Following the week we have just endured, many would find it hard to return to the stock market any time soon, despite so many pundits calling the market bottom on Thursday. Bad news just keeps amassing: the Euro-zone is officially in recession, unemployment in the U.S. and globally is on the rise, the housing market is far from any sustainable recovery, the auto sector is a mess and so on. But it is always in these hard times, when things are cheap, that bargains can be found. While cheap can be meaningless during these times as Jim Cramer said this week and Joe Lazzaro seconded, perhaps some value could be found after all. What, then, did BloggingStocks contributors find worthwhile this week?
First, let me start, not by gloating, but by pointing out that on more than one occasion, more than one contributor has suggested to steer clear of Circuit City Stores Inc. (NYSE: CC). The electronics retailer has filed for bankruptcy Monday and the NYSE has suspended the company's common stock immediately. The stock is now traded over the market under CCTYQ.
Sirius XM Radio, Inc (NASDAQ: SIRI) reported a quarter that caused Steven Mallas to pause and think. The only way he sees Sirius is as a very -- very -- speculative and risky play. Since the stock has been beaten so much and is so cheap, if it doesn't disappear by the time the economy turns, it could be interesting. But only if one has the cash to burn. Jamie Dlugosch adds a reminder about SIRI's debt, hoping it would earn a reprieve from its debt holders as it tries to operate as one company. "Just imagine what this company could do in a normal economy. It would be truly tremendous."
Google, Inc. (NASDAQ: GOOG) has seen its shares drop below $300 this week as investors feel its earnings could be pressured in a recession where marketers lower their spending on advertising. But Doug McIntyre called Google "the best internet company in the world," saying it will likely surprise the Street since its products are so good and efficient that in a recession they'll likely attract more marketing dollars (cut from elsewhere) as a last resort for advertisers.
Procter & Gamble (NYSE: PG) has often been hailed as a defensive stock, here and elsewhere. While most other companies lower their outlook, P&G actually raised its fiscal second-quarter and full-year 2009 forecasts due to better-than-expected proceeds from the sale of Folgers. Once again, a reminder of how well this company is managed, and as Sarah Gilbert said, "P&G is happily focusing on its core brands."
Apple, Inc. (NASDAQ: AAPL) -- short interest in the company has increased, but Doug McIntyre thinks the shorts will be burned as they will be surprised when Mac and iPhone sales continue to grow. "Apple is one of the most successful companies in the world, with a clean balance sheet, $33 billion in cash, growing sales, and the best products in its market segments."
Coach (NYSE: COH) -- Charles Mizrahi sees value for long-term investors in this high-end retailer. With no long-term debt, an ROE of 50%, margins over 20% and Free cash flow/revenue of 23%, at $20 or less, Coach shares represent a very good value.
McDonald's (NYSE: MCD) reported an 8.2% growth in same-store sales worldwide and it claims that there is no recession, at least as far as its business goes. McDonald's, like P&G and Wal-Mart Stores Inc. (NYSE: WMT) -- which reported a good quarter this week and is the only member of the DJIA whose shares have risen this year -- could do well in this recession.
Applied Materials (NASDAQ: AMAT) -- when it comes to Applied Materials, Steven Mallas don't see why anyone would buy it.
Starbucks Corp. (NASDAQ: SBUX) -- who wants $4 lattes in this economy, asks Jamie Dlugosch. Not many, he answers, especially when they can get decent coffee from McDonald's for much cheaper. He expects Starbucks' dismal performance to repeat itself next quarters and the stock to decline further.
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Reader Comments (Page 1 of 1)
11-14-2008 @ 6:08PM
Wily said...
Wanta get a good nights sleep? Stop drinking coffee. You'll notice results the first night.
11-14-2008 @ 8:11PM
ira said...
Buyer's market, buyer's market. Lookin' for a house (home)? Everything is on sale in this buyer's market. You know, there is opportunity lurking all over out there. There are people making strategic moves and will make a fortune from this period. Everything is on sale: businesses, real estate, stocks, etc. It just comes down to having the liquidity to start taking advantage of the bargains.
We will shake our heads at the missed opportunities when we look back.
EVERYTHING WILL REBOUND!
CASH! Piles of cold hard cash is the best way to weather the current economic situation. I discovered one of the best books you'll ever find about finance, "How to Become Filthy Rich on Your Current Income" at www.how-to-become-rich.com. If people read books like this one we would not have the current situation we do. As many people see doom and gloom right now, I see opportunity.
11-16-2008 @ 3:53PM
Joe said...
Nobody made you sell. If you hurt, you did it to yourself.
If you pay attention to what's going on you will see that many are buying stocks while it goes down.
It's a buyer's market. I'm making money because you sold, nudging the price down a bit more. Whose fault is that? Now Looking to buy GKK you should too way undervalued!