"Lock and Load Time"

10/28/2005 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

With the top 20-year performance record among newsletters, all investors should be comforted when Louis Navellier says, "In my 25 years in this business, these are the best growth to p/e ratios I've ever seen." Here's his latest outlook and top picks.

"One of the fascinating things that has happened in the market is that prices haven't gone up as much as earnings have gone up, so p/e ratios keep falling. In the 25 years that I have been doing this, we are at the best growth to p/e ratios I have ever seen. In Emerging Growth , I have no problem finding stocks with 40% sales growth and 80% earnings growth that are trading at 15 times this year's estimated earnings. That's ridiculous and I don't think I will ever see this again in my lifetime.

"The Fed is going to clearly raise rates in November and December, and maybe in January. But by the time Greenspan has his retirement party in late January, I think it will be known that the Fed is done raising rates and I think we will get a much more euphoric market. So I feel very, very good about the market right now. This is going to be the 14th quarter in a row for the S&P 500 of having double-digit earnings growth. And even better, these earnings are reaccelerating from where they were in the second quarter. I think it is absolutely wonderful. This is what I call 'lock and load' time.

"In our Blue Chip Letter, one of the best conservative stocks would be TXU Corp. (TXU NYSE). It is a utility that sells a lot of independent power at whatever price the market will bear. If it's a cold winter, they will do very well. Meanwhile, the stock has a nice dividend yield. Our best natural gas play is Encana (ECA NYSE), which is up in Canada. One of our favorite coal stocks is Peabody Energy (BTU NYSE), which is the Saudi Arabia of coal. Another great stock is Autodesk (ADSK NASDAQ), a great software play. This is a great tech stock.

"In our Emerging Growth newsletter, we look for more aggressive stocks. We like Quality Systems (QSII NASDAQ), which is a company that makes software for hospitals. They are looking really, really good right now. Our favorite coal stock for more aggressive investors is Consol Energy (CNX NYSE), which makes clean coal. Our favorite aggressive natural gas stock is Southwestern Energy (SWN NYSE). Southwestern is an incredible buy. Natural gas prices have fallen, but the bottom line is that the natural gas stocks are going to make a ton of money. The stocks haven't gone up as much as natural gas prices have, so they're going to do a lot better as their costs are fixed.

"In our newest newsletter, Global Growth, one of our favorite stocks is Sociedad Quimica y Minera de Chile S.A. (SQM NYSE). The company is a Chilean-based fertilizer and mining conglomerate, specializing in the production of the popular, new long-lasting lithium batteries. SQM expects sales to top $900 million in 2005 and $1 billion next year. That is clearly one of my favorites."

Related Articles on

Keyword Image
How to Play Preferreds
8 hours ago

Preferred shares are one pocket of the fixed income market where investors can still typically find ...