Saturday, September 26, 2009
The Company's dividend will be payable as follows:
Record Date: October 8, 2009
Payment Date: October 22, 2009
Disclosure I am long TCAP shares, curently up ytd 13.92% not including dividends of 0.85 cents a share so far this year.
McDonald’s (MCD) is the leading global foodservice retailer with more than 32,000 local restaurants in more than 100 countries. Thursday, the company raised its quarterly dividend 10% to $0.55/share. The dividend is payable on December 15, 2009 to shareholders of record at the close of business on December 1, 2009.
MCD’s Chief Executive Officer Jim Skinner said, “So far in 2009 we’ve returned nearly $4.0 billion to shareholders through dividends and share repurchases, bringing total cash returned since the beginning of 2007 to about $15.5 billion. With today’s dividend increase, we expect to end the year near the high end of our three-year, $15 billion to $17 billion total cash return target.”
Disclosure I will be selling my holding in KFT and using the cash to purchase MCD shares market open Monday.
Therefore DHT no longer meets my demand for payment from my holdings. I will be selling my holding on Monday. I will no longer speak of DHT unless a decent payout dividend record is reestablished.
Tuesday, September 22, 2009
“We continue to manage Annaly conservatively in the current environment. Looking ahead, I believe that we are well-prepared for the opportunities that will present themselves as government policy in our markets continues to evolve,” said Michael A.J. Farrell, Chairman, President and Chief Executive Officer.
The Company distributes dividends based on its current estimate of taxable earnings per common share, not GAAP earnings. Taxable and GAAP earnings will differ because of non-taxable unrealized and realized losses, differences in premium amortization, and non-deductible general and administrative expenses.
Dividends may be reinvested through Annaly's Dividend Reinvestment Plan. Plan information may be obtained from the Plan Administrator, Mellon Investor Services at 1-800-301-5234, at www.annaly.com, or by contacting the Company.
Annaly manages assets on behalf of institutional and individual investors worldwide. The Company’s principal business objective is to generate net income for distribution to investors from its investment securities and from dividends it receives from its subsidiaries. Annaly is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”), and currently has 552,762,229 shares of common stock outstanding.
Disclosure I am long NLY shares.
Wednesday, September 9, 2009
Two suburban Chicago banks failed in Illinois, the Federal Deposit Insurance Corp. said:
InBank, the 14th bank to fail in Illinois this year, had $199 million in deposits as of Aug. 3, the agency said. Chicago-based MB Financial Bank has agreed to assume its deposits. InBank's failure will cost the deposit insurance fund $66 million.
Platinum Bank of Rolling Meadows was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver. As of Aug. 29, the bank had total assets of $345.6 million and deposits of $305 million, the FDIC said. The FDIC authorized payout of insured deposits and estimated the cost to its Deposit Insurance Fund will be $114.3 million. MB Financial Bank will accept the failed bank's direct deposits from the federal government.
Kansas City, Mo.-based First Bank of Kansas City also was closed by regulators. The FDIC said. De Soto, Kan.-based Great American Bank has agreed to assume the failed bank's deposits. First Bank of Kansas City had $16 million in assets and $15 million in deposits as of June 30, the regulator said. Its failure is expected to cost the federal deposit-insurance fund $6 million. First Bank of Kansas City is the second Missouri-based bank to fail this year, the FDIC added.
Sioux City, Iowa-based Vantus Bank and Oak Forest, Ill.-based InBank also were closed. Vantus Bank had roughly $368 million in deposits as of Aug. 28, the FDIC said, and Springfield, Mo.-based Great Southern Bank has agreed to assume the failed bank's deposits. The failure of Vantus Bank will cost the deposit insurance fund $168 million. It's the first bank to fail in Iowa this year, according to the FDIC.
In Arizona, First State Bank in Flagstaff was closed and Sunwest Bank of Tustin, Calif., will assume all of its deposits, the FDIC said. As of July 24, First State had total assets of $105 million and total deposits of about $95 million, the FDIC said. The failure will cost the deposit insurance fund an estimated $47 million, the FDIC said.
Phillip Moeller for Smart Money reports that there are six major lessons to be learned from this recession:
* The experts are not the end all, be all. The trust in financial institutions and leaders will not be restored for some time. All of the kind words from banks, brokerages and real estate companies didn’t amount to much when crunch time arrived. Make sure to protect yourself with an entry and exit strategy, instead of relying on the predictions of others.
* Learn how to budget, and live within it. Make a household budget and watch where your money is going. This is a good way to get a handle on spending and to help downsize if need be.
* Learn how to negotiate. Make sure that you do not have to pay full price. For most products and services, including home improvement, the consumer is in the drivers seat.
* Actively manage your own investments. As you may have learned from the past market meltdown, buy-and-hold isn’t foolproof. Passive investing is the way of the past. To brush up on your trend following skills, educate yourself. The ETF Trend Following Playbook is a simple and effective place to begin.
* Forget about housing wealth. Even a few years of solid increases in home values could bring on mass amnesia. Do not depend upon housing wealth for a retirement or even appreciation. Housing gains are only a cushion, nothing more.
* Stay healthy, both mentally and physically. People who exercise feel better and think better. Remember that exercise is free and bad health can cost you a small fortune.
* To this we’d add: Brush Up. Brush up on what you need to know to be successful in the markets. If you’ve taken a beating, dust yourself off, pull yourself up by the bootstraps and examine where you are now, your strategy, how you’re feeling and what you can do to improve. Looking inward can only benefit you.
Disclosure I am long many ETF's
Nevertheless, when it comes to the future’s most dominant economic force, “green shoots” can bloom in any season. During the precarious pullback in June, the iShares China 25 Index (FXI) found support at the 50-day moving average before rocketing higher yet again.
Still, we’re about to see the first breakdown of technical support since March… when the 6-month, world stock rally began. With FXI falling roughly 1.2% on Monday, August 31, 2009, the popular benchmark breached the short-term, 50-day moving average.
Ditto for SPDR S&P China (GXC) and PowerShares Golden Dragon China (PGJ). Again, we haven’t seen the China ETFs below 50-day trendlines since March… when they were moving the other direction!
Should we even be concerned that the Shanghai Composite over on the mainland is down 20%… or that it has fallen below a longer-term 125-day support line? I think we may need to perk up!
Consider the following reality: The 6-month cyclical bull for worldwide stock assets began in China. Its stimulus package focused 75% of its $550 billion directly on infrastructure, which required a host of natural resources from iron ore to nickel. China went on to purchase resources and companies in countries from Brazil to Australia, and the re-inflation of the global industrial cycle seemed to begin anew.
It follows that we must consider the impact of falling equity prices in China. Would the rest of the world really have investor confidence were it not for China, Southeast Asia and expectations for emerging market growth?
It’s fine to celebrate the 6 consecutive months of gains for the S&P 500 and the Nasdaq. What’s more, we may decide that a 1% Monday selloff from recent highs is “no big deal.”
However, I myself am particularly wary of developed market ETFs after an unprecedented winning streak. Not only should we expect a correction, but we may need to see conviction on the part of emerging market investors (a la “buying the dips”). Meanwhile, keep a firm handle on your stop-loss protection.
Hey… it’s a different world out there. It used to be whatever happens in the U.S. markets, the rest of the world had to take notice. Today, whatever happens in China… the U.S./Europe need to take notice.
Disclosure I am long FXI shares.
Disclosure I am long BP shares.
Tuesday, September 8, 2009
Billions of dollars are being poured into cancer-fighting drugs. But it’s not just to find a cure – it’s also to gain market share in one of the most untapped markets, from a pharmaceutical standpoint. The related ETFs could benefit no matter which company discovers a drug first.
After largely ignoring the disease, virtually every large pharmaceutical company seems to have discovered cancer now that more about the disease is known. A substantial portion of the smaller biotechnology companies are focused on it, as well. Combined, the two industries are pumping billions of dollars into the development of drugs to fight off the disease, reports Andrew Pollack for The New York Times.
Two industry trends are pushing the move:
- Recent scientific discoveries have suggested new targets for cancer drug researchers to attack
- Drug companies are experiencing declining profits from staple drugs such as Lipitor; the high prices that cancer drugs can command are proving to be alluring
- Cancer patients are often desperate for drugs while insurers could face outrage if they denied payments, so drug makers can charge hefty sums for medicines – even those that don’t work very well
Gardener Harris for The New York Times reports that a settlement has been reached regarding the pharmaceutical giant Pfizer (PFE) over the company’s illegal promotion of its now-withdrawn painkiller, Bextra. The $2.3 billion fine is the largest-ever levied for Medicare and Medicaid fraud, and the agreement also includes some promotional practices involving other Pfizer drugs — Zyvox, Geodon and Lyrica.
European shares rose for a fourth straight session, with miners getting a lift from stronger gold prices. Australian shares were among the winners in Asia, buoyed by a jump in business confidence to its highest level since October 2003.
Morgan Stanley changed its tech-sector view, upgrading systems and PC hardware to attractive from in-line, while downgrading software to in-line from attractive. Among several rating changes, the broker cut Dell (DELL 15.72, +0.03, +0.19%) , IBM(IBM 118.17, +0.71, +0.60%) and Texas Instruments(TXN 24.86, 0.00, 0.00%) to equal-weight from overweight.
Credit Suisse downgraded American International Group (AIG 38.36, -1.69, -4.22%) to underperform from neutral and slashed its price target to $15 from $30, saying there could be little value left for common equity holders after AIG has sold off its core businesses.
Costco Wholesale Corp. (COST 56.95, +1.48, +2.67%) was upgraded to overweight from equal weight by Morgan Stanley, which said food deflation and other headwinds that had been pressuring the company are dissipating.
Kraft Foods Inc.(KFT 26.41, -1.69, -6.01%) said on Monday that it's pursuing a takeover of Cadbury (CBY 52.59, +15.13, +40.39%) after the U.K. chocolate maker rejected a $16.7 billion bid. Kraft said a combination of the two companies would create a "global powerhouse" in snacks and confectionery with annual sales of more than $50 billion. Analysts, however, said the U.S. giant may need to significantly raise its offer. A counter-bid from Nestle and Hershey (HSY 39.45, +0.82, +2.12%) is also considered a possibility.
Gold futures surged above $1,000 an ounce on Tuesday, propelled by weakness in the U.S. dollar. The December contract hit an intraday high of $1,009.40. Analysts said it's unclear how sustainable the rise above $1,000 will be, as the last two times it occurred it was followed by a sharp correction back below $900.
Chartered Semiconductor Manufacturing (CHRT 17.25, -1.53, -8.15%) said over the weekend that it has struck a deal to sell itself to Abu Dhabi's Advanced Technology Investment Co. for approximately $1.8 billion in cash.
Atheros Communications Inc. (ATHR 28.82, +0.84, +3.00%) said it will acquire Intellon Corp. (ITLN 7.15, +2.15, +43.00%) in a stock-and-cash deal valued at about $244 million, or $181 million net of Intellon's cash and short-term investments.
Disclosure I am long KFT shares.
Bullion for December delivery surged to $1,009.40 on the Comex division of the New York Mercantile Exchange, taking this year’s gain to 14 percent. Gold futures, which reached a record $1,033.90 in March 2008, are set for a ninth yearly gain. Crude- oil futures and all six industrial metals on the London Metal Exchange rallied as the Dollar Index lost as much as 1.1 percent to more than an 11-month low. Raw materials typically move inversely to the U.S. currency.
Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against potential inflation and debasement of currencies. Gold, silver and palladium holdings in exchange-traded funds have advanced to records.
“We don’t see any immediate recovery in the dollar and gold is one of the better alternatives,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “From here, the next technical level is $1,040, and at the rate it’s going it might not be difficult. There’s a lot of new money coming into gold.”
Gold last traded at more than $1,000 on Feb. 20, the first time the metal had reached that price since March 2008. Futures then retreated as low as $865 on April 6. The metal added 0.9 percent to $1,005.70 at 8:35 a.m. in New York. Bullion for immediate delivery surged as high as $1,007.70 in London and was last at $1,005.45.
“There’s not many good options for investors to hedge against a declining dollar and rising inflation,” Hwang Il Doo, head of trading with KEB Futures Co., said today from Seoul. He expects gold will rise to $1,100 an ounce by year’s end.
The metal’s advance boosted producers. Newcrest Mining Ltd., Australia’s largest gold-mining company, gained as much as 5 percent to A$34.18. Zijin Mining Group Co., China’s largest producer, rose as much as 10 percent in Hong Kong.
Lead, which has paced this year’s gains in metals, rose as much as 5.7 percent to $2,484 a metric ton, the highest level since May 2008. The metal’s 149 percent rally this year came after China, the world’s largest supplier of the metal, closed smelters and investigated lead-poisoning cases. Copper has more than doubled and traded at $6,505.75 a ton, the highest in more than a week. Goldman Sachs Group Inc. today raised its forecasts for industrial metals as a recovery in the world economy reduces spare capacity.
Gold may be cementing its status as a haven investment as governments seek to flood the financial system with cash in an effort to haul the global economy out of a recession.
“The reasons to own gold as an investment make sense,” Sydney-based Greg Gibbs, a Royal Bank of Scotland Group Plc strategist, said in advance of the metal’s gain to $1,000 today. “It is a hedge against policy makers losing control of fiscal and quantitative monetary policies.”
The Dollar Index, a six-currency gauge of the dollar’s value, declined for a third day today. The measure has slipped 5 percent this year.
Other precious metals have outperformed gold this year. Silver for December delivery in New York gained as much as 3.5 percent to $16.86 an ounce today, the highest since August 2008, and was last at $16.725. It has climbed 48 percent this year.
An ounce of gold now buys about 60 ounces of silver in London, the least since August 2008, according to Bloomberg data. That’s down from a high of 84.4 on Oct. 10, which was the most since March 1995.
Palladium for December delivery in New York rose 1 percent to $299 an ounce, the highest price in a year. The best performing precious metal this year has gained 58 percent in 2009. Platinum for October delivery added 2 percent to $1,284.80 an ounce, increasing its gain this year to 37 percent.
U.S. President Barack Obama has increased U.S. marketable debt to an unprecedented $6.78 trillion as he borrows to spur the world’s largest economy. Goldman Sachs predicts that the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010.
Crude-oil futures, used by some investors as an inflation- outlook guide, have soared 57 percent this year. Consumer prices will rise 0.9 percent in advanced economies next year compared with 0.1 percent in 2009, the International Monetary Fund forecast in July.
Gold at more than $1,000 may attract more investors seeking to take advantage of the longest advance in the metal’s price in 60 years. Assets in some of the industry’s largest exchange- traded funds have reached all-time highs the past few months.
The SPDR Gold Trust, the biggest ETF backed by the metal, reached a record 1,134.03 metric tons on June 1. The fund, which held 1,077.63 tons as of Sept. 4, has overtaken Switzerland as the world’s sixth-largest gold holding. Bullion held in ETF Securities Ltd.’s exchange-traded products added 6.640 ounces to a record 8 million ounces (248.8 tons) yesterday, its Web site showed.
The company’s silver holdings increased 0.9 percent to an all-time high 20.516 million ounces, while palladium assets rose 1 percent to a record 456,953 ounces.
Investors should avoid buying gold at $1,000 an ounce because investment demand is less compared with earlier this year, UBS AG analyst John Reade wrote in a note today. UBS maintained its one-month and three-month forecasts for the metal at $950 and $1,000 an ounce respectively.
“We are unconvinced that all the ingredients are in place for a sustained surge higher,” Reade said. “Only if we see much stronger and more broad-based buying in gold will we change our view that this is a profit-taking opportunity rather than a signal to buy gold.”
Disclosure I am long GLD Shares.
Silver Wheaton shares were up 2% at $11.82 premarket, while Barrick Gold rose 3% to $41.33.
The Canadian mining company will pay Barrick $625 million in cash over three years. It will also pay the lesser amount of $3.90 per ounce of silver delivered or the prevailing price.
The stake in the Pascua-Lima mine, which is still being built by the world's largest gold-mining company, will give Silver Wheaton an estimated 9 million ounces a year for the first five years it operates. The deal requires Barrick to have 75% of design capacity completed by the end of 2015.
Retroactive to Sept. 1, Silver Wheaton will get all the silver output from the Lagunas Norte, Pierina and Veladero mines through at least 2013, estimated about 2.4 million ounces a year. If Barrick hasn't completed 75% of design capacity at the Pascua-Lima mine by 2013, Silver Wheaton will continue to get silver from the other operation minds for the next two years until Pascua-Lima is up and running.
President and Chief Executive Officer Peter Barnes said the deal "propels Silver Wheaton to the next level in terms of size and growth profile."
Silver Wheaton is paying for the deal with $70 million in cash on hand and part of its $250 million in shares sold to Genuity Capital Markets and GMP Securities LP, announced Tuesday. The remaining payments will be made from operating cash flow. The company doesn't expect a debt drawdown.
Stocks can be as tricky a business for novice investors as they are for seasoned players. However, as Warren Buffet has always propagated, 'Right stocks at the right price' is the way to laugh your way to the bank. This means, avoiding all those 'junk' stocks and setting your sights only on the 'right ones'.
So how do we really separate the wheat from the chaff? In an age where Satyam [ Get Quote ] and Infosys [ Get Quote ] both ruled the roost at one point of time, how do we know which ones are the black sheep and which ones are not?
In this issue of women's weekly, we bring to you the fundamentals of choosing a stock from a long-term perspective:
A sound management is like a captain of a ship. The onus of charting out the right direction in still waters and steering the company safely in troubled times lies on the management.
We would even go to the extent of saying that the way in which a management behaves, determines to a great extent, the long term success of the business. You don't want to be an investor in a company where the management takes money from the shareholders to fill its own pockets.
A case in point here would be Satyam. It promised its investors the moon. However, they soon had to settle for sleepless nights as the ugly truth of Satyam reared its head.
Traders routinely buy and sell the same stocks within a time frame of a few hours. 'Investors', on the other hand, put money in stocks and hold on for a longer period of time, generally at least 2 to 3 years.
Develop an investor mentality. Adopt a long-term investment strategy. While looking at the quarterly results of the company, don't lose sight of the bigger picture. Invest for a longer duration which promises more returns and is not affected by daily market fluctuations.
Research shows that the shorter the duration of investment, the more are the chances of losing money. While, with long term investing, the chances of losing money are lesser.
Remember, the longer the investment period, the greater are the chances of making money.
Emotions need to be kept aside while dealing with stocks. Don't get emotionally attached to your investments. Your aim is to get maximum profits out of your stocks. It's immaterial if this is achieved through selling them, buying them or holding them.
Just because you are emotionally attached to the stock or just because the little voice inside your heart says, "Give it some time and things will work out just fine", does not mean that you have to hold on to a stock when it is destined to hit its nadir.
At the end of the day, it's all about numbers. Numbers can tell a story - you should just have an ear attuned to understanding their language. It makes sense to thoroughly investigate the company and its track record.
Consistency is the key. If the company is good, it will have a consistent performance. Its income statement will show consistent profits. Its annual reports will talk about the consistent dividends doled out. Ideally, the company should have a dividend history over the past 5 years and a dividend payout comparable with its peers.
In the case of 'growth stocks', the game changes a little. The company may not distribute its' profits as dividends; rather, it would invest the profits back into the venture for future growth. However, all said and done, it should not invest so much that it has to resort to frequent financing from outside. In other words, it should not undertake frequent dilution of equity or raise so much debt that its debt to equity ratio spirals out of control.
Looking at prior records helps one understand the company's capabilities. It gives an idea, shows a direction, and helps to understand the company's vision and the path ahead.
The golden rule to investing is considering the future growth prospects of the company you are investing in. During the dot-com boom, many investors displayed a herd mentality, investing in companies without any research. The result was the dot-com bust that followed.
It is important to not only know the company like the back of your hand but also be aware of the external factors influencing the growth of the stock. The overall state of the economy, the factors influencing political and social environment should also be considered while investing.
Sector growth, the demand supply trend and the competition in the sector also need attention before you decide to invest in a particular stock.
If you are a serious investor, you cannot go by intuition alone. You will need to do a lot of homework before zeroing on a particular stock. This should not be difficult. We may be considered impulsive buyers, but we do have our own ways of background research before we make the ultimate buying decision.
Homework before investing would include reading up about the company you are about to invest in. Reading its annual reports, studying the balance sheet, analyzing its profits, assets and liabilities; reading interviews of the top management, keeping yourself updated about the latest economic policies.
In short, being the sponge and soaking every piece of news and information related to your investment.
Keep a constant track of your investments. Regardless of the market condition, whether it is a bear market or a bull market, it is your money that is at the stake. Your hard earned money! You owe it to yourself to ensure that the savings that you have invested are showing a promise and growing.
It's the last mile that makes the difference in the race. It's not just about the right formula but about the grit to see it through. The grit to emerge as a winner.
Don't lose steam once you invest. Serious follow up is what will differentiate you from other investors. It will be your secret weapon, your protective armour, the secret charm that will help you make the best of your investments.
Friday, September 4, 2009
Five large cap buy recommendations concentrated on North American natural gas, Anadarko Petroleum (APC), Devon Energy (DVN), Encana (ECA), EOG Resources (EOG) and XTO Energy (XTO), have demonstrated volume growth on a basis that takes account of financing (see chart Volume per Share, Adjusted for Debt and Dividends, below). All have low McDep Ratios ranging from 0.72 to 0.91 with the top growers of the latest quarter coincidentally having the higher McDep Ratios.
Stock prices are in an uptrend by the 200-day average measure despite intense short-term pressure on the price of the companies’ main product, clean natural gas. Potentially rebounding economic activity in 2010 may demand the new volumes not needed today for industrial production or power generation. The large cap North American natural gas independents account for 5 of our 28 buy recommendations. We suggest that one or more might account for 18% of enterprise value in a McDep Energy Portfolio, or perhaps 24% if you like the prospects for natural gas as much as we do.
Since the most recent quarterly disclosures, we have modified our volume measurement technique to smooth the debt factor and to include an adjustment for income. As in the past, the share adjustment gives credit for share repurchase or assesses a cost for issuing new shares. The debt adjustment neutralizes the appearance of growth that may be financed with borrowed funds. Our current method takes incremental debt in a quarter and assumes that it is replaced by a corresponding amount of shares issued at Net Present Value (NPV). As a result, the latest change in NPV affects only the latest increment of debt, not the embedded base. The dividend adjustment, also added since the quarterly disclosures, will become meaningful when comparing low dividend paying independent producers with income stocks.
Meanwhile, the 40-week average for six-year oil has turned up this month to $71. An uptrend can appear stronger when the average itself is moving up in addition to latest price being above the average. Latest settlement prices for the average of futures for the next six years are $83 a barrel and $6.71 a million btu. Natural gas is just under the 40-week average of $6.89. Our five large cap independent natural gas buys are positioned to weather the next few months of potential short-term commodity pressure and to participate in the possible upside thereafter.
Disclosure I am long XTO shares.
To receive this dividend, you must own the shares before September 17.
Disclosure I am long DTE shares.
To receive the dividend, you must own the shares before September 28th.
Disclosure I am long NUE shares.
Monday, August 31, 2009
The deal pairs a comic book publisher that just recently began to produce its own movies with one of the largest international media companies in the world.
"This is perfect from a strategic perspective," Disney Chief Executive Robert Iger told CNNMoney.com. "This treasure trove of over 5,000 characters offers Disney the ability to do what we do best."
On a conference call with investors, Iger said the deal will allow Disney to sell Marvel's vast array of characters and properties across different media platforms and in many more markets. For instance, Iger said that Disney's Pixar animation unit was excited about the opportunities that a Marvel acquisition could yield.
"Spider-Man will appear in 'A Bug's Life' sequel," joked Barclays Capital analyst Anthony DiClemente.
The deal would give Disney some content that appeals more to boys, a market it has been looking to develop, Iger said. Disney XD, a television station and video game unit, already had a deal with Marvel to use some of the comic book company's action heroes in its content.
"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," said Marvel Chief Executive Ike Perlmutter. "This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney's tremendous global organization and infrastructure around the world."
0:00 /5:30Disney bets $4 billion on Marvel
Disney Chief Financial Officer Tom Staggs noted that Marvel owns the rights to many action-hero characters that are not widely known, which Disney anticipates bringing to the forefront for future movies or TV shows should the deal go through.
If Marvel shareholders approve the deal, they would receive $30 per share in cash and 0.745 shares of Disney for each share of Marvel that they hold. The deal is valued at $50 per Marvel share, more than a 29% premium, based on Friday's closing price.
Disney said it will issue about 59 million shares as a result of a deal, but it will repurchase as many shares over the course of the 12 months following the deal's closing.
Marvel has launched a large number of action-hero movies over the past decade, including "Spider-Man," "X-Men," "The Fantastic Four" and "The Incredible Hulk."
Last summer's "Iron Man" blockbuster earned just under $100 million over three days, the second-best non-sequel opening ever, according to Entertainment Weekly. "Iron Man" was the first Marvel movie to be fully financed and produced by the comic book company.
But Marvel still holds deals with Paramount, Sony and Fox for future movies, including several more Spider-Man films. Marvel chairman Morton Handel estimated that the company has about five more films with Paramount and intends to honor the current contracts it has with other movie studios, even if the Disney deal is inked before the contracts expire.
Marvel pays Paramount, the comic book company's primary movie distributor, between $20 million and $60 million per movie in distribution fees, according to Barton Crockett, analyst at Lazard Capital Markets.
Crockett said Disney would likely become the sole distributor of Marvel's movies in the future, giving it a "full plate" of movie releases, including Pixar, Marvel and its own films.
Shares of Marvel (MVL) soared 26% in morning trading. Shares of Disney (DIS, Fortune 500) were down 3%.
share on common stock, payable May 1, 2009, to stockholders of record on March 31, 2009.
Deere & Company manufactures and distributes products and services for agriculture and forestry worldwide. The company operates through four segments: Agricultural Equipment, Commercial and Consumer Equipment, Construction and Forestry, and Credit. The Agricultural Equipment segment offers a line of farm equipment and related service parts, including tractors; combine, cotton, and sugarcane harvesters; tillage, seeding, and soil preparation machinery; sprayers; hay and forage equipment; integrated agricultural management systems technology; and precision agricultural irrigation equipment.
The Commercial and Consumer Equipment segment provides equipment, products, and service parts for commercial and residential uses, such as tractors for lawn, garden, commercial, and utility purposes; mowing equipment, including walk-behind mowers; golf course equipment; utility vehicles; landscape and nursery products; irrigation equipment; and other outdoor power products. The Construction and Forestry segment offers a range of machines and service parts used in construction, earthmoving, material handling, and timber harvesting, including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, feller bunchers, log loaders, log forwarders, log harvesters, and related attachments. Its products and services are marketed primarily through independent retail dealer networks and retail outlets.
The Credit segment primarily finances sales and leases by dealers of new and used agricultural, commercial and consumer, and construction and forestry equipment. It also provides wholesale financing to dealers of the foregoing equipment, provides operating loans, finances retail revolving charge accounts, offers certain crop risk mitigation products, and invests in wind energy generation. Deere & Company was founded in 1837 and is based in Moline, Illinois.
Disclosure I am long DE shares
Tuesday, August 25, 2009
Why would preferred shares being appealing?
- Right now, several preferred share ETFs are yielding around 8% or more.
- Preferred shares have guaranteed priority over common shares when it comes to dividend payments and a higher claim on the assets of a company in the event of bankruptcy, says Shefali Anand for The Wall Street Journal.
- They provide income and serve to lower portfolio risk, making them especially appealing in turbulent times.
Preferred stock is basically senior equity. In exchange for a limited claim on the company’s assets and future growth, preferred shares are entitled to a dividend preference and fixed rate of dividends. Before any dividends can be paid on the common shares, all dividends owed to the preferred stock classes must be satisfied. Owners of preferred shares also give up their voting rights.
Preferred shares lost a chunk of value since late last year, sending yields up to 20% and 30% in February and March. Now that investors are feeling more optimistic, the yields have come back down.
- iShares S&P U.S. Preferred Stock Index (PFF): up 27.7% year-to-date; 8.83% yield
- PowerShares Preferred (PGX): up 10.3% year-to-date; 9.79% yield
For more stories about ETFs, visit our ETF category.
Disclosure I am long PFF anf PGX shares.
The move is in line with Procter & Gamble’s desire to shed non-core businesses that have experienced slower-than-average growth in recent years.
The deal marks a milestone for P&G’s new chief executive, Bob McDonald, who moved into his current position in July.
"We know that our shareholders don't reward us for size. They reward us for growth," said McDonald on a conference call. "We are going to do what we have to do to get the right portfolio of businesses together. We are focused on growth."
The sale is expected to be completed by the end of the year.
Disclosure I am long PG shares.
CenturyLink is a leading provider of high-quality voice, broadband and video services over its advanced communications networks to consumers and businesses in 33 states. CenturyLink, headquartered in Monroe, La., is an S&P 500 Company and expects to be listed in the Fortune 500 list of America's largest corporations. For more information on CenturyLink, visit www.centurylink.com.
Disclosure I am long CTL shares
Monday, August 24, 2009
If you’ve unfamiliar with my prior columns, you might not know that I focus primarily in the small-cap space – both in my specialist areas of healthcare and biotech and other sectors, too.
Typically, small-cap stocks purchased for capital appreciation and big gains more so than they are sought for dividends income.
But I’m actually a big fan of dividends, and the stability of the income they bring as well.
So is there a way to keep an eye on growth and earn solid, steady income at the same time? Usually, the two don’t go hand-in-hand – especially not in the small-cap sector.
But that doesn’t mean to say that it’s impossible to grab the best of both worlds.
There is a way to load your portfolio with outstanding profit potential and generate income too. Here’s how I found them, and three stocks that are perfectly suited to do the job.
Digging For Dividends
I’m not a market timer so I’m not going to tell you that now is the time to get out of equities before the market turns lower.
But what I will say is that with the Nasdaq and Russell 2000 (small-cap) indexes having blasted off their lows by 58% and 67% respectively, it makes sense to get a bit more defensive.
The reason is two-fold – and very simple: Owning dividend-paying stocks generates income and improves a portfolio’s return over the long-term.
However, it’s hard to find good small-cap companies that pay dividends. Smaller companies usually pour any excess cash back into the business to help it grow, rather than distributing it back to shareholders.
In fact, of more than 7,400 stocks with market caps under $1 billion, only 1,356 pay dividends. And if you want a meaningful dividend yield – let’s say 3% – the number decreases to less than 800.
I further whittled down the list to companies with high current ratios, low debt, and profit expectations to help ensure that dividends would continue to get paid.
I also stayed away from companies that paid a very high dividend. Companies with yields approaching 10% or higher may find those payouts unsustainable if business continues to be difficult.
Yes, if you want a higher potential reward, you do need to take on more risk. But buying stocks with sky-high dividends is riskier than those with solid but more sensible yields.
Here are three of the best from my small-cap dividend stock screen…
A Trio Of Small-Cap Dividend Stocks
- WD-40 Company (Nasdaq: WDFC):
The company makes everyone’s favorite industrial lubricant – WD-40 – plus household cleaners and other products. Through the first nine months of its fiscal year, it generated $18 million in profits and boasts $36 million in cash versus $21 million in debt. Earnings per share are expected to grow 13% in fiscal 2010.
Current dividend yield: 3.4%
- American Ecology Corporation (Nasdaq: ECOL):
The firm handles America’s hazardous waste. Not a great business if you’re the guy with the rubber gloves moving barrels of the stuff. But not bad if you’re an investor – particularly a new one, given that the shares have endured a beating over the past year. ECOL is profitable, has $24 million in cash and no debt. Over the first six months of 2009, it generated $17 million in cash from operations. So far it has paid out over $6 million in the form of dividends.
Current dividend yield: 4%
- CDI Corporation (NYSE: CDI):
The company provides engineering and information technology staffing services. With so many businesses cutting jobs, it’s had a tough time over the past year. But it’s still profitable, with earnings per share expected to nearly double next year. It has $77 million in cash, no debt and generated $10 million in cash from operations.
Current dividend yield 3.6%.
If you have any small-caps paying dividends in your portfolio, use the “Comments” link below to let me know which ones are your favorites and I’ll run a follow-up column, featuring stocks sent in by readers. Be sure to tell me why you like the stocks, too.
Hoping your longs go up and your shorts go down.
Disclosure I am long ECOL shares.
The payout is up from its previous dividend of 47 cents per share.
The company dividend is payable on Oct. 8 to shareholders of record on Sept. 24.Shares rose 66 cents, or 3 percent, to $22.54 in afternoon trading. They've traded between $13.25 and $23.12 in the past year.
Getty Realty Corp. operates as a real estate investment trust (REIT) in the United States. The company engages in the ownership and leasing of retail motor fuel and convenience store properties, and petroleum distribution terminals. The company's properties are leased or sublet to distributors and retailers engaged in the sale of gasoline and various motor fuel products, convenience store products, and automotive repair services. As of December 31, 2006, the company owned 836 properties and leased 216 additional properties in 13 states located principally in the northeast United States. Getty Realty Corp. elected to qualify as a REIT. As a REIT, the company would not be subject to federal income tax, provided it distributes at least 90% of its REIT taxable income to its shareholders. The company was founded in 1955 and is headquartered in Jericho, New York.
Disclosure I am long GTY shares.
Wednesday, August 19, 2009
Global X Funds is launching an index-based exchange-traded fund (EFT) focused on the Nordic region of Europe, Index Universe reports. The Global X FTSE Nordic 30 ETF will be the first ETF launched in the U.S. for Nordic companies.
The ETF tracks an index, which includes the 30 largest companies by market-cap size and liquidity in Denmark, Finland, Iceland, Norway and Sweden. Besides the Nordic region, Global X Funds is planning to enter at least four more different emerging markets.
Tuesday, August 18, 2009
About Whirlpool Corporation
Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales in 2008 of approximately $19 billion, 70,000 employees, and 67 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world. Additional information about the company can be found at http://www.whirlpoolcorp.com.
As a group, U.S. real estate investment trusts, also known as “REITs,” have climbed 10% in value since the beginning of the year and other sub-segments are handedly outperforming key stock benchmarks like the S&P 500 (NYSEArca: SPY) and the Dow Jones Industrial Average (NYSEArca: DIA).
REITs cover various segments of the real estate market including apartments, hotels, industrial properties, medical facilities, shopping malls and offices.
Let’s evaluate real estate ETFs tracking some of these areas.
iShares Dow Jones U.S. Real Estate Index Fund (NYSEArca: IYR)
IYR is benchmarked to the Dow Jones U.S. Real Estate Index. The index measures the performance of the real estate industry within the U.S. equity market, including real estate holding and development companies along with real estate investment trusts (REITs) subsectors. IYR has $1.3 billion in assets.
Year-to-date*, IYR has climbed 15.45% and the fund carries a 8.4% dividend yield. In 2008, IYR fell 39.99% and the fund’s annual expense ratio is 0.48%.
SPDR DJ International Real Estate ETF (NYSEArca: RWX)
The performance and yield of RWX is linked to the Dow Jones Global Ex-US Select Real Estate Securities Index. The fund's index is float adjusted market capitalization weighted and designed to measure the performance of publicly traded real estate securities in developed and emerging countries excluding the United States. RWX has just over $600 million in assets.
So far this year, RWX has climbed 24.78% and the fund carries a 4.9% dividend yield. In 2008, RWX fell 51.11% and the fund’s annual expense ratio is 0.60%.
iShares FTSE NAREIT Industrial/Office Index Fund (NYSEArca: FIO)
FIO is tied to the FTSE NAREIT Industrial/Office Index, which tracks industrial and office real estate stocks in the U.S. market. Top holdings include Boston Properties, Duke Realty, Mack Cali Realty and ProLogis.
So far this year, FIO has climbed 14% and the fund carries a 6.4% dividend yield. In 2008, FIO fell 48.39% and the fund’s annual expense ratio is 0.48%.
Claymore/AlphaShares China Real Estate ETF (NYSEArca: TAO)
TAO follows the AlphaShares China Real Estate Index. The primary criteria for selecting a company for inclusion in the index is that the company derives a majority of its revenues from real estate development, management or ownership of property in mainland China or the Special Administrative Regions of China such as Hong Kong and Macau. Index holdings must have a market capitalization of $500 million or greater for consideration.
So far this year, TAO has climbed 64% and the fund carries a 2.2% dividend yield. In 2008, TAO declined 56.98% and the fund’s annual expense ratio is 0.65%.
The Future for Real Estate Stocks
According to Colliers International, office vacancies are now at 15.4% through the second quarter and up from last year. Other parts of the real estate market remain weak, particularly those like hotels and shopping malls, which are closely tied to consumer spending.
Property prices are being hurt by falling rental income which is exacerbating declines in value. As tenant vacancies rise, rental income declines making properties less valuable than the prices they were financed at.
Some property managers find themselves at the mercy of the rental market. When leases expire and come due for renewal, managers are forced to cut rents just to keep tenants from leaving. Many landlords have no choice but to helplessly watch their cash flows dwindle.
Did real estate prices really bottom as some analysts suggest? This is a burning question that has all real estate investors on the edge of their seats. If lower property prices are still ahead, the share prices of real estate stocks may eventually wake up to this reality. Until then, only time will tell.
Three of the ETFs are expected to invest in U.S. Treasuries, three in corporate bonds and one in mortgage-backed securities, according to the filling from The Vanguard Group Inc. of Malvern, Pa.
The ETFs — planned as shares of proposed bond index funds — all come with expected expense ratios of 0.15%.
That is the same expense ratio iShares, a unit of Barclays Global Investors of San Francisco, charges for its comparable U.S. Treasury ETFs, but lower than the 0.20% it charges for comparable ETFs that invest in corporate bonds and the 0.25% it charges for its comparable mortgaged-backed ETF.
It appears as if Vanguard’s goal is to wrest “control of the exchange-traded bond fund market from Barclays’ iShares group,” Daniel Wiener, the Brooklyn, N.Y.-based chairman and chief executive of Adviser Investment Management Inc. of Newton, Mass., which manages more than $1 billion in assets, wrote in an e-mail.
Vanguard, however, has a long way to go before it can best iShares.
Vanguard offers five fixed-income ETFs with more than $8 billion in assets, while iShares offers 27 bond ETFs with total assets of more than $63 billion, according to Morningstar Inc. of Chicago.
But by pricing its bond ETFs lower than iShares – at least with regards to corporate and mortgaged-backed funds — it’s off to a good start, according to industry experts.
“I think cost is going to be at the top of investors’ minds,” he said.
Otherwise, there isn’t anything unique about the proposed Vanguard ETFs.
The proposed funds will be pegged to Barclays Capital indexes, formerly Lehman Capital indexes.
Barclays acquired the indexes, developed by Lehman Brothers Holdings Inc., following the New York investment bank’s Sept. 15 filing for Chapter 11 bankruptcy protection.
Vanguard, however, believes its proposed ETFs will offer investors something different.
For example, comparable iShares ETFs track credit indexes, rather than corporate indexes.
Credit indexes include exposure to bonds issued by “supranationals” —institutions established and controlled by their sovereign government — which tend to be AAA bonds with lower yields, said Rebecca Cohen, a spokeswoman at Vanguard.
For its part, Vanguard said expanding its bond offerings makes sense given the firm’s expertise.
“Vanguard has a quarter-century of experience in bond index management, and expanding our range of funds is a logical extension of our capabilities,” Bill McNabb, president and chief executive of Vanguard, said in a statement. “Financial advisers and institutions want to construct broadly diversified fixed income portfolios, while retaining the ability to emphasize particular sectors or durations. Working in concert, our broad-based bond index funds and these new, more targeted funds can help to achieve this goal.”
But at least one financial adviser speculated there might be another motive for Vanguard.
“ETFs are going to find their way to 401(k) plans perhaps more rapidly than we believe,” William Koehler, chief investment officer of ETF Portfolio Solutions Inc., a Leawood, Kan., firm with $50 million under management.
Barclays launched the “iShares in 401(k)” program in May to help financial advisers use ETFs as investment options within 401(k) retirement plans.
Vanguard may sense that it needs to increase the number of bond ETFs it offers if it wants to market its ETFs in the retirement space, Mr. Koehler said.
Expanding its bond ETF lineup, however, has nothing to do with an attempt by Vanguard to get ETFs into retirement plans, Ms. Cohen said.
In some cases, it wouldn’t be appropriate for retirement plans to use the ETFs, given that institutional shares of the proposed funds are cheaper with an expense ratio of 0.09%, and available to companies and organizations with account balances of $5 million or more, she said.
About 3 months ago, I was advised by a long-term friend to take a look at BHP Billiton (BHP) as "the best single way to play the Resource space". He further went on to talk about the dynamic growth that they had experienced, and how brilliant the management was. Upon taking a closer look at it, he had some good points.
First, the breadth of BHP's business is impressive, as it covers just about all key aspects of the Resource world:
1) Base Metals (Copper, Zinc, Lead, Iron Ore, Nickel and Cobalt)
2) Coal (Metallurgical and Thermal coal)
4) Oil and Gas
6) Rough Diamonds / Titanium
7) Potash (New Venture)
All they would have to do is to throw in Fresh Water, and they have most of the world's needs covered. However, I started wondering if they had holdings and weightings in each in resources that will truly benefit from when the economy recovers. I've given a quick over view of each resource, and where it may go in the short term (less than 2 years) and in the longer term (2+ years).
I'm not an Engineer or Chemist, nor do I cover these materials as well as some. I don't tend to factor in things that you can't prove/predict when I write, such as hoarding of materials by some countries or how speculators may drive up and down prices for reasons not related to their fundamentals....there are people who are a lot smarter than I, when it comes to each of these metals.
Base Metals (32% of 2008 Profit)
- Most Base metals have a high correlation to Industrial Production. Copper is heavily used in Piping/wiring for Houses, Industrial Circuits/machinery and Plumbing for Indsutrial uses. Zinc is used heavily in Steel/Brass production, as well as in batteries. Lead has tons of uses, ranging from use in boats, to batteries to Electrical solder.,,,,you get the drift.
- Most of these metals are extremely sensitive to economic conditions and were very punished during the Economic downturn. However, most of them have a direct correlation to the expansion in the BRIC / Emerging markets arena, and should fare well in the longer term. In the very short term, I would expect a sharp pull-back on some of them, as the run since the beginning of 2009 has been almost too good.
Coal (8% of 2008 Profits)
- BHP put an announcement out on June 10th this year, announcing that prices for Met Coal could fall by close to 60% by the end of the year. This is mostly due to the strong drop in demand for Steel.
- Thermal Coal prices are up from their February Low, but are well down from their high in August 2008 (well over 50% down). They should have some strong legs in 2010, namely due to China's increasing development of Coal-fired plants
- Overall, either Coal Product won't be a short-term catalyst for BHP, however, I would expect that they will be much more profitable starting in 12-18 months when demand picks up.
Manganese (6.5% of 2008 Profits) and Iron Ore (19% of 2008 Profit)
- Although Maganese has other uses (such as Electrical), these two metals are closely enough linked (at least from a Financial standpoint), that I have linked them together. Both of these metals are used to make materials (Iron/Steel) that are used in Heavy Machinery, Construction, Automobiles and other projects.
- These metals are both extremely economically sensitive. They both should see continued growth in both the short term and the long term (short term based mostly on the eventual implementation of much of the EU/US Stimulus projects, as well as the continued Infrastructure growth in the BRIC countries in the longer term).
Oil/Gas (23% of 2008 Profits)
- If you've read any of my past articles, you no doubt know that I am a long-term bull on both Oil and Natural Gas. This differs a lot from my short-term thoughts, however.
- Oil should remain strong for most of 2009, with some significant upticks in 2010, in line with the economic return of the US Consumer in mid to late 2010. Natural Gas, on the other hand, has a different problem, in that much of the current weakness was not all related to the Economic downturn, but rather a nice spike in the amount of available resources. This extra production will not be absorbed quickly, and even when demand returns with the Economic upswing, the price may not rise until late 2010 or even 2011. Longer term (past 2012), the sky looks bright for both Oil and Natural Gas, as we may start to see returns to 2007 prices and even beyond.
- Watch for my next article, which will be on the future of Natural Gas.
Aluminum (6% of 2008 Profits)
- Is there anything in this world that is not made from Aluminum, with a range of uses from Automobile to Construction materials to Baseball bats to Paint to Foil?
- Aluminum has seen a nice spike since the start of 2009, mostly due to an increased feeling that the economy has seen its worst (Note - I'm not going to take sides on whether China is hoarding).
- I suspect that this rally has been overdone in the short term, so expect a pull back, especially if Q3 earnings for Fortune 500 companies aren't as rosy as what people seem to think they will be. As well, it's hard to say whether Obama will continue the Cash for Clunkers plan, which undoubtedly help to increase Auto production (and the demand for Aluminum) beyond where it would have normally been at this stage of the economic downturn/recovery.
In short, I do like BHP (it is my largest holdings), although due to its volatility, it isn't the easiest stock to own. I think that its most recent run (it has almost doubled since its low in February) means that it will be running out of steam shortly, and may be due for a big pull back. I think you may be able to get it again in the low 50s (for the ADR in NY), and maybe even below $50.
At $50, it would be a great entry point, as it would be trading at about 10x expected 2009 Earnings, and would yield over 3%. With the expected growth in China, and an economic recovery in the rest of the world, this one may return back to its former highs of $90+ within 18 months, so you would be looking at close to a double, when you factor in the dividend.
Disclosure - I am long BHP as one of my largest holding's.
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The current 28 holdings place a heavy weighting on energy, materials, and financial names, most of which have small or middling market caps. The fund is expected to be in high demand as Vietnamese shares have been among the best performing in the world this year. The benchmark VN Index - which is broader than the one VNM tracks - is up 61% this year. Investors will pay a premium for access, however, as the fund carries a .99% expense ratio. By contrast, European investors pay only .85% for the db-x trackers FTSE Vietnam (XFVT).
payable date is August 31, 2009. The ex-date is August 20, 2009. The
distribution per share for each Fund is as follows:
Fund Per Share
Eaton Vance Enhanced Equity Income Fund (NYSE: EOI) $0.137
Eaton Vance Enhanced Equity Income Fund II (NYSE: EOS) $0.144
At this time the Funds believe that a portion of the August
distribution may be comprised of amounts from sources other than net
investment income. If that is the case, you will be notified in writing.
Further information will be available prior to the payment date at
individuals.eatonvance.com. The final determination of tax characteristics
of the Fund's distributions will occur after the end of the year, at which
time it will be reported to the shareholders.
The Funds are managed by Eaton Vance Management, a subsidiary of Eaton
Vance Corp. (NYSE: EV), based in Boston, one of the oldest investment
management firms in the United States, with a history dating back to 1924.
Eaton Vance and its affiliates managed $143.7 billion in assets as of July
31, 2009, offering individuals and institutions a broad array of investment
products and wealth management solutions. The Company's long record of
providing exemplary service and attractive returns through a variety of
market conditions has made Eaton Vance the investment manager of choice for
many of today's most discerning investors. For more information about Eaton
Vance, visit http://www.eatonvance.com.
Disclosure I am long EOS shares.