Mark My Words, These Surging Stocks Will Set New Highs In 2012

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 |  Includes: CAG, GIS, MCD, MDLZ, PM, SBUX, YUM
by: David Alton Clark

In this article, we will discuss seven stocks hitting multi-year highs right now, five of which are at all-time highs. Each of these companies has a national reputation for quality, reliability and the ability to operate profitably in good times and bad. Additionally, they have solid fundamentals, strong sales and attractive valuations and are generally the leaders in their industry.

The five stocks hitting all-time highs are as follows: General Mills, Inc. (NYSE:GIS), McDonald's Corp. (NYSE:MCD), Philip Morris International, Inc. (NYSE:PM), Starbucks Corporation (NASDAQ:SBUX) and Yum! Brands, Inc. (NYSE:YUM). The two stocks hitting multi-year highs are ConAgra Foods, Inc. (NYSE:CAG) and Kraft Foods Inc. (KFT).

I constantly screen the list of best performing stocks to ascertain prospective momentum ideas. If you see a stock hitting multi-year or even better all-time highs, you may feel you have already missed out on the move, but rest easy; the stocks on this list are hitting these extraordinary levels for a reason and still have room to run. I posit the macroeconomic conditions that have driven stock performance year to date will continue throughout next year. Mark my words, these surging stocks will set new highs and provide significant returns for savvy investors throughout 2012. The following is a summary chart with current performance statistics, a brief review of potential company-specific catalysts following by a chart with detailed fundamental statistics regarding each company.

Company Reviews

Current Summary Statistics

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Charts provided by Scottrade.com.

Company-Specific Catalysts and Fundamental Statistics

General Mills, Inc. is headquartered in Minneapolis, Minn, USA, and generated nearly $15 billion in annual sales. Almost 70 percent of sales come from U.S. Retail products. General Mills has a growing international business, contributing $2.9 billion in sales, with products in more than 100 global markets.

General Mills has a distinguished portfolio of leading brands, including Cheerios, Betty Crocker, Pillsbury, Green Giant, Yoplait, Nature Valley, Old El Paso and Häagen-Dazs, and holds the No. 1 or No. 2 share position in growing food categories worldwide.

According to a recent quarterly report, net sales for the 13 weeks ended Nov. 27, 2011, grew 14 percent to $4.62 billion. Price realization and mix contributed 3 points of sales growth, and foreign exchange contributed 1 point of growth. Pound volume contributed 10 points of growth, including 14 points of growth from the Yoplait acquisition.

Fundamental Statistics

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McDonald's Corporation Chief Executive Officer Jim Skinner and members of senior management reiterated the Company's commitment to its strategic plan - the Plan to Win - and outlined opportunities and investments to further modernize the Brand, enhance customer relevance and sustain the Company's performance for the future during the company's investor meeting recently.

CEO Jim Skinner said:

Over the past nine years the Plan to Win has been the right blueprint for McDonald's and remains relevant today. It has enabled us to perform well in both robust and challenging economic environments. Most importantly, the Plan is supported by our unparalleled competitive advantages in size and scale, our financial strength and our System alignment.

Fundamental Statistics

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Philip Morris is the leading international tobacco company, with products sold in approximately 180 countries. In 2010, we held an estimated 16.0 percent share of the international cigarette market outside of the U.S., or 27.6 percent excluding the People's Republic of China and the U.S. In terms of market share, we are the number one company in 13 markets and number two in a further nine of the 30 largest markets by cigarette industry size.

Philip Morris has historically expanded its business through a mixture of organic growth, geographic expansion, and acquisitions. Philip Morris has a successful track record of acquiring and integrating companies, including a recent acquisition of Rothmans Inc. of Canada. Other recent acquisitions in Colombia, Indonesia, and Serbia and increased investments in Mexico and Pakistan have also reinforced its position as the leader of the international cigarette market.

Fundamental Statistics

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Starbucks Corporation recently opened their 500th store in China and has expanded into five new Chinese cities. The company views china as their second home after the USA. Please review this detailed press release regarding their plans to boost momentum in China throughout 2012.

Fundamental Statistics

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Yum! Brands, in advance of its annual investor update meeting, increased its full year 2011 EPS growth forecast to at least 13%, or $2.85 a share, excluding special items; previous guidance was at least 12%. Yum! also announced it expects to deliver at least 10% EPS growth in 2012, excluding special items, which would mark its eleventh straight year of meeting or exceeding this annual EPS growth target.

David C. Novak, Chairman and CEO, said:

This has been a strong year led by our China and Yum! Restaurant International businesses and I'm pleased to report we have raised our 2011 full-year EPS growth forecast to at least 13%, despite our disappointing U.S. results. We are pleased our global portfolio is delivering another strong year of EPS growth, with our leading position in Emerging Markets growing stronger. We are well positioned for another strong year in 2012 given our robust international new unit development, innovative marketing and operating plans, as well as the opportunity to dramatically improve U.S. performance.

Fundamental Statistics

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ConAgra Foods, Inc., one of North America's leading food companies, recently announced that the board of directors approved a $750 million increase to the company's share repurchase authorization, with no expiration date. Shares are expected to be repurchased periodically over several years, depending on market conditions and other factors, through open-market or privately negotiated transactions. The repurchases are expected to be funded by cash generated from operations. This authorization is part of broader capital allocation priorities that include maintaining an investment grade rating and strong balance sheet while deploying the company's strong free cash resources towards a top-tier dividend policy, strategic acquisitions and other growth investments, and share repurchases.

Fundamental Statistics

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Kraft Foods Inc. recently reported third quarter results driven by strong organic revenue growth and operating income gains in each geographic region.

Third Quarter Highlights

  • Net revenues grew 11.5% to $13.2 billion; Organic Net Revenues up 8.4%
  • Operating income grew 11.8%; Underlying Operating Income grew 12.2%
  • Diluted EPS was $0.52; Operating EPS was $0.58
  • Company increased outlook for 2011 Organic Net Revenue growth to at least 6%
  • Operating EPS guidance for 2011raised to at least $2.27

Irene Rosenfeld, Chairman and CEO said:

Our investments in marketing and new products continue to drive high quality growth and solid market shares. And we've accomplished this despite having taken significant price increases to offset record-high input costs. Together with substantial savings opportunities, we expect to deliver top-tier results in 2011 and remain on track to launch two industry-leading companies with strong operating momentum in the coming year.

Fundamental Statistics

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Conclusion

I don't see much changing for these stocks over the next twelve months, I posit go with what's working, even though these names are at all-time and multi-year highs, they have amazing management teams, plenty of room for growth and are currently hitting on all cylinders. I'm not saying that you should buy into a full position today, but this may be a good opportunity to layer in to these stocks at a tenth or a quarter at a time.

Use this information as a starting point for your own due diligence and research methods before determining whether or not to buy or sell a security.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SBUX, CAG, GIS, KFT, MCD, PM, YUM over the next 72 hours.