The stock market had a pretty good day on Friday, with the Dow (^DJI) and S&P 500 (^GSPC) both up over 1%. Here are five of the NYSE stocks that saw the most trading.
Pfizer Inc. (PFE) stock benefited Friday in part due to the announcement that its Xalkori drug has been approved. The drug targets a specific type of lung cancer, and doctors hope that it can treat patients better than current drugs that have more side effects. Shareholders are quite excited about this news because Pfizer’s sales may soon decline as more and more generic drugs come out. Specifically, the company’s Lipitor drug already has at least two new potential manufacturers. Pfizer has also been involved with a takeover bid for Icagen (ICGN), and Pfizer has said it will keep its offer at $6 per share despite Icagen’s biggest shareholders wanting more. We believe this is a prudent move that will make sure PFE doesn’t overpay for ICGN. Pfizer will also be releasing data on its Eliquis drug soon. This treatment is a blood thinner used to prevent strokes and could be very important for the company due to the large market for this type of drug. The above linked article also shows that Pfizer is being rated very highly by analysts right now. As for margins, Pfizer has been doing quite well, with operating margin at 25.17% and gross margin at 75.85%. Note that these are both better than for competitors like Bayer (OTCPK:BAYRY), Merck (MRK), and Novartis (NVS).
Exxon Mobil Corporation (XOM) was up over 1% on Friday, although reports are now coming out that some of the company’s workers in Papua New Guinea are refusing to work. There have also been headlines about the company’s recent oil spill in Montana, and it appears that the cleanup for that will cost XOM $42.6 million. Regardless, work on pipelines in this area will resume. Further details on Exxon Mobil’s work in Montana can be found here. Events in Libya have also propelled oil stocks like Exxon Mobil higher, as it remains to be seen when production from that country will continue. Note that XOM has higher value metrics than other oil companies like BP and Chevron (CVX). Price to earnings ratio for XOM is 9.58 and price to sales ratio is 0.89. Other statistics like price/earnings to growth ratio, operating margin, gross margin, and quarterly revenue growth are closer to the middle of the pack. Cash flows for the oil giant have also been mixed lately. $2.868 billion left the company in 2010, while $462 million has come in for the first half of 2011. XOM has been actively buying back stock though, which explains why these cash flows are a bit low.
Corning Inc. (GLW) – This materials maker has been on a steady decline since early this year. In fact, many investors are now quite bullish on GLW. The company’s balance sheet looks great with plenty of cash and not too much debt. Operations have also been diversifying as the company seeks to rely less on sales of LCD TVs. Insider purchases are another aspect to consider, and Corning gets a check here with CFO James Flaws’ recent buy. He himself has even discussed that the stock should be trading for more. Another Seeking Alpha article with reasons to buy this stock can be found here. With improving sales and earnings, as well as a host of recommendations from analysts, this stock could go on a hot streak soon. Competitors to Corning within the U.S. are scarce, but we think comparisons to foreign companies Furukawa (OTCPK:FUWAY) and Sumitomo (OTCPK:SMTOF) seem reasonable. Those stocks offer much higher price to earnings ratios, while Corning’s price to sales is the highest of the three. Statistics like quarterly revenue growth, operating margin, and gross margin are also interesting, with Corning taking the cake in all three of those. Cashflow-wise, note that $2.057 million came in for GLW in 2010, while only $11 million has come for the first half of 2011.
MGM Resorts International (MGM) – A stock that hit almost 100 back in 2007, MGM is now barely above $10. With a beta of 4.06, this is a wild one. The latest headlines for this stock have centered on Hurricane Irene, as it remains to be seen what kind of impact the storm will have on the company’s casinos and other properties. Shares were up big on Friday though, and it’s hard to say what the catalyst was. As discussed here, the only industry news was strong earnings from Melco Crown (MPEL), although MGM already reported earnings for this quarter. MGM has also been dealing with a lawsuit from customers who contracted Legionnaires’ Disease. Needless to say, this shouldn’t be pushing the stock up. Trump Entertainment Resorts and Caesars Entertainments are privately owned so those aren’t easy to compare, but one competitor that’s also publicly traded is Las Vegas Sands (LVS). MGM offers significantly lower price to earnings and price to sales ratios. With that lower value comes poorer margins – gross margin is 37.65% and operating margin is 7.28%. Las Vegas Sands also has a much higher quarterly revenue growth, 47.1%. Despite the poor economy, MGM has actually brought cash in for the first half of 2011 -- $422.59 million to be exact.
Alcoa, Inc. (AA) – This famous aluminum producer was up over 2% on Friday. Like MGM, this is another aggressive play with its beta of 2.27. As discussed here, not only have analysts correctly predicted this stock’s performance in the past, but they now think it’s ready to outperform. More discussion of what analysts think about Alcoa can be found here. In fact, Davenport thinks that Alcoa will benefit from increasing aluminum prices as well as a host of other factors. These including cutting costs, improved productivity, and higher demand via the aerospace industry. On the other hand, there are also reasons to be concerned about this stock. Historically speaking, the company hasn’t had great cash flows. Also, many industries are now switching to alternatives to aluminum – alternatives that Alcoa doesn’t make. As for other aluminum companies, two of the biggest are actually privately owned companies – Rio Tinto Alcan and RUSAL. Aluminum Corporation of China (ACH) is publicly traded though, and that company’s price to earnings ratio is a whopping 112.33. Price to sales is actually lower than Alcoa though, so the company may simply be having temporary cost issues. The margins certainly attest to this – gross margin for ACH is 6.22% and operating margin is 2.66%.