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 -hide	Mkt Cap

GOOG	591.68	+32.69(5.85%)	191.05B
RES	19.66	+0.67(3.53%)	2.92B
CLNE	11.77	+0.45(3.98%)	828.24M
RAD	1.06	+0.03(2.91%)	943.64M
MAR	30.65	+0.50(1.66%)	10.82B
LVLT	1.65	-0.09(-5.17%)	2.94B
MLNK	4.07	+0.13(3.30%)	178.33M
SHLD	71.54	+1.99(2.86%)	7.65B
SSW	13.28	+0.34(2.63%)	916.53M
TTEK	21.00	+0.57(2.79%)	1.31B
RT	7.71	-0.07(-0.90%)	490.97M
HAS	34.75	+0.41(1.19%)	4.67B
UA	74.64	+1.14(1.55%)	3.85B
PNRA	110.35	-1.26(-1.13%)	3.36B
BKC	23.99		3.27B
VALE	25.42	+0.30(1.19%)	132.65B
DGI	20.83	+0.28(1.36%)	963.68M
PKTX	0.0340	+0.0055(19.30%)	3.21M
ABR	3.26	-0.09(-2.69%)	82.93M
WAC	23.56	+0.01(0.04%)	651.26M
BEHL	0.0001	0.0000(0.00%)	131,300.00
HMC	29.75	-0.40(-1.33%)	53.62B
BIDU	137.60	+4.63(3.48%)	48.01B
PETM	45.70	+0.84(1.87%)	5.15B
CLQ	0.040	0.000(0.00%)	3.93M
BRSI	0.150	0.000(0.00%)	1.70M
JMBA	1.47	+0.06(4.26%)	98.59M
CPTCE	0.0022	0.0000(0.00%)	403,930.00
SIR	0.225	+0.015(7.14%)	11.50M
BALT	5.69	+0.03(0.53%)	128.57M
OPTT	4.20	+0.42(11.11%)	43.66M
ATPG	10.65	+1.48(16.14%)	549.71M
MSIQX	12.95	+0.20(1.57%)	-
VTIVX	13.02	+0.19(1.48%)	-
FCNTX	67.90	+1.41(2.12%)	-
SAUAX	12.97	+0.19(1.49%)	-
CSUN	1.12	+0.02(1.82%)	49.89M
NTWK	0.670	+0.020(3.05%)	37.57M
DGRI	0.0091	-0.0001(-1.09%)	4.54M
SODA	35.21	-0.71(-1.98%)	647.30M
HLXW	0.0001	-0.0001(-50.00%)	192,200.00
PELE	0.230	0.000(0.00%)	12.85M
RXEXF	0.390	-0.010(-2.50%)	66.31M
AMNG	0.0230	0.0000(0.00%)	8.08M
CGAQ	0.0155	+0.0005(3.33%)	2.26M
JAMN	0.427	-0.028(-6.15%)	32.77M
CRMB	3.90	-0.10(-2.50%)	21.47M

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World markets

Shanghai	2,430.48	-8.31 (-0.34%)
Nikkei 225	8,747.96	-75.29 (-0.85%)
Hang Seng Index	18,501.79	-256.02 (-1.36%)
TSEC	7,358.08	-70.25 (-0.95%)
FTSE 100	5,466.36	+62.98 (1.17%)
EURO STOXX 50	2,355.48	+22.96 (0.98%)
CAC 40	3,217.89	+30.95 (0.97%)
S&P TSX	12,081.73	+169.84 (1.43%)
S&P/ASX 200	4,205.60	-38.90 (-0.92%)
BSE Sensex	17,082.69	+198.77 (1.18%)

Currencies

EUR/USD	1.3727	-0.0056 (-0.41%)
USD/JPY	76.9500	-0.2900 (-0.38%)
GBP/USD	1.5723	-0.0022 (-0.14%)
USD/CAD	1.0227	+0.0045 (0.44%)
USD/HKD	7.7779	-0.0025 (-0.03%)
USD/CNY	6.3818	+0.0238 (0.37%)
AUD/USD	1.0153	+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 3^rd 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 3^rd 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 Trade	Change	Mkt Cap
Owens-Illinois, Inc.	OI	18.05	+1.41(8.47%)	2.96B
Mueller Water Products	MWA	2.82	+0.16(6.02%)	438.77M
Hawkins, Inc.	HWKN	37.50	+1.50(4.17%)	388.76M
Spartech Corporation	SEH	3.88	+0.14(3.74%)	119.62M
OMNOVA Solutions Inc.	OMN	3.74	+0.13(3.60%)	170.54M
Losers (% price change)
KMG Chemicals, Inc.	KMGB	13.69	-1.12(-7.56%)	154.96M
Mercer International Inc.	MERC	6.91	-0.47(-6.37%)	394.16M
Silver Wheaton Corp. (USA	SLW	31.21	-1.57(-4.79%)	11.03B
Vista Gold Corp.	VGZ	3.41	-0.17(-4.75%)	242.68M
Paramount Gold and Silver	PZG	2.48	-0.11(-4.25%)	337.95M
Most Actives (dollar volume)
Freeport-McMoRan Copper	FCX	35.24	-0.65(-1.81%)	33.40B
Alcoa Inc.	AA	10.10	+0.05(0.50%)	10.75B
Monsanto Company	MON	73.18	-0.46(-0.62%)	39.13B
Potash Corp./Saskatchewan	POT	49.21	+0.02(0.04%)	42.12B
Newmont Mining Corp.	NEM	63.75	-0.32(-0.50%)	31.50B

Hasbro will report its earnings on Monday before the market opens. Consensus EPS estimate for the 3^rd quarter is $1.30, which is $0.21 higher than the previous year. In 2010, the same period EPS was $1.09.

3 Month	0.01%	0.00 (0.00%)
6 Month	0.04%	0.00 (0.00%)
2 Year	0.26%	-0.02 (-7.14%)
5 Year	1.11%	-0.01 (-0.89%)
10 Year	2.25%	+0.01 (0.45%)
30 Year	3.23% Top movers Generated Oct 13, 2011 Gainers (% price change) Last Trade Change Mkt Cap Walter Energy, Inc. WLT 75.22 +8.45(12.66%) 4.70B Range Resources Corp. RRC 68.44 +5.52(8.77%) 11.02B Goodrich Petroleum Corp. GDP 14.43 +0.94(6.97%) 521.28M Pogo Producing Company 3.00 +0.20(6.96%) 176.17M Callon Petroleum Company CPE 3.97 +0.23(6.15%) 156.35M Losers (% price change) Cal Dive Intl., Inc. DVR 2.08 -0.20(-8.77%) 198.08M Tesco Corporation (USA) TESO 13.94 -0.73(-4.98%) 532.47M GMX Resources Inc. GMXR 13.11 -0.57(-4.17%) 409.21M Newfield Exploration Co. NFX 40.80 -1.62(-3.82%) 5.49B Warren Resources, Inc. WRES 2.68 -0.10(-3.60%) 191.55M Most Actives (dollar volume) Exxon Mobil Corporation XOM 76.37 -0.79(-1.02%) 371.32B Schlumberger Limited. SLB 67.20 -0.11(-0.16%) 90.68B Chevron Corporation CVX 97.79 +0.01(0.01%) 195.87B ConocoPhillips COP 67.04 -0.15(-0.22%) Top movers Generated Oct 13, 2011 Gainers (% price change) Last Trade Change Mkt Cap Air Methods Corporation AIRM 77.31 +7.74(11.13%) 980.39M Euroseas Ltd. ESEA 3.48 +0.31(9.78%) 107.89M Navios Maritime Hldgs NM 3.60 +0.21(6.19%) 366.07M AMR Corporation AMR 2.96 +0.15(5.34%) 992.21M Patriot Transportation PATR 22.72 +1.01(4.65%) 210.84M Losers (% price change) Frontline Ltd. (USA) FRO 5.47 -0.27(-4.70%) 425.89M China Southern Airlines ZNH 28.62 -1.17(-3.93%) 6.48B Overseas Shipholding OSG 15.00 -0.60(-3.85%) 456.96M Atlas Air Worldwide Hldgs AAWW 34.63 -1.36(-3.78%) 910.18M Danaos Corporation DAC 3.31 -0.09(-2.65%) 360.80M Most Actives (dollar volume) Union Pacific Corporation UNP 90.11 -1.68(-1.83%) 43.98B FedEx Corporation FDX 73.87 -1.31(-1.74%) 23.43B United Parcel Service UPS 68.09 -0.47(-0.69%) 66.78B CSX Corporation CSX 20.77 -0.34(-1.61%) 22.75B Norfolk Southern Corp. NSC 67.04 -0.40(-0	+0.01 (0.31%