Stocks in the News: More Employees Thrown to the Obamacare Exchanges

Crista Huff
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Posted: Sep 21, 2013 12:01 AM
Stocks in the News: More Employees Thrown to the Obamacare Exchanges

Stock number one is:

The Home Depot, Inc., (SYMBOL: HD) and the headline says: "If you're one of the more than 250 million Americans who already have health insurance, you will keep your health insurance." – President Obama

Home Depot will be sending 20,000 part-time employees to the new insurance exchanges because the company is no longer allowed to offer limited liability medical coverage under the Affordable Care Act. Many restaurants and retailers will also be forced to discontinue offering part-timers their current medical benefits. Home Depot will continue to offer medical benefits to full-time employees, although the employees will now pay more for that coverage.

Earnings are expected to grow 18-19% in each of the next two years. The PE is 21 and the dividend yield is 2%.

Home Depot stock is up 19% since our buy recommendation in February, and 8% since our report earlier this month. Shares are trading sideways, currently approaching upside resistance at $81.

Our Ransom Note trendline says: ACCUMULATE HOME DEPOT.

HD Chart

HD data by YCharts

Stock number two is:

Biogen Idec Inc., (SYMBOL: BIIB) and the headline says: Tecfidera's Launch Tracking Above 2013 Estimates – Citi Research

Prescription starts of Biogen’s new multiple sclerosis drug are robust, and continue to climb each week. Sales are tracking well ahead of consensus estimates, which leaves additional room for upside surprises to push the share price higher. Citi also says that Biogen has a deep pipeline which could offer upside surprise.

Earnings per share are expected to grow 18-31% per year over the next three years. The PE is 29.

Biogen’s share price is up 29% since our first buy recommendation this year in March. The price broke through upside resistance yesterday. Watch for another run-up now, and use stop-loss orders.

Our Ransom Note trendline says..... BUY BIOGEN IDEC.

BIIB Chart

BIIB data by YCharts

Stock number three is:

The Goodyear Tire & Rubber Company, (SYMBOL: GT ) and the headline says: GOODYEAR OUTLINES PLANS FOR EARNINGS GROWTH, REINSTATES DIVIDEND -- Reuters

Goodyear Tire and Rubber reinstated its quarterly dividend after an eleven-year hiatus, with a current yield of just under 1%. The company also announced a $100 million share repurchase program, which offsets new shares issued under stock compensation programs.

Goodyear is expected to grow earnings 29, 11 and 11% over the next three years. The PE is low at 9.2, but the long-term debt ratio is quite high at 80%.

The stock price is up 22% since we said to buy shares on July 30; now approaching resistance at $24. We would use any market correction as an opportunity to buy more shares.

Our Ransom Note trendline says.... HOLD GOODYEAR TIRE & RUBBER COMPANY.

GT Chart

GT 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.