The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). There was a lot of talk about green shoots this past quarter as Wall Street was looking for any small bit of optimistic data to support the market.
The federal printing presses continued to run at full speed pushing the dollar lower and oil prices higher. While the feds were printing money to cover their deficits, the States do not have that same luxury and many of them are having trouble balancing their budgets to the tune of billions of dollars.
Every year I find myself asking the same question: What to get dad for Father's Day. Well, Kiplinger's offers not to get our dads the same old presents -- another tie, another power tool -- but stocks in companies he probably likes or uses their products. That's a great idea, I thought, and decided to counter with five of my own.
Kiplinger's suggests: Diageo (NYSE: DEO), the seller of such brands as Johnnie Walker, Smirnoff, Guinness and José Cuervo. Diageo has held up better than most during the recession -- thanks to a balanced portfolio of products, with higher exposure to mid-price, mainstream brands and less exposure to ultra-premium brands. The shares look reasonably priced. At $56.01, Diageo trades at 15 times estimated June 2009 earnings of $3.82 a share. The stock yields 2.8%.
Another to consider: Molson Coors (NYSE: TAP), the seller of such brands as Coors, Blue Moon, Pilsner and Rickard's. Beer, probably even more so than hard liquor is supposed to hold better during a recession given the cheaper price point. The company's recent quarterly profits more than doubled. The shares trade at 13 times forward earnings of $3.33 and yield 2.2%.
This should not shock anyone that has followed the market for any length of time or is simply a student of human nature, but Diageo PLC (NYSE: DEO) the largest distiller and distributor of alcoholic beverages in the world is moving up when the market is moving down.
The London Financial Times under the headline Markets are giving the devil his due reports on two new independent US academic studies by Frank Fabozzi, a finance professor at Yale, and Harrison Hong, a Princeton professor, touting the benefits of investing in "sin stocks" associated with alcohol, tobacco and gaming. They surmise that many pension funds, and conservative investors "looking to maintain an aura of respectability." do not invest in these types of companies leaving them to others. These companies also tend to be more highly taxed and regulated, which limits competition somewhat.
Signs of life in the merger and acquisitions industry are so scarce right now that this one will have to do: Diageo (NYSE: DEO) has acquired leading cocktail mixer producer Stirrings for an undisclosed sum. Prior to the deal, Diageo held a 20% stake in the company.
"This is a great opportunity to further grow the Stirrings brand and create more synergies with Diageo's array of leading spirits brands," said
Larry Schwartz
, President of Diageo USA. "As people entertain more at home, they are looking for an easy way to serve bar-quality cocktails and Stirrings fits squarely within our at-home strategy."
Baird upgraded Nike (NYSE: NKE) to Outperform from Neutral on expectations the company will benefit from the drop in the U.S. dollar and continued solid trends in athletic footwear. The firm raised its target on shares to $69 from $61.
Deutsche Bank upgraded Temple-Inland (NYSE: TIN) to Buy from Hold as it believes the company is well positioned for cyclical turnaround in the Paper/Building Products space. The firm raised its target on shares to $19 from $11.
Goldman upgraded Diageo (NYSE: DEO) to Buy from Neutral to reflect the current valuation and the company's exposure to emerging markets.
Deutsche Bank (NYSE: DB) was upgraded to Hold from Sell at ING Group.
The year started off with continued turbulence. We have a new president, Barack Obama, who will boldly lead us where no man has gone before --trillions further in debt, most likely.
Not that this is his doing, but it is his chosen calling, and right now he is calling out to the Congress to move forward on various contentious budget proposals and continued federal stimulus packages.
Citigroup upgraded Cooper Industries (NYSE: CBE) to Hold from Sell to reflect improving macro indicators and a belief negative earnings revisions are unlikely going forward. The firm raised its target price to $37 from $28.
Royal Bank of Scotland upgraded Siemens (NYSE: SI) to Buy from Hold on expectations the company will benefit from an economic recovery.
Banc of America/Merril upgraded State Street (NYSE: STT) to Buy from Neutral and raised their price target to $50 from $40 following stress test results that show the company does not need additional capital. The analyst said the news "clears one of the bars on capital concerns."
Teradata (NYSE: TDC) was raised to Market Weight from Underweight at Thomas Weisel.
Target (NYSE: TGT) was lifted to Overweight from Neutral at JP Morgan.
Diageo (NYSE: DEO) was upgraded at UBS to Neutral from Sell.
"If you're buying stocks to meet long-term investment goals, now is an excellent time to do some bargain hunting," says Alexander Green. In The Oxford Communique he looks to Diageo (NYSE: DEO).
"One good place to start is with Diageo. We like the outlook for company, which is the world's largest spirit maker. In good times or bad, people drink. According to some studies, even more during the bad times.
"With eight of the top 20 brands, and unparalleled marketing and distribution operations, Diageo is the best way to tap into the globe's steady demand for high-quality spirits.
I am a big fan of Diageo (NYSE: DEO), for no other reason that the company produces this blogger's two favorite adult beverages: Guinness and Captain Morgan. I am not an investor in the company, but with the copious amount of product I have consumed in the past 14 (or so) years - I may as well be. This is why I keep taps on the company's announcements, hey, I track what I know.
TheStreet.com's Jim Cramer says horrible outlooks from competitors Diageo and Masco make FO a stock to sell in this market.
What do you do if Johnnie Walker's slowing and Merillat cabinets aren't moving? I think you sell Fortune Brands (NYSE: FO) (Cramer's Take).
Both Diageo (NYSE: DEO) (Cramer's Take), the liquor king, and Masco (NYSE: MAS) (Cramer's Take), the cabinet and plumbing king, reported earnings. While Diageo didn't deliver terrible numbers and boosted its already bountiful dividend, its outlook was horrible.
Masco all around was just plain horrible. Huge quarterly dividend cut to 7.5 cents from 23.5 cents, miserable outlook and a sense that things are spiraling as housing starts get slashed to ribbons.
Rio Tinto (NYSE: RTP) will get a much needed $19.5 billion investment from Aluminum Corp. of China, or Chinalco, one of the world's biggest aluminum producers. This would help debt-laden RTP pay some of its debts. As part of the deal, Chinalco agreed to invest $12.3 billion in joint ventures in aluminum, copper and iron ore mining.
Alcoa (NYSE: AA) also sold its stake in Rio Tinto to Chinalco for $1 billion, well above its $300 million current value. Mind you, RTP shares declined 67% since the acquisition was made.
The 2009 clock is ticking loudly. The year has started off with a lot of continued turbulence. We have a new president, Barack Obama, who will boldly lead us where no man has gone before -- two trillion further in debt, most likely.
Not that this is his doing, but it is his chosen calling, and right now he is calling out to the Senate minority to compromise, and get yet another federal stimulus package off the shelf and out the door.
It does not matter whether you are focused on the gala event of president Obama's inauguration or Gala apples, it is a new day.
Actually the two gala's have a few things in common. Gala apples are mutli-colored, fairly resistant to bruising and are sweet, with a mild flavor and a thinner skin than most apples. Furthermore, they were cultivated somewhere else, in New Zealand.
I was brought up hearing an apple a day keeps the doctor away. I hope when all is said and done an Obama a day is able to keep depression away.
The stock market was closed yesterday in the United States (see: Martin Luther King: investing in dignity) but there was still news relating to the tough business environment. One that Obama will have to deal with after all the partying is over.
American Eagle Outfitters (NYSE: AEO) last traded at $10.06. American Eagle made a move meant to make this year the one that brings back a bit of the magic that turned a little Western Pennsylvania chain into one of the nation's most valuable brands. Roger Markfield, 67, the company's former chief merchandising officer and still a member of its board, has agreed to return full time for the new position of vice chairman, executive creative director.From my view the company also needs to examine how it can take advantage of the downfall of many lessor competitors and fill some Gaps.
Diageo plc (NYSE: DEO) last traded at $54.13. The company may have to change some of its plans given the current economic climate just like everyone else. Diageo already is reconsidering its plan for a new Guinness brewery Diageo said last year it would build a new brewery in Leixlip, west of Dublin, while cutting output and selling surplus land at St James's Gate in Dublin, where Arthur Guinness started brewing Guinness stout in 1759. "As result of the current difficult global economic situation, which affects both Ireland and the main international markets to be served by the new operations, Diageo has decided to conduct a re-evaluation of this brewing investment programme," it said.
The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). There was a lot of talk about green shoots this past quarter as Wall Street was looking for any small bit of optimistic data to support the market.
Every year I find myself asking the same question: What to get dad for Father's Day. Well, Kiplinger's offers not to get our dads the same old presents -- another tie, another power tool -- but 
This should not shock anyone that has followed the market for any length of time or is simply a student of human nature, but 
Signs of life in the merger and acquisitions industry are so scarce right now that this one will have to do: 
I am a big fan of 
The 2009 clock is ticking loudly. The year has started off with a lot of continued turbulence. We have a new president, Barack Obama, who will boldly lead us where no man has gone before -- two trillion further in debt, most likely. 
It does not matter whether you are focused on the gala event of president Obama's inauguration or
Cramer on BloggingStocks: Don't paint everything with the jobs brush
Seven banks go up in smoke ahead of the holiday weekend
Sears offering hedge for consumers who lose their job -- good idea?
