"Johnson & Johnson as well as FPL Group are two strong positions in companies that have suffered a few 'hiccups' during this historic panic selling, but are likely to survive and prosper in the next year.
"First, Johnson & Johnson, the health care and pharmaceutical giant, beat expectations in its most recent earnings report. The company's earnings jumped 30% to $3.3 billion on revenues of $15.9 billion. It currently is selling for only 15 times forward earnings -- a bargain price.
"Second,, FPL Group -- known as Florida Power & Light -- is a large Florida utility company that is holding up well. It, too, is a solid company that now is on sale because of the financial crisis.
"Revenues are down slightly to $15 billion, and earnings dropped 40% during the past year. But Florida Power is still profitable, and at 10 times next year's earnings, it should continue to recover.
"We think it is wise at this time to limit our exposure to the markets, and to keep our powder dry by focusing strictly on a few well-financed utilities and consumer product firms.
"Overall, we consider both Johnson & Johnson and FPL Group to be solid companies selling at a substantial discount to their real value."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
Another volatile week had passed over Wall Street, but by the end of it investors started breathing a sigh of relief in anticipation of the bailout plan. Those hopes were shattered Thursday night. Many believe that if the bailout plan doesn't get approved soon, the landscape on Wall Street will be very different, changing even more than it already has. The consequences of a financial meltdown would reverberate throughout the economy, here and globally.
Once again, BloggingStocks bloggers have looked at different stocks, trying to find the ones you may want to consider during these troubled times should you find yourself with some extra cash. Nerves of steel are a requirement for any investor these days.
Here are some picks from the past week:
Johnson and Johnson (NYSE: JNJ) - not only do Ron Rowland and Brandon Clay remind us that Johnson and Johnson was rated the world's most respected company, Cramer says that JNJ "is a super stock. Well managed, great earnings, good pipeline ..."
Monsanto (NYSE: MON) - as the undisputed leader in the genetically modified (GM) seed industry, Yiannis Mostrous and Roger Conrad think long-term-oriented investors will be rewarded handsomely with Monsanto.
JMP Securities upgraded Vertex Pharma (NASDAQ: VRTX) to Outperform from Market Perform following better-than-expected interim data for telaprevir.
Lazard Capital upgraded shares of Biogen Idec (NASDAQ: BIIB) to Buy from Hold on valuation after their physician survey indicated solid sales growth in the company's MS franchise.
Calyon upgraded Data Domain (NASDAQ: DDUP) to Add from Neutral based on positive channel checks and valuation.
Goldman added Buckeye GP (NYSE: BGH) to the Conviction Buy List.
Alcatel-Lucent (NYSE: ALU) was upgraded to Hold from Sell and Ericsson (NASDAQ: ERIC) was raised to Hold from Reduce at WestLB.
Keefe Bruyette upgraded Cowen Group (NASDAQ: COWN) to OUtperform from Market Perform.
Analyst downgrades:
Deutsche Bank downgraded shares of Lloyds TSB Group (NYSE: LYG) to Sell from Hold as they believe loan loss risk will outweigh synergies from the acquisition of HBOS (HBOOY).
Citigroup downgraded shares of National Financial Partners (NYSE: NFP) to Hold from Buy and removed the stock from the Top Picks Live List after the company announced July and August revenues and said pressure continues. The firm lowered their target to $20 from $28.
"To say that alternative energies are critical is a severe understatement." asserts Stephen Leeb, who looks at three plays in the sector that earn a spot in his Growth Portfolio.
The editor of The Complete Investor explains, "Readily scalable energy sources such as solar and wind account for under 1%. It's time to get serious."
Three of the stocks he has selected are holdings in his model Growth Portfolio: FPL Group (NYSE: FPL), Exelon (NYSE: EXC), and General Electric (NYSE: GE). Here's a trio of favorites.
"We have focused on those alternative energy stocks with the strongest growth profiles. None is a pie in the sky fantasy; all provide energy in the here and now and have significant and fast-growing revenue streams.
"The fact that their growth should continue to burgeon is one of the most heartening pieces of news on the energy front. We could argue that investing in these stocks not only will be good for your portfolio but is an act of patriotism as well.
With the U.S. economic landscape becoming more uncertain, it's prudent to add a defensive stock or two to your portfolio, and utility FPL Group, Inc. (NYSE: FPL) is worth an evaluation.
FPL Group boasts the fundamentals analysts like to see in a utility company: steady cash flow, above-par customer growth, adequate generating capacity, and favorable power market conditions. Further, analysts also like the cooperative regulatory environment in Florida, FPL's primary state, and the company's 2.3% dividend. With operations in 24 states, FPL has diversified operationally, but the focal point, for investors, is its Florida market: 4.4 million customers, and ample land for commercial and residential growth. The Reuters FY 2007/FY 2008 EPS consensus estimates for FPL are $3.46 to $3.88.
The risks? Analysts are keeping an eye on Florida's population growth and household formation for signs of any changes in long-term trends.
Stock Analysis: FPL Group is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from FPL's shares. Sell/Stop Loss if you were to purchase shares in this company: $48.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
MOST NOTEWORTHY: Sierra Wireless, Navteq, Goldleaf Financial, Infineon and VeriSign were today's noteworthy downgrades:
Piper downgraded shares of Sierra Wireless (NASDAQ: SWIR) to Market Perform from Outperform to reflect increasing competition for the company's core businesses and longer term margin concerns. Based on comments from Qualcomm (NASDAQ: QCOM), Piper believes the new Gobi embedded solution is gaining more traction than previously anticipated.
The firm also downgraded Navteq (NYSE: NVT) to Market Perform from Outperform as they believe the Nokia (NYSE: NOK) acquisition will close.
Credit Suisse lowered its rating on Goldleaf Financial (NASDAQ: GFSI) to Market Perform from Outperform following its weak Q3 report and guidance.
ABN Amro downgraded shares of Infineon (NYSE: IFX) to Hold from Buy as they believe the strength of the euro will hurt margins.
VeriSign (NASDAQ: VRSN) was downgraded to Hold from Buy at Hambrecht to reflect the uncertainty surrounding the company's numerous divestitures as well as the execution risk.
Ben Berkowitz is the business news editor at AOL. His weekly column highlights business stories with significant implications that were overlooked at first glance.
The story you didn't read this week but should have is that Bill Gates is heading for the exit on housing and energy stocks. When the world's richest man, who certainly has money to burn, says "nah, no thanks" to an entire sector, pay heed.
Gates sold out of a laundry list of stocks: KB Home (NYSE:KBH), Centex Crop. (NYSE:CTX), Pulte Homes, Inc. (NYSE:PHM), Lennar Corp. (NYSE:LEN), Beazer Homes USA, Inc. (NYSE:BZH), Ryland Group Inc. (NYSE:RYL) and WCI Communities, Inc. (NYSE:WCI) in the housing space; and AES Corp. (NYSE:AES), Chevron Corp. (NYSE:CVX), Consolidated Edison, Inc. (NYSE:ED), Dominion Resources, Inc. (NYSE:D), Duke Energy Corp. (NYSE:DUK), FPL Group, Inc. (NYSE:FPL) and Ameren Corp. (NYSE:AEE) in energy and utilities.
His move in housing was particularly striking - a November filing by his foundation showed new positions in a number of home builders, only to then sell the shares by Dec. 31.
Could it be that the housing market is just so lousy that Gates does not feel compelled to bother? This is a man who is so rich that, if he sold off everything he owned, he could give every man, woman and child in the United States something like $160 and still have plenty of money left over for the Egg McMuffins he was once known to favor.
As a contrarian technical analyst, Chris Johnson looks for sectors and stocks that are climbing a "Wall of Worry." Based on this criteria, the editor of The Insightful Investor notes, "The utility sector is positioned for a run of market-beating performance."
He explains, "In reviewing our sector analysis tools, we have found a sector -- and an associated exchange-trade fund as well as an individual stock -- that are poised to outperform the market, especially if the overall market it experiences any weakness.
He admits that the utility sector is "not terribly sexy," he believes that Utilities Select Sector SPDR (ASE: XLU) is poised to outpace the market based on what he calls "a combination of strong technical performance and negative sentiment."
Another volatile week had passed over Wall Street, but by the end of it investors started breathing a sigh of relief in anticipation of the bailout plan. Those hopes were shattered Thursday night. Many believe that if the bailout plan doesn't get approved soon, the landscape on Wall Street will be very different, changing even more than it already has. The consequences of a financial meltdown would reverberate throughout the economy, here and globally.
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