If a company in your portfolio issues a profit warning should you sell, buy more or just stay invested?
That is exactly the question I asked myself after experiencing quite a few profit warnings recently. I wondered if there wasn't a tested rule I could follow that for example says sell immediately after the profit warning is announced and buy the position back in a few months' time.
I decided to take a look at a research studies on profit warnings to see if there is not a strategy that will make you come out ahead.
The first, and most practical, study I found was a research note written in September 2008 by James Montier when he was still with Societe Generale called Maximum Pessimism, Profit Warnings and the Heat of the Moment.
The study was also published in James' excellent book called "Value Investing: Tools and Techniques for Intelligent Investment."
In the note James argues that humans are very bad at making decisions and procrastinate under pressure and thus it would be best if you have predetermined rules to help you make the best decision under pressure. And profit warnings are just such a high pressure situation. To find out what the best decision you can make James looked at 2004 study by G. Bulkley R. Harris and R. Herrerias from the University of Exeter called Stock Returns Following Profit Warnings: A Test of Models of Behavioural Finance.
In the study they looked at what happened before and after 455 profit warnings issued by UK companies between Aug. 12, 1997 and Dec. 31, 1999.
What they found was on the day the profit warning was announced the share price underperformed the market by an average of 16.6%. However what happened over the next six months is that share price continued to drift lower, on average performing 4% worse than the market.
James said this makes a strong case for you to sell immediately on the profit warning rather than be drawn into management excuses and procrastinate until perhaps the next profit warni! ng is announced.
But the study also found that on average about a year after the profit warning stock prices start recovering and goes on to do extremely well, outperforming the market 22.4% over the next year.
James argues that this may be another good time to implement a rule to buy companies that issued a profit warning one year after the warning date.
But after a year of the stock price drifting lower you may find it very difficult to convince yourself to buy the company again. Especially if the share price, on average, lost 41% from six months before the profit warning to one year afterwards.
All the above numbers are however all based on averages. If you carefully look at the study you will see that all averages have huge standard deviations. This means that the returns from the 455 companies that issued profit warnings were all over the place. For example the share price performance on the day of the announcement ranged from +10.5% to -43.7%. (Technical: Two standard deviations from the mean, assuming the market adjusted returns are normally distributed.)
Also, as James correctly said, if you are a long-term investor in a good business, a profit warning is essentially just noise and may be a great buying opportunity.
If you are more of a trader on average your best strategy will be to sell immediately after the profit warning and reinvest in the company one year later.
The second study I found was published in 2009 by Fayez Elayan and Kuntara Pukthuanthong and was called Why warn? The impact of profit warnings on shareholder's equity.
In the study they looked at three 667 profit warnings by U.S. companies announced between May 1997 and December 2002.
They found that on average the two-day return after a profit warning was 16.59% worse than the market.
Between two and 90 days after the profit warning the share price of the companies on average recovered 4.09%, so there was some overreaction.
An interesting finding of! the stud! y was about 64.6% of companies only made one profit warning, about 23% made two and 12.4% issued three or more warnings. So only in 35.4% of the companies issuing profit warnings was there more than one cockroach in the kitchen.
Also on average the share prices of the warning companies drifted lower shortly before the profit warning due to information leakage.
The study unfortunately did not look at share prices a year later to determine if it would have been better to sell immediately after the profit warning or not.
I then looked at April 2002 study called Stock Returns Following Profit Warnings by George Bulkley and Renata Herrerias from the University of Exeter.
They looked at two kinds of profit warnings, those that include a new earnings forecast, and those that offer only information that earnings will be below current expectations.
Not surprisingly what they found was that the fall in the stock price against the market was substantially more when the company did not give an indication of what earnings would be (-24.7%) compared to when they did give a new earnings forecast (-20.7%).
Also not surprising was that companies with a high price to book ratio (highly valued companies) issued nearly 70% of the profit warnings.
The same as in one of the previous studies the share price performance of profit warning companies were all over the place. In 25% of the companies leading to an increase in price and only about 50% of the time leading to a decline of more than 4% against the market on the day of the announcement.
They also looked at what happened to the share prices in the 12 months before the profit warning as they wanted know if the profit warning came as a complete surprise or if it followed a string of negative news about a company. And they found that on average profit warning companies lose about 25% of their value in the three months before the announcement.
The fourth paper I looked at was called The Relationship between the! Profit W! arning and Stock Returns: Empirical Evidence in EU Markets by Tserendash Tumurkhuu and Xiaojing Wang.
The study looked at 87 profit warnings issued by EU companies between January 2008 and April 2010.
The study's findings were not much different from others I looked at. The most significant price falls recorded between one day before and one day after the profit warning. This indicates that there was a leakage of information with some investors jumping the gun.
During the five days before and five days after the profit warning on average the share price response was -35% worse than the market. They also found that some of the negative price movement was recovered a few days after the profit warning which means that there was a certain amount of overreaction by investors.
Similar to previous studies they also found that if the profit warning contained some information on what profits would look like in future it had a less negative effect on the share price than if the warning only said that profits would be lower than expected.
The study also found that there was no significant difference between the price decline of a small or large company issuing a profit warning.
So in summary this is the essence of all the studies I looked at:
The share price of a warning company on average performs 25% worse than the market in the 6 months before the profit warning.On average the share price under-performs the market by 16% on the day the profit warning is announced.The share price does recover slightly in the days following the announcement.On average the share price unde-rperforms the market for a year after the announcement most likely as investors wait to see how and if the company recovers from the fall in profits.In the second year after the announcement on average warning companies outperform the market by 22%.
How can you use it?
If you are a long term investor:
Once you are sure the business of the company has not been deteriorated then a! profit w! arning is just a short term set back and an opportunity for you to buy more.
If you are more of a trader:
Wait up to five days after the profit warning and sell after a slight recovery in the share price.Buy back your position a year after the profit warning.
Please remember that the above advice is based on averages (with a lot of variance) so the share price of the company you are invested in may behave differently.
Friday, August 30, 2013
Thursday, August 29, 2013
Estarylla Lot Recalled by Novartis' Sandoz - Analyst Blog
Sandoz, the generic arm of Novartis (NVS), recently announced that it is voluntarily recalling one lot of its oral contraceptive drug, Estarylla (norgestimate and ethinyl estradiol), in the US.
The recall was initiated after a customer reported the presence of a placebo tablet in a row of active tablets on one pack.
We note that Sandoz launched Estarylla and Tri-Estarylla (norgestimate and ethinyl estradiol), generic versions of oral contraceptives Ortho Cyclen and Ortho Tri-Cyclen, in Mar 2013, following US Food and Drug Administration (FDA) approval.
The launch of Estarylla and Tri-Estarylla brought the total number of oral contraceptives launched by Sandoz in the US since Jan 2011 to 6.
Since the probability of adverse health events is minimal, we believe Sandoz will resolve the issue soon.
Meanwhile, we are encouraged by the recent progress at Sandoz. The company launched metronidazole 1% topical gel, a generic version of Metrogel 1% in early July 2013 in the US.
Last month, Sandoz initiated a phase II study for its biosimilar version of Amgen's (AMGN) Enbrel (etanercept).
Enbrel is approved for several indications including the treatment of moderate-to-severe active rheumatoid arthritis and psoriasis.
The main aim of the phase III study is to establish biosimilarity on safety, efficacy and immunogenicity compared to Enbrel for the treatment of patients with moderate-to-severe chronic plaque-type psoriasis. Positive results from this study will support regulatory filings in the US and EU.
Sandoz is also developing biosimilar versions of Amgen's Neulasta (pegfilgrastim) and Neupogen (filgrastim).
Both drugs are approved for stimulating white blood cell production in the body. Sandoz has three marketed products which account for about 50% of all biosimilars in the combined regions of North America, Europe, Japan and Australia.
Sandoz currently has seven phase III studies across five biosimilar molecules in its pip! eline. We are encouraged by Sandoz' efforts to broaden its portfolio, which should boost sales in the coming years.
Novartis currently carries a Zacks Rank #3 (Hold). Right now, Mylan Inc. (MYL) and Simcere Pharmaceuticals (SCR) look attractive with a Zacks Rank #2 (Buy).
The recall was initiated after a customer reported the presence of a placebo tablet in a row of active tablets on one pack.
We note that Sandoz launched Estarylla and Tri-Estarylla (norgestimate and ethinyl estradiol), generic versions of oral contraceptives Ortho Cyclen and Ortho Tri-Cyclen, in Mar 2013, following US Food and Drug Administration (FDA) approval.
The launch of Estarylla and Tri-Estarylla brought the total number of oral contraceptives launched by Sandoz in the US since Jan 2011 to 6.
Since the probability of adverse health events is minimal, we believe Sandoz will resolve the issue soon.
Meanwhile, we are encouraged by the recent progress at Sandoz. The company launched metronidazole 1% topical gel, a generic version of Metrogel 1% in early July 2013 in the US.
Last month, Sandoz initiated a phase II study for its biosimilar version of Amgen's (AMGN) Enbrel (etanercept).
Enbrel is approved for several indications including the treatment of moderate-to-severe active rheumatoid arthritis and psoriasis.
The main aim of the phase III study is to establish biosimilarity on safety, efficacy and immunogenicity compared to Enbrel for the treatment of patients with moderate-to-severe chronic plaque-type psoriasis. Positive results from this study will support regulatory filings in the US and EU.
Sandoz is also developing biosimilar versions of Amgen's Neulasta (pegfilgrastim) and Neupogen (filgrastim).
Both drugs are approved for stimulating white blood cell production in the body. Sandoz has three marketed products which account for about 50% of all biosimilars in the combined regions of North America, Europe, Japan and Australia.
Sandoz currently has seven phase III studies across five biosimilar molecules in its pip! eline. We are encouraged by Sandoz' efforts to broaden its portfolio, which should boost sales in the coming years.
Novartis currently carries a Zacks Rank #3 (Hold). Right now, Mylan Inc. (MYL) and Simcere Pharmaceuticals (SCR) look attractive with a Zacks Rank #2 (Buy).
Bear of the Day: RadioShack (RSH) - Bear of the Day
RadioShack Corporation (RSH) hasn't been profitable since 2012 as sales and margins have eroded. But this Zacks Rank #5 (Strong Sell) has a new CEO and is testing new concept stores. Is it too late to save this electronics retailer?
RadioShack operates 4300 stores in the United States and 270 stores in Mexico. It also has about 1,000 dealer and other outlets worldwide.
On July 1, RadioShack opened up a new concept store on Manhattan's Upper West Side which aims to highlight popular tech devices from Apple, Samsung and the others. There is more hands on testing capabilities.
Over the next several weeks, RadioShack also expects to open up different store prototypes across the New York area, including New Jersey, and also in Texas. Data from the response to the new stores will be used in determining which of the other 4300 stores across the U.S. will get reconfigured.
The company is undergoing changes at the hands of new CEO Joseph Magnacca, who came to RadioShack in February 2013 from Walgreens. He instituted a 100 day plan to turn it around. He is behind the recent concept store changes but he needs time to implement the changes.
How Much Time Does RadioShack Have?
On Apr 23, RadioShack reported its first quarter results which were pretty dismal. Comparable same store sales fell 5.7%. Inventory was up 27% and margins eroded.
RadioShack expected continued weakness in first half of 2013. It's scheduled to report second quarter results on July 24 so further details will soon be forthcoming.
For now, however, there is no end in sight to the earnings losses. The company is expected to lose 76 cents in 2013 and another 51 cents in 2014.
As for liquidity, at the end of the first quarter it had total liquidity of $820 million.
Shares Sinking Again
Shares have been on an up and down ride the past few months. Recently, they have been sinking again.
Instead of taking a chance on the RadioShack turnaround, investors should take a look at Texas retailer Conns Inc. (CONN). It is a Zacks Rank #1 (Strong Buy). It sells not only electronics but is also a play on the housing rebound with beds and appliances.
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.
Tuesday, August 27, 2013
Best Financial Companies To Own In Right Now
Basketball great Kareem Abdul-Jabbar has led a pretty charmed life. Still, at age 66 he does have a few regrets. Twenty, to be exact.
Over at Esquire.com the former Lakers center provides a rundown of the things he wishes he had known back in 1977 when he was 30 years old. No. 3 on the list of advice he'd give his young self -- coming before "Career is never as important as family," "Do more for the community," and "Don't be so quick to judge" -- is this: "Become financially literate."
According to the K-Man (hey, it's his nickname for himself), "'Dude, where's my money?' is the rallying cry of many ex-athletes who wonder what happened to all the big bucks they earned."
"Dude, where's my money?" became his rallying cry in the mid-1980s when he discovered that his financial advisor had used a significant amount of Abdul-Jabbar's cash to invest in a real estate development deal that went sour.
Best Financial Companies To Own In Right Now: Banca Milano(PMII.MI)
Banca Popolare di Milano Societa Cooperativa a r.l. provides banking and financial services primarily in Italy, Europe, the United States, and Asia. The company offers current and savings accounts, mortgage and personal loans, credit cards, finance leases, and factoring services. It also provides commercial, corporate, and investment banking services; treasury services; financial advisory services; brokerage services; bancassurance products; collective and individual portfolio management services; and open and close-ended mutual funds, and hedge funds. As of 30 June 2011, the company operated a network of 770 retail branches, 4 corporate branches, 10 SME units, and 17 private banking centers, as well as 3 direct branches and 28 financial shops. It also offers telephone and Internet banking services. The company was founded in 1865 and is headquartered in Milan, Italy.
Best Financial Companies To Own In Right Now: National Security Group Inc.(NSEC)
The National Security Group, Inc., an insurance holding company, provides various property and casualty, and life insurance products and services in the United States. It operates in two segments, Property and Casualty Insurance, and Life Insurance. The Property and Casualty Insurance segment primarily provides personal lines coverage, including dwelling fire and windstorm, homeowners, mobile homeowners, ocean marine, and personal non-standard automobile lines of insurance in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Oklahoma, South Carolina, Tennessee, and West Virginia, and operates on a surplus lines basis in the states of Louisiana, Missouri, and Texas. The Life Insurance segment principally offers ordinary life, accident and health, supplemental hospital, and cancer insurance products in Alabama, Florida, Georgia, Mississippi, South Carolina, and Texas. The company markets its products through a field force of agents and career agents, as well as thr ough a network of independent agents and brokers. The National Security Group, Inc. was founded in 1947 and is based in Elba, Alabama.
Best Energy Companies To Invest In 2014: Home Federal Bancorp Inc. of Louisiana(HFBL)
Home Federal Bancorp, Inc. of Louisiana operates as the holding company for Home Federal Bank, which provides financial services to individuals, corporate entities, and other organizations in northwest Louisiana. The company?s deposit products include savings accounts, NOW accounts, money market accounts, and certificate accounts, as well as passbook savings, certificates of deposit, and demand deposit accounts. Its loan portfolio comprises real estate loans, such as one to four family residential loans; commercial-real estate loans; multi-family residential loans; commercial business loans; land loans; construction loans; home equity and second mortgage loans; equity lines of credit; and consumer loans, including loans secured by deposit accounts, automobile loans, and other unsecured loans. The company also offers wealth management services. As of December 7, 2010, it operated through its main office, two branch offices, and one agency office in Shreveport, Louisiana. T he company is based in Shreveport, Louisiana.
Best Financial Companies To Own In Right Now: National Western Life Insurance Company(NWLI)
National Western Life Insurance Company provides life insurance products for the savings and protection needs of policyholders and annuity contracts for the asset accumulation and retirement needs of contract holders. Its life products include universal life insurance and interest-sensitive whole life, as well as traditional products, such as term insurance coverage; and annuity products comprise flexible premium and single premium deferred annuities, fixed indexed annuities, and single premium immediate annuities. The company markets and distributes its insurance products primarily through independent national marketing organizations to residents of various countries in central and South America, the Caribbean, the Pacific Rim, eastern Europe, and Asia. It also engages in small real estate, nursing home, and other investment operations. The company was founded in 1956 and is based in Austin, Texas.
Monday, August 26, 2013
Have Times Changed For News Corp?
With shares of News Corp. (NASDAQ:NWSA) trading around $14, is NWSA 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 MovementNews Corp. was a diversified global media company that operates in six segments: Cable Network Programming; Filmed Entertainment; Television; Direct Broadcast Satellite Television; Publishing; and Other. The company was involved in programming distribution through cable television systems and direct broadcast satellite operators; live-action and animated motion pictures distribution and licensing; operation of broadcast television stations and the broadcasting of network programming and in direct broadcast satellite business through its subsidiary, SKY Italia. However, News Corp. has officially split.
The entertainment arm of the company is now known as 21st Century Fox (NASDAQ:FOXA) while the publishing arm will keep the company's name. News Corp needs to prove that it can be profitable in its own right, as the company's publishing businesses have struggled. The company distributes information and entertainment through just about every medium possible which reinforces a powerful presence. As companies and consumers continue to search for entertainment and information at increasing rates, look for companies like News Corp. to see rising profits. However, it will be interesting to see what the company does to improve their publishing engagement.
T = Technicals on the Stock Chart are WeakNews Corp. stock was on a powerful path towards higher prices, until yesterday. The spinoff news has sent the stock to lose just about half of its price. 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, News Corp. is trading below its 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 News Corp. options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| News Corp. Options | 38.74% | 96% | 95% |
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 | |
| July Options | Steep | Average |
| August 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 News Corp.’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for News Corp. look like and more importantly, how did the markets like these numbers?
| 2013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | |
| Earnings Growth (Y-O-Y) | 221.05% | 140.48% | 235.71% | 273.83% |
| Revenue Growth (Y-O-Y) | 13.54% | 5.01% | 2.22% | 3.87% |
| Earnings Reaction | 4.48% | -2.33% | 1.60% | 0.21% |
News Corp. has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been pleased with News Corp.’s recent earnings announcements.
P = Weak Relative Performance Versus Peers and SectorHow has News Corp. stock done relative to its peers, Time Warner (NYSE:TWX), Viacom (NASDAQ:VIA), Walt Disney (NYSE:DIS), and sector?
Best Small Cap Companies To Buy Right NowNews Corp. | Time Warner | Viacom | Walt Disney | Sector | |
| Year-to-Date Return | -41.40% | 22.89% | 26.87% | 29.44% | 12.54% |
News Corp. has been a weak relative performer, year-to-date.
ConclusionNews Corp. will not only engage in the publishing business as it has announced a spinoff of the entertainment side of the business. The stock was on a strong run towards higher prices. However, its stock price has been cut in half yesterday. Over the last four quarters, earnings and revenue figures have been on the rise which has pleased investors in the company. Relative to its peers and sector, News Corp. has been a weak year-to-date performer. WAIT AND SEE what News Corp. does in coming quarters.
Sunday, August 25, 2013
Golden Valley Bank Reported 2nd Quarter Results (OTCMKTS:GVYB, OTCMKTS:CRWE)
Golden Valley Bank (GVYB)
Today, GVYB remains (0.00%) +0.000 at $9.00 thus far (ref. google finance Delayed: 11:59AM EDT July 17, 2013).
Golden Valley Bank headquartered in Chico, California previously reported June 30, 2013 financials. The company also announced their $.05 per share second quarter cash dividend.
2nd Quarter 2013 Financial Highlights: Year to date net profit $683,911 compared to $514,030 year to date in 2012; Assets up $14.9 million to $136.7 million, or 12.2%, over the second quarter of 2012; Loans up $6.2 million to $89.5 million, or 7.4%, over the second quarter of 2012; Deposits up $14.6 million to $118.6 million, or 14%, over the second quarter of 2012
The results of the Gravity Survey will be released once they are available
Golden Valley Bank (GVYB) 5 day chart:
Crown Equity Holdings Inc. (CRWE)
Together with their digital network of Websites, Crown Equity Holdings Inc. (OTCMKTS:CRWE) (www.crownequityholdings.com ) offers advertising branding and marketing services as a worldwide online multi-media publisher. The company focuses on the distribution of information for the purpose of bringing together a targeted audience and the advertisers that want to reach them.
Top 10 Low Price Stocks To Watch For 2014
Today, CRWE remains (0.00%) +0.000 at $.0250 with 7,500 shares in play thus far (ref. google finance Delayed: 9:30AM EDT July 17, 2013).
CRWE's daily range thus far is at ($.025 – $.025) currently at $.0250 would be considered a (+1566.66%) gain above the 52 wk low of $.0015. The stock is up +0.02 ( +733%) since the concerning dates of January 24, 2013 – July 17, 2013. +733% is the 6 month high and rightly so.
June 26, the Company filed 10-Q http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371051, and 10-K http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9371048
Crown Equity Holdings Inc. (CRWE ) 5 day chart:
Saturday, August 24, 2013
Cerulli: Bank Trust Assets Reached $2.3 Trillion in 2012
Bank trust companies are doing well, but threats for RIAs linger, according to Cerulli Associates, which estimates bank trust assets reached $2.3 trillion in 2012.
“Collectively, bank trusts manage an estimated $2.3 trillion in assets as of 2012, which is just shy of pre-2008 crisis levels,” Donnie Ethier, senior analyst at the Boston-based research firm, said in a statement. “Bank trusts have long been regarded as an important destination for wealth management among high-net-worth institutions and individuals.”
Cerulli defines a bank trust organization as a division of a bank or registered broker-dealer that provides fiduciary wealth management advice under the ’40-Act exemption, which exempts them from securities registration.
“Understanding the bank trust channel is crucial regardless of whether an asset manager is seeking a new distribution outlet, an established bank trust is in the midst of strategic planning, or a competing provider is contemplating the creation of a trust company to expand its offerings to savvy HNW investors,” Ethier said.
Cerulli predicts “modest growth” for bank trust assets, although there are several issues that could alter the anticipated growth to the benefit or detriment of the channel. Competition in the space is intensifying, including the increasing presence and threat of RIAs and the direct channel. This competition may increase even more as investors seek greater fee transparency and younger generations continue to inherit wealth.
5 Best Stocks To Watch For 2014
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Check out Advisor Headcount on the Decline: Cerulli Study.
Friday, August 23, 2013
How returns, liquidity & risk play role in asset allocation
Flashback to the start of 2008: the markets are roaring and everyone�s who�s been left out of the equity ride up is rushing to enter. Cut -- to the start of 2009: equity is worse than a four-letter bad word by now.
Nobody can get it right 100% of the time; and, at both these times, the investor would have been protected with the asset allocation approach � taken out profits when his weightage of equity shot up beyond his risk-taking ability; and entered when no one dared to even look towards the markets in 2009.
Look at the whole picture
The allocation to debt is met for the salaried class through regular deductions and investment in the employee provident fund (EPF) scheme; and others create their safety net through Public Provident Fund, bank deposits, Post Office deposits, National Savings Certificates and the like. We all spend more time on analyzing why we made a loss of 10% on one share, even when that share is a miniscule proportion of one�s total financial assets. The focus needs to move away from making a profit in every transaction to having a suitable risk-adjusted return portfolio.
Beyond just debt and equity
Asset allocation is a way to reduce risks but it goes beyond the accepted debt and equity allocation. The starting point of reducing risks is to spread your assets across different countries and currencies. While we all believe that India is the place to invest in for the long-term, we do understand that in case of a war-like situation on India�s borders, the price of all assets � debt and equity, as well as real estate � will fall.
The liquidity factor
Assets can also be classified based on their liquidity. Why investors like property as an asset class is that there is no price ticker and a �Fill it; shut it; forget it� approach works. However, you may have realized during 2008 that the value of this asset was just on paper (even if you wished to assign a discount to it), as there were just no transactions taking place. And you cannot manage your daughter�s wedding expenses from a piece of paper that will gain value only on her first wedding anniversary.
�How much sugar do you take in your tea?�
This is a question I have often asked my prospective clients, and I get a straight-forward answer almost always. My logical mind wants to ask two questions instead: What is the size of the cup? What is the size of the spoon? When your cup of worries is huge (for example, in 2008), the spoon (of investments) that you dip into your equi-�tea� definitely needs to be larger.
How your financial planner will address asset allocation
There are three key factors that need to be considered and communicated correctly: financial objectives (returns required), liquidity requirements (a factor of the time horizon for investments) and risk profile (what is the loss the investor can bear).
Let us assume that fixed deposit rates for 3 years or more are at 7.5% pa, or 5% pa post-tax. If 86% of the total funds are invested in deposits, the portfolio will be capital protected at the end of three years.
If the period of investment is 10 years, only 61% of the funds need to be locked into fixed deposits. The incremental benefit of investing the �riskable� funds in equity will be huge, and you do not want to miss this opportunity.
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Friday, August 16, 2013
Nabors Anticipates Low 2Q Income - Analyst Blog
Top 5 China Companies To Invest In 2014
Land drilling contractor Nabors Industries Ltd. (NBR), anticipates that its operating results for the second quarter of 2013 will fail to meet expectations.According to Nabors, unsatisfactory performance from its 'Rig Services' and 'Completion and Production Services' units will lead to this lower-than-expected return. Decline in sales of capital tools along with decreased rig services and rental activities impair Nabors' Rig Services segment.
On the other hand, the Completion and Production Services unit was affected by a tough competitive environment and severe weather conditions. The company projects its operating income for second-quarter 2013 to be between $88.0 million to $91.0 million. However, Nabors has significantly lowered its gross debt by roughly $300.0 million in this quarter.
Nabors believes that the results will improve from the later quarters. The company is expected to release its second-quarter results after the closing bell on 23 Jul, 2013. The Zacks Consensus Estimate for earnings per share for the quarter stands at 15 cents.
Barbados-based Nabors' high natural gas exposure raises its sensitivity to gas price fluctuations. The company remains particularly exposed to this situation since its North American business is heavily biased to gas drilling.
Moreover, an imbalance in the demand-supply of rigs in the U.S. land drilling market presents considerable risk for the company. Additionally, the challenging near-to-intermediate term outlook for Nabors' international business will likely hamper its profitability.
Nabors currently retains a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next 1 to 3 months.
However, three firms in the energy sector with a favorable Zacks Rank are InterOil Corporation (IOC), PetroQuest Energy I! nc. (PQ) and Ferrellgas Partners LP (FGP). All the stocks currently retain a Zacks Rank #1 (Strong Buy).
Thursday, August 15, 2013
Hot Bank Companies To Buy Right Now
Blue-chip stocks are mixed in intraday trading following news that credit-rating agency Standard & Poor's upgraded its outlook for the U.S. government from "negative" to "stable." With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is up nine points, or 0.06%.
On an otherwise quiet day in terms of economic news, many investors are casting their eyes across the Pacific Ocean to Japan, where stocks have been particularly volatile of late. This trend started at the end of last year when a new government took over, vowing to revive the long-dormant economy. Since then, the nation's central bank has undertaken an aggressive monetary policy designed to reignite inflation and spur economic growth.
While early indications suggest that the move is working -- the yen has fallen in value relative to the dollar, and inflation is beginning to tick up -- an unintended, though not unexpected, consequence has been the artificial inflation of asset prices. As I've noted, the country's benchmark stock index shot up by 80% beginning last November, only to mount an aggressive correction last month. Today, it closed higher by 5% -- a massive single-day move for a market of Japan's size.
Hot Bank Companies To Buy Right Now: Signature Bank (SBNY)
Signature Bank (the Bank) is a full-service commercial bank with 25 private client offices located in the New York metropolitan area serving the needs of privately owned business clients and their owners and senior managers. The Bank offers a variety of business and personal banking products and services through the Bank, as well as investment, brokerage, asset management and insurance products and services through its wholly owned subsidiary, Signature Securities Group Corporation (Signature Securities), a licensed broker-dealer and investment adviser. Through Signature Securities, it also purchases, securitizes and sells the guaranteed portions of the United States Small Business Administration (SBA) loans. The Bank offers a variety of deposit, escrow deposit, credit, cash management, investment and insurance products and services to its clients. As of December 31, 2011, the Bank maintained approximately 78,000 deposit accounts, 6,900 investment accounts, 8,600 loan accounts and 14,300 client relationships. In April 2012, it formed a new subsidiary, Signature Financial, LLC.
The Bank offers a range of products and services oriented to the needs of its business clients, including deposit products, such as non-interest-bearing checking accounts, money market accounts and time deposits; escrow deposit services; cash management services; commercial loans and lines of credit for working capital and to finance internal growth, acquisitions and leveraged buyouts; permanent real estate loans; letters of credit; investment products to help better manage idle cash balances, including money market mutual funds and short-term money market instruments; business retirement accounts, such as 401(k) plans, and business insurance products, including group health and group life products. It offers a range of products and services oriented to the needs of its high net worth personal clients, including interest-bearing and non-interest-bearing checking accounts, with optional features, such as debit/ autom! ated teller machine (ATM) cards and overdraft protection and, for its clients, rebates of certain charges, including ATM fees; money market accounts and money market mutual funds; time deposits; personal loans, both secured and unsecured; mortgages, home equity loans and credit card accounts; investment and asset management services, and personal insurance products, including health, life and disability.
Lending Activities
The Bank�� commercial and industrial (C&I) loan portfolio is consisted of lines of credit for working capital and term loans to finance equipment, company owned real estate and other business assets, along with commercial overdrafts. Its lines of credit for working capital are generally renewed on an annual basis and its term loans generally have terms of 2 to 5 years. The Bank�� lines of credit and term loans typically have floating interest rates, and as of December 31, 2011, approximately 61% of its outstanding C&I loans were variable rate loans. As of December 31, 2011, funded C&I loans totaled approximately 15% of its total funded loans. The Bank�� real estate loan portfolio includes loans secured by commercial and residential properties. It also provides temporary financing for commercial and residential property. As of December 31, 2011, funded real estate loans totaled approximately $5.74 billion, representing approximately 80% of its total funded loans. It issues standby or performance letters of credit, and can service the international needs of its clients through correspondent banks. As of December 31, 2011, its commitments under letters of credit totaled approximately $235.7 million. Its personal loan portfolio consists of personal lines of credit and loans to acquire personal assets. As of December 31, 2011, its consumer loans totaled $11.8 million, representing less than 1% of its total funded loans.
Investment and Asset Management Products and Services
Investment and asset management products and services are ! provided ! through the Bank�� subsidiary, Signature Securities. Signature Securities is a licensed broker-dealer. Signature Securities is an introducing firm and, as such, clears its trades through National Financial Services, Inc., a wholly owned subsidiary of Fidelity Investments. Signature Securities is also registered as an investment adviser in New York, New Jersey, Pennsylvania and Florida. It offers an array of asset management and investment products, including the ability to purchase and sell all types of individual securities, such as equities, options, fixed income securities, mutual funds and annuities. The Bank offers transactional, cash management type brokerage accounts with check writing and daily sweep capabilities. It also offers retirement products, such as individual retirement accounts (IRAs) and administrative services for retirement vehicles, such as pension, profit sharing, and 401(k) plans to its clients. Signature Securities offers wealth management services to its high net worth personal clients. Together with its client and their other professional advisors, including attorneys and certified public accountants, it develops a financial plan that can include estate planning, business succession planning, asset protection, investment management, family office advisory services, bill payment, art and collectible advisory services and concentrated stock services.
Sources of Funds
The Bank offers a variety of deposit products to its clients. Its business deposit products include commercial checking accounts, money market accounts, escrow deposit accounts, lockbox accounts, cash concentration accounts and other cash management products. Its personal deposit products include checking accounts, money market accounts and certificates of deposit. The Bank also allows its personal and business deposit clients to access their accounts, transfer funds, pay bills and perform other account functions over the Internet and through ATM machines. As of December 31, 2011, it main! tained ap! proximately 78,000 deposit accounts representing $11.70 billion in client deposits, excluding brokered deposits.
Insurance Services
The Bank offers its business and private clients an array of individual and group insurance products, including health, life, disability and long-term care insurance products through its subsidiary, Signature Securities. The Bank does not underwrite insurance policies. It only acts as an agent in offering insurance products and services underwritten by insurers.
Advisors' Opinion:- [By Philip van Doorn]
Signature Bank (SBNY_) of New York. Rochester upgraded Signature Bank to a "Buy" rating from a "Hold," and raised his price target for the shares by two dollars to $81, as he believes the rapidly growing commercial lender is primed for "sustainable, above peer EPS/revenue growth more than double the mid cap banks given a low market penetration and unique business model that can drive material market share gains," as well as strong capital levels, strong credit quality and "asset sensitivity with a moderate rise in rates." Signature Bank's shares closed at $72.40 Friday. Deutsche Bank estimates the bank will earn $4.35 a share this year, with EPS increasing to $4.85 in 2014 and $5.00 in 2015.
Hot Bank Companies To Buy Right Now: BB&T Corp (BBT)
BB&T Corporation (BB&T) is a financial holding company. BB&T conducts its business operations primarily through its commercial bank subsidiary, Branch Banking and Trust Company (Branch Bank), which has offices in North Carolina, Virginia, Florida, Georgia, Maryland, South Carolina, Alabama, West Virginia, Kentucky, Tennessee, Texas, Washington D.C and Indiana. In addition, BB&T�� operations consist of a federally chartered thrift institution, BB&T Financial, FSB (BB&T FSB), and a number of nonbank subsidiaries, which offer financial services products. BB&T�� operations are divided into six business segments: Community Banking, Residential Mortgage Banking, Dealer Financial Services, Specialized Lending, Insurance Services, and Financial Services. Branch Bank provides a range of banking and trust services for retail and commercial clients in its geographic markets, including small and mid-size businesses, public agencies, local Governments and individuals, through 1,779 offices as of December 31, 2011. During the year ended December 31, 2011, BB&T announced the acquisitions of Liberty Benefit Insurance Services, Atlantic Risk Management Corporation and the Precept Group. In April 2012, it acquired the life and property and casualty insurance operating divisions of Roseland, New Jersey - based Crump Group Inc. On July 31, 2012, it acquired BankAtlantic.
As of December 31, 2011, the principal operating subsidiaries of BB&T included Branch Banking and Trust Company, Winston-Salem, North Carolina; BB&T Financial, FSB, Columbus, Georgia; Scott & Stringfellow, LLC, Richmond, Virginia; Clearview Correspondent Services, LLC, Richmond, Virginia; Regional Acceptance Corporation, Greenville, North Carolina; American Coastal Insurance Company, Davie, Florida, and Sterling Capital Management, LLC, Charlotte, North Carolina. Branch Bank�� principal operating subsidiaries include BB&T Equipment Finance Corporation, BB&T Investment Services, Inc., BB&T Insurance Services, Inc., Stanley, Hunt, DuPree! & Rhine (a division of Branch Bank), Prime Rate Premium Finance Corporation, Inc., Grandbridge Real Estate Capital, LLC, Lendmark Financial Services, Inc., CRC Insurance Services, Inc. and McGriff, Seibels & Williams, Inc.
Community Banking
BB&T�� Community Banking serves individual and business clients by offering a range of loan and deposit products and other financial services. As of December 31, 2011, Community Banking had a network of 1,779 banking.
Residential Mortgage Banking
Residential Mortgage Banking segment retains and services mortgage loans originated by Community Banking, as well as those purchased from various correspondent originators. Mortgage loan products include fixed and adjustable rate Government and conventional loans for the purpose of constructing, purchasing or refinancing residential properties. Substantially all of the properties are owner occupied. BB&T retains the servicing rights to all loans sold. Residential Mortgage Banking earns interest on loans held in the warehouse and portfolio, fee income from the origination and servicing of mortgage loans and recognizes gains or losses from the sale of mortgage loans. BB&T�� mortgage originations totaled $23.7 billion in 2011. BB&T�� residential mortgage servicing portfolio, which includes both retained loans and loans serviced for third parties, totaled $91.6 billion in 2011.
Dealer Financial Services
Dealer Financial Services originates loans to consumers on a prime and nonprime basis for the purchase of automobiles. Such loans are originated on an indirect basis through approved franchised and independent automobile dealers throughout the BB&T market area and nationally through Regional Acceptance Corporation. This segment also originates loans for the purchase of boats and recreational vehicles originated through dealers in BB&T�� market area. In addition, financing and servicing to dealers for their inventories is provided through a ! joint rel! ationship between Dealer Financial Services and Community Banking.
Specialized Lending
BB&T�� Specialized Lending consists of eight business units that provide specialty finance products to consumers and businesses. The internal business units include Commercial Finance that contains commercial finance and mortgage warehouse lending; and, Governmental Finance that is responsible for tax-exempt Government finance. Operating subsidiaries include BB&T Equipment Finance which provides equipment leasing within BB&T�� banking footprint; Sheffield Financial, a division of FSB Financial, a dealer-based financer of equipment for both small businesses and consumers; Lendmark Financial Services, a direct consumer finance lending company; Prime Rate Premium Finance Corporation, which includes AFCO and CAFO, insurance premium finance business units that provide funding to businesses in the United States and Canada and to consumers in certain markets within BB&T�� banking footprint, and Grandbridge Real Estate Capital, a commercial mortgage banking lender providing loans on a national basis.
Insurance Services
BB&T Insurance Services provides property and casualty, life and health insurance to businesses and individuals. It also provides small business and corporate products, such as workers compensation and professional liability, as well as surety coverage and title insurance. In addition, Insurance Services also underwrites a limited amount of property and casualty coverage.
Financial Services
Financial Services provides personal trust administration, estate planning, investment counseling, wealth management, asset management, employee benefits services, corporate banking and corporate trust services to individuals, corporations, institutions, foundations and Government entities. Financial Services also offers clients investment alternatives, including discount brokerage services, equities, fixed-rate and variable-rate annuiti! es, mutua! l funds and governmental and municipal bonds through BB&T Investment Services, Inc., a subsidiary of Branch Bank. Financial Services includes Scott & Stringfellow, LLC, a brokerage and investment banking firm. Scott & Stringfellow provides services in retail brokerage, equity and debt underwriting, investment advice, corporate finance and equity research and facilitates the origination, trading and distribution of fixed-income securities and equity products in both the public and private capital markets. Scott & Stringfellow also has a public finance department that provides investment banking services, financial advisory services and municipal bond financing. Scott & Stringfellow�� investment banking and corporate and public finance areas conduct business as BB&T Capital Markets. This segment includes BB&T Capital Partners that is a group of BB&T-sponsored private equity and mezzanine investment funds that invest in privately owned middle-market operating companies. Financial Services also includes the Corporate Banking Division that originates and services corporate relationships, syndicated lending relationships and client derivatives.
Advisors' Opinion:- [By Louis Navellier]
BB&T (NYSE:BBT) owns the commercial banking subsidiary, Branch Banking and Trust Company, and has posted a gain of 16% since last March. BB&T stock gets an “A” grade for operating margin growth, an “A” grade for earnings growth, a “B” grade for earnings momentum, an “A” grade for the magnitude in which earnings projections have increased over the past months, and a “B” grade for cash flow.
- [By Michael Brush]
BB&T (BBT) has a dividend yield of 2.5%
The regional bank has 1,800 branches in the Southeast and Washington, D.C. Even during the worst of the credit meltdown, BB&T was profitable. The company used its financial clout to attract customers from competitors and purchase the assets of a failed bank in Florida from regulators.
As the economy improves and loan business grows, Wordell believes the bank could see annual earnings as high as $3.50 a share, from $1.21 recently. Wordell expects the bank to raise dividends as earnings and loan quality improves.
- [By Elissa]
BB&T Corporation is a full-range financial company that provides commercial and retail services. Unlike other banks, BB&T is organized by community banks, and each group has a regional president. This enables simple changes that affect clients in a local area.
Top 5 High Tech Companies To Invest In 2014: National Australia Bank Ltd (NAB.AX)
National Australia Bank Limited provides products, advice and services. In Australia, it operates through National Australia Bank, MLC and UBank. In the United Kingdom, it operates through Clydesdale Bank. In New Zealand, it operates through Bank of New Zealand. In the United States, it operates through Great Western Bank. Segments include Business Banking, Personal Banking, Wholesale Banking, UK Banking and NZ Banking, MLC and NAB and Great Western Ban. As of April 5, 2012, the Company and its associated entities ceased to be a substantial holder in BlueScope Steel Limited. On May 17, 2012, it ceased to be a substantial holder in Spark Infrastructure Group and Sandfire Resources NL. As of August 24, 2012, the Company and its associated entities ceased to be holder in Tabcorp Holdings Limited. In September 2012, the Company and its associated entities have ceased to be a substantial holder in Incitec Pivot Limited, as of August 30, 2012.
Hot Bank Companies To Buy Right Now: Commonwealth Bank of Australia (CBA)
Commonwealth Bank of Australia (the Bank) is engaged in the provision of a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Bank is a provider of integrated financial services, including retail, business and institutional banking, superannuation, life insurance, general insurance, funds management, broking services and finance company activities. Its operating segments include Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, Bankwest and Other. Its retail banking services include home loans, consumer finance, retail deposits and distribution. Its business and private banking include corporate financial services, regional and agribusiness banking, local business banking, private bank and equities and margin lending. The Bank and its subsidiaries ceased to be a substantial holder in Ten Network Holdings Limited, as of September 12, 2012. Advisors' Opinion:- [By Dale Gillham]
CBA has held up better relative to the 2009 low and has been less volatile than ANZ. Also, the retracement in 2011 was just under 50 per cent ($42.02) of the range from the 2009 low to the high at $60.00, whereas the other banks broke this level.
Over recent months CBA has rebounded and is currently close to strong resistance around $49.50. Like ANZ, the overhead resistance may hold the stock back in the short term. However, if CBA jumps the immediate hurdle it also has the potential to move up over the coming months by around 10 per cent to between $53.00 and $56.50.
Tuesday, August 13, 2013
Is Chesapeake Headed in the Right Direction?
With shares of Chesapeake Energy Corporation (NYSE:CHK) trading at around $19.25, is CHK an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock's Movement
Chesapeake is the second-largest natural gas producer in the United States. If natural gas prices continue to increase, then Chesapeake will benefit in a big way. More than 65 percent of Chesapeake's production mix is natural gas.
Currently, Chesapeake has two focuses, which are increased production at Eagle Ford and the reducing debt. New CEO Steve Dixon is highly confident that Chesapeake won't outspend its planned drilling budget of $6 billion. Below is a quick overview of some positives and negatives for Chesapeake.
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Positives:
Several large insider purchases over the past six months 1.80 percent yield (higher than peers) Carl Icahn has placed a large bet Improved oil production Reducing long-term debt through divestments Knows how to cut out middleman Increased rig transfer speedNegatives:
Majority of analysts recommend Hold Revenue decline in 2012 Weak margins Subpar cash flow Increased expenses Awful stock performance in 2008 (lack of resiliency) Weak performance in bull market since 2009 Debt is a concern (but a plan is in place)Now let's take a look at some comparative numbers. The chart below compares fundamentals for Chesapeake, Anadarko Petroleum (NYSE:APC), and SandRidge Energy (NYSE:SD). Chesapeake has a market cap of $12.42 billion, Anadarko has a market cap of $41.97 billion, and SandRidge has a market cap of $2.37 billion.
| CHK | APC | SD | |
| Trailing P/E | N/A | 17.69 | 26.26 |
| Forward P/E | 10.41 | 16.37 | N/A |
| Profit Margin | -6.24% | 17.97% | 5.18% |
| ROE | -3.31% | 11.97% | 7.69% |
| Operating Cash Flow | $2.84 Billion | $8.34 Billion | $783.16 Million |
| Dividend Yield | 1.80% | 0.40% | N/A |
| Short Position | N/A | 1.50% | 16.90% |
Let's take a look at some more important numbers prior to forming an opinion on this stock.
E = Equity to Debt Ratio Is Normal
The debt-to-equity ratio for Chesapeake is weaker than the industry average, but it still qualifies as normal. Chesapeake is working hard to reduce long-term debt.
| Debt-To-Equity | Cash | Long-Term Debt | |
| CHK | 0.72 | $291.00 Million | $12.85 Billion |
| APC | 0.66 | $2.47 Billion | $14.46 Billion |
| SD | 1.11 | $309.77 Million | $4.30 Billion |
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T = Technicals Are Mixed
Chesapeake has been all over the map when it comes to stock performance, but the bottom line is that without a CEO change, there wouldn't be much to brag about.
| 1 Month | Year-To-Date | 1 Year | 3 Year | |
| CHK | -5.83% | 16.94% | 10.68% | -14.85% |
| APC | -5.54% | 12.95% | 14.18% | 21.50% |
| SD | -7.08% | -21.42% | -33.82% | -33.91% |
At $19.25, Chesapeake is trading below its 50-day SMA, but above its 100-day SMA and 200-day SMA.
| 50-Day SMA | 20.12 |
| 100-Day SMA | 19.05 |
| 200-Day SMA | 19.01 |
E = Earnings Have Been Inconsistent
Earnings might remind dedicated baseball fans of the Brett Saberhagen trend. For those who aren't familiar with this trend, he was terrible one year and great the next. This pattern continued throughout the majority of his career. Chesapeake seems to be following a similar path. Since earnings are so inconsistent, we have to look at revenue for a better idea of the company's progress. Revenue had improved in 2010 and 2011, but there was a setback in 2012. This is a somewhat common trend throughout the broader market. However, unlike most companies throughout the broader market, Chesapeake hasn't managed to exceed its 2008 revenue, which is a sign of weakness.
| 2008 | 2009 | 2010 | 2011 | 2012 | |
| Revenue ($)in billions | 15.16 | 9.00 | 10.98 | 13.97 | 13.41 |
| Diluted EPS ($) | 6.91 | -0.28 | 1.52 | -5.32 | 4.74 |
When we look at the previous quarter on a year-over-year basis, we see a decline in revenue and an increase in earnings. However, revenue and earnings have both improved on a sequential basis.
| 12/2011 | 3/2012 | 6/2012 | 9/2012 | 12/2012 | |
| Revenue ($)in billions | Hot Small Cap Companies To Own For 20143.84 | 3.45 | 3.22 | 3.33 | 3.41 |
| Diluted EPS ($) | -0.72 | 4.28 | -0.18 | 0.24 | 0.40 |
Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?
T = Trends Might Support the Industry
Many low-cost producers are still waiting for natural gas prices to increase before increasing production. Will this take place prior to deleveraging and what can be defined as deflation in the United States? If the future is likely to present such an environment, is Chesapeake a safe place to be?
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Conclusion
Chesapeake is definitely on the correct path. However, it might be too little too late. If the global economy continues to weaken, then Chesapeake will have to fight hard just to break even. In the current economic environment, the majors like Exxon Mobil (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are safer alternatives.
Monday, August 12, 2013
10 Best Small Cap Stocks To Buy Right Now
Every morning, you'll find plenty of handy explanations from mainstream financial media talking about the issue of the day and somehow linking it to the short-term movements of the market. This morning, China's central bank was the scapegoat du jour, even though the crisis actually began last week and was largely ignored at the time. After suffering big declines last week, the Dow Jones Industrials (DJINDICES: ^DJI ) started off the week on the same note, plunging 173 points by 10:50 a.m. EDT.
But the bigger driver of the stock market's recent decline is the strength of its previous advance. Indeed, much of the selling pressure is coming from stocks that were among the biggest gainers during the bull market run. For instance, Hewlett-Packard (NYSE: HPQ ) is down 3.2% this morning, but nothing fundamental has changed in HP's turnaround. The plan CEO Meg Whitman has laid out will take years to execute, making single-day volatility a function of traders looking for short-term angles, rather than a meaningful change to its underlying business. Much more reasonable is the argument that the stock's huge upward move in recent months was overblown and that a pullback merely moderates what has been great performance for shareholders.
10 Best Small Cap Stocks To Buy Right Now: EZchip Semiconductor Limited(EZCH)
EZchip, a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. Its products include network processor chips, evaluation boards and network-processor based systems, and development software toolkits. The company offers network processors for use in forming the silicon core of networking equipment, such as switches and routers; and for voice, video and data integration in various applications. Its network processors are single-chip solutions, which enable its customers to design multi-port line cards, such as processing and classification engines, traffic managers, media access controllers, as well as a range of specialized hardware blocks that accelerate various functions. The company offers Evaluation systems which enable customers to test NPU-based systems; and toolkits that assist customers in creating, verifying, and implementing solutions based on its network processors. It provides a library f eaturing data plane code for a range of applications, which include Metro Ethernet protocols, Multi-Protocol Label Switching, IPv4 and IPv6 routing, Access Control Lists, GPON/EPON OLT functionality, Network Address Translation, and Server Load Balancing. The company sells its products directly, and through contract manufacturers and distributors to network equipment vendors. It markets its products in Israel, China, Hong Kong, the Far East, Canada, the United States, and Europe. The company was formerly known as LanOptics Ltd. and changed its name to EZchip Semiconductor Ltd. in July 2008. EZchip Semiconductor Ltd. was founded in 1989 and is based in Yokneam, Israel.
Advisors' Opinion:- [By Paul]
Known for designing high-speed networking equipment chips. They had a solid first quarter as revenue gained 38% and now they are sitting on $75 million of cash with no expenses or debt. I believe this is a strong technology bet and I place a target of $30.
10 Best Small Cap Stocks To Buy Right Now: OmniVision Technologies Inc.(OVTI)
OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.
Advisors' Opinion:- [By Karim]
They make the 5-megapixel sensors in the camera of every iPhone. Along with this they carry a strong balance sheet and upbeat earnings expectations boding well for future growth.
Top 5 Blue Chip Stocks To Buy Right Now: bebe stores inc.(BEBE)
bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.
Advisors' Opinion:- [By Wyatt Research]
The women's apparel retailer reported fiscal fourth-quarter sales and same-store sales both rose 7 percent. The stock is up 30 percent year-to-date.
10 Best Small Cap Stocks To Buy Right Now: InterDigital Inc.(IDCC)
Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to equipment producers that manufacture, use, and sell digital cellular and IEEE 802-related products; and licenses or sells mobile broadband modem solutions, including modem IP, know-how, and reference platforms to mobile device manufacturers, semiconductor companies, and other equipment producers that manufacture, use, and sell digital cellular products. InterDigital?s solutions are incorporated in various products comprising mobile devices, such as cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles, and modules for wireless devices. The company was founded in 1972 and is headquartered in King of Prussia, Pennsylvania.
Advisors' Opinion:- [By SmallCap Investor]
The wireless technology company said it's exploring its options, including a possible sale, following last month's successful auction of Nortel Networks intellectual property which brought in $4.5 billion. IDCC owns about 1,300 patents related to mobile phone technology.
10 Best Small Cap Stocks To Buy Right Now: FuelCell Energy Inc.(FCEL)
FuelCell Energy, Inc., together with its subsidiaries, engages in the development, manufacturing, and sale of high temperature fuel cells for clean electric power generation primarily in South Korea, the United States, Germany, Canada, and Japan. The company offers proprietary carbonate Direct FuelCell Power Plants that electrochemically produce electricity from hydrocarbon fuels, such as natural gas and biogas. Its fuel cells operate on a range of hydrocarbon fuels, including natural gas, renewable biogas, propane, methanol, coal gas, and coal mine methane. The company also develops carbonate fuel cells, planar solid oxide fuel cell technology, and other fuel cell technologies. It provides its products to universities; manufacturers; mission critical institutions, such as correction facilities and government installations; hotels; and natural gas letdown stations, as well as to customers who use renewable biogas for fuel, including municipal water treatment facilities, br eweries, and food processors. The company was founded in 1969 and is headquartered in Danbury, Connecticut.
Advisors' Opinion:- [By SmallCap Investor]
The developer of stationary fuel cells used by commercial and government customers might be headed for a rebound from a pullback that began this spring - which has left the stock down 39 percent year-to-date.
- [By Roberto Pedone]
Fuelcell Energy (FCEL) designs, manufactures, sells, installs and services ultra-clean, highly efficient stationary fuel cell power plants for distributed baseload power generation. This stock is trading up 7.2% to $1.01 in recent trading.
Today’s Range: $0.94-$1.01
52-Week Range: $0.83-$1.95
Volume: 1.27 million
Three-Month Average Volume: 1.04 million
From a technical perspective, FCEL is ripping higher here right above its 50-day moving average of 92 cents per share with above-average volume. This move is quickly pushing shares of FCEL within range of triggering a near-term breakout trade. That trade will hit if FCEL manages to take out its 200-day moving average at $1.05 and then once it takes out more overhead resistance at $1.06 with high volume.
Traders should now look for long-biased trades in FCEL as long as it’s trending above its 50-day at 92 cents per share, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.04 million shares. If that breakout hits soon, then FCEL will set up to re-test or possibly take out its next major overhead resistance level at $1.18. Any high-volume move above $1.18 will then put $1.39 into range for shares of FCEL.
10 Best Small Cap Stocks To Buy Right Now: Voyager Oil & Gas Inc.(VOG)
Voyager Oil & Gas, Inc. engages in the exploration and production of oil and gas in the United States. It primarily focuses on oil shale resource prospects in Montana, North Dakota, Colorado, and Wyoming. As of May 17, 2011, the company controlled approximately 141,500 net acres in the five primary prospect areas comprising 28,000 net acres targeting the Bakken/Three Forks in North Dakota and Montana; 14,200 net acres targeting the Niobrara formation in Colorado and Wyoming; 800 net acres targeting a Red River prospect in Montana; 33,500 net acres in a joint venture targeting the Heath Shale formation in Musselshell, Petroleum, Garfield, and Fergus counties of Montana; and 65,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine, Hill, and Chouteau counties of Montana. It supplies energy and fuel for industrial, commercial, and individual consumers. The company is based in Billings, Montana.
Advisors' Opinion:- [By SmallCap Investor]
Shares of this explorer, which has operations in the Western U.S., crossed back above $3 and have risen 40 percent in the past month, amid increasing investor interest in companies drilling in the Bakken region.
10 Best Small Cap Stocks To Buy Right Now: Hot Topic Inc.(HOTT)
Hot Topic, Inc., together with its subsidiaries, operates as a mall- and Web-based specialty retailer in the United States. The company operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Its Hot Topic stores sell music/pop culture-licensed merchandise, including tee shirts, hats, posters, stickers, patches, postcards, books, novelty accessories, CDs, and DVDs; and music/pop culture-influenced merchandise comprising women?s and men?s apparel and accessories, such as woven and knit tops, skirts, pants, shorts, jackets, shoes, costume jewelry, body jewelry, sunglasses, cosmetics, leather accessories, and gift items for young men and women primarily between the ages of 12 and 22. The company?s Torrid stores sells casual and dressy jeans and pants, fashion and novelty tops, sweaters, skirts, jackets, dresses, hosiery, shoes, intimate apparel, and fashion accessories for various lifestyles for plus-size females primarily betw een the ages of 15 and 29. As of July 30, 2011, it operated 636 Hot Topic stores in 50 states, Puerto Rico, and Canada; 145 Torrid stores; and Internet stores, hottopic.com and torrid.com. The company was founded in 1988 and is headquartered in City of Industry, California.
Advisors' Opinion:- [By Wyatt Research]
The teen retailer reported its same-store sales rose 0.4 percent, with same-store sales at its Torrid chain for overweight teens rising 7 percent. Analysts were expecting a decline.
10 Best Small Cap Stocks To Buy Right Now: ATA Inc.(ATAI)
ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.
Advisors' Opinion:- [By Wyatt Research Staff]
The Chinese-based educator spiked higher recently after it exceeded analysts' expectations. Revenue and adjusted earnings soared 78% and 269%, respectively. Its long-term annual growth rate is 15%.
Analysts at Zacks Investment Research upgraded shares from "neutral" to "outperform".
10 Best Small Cap Stocks To Buy Right Now: Rackspace Hosting Inc(RAX)
Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, an d online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.
Advisors' Opinion:- [By Sherry Jim]
This computing specialist that provides web-based IT systems has soared 60%+ in the past year. With a P/S above 3 and Price to Cash of 10 this stock is poised to continue to soar and outperform it’s peers. $25 in a year is a realistic bet.
10 Best Small Cap Stocks To Buy Right Now: Petroquest Energy Inc(PQ)
PetroQuest Energy, Inc. operates as an independent oil and gas company. It engages in the acquisition, exploration, development, and operation of oil and gas properties in Oklahoma, Arkansas, and Texas, as well as onshore and in the shallow waters offshore the Gulf Coast Basin. As of December 31, 2009, the company had estimated proved reserves of 1,931 thousand barrels of oil and 167,361 million cubic feet equivalent of natural gas. It owned working interests in 9 net producing oil wells and 277 net producing gas wells. PetroQuest Energy was founded in 1983 and is headquartered in Lafayette, Louisiana.
Advisors' Opinion:- [By SmallCap Investor]
Shares traded sharply higher after the oil and gas explorer issued an operational update that revealed details of a discovery at its La Cantera site in Louisiana. Raymond James analysts bumped the stock rating to market perform based on the new findings and an improving balance sheet.
Friday, August 9, 2013
It's Time To Buy This Fallen Mining Giant
Over the past few years, the notion of Murphy's law comes to mind for Freeport-McMoRan (NYSE: FCX), the world's largest copper miner. In that time, the company has witnessed:
A sharp drop in copper prices as China worked off overbuilt stockpiles A similar plunge in gold prices (which accounts for roughly a fourth of the company's revenues) A mining accident that took 28 lives in Indonesia A pair of major acquisitions in the oil and gas industry that were greeted by a chorus of boos from shareholders and analysts A rapid spike in the debt load to above $20 billion that raised alarms at a time when revenue and cash flow forecasts were being trimmedThe net result, this stock has lost nearly 40% of its value over the past 2 1/2 years, even as the S&P 500 has moved higher by a similar amount.
The fact that this stock recently tested support at $27, held its own and has drifted closer to the $30 mark in recent weeks implies that the "everything that can go wrong will go wrong" phase of this company's life cycle may have passed.
Indeed a brighter picture is slowly beginning to emerge, and as the pendulum swings back the other way, shares should start to reverse course. In fact, several headwinds could become tailwinds in just the next few months, making this a timely trade as well as a solid long-term investment. The shift backs toward bullishness could be seen a recent $29 million purchase of company stock (at a price just under $30) by Chairman James Moffatt.
With this company, it all starts with copper prices. Freeport-McMoRan produces nearly 4 billion pounds of the metal every year. So a downward move from $4.50 a pound in the summer of 2011 to a recent $3.15 a pound has hurt results. China, which accounts for 40% of global copper demand, is the key culprit. Not only did China sharply slow its purchases of copper this year to reduce stockpiles, but deeper economic weakness in the world’s second-largest economy threatened to make matters worse.
Yet a glimmer of good news has just appeared. A fresh economic report out of China highlighted a stabilizing economy, which gave a modest boost to copper prices. Every 10-cent-per-pound swing in copper prices impacts FCX’s annual EBITDA (earnings before interest, taxes, depreciation and amortization) by $470 million, according to UBS.
Yet even assuming that copper prices merely remain in the current range and don't fall any further, a series of mine expansions should sharply increase Freeport-McMoRan's output by roughly 50% by 2016, according to management.
Notably, management plans to meet that production goal even as it brings much greater discipline to its capital spending programs. Roughly $1.9 billion has been trimmed from the company's annual capital expenditures. How does output go up even as spending goes down? Part of the projected increase will come from greater productivity at a pair of existing major Indonesian mines that had been beset by work stoppages. Freeport-McMoRan is now negotiating with workers in that country, and a "positive resolution would be a major catalyst for shares, in our view," note analysts at Merrill Lynch.
The other looming catalyst for this stock: a change in perception about cash flow. In the past few years, investors have fretted that falling copper prices, undisciplined capital spending, and the purchase of Plains Exploration and McMoRan Exploration were all contributing to downward cash flow projections. Yet FCX's cash flow outlook is a lot more robust than the flagging stock price may indicate. To be sure, 2013 is a "kitchen sink" year as free cash flow will dip to just $600 million (down from $3.9 billion in 2010). Yet that figure should steadily rise to $7 billion per year by 2016, according to analysts at Merrill Lynch. That forecast assumes that copper prices will rise around 5%, and that gold and oil prices will remain near current levels.
What does robust free cash flow lead to? A rising dividend. FCX currently pays $1.25 a share, equating to a 4.3% yield. That figure could move up to $2 a share by 2016, even as the payout ratio returns to its long-term 40% rate. Strong free cash flow also leads to diminished concerns about the company's still high debt load, which has been a key overhang on the stock. Management expects to reduce debt to by $9 billion by 2016, to around $12 billion.
That debt pay down will also come from selected sales of non-core energy fields. "We believe the market will focus on these savings and on the potential asset sales" as an investment positive, note analysts at UBS, which recently boosted its price target from $33 to $35.
Yet even that price target will look too conservative once investors start to shift their focus away from the recent bad news and pivot to better news ahead. When that happens, they'll start to appreciate that the estimated replacement value of Freeport-McMoRan's mining and drilling assets is worth roughly $49 a share, according to Merrill Lynch.
By as soon as the next series of quarterly results, slated for October, look for Freeport-McMoRan to announce certain asset sales, and equally important, maintain or even boost sales and cash flow guidance, now that the company has lowered guidance to very achievable levels. Barring a complete collapse in copper prices, this stock should start working back to the $40 mark or higher.
Action to Take -->
-- Buy FCX at prices up to $34.
-- Set stop-loss at $27.
-- Set initial price target at $40 for a potential 38% gain in 12 weeks.
This article originally appeared on ProfitableTrading.com:
It's Time to Buy a Fallen Mining Giant
Thursday, August 8, 2013
Top 10 High Tech Stocks To Own For 2014
Since the start of the year, shares of�AMD (NYSE: AMD ) have been soaring. And although its shares are still down meaningfully over longer horizons, it finally seems that investors have given the struggling tech giant a new lease on life, until recently. Last month, AMD's shares took an abrupt turn downward, presenting investors with a puzzling situation. Going forward, the real question becomes whether this was only a momentary pause in its march upward or a sign that this turnaround has run its course. In the following video, we dig deeper into the matter in the most recent edition of our "Ask a Fool" series.
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Top 10 High Tech Stocks To Own For 2014: West Pharmaceutical Services Inc.(WST)
West Pharmaceutical Services, Inc. manufactures and sells components and systems for injectable drug delivery and plastic packaging, and delivery system components for the pharmaceutical, healthcare, and consumer products industries. The company?s Packaging Systems segment provides packaging components and systems used in injectable drug delivery. This segment offers elastomeric stoppers and discs, elastomeric plungers, needle shields, tip caps, aluminum seals and removable plastic buttons, elastomeric components, flashback bulbs and sleeve stoppers, elastomer and co-molded elastomer/plastic components, non-filled syringe components, and dropper bulbs, as well as pharmaceutical containers, closures, and dispensers. This segment also provides laboratory and other services comprising extractables and leachables testing, package/container testing, method development/validation, stability testing, process development, and problem resolution. Its Delivery Systems segment offer s healthcare devices, such as ready-to-use prefilled syringe systems and sterile vials. This segment also offers sterile devices and electronic patch injector systems; passive safety needle systems, disposable auto-injector systems, and safety systems for prefilled syringes; and contract manufacturing services for personal care and consumer products, including infant nurser assemblies, closures for beverage containers, and child-resistant and tamper-evident closures and dispensers. In addition, this segment engages in contract manufacturing and assembling injection molded components and devices for surgical, ophthalmic, diagnostic, and drug delivery systems. The company distributes its products through its sales force and distribution network, as well as through contract sales agents and regional distributors in the United States, Germany, France, and other European countries. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Lionville, Pennsylva nia.
Top 10 High Tech Stocks To Own For 2014: Cadan Resources Corporation(CXD.V)
Cadan Resources Corporation, an exploration stage company, engages in the exploration and development of precious and base metal properties in the Philippines. The company primarily explores for gold, silver, and copper minerals. Its principal property includes the T�Boli project consisting of 84.98 hectares located in the province of South Catabato, Mindanao Island. The company was formerly known as Sur American Gold Corporation and changed its name to Cadan Resources Corporation in August 2007. Cadan Resources Corporation was founded in 1929 and is headquartered in Vancouver, Canada.
Hot Small Cap Companies To Own For 2014: MIPS Technologies Inc.(MIPS)
MIPS Technologies, Inc. provides industry-standard processor architectures and cores for digital home, networking, and mobile applications primarily in the United States, Japan, the Pacific Rim, and Europe. The company licenses embedded processor intellectual property in the form of architectures and implementations. It develops and licenses industry-standard MIPS32 and MIPS64 instruction-set architectures, application specific extensions, core designs in synthesizable and process-optimized forms, and other related intellectual property to semiconductor companies and system original equipment manufacturers. The company also offers various embedded processors that scale across various markets in standard, custom, semi-custom, and application-specific products; and MIPS-Based Systems on Chips for embedded systems. Its technology is used in digital televisions, set-top boxes, Blu-ray players, broadband customer premises equipment, WiFi access points and routers, networking in frastructure and portable/mobile communications, and entertainment products. MIPS Technologies, Inc. owns approximately 580 patent properties worldwide on various aspects of its technology. The company was founded in 1984 and is headquartered in Sunnyvale, California.
Top 10 High Tech Stocks To Own For 2014: G&K Services Inc.(GKSR)
G&K Services, Inc. provides branded uniform and facility services programs in the United States and Canada. Its facility services programs include floor mat offerings, such as traction control, logo, message, scraper, and anti-fatigue; shop, kitchen, bar, bath, dish, continuous roll, and microfiber towel products; dust, microfiber, and wet mops; fender covers; selected linen items; and restroom hygiene products. The company also manufactures work apparel garments that are used to support garment rental and direct purchase programs. G&K Services, Inc. serves automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, pharmaceutical, retail, restaurants, hospitality, government, and healthcare industries. The company was founded in 1902 and is headquartered in Minnetonka, Minnesota.
Top 10 High Tech Stocks To Own For 2014: Trifast(TRI.L)
Trifast plc, together with its subsidiaries, engages in the manufacture and distribution of industrial fasteners and associated components. Its fasteners include machine screws, self-tapping screws, thread forming screws, socket products, nuts, and washers, as well as fasteners for sheet metal, fasteners for plastic, security fasteners, thread-locking nuts, and micro-diameter fasteners. The company supplies its components in steel, stainless steel, aluminum, nylon, brass, titanium, and other corrosion resistant materials. In addition, its products comprise cables, clips, plastic parts, connectors, switches, springs, batteries, hinges, levers, handles, brackets, hooks, pins, keys, spacers, and stays. The company primarily serves the aerospace and defense, audio visual, automotive, marine, petrochemical, railway, information technology, sheet metal, medical, home appliances, electronic, electrical, plastic moulders, telecom, general industrial, and renewable energy sectors. It operates in the United Kingdom, Norway, Sweden, Hungary, southern Ireland, Holland, Poland, the United States, Mexico, Malaysia, China, Singapore, and Taiwan. Trifast plc was founded in 1973 and is headquartered in Uckfield, the United Kingdom.
Top 10 High Tech Stocks To Own For 2014: Advanced Cell Technology, Inc.(ACTC)
Advanced Cell Technology, Inc., a biotechnology company, focuses on the development and commercialization of human embryonic and adult stem cell technology in the field of regenerative medicine. Its embryonic stem cell research programs include cellular reprogramming, reduced complexity program, and stem cell differentiation research programs. The company?s cellular reprogramming involves in the development of therapies based on the use of genetically identical pluripotent stem cells generated by its cellular reprogramming technologies. Advanced Cell Technology, Inc. also generates stable cell lines with particular focus on blood lineage and vascular epithelial cell lines from hemangioblast cells. In addition, it is developing an autologous myoblast transplantation therapy to restore cardiac function in patients with advanced heart disease. The company?s stem cell-based therapy would provide treatment for a range of acute and chronic degenerative diseases. Further, it deve lops adult stem cell-based products that are specifically targeted at therapies for heart and other cardiovascular diseases. The company is headquartered in Marlborough, Massachusetts.
Advisors' Opinion:- [By Michael J. Ray]
Any speculative biotech investor who has their fingers on the pulse of the market knows of ACTC. Recent events have brought ACTC to the forefront, and now they are the tip of the spear when it comes to the new world of regenerative medicine. This all came about as Geron (GERN) made the decision to stop focusing its time and talent on stem cell research and turned their attention to their other products in their pipeline. As a result, ACTC now takes the lead in this exciting new field of medical technology.
The question now is why would I classify it as a “Time Bomb”? The reason for this is simple if one were to think about it. The purpose of the “time bomb” is to explode at a future date and cause massive damage, and that is what ACTC is going to do. The real question is what is going to get damaged? If all goes well with the current clinical trial for Stargardt’s macular dystrophy and dry age-related macular degeneration, and ACTC can prove its revolutionary technology works, then the “time bomb” will cause massive damage to the current standards of medical care and the companies that they represent. ACTC’s stem cell technologies will quickly become mainstream and common place around the world as its products can now starts to address unmet medical needs. Established medical companies will quickly be attempting to form partnerships or joint ventures with ACTC to get ahead of the curve and support their income streams. These stem cells will be used to treat macular degeneration, chronic heart failure, advanced cardiac disease, cardiovascular disease, as well as generate clean and safe blood products. This is just a handful of ailments that ACTC states that they can address. Waiting in the wings are more exciting ideas that have yet to be fully discussed.
If all does not go well with the current trials then the “time bomb” will have an equally destructive affect on the current investors. ACTC’s future rests on their stem! cell technologies. There is no fallback position or other product in the pipeline to save them if the trials go wrong. Their Phase 1/2 clinical trial for Stargardt’s macular dystrophy and dry age-related macular degeneration is going to be the key for the company. Its pivotal results will either usher in a paradigm shift in medicine or set the stem cell investment world back many years.
The final question is when will the “time bomb” will go off? Unfortunately the answer to that question is not known, but any investor can clearly hear the ticking getting louder and louder as the final moment arrives for the dramatic conclusion. These ticks come in the form of bits of useful information that tell investors that the time is almost up. Here are just some of the “ticks” that investor are hearing.
Top 10 High Tech Stocks To Own For 2014: Cls Holdings(CLI.L)
CLS Holdings plc engages in the investment, development, and management of commercial properties, primarily office buildings. It leases its properties for office, industrial, residential, community centre, car parking, leisure, studios/workshops, nursing home, and education/hospital uses to various sectors, including government, business services, manufacturing, information technology, and finance. As of December 31, 2010, the company had a portfolio of 28 properties with an aggregate lettable area of 127,700 square meters in London, the United Kingdom; 26 properties covering an area of 96,500 square meters in France; 16 properties with 138,000 square meters of lettable space in Germany; and approximately an area of 45,500 square meters in Sweden. CLS Holdings plc was founded in 1987 and is based in London, the United Kingdom.
Top 10 High Tech Stocks To Own For 2014: Savaria Corp Com Npv (SIS.TO)
Savaria Corporation designs, manufactures, and distributes accessibility equipment for people with mobility challenges; and elevators for commercial and residential applications. It offers home elevators, including infinity, eclipse, and telecab home elevators; commercial elevators, such as the Orion elevators; B.07 and SL-1000 stair lifts; wheelchair conversions for rear, side, and dual entry systems for personal and commercial needs; Roby mobile tracked systems and automatic sliding doors; and door and gate openers, swing doors, and powered scooters. The company also provides wheelchair lifts, such as multi lift, V-1504, and pro lift vertical platform lifts; and ES-125, delta, omega, S64, and C65 inclined platform lifts. In addition, it offers resources for assisting architects in home and commercial projects; lowered-floor minivans and other vehicles to accommodate wheelchairs; and converts automotive vehicles. The company sells its products through a network of retaile rs. Savaria Corporation was founded in 1979 and is headquartered in Laval, Canada.
Top 10 High Tech Stocks To Own For 2014: Equity Lifestyle Properties Inc. (ELS)
Equity LifeStyle Properties, Inc. is a publicly owned real estate investment trust (REIT). The firm engages in the ownership and operation of lifestyle oriented properties. Its portfolio of properties include various amenities and common facilities, such as a clubhouse, a swimming pool, laundry facilities, and cable television service, sauna/whirlpool spas, golf courses, tennis, shuffleboard and basketball courts, and exercise rooms. The firm leases developed sites to owners of manufactured homes referred to as resort homes, park models referred to as resort cottages, and recreational vehicles. It primarily invests in the markets of the United States. The firm primarily invests in land with lower maintenance costs and customer turnover costs, high quality real estate in and around major metropolitan areas, high barriers to entry, retirement and vacation destinations, growth markets, and appreciating component of real estate2. It was formerly known as Home Communities, Inc. The firm was founded in 1992 and is based in Chicago, Illinois with additional offices in Clearwater, Florida, Phoenix, Arizona, and Aurora, Colorado.
Top 10 High Tech Stocks To Own For 2014: Primco Management Inc (PMCM)
Primco Management Inc., incorporated on October 14, 2010, is a development-stage company. The Company focuses on offering estate management services for its clients and retention on a range of properties including class A office space, industrial, manufacturing, and warehousing facilities as well as data centers and retail outlets for real estate users. In addition, it also focuses on offering consulting services, including site selection, feasibility studies, exit strategies, market forecasts, strategic planning, and research services. In February 2013, the Company announced that ESMG, Inc. took controlling interest in the Company through the acquisition of more than 80% interest of the Company. In February 2013, it purchased the music catalog of D&B Music. In May 2013, the Company acquired Top Sail Productions.
As of December 31, 2010, the Company did not have any operations. During the year ended December 31, 2010, it did not generate any revenues.
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