4 Companies with Huge 2011 Upsides

Brittney Barrett |

2011 has proved a tricky year for stocks. The market has neither grown impressively nor indicated it's gearing up for the much-speculated-upon double dip. Some companies; however, have been flying  above the curve, producing massive upsides in spite of the dour economic news and still-lagging sectors of the economy. These corporations, whether in anticipation of major news, higher revenues or more impressive sales figures, have exhibited tremendous strength over the past 52-weeks and appear primed to produce serious gains for early investors.

Morningstar (MORN): Investment information outfit Morningstar, has been on the rise this year and there appears to be little temporary bloating in the current numbers, which are hovering near 52-week highs. The stock has risen, somewhat steadily during 2011 and over the course of the past 52-weeks. As of July of last year, the stock was trading around $39 and has since ascended to the current level of over $60. For the year, the company has a 28 percent upside. Morningstar’s impressive climb is especially worthy of note considering it made these gains in spite of barely reaching or just scarcely missing analysts expectations for earnings in the last five quarters. These narrow victories are likely to change alongside Morningstar’s plans to unveil credit ratings on stocks and company covers. Given its well-respected name, Morningstar is likely to be quickly absorbed into the existing credit raters, like Moody's, and could begin producing the earnings they have long been expected to.  Present price to earnings ratio is in the ballpark of 36.

 

Cummins (CMI) Truck engine maker, Cummins recently announced a 52 percent increase to its quarterly cash dividend, bringing yield up to about 1.5 percent. The move indicates health and confidence within Cummins, while inspiring positive investor response. Further gains are expected for the company. Additionally, Cummins, which sells truck engines, is the number one natural gas engine producer. The popularity of natural gas is rising and many companies and agencies are looking to widen its use in order to cut back on oil imports. Their role as premier hybrid engine maker may also help sales this year, as more companies are forced to abide by stricter emissions codes. Cummins latest engines meet EPA regulations making them more attractive to the market and fulfilling pent up demand. The company has a return on equity of almost 30 percent alongside a reasonable P/E ratio of 10.8.

Overall, Cummins has exhibited a strong  performance in 2011, surpassing first quarter expectations and garnering upgrades from for experts. Recent coverage indicate predictions of 13 percent improvements from current sales levels and 12.5 percent earnings before taxes margin target by 2014.  Ben Elias of Sterne Agee & Leach said he expects Cummins to reach $20 billion in revenue next year.

 

American Express Company (AXP) –Credit card goliath American Express boasts the highest market cap of all its competitors and has been a popular stock among guru investors includig Warren Buffett.  The reason for the attraction is hardly a mystery as American Express continues to prove the American love affair with the credit card in anything but over. Additionally, the latest debit card legislation will allow American Express to maintain higher processing fees than many expected. The promise of increased revenues from this continues to boost the stock which, with a P/E ratio of 15 and consensus earning of $4.15 a share indicate a 52-week upside close to 20 percent.

 

Shares of Radiant Systems (RADS) reached their 52-week high after 22.1 million shares traded yesterday against average 30-day volume of 318,000 shares. Shares are nearing 40 percent beyond their 50-day moving average the bullish pattern for this tech company seems to be here to stay. Over the past 52-weeks, shares of Radiant have traded as low as 13.06 but yesterdays confirmation of acquisition by NCR  is likely to bolster the shares of the technology company until the deal is completed in the third-quarter of 2011.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AXP American Express Company 63.85 -0.78 -1.21 5,083,894
CMI Cummins Inc. 120.63 -1.29 -1.06 934,378
LXP Lexington Realty Trust 10.71 0.05 0.47 862,457
MORN Morningstar Inc. 79.66 -0.36 -0.45 62,757

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