Banking, finance, and taxes
Buffett's Biggest Upside Stocks, Summer 2010 (BRK-A, AXP, BAC, CMCSA, XOM, GCI, GE, IRM, MCO, SNY, WFC, WLP)
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Warren Buffett does not have the same time frame as most investors. How many of you buy with a “forever” outlook? Buffett says he likes that term, short of whether he sees fundamental changes that wreck the forever thesis. Berkshire Hathaway Inc. (NYSE: BRK-A) disclosed its latest full public equity portfolio a week ago and we wanted to see which stocks were in the top ten list of his picks with the largest upside potential now that the markets are in turmoil. The stocks which made the screen are American Express Company (NYSE: AXP), Bank of America Corporation (NYSE: BAC), Comcast Corporation (NASDAQ: CMCSA), Exxon Mobil Corporation (NYSE: XOM), Gannett Co. (NYSE: GCI), General Electric Co. (NYSE: GE), Iron Mountain Inc. (NYSE: IRM), Moody’s Corp. (NYSE: MCO), Sanofi-Aventis SA (NYSE: SNY), and Wells Fargo & Company (NYSE: WFC).
For starters, this is the largest upside to the average (mean) analyst target measured by Thomson Reuters. Unlike the list at the start of 2010, the new hurdle was had more than 30% implied upside versus under 20% at the start of the year. The explanation for that is that analysts moved up the price targets of the stocks and now many of the stocks have sold off from highs with the market.
So we have included the closing price on Monday, the consensus price target, that expected gain, a 52-week trading range, and we have even included the percentage that each stock has sold off from its 52-week high. Lastly, we have some color, background, and even some caveats where applicable.
American Express Company (NYSE: AXP) at $39.04 has a target of $50.58, with an implied upside of 29.9% and its 52-week range is $22.00 to $49.19.
Bank of America Corporation (NYSE: BAC) at $15.40 has a target of $22.79, with an implied upside of 47.9% and its 52-week range is $10.57 to $19.86.
Comcast Corporation (NASDAQ: CMCSA) at $16.77 has a target of $21.46, with an implied upside of 27.9% and its 52-week range is $13.04 to $20.56.
Exxon Mobil Corporation (NYSE: XOM) at $60.19 has a target of $79.63, with an implied upside of 32.3%% and its 52-week range is $58.46 to $76.54.
Gannett Co., Inc. (NYSE: GCI) at $14.64 has a target of $22.75, with an implied upside of 55.3% and its 52-week range is $3.10 to $19.69.
General Electric Co. (NYSE: GE) at $16.01 has a target of $22.23, with an implied upside of 38.8% and its 52-week range is $10.50 to $19.70.
Iron Mountain Inc. (NYSE: IRM) at $24.23 has a target of $32.71, with an implied upside of 34.9% and its 52-week range is $21.32 to $32.04.
Moody’s Corp. (NYSE: MCO) at $21.15 has a target of $29.67, with an implied upside of 40.3% and its 52-week range is $18.50 to $31.04.
Sanofi-Aventis SA (NYSE: SNY) at $28.91 has a target of $42.99, with an implied upside of 48.7% and its 52-week range is $27.90 to $41.59.
Wells Fargo & Company (NYSE: WFC) at $28.71 has a target of $36.71, with an implied upside of 27.8% and its 52-week range is $21.57 to $34.25.
As a runner-up, there is one almost humorous notion. WellPoint Inc. (NYSE: WLP) is one that Buffett has unloaded out of the portfolio after trimming stakes, likely as a result of the notion that health care reform will unfavorable for health benefits providers. He may have supported Obama, but Buffett did not seem keen on taking risks and/or losses endlessly in this sector.
See this list versus Buffett’s prior biggest upside potential stocks for comparison, or you can peruse the most recent Buffett holdings.
Here is a brief table showing each of these by ticker:
Ticker | Price | Target | Exp. Gain | 52 Wk Range | Off-Highs |
---|---|---|---|---|---|
AXP | $39.04 | $50.58 | 29.5% | 22.00 – 49.19 | Down 20.63% |
BAC | $15.40 | $22.79 | 47.9% | 10.57 – 19.86 | Down 22.46% |
CMCSA | $16.77 | $21.46 | 27.9% | 13.04 – 20.56 | Down 18.43% |
XOM | $60.19 | $79.63 | 32.3% | 58.46 – 76.54 | Down 21.36% |
GCI | $14.64 | $22.75 | 55.3% | 3.10 – 19.69 | Down 25.65% |
GE | $16.01 | $22.23 | 38.8% | 10.50 – 19.70 | Down 18.73% |
IRM | $24.23 | $32.71 | 34.9% | 21.32 – 32.04 | Down 24.38% |
MCO | $21.15 | $29.67 | 40.3% | 18.50 – 31.04 | Down 31.86% |
SNY | $28.91 | $42.99 | 48.7% | 27.90 – 41.59 | Down 30.49% |
WFC | $28.71 | 36.71 | 27.8% | 21.57 – 34.25 | Down 16.18% |
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JON C. OGG
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