Stocks to buy: Analysts usually have more professional skills and knowledge in stock picking, but not every stock suggested by analysts is worthy of adding to your portfolio. Before initiating positions in stocks with high recommendation, you’d better do some work yourself to check this stocks whether qualify the title “stocks to buy.”
Although the stock has seen a year-to-date loss of more than 12%, shares of Chiquita Brands International, Inc. (CQB) was upgraded by analysts at BB&T Capital Markets from a “Hold” rating to a “Buy” rating with a $9 target price. After the upgrade, CQB stock price surged more than 13% Wednesday. The current CQB stock price is 58.66% higher than the 52-week low of $4.62 and 30.65% below the 52-week high of $10.57; and above the 50-day SMA of $5.73 and 200-day of SMA of $7.26.
From some other key metrics of CQB stock, we are mistrustful about BB&T Capital Markets’ action to pick this stock as one of the stocks to buy. The company has posted earnings below analysts estimates for the second consecutive quarters, with surprises of -87.50% and -25.00% for the first two quarters of 2012, respectively. Analysts estimate the company would post net losses of $0.28, $0.18 and $0.15, for the current quarter, the fourth quarter and full year 2012. It seems the company will not achieve profitability in a short term, so, you will take the advice of the analysts at BB&T Capital Markets?
Chiquita Brands Internationa is an international marketer and distributor of bananas and other fresh products.
BB&T Capital Markets also lifted stock of Fresh Del Monte Produce Inc. (FDP), which is also a marketer and distributor of fruit and vegetables, from a “Hold” rating to a “Buy” rating with a $30 target price. After the upgrade, FDP stock price also spiked up 5.70% to $25.40, very close its 52-week high of $26.94 and 16.51% above its 52-week low of $21.80. The current stock price is also above the 50-day and 200-day SMAs, which are standing at $24.39 and $23.9, respectively. From the perspective of financials, the company is much healthier than Chiquita Brands International, Inc. After reporting a -200% earnings surprise for the fourth quarter of 2011, the company has reported two positive earnings surprises for the first two quarters of 2012, which were 31.70% and 8.80%, respectively. Analysts estimate Fresh Del Monte Produce would post earnings of $0.31 per share, $0.02 per share and $2.40 per share for the current quarter, the fourth quarter and the full year 2012, these figures are all higher than last year same period’s actual numbers.
FDP stock is priced relatively as a bargain at a trailing P/E ratio of 12.18 by comparison to the peer group average of 19.91. The stock is traded cheaply at a P/S ratio of 0.41 versus peer group average of 0.48; at a P/B ratio of 0.77, versus the peer group average of 1.29; at a Price/Cash Flow ratio of 7.1, versus the peer group average of 9.7.
In addition, FDP stock price has risen 1.56% year to date, coupled with its 1.57% dividend, making it more qualify the title of one of the stocks to buy.
As we said in the beginning of this article, stock picking is not an easy thing, following others’ suggestion sometimes makes sense. But, you should always do your homework before taking money out of your pocket.