sales of Microsoft's (NASDAQ: MSFT ) own Surface tablets have been mixed. Do you agree? Please watch the video to get Tim's full take, and then let us know whether you believe Bill Gates is right about the iPad. The next big iThing
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.
Atlantic Power (NYSE: AT ) shares have sunk 60% in 2013, leaving many investors wondering whether the utility's earnings will ever float back. With Q1 earnings scheduled for Thursday morning, investors need to know the answer to a very important question: Is Atlantic Power stock undervalued? I examined the utility's fundamentals and valuation in previous articles ��now let's see how if Atlantic's business model and strategy can set it up for success. "Accretive acquisitions"
Straight from the horse's mouth, Atlantic aims to "increase the value of the company through accretive acquisitions in North American markets while generating stable, contracted cash flows from our existing assets." Since the utility's 2004 Canadian incorporation and 2010 NYSE IPO, Atlantic has been busy acquiring... and acquiring... and acquiring. Its current generation capacity clocks in at 2,117 MW, and the utility added 450 additional MW in 2012 alone. Hot Undervalued Companies To Watch For 2014: Schlumberger N.V.(SLB) Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas. Advisors' Opinion: - [By Dave Friedman]
Institutional investors bought 66,328,670 shares and sold 64,611,410 shares, for a net of 1,717,260 shares. This net represents 0.14% of common shares outstanding. The number of shares outstanding is 1,250,000,000. The shares recently traded at $74.84 and the company’s market capitalization is $100,986,600,000.00. About the company: Schlumberger Limited is an oil services company. The Company, through its subsidiaries, provides a wide range of services, including technology, project management and information solutions to the international petroleum industry as well as advanced acquisition and data processing surveys.
Hot Undervalued Companies To Watch For 2014: Tupperware Corporation(TUP) Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida. Advisors' Opinion: - [By Sam Collins]
Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story. S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%. Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia. Advisors' Opinion: - [By Sam Collins]
Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69. Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.
Hot Undervalued Companies To Watch For 2014: Caterpillar Inc.(CAT) Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois. Advisors' Opinion: - [By Sam Collins]
Caterpillar (NYSE:CAT) is the world’s largest producer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was one of our Top Stocks to Buy for December because of its position as a major supplier to the third world and China. The company should also be a beneficiary of orders from Japan due to the damage from earthquakes and the tsunami. Revenues in 2011 are expected to increase by 36%, according to S&P, and margins are expected to increase, as well. Earnings for 2012 are forecast at $9.10, up from $7.50 this year, and S&P has a target of $142 over the next 12 months. Technically CAT has strong support at $95 and currently appears to be oversold, according to Moving Average Convergence/Divergence (MACD). If it is able to hold at the support line, look for a rally to $110 within 30 days. Longer term the stock could trade north of $125. - [By Roberto Pedone]
Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that. CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92. Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.
| | 
