There are some low-priced stocks out there that really catch Wall
Street’s fancy. There’s some kind of love affair with a cheap stock —
with investors fooling themselves into thinking that it’s easier for a
$1 stock to get to $2 than it is for a $100 stock to get to $200.
But
the bottom line is still the bottom line. A stock succeeds or fails on
the merit of its business, not logistical nonsense like shares
outstanding or the headline value of stock.
Take the 50-to-1 stock split that Berkshire Hathaway
(NYSE:BRK.B) executed in 2009 to bring its “Baby B” stock down from
more than $3,000 a pop to a manageable amount under $100 per share. Did
it change the company? Did Warren Buffett become any smarter or dumber
as a result?
And on a more basic level, you make the same amount
of money owning one share of a $3,000 stock as you do with 3,000 shares
of a $1 stock. Either way, you have the same amount of money invested —
it’s just divided up differently.
So if you’re afraid of
high-priced stocks or in love with bargain picks, take a moment to
consider these five stocks with $200-plus price tags — and the potential
to move even higher in the months ahead:
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Intuitive Surgical
(NASDAQ:ISRG) makes the innovative da Vinci surgical systems that have
revolutionized operations used to treat cancer and heart disease, among
other things. Without getting too technical, Intuitive Surgical gear
allows doctors to operate on a patient with fewer incisions, speeding up
recovery time and reducing the risk of complications. ISRG is up 400%
in five years — taking the recession in stride thanks to powerful growth
as its technology has caught on and as aging baby boomers create
increased demand for surgeries. The company has seen nine straight
quarters of year-over-year profit increases and has seen a streak of
revenue increases even longer than that. Health care is one of the few
growth areas in the American economy, and ISRG is well positioned to
capitalize on this trend.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Apple
(NASDAQ:AAPL) is the $400 gorilla of Wall Street that dares you to bet
against it. Yeah, shares dropped 15% from October to November — but
Apple has bounced back in a big way, hitting an all-time high Wednesday,
and seems ready to move even higher. The iPad 3 could come as recently
as February, if you believe the rumors, and Apple clearly is looking to
maintain its stranglehold on the tablet market. Wall Street is
admittedly ga-ga for Apple, so you have to beware of the hype. Still, a
forward price-to-earnings ratio of less than 11 hints that there still
is time to buy Apple for the continued march upward.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - MasterCard
(NYSE:MA) is at the center of a macro trend that is tough to ignore:
the death of paper money. Per-swipe transactions continue to rise even
in America, since as much as 40% of transactions in the U.S. still take
place with cash or paper checks. But the real growth for MasterCard is
coming from emerging markets, where a rising middle class is getting
access to bank accounts and debit cards. Remember, MasterCard is not a
debt issuer, but more of a toll-taker on the e-commerce superhighway.
Every time you make a purchase, MasterCard gets paid — and it’s hard to
believe that the number of people using plastic is going to decline
anytime soon.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - Priceline
(NASDAQ:PCLN) and its iconic pitchman William Shatner have taken over
the travel business with an innovative “name your own price” model for
airfares, hotels, rental cars and a host of other services. However, the
real growth isn’t at home from people booking trips to Florida to see
the grandparents — it’s internationally. PCLN offers hotel room
reservations in about 100 countries and more than 40 languages. That has
allowed for big growth despite the fact that Priceline is competing
with internet travel sites like Kayak that have popped up in recent
years. Profits are on track to double from 2010 to 2011, and grow an
additional 25% in 2012.
5 $200-Plus Stocks Worth Every Cent to invest in 2013 - W.W. Grainger
(NYSE:GWW) is a rather un-sexy company when compared to the others on
this list. It is engaged in “facilities maintenance,” a glorified way to
refer to distributing pumps, tools, motors and other gear that allow
businesses to … well, do business. That might not sound exciting, but a
60% surge in GWW stock since the summer is worth taking note of. The
company has seen eight consecutive quarters of year-over-year revenue
increases. EPS numbers jumped 29% from 2010 to 2011 and are set to surge
another 17% in 2012. W.W. Grainger is expanding in China and Panama,
too, which could add even more momentum to shares. You might want to
wait for a pullback after the red-hot run recently, however.
Showing posts with label Best Stocks To Invest For 2013. Show all posts
Showing posts with label Best Stocks To Invest For 2013. Show all posts
3 Undervalued Tech Stocks to Buy in 2012
When investors see the words “undervalued tech stocks,” the first
companies that jump to mind are probably the mega-cap giants like Cisco (NASDAQ:CSCO) and Microsoft
(NASDAQ:MSFT). The large-cap space certainly has more than its share of
cheap tech stocks, but a look into mid- and small-cap territory reveals
other, less talked-about opportunities. Computer Sciences (NYSE:CSC), Lexmark International (NYSE:LXK), and China Digital TV (NYSE:STV), are three such stocks that deserve more attention than they receive.
3 Undervalued Tech Stocks to Buy in 2012 - Computer Sciences
Shares of CSC, an IT-outsourcing company, have been pummeled from a February high above $56 to $37.20 on Wednesday. The stock has been hit by less-than-stellar earnings results and concerns that the U.S. government’s perilous fiscal situation will weigh on the 39% of CSC’s business that comes from federal contracts. That’s undoubtedly a legitimate worry, but also one that is well-known at this point. At 7.3 times 2012 estimates (and a price-to-earnings-to-growth ratio of 0.9) and a share price sitting at 0.8 times book value, it appears that the bad news is fully discounted in the stock. Two other key points regarding CSC: first, the stock yields 2.2% – much better than you’ll find with the average large-cap tech stock. Second, the company is cash-rich and is frequently mentioned as a target of a buyout. Betting on a takeover is always a dicey proposition, but CSC offers investors a solid risk-reward tradeoff even without the benefit of a buyout.
Keep in mind: The last time CSC’s P/E was at this level, the stock traded up 25% in less than two months.
3 Undervalued Tech Stocks to Buy in 2012 - Lexmark International
A maker of printers, ink, and imaging products, Lexmark has seen its shares come under heavy selling pressure since late 2010 – a trend that wasn’t helped by its May earnings miss. While the printing business is indeed in gradual decline, it may finally be time to say “enough is enough” regarding the downturn in Lexmark’s share price. After hitting a high above $47 in mid-October, the stock now stands at $28.62. At this level, the stock trades at forward P/E of less than 7x, and removing the net cash of $7 a share (about a quarter of its market cap) on its balance sheet brings the P/E below 5.5x. A low P/E can be a trap when growth is slowing, of course, but the company’s core ink business continues to generate substantial free cash flow. And like CSC, Lexmark has the added benefit of being a strong candidate for an eventual takeover.
Keep in mind: The recent selloff has driven LXK’s valuation to its lowest level in history.
3 Undervalued Tech Stocks to Buy in 2012 - China Digital TV
The smallest of the three companies discussed here, China Digital could offer big potential to patient investors. The company makes smart cards that allow the conversion of an analog signal to digital. A boring business perhaps, but consider that China is the world’s largest TV market with 377 million viewing households. Of these, 187 million have cable and only 90 million currently have a digital signal. This adds up to a stellar growth opportunity for a company with no debt and over 70% of its market cap accounted for by the $214 million of cash on its balance sheet. The stock trades for less than 7x 2012 earnings estimates and a PEG of just over 0.4. Chinese stocks are not without risk, as 2011 has taught us, but patient investors who tune into STV may be in for quite a show.
Keep in Mind: Like LXK, CSC trades at an all-time low P/E.
Technology investing has been no picnic for investors thus far in 2011, but these stocks provide a compelling margin of safety in the event of further volatility in the months ahead.
3 Undervalued Tech Stocks to Buy in 2012 - Computer Sciences
Shares of CSC, an IT-outsourcing company, have been pummeled from a February high above $56 to $37.20 on Wednesday. The stock has been hit by less-than-stellar earnings results and concerns that the U.S. government’s perilous fiscal situation will weigh on the 39% of CSC’s business that comes from federal contracts. That’s undoubtedly a legitimate worry, but also one that is well-known at this point. At 7.3 times 2012 estimates (and a price-to-earnings-to-growth ratio of 0.9) and a share price sitting at 0.8 times book value, it appears that the bad news is fully discounted in the stock. Two other key points regarding CSC: first, the stock yields 2.2% – much better than you’ll find with the average large-cap tech stock. Second, the company is cash-rich and is frequently mentioned as a target of a buyout. Betting on a takeover is always a dicey proposition, but CSC offers investors a solid risk-reward tradeoff even without the benefit of a buyout.
Keep in mind: The last time CSC’s P/E was at this level, the stock traded up 25% in less than two months.
3 Undervalued Tech Stocks to Buy in 2012 - Lexmark International
A maker of printers, ink, and imaging products, Lexmark has seen its shares come under heavy selling pressure since late 2010 – a trend that wasn’t helped by its May earnings miss. While the printing business is indeed in gradual decline, it may finally be time to say “enough is enough” regarding the downturn in Lexmark’s share price. After hitting a high above $47 in mid-October, the stock now stands at $28.62. At this level, the stock trades at forward P/E of less than 7x, and removing the net cash of $7 a share (about a quarter of its market cap) on its balance sheet brings the P/E below 5.5x. A low P/E can be a trap when growth is slowing, of course, but the company’s core ink business continues to generate substantial free cash flow. And like CSC, Lexmark has the added benefit of being a strong candidate for an eventual takeover.
Keep in mind: The recent selloff has driven LXK’s valuation to its lowest level in history.
3 Undervalued Tech Stocks to Buy in 2012 - China Digital TV
The smallest of the three companies discussed here, China Digital could offer big potential to patient investors. The company makes smart cards that allow the conversion of an analog signal to digital. A boring business perhaps, but consider that China is the world’s largest TV market with 377 million viewing households. Of these, 187 million have cable and only 90 million currently have a digital signal. This adds up to a stellar growth opportunity for a company with no debt and over 70% of its market cap accounted for by the $214 million of cash on its balance sheet. The stock trades for less than 7x 2012 earnings estimates and a PEG of just over 0.4. Chinese stocks are not without risk, as 2011 has taught us, but patient investors who tune into STV may be in for quite a show.
Keep in Mind: Like LXK, CSC trades at an all-time low P/E.
Technology investing has been no picnic for investors thus far in 2011, but these stocks provide a compelling margin of safety in the event of further volatility in the months ahead.
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