Friday, March 27, 2015

American Tower Corp. (NYSE: AMT), The J.M. Smucker Co. (NYSE: SJM): 1 Blue-Chip Stock To Sell, 1 To Buy

Even blue-chip stocks can be bad investments.

Take American Tower Corp. (NYSE: AMT) as an example. It is the world's largest independent operator of wireless and broadcast communication sites, and is looking at an onerous, possibly unmanageable debt load.

The company may seem bulletproof, operating roughly 70,000 wireless cell tower sites across the globe.

Financial results have been superb, with revenues more than doubling since 2009 to $4.1 billion. The firm's stock delivered a market-trouncing 17% rate of return during the past five years. (more)
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CarMax, Inc (NYSE: KMX)

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. It operates in two segments, CarMax Sales Operations and CarMax Auto Finance. It sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions, as well as sells new vehicles under franchise agreements. The company also provides customers financing alternatives through its finance operation, CarMax Auto Finance, as well as through its third-party financing providers. In addition, it offers a range of other related products and services, including the appraisal and purchase of vehicles directly from consumers; sale of extended service plans and guaranteed asset protection services; and vehicle repair services.
Take a look at the 1-year chart of CarMax (NYSE: KMX) below with added notations:
1-year chart of CarMax (NYSE: KMX)
After bolting higher from mid-October until the end of December, KMX has been trading sideways over the last 3 months. During the sideways move the stock has formed a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
KMX’s rectangle pattern has formed a resistance at $68 (red) and a $62 support (blue). At some point the stock will have to break one of the two levels.

The Tale of the Tape: KMX is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $62 or on a breakout above $68. The ideal short opportunity would be on a break below $62.
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Oil up after Saudi air strikes in Yemen; dollar limits gains

Oil prices rallied for a second straight day on Thursday after Saudi Arabia and its Gulf Arab allies began air strikes in Yemen, sparking fears of a bigger Middle East battle that could disrupt world crude supplies.
The military operation against Houthi rebels, who have driven the president from Yemen's capital Sanaa, has not affected oil facilities of major Gulf producers.
But fears the conflict could spread has stoked concerns about Middle East oil shipments.Saudi rival Iran, which backs the Houthi rebels, denounced the air strikes. Russian President Vladimir Putin, in a phone conversation with his Iranian counterpart, called for an "immediate ceasefire." Pakistan, a Riyadh ally far away from the conflict, promised a "strong response" to any threat to Saudi integrity. (more)

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David Gurwitz Best Bets: Food, Wheat and Water March 24, 2015

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