With shares of AT&T (NYSE:T) trading around $34, is T an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementAT&T is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services, and long-distance services. AT&T operates in four segments: Wireless, Wireline, Advertising Solutions, and Other. The communications products offered through AT&T�� segments reach audiences using just about every widely adopted medium: Internet, voice, television, and mobile. As consumers continue to adopt this technology, providers like AT&T stand to see rising profits.
AT&T CEO Randall Stephenson complained about the high cost of smartphone subsidies at an investor conference in New York, saying that the days of wireless carriers subsidizing the price of expensive smartphones will soon be over as smartphone penetration inches closer to 100 percent.���hen you��e growing the business initially, you have to do aggressive device subsidies to get people on the network,��Stephen said, according to a report from CNET. ��ut as you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can�� afford to subsidize devices like that.��/p>
Top 5 Industrial Conglomerate Companies To Invest In 2015: L-3 Communications Holdings Inc. (LLL)
L-3 Communications Holdings, Inc., through its subsidiary, L-3 Communications Corporation, provides command, control, communications, intelligence, surveillance, and reconnaissance (C3ISR) systems; aircraft modernization and maintenance; and government services in the United States and internationally. Its C3ISR segment offers fleet management sustainment and support, such as procurement, systems integration, sensor development, modifications, and periodic depot maintenance for signals intelligence and communications intelligence systems; strategic and tactical signals intelligence systems; secure data links; secure terminal and communication network equipment and encryption management; and communication systems. The company?s Government Services segment provides communication software support, information technology services, and various engineering development services and integration support; engineering and information systems support services; teaching and training; h uman intelligence support services; command and control systems and software services; and technical and management services. Its Aircraft Modernization and Maintenance segment offers modernization and refurbishments, upgrades and sustainment, maintenance, and logistics support services, as well as turnkey aviation life cycle management services for military and various government and commercial customers. The company?s Electronic Systems segment provides components, products, subsystems, systems, and related services across various business areas, including power and control systems, electro-optic/infrared, microwave, simulation and training, precision engagement, warrior systems, security and detection, propulsion systems, avionics and displays, telemetry and advanced technology, undersea warfare, and marine services. L-3 Communications Holdings, Inc. was founded in 1997 and is based in New York, New York.
Advisors' Opinion:- [By Vinay Singh] company provides various security solutions in the United States and internationally.
It has $3.75 per share in cash and enough short-term receivables to take care of its entire long-term debt. Analysts expect $8.34 in EPS for the next fiscal year, and the current stock price is only 9 times that figure, compared to a peer average of 17 times, suggesting L-3 Communications is significantly undervalued.
Impressively, it has similar margins on both EBITDA and operating cash flow in the low double-digits, and its enterprise value implied by the current stock price is only 6.6 times trailing EBITDA. With a free cash flow margin of around 10%, the company should be able to further increase its cash reserve by $14.25 per share next year. **
Also, the company recently raised its quarterly dividend by 10% and authorized the repurchase of as much as $1.5 billion of its stock in a bid to boost shareholder returns. It's no wonder the share count has fallen from 122 million in fiscal 2008 to 94 million at the end of 2012, and considering the management's plans on buybacks, this trend should continue.
Long-term sales growth is where the estimates get tricky. The company faces revenue declines from the winding down of operations in Iraq and Afghanistan, and defense spending cuts due to the rising focus on deficit reduction.
Nevertheless, I expect a steady improvement in free cash flow generation. All told, I think L-3 Communications can grow its free cash flow at a 2-4% rate for the long-term. Discounting that back, it suggests a fair value of about $95.
Raytheon (RTN)
This company also provides various security solutions in the United States and internationally.
It has $12.39 per share in cash and a current ratio of 1.57; the company is liquid. Analysts expect $5.44 in EPS for the next fiscal year, and the current stock price is less than 10 times that figure, compared to a peer average of 17 times, suggesting Raytheon is s
Top 10 US Companies To Watch In Right Now: Devon Energy Corporation(DVN)
Devon Energy Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and production of natural gas and oil in the United States and Canada. It also involves in transporting oil, gas, and natural gas liquids (NGL); and processing natural gas. The company owns oil and gas properties in the mid-continent area of the central and southern United States; the Permian Basin in Texas and New Mexico; the Rocky Mountains area of the United States; and the onshore areas of the Gulf Coast, principally in south Texas and south Louisiana. It also owns oil and gas properties in the provinces of Alberta, British Columbia, and Saskatchewan, Canada. In addition, the company offers marketing and midstream services, including marketing of gas, crude oil, and NGL, as well as constructing and operating pipelines, storage and treating facilities, and natural gas processing plants. As of December 31, 2010, it had 2,042 million barrel of oil equivalent of proved developed reserves. The company sells its gas production to various customers, such as pipelines, utilities, gas marketing firms, industrial users, and local distribution companies; crude oil production to refiners, remarketers, and other companies; and NGL production to customers in petrochemical, refining, and heavy oil blending activities. Devon Energy Corporation was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.
Advisors' Opinion:- [By Paul Ausick]
Shares of Crosstex Energy Inc. (NASDAQ: XTXI) are up more than 60% in the early afternoon on Monday and common units of Crosstex Energy LP (NASDAQ: XTEX) are up more than 35% following the announcement this morning that the two companies are teaming up with Devon Energy Inc. (NYSE: DVN) to form a new midstream master limited partnership and a publicly traded general partner firm. This is welcome news for shareholders in all three companies because the potential payout is likely to be well above what they��e used to.
- [By Matt DiLallo]
Others in the industry are taking a slightly different route as the trend has seen many shifting to higher return oil and NGL projects. Both Chesapeake and SandRidge are on a well-known journey to boost liquids production; however, both used a lot of debt to get there. Devon Energy (NYSE: DVN ) on the other hand has an excellent balance sheet with over $7 billion in cash. It's reduced its debt by 34% since 2003 while also reducing its share count by 20% since 2004. It done this despite still being a heavy natural gas producer which still represents 61% of production. Devon represents what investors now want in a production and�exploration�company as it has a cash rich balance sheet, ample liquids cash flow and solid partners to develop its more prospective acres. �
- [By Paul Ausick]
Stocks on the Move: Crosstex Energy Inc. (NASDAQ: XTXI) is up 71.5% at $35.33 on a merger with Devon Energy Corp. (NYSE: DVN). Crosstex Energy LP (NASDAQ: XTEX) is up 33.9% at $27.25 on the same news. Voxeljet AG (NYSE: VJET) is up 22.7% at $35.34. J.C. Penney Co. Inc. (NYSE: JCP) is down 8.4% at $6.42, after posting another record low today.
Top 10 US Companies To Watch In Right Now: Activision Blizzard Inc(ATVI)
Activision Blizzard, Inc., through its subsidiaries, publishes online, personal computer (PC), console, and handheld games worldwide. The company develops and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. It publishes interactive software products and peripherals. Its products cover various game categories, such as action/adventure, action sports, racing, role-playing, simulation, first-person action, music, and strategy. Activision?s products comprise Monsters vs. Aliens, Guitar Hero, X-Men Origins, PROTOTYPE, Transformers, Ice Age, Wolfenstein, Marvel Ultimate Alliance, Bakugan Battle Brawlers, DJ Hero, Band Hero, Call of Duty, Tony Hawk, Guitar Hero, Three map packs for Call of Duty, True Crime, Spider-Man, Bakugan, Blur, and Singularity. Its customers include retail outlets and distributors, including mass-market retailers, consumer electronics stores, discount warehouses, and game specialty stores. Activision Blizzard, Inc. is based in Santa Monica, California. Activision Blizzard, Inc. operates as a subsidiary of Vivendi.
Advisors' Opinion:- [By Tim Beyers and Erin Miller]
In years past, video-game openings have rivaled film premieres for how much they've brought in. Think of Microsoft (NASDAQ: MSFT ) , whose Halo 4 generated $220 million in first-day sales. Or how about Activision Blizzard's (NASDAQ: ATVI ) Black Ops II, which took in $500 million worldwide during its first 24 hours on sale?
- [By Leo Sun]
Moreover, the Wii U hasn't been completely abandoned by leading U.S. publishers yet. Activision Blizzard's (NASDAQ: ATVI ) Call of Duty: Ghosts and Ubisoft's Assassin's Creed 4 have both been released for the Wii U.
- [By Morningstar]
Electronic Arts (EA) and Activision Blizzard (ATVI) have an opportunity to improve their competitive positioning when the next-generation consoles Xbox One and PlayStation 4 are launched this fall. The video game industry is increasingly driven by blockbuster titles, as demonstrated by the September release of Grand Theft Auto V. As the two largest publishers in the video game industry, EA and Activision possess the financial resources, intellectual property and devoted fan bases to maintain leading positions and fortify their economic moats early in the console cycle.
Top 10 US Companies To Watch In Right Now: AMR Corp (AAMRQ)
AMR Corporation (AMR), incorporated in October 1982, operates in the airline industry. The Company�� principal subsidiary is American Airlines, Inc. (American). As of December 31, 2011, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. AMR Eagle Holding Corporation (AMR Eagle), a wholly owned subsidiary of AMR, owns two regional airlines, which do business as American Eagle - American Eagle Airlines, Inc. and Executive Airlines, Inc. (collectively, the American Eagle carriers). American also contracts with an independently owned regional airline, which does business as AmericanConnection (the AmericanConnection carrier). As of December 31, 2011, AMR Eagle operated approximately 1,500 daily departures, offering scheduled passenger service to over 175 destinations in North America, Mexico and the Caribbean.
American, AMR Eagle and the AmericanConnection airline served more than 250 cities in approximately 50 countries with, on average, 3,400 daily flights and the combined network fleet numbered approximately 900 aircraft as of December 31, 2011. American Airlines is also a founding member of the oneworld alliance, which includes British Airways, Cathay Pacific, Finnair, LAN Airlines, Iberia, Qantas, JAL, Malev Hungarian, Mexicana, Royal Jordanian and S7 Airlines. Together, oneworld members serve 750 destinations in approximately 150 countries, with about 8,500 daily departures. American is also one of the scheduled air freight carriers in the world, providing a range of freight and mail services to shippers throughout its system onboard American�� passenger fleet.
To improve access to each other�� markets, American has established marketing relationships with other airlines and rail companies. As of December 31, 2011, American had marketing relationships with Air Berlin, Air Pacific, Air Tahiti Nui, Alaska Airlines, British Airways, Cape Air, Cathay Pacific, China Eastern Airl! ines, Dragonair, Deutsche Bahn German Rail, EL AL, Etihad Airways, EVA Air, Finnair, GOL, Gulf Air, Hawaiian Airlines, Iberia, Japan Airlines (JAL), Jet Airways, JetStar Airways, LAN (includes LAN Airlines, LAN Argentina, LAN Ecuador and LAN Peru), Niki Airlines, Qantas Airways, Royal Jordanian, S7 Airlines, and Vietnam Airlines.
American has established the AAdvantage frequent flyer program (AAdvantage). AAdvantage members earn mileage credits by flying on American, American Eagle and the AmericanConnection carrier or by using services of other participants in the AAdvantage program. Mileage credits can be redeemed for free, discounted or upgraded travel on American, American Eagle or other participating airlines, or for other awards. American sells mileage credits and related services to other participants in the AAdvantage program. There are over 1,000 program participants, including a credit card issuer, hotels, car rental companies, and other products and services companies in the AAdvantage program. As of December 31, 2011, AAdvantage had approximately 69 million total members.
The Company competes with Alaska Airlines (Alaska), Delta Air Lines (Delta), Frontier Airlines, JetBlue Airways (JetBlue), Hawaiian Airlines, Southwest Airlines (Southwest) and AirTran Airways (Air Tran), Spirit Airlines, United Airlines (United) and Continental Airlines (Continental), US Airways and Virgin America Airlines.
Advisors' Opinion:- [By Alexander MacLennan]
Unnecessary discount
The news surrounding US Airways (NYSE: LCC ) recently has almost entirely centered on the airline's proposed merger with American Airlines parent company AMR (NASDAQOTH: AAMRQ ) . While this merger would play a major role in shaping the future of US Airways (which would become American Airlines Group upon the merger), the results of the trial determining whether the airlines can merge are not do-or-die. - [By Ben Levisohn]
Airlines have performed better this week, but how could they not following last week’s devastation after the Justice Department said it would try to block the merger between AMR Corp. (AAMRQ) and US Airways (LCC).
Top 10 US Companies To Watch In Right Now: Fomento de Construcciones y Contratas SA (FCC)
Fomento de Construcciones y Contratas SA (FCC) is a Spain-based company, which is primarily engaged, together with its subsidiaries in the construction and environmental services sector. The Company�� activities include the collection, treatment and elimination of solid urban waste, street cleaning, sewer system maintenance, green areas and buildings maintenance, urban transport, treatment and elimination of industrial waste, full-service water supply management and cement manufacture. The Company is also active in the real estate development, as well as in the renewable energy industry. In addition, the Company is a parent of Grupo FCC, a group which comprises a number of controlled entities. Advisors' Opinion:- [By Live Investor]
What does the FCC have to say? The regulator�� reaction is nothing surprising. After Son met the Federal Communications Commission (FCC) to convince them about the prospects of the proposed deal, Reuters reported that FCC chairman Tom Wheeler wasn�� quite impressed and had dubious thoughts on it.
- [By Quick Pen]
The Federal Communications Commission (FCC) and the Department of Justice (DoJ) do not want the number of players in the telecom sector to shrink below four ��Verizon, AT&T, Sprint, and T-Mobile. To this Sprint�� Son argues that the industry already has four players ��Verizon that purchased Vodafone�� stake in it, AT&T which plans to acquire DirecTV (DTV), and Comcast (CMCSA); Sprint would be the fourth one. But these antitrust issues have been a challenge for Sprint.
Top 10 US Companies To Watch In Right Now: Powershares Buyback Achiever Portfolio (PKW)
PowerShares Buyback Achievers Portfolio (Fund) seeks investment results that correspond generally to the price and yield of an equity index called the Share BuyBack Achievers Index (the Index). The Index is designed to track the performance of companies that meet the requirements to be classified as BuyBack Achievers. To become eligible for inclusion in the Index, a company must be incorporated in the United States, trade on the NYSE, the AMEX or the NASDAQ, and must have repurchased at least 5% or more of its outstanding shares for the trailing 12 months. The Index consists of stocks of companies selected by Mergent, Inc. (the Index Provider) pursuant to its own selection methodology. The Fund�� investment advisor is PowerShares Capital Management LLC.
The Index is rebalanced on the last trading date of April, July and October based on the constituents��modified market capitalizations as of the last trading day in March, June and September, respectively. The Fund generally will invest in the stocks comprising the Index in proportion to their weightings in the Index. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate the performance of the Index.
Advisors' Opinion:- [By Joon Choi]
Meanwhile, investors have been flocking to buy PowerShares Buyback Achievers (PKW), pushing the price into overbought territory.
Currently, the monthly relative strength indicator (RSI) reading is 83.7. (A reading over 70 is considered to be overbought.) To put this figure in perspective, the monthly RSI of the Nasdaq Composite was 85.9 on March of 2000 (the index peak), and we know what happened afterwards.
- [By John Waggoner]
The past five years, the PowerShares Buyback Achievers fund (ticker: PKW), has beaten the SPDR S&P 500 ETF trust by 3.91 percentage points a year, according to Morningstar, the Chicago investment trackers. So far this year, however, the fund has lagged behind the index by 2.28 percentage points ��a sign that Wall Street may be getting less impressed by buybacks.
- [By Jon C. Ogg]
5. Dividends, stock buy-backs, capex, and M&A all increase at a double-digit rate – This is led by a lot of cash flow, underleveraged balance sheets, and possible great places to use cash. The argument for higher cap-ex is as follows: “Pent-up demand and aging of plant, equipment and technology argue for increases in those key areas.”
ETF Recommendation: Vanguard Dividend Appreciation ETF (NYSEArca: VIG) for dividend growers, and PowerShares Buyback Achievers (NYSEArca: PKW) for buyback stocks. Hint: the buyback ETF rose by 45.5% in 2013 after dividend adjustments versus 28.8% for the dividend growth ETF.6. The U.S. dollar appreciates as U.S. energy and manufacturing trends continue to improve.
- [By Marvin Appel, CEO and Founder, Appel Asset Management Corporation]
Buyback Achievers ETF (PKW)
The stocks in this ETF are those that have repurchased at least 5% of their shares in the 12 months preceding the reconstitution of the index every January. 200 stocks currently qualify. (They are weighted by market capitalization.)
Top 10 US Companies To Watch In Right Now: iShares S&P 500 Value Index Fund (IVE)
iShares S&P 500 Value Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Standard & Poor's 500/Citigroup Value Index (the Index). The Index measures the performance of the large-capitalization value sector of the United States equity market. It is a subset of the Standard & Poor's 500 Index, and consists of those stocks exhibiting the strongest value characteristics in the Standard & Poor's 500 Index, representing approximately 51% of the market capitalization of the Standard & Poor's 500 Index.
The Fund uses a representative sampling strategy in seeking to track the Index. Barclays Global Fund Advisors (BGFA) serves as an advisor to the Fund.
Advisors' Opinion:- [By David Fabian]
In addition, this sector has likely benefited from the rotation out of high-beta growth stocks and into value-oriented segments that are more defensive in nature.� The energy sector is the second largest allocation in the iShares S&P 500 Value ETF (NYSE: IVE), with more than 15 percent of the underlying holdings.�
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