Hot Cheap Companies To Invest In Right Now

The commonly accepted wisdom in the cigarette industry goes something like this: Smoking is in decline in the United States. Therefore, if you want to make money on tobacco, you must look abroad. You must buy Philip Morris International (NYSE: PM  ) stock.

The problem, though, is that this commonly accepted wisdom is dead wrong. Tobacco investors can do quite well by buying a domestic cigarette business. In contrast, Philip Morris stock is looking overpriced today, and unlikely to outperform going forward. Why?

Three reasons.

Philip Morris stock is at the bottom of the pack
When you stack up Philip Morris stock against its rivals, it quickly becomes apparent that investors have been overpaying for an inferior company. Valued on its earnings, a share of Philip Morris stock will cost you 18.1 times earnings today, while a share of former parent Altria (NYSE: MO  ) costs only 17.2 times earnings, and a pack of Lorillard (NYSE: LO  ) shares sells for a P/E of just 14.1 -- 22% cheaper than Philip Morris.

Hot Cheap Companies To Invest In Right Now: Bk Sardegna Stk N(SARIn.MI)

Banco di Sardegna S.p.A. provides retail banking and financial services. The company offers consumer loans and financial leasing transactions, securities portfolio management, deposits and corporate finance instruments, foreign currency transactions, derivative contracts linked to interest rates, debt securities and foreign currency, and automated teller machine and credit card services. It also provides tax collection, service automation, and real estate services. The company is headquartered in Cagliari, Italy. Banco di Sardegna S.p.A. is a subsidiary of Banca Popolare dell'Emilia Romagna.

Hot Cheap Companies To Invest In Right Now: American Express Company(AXP)

American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide. The company?s product portfolio consists of charge and credit card products; expense management products and services; consumer and business travel services; stored value cards, including travelers cheques and other prepaid products; network services; merchant acquisition and processing, point-of-sale, servicing and settlement, and marketing and information products and services for merchants; and fee services comprising market and trend analyses and related consulting services, fraud prevention services, and the design of customer loyalty and rewards programs. In addition, it publishes luxury lifestyle magazines; business and travel resources; general interest, cooking, travel, wine, cocktail, financial, and time management books; and international and electronic editions. The company sells its products and services to consumer s, small businesses, mid-sized companies, and large corporations through direct mail, on-line applications, targeted direct and third-party sales forces, and direct response advertising worldwide. American Express Company was founded in 1850 and is headquartered in New York, New York.

Advisors' Opinion:

• [By Buffett]

   As a global credit card giant, American Express (AXP) takes a small piece of every single transaction made by its affluent consumer and corporate account cardholders. This makes American Express a "toll bridge" -- a quality that Buffett loves to see in companies, says Russo, of Gardner Russo & Gardner.

  The benefits of toll collecting pay off big when spending rebounds. In the second quarter, American Express earnings rose 31% to $1.3 billion, as consumer spending by Amex cardholders outside the U.S. jumped 27% and spending by U.S. cardholders increased 14%. Because American Express can deliver more-affluent cardholders, it has pricing power with merchants, another quality Buffett likes. It's also shareholder friendly in that it returns a significant amount of free cash flow to shareholders through dividends and share buybacks -- another quality on Buffett's checklist.

  Buffett's original purchases of American Express were in the mid-1960s, when a scandal drove its stock unreasonably low, turning it into the kind of fat pitch that Buffett likes to see. However, the stock has been strong for the past two years. At $51, it's definitely no longer a fat pitch. Morningstar analyst Michael Kon suggests waiting for pullbacks to $32.40, to buy. But Morningstar is a pretty conservative shop, so I feel comfortable suggesting you add a few dollars to that buy limit. Wall Street analysts have a consensus 12-month price target of $60, according to Thomson One Analytics. Buffett owns 151.6 million shares.

Top 10 Penny Stocks To Watch For 2014: Hertz Global Holdings Inc(HTZ)

Hertz Global Holdings, Inc., through its subsidiaries, engages in the car and equipment rental businesses worldwide. It operates in two segments, Car Rental and Equipment Rental. The Car Rental segment engages in the ownership and lease of cars. This segment operates car rental locations at or near airports, as well as in central business districts and suburban areas of cities in the United States, Canada, France, Germany, Italy, the United Kingdom, Spain, the Netherlands, Switzerland, Belgium, Luxembourg, the Czech Republic, the Slovak Republic, Australia, New Zealand, China, and Brazil. It also operates retail used car sales locations in the United States and France. The Equipment Rental segment rents earthmoving equipment, material handling equipment, aerial and electrical equipment, air compressors, generators, pumps, small tools, compaction equipment, and construction-related trucks. In addition, this segment sells new equipment, and consumables, such as gloves and ha rdhats. The company also offers claim administration services, such as investigating, evaluating, negotiating, and disposing of various claims, including third-party, first-party, bodily injury, property damage, general liability, and product liability. Hertz Global serves various industries, such as construction, petrochemical, automobile manufacturing, railroad, power generation, and shipbuilding. The company was founded in 1918 and is headquartered in Park Ridge, New Jersey.