10 Stocks to Buy in May and Go Away
Investor takeaway: Its shares are down 7% this year, but have a three-year, average annual return of 10%.
Morningstar analysts say: "For a phone company, it has a great balance sheet, with a net cash position," which means low debt. "This is almost unheard of for a large phone company." Morningstar fair value: $30, a 75% premium to the current price.
Company profile: Supervalu, with a market value of $1.3 billion, is one of the nation's largest food wholesalers and retailers.
Dividend Yield: 5.7%
Investor takeaway: Its shares are down 23% this year and have a three-year, average annual decline of 22%. Analysts give its shares two "buy" ratings, one "buy/hold," 13 "holds," and three "sells," according to a survey of analysts by S&P. Those same analysts estimate it will earn $1.31 per share in its current fiscal year and that that will grow by 5% to $1.37 the following year.
S&P, which has it rated "hold," says "the company will experience same-store sales growth below its closest peers in fiscal 2013, despite what we consider its strong regional market share positions. We remain cautious on the shares, with sales pressures intensifying."
Morningstar fair value: $12, a 101% premium to the current price.
3. France Telecom(FTE)
Company profile: France Telecom, with a market value of $37 billion, is France's national phone company, which accounts for about half its revenue, split among wireless (46%), fixed line (33%) and other carrier services. It also has international businesses.
Dividend Yield: 12.82%
Investor takeaway: Its shares are down 11% this year and have a three-year, average annual decline of 4.8%. Analysts give its shares one "buy" ratings, one "buy/hold," two "holds," and one "sell," according to a survey of analysts by S&P.
S&P has it rated "buy," with a $19 price target, a 36% premium to the current price. Morningstar fair value: $28, a 102% premium.
Company profile: Alumina, with a market value of $3 billion, owns a 40% stake in Alcoa World Alumina and Chemicals, or AWAC, the world's largest alumina producer. Alcoa(AA) owns the 60% balance. AWAC is involved in bauxite mining and alumina refining.
Dividend Yield: 4.91%