New York Community Bancorp [NYSE:NYB] July 30, 2009: $10.80
52-week range: $7.68 (Mar. 9, 2009) - $22.00 (Sep. 19, 2008)
Dividend = $0.25 quarterly = 9.26% current yield
NYB is a multi-bank holding company operating about 180 branches throughout New York City, its surrounding suburbs and New Jersey. They serve both individuals and commercial enterprises.
Earnings held up much better for NYB than for most banking institutions during last year’s credit melt-down. Earnings from continuing operations dropped from $0.90 to $0.83 and book value only dipped by 5.34%.
Year-over-year comparisons turned positive in the December quarter and remained so in both the March and June interim reporting periods.
NYB reported Q2 yesterday with non-GAAP earnings of $0.26 versus $0.14 from 2008’s comparable quarter. An announcement that NYB would issue common shares in exchange for existing equity derivative securities sent the shares down on Wednesday before they rebounded with the market to $10.80 at today’s close.
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NYSE:BP - July 29, 2009: $49.45 (2:50 PM EST)
52-week range: $33.70 (Mar. 3, 2009) - $62.49 (Aug. 7, 2008)
Dividend = $0.84 quarterly = 6.79% current yield
With crude prices down $4.50 bbl today, it’s a good time to be picking up some BP ADRs. I expect higher oil prices somewhere in the reasonable future and the generous 6.79% yield makes waiting for that day quite palatable.
Consensus estimates for 2009 and 2010 now run about $3.70 and $5.75 respectively making the P/E 13.4x this year’s depressed earnings and around 8.6x next year’s expectations. That compares with a 10-year median multiple of 13x.
BP gets Value Line’shighest ratings for both safety and financial strength. ‘Stock price stability’ and ‘earnings predictability’ also score well at the 90th and 80th percentiles (with 100th being best).
Unless you’re a real bear on oil prices BP looks to have very nice upside without a ton of risk. BP shares peaked at levels between $72.70 and $79.80 during each calendar year 2005-2006-2007-2008 and never got below $56.60 at any time during 2005-2006-2007.
Here’s a relatively conservative play for just under 1 ½ years that can generate very nice total return even if the shares don’t do much other than hang around current levels.
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ConAgra [NYSE:CAG] July 29, 2009: $19.55
52-week range: $13.52 (Dec. 3, 2008) - $22.66 (Aug. 15, 2008)
Dividend = $0.19 quarterly = 3.89% current yield
ConAgra Foods, Inc. supplies potato, other vegetable, spice and grain products to a variety of restaurants, foodservice operators and commercial customers. The Company operates in two segments: Consumer Foods and Commercial Foods. The Consumer Foods segment includes branded and private label food products, which are sold in various retail and foodservice channels, principally in North America. The Commercial Foods segment includes commercially branded foods and ingredients. Major brands include Healthy choice, Orville Redenbacher, Slim Jim, Chef Boyardee, Hebrew National, Banquet, Marie Callender’s, Reddi-Wip, Hunt’s and Swiss Miss.
Revenues and earnings dropped from $1.35/share to $1.06 /share from fiscal 2007 to 2008 as higher commodity prices squeezed margins [fiscal years end May 31]. Since then sales and profits have rebounded nicely. FY 2009 showed EPS of $1.52 – up 43.3% versus the depressed prior year. Zacks views for FY 2010 and 2011 are now running at $1.65 and $1.80.
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A perfect contrary indicator?
In today’s issue of the
Value Line Investment Survey [dated July 31, 2009]
their own accounting of the results was published.
These numbers could not have been more embarrassing to Value Line.
Value Line tells its readers to buy only stocks ranked #1 & #2 and to sell them when their rankings drop to #3 or below. They also recommend avoiding all stocks ranked #4 and #5. Doing exactly the opposite would have been a much better move this year.
Here are the facts:
Results With Ranks Frozen
(Average % Change 12/31/08- 6/30/09)
Group 1 …………. 0.5%
Group 2 …………. 1.8%
Group 3 ………… 10.3%
Group 4 ………… 35.6%
Group 5 ………… 69.1%
DJIA …………….. -3.8%
S&P 500 ………… 1.8%
Wilshire 5000 …… 3.8%
Nasdaq Comp ….. 16.0%
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Almost no industry group was slammed harder in the crash of 2008 – 2009 than the asset management companies. They suffered from both net asset withdrawals and huge mark-to-market reductions in the remaining assets under management [AUM] which slashed their earnings from record levels in 2007.
Safeway* operates the nation’s third-largest retail grocery chain with about 1,740 stores in the United States and Canada. Its primary markets include the western United States, western Canada, Texas, and the mid-Atlantic region.
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