Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
Safeway Inc., (SYMBOL: SWY) and the headline says:
Safeway to Sell Canada Unit to Sobeys for $5.7 Billion -- Bloomberg
Safeway has agreed to sell its Canadian stores to Sobeys. Safeway will receive about $4 billion after taxes and expenses, which will be used to pay down $2 billion in debt, and repurchase shares. Safeway’s long-term debt ratio is high at 60%.
Citi Research has revised its earnings projection for Safeway down to $1.89 per share in 2013, which is down 12% year-over-year. The PE is 13.6, and the dividend yield is 3.11%.
The chart pattern is turning bullish, and the stock is likely to trade between $22 and $27 in the near-term. Citi says, “we see a lack of catalysts to drive significant additional upside in the near term. “
Our Ransom Note trendline says: HOLD SAFEWAY.
Stock number two is:
E I du Pont de Nemours and Co, (SYMBOL: DD) and the headline says:
DuPont Lowers 2Q and FY13 Guidance; Remain Neutral – Citi Research
DuPont has lowered Wall Street’s earnings expectations for the second quarter to about $1.27 vs. consensus $1.36. Unusually cool, wet weather is impacting its Agriculture and Nutrition & Health businesses.
Earnings are expected to grow 16, 14 and 12% in the next three years. The PE is 14, within a five-year range of 10 to 24; and the dividend yield is 3.34%.
DuPont stock has been in a three-year trading range between $40 and $56, narrowing recently toward the mid-50’s. The numbers are attractive but the chart is neutral.