Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.
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.
Stock number one is:
Facebook Inc., (SYMBOL: FB) and the headline says:
Facebook Revenue Exceeds Estimates on Mobile Advertising -- Bloomberg
Facebook, the global social network icon, reported first quarter sales up 38% from a continued surge in mobile advertising. “So far this year, Facebook has introduced new software for smartphones, added tools for marketers and revamped News Feed, the first thing members see when logging onto the network of more than 1 billion,” reports Bloomberg.
Earnings per share are projected to rise 8% this year, then 37% next year. The PE is 50. Morgan Stanley Research says, “We believe investors should aggressively build positions now for catalysts approaching over the next 6-12 months,” and that “management is effectively balancing user happiness with new revenue products.”
In February, we told investors to avoid Facebook shares when the price was on a downturn. The recent correction appears to be ending. Investors should jump in here.
Our Ransom Note trendline says: ACCUMULATE FACEBOOK SHARES.
Stock number two is:
Ford Motor Co., (SYMBOL:F) and the headline says:
Ford Leads U.S. Carmakers’, Building on 1Q Sweep -- Bloomberg
U.S. auto makers reported their first quarterly increase in market share gains since 1993, led by Ford with sales up 18% in April. The company will be increasing production of its F-150 pick-up trucks.
Earnings are projected to fall 1% this year, as troubled global economies continue to pressure margins; then rise 19% in 2014. The PE is 9.6 and the dividend yield is 2.97%.
The stock has been in a trading range this year, and looks ready to push up against price resistance at $14.25. The bull-case scenario is that the stock could retrace the January 2011 high of $19. In April, we told investors to stay on the sidelines. Now that the housing recovery is affecting consumer spending patterns and auto sales….
Our Ransom Note trendline says: ACCUMULATE FORD MOTOR CO.
Stock number three is:
General Motors Company, (SYMBOL: GM) and the headline says:
GM Narrows Quarterly Loss in Europe
“After losing more than $18 billion in Europe since 1999, General Motors Co. narrowed its first-quarter loss in the region,” reports Bloomberg. In addition, General Motors’ April sales rose 11%.
Earnings are expected to grow 3% this year, then 29% next year. The PE is 9.4, and the stock does not pay a dividend.
The chart has turned bullish and appears ready to rise into the low-to-mid $30’s. While the chart looks good, we like Ford shares better with their hefty dividend and much larger increase in April sales.
Our Ransom Note trendline says: STAY ON THE SIDELINES.