Five High-Profile Stocks Moving Higher
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A common theme of 2013 has been for previous years’ laggards to rally higher, showing a new-found level of interest. I suppose this makes sense as super-stock Apple falls into uncharted territory. Investors are now looking for value in unfamiliar places, and these stocks continued to rally on Monday.
Research in Motion
Research in Motion has seen the biggest bounce of any stock on this list following strong data from Nokia, weakness in Apple, and high expectations for its new BB10 operating system. The stock has rallied massively as the company prepares to launch its first touchscreen-only phone and large carriers disclose that they will be carrying the phone.
My only problem with this stock is that its rally has been 100% speculation and that it could be a bounce off the bottom of a five-year free-fall. The company is no longer profitable, saw a 47% revenue decline in its last quarter, and is almost twice as expensive as Nokia using price/sales. Therefore, I don’t like this stock or its chances to continue trading higher.
Dendreon, I love this stock! I bought it back in November after months of being bearish. The company has been pushed higher due to lower costs and improving demand for Provenge. The company has finally learned that it must operate efficiently in order to grow and Wall Street has been satisfied. Furthermore, serious conversations regarding a potential takeover are now taking place, and many believe it will be purchased in the next few months. With a price/sales of 2.09 and a product that could still grow another 75%, I like this stock in 2013.
Alcatel-Lucent was recently my value of the year (Sprint was 2012) and the stock was pushed significantly higher following news of interest for its submarine optical cable business. The company is in the beginning phases of a major restructuring plan, which has continued to push shares higher. The stock is currently trading with a price/sales of 0.19 and I believe it has the potential to be a great stock in 2013 as it removes and restructures weak segments and builds on its stronger segments.
If you look at the fundamentals alone, then there is no arguing the fact that Hewlett-Packard is cheap. However, when you incorporate the uncertainty surrounding its business and slowing demand, then you come to the realization that perhaps it is not.
HPQ is without question the toughest assessment for me personally. The company appears to have a complete lack of direction and does not have the same catalysts as the other stocks on this list. We already know that 2013 will be rough, because the company told us. But with that being said, a 0.26 price/sales and a forward P/E ratio of 4.80 is considerably cheap. Therefore, I remain neutral on this stock and need to see more before I feel confident in its future.
These are four of the most controversial stocks in the market, and each has traded considerably higher in 2013. Last year we saw as Sprint and Bank of America rallied to lead the market in performance, but this year it will most definitely be a different company. With each of these four companies getting off to such a strong start, it’s very likely that one or more will continue and lead the market in gains. Therefore, take some time to perform proper research, and who knows, you might buy the stock that leads the market in 2013.
BrianNichols is long ALU and DNDN. The Motley Fool owns shares of Dendreon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!