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Stock Talk - Jeff Reeves, InvestorPlace.com

Mar 30, 2012|

Jeff Reeves from InvestorPlace.com discusses Southwest and Goodyear.

Transcript - will not be 100% accurate

Just reminded that it's not actually the last day of the month to. It is really yeah perpetrating this Sunday night but did they -- the it's the last trading day of them. And it looks like stocks are so awful that we who we had a little rally going on but now. I see the Dow's only up what nine points yeah and the NASDAQ is down fourteen points of the S&P is down one of the tenure is flat both gold and oil up. So. It's going to be changed. It up you know are now. Guest is Jeff Reeves he's an editor -- investor placed dot com talked about a couple stocks with Jeff. He'll be Chiming in -- stocks are going to be studying today in this accession Goodyear in southwest but before we do that. I got a couple text and I wanna get through 33 nights has just got aghast by the app thumbs up although high prices have me depressed. And then. Finally asks this question. Barry went collecting a Massachusetts pension you don't pace state income tax that's correct you know budget if you collected -- senior -- by humans -- You use Brothers are yet he still is that my dad's a retired police officer -- so well if he lives in Massachusetts he -- have to pay state income tax. A move back heat up in doing it actually did it pay up there have. But if he moved to New York right if he moved laterally. In New York. These guys -- if he moved to New York he'd have to pay state income tax and masters. So I'll bet you there's not a lot of guys movement from Massachusetts. -- stay right here. Our next guest Geoff Reeves from investor placed dot com Jeff how you doing today. Good let's talk about couple stocks like Goodyear trading at about eleven dollars and fifteen cents at the when you want it right not to address trade. Now and a great big area having a lot of people I mean by my biggest concern right now that I think you know it's great it's market rallying around a little concerned that it might be -- -- expanded I'm a little concerned about Monica -- there. You know particularly ties -- that topic -- setting new record prices down on did you think it's a good value investment for people who kind of your little bit leery of buying stock at the top so on admittedly Goodyear has its troubles. Yup on the has been restructuring for very long time but. There's a lot of really good strength in the auto industry. Believe it or not -- -- actually auto exports and imports hit he -- in the fourth quarter of 2011. I'm I'm so the auto industry is kind of recovering the units sold off remarkably. I think it's not a surprise to anybody it's. And I think -- in organic recovery and autos and it's you know overall restructuring that's been gone out of business over the past couple years and can yield on more -- turned -- get a little bit riskier. Because you are kind of economic turnaround to -- about it. You'll want them and that's I think it might be good -- But they're still making money they're still earnings per share dollar 27 per share. Their price to earnings ratios really low only eight to one on the PEY solo. Well I mean you know -- one of these companies that kind of -- -- -- -- -- -- has been mismanaged over the years it's kind of been a perpetual restructuring for a decade and you know the recession hit that it is very bad time I think a lot of people concerned. Generally speaking whether or not consumer spending is gonna turn up again and there's -- oil prices in the the robbers petroleum products you can understand some of the negativity out there between -- the -- -- profitable it's PE -- very attractive about content so if you are you know kind of investor looking for a long term play here. Autos we're gonna keep going up to the economy recovers maybe 23 years on the road. I think it's unreasonable to expect good -- about eleven dollars -- now I think it could get 1580 and twenty bucks. But again you've got to try to be patient with this stock is gonna be some short term volatility could have a lot of reasons you know like people they didn't you know on the stocks. -- the next one you're talking to us about is Southwest Airlines now I know. That a lot of investors won't touch the airline stocks due to the volatility in this. They the nature of that business why do you like Southwest Airlines symbol for the stock folks is they'll use the. Yeah and it to declare you're completely right I mean many many people think -- airline stocks are nothing more than a day trade because. You know the industries that are highly regulated stopped it profitable -- -- really hurt margins until there's incredible volatility in the industry are and so -- I don't think Papa has that much of a long term plan I think it -- -- and you've -- -- that the airlines sought for years it's time it is the world at -- but I do think that you know some of the -- that we've seen a couple of -- Over the past couple months. It it's pretty remarkable results public is not about 6%. And the last year and outlets regularly ranked at the top of customer satisfaction surveys. Yet people about the cases that they despise it's always you know the Delta's of the World Cup -- -- outlet is actually fairly well liked because they don't catch people cookies. Also more probable that some of their peers until amongst all the airlines -- -- is probably the bats well and on -- against. There's a lot of reasons to negative view high oil prices get into the pockets and we're standing by it he I think a couple of I'm gonna kind of lead the airline industry back to that come back later this year. But you know as it -- a year. Disagree that hasn't stopped for people were kind of looking for some bottom fishing right now to have it it's your momentum investors if you like go to believe it's rally. Mean there's plenty of options out there that -- to damn my. Got a couple of these guys who may have been overlooked by other pastors people who don't wanna buy it popped up a company like well well I mean it's it's not. It's maybe 20% 10% off its -- to -- because it's not. It is exact bottom but you know it's it's that we got upside from here for about. Well anything can even just get back to its 52 week high you would make four dollars a share. Exactly exactly -- it almost touched fifty bucks back to twenty -- on that was when people like. As concerned about double that there was geopolitical Grasso and all this nonsense about. Fear but fear being so it's so close that lot of people's minds it's so again there are macro concerns -- I I I know that that whole wall of worry contact lenders and investors there are convinced that the fact that there are. Negative factors out there but the market to rallying it's just I'm gonna keep going but. You know I'm a little more on the conservative side I'd prefer to try to. Not via pop and some of these companies it is especially intact it's a little bit -- -- -- apple is great but there's some companies I think that adjustment until we get -- -- collapsed. I'm still affect the rotation happens and believe me it's gonna happen. On you made the YouTube may be better serve and kind of avoiding on the hot sector and maybe pick up in the people haven't turned on T yet. -- -- what do you make up the earnings season coming up are you concerned at all that we're gonna have I gave it some of these companies are gonna miss and we can have a correction. In the month of April did your -- and you know missed corporate earnings. I'm I'm not as concerned I mean that to be completely out of it if you look back historically I think it's something like since 1990 that in the majority of I think -- stopped. Have all the expectations I mean it's kind of -- rigged game they had probable ours did well you can get that over her for corporations I don't think that. The analysts are exactly being very discerning. Are the two that I want and what I didn't guard Missouri company 50% or more about a key components -- -- -- they're fortunate since 1997. While I'm not a concern about the same expectations that come around what I am concerned about. It that. Stock buyback that kind of rolled back and I think -- a big reason that urgency that you choose the actually it's because across 2009 and twenty other companies do big buyback. I mean the EPS calculation -- need to take it down on the shares outstanding actually the earnings rise and it buybacks kinda draw down here we're kind of looking more towards growth instead of just cutting in getting profitability way. I think we're really -- -- -- divergence problem between companies that are truly going to be excited -- companies just these these competitions he's done some buybacks -- and are not as bad as they want world by. Yeah -- about to start to be optimistic about the future they're not gonna battle for for profits that comparable type of tactics there was going to be looking for growth so. That's what I'm looking at it both top line and bottom line growth. On on and I think that discerning investors may. You know how to how to -- build it because I think it's going to be a lot a little more difficult to pick stocks going forward -- -- -- -- -- more sophistication numbers. Are -- sure appreciate your time and we'll have you back real soon Jeff thanks for your time. Yep okay that's Jeffries from investor placed dot com joining us on the financial exchange.