These days — OK, just about every day — Wall Street’s market watchers show unrivaled mastery in the art of hand-wringing. Interest rates look headed up, up, up. Oil prices are way, way down. Somewhere in between, China’s economy teeters on a high wire.
What’s next to make the market anxious — rumors of a Martian invasion?
Meanwhile back on Earth, some stocks transcend the worry by posting solid numbers or making smart bets for their future. Whether that translates to immediate or longer-term gains is another story, but still it pays (and could pay big) to take a closer look.
Here, the experts weigh in on some potential investment heavies.
Tyson more than meats expectations. The lineup at Tyson Foods (ticker: TSN) runs the gamut from Jimmy Dean sausage to Ball Park hot dogs, and, of course, chicken. “Although beef, chicken and pork prices are expected to continue sliding this year, Tyson’s strong management has shown an ability to operate effectively,” says David Twibell, president of the Denver-based Custom Portfolio Group. “Its stock has defied the market correction and gained roughly 15 percent so far this year.”
The company also beat earnings estimates last quarter, “dramatically raised its outlook for the rest of the year, and announced record operating margins. To top it off, Tyson still sells at reasonable multiples to earnings and sales,” Twibell says.
In other words, dig in.
Merger or not, Staples set to emerge. Over the last year Staples (SPLS) has taken a wallop worthy of a workplace probation. Its stock sank 42 percent and over the last five years is off more than 54 percent. It now trades at just above $9 a share, and the Federal Trade Commission’s move to block a proposed $6.3 billion merger with Office Depot (OPD) hasn’t helped.
But there is a bright spot: “Its share price has tumbled to the point of being undervalued — even without the merger,” says Keith Trauner, co-founder and co-portfolio manager of GoodHaven Capital Management in Millburn, New Jersey. “It’s clearly the dominant office supply company, appears to have stabilized revenues after a tough few years of pressure brought by changes in technology, yet trades at less than 10 times this year’s free cash flow per share.”
SPLS also sports a 5 percent dividend yield, enough to please the boss.
Hasbro’s winning the Wall Street game. Nerf guns. My Little Pony. Tonka trucks. Yet Hasbro (HAS) isn’t just kids’ stuff to its happy investors. (It also owns the monopoly on Monopoly, if that helps.) Up 16 percent over the last year and trading near $72 a share, Hasbro has a built-in advantage when overall retail slumps.
“Parents generally will cut discretionary spending on themselves before their children,” says Michelle M. Buckley, a Boston-based research analyst at F.L.Putnam Investment Management Co. “Hasbro has company-specific drivers this year and next; its owns a valuable “Star Wars” license, sales from which outperformed lofty expectations during the holiday season.”
Ah, the Force is with HAS, indeed.
Enterprise Products Partners has the energy. Admittedly, the words “investment” and “energy” go together these days like “money” and “toilet.” But Enterprise Products Partners (EPD), a Houston-based natural gas and crude oil pipeline company, has some notable factors in its favor, says Poe Fratt, vice president and senior research analyst at D.A. Davidson, and based in Lake Oswego, Oregon.
As a master limited partnership, Enterprise passes income and taxes directly onto its partners. And while its stock is down a third in the last 12 months, “We believe the price weakness over the past year creates an attractive investment opportunity in one of the highest-quality MLPs,” Fratt says.
EPD’s diverse asset base has helped the stock weather the current downturn in natural gas liquids prices, Fratt says, “and it should benefit from higher production and the lifting of the crude oil export ban over time.”
The spell of Alphabet. File under “duh,” but come on: It hasn’t exactly been a great run lately for other high-tech hotshots. Twitter (TWTR) trades just a hair above its 52-week low, while Apple (APPL) lost more than a quarter of its market capitalization since July. And as Apple’s cap fell, Alphabet (GOOG) at one point passed the iPhone colossus as the world’s most valuable company.
“(Alphabet) has recorded stock price gains of 30 percent over the last 12 months, compared to a 6 percent loss for technology stocks overall,” says Andrew Wetzel, a portfolio manager and senior research analyst also based at F.L.Putnam’s Boston office.
Additionally, “its new structure enables Google/Alphabet to pursue moonshots while still keeping Wall Street happy,” says Michael Downing, founder and CEO of Tout, a next-generation video platform and based in San Francisco. “This team may have cracked the code on how to build the 100-year company.”
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5 Hot Stocks That Will Beat the Bull originally appeared on usnews.com
