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Corning Continues to Be Unbreakable

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Company has string of earnings beats and estimates have been moving up.

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Asian stocks took a bit of a breather overnight. The Hang Seng and the Nikkei closed down 0.25% and 0.95%, respectively. European stocks were off, too, in early trading. And here in the US, we're currently trading higher.

Here's what I'm seeing this fine Thursday morning:

Corning (GLW):
Justin Sharon said in his article earlier this morning that Thomas Weisel bumped up its rating on the company to Overweight, and I wanted to weigh in:

1. I've been a bull on the stock for a while now and think the upgrade will only help. (See Will Corning Continue to Shatter Street Expectations?)

2. With the economy coming back on Main Street, it stands to reason the demand for various goods will perk up. I'm particularly upbeat on the outlook for the electronics space -- more specifically, the LCD-TV space. Corning of course, makes the glass for flat screens.

3. Its terrific string of earnings beats is another reason why I'm excited. To boot, estimates for this year have been moving up.

4.
I think the shares, which have been on a roll since late last year, could have some room left to run. At only 10.7 times this year's estimate, I still see some nice value here.

Nike (NKE):
Is it time to lace on a pair, or are "these boots made for walking"?

Give the footwear company's third-quarter release a gander. It put $1.01 on the scoreboard, which is pretty sweet as analysts were looking for just $0.89 a share. It managed to beat on the top line, too.

Some thoughts:

1. I've become increasingly bullish on the company (check out my most recent comments in February), and this most recent quarter only solidifies my opinion that the stock still has some room to run.

2. There are a bunch of things to like, from its ability to just pummel estimates this past year to the fact that folks are likely to be more willing to pony up for its merchandise in the months ahead thanks to a slight improvement of conditions on Main Street.

3. The comments about future orders in the release got me to. Specifically: "The Company reported worldwide futures orders for Nike Brand athletic footwear and apparel, scheduled for delivery from March through July 2010, totaling $7.1 billion, 9 percent higher than orders reported for the same period last year. Excluding currency changes, orders would have increased 6 percent."

4. And the final reason to like this stock right now, is -- to quote Chris Rock from a movie a few years back whose title is currently slipping my mind -- "Tiger, Tiger, Tiger Woods ya'll." In short, no matter what you think of him, if Tiger gets back on the golf course, it will likely lead to increased merchandise sales.

So long story short, I'm a bull on Nike. Look for a new high in short order.

Guess (GES):
Did you happen to give the apparel company's fourth-quarter release a look?

There were several tidbits of news worth mentioning. First, the company turned in $0.96 a share excluding items, which was a country mile north of the $0.82 the Street was looking for. Second, it indicated that for the first quarter, it's looking for $0.46 to $0.48, which is in line/just north of the $0.46 estimate currently out there. Third, per the release:

The Company also announced today that its Board of Directors has approved an increase of its quarterly cash dividend to 16 cents per share on the Company's common stock, a 28% increase over its most recent quarterly dividend. This dividend will be payable on April 16, 2010 to shareholders of record at the close of business on March 31, 2010.


My thoughts:

1. The company has strung together four quarters in a row of big earnings beats, which just has to draw attention from retail and institutional investors.

2. That bump up in the dividend sure is a good sign; it's not something a company does on a whim, and not something the board would likely take on unless it were confident.

3. I realize the shares are trading near their highs, but at under 16 times this year's estimate, there could still be some more room to run. I'm looking for a new 52-week high in the near-run.

Advanced Micro Devices
(AMD):
Goldman took the chip company off its Conviction Sell list.

My feel on the overall situation:

1. I've consistently been a bear, and although the shares have bounced back sharply this past year, I still feel the same way. I don't see it getting out from behind Intel's (INTC) shadow any time soon, and I'm certainly not upbeat about its earnings prospects. The fact is, it's expected to lose a hefty $0.18 a share this year, and I'd feel more comfortable dipping my toe in the water with Intel, which is coming off a couple of better-than-expected quarters and still trades at a very reasonable 13.5 times the 2010 estimate.

2. No -- I don't think Goldman taking it off its Conviction Sell list is going to give the shares a boost. Sorry, AMD bulls.

Have a great day!

No positions in stocks mentioned.

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