5 Stocks to Watch This December
Naomi is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The year is almost ended since we are already in the second week of December. This signifies the last month of trading, and while some may be busy gathering groceries for the season and buying Christmas gifts for their loved ones, there are others who are more interested in knowing what this month has to offer as far as the stock market is concerned. To that end, I have listed below the 5 stocks every investor should watch this last month of 2012. They are:
Research in Motion (NASDAQ: BBRY)
Research in Motion has had a pretty tough time lately. Not only is its flagship Blackberry mobile phone being out-classed in all departments by the likes of Apple and Samsung, it has also seen its share price looking like the diamond run of an alpine ski slope since mid-2011. The company has been on a steady decline since it failed to innovate in an industry that has little mercy for those that can’t compete. Its share price had fallen to a low of $6.50 in September, but the release of news regarding its new BB10 phone has caused some investors to go long on the ailing handset designer. A recent rally to $12 per share shows that the market really is prepared to take a gamble on the innovative capacities of RIMM, with many seeing the launch of its new produce as a make-or-break scenario. Although it still has intrinsic value in its design patents, the real test of the company’s worth will be whether they can once again compete with the mobile market leaders.
Hewlett-Packard (NYSE: HPQ)
Hewlett-Packard is another company that has been effectively thrown on the heap of dead and buried tech has-beens and December is going to be a critical month for the firm. Analysts believe that the company’ s problems are structurally flawed, it has experienced a revolving-door of poor CEOs since 1995 and the current leader, Meg Whitman, has got her hands full with trying to turn the ailing company around. The company currently trades around $13 per share with its stock price reduced by over 50% in the past year and approximately $15 more expensive that Sterne Agee analyst Shaw Wu values the company. On a fall of $6.9 billion decline in yearly revenue and a ten-year low, HP really have very little to look forward to in 2013 with an outdated inventory and minimal innovation in the pipeline. Christmas sales are likely to be bleak; however, it’s a huge brand and if it can survive is very unlikely to be sitting at these levels if its 5-year recovery plan takes hold. HP remains a buy for the brave and very patient.
Apple (NASDAQ: AAPL)
Apple recently caused panic and paranoia amongst tech investors when the world seemed to turn against the Beautiful One. A fall of around 20% in share price made many investors think that perhaps they had bought into what they considered to be a long term investment too late, just as the bubble was about to burst. They were, however, quickly reassured when prices bounced back up from $525 to $589 following this almost inexplicable sell-off. The company is set to have another bumper Christmas with the release of the iPad mini and the ever-popular iPhone. However, with the recent sell-off, investors are going to be cautious if results show any flicker of reason to be cautious.
Apple may rise throughout December and January as general expectation considering its 6% boom last year on the prediction of strong product sales but what some investors fear is the lack of new believers piling into the stock and shrinking market share as seen over the past year. The emergence of the tablet/smartphone combination demonstrated by Google’s (NASDAQ: GOOG) Nexus and Apple’s own iPad mini fuels fear that these two devices will eventually combine and further shrink the market. The most recent Apple products, being reworked versions of already-existing designs, have also raised concerns that the market-leader has lost some of its ability to be innovative but apart from this, Apple is still the clear leader among must-have technology and its ability to make almost $4 billion per week on average justifies its average price target at $757.
Ralph Lauren (NYSE: RL)
Whilst the Italian economy attempts to bring itself back from the brink, New Yorkers are piling into the Italian-inspired lifestyle clothing label, Ralph Lauren. December sales are expected to be bumper for the fashion house that commands over 58% gross profit margin. The company sits on an industry-low P/E ratio of 17 and has successively increased its earnings per share, even throughout the economic difficulties, to $7.13 from $5.76 in 2011 with an anticipated rise to $7.85 this year. Excellent 2012 second-quarter results of $1.9 billion show that it has solid management that may really take advantage of the label’s popularity this December.
The Home Depot
Shares in The Home Depot may not have appeared to be the most attractive investment over the past two years with housing being a particularly sensitive industry to the global economic crisis. As the US market rekindles itself, however, this company may see a rise in early 2013. The shares have rallied more than 50% over the past year and are currently sitting at just under $65 which has not been seen since the early 2000. Furthermore, it not only has a growing housing industry to support its current value but the old adage of every clouds silver lining has the company well-placed in the rebuilding after Hurricane Sandy. Its strong North-Eastern presence and a forward PE of 16.9 puts the company in a good position for at least short term gains into the New Year.
Are you ready to start the New Year with a great hit come 2013? It really comes with making the right choice of investment this month of December and now that you have the information at the tip of your fingers, make sure to take the right step in the right direction as far as stock investing is concerned.
Chizy has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend Apple and Google. 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!