Negative News Starts off Profits Report Period
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The week started down on Wall St after Alcoa's worse-than-expected profit report and Chevron's profit warning worried investors at the start of the quarterly profit reporting period. Investors didn't seem too concerned on Thursday as the negative news continued. The Commerce Department said total retail sales fell 0.3% to $353 billion last month, compared with November's upwardly revised 1.8% jump. On the jobs front a report from the Labor Department showed that there were 444,000 initial job claims filed in the week ending Jan. 9, up 11,000 from a revised 433,000 the previous week.
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As the New Year starts, we are looking at companies that are going through change. How their change has been received by investors and what the implications are under the surface, are the difference-makers. Our Bullish pick this week has a promising future as it increased its product pipeline with a smart acquisition in 2009 and looks ready to come back roaring in 2010. Our Bearish pick, also going through changes, has investors already buying up shares and expecting a great year. The expectations for these two companies are significant, but once you look deeper, you see that one has clearly much more potential to succeed, while the other is more likely to fall short. |
 Pfizer (PFE) -
Pfizer may seem to be climbing the charts the last few months but the truth is that it's currently at 10 times earnings, a decade ago it was at 35-45 times earnings. Investors at the time were overpaying because of overly optimistic earnings but the truth is that even at its current 52 week high, Pfizer has room to climb. They cut their dividend last year because of a great opportunity to acquire Wyeth. The move is paying off, as they are adjusting and cutting costs. The dividend will most likely be going up again soon.
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 Ford (F) -
Ford has been getting love from investors and critics alike and their stock price is up
big. It seems they have been making all the right moves to get the company back to
prominence. However, Toyota and Nissan are also gearing up and the main competition for Ford is domestic. General Motors is now poised for a comeback; they are about to payback government loans and have competitive models set to release. Ford is also banking on their move to small, gas efficient cars as their primary revenue, moving away from their trucks. This is may be a painful transition even if Americans are willing.
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