I recently discussed Baker Hughes Inc (NYSE:BHI), BlackRock Inc (NYSE:BLK), Charles River Laboratories International Inc (NYSE:CRL), ConocoPhillips (NYSE:COP) and Sirius XM Radio Inc (NASDAQ:SIRI), which are expected to do very well over the coming year. Today we will talk about five more stocks for big profit opportunities. Each of these stocks offers an interesting investment opportunity due to its unique characteristics.
Energy Transfer Equity L.P. (NYSE:ETE) – The partnership is set to add Southern Union’s assets to its portfolio, offering significant geographic and operational diversification. Southern Union’s large natural gas transportation and storage resources and strong interstate operations are expected to solidify ETE’s position. Combined with earlier acquisition of Lone Star and investments in Eagle Ford and Permian basin, this acquisition will help ETE in providing a full suite and mature midstream services.
ETE's net income for the quarter ended June 30, 2011 was $66.3 million as compared to $19.3 million for the quarter ended June 30, 2010, a growth of 244%. Similarly, revenue grew 45% compared to the same quarter last year. The company looks set to benefit from its additions both in the near and long-term.
Gerdau SA (NYSE:GGB) – The Brazilian steel company has strong fundamentals with a 21% average sales and net income growth rate over the last ten years. The average growth rate of book value per share during the same period was 22%, and the five-year average return on equity is 18%.
Concerns over currency exchange rates in Brazil, inflation and US debt issues have pulled down the prices of stocks in this sector. Gerdau also hit its 52-week low at $6.63, and is still trading at attractive levels. The stock is expected to recover based on its strong fundamentals. Sales grew 12% in the second quarter over the same period last year, reaching 4.9 million metric tons. It’s announced investments in Mogi and Pinda plants, and expected investments in Chile will further boost its production and sales.
Halliburton Company (NYSE:HAL) - This stock is benefited by twin opportunities – one, the ever-increasing demand for energy has, in turn, increased the demand for oilfield services and technology. Two, limited supply and rising prices has made exploration in more challenging onshore oil sources more profitable for savvy operators like HAL. Similarly, interest in unconventional gas development and offshore drilling, including deepwater activity, is rising. This has increased demand for services like hydraulic fracturing, a key offering of Halliburton. With its competitive technology, Halliburton is all set to profit from this huge demand.
Halliburton’s second-quarter 2011 sales were $5.9 billion, 35% higher compared to the same quarter in 2010. The company’s earnings were also higher 54% over the same quarter last year. The company’s average five-year return on equity is solid, around 26%.
The company’s growth in coming years is expected to be fueled by opportunities in development of unconventional reservoirs, deepwater environments and mature fields. Its stronghold in the North American markets is its key strength.
Juniper Networks Inc. (NYSE:JNPR) – The company’s operations are organized into two segments - The Infrastructure segment offers scalable routing and switching products, as well as a complete wireless local area network solution. The SLT segment offers solutions ranging from protecting the network itself and data on the network, to maximizing existing bandwidth and acceleration of applications across a distributed network.
Though the stock has shown erratic earnings and a low average return on equity over the last few years, the sales growth has been good at 17% on average over 10 years. This may be due, in part, to the fact that the company is spending higher proportions of its revenues in R&D with a multi-year growth agenda. Book value per share has also shown an average growth rate of 15% over the same period.
The company’s continuous launch of new products and entry into new markets and strategic alliances are its key strengths. The company looks set to benefit from the emerging wave of cloud computing.
Pacer International Inc. (NASDAQ:PACR) – The freight transportation and logistics service provider posted net income of $4.2 million in the second quarter 2011, more than double of $2 million in the first quarter. The results basically reflect improved operational performance through better delivery of service, capacity allocation decision processes, and cost controls. The earnings per share increased to $0.12, three times the figure for the same quarter last year.
With the stock currently trading near 52-week low levels, it looks like an attractive buy. The recent stock purchase by the CEO signals his belief in the company’s growth prospects, reinforcing my take on the stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.