Nucor Corporation (NYSE: NUE) - This is one of the world leaders in the idea of mini-mills. This smallish steel producer prides itself on running a tight ship, pays a dividend and has a P/E under 9. The steel industry has been volatile in recent years with many mergers and acquisitions. NUE could be a takeover target as the industry continues to consolidate. In the mean time, at Friday's closing price of $51.6, it was paying a 4.05%yield and is near its 52 week low, having dropped from a high of $83.56.
Precision Drilling TR (NYSE: PDS) - This Canadian supplier of gas drilling equipment and manpower is probably the least well known of the companies in this group. It has dropped off its highs with the recent sag in gas prices and may well be a bargain again although not the bargain it was when I posted Chasing Value: Precision Drilling for 10% yield. At Friday's closing price of $21.35 it was paying a 7.1%yield and that is still a wonderful bounty even it the stock only appreciates a little.
The stock market is in turmoil today and the reasons can be found elsewhere (including in some peoples' imaginations). But if you are a bottom line investor, then here is where you should be looking. Food and energy exploration are the places to be.
Things can change rapidly, but as of right now food related stocks like Bunge Ltd. (NYSE: BG), the largest company involved with soy based products, and Potash Corp. of Saskatchewan (NYSE: POT), the largest fertilizer company, are up.
In the exploration sector, Anadarko Petroleum (NYSE: APC), the oil, gas and exploration company, Loews Corporation (NYSE: LTR), which is the majority shareholder in Diamond Offshore Drilling and is separating from its tobacco interests, and Precision Drilling TR (NYSE: PDS), the Canadian contract driller that is expanding into the lower 48 states, are all up.
All five stocks have out performed the market this year and that trend does not seem to be in jeopardy yet.
I will update this post with final results after the market close to see how the story ends.
UPDATE: four of the five closed in positive territory when all the major indices were in the red.
APC finished down to $77.69,-0.54 (-0.69%)
BG finished up to $122.40, +0.47 (+0.39%)
LTR finished up to $48.95, +0.45 (+0.93%)
PDS finished up to $26.95, +0.49 (+1.85%)
POT finished up to $223.10 +2.54 (+1.15%)
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of APC and PDS.
Today was a very gloomy day in the stock market with Oil reaching new highs and everything else losing -- almost. Among the few winners, and I mean very few, Apple Inc. (NASDAQ: AAPL), oil, and specialty steel were up. I went through my watch list and found this very short list of winners:
MOST NOTEWORTHY: Progressive, Netflix and Public Service Enterprise Group were today's noteworthy upgrades:
Wachovia upgraded Progressive (NYSE: PGR) to Market Perform from Underperform based on modest signs of improvement in underwriting trends.
Lehman upgraded Netflix (NASDAQ: NFLX) to Overweight from Equal Weight based on strong core trends and a potential announcement of digital service partners into its May 28 investor day.
Credit Suisse upgraded Public Service Enterprise Group (NYSE: PEG) to Outperform from Neutral based on earnings growth through utility investment, valuation, upside from U.S. CO2 policy.
OTHER UPGRADES:
Precision Drilling (NYSE: PDS) was raised to Outperform from Sector Perform at RBC Capital.
Hertz Global (NYSE: HTZ) was upgraded at Soleil to Buy from Hold.
Calyon upgraded Foundation Coal (NYSE: FCL) and Arch Coal (ACI) to Add from Neutral.
It was only a few weeks ago I was thinking, how much higher can this one go but sure enough, Precision Drilling Services TR (NYSE: PDS), the Canadian Trust went higher. In my last report, PDS announced its monthly dividend distribution. The current yield is 5.6% down from the 10% range it was paying when I first recommended it, but still a good return.
Today PDS closed at $28.04, a new 52-week high, now 81.24% above the $15.47 it was five months ago. During the trading day it touched on $28.12.
Last month Precision reported a 33% loss and still the share price is moving up. This supports all the reports that keep popping up regarding the price differential between natural gas and oil suggesting the the NG prices are going up and that drilling companies like PDS will be swamped. Although PDS has had a rough trailing 12 months, creating the buying opportunity, the stock price is clearly being lifted by anticipation of a bright future.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of PDS.
It should not come as a surprise to many that as crude oil pushed $120 per barrel and gas prices passed $4 a gallon at the pump Anadarko Petroleum (NYSE: APC) reached a new 52 week high of $71.12 and finished Tuesday at $70.07. The stock is up over 75% (not including the dividend) since I recommended it last year.
At the time I disclosed that I acquired the stock at $40 and suggested this was a keeper. I like the fact that the company has a substantial amount of its proven oil and natural gas reserves in North America. It also pays a modest dividend 0.52% while sporting a P/E under 9 (TTM). When last I posted on the subject -- Serious Money: great picks: Aluminum Co. of China & Anadarko -- about ten weeks ago, APC was trading at $55, down from its previous high, though still returning a nice gain. That was the time to buy on the dip if you were watching it.
The current dividend yield of 5.8% remains very generous and far above most other stocks in the sector. After some of my high dividend stock recommendations either under performed or simply cut their distribution, it is reassuring to see that PDS not only is maintaining its dividend, but in this particular case continues to pay out monthly, allowing for better compounding of the yield.
The stock closed today at $27.15, up 75.5% from $15.47 when I recommended the stock three months ago. If you got into the stock back then you would still be receiving over a 10% yield. Last year I had several high flyers but not all of them stayed up so I am watching Precision closely for signs of weakness or changes in the business.
The Dow Jones Industrial Average is down about 150 points as I peck away on my laptop. I was looking to see what stocks were holding up on a down day, and sure enough one of my favorites showed up -- Precision Drilling Services TR (NYSE: PDS), a stock I recommended two months ago.
I apologize if I seem like a cheerleader, or a play-by-play announcer, but it was only two weeks ago that I posted on what were already strong gains, and this one keeps going up (even though its business is to drill down...).From my original December recommendation at $15.47 per share, PDS has moved up to $22.61 by midday today and climbing, for a 46% gain. This is when the Dow industrials are down almost 7%.
Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.
For his new favorite, the advisor looks to Precision Drilling (NYSE: PDS). He explains, "If you like to buy good companies at beaten-down prices, take a good look at this income trust.
"Precision Drilling, which provides services to the Canadian oil patch, has been battered and bruised by a decline in oil exploration activity, distribution cuts, and, of course, the proposed new tax on income trusts which is now working its way through the Parliament of Canada.
"Investors were hit with a second distribution cut in six months when the trust announced on May 18 that it is chopping another 32% off its monthly payment, slicing it to 13 cents. That reduces the annual payment to $1.56 a share, less than half last year's level of $3.24.
"There's no doubt this oilfields service provider is going through a tough period and management hasn't tried to sugar-coat the situation. Despite the gloomy outlook, RBC Capital Markets said in a research report that the firm's dividend cut probably represents the last one for the year.
"The trust's payout ratio should now be marginally below that of other oil service providers and it is generally expected that drilling activity will pick up later this year.
MOST NOTEWORTHY: Acorda Therapeutics Inc (ACOR) and Coach, Inc (COH) were some of today's most notable initiations:
Morgan Joseph started Acorda Therapeutics Inc (NASDAQ: ACOR) with a Sell rating and $15 target citing seizure rates for Fampridine-SR and limited efficacy for its rating.
Coach, Inc (NYSE: COH) was started at Soleil with a Buy rating and $58 target; the firm believes continuing market share gains should create a long-term EPS growth rate of 23%.
OTHER INITIATIONS:
Morgan Stanley initiated Time Warner Cable (OTC: TWCA) with an Equal Weight rating.
Raymond James started Legacy Reserves LP (NASDAQ: LGCY) with an Outperform rating and $27 target.
Wedbush initiated Avaya Inc (NYSE: AV) with a Hold rating and $14 target.
Nollenberger initiated Rudolph Technologies Inc (NASDAQ: RTEC) with a Buy rating and $26 target, citing valuation.
Precision Drilling Trust (NYSE: PDS) was initiated at CIBC with a Sector Performer rating.
Lehman Brothers started Polo Ralph Lauren Corp (NYSE: RL) with an Overweight rating and $100 target.
Bank of America reinstated The Nasdaq Stock Market Inc (NASDAQ: NDAQ) with a Neutral rating and $33 target.
In my recent posts, I have been reviewing the most popular sectors for the coming year, according the the newsletter advisors who participated in the Top Picks from 2007 report. In my last post, I highlighted stocks in healthcare, tech, and telecom. Today, I want to review the resource sectors -- energy and metals -- that remain very popular among advisors, despite being out-of-favor in recent trading.
First, let's look at the metals, where gold remains a popular choice. Sy Harding chose ASA Bermuda, a closed-end gold fund, Curtis Hesler selected Yamana, and Martin Weiss opted for Kinross.
Outside of the precious metals, Tom Bishop chose copper play, Taseko Mines, while Neil Macneale selected steel stocks.
Equally as volatile as metals -- and currently out-of-favor -- has been energy. The energy sector has been high on the list of Top Picks for the past 4 years. This year, however, there is a noticeable shift.
Each year, Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Stocks Report.
Precision Drilling (NYSE: PDS) is the favorite speculative stock for 2007 from utility specialist Roger Conrad. The editor of The Utility Forecaster notes, "Precision converted to a Canadian income trust last year and its shares were immediately off to the races, riding enthusiasm about its big dividend and growth of activity in North American drilling.
"The second half of 2006 has been 180 degrees different, due to a slump in energy patch activity in Canada and the government's proposal to tax income trusts beginning in 2011. As a result, the stock is yielding 13%, a level usually reserved for Wall Street basket cases.
"Precision, however, is far from it, holding more than 40% of the fast-growing deep drilling market in Canada and rapidly expanding on both sides of the border. Cash flow continues to cover the dividend by a generous margin, and with energy patch activity picking up in North America at the end of 2006, it should do so by an even wider margin in 2007.
"Being taxed again as a corporation would almost surely mean a lower dividend. But in the meantime, the trust will continue to pay out big, and the shares should benefit from faster energy patch activity.
"Also, the income trust tax changes are priced in, so there's no real additional risk on that front, and a possibility the ultimate change by the government will be considerably more favorable. A further slowdown in energy patch activity is also priced in to the shares, so all the potential surprises are positive and will bring upside. Buy Precision up to 30."
To see Roger's favorite conservative stock for 2007, click here.
This is a continuation of Serious Money: Choose these 5 stocks over CDs -- DEO, GE, HNP, JPM, MRK, which listed the first five stock ideas. Below are the other picks rounding out the ten.
The stock market is in turmoil today and the reasons can be found elsewhere (including in some peoples' imaginations). But if you are a bottom line investor, then here is where you should be looking. Food and energy exploration are the places to be.
Today was a very gloomy day in the stock market with Oil reaching new highs and everything else losing -- almost. Among the few winners, and I mean very few,.gif){kind=logo}
It was only a few weeks ago I was thinking, how much higher can this one go but sure enough, 
The Dow Jones Industrial Average is down about 150 points as I peck away on my laptop. I was looking to see what stocks were holding up on a down day, and sure enough one of my favorites showed up -- 
Gordon Pape, editor of 
To see Roger's favorite conservative stock for 2007, 
Comfort Zone Investing: Oil's down, which is a start, but not good enough
Stocks have their worst week in six years
Why haven't the Republicans said much about the economy?
