Stocks in the News: China Takes Stake in Middle East Oil Business

Crista Huff
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Posted: Aug 31, 2013 12:01 AM
Stocks in the News: China Takes Stake in Middle East Oil Business

Stock number one is: 

Apache Corp., (SYMBOL: APA) and the headline says: Sinopec to buy 33% stake in Apache Egypt – Want China Times

Apache Corp. has agreed to sell a minority stake in its Egyptian oil and gas business to Sinopec Group of China, for $3.1 billion.  The stock is up today because the deal values the Egyptian assets much higher than Wall Street expected.  Apache plans to pay down debt with other asset sale proceeds in the third quarter, and is now expected to use the Egyptian proceeds to fund additional share buybacks.  The company recently repurchased 200,000 shares.

There will be minimal taxes on the sale if the proceeds remain in Egypt.  Energy stock investors should note that the news is also bullish for valuing Occidental Petroluem’s (OXY) Middle East assets.

Apache stock is volatile and earnings growth is erratic.  The share price could reach the low $90’s in the near-term.

Our Ransom Note trendline says:  HOLD APACHE CORP.

APA Chart

APA data by YCharts

Stock number two is: 

salesforce.com, inc., (SYMBOL: CRM) and the headline says: Don’t Call It a Comeback, We’ve Been Here for Years – Morgan Stanley

Software company salesforce.com reported impressive second quarter numbers after the close yesterday, surprising Wall Street and driving the stock up about 14% today.  “The company ... issued third-quarter sales and earnings forecasts that topped analysts’ estimates and raised guidance for the year,” reports Bloomberg.

Earnings are expected to fall this year, then experience very aggressive growth in the next several years.

The stock has been in a trading range since December and appears to be breaking out on the upside today.  Experienced aggressive growth investors should consider jumping in on a pullback to $46.

Our Ransom Note trendline says..... BUY SALESFORCE.COM.

CRM Chart

CRM data by YCharts

Stock number three is:

Krispy Kreme Doughnuts Inc. , (SYMBOL: KKD ) and the headline says: Krispy Kreme Falls After Results -- Reuters

Sweet treat-maker Krispy Kreme reported second-quarter profits that missed analysts’ estimates, falling 4.3% due to increased costs.  Revenues were slightly higher than last year, and same store sales rose 10%.

"Earnings are now projected to grow 32 and 17 percent in the next two years.  The PE is 32."

After rising 148% this year, Krispy Kreme stock is down about 14% today.  Shareholders should be using stop-loss orders on any aggressive growth stock, and have a strategy in place for the eventual downturn or sideways movement after big price run-ups.

Our Ransom Note trendline says....  STAY ON THE SIDELINES.

KKD Chart

KKD 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.