Watchlist (October 18, 2012)

by FI Fighter on October 18, 2012

in Stock Watchlist

I don’t currently have any plans to add to my portfolio this month, but that doesn’t mean I can’t keep tracking the market! Many high quality companies were down this week as earnings seemed to miss on a daily basis. Google (GOOG), was one in particular that saw its shares plummet, dropping $68/share (9%) during the day. GOOG was originally scheduled to release earnings after the bell, but an error allowed the public to know the results beforehand. Mr. Market was not pleased, and hammered the shares accordingly.

Since GOOG does not yet pay a dividend, I am not particularly interested in initiating a position. Still, the results grabbed headlines and sent a shockwave through the rest of the investing community. For the stocks that I am following, many good deals also seemed to emerge this week.

In particular, here are the ones that have caught my eye:

Abbott Laboratories (ABT): ABT is a premiere dividend stock with a strong history of rewarding stockholders with consistent dividend payouts over the years. It has had quite a run-up this year, and I haven’t yet found a good time to initiate a position. As mentioned in my latest Wishlist, I would really like to add this to the portfolio. It was just two days ago that the stock closed at a year high, reaching $72.13.

It has taken a beating due to reports that its partner, Reata Pharmaceuticals, has discontinued a late-stage trial for one of their promising new drugs to treat chronic kidney disease. This was due to safety concerns. In the short term, the share price is immediately impacted, as ABT closed at $66.64. This is a 7.6% drop in less than a week! I’m definitely watching this one with interest. The current price is attractive, and I may add at these levels since I feel the company is a solid long-term investment. I would like to acquire ABT for under $66 if possible.

 

International Business Machines (IBM): Still not a big fan of tech stocks, but it’s hard to ignore the quality brand IBM has built over the past few decades. Like Intel (INTC), IBM has seen its stock drop significantly since its earnings report failed to impress investors.

Like ABT, IBM had surged to a near 52 week high, closing at $211.00 on Tuesday. The stock was down close to 3% today, and finished at $194.96. The drop in price is mostly due to lackluster Q3 results, as revenue declined 5.4% year over year to 24.75 billion. Earnings were in-line at $3.62/share. This plunge in share price represents another monstrous 7.6% drop in almost a blink of an eye. I would be interested in establishing a position in the sub $185 range.

 

I was also watching AT&T (T) earlier this week, but it looks like the telecommunications giant has bounced back nicely. This is a high-yield dividend stock that I would like to add in the sub $35 range.

 

What stocks are you currently watching?

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{ 8 comments… read them below or add one }

1 JC @ PassiveIncomePursuitNo Gravatar October 19, 2012 at 6:05 am

I’ve also been looking at Abbott but have never pulled the trigger on it. I need to research the upcoming stock split to see how exactly that’s going to work before I would purchase any though.

Reply

2 FI FighterNo Gravatar October 19, 2012 at 9:32 pm

JC,

I’ve been eyeing ABT for a long time now, since the beginning of the year. I finally went ahead and placed a limit order last night. It was filled today, so I finally pulled the trigger!

Although my plans may change, right now I plan on holding on to both companies post-split. The company recently announced the dividend plan (5.9% increase for combined companies relative to today’s current year payout), which gave me some of the reassurance I was looking for.

Best wishes!

Reply

3 Six Figure InvestorNo Gravatar October 19, 2012 at 2:55 pm

The companies I’m watching are already in your portfolio. INTC, AAPL, and EMR. EMR is the easiest to buy. There’s a report out on EMR at mdi.morningstar.com which essentially says that 98% of the time, EMR produces 10+% returns when the yield is above 3%. With a current 3.3% yield, it’s a good value here.

Reply

4 FI FighterNo Gravatar October 19, 2012 at 9:35 pm

SFI,

Those are some solid choices, and you can’t go wrong with any of them. INTC is sitting at a 52 week low.

AAPL is getting hammered, and has basically given back all the gains it made when it ascended to $700 in late September. Rumors are that the next earnings report will be another hit out of the park, so now might be a good time to load up.

I really like EMR too. That’s an interesting statistic, and some astounding returns! Maybe I need to add this one back to my watchlist.

Happy hunting!

Reply

5 Gen Y Finance JourneyNo Gravatar October 19, 2012 at 4:01 pm

I was lucky to get into T just before it started a steep climb. I bought it back in January for $30/share. I don’t know if I’d buy it at its current price.

Reply

6 FI FighterNo Gravatar October 19, 2012 at 9:36 pm

Gen Y,

You got in at a terrific price for T! I remember looking at it in January, thinking it was “too pricey”. $30/share looks like a steal now! I wish I could add some at those levels.

Cheers!

Reply

7 Dividend MantraNo Gravatar October 19, 2012 at 5:00 pm

FI Fighter,

Lots of drops lately. MCD is attractive after the big drop and PM has been coming down as well. ABT has become attractive again.

Best wishes!

Reply

8 FI FighterNo Gravatar October 19, 2012 at 9:39 pm

DM,

You are right, there are bargains left and right right now. Today was a very good day (for dividend investors).

I missed out on MCD since I was stuck in a meeting. I was a bit shocked to see it drop over $4 today. It’s a screaming “BUY” right now, but I’ll have to wait until next paycheck. Hopefully it drops even more and crosses below the 52 week low.

Happy hunting!

Reply

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