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EOG a Core Large-Cap E&P

Tags: eog
28 Aug 11:04pm
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We continue to see EOG Resources, Inc. (EOG) shares as a core holding in the large-cap exploration and production (E&P) space for the company's demonstrated ability to achieve consistent production growth, primarily through organic means. EOG's strong positions in Texas Barnett Shale and North Dakota's Bakken plays provide it with a multi-year inventory of development drilling opportunities. EOG has a very strong organic production-growth profile, with volumes expected to increa...

Altria Spin-Offs a Success

Tags: mo
28 Aug 10:34pm
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Altria Group, Inc. (MO) generates significant cash flow and the stock has a high dividend yield. However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld by appellate courts, especially the $50 million judgment paid out in the Boeken case after the U.S. Supreme Court refused to hear it. The Hold rating is maintained. Longer-term, the spin-offs of Kraft (KFT) and Philip Morris International (PM) should unlock shareholde...

Entergy Corp. Going Nuclear

Tags: etr
28 Aug 10:10pm
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Entergy Corp. (ETR) is shifting towards becoming a fundamentally strong electric energy utility with the separation of its nuclear business. Its core business shows strong earnings growth and cash flow generation by higher production with fewer outage days and higher power prices. Favorable regulatory rate hikes, higher contract and market energy pricing, increased generation from the Palisades nuclear plant acquisition, a reasonable valuation and steady recovery from the hurricane ...

Mickey D's a Buy Amid Turbulence

Tags: mcd
28 Aug 9:47pm
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McDonald's Corp.'s (MCD) focus on core brands, its image make-over program, and innovative marketing campaigns have been successful. After doubling margins in its U.S. operations, the company is turning its focus to Europe and APMEA (Asia/Pacific, Middle East and Africa), where company-operated restaurant margins lag the U.S. (by 110-350 basis points in the second quarter). Re-franchising continues to be another engine of growth, bolstering return on assets by an expected 100 basis p...

King a Hold, Pre-Alpharma Deal

Tags: kg, alo
28 Aug 9:18pm
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We had a Sell rating on King Pharmaceuticals, Inc. (KG) for a significant period of time based on concerns regarding top-and bottom-line growth prospects. Thanks to increased competition, generic threats, and declining prescription trends for key products, the shares declined almost 45% during this period. King is now looking to acquire Alpharma (ALO); this acquisition would help King expand its presence in the pain management market and could help it achieve significant cost synerg...

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