Stocks to Consider Buying at Right Time

 | Aug 19, 2013 | 10:00 AM EDT
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Since the U.S. stock market peaked on Aug. 2, only 10 stocks have managed to rise as much as 5%. Here's my opinion on each. Several of them look good, but I wouldn't buy yet.

I would try to wait until the current downturn has run its course. Through Friday, the decline in the Standard & Poor's 500 Index has been about 3%. I think it will be close to 10% by the time it's done, perhaps around early October.

Newmont Mining (NEM) has risen 12% from Aug. 2 through Aug. 16.  As I wrote last week, I think this gold miner is a buy at $26, about six dollars below the current price.

Cliffs Natural Resources (CLF) is up 11% since the Aug. 2 peak. The iron ore producer is losing money this year (partly because China has reduced imports) but is expected to be profitable in 2014. The stock sells for less than book value and I like it.

Harman International Industries (HAR), up 11% is a leading maker of sound systems for cars. I think the auto industry is a good bet now, but Harman's too expensive for me at 24 x earnings.

Tyson Foods (TSN), up 10%) looks fine to me at 13 x earnings and 0.3 x sales. I like the way it finds new, convenient ways to package its chicken, beef and pork products.

Apple (AAPL), up 9%, may benefit from the attentions of financier Carl Icahn, who is pressing for a higher dividend. I like the stock at $500 but I liked it more in April around $400.

Peabody Energy (BTU), up 8%, is a rank speculation, as are all coal producers now. After falling 48% in 2011, 19% in 2012 and 34% this year, I believe it is ripe for at least a trading rebound. Among the reasons it's risky: Debt is greater than stockholders' equity.

Freeport-McMoRan Copper & Gold (FCX), up 8%, has suffered with other materials stocks as China has slowed.  For this stock, the ideal climate features growth in the U.S. and China, plus a whiff of inflation. I think it's good in the long run; I'm not sure about the short run.

US Steel (X), up 8%, had gotten its balance sheet into good shape a few years ago, but debt is now heavy again. It has posted losses three quarters in a row, but analysts look for a return to profits in 2014. I don't hate it, but I think there are better choices.

Safeway (SWY), up 5%, is having a tough year, and I think analysts may be a bit too quick in assuming a bounce-back for the grocery chain next year. Here again, I think there are better buys.

Finally, Netflix (NFLX), up 5%, has achieved tremendous revenue growth, and -- after a bad 2012 --  has a nice earnings rebound going. But with the stock a crowd favorite and selling at 192 times earnings, I wouldn't touch this stock with a ten-foot pole.



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