Dow Jones 10,198 (UP) week ending July 9th
Sorry I missed you all last Saturday. Sometimes there are more important things in the world going on than the stock market. No not the World Cup!
Of course I am speaking of the beginning of the 21 stages of Le Tour De France beginning on July 3rd, which is also my vacation week.
I love the ebb and flow of the race with the sprinters taking charge in the flat lands, (Mark Cavendish with HTC - Columbia pictured winning back to back Stages 5 & 6) and now swinging towards the Alps where Alberto Contador of Astana and Lance Armstrong of Radio Shack hit their best paces. Just like in the stock market different teams lead the Peloton, then out from behind a team bunched together at the front comes a sprinter to turn the corner and surge forward with a burst of speed to the finish line.
So what sprinters are going to break away from the pack in this Stage and turn of the corner in the stock market?
Google, Inc. (Symbol GOOG, $467.46) . It is time for this great leader to step it up and show it's paces. The stock is cheap here. Projecting earnings of $24.82 a share this year and $28.69 next year (PE 16). This company has a 5 year sales growth rate of 42.43% and a 5 year earnings growth rate 43.57%. What gives it the catalyst to surge into the slipstream? Issues in China are starting to settle out a bit here, so there is no longer anything holding it back.
It is also time for my "lead-pipe" cinch stock pick of the year from earlier, Monsanto Co. (Symbol MON, $51.21) to finally surge ahead here. I thought for a minute that people had stopped eating or something crazy like that. The stock has a 12 month total return of -41.9%. But I think we hit the down hill race here and Monsanto surges back into the 60'S. Growth in earnings will be the catalyst that brings this quality company stock higher.
I did take my copy of Barron's on vacation with me and found you a cheap stock to buy while I sipped a frosted mug of ice cold Yuengling Traditional Lager amber beer (privately owned co.) and that stock is Goodyear Tire & Rubber Co. (symbol GT, $10.89). Earnings are surging from .23 cents a share this year to $1.55 per share next year.
So keep the rubber to the pavement with Goodyear and Le Tour De France and catch the next single good stocks that are moving to the front for a win!
Go Lance Armstrong and the Radio Shack team.