Geopolitical tremors out of Russia and the Ukraine have shaken up the markets today, so the major indices are off about 1%. If the recent bumpiness has you nervous, you can keep this in mind: I do expect the U.S. economy to heat up once we’ve put this severe winter weather behind us. So while we may see some near-term bumpiness in the market, I’m optimistic that we’ll weather those dips just fine and have a good first half of 2014 and beyond.
Even though the stock market might be oscillating day to day, volatility is now moderating and I suspect that we can use these daily oscillations to step up and buy these premium stocks.
But before you buy, let’s look at the 50 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.
Upgrades������� Last Week’s Holds Now Buys
Hot Semiconductor Stocks To Invest In 2015: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Evan Niu, CFA]
If the approach sounds familiar, it's because it's the same marketing message that Apple (NASDAQ: AAPL ) has been making for the past few months with the iPhone 5. The Mac maker sells the one-handed capabilities of its new flagship, saying that "if you go large for large's sake, you end up with a phone that feels oversize, awkward, and hard to use." You can debate all day as to what the "just right" size is, but chances are it won't be close to phablet caliber for the average consumer.
Top Blue Chip Stocks To Invest In 2014: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.
Advisors' Opinion:- [By Kelley Wright]
Chevron (CVX) is just a beast. There's a lot to like here: A $4.00 per share dividend; an S&P ��+��Quality Ranking, and a Dividend Aristocrat to boot. A must position for a quality portfolio.
- [By Robert Rapier]
Initially, Transocean Partners is to own 51% of three ultra-deepwater drilling rigs currently operating in the US Gulf of Mexico. Transocean will own the remaining 49% of each. The rigs currently operate under long-term contracts with�Chevron�(NYSE: CVX) and�BP�(NYSE: BP) with an average remaining contract term of approximately four years.
- [By Ben Levisohn]
Howard Weil’s Blake Fernandez�explains why he prefers ConocoPhillips to�other oil companies like Total (TOT) and�Chevron�(CVX):
After years of portfolio rationalization, concerns re: dividend coverage, etc. the asset base is now poised to deliver 6- 10% cash flow CAGR through ��7 from a combination of 3-5% production growth and 3-5% margin expansion. Additionally, our confidence in the Company�� unconventional prowess is increasing based on the recent analyst day presentation, higher production targets and efficiency gains in the underlying assets…
- [By Ben Levisohn]
The Fed surprised the market when it decided taper, sending stocks down, then up, as investors took note of the Fed’s dovishness. Goldman Sachs (GS) and Chevron (CVX) rose.
Top Blue Chip Stocks To Invest In 2014: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Selena Maranjian]
Other large-cap stocks didn't do quite so well over the last year but could see their fortunes change in years to come. Philip Morris International (NYSE: PM ) , for example, gained 5% and yields 4.1%. With domestic tobacco companies challenged by tightening regulations, rising taxes, and a shrinking smoking base, many have assumed that Philip Morris is the best bet in tobacco. But in the third quarter, it posted the weakest results, with volume taking a sizable drop and a strong dollar reducing its earnings. Bulls like its innovation and share buybacks.
Top Blue Chip Stocks To Invest In 2014: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.
Advisors' Opinion:- [By Alex Planes]
Technology and pharmaceuticals gained a permanent foothold in the Dow Jones Industrial Average (DJINDICES: ^DJI ) on June 29, 1979. The index added IBM (NYSE: IBM ) and Merck (NYSE: MRK ) that day, replacing floundering automaker Chrysler and food-products company Esmark for only its second component swap in the previous 20 years -- still the slowest rate of changes in Dow history.
- [By Dan Caplinger]
But amid the euphoria, it's important to keep a sense of perspective, and two of today's losing stocks make a more bearish case about prospects for the U.S. stock market. IBM (NYSE: IBM ) was the worst performer in the Dow today, falling almost 2% after a Wall Street analyst downgraded the stock, citing sluggish emerging-market business activity. The drop comes after two straight days on which IBM has announced acquisitions, with today's purchase of private virtual-management company CSL following yesterday's closing on its buyout of SoftLayer Technologies, a cloud infrastructure company. Given the amount of influence IBM has on the Dow, a failure of the company to execute on its earnings-growth promises could point to difficulty throughout the tech sector, hurting one substantial contributor factor in the Dow's four-year bull market.
- [By Rich Smith]
IBM (NYSE: IBM ) is going to buy cloud computing provider�SoftLayer.
For months, reports have been circulating that IBM and EMC were competing for the right to acquire privately held, Dallas-based SoftLayer, which provides an infrastructure for cloud-centric, performance-intensive applications for�mobile computing and gaming,�social�media, and�analytics. However, an EMC spokesman said today the company was not competing with IBM. "EMC was initially approached, uninterested and decided not to bid," said Senior Director for Public Relations Dave Farmer.
Top Blue Chip Stocks To Invest In 2014: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Dan Caplinger]
Lately, Johnson & Johnson has presented two different faces to investors. On one hand, the company has faced the challenge of dealing with a weak consumer-products business, as multiple recalls and close regulatory oversight of its production facilities have exacerbated J&J's problems. With its more focused consumer-goods business, Colgate-Palmolive (NYSE: CL ) has worked harder at taking advantage of international growth opportunities than many of its rivals, and Colgate's strong overseas sales, in comparison to J&J's international weakness, show the effectiveness of that strategy. In particular, Asia has been a focus point for Colgate, with revenue from the region having risen 9% year over year compared with less than 3% growth overall. Moreover, Latin America represents Colgate's biggest region for sales, with more than half again the revenue its U.S. segment produces.
Top Blue Chip Stocks To Invest In 2014: McDonald's Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
Advisors' Opinion:- [By Ben Levisohn]
Maybe McDonald’s (MCD) investors are loving after all.
APYesterday, McDonald’s dropped 0.3% after reporting same-store sales–and Barron’s panned the stock. Today, however, McDonald’s shares have gained 3.5% to $98.56, leaving Burger King (BKW), which has ticked up 0.3% to $27.63, and Wendy’s (WEN), which has dropped 1.1% to $9.30, in their dust.
Sterne Agee’s Lynne Collier and Wesley Carmichael explain why investors enthusiastic about McDonald’s prospects:
We are incrementally more positive on MCD following today’s comments from CFO Peter Bensen at the Bank of America Consumer Conference. Most importantly, Mr. Bensen spoke about the Company’s investigation into increasing leverage in the capital structure, which we believe could result in increased return of capital to shareholders…
Still, McDonald’s has dipped 0.4% during the past 12 months, even as Wendy’s has surged 70% and Burger King Worldwide has jumped 49%.
The question now: Is this the beginning of a new trend for McDonald’s?
- [By abirk] and operates in approximately 34,000 restaurants in 120 countries around the world. Recently, most of the company's growth efforts has been concentrated abroad, and international growth has been booming.
However, the company has the resources and innovative muscle to acclimate itself to the challenge. It now needs to exhibit the patience and determination to keep experimenting with its menu and alternative revenue streams to preserve its vaunted, decades-long success.
Raining Dividends
McDonald�� is a dividend rich company. The dividend has grown from $2.05 a share in 2009 to $3.12 for 2013, a CAGR of 11%. The payout ratio has crept up from 49% in 2009 to 56% (projected) in 2013, which still leaves the company plenty of room to grow their dividend.
It is one of the highest-yielding stocks in the sector, and its current dividend yield is close to 3.4%. The company has a long history of growing its quarterly dividend, and its annual dividend increase comes after the third quarter of the year. At the moment, the stock pays an annual dividend of $3.24, up from $3.04 for the last year. Due to the solid dividend yield, the stock has attracted a large number of investors over the last few years.
Partnership Plans
McDonald�� Corp. is partnering with Kraft Foods Group Inc. (KRFT). to sell McCafe packaged coffee in U.S. grocery stores in various test markets. The coffee will be sold this year in whole-bean, ground and single-cup formats for use in brewers such as Green Mountain Coffee Roasters Inc. (GMCR)'s Keurig machines.
McDonald�� has been selling its McCafe beverages in its restaurants for several years, an effort to compete with big java-selling chains such as Starbucks Corp (SBUX) and Dunkin��Brands Group Inc. (DNKN). The move has been one of McDonald�� more successful initiatives in recent years.
Plans in India
MCD has a relatively small market in India, so the beef-centric fast-food chain plans
- [By Rick Munarriz]
Naturally, this leads one to wonder how Starbucks (NASDAQ: SBUX ) and McDonald's (NYSE: MCD ) -- two retail giants that have moved from traditional coffee to offer icy coffee beverages that have been sweetened -- as potential targets in the attack on caffeine.�
Top Blue Chip Stocks To Invest In 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By Ben Levisohn]
Financial stocks are taking the brunt of the damage this morning. The Financial Select Sector SPDR ETF (XLF) has dropped 1.1% to $129.83 at 9:38 a.m., making it the biggest loser among sector ETFs. Visa (V) and American Express (AXP) have dropped 1.8% and 1.7%, to lead the Dow lower.
- [By Ben Levisohn]
Last September, the folks who manage the Dow Jones Industrial average decided it was time to add some new blood to the venerable blue-chip index.� So in came Goldman Sachs (GS), Visa (V) and Nike (NKE), and out went Bank of America (BAC),�Alcoa (AA) and Hewlett-Packard�(HPQ).
- [By Reuters]
Steven Senne/AP BOSTON -- Companies that help Target process payments could face millions of dollars in fines and costs resulting from the unprecedented data breach that struck the retailer during the holiday shopping season. Investigators are still sorting through just how thieves compromised about 40 million payment cards and the information of about 70 million Target (TGT) customers. But people who have reviewed past data breaches believe Target's partners could face consumer lawsuits and fines that payment networks such as Visa (V) and MasterCard (MA) often levy after cybersecurity incidents. Target's partners "have deep pockets and are intimately involved in certain aspects of how Target gets paid," said Jamie Pole, a cybersecurity consultant in Asheboro, N.C., who works for government agencies and the financial industry. Fines and settlement costs could reach into the millions of dollars for individual companies, he said, though much will depend on how the ultimate liability for the breach is determined. Boston attorney Cynthia Larose of Mintz Levin said Target would likely seek to add its partners as defendants to lawsuits already filed over the breach. "These class-action lawsuits start to bring everyone in at some point," she said. After its systems were penetrated by hackers in the mid-2000s, retailer TJX Cos. (TJX) agreed to pay up to $40.9 million to cover fraud costs in a settlement with Visa. Visa also issued penalties of $880,000 against Fifth Third Bancorp (FITB) of Ohio, which processed transactions for TJX. Asked about the business relationships and possible costs, Target spokeswoman Molly Snyder declined to comment, citing the ongoing investigation and pending suits. A Visa spokeswoman declined to comment. A MasterCard spokesman said the company couldn't discuss an ongoing investigation. Handling Target Transactions Several companies are involved in any purchase from a store such as Target. A bank issues the consumer's payment card
- [By Grace L. Williams]
Many critics of that settlement have said Amex’s existing surcharging rules would prevent them from surcharging Visa (V) and MasterCard (MA) credit cards.
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