Tag Archives: TXN

Top 5 Value Stocks To Watch Right Now

 Warren Buffett is so good at picking winning businesses that he grew Berkshire Hathaway’s book value by more than 19.1% annually between 1965 and 2017. That astounding track record easily qualifies him as the greatest investor of all time.

So which of Buffett’s stocks do we Fools think are great buys right now? We asked a team of Motley Fool investors to weigh in and they picked the following stocks:

Top 5 Value Stocks To Watch Right Now: Clarke(T)

AT&T Inc. (NYSE:T) delivered decent, if not outstanding, earnings the other day. Investors sold the stock off. AT&T stock is trading at $31.54. Along with a yield that now exceeds 6%, I think we are going to see income investors and bottom fishers step in here.

More to the point, the antitrust trial regarding AT&T’s merger with Time Warner Inc (NYSE:TWX) is over. By all accounts, including my own, AT&T probably crushed the DOJ in the trial. The judge will rule on the case by June 12, and I believe the merger will go through. With that, AT&T will transform into a completely different company and become a great member of the growth stocks community. As a result, this combined entity will be a media and advertising powerhouse.

Even if the merger is not approved, not only T but also TWX remain excellent media companies. You can buy either entity here for growth for your portfolio.

Top 5 Value Stocks To Watch Right Now: Southern Company (SO)

Southern Co (NYSE:SO) announced a 3% raise to its quarterly dividend, increasing it from 58 cents per share to 60 cents. Shareholders of record as of May 21 will receive their higher dividends from the regulated electric and gas utility on June 6  Therefore, SO shares will be ex-dividend on May 18.
SO Dividend Yield: 5.28%

Top 5 Value Stocks To Watch Right Now: Grupo Aeroportuario Del Pacifico, S.A. de C.V.(PAC)

In fact, foreshadowing again — spoiler alert — this is the one stock that has underperformed the market. It’s still up 9%, but Grupo Aeroportuario del Pacifico — or PAC is the ticker symbol — the company that is the leading operator of airports in Mexico was at $100 a share a year ago. It’s up to $109 today. So, simple math is a 9% gain.

And so, against the S&P 500 of +15%, that’s a -6%. So, this one’s in the loss column. I don’t have a lot to say about PAC other than this is a stock that we’ll continue to recommend. It’s a very hard business to compete with. They basically operate these airports with a contract with the government, and they get to run all the concessions and the mall within the airport. That’s all part of this business.

I like the stock a lot and it’s recovered pretty well since diving right after President Trump was elected and Mexico fell out of favor for a couple of months. If Mexico were a stock for the long term, I’m a buyer and one way you can participate in Mexico’s growth over the next couple of decades would be through a stock like Grupo Aeroportuario del Pacifico. Again, pronounced by somebody who took French in high school.

Top 5 Value Stocks To Watch Right Now: Concho Resources Inc.(CXO)

RBC Capital’s Scott Hanold wrote “Time to Flex Your Muscles” on our second energy stock pick. Concho Resources Inc (NYSE:CXO) is now poised to become the biggest player in the Permian Basin. Earlier in April, Concho announced a $9.5 billion deal to snap up fellow Permian fracker RSP Permian.

According to Concho, this deal “creates the largest crude oil and natural gas producer from unconventional shale in the Permian Basin.” Specifically, JPMorgan analyst Arun Jayaram is forecasting 23% annual production growth through 2021 and “significant” free cash flow generation. To top it all off: management is modelling for an impressive $2 billion in acquisition synergies. After the deal closes in Q3, these efficiencies should materialize quickly says management.

In his post-announcement report, Hanold tells clients he is impressed by the ‘complimentary’ deal. He notes that “our well data shows RSPP wells are among the most prolific, portending to improving returns.” As a result: “Core activity should generate industry-leading returns, margins, and growth. CXO has a well-established asset base and is one of the largest producers and the most active operator in the Permian Basin. We think this scale provides significant advantages over its peers.”

According to the Street there is still big upside potential of 25% from current prices. This is based on the stock’s average price target of $186. Plus, our data shows that in the last three months, 11 out of 12 analysts have rated the stock a ‘Buy’.

Top 5 Value Stocks To Watch Right Now: Texas Instruments Incorporated(TXN)

Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. It functions as one of the top players in the analog IC and embedded processor fields. The company has also developed into a major IoT pick, reporting year-over-year sales growth of 20% in the unit that handles this business during its most recent quarter.

Meanwhile, the semiconductor firm surpassed revenue estimates and released in-line guidance. This has led to more bullish analyst sentiment and propelled the stock to a Zacks Rank #1 (Strong Buy). The stock also has a Forward P/E of 20.5 and a PEG of 2.1, so investors are getting a decent price for its earnings and earnings growth outlook.

It is also worth noting that TXN offers investors a dividend yield of about 2.3% right now.

Top Blue Chip Stocks For 2019

 Some might ask, why are you investing so prudently now? Most investors say they want to build the biggest nest egg they can to fund the best possible retirement when that time comes. Once that day arrives, then they’ll change their portfolio to focus less on growth and more on income.

The irony is, the stable stocks best suited to reliably fund a retirements are largely the same stocks you should arguably already own leading up to your retirement; consistency is crucial as you chip away at your financial goals.

To that end, here’s a run-down of retirement stocks you should probably already own even before you make working at a job a thing of the past. Separately or collectively, they provide a nice balance of growth and income, as well as a comfortable balance of risk and reward.

In most cases dividend — and dividend growth — is in the cards, yet not necessarily at the expense of capital appreciation as well. You’ll need that too, as inflation can and often does outpace market-wide dividend yields.

Top Blue Chip Stocks For 2019: Netflix, Inc.(NFLX)

Netflix, Inc. (NASDAQ:NFLX) was the star of the show after earnings, surging 9.6% to a new record high, eclipsing its early March levels, thanks to better-than-expected Q1 results, upside guidance and a slew of analyst upgrades. Revenues rose more than 40% from a year ago on the addition of 7.4 million new subscribers globally vs. the addition of just under 5 million last year.

When the company last reported on Jan. 22, earnings of 41-cents-per-share matched estimates on a 33% rise in revenues.

Top Blue Chip Stocks For 2019: Pepsico, Inc.(PEP)

Many investors sifting through the markets looking for perfect dividend stocks for retirees are probably after stable companies with track records of solid dividend growth. If that describes what you’re seeking, look no further than PepsiCo, which has a slew of incredibly powerful brands, and a long history of raising its payouts.

In addition to its namesake Pepsi line, the company has 22 brands that generate over $1 billion apiece in annual revenue, including Gatorade, Mountain Dew, Tropicana, Quaker, Lay’s, Doritos and Cheetos. Currently, PepsiCo dishes out $0.805 per share quarterly for a yield just under 3% — and, incredibly, 2017 marked the company’s 45th consecutive annual dividend increase.

Another factor that should appeal to retirees looking for income stocks is that PepsiCo has a wide competitive moat due to its intangible assets, cost advantages and brand power. Because it has so many billion-dollar brands, it has strong relationships with distributors and retailers. Those brands will continue to bear fruit for Pepsi as the company funnels significant resources into growth with new innovative products and creative advertising, such as its recent partnership with Yankees outfielder Aaron Judge.

There’s no question consumer tastes in the U.S. are trending toward healthier products, and Pepsi understands the challenges it faces on that score. Among its plans, it has set a target of reducing the amount of sodium in 75% of its global foods portfolio to 1.3 mg or less per calorie. But given its strong brands and long history of dividend growth, if Pepsi can adapt to healthier food trend, it should remain a great income stock for retirees.

Top Blue Chip Stocks For 2019: Texas Instruments Incorporated(TXN)

Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. Its Embedded Processors make it a budding Internet of Things play, while its Analog solutions ensure it remains a diversified chip leader. TXN is currently sporting a Zacks Rank #1 (Strong Buy).

The company just posted adjusted earnings of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.11 per share. This has already inspired positive estimate revisions, and the firm’s outlook now looks stronger. EPS growth is now expected to reach 26.4% this fiscal year. Plus, the stock is trading at a reasonable 19x forward 12-month earnings.

Top Blue Chip Stocks For 2019: HubSpot, Inc.(HUBS)

Lewis: All these businesses that we’re going to be talking about today check all these boxes. Why don’t we first start talking about this company HubSpot?

Feroldi: Sure. I have a question for you. When is the last time, Dylan, that you answered a cold call, opened up a letter in the mail, or watched a TV commercial, and you actually changed your buying behavior?

Lewis: I will tell you that I get a cold call every single day. You get those phone calls that, it’s your area code, and some telemarketer or some automated telemarketer is sending you some garbage automated message, and I’ve learned to just block every single one of them. So, never, to answer your question. [laughs] 

Feroldi: And that’s the world that we’re living in today. For decades, the traditional way that companies founded new businesses is, they would advertise with spots on TV and spots on the radio. But consumers really hate to be interrupted. That’s why they use caller ID, to make sure they never pick up a phone call that they don’t recognize. Or, they use DVR to skip TV ads. Or, they put their phone number on Do Not Call lists. These realities are making it harder and harder for companies to shout out their message to their consumers that they want to reach.

In response to that, this company called HubSpot basically is taking the traditional marketing playbook and flipping it on its head. They’re pioneering a strategy that they call inbound marketing. And the idea there is, don’t spend all your time, money and energy shouting at people and interrupting people to get them to learn about your product. Instead, try to create easy-to-use content like blog posts, like videos, so that when people are searching for a product or service like the one you’re offering, that you are easy to find. The idea is to put out blog posts that are helpful, that people will actually want to read naturally when they have a problem, and to essentially get people to come to you when they have a need.

Lewis: So, instead of blasting a message, you’re creating these organic "outreach," because the people are actually coming to you, experiences with potential customers.

Feroldi: Exactly. And think about your own shopping. When you have a problem, and you’re interested in learning about a new product, what’s the first thing that you do?

Lewis: Search it on Google. 

Feroldi: Exactly. You type in the problem to Google, or maybe you go to YouTube and look at a video for how to solve it. That’s exactly what HubSpot does. They offer tools that help companies to grow their social media presence, or to rank highly in search engine optimization, and to really put out free-to-consume content that builds up their brand and helps them to build trust with customers, so that when they are actually ready to buy, they’re already familiar with the company. This has proven to be hugely impactful for getting new customers to come onto the brand.

Lewis: It sounds like a business that rides the tailwinds of e-commerce and digital marketing very well, too.

Feroldi: Absolutely. And HubSpot’s target market is, they’re going after businesses that have between 10 and 2,000 employees, so they’re going after the small companies that don’t traditionally have the huge budgets.

Lewis: So, they’re kind of a fix for resource-poor companies, basically. [laughs] It’s nice to be a one-stop-shop. And that’s actually something we’re going to see with a lot of these businesses we’re going to talk about, is, you have a provider that makes it really simple to do something that you would have an entire department do if you were a larger company.

Feroldi: Absolutely. HubSpot sells using a software-as-a-service or SAAS model. Customers come on and they subscribe, and they can use all kinds of tools to help manage, basically, that filter process that brings new customers into their business. 

And these guys are growing like crazy. They currently have over 41,000 customers that have signed on to their platform, and the average customer spends over $10,000 per year with HubSpot, so that translated into about $375 million in revenue last year. So, these guys are just growing like crazy, and companies everywhere are really signing onto their platform.

Lewis: And that growth comes at a price, and we’ll see that with all these companies we talk about. I think they’re a roughly $4.5 billion company right now. So, you think about that, that’s a little bit more than 10X sales.

Feroldi: Yes.

Lewis: And that’s what you’re going to pay for these very scalable businesses that are growing very quickly.

Feroldi: Absolutely. And these guys are growing like mad, and they’re absolutely in build-out mode. HubSpot only recently became profitable and cash flow positive because they were investing everything that they earned back into the business to scale out their platform. But, I’m personally interested in this business because they are free cash flow positive, so, they’re no longer consuming cash at the rate that they once were. Their co-founders are still highly involved in the business. In fact, they’re the CEO and CTO. Their company culture just gets rave reviews on review sites like glassdoor.com. 

And while they’ve already grown like mad, and investors have already done very well by buying into the company after the IPO, the company thinks that its total addressable market is about $45 billion annually. You compare that to the $375 million that they pulled in last year and the tailwinds that they’re riding, and I think this business can grow very, very quickly for years to come.