Wall Street's top strategists have been unveiling their 2013 S&P 500 year end forecasts. Calls range from bold and ballsy to reluctant and conservative.
They see the S&P 500 ending 2013 slightly lower to up as much as 20% from yesterday's close of 1,254. Earnings are expected to be flat to up around 10%. Most see modest GDP growth in the U.S., and many expect more quantitative easing from the Fed.
However, all warn that Europe remains a wild card. Most assume a eurozone recession in their base case scenario. But should Europe's debt crisis escalate and contagion ensue, all bets are off and stocks will tank. Then again, if the crisis is contained, then most would argue that the sky's the limit.
We've written before that our favorite line came from Nomura's 2013 Global Strategy Outlook:
Putting things bluntly, either we have another very serious credit event with consequences at least as severe as the Lehman Brothers bankruptcy, or stocks are probably a buy.
Anyway, we read through hundreds of pages of research published by 16 of Wall Street's very best. Here's a summary of their 2013 forecasts:
Best Consumer Stocks In 2013:Genuine Parts Company (GPC)
Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, Canada, and Mexico. The company operates in four segments: Automotive Parts Group, Industrial Parts Group, Office Products Group, and Electrical/Electronic Materials Group. The Automotive Parts Group segment distributes automotive replacement parts for imported vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, and heavy duty equipment. This segment also distributes accessory items used in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial concerns, and individuals. It owns and operates automotive parts distribution centers and automotive parts stores under the NAPA name. The Industrial Parts Group segment distributes industrial replacement parts and related supplies, such as bearings, mechanical power transmission, industrial automation, hose, hydraulic and pneumatic components, industrial supplies, and material handling products. This segment serves various industries, including the food, forest products, primary metal, paper, mining, automotive, petrochemical, and pharmaceutical industries. The Office Products Group segment involves in the wholesale distribution of a line of office and other business related products that are used in the daily operation of businesses, schools, offices, and institutions. The Electrical/Electronic Materials Group segment distributes insulating and conductive materials, assembly tools, test equipment, and custom fabricated parts. This segment provides distribution services to original equipment manufacturers, motor repair shops, and assembly markets. The company was founded in 1928 and is headquartered in Atlanta, Georgia.Best Consumer Stocks In 2013:BorgWarner Inc. (BWA)
BorgWarner Inc. engages in the manufacture and sale of engineered automotive systems and components primarily for powertrain applications worldwide. The company?s Engine segment offers turbochargers, chain products, emissions systems, thermal systems, diesel cold start and gasoline ignition technology, and cabin heaters. It also manufactures electric air pumps, turbo actuators, and exhaust gas recirculation coolers, tubes, and valves for gasoline and diesel applications. This segment?s chain and chain systems include timing chain and timing drive systems, variable cam timing systems, crankshaft and camshaft sprockets, tensioners, guides, snubbers, front-wheel drive transmission chain and four-wheel drive chain, and chain systems for light and commercial vehicles. In addition, the Engine segment offers viscous fan drives and polymer fans; and electronic control units and sensor technology products. Its Drivetrain segment offers friction and mechanical products, such as dual clutch modules, friction clutch modules, friction plates, transmission bands, torque converter clutches, one-way clutches, and torsional vibration dampers. This segment also provides control products comprising electro-hydraulic solenoids for standard and high pressure hydraulic systems, transmission solenoid modules, and dual clutch control modules. In addition, it offers torque management products, including rear-wheel drive/all-wheel drive (AWD) transfer case systems, front-wheel drive/AWD electromagnetic coupling systems, and advanced products. The company sells its products to original equipment manufacturers of light vehicles, such as passenger cars, sport-utility and cross-over vehicles, vans, and light trucks; and commercial trucks, buses, and agricultural and off-highway vehicles, as well as to tier one vehicle systems suppliers and the aftermarket for light and commercial vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.Best Consumer Stocks In 2013:Lennar Corporation (LEN)
Lennar Corporation, together with its subsidiaries, operates as a home builder and provider of financial services in the United States. The company's homebuilding operations include the construction and sale of single-family attached and detached homes, and multi-level residential buildings, as well as the purchase, development, and sale of residential land directly and through unconsolidated entities. Its financial services comprise providing mortgage financing, title insurance, and closing services for buyers of its homes and others. As of November 30, 2009, the company owned 82,703 homesites and had access through option contracts to an additional 21,173 homesites. It serves customers in Florida, Maryland, New Jersey, Virginia, Arizona, Colorado, Texas, California, Nevada, Illinois, Minnesota, New York, North Carolina, and South Carolina. Lennar Corporation was founded in 1954 and is based in Miami, Florida.Best Consumer Stocks In 2013:J & J Snack Foods Corp. (JJSF)
J&J Snack Foods Corp., together with its subsidiaries, manufactures nutritional snack foods, as well as distributes frozen beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. The company primarily offers soft pretzels, frozen juice treats, desserts, churros, and baked goods to snack bars and food stands in chain, department, discount, convenience, and warehouse club stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure and theme parks; movie theatres; and schools, colleges, and other institutions. It also provides bakery products, such as biscuits, fig and fruit bars, cookies, muffins, and donuts, as well as soft drinks and funnel cakes. J&J Snack Foods Corp. sells its soft pretzels primarily under SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, HOT KNOTS, DUTCH TWIST, TEXAS TWIST, SANDWICH TWIST, CINNAPRETZEL, and SERIOUSLY TWISTED brand names; frozen juice treats and desserts under the LUIGI?S, FRUIT-A-FREEZE, WHOLE FRUIT, ICEE, BARQ?S, and MINUTE MAID brand names; churros under the LA CHURROS and TIO PEPE?S brand names; bakery products under the MRS. GOODCOOKIE, CAMDEN CREEK BAKERY, READI-BAKE, COUNTRY HOME, MARY B?S, DADDY RAY?S, and PRETZEL COOKIE brand names; frozen beverages under the ICEE, SLUSH PUPPIE, and ARCTIC BLAST brand names; and soft drinks and funnel cakes under the FUNNEL CAKE FACTORY brand name. The company markets its products through a network of food brokers and independent sales distributors, as well as through its direct sales force. As of September 26, 2009, it operated 4 stores. The company was founded in 1971 and is headquartered in Pennsauken, New Jersey.Best Consumer Stocks In 2013:Molson Coors Brewing Company (TAP)
Molson Coors Brewing Company brews, markets, sells, and distributes beer brands. It sells its products in Canada, under the Coors Light, Molson, Rickard's Red, Carling, Pilsner, Keystone Light, Creemore Springs, and Granville Island brands. The company also brews or distributes products under license from third parties, which include Heineken, Amstel Light, Murphy's, Asahi, Asahi Select, Miller Lite, Miller Genuine Draft, Miller Chill, Milwaukee's Best, Milwaukee's Best Dry, and Foster's. In addition, it imports, distributes, and markets the Corona, Coronita, Negra Modelo, and Pacifico brands, through a joint venture agreement with Grupo Modelo. Further, the company sells various brands in the United States, which include Coors Light, Miller Lite, Coors Banquet, Miller Genuine Draft, MGD 64, Miller Chill, Sparks, Miller High Life, Miller High Life Light, Keystone Light, Icehouse, Mickey's, Milwaukee's Best, Milwaukee's Best Light, Old English 800, Blue Moon, Henry Weinhard's, George Killian's Irish Red, Leinenkugel's, Peroni Nastro Azzurro, Pilsner Urquell, Grolsch, Coors Non-Alcoholic, and Sharp's. Additionally, it sells various brands in the United Kingdom comprising Carling, C2, Coors Light, Worthington's, White Shield, Caffrey's, Kasteel Cru, and Blue Moon, as well as various regional ale brands. The company also sells the Grolsch brands through a joint venture with Royal Grolsch N.V. and the Cobra brands through a joint venture called Cobra Beer Partnership Ltd.; and distributes brands sold under license, including Corona, Coronita, Negra Modelo, Pacfico, Singha, and Magners Draught Cider. In addition, it markets and sells Zima, Si'hai, Coors Gold, and Coors Extra brands to various international markets. The company was formerly known as Adolph Coors Company and changed its name to Molson Coors Brewing Company as a result of its merger with Molson Inc. in February 2005. Molson Coors Brewing Company was founded in 1873 and is headquartered in Denver, Colorado.Best Consumer Stocks In 2013:DIRECTV (DTV)
DIRECTV provides digital television entertainment in the United States and Latin America. The company provides direct-to-home (DTH) digital television services, as well as multi-channel video programming distribution services in the United States. It offers various channels of digital-quality video entertainment and CD-quality audio programming directly to subscribers' homes or businesses, as well as video-on-demand services; and approximately 160 national high-definition television channels and 4 3D channels. The company also provides premium professional and collegiate sports programming, such as the NFL SUNDAY TICKET package, which allows subscribers to view the NFL games. In addition, it offers DTH digital television services in Latin America and the Caribbean, including Puerto Rico. The company provides its local and international programming under the DIRECTV and SKY brand names. As of December 31, 2010, it served approximately 19.2 million subscribers in the United States; and 8.9 million subscribers in Latin America. The company was founded in 1990 and is based in El Segundo, California.Advisors' Opinion:
By Scott Rothbort At 2011-12-9
DirecTV(DTV) provides digital home entertainment to over 27 million direct subscribers and nearly 4 million partnered subscribers in the U.S. and Latin America. The company added nearly 2 million subscribers in 2011. ARPU (average revenue per subscriber) increased 3.5% in the U.S. and nearly 12% in Latin America so far this year. Earnings are expected to grow by over 30% in both 2011 and 2012. The stock sells at just 10.5 times 2012 estimates.
Compare that with forward price-to-earnings for competitors such as Time Warner Cable(TWC), at 11.2; Cablevision(CVC), at 11.4; and Comcast(CMCSA), 11.5. The stock is an excellent generator of cash flow. That said, if there is one issue I have with DirecTV management, it is its insistence on increasing leverage to repurchase stock.
DirecTV's raw beta is 0.85.
DirecTV, one of George Soros' top holdings, was also one of Warren Buffett's 6 New Investments in the most recently reported quarter.
Best Consumer Stocks In 2013:Meredith Corporation (MDP)
Meredith Corporation, a media and marketing company, engages in magazine and book publishing, television broadcasting, integrated marketing, and interactive media business in the United States. It operates in two segments, Publishing and Broadcasting. The Publishing segment publishes magazines for women focusing on the home and family market. It publishes 25 subscription magazines, including Better Homes and Gardens, Family Circle, Ladies' Home Journal, Parents, American Baby, Fitness, and More, as well as approximately 135 special interest publications primarily under the Better Homes and Gardens brands. This segment also includes book publishing, which has approximately 200 books in print; integrated marketing, which offers customer relationship marketing services, including direct, database, custom publishing, digital, and word-of-mouth marketing to corporate customers; and an Internet presence that consists of approximately 30 Web sites. The Broadcasting segment includes 12 network-affiliated television stations comprising 6 CBS affiliates, 3 FOX affiliates, 2 MyNetworkTV affiliates, and 1 NBC affiliate, as well as 1 AM radio station. This segment also comprises 20 Web sites, including 8 mobile Web sites, 8 iPhone applications, and video related operations. The company was founded in 1902 and is headquartered in Des Moines, Iowa.Best Consumer Stocks In 2013:Rogers Communication Inc. (RCI)
Rogers Communications, Inc. operates as a communications and media company in Canada. The company?s Wireless segment provides wireless voice and data communications services. It operates a global system for mobile communications and general packet radio service network. This segment markets its products and services under Rogers Wireless, Fido, and chatr brands. Its Cable segment offers cable television, high-speed Internet access, and cable telephony services. As of December 31, 2010, this segment provided digital cable services to approximately 1.7 million households; Internet service to approximately 1.7 million residential subscribers; and residential circuit-switched telephony services to approximately a million subscribers. This segment also offers local and long-distance telephone, enhanced voice and data services, and IP access. In addition, this segment operates a retail distribution chain consisting of approximately 400 stores that provide cable services and digital and Internet equipment, as well as offers digital video disc and video game sales and rentals. The company?s Media segment publishes magazines, trade and professional publications, and directories, as well as operates 55 radio stations in Canada; multicultural OMNI broadcast television stations; the 5 station Citytv television network; specialty sports television services, including Rogers Sportsnet, Sportnet ONE, and Setanta Sports Canada; specialty services, which comprise Outdoor Life Network, The Biography Channel Canada, and G4 Canada; and televised shopping service, The Shopping Channel. It also holds an ownership in a mobile sports and events production and distribution joint venture; delivers content and conducts ecommerce through the Internet; and owns Blue Jays, a League Baseball club, as well as Rogers Centre sports and entertainment venue. The company was founded in 1920 and is based in Toronto, Canada.Advisors' Opinion:
By Pat Racaniello At 2011-10-17
Rogers C! ommunica tions (RCI) is a Canadian communications firm with a presence in every major telecom segment, including wireless, wireline, cable television and high speed internet. Wireless communications is the biggest segment of the company’s revenues, with 56% of the most recent quarter contributed by wireless. The company is organized as a holding company, with stakes in major subsidiaries such as Rogers Broadcasting and Rogers Sports Group, which hold further stakes in multiple businesses.
The stock last traded at $37.57, with an overall tight 52 week range of $40.82 - $33.62, representing low volatility. The price earnings ratio is near the industry average and the 5 year low price earnings at 14.4 times, considering the company just announced an 11% increase in the dividend. In addition, with far higher leverage than the industry at 245.39 (long term debt to equity), the company is also far more comfortable in terms of interest coverage at 4.3 versus 0.02.
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