ABB LTD. ADRs $17 - New York symbol ABB

ABB LTD. ADRs $17 (New York symbol ABB; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 2.3 billion; Market cap: $39.1 billion; Price-to-sales ratio: 1.2; WSSF Rating: Above Average) is a Swiss-based maker of transformers, transmission switches and other electricity-infrastructure equipment. In the three months ended June 30, 2009, ABB earned $728 million, or $0.29 per ADR. (Each American Depositary Receipt represents one ABB common share.) This figure included $120 million in restructuring costs. ABB aims to save a total of $2 billion a year by the end of 2010 by cutting an unspecified number of jobs, closing plants and buying more raw materials from low-cost countries. In the year-earlier quarter, ABB earned $1.1 billion, or $0.43 per ADR. Revenue fell 12.3%, to $7.9 billion from $9 billion. ABB holds cash of $8.1 billion, or roughly $3.55 per ADR. Its $2.1-billion long-term debt is just 5% of its market cap. That gives it plenty of flexibility to buy other related companies. In light of the recession, ABB could find some bargains. It’s particularly interested in China, where spreading industrialization has lifted demand for its products. The company should earn $1.14 per ADR in 2009, and the stock trades at 14.9 times that estimate. The $0.44 dividend yields 2.6%. ABB is a buy.

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Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

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