From STOCK PICKS: Top 5 All-Around for Oct. 21:
These are stocks of companies that meet a number of criteria, including annual revenue of more than $500 million, lower-than-average valuations such as a price-to-sales ratio of less than 2, and leverage that is less than 49% of total capital. In addition, they must rank near the top of all stocks rated by our [TheStreet.com Ratings] proprietary quantitative model, which looks at more than 60 factors. The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They are ordered by their potential to appreciate.
Lockheed Martin (LMT Quote) is a global security company headquartered in Bethesda, Md. We have rated Lockheed Martin a buy since May 2004. This rating is based on various strengths...
For the second quarter of fiscal 2008, the company reported slight revenue growth of 3.6% year over year. The second quarter also brought
EPS improvement of 18.1% when compared with the same quarter a year ago.
Net income increased by 13.4% in the second quarter, rising from $778 million in the second quarter of fiscal 2007 to $882 million. In addition, net operating
cash flow increased slightly by 6.19%.
Management reported that Lockheed Martin's second-quarter results were in line with its expectations for the quarter. We feel that the company's strengths outweigh the fact that it shows low profit margins, and we believe that the stock should have good upside potential under most economic conditions.
Read the full version of
STOCK PICKS: Top 5 All-Around for Oct. 21.
From
Kass: Stocks I'm Longing For:
Here are some of my ideas as to where I [Doug Kass] would begin to look for long investment positions amid the carnage we call the U.S. stock market.
I would stick with companies that are self-funding (have limited external financing requirements), diversified (not dependent on narrow end markets) and not U.S.-centric with a broader geographic focus (i.e., a beneficiary of export and emerging market growth). Within the context of a low interest rate environment, I would particularly emphasize high-yielding stocks.
Some examples might include
American Express (AXP Quote),
General Electric (GE Quote)...
Read the full version of
Kass: Stocks I'm Longing For.
Plus, don't miss
Kass: Buy It Like Buffett.
From
Stock-Picking Lessons From a Pig Farmer:
Mr. Womack [the pig farmer] had been investing for 40 years and was consistently profitable. His secret was simple. He waited until he read in the news that the market was making new lows and all the experts were predicting the end of the world. He would select a package of stocks that had fallen below $10 a share in profitable companies that paid dividends.
When the market eventually recovered in a year or two and the news was full of ebullient predictions, he would drive back to town and sell them all. He thought of stocks like buying pigs. He bought them when they were cheap and sold them when they were expensive.
I [Tim Melvin] sat down on Friday [Oct. 17] and did a search for stocks that Mr. Womack might have liked... Keep in mind that Mr. Womack held his stocks until the markets were roaring and everybody loved stocks again. That will probably take a few years, but you will collect handsome dividends while you are waiting.
The first company is one I liked at higher prices and like even more at these levels.
CBS (CBS Quote) stock has been pummeled in the last few weeks. The stock has fallen almost 50% in just the last month. Advertising revenue and margins are dropping for the broadcasting company in the weak economy.
CBS recently announced that third-quarter profits would be below analysts' expectations... However, the stock now trades at just 5 times earnings. The shares yield 12% at this level, and the dividend is not only safe, most expect the company will continue to raise it over the years.
Read the full version of
Stock-Picking Lessons From a Pig Farmer.
From
Invest Like Graham With This Infrastructure Stock:
Apparently, [Benjamin] Graham [the "Dean of Wall Street"] had a lot of time on his hands in retirement, as he had tested these methods over 20 years and found they doubled the market return.
The method was simple: He wanted an earnings yield twice that of the
AAA bond but never more than 10 times earnings. As a financial test, the company should own twice what it owes. With AAA bond yields around 5.5%, this equates to a max
P/E ratio of 9 times earnings. After adding the equity and debt constraints I found 205 stocks that fit the criteria.
I [Tim Melvin] found some interesting stocks on the list that are worth the attention of long-term investors. I usually screen on asset-based criteria, so this was something of an eye-opener for me.
One name that I found particularly appealing was
LB Foster (FSTR Quote).
Read the full version of
Invest Like Graham With This Infrastructure Stock.
Plus, don't miss these value-focused videos on
TheStreet.com TV:
Cramer: Buffett's Buying, But Should You? (Oct. 17: Jim Cramer ponders whether the average investor can be like Buffett.)
Cramer: How to Find Value Stocks Now (Oct. 16: Cramer offers a new strategy.)
Cramer: Why Kimberly-Clark Has Value (Oct. 16: Goldman Sachs' recent recommendation has merit, says Cramer.)
Warren Buffett's Investing Philosophy (Oct. 1: Alice Schroeder, author of the new Warren Buffett biography The Snowball, details the Oracle of Omaha's investing methods and explains why he recently invested in Goldman Sachs.)
From
Value Stocks on the Retail Rack (Video, Oct. 9):
Research Manager David Peltier finds value opportunities in retail stocks. His take: Discount stores aren't always better. Instead, he suggests checking out
Dillard's (DDS Quote).
Peltier: "The stock just moved under $10 a share, but when you look at their
balance sheet, they a have a
book value of over $30. And a lot of that is in real estate, so maybe it's not really $30, but even if it's closer to $29 or $25, I think that this is the kind of deep value discount stock that folks would be looking for in this environment... The company's finances are relatively strong and I think they can weather this downturn."
To watch the video, click the player below:
