From a technical analysis view, shares are trading within a bullish flag and holding above the 200-day moving average.
As long as the price remains above the key 200-day moving average, it’s a “buy.” I would not be too quick to take a stop loss. The last reported short interest is only 1.5 percent, and nothing I would worry about.
Freeport McMoRan Copper & Gold is engaged in mineral exploration and development, mining, and milling of copper, gold, and silver in Indonesia, and the smelting and refining of copper concentrates in Spain and Indonesia. The company was founded in 1987 and trades an average of 20.3 million shares per day with a marketcap of $40 billion.
52-Week Range: $28.85 to $48.96
Yield: 3.02 percent
Analysts are in love with this company. Freeport-McMoRan is sporting 16 “buy” or “strong buy” from a total of 16 analysts covering the company. The average analyst target price is $50.53. If the analysts are correct, that's about 25 percent more upside.
What is even more appealing is the fat dividend. This miner pays out $1.25 a year, but that amounts to less than one third of profits. Profits are expected to rise, which in turn makes me believe another dividend hike will be followed by another and another.
The past doesn’t guarantee the future; however the payment history does provided a map. Based on the last five years, the board really enjoys raising the dividend payout. Dividends increased 9.9 percent on average per year. As long as the payout rate stays in check, the increases are likely to continue.
Currently, the short interest based on the float is not a big concern. Short interest is 2.7 percent. Without a red flag from building short interest, I believe a fair target entry price of near $40.50 is reasonable. After moving up from trading near $36, we don’t want to see the shares get too far ahead of the curve right before buying.
Background:JPMorgan Chase is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management, and private equity. The company was founded in 1823 and trades an average of 25.4 million shares per day with a market cap of $156.5 billion.
52-Week Range: $27.85 to $46.49
Yield: 2.9 percent
Investors receive $1.20 a year in dividends even after traveling through the financial meltdown that took a few of Morgan’s peers over the cliff. The dividends are up from the previous three-year average of 51 cents. I have no way to know if we can expect the trend to continue, but I put a lot of weight into the past.
The average analyst target price for JPMorgan is $45.24, and I think an ideal entry is $40.25. Shares have to retrace lower by a slight amount after a brisk move higher in the last week to reach the entry price.
It’s no surprise to me that the shares are reacting favorably to the Fed’s announcement of QE3. Banks have a lot to gain from the nearly free and easy profits QE3 delivers. The added benefit of an improvement in the housing market helps banks in a big way also.
Banks are not currently favored, so the mean fiscal-year estimate price-to-earnings ratio is 8.8, based on earnings of $4.68 per share this year. By my standards, an earnings ratio for Morgan under 10 is a sweetheart deal. Still, don't chase it, and let the market take a breath.
The last reported short interest is small. Short interest is only 1.1 percent.
Background:General Electric operates as a technology and financial services company. GE trades an average of 46.2 million shares per day with a market cap of $232.8 billion.
52-Week Range: $14.02 - $22.37
Yield: 3.08 percent
GE currently pays 68 cents per share in dividends. After suspending the dividend during the financial crash, GE is brightly lit up once more. In the last three years, the average dividend paid per year was 56 cents per share and it’s reasonable to anticipate more increases to come.
From a technical perspective, the chart on GE looks rock solid on a bullish trend. The widely followed 200-day moving average is climbing on a steady and manageable incline that should breach above $20 within the next month.
GE’s mean fiscal year estimated price-to-earnings ratio is 14.2, based on analysts’ estimates of $1.55 per share in earnings this year. For a financial company relative to its peers, GE isn’t very cheap anymore, but for a once-again growth story, GE shares are attractive regardless of the source of earnings.
Even in the last month, the shares have increased 5.4 percent. Almost zero desire by short sellers to move against this stock. Short interest hardly moves the needle with only 0.7 percent of the float.
I use SEC.gov, Zacks.com, WSJ.com, Tradestation, and Reuters for my data. PE is generally adjusted based on an average number of shares and for operational earnings.
—By TheStreet.com Contributor Robert Weinstein
Additional News: JPMorgan Seeks to Cut Risk: Report
Additional Views: Financials — Best Way to Play Easing?
CNBC Data Pages:
At the time of publication, the author held no positions in any of the stocks mentioned.