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Follow on Google News | Stock Market Churns, but Business at These Companies Couldn’t Be BetterAs much as the economic analysis and news dominate the headlines, it’s important to follow what’s really happening at real companies in order to gauge the current state of things.
By: Mitchell Clark However, as much as the economic analysis and news dominate the headlines, it’s important to follow what’s really happening at real companies in order to gauge the current state of things. I always follow a number of what I call “benchmark companies,” and their trading action helps define my overall stock-market view. I always follow International Business Machines Corporation (IBM) (NYSE/IBM), which is a super large-cap, technology-services powerhouse. If business is good at IBM, then it’s generally healthy in the rest of the information- Another company that I like to keep an eye on is E. I. du Pont de Nemours and Company (NYSE/DD), which is always known as just DuPont. This $48.0-billion company has been a solid dividend payer (currently yielding about 3.2%), and I like following this business because it operates in agriculture, chemicals, communications, safety and protection, apparel and construction. It’s a well-managed company with the pulse of the industrial economy. In its first quarter this year, DuPont’s revenues grew an impressive 18% over the comparable quarter to $10.0 billion, based on a nine-percent increase in volumes and an eight-percent increase in prices. Earnings per share grew to $1.52 from $1.24 during the quarter, and the company increased its 2011 earnings guidance to a range of between $3.65 and $3.85 per share from the previous range of $3.45 to $3.75 per share, excluding the impact of acquisitions. The stock has been really solid, no doubt due to its higher dividend, and over the next five years, the company’s earnings are expected to grow about 10% annually. Finally, I find it very useful to follow a railroad company, because whatever’s happening in the economy, the railroads see it first. CSX Corporation (NYSE/CSX) is a good one to follow because its business is located throughout the more heavily populated eastern U.S. and Canada. Business conditions at CSX are a good indicator for the rest of the economy. This stock has been a powerhouse wealth creator (with the exception of the stock market’s collapse during the financial crisis), and the stock is trading just a few points below its record high. The company reported that it expects annual double-digit growth through 2015 and that the fundamentals for the industry couldn’t be better. So, if IBM, DuPont and CSX were the economy, you would say that business is great. It makes me think that the current trading action in stocks is just the usual lull between earnings seasons. With corporations not saying much, investors tend to focus solely on the bad news. According to my benchmarks, these businesses are going full steam ahead. Retire on This One Hot Stock! This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173.57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today. Get your FREE report on our top stock pick immediately here. http://www.profitconfidential.com/ # # # We publish Profit Confidential daily for our customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! Visit our site: http://www.profitconfidential.com/ End
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