Stocks in the News: Housing Markets Boost Home Improvement Projects

Crista Huff
Posted: Sep 07, 2013 12:01 AM
Stocks in the News: Housing Markets Boost Home Improvement Projects

Stock number one is: 

American Tower Corp., (SYMBOL: AMT) and the headline says: American Tower to buy Global Tower in $4.8 billion deal – Reuters

Cell tower operator American Tower is in agreement to acquire MIP Tower Holdings, parent company of Global Tower Partners.  “The deal will add about 15,700 towers in the United States and Costa Rica to American Tower's existing portfolio of 56,000 towers worldwide,” reports Reuters.  The deal will immediately add to annual profits.

American Tower is in a long-term trend of aggressive annual earnings and revenue growth.  The PE is 39.

The stock has had a tremendous pullback since May.  With a high PE and a bearish chart, there’s no reason for investors to buy American Tower stock right now, although the company remains an attractive leader in its field.

Our Ransom Note trendline says:  STAY ON THE SIDELINES.

AMT Chart

AMT data by YCharts

Stock number two is: 

The Home Depot, Inc., (SYMBOL: HD) and the headline says: Home Depot CEO Sees Housing Recovery Boosting Sales -- Bloomberg

Home renovation spending will continue to support a steady increase in sales at Home Depot throughout 2013, said CEO Frank Blake yesterday in a Bloomberg interview.  Rising home prices are jump-starting a long-delayed trend in home repairs, as homeowners and investors prepare for home sales and investment activity.

Earnings growth projections have risen since our August report, now expected to grow 18-19% in each of the next two years.  The PE is 20 and the dividend yield is 2.1%.

Home Depot’s share price has been weak this summer.  Patient growth & income investors could accumulate shares between $72 and $76 while waiting for the next uptrend in the share price.

Our Ransom Note trendline says..... ACCUMULATE HOME DEPOT.

HD Chart

HD data by YCharts

Stock number three is:

Biogen Idec Inc., (SYMBOL: BIIB) and the headline says: MS Drug Launch Tracking Above 2013 Estimates – Citi Research

Biogen Idec’s new multiple sclerosis drug continues to experience robust sales above Street estimates since receiving FDA approval in March.  Citi Research says, “we anticipate upside to [earnings] estimates driven by Biogen's growing dominance of the MS market and operating margin expansion.”

Earnings per share growth estimates have increased repeatedly this year, now at 31, 28, and 19 percent over the next three years.  The PE is 27.

Biogen stock is up $34 since we said “buy” in March, and up $14 since we said “buy” in early August.  There was a very orderly price correction this summer, which appears to be over.  Shareholders could see the price break past resistance at $242 in the near-term.

Our Ransom Note trendline says....  BUY BIOGEN IDEC.

BIIB Chart

BIIB data by YCharts

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.