Two Stocks for a Second-Half Rally
02/16/2009 1:00 pm EST
Louis Navellier, editor of Blue-Chip Growth, finds two stocks he thinks can hold up in a challenging market and do even better when the economy starts to recover.
Apollo Group (Nasdaq: APOL) and C.H. Robinson Worldwide (Nasdaq: CHRW) have posted impressive numbers even in a challenging economic climate and are well-suited to ride out the recession in the first half of 2009. Best of all, in addition to providing stability in the near term, both stocks are sure to really take off when the market rebounds in the second half of the year!
Apollo provides educational programs and services through a number of subsidiaries, including its stalwart University of Phoenix. As the largest private university in the US thanks to its dramatic online reach, the University of Phoenix accounts for approximately 95% of Apollo Group's revenue. Obviously, in a bad economy, many adults go back to school for career training—so right now, Apollo Group is really cashing in as it helps out-of-work Americans learn the skills to find new jobs.
The company recently announced that its fiscal first-quarter earnings soared 34.9% to $180.4 million, or $1.12 per share, compared with $139.9 million or 83 cents per share in the same quarter a year ago. During the same period, Apollo Group's revenue rose 24.3% to $970.7 million. Analysts were expecting earnings of 98 cents per share on revenue of $912.2 million, so the company posted a 14.3% earnings surprise and a 6.4% sales surprise.
In the wake of its fiscal first-quarter earnings, the stock hit a four-year high and many brokerage firms raised their price targets for the stock. (It closed above $81 Friday—Editor.) Apollo Group is truly a company that prospers in tough economic times, and is a great buy for both the near future and the long term.
Our other buy is C.H. Robinson Worldwide, a leading third-party logistics provider that arranges freight transportation using trucks, trains, ships and airplanes belonging to other companies. The company contracts with literally 48,000 carriers. C.H. Robinson Worldwide handles about 6.5 million shipments per year for its 29,000-plus customers.
Due to the weak global economy, C.H. Robinson Worldwide services are now more important than ever since it can often provide a better deal than Federal Express (NYSE: FDX), UPS (NYSE: UPS), and other more established carriers. Other shippers are eager to fill the extra space on their trucks or planes, and CHRW is happy to oblige.
In the third quarter, C.H. Robinson’s earnings rose 12.5% to $93.6 million, or 54 cents per share, compared with $83.7 million or 48 cents per share in the same quarter a year earlier. During the same period, the company's sales rose 24.1% to $2.32 billion.
Interestingly, in the third quarter the company's "less-than-truckload shipments" rose 18%, which illustrates that there was extra space available that could still be booked, especially as economic growth improves in the upcoming quarters. The stock is a great buy right now. (It closed above $47 Friday—Editor.)
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