Short Week Ends on Market Drop |
In a short week with limited business stories, the most noticeable headline for investors was the employment report released on Thursday. The June employment report from the Labor Department showed a net loss of 467,000 jobs in June, making June the first month in four in which job losses rose from the previous month. The news sent stocks lower, closing out the week on a negative note. The dollar rose against the euro after the report. Oil futures extended their slide, falling $1.60 a barrel, nearing the $65 mark.
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This week for our Bullish pick we are looking at another energy company that has been a reliable performer, whose management has proven it can cope with all economic climates (including this one). The balance sheet on this company is strong and it has an unbelievable history of dividend payouts. Our Bearish pick for this week has been on our "bearish" radar ever since we looked at smart phones a few issues ago. At the time we were evaluating the awaited Pre from Palm and the affect on the smart phone industry. Although we did end up picking Palm as our bearish pick for that issue, it seems like the real loser will be this week’s selection.
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 Emerson Electric (EMR) - This is not the sexiest energy company, but it’s a safe company with a predictable business that should remain stable during times of increasing volatility. They have a history of growing dividends, increasing it for the past 52 years. Long-term EMR should see continued organic revenue growth from international sales, new product introductions and bolt-on acquisitions. The company has a good debt to cash ratio and has been beaten down in the past week, making this a good time for a buy recommendation.
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 Research In Motion (RIMM) - One thing that stuck out to us in our research a few months ago on Palm's Pre, is that although we don't believe that it would be replacing the iPhone as the "must have" communication gadget, the Pre might be a serious concern to RIMM and their smart phone line. The iPhone's popularity among consumers, the good review from Palm's Pre, along with the new Nokia messaging phone make one thing clear – either RIMM market share or profits are going to take a hit.
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