Stocks to watch next week
03-02-07: Have you checked your brokerage account lately? How about your 401K account? If you are like us, the damage is probably high. This is the worse week for the market in 4 years. Unfortunately, the selling is not done. Despite the strong fundamentals and reassurance from the government, this market will likely continue to sell-off next week. The best thing to do for now is build up a large cash reserve. There will be a time to buy again, for now it is a waiting game.
Meanwhile, there are many bargains out there. We are keeping our eyes on the following stocks:
Starbucks (SBUX) is now below $30 per share for the first time in a long time. While SBUX has reached our entry point target, we will continue to wait. The way things are going; SBUX could be at $27 next week. The high P/E ratio that SBUX has trading under is beginning to have an impact. It also has not been helping that the CEO has been dropping hints of an uncontrollable growth pattern.
Google (GOOG) is starting to look inexpensive. Some might wonder how a stock trading at $438 per share could be inexpensive, but if one compares the P/E to its peers, the stock is not that expensive. In fact, Yahoo! (YHOO) is actually more expensive in terms of P/E comparison (Google at 43 and Yahoo! at 59). Yes, Yahoo trading at $30.42 is more expensive than Google and Google growth rate is higher than of Yahoo!.
Motorola (MOT) is holding its ground nicely. Thanks to Carl Icahn. His interest in the company has kept this stock afloat in a really bad market. Trading at $18.64 per share, MOT is also starting to look attractive. If MOT is able to remain it current level next week, we would be inclined to believe the stock has hit bottom and found its support level. We expect Icahn to force MOT to buy back more shares any day now.
Costco (COST) is one stock we would love to own. COST closed today at $55.75 per share. We believed if the economy does turn for the worse, COST is one of the companies that stand to profit. If you need any evidence, just visit your local Costco store. The store is always packed with shoppers. We are hoping to buy this stock at $50 per share.
American Express (AXP) is another stock we are watching very closely. It is down about 3 points this week. AXP closed today at $55.44 per share. Similar to Costco, our hope is to buy this stock at $50 per share. AXP has been aggressively going after the small business market in the last couple years with great success. The company’s insurance business continues to perform well. AXP is more than a credit card company, thus we believed AXP should hold up well in a bad economy.
