5/17/2013 9:00 PM ET|
Weyerhaeuser and 9 other hot stocks
One of the nation's largest owners of timberland appears on an MSN Money list of recommended stocks. Here are StockScouter's best investment ideas.
Weyerhaeuser's (WY) big bet on the housing market is starting to pay off.
Bowing to pressure from Wall Street to boost its languid shares, the company in recent years sold half of its assets -- most notably its paper and packaging mills -- and reorganized itself as a real estate investment trust (REIT), a move that gave Weyerhaeuser tax advantages and required it to pass along nearly all of its earnings to shareholders.
Left after the divestitures were primarily businesses tied to the housing market, including more than 20 million acres of North American timberland, as well as subsidiaries engaged in building homes and manufacturing housing products. It also kept its cellulose fiber business, which produces absorbent pulp for diapers and packaging for such things as milk cartons.
Weyerhaeuser's wager on housing coincided with a severe downturn in the economy that was precipitated when the housing bubble burst.
Now, a revival of the housing business is benefiting the Federal Way, Wash., company, which posted its best quarterly earnings since 2005 in the three months through March 31. It harvested more trees in the period and was able to charge more for logs sold in both the export and domestic markets.
Weyerhaeuser appears on a daily list created using StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude those with a trading volume of less than 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
In becoming a REIT, in 2010, Weyerhaeuser was following in the footsteps of Seattle-based Plum Creek Timber (PCL), which 11 years earlier became the first timberland owner to convert to a real estate investment trust. In subsequent years, other prominent forest-products companies, including Rayonier (RYN) and Potlatch (PCH), followed suit.
In making the conversion, the companies turned away from their longstanding preoccupation with felling trees and milling the logs into lumber and began harvesting tax advantages for investors instead. Forest land was increasingly seen as a financial, rather than an industrial, asset.
REITs have scant taxable income, channeling 90% of their earnings to shareholders -- who are taxed on the dividend income as individuals, thereby avoiding the "double taxation" on most corporate profits and dividend income.
Converting to a REIT opened Weyerhaeuser to a different class of investor: institutions and others seeking steady income through dividends as well as exposure to commercial real estate or mortgage financing.
Weyerhaeuser last month raised its quarterly dividend by 18%, citing "stronger market fundamentals" as well as improved operating results. First-quarter profits more than tripled on the strengthening housing market. The stock has a dividend yield of 2.5%.
Of the 15 analysts covering the company, three have "strong buy" ratings on the stock, seven have "hold recommendations, two rate it a "moderate sell" and three have "strong sell" recommendations.
Weyerhaeuser has a StockScouter rating of 9, meaning the stock is expected to significantly outperform the market over the next six months with less than average risk.
StockScouter top 10 for May 17
Oil and natural gas
News Corp. (NWSA)
Entertainment and media
America Movil (AMX)
D.R. Horton (DHI)
Phillips 66 (PSX)
Petroleum refining and marketing
Sirius XM Radio (SIRI)
StockScouter beats the market
Here at MSN Money, we think our StockScouter rating system is about as good as it gets when you're trying to decide where to invest. StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.
The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility. Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.
In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.
An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 976% through April 30, 2013.
Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool. Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
Performance through April 30
Full 50 position portfolio
Average annual return
Top 10 portfolio
Average annual return
Inception: August 2001
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yes all big and little companies Pay Tax, they pay an addition 7.65% above and beyond what is taken from your check, they pay unemployment so the unemployed can get a check, employers also pay FUTA Tax, if they earn income they pay upwards of 30 % of their income, they also pay sales tax ( collected from retail sales), there are several digfferant licences they pay for (not a tax) they employed YOU take tax from you and send it in, they pay Property Tax, They pay Gas Tax if the have trucks or cars.
Here is a simple list
Social security 7.65 % from you and they match it
Income Tax 9 if they earned money
Tax on their electricity, natural gas, oil, any purchases they make that are for their own use, they pay sales tax , etc.....
If i did not have to pay all these taxes my employes would earn at least 30% more than they do now and maybe even 50
The lead-in today (March 9th) is a story about 'homebuilder' D.R.Horton. Just a little heads up, in Baldwin County Alabama there is starting to be a backlash against them for the shoddy construction (done by crews that don't speak English and all use the same SS number). Illegal wiring, improper roofing (on the Gulf Coast and these clowns CLEARLY do not know how to roof in hurricane country), etc.
Gonna be bad when they get nailed to the wall for all the 'short cuts' they take.................
In a game where ethics are a hindrance, never bet against the devil.
I just wanted to tell anybody that might be interested in trading to go to the website Traders Superstore, I just recently bought from these guys and they are a class act, there video course really taught me a lot and their support is the best. Trading isn't as hard as I thought it was and the money is great!
Egghead, The Democrats have always worked hard to destroy the economy when they are not in power....once they gain control they tax the hell out of people to recover the losses, line their pockets and steal our freedoms...and yes the dems. love and support big business and big banks as long as the play along.
V_L, you are very naive when it comes to Politics, Finances and the Stock Market. It's as if you are a liberal idealog that has nothing invested therefore nothing to lose....maybe your fear is the lose of the freeride...or maybe just maybe you are a anarchist that thinks the fall of this Country's Banking System will somehow benefit you... I see you as a unhappy person that is not prepared for the future....yuk yuk.
Goldman sachs are the people which brought the crash of 2008, which us taxpayers paid for with our wealth of the country for these greedy SOB's who lost billions, their corrupt jacking of the books is the crime of the century against this nation. with TARPP and the out sending of our wealth, no way, we will have citizens arrests on these THIEVES at their offices and their homes, what kind of fools do you believe the american people are? fool us once, not twice.........
WHAT?!?! Goldman sux?
Guess who's account in Switzerland the insider trading of over a billion on the Buffett Heinz buyout the other day came from??
Goldman Sachs. and yes the SEC said this. FU goldman...wealth destroying idiots who deserve death or multiple life in "drop the soap" prison. jerks!
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