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Highlights From New Constructs Investment Research

For Ask Matt readers:Caterpillar Inc. (CAT) — Dangerous Rating

For Ask Matt readers:Caterpillar Inc. (CAT) — Dangerous Rating

Caterpillar Inc. (CAT) gets our Dangerous Rating. This means CAT’s quality-of-earnings are not attractive and the stock’s valuation is very expensive. For example, the valuation of the current stock price ($112.16) implies the company will grow its profits at 16% compounded annually for 20 years. The takeaway: there are better stocks to choose from. See details in our free report.

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Good, Bad and Ugly Tech Sector ETFs

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Our top picks for ETFs for the Information Technology sector are: Internet Architecture HOLDRS (IAH) and Semiconductor HOLDRS (SMH). We also rate the investment merit of the top-12 tech sector ETFs.

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Buy Eli Lilly & Company (LLY) – Attractive and Safe Enough To Take Home To Mom

Buy Eli Lilly & Company (LLY) – Attractive and Safe Enough To Take Home To Mom

The risk/reward of this stock is quite compelling. Downside risk is low as the valuation already implies a permanent 54% decline in profits. How much worse can the valuation get? Upside reward potential is strong as the stock has to go over $77/share to trade at a value that implies the company’s profits will experience a 0% decline, still a no-growth scenario.

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No Security In VirnetX Holding Corp’s (VHC) Stock

No Security In VirnetX Holding Corp’s (VHC) Stock

Is VHC the next Google? The market’s current valuation seems to suggest it is that and much more.
Very few times in the last 15 years have I found a stock as expensive as VHC. The only comparable situation that comes to mind is Google (GOOG) at its IPO.

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For Ask Matt Readers: Micron Technology, Inc. (MU) – Neutral Rating

For Ask Matt Readers: Micron Technology, Inc. (MU) – Neutral Rating

Micron Technology, Inc. (MU) gets our Neutral rating. Bottom line: we recommend you invest in SNDK, not MU.

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Not All Chip Stocks Are Made the Same: Buy SanDisk Corporation (SNDK)

Not All Chip Stocks Are Made the Same: Buy SanDisk Corporation (SNDK)

SanDisk Corporation (SNDK) is not getting the credit it deserves for the level of profitability it achieved in 2010. And… Read more >>

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Take Gains on Discover Financial (DFS) To the Bank

Take Gains on Discover Financial (DFS) To the Bank

Since we made DFS the Stock Pick of the Week on Feb 15, 2011, the stock is up about 14% while the S&P500 is up about 0.3%. The stock was super-cheap when we made the call, and that is no longer the case. After making the February and March lists, DFS is no longer one of our Most Attractive Stocks in April.

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