Barron’s cover discusses food producers, with P/E ratios below the median P/Es of the past 10yrs, and most have secure and growing dividends. Nestlé (NSRGY) and Kellogg (K) are standouts owing to attractive valuations and solid growth prospects. (CPB, CAG, GIS, HNZ, HSY, KFT, WWY)
The stock of International Speedway (ISCA), which has skidded badly since last summer, could jump about 20%, to 50, as the company leaves some problems behind and benefits from long-term TV contracts.
At 38.70, or 17 times earnings, Femsa's ADRs (FMX) are cheap. Some fans think the stocks could be worth about 50, while a sum-of-the-parts analysis suggests a price of 64.
According to the Barron’s, in a one year span, best stock picker is Bear Sterns, with 2007 return of 21.98%. In a 6mo span, also Bear Sterns beat others with 12.08% return. While Goldman Sachs leads 3y and 5y lists with 55.39% and 150.91% returns, respectively. Morgan Keegan focus list lost a painful 17% in the 2H07.
SunPower's (SPWR) stock was cut in half after the solar bubble burst. Now it could double, with earnings growing 40-50%. The US Senate tried to attach an extension of the solar tax credit to the economic stimulus bill, but it failed to pass. While an extension could be reintroduced anytime, it most likely will be part of a package considered in the 4Q that would extend the wind and solar tax credit and the R&D tax credit, and apply a "patch" to the dreaded alternative minimum tax. "There's so much bipartisan support for the wind and solar package" that there's an 85-90% chance it gets passed by yr end, says Daniel Clifton, of Strategas Research Partners.
“The Trader” column highlights Plum Creek Timber (PCL), saying that the co’s 4.1% yield is not too shabby in an era of declining bond yields and slashed interest rates. Decimated demand has hurt lumber prices, but Plum Creek was able to sell land to prop up profits. New construction and remodeling use up about 40% of timber volume produced, but nearly 2/3 of it in dollar value, and a prolonged housing slump will hurt.
