The direction of the market is anyone’s guess but bullish investors willing to take the risk have no shortage of bargain stocks to choose from. A buying opportunity has arrived as the recent volatility led some of the Dow’s strongest stocks to lows. Plenty of stocks with strong balance sheets, certainly stronger than the United States are on sale right now and waiting for investors to drive the prices back up to match the company’s health.
General Electric (GE): General Electric is not quite as cheap as some competing stocks but its well off 52-week highs and has the benefit of being divided across a number of segments. Investors with any kind of confidence that the market will recover should be reassured by its diversified interests in energy, technology and healthcare infrasctructure. Historically, these diversified holdings have contributed to hefty revenue in a variety of economies.The fact that it generated over $21 billion in free cash flow over the TTM, which is pretty typical for the company, should give any investor plenty to feel good about, even if the economy tanks. Somehow, GE is still projected to grow earnings at a 14.6% annualized rate over the next five years, yet trades at slightly less than 10 times next year’s earnings. A 3.6% yield tops off the reasons to own this treasure.
Walt Disney (DIS): Disney’s most recent earning guidance disappointed some of its investors as a result of the higher cost of running ESPN, but with a hand in everything from resorts, cruises, theme parks and multiple television networks, the chances that Disney will continue its long history of growth are high. The entertainment goliath’s shares are currently trading at less than 10 times expected 2012 earnings estimates and have the added bonus of a 1.3 percent dividend yield. Earnings are also increasing but attitudes have been weighed down by some relative weakness in the company’s early summer movie releases. The less successful profits of Cars II and Thor distracted from Disney’s reported earnings of $1.5 billion, or 77 cents a share, an 11 percent increase from the year-earlier period. Revenue came in around$10.7 billion or around 7 percent per share higher. Considering that Disney has considerable growth prospects, including the higher prices at its theme parks and many movies and shows slated for release in 2012, this is a solid bargain.
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