Analyzing 7 Big Buys Of PNC Financial Services

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 |  Includes: BHI, CSX, DIS, EL, JNJ, M, MDT
by: Rash Menaria

The following is a list of the top buys of PNC Financial Services Group as released in its most recent 13F filing with the SEC.

CSX Corp. (NASDAQ:CSX): PNC Financial Services bought 1,487,147 shares of CSX last quarter and now holds 2,245,316 shares. CSX Corporation is a transportation supplier. The Company provides rail-based transportation services, including rail service and the transport of intermodal containers and trailers.

CSX’s EPS forecast for the current year is $1.73 and next year is $2.01. According to consensus estimates, its top line is expected to grow 11.90% in the current year and 6.90% next year. It is trading at a forward P/E of 9.74. Out of 31 analysts covering the company, 24 are positive and have buy recommendations and seven have hold ratings. Transportation stocks are usually considered early cyclical. Their volumes are first to take a hit when economic activity decreases and first to recover when there is an upturn. Since, we are likely about to enter a slowdown, I think its best to avoid transportation stocks. Today, another transportation company Fedex (NYSE:FDX) lowered its guidance and I think it is just the begining of downward revisions.
Walt Disney Co. (NYSE:DIS): PNC Financial Services bought 1,019,711shares of Walt Disney last quarter and now holds 3,377,569 shares. The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company. The Company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive Media. Walt Disney’s EPS forecast for the current year is $2.49 and next year is $2.91. According to consensus estimates, its top line is expected to grow 7.30% in the current year and 6.10% next year. It is trading at a forward P/E of 10.67. Out of 27 analysts covering the company, 15 are positive and have buy recommendations and 12 have hold ratings.
I don’t think Disney makes a good buy now as we are likely entering another recession and Disney’s products and services are mostly consumer discretionary. So, there would be pricing pressures. Recent trends have not been very encouraging for Disney and attendence in amusement parks was up only slightly this summer.
Covidien Plc. (COV): PNC Financial Services bought 1,348,843 shares of Covidien Plc. last quarter. It is a new position for the fund. Covidien is a healthcare conglomerate that operates in four segments: Medical Devices, Imaging, Pharmaceuticals, and Medical Supplies.
Covidien’s EPS forecast for the current year is $3.92 and next year is $4.29. According to consensus estimates, its top line is expected to grow 10.50% in the current year and 4.40% next year. It is trading at a forward P/E of 11.12. Out of 23 analysts covering the company, 21 are positive and have buy recommendations and two have hold ratings. I like Covidien because of its strong product pipeline and the business momentum it is seeing. Last quarter, it reported excellent results with 20% earnings growth and revenues ~ $70mm ahead of expectations.

Baker Hughes Incorporated (NYSE:BHI):
PNC Financial Services bought 625,075 shares of Baker Hughes last quarter and now holds 711,182 shares. Baker Hughes Incorporated is engaged in the oilfield services industry. Baker Hughes is a supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The Company also provides industrial and other products and services to the downstream refining, and process and pipeline industries.
Baker Hughes’ EPS forecast for the current year is $4.35 and next year is $6.00. According to consensus estimates, its top line is expected to grow 37.40% in the current year and 16.70% next year. It is trading at a forward P/E of 9.47. Out of 33 analysts covering the company, 28 are positive and have buy recommendations and five have hold ratings.
To a big extent, the stock price of Baker Hughes is dependent on where the crude price is headed. I don’t think crude will see 2008-09 kind of decline again given the kind of money supply that has gone into the system thanks to fed stimulus and quantitative easings.
Macy's, Inc. (NYSE:M): PNC Financial Services bought 1,820,720 shares of Macy's, Inc. last quarter and now holds 1,910,584 shares. Macy’s, Inc. is a retail organization operating retail stores and internet websites under two brands (Macy’s and Bloomingdale’s) that sell a range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods in 45 states, the District of Columbia, Guam, and Puerto Rico.
Macy’s EPS forecast for the current year is $2.66 and next year is $3.01. According to consensus estimates, its top line is expected to grow 5.10% in the current year and 2.70% next year. It is trading at a forward P/E of 8.36. Out of 14 analysts covering the company, 10 are positive and have buy recommendations and four have hold ratings.
Estee Lauder Companies Inc. (NYSE:EL): PNC Financial Services bought 437,747 shares of Estee Lauder last quarter and now holds 539810 shares. The Estee Lauder Companies Inc. is a manufacturer and marketer of skin care, makeup, fragrance and hair care products.
Estee Lauder’s EPS forecast for the current year is $4.30 and next year is $4.96. According to consensus estimates, its top line is expected to grow 8.70% in the current year and 6.70% next year. It is trading at a forward P/E of 19.03. Out of 19 analysts covering the company, nine are positive and have buy recommendations, one has a sell rating and nine have hold ratings.

Johnson & Johnson (NYSE:JNJ): PNC Financial Services bought 433,173 shares of Johnson & Johnson last quarter and now holds 9,338,398 shares. Johnson & Johnson is a holding company. The Company and its subsidiaries is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. It has more than 250 operating companies conducting business worldwide. The Company’s operating companies are organized into three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics.

Johnson & Johnson’s EPS forecast for the current year is $4.97 and next year is $5.29. According to consensus estimates, its top line is expected to grow 6.20% in the current year and 4.80% next year. It is trading at a forward P/E of 12.03. Out of 24 analysts covering the company, 14 are positive and have buy recommendations and ten have hold ratings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.