I am very excited to share that StockScouter, formerly available on MSN Money, is back! I know many readers used to follow StockScouter and so I would like to share the current Top 50 stocks and discuss 3 which I find compelling in more depth.
Boeing Airlines (BA) is a direct beneficiary of the $1.3 trillion fiscal 2018 budget for defense spending. In particular, missile defense receives 11.5 billion, more importantly an extra $3.3 billion over the 2017 budget. The MDA receives $393 million, the Army $577 million and the Navy $501 million to purchase Boeing aircraft, tankers and speeding up development of various defense products. The market has already priced this in at this point so what will move Boeing higher going forward. Analysts have been raising both 2018 and 2019 earnings targets higher. In 2018, Edward Jones, Barclays, Vertical Research and Societe Generale have all raised BA to a buy or outperform. Analysts see earnings growing 18.3% in 2019 and 13.75% over the next 5 years. In 2017, BA traded at a P/E of 28 and is trading at a forward P/E of 19.4. BA has consistently beat estimates over the past year which could push the forward P/E lower if that trend continues. StockScouter scores BA as an A for Fundamental, A for Technical and B for Valuation. Throw in the 1.97% yield and BA is a stock any investor may want to consider adding to their portfolio.
Textron Inc. (TXT) also benefits from increased defense spending. The Textron Aviation segment manufactures and sell military training and defense aircraft. The stock has seen a nice rise since April 2018 after beating earnings estimates handily in Q2 ($.72 vs $.48 estimate) and most recently in Q3 ($.87 vs $.70 estimate). However, shares have based and even fallen recently making TXT even more attractive to investors. The forward P/E on TXT is 19.92 while trading at a P/E of 36.65 today. Like Boeing, TXT has seen researches issue buy or outperform recommendations this year. Barclays initiated with a buy on 3/29/18 and Bank of America upgraded from underperform to a buy on 4/19/2018. Analysts expect earnings to grow 17.83% in 2019 which is a good reason to consider owning TXT today. Stockscouter gives TXT a technical score of A, fundamental score of B and Valuation score of A. It also shows a very high reward for the amount of risk investment.
T-Moblie US Inc. (TMUS) has made a quite a run from $55.70 on 5/31/2018 to $65.50 today and the good news is that it should continue higher. Wells Fargo flipped from a downgrade on outperform to market perform on 4/30/2018 to an upgrade from market perform back to outperform on 6/28/2018. 2018 has been a year of earnings beats for TMUS, albeit a deceleration in earnings from previous years, and analysts continue to raise forward earnings targets across the board. Earnings are forecast to grow 19.47% in 2019 which has helped give rise to the recent rally in TMUS stock. TMUS is trading at a trailing p/e of only 12.04. The median forecast of 22 analysts following TMUS is $76.60 with a high of $93 and a low of $68. The merger with Sprint has provided the backdrop for a lot of the optimism in TMUS stock. The $26.5 billion merger will allow TMUS to compete with AT&T (T) and Verizon (VZ) (also in the top 10 Stockscouter list) more efficiently. TMUS has been taking customers from both competitors and is considered the best of breed by many folks. There are 2 concerns I would like to point out on TMUS. The first is the fact that they are just in an unattractive industry for now. There is a reason TMUS trades at a p/e of 12, T at 6.34 and VZ at 7.04. It is a highly competitive market making growth difficult. Nonetheless, TMUS has been the best of this group and with the merger with Sprint and new 5G race going on, TMUS should continue to be successful. My second concern is insider selling. Selling has been rampant over the last 2 years across the board and in large volume. I tend not to try to guess why individuals will sell shares of the company they work for so I take this with a grain of salt. Some of this could be planned selling but when I see nobody buying in 2 years and this amount of selling it gets my attention. StockScouter scores the insider trading an F. The fundamental and valuation scores are a B and the technical score is an A. All things considered, I agree with StockScouter and believe TMUS is worth consideration for your investment portfolio.
You can find the updated StockScouter Top 50 here anytime.
Happy investing and best of luck to all of you.
Top 50 scores calculated as of: Jul 31
|Rank||Company||Ticker||StockScouter Score||Dividend Yield||PE Ratio|
|1||DTE ENERGY COMPANY||DTE||8||3.186||17.3|
|2||THE BOEING COMPANY||BA||10||2.022||21|
|9||T-MOBILE US INCORPORATED||TMUS||9||N/A||12.1|
|10||LYONDELLBASELL INDUSTRIES NV||LYB||9||3.585||7.6|
|11||UNITED CONTINENTAL HOLDINGS INCORPORATED||UAL||9||N/A||11.4|
|13||AIR PRODUCTS & CHEMICALS INCORPORATED||APD||8||2.709||23.6|
|14||PPG INDUSTRIES INCORPORATED||PPG||8||1.81||18.3|
|15||THE SHERWIN-WILLIAMS COMPANY||SHW||8||0.791||22.2|
|16||UNITED TECHNOLOGIES CORPORATION||UTX||8||2.118||20.8|
|18||ROGERS COMMUNICATIONS INCORPORATED||RCI||8||2.883||18.5|
|19||LOCKHEED MARTIN CORPORATION||LMT||8||2.551||34.4|
|21||REPUBLIC SERVICES INCORPORATED||RSG||8||2.053||18|
|22||HONEYWELL INTERNATIONAL INCORPORATED||HON||8||1.956||69.3|
|23||AMERICAN ELECTRIC POWER COMPANY INCORPORATE||AEP||8||3.496||18.2|
|26||CHUNGHWA TELECOM COMPANY LIMITED||CHT||8||N/A||20.9|
|28||INTERNATIONAL PAPER COMPANY||IP||8||3.682||7.2|
|30||NORTHROP GRUMMAN CORPORATION||NOC||8||1.644||22.7|
|31||TE CONNECTIVITY LIMITED||TEL||8||1.905||24.4|
|32||ICICI BANK LIMITED||IBN||9||0.476||25.6|
|33||SUMITOMO MITSUI FINANCIAL GROUP INCORPORATE||SMFG||8||4.19||7.7|
|34||HSBC HOLDINGS PUBLIC LIMITED COMPANY||HSBC||8||4.349||65.7|
|35||CITIZENS FINANCIAL GROUP INCORPORATED||CFG||8||2.711||10.9|
|36||ROYAL BANK OF SCOTLAND GROUP PUBLIC LIMITED||RBS||8||N/A||41.6|
|37||BARCLAYS PUBLIC LIMITED COMPANY||BCS||8||N/A||N/A|
|38||LENNOX INTERNATIONAL INCORPORATED||LII||10||1.199||27.7|
|40||DOLLAR GENERAL CORPORATION||DG||10||1.132||17.1|
|41||WESTLAKE CHEMICAL CORPORATION||WLK||10||0.863||8.1|
|42||WALGREENS BOOTS ALLIANCE INCORPORATED||WBA||10||2.647||15.5|
|43||HD SUPPLY HOLDINGS INCORPORATED||HDS||10||N/A||8.5|
|47||ESTEE LAUDER COMPANIES INCORPORATED||EL||10||1.149||43.1|
|48||LANDSTAR SYSTEM INCORPORATED||LSTR||10||0.579||21|
|49||SUNCOR ENERGY INCORPORATED||SU||10||2.725||19.3|
|50||RELIANCE STEEL AND ALUMINUM COMPANY||RS||10||2.278||8|
Disclosure: I am/we are long t,vz,cfg,cnc,ba.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This is not a solicitation for investment advice from Equity Armor Advisors.