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Ticker Shock: Three Reasons to Watch FMC's Entry to the S&P


Wednesday's top stories and stocks with potential to move.

Oh man -- it was another hot one yesterday, wasn't it? And did anyone get up last night to see Perseid's Meteor Shower? I woke my oldest daughter up super early this morning and got to see 2 things: one meteor, and one wife coming down the stairs in a huff, telling me I'm nuts for waking her up "just to see a dumb star at such a ridiculous hour." Love ya, honey.

Asian stocks took a hit last night. The Hang Seng was off 3.03% and the Nikkei was down 1.42%. However, European stocks were in positive territory early this morning. And here in the US, we're currently trading higher.

Here's what I'm focused on this fine hump day:

FMC Corp (FMC):
The Philadelphia-based chemical company is expected to be added to the S&P 500 next week.

My thoughts:

1. My guess is the stock is already on a bunch of radar screens, given its solid name, the fact that it trades at a reasonable 12.1 times this year's estimate, and the expectations for it to grow at a 7.2% rate per annum in the next 5 years. But the addition to the index could really raise its profile and institutional demand for the shares in the months ahead.

2. It's not huge by any stretch, but the dividend is worth a mention, nonetheless.

3. One thing that bugs me: With the shares trading well off their highs, why aren't insiders dipping their toes in the water in the open market?

Applied Materials (AMAT):
Excluding items, the California-based company lost only a couple million bucks in its third quarter, which for those keeping track, equated a break-even result on a per-share basis. That was better than the $0.08 loss the Street had been looking for.

To boot, it appeared to beat on the revenue line, too. Topping things off, per Reuters: "Executives on Tuesday said they expect to post net earnings per share in the fiscal fourth quarter of break-even to $0.04."

Not bad, considering the estimate I'm seeing is for a loss of $0.04. But put away the cork openers on this news.

My parting thoughts:

1. The better-than-expected result is a good thing. But I don't see too much to make me hop aboard right now. With the company expected to earn just $0.20 a share next year, the stock is pretty far ahead of itself.

2. Not to mention that the nice run it's had over the past few months makes it susceptible to some profit-taking.
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No positions in stocks mentioned.

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