Master of Its Domain?

Last November I mentioned that I liked Mastercard, symbol MA, before its last earnings release. The stock was trading in the 80's at that time and I suggested a run up to $100 was very possible. Well, it closed around $110 last Friday. So what's next? Mastercard is reporting its 4th Quarter Earnings this Friday, February 9. The analyst estimates are around $.17/share. Forget about that number. They will crush it more than likely. Just like Google and Apple, I see a big upside in the earnings for Mastercard. The fourth quarter of the year is when most people use their credit cards. Also, Bank of America has already reported a 17% in its credit card business. Well, Mastercard is their biggest client. New studies have shown that the savings rates for Americans is the lowest since the Great Depression. This to me implies that people spent and lot more than they made last Christmas( go figure!) via the good ol' credit card. Prudential raised its price target on Mastercard to $130 and Jim Cramer says $160 is the right value for the stock. I think somewhere in between is a good estimate $145-ish). Friday's earnings will play a big role as to where the stock is heading this year. If the numbers arent stellar, the stock will have a serious correction. However, I would buy the stock on a 10-20% correction. As I mentioned earlier, I think this stock is a core holding for a growth portfolio. GO BEARS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Exxon Mobil

I like XOM here. Its pulled back and the oil stocks in general have been hit by lower oil prices. Exxon Mobil reports earnings on Feb 1. I think XOM is a good contrarian play here. Looking at the chart, the long-term uptrend is still in tact. Its not unreasonable to see Exxon Mobil trading near a $100 in a couple of years.

What's Cooking in the Microwave?

Here is a stock that I think has bottomed in the short-term and possibly long term as well:

Hittite Microwave Corporation.

Who?

That's right, stock symbol HITT. Trades on the NASDAQ for about $32/share. So what do they do? Here is the profile from yahoo finance:

Hittite Microwave Corporation engages in the design and development of analog and mixed-signal integrated circuits, modules, and subsystems used in radio frequency, microwave, and millimeter wave applications worldwide. The company’s product portfolio comprises amplifiers, attenuators, frequency dividers and detectors, frequency multipliers, mixers and converters, modulators, oscillators, phase shifters, sensors, and switches. In addition, it supplies custom semiconductor components to its customers. The company’s products are used in a range of wired and wireless communications applications, such as cellular telephone base stations, microwave and millimeter wave radio systems, broadband wireless access systems, and direct broadcast satellite systems. Its products are also used in detection, measurement, and imaging applications, including military communication, targeting, guidance, and electronic countermeasure systems; commercial, scientific, and military spacecraft; automotive collision avoidance systems; medical imaging systems; and industrial test equipment.

Enough about stuff no one really understands. The stock is technically right to buy here. This is also a good company that makes quite a bit of cash. The stock is less volatile that the market in general given its Beta of .45. This stock has also been a favorite on the Investors Business Daily newspaper which ranks the top 100 stocks. The stock is down from its high of about $51/share because its last earnings report was a little less than Wall Street expected. Bottom line, I think the stock is worth the risk in the low 30's.

GE Chart from Stockcharts.com

GE- Bringing Good Things to Life in the Market

General Electric has broken out of a long funk. The stock closed today @ $38/share. The stock broke out on Dec 15 trading 88 million shares. These weren't mom and pop buying up shares, it was big money moving into the stock. GE is considered a Mega-Cap stock, which means it generates yearly revenues in excess of some countries gross domestic product. Anyhow, the charts don't lie. GE is trading at a new 5 year high. Many money managers feel GE is just as good as "cash". In other words, its stable, offers a dividend yield, and has predictable earnings. No telling how long the big money will stay in GE, but I dont think its leaving until GE hits $40. See other post for GE stock chart.

C Stock Chart - Click on Stock Chart Below

The Citi Isn't Sleeping Now

Im talking about Citigroup( NYSE:C) here of course. Full disclaimer, I am empolyed by Citigroup. Over the last 5 years Citi's stocks has traded roughly between the $40-50 levels. Technicians of the stock market call this a "trading range". However, recently Citi's stock has been on a tear, closing at new highs near $54/shares as of December 15. So why the move? No one really knows for sure, but here are some ideas being thrown around:

1. The stock is simply cheaper that its peers with respect to its price to earnings ratio. In English, what you are paying for a share of Citi stock in relations to what the company can earn in profits over the next couple of is relatively cheap. Citi's competitors include JPM Morgan/Bank of America/Capital One/Goldman Sachs.

2. The FED is not expected to increase interest rates in the future. Citi's credit card business borrowing costs will remain stable or possibly decrease in the future. Also, the big money managers may be rotating money into the Financial sector in anticipation of a rate reduction by the Federal Reserve.

3. The overhang of intergrity and litigation problems from the late 90's and early 2000's seem to be waning.

4. The make a ton of money. Citigroup's profits come in around $4-5 billion EVERY 90 DAYS. That puts it up there with the top 5 most profitable companies in the world.

5. Citi's dividend yield in near 4%. So you get paid to hold on to the stock.