UBS Investment Research recently published a report entitled "Global Equity Strategy" on November 30, 2011, enlisting the global top 40 stocks for investment in 2012. The Consumer Staples, Healthcare, and Technology sectors have been given an overweight rating whereas the rating for Financials, Discretionary, and Utilities sectors is underweight. The report isn't publicly available but we will discuss the most important points in two articles. This is the second of two articles. (Part I)
CSX Corp. (CSX) provides rail-based transportation services. It has been given a buy-rating by UBS. In 2012, the company expects a dividend yield of 2.2% and a price-to-earnings ratio of 10.3x. CSX Corp. has a net debt to equity ratio of 0.92, indicating a high level of debt. The company expects a return-on-equity ratio of 21% by the end of 2011. Shares are currently trading at $22.6 per share while the company recently reported earnings per share of $1.6.
KLA-Tencor Corp. (KLAC) is a designer, manufacturer and marketer of process control and yield management solutions for the semiconductor industry. UBS has given the company a buy-rating. KLA-Tencor is expected to achieve a price-to-earnings ratio of 12x by the end of 2011, with an expected dividend yield of 2.5%. The company has a net debt-to-equity ratio of -0.1 and an enterprise value to EBITDA ratio of 5.7. Return-on-equity is expected to be around 30% by the end of 2011. Shares of the company are currently trading at $46.9 per share.
Check Point Software Technologies Ltd. (CHKP) develops, markets, and supports software and hardware products for information technology security. UBS expects its price-to-earnings ratio to be 16.5x by the end of 2011. Its return-on-equity is around 20%, while its price-to-book value is expected to be 3.7x by the end of 2011. Check Point Software has been given a buy-rating by UBS. It has a negative net debt-to-equity ratio of 45% and a relatively high enterprise value to EBITDA ratio of 13.2. Shares of the company are currently trading at $51.7 per share.
Google Inc. (GOOG) is one of the blue chip stocks in the technology sector. Google has been given a buy-rating. It has a price-to-earnings ratio of 13.5x and a price-to-book-value ratio of 3.3x. Google also has a negative net debt-to-equity ratio of 22%. It has an enterprise value to EBITDA ratio of 11.2 while its return-on-equity stands at 21%. Shares of Google are currently trading near its 52-week high, around $668 per share.
EMC Corporation (EMC) develops, delivers and supports technologies and solutions for the information and virtual infrastructure. It also offers enterprise storage systems. UBS has given the company a buy-rating. A price-to-earnings ratio of 13x is expected in 2012 while a price-to-book value of 2.5x is expected by the end of 2011. The company has reported a return-on-equity ratio of 17% while its enterprise value to EBITDA ratio stands at 7.7. EMC has a negative net debt-to-equity ratio of 13%. Shares of EMC are currently trading around $21.8 per share.
Qualcomm Inc. (QCOM) designs, develops and manufactures digital telecommunications products and services. UBS expects a relatively high price-to-earnings ratio of 15.7x in 2012 while it expects the price-to-book-value ratio to be 2.5x by the end of 2011. The company's dividend yield is around 1.6%. Qualcomm has a negative net-debt-to-equity ratio of 40%, while its enterprise value to EBITDA ratio stands at 10.9. Shares of Qualcomm are currently being traded at $55.8 per share. UBS has given the company a buy-rating.
Wisconsin Energy Corp. (WEC) generates, distributes and sells electric energy and steam. It has been given a buy-rating by UBS. A price-to-earnings ratio of 14x is expected in 2012. The company has a dividend yield of 3%. Net debt accounts for more than 130% of total equity, indicating that the company has a high level of borrowing. UBS also expects an enterprise value to EBITDA ratio of 11 by the end of 2011. Shares of Wisconsin Energy are currently trading near its 52-week high, at $34.4 per share.