In this week’s Blue Harbinger Weekly, we review two attractive buying opportunities. First, a company that was down big on Friday after announcing disappointing earnings. In this particular case, we believe the market overreacted to the news, thus creating a compelling opportunity for long-term investors. Second, we review an energy-related company that announces earnings this upcoming week. We own this one in our Income Equity strategy, and we believe it offers a compelling valuation for long-term investors. Plus, it pays a big growing dividend.
The first of our two attractive buying opportunities is Autliv (ALV). Autoliv is the world’s largest automotive safety supplier. Its stock was down 8.5% on Friday after announcing earnings. Specifically, the decline in stock price was due mainly to lower organic growth than expected. However, Autoliv remains a very profitable company, with significant growth ahead, an attractive dividend (slightly above average), and a compelling valuation. Autoliv is our new investment idea for this week, and you can read our full write-up here.
Phillips 66 (PSX) is the other attractive buying opportunity. Specifically, we believe Phillips 66 is significantly undervalued because the market is placing too much focus on its current refining business (which is temporarily suffering from low crack spreads) and not enough emphasis on its transition into more chemicals and midstream businesses (which will reduce volatility and deserve a significantly higher valuation multiple). It also pays a big dividend (3.34% dividend yield). We own this one in our Blue Harbinger Income Equity strategy. It announces earnings this week, and you can read our new write-up on Phillips 66 here.