3 Stocks to Buy: BP plc (BP), Telefonica S.A. (TEF), AK Steel Holding Corporation (AKS)

Page 1 of 2

The year started wonderfully well for the average investor in the US equity markets. The S&P 500 is up by over 5% since the start of 2013 and now it stands at around the 1,500 level. Lately, I have been talking with many money managers and a number of them are afraid the market may suffer a strong correction at some point in between the first and the second quarter of the current year. I hate trying to make predictions but I can only say that, even though the market has gone up strongly and despite those correction warnings, I have recently made three equity bets.

BP plc (ADR) (NYSE:BP)

BP plc (ADR) (NYSE:BP)

I have talked a lot about the company and I finally decided to make an investment in it. I bought it at around $43 and I sold Feb calls with a $45 strike. I think the stock has tremendous upside potential and this upside shall materialize whenever the Macondo spill trial sees an end. My long term target for the stock is at $60. BP plc (ADR) (NYSE:BP) trades at a 20% discount to US peers and its 2013 8.2x P/E and 5.1x EV/EBITDA are extremely compelling. This, plus its growing (at a +12% year over year rate) 4.8% cash dividend yield were reasons enough take a long position in the company. I like recovery stories whenever they happen to be a in a cash rich sustainable industry. By now, the market is giving me some credit: BP is up by 6% since the beginning of the year.

Telefonica S.A. (ADR) (NYSE:TEF)

The dividend for this company has been cut to 0% and earnings per share are expected to fall again in 2013 from just over 1 euro in 2012 to 90 cents. That said, Latin American fundamentals are strong and the management is taking the right approach to TEF´s high leverage and competitive problems in Europe. I have been watching the stock for over two years and I have just decided to go long. I bought TEF at $14.50 and I plan to hold it for the long term. The company currently trades at 2013 12x P/E and 5x EV/EBITDA with its net debt standing at 2.7x EBITDA. I expect debt to be reduced to 2x by the end of 2015 and the company to resume its dividend by the end of 2014.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!