After the recent market sell-off, this contributor is wading back in, with buy recommendations on a global appliance maker who sees increased demand in China and Europe and an online travel operator whose shares have recently become undervalued.
Whirlpool (WHR) and Priceline (PCLN)
from US Investment Report
Whirlpool (WHR), a new selection last issue based on its 23.4% a year expected earnings growth and its low P/E ratio of 11 times estimated 2015 earnings. We added WHR at 152 three weeks ago, with a goal price of 180. Now it has dropped to 140.63, down 7.5%. Yet analysts still foresee the same rapid earnings growth, and the P/E is down from 11 to 10. Their consensus price target is 179.
But from today’s price of 140.63 the 20% goal price is 169, ten points lower than the analysts’ target. Nothing fundamental has changed for Whirlpool. So you can buy it for much less now. And if the analysts are right, WHR can rise by about 30%. As a stable, consumer products leader, it may offer some attractions for your own watch list.
The analysts are more bullish on Priceline (PCLN). They call it a Strong Buy (Buy+ in our ratings) and see it shooting to 1504 from today’s 1064 for a gain of over 40%. We’re long-term bullish on PCLN with its 20% a year earnings growth and a 16 P/E, which produces an attractive PEG ratio of 0.80, well under the 1.00 ideal PEG.
The red flag here is that PCLN has dropped from an August high of 1370, a decline of 22% in just over two months. Yet 23 of 26 analysts rate the stock as a Buy or Strong Buy, and the other three call it a Hold. None say sell.
Stephen Quickel, U.S. Investment Report, www.usinvestmentreport.com, 215-862-0399, October 17 and 24, 2014