Watchlist (October 18, 2012)

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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FI FighterDividend MantraGen Y Finance JourneySix Figure InvestorJC @ PassiveIncomePursuit Recent comment authors
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JC @ PassiveIncomePursuit
Guest

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.

Six Figure Investor
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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.

Gen Y Finance Journey
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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.

Dividend Mantra
Guest

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!

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