•10 Strange and Sneaky Supermarket Savings Strategies •Why We Hate to Love Walmart (and Why It Can Still Surprise Us) •What Would It Take to Pay Back Mom for All She Does?
Saturday, May 31, 2014
Friends With (Discount) Benefits: You Can Save on Almost Everything
Friday, May 30, 2014
Top Machinery Stocks To Watch For 2015
Top Machinery Stocks To Watch For 2015: CNH Industrial NV (CNHI)
CNH Industrial NV is a Netherlands-based company primarily engaged in the manufacture of heavy machinery and vehicles equipment. It divides its activities into four main businesses. The Agricultural Equipment offers agricultural equipment under the New Holland Agriculture, Case IH brands and the Steyr brand. The Construction Equipment produces excavators, bulldozers, backhoes, compactors and other construction equipment under the New Holland Construction and Case Construction Equipment brands. The Trucks & Commercial Vehicles manufactures trucks and a commercial vehicles, including buses, coaches and special vehicles under Iveco, Iveco Bus and Heuliez Bus brands, as well as it produces quarry and mining equipment through Iveco Astra, and fire fighting vehicles through the Iveco Magirus brand. The Powertrain offers transmission systems, engines for marine application and power generation through FPT Industrial brand. Advisors' Opinion:- [By Holly LaFon]
The largest detractor for the quarter was CNH Industrial (CNHI), a global agricultural and construction equipment manufacturer, which fell 11%. CNH released its nine-month results, which showed revenue growth of 0.6%, but the companys margins were adversely affected by Iveco, its trucks and commercial vehicles segment. Ivecos margins fell short of expectations due to tough pricing, high launch costs, negative mix and increases in bad debt provisions. Management maintains full-year guidance of 3-4% revenue growth. We believe improvements in the Iveco division will help CNH Industrial achieve its long-term margin targets.
- [By Lisa Levin]
CNH Industrial NV (NYSE: CNHI) shares tumbled 2.47% to reach a new 52-week low of $11.44. CNH Industrial reported an 11% drop in its third-quarter profit.
source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/top-! machinery-stocks-to-watch-for-2015.html
10 Best Integrated Utility Stocks To Invest In Right Now
10 Best Integrated Utility Stocks To Invest In Right Now: Charter Pacific Corporation Ltd (CHF)
Charter Pacific Corporation Limited is in the business of investments and the provision of corporate services. During the fiscal tear ended June 30, 2012 (fiscal 2012), the Company focused on development of its iron ore projects in Mauritania, maintained its holding in Monteray Mining Group Ltd to 30.36%, and maintained its investment in FarmWorks Australia Limited. The Company segments include corporate services, investments, share trading, and exploration and evaluation. Corporate services include provision of corporate services to other companies; Investments segment includes investment in listed and unlisted companies planned to deliver returns in through capital appreciation and/or interest on loan funds advanced. Share trading includes the purchase and sale of listed investment securities. Exploration and evaluation involves the exploration of iron ore permits. During the fiscal year ended June 30, 2012, the Company closed its Internet Protocol Television (IPTV) segment . Advisors' Opinion:- [By Chandan Dubey]
DatePrice/Share (CHF)SharesAmount08.08.20116.3812,57480,22208.08.20115.9715,00089,55010.08.20115.9945,00029,97218.08.20115.866,000383,10322.08.20115.410,00054,00022.08.20115.720,000114,500
source from USA Best Stocks:http://www.usabeststocks.com/10-best-integrated-utility-stocks-to-invest-in-right-now-2.html
Thursday, May 29, 2014
Mid-Morning Market Update: Markets Open Higher; FactSet Research Posts Downbeat Q4 Earnings
Following the market opening Tuesday, the Dow traded up 0.30 percent to 15,540.55 while the NASDAQ surged 0.33 percent to 3,730.07. The S&P also rose, gaining 0.29 percent to 1,702.52.
Top Headline
FactSet Research Systems (NYSE: FDS) reported a 5 percent rise in its fiscal fourth-quarter earnings. FactSet Research's quarterly profit surged to $51 million, or $1.16 per share, from $48.5 million, or $1.08 per share, in the year-ago period. Excluding one-time items, its adjusted earnings came in at $1.20 per share, versus analysts' estimates of $1.21 per share. Its revenue rose 5.6 percent to $219.3 million. FactSet Research had expected earnings of $1.18 to $1.21 per share on revenue of $218 million to $221 million. For the current quarter, FactSet Research expects earnings of $1.21 to $1.24 per share on revenue of $222 million to $225 million. However, analysts were projecting a profit of $1.23 per share on revenue of $224 million.
Equities Trading UP
Repros Therapeutics (NASDAQ: RPRX) shot up 29.82 percent to $27.60 after the company announced topline results from both the second pivotal efficacy study as well as the 6 month safety study of Androxal®. Shares of Kythera Biopharmaceuticals (NASDAQ: KYTH) got a boost, shooting up 26.04 percent to $42.26 after the company reported positive ATX-101 top line phase III trial results for the reduction of submental fat. Aeropostale (NYSE: ARO) was also up, gaining 16.75 percent to $10.05 after private equity firm Sycamore Partners reported that it had bought a 7.96 percent stake in the company.
Equities Trading DOWN
Shares of Outerwall (NASDAQ: OUTR) were down 16.03 percent to $47.00 after the company lowered its forecast for the third quarter and full year. Werner Enterprises (NASDAQ: WERN) shares tumbled 4.71 percent to $23.26 after the company issued a weak third-quarter profit forecast. Bank of America downgraded the stock from Buy to Neutral. Pandora Media (NYSE: P) down, falling 1.71 percent to $23.58 as the company announced its plans to sell 14 million shares of common stock, including 4 million shares from current stockholders.
Commodities
In commodity news, oil traded down 0.61 percent to $105.94, while gold traded down 0.35 percent to $1,313.20. Silver traded down 0.75 percent Tuesday to $21.85, while copper rose 0.39 percent to $3.23.
Euro zone
European shares were mixed today. The Spanish Ibex Index dropped 0.04 percent, while Italy's FTSE MIB Index rose 0.10 percent. Meanwhile, the German DAX dropped 0.04 percent and the French CAC 40 rose 0.04 percent while U.K. shares fell 0.18 percent.
Economics
The ICSC-Goldman Sachs store sales index dropped 1.6 percent in the week ended Saturday from the previous week. U.S. consumer prices increased 0.1 percent in August, while the core CPI also rose 0.1 percent. However, economists were expecting a 0.2 percent rise in both prices. The Johnson Redbook Retail Sales Index fell 0.3 percent in the first two weeks of September versus August. The NAHB housing market index remained at 58 in September. However, economists were expecting a reading of 58 in the month. August's reading was also revised to 58 versus an earlier estimate of 59. The Federal Open Market Committee begins its two-day policy meeting today. The Treasury is set to auction 4-and 52-week bills.
Wednesday, May 28, 2014
Making Bonus Depreciation Permanent to Be Debated by House Panel
The House Committee on Ways and Means plans to mark up on Thursday H.R. 4718, to provide a permanent extension of bonus depreciation, as well as other tax extenders that deal with retirement planning and charitable giving.
In the absence of comprehensive tax reform, the Tax Foundation argues that “a permanent extension” of the bonus depreciation “is the best option to spur investment, lift wages, grow the economy, create jobs and increase federal revenue.”
The Tax Foundation, a nonpartisan think tank, says that bonus deprecation would have a large impact on the economy and, according to the foundation’s analysis, be a revenue gainer in the long term in terms of:
The committee also plans to mark up on Thursday the following tax extenders that deal with retirement planning and charitable giving:
HR 4619, “to make permanent the rule allowing certain tax-free distributions from individual retirement accounts for charitable purposes”; HR 4719, “to permanently extend and expand the charitable deduction for contributions of food inventory”; HR 3134, “Charitable Giving Extension Act”; HR 4691, “to modify the tax rate for excise tax on investment income of private foundations.”
-- Check out Top 9 Biggest Tax Scams of 2013 on ThinkAdvisor
How to Invest in Commodities—and Why You Should
For the first time since 2010, commodities are showing signs of life. So far this year, a diversified package of commodities is outpacing both the stock and bond markets. But if you hold some of these basic materials in your portfolio—or are tempted to get back in now—you'll want to be careful about how you ride the turnaround.
See Also: Watch Out for Overpriced Stocks
Beyond improving performance, there are two good reasons to hold some commodities—or, to be more precise, investments that track the price of commodities. Diversification is one. Research shows that commodities typically don't move in sync with stocks and bonds, and that's holding true now. Year to date, the Dow Jones-UBS Commodity index, which tracks 20 commodity markets, including corn, gold and oil, has gained 7.9%, whipping the return of Standard & Poor's 500-stock index by 5.3 percentage points and the Barclays U.S. Aggregate Bond index by 4.5 percentage points (all returns are through May 22).
Commodities can also act as a type of insurance policy against sudden spikes in the price of goods. Inflation in the U.S. has been tame lately, but severe weather and political events have helped push up prices of certain raw materials. For example, the Indonesian government's decision in January to halt nickel-ore exports propelled the price of the metal (which is used to make stainless steel) to a gain of more than 40% so far this year. And a drought in Brazil, the world's largest coffee producer, has helped lift the price of arabica coffee by more than 80% since November. Some commodities also serve as safe havens against geopolitical uncertainties. From the beginning of the year through mid March, when the Russia-Ukraine standoff reached a crescendo, gold climbed 13%.
But commodity prices are notoriously volatile, and other trends could serve to keep a limit on prices and maybe even drive them down. One development to watch is slowing growth in China, a major importer of raw materials. Gold in particular is known for having long boom and bust cycles, and as the U.S. economy improves, fewer investors may seek out the yellow metal as a safe haven. After rallying in the first ten weeks of 2014, gold, at $1,294 per ounce, has fallen 7% since mid-March. Paul Christopher, chief international strategist at Wells Fargo Advisors, believes the price could tumble to as low as $1,200 by the end of the year. "We've been advising clients to start unloading," he says.
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All of which suggests the road ahead for commodities could be bumpy. Chris Philips, a senior analyst in the investment strategy group at Vanguard, says it's a good idea to keep 5% to 10% of your portfolio in commodities—but only if you're willing to hold on for the long term. That may be easier to do with a mutual fund or exchange-traded fund that invests across multiple commodities markets. If you bet on a single commodity, you stand a good chance of getting spooked and selling at the wrong time. Recently, Vanguard studied the gains investors earned in SPDR Gold Shares (GLD), the largest ETF that tracks the price of gold. Vanguard found that from November 2004 (when the fund launched) through February of this year, investors earned an average of 3.2 percentage points per year less than the fund's stated return, mostly because of poor timing decisions. (Investors tended to bail out after prices fell and buy in long after a rebound had started.)
Four Great Commodities Investments to ConsiderMost commodities funds and ETFs own futures contracts (an agreement to buy or sell a commodity for a set price at a future date). Futures contracts are easier to own than the physical commodity, which must be stored somewhere (and perhaps fed as well). But because of quirks in futures trading, fund performance does not always match that of the underlying commodity. To get around that, some funds buy contracts with varying maturities (rather than just roll over contracts from month to month as they expire, which is what usually happens).
Tuesday, May 27, 2014
Top Analyst Upgrades and Stocks to Buy: E*Trade, KeyCorp, Ericsson and More
Investors and traders alike often look for new research ideas that can lead to higher income and profits. 24/7 Wall St. reviews dozens of new analyst research calls each morning. Some turn out to be stocks to buy and others end up being stocks to sell. We have broken out the positive analyst calls, and these are some of Friday’s top analyst upgrades, initiations and positive analyst research calls seen from Wall Street.
Constellation Brands Inc. (NYSE: STZ) was raised to Buy from Neutral at BofA/Merrill Lynch.
Diageo PLC (NYSE: DEO) was raised to Buy from Neutral at Citigroup.
E*Trade Financial Corp. (NASDAQ: ETFC) was raised to Buy from Neutral with a new $19 price target at Goldman Sachs; Credit Suisse also raised its price target to $14.50.
Ericsson (NASDAQ: ERIC) was raised to Outperform from Neutral by Credit Suisse.
Five Below Inc. (NASDAQ: FIVE) was raised to Buy from Neutral at UBS
KeyCorp (NYSE: KEY) was raised to Outperform from Neutral at Credit Suisse.
Oasis Petroleum Inc. (NYSE: OAS) was raised to Buy from Hold with a $55 price target at Deutsche Bank and was raised to Buy from Neutral with a $53 price target at SunTrust.
QEP Midstream Partners L.P. (NYSE: QEPM) was started as Buy at Janney Capital, and note that four other firms started coverage earlier this week.
ServiceNow Inc. (NYSE: NOW) was started as Buy with a $55 price target at Canaccord Genuity.
Siemens A.G. (NYSE: SI) was raised Buy from Hold in overseas coverage by Societe Generale.
Splunk Inc. (NASDAQ: SPLK) was started as Buy with a $62 price target at Canaccord Genuity.
Stryker Corp. (NYSE: SYK) was raised to Outperform from Neutral by Credit Suisse.
SunTrust Banks Inc. (NYSE: STI) was raised to Buy from Hold with a new $39 price target at Deutsche Bank.
T-Mobile US Inc. (NYSE: TMUS) was raised to Outperform from Market Perform at William Blair.
Monday, May 26, 2014
Intuit Inc. (INTU) Q3 Earnings Preview: Nobody Likes Tax Season
Intuit Inc. (NASDAQ:INTU) will announce its third-quarter, fiscal year 2014 financial results on May 20 following the close of market. On the same day, Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time.
Wall Street anticipates that application software maker will earn $3.50 per share for the quarter, which is $0.53 more than last year's profit of $2.97 per share. iStock expects INTU to top Wall Street's consensus number, the iEstimate is $3.54.
Sales, like earnings and taxes, are expected to trend climb, increasing 9.2% year-over-year (YoY). Intuit's consensus revenue estimate for Q3 is $2.38 billion, which is more than last year's $2.18 billion.
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Intuit Inc. (Intuit) is a provider of business and financial management solutions for small businesses, consumers, accounting professionals and financial institutions. The Company organizes its portfolio of businesses into four principal categories: Small Business Group, Tax, Financial Services and Other Businesses.
Business owners might be familiar with the company because of QuickBooks and individual taxpayers due to TurboTax.
The third quarter is lopsided for Intuit as it includes tax-season, which makes Q3 by far the most important earnings announcement of the year for Intuit. To give you a sense of how important, the full-year 2014 consensus, earnings-per-share (EPS) estimate is $3.58, of which $3.50 is expected to be announced on Tuesday afternoon. That's 97.78% of profit for the entire year.
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Considering the supersized importance of the quarter, iStock looked at the previous four third quarter earnings announcements to see if there are any observable trends. Intuit delivered four straight bullish surprises for the emerald month earning $0.02, $0.04, $0.04, and $0.07 more than expected, from the most recent backwards.
Despite getting by Wall Street's outlook, shares backpedalled three of the last four quarter, falling -3.3%, gaining 1.2%, losing -2.8% and -3.50%; again, from the most recent.
Now that we have a sense of what might happen to the stock price, let's examine some data to see what earnings might look like versus the consensus. According to IRS.gov, the number of Self-prepared E-filings (electronic filings) increased 6.5% in 2014 relative to 2013. Leaders like TurboTax tend to outperform the group as a whole.
We also see YoY improvement for Google Trends for the keywords "QuickBooks" as search volume intensity (SVI) moved higher by 5.3%. However, "TurboTax" was flat in 2014 compared to 2013.
Overall: IRS data on E-Filers, the iEstimate, and Intuit Inc.'s (NASDAQ:INTU) third quarter history suggest another bullish surprise is in store; however, Google Trends hint that top line numbers could be a little disappointing, which would make for another poor Q3 stock outing.
Saturday, May 24, 2014
Hawaii raises minimum wage to $10.10 per hour
Gov. Neil Abercrombie signed the minimum wage bill into law in a ceremony Friday, marking the first time Hawaii's minimum wage will be raised from $7.25 since 2007.
The increase will be phased in gradually over four years. Abercrombie said he wished the hike was coming quicker, but "we're swimming in the water that we're in."
"I always thought it's not a minimum wage, it's a survival wage," Abercrombie said. "And in today's world, that minimum wage is not a survival wage, certainly in Hawaii."
Hawaii is the third state this year to increase its minimum wage to $10.10 per hour, following Connecticut and Maryland, said Jack Temple, policy analyst for the National Employment Law Project.
Supporters say higher wages will help working families. Living costs are high in Hawaii because nearly everything from apples to air fresheners is shipped to the island chain.
"Money put into the hands of Hawaii's working people will get spent, it will increase the economic activity in the state," said Rep. Mark Nakashima, a Big Island Democrat.
Some had argued the change will hurt small businesses and that managers may lay off workers or hire fewer people. Abercrombie said he has heard the same argument since the 1960s.
"The take-home wage compared to the cost of living has steadily gone down," Abercrombie said. "This country is about moving up."
Sen. Clayton Hee, a Democrat who represents Kaneohe, said he wished the resulting minimum wage hike was better, but lawmakers had to reach a compromise.
"I grew up thinking meat came from a can, not a cow...because that's all we could afford," Hee said. "That's what local people do. We make ends meet."
Employers with tipped employees can get a credit of 50 cents per hour starting in 2015 and 75 cents per hour in 2016 for those workers who! earn $7 more per hour than the minimum wage.
"Hawaii's move to do that really sets it apart," Temple said. "For the vast majority of tipped workers, employers will have to pay the minimum wage."
There are seven states that have no tip credit, meaning that tipped workers can keep all of their wages and tips without having a tip credit taken out. But their laws have been on the books for decades, Temple said. Hawaii is the first state in recent history to enact a change to the tip credit that preserves the full minimum wage for the majority of workers, he said.
Thursday, May 22, 2014
Should You Jump on the AT&T-DirecTV Merger?
Popular Posts: 2 Downtrodden Stocks to Buy Today3 High-Yielders That Make MLPs a SnapShould You Jump on the AT&T-DirecTV Merger? Recent Posts: Should You Jump on the AT&T-DirecTV Merger? 2 Downtrodden Stocks to Buy Today 3 High-Yielders That Make MLPs a Snap View All Posts Sometimes the most profitable trend changes in the investment world take place while almost everybody is looking the other way. I’m beginning to think that’s what may be happening right now with the merger of AT&T (T) and DirecTV (DTV).
For more than a decade (really, all the way back to the collapse of the technology-media-telecom bubble in 2000), telecoms like T and DTV have been market wallflowers. Most have paid decent dividends, but price gains have been singularly lacking, including for T stock and DTV stock.
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And yet, we’ve had two pieces of news in the past week suggesting that their fortunes may be turning for the better.
First, and most dramatic, AT&T has launched a $48.5 billion takeover bid for satellite TV provider DirecTV. Most of the Wall Street commentary around this deal has centered on the benefits to AT&T of having a nationwide video footprint to go with T’s well-established position in cellular (essentially, the company enjoys a duopoly with Verizon (VZ)).
I agree that the merger will strengthen AT&T’s hand from a marketing standpoint. However, I’m even more impressed with the financial engineering that went into the transaction.
In essence, AT&T is taking advantage of today’s low borrowing costs to buy a block of assets that will generate cash flow far in excess of 1.) future capital spending at DirecTV and 2.) the interest expense of the deal. Result: AT&T will have more cash left over for dividends and buybacks of T stock.
Readers who have been with me awhile know that I’ve expressed concern that T’s dividend isn’t as well covered out of free cash flow as Verizon’s is. This transaction takes a large step toward fixing that problem. By 2016, AT&T’s free cash flow should outweigh the dividend by a comfortable 1.8X.
Not Picking Up the Call for T StockEven though I applaud the DirecTV deal (and yes, I do own AT&T in personal accounts), I must admit that Verizon remains my favorite domestic telco. I’ve explained the reasons before: dominant market share in wireless; enormous free cash flow covering the dividend an estimated 2.7 times this year.
But I’ve got another reason now, which you may find more persuasive than all my previous arguments. Last Friday, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) disclosed that it had built an 11-million-share stake in VZ as of March 31. The shares are currently valued at around $535 million.
Most likely, it was one of Buffett’s lieutenants, Todd Combs or Ted Weschler, rather than the master himself, who decided to purchase the stock. Nonetheless, we know that both of these guys are excellent stock pickers — good enough to get hired by Buffett to run multi-billion-dollar chunks of Berkshire’s portfolio.
To me, that’s all the stamp of approval I need to take a long look at Verizon stock.
Richard Band's Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won nine Best Financial Advisory awards from the Specialized Information Publishers Foundation.
Tuesday, May 20, 2014
FINRA ‘Aggressively’ Seeking BD Feedback on CARDS: Ketchum
Richard Ketchum, chairman and CEO of the Financial Industry Regulatory Authority, said Monday that while the self-regulator was moving ahead with its controversial Comprehensive Automated Risk Data System (CARDS) as it’s “the next step—and big leap forward—in the evolution” of FINRA’s risk-based regulatory programs, FINRA has created broker-dealer working groups and is "aggressively" seeking BD feedback to “get this right.”
Noting the more than 800 comment letters that FINRA received on its CARDS plan, Ketchum told the 1,000 attendees at FINRA’s annual conference in Washington that “your input is critical to us getting CARDS right. By giving us your feedback, you have an opportunity to contribute to the best solution possible. Please help us shape this.”
However, Ketchum said that while FINRA is “looking closely” at the cost and operational concerns that broker-dealers have raised, many commenters’ concerns “seem to me to be a tad one-sided.”
CARDS, Ketchum argued, “has the potential to be one of the most important investor protection tools to emerge in recent years,” and “strongly urged” BDs to view CARDS “through the broader lens of investor protection, rather than through the more narrow lens of how it affects your firm.”
That being said, Ketchum said that FINRA recognized “that costs tied to CARDS are a real issue for firms,” stating that’s FINRA has created a CARDS “pilot” and is talking to BDs about the “real, bottom-line impact” it may have on their firms.
CARDS would be a rule-based program that would allow FINRA to collect — on a standardized, automated and regular basis — account information, as well as account activity and security identification information that a firm maintains as part of its books and records.
CARDS, Ketchum said during his remarks, “will allow us to collect and manage data from firms in such a way that we can quickly identify trends and product concentrations that are harmful to investors and take swift, responsive action.”
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The automated system would gather data from broker-dealers and clearing firms that the regulator can then use to spot potential problems with sales practices of individual BDs, branches and reps prior to onsite FINRA exams.
Indeed, Hardeep Walia, co-founder and CEO of Motif Investing and a member of both FINRA's Small-Firm Advisory Board and its Technology Advisory Committee, noted on a compliance panel after Ketchum’s speech that “there’s a lot of good that can come out of CARDS,” adding that “the power of CARDS is that it’s the next generation of regulation, which is technology.”
If “we can get it right and get safeguards around it, it will be the next-gen form of regulation” that other regulators can look to, he said.
Michelle Oroschakoff, chief risk officer of LPL Financial, noted on a separate panel on the top 10 regulatory issues that "if done right," CARDS "is going to be terrific" for the markets and for investors, allowing "more targeted [exam] sweeps." However, she said that advisors were already getting questions from their clients about CARDS regarding data privacy issues and that the "investing public is not as supportive of" CARDS as may have been thought. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ BDs’ feedback has already changed the original CARDS plan, which was issued as a concept release.
After pushback, FINRA said in early March that it would modify its original approach by not collecting sensitive personally identifying information (PII) from the data it receives from CARDS, a point that Ketchum noted during his Monday remarks.
“We clarified that PII is not part of the proposal, so CARDS data will not include account names, addresses, tax IDs or Social Security numbers,” Ketchum said. “Thus, customer accounts will not be linked across firms. We know that CARDS will be effective without collecting this information.”
Ketchum said that the self-regulator has also heard BDs' concerns about the security “of such a large database.” However, Ketchum said that FINRA believes the security risk “is very low — and dispute[s] that CARDS could create systemic risk.”
Given that FINRA will not be collecting personally identifiable information, he said, “the chance that anyone could exploit what is, in effect, anonymous data for nefarious purposes is very small.”
But Paul Tolley, chief compliance officer of Commonwealth Financial Network, noted on a panel discussion about the top 10 regulatory issues that he's "not a fan" of CARDS, particularly due to its "privacy" concerns. "The sheer volume" of data in "such a huge database," if breached, could be a problem, he said. "There are some pretty sophisticated systems that have been breached," noting that such a breach of CARDS could spark market manipulation.
CARDS will also be launched “in stages,” Ketchum said, and the CARDS plan has been changed to allow firms to choose how they send data to FINRA. “You can send it to us through a clearing firm, you can send it to us through a service bureau or you can send it to us directly," he said. "It’s up to you.”
Firms raised concerns about having to send the data through clearing firms, with many BDs worrying about “the cost implications of working with a clearing firm, especially since nearly 2,000 firms don’t currently have clearing firm relationships,” Ketchum said.
While FINRA will provide firms with a “standardized file specification” for transmitting data, FINRA plans to permit “variability in the format of data related to suitability,” Ketchum said, which “stems from comments that introducing firms, in particular, use different terminology with respect to information about their customers.”
To address concerns about “direct business data and how the clearing firms would handle that data,” Ketchum noted that “in its initial phases, CARDS will not require firms to submit information about products not held at the firm,” such as variable annuities, direct participation programs and direct mutual funds. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ In a later phase, however, Ketchum said that FINRA “may collect this kind of product information through CARDS, but that collection would be pursuant to additional rulemaking — which would provide us with ample opportunity to continue our dialogue and arrive at workable solutions.”
Ketchum also addressed the question of why FINRA doesn’t first tackle implementing the consolidated audit trail (CAT) before CARDS.
The short answer, Ketchum said: “Unlike CARDS, CAT will not contain the kind of critical information about customer risk appetites, investment objectives, cash movements, margin requirements and position data that we need for our sales practice reviews,” he said. “Moreover, CAT needs to function on a near real-time basis. CARDS does not. To have it do so would be light years more costly than our current proposal.”
Why Teens Need a Summer Job
This summer's job scene for teens is shaping up to be a mixed bag. In its annual outlook, Challenger, Gray & Christmas, a global outplacement firm, expects employment among 16- to 19-year-olds to grow by about 1.36 million. That's roughly the same number of teens who found jobs last year, but 3% fewer than were added to summer payrolls in 2012.
SEE ALSO: 6 Ways College Students Can Earn Extra CashWhat's more, the participation rate of teens in the labor force, which tends to peak during summer break, has been plunging. It reached a record high of 71.8% in July 1978, reports Challenger. But by this spring, it had fallen to a near-record low of 31.7%, and the unemployment rate for teens topped 20%.
The state of the labor market in general is partially to blame. Teens are competing with recent college grads, adults who are having trouble finding higher-paying jobs and retirees looking to supplement their income. Company CEO John Challenger notes that retail stores are hiring fewer workers as more shopping moves online. Other traditional employers of teens -- fast-food joints, restaurants and movie theaters, for example -- are also cutting back.
It's also true, says Challenger, that lots of teens have dropped out of the summer labor force to attend summer school, participate in sports or other extracurricular activities, or volunteer.
Life lessons. That's all well and good, but I can't help wondering whether teens are missing out on valuable life lessons by not holding down paying jobs. Showing up on time, taking responsibility, getting along with co-workers and supervisors, earning your own money -- and learning how to manage it -- are all critical skills, just as much as knowing how to program a computer or write a literate report.
In fact, finding a job is a skill in itself. I agree with Challenger when he says that kids need to "get out from behind the computer" and not rely as heavily on online job boards. "Many mom-and-pop stores do not advertise job openings on the Internet," he says, "nor do most families looking for babysitters, lawn mowers or house cleaners."
Based on my own experience hiring magazine staff, I always counsel young people to make personal contact whenever possible and to follow the classic advice of Mr. Miyagi in the movie The Karate Kid, when he tells Daniel always to look an opponent in the eye. For more advice, see Job-Hunting Tips for New Grads and . How Students Can Improve Their Chances of Getting a Job.
Building skills. Of course, summer extracurricular activities can be valuable. Playing sports teaches teamwork. Volunteering is a plus if you're working in an area that's related to your field of interest, says Paul McDonald, senior executive director of Robert Half International, a specialized staffing firm with offices worldwide. "It's all about building your resume," says McDonald.
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Regardless of their major, college students looking to build a resume for the full-time job market should be learning technical skills -- Power Point and Excel, at a minimum -- as well as so-called soft skills, such as how to listen, write and think critically. "Knowing how to make a presentation itself sets people apart," says McDonald.
Despite the so-so labor market, top students with the right skills sometimes get multiple offers, both for summer work and for permanent jobs, says McDonald. If you're fortunate enough to find yourself in that position, he advises that you handle the situation diplomatically. When you get the first offer, be upfront; thank the employer and say you're waiting to hear from others, if that's the case. But be prepared to give an answer within two to four weeks.
And if you've accepted a job that's related to your field, don't change your mind if something else comes along. That can create ill will, and you don't want to burn any bridges. Says McDonald, "If your decision made sense, stick with it."
Sunday, May 18, 2014
Top 5 Forestry Stocks To Own Right Now
In the following video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss a balanced approach to valuing bank equities.
David compares Bank of America's (NYSE: BAC ) relatively cheap stock price and current low returns on equity with US Bancorp (NYSE: USB ) , a stock currently trading at a much higher valuation compared to tangible book value.
David also explains how Citigroup (NYSE: C ) and Bank of America's current low valuations may represent a longer-term opportunity for investors, and he looks at Wells Fargo (NYSE: WFC ) as an example of how a bank stock might provide great returns to investors in the future, despite a relatively high current valuation.
With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help you figure out whether US Bancorp is a buy today, you can read our premium research report on the company. Click here now for instant access!
Top 5 Forestry Stocks To Own Right Now: Forbes Energy Services Ltd (FES)
Forbes Energy Services Ltd. (FES Ltd) is an independent oilfield services contractor that provides a range of well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, and tubing testing. FES Ltd operates in two segments: well servicing and fluid logistics and other. Its operations are concentrated in the onshore oil and natural gas producing regions of Texas, with additional locations in Mississippi, in Pennsylvania and, prior to the disposition of its Mexican assets in January 2012, which is discussed below, in Mexico. In January 2012, the Company sold its assets located in Mexico, as well as its equity interests in Forbes Energy Services Mexico Servicios de Personal, S. de R.L. de C.V. Advisors' Opinion:- [By CRWE]
Forbes Energy Services Ltd. (NASDAQ:FES), a leader in well servicing and fluid logistics management in the oilfield services industry, will participate in the GHS 100 Energy Conference being held June 25-26, 2012, at the Intercontinental Hotel in San Francisco.
Top 5 Forestry Stocks To Own Right Now: Nordion Inc. (NDZ)
Nordion Inc., a health science company, provides various products and services for the prevention, diagnosis, and treatment of diseases worldwide. The company operates in two segments, Sterilization Technologies and Medical Isotopes. The Sterilization Technologies segment offers Cobalt-60, a radioactive metal that emits radiation and sterilizes items by destroying contaminating micro-organisms; and dosimetry and professional services, as well as designs, constructs, and maintains commercial gamma sterilization systems. The Medical Isotopes segment provides various products that are used in the diagnosis and treatment of diseases, including cardiac and neurological conditions, and various types of cancer. It offers Molybdenum-99, which decays into Technetium-99, a diagnostic that is used in nuclear medical procedures; Xenon-133 used in lung scans; Iodine-131 to treat hyperthyroidism, thyroid cancer, and non-Hodgkin�s lymphoma; Iodine-125 to treat prostate cancer; and Yttri um-90 to treat liver cancer and non-Hodgkin�s lymphoma. This segment also provides cyclotron isotopes, such as Iodine-123 to diagnose thyroid disease; Thallium-201 to diagnose and assess risk of coronary artery heart disease; Palladium-103 for treating prostate cancer; Strontium-82 for cardiac imaging; and Indium-111 and Gallium-67 to diagnose cancer, as well as offers radiopharmaceutical and contract manufacturing services. Nordion Inc. serves radiopharmaceutical and pharmaceutical manufacturers, biotechnology companies, manufacturers of medical supplies and devices, contract sterilizers, hospitals, and academic and government institutions, as well as to food and consumer goods industries. The company was formerly known as MDS Inc. and changed its name to Nordion Inc. in November 2010. Nordion Inc. was founded in 1946 and is headquartered in Ottawa, Canada.
Advisors' Opinion:- [By Jake L'Ecuyer]
Leading and Lagging Sectors
Monday morning, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Nordion (NYSE: NDZ) and Pacira Pharmaceuticals (NASDAQ: PCRX). Utilities sector rose by just 0.19 percent in the US market today. - [By Jake L'Ecuyer]
Leading and Lagging Sectors
Monday morning, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Nordion (NYSE: NDZ) and Insmed (NASDAQ: INSM).
Best Warren Buffett Companies To Buy For 2015: BRF SA (BRFS)
BRF - Brasil Foods S.A. (BRF), incorporated on August 18, 1934, is a food company, which focuses on the production and sale of poultry, pork, beef cuts, milk, dairy products and processed food products under several brands. The Company�� processed products include marinated, frozen, whole and cut Chester rooster and turkey meats, specialty meats, frozen processed meats, frozen prepared entrees, portioned products and sliced products. It also sells margarine, juices, soy products, animal feed, fresh pasta, sweet specialties and sandwiches. During the year ended December 31, 2010, it launched 333 new products, including Meu Menu (My Menu) portfolio, which is targeted at single people.
Poultry
The Company produces frozen whole and cut poultries, partridges and quail. During 2010, it sold 1,895 thousand tons of frozen chicken and other poultry products. During 2010, it produced 1,694 million day-old chicks, including chickens, Chester roosters, turkeys, partridge and quail. It hatches these eggs in its 25 hatcheries. As of December 31, 2010, it had a fully automated slaughtering capacity of 31.2 million heads of poultry per week.
Pork and Beef
The Company produces frozen pork and beef cuts, such as loins and ribs, and whole carcasses. During 2010, it sold 427 thousand tons of pork and beef cuts. Iits sales of pork cuts are to its export markets. As of December 31, 2010, it had a beef slaughtering capacity of 1,797 heads per week.
Milk
The Company produces pasteurized and ultra-high temperature (UHT) milk, which it sells in its domestic market. During 2010, it sold 873 thousand tons of pasteurized and UHT milk. It produces dairy products in 15 plants. It receives milk from a network of over 11,000 milk producers in more than 553 cities.
Processed Food Products
The Company produces processed foods, such as marinated, frozen chicken, Chester rooster and turkey meat, specialty meats, frozen processed foo! ds, frozen prepared entrees, dairy products, portioned products and sliced products. During 2010, it sold 2,472 thousand tons of processed foods. It processes pork to produce specialty meats, such as sausages, ham products, bologna, frankfurters, salamis, bacon and cold meats. It also processes chicken and other poultry to produce specialty meats, such as chicken sausages, chicken hot dogs and chicken bologna. It produces a range of frozen processed poultry, beef and pork products, including hamburgers, steaks, breaded meat products, kibes, meatballs and ready-to-eat snacks. It also produces soy-based vegetarian products, such as hamburgers and breaded products. It produces marinated and seasoned chickens, roosters and turkeys.
The Company produces several varieties of lasagna and pizza. It produces the meat used in these products and buys other raw materials in the domestic market, except for the durum flour used to make the noodles for the lasagna, which it imports. It sells a range of frozen vegetables, such as broccoli, cauliflower, peas, French beans, French fries and cassava fries, through its Escolha Saudavel line of products. It produces a range of pies and pastries, such as chicken and heart-of-palm pies and lime pies. It produces the meat, sauces and toppings used in its pies and pastries, and it purchases other raw materials, such as heart-of-palm, lime and other fillings from third parties.
Other
The Company produces animal feed mainly to feed poultry and hogs raised by it. It also sells a portion of its animal feed production to its integrated outgrowers or to unaffiliated customers. It produces a range of soy-based products, including soy meal and refined soy flour.
The Company competes with Sadia, Aurora, Marfig, Danone, Nestle, Paulista, Frangosul, Plamplona and Aurora.
Advisors' Opinion:- [By Jon C. Ogg]
BRF S.A. (NYSE: BRFS) should be safe on the surface as a meat-producing and dairy giant. Apparently being defensive doesn’t help either. At $18.50, its 52-week range is $18.34 to $26.35. This ADR is down just over 10% so far in 2014.
- [By MONEYMORNING.COM]
And with very quick gains of 9% in BRF SA (NYSE ADR: BRFS), 5.2% in South American agricultural play Adecoagro SA (NYSE: AGRO) and 1.6% in high-tech agribusiness player Neogen Corp. (Nasdaq: NEOG), we're doing well with our plays on (pockets of) accelerating U.S. inflation.
Top 5 Forestry Stocks To Own Right Now: Emerge Energy Services LP (EMES)
Emerge Energy Services LP, incorporated on April 27, 2012, owns, operates, acquires and develops a diversified portfolio of energy service assets. The Company operates in two segments: Sand segment, and Fuel Processing and Distribution segment. Sand segment consists of mining and processing frac sand, a component used in hydraulic fracturing of oil and natural gas wells. The Company�� frac sand facilities are located in New Auburn, Wisconsin, Barron County, Wisconsin and Kosse, Texas. Fuel Processing and Distribution segment consists of acquiring, processing and separating the transmix that results when multiple types of refined petroleum products are transported sequentially through a pipeline. The Company�� Fuel Processing and Distribution segment consists of its operations in the Dallas-Fort Worth metropolitan area and Birmingham, Alabama.
Sand Segment
The Company�� Wisconsin sand reserves at its New Auburn and Barron facilities provide the Company access to a range of sand that meets or exceeds all API specifications and includes a concentration of 16/30, 20/40 and 30/50 mesh sands. The Company�� New Auburn dry plant facility has a rated production capacity of 4,200 tons per day, or roughly 40 rail cars, and has on-site rail car loading facilities capable of loading up to approximately 10,000 tons of frac sand into rail cars per day. The Company also has 4.5 miles of existing rail track that connects its facility to the Union Pacific rail line and provides the Company with shipping access to all of the shale basins in the United States and Canada with direct access to areas of oil production in Texas, Oklahoma, Colorado and the western United States. The Company�� Barron facility consists of a sand mine and a wet plant on land. This facility has a rated production capacity of 8,800 tons per day, or roughly 80 rail cars, and has on-site rail car loading facilities capable of loading up to approximately 10,000 tons of frac sand into rail cars per day. The Company ! also mine frac sand at its facility in Kosse, Texas that is processed into a high-quality, 100 mesh frac sand, generally used in dry gas drilling applications.
Fuel Processing and Distribution Segment
The transmix industry consists of businesses that process and separate transportation mixture, which is the liquid interface, or fuel mixture, that forms when multiple types of petroleum products are transported sequentially through a pipeline. Pipeline operators send large batches of different fuel products (such as gasoline, diesel and jet fuel) through the same pipeline, in sequence, to receiving terminals. The Company�� Fuel Processing and Distribution segment consists of its facilities in the Dallas-Fort Worth metropolitan area and in Birmingham, Alabama, which are operated by Direct Fuels and AEC, respectively.
Advisors' Opinion:- [By Robert Rapier] There were a half a dozen initial public offerings (IPOs) by master limited partnerships in the first half of the year, and all but one are now in the green while one has nearly doubled in value.
The first MLP IPO of 2013 debuted on Jan. 15. USA Compression Partners (NYSE: USAC), which I mentioned in last week’s issue, provides compression services for the oil and gas industry. Units have advanced 36 percent since the IPO, and at the current price yield 7.3 percent.
The day after the USA Compression Partners IPO, CVR Refining (NYSE: CVRR) made its debut. CVRR was spun off from CVR Energy (NYSE: CVI), and both companies remain majority-owned by Carl Icahn. CVR Refining’s primary assets are two refineries located in Kansas and Oklahoma with a combined processing capacity of approximately 185,000 barrels per day (bpd). These refineries are strategically located near the major Cushing, Oklahoma shipment and storage hub, with easy access to discounted feedstock from the nearby Permian basin, as well as the Bakken shale and Canadian oil sands.
But refiners have struggled with diminished margins in 2013 because of a much lower Brent-WTI differential. After the recently concluded second quarter, CVRR declared a distribution of $1.35 per unit, bringing its per-unit distributions for the first half of the year to $2.93. At the same time, CVR Refining lowered its annual distribution target to a range of $4.10 to $4.80 per unit. This was lower than the outlook issued in March, when it foresaw annual distributions of $5.50 to $6.50. CVRR units slid on the news, and are presently trading slightly below the $25 IPO price. The lower end of the revised forecast implies distributions of $1.17 per unit in the second half of the year, for a forward annualized yield of 10 percent based on the recent $23.50 unit price.
SunCoke Energy Partners (NYSE: SXCP) was the third IPO to debut during a very busy third week of January. SXCP is the first M
Top 5 Forestry Stocks To Own Right Now: ZIOPHARM Oncology Inc(ZIOP)
ZIOPHARM Oncology, Inc., a biopharmaceutical company, engages in the development and commercialization of small molecule and synthetic biology approaches to cancer therapies in the United States. The company's clinical programs include Palifosfamide, a DNA cross-linker, which is in a phase III clinical trial for the treatment of metastatic soft tissue sarcoma in the front-line setting. ZIOPHARM is also developing Palifosfamide in combination with etoposide and carboplatin in phase I clinical trial to determine safety for initiating a pivotal, adaptive phase III trial in front-line. In addition, the company, in partnership with Intrexon Corporation, is developing DNA-based therapeutics (synthetic biology) that include two phase 1 clinical-stage product candidates, both of which are DNA IL-12 to be turned on/off by an oral activator ligand. Further, it is developing Indibulin, an oral tubulin binding agent, which is in Phase 1/2 for metastatic breast cancer; and Darinaparsin , a mitochondrial- and hedgehog-targeted agent that is in a solid tumor phase I study with oral administration and has been developed intravenously for the treatment of relapsed peripheral T-cell lymphoma. The company was founded in 2003 and is headquartered in New York City, New York.
Advisors' Opinion:- [By James E. Brumley]
Cancer drug investors who have been disappointed in recent results from shares of Clovis Oncology Inc. (NASDAQ:CLVS) or Nuvilex Inc. (OTCMKTS:NVLX) lately may want to take a look at ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) as a replacement for either of those first two stocks. CLVS is down about 16% for the week on a less-than-flattering write-up in a Bloomberg publication, and NVLX has moved under a pair of key moving averages this week because, well, for no specific reason, but broadly because the recent wave of compelling news is already losing its potency, with most of that upside already being priced into shares (and then some) before it became official.
Saturday, May 17, 2014
3 Tools to Build and Protect Retirement Income
Overcoming the many challenges associated with investing for retirement is a work in progress that requires constant innovation in thought, technique and approach.
The macro environment – persistent low interest rates – doesn’t make things any easier, nor do increasing longevity risk or the rising costs of health care.
As such, the retirement discussion today is centered around the importance of income generation, and if advisors want to ensure their clients have sufficient income in their retirement, they need to be working closely with their clients to create well-tailored retirement plans, by using the innovative tools, technology and investment vehicles that continue to come forth into the retirement planning space.
At Envestnet’s 14th Annual Advisor Summit in Chicago on Thursday, three leading investment managers discussed some of the tools they believe will help advisors to help their clients meet their retirement income goals.
Ross Znavor, director and head of CoRI Index Distribution, BlackRock
Since BlackRock launched its CoRI Retirement Index Series last July, the CoRI website has had more than 400,000 hits, says Ross Znavor, director and head of CoRI Index Distribution at BlackRock.
The CoRi indices allow advisors and investors to calculate either how much estimated annual income an investor’s savings will provide throughout retirement, or, conversely, the level of savings an investor needs to generate a desired amount of annual income throughout retirement.
As income continues to remain front and center in the retirement discussion, the tool is vital for investors, Znavor says. The CoRI Indexes — which are designed to converge with the median price of an annuity at age 65 — will give advisors a whole new starting point for the retirement planning conversation, as well as support better informed discussions between investors and advisors on strategies for securing critical retirement incomes, he says.
Rod Greenshields, Consulting Director, Russell Investments
No one is immune to the risk of running out of money before running out of life.
Avoiding that dire predicament means engaging in a deep and meaningful relationship with clients, says Rod Greenshields, consulting director at Russell Investments, and constantly staying on top of financial plans to make sure they’re heading in the right direction.
Russell places a great deal of importance on what the firm has termed the Plimsoll Line, which is based on the principle of the funded ratio that pension plans use, to quickly communicate the status of a client’s financial plan.
Calculating the funding ratio entails dividing a client’s assets by their liabilities, to determine what they need to do vis-à-vis their current spending patterns to provide for their retirement needs.
An investor with more liabilities than assets is at great risk of sinking along the way, Greenshields says, just like British ships of yore sank when overloaded with cargo. The idea behind the funded ratio is to show both advisors and investors that a portfolio can only carry spending loads that remain safe. The funded ratio also makes the retirement discussion more nuanced, Greenshields says, because it can help advisors have more enlightened talks with their clients about both spending habits and investment risk.
Brendan Murray, senior investment director, Putnam Investments
The most crucial time period for both clients and advisors spans the years right before a client hits retirement to right after she retires.
This is when any major change – a drawdown, a market event — can have a serious impact on wealth that has been created, says Brendan Murray, senior investment director at Putnam Investments, and that can jeopardize even the most carefully crafted and well monitored portfolios.
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While most still believe that diversification is the key to mitigate downturns and it certainly has its merits, Murray believes it’s important for advisors to go even further by incorporating absolute return strategies into client portfolios.
By definition, these strategies pursue returns independent of a traditional benchmark index like the S&P 500 Index or the Barclays U.S. Aggregate Bond Index. Absolute return investing is unconstrained, he says, and can go anywhere to achieve the most efficient risk-adjusted return for investors.
Including absolute returns protects portfolios and pursues target returns with lower volatility than traditional funds, Murray says. These funds are a great way to diversify a traditional portfolio and protect it during the key years right before and right after retirement.
Thursday, May 15, 2014
Wal-Mart Leads Dow's 1% Loss, but J.C Penney Soars
Stocks tumbled today on mostly weak earnings reports from retailers, as Wal-Mart (NYSE: WMT ) disappointed the market this morning, finishing down 2.4%. As nearly 10% of non-automotive consumer dollars are spent at Wal-Mart, the retailer tends to affect the broader market, and its drop led the blue chips down 1%, or 167 points, while the other major indexes fell nearly that much with the S&P 500 losing 0.9%, and the Nasdaq shedding 0.8%.
Today's selling came despite mostly strong economic data, as initial unemployment claims last week hit a seven-year low yesterday, at 297,000. The metric tends to be volatile, however, and the four-week moving average fell slightly, from 325,250 to 323,250. Continuing unemployment claims also dropped to a six-and-a-half year low, at 2.667 million, and the moving average fell below 2.7 million for the first time since 2007. Both figures indicate strong job growth continuing into May. Elsewhere, manufacturing reports out of New York and Philadelphia for May were much stronger than expected, but the Federal Reserve reported a surprising drop in industrial output last month, which fell 0.6% on flat expectations. Finally, consumer prices crept up 0.3% last month, or 2% on a year-over-year basis, its fastest growth since last summer. While that figure indicates inflation is still under control, rising prices are beginning to creep back under economists' radar.
In its earnings report today, Wal-Mart echoed other retailers, blaming the weather for slow sales in its first quarter, as well as a higher tax rate. The world's largest retailer turned in a per-share profit of $1.10, down from $1.14 a year ago, but said poor winter weather cost it $0.03 per share. Both figures were short of analyst estimates at $1.15, and sales increased 0.8%, to $114.2 billion, but that also missed expectations of $116 billion. Adjusting for currency translation, sales would have grown 2.1%, essentially matching estimates. There were some bright spots in the report, as comparable sales at its smaller Neighborhood Market format grew 5%, compared to a dip of 0.1% at Wal-Mart stores nationwide, and e-commerce sales jumped 27%, a faster pace than rival Amazon.com's, though Wal-Mart's are growing from a much smaller base. Finally, Wal-Mart's current-quarter guidance was weaker than projected, as the retail giant sees EPS of $1.15-$1.25 versus $1.24 last year, accounting for increasing health-care costs among other factors. Analysts had expected a profit of $1.28 per share.
Source: Wikipedia
On the other side of the aisle, J.C. Penney (NYSE: JCP ) shares were flying after hours, up 19% after its earnings report soared past expectations. The struggling retailer showed signs of returning to health, as comparable sales rose 6.2% in the quarter, an indication that consumers are returning following a disastrous transformation effort under former CEO Ron Johnson. Overall sales were up 6.1%, to $2.8 billion, topping estimates at $2.71 billion, and the department-store chain saw improvements on the bottom line as gross margin jumped improved 230 basis points, to 33.1%, SG&A expenses fell 490 basis points, to 36%, and its operating loss decreased 49%, to $247 million. Finally, its net loss of $1.15 per share beat estimates of a $1.25 loss. Looking forward, the company sees mid-single-digit comparable sales increases for the rest of the year, a significant improvement in gross margin, and break-even free cash flow. The road back to profitability will certainly be a long one, but for now, J.C. Penney is on the right track.
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‘We’re Not Going to Have Anyone to Employ by 2021’: David Rosenberg
Gluskin Sheff economist David Rosenberg kicked off the Altegris Strategic Investment conference on Wednesday with a largely upbeat view of the economy, saying the odds of a recession in the coming year are close to zero.
Indeed, Rosenberg, whose Breakfast with Dave daily research report is popular in the investment community, told an audience of more than 600 investment professionals meeting in San Diego that “we’re probably only in the fourth inning” of the current business cycle.
What’s more, headwinds that were stalling U.S. economic progress are rapidly dissipating. A slowdown in housing should not be cause for concern, he said, as housing is an “early cycle indicator” whose slowing is typically followed by a handing off of “the baton to the consumer.”
Nor should fears of rising household debt worry us, since it is not debt but “the capacity to service debt that is fundamental,” he said.
That capacity has grown, as has bank lending to consumers, which should translate into improved aggregate demand.
For perspective, he noted that the ratio of debt to GDP was 10% five years ago and proving intractable, but is now almost down to 2.5% — well past the 4% threshold that signals economic healing.
Rosenberg, a former chief North American economist of Bank of America Merrill Lynch, expressed deep concern about employment conditions, yet the socioeconomic woes he describes are not likely to move markets — only “change at the margin” does that, and there the trend is mildly positive, he says.
The disturbing trend is the number of people leaving the labor force — more than 90 million Americans are out of the work force and more are leaving, he says, adding that the oft-commented upon phenomenon of discouraged workers accounts for just one-quarter of the trend.
“Something else is going on here as it relates to the pool of available labor in the U.S.
"Part of it is when you create an environment in which you pay people not to work — that’s what we’ve done in this cycle — the number of people collecting a benefit is up 40% in 5 years,” Rosenberg says.
He cited statistics from a University of Chicago researcher indicating that large numbers of Americans can make more money sitting on the couch collecting benefits than as an administrative assistant or teacher.
Another factor — the most significant factor — affecting today’s low labor market participation rate is the wave of 78 million aging boomers who began reaching age 65 in 2011.
“Of course the labor market participation rate is going down — it’s just mathematical. Three-fourths of the reason is demographic. So get used to… ever-declining rates of unemployment.”
The Gluskin Sheff economist decried work force imbalances, with U.S. colleges producing more psychologists than engineers.
“A large part of the labor force is having trouble finding work — they don’t have the skills,” he says, or their skills are declining.
But the larger problem — that the pool of available labor is declining (it is currently at a 5-year low, he says) — requires immediate legislative attention. At the current rate of decline, “we’re not going to have anyone to employ by 2021,” he quipped, calling for immigration incentives.
In the meantime, Rosenberg’s studies indicate that labor’s share of the economic spoils is now 56% and rising. Whether through market forces or politics, he says, wage increases will accelerate over the coming years.
Addressing monetary policy, Rosenberg cited statements by Federal Reserve Chairwoman Janet Yellen to the effect that the path of the economy is “uncertain,” on which he commented:
“What does an uncertain central banker do? Nothing!”
Therefore, the Fed will be keeping rates low indefinitely, the resulting yield curve suggests to Rosenberg that “the odds of a recession in the next year are close to zero.”
What’s more, “we’ll get corrections along the way, but not a bear market.”
The Gluskin Sheff economist also cautioned investors to stay away from bonds, citing newspaper headlines that “Some fear the economy needs more inflation.”
“Who’s the ‘some'?” he asked.
“The Fed!” he answered, quoting former Fed Chairman Ben Bernanke’s last official speech, in which he said: “we’re committed to making sure that inflation doesn’t stay too low.”
“They think inflation is too low — why would you bet against that? said bond bear Rosenberg, who wants to see 10-year bond rates in the 4% range before he gets comfortable with them again.
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Check out Is Your Cash Trash? Eye-Popping Chart Raises Question on ThinkAdvisor.
Wednesday, May 14, 2014
4 Small-Cap Stocks to Scoop Up While They’re on Sale
Popular Posts: 5 Beaten-Down Stocks to Buy3 Hot Stocks You Shouldn't TrustThis Year’s 5 Hottest Marijuana Stocks Recent Posts: 4 Small-Cap Stocks to Scoop Up While They’re on Sale The Carl Icahn “Accountability” Statement Rings Hollow FedEx Stock May Struggle After Shipping Price Increase View All Posts Even with Monday’s sharp bounce, the Russell 2000 Index remains in the hole to the tune of 6% since its early-March peak. That’s even worse than the Nasdaq’s sizable pullback for the same time frame.
As is so often the case, however, the market’s activity of late has been more random and coincidental than rational or calculated. Translation: Don’t read too much into the pullback from small-cap stocks. In fact, that pullback appears to have created some strong buying opportunities among the Russell 2000′s constituents. Here are four such small caps that bargain-hunters may want to consider first.
Portfolio Recovery Associates (PRAA)
The ironic risk here is if the economy tanks so badly, even debt collectors struggle simply because the money to repay loans just isn’t in consumers’ hands, as was the case between 2006 and 2009. As long as the economy remains stable, however, Portfolio Recovery Associates is plenty capable of maintaining its double-digit earnings growth rate, qualifying it as one of the market’s better small-cap stocks.
Marlin Business Services (MRLN)
So why did MRLN stock get cut nearly in half earlier in the year even though other small-cap stocks didn’t? Good question — the answer still isn’t clear. That may be why shares have finally perked up the last couple of weeks. The recovery may also have something to do with the fact that the forward-looking P/E of 12 for a steady-Eddie grower like Marlin Business is a bargain.
Hercules Technology Growth Capital (HTGC)
The private equity/venture capital fund currently backs 270 companies, ranging from Achronix Semiconductor to online game developer WildTangent. HTGC has a solid history of incubations too, with 74 exits of portfolio companies — once they were ready to sell – since the fund’s inception in 2004. It’s simply one of the better technology and life-science VC names that come in a publicly-traded wrapper.
The 17% pullback over the first quarter of the year had less to do with the company’s portfolio and more to do with the market’s mood, and now that the broad market is easing up, the market’s mood regarding Hercules Technology Growth Capital looks poised to improve.
Multimedia Games (MGAM)
And it hasn’t been chump-change growth either. Once the company finally shook off the recession, the top line has grown from 2010′s $118 million to last year’s $189 million. Annual profits have swelled from $2.63 million to $35 million during that time for Multimedia Games Holding Company; that’s a growth rate most other small cap stocks can only envy.
It’s still not a cheap stock, even with the recent weakness, priced at a trailing P/E of 22.3. But plenty of earnings beats and a double-digit growth rate make the premium worth it … especially after the stock’s multi-month nap.
Bottom Line for Small-Cap Stocks
While it’s all unnerving at first glance, far more often than not, the right time to be bullish is when everyone else is bearish. We were due for a pullback, and we got one. End of story. The economy is still in growth mode, and earnings remain on the rise. Despite Yellen’s concern — perhaps because Yellen made a point of voicing an oddly-specific concern — we should take it as a contrarian clue that small caps have already hit their short-term bottom.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
Tuesday, May 13, 2014
A Whopper at 8 A.M. Isn't the Answer, Burger King
