27
Aug/11
Invest 2012: Best Energy Companies to invest in
by admin under best gold stock for 2012, best shares to invest in 2012, best silver stocks to buy 2012, best stocks to buy now for 2012, best stocks to hold 2012, best stocks to invest, Best stocks to invest in 2011, Best stocks to invest right now, best stocks to pick up, best way to invest in 2012, best-penny-stocks, Chinese stocks to invest in 2012
Invest 2012: Best Energy Companies to invest in
Best Energy El Paso Pipeline Partners, L.P. (EPB)
El Paso Pipeline Partners are a growth-oriented Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines, storage and other midstream assets. Their initial assets consist of Wyoming Interstate Company, Ltd., or WIC, a wholly-owned interstate pipelinetransportation business primarily located in Wyoming and Colorado and ten percent general partner interests in two interstate pipeline transportation businesses: Colorado Interstate Gas Company, or CIG, which is located in the U.S. Rocky Mountains, and Southern Natural Gas Company, or SNG, which is located in the southeastern United States.
Best Energy Companies to invest 2012: Dresser-Rand Group Inc. (DRC)
Dresser-Rand Group is among the largest global suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical and process industries. Their services and products are used for a wide range of applications, including oil and gas production, high-pressure field injection and enhanced oil recovery, pipelines, refinery processes, natural gas processing, and petrochemical production.
Best Energy Companies to invest 2012: Delta Natural Gas Co. Inc. (DGAS)
Delta Natural Gas Company, Inc. is a regulated public utility. As a result of acquisitions and expansions of its customer base within its existing service areas, Delta provides retail gas distribution service to customers in central and southeastern Kentucky and, additionally, provides transportation service to industrial customers and interconnected pipelines located in the area.
Best Energy Companies to invest 2012: Linn Energy, LLC (LINE)
Linn Energy, LLC is an independent oil and gas company focused on the development and acquisition of long-lived properties which complement its asset profile in producing basins within the United States. Its goal is to provide stability and growth in distributions to our unitholders through a combination of continued successful drilling and acquisitions.
The best stocks to invest in 2011
19
Apr/11
The best stocks to invest in 2011
by admin under best stocks to invest, hot-stocks, investments
Despite the market’s recent resuscitation, many stocks are still trading at fire-sale prices-no surprise given the immense decline that preceded the advance. But which stocks to invest in 2011?
Between March 9 and May 4, Standard & Poor’s 500-stock index surged 34%. Beaten-down “value” stocks and stocks of smaller companies have been the best performers during the recovery. Examples of revived value stocks are Citigroup (symbol C), which tripled from an intra-day low of 99 cents on March 9 to $3.20 at the May 4 close, and Bank of America (BAC), which skyrocketed from $3 to $10.38. Meanwhile, Morningstar’s small-company-value index rose 22% in April, and its large-company-growth index gained just 8%.
I’m not jumping on the bandwagon. Given the fragility of the markets, the financial system and the economy, I don’t think stocks of small companies or companies with huge problems are the ones to buy. Instead, I think you should put most of your money into the highest-quality blue chips (companies with little or no debt and the ability to generate a lot of cash).
If you’re looking for ideas, Morningstar StockInvestor ($119 annually) is a great resource. According to the authoritative Hulbert Financial Digest, the newsletter’s stock picks returned an annualized 2.6% from the end of 1999 through last February, a period in which the broad-based Dow Jones Wilshire 5000 stock index lost an annualized 5.0%. What’s more, the Morningstar letter is less risky than the index and tends to do little trading; on average, the letter holds stocks for about three years.
Editor Paul Larson says he looks for companies with competitive advantages over their rivals: “My strategy is fairly simple. I focus on high-quality companies, and I buy them when they’re cheap.”
Morningstar’s 100-plus stock analysts estimate “intrinsic value” for every company they cover. They compare intrinsic value to a company’s share price to arrive at a star rating. Larson then draws up two lists — a “tortoise” portfolio and a “hare” portfolio-consisting of about 25 highly rated stocks each.
Larson’s favorite is Warren Buffett’s Berkshire Hathaway (BRK.B)(best stocks to invest in 2011). At $3,114.90 a share on May 4, the stock has shed more than one-third of its value in the past year. But Larson believes that Berkshire’s collection of more than 70 businesses, dominated by insurance, is dirt-cheap. Says Larson: “For a long time, people have been pricing Berkshire as though Buffett were no longer around. But he’s still alive and kicking-and adding value. And the balance sheet is still one of the strongest around, even though the company no longer carries a triple-A debt rating.”
The world’s largest and most diverse health-care company, best stocks to invest in 2011 -Johnson & Johnson (JNJ), is another favorite. Larson says that the company is largely insulated from economic downturns. “People need to take their medicines regardless of what the economy is doing,” he says. J&J is well-managed, has little debt and generates a staggering $1 billion in free cash flow per month (free cash flow is the money left after a company makes the capital expenditures needed to maintain the business). The stock closed at $53.76 on May 4.
Defense giant best stocks to invest in 2011- General Dynamics (GD) is another company that’s built to withstand recessions. It builds ships and armored vehicles, as well as information-technology systems for the military. “The government has a vested interest in maintaining the health of this company,” Larson says. “It came through the Defense Department budget cuts relatively unscathed.” The company boasts a rock-solid balance sheet. The stock closed at $54.00.
Wal-Mart Stores (WMT), the world’s largest retailer, has increased its market share during the economic slump. Its sales of consumer staples at discount prices have been increasing as other retailers have been going out of business. The company’s managers are focusing on cutting costs and satisfying customers. Wal-Mart, one of only two stocks in the Dow industrials to climb last year, closed at $50.84.
As employee benefits grow ever more complex, The best stocks to invest in 2011-Automatic Data Processing (ADP) benefits. It provides such services as payroll processing and benefits administration. Its large scale and respected brand, and the high cost of switching to another vendor, give it a big competitive advantage. The share price: $34.86.
When competitors were spending enormous sums to build up oil-and-gas reserves during last year’s bubble in oil prices, ExxonMobil (XOM) stayed focused on increasing profit margins. Because of that, Exxon can continue to buy back shares, raise its dividend and increase capital spending (at a price of $68.20, the stock yields 2.5%). It’s the world largest integrated oil-and-gas company, and participates in almost every facet of the business.
Apr/11
The best stocks to invest in 2011
by admin under best stocks to invest, hot-stocks, investments
Despite the market’s recent resuscitation, many stocks are still trading at fire-sale prices-no surprise given the immense decline that preceded the advance. But which stocks to invest in 2011?
Between March 9 and May 4, Standard & Poor’s 500-stock index surged 34%. Beaten-down “value” stocks and stocks of smaller companies have been the best performers during the recovery. Examples of revived value stocks are Citigroup (symbol C), which tripled from an intra-day low of 99 cents on March 9 to $3.20 at the May 4 close, and Bank of America (BAC), which skyrocketed from $3 to $10.38. Meanwhile, Morningstar’s small-company-value index rose 22% in April, and its large-company-growth index gained just 8%.
I’m not jumping on the bandwagon. Given the fragility of the markets, the financial system and the economy, I don’t think stocks of small companies or companies with huge problems are the ones to buy. Instead, I think you should put most of your money into the highest-quality blue chips (companies with little or no debt and the ability to generate a lot of cash).
If you’re looking for ideas, Morningstar StockInvestor ($119 annually) is a great resource. According to the authoritative Hulbert Financial Digest, the newsletter’s stock picks returned an annualized 2.6% from the end of 1999 through last February, a period in which the broad-based Dow Jones Wilshire 5000 stock index lost an annualized 5.0%. What’s more, the Morningstar letter is less risky than the index and tends to do little trading; on average, the letter holds stocks for about three years.
Editor Paul Larson says he looks for companies with competitive advantages over their rivals: “My strategy is fairly simple. I focus on high-quality companies, and I buy them when they’re cheap.”
Morningstar’s 100-plus stock analysts estimate “intrinsic value” for every company they cover. They compare intrinsic value to a company’s share price to arrive at a star rating. Larson then draws up two lists — a “tortoise” portfolio and a “hare” portfolio-consisting of about 25 highly rated stocks each.
Larson’s favorite is Warren Buffett’s Berkshire Hathaway (BRK.B)(best stocks to invest in 2011). At $3,114.90 a share on May 4, the stock has shed more than one-third of its value in the past year. But Larson believes that Berkshire’s collection of more than 70 businesses, dominated by insurance, is dirt-cheap. Says Larson: “For a long time, people have been pricing Berkshire as though Buffett were no longer around. But he’s still alive and kicking-and adding value. And the balance sheet is still one of the strongest around, even though the company no longer carries a triple-A debt rating.”
The world’s largest and most diverse health-care company, best stocks to invest in 2011 -Johnson & Johnson (JNJ), is another favorite. Larson says that the company is largely insulated from economic downturns. “People need to take their medicines regardless of what the economy is doing,” he says. J&J is well-managed, has little debt and generates a staggering $1 billion in free cash flow per month (free cash flow is the money left after a company makes the capital expenditures needed to maintain the business). The stock closed at $53.76 on May 4.
Defense giant best stocks to invest in 2011- General Dynamics (GD) is another company that’s built to withstand recessions. It builds ships and armored vehicles, as well as information-technology systems for the military. “The government has a vested interest in maintaining the health of this company,” Larson says. “It came through the Defense Department budget cuts relatively unscathed.” The company boasts a rock-solid balance sheet. The stock closed at $54.00.
Wal-Mart Stores (WMT), the world’s largest retailer, has increased its market share during the economic slump. Its sales of consumer staples at discount prices have been increasing as other retailers have been going out of business. The company’s managers are focusing on cutting costs and satisfying customers. Wal-Mart, one of only two stocks in the Dow industrials to climb last year, closed at $50.84.
As employee benefits grow ever more complex, The best stocks to invest in 2011-Automatic Data Processing (ADP) benefits. It provides such services as payroll processing and benefits administration. Its large scale and respected brand, and the high cost of switching to another vendor, give it a big competitive advantage. The share price: $34.86.
When competitors were spending enormous sums to build up oil-and-gas reserves during last year’s bubble in oil prices, ExxonMobil (XOM) stayed focused on increasing profit margins. Because of that, Exxon can continue to buy back shares, raise its dividend and increase capital spending (at a price of $68.20, the stock yields 2.5%). It’s the world largest integrated oil-and-gas company, and participates in almost every facet of the business.
Markets Need to Get Off the Juice
In recent weeks, I’ve been focusing all my efforts on large- and mid-cap stocks, especially those with strong balance sheets and consistent free cash flow. Many of these rock-solid companies offer a degree of stability in this choppy market and are currently trading at outstandingly cheap values. In effect, they allow you to play offense while being defensive.
On the flip side, small- and micro-cap stocks are far less resilient. As investors continue their “flight to quality,” these stocks are being deeply shunned. Until we have a clear sense of the potential duration and depth of a possible looming recession, investors will keep selling off smaller company stocks.
But there’s a curious twist to this oft-repeated cycle. When the recession finally arrives (which is still not a given), small stocks tend to actually outperform. We’re now cycling through the 20-year anniversary of just such a move, and you need to watch for signs of another breakout.
Back in 1990, the U.S. economy was quickly losing steam when gross domestic product (GDP) growth fell from a robust 4.2% in the first quarter to -3.5% in the fourth quarter. This should have spooked small-cap investors. Instead, they started to buying aggressively, anticipating the eventual economic rebound.
The Russell 2000 Index of small-cap stocks bottomed out at the end of the third quarter of 1990 at 119, but it would hit 144 by year-end (even though the economy slumped badly that quarter), and would hit 178 by the following May. That’s a 50% gain in just seven months, even though the economic data painted a bleak picture. (The index went up to about 200 by the end of 1991, even though GDP growth didn’t prove to be robust until the first quarter of 1992.)
The key takeaway: small caps represent great buying opportunities, even when the economy looks scary, so it pays to keep a watch list prepared. Here are three small-cap stocks that could double or even triple in value when the Russell 2000 finally rebounds. It may take a few years for this to fully play out, but the upward move may come sooner than you think.
1. Power One (Nasdaq: PWER)
This is a solid company stuck in a tough industry. Power One makes a range of power conversion and power-management components. The company has had notable recent success with inverters that help solar panels and wind turbines convert their variable power generation into energy flow that is suitable to feed into electricity grids. This has proved to be a choppy business, because the renewable fuels industry has seen major peaks and valleys. Still, Power One is taking market share from rivals, maintaining sales levels while rivals see sharp drops.
Power One is likely to post flat sales this year of $1 billion. Earnings per share (EPS) are expected to fall about 20% to around $0.90 this year. Growth is likely to resume in 2012 at a moderate double-digit pace as stalled power projects finally come to fruition. Meanwhile, shares trade for just five times trailing earnings. As business moves back up onto a growth trajectory, look for the multiple to move up into the low teens, implying at least a double for this beaten-down name.
2. Exide Technologies (Nasdaq: XIDE)
In keeping with the energy/power theme, this auto battery maker has been too sharply discounted. (I recently suggested Exide could be part of a paired trade strategy.) The company had seen profits slump as lead prices surged. Lead is Exide’s biggest raw material expense.
The company belatedly pushed through price increases for its batteries, which should help profits rebound. As a further tailwind, lead prices are finally in retreat. They peaked above $1.30 a pound in the spring, and are now $1.05. As those factors finally hit the income statement, look for much better quarterly results. In a stable pricing environment, Exide’s annual operating income could hit $200 million, which is more than half of the stock’s current market value. Simply applying a multiple of five on normalized operating income would make this stock triple.
3. KIT Digital (Nasdaq: KITD)
This is a very promising — and hugely frustrating — company. KIT has built an impressive suite of products to help companies develop sophisticated video services on a wide range of platforms. Thanks to an acquisition spree, the company now has a broad set of tools to offer, which is fueling 100% sales growth this year and projected 40% sales growth (to $300 million) in 2012. To pay for these deals, the company has raised fresh capital several times. The number of shares outstanding keeps rising — from 7 million in 2009 to a recent 33 million — and shares take a big hit every time another capital raise is announced.
Management is expected to finally stop issuing fresh equity, which should enable investors to focus on the attractive core business. Recent major contract wins with John Malone’s Liberty Global and Korea’s LG should help KIT to post very solid growth metrics in coming quarters. This sub-$10 stock could move north of $20 when quarterly results are more robust and investors finally can trust that no more capital raises will be needed. A $20 target price implies a target 2012 EBITDA (earnings before interest, debt, depreciation and amortization) multiple of just 10, which is quite reasonable for a high-growth stock like this.
On the flip side, small- and micro-cap stocks are far less resilient. As investors continue their “flight to quality,” these stocks are being deeply shunned. Until we have a clear sense of the potential duration and depth of a possible looming recession, investors will keep selling off smaller company stocks.
But there’s a curious twist to this oft-repeated cycle. When the recession finally arrives (which is still not a given), small stocks tend to actually outperform. We’re now cycling through the 20-year anniversary of just such a move, and you need to watch for signs of another breakout.
Back in 1990, the U.S. economy was quickly losing steam when gross domestic product (GDP) growth fell from a robust 4.2% in the first quarter to -3.5% in the fourth quarter. This should have spooked small-cap investors. Instead, they started to buying aggressively, anticipating the eventual economic rebound.
The Russell 2000 Index of small-cap stocks bottomed out at the end of the third quarter of 1990 at 119, but it would hit 144 by year-end (even though the economy slumped badly that quarter), and would hit 178 by the following May. That’s a 50% gain in just seven months, even though the economic data painted a bleak picture. (The index went up to about 200 by the end of 1991, even though GDP growth didn’t prove to be robust until the first quarter of 1992.)
The key takeaway: small caps represent great buying opportunities, even when the economy looks scary, so it pays to keep a watch list prepared. Here are three small-cap stocks that could double or even triple in value when the Russell 2000 finally rebounds. It may take a few years for this to fully play out, but the upward move may come sooner than you think.
1. Power One (Nasdaq: PWER)
This is a solid company stuck in a tough industry. Power One makes a range of power conversion and power-management components. The company has had notable recent success with inverters that help solar panels and wind turbines convert their variable power generation into energy flow that is suitable to feed into electricity grids. This has proved to be a choppy business, because the renewable fuels industry has seen major peaks and valleys. Still, Power One is taking market share from rivals, maintaining sales levels while rivals see sharp drops.
Power One is likely to post flat sales this year of $1 billion. Earnings per share (EPS) are expected to fall about 20% to around $0.90 this year. Growth is likely to resume in 2012 at a moderate double-digit pace as stalled power projects finally come to fruition. Meanwhile, shares trade for just five times trailing earnings. As business moves back up onto a growth trajectory, look for the multiple to move up into the low teens, implying at least a double for this beaten-down name.
2. Exide Technologies (Nasdaq: XIDE)
In keeping with the energy/power theme, this auto battery maker has been too sharply discounted. (I recently suggested Exide could be part of a paired trade strategy.) The company had seen profits slump as lead prices surged. Lead is Exide’s biggest raw material expense.
The company belatedly pushed through price increases for its batteries, which should help profits rebound. As a further tailwind, lead prices are finally in retreat. They peaked above $1.30 a pound in the spring, and are now $1.05. As those factors finally hit the income statement, look for much better quarterly results. In a stable pricing environment, Exide’s annual operating income could hit $200 million, which is more than half of the stock’s current market value. Simply applying a multiple of five on normalized operating income would make this stock triple.
3. KIT Digital (Nasdaq: KITD)
This is a very promising — and hugely frustrating — company. KIT has built an impressive suite of products to help companies develop sophisticated video services on a wide range of platforms. Thanks to an acquisition spree, the company now has a broad set of tools to offer, which is fueling 100% sales growth this year and projected 40% sales growth (to $300 million) in 2012. To pay for these deals, the company has raised fresh capital several times. The number of shares outstanding keeps rising — from 7 million in 2009 to a recent 33 million — and shares take a big hit every time another capital raise is announced.
Management is expected to finally stop issuing fresh equity, which should enable investors to focus on the attractive core business. Recent major contract wins with John Malone’s Liberty Global and Korea’s LG should help KIT to post very solid growth metrics in coming quarters. This sub-$10 stock could move north of $20 when quarterly results are more robust and investors finally can trust that no more capital raises will be needed. A $20 target price implies a target 2012 EBITDA (earnings before interest, debt, depreciation and amortization) multiple of just 10, which is quite reasonable for a high-growth stock like this.
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