For investors relatively new to the tricks and trades of the stock market, buying stock has always carried major risks. This is because a wide range of factors can affect the performance of stocks. However, not all of these factors can be carefully considered when deciding to invest in stock because some of them are too elusive in nature. As a result, investors who are relatively new to the stock market and are oblivious to its dynamics end up relying more on their gut instinct than they do on their assessment of financial data. For them, it is as simple as jumping onto a bandwagon. This is not always the best way to make an investment, especially when the investor has limited financial resources to play with. In such instances, an expert financial analyst like me can be of great assistance. Here are five stocks that I believe show promising signs of growth this year:
International Shipholding Corporation (ISH)
International Shipholding Corporation, along with its various subsidiaries, operates a fleet of U.S. flag vessels providing domestic and international maritime transportation services to commercial entities as well as governments. The stock is among the businesses least affected by the global economic crisis and has performed well in the previous year generating a net income of nearly $2 million in the last quarter. The company currently has a market capitalization of nearly $160 million and an average trading volume of more than a quarter of a million dollars. Share trading price has been perpetually consistent at around $21 for the last 52 weeks with price-to-earnings ratio of almost 5 and earnings per share of more than $4. The company has an excellent dividend history ranking among the highest dividend paying companies in 2011, with a dividend yield of more than 8% and a payout ratio of almost 0.4. International Shipholding Corp. has managed to maintain a wide competitive moat amidst tough competition and enjoys favorable investor sentiment as a result of a good dividend history. According to my assessment of financial data and market conditions, the company is expected to continue its drive toward growth.
L-3 Communications (LLL)
L-3 Communications is an intelligence, surveillance and reconnaissance company. The company was recently upgraded to a buy status from a hold by me along with other financial analysts. This is owing to the fact that L-3 Communications has had a favorable run in the last quarter of 2011, and the opening month of 2012. The company has recently announced plans to reposition which, after completion, allow its operating profile firmer growth potential due to much restricted overseas punitive operations. The company is in the process of striking an acquisitions deal with Kollmorgen Electro-Optical, which will widen the business' competitive moat considerably. L-3 currently has a market capitalization exceeding $7 billion and an average trading volume of nearly $1 million. The trading price of shares is currently at around $70 with a 52-week low-high range of $58 to $88. L-3 has a price-to-earnings ratio of more than 7 with earnings per share of nearly $10. With a dividend payout ratio of around 0.5 and a yield of almost 3%, L-3 is one of the few companies that have managed a good dividend history in recent years. Furthermore, the company has raised its quarterly dividend to 50 cents a share from the previous 45 cents. This, along with the fact that the company has grown nearly 6% through 2011, is expected to attract favorable investor sentiment. Therefore, I believe that L-3 is a good investment venture in the current year.
Ingersoll Rand (IR)
Ingersoll Rand is an industrial and commercial products company. It had a fairly good run last year with reported earnings for the fourth quarter exceeding $242 million. Ingersoll Rand currently has a huge market capitalization of nearly $12 billion with an average trading volume just shy of $4 million. The share trading price is currently poised at around $38 after showing a 52-week range of $26 to $52. Ingersoll Rand seems to have started trading in the new fiscal trading on the right footing. It has recorded a 14% increase in profits just in the month of January and I expect the company to widen its competitive moat considerably throughout the first quarter. It currently has a price-to-earnings ratio of nearly 16 with earnings per share just shy of $2.5. The company recently announced plans to increase quarterly dividends by as much as 33% and this has allowed it to enjoy favorable investor sentiment. Currently, it has maintained a dividend payout ratio of around 0.2 and a yield of nearly 2%. According to my analysis of financial data and market statistics, the company will surely continue to be a lucrative venture for investors in 2012.
Kimco Realty (KIM)
Kimco Realty is a global blue-chip brand. It reported fourth-quarter earnings of nearly $32 million with earnings per share of around 10 cents. Compared with the financial figures for the same quarter of last year, the company has seen an increase of nearly 50% in revenue. In my view, it would be entirely safe to upgrade the current standing of the stock from a hold to a buy. Kimco Realty currently has a market capitalization of nearly $8 billion with an average trading volume of more than $3.5 million. Trading price currently stands at around $18 with a 52-week range of $13 to $ 20. Financial analysts speculate that the company is set to grow considerably in the first quarter of 2012, with the brand loyalty that it has enjoyed in recent years. Kimco's price-to-earnings ratio is almost 74 with earnings per share just shy of 30 cents. The company recently announced quarterly cash dividends on common and preferred shares. The company has a dividend yield of more than 4% and a payout ratio of 0.2. In my view, seeing how the stock has grown by nearly 15% at the close of the previous year, Kimco Realty is a lucrative investment for the year 2012.
Halliburton is ranked among the top oilfield services companies in America. It has global operations aiding oil companies in the exploration and drilling of wells. Ever since the introduction of the new horizontal drilling technology, Halliburton has been able to boost its productive capacity exponentially from 500 billion barrels about 5 years ago to nearly 4.5 trillion as of date. Revenue through overseas operations has increased nearly 20% since the third quarter of 2011. Also, the company is expected to expand its field of operations significantly in the coming years seeing that power-houses China and Argentina seek assistance from Halliburton for the development of their national oil and gas fields. The current market capitalization of the company is massive at a staggering $30 billion with total recorded revenue of $25 billion in 2011. At a current trading price of around $36, Halliburton has a price-to-earnings ratio of around 11 and earnings per share of almost $3. A positive dividend yield of nearly 1% has helped the company earn the trust of loyal investors. In my view, the company will continue to grow at a steady pace, opening new frontiers for investment such as the massive market of China. Therefore, I rank Halliburton among the safer stock investments for 2012.