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I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I'd be unable to keep up on my favorite sectors and see what's really moving the market. Even worse, I'd be lost when the time came to choose which stock I'm buying or shorting next.
Today is "Watchlist Wednesday," so I'm discussing three companies that have crossed my radar in the past week -- and at what point I may consider taking action on these calls with my own money. Keep in mind, these aren't concrete buy or sell recommendations, nor do I guarantee I'll take action on the companies being discussed weekly. What I can promise is that you can follow my real-life transactions through my profile, and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.
General Electric (NYSE: GE )
Don't look now, but Humpty Dumpty not only got back on the wall, but apparently managed to put himself back together again as well!
Slowly but surely, GE has put together a nice string of quarterly growth. It's seen operating earnings growth in nine straight quarters and noted strength in its industrial segment as the biggest driver in its most recent quarter. Investors are also abuzz over the company's plans to split its energy infrastructure division into three separate components to save costs and further unlock value. This trend of breaking down bigger companies into more manageable parts is something we're seeing across a wide variety of sectors at the moment (and early indications are that it's a smart move).
GE has done a pretty good job getting its finance wing back on stable ground. Its capital arm has sacrificed near-term revenue growth but has walked away with a Tier 1 common equity ratio that's crossed over the 10% mark.
One area that definitely bears watching in the near-term is how badly negative currency translations will hurt GE's bottom-line results. Both GE and United Technologies (NYSE: UTX ) , which have a strong presence in Europe, have faced nasty repercussions from currency hits in their most recent quarters. For GE it was to the tune of a negative $900 million impact and for United Technologies it was negative $800 million in revenue. Despite this, GE is slowly but surely getting its pre-recession swagger back, and investors should take notice.
Nuance Communications (Nasdaq: NUAN )
Nuance can try to play coy with the market by playing down what its fourth-quarter earnings might look like (in fact, it said very little at all), but if I were a betting man, I'd take the cues of Apple's other suppliers and bet on a big order surge for Nuance over the coming quarters.
Cirrus Logic (Nasdaq: CRUS ) , the audio chip supplier for Apple's iPhones, announced in late July that it's expecting sequential revenue growth of 70% to 90% in the upcoming quarter. While not alluding to the precise reasons for the growth explosion, it's pretty obvious that with 70% of its revenue tied to Apple, the launch of the iPhone 5 is expected to be nothing short of the best thing since sliced bread.
Without question, Apple is smitten with Nuance's Siri speech recognition software, and plans are for its software to appear in other Apple devices. However, investors shouldn't discount Nuance's ability to lure more business from Samsung, Nokia, and other industries altogether, like the medical sector. As Nuance's 90% spike in profits demonstrated in the third quarter, things might just be getting started. So go ahead, Nuance, keep playing coy about your growth prospects.
iShares Silver Trust (NYSE: SLV )
Investors are always pounding the table on silver's yellow bigger brother, but when everything is said and done, silver may offer the best price increase potential for the remainder of the year -- at least according to analysts at Commerzbank.
China is the world's largest importer of silver and, as their research notes, imports were down by 30% over last year. However, exports also dipped by nearly 40%, signaling that China will probably be making up for its silver shortage by ramping up silver imports in the second half of the year. This back-loaded buying could be the support that silver prices need to move higher and would make the iShares Silver Trust an intriguing play heading into the fourth quarter. I personally advocate looking toward big silver players like Silver Wheaton for indications of production demand, but Commerzbank's thesis does indeed make a lot of sense. Keep your eye on silver!
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below, and consider following my cue by using these links to add these companies to your free personalized watchlist to keep up on the latest news with each company:
- Add General Electric to My Watchlist.
- Add Nuance Communications to My Watchlist.
- Add iShares Silver Trust to My Watchlist.
Can Apple keeps up its immaculate run as the world's most valuable company? Will General Electric continue to put its pieces back together and return to pre-recession form? These questions and a lot more have been answered for you in our latest premium research reports on Apple and General Electric. In these reports you'll get an unbiased an in-depth look at what opportunities and pitfalls could move each stock, all for less than the price of a week's worth of coffee. As a bonus, you get one full year of updates. Click here to get your report for Apple, and click here for your report on General Electric.