Fasciocco's Favorite: Pick Packard
01/10/2003 12:00 am EST
Leo Fasciocco is editor of the online service, Ticker Tape Digest . His technical expertise focuses on isolating stocks that are breaking out of significant price consolidations and showing major accumulation. (He also suggests short sales, when he sees technical breakdowns and distribution.) For his top pick, the advisor selects Hewlett-Packard.
"Hewlett-Packard (HPQ NYSE) will do very well in 2003 because of accelerating quarterly earnings growth, in part reflecting the cost benefits from its acquisition of Compaq Computer. Accelerating earnings growth historically has been a key driver in sending a stock's price higher. Hewlett-Packard is a blue chip stock and a member of the Dow Jones Industrial Average.
"We see HPQ's net for the fiscal first quarter ending Jan. 31 climbing 22%. In the second quarter, we see an earnings gain of 47%. And in the third quarter, we see earnings growth of 107%. For the fiscal year ending Oct. 30, 2003, we expect the company's net to rise 49%. The stock's price-earnings ratio is only 15, well below the company's estimated earnings growth rate of the next two years. We see that as very reasonable. We see good potential for at least a 50% rise in the stock in 2003."