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.
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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.
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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.
