Earnings, Dividends Make These Stocks Stand Out
October began with a dramatic sell-off to 1,174 on the S&P 500. But a partial resolution of the financial crisis inEurope and the possible avoidance of contagion among EU members resulted in a dramatic rally of 11% and a reversal of the near-term and intermediate-term trends. And the fact that over 60% of the S&P stocks reporting Q3 earnings beat estimates helped as well.
Although the bear market is still intact, the 11% gain in the S&P 500 caught many investors by surprise and created a short-covering rally that has cut 70% of shorts from the market. October ended with sharp profit-taking and indications that the euro deal may have some flaws.
Volatility remains high, so investors should concentrate on stocks that have shown strength in earnings and price. They should also use the high volatility to their advantage to buy them at reasonable prices. Here are your top stocks to buy for November:
Top Stock to Buy #1 — Abbott Laboratories (ABT)
Abbott Laboratories (NYSE:ABT), a major life sciences company and pharmaceutical and diagnostic products manufacturer, was recently upgraded by S&P to a “four-star buy.” It increased its target to $61 from $58. It is estimated that Abbott’s growth rate will increase to 10% through 2012, and earnings for 2011 are estimated at $4.66.
The company plans to spin off of its research-based pharma business, which should benefit both companies and shareholders. ABT pays a dividend of $1.92 for a current yield of 3.5%.
Technically ABT broke from a triple-top just below $54 after very heavy accumulation, which gives a target of $62. Buy ABT under $54.
Top Stock to Buy #2 — Buckeye Technologies (BKI)
Buckeye Technologies (NYSE:BKI) is the world’s largest manufacturer of cellulose-based specialty products made from wood and cotton utilizing wetlaid and airlaid technologies.
Several analysts have recently focused on BKI because of the company’s unexpected gains and strong financial report. Q3 earnings were 74 cents versus a consensus of 34 cents, and sales rose 19%. Furthermore, the company recently announced the building of new facilities to handle the demand for its products.
S&P raised its price target to $33 from $29, but the break from $30 on high volume yields a technical target of $38. Since there is a small gap in price at $27.50 to $28, try to buy below $28. Buckeye’s products are in high demand, so long-term buyers could achieve a possible double within two years.
Top Stock to Buy #3 — EQT Corporation (EQT)
EQT Corporation (NYSE:EQT), formerly Equitable Resources, is an energy company that produces natural gas chiefly from the Appalachian Basin. EQT reported Q3 earnings of 45 cents, beating consensus earnings of 40 cents. Revenues were higher and expenses lower, while operating revenue showed a 30.8% gain year-over-year. Analysts’ future estimates were increased across the board.
The stock traded in a narrow bull channel until July, when it broke higher to a new range of $50 to $65. In late October, it popped above $70, but with the news of better earnings now digested, it could pull back under $65, its buy point. The target for EQT is $80, and the stock pays a dividend of 88 cents for a current yield of 1.3%.
Top Stock to Buy #4 — Perrigo Co. (PRGO)
Perrigo Co. (NASDAQ:PRGO), a global health care provider of generic prescription drugs, nutritional products and medical diagnostic products, fell short of analysts’ Q1 estimates due to acquisition costs. But analysts raised full-year earnings estimates by 15 cents to $4.65 to $4.80 a share and the price target to over $110.
The stock has a history of strong support at its 200-day moving average and bullish support line at $85. A break above $100 could easily support the fundamental target of $110-plus. Buy PRGO under $90.
Top Stock to Buy #5 — World Fuel Services Corp. (INT)
World Fuel Services Corp. (NYSE:INT) markets and distributes aviation, marine and land fuel products. The company beat analysts’ earnings estimates for Q2 by a wide margin and is expected to earn $2.61 in 2011, $2.95 in 2012, and $3.30 in 2013. INT extended its $800 million revolving credit facility to 2016.
This little-known stock has a record of steady growth, and Credit Suisse has a price target of $46, which could be adjusted higher. Technically the stock appears to be forming an inverse head-and-shoulders formation. A break from its current high at $42 could pop this stock $10. Buy INT under $40.
Top Stock to Buy #6 — Yamana Gold (AUY)
Large-cap Toronto-based miner Yamana Gold (NYSE:AUY) made a high at just over $17 in early September, but fell back as gold retrenched. AUY has been my favorite gold miner since early this year. The stock is also a favorite of Wall Street analysts with 10 of 15 having a “buy” or “hold” on the stock.
My price objective for the year is $18, and with a renewed interest in gold, AUY could have another run at its high before the end of this year. Buy the stock at $15 or lower. AUY pays an 18-cent dividend for a current yield of 1.1%.