In tough markets there are three types of investors; Bulls that remain in denial, those who sit in cash, and savvy investors who shift toward defensive stocks. Bulls are hard to find these days, sitting on the sidelines isn’t rocket science, so lets take a few minutes to talk about developing a good defense.
First things first, what is a defensive stock? These companies do not manufacture weapons or design body armor, they are stocks that provide a constant performance in bull and bear markets. A low P/E ratio, steady dividend, and low beta are the hallmarks of defensive opportunities.
A Quick Lesson on Beta
While stocks with low betas will, by definition, miss out on some upside when the markets rise, but they avoid the dips that hit most others. Beta is calculated by comparing percentage changes in a company compared to percentage changes in the market for a given period of time.
For example, a stock with a beta of 0.5 has experienced swings half as much as the market, on average. If the market climbs 10%, the stock only gained 5%, but it works coming down as well. When the market dropped 10%, shares only lost 5%. This is seen in non-cyclical stocks with steady performance.
Non-cyclical stocks often offer goods and services that are always in demand. If the economy is slowing down people are still eating dinner when they get hungry and, despite energy prices, probably haven’t switched to candle light just yet. As one can imagine food and utility companies weather economic storms better than most other industries.
Selecting Defensive Stocks
The logic makes sense, but selecting the individual investments is where most run into trouble, making stock screeners an invaluable tool. Below are a few companies in historically defensive industries, with low betas, low P/E ratios, and currently hold a Zacks Rank of #3 or better.
Four Defensive Stocks
AstraZeneca PLC (AZN) has a beta of .36 and a P/E just under 9x. The stock is up about 5% on the year compared to the markets, well we all know how that is going. AstraZeneca develops and sells pharmaceuticals and vaccines. Patients don’t stop taking medicine in tough times, in fact for prescriptions like Nexium, which treats gastrointestinal conditions, sales may even spike.
Elizabeth Arden, Inc. (RDEN) is a cosmetics company that is about flat for the year. Make up is another defensive industry as The stock has a P/E under 11x and a beta of .61. Earnings estimates have been climbing and the consensus is now a 50% year-over-year increase for the current quarter.
Universal Corp (UVV) is trading at under 10 times earnings, and has a beta of .6. The international tobacco processing company has the luxury of very consistent demand in all economic conditions.
Overhill Farms, Inc. (OFI) has more than doubled in value this year. The frozen food supplier for prominent chain restaurants, like Panda Express and Carl’s Jr, in addition to retail and food services. Overhill’s beta is just under 0.5 and the P/E is 7.2x.
What’s the difference if I invest now or if I wait a year? The difference can be quite substantial. If you still have a long time until you retire, or if you are retiring in the near future, investing now will benefit more than if you waited 1, 2, 3, or more years to start.
Time is money; it’s the simple truth. We spend our time working and are paid for it. It takes time for a writer to write a book that they eventually collect royalties on. A teenager spends a few hours of her time watching kids and is paid for it. You have to give up some time to make money.
Investments are the same way. You can’t buy a stock and expect it to go up 50% in the next 10 minutes. It takes time for the return to accumulate. While you don’t have to directly work hours and be paid, you do have to put some thought into investments and wait.
The younger you are, the more money you can make. Just like investing more will likely make you more, waiting longer will make you more as well. If you want to know the true power of investing right now, just look at this example.
Let’s say you are 25 years old. You plan on retiring at the age of 65 in 40 years. You decide to invest $500 every year for those 40 years and expect an average return of 9%. Over the 40 years, you will have invested a total of $20,000. In 40 years, you will have approximately $182,000.
Now let’s say you decide you can’t invest that much right now because you are just having too much fun spending money. Instead, you wait until you are 35 to start. You will invest the same amount of money overall, $20,000, but because you waited 10 years, you invest more per year equal to about $667 a year. You can’t possibly earn that much more with an extra 10 years, right?
If you invest $667 a year for 30 years, you will have approximately $98,000 by the time you retire. By waiting 10 years to start investing, you lost about $84,000. You invested the exact same amount, but with more time, you made $84,000 more. That is the power of time plus compounding. Compounding means you continue to earn money on the money you already earned on top of the principle. The more time you have, the more time you money has to earn.
This doesn’t mean you have to invest $500 a year. You could invest more or less. The point is, you need to make plans and goals NOW. Don’t wait until it’s too late. You don’t have to be cheap and live like a mortar in order to invest enough, just budget your money and start investing now. By the time you retire or need to buy a house, you will be so happy you did.
The Stock Trader’s Almanac calls it the worst performing month of the year, but that is not always the case. During the late 1990s, September was great for stocks. The past couple of Septembers have also yielded positive returns.
The month corresponds with the peak of hurricane season, however. Though oil prices have pulled back from their record highs, any disruption to supplies could send crude prices gushing. Let’s hope the damage from Gustav is minimal.
Regarding the current economic environment, the general expectation is that data will not be very good over the next several months. But, relative to other periods of weakness, the economy is in pretty decent shape. Hidden behind the headlines is the simple fact that unemployment remains at favorable levels. Plus, most homeowners are current on their mortgages.
On a technical basis, we are entering September in a low-volume trading range. Therefore the charts aren’t telling us very much.
My best guess is that we will probably see more choppy markets in September and throughout the fall. Nonetheless, the U.S. markets appear to be the best game in town. Therefore, keep money allocated to U.S. stocks. Long-term investors will be rewarded for doing so.
The Markets
Since I’ve been talking about the late-summer trading environment during the past couple of weeks, I thought it might be more useful to show a chart of SPDRs (SPY), the ETF that tracks the S&P 500, rather than the index itself. Doing so will allow you to view the volume trends that I have been noticing.
Recent Additions to the Focus List
On Thursday, we added four stocks to the Focus List – the most we have added on a single day in quite some time.
There were two primary reasons for this. The first was that the current market environment has discounted companies with positive business momentum and rising earnings estimates. The second was that we saw the opportunity to improve the diversification of the Focus List.
The new additions are Edison International (EIX)- an electric utility, Kansas City Southern (KSU) – a railroad, Fluor (FLR) – a construction and engineering firm, and Metalico (MEA) – a scrap metal processor.
At 29 stocks, the portfolio is still a little smaller than I would prefer. My preference not to overweight basic materials and energy is keeping us out of several Zacks #1 Rank (”strong buy”) and Zacks #2 Rank (”buy”) stocks. There are others, like Visa (V), that we want to look at closer before making a final decision.
My intention is to use any additional market weakness as a buying opportunity. Of course, we will execute stop losses when necessary.
Priceline.com
We sold Priceline.com (PCLN), a stock that was added to the Focus List in Nov 2005. Our concern was that the weakening global economic environment has increased the downside risk for the stock. Given this scenario, we saw little reason not to lock in a nearly 300% return.
If you enjoy watching the equity markets, the last few weeks have provided quite the show. Between still another bank failure, lower housing prices and rising commodity prices, its been a challenge to make some money in this environment. While its easy to say go short or go long, the wild price swings in the markets made it downright tough trying to make a few dollars. Shares would move up 1%, then down 1.5% then rocket back up again – all in the same day.
So what is a trader to do?
It doesn’t matter if you trade penny stocks, look for a “safe” mutual fund at the mutual fund store, or are just looking to protect your capital, you need a plan.
There are really 3 choices in front of you. Depending on the degree of risk, the depth of your pockets and how long until you need the money, one of these situations will fit you perfectly. However, there is a cost.
First choice: Go long…
The markets have always gone up. Sometimes, it just takes a little longer. And sometimes, it you will hit major lows before making newer highs. It all depends on perspective. If you bought shares in some high flyers during the late 1990’s and held, you’re probably still in a loss position. If you bought in 1995, you’re probably still sitting pretty, despite the very high levels of 2000. Will this time be different? Who knows. When the stock market crashed in 1929, it took over 15 years to get back to that level. If you have time on your side, going long works.
Second choice: Go short…
We’re in a bear market. Don’t confuse a move up with the end of a bear market. Most often, its just a signal to go short again. I like ETF’s like DXD, QID and SDS, since they allow me to go short, by going long since they act inversely to the market they are following. Keep in mind that they are designed to provide twice the inverse return of the markets they are following. If the Dow Jones moves lower by 1%, DXD will move higher by about 2%. Conversely, if the Dow moves up by 1%, this etf will move lower by 2%. Its not out of the question to see these ETFs move direction by 5-10% a week. Great if you’re in position when the trend is moving higher, catastrophic if the market is moving lower.
On other thing to keep in mind about ETFs: You can lose money, even when you break even. For example, lets say DXD moves down by 10% this week, and recovers 10% the following week. You would think you’d be even. You’d be wrong. If DXD is trading at $100, and loses 10% of its value, its worth $90. When it moves up by 10%, it moves to $99 – 1% short of break even.
Your third choice: Keep your cash
Yeah, its not as sexy and thrilling as trading, but right now, its the smartest thing you can do. The stock market will be around for awhile. Its better to keep the powder dry and when the market gains some footing, you’ll be ready to make like a bandit. Remember, we wont hit a bottom, until everyone gives up on the stock market. Without capitulation, we’ll see many more bear traps. Play it smart, and be ready to pounce when the time is right.
Bear markets have been as short as 2 months and as long as 5 years, the average being about 18 months. This current bear is already the longest in 60 years, which of itself suggests that although we may see what many analysts call a new bull market, it will more likely resemble those baby bulls of the 1930s and 1970s than the major bull market of the 1990s. Also, it should be noted that, in the 20th century, markets were in a bear phase for 341 months (i.e., 28 years of bear markets), and, in the last 90 years, we have been in bear markets 35% of the time. If that statistic doesnt change your belief in a buy and hold investment strategy, nothing will.
Clearly, this makes the stock market a dangerous place with a pitfall hidden under every third stepping stone. Not only does it mean the permanently bullish investor only has two chances in three at best, but when you consider that the depressed psychological climate at bear market bottoms prevents the majority from investing at the best time, it means that, by the time the majority of investors recognize a bull market is present, it is half-gone. But by showing you how to face bear markets with confidence, and make money in them.
True Risks are Staggering
The situation is made worse by the fact that the average investor (90% of investors) cant be expected to spot the exact top of bull markets and sell out in time. This means he loses much of the prior rise before he does sell. A professional man, a physician, who throughout the late 1990s prided himself on his ability to trade online, admitted to me a few months ago that: I havent sold anything because what would I do with the money?
Then, a month after the September 11 attack, he remarked that it was only on October 1 (i.e., 3 weeks after the attack) that he had the courage to switch on his computer to check the prices of his stocks! His reactions, which I am sure were echoed by millions of investors across America, surely explode the myth that you can just invest and sit and wait. Everybody needs a plan, one that includes strategies for selling as well as buying and (once understood) for selling short when that seems to be the prudent course of action. Without a plan of action, when the unexpected occurs, when markets suddenly fall, or terrorist attacks strike, that is not the time to think up an investment strategy. It is a time to act on realistic strategies for both bull and bear markets that you had already decided upon, when you were feeling less stressed.
The big bailout will be a key focus of the markets.
Congress is expected to meet over the weekend to discuss legislation proposed by Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. The details of the proposal, and any additional measures designed to help homeowners struggling with mortgage payments, could impact market direction.
The temporary ban on short selling could also affect trading early in the week. Part of Friday’s rally was the result of quadruple witching. Traders are being forced to close short positions rather than roll them over into new contracts.
On the earnings front, we have confirmed reports from 33 companies. Included in this group are S&P 500 members Autozone (AZO), Bed Bath & Beyond (BBBY), Discover Financial (DFS), Jabil Circuit (JBL), KB Home (KBH), Lennar (LEN), McCormick (MKC), Nike (NKE) and Paychex (PAYX). I expect only limited reaction to the homebuilders (KBH and LEN), because of the proposal under discussion.
The economic calendar includes two reports on August home sales, but is otherwise light.
• Wednesday: August existing home sales, weekly crude inventories
• Thursday: August durable goods orders, August new home sales, weekly initial jobless claims
• Friday: Final September University of Michigan consumer confidence survey, final Q2 GDP
Bernanke has three scheduled appearances before Congress.
On Tuesday, he will discuss the financial markets before the Senate banking committee. The chairman will provide his economic outlook to the Joint Economic Committee on Wednesday. Finally, on Thursday, Bernanke will review the recent proposals and actions before the House financial services committee.
Companies That Could Issue Positive Earnings Surprises
AutoZone Inc. (AZO) has topped market expectations twice in the last three quarters. Ahead of the company’s fiscal fourth-quarter report, brokerage analysts have raised their forecasts. The consensus earnings estimate now calls for earnings of $3.90 per share, a penny higher than a week ago. The most accurate estimate is even more bullish at $3.92 per share. Autozone is scheduled to report on Monday, Sep 22, before the start of trading.
Companies That Could Issue Negative Earnings Surprises
H.B. Fuller (FUL) recently cut its profit forecast, citing high costs of raw materials. The chemical manufacturing company now expects third-quarter earnings of 35 cents per share, excluding a tax benefit. Brokerage analysts responded by lowering their forecasts to 35 cents per share from 48 cents per share. FUL has missed consensus earnings estimates in two consecutive quarters. H.B. Fuller will report on Tuesday, Sep 23, after the close of trading.
The five best performing stocks on the Zacks #1 Rank List last week were: Collective Brands (PSS), Buffalo Wild Wings, Inc. (BWLD), Life Partners Holdings, Inc. (LPHI), Flir Systems Inc. (FLIR) and Shanda Interactive Entertainment Ltd. (SNDA).
Collective Brands (PSS) got some good news last week as Standard & Poor’s revised its outlook on the footwear and accessories retailer to “stable” from “negative.” Its credit ratings were also affirmed. The revision came after a judge significantly reduced a monetary award against PSS to $65.3 million from $305 million in a trademark infringement case with Adidas.
Shares of Collective Brands advanced 23.2% last week, making it a top-performing Zacks #1 Rank. Earnings estimates for this fiscal year, ending January 2009, are up 17.7% in the past month. In addition, expectations for next fiscal year, ending January 2010, are up 16.3% in that timeframe. At the moment, analysts are expecting profit for next fiscal year to advance approximately 18% from this fiscal year. For its fiscal second quarter, PSS reported an earnings surprise of more than 86% above the consensus while sales jumped 30%.
Buffalo Wild Wings, Inc. (BWLD) was featured as an Aggressive Growth Stock of the Day at Zacks.com on Sep 17, as it “has been climbing steadily following a strong earnings report and lower costs.” Last week, shares advanced 18.7%. Over the past 2 months, earnings estimates for this year and next are up 4.5% and 3.7%, respectively. Analysts expect next year’s profit to advance almost 21% from this year.
In late July, Buffalo Wild Wings announced solid second-quarter results, which included earnings per share of 31 cents that beat the consensus by almost 15%. In the year-ago quarter, BWLD earned 22 cents. Total revenue jumped almost 29% to $97.9 million. Other highlights in the quarter included a 29.5% gain in company-owned restaurant sales, as well as a same-store sales increase of 8.3% at company-owed restaurants and 4.5% at franchises. BWLD is confident that it can achieve its 2008 targets of 15% unit growth, 20% revenue growth and 25% net earnings growth.
Life Partners Holdings, Inc. (LPHI) expects record earnings for its fiscal second quarter. The company, a leader in the secondary market for life insurance, sees a 56% jump in net earnings during the quarter, as well as a 47% surge in revenues. LPHI stated that its business model deals exclusively with assets that have inherent value, and are not reliant on market performance. The company also said that its does not rely on credit to grow its business, so the tight credit market has had no negative impact.
LPHI made the Zacks #1 Rank Top Performers List for last week as shares advanced 12.9%. The one analyst covering this company has raised the estimate for this fiscal year, ending February 2009, by 5% over the past 2 months. Furthermore, next fiscal year’s profit is expected to advance by 15.7% year over year.
With shares that gained 10.4%, Flir Systems Inc. (FLIR) made the Zacks #1 Rank Top Performers List for last week. Earnings estimates for this year are up 5% over the past 3 months, including a gain of 2.4% in the last 2 months. Expectations for next year are up 9% and 4% in those timeframes, respectively. Next year’s estimates are currently 24% better than this year’s, which is an encouraging sign for the future.
One of FLIR’s most recent contracts includes a $96.6 million order for stabilized multi-sensor systems from the U.S. Army. The company, which makes thermal imaging and stabilized camera systems, has a good record of meeting or beating Wall Street’s quarterly earnings expectations. The past 4 quarters have amassed an average surprise of 7.1%. For its second quarter, FLIR announced earnings per share of 29 cents, which inched past the consensus by almost 3.6% while also topping the year-ago result. The company also increased its revenue and earnings guidance for 2008.
Shanda Interactive Entertainment Ltd. (SNDA) was a top performer last week as shares gained 9.5%. The company has enjoyed rising earnings estimates for a while, including gains for this year of 4.7% in 2 months and 3.8% in 30 days. Analysts have also boosted expectations for next year in those timeframes, and currently expect profit growth of more than 18% over this year.
Earlier this month, SNDA, which is a leading interactive entertainment media company in China, reported solid second-quarter results. Consolidated net revenues in the quarter advanced to US$122.1 million, while earnings per ADS of 56 cents easily topped the consensus.
Provided you know a few of the basics, investing can be a fun and safe way to make extra dollars whether in real estate or stocks and bonds. This is a long term strategy which a number of people are now learning to adopt when planning for their future financial needs. While the subject is very large, the information listed here is for guidance only and further information should be sought before you jump-in with both feet.
Research on how to invest is as important as in the areas you plan to invest in, especially when stocks are concerned as this can be one of the more risky areas to invest in particularly for first timers. While this is the traditional place to make money, there are many areas where a novice investor can stumble; let’s face it even the professionals get it wrong here sometimes. The safer option, and also one that can be used for long term profit as well, is real estate and buying a house can increase in value considerably. Buying a run down property can be considered a project and make a handsome profit when re-sold, if approached in the correct way and not with the lick-of-paint attitude which many fall foul of.
There can be many pitfalls involved with real estate investment but the next area is not as bad. Probably the fastest growing way is through trading online and it’s amazing how easily you can work your finances online, and make money without even leaving the house. Anyone trading online can first check the companies they are interested in, their growth and performance for example before they decide to invest with them, all of which can be done quickly and easily. It is not uncommon for people to become addicted to this in the same way a gambler does so you must stick to your limits and not go beyond them.
While some people may depend on luck, they are very few as most rely on ‘old fashioned’ graft by studying what it is they need to know about investing to make the money they have set out to achieve. Whatever field you find most interesting, the key to long term success is research, plain and simple. As usual, there is a huge amount of free information on the internet if you really want to learn more; remember, successful people do not use luck all the time! Always be aware that investing can be fun but it is easy to get caught up in the excitement and forget exactly how much money you are, in effect – gambling with.
One of Zacks.com’s several trading services, the Breakout Trader, recently received a boost in the form of a 19% return on a stock that was in the portfolio for a holding period that was a couple days short of just one month. The stock was American Science & Engineering (ASEI), and its share price is still rising.
Impressed by American Science & Engineering’s results, I set out to find similar plays, making sure the fundamentals were strong. After browsing several companies, it became evident that my screening strategy should be narrowed down to companies that, like ASEI, serve industrial markets.
With the use of Research Wizard, I found AZZ incorporated (AZZ) and Teledyne Technologies, Inc. (TDY). I also discovered that all three companies are makers of industrial electronic equipment or components, bringing to mind the only memorable part of the lyrics to the Electric Slide song…”it’s electric.”
These companies, however, are more than just “electric.” A closer look at the fundamentals and technical momentum behind these three stocks reveals that they are also electrifying.
American Science & Engineering, the impetus for this investment idea, boasts a history of contributing innovative technology to the fields of astrophysics, defense, education, medicine and security since 1958. Today, the company provides X-ray inspection systems and continues to innovate, create and develop new products by investing in new ideas through research and development.
American Science & Engineering’s (ASEI) X-ray inspection systems are used by governments and corporations around the world to combat terrorism, drug and weapons smuggling, illegal immigration, and trade fraud.
Technically, the Zacks #1 Rank (“strong buy”) company looks great. During the past 3 months, it’s share price spiked by 29% as the broader market fell.
The fundamental picture is a little mixed. Earnings misses over the past 4 consecutive quarters indicate that there is certainly room for improvement. However, rising Wall Street estimates for ASEI’s fiscal second quarter, third quarter and full year signal prosperity ahead. Analysts’ earnings expectations for the year ending March 2009 were up 1.3% over the past 30 trading days.
For the next 3 – 5 years, the company’s earnings per share are projected to grow by 17.5%.
If the company’s share price advanced on results that came in below the consensus estimate, should ASEI meet or surpass future forecasts, shares could skyrocket.
AZZ incorporated (AZZ), a global leader in the engineering and manufacture of electrical and industrial products, provides products and services to worldwide industrial markets with emphasis toward the generation, transmission and distribution of electrical power and the prevention of corrosion damage to steel products by hot dip galvanizing.
The company offers products through two distinct business segments, the Electrical and Industrial Products Segment and the Galvanizing Services Segment.
Of the three stocks, AZZ has seen the biggest return over the past 3 months as shares jumped 44%.
This company is also a Zacks #1 Rank (“strong buy”). On the fundamental front, the company has done well. It topped Wall Street estimates 3 times out of the past 4 straight quarters, matching the other time. On average, AZZ was ahead of analyst forecasts by 27% during the 4 quarters. Projections are also on the rise for this pick. For the full year, Wall Street is calling for earnings of $3.00 per share, versus the $2.37 two months ago.
The company’s earnings per share are expected to grow by 12% over the next 3 – 5 years.
Teledyne Technologies (TDY) provides sophisticated electronic components, instruments & communications products, including defense electronics, data acquisition & communications equipment for airlines and business aircraft, monitoring and control instruments for industrial and environmental applications and components, and subsystems for wireless and satellite communications.
This company, a Zacks #2 Rank (“buy”), has seen a share price rise of 13.5% over the past 3 months.
TDY eclipsed the consensus estimate by an average of 12% over the past 4 consecutive quarters. As the case with the aforementioned, Wall Street sees higher earnings ahead. Analysts hiked full-year expectations by 6% from last month’s level. Earnings per share are expected to grow by 14% over the next 3 – 5 years for TDY.
The industrial space these companies operate in is an appealing one right now even in the face of a slow economy. For more insight into the industrial products sector and additional plays on the field, check out a recent Zacks Industry Rank Analysis column written by Zacks.com Senior Market analyst Charles Rotblut, CFA. There you will find Charles’ written and video commentary on why manufacturers of industrial products, such as Cooper Industries (CBE), Mettler-Toledo (MTD) and Woodward Governor (WGOV), are enjoying positive business conditions.
Elasticity of demand is a concept that resides at the core of economic fundamentals. Simply stated, elasticity demand measures customer sensitivity to fluctuations in price. If price adjustments lead to a change in purchasing behavior, demand is considered to be elastic.
Demand sensitivity is a critical factor when evaluating a companies ability to navigate economic volatility, a dynamic that has become particularly relevant within the last year as our economy has muddled through a number of challenging circumstances.
Automobile makers are a good example of an industry that has been stung by demand issues. General Motors has been suffering huge losses due to higher energy prices, as its customers have shifted away from expensive, gas-guzzling SUV’s. Many retailers have also been suffering as cash and credit strapped consumers look for methods to cut costs and save money.
Elasticity and Healthcare
But in spite of the challenging environment, certain segments of the market have held up quite well and continue to grow profits. One of the best has been the healthcare sector, which has a number of factors working in its favor.
There is very little elasticity in this market. Wether oil prices are high and food costs are up, human beings will always need healthcare services. Demographics are also working in this industries favor, with a large portion of the domestic population, baby boomers, heading into retirement and stimulating demand for healthcare services.
So on that note, lets shift gears and look at some healthcare companies that have been scoring big gains and posting impressive results in this tough market.
Excellent Healthcare Stocks
ICON Plc (ICLR) operates as a contract research organization to pharmaceutical companies in the United States and Europe. The company’s July 22 second-quarter results were awesome, including 49% growth in revenue and earnings of 62 cents per share, ahead of analyst estimates of 59 cents per share. The next-year estimate is pegged at $1.61 per share, a 27% earnings growth projection.
Healthspring Inc. (HS) operates as a managed care organization in the United States. The company’s share price has had a great run in 2008, climbing from a low just over $13 to a recent high over $20. Analyst estimates have risen with the stock, with the current-year estimate advancing to $2.12 per share from $1.90 per share 60 days ago.
Almost Family, Inc. (AFAM) has also had a great year, posting impressive gains and driving its share price higher. The home healthcare services company reported awesome second-quarter results on Aug 6 that included a 95% jump in income, to $3.9 million from $2 million in the same period last year. The current-year estimate is up to $1.89 per share from $1.51 30 days ago.
Kendle International, Inc. (KNDL) is a clinical research company providing services to pharmaceutical companies worldwide. This is another company that has done well in 2008, as its stock price has advanced in tandem with higher earnings estimates. The current-year estimate stands to $2.04 per share, up from $1.89 per share 30 days ago. The next-year estimate is pegged at $2.51 per share, a 23% earnings growth projection.
Conclusion
Different industries will fall in and out of favor as economies rotate through their normal cycles. That is what it pays to be sector-centric and focus your attention on the segments of the market that have the ability to stay healthy and grow profits when other companies will struggle.
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