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| Stock Picks by Value Engineer |
19 February 2008
Each listed stock has the good potential to be a profitable trade for the timeframe of one year. Some have been sold off for tax loses to low prices. Some events such as management change or government rules governing the company make them more attractive. All the user of the list has to do is be even more selective, and narrow the list to a fewer stocks by doing more research. However, the full list will always be more balanced than a list with fewer stocks. I recommend buying either the entire list or at least half the list to include as many different industries as one's funds can allow.
| 10. | Xinhua Finance Media Ltd (XFML) |
| Industry: | Advertising Agencies |
| Current Price: | $4.58 |
| 52-Wk Low: | $3.65 |
This stock remains a busted IPO down from a high of $13.00. The price appears reasonable for a Chinese Media company with 2008 earnings estimated at $0.63. Ron Burkle's Yucaipa owns a stake in the company acquired at $9.05. President Bill Clinton serves as an advisor to Ron Burkle's Yucaipa Company.
| 9. | Sun-Times Media Group Inc (SVN) |
| Industry: | Publishing - Newspapers |
| Current Price: | $1.33 |
| 52-Wk Low: | $0.85 |
This risky stock appreciated greatly since early December. Soon Conrad Black, the former CEO, will be going to prison. Investors are hoping with legal problems no longer taking up management time, that management will concentrate on returning the business to profitability. The company should recover some of the loot from Conrad Black, and funds invested in Canada in Structured Investment Vehicles should be released as the subprime crisis abates. This company appears to have enough cash to stay in business a few years and return to profitability. Also, the FCC recently revised ownership rules to allow newspapers and broadcasters in large cities to be owned by a company.
| 8. | Office Depot Inc (ODP) |
| Industry: | Specialty Retail |
| Current Price: | $14.10 |
| 52-Wk Low: | $10.80 |
Office Depot, Inc. owns a majority stake in AsiaEC, a supplier of office products and services in China. The US housing market decline has been factored into the stock price. It may trade near the current level until investors see signs that the US housing decline has ended or housing is stabilizing.
| 7. | Pfizer Inc (PFE) |
| Industry: | Drug Manufacturers - Major |
| Current Price: | $22.33 |
| 52-Wk Low: | $21.56 |
Pfizer, a global pharmaceutical company with a dividend yield of 5.60%, has turnaround potential. The research department has been streamlined to produce faster results.
| 6. | McMoran Exploration Co (MMR) |
| Industry: | Independent Oil & Gas |
| Current Price: | $16.72 |
| 52-Wk Low: | $10.70 |
May finally get it right. If they cannot find it, they will have it shipped to them at the Main Pass Energy Hub. As per the report December 3, 2007 edition of Barron's this stock could fetch $18.00 soon. It could be a good takeover play for a natural gas explorer not at the top of its price.
| 5. | Idearc Inc (IAR) |
| Industry: | Business Services |
| Current Price: | $9.08 |
| 52-Wk Low: | $8.55 |
This stock is recovering from fresh 52-week lows. Idearc, a phone book company with a growing internet business, has a dividend yield of 14.50%. However, the company has a lot of debt making it suitable for only risk-tolerant investors.
| 4. | H&R Block Inc (HRB) |
| Industry: | Personal Services |
| Current Price: | $18.65 |
| 52-Wk Low: | $16.89 |
A change in management has been forced on the company by disappointed investors. Hope for the new year is that new management will bring the stock price up to much higher levels. Business may be sold off to raise cash to offset loses in the Option One sub-prime mortgage businesses.
| 3. | Gannett Co Inc (GCI) |
| Industry: | Publishing - Newspapers |
| Current Price: | $31.90 |
| 52-Wk Low: | $31.97 |
This stock is trading at its 52-week low. The FCC recently revised ownership rules to allow newspapers and broadcasters in large cities to be owned by a company. Gannett, with a dividend yield of 4.80%, trades at only about 0.83 times book value. Earnings growth will be difficult for this owner of newspapers. However, it is more protected than most newspapers being in smaller cities with limited competition.
| 2. | Franklin Street Properties Corp (FSP) |
| Industry: | REIT - Diversified |
| Current Price: | $12.82 |
| 52-Wk Low: | $12.43 |
Near its historic low for the year. The company has little debt and book value is $11.00. The dividend yield is 9.40% making it an attractive investment for IRA's or individuals in low tax brackets.
| 1. | Discover Financial Services (DFS) |
| Industry: | Credit Services |
| Current Price: | $14.23 |
| 52-Wk Low: | $10.94 |
The Discover Financial Services spin off from Morgan Stanley was completed on June 30, 2007. The stock closed at $25.64 on the July 2, 2007, the first day it traded as an independent company. This stock has been trashed. At the current price levels, the credit card company stock is now reasonable for a acquirer or any investor to wait out the fate of the company.
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