Corning, McDonald's and Nokia -- Three Picks Revisited
Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
One will never pick stock winners every time. Even the best analyst will strike out on occasion. Over time some losers turn into winners for many reasons, ideally because of the solid fundamentals that were the reasons the stock was purchased to begin with. Stocks go up and down. Corning (NYSE: GLW), McDonald's (NYSE: MCD) and Nokia (NYSE: NOK) are three companies I have talked about that since have declined in value. So let's revisit them.
Corning is a stock that bewilders. It has lost about 7% since I first spoke of it back in March. Institutions own about 75% of its stock, it pays an .08 cent a share quarterly dividend, which is a 2.2% dividend yield higher than the 1.5% yield of a 10-year treasury. This company sits on about $3.7 billion in cash, according to an article this past week in Barron's. So what is the problem? Over 750 million devices use its Gorilla Glass. They are coming out with a new product called Willow Glass. This glass is as thick as a piece of paper and can be bent in the shape of a U. It is flexible, it is thin and more than likely will be used to make tablets and phones even thinner and lighter than they already are. I still believe this stock is a buy.
Last month I thought McDonald's would profit from lower gas prices here in the U.S. helping to increase sales in its upscale menu items. What I didn't consider was that gas prices weren't going to fall like they should have and that its sales in the rest of the world would ease as much as they have. It appears that refineries and your local filling station have kept prices higher. Gas is selling for about .16 a gallon less than last year at this time. Oil is selling for about $16 a barrel less than this time last year. Every $10 fall in crude prices should translate into a .24 cent a gallon drop in a gallon of gas, according to a Forbes article. Do the math. I still think McDonald's is a great company. It is down about 2% since May's blog and it pays a .70 cent a share quarterly dividend.
Ugh! Nokia is down over 50% since my April blog touting its new phone. I still own it. It was a case of thinking it couldn't go any lower....oh, my did it ever. The only good thing is my loss would be even worse if not for the .25 cent per share dividend it payed. This stock will take a long time -- if ever -- to come back from the dead. My hope is that its price is cheap enough for someone to consider buying it. Not taking into consideration its platform, I think the phone design itself is blah, the advertising campaign was awful and its competition is big.
So after all I still think two of the three are still good buys....I should have said good-bye to Nokia.
mwm102 owns shares of Nokia stock mentioned above. The Motley Fool owns shares of Corning. Motley Fool newsletter services recommend Corning, McDonald's, and Nokia. 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. If you have questions about this post or the Fool’s blog network, click here for information.
