| Industry Top 10 Heal Care Companies To Invest In 2014: Alexion Pharmaceuticals Inc.(ALXN) Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of biologic therapeutic products for treating patients with severe and life-threatening disease states in the United States, Europe, Latin America, Japan, and the Asia Pacific. It focuses on developing products for the treatment of diseases in the areas of hematology, nephrology, neurology, ophthalmology, and cancer. The company develops and commercializes Soliris (eculizumab), a therapeutic product for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), a blood disorder. It also conducts various Phase II clinical trail programs on Soliris for its usage for the treatment of cold agglutinin disease; atypical hemolytic uremic syndrome; presensitized renal transplant; kidney transplant for catastrophic antiphospholipid syndrome; ABO incompatible renal transplant; dense deposit disease; myasthenia gravis; neuromyelitis optica; and dry a ge-related macular degeneration. In addition, the company conducts Phase IV clinical trails on Soliris for its usage for the treatment of PNH registry; and Phase I clinical trails on Samalizumab for the treatment of oncology diseases, such as chronic lymphocytic leukemia and multiple myeloma. Alexion Pharmaceuticals, Inc. serves specialty distributors and specialty pharmacies, which supply physician office clinics, hospital outpatient clinics, infusion clinics, or home health care providers; government agencies; and hospitals, hospital buying groups, pharmacies, other healthcare providers, and distributors. The company was founded in 1992 and is headquartered in Cheshire, Connecticut. Top 10 Heal Care Companies To Invest In 2014: Challenger Diversified Property Group(CDI.AX) Challenger Diversified Property Group invests in office, retail, and industrial properties in Australia and France. It also engages in property development activities and invests in a car park operating business. The company is based in Sydney, Australia. Challenger Diversified Property Group operates as a subsidiary of Challenger Limited. Norcros plc, through its subsidiaries, engages in the design, manufacture, and sale of home consumer products in the United Kingdom, South Africa, and internationally. The company offers electric showers, mixer showers, power showers, and bathroom accessories; adhesives, grouts, surface preparation, and aftercare products for fixing ceramic and porcelain tiles, mosaics, natural stone, and marbles; and ceramic wall and floor tiles, and related products. The company engages in the retail sale of tiles and sanitaryware under Johnson, Tile Africa, and TAL brands. It operates 28 showrooms in South Africa and 1 in Namibia, as well as has 5 franchisees operating in South Africa and 1 in Mozambique. The company serves consumers, architects, designers, retailers, and wholesalers. Norcros plc is headquartered in Wilmslow, the United Kingdom. Top 10 Heal Care Companies To Invest In 2014: Enel(ENEI.MI) Enel SpA, together with its subsidiaries, engages in the production, distribution, and sale of electricity and gas primarily in Europe, Latin America, and North America. The company supplies electricity to large customers and energy-intensive users; and gas to residential customers and small businesses. It operates various hydroelectric, thermoelectric, nuclear, geothermal, wind, and photovoltaic power plants with an installed capacity of approximately 97,000 mega watts. The company has total reserves of 1.2 billion barrels of oil equivalent. It serves approximately 61 million power and gas customers in 40 countries. The company was founded in 1962 and is based in Rome, Italy. Top 10 Heal Care Companies To Invest In 2014: Electronics for Imaging Inc.(EFII) Electronics For Imaging, Inc. provides color digital print controllers, digital inkjet printers, and business process automation solutions. The company?s Fiery products consist of stand-alone print controllers and servers connected to digital copiers and other peripheral devices; embedded and design-licensed solutions used in digital copiers and multi-functional devices; optional software integrated into controller solutions that include Fiery Central and MicroPress; Entrac, a self-service and payment solution; PrintMe, a mobile printing application; and stand-alone software-based solutions, such as proofing and scanning solutions, including ColorProof XF, Fiery XF, ColorProof eXpress, and Xflow. It also offers industrial inkjet products, including VUTEk super-wide format digital industrial inkjet printers and inks used by billboard graphics printers, commercial photo labs, sign shops, graphic screen printers, specialty commercial printers, and digital graphics providers; Rastek hybrid and flatbed entry level production UV wide format inkjet printers; and Jetrion label and packaging digital inkjet printers, integration solutions, and specialty digital UV inks for primary and secondary label applications, and industrial label or flexible packaging markets. In addition, the company provides advanced professional print software products consisting of print production workflow and management information software, including Monarch, PSI, Logic, PrintSmith, and PrintFlow; Pace, a cloud-based business process automation software; and cloud-based order entry and order management systems, which comprise Digital StoreFront, PrinterSite, and PrintSmith Site. Electronics For Imaging, Inc. offers its products through sales force and distribution arrangements primarily in the Americas, Europe, the Middle East, Africa, and Japan. The company was founded in 1988 and is headquartered in Foster City, California. Advisors' Opinion: - [By Kathy Kristof]
Headquarters: Foster City, Cal.
52-Week High: $18.28
52-Week Low: $12.81
Annual Sales: $591.6 mill.
Projected Earnings Growth: 13% annually over the next five years
Electronics for Imaging is a 25-year-old company that makes controllers for color printers, as well as printing software. Although not a household name, the company has many things going for it.
It sports a record of double-digit growth in both sales and earnings. For the first half of the year, the company reported a 40% rise in earnings. And sales, up 15% in the first half, are likely to keep rising at a high single-digit pace for the foreseeable future, says John Barr, manager of the Needham Aggressive Growth Fund.
Also, the company is about to reap a windfall from the sale of its headquarters building to Gilead Sciences. The $180 million deal is set to be completed in October.
Top 10 Heal Care Companies To Invest In 2014: Quanta Services Inc.(PWR) Quanta Services, Inc. provides specialty contracting services primarily in North America. The company?s Electric Power Infrastructure Services segment designs, installs, upgrades, repairs, and maintains electric power transmission and distribution networks, and substation facilities; renewable energy generation facilities; and offers emergency restoration services, including repairing infrastructure to the electric power industry. Its Natural Gas and Pipeline Infrastructure Services segment designs, installs, repairs, and maintains natural gas and oil transmission and distribution systems, compressor and pump stations, and gas gathering systems, as well as offers related trenching, directional boring, and automatic welding services; and pipeline protection, integrity testing, rehabilitation and replacement, and fabrication of pipeline support systems, and related structures and facilities. This segment also provides airport fueling systems, and water and sewer infrastruct ure. It services customers engaged in the transportation of natural gas, oil, and other pipeline products. The company?s Telecommunications Infrastructure Services segment designs, installs, repairs, and maintains fiber optic, copper, and coaxial cable networks for video, data and voice transmission; and designs, installs, and upgrades wireless communications networks, including towers, switching systems, and backhaul links, as well as offers emergency restoration services. This segment serves customers in the wireline and wireless telecommunications, and cable television industries. Its Fiber Optic Licensing segment designs, procures, constructs, owns, and maintains fiber optic telecommunications infrastructure; and markets and licenses the right to use these point-to-point fiber optic telecommunications facilities. It provides its services to enterprise, education, carrier, financial services, and healthcare customers. The company was founded in 1997 and is headquartered in Houston, Texas. Top 10 Heal Care Companies To Invest In 2014: Asure Software Inc(ASUR) Asure Software, Inc. provides Web-based workforce management software and services. The company?s software empowers small to mid-size organizations and divisions of large enterprises to operate efficiently, increase worker productivity, and reduce costs. It offers products that optimize workforce time and attendance tracking, benefits enrollment and tracking, pay stubs and W2 documentation, and meeting and event management. The company provides NetSimplicity line of software products, which enable corporations, educational institutions, law firms, and healthcare facilities to manage shared office space, equipment, assets, and resources; and iEmployee suite of time and attendance, and human resources software that enables small to medium-sized businesses for transitioning to an online self-service human resources process. It also offers software maintenance and support, installation, training, and other professional services. The company was formerly known as Forgent Netwo rks, Inc. and changed its name to Asure Software, Inc. in December 2009. Asure Software, Inc. was founded in 1985 and is headquartered in Austin, Texas with additional offices in Warwick, Rhode Island, Vancouver, and British Columbia, as well as in Mumbai, India. Top 10 Heal Care Companies To Invest In 2014: Horizon Lines Inc.(HRZ) Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina. Advisors' Opinion: - [By Hutchinson]
Horizon Lines (NYSE: HRZ) is the largest oceangoing shipping company in the United States with a dominant market position along protected shipping lanes. One look at the steady resurgence in shipping demand, coupled with the company’s improving financials, and it seems the worst is behind them — making now the perfect time to scoop up this stock at a discount. HRZ is up almost 30% since September, and I expect it to continue moving higher. Recent data show more goods are being manufactured, and they need to be shipped. Horizon will be one of the biggest beneficiaries. Buy HRZ on pullbacks under $5.
Top 10 Heal Care Companies To Invest In 2014: Andatee China Marine Fuel Services Corporation(AMCF) Andatee China Marine Fuel Services Corporation, through its subsidiaries, engages in the production, storage, distribution, and wholesale purchase, and sale of blended marine fuel oil for cargo and fishing vessels primarily in Tianjin City, and Liaoning, Shandong, and Zhejiang Provinces in the People?s Republic of China. It sells its products through distributors, as well as to retail customers. The company was founded in 1997 and is based in Dalian, the People?s Republic of China. Top 10 Heal Care Companies To Invest In 2014: Pacific Mercantile Bancorp(PMBC) Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides banking services to small and medium-size businesses, professionals, and the general public primarily in Orange, Los Angeles, San Bernardino, and San Diego counties of California. It offers various deposit products that include noninterest-bearing and interest-bearing checking accounts, money market and savings deposits, and certificates of deposit. The company?s loan portfolio comprises commercial loans, including short-term secured and unsecured business and commercial loans; commercial real estate loans; residential mortgage loans; real estate construction and land development loans; consumer loans, including personal installment loans, lines of credit, credit cards, and loans to high net-worth individuals for estate planning; credit lines; accounts receivable and inventory financing; and SBA guaranteed business loans. Its business banking services include multiple acco unt control, account analysis, transaction security and verification, wire transfers, bill payment, payroll, lock box, and automated clearinghouse origination services; and convenience banking services consists of Internet banking, automated teller machine, night drop, courier and armored car, and remote deposit capture services. As of August 15, 2011, Pacific Mercantile Bancorp operated seven financial centers in Southern California, including four in Orange County; one each in Los Angeles and San Diego Counties; and one in the Inland Empire in San Bernardino County. The company was founded in 1998 and is headquartered in Costa Mesa, California.
Microsoft (NASDAQ: MSFT ) may be announcing an organizational restructuring as early as Thursday, and All Things D's Kara Swisher is hearing that Ford (NYSE: F ) CEO Alan Mulally may have helped steer Microsoft's Steve Ballmer through the process. Don't worry, Ford fans. Mulally isn't trading in hard wears for software. Insiders are merely telling Swisher that Microsoft's CEO consulted with Mulally -- who has experience at turning big companies around -- for ideas on how to restructure the meandering software titan. It wouldn't be a shock to see Microsoft's organizational chart go under the knife. Things haven't exactly gone the tech bellwether's way lately. Last year's rollout of Windows 8 was supposed to breathe new life into the PC market. It didn't. The introduction of Windows RT and the Surface RT tablet were supposed to give the software giant some serious skin in the growing realm of cheap computing devices. It didn't. Windows Phone 8 hit the market late last year, and despite Microsoft's proactive approach of paying app developers and at least one major handset manufacturer to champion the mobile operating system, it hasn't made a dent in the iOS and Android stronghold. Then we had the poorly received introduction -- in the eyes of gamers -- of the Xbox One gaming console during last month's E3 conference. It may not be a coincidence that the Xbox president left the company last week, possibly ahead of Thursday's game of music chairs that will likely leave some executives either demoted or left out. 5 Best Cheap Stocks To Invest In 2014: Advance Auto Parts Inc(AAP) Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia. Advisors' Opinion: - [By Vatalyst]
Advance Auto Parts (AAP) is the second largest parts retailer in the U.S. The common stock currently trades at a price to earnings ratio sits at 12.5, below its historical average of 16 and industry average of 15.7. Typical of Wall Street short term thinking, the madding crowd fled this stock in May, due to weak first quarter 2011 comparable store sales gain of 1.4% versus an 8.9% gain during December 2010. Price to book ratio is 4.57 whilst price to cash flow sits at 7.70, well below the industry average of 11.2.
5 Best Cheap Stocks To Invest In 2014: Rent-A-Center Inc.(RCII) Rent-A-Center, Inc., together with its subsidiaries, primarily engages in leasing household durable goods to customers on a rent-to-own basis. The company?s stores offer durable products, such as consumer electronics, appliances, computers, and furniture and accessories under flexible rental purchase agreements that allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. It also provides merchandise on an installment sales basis in its stores. As of December 31, 2010, the company operated 3,008 company-owned stores in the United States, and in Canada, Puerto Rico, and Mexico, including 42 retail installment sales stores under the names ?Get It Now? and ?Home Choice?; and 18 rent-to-own stores located in Canada under the ?Rent-A-Centre? name. It also operates 209 franchised rent-to-own stores in 32 states under the ColorTyme trade name; and 384 kiosk locations under the ?RAC Acceptance? model. In addition, the company, th rough its ColorTyme?s franchised stores, offers custom rims and tires for sale or rental under the trade names ?RimTyme? or ?ColorTyme Custom Wheels?. Rent-A-Center, Inc. was founded in 1986 and is headquartered in Plano, Texas. Advisors' Opinion: - [By Chris Stuart]
Rent-A-Center(RCII), the largest rent-to-own operator in the U.S., rents furniture and electronics to low- to middle-income customers. The company has struggled in the past three months, underperforming its closest competitor, Aaron's Rents(AAN), by over 25%. While Aaron's has executed flawlessly, Rent-A-Center has not, as the company missed earnings estimates. Management blamed the first-quarter fallout on poor weather conditions in February and limited availability of refund-anticipation loans for consumers. Despite the hiccup, management has stuck to its 2011 guidance of $2.90 to $3.10 in EPS, equating to revenue growth of 5% to 7% and earnings-per-share growth of 3% to 10%. Key initiatives to boost growth, such as RAC Acceptance (kiosks in third-party stores that arrange rent-to-own programs) are in place. Management has done a good job of managing its debt position and recently boosted the dividend by 167% (now at a 2.2% yield). If management can achieve $3 in EPS for the full year, the stock looks cheap, trading at just 9.7 times earnings (a discount to 15 times P/E for Aaron's). TheStreet Ratings has a $41 price target on shares of Rent-A-Center.
UnitedHealth Group Incorporated provides healthcare services in the United States. Its Health Benefits segment offers consumer-oriented health benefit plans and services to national employers, public sector employers, mid-sized employers, small businesses, and individuals; and non-employer based insurance options for purchase by individuals. It also provides health and well-being services for individuals aged 50 and older; and for services dealing with chronic disease and other specialized issues for older individuals, as well as health plans for the beneficiaries of acute and long-term care Medicaid plans. This segment offers its services through a network of 730,000 physicians and other health care professionals, and 5,300 hospitals. Its OptumHealth segment provides health, financial, and ancillary services and products that assist consumers through personalized health management solutions; benefit administration, and clinical and network management; health-based financi al services; behavioral solutions; and specialty benefits, such as dental, vision, life, critical illness, short-term disability, and stop-loss product offerings. The company?s Ingenix segment offers database and data management services, software products, publications, consulting and actuarial services, business process outsourcing services, and pharmaceutical data consulting and research services. Its Prescription Solutions segment provides integrated pharmacy benefit management services comprising retail network pharmacy contracting and management, claims processing, mail order pharmacy services, specialty pharmacy, benefit design consultation, rebate contracting and management, drug utilization review, formulary management programs, disease therapy management, and adherence programs to employer groups, union trusts, managed care organizations, Medicare-contracted plans, Medicaid plans, and third party administrators. The company was founded in 1974 and is based in Minne tonka, Minnesota. Advisors' Opinion: - [By Vatalyst]
United Health Group (UNH) provides health care benefits to over 32 million people in the US. In 2010, UNH was ranked second in enrollments. The first two quarters for 2011 was strong with second quarter earnings beating analyst estimates. This was mainly due to increased enrollment and premium hikes. From a valuation perspective, the common stock currently trades at a price to earnings ratio of 10, below is historical average of 13.5. Price to book value is 1.75, and price to cash flow is 8. - [By Jon C. Ogg]
UnitedHealth Group Inc. (NYSE: UNH) is the newest of the DJIA components, now that Kraft Foods has split itself up. The health insurance giant closed out 2013 at $54.24, and that was well off the 52-week high, as its range in the past year was $49.82 to $60.75. Analysts believe that the stock will rise some 23.4% to $66.97 by the end of 2013. The insurer has a lower dividend than most DJIA stocks, at only about 1.6%, and its market value is close to $55 billion. UnitedHealth so far has recovered only about half of its losses from last summer.
5 Best Cheap Stocks To Invest In 2014: Majesco Entertainment Company(COOL) Majesco Entertainment Company develops and markets video game products primarily for family oriented mass-market consumers. The company publishes video games for various interactive entertainment hardware platforms, including Nintendo?s DS, DSi, and Wii; Sony?s PlayStation 3 and PlayStation Portable; Microsoft?s Xbox 360; and personal computers. It also publishes games for various digital platforms consisting of mobile platforms comprising iPhone, iPad, and iPod Touch, as well as online platforms, including Facebook. The company sells its products primarily to retail chains, specialty retail stores, video game rental outlets, and distributors. The company was founded in 1998 and is based in Edison, New Jersey. Advisors' Opinion: - [By McWillams]
Majesco Entertainment makes video games mainly for the family-oriented, mass-market consumer. Majesco's incredible run this year started on Jan. 11 when the company announced it had shipped more than 500,000 copies of its Zumba Fitness video game title for the Wii, Xbox 360 and PlayStation 3. In late January, the company announced that it regained compliance with the Nasdaq's minimum bid price requirement for continued listing. In early March, shares of Majesco climbed higher after the company posted better-than-expected fiscal first-quarter financial results, with revenue jumping to $48.5 million from $29.2 million in the same period a year earlier. Current Share Price: $3.20 (March 29) First Quarter Total Return: 315% Analyst Ratings: Majesco garners a lone "buy" rating from Needham & Co. and a "neutral" rating from Wedbush. Coincidentally, both research firms have a $2.50 price target on the stock. TheStreet Ratings has a "hold" recommendation on Majesco Entertainment. The research report from March 20 says revenue growth, a largely solid financial position with reasonable debt levels and solid stock price performance are strengths that are countered by the company's weak cash flow from its operations. - [By Louis]
Majesco Entertainment (NASDAQ: COOL) is an innovative provider of video games for the mass market, developing a wide range of titles for Sony’s PlayStation, Microsoft’s Xbox and Nintendo’s WII systems. On June 7, COOL announced that it had signed a contract with the NBA to begin development of an original video-game basketball franchise. The stock rose an impressive 32% over the next five trading days while the broader market sold off. However, the stock is down today after reporting weaker-than-expected second-quarter earnings last night, missing consensus earnings estimates by 2 cents. Majesco reported net revenues of $32.1 million for the second quarter ended April 30, 2011, compared with $10.9 million reported for the same period in the previous year. The company’s operating income for the second quarter was $5.3 million, compared with an operating loss of $1.6 million reported for the same period in the previous year. So treat this sell-off as a buying opportunity.
5 Best Cheap Stocks To Invest In 2014: Sprott Resource Lending Corp.(SILU) Sprott Resource Lending Corp., a natural resource lender, provides bridge and mezzanine financing to precious and base metal mining, exploration, and development companies, as well as energy companies worldwide. The company was formerly known as Quest Capital Corp. and changed its name to Sprott Resource Lending Corp. in September 2010. Sprott Resource Lending Corp. was incorporated in 1980 and is based in Toronto, Canada. Advisors' Opinion: - [By Louis]
Formerly known as Quest Capital Corp., Sprott Resource Lending Corp. (SILU) has returned 40% in the past year, and is currently trading at $1.78. SILU has had an up-and-down year, but this penny stock has the potential to bring you fast gains. During a two-day span in early April, SILU jumped 13%.
The market sure doesn't take kindly to these Federal Reserve meetings, does it? Even though the Fed announced that things will remain more or less status quo until unemployment hits 7%, investors are starting to get nervous about the impact of rising interest rates and inflation on their stocks. There is special concern over the effects on master limited partnerships, equities that have attracted unprecedented levels of investment because their (typically) high yields make them great substitutes for depressed bond prices. Today I'll look at how rising interest rates and inflation affect MLPs. What do rising interest rates do?
The master limited partnership business structure passes almost all of its cash through to unit holders in the form of distributions. That's why we love them. This means, however, that MLPs rely heavily on capital markets to fund growth. When interest rates rise, borrowing money becomes more expensive and could threaten the growth prospects for some MLPs. This is why, historically, MLPs have underperformed during periods of rising interest rates. What does inflation do?
First, and perhaps most importantly, FERC ties its tariff rates to the Producer Price Index, adjusting it as needed on an annual basis. That means that inflation shouldn't have a meaningful impact on fees generated by interstate pipelines. What inflation can affect, however, is depreciation of assets. Depreciation is not adjusted for inflation, so replacing an asset like a pipeline becomes more expensive as inflation rises. This is still considered a low-risk problem. How bad will it hurt?
First off, we've got more MLPs on the market than ever before, and they aren't all the same. Even the ones that look the same on the outside have different components that can be affected in different ways by either inflation or rising interest rates. Let's start with MLPs like Linn Energy (NASDAQ: LINE ) or BreitBurn Energy Partners (NASDAQ: BBEP ) . These are oil and gas exploration and production partnerships, and though this type of MLP is extremely exposed to commodity risk, commodity prices are tied to inflation, which in turn poses little threat to the partnerships. You'll see the same effect at a traditional pipeline MLP that has some exposure to commodity risk, like Energy Transfer Partners (NYSE: ETP ) . Energy Transfer has taken it on the chin over the past few quarters as low natural gas liquids prices have squeezed earnings in its midstream segment. The same is true for Kinder Morgan Energy Partners (NYSE: KMP ) in its carbon dioxide business, which is exposed to natural gas prices and oil prices. Management doesn't have to worry that inflation will make either of those situations worse, and FERC should take care of the big interstate pipeline systems, so that only leaves cost of capital to worry about. Money gets more expensive
As the cost of capital rises, MLPs with the strongest balance sheets and the highest investment grade ratings will be in the best position to access the cheapest capital for expansion. But MLPs are limited by the ratings agencies right now and can only achieve a certain level of credit rating. The ratings agency Fitch put out a press release in March that helps explain this: We note that, while the basic analytical approach adopted for both MLPs and corporate credits is mostly the same, certain differences are noteworthy. MLP credit ratings are generally capped for practical purposes in the "BBB" rating category due to aggressive distribution and growth practices; corporate ratings have no similar ceiling. Also, some MLPs may be subject to greater event and capital market risk, given their aggressive growth strategies and external funding demands. If ratings agencies were to raise that ceiling, it would certainly have an impact on MLPs when interest rates rise. This is a point that at least one CEO to my knowledge has raised. Let's flash back to February's fourth-quarter conference call at Plains All American Pipeline, when CEO Greg Armstrong made this statement: We were pleased that we received upgrades from the rating agencies during 2012 to BBB and Baa2, which is currently the highest rating level for any MLP. We are hopeful that the rating agencies will expand the MLP eligible ratings to include BBB+, Baa1 rating level. We believe our size; scale, diversification, and performance through various cycles as well as our strong credit metrics and discipline adherence to our financial growth strategy should make us a candidate for the inaugural BBB+, Baa1 class of MLPs. Since that time, Enterprise Products Partners (NYSE: EPD ) has indeed achieved a Baa1 rating, handed down from Moody's this past March. It is perhaps the best positioned MLP for rising interest rates because it has no general partner, which means it pays no general partner stake and no incentive distribution rights, thereby lowering its cost of capital. But wait!
There is an important caveat to all of this, and that is that the energy sector is absolutely on fire right now. The U.S. is producing more oil than it has since 1991 and more natural gas than it ever has in its 100-plus year history of producing the stuff. This production is completely dependent on midstream infrastructure, and therefore, it's dangerous to assume that because MLPs have underperformed in periods of rising interest rates and inflation in the past, they will continue to do so going forward. Bottom line
Investors have flocked to energy MLPs because of their high yields and lucrative distribution payouts. Some fear that as interest rates rise, investors will abandon MLPs and fall back in love with bonds. However, interest rates on bonds would have to climb pretty high to top many of the yields on these MLPs. Ultimately, the energy industry is firing on all cylinders, and it doesn't make sense to abandon ship based on economic theories about what might happen when the underlying business at these MLPs is so strong. However, not all MLPs are created equal, and it makes sense to take the time to evaluate your holdings now, especially in regard to cost of capital. The surge in oil and natural gas production from the fracking movement is creating massive bottlenecks in takeaway capacity. However, this problem for producers creates an immensely profitable opportunity for midstream companies. Energy Transfer Partners is a company that helps alleviate the gluts in supply with its 23,500 miles of transformational pipelines. To see if ETP and its sizable dividend payment could be a good fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for a thorough expert analysis of this midstream company.
Having completed one share repurchase agreement last month for $1 billion, heavy-equipment manufacturer Caterpillar (NYSE: CAT ) announced today that it's launching a second round of buybacks, purchasing the stock from Societe Generale, one of the largest European financial-services groups. The international financier will immediately deliver approximately 11 million shares based on current market prices, with the final number of shares bought back based on Caterpillar's volume-weighted average stock price during the period the agreement remains in effect, which is expected to be completed by September. Noting the repurchase of $2 billion worth of stock this year and having raised the company's dividend by 15% last month, Caterpillar Chairman and CEO Doug Oberhelman said, "The continued strength of our balance sheet and strong cash flow puts us in a good position to reaffirm our commitment to stockholders, even in the midst of a downturn." In February 2007, the board of directors authorized the repurchase of $7.5 billion of company stock, and in December 2011, it extended the authorization through December 2015. Through the end of the second quarter of 2013, $4.8 billion of the $7.5 billion authorization was spent.
CBIZ (NYSE: CBZ ) reported earnings on July 29. Here are the numbers you need to know. The 10-second takeaway
For the quarter ended June 30 (Q2), CBIZ whiffed on revenues and missed estimates on earnings per share. Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped. GAAP earnings per share grew significantly. Margins grew across the board. Revenue details
CBIZ chalked up revenue of $172.5 million. The two analysts polled by S&P Capital IQ hoped for revenue of $211.0 million on the same basis. GAAP reported sales were 8.5% lower than the prior-year quarter's $188.6 million. Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates. EPS details
EPS came in at $0.11. The two earnings estimates compiled by S&P Capital IQ averaged $0.15 per share. Non-GAAP EPS of $0.11 for Q2 were 8.3% lower than the prior-year quarter's $0.12 per share. GAAP EPS of $0.18 for Q2 were 50% higher than the prior-year quarter's $0.12 per share. Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates. Margin details
For the quarter, gross margin was 12.1%, 50 basis points better than the prior-year quarter. Operating margin was 7.7%, 10 basis points better than the prior-year quarter. Net margin was 5.3%, 220 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.) Looking ahead
Next quarter's average estimate for revenue is $196.0 million. On the bottom line, the average EPS estimate is $0.12. Next year's average estimate for revenue is $821.3 million. The average EPS estimate is $0.65. Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 119 members out of 127 rating the stock outperform, and eight members rating it underperform. Among 34 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give CBIZ a green thumbs-up, and give it a red thumbs-down. Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CBIZ is buy, with an average price target of $8.50. Looking for alternatives to CBIZ? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report. Add CBIZ to My Watchlist.
Phillips 66 (NYSE: PSX ) will release its quarterly report on Wednesday, and ever since its initial spin-off from ConocoPhillips (NYSE: COP ) , favorable trends in the refining industry have helped to boost the company's profits and send the refiner's stock soaring. But lately, those trends have started to reverse, and the impact on Phillips 66 earnings could be a nasty surprise to those who've gotten used to the shares only moving in one direction. In particular, Phillips 66 has seen huge benefits from the massive expansion in domestic energy production in recent years, as prices of domestic crude fell well below prevailing prices on the world markets. Yet as those spreads have shrunk to nearly nothing in recent quarters, Phillips 66 will now have to deal with a much more neutral earnings environment even as some other challenges begin to rear up and affect its earnings potential. Let's take an early look at what's been happening with Phillips 66 over the past quarter and what we're likely to see in its quarterly report. Stats on Phillips 66 | Analyst EPS Estimate | $1.83 | | Change From Year-Ago EPS | (18%) | | Revenue Estimate | $41.57 billion | | Change From Year-Ago Revenue | (11.1%) | | Earnings Beats in Past Four Quarters | 4 | Source: Yahoo! Finance. Is the growth story for Phillips 66 earnings dead?
Analysts have dramatically reined in their views on Phillips 66 earnings over the past several months, cutting their June-quarter estimates by nearly 20% and lopping more than $0.50 per share from their full-year 2013 consensus earnings figures. The stock has stopped its upward move, falling about 4% since late April. One of the biggest drivers of earnings growth for Phillips 66 and its peers came from cheap U.S. oil. Even as their input costs stayed low, refiners benefited from high prices for refined products like gasoline and diesel fuel, and that helped create massive profits. That led refiners to take extraordinary steps to obtain cheap crude from hard-to-reach domestic sources, including Phillips 66's decision to transport oil by rail to its refineries. Lately, though, domestic crude has seen its cost advantage almost disappear, creating a potential reversal of the profit bonanza. Valero (NYSE: VLO ) said last week that it expects discounts for domestic crude to return, restoring its long-term benefits, but in the meantime, its profits dropped 44% in its second-quarter report compared to year-ago levels. But having learned a lesson from its parent, Phillips 66 recently had great success doing a spin-off of its own, putting many of its pipeline and terminal assets into the master limited partnership Phillips 66 Partners (NYSE: PSXP ) and seeing the shares of the newly public MLP soar on their IPO day. The move has worked so well in the industry that other refiners like Valero have made plans to put their own midstream assets into MLPs in order to help investors take advantage of tax benefits that the entities enjoy compared to regular corporations. In the Phillips 66 earnings report, watch for signs about its expectations for spreads between domestic and global oil prices. If it projects further weakening, then it could be a while before profits return to past levels. Moreover, keep an eye on the regulatory front to see if pollution-reducing proposals will actually get implemented, potentially costing the refiner billions in capital expenses. Even if refiners are on their way out, you can still profit from great ways to capitalize on high oil prices. Find some in The Motley Fool's "3 Stocks for $100 Oil". For FREE access to this special report, simply click here now. Click here to add Phillips 66 to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Vishay Intertechnology (NYSE: VSH ) reported earnings on April 30. Here are the numbers you need to know. The 10-second takeaway
For the quarter ended March 30 (Q1), Vishay Intertechnology beat expectations on revenues and beat expectations on earnings per share. Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share dropped. GAAP earnings per share dropped. Margins dropped across the board. Revenue details
Vishay Intertechnology reported revenue of $554.3 million. The three analysts polled by S&P Capital IQ looked for revenue of $542.6 million on the same basis. GAAP reported sales were the same as the prior-year quarter's. Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates. EPS details
EPS came in at $0.18. The five earnings estimates compiled by S&P Capital IQ averaged $0.11 per share. Non-GAAP EPS of $0.18 for Q1 were 14% lower than the prior-year quarter's $0.21 per share. GAAP EPS of $0.19 for Q1 were 9.5% lower than the prior-year quarter's $0.21 per share. Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates. Margin details
For the quarter, gross margin was 24.7%, 70 basis points worse than the prior-year quarter. Operating margin was 8.2%, 100 basis points worse than the prior-year quarter. Net margin was 5.2%, 110 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.) Looking ahead
Next quarter's average estimate for revenue is $575.0 million. On the bottom line, the average EPS estimate is $0.18. Next year's average estimate for revenue is $2.31 billion. The average EPS estimate is $0.76. Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 238 members out of 252 rating the stock outperform, and 14 members rating it underperform. Among 62 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give Vishay Intertechnology a green thumbs-up, and two give it a red thumbs-down. Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Vishay Intertechnology is outperform, with an average price target of $12.50. Looking for alternatives to Vishay Intertechnology? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report. Add Vishay Intertechnology to My Watchlist.
The Dow Jones Industrial Average (DJINDICES: ^DJI ) �traded mostly mixed today as investors reacted to an ambiguous earnings season thus far, finishing the day up 0.1%. Even then, it was the worst performer among the three major indexes. Stock downgrades weighed on the blue chips, while Caterpillar (NYSE: CAT ) shares jumped despite missing earnings estimates. In the meantime, March existing home sales numbers landed slightly below expectations. The National Association of Retailers said home sales last month totaled 4.92 million, below projections of 5.01 million. Still, sales were up more than 10% from a year ago, indicating the housing market is still improving, though perhaps not as quickly as some had hoped. Caterpillar, the world's largest maker of earth-moving equipment, opened the day essentially flat but gained in the afternoon to finish up 2.8%. The manufacturer reported per-share first-quarter profit down 45% to $1.31, and total revenue down 17% to $13.21 billion. Both figures missed estimates by about 4%. Management also lowered its full-year EPS guidance to $7 a share, while analysts had projected $7.67 a share. Still, trading near its 52-week low, the stock was up as CEO Doug Oberhelman said he thought mining purchases had hit bottom, and pointed to an increase in sales in China as another positive. The �company also plans to buy back about $1 billion worth of shares, its first such program since 2008. Best Blue Chip Companies To Invest In 2014: Philip Morris International Inc(PM) Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York. Advisors' Opinion: - [By MelvinPasternak]
Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has raised distributions since the spin-off from Altria Group in 2008. The last dividend increase was 20.30% to 77 cents/share. Analysts are expecting that Philip Morris International will earn $5.22/share in 2012. I expect that the quarterly distribution will reach 85 cents/share in 2012. Yield: 3.90%
Best Blue Chip Companies To Invest In 2014: Colgate-Palmolive Company(CL) Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion: - [By Louis Navellier]
Colgate-Palmolive (NYSE:CL) is a staple of consumer products, selling its oral, personal, home care and pet nutrition products in over 200 countries. A nice year-to-date return of 16% has helped keep Colgate stock holders happy all year. - [By ChuckCarlson]
Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised distributions for 48 years in a row. The 10 year annual dividend growth rate is 12.40%/year. The last dividend increase was 9.40% to 58 cents/share. Analysts are expecting that Colgate Palmolive will earn $5.52/share in 2012. I expect that the quarterly dividend will be raised to 64 cents/share in 2012. Yield: 2.60% - [By Hesler]
Colgate-Palmolive Company(NYSE: CL), together with its subsidiaries, manufactures and markets consumer products worldwide. This dividend champion has raised distributions for 48 years in a row and currently yields 2.80%.
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California. Advisors' Opinion: - [By Louis Navellier]
Chevron (NYSE:CVX) provides support to its subsidiaries in the following fields: petroleum operations, chemicals operations, mining operations, power generation and energy services. While many stocks on the NYSE have underperformed in 2011, Chevron stock is up 8% year to date. - [By Goodwin]
Chevron (CVX-N94.663.183.48%) is the world's second-largest energy company, after fellow Dow component Exxon Mobil (XOM-N73.951.121.54%). But, analysts favour Chevron's stock, which receives positive reviews from 76 per cent of researchers in coverage. In contrast, Exxon receives positive reviews from 42 per cent of analysts, ranking third-worst in the Dow. Chevron is scheduled to report fourth-quarter results on Jan. 28. Its third-quarter adjusted earnings tally of $1.87 (reflecting 8.7 per cent year-over-year growth) missed the consensus forecast of $2.15 by 13 per cent, sending shares down modestly. The sales figure, at $49-billion, missed by 1.9 per cent. Chevron has integrated global operations and sells at a peer discount. Its stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 8.9, a book value multiple of 1.8, a sales multiple of 1 and a cash flow multiple of 6.2, 43 per cent, 52 per cent, 58 per cent, 67 per cent and 32 per cent discounts to oil-and-gas industry averages. Based on forward earnings, Chevron is the fourth cheapest Dow stock. It also pays a 72-cent quarterly dividend, translating to a 3.1 per cent dividend yield, seventh highest in the Dow. It has boosted the payout 7.9 per cent a year, on average, over a three-year span and 10 per cent a year, on average, over a five-year span. Chevron has $15-billion of cash, compared to $11-billion of debt. Bullish Scenario: Macquarie expects Chevron's stock to rise 21 per cent to $114 in 12 months. Bearish Scenario: JPMorgan, despite rating Chevron “overweight”, has a $90 target.
Best Blue Chip Companies To Invest In 2014: Apple Inc.(AAPL) Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California. Advisors' Opinion: - [By Kathy Kristof]
Headquarters: Cupertino, Cal.
52-Week High: $701.91
52-Week Low: $362.02
Annual Sales: $108.3 bill.
Projected Earnings Growth: 23% annually over the next five years
Apple led Kiplinger’s list of top stocks back in January 2011, when its share price was a mere $330. And at more than double that price today, Apple shares still appear to be bargain-priced.
The stock has a number of additional catalysts. The company just won a patent suit against arch rival Samsung that is likely to force Apple’s key competitors to revamp their handsets. The verdict couldn’t have come at a more opportune time. Millions of Apple loyalists are ready to upgrade to Apple’s new iPhone, introduced on September 12. Moreover, Apple has barely cracked China’s market, which is likely to generate additional profit growth for years to come.
Of course, Apple can’t maintain an astronomical growth rate forever. But even if the company can simply achieve analysts' expectations for the next three to five years, you’ll want to have the stock in your portfolio for a long time to come.
Best Blue Chip Companies To Invest In 2014: International Business Machines Corporation(IBM) International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York. Advisors' Opinion: - [By Jim Cramer]
When this company talked about lofty EPS for 2015, initially the street was skeptical especially after IBM reported a blah quarter soon after the expectations were laid out. I now think the company has $20 earnings per share capabilities out three years and that $13 is doable for 2011. You keep the multiple the same and you get a $169 stock. I think it does just that. This one's cheap, way too cheap and it will be cheap next year, too, but on a bigger earnings base which is how it can get to my price target. - [By Peter Hughes]
International Business Machines (IBM) -- our aggressive pick for the year -- is one of the world's most dominant technology companies, with annual revenues of $105 billion and net income of $16 billion.
Best Blue Chip Companies To Invest In 2014: McDonald's Corporation(MCD) McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois. Advisors' Opinion: - [By ETF_Authority]
McDonald’s Corporation (MCD), together with its subsidiaries, operates as a foodservice retailer worldwide. The company has raised distributions for 35 years in a row. The 10 year annual dividend growth rate is 26.50%/year. The last dividend increase was 14.75% to 70 cents/share. Analysts are expecting that McDonald's will earn $5.73/share in 2012. I expect that the quarterly dividend will reach 77 cents/share in 2012. Yield: 2.80% - [By JON C. OGG]
McDonald’s Corporation (NYSE: MCD) is at $85.08 and analysts have a consensus price target objective of $97.68. It carries a 2.9% dividend yield and the stock is down 5% from its 52-week high. McDonald’s trades at close to 6-times book value, but its return on equity is 37%. S&P carries an “A” local long-term rating on the Golden Arches. In the “you gotta eat somewhere” theory, McDonald’s seems to keep winning over and over and its shares and same-store sales keep rising handily. - [By Martin]
The company is one of the world’s most recognized brands. The Golden Arches has locations all over the world. McDonald’s has managed to continually reinvent itself and its menu, and delivered strong shareholder returns in the process. However, it is lagging behind Yum! Brands (NYSE:YUM) in China, which is a key market for growth. While the 10-year dividend growth rate is at 26%, I expect distribution growth over the next decade to average 10%. - [By Quickel]
McDonald's, is just such a solid stock with the combination of growth, safety and income. We believe that MCD should be headed to $110 this year, which will not be as strong as some of our other targets. Yet, we also will be picking up a solid 2.8% yield that is attractive. Further, MCD has done a great job dealing with currency issues and has not seen a slowdown despite issues in Europe and China. We believe that MCD will continue to offer growth and value this year, and we like it to offset value and growth plays with income investing. Entry: $99.58 Allocation: $2500 Target: $105, $110
Hasbro's (NASDAQ: HAS ) $112 million deal for a majority stake in small yet profitable mobile games developer Backflip Studios became clearer after the country's second-largest toy maker posted disappointing quarterly results. Hasbro's 35% drop in toys for boys may explain why it's expanding its licensing deal with Disney (NYSE: DIS ) for more Marvel and Star Wars playthings, but it also helps explain the push for digital downloads. Kids are moving away from traditional toys, and if that wasn't evident when Mattel (NASDAQ: MAT ) posted a 12% drop in Barbie sales last week, it is now. In this video, longtime Fool contributor Rick Munarriz discusses the mad scramble to gain dot-com relevance with young and potentially jaded gamers. Toys may not be hot, but these retailers are doing just fine
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.
After some nice gains since the previous week's snapshot, the real-money Inflation-Protected Income Growth portfolio closed on Friday with a slightly better than 20.7% return since its inception. Given that the portfolio launched less than eight months ago, that sort of return would ordinarily be cause for an incredible celebration. In this market, however, it's just about average. The portfolio's returns are sitting somewhere between the rise in the S&P 500 index over that same time period and what might have been possible by buying a fund that tracks that index and reinvesting dividends. Will the good times last?
Of course, during a rising market like the one we've been having, it's pretty easy to stay invested. After all, when darn near everything is moving up, you don't have to be a genius to participate in the gains. The real question is around what happens when the market drops. As master investor Warren Buffett has said: "Only when the tide goes out do you discover who has been swimming naked." The companies in the IPIG portfolio were selected based on their dividend history and prospects, their solid balance sheets, their reasonable valuations, and their fit with reasonable diversification. If the market tanks, those fundamental factors should still hold pretty well true, even if their shares fall with the market just as they've risen with it. Just as the IPIG portfolio hasn't outperformed the market on the way up, it may not hold up any better than the general market on the way down, either. But because each pick was chosen based on those solid fundamentals at the time of purchase, it will be possible to evaluate each selection on those same measures when the market falls. If nothing else, that should help shed light on which companies have been swimming naked, to make buy more/hold/sell decisions more straightforward. Make hay while the sun shines
For instance, the biggest gainer in the IPIG portfolio this past week was Air Products and Chemicals (NYSE: APD ) . The company reported so-so earnings but nevertheless leaped skyward after adopting a poison pill on rumors that it may be a target of activist investor Bill Ackman. While the gain is nice, the drivers are dubious, and it suggests a healthy dose of skepticism is warranted. On the flip side, Texas Instruments (NASDAQ: TXN ) was the second largest gainer for the IPIG portfolio on the week. While it reported somewhat weaker-than-expected earnings, its shares rose on the news that its product mix is shifting toward higher-margin items, a potential harbinger of strength for the future. When it comes to drivers of a stock's strength, expanding margins are a far stronger reason for optimism than poison pills and rumors of activist investors. The third biggest gainer for the IPIG portfolio last week was safety-equipment purveyor Mine Safety Appliances (NYSE: MSA ) , which also rose on its earnings news. Mine Safety Appliances' numbers were pretty strong, once you backed out the impact of currency fluctuations and a divestiture, and the market rewarded the company for those results. Solid results like that are also a decent reason for a company's stock to rise, but of course, what the company delivers in the future will drive where its stock goes next. The news isn't always good
Of course, not every stock gained, and the biggest loss in the IPIG portfolio for the week goes to the two-stock railroad combo of CSX (NYSE: CSX ) and Union Pacific (NYSE: UNP ) . Both reported solid earnings that propelled their shares to gains for the prior week's IPIG review. Still, lousy earnings numbers this week from a competitor on weak coal shipments served as a reminder of how dependent railroads are on that single commodity. That news was enough to drive the IPIG's railroads down on the week. Put the good together with the bad, and the IPIG portfolio finished the week up by $389.79 to close the week with a better than 20% return since its inception to wind up like this: Company Name Purchase Date No. of Shares Total Investment (Including Commissions) Current Value, July 26, 2013 | United Technologies | 12/10/2012 | 18 | $1,464.82 | $1,889.46 | | Teva Pharmaceutical | 12/12/2012 | 38 | $1,519.40 | $1,547.74 | | J.M. Smucker | 12/13/2012 | 17 | $1,483.45 | $1,896.18 | | Genuine Parts | 12/21/2012 | 23 | $1,476.47 | $1,888.30 | | Mine Safety Appliances | 12/21/2012 | 36 | $1,504.96 | $1,936.44 | | Microsoft | 12/26/2012 | 55 | $1,499.15 | $1,739.10 | | Hasbro | 12/28/2012 | 43 | $1,520.60 | $2,024.44 | | NV Energy | 12/31/2012 | 84 | $1,504.72 | $1,983.24 | | United Parcel Service | 1/2/2013 | 20 | $1,524.00 | $1,739.80 | | Walgreen | 1/4/2013 | 40 | $1,501.80 | $2,032.80 | | Texas Instruments | 1/7/2013 | 47 | $1,515.70 | $1,838.17 | | Union Pacific | 1/22/2013 | 6 | $805.42 | $956.40 | | CSX | 1/22/2013 | 34 | $712.50 | $839.12 | | McDonald's | 1/24/2013 | 16 | $1,499.64 | $1,568.48 | | Becton, Dickinson | 1/31/2013 | 18 | $1,518.64 | $1,858.50 | | Aflac | 2/5/2013 | 27 | $1,466.35 | $1,649.43 | | Air Products & Chemicals | 2/11/2013 | 17 | $1,510.99 | $1,770.04 | | Raytheon | 2/22/2013 | 27 | $1,473.91 | $1,890.27 | | Emerson Electric | 4/3/2013 | 28 | $1,548.12 | $1,674.40 | | Wells Fargo | 5/30/2013 | 37 | $1,525.48 | $1,609.87 | | Kinder Morgan | 6/21/2013 | 42 | $1,518.37 | $1,625.82 | | Cash | | | | $271.01 | | Total Portfolio | | | | $36,229.01 | Data from the iPIG portfolio's brokerage account, as of July 26, 2013. To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here. Does your investing strategy let you sleep at night?
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So far, General Motors' (NYSE: GM ) electric car strategy has not lived up to expectations. The company introduced the Chevy Volt in late 2010 to great fanfare. The Volt was meant to be a demonstration that the Detroit automakers could still be innovation leaders in the industry. As my colleague John Rosevear recently observed, the Volt got good ratings from auto reviewers, and customers are very happy with the car. The Chevy Volt. Source: General Motors. None of this has helped sales. The Volt missed sales goals by a wide margin in 2011 and 2012. So far, 2013 isn't shaping up to be any better. Electric-car start-up Tesla Motors (NASDAQ: TSLA ) just began delivering its Model S sedan in volume last fall, but the Model S still managed to outsell the Volt last quarter -- despite being far more expensive. The Tesla Model S. Source: Tesla Motors. However, help is on the way for GM, in the form of a car that isn't even called "Volt." At this year's Detroit Auto Show, GM unveiled the Cadillac ELR: a luxury coupe that builds on the Volt's plug-in hybrid technology. The Cadillac ELR may have more success than the Volt, as it's more likely to appeal to car buyers who would be willing to pay extra for a "green" car. Electric means luxury
There's good reason to believe that price/perception problems have been the Volt's downfall. Even after tax credits, the base model costs more than $30,000 -- far more than comparable gas-powered cars in the Chevy lineup, such as the Cruze. It also costs significantly more than Toyota's (NYSE: TM ) very fuel-efficient Prius hybrid. In other words, if price is a consideration, it's hard to make a good "business case" for the Volt. Even if fuel efficiency is a high priority, moving from a hybrid to a plug-in hybrid like the Volt significantly adds to the cost, while providing a limited benefit. This logic has also weighed on sales of Toyota's Prius plug-in model. On the other hand, if money is no object, you are probably not a likely customer for Chevrolet! By contrast, Tesla has successfully appealed to very wealthy individuals; the average selling price for its cars last quarter was nearly $100,000. The Model S offers a full luxury experience in a well-designed car and recently received the highest rating of any car from Consumer Reports. Tesla customers are willing to pay a handsome sum for this performance. GM's advantage
Tesla clearly has a great product on its hands with the Model S and is building a strong moat with its proprietary powertrain technology and Supercharger network. However, Tesla is not invincible. The biggest drawback of the Model S is that its range of 250-300 miles (with the largest battery pack) is insufficient for long trips. By contrast, the Cadillac ELR -- like the Volt -- runs on gasoline power after the electric charge is depleted, giving it unlimited range. The Supercharger network is Tesla's response to "range-anxiety." Tesla has nine Supercharger sites in California and the Northeast, with plans to expand to more than 100 stations by 2015. The Superchargers can provide up to 150 miles of range with a half-hour charge and are free to use for Tesla vehicle owners. When fully built out, the Supercharger network will be a great asset for Tesla. That said, most drivers wouldn't naturally make a half-hour pit stop every 100-150 miles. Moreover, even with 100 stations, Supercharger facilities will be far from ubiquitous. Some destinations will remain inaccessible. Furthermore, if there's traffic on the main highway, Tesla drivers will have to slog along, because that's where the Supercharger station will be. Meanwhile, their friends who are still stuck with internal-combustion engines will be able to make a detour, since they can fill up anywhere! Can Cadillac be hip?
Thus, I believe that there's room for Tesla competitors in the luxury electric car market. Some consumers will prefer the flexibility of plug-in hybrids over Tesla's full electric vehicles. The key question is whether the Cadillac brand can appeal to the sort of customers Tesla has won over. The average age of a Cadillac buyer is 65: This is probably not a good target demographic for alternative-energy vehicles. However, the most recent entry in Cadillac's vehicle lineup, the ATS, may be paving the way for the ELR. The Cadillac ATS is a luxury compact designed to compete with BMW's highly successful 3 Series. Earlier this year, GM reported that 20% of ATS buyers are under age 35, compared with just 10% for the rest of the Cadillac brand. If the ATS can maintain its current momentum, it will improve Cadillac's image among younger car buyers. This could be a big asset in terms of boosting customer consideration of the Cadillac ELR. It also helps that the ELR has a very "sporty" look compared with the Volt. The 2014 Cadillac ELR. Source: General Motors. The ELR is a cool-looking car and appears to have a classy interior. The car also features some innovative features, such as paddles on the steering wheel that allow the driver to manually activate the regenerative braking system to slow the car while going around curves. The Cadillac ELR is not expected to hit showrooms until 2014, but when it does, it will provide GM with a credible alternative-energy car in the luxury segment. Based on Tesla's success and the low sales for plug-in hybrids and EVs from mass-market automakers, the luxury segment may be the most viable market for these cutting-edge cars. Foolish conclusion
There's no guarantee that GM will have any more success with the Cadillac ELR than it did with the Chevy Volt. However, deep-pocketed car buyers who can afford to pay extra for plug-in hybrid or electric vehicle technology will want an all-around luxury experience. The Model S offers that experience. By contrast, the Chevy Volt is a nice car, but not luxurious by any stretch of the imagination. By combining Volt technology with a premium Cadillac design, GM has hit upon a combination with better prospects for success. Worried about GM?
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