Iron Mountain Inc. (NYSE: IRM) is a repeat performer despite having risen from $23.00 a quarter ago to $27.45 now with implied upside of 25%. Its news dividend yield is 0.9%.
- Its 1-year mean price target is $34.33, up marginally from $33.50 a quarter ago. That implies a new upside of 25% versus upside of 45% a quarter ago. Iron Mountain shares have bounced after a period of floundering. It also has started a dividend and many feel the business spending climate is migrating back toward the company compared to in 2009.
Nalco Holding Co. (NYSE: NLC) is a new holding and at $24.76 it has an implied upside of 12.1% to the $27.77 mean target. Its dividend is small at 0.6%.
- Nalco has a 52-week range of $13.22 to $26.63 and is in the manufacture and sale of specialized service chemical programs worldwide for water, chemical processes, pollution control and more. The stock is down over the last quarter versus an up market and shares hit a high in January of $26.63.
Republic Services Inc. (NYSE: RSG) is also a new Buffett holding. At $29.18 it has an implied upside of 14.5% to the $33.38 mean
price target. It also sports a 2.6% dividend yield.
- The garbage, ergo waste management, industry is another utility type industry and is a new holding for Buffett. Frankly, the new holding should be no surprise. Buffett bought in after or around the same time that his buddy Bill Gates added shares and put a man on the Board of Directors. Its 52-week range is $17.77 to $29.82 and this was a $35 stock back in 2008. It has everything Buffett likes… steady business, growth, huge barriers to entry, timeless outlooks, and locked-in customers with limited competition.
Sanofi-Aventis (NYSE: SNY) is a surprise entrant with the most upside. At $37.44 it has implied upside of 13.5% to the $42.49 target and has a 4.4% dividend yield at today’s prices. This is a small Buffett position and also not one he really decides on, so enough said.
UnitedHealth Group, Inc. (NYSE: UNH) and WellPoint Inc. (NYSE: WLP) are both going to be included here. At $32.99, UnitedHealth has an implied upside of 18.6% to its target of $39.13, and its dividend is 0.1% today. At $64.71, WellPoint has an implied upside of 14.4% to the $74.08 and it does not have a dividend.
- It really seems as though Buffett has not sold out of these health insurance stocks because of his political backings in 2008. He has sold these off over the last three quarters in a row. Buffett obviously feels that having US Congress and Joe Public as the gatekeeper for turning these into utilities is not a good spot to be in during the transition. It is just surprising he still holds any shares at all here in these two.
Several stocks with the most implied upside were very close with upside still over 10% but short of the 11.8% of Coca-Cola. The banks performed in Q1 and it should have probably been noted that the reason so many banks were there last time was due to performance in Q4-2009 being one of major profit taking and lightening up after exponential gains from the March-2009 lows. The data on the mean price target consensus from Thomson Reuters can also have a lag to it and will change again after this next upcoming earnings season.
We took all opinion out of this except for in the conjecture provided on each stock. This was going to be a 10-stock list, but we kept it at 11 to mirror last time after the previous list was so skewed to banks. Had we included the stocks that were right at 10% as well, the list would have been 15 or 16 stocks.
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JON C. OGG
APRIL 5, 2010
