6 Donald Trump Picks To Buy On The Cheap

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Includes: BAC, C, CAT, INTC, JNJ, PG
by: Hawkinvest

Billionaire Donald Trump has made it clear he isn't a big fan of the stock market, but earlier this year (in August), he announced that he purchased a handful of stocks. Most of them were blue-chip stocks that pay dividends. With the very negative headlines about Europe and the significant drop in stocks lately, it's now possible to buy some of Donald Trump's favorite stocks for less than they were trading for when he started buying them.

The article details his comments:

Trump said, “I’m not a stock person. I love real estate, but good real estate is very hard to get.” Donald Trump explained that he bought stock in Bank of America , Citigroup , Caterpillar , Intel , Johnson & Johnson , and Procter & Gamble . Donald Trump also said, “I love these companies. I’ve watched them for years and I’ve never owned stock in them. I went out yesterday and said, look I’m not getting interest on CDs, so I went out and bought some stock.

Below is a closer look at 6 stocks that Donald Trump was buying earlier this year, 5 of which are even cheaper now. I have listed where the stock was trading around the time when Trump announced his purchases and the current price. This shows you have a chance to probably pay less than what Trump was possibly paying for for these same stock not long ago -- only Intel (NASDAQ:INTC) is trading higher now:

Johnson & Johnson (NYSE:JNJ) is a global maker of health care and medical products. This company owns well known brands such as Listerine, Motrin, Band-aid, Reach, Splenda, Tylenol, Lubriderm, Sudafed and many more. These types of products remain in high demand regardless of the global economic situation and the dividend pays you to wait for better times and stock valuations. This stock has dropped with the market recently and is giving long-term investors a solid value. Trump probably likes the stability and the solid dividend. Stock price around the time Trump was buying: $64.36.

Here are some key points for JNJ:

  • Current share price: $61.27
  • The 52 week range is $57.50 to $68.05
  • Earnings estimates for 2011: $4.97
  • Earnings estimates for 2012: $5.24
  • Annual dividend: $2.28 per share which yields 3.6%

Bank of America (NYSE:BAC) is a banking and financial services giant. This bank is facing challenges with mortgages and foreclosures and the stock has recently sold off on concerns of a double dip and fears about Europe. But, many other smart investors like Warren Buffett are also buying shares at what looks to be bargain levels. Stock price around the time Trump was buying: $7.40.

Here are some key points for BAC:

  • Current share price: $5.17
  • The 52 week range is $5.12 to $15.31
  • Earnings estimates for 2011: 2 cents per share
  • Earnings estimates for 2012: 98 per share
  • Annual dividend: 4 cents per share which yields .8%

Caterpillar, Inc. (NYSE:CAT) is a leading maker of heavy equipment which includes machinery for agricultural, mining and construction. This stock has come well off of recent highs and now looks like a much better buying opportunity. It even traded around $70 recently. I would consider this stock on any dips, due to high demand for farm equipment. Stock price around the time Trump was buying: $89.35.

Here are some key points for CAT:

  • Current share price: $86.72
  • The 52 week range is $67.54 to $116.55
  • Earnings estimates for 2011: $6.79 per share
  • Earnings estimates for 2012: $9.05 per share
  • Annual dividend: $1.84 per share which yields 2%

Intel Corporation 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 9 times earnings and pays a dividend that beats most bonds and other income investments. I think it makes sense to follow Trump here and buy this on any dips. Stock price around the time Trump was buying: $20.79.

Here are some key points for INTC:

  • Current share price: $22.73
  • The 52 week range is $19.16 to $25.50
  • Earnings estimates for 2011: $2.45 per share
  • Earnings estimates for 2012: $2.56 per share
  • Annual dividend: 84 cents per share which yields 3.6%

Citigroup, Inc. (NYSE:C) is a banking and financial services giant. Almost every financial stock has been in declining and Citigroup is no different. Citigroup appears to have less challenges from housing compared to some banks and it also has key exposure to emerging market economies and this gives it more growth potential. The bank sector is in a serious bear market, so I would only buy a little at a time. Stock price around the time Trump was buying: $29.94.

Here are some key points for C:

  • Current share price: $23.63
  • The 52 week range is $21.40 to $51.50
  • Earnings estimates for 2011: $4.08 per share
  • Earnings estimates for 2012: $4.44 per share
  • Annual dividend: 4 cents per share which yields .2%

Procter & Gamble (NYSE:PG) is a global maker of consumer goods. This company owns well known brands such as Head & Shoulders, Olay, Pantene, Braun, Fusion, Gillette, and many more. These types of products remain in high demand regardless of the global economic situation and the dividend pays you to wait for better times and stock valuations. Trump probably likes the low valuation and solid dividend. Stock price around the time Trump was buying: $61.62.

Here are some key points for PG:

  • Current share price: $61.00
  • The 52 week range is $57.56 to $67.72
  • Earnings estimates for 2011: $4.19
  • Earnings estimates for 2012: $4.56
  • Annual dividend: $2.10 per share which yields 3.4%

Data is sourced from Yahoo Finance.

Disclosure: I am long BAC.

Disclaimer: No guarantees or representations are made. 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.