united technologies

Most stock markets are down lately due to investor worries about a potential eurozone breakup, sluggish U.S. growth and a slowdown in China. Still, the long-term outlook is positive. One way to profit from a rebound is to add exchange traded funds (ETFs) that track major stock market indexes to your portfolio. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You must pay brokerage commissions to buy and sell ETFs, but their low management fees still give them a cost advantage over most mutual funds....

One way to cut your risk and earn higher profits in the highly cyclical aerospace business is to stick with global leaders. Here are two with bright prospects. UNITED TECHNOLOGIES CORP. $83 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 908.9 million; Market cap: $75.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.utc.com) aims to complete its purchase of Goodrich Corp. (New York symbol GR) later this year. Goodrich makes a wide range of aircraft parts, including landing gear, wheels and brakes. It also maintains and repairs planes. United Technologies is paying a total of $18.4 billion, including $1.9 billion of Goodrich’s debt. Goodrich looks like a good fit with United Technologies’ other aerospace operations: Pratt & Whitney aircraft engines; Hamilton Sundstrand aircraft controls; and Sikorsky helicopters. Goodrich will add $8 billion to United Technologies’ yearly revenue....

UNITED TECHNOLOGIES CORP. $83 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 908.9 million; Market cap: $75.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.utc.com) aims to complete its purchase of Goodrich Corp. (New York symbol GR) later this year. Goodrich makes a wide range of aircraft parts, including landing gear, wheels and brakes. It also maintains and repairs planes. United Technologies is paying a total of $18.4 billion, including $1.9 billion of Goodrich’s debt.

Goodrich looks like a good fit with United Technologies’ other aerospace operations: Pratt & Whitney aircraft engines; Hamilton Sundstrand aircraft controls; and Sikorsky helicopters. Goodrich will add $8 billion to United Technologies’ yearly revenue.

Meanwhile, the company earned $5.0 billion in 2011, up 13.9% from $4.4 billion in 2010. Earnings per share rose 15.8%, to $5.49 from $4.74, on fewer shares outstanding. If you exclude writedowns of investments and other unusual items, earnings per share would have risen 9.9%, to $5.53 from $5.03. Revenue rose 7.1%, to $58.2 billion from $54.3 billion.

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SPDR DOW JONES INDUSTRIAL AVERAGE ETF $126.91 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average.

The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Johnson & Johnson, McDonald’s Corp., Coca-Cola Co., Caterpillar Inc., United Technologies and Boeing Inc. The fund’s expenses are about 0.18% of its assets.

SPDR Dow Jones ETF is a buy.

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Exchange traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $109.28 (New York symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average. The fund’s top holdings are IBM, ExxonMobil, Chevron Corp., 3M, Johnson & Johnson, McDonald’s Corp., Coca-Cola Co., Caterpillar Inc., United Technologies and Procter & Gamble. The fund’s expenses are about 0.18% of its assets. SPDR Dow Jones ETF is a buy....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders. Below, we update our advice on six ETFs — five buys and one we don’t recommend....

UNITED TECHNOLOGIES CORP., $68.92, New York symbol UTX, is buying Goodrich Corp. (New York symbol GR). This North Carolina-based company makes a wide range of aircraft parts, including landing gear, wheels and brakes. It also maintains and repairs planes. United Technologies is paying $18.4 billion for Goodrich, including assuming $1.9 billion of the company’s debt. On June 30, 2011, United Technologies held cash of $5.4 billion, or $5.94 a share, so it will likely borrow the rest of the money it needs to buy Goodrich. Still, United Technologies can comfortably afford to take on more debt: its long-term debt of $9.5 billion is a low 15% of its $62.6-billion market cap. It also plans to raise $4.2 billion by selling shares....

GOOGLE INC., $524.85, Nasdaq symbol GOOG, has paid an undisclosed sum for privately held Zagat, which publishes reviews of restaurants, hotels, theatres and other tourist attractions in over 100 countries. Zagat, which was founded in 1979, bases its ratings on information it receives from consumer surveys. It then sells this information through printed guides and its web site. Zagat will give Google access to local content that is not available to other Internet-search providers. As well, the company can add Zagat’s reviews to its other services, like Google Maps, which displays street maps and helps users find their way to their destinations. Zagat’s reviews should also enhance the appeal of mobile devices powered by Google’s Android operating system....

Hidden value is one of the key factors we look for when we’re looking for winning stock picks to recommend in our investment advisories, including Wall Street Stock Forecaster, our newsletter for investing in the U.S. markets. By hidden value, we mean valuable assets that are not getting the attention they deserve from investors. Here’s how that can translate into making winning stock picks: When a company’s assets are wholly or partially hidden, the stock trades for less than it’s really worth, so you get to buy at a bargain price....