Stocks in the News: Oil Makes Big Money

Posted: Aug 27, 2013 12:01 AM
Stocks in the News: Oil Makes Big Money

Stock number one is: 

Anadarko Petroleum Corp., (SYMBOL: APC) and the headline says: Anadarko surprises Wall Street with $2.6 billion Mozambique sale -- MarketWatch

Global oil & gas company Anadarko Petroleum has agreed to sell a 10% stake in its Mozambique offshore gas field to an energy company in India for $2.64 billion cash.  After taxes, the transaction brings Anadarko’s cash position to about $6.4 billion.  Morgan Stanley expects the company to announce a large share repurchase plan.

Earnings are expected to grow 26 and 18 percent over the next two years.  The PE is 21.

Several investment firms raised their price targets as high as $122 on Anadarko shares today.  The stock began breaking past a medium-term trading range in July, currently trading between $89 - $93.

Our Ransom Note trendline says:  BUY ANADARKO PETROLEUM

APC Chart

APC data by YCharts

Stock number two is: 

Verizon Communications Inc., (SYMBOL: VZ) and the headline says: Expecting a 7th Consecutive Dividend Increase Next Week – Morgan Stanley

"Morgan Stanley is expecting Verizon to announce an annual dividend increase on or near Thursday, Sept 5.  Verizon is the largest U.S. wireless carrier, with 2012 revenues of $116 billion."

Earnings per share estimates have increased since we began recommending Verizon stock in February, currently reflecting 21, 15, and 10 percent growth over the next three years.  The dividend yield is 4.34%, and the PE is 17.

We began recommending Verizon shares in February, saw the stock price rise 23%, then cautioned investors to wait for a pullback to buy more shares.  The pullback took place this summer, and the price is attractive again.

Our Ransom Note trendline says..... BUY VERIZON.

VZ Chart

VZ data by YCharts

Stock number three is:

Amgen Inc., (SYMBOL:  AMGN) and the headline says: Amgen to buy Onyx for more than $10 billion -- Reuters

Biopharmaceutical-maker Amgen Inc. has agreed to purchase Onyx Pharmaceuticals  with cash and low-interest rate, five-year financing.  Shareholders will receive $125 per share when the deal closes in the fourth quarter.  Onyx cancer products, combined with Amgen’s deep late-stage pipeline, are expected to add to earnings  beginning in 2015.

Prior to the deal, Amgen’s earnings were projected to grow 14 and 12 percent in the next two years.  The PE is 15.6.  Amgen remains committed to growing the dividend, currently yielding 1.6%.

The stock price is up over $9 today, and retracing April highs at about $115.  Expect it to trade in the $108 - $115 area for a short while prior to any breakout.

Our Ransom Note trendline says....  ACCUMULATE AMGEN UNDER $110.

AMGN Chart

AMGN 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.