Every investor has to know which stocks to pick and they have to manage their capital properly in order to be a profitable trader. Picking the quality stocks might be the most difficult part every investor encounters.
In this article, the analysis and the predictions for the five stocks that should be on your radar will be discussed:
Research In Motion Limited (RIMM)
Until it can prove otherwise, Research In Motion has become an "also-ran" in the mobile communications market. This company has a total capitalization of $14.70 billion. It has generated $6.30 earnings per share trailing for the twelve months period. It now has the earnings ratio of 4.48 times. It`s operating margin is fairly high at 21.76% and the return on the equity is 37.95%. It has no debt and the data showed that it is growing at a good pace. It`s quarterly revenue growth has been increased to 15.90%.
Another good related stock will be Apple (AAPL). This company is much larger than the Research In Motion with a capitalization of $346.4 billion. This company is already well known throughout the globe and it is still growing. It has the earnings per share of $25.28 with the earnings ratio of 14.7 times. It has a great operating margin of 30.43% combined with a high return on the equity of 41.99%. It also has no debt at all and it has a revenue growth rate of 82.00%.
A born-again company like Research In Motion may possibly become a big company in the future such as Apple as an example. Buying and holding this stock may produce a big win for your portfolio.
SandRidge Energy, Inc. (SD)
The SandRidge Energy, Inc. has a total capital of $2.61 billion. It has the negative operating margin of -9.10% and the negative earnings per share of -$0.07. It has total debt of $2.91 billion and the total debt/equity ratio is 161.90 times. It`s return on equity is only 3.92%. This company is performing really badly. How about its competitors?
One of its competitors, Brigham Exploration (BEXP), is performing much better. This company has a market capital of $3.11 billion with the operating margin of 39.40%. It`s return on the equity is 13.77%. The earnings per share for this company is at a gain of $0.73. However, it`s earnings ratio is 36 times and the debt/equity ratio of 89 times. This is expensive and risky so many investors may unwind speculative trades resulting bearish sentiment for the stock.
Yahoo! Inc. (YHOO)
Yahoo! is a digital media company. This company has the capital of $16.25 billion and the operating margin of 15.16%. It has the return on the equity at a rate of 9.45%. It has made the earnings per share of $0.88 with the earnings ratio of 14.59 times. The debt they own is $40.00 million which is 0.31 times in the total debt/equity. The revenue growth has gone down by -23.30% for the past year.
AOL (AOL) is a similar company to the Yahoo! but a smaller one. AOL has a market capital of $1.49 billion and the operating margin of 8.69%. The return on the equity is 10.56%. It`s earnings per share is $2.16 which is more than the Yahoo! and the earnings ratio is 6.45 times which is also lower. It`s revenue growth has gone down by -8.40% last year.
Both Yahoo! and AOL are performing good. However, both of these stocks have a negative revenue growth rate. This could mean two things. One is that the bigger players are exiting their trade positions. Two is that the company is implementing on establishing new businesses and services. This could be a good chance to buy a quality stock like Yahoo! with a cheaper price.
Wells Fargo & Company Common St (WFC)
Wells Fargo is another stock to be on the radar. This company has $129.83 billion in the capital market. It has a dividend yield of 0.48 (2.00%). The earnings it generates is $9.53 per share with the earnings ratio of 1.80 times. The operating margin of the company is 34.58% and the return on the equity is 11.42%. However, this company has $196.62 billion in the debt.
On the contrary, a smaller company like Bank of America Corporation (BAC) which has a capital of $78.64 billion is also in the bearish trend. This company has a negative revenue growth of -52.60% and a losing net income of -$16.32 billion. It`s earnings that make per share is also down at -$1.64.
As a result, Wells Fargo is doing its best to regain its capital while Bank of America (BAC) is having a difficult time to manage against the economy corrupts.
Vodafone Group PLC (VOD)
Vodafone Group is a mobile telecommunication company providing its services around the globe. This company has $83.50 billion in the capital market. It has the earnings per share of $0.15 and the earnings ratio of the company is at 1,000 times which is really too high. Now let's see how it is doing in it`s financial cash flows. The company has the operating margin of 14.57% while returning on the equity at 8.82%. It`s performances in the last quarter seems to put it in the pressure with the earnings growth down to -88.90%. It has cut its earnings nearly 2 times of its previous value.
BT Group PLC (BT) is also performing not so well in its cash flows. It has generated $0.20 for the earnings per share in the last month. However, the earnings to ratio is at 817.26 times and the total debt/equity ratio of 495 times.
Vodafone Group PLC would be a dangerous stock to buy right now. The suggestion would be to sell it since the value of the stock seems to be at its high and it could be over bought right now.