Stocks in the News: Visa Added to the Dow Jones

Crista Huff
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Posted: Sep 11, 2013 12:01 AM
Stocks in the News: Visa Added to the Dow Jones

Stock number one is: 

Celgene Corp., (SYMBOL: CELG ) and the headline says: FDA approves Celgene drug for pancreatic cancer – Boston.com

Biopharmaceutical company Celgene Corp. received FDA approval to treat late-stage pancreatic cancer, giving the company another potential $1 billion in annual sales, and diversifying the company’s product base.  “The National Cancer Institute estimates about 45,000 patients will be diagnosed and about 38,000 will die from the disease this year.”

Earnings estimates have increased again, expected to grow between 21 and 27 percent over each of the next three years.

The stock is up 38% since our first buy recommendation in March.  It’s been trading between $132 and $150 for two months, and could pretty easily break out on the upside in the near-term.  S&P just raised the target price to $172.

Our Ransom Note trendline says:  BUY CELGENE.

CELG Chart

CELG data by YCharts

Stock number two is: 

McDonald's Corp., (SYMBOL: MCD) and the headline says: International Drives Upside as U.S. Disappoints – Morgan Stanley

McDonald’s August same-store sales increased 1.9 percent, much better than analysts expected, with Europe and Russia leading the international pack.  U.S. sales remain disappointing due to menu competition and price promotions among fast-food rivals.  McDonalds is introducing new food items, including steak for breakfast, and chicken wings, in a fight to maintain market share.

Earnings growth estimates have been ratcheting downward all year, currently expected to be up 4% this year.  The dividend yield is 3.18%.

The stock price fell in August, currently trading between $94 and $99.  The large dividend yield should provide some price support for shareholders.

Our Ransom Note trendline says..... HOLD MCDONALDS.

MCD Chart

MCD data by YCharts

Stock number three is:

Visa Inc., (SYMBOL:  V) and the headline says: Visa To Join The Dow Jones Industrial Average -- Citi Research

Visa will be added to the Dow Jones Industrial Average as of the market close on Sept 20.  Watch for the stock to trade up, as approximately 6.5 million shares need to be purchased by Dow index funds.

Wall Street expects Visa's earnings to increase by 17-22% in each of the next three years.  The company announced another $1.5 billion dollar stock repurchase plan in August.

The share price rose 15% after our March buy recommendation, reached new highs in July, then had a pullback with the August market correction.  Watch for it to trade between $180 and $192 in the near-term.  Visa shares should appeal to growth stock investors.

Our Ransom Note trendline says....  BUY VISA.

V Chart

V data by YCharts

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.