In this week’s Weekly, we review the Blue Harbinger stocks that announced earnings last week (they completely knocked it out of the ball park), and we explain why we believe they’ll continue to deliver very big gains going forward. We also review the Blue Harbinger stocks that will be announcing earnings over the next two weeks, and why we believe they too will deliver terrific results. Also worth noting, this weekend Barron’s announced it is “Time to Buy Bank Stocks.” We highlight our favorite bank stock in particular.
source: Barron's
Last week McDonald’s (a Blue Harbinger holding) announced earnings that beat expectations, and the stock gained roughly 4.5%. This is a stock that is outperforming the market by 38% over the last year, and it still has room to run. For starters, last week’s earnings announcement was the first to include the benefits of the company’s all-day-breakfast campaign which really drove-up customer visits during the quarter. In fact, many of the breakfast purchases were at higher price points which helped the bottom line. McDonald’s next punch is its two-for-two menu campaign which offers very competitive prices to help keep customer visits and revenues high. You can read more of our recent McDonald’s updates here.
Another big Blue Harbinger winner last week was Facebook (this is part of our Disciplined Growth strategy). Facebook beat even the highest of street estimates when it announced earnings last week, and the stock gained nearly 15% for the week. Facebook’s mobile advertising campaigns are really taking off and dramatically increasing revenues and profits. Further, Facebook still has barely even begun to make efforts to monetize its Messenger app and Instagram. This is a stock with an amazing growth path. You can read more of our Facebook updates here.
Caterpillar is another Blue Harbinger stock that announced solid earnings last week. The stock handily outperformed the market of January 28th after announcing earnings. This is a stock with extremely low expectations as its sales have been decimated by slower growth in emerging markets and less demand in the oil and gas industry as prices for those commodities have declined dramatically. However, we believe this is a company with a safe dividend, and when the market eventually turns around (this cycle will turn) the stock will increase dramatically. We believe this is a great time to buy Caterpillar low. You can read our recent Caterpillar updates here.
Procter & Gamble is another high dividend stock we own in our Income Equity portfolio, and P&G delivered great earnings. The stock was up nearly 6% last week. We believe this is a great blue chip among blue chips, and it is still offering a great opportunity to buy in at a low price and lock in its very safe and growing dividend. You can read our recent P&G updates here.
Johnson & Johnson is another Blue Harbinger holding that announced fantastic earnings last week. You can review our thesis on J&J here.
This weekend Barron’s proclaimed it is “Time to Buy Bank Stocks.” And the article commented on our favorite Bank stock, US Bancorp (US Bancorp is a Blue Harbinger holding). According to Barron’s:
U.S. Bancorp(USB), another holding of Buffett’sBerkshire Hathaway(BRK.A), probably is the best-managed large regional bank in the country, with some of the highest returns. It commands the highest price/tangible book ratio among its peers, thanks to a nearly 20% return on tangible equity. Half of its revenues come outside of typical lending, including such areas as payments processing. It has one of industry’s best CEOs in Richard Davis. At $40, the stock trades for 12 times projected 2016 earnings. Barron’s Roundtable member Scott Black recommends the stock in the current issue.
You can read more about our views on USB here.
Over the next few week’s, the following Blue Harbinger stocks will be announcing earnings: EastGroup Properties, Paylocity, ADP and Disney. We have higher expectations than the market does for each of these stocks, and we believe they should all outperform the market. You can read our recent updates for each of these stocks on our Blue Harbinger Members Only page.