Q: Do you think Rent-a-Center (RCII ) deserved a $6 crash today?
A: We issued a story today on S&P's Advisor Insight service maintaining our accumulate opinion on Rent-a-Center shares. The company posted earnings that were below estimates. We think it's on track to open 80 new stores in 2003 and expect operating earnings to grow 22% this year, to $5.90, and 15% next year, to $6.82. The shares trade well below the S&P 500 valuations, and we still think they're attractive for accumulation.
Q: How do you rank energy outfits Noble (NE ) and GlobalSantaFe (GSF )?
A: Noble Corp carries a 4-STARS ranking. GlobalSantaFe is ranked 5-STARS. In both cases, we're optimistic about the increase in capital expenditures by international integrated firms and the benefit that has on such worldwide drillers. In general, however, we recommend a market weighting for the entire energy sector but favor the drillers and E&P [exploration and production] companies.
Q: Which is the better pick, Johnson & Johnson (JNJ ) or Eli Lilly (LLY )?
A: In this case, you'll have to do the selecting for us. Both companies carry 4-STARS, or accumulate, rankings. In fact, none of the major pharmaceuticals that we cover carries a 5-STARS, or buy, ranking. Other big pharmas that carry 4-STARS rankings include Pfizer (PFE ) and Wyeth (