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Friday, November 25, 2011

Black Friday Stocks to buy for long term ?

I'm long and bigger into Ford than I anticipated and hoped for. I really expected to make a swing trade after the sharp price drop following 1st quarter er. I never understood the near panic sell off, the er wasn't bad imho at all. So, started buying in the mid 16's and probably have averaged down to mid 13's. I started buying again lately. I'll take a look at UAL and AXL.
United Continental Holdings Inc., (UAL) shares are trading at $15.53. United is a major global airline. The 50-day moving average is $19.19 and the 200-day moving average is $21.43. The shares have traded in a range between $15.51 to $29.06 in the past 52 weeks. UAL is estimated to earn about $3.71 per share in 2011 and $5.25 in 2012. This puts the P/E ratio at ridiculously low levels, just about 4 times 2011 earnings, and less than 3 times earnings for 2012.
Long in F, BIP, GDX, GDXJ, CSCO. Don't like airlines stock at all. AAPL may hit a slide with current leadership and no strong new creative products
Book value is listed at $6.99 per share. Higher oil prices and economic concerns have been impacting airline stocks, but this appears to be an overreaction based on emotion rather than the fundamentals, like earnings. If United earned even half of what the estimates are, the stock would still be cheap. Barclays has set a $33 price target for UAL shares and Maxim Group has a $28 target, which can be seen here.

Microsoft Corporation (MSFT) shares are trading at $24.47. Earnings estimates are about $2.55 for 2011 and $2.76 for 2012. This gives MSFT shares a P/E ratio of only about 9 times earnings. The 50-day moving average is $26.13 and the 200-day moving average is $25.53. The shares have traded in a range between $23.65 to $29.46 in the past 52 weeks. The dividend is 80 cents per share which yields about 3.2%.

Microsoft has a huge amount of cash on the balance sheet - around $56 billion. Microsoft can still innovate and has some exciting new products like the Kinect which allows people to use their bodies to control and play games without a hand held or other controller. Microsoft's fortress-like balance sheet, low P/E ratio, and strong dividend, makes these shares a low risk way to invest in technology. The Kinect and the X-Box will be in demand for the holidays, but the stock is an even better long-term deal.

POZEN Inc.41.20%105.60M
ROYLRoyale Energy, Inc.18.65%49.29M
GYROGyrodyne Company of America, Inc.20.33%152.72M
LEILucas Energy, Inc.13.51%40.98M
EEEEvergreen Energy Inc.54.36%5.98M
TSPTTranscept Pharmaceuticals, Inc.-3.68%95.72M
ATTAT&T Inc0.07%1.25B
STHGSTRATTON HOLDINGS INC38.46%425,800.00
LOGLLegend Oil and Gas Ltd25.81%78.91M
XRTSPDR S&P Retail (ETF)0.29%760.90M

American Axle (AXL) shares are trading at $7.65. AXL is a leading manufacturer of automotive components. The 50-day moving average is about $8.55 and the 200-day moving average is about $10.60. These shares have traded in a range between $6.77 to $16.20 in the last 52 weeks. Earnings estimates for AXL are $2.01 per share in 2011, and $2.09 for 2012. I would buy this stock on dips in the $7 to $7.50 range which is where it has recently traded. Some investors are concerned that a weakening economy will impact AXL, but multiple insiders seem confident of the outlook and they have been buying the stock recently.

Ford Motor Co. (F) shares are trading at $9.83. Ford is a global leader in auto and truck manufacturing. The 50-day moving average is about $10.89 and the 200-day moving average is about $12.95, so these shares are trading below support levels. Ford shares hit a 52 week high of $18.97 and a low of $9.05 earlier this year. Earnings estimates for Ford are $1.87 per share in 2011 and $1.62 for 2012 which puts the P/E ratio at about 5. The European debt crisis is slowing down demand for cars in Europe and Ford has responded by announcing about 4,000 temporary layoffs. It's good to see that Ford is reacting quickly in order to protect profit margins. Ford has made great progress in terms of the balance sheet, and as that continues, a dividend could be initiated.

Hartford Financial (HIG) shares are trading at $15.66. HIG is a leading insurance company. The 50-day moving average is $17.65 and the 200-day moving average is $23.03. This stock has been impacted by storm losses, legal expenses, and a major market correction, but this has created much lower prices and a great long-term buying opportunity. Earnings estimates are about $2.04 for 2011, and are expected to jump to $3.52 per share in 2012. Hartford is extremely undervalued and that could lead to out-performance in the future. HIG pays a dividend of about 40 cents per share, which is equivalent to a yield of about 2.4%. This stock is trading well below book value which is stated at $49.89.

Apple, Inc. (AAPL) shares are trading at $366.99. Apple is a leading maker of computers and mobile devices. The 50-day moving average is $394.72 and the 200-day moving average is $363.85. Earnings estimates for AAPL are about $34.52 per share in 2011, and $38.59 for 2012. These estimates appear to be too low, and Apple could easily beat them. The 52 week range is $310.50 to $426.70. Apple shares are a source of funds and liquidity (almost like cash). Just as some hedge funds and investors sell gold to raise cash, many are doing the same with Apple. It's smart to use these cash raising dips as a buying opportunity, because the long-term trend for Apple is up, and the stock remains very undervalued.

Bank of America Corp1.50M52.10B
SPYSPDR S&P 500 ETF1.43M79.64B
ALUAlcatel-Lucent (ADR)1.18M3.36B
QQQPowerShares QQQ Trust, Series 1 (ETF)979,639.0044.80B

The growth from China is not priced into this stock. There are only 4 Apple stores in mainland China, and 1 store in Hong Kong. The expansion potential in China is absolutely enormous and this stock is too cheap at about 10 times earnings. Dips to about $366 look like particularly good buying opportunities since this is right around a key support level (the 200-day moving average). Apple is likely to see a surge in revenues this holiday season with iPhones and iPads being one of this years most wanted gifts. Furthermore, while Apple is expected to offer some "Black Friday" deals, these products are in such high demand that the discounts will be small and that means strong profit margins for Apple.

1 comment:

Penny Stock Newsletter said...

I like the list of stocks above with one exception Bank Of America