As we do each month, we asked a handful of our top analysts across sectors for one stock that looks especially compelling right now. Here are the companies they singled out.
Sean Williams: Investors who’ve learned to live with the natural ebb and flow of the tech sector should definitely keep their eyes on JDS Uniphase Corp (NASDAQ:JDSU). With AT&T Inc. (NYSE:T) committing $14 billion over a three-year period to expand its wireless 4G LTE infrastructure, and Sprint Nextel Corporation (NYSE:S) and T MOBILE US INC (NYSE:TMUS) gearing up to deploy billions to set up their own 4G LTE networks, the demand for data transmission and fiber optics is nearing another big surge.
It usually takes a few quarters before we see fiber-optic and fiber-optic equipment suppliers benefit from this trickle-down effect; however, the signs that JDS Uniphase Corp (NASDAQ:JDSU) could be ready to shock Wall Street are there. Finisar Corporation (NASDAQ:FNSR), Ciena Corporation (NASDAQ:CIEN), and Alliance Fiber Optic Products Inc (NASDAQ:AFOP) all recently blew away Wall Street’s growth and/or guidance estimates, clearing the path for the largest name in fiber, JDS Uniphase Corp (NASDAQ:JDSU), to clean up when it reports its fourth-quarter results in August. I have a suspicion this will be a quarter where JDS Uniphase Corp (NASDAQ:JDSU) really turns some heads, and it could be the beginning of a sizable multiyear burst in growth for the entire networking sector.
Jay Jenkins: This month, I’m highlighting Spirit Airlines Incorporated (NASDAQ:SAVE), the leader in bargain-basement air travel. Spirit Airlines Incorporated (NASDAQ:SAVE) has more or less doubled thus far in 2013, and I believe the company still has room to run. Why? Because Spirit Airlines Incorporated (NASDAQ:SAVE)’s focus is on cheap travel, and it’s cheap travel that consumers want. Sure, in the 1960s, air travel was all about the experience: in-flight meals, white-glove service, luxury and extravagance at 40,000 feet. Today? People want to get from point A to point B as cheaply as safely possible. The Concorde could fly at Mach 2 (1,300 miles per hour!!), but the plane was retired 10 years ago because consumers were not willing to pay the extra money to fly that fast. Spirit Airlines Incorporated (NASDAQ:SAVE) is winning market share today because consumers want the low-cost solution — not speed and not the creature comforts. And, as I head to the beach later this July, it doesn’t hurt that Spirit Airlines Incorporated (NASDAQ:SAVE)’s primary market is Florida, the Caribbean, and Central/South America. This summer, consider Spirit Airlines Incorporated (NASDAQ:SAVE) for your investment and budget air travel needs.
Russ Krull: I’ve bought and expect to buy more Intel Corporation (NASDAQ:INTC) this month. I’m a dividend growth guy, and Intel Corporation (NASDAQ:INTC) is one of the best values in that arena. Intel Corporation (NASDAQ:INTC) doesn’t have the half-century string of annual dividend hikes of, say, The Coca-Cola Company (NYSE:KO), but it does have a dividend yield that tops the S&P 500 average, a rock-solid balance sheet, plenty of cash flow to cover the dividend and a reasonable payout ratio — key ingredients in a dividend growth recipe. The weak spot is slumping personal computer sales combined with being slow to get into the mobile device market. PC sales numbers aren’t likely to recover, but Intel Corporation (NASDAQ:INTC) has started to crack the mobile device market. Combine that with all those mobile devices and cloud storage driving demand for servers, and I think Intel Corporation (NASDAQ:INTC) is a solid, steady grower. Earnings per share should also improve even if earnings stay flat, because Intel Corporation (NASDAQ:INTC) made a smart balance sheet move last fall: It sold $6 billion in bonds at rock-bottom rates to fund a stock buyback. Because the bond coupon rate was lower than the dividend yield, the deal improves Intel’s cash flow and, based on the latest quarterly report, the company is actually reducing its share count.
