Tags: Trump | big | companies | value

Trump: I See Value in Big Companies Now

Tuesday, 23 Oct 2012 09:46 AM

Big and reasonably healthy companies that miss or revise their earnings represent good buys right now just after investor sell them, said real estate mogul Donald Trump.

Third-quarter earnings season is under way, and many big companies have either missed income or revenue estimates or have revised outlooks for results down the road, often taking a bruising in the markets.

Chemical giant DuPont reported third-quarter earnings excluding items of $0.44 per share, down 37 percent from $0.69 per share during the same period a year earlier.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

Revenue dropped to $7.34 billion from $8.3 billion.

Meanwhile, conglomerate 3M reported third-quarter earnings of $1.65 per share, up from $1.52 per share a year earlier.

Revenue dipped slightly to $7.50 billion from $7.53 billion a year earlier, though the company cut its 2012 earnings-per-share guidance citing “current economic realities.”

Shares in both companies fell, but now might be the time to buy, said Trump, who has taken an interest in equities recently.

“I think I will go and run out and buy some 3M and DuPont stock. I love it when I see a nice, big drop for good companies,” Trump told CNBC.

In the meantime, however, the economy is plodding along despite improving unemployment rates.

The U.S. unemployment rate fell to 7.8 percent in September from 8.1 percent in August, as employers added a net 114,000 new jobs to their payrolls.

Households reported that total employment rose by 873,000 in September, largely due to gains in part-time work, the Bureau of Labor Statistics reported recently.

While the headline rate may be falling, it doesn’t reflect economic realities, Trump added.

“The economy is not doing well,” he said.

“When they came out with those ridiculous numbers last week — 7.8 percent unemployment — the economy is not doing well, and you’re starting to see it in the big companies.”

Fears that the global economy is sailing into building headwinds are taking its toll on markets these days, others add.

“The earnings season has not gone as well as many would like,” Tom Wirth, a senior investment officer for Chemung Canal Trust Co. in Elmira, N.Y., told Bloomberg.

“In general, sales have been disappointing. There’s heightened concern about global growth.”

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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