Here is the last installment of stock picking week. It was so much fun that we will have to do it again in the near future.
Bull Pick – CSX Corp. (CSX)
This “old” and “stodgy” railroad company is hitting on all cylinders and is providing exciting returns for investors. The stock is a whisker off of a new 52-week high and with good reason. CSX reported third-quarter earnings of $1.08 per share, beating the estimate by four cents. Sales also surpassed expectations and rose a healthy 16% over last year. That is no small feat for a mature company in an economically sensitive industry.
The good news kept on flowing from the report. It said that it will increase capital expenditures by $100 million and it will buy back $646 million of its stock by the end of the first quarter. These are moves that are only made by confident management teams. The stock is already up over 20% year-to-date, but has more upside.
Analysts have been ratcheting up their earnings estimates of late. Just over the past week, this year’s estimates have increased 13 cents to $4.02 per share. Next year’s numbers have risen 16 cents to $4.65 per share. The stock is reasonably valued at 13x next year’s estimates. I think that given the solid momentum in its business, the stock should hit $70-$75 per share over the next year.
Bear Pick – Immucor (BLUD)
The company wins the award for one of the best ticker symbols, but not for the best stock. BLUD fell almost 20% on huge volume after the company lowered its fiscal 2011 outlook and said it will miss revenue projections by about 10%. Earnings are also forecasted to be short by a similar amount.
For those that don’t know, the company is an in vitro diagnostics firm that does blood testing as well, hence the ticker symbol. It has solid financials with high operating and profit margins, but the latest quarter has put investors on the defensive. It takes time to regain investors’ trust after lowering guidance. I don’t think that this will be a good stock to own for quite a while.
CEO Gioacchino De Chirico commented that weakness in industry demand, especially in the United States hurt Immucor’s reagent business and its instrument orders. These words don’t exactly inspire confidence in the future. Evidently analysts agree as all eight covering analysts lowered their estimates, which stand at $1.13, down from $1.27 a month ago. I would expect the 52-week low of $15.01 will be tested from its current level of $17.21 shortly.
Let’s Pick Some Stocks – Day 4 is an article from: 
