8 Strong Growth and Value Ideas With Upside Potential

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 |  Includes: DOV, ETE, LB, PH, ROK, SLM, SUG, TIF, WMB, WYN
by: David Alton Clark

These eight stocks have positive catalysts for future growth, three or more recent consecutive non-negative earnings quarters, above industry average payout ratios, are up significantly over the last 52 weeks and some pay a dividend. These are bullish indicators regarding a stock's possible future performance. Moreover, several have recent upgrades and positive analyst comments.

Nonetheless, this is only the first step in finding winners for your portfolio. Now that we have cut the wheat from the chaff, let's take a closer look to distinguish the driving factors behind these remarkable statistics and ensure the stories are intact.

Below is a detailed table with statistics regarding these stocks' summary information followed by a brief review of each company, a summary of current analysts' estimates and up/downgrade activity followed by a chart of the company's key statistics.

Summary Statistics

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Company Reviews

Tiffany & Co. (NYSE:TIF), through its subsidiaries, engages in the design, manufacture, and retail of fine jewelry.

Tiffany recently announced two changes in responsibilities among its executive officers, effective immediately. Patrick F. McGuiness, 45, has been appointed senior vice president and chief financial officer. James N. Fernandez, 55, has been appointed to the newly-created role of chief operating officer.

Michael J. Kowalski, chairman and chief executive officer said,

"These two executives have both developed first-class finance and operations functions, and I consider this to be a natural progression consistent with the Company's continuing organizational development."

The company is trading on par with analysts' estimates. TIF has a median price target of $81 by 19 brokers and a high target of $109. The last up/downgrade activity was on Jun 24, 2011, when HSBC Securities downgraded the company from Overweight to Neutral.

Rockwell Automation, Inc. (NYSE:ROK) provides industrial automation power, control, and information solutions. It operates in two segments, Architecture & Software and Control Products & Solutions.

Rockwell recently reported fiscal 2011 second quarter revenue of $1,464.1 million, up 26 percent from $1,164.5 million in the second quarter of fiscal 2010. Currency translation contributed 2 percentage points to the increase. Fiscal 2011 second quarter net income and income from continuing operations were $166.4 million or $1.14 per share, compared to income from continuing operations of $111.9 million or $0.77 per share in the second quarter of fiscal 2010. Last year, second quarter net income was $137.0 million or $0.95 per share, including $25.1 million or $0.18 per share from discontinued operations.

The company is on par with analysts' estimates. ROK has a median price target of $92 by 14 brokers and a high target of $116. The last up/downgrade activity was on Jun 10, 2011, when HSBC Securities downgraded the company from Overweight to Neutral.

Wyndham Worldwide Corporation (NYSE:WYN) together with its subsidiaries, provides various hospitality products and services to individual consumers and business customers in the United States and internationally.

Wyndham Worldwide recently announced that its securitized timeshare receivables conduit facility was renewed through June 2013. The two year facility bears interest based on variable commercial paper rates plus a spread or the LIBOR rate plus a spread and has capacity of $600 million. The current 364-day facility was due to expire at the end of September 2011. "We are pleased that our conduit is now structured as a two year facility, which further strengthens our liquidity and balance sheet position," said Tom Conforti, Chief Financial Officer, "The extended term highlights the broad support enjoyed by our timeshare ABS program."

The company is trading below analysts' estimates. WYN has a median price target of $41 by 10 brokers and a high target of $50. The last up/downgrade activity was on Dec 15, 2010, when Avondale initiated coverage on the company with a Market Outperform rating.

The Williams Companies, Inc. (NYSE:WMB), through its subsidiaries, engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States.

Williams recently announced that it has proposed to acquire all of the outstanding shares of Southern Union Company (NYSE:SUG) for $39.00 per share in cash, for a total enterprise value of $8.7 billion. Williams conveyed the all-cash, premium proposal via a letter to the Special Committee of Southern Union's Board of Directors. Williams' all-cash proposal represents a premium of 18% over the nominal purchase price in Southern Union's proposed transaction with Energy Transfer Equity, L.P. (NYSE:ETE).

The company is trading significantly below analysts' estimates. WMB has a median price target of $36 by 7 brokers and a high target of $39. The last up/downgrade activity was May 12, 2010, when RBC Capital Markets upgraded the company from Underperform to Sector Perform.

Limited Brands, Inc. (LTD) operates as a retailer of womens intimate and other apparel, beauty and personal care products, and accessories in the United States and Canada.

Limited Brands recently reported a comparable store sales increase of 6 percent for the four weeks ended May 28, 2011, compared to the four weeks ended May 29, 2010. The company reported net sales of $717.4 million for the four weeks ended May 28, 2011, compared to net sales of $657.3 million last year.

The company is trading significantly below analysts' estimates. LTD has a median price target of $44 by 15 brokers and a high target of $45. The last up/downgrade activity was on Apr 12, 2011, when Barclays Capital initiated coverage on the company with an Underweight rating.

Dover Corporation (NYSE:DOV) and its subsidiaries manufacture industrial products and components, as well as provide related services and consumables in the United States and internationally.

Dover recently announced that it has completed the previously announced acquisition of Sound Solutions from NXP Semiconductors N.V.

The Board of Directors of Dover Corporation recently declared a regular quarterly cash dividend of $0.275 (27 and one half cents) per share, payable on June 15, 2011 to shareholders of record as of May 31, 2011.

The company is trading below analysts' estimates. DOV has a median price target of $75 by 12 brokers and a high target of $81. The last up/downgrade activity was on Jul 10, 2009, when Deutsche Securities upgraded the company from Hold to Buy.

Parker Hannifin Corporation (NYSE:PH) manufactures fluid power systems, electromechanical controls, and related components.

Parker Energy Products Division (EPD), a division of Parker Hannifin Corporation is introducing their subsea metrology and dimensional control services to the Gulf of Mexico oil and gas market. EPD has demonstrated their success with photogrammetry, surveying and position monitoring services in Northern Europe and Asia Pacific. Recently the division has added technical staff in Houston, Texas to support the metrology service expansion to the Gulf of Mexico.

The company is trading below analysts' estimates. PH has a median price target of $106 by 14 brokers and a high target of $101. The last up/downgrade activity was on Jul 5, 2011, when MKM Partners downgraded the company from Buy to Neutral.

SLM Corporation (NASDAQ:SLM), through its subsidiaries, provides education finance in the United States. The company originates and holds student loans by providing funding, delivery, and servicing support for education loans through its participation in the federal family education loan program and through offering non-federally guaranteed private education loans.

Students who need extra funding for college can take advantage of changes in the law and improvements in the economy that translate into student loans at among the best interest rates in the last five-year period, says Sallie Mae, the nation’s No. 1 financial services company specializing in education.

“The good news for college students is that interest rates on several kinds of student loans are among the lowest in recent history,” says Joe DePaulo, executive vice president, Sallie Mae. “Our ‘How America Pays for College’ national study confirms that students and parents alike value the investment in a college education and are willing to stretch themselves financially in order to make it happen. Sallie Mae advises families to follow our 1-2-3 approach to paying for college so that you do not pay more for college than you have to: first, maximize ‘free money’; second, if you need to borrow, consider federal loans, and, third, fill the gap with responsible private education loans.”

The company is trading significantly below analysts' estimates. SLM has a median price target of $18 by 7 brokers and a high target of $19. The last up/downgrade activity was on Jan 22, 2010, when Ladenburg Thalmann downgraded the company from Buy to Neutral.

Information was gathered from CNBC, Yahoo Finance and respective company websites. Based on the current market conditions I would suggest scaling in to any position to reduce risk. I believe all these stocks provide significant opportunities for long term investors. Please use this information as a starting point for your own due diligence.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TIF, ROK, WYN, WMB, LTD, DOV, PH, SLM over the next 72 hours.