Jeff Reeves, editor of Investor Place, discussed his five stock picks for Q4.
1. Groupon (GRPN) is a stock Reeves owns. It tumbled over the summer, but is now in the $6 range. Reeves likes the fact it is flush with cash, which comprises around 20% of its market cap, and has no debt. The company has consistently beat earnings estimates. Reeves would buy it under $7 and sell it at $8.50 for a trade.
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2. Teva (TEVA) has a profitable business model of duplicating drugs when the go off patent. It has a low beta of 0.6% and yields 2.6%, which has tripled in the past 6 years. The company is looking at acquisitions in emerging markets and trades at a low multiple of 11.
3. Cisco (CSCO) has been a troubled company the past few years, but may be ready for a comeback with its recent earnings beat. The company yields 3.1%, has $52 billion in cash, has been streamlining operations and expects an uptick in IT spending by companies between 2014 and 2015.
4. Under Armour (UA) has seen an incredible run, up 60% year to date and 200% since last year. However, UA’s $15 billion valuation still seems small compared to Nike’s (NKE) $68 billion figure. UA might have risen already, but it has a long runway of growth ahead. Its revenue growth forecast is at 28-29% up from 24-25%.
5. Google (GOOG) has been in decline this year but is actually up 12% since May. It has had to reinvent itself with the slowdown in Google ads, but is Android dominates smartphones and its Google Glass and other innovations are paying off. Backing out the $62.1 billion in cash, Google trades at a low multiple of 12.