April Stocks Bring May Profits
March presented a challenge to investors with a sharp sell-off followed by a “V” shaped bottom mid-month. The leading indices have successfully neutralized their near-term decline, but volatility is high and volume low, indicating a possible lack of commitment on the part of major institutions. Uncertainty with the financial crises in Europe and unrest in North Africa and the Middle East still dominate headlines.
Short-term indicators are now bullish, but as of this writing, they have not yet broken the tops made in February. If the indices break to new highs, the following stock picks could lead the way higher, and each of these top stocks should be an excellent long-term performer.
Here are your top stocks to buy for April:
Top Stock #1 – Caterpillar (CAT)
Caterpillar (NYSE: CAT), the world’s largest construction company, is known for the manufacturing of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was on our Top 6 Stocks for December list, when I said, “The advance from its bear market low at $22 has been very orderly — defined by its ability to stay above its 200-day moving average and its bullish support line.”
CAT could be a major beneficiary of orders from Japan due to the damage from the earthquakes and tsunami. S&P had a target of $95, which matched our technical target, but they have raised their sights to $121. The stock’s recent break from a double-top confirms that target.
Top Stock #2 – Coeur d’Alene Mines (CDE)
Coeur d’Alene Mines Corporation (NYSE: CDE) engages in the operation, ownership, exploration and development of silver and gold properties in South America, Mexico, the United States and Australia.
Ford Equity Research has a “buy” on CDE projecting that it will outperform the market over the next six to 12 months. EPS has increased from a 60-cent loss to $1.17 over the past five quarters.
Technically, CDE broke from a saucer with a double-top in October and a triple-top on Feb. 28. It broke to a new high at $36, and then pulled back to its near-term trendline at $30 before rebounding again to $36. CDE could again pull back to $30 to $32, which is our buy point. The trading target for CDE is $38, but longer term CDE could go higher.
Top Stock #3 – Ford Motor Co. (F)
On Oct. 22, with Ford Motor Co. (NYSE: F) at $12.86, I wrote, “Yesterday, the stock broke from the right triangle following two buy signals from our internal Collins-Bollinger Reversal (CBR) indicator and a new stochastic buy. This breakout reinforces our target for Ford of $16 by year-end.”
Ford exceeded our target by jumping to $16.83, and then to $18.97 in January. But a combination of profit-taking and a market pullback drove Ford’s shares back to the 200-day moving average at around $14. All of our internal indicators favor new purchases of the stock, and on March 15, our CBR indicator flashed a buy signal.
S&P rates the stock a “four-star buy” and estimates that the company should earn $2.09 for 2011 versus $1.66 last year. S&P has a 12-month target of $18, which matches our six-month technical target.
Top Stock #4 – Tupperware Brands (TUP)
Household name Tupperware Brands Corp. (NYSE: TUP) is a global direct seller of multiple brands with a line of goods that focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia.
S&P estimates that 2011 earnings will increase to $4.24, up 16% from an estimated $3.66 in 2010. The 2005 purchase of Sara Lee Corp.’s (NYSE: SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. S&P rates TUP a “four-star buy” with a 12-month target of $61. TUP’s annual dividend yield is 2.1%.
Technically, TUP had a major breakaway gap in early February, which targets the stock for the mid $60s. Longer term, TUP could go much higher.
Top Stock #5 – QEP Resources (QEP)
QEP Resources Inc. (NASDAQ: QEP) is a leading independent oil and gas exploration and production company, which spun off from Questar Corporation (NYSE: STR) last year. It focuses primarily on the Rocky Mountain and Mid-Continent regions of the United States.
S&P estimates earnings of $1.38 in 2011 and $2 in 2012. Like many exploration companies, QEP is a speculative stock, but growth from its Mid-Continent region lifted production by 21% in 2010 versus 11% in 2009, and S&P is estimating a 15% production growth that will enable it to fund its capital program via cash flow in 2011. S&P’s 12-month target for QEP is $45, and they have a “four-star buy” on the stock.
Technically, a break over $42 should produce a trading target of $48. But QEP could also be an excellent long-term performer with a much higher target.
Top Stock #6 – V.F. Corp. (VFC)
Global apparel company V.F. Corp. (NYSE: VFC) designs and manufactures, or sources from independent contractors, a variety of apparel and footwear for all ages. Its Vans and North Face brands are viewed as growth drivers, along with its new store growth in Asia. According to Standard & Poor’s, VFC is transforming the denim and daypack area with lifestyle apparel brands.
S&P’s 12-month target was recently increased to $110, and it gives the stock a “five-star strong buy” rating. Technically, after consolidating for over a year between $70 and $90, the stock broke a quadruple-top with an impressive breakaway gap with a technical target of $110. VFC’s annual dividend yield is 2.6%.
