With the market experiencing the most persistent weak streak since the credit crisis, stocks have been sliding at an alarming rate and not necessarily because the companies are worth any less than they were a month ago. Anxiety surrounding June’s weak consumer spending and the impact of the budget slash on the economy have prompted investors to sell off even the stronger holdings in their portfolio. That has led to the decline in a number of worthy stocks that are beginning to look highly appealing.
Hertz Global Holdings (HTZ) – The car rental company announced their earnings today, raising their full-year EPS guidance to range of 91 to 96 cent from 85 to 90 cents. Hertz also increased revenue expectations to between $8.15 and $8.25 billion from $8.1 to $8.2 billion. Hertz earnings came after hours after a long day of declines during trading. The company was down close to 7 percent for the day and with the new guidance, it could be back up soon making it an appealing buy in morning trading.
Whole Foods Market (WFM)– Whole Foods has a history of being a finicky stock as many investors assume a weak economy spells losses for the luxury organic grocer. With the trend of the rich getting richer and the poor getting poorer; however, it’s not likely that the Whole Foods customer demographic will be impacted enough to shift their shopping habits. That said, the recent reversal in share prices may not be deserved. The price to earnings ratio, in spite of a 4-plus percent loss today, remains well above that of other grocers. While below its 52-week high, shares of Whole Foods are still near enough to peaks that investor could stand to pause until it sheds a few more dollars before snapping it up.
Starbucks Corporation (SBUX)- Starbucks, as evidenced by the presence of the chain on nearly every corner, is a leading purveyor of coffee, tea and other packaged foods. They have been running a strong business and gaining steadily from the high demand for coffee. A recent conference painted a rosy picture for earnings at the company, $1.50 per share in 2011 and $1.80 per share in 2012 but the share prices remain near 52-week high. Starbucks is among a range of coffee companies nearing peaks but it is perhaps the one most likely to maintain strength and continue to grow. Once the coffee sector endures a minor correction Starbucks could be a buy. As of yesterday’s close they were down around 3 percent.
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