General Electric Company (NYSE:GE) was one of three lagging companies to receive the recommendation of John Buckingham, portfolio manager of the Al Frank Fund, in an interview with TheStreet yesterday. Buckingham believes the three companies are all approaching turning points, and now is the time to make a move on the stocks while they are value picks.
“[…] General Electric Company (NYSE:GE) is a company that still managed to grow earnings over the last few years in a lousy global economic environment. We think as the economy ultimately improves, which it will, believe me it will, that General Electric Company (NYSE:GE) will be a company that re-accelerates its growth going forward, but more importantly today, like a farmer planting a seed, you’re able to buy a quality company at a reasonable price, below market multiple, with a very generous dividend yield, 3.4%,” Buckingham said.
In the case of Coach Inc (NYSE:COH), whose stock is down 30% this year, Buckingham believes Coach Inc (NYSE:COH)’s appointment of a new creative director and move into apparel, which has been receiving some positive critical reviews from the fashion press, along with a nearly 4% dividend yield, make Coach Inc (NYSE:COH) a good value play.
Finally, Buckingham sees a rebound in the future for Deere & Company (NYSE:DE), which is coming off a disappointing third quarter in which earnings fell, though they fell from a record year in 2013. As Buckingham says, the farming business is cyclical, and sales of their tractors are likely to rebound. Deere & Company (NYSE:DE) is also very profitable still, and Buckingham mentions that trough earnings for the company might be in the $7 per share range.
As a dash of cold water on Buckingham’s Deere bet, Barron’s yesterday offered their own analysis of the company and were not as optimistic. They believe the company is still over-valued, and cited a JPMorgan report from yesterday cautioning that Deere & Company (NYSE:DE)’s sales may not bottom out for another two years, with earnings per share to tumble 8% this year, and 17% next. Deere & Company (NYSE:DE) would be trading at a high 13.1 times projected 2016 earnings based on their current stock price and 2016 sales estimates.