Where to Find the Cheapest, Safest Stocks
By Graham Summers
September 28, 2007
Now is the time to buy blue chips.
The volatility of the last three months has made trading a real challenge. Today, the S&P 500 is roughly at the same level as it was in the middle of May. However, between then and now, it's been a real roller coaster.
This is not a market for trading. This is a market for investing – for taking advantage of the market volatility to buy high-quality, profitable businesses on the cheap. And the bigger, the better.
That's because, typically, blue chips are more stable during market volatility. In fact, several members of the Dow Jones Industrial Average recently hit new highs: Proctor & Gamble, AT&T, and Coke. These three are getting expensive... but there are still plenty of cheap blue chips to choose from.
Large-cap insiders have taken note and are gobbling up stock. For the week ended September 10, large-cap insiders accounted for more than 70% of insider buying. The following week, they accounted for 66% of the total insider purchases.
And the Dow Jones Industrial Average is still trading for only 10 times cash flow: wonderfully low. Have a look at the Dow's 10 cheapest companies...
Company |
Symbol |
P/E |
Yield |
AIG |
AIG |
11 |
1.2% |
Citigroup |
C |
11 |
4.7% |
JPMorgan |
JPM |
10 |
3.3% |
General Motors |
GM |
12 |
2.9% |
ExxonMobil |
XOM |
13 |
1.5% |
Home Depot |
HD |
13 |
2.7% |
Alcoa |
AA |
15 |
1.8% |
DuPont |
DD |
14 |
3.0% |
Pfizer |
PFE |
10 |
4.8% |
Wal-Mart |
WMT |
15 |
2.0% |
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Many of these companies are in the holdings of the greatest investors on earth. Eddie Lampert owns Citigroup. Warren Buffett owns Home Depot and Wal-Mart. George Soros owns AIG, Home Depot, and ExxonMobil.
To some degree, these investors have to buy large companies. They manage massive amounts of money. However, they only put their money in undervalued, extremely profitable firms.
So, if you've been sitting on your cash since the market started going bipolar, now may be a great time to buy big. And these companies are an excellent place to start. Not only are they owned by some of the world's best investors, but they're cheap, too.
Good trading,
Graham
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China to Drive Iron Ore Prices Up 30%
Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd., the world's three largest iron-ore exporters, may increase prices by 30 percent next year as demand driven by steelmakers in China outpaces growth in supply.
Prices for benchmark shipments from Australia will rise to a record $66.40 a ton next year from $51.47 in 2007, according to the median forecast of eight analysts surveyed by Bloomberg. Sales may climb 11 percent this year as supplies gain 8 percent, Merrill Lynch & Co. estimates. Mining companies and customers begin annual contract talks next month for shipments from April. Read on...
Dubai Property Slows Down
Dubai's booming real estate market is starting to cool down but project delays are likely to push a much anticipated price correction back until 2009, new research says.
The supply of new apartments and villas has been delayed by materials and labour shortages, failing to meet demand of about 50,000 housing units a year from the steady flow of migrant workers arriving in this boom town, which has positioned itself as a business
hub for the Gulf region that is benefiting from record crude oil prices. Read on... |
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China hits highs... again: China Petro & Chemical, China Medical Technology, China Finance Online, Yucheng Technologies, Aluminum of China, China Life, Huaneng Power, Focus Media Holding, China BAK Batteries, and China Fire & Security.
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Global telecom surges... Vodafone, Mahanagar Telecom, Philippine Long Distance, France Telecom, Verizon, China Unicom, China Mobile, China Telecom, AT&T, and Brasil Telecom at new highs.
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Aluminum producers Aluminum of China and Alcan hit all-time highs. |
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Last |
Change |
52-Wk |
| S&P 500 |
1530.63 |
0.34% |
14.52% |
| Oil (USO) |
63.58 |
3.05% |
11.23% |
| Gold (GLD) |
72.64 |
0.89% |
21.45% |
| Silver (SLV) |
134.26 |
0.72% |
15.52% |
| US Dollar |
78.39 |
-0.12% |
-8.44% |
| Euro |
1.415 |
0.08% |
11.23% |
| VIX |
17.63 |
-5.22% |
52.91% |
| HUI |
382.26 |
-2.35% |
27.42% |
| 10-year yield |
4.62% |
0.01 |
0.04 |
| Company |
Sym |
Industry |
Natl Oilwell Varco |
NOV |
drill rigs |
China Medical Tech |
CMED |
medical equip |
Sinovac Biotech |
SVA |
biotech |
Air Products & Chem |
APD |
chemicals |
Emerson Electric |
EMR |
industrial equip |
Comp Vale do Rio |
RIO |
mining |
China Telecom |
CHA |
telecom |
Humana |
HUM |
healthcare |
Colgate-Palmolive |
CL |
conglomerate |
Sadia |
SDA |
meat products |
Aluminum of China |
ACH |
aluminum |
Mahanagar Telecom |
MTE |
telecom |
Endesa |
ELE |
utilities |
C.R. Bard |
BCR |
medical equip |
Comp de Saneamento |
SBS |
utilities |
Oakley |
OO |
sunglasses |
AGCO |
AG |
farm equipment |
China Life |
LFC |
insurance |
AT&T |
T |
telecom |
DaimlerChrysler |
DAI |
German autos |
Arcelor Mittal |
MT |
steel |
China Mobile |
CHL |
telecom |
Yucheng Tech |
YTEC |
software |
Philippine Long Dist |
PHI |
telecom |
Comp Siderurgica |
SID |
steel |
Ecolab |
ECL |
cleaning products |
Verizon |
VZ |
telecom |
DeVry |
DV |
education |
Alcan |
AL |
aluminum |
Huaneng Power |
HNP |
utilities |
Wynn Resorts |
WYNN |
casinos |
Curtiss-Wright |
CW |
aerospace |
Molson Coors |
TAP |
beer |
FMC Corp |
FMC |
chemicals |
Ametek |
AME |
electrical equip |
China Petro & Chem |
SNP |
Big Oil |
PepsiAmericas |
PAS |
beverages |
Vodafone |
VOD |
telecom |
Leucadia |
LUK |
holding company |
China Unicom |
CHU |
telecom |
Cisco |
CSCO |
networks |
3M |
MMM |
conglomerate |
|
| Company |
Sym |
Industry |
Pantry |
PTRY |
convenience store |
D.R. Horton |
DHI |
homebuilder |
ExpressJet |
XJT |
airline |
Building Materials |
BLG |
home improve |
Pulte Homes |
PHM |
homebuilder |
Lennar |
LEN |
homebuilder |
Stein Mart |
SMRT |
clothing |
Timberland |
TBL |
shoes |
Coldwater Creek |
CWTR |
clothing |
Ryland |
RYL |
homebuilder |
Central Garden & Pet |
CENT |
lawn supply |
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