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3 lesser-known dividend stocks for a rocky summer

ridodirected@gmail.com (RIDO) — Fri, 09 May 2014 23:28:00 +0000

JEFF REEVES'S STRENGTH IN NUMBERS
May 8, 2014, 6:00 a.m. EDT
Article from http://www.marketwatch.com/

Opinion: They’ve beaten the broader market this year but are still overlooked

It’s been a choppy stock market so far in 2014, particularly for the “risk on” momentum shares that were last year’s leaders.

Popular biotechs like Vertex VRTX +1.96% are off by double-digits. Tech mainstay Amazon AMZN +1.36% is down about 30%. And recent cult stocks Twitter TWTR -0.03% and 3D Systems DDD -0.08% have been cut in half this year.

Of course, it’s not all gloomy. The broader market indexes have slowly plodded about 1% higher in the face of these troubles.

And some stocks have pushed even higher.

What are those picks? Surprisingly, they are some of the sleepiest names on Wall Street — defensive blue-chip dividend payers that were largely overlooked during the market’s roaring run of 2013.

And as the market gets more selective and investors increasingly move “risk off,” these picks could continue to do very well across the rest of 2014.

Here they are:

Ventas VTR -0.94% — 19% return this year, dividend yield of 4.3%. VTR -0.94%

Longtime readers of my column (hello to all three of you!) will know that one of my favorite long-term investing trends is the demographic shift in America that is taking place. As Baby Boomers age, it will transform many industries, particularly across health care.

A great way to play this trend is via high-yield real estate investment trusts that focus on elder care. A company like Ventas is a perfect example, since it controls some 700 senior-housing facilities, 400 skilled-nursing facilities and 250 medical-office buildings across the U.S.

Of course, this demographics trade hadn’t really borne any fruit across 2011 and 2012 as health-care REITs remained stuck in neutral, but the risk-off environment and a hunger for yield amid falling Treasury interest rates has re-energized interest in stocks like Ventas.

But short-term stock performance aside, the dividend is what should keep you interested in Ventas long term.

Even after the run-up, the stock, VTR, yields 4.3%. The company has increased its distributions 120% in the past 10 years, from 32.5 cents per share in 2004 to 72.5 cents today.

Ventas is also gobbling up smaller competitors, with eight major acquisitions over the past decade that total over $16 billion, in order to ensure future growth. These are also high-quality purchases, with so-called triple-net leases that mean tenants, not Ventas, are obligated to pay for any property-related expenses like taxes, maintenance and insurance.

Given the recent tailwind in a risk-off environment, Ventas could perform well for the rest of the year. And given its long-term dividend potential, investors should have confidence that this REIT is not just a swing trade but a legitimate holding for many years to come.

Johnson & Johnson JNJ +0.41% — 9% return this year, dividend yield of 2.8%.

Johnson & Johnson is an old favorite among defensive dividend stocks. It’s a health-care play — but also a consumer-staples play, thanks to popular brands including Band-Aid, Tylenol and Splenda.

The health-care angle makes the stock, JNJ, pretty recession-proof, since medical expenses don’t go away even in tough times, and the company’s consumer-brand power gives it stability for the long run.

Many investors have been overlooking Johnson & Johnson after the company struggled from 2010 to 2012 amid quality-control issues and big product recalls. However, since CEO Alex Gorxy took over two years ago, the company has been marching steadily higher. The stock is up almost 60% since Gorsky took over vs. 35% or so for the S&P 500. That includes an impressive gain of 9% this year despite a pretty flat market.

And, long term, J&J has a total return of about 140% including dividends over the past 10 years, thanks to distributions that have increased 145% from 28.5 cents per share each quarter in 2004 to 70 cents today.

While naysayers may point out that Johnson & Johnson could be overvalued after this run, it’s still trading for about 15.5 times future earnings — which is exactly the forward P/E of the broader market right now.

I have confidence that J&J will hang tough even if things get increasingly volatile in 2014. But more importantly, I’d have confidence in buying shares for a long-term, dividend-oriented portfolio right now.

Intel INTC -0.08% — 2% return this year, dividend yield of 3.4%.

Intel is another stock like Johnson & Johnson that has largely been overlooked for the past few years. But those who haven’t been paying attention for some time may have missed out on the recent strength in this chip maker.

Sure, the mobile revolution is severely limiting the growth potential for Intel, and revenue has been stagnant since 2011. However, despite a continuation of top-line issues in the first quarter, there are signs that Intel is much better off than some naysayers believe.

Intel beat expectations in the first three months of the year, thanks in part to its data-center business and (surprise!) corporate PC sales.

The strong outlook for corporate sales resulted in a number of analyst moves on Intel, including an upgrade to “buy” at Deutsche Bank with a $30 target. Separately, Pacific Crest and Jefferies each reiterated bullish calls with $32 and $35 targets, respectively.

I remain convinced that the poor performance of enterprise tech over the past few years will start to change as businesses begin to invest again. And if that trend proves true, we could see Intel continue to see growth in its data center and PC business in the short term.

Long term, Intel continues to make progress on mobile chip sets and adapting its business to a new environment. Beyond the strategy, there’s the juicy dividend and a strong history of increases. Intel’s dividends have advanced 450% in the past 10 years, from 4 cents quarterly to 22 cents, but are still comfortably below half of projected earnings.

And with $30 billion in cash and investments on the books, and over $20 billion in annual operating cash flow, there’s a reasonable expectation of continued dividend growth going forward.

JEFF REEVES'S STRENGTH IN NUMBERS
May 8, 2014, 6:00 a.m. EDT
Article from http://www.marketwatch.com/

Top 20 stable stocks to buy now

ridodirected@gmail.com (RIDO) — Sat, 03 May 2014 06:26:00 +0000

By Matt Egan @mattmegan5 May 1, 2014: 10:02 AM ET
Article from http://money.cnn.com/

NEW YORK (CNNMoney)

Forget April showers. A storm descended on Wall Street in recent weeks, and high-flying momentum stocks like Facebook (FB, Fortune 500) and LinkedIn (LNKD) have been washed out. Cash has been flowing instead into the more comforting arms of stable names such as Walt Disney (DIS, Fortune 500) and Comcast (CCV).

Call it the "safe rotation" on Wall Street: Sexy is out, boring is in.

Investors are hunting for stocks with a track record of churning out consistently good earnings and dividends. So what are those companies?

Sam Stovall, chief investment strategist at Capital IQ, put together a list of 20 undervalued S&P 500 stocks fitting the "boring, but stable" characteristics.

His stable stock list includes NBC owner Comcast (CMCSA, Fortune 500), apparel maker Gap (GPS, Fortune 500), discount retailer Target (TGT, Fortune 500) and energy behemoth Chevron (CVX, Fortune 500).

"When the seas start to get rough, investors will likely prefer those companies that offer a higher quality of earnings and greater stability of price returns," he said.

Stovall started his search by looking at the letter grades S&P gives companies. The grades are based partially on the consistency of their earnings and dividend growth during the last decade.

Interestingly, the 128 companies with "A" grades have underperformed their peers over the past year. S&P said these more stable stocks had an average return of 16.9% over the last 12 months, compared with 21.7% for below average (aka B, B- or C) companies.

But higher returns often come with higher risks. People have become jittery about whether many "B" and "C" grade stocks can really continue to grow.

One of the best ways to get a "gut check" on whether companies are overvalued is to look at the price-to-earnings ratio. Stovall said the average 2014 price-to-earnings ratio of B and C grade companies is 26.6, compared with just 16.9 for above average stocks.

"It would appear natural to us that investors now begin reemphasizing large-cap stocks over the more volatile and expensive small-cap issues," he said.

To whittle down the list of stocks that could stand to benefit from this safe rotation, Stovall looked only at S&P 500 stocks with both a high letter grade and a rating of "buy" or "strong buy" from S&P Capital IQ.

That leaves a broad list of 20 stocks from six sectors, including seven from the consumer discretionary sector: cable giant Comcast, media conglomerate Disney (DIS, Fortune 500)apparel maker Gap, (GPS, Fortune 500) toy company Mattel (MAT, Fortune 500), retailer Ross Stores (ROST, Fortune 500), discount retailer Target (TGT, Fortune 500), and Nautica owner V. F. Corporation. (VFC, Fortune 500)

These names could benefit from resilient consumer spending. Consider that the latest data show personal spending jumped 0.9% in March, the fastest pace since August 2009.

There's also seven health care stocks that fit the criteria: AmerisourceBergen (ABC, Fortune 500), C.R. Bard (BCR), Baxter International (BAX, Fortune 500), McKesson (MCK, Fortune 500), Mylan (MYL, Fortune 500), Quest Diagnostics (DGX, Fortune 500) and Stryker (SYK, Fortune 500). The health-care sector has been boosted in recent weeks by a flurry of M&A, with deal activity in this group soaring to the fastest pace on record, according to Dealogic.

S&P's list of stable stocks is rounded out by energy behemoth Chevron, money manager T. Rowe Price (TROW), blue-chip insurer Travelers (TRV, Fortune 500), railroad company Norfolk Southern (NSC, Fortune 500), diversified manufacturer United Technologies (UTX, Fortune 500) and chip maker Qualcomm (QCOM, Fortune 500).

Related: Wall Street is addicted to a new drug: M&A health care deals

To be sure, there's no guarantee the flow of funds out of momentum names will continue.

The rotation out of momentum stocks began in early March, hammering previously red-hot Internet and biotech stocks. The carnage has left Facebook (FB, Fortune 500), Twitter (TWTR), Gilead Sciences (GILD, Fortune 500) and Tesla (TSLA) all down more than 10% from the end of February, while Netflix (NFLX) has tumbled over 20%, and cybersecurity company FireEye (FEYE) has plunged close to 30%.

Related: Twitter stock tanks. Down more than 10% in a day

"It's hard to tell what exactly is motivating this move, although it could be some form of risk aversion," said Kristina Hooper, U.S. investment strategist at Allianz Global Investors. She points to the geopolitical trouble in Ukraine and concerns about the true value of some social media companies as possible catalysts.

"We think that rotation into value may be short-lived," said Hooper, noting it's historically unusual to see such a move at this stage of an economic expansion, not to mention that many average Joe investors often pull out of stocks at the first signs of trouble.

Still, this is hardly a "usual" stock market, especially given the unprecedented measures by the Federal Reserve to jumpstart the economy and keep it humming.

"This is a very unique market environment. We have to expect the unexpected," said Hooper. To top of page

Matt Egan @mattmegan5 May 1, 2014: 10:02 AM ET
Article from http://money.cnn.com/

5 Stocks Under $10 Worth Buying

ridodirected@gmail.com (RIDO) — Tue, 22 Apr 2014 12:49:00 +0000

By Rick Munarriz
April 21, 2014
From http://www.fool.com/investing/general/

If you've got $10, I have some stock ideas for you.

I've been singling out attractive opportunities in low-priced stocks since my original "5 Stocks Under $10" column 13 years ago, and I've seen plenty of stocks with pocket-change prices generate incredible gains.

There are risks, and they are readily apparent, given recent volatility. There are often good reasons for stocks to be ignored or beaten down. However, a market rally can work wonders for the unloved with positive catalysts in their pockets.

Let's go over my five picks from March 2009 -- when low-priced stocks bottomed out -- to prove my point.

*Bare Escentuals was acquired for $18.20 a share in 2010. Focus Media was acquired for $27.50 a share in 2013.

The average gain of 567% in a little more than five years is pretty remarkable. Yes, that also happened to be when the market was bottoming out, but that still blows away every major market index in that time.

Let's go over this month's picks.

Plug Power (NASDAQ: PLUG ) -- $7.32

You won't find too many stocks hotter than Plug Power this year. The fuel cell specialist is up a whopping 372% this year, and things continue to look up as alternative energy grows in popularity. The biggest catalyst for Plug Power this year was when Wal-Mart, the world's largest retailer, announced that it was tripling the presence of its hydrogen fuel cell charging stations at its distribution centers.

Losses have been narrowing, and the market sees Plug Power turning profitable next year. Along the way, we're seeing growth on a tear. Analysts see revenue more than doubling this year, followed by a 79% top-line pop next year.

STMicroelectronics (NYSE: STM ) -- $8.88

This may seem like a lousy time to warm up to STMicroelectronics. The Swiss semiconductor giant has surprised the market for three consecutive quarters by posting losses when analysts projected profits. With its next quarterly report set a week from today, the trend suggests that we're looking at another disappointing report.

However, at least the pros are ready for a quarterly deficit out of STMicroelectronics this time. They see a return to profitability during the current quarter, and that's important if it expects to sustain its healthy 4.5% dividend yield. The past year has been disheartening, but STMicroelectronics is fetching a reasonable 15 times next year's earnings forecast.

New Residential Investment (NYSE: NRZ ) -- $9.49

Mortgage real-estate investment trusts provide healthy yields, but there are naturally risks involved with real estate these days. New Residential stays a step ahead of the pack by specializing in mortgage servicing rights, a healthy stream of revenue that actually benefits from rising rates.

New Residential was spun off just 11 months ago, so it's not exactly a household name for yield chasers, but the logic of buying into REITs specializing in mortgage servicing rights is sound. As mortgage rates move higher, folks are less likely to refinance their loans, extending the value of these servicing rights. New Residential shelled out payouts of $0.495 per share through its abridged 2013. The healthy distributions should continue.

Inovio Pharmaceuticals (NYSEMKT: INO ) -- $2.53

Biotech stocks have corrected recently, giving investors with the risk tolerance to buy into feast or famine players working on potentially blockbuster treatments a compelling entry point. Inovio is a nascent biotech with a vaccine for HPV-caused pre-cancers and cancer working its way through the long FDA approval process. There's an important mid-stage data readout for the vaccine, VGX-3100, due likely this summer.

Inovio has no shortage of gamblers. Daily trading volume has averaged more than 8 million shares lately, and that's a lot for a stock commanding a $600 million market cap. The good news for those willing to wait is that Inovio was able to raise enough money last month to likely see it through at least 2017. That's a pretty big deal since biotech upstarts often have to deal with cash burn rates as much as the treatments that they're actually working on.

Harmonic (NASDAQ: HLIT ) -- $6.72

You can find companies that are starting to put it all together in the bargain-priced bin. Harmonic seems to be doing more than a few things right. It has posted better-than-expected earnings in its three past quarters, and the growth trajectory on the bottom line is encouraging. Wall Street sees a profit of $0.29 a share this year after posting net income of $0.17 per share last year. They see earnings of $0.37 per share come next year.

Harmonic helps video content creators and distributors in creating, preparing, and delivering programming for television and new media platforms. It reports tomorrow afternoon, giving Harmonic a good shot at stretching its streak of market-thumping results to four quarters in a row.

Rick Munarriz
April 21, 2014
From http://www.fool.com/investing/general/

Stocks Decline on Worries Fed Will Hit Brakes

ridodirected@gmail.com (RIDO) — Fri, 17 May 2013 08:42:00 +0000

By CHRIS DIETERICHUpdated May 16, 2013, 5:20 p.m. ET

Article from http://online.wsj.com/article/

Stocks fell from all-time highs amid concerns the Federal Reserve might tap the brakes on its efforts to stimulate growth.

The Dow Jones Industrial Average declined 42.47 points, or 0.3%, to 15233.22, while the Standard & Poor's 500-stock index fell 8.31 points, or 0.5%, to 1650.47. The S&P 500 had ended at records in nine of the past 10 sessions and snapped a four-session streak of gains. The Nasdaq Composite Index dropped 6.37 points, or 0.2%, to 3465.24.

Stocks dipped to the day's lows after Federal Reserve Bank of San Francisco President John Williams said in the text of a prepared speech that he is open to trimming the central bank's bond-buying program in coming months if the economy continues to improve.

Despite Thursday's weak economic news, his comments "raise the specter of the Fed tapering, and that is proving to be the big bogeyman out there," said Steve Sosnick, equity-risk manager at Timber Hill, the market-making unit of Interactive Brokers Group.

Initial claims for jobless benefits rose more than forecast last week, the biggest one-week increase since November. Housing starts for April declined far worse than expected, and the Federal Reserve Bank of Philadelphia's May index of business activity unexpectedly fell.

April's consumer-price index, a reading on inflation, fell 0.4% on the month, more than forecast.

The disappointing reports, paired with tame inflation, had bolstered conviction that the Fed would stick to its $85 billion monthly purchases in Treasury and mortgage debt to support the economy. Prices for Treasurys rose, as the yield on the 10-year note fell to 1.865%.

"What people have been oscillating back and forth with is whether the Fed will reduce [its bond buying] sooner rather than later. That's what the market is playing around with," said George Rusnak, head of fixed income for Wells Fargo Private Bank, which oversees $170 billion in assets.

In corporate news, Cisco Systems CSCO +11.21% jumped $2.68, or 13%, to $23.89, a 2½-year high. The blue-chip network-equipment maker reported quarterly earnings and revenue that topped analyst expectations, and projected growth in revenue and profit in the current quarter.

Wal-Mart WMT -1.70% Stores slid 1.36, or 1.7%, 78.50, weighing on the Dow, after the world's largest retailer reported quarterly earnings that fell shy of forecasts and provided a downbeat second-quarter outlook.

In Asia, Japan's gross domestic product, the prime measure of economic growth, expanded 3.5%, more than expected. Japan's Nikkei Stock Average rose to 5½-year highs in intraday trading but closed down 0.4%. China's Shanghai Composite Index rallied 1.2%.

In Europe, the Stoxx Europe 600 fell less than 0.1%, its first loss in three days. Data showed the euro zone's trade surplus in March rose to the highest level since the inception of the common currency in 1999. Germany's DAX index rose 0.1% to close at a record.

The dollar advanced against the euro and yen. Gold slumped 0.7%, to settle at $1,387.10 a troy ounce. Crude oil gained 0.9%, to settle at $95.16 a barrel.

In corporate news, Berkshire Hathaway's BRKB -1.09% Class-B shares slipped 1.23, or 1.1%, to 111.54, after Standard & Poor's Ratings Services cut the conglomerate's rating by one notch, citing the company's dependence on its core insurance operations for most of its dividend income.

Tesla TSLA +8.73% rose 7.41, or 8.7%, to 92.25, after the car maker said it plans to sell stock and convertible notes to repay debt and for corporate purposes, taking advantage of a recent rally in its stock price.

Kohl's KSS +4.73% climbed 2.35, or 4.7%, to 52.03, after the retailer's earnings beat the company's estimates and provided current-quarter earnings roughly in line with expectations.

Write to Chris Dieterich at chris.dieterich@dowjones.com

A version of this article appeared May 17, 2013, on page C4 in the U.S. edition of The Wall Street Journal, with the headline: Shares Decline on Worries Fed Will Hit Brakes.

Asia stocks up as US small business mood improves

ridodirected@gmail.com (RIDO) — Wed, 15 May 2013 08:32:00 +0000

By PAMELA SAMPSON | Associated Press – 2 hrs 25 mins ago

Article from http://news.yahoo.com/

Associated Press/Itsuo Inouye - Passersby are reflected on the electronic stock board of a securities firm in Tokyo, Wednesday, May 15, 2013. Enthusiasm on Wall Street sparked by another positive report on the U.S. economy helped push most Asian stock markets higher Wednesday. Japan's Nikkei 225 index surged 2.3 percent to 15,096.97. (AP Photo/Itsuo Inouye)

BANGKOK (AP) — Enthusiasm on Wall Street sparked by another positive report on the U.S. economy helped push most Asian stock markets higher Wednesday.

The National Federation of Independent Business reported a slight improvement in confidence among small business owners in the U.S. in April. That helped boost the Dow Jones industrial average to close at a record high Tuesday.

"A combination of further improvement of economic performance and low inflation in the US should keep risk appetite buoyant," said analysts at Credit Agricole CIB in Hong Kong in an email commentary.

Japan's Nikkei 225 index surged 1.9 percent to 15,041.95. Hong Kong's Hang Seng rose 0.7 percent to 23,079.31. Benchmarks in Singapore, Taiwan, the Philippines and Indonesia also rose.

South Korea's Kospi dipped less than 0.1 percent to 1,967.92 while Australia's S&P/ASX 200 shed 0.7 percent to 5,182.50.

Good economic data aside, stocks are also benefiting from the economic stimulus from the Federal Reserve and other global central banks.

Under a program called "quantitative easing," the Fed has bought hundreds of billions of dollars of bonds, pushing up their prices and sending their yields lower. That makes stocks more attractive to investors than bonds and keeps interest rates low throughout the economy, encouraging investment and spending.

"Quantitative easing will not ease in the next two or three years," said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong. "Quantitative easing is everywhere, in the U.S., Japan and Europe. Money depreciates so it gives some kind of boost to the stock market."

Also helping to shore up the mood were figures, released Tuesday, showing industrial production among the 17 countries that use the euro rose a better-than-expected 1 percent in March. The first estimate of the euro currency region's gross domestic product in the first three months is due for release Wednesday.

Among individual stocks, Australian-based mining giant BHP Billiton fell 2.1 percent after the company's new chief executive, Andrew Mackenzie, outlined plans to slash capital spending by nearly 20 percent in order to maximize returns on investment and improving cash flow.

Japan's Isuzu Motors Ltd. soared 21 percent a day after reporting a strong recovery in its earnings. Sony Corp. was up nearly 11 percent after Daniel Loeb, the U.S. hedge fund manager renowned for shaking up Yahoo Inc., proposed that Sony sell up to 20 percent of its entertainment business. Sony has rebuffed the idea.

The Dow Jones industrial average rose 0.8 percent, to 15,215.25. The S&P 500 index jumped 1 percent, to 1,650.34. Both closed at all-time highs after stalling on Monday. The Nasdaq composite index rose 0.7 percent, to 3,462.61.

Benchmark oil for June delivery rose was up 11 cents to $94.32 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 96 cents to close at $94.21 a barrel on the Nymex on Tuesday.

In currencies, the euro fell to $1.2932 from $1.2937 late Tuesday in New York. The dollar fell slightly to 102.20 yen from 102.24 yen.

___

Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

PAMELA SAMPSON | Associated Press – 2 hrs 25 mins ago
Article from http://news.yahoo.com/

Japan Shares Rise, Bonds Fall on G-7; Europe Stock Futures Gain

ridodirected@gmail.com (RIDO) — Mon, 13 May 2013 07:05:00 +0000

By Pratish Narayanan & Yoshiaki Nohara - May 13, 2013 2:43 PM GMT+0800
Article from http://www.bloomberg.com/news/2013-05-12/yen-falls-beyond-102-as-g-7-tolerates-drop-s-p-futures-decline.html

Japanese stocks climbed, bonds fell and the yen touched the weakest level since October 2008 as Group of Seven officials indicated they will tolerate a decline in the currency. European stock futures gained, while gold and oil slid.

Japan’s Topix Index (TPX) jumped 1.8 percent at 7:42 a.m. in London, as 10-year bond yields rose 11 basis points to 0.8 percent, the highest since Feb. 6. The yen was little changed at 101.65 a dollar after falling to 102.15 earlier today. Euro Stoxx 50 contracts were up 0.2 percent, indicating the region’s shares may rise for a fifth day. Standard & Poor’s 500 Index futures lost 0.3 percent after the measure closed at a record high last week. Spot gold and oil in New York sank 0.9 percent.

While signaling acceptance of the yen’s decline, G-7 policy makers said they examined Japan’s strategy and that they will monitor its impact on currencies. Data today showed China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates. Italy, France and Iceland are due to sell debt today.

“Markets are prepared to back Japanese authorities’ attempt to reflate in terms of a weaker yen and expanding monetary base,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The export sector from Japan will be an obvious beneficiary of that.”

The yen has weakened about 15 percent against the dollar this year as a leadership change in the Bank of Japan initiated unprecedented monetary easing. G-7 policy makers reaffirmed a February commitment to “not target exchange rates,” U.K. Chancellor of the Exchequer George Osborne told reporters May 11. Bonds fell, sending U.S. Treasury 10-year yields to 1.94 percent, the highest level since March 26.
Chinese Data

The Topix closed at the highest level since August 2008 as Toyota Motor Corp., the world’s biggest carmaker, climbed 3.8 percent. Nomura Holdings Inc. (8604), Japan’s biggest brokerage, surged 9.6 percent on optimism rising trading volumes will boost earnings. Nippon Telegraph & Telephone Corp. jumped 4.1 percent after forecasting profit that beat estimates.

The MSCI Asia Pacific excluding Japan Index sank 0.6 percent, as Chinese companies dragged Hong Kong’s Hang Seng Index down by 1.2 percent. Most of the declines came before China’s statistics bureau said fixed-asset investment excluding rural households in the first four months of the year increased 20.6 percent, compared with 20.9 percent in the first quarter. Production grew 9.3 percent in April from a year earlier and retail sales climbed 12.8 percent, according to the agency.
Aussie, Won

“The statistics from China are still looking soft and if there is not enough growth momentum from China, that’s going to affect Chinese-related markets like Hong Kong,” said Tim Leung, a portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. in Hong Kong.

The Australian dollar fell toward an 11-month low before data on business confidence and amid speculation the central bank will cut interest rates further to curb the currency’s strength. The so-called Aussie lost 0.4 percent to 99.90 U.S. cents. South Korea’s won dropped for a third day, falling 0.5 percent against the greenback to 1,111.78.

Gold declined for a third day in the longest slump since April, when the metal entered a bear market, as holdings of the SPDR Gold Trust, the biggest gold-backed exchange-traded product, resumed a drop and the dollar strengthened. Spot gold sank 0.9 percent to $1,436.18 an ounce.

Crude in New York dropped 0.9 percent to $95.21 a barrel, as the Organization of Petroleum Exporting Countries boosted output to the highest level in five months. Oil fell for a third day, the longest losing streak in four weeks.

To contact the reporters on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Pratish Narayanan & Yoshiaki Nohara - May 13, 2013 2:43 PM GMT+0800
Article from http://www.bloomberg.com/news/2013-05-12/yen-falls-beyond-102-as-g-7-tolerates-drop-s-p-futures-decline.html

Investing: Hate banks? Get even and buy the stocks

ridodirected@gmail.com (RIDO) — Sat, 11 May 2013 05:51:00 +0000

By John Waggoner USA TODAY10:06 p.m. EDT May 9, 2013
Article from http://www.usatoday.com/story/money/columnist/waggoner/2013/05/09/bank-stocks-investing-waggoner/2148149/

Banks often bemoan that they are misunderstood and underappreciated. Why such hostility? Sure, they often charge high fees for important everyday services, like using the money you deposited with the bank. And, yes, they lend too much in good times and too little in bad times. And, well, there's the whole wrecking-the-economy-and-then-whining-about-the-burdens-of-regulation thing.

But we're not here to dwell on the negatives about banking. Nooo. Why? Because, looked at from a bank's point of view, the future looks fairly promising, and bank stocks are still a reasonable long-term investment. And if you really hate those fees and all the human misery caused by reckless lending, you can gain a bit of comfort by making some gains in their stocks.

The financial system came within a gnat's eyelash of collapsing in 2008, in large part because of shoddy mortgage lending. And, no, most of those shoddy loans weren't made to satisfy the 1977 Community Reinvestment Act. They were made to satisfy the thirst by borrowers who wanted big houses they couldn't afford. They were also made to satisfy the thirst of unscrupulous loan brokers for commissions, and by the thirst for Wall Street for packages of terrible loans.

After nearly five years of torture for the economy, however, things are looking pretty good for banks. "If you look around, people are buying houses; they're buying cars," says David Ellison, manager of Hennessy Large Cap Financial fund (HLFNX).

Existing home sales, for example, were 10.3% higher in March than a year earlier. And total vehicle sales in April rose 3.5% from a year earlier, for example, and Ford's sales rose 18%. More home sales and more car sales mean more lending, which is a bank's lifeblood.

Furthermore, there's a virtuous cycle in the current spate of mortgage lending, Ellison says. When a home is sold, a borrower is free from what was likely a burdensome loan, and the holder of the note has that potentially bad debt off its balance sheet. The new borrower, who qualifies under sound lending procedures, can afford the house at its current price, and the new lender has a decent asset on its balance sheet.

Furthermore, banks are no longer competing with shyster lenders who offer loans with little or no documentation, as they were during the housing bubble. For banks with good lending practices, it's a healthy and competitive business.

And, while mortgage rates are low, so are deposit rates — which are virtually zero. When interest rates do rise, the spread between deposit rates and loan rates will widen, as deposit rates never rise as quickly as loan rates do. "Banks earn a lot of money when the Federal Reserve is raising interest rates," says Anton Schutz, manager of Burnham Financial Industries fund (BURFX).

Many of the large money-center banks, such as JPMorganChase and Citibank, don't need rising rates. They have a growing market for initial public stock offerings as well as for mergers and acquisitions. And for smaller banks, there's the possibility of being bought out. Larger banks can grow their market share by eating the smaller ones, says Schutz.

Furthermore, many of the largest banks still sell for fairly low prices, relative to earnings. JPMorganChase (JPM), for example, sells for 8.75 times its past 12 months' earnings. Wells Fargo sells for 11.4 times earnings.

(The price-to-earnings ratio — price divided by earnings per share — is an indication of how cheap or expensive a stock is. Lower is cheaper. The Standard and Poor's 500-stock index sells for about 18.5 times its previous 12 months' earnings.)

When looking at a stock with a relatively low valuation, the first question to ask is why. Banks traditionally have lower P-E ratios than the S&P 500, but not by this much. One reason: They really haven't regained their reputation as solid, dependable institutions. (JPMorganChase, for example, recently took a $6 billion loss because of the shenanigans of a rogue trader, dubbed "The London Whale.")

Banks still need to increase their capital — the amount of cushion they have to protect against losses, says Ellison. And they need to get back into the concept of investing in businesses, not simply trading securities. "They got used to making money for no work," Ellison says. "You can't run banks like hedge funds."

At this point, most of the big banks have gone through a cleansing process — aided by taxpayers — and are now in the position of regaining their reputation and repositioning themselves for the future. Ellison says that choosing among the five largest money center banks is like predicting a race as the horses start out of the gate — so he simply owns all of them and intends to monitor them. Schutz likes Texas banks, in part because of the booming oil economy.

The average financial fund is up 28.1% the past 12 months, according to Morningstar, vs. 22.5% for the S&P 500 with dividends reinvested. If you're interested in owning bank stocks, the cheapest way is through an index fund, such as the Financial Select SPDR ETF (XLF) or the iShares Dow Jones U.S. Financial Sector ETF (IYF).

Burnham Financial Fund A, sold through brokers, has beaten 86% of its peers the past five years, although it has lagged this year. Hennessy Large Cap Financial has beaten 83% of its peers over the same time period, Morningstar says.

Bank stocks aren't for everyone. But if you want to recoup a few of those ATM fees — or maybe even some mortgage payments — a bank stock could be one way to get even.

John Waggoner USA TODAY10:06 p.m. EDT May 9, 2013
Article from http://www.usatoday.com/story/money/columnist/waggoner/2013/05/09/bank-stocks-investing-waggoner/2148149/

Should You Invest in Stocks or Housing for the Long Term? It Depends.

ridodirected@gmail.com (RIDO) — Thu, 09 May 2013 05:09:00 +0000

MAY 8, 2013
By Drew DeSilver
From http://www.pewresearch.org/

With the stock market hitting new highs and home prices marking their strongest gains since before the bubble burst, it’s starting to feel like a real economic recovery. But which is the better investment over time? That depends largely on your definition of “long term.”

As the accompanying charts show, since the formal end of the recession, the stock market (as measured by the benchmark Standard & Poor’s 500 index) has recovered much more strongly than housing. As of Tuesday’s market close, the S&P 500 was up more than 74% (excluding dividends) since the beginning of 2009; although home values, as measured by the S&P/Case-Shiller index, were up 9.3% between February 2012 and February 2013 (the most recent data available), the index stands almost exactly where it did four years ago. (See this post for more discussion of the Case-Shiller index and how it’s calculated.)

Go back further — say, to the beginning of 2000 – and a different picture emerges. Stocks at the time were riding the crest of the dot-com wave, but when that wave crashed stock prices fell sharply and took years to recover. Housing, though, barely paused in its long upward march, peaking in 2006-07 (depending on the individual market) before plunging. Still, the Case-Shiller index stood 46.6% higher in February than it did in January 2000, while the S&P 500 was up just 4% over that same period (though subsequent gains to date have pushed the overall increase to 11.2%).

But unlike houses, many stocks pay dividends (especially in the large-capitalization S&P 500), which changes the return calculus yet again. Using a “total return” variant of the S&P 500 that takes dividends into account, the index is up nearly 43% since January 2000 — almost matching the gain in the Case-Shiller.

In short, much depends not just on which asset you buy but when you buy it. People who bought stocks in late 2008 or early 2009 have done very well; people who bought a year earlier, near the market’s peak, and held on have just recently broken even. And in all 20 metro areas that comprise the Case-Shiller index, home prices are still below their local peaks (which ranged between mid-2005 and mid-2007).

The differing performance histories for stocks and housing have real consequences. According to a recent Pew Research report, affluent households — defined as those with net worth of at least $500,000 — are far more likely to own stocks and other financial assets than less-affluent households. According to the survey, 62% of affluent households reported owning stocks and mutual-fund shares, versus 16 percent of the households below-$500,000. Nearly as many (61%) said they owned 401(k)-type retirement accounts, compared with 39% of the less-affluent households.

Due largely to that concentration of stock ownership, the affluent (who comprise about 7% of the nation’s households) have benefited more from the ongoing recovery than the lower 93%, much more of whose net worth is tied up in home equity.

It’s worth noting that a Gallup survey conducted in April and published today found that 52% of Americans say they own stocks directly or indirectly – the lowest level since they began asking the question in 1998, and down from 65% as recently as 2007. The ownership rate fell among all income groups, but the group that lost the most was the middle. Those with income between $30,000 to $74,999 declined 16% in 2013 compared to those surveyed in 2008.

Americans are an optimistic lot, especially when it comes to their homes. Just over two years ago, when the housing bubble’s collapse was fresher in people’s minds, eight out of 10 people surveyed for a Pew Research report agreed that buying a home was the best long-term investment a person can make.

But not everyone agrees. Robert Shiller, the Yale economics professor who co-developed the Case-Shiller index, said recently that most people would be better off putting their money into stocks than housing.

Drew DeSilver is a senior writer at the Pew Research Center.

By Drew DeSilver
From http://www.pewresearch.org/

Betting on boring stocks pays off

ridodirected@gmail.com (RIDO) — Tue, 07 May 2013 06:38:00 +0000

By Ben Rooney @CNNMoneyInvest March 8, 2013: 7:51 AM ET
http://money.cnn.com/2013/03/07/investing/

Investors have become enamored with stocks that offer healthy dividends and are less volatile.

NEW YORK (CNNMoney)

With the Dow at a record high, the market mojo seems strong.

Yet, the stocks leading the way higher are, for lack of a better word, boring.

The best performing blue chip this year is Hewlett-Packard (HPQ, Fortune 500), which has surged 47%. That's a bit of a head scratcher, considering the PC market is in a deep slump and HP is expected to report a drop in profits this year. (See correction below.) The phrase "dead cat bounce" comes to mind.

HP aside, the other top gainers have been consumer staples, such as Procter & Gamble (PG, Fortune 500) and Coca-Cola (KO, Fortune 500), as well as diversified manufactures like 3M (MMM, Fortune 500) and General Electric (GE, Fortune 500). Home Depot (HD, Fortune 500) has also rallied as the housing market continues to rebound.

In other words, investors are most excited about companies that make and sell things like toothpaste, scotch tape, light bulbs and vinyl siding.

"Investors are looking for stocks that are steady," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "These are stocks where you know what you're getting into when you invest in them."

The main laggards, meanwhile, are stocks that tend to do well when growth is strong in emerging economies, such as China. Aluminum producer Alcoa (AA, Fortune 500) and Caterpillar (CAT, Fortune 500), which makes construction equipment, have both underperformed this year.

Apple (AAPL, Fortune 500) is perhaps the best example of how yesterday's darlings have fallen out of favor. Once viewed as a company that could do no wrong, Apple's stock has lost more than a third of its value, after hitting an all-time high last year.

"Investors are looking for bond substitutes," said Jack Ablin, chief investment officer at BMO Private Bank. "In general, boring stocks don't lead the market higher."

Ablin said investors have been "coerced" into stocks by record low interest rates. As a result, they have gravitated toward stocks that have bond-like qualities, offering low volatility and healthy dividends.

For example, Johnson & Johnson (JNJ, Fortune 500) currently offers a dividend yield of 3.16% and its stock is up 10% this year. By contrast, the yield on the 10-year Treasury note has struggled to break above 2%.

"The companies that are leading nowadays are defensive," said Ablin. "These are stocks that are held by nervous investors, not bullish ones."

That may be true but Kinahan thinks investors' focus on consumer staples and housing signals a vote of confidence in the economy.

"As consumers start to feel more confident about their jobs, they will start to invest more in their homes and electronics," he said.

In addition, the cautious approach to stocks suggests the rally is sustainable since investors have not yet fully committed to the market, said Kinahan.

At the same time, many of the stocks that have rallied this year were also due for a rebound.

"These stocks have been beaten up a bit in the past, let's be honest," said Kinahan.

Correction: An earlier version of this article incorrectly said that HP was expected to report a loss this year.

First Published: March 7, 2013: 11:15 AM ET

By Ben Rooney @CNNMoneyInvest March 8, 2013: 7:51 AM ET

http://money.cnn.com/2013/03/07/investing/

2 Stocks That Are Wasting Your Money

ridodirected@gmail.com (RIDO) — Thu, 12 Apr 2012 17:13:00 +0000

By Rich Smith
April 12, 2012
Article from The Motley Fools

According to Boston University finance professor Allen Michel, when a company announces it's buying back stock, that stock tends to outperform the market by 2% to 4% more than it otherwise would have over the ensuing six months.

But over the long term, multiple studies show that buybacks actually destroy shareholder value. CNBC pundit Jim Cramer cites the example of big banks that bought back shares in 2007-2008 -- just before their stocks fell off a cliff. Far from buy signals, Cramer calls buybacks "a false sign of health ... and often a waste of shareholders' money." Indeed, the Financial Times recently warned: "the implied returns over a period from buy-backs by big companies would have been laughed out of the boardroom if they had been proposed for investment in ... conventional projects."

So why run buybacks at all? According to FT, management can use them to goose per-share earnings, which helps CEOs earn bonuses based on "performance." Also, the investment banks that run buybacks earn income and fees from promoting them. But you and me? Unless the purchase price is less than the shares' intrinsic value, we miss out.

And we're about to miss out again.

Two bad buybacks

StreetInsider.com keeps a running tally of which companies are buying back stock, and how much they're spending. SI is too polite to accuse companies of wasting shareholders' money, of course -- but I'm not. With SI's help, I've uncovered two examples of popular stocks that I believe are squandering shareholder dollars on ill-timed buybacks... and one stock that isn't.

American Capital (Nasdaq: ACAS )

Three months ago, I criticized American Capital's decision to repurchase 8.4 million shares of stock, even as I admitted that at just 3.8 times annual earnings, the shares looked anything but expensive. With revenues on the decline, AmCap had been forced to cancel its dividend, and as I argued at the time: "this company ... can't afford to pay dividends right now. [So why was it] spending nearly $60 million buying back its dead-in-the-water shares?"

Ordinarily, you'd expect buying activity to support the stock, as management stepped in to buy anytime share prices dropped. So how has that worked out? Well, over the past three months, AmCap shares are up 5%. That sounds good, but it only paces the performance of the S&P 500, also up 5%. Worse, we recently learned that AmCap bought another 5.5 million shares in Q1 2012. Unfortunately, the prices it paid averaged $8.79 per share -- more than 4% above today's going rate.

If at first you don't succeed, fail, fail again.

Goldman Sachs (NYSE: GS )

And speaking of failures, let's turn to Goldman Sachs. The most (in)famous banker of the 2000s is getting pilloried today in the pages of The Wall Street Journal for letting Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) outfox it on a bond trade involving debt of struggling newspaper company Lee Enterprises. But that's not the only reason to doubt the stock's prospects.

In a cryptic note, Goldman confirmed last month that after the most recent round of bank stress tests, it now has a green light from the Federal Reserve to proceed with a planned "repurchase of outstanding common stock" of unspecified size. Depending on the size, this could be a disaster of either minor or major proportions for its shareholders. Consider: At $119, Goldman shares currently fetch the princely valuation of more than 26 times earnings, while rival bankers Morgan Stanley and JPMorgan cost less than 15 and 10 times earnings, respectively. Yet according to analysts who follow the stock, the fastest Goldman can hope to grow its earnings long term is about 15% per year. The resulting PEG ratio of nearly 1.8 suggests Goldman is overpaying for its shares.

Don't make the same mistake yourself.

Apple (Nasdaq: AAPL )

Now, I don't like to end this column on a down note, and fortunately, I have spotted one company out there that may do better by its shareholders: Apple. Perhaps you've heard of it?

Last month, it was Apple's initiation of a $2.65 per share dividend that got all the headlines. Less noticed, though, was the i-everything company's announcement that it will also buy back $10 billion worth of stock, beginning on Sept. 30. At first glance, I have to say I like the idea. Priced at less than 18 times earnings (and an even more attractive ratio to free cash flow) and growing at 20% per year, Apple shares look priced to move. My one concern here (I have others elsewhere) is Apple's acknowledgement that a prime objective of its buyback plan is to "neutralize" the effects of future stock dilution from employee equity grants. To the extent Apple uses its buyback authorization to buy undervalued shares and benefit outside shareholders, I like the deal.

But to the extent that Apple spends $10 billion to mask the effects of stock dilution, I don't.

Fool contributor Rich Smith does not own (or short) shares of any company named above. The Motley Fool has a disclosure policy.

The Motley Fool owns shares of JPMorgan Chase, Apple, and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway, Goldman Sachs, and Apple, as well as creating a bull call spread position in Apple. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Article from The Motley Fools

Highly Undervalued S&P 500 Dividend Stocks

ridodirected@gmail.com (RIDO) — Tue, 10 Apr 2012 19:55:00 +0000

By Alexander Crawford, Kapitall

April 10, 2012

Article from The Motley Fools

Do you look for value when considering different stocks? If so, here are some value ideas to keep in mind.

To illustrate, we ran a screen by starting with stocks of the S&P 500 paying dividend yields above 1% and sustainable payout ratios below 50%. We then screened these names for those that appear undervalued by two measures: levered free cash flow/enterprise value, and the Graham number.

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. The higher the ratio, the more undervalued the company appears.

The Graham number was created by the "godfather of value investing," Benjamin Graham, and it represents a stock's maximum fair value. It is based on a stock's earnings per share and book value per share.

Graham number = Square Root of (22.5 x Trailing-12-Month EPS x Most-Recent-Quarter BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham number may be undervalued.

Business section: Investing ideas

The final list of stocks from this screen is below. These S&P 500 dividend names appear undervalued, with relatively high ratios of levered free cash flow/enterprise value. They are also trading at steep discounts to their Graham number.

Do you think these dividend stocks have more value to price in?

Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

1. Aetna (NYSE: AET ) : Operates as a diversified health care benefits company in the United States. It has a market cap of $17.39 billion and is priced at $48.89 per share, with a dividend yield at 1.41% and payout ratio of 11.50%. Levered free cash flow is at $2.61 billion vs. enterprise value at $18.90 billion (which implies a LFCF/EV ratio at 13.81%). Diluted TTM earnings per share at 5.22 and a MRQ book value per share value at 28.94 implies a Graham number fair value of $58.30. Based on the stock's price at $49.62, this implies a potential upside of 17.49% from current levels.

2. Aflac (NYSE: AFL ) : Provides supplemental health and life insurance. It has a market cap of $20.93 billion and is priced at $43.63 per share, with a dividend yield at 2.95% and payout ratio of 29.26%. Levered free cash flow is at $2.47 billion vs. enterprise value at $22.77 billion (which implies a LFCF/EV ratio at 10.85%). Diluted TTM earnings per share at 4.18 and a MRQ book value per share value at 28.96 imply a Graham number fair value of $52.19. Based on the stock's price at $44.8, this implies a potential upside of 16.49% from current levels.

3. Travelers (NYSE: TRV ) : Provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. It has a market cap of $23.14 billion and is priced at $58.07 per share, with a dividend yield at 2.79% and a payout ratio of 47.31%. Levered free cash flow is at $4.09 billion vs. enterprise value at $26.01 billion (which implies a LFCF/EV ratio at 15.72%). Diluted TTM earnings per share at 3.37 and a MRQ book value per share value at 62.31 imply a Graham number fair value of $68.74. Based on the stock's price at $58.88, this implies a potential upside of 16.74% from current levels.

4. Time Warner (NYSE: TWX ) : Operates as a media and entertainment company in the United States and internationally. It has a market cap of $35.40 billion and is priced at $36.18 per share, with a dividend yield at 2.84% and a payout ratio of 34.73%. Levered free cash flow is at $10.80 billion vs. enterprise value at $51.59 billion (which implies a LFCF/EV ratio at 20.93%). Diluted TTM earnings per share at 2.71 and a MRQ book value per share value at 30.76 imply a Graham number fair value of $43.31. Based on the stock's price at $36.65, this implies a potential upside of 18.17% from current levels.

Compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

Article from The Motley Fools

Asian Stocks Fall Most This Year as Europe Stokes Concern

ridodirected@gmail.com (RIDO) — Sat, 07 Apr 2012 07:25:00 +0000

By Yoshiaki Nohara - Apr 7, 2012 7:37 AM GMT+0800

Article from Bloomberg

Asian stocks fell, with the regional benchmark index capping its biggest weekly loss this year, after the Federal Reserve damped expectations for more monetary easing and on renewed concern Europe’s debt crisis will weigh on economic growth, damping the outlook for Asian exporters.

Honda Motor Co. (7267), a carmaker that gets 83 percent of its revenue abroad, dropped 4.3 percent in Tokyo. Hutchison Whampoa Ltd. (13) and other companies that do business in Europe slid after demand fell at a Spanish government bond auction. Fast Retailing Co. (9983), Asia’s top clothier, plunged 6.8 percent in Tokyo after sales at its Uniqlo stores disappointed investors.

The MSCI Asia Pacific Index (MXAP) fell 1.3 percent to 124.91 this week, the most since the period ended Dec. 16. The measure has gained 9.7 percent this year amid signs the U.S. economy is recovering. Gains slowed after China last month cut its target for economic growth, seeking to cool its property market and become less reliant on exports.

“You can’t stay confident about the U.S. economy without policy support,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “Europe’s economy faces a downside risk, and it remains to be seen whether it will spread across the world.”

Trading volume across Asia fell during market holidays. Japan and South Korea were the only major markets open all week. The Nikkei 225 Stock Average (NKY) plunged 3.9 percent this week, the biggest weekly loss since the period ended Aug. 5, as the yen strengthened, dimming the earnings prospects for Japanese exporters. South Korea’s Kospi Index added 0.7 percent.

Hong Kong’s Hang Seng Index added 0.2 percent on the week. Australia’s S&P/ASX 200 Index lost 0.4 percent, while Singapore’s Straits Times Index (FSSTI) dropped 0.8 percent.

The Shanghai Composite Index advanced 1.9 percent on speculation China will ease monetary policy further to spur growth.

Fed Holding Off

Asian stocks fell after the Federal Reserve’s meeting minutes revealed on April 3 showed it’s holding off on increasing monetary accommodation.

“The perception is that you’re taking away the safety net of excess liquidity that lifted asset prices and at the same time the prospects for growth that beat expectations aren’t that good,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Under that scenario and given the exceptionally good run we’ve had year-to-date, people are reassessing their risk-reward scenarios.”

Exporters and resources companies fell after the release of the Fed notes, with Honda slipping 4.3 percent to 3,010 yen. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, lost 4.1 percent to 1,634 yen. BHP Billiton Ltd. (BHP), the world’s biggest mining company, lost 0.5 percent to A$34.44 in Sydney. Rio Tinto Group (RIO) fell 0.2 percent to A$65.29.

‘Significant Recession’

Stocks also fell after sluggish demand at Spain’s debt sale and slowing German factory output fueled concern Europe’s debt crisis is spreading and the economy is contracting. European Central Bank President Mario Draghi said the region’s economic outlook is “subject to downside risks.”

“Investors realize those economies are heading into a significant recession,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “Gains from here are going to be hard work.”

Companies that rely on Europe slid. Hutchison Whampoa lost 1.9 percent to HK$76.10. Nissan Motor Co., a carmaker that gets 15 percent of its revenue from Europe, lost 2.8 percent to 856 yen.

Fast Retailing plunged 6.8 percent to 17,570 yen, its biggest weekly loss since November. Revenue at its Uniqlo stores in Japan failed to recover from last year’s March 11 earthquake, according to Credit Suisse Group AG. The clothier’s same-store sales rose 5.1 percent after falling more than 10 percent in the year-earlier period.

China Policy

Losses were limited on speculation China may relax policy. The country is “almost guaranteed” to either cut interest rates or reserve requirement ratios in April, Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole, said in a Bloomberg television interview on April 4. The strategist cited comments made by Premier Wen Jiabao the day before that he plans to soon unveil fine-tuning measures.

Mainland developers gained in Hong Kong. China Overseas Land & Investment Ltd. advanced 8.1 percent to HK$15.96. Agile Property Holding Ltd. (3383) jumped 10.2 percent to HK$9.87.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

Article from Bloomberg

3 Stocks to Get on Your Watchlist

ridodirected@gmail.com (RIDO) — Wed, 04 Apr 2012 20:34:00 +0000

By Sean Williams

April 4, 2012

Article from The Motley Fool

I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I'd be unable to keep up on my favorite sectors and what's really moving the market. Even worse, without my watchlist, I'd be lost when it came time to choose what stock I'm buying or shorting next.

Today is "Watchlist Wednesday," so I'm discussing three companies that have crossed my radar in the past week and at what point I may consider taking action on these calls with my own money. Keep in mind, these aren't concrete buy or sell recommendations, nor do I guarantee I'll take action on the companies being discussed weekly. What I can promise is that you can follow my real-life transactions through my profile, and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.

Autodesk (Nasdaq: ADSK )

I may not talk about it often enough, but Autodesk is one of the most consistent growth stories in software. The company, like a growing number of software names, is capitalizing on businesses moving into the cloud. Its AutoCAD software, which allows users from the manufacturing sector to draft and design projects, is a driving force behind the company's growth. According to Autodesk's CEO, Carl Bass, more than 300,000 documents per week are being uploaded to its mobile device program, AutoCAD WS, thanks in part to a surge in sales from Apple's (Nasdaq: AAPL ) iPad.

This is one major key to Autodesk's success: attacking the mobile software space in addition to standard PCs and laptops. Not many software providers can say they've been profitable in each of the past 10 years, but Autodesk can. With a debt-free balance sheet, $1.4 billion in cash and a five-year projected growth rate of nearly 17%, there doesn't seem to be any reason not to be bullish on Autodesk.

Corning (NYSE: GLW )

I'm not exactly sure when this happened, but Corning just became a value play. Corning is the company behind the extremely shatter-resistant Gorilla Glass, as well as myriad other products in the fiber optic and life sciences sectors. If you recall, mobile, fiber optics and life sciences are three of my favorite sectors at the moment, granting Corning my trifecta of approval.

As smartphones begin to flood the market, their average selling price should drop, which will facilitate even more sales. More smartphone sales very simply mean more sales for Corning, since its fiber optic products and its protective glass are becoming essential tools to keeping Apple's iPhone 4S the most dominant phone on the market. Corning is loaded with $3.4 billion in net cash, is trading right at book value, and is priced at just nine times forward earnings. I'm not sure this is going to get any cheaper, so it looks like a genuine bargain here.

Conn's (Nasdaq: CONN )

The recent rally in Conn's makes about as much sense as a $3 bill to me. The company sells consumer appliances, electronics, lawn products, garden products, and mattresses. Let's just quickly take a glance at how some of these sectors have performed.

In home electronics, Best Buy (NYSE: BBY ) reported the need to close down 50 of its large stores in favor of opening 100 smaller, mobile-based stores. This is in response to terrible margins on televisions and the growing presence of online buyers. In lawn and garden, Trex, a provider of outdoor decking and railing products, reported a 32% drop in sales year over year based on its fourth-quarter results released in late February. As for mattresses, Sealy imploded in January after it lowered its full-year forecast.

This either means Conn's is just really that good, or emotions have gotten the better of investors here. As for me, I'm going to err on the side of the latter.

Foolish roundup

Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below, and consider following my cue by using the links below to add these three companies to your free personalized watchlist to keep up on the latest news with each company.

Don't let your search for great stocks end here. Consider getting your copy of our latest special report: "The Motley Fool's Top Stock for 2012." This report details a company that our chief investment officer has described as the "Costco of Latin America," and it's yours for the low, low price of free -- so don't miss out!

The Steve Jobs Betrayal

You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He's a total nerd when it comes to making lists. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Apple, Corning, and Best Buy. Motley Fool newsletter services have recommended buying shares of Apple and Corning, as well as creating a bull call spread position on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that believes transparency comes first.

Article from The Motley Fool

US HOT STOCKS: Avon, Groupon, Global Payments, Express Scripts

ridodirected@gmail.com (RIDO) — Mon, 02 Apr 2012 20:14:00 +0000

April 2, 2012, 1:46 p.m. ET

Article from The Wall Street Journal

U.S. stocks traded higher Monday as the Dow Jones Industrial Average recently rose 69 points to 13281, the Standard & Poor's 500-stock index moved up 12 points to 1420, and the Nasdaq Composite gained 26 points to 3118. Among the companies whose shares are actively trading in the session are Avon Products Inc. (AVP), Groupon Inc. (GRPN) and Global Payments Inc. (GPN).

Fragrance maker Coty Inc. offered to acquire Avon Products ($22.53, +$3.17, +16.37%) in a cash deal that values the struggling door-to-door beauty-products seller at roughly $10 billion. Coty is offering $23.25 a share to Avon shareholders, a 20% premium to Friday's closing price. Avon immediately rejected the offer, saying it was opportunistic and substantially undervalues the company, adding it remains confident in its stand-alone prospects and is committed to its previously announced CEO search.

Groupon ($16.28, -$2.10, -11.43%) lowered its reported fourth-quarter results after the online daily-deals service discovered it had to set aside more money for customer refunds. Auditor Ernst & Young also discovered a "material weakness in its internal controls" for the year.

Global Payments ($45.96, -$1.54, -3.24%), the credit-card processor that reported a significant security breach Friday, said hackers stole account numbers and other key information from up to 1.5 million accounts in North America. The news, released Sunday night in a statement, came after the company received a fresh blow over the weekend when Visa Inc. (V, $119.76, +$1.76, +1.49%) yanked its seal of approval from the company. Shares continued to fall Monday, after ending down more than 9% on Friday. Separately, the payment-processing company said Monday that its fiscal third-quarter earnings rose 21% as its stronger-than-expected revenue improved margins and offset rising costs.

Keryx Biopharmaceuticals Inc. (KERX, $1.69, -$3.30, -66.16%) and Aeterna Zentaris Inc. (AEZS, $0.75, -$1.39, -65.01%) reported the combined use of perifosine and the chemotherapy-drug capecitabine as a treatment for refractory advanced colorectal cancer didn't meet a Phase 3 clinical trial's primary endpoint. The companies said the study of 468 patients at 65 U.S. sites found perifosine with capecitabine didn't improve the overall survival rate when compared with capecitabine alone.

Express Scripts Inc. (ESRX, $56.17, +$1.99, +3.67%) said it completed its $29.1 billion acquisition of Medco Health Solutions Inc. (MHS, $71.71, +$1.41, +2.01%) following the Federal Trade Commission's decision that the combination of the two largest pharmacy-benefits management companies in the U.S. wouldn't change the competitive landscape in the sector.

Other Stocks In Focus:

Saying the stock value is now "compelling" and the "worst appears over," Brean Murray gives the first upgrade on Abercrombie & Fitch Co. (ANF, $51.82, +$2.21, +4.45%) by the Street in months. It moves the teen-apparel retailer to buy while setting a $65 price target and boosts earnings-per-share targets for the next two years. Among other reasons to be bullish, Brean Murray notes, "After entering 1Q with materially too much inventory, we believe a warmer March has allowed the company to become more right-sized in terms of product exposure and should position [ANF] to be more strategic going forward."

JPMorgan upgraded Alliant Techsystems Inc. (ATK, $52.55, +$2.43, +4.85%) to overweight, saying the defense contractor's reduced earnings outlook is more than fully priced into the stock. Last month, Alliant predicted fiscal 2013 results would fall short of Wall Street expectations due to near-term growth challenges. Its stock had dropped steeply since then.

Amazon.com Inc. (AMZN, $198.95, -$3.56, -1.76%) slid on Bank of America Merrill Lynch's downgrade of the ecommerce giant to neutral. After an 18% rise in 1Q, the ratings cut comes as the investment bank believes consensus estimates on Amazon are too high, starting with this quarter, while "increasing competitive pressures in digital media" from Apple (AAPL, $615.24, +$15.69, +2.62%) and Google (GOOG, $645.12, +$3.88, +0.61%) should keep AMZN's "valuation multiple in check." Bank of America is keeping its price target at $235.

Apollo Investment Corp. (AINV, $7.49, +$0.32, +4.46%) said Apollo Global Management LLC (APO, $14.30, +$0.02, +0.14%) purchased about $50 million, or about 5.9 million shares, of newly issued Apollo Investment stock amid plans to expand its focus. Apollo Investment also said it is beginning a search for a new chief financial officer after its earlier choice was unable to join the company due to a scheduling conflict.

AVI BioPharma Inc. (AVII, $1.10, -$0.44, -28.64%) said a 24-week study showed that eteplirsen had a statistically significant effect in raising the level of a key protein, dystrophin, in boys with Duchenne muscular dystrophy. But patients given the drug for only 12 weeks showed no significant increase in dystrophin, despite the administration of the drug at a higher dose, suggesting that a longer duration of treatment is required.

Bank of the Ozarks Inc.'s (OZRK, $31.92, +$0.66, +2.11%) board approved a penny increase in its quarterly dividend, allowing the regional bank to raise its payout for the seventh straight quarter. The bank said Monday it will now pay shareholders 12 cents a share, a 9.1% increase over its prior payout, which will cost an additional $345,500 a quarter.

Raymond James downgraded its stock-investment rating on Buffalo Wild Wings Inc. (BWLD, $88.19, -$2.50, -2.76%) to underperform from market perform, citing the combination of record valuation metrics for the stock, a current chicken-wing shortage that could be of long duration and the beginning of a softer seasonal demand period for sports bars.

JPMorgan cut its stock-investment rating on Exelis Inc. (XLS, $12.13, -$0.40, -3.15%) to neutral after the recent run-up in the stock. Shares of the aerospace and defense stock are up about 34% year-to-date, fueled by pension optics.

After Friday's 16% slump, shares of Finish Line Inc. (FINL, $20.63, -$0.60, -2.80%) are sliding further as analysts continue to weigh in on the retailer's dour per-share earnings news and planned hike in tech spending.

Kohl's Corp. (KSS, $51.48, +$1.45, +2.90%) has missed the rally that other retail stocks have enjoyed this year, but the tide may be ready to turn, says J.P. Morgan at it upgrades the department-store chain to neutral and raised its price target to $55 from $42. The investment bank cites three near-term potential catalysts--Kohl's is seeing more people signing up for its credit cards, a group that tends to spend more; inventory is becoming more balanced with anticipated demand; and recent and new product launches.

After surging 60% since mid-December on turnaround hopes and signs of an improved housing market, Lumber Liquidators (LL, $24.47, -$0.64, -2.55%) moves back from last week's nine-month high as Stifel Nicolaus downgrades the closeout flooring seller to hold in a valuation call. Though the firm said it is bullish over the next five years for a material recovery in consumer-remodeling activity, it said it is concerned that investors have gotten overly excited near-term as flooring sales in the first quarter, while better, are only marginally so.

Bank holding company National Penn Bancshares Inc. (NPBC, $9.21, +$0.36, +4.08%) raised its dividend by 40% to 7 cents a share and unveiled a plan to buy back up to 7.5 million shares of its stock, joining a growing list of firms looking to bolster shareholder value.

Fortis Healthcare, a provider of integrated health-care services in India, and Masimo Corp. (MASI, $24.10, +$0.72, +3.08%) said they reached a multiyear medical-technology supplier agreement that allows Fortis hospitals access to Masimo's full line of pulse oximetry and noninvasive, continuous patient-monitoring services.

After already climbing nearly 40% since late November, Piper Jaffray gives up the bear case on PetMed Express Inc. (PETS, $12.99, +$0.61, +4.93%) and upgrades its stock-investment rating on the company to neutral while raising its price target 20% to $12 and boosting estimates for this year and next. It contends downside risk at current levels is limited, citing among other factors the outlook for the online pet-medicine company isn't "as dire as previously expected heading into seasonally strong part of the year."

Regional carrier Pinnacle Airlines Corp. (PNCL, $0.58, -$0.77, -56.78%) filed for bankruptcy as the company seeks to restructure its agreements with Delta Air Lines Inc. (DAL, $10.02, +$0.10, +1.01%) and cut ties with United Airlines and US Airways Group Inc. (LCC, $7.52, -$0.07, -0.96%). The Memphis, Tenn., carrier filed for Chapter 11 protection Sunday with $1.4 billion worth of debt and $1.5 billion worth of assets, according to papers it filed in U.S. Bankruptcy Court in Manhattan.

Nutritional-supplements company Schiff Nutrition International Inc. (WNI, $13.16, +$0.87, +7.08%) acquired Airborne Inc. for $150 million in cash, giving it control of the well-known maker of cold-fighting tablets and allowing it to expand its position in the immune-support market. Schiff acquired Airborne from the private-equity arm of GF Capital Management & Advisors LLC.

It's time to take a breather on shares of Texas Instruments (TXN, $33.20, -$0.41, -1.22%) and Linear Tech (LLTC, $33.15, -$0.55, -1.63%), UBS says. The firm cuts its stock-investment ratings on both companies to neutral from buy, saying valuation and estimates are ahead of fundamentals. UBS is positive on the chip sector, but says industrial recovery isn't fast enough as weakness in China offsets strength in US. In addition, the wireless infrastructure market remains weak.

GlaxoSmithKline PLC (GSK.LN) Monday underscored how important the experimental drug Relovair is for its future by lifting its stake in the lung treatment's U.S.-developer Theravance Inc. (THRX, $22.73, +$3.23, +16.56%) to 26.8% from just under 19%, at a cost of just under $213 million. Glaxo, Britain's biggest drug maker, is paying $21.2887 a share for 10 million Theravance shares, a 7.5% premium to the five-day average price up to March 30.

Wireless-broadband-network services-provider Towerstream Corp. (TWER, $5.22, +$0.47, +9.89%) signed a Wi-Fi agreement with a national wireless carrier utilizing its current and future rooftop assets, the company said in a filing with the Securities and Exchange Commission late Friday.

Caris & Co. cut its stock-investment rating on Volterra (VLTR, $33.75, -$0.67, -1.93%) to average from above average, citing the stock's recent 55% jump since late November. The firm notes positive estimate revisions are already partially baked into shares as a result of strong March PC order data points.

-Edited by Corrie Driebusch and Ben Fox Rubin; write to corrie.driebusch@dowjones.com

Article from The Wall Street Journal

Asian Stocks Post Best Quarter Since 2010 on Bernanke

ridodirected@gmail.com (RIDO) — Sun, 01 Apr 2012 08:57:00 +0000

By Kana Nishizawa and Yoshiaki Nohara - Mar 31, 2012 7:20 AM GMT+0800

Article from Bloomberg

Asian stocks rose this week, with the regional benchmark index capping its biggest quarterly gain since 2010, after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed. Gains were limited amid concern China’s economic slowdown is weighing on company earnings.

Sharp Corp., which fell to a 30-year low earlier this month, surged 27 percent this week in Tokyo after Foxconn Technology Group agreed to buy a stake in the display maker. Toyota Motor Corp., Asia’s biggest carmaker by market value, rose 3 percent. Korea Gas Corp. (036460), the world’s largest buyer of liquefied natural gas, gained 12 percent in Seoul after its Italian partner found reserves in Mozambique. Sun Hung Kai Properties Ltd. (16), the world No. 2 real estate company, plunged 9.8 percent in Hong Kong after the firm’s co-chairmen were arrested in a corruption probe.

“You just don’t have sustainability for the markets to reweight higher like they did three or four months ago,” Andrew Pease, Sydney-based chief investment strategist for the Asia- Pacific region at Russell Investment Group, which manages about $150 billion. “You are not going to see any acceleration from here and you may actually feel a bit of moderation” in the U.S.

The MSCI Asia Pacific Index (MXAP) rose 0.2 percent to 126.60 this week. The measure jumped 11 percent for the first three months this year, as U.S. economic optimism and monetary easing in Europe, Japan and China fueled the fastest quarterly rally since September 2010.

Japan’s Nikkei 225 Stock Average (NKY) gained 0.7 percent this week, taking its advance through the quarter to 19 percent, the biggest rise among developed market benchmark indexes. It this week recouped losses of as much as 20 percent from last year’s quake and nuclear disaster.

Shanghai Slumps

Australia’s S&P/ASX 200 Index rose 1.5 percent while Singapore’s Straits Times Index (FSSTI) rose 0.7 percent. South Korea’s Kospi Index slid 0.6 percent.

The Shanghai Composite Index slumped 3.7 percent this week. The gauge tumbled the most in four months on March 28 after Societe Generale SA said Chinese corporate profits won’t grow at all this year.

Hong Kong’s Hang Seng Index slid 0.6 percent on concern that earnings will slow and as Sun Hung Kai dropped 9.8 percent to HK$96.50 following the arrest of Co-chairmen Thomas and Raymond Kwok by the city’s anti-corruption agency.

Measures of volatility dropped across the region this week. The Kospi 200 Volatility Index (VKOSPI) touched its lowest level since July and the Hang Seng Index Volatility Index fell to a level not seen since August on March 27.

Accommodative Policy

The Federal Reserve’s Bernanke said on March 26 that while he’s encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy will be needed to make further progress. Stocks gained the following day as some investors bet Bernanke’s comments indicate further policy easing is still under consideration.

Toyota rose 3 percent to 3,570 yen in Tokyo, while Billabong International Ltd. (BBH), a surfwear company that counts the Americas as its biggest market, increased 1.8 percent to A$2.78 in Sydney.

Fed policy makers “still have an option of doing more, but I think it was just reinforcing the view that they are not going to reverse policy quickly,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “There’s going to be a lot of liquidity provided for the market and economy. Obviously equity investors are taking it in a positive way.”

Foxconn, Sharp

Sharp surged 27 percent to 604 yen this week in Tokyo, the biggest five-day gain in the MSCI Asia Index, after Foxconn Technology and founder Terry Gou agreed to invest 133 billion yen ($1.62 billion) in the TV maker and its display unit.

Gou’s flagship Hon Hai Precision Industry Co. rose 8 percent to NT$114.50 through the week as it announced fourth- quarter net income which climbed 64 percent to NT$35 billion ($1.19 billion) surpassing each of the nine analysts’ estimates compiled by Bloomberg, and the average of NT$26.6 billion.

Korea Gas jumped 12 percent to 43,150 won this week in Seoul after its partner Eni SpA, an Italian oil company, found reserves in Mozambique that may exceed those of the U.K.

Renhe Commercial Holdings Co. (1387), a developer of underground shopping centers in China, slumped 39 percent to 54 Hong Kong cents in Hong Kong this week, the steepest five-day drop in the MSCI Asia Pacific Index. Underlying profit fell more than 90 percent and Moody’s Investors Service cut its credit rating two levels to B3, six ranks below investment grade.

‘Cautious on China’

“We are concerned about China’s macro economy and you’ve seen some of the slowdown in growth rates in some of the companies.” said Tim Cunningham, who helps oversee $83 billion of assets, including Chinese stocks, at Thornburg Investment Management Inc. in Santa Fe, New Mexico. “We’re a little cautious on China overall and we’ve cut back our weight.”

Of the 179 companies in the Shanghai Composite that reported quarterly net income this week as of the market close, almost twice as many companies missed analyst estimates as those that exceeded them.

Jiangxi Copper Co. (600362), China’s biggest producer of the metal, dropped 6.4 percent to 23.91 yuan in Shanghai after recording an 18 percent decline in second-half profit.

Li & Fung Ltd. (494), a supplier of clothes and toys to retailers, slumped 10 percent to HK$17.82 in Hong Kong after saying it’s selling 210 million shares at HK$18.62 each to boost general working capital, which may be used for acquisitions.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

Article from Bloomberg

Find These Stocks Before Wall Street Does

ridodirected@gmail.com (RIDO) — Fri, 30 Mar 2012 04:04:00 +0000

y Rich Duprey
March 29, 2012
Article from The Motley Fool

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. Getting in before Wall Street discovers them -- or rediscovers them -- means you can stake a claim before they start taking off.

Here we check out companies with minimal analyst coverage at best, and then we pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings but hasn't yet caught analysts' attention could be your next home-run investment.

Source: Motley Fool CAPS. NA = not available. Wall Street picks based on CAPS, Chesapeake Granite has three analysts following it according to Yahoo! Finance.

Remember, without much analyst support, you'll have to do more digging on your own to see whether these stocks deserve a spot in your portfolio, so don't just buy or sell them based solely on their appearance here.

Hiding in plain sight

The oil and gas industry has been rolling out royalty trusts at a quick pace these days that doesn't seem to be abating anytime soon. SandRidge Energy (NYSE: SD ) launched the SandRidge Permian Trust and SandRidge Mississippian Trust I recently, and it has a second Mississippian trust in the wings.

Chesapeake Energy (NYSE: CHK ) is also keeping up with the Joneses with its IPO of Chesapeake Granite Wash Trust, as has Whiting Petroleum, which unveiled Whiting USA Trust II just the other day (Whiting USA Trust I has been around for a few years).

So why this resurgence in trusts? It allows the parent company to generate gobs of cash for its assets without diluting current shareholders with new stock or burdening itself with debt. Given assets with significant reserves, the trusts should produce oil and gas faithfully over their 20-year lifespans.

Last year, Chesapeake Energy said it was doubling its rig count in Oklahoma and Kansas and was planning a nearly $2 billion capital expenditure plan for this year. But with $351 million in cash on its balance sheet against almost $10.6 billion in debt, it would be constrained. The trust gives it a chance to maximize value for shareholders without incurring their wrath.

So far there's unanimous opinion on the ability of the Granite Wash trust to outperform the market, but let us know your views of its prospects on the Chesapeake Energy Granite Wash Trust CAPS page, and add the trust to the Fool's free, personalized stock-tracking service to see how long it stays off the grid of the analyst community.

A rich patina

Ultra-deepwater drilling is the future of oil exploration, with investors able to choose between Transocean (NYSE: RIG ) , the industry's largest player by market cap, and lesser players like SeaDrill and Noble, among others.

SeaDrill is definitely an investor favorite, with all but one of 145 CAPS All-Stars rating the deepwater driller to outperform the broad indexes. Wall Street also likes its prospects, unanimously believing it will come out ahead, and while there's even a consensus of sorts among Foolish analysts, Sean Williams has problems with SeaDrill's inability to produce positive cash flows on anything approaching a regular basis.

Oil prices remain north of $100 a barrel, and SeaDrill recently secured a contract with dayrates of $595,000. Better yet, it says it expects rates to breach $600,000 soon and notes that some drillers are securing rates of $750,000 a day. It's a positive industry trend, and CAPS member troym72 thinks SeaDrill will climb.

There has been a recent pull-back in shares of SDRL. The company's earning and dividend yield support a much higher stock price than where it is now. I'm taking advantage of this pull-back to thumb up SDRL.

Let us know on the SeaDrill CAPS page whether you think it will continue sailing the high seas, and add it to your Watchlist to be alerted if it's at risk to sink to Davy Jones' locker.

Swing for the fences

If you're looking for other hidden energy opportunities, read The Motley Fool's special free report on "3 Stocks for $100 Oil." These three companies are poised to profit from the world's insatiable thirst for energy, but to find out which stocks our top analysts picked, download this report free for a limited time only.

The Steve Jobs Betrayal

Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Transocean. Motley Fool newsletter serviceshave recommended buying shares of Chesapeake Energy and SeaDrill. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Article from The Motley Fool

Investing in Water Stocks: Three Names to Buy Right Now (SBS), (PNR), (PIO)

ridodirected@gmail.com (RIDO) — Tue, 27 Mar 2012 20:54:00 +0000

MARCH 27, 2012
By Patrick Vail, Contributing Writer
Article from Money Morning

You've no doubt heard about the building scarcity of water. It's the reason savvy shareholders have been busy investing in water stocks.

Here's why.

Water may be everywhere but only 3% of it is fresh or suitable for drinking. Two-thirds of that is locked in glaciers and polar icecaps, which means less than 1% of the world's fresh water is available for human use.

That's the water found in lakes, rivers, reservoirs, and underground sources shallow enough to be accessed cheaply. Even still, much of that is polluted or otherwise unsuitable for consumption.

The water that's left is then used in agriculture and industry, and here's the kicker: It is divided between seven billion people... and demand is increasing all the time.

According to the United Nations, in the last century water use has increased at more than twice the rate of population growth.

Water has become so critical that Willem Buiter, chief economist at Citigroup, believes it will soon become "the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals."

That may be hard to imagine, considering we can simply turn on the tap and get fresh water for next to nothing.

But it's true. There are myriad of factors-from population growth to climate change-putting a strain on the world's water supply and causing demand to spike.

We'll look at those factors and how investors can benefit from this growing demand by investing in water stocks.

Investing in Water Stocks: Profit From Rising Demand

The biggest factor in the increasing scarcity of water is agriculture.

In 2012, American farmers will plant more crops than in any year since World War II. After two years of declining yields, this is good news for the agriculture industry, which is seeing commodity prices rise right along with global demand.

Around the world, the picture is much the same. China and India, too, are planting more this season.

The gigantic thirst for agricultural commodities this year means it will also be a huge year for water usage.

According to a study conducted by the University of Twente in the Netherlands, agricultural uses account for 92% of the global water footprint, a broad measurement that aims to quantify global water use and consumption.

What's more, fresh water pollution from agriculture is a worldwide problem that causes billions of dollars in damage. In developing countries, where fewer environmental regulations exist to protect the water supply, nitrate and phosphate levels are expected to rise steadily over the next few decades.

That will put further strain on the water supply - right in the places where demand for water is expected to increase the most. That means emerging markets.

That's because on average, each person in the U.S. uses 100 to 150 gallons of water every day, according to the Environmental Protection Agency. But in places like China and India, the average is closer to 20 gallons per day.

In fact, China and India already have the two largest water footprints of any country on the planet. And they're about to get even bigger as their consumption of commodities skyrockets - water included.

The surging demand for water in these emerging markets is going to require better "water solutions," or innovative ways of filtering and treating water to make it drinkable.

Better infrastructure to deliver fresh, clean drinking water to billions of new middle class citizens is also going to be needed, including filters, pumps, pipelines, and new processing plants.

That makes the growth in water stocks inevitable as billions of dollars is spent to meet demand.

Given the scarcity, the sums are tremendous.

According to the Organisation for Economic Cooperation and Development (OECD), global investment in water supply infrastructure needs to increase by nearly $500 billion by 2025.

While some of that money will go to fixing aged infrastructure in the West, much of it is going to be needed to manage increased demand in emerging markets like Asia, Latin America, and Africa.

Three Ways to Invest in Water Stocks

A great way to gain exposure to water stocks is to buy companies that deliver it.

Water utilities have provided a great defensive position for the past few years, but their value is going to rise in tandem with demand for water. (Keep in mind that some companies operate in a regulated environment, which usually means there's a cap on how much a utility can charge for delivery.)

One quality company is Brazilian utility Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE ADR: SBS).

SBS provides water and sewage services to nearly 24 million people in the state of Sao Paolo. The company has a market cap of over $8.6 billion, a very attractive P/E of 11.86, and a nice yield of just over 4%.

SBS has been on a tear since the start of 2012. Its share price has spiked 34% to $75.74. Given SBS is located in one of the world's best markets for growth, its excellent financials, and, of course, rising demand for water, the company can go higher still.

Another way to invest in water is through companies that create solutions to the problems of tapping, pumping, filtering, and delivering water to millions.

Pentair Inc. (NYSE: PNR) is a global water solutions company that manufactures water pumps, irrigation and crop spray equipment, marine pumps and accessories, filtration, softener, and deionization products and systems, and mid-to-large fluid management products and applications.

Basically, PNR is solving the problem of delivering drinkable water to customers around the world.

PNR's revenue grew by 14.83% during the most recent quarter, from $753.86 million to $865.69 million. And the company's expanding in the right places, with revenues in Latin America and China jumping 18% and 26%, respectively in 2010. With the coming growth in developing economies, PNR could go sky high.

Perhaps the easiest way to invest in water stocks is through the PowerShares Global Water Fund (PIO).

It's an exchange-traded fund that uses the Nasdaq OMX Global Water Index as a benchmark to track companies creating products designed to conserve and purify water for homes, businesses, and industries.

The fund invests in an array of stocks, including utilities and other management and delivery companies, equipment manufacturers, and solutions companies, so PIO is diverse. Sixty-five percent of the fund is invested outside the United States, in places where we know growth is healthy, like Singapore and Brazil.

Either way, you don't realize the wealth of the water until it's gone. Investing in water stocks is going to be one of the market's great long-term trends.

[Editor's Note: Chief Investment Strategist Keith Fitz-Gerald actually recommended Pentair Inc. to subscribers of our premium service Private Briefing back in early September.

The stock has already risen 18% since then -- with more to come, as this report shows.

Article from Money Morning

Biggs boosts bullish bets on stocks

ridodirected@gmail.com (RIDO) — Sun, 25 Mar 2012 20:02:00 +0000

By Bloomberg News

March 25, 2012 6:01 am ET

Article from Investment News

Barton Biggs, the hedge fund manager who increased bets on equities before the S&P 500 rallied this year, is getting more bullish.

“I've been gradually increasing, and I'm up to 90% now,” he said in a Bloomberg radio interview, referring to the proportion of his fund that benefits from higher share prices.

“There is an awful lot of money that is out of stocks and in very low-yielding fixed-income instruments,” Mr. Biggs said. “I think the odds are that money is going to migrate back.”

Mr. Biggs, founder of Traxis Partners LP, said last month that his net-long position, a gauge of bullish versus bearish investments, is about 75% in stocks, up from 65% in January.

His optimism fluctuated along with the market, with at least eight changes in the past six months, according to interviews with Bloomberg.

The S&P 500 has rallied 11% this year and is on pace for the best first quarter since 1998 amid better-than-estimated economic reports and more confidence that Europe's debt crisis won't derail the global recovery.

The index was 9.9% below its October 2007 record of 1,565.15 last Tuesday. It trades at about 14.5 times reported earnings, the highest valuation level since July, while still below the average since 1954 of 16.4.

NET-LONG POSITIONS

Mr. Biggs reduced the net-long position of the Traxis Global Equity Macro Fund to about 40% at the end of September before increasing it to 65% on Oct. 17 and 80% on Oct. 31, according to interviews with Bloomberg.

On Nov. 21, he cut the level to less than 40%. On Dec. 2, he boosted it to about 60%.

Mr. Biggs said Dec. 12 that he was investing in Asian and U.S. stocks.

At the time, he said that equities might rise or fall 20% because of concern about budget negotiations and Europe. The S&P 500 rose 14% from that day through last Tuesday, while the MSCI All-Country Asia Pacific Index advanced 11%.

Mr. Biggs sees risk to the markets from tensions in the Middle East.

If Israel were to “take a shot” at Iran, it “would be very, very serious for the world economy and would cause a double dip,” he said.

“The "gloom crew' is looking over their shoulders at what's happened, and it certainly isn't a perfect world,” Mr. Biggs said.

Although the problems in Europe haven't been solved, he said that he is encouraged by the quality of the leadership at the European Central Bank and the International Monetary Fund, and in Italy.

Article from Investment News

Investing 101: Insider Stock Picks Hitting New Highs

ridodirected@gmail.com (RIDO) — Fri, 23 Mar 2012 20:55:00 +0000

By Alexander Crawford, Kapitall

March 23, 2012

Article from The Motley Fools

Company insiders report when they buy shares of their employer, and when they do, analysts and investors view it as a very bullish indicator.

The reason why is insiders, which include members of the board and upper management, are expected to know more about their company than other investors, so when they express their optimism in the company's prospects, it's viewed positively.

To illustrate this idea, we ran a screen on stocks hitting new 52-week highs for those with the most significant net insider purchases over the last six months.

Business section: Investing ideas

Below are the results of this screen. These stocks have recently closed at new 52-week highs, and they also have seen net buying from insiders over the last six months indicating their optimism.

Are you also optimistic about these companies' prospects?

Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

1. American Eagle Outfitters (NYSE: AEO ) : Operates as an apparel and accessories retailer in the United States and Canada. Over the last six months, insiders were net buyers of 1,134,490 shares, which represents about 0.68% of the company's 167.40M share float.

2. Calumet Specialty Products Partners (Nasdaq: CLMT ) : Produces and sells specialty hydrocarbon products in North America. Over the last six months, insiders were net buyers of 156,140 shares, which represents about 0.6% of the company's 25.90M share float.

3. Pharmacyclics (Nasdaq: PCYC ) : Operates as a clinical-stage biopharmaceutical company focusing on developing and commercializing small-molecule drugs for the treatment of immune mediated disease and cancer. Over the last six months, insiders were net buyers of 1,340,060 shares, which represents about 2.47% of the company's 54.25M share float.

4. Pebblebrook Hotel Trust (NYSE: PEB ) : Operates as a real estate investment trust. Over the last six months, insiders were net buyers of 36,945 shares, which represents about 0.07% of the company's 50.60M share float.

5. Constellation Brands (NYSE: STZ ) : Produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. Over the last six months, insiders were net buyers of 34,839 shares, which represents about 0.02% of the company's 164.53M share float.

Changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

Kapitall's Alexander Crawford does not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance.

The Steve Jobs Betrayal

The Motley Fool owns shares of Pebblebrook Hotel. Motley Fool newsletter services have recommended buying shares of Pebblebrook Hotel. The Motley Fool has a disclosure policy.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Japanese Stocks: The Greatest Value Investment of 2012?

ridodirected@gmail.com (RIDO) — Wed, 21 Mar 2012 19:50:00 +0000

by Justin Dove, Investment U Research

Wednesday, March 21, 2012: Issue #1734

Article from Investment U

Could Japanese stocks be the best value play of 2012?

The investment surprise of 2012 so far isn’t the orderly Greek default, the sudden sell-off in U.S. Treasury bonds, or even the big move up in the Dow. It’s the astonishing outperformance of Japan, a market that’s even topping highflyers like China, Korea and Brazil.

The Wall Street Journal summed it up well last Thursday:

“Japan’s Nikkei Stock Average climbed above the 10,000 mark to close at its highest level in more than seven months, riding a surge in the dollar against the yen triggered by the bank of Japan’s surprise moves in February to stimulate the economy. The index has gained 19% this year, well above the 8% advance in the Dow Jones Industrial Average and the 6.7% gain in the U.K’s FTSE 100 index.”

Yet the Journal also noted “most U.S. investors have missed out on the big gains.” Not Oxford Club members, however. Chief Investment Strategist Alexander Green has been pounding the table on the Tokyo market for months now.

In a research note to members in February, Alex wrote:

“Japanese consumers and investors are flush with cash. They have largely ignored domestic stocks after decades of sub-par returns. But eventually that money will find its way out of mattresses and back into Japanese equities. When it does, the Tokyo market will lift off.

“This is doubly true when institutional money managers return to this country in a serious way. For years, global fund managers have outperformed the world benchmark simply by underweighting Japan. But let the Shinkansen leave the station without them and they will dash after it. Institutional money could hit the Japanese market like its coming out of a fire hose. When it does, you want to own what they’re buying. In short, Japanese equities are overdue for a significant rally.”

Oxford Club members know he backed up this forecast with two ETF recommendations, iShares MSCI Japan Index (NYSE: EWJ) and WisdomTree Japan Small Cap Fund (NYSE: DFJ). And then followed with a recommendation of Toyota (NYSE: TM) to Oxford Club members and to Investment U Plus subscribers in February. Both funds have pushed higher in recent weeks and Toyota has tacked on almost 20 points in less than two months.

Alex remains resolutely bullish. I recently caught up with him at the beautiful Grand Del Mar in San Diego for the 14th Annual Investment U Conference. He had this to say about the “unexpected rally in Japan” that he’s been calling for:

“This bull market in Japan is likely still in its infancy. The Bank of Japan has joined the Federal Reserve, the Bank of England and the European Central Bank in upping the level of quantitative easing. That will drive the yen lower and improve the sales and profit margins of big Japanese exporters like Toyota.

“Japanese stocks are still among the world’s cheapest. The Japanese market’s price/book ratio – the value of a company’s stock price relative to its assets – is currently 1.3. By comparison, the price/book ratio of the S&P 500 is 2.2. There is still plenty of upside here.”

Smart investors scour the globe for high-quality assets selling well below their intrinsic value. If you’re one of them, you owe it to yourself to heed this advice – add some exposure to the Japanese market today.

If history is any guide, you’ll be glad you did.

Good Investing,

Justin Dove

Article from Investment U

The World's Best Dividend Portfolio

ridodirected@gmail.com (RIDO) — Sat, 17 Mar 2012 19:30:00 +0000

By Jim Royal

March 17, 2012

Article from The Motley Fools

In June, I invested my money equally in a selection of 10 high-yield dividend stocks. Those names offer triple the yield of the average S&P 500 stock. You can read all the details for yourself. Now let's check out the results so far.

Our total portfolio performance since inception is 7.7%, up just slightly since last week, but falling further behind that of the dividend-adjusted S&P. We have seven of 10 stocks in positive territory. Despite the underperformance, we're still achieving a much larger yield than the S&P, which should help ballast the portfolio when times get tough.

As for portfolio composition, I continue to like Philip Morris and Brookfield Infrastructure for their all-weather performance. They simply keep pushing out growing dividend streams year after year and have defensible businesses in consumer goods and infrastructure, respectively. So over time I expect them to continue to climb higher. I also continue to like the utilities, especially National Grid, for its global exposure but also for the good returns it earns in the U.K. and the billions in new investment needed in the next few years to maintain their infrastructure. Of these three, I expect to see the highest total returns from Philip Morris.

Dividends and other announcements

We're through earnings season, and we have limited dividend news for the moment.

Perhaps my favorite stock in the portfolio, Philip Morris, took advantage of low long-term interest rates this week. The company sold $700 million of 30-year notes at 4.5% and $550 million of five-year notes at 1.625%. That's very cheap financing and yet another reason to like the company's future.
Frontier is one of the most shorted stocks on the market, with nearly 18% of shares short. If the stock ever turns around, those shorts could help juice the stock price. However, Frontier's recent dividend cut to $0.10 quarterly makes it even easier for the shorts to hang on, since they also no longer have to pay Frontier's $0.1875 quarterly dividend to maintain their short position. Fellow Fool Rex Moore also warns that Frontier's tangible book value stands at -$3.8 billion.
In its latest earnings report, we got some dubious news for Annaly Capital, one of the most popular dividend stocks because of its massive payout. In this video article called "Bad News for the Market's Hottest Dividends," I explain why investors should be cautious on the mortgage REITs going forward -- it has to do with the declining spreads the businesses earn. Fellow Fool Alex Dumortier also has a good column on what to watch out for in the mortgage REIT sector.

Dividend news:

Brookfield Infrastructure went ex-dividend on Feb. 27 and pays out $0.375 per share on March 30.

Frontier went ex-dividend on March 9 and pays out $0.10 per share on March 30.

All that, of course, means more money coming into our pockets.

It's fun to sit back and get paid, and with the current market volatility, we might have a good chance to reinvest those dividends at good prices. Europe continues to be an absolute mess, and continued bad news will probably have stocks plunging again. If they do, I'll be inclined to pick more shares up.

Foolish bottom line

I've been a fan of big dividends for a while, and I think this portfolio will outperform the market over time through the power of dividends. As I promised in the original article, I'll be holding these stocks for at least a year and will continue to track the portfolio over the course of the year, including news on these companies.

If you like dividends, consider these 10 tickers along with the nine names from a brand-new free report from The Motley Fool's expert analysts, called "Secure Your Future With 9 Rock-Solid Dividend Stocks." Today I invite you to download it at no cost to you. Get instant access to the names of these high yielders.

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Jim Royal, Ph.D., owns shares of the 10 portfolio stocks mentioned in the table. The Motley Fool owns shares of Annaly, Seaspan, Plum Creek, and Brookfield Infrastructure and has created a covered strangle position in Plum Creek. Motley Fool newsletter services have recommended buying shares of Exelon, Philip Morris, Annaly, Southern, National Grid, Vodafone, and Brookfield Infrastructure, as well as writing a covered strangle position in Exelon and a covered straddle position in Seaspan. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Did You Miss This 100% Return?

ridodirected@gmail.com (RIDO) — Wed, 14 Mar 2012 20:44:00 +0000

By Amanda B. Kish, CFA | More Articles

March 14, 2012

Article from The Motley Fools

It's certainly starting to feel like things are getting better out there in the U.S. economy. Job creation has picked up in recent months, and more of the long-term unemployed are slowly trickling back into the workforce.

Of course, the fact that the stock market is up almost 10% year-to-date has also had a positive effect on investors' psyches. And while initial signs are indicating that investors are finally moving back into stocks and stock-oriented mutual funds after hiding out in bonds and cash for the past several years, it may be a little too late for these folks to capitalize on the 100% return opportunity that they missed while sitting on the sidelines.

Staying in the game

If you're a stock investor, you're probably always on the lookout for the next multibagger. You may pass over those less-exciting companies that generate small but consistent returns each year in favor of the superstar stock that will double, triple, or quadruple your money in short order. And while you can certainly leave plenty of room in your portfolio to pursue these red-hot opportunities, if you pass up the steady, unexciting investments, you're missing out on a lot.

That investment I mentioned earlier with the 100% gain? That would be the plain old S&P 500 index, measured from the bottom of the bear market in March 2009. Doubling your money in three years? I think that's a proposition a lot of investors could get behind.

While buy-and-hold investing certainly hasn't gotten a lot of love in recent years, it still represents one of the best ways to profit from long-term market growth -- assuming you have the discipline to actually stick with your investments during the inevitable downturns. Fidelity Investments ran some numbers and found that the S&P 500 posted an average annual return of 8% in price appreciation alone (not including dividends) in the 30-year period that ended last June. However, investors who tried to time the market and missed just the five best trading days within that time span had an average return of just 6.4%. Those unlucky folks who missed the 20 best days had a mere 3.7% showing. So investing in the broad stock market can be a winning proposition over the long run, but you need to stay invested to reap those benefits.

Vehicles to get you there

While mutual fund inflows are signaling that investors are finally dipping more than their toes back into the stock market, not everyone is gung-ho about putting their money at risk if another recession or market rout materializes. If you're one of these skittish types, there's one investment that I would recommend for getting back into the game: inexpensive exchange-traded funds. These funds will give you broad exposure to various segments of the market at a low price -- that will keep risk low and fees to a minimum, two factors that should calm the mind of any reluctant investor.

For the broadest exposure to the domestic U.S. stock market, consider a wide-ranging fund like Vanguard Total Stock Market ETF (NYSE: VTI ) or the Schwab U.S. Broad Market ETF (NYSE: SCHB ) , which come with annual expenses of 0.07% and 0.06%, respectively, and offer exposure to U.S. stocks of all sizes. For a global mandate that includes exposure to both domestic and foreign stocks, Vanguard Total World Stock ETF (NYSE: VT ) is a complete one-stop shop with a reasonable 0.22% price tag.

Looking a little more narrowly, if you want to home in on some of the more attractively priced areas of the market, consider a fund that invests in high-quality, dividend-yielding large-cap stocks. Two of the better options in this space are Vanguard Dividend Appreciation ETF (NYSE: VIG ) and the SPDR S&P Dividend ETF (NYSE: SDY ) .

P/Es on large-cap stocks are significantly discounted compared to those of smaller companies, so it makes sense to focus on the corner of the market with more appreciation potential. And why not get a little income with your investments by looking to dividend payers? The bottom line is, there are many quick, cheap, and low-risk ways for you to get back in the game before another fantastic return opportunity passes you by.

What to do now

Of course, odds are pretty good that investors who get back into the market now won't see their money double again three years from now. That's the benefit that comes from staying in the market even during the darkest days. But looking ahead, stocks are very likely to outperform bonds in the next few years, so you don't want to be sitting on the sidelines. And if the economy continues to improve, there could be even more room for equities to appreciate. So if you've been an equity onlooker in recent years, get ready to start flexing those investing muscles once again.

No matter what type of return your portfolio has seen in recent years, you may already be behind the game in saving for your retirement. If you're not sure if you're on track to safely leave your working years behind you, be sure to check out our newest special free report which highlights the shocking truth about your retirement. Don't miss this chance to grab your free copy of this can't-miss report today!

Best Odds in the Universe!

It's why David recently handpicked a small team of motivated portfolio managers. You see, he thinks these odds can get even better! And he'd like to prove it to you...

Amanda Kish is the Fool's resident fund advisor for the Rule Your Retirement investment newsletter. At the time of publication, she did not own any of the funds or companies mentioned herein. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Shaking the Investment World

ridodirected@gmail.com (RIDO) — Mon, 12 Mar 2012 20:19:00 +0000

By RICH DUPREY, THE MOTLEY FOOL
Posted 3:47PM 03/12/12 Investing
Article from The Daily Finance

Some stocks are one-hit wonders, making a big splash when they first appear, then quickly fizzling into obscurity or oblivion. But for other stocks, that initial big move is only a preview for even bigger and better gains to come.

Today, we're listing a pair of stocks that made some of the biggest upward moves over the past month -- despite the incredible volatility in the market -- and we're pairing them with ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.

Source: FinViz.com. One-month percentage change from Feb. 8 to March 9

While you were out, the markets rebounded, but they may turn tail again if Europe's fragile financial system falls apart. So before we get shaken out again, let's see why the CAPS community thinks some of these companies might continue to outperform the market.

Desperate times, desperate measures

The Great Winnowing is under way at Sears Holdings. Chairman Eddie Lampert is not only selling off underperforming stores, but similar to calving off Orchard Supply, he'll be spinning off his Hometown hardware stores in an effort to raise some $770 million in cash.

While the markets are supporting the move by raising the stock price over 150% so far this year, it should be recognized that Lampert's previous minimalist efforts at rejuvenating the Sears and Kmart brands were a failure. Overshadowed by the spinoff hoopla was the latest quarterly results where sales fell 4%, comps were down 3.4%, and a year-ago operating profit was turned into a huge loss.

There is little to no value left in Sears itself. It has lost the battle and the war to Wal-Mart and Target, and the only thing Lampert has left is to raze whatever productive assets he can find.

I don't know that I'd short the stock here, since markets can be irrational for extended time periods, but I'd be careful buying in, too, because the realization will soon dawn that all that's left of Sears Holdings will become an empty shell. As CAPS member MajorBob04 notes, the assets sales are only a temporary salve:

Selling real estate provides a short-term boost. But long-term they still haven't fixed the revenue growth and profitability problem.

I've already marked Sears to underperform on CAPS, but tell us in the comments section below whether you agree Lampert's reign at Sears has been a disaster, then add it to your watchlist to see how it plays out.

Overweighting expectations

Weight loss in a pill -- without nasty side effects -- is what all of us couch potatoes are looking for. VIVUS has given us hope that it will succeed in our fight against fat without our having to actually eat right and exercise.

The biotech reported that an advisory panel recommended 20 to 2 that its weight-loss drug, Qnexa, be approved by the FDA. While the market fattened up VIVUS' stock, more than doubling its value before paring back a lot of those gains, I'm mindful of the FDA's capriciousness and its tendency to go its own way, particularly when it comes to weight-loss drugs. We've seen it before with VIVUS, and time and again with rivals Arena Pharmaceuticals (NAS: ARNA) and Orexigen Therapeutics (NAS: OREX) when their own weight-loss drugs got rejected. Qnexa may be the exception that proves the rule, but I'm not counting on it until I see the final FDA decision.

Of the CAPS All-Stars who made calls on VIVUS, 27% believe the company will still underperform the market. The All-Stars undoubtedly side with HoldThatWinner, who thinks fat loss in a pill is a losing proposition:

I don't care what they say. Nothing beats good ole fashioned exercise (and staying away from the Quad Burger over at Earl's).

Add the biotech to the Fool's free portfolio tracker and tell us on the VIVUS CAPS page if you think it will eventually collapse under the weight.

Shake, rattle, and roll

These two stocks shook the market this past month, but the Fool has found one company that's digging up massive profits and is likely to continue to do so if the markets become rattled. Roll on over to get your free copy -- but hurry, because it's available only for a limited time.

At the time this article was published Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Wal-Mart. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Article from The Daily Finance

How to Get the Most From the Dow

ridodirected@gmail.com (RIDO) — Sat, 10 Mar 2012 20:15:00 +0000

By Dan Caplinger
March 10, 2012
Article from The Motley Fools

For millions of people around the nation, the stock market is the Dow Jones Industrial Average (INDEX: ^DJI ) . The 30 stocks that make up the Dow encompass nearly every industry in the market, going well beyond core namesake industrial stocks to include companies from sectors that no one would ever think of as "industrial."

But if you settle for using the Dow, you're not getting the complete picture of the stock market. Later in this article, I'll show you the measure that gives you everything the Dow has to offer. But first, let's look at why the Dow Industrials don't quite get the job done.

Anatomy of an average

The Dow Industrial Average has evolved over the years. Early in its history, the 12 stocks that made up the average about 100 years ago included largely heavy-industrial companies. As the first member among the current Dow stocks to gain entry to the average, General Electric (NYSE: GE ) was a fair representative of the dozen Dow stocks of the era -- and for the most part, it still is, despite its recent foray into financial services and other non-industrial businesses.

As the average evolved, the Industrial Average in particular expanded in scope to become almost a microcosm of the overall market. Restaurants, financial institutions, and technology companies now play a huge role in the Dow Industrials.

But the Dow still has two glaring omissions: transportation stocks and utilities. Those groups have their own averages to represent them, but keeping them separate means that most investors simply ignore the Dow Transports and Dow Utilities entirely.

The forgotten Dow average

If you want everything the Dow averages have to offer, you have to go beyond the Industrials, Transports, and Utilities to a fourth, often neglected Dow average. The Dow Jones Composite (INDEX: ^DJA ) includes all 65 stocks that appear in the other three averages.

The advantage that the Dow Composite has is that it doesn't leave out any sector of the market. Given the importance of having a broad-based benchmark that reflects the movements in every part of the stock market, the Dow Composite does a better job of providing an all-inclusive snapshot of share prices.

The better Dow?

But the Dow Composite has its own quirks. Since it's a simple average, it's prone to the same price-weighting problems that the Dow Industrials has. And in fact, adding in the Dow Transports and Dow Utilities makes it worse.

Consider: If you add up the share prices of the Dow Industrials, you get a total value of about $1,700. The Transports add up to about $875, while the Utilities weigh in at about $550. Add that together and you get $3,125.

The bigger problem, though, is the relative weightings of those sectors. Even though the Industrials cover nearly all the sectors of the economy, they get just over half the weight of the Dow Composite, while the Transports get a disproportionately high weighting of more than 25%. And in particular, the individual stocks Union Pacific (NYSE: UNP ) and FedEx (NYSE: FDX ) together make up almost a quarter of the Transports' contribution to the Dow Composite. Both companies are reasonable representatives for their respective industries, and they've both performed in line with the economic conditions that they face. But for them to have so much more weight than similar companies in their sector, as well as other sectors that happen to have only a few low-priced stocks in the average, just doesn't make sense.

Good news coming?

Despite its shortcomings, the Dow Composite is confirming the multiyear highs we've seen in many other major market benchmarks. Unlike the Industrials, however, the Dow Composite is somewhat closer to its all-time highs from back in 2007. That's due largely to the transportation sector's contribution to the Composite -- but if the Dow Composite can set new record highs, it could be the first sign of a renewed bull market that could take stocks much higher.

Get it all

The Dow is a fine place to start looking for good investment ideas, but it shouldn't be the place you end your search as well. The Motley Fool's latest special report on retirement highlights three promising long-term stock picks from a variety of industries to give you the solid returns you need.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter. Motley Fool newsletter services have recommended buying shares of FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

Article from The Motley fools

4 Stocks if (Gulp) Israel Attacks Iran

ridodirected@gmail.com (RIDO) — Tue, 06 Mar 2012 20:22:00 +0000

By TOM JACOBS, THE MOTLEY FOOL
Posted 2:42PM 03/06/12
Article from Daily Finance

Israel may soon attack Iran to inhibit or stop its nuclear capabilities. The compassionate person recoils at an investment discussion now, but the steely and rational investor safeguards the financial future for loved ones. Man or woman up. Do what needs to be done.

No one knows what lies behind doors No. 1, 2, or 3, but here's how to prepare for the short-, medium-, and long-term probabilities of an attack and its aftermath. In every case, fear will rule and market volatility will go nuts. The main rule is to own or buy with a margin of safety for the uncertain future. That way, you're good if we have the best of all possible worlds, but also protected in at least some of your stocks for the paper losses others will face.

One stock no matter what

There is one stock for any scenario that is deeply underpriced relative to intrinsic value. Military and commercial contractor L-3 Communications (NYS: LLL) sells at about a 50% discount to intrinsic value and recently upped its dividend yield to close to 3%. You don't have to predict the future or its effect on military spending when you have these odds of reward to risk. It's a bird in the hand and one in the bush.

Short term: Oil

Off the bat, the fear will be that Iran will close the Strait of Hormuz, passageway for 20% of the world's oil and 35% of that which moves by sea. Oil prices will explode upward -- emotion will rule before any careful examination of supply and demand. That will raise fears of recessions among oil importers. In short, the stock market will plummet broadly -- except for oil producers.

Whatever you think of oil prices today and the prospects of stocks you may own, today you can buy oil companies that offer a margin of safety should oil prices decline -- no attack, war, recessions, or deflation (how's that for a list?) -- and upside if oil supplies are threatened and prices rise.

Among the majors, the best-priced today is ConocoPhillips (NYS: COP) . It's rising near its precrash high, including dividends, but it's a better deal now. It not only offers a 3.4% dividend yield but also the special situation catalyst of a $5 billion current stock buyback with potential for another $5 billion repurchase in the second half of the year. These opportunistic repurchases could amount to a whopping 10% of its current market cap. Plus, after selling about $20 billion of assets already, the company plans up to another $10 billion this year. That includes the special situation of the planned Phillips 66 refining spinoff on May 1.

Evolution Petroleum (ASE: EPM) is relatively unknown but offers multiple catalysts for a potential rise. It's a good investment today and protection against oil shocks ahead. Unknown to almost everyone, this small-cap U.S. producer obtains close to Brent prices for its oil -- prices that are around a $16 to $17 per-barrel premium to West Texas Intermediate today. Evolution shares at $9 sell at a discount both to my current intrinsic value estimate of $13 and the potential for even greater value, but be careful not to pay much over today's price of the low $9s to obtain the best reward-to-risk odds. It's a good buy but not a screaming one. (I own shares.)

Medium term: Retaliation

Currently, both sides are fighting a war covertly, almost certainly picking off important players here and there through black ops. A military response would be next. To retaliate by bombing Jerusalem appears impossible because it would destroy a historic, sacred place to the Palestinians, and Iran would lose some support. Tel Aviv? Israeli ports? It's horrible and impossible to figure. But also remember that Israel would be -- certainly is -- prepared. It won't be napping. Nevertheless, broad worldwide market sell-offs would be inevitable. This would include stocks of publicly held companies with large operations in Israel. (Again, this is rationality, not politics talking.)

Cue Austin Powers: "Or would it?" It's impossible that an Israeli-based company of any size lacks a back-up plan for war, including both foreign facilities and double-secret-redundant date facilities in cloud servers around the world. That doesn't mean their stocks wouldn't be hurt -- perhaps for years. But the long-term business operations would likely continue. It may be time (c'mon, Tom, man up!) to buy them.

Shares of tip-top generic-drug producer Teva Pharmaceutical (NAS: TEVA) , also building a proprietary drug business, would almost certainly drop, but its worldwide manufacturing and R&D facilities would mean the contagion would not be fatal. It would be an attractive long-term buy.

Longer term: War and U.S. entry

Listening to the administration's pronouncements, the U.S. has almost no choice but to get involved if there's a war involving Israel. If this happens, the U.S. would have to once again up its military budget, though to what extent would be impossible to predict. This would lead to the kind of decisions made in the Iraq and Afghanistan wars -- more budget deficits without compensating cuts. The only possible solution this time will be inflation.

I repeat: All the debates about inflation will be off the table. There is no room left. Money will be printed and spent. Velocity -- the moving around of money that gives it a multiplier effect and is the sine qua non of inflation -- will no longer be held back, as today, but will increase.

Sure, in the shorter term, money would flow to U.S. Treasuries in a torrent that would make recent years look like a trickle from a leaky faucet and borrowing rates might actually fall -- is this possible where they are almost all negative in real terms? -- and keep government deficit funding cheap. But the odds of higher inflation would greatly increase, where today low monetary velocity has kept it from exploding.

Let's hope not one of these events comes to pass and that diplomacy is the victor. But also, let's carry water in the trunk -- these three and potentially four stocks -- for being stranded on a highway in Death Valley and hope we don't have to use it.

Article from Daily Finance