Before Thursday’s opening bell, a number of big name dividend stocks were the subject of analyst moves. Below, we highlight the important analyst commentary for investors.
Analog Devices Upgraded
Analog Devices (ADI
Stifel Downgrades CSX
CSX Corp (CSX
Goldman Downgrades Equifax
Goldman Sachs downgraded Equifax (EFX
Popular Posts: 3 Death-Defying Dividend Stocks to Buy Now3 Dividend Stocks to Sell Before It's Too LateNaked Puts: Make a Grand This Month With Options Recent Posts: 3 Stocks to Buy and Hold Forever These 3 Sky-High Plays Are Still Value Stocks 3 Death-Defying Dividend Stocks to Buy Now View All Posts There's a certain category of stocks that I consider stocks to buy and hold until the zombie apocalypse … or 30 years, whichever comes first.
So, which are the best stocks to buy and hold forever?
Stocks to Buy: Chevron (CVX)
I'm fond of saying that the world will always need energy, that our need will only increase over time, and that the energy we will need the most will be from fossil fuels. Oil is the past, the present and the future. Entire geopolitical landscapes are shaped by oil. It heats our homes; it fills our gas tanks; it's used for plastics and polymers. You cannot escape oil. I don't care what the environmentalists say, neither solar nor wind will ever come close to the efficiency of fossil fuels.
CVX stock handles processing, transport, storage, marketing, exploration, development and production. CVX stock does it all. It is even involved in coal, has some insurance and real estate activities, and manages interests in power assets. CVX stock has $45 billion in cash against $18 billion in debt. That $27 billion in net cash translates to about $13 per share, which puts CVX stock at about 9x estimates.
CVX stock throws off anywhere between $8 billion and $15 billion in free cash flow each year. That kind of FCF makes CVX very well-positioned for the next 30 years. The bottom line: CVX stock is a no-brainer when it comes to stocks to buy.
Stocks to Buy: AutoZone (AZO)
Autos will always be with us, every machine eventually gets older, and every machine eventually needs parts. That’s why you want to go with a company that has 5,109 stores in the U.S. and Mexico. Yet besides all the parts it sells, it also offers tons of discretionary auto products like air fresheners, floor mats, performance products, and stuff you see at your local car wash.
It also offers commercial credit to help its retailers, and has an automotive diagnostic and repair software program. How nice of AZO to offer a product that helps you decide which of its other products to buy.
Of all the auto part companies, AZO stock has the best valuation and is still growing strong. While it does sit on $4 billion in debt, it’s cheap debt (3% interest), and has a $126 million cash backstop. Most of all, though, it has the kind of FCF that I so love, putting out between $900 million and $1 billion annually. AZO stock continues to power forward on 13.82% long-term projected growth, and trades at a FY14 P/E of just 17.
Stocks to Buy: Berkshire Hathaway (BRK.B)
A properly managed insurance company will always yield strong and consistent yields, and nobody is better at insurance than Berkshire. The company has been doing it for so long. But surrounding BRK.B stock's insurance company are dozens of other companies that I believe more accurately represent America than the Dow Jones 30.
The pure diversification of businesses helps insulate Berkshire from long-term pain. In fact, banks went to Berkshire to shore up their balance sheets during the financial crisis. That's a company you want to be with.
As of this writing, Lawrence Meyers was long BRK.B. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at pdlcapital66@gmail.com and follow his tweets @ichabodscranium.
SAO PAULO–Brazilian equities are cheap compared to other markets around the world after the country's stock market posted one of the worst performances anywhere in 2013. Yet that doesn't necessarily mean it's time to buy.
Agence France-Presse/Getty Images "The problem is cheap is great, but there just doesn't appear to be a catalyst for a rebound in the market," says Michelle Gibley Director of International Research at Charles Schwab(SCHW).
Ms. Gibley says she's been pessimistic on Brazil for quite some time, as the country is caught in a negative growth spiral. High inflation means the central bank has to raise interest rates, which will slow growth further. A weakening currency and strong public spending compound the problems.
The country's infrastructure hasn't kept pace with recent economic growth and acts as a major bottleneck, driving up the cost of getting products to markets. Unemployment is low, but so is productivity.
Moreover, as China's economy slows, demand for Brazil's commodities declines. Consumers have so far propped up the economy but economists believe they aren't going to be able to continue to spend at the pace seen in recent months and years. Retail sales fell unexpectedly in January.
The government doesn't seem to be interested in tackling the major reforms that Ms. Gibley believes are necessary for an equities rally. The main Ibovespa on the BM&FBovespa SA exchange in São Paulo fell 15.5% in 2013, the worst-performing index among the world’s 20 largest economies.
“What we really need is an overhaul of the economy in terms of some major reforms and there doesn't seem to be a political will for that now particularly ahead of the elections,” says Ms. Gibley. “So for the stock market the bottoming out might have further to go.”
President Dilma Rousseff is expected to seek reelection in October, and a new poll published on Tuesday indicates she has a comfortable lead over her main opponents.
The elections aren’t likely to throw up any surprises in terms of policy, says Ms. Gibley. Politicians may have to react if there is a return to the massive street protests seen in June and July last year, she said.
Millions of Brazilians poured onto the streets of towns and cities across the country last June and July to protest a whole host of issues, from rising public transportation fares to perceived corruption and poor public services. Protests often turned into violent confrontations with police. The number and size of protests have dwindled, however, while the level of violence has increased.
"The interests of investors and the electorate are usually not the same," says Ms. Gibley. "What investors want are reforms that probably hurt the electorate in the short term but provide a better long-term future."
Before the elections, Brazil will host the 2014 soccer World Cup, in which 32 teams will compete in the world's most-watched sports tournament. Millions of people are expected to visit Brazil during the month-long event, which runs from mid-June to mid-July.
Despite any short-term boost to the economy, there may be a longer-term hangover that could again act as a drag, says Ms. Gibley.
“Typically there's an overhang because you have to pay for the debt that was raised to fund all the infrastructure to host the events,” she says. “That just slows growth further.”
These stories sound crazy today. All we've heard about for the last decade is how underfunded corporate pensions are. "More than two-thirds of the companies that make up the S&P 500 have defined-benefit plans, and as of last quarter only 18 of them were fully funded," TIME magazine wrote just a year ago. In December 2012, corporate pensions in the S&P 1500 were underfunded by $557 billion, according to consulting firm Mercer.
But things changed in 2013. A new report by consultants Towers Watson estimates corporate pensions are now 93% funded, on average. In another report, consultants at Mercer said pension plans among S&P 1500 companies are now 95% funded, up from 74% a year ago. The half-trillion deficit a year ago has been reduced by more than 80%, to less than $100 billion.
Two things fueled this turnaround.
Stocks just had their best year since the mid-1990s, up nearly 30%. That was more than enough to offset any decline suffered in bonds. I think we got so used to a decade of dismal returns that a lot of people forecasting the pension crisis forgot this could occur. A year ago, I interviewed Joseph Dear, then chief investment officer of CalPERS, the nation's largest pension fund, who said this about market returns:
It's not been so great for the past ten years, but if you look at big cycles in investment and see 10-year returns from equities relatively low, what we've seen after that is a return to better returns, a reversion to the mean. So I think there is a reasonable basis to be confident.
That's exactly what happened.
Two! , and a little more complicated, is that rising interest rates reduced the present value of pension plans' future liabilities. Pensions use a "discount rate" -- an interest rate typically linked to corporate bond yields -- to convert future obligations into a present value. The lower that rate is, the higher a pension's liabilities are. And with interest rates at all-time low in recent years, that discount rate has been incredibly low, pushing up the present value of pension funds' liabilities.
But with interest rates now rising, the present value of future obligations is coming down. Towers Watson says the average discount rate used in corporate pensions rose to 4.8% in 2013, from 3.9% in 2012. When I asked Dear about low discount rates last year, he replied:
In a super-low rate environment like we have today, liabilities are definitely bigger. But are interest rates going to stay low? Is the 10-year Treasury going to stay at 1.6% indefinitely? I doubt it. So it's going to go up and the interest rates will go up and even those who want to do the yield curve will see liabilities coming down.
That, too, is exactly what happened. In June, Mercer estimated that rising corporate bond yields reduced S&P 1500 pension obligations by $150 billion. Yields have increased sharply since then -- the 10-year Treasury bond rose from 2.2% in June to 3% today -- shrinking liabilities even further. If interest rates keep rising this year, and most analysts expect they will, pension funding levels could keep rising.
Is our corporate pension crisis over? Sort of. I think a more accurate observation is that these things constantly move in cycles. Pensions looked underfunded in the early 1990s. Then they were way overfunded in the late 1990s. Then they became strained in the early 2000s. Then they were overfunded again by 2007. Next came the half-a-trillion-dollar shortfall last year, and today, we're back to fairly healthy levels. Funding calculations rely on assumptions. Those assumptions are us! ually wro! ng, and they can change dramatically overnight. There's almost never a time when pensions are perfectly funded at just the right level and stay there forever, nor should there be. Any investor it in for the long run has to accept big ups and downs. It's just part of the deal.
So be happy corporate pensions are doing better. But realize we'll be back to Crisisville before long.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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The typical American views Social Security as an entitlement – there for the taking at the first opportunity. But retirement planners know that isn’t often the best move. Financial advisor Karla McAvoy, of HC Financial Advisors, discusses the best ways to educate a client on when the time is right for Social Security, no matter what their circumstances.
Q. Please tell us a little about your firm, the clients that you represent and what you specialize in with regard to retirement planning.
Karla McAvoy: Our firm is 30 years old now. We’re a fee-only financial planning firm, covering both financial planning and asset management. We have eight people in the firm right now; about 210 clients; and about $260 million under management. The majority of our clients come to us a little bit before retirement or right into retirement. This change in how they are going to receive income is often a trigger for them to seek out financial advice. We do tend to get people in that 50-65 range, but really our clients run anywhere from a few in their 30s to a couple over 100 right now.
Q. Over 100?
Karla McAvoy: Yes, we have two clients that are over 100-years-old.
Q. And they’re still doing retirement planning?
Karla McAvoy: Well, they don’t so much financial planning, but they still need asset management.
Q. The unfortunate part of what I hear in your response is that most of your clients wait until they are nearly at retirement age before they come seek you out.
Karla McAvoy: I would say that is mostly true. Certainly we get clients at all times. It might be somebody that is going through a job change. It tends to be a major life event that triggers somebody. For example, there are a lot of widows that we work with, divorcees … Anytime that they are suddenly finding themselves in a different economic situation it can lead them to come to us. The other big one is an inheritance of some sort.
Q. Are there any trends or events in 2014 that will have an impact on how retirement planners should advise clients on Social Security?
Karla McAvoy: I don’t know that there is anything specific in 2014 that could cause me to change my advice to planners. I think that my advice tends to be fairly consistent, which is that people are living so much longer … and we just talked about the fact that we have a couple of clients that are over 100 years old … and they tend to be very healthy into their 70s and 80s. One of the strongest pieces of advice that a retirement planner can give to somebody that is near retirement is to work a little bit longer if they like their job and they can continue to do it. Because by working they can increase the amount of Social Security benefits that they get. They’ll get a larger benefit than they would normally be entitled to if they can wait all the way until age 72.
Q. When a typical client or would-be client comes to see a retirement planner, when do they usually intend to file for Social Security and what should a planner advise them based on what you just said?
Karla McAvoy: At first blush, I think that many people want to take Social Security the minute that they’ll eligible for it, which is usually at 62. Even if they’re still working -- especially if they’re still working -- I encourage planners to tell their client to wait. I sense that many people worry about the government; the funding; is Social Security going to be there. Many clients come in thinking, ‘oh, I should take it right away to make sure I get some.’ But planners should tell their clients -- especially from the Baby Boomer generation – that it is not going to be fundamentally different than it is right now. There is basically just a math problem going on – we’ve got more people collecting, and collecting more than is going into the system. There are small changes that we can make in the way that Social Security is collected that can make it viable. Hopefully after a retirement planner educates them on the benefits of waiting, almost all of them are going to do that.
Q. How about younger clients, the clients that are in their 30s. Do they assume that Social Security will be there for them as well?
Karla McAvoy: No, I would say that they’re definitely more cynical about whether Social Security will be there, at least the ones that we’ve worked with. We have a fairly high minimum [in personal assets], which is $1 million. So these tend to be pretty well established professionals, or younger couples that have received money, perhaps from an inheritance. But they tend to feel they may not have Social Security available. So they have a much stronger desire to save what they need for retirement. I can’t say that’s true across the entire generation, but I definitely see that among our clients.
Q. Obviously not everyone in their 30s thinks, ‘oh no, there’s not going to be anything left for me.’ And there are certainly people in their 40s and 50s who may have a very cynical attitude about how much they’re going to be able to collect. How should a planner’s advice differ for somebody who doesn’t expect that they’re going to be able to tap into Social Security?
Karla McAvoy: Typically, we do comprehensive financial planning, and we’ll run models and we’ll show -- based on this rate of savings and expenses and so on -- this is how we would expect your retirement to go. For those younger people especially who ask us to eliminate the Social Security benefit, we can do that and just show them that if you had a Social Security benefit this is what your retirement could look like. And if you do not, this is what it could look like. I would say most of them are pretty strongly in favor of saving anyway, so it just gives them a level of comfort that if can see if Social Security were there it would just give them a little boost in income in retirement.
Q. What is your advice to another retirement planner who is perhaps new in the game -- they haven’t been doing this long, and they haven’t seen Social Security from a historical perspective to know how to best ease the concerns and fears of a consumer who is worried about it?
Karla McAvoy: From a planner’s perspective I think it is very important to stay educated on what’s going on with legislation. There is plenty that you can read about the various reforms that are being proposed that could make Social Security viable for quite a long time. There is a web site called www.acquariary.org that has a fair amount of information about the various reforms that could be enacted that would continue to make Social Security viable. Education for us is probably one of the most important parts of our profession, so I think just going out and looking at some of these Congressional reforms that are out there.
Q. Is that how you keep yourself informed and up to speed on what is going on, or what other resources do you tap into?
Karla McAvoy: I’m a big reader. I read the Journal of Financial Planning. I have been very involved with numerous conferences for the profession. At almost every conference you will find information or sessions on Social Security. I may not attend one at every conference but certainly once a year or so I just go and catch up on it. I also subscribe to a web site called www.savvysocialsecurity.com. It is put out by a group called Horse’s Mouth. We rely on information there quite extensively. There are a whole variety of tools that you can use to model a particular client’s Social Security: what it would look like as a couple; what it would look like if one person dies quite early; what would happen if you wait and receive your Social Security at age 70. We use those models quite a bit to help clients as well.
Q. Getting back to the 100-year-olds, do you use them as examples when you talk to clients about their experiences in saving for retirement, and what their experiences were going through the various years in retirement? Do you point to them in any way as examples and if so, what do you have to say about them?
Karla McAvoy: We do all the time. One of the arguments that people always come in with on why they want to get Social Security at one of the earlier ages is, ‘I don’t think I’m going to live another 10 years,’ or some other argument like that. But the reality is that if you look at longevity statistics, if somebody has made it to 65 they’ve very likely to make it another 15 or 20 years. So I use the statistics. I also will be more than happy to say, ‘and you know what, we have clients that are over 100-years-old.’
Q. Are many clients surprised at the advice that they receive when they come in for a consultation versus what they would have anticipated?
Karla McAvoy: Some yes and some I think -- especially if we’ve been working with them for a while -- they kind of know where we’re headed with this. A lot of people will come in and have had that conversation with a friend or over a golf match or ‘so-and-so said I ought to be taking it right away, and you’re saying I shouldn’t,’ that’s where I start to lean on the numbers.
Q. What is your best advice for a retirement planner working with a married couple when it comes to Social Security? What should the strategy be?
Karla McAvoy: There are so many interesting strategies that you can employ for a couple. This is definitely a case where I would want to model various scenarios. There’s the strategy of each of them waiting [to collect0. If both of them have worked, especially if they have quite a large difference in their salaries, does it make sense for the one who’s making less to claim on their own benefit, or to claim the spousal benefit. There are various – they’re not really tricks but there are things out there that would allow the higher earner to “file and suspend” – so they could essentially say, I’d like to file for Social Security but I’m not going to collect on it. That allows their spouse to collect on it. This one I find much more difficult. I don’t think there is one simple answer. It is very personal, based on the couple, what they’re earning, if there is an age difference, if there are any health problems. I will find myself often running quite a number of scenarios to try to figure out what the best one is for them.
Q. What should planners recommend as the best alternatives to collecting Social Security at an early retirement age – that is, other assets or benefits that someone can tap into so that they don’t have to start collecting Social Security right away?
Karla McAvoy: The best asset that somebody can have is there job. So I think if you’re still working that allows you to push off collecting Social Security. In the absence of that – and this is becoming less likely -- if somebody can draw on a pension that can be helpful. In our client base, most have some other invested assets that they can begin to draw on to delay their Social Security for a few years.
Q. What is the advice that you think planners most want their clients to follow with regard to Social Security benefits?
Karla McAvoy: Don’t retire too early. This is advice that someone has to consider given their health, their energy, their interest in their job. But if all of those things are OK, it really helps to continue working. I think some people want to retire at 55 and 60 – and that may force them into a situation where they have to take Social Security earlier than would be advisable. Once somebody truly is retires and needs to draw income from somewhere I would say work with somebody or run the numbers yourself and see what a remarkable difference it makes to just push off collecting Social Security for even a few years. It continues to accumulate throughout your lifetime, and you probably are going to live longer than you think you are. Being able to collect that larger benefit can really help you.
Q. Finally, what would your parting advice be to retirement planners on how to best advise their clients?
Karla McAvoy: For retirement planners, keeping up on the legislation on what’s going on with Social Security so you can have answers to client concerns. And then, secondarily, becoming really familiar with the different strategies that are available with Social Security, especially in the way that couple can claim their benefits and even switch their benefits throughout the years to maximize the amount they receive.
NEW YORK (TheStreet) -- A week after President Obama said he would work with CEOs to return the long-term unemployed to the work force, the January jobs report on Friday failed to boost optimism in the U.S. economy.
And despite the president's plan to reward companies for hiring those who have been out of work for 27 weeks or longer -- which he discussed at a roundtable with successful chief executives -- it remains a long-shot initiative to fundamentally shift the sluggish labor recovery.
"Jobs are hard to create. I think people don't understand that," said Lee Munson, chief investment officer at Portfolio LLC, in a telephone interview. "Over the last 10 to 15 years companies are more interested in hiring the right people. There's a reason why companies don't hire long-term unemployed: They lack skills and the motivation."
But like most top-line data, these headline-grabbing numbers failed to communicate the full complexity of this latest report. There were in fact unexpected bright spots in the employment situation: Some sectors are adding jobs, in significant numbers, even as others are still shedding them. Here are three areas where the labor market is picking up steam, and three in which it continues to sputter.
Investors love bullish trends like the January Effect - but does this rally even exist like it used to?
The January Effect is stocks' tendency to rise during the first month of the year. It's often paired with the bullish year-end "Santa Claus Rally" as a reason to expect a market bump from December to January.
The biggest market jump in December - January is normally seen on the last five trading days of the year and the first two of the New Year. When isolating that single week, the Standard & Poor's 500 Index has posted an average gain of 1.8% since 1929. Stocks have risen 79% of the time during that week over the past 83 years.
The historical reasons for the January Effect, however, have changed.
Here's what that means for stocks, and for the January 2014 stock market.
Where Does the January Effect Come From?The January Effect was first defined in 1942 by investment banker Sidney B. Wachtel. It has traditionally been attributed to year-end tax considerations.
As the explanation goes, investors typically sell some stocks they've taken a loss on at the end of the year, so they can deduct that loss from their income tax. Once the new year rolls around, they buy back the same stock, pushing up prices.
But that explanation may be a bit simplistic.
Click here for the full list of January open and closing prices for each index during the years listed.
In 1929, the IRS instituted the Wash Sale Rule, which prohibits investors from claiming a loss on a sale and then repurchasing the same stock or a nearly identical stock within 30 days. Investors may be reinvesting the money taken from the previous sale of securities, but that IRS provision seems to debunk the myth that the selling and rebuying for tax purposes is the main share-price driver.
Tax-sheltered retirement plans have also grown in popularity in recent years, ending the need for many investors to sell and rebuy stocks for tax purposes.
Another explanation for the January Effect is the "window dressing" that mutual funds perform toward the end of the year.
In order to make their portfolios appear as strong as possible, mutual funds will often dump losing stocks during December. They will then take the money they made from selling their positions, and reinvest it in the new year, creating a bump.The fact that investors will often invest their year-end bonuses in stocks can contribute to a rise in the markets as well.
Typically the biggest January Effect winners are small-cap stocks, which historically outperform midsized and large-cap stocks that month.
According to the Chicago Board Options Exchange (CBOE), the Russell 2000 Index - which measures small-cap performance - saw an average January gain of 2.5% from 1980 through 2006. That compares favorably to the January gains of the S&P 500 at 1.7%, the Dow Jones Industrial Average at 1.6%, and the Russell 1000 at 1.6% during the same time frame.
In the past eight years, however, the January Effect has been more tame than usual.
Since 2006, the Russell 2000 has posted an average gain of just 1.98% in the month of January (Not accounting for 2009, when all major markets posted significant losses).
However, those numbers still far outpace the broader markets in January. During the same timeframe (except 2009), the Dow is up an average of 0.45% in January and the S&P 500 has posted an average gain of just 0.02%.
The last eight years haven't produced the same January Effect that investors saw for decades, but that doesn't necessarily mean the trend of higher markets at the start of the year is dead.
Money Morning's Global Investing & Income Strategist Robert Hsu recently pointed to high liquidity in the U.S. equity markets, encouraging unemployment figures and strong gross domestic product growth as reasons why investors should expect gains at the end of 2013 and into 2014.
"Money flow into global stock markets remains strong, fueling major averages higher into the holiday season," Hsu wrote to his Permanent Wealth Investor subscribers earlier this month. "Last month, TrimTabs Investment Research reported that more than $40 billion flowed into U.S. equity markets, much of it from cash sitting on the sidelines."
Bottom line: Even if the original "January Effect" has faded, expect the markets to continue rallying through the end of 2013 and into 2014.
Get started now for your best profits ever in 2014: How to Profit When Billionaires Battle - A Plan
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The New York Times:The Securities and Exchange Commission voted unanimously to propose rules that, for the first time, would allow investors to buy stock in companies over the Internet using a crowdfunding exchange. These rules could reinvent the way that companies raise money by allowing them to bypass the traditional costs of going public, which usually involved hiring costly investment bankers and accountants.
The SEC's vote on so-called equity crowdfunding is in direct response to Title III of the JOBS Act, passed last year, in which Congress is looking for a loophole to allow smaller companies to get an exemption from the strict rules controlling the sale of securities to individuals. Congress is hoping that by using Internet crowdfunding, small and promising companies could gather capital needed to grow and expand from a wide pool of investors. These companies could, in theory, raise money they need to grow well before they could afford the relatively high costs of a traditional initial public offering.
GT Advanced Technologies Inc., incorporated on September 27, 2006, is diversified technology company with crystal growth equipment and solutions for the global solar, light emitting diode (LED) and electronics industries. The Company operates in three segments: its polysilicon business, its photovoltaic (PV), business and its sapphire business. The Company's principal products are Silicon Deposition Reactors (SDR) and related equipment used to produce polysilicon, the key raw material used in silicon-based solar wafers and cells; Advanced sapphire crystallization furnaces (ASF) which are used to crystallize sapphire boules, and Directional solidification (DSS) furnaces and related equipment used to cast multicrystalline and MonoCast crystalline silicon ingots. On January 7, 2013, the Company announced the idling of its HiCz pilot manufacturing facility in Hazelwood, Missouri. On November 8, 2012, the Company acquired certain assets of Twin Creeks Technologies, Inc. (Twin Creeks). In May 2013, the Company acquired the business of Thermal Technology LLC.
PV Business
The focus of the Company's PV business is the development, manufacture and sales of crystallization growth furnaces to produce silicon ingots used in the production of solar wafers. The Company's principal product line has been the DSS family of casting furnaces that are used to produce multicrystalline ingots and MonoCast ingots. As of December 31, 2012, the Company shipped approximately 3,300 DSS crystallization furnaces. The ingots are used to make photovoltaic (PV) solar wafers and cells. HiCz, or continuous Czochralski (Cz) growth process, produces monocrystalline ingots that are designed to produce more efficient wafers. The Company�� DSS furnace is a specialized furnace used to melt polysilicon and cast multicrystalline ingots. Multicrystalline ingots are used to produce solar wafers, which ultimately become solar cells. The Company markets its DSS crystallization furnaces under the names DSS450HP and DSS6! 50. The Company's largest capacity DSS furnace, the DSS650, is capable of producing ingots that weigh up to 650 kilograms using standard silicon feedstock. In January 2012, the Company introduced its MonoCast silicon casting technology that uses the DSS furnace architecture to produce ingots comprised of a high percentage of monocrystalline material. The Company is markets MonoCast technology under the name DSS450 MonoCast.
The Company�� ancillary equipment provides operators with material handling assistance during the preparation of the crucible before it is loaded with silicon and during the loading and unloading of the crucible into the DSS furnace chamber at the start of the growth process and out of the DSS furnace chamber at the conclusion of the ingot growth process. The Company's ancillary equipment includes crucible coating stations, crucible manipulators, loaders/unloaders, extraction tools and other material handling systems required to safely transport material during the ingot growth process. The Company sells replacement parts and consumables used in its DSS furnaces and other PV equipment.
Polysilicon Business
The Company's polysilicon business offers Silicon Deposition Reactors, which utilize the chemical vapor deposition process, and related trichlorosilane (TCS) technology and equipment along with engineering services to existing polysilicon producers and new market entrants. The Company's polysilicon business focuses on product design, quality control, engineering services, project management and process development related to the production of polysilicon. It markets its SDR reactors under the names SDR300, SDR400, SDR 500 and SDR 600. The Company provides equipment, technology and engineering services for the production and purification of TCSand silane. This hydrochlorination technology eliminates the need for silicon tetrachloride converters which are required when using certain other polysilicon production technology. The Company also pr! ovides an! cillary equipment and technologies for producing seed rods used in its SDR reactors and for handling and processing the polysilicon rods into a finished product.
Sapphire Business
The Company's sapphire business markets and sells of the Company's ASF systems to customers to enable them to produce sapphire material. The Company also produces sapphire material, on a limited basis, for the LED and other specialty markets at its sapphire pilot production facility in Massachusetts. Its ASF systems produce monocrystalline sapphire material, referred to as sapphire boules. The sapphire boules are used to make sapphire wafers, a substrate for manufacturing LEDs, as well as sapphire blanks and windows for such applications as medical devices and watch crystals. The Company's ASF technology is based on the heat exchanger method (HEM), which is a directional solidification technique, which crystallizes the sapphire meltstock material during the growth process. The Company also uses the facility as a research and development (R&D) center to test new technology developments prior to commercial release. The Company markets and sells its ASF systems under the name ASF100. The Company also provides engineering and product design, quality control, process engineering, engineering services and field services related to the operation of its ASF furnaces. The Company produces sapphire material on a limited basis at its pilot production facility in Massachusetts. The Company sells this material to customers in the LED and other markets, such as the aerospace, defenses and medical device.
The Company manufactures and sells two principal types of sapphire materials: hems Sapphire Material and Titanium-doped Sapphire (Ti:Sapphire) Material. Using the material derives from the sapphire boule generated with its ASF furnaces, the Company cut the sapphire material in a number of different dimensions and crystal orientations, in form factors such as cores, rods, blanks, windows and tubes. The! Company ! generates sapphire boules that are doped with titanium. The Company provides certain finishing and polishing for its Ti:Sapphire material.
The Company competes with ALD Vacuum Technologies AG, JYT Corporation, Ferrotec Corporation, PVA TePla AG, Centrotherm Elektrische Anlagen GmbH & Co., Jing Gong Technology, Zhejiang Jingsheng Mechanical & Electrical Co., Ltd, MSA Apparatus Construction for Chemical Equipment Ltd, Centrotherm Elektrische Anlagen GmbH & Co., Morimatsu Industry Co. Ltd., Poly Plant Project, Inc., Hemlock Semiconductor Corporation, Wacker Chemie AG, MEMC Electronic Materials, Inc., Renewable Energy Corporation ASA, Thermal Technology LLC, Advanced Renewable Energy Company, LLC, Rubicon Technology, Inc., Sapphire Technology Co. Ltd. (Korea), Kyocera International Inc., Saint-Gobain, Gavish Inc., and Monocrystal.
Advisors' Opinion:We have tracked the short interest in the following North American Solar companies as of September 13: Canadian Solar Inc. (NASDAQ: CSIQ), First Solar Inc. (NASDAQ: FSLR), GT Advanced Technologies Inc. (NASDAQ: GTAT), SunEdison Inc. (NYSE: SUNE) and SunPower Corp. (NASDAQ: SPWR).
The new road map is aggressive, but First Solar has one of the best research and development teams in the industry, and I think it has a good chance of reaching these goals. What may matter more than First Solar's progress in thin film is how quickly crystalline silicon modules are able to increase efficiency over the same time frame. As I said, SunPower is already producing modules at 21.5% efficiency, and this year GT Advanced Technologies (NASDAQ: GTAT ) is introducing equipment it says will increase crystalline cell efficiencies by 4% or more to more than 22% efficient (about a 20% efficient module). �
After years of growing along with the solar market,�GT Advanced Technologies (NASDAQ: GTAT ) is experiencing the same downturn solar has. To make matters worse, the company's huge investment in sapphire has also run into excess supply and falling prices, causing a drop in sales there, as well.
Castle Resources Inc., a junior resource company, engages in the acquisition, exploration, and development of mineral resource properties in British Columbia and New Brunswick, Canada. It principally focuses on the exploration of its 100% owned Granduc Copper Mine located in British Columbia. The company is headquartered in Toronto, Canada.
Electro-Sensors, Inc. engages in the manufacture and distribution of industrial production monitoring and process control systems; and the development and distribution of PC-based software for automated survey processing and hand printed character recognition. Its Production Monitoring Division manufactures and sells various monitoring systems that measure actual machine production and operation rates, as well as systems that regulate the speed of related machines in production processes. This division?s products comprise speed monitoring systems, including a line of digital products, which translate sensor impulses from its production monitoring systems into digital readouts indicating production counts or rates, such as parts, gallons, or board feet; alarm systems, tachometers, and other devices that translate impulses from the sensors into alarm signals, computer inputs, or digital displays; and drive control system products, which monitor machine operation levels and r egulate the speed of motors on related machines in a production sequence. It serves grain, feed, biofuels, food processing, chemicals, agricultural, mining, utility, forest products, steel, tire, glass, and electronics industries. This division sells its products through home office sales force, manufacturer?s representatives, and distributors in the United States, Mexico, China, Canada, Peru, Chile, Bolivia, Colombia, Thailand, Israel, Malaysia, Singapore, the Great Britain, and South Africa. The company?s AutoData Systems Division designs and markets desktop software based systems that read handprinted characters, checkmarks, and bar code information from scanned or faxed forms, as well as collects and reports data from Web forms. This division markets its products primarily through home office sales personnel, as well as through value-added resellers in the United States, Canada, and western Europe. Electro-Sensors, Inc. was founded in 1968 and is based in Minnetonka, Min nesota.
Advisors' Opinion:The current dividend yield is 3.1% outperforming not just the industry average (1.91%), but also the company Electro-Sensors, Inc. (ELSE) with a 3% dividend yield. So dividends are considered good to protect the purchasing power and might attract investors, because is a good option for them to receive cash while they are waiting for more upside appreciation.
Fortis Inc. operates as an electricity and natural gas distribution utility in Canada. The company distributes natural gas to residential and commercial customers in British Columbia; owns and operates the natural gas transmission pipeline from the Greater Vancouver area across the Georgia Strait to Vancouver Island, and serves customers on Vancouver Island and along the Sunshine Coast of British Columbia; and owns and operates the natural gas distribution system in the Resort Municipality of Whistler, British Columbia. It also owns and operates the electricity distribution system in southern and central Alberta; owns 4 hydroelectric generating facilities with a combined capacity of 223 megawatts; provides operation, maintenance, and management services to hydroelectric plants and distribution systems; distributes electricity on Prince Edward Island, Ontario, and the island portion of Newfoundland and Labrador. In addition, the company generates and distributes electricity in Belize, Central America; Grand Cayman, Cayman Islands; and Turks and Caicos Islands. Further, it operates non-regulated generating assets in Belize, Ontario, Central Newfoundland, British Columbia, and Upstate New York State; and owns and operates 23 hotels comprising 4,400 rooms in 8 Canadian provinces, and approximately 2.7 million square feet of commercial office and retail space primarily in Atlantic Canada. The company serves approximately 2,000,000 gas and electricity customers. Fortis Inc. was founded in 1977 and is headquartered in St. John's, Canada.
TeamStaff, Inc., through its subsidiary, DLH Solutions, Inc. provides healthcare delivery solutions, logistics and technical services, and contingency/staff augmentation services. The company offers healthcare delivery solutions, including medical and other professionals; professional services, such as case management, health and injury assessment, critical care, medical/surgical, emergency room/trauma center, counseling, behavioral health and trauma brain injury, medical systems analysis, and medical logistics; and allied support services in the areas of MRI technology, diagnostic sonography, phlebotomy, dosimetry, physical therapy, and pharmaceuticals. It also provides logistics and technical services in the areas of supply chain management, performance-based logistics, distribution center and inventory management, statistical process control, packaging/handling/storage and transportation, and supply support operations. The company?s logistics and technical services als o include program and project management, systems engineering and applicable information technology services, integrated logistics support, readiness assessments, training, equipment and non-tactical vehicle operations and maintenance, hazardous material management, and facilities and shipyard support services. In addition, its contingency/staff augmentation line of service provides disaster and emergency response services with its legacy staffing and civilian workforce augmentation services. The company offers its services to the department of veteran affairs, department of defense, and federal government in the categories of logistics, office administration, information technology, and facilities/warehouse management. TeamStaff, Inc. was founded in 1969 and is headquartered in Atlanta, Georgia.
Nuveen Texas Quality Income Municipal Fund is a closed-ended fixed income mutual fund launched by Nuveen Investments, Inc. The fund is managed by Nuveen Asset Management. It invests in the fixed income markets of Texas. The fund invests primarily in municipal securities rated Baa/BBB or better. It invests in securities that provide income exempt from federal and Texas income tax. The fund employs fundamental analysis with bottom-up stock picking approach to create its portfolio. It benchmarks the performance of its portfolio against the S&P National Municipal Bond Index and the S&P Texas Municipal Bond Index. Nuveen Texas Quality Income Municipal Fund was formed on July 26, 1991 and is domiciled in the United States.
Pistol Bay Mining Inc., a diversified junior mineral exploration company, engages in the exploration and development of precious and base metal properties in North America. The company primarily focuses on exploration for gold, uranium, copper, silver, and iron ore deposits. It focuses on projects in British Columbia, Saskatchewan, Ontario, and Quebec. The company was formerly known as Solitaire Minerals Corp. and changed its name to Pistol Bay Mining Inc. in November 2012. Pistol Bay Mining Inc. is headquartered in Vancouver, Canada.
Viad Corp, together with its subsidiaries, operates in exhibition and events, and travel and recreation industries primarily in North America, the United Kingdom, Germany, and the United Arab Emirates. The company?s Marketing & Events Group segment designs, plans, and produces face-to-face events for show organizers, corporate brand marketers, and retail shopping centers. It offers general event management, planning and consultation, concept design, exhibition layout and design, graphics and design, show traffic analysis, carpeting and flooring, decorating products and accessories, custom graphics, overhead rigging, and cleaning services, as well as temporary electrical, lighting, and plumbing services. This segment also provides custom exhibit design and construction; portable and modular exhibits and design; integrated marketing, including pre- and post-event communications and customer relationship management; multimedia services; event surveys; return on investment an alysis; attendee and exhibit booth traffic analysis; staff training; online management tools; logistics and freight-forwarding, storage, and refurbishment of exhibits; booth furnishings, carpeting, and signage; in-house installation and dismantling; and various other show services. In addition, the segment offers various entertaining attractions and brand-based experiences, sponsored events, mobile marketing and other branded entertainment, and face-to-face marketing solutions for clients and venues, including movie studios, leading consumer brand marketers, shopping malls, museums, and casinos. Its Travel & Recreation Group segment provides tourism products, including attractions, transportation services, inbound package tour operations, hotel operations, and corporate and event management; operates five lodges, three motor inns, and one resort hotel; and engages in food and beverages, and retail and concession businesses. Viad Corp was founded in 1914 and is headquartered in Phoenix, Arizona.
Advisors' Opinion:Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Viad Corp (NYSE: VVI ) , whose recent revenue and earnings are plotted below.
United-Guardian, Inc. researches, develops, manufactures, and markets cosmetic ingredients, personal and health care products, pharmaceuticals, and specialty industrial products in the United States, Canada, China, France, and internationally. Its personal care products include LUBRAJEL, a line of water-based moisturizing and lubricating gel formulations; KLENSOFT, a surfactant for cosmetic formulations; UNITWIX, a cosmetic additive used as a thickener for oils and oil-based liquids; CONFETTI DERMAL DELIVERY FLAKES for use in various water-based products; ORCHID COMPLEX, a base for cosmetics; LUBRASLIDE and B-122 lubricants used in cosmetics; AQUATHIK, a powder used as a gelling agent for aqueous solutions or emulsions; and HYDRAJEL PL, a personal lubricant for the feminine personal care market. The company?s medical products comprise LUBRAJEL RR and RC water-based gels used as lubricants for catheters; LUBRAJEL MG to lubricate urinary catheters, prelubricated enema tips, and other medical devices; LUBRAJEL LC, a mouth moisturizer for oral use; and LUBRAJEL FLUID to lubricate water-soluble products. Its pharmaceuticals consists of RENACIDIN, a prescription drug to prevent and dissolve calcifications in urethral catheters and the urinary bladder; and CLORPACTIN WCS-90, an antimicrobial for use in urology and surgery to treat infections in the urinary bladder. United-Guardian?s industrial products include DESELEX Liquid, a sequestering and chelating agent; and POLYCOMPLEX M and Q complexing agents to produce clear solutions of water-insoluble materials. The company distributes its products to drug wholesalers, drug stores, hospitals, physicians, long-term care facilities, Veteran?s Administration, and other government agencies through marketing partners, distributors, advertising in medical and trade journals, mailings to physicians, and exhibitions. United-Guardian, Inc. was founded in 1942 and is based in Hauppauge, New York.
Advisors' Opinion:PSA Peugeot Citroen (UG) climbed 17 percent. Europe�� second- largest automaker reported first-quarter revenue fell 6.5 percent to 13 billion euros, beating the 12.7 billion-euro average analyst estimate in a Bloomberg survey, as delivery growth in China and Latin America limited the decline.
The new chairman of the Certified Financial Planner Board of Standards Inc. doesn't intend to change how the organization identifies a fee-only planner.
“At this point, we think our rules are clear and we have the definitions that are in place,” Ray Ferrara, who was appointed last week, said in an interview. “They're the ones that we're working with at the present time. The board will make its own determination as to what's the best thing to do on a going-forward basis.”
The CFP Board, which grants the CFP designation and upholds its educational and ethical requirements, has been embroiled in enforcement cases and other controversies about its fee-only definition for more than a year.
Under CFP rules, investment advisers can use the fee-only designation only if they charge fees for advice and are not affiliated with any financial services business that charges commissions — even they don't collect commissions themselves. The CFP Board asserts that the rule helps protect investors.
The National Association of Personal Financial Advisors, an organization made up of fee-only planners, allows its members to own up to 2% of a financial company that charges commissions. About 5% of NAPFA's approximately 2,500 members run afoul of the CFP Board's rule. NAPFA now requires new members to hold a CFP mark.
Mr. Ferrara distinguished between the CFP Board, a certification body, and NAPFA, a membership organization.
“It's okay to have different definitions because we have two entirely different purposes,” said Mr. Ferrara, president and chief executive of ProVise Management Group.
NAPFA has called for a dialogue between the CFP Board and the planning sector over the fee-only description. A NAPFA spokesman was not immediately available for comment.
Michael Kitces, director of research at Pinnacle Advisory Group, criticized NAPFA for what he characterized as its acquiescence in the debate, which spiked last year when the CFP Board removed the fee-only label from 8,000 CFPs listed on its website and asked them to review the definition before resetting the term.
“I don't understand how they can be silent,” said Mr. Kitces, publisher of the Nerd's Eye View blog. “That's both a
conflict for the organization and a dramatic abandonment of its leadership on the fee-only term.”
The CFP Board is not under any particular pressure to change its fee-only definition, Mr. Ferrara said.
“The compensation issue is not top-of-mind for the vast majority of the CFP professionals,” Mr. Ferrara said. “They're worried about their clients; they're worried about keeping their competence up through continuing education; they're worried about! finding others to work with to help them grow their business.”
Growth also is a priority for the CFP Board, according to Mr. Ferrara. It wants to increase the number of CFP certificants to 81,000 by the end of 2017, up from approximately 69,000 today.
Doing so will require convincing financial-planning college students to sit for the CFP exam after they graduate. A study last year showed that they tend to bypass the test.
“Many of them are being advised to wait to take the exam later,” Mr. Ferrara said. “I can't think of a better time for them to be taking the exam than as soon as they're finished with school.”
Next week, the CFP Board will conduct a program in Boston with Fidelity Investments designed to help faculty from about 20 financial-planning programs understand potential career paths for investment advisers.
The student pipeline is critical to meeting the 81,000 goal, according to Diahann Lassus, president of Lassus Wherley & Associates.
“The reality is that we've not yet reached a point where people looking to get into financial planning automatically assume they need the CFP the way students studying accounting assume they'll have to sit for the CPA exam,” Ms. Lassus said.
While the CFP Board is seeking new certificants, it also is seeing many retire.
“There is some question of whether they can grow new CFP certificants to replace the retirees and increase the head count,” Mr. Kitces said.
Another way the CFP Board is trying to attract more certificants is through its multimillion-dollar advertising campaign. It will spend $10 million — financed by higher CFP renewal fees — on the effort this year. It launched its newest ad on Monday.
“When a consumer walks into the adviser's office and asks: 'Are you a CFP?' and the adviser says: 'No,' perhaps they'll get a message when the person doesn't come back,” Mr. Ferrara said.
Wendy Laidlaw, vice president of R.M. Davis Inc., said that paying higher ! renewal f! ees for the awareness initiative is a worthwhile investment.
“A sophisticated campaign does not come cheap,” Ms. Laidlaw said. “If we want the long-term benefits we're looking for, we need to be willing to pay for it.”
Related BZSUM Market Wrap For February 5: Markets Unsure Of Which Direction To Take Mid-Afternoon Market Update: Sprint Rises on News it Has the Financing to Acquire T-Mobile Midway through trading Wednesday, the Dow traded up 0.05 percent to 15,453.62 while the NASDAQ tumbled 0.41 percent to 4,015.13. The S&P also fell, dropping 0.16 percent to 1,752.35.
Top Headline
Time Warner (NYSE: TWX) reported a 12% drop in its fourth-quarter profit. Time Warner's quarterly profit fell to $983 million, or $1.06 per share, from a year-ago profit of $1.11 billion, or $1.15 per share.
Excluding one-time items, its earnings climbed to $1.17 per share from $1.16 per share. Its revenue climbed 4.9% to $8.57 billion. However, analysts were projecting earnings of $1.15 per share on revenue of $8.39 billion.
Equities Trading UP
Tableau Software (NYSE: DATA) shot up 15.54 percent to $91.77 after the company reported upbeat Q4 results. FBN Securities lifted the price target on the stock from $85.00 to $110.00.
Shares of Myriad Genetics (NASDAQ: MYGN) got a boost, shooting up 10.63 percent to $30.07 after the company reported upbeat fiscal second-quarter results and lifted its revenue outlook for the year. Myriad also bought Crescendo Bioscience for $270 million.
Level 3 Communications (NYSE: LVLT) was also up, gaining 8.89 percent to $34.20 on Q4 results.
Equities Trading DOWN
Shares of 3D Systems (NYSE: DDD) were down 18.35 percent to $61.86 after the company lowered its quarterly earnings outlook.
Extreme Networks (NASDAQ: EXTR) shares tumbled 17.33 percent to $5.82 after the company reported downbeat Q2 results and issued a weak Q3 profit forecast.
CH Robinson Worldwide (NASDAQ: CHRW) was down, falling 8.99 percent to $53.37 after the company reported downbeat Q4 results.
Commodities
In commodity news, oil traded up 0.07 percent to $97.26, while gold traded up 0.60 percent to $1,258.70.
Silver traded up 2.18 percent Wednesday to $19.85, while copper fell 0.03 percent to $3.19.
Eurozone
European shares were mostly higher today.
The Spanish Ibex Index rose 0.21 percent, while Italy's FTSE MIB Index gained 0.26 percent.
Meanwhile, the German DAX tumbled 0.13 percent and the French CAC 40 gained 0.01 percent while U.K. shares rose 0.13 percent.
Economics
The MBA reported that its index of mortgage application activity rose 0.4% in week ended January 31.
U.S. private sector employers added 175,000 jobs in January, Automatic Data Processing said. However, economists were expecting an addition of 185,000 jobs in the month.
The ISM non-manufacturing composite index rose to 54.00 in January, versus a prior reading of 53.00. However, economists were expecting a reading of 53.70.
Crude oil supplies climbed 400,000 barrels for the week ended January 31, the U.S. Energy Information Administration reported. However, analysts were expecting a gain of 1.5 million barrels.
Gasoline supplies increased 500,000 barrels, while distillate supplies declined 2.4 million barrels in the same period.
Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech
(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Most Popular The Next Altcoin To Hit $20 Million? 3D Systems Announces Preliminary Full Year 2013 Results; Guides Revenue in the Range of $513M-514M; Previous Guidance Was $500M-530M Ugly Alert: 3D Systems Announces Preliminary Full Year Results Twitter Earnings Preview: Humble Beginnings Earnings Scheduled For February 4, 2014 Market Wrap For February 4: Investors And Traders Go Bargain Hunting Related Articles (CHRW + BZSUM) Market Wrap For February 5: Markets Unsure Of Which Direction To Take Mid-Afternoon Market Update: Sprint Rises on News it Has the Financing to Acquire T-Mobile Mid-Day Market Update: CH Robinson Shares Drop On Downbeat Results; Tableau Spikes Higher Mid-Morning Market Update: Markets Open Lower; Time Warner Earnings Beat Street View Stocks Hitting 52-Week Lows #PreMarket Primer: Wednesday, February 5: A Weak Rebound Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. TurfEnbridge (ENB) has been named to the Dividend Channel ”International S.A.F.E. 10” list, signifying an international stock with above-average ”DividendRank” statistics including a strong dividend yield, as well as a superb track record of at least five years of dividend growth, according to the most recent ”DividendRank” report.
According to the ETF Finder at ETF Channel, Enbridge stock is an underlying holding representing 1.97% of the Powershares International Dividend Achievers ETF (PID), which holds $20,709,837 worth of ENB shares.
Enbridge stock made the “Dividend Channel International S.A.F.E. 10″ list because of these qualities: S. Solid return — hefty yield and strong DividendRank characteristics; A. Accelerating amount — consistent dividend increases over time; F. Flawless five year history — never a missed or lowered dividend; E. Enduring — at least a half-decade of dividend payments.
Start slideshow:The annualized dividend paid by Enbridge stock is $1.32 per share, currently paid in quarterly installments, and its most recent dividend ex-date was on 02/12/2014. Below is a long-term dividend history chart for ENB, which the report stressed as being of key importance.
ENB operates in the Oil & Gas Equipment & Services sector, among companies like Schlumberger (SLB), and Enterprise Products Partners L.P. (EPD).
With shares of Wal-Mart (NYSE:WMT) trading around $75, is WMT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s MovementWal-Mart operates retail stores in various formats around the world. The company aims to price items at the lowest price every day. Wal-Mart operates in three business segments: the Walmart U.S. segment, the Walmart international segment, and the Sam's Club segment. It manages retail stores, restaurants, discount stores, supermarkets, super centers, hypermarkets, warehouse clubs, apparel stores, Sam's Clubs, neighborhood markets, and other small formats, as well as Walmart.com and SamsClub.com. Through its retail channels, Wal-Mart is able to provide a variety of products and services at affordable prices to consumers and companies worldwide.
Wal-Mart Stores said on Friday that bad weather and reduced food stamp benefits in the United States had dragged down comparable-store sales in the fiscal fourth-quarter, more than offsetting a positive bump from the holiday season. The news came the same day the world’s largest retailer shaved its quarterly outlook to account for special items, including those tied to its store closures in Brazil and China and its Sam’s Club restructuring in the United States. It now expects earnings for the fourth-quarter ending January 31 to be at or slightly below the low end of its previous forecast of $1.60 to $1.70 a share. ”Wal-Mart caters to lower-income consumers which have been hit disproportionately hard relative to higher-income consumers,” said Morningstar analyst Ken Perkins.
T = Technicals on the Stock Chart Are MixedWal-Mart stock has been trending higher over the last couple of years. The stock is currently trading sideways and may need time to stabilize. 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, Wal-Mart is trading below its rising key averages, which signal neutral to bearish price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Wal-Mart options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Wal-Mart options | 17.89% | 96% | 94% |
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.
| Put IV Skew | Call IV Skew | |
| February Options | Steep | Average |
| March Options | Steep | Average |
As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish 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 bearish 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 Increasing Quarter-Over-QuarterRising 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 Wal-Mart’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Wal-Mart look like and more importantly, how did the markets like these numbers?
| 2013 Q3 | 2013 Q2 | 2013 Q1 | 2012 Q4 | |
| Earnings Growth (Y-O-Y) | 5.56% | 5.93% | 4.59% | 11.14% |
| Revenue Growth (Y-O-Y) | 1.66% | 1.68% | 1.04% | 3.86% |
| Earnings Reaction | 0.22% | -2.60% | -1.70% | 1.51% |
Wal-Mart has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Wal-Mart’s recent earnings announcements.
P = Excellent Relative Performance Versus Peers and SectorHow has Wal-Mart stock done relative to its peers, Target (NYSE:TGT), Costco (NASDAQ:COST), Kohl’s (NYSE:KSS), and sector?
| Wal-Mart | Target | Costco | Kohl’s | Sector | |
| Year-to-Date Return | -4.56% | -10.70% | -5.01% | -10.60% | -6.71% |
Wal-Mart has been a relative performance leader, year-to-date.
ConclusionWal-Mart is a retail company that provides a variety of products and services to consumers and companies worldwide. The company now expects earnings for the fourth-quarter to be at or slightly below the low end of its previous forecast of $1.60 to $1.70 a share. The stock has made some progress in recent quarters, but is currently trading sideways. Over the last four quarters, earnings and revenues have been increasing. However, investors have had mixed feelings about Wal-Mart's recent earnings announcements. Relative to its peers and sector, Wal-Mart has been a relative year-to-date performance leader. Look for Wal-Mart to continue to OUTPERFORM.
The legendary hedge fund investor and philanthropist Steve Mandel founded Lone Pine Capital LLC in 1997.� His hedge fund is named after a pine tree at Dartmouth College, his alma mater.� Legend has it that the lone pine tree survived a lightning strike in 1887.
Prior to founding Lone Pine Capital, Mandel was the senior managing director and consumer analyst at Tiger Management Corporation, where he earned his Tiger Cub fame working for the legendary Julian Robertson for seven years.� Mandel was also a mass-market retailing analyst at Goldman Sachs for six years, and a senior consultant at Mars and Company, when he was fresh out of Harvard in 1982 with an MBA.
Guru Mandel is the managing director and portfolio manager of Lone Pine Capital, a privately-owned hedge fund based in Greenwich, Connecticut. With offices in London, Hong Kong and New York, Lone Pine invests in public equity markets globally and has consistently beaten the S&P 500 index by over 20% since it started in 1997.
New Gold Inc. engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. The company primarily explore for gold, silver, and copper deposits. Its operating properties include the Mesquite gold mine in the United States; the Cerro San Pedro gold-silver mine in Mexico; and the Peak gold-copper mine in Australia. The company also has development projects, including the New Afton gold, silver, and copper project in Canada; and a 30% interest in the El Morro copper-gold project in Chile. The company was formerly known as DRC Resources Corporation and changed its name to New Gold Inc. in June 2005. New Gold Inc. was founded in 1980 and is headquartered in Vancouver, Canada.
Advisors' Opinion:Even bad news has failed to dent the rise in gold stocks today. NewGold (NGD), for instance, has gained 1.8% to $7.49 despite the fact that the wall of one of its mines collapsed. The Wall Street Journal has the details:
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:Huge Holdings Point to Long-Term Commitment
Since First Eagle recently increased its stake in Anglogold by more than 20%, bringing his total holding to over 32.5 million shares, I believe we are looking at a long-term investment. I am keen on pointing this out, since the stock is currently performing very poorly, and has already lost around 275% of its value year to date. Above average production costs and plummeting gold prices have put a huge deal of pressure on the gold miner, leading to very poor results. In addition, since many of its operations are in geopolitically risky countries such as Mali and the Democratic Republic of Congo, shareholders have been shedding this stock in large volumes.
Although Anglogold had a very rough year, and will continue to face elevated cash costs and reduced margins going into 2014, there are some positive signals looking forward. One of the most promising features, are the firm�� operations in South America and Australia, which are enjoying solid organic growth. Although investors will have to wait some years for assets in these regions to reach full production, large profits should be achieved in the long-term. In other words, First Eagle surely has its eyes set on the company�� new projects, and their future growth potential.
Projected Growth and Low Price
Another attractive feature investors must keep in mind is a stock�� growth potential. When looking at Anglogold, this becomes especially relevant, as a comparison to Barrick Gold Corp (ABX) will demonstrate. Anglogold currently offers 13.6% returns on invested capital, compared to Barrick�� -2.8%, and has an EBITDA growth rate of 465.7%, the highest in the industry. Thus, whereas the Canadian miner has a negative EPS
Anglogold Ashanti Limited (AU)
Down 65% over 12 months, Anglogold Ashanti Limited has a market cap of $4.85 billion, and trades with a P/E of 8.10.
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.
Advisors' Opinion:Monday
Earnings Releases Expected: Black Hills Corporation (NYSE: BKH), CME Group Inc. (NASDAQ: CME), Leapfrog Enterprises (NYSE: LF), Hill International, Inc. (NYSE: HIL) Economic Releases Expected: eurozone manufacturing PMI, British construction PMI, US factory orders, Chinese services PMI, Indian services PMITuesday
Among exchanges, the action is beyond the stock market. With the rise in trading of futures, options, and other derivative investments, NYSE Euronext's ownership of the NYSE Liffe exchange in London was a key element of ICE's interest. CME Group (NASDAQ: CME ) and CBOE Holdings (NASDAQ: CBOE ) have worked hard to preserve their respective strength in futures and options, and rising market turbulence has made many of their products look a lot more enticing. Given that derivatives can help hedge market risk and reduce overall exposure, all of the exchange companies have an opportunity to bolster their presence in the derivatives market with innovative products that meet the new needs investors have in a more turbulent financial environment.
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.
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.
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.
IAMGOLD Corporation, together with its subsidiaries, engages in the exploration, development, and production of mineral resource properties worldwide. It primarily explores for gold, silver, zinc, copper, niobium, diamonds, and other metals. The company holds interests in eight operating gold mines, a niobium producer, a diamond royalty, and exploration and development projects located in Africa and the Americas. Its advanced exploration and development projects include the Westwood project in Canada; and the Quimsacocha project, which consists of 3 mining concessions covering an aggregate area of approximately 8,030 hectares in Ecuador. The company was formerly known as IAMGOLD International African Mining Gold Corporation and changed its name to IAMGOLD Corporation in June 1997. IAMGOLD Corporation was founded in 1990 and is based in Toronto, Canada.
Advisors' Opinion:Air France led airlines lower, falling 4 percent to 7.30 euros. International Consolidated Airlines Group SA (IAG) lost 1.9 percent to 270.7 pence while Deutsche Lufthansa AG slid 2.1 percent to 15.75 euros.
Royal Bank of Scotland Group Plc sank 3.3 percent after reporting results and naming the head of its U.K. consumer unit as chief executive officer. William Hill Plc (WMH) dropped the most in four years after the bookmaker posted earnings that missed analysts��projections. International Consolidated Airlines Group SA (IAG) rose to a five-year high as the parent of British Airways reported an operating profit in the second quarter.
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:More fundamental to the structural shift in the market is that after an extended period of underperformance by gold miners such as Goldcorp (NYSE: GG ) and Newmont Mining (NYSE: NEM ) , this phenomenon has reversed for the time being. As of this writing, since the two-day collapse, GLD is up under 7% as compared with a rise of nearly 8.5% for Newmont and a 12.5% surge for Goldcorp. The miners are probably benefiting from the shift toward bullion. If the miners are able to reverse this market preference for gold over gold miners, it could have long-term ramifications for gold in general.
With the price of gold cooling off over the last week, the roller-coaster ride for both the SPDR Gold Trust (NYSEMKT: GLD ) and for big miners like Goldcorp (NYSE: GG ) , Barrick Gold (NYSE: ABX ) , and Newmont Mining (NYSE: NEM ) is in full effect, and the rush back to gold seems over. A drop in demand would normally signal the end of a trend, but Dennis Gartman of "The Gartman Letter" urges us to think about gold in a new light 芒�� as a currency.
First, and most important, earnings estimates are stabilizing. In the past sixty days, 2013 estimates for the major gold miners have begun to tick up. In most cases, the increase is very modest. For instance, Goldcorp‘s (GG) EPS estimates have climbed from $0.91 to $0.95, while Barrick Gold‘s (ABX) have inched up from $2.57 to $2.64. Newmont Mining (NEM), Anglogold Ashanti (AU), and Gold Fields Ltd. (GFI) have shown similar gains. This positive rate of change marks a significant departure from the steady stream of bad news investors have had to endure in recent years.
First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.
Advisors' Opinion:It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD ) and iShares Silver Trust (NYSEMKT: SLV ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG ) and Barrick Gold (NYSE: ABX ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW ) .
Asian stocks fell, with the equity gauge excluding Japan posting its first drop in eight days, as signs the U.S. economy is strengthening fueled speculation that the Federal Reserve will soon start tapering stimulus.
Newcrest Mining Ltd. (NCM), Australia's biggest gold producer, sank 6.7 percent as bullion traded near a five-month low. Hyundai Motor Co., South Korea's top carmaker, lost 4.2 percent as November sales fell. Sekisui Chemical Co. surged 7.5 percent in Tokyo on a report it developed a material that triples the capacity of electric-vehicle batteries.
The MSCI Asia Pacific ex-Japan Index dropped 0.5 percent to 472.12 at 9:16 p.m. in Tokyo. The broader regional gauge lost less than 0.1 percent to 141.63 as seven of its 10 industry groups fell. More than $8 trillion has been added to the value of global equities this year, the most since 2009, as central banks took steps to shore up economies worldwide. U.S. stocks slid yesterday as investors weighed the impact stronger manufacturing data will have on Fed bond buying.
"Economic data over the past few weeks have been progressively coming in better and markets are now in the mood to put good economic news as bad news because that will bring forward any reduction in central-bank support," Matthew Sherwood, head of investment markets research at Perpetual Ltd., which manages about $25 billion, said by telephone. "There might be a little bit of downward pressure this month."
Regional GaugesHong Kong's Hang Seng Index retreated 0.5 percent. South Korea's Kospi index dropped 1.1 percent. Australia's S&P/ASX 200 Index lost 0.4 percent, while New Zealand's NZX 50 Index declined 0.2 percent. Taiwan's Taiex index fell 0.3 percent.
Japan's Nikkei 225 Stock Average rose 0.6 percent to its highest level since December 2007, while the Topix index gained 0.3 percent. Shares climbed as the yen fell to a six-month low against the dollar.
The FTSE Bursa Malaysia Index (FBMKLCI) gained 0.3 percent to a record close. Tenaga Nasional Bhd. jumped by the most in 2 1/2 years after the government allowed the electricity producer to raise prices. Singapore's Straits Times Index decreased less than 0.1 percent.
China's Shanghai Composite Index advanced 0.7 percent. The nation's non-manufacturing purchasing managers' index fell to 56 last month from 56.3 in October, according to a report released today by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. A reading above 50 indicates expansion.
Australia retail sales increased 0.5 percent in October from the previous month, beating economists estimates, while the current-account deficit for the third quarter widened more than forecast. The Reserve Bank of Australia kept its benchmark rate at a record-low 2.5 percent today, in line with the consensus view of all 30 economists surveyed by Bloomberg News.
Relative ValueThe Asia-Pacific equity index jumped 9.5 percent this year through yesterday amid signs the global economy is recovering.
Futures (SPA) on the Standard & Poor's 500 Index lost 0.3 percent today. The U.S. equities benchmark index dropped 0.3 percent yesterday amid data that showed manufacturing unexpectedly climbed last month and retail spending fell on the weekend after Thanksgiving for the first time since 2009.
The U.S. Institute for Supply Management's manufacturing index rose to 57.3 in November, a report yesterday showed, after economists surveyed by Bloomberg called for a drop to 55.1. Four of five investors surveyed last month saying they expect Federal Reserve policy makers to put off cuts to their $85 billion-a-month in bond purchases until March 2014 or later.
Gold MinersGold producers dropped after the bullion fell yesterday to the lowest close since June 27 and headed for for its first annual decline in 13 years. Newcrest dropped 6.7 percent to A$7.25. Zijin Mining Group Co., China's largest producer of the precious metal, dropped 1.7 percent to HK$1.76 in Hong Kong.
Hyundai Motor lost 4.2 percent to 239,000 won in Seoul as falling car sales damped the outlook for fourth-quarter earnings. Hyundai unit Kia Motors Corp. dropped 5.2 percent to 56,500 won.
Sekisui Chemical rose 7.5 percent to 1,298 yen in Tokyo. The Nikkei newspaper reported that the company developed a cheaper and longer-lasting material for lithium-ion batteries used in electric vehicles.
