GO
Loading...

CNBC Stock Blog

More

  Tuesday, 27 May 2008 | 1:50 PM ET

Value: Your Portfolio's Secret Ingredient

Posted By: Andrew Fisher

Ridgeworth Capital Management's Don Wordell says the thing your portfolio needs the most right now is value, and he has a couple of appropriate names for you. (He also offered Web-exclusive picks -- only for CNBC.com readers.)

His four-star Ridgeworth Mid-Cap Value Equity Fund is up an average of 15.2 percent per year over the last five years.

Recommendations:

Here's a surprise: His top stock pick is an airline. Not so surprisingly, it's Southwest Airlines.

"Energy is not what's going to drive Southwest Airlines," he told CNBC. "They have the best balance sheet in the business right now -- $3 billion in cash -- and they're going to be the clear beneficiary from the Delta-Northwest merger and the capacity that's coming out of the airline space right now."

Also on his list: A financial stock! It's National City.

"Nat City's valuation is very compelling, trading at a discount to tangible book value," he explained. "The market is giving them absolutely no credit for $60 billion in deposits; they have gone through the capital-raising that they needed to go through, and our estimate is that in the next two years, they're actually going to have an excess-capital position."

»Read more
  Tuesday, 27 May 2008 | 12:41 PM ET

Stock Pickers Focus On Dividends (Pt. 1)

Posted By: Andrew Fisher

After last week's 500+-point tumble in the Dow Jones Industrials, Dan Genter of RNC Genter Capital Management and Jill Evans of Alpine Funds say a company's dividends deserve as much attention as, if not more than, its total return.

"It's really becoming the weapon of choice right now, to get through this market," Genter told CNBC. "What you're seeing is that there's been a significant re-assessment of risk by investors, and clearly, they want to reduce their risk, and reduce the volatility."

(See Part 2 for Jill Evans' picks. )

Evans pinpoints several different themes in the dividend picture.

"[One is] the global growth theme, and we look for regions and areas where we see the global growth continuing," she said. "We...look domestically for growth stories and cash-flow stories that are not...necessarily tied to economic growth, for example, in some of the niche health-care names."

Recommendations:

"More and more, we're seeing technology stocks that are very attractive," Genter said. "Taiwan Semiconductor, Microchip Technology, you're seeing a lot of different areas now as more and more companies are paying dividends and increasing dividends, it's really opened this area much wider to investors."

His selections are not limited to technology.

"Capital goods, if you look at Eastman Chemical, for example," he added. "Health care, Johnson & Johnson ; I think I'd be very cautious in the financial space, but looking at some of the quality names, looking at JPMorgan Chase and US Bancorp, which pays about a 5.1 percent dividend...you can get a very broad sector diversification with a lot of these stocks that are available."

Also on his list are Enerplus , Leggett & Platt, and VF Corporation.

»Read more
  Tuesday, 27 May 2008 | 12:33 PM ET

Stock Pickers Focus On Dividends (Pt. 2)

Posted By: Andrew Fisher

After last week's 500+-point tumble in the Dow Jones Industrials, Dan Genter of RNC Genter Capital Management and Jill Evans of Alpine Funds say a company's dividends deserve as much attention as, if not more than, its total return.

"It's really becoming the weapon of choice right now," Genter told CNBC. "What you're seeing is that there's been a significant re-assessment of risk by investors, and clearly, they want to reduce their risk, and reduce the volatility."

(See Part 1 for Dan Genter's Picks)

Evans pinpoints several different themes in the dividend picture.

"[One is] the global growth theme, and we look for regions and areas where we see the global growth continuing," she said. "We...look domestically for growth stories and cash-flow stories that are not...necessarily tied to economic growth, for example, in some of the niche health-care names."

Recommendations:

"One of our favorites is a Russian telecom company called Mobile Telesystems," Evans said. "They are the largest mobile telecommunications provider in Russia and eastern Europe...you get about a 3.5 percent dividend yield; they're committed to returning cash to shareholders."

She also likes Southern Peru Copper and Meridian Bioscience.

»Read more
  Tuesday, 27 May 2008 | 10:52 AM ET

BlackRock's Doll is Still Buying Stocks

Posted By: Andrew Fisher

BlackRock's Bob Doll is not known to make rash decisions. And in the face of spiking oil prices, a slowing economy and market volatility, he continues to buy stocks. So what is he buying?

Recommendations:

Doll has liked -- and continues to like -- Hewlett Packard.

"The stock has taken a bit of a breather on the purchase of EDS, and some have felt that they have paid too much for it," he acknowledged. "Our view is [Hewlett-Packard CEO] Mark Hurd and Co. will do a phenomenal job integrating that company, trimming costs, and beginning to position that as part of overall Hewlett-Packard and continue the good growth profile and earnings we've seen in recent years."

Doll does not own Anheuser-Busch -- but he's encouraged by word of a possible takeover by InBev.

"The trend is the right trend," he told CNBC. "Strategic M&A should be alive and well. Stock prices relative to interest rates are fairly low, in our opinion, and therefore companies will be looking down the street to say, 'Who can help us do a better job at addressing our marketplace?' and that will spur further consolidation and M&A activity."

»Read more
  Monday, 26 May 2008 | 7:07 AM ET

Home Depot, Lowe's Are Good Long Term Bets: Barron's

Posted By: Reuters

Shares of home improvement retailers Home Depot and Lowe's are good long-term bets given an eventual recovery in the U.S. housing market, an article in the May 26 edition of Barron's said.

Both chains boast strong balance sheets and generate cash, and they are doing the right things to ensure their earnings and shares recover when the housing upturn occurs, probably late next year, said the report in the weekly financial publication.

Todd Lowenstein of HighMark Value Momentum Fund pegs Home Depot's fair value at between $35 and $40, according to the magazine.

Shares of the company closed Friday at $26.77.

Bear Stearns analyst Christopher Horvers estimates that Lowe's shares could be worth $32, according to the article. Lowe's shares closed at $23.30 on Friday.

»Read more
  Friday, 23 May 2008 | 2:16 PM ET

Energize Your Portfolio With Energy

Posted By: Andrew Fisher

No question about it: The most energetic sector in business is energy. But where does an investor go for bargains? Shawn Reynolds of Van Eck Global has some suggestions -- and a special selection for CNBC.com.

His Van Eck Global Hard Assets fund is up an average of 38.9 percent per year over the last five years, and up 19.9 percent year to date.

"The great thing about energy equities right now is that although they've moved strongly over the last several years, valuations remain very cheap, and, obviously, that's driven by the high commodity prices," he told CNBC.

Recommendations:
(See below for web-exclusive pick)

At the top of his shopping list is Appalachian coal producer Alpha Natural Resources.

"Coal is up over 100 percent in the last year, really driven by emerging growth of power generation in China and Brazil, also coke and coal for steel demand," he explained.

He also likes Cameron International.

"Cameron's a provider of equipment for oil and gas wells," he said. "They're highly leveraged to deep-water; everybody's heard about [Brazilian energy giant] Petrobras and their deep-water discoveries."

Web Extra:

Reynolds also offered a bonus stock pick exclusively for CNBC.com.

It's Exterran, a provider of process and flow equipment that's focused on natural gas.

He points out that Exterran produces compression equipment that's necessary for virtually every producing gas well.

»Read more
  Friday, 23 May 2008 | 10:46 AM ET

Coal Stocks: East Is Best

Posted By: Andrew Fisher

Fear-inducing oil prices have heated up the world's demand for coal, an abundant resource in the United States. No one knows that better than Jeremy Sussman, domestic coal analyst at Natixis Bleichroeder.

"There's an extremely tight global supply/demand shortage right now," he told CNBC. "On the supply side, you've got traditional exporting nations like Australia, where they're having major infrastructure issues; on the demand side, you've got places like China and India, that are vastly increasing their imports, so that leaves a nice spot for the U.S."

Sussman expects a doubling of America's coal exports over the three-year period ending in 2009.

Recommendations:

Among American coal producers, Sussman prefers those with their resources in the East.

"They're more directly levered to European exports, while the western names are more back-filling," he said. "Foundation [Coal Holdings] would be more of a western name; James River [Coal] is more of an eastern name."

His favorites are Patriot Coal, Peabody Energy, and Consol Energy.

»Read more
  Thursday, 22 May 2008 | 1:00 PM ET

Global Exposure Plays: Infrastructure

Posted By: Andrew Fisher

Foreign exposure: It's been a manta among analysts and fund managers for quite a while now. David Fondrie of Heartland Advisors says the best way to play it right now is in infrastructure, and he has a couple of names for investors.

Fondrie's four-star Heartland Select Value Fund is up an average of 16.7 percent per year over the last five years.

Recommendations:

Fondrie's first pick in the foreign infrastructure arena is precision-bearing maker Timken.

Among Timken's many customers are foreign infrastructure giants like Caterpillar and John Deere.

"They've been kind of washed as an automobile parts supplier," he told CNBC. "Indeed, that's 30 percent of their business, but to us, we see the infrastructure piece growing very rapidly, and they also have a nice position in the aerospace market."

He says Timken's valuation is much more favorable than those of other infrastructure-related companies like Shaw Group and Fluor.

Also on Fondrie's list is Ultrapetrol.

»Read more
  Thursday, 22 May 2008 | 11:55 AM ET

Restaurant Stocks: Feast and Famine

Posted By: Andrew Fisher

Ahead of the Memorial Day holiday weekend, Brent Wilsey of Wilsey Asset Management has some ideas for investors about restaurant companies and their stocks.

Despite rising food costs, he's enthusiastic about the good ones.

"When you put one of these in your portfolio, you want to diversify that portfolio, and what if, down the road six to 12 months, the food costs come back down, and what if the consumer starts doing well?" he asked. "These are the companies that will perform very well in your portfolio."

Recommendations:

Picks

Topping Wilsey's "buy" list is Darden Restaurants, which owns the Olive Garden, Red Lobster and Longhorn Steakhouse chains.

"The valuations look pretty good here," he told CNBC. "They've actually seen their sales increase by 13.4 percent...the debt's a little high, but...I think they can pay that debt down."

Wilsey also likes Red Robin Gourmet Burgers.

"Their sales are actually doing the best, up 23 percent," he noted. "A lot of cash flow coming through there, as well."

His third pick on the plus side is Bob Evans Farms.

Pans

But there is also a downside list, and there, Wilsey puts Chipotle Mexican Grill.

"This one's just about done...based on valuation," he said. "They're still doing a very good job, but...I think the stock price has gotten ahead of the value of the company."

And there are names that give him even more indigestion.

"The one I think looks worst is Ihop," he said. "Their debt-to-equity is nearly 600 percent."

In a slowdown, he says, companies like this are going to have a very hard time suriviving.

Papa John's International is also on Wilsey's list of pans.

»Read more
  Thursday, 22 May 2008 | 11:38 AM ET

Five-Star Advice: Go With Growth

Posted By: Andrew Fisher

The price of oil is just about all the growth to be found in the markets these days, according to five-star fund manager Neil Hennessy. He sees oil riding a bubble that will eventually burst, just as the technology and housing bubbles did, but for the investor right now, he says, the only alternative is to go with value.

The Hennessy Focus 30 Fund is up an average of 18.88 percent per year over the last three years.

"At some point in time, oil's going to reach that level, where somebody's going to say, 'Enough's enough,' and they're going to start to sell, and that's going to beget more selling," he told CNBC. "The oil markets have no curbs, so...it can fall to whatever it wants to."

Web-Extra Recommendations:

Hennessy offered CNBC.com exclusively a list of value stocks that are worth a look, as investors wait for oil to top out:

»Read more

About CNBC Stock Blog

  • The CNBC Stock Blog is a cross-section of expert opinions and insights from our TV and Web site coverage. This blog includes posts written by and about top analysts and strategists, super-investors and CNBC's own market mavens. You'll find stock picks, news about publicly-traded companies, commodities, hot sectors, ETFs and the latest options action.

Markets