Here are another 5 stock picks for those wanting to adjust their portfolios in the coming year. These five stocks are my best ideas for 2012. They have compelling valuations and earnings growth prospects that, in my opinion, are not being appreciated by investors.
Energy Transfer Equity (ETE) is engaged in the transportation and storage of natural gas and natural gas liquids (NGLs) in the United States, operating 7,800 miles of pipelines and 3 natural gas storage facilities. ETE reports earnings in two segments: Investment in ETP (Energy Transfer Partners), which includes intrastate, interstate transport and storage alongside retail operations and Regency, which the operation recently acquired and which covers treatment and processing of natural gas.
With a market capitalization of $8.10 billion and enterprise value of a whopping $19.10 billion, ETE most recently reported an increase of 14% in quarterly revenues, year on year. ETE has a dividend yield of 6.74%. The stock is trading near $37, near the low in its 52-week range of $47.34-$30.78. This makes it a good time to go long on the stock. The return on equity is just under 8%, making the stock a proverbial cat among the pigeons which offer an industry average of 5.87%.
Gerdau SA (GGB) is a global steel producer specializing in long-rolled steel. GGB’s other businesses include a hydroelectric power plant with 125 MW capacity through its holding interest in Dona Fransisca Energetica SA, and various steel mills producing products like steel billets, blooms, long rolled products and specialty steel products.
With a 1 year EPS growth rate of 90.41% and market capitalization of over $15 billion, GGB is cheaper than ever with a price earnings multiple of just 12 times. Shares trade well below the 5-year high price earnings of over 37 times, with the industry average at 36 times. The dividend yield is a healthy 1.7%, above the industry average of 1.64%. The dividend payout ratio of 28.57% is more than the industry average of 13.07%.
Halliburton Company (HAL) is the not-always-loved-but-still-famous, worldwide oilfield services company engaged in development of oil and natural gas. Its two main business segments are the Completion and Production segment and the Drilling and Evaluation segment, contributing 55% and 45%, respectively, to revenues. HAL operates in over 80 countries including a robust presence in North America, Latin America, Europe/Africa/CIS, and Middle East/Asia.
The stock is currently trading around $37, around the middle of its 52 week range of $27.21- $57.77. It is still relatively cheap with a price earnings multiple of just about 12 times, when the industry average is double that at 24 times. HAL offers a dividend yield of 1.02%, which is at par with the industry average of 1.42%. A $34 billion enterprise value company, it reported an operating margin of 18.66%, which leaves other competitors such as Petroleum Geo Services ASA (PGEJF.PK), which reported 10.91%, well behind . HAL has improved revenues 10% over the previous quarter, continuing growth of the last 3 quarters.
Juniper Networks Inc (JNPR) is engaged in designing and selling network infrastructure products that direct and helps in controlling network traffic. JNPR aims to fulfill networking requirements of global service providers, public sector companies and private enterprises offering range of products like routing, switching, security, and application management according to needs of the management of the organization.
JNPR reported a quarterly revenue growth of 9.20%, much better than competitors such as Alcatel-Lucent (ALU) which was far behind at a meager 2.40%. JNPR has moderate return ratios with the return on equity at 7.83%, just beating the industry average of 6.91%, and a return on investment of 6.92%, at par with the industry average of 6%. For a company with a market capitalization of $12.46 billion, the stock saw a phenomenal EPS growth of 423%, reported an operating margin of 15.76% alongside a net profit margin of 11.49%, compared to just 8.32% and 3.65% for its competitor Brocade Communications Systems (BRCD).
Pacer International, Inc (PACR) is a worldwide logistics company operating in two key segments: intermodal and logistics, with the intermodal segment providing transportation for cargo customers, and the logistics segment focusing on supply chain management and warehousing services. A $143 million enterprise value company, PACR has an asset base of more than 16,000 containers and 1,800 rail cars as part of its network.
The stock is trading close to its 52 week low in a range of $3.30- $7.29, with a price earnings multiple of around 13 times, well below its 5 year high price to earnings ratio of 265 times, while the industry average follows suit at 16 times. The 5 year average dividend yield is at 2.82%, beating the industry average of 1.56%, while the return on investment and return on equity are 10.69% and 10.97%, respectively. Both numbers beat the industry averages of 7.06% and 8.96%, respectively. The stock is a good bet for the coming year as it comes forward with a good set of financial numbers and available at a low price right now.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.