Stocks in the News: AAPL, F, FDX

Posted: Mar 19, 2013 12:01 AM

Welcome to John Ransom’s Stocks in the News where the headline meets the trendline:

                  Stock Number One is:

Name:  Apple Inc. (AAPL) --

and the headline says: 

Apple Seen Raising Dividend More Than 50% to $16 Billion  (Bloomberg)

Wall Street analysts are expecting Apple Inc. to raise its quarterly dividend to about $4.14, or a yield of 3.75%.  This increase would easily be funded out of cash flow.

The stock price has been hemorrhaging since it became clear that earnings growth has ground to a halt.  Earnings per share are projected to increase less than one percent this year.

The share price tumbled from a high of $705 to the current range of $420-$450, and has not yet formed a base.

Our Ransom Note trendline says:  AVOID APPLE.

AAPL Chart

AAPL data by YCharts

 * * * * * * 

                  Stock Number Two is:

Name:  Ford Motor Company (F) --

and the headline says: 

Ford’s CEO Mulally Gets Pay Slashed (Wall Street Cheat Sheet)

“Ford Motor Company fell short in three crucial areas last year: market share, cash flow, and profit.”  As a result, CEO Alan Mulally has received a pay cut of 29%, to a cash & stock combo of $21 million.

Earnings per share fell in 2012, and are expected to be flat in 2013, due to economic woes in Europe, a glut on the car market in South America, and margin pressures in China.

Our Ransom Note trendline says: AVOID FORD MOTOR COMPANY.

F Chart

F data by YCharts

* * * * * * 

         Stock Number Three is:

Name:  FedEx Corporation (FDX) -- $108.12, down 95 cents today.

and the headline says: 

FedEx to Report Third Quarter Earnings This Week

As FedEx finishes up a lackluster 2013 in May, with an expected earnings per share decrease of 4%, it’s time for investors to look ahead to 2014.

Wall Street expects FedEx to increase earnings per share 24% and 19% in 2014 and ’15.  That gives the stock a forward PE of 13.8.  The PE on FedEx has ranged from 9 to 34 over the last decade.

The share price is on an immediate uptrend as it continues to recover from the 2008 Financial Meltdown.  There’s some price resistance at $120.

Our Ransom Note trendline says:  BUY FEDEX.

FDX Chart

FDX data by YCharts