who ya gonna call? wallbusters!
Followers | 289 |
Posts | 10,327 |
Boards Moderated | 1 |
Alias Born | 09/17/2010 |
Twitter Profile: | Temporarily Unavailable |
Follow on Twitter: | Follow @ Temporarily Unavailable |
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Yasheng Group Announces Successful Increased Potato Harvest Utilizing Modern Agriculture Techniques
Sep. 27, 2010 (Marketwire) --
REDWOOD CITY, CA -- (Marketwire) -- 09/27/10 -- Yasheng Group (OTCQB: YHGG), a leading agriculture conglomerate which focuses on Chinese and international markets, is pleased to announce a successful potato harvest utilizing modern agriculture techniques. Yasheng Group is a major potato supplier for KFC, owned by Pepsi, and Oishi (China), a leading national brand of snack foods and confectionery product. Yasheng potato products have also been given the "Green Food" status by the PRC Ministry of Agriculture Green Food Department.
Yasheng has been developing their potato cultivation segment over the past few years by utilizing modern agriculture techniques and through international cooperation. The Company has employed some of the most advanced mechanical equipment, such as industrial seeders and harvesters from Germany and the U.S.
The Company has overcome the barriers of drought conditions by applying single-ridge and single-line non-mulching cultivation models with drip irrigation. The company also has benefited from investments in their hybrid seed stock breeding base project producing a virus-free potato strain, which improved the variety, guarantees consistent quality of the seed, and meets international standards. The breeding of hybrid seed stock has increased the production of seeds to 13.2 - 15 metric tons per acre. The production of edible potatoes has reached 14.4 metric tons per acre.
In 2010, one of Yasheng Group's subsidiary potato cultivation bases was awarded as a "High Production Agriculture Industrial Model," by the PRC Ministry of Agriculture because of their successful project management, large-scale planting base, quality control, and modern operational management.
Within one subsidiary of Yasheng Group in 2009 on 1,950 acres the Company produced 27,000 metric tons with a revenue of $18.4 Million and $3.6 Million in profit. During 2010 on 2,000 acres the Company produced 30,000 metric tons of potatoes, which will create an estimated revenue of $23.4 Million and $4.8 Million in profit. Between 2011 and 2012 the Company will increase the production base to 5,000 acres producing approximately 75,000 metric tons annually. It is expected that the annual revenue of this subsidiary's potato segment, by 2012 will increase to $71.6 Million, with a profit of approximately $15 Million.
The Company plans to continue implementing these modern agriculture techniques company-wide over the next 3 to 5 years and realize the full potential of their land resources.
About Yasheng Group:
Yasheng Group (OTCQB: YHGG) is a diversified agriculture conglomerate incorporated in California. Yasheng's core business focuses on hi-tech agriculture which takes advantage of Yasheng's use of extensive fertile lands in China, advanced irrigation facilities, extensive green housing, strong R&D, agro, and biotechnology capabilities, as well as its skilled workforce in China. The company conducts business selling 6 major product segments including field crops, vegetables, fruit, specialty crops, hops, hemp, seeds, beef and poultry. Yasheng has total assets of approximately $1.7 billion USD and over 15,000 employees. Yasheng Group has 155,097,355 shares issued and outstanding as of June 30, 2010.
Further information concerning Yasheng Group can be found on the corporate website: http://www.yashenggroup.com/
Forward-Looking Statements:
Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.
Contact:
Yasheng Group Investor Relations Dept.
E-mail Contact: Email Contact
Source: Marketwire (September 27, 2010 - 8:00 AM EDT)
News by QuoteMedia
www.quotemedia.com
Cooper Holding Files Reverse
Sep. 27, 2010 (GlobeNewswire) --
COTTAGE GROVE, Tenn., Sept. 27, 2010 (GLOBE NEWSWIRE) -- Cooper Holding Corp (Pink Sheets:SHAR), currently trading as Sharp Holding Corporation, a publicly traded company engaged in the wholesale and retail sale of a diverse line of outdoor products, announces that on September 22, 2010 an OTC Equity Issuer Notification Form was filed with FINRA.
On August 24, 2010 the Board of Directors for Cooper Holding Corp met to discuss the name change, reverse stock split and issuance of warrants which shareholders approved on March 10, 2010. Shareholders voted in favor of a 1:100 reverse split and the issuance of a warrant with a $1.00 strike price. At the time of this vote the stock price was such to allow for such an action to take place and be beneficial to both the company and the shareholder.
In consideration of the shareholders, the Board reviewed several options surrounding the issue. As a result, the Board has elected to reduce the reverse split ratio to 1:25 and a reduction of the warrant's strike price to $0.10. Warrants shall be issued in the following manner. After the reverse split is completed, each shareholder of the new Cooper Holding Corp shares will be issued one warrant for each share in hand. Each warrant will permit the purchase of 25 additional shares at an exercise price of $0.10.
The anticipated effective date for the reverse split and name change to Cooper Holding Corp is September 30, 2010. As the old Sharp shares are delivered to the transfer agent, new Cooper shares will be issued. The transfer agent will then notify the company with the shareholder contact information and other pertinent information so the warrants can be issued. No Cooper shares will be issued to an individual/broker until all old shares from a specific certificate are received.
"Our goal has been and will continue to be, to build shareholder value. The ability for this Board to be flexible and ready to move in a new direction when necessary is ultimately a key element to our success." -- Dan Cooper, President, Cooper Holding Corp.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently.
This highest-value, lowest cost press release is a service of So Act Network's Press Club. www.pressclub.biz
CONTACT: Cooper Holding Corp.
Media contact:
Dan Cooper
866-972-5463
Fax: 731-782-3332
Source: Globe Newswire (September 27, 2010 - 8:00 AM EDT)
News by QuoteMedia
www.quotemedia.com
Ideal Financial Solutions Enters Into a Strategic Alliance With New Benefits
Sep. 27, 2010 (GlobeNewswire) --
LAS VEGAS, Sept. 27, 2010 (GLOBE NEWSWIRE) -- Ideal Financial Solutions, Inc. (Pink Sheets:IFSL) announced today it has entered into a strategic alliance with New Benefits located in Dallas, Texas. New Benefits is a twenty-year old company that develops, markets and distributes cost-containment benefits to over 3000 businesses representing over twenty million consumers nationwide.
As part of this alliance, Ideal will be able to offer three of New Benefits' products to club members. This package includes Life Lock™, one of the most respected identity theft programs in the industry, as well as discount legal and tax services.
"New Benefits offers some of the most innovative employee-based products and services that I have seen in the entire industry," stated Steve Sunyich, CEO of Ideal Financial Solutions. "We are excited to be able to expand our products and to be working with such a great group. We believe Life Lock™ will soon become a household name and we are glad to give our customers access to their service."
For more information please join us on our daily Conference Calls:
Time: 10:00 AM Pacific Time Monday – Friday
Conference Number: (712) 432-6148
Access Code: 100033
About Ideal Financial Solutions
Based in Las Vegas, Nevada, Ideal Financial Solutions (www.idealfsi.com) provides the education, support and automated tools to create additional cash resources, rapidly eliminate all non-asset-building debt and build financial independence. As a leader in debt relief services, Ideal uses its automated CashFlow Management© tools (www.myifs.com) and its Credit to Wealth Systems to assist individuals, families and small businesses in building financial independence. To view more information on Ideal's new humanitarian program soon to be launched please visit www.idealgoodness.com. To view a short video demo of our services go to:
Garb (OTCBB: GARB) Is Launching Its High Throughput Tire Recycling Secondary Shredder and Granulators, Available for Sale Immediately (OTCQB: GARB)
The Garb T80/120 With Innovative Knife Adjusting Technology and 5 Year Warranty
Sep. 27, 2010 (Marketwire) --
SALT LAKE CITY, UT -- (Marketwire) -- 09/27/10 -- Garb Oil & Power Corporation (OTCBB: GARB) (OTCQB: GARB) www.garbop.com announces the introduction of its heavy duty, high throughput Secondary Shredders and Granulators, using knife adjusting technology.
Garb President John Rossi states, "We have provided all of our Secondary Shredders - Granulators with semiautomatic, or as an option fully automatic, knife adjustment system. This means the knife can be adjusted during operation without stopping the machine. This procedure leads to a re-sharpening of the knives." Garb CTO Igor Plahuta states, "To make this happen, we have implemented this knife adjustment system in our secondary shredders in order to ensure a more or less equal rotor knife position in relation to the stator knives. This is very important for wear intensive production such as tire and E-Scrap (E-Waste) shredding, where the knives need to be adjusted 4 times a day which normally creates a downtime of 3-4 hours each day. By this adjustment system we have created a machine with an availability of 95%. In less wear intensive applications like waste shredding, the availability of the machine is more important. Large volume plants rely on the capacity and workability of such machines to sustain throughput and maximize production."
----------------------------------------------------------------------------
Secondary Shredders - Granulators
----------------------------------------------------------------------------
Rotor dimension
PRODUCT sizes in inches Max. power Weight Screen size in Through put
NAME (mm) in kw in tons inches (mm) rate
----------------------------------------------------------------------------
Tires (tyres)
----------------------------------------------------------------------------
GARB 36.4 x 54.5 4-5 ton/h
T80/120 (800 x 1200) 250 35 1 (22) (80% < 15 mm)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ALL MACHINES HAVE A 5 YEAR WARRANTY*
----------------------------------------------------------------------------
*wear and tear parts excluded
Garb Oil & Power Corporation is a company dedicated to the application of ClosedCycle™ technology and NoWaste™ residue. Our processing plants for tire recycling, E-Waste recycling and E-Scrap recycling Recycling, Waste to Energy and OTR, are all developed with these principles in mind. Garb believes that processing waste should be economically viable and leave NoWaste™. It is our endeavor to build plants that continue to push the boundaries for the attainment of the ClosedCycle™ principle and a world with NoWaste™ www.garbop.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.
Statements contained in this document that are not historical fact are forward-looking statements based upon management's current expectations. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. The results anticipated by any or all of these forward-looking statements may not occur. Garb Oil & Power Corporation is not required to update its forward-looking statements.
CONTACT:
Garb Oil & Power Corporation
John Rossi
President
Ph: +1-801-738-1355
Fax: +1-801-738-1102
Email Contact
www.garbop.com
Source: Marketwire (September 27, 2010 - 7:00 AM EDT)
News by QuoteMedia
www.quotemedia.com
Current/Recent Stock Promotions
Today
Stock Promoters
AFLB MoneyTree
Yesterday
Stock Promoters
RXAC The Bull Report
CHLN Breakout Investments
CXTO Penny Pay Day
ENTK Small Cap Voice
FIRMS Hot Shot Stocks
FLPC Wall Streets Hottest Stocks
FWDG OTC Picks
GEFI PS Coach
GELV Ace Penny Stocks
GHNA Stock Stars
HEME NanoCap Gems
HLNT Our Hot Stock Picks, Xtreme Picks
HRNF LevelStock
ISIM Ivy League OTC
LVCA The Stock 411
MBHS OTC Market Alerts, OTC Market Bulls
MNDP Blaque Capital Stocks
PROT CRWE Select, Doubling Stocks, PennyOmega, Stock PR
PWRM CRWE Select, Doubling Stocks, Penny to Buck, PennyOmega, Stock PR
PYBX OTC Blaze, Too Nice Stocks
PYTO Monster Penny Stocks
RMDT Alpha Penny Stock, Franks Penny Stocks, HotOTC, Stock Egg
RXAC Solvent Stocks
SILA Major Penny Stocks
SOPV OTC Stock Exchange, Wall Street Grand, Whisper from Wall Street
9/26/2010
Stock Promoters
USAE DG Penny Picks, PSNewsletters, PSpicksTV
FLPC Stock Exploder, Wall Streets Hottest Stocks
GHNA Stock Stars
HLNT Our Hot Stock Picks, Xtreme Picks
ISIM Hyper Growth Stock
PWRM CRWE Select, PennyOmega, Stock PR
PYBX Alpha Penny Stock
RIMM Doubling Stocks
RMDT HotOTC, Stock Egg
RXAC Solvent Stocks
USAE PSNewsletters, PSpicksTV
9/25/2010
Stock Promoters
ZSTN Penny Stock DD
AMZN CRWE Select
HLNT Xtreme Picks
PROT Penny to Buck, PennyOmega, Stock PR
9/24/2010
Stock Promoters
REDF Lebed, Stock Egg
AAPL Doubling Stocks
ATPT StockTwiter.com
BOOK Alpha Penny Stock
CHMD Hyper Growth Stock
CIEC Whisper from Wall Street
GNAU Small Cap Voice
HEME Nano Cap Gems, NanoCap Gems
MZEI Stock Guru News
OPNT Stock PR
PCPZ Hyper Growth Stock
PYBX AcutalGains, Alpha Penny Stock, OTC Blaze, Too Nice Stocks
RIMM CRWE Select
SGCA OTC Stock Exchange
TIBX PennyOmega
TOOT Small Cap Voice
TOPZ Nano Cap Gems
VIZS Wise Penny Stocks
VKNG Stock Guru News
Read more: http://stockreads.com/#ixzz10oeYsQHF
Recent Penny Stock Newsletters
•Breaking: RXAC - Takeover target for Omnisource?
Today 5:15 AMby The Bull Report
•AFLB Biotech Pick! MoneyTree`s New Breakthrough.
Today 1:51 AMby MoneyTree
•Watchlist Update - RMDT +$$$ HEME +19% PYBX +56%
Yesterday 10:49 PMby Alpha Penny Stock
•OTCMarketAlerts News Alert: MBHS
Yesterday 10:15 PMby OTC Market Alerts
•Our New Trade Alert Is Lake Victoria Mining Company, In...
Yesterday 9:49 PMby Wise Penny Stocks
•thestock411.com (LVCA.OB) Singida Gold Project *Massive...
Yesterday 9:49 PMby The Stock 411
•New Featured Company: FutureWorld Energy, Inc. (FWDG) W...
Yesterday 9:49 PMby OTC Picks
•StockStars.net Monday Night Watch List
Yesterday 9:15 PMby Stock Stars
•Ourhotstockpicks.com: HLNT - Approaching a new record h...
Yesterday 9:07 PMby Our Hot Stock Picks
•OTCMB News: mBeach Software Inc. ("MBHS") Presses for P...
Yesterday 9:07 PMby OTC Market Bulls
•Watch List for Tuesday - RMDT up 166 percent intra-day
Yesterday 8:49 PMby HotOTC
•OTCPicks.com Stocks to Watch for Tuesday, September 28t...
Yesterday 8:49 PMby OTC Picks
•StockEgg.com - My alert on RMDT closes up 113% today
Yesterday 8:34 PMby Stock Egg
•CXTO: Another Green Play
Yesterday 8:17 PMby Penny Pay Day
•Xtremepicks.com: HLNT - Just keeps on going and going a...
Yesterday 7:29 PMby Xtreme Picks
•OTCStockExchange SOPV Alert
Yesterday 6:49 PMby OTC Stock Exchange
•WhisperfromWallStreet SOPV Alert
Yesterday 6:34 PMby Whisper from Wall Street
•HRNF: Heavy Trading Day, Company Updates Inside & Chart...
Yesterday 6:34 PMby LevelStock
•CRWE, PROT, PWRM, - PennyOmega.com Watch List for Tuesd...
Yesterday 6:29 PMby PennyOmega
•Lebed.biz Alert - Our rejection of buyout pays off big!
Yesterday 6:15 PMby Lebed
•CRWE, PROT, PWRM - Expanding Infrastructure, Cell Thera...
Yesterday 5:49 PMby Doubling Stocks
•OTCMarketAlerts Featured Company: MBHS
Yesterday 5:49 PMby OTC Market Alerts
•CRWE, PROT, PWRM, - CRWESelect Stocks To Watch For Tues...
Yesterday 5:49 PMby CRWE Select
•Three Great Penny Stocks To Watch - Crown Equity Holdin...
Yesterday 5:49 PMby Penny to Buck
•Stock Watch for September 27, 2010 from Stock-PR.com - ...
Yesterday 5:34 PMby Stock PR
Read more: http://stockreads.com/Stock-Newsletters-Browse.aspx#ixzz10oeQBsRJ
Top Penny Stock Newsletter Picks
SMHS in 15 Newsletters
IPTV in 9 Newsletters
PCPZ in 9 Newsletters
GGMC in 8 Newsletters
DTSL in 7 Newsletters
EIGH in 7 Newsletters
SILA in 7 Newsletters
SOPV in 7 Newsletters
AFLB in 6 Newsletters
HEME in 6 Newsletters
HLNT in 6 Newsletters
PROT in 6 Newsletters
PWRM in 6 Newsletters
PYBX in 6 Newsletters
SPBU in 6 Newsletters
Top Stock Picks From The Stock Boards
PCLI (4) CCTC (4) SSWC (3) PRPM (3) MGQG (3) ICOA (3) EGIL (3) CYCA (3) CNST (3) ANWM (3) PYBX (2)
Board Buzz from OTCBB Alerts
Symbol # Picks Authors
CNST 3 charlie dakota , JJSeabrook , glassy
SSWC 2 SmartDayTrader , paramount
PYBX 2 aliangel , mathew633
PRPM 2 SmartDayTrader , paramount
MGQG 2 jaxstraw , Iluvbbs
LCRE 2 reese12 , The_Champ
WANG 1 WANG
VKNG 1 ronpopeil
USAT 1 mathew633
TYTN 1 ash111
SRCP 1 Epic
SOLU 1 SmithR
RPPR 1 dee44
PVHO 1 powerbattles
POSC 1 JJSeabrook
NITE 1 riverandfold
MYFT 1 The_Champ
MVIR 1 MVIR
INIA 1 ChangeDirector
HTLJ 1 Adonis74
GTLL 1 JJL
GPGD 1 Vigo
ENSLR 1 mathew633
CPSL 1 AngusYoung
COUV 1 difiore4
BDEV 1 Rawnoc
ATWEC 1 sgt947
ANDR 1 chesco71_com
Board Buzz from Yahoo Shakerzandmoverz
Symbol # Picks Authors
CCTC 4 Gary Marlow , kingofpennies2010 , jberline89@... , KingOf
THES 1 FOWARD1@...
SSWC 1 mikehonglin
PRPM 1 mikehonglin
IDGI 1 Garyev
Board Buzz from BB’s Stock Haven
Symbol # Picks Authors
ICOA 3 Doc Holliday , MarketGeometry , MOMO
EGIL 3 accent2k2 , lukin4winners , danrpoints
ANWM 3 Hardwood , MOMO , Bear_market
PCLI 2 carausius , MOMO
NXPN 2 slim_pickins , scriznik
LVCA 2 Quickinvestmentss , 8-K
WTWO 1 Ragnarok
WTCT 1 hArdCoReJESUSfreAk
WNBD 1 Recognizer
TIVU 1 dale45
SMPP 1 Le2dynasty
SHOM 1 Rubenstien
RMDT 1 Brad1177
POPN 1 carausius
PHRB 1 ospreyeye
MXMI 1 iwant2badrifter
MSOA 1 carausius
MNDP 1 Matako
MGQG 1 MJAM2020
HRNF 1 uranium-pinto-beans
HNSS 1 MOMO
GRDO 1 sammyk
EXTO 1 Tony_From_MI
EFGU 1 MOMO
CYCA 1 Kurupt
CTNO 1 wallwizz
BMGI 1 barn dog
BILL 1 puffadder
Buzz from Raging Bull
Symbol # Picks Authors
PCLI 2 damian33456 , seacraft2316
CYCA 2 energy_wave , anydaynow_1ar
STHG 1 clashing
SNDY 1 x-ray-eyes
QASP 1 grajekk
PPBL 1 theliwhiteshark
LLEG 1 bestbydesign
ICBU 1 rctrader2
HLNT 1 steve10554
GOTTA 1 anydaynow_1ar
DGMA 1 rctrader2
CYTTA 1 anydaynow_1ar
BEHL 1 grajekk
ATWT 1 derf74
AAVG 1 turnupgreen
Top Ticker Mentions in Chat
Recent Popular Stocks
1) KBLB(17)
2) SSWC(16)
3) ITCJ(13)
4) LQMT(7)
5) LFBG(6)
6) WTWO(6)
7) HFBG(6)
8) ICOA(5)
9) AFLB(5)
10) URRE(4)
Highest Percentage Gainer Penny Stocks
SYMB Last %Chg Volume
EIHCE 0.04 250.0% 145,600
ADPAN 0.01 100.0% 44,600
GRNE 0.009 76.5% 205,000
CTDH 0.07 75.0% 83,200
DHNA 0.27 74.2% 186,300
VNWI 0.01 66.7% 23,200
PBOF 0.03 66.7% 4,393,000
CMKT 0.05 57.1% 30,400
CCAJ 0.0065 54.8% 25,000
CTCC 0.07 51.1% 497,000
MDLH 0.12 50.0% 35,800
Penny Stock Price Jumps
SYMB Last %Chg Volume
NHWK 6.38 96.3% 8,815,218
PBOF 0.03 66.7% 4,393,084
AAI 7.34 61.3% 91,580,784
CTEFF 0.26 43.2% 1,236,350
NGBF 0.19 35.7% 4,596,910
Penny Stock Volume Spikes
SYMB Last %Chg Volume
YRCW 0.31 14.8% 118,463,000
BFHJ 0.0023 64.3% 115,080,160
AAI 7.34 61.3% 91,580,784
LVLT 0.98 1.0% 72,700,480
MDGC 0.0055 -9.8% 40,562,136
Penny Stocks (Most Active)
SYMB Last %Chg Volume
SSWC 0.0006 0.0% 150,067,300
POPN 0.0008 0.0% 147,003,900
CNEX 0.0008 0.0% 123,783,100
BFHJ 0.0023 64.3% 115,080,100
EXTO 0.0008 0.0% 57,340,200
QASP 0.0031 -16.2% 51,113,600
MNDP 0.0014 27.3% 48,241,900
MDGC 0.0055 -9.8% 40,562,100
HMIT 0.001 0.0% 36,045,500
FNMA 0.3 16.1% 35,733,700
HFBG 0.0007 0.0% 34,235,100
How Volatility Can Be Your Friend
Since 2007, the simple mention of the word "volatility" has been enough to make most investors cringe. Many people would rather just avoid the market's hiccups altogether. But what if I told you there was a way to use a stock's volatility to your advantage and potentially increase your profit potential?
Beta, and how to use it
Beta is a metric that uses historical price data to tell you whether a stock is more or less volatile than the market. A stock with a beta of 1 will move in tandem with the market. But if stock XYZ has a three-year beta of 1.50, that means that if the market as a whole were to rise by 10% over that period, we would expect to see a 15% rise in XYZ. Conversely, if the market dropped by 10%, we would expect XYZ to fall by 15%. The higher the beta, the more volatile the stock.
If you believed in the prospects for a bull market, picking out high-beta names could give you the opportunity to outperform the indexes to the upside. Likewise, if you're more risk-averse or think the market is ready to fall, a low-beta stock could help preserve your capital and reduce dramatic price swings in your portfolio.
Let's look at an example in each scenario and see how they can help you potentially make money.
Targeting high-beta companies
Sectors that are more susceptible to the peaks and troughs of the economic cycle are more likely to have higher betas. Technology is a good example. It's most often the first sector to rebound with a vengeance out of a recession and one of the first to freefall when the market heads lower. For those out there with an appetite for risk, a high-beta tech company may be just what you're looking for.
One name that stands out in this sector is Telestone Technologies (Nasdaq: TSTC), a company supplying networking solutions to China's 3G networks. If you anticipate a boom in China's wireless-communications market, you'd be wise to seek out a company like Telestone, which has its technology firmly entrenched in the 3G market.
Telestone, with its three-year beta of 3.55, provides the potential for appreciation and index outperformance that more risk-friendly investors with long time horizons should be looking for.
Stabilizing your portfolio with low-beta companies
Although the economic news confirms that we're out of a recession, some economic bumps remain. Companies with low betas can stabilize your portfolio during volatile times such as these.
My favorite sector to turn to for capital appreciation with relatively minimal price fluctuations is Utilities -- and my favorite company in this sector is Duke Energy (NYSE: DUK), which provides electricity and natural gas, two essential staples. Although the economic cycle does have some bearing on its business, people will still use electricity and natural gas regardless of how bad things ever get.
Duke Energy has a three-year beta of 0.45 -- making it less volatile than the market as a whole -- and a healthy dividend of 5.5% per year. Over the past three years, including dividends, Duke Energy has risen by 12% while the S&P 500 has fallen by 25%. Although you can't eliminate your investment risk, tapping into low-beta companies such as Duke can reduce the amount of volatility your portfolio is exposed to.
Proceed with caution
Beta is not without its flaws, and you shouldn't use it as the sole basis by which you choose an investment.
One problem is that beta doesn't consider a company's underlying fundamentals. Earnings growth -- or a lack thereof -- is the primary driver of a stock's price. Beta doesn't take earnings growth into account, but it's something you shouldn't ignore. Take Ambac Financial (NYSE: ABK), for example. If you expected rapid economic growth and relied only on Ambac's three-year beta of 3.07, you'd have completely missed its most recent 10-Q, which hinted at a possible bankruptcy.
What's more, beta implies that a stock has just as much of a chance of rising as it does of going down, and that's not always the case. It also factors in only historical price data, so it doesn't differentiate how investment-worthy a stock is based on price. Is Telestone Technologies as good of a buy at $30 as it is at $10? Probably not, but beta leads us to believe so.
Your Foolish takeaway
Beta is another piece in solving the investment puzzle. It can help you increase profits in bull markets and somewhat shield you in bear markets, but you have to look at it objectively, and in tandem with other metrics, before making an investment.
These Tech Stocks Will Make Me Rich
By Tim Beyers
Welcome to week 109 of my stock-picking throwdown with Mr. Market. Let's get right to the numbers.
Company
Starting Price*
Recent Price
Total Return
Akamai (Nasdaq: AKAM)
$22.23
$50.59
127.6%
Harris & Harris
$6.22
$3.96
(36.3%)
IBM
$124.01**
$131.67
6.2%
Oracle (Nasdaq: ORCL)
$22.44**
$27.12
20.9%
Taiwan Semiconductor
$9.35**
$9.66
3.3%
AVERAGE RETURN
--
--
24.34%
S&P 500 SPDR (AMEX: SPY)
$121.20**
$112.50
(7.18%)
DIFFERENCE
--
--
31.52
Source: Yahoo! Finance.
*Tracking began on Aug. 7, 2008.
**Adjusted for dividends and other returns of capital.
A seesaw week gave a slight advantage to Mr. Market in our three-year race to the top, but I'm still ahead by more than 30 percentage points. I've been fortunate, to say the least.
My guess is that chasing outsized returns is going to keep getting tougher as Washington stumbles in the dark, reaching for an answer to how to work through the jobless recovery we're suffering through as a nation. National unemployment stood at 9.6% in August.
Former President Bill Clinton has a plan for bringing back jobs, and it involves subsidized job training to fill current openings. He estimates that the jobless rate would drop to 7% or less if employers were able to fill their advertised needs. But this is also harder than it sounds; training can't replace experience, and forcing corporations to hire trained yet inexperienced workers could prove disastrous.
Even so, fresh economic data says the recession is over. The National Bureau of Economic Research says the nation got its growth mojo back in June 2009. Stock market data would seem to support that conclusion: The S&P 500 has risen by roughly 25% since June 1 of last year.
For investors, this raises a perplexing and as-yet-unanswered question. How important is the unemployment rate to the health of the stock market?
The week in tech
Whatever the answer, what we know about tech is that software development requires brainpower that can't be easily automated. As such, improving employment rates in tech hubs Silicon Valley, Seattle, Boulder, San Francisco, Boston, Portland, and New York could foreshadow increased earnings.
This is also true of minor tech hubs such as Raleigh, N.C. Red Hat (NYSE: RHT) calls Raleigh home. Shares of the leading Linux distributor hit a fresh 52-week high on Thursday after reporting a 20% increase in revenue. Management also raised guidance, citing improving business conditions.
Red Hat's story has become a common one. Several tech issues have crushed the market in 2010. But we also needn't discount the plodding performers, for it's these undervalued issues that tend to create long-term wealth. Microsoft (Nasdaq: MSFT) is this sort of stock, and that's the reason the Fool recently bought shares of the software giant for its portfolio of "11 O'Clock" stocks.
I like the call. Mr. Softy is priced inexpensively, and cheap stocks make for good ballast in a portfolio of high achievers. Yet it's the disruptors that, judging by history, end up as millionaire-maker stocks.
Look at David Gardner. He produced a decade of 20% returns in the real-money Rule Breaker portfolio by betting on a collection of innovators and then holding them for the long term. Tom Gardner's "simpleton portfolio" was also a 10-year winner. I believe that, with my tech portfolio, I will achieve similar success.
Checkup time!
Now let's move on to the rest of today's update:
•At Oracle's annual meeting this week, CEO Larry Ellison told shareholders that they'd see his company buy up chip suppliers, Bloomberg reports. The goal? Be more vertically integrated, like Apple (Nasdaq: AAPL). I've doubts whether this is the right strategy, especially since Oracle already owns rights to the SPARC server architecture it acquired with Sun Microsystems. I'll have more on this in a follow-up commentary.
•An Oppenheimer & Co. analyst this week raised its price target for Akamai from $47 to $58 per share and maintained a rating of "outperform." According to the Associated Press, the increasing popularity of video drove the upgrade. Color me unsurprised; Akamai CEO Paul Sagan has been touting his company's video business for months.
How to Play the Upcoming Elections
By Fool TV
What do the coming midterm elections mean for your portfolio? Motley Fool Income Investor advisor James Early says that more than just defense contractors such as Northrop Grumman could benefit from a Republican majority. See, the recent financial-reform law would seem to have already chartered the course for near-term financial regulation, but in fact, it puts off numerous decisions for various agencies to decide -- agencies that might lean toward incumbent banks such as Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), and Goldman Sachs (NYSE: GS). And if Democrats keep control of Congress? Don't be surprised to see a bump in infrastructure spending, which would benefit stocks such as Cemex (NYSE: CX) or Fluor (NYSE: FLR).
Dividend Growth Stocks You Need
By Fool TV
Academic evidence shows that dividend stocks outperform. But companies that have raised their dividends do especially well -- and companies that are about to raise their dividends do better still.
Find these the hard way, by sweating through financial statements and guessing who'll raise next, or take Motley Fool Income Investor advisor James Early's suggestion: Simply find consistent raisers and latch on. Your options, Fool, are many: Procter & Gamble (NYSE: PG), 3M (NYSE: MMM), and Cincinnati Financial (Nasdaq: CINF) have raised payouts for 50 years or more. A newer -- but still consistent -- company is Magellan Midstream Partners (NYSE: MMP.
Android's Kindle Adds Amazon's Shelfari
By Darleen Hartley, The Bright Side of News*
Amazon.com (Nasdaq: AMZN) bought Shelfari, a Seattle social-networking startup, around the same time it acquired Victoria, B.C.-based AbeBooks, which held an equity stake in Shelfari's rival, Library Thing. Now Shelfari is making its way to the Android Kindle.
This move puts even more social-networking features on the e-reader. An earlier upgrade this year let users share e-book passages with friends and followers on both Facebook and Twitter. Previously, the Kindle's 3G wireless connection could access only Amazon's bookstore.
The upgrade came Thursday, making it possible to view book details from Shelfari on smartphones running the Google (Nasdaq: GOOG) operating system. Screen-orientation locking and full-text search both come with the new release, and new features allow Android phone users to add notes and highlight books to sync with Kindle apps on the e-reader or an Apple (Nasdaq: AAPL) iPad.
Shelfari lets you create a virtual bookshelf, where friends can see what you are reading and you can review and discuss them. A Shelfari widget works on most blogs and social networks, including Blogger, LiveJournal, MySpace, TypePad, Xanga, Vox, WordPress, and Facebook.
A quick review of Shelfari reveals a young-adult focus. It was interesting to find that one of my own favorite authors, James Patterson, has a series of sci-fi/fantasy books for a younger crowd: Maximum Ride: The Angel Experiment. The most reviewed books on the site when I looked included Mockingjay, Suzanne Collins' final installment of the Hunger Games trilogy. Among the most commented-upon books was The Story of Muhammad Ali, also written for younger readers.
Members can post their shelves, reviews, and comments. One member had added 363 books, to which someone else commented, "You probably ain't even read none of these." Let's hope his comment was meant tongue-in-cheek, or else I have grave concerns about our young readers and writers.
5 Reasons Nokia's N8 Won't Beat the iPhone 4
By Surojit Chatterjee
Nokia's (NYSE: NOK) new N8 smartphone has impressive specifications and is perhaps the best smartphone the Finnish mobile phone maker has launched yet. Its powerful camera features, Symbian 3 OS, and huge storage capacity (up to 48GB via a MicroSD card slot) are certain to attract early adopters. But can it be a threat to Apple's (Nasdaq: AAPL) iPhone 4?
Analysts don't think so. Though the N8 is "a clear improvement" over previous Nokia offerings, Gartner analyst Carolina Milanesi believes that the N8 won't wipe the floor with the competition.
According to independent technology analyst Per Lindberg, the N8 is "certainly a step in the right direction (as) it's much more multimedia" than previous Nokia smartphones, but "whether it will move Nokia's market share upwards is more debatable."
Ovum's Tony Cripps also thinks the N8 is far from being industry changing: "I don't think Nokia would position the N8 as a revolutionary device."
There are five reasons the N8 won't be able to beat the iPhone 4 or the latest smartphones from rivals such as Motorola, HTC, or Samsung.
1. Weak processor. Nokia claims the N8 has a "lightning-fast processor" and is capable of rendering graphics and playing videos and games "smoother and faster" than previous Nokia smartphones.
Technically, Nokia is right, because its last smartphone, the N97, ran on a 434MHz processor, while the N8 runs at 680MHz. However, to call the N8's processor "lightning-fast" is a misnomer. The iPhone 4, HTC's Evo 4G, Motorola's Droid 2, and Samsung's Galaxy S all run on a more powerful 1GHz processor. Comparing the N8 processor to these models is like comparing an Oldsmobile to a Lamborghini.
2. Low memory. For a top-end smartphone, the N8 has a low memory capacity. The device has only 256MB of SDRAM, while its high-end rivals boast twice as much. If you run too many applications at once, the N8 will quickly succumb to the pressure.
3. Symbian OS. Although Symbian OS is N8's strength, it is also its biggest weakness.
According to Gartner, even though Symbian OS will have controlled 40.1% of the smartphone market in 2010, it will witness a sharp drop to 30.2% by 2014. The only OS expected to gain ground over the period is Google's (Nasdaq: GOOG) Android platform, whose market share will surge from 17.7% in 2010 to 29.6% in 2014. But even Research In Motion, Apple, and Microsoft are expected to lose less OS share than Nokia will.
According to CCS Insight analyst Ben Wood, Nokia's new smartphones were "critical" in the fight to grab market share, but the Symbian software, despite refinements aimed at making it easier for developers to write apps for the phones, was "not positioned to challenge the iPhone."
"Nobody doubts Nokia's credentials. It has the market share but has lost the mindshare," Wood said. "Nokia, along with all the other mobile manufacturers, has been wrongfooted by Apple and Google, and it will be a tough road to recovery."
There's nothing to set Symbian apart from its competition, and that's contributing to its sharp decline. Symbian devices are also unable to update beyond the core system software with which they shipped. Updates are an essential part of how smartphones work -- not only to offer bug fixes, but also to introduce new features and develop brand equity and loyal users. Android, BlackBerry OS, and Apple's iOS all offer upgrade paths beyond core system updates. For instance, users of the two-year-old 3G iPhone can upgrade their device from iOS 2.0 to iOS 4.1. Likewise, anyone who got a Motorola Droid last year can switch from Android 2.0 to Android 2.2. But Nokia has historically not supported a commercial upgrade path for older Symbian-based devices.
4. Internal battery. Like the iPhone, the N8's battery is sealed inside the unit. Nokia has recommended that N8 users not try replacing the battery. "It can easily be replaced at a Nokia service center," the company said in a blog post.
5. Price. The N8 will cost $549 in the United States. Meanwhile, you can get a 32GB iPhone 4 for $299 by signing a two-year contract with AT&T. Other top-end smartphones -- including the BlackBerry Torch 9800, Droid 2, Evo 4G, and Samsung Galaxy S -- are available at subsidized prices between $149 and $249 when you sign with a provider.
Not surprisingly, some observers believe that Nokia's insistence on selling its devices unsubsidized and without operator input represents an arrogance on the company's part that has become its pitfall.
Conclusion
The N8 is no iPhone killer. It may also have a hard time competing with other leading smartphones. But analysts suggest that the N8 represents a good start from a company that's always struggled in the high-margin smartphone segment and could herald the start of a good fight toward smartphone leadership.
Oracle: Genius, or Unbelievably Stupid?
By Tim Beyers
Oracle (Nasdaq: ORCL) chief Larry Ellison apparently surprised a lot of people on Friday, when he foreshadowed plans to acquire a chipmaker. I find it surprising that anyone is surprised.
I'll get to why in a moment. First, let's review what happened.
Loading up on chips
"You're going to see us buying chip companies," Ellison told an audience at the OracleWorld conference in San Francisco. He also downplayed speculation that Oracle would seek to compete with Accenture (NYSE: ACN), Infosys, and IBM (NYSE: IBM) in professional services, media reports say.
Ellison would rather control the design and development of all the products Oracle sells and in the process become more like Apple. The key difference: Oracle sells to chief information officers, whereas Apple sells to consumers.
Investors mostly sold on the news. The stock was down half a percent in Friday afternoon trading, a sharp contrast to an otherwise broad tech rally.
Why you shouldn't be surprised
Whether it's surprise or skepticism that accounts for the selloff in Oracle stock isn't known. But I find it hard to believe anyone is genuinely surprised to see Ellison making bold predictions.
Acquisitions are Oracle's forte. Since 2004, the database king has acquired more than 30 companies. Returns on capital have come down only marginally in that time, from 17.8% in 2006 to 14% over the past 12 months. In each case, Oracle appears to be creating value above and beyond the cost of the capital it employs.
And while we've yet to see Oracle back away from the SPARC architecture it acquired from Sun, the company hasn't given investors much reason to believe that it would shepherd further development.
Last June, news reports surfaced that a planned upgrade to the SPARC architecture, nicknamed "Rock," would be canceled in light of what was then Oracle's yet-to-be-approved purchase of Sun.
The rumors were easy to believe. Semiconductors are costly to produce, and Sun's partnerships with Intel and Advanced Micro Devices (NYSE: AMD) would give Oracle plenty of options for sourcing chips for new hardware.
Which company would Oracle buy?
Apparently, Ellison wants more than just options. He wants a chip-design team working on custom database hardware that blows away anything IBM and Teradata (NYSE: TDC) can come up with.
It's up to us investors to decide whether the plan makes sense and, if it does, which companies we think Oracle should seriously pursue. Judging by Friday's top-performing semiconductor stocks, I'd say the three most likely candidates are:
•Micron Technology (NYSE: MU), up more than 7.7%. Micron specializes in memory chips used for data storage and retrieval.
•Cirrus Logic (Nasdaq: CRUS), up more than 7%. Cirrus specializes in chips for networked media products, such as digital TVs and audio and video receivers.
•AMD, up more than 6.8%. AMD is the yin to Intel's yang and at times has proved to be superior to its larger peer in developing high-performance server processors.
I asked the Fool's chip expert, Anders Bylund, which of these three names Oracle would be most likely to buy. His choice: AMD. He's long believed that a peer or systems developer would acquire the upstart chipmaker. But Oracle could also do well with AMD.
"If ever it was going to happen, this is the way it will happen," Anders said when I spoke with him on Friday. He also likes Big Blue's Power chips and NVIDIA's supercomputing designs as would-be brains for Oracle's database servers. I think he's right, but I'm willing to bet on AMD in my CAPS portfolio only. In CAPS, I've chosen the stock to outperform on the basis of a potential Oracle buyout.
The One Mobile Stock to Bet On
By Tim Beyers
How close is Facebook to becoming an operating system? It's time to ask. According to TechCrunch, the social-networking superstar is working with handset makers to create a phone tailored to its platform. Facebook denies the report.
"Facebook is not building a phone," an unnamed company spokesperson told PC Magazine yesterday. "Our view is that almost all experiences would be better if they were social, so integrating deeply into existing platforms and operating systems is a good way to enable this."
This, Fools, is what former PR guys like me call a non-denial denial. Or maybe everyone calls it that. The point is, Facebook is only saying it isn't working on a handset. Well, duh. Of course Facebook isn't working on a handset. The company's expertise is software, not hardware.
Hardware isn't the issue. Instead, a Facebook "phone" would be a mobile interface in which your Facebook account would be the home screen, with a "dialer" embedded in your contacts list. Click a contact to call, text, chat, or email.
Admit it, Facebook: TechCrunch's report makes sense.
How Facebook is like an OS
Facebook already acts like an operating system. There's an interface for programming software. There's a developer community. There's messaging and email. And most important in the mobile world: It's a location-aware service.
Mobile matters to Facebook. Of all the devices we humans use to connect, the phone is the most social. We use it to talk, chat, tweet, text, shoot and share photos, and more. Why would Facebook leave it to OS makers Apple (Nasdaq: AAPL), Google (Nasdaq: GOOG), Nokia (NYSE: NOK), and Research In Motion (Nasdaq: RIMM) to build a social interface for mobile users?
Reverse-engineer that thought for a minute. Say the rumored Google Me social network is true. What would Google do with it? How would it transform Android? I think the changes would be subtle, but significant.
Rise of the social address book
First of all, your contacts list would become your social network. Seems simple, doesn't it? But the truth is this is how it's always been. The minute we started a Rolodex or an address book, we were building a social network. Facebook, Twitter, and others made our networks more interactive by connecting us digitally. Google, with Google Me, could take the idea full circle.
Second, once you make an address book social, it creates more intuitive and real-time ways to connect with friends and associates. Take location awareness. Say you have a friend who's near a store you'll be shopping at later in the week. Sending her a timely text from your contacts list might help with your bargain hunting.
Finally, a social address book would allow you to set preferences for how and when you'd want to be reached. A simple example: Each time you have a meeting booked in Google Calendar -- and have the time marked as "busy" -- Google Me knows to send all calls to voicemail as well as mute all email and IM notifications.
This same idea applies equally to Apple's iOS, Nokia's Symbian, and RIM's BlackBerry. Now tell me that doesn't scare the beejeezus out of Facebook CEO Mark Zuckerberg. You and I both know it does.
The one mobile stock to bet on: Google
Facebook is in danger of being disintermediated by a social network that tightly integrates email and digital-contacts management, the two features that helped Palm to birth the smartphone industry with the Treo.
As you've probably already guessed, I think Google Me could be that network, and I think it could destroy Facebook.
Of course, it would take years for that to occur. What's more, I think Facebook could avoid destruction by creating the sort of cheap yet social phone interface TechCrunch described in its disputed report. Pick up the phone while you still can, Mr. Zuckerberg.
10 ETFs That Benefit From Potential "Quantitative Easing"
By Gary Gordon, ETF Expert
The PowerShares Dollar Bullish Fund (NYSE: UUP) has fallen 11% since early June. For worse or for better, the U.S. dollar's value on the world stage is the same as it was at the start of 2010.
By itself, this fact isn't all that alarming. Yet the Federal Reserve's orchestrated maneuvers in the light of day -- a dollar-devaluation process known as "quantitative easing" (QE) -- should be viewed with some apprehension.
In a perfect world, the Fed may take quantitative or qualitative steps to make it easier for banks to lend excess cash to credit-hungry businesses and families. However, QE isn't risk-free.
For one thing, banks have been opting to hold onto the cash, rather than lend it out to people/businesses with questionable credit. And boosting reserves is a way for banks to cover the enormous level of loan defaults from the housing crisis.
Secondly, when the Fed creates money out of thin air, more dollars in existence dilutes the value of the currency. It may not matter whether purchasing treasuries or risky mortgage-backed securities with the extra dollars is successful at keeping rates low; a weaker currency can limit foreign investment and/or create hyperinflation..
In mid-March of 2009, when the Fed began its first campaign of QE, the PowerShares Dollar Bullish Fund fell roughly 18.5% in just eight months. Our devalued dollar contributed to asset appreciation in stocks, commodities, higher-yielding bonds … most market-based securities. And it appears here in September of 2010 that all risk assets are rising on the same assumptions -- specifically, that the economy will either improve on its own or the Fed's QE activity will push assets higher in the near term.
Of course, the devalued dollar may not be able to purchase as much in the future. Gold at $1,300 per ounce may indeed be saying something about the U.S. dollar's purchasing power going forward.
On the flip side, if dollars are what you have in your investment accounts, and everything but the U.S. dollar is climbing in value, you oughta grab some of those assets while they are hot. On pullbacks, you'll want to consider ETFs like these, which may benefit from Fed QE:
Category
ETF
1-Month Rolling Return
U.S. Sectors
SPDR Select Industrials (XLI)
12.0%
SPDR Select Materials (XLB)
11.6%
U.S. Styles
PowerShares Nasdaq 100 (Nasdaq: QQQQ)
12.9%
SPDR MidCap (MDY)
10.0%
Foreign Stock
iShares South Africa (EZA)
14.7%
iShares Thailand (THD)
13.7%
Foreign Bond
SPDR Short-Term International Treasury (BWZ)
4.7%
WisdomTree Emerging Market Local Bond (ELD)
3.4%
Commodity
PowerShares DB Base Metals (DBB)
13.6%
iPath DJ Copper ETN (JJC)
11.8%
Cramer's Mad Money- Why Did Finish Line Finish Last? (9/24/10)
by: SA Editor Miriam Metzinger September 26, 2010
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV program, Friday September 24.
Finish Line (FINL), Nike (NKE), Foot Locker (FL)
If Finish Line (FINL) generates 60% of its revenue from sales of Nike (NKE), could Nike have a good quarter and Finish Line's earnings disappoint? Apparently so. Nike beat The Street's estimates by 13 cents with an 8% rise in revenues. Future orders were up 13%, the biggest increase in a decade. With demand rising, Nike had to step up production to keep pace.
That was the problem faced by the Finish Line; the company was so careful about keeping inventory down that it didn't have enough Nike shoes to meet demand, and factory delays and transportation problems made restocking inconvenient. That is the main reason why Finish Line missed estimates by 5 cents. Cramer would buy Foot Locker (FL) rather than Finish Line, since FL has fewer issues with execution and offers a dividend of 4.2%.
Microchip Technology (MCHP)
The chipmakers seem poised for a breakout, and Cramer would play the trend with Microchip Technology (MCHP), even though it isn't best of breed. Cramer thinks the stock is cheap enough to buy and has a solid 4.2% dividend.The company derives 81% of its revenues from microcontrollers, which are all-in-one chips used in a dizzying array of products. MCHP currently controls the 8-bit microcontroller market, but is gradually taking market share in the 16 and 32 bit business. The company recently beat estimates by 4 cents a share and saw an increase in revenues. The company's multiple of 12.5 times earnings is more like 10 when taking into account the $6 per share. Cramer would buy the stock even though it is flirting with its 52-week high.
Game Plan: Jabil Circuit (JBL), Pachex (PAYX). Walgreen (WAG), Family Dollar (FDO), McCormick (MCK),
With stocks up in September, Cramer told viewers not to be worried about taking profits. On Monday, Jabil Circuit (JBL) and Paychex (PAYX) report; Cramer would not trade the stocks but would just see what the companies have to say. Jabil should indicate whether Friday's rally was for real or was just spurred on by takeover speculation, while Paychex is a good tell for the economy ahead of Thursday's jobless number.
Walgreen (WAG) reports earnings before Tuesday's open. Cramer thinks the company is unlikely to break the string of bad news it has been facing, particularly with such intense competition. Tuesday will also see the release of the Case-Schiller numbers on housing. Cramer expects the bears to manipulate news that housing prices have declined.
Family Dollar's (FDO) report on Wednesday should give some information about the consumer. McCormick (MCK), the leading spice maker, is a buy on any decline after its report on Thursday, according to Cramer, because the company is "one of the most consistent" companies and is a "huge moneymaker."
A lack of improvement in Thursday's jobless claims may result in criticism for Obama and Cramer says the Chicago Purchasing Manager's Index is an important number to watch to justify the September rally.
LiveStock On Demand Talking Profitly, Rediff.com India Limited (REDF) & Kraig Biocraft Laboratories Inc (KBLB)
Posted by Timothy Sykes on Sun 26th of Sep, 2010 09:30:57 AM
Good show, especially with the new and improved/nicer me….life is too short to let the ignorant and uneducated get to you…the new me will redouble my previous efforts at teaching them (not that I’m all0knowing, I just know more than most since I have more experience than most).
Concepts covered in this episode are:
The security on Profit.ly
The event of the year and we just added a BIGTIME guest speaker Can you guess who?
Enter a free contest to win $3,000 in prizes
Free video lessons on breakouts/breakdowns
Positive Seasonal Pattern Stocks on Sunday the 26th of September 2010
Seasonal Patterns found for the following stocks:
Central Federal Cp (GCFC) over the next 9 trading days. Look at the seasonal patterns for Central Federal Cp in context.
Zilog Inc. (ZILG) over the next 10 trading days. Look at the seasonal patterns for Zilog Inc. in context.
Elmira Savings Bank FSB (ESBK) over the next 7 trading days. Look at the seasonal patterns for Elmira Savings Bank FSB in context.
FKJ.TC (FKJ.TC) over the next 3 trading days. Look at the seasonal patterns for FKJ.TC in context.
FKJ.EU (FKJ.EU) over the next 1 trading days. Look at the seasonal patterns for FKJ.EU in context.
Gasco Energy (GSX) over the next 6 trading days. Look at the seasonal patterns for Gasco Energy in context.
Metalico Inc (MEA) over the next 10 trading days. Look at the seasonal patterns for Metalico Inc in context.
ProShares Short SmallCap600 (SBB) over the next 8 trading days. Look at the seasonal patterns for ProShares Short SmallCap600 in context.
American Home Mortgage Investment Corp. 9.25% Series B Cumulative Redeemable Pre (AHM1B) over the next 3 trading days. Look at the seasonal patterns for American Home Mortgage Investment Corp. 9.25% Series B Cumulative Redeemable Pre in context.
Blue Chip Value Fund Inc (BLU) over the next 6 trading days. Look at the seasonal patterns for Blue Chip Value Fund Inc in context.
The PNC Financial Services Group Inc. $1.80 Cumulative Convertible Preferred S (PNC1D) over the next 10 trading days. Look at the seasonal patterns for The PNC Financial Services Group Inc. $1.80 Cumulative Convertible Preferred S in context.
WSEGI (WSEGI) over the next 10 trading days. Look at the seasonal patterns for WSEGI in context.
Allot Communications Ltd (ALLT) over the next 8 trading days. Look at the seasonal patterns for Allot Communications Ltd in context.
Citizens Holding Co (CIZN) over the next 3 trading days. Look at the seasonal patterns for Citizens Holding Co in context.
Sovereign Bancorp Inc. Depositary (SOV.P.C) over the next 10 trading days. Look at the seasonal patterns for Sovereign Bancorp Inc. Depositary in context.
ProShares UltraShort Russell Midcap Value (SJL) over the next 10 trading days. Look at the seasonal patterns for ProShares UltraShort Russell Midcap Value in context.
ProShares Short Oil & Gas (DDG) over the next 10 trading days. Look at the seasonal patterns for ProShares Short Oil & Gas in context.
ProShares UltraShort MSCI EAFE (EFU) over the next 10 trading days. Look at the seasonal patterns for ProShares UltraShort MSCI EAFE in context.
ProShares Short MSCI EAFE (EFZ) over the next 10 trading days. Look at the seasonal patterns for ProShares Short MSCI EAFE in context.
ProShares UltraShort MSCI Japan (EWV) over the next 10 trading days. Look at the seasonal patterns for ProShares UltraShort MSCI Japan in context.
iShares S&P NY Municipal Bond Fund ETF (NYF) over the next 2 trading days. Look at the seasonal patterns for iShares S&P NY Municipal Bond Fund ETF in context.
Rydex Etf Trust (RHO) over the next 10 trading days. Look at the seasonal patterns for Rydex Etf Trust in context.
Rms Systems Inc (RMS) over the next 10 trading days. Look at the seasonal patterns for Rms Systems Inc in context.
Rydex Etf Trust (RRZ) over the next 9 trading days. Look at the seasonal patterns for Rydex Etf Trust in context.
Universal Insurance Holdings (UVE) over the next 8 trading days. Look at the seasonal patterns for Universal Insurance Holdings in context.
A-Power Energy Generation Sys (APWR) over the next 10 trading days. Look at the seasonal patterns for A-Power Energy Generation Sys in context.
Limco -Piedmont Inc. (LIMC) over the next 9 trading days. Look at the seasonal patterns for Limco -Piedmont Inc. in context.
PowerShares DB Base Metals Double Short ETN (BOM) over the next 10 trading days. Look at the seasonal patterns for PowerShares DB Base Metals Double Short ETN in context.
DB Commodity Short ETN (DDP) over the next 10 trading days. Look at the seasonal patterns for DB Commodity Short ETN in context.
DB Commodity Double Short ETN (DEE) over the next 10 trading days. Look at the seasonal patterns for DB Commodity Double Short ETN in context.
Market Vectors Dbl Short Euro (DRR) over the next 10 trading days. Look at the seasonal patterns for Market Vectors Dbl Short Euro in context.
PowerShares DB Crude Oil Double Short ETN (DTO) over the next 10 trading days. Look at the seasonal patterns for PowerShares DB Crude Oil Double Short ETN in context.
PowerShares DB Crude Oil Short ETN (SZO) over the next 10 trading days. Look at the seasonal patterns for PowerShares DB Crude Oil Short ETN in context.
Cons Thompson Iron M (CLMZF) over the next 10 trading days. Look at the seasonal patterns for Cons Thompson Iron M in context.
Dah Sing Financial H (DAHSF) over the next 10 trading days. Look at the seasonal patterns for Dah Sing Financial H in context.
Debenhams Unsp Adr (DBHMY) over the next 10 trading days. Look at the seasonal patterns for Debenhams Unsp Adr in context.
Insight Hlth Svc Hld (ISGT) over the next 4 trading days. Look at the seasonal patterns for Insight Hlth Svc Hld in context.
Nashville Bk & Tr Tn (NVBT) over the next 2 trading days. Look at the seasonal patterns for Nashville Bk & Tr Tn in context.
Public Co Management Corp (PCMC) over the next 10 trading days. Look at the seasonal patterns for Public Co Management Corp in context.
Takefuji Cp Ord (TAKAF) over the next 10 trading days. Look at the seasonal patterns for Takefuji Cp Ord in context.
Tz Ltd (TZLTF) over the next 1 trading days. Look at the seasonal patterns for Tz Ltd in context.
Z C L Composites Inc (ZCLCF) over the next 10 trading days. Look at the seasonal patterns for Z C L Composites Inc in context.
Outokumpu Oyj (OUTKF) over the next 10 trading days. Look at the seasonal patterns for Outokumpu Oyj in context.
Carnival Plc (CUKPF) over the next 10 trading days. Look at the seasonal patterns for Carnival Plc in context.
(VRYAD) over the next 5 trading days. Look at the seasonal patterns for in context.
Negative Seasonal Pattern Stocks on Sunday the 26th of September 2010
Seasonal Patterns found for the following stocks:
Steel Dynamics Inc (STLD) over the next 7 trading days. Look at the seasonal patterns for Steel Dynamics Inc in context.
First Solar Inc (FSLR) over the next 9 trading days. Look at the seasonal patterns for First Solar Inc in context.
Frontier Oil Corp (FTO) over the next 9 trading days. Look at the seasonal patterns for Frontier Oil Corp in context.
Cypress Semiconductor Cp (CY) over the next 1 trading days. Look at the seasonal patterns for Cypress Semiconductor Cp in context.
Silver Standard Resource (SSRI) over the next 6 trading days. Look at the seasonal patterns for Silver Standard Resource in context.
Denbury Resources Ltd (DNR) over the next 9 trading days. Look at the seasonal patterns for Denbury Resources Ltd in context.
Gerdau Sa Ads (GGB) over the next 8 trading days. Look at the seasonal patterns for Gerdau Sa Ads in context.
Sina Corp (SINA) over the next 5 trading days. Look at the seasonal patterns for Sina Corp in context.
Savient Pharmaceuticals Inc (SVNT) over the next 9 trading days. Look at the seasonal patterns for Savient Pharmaceuticals Inc in context.
Companhia Vale Do Rio Doce ADS (VALE) over the next 8 trading days. Look at the seasonal patterns for Companhia Vale Do Rio Doce ADS in context.
Atp Oil & Gas (ATPG) over the next 9 trading days. Look at the seasonal patterns for Atp Oil & Gas in context.
Nrthmbrn Water (NWG) over the next 8 trading days. Look at the seasonal patterns for Nrthmbrn Water in context.
Usg Corp (USG) over the next 8 trading days. Look at the seasonal patterns for Usg Corp in context.
Quicksilver Resources (KWK) over the next 9 trading days. Look at the seasonal patterns for Quicksilver Resources in context.
C (CNE) over the next 5 trading days. Look at the seasonal patterns for C in context.
Skechers Usa Inc (SKX) over the next 9 trading days. Look at the seasonal patterns for Skechers Usa Inc in context.
Delta Air Lines Inc (DAL) over the next 7 trading days. Look at the seasonal patterns for Delta Air Lines Inc in context.
Memc Electronic Material (WFR) over the next 8 trading days. Look at the seasonal patterns for Memc Electronic Material in context.
Cree Incorporated (CREE) over the next 8 trading days. Look at the seasonal patterns for Cree Incorporated in context.
Advanced Energy Ind Inc (AEIS) over the next 8 trading days. Look at the seasonal patterns for Advanced Energy Ind Inc in context.
Endo Pharmaceuticals Hld (ENDP) over the next 9 trading days. Look at the seasonal patterns for Endo Pharmaceuticals Hld in context.
Claymore 1-5 Yr Laddered Gov Bo (CLF) over the next 8 trading days. Look at the seasonal patterns for Claymore 1-5 Yr Laddered Gov Bo in context.
Arcelor Mittal (MT) over the next 8 trading days. Look at the seasonal patterns for Arcelor Mittal in context.
José Vicente Concept: Solaris Sun System
The Solaris is a sustainable sun shading system designed by industrial designer José Vicente. The system has been conceptualized to provide a new working/leisure space that allows individuals to work in the open air at any place of their choice.
The Solaris sun shading system is equipped with photovoltaic panels allowing users to charge their gadget gear with renewable energy. The system can be used in outdoor spaces such as cafes, parks and beaches.
Via: TheDesignBlog, Solar Feeds and Design Sustentavel
Thaler on Tax Cuts
University of Chicago Behavioral Economist Richard Thaler drops some hard analysis on the tax-cut-at-any-price crowd in his NYT column this week:
“Want to give affluent households a present worth $700 billion over the next decade? In a period of high unemployment and fiscal austerity, this idea may seem laughable. Amazingly, though, it is getting traction in Washington.
I am referring, of course, to the current debate about whether to extend all, or just some, of the tax cuts of President George W. Bush — cuts that are due to expire at year-end. They’re expiring because the only way they could be enacted initially was by pretending that they were temporary.
In this situation, it’s not clear what should be called a tax “cut.” If the temporary law is allowed to expire as planned, does that represent a return to normal, or a tax increase? Conversely, if some parts of the current rates are extended, should those count as a tax cut?
Psychologists call these descriptive choices “framing.” No one is proposing that tax rates be lower than they are now, so the question is whether some people should pay more, and, if so, who.”
The rest of the column is well worth reading. Warning: Many of you will not be happy with what he says (but I think his math is spot on) . . .
>
Source:
What the Rich Don’t Need
RICHARD H. THALER
NYT, September 25, 2010
http://www.nytimes.com/2010/09/26/business/26view.html
The Thing You Never Knew You Needed But Actually Do
Posted by Timothy Sykes on Sun 26th of Sep, 2010 04:50:35 PM
The Thing You Never Knew You Needed But Actually Do
Posted by Timothy Sykes on Sun 26th of Sep, 2010 04:50:35 PM ShareShare
PennyStocking Silver subscribers and TIMalert subscriobers know I’ve been swamped with projects like Profit.ly (a site that verifies trader performance, now with 1,000+ traders sharing openly), Investimonials (TripAdvisor for onlne finance, now with 8,000+ reviews on 4,000+ products) and of course running my own site all while making video lessons, researching, blogging and trading nearly every day.
As you can see from this cool Profit.ly tool, my trading profits are in excess of $115,000 in just the past few months.
I just wanted to let you know we finally posted all the details of my upcoming November 14-15th conference which you can see HERE
So please do check out the conference page at http://www.timothysykes.com/conference as I think my 8 guest speakers and I will truly educate you over the course of two full days of intensive educating, not to mention some Live Trading with the pros!
And yes, you don’t have to come to Vegas if you don’t want to or can’t make it, we have a live HD video option so you can watch from the comfort of your very own home; and you get a massive discount to attend that way, use the coupon code WEB2010
Tim
PS I know I’ve been bit hard on some people lately so as you’ll see live on LiveStock today 1-2PM EST today (you can also watch it on demand later), I promise to work harder on being a nicer/more polite trading teacher rather than a straight up drill sergeant! I’ll do whatever it takes to help you profit as much as or ideally even more than I do.
Eastman Chemical: Strong Stock in a Strong Industry
The heart of this story is that as developing nations build out, then they will devour more resources…chemicals being one of them. So the chemicals group has amongst the best earnings momentum trends right now leading to a Zacks Industry Rank of 30 out of 264. Since half of a stock's performance is related the popularity of the industry, then this high industry rank is a good start.
Eastman (EMN) blends another three very attractive investment qualities. Explosive earnings estimates, attractive valuation, and 2.5% dividend into the portfolio.
This is a great trifecta of positive investment characteristics. Digging into the specifics we see on the earnings estimates front they have averaged +19% earnings surprises that last four quarters leading to massive upward estimate revisions. The latest report came in at $2.05 versus $1.66 estimate. More recently they preannounce that they would come in way ahead of estimates for the 3rd quarter. Analysts realized that the good times weren’t just for this quarter, but will have residual benefit into 2011 and beyond.
Some analysts have raised estimates for next year by as much as 80 cents up to $7.60. That is up from $5.95, just 60 days ago. Not surprisingly, this excellent estimates activity has led to a Zacks #1 Strong Buy rating.
As for valuation, these shares have traditionally traded for at least 12X earnings. Apply that to 2011, and you could see how shares could easily get to $85 or $90. However, it if keeps banging out earnings surprises, and estimates roll higher, then this could prove quite conservative.
Rocketing estimates and attractive valuation is generally enough to make an investor interested in a stock. Now toss in a dividend yield of 2.5%...about the same that you’d get on a 10 year Treasury. Add it all up and you can see why this stock is so attractive. .
Disclosure: Of course I own EMN. Why recommend a stock if you aren't going to own the shares yourself?
Chimera Investment Corp: A Mortgage REIT With a Sustainable and Growing Dividend
Chimera Investment Corp. (CIM) is a REIT that invests directly, or indirectly, in mortgage-backed securities (MBS), the majority of which are residential (RMBS). Chimera Investment Corp. first caught my eye because of its fat dividend yield that would most certainly scare anyone away barring the most ignorant or the most aggressive of investors. I decided to take a deeper look into their operations out of a desire to learn more about the Real Estate sector.
Chimera Investment Corp. has cash and cash equivalents of roughly $236 million. This represents about 6% of its current market cap, but what really drives Chimera's value is its portfolio of investment securities that drive its income. This is where we will really want to look. Chimera's investment portfolio is separated into the following:
Non-Agency MBS: $4.4 billion
Senior Notes: $817.7 million
Subordinated:$1.5 billion
Senior non-retained*:$2.1 billion
Agency MBS: $1.76 billion
Securities Held for Investment: $416 million
Total*:$4.462 billion
*For the purpose of this analysis the $2.1 billion of senior non-retained securities are excluded. It is my understanding that these notes are ones that have been re-securitized and sold to third parties. They are of no future benefit to the company and there is no further future recourse to Chimera from them. As such, there is no further value added from these assets.
In the quarter ending June 2010, these investments had an average yield of 8.49%, resulting in a spread of 5.56%. These yields have resulted in return on equity (ROE) readings that have fluctuated between 17.3% and 30.55% over the past year. In June 2010 ROE was 19.14%.
I believe that Chimera may be able to continue spreads of this magnitude and its high ROE because it has demonstrated its ability to do so over the past several quarters, even as long term rates have fallen. The Fed has also made it clear that interest rates will remain low for an extended period of time and there appears to be no current threat of inflation to drive them to do otherwise.
If Chimera is able to maintain its 5.56% spread on its $4.462 billion in assets, this would suggest earnings of $248.1 million dollars, or, what would equate to $0.28 before other expenses not directly relate to financing the purchase of securities. This figure does not include money that the company receives from re-securitizing loans and re-selling them. It seems to me that their current dividend of $0.18 may be sustainable and is supported by consistency and growth in the dividend over the past several quarters.
We will look into these securities in further detail below.
Non-Agency Mortgage Backed Securities
The majority of these securities are Alt-A, first lien mortgages. These are mortgage securities that are not guaranteed by Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), thus, they are typically considered riskier than their agency backed counterparts. This $4.4 billion is divided into three categories as listed above: Senior Notes ($817.7 million), Subordinated Notes ($1.5 billion), and Senior non-retained ($2.1 billion).
As of June 2010, 99% of this portfolio consisted of Alt-A collateral. This collateral is ranked after prime but before subprime. Often, this ranking is assigned because of failure to qualify for Fannie or Freddie guarantee due to some criterion not being met. This could be something as simple as lack of documentation, or something as serious as a poor credit score, high debt to income ratios, or a high loan to value ratio.
The weighted maturity of the portfolio is 28.6 years but this does not tell us very much. A more useful measurement tool is the weighted average life (WAL) which takes into account prepayments speeds, interest rates, and other factors. With the agency backed securities included, the WAL for 79% of these securities falls between one and five years.
This basically means that about 79% of the principal value outstanding will be paid back within five years. This makes sense, given that prepayment typically increases during periods of low-interest rates as more borrowers refinance. It is interesting to note the similarity between WAL and duration. I imagine that it would be reasonable to expect values to act in a similar fashion in the event of rising interest rates.
It would seem that with such a short WAL the value of these investments would not fall very much with interest rate hikes and this is verified later by the management's expectations of value change in the event of rising interest rates.
The portfolio has an average weighted amortized loan to value ratio of 73.6%. It is my understanding that this is a measure of the discount that the securities were purchased at. This may suggest that a further drop in home prices (as may be expected with a wave of new foreclosures waiting to hit the market) may not detrimentally affect Chimera's holdings due to the margin of safety that they have built by purchasing assets at a discount.
Agency MBS
Chimera also has $1.76 billion of MBS that are guaranteed by Fannie Mae and Freddie Mac that will be adding to their earned income stream. These investments are considered relatively safe and are generally AAA rated.
Securitized Loans Held for Investment
These are securities that others have put together that Chimera has purchased. These have a value of $416 million, after an allowance for loan losses of $5.6 million. The underlying mortgages that characterize these securities have an average weighted FICO score of 756 and 90.7% are owner occupied. These seem like a relatively safe bet as well, given the high credit score and the high occupancy rate.
Overall Analysis
51% of Chimera’s holdings are AAA rated. 45% of them are either not rated, or below B. Looking at the results over the past several quarters I would be willing to bet that more of that last category fall into “not rated” as opposed to “below B”, but that is merely speculation and ultimately may not mean much either way.
What about changes in interest rates? If long term interest rates fall or short term interest rates increase, this could narrow the spread that Chimera is able to make. On the flip side, if interest rates rise, Chimera’s investment income may also rise. In their most recent 10Q, Chimera estimates that a 75 bps (.75%) increase in interest rates would result in an increase of interest income by 5.52% while decreasing the overall portfolio value by 3.79%.
This rise in income will offset some of the losses attributed to a decrease in the value of Chimera's future cash flows. With Chimera trading at such a low price in comparison to its dividend, it is possible that the stock price may still appreciate, even in an environment with increasing interest rates due to increased confidence within the real estate sector.
Ultimately, it appears that Chimera is investing in assets that typically expose investors to a considerable amount of risk; however, the underlying characteristics of the assets appears to make these securities more attractive. These characteristics include the discount the mortgages were purchased at as well as the occupancy rates and the average weighted credit scores. Chimera has done well navigating the current landscape after the burst of the real estate bubble and it appears to be consistent with dividend payments and dividend growth.
On top of all of this, the management has been buying a substantial number of shares in open market transactions which is a public display of their confidence in Chimera’s prospects. Since February 2009, insiders have purchased +485,000 shares and hold 5.17% of the company. Before their two most recent offerings, the inside ownership would have been substantially higher.
It appears that Chimera will continue to benefit as interest rates are low and may continue to benefit even in the event of rising interest rates due to its current discount. It is my opinion that its worth a second look and may add a large amount of value to a shareholder's portfolio.
Disclaimer: It should be noted that the prior analysis was done using the company's 10Q and the Google search engine to teach myself the meanings of terms and etc. It is possible, and very likely, that I have missed many of the nuances in the workings of the industry. This was undertaken as a learning project and should not be taken as recommendation for, or against, the stock until your own analysis has been done. Warren Buffett has attributed much of his success to staying away from investments he did not understand...I am simply trying to take that advice and understand as many investments as possible. Please feel free to make comments about important omissions, misrepresented facts, or misinterpretations of the presented data. It is my desire that these comments will help me better understand the Real Estate industry.
Disclosure: Author has been long CIM since July 2010. The author is not an expert in the Real Estate field and has no experience whatsoever with REITs. Readers should do their own due diligence by examining the companies quarterly and annual reports.
Santander, BofA, Citi: Bet on the Banks
I recently read a report from the World Economic Forum ranking global competitiveness based on a number of factors, including the strength of the financial services sector within each country studied. The good news is that both Canada and the U.S. are still in the top 10 although the U.S. slipped from number one to number three. Canada came in with an overall ranking of six, down one position from last year (although it ranked number one for the soundness of the banking system).
That report, combined with the release of the Basel guidelines which mandate that banks raise their capital levels over the next eight years, got me thinking about my three biggest personal holdings: The Santander Group (STD), Citigroup (C), and Bank of America (BAC). I own large amounts of both the common and the preferred shares of these out-of-favour companies. Let me explain my rationale.
For starters, financial stocks in general led us out of the big crash last year but since then they have been lagging the market. Technically, this group has been basically range-bound for some time. That's been true of the market in general, of course. But for stocks to begin a new run, as I believe they will in the next few weeks, the financials need to participate or even lead before we can make much headway. Let's look at each of these financial institutions.
Santander Group (NYSE: STD)
From a value perspective, I like Santander best. I recommended buying this Spanish bank in May when it was trading at $10.44 (figures in U.S. currency). It promptly pulled back to the $9 range over fears of a debt default by Spain but has since rallied strongly and closed on Friday at $12.67, up 21% from my recommended price.
I still like this stock a lot. The company's exposure to Latin America plus the dividend paid by both the common and preferred issues make this a compelling story. Santander is my largest single holding which I add to every time it pulls back. Keep an eye on it and if the price drops below $12.50, add more.
Bank of America (NYSE: BAC)
Bank of America is basically a value play. It's the largest domestic bank with over 6,000 banking centers and more than 18,000 ATMs. It has an enormous mortgage platform, some of which unfortunately includes the marginal assets acquired from Countrywide Financial for $4.1 billion in stock before the meltdown in 2008. The BAC customer base is over 29 million.
The bank also has a tremendous asset in Merrill Lynch. It was acquired during the meltdown and so far that deal is working out well for BAC, certainly better than the Countrywide acquisition. Merrill gives BAC a global footprint and last quarter corporate business in Merrill increased 24% over the previous quarter.
BAC reported net income of $3.1 billion (27c a share) for the second quarter. That was basically flat on a dollar basis compared to the same period last year although earnings per share were down about 18%. The bank has been strengthening its balance sheet with the sale of some minority positions in Santander, Master Card, and a few others. Frankly I wish they hadn't divested some of those assets since it will likely slow growth but at least they are building financial strength in the short term.
The new CEO, Brian Moynihan, recently stated that the plan going forward is to cease the M&A activity and focus instead on integrating existing businesses. That's a significant change from the priorities of his predecessor, Ken Lewis, who presided over $120 billion in acquisitions during his tenure. It's not an exciting strategy but, given the current conditions, is likely the best plan for right now.
The stock closed on Friday at $13.40. That is down 33% from its 52-week high of $19.86. However, I believe it will rally back to that level in the next 12 months.
If cash flow is important to you, have a look at the BAC preferred shares as well. I recommended buying BAC.PR.J last year at $21.50 when the yield was 8.4%. They closed on Friday at $24.90 and the yield is down to 7.3%, but they are still a Buy at under $25.
Action now: Buy BAC common with a target of $20. Buy BAC.PR.J under $25.
Citigroup (NYSE: C)
Citigroup is another fallen star. In fact, it had a very hard landing during the crisis. How hard? Well, back in 2008 the stock traded above $50 and it is now at $3.95. I doubt we will see those heady days again in my lifetime but it is not unreasonable to think the shares might hit $5 over the next year which from these level would be a gain of 26.6%.
I like Citigroup for a few reasons. First, it's cheap so I can buy lots of it which means the leverage is terrific. Second, I believe the downside risk is minimal at these levels since the government has already told us they won't let Citigroup go under. There is an overhang from the government bailout since the feds have been selling off their stock for the past several months. But hopefully that process will be completed early in 2011 which should ease the selling pressure somewhat.
I also like Citigroup's global footprint. The company has operations in 140 countries worldwide in virtually every facet of financial services. They have a large retail business but also a sizable investment business through Smith Barney. Citigroup has significant assets in both Latin America and Asia which will be a growth engine going forward.
The company reported second-quarter earnings of $2.7 billion on revenues of $22.1 billion which, given the nightmare of the past couple of years, shows some decent progress, especially considering they have been shedding assets since the meltdown. Overall, net income was up 21% for the first six months of 2010 compared to the same period in 2009.
This is the most aggressive play of the three. Citigroup still has a lot of problems, which is why the stock is so cheap. But management is gradually gaining control of the situation and it will work through these issues over time.
Some analysts feel that even at $4 the stock is overvalued but I believe it will hit $5 in the next year. There are better-run banks out there like JPMorgan Chase (NYSE: JPM) but they don't have the same leverage and they tend to trade in tandem with the rest of the group.
In addition to the common shares of Citigroup, I also own the preferred issue (NYSE: C.PR.G) which has been trading well. It closed on Friday at $25.70 and yields 7.7%.
Action now: Buy Citigroup common stock with a target of $5.
A couple of other catalysts could move all these stocks. First, financial regulation as a headline issue is receding. The final outcomes are not entirely certain but the overhang is less oppressive. Also, Citigroup and BAC will reinstate dividends as soon as feasible, especially Bank of America. Any dividend announcement should boost investor interest. Finally, I believe the U.S. economy will slowly improve and that can't help but benefit the banks.
Decide Whether to Extend Tax Cuts Now: GOP's Boehner
Top Republican and Democratic officials skirmished Sunday over the timing of a vote on extending tax cuts, seeking an edge ahead November congressional elections likely to be dominated by job anxiety.
After Democratic leaders in the U.S. House of Representatives left open the possibility a vote will be delayed past Nov. 2 midterm elections, Republicans shot back that doing so would only add to voters' economic uncertainty.
"The Congress has an opportunity this week to end some of the uncertainty by allowing the American people to know what the tax rates are going to be at the end of the year," House Minority leader John Boehner said on "Fox News Sunday."
"To adjourn without dealing with this means that in their minds the elections are more important than jobs for the American people," he added.
All the tax cuts passed in 2001 and 2003 under the former George W. Bush administration are due to expire on Dec. 31.
Democrats want to extend the lower rates for individuals making up to $200,00 and up to $250,000 for couples but not for the estimated 2 percent who make more than that.
Unease Builds Over Issue
Republicans, and a few Democrats, says the tax reductions for high-income individuals should also be extended because raising taxes in an atmosphere of stubbornly high unemployment and slow growth risks further slowing recovery.
House Speaker Nancy Pelosi said on Friday that a vote would be held this year, but left open the possibility that it won't happen before Nov. 2 midterm elections where Democrats are considered likely to face steep losses in the House.
House Majority leader Steny Hoyer repeated on Fox that he doubted a a pre-election vote on the tax issue will occur.
Boehner said he wanted "a fair and open debate so we can extend all of the current tax rates" and said that, if it was denied, he thought there would be bipartisan support to push for extending all the tax cuts.
On ABC's "This Week," Senate Minority Leader Mitch McConnell suggested the reason that Democrats were unwilling to have an early vote was because they know the prospect of tax rises for any Americans angers voters.
"The question is, do we want to raise taxes in the middle of a very, very tough economy? All the Republicans think that's a bad idea, and a substantial number of the Democrats think the same thing," McConnell said.
David Axelrod, a senior White House aide and strategist, charged that Republicans were trying to hold tax cuts for the middle class hostage by insisting that the wealthiest Americans should also see tax cut extensions. "We're saying we can't afford that, not in our fiscal condition," he said on ABC.
He said past Republican administrations "quadrupled the national debt and exploded the deficits and squandered the surplus" and signaled that will be the tack Democratic candidates will use to campaign ahead of the Nov. 2 vote.
Extending the income tax cuts on the first $200,000 of an individual's income would cost about $2.9 trillion over a decade, according to the Obama Administration. Adding in those above that income — benefiting just 2 to 3 percent of Americans — would cost another $700 billion.
AIG, U.S. move closer to deal on bailout exit: sources
By Paritosh Bansal
NEW YORK | Sun Sep 26, 2010 7:34pm EDT
NEW YORK (Reuters) - American International Group Inc and the U.S. government are moving closer to a deal on how the Treasury Department would exit its investment in the bailed-out insurer, sources familiar with the situation said on Sunday.
The situation, however, is still fluid and there are many moving parts, one of the sources said.
The plans may be unveiled as early as this week, but the exact timing of an announcement depends on the pace of negotiations, Bloomberg reported.
A possible conversion of the Treasury's $49 billion preferred stake in AIG into common stock is one of the options being discussed, Reuters previously reported.
Such a conversion, which could start as soon as the first half of next year, would possibly raise the government's stake in AIG to above 90 percent from nearly 80 percent. The Treasury would sell its common stake to investors over time.
"Our objective remains the same at AIG, which is to repay taxpayers and position AIG over time as a strong, independent company worthy of investor confidence," AIG said. The sources are anonymous because talks are not public.
The exit plan being discussed would chart the eventual disengagement of the government from AIG, which was propped up by a $182.3 billion taxpayer-funded aid package during the financial crisis.
The bailout saw funds from the Federal Reserve Bank of New York and the Treasury, and was structured so that the Fed must be paid back first, which AIG still has to do. But the talks show that the insurer is making progress in its restructuring.
AIG owes the Fed about $21 billion under a credit facility. The Fed also owns $25 billion worth of preferred interest in two of AIG's foreign life insurance units that must be monetized.
The company expects a big part of that money to come in by the end of the year as it closes on the sale of American Life Insurance Co to MetLife Inc for $15.5 billion and lists American International Assurance (AIA) in Hong Kong. AIA is planning an estimated $15 billion IPO next month in Hong Kong.
(Reporting by Paritosh Bansal in New York, editing by Martin Golan)
Comcast Operating Chief Burke to Head NBC Universal
Comcast said Sunday that Chief Operating Officer Steve Burke will become chief executive of NBC Universal at the close of its deal to control the company.
Mr. Burke, 52 years old, will replace Jeff Zucker, who said on Friday that he would leave his post in the coming months.
In doing so, Comcast taps one of its most senior executives to oversee the NBC Universal assets, which include the NBC broadcast network, cable channel properties including CNBC and CNBC.com, a movie studio and theme parks.
Burke, who will remain chief operating officer of Comcast [CMCSA 18.57 0.65 (+3.63%) ], joined the cable giant in 1998 as president of its cable operations. More recently, he has been overseeing plans to integrate the two companies.
"Steve Burke is an experienced, talented and visionary leader with over 25 years in the media and entertainment industry," said Comcast CEO Brian Roberts, in a press release. "Steve is one of the most well-respected executives in the industry and I am confident that he will lead NBCU forward to a new era of growth."
Comcast and General Electric [GE 16.66 0.52 (+3.22%) ], NBC Universal's current parent, said that Burke will work with Zucker during the transition.
The two companies said there will be no additional "structural or personnel announcements" until the deal closing process and timing is certain.
The deal between the companies was announced last fall, and is awaiting regulatory approval.
China: U.S. move on yuan bill "redundant"
TAIPEI | Mon Sep 27, 2010 2:29am EDT
TAIPEI (Reuters) - A U.S. congressional panel's approval of a bill on China's currency is "redundant," China's vice commerce minister said on Monday, the latest salvo from China in the face of U.S. pressure on its currency policy.
Vice Commerce Minister Chen Jian also told a media briefing during a visit to Taiwan that China would set policy on its currency according to its own needs.
"We'll make a decision based on our own economic development levels and the world economic situation. If it takes the yuan to appreciate for our economy to develop, we will do it even though it would have negative impact," Chen said. "But it is redundant for the U.S. congress to pass the proposal."
The U.S. House of Representatives Ways and Means Committee approved a bill on Friday, expected to be voted on this week, that would let the United States apply duties on goods from countries with undervalued currencies.
The vote is a first step to fulfilling long-standing threats to penalize Beijing for keeping its currency artificially weak, which critics claim creates an unfair trade advantage for China.
It comes a day after U.S. President Barack Obama pressed Chinese Premier Wen Jiabao on the issue in talks on the sidelines of the United Nations General Assembly meeting.
The yuan rose against the dollar on Monday even though the central bank lowered its mid-point after nine days of stronger fixings in the face of growing U.S. pressure on Beijing to let the currency rise faster.
See for the latest report on the yuan.
Chen added that the yuan's recent rise would hurt China's exporters, but the effects would diminish over the long term. He was speaking in Taipei after a forum on developing cross-strait trade.
(Reporting by Faith Hung and Lin Miaojung; Editing by Chris Lewis)