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Mickie Siebert's Multinational Stock Picks

By    |   Tuesday, 11 Nov 2008 11:14 AM

Muriel "Mickie" Siebert, chairwoman and CEO of Siebert Financial, is often called "The First Woman of Finance," recognizing the fact that she became the first woman to own a seat on the New York Stock Exchange in 1967 when she paid a then-record $445,000 to join the exclusive club.

Siebert continued her career as a financial trailblazer in 1975 when fixed commissions were eliminated. Siebert Financial immediately reduced commissions by 40 percent and became one of the first firms to become a discount broker.

Siebert still owns 86 percent of the firm, worth almost $50 million. This represents a return of more than 12 percent a year on the cost of her exchange membership.

In a recent interview with Steve Forbes, Siebert said she was largely in cash but was looking to buy U.S. global companies that derive at least 50 percent of their revenues and earnings abroad.

"Some of these companies are selling at nine, 10, or 11 times earnings, so you know that they're going to be a great buy," Siebert says.

For this week's screen, I followed Siebert's advice:

• Only companies which generate at least half their revenue overseas were considered. This included just over 100 of the companies in the S&P 500 index.

• Siebert cautions against excessive debt. Following this advice, we restrict potential buys to companies which have below average debt when compared with other companies in their industry.

• Earnings and dividends should both be positive over the past 12 months.

• To avoid buying stock of companies headed towards potential bankruptcy, we selected only stocks that were in the top quartile of performance over the past six months. This should find stocks the market expects to do well when the bear market finally ends.

These stringent criteria left us with only six stocks on our list.

Altria Group (MO) is the holding company of Philip Morris, the well-known cigarette company, and John Middleton, which manufactures machine-made large cigars. MO also holds a 28.6 percent stake in brewer SABMiller. With 58 percent of sales coming from overseas, MO provides recession-proof products (beer and cigarettes) around the world. At a recent price of 17.82, MO offered a dividend yield of 7.1 percent and a P/E ratio of 6.

Applied Biosystems (ABI) provides technology solutions for DNA and other genetic research. The company has an installed base of approximately 180,000 instrument systems in nearly 100 countries, providing a solid stream of maintenance revenue and earnings. Almost 60 percent of revenue is derived overseas. Recent price: 30.20.

Brown-Forman (BF) bottles and distributes a variety of alcoholic beverages. Its principal brands include Jack Daniel's Tennessee Whiskey and Southern Comfort, both strongly identified with the American way of life and popular among the rising middle classes in emerging markets. BF gets just over half its sales overseas. At the recent price of 47.41, BF pays investors a 2.3 percent dividend.

Coca-Cola (KO) generates more than 70 percent of its total revenue outside the U.S. Earnings growth is expected to be close to its slow but steady historical average of 10 percent a year. The largest shareholder, Warren Buffett, owns 200 million shares, valued at more than $10 billion at the recent close of 45.90. The dividend yield is a market-beating 3.3 percent at that price.

Exxon Mobil (XOM) sees almost 70 percent of its revenue come from overseas. At a recent price of 74.02, XOM has a P/E ratio of 8, well below its five-year average of 11. It offers a dividend yield of 2.2 percent, and the company has been increasing its payout by more than eight percent a year on average over the past five years.

Pfizer (PFE) sells almost $50 billion a year of prescription medicines for humans and animals worldwide, with just over 40 percent of its sales coming from the United States. Its blockbuster drugs include Lipitor for elevated cholesterol levels in the blood; Chantix/Champix for smoking cessation; Aricept for Alzheimer's disease; and Celebrex for arthritis pain. Earnings have grown only about 2 percent a year over the past five years, and are expected to grow at that pace for the next several years. The stock pays a 7.6 percent dividend yield at the recent price of 16.60.

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Muriel "Mickie" Siebert, chairwoman and CEO of Siebert Financial, is often called "The First Woman of Finance," recognizing the fact that she became the first woman to own a seat on the New York Stock Exchange in 1967 when she paid a then-record $445,000 to join the...
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Tuesday, 11 Nov 2008 11:14 AM
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