Investing in Multinationals: Insights from Richard Moroney's Dow Theory Forecasts

Strategic Insights -

Richard Moroney, editor of the Dow Theory Forecasts newsletter, highlights three reasons for buying multinationals, emphasizing their investment appeal in various markets. The featured companies, including FedEx (NYSE: FDX), PepsiCo (NYSE: PEP), Disney (NYSE: DIS), Exxon Mobil (NYSE: XOM), and Intel (Nasdaq: INTC), showcase growth prospects in different business segments.

Key Takeaways:

  • FedEx is the world's leading provider of guaranteed express-delivery services, operating in 220 countries, with international business representing 37% of express revenue in fiscal 2006.
  • The company's revenue rose 10% to $8.93 billion in the November quarter, with earnings per share increasing 7% to $1.64, and projected profits of $6.60 to $6.90 per share excluding labor-contract costs in fiscal 2007.
  • PepsiCo's international division has posted impressive growth in revenue and operating profit margins, with a 10% volume growth in both snacks and beverages in the nine months ended September, driven by emerging markets.
  • Disney (NYSE: DIS) owns 100% of Disney Enterprises, Inc., a diversified worldwide entertainment company with operations in five business segments, including Media Networks, Studio Entertainment, Theme Parks and Resorts, Consumer Products, and Internet and Direct Marketing.
  • Exxon Mobil (NYSE: XOM) is a major manufacturer and marketer of basic petrochemicals, including olefins, aromatics, polyethylene, and polypropylene plastics, and a wide variety of specialty products.
  • Intel (Nasdaq: INTC) supplies the computing and communications industries with chips, boards, and systems building blocks, integral to computers, servers, and networking and communications products.

Statistics:

  • 220 countries: FedEx operates (Source: Zacks)
  • 66% of revenue: FedEx generated from FedEx Express in fiscal 2006 (Source: Zacks)
  • 37% of express revenue: International business represented in fiscal 2006 (Source: Zacks)
  • 7% increase: Earnings per share in the November quarter (Source: Zacks)
  • 10%: Revenue growth in the November quarter to $8.93 billion (Source: Zacks)
  • $6.60 to $6.90 per share: Projected profits excluding labor-contract costs in fiscal 2007 (Source: Zacks)
  • 10% volume growth: PepsiCo's snack and beverage sales in the nine months ended September (Source: Zacks)
  • $1.64 per share: Earnings in the November quarter (Source: Zacks)
  • 100%: Disney's ownership of Disney Enterprises, Inc. (Source: Zacks)

Sources:

  • Zacks.com: http://at.zacks.com/?id=84
  • Zacks Featured Experts: http://at.zacks.com/?id=85
  • Profit from the Pros: http://at.zacks.com/?id=86
  • Zacks Investment Research: http://at.zacks.com/?id=87