The changing market conditions have greatly benefited some stocks while some have taken a terrible blow. The prices of some stocks have fallen drastically because of fading investor interest while some stocks are almost touching their 52-week highs and poised to cross them. I've selected five stocks that make excellent investments due to the changing conditions. Some of them are trading at deep discounts while the others have significant upside potential. Here are five picks from my "best ideas" list:
Alaska Communications Systems Group (ALSK) is a provider of integrated communications services. The company operates in the two segments, which are Wireline and Wireless. It provides a huge range of services in the Wireline segment that caters to four categories of businesses: wholesale, retail, enterprise, and access. On the other hand, the Wireless segment provides voice and data services in Alaska with roaming facilities available fro Canada and Hawaii.
The share price is currently around $3 and the 52-week high of the stock is $11. The stock is rock bottomed at its current price level and this means that there is tremendous upside potential and investors can reap as much as three times the return if they invest at the current price.
Furthermore, the dividend yield of 6.23% is extremely impressive considering the price of $3 for the share. I recommend buying this stock right now considering the excellent dividend yield and the staggering upside potential of the stock.
Bristol-Myers Squibb (BMY) is a global pharmaceutical company with a diverse product portfolio and operations spread across the globe. The company discovers, develops and delivers innovative healthcare solutions to global audience. Last year saw the business trade relatively well with impressive growth levels achieved in the third and fourth quarter of 2011.
Compared to profit and growth levels of the previous year, Bristol-Myers grew by nearly 30% amidst favorable market conditions and positive investor sentiment. The company currently has a total market capitalization exceeding $58 billion with an average trading volume of almost $11 million. A beta of just 0.54 has meant that the company is a relatively low-risk investment in volatile conditions. This has allowed the business greater resilience to the negative market environment and unfavorable investor sentiment over the last few quarters.
The trading price of the stock is currently poised at around $33, which is very close to its highest value in the last 52 weeks. Its price to earnings ratio is good at around 15 and the company has a dividend payout ratio of almost 0.34 on earnings per share of $2.17. A dividend yield of more than 4.11% means that the business will continue to please investors with high dividend yields. The business has performed reasonably well in the current year with profits rising by nearly 75%, and I believe that the company is one of the safest investments in the current year.
Core Laboratories (CLB) provides a range of specialized services to the oil and gas industry. The three major segments that the company deals in are: Production Enhancement, Reservoir Description and Reservoir Management.
It is among the best managed companies in the whole sector and has been rewarding its faithful investors for quite some time. Its last year's performance was spot-on and met the expectations of investors.
The company has bright prospects as it specializes in the measurement of oil reserves that are at extreme depths. The majority of the largest recent oil finds in Brazil, West Africa and the Gulfs are of deepwater. This makes Core Laboratories the prime candidate to benefit from these abundant opportunities.
The good news for investors is that the company has excellent cash flows and spends only 3-4% of their total cash on capital expenditures annually. If we compare this to the industry, the average annual spending of the companies amounts to around 10-15%.
If we take all these factors into account, it isn't a surprise that Core Laboratories investors have been rewarded with double-digit growth in dividends. Furthermore, the company has been paying special dividends of around 1-2% for the last five years. All these factors make Core Laboratories an incredibly attractive option for investment for me. I recommend buying this stock at current price levels.
Cliffs Natural Resources (CLF) is a renowned international mining company. It also engages in natural resources exploration. The company operates in eight segments: North American Coal, North American Iron Ore, Latin American Iron Ore, Asia Pacific Coal, Asia Pacific Iron Ore, Ferroalloys, Alternative Energies and the Global Exploration Group.
The stock is currently trading around $66, which is well below its 52-week high of above $102. The stock has become a major bargain following a massive sell-off concerning the future demand of coal and iron ore. Despite the fact that Cliffs Natural Resources posted strong results for 2011 that included a 45% increase of revenues and earnings of almost $11.5 per share, the share price suffered because of the growing concerns related to the sector.
However, there is a strong chance for the company to further improve its performances over the new quarters. The reason for this is the fact that many coal companies have cut down on productions and this is definitely going to affect the market as the diminishing supply will enable the company to enjoy better pricing and margins.
Furthermore, the company is currently paying dividends of $1.12 per share, which means that the dividend yield is 1.6%. The price target of the stock is $84, which means there is significant upside potential. All these factors make this stock an excellent investment.
Clean Energy Fuels (CLNE) is a major provider of natural gas in U.S. and Canada. It provides cheaper and cleaner alternative fuel options to a huge variety of markets that include airports and public transit.
The stock has enjoyed a major upswing in the current the year and has increased by 30%. It is currently trading around $17 which is extremely close to its 52-week high price. The balance sheet of the company is improving steadily.
The low price of natural gas has made the business model of Clean Energy extremely effective. More and more vehicles are shifting towards using the cheaper alternative fuel option and this growing demand means that the prospects for Clean Energy are extremely bright.
The best thing about the stock of Clean Energy is that experts believe that it hasn't taken off yet and there is considerable upside potential. The company has huge expansion plans and this means that it is looking to fully capitalize on the growing demand of natural gas. At the current price of $17, I recommend buying this stock now.
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