Market Overview

Four Route 66 Stocks (CME, BUD, DVN, ATVI)

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It's May, and summer is almost here. Time to think about throwing a packed bag in the car, putting the top down and heading out on the open road, right? But wait: with oil well over $100 a barrel and the price of gasoline creeping toward $5 a gallon in some places, the traditional summertime road trip may not seem so feasible this year.

Well, here are a few companies with headquarters along the Mother Road—Route 66—whose stocks might be worth a look now.

Chicago

Route 66 began (or ended, depending on your perspective) in Chicago. The one-time hog butcher to the world is home to the CME Group (NYSE: CME), which operates the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange. CME Group topped earnings and revenue estimates when it posted first-quarter results last week. It also boosted its quarterly dividend by 22% back in February. Analysts on average have recommended buying CME for more than 90 days. The long-term EPS growth forecast is 12.8%, and the ongoing economic recovery should continue to drive healthy revenue growth.

St. Louis

Although Anheuser-Busch became a subsidiary of Belgium-based Anheuser-Busch InBev (NYSE: BUD) in 2008, the brewer and theme park operator remains a part of the cultural legacy of St. Louis, Missouri, as well as a major employer there. The share price is up more than 12% year-to-date and ended last week less than a buck below the 52-week high. The stock has outperformed the broader market and competitor Molson Coors (NYSE: TAP) in the past few weeks. Note though, that like many advertisers, Anheuser-Busch InBev is keeping a close eye on the NFL labor dispute; Bud Light is to be the NFL's official beer sponsor starting with the 2011 season.

Oklahoma City

Oklahoma City is home to one of the largest independent oil and natural gas producers in the United States. Devon Energy (NYSE: DVN) raised its quarterly dividend by 6% in March. The company has regularly bested consensus quarterly earnings estimates over the past two years; the beat was by more than 30% in the fourth quarter. The stock is trading at 13.6 times current earnings, much less than the industry average, and the price to earnings growth ratio is 0.9. Also, the return on equity is a healthy 26.3%. The share price is more than 15% higher than at the beginning of the year, and the stock has outperformed the broader market during that time.

Santa Monica

The western terminus of Route 66 was in Santa Monica, California. Today, a number of game development studios can be found there, including the headquarters of Activision Blizzard (NASDAQ: ATVI). Known for its Call of Duty, World of Warcraft and Guitar Hero franchises, the company has topped consensus earnings estimates in recent quarters. It also has healthier profit margins than competitors Take Two Interactive (NASDAQ: TTWO) and Electronic Arts (NASDAQ: ERTS). Goldman Sachs recently upgraded Activision to a Buy rating, seeing the stock as a bargain. Due to its valuation and cash on hand, the company is also considered by some to be a buyout target.

None of these stocks may put the wind in your hair, but perhaps they could add a little fuel to your portfolio.

Posted-In: Anheuser-Busch Bud Light Call of Duty Chicago Chicago Board Of Trade Chicago Mercantile ExchangeLong Ideas Trading Ideas Best of Benzinga

 

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