Buy Ford, International Paper; Sell This: Analyst
The stock market has gone through many twists and turns since CNBC anchor Mark Haines said it could go no lower, on March 9, 2009.
Most stocks have done a lot better since then, and with the Dow Jones Industrial Average above 13,000, Rosecliff Capital Managing Partner Michael Murphy took a look at some of the biggest gainers in the three years since that call.
One stock Murphy would buy now is Ford Motor , which has been trading in a $12 range for quite some time “and so the next move is going to be on the upside,” Murphy said. “There’s a lot of things in their favor.” The company is cutting costs and the stock is back to its high of a year ago, he noted.
Another one he likes is International Paper.
“It’s really a play on the U.S. economy,” Murphy said. “They’re making boxes. If the economy recovers people will want to ship more things.”
The company has a 3 percent dividend and just recently bought Temple-Inland, which will give it 30 percent market share and add 30 cents to the bottom line.
He would sell Whole Foods Market. “It’s a great store, but look at the valuations,” he said, adding that while Whole Foods “reinvented the whole supermarket experience,” there’s now a lot of competition coming in.
Murphy would also sell Chipotle Mexican Grill, because it is “priced to perfection” and trading up 45 times earnings.
One stock he’d hold is Coach, which gave a strong sales projection Thursday and announced an expansion of its men’s line. The company’s margins are great and “it’s fairly valued,” Murphy said.
Additional News: Ford Pours $3.8 Billion Into Pension Plan
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Disclosure information was not available for Michael Murphy or his company.