The ten years have been known as the "lost decade," with many large-cap blue chips hovering around even over the past ten years. Consensus on the Street: now is a great time to invest.
Here are a few market buys that can lead your portfolio performance in the 2012. Natural gas assets have decreased in value, hurting the energy sector, but Hess (NYSE:HES), Chevron (NYSE:CVX), and Conoco Phillips (NYSE:COP) are well poised to bounce back in 2012. Intel (NASDAQ:INTC) is putting up record profits, Bank of America (NYSE:BAC) has a better capital ratio than ever with a positive outlook in all business operations, and Altria Group (NYSE:MO) holds a lot of potential with a consistent cash flow and great margins.
Intel reported a record year in 2011: full-year revenue of $54 billion, operating income of $17.5 billion, net income of $12.9 billion and EPS of $2.39 - all records. "2011 was an exceptional year for Intel," said Paul Otellini, Intel president and CEO. "With outstanding execution the company performed superbly, growing revenue by more than $10 billion and eclipsing all annual revenue and earnings records. With a tremendous product and technology pipeline for 2012, we're excited about the global growth opportunities presented by Ultrabook systems, the data center, security and the introduction of Intel-powered smartphones and tablets."
A company with the experienced track record of Intel is still breaking records? Don't underestimate Intel, particularly with, as I've noted, the demand for touchscreen products.
Many investors are hesitant to invest in tobacco companies; but this does help keep the stocks cheaper. Altria Group Inc. (MO) holds a leadership position with regulators, which can provide investor's confidence in a consistent future cash flow for Altria. Good margins (more than 23%) on a consistent demand is always a positive, especially considering a dividend yield over 5% and a healthy balance sheet.
Who is afraid of the big bad financials? A lot of people. Which means that those thinking a step ahead are seeking buying opportunities and Bank of America (BAC) seems to have the right stuff. Bank of America reported net income of $2.0 billion, or $0.15 per diluted share, for the fourth quarter of 2011, compared with a net loss of $1.2 billion, or $0.16 per diluted share in the year-ago period. Fourth quarter 2011 was filled with some reshuffling, creating numerous one time expenses.
Buyer beware! After a rough third quarter in 2011 in which Hess fell short of analyst expectations, the fourth quarter and the first quarter earnings expectations have been decreased. Hess is a recognizable oil company with great business foundations. Investors hungry to take advantage a of pessimistic overreaction by the market will buy into Hess now, but the patient will choose to wait until January 25th to see how Hess performed in fourth quarter 2011 before making a decision.
We find a very similar situation to Hess with Chevron. Foreign exchange rates have been especially cruel to Chevron's bottom line as of late, and a report of its fourth quarter 2011 revealed that earnings will be significantly lower than third quarter earnings. Chevron is still crying foul after an adverse ruling in Ecuador, claiming that the ruling was fraudulent. Chevron may be able to overturn the $8 billion dollar ruling, and the stock will responds positively if it happens. Analyst consensus has brought expected earnings per share from $3.16 to $2.93, but this is still an improvement from the $2.54 earned per share in the fourth quarter of 2010. Now may be a great time to take ownership in a great company fighting through non-recurring liabilities.
Although production slowed down in third quarter 2011, it was a great year for business at Conoco Phillips, with a bright outlook going into 2012. Connoco continues to explore and develop new promising discoveries around the globe. Connoco announced that it took a 75% stake as joint venture partner in the Goldwyer shale project located in the Canning Basin of Western Australia. Other projects in the Gulf of Mexico and Kazahkstan will begin in the first quarter of 2012. Analysts expect $1.86 per share in fourth quarter 2011, up significantly from the $1.32 achieved in fourth quarter 2010. Expect the best in 2012 for a company beginning great projects around the globe.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.