Microsoft (Nasdaq:MSFT) has been out of fashion on Wall Street for a long time, which makes its better-than-expected quarterly earnings report issued yesterday especially shocking,
The Redmond, Wash. company earned $5.24 billion, or 62 cents per share, on revenue of $18.5 billion, well ahead of the 54 cent profit and $17.8 billion in sales analysts had expected. Not surprisingly, shares of the software giant traded up on the news and continued to surge today, gaining 6.7% to $35.97.
Though IBM (NYSE:IBM) and Oracle (Nasdaq:ORCL) both reported disappointing results because of lackluster spending by large corporate customers, Microsoft's business with large enterprises is booming. Revenue from commercial cloud computing, where companies run software on remote servers, more than doubled in the quarter. Demand was also strong for Office 365, Azure, and Dynamics CRM Online, the company said. Moreover, the PC business, whose decline has hobbled Microsoft for years, performed better than Microsoft expected. The company also has high hopes for its upcoming release of its latest Xbox gaming console and its newest Surface tablets.
"… we are executing better, getting our customers what they want and making meaningful progress through the early stages of our transformation," Chief Financial Officer Amy Hood said on the earnings conference call.
As for Microsoft's stock, even with the recent run-up, it remains too cheap for investors to ignore. The stock trades at a price-to-earnings multiple of about 13, which is under its average five-year high, according to Reuters. Wall Street firms are ratcheting up their price targets on the software giant. Nomura's is now at $40 and Jefferies is at $42, which implies an 18% upside from current prices.
Of course, one quarter does not make a trend. Investors have gotten burned before waiting for a Microsoft turnaround and some pundits remain skeptical that better times lie ahead. Analysts at Goldman Sachs noted that while the company's quarterly performance was good that it will take years for the company to transform. They reiterated a "sell" rating on the stock.
Indeed, there are many questions yet to be answered about Microsoft including who will replace CEO Steve Ballmer when he "retires" at the end of the year. Moreover, some investors disapprove Microsoft's planned $7.2 billion acquisition of Nokia's device and services business and others are trying to oust co-founder Bill Gates from the company's board of directors. Some pundits have advocated that the company split itself up, saying it is too unwieldy to manage.
The Bottom Line
Microsoft, which has a market capitalization of nearly $300 billion, isn't withering away anytime soon. The company should post solid numbers in the current quarter as well with revenue growth expected to top 7%. While that's hardly the double-digit growth that tech investors see in high-flying tech stocks, it proves that it is possible to teach an old dog new tricks. The time to buy Microsoft is now because if it becomes "fashionable" to like the company again, its share price will surely soar.
Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article. Jonathan Berr does freelance writing for MSN, which is owned by Microsoft.
Sunday, December 29, 2013
Monday, December 23, 2013
The Favorite Small-Cap Stock Among Hedge Funds
In the following video, Motley Fool contributing writer John Reeves takes a look at some of the most popular small-cap stocks today with hedge funds, as a potential place for individual investors to find stock ideas. He discusses why Radian Group (NYSE: RDN ) was the number one pick, with $115.83 million worth of shares purchased by hedge funds in 2013, and why the continuing housing recovery trend in the United States that is getting Radian so much attention could make several other stocks interesting buys, as well.
With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!
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Sunday, December 22, 2013
8 Fascinating Reads
Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.
Centuries old, still relevant
Eddy Elfenbein finds a set of market rules from a book written by Jose de la Vega in 1688:
The first rule in speculation is: Never advise anyone to buy or sell shares. Where guessing correctly is a form of witchcraft, counsel cannot be put on airs.
The second rule: Accept both your profits and regrets. It is best to seize what comes to hand when it comes, and not expect that your good fortune and the favorable circumstances will last.
The third rule: Profit in the share market is goblin treasure: at one moment, it is carbuncles, the next it is coal; one moment diamonds, and the next pebbles. Sometimes, they are the tears that Aurora leaves on the sweet morning's grass, at other times, they are just tears.
The fourth rule: He who wishes to become rich from this game must have both money and patience.
Advice from a con man
MarketWatch has a talk with Bernie Madoff from prison:
MarketWatch: You have worked with some of the most elite financial firms on Wall Street. How has it changed since before you started the Ponzi scheme?
Bernard Madoff: The individual investor is the last person that has any information. The average investor is coming up against professional financial firms, hedge funds and the professional trader, and it's easy to be scared out of the market.
MW: You say the individual investor is facing an unfair market environment, what can be done to level the playing field?
B.M.: The SEC needs more resources to protect investors. It's grossly undercapitalized and it doesn't have money to hire the right people. Basically it's a training ground, by the time people are qualified they leave and work for private firms. They didn't catch me because the whistleblower, Harry Markopolos, was leading them down the wrong alley. He was an idiot.
Top 5 China Companies To Own In Right Now
The key to success
Robert Frank of CNBC discusses a survey of successful people:
Saturday, December 21, 2013
Bing Translator Adds Klingon, Now Supports 42 Languages
Microsoft (NASDAQ: MSFT ) continues to build out Bing Translator with a new language: Star Trek's Klingon. Now, users can translate between Klingon and the other 41 languages Bing Translator supports.
In a collaboration deal with Paramount Pictures, Microsoft launched the language on Bing Translator ahead of Paramount's Thursday launch of Star Trek: Into Darkness.
Since the language's debut in the 1979 movie Star Trek: The Motion Picture, Klingon has become the world's most popular fictional spoken language. There's even a nonprofit, the Klingon Language Institute, that was formed in 1992 to promote the study of "Klingon linguistics and culture." The organization assisted Bing with adding Klingon.
Bing also received help from Okrand and Microsoft engineer Eric Andeen, who is fluent in the language.
10 Best Oil Stocks To Watch For 2014
While Bing now supports 42 languages, Google's Google Translate still outnumbers Bing with 71 supported languages.
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Friday, December 20, 2013
3 Charity Strategies to Cope With Rising Taxes
There’s no “new new” in philanthropy, but standbys come back into favor with changing times, according to Carol Kroch, managing director for wealth and philanthropic planning at Wilmington Trust.
“Because of the increased wealth from the past couple of years — certainly this year has been a very good year in the equity market — people are focusing more on the philanthropic side,” Kroch said in a recent telephone interview.
She noted that her clients have shown particular interest in three areas.
From a tax-planning perspective, appreciated securities have returned to the fore, Kroch said. Wealthy taxpayers are allowed to take a 30% deduction for gifts of appreciated stock to public charities and certain foundations.
“In 2008, when you touted the virtues of being able to transfer your appreciated securities and diversify them in a tax-deferred mechanism, people looked at you and asked, ‘What appreciation?’” It has taken time to build back up after 2008, Kroch said.
“It’s not new, but a good time for them.”
Another tax-favored technique that has gained renewed interest as tax rates have increased is charitable remainder trusts. A CRT allows the donor to benefit a charity and benefit himself or a family member with annual payments from the trust for up to 20 years or the lives of the beneficiaries. At the end of the term, remaining assets are distributed to one or more qualified charities.
Kroch said a CRT was highly attractive to charitably minded people with highly appreciated assets. She said an important feature of a CRT was when it sold appreciated assets. The capital gains tax is deferred, making it useful for a donor who wants to diversify an asset and then derive income from it.
As each distribution is made to a non-charitable beneficiary, it is included in that person’s income. Depending on the amount of ordinary income earned by the trust, a portion of the distribution may represent capital gains previously earned by the trust. A CRT doesn’t avoid tax on capital gains, but merely defers it until distributed.
At the same time, the vehicle allows all proceeds from a sale by a CRT of an appreciated asset to be invested and grow rather than having to pay all the capital gains tax in the year of the sale.
“Depending on the amount of gains and amount of other income, it could be a very long time before they’re all fully paid out or until any are paid out,” she said. Again, not new new.
There are also “soft side issues,” Kroch said. “People do philanthropy for a lot of reasons, but it generally comes down to values. They want to do it tax efficiently because if you can give more to charity and save more money, that’s great. But I don’t think that’s ever the first motivator.
“A lot of values-oriented issues are very much top of mind for philanthropic families.”
Working together on a philanthropic project can help parents teach their children about the family’s wealth and to what uses it can profitably and charitably be put.
Philanthropy is a platform that can be neutral, though not always noncontroversial. “It’s less fraught with emotion,” Kroch said.
“The transmission of values issues is one that resonates for people year round.”
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Check out more 2014 outlooks and these related stories on ThinkAdvisor.
Check out Advisors, Execs Give Back During the Holidays on ThinkAdvisor.
Thursday, December 19, 2013
Red Lobster about to be thrown overboard by Darden
Darden Restaurants is planning to spinoff its Red Lobster unit, making the restaurant chain the latest to bow to the demands of activist shareholders.
Darden, the company behind Olive Garden, LongHorn Steakhouse, Capital Grille and Bahama Breeze and other chains, has disappointed investors with declining profits for each of the past three years has been under pressure to improve performance. As part of its Red Lobster announcement, the company also said earnings this year would dip further than expected.
Shares of Darden fell $2.70, or 5.1%, to $50.22 in midday trading. Shares of the restaurant chain are up 11.4% this year.
Most recently, hedge fund Barington Capital, which owns 2.8% of the company's shares outstanding, has pushed Darden to narrow its focus so it can more effectively compete with more specialized rivals including Chipotle Mexican Grill. Barington has urged Darden to break is slower growing brands, like Olive Garden and Red Lobster, for those with better growth prospects, like LongHorn. Barington also wants Darden to convert to a real-estate investment trust to achieve tax advantages.
Darden executives said they're keeping Olive Garden, which accounts for about half of the company's revenue, since it's still a big driver of cash flow. Nonetheless, Darden told investors it expected earnings to fall up to 20% in the fiscal year ended May 2014, largely due to sluggishness with Red Lobster. The company had told investors earlier it expected earnings to fall upward to 5%.
"While today's announcement is a first step toward improving focus and operating execution at Red Lobster and Olive Garden, we view the plan Darden announced today as incomplete and inadequate. The plan fails to address significant additional opportunities to enhance long-term shareholder value, including placing its real estate into a REIT. We believe that Darden can and should be doing more to improve value for its shareholders," says James Mitarotonda, CEO of Barington Capital Group, stated! :
Red Lobster has been losing importance with consumers, due to the rise of newer concepts that pitch better value. Selling Red Lobster could generate upwards of $2.5 billion for Darden, Miller Takak analyst Stephen Anderson told Reuters.
Contributing: Reuters
Tuesday, December 17, 2013
Top 5 Canadian Companies To Own For 2014
After years of cheap natural gas eating photovoltaic�� lunch, solar stocks are back with a vengeance. Already, we��e seen better earnings from a host of hot solar stocks like First Solar (FSLR) and Canadian Solar (CSIQ). And now, its smaller solar stock ReneSola�� turn (SOL) … and SOL stock may just surprise investors.
That�� because SOL has been undergoing a transformation over the last few quarters. Switching gears, SOL stock is now more than just a wafer play and continues to ship more solar modules to larger scale projects. That newfound focus could put SOL stock into the upper echelon of solar stocks when it announces earnings on Dec. 5.
Positive Tailwinds For SOL StockSolar stocks have been building on positive momentum in the sector … and SOL stock shouldn�� be any different. While SOL has reported some pretty volatile earnings in its short history, it did improve earnings year-over-year in the recent quarter. In fact, ReneSola saw a 40% jump in earnings per share of SOL stock in Q2.
Top 5 Canadian Companies To Own For 2014: Yamana Gold Inc.(AUY)
Yamana Gold Inc. engages in gold and other precious metals mining, and related activities, including exploration, extraction, processing, and reclamation. It also explores for copper, molybdenum, zinc, and silver metals. The company's portfolio includes 7 operating gold mines namely Chapada; El Pen Advisors' Opinion:
- [By Sean Williams]
Yamana Gold (NYSE: AUY )
Even if you're not the biggest fan of metal stocks, if you're going to add one to your Watchlist, make it Yamana Gold. - [By Jim Jubak]
At a minimum of 163.5 million shares, the offering represents 16% dilution for current shareholders. (Earnings would have to be spread over 16% more shares.) And that has raised fears across the sector, as traders and investors try to figure out which company might be next. Of course, as is usual, the initial reaction is to sell first and figure out the danger to any specific company later.
Shares of Barrick Gold fell 11.2% on November 1. Want an example of collateral damage? Shares of Yamana Gold (AUY) dropped 5.6% on the day. (Yamana Gold is a member of my Jubak's Picks portfolio.) - [By Itinerant]
Goldcorp, Newmont (NEM) or Agnico-Eagle use similar definitions. The important element here is the so-called 'sustaining capital expenditure', which is the capital required to sustain existing production levels. The table below is taken from the Agnico-Eagle presentation referenced above and provides a comparison of company-wide AISC for some of the major gold miners, including Goldcorp, Barrick Gold, Newmont Mining, Yamana Gold (AUY), Randgold (GOLD), Kinross (KGC), Agnico-Eagle Mines, Eldorado Gold (EGO), Goldfields and Centerra (CAGDF.PK). The difference between cash costs and AISC is significant. It is also important to note that these AISC are still noticeably below the present spot price for gold.
Top 5 Canadian Companies To Own For 2014: Abbott Laboratories(ABT)
Abbott Laboratories engages in the discovery, development, manufacture, and sale of health care products worldwide. The company offers adult and pediatric pharmaceuticals for rheumatoid and psoriatic arthritis, ankylosing spondylitis, psoriasis, and Crohn's disease; dyslipidemia; HIV infection; prostate cancer, endometriosis and central precocious puberty, and anemia caused by uterine fibroids; respiratory syncytial virus; adult males who have low or no testosterone; secondary hyperparathyroidism; hypothyroidism; and pancreatic exocrine insufficiency, as well as anesthesia products. It also provides diagnostic products, such as immunoassay systems; chemistry systems; assays used for screening and/or diagnosis for drugs of abuse, cancer, therapeutic drug monitoring, fertility, physiological, and infectious diseases; instruments that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infections agents; genomic-b ased tests; hematology systems and reagents; and point-of-care diagnostic systems and tests for blood analysis. In addition, the company offers a line of pediatric and adult nutritional products. Further, it provides coronary, endovascular, vessel closure, and structural heart devices, such as drug-eluting stent systems, coronary metallic stents, balloon dilatation products, coronary guidewires, vessel closure devices, carotid stent systems, percutaneous valve repair systems, and drug eluting bioresorbable vascular products. Additionally, the company provides blood glucose monitoring meters, test strips, data management software, and accessories for people with diabetes; and medical devices for the eye, including cataract surgery, lasik surgery, contact lens, and dry eye products, as well as branded generic pharmaceutical products. Abbott primarily serves retailers, wholesalers, hospitals, and health care facilities. Abbott was founded in 1888 and is headquartered in Abbott Park, Illinois.
Advisors' Opinion:- [By Dan Carroll]
Take a look around the top device companies reporting this week, and you'll see a picture of lackluster growth. Johnson & Johnson (NYSE: JNJ ) , one of the biggest names in health care, saw double-digit growth from its medical device department, but only because of its $12 billion acquisition of orthopedics powerhouse Synthes last year. Fellow diversified medical firm Abbott Labs' (NYSE: ABT ) medical device sales fell more than 4% despite its dominant position in the stent industry. St. Jude Medical (NYSE: STJ ) also saw sales decline 3% at a constant currency, even as the company managed to grow earnings by more than 5% by cutting costs.
Best Medical Companies To Buy For 2014: Mobile TeleSystems (MBT)
Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Armenia, and Belarus. The company provides a range of mobile and fixed line voice and data telecommunications services, including transmission, broadband, pay-TV, and various value-added services; and sells equipment and accessories. It also offers network access services, including mobile cellular voice and data communication services; automatic roaming services; GPRS and Internet access services; and 3G technology. In addition, the company�s services include the design, construction, and installation of local voice and data networks capable of interconnecting with fixed line operators; installation and maintenance of cellular payphones; lease of digital communication channels; and provision of access to open computer databases and data networks, including the Internet, as well as video conferencing, and fixed, local, and long-distance telecommunications services. Its value-added services comprise call divert/forwarding, caller ID and anti-caller ID display, conference calling, WiFi, GPRS, intelligent call assistant, APN remote access point, fixed mobile convergence, enhanced data rates for GSM Evolution, call barring, SMS, mobile office, voicemail, mobile banking, wireless application protocol, MTS-Connect, SIM-browser, point-to-point transfer, unstructured supplementary services data, downlink packet access, mobile TV, call waiting, MMS, ring tones, missed call alert, itemization of monthly bills, information and directory, international access, WEB and WAP portal, customer care system, ring back tone, collect call, and location-based services. As of December 31, 2011, the company had a mobile subscriber base of approximately 101.14 million. It has a strategic partnership with Vodafone. The company was founded in 1993 and is headquartered in Moscow, the Russian Federation.
Advisors' Opinion:- [By Rich Smith]
Over in Russia, market-leading cell phone provider Mobile TeleSystems (NYSE: MBT ) has just confirmed that, as of 2012, it no longer sells Apple's (NASDAQ: AAPL ) new iPhone models to its customers directly. The company does still stock, and sell, some older iPhone models. But for iPhone5 and on up, MTS now answers phone calls from Apple with a Spasibo, ne nada. ("Thanks, but no thanks.")
- [By Dan Radovsky]
VimpleCom, a joint venture of Norwegian telecom Telnor and the Russian Alfa Group, operates under the BeeLine brand in Russia. BeeLine has joined the two other ex-iPhone carrying Russian heavyweight mobile carriers, Megafon and Mobile TeleSystems (NYSE: MBT ) , and not renewed its iPhone contract with Apple.
Top 5 Canadian Companies To Own For 2014: Rhino Resource Partners LP(RNO)
Rhino Resource Partners LP produces, processes, and sells coal of various steam and metallurgical grades in the United States. The company holds interests in various surface and underground coal mines located in Central Appalachia, Northern Appalachia, the Illinois Basin, and the Western Bituminous region. As of December 31, 2010, it operated 10 mines, including 5 underground and 5 surface mines located in Kentucky, Ohio, and West Virginia. The company markets its steam coal primarily to electric utility companies as fuel for their steam-powered generators; and metallurgical coal for steel and coke producers. It also engages in mining limestone from reserves located at its Sands Hill mining complex and sells it as aggregate to various construction companies and road builders. The company was founded in 2003 and is based in Lexington, Kentucky.
Advisors' Opinion:- [By Dorothee Tschampa]
Volkswagen AG (VOW) (VOW), PSA Peugeot Citroen (UG) and Renault SA (RNO) (RNO), Europe�� three largest carmakers, all dropped 5 percent or more after preliminary data showed Chinese manufacturing is unexpectedly contracting.
- [By Namitha Jagadeesh]
Peugeot gained 3.7 percent to 10.61 euros after two people familiar with the matter said CEO Philippe Varin plans to step down next year and hire former Renault SA (RNO) Chief Operating Officer Carlos Tavares as his replacement. Pierre-Olivier Salmon, a Peugeot spokesman, declined to comment. Europe�� second-largest carmaker is also likely to benefit from the Iran accord. Peugeot sold 458,000 vehicles in Iran in 2011, before the trade sanctions, making it the company�� second-biggest market after France.
Top 5 Canadian Companies To Own For 2014: Grupo TMM S.A.(TMM)
Grupo TMM, S.A.B., together with its subsidiaries, operates as an integrated logistics and transportation company in Mexico. The company offers maritime transportation services, including offshore vessels, which offer transportation and other services to the Mexican offshore oil industry; tankers that transport petroleum products in Mexican waters; parcel tankers, which transport liquid chemical and vegetable oil cargos from and to the United States and Mexico; and tugboats that provide towing services at the port of Manzanillo, Mexico. It operates a fleet of 46 vessels, which comprise product and chemical tankers, harbor tugs, and various offshore supply vessels. The company also operates two Mexican port facilities, Tuxpan and Acapulco, as well as provides port agent services to vessel owners and operators in the Mexican ports. Its logistics business provides trucking services to manufacturers consisting of automobile plants, and retailers, as well as offers logistical f acilities in industrial cities and railroad hubs in Aguascalientes, Toluca, Puebla, Veracruz, Nuevo Laredo, Cuernavaca, Mexico City, Monterrey, Manzanillo, Ensenada, and Altamira. The company's logistics services include consulting, analytical, and logistics outsourcing; logistics network analysis; logistics information process design; trucking, intermodal transport, and auto haulage services; warehousing and bonded warehousing facility management; supply chain and logistics management; product handling and repackaging; local pre-assembly; maintaining and repairing containers; and inbound and outbound distribution using truck transport. Grupo TMM was founded in 1955 and in headquartered in Mexico City, Mexico.
Monday, December 16, 2013
Is GlaxoSmithKline An Attractive Investment?
With shares of GlaxoSmithKline (NYSE:GSK) trading around $51, is GSK an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementGlaxoSmithKline is global healthcare group engaged in the discovery, development, manufacturing, and marketing of pharmaceutical products. These products are vaccines, over-the-counter medicines, and health-related consumer products. GlaxoSmithKline's principal pharmaceutical products are medicines in these areas: respiratory, antivirals, central nervous system, cardiovascular and urogenital, metabolic, antibacterials, oncology and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV.
GlaxoSmithKline is investing early in India's booming pharmaceutical market. The company announced that it is initiating a $1 billion voluntary open offer for a higher stake in its Indian drug unit, GlaxoSmithKline Pharmaceuticals Ltd. GlaxoSmithKline PLC, the British unit of the company, sees a huge surge in the demand for pharmaceuticals in the Indian market, one that PricewaterhouseCoopers estimates as being worth $12 billion, all told. The move would increase the British unit's ownership of its Indian subsidiary to nearly 75 percent, up from 50.1 percent previously, according to a Glaxo press release.
T = Technicals on the Stock Chart Are StrongGlaxoSmithKline stock has trended higher in the past several years. The stock is currently trading near highs for the year and looks set to continue this path. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, GlaxoSmithKline is trading between its rising key averages, which signal neutral price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of GlaxoSmithKline options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| GlaxoSmithKline options | 15.50% | 36% | 33% |
What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts, as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| January Options | Average | Average |
| February Options | Average | Average |
As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral over the next two months.
On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.
E = Earnings Are Decreasing Quarter-Over-QuarterRising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on GlaxoSmithKline’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for GlaxoSmithKline look like and more importantly, how did the markets like these numbers?
| 2013 Q3 | 2013 Q2 | 2013 Q1 | 2012 Q4 | |
| Earnings Growth (Y-O-Y) | -12.65% | -66.67% | -28.21% | -26.92% |
| Revenue Growth (Y-O-Y) | -1.86% | -34.80% | -7.20% | -1.91% |
| Earnings Reaction | -0.11% | 0.38% | 0.01% | 0.73% |
GlaxoSmithKline has seen decreasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been optimistic about GlaxoSmithKline’s recent earnings announcements.
P = Average Relative Performance Versus Peers and SectorHow has GlaxoSmithKline stock done relative to its peers, Pfizer (NYSE:PFE), Merck (NYSE:MRK), Novartis (NYSE:NVS), and sector?
| GlaxoSmithKline | Pfizer | Merck | Novartis | Sector | |
| Year-to-Date Return | 17.09% | 20.39% | 10.11% | 21.44% | 18.25% |
GlaxoSmithKline has been an average relative performer, year-to-date.
ConclusionGlaxoSmithKline is a healthcare group that engages in many aspects of the pharmaceutical business around the world. The company is investing early in India's booming pharmaceutical market. The stock has trended higher in recent years and is currently trading near highs for the year. Over the past four quarters, investors have been optimistic, as earnings and revenue figures have been declining. Relative to its peers and sector, GlaxoSmithKline has been an average year-to-date performer. WAIT AND SEE what GlaxoSmithKline does this coming quarter.
Sunday, December 15, 2013
Is Apple Beating Google at Its Own Game?
Apple (NASDAQ: AAPL ) has devices with integrated hardware and software. Google (NASDAQ: GOOG ) has search and advertising. This dichotomy has existed since the dawn of time (this may be an exaggeration).
For the most part, the two competing titans have mostly acknowledged each other's respective strengths in their core businesses, even if they dip their toes in to compete a little from time to time. You'd normally think it impossible for Nexus devices to outsell iDevices, or Apple to beat Google in advertising. Well, you'd be partially wrong with the latter.
According to a recent report from MoPub, iOS is beating Android in mobile ad market share, grabbing 75% of advertiser spending. That's when combining iPhone, iPad, and iPod Touch ad spending to total Android ad spending.
Source: MoPub via AppleInsider.
The iPhone alone gobbles up half of the market, with Android claiming a quarter. Some of Android's weakness relates to the slow uptake of Android tablets, with MoPub estimating ad spending in that segment at less than 1%.
The ad platform operator believes that iOS trumps Android in two important ways, at least as far advertisers are concerned. iOS users have been shown time and time again to have a higher propensity to spend money, which makes them more valuable to advertisers. iOS also boasts more "rich media" ads that tend to be more engaging and yield higher click-through rates.
MoPub is designed for publishers to manage ad inventory on iOS and Android, so the report doesn't necessarily represent the broader market. The figures seemingly contradict a separate report recently released by IDC on the mobile display ad market, which put Big G firmly on top, and Apple in No. 3 behind Millennial Media.
Still, MoPub's findings suggest that there are some ways in which Apple is beating Google at its own game.
As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.
Saturday, December 14, 2013
Investors Keep Punishing Lululemon Athletica
Investors aren't done punishing Lululemon Athletica (LULU).
The yoga apparel maker disappointed investors Thursday when it said it would report far lower sales during the fourth quarter than investors had expected and cuts its full-year financial forecasts for the current year. In doing so, Lululemon erased the good will it had earned Tuesday, when it announced that its controversial founder, Chip Wilson, was out as chairman and a new CEO was in.
Investors sent the shares plunging, and Barrons.com weighed in bearishly on the stock, noting the challenges facing the new CEO (see Barron’s Take, “Lululemon: Bottom-Fishers Beware,” Dec. 12).
Today, the selloff continued amid a string of slashed earnings estimates, price target cuts and a downgrade by Credit Suisse.
At $59, Lululemon fell 2.3%, adding to yesterday's nearly 12% drop.
In a note published today, Credit Suisse analyst Christian Buss cut Lululemon from Outperform to Neutral and cut its price target by one-third to $59, calling the company's lowered expectations "a significant source of concern." He writes:
… we no longer think that product flow issues are holding back the comp significantly. Instead, we view it as increasingly likely that recent quality issues and communication missteps, as well as the increase in availability of lower-priced knock-offs of their core assortment are holding back demand. This suggests a structural change in the demand equation and suggests caution is in order going forwards.
Best Medical Companies To Invest In Right Now
Mizuho Securities analysts Bety Chen and Alex Pham cut their price target from $70 to $60. They wrote:
With weak 4Q guidance, which suggests further comp deceleration, we believe the company may continue to suffer from the intensifying promotional retail environment, particularly as LULU does note typically promote, as well as impact from further issues with product flow. While we are encouraged by opportunities within new product categories, men's, and the growth of ivivva, we remain sidelined until we can see a re-acceleration in comps and as we anticipate further investment may pressure margins in 4Q and beyond.
And Wedbush Securities cut its outlook on the stock from $75 to $68. Analyst Corinna Freedman writes:
Stock essentially de-risked, but likely range-bound through year-end… Mgmt continues to expect product flow issues to continue through 2014 and we believe top-line expectations for 2014 are now reset for the incoming CEO.
Friday, December 13, 2013
Madoff Five Years Later
It was the first global Ponzi scheme ever, spreading like a slow-moving virus from Manhattan to Palm Beach, Southern California and many points in between. It even extended overseas, notably to Europe and the Persian Gulf. The loss tally: $65 billion in paper wealth and $18 billion or more in cash.Bernard Madoff was almost certainly the biggest investment con man ever. But he wasn’t the first or the last. Many other significant scams have been uncovered since Madoff was nabbed five years ago this week. Inevitably, others are floating below the surface now. Who knows how many?
The Securities and Exchange Commission botched numerous chances to adequately investigate how Madoff could deliver consistent returns averaging 1 percent or so a month regardless of financial-market ups and downs.
But the real fault for Madoff’s spectacular success wasn’t inept or disinterested regulators. It was clueless investors.
Many people think that when you choose an investment advisor, you should first consider people you think you know and can trust, like family and friends.
Wrong. Crooks and even just incompetent, sometimes desperate people can lose any compunction about ripping off those closest to them. Just as Madoff did.
Despite his seemingly spotless reputation, or actually because of it, he stole from everybody, including those closest to him. Not because he needed the money, but simply because he could.
Investment swindlers invariably exhibit telltale signs of fraud, just as Madoff did. If you have an investment advisor now or are considering one, these are the key warning signs of potential trouble:
Red flag #1: The advisor has custody of clients’ assets. This gives the thief access to your money. And custody enables the advisor to inflate asset values and issue false statements.
Insist on assets held separately in your name, in custody at a major ! broker-dealer firm that’s not controlled by the investment advisor. Regular financial statements should come directly from the broker custodian, in addition to your advisor.
Avoid any investment manager who wants checks made out to him/her or a company he/she controls. The advisor can have a limited power of attorney to make investment decisions if you delegate that function. But that’s it.
Red flag #2: The investment performance is “too good to be true.” Scamsters claim consistently good returns not only to attract money, but also because investors who think they’re getting steady results every year, including those when the market is down, are less likely to withdraw their money.
But every true investment manager has down years and periods of underperformance compared with the market averages. And the market averages themselves are volatile.
The Standard & Poor’s 500 has returned about 10 percent annually on average since 1926 (including reinvested dividends). But there have been only three years since then when the return has fallen in the 9-11 percent range. So you should expect variable results, some up and some down.
Red flag #3: Unusually low management fees. Admittedly, this is not common because most investment managers charge too much, not too little. At best, rock-bottom fees likely mean the manager won’t do much for you. At worst, they’re just a way to entice you. They could also mean hidden sales commissions or other compensation.
Red flag #4: The investment strategy is “a secret” or “too complicated” to explain. Avoid any advisor who won’t provide an understandable explanation of what he or she does and what it means for you. You don’t need to understand all the details, but the big picture should be clear.
Red flag #5: The “advisor” projects exclusivity. Beware someone who’s playing hard to get or implying that you’d be lucky to g! ain accep! tance into a special group. The truth is, legitimate investment managers actively want your business.
Also be leery of the advisor who brags about his or her associations with the rich and famous and/or nonprofessional activities, such as favorite charities. Not only do these provide no benefit to you; they may well reduce the amount of time the manager spends on your investments.
A Final Caution
You need to do your own research, not only to ensure that any investment program is legitimate, but also that it’s right for you. Don’t blindly accept a recommendation from a friend, business associate or family member.
An investment advisor generally should be registered with the SEC or individual states. Check sec.gov for the advisor’s form ADV, which discloses information about the firm, including any disciplinary actions. Such advisors are legally required to act in a client’s best interests. Stockbrokers are required only to recommend suitable investments. You can check them at finra.org.
Thursday, December 12, 2013
5 Monthly Dividend Stocks to Snag in 2014
Popular Posts: 7 Tax Tips to Use Before 2013 Ends5 Stocks to Buy and Hold ForeverUnder New CEO, GM Stock Looks Great Heading Into 2014 Recent Posts: 5 Monthly Dividend Stocks to Snag in 2014 MasterCard Stock Split Isn’t the REAL News for MA Stock The 5 Hottest Emerging Market ETFs for 2014 View All Posts Even the best dividend stocks tend to have one major disconnect: Most of us pay our bills on a monthly cycle, yet most stocks that pay dividends do so only once per quarter. This can make budgeting a headache and adds an extra level of planning.
And aside from budgeting concerns, there is another major reason why monthly dividend stocks are preferable: compounding. If you reinvest your dividends in additional shares instead of using the income for current needs, you compound your wealth significantly faster, as the number of shares paying you a dividend rises every single month.
On a $100,000 portfolio, this might amount to a couple hundred bucks over the course of a single year. But remember, compounding is not linear; it's exponential. Over the span of an investing lifetime, that "couple hundred bucks" from monthly dividend stocks can turn into tens of thousands of dollars. (If you want to see how the math works, check out Accounting Coach.)
Several income-focused mutual funds and closed-end funds do, in fact, pay monthly. But most are concentrated in low-yielding bonds, and if you're like me, you prefer to hand pick the best dividend stocks for both income growth and capital appreciation.
The good news: There are actually quite a few monthly dividend stocks to choose from. Let's take a look at some of my favorites.
Best Monthly Dividend Stocks - Realty Income
The first of our monthly dividend stocks is a REIT that calls itself the “Monthly Dividend Company” — Realty Income (O).
Realty Income paid its first dividend in 1970, before it was publicly traded, and hasn't slowed down since. It's paid 519 consecutive monthly dividends and raised its dividend 73 times — and in 64 consecutive quarters. That definitely makes Realty Income not just one of the best monthly income stocks, but one of the best dividend stocks period.
Since 1994, when Realty Income started trading on the NYSE, the REIT's annualized dividend has risen from 90 cents per share to $2.18 per share. At its current price, that amounts to a dividend yield of 5.9%.
Realty Income is one of those rare monthly dividend stocks that I believe you can truly buy, put in a drawer, and forget about for years. As a conservative, triple-net REIT, it's what I would call an “Armageddon-proof” investment. It owns a diversified portfolio of 3,800 properties across 49 states that are rented under long-term leases primarily to high-quality tenants.
The “typical” property for Realty Income would be your local Walgreens (WAG) or CVS (CVS) pharmacy — a high traffic, highly visible location that you pass on your daily commute. And under a triple-net lease, it is the tenant’s responsibility to take care of the property and to pay the taxes and expenses. The landlord's only role is to collect the rent check. Not bad work, if you can find it.
I recently listed Realty Income as a stock you can “buy and hold forever,” and I would reiterate that recommendation today.
Best Monthly Dividend Stocks - American Capital Realty Properties
Next on the list of monthly dividend stocks is one of Realty Income's upstart competitors, American Capital Realty Properties (ARCP).
I call ARCP an “upstart” due to its short trading history (it's only been trading since 2011). But the truth is, after its merger with Cole Properties (COLE), ARCP will be the largest triple-net REIT by market cap, and its total square footage will be nearly double that of Realty Income. And while ARCP stock has a short history, its executive team has an average of 20 years experience in the industry.
Because of its shorter trading history, this monthly dividend stock trades at a decent-sized discount to Realty Income. Based on its last monthly dividend of 8 cents, ARCP is one of the best dividend stocks, yielding 7.6%. That kind of yield is hard to come by these days unless you're willing to accept some pretty significant risk.
Writing for Barron's earlier this month, Vito Racanelli suggested that ARCP stock was 20% to 40% undervalued relative to its peers. I would agree, but I would also mention that I consider its peers (such as Realty Income) to be attractively priced as well.
If you're buying the stock for income, capital appreciation is a secondary concern. Still, no one complains when an income stock (especially one of our monthly dividend stocks) ends up generated high capital gains.
Best Monthly Dividend Stocks - Banco Bradesco and Banco Itau
And speaking of top dividend stocks with high capital gains potential, next on the list of are Brazilian banking groups Banco Bradesco (BBD) and Banco Itau (ITUB) — two monthly dividend stocks you must consider.
Sure, it's a little bit of a stretch to call Bradesco and Itau true “monthly dividend stocks.” Both are indeed stocks that pay dividends monthly, but the monthly dividends are pretty modest (the last monthly dividends were each under 1 cent). Much larger dividends are paid semiannually, giving the banks respectable trailing 12-months yields of 4.9% for BBD stock and 3.9% for ITUB stock. Still, the fact that these are monthly dividend stocks instills discipline in management, and I respect the nod to shareholder friendliness.
It has not been a kind year for investors in Latin America and in Brazil in particular. Most stock averages in the region are down for the year. The Brazilian currency, the real, started 2013 grossly overpriced, and slowing in China has taken the wind out of Brazil's sails.
But with 2013 now drawing to a close, the real is reasonably priced again, and much of the hot money has fled the region. If China picks up steam in 2014 — and I expect that it will — then I expect the Brazilian economy to come back to life.
And I expect investors to rediscover the region, along with these two monthly dividend stocks.
Best Monthly Dividend Stocks - Whitestone REIT
Returning to U.S. shores, the next of our monthly dividend stocks is Whitestone REIT (WSR), a smaller REIT that specializes in shopping centers.
I should start by making one point very clear: while I like Whitestone, it is a very different kind of REIT than Realty Income or American Realty Capital Properties. Its property portfolio is far less geographically diversified (with properties in just three states), and it is a much smaller company by market cap ($290 million).
Still, despite its small size, Whitestone has been inking deals with some heavy hitters of late, including Wal-Mart (WMT). And with the U.S. economy slowly shifting back into growth mode, Whitestone should decent rent growth going forward in its retail properties.
Whitestone currently yields 8.7%, making it the highest-yielding name on this list of monthly dividend stocks. Part of this is due to its lack of dividend growth; the stock has paid 9.5 cents per month since September of 2010.
I'm OK with that, though. As investors in monthly dividend stocks, we can collect that monthly dime per share indefinitely, reinvesting it to grow our share count.
Best Monthly Dividend Stocks - Student Transportation Inc.
Finally, for an off-the-wall pick, consider picking up shares of Student Transportation (STB), North America's third-largest operator of school buses. Student Transportation doesn’t just operate more than 10,000 school buses and transport more than a million students daily across the United States and Canada. It’s a monthly dividend stock with a solid yield.
STB stock currently yields about 8.4%. But this is a riskier play than the other monthly dividend stocks on this list for a couple reasons. First, because the company has been aggressively expanding in recent years and has all of the expenses associated with rapid expansion, Student Transportation has been paying a decent chunk of its dividend from new debt issuance. This puts the dividend at risk if the capital markets tighten up or if expected growth fails to materialize.
And secondly, a decent chunk of the company's sales come from Canada, where it is headquartered, so currency risk is also an issue. I believe there is a good chance that the dollar will rally in 2014 as the Fed scales back its quantitative easing. This could cause Student Transport's dividend to fall slightly in U.S. dollar terms.
Still, while a little riskier than some of the other monthly dividend stocks, I like STB stock as a portfolio diversifier and I believe that its dividend is safe for at least the next several quarters.
Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long O, ARCP and WMT. Click here to receive his FREE weekly e-letter covering market insights, global trends, and the best stocks and ETFs to profit from today's exciting megatrends.
Wednesday, December 11, 2013
What if Mexico's Energy Bill Goes Through?
If a huge energy bill and change in the constitution passes in Mexico, writes MoneyShow's Jim Jubak, also of Jubak's Picks, the companies that stand to gain the most, may be the ones with all the equipment.
Certainly it's too early to say that a historic energy bill—and constitutional amendment—will pass Mexico's legislature. Mexican senators have just begun to debate a bill that would amend the constitution and create a system that permits foreign oil companies to invest in Mexico's oil industry for the first time since the sector was nationalized in 1938. The current bill would allow private companies to own part of the production—or part of the profit—from Mexican oil wells, while keeping ownership of Mexican oil reserves in the hands of the government owned national oil company Petroleos Mexicanos, or Pemex. Foreign oil companies would not be allowed to book state-owned reserves for accounting purposes—but would be able to put cash flow from production on their balance sheets. A system like this would give Mexico, which has seen production fall by 25% since 2004, the capital it needs to drill in deeper parts of the Gulf of Mexico, to modernize oil recovery methods used in its existing fields, and to begin to exploit the country's own oil and gas shale geologies. (The effort is crucial to Mexico's economy, which has seen a manufacturing recovery, hobbled by energy costs far higher than those just across the border, and by electricity rates, 25% higher than in the United States.)
The bill is contentious. Mexico's ownership of its own oil is, for many Mexicans, a foundation of the country's economic independence from the United States. Street protests are likely to be a continuing fact of life in Mexico City, while the legislature debates the bill. The government of President Enrique Pena Nieto has set the goal of passing a bill before Christmas.
Despite the protests, and the deep ambivalence many Mexicans feel about letting the big international oil companies—that dominated the country's oil industry—back in the door, I think the current legislation has a very good chance of passing. It has been crafted to avoid those points most likely to invoke that history—and the need is very pressing. Mexico gets a third of its budget from Pemex and, therefore, the downward trend in oil production isn't just an issue for the economy as a whole, but also goes right to the ability of the government to fund its operations.
If the bill does pass, as I expect, what might an investor want to own? All the big international oil producers will move to invest in Mexico's fields. For most of these, though, even big increases in Mexican production isn't going to make a huge impact on their balance sheets. Exxon Mobil (XOM), for example, is just too big to get much leverage out of Mexico. (The two international oil producers that are likely to get the biggest leverage out of investing in Mexico are Chevron (CVX) and Anadarko (APC)—because their current finds in the Gulf of Mexico fit together, in my opinion, so well with reserves, and potential reserves, owned by Pemex.
But I think the biggest beneficiaries of a change in Mexico's constitution, that allows foreign investment in Mexico's oil industry, will be companies that sell equipment to the oil industry.
Page 1 | Page 2 | Next PageTuesday, December 10, 2013
Another Bitcoin Virtual Currency Crush from China, via Baidu
Baidu, Inc. (NASDAQ: BIDU) is likely one of the key reasons that Bitcoin has been able to rise handily and gain more adoption. After all, when the largest search engine site in China started accepting Bitcoin payments it was a mark of adoption. Now we have word that Baidu is suspending the acceptance of Bitcoin for payments.
The news is running on the ticker on Bloomberg TV that on Baidu has suspended accepting Bitcoin due to volatility in its value. A suspension may not be a permanent ban, but it is far from a more widespread adoption.
Just on Thursday came word that Bank of America Corp. (NYSE: BAC) even tried to project an upside fair value of up to $1,300 based upon numerous calculations and a maximum valuation of $15 billion. As a reminder, there are a maximum of 21 million Bitcoins allowed and the coins are still being mined.
The Mt. Gox website is an exchange for Bitcoin and the last trade we have seen was at $877.46 after having been at a high of $1,155.00 earlier on Friday. That is a drop of 30% in a single day. For a real nation’s currency to rise or fall 30% in any one day it would require one of two likely scenarios: 1) a massive government currency devaluation or 2) a major war or a nuclear event.
Earlier this week we also saw former Fed Chairman Alan Greenspan come out of the crypt for an interview were he called Bitcoin a bubble.
24/7 Wall St. has been more than puzzled by Bitcoin’s rise, and it fall. Bitcoin is still operating without its buyers and sellers knowing who created it. It has no nation behind it, so it cannot tax people, it has no laws protecting it from outsiders, it cannot issue laws, and it has no armed forces to defend its interests.
Baidu may have just smartened up here by realizing that it cannot adequately shield itself from Bitcoin volatility. The currency markets are the most liquid markets in the world. The same might not prove to be true for a virtual currency that still has international regulators undecided upon how to treat it.
Our inquiries into Baidu have not yet been answered. Does this look like a currency chart to you below?
Monday, December 9, 2013
Bargain-Hunters Put a Dent in November Retail Sales
Top Canadian Stocks To Watch Right Now
A. Guns B. Knives C. Pepper spray bomb
Saturday, December 7, 2013
How To Play The Shale Boom's Next Phase
The low-pitched thrum of natural-gas-fired engines vibrates across the rural valley in Pennsylvania's Susquehanna County, where Cabot Oil & Gas Cabot Oil & Gas is drilling a new well to tap the Marcellus shale formation a mile underground.
As workers swing drilling pipe into the 135-foot-tall rig, a parade of trucks rumbles up the narrow dirt road from Montrose, Pa. Until the shale boom Montrose was best known for its bluestone quarries. Now the roads in this northeastern Pennsylvania county are filled with heavy trucks hauling drilling fluids, pipe and the thousands of tons of sand that drillers pump into the ground to open up fissures in the granite-hard Marcellus and let the gas flow.
Cabot's Pennsylvania wells are natural gas gushers, expected to produce an average of 14 billion cubic feet over a well's 50-year life span, 14 times as much as a typical Oklahoma well. Already the Marcellus shale, extending from New York to West Virginia, is supplying 12 billion cubic feet a day, or almost 15% of U.S. gas demand.
It's well known that the combination of newer horizontal drilling with the 60-year-old practice of hydraulic fracturing has unlocked huge new reserves of oil and gas across North America. What's less well appreciated is how enormous those reserves are–North Dakota's Bakken shale will soon be pumping out nearly twice as much crude per day as Prudhoe Bay in Alaska–and the hundreds of billions of dollars that need to be spent on infrastructure to bring all this oil and gas to market.
"You're going to need pipelines, you're going to need storage and in some cases you're going to need the existing pipelines reversed," says Aaron Visse, who manages the $90 million (assets) Forward Global Infrastructure Fund in San Francisco. "We built this thing the wrong way, and now we've got to adjust."
Friday, December 6, 2013
Judge: Goldman Sachs silent about rogue trader
NEW YORK (AP) — A former Goldman Sachs trader was sentenced on Friday to nine months in prison for wire fraud by a judge who took sharp aim at both Goldman and the government, questioning why it took them so long to bring the misconduct to light.
Matthew Taylor had admitted in a guilty plea this year that he concealed an unauthorized $8.3 billion trading position in 2007. He told Goldman within 36 hours but escaped criminal charges until this year.
"Goldman was silent about Taylor's lies," U.S. District Judge William Pauley said in federal court in Manhattan.
The investment banking firm fired Taylor but didn't disclose the full extent of his misconduct, clearing the way for him to continue as a trader for Morgan Stanley for another four years, the judge said.
"So much for Goldman's concerns about the credibility of the financial markets," he said.
The judge also suggested the U.S. attorney's office in Manhattan and federal regulators went after the rogue trader years after his offense largely for publicity. He accused prosecutors of crafting an artificially low sentencing recommendation to secure a quick plea deal.
"Everything about this case is sad," the judge said. "Your employer's response was sad. Your conduct was sad. The government's conduct — it's sad."
The judge said that by his own calculations of sentencing guidelines, Taylor could have received several years behind bars for making Goldman Sachs suffer a $118 million loss. But too much time had passed for that to make sense, he added.
"Justice has to be swift to mean anything," he said.
Along with the nine-month prison term, the judge ordered the MIT graduate to complete 400 hours of community service by tutoring children from low-income families in math.
A Goldman spokesman responded Friday by insisting that it had filed timely paperwork reporting that Taylor was fired for "inappropriately large proprietary futures positions in a firm trading account."
Top Low Price Stocks To Watch For 2014
The U.S. attorney's office said in a statement it learned of Taylor's fraud in November 2012 and charged him less than five months later, in April 2013.
Taylor, 35, of West Palm Beach, Florida, has said he accumulated and concealed the massive trading position to enhance his reputation within Goldman and secure a bigger bonus.
Taylor will remain out on bail until early February, when he was ordered to begin his sentence.
Thursday, December 5, 2013
Eurozone Has A Long Path Ahead
Top Penny Stocks To Watch For 2014
There are three important issues that were raisaed by Draghi at the conference in Frankfurt today.
"We may experience a prolonged period of low inflation," Draghi said. The projections for inflation were revised down 0.2 points to 1.1% in 2014, while its first forecast for 2015 predicted consumer prices rising 1.3%. The midpoint for this year was also down 0.1 point to 1.4% Projections though, for GDP growth in 2014 were raised 0.1 point from September's forecast to 1.1%, up from an unchanged expectation of -0.4% this year. GDP grwoth for 2015 was recevering further to 1.5%. Bank lending in the euro area to companies and households shrank 2.1 percent in October from a year earlier, the 18th conssecutive month of declines.As a result having in mind that cash inflows are not ijected in the real economy and the fact that inflation is low indicating that demand for goods in the EZ is deteriorated, isn't it obvious to say that the economy has still a long path ahead?
Also another important argument is that the issue of even lower rates has not closed yet. Mario is constantly mentions that if the CPI continues to decline a new rate would be still on the epicenter.
Considering that the rate cut issues are still on the back of Dragh's head (including also the potential negative deposite rates) and the fact that LTRO money are actually invested in the internal of the economy, the big questions is how viability and growth will be induced in the EZ? and how attractive the EZ for the investors is for the short term? As it is revealed, the fact that the rate of gwroth and improvement in EZ is very low, signifies that investors should concern about the economy more for the long run.
souces:
Bloomberg
Mni news
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
Posted-In: Eurozone Economics Markets
Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? Most Popular The Apple - China Mobile Deal By The Numbers Why Tesla Was Up 16 Percent Tuesday The 10 Apple Acquisitions of 2013 J.C. Penney: What The Analysts Are Saying #PreMarket Primer: Thursday, December 5: Apple & China Mobile Ink Deal 3 Reasons Every Family Office Should Own Petrobras Brasileiro Related Articles () Eurozone Has A Long Path Ahead This Friday's NFP Is Important, But It's Not The Most Crucial One Should We Employ Indicators Used by the Majority? Market Wrap For December 5: Market Participants Anxiously Await Tomorrow's Employment Report Silica Holdings Announces 4.526M Share Offering by GGC USS Holdings Finisar Jumps 4% After Q2 Earnings Beat, Strong Guidance View the discussion thread.Wednesday, December 4, 2013
3 Stocks Under $10 in Breakout Territory
DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.
>>5 Stocks Set to Soar on Bullish Earnings
Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.
Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.
>>5 Breakout Trades for a Santa Claus Rally
With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.
Medgenics
Medgenics (MDGN) is a medical technology and therapeutics company engaged in providing sustained protein therapies to treat chronic diseases and conditions. This stock closed up 4.8% to $6.54 in Tuesday's trading session.
Tuesday's Range: $6.31-$6.67
52-Week Range: $3.50-$10.05
Thursday's Volume: 107,000
Three-Month Average Volume: 106,648
>>5 Rocket Stocks to Buy in December
From a technical perspective, MDGN spiked sharply higher here right above some near-term support at $6.15 with above-average volume. This move is starting to push shares of MDGN within range of triggering a near-term breakout trade. That trade will hit if MDGN manages to take out Tuesday's high of $6.67 to its 50-day moving average of $6.81 with high volume.
Traders should now look for long-biased trades in MDGN as long as it's trending above some key near-term support levels at $6.15 to $5.83 and then once it sustains a move or close above those breakout levels with volume that hits near or above 106,648 shares. If that breakout triggers soon, then MDGN will set up to re-test or possibly take out its next major overhead resistance levels at $7.50 to $8.
InnerWorkings
InnerWorkings (INWK) is a provider of managed print and promotional procurement solutions to corporate clients across a range of industries. This stock closed up 1.2% to $6.56 in Tuesday's trading session.
Tuesday's Range: $6.42-$6.64
52-Week Range: $5.54-$15.80
Tuesday's Volume: 558,000
Three-Month Average Volume: 511,438
>>5 Stocks Under $10 Set to Soar
From a technical perspective, INWK spiked modestly higher here with above-average volume. This move is starting to push shares of INWK within range of triggering a major breakout trade. That trade will hit if INWK manages to take out some near-term overhead resistance levels at $7 to $7.21 with high volume.
Traders should now look for long-biased trades in INWK as long as it's trending above some near-term support at $6 and then once it sustains a move or close above those breakout levels with volume that hits near or above 511,438 shares. If that breakout triggers soon, then INWK will set up to re-fill some of its previous gap down zone from November that started at $9.75. Some possible upside targets if INWK gets into that gap with volume are its 50-day at $8.58 to $9.
Acorn Energy
Acorn Energy (ACFN) is a holding company which provides digital solutions for energy infrastructure asset management. This stock closed up 5.5% to $3.79 in Tuesday's trading session.
Tuesday's Range: $3.60-$3.85
52-Week Range: $2.85-$9.90
Tuesday's Volume: 317,000
Three-Month Average Volume: 315,325
>>5 Stocks Poised for Breakouts
From a technical perspective, ACFN spiked sharply higher here right above some near-term support at $3.50 with above-average volume. This move is quickly pushing shares of ACFN within range of triggering a near-term breakout trade. That trade will hit if ACFN manages to take out some near-term overhead resistance levels at $3.97 to its 50-day moving average of $4 with high volume.
Traders should now look for long-biased trades in ACFN as long as it's trending above some key near-term support levels at $3.50 or at $3.21, and then once it sustains a move or close above those breakout levels with volume that hits near or above 315,325 shares. If that breakout hits soon, then ACFN will set up to re-test or possibly take out its next major overhead resistance levels at $4.24 to $4.64. Any high-volume move above $4.64 will then give ACFN a chance to tag $5.50 to $6.
To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
RELATED LINKS:
>>4 Stocks Rising on Big Volume
>>5 Hated Earnings Stocks You Should Love
>>5 Short-Squeeze Stocks Ready to Pop
Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including
CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.Monday, December 2, 2013
Hot Gold Stocks To Buy For 2014
The big banks have gone to considerable lengths to mend the weaknesses that they were in before, during and after the recession. The public perception of the big banks is not very highly regarded. Now the banks are apparently at risk of yet another credit rating downgrade. Late on Thursday came word out of Moody’s Investors Service that the credit ratings agency has placed the senior and subordinated debt ratings of the six largest U.S. bank holding companies on review “as it considers reducing its government (or systemic) support assumptions to reflect the impact of U.S. bank resolution policies.”
Moody’s signaled that the four on review for downgrade are Goldman Sachs Group Inc. (NYSE: GS)�and Morgan Stanley (NYSE: MS), both of which are bank holding companies with no retail banking operations, as well as J.P. Morgan Chase & Co. (NYSE: JPM)�and Wells Fargo & Co. (NYSE: WFC).
Where the rating changes become a wild card are in Bank of America Corp.�(NYSE: BAC) and Citigroup Inc. (NYSE: C). These two were placed on “review direction uncertain” as Moody’s “considers the potentially offsetting influence of improvements in the standalone credit strength of their main operating subsidiaries, the ratings on which were simultaneously placed on review for upgrade.”
Hot Gold Stocks To Buy For 2014: Goldcorp Incorporated(GG)
Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.
Advisors' Opinion:- [By Dan Caplinger]
In the longer term, IAMGOLD could potential challenges from higher taxes on some of its holdings. The Canadian province of Quebec is considering changing the current 16% profit tax either to what amounts to a gross revenue tax or to a more progressive profit tax with higher rates on high-margin mining operations. Under current conditions, those taxes might not have much effect either on IAMGOLD or rivals Agnico-Eagle (NYSE: AEM ) and Goldcorp (NYSE: GG ) , both of which also have projects in the province, but it's hard to predict how a changes might affect future results if they take effect.
- [By Hebba Investments]
Therefore the situation is still very bullish for investors in physical gold and the gold ETFs (GLD, CEF, and PHYS). Investors interested in leveraging this situation into higher potential profits may also consider buying gold miners such as Randgold (GOLD), Goldcorp (GG), Yamana Gold (AUY), and any of the other gold miners. Finally, those willing to shoulder much larger risks may consider some of the exploration and micro-cap companies that offer significant profits at a high risk such as Chesapeake Gold (CHPGF.PK), Pretium Resources (PVG), Western Copper (WRN), or any other of the junior exploration companies. Though investors should keep in mind that gold mining companies and explorers do not always rise with a rising gold price - do your research before you invest in the miners.
Hot Gold Stocks To Buy For 2014: CME Group Inc.(CME)
CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.
Advisors' Opinion:- [By Shauna O'Brien]
CME Group Inc (CME) reported on Wednesday that September volume average increased 10% from September 2012, while its third quarter volume average grew 11% from last year.
For September, volume averaged 13.1 million contracts per day, totaling 261 million for the month. Equity index volume in September averaged 2.9 million contracts per day, a 4% increase from last year. Equity index options volume was up 52% in September.
Third quarter volume average was 12 million per day, up 11% from a year ago.
CME Group shares were mostly flat during pre-market trading Wednesday. The stock is up 48% YTD.
- [By Mark Thompson]
The Chicago Mercantile Exchange (CME), which operates the world's biggest derivatives market, is asking investors to stump up more cash to trade in financial products that provide protection against rising interest rates.
- [By Ben Levisohn]
But even with markets trading in a range since July, there was plenty of action in individual stocks, even as earnings season nears an end. CME Group (CME), for instance, gained 4% to $74.44, its biggest move two months, after the exchange operator said trading volume in its Brent crude oil futures contracts climbed above 100,000 for the first time on Aug. 8. CME is trying to woo traders away from IntercontinentalExchange’s (ICE) dominant futures contract. Xerox (XRX), meanwhile, finished up 3.4% at $10.49 after Citigroup upgraded its stock to Buy from Neutral and the company announced that it would acquire a Canadian company.
5 Best Tech Stocks To Invest In Right Now: Goldman Sachs Group Inc.(The)
The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.
Hot Gold Stocks To Buy For 2014: Northgate Minerals Corporation(NXG)
Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada.
Hot Gold Stocks To Buy For 2014: Agnico-Eagle Mines Limited(AEM)
Agnico-Eagle Mines Limited, through its subsidiaries, engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico. The company primarily explores for gold, as well as silver, copper, zinc, and lead. Its flagship property includes the LaRonde mine located in the southern portion of the Abitibi volcanic belt, Canada. The company was founded in 1953 and is based in Toronto, Canada.
Advisors' Opinion:- [By vaninaegea]
In august, the Association of Equipment Manufacturers (AEM) published the mid-year review for the agricultural sector. Their findings point to a slowdown for the industry, highlighting a 9.5% decline on exports through the first half of 2013. Also, late soybean planting in the USA is expected to compound the industry�� slowdown. So, what are the prospects for AGCO (AGCO), CNH Global (CNH), and Deere & Co. (DE) under such conditions?
- [By Holly LaFon]
He increased his holdings in gold companies in the fourth quarter accordingly. Gold stocks he found attractive in the fourth quarter are: Novagold Resources (NG), Randgold Resources (GOLD), Iamgold Corp. (IAG), Barrick Gold Corp. (ABX), Agnico Eagle (AEM) and International Tower Hill (THM).
- [By Sally Jones]
The once-troubled Agnico Eagle Mines Ltd. (AEM) is hitting a new record for gold production in the third quarter at 315,828 ounces, according to the Financial Post, and the company�� executives are buying. Here�� a third quarter company update and a look at billionaire stakeholders of AEM, a stock that spiked 23.66% over the past five days.
- [By Itinerant]
Before we continue, we would like to give references to sources that we used liberally for this article: Brian Christie, VP Investor Relations at Agnico-Eagle (AEM), gave a talk at the Denver Gold Group Luncheon on May 6 in Toronto and the presentation can be viewed here. Andrew J Vigar of Mining Associates gave a keynote at the Mines and Money conference in Hong Kong in March 2013 and the presentation is here. The Visual Capitalist has uploaded a relevant presentation on the topic here. And the Break Away Digger has an interesting piece available here. These documents come with a recommendation for your weekend reading from your humble scribe.
Sunday, December 1, 2013
What's Behind the Amazing Surge in Bitcoin Prices
[Update: The positive comments about Bitcoin from numerous federal officials at Monday's Senate hearing, in addition to a letter from Fed Chairman Ben Bernanke to the Homeland Security Committee saying that Bitcoins "may hold long-term promise," caused the digital currency to spike briefly to $900 Monday evening. As of Tuesday morning, however, Bitcoin prices on Mt. Gox had settled back to about $650.]
Anyone wondering why Bitcoin prices are rising need look no further than China.
Since the beginning of November, a massive spike in Chinese buying of the digital currency has almost single-handedly caused Bitcoin prices to triple.
When you look at the numbers, it's almost surreal.
At the start of November, one Bitcoin was worth about $213 on Japan-based Mt. Gox, the world's second-largest Bitcoin exchange. Today (Monday) one Bitcoin traded as high as $675.
Volume on BTC China, where Chinese yuan can be exchanged for Bitcoins, has risen 10-fold in just over a month. Volume jumped from 2,000 to 5,000 Bitcoins traded per day as recently as September to 40,000 to 60,000 Bitcoins traded per day in the past few weeks.
The spike has made BTC China the world's largest Bitcoin exchange by volume, surpassing Mt. Gox, which allows Bitcoin trades in U.S. dollars, euros, and more than a dozen other world currencies.
The sudden surge in Chinese interest in Bitcoin - mostly as buyers - is the primary reason why Bitcoin prices are rising so rapidly.
With the total number of Bitcoins in existence having just crossed the 12 million mark, that means the total value of the currency has soared from about $2.5 billion to about $8 billion in less than three weeks.
While some have dismissed Bitcoin as a fad, the virtual currency has slowly gained traction since its inception by an anonymous creator named Satoshi Nakamoto in 2008.
In the past couple of years, more and more businesses around the world, particularly in Europe, have begun to accept Bitcoin as a form of payment.
In fact, one of the events that triggered Chinese interest in Bitcoin was in late October when Baidu Inc. (Nasdaq ADR: BIDU), a search engine company even more dominant in China than Google Inc. (Nasdaq: GOOG) is in the United States, announced it would take Bitcoin.
But it was a much more dramatic development that sent Chinese in far larger numbers to the BTC China exchange...
Why Bitcoin Prices Are Rising in ChinaIn a very rare move, the Chinese government seems to be actually encouraging its citizens to invest in Bitcoin.
This is one of the most glaring oddities about the popularity of Bitcoin in China, as the Chinese government is not known for allowing rogue economic activity that it cannot control. But the government has done nothing to curb the Bitcoin craze.
In fact, shortly after Baidu made its October announcement, the official state television network CCTV broadcast an extremely favorable 30-minute documentary on the digital currency. And it's probably not a coincidence that the People's Daily newspaper published a positive story on Bitcoin at about the same time.
It's possible that Beijing sees Bitcoin - an international online currency beyond the control of any central bank - as a way to indirectly poke a few holes in the dominance of the U.S. dollar.
"China realizes that the yuan has to clear a lot of hurdles before it can become a reserve currency. If people start using and holding more Bitcoins in place of the dollar, it would likely lead to a less U.S.-centric global economy and that's what China wants," Kyle Drake, founder of CoinPunk, an open-source hybrid web wallet, told CNBC.
Top 10 Energy Companies To Own For 2014
Regardless of Beijing's motives, the double-barreled stamp of approval from the Chinese government sent the populace scurrying to buy as much Bitcoin as they could.
But that still leaves the question: Why? What do the Chinese love about Bitcoin?
The short answer is that it fills several needs.
"The main reason why Bitcoin has become big in China is because Chinese people are savers, and more people are seeing Bitcoin as a way to store and invest their money," Linke Yang, vice president of BTC China, told Agence France-Presse at a recent conference in Singapore.
One big problem that Bitcoin solves for the Chinese upper-middle class is that the Beijing government has made it difficult to move yuan outside of the country - Bitcoin can be transferred anywhere in the world with the click of a mouse.
Finally, much of the new wealth in China has almost no place else to go.
"Traditionally, high net-worth individuals and investors first go to the property market to invest and then the stock market, but since the property market is capped and controlled and stocks maybe aren't doing so well that's changing," Yang said.
While Bitcoin prices almost surely will not continue shooting up at the pace of the last few weeks, any correction will be mitigated by the keen interest of Chinese investors.
"The sky's the limit in some sense," Bobby Lee, a co-founder of BTC China, told TechCrunch. "The price eventually will settle down when there's a good balance between supply and demand, but clearly as more people are learning about Bitcoin, all that means is more people are becoming aware of it - and as they become aware they become comfortable buying some Bitcoin. A few hundred dollars or a few dollars. But everything adds to the push-up in price."
Editor's Note: Michael Robinson, Money Morning's Director of Technology Investing, is getting ready to release the most comprehensive Bitcoin guide ever created. This guide covers Bitcoin A to Z. Not only does it give you the full history of Bitcoin and the technologies driving it... it also serves as a step-by-step "how-to" manual for putting into action the best Bitcoin investing opportunities. If you would like to receive this guide for free as soon as it's available, just sign up below. You'll also get Michael Robinson's weekly updates from Strategic Tech Investor where you'll learn about the best technology investing ideas on the planet right now.
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