Top Stocks

By Richard Moroney, Dow Theory Forecasts

In a market where virtually everything has risen, where should investors look for the next move? By splitting S&P 500 ($INX) industries into defensive and cyclical camps, we found that cyclicals offer richer fields to plow for new investment ideas.

Below, we review four cyclical stocks that could be positioned for strong gains in the second half of 2013: BE Aerospace (BEAV), BlackRock (BLK), DirecTV (DTV), and Qualcomm (QCOM). Each are long-term "buys" on our recommended Focus List.

 

 

By Dana Blackenhorn

 

Increase efficiency, increase renewable energy production, increase production of oil and natural gas, and something has to get squeezed out, right?

 

That something is coal.

 

Over the last few years coal has been losing its U.S. power plant customers, and now export markets are weakening, creating what Michael Forbes of Marketintellegencer calls a "downward spiral."

 

BHP Billiton (BHP), the Australian company that is the only industry player to be opening new mines, is down 20% so far this year, and the company's website is now emphasizing work on oil and sustainability.

 

By Dhara Ranasinghe

 

U.S. hedge fund Third Point on Tuesday said it has lifted its stake in Sony (SNE) and urged the Japanese electronics giant to spin-off its entertainment business.

 

Sony appears to be regaining its competitive edge and as a sign of its increased confidence in the company, Third Point has raised its stake to 70 million shares valued at 136.5 billion yen ($1.4 billion), the hedge fund's CEO Daniel Loeb said in a letter that was seen by CNBC.

 

The billionaire investor reiterated his call to spin-off Sony's entertainment division and offer to sit on Sony's Board of Directors.

 

Information provided by Theflyonthewall.com 

By Richard Suttmeier

 

My suggested allocation to stocks continues to include at least 50% out of the market in cash equivalents. Part of the amounts invested in the stock market should be allocated to buy-rated stocks in the Dow Industrial Average ($INDU).

 

On May 22 when I wrote on TheStreet about allocating assets to "buy"-rated Dow stocks, there were 15 "buy"-rated names to choose from. Today, the ranks of the "buy"-rated companies has thinned to 10, which is a warning that the stock market could be vulnerable in the second half of the year.

 

By Louis Bedigian 

Information provided by Theflyonthewall.com

Tuesday's noteworthy upgrades include:

• Flir Systems (FLIR) upgraded to Strong Buy from Market Perform at Raymond James
• HSBC (HBC) upgraded to Buy from Neutral at Citigroup
• Royal Dutch Shell (RDS.A) upgraded to Focus List from Outperform at Howard Weil
• Statoil (STO) upgraded to Outperform from Sector Perform at Howard Weil

 

By Bret Kenwell

Have you ever tried to look at the investment world through a child's eyes?

What would our kids buy if they were in our shoes? Not what stocks children should buy, but what they would buy. You might be shocked at some of the quality choices that come about.

It's almost a given to begin with Walt Disney (DIS). The House of Mouse is a company almost every kid knows. While the first thing that comes to mind is Disneyland in California or Disney World in Florida, the network shows and animated movies sure do hit home for most kids.

 

By George Putnam, The Turnaround Letter

With the stock market continuing to surge, it has become more of a challenge to find stocks trading at attractive valuations. One group that recently caught our eye is the major integrated oil companies.

Most of the stocks in this group have underperformed the S&P 500 Index over the past year, many by a significant margin. These stocks have the added benefit of paying relatively high dividends. Although they may be market laggards at the moment, we like the long-term prospects for the big oil companies.

Demand for oil (and natural gas, which many of them produce in addition to oil) is likely to keep rising for the foreseeable future, particularly in the developing countries.

 

By David Goodboy

It was September 2008, and the stock market was in chaos.

The Dow Jones Industrial Average ($INDU) experienced its largest point decline, plunging 777 points in just one session. The support of the 50- and 200-period moving averages were slashed like a hot knife through butter, while the Volatility Index ($VIX) rocketed through technical resistance as if it wasn't even there. The financial media was full of pundits declaring a complete technical breakdown in the stock market.
 
Many were left asking what it all meant. Part of what it meant was that the once esoteric quasi-science known as technical analysis had gone mainstream. 

Anyone who has been following the Market Volatility Index ($VIX) and VIX-related ETFs over the past year knows that these instruments have been decimated. Usually, investors who buy VIX or its related instruments do so as a hedge against risk, and they normally use only a small part of their portfolio to do so. But a decline like the one we have seen over the past year can make an investor who has only a small amount allocated to this hedge raise his eyebrows.

In every respect, this is understandable. The moves are aggressive, and some of the instruments related to VIX are leveraged two and three times as well. That multiplies the risk, of course, but it also multiplies the risk control if the market begins to experience problems.

 

Can you ride out the end of bond buying?

 

We just had a correction based on that concept and I think the answer for most stocks is no, not if it is going to go on for months and months, which is what I would fear.

 

That's why I think you have to accept the fact that raising cash on days like Monday in the groups that were hardest hit makes a ton of sense.

But what acted well in the downturn? What didn't give up the ghost? Two groups: tech and banks.

 

By David Sterman

Will interest rates continue their recent ascent?

If so, many investors will come to question the wisdom of holding dividend-paying stocks. After all, bonds and CDs are virtually riskless, and if they sport more attractive yields, why bother with riskier stocks?

The simple reason: Interest rates (such as on the 10-year Treasury note) are unlikely to move past 4%, as I noted recently on StreetAuthority.

 

By Matthew Kanterman

U.S. equity futures rose slightly in premarket trade Tuesday as investors eagerly awaited the Federal Reserve policy decision and statement Wednesday. Monday trading was a whip-saw marked by a steep sell-off over tapering fears.

In other news, the German ZEW Economic Sentiment Index rose to 38.5, beating expectations of a reading of 38.1 and better than the prior 36.4.

European Central Bank President spoke in Jerusalem overnight and hinted that the long-term refinancing operations could be extended as a means of providing additional bank liquidity. Speculation had grown that the ECB could do this however it is the first time Draghi has addressed it directly.