This week started with a positive momentum as the auto industry bailout seemed to have a chance of passing, and President-elect Obama announced a huge stimulus plan, including infrastructure investment that could boost the weak job market.For a few days, things seemed like they were almost back to normal. Until Thursday -- when the Senate failed to pass the bailout. This was aggravated by news of the ex-Nasdaq chair being accused of a massive $50 billion 'Ponzi scheme,' and economic indicators that actually were not as bad as expected.
Still, if the automakers manage to get assistance from somewhere else, we might see some sort of stabilization. If that happens, some investors may choose this time to return to the market. This week's theme among BloggingStocks contributors seemed to revolve not just around 'cheap' but also on yield. Competent management also plays a bigger role these days when picking stocks.
Here are some picks from this week:
Jim Cramer took a hard look at these high yielders: Dow Chemical (NYSE: DOW), General Electric (NYSE: GE), Du Pont (NYSE: DD) and Intel (NASDAQ: INTC). He cautions against jumping in without considering "which companies have gone into survival mode to get there? Which companies will even make you money if they cut the dividend?"
Wells Fargo (NYSE: WFC) would be a buy on a dip, says Sheldon Liber. It is still paying a 4.7% yield and seems to be maintaining a very high 15% profit margin on its trailing figures.
General Electric (NYSE: GE), Cisco Systems (NASDAQ: CSCO) and Emcor Group (NYSE: EME) are Peter Cohan picks as plays on Obama's $900 billion infrastructure boost. GE thanks to its Ecomagination program, Cisco because it makes communication infrastructure gear and Emcor since it makes systems for voice and data, electrical power and lighting.
H&R Block (NYSE: HRB) could be interesting. Given the market volatility this year, many people may need the services of H&R Block come tax season to account for all their various stock transactions. Steven Mallas thinks this one might be worth a look ahead of tax season.
Southern Copper (NYSE: PCU) is another high yield, and a contrarian play. While the dividend has been cut as earnings were hit thanks to dropping copper prices, it is still over 12%. With a long-term good outlook for copper and with the stock trading at a P/E of 7, this may be a good time to act.
Anglo American ADR (NASDAQ: AAUK) -- buying this one is like hiding our money in the ground, says Sheldon Liber. AAUK is your hedge against inflation.
Burlington Northern (NYSE: BNI) is likely to suffer from lower industrial and consumer product shipments but still benefit from strong demand in the coal sector. Also, it is a well-managed company that is equipped to weather the storm and the fundamentals are good. Analyst Tom Slee put a target of $100 on this one.
CryptoLogic (NASDAQ: CRYP) is a leading provider of software for the Internet gaming space for non-U.S. players and is a spec play. Jamie Dlugosch suggests "that there is a legitimate trigger here for some serious upside" given regulations for online gambling could change. "Sometimes that's all it takes for a penny stock like CRYP to take off."
PepsiCo (NYSE: PEP) and Heinz (NYSE: HNZ) -- we can't really have a week without consumer staples being mentioned these days as everybody seems to think these will endure a tough economy better.
Bucyrus International (NASDAQ: BUCY) is another Cramer pick. This maker of mining equipment "is at the fulcrum of everything that is going wrong and everything that is going right in this market," says Cramer.
This past week, Elizabeth Harrow also looked at 15 cheap stocks for 2009 as part of an overall feature.
Costco (NASDAQ: COST) missed when reporting this week and Jamie Dlugosch is not impressed with management there, which failed to take advantage of the current economic weakness and prevent consumers from flocking to discounters. "You can't fix bad management," he says, so "Don't stick around to see how the story ends. Find something else with better management."
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Reader Comments (Page 1 of 1)
12-12-2008 @ 7:55PM
nolobeach said...
The quickiest way to earn a 20% plus return on your money is to payoff your credit card debt. Guaranteed to work every time. Now is a great time to invest in paying down debt and hoarding piles of cash. 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.
12-12-2008 @ 7:55PM
nolobeach said...
The quickiest way to earn a 20% plus return on your money is to payoff your credit card debt. Guaranteed to work every time. Now is a great time to invest in paying down debt and hoarding piles of cash. 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.
12-12-2008 @ 11:42PM
RJW said...
Jim Cramer is an idiot. I used his service and listened to his show a few years ago. I lost thousands of dollars investing in companies that he urged listeners to invest in. They weren't companies that he just said were favorable or not, these were investments that he was passionate about. I took his advice and these investments went nowhere but down, and he always had a poor excuse months later when they tanked. My investments did better when I took advice from friends, Cramer owes me money that I lost becasue of his BAD ADVICE!
12-13-2008 @ 4:57AM
Larry Dum said...
Want a sure way to make a small fotune in stock market? First, you start with a large fortune.
12-13-2008 @ 11:10AM
Driver X said...
I guess Cramer picks GE for job security. GE is a loser.
12-13-2008 @ 12:19PM
USAGE said...
I do not beliefe any stock that JIM CRAMER picks, he has been so wrong and his screaming has been an empty show.
I stick with my medical, great dividend stock that has served me well and steadyly will go up again. PFE has shown me to be a strong company who will weather this storm.
12-13-2008 @ 3:53PM
Bob Gifford said...
Know how to come out with one million
in the stock market?
start with two million.
12-14-2008 @ 11:46AM
dave said...
cramer sucks,he's like the bookie
win or loose,he still gets paid!
12-14-2008 @ 9:55PM
Dereg Reggie said...
The blue chip stock in 2009 is Repos R Us. Its business in Michigan is already red hot.
6-05-2009 @ 4:49PM
Nick said...
Cramer is *&^%ing DUM *ss, Remember my post COAL is king look at BTU and MEE. Should see 20-30% increases within 6 months. Obama keeps harping on clean coal technolgy, HELLO!!!!!!!!!!!