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Sunday, June 23, 2013

Top 13 Stock Picks for 2013 to buy Long term $PM $TOL $EDU $ADP $TNGO $AAPL $JBSS #STOCKS

Mr. Market often takes investors for a wild ride that instills them with fear and drives them away from stocks. But giving in to your market-phobia means missing out on big wins and losing out to future inflation.Despite a rally that has seen the market more than double from its bear-market low in 2009, stocks still represent good value. Stocks in most major sectors are trading below their long-term average price-earnings ratios. At the same time, companies are sporting profit margins and cash levels above their historical norms. Cash-rich companies that can manufacture growth in a tepid economy will deliver the goods to shareholders. Instead, add a more-reliable brand of stock to your portfolio. Here are ten low-volatility stocks that will deliver consistent returns over the long haul without all the drama. They all have betas of less than 1, which suggests that their moves are less than the market's (beta is a measure of volatility compared with a particular market, in this case the U.S. stock market, as measured by Standard & Poor’s 500-stock index). On top of having low volatility, the companies tend to pay generous dividends and increase them regularly. They usually boast pristine balance sheets, with loads of cash and little debt. Plus they are industry leaders and have been around for a long time, so you’ll no doubt find their products and services familiar Year company was founded: 1882 (ExxonMobil merger was in 1999) 52-week high: $86.42 52-week low: $66.80 Consecutive years of dividend increases: 13 Yield: 2.8% Beta: 0.50 ExxonMobil may have ceded its claim as the world’s most valuable company to Apple (AAPL), but the energy giant has something Apple doesn’t: a corporate history spanning more than a century and a reputation for safety befitting a stock with a market value of $400 billion. Plus, it is one of just four companies with a perfect, AAA credit rating from Standard & Poor’s. Exxon is not without some challenges. The company has cut back its refining business, for example, as demand for oil in developed countries shrinks. Another hurdle is a huge stake in North American natural gas production Year company was founded: 1856 (as Minneapolis Milling Company) 52-week high: $40.73 52-week low: $34.15 Consecutive years of dividend increases: 29 Yield: 3.2% Beta: 0.18 The brands of consumer food giant General Mills are strong enough to withstand competitive pressures from cheaper generic brands. Is there really any substitute for Cheerios? Other brands include Lucky Charms, Progresso soups, Green Giant vegetables and Betty Crocker baking mixes. A weak economy and high commodity prices are challenges. A slightly muted outlook for the fiscal year that ends May 2013 in part reflects increased spending to shore up the company’s recently acquired Yoplait yogurt division, a laggard in the trendy Greek yogurt category. But General Mills is cutting costs elsewhere and using its formidable cash position to expand in faster-growing emerging markets and to finance dividends, share buybacks and acquisitions -- most recently a Brazilian food maker that is expected to more than double the company’s annual sales in Latin International Business Machines (IBM) Year company was founded: 1911 (as Computing-Tabulating Recording Company) 52-week high: $208.63 52-week low: $155.65 Consecutive years of dividend increases: 17 Yield: 1.8% Beta: 0.66 Big Blue has been around for a century and knows how to weather economic storms. The company offers a wide range of computer hardware, software and services, making it a one-stop shop for many corporate information-technology departments. Cloud computing could challenge IBM’s high-end hardware business. But the company continues to innovate. It spent $6.3 billion on research last year and won more U.S. patents (6,180) than any other company. Automatic Data Processing (ADP) Year company was founded: 1949 52-week high: $56.07 52-week low: $43.48 Consecutive years of dividend increases: 36 Yield: 2.9% Beta: 0.70 ADP is a bet on an improving economy and a rosier employment picture. The world’s largest provider of outsourced payroll services, it's another of the four triple-A-rated companies left standing. The annual dividend has grown from $1.16 per share in 2008 to a rate of $1.58 this year. A recessionary relapse would be bad news for ADP. But employment numbers in the U.S. are trending up. And untapped markets among small and midsize businesses, as well as overseas, provide plenty of running room for ADP. Read more at Coca-Cola Co. (KO) Year company was founded: 1886 52-week high: $76.94 52-week low: $62.19 Consecutive years of dividend increases: 23 Yield: 2.7% Beta: 0.52 You can order a Coke almost anywhere. Coca-Cola Co. delivers its soft drinks, which also include Sprite, Fanta, Tab and Fresca, to thirsty consumers in some 200 countries. (Other brands include Minute Maid orange juice, Powerade energy drink and Dasani bottled water.) And the company is investing billions of dollars more in overseas markets (which account for 70% of sales), especially in China, Russia, Brazil and other big emerging markets. Coke battled higher commodity prices last year but recently announced a plan to shave annual costs by $550 million to $650 million by the end of 2015. Analysts, on average, expect Coke to generate annualized earnings growth of nearly 8% over the next three to five years. Some, such as analyst Caroline Levy, at Credit Agricole Securities, think Coke can achieve a double-digit earnings growth rate over the long haul. The stock, at 18 times estimated earnings, isn’t cheap. But the bulls say that because of Coke’s steadiness, it deserves an even higher price-earnings ratio. Read more at Philip Morris International (PM) Year company was founded: 1847 (went public in 1881) 52-week high: $89.50 52-week low: $60.06 Consecutive years of dividend increases: 4 Yield: 3.7% Beta: 0.87 You’ll find the shares of Philip Morris International tempting if you have no concerns about investing in tobacco. Consider this telling prediction, from Morningstar: By 2020, there will be 1.4 billion smokers globally, up from 1.3 billion today, even if the percentage of the population that smokes declines 1% annually. Not counting China and the U.S., the market share of Marlboro, PMI’s best-selling brand, rose to 9% last year. And Parliament, a luxury brand with a high profit margin, saw sales volume increase 12%. Midprice L&M has been gaining market share in the European Union since 2009 and is the second-largest brand there. Unfortunately for smokers, cigarette price hikes are a frequent fact of life. But that pricing power helps PMI offset pockets of declining sales in Europe. And it contributes to the large profits that fund an aggressive stock-repurchase program and regular dividend increases, including a 20% boost in the payout rate last year Read more at Procter & Gamble (PG) Year company was founded: 1837 52-week high: $67.33 52-week low: $57.09 Consecutive years of dividend increases: 10 Yield: 3.8% Beta: 0.45 Check your pantry or laundry room and you'll probably find this company's products lining the shelves. P&G has more brands generating at least $1 billion in annual sales -- including Tide, Duracell and Charmin -- than any other household-goods maker. P&G hasn’t been immune to consumer belt-tightening in the U.S. and Europe and slower growth in emerging markets. As with many multinationals, currency swings have cut into revenues. The company recently warned that sales and profits for the fiscal year that ends in June 2013 would be less than previously expected. But P&G has responded with some belt-tightening of its own. The company is engineering a $10 billion, five-year cost-savings program aimed at plumping profit margins. And executives have vowed to focus on core markets and businesses, as well as on dreaming up the next game-changing product you don’t yet know you need. Disappointing short-term projections have pushed the stock to bargain levels, say long-term bulls. If P&G’s plan works, shareholders could come out winners as earnings growth re-accelerates. Meanwhile, investors are paid to wait for progress with a generous dividend on a stock that is less than half as volatile as the overall market Coach 52-Week High: $79.70 52-Week Low: $48.24 Annual Revenue: $4.9 billion Projected 2013 Earnings Growth: 14.7% From Kiplinger: Shares of the luxury handbag maker Coach (symbol: COH) fell 7% in 2012, mainly because of sluggish sales in North America. But skittish investors overlooked Coach's overseas business. In the July–September quarter, foreign sales rose 15% from the same period in 2011, driven by nearly 40% growth in China. Coach pulls in average sales of $2,500 per square foot per year from its more than 800 stores worldwide, 25% more than rival Tiffany. Coach has significantly raised its dividends every year since 2009; its stock yields 2.1 John B. Sanfilippo & Sons 52-Week High: $19.67 52-Week Low: $7.16 Annual Revenue: $721 million Projected 2013 Earnings Growth: 5.4% From Kiplinger: One bag of nuts is like any other, right? Not at John B. Sanfilippo & Sons (symbol: JBSS). The Elgin, Ill., nut processor has done much to make its brands -- Fisher and Orchard Valley Harvest -- stand out. Small innovations, such as the use of resealable bags, are just a start. The firm launches new products every year -- such as vanilla-flavored almonds in 2012. Adam Strauss, co-manager of Appleseed Fund, expects a 44% bump in 2013 profits from 2012. The stock, which has a market value of just $184 million, sells for 11 times estimated 2013 earnings Toll Brothers 52-Week High: $37.08 52-Week Low: $18.95 Annual Revenue: $1.7 billion Projected 2013 Earnings Growth: 61.2% From Kiplinger: Housing has turned the corner, and that’s pushed up homebuilder stocks. Shares of Toll Brothers (symbol: TOL), which bills itself as the nation's biggest builder of luxury homes, rose 62% in 2012, and the Horsham, Pa., company has plenty of momentum going into the new year. Toll Brothers recently reported that the backlog of homes under construction had climbed 59% from the year before. The company is diversified. Single-family homes account for 53% of sales; high-rises, senior communities and multifamily homes make up the rest. Analysts see profits rising 65% in the current fiscal year. New Oriental Education & Technology Group 52-Week High: $29.19 52-Week Low: $9.41 Annual Revenue: $841 million Projected 2013 Earnings Growth: 30.4% From James K. Glassman: New Oriental Education & Technology Group (symbol: EDU), which I recommended for 2010, gained a lovely 48% over the following 12 months. For the past year, however, New Oriental -- which dominates the market for private educational services in China (55 schools and 726 learning centers) -- has taken a dive, as have many Chinese stocks. It's now close to its early-2010 price, even though revenues have doubled Tangoe 52-Week High: $23.05 52-Week Low: $11.99 Annual Revenue: $140 million Projected 2013 Earnings Growth: 33.3% From James K. Glassman Terry Tillman, who analyzes software stocks for the Raymond James investment firm, chose SuccessFactors for 2012. Now he's enthusiastic about Tangoe (symbol: TNGO), which makes software that helps manage the telecom services that large and midsize companies use. Revenues in the July–September quarter were up 39% from the same period in 2011. When you consider Tangoe's fast growth, its P/E of 20, based on 2013 earnings estimates, seems attractive. But I'm mainly drawn by the firm's similarity to SuccessFactors. Two in a row?
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