Tuesday, December 7, 2010

"3 Industrial companies, 2 Commercial banks, and a partridge in a pear tree"

Dow Jones Industrial Average 11,382.09 (UP) week ending December 3rd, 2010

When you load stuff up to your blog you need to remember that
it may be up in cyberspace for a long, long time and that any one of your blogs could be read out of context at a future time. So I, like
Jack Finney in his time traveler short stories "About Time" , must
leave notes for future readers that will stand the test of time, to be read and relevant in the future.  Last week I put up mostly momentum stocks. This week we are back to fundamentals and good earnings growth.

Caterpillar Inc. (Symbol CAT, $90.35) is a rock solid company whose machinery sales were up 48% over the 3 months ending in October. Annual earnings for 2010 of $4.02 and projected 2011 earnings of $5.70 per share. Cat is also buying Bucyrus International to fuel their revenue growth. They also are doing a one billion Yuan bond issued for two years that is well received. 12 month Total return of 59.5% for CAT. This one will stand the test of time.

Carpenter Technology Corp. (Symbol CRS, $ 38.68) the manufacturer and fabricator  of specialty metal alloys has taken a sudden and rapid earnings turn to the positive and I think it is because of  demand for Titanium products. Earnings for 2010 are going to $1.40 and 2011 are projected at $2.79 per share.  Carpenter Technology announced "Expansion of Titanium Facility to Support Growing Aerospace Fastener Wire Demand". Titanium is an amazingly strong and light metal. A piece of it has held my hip and femur bone together for the last ten years after a car accident, so I can personally vouch for it.  

The third industrial stock is Joy Global Inc. (Symbol JOYG, $79.14). This company has a return on equity of 45.90%. 5 year earnings growth of 26.92%. The company has been building cash reserves for the last 5 quarters. This producer of machinery for mining Copper, Coal, and Iron ore should keep going strong with the world growth in China, India and Brazil.

My two banks are Bank of America (Symbol BAC, $ 11.57) and HDFC Bank ADR (Symbol HDB, $179.10).

 These two banks have the size and earnings power to be competitive in the global banking arena. 
Bank of America with it's Merrill Lynch operations in Asia have made great strides to grow and HDFC based in India has been on a 5 year, 41.5% revenue growth  expansion that shows no signs of letting up. Both companies will have rapid earnings growth in 2011. Bank of America reported today that they are bringing back a more substantial dividend.  Both 10 years from now will be around if you are reading this in 2021, unless they merge or are bought out.

I also promised you a partridge in a pear tree from the The Twelve Days of Christmas (song). The song which could be of English or French origin will also certainly be around in the future and has many more stanzas, but I could not come up with that many stocks!  So here is your partridge. Why he ends up in the tree, I am not sure? 

Make sure to sing a happy tune and enjoy the capital gains tax staying at 15%!     Freewilly 


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