Ron Gutfleish’s Top Stock Picks Include Lockheed Martin Corporation (LMT)

Marketing and packaging company RR Donnelley & Sons Co (NYSE:RRD) was another of Elm Ridge’s top picks. The stock has paid quarterly dividends of 26 cents per share for roughly the last ten years, and at current prices that results in an annual yield of over 7%. However, recent reports have shown that lower margins are pulling down RR Donnelley & Sons Co (NYSE:RRD)’s earnings. Still, even if the company reduces its dividend somewhat it might still be a high yielder and at least going by analyst expectations the stock is decently priced with a forward P/E of 9.

Gutfleish and his team reduced their holdings of Boston Scientific Corporation (NYSE:BSX) during Q1, but still owned 4.9 million shares of the medical device company according to the 13F. Boston Scientific Corporation (NYSE:BSX) has been struggling recently, with revenue declining 6% in the first quarter of 2013 versus a year earlier and even adjusted trailing earnings numbers being relatively low compared to the company’s valuation. With the stock valued at 20 times consensus earnings for 2014 we would avoid it, even as an optimistic market has sent the stock price up over 60% in the last year.

In addition to Boston Scientific we’d also avoid MBIA, though we’d be interested in looking into why that company’s valuation diverges so strongly from that of Assured Guaranty. Income investors might be interested in taking a look at Lockheed Martin Corporation (NYSE:LMT) or R.R. Donnelley, though we’d warn that the former could see some short-term adjustments due to spending cuts and that the latter is a somewhat risky income stock as its dividend may be cut if weak performance continues.

Disclosure: I own no shares of any stocks mentioned in this article.