Stock Market For Beginners » blue chip stocks

Indian Blue chip companies

admin — Wed, 09 Sep 2009 01:41:21 +0000

One of the success stories in the recent times and that has had the best growth rates after China has been India. Most of the times you will hear only about IT sector and the BPO sector with all the US Fortune 500 companies sending their jobs overseas. The fact of the matter is that India is more than that.

If you have not invested in the Indian companies then you are losing out on the good growth stories and making huge returns on your capital.

Here is the list of the Indian blue chip companies which comprise the 30 stocks that are there in the BSE -30 and I am also giving out the symbols of the ADR’s if at all that are listed in the NYSE.

Tip: If you can invest in a mutual fund then invest in the Franklin India Blue chip fund which has been giving stellar returns as it just invests in the blue chip Indian growth companies.

ACC

Bharti Airtel

BHEL

DLF

Grasim

HDFC

HDFC Bank(HDB)

Hero Honda

Hindalco

HUL

ICICI Bank(IBN)

Infosys(INFY)

ITC

Jaiprakash Asso

Larsen

Mah and Mah

Maruti Suzuki

NTPC

ONGC

Reliance

Reliance Comm

Reliance Infra

SBI

Sterlite Ind(SLT)

Sun Pharma

Tata Motors(TTM)

Tata Power

Tata Steel

TCS

Wipro(WIT)

Tip: DO not blindly invest in all blue chip companies. Take a stock of the situation and consider only those which have some potential and can be provide better returns than in the US market else you can always invest in the stocks which are listed locally.

Better still you can also invest in the country specific ETF if you do not want the hassle of investing in the India Stock market directly.

Also note that you need to know what is the blue chip stock before you start your building your portfolio.

UK blue chip companies – top blue chip companies

admin — Wed, 09 Sep 2009 01:39:04 +0000

The UK stock market is known as the FTSE and the index which is there akin to the Dow Jones in US or the NASDAQ-100 or the Sensex in India is the FTSE-100. FTSE-100 alone can provide you the list of top UK blue chip companies.

Before you being your investment journey in the blue chip stocks it is always better to know what are the blue chip stocks and why they are called so.

These companies by themselves provide about 81% UK market.

Here is the list

Admiral Group plc (LON:ADM)

AMEC plc (LON:AMEC)

Anglo American plc (LON:AAL)

Antofagasta plc (LON:ANTO)

Associated British Foods plc (LON:ABF)

AstraZeneca plc (LON:AZN)

Autonomy Corporation plc (LON:AU.)

BAE Systems plc (LON:BA.)

Barclays PLC (LON:BARC)

BG Group plc (LON:BG.)

BHP Billiton plc (LON:BLT)

BP plc (LON:BP.)

British American Tobacco plc (LON:BATS)

British Sky Broadcasting Group plc (LON:BSY)

Bunzl plc (LON:BNZL)

Cable and Wireless plc (LON:CW.)

Cadbury plc (LON:CBRY)

Capita Group plc (LON:CPI)

Carnival plc (LON:CCL)

Cobham plc (LON:COB)

Compass Group plc (LON:CPG)

Diageo plc (LON:DGE)

Eurasian Natural Resources Corporation (LON:ENRC)

Experian plc (LON:EXPN)

Fresnillo Plc (LON:FRES)

G4S plc (LON:GFS)

GlaxoSmithKline plc (LON:GSK)

ICAP plc (LON:IAP)

Inmarsat Plc (LON:ISAT)

InterContinental Hotels Group PLC (LON:IHG)

International Power plc (LON:IPR)

Intertek Group plc (LON:ITRK)

Invensys plc (LON:ISYS)

Kazakhmys plc (LON:KAZ)

Lloyds Banking Group PLC (LON:LLOY)

Lonmin Plc (LON:LMI)

Man Group Plc (LON:EMG)

Marks and Spencer Group Plc (LON:MKS)

National Grid plc (LON:NG.)

NEXT plc (LON:NXT)

Pearson plc (LON:PSON)

Pennon Group plc (LON:PNN)

Petrofac Limited (LON:PFC)

Randgold Resources Limited (LON:RRS)

Reckitt Benckiser Group Plc (LON:RB.)

Reed Elsevier plc (LON:REL)

Royal Dutch Shell plc (LON:RDSA)

RSA Insurance Group plc (LON:RSA)

SABMiller plc (LON:SAB)

Serco Group plc (LON:SRP)

Shire Plc. (LON:SHP)

Smith & Nephew plc (LON:SN.)

Smiths Group plc (LON:SMIN)

Standard Chartered PLC (LON:STAN)

Tesco PLC (LON:TSCO)

The Sage Group plc (LON:SGE)

Tullow Oil plc (LON:TLW)

Unilever plc (LON:ULVR)

United Utilities Group PLC (LON:UU.)

Vedanta Resources plc (LON:VED)

Vodafone Group plc (LON:VOD)

Wm. Morrison Supermarkets plc (LON:MRW)

WPP PLC (LON:WPP)

Xstrata PLC (LON:XTA)

Cairn Energy PLC (LON:CNE)

Hopefully this list will be able to give you a decent head start about where to invest in the UK stock market that is the FTSE

Blue chip companies – Top Australian blue chip companies

admin — Wed, 09 Sep 2009 01:37:30 +0000

Talking about blue chip companies there are blue chip companies in each countries stock exchange be it the FTSE or the Australian stock exchange or the Bombay Stock Exchange called the BSE.

Well if you need to know as to how to define blue chip stocks then this post of mine about what is blue chip stock will help you understand the basic theory about the blue chip stocks and the way you can benefit by having them in your portfolio.

Read the list here of the Australian blue chip companies and decide whether you will like to invest in those

CSR

Woolworths

AMP

Telstra

Qantas

BHP Billiton Ltd

Macquarie Group Ltd

Milton Corporation Ltd

National Australia Bank Ltd

Wesfarmers Ltd

AGL Energy Ltd

Rio Tinto Ltd

Australia and New Zealand Banking Group Ltd.

Australian United Investment Company Ltd.

QBE Insurance Group Ltd.

Also read a list of UK blue chip companies and the Indian blue chip companies

If you are a US investor and want to invest in the emerging markets then investing in the Indian blue chip companies is a must because of the fact that these will be better than most blue chip stocks in other countries as they not only are the best in their country but they will provide above average growth.

Top blue chip stocks and investing blue chip stocks for long term

admin — Wed, 09 Sep 2009 01:34:03 +0000

Most of the people who are there in the stock market for the long term need to make sure that they always these top blue chip stocks in their portfolio and that is the best way to make sure that they have some stability in their portfolio.

Blue chip stocks are those stocks which have been known to be the stocks that have these characteristics

Leaders in their individual industry segments

Large Capitalization

Stability of earnings

Sustained growth

Dividend pay outs

Good governance model

Widely held

Some of the best blue chips stocks worth investing in are these which are also in the dow Jones components and these are

3M(MMM)

DuPont(DD)

General Electric (GE)

Hewlett Packard (HPQ)

AT&T(T)

Well Fargo(WFC)

Now that said I must add that apart from these widely held companies there are tons of stocks which can be considered as blue chip simply because they are growth stocks and in turn if you need to apply a stock screener then do not go by the usual convention and instead go by the convention that you will always be able to find some hidden gems which will eventually become blue chips.

These stocks will definitely give the best results to you.

Here is the trick. The traditional method to look at the stocks is to look at the market capitalization and then start the drill. I would suggest that you should start way down at the bottom and begin with the stocks that make up say the Russell 2000 index. That will help you get the stocks which have a market capitalization of less than $1 billion and you will find good growth stores there.

That said a stock screener is a must top find the good stocks and here is my list of those criteria

Check the institutional investment in the company

Check the Market cap

Check The EPS growth

Check the ROE

Also check the debt to equity ratio

Again do not stick to the domestic markets only and try to buy foreign stocks as well as using your stock screener.

Blue chip dividend stock and Dogs of the Dow theory

admin — Fri, 04 Sep 2009 06:32:09 +0000

A lot of investors who invest in the blue chip stocks would generally like to invest in stocks that are the blue chip dividend stocks. Now the best way to select the stocks is to find who has paid the best dividends in the last few years.

Dividend Yield

The main parameter to know when you are buying the blue chip stocks is the dividend yield. What that means is that when you are paying for the stocks which are giving the dividends you do not need to shell out more for the stocks while buying.

A dividend yield of 10 % means that you will have to have the stock bought at Rs.100 and the dividend it gave was RS.10. Now if the price rises then of course the dividend yield will reduce as you will be paying more to buy that stock.

Here is the list of the top ten stocks which have the good dividend yields.

Bank of America(BAC) – 9.09%

General Electric (GE) - 7.65%

Pfizer(PFE) – 7.23%

Du Pont(DD)

Alcoa(AA)

At&T(T) – 5.75%

Verizon Communications (VZ)

Merck(MRK)

Jp Morgan(JPM) – 4.82%

I have listed the dividend yields and these dividend yields have the benefit that you can then use this for the Dogs of the Dow Theory.

I will explain that a little later but here is what the people think about the stocks that are there when they pay out dividends. TheBlue chip dividend paying stocks mean that these stocks are

Very very stable

Good cash flows

The benefits of having the dividend paying stocks is that they make you money even when you are holding the stocks as opposed to growth stock which make you money when you are sell. You can use the dividends to reinvest in the stocks or buy some mutual funds.

Dividend investing is also a way of investing if you are trying to learn to invest stocks

Dogs of the Dow Theory

This theory says that buy those stocks which have high divined yields and that will means that these stocks share prices are lower than whet they should be. You will benefit when the stock prices rise for these stocks as the share prices are lower.

This theory was coined by Michel of Higgins in his book beating the Dow.

At the beginning of the years you will calculate the dividend based on the closing price of the last trading day and then buy those top ten stocks which have the highest dividend yield. Since the price is low and the yield is high the price will rise and you will gain good profits on these shares and may even beat the Dow.

Dow Jones Blue chip stocks

admin — Fri, 04 Sep 2009 06:30:10 +0000

Dow Jones is the main index by which all the world swears by and that means that all the top 30 Dow Jones index stocks are the dow jones blue chip companies. Well yes and no and the reason is that sometimes there will be companies which have lost there clout and will need to be replaced.

The most recent example being that Citigroup (C) was replaced in the top 30 because of its massive losses and diminishing clout in the stock market as opposed to the earlier status when it was a financial behemoth with huge profits and a large cap status.

The Dow Jones has the thirty stocks in its index and their price is used to arrive at a weighted average and that weighted average will tell you what the price of the index is today.

You can learn more about the Dow Jones index and understand Dow Jones industrial average in my post here.

The other major thing to know is that there is the list of NASDAQ blue chip stocks which are the bets among the top 100 stocks

Now as far as the dividend paying is concerned not all the dividend paying stocks and you will need to make sure that you find those which stocks have the good dividend yield.

As I have said repeatedly that Dow Jones index is good for investment if you can easily make sure that they are for the long term growth. If you are looking for a short term profits then the best bet that you have is that you need to have the day trading courses taken or you need to have the abilities and the risk taking money available to do day trading and margin trading.

If you are a passive investor then the best bet is that you need to have the blue chips as your main stock stocks in the portfolio.

Again blue chip stocks are coined so because of the game of poker where the blue chips are of the highest value.

Update: If you need to learn about market capitalization then read my post on stock market terms

Blue chip mutual funds

admin — Fri, 04 Sep 2009 06:28:50 +0000

Following my earlier posts on what are blue chip stocks and what is the definition of blue chip stocks here is another thing which the investors should be able to use for investing in the blue chip stocks and that is the blue chip mutual funds.

These blue chip mutual funds are the funds which consist solely of blue chip companies.

The best among them is the Fidelity Blue Chip Growth (FBGRX). They have very aptly said that this investment seeks growth of your money over the longer term. They also say that they will invest in well known established companies.

This is consistent with what is meant as bleu chip companies and as I said earlier that the best thing to look is the investing in the blue chip companies for long term as that is how your money will grow as these companies tend become more larger and well manage over the longer term and in short term they may not be able to get you good returns.

The term originated from the game of poker where the blue chips are the highest value stocks. That said there have been various definitions of blue chip but the best blue chip stocks are the Dow Jones blue chip stock index companies.

Now again different mutual fund managers may have different strategies and they may also have a different connotation of what is a blue chip fund but in general they are large caps as all other investors have been buying these stocks.

An example is T. Rowe Price Growth Stock Fund (PRGFX) and this fund has the best of the best stocks in it. Another good blue chip fund is Reynolds Blue Chip Growth(RBCGX).

Some examples of blue chip companies are the

Intel (INTC)

Wal-mart (WMT)

Research in Motion (RIMM)

Again the industry segments may vary and can range from consumer services to industrial materials to hardware to energy stocks.

Always go for the no load mutual funds but if you absolutely have to invest in the mutual funds which are the loaded ones then you for a systematic investment plan.

Stock Market Term – What is market capitalization?

admin — Thu, 03 Sep 2009 03:39:18 +0000

Market capitalization is a very frequently used stock market term by the investors. While doing the research on which type of stock to buy most investors choose the market cap of the company. You would have often heard terms like large cap, mid cap, small cap and micro cap companies. But, very often people don’t actually know what these terms mean and what really is the difference between a mid cap company and a small cap company. In this article, we would learn what market capitalization means and what the different categories of market capitalization are.

What is market capitalization?
Market capitalization is a fancy name given to a very simple term. Market capitalization is actually the value of the outstanding shares of the company. It is very simple to calculate. For example, we want to calculate the market capitalization of Microsoft Technologies (MSFT) we would take its current market price and multiply it with the number of its outstanding shares.

What is the significance of Market Capitalization?
Market capitalization tells you what stock price does not. Many people think that higher stock price means a bigger company but that is not true. A company with stock price of $100 having 5 billion outstanding shares is bigger than a company having stock price of $150 but having only 1 billion outstanding shares.

What are the different market capitalization types?
There are a few categories in which companies can be divided based on their market cap. These are listed below along with some examples.

1. Mega Cap Companies – There are very few companies which fit into this category since these companies have greater than $200 billion as market cap. Mostly only the industry leaders are present in this category. One example is Exxon Mobil (NYSE: XOM).

2. Large Cap Companies or Big Cap Companies – These companies have market cap between $10 billion to $200 billion. Most of the big and well known blue chip companies belong to this category. These companies are considered to be stable and are supposed to be secure investments. Some of these companies include Microsoft (Nasdaq: MSFT), IBM Corporation (YSE: IBM), General Electric (NYSE: GE), Wal-Mart (NYSE:WMT), Apple Inc (AAPL), Applied Materials Inc (AMAT), eBay Inc (EBAY), Abbott Laboratories (ABT), Baxter International Inc (BAX), Honeywell International Inc (HON), Hewlett-Packard Co (HPQ) and McGraw-Hill Companies Inc (MHP), Citigroup Inc (C), Bank of America Corp (BAC), Cisco Systems (CSCO), Wells Fargo & Co (WFC) JPMorgan Chase & Co. (JPM), Berkshire Hathaway Inc. (BRK.B) etc.

3. Mid Cap Companies – These companies have market cap between $2 billion to $10 billion. These companies are those which are considered growth companies and may well become a part of large cap companies soon. Some of the popular mid cap companies include ABM Industries Inc (ABM), Citrix Systems Inc (CTXS), DreamWorks Animation SKG Inc (DWA), Endo Pharmaceuticals Holdings Inc (ENDP), Garmin Ltd (GRMN), MSCI Inc (MXB), Red Hat Inc (RHT), Microchip Technology Inc (MCHP)

4. Small Cap Companies – These small cap companies have market cap of between $300 million to $2 billion. These are generally new companies which have a good appreciation possibility but they come with higher risk. Some of the examples of micro cap companies include Alliance Financial Corp (ALNC), Duncan Energy Partners LP (DEP), Patni Computer Systems Ltd (PTI), Unica Corp (UNCA), ATS Medical Inc (ATSI)

5. Micro Cap Companies – These are generally referred to as penny stocks and are highly volatile and risky. Mostly, institutional investors don’t invest in these micro-cap stocks since their market cap is only between $50 million to $300 million. Examples of micro cap companies are Oculus’ (OCLS), Raptor Networks Technology (RPTN), Neuralstem (CUR), CEVA (Nasdaq: CEVA), CE Franklin (AMEX: CFK), Matrixx Initiatives (Nasdaq: MTXX), Central Sun Mining (AMEX: SMC), Technology Research Corp (TRCI), Antares Pharma Inc (AIS), Alpha Pro Tech Ltd (APT)
Core Molding Technologies Inc (CMT), Copa Holdings SA (CPA), iGo Inc (IGOI), Inhibitex Inc (INHX), Image Sensing Systems Inc (ISNS), Lime Energy Co (LIME), New York Mortgage Trust Inc (NYNT), SoundBite Communications Inc (SDBT), Sepracor Inc. (SEPR),

6. Nano Cap Companies – Companies with less than $50 million come into this category. These are extremely risky stocks and are traded only on OTCBB or Pink Sheets. Some of the examples n this category include

Of course, the market cap category can change as well due to various reasons. For example, companies line Fannie Mae (FNM) and Freddie Mac (FRE) used to be much bigger companies which have recently lost their market cap.

What are blue chip stocks and have they delivered blue chip returns?

admin — Thu, 03 Sep 2009 01:27:25 +0000

The blue chips stocks are those stocks who have delivered the best value to the stakeholders and it also includes all the shareholders as well.

These companies are the best when it comes to the their respective industry segments

Let us begin by talking about the list of blue chip companies and there are a huge number of companies but I will stick to the well known which the Dow Jones blue chip stocks are and the list is the 30 stocks that comprise that index and these are

3M (MMM)

Alcoa (AA)

American Express (AXP)

AT&T (T)

Bank of America (BAC)

Boeing (BA)

Caterpillar (CAT)

Chevron Corporation (CVX)

Cisco Systems (CSCO)

Coca-Cola (KO)

DuPont (DD)

ExxonMobil (XOM)

General Electric (GE)

Hewlett-Packard (HPQ)

The Home Depot (HD)

Intel (INTC)

IBM (IBM)

Johnson & Johnson (JNJ)

JPMorgan Chase(JPM)

Kraft Foods (KFT)

McDonald’s (MCD)

Merck (MRK)

Microsoft (MSFT)

Pfizer (PFE)

Procter & Gamble (PG)

Travelers (TRV)

United Technologies Corporation (UTX)

Verizon Communications (VZ)

Wal-Mart (WMT)

Walt Disney (DIS)

Have they delivered blue chip returns?

I would say that if you look at the recent past with the sub prime mortgage crisis and all other recessionary trends then these stocks have weathered the storm better than the others.

IBM is still strong as ever.

Mcdonald’s is also strong

Bank of America gobbled up Merrill Lynch and has emerged stronger and with less competitors. That is not to say that these have not failed as you can see from the earlier blue chip companies which were like Citigroup(C). The major characteristics of what is a blue chip stock I have given in my earlier post.

That is why it is always better to diversify and not invest all your money only in blue chip stocks and you can also invest in the best mid cap stocks as well as the best micro cap stocks