Someone who reads my articles sent me this email:
…I would appreciate your thoughts on three questions of mine:
When calculating the free cash flow of serial acquirers, should the acquisition costs be factored in? What are your thoughts on using pre-tax earnings, FCF, etc., yields to evaluate the attractiveness of securities. Intuitively, post-tax is all that matters, but pre-tax numbers allow for a more straightforward comparison between equities and fixed-income securities. Now for a more company-specific question. Sotheby's (BID) is inherently a very good business, but management owns only a small sliver of equity and in the past has failed to act prudently in the use of the balance sheet (impairment charges show up on cash flow statement following downturn in art market). The language in the SEC filings since that point is encouraging… which brings me to my question. How can an investor evaluate if management has learned from past missteps? Or is it so time consuming that a more efficient use of time would be to move on to other ideas?Thanks again,
Patrick
Great questions. I get similar questions a lot. Especially about how to treat cash flows used for acquisitions. Is it really free cash flow? Or is it basically just another form of capital expenditure?
And questions about management changing their stripes are very, very common. That's a tough question. But since these two questions are connected, I'll start with the acquisition issue first.
When calculating the free cash flow of serial acquirers, should the acquisition costs be factored in?
Yes. If the company really is a serial acquirer, acquisition costs should be considered equivalent to cap-ex. The issue of acquisitions is always one that can be considered part of cap-ex or not part of cap-ex. If spending on acquisitions is treated as if it is part of cap-ex, then your expectations for that company's growth would be higher (because they would be growing through acquisitions). If it is no! t counted as part of cap-ex, then your expectations for that company's growth should be lower (because you are not treating acquisition spending as a normal part of the company's year-to-year progress).
Sometimes it may be easier to estimate growth before acquisitions.
For example, a company involved in a mundane business like running hair salons – like Regis (RGS), dentist offices – like Birner Dental (BDMS), grocery stores – like Village Supermarket (VLGEA), or garbage dumps – like Waste Management (WM), may be easy to estimate as essentially a no-growth business.
Sotheby's would be harder. Because there is not a steady, year-in-year-out kind of demand for their products. And a growth company like Facebook would also be impossibly hard to evaluate this way. There is no normal industry wide rate of growth at those kinds of businesses. You simply have to evaluate them on a company-specific basis. You have to dig into their growth stories the way someone like Phil Fisher would.
But what about companies in industries with very steady demand? Industries like hair salons, dentist offices, groceries and garbage.
You can think of such businesses in two ways. One way would be to assume roughly zero percent real growth (although the company's nominal revenues might grow in line with inflation) and then to treat acquisitions as one-time both in terms of costs and the growth they provide.
The other way would be to assume the company will spend a certain amount of its free cash flow on acquisitions each year. In that case, free cash flow might fall to nearly zero (because acquisition costs are so high). But then you would analyze the business as if it grows by 3%, 5%, 8%, 10%, or whatever the acquisition-fueled sales growth tends to be.
So there are two ways to analyze a business that grows by acquisition. It is up to you to either pick which way works best for your understanding of the business — or to use both approaches in parallel. What you mus! t never d! o is assume acquisition growth is real but acquisition costs aren't. Or — more conservatively — that acquisition costs are real but the growth they provide is not. If acquisitions are a normal part of the business, so is the sales growth they provide. If acquisitions aren't a normal part of the business, then neither is the sales growth they provide.
What are your thoughts on using pre-tax earnings, FCF, etc. yields to evaluate the attractiveness of securities? Intuitively, post-tax is all that matters, but pre-tax numbers allow for a more straightforward comparison between equities and fixed-income securities?
If you are analyzing the company as a potential control buyer — asking yourself what this company would be worth to private equity, a competitor, Berkshire Hathaway (BRK.A)(BRK.B), etc. — use pre-tax numbers. And use enterprise value instead of the stock price. Analyze the business like you are buying the whole thing — equity and debt — and you are getting all of their EBIT.
But if you are analyzing the company merely as a passive minority investor, use free cash flow or after-tax income. This second calculation is important in situations where you imagine being invested for a long time under the same management team or corporate culture. These are not situations where you imagine a change of control. They are not something you are looking to buy today and sell next year.
These are long-term holdings.
When you are looking at that kind of business — Berkshire Hathaway is certainly one, but CEC Entertainment (CEC), Birner Dental, Oracle (ORCL) etc. may also count — you are imagining yourself as a shareholder and silent partner in a business that will continue to be controlled by the current management team — or similar successors — and in which they will decide what your dividends are each year, they will decide how much stock is issued or bought back, etc.
Buy and hold investments should be analyzed on a free cash flow basis. Not a! n EV/EBIT! basis. "Value" investments in the Ben Graham sense of the word — think cigar butts — should be analyzed on an enterprise value.
Simply put, make your Ben Graham investments on an EV/EBIT basis. And make your Warren Buffett investments on a price-to-free-cash-flow basis.
We can think of this as a public owner versus private owner choice. Are you buying the company because you think it is cheap relative to its intrinsic value and you expect to receive your investment gain in the forms of capital gains caused by a rising share price that will close the gap between price and value — some sort of merger, takeover, etc. — or do you imagine being invested in the company the way Warren Buffett is invested in Wells Fargo (WFC), Coca-Cola (KO), the Washington Post (WPO), etc.?
Enterprise value and operating income ("EBIT") should be used when analyzing an investment as a private owner. This is how Joel Greenblatt seems to work. At least that is how he talks in "You Can Be a Stock Market Genius" and how he designed the magic formula (enterprise value and pre-tax earnings). If you are looking to buy a company on a public owner basis — like Berkshire Hathaway's long-term investment mentioned above — then you need to look at the investment on an after-tax basis. Probably on a free cash flow basis. And you certainly need to make sure you are comfortable with current leverage, management and capital allocation policies. Because you are betting on those things continuing.
I know this sounds confusing. It sounds like I'm saying there are two different ways of analyzing a company. Do you really have to decide if you are buying a Ben Graham stock or a Warren Buffett stock? That just doesn't sound right.
But think about the way Warren Buffett described the stocks Ben Graham bought in the 1950s and before. He called them used cigar butts. Stocks that were pretty much free. But that had only one puff left in them. The puff was all profit. But once you took that puff, ! you had t! o get out of the stock fast.
And Buffett has repeatedly said that he made a big mistake by buying control of Berkshire Hathaway. Everything he did after buying the dying textile mills was genius. Buying insurance companies, See's Candies, etc. Brilliant. Buying Berkshire? Dumb.
How can that be?
It wasn't because buying a net-net like Berkshire Hathaway was actually a mistake. It wasn't. Buffett was right to buy Berkshire Hathaway stock at first. He was wrong to hang onto it. He was wrong to hold that kind of company — a bad one — year after year.
If you expect to buy a stock the way Ben Graham did — using a static intrinsic value estimate as your expected sell price — you can use enterprise value and EBIT as your valuation tools.
But if you start thinking about stocks the way Warren Buffett does today, you are moving into another area. Another way of thinking. This area of investment is not static. It's not about getting one profitable puff and then selling out. It's not about looking for a stock to rise 30% or 50% or 100% in one or two or three years. It's about owning something for, well, forever.
That's a different game entirely. It's a different approach. It comes from Ben Graham's principles. From his core beliefs. But it's a different approach. It's very close to Phil Fisher. And it's an approach that depends more on management, capital allocation and the free cash flow they have to allocate rather than measures like enterprise value and EBIT.
Where capital allocation is important, you need to move beyond EV/EBIT. You need to start thinking dynamically. Start thinking about the future. The uses free cash flow will be put to. You need to start thinking about dividends and stock buybacks and acquisitions and all that.
Warren Buffett clearly does. If you listened to Buffett talk about why he bought IBM (IBM) — this was when he was talking to the folks over at CNBC — you could tell he was very excited about! the idea! that IBM had reduced its share count over time. He had no problem at all with modest sales growth if it was accompanied by constant share buybacks. That gives you a rising earnings per share number the same way much stronger sales growth — through acquisitions — would. Buybacks are just another form of capital allocation.
For stocks like IBM, don't use enterprise value and EBIT. Use free cash flow. And really dig into the company's history of capital allocation. Do you think they will have a higher or lower share count 10 years from now? Those are the questions that matter when analyzing something like IBM. Something where the uses free cash flow is put to are key.
Finally...
Now for a more company-specific question. Sotheby's is inherently a very good business, but management owns only a small sliver of equity and in the past has failed to act prudently in the use of the balance sheet (impairment charges show up on cash flow statement following downturn in art market). The language in the SEC filings since that point is encouraging… which brings me to my question. How can an investor evaluate if management has learned from past missteps? Or it is so time consuming that a more efficient use of time would be to move on to other ideas?
My advice here is simple. Words don't matter. Behavior does. Character is behavior. And behavior is character. When looking to assess a person, look at their past record. The pattern that emerges is a portrait of that person. Don't listen so much to what others say about them, or even what they say about themselves.
Look at what they did.
Talking about buybacks tells you nothing. Actually doing 10 straight years of buybacks tells you something. There are companies like CEC Entertainment (CEC) and Sherwin Williams (SHW) that practice buybacks like that pretty consistently. Then there are Internet companies and tech giants that dilute their shareholders year after year. Finally, there are companies that raise their divid! end every! year.
Some companies overpay chasing instant growth through acquisitions. Companies will always tell you their latest purchase is a good idea, and then when they spin the unit off or sell it, they'll tell you they've learned focus matters. Five years later they'll be talking about diversification again. Today they may talk about unlocking shareholder value. But if the economy is really pumping and the stock market is really frothy in 5 or 10 years, you can bet they'll be talking about the importance of growth again.
Focus on past behavior. Look at what people really did. Not just people. But institutions too. Understand the temptations all companies face. But don't trust words. Trust deeds.
As far as I'm concerned, management's character is equivalent to their pattern of past behavior. Nothing more. Nothing less.
Talk to Geoff About Acquisitions, Capital Allocation, and Corporate Character geoff@gurufocus.com
Friday, August 30, 2013
5 Overused Resume Phrases
When it comes to resumes, recruiters have seen it all. Some are clever and creative, and some contain outright blatant untruths. What hiring managers see most, however, is a parade of the same old tired words and phrases that don't tell them anything useful about the candidates. These words have become standard fare and have been recommended by just about every resume expert in the 1990s. Hiring needs have changed over the past two decades and companies are seeking more specialized experience and skills. Here are five resume phrases to avoid if you want yours to stand out in the crowd.
TUTORIAL: Financial Careers
Team Leader
This phrase is meant to convey that the applicant has experience in managing employees. The phrase "team leader," however, does nothing to describe the nature of the relationship. For example, having the responsibility to hire, fire and otherwise manage human resources is a different skill than being responsible for receiving updates from a project team. Choose specific examples of human resource experience and outline exactly what you were in charge of. Tailor the examples chosen and the description to the requirements of the job posting.
Effective Communicator
What does this term really say about you? That you talk a lot? That you conserve your words? That you speak only when necessary? It is simply another vacant phrase that tells a potential employer nothing about your skills. What do you communicate and to whom? If you want to highlight the fact that you consult your staff and include them in the decision-making process, be specific in referencing this and provide clear examples of your communication style and why it was effective.
Co-ordinated
"Co-ordinated" is a word often used in resumes when you can't say "in charge of" or "responsible for." Its meaning is vague and unclear. What did you co-ordinate? What did it involve – developing a project plan, following a schedule or checking in with different teams? Use more specific verbs to show a recruiter the extent of your management experience.
Innovative Thinker
Companies and organizations don't hire thinkers. They hire experienced doers. If you believe that your thought processes have helped you to be successful in your career, outline the results of your thinking. Show how the plan and the actions were innovative and why. If it resulted in the company saving money, increasing productivity or other objective measures, show numerically how you have helped the company.
Proactively
"Proactively" is one of the most often used and most meaningless resume adverbs, and it's used in front of many equally meaningless verbs such as communicated, co-ordinated and organized. It simply means that you did something using initiative – a skill expected by all employers. It means you did your job. There is no need to highlight it on your resume. Employers are more interested in your previous accomplishments.
The Bottom Line
Human resource departments have to sift through hundreds, if not thousands, of resumes in a year. The vast majority will use some or all of the above catchphrases. Recruiters are accustomed to skipping over such words to hunt for the ! nuggets of what the applicant has accomplished in prior jobs. Focus your resume on what you have done, not how you have done it. Give relevant examples of past projects or tasks that highlight skills the new job will require. Align your resume wording to that of the job description to show that you understand what is required and that you have the experience necessary to excel. The easier you make it for a recruiter to hire you, the more likely you will be hired. (For related readings, check out Taking The Lead In The Interview Dance, Financial Careers: Trying On Potential Employers and Tips To Beat Tough Interviews.)
TUTORIAL: Financial Careers
Team Leader
This phrase is meant to convey that the applicant has experience in managing employees. The phrase "team leader," however, does nothing to describe the nature of the relationship. For example, having the responsibility to hire, fire and otherwise manage human resources is a different skill than being responsible for receiving updates from a project team. Choose specific examples of human resource experience and outline exactly what you were in charge of. Tailor the examples chosen and the description to the requirements of the job posting.
Effective Communicator
What does this term really say about you? That you talk a lot? That you conserve your words? That you speak only when necessary? It is simply another vacant phrase that tells a potential employer nothing about your skills. What do you communicate and to whom? If you want to highlight the fact that you consult your staff and include them in the decision-making process, be specific in referencing this and provide clear examples of your communication style and why it was effective.
Co-ordinated
"Co-ordinated" is a word often used in resumes when you can't say "in charge of" or "responsible for." Its meaning is vague and unclear. What did you co-ordinate? What did it involve – developing a project plan, following a schedule or checking in with different teams? Use more specific verbs to show a recruiter the extent of your management experience.
Innovative Thinker
Companies and organizations don't hire thinkers. They hire experienced doers. If you believe that your thought processes have helped you to be successful in your career, outline the results of your thinking. Show how the plan and the actions were innovative and why. If it resulted in the company saving money, increasing productivity or other objective measures, show numerically how you have helped the company.
Proactively
"Proactively" is one of the most often used and most meaningless resume adverbs, and it's used in front of many equally meaningless verbs such as communicated, co-ordinated and organized. It simply means that you did something using initiative – a skill expected by all employers. It means you did your job. There is no need to highlight it on your resume. Employers are more interested in your previous accomplishments.
The Bottom Line
Human resource departments have to sift through hundreds, if not thousands, of resumes in a year. The vast majority will use some or all of the above catchphrases. Recruiters are accustomed to skipping over such words to hunt for the ! nuggets of what the applicant has accomplished in prior jobs. Focus your resume on what you have done, not how you have done it. Give relevant examples of past projects or tasks that highlight skills the new job will require. Align your resume wording to that of the job description to show that you understand what is required and that you have the experience necessary to excel. The easier you make it for a recruiter to hire you, the more likely you will be hired. (For related readings, check out Taking The Lead In The Interview Dance, Financial Careers: Trying On Potential Employers and Tips To Beat Tough Interviews.)
Tuesday, August 27, 2013
Zacks #1 Ranked Real Estate Mutual Funds - Best of Funds
Even though real estate has been through tough times recently, securities from this sector should continue to be an integral part of portfolios with a long term horizon. Over the years, mutual funds from this category have continued to perform favorably. They offer a convenient method to invest in real estate because of low initial investment requirements and the advantage of professional management. Investors willing to hold long term positions would do well to consider these funds as they add stability and bring steady returns to a portfolio.
Below we will share with you 5 top rated real estate mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
ING International Real Estate A (IIRAX) invests most of its assets in equity of companies involved in real estate and related activities. A minimum of 65% of its assets are invested in foreign securities which may include securities from emerging markets. The diversified real-estate mutual fund returned 31.51% over the last one year period.
Joseph P. Smith is the Fund Manager and he has been managing this real estate mutual fund since 2011.
Forward Real Estate Long/Short A (KSRAX) seeks capital growth on a long-term basis and total return. The fund invests majority of its assets in REITs and real estate companies. Investments are made on a global basis including emerging nations and frontier market nations. The non-diversified real-estate mutual fund returned 20.38% over the last one year period.
The real estate mutual fund has an expense ratio of 1.72% higher than category average of 1.35%.
Fidelity International Real Estate (FIREX) invests majority of its assets in foreign securities. Investments are parked after evaluating certain parameters. These include evaluation of the company's financial condition a! nd its industry rank within its peers. The non-diversified real-estate mutual fund returned 41.81% over the last one year period.
Guillermo de las Casasis the fund manager and he has managed this real estate mutual fund since 2010.
VALIC Company I Global Real Estate (VGREX) seeks capital growth on a long-term basis with total return and current income. The fund invests most of its assets in equity of companies involved in real estate and related activities. The diversified real-estate mutual fund returned 25.35% over the last one year period.
As of May 2013, this real estate mutual fund held 105 issues, with 4.38% of its total assets invested in Mitsui Fudosan Co., Ltd.
PACE Global Real Estate Securities A (PREAX) invests majority of assets is parked in companies related to real estate industry. Investments are made worldwide, but usually, apart from investing in domestic companies, investments are made in three other countries. The real-estate mutual fund is non-diversified and has returned 23.70% over the last one year period.
The real estate mutual fund has an expense ratio of 1.45% in line with category average
To view the Zacks Rank and past performance of all real estate mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
Below we will share with you 5 top rated real estate mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all real estate funds, investors can click here to see the complete list of funds.
ING International Real Estate A (IIRAX) invests most of its assets in equity of companies involved in real estate and related activities. A minimum of 65% of its assets are invested in foreign securities which may include securities from emerging markets. The diversified real-estate mutual fund returned 31.51% over the last one year period.
Joseph P. Smith is the Fund Manager and he has been managing this real estate mutual fund since 2011.
Forward Real Estate Long/Short A (KSRAX) seeks capital growth on a long-term basis and total return. The fund invests majority of its assets in REITs and real estate companies. Investments are made on a global basis including emerging nations and frontier market nations. The non-diversified real-estate mutual fund returned 20.38% over the last one year period.
The real estate mutual fund has an expense ratio of 1.72% higher than category average of 1.35%.
Fidelity International Real Estate (FIREX) invests majority of its assets in foreign securities. Investments are parked after evaluating certain parameters. These include evaluation of the company's financial condition a! nd its industry rank within its peers. The non-diversified real-estate mutual fund returned 41.81% over the last one year period.
Guillermo de las Casasis the fund manager and he has managed this real estate mutual fund since 2010.
VALIC Company I Global Real Estate (VGREX) seeks capital growth on a long-term basis with total return and current income. The fund invests most of its assets in equity of companies involved in real estate and related activities. The diversified real-estate mutual fund returned 25.35% over the last one year period.
As of May 2013, this real estate mutual fund held 105 issues, with 4.38% of its total assets invested in Mitsui Fudosan Co., Ltd.
PACE Global Real Estate Securities A (PREAX) invests majority of assets is parked in companies related to real estate industry. Investments are made worldwide, but usually, apart from investing in domestic companies, investments are made in three other countries. The real-estate mutual fund is non-diversified and has returned 23.70% over the last one year period.
The real estate mutual fund has an expense ratio of 1.45% in line with category average
To view the Zacks Rank and past performance of all real estate mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
ETFdb Weekly Watchlist: SPY, EWU, XLI Hinge On U.S. GDP, ...
Wall Street was in for several lackluster trading sessions last week, as a mixed bag of earnings and economic reports kept equities trading in a narrow range. Travelers (TRV), Apple (AAPL) and Facebook (FB) beat both earnings and revenue estimates, but fast-food giant McDonald's (MCD), Hasbro (HAS) and Haliburton (HAL) missed analyst expectations. On the economic front, existing-home sales fell 1.2% in June, while new home sales rose 8.3%. In separate reports, the Federal Reserve Bank of Richmond reported that manufacturing activity in the central Atlantic region contracted in July, falling to -11, while durable-goods orders for June rose 4.2%. This week, investors will once again see a slew of earnings and economic reports. Below, we outline three ETFs that should see a fair amount of activity during the week ahead :
1. SPDR S&P 500 ETF Why SPY Will Be In Focus: This prolific S&P 500 ETF, home to over $151 billion in assets, will come into focus on Wednesday as advanced second quarter U.S. gross domestic product is reported. Analysts have somewhat low expectations, with forecasts coming in at 1.1% as compared to the previous recording of 1.8% .
2. MSCI United Kingdom ETF Why EWU Will Be In Focus: This ETF tracks an index that is comprised of roughly 100 securities, and it is designed to measure the overall performance of the British equity market. Investors should keep a close eye on EWU on Thursday as the Bank of England announces its rate decision and its asset purchase target. Both the rate and target are expected to remain unchanged at 0.50% and 375 billion, respectively.
3. Industrial Select Sector SPDR ETF Why XLI Will Be In Focus: This fund is one of the most popular on the market, with over $5.6 billion in assets and an average daily volume just over 11 million. XLI seeks to replicate the performance of the U.S. industrial sector and will be in focus this week as ISM manufacturing data for the month of Julyl hits the street on Thursday.! Analysts are expecting ISM manufacturing PMI to rise from 50.9 in June to 52.1 .
Follow me on Twitter @DPylypczak.
Disclosure: No positions at time of writing.
1. SPDR S&P 500 ETF Why SPY Will Be In Focus: This prolific S&P 500 ETF, home to over $151 billion in assets, will come into focus on Wednesday as advanced second quarter U.S. gross domestic product is reported. Analysts have somewhat low expectations, with forecasts coming in at 1.1% as compared to the previous recording of 1.8% .
2. MSCI United Kingdom ETF Why EWU Will Be In Focus: This ETF tracks an index that is comprised of roughly 100 securities, and it is designed to measure the overall performance of the British equity market. Investors should keep a close eye on EWU on Thursday as the Bank of England announces its rate decision and its asset purchase target. Both the rate and target are expected to remain unchanged at 0.50% and 375 billion, respectively.
3. Industrial Select Sector SPDR ETF Why XLI Will Be In Focus: This fund is one of the most popular on the market, with over $5.6 billion in assets and an average daily volume just over 11 million. XLI seeks to replicate the performance of the U.S. industrial sector and will be in focus this week as ISM manufacturing data for the month of Julyl hits the street on Thursday.! Analysts are expecting ISM manufacturing PMI to rise from 50.9 in June to 52.1 .
Follow me on Twitter @DPylypczak.
Disclosure: No positions at time of writing.
Sunday, August 25, 2013
4 Biotech Stocks Under $10 Making Big Moves
DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.
Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.
Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.
With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.
Amarin
Amarin (AMRN) is a biopharmaceutical company that commercializes and develops therapeutics to improve cardiovascular health. This stock closed up 6% to $5.62 in Tuesday's trading session.
Tuesday's Range: $5.39-$5.70
52-Week Range: $5.12-$14.97
Tuesday's Volume: 9.30 million
Three-Month Average Volume: 3.74 million
Shares of AMRN ripped higher on Tuesday after H.C. Wainwright upgraded the stock.
From a technical perspective, AMRN gapped up sharply here and broke out above some near-term overhead resistance at $5.59 with monster upside volume. This stock has been downtrending badly for the last six months, with shares dropping from over $8 to its recent low of $5.12. During that move, shares of AMRN have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AMRN have now started to rebound off that $5.12 low and are quickly moving within range of triggering a major breakout trade. That trade will hit if AMRN manages to take out some near-term overhead resistance levels at $5.74 to its 50-day at $5.88 and then once it takes out more resistance at $6.20 with high volume.
Traders should now look for long-biased trades in AMRN as long as it's trending above some key near-term support levels at $5.13 to $5.12, and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.74 million shares. If that breakout hits soon, then AMRN will set up to re-test or possibly take out its next major overhead resistance levels at $7.17 to $7.30. Any high-volume move above those levels will then put $8 to $8.50 within range for shares of AMRN.
Coronado Biosciences
Coronado Biosciences (CNDO), a clinical stage biopharmaceutical company, focuses on the development of immunotherapy biologic agents for the treatment of autoimmune diseases and cancer. This stock closed up 2.7% to $9.13 in Tuesday's trading session.
Tuesday's Range: $8.85-$9.58
52-Week Range: $4.00-$12.70
Tuesday's Volume: 1.31 million
Three-Month Average Volume: 419,038
From a technical perspective, CNDO trended up here right above some near-term support at $8.79 with heavy upside volume. This move is starting to push shares of CNDO within range of triggering a near-term breakout trade. That trade will hit if CNDO manages to take out some near-term overhead resistance levels at $9.60 to $10.20 and then once it takes out more resistance at $10.35 with high volume.
Traders should now look for long-biased trades in CNDO as long as it's trending above its 50-day at $8.52 and then once it sustains a move or close above those breakout levels with volume that hits near or above 419,038 shares. If that breakout hits soon, then CNDO will set up to re-test or possibly take out its next major overhead resistance levels at $11 to $11.81. Any high-volume move above those levels will then put its all-time high at $12.70 into range for shares of CNDO.
Vical
Vical (VICL) engages in the research and development of biopharmaceutical products based on its DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. This stock closed up 5.8% to $1.62 in Tuesday's trading session.
Tuesday's Range: $1.53-$1.63
52-Week Range: $1.37-$4.74
Tuesday's Volume: 7.28 million
Three-Month Average Volume: 1.53 million
From a technical perspective, VICL bounced higher here right above its recent 52-week low at $1.37 with monster upside volume. This stock recently gapped down big from $3.75 to $1.37 with huge downside volume. That move has now pushed shares of VICL into extremely oversold territory, since its current relative strength index reading is 21.80. Oversold can always get more oversold, but it's also an area where a stock can experience a powerful bounce higher from.
Traders should now look for long-biased trades in VICL as long as it's trending above its 52-week low at $1.37 and then once it sustains a move or close above Tuesday's high of $1.63 with volume that hits near or above 1.53 million shares. If we get that move soon, then VICL will set up to re-fill some of its previous gap down zone that started at $3.75. Some possible upside targets if VICL gets into that gap with volume are $2.25 to $2.50.
Siga Technologies
Siga Technologies (SIGA), a biopharmaceutical company, is engaged in the design, discovery and development of NNR Therapeutics, a new class of drugs for the treatment of diseases and disorders of the central nervous system. This stock closed up 1.7% to $3.56 in Tuesday's trading session.
Tuesday's Range: $3.50-$3.59
52-Week Range: $2.33-$4.60
Thursday's Volume: 88,000
Three-Month Average Volume: 270,742
From a technical perspective, SIGA bounced modestly higher here right above some near-term support at $3.32 with lighter-than-average volume. This bounce is starting to push shares of SIGA within range of triggering a big breakout trade. That trade will hit if SIGA manages to take out some near-term overhead resistance levels at $3.74 to $4 with high volume.
Traders should now look for long-biased trades in SIGA as long as it's trending above support at $3.32 or above its 50-day at $3.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 270,742 shares. If that breakout triggers soon, then SIGA will set up to re-test or possibly take out its next major overhead resistance levels at $4.43 to its 52-week high at $4.60. Any high-volume move above $4.60 will then put $5.50 to $6 within range for shares of SIGA.
To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
Saturday, August 24, 2013
Top 10 Gold Companies To Invest In Right Now
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Direxion Daily Gold Miners Bear 3x Shares (NYSE: DUST) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at DUST and see what CAPS investors are saying about the ETF right now.
DUST facts
| � | � | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inception | December 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Net Assets | $87.7 million Top 10 Gold Companies To Invest In Right Now: Goldcorp Incorporated(GG)Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada. Advisors' Opinion:
Top 10 Gold Companies To Invest In Right Now: Agnico-Eagle Mines Limited(AEM)Agnico-Eagle Mines Limited, through its subsidiaries, engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico. The company primarily explores for gold, as well as silver, copper, zinc, and lead. Its flagship property includes the LaRonde mine located in the southern portion of the Abitibi volcanic belt, Canada. The company was founded in 1953 and is based in Toronto, Canada. Advisors' Opinion:
Top 10 Cheap Companies To Own For 2014: Goldman Sachs Group Inc.(The)The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York. Top 10 Gold Companies To Invest In Right Now: Golden Star Resources Ltd(GSS)Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado. Advisors' Opinion:
Top 10 Gold Companies To Invest In Right Now: Newmont Mining Corporation(Holding Company)Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado. Top 10 Gold Companies To Invest In Right Now: Australian Dollar(AU)AngloGold Ashanti Limited primarily engages in the exploration and production of gold. It also produces silver, uranium oxide, and sulfuric acid. The company conducts gold-mining operations in South Africa; continental Africa, including Ghana, Guinea, Mali, Namibia, and Tanzania; Australia; and the Americas, which include Argentina, Brazil, and the United States. It also has mining or exploration operations in the Democratic Republic of the Congo, Guinea, and Colombia. As of December 31, 2010, the company had proved and probable gold reserves of 71.2 million ounces. The company has a strategic alliance with Thani Dubai Mining Limited to explore, develop, and operate mines across the Middle East and parts of North Africa. AngloGold Ashanti Limited, formerly known as Vaal Reefs Exploration and Mining Company Limited, was founded in 1944 and is headquartered in Johannesburg, South Africa. Advisors' Opinion:
Top 10 Gold Companies To Invest In Right Now: Northgate Minerals Corporation(NXG)Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada. Advisors' Opinion:
Top 10 Gold Companies To Invest In Right Now: Thompson Creek Metals Company Inc.(TC)Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado. Advisors' Opinion:
Top 10 Gold Companies To Invest In Right Now: CME Group Inc.(CME)CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois. Top 10 Gold Companies To Invest In Right Now: Claude Resources Inc.(CGR)Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties, as well as production and marketing of minerals in Canada. It primarily explores for gold in northern Saskatchewan and northwestern Ontario. The company holds interests in the Seabee gold mine located at Laonil Lake, northern Saskatchewan; and the Madsen property that consists of 6 contiguous claim blocks totaling approximately 10,000 acres, located in the Red Lake Mining District of northwestern Ontario. It also holds interest in the Amisk Gold project, which covers an area of 13,800 hectares in the province of Saskatchewan. The company was founded in 1980 and is based in Saskatoon, Canada. Advisors' Opinion:
Friday, August 23, 2013Warren Buffett’s Son, Peter, Fires Shot at ‘Charitable-Industrial Complex’When your name is Buffett and you run a large charitable foundation, you get noticed. Even if your first name isn’t Warren. You can elbow your way onto The New York Times op-ed page. In mid-July, Peter Buffett, one of Warren’s three children, wrote in The Times that he had identified “something I started to call Philanthropic Colonialism”—a donor’s “urge to ‘save the day’” by trying to solve local problems “with little regard for culture, geography or societal norms,” often with unintended consequences. Peter Buffett, a musician, with his wife Jennifer runs the NoVo Foundation, set up for him by his father in 2006 with a promise of continuing generous contributions. Last year, the elder Buffett contributed $1 billion to NoVo and to the foundations he had established for Peter’s two siblings. Now, Peter Buffett wrote in his opinion piece, he saw something worse on the philanthropic landscape: the emergence of a burgeoning charitable-industrial complex at the same time inequality continues to rise. “Philanthropy has become the ‘it’ vehicle to level the playing field.” Gatherings, workshops and affinity groups abound. He said the desire of wealth makers to “give back” is “conscience laundering’’—an effort to feel better about “accumulating more than any one person could possibly need.” This just bolsters the structure of inequality, he wrote. Buffett bemoaned the influx of “business-minded folks” into the charitable sector, people who ask “‘what’s the R.O.I.?’ when it comes to alleviating human suffering.” Philanthropy, he said, is experiencing a “crisis of imagination.” Buffett said he wasn’t seeking an end of capitalism. Instead, “I’m calling for humanism.” He said it was time for a “new operating system,” for “new code.” He concluded that “as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine. It’s an old story; we really need a new one.” ThinkAdvisor asked a number of prominent players in the philanthropy/nonprofit sector what they thought of Buffett’s observations. All declined comment. The blogosphere was less reticent. Some welcomed his op-ed. Others took his remarks to task. One writer discussed what he’d gotten wrong about philanthropy. A Huffington Post blogger commented on the “unglamorous truth about ending poverty.” Yet another writer offered a point-by-point refutation of Buffett’s “so-called charitable-industrial complex” argument. ------ Check out these related stories at ThinkAdvisor: Monday, August 19, 20136 tips to build your wealthIt is 100% true that building wealth takes discipline and planning. But, we are not going to bore you by repeating well known truths about long term investing and SIPs. You already know this. Rest assured that we at PersonalFN know exactly how hard you are working to build your wealth, and would like to give you a few tips that will make things much easier on the way. Let's get started: 1) Work Hard. Invest Smart: It's often the small, smart things that matter, over 10 or 15 or 20 years. For example, where does your monthly salary get saved? In your savings account, or in a Sweep In Flexi Deposit offered by your bank? When you get your pay check each month, put it into a sweep in flexi deposit with your bank. The flexi deposit will earn you the rate of return of a 1 year FD, and give you the liquidity of a savings account. Suppose you earn 50,000 per month. You can immediately put the entire corpus into a Sweep In Flexi Deposit (your bank will ask you to fill and sign a form). If your bank is offering 7% on a 1 year FD, your Flexi Deposit will also earn you 7%, for as long as the money is invested. Due to its liquid nature, you can draw funds from the Flexi Deposit, make your investments from it, and use the money as and when you need it, with no worry of illiquidity of funds. This is a much better option than a straightforward Savings Account and an easy way to get a higher rate of return than your savings account. 2) Don't Overspend on Insurance- Ask the Agent the Questions That Matter: We all receive calls from Insurance companies where the agent on the other end of the line is selling the best policy, with guaranteed returns, practically ensuring that you will be very wealthy in 10 or 15 years. But remember, mis-selling is rampant, and agents will certainly speak half truths, not giving you all the facts, so that they can sell the policy and earn the commission. That's not all; insurance companies will name policies such that you believe it is a particular type of policy when actually it is a different type completely. For example, a renowned insurance company has named one of its ULIP policies "XYZ Endowment Plus". The policy in question is not an endowment plan at all; it is a ULIP Plan with all the charges, commissions and risk of a ULIP. For more information, read our article titled Is Your Endowment Policy a Waste of Your Money? To sum, where insurance is concerned, take a simple term plan, and a good health plan and critical illness policy (if you need it). Don't get lured in by unscrupulous agents who will sell you anything to make themselves a quick buck. Also, ask your agents to disclose the commission not just in percentage terms, but in rupees. It'll give you the real picture of what you are contributing to your agent's lifestyle. 3) Have a Plan: It's a well known fact that people who plan ahead, tend to have smoother journeys. The same goes for your financial life. If you will put thought, effort and time into planning your foreign vacation next year, shouldn't you put much more thought, time and effort into planning for things such as your child's education and your own retirement? Your Financial Plan will help you see where you stand today, where you need to reach, and what steps you need to take to get there as safely and quickly as possible. It will help you maintain perspective in times of market turbulence, and not get carried away with market highs. 4) Delay Gratification: Spending more today, means saving less today. Saving less today means investing less today. By doing this you are losing out on a lot of money in the future. Some quick examples: If you usually spend 35,000 per month on yourself, and one month you spend 45,000 because you wanted to buy a more expensive watch, i.e. you invest 10,000 less than usual, then in 20 years, this reduction of 10,000 will have reduced your wealth by approximately 1.63 lakhs. 5) Don't be scared of taking a loan (for assets that will appreciate with time): You can take a loan, if you need it, to the amount that you can easily service. Maintain a Debt to Income ratio of not more than 30% (i.e if you earn 1000 per month, not more than 300 should be spent servicing your loans), and be sure to make your payments on time. If you want to build / buy a home (an appreciating asset), and you don't have the funds to do so in one shot, you can opt for a home loan, and make payments over the years. But remember, don't continuously prepay, you could be losing out on opportunity returns of your money. For more information, read our article titled Home Loan Dilemma: To Prepay or not to Prepay. 6) Track your Wealth: Are you curious about exactly how much wealth you have and where it is? And how much you are spending and on what? Apart from satisfying your curiosity, tracking your wealth i.e. your cash flows, your assets and liabilities, is an excellent way to measure how much progress you are making year on year, and of seeing where you can cut back on expenses to increase investments. We are happy to offer you our Wealth Tracker, which will help you do just that. In Summary: There are a number of safe and smart ways to build your wealth, beat inflation, provide for your family and get rich over time. Start with the 6 points listed above, as these are the ones that will contribute the most to building your wealth and helping you to achieve the lifestyle of your dreams. PersonalFN is a personal finance website
Sunday, August 18, 2013Anadigics to Power Huawei Smartphone - Analyst Blog Leading semi-conductor manufacturer Anadigics, Inc. (ANAD) recently shipped production volumes of AWC6340 HELP (High-Efficiency-at-Low-Power) power amplifier to Huawei for the new Ascend P6 ultra-slim smartphone. With continuous launch of such new products, Anadigics expects to offset the decline in its legacy business and thereby stem the tide of losses experienced over the past few quarters. Anadigics continues to focus on three market drivers that it believes will expand its market. These drivers include the rapid adoption of 3G and 4G data connectivity in wireless mobile devices, expansion of wireless and CATV infrastructure to support higher data usage and proliferation! of high performance WiFi connectivity in mobile devices. Incremental demand for wireless connectivity in consumer devices, including smartphones and tablets, provide substantial growth opportunities for Anadigics. The company's new ProEficient singleband and dual-band power amplifiers, Multimode Multiband Power Amplifiers and WiFi should also fuel revenue growth in the coming quarters. Anadigics currently has a Zacks Rank #3 (Hold). Other companies in the industry worth mentioning include Advanced Micro Devices, Inc. (AMD), Diodes Incorporated (DIOD) and Integrated Device Technology, Inc. (IDTI), each carrying a Zacks Rank #1 (Strong Buy). Saturday, August 17, 2013Friday’s ETF Chart To Watch: GLD Rebound In Danger Ahead ...
This week has proven to be quite uneventful as corporate earnings have offered no major surprises while investors had a fairly muted reaction to better-than-expected GDP data. Nonetheless, the bull train continues its ascent as the S&P 500 Index was able to peer above the 1,700 mark for the first time in history yesterday as investors welcomed upbeat weekly jobless claims data ahead of today's highly anticipated monthly labor market report .
Our ETF to watch for the day is the State Street SPDR Gold Trust , which could experience volatile trading as investors react to the latest monthly employment data. Analysts are expecting for the July nonfarm payrolls figure to come in at 175,000 compared to last month's reading of 195,000, while the unemployment rate is expected to tick down to 7.5%. Chart Analysis Consider GLD's one-year daily performance chart below. Gold prices have endured a harsh decline over the past year as "bull fever' has permeated the equity market, sending investors out of the safe havens and into risky assets. GLD has rebounded quite steeply in recent weeks after sinking as low as $114.68 a share on 6/28, offering investors some hopes of a trend reversal. We remain bearish on GLD from a longer-term perspective given the technical pattern at hand, along with overarching fundamentals; first, notice how this ETF has posted lower-highs (red line) and lower-lows since the start of the year and now appears to be struggling at resistance once again . Click to EnlargeFurthermore, recent talks of the Fed scaling back on bond-repurchases would mean that "free money" is coming to an end, which was a main price driver for gold in the beggining stages of the domestic recovery; also, with no fears of inflation on the horizon, gold has few positive catalysts to confirm that recent gains are signaling a major trend reversal . OutlookIf the latest employment data strikes a bearish tone with investors, gold prices could continue their rebound; i! n terms of upside, GLD has stiff resistance at $130 a share. On the other hand, encouraging employment data should inspire a rally for stocks that will likely draw demand away from precious metals; in terms of downside, GLD has immediate support around $125 a share followed by the $115 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques. Follow me on Twitter @SBojinov Disclosure: No positions at time of writing. Joy Global Remains Neutral - Analyst Blog
On Jun 11, we reiterated our Neutral recommendation on Joy Global Inc. (JOY), the manufacturer of mining equipment used in various types of mining. Joy Global currently has a Zacks Rank #5 (Strong Sell).
Why the Reiteration? Joy Global's fiscal second quarter earnings exceeded our expectation but lagged year over year. The year-over-year decline was primarily due to lower contribution from Underground Mining Machinery (down 23.1%). The softness in demand from U.S. markets and lower shipments in China and Eurasia led to the decline in the segment. Despite the earnings beat, we remain cautious about the decline in backlog as well as order booking. Since the commodities mined are presently in supply surplus, the miners are taking a cautious approach towards developing and expanding their mining projects. Unless demand recovers to cover up the excess capacity the mining equipment makers will find it difficult to accelerate profits. A report from World Steel Association projects a nearly 3% increase in global steel demand in 2013 and 2014. The revival of demand in the steel market could act as a positive catalyst for the company. In the U.S. the demand for thermal coal is expected to rise due to a recovery in natural gas prices. This could act as another catalyst for the mining equipment company. Over the next five years electricity generation is expected to increase globally by 300 gigawatts. This will require higher production of coal over the said period and in turn lead to more demand for mining equipment. However, in a commodities supply surplus market miners are presently taking a very cautious step in developing new mines. They are also lowering the prices of mining equipment to stay competitive, which in turn puts downward pressure on margins. Moreover, Joy Global is exposed to foreign exchange risk given its substantial revenue exposure to international markets. Intense competition in the mining industry, consistent expenditure in research &am! p; development to match its peers in the technology game and inherent risk of failing to meet customer demand are added headwinds. Other Stocks to Consider Joy Global's present dividend yield of 1.42% compares unfavorably with the industry major Caterpillar Inc. (CAT) with a yield of 2.82%. Nonetheless, the company compares favorably with Astec Industries, Inc. (ASTE) with a dividend yield of 1.09% and The Manitowoc Company, Inc. (MTW) with a yield of 0.41%. Friday, August 16, 2013Shriram City Union Finance NCD issue to open on Sept 12The NCDs proposed to be issued under this issue have been rated 'AA' by CARE for an amount of up to Rs 500 crore, and 'AA-/stable' by CRISIL for an amount of up to Rs 500 crore. The rating of the NCDs by CARE indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk. The rating of NCDs by CRISIL indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk. The funds raised through this issue will be used for Shriram City's various financing activities including lending and investments. The funds would also be used to repay the company's existing loans; for business operations including capital expenditure and working capital requirements. The NCDs are proposed to be listed on the NSE and the BSE. JM Financial Institutional Securities Private Limited, A K Capital Services Limited and Edelweiss Financial Services Limited are the lead managers to the issue while Integrated Enterprises (India) Limited is the registrar to the issue.
Thursday, August 15, 2013Too Late for Stocks? Not for the Investor...
In today's Wall Street Journal there is an article entitled "Too Late to Jump Aboard?" which highlights the recent run-up in equity indices and asks the question, where do we go from here? Here's the gist of the opening to the article:
"After several months of relative calm in Europe and an uptick in the U.S. economy, investors just emerging from their bunkers are realizing that the rally train might have left the station already. The dilemma for those who sat out the U.S. stock market's recent climb: Should they jump into an upswing that could quickly evaporate, or risk missing out on further gains?" I don't fault the WSJ for articles such as these; people are interested in these types of discussions, and it will help sell some newspapers. However, for investors, let's remember two important things: First off, nobody has the slightest idea where the market is heading next; second, if you are a value investor with a degree from Buffett & Munger University, this is simply noise that blocks intelligent investment decision making. On the first point, the fact is that nobody has the slightest idea where the market is going. More importantly, attempting to time market investments based on potential short-term moments (also known as guessing) rather than underlying company-specific fundamentals is a fantastic way to succumb to emotional decision-making; as I've highlighted in recent articles, "playing the market" may very well come with some excitement thanks to our wiring. Unfortunately, you're likely to lose your shirt in the process. Second, the question of whether or not the market will move higher or lower over the next three months is noise in the big picture; if you're planning for your retirement 20 years from now, does it really matter whether your portfolio moves up or down 3% over the next 12 weeks? If it doesn't, then why do people feel the need to endlessly fret over such trivial movements that are a net negative to achieving long-term f! inancial success? As Seth Klarman has noted in the past, his competitive advantage in investing comes from his long-term focus in a world that only cares about next quarter's earnings. For investors wishing to shed some competition, stop fighting the day traders and their brethren: stick to a long term value based investment strategy to differentiate from the crowd and put yourself in a position to succeed while still sleeping comfortably at night. As the new week begins, investors would be wise to take the Journal's article with a grain of salt, and remember two great quotes from Warren: "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." "There seems to be some perverse human characteristic that likes to make easy things difficult." Wednesday, August 14, 2013Top 4 Most Competitive Financial Careers
Many employers are having trouble finding strong candidates for jobs vacated by retiring baby boomers. The jobs require, on average, more than seven years of experience, and some employers can't fathom replacing an employee who may have 20-plus years of experience in the field with someone who has only five. If your financial-career goals include a big paycheck and the prestige of working for a high-profile Wall Street firm, then you'll need to learn how to meet employers' expectations.
The positions that some financial recruiters have identified as the hardest and most competitive to fill include controllers (including hedge fund controllers), tax managers, fund and senior-level accountants and valuation analysts. Let's explore the responsibilities of each of these positions as well as what employers are looking for in potential candidates for these roles. 1. Controllers Role Controllers keep the company's financial planning, debt financing and budget management organized. They set financial rules, including choosing accounting methods and making sure that generally accepted accounting principles (GAAP) are followed. Controllers work for banks, corporations and governments. They motivate their teams from time to time and make sure they produce quality work within set time periods. Education A controller's education requires a Master of Business Administration (MBA) degree with a concentration in finance or accounting. It also requires a Certified Public Accountant (CPA) designation. Further, most employers like controller job candidates to have five to 10 years of experience in senior-level finance or accounting positions. Experience One specialized type of controller is the hedge fund controller. This position is difficult to attain, according to some recruiters, because it requires eight to 10 years of experience working with larger funds. Additionally, the job seeker must have exposure working in distressed debt. 2. Tax Managers Role T! ax managers oversee tax reporting and planning. They make sure tax returns are completed and accurate in order to reduce the tax obligations of an organization. Tax managers must also ensure that their companies adhere to federal, state, local and international tax laws. Education A senior-level tax manager position also calls for a CPA designation and an MBA with a concentration in accounting or taxation. Experience Most employers prefer at least five years of experience, but senior positions typically require seven years in the field with experience in public and corporate environments. John Gramer, Managing Director of The Mergis Group in New York City, has found that tax managers are hard to recruit because some are adverse to making changes. The key to success, he suggests, is specialization in the field. 3. Fund and Senior-Level Accountants Role Accountants examine financial trends, operations and costs. They analyze financial reports to keep a close eye on the state of the organization's assets, liabilities, profits and losses, taxes owed and financial activities. Education Managers are looking for people who have accounting degrees in addition to a minimum of two to five years of work experience, and preferably a CPA, but most people aren't meeting these qualifications says Mark Sterling, a spokesman for Manpower. Experience The most competitive positions in accounting include accountant managers, senior accountants and fund accountant managers of private equity funds, according to recruiters. Some employers want fund accountant managers to have between three and five years of experience with private equity firms, investment banks and hedge funds, explains John Gramer, Managing Director of Mergis Group NYC. In addition, he says that most of these accountants come out of public accounting. 4. Valuation Analysts Role Business valuation analysts determine the value of a business enterprise or the ownership's interest (for example, when a business is bought or sold). The analyst must have a good understanding of accounting, taxes, economics and finance. Education Analysts need to have a CPA in order to become certified. Experience Qualifications for this position include a strong mathematical background, says Gramer. He advises applicants to wait for long-term growth opportunities. Tips for Landing the Job ! Role-specific competency is among financial employers' list of must-haves. Believe it or not, a strong educational background is not their main focus. Employers desire sufficient and specific real-world experience. They are also looking for candidates who've mastered "soft skills," such as the capability to communicate well and translate industry jargon. For these high-level positions, companies have the money to pay salaries ranging from hundreds of thousands to millions of dollars. With such large amounts of money at stake, they must cautiously assess candidates on talent and skill. Bolster your chances of landing the job by following these three tips: Network - Job seekers may have trouble finding openings for a few of these senior-level positions, which aren't necessarily advertised in newspapers. The best way to locate them is through networking. Recruiters advise attending industry-related events, joining industry organizations and logging on to social networking sites. Attain advanced educational and professional credentials - Many of the jobs require a CPA or other industry-recognized accreditation. Also, remember that your education does not end when you get a degree - it's key to stay abreast of changes and technological advancements within the industry. Develop "soft skills" - These positions require leadership and strong communication skills. Practice now by joining local volunteer organizations and taking on roles that enable you to lead and work in a team environment. Look for opportunities to develop and enhance your speaking and presentation skills by joining a speech club or taking a class. The Bottom Line Strategic thinking, outstanding communication and industry-specific skills will ultimately help you to not only get the coveted position, but also to succeed once the job is yours. Saturday, August 10, 2013Can This Huge Bank Continue to Please Shareholders in 2013?
T = Trends for a Stock’s Movement Citigroup provides consumer banking and credit, corporate and investment banking, securities, brokerage, wealth management and transaction services. It operates in two segments: Citicorp and Citi Holdings. Citicorp consists of the company's Global Consumer Banking businesses and Institutional Clients Group while Citi Holdings consists of Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool. The company and its corresponding sector have received a good amount of negative press over the last few years, but they seem to be recovering. In any case, the financial sector is the backbone of the economy so look for this sector, along with its companies, to continue to see increased profits as the world gets back on track. T = Technicals on the Stock Chart are Strong Citigroup stock took a significant hit during the 2008 Financial Crisis from which it has yet to fully recover. The stock is now perking-up and getting ready to seek higher prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Citigroup is trading above its rising key averages, which signal neutral to bullish price action in the near-term. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! (Source: Thinkorswim) Taking a look at the implied volatility (red) and implied volatility skew levels of Citigroup options may help determine if investors are bullish, neutral, or bearish.
What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months. On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion. E = Earnings Are Improving Quarter-Over-Quarter Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Citigroup’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Citigroup look like and more importantly, how did the markets like these numbers?
Citigroup has seen improving earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with Citigroup’s recent earnings announcements. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! P = Excellent Relative Performance Versus Peers and Sector How has Citigroup stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and sector?
Citigroup has been a relative performance leader, year-to-date. Conclusion Citigroup provides valuable and essential financial services to companies and consumers operating in a multitude of industries around the world. The stock took a good beating during the 2008 Financial Crisis but seems to be perking-up and getting ready to seek higher prices. Over the last four quarters, earnings and revenue figures have been improving which has generally pleased investors. Relative to its peers and sector, Citigroup has been a year-to-date performance leader. Look for Citigroup to OUTPERFORM. Friday, August 9, 2013Top Medical Companies To Invest In 2014Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks. Today, let's look at Gardner, Russo & Gardner, a hedge fund company with a record that speaks for itself. Over the past 25 years, according to the folks at GuruFocus.com, it has posted a cumulative gain of about 2,115%, vs. 920% for the S&P 500. Over the past 10 full years, it gained 179%, vs. 100% for the S&P 500. The company's reportable stock portfolio totaled $8.5 billion�in value as of March 31, 2013. Interesting developments The biggest new holdings are AbbVie (NYSE: ABBV ) and J.C. Penney. Other new holdings of interest include Sarepta Therapeutics (NASDAQ: SRPT ) . AbbVie is half of the split-up of Abbott Labs�-- it retained the pharmaceutical business, while Abbott focuses on medical, diagnostic, and nutritional products. Bears don't like its heavy debt or its being very dependent on its blockbuster drug Humira, which generates half its revenue. But the company does enjoy about $18 billion in annual revenue, more than $6 billion in free cash flow, and gobs of cash. It has other drugs on the market, too, and more in its pipeline, tackling Hepatitis C, among other conditions. It also sports a 3.7% dividend yield. Top Medical Companies To Invest In 2014: FUTURE GBP0.01(FUTR.L)Future plc publishes special-interest consumer magazines and Websites in the United Kingdom, the United States, and Australia. The company?s Technology segment focuses on consumer electronics, computing, photography, and digital activities. It offers magazines, including T3, MacLife, MacFormat, Tap!, Maximum PC, Linux Format, Digital Camera, Practical Photoshop, PhotoPlus, .net, Computer Arts, and Windows: The Official Magazine; and techradar.com, T3.com, gizmodo.co.uk, maximumpc.com, maclife.com, T3 edition for iPad, Tap! edition for iPad, and MacLife Tablet edition Websites, as well as organizes T3 Gadget Awards, Digital Camera Photographer of the Year Awards, and .net Awards. The company?s Games segment offers console and PC gaming products comprising Xbox 360: The Official Magazine, Official PlayStation Magazine, Official Nintendo Magazine, Nintendo Power, PC Gamer, Edge, and GamesMaster magazines; and gamesradar.com, computerandvideogames.com, pcgamer.com, Qore, and Access TV Websites, as well as organizes Golden Joystick Award events. Its Music and Movies segment focuses on films and music. This segment provides Classic Rock, Metal Hammer, Guitarist, Total Guitar, Rhythm, Computer Music, Total Film, and SFX magazines; and Websites consisting of musicradar.com, totalfilm.com, and sfx.co.uk, as well as organizes events, such as Classic Rock Roll of Honour, Golden Gods Awards, Metal Hammer Live Tours, and High Voltage Festival. The company?s Active segment focuses on sports, automotive, hobbies, and crafts. It offers Procycling, Cycling Plus, Mountain Biking UK, Triathlon Plus, Fast Bikes, Fast Car, Total Vauxhall, Mollie Makes, Simply Knitting, CrossStitcher, Your Family Tree, and Your Knitting Life magazines; and bikeradar.com, cyclingnews.com, themakingspot.com, and weheartcraft.co.uk Websites, as well as organizes Stitch and Craft Show, TRAX, Total Vauxhall Live, and Ford Fair events. Future plc was founded in 1985 and is based in B ath, the United Kingdom. Top Medical Companies To Invest In 2014: Torotrak(TRK.L)Torotrak plc engages in the design and development of traction drive systems for vehicle makers and transmission manufacturers in Europe, North America, India, and Japan. The company licenses its patented traction drive technology for use in main drive transmissions for vehicles, such as buses, trucks, and small cars; variable drive pressure charging for fuel economy; and mechanical flywheels that recover braking energy. It also provides engineering consultancy services, including supporting projects through advice and helping customers to apply the Torotrak plc?s technology. The company was founded in 1988 and is based in Leyland, the United Kingdom. Hot Heal Care Companies To Watch For 2014: VASCO Data Security International Inc. (VDSI)VASCO Data Security International, Inc., through its subsidiaries, engages in the design, development, marketing, and support of hardware and software security systems that manage and secure access to information assets worldwide. The company offers hardware and software products in the areas of user authentication, electronic signatures, and digital signatures/public key infrastructure. It provides VACMAN Controller that supports multiple authentication technologies, including passwords, dynamic password technology, electronic signatures, digital signatures, and certificates and biometrics on one platform. The company also offers IDENTIKEY Server, a centralized authentication server that supports the deployment, use, and administration of DIGIPASS user authentication. In addition, it provides aXs GUARD Identifier, a standalone authentication solution, which offers two-factor authentication for remote access to a corporate network or to Web-based in-house business applicat ions; and aXs GUARD Gatekeeper that integrates DIGIPASS to provide secure two factor user authentication. Further, the company offers DIGIPASS product line exists as a family of software and hardware client authentication products and services for authenticating users to any network, including the Internet. Its DIGIPASS solution calculates dynamic signatures and passwords to authenticate users on a computer network and for various other applications. The DIGIPASS technology is also designed to operate on desktop personal computers or laptops, personal digital assistants, mobile phones, and smart cards. VASCO sells its security solutions through its direct sales force, as well as through distributors, resellers, and systems integrators. The company was founded in 1996 and is headquartered in Oakbrook Terrace, Illinois. Thursday, August 8, 2013No Matter What the Market Is Doing, Don't Change the Way You Invest!Last week I wrote about a few things investors should do if they knew a market correction was coming. The preparation for the impending correction was simple: Review your holdings to ensure your portfolio was still properly balanced so that no one stock commands the lion's share of your investable dollars, determine whether your investing thesis was still alive, and mentally prepare yourself for some possible short-term paper loses. Then sit back and let the market do what the market does, because even if the market declines in the short term, it tends to rise ever higher in the long term. I got a number of reader comments on the article, but one stood out to me. Misterpotatohead wrote, "So how exactly does this strategy differ from any other period in the market cycle?" Well, let's first look at the market and its cycles. My colleague Dan Caplinger recently published a great piece explaining that when we look at the history of the markets, we typically see three 5% corrections each calendar year, one 10% correction each year, and a 20% correction once every three and a half years. Since nobody has a crystal ball to magically predict when each of these corrections is going to happen, I think we should approach investing with the assumption that a correction is always about to happen. A simple answer to Misterpotatohead's question, therefore, is that my strategy for how investors should act if they knew a correction was coming doesn't really differ from how investors should act at any other time. We should always be prepared so that we can sell stocks that have a broken investing thesis, pare back our big winners to rebalance our portfolios and spread the risk evenly, and have cash available so that when the markets or an individual stock pulls back, we can, as Warren Buffet says, unload our elephant guns and buy stocks at a discount to their intrinsic value. Since the beginning of the year, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is up 15.35%, while the S&P 500 (SNPINDEX: ^GSPC ) has risen 14.23%, and over the past five months we haven't yet seen any meaningful pullback. Not even a small 5% correction. The inevitable will happen, though. Stocks will decline in value. Fear will run high. Rational people will act irrationally. Billions of dollars will be lost simply because investors weren't prepared for the future. Whether you're new to investing or an old pro, a few simple things will help you from adding your hard-earned cash to the billions that will be lost in the coming correction. First, take Morgan Housel's advice and memorize the five things we should all know about investing. In fact, double-memorize the first point. Then once you have a solid foundation and an understanding of how to make money through investing and what to avoid, never change your strategy, never forget the power of compounding interest over time, stick to your guns during the bad times, and prepare during the good times. More Foolish insight It’s Official: Windows 8 Is a Design FailureFor all the hubbub over Windows 8's new design, and how it's better suited to the newer generation of interactive touchscreen devices, Microsoft's (NASDAQ: MSFT ) most loyal customers want a PC they recognize. Windows 8 is a design failure for these users. How do we know? The good folks at The Register quote data from PC management firm Soluto that says more than half of all Windows 8 users ignore the new start menu in order to preserve old habits. Touchscreen laptop and tablet owners also largely avoid Windows 8's most advanced features. No wonder sales haven't lived up to expectations, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova. Mr. Softy's problem is that it hasn't trained users to accept disruptive changes in design and development in the same way that Apple (NASDAQ: AAPL ) has. Instead, Windows customers expect Microsoft to be stable and predictable. Modernizing -- as Microsoft did with Windows 8 -- means risking alienating big chunk of the installed base, Tim says. Do you agree? Please watch the video to get Tim's full take, and then let us know how you're using Windows 8. A hard road for Mr. Softy More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company. Wednesday, August 7, 2013Why The Fresh Market Must Grow FasterOn Wednesday, The Fresh Market (NASDAQ: TFM ) will release its latest quarterly results. As the company named to follow in the high-growth footsteps of Whole Foods Market (NASDAQ: WFM ) , can The Fresh Market manage to live up to the expectations investors have of it? Given the success of Whole Foods, it was inevitable that companies like The Fresh Market would come along to try to replicate its success. So far, the growth path that The Fresh Market has followed has been impressive, but can it keep up the pace long enough to reach critical mass as a serious threat to its rival? Let's take an early look at what's been happening with The Fresh Market over the past quarter and what we're likely to see in its quarterly report. Stats on The Fresh Market
Source: Yahoo! Finance. Will The Fresh Market have healthy earnings this quarter? The key reason for The Fresh Market's challenges lately was its last quarterly report back in March. In that report, the grocery retailer said same-store sales rose only 1.9%, less than half what analysts had expected. Moreover, the company guided down estimates for the full year, with most of its planned new-store growth coming in the second half of 2013. As Whole Foods has also been moving aggressively to boost its store count, investors worry that The Fresh Market could be hitting a point of diminishing returns within the high-end grocery industry. But more recently, investors seem to have realized that what's good news for Whole Foods is also good news for The Fresh Market. When Whole Foods reported favorable earnings earlier this month, The Fresh Market also gained ground, as it indicated a general willingness among customers to spend more on premium-quality food. In particular, as The Fresh Market gears up to challenge Whole Foods in the key markets of California and Texas, the grocer stands to get a lot of new growth opportunities. If the company can focus more on winning business from Kroger (NYSE: KR ) , Safeway (NYSE: SWY ) , and other traditional grocers rather than on trying to crush Whole Foods, then The Fresh Market should be able to find its niche and keep its prospects moving in the right direction. Even as Safeway and Kroger have tried to embrace organics and other healthy products, they can't match The Fresh Market's margins, and that's a key advantage The Fresh Market should maintain for a while. In The Fresh Market's report, look for the company to follow up on its guidance from last quarter. If the grocer can't report improving conditions among its customer base, then it could have further problems keeping its share price up. It's hard to believe that a grocery store could book investors more than 30 times their initial investment, but that's just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this premium report on the company, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. So make sure to claim your copy today by clicking here. Click here to add The Fresh Market to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Subscribe to:
Posts (Atom)
|
With shares of Citigroup (NYSE:C) trading around $51.60, is C an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework: