Accrued Interest

Getting Involved in Bitcoin

noreply@blogger.com (Accrued Interest) — Thu, 03 Apr 2014 19:49:00 +0000

When bitcoin value skyrocketed in late 2013, everyone suddenly started paying attention to this unusual currency. A large number of online businesses already accept bitcoins as payment, and a handful of brick-and-mortar grocery stores and restaurants are joining the club. A NYC entrepreneur is working on installing the first bitcoin ATM.

Of course, the majority of us barely understand how bitcoins work. Why do you have to mine them? Are they backed by a stable currency? Are they even legal?

Here are some answers to your bitcoin questions, as well as how you can get involved in this emerging currency.

Are bitcoins legal?

Whether or not bitcoins are legal depends on the country. Many countries, including the United States, Canada, and Australia, have agreed that bitcoins are legal, in the sense that they can be used to pay for a transaction if both the buyer and seller agree. Governments are still working out how bitcoins should factor into income taxes, and whether there needs to be additional regulation placed on bitcoins to fully integrate them into the nation's currency.

How do bitcoins work?

First, you need to register for a bitcoin wallet. This is an app that lives on your computer or smartphone, and acts like a virtual bank for your bitcoin transactions.

Next, you need to mine bitcoins or trade for bitcoins. These bitcoins show up as value in your wallet. This value is also recorded in what is called the block chain, a publicly-available record of all bitcoins, all bitcoin owners, and all bitcoin transactions.

Once you have bitcoins in your wallet, you can begin spending them -- or you can save them, in the hopes that they will increase in value. Other cryptocurrencies like Ethereum and litecoin, have become popular alternatives to bitcoin as the cryptocurrency market has matured.

What is bitcoin mining?

Here's a short explanation of how bitcoin mining works, from The Telegraph: "You tell your computer to crunch through a set of difficult mathematical problems and success is rewarded with bitcoin."

The actual process is a bit more difficult. The mathematical problems, often called algorithms, generally involve more computing power than a single laptop can handle. Bitcoin miners form teams and combine their computers' processing resources to churn through these complicated algorithms.

Why is bitcoin linked to solving algorithms? Simply put, you are receiving payment for your computer's labor. Of course, like many jobs, bitcoin mining requires a lot of work. That has prompted many people to turn away from bitcoin mining and acquire bitcoins through bitcoin trading.

What is bitcoin trading?

Bitcoin trading is the term for buying and selling bitcoins on the open market. You will probably be asked to buy bitcoins for slightly more than their current value, in the hopes that the bitcoins will continue to increase in value after you purchase them.

If you had traded for some bitcoins at the beginning of 2013, the value would have jumped from about $13 per bitcoin in January of 2013 to $1,200 per bitcoin at the high value point in November 2013 but that number has been in steady decline. In January 2014, bitcoin value was hovering around $900 per bitcoin. In early spring 2014, the exchange rate for a single bitcoin is about $480—so it’s dropping but it is still a significant gain on your investment.

Is there any danger of using bitcoins?

As always, users need to watch out for scams and fake bitcoin apps. Make sure you have a fully-updated security software suite to prevent accidental viruses or malware that come through bitcoin and other apps.

Bitcoins also fluctuate more than other currencies; they are still technically an unstable currency, and users may lose money. The high-value point that bitcoins reached in November 2013, for example, was immediately followed by a significant drop.

It is helpful to look at bitcoin investment the same way you look at playing the stock market (as opposed to investing in a commodity like gold or silver) and invest your resources wisely. Make no mistake—investing in bitcoin is a gamble—a risky gamble. Do not plunk down thousands of dollars for a few bitcoins with the hope that they will suddenly soar in value. Sure they could but, because they aren’t backed by a steady currency or commodity, their value is not guaranteed or predictable and, even scarier—is subject to the whims of those who made it. Tread carefully!

If you are interested in learning more about bitcoins, open up a bitcoin wallet and try mining a few coins, or wait until the market drops a bit and then start trading. If you are very lucky, your initial payment will significantly increase in value over time.

Why You Should Dump Those Shares of Tesla Now

noreply@blogger.com (Accrued Interest) — Fri, 01 Nov 2013 23:16:00 +0000

Any investor who has ever heard of Tesla (TSLA) is probably aware that the stock is currently up more than 400% so far this year. With gains such as that many people are continuing to jump onboard and ride the wave. But not so fast. Keep in mind that I like to follow Warren Buffet’s advice to be fearful when everyone else is greedy and be greedy when everyone else is fearful. However, aside from that and the fact that history has proven in most cases that extraordinary gains like this are eventually followed by a sudden and resounding crash, here are some cold hard facts you can take to the bank, or your broker while you place your sell order.

Seeking Alpha’s Ayush Singh has come up with a nice comparison between Tesla and other car manufacturers to illustrate how overvalued Tesla is currently.

The company expects to sell 21,000 cars in 2013 and is presently trading at around $165, which translates into a market cap of just under $20 billion. But, given the amount of cars Tesla sells, this valuation is too high to be justified.

Aswath Damodaran, a Professor of Finance at the New York University, may not be a household name, but he's made some of the most accurate share valuations in the recent past - predicting Apple's peak and Facebook's low, to name a couple. And now, after doing his math on Tesla, Damodaran concluded that Tesla is worth $67.12. When he came up with this figure, Tesla was trading at $170.62, and after working out a comparative index, I believe he may be right.

In this index, I compared Tesla's share price with its production and profitability and compared it against the other big guns of the automobile industry and this is how the results stacked up.

Company's Name	Market Capital (Billion)	Unit Production	Value/Car
General Motors (GM)	$49.91	9.288 million	$5,512
Ford (F)	$69.38	5.708 million	$12,126
Toyota Motor (TM)	$204.29	9.692 million	$21,297
Honda Motor (HMC)	$72.49	3.137 million	$23,015
Tesla	$19.97	21,000	$950,952

Source: Yahoo Finance, Bloomberg, Zacks and Author's Calculation

Hence, Tesla is charging close to $950,952 per car, which translates into around 14 times the actual cost of the vehicle under the assumption that it is free to manufacture! Given real operating gross margins of 13% on its $70,000-priced Model S, Tesla is generating about $9,000 in gross profit from each car that it manufactures. Despite that, investors are placing an irrational valuation of around $950,952 on every car! Going by such calculations, Tesla will need to enhance its production by 20 times in order to be twice as expensive as Honda, which is the next big car maker, on a value-per-car basis.

A 20-fold jump may seem far-fetched, but that is exactly what Tesla bulls anticipate and they expect it to happen before 2020. But even if the company somehow manages to multiply its production by a factor of 20, will it justify a market cap of $20 billion or will it have to sustain its growth for a longer period of time to justify today's share price?

Dana Blankenthorn has a strategy for Tesla investors based on the fact that even Elon Musk acknowledges Tesla is overvalued.

How you deal with this depends on the kind of stock owner you are. Traders may continue getting profits out of Tesla for some time, but they must be warned that, when the fall comes, it will be sharp and sudden. Careful attention must be paid to small technical moves, to any move regarding momentum, or you'll lose your gains in a heartbeat.

For investors who may have bought their shares in the first quarter of this year, when the price was less than one-third what it is now, the situation is different. You can sell less than a third of your present stake and have all your investment out of the stock.

While the company may not be worth today's $20 billion, it may well be worth yesterday's $5 billion. Sales have been doubling every year. Gross profit is 25%. These are unheard of for a mass manufacturer. You're betting that Tesla can indeed use robotic manufacturing technology and scale to bring the company into lower price points, and get ancillary gains through the battery business. These are not unreasonable assumptions.

But I wouldn't pay 50 times sales for that, which is what you're presently paying. On a fundamental basis, Tesla is in a bubble. Those who believe in fundamentals can take their profit and wait for the bubble to pop - although they may risk some remaining momentum gains - or take out their initial investment and know that, even after the bubble pops, they're in the clear.

If you were one of the lucky investors who purchased your shares earlier in the year, you should consider cashing out now while you’re significantly ahead. Alternatively you can decide to hold onto those shares, or even continue putting more money in, but doing so would be a very risky move, even if you have the ability to hang onto them for many years to come.

HOW CAN THE MARKET REACTION TO THE GOVERNMENT SHUTDOWN AND DEBT CEILING DEBATE BE A GOOD THING FOR INVESTORS?

noreply@blogger.com (Accrued Interest) — Wed, 09 Oct 2013 17:41:00 +0000

Market reactions to the uncertainty surrounding the partial U.S. government shutdown and debt ceiling debate have been highly predictable, with all major indexes showing steady declines with each passing day. On Tuesday October 8th the S&P 500 index closed at 1,655.45, down 20.67 or 1.23%. The Dow Jones Industrial Average closed at 14,776.53, down 159.71 or 1.07% and the NASDAQ Composite closed at 3,694.83, down 75.54 or 2.00%. The value of the U.S. dollar has also declined against most major currencies. However, this may be good news for long-term investors.

Between the government shutdown and the debt ceiling debate the one that scares investors the most is the potential for the U.S. government to default on its debt if the borrowing limit is not increased, and there are plenty of reasons why investors should be scared, however unlikely the threat of default:

Consumer Confidence

Consumer spending drives the economy and when confidence in the economy is shaken spending drops significantly as consumers and businesses alike begin to horde more cash. This also results in fewer investments, driving the value of securities down.

Treasury Securities

Governments and banks around the world hold U.S. Treasury securities. They account for about 11.6 percent of total public debt. The Social Security fund holds nearly 30 percent of the outstanding securities. Not only would a debt default destroy the U.S. finances, but it would also damage the fiscal houses of governments and banks around the world.

Borrowing Cost

As the U.S. Treasury has explained, “Investors’ willingness to lend to nonfinancial corporations is often summarized by credit risk spreads — that is, how much higher yields on private securities are than yields on comparable maturity Treasury securities. If investors are less willing to invest, they demand a higher return for that investment. From the borrowers’ perspectives, wider credit spreads imply a higher cost of funding for a given level of Treasury rates. Higher funding costs lead to less spending on investment or other outlays that are financed.” In a nutshell this means that interest rates will rise, investments will slow, and the economic recovery will be at risk.

Equity Markets

Economic uncertainly creates volatility in the markets. Increased volatility can cause investors to exit the market, driving the market down, in addition to and causing households and businesses to reduce spending. During the last debt ceiling standoff in 2011, the S&P 500 fell about 17 percent.

Bond Markets

Markets are all interrelated with the solvency of the U.S. Treasury being the glue that holds them all together. In the event of a default bond prices will plummet as interest rates increase.

All of these possibilities are already rankling investors, as shown by recent trading. However, there is a silver lining that many investors fail to see, yet one that the most successful investors regularly recognize—opportunity.

Warren Buffett follows the rule, "Be fearful when others are greedy, and be greedy when others are fearful." Essentially this means that when the market spikes you should be more conservative in your investments due to the potential of downward correction resulting in losses. The flip side of that is when the market dips then you should take advantage of the lower prices, expecting an eventual upward correction resulting in gains. It’s not rocket science, yet many investors fail to understand and heed this advice.

Buffett recently provided proof that this advice works. During the Great Recession Buffett invested $25 billion, mostly into large companies having significant financial troubles at the time. Companies like Bank of America, Mars/Wrigley, General Electric, Dow Chemical, and Swiss Re. As a result, he recently disclosed that those investments have netted Berkshire Hathaway a profit of $10 billion during the somewhat modest recovery thus far, including a $300 million yearly dividend from Bank of America alone!

While it’s likely that you lack the financial resources of Warren Buffett, your portfolio can still benefit by using this strategy. If you typically invest a set amount of your income each month, refusing to reduce your investments in a market dip will result in similar returns when the market recovers. If you have additional disposable income to invest during a dip, then doing so will result in even greater returns in the future as the economy improves.

The trick to using this strategy is to remove emotion from your investments and invest when you have time on your side. When investors become scared and exit the markets en masse, instead of following suit like a lemming over the edge of a cliff, double down on your investments. Additionally, as investors are regularly advised, the more time you have to hold onto your investments the better returns you will reap. That’s just one more reason why you should begin to grow your investments early on in life. Doing so will allow your investments to weather the storms and provide gains when you finally need them in retirement.

INVESTORS UNSURE WHAT TO THINK OF FACEBOOK

noreply@blogger.com (Accrued Interest) — Sat, 28 Sep 2013 19:18:00 +0000

Facebook (FB) has had a tumultuous time since its May 2012 IPO. The IPO price was $38 and quickly headed downhill to a record low of $18.75 in August 2012. The stock remained slumped below $30 per share for most of the year that followed, leaving many investors disillusioned and disheartened.

During that time there was a wide range of controversy and criticisms surrounding the social media giant including:
Speculation that CEO Mark Zuckerberg is incapable of leading the company
A Zuckerberg family photo that stirred up a hornet’s nest about privacy on the social media site
Reports that Israel used Facebook to target pro-Palestinians, denying them entry to the country
Many companies pulled their ads from Facebook in response to complaints that the company endorsed content depicting rape and domestic violence
A PR debacle ensued after Facebook reportedly mistakenly removed posts from a free-speech group citing human rights abuse in Syria
CEO Mark Zuckerberg’s Facebook page was hacked in order to prove a security flaw existed; an act that initially brought about the company’s refusal to pay the hacker compensation for reporting the security flaw
Another PR nightmare when Facebook’s participation in a NSA spying program was revealed

And that’s just some of the more prominent and high profile situations, all of which seem to have helped to suppress the stock price.

But then in August something changed. The stock finally jumped past the IPO price and continued to climb steadily, reaching a record high of $50.60. Now, suddenly investors who had shunned the company have become drawn to it again. Yet there are still mixed signals about Facebook’s future.

Analyst Northrop Puckett feels that the stock is overvalued, stating that the company will soon “become a shell of its former self, like AOL”.

“The company has a P/E ratio of 175, which is obviously high. It has a forward P/E ratio of 49, which is also quite high, but better than 175. But it seems over-priced considering its fast 5 year growth rate. The company has a PEG (P/E ratio to growth rate) of 5.74 which is very high. For context, Peter Lynch stated that normal stocks have PEGs of around 1. PEGs significantly under 1 mean that the company may be undervalued when taking into consideration its 5 year expected EPS growth. On the other hand, a PEG of 5.74 either means that the stock is i) overvalued compared to its 30% expected growth rate, or ii) that analysts are way off on that growth predictions. It is worth noticing that if predictions for next year's earning growth are correct, you could then see a more reasonable PEG of 2.16 show up. However, that is still relatively high.

Facebook's price-to-sales ratio sits at a quite high 18.57. Additionally, its Q/Q sales are down -19%. Compare it to another (overpriced) online network -- LinkedIn (LNKD). LinkedIn has a price-to-sales-ratio of 21.42, and a Q/Q sales increase of 59%.

Facebook also has an Enterprise Value/EBITDA of 39, which is pretty high. Other "high flyers" like Chipotle (CMG) and Priceline (PCLN) have Enterprise Value/EBITDA of 21.2 and 22.81 respectively.”

Then on the flip side, Jayson Derrick claims the stock is undervalued and will continue to perform.

“1) Facebook has more than 1 billion users, and is still growing this tally above 20% year over year. The massive amount of data that the company has already collected (and will continue to collect) from the billion plus users will be an extremely valuable asset that can be utilized in various ways to generate revenue.

2) Facebook has a vast array of growth opportunities that have yet to be rolled out or even discovered. Specifically, in the near term, the company will roll out video advertisements for U.S users, which can be rolled out internationally over the coming years.

3) Facebook currently has huge investment plans, which include maintaining data servers to keep up with a growing user base. The company has already spent $595 million in 2013 and expects its investments on infrastructure to total $1.6 billion by the end of 2013. In the short term this can lower margins, but an increased investment is a positive aspect as the company continues to expand internationally and gain new users.

4) Management has silenced the bears and nay-sayers who were convinced that the company couldn't meaningfully monetize on mobile users. The company has, so far, addressed what I believe to be the biggest bear argument and only valid thesis against owning shares. Mobile ad revenue represents 41% of the company's revenue mix and is still in its infant stages with significant growth opportunities over the years. In terms of actual numbers, in the second quarter of this year, the company sold $656 million of mobile ads, an increase from $375 million in the previous quarter.

5) Although engagement levels are always a concern, Facebook's measure of daily average users and monthly average users has remained consistently high and showing no signs of faltering. In July, the company reported its daily active users totaled 699 million for the month representing an increase of 27% year over year. In the same month, monthly active users totaled 1.15 billion users, an increase of 21% year over year.”

While both sides have valid points and arguments, this emphasizes the uncertainty behind Facebook’s stock at the present time. Regardless of which situation pans out, one thing is certain, purchasing Facebook stock any time soon is going to be a gamble that should be severely scrutinized beforehand.

WILL FLURRY BE THE NEXT BIG TECH IPO?

noreply@blogger.com (Accrued Interest) — Fri, 20 Sep 2013 17:36:00 +0000

Don’t feel bad if you’ve never heard of Flurry before. A lot of people haven’t, but if you own a smartphone your certain to have been affected by this quiet mobile adtech giant. Some surprising information can be found on their website. The company claims to have a reach of over 1 billion devices each month and mines 3 terabytes of data each day through 350,000 apps from 115,000 different companies.

Business Insider’s Jim Edwards had a talk with Flurry CEO Simon Khalaf about the future of the company:

Simon Khalaf, the CEO of mobile adtech company Flurry, tells Business Insider that an IPO is inevitable in the company's future because his business has grown so big.

There has been gossip about a possible Flurry IPO for months now. Large adtech companies are often aimed specifically at IPO "exits," so that their venture capital funders can get a payback on their investments. Millennial Media, Tremor Video, YuMe, Criteo and Marin Software have all gone public recently. Yet when CEOs are asked directly if they want the rich rewards of floating their companies on the public markets, they usually demur or hedge.

When we asked Khalaf about an IPO exit, however, he was refreshingly direct: "I consider an IPO an entrance," he tells us. "We don't have a choice, our volume is too high and our scale is too big for anyone to absorb us."

Flurry has a net revenue run-rate of about $100 million. It has 150 employees and has taken $50.5 million in funding from investors. And although that doesn't make Flurry the biggest player in mobile adtech — InMobi and Velti still have more employees, and Millennial has greater revenues — it is one of the biggest players in big data analytics and mobile app ad reach.

Flurry reaches 1.1 billion mobile devices each month with ad impressions inside apps, almost twice as many as Google, which is alarming because everyone knows that Google has the largest share of mobile ad revenue on the planet, which is in the billions of dollars. But the Flurry’s numbers refer to reach on devices via ads in apps. Google's mobile ad business is largely search. And the bulk of consumer time spent on mobile devices is in apps, not on the web, Khalaf says.

Flurry offers the full mobile ad stack, including a "supply side platform" for mobile app publishers who want to offers ad space for sale, a "demand side platform" for buyers who want to place ads, an analytics suite to measure the whole thing, and most recently a "real-time bidding" platform so that buyers can place ads on a live auction basis. That RTB marketplace, launched in April, already has 30 DSPs buying in it, Khalaf says. The Guardian and The BBC both use Flurry as publishers.

There is one more thing Khalaf is unusually direct about. Flurry is not yet profitable, he says. Usually when adtech CEOs are asked whether their businesses make money, they launch into an explanation of how they're investing for growth or scale (or they say something impenetrably complicated about EBITDA). When asked whether the company is profitable, Khalaf says, "No. In 2014 we're profitable maybe."

The reason: Flurry is spending $28 million a year on data centers. "The cost of analytics is huge," Khalaf says. Flurry wants to create the largest HBase cluster in the business, he says, referring to the gigantic — and gigantically expensive — database serving devices that can handle millions of lines of tabled information.

You can read the original article here: http://www.businessinsider.com/flurry-ipo-and-ceo-simon-khalaf-2013-9

WHAT YOU NEED TO KNOW ABOUT THE TWITTER IPO

noreply@blogger.com (Accrued Interest) — Fri, 13 Sep 2013 17:10:00 +0000

On Thursday Twitter announced via a tweet that they had confidentially filed their S-1 documents with the Securities and Exchange Commission for a planned initial public stock offering. Twitter, with 200 million users, is the currently most highly anticipated consumer Internet IPO. The excitement surrounding the Twitter IPO will be the largest since Facebook went public in May 2012. For investors looking to get in on the action here is what you need to know.

As Forbes explains, under SEC rules established in the JOBS Act passed last year, companies defined as “emerging growth companies” can file their S-1′s confidentially if their annual revenue is less than $1 billion.

Companies do not have to make their documents public until 21 days before the company goes on the “road show” to pitch the company to big investors on Wall Street for the IPO. The documents remain completely shielded from public until then.

Despite the confidential filing, this does signal that Twitter is making less than $1 billion in annual revenue. That’s generally in line with third party estimates. EMarketer in March estimated Twitter’s revenue at $582 million this year and close to $1 billion in 2014.

Just last week, Twitter acquired mobile ad exchange company MoPub for $350 million in stock, showing the much larger advertising ambitions beyond its promoted Tweets. MoPub offers ad services on a variety of publishers’ apps beyond Twitter.

However, investors are still waiting for details on how many shares of the social media company will be offered, the timing of the offering and the price of the shares. Typically, much-anticipated IPOs are doled out by the investment bankers running the deal to favored clients and long-standing customers. Individual investors interested in buying shares usually have to purchase them in the open market once trading begins. But experts are thinking Twitter may likely follow the lead set by Facebook and other recent IPOs in holding back some shares for individual investors. With most recent IPOs, there will usually be about 20% of the shares outstanding held back for individual investors, says Jay Ritter, professor of finance at the University of Florida.

Interested investors will need to check with their brokerages over the coming months to see how many shares, if any, will be available to them. Most large online brokerages have deals with underwriters that allow them to get allocations to certain IPOs.

More details will be revealed after Twitter officially files its IPO registration statement for the public to see, possibly as early as November.

Fast Facts about Twitter

Twitter was founded 2006 by Jack Dorsey, Biz Stone and Evan Williams.

In the first hour of @Twitter sending their IPO announcement tweet, 7,872 people retweeted the message.

Twitter soared to popularity in 2007 at the South By Southwest Interactive festival in Austin, Texas.

A billion tweets are sent every two and a half days. That's three for every man, woman and child in the U.S.

The 2013 Superbowl performance by Beyonce had 268 million tweets per minute, more than any other event in past two years.

DEFENSE STOCKS UP AS US EDGES CLOSER TO SYRIA STRIKE

noreply@blogger.com (Accrued Interest) — Fri, 06 Sep 2013 17:28:00 +0000

Last week I explored the relationship between the stock market and the imminent US strike on Syria in response to allegations that the Syrian government recently used chemical weapons against their citizens. At that time the market appeared to be in a holding pattern, evaluating the situation but unwilling to make a move. However a lot has happened in the past week which has clearly influenced investors.

Earlier this week the Senate Foreign Relations Committee voted to give President Obama limited authority to use force against Syria. The resolution would limit strikes against Syrian forces to a period of 60 days, with the possibility of 30 more days after consultation with Congress, and it would block the use of American ground troops.

The vote of 10 to 7 by the Senate Foreign Relations Committee capped a day of fierce debate in both houses of Congress that indicated there is a widespread impulse to respond to the deadly chemical weapons attack but deep divisions over how much latitude the president should have to do so.

The Obama administration said that while they expected the full Senate to vote next week, after Congress returns from recess, they did not think the House would act until the week after and were preparing for a prolonged debate. Senate leaders agreed on Wednesday night to hold a brief session on Friday to put the war resolution on the Senate’s calendar so the clock can begin counting down to a final vote toward the end of next week.

Secretary of State John Kerry argued the Obama administration’s case before the House Foreign Affairs Committee stating that extremist groups fighting against the Syrian government would become stronger if the United States did not carry out a military strike. Mr. Kerry said the United States had worked hard in recent months to persuade Arab nations and benefactors not to finance or arm the more extremist rebels who are battling Mr. Assad’s forces. But if the United States does not punish the Assad government, Mr. Kerry said, it is likely that some Arab supporters of the Syrian opposition will provide arms and financing to the best rebel fighters, regardless of whether they are extremists. “We will have created more extremism and a greater problem down the road,” Mr. Kerry said.

However, most world leaders do not believe that a US attack is the best course of action. UN Secretary General Ban Ki-moon has warned that any military strikes against Syria for an alleged chemical weapons attack are legal only in self-defense or if approved by the UN Security Council. Ban also cautioned nations such as the United States and France that may be considering such strikes that any "punitive" action taken against Syria could unleash more turmoil and bloodshed.

Pope Francis urged the world to abandon the "futile pursuit" of a military solution in Syria. "To the leaders present, to each and every one, I make a heartfelt appeal for them to help find ways to overcome the conflicting positions and to lay aside the futile pursuit of a military solution," Francis wrote in a letter to Russian President Vladimir Putin as the G-20 meeting got under way in St. Petersburg.

Russia opposes any outside military intervention in Syria's civil war and says it suspects the gassings were staged by rebels seeking foreign involvement in the conflict. Putin escalated concerns when he indicated in an interview that his country could send the components of a missile shield to Syria and the region if the U.S. attacks. U.S. Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, testified this week that the Russians might even replace any military assets the U.S. destroys in a strike. This raises the possibility of a "limited" strike on Syria turning into a proxy war between Russia and the U.S.

The United States also claims to have intercepted an order from an Iranian official instructing militants in Iraq to attack U.S. interests in Baghdad in the event the Obama administration launches a military strike in Syria.

China is warning that any military action against Syria will push up oil prices and hurt the world economy. Speaking in St. Petersburg Thursday, Chinese Vice Finance Minister Zhu Guangyao said that "Military action would have a negative impact on the global economy, especially on the oil price - it will cause a hike in the oil price," before citing estimates that a $10 rise in oil prices could push down global growth by 0.25 percent.

Oil prices are largely unchanged in the past week with West Texas Intermediate currently at $108.37 compared to $108.80 last week and Brent Crude currently at $115.26 compared to $115.16 last week.

Aerospace and defense stocks have seen gains over the past week however.

Lockheed Martin (LMT) is currently $124.14 compared to $122.50 a week ago.

52wk high: 126.729

52wk low: 85.88

EPS: 8.92

PE: 13.70

Div Rate: 4.60

Yield: 3.7055

Market Cap: 39.84b

Volume: 1.34m

Boeing (BA) is $106.65 currently compared to $104.00 this time last week.

52wk high: 109.49

52wk low: 69.03

EPS: 5.47

PE: 19.20

Div Rate: 1.94

Yield: 1.819

Market Cap: 80.46b

Volume: 2.59m

Northrop Grumman (NOC) spiked from $92 to $94 earlier this week but has settled to just under $93 currently.

52wk high: 96.4201

52wk low: 62.80

EPS: 8.04

PE: 11.60

Div Rate: 2.44

Yield: 2.608

Market Cap: 21.41b

Volume: 54.39k

General Dynamics (GD) experienced a $2 increase earlier this week and is currently about a dollar higher than last week.

52wk high: 87.85

52wk low: 61.70

EPS: -0.85

PE: N/A

Div Rate: 2.24

Yield: 2.6359

Market Cap: 29.48b

Volume: 78.89k

Raytheon (RTN) shares are also about a dollar higher than last week after seeing an increase of more than $2 earlier in the week.

52wk high: 77.93

52wk low: 52.24

EPS: 5.91

PE: 12.80

Div Rate: 2.20

Yield: 2.9024

Market Cap: 24.28b

Volume: 156.79k

In light of the events and the market movement in these stocks this week it’s apparent which way investors are leaning on the issue. If you haven’t already examined the possibility of adding one or more of these to your portfolio then now is the time to do so.

HOW THE MARKET IS REACTING TO AN IMMINENT US ATTACK ON SYRIA

noreply@blogger.com (Accrued Interest) — Fri, 30 Aug 2013 19:19:00 +0000

In the wake of what the US claims is a confirmed chemical weapons attack by the Syrian government on their own citizens, a US military strike appears to be imminent.

The Wall Street Journal reports that the Obama administration laid the groundwork for unilateral military action in Syria, a shift officials said reflected the U.K.'s abrupt decision not to participate and concerns that President Bashar al-Assad was using the delayed Western response to disperse his military assets.

The push for a quick international strike to punish Syria for what the U.S. said was a chemical-weapons attack appeared in disarray on Thursday, after British lawmakers defeated a government motion in support of military action.

But President Barack Obama is prepared to act without Britain, officials said, noting that unlike U.S. involvement in the 2011 military operation in Libya, the options under consideration in Syria are smaller-scale and wouldn't require a coalition to be effective.

"Here, what's being contemplated is of such a limited and narrow nature that it's not as if there's a similar imperative for bringing in different capabilities from different countries," a senior administration official said. "We believe it's important that there be diplomatic support from key allies, and we think we're getting that."

After a week of U.S. saber rattling that raised expectations about an imminent attack on Syria by a U.S.-led coalition, the White House had yet to release details about the intelligence, but said its findings conclusively showed the Assad regime used chemical weapons on a large scale against civilians last week.

U.S. intelligence agencies believe the main poison used was likely sarin, and estimate the death toll at 500 to 1,000 people, according to a senior U.S. official.

Syrian government officials have denied the Assad regime used chemical weapons, and accused their opponents of staging the attacks to provoke international action. Mr. Assad on Thursday said that "Syria will defend itself against any aggression," Syrian state media reported.

As of Thursday evening, neither Mr. Obama nor his aides had made a public case to support their claims about Mr. Assad's role in the attack. The White House has said it would make some findings public by the end of this week.

Friday morning in the Philippines, Defense Secretary Chuck Hagel said despite Britain's rejection of support, the U.S. would continue to work to build an international coalition. "Our approach is to continue to find an international coalition that will act together," Mr. Hagel said.

White House officials on Thursday signaled a desire to act quickly in Syria, on the U.S.'s own timetable and unilaterally, if necessary. A meeting of the permanent members of the U.N. Security Council in New York on Thursday ended with no sign of progress on an agreement.

U.S. officials have said the intelligence is clear-cut and that they don't need to await the U.N. investigators' findings before deciding how to proceed.

U.S. officials on Thursday defended the strength of the intelligence linking the Assad regime to the alleged Aug. 21 chemical attacks, but the Obama administration held off on releasing the unclassified intelligence.

One senior U.S. official cited "multiple pieces of evidence of regime involvement," adding: "Nobody's thinking that this is a rogue operation" by the Syrian unit that controls the regime's arsenal of poison gas.

Everyone knows that world conflict can cause volatility in the market, and especially with a global economy that is still weak and recovering but how are some markets reacting to the imminent threat?

AEROSPACE AND DEFENSE

Lockheed Martin (LMT). Lockheed Martin's main weapons system is the F-35 joint strike fighter, expected to become one of the world's largest military aircraft programs. Stock prices hit their 52 week high last week but since slipped back and is currently trading around $122.50 but trending back up.

52wk high: 126.729

52wk low: 85.88

EPS: 8.92

PE: 13.70

Div Rate: 4.60

Yield: 3.76

Market Cap: 39.28b

Volume: 221.92k

Boeing (BA). Boeing supplies the U.S. military and other international forces with the likes of the AH-64D Apache combat helicopter, drones, missiles like the A160T Hummingbird, and the F/A-18E/F Super Hornet strike fighter. Stock is currently trading about $5 off the 52 week high and trending down.

52wk high: 109.49

52wk low: 69.03

EPS: 5.47

PE: 18.90

Div Rate: 1.94

Yield: 1.8489

Market Cap: 78.91b

Volume: 500.47k

Northrop Grumman (NOC). Northrop Grumann's areas of focus include drones and cyber security in support of its homeland security solutions. They also develop CBRNE (Chemical, Biological, Radiological, Nuclear and Explosives) detection systems in place around the U.S. to identify potential threats. Stock is trading about $4 off their 52 week high and is trending down.

52wk high: 96.4201

52wk low: 62.80

EPS: 8.04

PE: 11.60

Div Rate: 2.44

Yield: 2.622

Market Cap: 21.38b

Volume: 154.74k

General Dynamics (GD). General Dynamics produces military vehicles such as the legendary Abrams M1 Main Battle Tank, as well as ships, munitions, and military-grade communication systems. Stock hit the 52 week high near the beginning of August but is currently trading about $4 below that and trending down.

52wk high: 87.85

52wk low: 61.70

EPS: -0.85

PE: N/A

Div Rate: 2.24

Yield: 2.6801

Market Cap: 29.17b

Volume: 148.96k

Raytheon (RTN). Raytheon's sectors of expertise are missiles and electronics. Their stock also hit the 52 week high last week and is now about $2 below that and trending down.

52wk high: 77.93

52wk low: 52.24

EPS: 5.91

PE: 12.80

Div Rate: 2.20

Yield: 2.907

Market Cap: 24.37b

Volume: 180.65k

OIL AND PETROLEUM

Being the chief export of the Middle East it’s no wonder that oil and petroleum prices would reflect the uneasiness of a potential aggravation in the regional conflict.

Both West Texas Intermediate and Brent Crude have been trading well above the $105 mark for most of the quarter but both experienced significant spikes last week following the announcement of the chemical attack. Currently they are at $108.80 and $115.16, respectively, and trending down but if the US does follow through with a military strike it’s likely they will experience another sharp increase.

While it looks like the market is taking it’s time to adjust and react to the current situation but it would be advisable to keep an eye on these areas over the next few weeks as the situation develops more.

SEC RENEWS RULES PUSH IN WAKE OF LATEST NASDAQ DEBACLE

noreply@blogger.com (Accrued Interest) — Fri, 23 Aug 2013 21:39:00 +0000

On Thursday August 22, 2013 the Nasdaq stock exchange went down, leaving a flood of investors unable to execute trades. As a result the SEC has renewed a push to implement new accountability rules. Below is the original article as reported by Reuters.

Thirty minutes into the crippling outage that hobbled the Nasdaq stock market on Thursday afternoon, stopping all trading in $5.9 trillion worth of U.S. equities, exchange officials had the problem fixed.

It was another two-and-a-half hours, however, before they were ready to flip the switch and turn the all-electronic market back on.

Most of the 191 minutes that the exchange was dark was spent in sometimes frantic conversation with scores of banks, brokers, investment companies and rival exchanges who wanted Nasdaq's assurance that a restoration of trading would be orderly and would not lead to panic.

"We had to make sure all the exchanges were connected to us successfully and if the firms on the outside could get in," said one Nasdaq official who spoke on condition of anonymity.

Meanwhile, banks' trading desks were cautioning Nasdaq, operated by Nasdaq OMX Group Inc, not to rush to reopen, fearing that a restart full of technical errors would only sap more confidence from rattled markets, according to three sources at brokerages and banks who declined to be identified.

In the end, the reopening of trading did go relatively well.

Transactions first restarted at 3 p.m. EDT (1900 GMT) in a single microcap stock, Atlantic American Corp, a test case picked for its front-of-the-alphabet ticker. Twenty-five minutes later, the rest of the market opened, and, according to a Nasdaq statement, "The trading day finished in normal course."

Shares of Nasdaq itself, which initially fell by more than 5 percent when trading resumed, recovered some of their lost ground to close the day 3.4 percent lower. The widely tracked Nasdaq Composite Index gained nearly 1.1 percent.

PERSISTENT GLITCHES

While the worst case scenarios may have been averted, the outage still stands as among the most serious in a series of recent technological failures to hit the U.S. securities business, including a software issue at the Chicago Board Options Exchange this spring that delayed the start of trading there for half a day.

It was also the latest black eye for Nasdaq, which in May agreed to pay $10 million, the largest penalty ever against a stock exchange, to settle SEC civil charges over its mishandling of Facebook's initial public offering in 2012.

Late Thursday Nasdaq identified the problem as a "connectivity issue between an exchange participant and the SIP," or Securities Information Processor - essentially the system that receives all traffic on quotes and orders for stocks on the exchange.

This problem "led to degradation in the ability of the SIP to disseminate consolidated quotes and trades," Nasdaq said in a statement. "The cause of the issue has been identified and addressed."

Whether it has been addressed to the satisfaction of regulators is another question. U.S. Securities and Exchange Commission Chair Mary Jo White called for a meeting of Wall Street leaders to help insure the "continuous and orderly" functioning of securities markets.

The incident "should reinforce our collective commitment to addressing technological vulnerabilities of exchanges and other market participants," she said.

Thursday's outage could well give White fodder to press ahead with new rules, proposed in March, that would hold exchanges, clearing agencies and certain "dark pool" trading venues more accountable for taking steps to prevent potential systems disruptions.

The rules, if adopted, would replace the current regulatory model in which exchanges rely on voluntary guidance known as "Automation Review Policies" to address security and stability issues with their systems.

The SEC rushed to roll out its proposal as a direct response to several high-profile software problems last year, including Nasdaq's debacle with the Facebook IPO and a near-collapse at Knight Capital, a major Nasdaq market maker, as well as the two-day shutdown of the U.S. equity market due to Superstorm Sandy.

Exchanges, including Nasdaq and rival NYSE Euronext, parent of the New York Stock Exchange, pushed back, citing a number of concerns, including costs and an "unduly broad" requirement to disseminate information to member firms about certain incidents. "This requirement would likely have a chilling effect on communications," they wrote.

The SEC agreed to extend the comment period on the rule, effectively delaying it, but late Thursday after this latest incident, White said she will push to get it completed.

AVOIDING THE 'DOOMSDAY SCENARIO

The problems surfaced at 12:14:03 p.m. (1614 GMT), when all traffic through Nasdaq stopped abruptly.

During the shutdown, trading of shares not listed on Nasdaq continued, but transactions could not be executed on the Nasdaq platform. Options trading was also halted. All rival exchanges agreed to halt trading of any Nasdaq-listed issue.

In Nasdaq's Transaction Services division, it was quickly emergency mode as soon as the outage struck, the Nasdaq official said.

The team focused primarily on whether the exchange should reopen trading as the clock ticked toward the regular 4 p.m. close. They raised the "doomsday" scenario of reopening and not being able to execute a flood of orders.

"We asked all the what-if questions," the official said.

As frustrated as Nasdaq customers were by the outage, they were more concerned that the exchange have all its ducks in a row before attempting to restart.

"The general feedback given to Nasdaq was, 'Don't rush back to fix it. It will be 10 times worse to come back online in a rush than to take time and get it right,'" said one source.

At Nasdaq, coordination was tight between the exchange's technology staff, rival exchanges that had halted their trading of Nasdaq stocks, brokerage firm members and the firms' major customers.

"It's not an excuse, but anyone who understands the complexities of the trading and matching systems and the difficulties of having multiple exchanges operating and trading the same stocks can understand how difficult this was," the Nasdaq official said. "It worked. It looks like the customers and the public did not get hurt."

Not all will agree with that assessment, but it could be some time before the size of losses, if any, can be determined. And Nasdaq faces a reputational risk that could damage its listings business.

"If you're advising companies to really go public, are you advising them to go public on Nasdaq?" said one source.

APPLE ON THE REBOUND

noreply@blogger.com (Accrued Interest) — Fri, 16 Aug 2013 18:06:00 +0000

Back in January I discussed the slip in Apple share price. Even though the price had experienced a sharp decline from a record high of $705.07 down below $500 I still felt the company had plenty of potential.
As a follow-up to that post, here is the latest assessment of Apple by Ian Wyatt, Chief Investment Strategist for Wyatt Investment Research.

After billionaire investor Carl Icahn announced a stake in Apple (AAPL), shares jumped nearly 5%. The 77-year old activist investor announced his position on Twitter two days ago: "We currently have a large position in Apple. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."

The Wall Street Journal reported that he's been building his $1.5 billion stake in Apple over the last month. What's his outlook? Icahn says, "Even without earnings growth, we think it ought to be worth $625." He's recommending that CEO Tim Cook increase the record $60 billion share buyback program. Doing so would decrease the number of Apple shares, and raise the EPS.

This is just the latest news that helped lift Apple shares by more than 100 points. The stock is now up around 27% since its July lows of $393, marking a big comeback for the tech giant. I've been bullish on Apple shares. In "The Truth About Apple," I told readers:

Like all big tech companies, Apple has matured. The idea that innovation at Apple died with Jobs doesn't sit well with me. While Apple will continue to innovate and create new products, it doesn't really matter. Because Apple's stock price reflects a stale business that will never grow again.
In that June 18 article, I advised readers to buy Apple stock. Here's exactly what I said:
Value and income investors alike should love the stock, thanks to the shareholder-friendly initiatives and the cheap stock price.

At $432, now is the perfect time to buy Apple shares. The stock is cheap, with a P/E just north of 10. The company's growth is superior to most companies of its size. And the balance sheet is pristine, with more cash than many countries.

Apple may not have the high dividend yield that most income investors seek. But you should be attracted to the growing dividend, huge share buyback program and the cheap stock.

I've personally owned Apple shares since 2010. The decline of Apple shares from $700 to less than $400 was painful. But like many Apple shareholders, I kept every one of my shares. In fact, I even violated a crucial investing rule: Don't try to catch a falling knife. Even as Apple shares plunged, I bought a little more stock in January at $508 and February at $459. Averaging down can be a mistake, but it occasionally creates big profits.

Just eight days after telling readers to buy Apple shares, I made a big move. I doubled-down on Apple in late June, and bought a sizable position at $398. Those shares are now up 25% in less than two months. Why did I buy Apple at that time? The reason is simple. I looked at Apple and saw value. The stock was trading at just 10x earnings. That's cheap for any company. And when you get a chance to buy a great company at a bargain price, you snap it up.

Plus, I'm an Apple customer who loves the products. My iPhone, MacBook, iPad, and iTunes are all intertwined in the Apple ecosystem. Like millions around the world, I'm a customer for life. That's why, when I saw Apple briefly dip below $400, I pulled the trigger. At the time, there was rampant pessimism. And that can be a sign of a bottom.

Apple shares are now up considerably. But the stock is still cheap. On an enterprise value basis -- which removes the value of the company's cash -- shares trade at a multiple of just 9x this year's earnings estimates. That's a 45% discount to the S&P 500.

My view on Apple hasn’t changed: "Apple is truly a unique opportunity to buy a world-class company at a very reasonable price. With the stock market near all-time highs, Apple certainly appears attractive. Especially when you consider the potential for substantial gains if the company unveils another device that changes the world..."

If you're looking for value in this rising stock market, look no further. You've found a great bargain in Apple shares. That's why Carl Icahn is buying Apple shares. I hope you've done the same.
The original article by Ian Wyatt can be found at http://www.wyattresearch.com/article/apple-going-to-625/30179

Festival of Frugality #394

noreply@blogger.com (Accrued Interest) — Wed, 14 Aug 2013 22:04:00 +0000

Hey all, this week I am hosting another Festival of Frugality.

So many great thoughts being shared in the Personal Finance community it is hard to pick favorites. Even so, I picked some favorites anyways.

Coming in first is a very interesting look at what is more important, your summer beach body or your finances. Surprisingly, Daniel from Sweating The Big Stuff shows us that most people would rather stay thin than gain 25lbs and completely erase their debt. What would you do?

Next is Evan from My Journey To Millions who takes a look at a parents role in choosing a child's major. Personally, I feel that a parent has no right to tell their child what to major in but they have every right to refuse to help finance their life decisions. If my child wants to go into Family Social Science I am sure I won't feel bad as I help them find federal and private loans that will finance their decision. Now, if they want to go into Computer Engineering, I will be glad to drop a few dollars in hopes of getting some assistance later in life when I am heading off to a "retirement" home.

FI Journey comes in with some interesting insight on The True Impact Of Lifestyle Choices. I loved this article as I am always re-evaluating the life decisions I make when it comes to spending time at work, on fun, on educations, relaxing, etc... It is always difficult for me to be content as I live in one of the wealthiest area's in the United States. I find it best to remember what the ever interesting Theodore Roosevelt said, "Comparison is thief of joy."

Holly from Club Thrifty shared her impressive 30 month saving results. Check it out, it is very impressive.

While I hope you are rarely in need of the help Christopher from This That And The MBA offers in his Tips to Deal With Creditor Phone Harassment it is never bad to know that you have options. One thing I will add to this is that if you are indeed harassed beyond sending a cease and desist letter you may be entitled to $1000 (+ attorney fees) under the FDCPA. One thing to remember though is that if you do send a letter it may prompt a collector to move to sue... which is always a bummer. Always best to simply repay your debts as quickly as possible.

Check out Money Reasons results from the "Do You Live in a Bubble" test. I am from a rural middle class family and scored as such. That means the test is 100% accurate.

Amanda from Frugal Confessions reminds us that we can save money even if we do live paycheck to paycheck. While I don't quite qualify for saying I live "paycheck to paycheck" her tips are definitely applicable.

Out Of Debt Again provides help with reconciling your PayPal business account. As someone that deals with this exact scenario every month I can say that this is quite helpful. Also, Dear PayPal: I hate you and I ~~love~~ ~~like~~ need you.

I love this post from Gajizmo.com on when you should buy anything. No idea if it is accurate except things like buying boats in Feb.

Dr. Jason of Modest Money comes in with some great insight on cosigning loans. While I don't agree that the best option "is to NEVER cosign on a loan for any reason" it does give great insight on what can go wrong. I figure it is best to evaluate more than the money risks of cosigning. After all, everyone dies sometime and money is no fun if it controls your life.

WILL BLACKBERRY GO PRIVATE?

noreply@blogger.com (Accrued Interest) — Fri, 09 Aug 2013 15:00:00 +0000

I recently posed the question, is it time to sell Blackberry? Now Reuters, citing unnamed sources familiar with the situation, reports that BlackBerry Ltd is beginning to consider the possibility of going private.

Chief Executive Thorsten Heins and the company's board is increasingly coming around to the idea that taking BlackBerry private would give them breathing room to fix its problems out of the public eye, the sources said.

"There is a change of tone on the board," one of the sources said on Thursday.

No deal is imminent, however, and BlackBerry has not launched any kind of a sale process, the sources said. Even if it tried, BlackBerry could find it hard to come up with a buyer and the funding to go private. With the company still posting losses and bleeding subscribers, private equity firms and other buyers may not want to step up.

The company's shares have fallen more than 19 percent this year. Its market value has fallen to $4.8 billion, from $84 billion at its peak in 2008.

BlackBerry, which had been pinning its hopes for a turnaround on its new line of BlackBerry 10 devices, declined to comment. The sources declined to be named because these discussions are private.

BlackBerry's openness to consider a deal marks a radical shift in thinking at the once high-flying smartphone maker. Until recently, BlackBerry, formerly known as Research in Motion and a pioneer in providing secured emails on handheld devices, had been bent on staying independent, betting its turnaround on its latest smartphones.

Last month, Heins said the company was on the right track and just needed more time to fix its problems. He said the company will unveil more devices that run on the BlackBerry 10 operating system over the next eight months.

The company has also been looking at options such as licensing its BlackBerry 10 software and other partnerships.

Waterloo, Ontario-based BlackBerry has recently had discussions with private equity firm Silver Lake Partners about potential collaboration in enterprise computing, one of the sources said.

Silver Lake is caught in a bruising $25 billion battle to take Dell Inc private. Should it succeed in the Dell buyout, one possibility could be for it to collaborate with BlackBerry in mobile computing, where the PC maker has struggled to gain traction, the source said.

The talks with Silver Lake did not involve any buyout or other transaction-related discussions, the source said.

Silver Lake declined to comment.

Pressure is only increasing on the smartphone maker. BlackBerry 10 sales have come in well below some analysts' expectations, raising questions about whether the company can quickly win back market share from Apple Inc's iPhone as well as Samsung Electronics Co Ltd's Galaxy devices and other phones powered by Google Inc's Android operating system.

Some investors say the company must now look at all of its options, from a sale of the whole company to a sale of parts. Its valuable patent portfolio and high-margin services business could draw interest from technology companies.

But private equity firms have circled the company for more than two years and have tried without success so far to figure out ways to structure a deal.

Moreover, Ottawa reviews any big takeover of a Canadian company for competitive and national security reasons. Government officials have often said they want BlackBerry to succeed as a Canadian company, but concede they do not know how things will play out.

Tell us what you think, should Blackberry go private? Is it time to dump those shares or should you hang onto them a little while longer?

Invest Like Warren Buffett

noreply@blogger.com (Accrued Interest) — Fri, 02 Aug 2013 21:41:00 +0000

Warren Buffett is arguably the most successful modern investor in the stock market and there’s good reason why. He doesn’t invest on a whim or let the market trends dictate his investments. Rather he uses a calculated approach. He relies upon strategies that include value investing, which is the process of looking for stocks that are trading for less than their intrinsic values as well as paying high yielding dividends. Buffett has also coined the phrase economic moat, which is a description of the company’s competitive advantage. Here are some long term stocks to consider that have certainly gotten Buffett’s attention in the past.

NIKE

Nike, (NKE) is a leader in apparel, sporting goods, and just about anything else dealing with athletics. The company is number one in just about every market which leads to high profit margins.

Nike shares are trading at just under $67 per share, up from a 52 week low of $44.82 and there’s no indication that upward momentum will stop anytime soon.

CONOCOPHILLIPS

ConocoPhillips (COP) is an integrated energy company that participates in all parts of the oil and gas industry, from drilling to refining to end sales of refined products.

Like Nike, ConocoPhillips is currently trading just under $67 per share and appears to only be headed higher. Current dividends are $2.76.

COSTCO

Costco (COST) members pay an annual fee to Costco for the right to shop at their stores, and most will tell you that they can save more money than the membership cost in a single visit. Costco sells mostly grocery items, produce and consumer goods, but you can find just about anything in a Costco warehouse, including clothes, electronics, seasonal goods, jewelry and home improvement items.

Costco stock is currently trading around $119 per share with a dividend rate of $1.24.

COCA-COLA

The Coca-Cola (KO) company is by far the most successful soft drink maker in the world and the company continues to grow around the world, following a unique strategy of selling mainly syrup and concentrate to bottlers and restaurants, which then formulate the finished products that you see in grocery stores and restaurants.

Coca-Cola stock is currently trading around $40 per share with a dividend rate of $1.12

PROCTER & GAMBLE

Procter & Gamble (PG) is a consumer products Goliath, with brands like Tide, Bounty, Pampers, Head & Shoulders, Gillette, Olay, Crest, Oral-B, Dawn, Downy and Duracell. P&G's strategy is to only compete in markets where it has a No.1 or No.2 market share, and get rid of products when it can't obtain that leadership position.

Procter & Gamble stock is currently trading around $81 per share and they have a dividend rate of $2.406

IS HALLIBURTON A BUY?

noreply@blogger.com (Accrued Interest) — Mon, 29 Jul 2013 20:43:00 +0000

Halliburton (HAL) has had a rocky time in the public relations department ever since the 2010 Gulf of Mexico oil spill but that doesn’t seem to have rankled investors too much even with the latest revelation that the company destroyed evidence related to the Deepwater Horizon explosion and subsequent oil spill.

WHO IS HALLIBURTON

Halliburton is one of the world’s largest providers of products and services to the energy industry. The company serves the upstream oil and gas industry from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field.

DESTRUCTION OF EVIDENCE

Thursday July 25th, the Justice Department announced that Halliburton has agreed to plead guilty to destruction of critical evidence after the Gulf of Mexico oil spill in 2010. The oil services company said it would pay the maximum allowable fine of $200,000 and will be subject to three years of probation.

The Justice Department said Halliburton had recommended to BP, the British oil company, before the drilling that the well include 21 metal centralizing collars to stabilize the cementing. BP chose to use six instead. During an internal probe after the accident, Halliburton ordered workers to destroy computer simulations that showed little difference between using six and 21 collars, the government said, after which the company continued to say that BP was neglectful to not follow its advice.

While Halliburton’s stock dipped slightly following Thursday’s announcement, it surged nearly $2.00 in early trading on Friday. This might signal investors willingness to overlook the company’s indiscretions in favor of profits.

2013 QE2

On July 22 Halliburton released their second quarter 2013 earnings information.

Income from continuing operations for the second quarter of 2013 was $677 million, or $0.73 per diluted share. This compares to income from continuing operations for the first quarter of 2013 of $624 million, or $0.67 per diluted share, excluding a $637 million charge, after-tax, or $0.68 per diluted share, to increase a reserve related to the Macondo litigation.

Halliburton's total revenue in the second quarter of 2013 was a company record of $7.3 billion, compared to $7.0 billion in the first quarter of 2013. Operating income was $1.0 billion in the second quarter of 2013, compared to operating income of $902 million in the first quarter of 2013, adjusted for the Macondo charge. For the first quarter of 2013, reported loss from continuing operations was $13 million, or $0.01 per diluted share, and reported operating loss was $98 million.

“I am pleased with our second quarter results, as total company revenue of $7.3 billion was a record quarter for Halliburton,” commented Dave Lesar, chairman, president and chief executive officer.

FUTURE OUTLOOK

“For the third quarter, we anticipate the U.S. land rig count to be flat. We are observing a continuing trend towards multi-well pad activity among our customer base, which we believe will result in higher service intensity. Ultimately, we believe this efficiency trend bodes very well for us, as our scale and expertise allows us to lead the industry in executing factory-type operations. We also expect North America margins to continue to expand over the balance of the year. We continue to be optimistic about Halliburton’s performance for the remainder of 2013, our ability to continue growing our North America margins, and continued revenue and margin expansion in our international business. We are relentlessly focused on delivering best-in-class returns. Our recent quarterly dividend increase, aggressive stock repurchases, and our $5 billion stock repurchase authorization reflect our growing confidence in the strength of our business outlook,” concluded Lesar.

Is it Time to Sell Blackberry?

noreply@blogger.com (Accrued Interest) — Tue, 02 Jul 2013 15:58:00 +0000

Investors and consumers alike have been speculating about the health of Blackberry (BBRY) for quite some time now, and for good reason. With the latest earnings information it might be time for you to reevaluate your positions in Blackberry. An editor’s pick on seekingalpha.com has distilled this information into a quick and easy reference that we have listed for you here. Click here to read the original article.

BlackBerry (BBRY) this morning reported its Q1 2014 fiscal year earnings. This is a bomb of a report. The company did not release the total number of BB10 units sold. The EPS number was negative and missed expectations. The only positive at all is the company continued to build its cash which will support the stock, but at what price? BlackBerry has traded down over 15% in pre-market trading. The earnings call will be more critical than ever for BlackBerry. Tune in to it before you trade today.

Earnings Highlights

Diving into the earnings report here are the critical figures, their context, and a quick take on how I am interpreting each figure and how the Street might interpret each:

BB10 Unit Sales

Q1 2014 - WHO THE HECK KNOWS
Q4 2013 - ~1M units
Variance - ?????

o Grade: F - If BlackBerry does not report the BB10 unit sales as part of its earnings call, I would tell you that I would be very scared to own this stock going forward. Even if they do report these sales, they appear to have missed expectations.

BlackBerry Phone Unit Sales

Q1 2014 - ~6.8M units
Q4 2013 - ~6M units
Incr / (Decr) - .8M units up 13%

o Grade: F - BlackBerry sold 1M BB10 units in Q4 2013 out of 6M total units. I have seen very few estimates of less than 3M BB10 units for Q1 2014. For this to have happened, the company would to have had a mix of older phones of about 3.8M units and 3M BB10 units. That could be possible, but it is not likely. I do not see how any bull will be able to spin this number.

Total Revenue & Gross Margin %

Q1 2014 - $3.1B and 33.9%
Q4 2013 - $2.68B and 40.1%
Incr / (Decr) - $.42B and (620bps)

o Grade: D - Gross margin is the more important of the two figures. The company reported that Gross Margin % was negatively impacted by 200bps from a non-recurring item. Even still, the drop from Q4 2013 is still material. Why? The company will have to explain this on the conference call and I just do not think there will be a good answer.

Service Revenue

Q1 2014 - $806M and 26%
Q4 2013 - $964M and 36%
Incr / (Decr) - ($158M)

o Grade: C - The reported number is $72M lower than a normalized number due to a one time (hopefully?) foreign currency issue in Venezuela. Even when adding the $72M back to the reported number, the drop was 9% from the last quarter. Thorsten Heins provided guidance of a single-digit drop on the last conference call, but seeing the drop being as high as 9% is very concerning.

Cash and Equivalents

Q1 2014 - $3.1B
Q4 2013 - $2.9B
Incr / (Decr) - $.2B

o Grade: A+ - At some point in time, it will be hard to give BlackBerry an A for just maintaining its cash. The company needs to sell phones and it is struggling mightily to do this. This cash should support the share price, but it might not provide support until shares have fallen 20%.

North America

The only slight operating positive is that the company generated an increase in revenues from North America on a sequential basis and appears to have stopped the bleeding in this critical region for the time being.

Outlook Going Forward

The outlook going forward took a turn for the worse this morning. The earnings conference call should be a complete cluster and management is going to be on the defensive. If the company cannot give a reasonable reason for why BB10 sales appear to be so low, or does not disclose this number, the selling pressure will be immense. Even if the number is disclosed, this report has much more fodder for the bears than the bulls.

Three Oil Stocks to Consider

noreply@blogger.com (Accrued Interest) — Fri, 28 Jun 2013 15:55:00 +0000

Oil prices have remained strong but a few oil company stocks have taken a dip. This presents investors with the potential for a solid investment opportunity. One seekingalpha.com contributor has tracked and analyzed this opportunity, coming up with three oil company stocks that you might want to consider.

Warren Resources, Inc. (WRES) was trading for close to $3 just days ago, but the market decline has pushed it down to the $2.50 level which has historically been a great buying opportunity since the stock has bounced off that level multiple times in the past year. Since November of 2012, the market and this stock have seen volatility, but in about 6 different selloffs since then, this stock has always been a buy around the $2.50 to $2.60 level.

The company is profitable and it has been growing reserves over the past few years. For example, the latest 10-k filing shows that total net proved oil and natural gas reserves in millions of barrels of oil equivalent (MBoe) grew from 21,617 in 2010, to 22,273 in 2011, to 24,919 as of December 31, 2012. That's a jump of about 20% in just a couple of years and since around 85% of its acreage is currently undeveloped, there could be substantial future growth prospects in terms of reserves and production growth.

ConocoPhillips (COP) shares have also experienced a sharp pullback in recent days but this appears to be yet another buying opportunity. Not long ago, this stock was trading for $64 per share, but the market decline has pressured it back down to just $60. I consider this stock to be in the "buy zone" because it is still in a solid uptrend as evidenced by the chart below, and at an ideal entry point. As the light blue trendline shows, this stock is now at the low end of the recent trading range and yet it still remains in a positive uptrend. That is what makes this stock worth buying now.

ConocoPhillips shares appear to be a low-risk way to gain exposure to oil, and a higher than average dividend. It currently yields about 4.4% and the company has been raising the dividend over time. For example, in 2008, the quarterly dividend was 47 cents per share, but due to consistent increases, it now pays 66 cents per quarter. That is a dividend growth rate of about 50%, in just 5 years.

ConocoPhillips has been reporting strong financial results. For the first quarter of 2013, it earned $2.1 billion, or $1.73 per share. Some of the highlights include: First-quarter total production of 1,596 MBOED. Eagle Ford, Bakken and Permian combined production were up 42% when compared to first quarter 2012.

NGP Capital Resources Company, Inc. (NGPC) shares were trading for about $6.75 just a few days ago, however, the market pullback has punished many stocks, especially dividend-payers. The stock is currently just above the $6 level and it appears to be in the "buy zone" now.

Back in May, the shares suffered a similar sell-off, and then went right back up to over $6.80 per share. The shares seem to be finding support again at the $6 level, and if that is the case the stock could be putting in a very bullish "double bottom" now. The recent pullback seems excessive and investors who have been panic-selling dividend stocks in the past few days, might soon regret it. Even if the 10-Year Treasury Bond now yields about 2.5% (instead of 2%), it still is not enough to pay the bills for most investors. Meanwhile, the sell-off in this stock has pushed the yield to about 10.5%. Hold this stock for the next five years and you might have well over 50% in gains from the dividend payout. Buy a Treasury Bond that yields 2.5%, hold it for five years and you will be lucky to have 12.5% returns. Plus, while bonds cannot grow earnings, a company like this could be positioned to increase the dividend in the future.

Visit http://seekingalpha.com/article/1526722-these-3-oil-stock-bargains-are-in-the-buy-zone-now to read the full analysis of these three companies.

FIVE UTILITIES STOCKS TO CONSIDER

noreply@blogger.com (Accrued Interest) — Mon, 17 Jun 2013 21:30:00 +0000

Recent selling off of utilities stocks may be presenting investors with a good opportunity to entry into the sector.

As Gary Cheng reports, Utilities stocks as represented by the Utilities Select Sector SPDR ETF (XLU) have fallen out of favor lately since the share price peaked in late April. The sector ETF has dropped 5.5% in the past four weeks and 10% since its late April peak, making it the worst-performing sector year-to-date. The interest rate sensitive sector is pulling back hard as investors speculate that the Fed may begin to taper its QE3 stimulus program and long-term interest rates begin to rise. Valuation of the group as a whole had also gotten fairly expensive relative to the market and remains pricey at 18.7 times trailing earnings while the sector's earnings are expected to grow just 3% - 5% per year, which is far below the 11% expected earnings growth for the S&P 500 Index.

The economic data released by the government in the past few months supports the notion that the economy is recovering at a slow and steady pace with gains seen in job creation and housing activities. Cheng expects the same pattern emerging in the next few months unless the Fed surprises us with a much earlier tightening time line. There will also be continuing talk about the premature end of the Fed's QE3 program, which will likely further pressure utilities stocks and XLU share price may have additional 5% downside until it reaches a stronger long-term trend line support at around the $35 - $36 level.

It's understandable that some investors may want to shun the utilities stocks altogether in an uncertain interest rate environment. Rather than totally avoiding this sector, Cheng believes investors should tilt their utilities stock allocation to those names that have good fundamental characteristics and can benefit from a steadily improving economy. Based on data compiled from YCharts.com, Cheng feels that the regulated electric utilities as a group has the best fundamental characteristics in the utilities sector, particularly in lowest debt-to-equity ratio, lowest interest rate on debt, highest cash flow from operations, positive free cash flow, and reasonable valuation at 16.3 times trailing earnings. The electric group was also the only group among the utilities sector to post year-over-year growth in the most recent quarterly revenue.

After careful analysis, Cheng has chosen five companies with solid fundamentals, stable dividend growth, and below market valuation multiples that he feels investors should further examine.

Cleco Corp (CNL)
DTE Energy (DTE)
Idacorp (IDA)
Alliant Energy Corp (LNT)
Pinnacle West Capital (PNW)

To read Gary Cheng’s full analysis, visit http://seekingalpha.com/article/1487242-sell-off-in-utilities-stocks-creates-a-good-entry-point-for-these-5-electric-utilities-stocks

OFFICE DEPOT SUED FOR NOT HOLDING ANNUAL MEETING

noreply@blogger.com (Accrued Interest) — Sat, 15 Jun 2013 09:00:00 +0000

Reuters is reporting that Office Depot Inc (ODP) investor Starboard Value LP has sued the second-largest U.S. office supply retailer for not holding an annual shareholder meeting to elect directors.

Starboard Value filed the complaint with the Court of Chancery in Delaware, where Office Depot is incorporated. The complaint states that the company had not held an annual shareholder meeting for 13 months.

Starboard has nominated six people for the 10-member Office Depot board. They cited the lack of experience among current board members and stressed the need to reconstitute the board whether or not its proposed merger with rival OfficeMax Inc (OMX) goes through.

Office Depot announced in February plans to buy OfficeMax in a deal worth $937.2 million. They have not yet decided on the combined entity's name, headquarters or CEO. The companies are awaiting regulatory approval and will both hold special shareholder meetings on July 10 to seek investor approval.

"The proposed merger provides no basis for the company to deprive stockholders of their right to meet annually to elect directors," Starboard said in the complaint.

Starboard said it was forced to take the latest action as it did not expect directors to be elected at the special meeting. Starboard said in its most recent regulatory filing that it held about 42 million shares of Office Depot, or about 15 percent of the company's stock. In addition to Office Depot, Starboard reported a position of almost 8 million shares in Compuware (CPWR), 12.5 million shares of Integrated Device Technology (IDTI), 5.1 million shares of Calgon (CCC), and 7.3 million shares Wausau Paper (WPP).

This lawsuit could potentially drive down Office Depot’s stock price which is currently trading around $4.28. While that could be a good thing for investors looking to initiate new positions it might not be the best thing for the company considering the stock-for-stock merger deal with OfficeMax.

REVLON CHARGED WITH MISLEADING SHAREHOLDERS

noreply@blogger.com (Accrued Interest) — Fri, 14 Jun 2013 21:35:00 +0000

The New York Times is reporting that on Thursday June 14, 2013, the Securities and Exchange Commission announced that Revlon (REV) had agreed to pay an $850,000 penalty to settle accusations that it deceived shareholders and its directors in connection with a failed takeover in 2009. To date Revlon has paid roughly $37 million in settlements to shareholders in related private lawsuits but the company has neither admitted nor denied any wrongdoing.

In 2009, during the depths of the recession, Revlon had posted losses for several years, losing market share to competitors, and suffering under heavy debt. Ronald Perelman tried to solve the company’s problems by buying out minority shareholders and taking the company private. However, an independent financial adviser determined that the proposed deal was unfair to Revlon and the minority shareholders.

So instead of taking the company private, Mr. Perelman sought to improve the company through an exchange offer, a transaction in which the company asked minority shareholders to swap their stock for preferred shares. The deal would have helped Revlon pay off a sizable loan that it owed. There was a question about the transaction’s fairness, so Revlon asked its independent board members to assess the deal.

Among minority shareholders were those invested in its stock through the company’s 401(k) retirement plan. The plans trustee decided that members could exchange their shares only if an outside investment banker decided that the transaction was adequate. After evaluating the deal a financial adviser determined that it was unfair and that the preferred shares being offered were not equal to the value of the common stock being exchanged.

According to the SEC, Revlon hid that decision from the retirement plan members. The company altered the agreement with the trustee to ensure that the trustee would not share the adviser’s opinion with Revlon shareholders. They also misrepresented in securities filings that the board’s process was “full, fair and complete.”

The S.E.C. order described Revlon’s conduct as “ring fencing,” defined as withholding vital information from shareholders that would have helped them decide whether to exchange their shares. As a result of Revlon’s misconduct, the company’s board was unable to fairly evaluate the adequacy of the exchange offer, according to the SEC.

“By erecting informational barriers, Revlon kept critically important information from its board and, in turn, misled investors” said Antonia Chion, an associate director in the SEC’s enforcement division.

Shares of Revlon have risen about 40 percent over the last year. In trading Thursday, the stock rose about 3.7 percent, to $20.64.

KRAFT LAWSUIT MAY LEAD TO STARBUCKS INVESTMENT OPPORTUNITY

noreply@blogger.com (Accrued Interest) — Mon, 10 Jun 2013 21:27:00 +0000

An ongoing legal dispute between Kraft (KRFT) and Starbucks (NASDAQ:SBUX) may end up providing investors with a solid investment opportunity with the coffee retailer. The two companies have been battling in court since 2010 over an agreement under which Kraft distributed Starbucks’ packaged coffees, including whole beans and ground coffee, to grocery stores and other retailers. Kraft claims that Starbucks unilaterally decided to end their agreement, and Starbucks says that Kraft failed to aggressively promote its brands, which include Seattle’s Best Coffee, in stores.

The deal between Kraft and Starbucks began in 1998, when Starbucks was selling its coffee in just 4,000 stores with annual sales of about $50 million. When Starbucks backed out of the agreement in 2010 sales had grown to about $500 million a year, and Starbucks packaged coffee was sold in 40,000 stores across the United States and Canada. Starbucks reportedly approached Kraft in August 2010 about ending the partnership and made a $750 million offer to buy out Kraft’s rights in the deal. Kraft said the offer was below fair market value and declined. In October 2010, Starbucks sent a letter to Kraft stating that Kraft had breached the agreement. Starbucks said that Kraft had done a poor job of marketing their products and had failed to share important information. They also claimed that that Kraft’s Yuban coffee was unfairly competing with Starbucks. Kraft defended its efforts on behalf of Starbucks, citing strong growth in Starbucks sales during their agreement.

Since then the companies have continued to carry their disagreement through various legal proceedings and arbitration. In April, Starbucks announced in its quarterly filing that it now expects a binding decision from an arbitrator to be handed down in the second half of its fiscal year ending September 2013.

The expected end to this legal battle may provide investors with a unique opportunity. Moses Li states that, “analysts are expecting SBUX to pay at least $1 billion in addition to any legal fees to Kraft for damages. Although these expectations are general knowledge to the public, SBUX shares are hitting all-time highs, indicating that it has not been reflected in the valuation. In addition, with roughly only $1.67Bn in available cash, it is safe to assume that SBUX will tap into debt options in order to finance the settlement and keep on-going operations. The new debt plus the payment for the settlement will almost definitely harm the company's bottom line. If we combine this with the fact that the stock is more sensitive to downside news, SBUX may take a dip after the lawsuit ruling.”

Li also goes on to explain, Starbucks is on the path to becoming a large international powerhouse. Furthermore, the company has stated that it expects China to easily outpace the Canadian business revenues within the next couple of years. Most of these growth plans are set to impact EPS in FY2014, FY2015, which explains the current valuation; investors are paying a premium for the future's potential. We also cannot forget the continued success of SBUX's loyalty cards, channel development, and food sales growth. Much of the growth's future success depends on the competencies of management, but we have no reason to doubt Mr. Schultz and his ability to grow a company aggressively.”

Li further explains the potential investment opportunity that could arise out of this lawsuit. “Last summer, SBUX took a 29% plunge from highs of $61.67 due to general market volatility and poor earnings calls. Of course, by no means can we assume an identical decline if SBUX loses the lawsuit, but for discussion's sake, let's examine a similar decline after the lawsuit decision or another potential market correction. With 15% from today's share price of $62.46, the price will be $53.01. Furthermore, forward P/E will become 21.7. At these hypothetical valuation levels, Starbucks will be more than attractive because you will be buying the future's growth with a fair or even cheap valuation.”

In light of all of this, it might be well worth your while to take a serious look at Starbucks as a potential long term investment.

To read all of Moses Li’s analysis, visit http://seekingalpha.com/article/1484431-starbucks-kraft-lawsuit-provides-a-rare-investment-opportunity

SAMSUNG RATCHETS UP THE COMPETITION WITH APPLE

noreply@blogger.com (Accrued Interest) — Tue, 16 Apr 2013 13:30:00 +0000

Apple (AAPL) has had a significant advantage in the smartphone market for the past few years. They have roughly 400 stores dedicated to selling their products to consumers, including the iPhone, whereas other smartphone makers have been forced to rely upon the wireless carriers to retail their phones. However, this is all about to change and Apple shareholders should take special note.

Samsung (SSNGY) recently announced a new partnership with Best Buy (BBY). This month Samsung will begin to open dedicated mini-stores, The Samsung Experience Shop™, within more than 1,400 Best Buy locations. At the Samsung Experience Shops, consumers can experience Samsung’s full range of mobile products including smartphones, tablets, laptops, connected cameras and accessories, all in one location. The shops enable consumers to interact with and buy Samsung’s latest mobile products and experience how the devices connect together to enrich their lives.

Select Best Buy stores will have Samsung Smart Service™, which includes dedicated Samsung Experience Consultants™ and Best Buy blue shirt sales associates to assist customers with purchasing and activating mobile products on the carrier of their choice, understanding their device and supporting them throughout the lifecycle of their product. The specially trained Samsung Experience Consultants will assist with product demonstrations, basic product services, Samsung account set up, warranty registration and post purchase support.

“Samsung has been delivering the latest innovation across the consumer electronics category for some time,” said Dale Sohn, president of Samsung Telecommunications America. “With the Samsung Experience Shops, we are ensuring consumers get the most of that innovation by learning how to leverage their mobile devices across our ecosystem of consumer electronics. Consumers will have one place to not only explore and learn about our full portfolio of mobile products, but also the support of a Samsung expert to help with selecting and servicing them. This will truly be a unique mobile shopping experience.”

This partnership represents a win-win situation for both companies as Samsung will end up with more domestic retail locations than Apple currently has and Best Buy, who has been plagued with profitability issues, finds a new market to service. “We look forward to showcasing Samsung products in the Samsung Experience Shop in all Best Buy and Best Buy Mobile locations. This is part of our Renew Blue transformation strategy – working closely with vendor partners to innovate and drive value, while also updating our stores to focus on growing and profitable categories,” said Shawn Score, head of U.S. Retail for Best Buy. “Our promise to our customers is simple: we’re committed to providing the best value, service and selection. Our partnership with Samsung on the Samsung Experience Shop is another way we’re delivering on that promise.”

This will present Apple with a significant challenge, one that Apple shareholders should watch carefully.

MORE LAYOFFS COMING TO DISNEY

noreply@blogger.com (Accrued Interest) — Fri, 05 Apr 2013 11:00:00 +0000

Earlier this week The Walt Disney Company (DIS) shut down the video game company Lucas Arts, laying off 150 employees. Last September, Disney cut about 200 people at its Disney Interactive video game, as the company moved away from console games to focus on online and mobile entertainment. An additional 100 staffers have been laid off in two cuts since. A year prior, the company laid off a reported 200 employees from its interactive unit. Now they intend to lay off a number of additional workers in the coming weeks, according to Reuters. Cuts to both Disney's film studio and consumer products division could come as early as two weeks. Employees from animation and marketing and home video are expected to be laid off as well.

The studio job cuts will center on the marketing and home video units and include a small number from the animation wing, said the sources, who spoke on condition of anonymity because the plans had not been made public. Staff reductions at the consumer products unit will largely result from attrition, another person said.

It's currently unknown how many reductions will occur, but the layoffs are reported to be a cause of an internal audit from CEO Bob Iger who wants to cut costs. In February, the company revealed lower first quarter results, attributing them in part to " rising costs of acquiring TV sports rights for its ESPN division ," something Iger previously predicted would occur at the end of 2012. Disney, headquartered in Burbank, California, started an internal cost-cutting review late last year to identify cutbacks in jobs it no longer needs because of improvements in technology, one of the people said. It is also looking at redundant operations that could be eliminated following a string of major acquisitions over the past few years, said the person.

The studio is now heavily relying on brands Pixar, Marvel, and, now Lucasfilm to release films. Marvel has six films set to release now through 2015, Pixar just announced a highly-anticipated sequel to "Finding Nemo," and the new "Star Wars" trilogy is set to begin in another two years. Work on future "Star Wars" related games will most likely come from its own troubled game segment, Interactive, which is hoping for a massive success when its new gaming initiative, Infinity, launches later this summer.

Disney’s stock continues to hit all-time highs reaching $53.53 in January and $57.76 last month.

Sequestration Resistant Investments

noreply@blogger.com (Accrued Interest) — Fri, 05 Apr 2013 01:56:00 +0000

Are you concerned about how sequestration will affect your portfolio? Are you looking for companies in which to invest that aren’t likely to be affected? Look no further than the utility industry. Why? Utility companies tend to have highly stable revenues and above average dividend payouts which makes them very attractive to investors during an uncertain economy.

With that in mind, Paul Zimbardo has compiled this list of six utility companies set to declare dividends this week. Please view his original article to see how he came up with these companies, and remember to always perform your own research before purchasing any stock.

Pepco Holdings, Inc. (POM): 5.26% Yield; Ex-Dividend 3/7
Geography: Northeast United States (Maryland and Washington DC)
Customers: 800,000

Financial Performance and Metrics: Source - (Finviz.com)

Forward P/E: 16.69
Book Value: $19.40
Price/Book: 1.05
Debt/Equity: 1.22
Revenue Growth/(Contraction) (QoQ): (10.44%)
EPS Growth/(Contraction) (YoY): 85.39%
Payout Ratio: 92.8%
Dividend History: $0.27 per share

PPL Corporation (PPL): 4.77% Yield; Ex-Dividend 3/6
Geography: United Kingdom and Eastern United States (Pennsylvania, Kentucky, Virginia, and Tennessee)
Customers: 10 million (7.8M in the United Kingdom)