Agrium, Best Buy Lead High-Flying Stocks - TheStreet

Agrium, Best Buy Lead High-Flying Stocks

Sara Lee, Agrium, CenturyTel, Best Buy and General Mills reached 52-week highs on Friday.
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BOSTON (

TheStreet

) -- Major U.S. indices declined Friday, but a handful of stocks rose to 52-week highs.

5. Sara Lee

(SLE)

rose 2.4% to $12.49. The frozen-pastry maker is planning to sell its air-freshener business and possibly other parts of its household products portfolio. Potential bidders are privately-held

SC Johnson

and

Procter & Gamble

(PG) - Get Report

.

Our take

: We rate Sara Lee "buy." Fiscal first-quarter net income rose 23% to $284 million, but earnings per share remained flat at 27 cents. Revenue dropped 7% to $2.6 billion. Sara Lee's gross margin rose from 38% to 41%, and its operating margin advanced from 5% to 8%. Sara Lee pays a dividend yield of 3.6%, higher than the

S&P 500

average of 2.8%.

4. Agrium

(AGU)

climbed 0.2% to $57.32. The fertilizer seller's shares rallied on news that shareholders of

CF Industries

(CF) - Get Report

, an acquisition target, support the transaction. More than 60% of CF Industries shares have been tendered.

Our take

: We rate Agrium "buy." Third-quarter profit plummeted 93% to $26 million, or 16 cents a share, as revenue dropped 41% to $1.8 billion. Agrium's gross margin fell from 34% to 22%, and its operating margin descended from 23% to 3%. Despite suffering a pronounced sales drop, Agrium is an attractive long-term investment since fertilizer demand will grow as emerging economies adopt protein-rich diets.

3. CenturyTel

(CTL) - Get Report

rallied 2.4% to $35.61.

Soleil Securities

initiated coverage at "buy."

Our take

: We rate CenturyTel "buy." Third-quarter net income surged 231% to $281 million, but earnings per share fell 41% to 49 cents, hurt by a higher share count. Revenue increased 188% to $1.9 billion. CenturyTel's gross margin inched from 63% to 64%, and its operating margin rose from 28% to 30%. CenturyTel pays a dividend yield of 7.9%, higher than the S&P 500 average of 2.8% and those of telecom peers

AT&T

(T) - Get Report

and

Verizon

(VZ) - Get Report

.

2. Best Buy

(BBY) - Get Report

rose 0.8% to $43.30. Investors scooped up shares, hoping that electronics sales will hold up during the holiday season. CEO Brian Dunn estimated $50 billion of annual sales at a

Morgan Stanley

(MS) - Get Report

conference.

Our take

: We rate Best Buy "hold." Fiscal second-quarter net income dropped 22% to $158 million and earnings per share fell 23% to 37 cents. Revenue increased 12% to $11 billion. Best Buy's gross margin remained steady at 26%, but its operating margin slipped from 4% to 3%. Around $1.3 billion of cash demonstrates adequate liquidity. A debt-to-equity ratio of 0.4 indicates conservative leverage. We give Best Buy a volatility score of 2.9 out of 10, less than the "buy"-list average.

1. General Mills

(GIS) - Get Report

increased 0.6% to $67.94. Yesterday,

UBS

(UBS) - Get Report

raised its price target to $75 for the cereal maker, citing consumers' preference to eat at home amid a weak labor market.

Our take

: We rate General Mills "buy." Fiscal first-quarter net income soared 51% to $421 million and earnings per share surged 58% to $1.25, boosted by a lower share count. Revenue grew marginally to $3.5 billion. The company's gross margin jumped from 37% to 44%, and its operating margin increased from 14% to 20%. We give General Mills a performance score of 7.7 out of 10, higher than the "buy"-list average.