Resource stocks continue to underperform. Freeport-McMoran (FCX) earned just $0.09 a share, or $140 million, compared to 41.04B, or $0.71 a share last year. It expects lower copper and gold sales this year. With trade wars and slower global economies, look for FCX stock to trade below the $10 level and at the $7.50 - $8.50 levels next.
Consumer goods giant Colgate-Palmolive Company (CL) raised price in Q4, lifting sales by 2%. Higher raw materials cost weighed on gross profit margin, which fell 1% to 59.4%. With net sales flat to up in the low single digits, shares could re-test the $58 bottom. Shares are expensive with a ~23x P/E and the dividend is too low at 2.7%.
In the technology sector, Western Digital (WDC) rallied to $43 last week when it forecast Q3 revenue of $3.6B - $3.8B. EPS will come in at $0.40 - $0.60. Gross margin are healthy next quarter at 28%. Shares are very inexpensive and the dividend yield, even after the stock’s rebound, is attractive.
IBM (IBM) surprised investors with decent Q4 results. Revenue fell 3.5% Y/Y but exceeded estimates. The company is worth $200 a share, despite rising 10% last week, if it reports earnings beats again for two more quarters.
