These seven large cap or better stocks have positive catalysts for future growth, 20% or better and above industry average profit margins over the trailing twelve months, and PEG ratios of less than or equal to 1. The PEG ratio is a broadly used indicator of a stock's prospective worth. It is preferred by numerous analysts over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued. Many financiers use 1 as the cut-off point for PEG ratios. A PEG of 1 or less is believed to be favorable. As Warren Buffett would say, "price is what you pay; value is what you get."
Trying to ignore the macroeconomic noise and negative headlines is hard. Buying low is not an easy thing to do, I know, but if you have a long-term time horizon, you will most assuredly make money picking up distressed shares in solid companies at this very time. Markets don’t stay down or up for long, or Wall Street wouldn’t make any money. The Wall Street traders thrive on volatility. Markets fluctuate on a continuum, and we are bouncing along the bottom of it right now -- ergo, it’s time to load up. The very bottom of the market, during March 2009, was the time to buy, but no one I knew was buying; everyone was running for the exits at the exact time they should have been piling in.
Bespoke Investment Group stated on CNBC’s Street Signs:
Since 1928, the S&P (NYSEARCA:SPY) averaged a gain of 5.55% in the quarter after a 10%+ down quarter, and 17 of the last 21 economic indicators have come in better than expected, indicating the fourth quarter could be a snap-back quarter.
That is a powerful statistic. How many times has the stock market roared back after taking huge losses? The fact is, every time. If you told someone in 1987 on Black Monday that the Dow would be almost tenfold higher within 20 years, that person would have called you crazy. Who is to say how high the market can climb from here?
It is hard to think beyond the current state of affairs when negative preoccupations always seem to repeat themselves and you are stuck in a revolving door of misery, but the carousel ride inevitably ends, the storm clouds clear, and then you feel the first ray of hope shine down. The problem is it’s already too late to buy, due to the fact all the savvy investors bought in and ran up the price while you were hiding in your storm cellar. Fortune favors the bold; hopefully you have powder dry and take advantage of these amazing buying opportunities.
The seven stocks are: Mosaic (NYSE:MOS), Corning Incorporated (NYSE:GLW), Capital One Financial Corp. (NYSE:COF), Discover Financial Services (NYSE:DFS), Southwestern Energy Co. (NYSE:SWN), Altera Corporation (NASDAQ:ALTR) and SanDisk Corp. (SNDK).
Moreover, most of these stocks are trading well below consensus analysts’ estimates; several have recent upgrades and positive analyst comments and positive catalysts for future growth. Below are two tables with detailed statistics regarding each company’s current summary information and fundamental information, followed by a brief review of each company, detailed current analysts' estimates and up/downgrade activity, followed by a chart of the company's key statistics. Nonetheless, this is only the first step in finding winners for your portfolio. Please use this as a starting point for your own due diligence.
(Click to enlarge images)
The Mosaic Company is a producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry. The company is trading below analysts' estimates. Mosaic has a median price target of $85 by 12 brokers and a high target of $102. The last up/downgrade activity was on Aug 10, 2011, when Ticonderoga upgraded the company from Neutral to Buy.
Corning manufactures and processes specialty glass and ceramics products worldwide. The company is trading significantly below analysts' estimates. Corning has a median price target of $20 by 17 brokers and a high target of $25. The last up/downgrade activity was on Aug 9, 2011, when Ticonderoga upgraded the company from Sell to Neutral.
Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (NYSE:USA), National Association and Capital One, National Association, which provide various financial products and services in the United States, Canada, and the United Kingdom. The company is trading significantly below analysts' estimates. Capital One has a median price target of $58.50 by 18 brokers and a high target of $68. The last up/downgrade activity was on Sep 7, 2011, when Oppenheimer upgraded the company from Perform to Outperform.
Discover Financial Services, together with its subsidiaries, operates as a credit card issuer and electronic payment services company primarily in the United States. The company is trading below analysts' estimates. Discover Financial has a median price target of $30 by 18 brokers and a high target of $35. The last up/downgrade activity was on Aug 12, 2011, when RBC Capital Markets upgraded the company from Outperform to Top Pick.
Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and crude oil in the United States. The company is trading below analysts' estimates. Southwestern has a median price target of $45 by 23 brokers and a high target of $68.50. The last up/downgrade activity was on Oct 4, 2011, when Ladenburg Thalmann initiated coverage on the company with a Buy rating.
Altera Corporation is a semiconductor company, that designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools. The company is trading below analysts' estimates. Altera has a median price target of $40 by 24 brokers and a high target of $55. The last up/downgrade activity was on Oct 13, 2011, when Robert W. Baird downgraded the company from Outperform to Neutral.
SanDisk Corp. designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. The company is trading significantly below analysts' estimates. SanDisk has a median price target of $57 by 20 brokers and a high target of $70. The last up/downgrade activity was on Oct 12, 2011, when RBC Capital Markets initiated coverage on the company with a Top Pick rating.