It looks like the Dow Jones Industrial Average (DJINDICES: ^DJI ) is set to break its run of triple-digit movements -- and take away investors' streak of gains for the week, as well. The blue chip index has turned down by around 25 points as of 2:15 p.m. EDT, with most stocks in the red -- although few Dow members have made big movements on this Friday. It's a nice breather for investors after the volatility of the past few weeks, but expect more of that to come as questions surrounding quantitative easing's inevitable tapering heat up.
The future of stimulus isn't something long-term investors need to worry about, but keeping an eye on stocks is key to maintaining the best portfolio you can. Who's making waves today? Let's catch up on the stories -- and movers -- you need to know about.
Best Blue Chip Stocks To Invest In 2014: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.Advisors' Opinion:
- [By Stephen Quickel]
Can Apple Inc. (AAPL) return to the $700 level? Whether its does or not, I suspect that the stock will be one of the outstanding comeback stories during the year ahead.
Indeed, even if it rebounds to $600 or so, that's a 20% gain. Most investors would settle for that. And chances are it will do much better over time, given Apple's knack for coming up with new products.
Short sellers have cleaned up since they began bum-rapping Apple in late 2012. Three observations are appropriate:
- The short positions, while rising rapidly early in the fall, never amounted to more than a few percent of the outstanding shares at their peak.
- The stock was probably overdue for correction, having zoomed 9-fold since March 2009.
- The consensus of 50-plus Wall Street analysts covering AAPL still calls for 20%-plus a year earnings growth going forward, with a target price of $762.
Apple, in case you hadn't noticed, is selling iPads and iPhones at record levels while its stock has been under attack, in just about every corner of the world.
- [By Scott Rothbort]
Apple(AAPL), which I included on my previous list of low-PEG stocks, remains one of the cheapest stocks around. The stock has still managed to increase in value over 16% this year, despite falling 12% since reaching an all-time high in October.
The iPhone 4S is a huge success. In 2012, the iPhone 5 and iPad 3 are likely to get introduced. The company's computers continue to grab market share away from Windows-based systems. The December quarter is expected to be the company's best ever. Earnings are expected to grow by 25% in 2011 and 12% in 2012. Yet the stock trades at just under 10 times 2012 earnings.
Apple's raw beta is 0.77
Apple shows up on recent lists of 5 Gadget Stocks for the Holidays and 9 Top Goldman Sachs Stocks for 2012.
- [By Kathy Kristof]
Headquarters: Cupertino, Cal.
52-Week High: $701.91
52-Week Low: $362.02
Annual Sales: $108.3 bill.
Projected Earnings Growth: 23% annually over the next five years
Apple led Kiplinger’s list of top stocks back in January 2011, when its share price was a mere $330. And at more than double that price today, Apple shares still appear to be bargain-priced.
The stock has a number of additional catalysts. The company just won a patent suit against arch rival Samsung that is likely to force Apple’s key competitors to revamp their handsets. The verdict couldn’t have come at a more opportune time. Millions of Apple loyalists are ready to upgrade to Apple’s new iPhone, introduced on September 12. Moreover, Apple has barely cracked China’s market, which is likely to generate additional profit growth for years to come.
Of course, Apple can’t maintain an astronomical growth rate forever. But even if the company can simply achieve analysts' expectations for the next three to five years, you’ll want to have the stock in your portfolio for a long time to come.
- [By Jim Jubak]
Not all my picks for 2013 are riding trends. Some, including Apple (AAPL), make their own trends. If Apple's remarkable and maddening stock performance in 2012 demonstrated anything, it was that this stock dances to its own music. Apple shares are capable of climbing when everything else is tumbling and of plunging while the rest of the market is slowly moving ahead.
The stock ended 2012 in deep retreat as sentiment, rather than fundamentals, turned against it. (And sentiment on this baby can quickly go into reverse.) Apple fell from $589 on Nov. 11 to $509 on Dec. 14 -- and that's after a plunge from $702 on Sept. 19 to $526 on Nov. 15.
Investors sold Apple at the end of 2012 on downgrades from Wall Street analysts that cited order reductions to Apple suppliers. But curiously, sellers seem not to have read all the way through these opinions. For example, the analyst at Canaccord Genuity who cut his target price to $750 from $800 (while maintaining a buy rating) wrote that reduced orders to iPhone suppliers could be a result of softer-than-expected sales in international markets or Apple's intention to launch a new iPhone model in June. Other technology analysts,most notably Horace Dediu on Asymco, have argued that Apple is moving to a six-month cycle from a new-model-every-year cycle. This would be a huge change, and I find the argument convincing.
Best Blue Chip Stocks To Invest In 2014: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.Advisors' Opinion:
- [By Stephen]
Philip Morris (PM, $75.92). Cigarette maker has strong free cash flow, pricing power, a yield of roughly 4% plus dividend growth. Share bu ybacks a plus.
Best Stocks To Own Right Now: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.Advisors' Opinion:
- [By Louis Navellier]
IBM (NYSE:IBM) is an international IT company made famous by its line of personal computers and various IT services. A year-to-date gain of 18% shows IBM stock has a lot to offer.
- [By Jim Cramer]
When this company talked about lofty EPS for 2015, initially the street was skeptical especially after IBM reported a blah quarter soon after the expectations were laid out. I now think the company has $20 earnings per share capabilities out three years and that $13 is doable for 2011. You keep the multiple the same and you get a $169 stock. I think it does just that. This one's cheap, way too cheap and it will be cheap next year, too, but on a bigger earnings base which is how it can get to my price target.
- [By Paul]
IBM. Emerging markets are a big growth driver for this computer systems and software provider. Not only that, Resendes says, IBM has "a bullet-proof balance sheet that will allow it to weather the current storm and position it for superior growth and profitability in the long term." He thinks the stock, which recently traded at $93, is worth $120 a share: ''There are some obvious companies that offer much bigger discounts, but you have to incorporate the safety factor. You're getting a premium company here that's a good spot to be in within the tech space."
Best Blue Chip Stocks To Invest In 2014: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.Advisors' Opinion:
- [By Goodwin]
Chevron (CVX-N94.663.183.48%) is the world's second-largest energy company, after fellow Dow component Exxon Mobil (XOM-N73.951.121.54%).
But, analysts favour Chevron's stock, which receives positive reviews from 76 per cent of researchers in coverage. In contrast, Exxon receives positive reviews from 42 per cent of analysts, ranking third-worst in the Dow. Chevron is scheduled to report fourth-quarter results on Jan. 28. Its third-quarter adjusted earnings tally of $1.87 (reflecting 8.7 per cent year-over-year growth) missed the consensus forecast of $2.15 by 13 per cent, sending shares down modestly. The sales figure, at $49-billion, missed by 1.9 per cent. Chevron has integrated global operations and sells at a peer discount.
Its stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 8.9, a book value multiple of 1.8, a sales multiple of 1 and a cash flow multiple of 6.2, 43 per cent, 52 per cent, 58 per cent, 67 per cent and 32 per cent discounts to oil-and-gas industry averages. Based on forward earnings, Chevron is the fourth cheapest Dow stock. It also pays a 72-cent quarterly dividend, translating to a 3.1 per cent dividend yield, seventh highest in the Dow. It has boosted the payout 7.9 per cent a year, on average, over a three-year span and 10 per cent a year, on average, over a five-year span. Chevron has $15-billion of cash, compared to $11-billion of debt.
Bullish Scenario: Macquarie expects Chevron's stock to rise 21 per cent to $114 in 12 months.
Bearish Scenario: JPMorgan, despite rating Chevron “overweight”, has a $90 target.
- [By Hawkinvest]
Chevron Corporation (CVX) is a leading integrated energy company with exposure to oil, natural gas, refining, etc. This could be one of the most undervalued stocks in the market. Chevron pays a dividend that beats many other stock and bond yields, plus it has a below market price to earnings ratio of about 8 times earnings. The average stock in the S&P 500 Index currently trades for over 12 times earnings. If oil prices continue to rise, the already healthy profit estimates for Chevron might be too low. With oil prices showing strength this early in the season, Chevron could be poised to beat earnings in the coming months. However, the stock is trading at the upper end of the recent trading range. Recently, it has been possible to buy this stock at about $102 per share, so waiting for dips could pay off.
Here are some key points for CVX:
Current share price: $104.25
The 52 week range is $85.63 to $110.01
Earnings estimates for 2012: $12.66 per share
Earnings estimates for 2013: $13.20 per share
Annual dividend: $3.42 per share which yields 3.1%
- [By Louis Navellier]
Chevron (NYSE:CVX) provides support to its subsidiaries in the following fields: petroleum operations, chemicals operations, mining operations, power generation and energy services. While many stocks on the NYSE have underperformed in 2011, Chevron stock is up 8% year to date.
Best Blue Chip Stocks To Invest In 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.Advisors' Opinion:
- [By Charles Sizemore]
One of the “big picture” economic themes that I expect to play out over 2011 and beyond is the secular shift to a global cashless society.?Though the process is well on its way in the U.S. and Europe, roughly 40% of all transactions are still made with cash and paper checks according to Barron’s.
This means that even in “boring” developed markets, there is ample room for growth in electronic payments. And there is no better company to benefit from this trend than credit card giant Visa (NYSE: V).