Defense spending cutbacks continue to be discussed in the government, but so far this year the share prices of the leading defense firm have moved impressively upward. Lockheed Martin’s (NYSE:LMT) performance has been no exception, and despite top-line challenges, it should be able to grow cash flows, to the benefit of loyal shareholders.
Tupperware (NYSE:TUP) utilized a direct selling model to hawk its kitchen storage and beauty-related products across the globe. This approach is proving very popular in emerging markets, where traditional retail store channels are less developed. Struggles in its more mature markets are being easily offset in faster-growing regions in Asia and South America, and though a recent stock rally leaves less downside protection, the shares still look reasonably valued. (To read more on companies and their stock price, check out Why Do Companies Care About Their Stock Prices?)
Posted: April 27, 2011 9:15AM by Ryan C. Fuhrmann
Predicting the future as a profession is extremely challenging, but it’s a task that equity analysts must face when they head to work every day. Given these difficulties, most find it easiest to rely on guidance directly from the companies they follow, or they huddle close together so that they don’t stick out like a sore thumb if their projections fall dramatically off the mark. (For additional reading, also check out Analyst Forecasts Spell Disaster For Some Stocks.)
Consumer products giant Kimberly-Clark (NYSE:KMB) reported disappointing first quarter earnings results on Monday. The stock fell as a result, but has pushed the stated dividend yield further above the levels that archrivals currently pay.
Posted: April 25, 2011 2:08PM by Ryan C. Fuhrmann
Following the dot-com craze and subsequent Tech Wreck, the venture capital (VC) industry had a rough ten-year stretch where many companies posted annual returns of less than 10%, or well below the levels needed to justify the fact that VC investments have high failure rates, charge what can be hefty management fees, and can take many years to turn a profit. In fact, only 3% of the $2 trillion invested in start-up and early stage companies made it to where a company went public and returned huge returns for VC investors. (Make a career out of chasing down the “next big thing”. Check out Seek An Adventure In Venture Capital.)
Medical device firm Stryker (NYSE:SYK) reported double-digit sales and adjusted earnings growth during its first quarter. If growth levels stay in the double digits, this company may have appeal for investors. In addition, merger and acquisition activity in the industry will be important to illustrate the long-term growth appeal of the medical device space for investors and strategic acquirers alike. Here we delve into the company’s first-quarter results, and its prospects going forward.
Diversified healthcare giant Johnson & Johnson (NYSE:JNJ) reported first-quarter profits on April 19 that beat analyst projections. The stock rallied a bit on the good news and pharmaceutical drug sales came in strong on new product launches. However, product recall costs continue to plague the company and growth trends have been anemic for several years now. Until J & J starts posting more consistent operating trends, a number of rivals look like better investment candidates.
The credit crisis hit the bank industry very hard, but although the public has largely put this financial debacle behind them, many banks are far from recovery. Bank of America’s (NYSE:BAC) book value, or assets minus liabilities, remains below the level it reported in 2004, demonstrating the damage the credit crisis inflicted on its businesses. And, while many of Bank of America’s operating units reported improved performance during the first quarter, it will likely be a long time before the company is able to put its mortgage woes behind it. Let’s take a look at BAC’s Q1 results. <INVESTOPEDIACONTENT>(For background reading, see Top 5 Signs Of A Credit Crisis.)</INVESTOPEDIACONTENT>
By Ryan FuhrmannPublished 04/19/2011 – 07:00
The “Dogs of the Dow ” strategy consists of buying a basket of the cheapest stocks out of the 30 components of the Dow Jones Industrial Average. One of the more popular strategies in recent years has been to buy Dow stocks with the highest dividend yields. But past strategies, including one highlighted by legendary value investor Benjamin Graham, focused on Dow stocks with the lowest earnings multiples.
Auto insurer Progressive Corporation (NYSE:PGR) reported first quarter results on Thursday that were better than expected. The stock isn’t cheap when comparing its price to quarter-end book value, but the company is one of the best managed insurers out there and growth trends could be perking up.
Grocery store and food distributor Supervalu’s (NYSE:SVU) shares surged more than 15% after a better-than-expected fourth quarter earnings release. The company isn’t out of the woods yet though as sales continued to fall and trends at existing stores continue to be negative, but there are encouraging signs that the trends at its vast store base are stabilizing.
By Ryan FuhrmannPublished 04/14/2011 – 01:00
In investing, assets that have performed well in the past have a good chance of continuing to do well in the future. This is especially true when the factors that have driven the outperformance remain in place to drive the future performance.Investment research firm Lipper recently released data detailing the best investments of the past decade. Below is an overview of the top five performers of the past 10 years. As you will see, a couple of recurring factors have driven the stellar results, so I expect them to continue to do so for many more years for a number of these top performers.\
Posted: April 13, 2011 9:09AM by Ryan C. Fuhrmann
In late March, telecommunications giant AT&T announced it would be acquiring T-Mobile to create the largest mobile phone company in the United States. The deal would consolidate the playing field from four to three, and leave Sprint a distant third, behind AT&T and Verizon. As such, there is much speculation that regulators could block the deal for stifling competition and putting too much power in only two firms. (This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions. See Trade Takeover Stocks With Merger Arbitrage.)
Money center bank JPMorgan Chase (NYSE:JPM) reported first-quarter profits Wednesday that came in firmly ahead of analyst projections. However, problems at its mortgage business aren’t going away and will potentially cost the bank billions to resolve. Because it is likely to take the company some time to work through these issues, this could mean a flat stock price for the foreseeable future.
Specialty home furnishings retailer Bed Bath & Beyond (Nasdaq:BBBY) continues to post stellar results since the demise of an arch rival and a small revival in the U.S. economy. Its fourth quarter results came in above market expectations and sent the stock soaring. Unfortunately, at the current valuation, future returns may not be as high for shareholders.
Transaction processor Global Payments (NYSE:GPN) saw strong sales but posted a modest profit drop during its third quarter. It still expects to post solid growth for the full year, and although it will be below its average growth over the past five years, growth prospects remain robust over the long haul.
Zep, Inc. (NYSE:ZEP) bills itself as a leading provider of cleaning products and related chemicals. Its end markets are professional cleaning crews for janitorial/sanitation and automotive markets, just to name a few. The company is still getting used to life on its own, as it was spun off from Acuity Brands (NYSE:AYI) in 2007, and while it is boosting reported sales with acquisitions, it has yet to report steady profit growth from its operations.
Posted: April 5, 2011 11:00AM by Ryan C. Fuhrmann
The recommendation to “buy when there’s blood in the streets” has been attributed to more than one rich businessman, but is a solid approach to creating substantial wealth. Another oft-quoted citation whose true origins are also debated is that the “market can remain irrational longer than you can stay solvent,” and does indicate that buying when there is panic in the air is much easier said than done.
McCormick (NYSE:MKC) is the market leader in selling spices, seasonings and related food flavorings to individuals and businesses across the globe. It reported first-quarter earnings on April 1 that demonstrated it is dealing quite well with rising commodity prices. This comes as no surprise to investors, who have come to count on this company’s ability to leverage modest sales growth into double-digit profit growth.
So far in 2011, technology is among the worst-performing industries in the market. The stock market, as measured by the S&P 500, ended the first quarter up nearly 6%, while tech returned just over 3%. Additionally, the average price-to-earnings (P/E ) ratio for the stock market is around 14, while many leading tech companies trade well below this level — some even trade with single-digit earnings multiples. With weak near-term performance and low valuations, I see a contrarian  buying opportunity.