Crista Huff
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Stock number one is: 

Eli Lilly and Company, (SYMBOL: LLY) and the headline says: Eli Lilly Lung Cancer Drug Improves Patient Survival in Trial -- Bloomberg

Eli Lilly stock is up today on unexpected news that the company’s squamous non-small cell lung cancer treatment has increased survival rates in stage IV cancer patients in a Phase III study.  Results will be presented in 2014, followed by applications for regulatory approval.

Lilly’s earnings per share are expected to rise 22% this year, then fall 33% in 2014, reflecting the loss of patent protection on the antidepressant Cymbalta.  However, the company has many drug therapies in its research pipeline, and is gaining ground in Japan, emerging markets, animal health, diabetes and oncology.  The dividend yield is hefty at 3.5%.

The stock price is recovering from the 2008 Financial Meltdown, currently trading this year between $49 and $58.

Our Ransom Note trendline says:  HOLD ELI LILLY.

LLY Chart

LLY data by YCharts

Stock number two is: 

Yum! Brands Inc., (SYMBOL: YUM) and the headline says: China Sales Remain Fowl – Morgan Stanley Research

Yum! Brands reported July same-store sales down 13% in China, due to macroeconomic weakness, and poultry supplier issues harming KFC sales.  Yum! Brands earns nearly 50% of profits from China, and expects a rapidly improving Chinese economy in the coming decade.

Yum’s earnings per share are project to fall 5% this year, then rise 24% next year.  The PE is 23 and the dividend yield is 1.9%.

The stock’s been trading between $63 and $74 for 18 months, and appears ready to break out on the upside in the near future.  Based on future earnings growth and a bullish chart….

Our Ransom Note trendline says..... ACCUMULATE YUM BRANDS.

YUM Chart

YUM data by YCharts

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Crista Huff

Crista Huff is a retired stockbroker from a NYSE member investment firm. She writes about market-timing at Goodfellow LLC and is active politically.
 
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