Shares of The Timken Company (NYSE:TKR) are near all-time highs, despite Q1 results that reflected lower demand across the company’s end markets. Full year 2013 sales are expected to fall 5% compared to last year due to weaker demand in oil, gas, and other industrial businesses. Management provided EPS guidance of $3.75–$4.05 for the full year, giving the stock a 15x earnings multiple.
Investors are optimistic on The Timken Company (NYSE:TKR) despite the moderate outlook, as the company announced plans to separate its steel business on June 10. The transaction will likely unlock further value for shareholders.
Analysts at Jefferies raised their price target on The Timken Company (NYSE:TKR) to $65 from a previous $50 following news of the proposed spin-off, citing the potential for a share repurchase plan and higher dividend. The Timken Company (NYSE:TKR) currently pays $0.23 per share quarterly for a yield of 1.54%.
Live entertainment company
Metropolitan Capital Advisors initiated a new position in Live Nation Entertainment, Inc. (NYSE:LYV) during the first quarter, buying stock and long call options in the name. The $3 billion company is composed of four segments: Ticketmaster.com, Live Nation Entertainment, Inc. (NYSE:LYV) Concerts, Artist Nation Management, and Media/Sponsorship.
The Live Nation Entertainment, Inc. (NYSE:LYV) story may be one of the best opportunities in the market today. Management laid out a compelling three-year growth outlook to increase its show audience by 5 million, a figure that could boost operating income as much as 35%.
Initial optimism was found in May’s first quarter results, as concert attendance grew 12% in the three months ending March 31. Longer-term results are likely to be even better. Live Nation Entertainment, Inc. (NYSE:LYV) is introducing a new ticket platform which could save $0.35 per ticket, and increased usage of mobile apps should drive a higher gross margin.
On May 20, Live Nation Entertainment, Inc. (NYSE:LYV) announced a joint venture to expand its international presence. The company now operates five offices in Hong Kong, Beijing, Shanghai, Seoul and Tokyo. International attendance at Live Nation Entertainment, Inc. (NYSE:LYV) concerts grew to 3.04 million during the first quarter, compared to 5.06 million North American attendees.
Foolish takeaway
Whenever Karen Finerman speaks, I pay attention. It’s a powerful resource to get the opinion of a Wall Street manager with decades of experience. And with more than $100 million in AUM, Finerman has demonstrated her ability to “call the shots” in the difficult game called stock market.
Readers should consider Live Nation Entertainment, Timken Company, and WellPoint based on their own portfolio strategy and risk profile. And don’t forget about Karen’s new book, Finerman’s Rules.
The article Value Investor Karen Finerman’s Latest Stock Picks originally appeared on Fool.com is written by John Macris.
John Macris has no position in any stocks mentioned. The Motley Fool recommends WellPoint. The Motley Fool owns shares of WellPoint. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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