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Friday, June 19, 2009

Lets ride the rails With Norfolk Southern (NSC)

Sporting a current P/E of 9.01 and a decent 3.57% dividend. Payout ratio coming in at 29.39% meaning the dividend is pretty safe. My target is $48.57 currently trading at $38.34, making it a solid value play. I started buying/accumulating at $27.12 a share currently up 15% and will keep collecting shares, currently long, BNI, NSC, CSX, PRPX, and UNP in my railroad folio. Up 18.87% year to date in this folio.

Norfolk Southern Corp. is a Virginia based freight railroad company operating primarily in the eastern United States. NSC operates approximately 21,000 miles of railroad across 22 states comprising 2/3rds of the American population. NSC generated its 2008 operating revenues from the following traffic sources: Coal (28%), General Merchandise (52%), and Intermodal– (i.e. standardized containers that are handled and transferred between ships, trucks and rail) (19%).

NSC’s main competitor is CSX Corp but it also competes with other forms of freight shipping especially trucking.

Disclosure I am long all 5 Rail companies in my Railroad Folio. (Comtech Direct Inc.)

Gold, Oil and Monthly Fixed Income? They're All in This CEF (GGN)

My favorite play in the commodities world is no other than the.......That position is the closed-end Gabelli Global Gold, Natural Resources & Income Trust (GGN.)

I have been buying GGN each and every chance I get, at the appropriate entry points in the endless profit machine called the energy cycle, the ADRs of Petroleos Brasileiro SA (PBR), Imperial Oil (IMO -- really a better play on natural gas,) Devon Energy (DVN), and Murphy Oil (MUR) Those, coincidentally, are the largest energy holdings of GGN, along with lesser positions in other old favorites of ours like Chesapeake Energy (CHK), Conoco Phillips (COP), Marathon (MRO), Transocean (RIG) and a whole bunch more. As of the end of March, the fund's most recent quarterly holdings report, those energy and energy service firms comprised 24% of GGN’s portfolio.

Comprising 52% of the remainder are some of our favorites in the metals and mining business. GGN’s largest holdings include Agnico-Eagle (AEM), AngloGold Ashanti (AU), Barrick (ABX), Gold Fields (GFI), Goldcorp (GG), Harmony Gold (HMY), Kinross (KGC), Lihir (LGL), Newmont (NEM), and Yamana (AUY) – as well as lots of others familiar to regular readers.

Add about 10% in T-Bills, 10% in corporate bonds in mining and energy firms, and a smattering of convertibles, and that brings us to nearly 100% of their holdings. But none of that accounts for their outsize dividend payout of 11.92%. That monthly dividend comes from writing calls against many of their positions.

Now if you are an unabashed bull on gold and energy and believe both will move in concert to the upside with nary a pause for breath, you will not want to buy GGN. Many of their written calls will be exercised and the stocks called away before they could participate in such a stampede.

I am reminded of the story you may have heard of the old bull and the young bull walking in the south 40 and sighting a herd of cows grazing in the valley below. “Let’s run on down there and pick one out!” says the young bull. “Son,” says the old bull, “let’s walk on down there and pick them all.”

Fund Info:

The primary investment objective of the Fund is to provide a high level of current income and secondary objective is to seek capital appreciation consistent with the strategy of the fund and the primary objective of the fund. The Fund will attempt to achieve its objectives by investing at least 80% of its assets in equity securities of companies principally engaged in gold and natural resources industries. The Fund may invest at least 25% of its assets in the equity securities of companies principally engaged in the exploration, mining, fabrication, processing and distribution or trading of gold or the financing managing controlling or operating of companies engaged in gold-related activities.

Currently trading at a 8.37% Premium to the nav. With a 12.01% Monthly Dividend. Currently 0.14 cents per month paid since jan 1st of 2007. Expense ration a tad high at 1.69%, but hard to find a paying commodity fund to replace this one with this diversification.

Disclosure I am long GGN shares in my Commodities Folio.

3balls Golf Gifts

E-Trade prices 435 million share offering, shares fall

Shares of E-Trade Financial Corp. fell 18% in pre-market trade Friday as traders re-priced the online broker's stock after the company priced a public offering at a 23% discount to the previous session's close.

Before the opening bell Friday, E-Trade shares were trading for $1.17 a share, down from Thursday's close at $1.43.

The company said it priced a public offering under an existing shelf registration statement of 435 million shares of common stock at $1.10 a share, raising about $478.5 million in gross proceeds. Before the announcement E-Trade had about 572 million shares outstanding.

The company has also granted the underwriters an option to purchase up to an additional 65 million shares of common stock on the same terms and conditions to cover over-allotments, if any.

Disclosure I own some shares to sale at first bounce, a speculation play.

SwissOutpost and Swiss Knife Depot

Triangle Capital Corporation Declares Cash Dividend of $0.40 Per Share

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Triangle Capital Corporation (TCAP - Quote), a leading specialty finance company that provides customized financing solutions to lower middle market companies located throughout the United States, today announced that its board of directors has declared a cash dividend of $0.40 per share. This is the Company's tenth consecutive quarterly dividend since its initial public offering in February, 2007, and reflects a 14.3% increase over the same quarter in 2008.

payable on July 23 to shareholders of record on July 9.

The dividend yields 14.88%.

Disclosure I am long TCAP shares in my Financial Folio.

Thursday, June 18, 2009

Annaly Mortgage declares Q2 Dividend Boost 20% to .60 cents per share

The Board of Directors of Annaly Capital Management, Inc. (NYSE: NLY) declared the second quarter 2009 common stock cash dividend of $0.60 per common share. This dividend is payable July 29, 2009 to common shareholders of record on June 29, 2009. The ex-dividend date is June 25, 2009. The ex-dividend date is June 23.

The dividend yield moves from 13.34% to 16.01%.

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, or by contacting the Company.

Disclosure I am long NLY shares in my Reit Folio.

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Smucker Profit More Than Doubles, raises 2010 profit view

J.M. Smucker Co. (NYSE: SJM - Quote) announced adjusted fiscal fourth-quarter profit this morning that far exceeded analysts' expectations, prompting the peanut-butter and jelly maker to boost its 2010 profit view.

The news sent shares of the Zacks #2 Rank ('Buy') company higher by more than 8%. It is moving on higher-than-normal volume of 3.3 million shares. The daily average volume is around 880,419.

Earnings for the quarter, excluding items, stood at $1.02 per share, easily topping the consensus of 61 cents. EPS results marked an increase of 39.73% on a year-over-year basis.

Sales grew 81% to $1.07 billion. Revenue from Folgers, which it acquired last November, came in at $456.3 million.

The company earned $266 million or $3.12 per share for the full year. It saw a 49% rise in annual sales to $3.76 billion.

J.M. Smucker now sees adjusted earnings between $3.65 and $3.80 per share for fiscal 2010. It had previously guided in the range of $3.62 to $3.72 per share. It expects net sales to increase 20% to about $4.5 billion.

The consensus estimate for the fiscal year ending April 2010 climbed 2 cents to $3.39 per share in the last 7 days, reflecting an upward revision by 1 analyst out of 6.

Disclosure I am long SJM shares as well as PG shares.

Rock Bottom Golf

Medtronic raises dividend 9%, to buy back 60 Million more shares

Medical device maker Medtronic Inc. said Thursday its board of directors increased its dividend by 9 percent to an annual rate of 82 cents. The increase raises the quarterly amount to 20.5 cents.

The increase is effective for the 2010 fiscal year. The quarterly dividend is payable July 31 to shareholders of record as of July 10.

The board also approved the buyback of an additional 60 million shares of common stock under a current plan. The company has about 1.12 billion shares of common stock outstanding.

Shares of Medtronic rose 74 cents, or 2.3 percent, to $33.67 in afternoon trading.


Founded in 1949, Medtronic has grown to become the world's largest independent medical technology company. At the core of all we do is our Mission: to alleviate pain, restore health and extend life. It provides a clear path for all employees as we work together to take Medtronic to the next level.

Medtronic was first incorporated April 23, 1957 and became a public company as the result of a convertible debenture offering. The first shares were issued under these debentures on December 17, 1959 to our company founders, Earl Bakken and Palmer Hermundslie. Medtronic shares were traded Over-the-Counter (OTC) until we were listed on the NASDAQ in 1964. Medtronic began trading on the New York Stock Exchange on November 21, 1977 and continues to be traded on the NYSE today under the ticker symbol MDT.

Disclosure I am long MDT shares.

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Monday, June 15, 2009

Look for ETFs in retirement plans with BlackRock's deal with iShares

Laurence Fink has big plans for exchange-traded funds in the retirement market if he gets his hands on the largest ETF provider.

His firm, BlackRock Inc. (BLK-Quote) , has unveiled a widely expected deal to purchase Barclays Global Investors for $13.5 billion, one of the largest transactions ever in the asset-management business. See coverage of the deal.

Among other things, the Barclays (BCS-Quote) unit is the largest provider of ETFs, with 369 global iShares ETFs and assets of nearly $300 billion at the end of the first quarter.

"I believe with our strength in mutual funds and, importantly, the overwhelming position of iShares, that we can now bring a comprehensive solution to our retail clients, providing both solutions in the mutual-fund space and in the ETF space," Fink, the chief executive officer of BlackRock, said during a conference call Friday to discuss the proposed deal.

"We will continue to expand the iShares platform in different countries," he said.

Fink also said BlackRock could use its weight and influence to get ETFs into more retirement plans, which are dominated by mutual funds. One big hurdle for ETFs is that most 401(k) back offices aren't set up to handle ETFs, which are baskets of securities that trade like individual stocks.

"I think one of the real long-term trends is going to be lower-cost products," Fink said.

"I think the expenses associated with many retirement products overwhelm some of the relative returns," he said. "Some passive strategies will have a larger component to the future of our retirement strategies."

Most of the larger iShares ETFs are index-linked funds tied to recognizable stock and bond benchmarks.

Won't raise iShares ETF fees

Fink on Friday told Fox Business he has no plans to raise expense ratios at BGI's lineup of exchange-traded funds.

"I could say with total clarity they're not going higher," Fink said during an interview with Fox Business. "We're going to keep them where they are or bring them down."

The BlackRock CEO said he expects ETFs to continue their fast rate of growth and that the firm could introduce actively managed ETFs.

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