Stock Tips - the Wall Street Recommendations Thread

[deepthroat]

We all want to retire in comfort some day, right? Hopefully this thread can turn into a resource for wealth-generation (or preservation) recommendations that will allow us all to live in the style to which we aspire, or have become comfortable with.

If you have a hot stock or investment tip, it would be most helpful if you would include the current price on the day you are recommending. Over time, this will allow readers to look back in history to see how some of your pics have performed.

[deepthroat]

I'll start with my 3 favorite current holdings:

APPLE - AAPL - current price $599.41

I was lucky enough to get into Apple a few years back at around $200 per share. All those shares have been sold when I purchased my new house last year, but I did another buy at $312 which I'm still holding. Analysts believe it's poised to begin another run up - some say $750, others are shooting for the moon at $1100. I'm holding and would accumulate more if I had some capital available.

ORACLE - ORCL - current price $29.97

I just started a position here, thanks to a recommendation from another member of this board. Got in 30 days ago at $26.72 so I'm already up 12% in a month. Thanks Puchailaw! Current price target is around $36 in next year.

FORD - F - current price $9.60

This is the only dog in my portfolio, but I'm convinced it won't remain this way forever. Bought it at $13.36 so I'm down nearly 30% in 2 years. My gut tells me this is a great long-term hold.

[TEXASMAC]

DT, keep the Ford. I actually received some form an aunt back in the 70's and I have rode it since then.Since to me it was free I had nothng to lose. It paid for 2 years of college, failed marriage and still has kept me afloat. expect by summer of 2013 it will be in low 30's. I will then dump mine.

[pdogg]

I'm not trying to hit home runs. I like Steady Eddies with yields that compare favorably with bank rates. If interest rates stay low but the economy continues to struggle these investments should do fine.

One example is Con Edison, the New York utility, with the limp dicked ticker ED.

Another example is the Fidelity Ginnie Mae Fund, ticker FGMNX. Ginnie Maes are 100% guaranteed against default by the the federal government. However there are other risks such as prepayment risk and also the risk of future higher interest rates.

Some are seduced by the promise of huge returns, see below two examples from The Nation:

Police have arrested 15 foreigners, most of them hailing from Europe, for allegedly running a call-centre scam and duping several people into wiring more than Bt320 million into their accounts.

Of the suspects, six are British, two American, two Romanians, three from the Philippines, one German and one South African national. The suspects were arrested recently at a flat in Sukhumvit Soi 13, where they ran the scam based on bogus stock-market trade. The suspects usually worked from 1pm to midnight - the period most stock exchanges overseas operated.

Police said that most of the victims were Westerners, who were advised by the suspects - posing as independent brokers - that they could make 95 per cent profit from their investment in exchange for a 25-per-cent cut. The suspects had allegedly opened a bank account in Switzerland, which they used to transfer money to Malaysia-based accounts and then on to Thailand.

Meanwhile, police arrested a Liberian national and a Guinea national for duping an American into buying a magic potion for Bt147,000, which could allegedly turn US dollar bills of a lower denomination into $100 bills. The victim notified police after the suspects demanded another Bt1 million in exchange for the key to a safe deposit where the remainder of the potion was kept.

http://www.nationmul...d-30185679.html

[deepthroat]

Agreed - dividend securities are a great strategy for reliable income generation.

I'm still digging the "home run" securities, but with increased reward there is always increased risk and vice versa.

At some point in the near future, I will want to convert many of my growth funds into income funds, which is when the dividend securities will become a great option for me to learn more about.

Another member of this forum was encouraging me to look into REITS, and swears by them himself. My initial research showed them to be riskier then I felt comfortable with at this point, as some REITS funds have gone bankrupt in the recent past.

Definitely a topic I would like to learn more about and would enjoy seeing more discussion of here in this thread in the future.

[deepthroat]

One other thing I will add; I believe the standard benchmark for long-term stock fund average growth levels is somewhere around 5 1/2 to 7% per year, averaged over many decades.

Thus, any time someone recommends an investment vehicle that they claim has anything greater than a 7% annual return with no risk, that's an immediate red flag in my mind. That's like a perpetual motion machine of investment vehicles; it just doesn't exist in reality and bends the laws of economics.

[Hefe]

I think that for 98% of us punters out here the best investments are mutual funds, or etfs, based around benchmarks for a diverse group of sectors. Having lost enough $$$ in stocks to have put me through a few years at Harvard Business School now, I think there are just a very few Blue Chip stocks worth owning for the individual investor of modest means who is working a full time job, and they have to be bought at a low point (Apple, Berkshire Hathaway, Coca Cola, McDonalds, Exxon).

No matter how good the stock seems, unknowable (to us) events could gut our retirement savings. Look at at Nokia, Rim & recently JP Morgan. JPM is probably worth buying now..... but who knows what other monkey business will be exposed that they have hidden from us? RIM & NOK were rock stars a couple of years ago, now they are lead balloons.

I absolutely believe that by dollar (or euro) cost averaging into major sector funds that are run by low cost outfits like Vanguard, buying into them when the sector is out of favor, there is little question a younger person could retire a millionaire if they stay the course & maximize all contributions once the kids are gone from home. Slow & steady wins this race.

The secret is when one reaches a certain critical mass of holdings in later age, say $400K, compounded interest & steady contributions really start ratcheting thing up: $400K @ 6% = 424K , + 25K contribution = $449K for that year... & so it goes, some years better, some years worse.

[SiamSam]

Good advice Hefe. Slow and steady is tough to sell to youngsters.

[deepthroat]

I think that for 98% of us punters out here the best investments are mutual funds, or etfs, based around benchmarks for a diverse group of sectors.

I absolutely believe that by dollar (or euro) cost averaging into major sector funds that are run by low cost outfits like Vanguard, buying into them when the sector is out of favor, there is little question a younger person could retire a millionaire if they stay the course & maximize all contributions once the kids are gone from home. Slow & steady wins this race.

The secret is when one reaches a certain critical mass of holdings in later age, say $400K, compounded interest & steady contributions really start ratcheting thing up: $400K @ 6% = 424K , + 25K contribution = $449K for that year... & so it goes, some years better, some years worse.

Agreed. My single largest (and most profitable long-term) holding has been the Contra fund. This is a Fidelity mutual fund that I have been purchasing for many years as part of my 401(k) holdings with my employer.

Contra is short for contrarian fund, which means that it purchases funds or sectors that have been overlooked or have taken a beating.

[pdogg]

RIM & NOK

low cost outfits like Vanguard,

Everyone says NOK is good in bed and as for RIM

Seriously folks , my brokerage account is with Fidelity.....I'm extremely pleased with their website and customer service.

The Vanguard Ginnie Mae Fund has a slightly lower expense ratio than Fidelity's. The Vanguard Fund is not NTF thru Fidelity and I don't want another brokerage account, actually I have another with Ameritrade, opened it to get 25K FF miles.

So I try to rationalize the higher ER by thinking since Vangaurd seems to believe so strongly in index funds so that they probably don't attract the best portfolio managers so "maybe" the Fido manager can make up for the higher ER.

[zaronxas]

Three recos I would throw in there are:

iShares Australia ETF (NYSE-EWA) - its current price is $21.81 and has a healthy 5% dividend. I like this because this country is riding a massive resource boom that's kept the country growing for more than 20 years. Moreover it gives exposure to the Aussie dollar which has almost doubled in value against the US$ in the last 10 years, that in itself is a pretty good return.

Seadrill Ltd. (NYSE-SDRL) - its current price is $36.57 and has a 8.9% dividend. Oil is the quintissential industrial commodity, so barring a complete worldwide economic collapse, oil service companies are going to continue cleaning up as finding new oil requires more drilling.

Spider Gold Trust ETF (NYSE-GLD) - its current price is $154.14, no dividend. This is an etf that buys and holds gold. I like gold for a number of reasons but the top one is that Europe and the US are both indebted to their eyeballs. The only way they'll work their way out of this debt problem is by devalueing their currencies -- by printing more, keeping real interest rates negative, etc. That's going to push up gold - the only hard currency that can't be devalued away. Indeed, gold may start a run soon as I think the Federal Reserve and maybe the ECB are both going to start printing more money soon.

[deepthroat]

I'll start with my 3 favorite current holdings:

APPLE - AAPL - current price $599.41

I was lucky enough to get into Apple a few years back at around $200 per share. All those shares have been sold when I purchased my new house last year, but I did another buy at $312 which I'm still holding. Analysts believe it's poised to begin another run up - some say $750, others are shooting for the moon at $1100. I'm holding and would accumulate more if I had some capital available.

ORACLE - ORCL - current price $29.97

I just started a position here, thanks to a recommendation from another member of this board. Got in 30 days ago at $26.72 so I'm already up 12% in a month. Thanks Puchailaw! Current price target is around $36 in next year.

FORD - F - current price $9.60

This is the only dog in my portfolio, but I'm convinced it won't remain this way forever. Bought it at $13.36 so I'm down nearly 30% in 2 years. My gut tells me this is a great long-term hold.

 

Thought I'd update this. I've held onto Apple, even as it went to $700 and then back down to $500. I believe it's oversold - that many portfolio managers had to sell before year-end to lock in profits for 2012 - and that it will start going back up, so I bought another few shares this morning. It's up to nearly $550 again ($40 rise in past 2 trading sessions). I think it's good to go back to $700, some are now suggesting $1,000 and a couple of wackadoos are even saying $2000 within a couple of years. I'm doubtful but still think it has room to run.

 

Ford - it finally got back this morning to just about where I bought it 2 years ago. Hopefully this is the beginning of the spiral UPWARD again. I still think it's underpriced but for the long-term, not necessarily short-term.

 

Oracle - this has been a home-run, thanks again to Puchaiwala for the suggestion! (Where did that guy get to anyway?). It's up 30% from where I bought in 6 months ago.

 

My other recent purchase was a few shares of Costco. 

 

I believe 2013 could be a banner year for stocks (as long as the feds don't fuck things up in the next couple months with debt ceiling nonsense) and that in the near-future, we'll could possibly see a collapse in the bond market. 

[Tomas]

Buy buy buy Take-Two Interactive (TTWO: Nasdaq GS)

 

They will sky rocket late spring, and then sell sell sell.

[deepthroat]

Another stock I'm considering is Sherwin Williams. They're a major housepaint manufacturer, with falling raw materials costs and a rapidly expanding market as new home sales and refurbishing is becoming a booming business again.

[azza33]

Despite everyone's concern with the good old USA, its very interesting to note where the US indices sit versus the Australian markets. (non adjusted for currency valuations)

The so called booming Australian economy sees the All Ordinaries index at 4800 well below the peak of 6700 level in 2007.

 

I personally have found it difficult to see the Australian market growing strongly so whilst i've been mildly bullish over the past 6 months, since the coppock indicator gave its usual perfect entry signal, I haven't really gone long physical shares at all.

Instead i've been writing naked put options over about 10 different stocks.

 

Most most profitable trades have been naked puts over the retail sector... anyone who follows the Austalian economy may just be scratching their heads at that notion.

[azza33]

One other thing I will add; I believe the standard benchmark for long-term stock fund average growth levels is somewhere around 5 1/2 to 7% per year, averaged over many decades.

Thus, any time someone recommends an investment vehicle that they claim has anything greater than a 7% annual return with no risk, that's an immediate red flag in my mind. That's like a perpetual motion machine of investment vehicles; it just doesn't exist in reality and bends the laws of economics.

 

 

It's possible to far exceed the 5.5-7% return you have indicated here without multiplying the risk.

 

The major problem with funds managers is they are required to be invested at all times in the market.

 

Smaller investors like us can manage our own money and move in and out of the market as we see fit.

 

The fact that we are small and more flexible means we can generate better returns.

 

It also gives us greater control over individual risk on any transaction.

 

The trick to exceeding normal returns is to have an edge in the markets.

[pdogg]

Smaller investors like us can manage our own money and move in and out of the market as we see fit.

 

 

 

The trick to exceeding normal returns is to have an edge in the markets.

 

Being small and nimble means we can quickly exit a postion without significantly moving the price of a stock.

 

Guess the more difficult part is exactly how do we get the Edge?

[rxpharm]

For the intermediate to mid-term, I would recommend GE - now some of you may scoff at that, but as part of the last effort to avoid the financial cliff there was a prolonged extension (no expiry date) of the tax credits for wind turbine power. GE is well poised to take advantage of this, plus has a very large amount of cash to put to work for acquisitions this coming 2 years or so. It also pays a reasonable dividend.

[azza33]

Being small and nimble means we can quickly exit a postion without significantly moving the price of a stock.

 

Guess the more difficult part is exactly how do we get the Edge?

 

The "edge" is nothing special in reality. It's not a holy grail, nor is it a system that's 100% right all  the time.

 

An example is during a bear market in ASX... when to get back in? Use the Coppock indicated on a monthly chart - It never fails.

 

Perhaps something as simple as money management gives you an edge - the ability to take a loss at a predetermined level on every trade and sticking to the game plan. I think my mate who dropped $50k the other night on Japanese Yen is wishing he had more discipline.

 

Using the 200 day XMA (Expontential moving average) on the overall market to decide to be active or not.

 

The triple screen trading method for short term reversal by Dr Elder is a great trading method. He called Apple at $700 going back to $500 and was on live tv showing why the tehnicals showed is would.

 

Using the NH-NL (new high new low) index to determine the momentum of the market and the likelyhood of a contination or reversal of a major trend. (PS just now i believe the NH-NL index on sp500 is flashing caution)

 

These are 5 simple examples of getting an "edge" over a manger of money that is close to 100% invested all the times.

[azza33]

For the intermediate to mid-term, I would recommend GE - now some of you may scoff at that, but as part of the last effort to avoid the financial cliff there was a prolonged extension (no expiry date) of the tax credits for wind turbine power. GE is well poised to take advantage of this, plus has a very large amount of cash to put to work for acquisitions this coming 2 years or so. It also pays a reasonable dividend.

 

I was a big fan of GE when it was $16...

[pdogg]

Think Apple is the one stock that interests the most LBR Members.

 

Here's a good article about Apple's cash stockpile.  

 

FEBRUARY 12, 2013, 4:55 PM

Unusual Moves in Confronting Apple’s Mountain of Cash

 

By STEVEN M. DAVIDOFF

The fight over Apple's $140 billion cash pile is proving the adage that money can make people do strange things.

 

And it is not just Apple that is doing things it would not have done before. The hedge fund manager David Einhorn, famous for shorting stocks like Lehman Brothers, has gone long on Apple, betting heavily that Apple's stock is undervalued - and blaming that eye-popping mountain of money.

 

While most of us would think that having tens of billions would be wonderful, it's actually a problem for Apple. The money just sits there, not earning much in an environment of extremely low interest rates. And the problem is only getting worse. Apple is accumulating money at an enormous rate - more than $23 billion in the last quarter alone.

 

It was a more manageable issue when Apple was a rapidly growing stock, but since September Apple's share price has fallen to roughly $470, from over $700.

 

According to Mr. Einhorn, roughly $145 of that share price represents Apple's cash mountain. This means that the market is assigning a low multiple, about seven times earnings, to the rest of Apple's business.

 

Multiples for Google are almost three times as much. Apple's multiple is even less than Microsoft's - a company whose revenue largely comes from PC operating software, which some people worry is a melting iceberg.

 

When it came to the buildup of cash, Steven P. Jobs, Apple's co-founder and former chief executive, simply ignored a problem he had helped create. Mindful of Apple's past financial difficulties before his return in 1997, he wanted a fortress of cash to protect the company. So he drew a line in the sand, saying no to dividends. After his death, Apple caved a little, announcing a dividend and share repurchase program worth $45 billion.

 

It's still not enough for shareholders who want to increase Apple's multiple and stock price. The fundamental idea is that shareholders could put this money to better use than Apple can, and that its stock would trade higher without the cash.

 

The problem is that even if Apple wanted to return all its cash to shareholders, it can't. Much of the cash is held abroad in foreign subsidiaries. If the company repatriates it to return to shareholders, it would have to pay taxes on it. Instead, the company is letting the cash sit there in the apparent expectation that there will be federal tax relief.

 

It's here that Mr. Einhorn enters the picture. He has been buying Apple shares for a few years, and his fund owns more than 1.3 million shares. The hedge fund magnate wants Apple's stock to earn a higher multiple by dealing with the cash problem.

 

But Mr. Einhorn is also impatient and unwilling to wait for federal tax relief. Instead, he has a clever idea. At an investment conference last May, Mr. Einhorn proposed that Apple issue $500 billion of perpetual preferred stock free to all shareholders. The preferred stock would yield 4 percent and be freely tradable.

 

So, how will this increase the value of the company? It's financial wizardry. If Apple issued debt, the market would be expected to subtract this value from Apple's worth. But the preferred stock would not be treated as debt, for accounting purposes at least.

 

The only change would be that Apple's income would be reduced by the amount of the interest paid on $500 billion, or $20 billion a year. If Apple stays at the same multiple, it would give the company a net worth of $300 billion or so. But now the $500 billion in preferred stock would be added, making the company worth $800 billion.

 

How can one plus one equal four? It depends on whether the market thinks that the $500 billion is not debt and never has to be repaid. If so, then this amount will not be deducted from Apple's worth. It's something that may work in theory in our sometimes puzzling financial markets, but no company has ever tried it.

 

Some experts are skeptical. Aswath Damodaran, a finance professor at New York University, has called the plan financial alchemy and written that it would "not add value to the company, not one cent." When asked to comment, Mr. Einhorn said, "Professor Damodaran's analysis brings to memory the old joke about the economist who refused to pick up a $100 bill on the street because in an efficient economy, there can't be $100 bills lying around."

 

Apple's response to Mr. Einhorn has been equally clever. One would think that the maker of the iPad would just sit above the fray and do what it has traditionally done - ignore its shareholders. But with a declining stock price, that may no longer be a luxury Apple can afford. So, it has engaged with Mr. Einhorn to discuss his proposal. And the notoriously shareholder-unfriendly company has turned strangely in favor of good corporate governance.

 

In its latest proxy statement, Apple proposes to amend its charter to allow for election of directors only by a majority of shareholders. It also proposes to eliminate a provision called "blank check preferred," which allows a company to issue preferred shares in unlimited number and type. Almost every company has this provision, but shareholder activists hate it because it can be used as a takeover defense, allowing a company to issue preferred stocks with significant voting rights to a friendly party.

 

While the proposal to eliminate the preferred shares appears worthy and has been endorsed by the California Public Employees' Retirement System, the giant pension fund, this proposal is really about Mr. Einhorn.

 

The amendment has the convenient effect of eliminating the board's ability to adopt the hedge fund magnate's plan. Apple says that it just wants to be a good corporate citizen and shareholders can still vote to adopt Mr. Einhorn's plan. But let's face it, Apple would be one of the few companies in the United States to ever abolish its blank check preferred provision.

 

Apple has not been a paragon of corporate governance. That may not be surprising, given that its board has directors like Millard S. Drexler of J. Crew, who surreptitiously took his company private. And Apple has received negative marks in recent years from proxy advisory firms like Institutional Shareholder Services for giving its chief executive, Timothy D. Cook, almost $400 million in stock options in one year.

 

It's an odd state of events.

 

By all accounts, it would appear to be a topsy-turvy world. Apple has turned defensive, while Mr. Einhorn is picking a public fight with a company he is betting on, instead of betting against.

 

Perhaps this column should have instead started with an adage from the movie "Wall Street" that money "makes you do things you don't want to do."

 

Yet Apple is not doing itself any favors by trying to do an end run around Mr. Einhorn.

 

He has sued Apple, claiming that the company's proposal violates the securities laws, but the dispute is "a silly sideshow," as Mr. Cook put it on Tuesday. Even if Mr. Einhorn wins, it would only force Apple to have a separate vote on the preferred share issue, something it is likely to win.

 

Even so, it might be better if Apple simply addressed Mr. Einhorn's proposal head-on. After all, his proposal is clever, but untested. It may work, but it may not. Why should the world's most valuable company be run as an experiment in finance?

 

Still, the world is changing. Apple may be a highflier, but its growth prospects are not as exciting as they seemed to be a year ago. Its stock may simply be deflating from an overheated place.

 

And that's the oddest thing of all. Despite Apple's growing cash pile, the company's value is shrinking. But instead of focusing on making Apple an even better business, shareholders are trying to rescue their bubblelike bets with financial gimmickry, and Apple is engaging in its own gimmicks to defeat them. Even Apple can be consumed by the strange world of Wall Street.

[JaiDee]

This article is a few months old but shows the discrepancy between AAPL and Amazon;

 

http://tech.fortune.cnn.com/2012/11/03/amazons-price-to-earnings-ratio-is-now-2767-apples-is-13/

 

  Apple's P/E is even lower now, at 7 ....which is absolutely ridiculous.  I remember people were screaming "buy" when it was at 14 or 15 and are now sitting on the sidelines at 7?  WTF? 

 

  I have been long AAPL since the spring of 2011 and the recent dip [went from 705 a share to 435 in 4 months - ouch] has been driving me nuts, after a more than 50% gain during that time span.  The problem is, they have nothing new in the pipeline to excite Wall street and everyone and their brother now have tablets, making the Ipad less unique. Smartphones are now ubiquitous all over the world as well, and Samsung has a lead there which they will most likely never relinquish. An Apple TV would excite the fanboys, but at a projected $2000 bucks a pop the average consumer won't go near it, not when you can  by a gorgeous 55-inch TV from Sanyo or Samsung for under $800. Rumors of a holographic TV would excite the press, but again, for 2 grand?

 

     From the 'woulda-coulda-shoulda' department, I have been keeping an eye in Zynga [znga], the company who makes Farmville and Cityville and many other games and is tied in directly with the rise and fall of Facebook. They launched last May at 9,  quickly went to 15, and then tanked as far as 2.09 in recent months, where I was saying to myself "I should get into these guys, they have hit bottom".  Well, to be honest I was saying that at 5, 4, 3 AND 2.09......who the hell knows when a company has hit their bottom?  Today they are up 58% since that low just 3 months ago; ugggghhh.

 

    Wall street; not for the feint of heart.

[zaronxas]

I think there are some reasonable tech value plays out there.

I picked up some HP when it was hammered down to $12 a share couple of months back due to its soured takeover of Autonomy. I have ridden it up to $17 -- it's still got a decent dividend too boot at ~3%.

I am eyeing Intel now since it's got a 4% dividend and is still throwing off cash like a Japanese punter in a gogo bar. It's been hit by declining computer sales but I think it's going to make some good headway into smartphone and tablet chip markets later this year.

That said, I am gunshy about getting into the market right now as I think they've run up too much and are due for a correction.

[stumblebiscuit]

Being a retired old man, I don't risk my money on individual stocks. I built my own IRA Mutual Fund portfolio with money from a rollover from my company 401k about 3 years ago. I did go a little heavier into stocks than is recommended for someone my age. I figured since I am getting a pension as well, I could afford a little risk. I've had a 27% gain in those 3 years. Not sure how that compares to the overall market, but I'm pleased with it. For me diversification is the way to go.

[deepthroat]

Being a retired old man, I don't risk my money on individual stocks. I built my own IRA Mutual Fund portfolio with money from a rollover from my company 401k about 3 years ago. I did go a little heavier into stocks than is recommended for someone my age. I figured since I am getting a pension as well, I could afford a little risk. I've had a 27% gain in those 3 years. Not sure how that compares to the overall market, but I'm pleased with it. For me diversification is the way to go.

What funds are you picking? I'm pretty happy with the Fidelity Contrafund, my largest 401k holding, and recently moved some money over into an emerging markets fund - Lazarus if memory serves. My company 401k is fairly limited in their offering but it's provided decent returns depending on my mix of funds at any one time.