Archive for the ‘benchmark stocks’ Category
The share price of Apple Inc. (NASDAQ/AAPL) has been on a steady decline since trading at $705.07 on September 21, 2012. There are questions swirling around regarding the ability of Apple CEO Timothy Cook to deliver the superlative revenue growth traders have been accustomed to in the past. But with the rise of Samsung Electronics Co. Ltd. and “Android”-based phones and tablets, the competitive environment has tightened; Apple will need a “Plan B,” according to my stock analysis.
The declining revenue growth is an indication that Apple may be in trouble. According to analysts polled by Thomson Financial, Apple is estimated to grow its revenues by 22.2% in fiscal 2013 and fall to a mere 15.1% in fiscal 2014. My stock analysis shows that these are not growth metrics investors are paying for; rather, they pale in comparison to the 70.0% and 80.0% growth seen in 2011. The same goes for the chipmakers that need to shift their focus to the mobile market. (Read “Why Chipmakers Need to Focus on the Mobile Market.”)
My stock analysis suggests that Apple needs to do something other than just launching new “iPhones” and “iPads” to drive revenue growth. CEO Cook has visited China on numerous occasions—and trust me; he is not there to visit the Great Wall or Tiananmen Square. With about a billion mobile phones in the country, my stock analysis suggests that Apple wants a piece of the action, and the company realizes that selling $600.00 iPhones won’t cut it. Heck, even a $300.00 iPhone would likely be too high for the masses, based on my stock analysis. … Read More
Earnings seasons are always the best times of the year to be researching stocks. I have a number of benchmark stocks that I very much look forward to reviewing and I enjoy reading up on these companies even if I’m not contemplating them for investment.
One of the benchmark stocks that I always review is Union Pacific Corporation (NYSE/UNP). Following this company is a great way to get a feel for the industrial economy. The railroads are also a key indicator for the stock market where Union Pacific is the market leader within the group. The company’s shares have been an amazing wealth creator since 2005. The stock got cut in half during the financial crisis (like the rest of the stock market), then tripled over the last three years with a solid dividend yield between two percent and three percent. I expect Union Pacific to report another great quarter, particularly as automobile shipments are accelerating. We could see some weakness in coal shipments due to competition from natural gas, but on balance, business at the railroads is very good.
Another one of the benchmark stocks that I always keep an eye on is International Business Machines Corporation (NYSE/IBM). The company reports shortly and its shares have been amazingly strong on the stock market for the last couple of years. Large-cap technology has definitely been the stock market’s leading sector this year and I always want to know what both IBM and Intel Corporation (NASDAQ/INTC) say about their businesses. If we get better-than-expected earnings results in large-cap technology, I think the stock market has a good chance of moving higher, … Read More
There are a number of benchmark stocks that I follow and, even though I may not own them, these stocks are very good indicators either for a specific industry, the economy in general, or the stock market.
One company that I feel is an important benchmark stock to follow is Automatic Data Processing, Inc. (NASDAQ/ADP). This well-known payroll and human resources outsourcing company provides a great barometer on the Main Street economy and the U.S. employment picture specifically. The stock corrected along with the broader stock market to $45.00 per share in the third quarter of last year, then recovered smartly back above $50.00 per share. Now the stock is trading at approximately $55.00 per share and it recently hit a new 52-week high of $57.10 per share. As a benchmark stock, this performance is telling.
Automatic Data Processing’s quarterly results last year were very solid considering the state of the economy and earnings held up well. Just in the last 30 days, a number of Street analysts increased their earnings estimates for Automatic Data Processing’s next two quarters and its upcoming fiscal year. If a benchmark stock like Automatic Data Processing is trading right near its 52-week high, then, in my mind, it’s one more sign that the U.S. economy is moving in the right direction, albeit slowly.
Another benchmark stock that’s always worth keeping an eye on is IBM Corporation (NYSE/IBM), which has proven to be an outstanding wealth creator on the stock market, especially recently. It truly is impressive to see a $200-billion-dollar company appreciate so much on the stock market. This stock has been going up, … Read More
And, while the investment community was pleased to see a change at the top and was hoping for a visionary to turn around the ailing “BlackBerry” in its life and death battle against the Apple Inc. (NASDAQ/AAPL) and “Android” devices, there was no extended search for a new leader. Instead, the new CEO, Thorsten Heins, who is also the former COO, has been given the daunting task of reversing the company’s fortunes, but his appointment is not drawing rave reviews on Wall Street. The future clearly is cloudy, as the company really needs a visionary and “go to” guy and I’m not convinced that an operations specialist will be able to right the ship.
The reality is that Heins may be better than the Research In Motion (RIM) co-founders who appeared to be caught off guard by the rise of Apple, but he is likely not like the late Steve Jobs or Richard Branson of Virgin Media, Inc. (NASDAQ/VMED). However, only time will tell if Heins can offer something different. The reaction by investors indicates pessimism with selling in the stock.
So, while Apple is moving along with innovation and creative products, the BlackBerry is vulnerable to being crushed in the wake of not only Apple, but also a host of Android and “Windows”-powered smartphones and devices.
As an investor, I would stick with Apple—the best of breed. The company is the largest company in the world, with an astounding market cap in excess … Read More
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