P&G (PG) has failed to keep up with Wall Street’s earnings forecasts for four straight quarters and it’s pushed the stock down over 18% this year. James Abate, Chief Investment Officer for Centre Funds, expects that streak to end when the company reports its first quarter results next week. 'We’ve seen some of the cost restructuring efforts that they have taken, namely to improve margins and, more importantly, increase asset efficiency and inventory turnover has started to boost return on assets and return on capital for the company,' said Abate. Abate is also recommending General Mills (GIS), which has seen its shares rise more than 6% year-to-date. He said he likes the company’s innovation and its efforts to improve its profitability. 'Here is a company that has defensive characteristics, improving margins in an overall market where margin improvement is a very scarce commodity,' said Abate. 'And its trading at 19 times earnings with a 3% dividend yield, so that’s a name we are very bullish on.'
More from Video
Amid the Selling, Here's the Big Question Now
How quickly do we find support, is what we'll want to know now, as the correction is occurring while economic optimism builds.
One Tweet Pulls the Rug Out From Under the Indexes
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
A Technical Look at the New Dow Jones Industrial Average
Salesforce, Amgen and Honeywell will give a lift to the DJIA going forward.
Conagra Brands Looks Tastier After Its Upgrade to Buy
CAG has hung onto the bulk of its recent gains, and could rise to the $50 area, according to the charts and indicators.
Biogen Bulls Get a Lift From Quant Upgrade and Strengthening Charts
Breaking down an approach to the long side of this biotech stock.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.