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Sunday, October 16, 2011

Top Long term stocks to buy for Earnings season 2011 & 2012

Earnings season is back again. This time of year is one of the best periods to be on the bullish side of the market. So far, the markets performed pretty well in this quarter.  Pepsi has been able to grow dividends from $0.58 per share in 2001 to $2.06 annually in 2011. Pepsi has been raising its annual dividend by 12.5% annually during this time period. Because Pepsi is paying out $2.06 annually based on $4.45 in earnings, the payout ratio is only slightly north of 46.2%, which indicates not only that the dividend is safe, but has room to grow in the future as well.
In 2001, PepsiCo traded between $40.30 and $50.50, or 24.2x earnings and 30.42x earnings, respectively. With blue chips of this size, you usually start to reach the point of overpaying for shares once they cross the 18x earnings threshold.
The Dow Jones, S&P 500, NASDAQ and Russell 2000 indices are in strong recovery mood. After experiencing severe losses in the last quarter, I believe that investors will recoup their losses in October. Investing in undervalued stocks reporting strong earnings could be rewarding.

Portfolios

My Portfolio -hideMkt Cap
GOOG591.68+32.69(5.85%)191.05B
RES19.66+0.67(3.53%)2.92B
CLNE11.77+0.45(3.98%)828.24M
RAD1.06+0.03(2.91%)943.64M
MAR30.65+0.50(1.66%)10.82B
LVLT1.65-0.09(-5.17%)2.94B
MLNK4.07+0.13(3.30%)178.33M
SHLD71.54+1.99(2.86%)7.65B
SSW13.28+0.34(2.63%)916.53M
TTEK21.00+0.57(2.79%)1.31B
RT7.71-0.07(-0.90%)490.97M
HAS34.75+0.41(1.19%)4.67B
UA74.64+1.14(1.55%)3.85B
PNRA110.35-1.26(-1.13%)3.36B
BKC23.993.27B
VALE25.42+0.30(1.19%)132.65B
DGI20.83+0.28(1.36%)963.68M
PKTX0.0340+0.0055(19.30%)3.21M
ABR3.26-0.09(-2.69%)82.93M
WAC23.56+0.01(0.04%)651.26M
BEHL0.00010.0000(0.00%)131,300.00
HMC29.75-0.40(-1.33%)53.62B
BIDU137.60+4.63(3.48%)48.01B
PETM45.70+0.84(1.87%)5.15B
CLQ0.0400.000(0.00%)3.93M
BRSI0.1500.000(0.00%)1.70M
JMBA1.47+0.06(4.26%)98.59M
CPTCE0.00220.0000(0.00%)403,930.00
SIR0.225+0.015(7.14%)11.50M
BALT5.69+0.03(0.53%)128.57M
OPTT4.20+0.42(11.11%)43.66M
ATPG10.65+1.48(16.14%)549.71M
MSIQX12.95+0.20(1.57%)-
VTIVX13.02+0.19(1.48%)-
FCNTX67.90+1.41(2.12%)-
SAUAX12.97+0.19(1.49%)-
CSUN1.12+0.02(1.82%)49.89M
NTWK0.670+0.020(3.05%)37.57M
DGRI0.0091-0.0001(-1.09%)4.54M
SODA35.21-0.71(-1.98%)647.30M
HLXW0.0001-0.0001(-50.00%)192,200.00
PELE0.2300.000(0.00%)12.85M
RXEXF0.390-0.010(-2.50%)66.31M
AMNG0.02300.0000(0.00%)8.08M
CGAQ0.0155+0.0005(3.33%)2.26M
JAMN0.427-0.028(-6.15%)32.77M
CRMB3.90-0.10(-2.50%)21.47M

World markets

Shanghai2,430.48-8.31 (-0.34%)
Nikkei 2258,747.96-75.29 (-0.85%)
Hang Seng Index18,501.79-256.02 (-1.36%)
TSEC7,358.08-70.25 (-0.95%)
FTSE 1005,466.36+62.98 (1.17%)
EURO STOXX 502,355.48+22.96 (0.98%)
CAC 403,217.89+30.95 (0.97%)
S&P TSX12,081.73+169.84 (1.43%)
S&P/ASX 2004,205.60-38.90 (-0.92%)
BSE Sensex17,082.69+198.77 (1.18%)

Currencies

EUR/USD1.3727-0.0056 (-0.41%)
USD/JPY76.9500-0.2900 (-0.38%)
GBP/USD1.5723-0.0022 (-0.14%)
USD/CAD1.0227+0.0045 (0.44%)
USD/HKD7.7779-0.0025 (-0.03%)
USD/CNY6.3818+0.0238 (0.37%)
AUD/USD1.0153+0.0004 (0.04%)

Wells Fargo will report its earnings at 8:00 am on Monday. Consensus EPS estimate for the 3rd quarter is $0.72, which is $0.12 higher than the previous year. In 2010, the same period EPS was $0.60. Mean revenue estimate is $20.21 billion for the current quarter.

Wells Fargo, a Warren Buffett favorite, is trading with a low P/E ratio of 10.34, and a lower forward P/E ratio of 8.03. With a payout ratio of 13%, it offers a yield of 1.80%. Based on an annualized EPS growth estimate of 14.40%, the stock has a fair value range of $50.32 - $70.18. O-Metrix score of 8.82 is well above the market average. I rate Wells Fargo as a strong buy.

Bonds

Stanley Black & Decker will report its earnings on Monday after the market close. Consensus EPS estimate for the 3rd quarter is $1.33, which is $0.36 higher than the previous year. In 2010, the same period EPS was $0.97. Mean revenue estimate is $19.25 billion for the current quarter.
  1. Eventually the DJIA will break out from the current trading range of 10,600 – 11,600. It is only a matter of how long it will stay within this trading range.
  2. Will the DJIA break out from the 12 years of circling around 10,000? What would make it to go above the historic high of 14,000? What would make it revisit the 7,000 low?

You can never predict when the market is going, but you can plan for what you are going to do when the market does a certain thing. Sometimes, the market moves so swiftly that you don’t have time to react. Therefore, planning is everything. It is never too late to plan.

Planning is never easy, but you must think hard now and come up with plans actions for the following situations:

  1. In the short term, what would you do if the DJIA moves above 11,600 or below 10,600?
  2. In the medium term, what would you do if the DJIA moves above 14,000 or down toward 7,000?
  3. In the long term, what would you do if the DJIA resumes the long term trend upward or if it fails to do so

The stock is trading with a relatively high trailing P/E ratio of 16.17. Forward P/E ratio is 9.64. With a payout rate of 41%, the company offers a yield of 2.9%. Based on an annualized EPS growth estimate of 14%, the stock has a fair value range of $80.78 - $125.51. O-Metrix score of 6.52 is above the market average. I rate the stock as a buy.

Halliburton will report its earnings on Monday. Consensus EPS estimate for the 3rd quarter is $0.92, which is $0.34 higher than the previous year. In 2010, the same period EPS was $0.58. Mean revenue estimate is $19.25 billion for the current quarter.

The stock is trading with a relatively high trailing P/E ratio of 14.29, but the forward P/E ratio falls to 8.37. With a payout rate of 14%, the company offers a yield of 1%. Based on an annualized EPS growth estimate of 16.5%, the stock has a fair value range of $65.16 - $77.84. O-Metrix score of 7.71 is well below the market average. I rate Halliburton as a buy.

Top movers

Generated Oct 13, 2011
Gainers (% price change)Last TradeChangeMkt Cap
Owens-Illinois, Inc.OI18.05+1.41(8.47%)2.96B
Mueller Water ProductsMWA2.82+0.16(6.02%)438.77M
Hawkins, Inc.HWKN37.50+1.50(4.17%)388.76M
Spartech CorporationSEH3.88+0.14(3.74%)119.62M
OMNOVA Solutions Inc.OMN3.74+0.13(3.60%)170.54M
Losers (% price change)
KMG Chemicals, Inc.KMGB13.69-1.12(-7.56%)154.96M
Mercer International Inc.MERC6.91-0.47(-6.37%)394.16M
Silver Wheaton Corp. (USASLW31.21-1.57(-4.79%)11.03B
Vista Gold Corp.VGZ3.41-0.17(-4.75%)242.68M
Paramount Gold and SilverPZG2.48-0.11(-4.25%)337.95M
Most Actives (dollar volume)
Freeport-McMoRan CopperFCX35.24-0.65(-1.81%)33.40B
Alcoa Inc.AA10.10+0.05(0.50%)10.75B
Monsanto CompanyMON73.18-0.46(-0.62%)39.13B
Potash Corp./SaskatchewanPOT49.21+0.02(0.04%)42.12B
Newmont Mining Corp.NEM63.75-0.32(-0.50%)31.50B
Hasbro will report its earnings on Monday before the market opens. Consensus EPS estimate for the 3rd quarter is $1.30, which is $0.21 higher than the previous year. In 2010, the same period EPS was $1.09.
3 Month0.01%0.00 (0.00%)
6 Month0.04%0.00 (0.00%)
2 Year0.26%-0.02 (-7.14%)
5 Year1.11%-0.01 (-0.89%)
10 Year2.25%+0.01 (0.45%)
30 Year3.23%

Top movers

Generated Oct 13, 2011
Gainers (% price change)Last TradeChangeMkt Cap
Walter Energy, Inc.WLT75.22+8.45(12.66%)4.70B
Range Resources Corp.RRC68.44+5.52(8.77%)11.02B
Goodrich Petroleum Corp.GDP14.43+0.94(6.97%)521.28M
Pogo Producing Company3.00+0.20(6.96%)176.17M
Callon Petroleum CompanyCPE3.97+0.23(6.15%)156.35M
Losers (% price change)
Cal Dive Intl., Inc.DVR2.08-0.20(-8.77%)198.08M
Tesco Corporation (USA)TESO13.94-0.73(-4.98%)532.47M
GMX Resources Inc.GMXR13.11-0.57(-4.17%)409.21M
Newfield Exploration Co.NFX40.80-1.62(-3.82%)5.49B
Warren Resources, Inc.WRES2.68-0.10(-3.60%)191.55M
Most Actives (dollar volume)
Exxon Mobil CorporationXOM76.37-0.79(-1.02%)371.32B
Schlumberger Limited.SLB67.20-0.11(-0.16%)90.68B
Chevron CorporationCVX97.79+0.01(0.01%)195.87B
ConocoPhillipsCOP67.04-0.15(-0.22%)







Top movers

Generated Oct 13, 2011
Gainers (% price change)Last TradeChangeMkt Cap
Air Methods CorporationAIRM77.31+7.74(11.13%)980.39M
Euroseas Ltd.ESEA3.48+0.31(9.78%)107.89M
Navios Maritime HldgsNM3.60+0.21(6.19%)366.07M
AMR CorporationAMR2.96+0.15(5.34%)992.21M
Patriot TransportationPATR22.72+1.01(4.65%)210.84M
Losers (% price change)
Frontline Ltd. (USA)FRO5.47-0.27(-4.70%)425.89M
China Southern AirlinesZNH28.62-1.17(-3.93%)6.48B
Overseas ShipholdingOSG15.00-0.60(-3.85%)456.96M
Atlas Air Worldwide HldgsAAWW34.63-1.36(-3.78%)910.18M
Danaos CorporationDAC3.31-0.09(-2.65%)360.80M
Most Actives (dollar volume)
Union Pacific CorporationUNP90.11-1.68(-1.83%)43.98B
FedEx CorporationFDX73.87-1.31(-1.74%)23.43B
United Parcel ServiceUPS68.09-0.47(-0.69%)66.78B
CSX CorporationCSX20.77-0.34(-1.61%)22.75B
Norfolk Southern Corp.NSC67.04-0.40(-0


+0.01 (0.31%

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