While The Dollar Rises, Multinationals Dive

Pop quiz: What do these four companies have in common?

  • Caterpillar (CAT)
  • Deere (DE)
  • Dr Pepper Snapple Group (DPS)
  • Harley Davidson (HOG)

I’ll give you a hint: If you run these stocks through Portfolio Grader, you’ll see that not a single one passes the Louis litmus test. Both DE and DPS are currently holds, HOG is a D-rated sell and CAT outright flunks with an F-rating. The fact is that institutional investors have been unloading these stocks over the past month. And it will take a significant reversal in buying pressure before you can get a buy recommendation out of me for any of these stocks.

But these four companies have something else in common—while each is based in the United States, each has a huge global footprint. Caterpillar serves customers in 180 countries. John Deere is redefining itself from an all-American company to a major player in emerging markets. Dr Pepper has big plans for the Caribbean and Mexico. Harley Davidson now has more international dealers than U.S. dealers.

And while this would have been great news as recently as 2012, 2013 has brought some big challenges for American multinationals, most notably the fluctuation in the U.S. dollar. As I mentioned last week, the relatively strong U.S. dollar is pinching overseas profits of multinational companies. This pinch is going to be felt particularly hard by shareholders: 40% of the S&P 500’s sales are outside the U.S.

So over the next few weeks I urge that you take a close look at your holdings and see how many multinationals you own. For the most part, sticking to domestic bets will help you ride out these currency fluctuations.

A good place to start is by reviewing the 30 big blue chips that were just upgraded and downgraded this week. If you hold any of the stocks below (many of which are multinationals), you may want to take note because they are making big moves.


Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ABT Abbott B B
CERN Cerner B B
DIS Walt Disney B B
EPD Enterprise Products Partners B B
ICE IntercontinentalExchange B C
KEY KeyCorp B C
LTD L Brands B C
NGG National Grid PLC B C
NU Northeast Utilities B B
SCHW Charles Schwab B C

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
CF CF Industries D C
COP ConocoPhillips D C
CTL CenturyLink D B
KO Coca-Cola D C
PXD Pioneer Natural Resources C C
USB U.S. Bancorp D C
YUM Yum! Brands C C


Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BAC Bank of America B C
MSI Motorola Solutions C B
PGR Progressive C C
SNDK SanDisk C B
TTM Tata Motors C C
WLP WellPoint C B

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
AGU Agrium D C
APC Anadarko Petroleum D C
MBT Mobile TeleSystems D C
PLD Prologis D C
VIV Telefonica Brasil D C

Article printed from InvestorPlace Media, https://investorplace.com/2013/06/while-the-dollar-rises-multination-abt-cat-de-dps-hog-dive/.

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