The Stocks Wall Street Loves
Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?
Not so fast! With help from the 180,000 members of Motley Fool CAPS, we'll see whether these highflying favorites deserve analysts' unwavering support.
CAPS Rating(out of 5)
CAPS Bullish Sentiment
Number of Wall Street Analysts
52-Week Price Change
|Advanced Analogic Technologies (NAS: AATI)||****||94%||7||15%|
|Avalon Rare Metals (NYS: AVL)||**||83%||1||7%|
|Halliburton (NYS: HAL)||****||95%||28||17%|
Source: Motley Fool CAPS.
Skyworks Solutions (NAS: SWKS) sure looks like it's having a case of second thoughts over agreeing to acquire Advanced Analogic Technologies. While it wanted to use its paramour's technologies to further embed itself in Apple's iPhone, as well as the burgeoning power-management business behind all smartphones, it now looks like it might choose to find someone else to go that route.
First it said AAT was not living up to its end of the bargain, which AAT denied, and now Skyworks upped the ante, saying if it doesn't fix what's wrong with their relationship within 10 days, it's hitting the bricks. But new developments suggest that the deal is really foundering and the markets doubt that the marriage will be consummated.
In an SEC filing late last week, Skyworks charges that after the merger agreement was signed, AAT's vice president separately approached Skyworks and said he was misled about the sale price of the company and was pressured to sign the agreement. He wanted to back out of the stockholder agreement and sell a good portion of his shares on the open market, which the agreement prevents. Skyworks called for a full inquiry into the matter and a meeting with the VP. AAT says the VP withdrew his offer, but Skyworks says the email AAT provided shows no such thing.
Because the original details of the dispute were sketchy and AAT seemed to effectively refute them, I headed to CAPS to say the power-management specialist would outperform the market. However, in light of the new revelations behind the dispute, I've since closed out my pick. AAT might be able to work effectively as a standalone company, but its stock will probably tread water or decline for an extended period.
Let us know in the comments section below or on the Advanced Analogic Technologies CAPS page whether you think this deal can ever be sealed.
No doubt the investing angle for rare earth element companies is the virtual monopoly China enjoys in their production and the demand for them from various high-tech consumer-electronic products. Everything from the iPhone to missile-defense systems rely on REEs. When China said earlier this year that it will slash exports, it set off a mad rush of investors piling into REE stocks, even those with the most tangential relationship to the space.
Molycorp (NYS: MCP) has been identified as one with the best potential, but even then it's still a way down the road before it's shovel-ready to produce any REEs. The U.S. is moving to encourage domestic mining efforts as a means of untethering our reliance on foreign sources of these key minerals.
Avalon Rare Metals wants to grab a share of the market, too, but without the cash flows available to it such as Molycorp has, it may have more difficulty in achieving a leadership position. That might explain why its stock is down not only 66% from the highs it hit this year but is also lower than what it was before the REE rally started.
That could help explain why 30% of CAPS All-Stars rating Avalon don't see it beating the market averages. Add the rare earth elements miner to your watchlist to keep tabs on whether it will get the results it needs to seek out revenues, let alone profits.
Hold off on the champagne
Oilfield-services giant Halliburton reported solid results last quarter and gave hope that the 2012 drilling season, particularly in the U.S. onshore market, would be better than expected. While the Gulf of Mexico remains a recovery story, it's one that the oil giant thinks could face fresh problems yet.
Of course, the wrangling over responsibility for the Macondo well disaster between it and BP (NYS: BP) rages on, and though the U.S. government has assigned most of the blame to the British oil firm, the actions of Halliburton and Transocean (NYS: RIG) also came under scrutiny and culpability.
Since the start of August, Halliburton's shares have fallen sharply, dropping 30% and putting its value at just 8 times forward earnings estimates, better than either Schlumberger and Baker Hughes. CAPS member rcjansen thinks the cloud currently hanging over it will soon pass: "Recent news of liability with the Horizon oil spill from the government study has been weighing on the stock. Once that is over, this stock has long term potential and an attractive valuation here."
Drill deeper on the Halliburton CAPS page for more opinions, and add its stock to the Fool's free portfolio tracker for complete coverage of its developments.
Agree to disagree
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At the time this article was published Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Transocean, Schlumberger, and Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.