Navellier's Top Five
08/29/2003 12:00 am EST
Each month, Louis Navellier assesses the buy-rated stocks at the Blue Chip Growth Letter and comes up with an exclusive list of the Top Five Buys. Although a wide variety of proprietary factors are considered in developing this list, one common characteristic is strong recent and expected growth. Here are his "Top Five" for September:
"The market has been quiet, but after Labor Day, volume will build and get stronger, and I think our stocks will do really well. Wall Street's latest obsession seems to be sales growth, and given that our stocks have real sales growth, I think we're in good shape. Meanwhile, h ere are our top five current buys.1. Next year, I estimate that Amazon.com (AMZN NASDAQ) will generate sales of approximately $6 billion. That's about twice the business it did in 2001, and 10 times the business it did in 1998. Amazon has not only one of the best brand names on the Internet, but one of the best in business, period. It's a great time to buy this stock as it has been improving in recent trading days. Amazon has posted over 25% sales growth and over 73% earnings growth in the past four quarters. So the Internet is for real right now. Broadband is expanding rapidly and Amazon has real sales growth. It's under a lot of institutional accumulation. Amazon is a powerful stock. Buy below $46.
2. We continue to see great news from Boston Scientific (BSX NYSE). The company announced that it will s plit its stock 2-for-1 later this year. This is only the company's second stock split since it went public 11 years ago. They'll get approved for coated stents to compete with Johnson & Johnson. Boston Scientific is a good example of how some stocks tend to 'zig' while other stocks 'zag.' The stock has gotten a little bit more volatile as it climbed higher, but it's a very, very good buy. BSX fell sharply in July, but rallied last month as other stocks pulled back. Boston Scientific is a Buy up to $70.
3. eBay (EBAY NASDAQ) split its stock 2-for-1 as of the end of August. We'll get twice the number of shares, and the share price will fall in half. The shares pulled back last month, and I think it offers us a great value now. EBAY has been basing and is a phenomenal buy right now. If you haven't bought it, please buy it now. It's a great stock. Overall, the Internet is also behind some of the recent productivity gains for the US economy. As a result, the Internet is maturing, and some of its leading stocks have become legitimate blue-chip companies. The increasing use of broadband and more shopping on the Internet are the primary reasons that eBay--as well as Amazon--is on the buy list. We recommend purchase up to $112 ($56 after the split).
4. After reporting terrific results for the second quarter, Nextel Communications (NXTL NASDAQ) has also pulled back some. The company earned 27 cents a share, three cents more than analysts' estimates. The same day of the earnings report, the stock hit a 52-week high. Nextel also raised guidance dramatically higher for this year. Analysts expect the company to earn $1.41 a share next year. This means that the stock is trading for less than 13 times next year's earnings. The stockis in the aggressive camp, but is very strong and has pulled back and is basing. I think it's a phenomenal buy now. It has incredible cash flow. Buy below $21.
5. Paccar (PCAR NASDAQ) has been strong and steady. I'm incredibly impressed with it. The truck maker reported earnings of $1.06 a share, beating Wall Street forecasts by nine cents. This is a great stock to own as the economy emerges from a recession. Paccar's stock more than doubled from 1991-1993. Buy up to $92.
" There's no doubt that the stocks on our Top Five list are much spicier and more volatile than they were several months ago. I must caution you to buy more than just these Top Five stocks, because, as a group, they could easily move up or down over 20% a month. Looking ahead, I wouldn't be surprised if new money continues to pour into the stock market for at least the next three years. Overall, there are simply too many good things now occurring that will continue to boost stock prices for the foreseeable future.