Paula Dorion Gray
President of Dorion Gray
Retirement Planning Inc.
Crystal Lake, IL
Portfolio Doctor 8-27-09
Motorola: MOT
- Sales declined in 2008 and anticipate a decrease in 2009 mainly from a weakness in the Mobile Device unit.
- They are focusing on lowering costs and consolidating their mobile device operation.
- We see a decrease in volume partially made up by higher selling prices and margins.
- Given current environment the new devices will likely face tougher sales and stiff competition.
Recommendation – SELL
Walgreens: WAG
- They are a premier player in a very lucrative industry
- Cost controls are a more vital part of business
- We expect costs related to their investment in health clinics will continue to negatively impact margins this year and next.
- Well-positioned to benefit in the long term from demographics, increased non-pharmacy merchandising and increased generic drug sales.
- There has been a decrease in drug sales and the discretionary products due to the economy.
- Significant increase in price since March of 2009 ($21 to current $33)
- They have approx. 7000 stores
- Struck a deal recently with Caterpillar to provide drugs to employees at a discount – they will continue to pursue that market
Recommendation - HOLD
McDonalds: MCD
- Recession resistant company – provide value, convenience and consistency
- Annual cash dividend is very attractive
- Innovative in new brands making a big push into the specialty coffee market – rolled out McCafe on a national scale – timing is risky due to economy but should be a positive long-term.
- Top management is excellent.
- 65% of sales come from foreign operations so the only concern is exchange rates.
- Comparable stores sales are up
Recommendation - BUY
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