- NYSE Euronex (NYX) to conviction buy from neutral at Goldman.
- General Dynamics (GD) to buy from hold at Citigroup.
- Deere (DE), Parker-Hannifin (PH) and ExlService (EXLS) to overweight from neutral at JPMorgan.
- Aflac (AFL) to outperform from market perform at FBR Capital.
- Wynn Resorts (WYNN) to buy from neutral at Janney Capital.
- Amdocs (DOX) to buy from neutral at UBS.
- Juniper (JNPR) to buy from hold at ThinkEquity.
- Rudolph Tech (RTEC) and KLA-Tencor (KLAC) to perform from underperform at Oppenheimer.
- Hershey (HSY) and Pinnacle Entertainment (PNK) to outperform from market perform at Wells Fargo.
- Spirit AeroSystems (SPR) to equal weight from underweight at Morgan Stanley.
- Micron (MU) to outperform from neutral at RW Baird.
Continue reading Analyst Calls: AFL, DE, DOX, GD, GS, HSY, ITT, MS, NYX, TXN, UBS, WYNN ...
"Aerospace & defense contractor General Dynamics (GD) is a buy based on our value criteria," says J. Royden Ward.
The editor of Cabot Benjamin Graham Value Letter explains, "In our view, the shares are undervalued at 9.4 times forward 12-month EPS. Dividends have been paid since 1979 and currently provide a solid yield of 2.5%
"The company has an impressive record of increasing sales, earnings and dividends during the past 20 years which will continue unabated during the foreseeable future.
Continue reading General Dynamics (GD): Value in Defense
The list of stocks under consideration has been reduced from eleven to ten, to seven and now in today's story four. Starting with five major defense contractors and six major oil companies (see Chasing Value: You Must Own Defense and Oil for Safety), I began a search to find one stock in each sector that might be suitable for inclusion in my list of 2011 stock picks posted last week Chasing Value: 2011 Stock Picks -- The Journey Begin.
Today we continue our analysis by examining return on equity (ROE), return on invested capital (ROIC), and price-to-earnings-to-growth (PEG). Each stock is ranked by sector and metric from best to worst. Sometimes there are clear winners and others there is little to separate one stock from the next. However, in total, a picture can be drawn that does portray a superior opportunity.
Continue reading Chasing Value: Defense and Oil -- Part 3
We at BloggingStocks and everywhere else make the full gambit of prognostications, suggestions, predictions, guesses, analogies, and so forth in an attempt to improve potential investment opportunities for all our readers and provoke discussion.
All of this has its limits, but, if you are a fan of Professor Nassim NicholasTaleb and his best seller The Black Swan
then you already have been warned that the events that have the greatest impact on our lives and our investments are most often unpredictable. We cannot predict the future nor can we anticipate the tragedies that will tank our portfolio's.
While I do believe predicting the future is, how should I say, futile, there are general clues as to which way the wind blows.
Continue reading Chasing Value: You Must Own Defense and Oil for Safety
Yesterday I began a review of the five major U.S. defense contractors
, searching for potential stock value. The group included General Dynamics (GD
), Lockheed Martin (LMT
), Boeing (BA
), Northrop, Grumman (NOC
) and Raytheon (RTN
). After examining the P/E, PEG, P/CF, P/S, and P/B, Boeing did not make it through the screens.
Today I continue the exercise, hoping to find a stock worthy of placing a bet.
- Lockheed Martin: 3.77%
- Raytheon Company: 3.16%
- Northrop, Grumman: 2.89%
- General Dynamics: 2.59%
Continue reading Chasing Value: Scoping Out Defense Contractors -- Part 2
The defense sector is down, but don't count it out. We give lip service to the likelihood of defense being a target of budget hawks in Congress, but truth be told, the same fiscally conservative members are often the biggest supporters of defense.
Equally important is that unlike many other industries, this is one tech sector that keeps most of its jobs at home and well-distributed through the country. This, too, preserves defense spending.
The major players in the industry after 20 years of consolidation are General Dynamics Corp (GD
), Lockheed Martin (LMT
), Boeing Co (BA
), Northrop, Grumman (NOC
), and Raytheon Company (RTN
). In addition there are hundreds more making specialized parts in support of the majors and more still supplying basic elements like tires, wiring, computer processors, steel, aluminum, specialty glass, and ammunition. Then there are suppliers of manpower and smaller manufacturers producing unmanned aircraft drones and robots.
Continue reading Chasing Value: Scoping Out Defense Contractors -- Part 1
- Credit Suisse upgraded Netflix (NFLX) to neutral from underperform and raised its price target to $140 from $90. The firm's survey work indicates Netflix's streaming offering is compelling and will continue to grow as it acquires additional streaming content.
- Barclays upgraded Ford (F) to overweight from equal weight, citing the company's earnings power, reduced cost base, expectations for a return to prior peak margins and valuation. The firm raised its target to $16 from $15.
- Merriman upgraded OpenTable (OPEN) to buy from neutral based on increased visibility into international expansion from the toptable.com acquisition and upside from its Spotlight product.
- Siemens (SI) was upgraded to conviction buy from buy at Goldman.
- Medicis (MRX) was upgraded to buy from hold at Jefferies.
- IDEX (IEX) was upgraded to outperform from neutral at Baird.
Continue reading Analyst Calls: BT, BWA, COG, F, GD, HRS, LMT, MRK, NFLX, NOC, OPEN, SI ...
- Goldman upgraded Costco (COST) to buy from neutral based on valuation, improving fundamentals and potential catalysts. The firm raised its price target to $68 from $62.
- Soleil upgraded MGM Resorts (MGM) to buy from hold, citing valuation, easing balance sheet concerns and a multiyear convention recovery. The firm upped its target for shares to $14 from $13. Note, Soleil also downgraded Las Vegas Sands (LVS) to hold from buy.
- Piper Jaffray upgraded Phillips-Van Heusen (PVH) to overweight from neutral with a $59 price target following the company's better-than-expected Q2 results.
- Dell (DELL) was upgraded to buy from outperform at CLSA.
- CommScope (CTV) was upgraded to buy from neutral at UBS.
- EnCana (ECA) was upgraded to sector outperformer from sector performer at CIBC.
Continue reading Analyst Calls: BA, COST, DELL, GD, INTC, LVS, MGM, PCLN, TWX, V, VIA ...
General Dynamics (GD
) closed down 70 cents to $55.87. GD September option implied volatility
is at 28, November is at 32, above its 26-week average of 28 according to Track Data, suggesting larger November price movement.
Take-Two Interactive Software, Inc. (TTWO
) is expected to report Q3 EPS
on September 2. TTWO September put option
implied volatility is at 74, December and January is at 58; versus its 26-week average of 53 according to Track Data, suggesting larger price movement.
CBOE Volatility Index
closed down 1.11 to 26.10.
Update is by Stock Specialist Paul Foster of theflyonthewall.com
"In our newsletter, we maintain numerous model portfolios based on the strategies of leading investors, such as Warren Buffett, Ben Graham and Peter Lynch," explains John Reese
The editor of Validea
asserts, "Our Kenneth Fisher-based Portfolio has shown a 7-year annualized return of 11.9%; this approach focuses on a metric Fisher pioneered: the price/sales ratio.
"While investors for decades relied heavily on the P/E ratio, Fisher found that earnings -- even the earnings of good companies -- can fluctuate greatly from year to year.
Continue reading Kenneth Fisher Strategy: A Price-to-Sales Portfolio
- Citigroup assumed coverage of Boeing (BA) and upgraded the stock to Buy from Hold due to its positive view on the aerospace cycle and valuation. The firm raised its target for shares to $80 from $73.
- Morgan Stanley upgraded Motorola (MOT) to Overweight from Underweight citing expectations for higher handset margins driven by Android. The analyst raised Android unit shipping estimates and earnings estimates. The firm raised its price target on shares to $9.75 from $8.75.
- Susquehanna upgraded SINA Corporation (SINA) to Positive from Neutral and has a $50 target on the stock. The firm said Sina'a Twitter like service called 'Sina Weibo' has seen exponential growth and will crate huge value for the company.
- AOL (AOL) was upgraded to Neutral from Underperform at Credit Suisse.
- Frontier Communications (FTR) was upgraded to Sector Perform from Underperform at RBC Capital and to Buy from Hold at Hudson Square.
- Canadian Solar (CSIQ) was upgraded to Outperform from Market Perform at Wells Fargo.
Continue reading Analyst Calls: BA, MOT, AOL, AMZN, JNPR, IBM, LMT, PCLN, MFE
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