Things look bleak. No doubt many investors have given up on the stock market and the ones who haven't yet probably have thought about it. Most investors find investing to be frustrating and scary at times. However, when things are this tough and people are this negative it can often be a signal to buy stocks. A recent CNBC article discusses the current state of the markets and the outlook for the future. The article gives hope for recovery in 2012, after the dust settles in 2011 and it states:
World stock markets will recover next year from a nightmarish 2011 that has wiped trillions of dollars off share prices, according to a Reuters poll that showed almost all major stock indexes ending 2011 in the red.
The article continues with this positive view for 2012:
The survey also suggested strong gains lie ahead on some rich-world bourses, with bourses in the United States, Australia, France, Germany and Japan expected to yield double-digit returns from now until mid-2012.
Read the entire article here.
Intel Corporation (INTC) is a leading maker of chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. This company has a rock-solid balance sheet, sells for only about 8 times earnings and pays a dividend that beats most bonds and other income investments. A number of chip stocks have recently warned that earnings would be lower than expected, so I would wait for Intel to release earnings before taking a significant position.
Here are some key points for INTC:
Current share price: $22.21
The 52-week range is $18.77 to $23.96
Earnings estimates for 2011: $2.36 per share
Earnings estimates for 2012: $2.47 per share
PE Ratio: about 8
Annual dividend: 84 cents per share, which yields 3.7%
Microsoft Corporation (MSFT) is a leading maker of computer software and hardware products as well as consumer products like the Xbox. Microsoft has a huge cash position on their balance sheet. The stock pays a strong dividend and trades for just about 8 times earnings. Microsoft recently raised the dividend and the payout could continue to rise in the future.
Here are some key points for MSFT:
Current share price: $25.45
The 52-week range is $23.32 to $29.46
Earnings estimates for 2011: $2.87 per share
Earnings estimates for 2012: $3.18 per share
PE Ratio: about 8
Annual dividend: 80 cents per share, which yields 3.1%
Current share price: $6.35
The 52-week range is $6 to $15.31
Earnings estimates for 2011: loss of 31 cents per share
Earnings estimates for 2012: profit of $1.20 per share
PE Ratio: about 5.5 times 2012 earnings
Annual dividend: 4 cents per share, which yields .6%
Hewlett Packard (HPQ) is a leading technology company with an extremely diverse range of products and services, which include printers, computers, tablets, software, consulting and other business solutions. This stock has been in a downtrend and hit a new 52-week low recently. Now, HPQ is trading at a price-to-earnings ratio of about 5. With earnings of nearly $5 per share expected for each of the next two years, this company will earning nearly half the current share price just in the next 24 months. That is a sign the stock is way too cheap.
Current share price: $23.78
The 52-week range is $21.50 to $49.39
Earnings estimates for 2011: $4.84 per share
Earnings estimates for 2012: $4.87 per share
PE Ratio: about 5
Annual dividend: 48 cents per share, which yields 2%
Cisco Systems, Inc. (CSCO) is a leading networking hardware company. Goldman Sachs sees new hope for Cisco shares and recently upgraded the stock to a buy from neutral, setting a $21 price target. The Goldman analyst believes that Cisco is "at the beginning of a multi-quarter upward estimate revision cycle,” and that estimates are too low. Read more details on the Goldman analysis here. Cisco shares appear to have put in a solid bottom and in time are likely to rise powered by improving fundamentals, a low valuation as well as an improving chart for those that follow technical analysis.
Here are some key points for CSCO:
Current share price: $15.85
The 52-week range is $13.30 to $24.60
Earnings estimates for 2011: $1.71 per share
Earnings estimates for 2012: $1.81 per share
PE Ratio: about 8
Annual dividend: 24 cents per share, which yields 1.5%
Here are some key points for FCX:
Current share price: $31.34
The 52-week range is $30.64 to $61.35
Earnings estimates for 2011: $5.91 per share
Earnings estimates for 2012: $6.11 per share
Annual dividend: $1 per share, which yields 2.9%
Data sourced from Yahoo Finance. No guarantees or representations are made.
Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.