Analysts have an overall Buy rating for Transocean, with a declining rating trend. Analysts’ average price target is $60.68 (13.9% upside potential).
There are a few positive factors for Transocean LTD (NYSE:RIG):
Lower P/B and P/S of 1.3 and 1.8, respectively, vs. the industry averages of 1.4 and 2.2, respectively
Transocean generates an operating cash flow of $2.35 billion with a levered free cash flow of $1.71 billion
Backlog worth $30 billion
Deeper dig in demand
Bank of America (NYSE:BAC)
Bank of America is a bank and financial holding company, providing banking and non-banking financial services and products throughout the United States and in selected international markets. Bank of America Corp (BAC) was down 4.9% the other week and closed at $11.44 on Feb. 22, 2013. Bank of America Corp (BAC) had been trading in the range of $6.72-$12.42 in the past 52 weeks, and has a high beta of 2.39.
While last week’s focus was on CEO Brian Moynihan’s pay, investors might want to pay more attentions on the performance and fundamental improvement for the stock itself. For 2013, analysts are expecting an EPS of $1.00 (vs. the year-ago EPS of $0.25) with revenue of $90.64 (vs. the year-ago sales of $86.33 billion). In the past 90 days, the current EPS estimate had been increased from $0.21 to $0.23 for the current quarter ending in March, 2013.
There are a few positive factors for Bank of America Corp (BAC):
Lower P/B of 0.6 and P/S of 1.4 (vs. the industry averages of 1.0 and 2.1, respectively)
Lower Forward P/E of 8.8 (vs. the S&P 500’s average of 14.0)
Bank of America currently offers an annual dividend yield of 0.35%, and BAC will go ex-dividend on Feb. 27, 2013
Vodafone Group (NASDAQ:VOD)
Vodafone Group is a global mobile communications company, engaged in providing voice and data communications services for both consumers and enterprise customers. Its offerings include voice, messaging, data and fixed-line solutions and devices to assist customers in meeting their total communications needs. VOD has a 45% stake in Verizon Wireless, which is the largest wireless communications services provider in the United States, with 98.2 million subscribers as of Q4, 2012. Vodafone Group is the second-largest wireless company in the world. Vodafone was down 3.62% last week and closed at $25.01 on Feb. 21, 2013. Vodafone had been trading in the range of $24.42-$30.07 for the past 52 weeks, and has a low beta of 0.71.
On Feb. 8, 2013, BofA/Merrill Lynch upgraded Vodafone from Neutral to Buy. Analyst Emmet Kelly said:
“We upgrade Vodafone Group to Buy. First, the US provides several alternative positive catalysts. Second, we expect Group service revenue growth rates to bottom out at ca -4.5% in Q4 13E [fourth quarter of the 2013 fiscal year], before improving (MTR anniversary, no leap year headwind, possible Indian price rises, accretion from Red). Third, in May, we anticipate Vodafone to announce ‘at least flat DPS’ for y/e Mar 14E. Fourth, we expect very strong Verizon W results (Apr, Jul, Sept 2013) – notably EBIT [earnings before interest and tax] growth.”
On Feb. 19, 2013, Bernstein downgraded Vodafone from Market Perform to Underperform. On Feb. 4, 2013 Citi also downgraded Vodafone from Buy to Neutral. As reported,
“The firm said quad-play offers from competitors in Spain and Portugal may pressure market share. The firm also sees M&A activity to address shortcomings in convergence capability.”
Vodafone was upgraded by BofA/Merrill Lynch due to positive catalysts from the US and strong Verizon results; however, Vodafone was downgraded by Citi due to increased competition concerns in Spain and Portugal, as well as shortcomings in convergence capability due to M&A activities. Analysts have an overall Buy rating with an average target price of $30.00 for Vodafone, despite the mixed calls.
There are a few positive factors for Vodafone:
Verizon Wireless continues to dominate in 4G LTE market in the United States
Higher revenue growth (3 year average) of 4.2 (vs. the industry average of -2.7)
Lower debt/equity of 0.4 (vs. the industry average of 0.8)
Vodafone generates an operating cash flow of $18.69 billion with a levered free cash flow of $11.71 billion
Vodafone offers an annual dividend yield of 6.11%
In short, further pullbacks will create great buying opportunity for these 5 stocks. For conservative investors, it may be better to stay on the sideline for now until price stabilization is seen. I, however, maintain a long-term bullish view for Nokia, Transocean, and Vodafone; however, I’m waiting for further price stabilization to establish the long position for Nokia and Transocean, while holding my Vodafone position.
Note: All prices are quoted from the closing of Feb. 22, 2013 and all calculations are before fees and expenses. Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.
The article 5 High Liquidy Stocks to Buy After Pullback originally appeared on Fool.com and is written by Nick Chiu.
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