Top 5 Blue-Chip Stocks to Buy

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number 5 dollar billThere are two big trends that investors should be aware of right now: A resurgence in retail stocks and spending and the stability of the health care sector amid volatility.

On the spending front, back-to-school shopping was only the tip of the iceberg. With the holiday retail season fast approaching, these companies should enjoy tremendous top- and bottom-line growth. As I wrote recently, the upcoming holiday shopping season should provide a big jolt to the economy — and to specialty retailers, tech stocks and others.

As for health care, biotech and pharmaceutical stocks continue to develop incredible cures that save patients and improve their quality of life. While some sleepy Big Pharma stocks continue to face patent expirations, on the other side of the coin are the innovators coming up with new medications — or efficient ways to crank out generic drugs at rock-bottom prices.

These two sectors are your best bet for blue-chip stocks right now. And if you’re looking for specific picks, here are my five favorites:

Alexion Pharmaceuticals Inc.

Alexion Pharmaceuticals Logo Alexion Pharmaceuticals Inc. (NASDAQ:ALXN) is a key player in the biotech industry — a pocket of the market that has been remarkably resilient to market uncertainty. The stock is trading about $5 lower than its 52-week high of $70.20 and on Oct. 20 announced stunning sales and earnings growth that trumped analysts’ expectations across the board. Compared with the same quarter last year, sales bolted 44% from $141.6 million to $204.1 million. Analysts predicted $198.9 million in sales, so the company posted a 3% sales surprise. Over the same period, net income shot up 54% from $47.2 million, or 25 cents per share, to $72.6 million, or 37 cents per share. The analyst community forecast earnings per share of just 29 cents, so Alexion posted a whopping 28% earnings surprise!

Autozone Inc.

AutoZone AZOAutoZone Inc. (NYSE:AZO) is the perfect stock for the current automobile market. Consumers are buying new cars when they need them, but they are extending the lives of those vehicles and are trying to get more mileage out of their vehicles. Companies like AutoZone supply the parts to keep well-worn cars in top condition. AutoZone announced its Q4 earnings in September, so the company will not report earnings again until early January. However, analysts already are optimistic about the company’s prospects, predicting 17.5% earnings growth (compared with the 11% industry average) and 6% sales growth.

Dollar Tree Inc.

Dollar Tree Inc. (NASDAQ:DLTR). When the markets turn sour, savvy investors bargain-hunt, and when there are fears of a double-dip recession, smart shoppers visit discount retailers like Dollar Tree. Dollar Tree is doing so well that it announced a $1.5 billion share repurchase program on Oct. 11 in addition to an ongoing $500 million stock buyback program. This prompted analysts to raise their price targets on this tremendous stock. Dollar Tree is not slated to announce earnings until Nov. 17, so there’s plenty of time to load up on shares of this premium stock. Analysts currently expect year-over-year sales to climb 10% and earnings to jump 14%.

Perrigo Company

perrigoLogo_185Perrigo Company (NASDAQ:PRGO) is the world’s largest manufacturer of OTC pharmaceutical products for the store brand market. The company operates four divisions, namely Consumer Healthcare, Nutritionals, Rx Pharmaceuticals and Active Pharmaceutical Ingredients. Together, these divisions cover everything from smoking cession products to infant formula and prescription shampoos.

On Oct. 27, Perrigo announced earnings per share of $1.10 that beat analyst estimates of $1.03 and represented 27% earnings growth compared to the same quarter a year ago. The company also raised full-year fiscal 2012 guidance to $4.65 to $4.80 per share, which would be an increase of 16% to 20% compared to fiscal 2011 EPS.

Ross Stores Inc.

RossLogo_185Ross Stores Inc. (NASDAQ:ROST) is a bargain clothier that doesn’t just keep analysts guessing; it also blows away its own estimates! In July, Ross reported that same-store sales rose 5%, beating analysts’ estimates. Then again, on Oct. 10, the company announced that same-store sales rose 5% in September, trouncing the company’s estimate that sales would increase 1% to 2% over that period. Because of this tremendous turnout, Ross recently bumped up its Q3 estimates. Ross will announce earnings Nov. 7; the consensus estimate is calling for 8% sales growth and 14% earnings growth.


Article printed from InvestorPlace Media, https://investorplace.com/2011/11/top-5-blue-chip-stocks-buy-alxn-azo-dltr-prgo-rost/.

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