Wall Street Loves These Stocks. Should You?
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 high-flying favorites deserve analysts' unwavering support.
CAPS Rating (out of 5)
CAPS Bullish Sentiment
No. Wall Street Analysts
52-Week Price Change
|Exide (NAS: XIDE)||****||97%||9||(63%)|
|Zix (NAS: ZIXI)||****||70%||4||(28%)|
Source: Motley Fool CAPS.
As you can see, there's a wide range of results so just because Wall Street loves ' em, don't think you have to. Use the list as a jumping-off place for your own research.
Getting a charge out of this
If you want to bet on the auto industry's recovery, better to go with traditional car makers and suppliers like lead-acid battery maker Exide, even if alt-fuel vehicles like natural gas or electric cars, with their lithium-ion batteries, sound sexier. Sure, they're new and exciting, but the market hasn't shown it wants them in any appreciable number, even with their cost being subsidized on both the manufacturing and purchasing side.
Ener1 is just the latest "green" company to go bankrupt despite receiving a $118 million handout from the Energy Department's stimulus program allotment. I warned last year that, after Green Vehicles declared bankruptcy despite being subsidized by taxpayers of Salinas, Calif., and following the failure of the Norwegian Th!nk Global EV car company -- an Ener1 partner -- there was no assurance the EV battery maker wouldn't follow suit.
General Motors (NYS: GM) has seen challenges selling its much-hyped Volt, meaning A123 Systems (NAS: AONE) could have a rough time making good on the promise of providing tens of thousands of lithium batteries for Chevy's new Spark.
They may be dull, but lead-acid battery manufacturers and their customers are more tried and true. There will continue to be a market for them, regardless of passing fads. I rated Exide to outperform the market indexes going forward because I saw it excelling as the passion for electric vehicles and their ilk cools down.
Tell us in the comments section below or on the Exide CAPS page if you agree EVs are DOA, then add the stock to your Watchlist to see how it eventually plays out.
A year ago, one CAPS member suggested the patent-infringement lawsuits filed against email encryption specialist Zix might scare off some customers from signing on to its services. Whether that played a role in its inability to sell a single large order last quarter is unknown ("large" being defined as in excess of $100,000 in recurring revenue), but there's also tougher (and bigger) competition too. Symantec (NAS: SYMC) bought PGP in 2010 to build a more competitive presence in the industry, and EMC, Intel, and Cisco have all elbowed their way in.
Having sold off their other business lines, CAPS member whoodunit expects Zix to be chased from the market if the patent lawsuit is successful, which he thinks it will be.
I expect to see negative revenue growth in this quarter. I also expect that the RPost re-exam will re-affirm Rpost's patents and that Zix will not be allowed to do sender authentication and time stamping. This will drive them out of business since they only have one product. I look to early next year to be the point where the stock will really flounder.
Add Zix to the Fool's free portfolio tracker to see whether it can continue to get a charge out of electric vehicles, and let us know on the Zix CAPS page if you're as concerned about the lawsuit as our investment community may be.
Agree to disagree
Tell us whether these stocks deserve to have Wall Street marching lockstep, but then check out The Motley Fool's new free report that highlights a company breaking all the rules on its way to huge, multiple-bagger gains. The report is free, so get a copy today!
At the time this article was published Fool contributorRich Dupreyowns shares of Intel and Cisco Systems, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Cisco Systems, Intel, and EMC.Motley Fool newsletter serviceshave recommended buying shares of Cisco Systems, General Motors, and Intel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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