Tag Archives: DEO

Top 5 Value Stocks To Watch For 2019

A recent article by Pomona College finance professor Gary Smith has me thinking about stocks to buy over $200.

Smith’s opinion piece appeared on MarketWatch July 2; using three valuation models to make his case, he argued why Apple (NASDAQ:AAPL) is still a buy at $200.

Admittedly, AAPL is not quite there yet, trading around $187 as a write this, but close enough.

A well-written and mathematically sound valuation of Apple stock, Smith concluded that if you buy at $200 and hold for ten years time, you’ll be happy you did.

I’m not suggesting for a minute that buying stocks trading over $200 are the key to your financial future, but they are often this high because of strong economic underpinnings.

Take Amazon (NASDAQ:AMZN), for example.

It crossed $200 in March 2012. If you’d bought 100 shares back then, today you’d have an annualized total return of 41% in the six-and-a-quarter years since and, more importantly, a profit of $151,257.

Out of all of the S&P 500 stocks, 52 trade at $200 or more. Here are my seven stocks — one from seven different sectors —  to buy over $200.

Top 5 Value Stocks To Watch For 2019: Sherwin-Williams Company (SHW)

Sherwin-Williams (NYSE:SHW) is my pick from the basic materials sector. Down 0.40% year-to-date, it has some work to do if it wants to finish 2018 up double digits, something it has done five times in the past decade.

The global paint business was recently in the news, but not in a good way. Three people, including an analyst with S&P Global were charged with insider trading related to its 2016 purchase of Valspar. It seems the analyst allegedly tipped off two friends of the impending announcement netting them $300,000 on Valspar stock.

While that’s not Sherwin-Williams’ fault, it’s never good to have your company associated with this kind of profiteering.

The company’s Q1 2018 results paint a picture of a very strong global paint and coatings business that saw revenues grow 6.9% during the quarter to $4.0 billion generating $2.89-per-share in profits with expectations in fiscal 2018 of a minimum $16.05-per-share in earnings.

In the case of Sherwin-Williams combining with Valspar, one plus one equals three.

Top 5 Value Stocks To Watch For 2019: Diageo plc(DEO)

Do you like booze? Enjoy knocking back a few from time to time? Then hop on board Diageo (NYSE:DEO). We know for a fact there will always be some baseline demand for alcohol. No matter how healthy people claim they want to be, they will always give in to alcohol.

You know many of Diageo’s brands, including Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

Why is alcohol a smart investment? Because it is a social product. When people get together, if one person buys, others tend to buy also. Marketing for alcohol centers around creating an experience, and creating and perpetuating social circles. In general, it is a good play because human social behavior is often centered around the consumption of alcohol.

DEO stock is being pushed higher thanks to increased efforts in flavored alcohols. The company is consistent and reliable, and pumps out more than $3 billion annually in free cash flow, returning about half of that to shareholders in the form of its 2.4% yield.

Top 5 Value Stocks To Watch For 2019: United Natural Foods, Inc.(UNFI)

United Natural Foods sells organic, natural and specialty foods to groceries in the U.S. Of course, the company, which sells a significant amount of products to Whole Foods, will benefit if that chain becomes much more popular.

Like Sprouts, United Natural Foods should be boosted by food inflation and by increased demand for healthier food. It’s looking to further exploit the latter trend by increasing its exposure to fresh food and growing its e-commerce business, the company said on its fiscal third quarter results conference call on June 6.

Importantly, United Natural Foods also reported that it’s outpacing the growth of the organic foods sector. Indeed, the company’s net sales jumped 12% year-over-year in the third quarter, while its net operating income soared 42% versus the same period a year earlier.

Despite the impressive growth, United Natural Foods stock has an anemic valuation. United Natural Foods stock is trading at a forward price-to-earnings ratio of just 12, and its price-to-sales ratio is a tiny 0.22.

After the company reported its third-quarter results, multiple analysts complained about its margins. Last quarter, its gross margin came in at 15.4%.

I believe that, going forward, a combination of higher food inflation, supply chain improvements, and greater scale will meaningfully boost United Natural’s margins. Meanwhile, as Wall Street becomes much more enthusiastic about the organic food category, the multiples of UNFI stock should rise significantly.

Top 5 Value Stocks To Watch For 2019: Boeing Company (BA)

Boeing (NYSE:BA) is my pick from the Industrial Goods sector. Up 15% YTD compared to 4% for its aerospace and defense peers, it has managed to deliver an annualized total return of 17% over the past 15 years, 210 basis points greater than its peers.

On July 2, the Brazilian news media reported that Boeing and Embraer (NYSE:ERJ) would submit the contracts bringing Embraer’s commercial aviation division together with Boeing’s commercial aviation business to the Brazilian government for its blessing.

Upon approval and completion, Boeing would control the operation, one that should compete more effectively against the Airbus (OTCMKTS:EADSY), Bombardier (OTCMKTS:BDRBF) tie-up with the C-Series jet.

The year is going well for Boeing despite the China tariff headwinds threatening its most significant growth market — Boeing will sell $1 trillion of its planes to China over the next 20 years — and bringing Embraer under its fold puts a cherry on top of the sundae.

There might be some turbulence for Boeing stock over the next 12 months; I would take any retreat of its stock price as an opportunity to buy at a better price.

Boeing’s currently operating at maximum efficiency and should be able to keep it up despite the storm clouds in China.

Best Tech Stocks To Invest In Right Now

Oil prices are on fire, recently hitting a three-and-a-half-year high. More upside could be on the way. However, despite this rebound, many oil stocks have been ice-cold, with several surprisingly having sold off to such an extent that they’re currently trading at levels not seen in years. That makes them compelling options for your portfolio this month.

Best Tech Stocks To Invest In Right Now: Analog Devices, Inc.(ADI)

This stock could very well benefit from an increase in information technology (IT) spending. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal processing integrated circuits (ICs) for use in industrial, automotive, consumer and communication markets worldwide. It offers signal processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

Last year the company introduced a highly integrated polyphase analog front end with power quality analysis designed to help extend the health and life of industrial equipment while saving developers significant time and cost over custom solutions. Achieving extremely accurate, high-performance power quality monitoring typically requires customized development, which can be expensive and time-consuming.

The analysts believe that the Linear Technology acquisition, which closed earlier this year, is a huge positive. In addition, many on Wall Street expect that corporate management ultimately will exceed its $150 million of targeted synergies.

Analog Devices investors are paid a solid 2.14% dividend. The Merrill Lynch price target for the stock is $110. The Wall Street consensus price target was last seen at $103.14. The stock closed Friday’s trading at $89.76 per share.

Best Tech Stocks To Invest In Right Now: United Parcel Service Inc.(UPS)

Shares of this package delivery service have plunged around 30% from their January 2018 highs. The February market plunge resulted in a steep gap, exasperating an already dire situation.

 

Currently, shares are building a base in the $105.00 zone, setting up an ideal technical buy opportunity. Let’s take a closer look.

 

Fundamentals supporting the bullish call include the dividend increase of 10% in February. The company has increased dividends every year since 1969, and they have quadrupled since 1999. UPS boasts a healthy cash flow to support the ever-growing payout to investors.

CEO David Abney stated, "Dividends remain a high priority at UPS. Our strong cash flow from operations has enabled us to pay a stable or growing dividend for nearly 50 years."

Next, the company has been knocked lower due to a perceived Amazon threat; however, it still boasts the top margins in the industry. Also, it has posted a compound annual growth rate (CAGR) of over 7% for the last 10 years.

I firmly believe that the Amazon threat is way overblown, and UPS will return to its yearly highs over time.

Best Tech Stocks To Invest In Right Now: Diageo plc(DEO)

One of the world’s largest distillers, Diageo is the leading maker of Scotch whisky, which represents more than a quarter of Diageo’s $15.6 billion in annual sales. The top-selling Johnnie Walker brand has been most responsible for Diageo’s growth, but previously it was helped by vodka sales from brands like Smirnoff, Ciroc, and Ketel One. Vodka, though, has fallen in recent years, and today represents 11% of Diageo’s sales.

Because the "browns" of the spirits world — whiskey, bourbon, rye — are the hot drinks of the moment, particularly among women, Diageo has been able to ride that wave higher. It recently launched a "Jane Walker" label to capitalize on this trend. Recent studies suggest that women not only drink as much alcohol as men do, but also that younger women may possibly be consuming even more.

At 22 times trailing earnings and 19 times next year’s estimates, Diageo is being discounted by the market compared to other distillers, despite its premier position in the industry. Almost all its brands can be found in the top spot or second place in markets around the globe. Other well-known brands it owns include Crown Royal whisky and Captain Morgan rum.

Its dividend of $3.46 per share currently yields a solid 2.4% annually, and with analysts expecting earnings to grow 12% this year, Diageo should be able to continue delivering sales, earnings, and dividend growth for years. That’s a retirement portfolio mix worth toasting.

Best Tech Stocks To Invest In Right Now: Wynn Resorts, Limited(WYNN)

This embattled casino giant looks like it could be headed for more big changes on top after Elaine Wynn recently demanded that Wynn Resorts move quickly to restructure its board. Wynn Resorts has also seen its stock price pop 3.51% over the last month as investors react more to the business than to its former CEO’s scandal. Looking ahead to the first quarter, Wynn Resorts is expected to see its revenues climb by 14% to $1.68 billion.

Investors might be even more pleased to note that the company’s earnings are projected to reach $1.92 per share, which would mark a 54.8% expansion from the year-ago period. Wynn Resorts has also experienced positive earnings estimate revision activity recently. Lastly, WYNN is currently a Zacks Rank #3 (Hold) and holds an Earnings ESP of 0.35%, with its Most Accurate Estimate coming in 1 cent above our current consensus estimate. Therefore, WYNN is a stock that could be ready to top Q1 earnings estimates. The casino company is also expected to report its Q1 financial results on Tuesday.

Best Tech Stocks To Invest In Right Now: Intuitive Surgical Inc.(ISRG)

So you want market-crushing returns and groundbreaking innovation. Cryptocurrencies might fit that bill, but at the cost of enormous risk. As an alternative, I would suggest robotic-surgery specialist Intuitive Surgical — lots of innovation, plenty of proven success, and much lower risk levels than your favorite crypto-coin.

The maker of da Vinci surgery systems has seen its share prices rising a market-beating 380% in the last 10 years, including a 72% surge over the last 52 weeks alone. Those gains have materialized in lockstep with similar improvements to the company’s revenues and earnings, so the stock gains are based on rock-solid business results.

Intuitive Surgical currently is running over some speed bumps in its quest for international sales growth, but the all-important domestic market makes up for that issue with healthy growth and strong long-term prospects. The robotic-surgery field has seen an influx of new system builders in recent years, but even those erstwhile rivals often say that they just don’t want to compete head-to-head with Intuitive Surgical.

The company grabbed a huge first-mover advantage many years ago, wrapped it in kevlar-class patent protection, and built up an installed user base that’s nearly immune to usurpers for the foreseeable future. Hospitals are unlikely to kick out their multimillion-dollar da Vinci robots, even if a better solution suddenly appears.