In the perverse climate of suspicion that keeps dominating the financial system, many investors instinctively have or may want to pull out of the equity markets. Realistically, no one wants to stay in what seems to be an endless market deterioration ; however, all the necessary ingredients now appear to be in place to stabilize banks and financial markets. More importantly – the decline will eventually subside over time, so staying on course can prove, and will prove in our assessment to be the best decision.
J.P. Morgan (JPM) has just come out with a list of stock recommendations collectively called “The Franchise 16.” In its 48-page explainer, the firm list 16 companies that it thinks may outperform the U.S. stock market and global weakness over the next 12-18 months. These are co.’s, according to J.P. Morgan, that possess a profitable business model, substantial financial resources, high-cash flows and low-debt.
In a note titled “Stocks to Own Beyond the Market Turmoil” analysts recommended the following stocks, all rated “overweight.”
3M Co (MMM) operates as a diversified tech co. worldwide. It operates in six segments: Industrial and Transportation; Health Care; Display and Graphics; Consumer and Office; Safety, Security, and Protection Services; and Electro and Communications. The co. has a $40.2 billion Market cap, 22.50% Operating Margin, mid 14% Profit Margin, $25.60 billion revenue, $2 bln in total cash, $6.1 bln debt as of most recent quarter and a 1.51 Current Ratio.
Baxter International Inc (BAX) operates as a healthcare company worldwide. The co. has a $38 billion Market cap, 21.15% Operating Margin, 15.70% Profit Margin, $11.90 billion revenue, $2.2 bln in total cash, $3.3 bln debt as of most recent quarter and a 2.3 Current Ratio.
Colgate-Palmolive Co (CL) engages in the manufacture and marketing of consumer products worldwide. It operates in two segments, Oral, Personal, and Home Care; and Pet Nutrition. The co. has a $32 billion Market cap, 20.65% Operating Margin, 12.10% Profit Margin, nearly $15 billion in revenue, $644 million in total cash, $3.8 bln debt as of most recent quarter and a 1.29 Current Ratio.
CA Inc (CA) engages in the design, development, marketing, licensing, and support of IT management software products worldwide. The co. has a $8.5 billion Market cap, 24.80% Operating Margin, 13.20% Profit Margin, $4.4 billion in revenue, $2.5 billion in total cash, $2.3 bln debt as of most recent quarter and a 1.15 Current Ratio.
Devon Energy Corp (DVN) and its subsidiaries primarily engage in oil and gas exploration, development, and production; the transportation of oil, gas, and natural gas liquids; and the processing of natural gas. The co. has a $33 billion Market cap, 32.09% Operating Margin, 28.32% Profit Margin, $14.48 billion in revenue, $1.85 billion in total cash, $5.45 bln debt as of most recent quarter and a 0.90 Current Ratio.
General Mills Inc (GIS) manufactures and markets branded and packaged consumer foods worldwide. The co. has a $22 billion Market cap, 15.75% Operating Margin, 9.10% Profit Margin, $14.1 billion in revenue, $655 million in total cash, $7.4 bln debt as of most recent quarter and a 0.86 Current Ratio.
Gilead Sciences Inc (GILD) a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life-threatening infectious diseases. The co. has a $40 billion Market cap, 50.3% Operating Margin, 37.8% Profit Margin, $4.7 billion in revenue, $1.35 billion in total cash, $1.33 bln debt as of most recent quarter and a 1.5 Current Ratio.
Google Inc (GOOG) a technology company, maintains index of Web sites and other online content for users, advertisers, Google network members, and other content providers. The co. has a $119 billion Market cap, 30.2% Operating Margin, 24.7% Profit Margin, $19.7 billion in revenue, $12.8 billion in total cash, $0 debt as of most recent quarter and a solid 6.97 Current Ratio.
Hewlett-Packard Co (HPQ) provides various products, technologies, software, solutions, and services worldwide. The co. has a $98 billion Market cap, 9.2% Operating Margin, mid 7% Profit Margin, over $113 billion in revenues, $14.9 billion in total cash, $10.3 bln debt as of most recent quarter and a 1.22 Current Ratio.
McDonald’s Corp (MCD) together with its subsidiaries, franchises and operates McDonald�s restaurants worldwide. The co. has a $61 billion Market cap, 25.80% Operating Margin, 19.20% Profit Margin, $23.35 billion in revenue, $2.35 bln in total cash, $11.1 bln debt as of most recent quarter and a 1.23 Current Ratio.
Merck & Co Inc (MRK) provides products for human and animal health in the United States and internationally. The co. has a $62 billion Market cap, 25.75% Operating Margin, 20.55% Profit Margin, $24.20 billion in revenue, $10 bln in total cash, $5.11 bln debt as of most recent quarter and a 1.80 Current Ratio.
Monsanto Co (MON) provides agricultural products for farmers principally in the U.S. It operates in two segments, Seeds and Genomics, and Agricultural Productivity. The co. has a $45 billion Market cap, 25.40% Operating Margin, 17.80% Profit Margin, $11.38 billion in revenue, $1.6 bln in total cash, $1.82 bln debt as of most recent quarter and a 1.72 Current Ratio.
Nucor Corp (NUE) engages in the manufacture and sale of steel and steel products in North America. It operates in two segments, Steel Mills and Steel Products. The co. has a $11 billion Market cap, 14.60% Operating Margin, 8.4% Profit Margin, $20.70 billion in revenue, $2.8 bln in total cash, $3.3 bln debt as of most recent quarter and a 2.78 Current Ratio.
Philip Morris International (PM) engages in the manufacture and sale of cigarettes and other tobacco products in markets outside the U.S. The co. has a $90 billion Market cap, 41.60% Operating Margin, 27.23% Profit Margin, $24.45 billion in revenue, $3.3 bln in total cash, $8.3 bln debt as of most recent quarter and a 1.38 Current Ratio.
Union Pacific Corp (UNP) provides rail transportation services in North America. The co. has a $30.9 billion Market cap, 20.85% Operating Margin, 11.60% Profit Margin, $17.24 billion in revenue, $611 million in total cash, $8.3 bln debt as of most recent quarter and a 0.80 Current Ratio.
Visa Inc (V) operates retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities in approximately 170 countries and territories. The co. has a $41 billion Market cap, 37.50% Operating Margin, negative 4.8% Profit Margin, $7.15 billion in revenue, $6.24 billion in total cash, $110 million debt as of most recent quarter and a 1.78 Current Ratio.
J.P. Morgan, the largest U.S. bank by market value, this week cut its global growth forecast for fiscal ’09 to 0.95% from 2.1%.
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manufacture and sale of cigarettes and other tobacco products in markets outside the U.S. The co. has a $90 billion Market cap, 41.60% Operating Margin, 27.23% Profit Margin, $24.45 billion in revenue, $3.3 bln in total cash, $8.3 bln debt as of most recent quarter and a 1.38 Current Ratio.