Top 10 Prefered Companies To Watch In Right Now
Friday, January 31, 2014
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Thursday, January 30, 2014
Stocks to Watch: Caterpillar, Boeing, Motorola Solutions
Among the companies with shares expected to actively trade in Wednesday’s session are Caterpillar Inc.(CAT), Boeing Co.(BA) and Motorola Solutions Inc.(MSI)
Caterpillar’s third-quarter earnings fell 44% as the maker of mining and construction equipment said weak demand for mining equipment continued to weigh on results. Results missed expectations, and the world’s largest seller of bulldozers, excavators and wheel loaders lowered its full-year guidance, sending shares down 5% to $84.74 premarket.
Boeing’s third-quarter earnings rose 12% as strength in its commercial aircraft business offset weaker profits at its defense division. The company raised its per-share earnings estimate for the year as results beat views. Shares edged up 2.8% to $125.90 premarket.
Motorola Solutions’ third-quarter earnings rose 49% as the company posted significantly lower tax costs thanks to foreign tax credits, though revenue was down. The bottom line beat views, and the company guided for strong earnings for the year. Shares climbed 3.5% to $62.57 premarket.
American Realty Capital Properties Inc.(ARCP) agreed to buy Cole Real Estate Investments Inc.(COLE) for about $7 billion, joining together two real-estate investment trusts. The expanded company will include a combined portfolio of more than 3,700 properties with over 100 million square feet in 49 states and Puerto Rico. Cole shares surged 16% to $14.91 premarket, while American Realty climbed 5.8% to $14.12.
Repros Therapeutics Inc.(RPRX) pushed back its planned new drug application for its low-testosterone treatment, following a request from the U.S. Food and Drug Administration to discuss recent trial data. The company now expects to submit its new drug application for Androxal in the second half of next year. Shares were down 30% at $16.70 premarket.
Toy maker Jakks Pacific Inc.(JAKK) posted better-than-expected results, including revenue not falling as much as feared and profit surprisingly rising. Shares surged 22% to $6.03 premarket.
Broadcom Corp.'s(BRCM) third-quarter profit rose 44% as the chip maker’s margins and revenue increased, but it offered weak revenue guidance for the current quarter. Shares were down 8.3% to $24.89 premarket as the company’s fourth-quarter revenue projection missed analyst expectations.
Corning Inc.(GLW) said it will take control of a joint venture with Samsung Electronics Co.’s (005930.SE) business that makes LCD glass in Korea and receive a $1.9 billion investment in a series of transactions to strengthen collaboration between the two companies. Shares jumped 21% to $18.50 in premarket trading.
Panera Bread Co.’s third-quarter profit jumped 17% as higher prices lifted same-store sales at company-owned stores, though the amount of transactions recorded at those restaurants declined. Same-store sales growth at company-owned locations missed Panera’s July projection, and the company trimmed its outlook targets. Shares fell 4.3% to $155.40 in premarket trading.
Top Blue Chip Companies To Watch For 2015
Apollo Group Inc.'s(APOL) fiscal fourth-quarter profit tumbled 71% as the for-profit education company reported a double-digit drop in enrollment at the University of Phoenix. But the company’s shares jumped 19% to $24.93 in premarket trading as results for the period easily topped Wall Street’s expectations.
Cree Inc.'s(CREE) fiscal first-quarter profit grew 89% as the maker of LED lighting products and semiconductor components posted higher revenue and margins. But shares dropped 16% premarket to $62.25 as the company predicted weaker-than-expected earnings for its second quarter.
Unisys Corp.(UIS) narrowed its loss in the third quarter as a decrease in costs partially offset a decline in revenue. Shares of the company, which provides information-technology services and software for commercial and government clients, fell 8.1% to $23.99 in premarket trading as its earnings and revenue came in below analysts’ expectations.
Altera Corp.'s(ALTR) third-quarter earnings dropped 24% as the chip maker’s sales sagged across most of its markets. Shares dropped 7% to $34.72 in light premarket trading.
Amarin Corp.(AMRN) PLC said it plans to eliminate about half of its staff positions world-wide as the biotechnology company looks to reduce its operating expenses in the wake of a vote by the U.S. Food and Drug Administration advisory committee against its supplemental new drug application for its cholesterol drug Vascepa. Shares slid 5.7% to $2.15 premarket.
RF Micro Devices Inc.(RFMD) swung to a fiscal second-quarter profit as the wireless-chip maker recorded a surge in revenue. Shares slid 7% to $5.73 premarket as the company’s current quarter revenue guidance was weaker than expected.
STMicroelectronics NV’s third-quarter loss narrowed as the company reported far fewer impairment and restructuring charges than a year ago, though overall revenue fell on weakness at the wireless business. Shares dropped 6.6% to $8.12 premarket.
Monday, January 27, 2014
Mid-Day Market Update: U.S. Stocks Tumble; Regis Shares Decline On Downbeat Results
Top 5 Penny Companies For 2014
Midway through trading Monday, the Dow traded down 0.35 percent to 15,824.04 while the NASDAQ dropped 1.32 percent to 4,073.61. The S&P also fell, declining 0.68 percent to 1,778.09.
Top Headline
Caterpillar (NYSE: CAT) reported a 44% rise in its fourth-quarter profit.
Caterpillar's quarterly profit surged to $1 billion, or $1.54 per share, versus a year-ago profit of $697 million, or $1.04 per share. Its revenue declined to $14.40 billion from $16.08 billion. However, analysts were expecting a profit of $1.27 per share on sales of $13.41 billion. Caterpillar announced its plans to buy back $10 billion in common stock by the end of 2018.
Equities Trading UP
Millennial Media (NYSE: MM) shot up 10.88 percent to $7.44 as the company lifted its Q4 forecast and announced the resignation of its founder and CEO Paul Palmieri.
Shares of Caterpillar (NYSE: CAT) got a boost, shooting up 4.41 percent to $89.97 after the company reported upbeat Q4 results.
Rayonier (NYSE: RYN) was also up, gaining 6.78 percent to $43.97 after the company reported Q4 results and announced its plans to separate into two public companies.
Equities Trading DOWN
Shares of Geron (NASDAQ: GERN) were down 18.46 percent to $4.5828 after the company reported that 20 patients have discontinued from Imetelstat study since its inception.
Regis (NYSE: RGS) shares tumbled 9.13 percent to $12.20 after the company reported downbeat Q2 results.
Idenix Pharmaceuticals (NASDAQ: IDIX) was down, falling 9.45 percent to $6.61 after JMP Securities downgraded the stock from Market Perform to Market Underperform.
Commodities
In commodity news, oil traded down 0.71 percent to $95.95, while gold traded down 0.21 percent to $1,261.80. Silver traded up 0.40 percent Monday to $19.85, while copper fell 0.35 percent to $3.26.
Eurozone
European shares were lower today.
The Spanish Ibex Index dropped 0.95 percent, while Italy's FTSE MIB Index dropped 0.44 percent. Meanwhile, the German DAX declined 0.33 percent and the French CAC 40 fell 0.41 percent while U.K. shares tumbled 3.19 percent.
Economics
Sales of new homes declined 7% to an annual rate of 414,000 in December, but climbed 4.5% y/y in the month. However, economists were projecting an annual rate of 455,000 in the month.
The Dallas Fed general business activity index rose to 3.80 in January, versus a prior reading of 3.10. However, economists were expecting a reading of 3.50.
Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech
(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Most Popular Earnings Expectations For The Week Of January 27: Facebook, Google, Apple And More Apple Earnings Preview: A Return To Earnings Growth? Weekly Highlights: Gmail Crashed, iPhone XL Hype, Galaxy S5 Tease And More #PreMarket Primer: Monday, January 27: Markets Open The Week On Edge Earnings Scheduled For January 27, 2014 Why Icahn Is Wrong On Apple Related Articles (CAT + BZSUM) Mid-Day Market Update: U.S. Stocks Tumble; Regis Shares Decline On Downbeat Results Winter's Stock Knockdown May Give Way To A Spring Thaw Monday's Premarket Earnings Reports Benzinga's Volume Movers Mid-Morning Market Update: Markets Mostly Higher; Caterpillar Results Beat Street View Top Trending Tickers On StockTwits For January 27 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. TurfSaturday, January 25, 2014
Starbucks Announces New Group President, Global Business Services (SBUX)
The ultra-popular coffee chain Starbucks (SBUX
The hire comes from within, as CFO Troy Alstead has been given the new title, while still maintaining his CFO position. Alstead has been a member of the Starbucks team since 1992; a time when the company was private and had just 100 stores. Over his two decade tenure he held a number of financial and managerial positions and was also an original member of the Starbucks International team.
Alstead will look to continue to contribute to the firm’s strong success, as its stock currently sits just below its all-time high. Though the company suffered a slight drawback in early 2012, it has gotten back on track and pushed to new levels.
Starbucks shares were up 80 cents, or 1.05%, upon Tuesday’s close. The stock is up over 40% this year alone.
Friday, January 24, 2014
Is IBM Enticing After Recent News?
With shares of International Business Machines (NYSE:IBM) trading around $182, is IBM 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 MovementIBM is an information technology company. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. Technology products and services are in high demand worldwide, as consumers want to be up to speed and companies always need the latest and greatest to stay ahead of the competition. Cloud computing has been hot in recent times, which has not been good news for IBM. Should the company want to hold on to its market share, it needs to make moves quickly and provide the technology products and services that worldwide consumers and companies demand.
Chinese PC maker Lenovo Group Ltd. agreed to buy IBM Corp’s low-end server business for $2.3 billion in what is set to be China’s biggest technology deal. The long-awaited acquisition comes nearly a decade after Lenovo bought IBM’s loss-making ThinkPad business for $1.75 billion, eventually becoming the world leader in personal computers in 2012. The sale of the low-end server operation — which still needs U.S. government approval — will allow International Business Machines to focus on its decade-long shift to more profitable software and services.
T = Technicals on the Stock Chart Are MixedIBM stock has seen struggled to make significant progress in the last several years. The stock is currently trading sideways and may need time to stabilize before heading higher. 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, IBM 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 IBM options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| IBM options | 16.69% | 3% | 0% |
What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts, as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| February Options | Average | Average |
| March 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 very small 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 Mixed 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 IBM’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for IBM look like and more importantly, how did the markets like these numbers?
| 2013 Q4 | 2013 Q3 | 2013 Q2 | 2013 Q1 | |
| Earnings Growth (Y-O-Y) | 11.63% | 10.51% | 11.40% | 3.45% |
| Revenue Growth (Y-O-Y) | -5.46% | -4.15% | -3.33% | -5.11% |
| Earnings Reaction | -3.27% | -6.37% | 1.76% | -8.27% |
IBM has seen increasing earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have been optimistic about IBM’s recent earnings announcements.
P = Average Relative Performance Versus Peers and SectorHow has IBM stock done relative to its peers, HP (NYSE:HPQ), Oracle (NYSE:ORCL), Microsoft (NASDAQ:MSFT), and sector?
| IBM | HP | Oracle | Microsoft | Sector | |
| Year-to-Date Return | -2.53% | 4.90% | -0.16% | -4.17% | -1.49% |
IBM has been an average relative performer, year-to-date.
ConclusionIBM is a global technology company that provides essential products and services to companies and consumers worldwide. Chinese PC maker Lenovo Group agreed to buy IBM Corp’s low-end server business for $2.3 billion. The stock has been struggling over the last couple of years and is currently trading sideways. Over the last four quarters, earnings have been rising while revenues have been declining, which has left investors optimistic about IBM's earnings announcements. Relative to its peers and sector, IBM has been an average year-to-date performer. WAIT AND SEE what IBM does the rest of the quarter.
Wednesday, January 22, 2014
Analyst: Auto boom foundering
"Trends suggest that motorization in the U.S. might have reached a peak several years ago," Michael Sivak writes in an analysis for the University of Michigan's Transportation Research institute.
He's at the university's Sustainable Worldwide Transportation unit, and has been studying motor-vehicle density and use in the U.S. The latest report is called "Households Without a Light-duty Vehicle" (light-duty vehicles means cars, SUVs and standard pickups).
"Recent studies have shown that -- per person, per driver, and per household -- we now have fewer light-duty vehicles, we drive each of them less, and we consume less fuel than in the past," Sivak writes. "The recent increase in the proportion of households without a vehicle provides additional support for the hypothesis that motorization in the U.S. peaked during the previous decade."
Other analysts agree there's a slump in vehicle ownership, but are less likely to see as an anti-car shift in social mores or demographics that to see it as the fallout from the Great Recession.
The proportion of "second or third vehicles in a given household has dropped. People are consolidating their needs into fewer vehicles to cut vehicle costs," said Karl Brauer, senior analyst at Kelley Blue Book. But, he said, "population growth means total car sales will to rise even if registrations per household drop."
The number of vehicles on the road in mid-2013 was 247.9 million, highest since 2008, according to an Experian Automotive report late last year. Experian said that slipped slightly to 246.9 million the third quarter of last year, but that still was up from the same quarter a year earlier.
Sivak's main observations:
• In 2012, 9.2% of U.S. households were without a vehicle, compared to 8.7% in 2007.
• In six of the 30 largest U.S. cities more than 30% of households do not have a vehicle.
• From 2007 t! o 2012, there was an increase in the proportion of households without a
vehicle in 21 of the 30 cities.
Such statistics play into a common notion that young people today don't covet cars the way their parents did -- and are happy to ride bikes, use car-sharing and get around in other ways.
But that might not be so, said Lacey Plache, chief economist at Edmunds.com.
Her data show that once jobs are easier to get, the 18-to-34 age group will dive into the work world, "get good jobs and form households. Once they get out there and form their own households, then the average (car ownership numbers) go up."
"The number of vehicles on the road will continue to grow," Plache said.
Sivak's conclusion also fits neatly with the notion that big cities -- where most people live -- offer better public transportation, trimming the need for individual vehicle ownership.
But that, too, might not be the full story, Plache said. "You get to a point in life where a car becomes very necessary. There's a lot of talk about these car-share arrangements. But the projections for miles traveled for those is very small."
And at least for awhile, new vehicle sales will grow simply because people who nursed old vehicles through the recession now finally are dumping them for new ones. The average age of a vehicle on the road still is about 11 years, according to industry and analysts' calculations.
Tuesday, January 21, 2014
Why Chelsea Therapeutics Stock Is on Fire
The 91.74% gain in Chelsea Therapeutics International Ltd (Nasdaq: CHTP) stock yesterday (Wednesday) is the latest biotech to see a massive one-day surge. More development-stage biotechs are nearing approval for new treatments - and doubling or tripling their share prices.
Shares of 10-year-old Charlotte, N.C.-based Chelsea Therapeutics surged as much as 120% Wednesday after an independent panel found CHTP's drug to treat a rare form of low blood pressure effective enough to warrant regulatory approval.
#symbols-c4ca4238a0b923820dcc509a6f75849b { width: 253px; font-family: Arial; font-size: 11px; color: #333333; } #symbols-c4ca4238a0b923820dcc509a6f75849b .header { float: left; font-family: Georgia; font-size: 14px; color: #456626; line-height: 14px; padding-left: 14px; font-weight: bold; } #symbols-c4ca4238a0b923820dcc509a6f75849b .date { float: right; padding-right: 32px; font-weight: bold; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart { font-family: Georgia; font-size: 12px; color: #456626; width: 253px; height: 135px; line-height: 135px; text-align: center; } #symbols-c4ca4238a0b923820dcc509a6f75849b ul { list-style: none; padding: 0; margin: 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b li { padding: 0; margin: 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b li:nth-child(odd) { background-color: #eeebe6; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .name { float: left; width: 100px; overflow: hidden; padding: 3px; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .price { float: left; width: 55px; overflow: hidden; padding: 3px; text-align: right; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .percent { float: left; width: 80px; overflow: hidden; padding: 3px; text-align: right; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item.active { background-color: #456626; color: #ffffff; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart-container { width: 253px; height: 135px; padding: 0 0 5px 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart-container img { width: 253px; height: 135px; max-width: none; } .clear { clear: both; } CHELSEA THERAPEUTIC NASDAQ: CHTP Jan 17 loading chart... Price: 4.76 | Ch: 0.06 (1.3%)Tuesday's decision from the group, an advisory panel to the U.S. Food and Drug Administration, was nearly unanimous. Sixteen cast votes in favor of the drug; just one voted against it.
While the FDA isn't bound by the advisory group's advice, the government agency does take its guidance into consideration and frequently follows it.
The FDA is scheduled to make a decision on Chelsea's drug, Northera, on Feb. 14.
Chelsea's (CHTP) Northera DrugNorthera is used to treat patients with neurogenic orthostatic hypotension (nOH), a rare, lingering type of low blood pressure. nOH typically occurs upon standing and is commonly experienced by those with certain neurological disorders, including Parkinson's disease. Nearly 300,000 patients presently suffer from nOH in the U.S. and EU combined.
Also known as droxidopa, Northera works like a chemical messenger. It sends signals to blood vessels and the heart to regulate blood pressure and prevent things such as light-headedness, dizziness, blurred vision, fatigue, poor concentration, and fainting upon standing.
"Chelsea is committed to improving the lives of patients with nOH, a debilitating disorder which often severely limits a person's ability to perform routine daily activities," Joseph G. Oliveto, Interim Chelsea chief executive officer, said in a statement.
One cardiologist who voted in Northera's favor told Reuters he did so "based on the compelling evidence of suffering and the absence of viable alternatives." But, the doctor added FDA approval should be contingent on additional studies.
Meanwhile, patient and patient advocates who testified before the panel made compelling statements about the positive impact Northera has had on their lives.
Strong Support for Chelsea (CHPT)This is a second time Northera faces the FDA...
Chelsea first filed for approval of Northera in 2011. In March 2012, the FDA rejected Northera's application, requesting more efficacy data about the medicine.
Following additional studies that addressed the FDA's concerns, and more than a year of delays in efforts to bring its first and lead candidate to market, Chelsea resubmitted its application in September.
In a research note Wednesday, Wedbush analysts said they think the "overwhelming positive vote this time may pressure the FDA to approve Northera." The investment firm gives Northera a 65% chance of getting the FDA nod next month.
In a note of caution, an advisory panel also recommended approval in February 2012. That endorsement was prior to the FDA's first rejection. Shares sorely suffered following the rejection, slumping more than 36%.
This time around, Chelsea has a more solid, albeit independent, backing.
In addition to Northera, Chelsea's pipeline of potential therapies include treatments for rheumatoid arthritis that may also prove appropriate in the treatment of a number of other autoimmune disorders.
CHTP stock traded as high as $5.78 Wednesday before closing at $4.41. CHTP is up 3% to $4.55 in Thursday morning trading.
Chelsea Isn't the Only Biotech Worth Watching: Here Are Three More Headline-Grabbing Biotechs to Buy
Related Articles:
The Wall Street Journal:Chelsea Therapeutics' Northera Get Strong Support From FDA Panel Reuters:
FDA Panel Backs Chelsea Therapeutics Drug MarketWatch:
Opening Buzzer: Chelsea Therapeutics International, Tesla Motors Inc, NQ Mobile Inc, Rexahn Pharmaceuticals
Monday, January 20, 2014
Top Financial Stocks For 2014
Getty Images We're taught when we're young to be leery of peer pressure. As we grow older, we like to think we've outgrown its effects. But that isn't always the case -- especially when it comes to our finances. Some companies are hoping to exploit this fact after determining that a person's social connections can reveal a lot about how they handle money, according to a recent CNNMoney article. Armed with this revelation, a slew of start-ups -- like Lenddo, Kabbage, and Kreditech -- are using a person's social connections -- his Facebook (FB) friends, for example -- to determine his creditworthiness. If this new mode of measurement takes off, you'll have a lot more to worry about than what's being reported on your credit history. Time to Delete That Friend Who's Always Behind On His Bills? Although it's unlikely this data will replace the system banks currently use to decide how much they'll loan you and at what rate (after all, it'd be a relatively easy system to game by simply unfriending those of your associates who are horrible at budgeting), it should make you think twice about your financial influences. The idea that your peers influence your beliefs about reality isn't all that new. In 1935, Turkish social psychologist Muzafer Sherif designed an experiment in which he shone a dot of light on a wall in a dark room and asked participants how far it moved. The light never actually moved, but due to a trick of the eye, it appeared to. The participants took the test multiple times, and repeatedly gave answers that remained fairly consistent for each individual. Then Sherif put his test subjects into groups of people who had given a different measurement for how much the light moved. In that scenario, each participant changed his original answer to match whatever the consensus was among the group. Even when asked later on, away from the group, how much the light moved, the individual stuck to the group consensus, abandoning his original answer. Sherif's experiment proved that social proof (the academic term for peer pressure) is a powerful force that can change our beliefs and our behaviors, no matter how convinced we are that we're correct. The Joneses Are Clouding Your Judgment Believe it or not, experts have determined that social pressure is an even more powerful force than money. A 2010 article in The Wall Street Journal lists multiple real-life examples in which a statement like "77 percent of your neighbors already do this" is more successful in getting someone to change their behavior than stating, "You could save $54 on your next bill by doing this." This sentiment plays out in many of our everyday purchases -- from the car we drive to the house we buy to even the food we eat and the clothes we wear. "Keeping up with the Joneses" can cause us to splurge more often than we should -- often to the detriment of our finances. So What's a Person to Do? I'm not advising you stop associating with all your friends who are big spenders. But at the very least, you should take an honest look at who you spend most of your time with -- and whether their financial goals and behaviors align with yours, and what you want yours to be. Friends who consistently lure you into shopping trips or nights out on the town may be fun to hang out with. But they might also cause you to stray from your budget. Friends who regularly show off their latest big purchase, or invite you over for dinner in their new, larger home might subconsciously convince you to make an even bigger purchase. And yet beneath it all, these friends probably have little savings to show for their lavish lifestyle. So choose your friends wisely. And be honest to those less frugal than you about your budget and the importance you give to saving. After all, it might be better to see a friendship or two fade now than to spend your retirement years regretting the peer pressure that depleted your savings.
Top Financial Stocks For 2014: Aon Corporation(AON)
Aon Corporation provides risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services primarily in the United States, the Americas, the United Kingdom, Europe, the Middle East, Africa, and the Asia Pacific. The company?s Risk Solutions segment offers retail brokerage products and services, including affinity products, general underwriting management services, placement services, and captive management services; and advisory services to technology, financial services, agribusiness, aviation, construction, health care, and energy industries, as well as facilitates various risk management solutions for property liability, general liability, professional liability, directors' and officers' liability, workers' compensation, and various healthcare products. This segment also provides risk consulting services comprising captive management; eSolutions products that enable clients to manage risks, policies, claims, and safet y concerns through an integrated technology platform; reinsurance brokerage services, such as actuarial, enterprise risk management, catastrophe management, and rating agency advisory services; property and casualty reinsurance; and specialty lines, which include professional liability, medical malpractice, accident, life, and health, as well as capital management transaction and advisory services. Its HR Solutions segment offers human capital services in the areas of health and benefits, retirement, compensation, and strategic human capital; and benefits administration and human resource business process outsourcing services. The company was founded in 1919 and is headquartered in Chicago, Illinois.
Advisors' Opinion:- [By Keith Speights]
AON Hewitt, the human resources business unit of AON (NYSE: AON ) , successfully enrolled more than 100,000 employees across the U.S. in health insurance plans last fall through its Corporate Health Exchange product. The company's survey of enrollees found that nearly 80% "felt confident they chose the health plan that offered the best value for them and their family." 93% liked being able to choose from multiple insurance carriers.
- [By Reuters]
Wendy Maeda/The Boston Globe via Getty Images NEW YORK -- Walgreen is moving 120,000 employees to a private health insurance exchange from coverage provided directly from carriers, the company will announce Wednesday. The pharmacy chain will join 17 other large employers on the Aon Hewitt Corporate Health Exchange as part of a growing movement to offer employees fixed dollar amounts to purchase their own plans on such exchanges. The end-cost to employees depends on the plan chosen, but they typically get more options than under traditional arrangements. Private exchanges mimic the coverage mandated as part of the Affordable Care Act. Enrollment in the public exchanges starts Oct. 1. "What happens to employer contributions over time? Will they put in as much as they put in the past? These are unanswered questions but potential negatives," says Paul Fronstin, a senior research associate with the Employee Benefit Research Institute. The benefit to Walgreen and other employers is unknown at this point, as their cost-savings aren't clear. Of the 180,000 Walgreen (WAG) employees eligible for health care insurance, 120,000 opted for coverage for themselves and 40,000 family members. Another 60,000 employees, many of them working part-time, weren't eligible for health insurance. Aon Hewitt (AON) says other participants in its program include retailer Sears Holding (SHLD) and Darden Restaurants (DRI). These new additions raise enrollment to 330,000 from 100,000 last year, and Aon Hewitt estimates enrollment will jump to 600,000 next year, a fivefold increase from 2012. By 2017, nearly 20 percent of employees nationwide could get their health insurance through a private exchange, according to Accenture Research (ACN). A recent report by the National Business Group on Health said that 30 percent of large employers are considering moving active employees to exchanges by 2015. Other major providers of private exchanges include Mercer, a division of Marsh & Mc
Top Financial Stocks For 2014: Central Bancorp Inc(CEBK)
Central Bancorp, Inc. operates as the holding company for Central Co-operative Bank, which provides a range of banking products and services in the northwestern suburbs of Boston, Massachusetts. The company offers various deposit products, including demand deposit accounts, NOW accounts, money market deposit accounts, regular savings accounts, term deposit accounts, and retirement savings plans. Its loan portfolio comprises residential mortgage loans, commercial real estate and construction loans, home equity lines of credit, commercial and industrial loans, and consumer and other loans. The company also provides automated teller machines, Internet banking, preauthorized payment and withdrawal systems, tax-deferred retirement programs, and other miscellaneous services, such as money orders, travelers? checks, and safe deposit boxes. Central Bancorp operates nine full-service office facilities in Somerville, Arlington, Burlington, Chestnut Hill, Medford, Melrose, and Wobur n, Massachusetts; and a limited service high school branch in Woburn, Massachusetts. It also operated an automated teller machine in Somerville, Massachusetts. The company was founded in 1915 and is headquartered in Somerville, Massachusetts.
10 Best Insurance Stocks To Watch For 2014: HIGHCROFT INVESTMENTS ORD GBP0.25(HCFT.L)
Highcroft Investments PLC operates as a real estate investment trust that has a portfolio of property and equity investments in the United Kingdom. The company?s portfolio includes commercial property comprising retail outlets, offices, and warehouses; and residential property consisting of single-let houses. Its financial assets include exchange-traded equity investments. The company is based in Kidlington, the United Kingdom.
Top Financial Stocks For 2014: Bank of the Carolinas Corporation(BCAR)
Bank of the Carolinas Corporation operates as the holding company for Bank of the Carolinas that provides commercial and consumer banking services to individuals and small-and medium-sized businesses primarily in the Piedmont region of North Carolina. Its deposit products portfolio includes business and individual checking accounts, savings accounts, negotiable order of withdrawal accounts, certificates of deposit, and money market checking accounts, as well as fixed interest rate certificates with varying maturities. The company?s loan products portfolio comprises consumer and commercial loans offered to individuals and small-and medium-sized businesses for various personal, business, and agricultural purposes, including term and installment loans, commercial and equity lines of credit, and overdraft checking credit; and commercial operating and working capital loans, residential mortgage loans, home equity lines of credit, other consumer loans, and loans secured by comm ercial real estate. It operates through 10 banking offices. The company was founded in 1998 and is based in Mocksville, North Carolina.
Top Financial Stocks For 2014: ASHMORE GROUP ORD GBP0.0001 WI(ASHM.L)
Ashmore Group plc is a publicly owned investment manager. The firm through its subsidiaries invests in the public equity, fixed income, and currency markets across the globe. It typically makes its fixed income investments in corporate and external debt. The firm makes its currency investments in domestic currency and domestic currency denominated debt. It also employs a special situation investing approach to invest in corporate restructurings through distressed debt, private and public equity, and equity-linked securities. The firm employs a top down and bottom up approach to make its investments. It obtains external research to compliment its in-house research. Ashmore Group Plc was founded in 1992 and is based in London, United Kingdom.
Top Financial Stocks For 2014: American Campus Communities Inc (ACC)
American Campus Communities, Inc., incorporated on March 9, 2004, is a self-managed and self-administered real estate investment trust (REIT). The Company specializes in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. Through the Company�� interest in American Campus Communities Operating Partnership LP (the Operating Partnership), the Company owns, manages and develops student housing properties in the United States. It operates in four segments: Wholly-Owned Properties, On-Campus Participating Properties, Development Services and Property Management Services. As of December 31, 2011, the Company�� property portfolio contained 116 properties with approximately 71,800 beds in approximately 22,900 apartment units. Of the 116 properties, 11 were under development as of December 31, 2011. In July 2012, the Company acquired University Commons, a 480-bed off-campus community serving students attending the University of Minnesota. In September 2012, it acquired Campus Acquisitions��15 student housing properties with 6,579 beds. On November 30, 2012, the Company acquired student housing properties with 12,049 beds, including 366 beds at an additional phase from affiliates of Kayne Anderson Capital Advisors, L.P.
In December 2011, the Company acquired a 79.5% interest in a partnership that owns a 258-unit, 901-bed property (The Varsity) located near the campus of the University of Maryland in College Park, and a 367-unit, 1,026-bed wholly owned property (26 West) located near the campus of The University of Texas in Austin. In November 2011, the Company acquired a 370-unit, 684-bed wholly owned property (Studio Green) located near the campus of Florida State University in Tallahassee. In September 2011, the Company acquired a 216-unit, 792-bed wholly owned property (Eagles Trail) located near the campus of the University of Southern Mississippi in Hattiesburg. In July 2011, the Company acquired a retail shopping! center located near the campus of the University of Central Florida in Orlando. In April and May 2011, the Company sold four owned off-campus properties (Campus Club - Statesboro, River Club Apartments, River Walk Townhomes and Villas on Apache).
Through the Company�� taxable REIT subsidiaries (TRS), it also provides construction management and development services, primarily for student housing properties owned by colleges and universities, charitable foundations, and others. As of December 31, 2011, the Company provided third-party management and leasing services for 31 properties (nine of which the Company served as the third-party developer and construction manager) that represented approximately 24,200 beds in approximately 9,600 units, and one joint venture property in which the Company owns a noncontrolling interest with approximately 600 beds in approximately 200 units. As of December 31, 2011, the Company�� total owned, joint venture and third-party managed portfolio included 148 properties with approximately 96,600 beds in approximately 32,700 units.
The Company�� wholly-owned properties segment include American Campus Equity (ACE). Its On-Campus Participating Properties segment includes four on-campus properties owned by one of its TRSs that are operated under long-term ground/facility leases with two university systems. The Company�� third-party services consist of development services and management services and are typically provided to university and college clients. Many of its third-party management services are provided to clients for whom it also provides development services. The Company�� Development Services segment consists of development and construction management services that it provides through one of its TRSs for third-party owners. These services range from short-term consulting projects to long-term development and construction projects.
The Company�� pre-development services typically include feasibility studies for thir! d-party o! wners and design services. Feasibility studies include an initial feasibility analysis, review of conceptual design, and assistance with master planning. Construction management services consist of hiring of project professionals and a general contractor, coordinating and supervising the construction, equipping and furnishing process on behalf of the project owner, including site visits, hiring of a general contractor and project professionals, and coordination and administration of all activities necessary for project completion. The Company�� Property Management Services segment, conducted by its TRSs, includes revenues generated from third-party management contracts in which it is responsible for marketing, leasing administration, facilities maintenance, business administration, accounts payable, accounts receivable, financial reporting, capital projects and residence life student development.
Advisors' Opinion:- [By Ben Levisohn]
American Campus Communities (ACC) made the grade after three insiders at the student housing REIT bought $186,800. Leading the charge was CFO Jonathan Graf, who bought 3,700 shares for $67,700. InsiderScore categorized this combined purchase as a ��luster Buying Unusual Event��and also notes that the purchases came after ACC released weak earnings and lowered its guidance.
- [By WWW.GURUFOCUS.COM]
American Campus Communities, Inc. (ACC), an owner, manager, and developer of student housing, decreased 15.2% in the third quarter as the company's lease rates were weaker than expected. Supply in some of its markets increased, and REITS were hurt in the third quarter from rising yields as the 10-year Treasury yield approached 3% and made dividend yields on many REITs less attractive. However, we continue to believe the company is the best in its industry at developing properties and should improve its yields next year as the market absorbs the excess supply. (David Baron)
Top Financial Stocks For 2014: Kingsway Arms Retirement Reside(KWA.V)
Kingsway Arms Retirement Residences Inc. engages in the ownership of retirement home properties in Canada. It primarily owns the Aurora Retirement Centre, a seniors housing facility located in Aurora, Ontario. The company was founded in 1997 and is based in Vaughan, Canada.
Top Financial Stocks For 2014: United States Steel Corporation(X)
United States Steel Corporation produces and sells steel mill products in North America and Central Europe. It operates in three segments: Flat-rolled Products (Flat-rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products, as well as iron ore and coke. This segment serves service center, conversion, transportation, construction, container, and appliance and electrical markets in North America. The USSE segment offers slabs, sheets, strip mill plates, tin mill products, and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves the European construction, service center, conversion, container, transportation, and appliance and electrical, as well as and oil, gas, and petrochemical markets. The Tubular segment offers seamless and electric resistance welded steel casing and tubing; and standard, and line pipe and mechanical tubing. It primarily serves customers in the oil, gas, and petrochemical markets. The company also provides transportation services, including railroad and barge operations. In addition, it owns, develops, and manages various real estate assets, which include approximately 200,000 acres of surface rights primarily in Alabama, Illinois, Maryland, Michigan, Minnesota, and Pennsylvania; participates in joint ventures that are developing real estate projects in Alabama, Maryland, and Illinois; and owns approximately 4,000 acres of land in Ontario, Canada. The company was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.
Advisors' Opinion:- [By Alex Planes]
U.S. Steel (NYSE: X ) and Nucor (NYSE: NUE ) have both improved their earnings during the past three years, but ArcelorMittal (NYSE: MT ) has suffered what may be a steeper drop in a real sense, as it actually started from a position of strong profitability before collapsing through 2012. These longer-term trends can mask shorter-term problems -- Nucor's earnings have slipped from last year's levels. It doesn't help that big producers are faced with a glut of steel production from smaller players, holding back any real attempts at price boosts (AK's recent efforts notwithstanding).
Friday, January 17, 2014
The Coca-Cola Company: 1925-1929
This article is the second piece in a series reliving the story of the Coca-Cola Company (KO), and highlighting how it became the steward of the world's most valuable brand:
When we last left off (1924), the company had sold nearly 17.5 million gallons of syrup, an increase of 230% from the volume sold ten years earlier. In 1925, the upward trajectory continued, with sales at the company reaching a new plateau ($28.5 million, up 12% year over year and crossing 20 million gallons of syrup sold for the first time) despite a decrease in overhead expenses (COGS fell by $400,000 from 1924).
Robert Woodruff, who succeeded Mr. Candler as the company's President in 1923, had this to say about the years' results: "The development of both foreign and domestic subsidiaries has been satisfactory." Suffice it to say that Mr. Woodruff was being humble; the net profit for the year hit $7.9 million, an increase of more than 38% from the $5.7 million earned in 1924. For the year, the company paid $3.5 million in dividends to common stockholders, equal to a payout ratio of 44%.
In Charlie's speech (discussed in the first article of this series), he highlights the importance of creating a beverage that can be consumed morning, afternoon, and night on every corner of the globe; Coca-Cola talked about their ability to attract consumers regardless of climate in the 1925 report:
"From these two cities of such wide extremes — Montreal (12 million bottles sold in 1925), brisk metropolis of the great Dominion of the North, and Miami (9 million bottles sold), wonder city of sunny Florida—you get the whole story, the big story of Coca-Cola's tremendous popularity despite great variations in climate… It can be told of the hundreds of cities in between where the popularity of Coca- Cola continues through all four seasons—winter, spring, summer and fall. It's the story of the tremendous public demand for the fight product."
In 1926, the year of the company's fortieth annive! rsary, sales crossed $30 million for the first time (gallons sold increased 5.2%), and net profit increased to $8.4 million (up 6% from 1925).
Twelve months later, the company reported its fourth consecutive year of record sales ($32.5 million) and profits ($9.2 million); as noted in the annual report, the majority of this cash would be reinvested in the domestic and international operations to fuel future growth: "In considering the Company's future policies, your Directors have provided for the enlargement of the Company's already extensive program of broadening both domestic and foreign markets. The broadening of the Company's activities will undoubtedly lay a more stable and comprehensive basis for future business and earnings."
In 1928, Coca-Cola (yet again) hit record sales and profit figures; the company shipped more than 24 million gallons of syrup for the year and net profit crossed the $10 million mark, an increase of 125% from the reported bottom line just five years earlier. In addition, the company was in the early stage of developing a scale advantage over competitors, with cost per unit decreasing by nearly 20% since 1923.
With each passing year, management continues to subtly drop golden nuggets that suggest the global potential that this company might one day achieve: "Contrary to a generally prevalent belief, our experience in marketing Coca-Cola indicates that climatic, geographical, and racial factors exercise relatively small influence upon our sales over a reasonable period of time." As an example, management noted that the company's two largest bottling plants serving individual cities in that year were located in New Orleans (51 million bottles per annum) and Montreal (39 million bottles, up more than three-fold from the 1925 figure), two regions with drastically different climates. With this in mind, the company continued their unconstrained expansion to all corners of the globe, increasing product availability from 30 countries to 76 countries over t! he course! of 24 months.
The first "per-capita" chart (which has become a visual representation of the company's opportunities in international markets) appeared the 1928 report, and showed that consumption had increased (in the U.S.) from an average of 18 bottles/glasses of Coca-Cola per person in 1922 to an average of 25 per annum in 1925; as we will see, that figure will continue to increase region by region across the globe (in 2010, per capita consumption was 394 servings in the U.S.).
Importantly, management was clear in letting shareholders now that expansion internationally would come with a cost in the short term; but for investors, the long term payout trumped the near-term expense: "The opening of foreign markets is a costly undertaking- and during the early years of development promises to parallel our domestic experiences with regard to the protection of our trade-mark and the development of consumer acceptance, with the manifold problems involved. Successful prosecution of these undertakings will require time, courage and patience, as well as large expenditures. Our experiences in Canada, where we operated for a number of years with annual losses, bear out this view."
Despite the market crash of 1929, sales and profit both increased for the year, at a rate of 13% and 25% respectively. In the annual report, Mr. Woodruff is again focused on the keys to strengthening the company's moat: increased advertising, a continually improving sales force, and continued development and expansion into foreign markets.
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The Coca-Cola Company was firing on all cylinders; this would be critically importantly in the coming years as the longest and deepest depression of the 20th century would soon leave the economy ravished by widespread unemployment and a collapse in global trade.
Here is the continuation of the chart from the first article depicting g! allons so! ld per annum, with the most recent years discussed included:
| YEAR | GALLONS SOLD |
| 1886 | 25 |
| 1890 | 8,885 |
| 1895 | 76,244 |
| 1900 | 370,877 |
| 1905 | 1,549,866 |
| 1910 | 4,190,149 |
| 1915 | 7,521,833 |
| 1920 | 18,656,445 |
| 1924 | 17,496,764 |
| 1925 | 20,111,134 |
| 1926 | 21,158,450 |
| 1927 | 22,517,265 |
| 1928 | 24,212,519 |
| 1929 | 26,981,874 |
Thursday, January 16, 2014
Should You Invest in the Government's 5 Favorite Stocks?
BALTIMORE (Stockpickr) -- The government isn't exactly known for the prudent handling of money. Stories of $640 toilet seats and $37 screws come to mind. Budgeting and buying may not be Uncle Sam's strong suit, but investing is a different story.
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Government investments have been conspicuous losers in recent years, like the $10.5 billion lost on the bailout of General Motors (GM) or the now-you-see-it-now-you-don't profit made on American International Group (AIG). But while those deals have grabbed headlines, they weren't actually investments; they were bailouts.
In fact, governments' investment funds are some of the most ignored big-dollar professionally managed portfolios out there. And they're not relegated to the U.S. Federal government -- individual state trusts and foreign governments' sovereign wealth funds add up to some huge assets under management.
While we can't peek into all government investment accounts, the SEC's own rules can help us get the details on eight of the biggest with U.S.-domiciled accounts.
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With $47.2 billion in stocks as of the most recent quarter, it makes sense to pay attention to these government funds' favorite stocks in 2014. To do that, we'll use 13F filings.
Institutional investors with more than $100 million in assets are required to file a 13F -- a form that breaks down their stock positions for public consumption. From hedge funds to mutual funds to insurance companies to governments, any professional investors who manage more than that $100 million watermark are required to file a 13F.
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Today, we'll focus on five stocks government-managed funds bought most during the last quarter.
Level 3 Communications
Government-run funds really like integrated telecom firm Level 3 Communications (LVLT) -- not that it should come as any surprise. Level 3 has been a stellar performer in the last 12 months, tacking nearly 44% onto its share price over that time period. So government investors have been piling on another 450,000 shares in the most recent quarter, boosting their stake by more than $15 million at current share prices.
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Level 3 is a wholesale communications provider. The firm helps enterprise and carrier customers deliver voice, IP and video and content worldwide over its tier 1 network (it's one of only six in the world). LVLT also operates the largest competitive local exchange carrier in the country. Level 3's deep Internet infrastructure should continue to generate strong demand as data consumption continues to rise globally. Likewise, the firm's scale makes it an obvious partner for major communications carriers, and it's got an impressive client list to show for it. Those clients are also incredibly sticky, since few rivals can step in and replace LVLT's infrastructure.
That said, owning valuable infrastructure is expensive. Historically, Level 3 has paid its way by carrying a very leveraged balance sheet; at last count, the firm had more than $8 billion in net debt on the books. While Level 3 has gotten close to getting itself in trouble with debt in the past, it's been making some impressive strides towards profitability in 2013. That could greatly change this stock's fortunes as we get deeper into 2014. Earnings on Feb. 5 should be telling.
While Level 3's debt load continues to be a concern, this stock is showing some promise. And government funds (Singapore's in particular) are betting big on shares right now with nearly half of the firm's outstanding shares in tow.
Apple
Take it from me -- the past five months have been strong for shareholders of tech behemoth Apple (AAPL). Shares of AAPL are up more than 21% since September. And despite the recent upside, the $491 billion device maker still looks cheap from a valuation standpoint.
Government funds agree. They picked up 678,000 shares of AAPL in the last quarter, hiking their holdings by 50%.
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That brings the value of government funds' ownership in Apple to nearly $1 billion at current prices.
Apple is one of the most profitable technology manufacturers in the world. At the same time that PC makers and mobile device rivals are fighting a race to the bottom on margins to stay competitive, Apple still converts more than 20 cents on every sales dollar into profit. It's done that by establishing a deep economic moat over its ecosystem, incentivizing users to "keep it in the family" with innovative products that work well. That's borne out by usage metrics; while Apple's iOS isn't the dominant mobile operating system, for instance, it is the most used by far.
The firm's dominance has done a good job of scaring investors away. After all, how much longer can Apple's breakneck growth rates continue? But with $130 billion in net cash and investments, the firm has enough cash to retire more than 26% of its outstanding shares at current prices. Ex-cash, Apple currently trades for a paltry P/E ratio of 10.
Even if the company never experiences growth again, Apple sports a dirt-cheap price tag in 2014.
Exxon Mobil
High oil prices have fueled some substantial growth in Exxon Mobil (XOM) in recent years, turning more projects economically viable and funding critical acquisitions. And as crude prices continue to sit on the high end of their historic range, Exxon should continue to throw off serious cash to investors, including government funds.
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In the most recent quarter, government investors added 2.85 million Exxon shares to their portfolios -- a $282 million increase at current prices.
Exxon is the world's biggest oil and gas supermajor, with proven reserves of 18.2 billion barrels of oil equivalent. More than half of Exxon's reserves are oil, which means that the firm enjoys a rich sales mix that's skewed heavily towards the commodity that'll give it the most bang for its buck. The acquisition of XTO Energy in 2010 dramatically increased Exxon's natural gas exposure, and diluted net margins in exchange for overall growth. While that decision was somewhat controversial, I think it'll prove to be one of the best ways to achieve meaningful growth for investors given Exxon's previous size.
Because Exxon is an integrated oil and gas firm, it has a hand in every step of the energy business, from pulling oil out of the ground to refining it to retailing it at its gas stations. The firm's downstream operations have historically been excellent, driving much better returns than peers that have been busy spinning off their own downstream assets.
For investors looking for energy sector exposure, it's hard to go wrong with Exxon and its 2.5% dividend yield.
Johnson & Johnson
Government funds kept up with the uber-blue-chip theme last quarter, picking up 2.47 million shares of $267 billion health care name Johnson & Johnson (JNJ). That buy operation doubled the funds' exposure to JNJ, making it a significant bet on the firm.
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Johnson & Johnson is the biggest health care company, best known for consumer brands such as Band-Aid, Tylenol, Neutrogena and Acuvue. But the consumer divisions are just the tip of the iceberg; Johnson & Johnson's pharmaceutical and medical device businesses make up the most important part of the income statement. That huge level of diversification is a major benefit for shareholders -- it spares investors from overblown exposure to drug patent losses, health care regulations and economic hiccups.
While the acquisition of orthopedic device firm Synthes ate up a big chunk of Johnson & Johnson's net cash, the firm's balance sheet is still pristine with around $15.5 billion in net cash on the books. Johnson & Johnson's combined health care business enjoys some massive net profit margins -- nearly 17% in the most recent quarter. Those huge profits should continue to contribute to shareholder yield: Currently, the firm pays out a 2.8% dividend yield on top of the 30% gains shares saw last year.
Wells Fargo
Last up on government funds' "buy list" is big bank Wells Fargo (WFC). The funds picked up 4.93 million shares of WFC in the last quarter, once again doubling their exposure to the stock. So should you buy it too?
Wells Fargo earned a reputation for being the best-in-breed of the big banking names during the Great Recession. The firm's businesses range from all of the conventional retail and commercial banking to wealth management, investment brokerage, and investment banking. And while Wells certainly didn't skate through the financial crisis of 2008, it managed to exit the environment bigger and stronger by buying floundering Wachovia at fire sale prices.
But while there isn't a lot to hate about Wells Fargo, there isn't a lot to be exited about either. Yard for yard, Wells Fargo isn't much different from any of the other big-four banks in the U.S. Most of the kinks have been worked out of WFC's labyrinthine balance sheet at this point, but there are some smaller banking names with bigger fee-based sales streams that look more interesting right now. BNY Mellon (BK) and U.S. Bancorp (USB) are more unique alternatives worth a closer look.
To see these stocks in action, check out the Government Investment Fund Buys portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author was long AAPL.
Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to
TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.Follow Jonas on Twitter @JonasElmerraji
Tuesday, January 14, 2014
Deutsche Bank Upgrades Cliffs Natural Resources as Industrial Miners to Outperform Gold
In 2013, precious- and industrial-metal miners were good for one thing: Mining losses. Will 2014 be any better?
Reuters Last year, Barrick Gold (ABX) lost 48%, Newmont Mining (NEM) fell 48%, Goldcorp (GG) declined 39%. Iron miner Cliff’s Natural Resources (CLF), meanwhile, finished the year down 30%, while Freeport-McMoRan Copper & Gold (FCX) gained 17%.
Deutsche Bank’s Jorge Beristain and team explain what happened and what has to change for a better 2014:
2013 was a third straight year when NA Metals & Mining equities significantly underperformed both the underlying metals basket (by 33 percentage points) and S&P500 (by 65 percentage points). The decline in metals prices has brought to the fore impact of prior administration missteps. New management teams are now in “clean-up” mode, seeking to lower operating costs and slash capital spending which, for most, has reduced the risk of further equity issuance. However, to finally outperform the market in 2014, stocks have to offer more than absence of dilution/going concern risk, namely a focus back on per share growth or sustainably high dividend yield.
On that basis, expect gold miners to lag industrial miners, as cost cutting likely won’t keep up with falling gold prices. Beristain explains why:
Gold companies will likely face another challenging year in 2014 as Deutsche Bank expects a 20% lower gold price ($1,141/oz) year-on-year. We estimate that the group will on average be underfunded by $2.2bn with just ~$500mn in incremental debt capacity up to the investment grade ceiling. The two companies responsible for most of the group's projected deficit are Goldcorp and Newmont…[Barrick Gold] remains our preferred gold name on valuation (8x EV/EBITDA vs 16x for peers) as Precious group has basically gone ex-growth and sustainability of Newmont's gold-linked dividend (~1.9% yield) increasingly in doubt.
As for Cliff’s Natural Resources, more room for cost cutting could give it a boost, Beristain says. He writes:
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Among Industrial names, Cliffs has the most room for improving its funding position. While the company rolled back its 2013 capex projection 5% with 3Q13 results, we are looking for more meaningful changes in 2014, as management headed by new de facto CEO Gary Halverston formulates a comprehensive cost management plan in early 2014 delivering on its earlier promise to "significantly" cut capex in 2014. Bloom Lake 2, which we expect to be sanctioned imminently and has $450m of its total $900m price tag pending, will comprise almost the entirety of the firm's near-term growth capex.
Beristain raised Cliffs Natural Resources to Buy, but still calls Freeport-McMoRan Copper & Gold his top pick.
Shares of Barrick Gold have dropped 2.2% to $17.78 today at 2:45 p.m., while Newmont Mining has fallen 2.3% to $23.34 and Goldcorp, which made a bid for a miner yesterday, is off 3.4% at $22.27. Cliffs Natural Resources has gained 2.9% to $23 and Freeport-McMoRan Copper & Gold, which was downgraded by FBR today, risen 0.8% to $35.90.
Friday, January 10, 2014
Ballmer Revamps Microsoft to Focus on Devices and Services
In a letter today, Microsoft (NASDAQ: MSFT ) CEO Steve Ballmer announced a restructuring that now organizes the company by its main functions.
One of the major changes announced is the setup of four main engineering divisions that focus on the company's core offerings. The new "disciplines" are listed as:
Operating Systems Engineering Group, headed up by Terry Myerson Devices and Studios Engineering Group, headed up by Julie Larson-Green Applications and Services Engineering Group, headed up by Qi L Cloud and Enterprise Engineering Group, headed up by Satya Nadella"Today's announcement will enable us to execute even better on our strategy to deliver a family of devices and services that best empower people for the activities they value most and the enterprise extensions and services that are most valuable to business," Ballmer said in the letter.
As a result of the restructuring, Kurt DelBene, who worked with Office and was a "key part" of Ballmer's leadership team, is retiring. Craig Mundie, a senior advisor to the CEO, will step down to work on a special project for Ballmer through the rest of the year, and become a consultant in 2014. Rick Rashid will move away from Microsoft Research to work in the OS division.
Ballmer said the restructuring involves lots of change: "But in all of this, many key things remain the same. Our incredible people, our spirit, our commitment, our belief in the transformative power of technology — our Microsoft technology — to make the world a better place for billions of people and millions of businesses around the world."
Wednesday, January 8, 2014
Ford's SUVs Fuel Growth Overseas
Ford began producing the Explorer in Russia earlier this year. It's now adding more SUVs to its Russian lineup. Photo credit: Ford Motor Co.
Ford (NYSE: F ) has lost a ton of money in Europe recently, and could lose as much as $2 billion more this year. The problem is that recessions have caused new-car sales to take a nosedive, and they're not expected to recover for several years.
Ford's plan for recovery takes that into account, and one of the Blue Oval's strategies includes a slew of new products – including several of its acclaimed SUVs. In this video, Fool.com contributor John Rosevear looks at Ford's latest efforts to boost its SUVs in Europe, starting in an unlikely place – Russia.
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China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.
Tuesday, January 7, 2014
Top 10 Heal Care Companies To Watch For 2014
The following video is from Tuesday's MarketFoolery podcast, in which host Chris Hill and analysts Matt Argersinger and Jason Moser discuss the top business and investing stories of the day.
Shares of The Travelers Companies (NYSE: TRV ) rose on Tuesday after the insurance giant reported higher-than-expected first-quarter earnings. Travelers also increased its dividend. What's the key to Travelers' success? In this installment of MarketFoolery, our analysts discuss the future of Travelers.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of.�Click here now�to keep reading.
The relevant video segment can be found between 13:44 and 17:43.
For the full video of today's MarketFoolery, click here.
Top 10 Heal Care Companies To Watch For 2014: New Concept Energy Inc (GBR)
New Concept Energy, Inc. (New Concept), incorporated on May 30, 1991 in, owns and operates oil and gas wells in Ohio and West Virginia. The Company, through its wholly owned subsidiaries Mountaineer State Energy, Inc. and Mountaineer State Operations, LLC. operates oil and gas wells and mineral leases in Athens and Meigs Counties in Ohio and in Calhoun, Jackson and Roane Counties in West Virginia. As of March 30, 2012, the Company had 159 producing gas wells, 27 non-producing wells and related equipment and mineral leases covering approximately 20,000 acres. The Company operates in two primary business segments: oil and gas operations and retirement facilities.
During the year ended December 31, 2011, the Company had drilled eight wells. New Concept focuses on North American onshore oil and natural gas drilling and exploration. The Company's properties are concentrated in the Appalachian Basin, Fort Worth Basin, and the Arkoma Basin. The Company leases and operates Pacific Pointe Retirement Inn (Pacific Pointe) in King City, Oregon. Pacific Pointe has a capacity of 114 residents and provides community living with basic services, such as meals, housekeeping, laundry, 24/7 staffing, transportation and social and recreational activities.
Top 10 Heal Care Companies To Watch For 2014: Stantec Inc(STN)
Stantec Inc. provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics in the areas of infrastructure and facilities for public and private sector clients in North America and internationally. The company involves in the design of healthcare, education, science and technology, airport, retail and commercial, and sports and recreation facilities. Its environmental solutions include water supply, treatment, storage, and distribution; wastewater collection, pumping, treatment, and disposal; watershed management; environmental assessment, documentation, and permitting; ecosystem restoration planning and design; environmental site management and remediation; subsurface investigation and characterization; and geotechnical engineering services. Stantec Inc. also provides industrial planning, functional programming, engineering, project mana gement, and construction support services in oil and gas, fossil and renewable energy, underground mining, linear infrastructure, power transmission and distribution, automotive, forest products, food and beverage, and general manufacturing sectors. In addition, the company prepares transportation master plans for communities; conduct transportation investment studies; plans and designs airport, transit, rail, and highway facilities; and provides administration and support services for the construction of specific projects, and ongoing management planning for the upkeep of transportation facilities, as well as simulation modeling services. Further, it offers urban land solutions for the land development, real estate, and retail and commercial industries, as well as professional services. The company was formerly known as Stanley Technology Group Inc. and changed its name to Stantec Inc. in October 1998. Stantec Inc. was founded in 1954 and is headquartered in Edmonton, Canad a.
Top Small Cap Companies To Buy For 2014: Opexa Therapeutics Inc.(OPXA)
Opexa Therapeutics, Inc., a biopharmaceutical company, develops patient-specific cellular therapies for the treatment of autoimmune diseases. Its principal product includes Tovaxin, a personalized cellular immunotherapy treatment that completed Phase IIb clinical study for multiple sclerosis. Tovaxin is derived from T-cells isolated from peripheral blood, expanded ex vivo, and reintroduced into the patients via subcutaneous injections. The company was formerly known as PharmaFrontiers Corp. and changed its name to Opexa Therapeutics, Inc. in June 2006. Opexa Therapeutics, Inc. was founded in 2003 and is based in The Woodlands, Texas.
Advisors' Opinion:- [By CRWE]
Opexa Therapeutics, Inc. (NASDAQ:OPXA), a biotechnology company developing a novel T-cell therapy for multiple sclerosis (MS), reported that the Company is rebranding its leading MS therapy with the new name Tcelna(TM).
Top 10 Heal Care Companies To Watch For 2014: Sona Resources Corp (SYS)
Sona Resources Corporation is an exploration-stage company. The Company is a natural resource company engaged in the exploration of mineral properties in Canada. The Company focuses on the acquisition, exploration and development of economic gold and other precious and base metal properties in Canada. The Company focuses on its 100% owned mineral properties, the Blackdome Gold Mine and the Elizabeth Gold Property located in British Columbia, Canada. The Blackdome Gold Mine is located in southwestern British Columbia, approximately 230 kilometers north of Vancouver and approximately 100 kilometres south of Williams Lake. The Elizabeth Gold Property is a gold project located in southwestern British Columbia, in the Lillooet Mining District, approximately 200 kilometers north of Vancouver. The Montgolfier project covers approximately 25 kilometres of strike length of the Casa Berardi Fault Zone. The Montgolfier project is situated within the flat marshy drainage of the Harricana River.Top 10 Heal Care Companies To Watch For 2014: Mgm Energy Corp (MGX.TO)
MGM Energy Corp. engages in the acquisition, development, exploitation, and production of oil and natural gas in northern Canada. It primarily owns oil and natural gas resources in the Mackenzie Delta and the central Mackenzie Valley regions of the Northwest Territories. The company was incorporated in 2006 and is headquartered in Calgary, Canada.
Top 10 Heal Care Companies To Watch For 2014: Jkx Oil & Gas Plc(JKX.L)
JKX Oil & Gas plc, through its subsidiaries, engages in the exploration, development, and production of oil and gas reserves. It holds interest in Ignatovskoye, Molchanovskoye, Novo-Nikolaevskoye, Rudenkovskoye, Elizavetovskoye, Zaplavskoye, and Chervonoyarske East fields in the Poltava region of Ukraine; and development licenses in Koshekhablskoye gas field that comprises 34.7 sq. km located in Russia. The company also owns interests in B Golitza and B1 Golitza onshore exploration permits covering 3,355sq.km in eastern Bulgaria; in Hernad, Hajdunanas, Nyirseg, Turkeve, and Veszto licenses in Hungary; in West Georgia offshore in Georgia; and 3 exploration licenses in the Carpathian Fold Belt in Slovakia. In addition, it involves in finance and holding; and land leasing activities. JKX Oil & Gas plc is based in London, the United Kingdom.
Top 10 Heal Care Companies To Watch For 2014: Pacific Star Network Ltd(PNW.AX)
Pacific Star Network Limited operates as a radio broadcasting company in Australia. It holds two Melbourne AM commercial broadcasting licenses and broadcasts 24/7 on MTR 1377, a talk radio station that broadcasts across the Melbourne metropolitan area, and the Mornington and Bellarine Peninsulas; and 1116 SEN Sports Entertainment Network, which broadcasts sports radio in the Melbourne metropolitan area. The company was formerly known as Data & Commerce Ltd and changed its name to Pacific Star Network Limited in August 2004. Pacific Star Network Limited is based in Richmond, Australia.
Top 10 Heal Care Companies To Watch For 2014: SK Telecom Corporation Ltd.(SKM)
SK Telecom Co., Ltd. provides wireless telecommunications services using code division multiple access (CDMA) and wide-band CDMA technologies. It offers cellular voice services, such as wireless voice transmission services; and wireless global roaming services. The company also provides wireless data transmission services, such as wireless Internet access services, which allow subscribers to access online digital contents and services, as well as to send and receive text and multimedia messages. In addition, it offers broadband Internet and fixed-line telephone services, such as video-on-demand and IP TV services; and local, domestic, and international long-distance fixed-line telephone services to residential and commercial subscribers. Further, the company provides wireless entertainment-related contents and services, wireless finance-related contents and m-commerce services, and wireless news and search services; and international calling services, such as direct-dial, pre and post paid card calling services, bundled services for corporate customers, voice services using Internet protocol, Web-to-phone services, and data services. Additionally, it offers satellite digital media broadcasting services; telematics services; and fixed-line and online community portal services. The company also operates 11th Street, an online shopping mall; and T Store, an online open marketplace for mobile applications. As of March 31, 2011, SK Telecom Co. had 26 million wireless subscribers. It has strategic alliances with Bridge Alliance; Orange SA; Telecom Italia Mobile S.p.A.; T-Mobile International AG & Co; and Teliasonera Mobile Networks AB. The company was formerly known as Korea Mobile Telecommunications Co., Ltd. and changed its name to SK Telecom Co., Ltd. in March 1997. SK Telecom Co., Ltd. was founded in 1984 and is based in Seoul, South Korea.
Advisors' Opinion:- [By Chris Neiger]
SK Telecom (NYSE: SKM ) launched the world's first 4G LTE-Advanced network in South Korea today, providing the fastest available data speeds for the same price as 4G LTE.�
Top 10 Heal Care Companies To Watch For 2014: Assured Guaranty Ltd(AGO)
Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company offers insurance, reinsurance, and credit derivative products that protect holders of debt instruments and other monetary obligations from defaults in scheduled payments, including scheduled interest and principal payments. It provides policies issued directly to the holders of insured obligations at time of issuance and those issued in the secondary market; and assumed reinsurance contracts written to third parties. The company insures various types of securities, including taxable and tax-exempt obligations issued by the United States or municipal governmental authorities, utility districts, or facilities; notes or bonds issued to finance international infrastructure projects; and asset-backed securities issued by special purpose entities. Assured Guaranty Ltd. markets its credit protection products directly to issuers and underwriters of public finance, infrastructure, and structured finance securities, as well as to investors in such debt obligations. The company was founded in 2003 and is based in Hamilton, Bermuda.
Advisors' Opinion:- [By Eric Volkman]
Assured Guaranty (NYSE: AGO ) is attempting two well-tried moves to keep shareholders happy. The first is a quarterly dividend distribution amounting to $0.10 per share of its stock, to be handed out on June 5 to shareholders of record as of May 22. That amount matches Assured Guaranty's previous disbursement, which was paid in March.
- [By Lauren Pollock]
Assured Guaranty Ltd.'s(AGO) third-quarter profit more than doubled as the bond insurer recorded a gain tied to credit derivatives that masked a decline in net premiums earned. Shares rose 4.7% to $22.75 premarket.
- [By Sue Chang]
Assured Guaranty Ltd. (AGO) �is forecast to post third-quarter earnings of 63 cents a share.
Top 10 Heal Care Companies To Watch For 2014: GrayMark Healthcare Inc.(GRMH)
Graymark Healthcare, Inc. provides care management solutions to the sleep disorder market based on various independent sleep care centers and hospital sleep diagnostic programs operated in the United States. The company offers diagnostic sleep testing services and care management solutions for people with chronic sleep disorders. It also sells equipment and related supplies and components, which are used to treat sleep disorders. The company?s products and services are used primarily by patients with obstructive sleep apnea. As of May 23, 2011, it owned and operated 98 sleep laboratories, including standalone or independent diagnostic testing facilities, rural outreach sites, and hospital or provider agreements throughout the United States. Graymark Healthcare, Inc. is headquartered in Oklahoma City, Oklahoma.
Monday, January 6, 2014
Why You Should Care About This Diabetes Drug Saga
GlaxoSmithKline's (NYSE: GSK ) diabetes drug Avandia causes heart issues. Or maybe it doesn't. Either way, regulators figured the risks weren't worth the benefit, leading to the EU pulling Avandia off the market and the Food and Drug Administration slapping a very restrictive Risk Evaluation and Mitigation Strategy, or REMS, with an Elements To Assure Safe Use, or ETASU, which hampered new prescriptions.
And now it's not. I guess.
After a two-day advisory committee meeting, half of the 26 panelists recommended that the FDA modify the REMS/ETASU, with seven others voting that they should be removed altogether. Five thought the REMS/ETASU should remain, and only one panelist voted for the most restrictive option, removing Avandia from the market.
The FDA has the final say, but assuming it follows its outside experts' advice, it seems likely that the restrictions on Avandia sales will be lightened a little.
Damage done
Not that lightening the restrictions is likely to help sales all that much. In its heyday, Avandia sales topped $3 billion annually. Now Glaxo doesn't even bother breaking out sales. Best guess, Avandia is lumped into Glaxo's metabolic category, where it was categorized previously before sales slumped. The category managed U.S. sales of just $2 million -- with an M -- in the first quarter of 2013.
Even if that's all of that is Avandia and if sales increase tenfold, we're still talking about a minuscule drug.
I'm not sure Galxo could even get that many doctors to prescribe the drug. They've moved on to Merck's (NYSE: MRK ) Januvia. Sales of Januvia and combo drugs that contain it jumped from $2.4 billion in 2010, the year the restrictions started, to $5.7 billion last year.
The class of diabetes drugs that Januvia belongs to, DPP-4 inhibitors, has increased immensely with the addition of AstraZeneca's (NYSE: AZN ) and Bristol-Myers Squibb's (NYSE: BMY ) Onglyza, which is approaching blockbuster status itself; sales were up 25% in the first quarter. And since Onglyza was approved, Eli Lilly and Takeda have gained approval of DPP-4 inhibitors.
Takeda's Actos, which is a thiazolidinedione like Avandia, is now available as a generic. If a doctor wanted to prescribe a thiazolidinedione, it seems likely they'd go for the cheaper drug that doesn't have the stigma. Actos has been associated with the potential for bladder cancer, but that data seems even sketchier than Avandia's heart data.
And if doctors don't like any of those choices, there's a new class of drugs called SGLT-2 inhibitors that work though a different mechanism. Johnson & Johnson (NYSE: JNJ ) got the first one approved earlier this year. Since it's a new class of drugs, doctors are likely to be cautious, but given the choice between unknown real-world experience and Avandia's history, I think most doctors would choose the unknown.
New precedence?
If the FDA follows the panel's advice, we can add it to the growing evidence that the agency is lightening up. That's good news for companies such as Sarepta Therapeutics, that's trying to get its Duchenne muscular dystrophy drug, eteplirsen, approved with very little data and Amarin, which is requesting an expansion of the number of treatable patients for its fish oil Vascepa before clinical outcome data is available.
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Sunday, January 5, 2014
5 of Last Week's Biggest Losers
There's never a shortage of losers in the stock market. Let's take a closer look at five of this past week's biggest sinkers.
| Oncothyreon (NASDAQ: ONTY ) | $1.99 | 21% |
| Cliffs Natural Resources (NYSE: CLF ) | $20.69 | 12% |
| Molycorp (NYSE: MCP ) | $6.52 | 11% |
| Taseko Mines (NYSEMKT: TGB ) | $2.10 | 11% |
| Velti (NASDAQ: VELT ) | $1.82 | 10% |
Source: Barron's.
Let's start with Oncothyreon, which took a hit after offering uninspiring clinical data for Stimuvax. The biotech and its investors had big hopes for the experimental lung-cancer treatment, but its latest study didn't meet Oncothyreon's goal of materially improving the overall survival rate.
Cliffs Natural Resources saw its shares soar 18% a week earlier after receiving a timely FBR Capital analyst upgrade, but this week the iron ore miner resumed its losing ways. Fears of diminishing demand -- particularly as China's once smoking-hot economy slows -- are weighing on the shares. The stock has shed nearly half of its value in 2013.
Molycorp tumbled on a week that slammed most commodity stocks. The volatile rare-earth minerals miner had moved sharply higher earlier this month after delivering a much smaller quarterly deficit than analysts were expecting, but Molycorp joined other mineral miners on the way down this week.
Taseko Mines slipped earlier this month after posting a quarterly loss and announcing that its CFO was leaving. This week's slide was related to the continuing slump in metal prices, and a move on Friday to initiate a shareholder-rights plan did little to lift the shares of the Canadian copper miner.
Velti fell after the Dublin-based mobile marketing services provider posted disappointing quarterly results. Revenue fell 21% in the latest quarter. Wall Street knew it was going to be a bad quarter. Velti had let go a fifth of its staff earlier this year, bracing for a slowdown. However, Velti's guidance wasn't very encouraging.
Ready for a bounce
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