"With high-quality stocks on sale, now seems an opportune time to look for bargains among small and midcap blue chips," suggests Richard Moroney.

In his Upside Stocks advisory, which uses the quantitative-based Quadrix ratings system, he says, "We've found several 'Best Buys' with superior year-ahead potential."

Here, the analyst looks at Aeropostale (NYSE: ARO), Catalyst Health (NASDAQ: CHSI) and Hornbeck Offshore (NYSE: HOS).

Continue reading Quant picks: A trio of ' best buys'

Quant picks: A trio of ' best buys' originally appeared on BloggingStocks on Mon, 24 Aug 2009 11:00:00 EST. Please see our terms for use of feeds.

Stocks are up this year but not everyone is profiting. One reason is that many investors, stung by the market collapse, have been looking for safety by investing in dividend paying stocks. But Richard Moroney, editor of Dow Theory Forecasts, says that investing for yield is a flawed strategy.

Moroney, a chartered financial analyst, points out that while the S&P 1500 Index is up about 16% so far this year, investors in high-yielding stocks (with yields of 4% or more) have a year-to-date return of just 4%. And he says that stocks that do not pay dividends are up an average of 29%.

We spoke with Richard Moroney to find out why this is the case -- and what income investors should do.

Continue reading Guru Strategy: Don't look to high yield stocks for high returns

Guru Strategy: Don't look to high yield stocks for high returns originally appeared on BloggingStocks on Thu, 18 Jun 2009 17:30:00 EST. Please see our terms for use of feeds.

"We screened our database for standouts based on meaningful profit surprises," says quantitative analyst Richard Moroney.

In Upside, a service focused on applying in-depth quantitative analysis to small to mid-cap growth companies, he looks at a trio of stocks earning his "Best Buy" rating -- Priceline (NASDAQ: PCLN), Sybase (NYSE: SY), and Synaptics (NASDAQ: SYNA).

"All things equal, the better a stock's earnings momentum and profit outlook, the more likely it is to outperform in the year ahead.

Continue reading Earnings surprises: Quant picks 'best buy' trio

Earnings surprises: Quant picks 'best buy' trio originally appeared on BloggingStocks on Tue, 16 Jun 2009 15:00:00 EST. Please see our terms for use of feeds.

"We are still finding attractively valued growers in tech," says quantitative analyst Richard Morney.

In his Upside stock advisory newsletter, he notes "We have found several especially promising tech stocks with solid track records, strong finances, and attractive growth prospects."

Here, the advisor reviews three stocks that earn his top 'best buy' rating: Akamai NASDAQ: AKAM), Synaptics (NASDAQ: SYNA) and TeleCommunications Systems (NASDAQ: TSYS).

Continue reading A trio of technology values

A trio of technology values originally appeared on BloggingStocks on Tue, 21 Apr 2009 14:30:00 EST. Please see our terms for use of feeds.

"We see smooth seas ahead for deepsea driller Oceaneering International (NYSE: OII)," says Richard Moroney.

The editor of the blue chip advisory, Dow Theory Forecasts, explains, "Most of the world's untapped oil reserves lie under the ocean floor, and oil producers are spending an increasing portion of their capital budgets on deepwater drilling."

"While oil prices don't directly affect Oceaneering International's profits and cash flows, they do move the stock. Oil prices fell by two-thirds in the second half of 2008, pushing Oceaneering shares under $20 for the first time since July 2005.

Continue reading Smooth seas for Oceaneering International (OII)

Smooth seas for Oceaneering International (OII) originally appeared on BloggingStocks on Tue, 31 Mar 2009 12:30:00 EST. Please see our terms for use of feeds.

"Long-time healthcare investors can be forgiven their confusion; drug stocks are supposed to be defensive, but many of the largest drugmakers have been pounded," observes Richard Moroney.

Nevertheless, in the blue chip Dow Theory Forecasts, the advisor sees two favorite healthcare and pharmaceutical issues as long-term opportunities: AstraZeneca (NYSE: AZN) and Johnson & Johnson (NYSE: JNJ).

Moroney explains, "Healthcare companies' profits are supposed to remain fairly steady regardless of the economic situation. But hospitals' capital spending fell in the December quarter, and many consumers are putting off medical care because they cannot afford it.

Continue reading Healthcare favorites for long-term growth

Healthcare favorites for long-term growth originally appeared on BloggingStocks on Wed, 04 Mar 2009 14:00:00 EST. Please see our terms for use of feeds.

"What's going on with Transocean (NYSE RIG), the owner of the world's biggest fleet of offshore drilling rigs?" asks Richard Moroney, a specialist in blue chip stocks.

In his Dow Theory Forecasts, he explains, "The shares plunged 67% - nearly $100 a share - in 2008, and we can't blame the usual suspects." Here, he explains why he continues to rate thes stock a "Focus List Buy" in his blue chip-focused advisory service.

"Poor operating performance? Wall Street expects 2008 per-share profits of $14.34, up 68%. Shaky future? Transocean is expected to grow per-share earnings 4% in 2009 and 10% annually over the next five years.

"Fundamentals eroding? Not at all. The balance sheet is sturdy and the backlog stout at $41 billion, or three times expected 2009 revenue. Rather, we see two chief contributors to Transocean's steep slide, and neither should jeopardize long-term prospects.

Continue reading Transocean (RIG): A platform for profits?

Transocean (RIG): A platform for profits? originally appeared on BloggingStocks on Fri, 06 Feb 2009 14:15:00 EST. Please see our terms for use of feeds.

"One of my favor defensive sectors is healthcare," says Elliott Gue; the contributing editor to Personal Finance looks to Quality Systems (NSDQ: QSII), a company that helps automate medical records.

Quantitative analyst Richard Moroney also sees opportunity in the same niche sector. In his Upside newsletter, he looks to a competing play, Cerner (NASDAQ: CERN). Here are their reviews.

"The President made health care a centerpiece of his campaign, including investments in health care-related information technology (IT).

"Health care IT systems can save doctors' offices and hospitals significant administrative costs as well as prevent mistakes. In addition, some major health insurance firms are already putting heavy pressure on their physician networks to adopt these systems."

"Medical offices and hospitals are seeking to automate many functions, from storing patient records online to automatically submitting insurance claims for reimbursement.

"It's estimated that as much as 90% of health care records at smaller medical practices are still maintained in paper form, while even bigger hospitals keep close to half of their records manually.

"Quality Systems, a holding in our growth portfolio, is a leading provider of such systems. It sells software used to manage electronic patient records, billing, scheduling and other common administrative functions for medical and dental practices.

Continue reading Obama's plans boost electronic medical records firms

Obama's plans boost electronic medical records firms originally appeared on BloggingStocks on Tue, 20 Jan 2009 15:30:00 EST. Please see our terms for use of feeds.

This post is part of a report entitled "Six-pack of technology favorites." You can read about the other top tech stock picks here.

"For more than a decade, International Business Machines (NYSE: IBM) lived up to its reputation as a slow-growing, stodgy company," says Richard Moroney.

The editor of the blue chip advisory, Dow Theory Forecasts, contends, "But over the last 12 months, the picture changed. Strong operating momentum is now propelling genuine operational growth despite U.S. economic weakness."

"Acquisitions and cost cuts have accounted for most of IBM's growth in recent years. In the 10 years ended 2006, sales increased at an annualized rate of less than 2%, and the company lost both market share and in?uence.

"However, sales growth has accelerated in each of the last three quarters, and per-share pro?ts have risen at least 23% in each period. Consensus estimates, trending upward over the last month, project per-share-pro?t growth of 24% in 2008 and 11% in 2009.

"A broad business mix has helped the company keep growing during the economic slowdown. IBM may still be best known for its hardware, but the company's strength over the last year has stemmed from the services and software businesses, which tend to be less economically sensitive than hardware.

"Hardware accounted for about 18% of sales in the six months ended June, while services represented 58% and software generated 20%. Financing operations brought in most of the last 4%.

"While the current economic climate has pinched the consumer, companies are still investing heavily in new technology. IBM's products and services help customers improve ef?ciency, productivity, and security, which in turn can reduce costs. In the six months ended June, IBM's revenue rose 12%, while per share-pro?ts jumped 34%. Revenue from services increased 17% in the six-month period.

Continue reading IBM: 'The picture has changed'

IBM: 'The picture has changed' originally appeared on BloggingStocks on Sun, 31 Aug 2008 11:00:00 EST. Please see our terms for use of feeds.

With concerns over recession, turmoil in the financial sector, fear of rising rates, high market volatility and a rising aversion to risk, many investors have been avoiding technology stocks.

Investors have feared that these economic headwinds will dampen both consumer spending for technology products and reduced capital expenditures for technology in the corporate sector.

Despite these concerns, some of the newsletter industry's leading advisors are looking beyond the current malaise and seeing longer-term value in some of the tech sector's leading players. They believe that much of the "bad news" is already reflected in the price of the shares, with little recognition being given to their longer-term potential.

For those willing to go against the crowd and buy, as they say, "while blood is running in the street," we offer a six-pack of technology stocks that the some top advisors considers to be among their favorite ideas.

Continue reading A six-pack of technology favorites

A six-pack of technology favorites originally appeared on BloggingStocks on Thu, 28 Aug 2008 17:15:00 EST. Please see our terms for use of feeds.

"Our 'Forecasts Focus List' contains only two energy stocks, both of which are in the oil services sector: Oceaneering International (NYSE: OII) and Transocean (NYSE: RIG)," says blue chip advisor Richard Moroney.

The editor of Dow Theory Forecasts says, "While stocks in the equipment and services group tend to move with oil prices in the near term, their profits depend more on exploration spending than on commodity prices."

"Concerns about slowing demand for crude oil and re?ned products both in the U.S. and overseas have many investors worried. But investors in the equipment and services group should not panic.

"Most producers continue to spend aggressively. And U.S. crude-oil inventories remain well below the average for this time of year, with fewer than 20 days of supply in storage.

"Demand for offshore-drilling services remains strong, giving Transocean excellent growth potential. Consensus estimates project per-share profits will rise 69% in 2008 and 15% in 2009. Transocean, the world's largest offshore drilling contractor, operates in every major drilling region.

"A combination of tight global rig supplies and the ongoing discovery of new offshore reserves have driven rig lease rates higher and kept Transocean's fleet busy. The company's largest, most expensive rigs are 95% sold out for 2009, and the backlog is growing.

Continue reading Drilling for gains in offshore drilling services

Drilling for gains in offshore drilling services originally appeared on BloggingStocks on Wed, 20 Aug 2008 14:28:00 EST. Please see our terms for use of feeds.

"Partial insulation from the economic slowdown, coupled with new military-aircraft programs, give Lockheed Martin (NYSE: LMT) attractive capital-gains potential over the next several years," says Richard Moroney.

In his blue chip oriented Dow Theory Forecasts, the advisor explains, "A diversified business mix provides investors a measure of safety in a dif?cult economic climate. The stock is a Focus List Buy."

"Lockheed seems well-positioned with regards to the U.S. defense budget, with very little exposure to Iraq. The company is capable of growing pro? ts even if the new U.S. president pulls troops out of the country.

"While defense-spending growth is likely to slow in coming years, ongoing security threats and the need to replace aging equipment should keep the baseline defense budget, which excludes war-related costs, growing through at least 2012.

"A diversified business mix provides investors a measure of safety in a dif?cult economic climate. After the Air Force, Lockheed's next-largest end market is civil government and homeland security, accounting for 26% of revenue.

"The U.S. Navy accounts for 20% of sales and the Army 10%. About 13% of sales are international, and the U.S. communications industry accounts for 3%.

Continue reading A look at Lockheed (LMT): More than defense

A look at Lockheed (LMT): More than defense originally appeared on BloggingStocks on Fri, 08 Aug 2008 12:05:00 EST. Please see our terms for use of feeds.

"For investors who seek superior relative performance but are unwilling to sacrifice dependability, the we offer four funds that consistently outperform their peers," says Richard Moroney.

In the mid-year forecast for his Dow Theory Forecasts, he explains, "All of these funds have outpaced category averages in each of last five years, and sometimes much longer." Here, he looks at those funds that he considers "perennial winners."

"To be sure, past returns do not guarantee future success. But, while the evidence is not conclusive, academic studies generally indicate performance tends to persist, particularly at the extremes. That is, the best funds continue to outperform their peers, while the worst funds keep lagging.

"Fidelity Export & Multinational (FEXPX), our favorite pick among large-company growth funds, is riding an impressive nine-year winning streak - the longest in its category. Among the more than 1,800 large-cap growth funds, less than 80, or roughly 4%, have outperformed the peer-group average for five straight years.

Continue reading Four favorite funds: 'Perennial winners'

Four favorite funds: 'Perennial winners' originally appeared on BloggingStocks on Fri, 27 Jun 2008 10:35:00 EST. Please see our terms for use of feeds.

In its mid-year forecast, Dow Theory Forecasts -- which has been published for 5 decades -- features its top current picks, including IBM (NYSE: IBM), which earns its top designation as a "Focus List Buy."

Editor Richard Moroney explains, "IBM has repeatedly forecast its goal of per-share earnings of $10 to $11 in 2010. The company is well on its way to achieving that goal. Software, in particular, is key to IBM's earnings target.

"The company completed its acquisition of Telelogic in April, three months after purchasing Cognos. IBM expects acquisitions to contribute 3% of its goal of 7% to 10% growth in software sales.

"From 2002 to 2007, mainframe sales averaged 6% growth, but sales fell in three of those years, including 2007. The March quarter showed no improvement, as sales in the division fell 7%. But, with energy prices up, IBM sees an opportunity with its new, energy-efficient Z-series mainframe.

"Server sales have been spotty, but IBM's sales force translates server revenue into two to three times as much in software and systems revenue. IBM, with the potential to reach $155 to $165 over the next 12 months, is a Focus List Buy and a Long-Term Buy."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

IBM: A 'focus list' favorite originally appeared on BloggingStocks on Tue, 17 Jun 2008 09:55:00 EST. Please see our terms for use of feeds.

"Uncertainty about the legal disputes has weighed on Qualcomm (NASDAQ: QCOM)," says Richard Moroney, who rates the stock a long-term buy. The editor of Dow Theory Forecasts explains, "Though the court case may distract investors, Qualcomm's long-term fundamentals appear solid." Here's his bullish outlook.

"The company is embroiled in disputes over royalty fees paid for use of its patents, particularly by one of its largest customers, Nokia. In March, the combatants agreed to consolidate a host of lawsuits into one case to be heard later this year and likely to be decided by year's end.

"Barring a disastrous court loss, which seems unlikely, Qualcomm shares should benefit. Any resolution will reduce uncertainty. By the end of this year, Qualcomm should be able to jettison some of the baggage holding back its stock.

"While the U.S. economic slowdown has sparked fears of a decline in demand for microchips, Qualcomm should benefit as cell-phone users worldwide transition to third-generation technology, which allows for faster downloading of video, music and other data.

Continue reading Qualcomm (QCOM): Legal worries create buying opportunity

Qualcomm (QCOM): Legal worries create buying opportunity originally appeared on BloggingStocks on Fri, 16 May 2008 11:48:00 EST. Please see our terms for use of feeds.

"Shares of Walgreen (NYSE: WAG) have come under pressure in recent months, reflecting a slowdown in sales because of a weakening economy and intensifying competition," notes Richard Moroney.

The editor of Dow Theory Forecasts adds, "However, Walgreen's long-term prospects remain appealing, and the stock is attractively valued. Walgreen is a Long-Term Buy." Here is his review.

"Big, strong, and healthy, Walgreen is the largest U.S. drugstore chain as measured by revenue and the second-largest based on store count.

"The company operates more than 6,200 stores in 48 states and Puerto Rico and plans to boost the count to 7,000 by fiscal 2010 ending August. Walgreen sees long-term potential for about 13,000 U.S. stores. Prescriptions generate about 65% of total sales, with the rest coming from general merchandise.

"In fiscal 2007, both pharmacy and general merchandise sales growth outpaced the industry average, and Walgreen increased market share in nearly all of its core categories.

Continue reading Walgreen (WAG): A 'big, strong and healthy' buy

Walgreen (WAG): A 'big, strong and healthy' buy originally appeared on BloggingStocks on Wed, 07 May 2008 09:43:00 EST. Please see our terms for use of feeds.

"One way to deal with a choppy market is to focus on steady performers with strong market positions in growing industries," says Richard Moroney.

In his Upside Stocks, a leading newsletter focused on small and mid-cap stocks,, he notes, "PetMed Express (NASDAQ: PETS), a leading nationwide pet pharmacy and retailer, fits the bill nicely." Here, the advisor offers his review.

"PetMed Express sells prescription (30% of fiscal 2007 revenue) and nonprescription medications and health products (70%) to retail customers ordering by phone, via the Internet, or through a catalog. The company's Web site generates nearly two-thirds of annual sales.

"Fiscal 2008 ending March should represent the firm's sixth consecutive year of at least 20% per-share profit growth. While earnings growth is expected to slow to about 10% in fiscal 2009, recent operating results suggest PetMed is capable of exceeding consensus expectations.

"PetMed is benefiting from strong market fundamentals and constructive trends. An estimated 63% of U.S. households own a pet, up from 56% in 1988. The U.S. dog and cat population is estimated at a staggering 163 million.

Continue reading PetMed Express (PETS): Puppy profits?

PetMed Express (PETS): Puppy profits? originally appeared on BloggingStocks on Mon, 07 Apr 2008 12:34:00 EST. Please see our terms for use of feeds.

"Give muni bonds a good look." says Richard Moroney in Dow Theory Forecast, a leading "blue chip" newsletter that has been publishing for over five decades, who offers a trio of Vanguard funds for investors seeking safety and income.

The advisor explains, "Municipal bonds are showing signs of life, presenting investors with an intriguing opportunity." Here, he review the situation and offers some favorite investment vehicles.

"Muni bonds usually yield less than Treasurys because interest payments from municipals are exempt from federal income taxes.

"But in today's topsy turvy market, intermediate-term municipal bonds now yield around 3.7%, versus 3.6% for 10-year Treasurys. A tax-free yield of 3.7% is the equivalent of a taxable yield of 5.5%, assuming a 33% federal tax bracket.

"Uncertainties about the economy and credit concerns have weighed on bonds, lowering prices and raising yields. Hedge funds have also dumped muni bonds in an attempt to cover trading strategies gone sour.

Continue reading In the Vanguard: Get more yield from munis

In the Vanguard: Get more yield from munis originally appeared on BloggingStocks on Mon, 24 Mar 2008 12:37:00 EST. Please see our terms for use of feeds.

Even if copper prices were to move much lower, Freeport-McMoRan Copper & Gold (NYSE:FCX) still "appears cheap" according to Richard Moroney.

In fact, he includes the stock on his Focus Buy List, which represents the strongest buy rating issued by his newsletter, Dow Theory Forecast.

The company has completed its $25.9 billion acquisition of Phelps Dodge and the advisor feels the move made operational sense, noting it's provided Freeport with a geographically diverse asset base while also lessening its dependence on a potentially volatile political situation in Indonesia, which is the site of its huge Grasberg mine.

He explains, "The combined company should have sufficient resources to fund capital expansion while also paying off debt. To fund the acquisition, Freeport is issuing $16 billion in bonds, at least $1 billion in preferred stock convertible to common shares, and at least $2.1 billion in common shares."

Meanwhile, he observes, among the five Wall Street analysts that have adjusted for the merger, the average per-share profit estimate is $8.11 for 2007 and $8.52 for 2008.

He does caution that earnings are tied to metals prices. In fact, he says, "By one estimation, a change of $0.10 per pound in copper prices would spark a rise or fall of $0.75 in per-share earnings."

Nevertheless, while rising copper prices have supported the stock in recent trading, he concludes, "Freeport appears cheap even based on consensus expectations of much lower copper prices."

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free website, TheStockAdvisors.com.

Focus on Freeport originally appeared on BloggingStocks on Fri, 23 Mar 2007 10:25:00 EST. Please see our terms for use of feeds.

"At Walt Disney(NYSE: DIS), the magic is in the earnings," says Richard Moroney, editor of Dow Theory Forecasts (subscription only). Incidentally, Dow Theory, is a "blue chip" in its own right; the newsletter has been published for over 50 years, making it among the longest-running and most successful in the industry.

Meanwhile, Disney's blue chip status spreads across all sectors of the entertainment industry, a reach that Moroney says, "allows it to leverage the content from its ubiquitous brands-- such as Disney, ABC, and ESPN - across multiples mediums."

A standout among its operations this year has been its films, such as Chronicles of Narnia, Cars, and Pirates of the Caribbean: Dead Man's Chest. Overall, he notes, profits of studio entertainment more than tripled, with Pirates alone generating over $1 billion in global box office revenue.

Continue reading Magic at Disney

Magic at Disney originally appeared on BloggingStocks on Fri, 24 Nov 2006 11:32:00 EST. Please see our terms for use of feeds.