Shares of NXP Semiconductors (NXPI) were rising Tuesday afternoon, one day after credit ratings firm Moody's rated the company's 2022 Senior Notes at Ba1 while upgrading its existing senior unsecured notes to Ba1 from Ba2.
Action Alerts PLUS co-managers Jim Cramer and Jack Mohr remain bullish on the company in spite of macro headwinds that have hampered its rivals, thanks in part to its management team.
"We also had the opportunity to speak with CEO Rick Clemmer last week, in a conversation that validated our conviction in management and its ability to create long-term, sustainable shareholder value," Cramer and Mohr wrote. "To execute on his vision, Clemmer explained that NXP intended to leverage existing category leadership in (then-nascent) areas of security, mobility and digital processing, and focus investments in significant, fast-growing long-term opportunities: specifically connectivity, security and networking."
The company is trading at 12x next year's earnings, well below its peers' multiples, and the AAP team remains extremely bullish on the stock's performance.
"It is an investment in a company that delivers near-term, medium-term and long-term, doing so by investing with the mindset of a chess grandmaster and not strapping itself to the price competition inherent to a cyclical industry, one that has seen its titans devolve into lumbering, antiquated, slow-growth entities," Cramer and Mohr concluded.
Dividend Stock Advisor manager David Peltier reminded readers that he will be qualifying two dividends for the portfolio.
"First, Sonoco Products (SON) investors at the close of today's trading will qualify for the latest quarterly dividend of $0.37 a share (2.9% yield), to be paid on Sept. 9. In addition, Southern (SO) holders at the close of trading on Wednesday will qualify for the next quarterly dividend of $0.56 a share (4.25% yield), to be paid on Sept. 6," Peltier wrote.
Peltier noted that both companies have posted double-digit returns year to date. "Even so, we maintain that Sonoco and Southern remain core dividend-paying holdings for the model portfolio," Peltier concluded.
Finally, Peltier sold his remaining position in Cott (COT) for the Stocks Under $10 portfolio. Peltier sold the remaining 150 shares at around $17.02 per share. The stock has risen 18% over the past four trading sessions since the company reported its latest earnings results on Thursday.