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UTL | Unitil Corporation | Utilities | Power Generation | https://www.nasdaq.com/articles/safest-high-yield-electric-utilities-2009-10-09 | 2009-10-09 11:48:00 | Markets|PNW|DTE|HE | If you think "widow and orphan" utility stocks are boring, then you've never heard of this one.It's an electric utility that has increased its dividend each year for the past 20 years. Not only does it offer its shareholders an above-average yield, it also has outperformed its peers in the toughest economic environment in decades. That's pretty far from "boring" these days. In fact, this may be the most exciting company serious income investors could add to their portfolios.The nation needs power in good times and bad, and that's one reason power companies tend to be reliable, resilient investments. They don't offer much growth, but they compensate for that with strong dividend yields. And there are capital gains to be had: Utilities' prices tend to trend upward over the long term.That's a combination income investors like. And with those factors in mind, here's the one utility they should like the most right now, the one that outperforms its competitors.How did I find this winner? By examining the nation's utilities and crossing off any company that didn't meet my standards.I started with the critical premise that all income investors begin with: Show me the money. Below is a list of electric utilities that yield above 6%. It's best to take dividends one step further. Don't stop with the yield -- take a look at how easy it is for the company to meet its dividend payment. In the chart below, the third column shows each utilities payout ratio. This is calculated using the companies' operating income and dividend payment from the most-recent quarter. If you like, you can put the payout ratio in the blank in this sentence: "This company paid out ____ of its operating earnings in dividends."Company (Ticker) YieldPayout RatioPepco Holdings ([POM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=POM&selected=POM)) )7.5%47.2%Empire District Elec. ([EDE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EDE&selected=EDE)) )7.1%54.5%Hawaiian Elec. ([HE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HE&selected=HE)) )6.8%83.6%UIL Hldgs. Corp. ([UIL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UIL&selected=UIL)) )6.6%35.3%Pinnacle West ([PNW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNW&selected=PNW)) )6.5%32.4%Progress Energy ([PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN)) )6.5%45.9%Unitil Corp. ([UTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UTL&selected=UTL)) )6.2%66.6%Westar Energy ([WR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WR&selected=WR)) )6.2%34.5%DTE Energy ([DTE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DTE&selected=DTE)) )6.2%40.6%It doesn't look like any of these utilities is up against the wall and in the untenable position of being forced to cut its dividend. (Hawaiian Electric may be a little too close for comfort for some conservative investors.) Also keep in mind that companies with low payout ratios have more breathing room and may be able to increase their dividends in the future.Dividend safety is only part of the story, though. Defensive stocks should move up with the market and also demonstrate resilience during downturns. The past year has been a stress test for all stocks. Let's see which utilities passed.Track RecordThe total return of the S&P during the past three years is -15.4%. We need companies that not only beat the S&P but also posted positive total returns. After all, what good is a 6% dividend yield if the underlying security that produced it loses half its value? When I applied those criteria to our list, two utilities remained in our competition.Company (Ticker)3-Year Return5-Year ReturnProgress Energy ([PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN)) )+2.2%+22.2%Unitil Corp. ([UTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UTL&selected=UTL)) )+9.1%+8.9%Progress Energy and Unitil are the only two high-yielding utilities that managed a gain during the past three years, an impressive feat considering the 2008 bear market.Two things give Progress the upper hand.First, it has a better dividend coverage ratio, meaning it's less likely to cut its dividend and has more room to raise it. In fact, it's the only company out of the original eight that could cover its dividend with its net income.Given this, it might not surprise you to learn that Progress has an impressive 20-year streak of annual dividend increases. Second, Progress Energy's five-year total return beats out Unitil by an impressive 14 percentage points. Tack on the higher yield, and investors can buy a stock that give them a bigger paycheck and one likely to continue to outperform its peers.Recent news points to a bright future. Progress will be allowed to charge higher rates in Florida in January. This will be a significant revenue booster, as more than half its 3.1 million customers are in Florida.Progress has outperformed its peers in tough economic times and has a track record of increasing dividends. Investors looking for a safe, reliable 6.5% yield could consider adding Progress to their portfolios. [Image](http://web.streetauthority.com/FB-sig.gif) Francisco E. BermeaStaff WriterStreetAuthority © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | The Safest High-Yield Electric Utilities | News | Street Authority | Unknown | 0.0004 | 21.8998 | 22.2574 | 22.6535 | 22.846 | 22.8816 | 22.8816 | 22.885 | 22.9251 | 22.8694 | 22.8612 | 22.8612 | 22.8612 | 22.8677 | 22.9235 | 22.8674 | 23.0707 | 22.5042 | 19.9395 |
HE | Hawaiian Electric Industries, Inc. | Utilities | Electric Utilities: Central | https://www.nasdaq.com/articles/safest-high-yield-electric-utilities-2009-10-09 | 2009-10-09 11:48:00 | UTL|Markets|PNW|DTE | If you think "widow and orphan" utility stocks are boring, then you've never heard of this one.It's an electric utility that has increased its dividend each year for the past 20 years. Not only does it offer its shareholders an above-average yield, it also has outperformed its peers in the toughest economic environment in decades. That's pretty far from "boring" these days. In fact, this may be the most exciting company serious income investors could add to their portfolios.The nation needs power in good times and bad, and that's one reason power companies tend to be reliable, resilient investments. They don't offer much growth, but they compensate for that with strong dividend yields. And there are capital gains to be had: Utilities' prices tend to trend upward over the long term.That's a combination income investors like. And with those factors in mind, here's the one utility they should like the most right now, the one that outperforms its competitors.How did I find this winner? By examining the nation's utilities and crossing off any company that didn't meet my standards.I started with the critical premise that all income investors begin with: Show me the money. Below is a list of electric utilities that yield above 6%. It's best to take dividends one step further. Don't stop with the yield -- take a look at how easy it is for the company to meet its dividend payment. In the chart below, the third column shows each utilities payout ratio. This is calculated using the companies' operating income and dividend payment from the most-recent quarter. If you like, you can put the payout ratio in the blank in this sentence: "This company paid out ____ of its operating earnings in dividends."Company (Ticker) YieldPayout RatioPepco Holdings ([POM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=POM&selected=POM)) )7.5%47.2%Empire District Elec. ([EDE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EDE&selected=EDE)) )7.1%54.5%Hawaiian Elec. ([HE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HE&selected=HE)) )6.8%83.6%UIL Hldgs. Corp. ([UIL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UIL&selected=UIL)) )6.6%35.3%Pinnacle West ([PNW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNW&selected=PNW)) )6.5%32.4%Progress Energy ([PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN)) )6.5%45.9%Unitil Corp. ([UTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UTL&selected=UTL)) )6.2%66.6%Westar Energy ([WR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WR&selected=WR)) )6.2%34.5%DTE Energy ([DTE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DTE&selected=DTE)) )6.2%40.6%It doesn't look like any of these utilities is up against the wall and in the untenable position of being forced to cut its dividend. (Hawaiian Electric may be a little too close for comfort for some conservative investors.) Also keep in mind that companies with low payout ratios have more breathing room and may be able to increase their dividends in the future.Dividend safety is only part of the story, though. Defensive stocks should move up with the market and also demonstrate resilience during downturns. The past year has been a stress test for all stocks. Let's see which utilities passed.Track RecordThe total return of the S&P during the past three years is -15.4%. We need companies that not only beat the S&P but also posted positive total returns. After all, what good is a 6% dividend yield if the underlying security that produced it loses half its value? When I applied those criteria to our list, two utilities remained in our competition.Company (Ticker)3-Year Return5-Year ReturnProgress Energy ([PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN)) )+2.2%+22.2%Unitil Corp. ([UTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UTL&selected=UTL)) )+9.1%+8.9%Progress Energy and Unitil are the only two high-yielding utilities that managed a gain during the past three years, an impressive feat considering the 2008 bear market.Two things give Progress the upper hand.First, it has a better dividend coverage ratio, meaning it's less likely to cut its dividend and has more room to raise it. In fact, it's the only company out of the original eight that could cover its dividend with its net income.Given this, it might not surprise you to learn that Progress has an impressive 20-year streak of annual dividend increases. Second, Progress Energy's five-year total return beats out Unitil by an impressive 14 percentage points. Tack on the higher yield, and investors can buy a stock that give them a bigger paycheck and one likely to continue to outperform its peers.Recent news points to a bright future. Progress will be allowed to charge higher rates in Florida in January. This will be a significant revenue booster, as more than half its 3.1 million customers are in Florida.Progress has outperformed its peers in tough economic times and has a track record of increasing dividends. Investors looking for a safe, reliable 6.5% yield could consider adding Progress to their portfolios. [Image](http://web.streetauthority.com/FB-sig.gif) Francisco E. BermeaStaff WriterStreetAuthority © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | The Safest High-Yield Electric Utilities | News | Street Authority | Unknown | 0.0004 | 18.2595 | 18.5738 | 18.639 | 18.779 | 18.7514 | 18.7282 | 18.7365 | 18.8138 | 18.771 | 19.0138 | 19.0138 | 19.0138 | 19.0152 | 18.8444 | 18.96 | 18.8013 | 23.798 | 19.1804 |
MG | Mistras Group, Inc. | Consumer Discretionary | Military/Government/Technical | https://www.nasdaq.com/articles/mistras-group-has-another-go-ipo-2009-10-09 | 2009-10-09 11:49:00 | ERJ|Markets|BP|BAC|XOM|GE|PFE|VLO|JPM|CVX|AEP | [Abbi Adest](http://seekingalpha.com/by/author/abbi-adest/) Mistras Group ([MG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MG&selected=MG)) ), a company which provides non-disruptive infrastructure testing to the energy market, is expected to price its IPO this week. This is the company's second try at an IPO. The previous attempt was sunk by the downturn in the markets two years ago.Business Overview (from [prospectus](http://www.sec.gov/Archives/edgar/data/1436126/000095012309045063/y02145a5sv1za.htm) ) We are a leading global provider of technology-enabled asset protection solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. We combine industry-leading products and technologies, expertise in mechanical integrity (([MI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MI&selected=MI)) )) and non-destructive testing (([NDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDT&selected=NDT)) )) services and proprietary data analysis software to deliver a comprehensive portfolio of customized solutions, ranging from routine inspections to complex, plant-wide asset integrity assessments and management. These mission critical solutions enhance our customers' ability to extend the useful life of their assets, increase productivity, minimize repair costs, comply with governmental safety and environmental regulations, manage risk and avoid catastrophic disasters. Given the role our services play in ensuring the safe and efficient operation of infrastructure, we have historically provided a majority of our services to our customers on a regular, recurring basis. We serve a global customer base of companies with asset-intensive infrastructure, including companies in the oil and gas, fossil and nuclear power, public infrastructure, chemicals, aerospace and defense, transportation, primary metals and metalworking, pharmaceuticals and food processing industries. As of August 1, 2009, we had approximately 2,000 employees, including 29 Ph.D.'s and more than 100 other degreed engineers and highly-skilled, certified technicians, in 68 offices across 15 countries. We have established long-term relationships as a critical solutions provider to many leading companies, including American Electric Power ([AEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AEP&selected=AEP)) ), Bayer, Bechtel, BP ([BP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BP&selected=BP)) ), Chevron ([CVX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CVX&selected=CVX)) ), Dow Chemical ([DOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOW&selected=DOW)) ), Duke Energy ([DUKE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DUKE&selected=DUKE)) ), DuPont ([DD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DD&selected=DD)) ), Embraer ([ERJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ERJ&selected=ERJ)) ), ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ), First Energy, General Electric ([GE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GE&selected=GE)) ), Pfizer ([PFE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PFE&selected=PFE)) ), Rio Tinto ([RTP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RTP&selected=RTP)) ), Alcan, Rolls Royce (RYCEY.OB), Shell (RDS.A), The Boeing Company and Valero ([VLO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VLO&selected=VLO)) ), and to various federal, state and local governmental infrastructure and defense authorities, including the departments of transportation of several states. Offering: 8.7 million shares at $14 - $16 per share. Net proceeds of approximately $89.8 million will be used general corporate purposes, including working capital and possible acquisitions.[JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM) [ CS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CS&selected=CS) [ BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC) Financial Highlights:Revenues increased $56.9 million, or 37.3% [ from $152,268,000 to $209,133,000], for fiscal 2009 compared to fiscal 2008 as a result of growth in all our segments...Our gross profit increased $14.4 million, or 26.3% [from $54,831,000 to $69,266,000] , in fiscal 2009 compared to fiscal 2008...Our income from operations of $14.8 million for fiscal 2009 decreased $1.5 million, or 9.4% [from $16,358,000 to $14,825,000], compared to fiscal 2008...Our net income for fiscal 2009 of $5.5 million, or 2.6% of our revenues, was $2.0 million lower than our net income for fiscal 2008, which was $7.4 million, or 4.9% of revenues.Competitors:We operate in a highly competitive, but fragmented, market. Our primary competitors are divisions of large companies, and many of our other competitors are small companies, limited to a specific product or technology and focused on a niche market or geographic region. We believe that none of our competitors currently provides the full range of asset protection and NDT products, enterprise software and the traditional and advanced services solutions that we offer. Our major competitors with respect to NDT services include the Acuren division of Rockwood Service Corporation, SGS Group, the TCM division of Team, Inc. and APPLUS RTD, which is majority-owned by The Carlyle Group. Our major competitor with respect to our PCMS software is UltraPIPE, a division of Siemens, and to a lesser extent, Lloyd's Register Capstone, Inc. Our major competitors with respect to our ultrasonic products are GE Inspection Technologies and Olympus NDT. In the traditional NDT market, we believe the principal competitive factorsAdditional Resources: - [Company website](http://www.mistrasgroup.com/) - AP: ' [Mistras Group IPO set for Thursday](http://news.google.co.il/news/url?sa=t&ct2=en_il%2F0_0_s_0_0_t&usg=AFQjCNH9U4sSvmRfIExNyskEqosSYESLSA&sig2=geCahX_6kZ5GB-r-d6_LHw&cid=1446661807&ei=oDTMSqieN5HcjQeS3-lr&rt=STORY&vm=STANDARD&url=http%3A%2F%2Fwww.google.com%2Fhostednews%2Fap%2Farticle%2FALeqM5h4UGksWXV1IsLMdW_QtVmWRUgojwD9B5P7NO1) ' - BloggingStocks: ' [Mistras Group wants some IPO cash'](http://www.google.co.il/url?sa=t&source=web&ct=res&cd=4&url=http%3A%2F%2Fwww.bloggingstocks.com%2F2008%2F06%2F12%2Fmistras-group-wants-some-ipo-cash%2F&ei=jDTMStCSBsKz4QariZX4BQ&usg=AFQjCNHvcfsrK52XaXpySRdcNWVJgqIxFA&sig2=iIXkc5nOMeV9-XKlzOumUw) See also [Technicals: Crude Looks Like Its Trending Higher](http://seekingalpha.com/article/166637-technicals-crude-looks-like-its-trending-higher?source=nasdaq) on seekingalpha.com | Mistras Group Has Another Go at IPO | News | SeekingAlpha | Unknown | 0.0004 | 12.3471 | 12.3471 | 12.9014 | 12.6048 | 12.6212 | 12.6215 | 12.6 | 12.6315 | 12.7029 | 12.6735 | 12.6735 | 12.6735 | 12.685 | 12.7682 | 12.8303 | 12.9391 | 13.0015 | 12.2407 |
GNK | Genco Shipping & Trading Limited | Consumer Discretionary | Marine Transportation | https://www.nasdaq.com/articles/four-shippers-emerging-mire-2009-10-22 | 2009-10-22 02:42:00 | Markets|EGLE|NM|ESEA|DSX | ** [Andy Wang](http://www.philstockworld.com/wangsworld/) submits:** [Image](http://static.seekingalpha.com/uploads/2009/10/22/saupload_091019dsx_2d00_egle_2d00_tbsi_2d00_prgn2.png) By [Skymist](http://www.myhappytrading.com/members/Skymist/default.aspx) After a thrilling two-week rally in the stock market during early September, shippers began to fall. They had been enjoying a nice rally on the general premise of economic recovery, market stabilization, and rising materials prices. But suddenly on September 17th, the shipper sector broke, and leading names fell - plummeted, actually, at a much faster rate than the modest pullback in the general market would have implied. With shippers today generally on the rise again, it is worthwhile to look at the reasons for the **mid September breakdown.** What was the number one reason? I would have to say it was the Baltic Index, which quantifies the prices shippers get for new contracts. It had stabilized at near 2400 in early September, and then began a robust rise, only to suddenly stop short. It began falling, slowly at first, then accelerating. By the 17th it was clear that the BDI was tanking, and the shippers as a group followed. The timing of the movements of BDI seemed to be the key. A market advance which coincides with a BDI advance is a powerful motivator for the depressed shipping stocks. The "robust rise" of early September triggered the sector advance. Few sectors snowball as readily as the shippers. Within days, shippers were moving to recent highs, but the BDI reversal stopped the process entirely. **Of course, the negative press didn't help either.** The blogs were heavily negative on the shippers, pointing to the newly delivered ships and declaring that we need fewer ships, not more, in current economic conditions. Finally, Navios ([NM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NM&selected=NM)) ) picked that moment to float a new stock offering, diluting their stockholders. The market knows that new offerings are one of the traditional signs of an overbought stock - in a sense, it is the ultimate in "insider selling". **How does today's rising shipper sector compare to September 17th?** Well, the BDI is finally responding positively this time, passing 2800, rising 5 days in a row, and rising even faster than in early September. The chart also shows an even more key fact - the BDI is not only rising but is above its 200-day moving average; in mid-September at the time of the shipper retreat the BDI was well below its 200-day ma. No doubt, there is a lot of money on the sidelines which won't come back into the market until we have a rising BDI above its 200dma. That alone can explain a lot of the listless behavior of the shipper stocks in the past few months, but clearly the situation is different today. Sentiment is higher, with positive blog stories and upgrades. The sector is riding a more optimistic wave, and any key event could set off an upside stampede - a large earnings beat, a raised or reinstated dividend, or an acquisition. **The four stocks I am highlighting here are the key names I am watching.** Today, Diana Shipping ([DSX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DSX&selected=DSX)) ) became the first of the shippers to pull strongly above its Sept. 17 high. It was followed within minutes by Eagle Bulk Shipping ([EGLE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGLE&selected=EGLE)) ). I note with some satisfaction that DryShips ([DRYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DRYS&selected=DRYS)) ) is not a leader here - "satisfaction" because market karma dictates that those names issuing the most new stock should not be the first to benefit from a sector recovery, and indeed, that may be the case, DRYS being held back along with FreeSeas ([FREE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FREE&selected=FREE)) ), Navios Maritime Holdings ([NM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NM&selected=NM)) ), and others who resorted to dilution as a remedy. **TBS International ([TBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TBSI&selected=TBSI)) ) has an interesting chart.** See how the "stick" part of the candlesticks are long at the tops during the mid-Sept peak? This can be visualized as a price region in which there was heavy selling or shorting, each day forcing the price down after initial gains. The zone from 9.50 to about 9.85 represents a region which, once traversed, can lead to increased short-covering. TBSI has a short ratio of over 3.5, and the fuel which is the short positions could potentially power the stock higher very quickly - perhaps another dollar in just a couple of days. Given continued BDI strength, I feel we could see TBSI at $11 by early next week. The options are cheap, too. **Paragon Shipping ([PRGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PRGN&selected=PRGN)) ) is one of the best "sleeper" plays in the shipper segment.** As the leaders pull higher, we can expect to see this tiny but well run company move up in price quickly and quietly. Yes, they are still paying a dividend. **If you want to participate in the shipper rally, take your eyes off DRYS, and start watching the new leaders.** Good luck!Disclosure: I am long TBSI, GNK, EGLE, PRGN, and ESEA.See also [Wabtec Corporation Q3 2009 Earnings Call Transcript](http://seekingalpha.com/article/170016-wabtec-corporation-q3-2009-earnings-call-transcript?source=nasdaq) on seekingalpha.com | Four Shippers Emerging from the Mire | News | SeekingAlpha | Unknown | 0.0002 | 20.8032 | 21.8605 | 22.6642 | 22.7856 | 22.7856 | 22.7856 | 22.7856 | 22.7856 | 22.7856 | 22.8215 | 22.6351 | 23.4916 | 23.8206 | 22.5641 | 22.5332 | 22.5305 | 19.8162 | 25.3433 |
BB | BlackBerry Limited | Technology | Computer Software: Prepackaged Software | https://www.nasdaq.com/articles/review-spains-fixed-line-and-broadband-market-2009-10-25 | 2009-10-25 12:39:00 | VOD|Markets|TEF | It's impressive to see how the Spanish industry has changed in such a short period and, as written before about [the net adds battle](http://consultantvalueadded.com/2009/10/09/is-it-possible-to-win-the-broadband-battle-in-spain/) , it's amazing to see the huge difficulties that all the operators have to beat the incumbent, Telefónica ([TEF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEF&selected=TEF)) ), and increase their revenues' share of the market. It's a market where fixed lines represent the majority of the value although the source of revenue growth lies in broadband. Some interesting figures: - Fixed market revenues account for ~3€ Billion, of which Fixed line revenues comprise 55%. Yet the fixed line contribution is declining by -6.7% GAGR from 2007-2009. - Broadband fuels fixed revenue growth by stimulating line numbers and revenues by over 10% CAGR in the last 3 years. - Future broadband growth potential remains positive with the possibility of providing BB service to the 3.9 Million PC-equipped Spanish households with only dial-up or no internet access. - Decreases in Telefónica's wholesale prices resulting from regulation, has allowed for the faster proliferation of higher speed connections by making them more affordable to end customer. Wholesale price reductions have reached up to 74% in some cases, yet have not fully been translated into customer savings. The price decreases have thus allowed operators to capitalize on revenue generation through cheaper offers and better margins from lower costs. We will soon deliver our yearly broker report on the telecommunications situation in Spain, but I wanted to publish an executive summary of it and highlight some interesting facts and insights with our blog readers so that you can clearly understand the fixed and broadband market situation: **Fact 1. The Spanish fixed market is in decline. While broadband is the only growth source it still falls behind Fixed-lines as the main contributor of revenues. ** - The economic downturn appears to have impacted the fixed line market. Previously growing at 10% from '07-08 then slowing abruptly to 0.2% from `08-´09. - Broadband continues to grow and while the ceiling has not yet been hit, there are initial signs of slowdown. - The Pay TV market has been stagnant for the last 2 years and has suffered a significant revenue erosion of ~30 million € since 2008. **Fact 2. Over the last three years, market players have undergone consolidation in an effort to challenge Telefónica's dominance. Unfortunately for the challengers, Telefónica is far from being even worried. ** - Since 2007, Ono acquired Auna, Orange bought Ya.com and Vodafone ([VOD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VOD&selected=VOD)) ) took over Tele2. - Ono and Jazztel may represent residual opportunities for further buy-outs although current valuations are too high for any player to consider a potential merge or acquisition. **Fact 3. The Spanish market is characterized by an increasing appetite for bundled offers and higher speed Broadband ([BB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BB&selected=BB)) ) connections. ** - Currently 68% of the BB market includes bundling. While players such as Orange already offer Pay TV in their bundles, others like Vodafone may find it increasingly difficult to compete without a pay TV platform. - The majority of BB connections lie in the 3Mb to 10Mb interval, with the highest concentration of offers at 6Mb. Telefónica consistently has a premium over other competitors offers, Orange has some of the cheapest offers. - The Spanish Telecom Regulator is supporting connection speed increases through wholesale price reductions. Additionally, it is encouraging further price reductions in the market by allowing Telefónica to offer naked DSL. **Fact 4. Despite aggressive pricing efforts by competitors Telefónica still enjoys a comfortable leadership position in the fixed-line market** - Orange still holds only a minute market share (1.8%) of active fixed lines. Over the last two years, Orange has succeeded in growing its share of lines but at the expense of loosing revenue share. - Telefónica has lost more ground in the highly competitive residential than in the business one. Orange has a better position in the residential segment where a strong price war is taking place. **Fact 5. Telefónica has managed to hold on to its broadband market share. Vodafone and Jazztel are capturing market share from Orange and Ono** - Orange´s position may be the weakest of the market, having lost broadband customers (~97,000 in 2008) despite the fact the market is growing. - Vodafone and Jazztel have been the recent winners in the last years, with increases of a 159% and a 78% (respectively) of net adds as % of their customer base in 2007. **Fact 6. The Pay TV market is stagnate, but Orange has managed to grow its customer base to 2.5% representing a ~155% CAGR from ´07-´09** - Due to the current unavailability of Pay TDT services (e.g., Gol TV - dedicated football channel), this year may present an opportunity for capturing new Pay TV customers before the Pay TDT threat appears. - Telefonic'a imagenio will end with near 680K subscribers, a number that has been nearly flat in the last 2 years. However, Telefónica reported in its latest investors meeting in October a growth up to 1.2M clients in 2012. **Fact 7. Telefónica's dominant position has a lot to do with customer satisfaction. Telefónica has the lowest complaint ratios in the fixed market and has managed to remain the leader despite having the most expensive offers. This is suggests that the quality of its service provisioning is positively valued by customers** - In 2008, Orange and Ya.com had the highest complaint ratios on broadband service provisioning. Their performance has since worsened during 2009. - Additionally, Orange and Ya.com have the poorest performance rating among competitors for customers service satisfaction. - Vodafone, Jazztel, Ono and rest of regional cable operators have similar customer satisfaction rates, being the first two, the highest rated in terms of incidence calls per 10K customers. You can find a detailed market assessment [here](http://consultantvalueadded.com/2009/10/25/fixed-line-bb-market-review-spain-2009) .See also [Doesn't the House Health Bill Fail the President's $900 Billion Test?](http://seekingalpha.com/article/170450-doesnt-the-house-health-bill-fail-the-presidents-900-billion-test?source=nasdaq) on seekingalpha.com | Review of Spain's Fixed Line and Broadband Market | News | SeekingAlpha | Unknown | 0.0004 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
GCI | Gannett Co., Inc. | Consumer Discretionary | Newspapers/Magazines | https://www.nasdaq.com/articles/why-newspapers-arent-getting-their-share-increased-online-ad-spending-2009-10-27 | 2009-10-27 10:39:00 | NYT|Markets | Newspaper online advertising has not benefited greatly from the recent upswing in online ad spending, [according to the New York Times](http://www.nytimes.com/2009/10/26/business/media/26adco.html?_r=1&ref=business) and most of the recent newspaper company quarterly results. This is no surprise because most newspaper websites [sell space](http://publishing2.com/2007/07/26/online-publishers-need-to-stop-selling-space/) for commodity advertising - display ads and classifieds - and thus are hard pressed to compete with ad networks that specialize in selling commodity ad space by the megaton (or giving it away for free, in the case of Craigslist).Back when newspapers were the only game in town for ad space, they could charge whatever they wanted. Now the web has near infinite ad space, and newspapers find themselves playing the wrong game. They've got ad sales staff that specialize in commodity order fulfillment and not premium advertising solutions. So what distinguishes a premium ad solution from commodity ad space? It's a premium solution if not every site can deliver the value. Any site can slap a display ad on a page - that's what makes it a commodity. High-end brand publishers like newspapers really have only one way to distinguish themselves from every other web publisher on the planet - their ability to create high quality content that attracts a targeted, high quality audience.But… there are many sites that specialize in creating "good enough" content that can attract segments of that high quality audience, and then selling that audience at a much lower cost.But wait, you say, high-end brand publishers should be able to sell the ad next to their higher quality content at a higher price. Isn't that the whole principle behind premium publishing?Not when it comes to display advertising. Display advertising isn't more valuable when placed next to premium content because display advertising has so little value to begin with. In fact, display advertising creates so little consumer value that it actually subtracts value from high quality editorial content when placed next it. Ever see those belly fat ads on top tier news sites? Dancing Martians lowering your mortgage payments? Whiten your teeth? It's a total train wreck.In fact, many ad exchanges are focused on bundling and selling audiences in a way that exploits this commodization of display ads and effectively cuts out the value of the publisher. So what's a high-end brand publisher to do?The answer is to offer advertising solutions that give advertisers the opportunity to create real consumer value; the kind of value that complements and even enhances the value of high quality editorial content; the kind of value that high-end brand publishers specialize in creating.Many advertisers have sought this kind of premium value from high-end brand publishers, and most publishers have responded with customized solutions like the classic "microsite" or one-off customized ads. But that too can be a losing proposition. Case in point from Mercedes:The problem with these solutions is they don't scale - they are expensive for publishers to deliver, and they are expensive for advertisers to buy. The result is most advertisers are lured back by the siren song of commodity ad network cost efficiency. So while high-end brand publishers do well for big splashy launches, they can't compete when advertisers go into the post-launch mode of consistent, continuous, high ROI value creation.What high-end publishers need is a way for advertisers to create premium value for consumers that scales and can deliver a consistent, continuous ROI that justifies a premium over commodity ad networks. What would advertisers be willing to pay a consistent premium for? The holy grail of every advertiser - to become media, i.e. to create high quality content that attracts and retains an audience of current and prospective customers. Advertisers would also pay a premium to align the value that they create for the consumer with the value that high-end brand publishers create for consumers - just like on a search results page, where the ads are as valuable as the "editorial" content.But if every high-end brand publisher tries to deliver such a solution by themselves, it won't scale for advertisers. The key is to scale across many high-end brand sites while still delivering the kind of premium value that commands premium pricing.That's the next generation of premium online advertising. More in my next post.See also [Earnings Season: The Car Is Shiny, But Look Under the Hood](http://seekingalpha.com/article/170851-earnings-season-the-car-is-shiny-but-look-under-the-hood?source=nasdaq) on seekingalpha.com | Why Newspapers Aren't Getting Their Share of Increased Online Ad Spending | News | SeekingAlpha | Unknown | 0.0005 | 13.6882 | 13.3112 | 13.0925 | 12.0891 | 11.9854 | 12.01 | 11.9718 | 11.948 | 11.7448 | 11.7533 | 11.7533 | 11.7533 | 10.7977 | 10.8814 | 10.3186 | 9.93064 | 11.3105 | 10.6291 |
CXW | CoreCivic, Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/four-long-ideas-two-short-ideas-latest-value-investing-congress-2009-10-29 | 2009-10-29 06:50:00 | ITB|Markets|O|IRDM|LH | ** [Kevin Berk](http://berk.typepad.com/bshaw/) submits:**Last week I attended the [Value Investing Congress](http://www.valueinvestingcongress.com/) in New York.The speakers were top notch and the presentations were very engaging.I enjoyed hearing the speakers discuss their investment processes.Lloyd Khaner's talk on turnarounds was very well done.Also, various presentations on the continued weak state of the housing market were very informative.Overall, the tone was pretty bearish on the economy and the markets.Many of the presenters professed concern about overvaluation but projected a sense of "the show must go on… so here are my stock picks." I agree that the markets feel stretched based on the woeful state of the consumer but some of the picks are worth watching.Some longs do go up when markets go down.Even better is to pick up great stocks on sale if the market does turn down again.My favorites of the conference were:**Small Cap Long Ideas** - Risky companies** Iridium Communications Inc. ([IRDM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRDM&selected=IRDM)) )** - Whitney Tilson and Glenn Tongue presented an interesting pitch for Iridium (yes, the formerly bankrupt satellite phone company that used to be a punchline!).According to Whitney and Glenn, Iridium has an unrivaled set of assets (satellites and services).Iridium reaches 90+% of the globe which has no cell towers (e.g. ocean, dessert, mountains).The company was purchased by a SPAC a year ago on favorable terms.Non-voice data services are growing dramatically and the voice business is growing nicely.The bear case on IRDM is that they plan to launch a new constellation of satellites starting in 2014.Whitney and Glenn believe that IRDM might be about to launch it without borrowing funds. **Core-Mark ([CORE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CORE&selected=CORE)) )** - Kian Ghazi provided a detailed bull case for Core Mark, a convenience store distribution player.CORE is the number two operator behind Mclane (a Berkshire company).Kian claims that while distribution may not be a sexy business, it can be a defensible one if the following conditions are met:high route density for drop-offs, highly fragmented, high switching costs and small drops with lots of stops.In his opinion, CORE benefits from all of these.His bullish case for them rests on an emerging part of their business:fresh food (prepared fruit cups, sandwiches, etc).This high margin, high growth business should more than offset the secular decline in low margin cigarette business which is a big part of CORE existing revenue. **Mid / Large Caps Long Ideas** - Safer, less risk of massive downside** Corrections Corp. of America ([CXW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CXW&selected=CXW)) )** - Bill Ackman sparked a rally in Corrections Corp. when he revealed he owned a 9+% stake (which hadn't been publicly disclosed yet).His pitch was funny and well thought out:CXW is largely an inexpensive, safe real estate play with extremely creditworthy tenants, secular growth and room for market share gains.He claimed that private prisons operate more effectively than public ones on many levels and that the trend will be towards privatization (especially for new prisons).The stock probably won't double but he thinks it has upside to $40-50+. **Laboratory Corp. of America Holdings ([LH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LH&selected=LH)) )** - Zeke Ashton laid out the case for Labcorp, the number two provider of laboratory testing behind Quest Diagnostics.The growth rate of the company is high, the industry pretty defensible.The only issue is a biggie though - healthcare reform.The lab testing business has been bandied about as a rich target for cost cutting, but Zeke thinks that the concerns here are overblown.There may even be a scenario in which LH and Quest benefit from expanded coverage and testing. **Shorts** - Proceed with caution** iShares Dow Jones U.S. Home Construction ([ITB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITB&selected=ITB)) )** - Whitney Tilson presented the housing stock ETF as a short based on an updated version of his voluminous housing "head fake" presentation.It lays out a compelling story that housing has not yet bottomed because of shadow inventory (7 million homes in various stages of delinquency and foreclosure), option-ARM exposure peaking in 2011, a stretched consumer, removal of stimulus and the eventual rise in interest rates.His take was that there are more than enough homes for those that can afford to buy them and that the housing companies should basically build nothing for years. **Realty Income Corp. ([O](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=O&selected=O)) )** - Bill Ackman spoke briefly about shorting Realty Income - the "monthly dividend company". This is a company he has previously criticized for having risky tenants who have done sale-leaseback transactions with Realty Income.He expects that the company will have a radical valuation readjustment once the market realizes that the dividend is not safe.The company does a lot of shareholder marketing focusing on the dividend and if (when, according to Ackman) O sustains credit losses in its weak portfolio they will need to cut the dividend.Overall, the conference was very interesting.The slides from all the presentations were available after the conference as well. **Disclosure:**I do not have positions in any of the stocks mentioned in this article. See also [Best and Worst Performing S&P 500 Stocks Since Obama's Election Win](http://seekingalpha.com/article/171542-best-and-worst-performing-s-p-500-stocks-since-obama-s-election-win?source=nasdaq) on seekingalpha.com | Four Long Ideas, Two Short Ideas from the Latest Value Investing Congress | News | SeekingAlpha | Unknown | 0.0002 | 25.1555 | 25.6679 | 25.2816 | 24.622 | 24.622 | 24.622 | 24.622 | 24.622 | 24.6496 | 24.7917 | 24.6314 | 24.7547 | 24.6531 | 23.9414 | 23.9605 | 23.9614 | 25.1621 | 25.0186 |
HIMX | Himax Technologies, Inc. | Technology | Semiconductors | https://www.nasdaq.com/articles/two-bargain-small-caps-yielding-double-digits-2009-10-30 | 2009-10-30 01:50:00 | Markets | Cheap stocks aren't as plentiful as they were seven months ago.In some ways, of course, that's a good thing. No one likes it when the market craters. But even though prices have risen from their lows, that doesn't mean investors can't find bargains out there -- they're just tougher to spot.Today, we'll take a look for such bargains: Undervalued companies with the potential for big gains -- and the added benefit of a rich dividend yield.The first yardstick is price-to-earnings growth ratio, which is sometimes shortened to "PEG." This measurement helps evaluate companies to determine which are cheap relative to earnings and expected growth.PEG is calculated by dividing the price-to-earnings ratio and dividing it by projected annual earnings growth (expressed as a whole number). If a company with a P/E of 20 is project to see earnings growth of 10%, the PEG is 2.0.Higher PEGs typically indicate a stock is overvalued; lower PEGs may mean the company is undervalued. I sought stocks with a PEG of less than 1.5. This resulted in 1,198 matches. To narrow the field, I screened out companies with high price-to-sales ratios. The P/S ratio is calculated by dividing the stock price it by trailing 12-month revenue per share. This metric helps investors understand the value of stock relative to revenue. Here again, lower values can indicate undervaluation.And while the picture this ratio paints can be incomplete, cheap revenue is better than pricey revenue. To find a discount, investors should pay less than $1 for every $1 in revenue. In this screen, I eliminated stocks with a P/S higher than 1.This left us with 535 candidates.The earnings multiple or P/E ratio, if you prefer, needs no lengthy explanation. It's simply the current share price divided by the company's trailing 12-month earnings per share. In a value-oriented screen, lower is better. I eliminated companies selling for more than 15 times earnings, which whittled the screen to 323 potential investments.Next I took a look the price-to-book ratio. Calculated as the share price divided by net assets, this ratio shows what a company is worth if broken up into its tangible parts. A P/B ratio of 1.0 means that the company's net assets are worth exactly what you're paying for them. (This values the actual business at zero.) Higher P/B values, that is, greater than 1.0, assign a dollar value to the company's underlying business. Most companies trade at a multiple to "book value." Anything less than 1.0 means you're buying the assets on sale and getting the business for free. For this screen, I used a P/B of 2.0 to weed out expensive companies. This left 228 matches.Price-to-free cash flow, sometimes painfully shortened to P/FCF, compares a company's market cap with the amount of free cash it generates. If a $100 million company has $5 million in free cash flow, for example, it would have a P/FCF of 20.With this metric, higher numbers indicate the company's free cash is relatively more expensive. In a value screen, of course, we're not looking for anything expensive. I used the value 10 to remove the pricier stocks from the list, which, after applying our criteria so far, still had 143 companies.Only two of those companies yield more than 6%.Even better, they actually pay much more. **Company (Ticker)****Yield****PEG Ratio****P/S****P/E****P/B****P/FCF****Market Cap** Penn Virginia Holdings([PVG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PVG&selected=PVG)) )11.4%1.10.76.62.07.8$507MHimax Technologies (Nasdaq: HIMX)10.3%0.80.813.11.35.1$534M [Image](http://web.streetauthority.com/AH-sig2.gif) Anthony HaddadStaff WriterStreetAuthorityDisclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | Two Bargain Small Caps Yielding Double Digits | News | Street Authority | Unknown | 0.0001 | 2.97803 | 2.89337 | 2.91607 | 2.76175 | 2.7608 | 2.76129 | 2.76145 | 2.76129 | 2.76068 | 2.76068 | 2.73788 | 2.70814 | 2.62176 | 2.58831 | 2.58785 | 2.53989 | 2.42225 | 2.59302 |
LGND | Ligand Pharmaceuticals Incorporated | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/week-biotech-more-treats-tricks-2009-11-01 | 2009-11-01 03:50:00 | SNY|Markets|GSK|PFE|MBRX | ** [The Burrill Report](http://www.burrillreport.com/) submits:**The last week of October was appropriately marked by treats and tricks. The stock market gyrated from investor ebullience over numbers showing a 3.5 percent growth of the U.S. GDP in the third quarter of 2009, to investor dismay over worries that a drop in consumer spending signals an unsustainable recovery. Meanwhile, life science companies were busy raising money and striking deals. Durham, North Carolina-based Aldagen ([ALDH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ALDH&selected=ALDH)) ) took its place in a growing queue of companies hoping to go public in the coming months as the IPO window begins to open. The company, which develops regenerative cell therapies, had initially filed to go public in May of 2008 but withdrew those plans last October when the stock market crashed.Now that the markets have strengthened, the company hopes to raise an estimated $80.5 million in an initial public offering to fund a phase 3 trial of its most advanced therapy for the treatment of critical limb ischemia, which can happen when a limb becomes damaged due to lack of blood flow. Aldagen also has a drug in a pivotal phase 3 trial for improving umbilical cord blood transplants used to treat inherited metabolic diseases in pediatric patients. Aldagen plans to list the shares on the NASDAQ Global Market under the symbol ALDH. The world market for IPOs got a boost with the inauguration of the ChiNext exchange, a new Chinese stock exchange for small, high-tech enterprises, which started trading on Friday. All of the 28 listed companies, which included six involved in biotech and pharmaceuticals, soared in price on the first day of trading.In the biggest deal of the week, Medivation ([MDVN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDVN&selected=MDVN)) ) will collaborate with Astellas Pharma ([ALPMF.PK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ALPMF.PK&selected=ALPMF.PK)) ) to develop and commercialize MDV3100, a new generation of oral anti-androgen that is currently being evaluated in a phase 3 trial for the treatment of prostate cancer. In a deal similar to last year's partnership between Medivation and Pfizer ([PFE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PFE&selected=PFE)) ) for Dimebon in Alzheimer's disease, the deal involves a significant amount of cash upfront and the option to co-promote the drug in the United States. Astellas will pay Medivation $110 million upfront and milestone payments up to $335 million as the candidate reaches certain development and regulatory milestones plus up to an additional $320 million in commercial milestone payments. The companies will collaborate on a comprehensive development program that will include additional studies to develop MDV3100 for both late- and early-stage prostate cancer. If and when the drug is approved, the companies will jointly commercialize MDV3100 in the United States, sharing equally in all U.S. development costs, commercialization costs, and profits. Astellas will have responsibility for developing and commercializing MDV3100 outside the United States and will pay Medivation tiered double-digit royalties on ex-U.S. sales.Bay Area biotech SuperGen ([SUPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SUPG&selected=SUPG)) ) entered into a multi-year collaboration with GlaxoSmithKline ([GSK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSK&selected=GSK)) ) to discover and develop cancer therapeutics based on epigenetic targets in a deal that could be worth as much as $375 million for the epigenetics company. The deal is seen as validation for Supergen's in-silico drug discovery platform. Under the terms of the deal, SuperGen will progress candidate compounds through to early clinical proof of concept. GlaxoSmithKline will then have the right to exercise an option to develop further and commercialize resulting products on a global basis. GSK will pay SuperGen $5 million upfront, which includes a $3 million common stock investment, priced at a premium to market. The deal includes the potential for development and commercial milestones, and double-tiered royalties.Micromet ([MITI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MITI&selected=MITI)) ) scored another hit on its BiTE antibody technology platform in a deal with Sanofi-Aventis ([SNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SNY&selected=SNY)) ). The companies entered a global collaboration and license agreement to develop a BiTE antibody against an antigen present at the surface of carcinoma cells. BiTE antibodies are novel therapeutic antibodies that activate a patient's T cells to seek out and destroy cancer cells. Under this agreement, Bethesda, Maryland-based Micromet will be mainly responsible for the discovery, research and development of the BiTE antibody through the completion of phase 1 clinical trials after which Sanofi-Aventis will have full responsibility for the further development, as well as for the worldwide commercialization. Micromet gets $12 million cash upfront and is eligible for development and regulatory milestone payments of up to $241 million, plus performance-based sales milestones of up to $224 million and royalties on worldwide product sales.Global contract research organization PPD ([PPDI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPDI&selected=PPDI)) ) is investing $100 million in Celtic Therapeutics Holdings, an investment partnership organized to acquire and develop novel mid-stage therapeutic candidates that address unmet medical needs, and advance development of these candidates to the next key product milestone, usually the beginning or end of phase 3. PPD's investment is intended to set the stage for a strategic alliance between the companies with the goal of bringing the best products to market more quickly to meet unmet needs of patients. Finally, Ligand Pharmaceuticals ([LGND](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LGND&selected=LGND)) ) is buying struggling Metabasis Therapeutics ([MBRX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MBRX&selected=MBRX)) ) for the fire sale price of $3.2 million and contingent value rights. The La Jolla, California biotech, which has a pipeline of drugs to treat metabolic diseases, went public in June 2004 at $7 a share. Today its stock trades below 50 cents. The company burned through more than $200 million without getting any drugs to market and cut its staff down to seven people earlier this year as it ran low on cash. Under the agreement, Ligand will pay Metabasis' shareholders $1.8 million and take over more than $1.3 million in liabilities. Metabasis shareholders will receive contingent value rights that entitle them to cash payments as frequently as every six months as cash is received by Ligand from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. Ligand has committed to spend at least $8 million in new research and development funding on the Metabasis programs within 42 months following the closing of the transaction.click to enlarge [](http://static.seekingalpha.com/uploads/2009/11/1/saupload_btns_103009.png) See also [Blackstone: Benefiting from Improving Economic Trends](http://seekingalpha.com/article/172003-blackstone-benefiting-from-improving-economic-trends?source=nasdaq) on seekingalpha.com | This Week in Biotech: More Treats than Tricks | News | SeekingAlpha | Unknown | 0.0003 | 1.88448 | 1.76 | 1.69942 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.71917 | 1.72193 | 1.6917 | 1.76958 | 1.71759 | 2.04015 | 1.99594 |
IVR | Invesco Mortgage Capital Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/financials-rebound-2009-11-03 | 2009-11-03 01:49:00 | Markets|BAC|CIM|JPM|RWT | Last year when many wondered if the US financial system would survive the worst crisis in recent memory, we spoke with Anton Schutz about his outlook for the sector. Most of his calls panned out in the interve [Image](http://kr.nlh1.com/images/200911/aschutz.gif) ning 13 months; now that the banking system has returned to some semblance of normality, we checked back with the manager of **Burnham Financial Services** ([BURKX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURKX&selected=BURKX)) ) and Burnham Financial Industries ([BURFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURFX&selected=BURFX)) ) to get his take on what's next. **Most of the nation's major banks posted strong earnings in the third quarter. Is the wind at their backs, or do problems lurk on the horizon?** Capital markets have improved but remain fragile. Credit spreads have come in and equities have appreciated, though stocks have benefited from the weaker US dollar. It feels good that the market is up, but it's up because of something that isn't good.Banks have worked through some of the issues, but there's more pain to come. Although residential real estate has stabilized, commercial real estate is still a major issue.Banks also face regulatory challenges. New rules likely will require banks to hold more capital and impose limits on what percentages of their capital can be allocated to certain business lines.Are banks going to be less profitable because of these rules? Yes and no. Some investors think banks will become similar to utilities, but they overlook that the basic banking model is more profitable today than it was over the previous decade.Banks no longer face insane competition from Wall Street and the conduits that would lend at any cost because they were selling off the risk. Today banks are getting spreads and are pulling in covenants and guarantees. The deposit side of the industry is also strong. **The last time we spoke you were particularly bullish on community banks. Has the rash of failures over the past year changed that?**I'm still of the same belief. It's helped that community banks have re-priced their loans higher, but you have to be an astute stock-picker because certain geographies remain under severe pressure.But there's still good news in these challenged areas because the Federal Deposit Insurance Corp ([FDIC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDIC&selected=FDIC)) ) is making it very palatable for the healthier names to buy the sicker ones. From loss-sharing agreements to giving away deposits for virtually nothing, the FDIC is setting up deals that are terrifically accretive for acquirers. Well-capitalized institutions are going to survive and have a real chance to shine. **You still hold a number of mortgage real estate investment trusts (REITs) in your portfolios, but the names have changed since we last spoke. What's the logic behind these moves?**The names I held a year ago were the ones that spurned credit risk. They used leverage to buy agency paper and benefited from a steep yield curve and the benevolent policies of the Federal Reserve. But rates can't go any lower, and funding costs will go up once the Fed changes course. At the same time, if mortgage rates come down and a wave of refinancing ensues, these trusts will lose some assets to prepayment. Because these assets are trading above par, these REITs could take a pretty good punch to the face. Conversely, mortgage REITs that are credit sensitive will benefit from refinancing because they're buying assets that aren't as strong--the ones that people are dumping at cheap prices. These guys are buying mortgages at 50 or 60 cents on the dollar; if the borrower refinances, they get 100 cents on the dollar. And the values of these distressed assets continue to go up as credit spreads come in.Companies like **Invesco Mortgage Capital** ([IVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IVR&selected=IVR)) ) and **PennyMac Mortgage Investment Trust (** NYSE: PMT) are taking advantage of the government's Public-Private Investment Program. PennyMac is following a servicing model, buying scratch-and-dent mortgages and working hard to restructure them. **You also have what appear to be a few private-equity outfits in your portfolios. Aren't those risky plays in these markets?****Capital Acquisition Corp** ([CLA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLA&selected=CLA)) ) is about to go from being a special-purpose acquisition company to a mortgage REIT in the vein of **Chimera Investment Corp** ([CIM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CIM&selected=CIM)) ) or **Redwood Trust** ([RWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RWT&selected=RWT)) ). I'm buying the stock basically at book value, whereas the other names trade at a premium. That play is a value manager's way of getting into an attractive asset class.The other one, Global Comsumer Acquisition Corp, actually closed its deal and is now **Western Liberty Bancorp** ([WLBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLBC&selected=WLBC)) ). The company has a bank charter coming and agreements to buy a couple of banks in Nevada. It will use its excess capital to participate in FDIC-facilitated acquisitions. Once Western Liberty gets its first couple of deals on the table, the stock should garner more attention. **A lot of names appear to be overvalued. Has that narrowed your investment options?**Some of the biggest names appear to be overvalued, but the best smaller names offer lots of upside.That being said, **Bank of America** ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) still has 100 percent upside. I think the stock could trade above $30. A normalized earnings run rate could be in the $3.00 to $3.50 range--if you put a ten multiple on it, there you go.Some daunting challenges are keeping the stock at $17, but it should pull through.The bank's capital ratios grew last quarter, and the management issues will be resolved--from Bryan Moynihan [current president of consumer banking] to Alvaro de Molina [former chief executive officer], there's a number of good candidates. Bank of America's huge market share and leadership in a number of businesses eventually will translate into higher prices. The Merrill Lynch and Countrywide franchises are performing well, but the company still has to work through credit issues in its consumer and credit card portfolios. **Are there any nooks and crannies in the financial sector that look attractive?**I spend the most time looking for potential mergers and acquisitions. But you don't want the targets--the targets are sick.If you sift through all of the secondary offerings, most banks are raising capital for two reasons. In some instances, these are defensive moves to shore up leaky balance sheets, but most are raising excess capital to go on the offensive. **1st United Bancorp** ([FUBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUBC&selected=FUBC)) ) down in Florida-based is one example. I don't like the symbol, but I like management a lot. The stock traded on the pink sheets as recently as two months ago and had a $40 million market cap. But management leveraged its reputation to raise $70 million, much of which will be used to buy broken banks in Florida. The bank will add tremendous value with each incremental transaction it makes. **CenterState Banks** ([CSFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSFL&selected=CSFL)) ) is another Florida bank on my radar. Like 1st United, it's raised a bunch of money and is looking for distressed acquisitions in its own backyard. FDIC-assisted deals not only raise earnings power, but they also raise book value and are accretive transactions. In these deals the acquirer takes the good with the bad, but the bad isn't that bad when the FDIC shares the losses. **What's your best advice for the next twelve months?**Financial stocks should generate phenomenal returns over the next three to five years because of the restructuring that's underway.The biggest names have already priced in a lot of good news, but at these levels you should still be able to make a 100 percent return on Bank of America's stock and a 50 percent return on **JP Morgan Chase** ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ). I see even more upside in the smaller names that survive.That being said, it will take patience to take advantage of these opportunities, and you still have to approach the group with a high degree of selectivity--an exchange-traded fund or other blanket approach isn't the way to go. The nation's largest institutions have survived, but a lot of smaller names won't make it. Failures will definitely number in the hundreds. There's a lot of risk out there, and you've got to know what you're doing. You can buy a fund like mine or focus on companies that have raised offensive capital. [Image](http://kr.nlh1.com/images/200911/antontopfive_p5.gif) Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | Financials on the Rebound | News | Investing Daily | Unknown | 0.0004 | 20.0054 | 19.9722 | 19.9745 | 19.7395 | 19.7395 | 19.7395 | 19.7397 | 19.7397 | 19.7395 | 19.7395 | 19.6684 | 19.4988 | 19.4498 | 19.9049 | 20.4623 | 20.6217 | 21.9404 | 21.8032 |
RWT | Redwood Trust, Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/financials-rebound-2009-11-03 | 2009-11-03 01:49:00 | Markets|BAC|CIM|JPM|IVR | Last year when many wondered if the US financial system would survive the worst crisis in recent memory, we spoke with Anton Schutz about his outlook for the sector. Most of his calls panned out in the interve [Image](http://kr.nlh1.com/images/200911/aschutz.gif) ning 13 months; now that the banking system has returned to some semblance of normality, we checked back with the manager of **Burnham Financial Services** ([BURKX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURKX&selected=BURKX)) ) and Burnham Financial Industries ([BURFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURFX&selected=BURFX)) ) to get his take on what's next. **Most of the nation's major banks posted strong earnings in the third quarter. Is the wind at their backs, or do problems lurk on the horizon?** Capital markets have improved but remain fragile. Credit spreads have come in and equities have appreciated, though stocks have benefited from the weaker US dollar. It feels good that the market is up, but it's up because of something that isn't good.Banks have worked through some of the issues, but there's more pain to come. Although residential real estate has stabilized, commercial real estate is still a major issue.Banks also face regulatory challenges. New rules likely will require banks to hold more capital and impose limits on what percentages of their capital can be allocated to certain business lines.Are banks going to be less profitable because of these rules? Yes and no. Some investors think banks will become similar to utilities, but they overlook that the basic banking model is more profitable today than it was over the previous decade.Banks no longer face insane competition from Wall Street and the conduits that would lend at any cost because they were selling off the risk. Today banks are getting spreads and are pulling in covenants and guarantees. The deposit side of the industry is also strong. **The last time we spoke you were particularly bullish on community banks. Has the rash of failures over the past year changed that?**I'm still of the same belief. It's helped that community banks have re-priced their loans higher, but you have to be an astute stock-picker because certain geographies remain under severe pressure.But there's still good news in these challenged areas because the Federal Deposit Insurance Corp ([FDIC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDIC&selected=FDIC)) ) is making it very palatable for the healthier names to buy the sicker ones. From loss-sharing agreements to giving away deposits for virtually nothing, the FDIC is setting up deals that are terrifically accretive for acquirers. Well-capitalized institutions are going to survive and have a real chance to shine. **You still hold a number of mortgage real estate investment trusts (REITs) in your portfolios, but the names have changed since we last spoke. What's the logic behind these moves?**The names I held a year ago were the ones that spurned credit risk. They used leverage to buy agency paper and benefited from a steep yield curve and the benevolent policies of the Federal Reserve. But rates can't go any lower, and funding costs will go up once the Fed changes course. At the same time, if mortgage rates come down and a wave of refinancing ensues, these trusts will lose some assets to prepayment. Because these assets are trading above par, these REITs could take a pretty good punch to the face. Conversely, mortgage REITs that are credit sensitive will benefit from refinancing because they're buying assets that aren't as strong--the ones that people are dumping at cheap prices. These guys are buying mortgages at 50 or 60 cents on the dollar; if the borrower refinances, they get 100 cents on the dollar. And the values of these distressed assets continue to go up as credit spreads come in.Companies like **Invesco Mortgage Capital** ([IVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IVR&selected=IVR)) ) and **PennyMac Mortgage Investment Trust (** NYSE: PMT) are taking advantage of the government's Public-Private Investment Program. PennyMac is following a servicing model, buying scratch-and-dent mortgages and working hard to restructure them. **You also have what appear to be a few private-equity outfits in your portfolios. Aren't those risky plays in these markets?****Capital Acquisition Corp** ([CLA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLA&selected=CLA)) ) is about to go from being a special-purpose acquisition company to a mortgage REIT in the vein of **Chimera Investment Corp** ([CIM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CIM&selected=CIM)) ) or **Redwood Trust** ([RWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RWT&selected=RWT)) ). I'm buying the stock basically at book value, whereas the other names trade at a premium. That play is a value manager's way of getting into an attractive asset class.The other one, Global Comsumer Acquisition Corp, actually closed its deal and is now **Western Liberty Bancorp** ([WLBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLBC&selected=WLBC)) ). The company has a bank charter coming and agreements to buy a couple of banks in Nevada. It will use its excess capital to participate in FDIC-facilitated acquisitions. Once Western Liberty gets its first couple of deals on the table, the stock should garner more attention. **A lot of names appear to be overvalued. Has that narrowed your investment options?**Some of the biggest names appear to be overvalued, but the best smaller names offer lots of upside.That being said, **Bank of America** ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) still has 100 percent upside. I think the stock could trade above $30. A normalized earnings run rate could be in the $3.00 to $3.50 range--if you put a ten multiple on it, there you go.Some daunting challenges are keeping the stock at $17, but it should pull through.The bank's capital ratios grew last quarter, and the management issues will be resolved--from Bryan Moynihan [current president of consumer banking] to Alvaro de Molina [former chief executive officer], there's a number of good candidates. Bank of America's huge market share and leadership in a number of businesses eventually will translate into higher prices. The Merrill Lynch and Countrywide franchises are performing well, but the company still has to work through credit issues in its consumer and credit card portfolios. **Are there any nooks and crannies in the financial sector that look attractive?**I spend the most time looking for potential mergers and acquisitions. But you don't want the targets--the targets are sick.If you sift through all of the secondary offerings, most banks are raising capital for two reasons. In some instances, these are defensive moves to shore up leaky balance sheets, but most are raising excess capital to go on the offensive. **1st United Bancorp** ([FUBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUBC&selected=FUBC)) ) down in Florida-based is one example. I don't like the symbol, but I like management a lot. The stock traded on the pink sheets as recently as two months ago and had a $40 million market cap. But management leveraged its reputation to raise $70 million, much of which will be used to buy broken banks in Florida. The bank will add tremendous value with each incremental transaction it makes. **CenterState Banks** ([CSFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSFL&selected=CSFL)) ) is another Florida bank on my radar. Like 1st United, it's raised a bunch of money and is looking for distressed acquisitions in its own backyard. FDIC-assisted deals not only raise earnings power, but they also raise book value and are accretive transactions. In these deals the acquirer takes the good with the bad, but the bad isn't that bad when the FDIC shares the losses. **What's your best advice for the next twelve months?**Financial stocks should generate phenomenal returns over the next three to five years because of the restructuring that's underway.The biggest names have already priced in a lot of good news, but at these levels you should still be able to make a 100 percent return on Bank of America's stock and a 50 percent return on **JP Morgan Chase** ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ). I see even more upside in the smaller names that survive.That being said, it will take patience to take advantage of these opportunities, and you still have to approach the group with a high degree of selectivity--an exchange-traded fund or other blanket approach isn't the way to go. The nation's largest institutions have survived, but a lot of smaller names won't make it. Failures will definitely number in the hundreds. There's a lot of risk out there, and you've got to know what you're doing. You can buy a fund like mine or focus on companies that have raised offensive capital. [Image](http://kr.nlh1.com/images/200911/antontopfive_p5.gif) Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | Financials on the Rebound | News | Investing Daily | Unknown | 0.0004 | 14.1711 | 13.9828 | 13.984 | 13.7045 | 13.7035 | 13.7035 | 13.7035 | 13.7045 | 13.7046 | 13.7046 | 13.6891 | 13.8823 | 14.3648 | 14.2084 | 13.3092 | 13.409 | 13.8339 | 14.6816 |
CIM | Chimera Investment Corporation | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/financials-rebound-2009-11-03 | 2009-11-03 01:49:00 | Markets|BAC|JPM|RWT|IVR | Last year when many wondered if the US financial system would survive the worst crisis in recent memory, we spoke with Anton Schutz about his outlook for the sector. Most of his calls panned out in the interve [Image](http://kr.nlh1.com/images/200911/aschutz.gif) ning 13 months; now that the banking system has returned to some semblance of normality, we checked back with the manager of **Burnham Financial Services** ([BURKX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURKX&selected=BURKX)) ) and Burnham Financial Industries ([BURFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BURFX&selected=BURFX)) ) to get his take on what's next. **Most of the nation's major banks posted strong earnings in the third quarter. Is the wind at their backs, or do problems lurk on the horizon?** Capital markets have improved but remain fragile. Credit spreads have come in and equities have appreciated, though stocks have benefited from the weaker US dollar. It feels good that the market is up, but it's up because of something that isn't good.Banks have worked through some of the issues, but there's more pain to come. Although residential real estate has stabilized, commercial real estate is still a major issue.Banks also face regulatory challenges. New rules likely will require banks to hold more capital and impose limits on what percentages of their capital can be allocated to certain business lines.Are banks going to be less profitable because of these rules? Yes and no. Some investors think banks will become similar to utilities, but they overlook that the basic banking model is more profitable today than it was over the previous decade.Banks no longer face insane competition from Wall Street and the conduits that would lend at any cost because they were selling off the risk. Today banks are getting spreads and are pulling in covenants and guarantees. The deposit side of the industry is also strong. **The last time we spoke you were particularly bullish on community banks. Has the rash of failures over the past year changed that?**I'm still of the same belief. It's helped that community banks have re-priced their loans higher, but you have to be an astute stock-picker because certain geographies remain under severe pressure.But there's still good news in these challenged areas because the Federal Deposit Insurance Corp ([FDIC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDIC&selected=FDIC)) ) is making it very palatable for the healthier names to buy the sicker ones. From loss-sharing agreements to giving away deposits for virtually nothing, the FDIC is setting up deals that are terrifically accretive for acquirers. Well-capitalized institutions are going to survive and have a real chance to shine. **You still hold a number of mortgage real estate investment trusts (REITs) in your portfolios, but the names have changed since we last spoke. What's the logic behind these moves?**The names I held a year ago were the ones that spurned credit risk. They used leverage to buy agency paper and benefited from a steep yield curve and the benevolent policies of the Federal Reserve. But rates can't go any lower, and funding costs will go up once the Fed changes course. At the same time, if mortgage rates come down and a wave of refinancing ensues, these trusts will lose some assets to prepayment. Because these assets are trading above par, these REITs could take a pretty good punch to the face. Conversely, mortgage REITs that are credit sensitive will benefit from refinancing because they're buying assets that aren't as strong--the ones that people are dumping at cheap prices. These guys are buying mortgages at 50 or 60 cents on the dollar; if the borrower refinances, they get 100 cents on the dollar. And the values of these distressed assets continue to go up as credit spreads come in.Companies like **Invesco Mortgage Capital** ([IVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IVR&selected=IVR)) ) and **PennyMac Mortgage Investment Trust (** NYSE: PMT) are taking advantage of the government's Public-Private Investment Program. PennyMac is following a servicing model, buying scratch-and-dent mortgages and working hard to restructure them. **You also have what appear to be a few private-equity outfits in your portfolios. Aren't those risky plays in these markets?****Capital Acquisition Corp** ([CLA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLA&selected=CLA)) ) is about to go from being a special-purpose acquisition company to a mortgage REIT in the vein of **Chimera Investment Corp** ([CIM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CIM&selected=CIM)) ) or **Redwood Trust** ([RWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RWT&selected=RWT)) ). I'm buying the stock basically at book value, whereas the other names trade at a premium. That play is a value manager's way of getting into an attractive asset class.The other one, Global Comsumer Acquisition Corp, actually closed its deal and is now **Western Liberty Bancorp** ([WLBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLBC&selected=WLBC)) ). The company has a bank charter coming and agreements to buy a couple of banks in Nevada. It will use its excess capital to participate in FDIC-facilitated acquisitions. Once Western Liberty gets its first couple of deals on the table, the stock should garner more attention. **A lot of names appear to be overvalued. Has that narrowed your investment options?**Some of the biggest names appear to be overvalued, but the best smaller names offer lots of upside.That being said, **Bank of America** ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) still has 100 percent upside. I think the stock could trade above $30. A normalized earnings run rate could be in the $3.00 to $3.50 range--if you put a ten multiple on it, there you go.Some daunting challenges are keeping the stock at $17, but it should pull through.The bank's capital ratios grew last quarter, and the management issues will be resolved--from Bryan Moynihan [current president of consumer banking] to Alvaro de Molina [former chief executive officer], there's a number of good candidates. Bank of America's huge market share and leadership in a number of businesses eventually will translate into higher prices. The Merrill Lynch and Countrywide franchises are performing well, but the company still has to work through credit issues in its consumer and credit card portfolios. **Are there any nooks and crannies in the financial sector that look attractive?**I spend the most time looking for potential mergers and acquisitions. But you don't want the targets--the targets are sick.If you sift through all of the secondary offerings, most banks are raising capital for two reasons. In some instances, these are defensive moves to shore up leaky balance sheets, but most are raising excess capital to go on the offensive. **1st United Bancorp** ([FUBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUBC&selected=FUBC)) ) down in Florida-based is one example. I don't like the symbol, but I like management a lot. The stock traded on the pink sheets as recently as two months ago and had a $40 million market cap. But management leveraged its reputation to raise $70 million, much of which will be used to buy broken banks in Florida. The bank will add tremendous value with each incremental transaction it makes. **CenterState Banks** ([CSFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSFL&selected=CSFL)) ) is another Florida bank on my radar. Like 1st United, it's raised a bunch of money and is looking for distressed acquisitions in its own backyard. FDIC-assisted deals not only raise earnings power, but they also raise book value and are accretive transactions. In these deals the acquirer takes the good with the bad, but the bad isn't that bad when the FDIC shares the losses. **What's your best advice for the next twelve months?**Financial stocks should generate phenomenal returns over the next three to five years because of the restructuring that's underway.The biggest names have already priced in a lot of good news, but at these levels you should still be able to make a 100 percent return on Bank of America's stock and a 50 percent return on **JP Morgan Chase** ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ). I see even more upside in the smaller names that survive.That being said, it will take patience to take advantage of these opportunities, and you still have to approach the group with a high degree of selectivity--an exchange-traded fund or other blanket approach isn't the way to go. The nation's largest institutions have survived, but a lot of smaller names won't make it. Failures will definitely number in the hundreds. There's a lot of risk out there, and you've got to know what you're doing. You can buy a fund like mine or focus on companies that have raised offensive capital. [Image](http://kr.nlh1.com/images/200911/antontopfive_p5.gif) Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | Financials on the Rebound | News | Investing Daily | Unknown | 0.0004 | 3.71502 | 3.53112 | 3.53259 | 3.7297 | 3.7297 | 3.7297 | 3.7297 | 3.7297 | 3.7297 | 3.7297 | 3.69052 | 3.69601 | 3.72727 | 3.60958 | 3.67289 | 3.67971 | 3.92798 | 4.03103 |
LGND | Ligand Pharmaceuticals Incorporated | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/three-core-biotech-holdings-isis-ligand-and-vical-2009-11-09 | 2009-11-09 03:51:00 | GSK|Markets|PFE|FRTX|ABT | ** [Michael Steinberg](http://clickbroker.blogspot.com/) submits:**Isis ([ISIS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ISIS&selected=ISIS)) ), Ligand ([LGND](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LGND&selected=LGND)) ) and Vical ([VICL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VICL&selected=VICL)) ) have been my core biotech holdings since the mid 1990s and I have been steadily adding to these positions each time the market has lost faith. They share common themes and some differences. Isis and Vical have maintained consistent management throughout the years, whereas Ligand radically changed direction a few years ago when Daniel Loeb's Third Point hedge fund took a stake. Now all three are focused on drug discovery; leaving the marketing to others.All three have many pharmaceutical partnerships and many shots on goal, so one failure would not be devastating. In order of platform strength and a protective moat around their technology; Isis is the strongest, followed by Vical, with Ligand pulling up the rear. Ligand has announced a strategy of picking up funded drug candidates through low cost mergers with desperate cash-strapped micro-cap biotechs. They want to partner their internal development candidates at the earliest possible inflection point, but not much past the initial phase 2 "proof of concept" clinical trials.Historically, Ligand sold over half of its potential royal streams and settled for higher upfronts over royalties to build a commercial sales organization for a few fledging products. Third Point installed new management, sold Ligand's commercial products, declared a special $2.50 dividend and set the company on the path of operating cash flow neutral.Three potential blockbusters are close to launch by GlaxoSmithKline ([GSK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSK&selected=GSK)) ) and Pfizer ([PFE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PFE&selected=PFE)) ) with sacrificed royalties. Now Ligand is showing more emphasis on royalties than the upfront, a better balance. The encouragement is that new deals are being negotiated with mid-teen and higher royalties. Looking back, I had too much faith in Ligand's old management and now I'm solidly on Dan Loeb's team with Ligand.Isis' years of failure have been legendary, but the Genzyme ([GENZ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GENZ&selected=GENZ)) ) almost $2B deal on the Mipomersen cholesterol drug was the turning point. Together with the $200M sale of Ibis Biosciences to Abbott ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ), Isis has almost as much cash as India has gold. Isis has over 20 drugs in development and repeatedly committed to keeping its employment below 325 while continuing to rev its discovery engine in high gear.Both Ligand and Isis will be high earners when royalties start flowing and expenses are maintained at a low level. The difference is Isis is willing to take the clinical process to a higher inflection point to get 50% profit sharing whereas Ligand will settle for less risk and investment to get a 15% royalty. But, neither company wants a sales force. Vical has been more ambiguous about commercialization. Their DNA vaccine platform has some pharmaceutical and government sponsorship, and they are retaining US rights to their cancer vaccine. Vical is the most risky of the three companies with only about 2 years of cash and limited research funding. But, they have some drugs in phase 3. The bet on Vical is that [DNA based vaccines are the only way to respond quickly to potential pandemics](http://clickbroker.blogspot.com/2009/07/swine-flu-scare-wheres-vical.html) .My core biotech holdings are high risk, high reward. What they have in common is no fear of future product discovery. They can partner knowing there are always more drugs to come. I try to avoid all or nothing biotechs.Don't be fooled by one product cancer companies alleging that they will diversify into other indications for their one drug. Most of the time, other indications fail. Know that a single drug is not a platform. My core biotechs are all platform companies; Isis and Vical are based on solid technical platforms and Ligand is based a solid business platform.P.S.: PDL Biopharma ([PDLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PDLI&selected=PDLI)) ) learned it was a mistake to resist Daniel Loeb's advances. **Disclosure:**Author is long Isis, Ligand, PDLI, PFE and Vical.See also [IBM Researchers Speed Up Diagnostic Testing in New Breakthrough](http://seekingalpha.com/article/173885-ibm-researchers-speed-up-diagnostic-testing-in-new-breakthrough?source=nasdaq) on seekingalpha.com | Three Core Biotech Holdings: Isis, Ligand and Vical | News | SeekingAlpha | Unknown | 0.0006 | 1.71759 | 2.00495 | 2.00492 | 2.00455 | 2.00455 | 2.00455 | 2.00455 | 2.00455 | 2.00455 | 1.96903 | 1.99818 | 1.98552 | 1.97981 | 2.00818 | 1.9946 | 2.04026 | 2.19714 | 1.88337 |
SRDX | Surmodics, Inc. | Health Care | Medical/Dental Instruments | https://www.nasdaq.com/articles/developments-parkinsons-disease-ignite-investor-enthusiasm-2009-11-16 | 2009-11-16 03:23:00 | Markets|FOLD | ** [Michael Becker](http://mdbpartners.wordpress.com/) submits:**In our August 2009 article titled " [Treating Parkinson's Disease: Investment Opportunities and Challenges](http://mdbpartners.com/blog/2009/08/02/treating-parkinson%e2%80%99s-disease-investment-opportunities-and-challenges/) ," we reviewed some of the historical challenges associated with developing treatments for Parkinson's disease [PD] and cited reasons for optimism going forward in addition to highlighting several promising companies making progress. Since that time, many of the companies we featured have reported clinical progress, presented promising new data, and produced significant returns for investors - with several stocks reaching 52-week highs. In view of renewed investor enthusiasm for companies working in the area of PD, the purpose of this article is to provide an update on previously mentioned companies and introduce some new players that are making headlines in the PD space. **Improvements on Existing Therapies** Levodopa [L-dopa] is one of the most commonly prescribed medicines for PD. L-dopa initially reduces the symptoms of slowness, stiffness and tremor associated with PD; over time the dose of L-dopa needs to be increased often resulting in drug related complications. Several biopharmaceutical companies are developing new drug formulations of currently approved medicines: **Impax Laboratories, Inc. **Shares of Impax Laboratories, Inc. ([IPXL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IPXL&selected=IPXL)) ), which were trading around $7.50 at the time our initial PD article published, recently reached a new 52-week high of $10.86, representing a 45% increase in a matter of months. The company recently initiated a multinational Phase III trial of its late-stage drug candidate IPX066 in advanced PD patients. IPX066 is an investigational extended release carbidopa-levodopa product intended to rapidly achieve and then sustain effective blood concentrations of levodopa, potentially improving PD clinical symptom management. This is the second of two Phase III studies designed to support marketing approval of IPX066 in Parkinson's disease. In June 2009, Impax reported the initiation of the first Phase III study of IPX066 in treatment naïve PD patients. **Nupathe Inc. and SurModics, Inc. **Privately-held Nupthe Inc., a neuroscience-focused specialty pharmaceutical company, recently announced a partnership with SurModics, Inc. ([SRDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SRDX&selected=SRDX)) ), a leading provider of drug delivery and surface modifications to the healthcare industry, for development of NP201. NP201 is a biodegradable sustained release formulation of an approved dopamine agonist and the first long-acting treatment available in broadly acceptable dose form that maintains the potential to provide sustained relief from Parkinson's disease without motor response complications. NP201 leverages NuPathe's long-acting delivery [LAD™] technology and SurModics' proprietary biodegradable polymer matrix implant technology to achieve optimal drug release over an extended period of time. NP201 consists of a dopamine agonist formulated to provide effective relief of the signs and symptoms of Parkinson's disease [e.g., tremor, rigidity, postural instability] for 1-3 months with a single administration. By providing stable, continuous drug delivery over an extended period, NP201 may significantly decrease the dose complications associated with current treatments. Furthermore, many researchers believe that continuous, stable stimulation of the dopamine receptors may slow the progression of the disease. **Neurotrophic Factors and Gene Therapy** Neurotrophic factors are a family of proteins responsible for the growth and survival of developing neurons and the maintenance of mature neurons. Neurotrophic factors represent an attractive drug class because of their anti-apoptotic properties*. Several classes of neurotrophic factors exist, each with unique pharmacodynamic properties. Investigators are still in the process of understanding the different receptor targets of these proteins and the downstream cellular responses; therefore, the best individual or combination of neurotrophic factors is not yet known. Despite these challenges, several companies are proceeding with development of this promising class of drugs.Local administration of neurotrophic growth factors is required to achieve therapeutic concentrations in the target tissue, although the site of administration and method of delivery have represented significant historical barriers. We believe gene therapy is among the more promising delivery alternatives for companies seeking to restore abnormal cellular signaling, especially in diseases with difficult to reach targets such as PD, and several companies have demonstrated considerable progress. **Ceregene, Inc. **Just a few days after our original PD article published in August, privately-held Ceregene, Inc. announced that the Michael J. Fox Foundation for Parkinson's Research [MJFF] will provide funds for long-term follow-up testing of patients enrolled in the company's Phase II trial of CERE-120. CERE-120 is an adeno-associated virus [AAV] carrying the gene for neurturin [NRTN], a naturally occurring neurotrophic factor that repairs damaged and dying dopamine-secreting neurons. The funding will enable Ceregene to collect and analyze more extensive data for up to 48 months from patients with advanced PD who were enrolled in the double-blind, controlled trial which ended in November 2008. The Phase II trial involved 52 patients and failed to demonstrate a difference in the primary endpoint in the treated versus the control group. However, the study suggested improvements in secondary endpoints at 12 months. Based on those findings, and insight gained from analyses of post-mortem brain tissue from two CERE-120 treated patients, the company has revised the dosing regimen and expects to initiate a new trial of CERE-120 in the near future. In October 2009, BioSante Pharmaceuticals, Inc. ([BPAX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BPAX&selected=BPAX)) ) completed its merger with Cell Genesys, Inc. ([CEGE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CEGE&selected=CEGE)) ) and now owns a sixteen [16] percent equity ownership position in Ceregene, a former subsidiary of Cell Genesys. **Phytopharm plc** Phytopharm plc ([PYM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PYM&selected=PYM)) ) is developing Cogane™, a novel non-peptide, orally bioavailable neurotrophic factor inducer that readily crosses the blood brain barrier. In preclinical models, Cogane reverses the changes in the area of the brain involved in Parkinson's disease by inducing the body's own production of neurotrophic factors including glial cell line-derived neurotrophic factor [GDNF].Phytopharm recently announced two positive results from studies for Cogane. In the first study, funded by a grant from MJFF, Cogane demonstrated efficacy in a preclinical study using a non-clinical, non-human primate model of PD resulting in a 43% reduction in parkinsonian disability. In the second study, the company reported Phase 1b, 28-day safety data. It demonstrated that Cogane was well tolerated, with blood levels of Cogane reaching efficacy levels seen in the non-human primate model.The promising results, although still early in clinical development, demonstrate the scientific and financial interest in this biologic pathway and a Phase II, proof-of-concept study for Cogane is planned to commence in the second quarter of 2010.Shares of Phytopharm soared more than 300% to a new 52-week high of 26.95 pence ($4.46) on the news. **Oxford BioMedica** Oxford BioMedica ([OXB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OXB&selected=OXB)) ) recently presented data that positions the company at the forefront of gene therapy for PD. Oxford BioMedica ([OXBDF.PK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OXBDF.PK&selected=OXBDF.PK)) ) recently announced new data from the ongoing Phase I/II trial of ProSavin®, its novel gene therapy for the treatment of PD. All patients treated at the second dose level have completed their six-month assessments and have shown further improvement in motor function. The maximum improvement was 53% and the average was 34% relative to patients' pre-treatment motor function.The Principal Investigator, Professor Stéphane Palfi of the Henri Mondor Hospital in Paris, is expected to present interim results from the trial at the European Society of Gene & Cell Therapy Annual Congress, being held November 21-25, 2009, in Hannover, Germany.In addition, Oxford BioMedica recently released preclinical studies demonstrating increased dopamine production without the addition of L-DOPA resulting in decreased disease severity without the dyskinesias associated with L-DOPA [1]. Movement and posture were significantly improved after two weeks [pOxford BioMedica has clearly taken the lead in the race for novel PD therapies. In addition to the excellent safety profile, ProSavin delivers three genes, AADC [aromatic amino acid decarboxylase], TH [tyrosine hydroxylase] and CH1 [GTP-cyclohydrolase 1], addressing multiple protein targets associated with PD pathophysiology. As Oxford BioMedica continues clinical development, including dosing optimization, this therapy could potentially offer long-term improvements in patients afflicted with PD.Shares of Oxford BioMedica, which were trading around 10.00 pence ($1.67) at the time our original PD article published, more than doubled and reached a new 52-week high of 21.75 pence ($3.64) on the news, resulting in upgrades from research analysts. **Neurologix, Inc. **Neurologix, Inc. ([NRGX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NRGX&selected=NRGX)) ) is developing NLX-P101, an AAV vector delivering an inhibitory therapeutic gene [glutamic acid decarboxylase, or "GAD"] which is inserted in the subthalmic nucleus [STN]. In its third quarter of 2009 financial results press release, Neurologix reported that its Data Monitoring Committee held its second meeting to review the progress of the ongoing Phase II study of NLX-P101 and recommended that the trial continue unmodified. Despite having one of the most clinically advanced gene therapy solutions for PD, Neurologix also disclosed that the company must secure additional funding by December 31, 2009, or shortly thereafter, otherwise its ability to continue as a "going concern" may be in doubt. While the company remains on track to complete all surgeries for the Phase II study before year-end, the first efficacy results from this trial won't be available until around mid-year 2010. **Link Between Gaucher's Disease and PD Published** Recent clinical data has demonstrated that a mutation in the gene encoding glucocerebrosidase [GBA] in patients with PD is the most common genetic risk factor for Parkinson's disease identified to date. The lysosomal enzyme GBA is deficient in patients with Gaucher's disease; lack of a functional copy of GBA results in accumulation of glucocerebroside in many tissues including the liver, lungs, brain, and spleen. In a recent New England Journal of Medicine [NEJM] article, 20% of Ashkenazi Jewish Patients and 7% of Non-Ashkenazi Jewish Patients were found to be carriers of a GBA mutation [2]. Patients with a GBA mutation presented earlier with the disease, were more likely to have affected relatives, and were more likely to have atypical clinical manifestations. **Amicus Therapeutics, Inc. **Amicus Therapeutics, Inc. ([FOLD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FOLD&selected=FOLD)) ) recently presented data demonstrating a correlation between GBA and alpha-synuclein, an upregulated PD protein that can form aggregated insoluble amyloid fibrils and neuronal toxicity. Alpha-synuclein up-regulation and aggregation has previously been shown to be critical in the development of PD. Amicus' in vivo data shows that increasing GBA activity re-established alpha-synuclein homeostasis. In a mouse model overexpressing alpha-synuclein, Amicus was able to restore normal synuclein levels by increasing the GBA activity with Plicera™ [afegostat tartrate], the company's experimental, oral therapy for the treatment of Gaucher disease that belongs to a class of molecules known as pharmacological chaperones.This is important for two reasons: 1) by restoring GBA activity to normal levels, this could potentially decrease the risk of PD for patients with a GBA genetic mutation and 2) in patients that are not carriers [i.e. normal GBA but elevated synucleins], the preclinical data has shown that increasing GBA activity above normal levels restores alpha-synuclein levels, possibly slowing disease progression. Amicus, which has also received funding support from MJFF, plans to continue its preclinical chaperone molecule optimization, including Plicera, in an in vivo PD motor deficit model.Success in this area could reignite investor interest in Amicus, which recently announced negative results from a Phase II trial with Plicera in Gaucher's disease. The genetic link between GBA and PD is clear and although the direct molecular relationship between these two proteins is not completely understood, GBA is a new and attractive therapeutic target for PD. Importantly, in the Phase II trial for Gaucher's disease, Amicus demonstrated an increase in GBA activity in those patients receiving Plicera and the company recently reacquired global development and commercialization rights to the product candidate from Shire plc ([SHPGY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHPGY&selected=SHPGY)) ). Amicus has a clear lead in developing small molecules that increase GBA activity and despite the Gaucher's disease trial setback, complete GBA restoration may not be needed to restore normal synuclein levels. Amicus will continue with lead optimization for GBA in the brain, including Plicera, for the treatment of PD along with other GBA chaperone molecules. Clearly, Plicera is an attractive lead compound because much of the preclinical and phase I safety studies have been completed and it has been shown to cross the blood brain barrier. **Conclusion** While treatment of PD is complex due to the disease location, difficulty in clinical trials, and multiple causes of pathophysiology, investor enthusiasm for companies working in this area is warranted in view of recent progress.Several companies, such as Impax Laboratories and Nupathe, are developing new drug formulations of currently approved medicines. If approved, these drugs could improve the side effect profiles of the FDA approved medicines. From an investors perspective, these companies are attractive since the FDA approval process will be much more straightforward and physician acceptance will be high because these drugs are an improvement on a known drug class.Other companies, although generally earlier in development, are using neurotrophic factors and gene therapy approaches to directly address the disease mechanism. While much riskier, these new technologies could drastically change the disease outcomes of those patients afflicted with this debilitating disease. Speed to market combined with superior efficacy will be critical for high market penetration.* Neurotrophic factors were discovered in 1948 in the brain. Originally thought to be exclusive to the brain, these peptides are now found to have broader applications in other cell types and locations. Due to their pharmacodynamic properties such as reducing ER stress, neurotrophic factors possess anti-apoptotic properties and could serve as therapies for many diseases such as myocardial infarctions/ischemia and stroke. References: - Sci Transl Med. 14 October 2009 1:2ps2 - N Engl J Med. 22 October 2009;361(17):1651-61 **Disclosure** : No positionsSee also [Petrobras' Long-Term Prospects Look as Strong as Ever](http://seekingalpha.com/article/175498-petrobras-long-term-prospects-look-as-strong-as-ever?source=nasdaq) on seekingalpha.com | Developments for Parkinson's Disease Ignite Investor Enthusiasm | News | SeekingAlpha | Unknown | 0.0005 | 23.5444 | 23.3835 | 23.4758 | 23.4763 | 23.4763 | 23.4763 | 23.4763 | 23.4763 | 23.4763 | 23.4763 | 23.9893 | 23.6413 | 23.5779 | 23.5656 | 23.2515 | 22.6668 | 22.4655 | 24.8298 |
OLP | One Liberty Properties, Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/high-yielders-decade-sales-growth-2009-11-17 | 2009-11-17 01:02:00 | Markets|FREVS|WMT|ACMC|SUI|EPR|O|MDT|MBCN | Only 313 U.S. companies have increased sales every year for the past decade. These are companies that have improved every year since 1999 -- growing through three presidents and two bear markets.Some of the biggest names that have pulled off this financial feat include Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ), Amazon.com (Nasdaq: AMZN) and Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ). Most of these companies don't pay enough in dividends -- or any in Amazon.com's case -- to make the final cut for serious income investors. Thirteen of the 313 U.S. companies pay more than 6%. **Company (Ticker)****Type****Yield****EPS****DPS** Buckeye Partners([BPL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BPL&selected=BPL)) ) MLP7.2%$1.48$3.58Penn Virginia([PVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PVR&selected=PVR)) ) Energy10.0%$0.62$1.88Empire District Electric ([EDE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EDE&selected=EDE)) ) Utility7.0%$1.20$1.28Realty Income([O](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=O&selected=O)) ) REIT7.0%$1.02$1.70Wash Real Estate([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) REIT6.3%$0.73$1.73Entertainment Prop. ([EPR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EPR&selected=EPR)) ) REIT8.3%$0.06$2.79Sun Communities([SUI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SUI&selected=SUI)) ) REIT13.4%-$1.19$2.52Investors Real(Nasdaq: IRET) REIT8.1%$0.10$0.68Urstadt Biddle([UBA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBA&selected=UBA)) ) REIT6.6%$0.61$0.96One Liberty Prop.([OLP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OLP&selected=OLP)) ) REIT9.2%$0.63$0.84First Real Estate([FREVS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FREVS&selected=FREVS)) ) REIT7.0%$0.83$1.20Middlefield Banc([MBCN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MBCN&selected=MBCN)) ) Bank6.5%$1.09$1.04Amer. Church Mtg.(Pink: ACMC) REIT19.8%$0.14$0.29Even with a decade of stellar earnings growth behind it, this list is full of landmines. American Church Mortgage Company's nearly 20% yield, for example, isn't very secure. In the past 12 months, the company has paid out more than twice what it has earned, making this company's dividend endangered.Several others are worse. IRET, SUI, EPR, WRE, PVR, and BPL all paid out more than twice what they earned during the past twelve months. Even though **Empire District Electric ([EDE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EDE&selected=EDE)) )** has paid out slightly more in dividends than it has earned during the past 12 month, it's the winner in this category. A payout ratio of 108%, in the short-term, isn't too concerning, especially when it's a public utility monopoly that has the states it operates in on its side.The company is currently seeking rate increases in several of its coverage areas that will help fill that gap. Earlier this month, it filed a request with the Kansas Corporation Commission to hike electricity rates in Kansas by nearly 25%. And at the end of October, the company filed a request with the Missouri Public Service Commission to hike electricity rates nearly 20%.While customers won't be pleased with any hike, they'll have to find a way to deal with them as there are few other prospects, none of which are more agreeable than installing a wind turbine on the roof.Based in Joplin, Missouri, the Empire District Electric is a century-old $661 million company that provides electricity, natural gas, or water services to some 215,000 customers in Missouri, Kansas, Oklahoma, and Arkansas. Its seven power plants can produce 1,255 megawatts of power for the 121 cities it provides electricity to.The company pays $0.32 per share quarterly for a total of $1.28 yearly. At current prices around $18, it equates to a yield of 7%. It has maintained its dividend at this level since 1992 and has continuously paid dividends since 1944. This is not an exciting stock. With a beta of 0.76, it's significantly less volatile than the S&P 500. But over the past decade it has outperformed the S&P by +44 percentage points.The company's next $0.32 per share dividend will be paid on December 15, 2009 to holders of record as of December 1, 2009.The company offers a dividend reinvestment program through Wells Fargo Bank that provides a 3% discount to the three day average trading price preceding the dividend payment date. For more information on this program, call 800-468-9716 or visit this link.Today, the company is attractively valued. It has a price to earnings of 15.3, a price to book of 1.2, and five-year price to earnings growth of 2.5. With a decade of steady sales growth, this company is positioned to keep pushing out its dividend in nearly any situation. [Image](http://web.streetauthority.com/AH-sig2.gif) Anthony HaddadStaff WriterStreetAuthorityDisclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | High-Yielders with a Decade of Sales Growth | News | Street Authority | Unknown | 0.0005 | 8.40896 | 8.52645 | 8.52967 | 8.4491 | 8.44986 | 8.44986 | 8.44977 | 8.44986 | 8.44986 | 8.44986 | 8.44986 | 8.48329 | 8.52466 | 8.94724 | 9.04503 | 8.92321 | 8.73572 | 8.35497 |
AMTD | AMTD IDEA Group | Finance | Finance: Consumer Services | https://www.nasdaq.com/articles/next-catalyst-etrade-leaps-2009-11-18 | 2009-11-18 06:03:00 | Markets|SCHW|JPM|WFC | ** [Jason Schwarz](http://web.mac.com/jzapple) submits:**Now that the E*trade ([ETFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ETFC&selected=ETFC)) ) acquisition chatter has officially started, I have a few thoughts on the matter:1-The next major catalyst for ETFC is choosing a new CEO. This is one of the hottest jobs on Wall Street and should be in high demand. Whoever comes in will have free reign to get a deal done. There isn't anyone left at Etrade who cares about the company's history or who desperately wants it to remain as a stand alone. [Image](http://static.seekingalpha.com/uploads/2009/11/18/saupload_etfc.png) Current Etrade management appears to welcome a takeover. If Etrade brings in a CEO with experience in coordinating mergers and acquisitions that will be a very good sign. This really is a blockbuster opportunity for a CEO to sign on, get a chunk of stock options, and exit with $20 million worth of gains 6 months from now. 2-I still don't think TD Ameritrade ([AMTD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMTD&selected=AMTD)) ) is the ideal takeover. Because of the mortgage mess on E*trade's books, I see a larger bank being more suited to E*trade. Someone like Wells Fargo ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) ) or JP Morgan Chase ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) or even a regional bank that wants to make a splash in the brokerage business would be a tremendous fit. As a Wells Fargo customer myself, I would be ecstatic to see the E*trade platform become part of the service.3-Don't let the mortgage mess fool you. The E*trade platform is highly sought after. As one who has used TD and Schwab ([SCHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCHW&selected=SCHW)) ), the E*trade user experience is a breath of fresh air. E*trade is a major player in a quality industry.So what happens next? The acquisition chatter will heat up then it will stall as these things typically do. The key for the new CEO will be to try and get more than one bidder. Who knows, maybe even Citadel will join the bidding process to try and push the price up although recent comments from the hedge fund indicate they are looking to diversify away from large positions in single companies. Investors need to be patient, have a good time horizon, and let the game come to you.Option LEAPS alert: The November [www.economictiming.com](http://www.economictiming.com/) newsletter recommended owning the January 2011 $5 calls. This is a very high risk/high reward position. For those looking for something more secure, look to own the stock itself, or the January 2011 $2.5 strike, or even the April 2010 $1.50 strike. All represent great opportunities as we head into the new year. **Disclosure:**Long ETFCSee also [Traders Getting Bearish on Taiwan](http://seekingalpha.com/article/174163-traders-getting-bearish-on-taiwan?source=nasdaq) on seekingalpha.com | The Next Catalyst for E*Trade LEAPS | News | SeekingAlpha | Unknown | 0.0004 | 21.1552 | 21.0968 | 20.9079 | 21.255 | 21.255 | 21.255 | 21.255 | 21.255 | 21.0283 | 21.0037 | 21 | 21.1899 | 21.1474 | 20.9394 | 20.9293 | 20.9293 | 19.5314 | 18.3097 |
AMTD | AMTD IDEA Group | Finance | Finance: Consumer Services | https://www.nasdaq.com/articles/etrade-takeover-chatter-how-should-investor-respond-2009-11-19 | 2009-11-19 04:03:00 | Markets|SCHW|JPM|WFC | ** [Jason Schwarz](http://web.mac.com/jzapple) submits:**Now that the E*Trade ([ETFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ETFC&selected=ETFC)) ) acquisition chatter has officially started, I have a few thoughts on the matter1) The next major catalyst for ETFC is choosing a new CEO. This is one of the hottest jobs on Wall Street and should be in high demand. Whoever comes in will have free rein to get a deal done. There isn't anyone left at E*Trade who cares about the company's history or who desperately wants it to remain as a stand alone. [Image](http://static.seekingalpha.com/uploads/2009/11/18/saupload_etfc.png) Current E*Trade management appears to welcome a takeover. If E*Trade brings in a CEO with experience in coordinating mergers and acquisitions that will be a very good sign. This really is a blockbuster opportunity for a CEO to sign on, get a chunk of stock options, and exit with $20 million worth of gains 6 months from now. 2) I still don't think TD Ameritrade ([AMTD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMTD&selected=AMTD)) ) is the ideal takeover. Because of the mortgage mess on E*Trade's books, I see a larger bank being more suited to E*Trade. Someone like Wells Fargo ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) ) or JP Morgan Chase ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) or even a regional bank that wants to make a splash in the brokerage business would be a tremendous fit. As a Wells Fargo customer myself, I would be ecstatic to see the E*Trade platform become part of the service.3) Don't let the mortgage mess fool you. The E*Trade platform is highly sought after. As one who has used TD and Schwab ([SCHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCHW&selected=SCHW)) ), the E*Trade user experience is a breath of fresh air. E*Trade is a major player in a quality industry.So what happens next? The acquisition chatter will heat up, then it will stall as these things typically do. The key for the new CEO will be to try and get more than one bidder. Who knows, maybe even Citadel will join the bidding process to try and push the price up although recent comments from the hedge fund indicate they are looking to diversify away from large positions in single companies. Investors need to be patient, have a good time horizon, and let the game come to you.Option LEAPS alert: The November [www.economictiming.com](http://www.economictiming.com/) newsletter recommended owning the January 2011 $5 calls. This is a very high risk/high reward position. For those looking for something more secure, look to own the stock itself, or the January 2011 $2.5 strike, or even the April 2010 $1.50 strike. All represent great opportunities as we head into the new year. **Disclosure:**Long ETFCSee also [Odyssey RE: Inflation and Deflation Protection in One Investment](http://seekingalpha.com/article/176061-odyssey-re-inflation-and-deflation-protection-in-one-investment?source=nasdaq) on seekingalpha.com | E*Trade Takeover Chatter: How Should an Investor Respond? | News | SeekingAlpha | Unknown | 0.0003 | 21.1032 | 20.9079 | 21.2519 | 21.1358 | 21.1487 | 21.1382 | 21.1474 | 21.1474 | 21.1474 | 20.9311 | 20.93 | 21.1065 | 20.9394 | 20.9284 | 21.0191 | 21.0256 | 19.3698 | 18.26 |
DHC | Diversified Healthcare Trust | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/small-high-yielding-company-extremely-undervalued-2009-11-23 | 2009-11-23 02:02:00 | Unknown | Something's got to give. At a time when the aging of the U.S. population is beginning to accelerate, the construction pace of new housing and care facilities for seniors is shrinking.Between 2010 and 2020, the number of Americans 65 and older will grow +36%, compared with a growth rate of 9% for the general population, according to the U.S. Department of Health and Human Services. [Image](http://streetauthority.com/sites/default/files/images/over65-chart-ah1.gif) You'd think we'd be on the verge of a boom in Baby Boomer housing. Yet, construction in the seniors housing sector has nosedived in recent years due to a lack of financing for developers and continued recession-related economic pressures.In the year ended March 31, the number of such units started fell -37% from the previous year, and was down -45% from two years earlier. That, according to a report from the National Investment Center for the Seniors Housing & Care Industry and the American Seniors Housing Association. In fact, the two trade groups termed the amount of construction activity in seniors housing and care since 2000 as "modest" compared with the 1980s and 1990s.In this scenario, the law of supply and demand would seem to favor the supply side. Even if lenders were to start lending again and bulldozers were to start blazing, it would realistically take at least a couple years before the number of new available units would begin to come in line with a growing demand.Short of purchasing a long-term care facility or a medical office building on your own, one way to take advantage of this discrepancy is by buying shares in health care REITS, or real estate investment trusts that own health care properties.Healthcare REITs, like all REITs, have a huge tax advantage. They only pay taxes on earnings they do not pass on to their shareholders. And they must pay at least 90% of their earnings in dividends. This means that REITs often pay huge dividends, but there's a drawback. REITs are usually unable to finance expansion with their operating income, having passed the overwhelming majority on to shareholders. Instead, they have to issue debt and equity to grow. **Company (Ticker)****Market Cap****Yield****P/E****P/B****EPS****Cash****Debt** HCP([HCP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCP&selected=HCP)) )$8.6B6.2%35.51.5$0.48$144M$5.6BVentas ([VTR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VTR&selected=VTR)) )$6.6B4.9%30.72.6$1.82$71M$2.6BHealth Care REIT([HCN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCN&selected=HCN)) )$5.3B6.3%24.11.5$1.48$102M$2.4BNationwide Health Properties ([SNH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SNH&selected=SNH)) )$2.5B7.4%17.81.3$0.93$72M$984MOmega Healthcare Investors ([OHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OHI&selected=OHI)) )$1.5B6.6%20.12.2$0.90$0.7M$493MNational Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )$901M6.7%15.52.1$2.20$64M$1MMedical Properties Trust([MPW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MPW&selected=MPW)) )$759M8.5%22.51.1$0.39$13M$566MLTC Properties ([LTC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LTC&selected=LTC)) )$591M6.1%20.72.2$1.23$5M$11MUniversal Health Income Trust([UHT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UHT&selected=UHT)) )$371M7.6%20.92.7$1.10$2M$84MOne healthcare REIT that stands out: **National Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )** . NHI yields 6.7% and is cheap compared with its peers. It's also in a great cash and debt position, giving it plenty of room to grow. National Health Investors is one of just 125 profitable U.S. companies that over the past year have decreased their debt by more than -50% without increasing their number of shares outstanding. And it's the only one that has accomplished this financial feat that has a dividend yield of more than 6%. Its debt is now just $1.4 million -- about 2% of the cash it has on hand.This $900 million company purchases and leases health care real estate and makes mortgage loans to health care operators. Founded in 1991, the company now has 130 health care facilities in 18 states. These facilities are predominantly long-term care facilities and assisted living facilities, but include residential projects for the developmentally disabled, medical office buildings, retirement centers, and a hospital.The company currently pays a $0.55 per quarter dividend, totaling $2.20 per year, for a dividend yield of 6.7%. In December, the company also pays a variable cash dividend. Last year, the variable dividend was $0.14, pushing its historical yield to 7.2%.For the third quarter ended Sept. 30, 2009, National Health Investors saw revenues of $19.6 million, up +26% from the same period last year. The bulk of this gain came from rental income, while its income from mortgage interest gained only slightly. Net income for the quarter was up about 10%.Not only has National Health Investors been putting up great numbers, very few have noticed. Its price to earnings ratio is still a measly 15.7. That's a full ten points below its peer average of 26.0. And the company's forward price to earnings ratio is an even lower 12.8. On a price to book basis, it's also reasonably valued at 2.1. During the past year, National Health Investors has paid off 85% of its debt, which now totals just $1.4 million. It did this without issuing new shares. This puts the company in a great position to acquire new properties going forward. It also has an excellent cash position with about $64.0 million at the end of the Sept. 30 quarter.National Health Investors last week announced it spent $28.25 million on five assisted living facilities from Bickford Senior Living, which is also leasing the properties back from National Health Investors for the next 15 years. The company said that this investment will return a double-digit yield during the life of the lease.This is the best healthcare REIT out there. It's undervalued and underappreciated. For the price, it's an absolute steal. If it keeps posting outstanding results, it won't be for long. [Image](http://web.streetauthority.com/AH-sig2.gif) Anthony HaddadStaff WriterStreetAuthorityDisclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | This Small, High-Yielding Company is Extremely Undervalued | News | Street Authority | Unknown | 0.0005 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
LTC | LTC Properties, Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/small-high-yielding-company-extremely-undervalued-2009-11-23 | 2009-11-23 02:02:00 | NHI|Markets|CSA|OHI|HCP|MPW|DHC|HR|VTR|UHT | Something's got to give. At a time when the aging of the U.S. population is beginning to accelerate, the construction pace of new housing and care facilities for seniors is shrinking.Between 2010 and 2020, the number of Americans 65 and older will grow +36%, compared with a growth rate of 9% for the general population, according to the U.S. Department of Health and Human Services. [Image](http://streetauthority.com/sites/default/files/images/over65-chart-ah1.gif) You'd think we'd be on the verge of a boom in Baby Boomer housing. Yet, construction in the seniors housing sector has nosedived in recent years due to a lack of financing for developers and continued recession-related economic pressures.In the year ended March 31, the number of such units started fell -37% from the previous year, and was down -45% from two years earlier. That, according to a report from the National Investment Center for the Seniors Housing & Care Industry and the American Seniors Housing Association. In fact, the two trade groups termed the amount of construction activity in seniors housing and care since 2000 as "modest" compared with the 1980s and 1990s.In this scenario, the law of supply and demand would seem to favor the supply side. Even if lenders were to start lending again and bulldozers were to start blazing, it would realistically take at least a couple years before the number of new available units would begin to come in line with a growing demand.Short of purchasing a long-term care facility or a medical office building on your own, one way to take advantage of this discrepancy is by buying shares in health care REITS, or real estate investment trusts that own health care properties.Healthcare REITs, like all REITs, have a huge tax advantage. They only pay taxes on earnings they do not pass on to their shareholders. And they must pay at least 90% of their earnings in dividends. This means that REITs often pay huge dividends, but there's a drawback. REITs are usually unable to finance expansion with their operating income, having passed the overwhelming majority on to shareholders. Instead, they have to issue debt and equity to grow. **Company (Ticker)****Market Cap****Yield****P/E****P/B****EPS****Cash****Debt** HCP([HCP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCP&selected=HCP)) )$8.6B6.2%35.51.5$0.48$144M$5.6BVentas ([VTR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VTR&selected=VTR)) )$6.6B4.9%30.72.6$1.82$71M$2.6BHealth Care REIT([HCN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCN&selected=HCN)) )$5.3B6.3%24.11.5$1.48$102M$2.4BNationwide Health Properties ([SNH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SNH&selected=SNH)) )$2.5B7.4%17.81.3$0.93$72M$984MOmega Healthcare Investors ([OHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OHI&selected=OHI)) )$1.5B6.6%20.12.2$0.90$0.7M$493MNational Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )$901M6.7%15.52.1$2.20$64M$1MMedical Properties Trust([MPW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MPW&selected=MPW)) )$759M8.5%22.51.1$0.39$13M$566MLTC Properties ([LTC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LTC&selected=LTC)) )$591M6.1%20.72.2$1.23$5M$11MUniversal Health Income Trust([UHT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UHT&selected=UHT)) )$371M7.6%20.92.7$1.10$2M$84MOne healthcare REIT that stands out: **National Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )** . NHI yields 6.7% and is cheap compared with its peers. It's also in a great cash and debt position, giving it plenty of room to grow. National Health Investors is one of just 125 profitable U.S. companies that over the past year have decreased their debt by more than -50% without increasing their number of shares outstanding. And it's the only one that has accomplished this financial feat that has a dividend yield of more than 6%. Its debt is now just $1.4 million -- about 2% of the cash it has on hand.This $900 million company purchases and leases health care real estate and makes mortgage loans to health care operators. Founded in 1991, the company now has 130 health care facilities in 18 states. These facilities are predominantly long-term care facilities and assisted living facilities, but include residential projects for the developmentally disabled, medical office buildings, retirement centers, and a hospital.The company currently pays a $0.55 per quarter dividend, totaling $2.20 per year, for a dividend yield of 6.7%. In December, the company also pays a variable cash dividend. Last year, the variable dividend was $0.14, pushing its historical yield to 7.2%.For the third quarter ended Sept. 30, 2009, National Health Investors saw revenues of $19.6 million, up +26% from the same period last year. The bulk of this gain came from rental income, while its income from mortgage interest gained only slightly. Net income for the quarter was up about 10%.Not only has National Health Investors been putting up great numbers, very few have noticed. Its price to earnings ratio is still a measly 15.7. That's a full ten points below its peer average of 26.0. And the company's forward price to earnings ratio is an even lower 12.8. On a price to book basis, it's also reasonably valued at 2.1. During the past year, National Health Investors has paid off 85% of its debt, which now totals just $1.4 million. It did this without issuing new shares. This puts the company in a great position to acquire new properties going forward. It also has an excellent cash position with about $64.0 million at the end of the Sept. 30 quarter.National Health Investors last week announced it spent $28.25 million on five assisted living facilities from Bickford Senior Living, which is also leasing the properties back from National Health Investors for the next 15 years. The company said that this investment will return a double-digit yield during the life of the lease.This is the best healthcare REIT out there. It's undervalued and underappreciated. For the price, it's an absolute steal. If it keeps posting outstanding results, it won't be for long. [Image](http://web.streetauthority.com/AH-sig2.gif) Anthony HaddadStaff WriterStreetAuthorityDisclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | This Small, High-Yielding Company is Extremely Undervalued | News | Street Authority | Unknown | 0.0005 | 25.7342 | 27.583 | 25.8012 | 26.8219 | 26.8219 | 26.8219 | 26.8219 | 26.8219 | 26.8219 | 26.8219 | 25.9959 | 25.9626 | 25.8905 | 26.0351 | 24.7648 | 25.2177 | 27.4153 | 27.5045 |
UHT | Universal Health Realty Income Trust | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/small-high-yielding-company-extremely-undervalued-2009-11-23 | 2009-11-23 02:02:00 | NHI|Markets|CSA|OHI|HCP|LTC|MPW|DHC|HR|VTR | Something's got to give. At a time when the aging of the U.S. population is beginning to accelerate, the construction pace of new housing and care facilities for seniors is shrinking.Between 2010 and 2020, the number of Americans 65 and older will grow +36%, compared with a growth rate of 9% for the general population, according to the U.S. Department of Health and Human Services. [Image](http://streetauthority.com/sites/default/files/images/over65-chart-ah1.gif) You'd think we'd be on the verge of a boom in Baby Boomer housing. Yet, construction in the seniors housing sector has nosedived in recent years due to a lack of financing for developers and continued recession-related economic pressures.In the year ended March 31, the number of such units started fell -37% from the previous year, and was down -45% from two years earlier. That, according to a report from the National Investment Center for the Seniors Housing & Care Industry and the American Seniors Housing Association. In fact, the two trade groups termed the amount of construction activity in seniors housing and care since 2000 as "modest" compared with the 1980s and 1990s.In this scenario, the law of supply and demand would seem to favor the supply side. Even if lenders were to start lending again and bulldozers were to start blazing, it would realistically take at least a couple years before the number of new available units would begin to come in line with a growing demand.Short of purchasing a long-term care facility or a medical office building on your own, one way to take advantage of this discrepancy is by buying shares in health care REITS, or real estate investment trusts that own health care properties.Healthcare REITs, like all REITs, have a huge tax advantage. They only pay taxes on earnings they do not pass on to their shareholders. And they must pay at least 90% of their earnings in dividends. This means that REITs often pay huge dividends, but there's a drawback. REITs are usually unable to finance expansion with their operating income, having passed the overwhelming majority on to shareholders. Instead, they have to issue debt and equity to grow. **Company (Ticker)****Market Cap****Yield****P/E****P/B****EPS****Cash****Debt** HCP([HCP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCP&selected=HCP)) )$8.6B6.2%35.51.5$0.48$144M$5.6BVentas ([VTR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VTR&selected=VTR)) )$6.6B4.9%30.72.6$1.82$71M$2.6BHealth Care REIT([HCN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HCN&selected=HCN)) )$5.3B6.3%24.11.5$1.48$102M$2.4BNationwide Health Properties ([SNH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SNH&selected=SNH)) )$2.5B7.4%17.81.3$0.93$72M$984MOmega Healthcare Investors ([OHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OHI&selected=OHI)) )$1.5B6.6%20.12.2$0.90$0.7M$493MNational Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )$901M6.7%15.52.1$2.20$64M$1MMedical Properties Trust([MPW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MPW&selected=MPW)) )$759M8.5%22.51.1$0.39$13M$566MLTC Properties ([LTC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LTC&selected=LTC)) )$591M6.1%20.72.2$1.23$5M$11MUniversal Health Income Trust([UHT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UHT&selected=UHT)) )$371M7.6%20.92.7$1.10$2M$84MOne healthcare REIT that stands out: **National Health Investors ([NHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NHI&selected=NHI)) )** . NHI yields 6.7% and is cheap compared with its peers. It's also in a great cash and debt position, giving it plenty of room to grow. National Health Investors is one of just 125 profitable U.S. companies that over the past year have decreased their debt by more than -50% without increasing their number of shares outstanding. And it's the only one that has accomplished this financial feat that has a dividend yield of more than 6%. Its debt is now just $1.4 million -- about 2% of the cash it has on hand.This $900 million company purchases and leases health care real estate and makes mortgage loans to health care operators. Founded in 1991, the company now has 130 health care facilities in 18 states. These facilities are predominantly long-term care facilities and assisted living facilities, but include residential projects for the developmentally disabled, medical office buildings, retirement centers, and a hospital.The company currently pays a $0.55 per quarter dividend, totaling $2.20 per year, for a dividend yield of 6.7%. In December, the company also pays a variable cash dividend. Last year, the variable dividend was $0.14, pushing its historical yield to 7.2%.For the third quarter ended Sept. 30, 2009, National Health Investors saw revenues of $19.6 million, up +26% from the same period last year. The bulk of this gain came from rental income, while its income from mortgage interest gained only slightly. Net income for the quarter was up about 10%.Not only has National Health Investors been putting up great numbers, very few have noticed. Its price to earnings ratio is still a measly 15.7. That's a full ten points below its peer average of 26.0. And the company's forward price to earnings ratio is an even lower 12.8. On a price to book basis, it's also reasonably valued at 2.1. During the past year, National Health Investors has paid off 85% of its debt, which now totals just $1.4 million. It did this without issuing new shares. This puts the company in a great position to acquire new properties going forward. It also has an excellent cash position with about $64.0 million at the end of the Sept. 30 quarter.National Health Investors last week announced it spent $28.25 million on five assisted living facilities from Bickford Senior Living, which is also leasing the properties back from National Health Investors for the next 15 years. The company said that this investment will return a double-digit yield during the life of the lease.This is the best healthcare REIT out there. It's undervalued and underappreciated. For the price, it's an absolute steal. If it keeps posting outstanding results, it won't be for long. [Image](http://web.streetauthority.com/AH-sig2.gif) Anthony HaddadStaff WriterStreetAuthorityDisclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | This Small, High-Yielding Company is Extremely Undervalued | News | Street Authority | Unknown | 0.0005 | 31.5673 | 31.5002 | 31.5309 | 31.5404 | 31.5404 | 31.5404 | 31.5404 | 31.5404 | 31.5404 | 31.5404 | 31.7928 | 31.6227 | 31.4307 | 31.7613 | 31.3322 | 30.9355 | 31.2402 | 30.9822 |
GCI | Gannett Co., Inc. | Consumer Discretionary | Newspapers/Magazines | https://www.nasdaq.com/articles/tortoise-and-hare-2009-12-01 | 2009-12-01 02:03:00 | CAAPX|Markets|JWN|ACN | No matter how many times you reread Aesop's famous fable, the plodding patience of the tortoise always bests the hare. That's why when John W. Rogers Jr. founded Ariel Investments he decided the tortoise was the most emblematic of his methodical and slightly contrarian approach to long-term investing. **Ariel Appreciation** ([CAAPX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CAAPX&selected=CAAPX)) ) is celebrating its 20th anniversary this year, but when we sat down with John and new portfolio manager Timothy Fidler, the two focused on their investment strategy and favorite themes--not the fund's track record of success. **The fund's amassed an impressive track record since its inception. What's the secret to your success?** **John:** We are a value-oriented firm that has always focused on buying companies when they're out of favor. For patient investors with a long time horizon, it pays to invest in the small and midsized companies that the market kind of hates.What differentiates us from other value funds is that we concentrate on a few industries and relatively few names. We believe what Charlie Munger talks about every year at Berkshire Hathaway's (NYSE: BRK.A) annual meeting; you want to stay within your circle of competence and become an expert in the industries and companies that populate your portfolio.We often buy stocks when something isn't quite right at a company--for example, it faces a temporary problem or a subsidiary causes trouble--but we think it will ultimately overcome these hurdles and become a higher-quality name. We're willing to look out two to three years and bet that once things get back to normal these companies will be able to outperform. **Tim:** We're patient investors who expect to own stocks for three to five years. Over that period, management can have an enormous effect on the direction and value of a business. We spend an enormous amount of time getting to know each company's management team and sizing up whether they're good stewards of shareholder's capital. ******This approach has led you to some out-of-favor industries, such as media and commercial real estate. What's the logic behind these moves?** **John:** Last year was the opportunity of a lifetime for value-oriented investors, though buying stocks at low prices didn't work for a bit. You'd buy a stock, and it would go down; you'd buy more, and it got cheaper still. Credit markets froze, so any names with debt burdens got clobbered. And forced selling by hedge funds created drama when there really wasn't any, so what was an $18 stock plummeted to $3. The market abandoned rationality.Last March we became more aggressive in our purchases because we knew the economy would recover and wanted to add the names within our circle of competence that stood to benefit. We picked up some great stocks that we never thought would sink to bargain levels--for example, media giant **CBS Corp** ([CBS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBS&selected=CBS)) ) and high-end retailer **Nordstrom** ([JWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JWN&selected=JWN)) ).In times of crisis focusing on your core competencies is essential to making good decisions; if you lack conviction, you're more likely to be paralyzed by indecision. Because we knew our stories well, we were willing to buy when panic reigned. **But media companies are struggling, regardless of the recovery. How does that sector fit into your thinking on quality?****John:** We spend a lot of time with **Gannett's** ([GCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GCI&selected=GCI)) ) management and believe in what they're doing. But that business doesn't have to return to its glory days. If it attracts a fair share of advertising revenue as the economy recovers, aggressive cost reductions and lower newsprint prices will enable Gannett's earnings to surprise on the upside. Analysts have been negative on the sector for so long and aren't factoring in the benefits that will accrue from any improvement in the economy. Already a lot of the big retailers are advertising more aggressively on TV and in print. These days when I pick up my newspaper I see much more advertising. We're hearing that advertising rates are improving not only from newspapers but also from several media companies that we talk to.Buying quality stocks when there's maximum pessimism has always made sense because once everyone gives up on a stock, groupthink takes over and share prices sink lower than they should--people lose sight of a possible recovery. **Do you have any favorite stocks?****John:** CBS Corp is one of my favorites. The media giant should benefit from the economy's inevitable recovery and an uptick in advertising. General Motors' CEO is selling cars on TV, next year is an election year and advertising prices are on the mend. There's a lot of positive momentum building, and companies will pay to put their products in front of the eyeballs that watch highly rated CBS shows like CSI, Survivor and The Amazing Race.And investors often forget about CBS' other businesses--for example, King World Productions, which distributes Oprah, Wheel of Fortune and Jeopardy. I often joke that I'm the only fund manager who's been able to perform due diligence on two of these shows; I was a contestant on Wheel of Fortune in my youth, and I've appeared on Oprah several times. Showtime Networks is another important CBS franchise. And CBS operates 137 radio stations, boasts a valuable programming library and is one of the largest billboard owners in the US. The company also has a lot of exciting Internet opportunities on the horizon. CBS is one name that we're going to stick with for the long run. **Tim: Hewitt Associates** ([HEW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HEW&selected=HEW)) ) is the world's leading outsourcer and human resources firm; it's been around since 1940 and has a tremendous brand. The firm generates a high level of recurring revenue thanks to a client retention rate that exceeds 90 percent. And half of the Fortune 500 companies do business with Hewitt. Nevertheless, the market soured on the company because its business process outsourcing operations--a small-scale business--was losing money in a dramatic way. Negative sentiment brought the stock from the mid-$30s to the teens, at which point we decided to make our move. If you look at the value of the consulting business, which only has three other competitors and a well-established market share, and then look at its outsourcing business, which had some pretty big competitors walk away from the market, you got the sense that the market had overreacted to a fixable problem in one business line.We scrutinized the company's balance sheet and found that Hewitt was one of the few names that had a net cash position and was actively buying back shares. Operating a consulting firm isn't capital intensive, so the business generated high returns on capital and high margins.We've owned shares of **Accenture** ([ACN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ACN&selected=ACN)) ) for almost 10 years, and I've covered the consulting space throughout my tenure at Ariel; when we took out our stake in Hewitt, we felt confident in our appraisal of where the company would be in the next five years.And from a valuation perspective, Hewitt's shares trade at 10 times free cash flow and 13 times earnings. Right now the stock's above $41, and we rate its value somewhere in the mid-$50s. Not only is it cheap on a trading basis, but if you look at the assets and what acquiring firms have been willing to pay for similar businesses, you get a stock price that's well into the $50s. **What's your best advice for individual investors?****John:** Stay the course. There's a lot of skepticism about this rally, and I think people are tempted take profits and err on the side of caution. But I believe that this economic recovery is going to be much stronger than people anticipate, and the upside for a lot of the names that are tied to the recovery is much higher than people expect. Now's the time to stick with equities for the long run. [Image](http://kr.nlh1.com/images/200912/ariel_p5.gif) Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | The Tortoise and the Hare | News | Investing Daily | Unknown | 0.0009 | 10.3239 | 10.331 | 10.3287 | 9.94229 | 9.94091 | 9.94091 | 9.94223 | 9.94229 | 9.94091 | 9.94091 | 9.8227 | 10.1418 | 9.99598 | 9.96148 | 10.1621 | 10.23 | 14.2 | 14.99 |
ODC | Oil-Dri Corporation of America | Consumer Discretionary | Miscellaneous manufacturing industries | https://www.nasdaq.com/articles/more-meets-eye-2009-12-14 | 2009-12-14 07:00:00 | ICMAX|Markets|WSFL|STZ|TDW | Many investors regard small-cap stocks as highly volatile growth plays, but this broad category is far more variegated than this stereotype would suggest. We recently spoke with Eric Cinnamond, manager ofIntrepid Small Cap ([ICMAX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ICMAX&selected=ICMAX)) ), whose stock-picking acumen propelled the fund to the top of Morningstar's Small Value category in 2007 and 2008. Here Eric discusses his investment strategy and the dangers of judging a small-cap stock by its classification. **What's your strategy when it comes to equities selection?**We take a bottom-up approach to investing that emphasizes fundamental analysis and valuation work, but we don't use sell-side research. We focus on absolute returns and don't worry about benchmarks and sector weights, which makes us a bit more flexible than the typical fund and allows us to gravitate to whatever names offer value. We evaluate stocks by discounting free cash flow, though we value the assets of energy firms, financial companies and other asset-heavy businesses. We tend to focus on established companies that generate a lot of cash and have weathered a lot of economic cycles, qualities that enable us to have a high degree of confidence in our valuations. We find that if you keep the ball on the fairway you tend to do much better than swinging for the fences; we don't hit a lot of homeruns, but we also don't strike out a lot.We generate our returns through a thoughtful, slow-and-steady type of investment strategy that isn't overly complicated--though it can be hard to stick to, especially during speculative periods. Back in 2007 leveraged-buyout firms were paying outrageous prices for mundane businesses, extrapolating crazy earnings growth or extremely low financial costs over a long period. Of course, that approach backfired in late 2008. **Speaking of hysteria, there was a huge run in small-cap stocks through much of 2009. What drove that?**Small-cap stocks traded at incredibly low values in March 2009, when the Russell 3000 sank to roughly 350 from a peak of 850. At that time, we found a boatload of good values because many investors acted as though the economy were dead and would never to operate again. Given the degree of overreaction on the downside, a lot of the rebound struck us as quite rational--a return to fair value. Today small-cap stocks trade at fair value, though some segments may be slightly overvalued. We're still finding opportunities, but it's definitely not as easy as it was.I think speculation is definitely the culprit if stock prices head 20 to 30 percent higher from current levels. Market cycles are so compressed, and memories are getting shorter and shorter--you had the tech bubble, the housing bubble and oil at USD140--so I wouldn't rule out another speculative period. And I think investors are almost conditioned to expect another bubble; given the prevalence of the word these days, it's seemingly a permanent feature of the new landscape. Although the stocks that we choose to include in our portfolio are a big part of the fund's success, it's important to remember that selectivity also implies avoiding certain stocks or industries.We steered clear of banks and didn't have any energy or cyclical companies in mid-2008, when that group was in vogue. Then energy names made up almost 23 percent of the portfolio at one point in late 2008; we had moved into cyclical names because those were getting hit the hardest and that's where we were finding value. Uncharacteristically, we also found value in companies with debt--a quality we typically avoid. These were ideas we usually wouldn't pursue, but the discounts were so large we thought the potential upside was worthwhile.That being said, when we buy energy companies or stocks issued by companies with debt, we never take on operating and financial risk at the same time.We built a stake in an energy company called **Tidewater** ([TDW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDW&selected=TDW)) ), which has no debt net of cash. This limited financial risk was offset by operating risk; Tidewater's business is relatively volatile, and its stream of cash flow can range between USD2 and USD8.On the other side, we bought **Constellation Brands** ([STZ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STZ&selected=STZ)) ), the market leader in wine. Constellation has some debt exposure, but US wine consumption is growing 2 to 3 percent per year. In this instance, the financial risk is offset by the steady nature of the company's business. Higher-risk cyclical names have rallied the most this year, and we've recently sold those that hit our valuation targets. Our most recent ideas have been in line with our long-term strategy of investing in companies that boast a strong balance sheet, generate ample free cash flow and operate in relatively stable end markets--boring stuff, but it works. **Your portfolio features a lot stocks that are typically classified as early-cycle investments. What's your take on the recovery and its sustainability?**A lot of small caps are in unique industries and don't really fit neatly into a classification scheme. One of the stocks we own is **Oil-Dri Corp of America** ([ODC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ODC&selected=ODC)) ), which falls into the consumer discretionary or industrial category. One could also argue that it's a mining company. The firm mines clay, dries it, and then processes it into cat litter. To me, that's a consumer staple. I have a cat and, believe me, you have to buy cat litter; you will not like the results if you replace it with paper litter. **PetSmart** ([PETM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PETM&selected=PETM)) ) is one discretionary name that continues to generate quite a bit of cash. It's slowed its growth from 100 stores a year to 40 stores, transforming itself into a cash cow rather than a growth company. But the specialty retailer's comparable sales have remained positive--hardly what one would expect from a consumer-discretionary name.Another example is **Core-Mark Holding Company** ([CORE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CORE&selected=CORE)) ), the second-largest distributor to convenience stores. Over the past 10 years it has grown sales to convenience stores over 7 percent annually. Nevertheless, it's often categorized as a transportation company--even though it lacks the high capital expenditures and volatile day rates and utilization that are part and parcel to that business segment. It's not as risky as the transportation label would suggest. Our investments in the energy patch are another case where there's more than meets the eye. Because we focus on companies with the strongest balance sheets, our holdings are less volatile than other names with levered balance sheets. Regardless of where we are in the economic cycle, Tidewater will continue its steady performance and its long-lived assets will only increase in value. We always lean toward lower-risk plays, but sometimes an industry pie chart doesn't capture that lower risk portfolio.Because of our efforts to limit risk while generating total returns, the fund has posted a negative annual return on only one occasion: The market turmoil of 2008 resulted in a 7 percent loss. Of course, this approach also limits our upside. If the markets were to go up 20 to 30 percent, I would expect our fund to lag. However, thus far in 2009 we've outperformed, which is unusual for us; because so many high-quality names traded at a discount, we were more aggressive than usual in our investments. **The fund is still extremely light on banks. Is there just not any value there?**I recently bought my first bank stock in about five years when I added **Washington Federal** ([WSFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSFL&selected=WSFL)) ). It's got no subprime exposure and had equity to assets of around 15 percentDespite having loads of capital, they participated in the Treasury Dept's Troubled Asset Relief Program to establish their strength; once management realized that participation in the bailout wasn't necessarily a sign of health, the bank quickly repaid the government. Washington Federal was one of the first banks to tell the truth about its book of business, quickly classifying loans as nonperforming. This high number of nonperforming loans has declined fairly quickly. The banks I'm skeptical of are the ones with low loan losses and low loan-loss provisions; I just don't believe them. The banks are so hard to value because they lump so many assets under one category that it's really hard to decipher the quality of their books. ******What's your best advice for investors over the next year?**Be careful, the time to take risk was 6 to twelve months ago. Patience is the most important virtue for successful investors. [Image](http://kr.nlh1.com/images/201001/intrepid_p5.gif) Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | More Than Meets the Eye | News | Investing Daily | Unknown | 0.0002 | 15.4004 | 15.3625 | 15.4311 | 15.4267 | 15.4267 | 15.4267 | 15.4267 | 15.4267 | 15.3927 | 15.4523 | 15.5147 | 15.8117 | 15.8318 | 15.4562 | 15.4042 | 15.4667 | 15.5062 | 16.145 |
GCI | Gannett Co., Inc. | Consumer Discretionary | Newspapers/Magazines | https://www.nasdaq.com/articles/tortoise-and-hare-2009-12-22 | 2009-12-22 07:00:00 | CAAPX|Markets|JWN|ACN | **Ariel Appreciation** ([CAAPX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CAAPX&selected=CAAPX)) ) is celebrating its 20th anniversary this year, but when we sat down with John and new portfolio manager Timothy Fidler, the two focused on their investment strategy and favorite themes--not the fund's track record of success. **The fund's amassed an impressive track record since its inception. What's the secret to your success?** **John:** We are a value-oriented firm that has always focused on buying companies when they're out of favor. For patient investors with a long time horizon, it pays to invest in the small and midsized companies that the market kind of hates.What differentiates us from other value funds is that we concentrate on a few industries and relatively few names. We believe what Charlie Munger talks about every year at Berkshire Hathaway's (NYSE: BRK.A) annual meeting; you want to stay within your circle of competence and become an expert in the industries and companies that populate your portfolio.We often buy stocks when something isn't quite right at a company--for example, it faces a temporary problem or a subsidiary causes trouble--but we think it will ultimately overcome these hurdles and become a higher-quality name. We're willing to look out two to three years and bet that once things get back to normal these companies will be able to outperform. **Tim:** We're patient investors who expect to own stocks for three to five years. Over that period, management can have an enormous effect on the direction and value of a business. We spend an enormous amount of time getting to know each company's management team and sizing up whether they're good stewards of shareholder's capital. ******This approach has led you to some out-of-favor industries, such as media and commercial real estate. What's the logic behind these moves?** **John:** Last year was the opportunity of a lifetime for value-oriented investors, though buying stocks at low prices didn't work for a bit. You'd buy a stock, and it would go down; you'd buy more, and it got cheaper still. Credit markets froze, so any names with debt burdens got clobbered. And forced selling by hedge funds created drama when there really wasn't any, so what was an $18 stock plummeted to $3. The market abandoned rationality.Last March we became more aggressive in our purchases because we knew the economy would recover and wanted to add the names within our circle of competence that stood to benefit. We picked up some great stocks that we never thought would sink to bargain levels--for example, media giant **CBS Corp** ([CBS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBS&selected=CBS)) ) and high-end retailer **Nordstrom** ([JWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JWN&selected=JWN)) ).In times of crisis focusing on your core competencies is essential to making good decisions; if you lack conviction, you're more likely to be paralyzed by indecision. Because we knew our stories well, we were willing to buy when panic reigned. **But media companies are struggling, regardless of the recovery. How does that sector fit into your thinking on quality?****John:** We spend a lot of time with **Gannett's** ([GCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GCI&selected=GCI)) ) management and believe in what they're doing. But that business doesn't have to return to its glory days. If it attracts a fair share of advertising revenue as the economy recovers, aggressive cost reductions and lower newsprint prices will enable Gannett's earnings to surprise on the upside. Analysts have been negative on the sector for so long and aren't factoring in the benefits that will accrue from any improvement in the economy. Already a lot of the big retailers are advertising more aggressively on TV and in print. These days when I pick up my newspaper I see much more advertising. We're hearing that advertising rates are improving not only from newspapers but also from several media companies that we talk to.Buying quality stocks when there's maximum pessimism has always made sense because once everyone gives up on a stock, groupthink takes over and share prices sink lower than they should--people lose sight of a possible recovery. **Do you have any favorite stocks?****John:** CBS Corp is one of my favorites. The media giant should benefit from the economy's inevitable recovery and an uptick in advertising. General Motors' CEO is selling cars on TV, next year is an election year and advertising prices are on the mend. There's a lot of positive momentum building, and companies will pay to put their products in front of the eyeballs that watch highly rated CBS shows like CSI, Survivor and The Amazing Race.And investors often forget about CBS' other businesses--for example, King World Productions, which distributes Oprah, Wheel of Fortune and Jeopardy. I often joke that I'm the only fund manager who's been able to perform due diligence on two of these shows; I was a contestant on Wheel of Fortune in my youth, and I've appeared on Oprah several times. Showtime Networks is another important CBS franchise. And CBS operates 137 radio stations, boasts a valuable programming library and is one of the largest billboard owners in the US. The company also has a lot of exciting Internet opportunities on the horizon. CBS is one name that we're going to stick with for the long run. **Tim: Hewitt Associates** ([HEW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HEW&selected=HEW)) ) is the world's leading outsourcer and human resources firm; it's been around since 1940 and has a tremendous brand. The firm generates a high level of recurring revenue thanks to a client retention rate that exceeds 90 percent. And half of the Fortune 500 companies do business with Hewitt. Nevertheless, the market soured on the company because its business process outsourcing operations--a small-scale business--was losing money in a dramatic way. Negative sentiment brought the stock from the mid-$30s to the teens, at which point we decided to make our move. If you look at the value of the consulting business, which only has three other competitors and a well-established market share, and then look at its outsourcing business, which had some pretty big competitors walk away from the market, you got the sense that the market had overreacted to a fixable problem in one business line.We scrutinized the company's balance sheet and found that Hewitt was one of the few names that had a net cash position and was actively buying back shares. Operating a consulting firm isn't capital intensive, so the business generated high returns on capital and high margins.We've owned shares of **Accenture** ([ACN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ACN&selected=ACN)) ) for almost 10 years, and I've covered the consulting space throughout my tenure at Ariel; when we took out our stake in Hewitt, we felt confident in our appraisal of where the company would be in the next five years.And from a valuation perspective, Hewitt's shares trade at 10 times free cash flow and 13 times earnings. Right now the stock's above $41, and we rate its value somewhere in the mid-$50s. Not only is it cheap on a trading basis, but if you look at the assets and what acquiring firms have been willing to pay for similar businesses, you get a stock price that's well into the $50s. **What's your best advice for individual investors?****John:** Stay the course. There's a lot of skepticism about this rally, and I think people are tempted take profits and err on the side of caution. But I believe that this economic recovery is going to be much stronger than people anticipate, and the upside for a lot of the names that are tied to the recovery is much higher than people expect. Now's the time to stick with equities for the long run. This article first appeared in the December 2009 issue of [Louis Rukeyser's Mutual Funds](http://www.rukeyser.com/newsletter_online/newsletters.asp). LRMF Editor Benjamin Shepherd is also associate editor of PF . Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | The Tortoise and the Hare | News | Investing Daily | Unknown | 0.0001 | 14.2485 | 14.0744 | 14.074 | 13.921 | 13.921 | 13.921 | 13.921 | 13.921 | 13.8972 | 14.0101 | 14.24 | 14.3716 | 14.6411 | 15.5316 | 15.7552 | 15.7552 | 16.1607 | 15.9571 |
DO | Diamond Offshore Drilling, Inc. | Unknown | Unknown | https://www.nasdaq.com/articles/ten-stocks-gains-ages-2009-12-31 | 2009-12-31 05:38:00 | GS|Markets|F|GOOG|AXP|FCX|AAPL|THC | When 2008 ended with a -37.0% loss in the S&P 500, investors didn't have a lot of good news to share.But 2009, happily, proved to be a comeback year, with the benchmark index gaining +23.5% and many stocks gaining much more than that. The highlights of the year that closed the millennium's first decade are a guy named Madoff, the $787 billion stimulus package and a rebound off the worst lows many of us are likely to see in a lifetime. Amid the tumult, these ten companies inked remarkable gains. Here's a look at what they did right, what's next, and if these companies belong in your portfolio in the New Year:**Tenet Health Care ([THC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=THC&selected=THC)) )** - 2009 Performance +368.7% (2008: -77.4%) What Went Right: Hospital operator Tenet managed a decent turnaround with two strong quarters, which was good enough news to allow its shares to pick up some lost ground after the company was caught in the credit crunch. Tenet began to pick up ground with the rest of the sector as the health-care bill took shape. Hospitals, for their part, eat a tremendous amount of losses when uninsured patients stiff them for treatment, and any steps to bolster Americans' health coverage is likely to add directly to their bottom lines.What's Next: The health care bill has passed the House and the Senate and the differences still need to be ironed out.Verdict: Tenet made it through a rough patch and deserves some applause for its performance, but its shares are fairly valued. Investors who buy these shares now are likely to be disappointed. **Apple (Nasdaq: AAPL)** - 2009 Performance: +126.0% (2008: -56.9%) What Went Right: Everything. The year started with concerns about CEO Steve Jobs' health. He took a medical leave and announced after the fact that he'd had a successful liver transplant. His absence didn't seem to hurt anything: Mac sales totaled $13.8 billion in the fiscal year ended Oct. 31, with iPod sales totaling $8.1 billion and the iPhone bringing in $6.8 billion. Apple sold $4.0 billion worth of music and $2.4 billion worth of software -- or, as they are called these days, "apps."What's Next: The tech community expects a new product. Apple has secured an event space in Australia suitable for a product launch and has bought the domain name iSlate.com. Amid rampant rumors, the notoriously secretive company isn't saying a word. Shares are near an all-time high.Verdict: Apple is expected to earn $7.91 a share in its 2010 fiscal year, though analysts always underestimate. At its current level of valuation, shares likely have somewhere in the neighborhood of +25% upside, though a new product would render those forecasts moot. All in all, Apple is likely to continue to grow its user base with its elegant must-have gadgets and continue to command a heady valuation. It's a buy. **Ford Motor Co. ([F](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=F&selected=F)) )** - 2009 Performance: +335.4% (2008: -66.0%) What Went Right: In Ford's case, the question isn't so much what went right as it is what didn't go wrong. As General Motors and Chrysler failed and even Toyota foundered, Ford hung in. It had already begun to focus on its core business, offloading the nonessential brands like Aston-Martin, Volvo, Jaguar and Land Rover that it bought during the Jacques Nasser era. Ford posted some losses but it didn't take a dime from the feds and was never anywhere near bankruptcy court. Shareholders who bought while investors ran for the exits did extremely well: It was possible to earn a +500% return with these shares in 2009.What's Next: Ford's highly excellent CEO Alan Mullaly is presiding over an automaker that's building cars people can afford and want to drive. It's also on track to deliver cutting-edge lithium-in battery technology to help electric cars transition into the mainstream. Any market share that it's picked up could be short lived: GM is coming back stronger than ever, and Toyota, though weaker than in years past, remains a tough competitor with a very loyal customer base.Verdict: Ford was profitable overall for the first three quarters of 2009 and is expected to earn less than $0.60 per share in 2010. Given its historical valuation, whatever rosy future is in store is already priced in, as shares jumped above $10 for the first time since 2005. Investors should look elsewhere. **Freeport McMoRan Copper & Gold ([FCX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FCX&selected=FCX)) )** - 2009 Performance: +231.3% (2008: -76.1%) What Went Right: The prospect of absolute financial annihilation is always good news for hard assets like gold, the price of which started the year under $900, dipped to about $875 in April and has climbed steadily since, closing the year and the decade at $1096, up 23% for the year. That's great news for major gold producers like Freeport, which also saw the value of copper surge. What's Next: The market inked some nice gains this year, and investors who were burned in 2008 will likely be ready to inch back into the market and away from safe havens like gold. That will depress prices and mean tighter margins for companies like FCX.Verdict: Gold is a cautious investment, and caution is falling out of vogue. Investors likely will be safer in cash than in the yellow metal over the course of 2010. **Whole Foods (Nasdaq: WFMI)** - 2009 Performance: +192.1% (2008: -76.9%) What Went Right: Consumers came back from 2008's spending lockdown, which was brought on by high gas prices in late 2007 and exacerbated by falling home prices and the market collapse in 2008. But the upscale grocer's loyal customers decided that they couldn't live without its organic produce and other high-quality foods, especially if they were eating in more. The company received $400 million in private equity funding that allowed it to continue its expansion during the downturn, and it also shed of some antitrust issues that lingered after its acquisition of Wild Oats market.What's Next: Whole Foods was one of my picks going into 2009. I called it a buy at about ten bucks and was pleased to see the shares rebound. At 32.5 times earnings, however, these shares have almost the same valuation as Apple without the future upside.Verdict: If you like Whole Foods, shop there. I do. But look elsewhere for investments. There's no upside here. **Amazon (Nasdaq: AMZN)** - 2009 Performance +162.3% (2008: -44.6%) What Went Right: Amazon had a great Christmas, not in 2009 but in 2008, which was some trick in one of the worst shopping seasons in recent memory. This year, the site was getting hundreds of orders per second, and the company will continue to capitalize on its leading position as the nation's online mall. Its Kindle reader has started a revolution that, for now, the company owns. The shares rose all year.What's Next: Amazon is going to release numbers that Wall Street likes, but then it's likely that some of the fizz will fade as investors question whether the shares are worth nearly 80 times earningsVerdict: I like Amazon, but given its current valuation, it's nowhere near my radar screen by any stretch of the imagination. Still, patient investors should keep some cash at the ready to take advantage of the inevitable pullback. **American Express ([AXP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AXP&selected=AXP)) )** - 2009 Performance +118.4% (2008: -64.3%) What Went Right: American Express fired cardholders in 2009 that had no business leaving home without it. The cardmaker had lowered its standards somewhat to grow its membership base, and when the economy tightened and cardholders felt the economic squeeze, many of them fell behind on their AmEx bill. The company has since worked to focus on its best customers and rebuild itself as a premium brand. The worst thing that happened to the company this year might be its association with Tiger Woods, and that's hardly keeping the CEO up at night. What's Next: AmEx will keep its standards high and continue to bring in the best customers. And if a new pitchman signs on, no one should be too surprised.Verdict: At 33.5 times earnings, AXP is probably a little overvalued. It's a good comeback story for an American icon, but there is a lot more upside out there than these shares. **Goldman Sachs ([GS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GS&selected=GS)) )** - 2009 Performance +100.1% (2008: -60.8%) What Went Right: The storied investment bank sold preferred shares to billionaire investor Warren Buffett's Berkshire Hathaway and was among the first to get shed of government oversight by paying back its TARP funds. Goldman made a fortune trading this year and in underwriting stock issues and has so far reported three exceptional quarters for 2009 totaling $7.4 billion in profits.What's Next: Goldman never stops trading, underwriting or financing deals, and it's likely to see a continued rebound in 2010 as a rich business opportunity. Verdict: Goldman is on track to earn $18.75 per share in 2010, which implies a lot of upside for these shares. One potential catalyst is a share split, which doesn't change any of the underlying fundamentals but can make the shares -- which trade for $169 -- "seem" more affordable. These shares are a solid choice for 2010. **Google (Nasdaq: GOOG)** - 2009 Performance +101.5% (2008: -55.1%) What Went Right: Google continued to show that it's one of the smartest companies out there, notably in February when it posted its first message on Twitter -- in binary code. The company released Google Voice in March, an application that has the possibility to completely change the way people use their phone, which may be one reason that it's not available on the iPhone, which runs exclusively on AT&T's network. The company continued to benefit from advertisers who like targeting consumers and being able to measure results.What's Next: The catchword here is innovation. That's why investors are willing to pay 40 times earnings -- not because of what Google has done, which is game-changing, but because of what it will do next.Verdict: Every growth-oriented portfolio should hold these exciting shares. **Diamond Offshore ([DO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DO&selected=DO)) )** - 2009 Performance +67.0% (2008: -58.5%) What Went Right: The market was wrong about oil. Admittedly, it looked a little bleak going into the year. No one thought the economy was going to do anything but contract, which meant weaker demand for crude. Prices opened the year in the $40s and stayed there through the first quarter before beginning to rebound in about May. They closed the year just shy of $80 a barrel. That's great news for companies like Diamond Offshore, which explore for petroleum in deep-sea wells, which brought the industry some big finds in 2009, news that clearly points to the sea as a bright spot in the industry's future. What's Next: A continuing rebound means higher and higher prices for crude, and you don't have to look very far to find an economist who's forecasting triple-digit prices in the near-term future. The higher crude's price, the more cost-effective expensive offshore drilling becomes. That's not great news at the pump, but it's outstanding news for drillers like Diamond Offshore.Verdict: DO had a great year, but it's still trading for less than ten times earnings. It's a suitable investment for risk-tolerant investors willing to bet that oil will continue to hold its recent gains or continue its uptrend.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Andy ObermuellerEditor, Government-Driven InvestingP.S. It's a little ironic. When my boss Paul Tracy released his investment predictions for 2009 last year, his critics blasted him for his "absurdity." But his "wildest" predictions -- the ones claimed to be the most "out there" and "impossible to forecast" -- ended up making his readers the most money (up to +332.4%!). To see how ALL of last year's predictions fared compared to the overall market -- and to get a sneak preview of his 11 brand new forecasts for 2010, simply click here.P.P.S. One of these new 2010 picks could earn you +1,300% in a surprise takeover. Click here for more info. Disclosure: Andy Obermueller does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | Ten Stocks with Gains for the Ages | News | Andy Obermueller | Unknown | 0.0004 | 101.943 | 102.035 | 99.8155 | 99.8864 | 99.8864 | 99.8864 | 99.8864 | 99.8864 | 99.9186 | 99.0188 | 99.4209 | 99.0338 | 99.023 | 99.023 | 99.0097 | 99.0261 | 103.987 | 91.4901 |
PBI | Pitney Bowes Inc. | Miscellaneous | Office Equipment/Supplies/Services | https://www.nasdaq.com/articles/short-case-pitney-bowes-chris-paveses-highest-conviction-position-2009-12-31 | 2009-12-31 06:03:00 | Markets | ** [Christopher Pavese](http://www.viewfromtheblueridge.com/) submits:**Christopher Pavese is President and Chief Investment Officer of the Broyhill Affinity Fund, and Managing Director at Lenoir, NC-based [Broyhill Asset Management, LLC](http://www.broyhillasset.com/) , an SEC registered investment advisor, and BMC Fund, Inc., an SEC registered investment company. Prior to joining the Broyhill, Chris worked as a Vice President and Portfolio Manager for The JPMorgan Private Bank, where he managed over $1 billion in discretionary assets for high net worth individuals, trusts, endowments and foundations.We asked Chris to share his investment thesis for his highest conviction position in his portfolio. It's a stock his fund holds a short position in - **Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ). **• • •Our highest conviction ideas are driven by a combination of macroeconomic trends, indepth security analysis, valuation and sentiment. While opportunities often arise from one or two of these factors, it is rare that we see all of them in a given story. Unlike players sitting down at the World Series of Poker, investors don't have to play every hand they are dealt and don't have to worry about scaring the "dumb money" out of the pot. We can simply sit back and observe until the odds are stacked in our favor, and then push our chips into the pot. For those willing to sell shares short, we believe Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) offers investors such an opportunity today. ******Can you talk a bit about the industry/sector?**Postal industry dynamics and regulations have been a tailwind for PBI in recent years. The company has benefited from legislation that established a shape-based pricing system from a pure weight-based pricing system. Because PBI sells various mail systems, it has profited from this trend as customers converted to equipment with this functionality and traded up to more expensive machines. Importantly, we think this tailwind is stalling and should soon become a troublesome headwind in future quarters. We believe this upgrade cycle is largely complete and the market for higher end machines, which have inflated revenues of late, is close to saturation.The nostalgic image of the U.S. postman has quickly become old-fashioned. Mailing volumes worldwide have been stagnant since the new millennium - substitution of electronic forms of communication via the internet is an inevitable process in the long run. Personal mail has steadily migrated to email, text and social-networking sites just as news has shifted from print to desktops (i.e. WSJ to Seeking Alpha). The Great Recession has simply expedited this transformation, as companies have slashed direct-mail budgets and embraced the internet to reduce costs and maintain margins. The disruption to PBI's largest customers (i.e. financial services, retail, etc.) has fundamentally changed many of these business models. Corporations are encouraging customers to do more business online and are increasingly sensitive to demands for "going green" resulting in reductions in printed material. **Can you describe the company's competitive environment?**Postage meters are a highly regulated industry by governments in their respective countries. This provides companies within the industry with significant barriers to entry and limits competition. PBI's only true competitor globally is Neopost [EPA:NEO], a French company that has emerged as a scrappy market share gainer in the U.S. and in Europe. Neopost has been much more aggressive on price relative to PBI, which has been the primary reason for changes in market share, as there appears to be little distinction between machines. PBI's long history and brand recognition have slowed this process as many domestic post office managers are simply accustomed to ordering from PBI, but a name alone will not halt this process. Neopost is gaining share.To make matters worse, it would appear that management is responding to competitive pricing pressures with even more aggressive discounts, resulting in a price war between the two industry bellwethers. We have seen this movie before, and it doesn't have a happy ending. The result is likely to be deteriorating revenue trends and margins at both companies. **Can you talk about valuation?**We look at valuation from a few different lenses to reduce the margin of error in our estimates. It is also important to recognize that valuation is just one pillar of any short thesis, as richly priced stocks can quickly go from expensive to extremely expensive with just minor shifts in sentiment. In other words, a multi-factor approach is critical to success for a profitable short. Relying on valuation alone can easily frustrate investors.That said, valuation is still an important conditional component which allows us to assess the potential profitability of an investment once other factors fall into place. While we firmly believe valuation is an absolute concept, relative valuation can assist in gauging sentiment. In this case, there are few comparisons in the mailing industry, so we believe it is more appropriate to compare PBI to other mature companies in secular decline. The defining characteristics here are large deteriorating cash flows supporting heavy debt loads, and financial statements full of "non-recurring" (translation: recurring) restructuring charges. After a massive junk rally from the March lows, these companies now trade at 5x - 10x EBITDA today. We think this range of valuations reflects quite optimistic expectations given the huge rebound in the group over the past nine months. Considering the combination of both secular and cyclical challenges facing PBI, and the company's low quality cash flow, we assign a multiple at the low end of this range, producing a target price range of $14 to $18 per share, more than 20% downside from the current share price.In determining absolute valuation, cash is king. We believe that reported earnings are a poor proxy for economic value, as most accounting ratios have a tremendous ability to distort economic reality. There is no substitute for "counting the cash." We use AFG's Economic Margin Framework to value PBI, which emphasizes the key factors that create value rather than non-cash accounting rules. Economic Margin (([EM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EM&selected=EM)) )) provides a complete set of value drivers which incorporate levels of investment, profitability and risk (through a capital charge on all the firm's cashflows and de-leveraging the income statement). Economic Margin is a simple concept which views economic profit (operating income less capital charges) relative to invested capital. EM has a strong, systemic link to market value such that investing in companies with improving EMs, which are reinvesting in their business, produces superior risk-adjusted returns. Alternatively, companies with negative or declining EMs should be divesting businesses and returning cash to shareholders. This is emphatically **not** the case with PBI, as management has followed a growth-by-acquisition strategy in a desperate hope to diversify away from its core business into others where it has no competitive advantage.Changing EM levels lead to changes in market based valuation multiples. Ultimately, what drives value are returns above a firm's cost of capital. In this regard, PBI is a wealth destroying business, with declining economic performance. Our estimate of intrinsic value is $8.50 per share using this framework, providing investors with a very attractive opportunity to sell shares short at current levels. **What is the current sentiment on the stock?**Institutional coverage is minimal on the stock with half of the analysts covering the name rating it a "strong buy," but there are some red flags in our analysis of internals which warn of weak institutional sponsorship: market sentiment is at a level which has historically been unfavorable for the stock; price-volume action is showing weakness; short term indicators are overbought; while long term relative strength is in a steady decline. This combination of factors points to an attractive risk-reward profile for investors to sell shares. **How does your view differ from the consensus?**Bulls point to PBI's dominant market share, recurring revenues, steady cash flow generation and attractive dividend yield, but we believe there are both secular and cyclical issues brewing beneath this bullish superficial façade. PBI's primary business is in secular decline due to the ongoing and rapid transition to the internet. Recent testimony from the USPS acknowledges these challenges: Importantly, the industry's secular decline is being exaggerated by cyclical challenges. PBI's core business is closely linked to the business cycle as end demand shrinks along with the economy. Recent weakness appears to have accelerated the decline in mail volumes, suggesting that the mix of PBI customers requiring new or larger equipment is shrinking. Increasingly, these customers are trading down or turning in their machines altogether, preferring the much cheaper and delicious American pastime of "stamp-licking."The main reason investors hang onto the declining stock boils down to the company's ability to generate cash and an attractive dividend. But we think that management's cash flow guidance is deceptive. Investors would be wise to look closely at the quality of management's definition of "cash flow." PBI has an impressive and recurrent history of restructuring its operations. Given that the company has been in a permanent state of restructuring, these charges should be viewed as recurring, rather than "one-time" in nature. Once the cash flow statement is adjusted to reflect these charges, PBI's cash generation is not as strong as "the Street" contends. Consequently, investors should begin to place less emphasis on the company's "pro-forma" earnings and cash flow definitions - particularly as the gap between these figures continues to widen as restructuring charges grow. **Does the company's management play a role in your position?**Murray Martin has been the company's CEO since May 2007. Martin is also PBI's chairman, which hinders the board's independence from management. Corporate governance is also hampered from staggered board elections, which obstruct director turnover.We believe management is making decisions that are eroding economic value. Rather than investing in new businesses that are unrelated to PBI's core competencies, management should be more focused on returning cash to shareholders as economic margins continue to deteriorate. Furthermore, current management appears to be blind to the secular nature of the decline in mailing volume. Despite USPS data, which has shown ten consecutive quarters of deterioration, management continues to view the existing downturn in the industry as being purely cyclical. As we discussed above, we believe they are sadly mistaken, and that management's view represents a major misclassification with severe consequences for capital allocation decisions and negative implications for shareholder value. **What catalysts do you see that could move the stock?**Given our broad investment pallete, we spend most of our time taking a good hard look at the forest, rather than analyzing individual leaves on each tree. So we don't see a lot of value in scrutinizing each quarter to estimate earnings to the nearest penny. That said, we do expect revenue declines to be significantly greater than current consensus expectations given our negative outlook. Lower sales would likely be accompanied by lower margins, increasing the potential for negative surprises in the year ahead. **What could go wrong with this stock pick?**Management is hopeful that a recovery in GDP would drive a coincident rebound in mail volumes and industry revenues. We recommend that management take the advice of our friend Keith McCullough at Research Edge who reminds us daily that "hope is not an investment process." More importantly, the USPS illustrates that "trends in employment, investment, expenditures, and retail sales are better indicators of mail volume trends."Accordingly, the obvious risk to our short thesis is that these trends surprise on the upside. While our regular readers might surmise that the potential for upside growth surprises is quite low as we discussed [here](http://www.viewfromtheblueridge.com/2009/10/22/the-outlook-beyond-%E2%80%9Cthe-great-recovery%E2%80%9D/) and [here](http://www.viewfromtheblueridge.com/2009/12/16/choose-your-own-adventure/) , for illustrative purposes, let's give PBI the benefit of the doubt. Estimates of the stock's intrinsic value, assuming a strong recovery in employment and a rapid upturn in the metrics most correlated with mail volume trends, still fall short of current price levels. According to our work, PBI would need to generate roughly 17% annual sales growth for the next five years merely to justify today's price! Alternatively, assuming consensus expectations for sales growth, shareholders are implicitly hoping for a 500 basis point increase in EBITDA margins to rationalize the stock's current price. Suffice it to say that there is a sufficient margin of safety in our estimates of intrinsic value, even in the unlikely case we do experience the v-shaped recovery so many Wall Street bankers asked Santa for this holiday season. **Thanks, Chris, and Happy New Year. **My pleasure. **Disclosure: At the time of publication, the author was short shares of Pitney Bowes and Neopost, although positions may change at any time. **See also [Book Review: The Subprime Solution by Robert Shiller](http://seekingalpha.com/article/181861-book-review-the-subprime-solution-by-robert-shiller?source=nasdaq) on seekingalpha.com | The Short Case on Pitney Bowes, Chris Pavese's Highest Conviction Position | News | SeekingAlpha | Unknown | 0.0004 | 22.9188 | 22.9207 | 22.8206 | 22.9996 | 22.9996 | 22.9996 | 22.9996 | 22.9996 | 23.0694 | 22.9523 | 22.9466 | 22.8561 | 22.8566 | 22.8566 | 22.7791 | 22.7697 | 22.2857 | 20.9199 |
PBI | Pitney Bowes Inc. | Miscellaneous | Office Equipment/Supplies/Services | https://www.nasdaq.com/articles/short-case-pitney-bowes-chris-pavesees-highest-conviction-position-2009-12-31 | 2009-12-31 06:03:00 | Markets | ** [Christopher Pavese](http://www.viewfromtheblueridge.com/) submits:**Christopher Pavesee is President and Chief Investment Officer of the Broyhill Affinity Fund, and Managing Director at Lenoir, NC-based [Broyhill Asset Management, LLC](http://www.broyhillasset.com/) , an SEC registered investment advisor, and BMC Fund, Inc., an SEC registered investment company. Prior to joining the Broyhill, Chris worked as a Vice President and Portfolio Manager for The JPMorgan Private Bank, where he managed over $1 billion in discretionary assets for high net worth individuals, trusts, endowments and foundations.We asked Chris to share his investment thesis for his highest conviction position in his portfolio. It's a stock his fund holds a short position in - **Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ). **• • •Our highest conviction ideas are driven by a combination of macroeconomic trends, indepth security analysis, valuation and sentiment. While opportunities often arise from one or two of these factors, it is rare that we see all of them in a given story. Unlike players sitting down at the World Series of Poker, investors don't have to play every hand they are dealt and don't have to worry about scaring the "dumb money" out of the pot. We can simply sit back and observe until the odds are stacked in our favor, and then push our chips into the pot. For those willing to sell shares short, we believe Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) offers investors such an opportunity today. ******Can you talk a bit about the industry/sector?**Postal industry dynamics and regulations have been a tailwind for PBI in recent years. The company has benefited from legislation that established a shape-based pricing system from a pure weight-based pricing system. Because PBI sells various mail systems, it has profited from this trend as customers converted to equipment with this functionality and traded up to more expensive machines. Importantly, we think this tailwind is stalling and should soon become a troublesome headwind in future quarters. We believe this upgrade cycle is largely complete and the market for higher end machines, which have inflated revenues of late, is close to saturation.The nostalgic image of the U.S. postman has quickly become old-fashioned. Mailing volumes worldwide have been stagnant since the new millennium - substitution of electronic forms of communication via the internet is an inevitable process in the long run. Personal mail has steadily migrated to email, text and social-networking sites just as news has shifted from print to desktops (i.e. WSJ to Seeking Alpha). The Great Recession has simply expedited this transformation, as companies have slashed direct-mail budgets and embraced the internet to reduce costs and maintain margins. The disruption to PBI's largest customers (i.e. financial services, retail, etc.) has fundamentally changed many of these business models. Corporations are encouraging customers to do more business online and are increasingly sensitive to demands for "going green" resulting in reductions in printed material. **Can you describe the company's competitive environment?**Postage meters are a highly regulated industry by governments in their respective countries. This provides companies within the industry with significant barriers to entry and limits competition. PBI's only true competitor globally is Neopost [EPA:NEO], a French company that has emerged as a scrappy market share gainer in the U.S. and in Europe. Neopost has been much more aggressive on price relative to PBI, which has been the primary reason for changes in market share, as there appears to be little distinction between machines. PBI's long history and brand recognition have slowed this process as many domestic post office managers are simply accustomed to ordering from PBI, but a name alone will not halt this process. Neopost is gaining share.To make matters worse, it would appear that management is responding to competitive pricing pressures with even more aggressive discounts, resulting in a price war between the two industry bellwethers. We have seen this movie before, and it doesn't have a happy ending. The result is likely to be deteriorating revenue trends and margins at both companies. **Can you talk about valuation?**We look at valuation from a few different lenses to reduce the margin of error in our estimates. It is also important to recognize that valuation is just one pillar of any short thesis, as richly priced stocks can quickly go from expensive to extremely expensive with just minor shifts in sentiment. In other words, a multi-factor approach is critical to success for a profitable short. Relying on valuation alone can easily frustrate investors.That said, valuation is still an important conditional component which allows us to assess the potential profitability of an investment once other factors fall into place. While we firmly believe valuation is an absolute concept, relative valuation can assist in gauging sentiment. In this case, there are few comparisons in the mailing industry, so we believe it is more appropriate to compare PBI to other mature companies in secular decline. The defining characteristics here are large deteriorating cash flows supporting heavy debt loads, and financial statements full of "non-recurring" (translation: recurring) restructuring charges. After a massive junk rally from the March lows, these companies now trade at 5x - 10x EBITDA today. We think this range of valuations reflects quite optimistic expectations given the huge rebound in the group over the past nine months. Considering the combination of both secular and cyclical challenges facing PBI, and the company's low quality cash flow, we assign a multiple at the low end of this range, producing a target price range of $ 14 to $18 per share, more than 20% downside from the current share price.In determining absolute valuation, cash is king. We believe that reported earnings are a poor proxy for economic value, as most accounting ratios have a tremendous ability to distort economic reality. There is no substitute for "counting the cash." We use AFG's Economic Margin Framework to value PBI, which emphasizes the key factors that create value rather than non-cash accounting rules. Economic Margin (([EM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EM&selected=EM)) )) provides a complete set of value drivers which incorporate levels of investment, profitability and risk (through a capital charge on all the firm's cashflows and de-leveraging the income statement). Economic Margin is a simple concept which views economic profit (operating income less capital charges) relative to invested capital. EM has a strong, systemic link to market value such that investing in companies with improving EMs, which are reinvesting in their business, produces superior risk-adjusted returns. Alternatively, companies with negative or declining EMs should be divesting businesses and returning cash to shareholders. This is emphatically **not** the case with PBI, as management has followed a growth-by-acquisition strategy in a desperate hope to diversify away from its core business into others where it has no competitive advantage.Changing EM levels lead to changes in market based valuation multiples. Ultimately, what drives value are returns above a firm's cost of capital. In this regard, PBI is a wealth destroying business, with declining economic performance. Our estimate of intrinsic value is $8.50 per share using this framework, providing investors with a very attractive opportunity to sell shares short at current levels. **What is the current sentiment on the stock?**Institutional coverage is minimal on the stock with half of the analysts covering the name rating it a "strong buy," but there are some red flags in our analysis of internals which warn of weak institutional sponsorship: market sentiment is at a level which has historically been unfavorable for the stock; price-volume action is showing weakness; short term indicators are overbought; while long term relative strength is in a steady decline. This combination of factors points to an attractive risk-reward profile for investors to sell shares. **How does your view differ from the consensus?**Bulls point to PBI's dominant market share, recurring revenues, steady cash flow generation and attractive dividend yield, but we believe there are both secular and cyclical issues brewing beneath this bullish superficial façade. PBI's primary business is in secular decline due to the ongoing and rapid transition to the internet. Recent testimony from the USPS acknowledges these challenges: Importantly, the industry's secular decline is being exaggerated by cyclical challenges. PBI's core business is closely linked to the business cycle as end demand shrinks along with the economy. Recent weakness appears to have accelerated the decline in mail volumes, suggesting that the mix of PBI customers requiring new or larger equipment is shrinking. Increasingly, these customers are trading down or turning in their machines altogether, preferring the much cheaper and delicious American past-time of "stamp-licking."The main reason investors hang onto the declining stock boils down to the company's ability to generate cash and an attractive dividend. But we think that management's cash flow guidance is deceptive. Investors would be wise to look closely at the quality of management's definition of "cash flow." PBI has an impressive and recurrent history of restructuring its operations. Given that the company has been in a permanent state of restructuring, these charges should be viewed as recurring, rather than "one-time" in nature. Once the cash flow statement is adjusted to reflect these charges, PBI's cash generation is not as strong as "the Street" contends. Consequently, investors should begin to place less emphasis on the company's "pro-forma" earnings and cash flow definitions - particularly as the gap between these figures continues to widen as restructuring charges grow. **Does the company's management play a role in your position?**Murray Martin has been the company's CEO since May 2007. Martin is also PBIs chairman, which hinders the board's independence from management. Corporate governance is also hampered from staggered board elections, which obstruct director turnover.We believe management is making decisions that are eroding economic value. Rather than investing in new businesses that are unrelated to PBI's core competencies, management should be more focused on returning cash to shareholders as economic margins continue to deteriorate. Furthermore, current management appears to be blind to the secular nature of the decline in mailing volume. Despite USPS data, which has shown ten consecutive quarters of deterioration, management continues to view the existing downturn in the industry as being purely cyclical. As we discussed above, we believe they are sadly mistaken, and that management's view represents a major misclassification with severe consequences for capital allocation decisions and negative implications for shareholder value. **What catalysts do you see that could move the stock?**Given our broad investment pallet, we spend most of our time taking a good hard look at the forest, rather than analyzing individual leaves on each tree. So we don't see a lot of value in scrutinizing each quarter to estimate earnings to the nearest penny. That said, we do expect revenue declines to be significantly greater than current consensus expectations given our negative outlook. Lower sales would likely be accompanied by lower margins, increasing the potential for negative surprises in the year ahead. **What could go wrong with this stock pick?**Management is hopeful that a recovery in GDP would drive a coincident rebound in mail volumes and industry revenues. We recommend that management take the advice of our friend Keith McCullough at Research Edge who reminds us daily that "hope is not an investment process." More importantly, the USPS illustrates that "trends in employment, investment, expenditures, and retail sales are better indicators of mail volume trends."Accordingly, the obvious risk to our short thesis is that these trends surprise on the upside. While our regular readers might surmise that the potential for upside growth surprises is quite low as we discussed [here](http://www.viewfromtheblueridge.com/2009/10/22/the-outlook-beyond-%E2%80%9Cthe-great-recovery%E2%80%9D/) and [here](http://www.viewfromtheblueridge.com/2009/12/16/choose-your-own-adventure/) , for illustrative purposes, let's give PBI the benefit of the doubt. Estimates of the stock's intrinsic value, assuming a strong recovery in employment and a rapid upturn in the metrics most correlated with mail volume trends, still fall short of current price levels. According to our work, PBI would need to generate roughly 17% annual sales growth for the next five years merely to justify today's price! Alternatively, assuming consensus expectations for sales growth, shareholders are implicitly hoping for a 500 basis point increase in EBITDA margins to rationalize the stock's current price. Suffice it to say that there is a sufficient margin of safety in our estimates of intrinsic value, even in the unlikely case we do experience the v-shaped recovery so many Wall Street bankers asked Santa for this holiday season. **Thanks, Chris, and Happy New Year. **My pleasure.See also [5 Predictions and 4 Possible Surprises for the New Year](http://seekingalpha.com/article/180420-5-predictions-and-4-possible-surprises-for-the-new-year?source=nasdaq) on seekingalpha.com | The Short Case on Pitney Bowes, Chris Pavesee's Highest Conviction Position | News | SeekingAlpha | Unknown | 0.0004 | 22.9188 | 22.9207 | 22.8206 | 22.9996 | 22.9996 | 22.9996 | 22.9996 | 22.9996 | 23.0694 | 22.9523 | 22.9466 | 22.8561 | 22.8566 | 22.8566 | 22.7791 | 22.7697 | 22.2857 | 20.9199 |
OPY | Oppenheimer Holdings Inc. | Finance | Investment Bankers/Brokers/Service | https://www.nasdaq.com/articles/hire-powers-speak-out-2010-01-01 | 2010-01-01 06:00:00 | BAC|Financial Advisors|UBS|DB|GS|MS|RJF|JPM|SF|WFC | If you could talk to a room full of headhunters, what would you ask them? Will deals ever get any bigger than they are now? Do I have to have an entrepreneurial mindset to succeed in this business? Is the wirehouse business model still a good idea?We already did that, so all you have to do is read our 11th annual Recruiters Roundtable. As you might guess, they agreed on some things and disagreed on others (like whether wirehouses will continue to dominate the industry.) But even if they don't, and if you're unhappy with your job-which some recruiters guessed is the case-there are still options out there for you. Whatever direction you take your career next, our Recruiters Roundtable will tell you the opportunities and pitfalls that await you at the wirehouses, regionals, boutiques and independent shops. **FRANCES McMORRIS, Editor-in-Chief of On Wall Street** : Let's start with predictions. What's the big story going to be in 2010?**MINDY DIAMOND, of Diamond Consultants** : It's the year of the four major wirehouses. We're going to see a lot of wirehouse-to-wirehouse recruiting again because there was a lot of attrition at the end of last year for sure. **CARRI DEGENHARDT-BURKE, of Degenhardt Consulting** : I predict that Merrill Lynch will continue its downward spiral, whether that be due to TARP money still owed [Editor's Note: This discussion took place shortly before Bank of America announced plans to repay $45 billion in TARP money], or low morale. They're going to continue losing brokers until they change things around. And I don't think that Sallie has a lot of say with Merrill right now. **MICKEY WASSERMAN, of Michael Wasserman Consulting** : The surprise of 2010 is going to be where UBS winds up. They don't have a plan right now as to where they're going. I believe they will be sold and we won't have UBS as we now know it by the end of 2010. **RICH SCHWARZKOPF, of Schwarzkopf Recruiting Services** : I disagree with Mickey. I think UBS will be here a year from now. I think it's too valuable a brand and distribution system to eliminate. They've put too much into it. I think they will shrink, and maybe drop 25% of their brokers. I think their plans are to become what a lot of firms would like to be: a place for high-net-worth clients with $500,000 or more to invest. **BILL WILLIS, of Willis Consulting** : The deals will continue to get bigger and better than ever. The reason for that is almost all of our firms are owned by banks, and banks have access to money at almost 0% interest right now. They want to buy [client] assets and the money to do so is almost free for them. **STEVE ROSEN, of Rainmaker Associates** : The big story will be breakaway brokers. If you speak with any financial advisor or manager who's been in the business for 25 or 30 years, they'll tell you that the wirehouse model is broken.As this trend continues, we'll see independent models become more refined and become a threat to the wirehouses. **DANNY SARCH, of Leitner Sarch Consultants** : The wirehouses are at a tipping point where they can either differentiate themselves from one another or not, and that's where we're going to see their efforts this year. And the higher deals go, it just indicates that they really can't differentiate themselves so they're defaulting to the money.If that fails, then you'll see a lot of the migration from the wirehouse model into some other model, whether it's regional or independent, people are looking for a different solution. **RICK PETERSON, of Rick Peterson & Associates** : The big unknown is UBS. They've already stated that they're not going to be the highest bid on the Street by any means. If they stick to that I'm not sure that the major wirehouses will continue with these huge deals much longer because there will just be two bidders. And if that happens, then the regionals will come back into the recruiting business.•**OWS** :Carri, you said that Sallie doesn't have enough say. How so?**DEGENHARDT-BURKE** : Basically, it's the same thing that happened at Citi. She didn't have very much say over Citi, and she doesn't at Merrill Lynch. It's just the nature of the beast, the bureaucracy. She's gone from one bad situation to another, and so it continues to show in their morale. **PETERSON** : A lot of the Merrill situation is going to depend upon the new CEO of BofA and whether he gives Sallie free rein to run the brokerage operation... If they continue the same pro-broker treatment that they initially said they were going to, as opposed to just shoving Bank of America product through the Merrill brokers, it's got potential to be a grand slam. **ROSEN** : I don't think it makes a difference who runs the retail operation. The bottom line is you have a bank and a brokerage firm with utterly different cultures. The underpinnings of the companies are completely different. That doesn't mean all the brokers are going to leave, but in my opinion, just like Citigroup Smith Barney, this isn't going to work. **WASSERMAN** : I'm a contrarian on Merrill and BofA. Here, you have a bank and a brokerage, they're two different types of companies that could complement each other. Now you have every product for your clients on both sides of the balance sheet and the brokers can take an entirely holistic view for their clients. Merrill is the company to look at this year. **SCHWARZKOPF** : It's the supermarket. They've tried it for years and it never worked. In the latest J.D. Power research satisfaction poll in client satisfaction, Merrill Lynch went from a very good firm almost to the very bottom. **WASSERMAN** : But the brand is there. And it's a good marriage... I do think the supermarket model is going to continue and thrive. **WILLIS** : Just because it didn't work in the past doesn't mean it can't be executed and BofA just may execute this. They have a couple of advantages that didn't exist in other such mergers. For one thing, Merrill Lynch brokers for years have been in the lending business. So they're very happy to have a better lending platform and they're using it.•**OWS** : Moving on to the regionals, which one is the winner so far? **SARCH** : All of them. The regional firms have only a certain amount of capacity, but there's an entrepreneurialism out there that they represent. The advisor that feels trapped amongst the four major firms just isn't opening up his eyes to realize that there are other things out there for him. **DIAMOND** : Entrepreneurialism is definitely a big theme of what's going on for advisors now. A lot of advisors who are looking to move or are unhappy feel that they lost their autonomy or their freedom. And they move because they want to recapture that. So what matters for the advisor is just how independent and how much entrepreneurial DNA they have. **SARCH** : There are also a lot of branch managers out of work and they're realizing they're never going to make the type of money they did before. That age is done. Complexing is here so they're open to the idea of taking a shot at a regional. **ROSEN** : The regionals may recently have won but they've won by default. Brokers haven't flocked there because they think it's the perfect place for them; there's just nowhere else to go. Certainly brokers under $1 million were hitting the door. And we're even seeing multi-million dollar teams look to do it. I don't think in the long-term they can compete economically with the wirehouses because it's a scale game and that they don't have. But there will always be a place for those firms and those brokers. **PETERSON** : The other factor is the ultra-high- net-worth segment. Firms like Merrill, Morgan Stanley Smith Barney and UBS have the economies of scale to provide services to those clients. But [the boutiques and regionals] cannot provide those clients with the same kind of services as the major wirehouses. **SCHWARZKOPF** : Wirehouses have all the technology in the world but they're not keeping assets. Wirehouses lost $188 billion in assets this year. Even the word wirehouse is almost archaic term. You're talking about just 62,000 brokers. Independents and RIAs have 145,000 reps now. Maybe the average production is a lot different but the assets are flowing that way. **PETERSON** : But the ultra-high-net-worth clients aren't moving to those firms... **SCHWARZKOPF** : They are moving. **PETERSON** : The ultra-high-net-worth clients are still sticking with the major firms that they feel comfortable with, where they can get the maximum amount of research capabilities and some of their corporate needs as well, whether it be IPOs, restructurings, all the kind of advice that they can get from a major firm. **DIAMOND** : There is certainly a large percentage of wirehouse advisors catering to the ultra-high-net-worth segment who will stay at the wirehouses. But make no mistake, we're beginning to see really high end teams, seven, 10, 20 million dollars, who service really high-end individuals finding access to the best-in-class products and services in some cases by accessing it in an open-architecture basis through firms like Fidelity or Pershing or Fortigent. So it's not that you can't get access to these products away from the wirehouse; it's just about a comfort level. **SARCH** : There's more in play here than just the deal. Despite these 300%-plus deals, there's a certain type of advisor who just doesn't want to move. We've all dealt with them, sometimes they're happy sitting in their own excrement just because it's warm, is the nice way to say it. I just don't see how they underestimate how much these firms did in screwing up their brands for employees and clients. •**OWS** :When advisors make a move, are they finding it easy or harder to bring their clients with them?**WASSERMAN** : It depends on the firm that they're moving to. If the firm that they're moving to has a very good SWAT team for ACATs [Automated Customer Account Transfer Service] and they have a lot of support, they will find it easier. And of course it also depends on the advisor. If you have an advisor that's meeting face-to-face with many of his clients, especially his top clients, he will probably get a little bit more support and move more of them with him. **MICHAEL KING, of Michael King Associates** : If the firm they're moving to has been getting a bad reputation in the press, that makes it tough at this point. People are nervous of what will happen to UBS, and Merrill and Bank of America have a lot of things going on. **PETERSON** : The communication between the broker and his client is key to everything. If the broker keeps using his firm's name as opposed to his name, it's difficult to move that client because they think that the allegiance is to the firm as opposed to the broker. When Goldman brokers leave, they leave most of the business behind. Why? Because they always said, 'At Goldman, we think this, at Goldman we think that,' as opposed to, 'I think this' and 'I think that.'**SARCH** : Advisors need to have a compelling argument to their clients about why the new firm is better than the old one. What we all saw, during the frantic first quarter and the end of last year, all the shotgun weddings just like at the firms. Normally you have three to six months for an advisor to make a thoughtful decision, now they're making decisions in three days. So they didn't do a lot of the homework to determine whether the new firm really had the resources, or vet their books to see which clients would follow them. **SCHWARZKOPF** : There were 15,000 brokers who moved from wirehouses last year; 10,000 went wire-to-wire but 4,300 went independent. And according to Cerulli Associates, 30% of the world's millionaires moved their money out of wirehouses in 2008. That's a staggering amount. If you lost 5% in a year you'd say that's a lot. We're in a new generation now coming in, they're all on the Internet and they feel very comfortable transferring money with their little handsets rather than talking to somebody.•**OWS** :What's the perceptions here of Wells Fargo?**KING** : Wells Fargo remains an anomaly to me. They are comfortable with the brokers in the $300,000 to $800,000 range. That's their sweet spot. They are not as competitive as a Morgan Stanley or a Merrill Lynch and we just don't know about UBS. So they sort of fall in between. But they do get the brokers that they seem to want, which a lot of wirehouses don't want. **ROSEN** : When I think of Wells Fargo, I'm not quite sure what I think of because it's really a combination of a lot of other firms acquired over the years. It doesn't seem to have any identity. **WILLIS** : Their multi-channel approach is unique and was very well thought-out. The fact that you can be there and go independent, you can be independent within a branch, or they have a bank channel also available. So they have a number of distinct possibilities and channels so that the entrepreneur, a word we've heard a lot today, has some freedom within the system. We'll see that mimicked by other wirehouses. **DIAMOND** : The name Wells Fargo is a really solid brand. At a time where everyone is reeling from a lack of trust, I think the Wells Fargo name is a very good one. The problem is their deal is not as competitive as the other three wirehouses. So if someone is looking to go to a major firm they've got to really love Wells Fargo, or legacy Wachovia, much more than they love Morgan Stanley Smith Barney or Merrill or UBS because their deals are so much more. But I think there are a lot of reasons why advisors do love it. For a large firm they've done a pretty good job of retaining what some people call a folksy culture. •**OWS** :Let's turn to UBS and Bob McCann. What do you think he's going to be able to do for UBS, if anything?**DEGENHARDT-BURKE** : Bob is masterful, a perfectionist. If anyone can turn this around, he can. It's probably going to be interesting for him because it's such a smaller place than Merrill Lynch was. So he might have more of an impact than he would at another organization. And with Bob Mulholland, he's certainly getting a very interesting team together. **WASSERMAN** : Well nothing of substance has come out of UBS since McCann came on board. I don't think he has a plan... And that's okay, but sometimes one walks in with a plan. He has his SWAT team together and they're formulating what to do as we speak.•**OWS** :Will tax evasion problems plague them, or have they moved beyond that scandal?**SCHWARZKOPF** : It was good that they settled with those 4,000 or 5,000. Somewhere the Swiss government is going to draw a line and say, 'We're not releasing any more names.' Then it's a question of what the U.S. is going to do. **KING** : It's a mistake to rule out UBS. But a lot depends what Switzerland wants. I still think they're going to come up with a [recruiting] deal that'll be competitive. I don't think they're going to give up so quickly on this. But I wouldn't rule out the possibility of a spinoff either, that wouldn't shock me. **WILLIS** : I agree with [the possibility of a spinoff]. The firm has some serious issues: They're hemorrhaging cash in Europe and European shareholders aren't happy with what occurred here in the U.S. The company has to make a change to appease depositors and shareholders right now. I don't think that opportunity is presenting itself in this market right now but, if they could figure out how to spin it off rather than sell it, they'll do it. It would be a tough transaction but maybe the stock involved with that spinoff is the way you retain all the top producers who are there now. That's just a guess, but I do feel that the Swiss want to exit the U.S. **SARCH** : The force of personality can do a lot with a sales force. Gorman did that in the first few weeks at Morgan Stanley a few years ago when they were at rock bottom before he changed anything. McCann's doing that to a certain extent. He said he'll announce a new plan by the end of March and there's an argument to be made for a much smaller wirehouse as a place that is more responsive to the bigger producers. They want to be the place that just caters to a certain level of producer. They don't want the smaller producers. **PETERSON** : McCann has a problem. He has to figure out what niche, if any, UBS fits into. They've got enough infrastructure to support at least double their number of brokers. The other wirehouses are getting return on investments in excess of 18%. UBS for the past several years has been less than 8%. There are two ways to correct that. One is to cut the heck out of their infrastructure and quit trying to be a major wirehouse, and the other is to go from 7,200 to 14,000 brokers and keep the infrastructure. So McCann has to figure out what niche he wants to be in because his ROI is horrible. The Swiss know it; they're not getting the returns that they originally had thought they were and they're certainly not getting the returns that the other major firms are. **KING** : McCann has to do what Gorman did. He's got to become the presence for that firm. I would have thought he would do some kind of retention package for his brokers, which would have been a very smart move. We'll see what happens with that. But it's got to be done fairly quickly. Six months from now will be too late. •**OWS** :Bear Stearns is now part of JPMorgan Chase. How do you view the strategy there?**WILLIS** : It's a boutique inside a very big organization so they have the muscle of JPMorgan but the flat management system and boutique approach of Bear Stearns. It's working. Talking to brokers and managers alike, they're enthusiastic about what's going on. And although JPMorgan is a bank, it obviously has brokerage roots and that's very important. **KING** : The name is JPMorgan is magic. When you mention it, people love it. And they're hiring good people and good managers. They want to expand to 1,000 brokers, but their deal is not competitive. It fits into a boutique mindset, but doesn't in any way compare with the wirehouses. I'm not sure how they're going to get to 1,000 brokers with a deal not being competitive. **DIAMOND** : It's amazing how quickly people forgot about the troubles that Bear Stearns had. When we talk about the wirehouses, people haven't forgiven UBS or Merrill Lynch for the troubles of last year or the year before. But people have really forgotten about what happened at Bear Stearns because they like the JPMorgan name so much. Also, they have several buckets, if you will, for advisors-the Bear Stearns unit, the Chase bank brokers, the JPMorgan private bank, the old Banc One advisors. If you talk to advisors who wants to be commission-based and don't want to sit in a bank, then it's the Bear Stearns unit you're talking about. **PETERSON** : People follow the stars. Everybody says JPMorgan, but they're thinking Jamie Dimon. He's the star, he is the firm. They're the winners over Credit Suisse, or Deutsche and certainly Barclays. Plus they are expanding. They're opening up at least three new offices that I know of right now, big ones. So I'm a strong believer in the firm. They're going to rival Goldman at some point. They have that kind of capability. •**OWS** :Okay, in terms of the boutiques, who's really the hot one in that space? Credit Suisse? Deutsche? Who?**PETERSON** : It's not Deutsche. They lack leadership, they're desperately in need of an identity. Credit Suisse is a little better but the big complaint about Credit Suisse is that the high-net-worth offices at the majors have so much more to offer their clients. Goldman is still the premiere firm. **SARCH** : One of the advantages that the boutiques have is that what they're selling is their relationship between the advisor and investment bank, which the big firms just by sheer force of numbers have a tough time doing. It's the rare advisor that can truly take advantage of it, but if you can, that's really where you should be.•**OWS** :Let's move on to Morgan Stanley Smith Barney. What are the big issues they're facing?**DIAMOND** : I love the Morgan Stanley Smith Barney story, but there are challenges. Anytime you integrate two firms with a strong presence, there's going to be some reorg and restructuring and some growing pains. But the complexing structure has allowed them to put the best managers in the strategic places. And these managers have really been empowered to make decisions on the ground. One of the things they're doing very well is a real commitment to organic growth. We were told that they are taking, for example, advisors that are within striking distance of a million, say $700,000 or $800,000, and really working with them with internal coaching, with external coaching. I think they're going to be unstoppable. **ROSEN** : Long term they will be a monster. Short term, they are going to have problems. First of all, fundamentally they are different companies. Even from a recruiting sense, they're completely different. Morgan is a recruiting machine; Smith Barney isn't.Smith Barney focuses on different things. And the way they run their business is different. There's going to be short-term problems and fallout... We saw a lot of Smith Barney brokers leaving right afterward, and we could possibly see the same thing through the management. **KING** : Right now, they have the best name on the Street. Of course they could stumble. I do think James Gorman will remain involved in the retail part of it. He's said that very clearly... I was surprised in a certain sense of the deal from Morgan Stanley Smith Barney. You would have thought that with 18,000 brokers they wouldn't be that interested in recruiting, but they are. **WILLIS** : They're doing a great job with the merger. If you talk to most brokers there, they're pretty pleased with it all. There's very little negativity. With the managers, however, lots of negativity. Nobody really received what they wanted by and large. Even people who got complexes are looking at pay cuts. That's an overall trend in the industry but it really is in your face there right now. That negativity is one of the biggest management challenges they're going to have over the next couple of years. **SARCH** : One of the fascinating things about the Morgan Stanley Smith Barney merger is that it's going to challenge what we've all thought about the relationship between a branch manager and the advisor. And if this works and it stays solid then the branch manager's role has been diminished because they have shaken things up so dramatically, displaced managers, moved people around, all the rest of it. One of the big things to look at is whether there's an attachment between the advisor and the branch manager. And whether that's important to retain people. The whole concept of complexing where one manager is now in charge of many more people, with obviously less time to spend with the each advisor, is just fascinating from a management standpoint. This is a little petri dish to see what happens going forward. **SCHWARZKOPF** : The big problem with branch managers is there's nowhere to go. There are fewer branches every year. Everybody at this table has a stack of resumes this thick from branch managers but unless they're a producing branch manager, I can't place anybody. When I was in the business, I was a branch manager and salesman, but we all had to give up our books or cap them at a low level. You know, the worst decision I ever made was giving up my book. But now they won't take non-producing managers. **PETERSON** : We've come full circle. Years ago everybody had producing managers. And then everybody went away from that model and went with non-producing managers. And now we're back where they force these guys to start building a book. It's not like resume your book; they didn't have a book; they gave it all up. So now they've got to start from scratch. The morale problem throughout the entire industry is really bad.•**OWS** :Which executive in the industry is going to be the standout this year?**DIAMOND** : It's Gorman. He's got a tall order and a lot of advisors really have the confidence that he's the man to do it. **WASSERMAN** : I'll go with Sallie Krawcheck. She has a big job ahead of her but she has the most manageable job of the wirehouses. Merrill's program is pretty much in place and she just has to improve on what's already there. Everybody else has a much bigger task ahead. **SCHWARZKOPF** : It's not John Thain that's for sure. That's what people thought last year, remember? What a disaster. I would like to see a $35,000 toilet seat, though. Seriously, Stifel Nicolaus will be the firm to watch. Ron Kruszewski and Scott McCuaig, who run it, are two of the best retail brokerage executives in the industry. **KING** : I would go with James Gorman also but I'd say we should watch Bob McCann and Bob Mulholland because that's going to be interesting. **WILLIS** : Jamie Dimon's going to be a very interesting guy to watch this year. There are a lot of opportunities in the boutique space and they're really well positioned to take advantage of those opportunities. **ROSEN** : I don't know who's going to do the best but McCann is certainly the most interesting, the most upside. Because sometimes it's easier to fix something that's so broken because it's so obvious, as opposed to try to make something better. They have no way to go but up. **SARCH** : I agree on McCann. I advise branch managers about this: Do you want to take over for a hero or do you want to take over for something that's broken? For your own career mark you want to take over something that's closer to the bottom than the top and make a splash. Clearly he's got that opportunity.•**OWS** :Where are the deals going this year?**DIAMOND** : Right now they're 300%, I think that's where they'll stay. **WASSERMAN** : A lot will depend on whether UBS gets into the fray or not but I think the deals will stabilize and they'll be around where they are right now. **SCHWARZKOPF** : If you're talking about the wirehouse, I imagine they'll just stay where they are, but the regional firms and other firms I think are flattening out to lowering. They have such a big pipeline that they're not going to chase it. They're not going to throw out 100% upfront deals. Their deals are 50 to 70%. **KING** : It's going to stay the same. If UBS joins the fray and I think they will, they'll keep it level. I don't think Wells Fargo will become competitive. **WILLIS** : Because of the cost of money I'm very bullish on deals but it's almost inconceivable to think of them going any higher. Of course we think that every year, don't we? Maybe they go a little higher is my vote. **PETERSON** : Michael [King] and I have been doing this a long time, since the beginning of the 20th century I guess, and we've seen deals come and go. But when they come back they never come back lower. So even if they go away for awhile when they come back, brokers always say, 'Well I'll just wait until they get bigger and better.' The deals have to be as strong as they are now to counter the retention packages. If UBS comes up with a retention package, you know, those deals aren't coming down, not if (firms) want to increase their assets.•**OWS** : What is the future of the independents in terms of competition to the wirehouses?**DIAMOND** : It's tremendous competition. We're seeing more high quality advisors going independent. It'll never be equal to wirehouse-to-wirehouse, especially as deals are high. But the more advisors realize that product is a commodity and they can service their clients as well or better in the independent space, it'll remain a major thorn in the side to the wirehouses. **SARCH** : Entrepreneurialism is alive and well in terms of new firms. There seems like there's a new firm virtually every week that I'm hearing about. Not all of them are going to stay credible and stay around but a number of them made such a splash that you can't ignore them. More than ever wirehouse advisors are seeking out what I call an alternative solution. **WILLIS** : We've seen the trickle pickup in terms of people moving to that space. It's never the avalanche that's predicted; trends don't change that much. But when people decide to move and become independent and begin to grow equity in something they own, become a business owner, something they can sell at the end of the line, that's when things start to move. But it is a slow, long process. **PETERSON** : Well let's just look at a statistic with LPL, for example. LPL has more million-dollar producers than any brokerage firm in the United States. They also have more $200,000 producers than any brokerage firm in the United States. They are a huge, huge operation and they get bigger every year. They have 36 internal recruiters right now scattered around the country.That's up from 28 last year. Their numbers are astounding. Independence has become a real, real force to be reckoned with. **DIAMOND** : Independence is not one size fits all like it used to be. You can create your own firm as a broker-dealer, or an RIA, or you can plug into an already established firm.There are the consolidator firms where the consolidator buys a portion of your business and you become a partner in the overall entity so there are choices. For an advisor who's willing to be more long-term greedy, meaning with a five to seven year break-even period versus taking a wirehouse deal, the economics of being a business owner can be very sexy. © 2016 SourceMedia, Inc. All rights reserved. Content originally published in On Wall Street. No further distribution, reuse, or republication permitted without the written consent of SourceMedia Inc. For more from On Wall Street, go to: http://www.onwallstreet.com/. | The Hire Powers Speak Out | News | On Wall Street | Unknown | 0.00045 | 33.1484 | 32.6634 | 32.8714 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.1951 | 33.4742 | 33.4871 | 33.3734 | 30.369 | 27.3116 |
NVEC | NVE Corporation | Technology | Semiconductors | https://www.nasdaq.com/articles/smallcap-nanotech-company-nve-wade-slomes-highest-conviction-holding-heres-why-2010-01-05 | 2010-01-05 04:44:00 | Markets|SLAB|AVGO|TXN|HON|ADI|VSH | ** [Wade Slome](http://investingcaffeine.com/) submits:**Wade W. Slome, CFA, CFP is President and Founder of Newport Beach, California based [Sidoxia Capital Management, LLC](http://www.sidoxia.com/index.asp?initpage=Home) . He managed one of the ten largest growth funds in the country ($20 billion in assets under management) at American Century Investments, and currently manages a hedge fund in addition to separate customized accounts for a selective client base at his firm.• • •**What is your highest conviction stock position in your fund?**I don't really have a highest conviction stock, per se , in my fund since I treat all my stocks like children - I love them all. Having said that, **NVE Corp. (ticker: NVEC)** is a holding of mine that exhibits many of the characteristics I look for in an investment. The Eden Prairie, Minnesota based company is named after "Nonvolatile Electronics," which refers to memory technology that retains data even when power is removed - a critical attribute for certain applications. **Tell us a bit about the company and what it does. **NVE Corp. is a market leader in nanotechnology sensors, couplers, and MRAM intellectual property (Magnetoresistive Random Access Memory). NVE's microscopic technology enables the transmission, acquisition, and storage of data across a broad array of applications, including implantable medical devices, mission critical defense weapons, and industrial robots. Major customers include St. Jude Medical, Inc. ([STJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STJ&selected=STJ)) ), Starkey Laboratories, Inc., and the U.S. Government.The company's coupler and sensor businesses have been ridiculously profitable. Even over a period covering one of the worst global financial crises in decades, NVE managed to increase its operating margins from an already very respectable 40% range in Fiscal 2007 (ending March) to a stunning 56%+ level in Fiscal 2009.Beyond sensors and couplers, NVE Corp. is optimistic about the potential for the MRAM market. However, outside of a few one-time licensing fees, NVE is currently generating effectively zero revenues from this nascent storage technology. Rather than produce the technology, NVE Corp. is looking to leverage their IP portfolio by licensing out the patents and subsequently receiving royalties from the MRAM device manufacturers. MRAM technology uses magnetic fields to record information, but unlike tape recorders in which a short section of tape holds magnetic information, with MRAM data it is held by electrons. Believe it or not, this method is highly reliable and is very power-efficient relative to other storage technology alternatives. Currently, the problem with MRAM is the cost prohibitive manufacturing requirements relative to other memories (such as DRAM, SRAM, and Flash), but costs are expected to come down over time. For some MRAM believers, the technology is considered the "Holy Grail" because it may have the potential to combine the speed of SRAM, the density of DRAM, and the non-volatility of Flash memory in a universal source.If the unproven potential of MRAM ever blossoms, the broad portfolio of NVE Corp.'s MRAM patents should represent a very sizable profit opportunity. Of course, NVE Corp. must first establish the validity of its MRAM intellectual property and appropriately charge and collect royalties for IP usage. How big can the MRAM market be? Some size the MRAM market in the billions and Toshiba has stated they expect the MRAM market to surpass the size of the traditional memory markets by 2015. No matter how one measures the size of the market, there will be a substantial revenue opportunity for NVE Corp. if every smart-phone, gaming device and laptop exclusively uses universal MRAM - rather than a combination of DRAM, SRAM, and Flash technologies. **Can you talk a bit about the industry/sector? How much is this an "industry pick" as opposed to a pure bottom-up pick?**Generally speaking, I am a bottom-up investor. I may have concrete views on a particular industry, but the fundamentals of a company will be the main determinant of my investment thesis. Overall, I am looking for market-leading franchises that can sustain above-average growth rates for extended periods of time. These traits can come from either a company operating in a mature, sleepy industry (take for example Google in the advertising world) or from a more dynamic growth industry like nanotechnology in the case of NVE Corp.I believe the nanotechnology industry is in the very early innings of an innovation revolution with regard to new applications and products. Like semiconductors, the economies of scale and technological advances of NVE Corp.'s "spintronic" technology should continually allow faster, smaller, more reliable solutions at lower bit prices. In my view, this snowballing effect will only increase the penetration of nanotechnology solutions and introduce an ever increasing list of new applications. **Can you describe the company's competitive environment? How is this company positioned vis a vis its competitors?** NVE Corp. has competitors along all three of its spintronic businesses. In their sensor business, most of the competition comes from the makers of legacy electromechanical magnetic sensors, including HermeticSwitch, Inc., Meder Electronic AG (Germany), and Memscap SA (France).In the coupler space, NVE Corp. faces a larger list of well capitalized, household semiconductor names, including Avago ([AVGO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AVGO&selected=AVGO)) ), Fairchild Semiconductor International ([FCS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FCS&selected=FCS)) ), NEC Corporation, Sharp Corporation, Toshiba Corporation, Vishay Intertechnology ([VSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VSH&selected=VSH)) ), Analog Devices, Inc. ([ADI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADI&selected=ADI)) ), Silicon Laboratories Inc. ([SLAB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SLAB&selected=SLAB)) ), and Texas Instruments Incorporated ([TXN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TXN&selected=TXN)) ).A different set of competitors are searching for the MRAM holy grail, including the following companies: Crocus Technology SA (France), Grandis, Inc., MagSil Corporation, Spintec (France), Spintron (France), Spintronics Plc (([UK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UK&selected=UK)) )), and IBM.There is undoubtedly a ton of competition in the spintronics space, but as of October 2009, NVE Corp. has 52 issued U.S. patents and over 100 patents worldwide (either issued, pending, or licensed from others) - many focused on the potentially lucrative MRAM field. Although NVE Corp. has many competitors, they have dominant share in the coupler/sensor market when it comes to high-end, merchant supplied solutions. Moreover, on the MRAM side of the business, the company has already licensed its intellectual property to several companies, including Cypress Semiconductor ([CY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CY&selected=CY)) ), Honeywell International Inc. ([HON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HON&selected=HON)) ), and Motorola, Inc. ([MOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MOT&selected=MOT)) ). **Can you talk about valuation? How does valuation compare to the competitors?** Valuation is a key component for all my stock investments. In my valuation work I pore over the income statement, balance sheet and cash flow statement in deriving my price targets.One area helping NVE Corp.'s valuation case is its improving trend-line of profitability. Over the last 5 years alone, gross margins have gone from 40% to over 70% - not a bad business model if you can execute it. The company also has a pristine balance sheet. Not only does NVE Corp. have no debt, but it also is sitting on a growing mound of cash/investments (over $43 million), representing more than 20% of the company's market capitalization. Finally, the company in my view is attractively priced on a free cash flow basis (cash from operations minus capital expenditures), yielding around 6% of the total company value. **What is the current sentiment on the stock? How does your view differ from the consensus?**With small cap stocks like NVE Corp., sentiment and lack of liquidity can create gut-wrenching volatility. Unlike many growth investors who pay more attention to positive momentum factors (price direction), I welcome volatility as it allows me to find more attractive entry and exit points.That said, NVE Corp. hit a peak stock price north of $63 per share in early September fueled by 41% revenue growth in their June quarter (fiscal Q1). Subsequently, in fiscal Q2 (ending September 30th), revenue growth decelerated to +14% causing momentum investors to take NVE Corp.'s shares to the woodshed. With the stock down about -35% from its recent crest, I find the valuation only that much more attractive. Wall Street estimates are calling for further slowing in revenue growth in the coming quarter, so the short term sentiment may or may not continue to sour. Timing bottoms is inherently dangerous and not something I consider myself an expert at. Absent a major deterioration in fundamentals, I stand ready to add to my position if NVE Corp.'s share price falls and valuation metrics improve.I would argue the typical consensus view advocates selling shares when revenue growth slows. Many of my best performing stocks have been purchased during transitory periods of slowing or cyclical downturns. Let's hope that's the case with NVE Corp. **Does the company's management play a role in your position?**Absolutely. There is a continual debate over what is more important, the jockey or the horse. My investment philosophy puts more weight on the jockey than the horse. Obviously, I'm looking for the combination of a talented management team and a solid business model.When it comes to NVE Corp., Daniel Baker, Ph.D. has done a phenomenal job managing the hyper-growth profile of the company, while preserving prudent and conservative financial values. For the third year in a row, Dr. Baker was also recognized as one of the best U.S. CEOs in the semiconductors and semiconductor equipment industry by investment research and financial consulting firm DeMarche Associates.At the end of the day, it's difficult to argue with a track record of success. Since Dr. Baker took over, revenues have more than tripled, and earnings have grown from $0.01 in Fiscal 2001 to $2.04 in Fiscal 2009. **What catalysts do you see that could move the stock?**Since I hold a longer term investment horizon, catalysts are not a driving aspect to my investment process. But clearly, any additional evidence unearthed in the marketplace validating the growth in the MRAM market, or announcements confirming the value of NVE Corp.'s MRAM intellectual property, should provide support to the stock price.Beyond that, given where the stock is trading now, I believe merely continuing the execution on their sensor and coupler business provides adequate upside prospects. **What could go wrong with NVE Corp as a holding?**Investing in small cap technology stocks comes with a whole host of risks. Although I don't believe the positive scenario of critical mass MRAM commercialization is baked into the current stock price, I nevertheless understand any setbacks announced relative to NVE Corp.'s MRAM prospects or the industry's MRAM expectations will likely result in stock price pressure.NVE also has significant customer concentration, therefore a loss or cutback in sales from a lead customer will probably contribute to price volatility.From a macro perspective, the company has battled successfully through the economic crisis and proven itself somewhat recession resistant. Nonetheless, the company has sizeable exposure to the industrial segment and would not be immune from the "double-dip" economic recession scenario. Surely there are additional hazards to this investment, however these are some of the risks I am currently focused on. **Any closing thoughts?**NVE Corp. is not a stock for the faint of heart. However, for those who can stomach the volatility, I encourage you to do some more homework on NVE Corp. Not only will you learn about a phenomenally managed, very profitable, attractively priced nanotechnology company, but you will also gain insight into a leading force behind the eyes, nerves, and brains powering the electronic systems of our future. **Thank you, Wade. **My pleasure.See also [Intel Upside Is Far Greater than Downside](http://seekingalpha.com/article/182640-intel-upside-is-far-greater-than-downside?source=nasdaq) on seekingalpha.com | Smallcap Nanotech Company NVE Is Wade Slome's Highest Conviction Holding - Here's Why | News | SeekingAlpha | Unknown | 0.0003 | 41.271 | 41.3695 | 41.3795 | 42.7758 | 42.7758 | 42.7758 | 42.7758 | 42.7758 | 42.7758 | 43.9484 | 44.8194 | 44.1787 | 44.4253 | 44.4424 | 44.0976 | 44.3641 | 45.1508 | 41.1993 |
NG | NovaGold Resources Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/these-firms-could-skyrocket-heres-how-own-piece-all-them-2010-01-07 | 2010-01-07 10:30:00 | GDXJ|Markets|GDX | Trying to find untapped corners of the market has become increasingly challenging for exchange-traded funds (ETFs), but fund issuers have been up to the challenge.One particularly inventive offering by Van Eck fills a conspicuous gap for gold bulls -- and the timing couldn't have been better. There are several options for investors seeking exposure to world-class miners: there's **Goldcorp ([GG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GG&selected=GG)) )** , which I pointed out to readers in July. **Market Vectors Gold Miners ETF ([GDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GDX&selected=GDX)) )** , is another one we've talked about. Smaller "junior" gold miners have been off the ETF radar, until now -- which is unfortunate, because they outshine all others in a gold rally. **Profits and Pitfalls** For years, many junior miners were more speculation bets than investments.These smaller gold miners just don't have the stable income, generous lines of credit or huge gold reserves that their big brothers have. Many are still in the early exploration and development stages and don't have much to show for their efforts.But what some may see as a handicap can act as the exact opposite in the growth department. Say a junior miner discovers a promising deposit in the Australian outback -- this can send shock waves through the market -- and juice profits for many years to come. **NovaGold Resources ([NG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NG&selected=NG)) )** , for example, might not have much in the way of revenue yet. But the firm does have a 50% stake in Alaska's 27,000-acre Donlin Creek project. When the mine opens for business, it will yield 1.5 million ounces of gold each year for the next 12 years. That future production stream (and the promise of more around the bend) has propelled the shares on a powerful +288% run this year.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Nathan Slaughter Editor: Market Advisor Half-Priced Stocks The ETF AuthorityCharts like this show NovaGold's incredible run (and believe me, it's not the only one) and it's why I'm so intrigued with junior miners. **From Speculation to A Compelling 'Buy'**Junior miners carry unique risks -- but the rewards can be great. And now, a new ETF gives you a chance to own more than three dozen of them...The ETF is called **Market Vectors Junior Gold Miners (Nasdaq: GDXJ)** , and its well-rounded portfolio should help minimize the risks associated with junior miners while maximizing their rewards. GDXJ isn't the speculative bet that owning shares of an individual junior miner can sometimes be. The fund will still be somewhat volatile, but won't crash when a company has funding difficulties or trouble obtaining a permit somewhere. The fund holds junior miners operating in six different countries, so there's plenty of regional diversity, too.These junior miners are leveraged to gold bullion prices -- just like the big boys. When prices go up or down, so go the shares. But it also wouldn't surprise me to see several of these junior miners get acquired or sign lucrative partnership deals with bigger firms. And that can send shares soaring. **At the Top of 2010's Watch List** They're not exactly making any more of the yellow metal these days -- even with the improved technology. New gold discoveries typically exceeded 40 million ounces each year during the mid to late-90s, according to Van Eck, GDXJ's sponsor. Now, the gold industry is lucky to find one quarter of that each year.It stands to reason that when gold prices are climbing, these junior miners and their shareholders could have the most to gain. That's why these powerful little producers will be at the top of my watch list for 2010.GDXJ is a nice addition to the ETF menu for gold investors. As I said, the fund takes some of the speculation out of owning junior miners, but its still suited to more aggressive investors looking for more octane. The next time you hear somebody say a company is sitting on a potential goldmine -- keep in mind, these junior miners really are.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Disclosure: Nathan Slaughter does not own shares of any security mentioned in this article.Nathan SlaughterEditor:Market AdvisorHalf-Priced StocksThe ETF AuthorityP.S. -- Readers of my newsletter, The ETF Authority, know that I'm partial to gold in this economic climate (and I'm even more bullish on silver). I have not one, but two precious metals funds in my "Sector Trading" Portfolio. To learn more, click here.Disclosure: Nathan Slaughter does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | These Firms Could Skyrocket -- Here's How to Own a Piece of All of Them... | News | Nathan Slaughter | Unknown | 0.0002 | 6.36033 | 6.42 | 6.51877 | 6.47 | 6.49 | 6.50344 | 6.50632 | 6.54 | 6.58509 | 6.56007 | 6.56007 | 6.56007 | 6.5 | 6.69498 | 6.8036 | 6.85 | 5.52632 | 5.53701 |
AMTD | AMTD IDEA Group | Finance | Finance: Consumer Services | https://www.nasdaq.com/articles/will-2010-be-year-breakaway-broker-2010-01-19 | 2010-01-19 01:00:00 | Financial Advisors | Last year was a record year for breakaway brokers and this year could be even stronger, according to an executive at Fidelity Investments.The Boston fund company announced Tuesday that it helped a record 191 broker teams go independent last year. The brokers Fidelity helped transition to independence either started their own registered investment advisor firm, joined an existing RIA firm on Fidelity's platform or joined a broker/dealer client of National Financial, Fidelity's clearing arm."While brokers have been going independent for years, 2009 will likely be looked upon as a watershed year for movement," said Michael Durbin, the president of Fidelity Institutional Wealth Services, in a press release. "With the current market situation, we expect there to be even more movement in 2010."Durbin said, to help brokers that are considering becoming independent, Fidelity "will continue to invest in the resources they need to evaluate their options and make a smooth transition for themselves and their clients."Fidelity has long been recognized as a leading provider for brokers seeking independence. The company's Transition Solutions program offers a comprehensive suite of resources, including an array of consultation services to help brokers establishing an independent RIA.Fidelity isn't alone. Other companies, including TD Ameritrade, are working to help brokers transition to an independent RIA. In April, TD Ameritrade introduced its AdvisorLink program, which is designed to help advisors looking to buy, sell or merge their practices. Fred Tomczyk, TD Ameritrade's chief executive officer, said Tuesday on the company's earnings call that the breakaway broker market has been "very active" for the company in December and January.He said he expects more brokers to breakaway and move into the independent channel this year because "now that things have stabilized and the worst of the recession is behind us" advisors can begin to consider other alternatives. © 2016 SourceMedia, Inc. All rights reserved. Content originally published in Financial Planning. No further distribution, reuse, or republication permitted without the written consent of SourceMedia Inc. For more from Financial Planning, go to: http://www.financial-planning.com/. | Will 2010 Be the Year of the Breakaway Broker? | News | Financial Planning | Unknown | 0.0003 | 18.206 | 18.2777 | 18.1166 | 18.1301 | 18.1301 | 18.1301 | 18.1301 | 18.1301 | 18.1301 | 18.1301 | 17.9523 | 19.0682 | 18.5024 | 18.6858 | 18.4907 | 18.23 | 17.5174 | 17.3611 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/fund-manager-sean-hannons-highest-conviction-stock-holding-will-surprise-you-2010-01-21 | 2010-01-21 02:32:00 | ERIC|Markets|AMZN|SH|AAPL|NOK | ** [Sean Hannon](http://www.epicadvisorsllc.com/) submits:**Sean Hannon is president of [EPIC Advisors, LLC](http://www.epicadvisorsllc.com/) , a registered investment advisor offering separately managed accounts to clients, ranging from high net worth individuals to young families who are just starting to invest in the market. He's also the publisher of EPIC Insights, a weekly investment newsletter. Sean is among the highest-ranked risk-adjusted return investors on Covestor.com, a trade-sharing service that verifies trading activity and tracks performance.We had the opportunity to ask Sean about his single highest conviction holding in his portfolio, and he had a surprising choice - the out-of-favor mobile handset maker Nokia ([NOK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NOK&selected=NOK)) ). • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): Sean, what's your current thinking on this market, and what's your highest conviction stock position?****Sean Hannon (([SH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SH&selected=SH)) )):** In 2009 the rally off the March lows was powerful. Anyone picking individual stocks had a great year and those who focused on the smaller, more speculative stocks did even better. As we move from a year where the economy was bottoming and the recovery beginning to one where the economic recovery matures, I expect the market to transition as well. While the past year was one of capital gains, I expect 2010 to have high single digit price appreciation in a selective manner that forces investors to focus more on current income than price gains.Given the virtually non-existent return on cash and relatively low yields on bonds, I am focusing on a cheap stock paying an above market dividend: **Nokia ([NOK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NOK&selected=NOK)) )** . As the dividend is high and the price low, NOK offers both safety and return in what I expect to be a more difficult stock picking environment.NOK has three main business segments-devices and services, NAVTEQ, and Nokia Siemen Networks. The device segment is what NOK is best known for. It manufactures a range of mobile phones that appeal to a variety of consumers. By operating a truly global brand, NOK has entry level to smart phones and currently commands a 37% market share. The NAVTEQ segment focuses on applications for their phones and the network segment operates communication networks. **SA: How much of this is an "industry pick" as opposed to pure bottom-up pick?** **SH:** It was a combination of the two. When searching for current income, I wanted to find stocks that paid in excess of the 5-year Treasury note (currently 2.46%) and ideally more than the 10 year note (currently 3.72%). At the same time, I was looking for cheap companies who had missed the recent rally and would react to an evolving economy uniquely. The process led me to screen my research coverage universe of 250 companies for yields in excess of 3.5% that were trading below fair value. Once I had that initial screen, I applied fundamental bottom-up analysis to determine which stock to recommend. **SA: How would you describe Nokia's current competitive environment?****SH:** As a value investor, I am often left looking at companies that others have discarded. Whether it is a lack of new products or general lack of broad investor enthusiasm, the market typically pushes the stocks I buy below fair value only when apathy reigns. Realizing this, it is unsurprising to see me focused on companies facing either a difficult competitive environment or lacking a clear catalyst to dramatically increase prices.NOK enjoys the benefits of large scale yet faces an increasingly competitive environment. As the growth prospects are murky, the shares have declined to the level where the market questions if the company will begin growing again. Despite its dominant market share, most view NOK as a competitor with the wrong business model (it's focused on hardware more than software) that is too slow to adapt to the challenges brought by Apple ([AAPL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AAPL&selected=AAPL)) ) and Research in Motion ([RIMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RIMM&selected=RIMM)) ). NOK has focused its smart phone offerings on email, music, and maps, and has not kept pace with the many apps featured by its competitors. The limited product offering has raised legitimate questions about sales growth and margin compression and has many viewing NOK as a slowly declining business. **SA: Can you talk about valuation?****SH:** Buying into a slowly declining business model carries risks, but NOK has the financial strength and discipline to generate growth in the future. With the price of the stock as low as it is, investors can buy the shares with a reasonable margin of safety. At a forward P/E of 15, NOK trades below both its peer group and historical average. I often use a variety of models to determine fair value, and the results for NOK become fairly consistent. Whether it is historical valuations, earnings yield, or dividend discount methods, a stabilizing business will drive the price toward $20. Combine the price target with a 3.9% dividend yield and investors receive a high level of current income while awaiting a business turnaround. **SA: What is the current sentiment on NOK? How does your view differ?** **SH:** As mentioned earlier, my interest is piqued when everyone else has already moved onto the next idea. Such a lack of enthusiasm allows me to buy stocks when they are trading below their fair value and then wait for the market to recognize the true value of the stock. Recently, the market has been focused on the highest growth and most speculative stocks. If you expect that pattern to persist, continue chasing the best performers, but I believe this rally is ready to move toward a slower growth, consolidating period.If I am correct, chasing Amazon.com ([AMZN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMZN&selected=AMZN)) ) and Apple ([AAPL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AAPL&selected=AAPL)) ) will be the wrong approach. NOK has been left behind as investors continue buying the high beta names. However as the market begins looking toward the more mature businesses I favor and recognizes the benefit of collecting nearly 4% in dividend income in a low rate environment, NOK will thrive. Therefore, owning this stock will provide both income and capital gains in what I expect to be a more range-bound, low growth environment. **SA: Does the company's management play a role in your position?****SH:** It does. NOK has a history of responding to difficult business environments. As the market share leader, competitors are always attacking the franchise and management has done an excellent job of responding to these challenges in a disciplined fashion. As a shareholder in an unloved value stock, I am keen on management teams who protect the balance sheet, look to prudently grow their business, and avoid taking unnecessary risks. All of us have seen cheap stocks get even cheaper as value stocks morph into value traps. The best way to avoid such a fate is for efficient, disciplined management to work for the shareholder's best interest. **SA: What catalysts do you see that could move the stock?** **SH:** When I buy stocks I believe are trading below their fair value, an identifiable catalyst is attractive, but unnecessary. If you have done your homework, understand the business, and purchase the shares at a cheap enough price, patience is your best tool. Eventually the market will recognize fair value and the price will quickly rise. Recognizing this, I do not look for potential catalysts to drive NOK higher, but ones clearly exist. Its performance should be tied to the ability to launch a competitive smart phone and any progress toward that goal will give the stock a quick lift. **SA: What could go wrong with NOK?****SH:** Considering the valuation and sentiment, I see little risk for steep price declines. Granted, unexpected news can always knock a cheap stock down, but the risk is contained. Instead, I believe the largest problem one could face is relative performance. NOK will do extremely well in an environment where the broad market struggles, interest rates remain low, and the search for income pushes investors toward safe stocks. If interest rates begin increasing sharply, investors may look to short-term bonds for guaranteed income and eschew stocks.Also, if 2010 looks like 2009 where every dip is bought and stocks continually march higher, investors will flow to high beta names that offer greater price appreciation. Therefore, NOK is meant for those who want income in a lower-growth environment without having to chase more speculative, higher-yielding alternatives. **SA: Thanks so much for your time and sharing your thesis on NOK, Sean. ****SH:** My pleasure. **Disclosure: Sean Hannon is long NOK** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] See also [Apple iPad: A Digital Tollbooth to Consumers](http://seekingalpha.com/article/185101-apple-ipad-a-digital-tollbooth-to-consumers?source=nasdaq) on seekingalpha.com | Fund Manager Sean Hannon's Highest Conviction Stock Holding Will Surprise You | News | SeekingAlpha | Unknown | 0.0002 | 25.4421 | 25.7967 | 25.6401 | 26.2065 | 26.2407 | 26.2131 | 26.2311 | 26.216 | 26.216 | 26.216 | 26.473 | 26.92 | 26.6794 | 29.3187 | 29.6222 | 29.6407 | 23.6121 | 23.2232 |
JBLU | JetBlue Airways Corporation | Consumer Discretionary | Air Freight/Delivery Services | https://www.nasdaq.com/articles/stock-own-out-favor-sector-2010-01-22 | 2010-01-22 11:28:00 | AMR|Markets | It's been more than a decade since **JetBlue's (Nasdaq: JBLU)** planes first took to the skies. As the company's business model gained altitude, consumers have continually voted for JetBlue as their favorite carrier. Yet even with its legions of fans on Main Street , supporters on Wall Street are harder to find: shares have steadily fallen, from $30 in 2003 to the mid single digits these days. A massive oil spike, followed by an unprecedented economic downturn, has put the whammy on profits. But those clouds are parting, and the low-cost carrier looks ready to climb back to cruising altitude.To be sure, airline stocks have already recovered off of their 2009 lows, especially carriers most at risk of bankruptcy, such as **UAL (Nasdaq: UAUA)** , parent of United Airlines, and **AMR ([AMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMR&selected=AMR)) )** , parent of American Airlines. But if history is any guide, airline share prices should keep rising as investors see profit margins steadily rebound from a combination of sharp cost cuts and rising traffic. Right now, profit reports highlight the heady cost cuts. In the next several years, rising revenues should expand bottom lines. Of course, investors remain wary that the economy will truly emerge in fighting shape, which could bring new troubles for the legacy carriers with high debt levels. In this industry, a rebound in profits can quickly lead to unexpected losses when air travel slumps. The charm of JetBlue is its rain-or-shine business model. The carrier has been able to maintain a healthy balance sheet and a lean cost structure, which has enabled JetBlue to report an operating profit every year since 2001. Larger carriers have a habit of losing loads of money whe the economy is not at full bore. So if the economy sinks anew, JetBlue is far better-positioned to weather the storm than its larger brethren.More than likely, though, the economy is headed for a rebound as unemployment peaks and the process of job creation -- and consumer spending -- starts anew. And JetBlue, with nearly $1 billion to spend, can continue to expand its route network, while some of its larger peers must conserve cash in the face of still-high debt loads.So what's the growth plan? For starters, JetBlue has emerged as a key player in the Caribbean vacation market, serving an increasing number of island countries from its Northeast and Florida hubs. As tourism rebounds, the carrier can expand the number of flights serving those destinations. In addition, the company has shed some programs that were initially put in place to win the heart of consumers. These days, you'll pay much more to make a last-minute flight change, and the company's website does a much better job of squeezing higher revenues on flights where few open seats remain. The international expansion and pricing changes haven't yet perked up profits (thanks to the double-hit of an energy spike and an economic crash), but they soon will.How tough has it been? In the third quarter of 2009, the average paid fare was just $127, -11 % below year-earlier levels. But a drop in fuel costs, and a sharp eye on other operating expenses enabled the carrier to revert from a loss in the third quarter of 2008 to a small profit in the same period a year later -- despite those lower seat prices.Now, the trick is to boost ticket prices back to pre-recession levels. That has already started in recent months, and thanks to far fewer planes flying across the industry, it now looks as if carriers, including JetBlue, will be able to push prices back up over the course of 2010. If sales and profits start to rise as expected, JetBlue is likely to move back on to the expansion track. The airline industry is very sensitive to demand. A plane that is 70% full is a money loser, while a plane that is 90% full is a big source of profits. JetBlue saw its load factor fall below 80% for the first time in 2009, yet still managed to eke out a profit. In 2010, analysts expect the load factor to climb back into the low 80s. Analysts also expect per share profits to rebound back to the $0.40-$0.50 range -- impressive considering 2010 is likely to be a tepid year for economic growth and consumer spending. By 2011, JetBlue's profit picture could prove even brighter.-- David StermanContributorStreet AuthorityDisclosure: David Sterman does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | The Stock to Own in this Out-of-Favor Sector | News | David Sterman | Unknown | 0.0002 | 5.62424 | 5.62841 | 5.73077 | 5.77632 | 5.77 | 5.68147 | 5.67682 | 5.71 | 5.64 | 5.5967 | 5.5967 | 5.5967 | 5.59635 | 5.63629 | 5.61 | 5.6 | 4.78579 | 5.41719 |
ODC | Oil-Dri Corporation of America | Consumer Discretionary | Miscellaneous manufacturing industries | https://www.nasdaq.com/articles/more-meets-eye-2010-01-26 | 2010-01-26 07:00:00 | ICMAX|Markets|WSFL|STZ|TDW | Many investors regard small-cap stocks as highly volatile growth plays, but this broad category is far more variegated than this stereotype would suggest. We recently spoke with Eric Cinnamond, manager ofIntrepid Small Cap ([ICMAX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ICMAX&selected=ICMAX)) ), whose stock-picking acumen propelled the fund to the top of Morningstar's Small Value category in 2007 and 2008. Here Eric discusses his investment strategy and the dangers of judging a small-cap stock by its classification. **What's your strategy when it comes to equities selection?**We take a bottom-up approach to investing that emphasizes fundamental analysis and valuation work, but we don't use sell-side research. We focus on absolute returns and don't worry about benchmarks and sector weights, which makes us a bit more flexible than the typical fund and allows us to gravitate to whatever names offer value. We evaluate stocks by discounting free cash flow, though we value the assets of energy firms, financial companies and other asset-heavy businesses. We tend to focus on established companies that generate a lot of cash and have weathered a lot of economic cycles, qualities that enable us to have a high degree of confidence in our valuations. We find that if you keep the ball on the fairway you tend to do much better than swinging for the fences; we don't hit a lot of homeruns, but we also don't strike out a lot.We generate our returns through a thoughtful, slow-and-steady type of investment strategy that isn't overly complicated--though it can be hard to stick to, especially during speculative periods. Back in 2007 leveraged-buyout firms were paying outrageous prices for mundane businesses, extrapolating crazy earnings growth or extremely low financial costs over a long period. Of course, that approach backfired in late 2008. **Speaking of hysteria, there was a huge run in small-cap stocks through much of 2009. What drove that?**Small-cap stocks traded at incredibly low values in March 2009, when the Russell 3000 sank to roughly 350 from a peak of 850. At that time, we found a boatload of good values because many investors acted as though the economy were dead and would never to operate again. Given the degree of overreaction on the downside, a lot of the rebound struck us as quite rational--a return to fair value. Today small-cap stocks trade at fair value, though some segments may be slightly overvalued. We're still finding opportunities, but it's definitely not as easy as it was.I think speculation is definitely the culprit if stock prices head 20 to 30 percent higher from current levels. Market cycles are so compressed, and memories are getting shorter and shorter--you had the tech bubble, the housing bubble and oil at USD140--so I wouldn't rule out another speculative period. And I think investors are almost conditioned to expect another bubble; given the prevalence of the word these days, it's seemingly a permanent feature of the new landscape. Although the stocks that we choose to include in our portfolio are a big part of the fund's success, it's important to remember that selectivity also implies avoiding certain stocks or industries.We steered clear of banks and didn't have any energy or cyclical companies in mid-2008, when that group was in vogue. Then energy names made up almost 23 percent of the portfolio at one point in late 2008; we had moved into cyclical names because those were getting hit the hardest and that's where we were finding value. Uncharacteristically, we also found value in companies with debt--a quality we typically avoid. These were ideas we usually wouldn't pursue, but the discounts were so large we thought the potential upside was worthwhile.That being said, when we buy energy companies or stocks issued by companies with debt, we never take on operating and financial risk at the same time.We built a stake in an energy company called **Tidewater** ([TDW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDW&selected=TDW)) ), which has no debt net of cash. This limited financial risk was offset by operating risk; Tidewater's business is relatively volatile, and its stream of cash flow can range between USD2 and USD8.On the other side, we bought **Constellation Brands** ([STZ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STZ&selected=STZ)) ), the market leader in wine. Constellation has some debt exposure, but US wine consumption is growing 2 to 3 percent per year. In this instance, the financial risk is offset by the steady nature of the company's business. Higher-risk cyclical names have rallied the most this year, and we've recently sold those that hit our valuation targets. Our most recent ideas have been in line with our long-term strategy of investing in companies that boast a strong balance sheet, generate ample free cash flow and operate in relatively stable end markets--boring stuff, but it works. **Your portfolio features a lot stocks that are typically classified as early-cycle investments. What's your take on the recovery and its sustainability?**A lot of small caps are in unique industries and don't really fit neatly into a classification scheme. One of the stocks we own is **Oil-Dri Corp of America** ([ODC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ODC&selected=ODC)) ), which falls into the consumer discretionary or industrial category. One could also argue that it's a mining company. The firm mines clay, dries it, and then processes it into cat litter. To me, that's a consumer staple. I have a cat and, believe me, you have to buy cat litter; you will not like the results if you replace it with paper litter. **PetSmart** ([PETM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PETM&selected=PETM)) ) is one discretionary name that continues to generate quite a bit of cash. It's slowed its growth from 100 stores a year to 40 stores, transforming itself into a cash cow rather than a growth company. But the specialty retailer's comparable sales have remained positive--hardly what one would expect from a consumer-discretionary name.Another example is **Core-Mark Holding Company** ([CORE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CORE&selected=CORE)) ), the second-largest distributor to convenience stores. Over the past 10 years it has grown sales to convenience stores over 7 percent annually. Nevertheless, it's often categorized as a transportation company--even though it lacks the high capital expenditures and volatile day rates and utilization that are part and parcel to that business segment. It's not as risky as the transportation label would suggest. Our investments in the energy patch are another case where there's more than meets the eye. Because we focus on companies with the strongest balance sheets, our holdings are less volatile than other names with levered balance sheets. Regardless of where we are in the economic cycle, Tidewater will continue its steady performance and its long-lived assets will only increase in value. We always lean toward lower-risk plays, but sometimes an industry pie chart doesn't capture that lower risk portfolio.Because of our efforts to limit risk while generating total returns, the fund has posted a negative annual return on only one occasion: The market turmoil of 2008 resulted in a 7 percent loss. Of course, this approach also limits our upside. If the markets were to go up 20 to 30 percent, I would expect our fund to lag. However, thus far in 2009 we've outperformed, which is unusual for us; because so many high-quality names traded at a discount, we were more aggressive than usual in our investments. **The fund is still extremely light on banks. Is there just not any value there?**I recently bought my first bank stock in about five years when I added **Washington Federal** ([WSFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSFL&selected=WSFL)) ). It's got no subprime exposure and had equity to assets of around 15 percentDespite having loads of capital, they participated in the Treasury Dept's Troubled Asset Relief Program to establish their strength; once management realized that participation in the bailout wasn't necessarily a sign of health, the bank quickly repaid the government. Washington Federal was one of the first banks to tell the truth about its book of business, quickly classifying loans as nonperforming. This high number of nonperforming loans has declined fairly quickly. The banks I'm skeptical of are the ones with low loan losses and low loan-loss provisions; I just don't believe them. The banks are so hard to value because they lump so many assets under one category that it's really hard to decipher the quality of their books. ******What's your best advice for investors over the next year?**Be careful, the time to take risk was 6 to twelve months ago. Patience is the most important virtue for successful investors.This article first appeared in the January 2010 issue of [Louis Rukeyser's Mutual Funds](http://rukeyser.com/newsletter_online/newsletters.asp). PF Associate Editor Benjamin Shepherd is editor of LRMF and [Louis Rukeyser's Wall Street](http://rukeyser.com/newsletter_online/newsletters.asp). Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | More Than Meets the Eye | News | Investing Daily | Unknown | 0.0002 | 15.6784 | 15.7882 | 15.804 | 15.8893 | 15.8893 | 15.8893 | 15.8893 | 15.8893 | 15.8505 | 15.8473 | 15.9684 | 16.1 | 15.9709 | 16.0219 | 15.5998 | 15.8538 | 15.7995 | 16.3585 |
CCNE | CNB Financial Corporation | Finance | Major Banks | https://www.nasdaq.com/articles/four-banks-thrilled-about-obamas-bank-plan-2010-01-29 | 2010-01-29 12:17:00 | NKSH|Markets|GSBC | In 1999, Congress repealed a piece of Depression-era legislation commonly referred to as the Glass-Steagall Act that was intended to reduce risk at banks by limiting investment activities. In the wake of the financial crisis, this move has taken a lot of heat -- and not without reason. After all, the repeal of Glass-Steagall enabled commercial lenders like Citigroup to dip into the kinky investment acronyms we have come to despise -- CDOs, SIVs and other items that resulted in huge losses at Citi and others. Obama's proposal would prevent commercifal banks from ever taking such bets again and putting depositors and the credit market at risk. The president has also proposed limits on financial mergers, in an effort to prevent the bailout of another bank that is "too big to fail."Let's be honest, though. This move is undoubtedly driven by election-year politics as much as the financial crisis and big banks make an easy scapegoat for Democrats. Just look at Obama's other proposal -- a "Financial Crisis Responsibility Fee" that is expected to raise $90 billion over the next 10 years, with around 60% of the revenue coming from the 10 largest financial firms. Clearly the White House is looking to mitigate fallout from the big bonuses and profits posted recently by financial companies that took taxpayer cash. **What Does This Mean for Investors?**Well, two main things really: It will force the big banks to get smaller, and it will allow the smaller banks to thrive.Right now, **Bank of America** ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ), **Citigroup** ([C](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=C&selected=C)) ), **JP Morgan Chase** ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) and **Wells Fargo** ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) ) are the titans of the financial sector. Not only were these firms "too big to fail" before the financial crisis, they are actually even bigger now that competitors have been dropping out. Consider that Wachovia was the fourth-largest bank holding company in the United States based on total assets before its forced marriage with Wells Fargo in December 2008, or that BAC's acquisition of Merrill Lynch made the company the world's largest wealth manager. The White House clearly wants to stop this trend and force banks to get smaller by splitting into investment and commercial entities, and by prohibiting major mergers. If Obama's plan is enacted, the going for major financial companies just got even tougher. **The Big Opportunity for Investors** For a long time, big banks have focused on their investment divisions because that's where the money is. After all, why would JP Morgan Chase kill itself making dozens of small business loans when it posted a record profit $11.7 billion for all of 2009 thanks in large part to its investment banking operations? Regional banks just can't compete with profits like that. But if Obama forces banks to separate their investments and hedge funds from commercial operations, the playing field has suddenly been leveled. In fact, since the bigger banks have been widely criticized for high fees and poor customer service for smaller clients, there is reason to believe a rebirth of regional banks is likely. If Obama gets his way, this could present a huge opportunity for investors.Whatever happens, one thing is clear: The White House has declared war on the big banks, and the financial sector will remain in turmoil as a result until some truce is reached. "Much of the turmoil of this recession was caused by the irresponsibility of banks and financial institutions on Wall Street," President Obama said in a radio address on Jan. 16. "These financial firms took huge, reckless risks in pursuit of short-term profits and soaring bonuses."Those are fighting words. And if the president has his way, it's a fight the big banks are going to lose. **Four Bank Stocks Boosted by Glass-Steagall 2.0**To capitalize on this trend, I advise investing in fundamentally superior regional banks. Here are four such banks I expect to do very well in the coming months as a result of these planned changes in the financial industry:**Prosperity Bancshares** ([PRSP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PRSP&selected=PRSP)) ) -- Prosperity is a slightly larger outfit than the other banks listed below, but not by much. The company has a market cap of under $2 billion and operates about 200 full-service banking locations in and around Texas. However, it's what PRSP does with its small operations that makes all the difference. The stock recently hit a 52-week high in late January thanks to a blowout earnings report. The company has grown its profits for each of the last four quarters and has topped Wall Street expectations every time. That's a track record of success hard to come by in any industry, let alone the financial sector. **Great Southern Bancorp** ([GSBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSBC&selected=GSBC)) ) -- This thinly traded regional bank only sees a volume of about 30,000 shares a day, but is a great buy because it has stuck to low-risk consumer banking in the Missouri area and weathered the credit crisis very easily. The company's three previous quarterly reports boasted earnings surprises of 760%, 2,300% and 855% -- so there's plenty of reason to expect this stock to keep flying high in 2010. **CNB Financial** ([CCNE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CCNE&selected=CCNE)) ) -- CNB is an even smaller outfit, with a volume of only a few thousand shares a day and only a few dozen full-service branches around Pennsylvania. But remember, smaller is better under the new rules -- especially when the company is run right. [My proprietary stock screening tool gives this company top marks for sales growth, earnings growth and earnings momentum](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?q=CCNE) . What's more, you get a nice dividend of 66 cents per share for owning this very affordable stock. **National Bankshares** ([NKSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NKSH&selected=NKSH)) ) -- Serving southwestern Virginia, **** this small regional bank shares the low volume and small market cap of the previous two picks. But it also shares the tremendous growth potential and low-risk philosophy that makes the other pair great buys. NKSH has been consistently profitable even during the depth of the recession thanks to loan losses of just 0.77%. Shares of this bank are actually higher now than at any point in the last three years. That's a sign of a bank that has weathered the financial crisis just fine and is doing business the right way. **** I expect these four banks to win out big-time in the months ahead. But be careful if you decide to purchase shares since a little volume can really cause these tiny picks to go flying. I strongly recommend protecting yourself by using a limit order within 25 cents of the previous day's close. Otherwise, you could overpay for shares of these stocks, and hurt yourself and other investors. **Related Articles:** - ** [Are Geithner's Days Numbered?](http://www.investorplace.com/experts/louis_navellier/articles/are-timothy-geithners-days-numbered.html)** - ** [Five Reasons to Buy Ford Stock Now](http://www.investorplace.com/experts/louis_navellier/articles/five-reasons-to-buy-ford-stock.html)** - ** [13 Dow Stocks That Are Doomed](http://www.investorplace.com/experts/louis_navellier/articles/gallery/stocks-in-the-dow-to-sell.html)** | Four Banks Thrilled About Obama's Bank Plan | News | Louis Navellier | Unknown | 0.0002 | 15.0838 | 14.9985 | 15.1662 | 15.1083 | 15.1173 | 15.1173 | 15.1173 | 15.1361 | 14.9743 | 14.9702 | 14.9702 | 14.978 | 14.978 | 15.1065 | 15.194 | 15.5653 | 15.213 | 16.3421 |
GSBC | Great Southern Bancorp, Inc. | Finance | Major Banks | https://www.nasdaq.com/articles/four-banks-thrilled-about-obamas-bank-plan-2010-01-29 | 2010-01-29 12:17:00 | NKSH|Markets|CCNE | In 1999, Congress repealed a piece of Depression-era legislation commonly referred to as the Glass-Steagall Act that was intended to reduce risk at banks by limiting investment activities. In the wake of the financial crisis, this move has taken a lot of heat -- and not without reason. After all, the repeal of Glass-Steagall enabled commercial lenders like Citigroup to dip into the kinky investment acronyms we have come to despise -- CDOs, SIVs and other items that resulted in huge losses at Citi and others. Obama's proposal would prevent commercifal banks from ever taking such bets again and putting depositors and the credit market at risk. The president has also proposed limits on financial mergers, in an effort to prevent the bailout of another bank that is "too big to fail."Let's be honest, though. This move is undoubtedly driven by election-year politics as much as the financial crisis and big banks make an easy scapegoat for Democrats. Just look at Obama's other proposal -- a "Financial Crisis Responsibility Fee" that is expected to raise $90 billion over the next 10 years, with around 60% of the revenue coming from the 10 largest financial firms. Clearly the White House is looking to mitigate fallout from the big bonuses and profits posted recently by financial companies that took taxpayer cash. **What Does This Mean for Investors?**Well, two main things really: It will force the big banks to get smaller, and it will allow the smaller banks to thrive.Right now, **Bank of America** ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ), **Citigroup** ([C](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=C&selected=C)) ), **JP Morgan Chase** ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) and **Wells Fargo** ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) ) are the titans of the financial sector. Not only were these firms "too big to fail" before the financial crisis, they are actually even bigger now that competitors have been dropping out. Consider that Wachovia was the fourth-largest bank holding company in the United States based on total assets before its forced marriage with Wells Fargo in December 2008, or that BAC's acquisition of Merrill Lynch made the company the world's largest wealth manager. The White House clearly wants to stop this trend and force banks to get smaller by splitting into investment and commercial entities, and by prohibiting major mergers. If Obama's plan is enacted, the going for major financial companies just got even tougher. **The Big Opportunity for Investors** For a long time, big banks have focused on their investment divisions because that's where the money is. After all, why would JP Morgan Chase kill itself making dozens of small business loans when it posted a record profit $11.7 billion for all of 2009 thanks in large part to its investment banking operations? Regional banks just can't compete with profits like that. But if Obama forces banks to separate their investments and hedge funds from commercial operations, the playing field has suddenly been leveled. In fact, since the bigger banks have been widely criticized for high fees and poor customer service for smaller clients, there is reason to believe a rebirth of regional banks is likely. If Obama gets his way, this could present a huge opportunity for investors.Whatever happens, one thing is clear: The White House has declared war on the big banks, and the financial sector will remain in turmoil as a result until some truce is reached. "Much of the turmoil of this recession was caused by the irresponsibility of banks and financial institutions on Wall Street," President Obama said in a radio address on Jan. 16. "These financial firms took huge, reckless risks in pursuit of short-term profits and soaring bonuses."Those are fighting words. And if the president has his way, it's a fight the big banks are going to lose. **Four Bank Stocks Boosted by Glass-Steagall 2.0**To capitalize on this trend, I advise investing in fundamentally superior regional banks. Here are four such banks I expect to do very well in the coming months as a result of these planned changes in the financial industry:**Prosperity Bancshares** ([PRSP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PRSP&selected=PRSP)) ) -- Prosperity is a slightly larger outfit than the other banks listed below, but not by much. The company has a market cap of under $2 billion and operates about 200 full-service banking locations in and around Texas. However, it's what PRSP does with its small operations that makes all the difference. The stock recently hit a 52-week high in late January thanks to a blowout earnings report. The company has grown its profits for each of the last four quarters and has topped Wall Street expectations every time. That's a track record of success hard to come by in any industry, let alone the financial sector. **Great Southern Bancorp** ([GSBC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSBC&selected=GSBC)) ) -- This thinly traded regional bank only sees a volume of about 30,000 shares a day, but is a great buy because it has stuck to low-risk consumer banking in the Missouri area and weathered the credit crisis very easily. The company's three previous quarterly reports boasted earnings surprises of 760%, 2,300% and 855% -- so there's plenty of reason to expect this stock to keep flying high in 2010. **CNB Financial** ([CCNE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CCNE&selected=CCNE)) ) -- CNB is an even smaller outfit, with a volume of only a few thousand shares a day and only a few dozen full-service branches around Pennsylvania. But remember, smaller is better under the new rules -- especially when the company is run right. [My proprietary stock screening tool gives this company top marks for sales growth, earnings growth and earnings momentum](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?q=CCNE) . What's more, you get a nice dividend of 66 cents per share for owning this very affordable stock. **National Bankshares** ([NKSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NKSH&selected=NKSH)) ) -- Serving southwestern Virginia, **** this small regional bank shares the low volume and small market cap of the previous two picks. But it also shares the tremendous growth potential and low-risk philosophy that makes the other pair great buys. NKSH has been consistently profitable even during the depth of the recession thanks to loan losses of just 0.77%. Shares of this bank are actually higher now than at any point in the last three years. That's a sign of a bank that has weathered the financial crisis just fine and is doing business the right way. **** I expect these four banks to win out big-time in the months ahead. But be careful if you decide to purchase shares since a little volume can really cause these tiny picks to go flying. I strongly recommend protecting yourself by using a limit order within 25 cents of the previous day's close. Otherwise, you could overpay for shares of these stocks, and hurt yourself and other investors. **Related Articles:** - ** [Are Geithner's Days Numbered?](http://www.investorplace.com/experts/louis_navellier/articles/are-timothy-geithners-days-numbered.html)** - ** [Five Reasons to Buy Ford Stock Now](http://www.investorplace.com/experts/louis_navellier/articles/five-reasons-to-buy-ford-stock.html)** - ** [13 Dow Stocks That Are Doomed](http://www.investorplace.com/experts/louis_navellier/articles/gallery/stocks-in-the-dow-to-sell.html)** | Four Banks Thrilled About Obama's Bank Plan | News | Louis Navellier | Unknown | 0.0002 | 22.5909 | 22.4001 | 21.9511 | 22.3863 | 22.3634 | 22.3476 | 22.3743 | 22.4867 | 22.475 | 22.4744 | 22.4744 | 22.4818 | 22.4818 | 22.6627 | 22.6726 | 21.9542 | 22.1727 | 22.8455 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/valueclick-fund-manager-mike-comptons-highest-conviction-pick-heres-why-2010-02-01 | 2010-02-01 09:29:00 | MC|Markets|MSFT|GOOG|OMC | ** [BlueCut Capital](http://bluecutmarkets.com/) submits:**Mike Compton is founder of [BlueCut Capital](http://bluecutcapitalpartners.com/) . Utilizing a value-based approach, BlueCut seeks to consistently generate positive absolute returns through disciplined security analysis, identifying situations where security mispricing is large and risk is minimal.We had the opportunity to ask Mike about his highest conviction holding in his portfolio, and he chose online advertising service provider ValueClick ([VCLK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VCLK&selected=VCLK)) ), which competes in this increasingly consolidated field with Google ([GOOG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GOOG&selected=GOOG)) ), Yahoo ([YHOO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=YHOO&selected=YHOO)) ), Microsoft ([MSFT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSFT&selected=MSFT)) ), AOL ([AOL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AOL&selected=AOL)) ) and smaller players like Omnicom ([OMC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OMC&selected=OMC)) ) and WPP Group ([WPPGY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WPPGY&selected=WPPGY)) ). • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Mike Compton (([MC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MC&selected=MC)) )):** ValueClick ([VCLK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VCLK&selected=VCLK)) ) is my highest conviction idea and largest long holding. VCLK an independent, performance-based digital marketing company with a market cap of just under $900MM. Their platform provides affiliate marketing, lead generation, comparison shopping, and technology to advertisers and publishers of content.When you aggregate all of ValueClick's portfolio, they reach over 80% of all internet users on a monthly basis. This is roughly in line with the number of eyeballs Google and Yahoo get per month. **SA: How much is this an "industry pick" as opposed to a pure bottom-up pick?****MC:** I initially became interested in the company from the bottom-up. ValueClick is a cash flow story which is supported by industry trends. In my worst case scenario, they will generate an 8% free cash flow yield this year. **SA: Why do you think ValueClick was passed over in the big round of acquisitions in this sector a couple of years ago?****MC:** ValueClick was passed on in the acquisition binge because its business was messy (it still is). I had always been of the opinion that a financial buyer would be the only interested party due to the FTC investigations, a lack of focus resulting from acquisitions, and Google as a competitive threat. However, given the current valuation and cash flow situation, I view this company as equally attractive to financial or strategic buyers. **SA: What sort of growth do you expect in the online advertising market overall, and what do you believe VCLK's market share will be?****MC** : We believe that the market opportunity is substantial, with internet ad spending growing from $28b in 2008 to roughly $60b by 2012, driven by e-commerce (Interactive Ad Bureau and BC estimates are even higher). ValueClick has an audience the size of Google and Yahoo, reaching 150m+ unique users per month (comScore). With respect to their market share, it's difficult to quantify. Our assumptions compound their growth at half that of the 20% CAGR of the overall market to achieve our target. **SA: In the core units at VCLK (Ad Serving, Affiliate, and Display units), can you break down which appears most/least capable of growth, and why?** **MC:** We see the most growth in the display segment, with the potential to do $100m in revenue as ad spending catches up to consumer's internet consumption. Forrester Research estimates 35% of media consumption is internet based, while only 12% of ad spending is internet based. ValueClick's performance based model is positioned to benefit from this secular growth. **SA: Can you talk about valuation? How does valuation compare to the competitors?****MC:** The valuation is cheap, dirt cheap. The EV/EBITDA multiple is less than 5x 2010 estimates. The earnings multiple is 1/3 of the online marketing group and 1/2 that of the e-commerce. Now, is this a value-trap? I don't believe so, and here's why:1) The Street cash flow models assume linear growth. As digital ad spending trends become more visible, estimates are going in one direction… and it isn't down.2) $100 million in Free Cash Flow for FY 2009, which doubles to $200+ million by 2012. This sounds ambitious, but it may be understated. 3) $2+/share in cash, no debt, and $100 million of operating credit capacity provide the ability for ValueClick to ride out any Macro events that push out the coming tidal wave of internet ad spending. If you think tidal wave is bold statement, consider what happens as conglomerates start wholesale shifts in their marketing budgets. We're on the cusp of a shift toward targeted messages, with quantifiable results, being the norm vs. the exception. Does Procter & Gamble do this overnight? No. Will they demand it? Yes. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****MC:** Sentiment in the stock is relatively neutral. Disappointing results out of the lead generation business has soured investors' appetite for the stock. Rewind two years and the Street was touting this company as one of the best plays on internet advertising's secular growth. I believe this view will again become consensus. **SA: What catalysts do you see that could move the stock?****MC:** ValueClick is an acquisition target. Microsoft, Yahoo, News Corp, Time Warner, or an ad agency could all use some help in the online advertising arena. ValueClick's platform offers a quick vehicle to get exposure to this space. Financial buyers have to be looking at this as well. Buy it, keep the Ad Serving, Affiliate, and Display units and sell off the rest. Forget the vertical sites (they are trying to build their own content), chuck the lead generation, and keep the core. We aren't talking about a big deal for these guys, less than $1.25b. Also, stabilization in the business units will promote an upward bias to Street estimates. The cash flow generated by VCLK is attractive, but analysts don't stick their neck out on a name where "visibility" is limited. **SA: What could go wrong with this stock pick?****MC:** Google is a serious threat on two fronts. They control the algorithms that impact search traffic for VCLK's comparison shopping business. Secondly, they have a similar platform. This is why the multiples are out of line with the industry. However, I believe a more pronounced than expected online ad cycle will develop, and ValueClick will participate in this trend. **SA: Thanks, Mike. ****MC:** My pleasure. **Disclosure: BlueCut Capital is long VCLK** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [12 S&P 500 Stocks with Attractive Valuations](http://seekingalpha.com/article/187219-12-s-p-500-stocks-with-attractive-valuations?source=nasdaq) on seekingalpha.com | ValueClick Is Fund Manager Mike Compton's Highest Conviction Pick - Here's Why | News | SeekingAlpha | Unknown | 0.0005 | 25.9909 | 24.2696 | 24.4843 | 24.4973 | 24.323 | 24.6653 | 25.0014 | 25.2619 | 25.5934 | 25.6285 | 25.9253 | 25.9253 | 26.235 | 25.8093 | 25.4806 | 23.6903 | 25.6738 | 23.5093 |
MLP | Maui Land & Pineapple Company, Inc. | Finance | Real Estate | https://www.nasdaq.com/articles/profit-toyotas-deceleration-2010-02-01 | 2010-02-01 09:57:00 | F|Markets|TM | Just when it seemed the auto industry was beginning to rebound, **Toyota Motor Corp. ([TM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TM&selected=TM)) )** has gone into reverse.Toyota -- the world's number one selling auto manufacturer -- recently recalled 2.3 million cars in the United States, due to faulty floor mats which trap accelerator pedals and cause sudden and unexpected acceleration. The 2.3 million vehicle recall came on top of a recall of 4.3 million vehicles in October. While Toyota is working on a solution with its supplier, the company has also halted production in six of its North American manufacturing plants. As well, it is suspending sales on eight of its most popular vehicles, including the Camry and Corolla -- which accounted for 57% of U.S. sales last year.The news is having a devastating effect on the reputation of the Japanese company. Even after the problem is fixed and production resumes, trust will be difficult to restore. This can affect both sales and profits.Traders have already voted -- with their feet, so to speak. The stock lost nearly $7 on Wednesday, January 27th. Volume was 3.48 million shares, about four times normal levels. On Thursday, the stock tried to rally, but gave up its gains.As the chart below shows, Toyota's peak of $91.97 hit on January 19th may mark a major top. First that is the level where a major downtrend line intersects the chart. Toyota has failed at a crucial technical juncture.Second, there is a shelf of resistance at this same level dating back to August through October 2008. TM's failure to penetrate this resistance is a second technical failure. [Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Editor: Double-Digit TradingThis week's large bearish engulfing candle means the stock has penetrated both its 10- and 30-week moving averages.From a technical standpoint, Toyota is likely to continue falling for several more dollars until it hits support at around $72. Another ledge of support exists near $70 as well.However, if the company is not able to find a quick fix for the accelerator pedal defect -- and continues to suspend manufacturing and sales as a result -- an accelerated downtrend could result.In that case, TM could go as low as the mid-50s before finding support. The mid-50s is a major support zone for the stock and an area in which it formed a triple bottom between September of 2008 and April of 2009. Relative strength index , stochastics and MACD have all recently given sell signals. All show that Toyota is not yet oversold.Fundamentally, Toyota like other car companies has been under pressure.Between fiscal year 2008 and 2009, revenue dropped nearly -26%, from $262 billion to $208 billion. In 2010 revenues are expected to take another huge hit, declining to $157 billion, a drop of more than -25%.Sales aren't expected to climb back up until 2011 when analysts anticipate revenue will increase to $259 billion.Earnings have fared little better. Toyota's 2008 earnings per share were $5.40. In 2009, analysts expect the company to lose $1.39. The company still won't be in the black in 2010 when it is projected to lose $0.29 a share.In 2011, analysts expect an earnings recovery. They anticipate Toyota will earn $3.20 a share. At current levels, the 2011 forward price to earnings (P/E) ratio is over 25.11. In other words, the company is not cheap. The price to sales ratio suggests Toyota is not cheap either. **Ford ([F](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=F&selected=F)) )** , which is expected to be profitable in 2010, has a price to sales ratio of 0.33. In contrast, Toyota's is more than double that at 0.73.The gap on the daily chart between January 26th and January 27th stretches between $81.43 and $86.78. If it is indeed a breakaway gap, it should not be filled. My hunch is Toyota will find temporary support between $70 and $73 and then continue lower.To learn more how you can profit from my trading suggestions, you will soon be able to subscribe to my newsletter Double-Digit Trading . In this week's issue, I recommend buying a master limited partnership ([MLP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MLP&selected=MLP)) ) and shorting a beverage company that could bring you strong double-digit gains.Action to Take : Based on the analysis above, here's how I plan to trade TM: - Short TM at the close of trading - Set a stop loss at $87.05 - Target Price = $65.05 - Potential Profit = **+15.5%** [Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Join Our "First-to-Know" List for Dr. Pasternak's Double-Digit Trading!The good doctor is about to open his new trading service to subscribers for the first time. Enter your email to be notified as soon as subscriptions are available!Disclosure: Melvin Pasternak does not own shares of any security mentioned in this article. © Copyright 2001-2016 StreetAuthority, LLC. All Rights Reserved. | Profit From Toyota's Deceleration | News | Melvin Pasternak | Unknown | 0.0005 | 2.61 | 3.14187 | 3.14208 | 2.97702 | 2.93527 | 2.80388 | 2.75569 | 2.78448 | 2.98548 | 3.22547 | 3.23466 | 3.23494 | 3.25325 | 3.1046 | 3.11057 | 2.81926 | 3.45125 | 4.62029 |
RDUS | Radius Health, Inc. | Consumer Discretionary | Industrial Specialties | https://www.nasdaq.com/articles/are-bulls-brave-enough-pull-2010-02-03 | 2010-02-03 08:26:00 | XAU|Markets|DHI|AA|XLE|FCX|SPX | After an opening stumble, stocks rallied on news that pending sales of existing homes rose in December more than forecasters had predicted. Upgrades of Alcoa ( ** [AA](http://moneycentral.msn.com/detail/stock_quote?symbol=aa)** ) and Freeport-McMoRan ( ** [FCX](http://moneycentral.msn.com/detail/stock_quote?symbol=fcx)** ) by Citigroup ( ** [C](http://moneycentral.msn.com/detail/stock_quote?symbol=c)** ) brought support for the materials stocks, and an upgrade of Schnitzer Steel ( ** [SCHN](http://moneycentral.msn.com/detail/stock_quote?symbol=schn)** ) by UBS ( ** [UBS](http://moneycentral.msn.com/detail/stock_quote?symbol=ubs)** ) helped steel stocks.Homebuilder D.R. Horton ( ** [DHI](http://moneycentral.msn.com/detail/stock_quote?symbol=dhi)** ) posted its first quarterly profit since the beginning of the housing slump. Its shares rose 1.3% and contributed to a round of buying in the housing sector. However, volume still hasn't reached the levels seen on the downside, and investors are eyeing the jobs report due late this week for confirmation of a stronger economy.Energy stocks did well yesterday, as did other commodity-based stocks. This was due in large part to a small decline in the U.S. dollar, which was down 0.2%.At the close, the Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) rose 111 points to 10,297, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) gained 14 points to 1,103, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) rose 19 points to 2,190.Volume on the NYSE approached 1.2 billion shares, with advancers over decliners by more than 3-to-1. The Nasdaq traded 756 million shares, and advancers led by 4-to-3.Crude oil for March delivery settled $2.80 higher at $77.23 a barrel, and the Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) gained 74 cents to $57.04. April gold rose $13 to $1,118 an ounce, and the PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) gained 42 cents, closing at $156.55. **What the Markets Are Saying** While the Dow had its second triple-digit day in a row, rising 2.3% for its best performance since early November, it is still more than 4% below its December high. Like Monday's rally, yesterday's triple-digit pop also lacked volume. Together the two days averaged only about 1.1 billion shares on the NYSE, while the decline from the mid-January high averaged more than 1.5 billion.But the two-day rally has produced some good news: The bounce has broken both the Dow and the S&P 500 from their bearish channels by penetrating the resistance lines delineating the tops of the channels, and then closing above the highest intraday prices in the channels.This sets them up nicely for a run at the 50-day moving averages just above yesterday's closes. For the Dow that number is 10,433, and for the S&P 500 it is 1,115.And there is another positive: After our most-watched internal indicators reached their lowest numbers since the March bottom, each has reversed up. The stochastic even flashed a buy signal on both the Dow and the S&P 500 yesterday. So, after the shock of losing so much ground in such a short time, investors seem willing to grab at some undervalued gems. But the question is, do the bulls have enough courage and cash to close above the 50-day averages and reestablish the intermediate uptrend lines that were so quickly obliterated?**Today's Trading Landscape****Earnings to be reported before the opening include:** Alvarion, Ameristar Casinos, Arrow Electronics, ATMI, AudioCodes, Beacon Roofing Supply, Black & Decker, Brinks, Carlisle Companies, Comcast, CommVault Systems, Dawson Geophysical, Diebold, Enbridge, Headwaters, Health Net, International Paper, Invesco Mortgage Capital, Investment Technology, ITT, Lazard, M/I Homes, Magellan Midstream Partners, MarketAxess Holdings, National Oilwell Varco, Ness Technologies, O2 Micro, Pfizer, Polo Ralph Lauren, Powell Industries, RADVision, Roper Industries, Ryder System, Savvis, Schering-Plough, Silicon Labs, Thermo Fisher, Time Warner, Travelzoo, United Micro, Western Union and Wolverine World Wide. **Earnings to be reported****after the close:** 99 Cents Only, Affymetrix, Akamai Technologies, Ameriprise Financial, Annaly Mortgage, Assurant, Atwood Oceanics, AvalonBay Communities, Blackboard, Brightpoint, Bristow Group, Broadcom, Cadence Design Systems, CB Richard Ellis Group, CBL & Assoc, Central Garden & Pet Co., Chemspec International, Cisco Systems, Concur Technologies, Covenant Transport, Dolby Labs, Double-Take Software, Dyncorp nternational, Entropic Communications, Equifax, Equity Residential, FEI Company, Fidelity National Financial, Furniture Brands, Genomic Health, Hain Celestial, Harris Stratex, Hill-Rom Holdings, Horace Mann, IDEX Corp., InfoSpace, Kimco Realty, Markel Corp., Measurement Specialties, MEMC Electronic Materials, Monster Worldwide, Neurocrine Biosciences, Newport, Novellus Systems, ON Semiconductor, Open Text, Opnet Technologies, Orleans Homebuilders, Pericom Semiconductor, Regal-Beloit, Regency Centers, RightNow Technologies, Sangamo Biosciences, Selective Insurance Group, Silicon Storage Technology, Spartan Stores, Spherion, Standard Pacific, Stanley Furniture, Steel Dynamics, Symmetricom, THQ, Triumph Group, TrueBlue, United Rentals, Universal Forest, Virage Logic, Visa, Walter Energy, WGL Holdings, Willis Group Holdings and YUM! Brands. **Economic reports due:** MBA purchase applications, ADP employment report, ISM non-manufacturing index (the consensus expects 51), and EIA petroleum status report. **Quarterly earnings news (reported vs. estimate):** - Alvarion ( ** [ALVR](http://moneycentral.msn.com/detail/stock_quote?symbol=alvr)** ) 1 cent vs. 0 cents - Brinks ( ** [BCO](http://moneycentral.msn.com/detail/stock_quote?symbol=bco)** ) 41 cents vs. 49 cents - Headwaters ( ** [HW](http://moneycentral.msn.com/detail/stock_quote?symbol=hw)** ) -23 cents vs. -15 cents - Pfizer ( ** [PFE](http://moneycentral.msn.com/detail/stock_quote?symbol=pfe)** ) 49 cents vs. 50 cents - Thermo Fisher ( ** [TMO](http://moneycentral.msn.com/detail/stock_quote?symbol=tmo)** ) 91 vs. 88 cents - Time Warner ( ** [TWX](http://moneycentral.msn.com/detail/stock_quote?symbol=twx)** ) 55 cents vs. 52 cents - United Micro ( ** [UMC](http://moneycentral.msn.com/detail/stock_quote?symbol=umc)** ) 6 cents vs. 4 cents - Wolverine World Wide ( ** [WWW](http://moneycentral.msn.com/detail/stock_quote?symbol=www)** ) 45 cents vs. 45 cents **Related Articles:** - [5 Ways to Tell a Stock is Headed Up](http://www.optionszone.com/trading-ideas/gallery/bullish-chart-patterns.html) - [Use Trendlines to Predict the Market's Next Move](http://www.optionszone.com/technical-analysis/technical-indicators/use-trendlines-to-predict-the-markets-next-move.html) - [What the Bleep is a Fibonacci?](http://www.optionszone.com/learn-more/jim-woods/what-the-bleep-is-a-fibonacci.html) **Go Big By Going Small: 5 Small Cap Stocks to Buy Now** Small, innovative companies are watching their earnings explode -- and they are the next 10-baggers. Investing pro Louis Navellier reveals his secrets to identifying these small-cap innovators, plus five of his favorite small-cap stocks. [Download your FREE profit guide here.](http://www.optionszone.com/order/?sid=SQ3134) | Are the Bulls Brave Enough to Pull This Off? | News | Unknown | Unknown | 0.0005 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/why-cloud-computing-provider-rightnow-fund-managers-highest-conviction-holding-2010-02-03 | 2010-02-03 08:43:00 | MSFT|Markets|SAP|CRM|ORCL|AAPL | Matt McCall is the president of [Penn Financial Group](http://www.pennfinancialgroup.com/) , an investment advisory firm offering personalized portfolio management. Matt is also the editor of several newsletters including [The ETF Bulletin](https://www.pennfinancialgroup.com/exchange_traded_funds_bulletin_financial.php) , which publishes two real-time portfolios based on PFG's proprietary top-down approach to investing.We had the opportunity to ask Matt about his highest conviction holding in his portfolios and his method for selecting this pick. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): Hi Matt, what is your highest conviction stock position in your fund - long or short?****Matt McCall (([MM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MM&selected=MM)) )):** RightNow Technologies ([RNOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RNOW&selected=RNOW)) ) is one of our firm's largest holdings and one of our top plays for the next 12 to 24 months. Our initial entry occurred on 9/17/09 with an approximate entry price of $12.30/share.The majority of our firm's stock picks are generated through a top-down approach that is highly dependent on the state of the overall market and the sector. RightNow falls into the software industry and more specifically the cloud computing sector. Last year cloud computing was a term that most investors never heard before, unless they were employed in the technology industry. In just the last few months the niche sector has made quite a splash with a story in Barron's and a large increase in media coverage as the stocks heat up.Investors are always looking for the next big thing in technology, basically the next Apple ([AAPL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AAPL&selected=AAPL)) ). I am not sure cloud computing will be that big, however the upside is limitless for this sector due to the fact that this technology is needed as companies look for more mobility and storage demands increase. **SA: How would you describe RightNow's competitive environment?****MM:** Most stocks in the niche sector can offer their clients two great advantages: their software and services will help increase productivity and at the same time lower costs. When coming out of a recession it is imperative for companies to control their expenses, but at the same time they realize they must ramp up production when demand comes back. They're coming to realize that one way to do this is with products from the cloud computing sector. Specifically, RightNow is positioned well because their focus is on helping their clients give a great customer experience. The happier the customers, the higher the sales for RightNow's clients and even more important the already high retention rate will follow.The company is focusing on three areas: the web, social, and contact center. The web segment will include web self-service, web chat, email management, and more. The social segment helps companies build and expand their brand through the social web and at the same time monitor any customer concerns that may pop up on these sites. The contact center will facilitate contact with customers to make the experience as successful and profitable for the company. In the end, RightNow is offering specific services that are designed for the future of customer relationship management and well positioned when coming out of a recession. **SA: What are your thoughts on RightNow's valuation?****MM:** One of the reasons I have RightNow as a top pick for our firm has to do with the valuation and growth prospects. Based on the First Call earnings estimates, the company is expected to earn 35 cents for 2009, 47 cents in 2010, and 74 cents in 2011. The growth is impressive going forward, but so is the fact the company has moved from losing money in 2007 (lost 40 cents per share) and 2008 (lost 4 cents per share).To find a price target for RightNow I use the earnings projections along with the growth of the earnings. Earnings growth from 2009 to 2010 would be 34%, followed by 57% growth from 2010 to 2011. To make things simple, the average growth over the next two years will be 46%. If RightNow were to have a PEG Ratio (P/E divided by growth rate) of 1.0, based on 2011 earnings the stock would be fairly valued at $34.04 per share in the next two years. This is more than a 100% gain from the current stock price. Using the 2010 earnings per share estimate of $0.47, the fair value of RightNow would be $21.62, also a nice premium from the current price.Even though the estimate for 2011 may appear high to some, it is likely on the low-end. Consider the PEG Ratio of 1.0 and compare that to the current PEG of RightNow, which is 1.37. If we were to value the stock with a PEG of 1.37 in 2011 the target price would increase to $47. For the stock to come close to the $47 target it will require some help from the overall market with a continued uptrend. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****MM:** The most recent Standard & Poor's report has a 12-month price target of $31 for the stock. Their target price is derived by applying a 3.5X enterprise value-to-sales multiple to their 2010 sales estimate. Our price target of $34 is based on 2011 numbers that look out a little further than S&P, but they are not far from each other at all.According to the First Call Earnings Valuation report, a total of 16 analysts are currently covering RightNow and there are 8 Holds, 4 Buys, and 4 Strong Buys. The range of earnings estimates for 2010 and 2011 vary greatly among the analysts. We based our evaluation on the mean consensus estimate for the next two years, but the actual numbers may come in well above or below expectations. In 2010 the yearly EPS estimate ranges from $0.34 to $0.66. The following year the range is $0.60 to $0.93. The reason for the wide range of estimates has to do with the fact the company has high growth potential and the potential to sign lucrative new deals in the coming years. There is no correct way to predict how the company will execute and if the global economy will cooperate. **SA: What catalysts do you see that could move the stock?****MM:** The main driver behind the stock price of RightNow will be continued growth in the quarterly earnings reports. Because a high multiple is built in, the earnings announcements will be vital to continue the trend of the stock. Another catalyst will be the growing connection the company has with the US Government. For over ten years, RightNow has been working with the US Government to provide software solutions to the Army, Air Force, Department of Defense, and nearly every US cabinet level agency. **SA: What could go wrong with this stock pick?****MM:** With RightNow or any stock in the market there is the slim chance of a double dip recession as the government spending ceases. This would result in an economic slowdown that ultimately will cause firms to reel in spending on products offered by RightNow. Another concern is that the cloud computing phenomenon is simply a fad and not a lasting trend - as I believe. Finally, there is the chance the earnings estimates are too lofty and the price of the stock does not catch up to the valuation in the coming years. **SA: Thank you very much, Matt. ****MM:** My pleasure. **Disclosure: Matt McCall is long RNOW** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [Toyota's PR Problem Endemic Throughout Asia](http://seekingalpha.com/article/187514-toyota-s-pr-problem-endemic-throughout-asia?source=nasdaq) on seekingalpha.com | Why Cloud Computing Provider RightNow Is This Fund Manager's Highest Conviction Holding | News | SeekingAlpha | Unknown | 0.0005 | 24.2696 | 24.4973 | 26.235 | 25.8093 | 25.8093 | 25.8093 | 25.8795 | 26.1586 | 26.248 | 26.0733 | 25.8405 | 25.8405 | 25.56 | 23.6903 | 24.4806 | 24.4806 | 24.1537 | 23.0991 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/consumer-discretionary-stock-fund-manager-charles-liebermans-highest-conviction-pick-2010 | 2010-02-04 07:36:00 | RCL|Markets|CCL|CL | ** [Charles Lieberman](http://www.advisorscenter.com/) submits:**Dr. Charles Lieberman serves as chief investment officer for [Advisors Capital Management L.L.C.](http://www.advisorscenter.com/) , a New Jersey-based money management and investment advisory firm. A graduate of MIT with a bachelors degree in economics, Charles earned a Ph.D. in economics from the University of Pennsylvania before beginning his professional career as an academic at the University of Maryland and, subsequently, at Northwestern University. After five years in academia, Dr. Lieberman joined the Federal Reserve Bank of New York as head of its Monetary Analysis Staff, before coming to Wall Street for 11 years. In 1997, he left Chase to found, along with co-founder Henry Kaufman, the global macro hedge fund Strategic Investors Management L.L.C. and to serve as its managing partner and principal strategist.We had the opportunity to ask Charles what his single highest conviction stock holding currently is in his portfolio. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): Charles, what is your highest conviction stock position in your fund - long or short?****Charles Lieberman (([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) )):** We think that Royal Caribbean Cruise Ltd. ([RCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RCL&selected=RCL)) ) is an outstanding investment selection for those looking for a leveraged way to play the economic recovery and the return of the consumer. Carnival ([CCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CCL&selected=CCL)) ), its primary competitor, is also a strong investment choice, but RCL is the less expensive way to play the cruise lines and provides more upside potential.We see RCL as trading cheaply even after its rebound off totally distressed levels during the credit crisis. The upside that still remains with respect to a full economic recovery is very substantial.Investors dumped all consumer discretionary companies during the credit crisis and it is hard to find companies with more exposure to discretionary spending by consumers than cruise companies that sell vacations. Revenues fell sharply during the recession and the high cost of fuel in 2007 did not help. Throw in the problem of paying for new ship deliveries at a time of credit scarcity and it made for a perfect storm that crushed stock values.The company's net revenue yield dropped from $184/day in 2008 to an estimated $158/day in 2009. RCL traded above $46 in February 2007, but plunged to less than $5.50 in early March 2009, as investors worried about the possibility of the company defaulting on its debt. Its financially stronger competitor, Carnival, suspended dividend payments late in 2008 to ensure that its ample cash flow would enable that company to provide the cash to pay for future ship deliveries. RCL followed suit shortly thereafter. Since the March 2009 lows, RCL's stock has been on a strong recovery path, closing just above $26 last week. RCL's new Oasis of the Seas, which began commercial operations in December 2009, is an absolute monster of the seas. It offers 5,400 berths, 16 decks, and all the usual amenities, plus a few exceptional ones, such as a zip line, two surf simulators, rock climbing walls, a carousel and a science lab for teens. The ship offers seven "neighborhoods", each with a famous "godmother" who participated in the launch ceremony, including Gloria Estefan, Michelle Kwan, and Dara Torres. It is the size of a Nimitz class aircraft carrier, so the ship is a destination all by itself. RCL has been garnering premium fares for the ship about 50% over comparables, although such premiums should erode over time and may be exerting some downward pressure on other fares. Allure of the Seas, its sister ship, is scheduled to begin service later this year. Both ships will help RCL garner much better yields and improve cash flow. **SA: What are your thoughts on RCL's valuation?****CL:** Valuations for RCL, despite the ongoing recovery in the share price, remain quite low, when measured either by enterprise value per berth or stock price to book value. RCL also trades at a lower P/B of 0.7x compared to Carnival at 1.2x off its most recent quarter. The consensus of analysts expects earnings of 69 cents in 2009, rebounding to $1.47 per share in 2010, which we consider light. We see close to $4/share in earnings in 2012.The book value of RCL's fleet is above $15 billion and its market value is above $13 billion, both well above the company's debt outstanding of $8 billion. This implies that the company has plenty of assets to use as collateral against which it can borrow to meet future ship delivery costs, aside from its rebounding cash flow. The company currently has 39 ships in its fleet upon taking delivery of Oasis of the Seas, with another four on order.The company has already arranged for funding of all of the Solstice-class ships it has ordered and arranged unsecured financing guarantees from Finland's export credit agency for the Allure of the Seas, its second Oasis-class ship. Debt is likely to peak later this year around $9.5 billion, after the company takes delivery of the Allure of the Seas. With financing all locked up, the threat of default has been greatly diminished. Capital expenditures, which is running above $2 billion per year to reflect deliveries of the Oasis-class ships, should fall below $1 billion annually beginning in 2011. Debt repayment should begin in earnest at that point. **SA: How would you describe RCL's competitive environment?****CL:** Competition in the industry is somewhat limited, as Carnival is the 800 pound gorilla and Norwegian Cruise Lines is a distant third. If Carnival were to start a price war with RCL, it would be very costly to Carnival, so the industry appears very well settled in as a near duopoly with both companies competing more on itinerary and amenities than on price. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****CL:** Expectations for this company cover the waterfront (sorry about the pun), mirroring views on the economic environment. Those who expect a double dip recession, expect RCL (and the industry) to continue to struggle. However, sentiment is improving and economic bears are now more inclined to expect only a weak recovery. That economic backdrop is sufficient for this company to get an earnings recovery underway, although a slow recovery suggests it could take years for the company to realize its peak earnings potential. In contrast, we think economic forecasts are a bit light. Even the bulls on the stock expect yields to recover only gradually. So there's plenty of room to exceed market expectations.While we think a strong recovery by historical standards is unlikely, we do expect the economy to exceed rather meager expectations. Just as importantly, with unemployment so high, the next economic expansion could last a relatively long time, which suggests that the company could achieve a high level of earnings for a number of years, which would allow the balance sheet to be deleveraged more quickly.With delivery of the company's remaining Solstice and Oasis class ships, which will represent roughly 25% of total capacity measured by value, the bull-case earnings potential for RCL could be above $5.00 per share by 2012. At 15 times earnings, the shares could be worth $75. More realistically, earnings should be closer to $4.00 in 2012, suggesting a price target of $60, more than twice last week's closing price, assuming a slightly lower than market earnings multiple. But the industry should enjoy above average growth long-term, since only a small fraction of the population has ever taken a cruise vacation, so a slightly higher than market multiple is warranted. **SA: What could go wrong with RCL?****CL:** There are a number of significant risks to the shares realizing the above valuation. Vacations are clearly a major form of discretionary spending, so if the economic recovery is derailed for any reason, the company's earnings recovery will also be affected adversely. Also, operating leverage is high, so incremental changes in revenue have a large effect on profitability. Piracy and terrorism are also possible adverse events that might discourage bookings, although the cruise ships are too big for pirates to board at sea and the cruise lines take security very seriously. Excess capacity that depresses fares is unlikely to be a problem for some years into the future, as new orders for ships will take time to deliver. However, a surge in oil prices would hurt by raising fuel costs. Even so, cruise vacations are very competitive with other vacations, so the companies have some flexibility to raise prices to maintain margins. Financing arrangements are already in place for future ship deliveries. So, the company's risk in the event of a second credit crisis is limited to the willingness of its banks to roll over existing debt. Since the banks almost certainly don't wish to enter the cruise business, they should roll those loans, as long as bookings hold up. **SA: Thank you very much, Charles. ****CL:** Happy to participate. **Disclosures: ACM owns RCL in client accounts and Charles Lieberman also holds a long position personally. **If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [Swatch Performs Well, But Others Offer Better Potential](http://seekingalpha.com/article/187730-swatch-performs-well-but-others-offer-better-potential?source=nasdaq) on seekingalpha.com | This Consumer Discretionary Stock Is Fund Manager Charles Lieberman's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0004 | 24.4843 | 26.235 | 25.8093 | 25.56 | 25.56 | 25.56 | 25.56 | 25.1499 | 24.9656 | 24.5187 | 24.0564 | 23.9535 | 23.7142 | 24.4741 | 24.3827 | 24.3708 | 24.5383 | 22.7926 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/cvs-fund-manager-tyler-danns-highest-conviction-holding-heres-why-2010-02-05 | 2010-02-05 01:33:00 | WMT|Markets|TD|DCF|CVS | ** [Tyler Dann](https://www.invescoaim.com/portal/site/aim) submits:**Tyler Dann is a portfolio manager for the $5 billion [AIM Charter Fund](http://www.invescoaim.com/portal/site/aim/menuitem.83ee090d98b022b99293b174e14bfba0/) , a large-cap core, open-end mutual fund ranked four stars by Morningstar Inc. The management team looks to invest in good businesses with high or increasing returns on capital that have strong growth prospects and are temporarily mispriced. AIM Charter Fund is distributed by Invesco Aim Distributors, Inc. Mr. Dann has 16 years of industry experience and is a CFA charterholder.We had the opportunity to ask Tyler about his single highest conviction stock holding. • • • ******Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Tyler Dann (([TD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TD&selected=TD)) )):** The AIM Charter Fund is a long-only mutual fund, and so CVS, which is the stock I will be discussing below, is a long position. It is a top 10 position in the AIM Charter Fund.The company operates retail drugstores with approximately 5,500 stores in the United States, primarily under the CVS Brand name, and operates one of the three large pharmacy benefit management (([PBM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBM&selected=PBM)) )) companies in the U.S., Caremark. **SA: Can you talk a bit about the industry/sector? How much is this an "industry pick" as opposed to a pure bottom-up pick?****TD:** Our company analysis encompasses significant business analysis, so to some extent our stock selection is informed by industry factors. We build the Charter Fund portfolio on a stock-by-stock basis and it is fairly concentrated, so we do a lot of company-specific due diligence. Our research process is focused on identifying what we call "growth/value anomalies", meaning companies we believe are fundamentally sound, in good businesses, managed by generally able and honest people, trading at a discount to our appraisal of intrinsic worth.Usually what creates this discount is some sort of controversy, industry or management-driven. In the case of CVS, the weak economy and the overall competitive landscape has caused some weakness in the company's consumer-facing businesses, to be sure; as well, some of the controversy in the stock relates to the pall broadly cast over health care companies as the federal government has mulled health care reform over the past 12 months. However, we attribute most of the controversy to concerns over management execution in the PBM business, which is discussed below. **SA: How would you describe CVS's competitive environment?****TD:** The company's retail pharmacy business faces an extremely competitive environment. Walgreens ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) and Wal Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) are two fierce competitors, and CVS is viewed as having some reasonably good real estate but in general a slightly inferior competitor. There is some threat to their business from online competitors as well, but the good news for CVS is that they and Walgreens have been able to take share from Rite Aid ([RAD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RAD&selected=RAD)) ) and from small local pharmacies.The Caremark PBM business is a high volume, low margin, good return business characterized by low client turnover. Client contracts are typically three to five years, and there is an annual renewal season each fall. This most recent renewal season did not go well for Caremark, as their renewal rate was as low as it's been in recent memory - at 92%. That is good and bad - they did not execute well, to be sure, but they still were able to keep 92% of their clients! Their primary competitors, Medco ([MHS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHS&selected=MHS)) ) and Express Scripts ([ESRX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ESRX&selected=ESRX)) ), have been aggressively marketing against Caremark, and this, coupled with some client service issues, has contributed to the weak renewal results. For the 2010 renewal season, approximately 18% of Caremark's business is up for review; it would be hard to imagine that the renewal rate would worsen from 92%. **SA: Can you talk about valuation? How does valuation compare to the competitors?** **TD:** We look at valuation using three primary methods: discounted cash flow (([DCF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DCF&selected=DCF)) )), traditional multiple analysis and sum-of-the-parts. Each of the company's businesses trades at a wide discount to peers; as well, the stock trades at a significant discount to its own history and our DCF value under a base case which utilizes conservative assumptions and a 10% discount rate.Under our base case, our analysis suggests the stock is worth above $40/share; it could be worth $26 under a bearish scenario and $54 under a best-case scenario. So we think the risk/reward proposition is favorable. **SA: What is the current sentiment on CVS? How does your view differ from the consensus?****TD:** As you'll see in more detail below, current sentiment is pretty negative, stemming from two areas of concern: first, concern over the competitive environment in the retail pharmacy business; and second, concern over management execution related to the Caremark PBM business.While we'd concede that the retail pharmacy business is facing significant competition, this is nothing new in our view, and so while we'd not be dismissive, we think that this concern's been reflected in the current stock price. To some extent we think the same thing on management - they've replaced the head of their PBM business with what we believe is a capable, thoughtful manager - one who has deep PBM industry experience and is respected by his peers. We believe that the renewed focus on letting Caremark positively differentiate itself should bear fruit in the upcoming renewal season in fall 2010. **SA: Does the company's management play a role in your position?****TD:** We believe that concerns over management have driven the stock price lower. The consensus view of management is that they have dropped the ball on the Caremark acquisition on the PBM side of the company and are a notch below Walgreens on the retail side of the company - so in general, this management team is viewed as under-achievers.We do not disagree with some of the complaints about management but believe that they are doing a competent job managing the retail-facing business and have taken steps to improve the focus on Caremark. **SA: What catalysts do you see that could move the stock?****TD:** In the near term, we think that there will be cross currents. The retail environment is challenging and this could depress near-term results. As well, the company recently reduced its 2010 profit forecast. However, it is possible that the PBM renewal season (upcoming this fall) could be better than last year's and thus this could be positive for sentiment on the stock. Longer-term, we believe there are two potentially significant, generally positive catalysts. The first catalyst is what we would call the generic wave. When branded drugs go off patent and are thus open to competition from generic drug manufacturers, this has historically translated into an economic windfall opportunity for PBMs. Typically, generic drugs are more than twice as profitable for PBMs to sell versus branded pharmaceuticals. Our analysis suggests that the next generic wave should begin late in 2011 and continue through 2014.Secondly, as the number of insured patients likely rises as health care reform takes root, we believe that prescription volume (script) trends will be incrementally favorable, which has a positive impact both on the PBM but also a secondary impact on the retail pharmacy business as foot traffic would notionally increase through their stores.The catalysts described above should drive 15%+ earnings growth per annum in the 2011-2014 period; at current valuation levels we are hard-pressed to find better growth stories out there. **SA: What could go wrong with this stock pick?****TD:** There is plenty that could go wrong, but there are two elements that we're watching that could most materially change our view on the company and our appraisal of value.First, the earnings forecast could be cut again if their retail business remains challenged - if terribly bad this would cause us to revisit our long-term economic assumptions for this business and likely reduce our appraised value. Second, management could again stub its toe this upcoming renewal season, which would be viewed as a further indictment of this team and may impair their ability to garner as much profit as the could during the upcoming generic wave - and may end up being a catalyst for further senior management change. **SA: Thank you very much, Tyler. ****TD:** My pleasure. **Disclosure: Tyler Dann's fund is long CVS** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [Three Exploration Stocks That Have Further to Go](http://seekingalpha.com/article/188051-three-exploration-stocks-that-have-further-to-go?source=nasdaq) on seekingalpha.com | CVS Is Fund Manager Tyler Dann's Highest Conviction Holding - Here's Why | News | SeekingAlpha | Unknown | 0.0003 | 24.4973 | 25.7595 | 25.56 | 23.6719 | 23.6719 | 23.7078 | 23.6121 | 23.6719 | 23.7142 | 23.7142 | 23.8372 | 23.0565 | 24.4741 | 24.3827 | 24.3713 | 24.7122 | 23.1954 | 22.7926 |
AMSC | American Superconductor Corporation | Consumer Discretionary | Metal Fabrications | https://www.nasdaq.com/articles/four-takeover-targets-ge-2010-02-08 | 2010-02-08 03:45:00 | Markets|LGL | **General Electric** ([GE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GE&selected=GE)) ) is on the prowl for electrical products companies. As the world's biggest maker of power-plant turbines, GE has a vested interest in the future of power generation in America. That means now is the time to buy out smaller companies with the technology for America's next-generation electrical grid rather than share the spotlight down the road.We've seen a lot of merger activity in the market now that the economy has stabilized, most recently in the highly publicized Cadbury-Kraft marriage and previously in buyouts across big pharma during 2009. My hunch is that the electrical products and infrastructure sector is going to see a spate of mergers soon, with GE being the biggest suitor. Here are the four possible candidates for a GE buyout in the near future, with the biggest potential to profit from this emerging trend. **American Superconductor ([AMSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMSC&selected=AMSC)) )**52-week Range: $11.66-$43.95Market Cap: $1.39B** American Superconductor Corp.** ([AMSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMSC&selected=AMSC)) ) is an industry leader in large-scale wind turbine designs and electrical control systems. The company has devoted a lot of its time and energy to developing a host of smart-grid technologies, including superconductor power cable systems, surge protectors and voltage stabilization systems. And don't let the company's name fool you -- AMSC is a true global player. In early February, American Superconductor landed a $70 million contract for wind turbine electrical control systems in China. That surely got GE's attention. And after four quarterly reports in a row that topped expectations by an average of more than 70%, you can bet Wall Street is paying attention to AMSC too. **Active Power ([ACPW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ACPW&selected=ACPW)) )**52-week Range: $0.36-$1.50Market Cap: $61.83M** Active Power** ([ACPW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ACPW&selected=ACPW)) ) is in the "power solutions" business, meaning it makes sure businesses and consumers can get the energy they need. This is a no-brainer merger target for GE, since that's what the smart grid is all about. ACPW's suite of products not only offers reliable energy storage systems and infrastructure components, but also ways to bridge the gap during power outages until utility power is restored. Although it's a tiny outfit with a market cap of just under $62 million with shares trading around $1 a piece, ACPW has massive potential. (Please note: I recommend this stock, but make sure you place a limit order 25 cents above the previous day's close when buying so you don't overpay for shares. Buy this aggressive and thinly traded stock with care.)**Jinpan International ([JST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JST&selected=JST)) )**52-week Range: $11.33-$52.88Market Cap: $354.02M** Jinpan International** ([JST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JST&selected=JST)) ) casts resin transformers, which are used in electric power distribution networks that decrease voltage at the end of transmission lines. In case you're not an electrical engineer, that means JST equipment converts power currents into a form that can travel over longer distances. And in case you don't watch the news, that's exactly what we need America's next-generation power grid to do. That makes JST a very likely merger candidate for GE. A bonus is that the company recently topped earnings estimates by over 100%, meaning this stock is growing rapidly. Headquartered in China, this pick is also a major global power that will add to the scope of General Electric operations if it's bought out. **LGL Group ([LGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LGL&selected=LGL)) )**52-week Range: $1.18-$4.50Market Cap: $8.98M** The LGL Group** ([LGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LGL&selected=LGL)) ) manufactures electronic components that control the frequency or timing of signals in electronic circuits. In plain English, LGL gadgets make power grids smarter. That makes this company a prime merger candidate for GE. Although it's a microcap with a market size of just $9 million and a daily volume of only about 3,800 shares, LGL should definitely be on your radar. (Please note: I recommend this stock, but make sure you place a limit order 15 cents above the previous day's close when buying so you don't overpay for shares. As a thinly traded stock, LGL is very volatile.) **Related Articles:** - ** [Top 5 Stocks for February](http://www.investorplace.com/experts/louis_navellier/articles/gallery/top-rated-stocks-for-february-aapl-pcln-abv-bidu-mrvl.html)** - ** [Four Banks Thrilled About Obama's Bank Plan](http://www.investorplace.com/experts/louis_navellier/articles/obama-bank-plan-to-boost-regional-bank-stocks-prsp-gsbc-ccne-nksh.html)** - ** [Surprise Winners of the China/India Outsourcing War](http://www.investorplace.com/experts/robert_hsu/gallery/top-chinese-stocks-china-india-outsourcing-vit-wx-ceo-lfc-mr.html)** **** | Four Takeover Targets for GE | News | Louis Navellier | Unknown | 0.0004 | 33.4669 | 31.7138 | 31.789 | 31.7729 | 31.7729 | 31.7729 | 31.7729 | 31.7729 | 31.7729 | 31.3082 | 32.27 | 30.9612 | 31.2898 | 31.4965 | 31.3612 | 32.1104 | 29.0441 | 30.4865 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/small-cap-gaming-stock-fund-manager-chad-brands-highest-conviction-pick-2010-02-09 | 2010-02-09 04:15:00 | LVS|Markets|CB|MCRI|MGM|CNTY | [Chad Brand](http://www.peridotcapital.com/) Chad Brand is the founder and President of [Peridot Capital Management LLC](http://www.peridotcapital.com/) , an RIA firm based in Pittsburgh that focuses on investment management and consulting services for individuals.We had the opportunity to ask Chad about his single highest conviction holding in his portfolio and the investment thesis behind it. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Chad Brand (([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) )):** Peridot Capital has recently been increasing our long position in Pinnacle Entertainment ([PNK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNK&selected=PNK)) ), a small cap regional gaming company.Pinnacle focuses on the local casino market, as opposed to Las Vegas. Although Pinnacle is based in Las Vegas, they have no properties there (their only presence in Nevada is a property in Reno). In addition to the Reno location, Pinnacle owns and operates casinos in Louisiana, Indiana, and Missouri. **SA: How much is this an industry pick as opposed to a pure bottom-up pick?****CB:** Though the gaming and travel industries appear to be set for a rebound in 2010, Pinnacle is really a bottom-up company-specific investment idea. I do not have a strong sense that the Vegas tourist market will snap back meaningfully in the short term, so I prefer a regional player like Pinnacle, as consumers will have to travel less to visit their facilities. Pinnacle stock is attractive due to its meager valuation and growth opportunities through upcoming new property openings, rather than due to any macro economic call. **SA: How is Pinnacle positioned vis a vis its competitors?****CB:** Pinnacle has chosen to focus its attention on a few states, building several properties in each, rather than try to reach every part of the U.S. casino market. As more and more states legalize gaming and gaming licenses are increased to raise local tax revenue, there will surely be additional competition in the regional casino market, but Pinnacle is very focused on strong markets and building premium properties. Their track record is very good, so there are reasons to believe they will continue to grow the company and do so profitably for shareholders.Currently, Pinnacle owns three properties in Louisiana, two in Missouri, one in Nevada, and one in Indiana. In March 2010 they will open a third property in the St Louis market (River City in St Louis county, which will complement the company's two downtown properties). In 2011 Pinnacle plans to open Sugercane Bay, a sister site adjacent to its current L'Auberge property in St Charles, Louisiana. The company also has plans for another new property to serve the Baton Rouge, LA market, to open no earlier than 2012.These growth plans set Pinnacle apart from its competitors, most of whom are not looking to add properties given current economic and credit market conditions. Pinnacle's strong balance sheet and track record gives it the ability to continue to grow, as they remain a small player in the gaming industry. **SA: Can you talk about valuation? How does valuation compare to the competitors?** **CB:** Valuation is the main reason I am so bullish on the prospects for Pinnacle's stock going forward. Right now, Pinnacle shares trade at $7.16 per share, giving the company an equity market value of $430 million (about 60 million total shares outstanding). Add in net debt of $880 million and the enterprise value comes in at $1.3 billion.Based solely on their existing properties, Pinnacle stock trades in-line with the industry at about 6.8 times trailing EBITDA (2009 EBITDA should come in around $190 million). From that perspective, Wall Street is assigning absolutely no value to any of Pinnacle's future projects. If the credit markets were closed and there were no signs that they could build anymore properties anytime soon, perhaps that would make sense and the stock would be considered fairly valued. However, that is far from the case today.Pinnacle is going to open its St Louis county project, River City, in March. It is expected that the property will be more profitable than their downtown casino Lumiere Place, which currently earns between $40 and $50 million in annual EBITDA. Pinnacle believes its total St Louis market will exceed $100 million annually once River City opens and achieves optimal efficiency.Assuming $50 million in annual cash flow from the new project, assigning a 7 times EBITDA multiple on that property pegs its value at $350 million, or nearly $6 per share. Given that the casino will open so soon, I cannot understand why Wall Street is assigning no value to it. The entire company is now being valued for around $7 per share, so it is easy to see how undervalued the company appears to be based solely on this one new casino. Book value today is about $8.25 per share, so the stock also trades at a 10% discount to the stated value of its assets, which gives me even more confidence in the stock.And River City is not the only future growth opportunity for Pinnacle. Assuming the credit markets and economy continue to improve, it is very reasonable to think that Sugercane Bay and the Baton Rouge project could expand the company's cash flow in 2011 and 2012. Those properties would only increase the value of the company even further. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****CB:** Pinnacle and the other regional gaming companies are largely being ignored. Negative sentiment toward consumer related businesses is likely the reason, coupled with the fact that investors prefer the glitz and glamour of larger casino companies like [[MGM]] and Las Vegas Sands ([LVS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LVS&selected=LVS)) ) that have exposure to the growing Macau gaming market. I am simply excited about these new properties in Missouri and Louisiana and the fact that investors don't seem to be assigning any value to them when they should prove to be quite profitable for Pinnacle. **SA: Does Pinnacle's management play a role in your position?****CB:** Interesting that you ask about management. Pinnacle recently announced that its CEO, Dan Lee, has resigned. That came after an embarrassing story about Lee surfaced, in which he traveled to Missouri and had a controversial meeting with some local lawmakers before a hearing there. Evidently Lee was told by the Board to stay in Vegas but instead he got pretty aggressive with some voting members hours before a vote was scheduled. Reports indicate that was one of a handful of reasons that led to him leaving. I am confident that a competent replacement will be found and the rest of the development and operating team at the company has done a solid job, so I have no reason to doubt they can do so going forward. **SA: What catalysts do you see that could move the stock?****CB:** For me it will really be all about these new properties and the reaction to them once they start bringing in meaningful profits. Right now, Pinnacle is spending a lot of money to build these casinos (which is reducing current earnings) and has not received any returns yet. Once that changes, EBITDA will increase and the stock price should follow suit. **SA: What could go wrong with this stock pick?****CB:** If the economy takes another leg down and the existing properties bring in less money, that would affect cash flow and bring down the stock. Given how resilient they were in 2008 and 2009, it would take quite an economic shock for that to happen.More likely, if the new properties perform below expectations that would hurt the thesis. This could happen if Pinnacle overbuilds capacity in any one area, or if more and more gaming licenses being issued by the states result in more competing properties and therefore less of the gaming pie is available for each company. **SA: Thank you very much for sharing your thesis, Chad. ****CB:** My pleasure. **Disclosure: Chad Brand's Peridot Capital is long PNK** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [Positioning in Gold, Oil for the Months Ahead](http://seekingalpha.com/article/188984-positioning-in-gold-oil-for-the-months-ahead?source=nasdaq) on seekingalpha.com | This Small-Cap Gaming Stock Is Fund Manager Chad Brand's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0005 | 23.7142 | 24.3827 | 24.3713 | 24.7122 | 24.7122 | 24.7122 | 24.7122 | 24.7122 | 24.7122 | 25.2635 | 25.8806 | 25.0529 | 24.9169 | 24.8193 | 25.1802 | 25.115 | 22.0929 | 21.3623 |
MCRI | Monarch Casino & Resort, Inc. | Consumer Discretionary | Hotels/Resorts | https://www.nasdaq.com/articles/small-cap-gaming-stock-fund-manager-chad-brands-highest-conviction-pick-2010-02-09 | 2010-02-09 04:15:00 | LVS|Markets|CB|MGM|CNTY|SA | [Chad Brand](http://www.peridotcapital.com/) Chad Brand is the founder and President of [Peridot Capital Management LLC](http://www.peridotcapital.com/) , an RIA firm based in Pittsburgh that focuses on investment management and consulting services for individuals.We had the opportunity to ask Chad about his single highest conviction holding in his portfolio and the investment thesis behind it. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Chad Brand (([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) )):** Peridot Capital has recently been increasing our long position in Pinnacle Entertainment ([PNK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNK&selected=PNK)) ), a small cap regional gaming company.Pinnacle focuses on the local casino market, as opposed to Las Vegas. Although Pinnacle is based in Las Vegas, they have no properties there (their only presence in Nevada is a property in Reno). In addition to the Reno location, Pinnacle owns and operates casinos in Louisiana, Indiana, and Missouri. **SA: How much is this an industry pick as opposed to a pure bottom-up pick?****CB:** Though the gaming and travel industries appear to be set for a rebound in 2010, Pinnacle is really a bottom-up company-specific investment idea. I do not have a strong sense that the Vegas tourist market will snap back meaningfully in the short term, so I prefer a regional player like Pinnacle, as consumers will have to travel less to visit their facilities. Pinnacle stock is attractive due to its meager valuation and growth opportunities through upcoming new property openings, rather than due to any macro economic call. **SA: How is Pinnacle positioned vis a vis its competitors?****CB:** Pinnacle has chosen to focus its attention on a few states, building several properties in each, rather than try to reach every part of the U.S. casino market. As more and more states legalize gaming and gaming licenses are increased to raise local tax revenue, there will surely be additional competition in the regional casino market, but Pinnacle is very focused on strong markets and building premium properties. Their track record is very good, so there are reasons to believe they will continue to grow the company and do so profitably for shareholders.Currently, Pinnacle owns three properties in Louisiana, two in Missouri, one in Nevada, and one in Indiana. In March 2010 they will open a third property in the St Louis market (River City in St Louis county, which will complement the company's two downtown properties). In 2011 Pinnacle plans to open Sugercane Bay, a sister site adjacent to its current L'Auberge property in St Charles, Louisiana. The company also has plans for another new property to serve the Baton Rouge, LA market, to open no earlier than 2012.These growth plans set Pinnacle apart from its competitors, most of whom are not looking to add properties given current economic and credit market conditions. Pinnacle's strong balance sheet and track record gives it the ability to continue to grow, as they remain a small player in the gaming industry. **SA: Can you talk about valuation? How does valuation compare to the competitors?** **CB:** Valuation is the main reason I am so bullish on the prospects for Pinnacle's stock going forward. Right now, Pinnacle shares trade at $7.16 per share, giving the company an equity market value of $430 million (about 60 million total shares outstanding). Add in net debt of $880 million and the enterprise value comes in at $1.3 billion.Based solely on their existing properties, Pinnacle stock trades in-line with the industry at about 6.8 times trailing EBITDA (2009 EBITDA should come in around $190 million). From that perspective, Wall Street is assigning absolutely no value to any of Pinnacle's future projects. If the credit markets were closed and there were no signs that they could build anymore properties anytime soon, perhaps that would make sense and the stock would be considered fairly valued. However, that is far from the case today.Pinnacle is going to open its St Louis county project, River City, in March. It is expected that the property will be more profitable than their downtown casino Lumiere Place, which currently earns between $40 and $50 million in annual EBITDA. Pinnacle believes its total St Louis market will exceed $100 million annually once River City opens and achieves optimal efficiency.Assuming $50 million in annual cash flow from the new project, assigning a 7 times EBITDA multiple on that property pegs its value at $350 million, or nearly $6 per share. Given that the casino will open so soon, I cannot understand why Wall Street is assigning no value to it. The entire company is now being valued for around $7 per share, so it is easy to see how undervalued the company appears to be based solely on this one new casino. Book value today is about $8.25 per share, so the stock also trades at a 10% discount to the stated value of its assets, which gives me even more confidence in the stock.And River City is not the only future growth opportunity for Pinnacle. Assuming the credit markets and economy continue to improve, it is very reasonable to think that Sugercane Bay and the Baton Rouge project could expand the company's cash flow in 2011 and 2012. Those properties would only increase the value of the company even further. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****CB:** Pinnacle and the other regional gaming companies are largely being ignored. Negative sentiment toward consumer related businesses is likely the reason, coupled with the fact that investors prefer the glitz and glamour of larger casino companies like [[MGM]] and Las Vegas Sands ([LVS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LVS&selected=LVS)) ) that have exposure to the growing Macau gaming market. I am simply excited about these new properties in Missouri and Louisiana and the fact that investors don't seem to be assigning any value to them when they should prove to be quite profitable for Pinnacle. **SA: Does Pinnacle's management play a role in your position?****CB:** Interesting that you ask about management. Pinnacle recently announced that its CEO, Dan Lee, has resigned. That came after an embarrassing story about Lee surfaced, in which he traveled to Missouri and had a controversial meeting with some local lawmakers before a hearing there. Evidently Lee was told by the Board to stay in Vegas but instead he got pretty aggressive with some voting members hours before a vote was scheduled. Reports indicate that was one of a handful of reasons that led to him leaving. I am confident that a competent replacement will be found and the rest of the development and operating team at the company has done a solid job, so I have no reason to doubt they can do so going forward. **SA: What catalysts do you see that could move the stock?****CB:** For me it will really be all about these new properties and the reaction to them once they start bringing in meaningful profits. Right now, Pinnacle is spending a lot of money to build these casinos (which is reducing current earnings) and has not received any returns yet. Once that changes, EBITDA will increase and the stock price should follow suit. **SA: What could go wrong with this stock pick?****CB:** If the economy takes another leg down and the existing properties bring in less money, that would affect cash flow and bring down the stock. Given how resilient they were in 2008 and 2009, it would take quite an economic shock for that to happen.More likely, if the new properties perform below expectations that would hurt the thesis. This could happen if Pinnacle overbuilds capacity in any one area, or if more and more gaming licenses being issued by the states result in more competing properties and therefore less of the gaming pie is available for each company. **SA: Thank you very much for sharing your thesis, Chad. ****CB:** My pleasure. **Disclosure: Chad Brand's Peridot Capital is long PNK** If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [Positioning in Gold, Oil for the Months Ahead](http://seekingalpha.com/article/188984-positioning-in-gold-oil-for-the-months-ahead?source=nasdaq) on seekingalpha.com | This Small-Cap Gaming Stock Is Fund Manager Chad Brand's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0005 | 6.52571 | 6.68722 | 6.67802 | 6.6713 | 6.6713 | 6.6713 | 6.6713 | 6.6713 | 6.6713 | 6.71439 | 6.87716 | 6.91893 | 6.88476 | 6.69303 | 6.80922 | 7.1299 | 7.48679 | 8.1867 |
MCRI | Monarch Casino & Resort, Inc. | Consumer Discretionary | Hotels/Resorts | https://www.nasdaq.com/articles/smallcap-gaming-stock-fund-manager-chad-brands-highest-conviction-pick-2010-02-09 | 2010-02-09 09:15:00 | LVS|Markets|CB|MGM|CNTY|SA | [Chad Brand](http://www.peridotcapital.com/) Chad Brand is the founder and President of [Peridot Capital Management LLC](http://www.peridotcapital.com/) , an RIA firm based in Pittsburgh that focuses on investment management and consulting services for individuals.We had the opportunity to ask Chad about his single highest conviction holding in his portfolio and the investment thesis behind it. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Chad Brand (([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) )):** Peridot Capital has recently been increasing its long position in Pinnacle Entertainment ([PNK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNK&selected=PNK)) ), a small cap regional gaming company.Pinnacle focuses on the local casino market, as opposed to Las Vegas. Although Pinnacle is based in Las Vegas, they have no properties there (their only presence in Nevada is a property in Reno). In addition to the Reno location, Pinnacle owns and operates casinos in Louisiana, Indiana, and Missouri. **SA: How much is this an industry pick as opposed to a pure bottom-up pick?****CB:** Though the gaming and travel industries appear to be set for a rebound in 2010, Pinnacle is really a bottom-up company-specific investment idea. I do not have a strong sense that the Vegas tourist market will snap back meaningfully in the short term, so I prefer a regional player like Pinnacle, as consumers will have to travel less to visit their facilities. Pinnacle stock is attractive due to its meager valuation and growth opportunities through upcoming new property openings, rather than due to any macro economic call. **SA: How is Pinnacle positioned vis a vis its competitors?****CB:** Pinnacle has chosen to focus its attention on a few states, building several properties in each, rather than try to reach every part of the U.S. casino market. As more and more states legalize gaming and gaming licenses are increased to raise local tax revenue, there will surely be additional competition in the regional casino market, but Pinnacle is very focused on strong markets and building premium properties. Their track record is very good, so there are reasons to believe they will continue to grow the company and do so profitably for shareholders.Currently, Pinnacle owns three properties in Louisiana, two in Missouri, one in Nevada, and one in Indiana. In March 2010 they will open a third property in the St Louis market (River City in St Louis county, which will complement the company's two downtown properties). In 2011 Pinnacle plans to open Sugercane Bay, a sister site adjacent to its current L'Auberge property in St Charles, Louisiana. The company also has plans for another new property to serve the Baton Rouge, LA market, to open no earlier than 2012.These growth plans set Pinnacle apart from its competitors, most of whom are not looking to add properties given current economic and credit market conditions. Pinnacle's strong balance sheet and track record gives it the ability to continue to grow, as they remain a small player in the gaming industry. **SA: Can you talk about valuation? How does valuation compare to the competitors?** **CB:** Valuation is the main reason I am so bullish on the prospects for Pinnacle's stock going forward. Right now, Pinnacle shares trade at $7.16 per share, giving the company an equity market value of $430 million (about 60 million total shares outstanding). Add in net debt of $880 million and the enterprise value comes in at $1.3 billion.Based solely on their existing properties, Pinnacle stock trades in-line with the industry at about 7.4 times trailing EBITDA (2009 EBITDA should come in around $190 million). From that perspective, Wall Street is assigning absolutely no value to any of Pinnacle's future projects. If the credit markets were closed and there were no signs that they could build anymore properties anytime soon, perhaps that would make sense and the stock would be considered fairly valued. However, that is far from the case today.Pinnacle is going to open its St Louis county project, River City, in March. It is expected that the property will be more profitable than their downtown casino (Lumiere Place), which currently earns between $40 and $50 million in annual EBITDA). Pinnacle believes its total St Louis market will exceed $100 million annually once River City opens and achieves optimal efficiency.Assuming $50 million in annual cash flow from the new project, assigning a 7 times EBITDA multiple on that property pegs its value at $350 million, or nearly $6 per share. Given that the casino will open in two months, I cannot understand why Wall Street is assigning no value to it. The entire company is now being valued for less than $9 per share, so it is easy to see how undervalued the company appears to be based solely on this one new casino. Book value today is more than $12 per share, so the stock also trades at a 30% discount to the stated value of its assets, which gives me even more confidence in the stock.And River City is not the only future growth opportunity for Pinnacle. Assuming the credit markets and economy continue to improve, it is very reasonable to think that Sugercane Bay and the Baton Rouge project could expand the company's cash flow in 2011 and 2012. Those properties would only increase the value of the company even further. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****CB:** Pinnacle and the other regional gaming companies are largely being ignored. Negative sentiment toward consumer related businesses is likely the reason, coupled with the fact that investors prefer the glitz and glamour of larger casino companies like [[MGM]] and Las Vegas Sands ([LVS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LVS&selected=LVS)) ) that have exposure to the growing Macau gaming market. I am simply excited about these new properties in Missouri and Louisiana and the fact that investors don't seem to be assigning any value to them when they should prove to be quite profitable for Pinnacle. **SA: Does the Pinnacle's management play a role in your position?****CB:** Interesting that you ask about management. Pinnacle recently announced that its CEO, Dan Lee, has resigned. That came after an embarrassing story about Lee surfaced, in which he traveled to Missouri and had a controversial meeting with some local lawmakers before a hearing there. Evidently Lee was told by the Board to stay in Vegas but instead he got pretty aggressive with some voting members hours before a vote was scheduled. Reports indicate that was one of a handful of reasons that led to him leaving. I am confident that a competent replacement will be found and the rest of the development and operating team at the company has done a solid job, so I have no reason to doubt they can do so going forward. **SA: What catalysts do you see that could move the stock?** **CB:** For me it will really be all about these new properties and the reaction to them once they start bringing in meaningful profits. Right now, Pinnacle is spending a lot of money to build these casinos (which is reducing current earnings) and has not received any returns yet. Once that changes, EBITDA will increase and the stock price should follow suit. **SA: What could go wrong with this stock pick?****CB:** If the economy takes another leg down and the existing properties bring in less money, that would affect cash flow and bring down the stock. Given how resilient they were in 2008 and 2009, it would take quite an economic shock for that to happen.More likely, if the new properties perform below expectations that would hurt the thesis. This could happen if Pinnacle overbuilds capacity in any one area, or if more and more gaming licenses being issued by the states result in more competing properties and therefore less of the gaming pie is available for each company. **SA: Thank you very much for sharing your thesis, Chad. ****CB:** My pleasure. **Disclosure: Chad Brand's Peridot Capital is long PNK** See also [Timing Your Buys and Sells](http://seekingalpha.com/article/187431-timing-your-buys-and-sells?source=nasdaq) on seekingalpha.com | This Smallcap Gaming Stock Is Fund Manager Chad Brand's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0005 | 6.52571 | 6.68722 | 6.67802 | 6.6713 | 6.6713 | 6.68538 | 6.71439 | 6.74856 | 6.93723 | 7.07184 | 6.91933 | 6.91933 | 6.88476 | 6.69303 | 6.80922 | 7.1299 | 7.48679 | 8.1867 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/smallcap-gaming-stock-fund-manager-chad-brands-highest-conviction-pick-2010-02-09 | 2010-02-09 09:15:00 | LVS|Markets|CB|MCRI|MGM|CNTY | [Chad Brand](http://www.peridotcapital.com/) Chad Brand is the founder and President of [Peridot Capital Management LLC](http://www.peridotcapital.com/) , an RIA firm based in Pittsburgh that focuses on investment management and consulting services for individuals.We had the opportunity to ask Chad about his single highest conviction holding in his portfolio and the investment thesis behind it. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is your highest conviction stock position in your fund - long or short?****Chad Brand (([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) )):** Peridot Capital has recently been increasing its long position in Pinnacle Entertainment ([PNK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNK&selected=PNK)) ), a small cap regional gaming company.Pinnacle focuses on the local casino market, as opposed to Las Vegas. Although Pinnacle is based in Las Vegas, they have no properties there (their only presence in Nevada is a property in Reno). In addition to the Reno location, Pinnacle owns and operates casinos in Louisiana, Indiana, and Missouri. **SA: How much is this an industry pick as opposed to a pure bottom-up pick?****CB:** Though the gaming and travel industries appear to be set for a rebound in 2010, Pinnacle is really a bottom-up company-specific investment idea. I do not have a strong sense that the Vegas tourist market will snap back meaningfully in the short term, so I prefer a regional player like Pinnacle, as consumers will have to travel less to visit their facilities. Pinnacle stock is attractive due to its meager valuation and growth opportunities through upcoming new property openings, rather than due to any macro economic call. **SA: How is Pinnacle positioned vis a vis its competitors?****CB:** Pinnacle has chosen to focus its attention on a few states, building several properties in each, rather than try to reach every part of the U.S. casino market. As more and more states legalize gaming and gaming licenses are increased to raise local tax revenue, there will surely be additional competition in the regional casino market, but Pinnacle is very focused on strong markets and building premium properties. Their track record is very good, so there are reasons to believe they will continue to grow the company and do so profitably for shareholders.Currently, Pinnacle owns three properties in Louisiana, two in Missouri, one in Nevada, and one in Indiana. In March 2010 they will open a third property in the St Louis market (River City in St Louis county, which will complement the company's two downtown properties). In 2011 Pinnacle plans to open Sugercane Bay, a sister site adjacent to its current L'Auberge property in St Charles, Louisiana. The company also has plans for another new property to serve the Baton Rouge, LA market, to open no earlier than 2012.These growth plans set Pinnacle apart from its competitors, most of whom are not looking to add properties given current economic and credit market conditions. Pinnacle's strong balance sheet and track record gives it the ability to continue to grow, as they remain a small player in the gaming industry. **SA: Can you talk about valuation? How does valuation compare to the competitors?** **CB:** Valuation is the main reason I am so bullish on the prospects for Pinnacle's stock going forward. Right now, Pinnacle shares trade at $7.16 per share, giving the company an equity market value of $430 million (about 60 million total shares outstanding). Add in net debt of $880 million and the enterprise value comes in at $1.3 billion.Based solely on their existing properties, Pinnacle stock trades in-line with the industry at about 7.4 times trailing EBITDA (2009 EBITDA should come in around $190 million). From that perspective, Wall Street is assigning absolutely no value to any of Pinnacle's future projects. If the credit markets were closed and there were no signs that they could build anymore properties anytime soon, perhaps that would make sense and the stock would be considered fairly valued. However, that is far from the case today.Pinnacle is going to open its St Louis county project, River City, in March. It is expected that the property will be more profitable than their downtown casino (Lumiere Place), which currently earns between $40 and $50 million in annual EBITDA). Pinnacle believes its total St Louis market will exceed $100 million annually once River City opens and achieves optimal efficiency.Assuming $50 million in annual cash flow from the new project, assigning a 7 times EBITDA multiple on that property pegs its value at $350 million, or nearly $6 per share. Given that the casino will open in two months, I cannot understand why Wall Street is assigning no value to it. The entire company is now being valued for less than $9 per share, so it is easy to see how undervalued the company appears to be based solely on this one new casino. Book value today is more than $12 per share, so the stock also trades at a 30% discount to the stated value of its assets, which gives me even more confidence in the stock.And River City is not the only future growth opportunity for Pinnacle. Assuming the credit markets and economy continue to improve, it is very reasonable to think that Sugercane Bay and the Baton Rouge project could expand the company's cash flow in 2011 and 2012. Those properties would only increase the value of the company even further. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****CB:** Pinnacle and the other regional gaming companies are largely being ignored. Negative sentiment toward consumer related businesses is likely the reason, coupled with the fact that investors prefer the glitz and glamour of larger casino companies like [[MGM]] and Las Vegas Sands ([LVS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LVS&selected=LVS)) ) that have exposure to the growing Macau gaming market. I am simply excited about these new properties in Missouri and Louisiana and the fact that investors don't seem to be assigning any value to them when they should prove to be quite profitable for Pinnacle. **SA: Does the Pinnacle's management play a role in your position?****CB:** Interesting that you ask about management. Pinnacle recently announced that its CEO, Dan Lee, has resigned. That came after an embarrassing story about Lee surfaced, in which he traveled to Missouri and had a controversial meeting with some local lawmakers before a hearing there. Evidently Lee was told by the Board to stay in Vegas but instead he got pretty aggressive with some voting members hours before a vote was scheduled. Reports indicate that was one of a handful of reasons that led to him leaving. I am confident that a competent replacement will be found and the rest of the development and operating team at the company has done a solid job, so I have no reason to doubt they can do so going forward. **SA: What catalysts do you see that could move the stock?** **CB:** For me it will really be all about these new properties and the reaction to them once they start bringing in meaningful profits. Right now, Pinnacle is spending a lot of money to build these casinos (which is reducing current earnings) and has not received any returns yet. Once that changes, EBITDA will increase and the stock price should follow suit. **SA: What could go wrong with this stock pick?****CB:** If the economy takes another leg down and the existing properties bring in less money, that would affect cash flow and bring down the stock. Given how resilient they were in 2008 and 2009, it would take quite an economic shock for that to happen.More likely, if the new properties perform below expectations that would hurt the thesis. This could happen if Pinnacle overbuilds capacity in any one area, or if more and more gaming licenses being issued by the states result in more competing properties and therefore less of the gaming pie is available for each company. **SA: Thank you very much for sharing your thesis, Chad. ****CB:** My pleasure. **Disclosure: Chad Brand's Peridot Capital is long PNK** See also [Timing Your Buys and Sells](http://seekingalpha.com/article/187431-timing-your-buys-and-sells?source=nasdaq) on seekingalpha.com | This Smallcap Gaming Stock Is Fund Manager Chad Brand's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0005 | 23.7142 | 24.3827 | 24.3713 | 24.8535 | 24.8535 | 24.9307 | 25.2635 | 24.8138 | 25.3535 | 24.9687 | 25.0529 | 25.0547 | 24.9169 | 24.8193 | 25.1803 | 25.115 | 22.0706 | 21.3623 |
EBS | Emergent BioSolutions Inc. | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/lessons-top-performing-stocks-2010-02-11 | 2010-02-11 02:50:00 | VNDA|Markets | Every January, I track down the list of the top-performing stocks from the previous year. I like to figure out the stories that catapulted these stocks to such strong performances. And yes, I like to torture myself with the possibility that there was an opportunity there that I might have been able to grab a piece of.The list for 2009 is a powerhouse; just to make the top 15 in performance terms took a price advance of more than 1,000%! The number one stock of 2009 (the rules require that the stock currently sell for more than $2 and trade more than 50,000 shares a day) was Select Comfort ([SCSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCSS&selected=SCSS)) ), with a price appreciation of 2,508%! Now that's the kind of performance that gets an investor's attention.But it's not a simple story.Back in 2006, SCSS was a perfectly healthy stock, reaching a multi-year high of 29 in April of that year. By the beginning of 2008, the stock had fallen to 7 and by the beginning of 2009, it was all the way down to $0.25 a share. The stock ventured even lower in March, falling to as low as $0.20. The stock finally poked its nose above the magic dollar-a-share level in April, but promptly pulled back through June and July after the company got a $35 million cash infusion (and a $70 million line of credit) from a private equity firm in May.In late July, after a vigorous round of closing underperforming stores and cutting other costs, Select Comfort scored a big coup with a Q2 earnings report that came within an eyelash of profitability. That was enough for investors, who pushed the stock from 1 to 2 in four days, then to 3 in August, 5 in September and 6.5 by the end of the year.The other stocks that scored advances of more than 2,000% in 2009 had their own stories, but I can't talk about all of them here. You can look them up: China AgriTech ([CAGC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CAGC&selected=CAGC)) ), Dollar Thrifty Automotive Group ([DTG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DTG&selected=DTG)) ) and Vanda Pharmaceuticals ([VNDA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VNDA&selected=VNDA)) ). (If you want a list of the entire top 15, reply to this email and I'll send it to you.) While it's fascinating to torture myself with these stories, since I don't have access to a time machine, I can't make money with them. China AgriTech traded as low as 1.12 on January 2, 2009, and finished the year at 27.95 for a stunning gain, but that won't help me the next time I open my online trading account and try to figure out what to do. I have two lessons to draw from these tantalizing returns.The first lesson is that there is no substitute for buying well. The top stocks from any year often start from depressed price levels. And if you can pick a penny stock that makes a big run, it can make your year.Cabot China & Emerging Markets Report, which I write, won't ordinarily look at a stock that trades under 10 (and prefers them to be trading over 13), because the volatility that can drive huge gains can also lead to enormous losses.But if you can't luck into a low-priced diamond-in-the-rough or jump into the market right at the bottom, you can buy a good stock on a nice pullback of a few percentage points or move back into stocks soon after a recovery begins. Do this, and you can reap big benefits and boost the odds of long-term success.The second lesson is that, by contrasting these outsized 2009 returns with the more subdued top performers of 2008 (the year's best return was the 415% bump booked by Emergent BioSolutions ([EBS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EBS&selected=EBS)) ), you can see that there is no substitute for a supportive market environment.The deluge that produced the Big Bear Market of 2008 didn't sink every stock. But it turned the odds of success heavily against investors and put a serious brick on the head of even the stars for the year. The best performer from 2008 wasn't even close to making the top 15 for 2009. That's why Cabot growth newsletters like Cabot China & Emerging Markets Report, Cabot Top Ten Report, Cabot Green Investor and Cabot Market Letter (which was just named one of the top 10 market timing advisories for one-, three-, five- and 10-year periods by Timer Digest) all use market-trailing timing techniques to get our readers out of dangerous markets and into cash when conditions deteriorate. They also tell investors when to put their money back to work when markets turn up.---When I was at the Large Boston Investment House where I was initiated into the investment fraternity, I was very much aware--at first--of how little I really knew about investing. (The more I learn, the more I realize that even people who spend their lives studying investing never learn it all, but that's another story.) My ignorance wasn't really surprising, since nothing in my earlier life had required such knowledge. Like most college teachers, I had just shipped my monthly pittance off to TIAA-CREF and forgotten about it. (When TIAA-CREF used to advertise themselves as serving people "with better things to think about," I thought it was funny, but I also didn't think about it.) In short, I was a completely naïve and unsophisticated newbie, and I was at the mercy of the last person I talked to.When I talked to value managers, their strategy made perfect sense to me. I'd hear "find strong companies whose stocks are trading at a substantial discount to their intrinsic worth and look for catalysts for change that will improve investors' perceptions." It's the classic "cheapness and change" mantra, and it made sense to me. Then I'd talk to technical analysts, and their mastery of reading stock charts made sense to me. They'd talk about support and resistance and volume and cups-with-handles and it sounded like they had the keys to the city. Perfect.Then the fundamental analysts would get their hooks into me, and that made sense to me too. After all, they'd say, it all comes down to the bottom line, and they'd show me revenue and earnings trends and projections based on market analysis and demographics and analysts' estimates. It's all about the numbers, and numbers don't lie.I also took a long walk in the world of fixed income securities, but I can't really write about that or I'll have a flashback and have to stop. Bonds are a world unto themselves.It wasn't until I came to Cabot that the truth finally dawned on me. It wasn't the case that any of those approaches to stock investing was right and the others were wrong. You could make money using any of them.What was really at issue in the big debate was whether any of the methods of stock analysis could get closer to The Truth than the others. And The Truth was confidence or certainty or conviction or whatever you want to call it. The real question was whether one method of stock analysis could approach certainty.But none could.About the best any analyst could come to predicting whether a particular stock (or industry or sector or country or index) would beat the Wilshire 5000 Index (the Index that represents the entire U.S. equity market) was around 50%.In fact, we used to say that if any equity manager could pick 51% winners consistently, he (or she) could rule the investment world!The only truth I've been able to find is that the factors that move stock prices up or down are too various and unpredictable to be reduced to a set of written-in-stone rules. And in the final analysis, a 50-page analysis of every fact in the know universe about a particular company and its stock isn't much better as a guide than a page or two of good solid analysis. If longer were better, stock recommendations would reach book length in no time.Any stock analysis that gets to 60% validity has done its job. Then it's your turn. You have to buy well, cut losses short in the ones that don't work and let your winners run. And you need to have the general trend of the market on your side.Ultimately that's what we preach at Cabot. And if it's more applicable to growth investing than other styles, well, that's where I came down anyway. I'm no thrill seeker, but I get more juice out of the growth style than any other.---In the spirit of broadening my horizons to beyond strictly growth stocks, I'm going to quasi-recommend a stock that has been correcting since last September. I really admired Fuqi International ([FUQI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUQI&selected=FUQI)) ) as it roared from 3 in March 2009 to 33 in September, but I never found the right buy point for the stock.The story is a good one, as Fuqi International is a Chinese jewelry company that sells mostly gold jewelry to wholesalers, who then retail it within China. The appetite of Chinese consumers for gold is a long-standing taste, as many Chinese families regard gold as a suitable way to safeguard family wealth. Buy when times are good; sell when times are bad.Times have been quite good for Fuqi, which reported a 135% jump in earnings in Q3 on a 36% gain in revenues. The after-tax profit margin was 14.8%. The roster of institutional investors has climbed from 17 in Q2 to 46 at last count. I don't usually recommend stocks that are in downtrends, but I've always been fascinated by the Fuqi story. With a P/E ratio of just 8, this looks like a great buy here, with two caveats. First, the stock needs to find some support and build a credible base before it can begin to advance. Second, the company's Q4 earnings report (which hasn't been scheduled yet) needs to show positive results.If FUQI can stop falling and get support from a good earnings report, it can be a real powerhouse. Just don't forget the "if."Sincerely,Paul GoodwinFor Cabot Wealth Advisory--- | Lessons from the Top-Performing Stocks | News | Cabot Wealth Network | Unknown | 0.0005 | 13.6129 | 13.6316 | 13.8987 | 13.944 | 13.944 | 13.944 | 13.944 | 13.944 | 13.944 | 13.944 | 14.3314 | 14.5416 | 14.4864 | 14.8479 | 14.8479 | 14.8479 | 14.8147 | 15.9581 |
VNDA | Vanda Pharmaceuticals Inc. | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/lessons-top-performing-stocks-2010-02-11 | 2010-02-11 02:50:00 | Markets|EBS | Every January, I track down the list of the top-performing stocks from the previous year. I like to figure out the stories that catapulted these stocks to such strong performances. And yes, I like to torture myself with the possibility that there was an opportunity there that I might have been able to grab a piece of.The list for 2009 is a powerhouse; just to make the top 15 in performance terms took a price advance of more than 1,000%! The number one stock of 2009 (the rules require that the stock currently sell for more than $2 and trade more than 50,000 shares a day) was Select Comfort ([SCSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCSS&selected=SCSS)) ), with a price appreciation of 2,508%! Now that's the kind of performance that gets an investor's attention.But it's not a simple story.Back in 2006, SCSS was a perfectly healthy stock, reaching a multi-year high of 29 in April of that year. By the beginning of 2008, the stock had fallen to 7 and by the beginning of 2009, it was all the way down to $0.25 a share. The stock ventured even lower in March, falling to as low as $0.20. The stock finally poked its nose above the magic dollar-a-share level in April, but promptly pulled back through June and July after the company got a $35 million cash infusion (and a $70 million line of credit) from a private equity firm in May.In late July, after a vigorous round of closing underperforming stores and cutting other costs, Select Comfort scored a big coup with a Q2 earnings report that came within an eyelash of profitability. That was enough for investors, who pushed the stock from 1 to 2 in four days, then to 3 in August, 5 in September and 6.5 by the end of the year.The other stocks that scored advances of more than 2,000% in 2009 had their own stories, but I can't talk about all of them here. You can look them up: China AgriTech ([CAGC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CAGC&selected=CAGC)) ), Dollar Thrifty Automotive Group ([DTG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DTG&selected=DTG)) ) and Vanda Pharmaceuticals ([VNDA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VNDA&selected=VNDA)) ). (If you want a list of the entire top 15, reply to this email and I'll send it to you.) While it's fascinating to torture myself with these stories, since I don't have access to a time machine, I can't make money with them. China AgriTech traded as low as 1.12 on January 2, 2009, and finished the year at 27.95 for a stunning gain, but that won't help me the next time I open my online trading account and try to figure out what to do. I have two lessons to draw from these tantalizing returns.The first lesson is that there is no substitute for buying well. The top stocks from any year often start from depressed price levels. And if you can pick a penny stock that makes a big run, it can make your year.Cabot China & Emerging Markets Report, which I write, won't ordinarily look at a stock that trades under 10 (and prefers them to be trading over 13), because the volatility that can drive huge gains can also lead to enormous losses.But if you can't luck into a low-priced diamond-in-the-rough or jump into the market right at the bottom, you can buy a good stock on a nice pullback of a few percentage points or move back into stocks soon after a recovery begins. Do this, and you can reap big benefits and boost the odds of long-term success.The second lesson is that, by contrasting these outsized 2009 returns with the more subdued top performers of 2008 (the year's best return was the 415% bump booked by Emergent BioSolutions ([EBS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EBS&selected=EBS)) ), you can see that there is no substitute for a supportive market environment.The deluge that produced the Big Bear Market of 2008 didn't sink every stock. But it turned the odds of success heavily against investors and put a serious brick on the head of even the stars for the year. The best performer from 2008 wasn't even close to making the top 15 for 2009. That's why Cabot growth newsletters like Cabot China & Emerging Markets Report, Cabot Top Ten Report, Cabot Green Investor and Cabot Market Letter (which was just named one of the top 10 market timing advisories for one-, three-, five- and 10-year periods by Timer Digest) all use market-trailing timing techniques to get our readers out of dangerous markets and into cash when conditions deteriorate. They also tell investors when to put their money back to work when markets turn up.---When I was at the Large Boston Investment House where I was initiated into the investment fraternity, I was very much aware--at first--of how little I really knew about investing. (The more I learn, the more I realize that even people who spend their lives studying investing never learn it all, but that's another story.) My ignorance wasn't really surprising, since nothing in my earlier life had required such knowledge. Like most college teachers, I had just shipped my monthly pittance off to TIAA-CREF and forgotten about it. (When TIAA-CREF used to advertise themselves as serving people "with better things to think about," I thought it was funny, but I also didn't think about it.) In short, I was a completely naïve and unsophisticated newbie, and I was at the mercy of the last person I talked to.When I talked to value managers, their strategy made perfect sense to me. I'd hear "find strong companies whose stocks are trading at a substantial discount to their intrinsic worth and look for catalysts for change that will improve investors' perceptions." It's the classic "cheapness and change" mantra, and it made sense to me. Then I'd talk to technical analysts, and their mastery of reading stock charts made sense to me. They'd talk about support and resistance and volume and cups-with-handles and it sounded like they had the keys to the city. Perfect.Then the fundamental analysts would get their hooks into me, and that made sense to me too. After all, they'd say, it all comes down to the bottom line, and they'd show me revenue and earnings trends and projections based on market analysis and demographics and analysts' estimates. It's all about the numbers, and numbers don't lie.I also took a long walk in the world of fixed income securities, but I can't really write about that or I'll have a flashback and have to stop. Bonds are a world unto themselves.It wasn't until I came to Cabot that the truth finally dawned on me. It wasn't the case that any of those approaches to stock investing was right and the others were wrong. You could make money using any of them.What was really at issue in the big debate was whether any of the methods of stock analysis could get closer to The Truth than the others. And The Truth was confidence or certainty or conviction or whatever you want to call it. The real question was whether one method of stock analysis could approach certainty.But none could.About the best any analyst could come to predicting whether a particular stock (or industry or sector or country or index) would beat the Wilshire 5000 Index (the Index that represents the entire U.S. equity market) was around 50%.In fact, we used to say that if any equity manager could pick 51% winners consistently, he (or she) could rule the investment world!The only truth I've been able to find is that the factors that move stock prices up or down are too various and unpredictable to be reduced to a set of written-in-stone rules. And in the final analysis, a 50-page analysis of every fact in the know universe about a particular company and its stock isn't much better as a guide than a page or two of good solid analysis. If longer were better, stock recommendations would reach book length in no time.Any stock analysis that gets to 60% validity has done its job. Then it's your turn. You have to buy well, cut losses short in the ones that don't work and let your winners run. And you need to have the general trend of the market on your side.Ultimately that's what we preach at Cabot. And if it's more applicable to growth investing than other styles, well, that's where I came down anyway. I'm no thrill seeker, but I get more juice out of the growth style than any other.---In the spirit of broadening my horizons to beyond strictly growth stocks, I'm going to quasi-recommend a stock that has been correcting since last September. I really admired Fuqi International ([FUQI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUQI&selected=FUQI)) ) as it roared from 3 in March 2009 to 33 in September, but I never found the right buy point for the stock.The story is a good one, as Fuqi International is a Chinese jewelry company that sells mostly gold jewelry to wholesalers, who then retail it within China. The appetite of Chinese consumers for gold is a long-standing taste, as many Chinese families regard gold as a suitable way to safeguard family wealth. Buy when times are good; sell when times are bad.Times have been quite good for Fuqi, which reported a 135% jump in earnings in Q3 on a 36% gain in revenues. The after-tax profit margin was 14.8%. The roster of institutional investors has climbed from 17 in Q2 to 46 at last count. I don't usually recommend stocks that are in downtrends, but I've always been fascinated by the Fuqi story. With a P/E ratio of just 8, this looks like a great buy here, with two caveats. First, the stock needs to find some support and build a credible base before it can begin to advance. Second, the company's Q4 earnings report (which hasn't been scheduled yet) needs to show positive results.If FUQI can stop falling and get support from a good earnings report, it can be a real powerhouse. Just don't forget the "if."Sincerely,Paul GoodwinFor Cabot Wealth Advisory--- | Lessons from the Top-Performing Stocks | News | Cabot Wealth Network | Unknown | 0.0005 | 10.308 | 10.3318 | 10.5656 | 10.5956 | 10.5956 | 10.5955 | 10.5954 | 10.5956 | 10.5956 | 10.5956 | 10.7022 | 10.7944 | 10.6306 | 10.3375 | 10.3375 | 10.3375 | 10.3341 | 11.8498 |
QNST | QuinStreet, Inc. | Consumer Discretionary | Business Services | https://www.nasdaq.com/articles/quinstreet-ipo-leads-pack-2010-02-11 | 2010-02-11 05:43:00 | GNRC|Markets|BAC|PDM|IRWD|JPM|JKS | ** [Renaissance Capital IPO Research](http://www.renaissancecapital.com/RenCap/Default.aspx) submits:****Diverse Group to Test the Markets** This week is slated to see a diverse group of companies test the IPO market. Four [companies were scheduled](http://www.renaissancecapital.com/calendars/ondeck.aspx) to list on the NYSE yesterday: **Graham Packaging ([GRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRM&selected=GRM)) )** , a supplier of plastic consumer products; **Piedmont Office Realty ([PDM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PDM&selected=PDM)) )** , an office REIT; **JinkoSolar ([JKS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JKS&selected=JKS)) )** , a Chinese solar company; and **Patriot Risk Management ([PMG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PMG&selected=PMG)) )** , a workers' compensation risk insurer that had originally planned to price last week. Two additional companies are scheduled to begin trading on Thursday, Feb. 11: **Generac Holdings ([GNRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GNRC&selected=GNRC)) )** , which manufactures standby generators, and **QuinStreet ([QNST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=QNST&selected=QNST)) ),** which provides online lead generation. Of this group, QuinStreet's unique business model and track record of growth may make it the most interesting to IPO investors. QuinStreet plans to raise $180 million by offering 10 million shares at a range of $17-$19 with Credit Suisse ([CS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CS&selected=CS)) ), BofA Merrill Lynch ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) and J.P. Morgan ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) as the joint bookrunners on the deal. **The Business** QuinStreet is an Internet marketing company that generates revenue by connecting its clients, which are primarily companies in the education and financial services verticals, with new customers, who typically submit requests for information on client products while browsing sites that are owned by QuinStreet (30%) or third-parties (70%). Under its unique business model, it provides measurable results to clients in the form of qualified leads or clicks while being paid on a negotiated per-click basis. With an increasing shift from traditional to online advertising and a $25 billion market opportunity, QuinStreet believes it can continue to develop its top line, which has grown at a 33% CAGR over the past 5 years, at a 15-20% clip. The company generated $156 million in sales and $33 million in EBITDA (21% margin) through the six months ended December 2009, an improvement from the year-ago period, which saw $123 million in sales and $23 million in EBITDA (19% margin). **Key Issues** Our biggest concern is that despite compelling growth prospects, the company is heavily reliant on acquisitions and has made over 100 since 2007, clouding its organic growth profile. Though QuinStreet has attempted to diversify into other verticals such as home services and healthcare, this expansion has yet to scale. Additionally, clients within already existing verticals are consolidated with the top three constituting 32% of sales, and its top client, DeVry University ([DV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DV&selected=DV)) ), has recently scaled back its purchases. **Looking Ahead** With the recent setback in the general markets, investors have curbed their risk appetite, resulting in a shaky start to the 2010 IPO market: only one out of four companies scheduled to go public last week, **Ironwood Pharmaceuticals ([IRWD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRWD&selected=IRWD)) )** , successfully completed its deal. However, as a growing pure-play lead generation company backed by VC firms such as Split Rock Partners (13%) and Sutter Hill (8%), QuinStreet has been touted as a company that has the potential to buck this trend. Adding to media interest is the involvement of Frank Quattrone, whose technology-focused banking boutique is acting as financial advisor on the deal. Overall, though we expect to see some sensitivity toward the price given the volatile environment and the key issues described above, we believe QuinStreet's growth strategy and impressive financials should help drive interest in the deal.See also [What's the Current Upside Risk?](http://seekingalpha.com/article/189204-what-s-the-current-upside-risk?source=nasdaq) on seekingalpha.com | QuinStreet IPO Leads the Pack | News | SeekingAlpha | Unknown | 0.0005 | 0 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15.3809 | 15.0067 | 14.9465 | 14.9948 | 14.4652 | 14.4652 | 14.4652 | 14.3285 | 15.5137 |
IRWD | Ironwood Pharmaceuticals, Inc. | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/quinstreet-ipo-leads-pack-2010-02-11 | 2010-02-11 05:43:00 | GNRC|Markets|BAC|PDM|JPM|JKS|QNST | ** [Renaissance Capital IPO Research](http://www.renaissancecapital.com/RenCap/Default.aspx) submits:****Diverse Group to Test the Markets** This week is slated to see a diverse group of companies test the IPO market. Four [companies were scheduled](http://www.renaissancecapital.com/calendars/ondeck.aspx) to list on the NYSE yesterday: **Graham Packaging ([GRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRM&selected=GRM)) )** , a supplier of plastic consumer products; **Piedmont Office Realty ([PDM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PDM&selected=PDM)) )** , an office REIT; **JinkoSolar ([JKS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JKS&selected=JKS)) )** , a Chinese solar company; and **Patriot Risk Management ([PMG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PMG&selected=PMG)) )** , a workers' compensation risk insurer that had originally planned to price last week. Two additional companies are scheduled to begin trading on Thursday, Feb. 11: **Generac Holdings ([GNRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GNRC&selected=GNRC)) )** , which manufactures standby generators, and **QuinStreet ([QNST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=QNST&selected=QNST)) ),** which provides online lead generation. Of this group, QuinStreet's unique business model and track record of growth may make it the most interesting to IPO investors. QuinStreet plans to raise $180 million by offering 10 million shares at a range of $17-$19 with Credit Suisse ([CS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CS&selected=CS)) ), BofA Merrill Lynch ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) and J.P. Morgan ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) as the joint bookrunners on the deal. **The Business** QuinStreet is an Internet marketing company that generates revenue by connecting its clients, which are primarily companies in the education and financial services verticals, with new customers, who typically submit requests for information on client products while browsing sites that are owned by QuinStreet (30%) or third-parties (70%). Under its unique business model, it provides measurable results to clients in the form of qualified leads or clicks while being paid on a negotiated per-click basis. With an increasing shift from traditional to online advertising and a $25 billion market opportunity, QuinStreet believes it can continue to develop its top line, which has grown at a 33% CAGR over the past 5 years, at a 15-20% clip. The company generated $156 million in sales and $33 million in EBITDA (21% margin) through the six months ended December 2009, an improvement from the year-ago period, which saw $123 million in sales and $23 million in EBITDA (19% margin). **Key Issues** Our biggest concern is that despite compelling growth prospects, the company is heavily reliant on acquisitions and has made over 100 since 2007, clouding its organic growth profile. Though QuinStreet has attempted to diversify into other verticals such as home services and healthcare, this expansion has yet to scale. Additionally, clients within already existing verticals are consolidated with the top three constituting 32% of sales, and its top client, DeVry University ([DV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DV&selected=DV)) ), has recently scaled back its purchases. **Looking Ahead** With the recent setback in the general markets, investors have curbed their risk appetite, resulting in a shaky start to the 2010 IPO market: only one out of four companies scheduled to go public last week, **Ironwood Pharmaceuticals ([IRWD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRWD&selected=IRWD)) )** , successfully completed its deal. However, as a growing pure-play lead generation company backed by VC firms such as Split Rock Partners (13%) and Sutter Hill (8%), QuinStreet has been touted as a company that has the potential to buck this trend. Adding to media interest is the involvement of Frank Quattrone, whose technology-focused banking boutique is acting as financial advisor on the deal. Overall, though we expect to see some sensitivity toward the price given the volatile environment and the key issues described above, we believe QuinStreet's growth strategy and impressive financials should help drive interest in the deal.See also [What's the Current Upside Risk?](http://seekingalpha.com/article/189204-what-s-the-current-upside-risk?source=nasdaq) on seekingalpha.com | QuinStreet IPO Leads the Pack | News | SeekingAlpha | Unknown | 0.0005 | 11.6863 | 11.7409 | 11.6451 | 11.517 | 11.517 | 11.517 | 11.517 | 11.517 | 11.5408 | 11.5438 | 11.4027 | 11.4847 | 11.4139 | 11.4675 | 11.4675 | 11.4675 | 12.8093 | 12.9177 |
PDM | Piedmont Office Realty Trust, Inc. | Real Estate | Building operators | https://www.nasdaq.com/articles/quinstreet-ipo-leads-pack-2010-02-11 | 2010-02-11 05:43:00 | GNRC|Markets|BAC|IRWD|JPM|JKS|QNST | ** [Renaissance Capital IPO Research](http://www.renaissancecapital.com/RenCap/Default.aspx) submits:****Diverse Group to Test the Markets** This week is slated to see a diverse group of companies test the IPO market. Four [companies were scheduled](http://www.renaissancecapital.com/calendars/ondeck.aspx) to list on the NYSE yesterday: **Graham Packaging ([GRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRM&selected=GRM)) )** , a supplier of plastic consumer products; **Piedmont Office Realty ([PDM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PDM&selected=PDM)) )** , an office REIT; **JinkoSolar ([JKS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JKS&selected=JKS)) )** , a Chinese solar company; and **Patriot Risk Management ([PMG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PMG&selected=PMG)) )** , a workers' compensation risk insurer that had originally planned to price last week. Two additional companies are scheduled to begin trading on Thursday, Feb. 11: **Generac Holdings ([GNRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GNRC&selected=GNRC)) )** , which manufactures standby generators, and **QuinStreet ([QNST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=QNST&selected=QNST)) ),** which provides online lead generation. Of this group, QuinStreet's unique business model and track record of growth may make it the most interesting to IPO investors. QuinStreet plans to raise $180 million by offering 10 million shares at a range of $17-$19 with Credit Suisse ([CS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CS&selected=CS)) ), BofA Merrill Lynch ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) and J.P. Morgan ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) as the joint bookrunners on the deal. **The Business** QuinStreet is an Internet marketing company that generates revenue by connecting its clients, which are primarily companies in the education and financial services verticals, with new customers, who typically submit requests for information on client products while browsing sites that are owned by QuinStreet (30%) or third-parties (70%). Under its unique business model, it provides measurable results to clients in the form of qualified leads or clicks while being paid on a negotiated per-click basis. With an increasing shift from traditional to online advertising and a $25 billion market opportunity, QuinStreet believes it can continue to develop its top line, which has grown at a 33% CAGR over the past 5 years, at a 15-20% clip. The company generated $156 million in sales and $33 million in EBITDA (21% margin) through the six months ended December 2009, an improvement from the year-ago period, which saw $123 million in sales and $23 million in EBITDA (19% margin). **Key Issues** Our biggest concern is that despite compelling growth prospects, the company is heavily reliant on acquisitions and has made over 100 since 2007, clouding its organic growth profile. Though QuinStreet has attempted to diversify into other verticals such as home services and healthcare, this expansion has yet to scale. Additionally, clients within already existing verticals are consolidated with the top three constituting 32% of sales, and its top client, DeVry University ([DV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DV&selected=DV)) ), has recently scaled back its purchases. **Looking Ahead** With the recent setback in the general markets, investors have curbed their risk appetite, resulting in a shaky start to the 2010 IPO market: only one out of four companies scheduled to go public last week, **Ironwood Pharmaceuticals ([IRWD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRWD&selected=IRWD)) )** , successfully completed its deal. However, as a growing pure-play lead generation company backed by VC firms such as Split Rock Partners (13%) and Sutter Hill (8%), QuinStreet has been touted as a company that has the potential to buck this trend. Adding to media interest is the involvement of Frank Quattrone, whose technology-focused banking boutique is acting as financial advisor on the deal. Overall, though we expect to see some sensitivity toward the price given the volatile environment and the key issues described above, we believe QuinStreet's growth strategy and impressive financials should help drive interest in the deal.See also [What's the Current Upside Risk?](http://seekingalpha.com/article/189204-what-s-the-current-upside-risk?source=nasdaq) on seekingalpha.com | QuinStreet IPO Leads the Pack | News | SeekingAlpha | Unknown | 0.0005 | 14.7638 | 14.7638 | 14.7645 | 15.6492 | 15.6492 | 15.6492 | 15.6492 | 15.6492 | 15.4369 | 15.5012 | 15.5443 | 15.75 | 15.7642 | 18.6573 | 18.6573 | 18.6573 | 16.8521 | 17.8672 |
JKS | JinkoSolar Holding Co., Ltd. | Technology | Semiconductors | https://www.nasdaq.com/articles/quinstreet-ipo-leads-pack-2010-02-11 | 2010-02-11 05:43:00 | GNRC|Markets|BAC|PDM|IRWD|JPM|QNST | ** [Renaissance Capital IPO Research](http://www.renaissancecapital.com/RenCap/Default.aspx) submits:****Diverse Group to Test the Markets** This week is slated to see a diverse group of companies test the IPO market. Four [companies were scheduled](http://www.renaissancecapital.com/calendars/ondeck.aspx) to list on the NYSE yesterday: **Graham Packaging ([GRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRM&selected=GRM)) )** , a supplier of plastic consumer products; **Piedmont Office Realty ([PDM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PDM&selected=PDM)) )** , an office REIT; **JinkoSolar ([JKS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JKS&selected=JKS)) )** , a Chinese solar company; and **Patriot Risk Management ([PMG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PMG&selected=PMG)) )** , a workers' compensation risk insurer that had originally planned to price last week. Two additional companies are scheduled to begin trading on Thursday, Feb. 11: **Generac Holdings ([GNRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GNRC&selected=GNRC)) )** , which manufactures standby generators, and **QuinStreet ([QNST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=QNST&selected=QNST)) ),** which provides online lead generation. Of this group, QuinStreet's unique business model and track record of growth may make it the most interesting to IPO investors. QuinStreet plans to raise $180 million by offering 10 million shares at a range of $17-$19 with Credit Suisse ([CS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CS&selected=CS)) ), BofA Merrill Lynch ([BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)) ) and J.P. Morgan ([JPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JPM&selected=JPM)) ) as the joint bookrunners on the deal. **The Business** QuinStreet is an Internet marketing company that generates revenue by connecting its clients, which are primarily companies in the education and financial services verticals, with new customers, who typically submit requests for information on client products while browsing sites that are owned by QuinStreet (30%) or third-parties (70%). Under its unique business model, it provides measurable results to clients in the form of qualified leads or clicks while being paid on a negotiated per-click basis. With an increasing shift from traditional to online advertising and a $25 billion market opportunity, QuinStreet believes it can continue to develop its top line, which has grown at a 33% CAGR over the past 5 years, at a 15-20% clip. The company generated $156 million in sales and $33 million in EBITDA (21% margin) through the six months ended December 2009, an improvement from the year-ago period, which saw $123 million in sales and $23 million in EBITDA (19% margin). **Key Issues** Our biggest concern is that despite compelling growth prospects, the company is heavily reliant on acquisitions and has made over 100 since 2007, clouding its organic growth profile. Though QuinStreet has attempted to diversify into other verticals such as home services and healthcare, this expansion has yet to scale. Additionally, clients within already existing verticals are consolidated with the top three constituting 32% of sales, and its top client, DeVry University ([DV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DV&selected=DV)) ), has recently scaled back its purchases. **Looking Ahead** With the recent setback in the general markets, investors have curbed their risk appetite, resulting in a shaky start to the 2010 IPO market: only one out of four companies scheduled to go public last week, **Ironwood Pharmaceuticals ([IRWD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRWD&selected=IRWD)) )** , successfully completed its deal. However, as a growing pure-play lead generation company backed by VC firms such as Split Rock Partners (13%) and Sutter Hill (8%), QuinStreet has been touted as a company that has the potential to buck this trend. Adding to media interest is the involvement of Frank Quattrone, whose technology-focused banking boutique is acting as financial advisor on the deal. Overall, though we expect to see some sensitivity toward the price given the volatile environment and the key issues described above, we believe QuinStreet's growth strategy and impressive financials should help drive interest in the deal.See also [What's the Current Upside Risk?](http://seekingalpha.com/article/189204-what-s-the-current-upside-risk?source=nasdaq) on seekingalpha.com | QuinStreet IPO Leads the Pack | News | SeekingAlpha | Unknown | 0.0005 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
GRC | The Gorman-Rupp Company | Industrials | Fluid Controls | https://www.nasdaq.com/articles/compliance-risk-spending-rebound-2010-02-11 | 2010-02-11 07:00:00 | Financial Advisors | [Image](http://www.compliancereporter.com/images/572/CR-Cutbacks.gif) Firms are plotting to ramp up spending on risk management and compliance as pressure from regulators helps reverse two years of cutbacks. The renewed focus will see firms both in the U.S. and globally pour more resources into their teams.A study by **Deloitte** , due to be released next month, predicts the annual cost of implementing risk governance frameworks at the world's largest financial institutions will break the $100 billion mark in 2012, double the bill in 2006. Meanwhile, spending on governance, risk and compliance ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) programs among major U.S. companies, including financial institutions, dropped more than $1 billion from $29.9 billion in 2007 to $28.7 billion last year, according to a study by **AMR Research** . But respondents predicted that they will ramp up spending this year by roughly 4% to $29.8 billion, almost pre-meltdown levels. This year's GRC spending will be split between technology ($9.2 billion), external services such as consulting ($6.6 billion) and internal efforts such as staffing, legal and audit work ($14 billion). The renewed spending will be driven by a desire to mitigate and manage business risks and to avoid the perils and costs of non-compliance, particularly as regulators around the world beef up their oversight and roll out extensive new rules such as tougher liquidity requirements. **Simon Elvidge** , head of compliance at **Numis Securities** in London, said budgets will focus on the need for additional surveillance and staff. This in turn will drive up compensation costs as firms battle for the finite number of top-quality professionals, he added.In the U.S., **David Lui** , chief compliance officer with **FAF Advisors** , told CR he expected systems testing to be one of the main beneficiaries of the returning cash. Securities rules ask only that testing is "adequate" rather imposing a bright line test, making it easier to curtail when times are tough, he said. **Mark Egert** , CCO at **Cowen and Company** , said he has started to hear anecdotally of firms hiring additional compliance staffers as they grow their front office operations. He added that others are more cautious and are waiting to see if the improvement in the markets lasts before staffing up their back office operations. "There's a lot of pent-up demand for technology, bodies and services," Egert said. "You can only outsource so much." **--Ben Maiden & Hugh Leask** Copyright © 2010 Institutional Investor | Compliance, Risk Spending To Rebound | News | Compliance Reporter | Unknown | 0.0005 | 23.7986 | 23.7615 | 23.6017 | 23.36 | 23.36 | 23.36 | 23.36 | 23.36 | 23.2768 | 23.9142 | 24.046 | 24.0975 | 24.1809 | 23.8271 | 23.8271 | 23.8271 | 23.4583 | 25.4239 |
MLP | Maui Land & Pineapple Company, Inc. | Finance | Real Estate | https://www.nasdaq.com/articles/get-sky-high-yields-and-huge-profit-potential-oil-trust-2010-02-14 | 2010-02-14 06:56:00 | BP|Markets|BK|GS|BPT | Powerful factors are aligning.These forces clearly point to an increase in the price of oil.Consider: Worldwide petroleum use is increasing. A slight pullback caused by the recession notwithstanding, global demand for oil is on the rise as China and other emerging-market countries have begun to industrialize. Worldwide crude consumption rose from 65 million barrels per day in 1980 to more than 85 million barrels per day in 2007. Consumption is anticipated to rise to more than 94 million barrels per day by 2015. All that oil has to come from somewhere, of course. And the supply from which it comes is dwindling. New sources of oil are increasingly difficult to find. Earth has 1.3 trillion barrels of proven reserves -- only enough for 40 years at current rates, and far less if the uptrend in the world's appetite continues.The economics are simple: Increased demand and shrinking supply inevitably put upward pressure on prices. History clearly bears this out: Oil was $10 a barrel in 1998. The price rose for years and peaked at $147 a decade later, in 2008. Prices have since fallen, to about $73 per barrel, but the underlying economic dynamics of this commodity undoubtedly point to a strong price going forward.The second factor influencing the price of oil is the falling dollar. Oil is priced in dollars. As many predict the dollar will continue to decline in value as record deficits continue to escalate with no end in sight, a weak dollar will necessarily push the price of oil up even farther.Third: The world's economies have begun to recover. Analysts expect demand to resume its rise this year by a consensus average of 1.3 million barrels per day. **Goldman Sachs ([GS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GS&selected=GS)) )** currently estimates oil will go to $90 per barrel in 2010 and $110 per barrel in 2011.One of the best ways for income investors to play rising oil prices is **BP Prudhoe Bay ([BPT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BPT&selected=BPT)) )** . BPT is a royalty trust set up in 1989 by oil giant **BP plc ([BP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BP&selected=BP)) )** and **The Bank of New York Mellon Corporation ([BK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BK&selected=BK)) )** to pay royalty interests for revenue from oil producing properties on Alaska's North Slope. BPT distributes royalties on 16.4% of the first 90,000 barrels of the average actual daily net production (or the total daily production, whichever is less) per quarter from BP's working interest in the Prudhoe Bay Field, the largest oil-producing field in North America.The trust is set up to simply collect royalties on the oil sold. Obviously, higher oil prices mean higher royalties and better earnings and distributions. Like a master limited partnership ([MLP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MLP&selected=MLP)) ), BPT is not taxed at the corporate level provided the trust pays out the bulk of earnings in the form of distributions. However, unlike most MLPs, which mostly earn fees for the storage and transport of oil and gas, BPT's earnings are highly sensitive to the price of oil.As oil prices have plunged from record highs in 2008, this sensitivity to oil prices has not been a good thing.In the first three quarters of 2008, the trust sold oil at an average price of $104.35 per barrel. That average price fell to $53.66 in the same period in 2009. As a result, in the first nine months of 2009, revenues plunged more than -50% to $92.8 million and earnings also plunged by a similar percentage to $91.5 million from the first nine months of 2008.But how did the trust do during the past decade when oil prices were mostly on the rise? As of January 31, BPT has had a mind-boggling average annual total return of more than +31% per year for the past 10 years -- during which time the broader market's return has been negative. BPT clearly is an investment that does well when oil prices rise. BPT has also paid out a remarkable average dividend yield of 12.2% during the past five years.Distributions are paid quarterly and, while distributions totaled $11.70 per unit in 2008, they fell to $6.00 in 2009. However, the first distribution for 2010 was $3.61.That's a yield near 9.5% -- after a reduction. Just imagine what kind of cash this trust could throw off in the future.That said, even a vast oil field like Prudhoe Bay has a limited life, and as reserves in the oil properties diminish, the trust will eventually expire. As of Dec. 31, 2008, the trust estimated its proven reserves to be about 55 billion barrels. While BPT estimates that it will be able to continue to generate royalties to 2020 and beyond, production should gradually diminish. However, rising oil prices should be a huge benefit to unit holders during the next several years.Also, because of the aforementioned reasons as well as environmental considerations, there is a strong push toward alternative forms of energy including natural gas, nuclear as well as wind and solar. But, while these energy alternatives should gain in prominence and impact the demand for oil eventually, it probably won't happen any time soon. Falling oil prices in the recent recession have presented a window of opportunity. While a recovery may be short lived and oil prices could again pull back, the longer term trends are likely to win out eventually. The beautiful thing about that is that you get paid to wait. We've seen it happen with this same exact stock...You see, if you're one of our veteran High-Yield Investing subscribers you had the chance to make an +80.1% gain with BPT when Carla Pasternak recommended owning it between October 2004 and February 2007. What's incredible is that only +56.1% of the total returns Carla and her readers recognized came from capital gains -- the rest came from a steady stream of hefty dividends.So what's she recommending today? While Carla just profiled BPT in the most recent issue of High-Yield Investing , she didn't end up adding it to her portfolio this time around. Why? Because she's found even more compelling high-yielders for today's market -- some of which are paying out dividend yields of 10.0%... 11.8%... even 19.6%. If you're not putting your portfolio to work for you and collecting huge dividend checks like Carla and her subscribers are, you need to read this.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Disclosure: Tom Hutchinson does not own shares of any security mentioned in this article.Disclosure: Tom Hutchinson does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | Get Sky High Yields and Huge Profit Potential from This Oil Trust | News | Tom Hutchinson | Unknown | 0.0004 | 3.24135 | 3.25778 | 3.36544 | 3.36544 | 3.36544 | 3.36544 | 3.36544 | 3.36544 | 3.36544 | 3.53187 | 3.53187 | 3.53187 | 3.53187 | 3.50887 | 3.37039 | 3.39468 | 4.58371 | 5.50546 |
DO | Diamond Offshore Drilling, Inc. | Unknown | Unknown | https://www.nasdaq.com/articles/long-and-short-it-2010-02-15 | 2010-02-15 07:00:00 | ALL|Markets|PAA|XOM|JNJ|NE|MDT|RIG|SE|CNA|L | Although this newsletter focuses primarily on long investment ideas, short positions can boost profits in both bull and bear markets. And after last year's market rally more investors are looking for short ideas. For this month's interview we sat down with Mike Shinnick, portfolio manager of** Wasatch-1st Source Long/Short**([FMLSX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FMLSX&selected=FMLSX)) ), whose adept management of long and short positions ranks the fund in the top 7 percent of Morningstar's Long-Short category. **You take a value-approach when constructing the fund's long portfolio. In which sectors are you finding the best valuations?** Health care is somewhat of a contrarian play. Although these companies are executing well, multiples have contracted because of concerns about health care reimbursements and legislative change.But demand for health care remains strong--it was just a question of which business models would be able to maintain prices or at least benefit from increased volumes. Our strategy targeted companies with strong businesses whose stocks traded at a discount and niche names that would grow regardless of developments at the macro level.We took advantage of opportunities to buy some of the more established names that resemble consumer staples.Along these lines, we've owned **Johnson & Johnson** ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) for a few years and bought shares of **Medtronic** ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) in the third quarter of 2009. Medtronic is a high-quality company with a strong balance sheet and good business model. Its growth rate has slowed, but it's a great buy whenever it trades at less than a market multiple. And both stocks offer decent dividend yields.That's also the story with **St. Jude Medical** ([STJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STJ&selected=STJ)) ), which we bought after the stock got roughed up because the top line was off a bit. That didn't faze us--there's real demand for the company's cardiovascular products. One niche health care name that we like is **ZOLL Medical Corp** ([ZOLL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ZOLL&selected=ZOLL)) ). The stock has doubled since we bought it last year. The company operates three business lines, one of which is a bit of a staple--the other two provide a growth kicker. ZOLL manufactures defibrillators for hospitals, emergency vehicles and public spaces such as schools, airports and malls. These products serve an important, lifesaving function and have a finite life span because the batteries lose their charge over time. When we picked up the stock, concerns about constrained spending at hospitals caused a selloff. But we noted that demand was simply deferred--not disappearing.And the company's other two businesses offer attractive growth prospects. One is the LifeVest, an external device that functions like a pacemaker. Patients who suffer a heart attack are at the highest risk in the subsequent two months, but that's also the riskiest time to perform surgery. LifeVest isn't intrusive, giving the patient time to stabilize before a pacemaker is installed. Auto-Pulse, on the other hand, delivers regular, consistent compressions automatically--far preferable to manual CPR. Evidence suggests that this technology increases survival rates when transporting patients to the hospital. **The fund also has an overweight position in the energy sector. What are some of the stories you're tracking in that space?**Offshore drilling was a theme that worked last year, and we expect this play to gain momentum in 2010. If you're looking for value in this market, many of these companies have price-to-earnings ratios under 10 and solid balance sheets.Some of my favorite names are **Noble Corp** ([NE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NE&selected=NE)) ), **Ensco International** ([ESV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ESV&selected=ESV)) ), **Transocean** ([RIG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RIG&selected=RIG)) ) and Diamond Offshore Drilling ([DO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DO&selected=DO)) ), which we own through a position in **Loews Corp** ([L](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=L&selected=L)) ). The investment thesis behind offshore drillers is simple: A third of the planet is covered with land, and the remainder is water. When it comes to the debate about peak oil, I take the middle case: Oil is out there but we're running out of the cheap stuff. On land, oil producers are sinking ever-deeper wells and drilling horizontally. Today's oil finds are complex to produce. Technology has extended the search for oil into deeper waters--oftentimes four to five miles beneath the surface and seafloor. National oil companies and the industry's major players need to go offshore to find oil, and these massive, long-term projects don't shut down based on variations in the price of crude. Deepwater drilling activity even held up in fall 2008.Pipeline operators are another group we like in the energy space. Our position in Loews Corp provides exposure to Boardwalk Pipeline Partners ([BWP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BWP&selected=BWP)) ), and we also own **Plains All American Pipeline LP** ([PAA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PAA&selected=PAA)) ) and **Spectra Energy Corp** ([SE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SE&selected=SE)) ). Relative to other businesses in this area, energy infrastructure is somewhat boring; pipeline operators collect recurring fees that are independent of natural gas prices. But these stocks offer impressive dividend yields. **What's your take on financial stocks? I notice your fund has both long and short positions in this sector. **I've been relatively bearish on the financials; the sector accounts for the fund's largest short component.Loews Corp, the holding company that owns stakes in Diamond Offshore and Boardwalk Pipeline Partners, is our largest long position in the financial sector. It also controls roughly 90 percent of **CNA Financial Corp** ([CNA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CNA&selected=CNA)) ), a property and casualty (P&C) insurance firm whose shares trade at two-thirds of its book value. We find the firm does a much better job of asset and liability matching than a bank. This value proposition prompted us to add a position in the company itself. CNA's investment portfolio was under pressure in late 2008 and early 2009, which prompted the firm to issue 1.25 billion worth of preferred shares that it sold to Loews at a 10 percent coupon. The insurer raised capital in the fall at 7.35 percent, and the firm used some of the proceeds to redeem the aforementioned preferred shares. The company's investment portfolio has also appreciated over the last two quarters because of the recovery in credit markets. **The Allstate Corp** ([ALL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ALL&selected=ALL)) ), which specializes in P&C insurance for consumers, is the fund's second-largest position in the financial sector. Allstate doesn't necessarily offer extraordinary growth prospects, but demand for auto and homeowners insurance should continue independent of macroeconomic developments. Management has worked hard to reduce its exposure to mortgage-related assets, and the company appears well-positioned to take market share from financially strained competitors and mom-and-pop operations. **How do you identify opportunities on the short side?**Identifying profitable short positions doesn't involve looking for accounting fraud or companies that could go bust; rather, I look for companies whose share prices are overvalued and likely to decline. These bets are a way to make money--it's not a judgment on the underlying company. You don't have to be negative on a company to profit from a short position.For example, last year one of the fund's largest short positions was in ExxonMobile Corp ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) )--a great business with a healthy balance sheet. That being said, the company wasn't replacing its reserves aggressively, choosing instead to pull back the throttle on exploration and allocate more capital toward share buybacks. These investments made me question why the stock commanded a premium to the energy group and its subgroup--size and perceived safety only go so far. Although the price of oil doubled last year, shares of ExxonMobile were down 13 to 14 percent while we were short.In the financial sector, we're shorting companies whose business models are under deflationary pressure. Real estate investment trusts ([REIT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=REIT&selected=REIT)) ) are a capital structure play with favorable tax advantages. But real estate prices are flat or declining across various asset classes, and REITs' debt levels are inherently high. Add occupancy pressures and falling rents to that equation.I was short these companies in 2008, and they cracked hard in the first quarter of 2009. I reloaded in the second half after harvesting profits. Some of these names have headed higher than I had anticipated based on perceived strength. Although I applaud these companies' efforts to issue debt and equity, these moves have solidified the position of bondholders and diluted future equity returns. REITs will be under pressure until there's a case for rising commercial real estate asset prices. It's almost become cliché, but we're short consumer discretionary names. Even though the economy is in recovery, higher levels of unemployment and underemployment don't bode well for consumer spending. And US households need to allocate more money to servicing their debts. Income growth has also stagnated. I expect consumers to focus on needs as opposed to wants. In general, we're shorting specialty retailers that sell items that Middle America doesn't need--for example, towels or bedspread covers. Article Republished with permission from [www.KCIinvesting.com](http://www.kciinvesting.com/) and [www.rukeyser.com](http://www.rukeyser.com/) | The Long and Short of It | News | Investing Daily | Unknown | 0.0004 | 86.2198 | 85.3142 | 85.3142 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7668 | 86.7978 | 87.9308 | 87.4982 | 87.8356 | 87.6581 | 87.5051 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/e-commerce-enabler-just-lost-its-biggest-customer-hedge-fund-managers-highest-conviction | 2010-02-16 01:42:00 | MSFT|Markets|UPS|GEN|AMZN|IBM|ADBE|ACN|EBAY|DRIV | Simon Wong is the Principal of Pantheon Partners, L.P., a technology hedge fund based in New York City that focuses on longer-term product/industry cycles and turn-around situations where Pantheon fund managers believe their investments can outperform the market.Prior to joining Pantheon in 2004, Simon was a partner at Sycamore Ventures, and previously worked in engineering and market capacities at Intel Corporation, and in venture capital and investment banking positions at various affiliates of James D. Wolfensohn, Inc. • • •**Seeking Alpha (([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) )): What is the highest conviction stock position in your fund right now?****Simon Wong (([SW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SW&selected=SW)) )):** Our highest conviction stock position is **Digital River ([DRIV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DRIV&selected=DRIV)) )** . It is an enabler of e-Commerce solutions to companies in software, consumer electronics, computer/video games, and other markets. Its software e-Commerce solutions customers include Symantec ([SYMC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYMC&selected=SYMC)) ), Microsoft ([MSFT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSFT&selected=MSFT)) ), Adobe ([ADBE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADBE&selected=ADBE)) ), Computer Associates ([CA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CA&selected=CA)) ), Nuance ([NUAN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUAN&selected=NUAN)) ), and many other well-known companies in that market. Its services include the design and hosting of online stores, marketing services (such as search engine optimization and affiliate marketing), digital product delivery and product fulfillment, order/payment processing and fraud control, as well as tax collection/export control compliance services. DRIV provides electronic downloading services for digital delivery of software and payment services. In addition, it provides customer services in multiple languages to deal with any order related issues.During the fourth quarter of 2009, DRIV announced that its largest customer, Symantec Corporation, has decided not to renew its contract, which will expire on June 30, 2010. Instead, Symantec will build its own in-house e-Commerce platform. This development caused the stock price of DRIV to decline significantly. We believe this presented a buying opportunity.DRIV has also diversified its offering to include customers in consumer electronics, computer/video gaming and other industries. For example, DRIV's online store and fulfillment solution is being used by companies like Electronic Arts and Ubisoft in gaming software, and Research in Motion, Samsung, Seagate, Pentax, and others in consumer products. For goods that require physical delivery, DRIV transmits instructions to third parties for physical fulfillment.DRIV believes that its experience in providing a global platform for end-to-end outsourced e-Commerce is a significant differentiator. Many of its customers do not consider global payment processing, tax collection, product fulfillment and order-related customer services as their core expertise. Delivering e-Commerce solutions has been a very high growth and profitable business for DRIV. Between 2000 and 2006, the Company had annual growth rates ranging from around 30% to over 80% per year. After 2006, as Symantec's contribution stagnated, DRIV's growth slowed. However, its non-Symantec revenue continued to grow at over 20% per year until the recession of 2009. At the same time, DRIV has been able to achieve EBITDA margins in excess (sometimes well in excess) of 20% since 2000. Symantec has been a large customer of DRIV for many years. In fact, Symantec accounted for over 45% of DRIV's revenues back in 2006. However, since 2006, Symantec's contribution as a percentage of DRIV's total revenue has gradually declined. By September 2009, Symantec accounted for less than 30% of DRIV's revenues. The loss of Symantec will cause a drop in DRIV's revenue in its FY 2010. More significantly, because of the fixed costs inherent in this type of business, EBITDA margins will be negatively impacted even more severely. However, now that the loss of Symantec is reflected in the stock price, the key becomes how quickly and profitably will DRIV be able to grow its non-Symantec business. **SA: Can you talk a bit about the industry/sector? How much is this an "industry pick" as opposed to a pure bottom-up pick?****SW:** DRIV is both an industry sector and a bottom-up pick. The growth of e-Commerce is clearly a positive for DRIV. E-Commerce has continued to grow faster than the general economy. In the software arena, online electronic delivery of product has become an important means of product fulfillment. For example, Symantec mentioned in a recent conference call that 80% of its consumer revenues are fulfilled electronically. E-Commerce is also expected to grow rapidly in international markets, online gaming and new services such as software subscription. DRIV is also moving from its traditional business-to-consumer solutions to business-to-business solutions, especially for software companies that sell to small-medium sized businesses. This will open up new customer opportunities for the company.In addition, many companies who sell consumer products are recognizing that the internet allows them a direct connection to their end-use customers without going through retail intermediaries. This allows them to market directly to their customers and perhaps as importantly, to offer support/maintenance services and to gain intelligence on customer preferences. While this has created "channel conflicts" with retailers, manufacturers also recognize that some retailers have been offering "store-brands" to compete with them. They recognize that a direct connection with consumers is necessary and this has helped DRIV grow its consumer business. **SA: How would you describe DRIV's competitive environment?****SW:** DRIV operates in a very competitive field. It competes with in-house e-Commerce solutions and other third party solution providers. In the first category, IT consulting firms like Accenture ([ACN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ACN&selected=ACN)) ) and IBM Global Services ([IBM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IBM&selected=IBM)) ) create customized solutions for their clients, using proprietary software or tools from companies like Art Technology Group ([ARTG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ARTG&selected=ARTG)) ). Numerous consultants offer search engine optimization to help channel traffic to clients' website. In the outsourced arena, companies like GSI Commerce ([GSIC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSIC&selected=GSIC)) ) provide similar services to those of DRIV, albeit with differences in industry sector focus. In specific areas such as payment services, companies like CyberSource ([CYBS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CYBS&selected=CYBS)) ) and PayPal ([EBAY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EBAY&selected=EBAY)) ) offer out-sourced payment transaction services but not a complete end-to-end solution. A number of other companies, such as Amazon.com ([AMZN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AMZN&selected=AMZN)) ) and United Parcel Services ([UPS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UPS&selected=UPS)) ) also offer e-Commerce and fulfillment services. While they are not directly competitive at this time, it is possible that these companies may develop software or services which compete directly with DRIV.DRIV has a long history of providing reliable e-Commerce solutions. It has significant scale and operates in worldwide markets. In particular, DRIV has a very large presence in the electronic product distribution market for software vendors and video gaming companies. If it executes well, DRIV should be able to maintain a strong position in its markets. **SA: Can you talk about valuation? How does valuation compare to the competitors?****SW:** DRIV's stock has significantly declined over the last six months as a result of the loss of Symantec. At the time of this writing, the equity value is about $950 million but after subtracting net cash of about $440 million, enterprise value is slightly above $500 million. At 2009 consensus revenue of close to $400M, the stock is trading at about 1.3x estimated 2009 revenues and less than 5x 2009 estimated EBITDA. While revenues will decline in 2010 as Symantec is expected to contribute no revenues after June 2010 and EBITDA will decline disproportionately more as fixed costs are under-absorbed, the stock still trades at only slightly above 1.5x consensus 2010 revenues. As recent as October 2009, just prior to the Symantec announcement, DRIV traded at over 3x revenue and over 11x EBITDA on a run rate basis.DRIV's competitors are valued higher. GSI Commerce is valued at over 1.3x 2009 estimated revenue and over 13x 2009 estimated EBITDA as GSI's EBITDA margins are much lower at just slightly over 10%. Art Technology Group, a software vendor, sells for approximately 2.8x 2009 consensus revenues and over 18x 2009 consensus pro-forma EBIT before amortization of intangibles. **SA: What is the current sentiment on the stock? How does your view differ from the consensus?****SW:** Investors have taken a wait-and-see attitude towards DRIV stock in recent months. There remains considerable uncertainty as to how rapidly Symantec will migrate away from DRIV before the June 30, 2010 contract expiration deadline. Moreover, the ability of DRIV to reduce cost and at the same time grow non-Symantec revenue at higher rates remains uncertain in this difficult economic climate.It is difficult to forecast DRIV's revenue and profit levels during the Symantec transition period. However, for the medium term, I believe that both industry drivers and the management's proven ability to execute in the past will allow DRIV to achieve attractive growth and respectable profitability. DRIV has a strong market presence in some potentially high growth markets. While the loss of a big customer is always a disappointment and setback for a company, on the brighter side DRIV can now truly diversify its customer base to achieve more stable revenue growth and perhaps a higher multiple without the outsized dependency on Symantec. **SA: Does Digital River's management play a role in your position?****SW:** The action of DRIV's founder and CEO, Joel Ronning, played a role in our decision process. Soon after DRIV's third quarter 2009 earnings call, Mr. Ronning purchased $5 million worth of DRIV shares and an additional $1 million worth of long-term DRIV call options in the open market. While we recognize that Mr. Ronning had sold a considerable number of shares since DRIV's IPO in the late 1990s and he is investing back into the company only a fraction of those proceeds, nevertheless the total investment is a meaningful amount of money. It is a demonstration of resolve that we do not find in management of many other companies attempting similar turnarounds. **SA : What catalysts do you see that could move the stock?****SW:** Investors appear to be concerned about (1) the ability of DRIV to sign new customers and expand/retain existing customer relationships to offset the loss of Symantec, and (2) the prospects of lower profitability (or even losses) near-term as Symantec fully disengages with the company after June 30, 2010. If the company demonstrates good execution over the next few months, these concerns will be alleviated or eliminated.The management team at DRIV is working hard to grow its non-Symantec business. For existing customers, Microsoft has been increasing its business with the company with the launch of Windows 7 and Office 2010. Contract renewals with existing customers appear to be generally inline with historical experience. New contracts signed recently are continuing to ramp. So far, so good.If DRIV can gain traction in significant new contracts and/or markets, that will further enhance investor confidence. These may include further success in signing up more customers in consumer electronics and software (both business-to-consumer and business-to-business). Emerging markets for DRIV such as mobile commerce, online gaming transactions, and other software subscription services may also add to revenue growth and stronger profits.From an overall technology industry viewpoint, there has been much discussion about an "upgrade" cycle for personal computers and data centers. PCs are driven by Windows 7, which appears to be getting much stronger acceptance compared to its predecessor Vista. Data center upgrades are driven by virtualization and a migration to higher speed networks. As an e-Commerce provider to technology products, these trends can only help DRIV. **SA: What could go wrong with this stock pick?****SW:** The biggest risk facing DRIV is if some of its larger customers decide not to renew their contracts with the company. They may choose to follow Symantec's decision and develop their in-house solutions or to use another e-Commerce solution provider.Symantec has publicly said that it made the decision to build its own e-Commerce platform because it believes such an internal solution will allow it to respond more quickly to market, gather more information about customers, and target customers with more specificity. This is not a surprising conclusion as most internal solutions that are customized should provide better results. However, this development is also a very expensive endeavor and will impact negatively on Symantec earnings until late 2010.We are hopeful that DRIV recognizes the issues facing Symantec and has been working to improve its platform further to offer more flexibility and responsiveness to its customers.As I am finishing this response, DRIV reported its 2009 fourth quarter results and provided guidance for the first quarter of 2010. Fourth quarter results beat the company's guidance and consensus estimates for both revenue and EPS. Non-Symantec business was very strong, with the strength coming from Microsoft and other customers. First quarter revenue guidance was strong but profits guidance was below estimates. The company explained that it has decided to delay its cost cutting efforts due to its obligation to continue to support Symantec and because it is working on large customer wins which may generate sufficient revenues to utilize capacity.I am encouraged by the results which appear to indicate that DRIV is continuing to make progress to generate revenue growth. In a growing market, DRIV has to grow to generate prosperity for its stockholders. **SA: Thank you very much, Simon. ****SW:** My pleasure. **Disclosure:** Pantheon Partners is long DRIV ****If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please email Rebecca Barnett: [email protected] also [How Far Is the U.S. From Becoming Another Greece?](http://seekingalpha.com/article/189934-how-far-is-the-u-s-from-becoming-another-greece?source=nasdaq) on seekingalpha.com | An E-Commerce Enabler That Just Lost Its Biggest Customer Is This Hedge Fund Manager's Highest Conviction Pick | News | SeekingAlpha | Unknown | 0.0004 | 25.1819 | 25.115 | 25.8721 | 25.891 | 25.891 | 25.891 | 25.891 | 25.891 | 25.891 | 25.891 | 23.4771 | 24.8561 | 25.3622 | 24.1475 | 24.5383 | 23.1954 | 23.4704 | 22.1701 |
UPBD | Upbound Group, Inc. | Consumer Discretionary | Diversified Commercial Services | https://www.nasdaq.com/articles/rent-center-movin-2010-02-16 | 2010-02-16 07:41:00 | Markets | ******Rent-A-Center Inc. (** [RCII](http://moneycentral.msn.com/detail/stock_quote?symbol=rcii)**) --** This company engages in the rental of household durable goods to customers on a rent-to-own basis, principally in the United States.[RCII Chart](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png)[Chart Legend](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) RCII almost doubled from its extreme sell-off lows in October 2008, running from under $12 to over $22 in April 2009. Since then, it has been consolidating within a bullish right with at $17.RCII almost doubled from its extreme sell-off lows in October 2008, running from under $12 to over $22 in April 2009. Since then, it has been consolidating within a bullish right [triangle](http://www.optionszone.com/learn-more/john-lansing/technical-analysis-101-triangles.html) with [support](http://www.optionszone.com/learn-more/john-lansing/chart-analysis-resistance-and-support-levels.html) at $17.Several weeks ago, the stock began to show new life when upside [volume](http://www.optionszone.com/learn-more/john-lansing/trading-volume.html) increased, which led to a breakout on a gap from a better-than-expected earnings report on Feb. 1. The breakout is a significant technical signal.On Friday, the stock reversed following a round of profit-taking. A new break from the current flag pattern gives this stock a target of $28 to $30. **Related Articles:** - [9 Option Trades to Fall in Love With](http://www.optionszone.com/trading-picks/options/2010/02/option-trades-to-love.html) - [TEVA on the Advance](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/02/stock-picks-teva-pharmaceutical-teva.html) - [How to Profit From an Explosive Chart Formation](http://www.optionszone.com/learn-more/chris-rowe/symmetrical-triangle-chart-pattern.html) **Trade Options to Get Richer, Quicker!** There has never been a more exciting time to be an options trader. And now, you can get the option information you need FREE each week. [Sign up for your free subscription to Chris Johnson's Market Edge newsletter today!](http://www.optionszone.com/order/?sid=HD3101) [](http://www.optionszone.com/order/?sid=SQ3134) | Rent-A-Center Movin' On Up | News | Unknown | Unknown | 0.0004 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
GCI | Gannett Co., Inc. | Consumer Discretionary | Newspapers/Magazines | https://www.nasdaq.com/articles/what-buffett-sold-what-he-bought-and-whats-be-made-it-2010-02-17 | 2010-02-17 05:31:00 | Unknown | Let's get down to it.Here's what Warren Buffett's **Berkshire Hathaway (NYSE: BRK-B)** sold in the most recent quarter, according to Tuesday's filing with the Securities and Exchange Commission: - 1 million shares of **Carmax ([KMX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMX&selected=KMX)) )** - 19.7 million shares of **ConocoPhillips ([COP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=COP&selected=COP)) )** , an acquisition he has called a major mistake. The sale amounted to 34% of his stake in the oil company. - 854,490 shares of **ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) )** - 1.2 million shares of **Gannett ([GCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GCI&selected=GCI)) )** , the newspaper publisher, which represented 36% of his holdings in the company. (He did not sell any of his **Washington Post ([WPO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WPO&selected=WPO)) )** stock, though it's hard to say whether that's because of his belief in the strength of the company or because of his fondness for Katharine Graham, the paper's former publisher and his longtime confidante.) - 2.1 million shares of industrial conglomerate **Ingersoll-Rand ([IR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IR&selected=IR)) )** - 9.7 million shares of **Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) )** - 7.4 million shares of **Moody's ([MCO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCO&selected=MCO)) )** , which lost some of its luster in the subprime debacle and which now faces lawsuits about the ratings it gave mortgage securities. Plaintiffs include the California Public Employees Retirement System, whose lawsuit should be required reading for any fixed income investor. - 8.8 million shares of **Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) )** - 681,572 shares of **SunTrust Banks ([STI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STI&selected=STI)) )** - 2.2 million shares of **UnitedHealth Group ([UNH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UNH&selected=UNH)) )** the health insurer whose shares have been on a nice tear of late as the prospect of a nationalized health care system has grown unlikely. Buffett also offloaded more than 2.0 million shares of **WellPoint ([WLP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLP&selected=WLP)) )** , another large health insurer that has seen similar gains to United Health. Each of these sales helped Buffett raise cash for his Burlington Northern takeover. And it can be inferred that Buffett sees more potential from Burlington than he does from any of the companies he sold.So the converse can be said for the each of the five companies that he bought. Buffett -- in a quarter in which he sold stocks to raise cash for his railroad deal -- couldn't resist spending some on **Wells Fargo ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) )** , **Walmart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) )** , waste management provider **Republic Services ([RSG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RSG&selected=RSG)) )** , information protection company **Iron Mountain ([IRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRM&selected=IRM)) )** and medical device maker **Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) )** .Of these purchases, two things must be said: Buffett would buy Wells Fargo outright if he could, but not even the richest man in the world has enough jack to pull that deal off, though he is the largest shareholder.Buffett does, however, have the chance -- and the money -- to take over a large part the trash business in this country. And Buffett has a partner in mind -- his good friend Bill Gates.I for the life of me cannot understand why no one is making a big deal of this, but if you look at the holdings of the Gates Foundation and of Cascade Investments, Gates' personal hedge fund, it's pretty clear what's going on. Gates made huge investments in Republic Services in 2009 -- in fact, they amounted to the largest insider buy of the year.Now Buffett is following suit and clearly demonstrating that he thinks the trash business has more upside than railroads or any of the stocks he sold. That is the most compelling element of Buffett's latest filing. The smart money -- that is, yours and mine -- should follow.Here's the play-by-play of Buffett's $58 billion portfolio:[AXP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AXP&selected=AXP) [ BAC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BAC&selected=BAC)**3****Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) )****1,500,000****1,200,000****300,000****+25%** [BNI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BNI&selected=BNI) [ KMX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMX&selected=KMX) [ KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO) [ CMCSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CMCSA&selected=CMCSA) [ CDCO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CDCO&selected=CDCO) [ COP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=COP&selected=COP) [ COST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=COST&selected=COST) [ XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM) [ GCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GCI&selected=GCI) [ GE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GE&selected=GE) [ GSK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSK&selected=GSK) [ HD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HD&selected=HD) [ IR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IR&selected=IR)**17****Iron Mountain ([IRM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IRM&selected=IRM)) )** **7,000,000****3,372,200****3,627,800****+108%** [JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ) [ KFT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KFT&selected=KFT) [ LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW) [ MTB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MTB&selected=MTB) [ MCO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCO&selected=MCO) [ NRG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NRG&selected=NRG) [ NLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NLC&selected=NLC) [ NSRGY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NSRGY&selected=NSRGY) [ NIKE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NIKE&selected=NIKE) [ PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)**28****Republic Services ([RSG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RSG&selected=RSG)) )****8,290,500****3,625,000****4,665,500****+129%** [SNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SNY&selected=SNY) [ STI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STI&selected=STI) [ TMK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TMK&selected=TMK) [ TRV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TRV&selected=TRV) [ USB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=USB&selected=USB) [ USG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=USG&selected=USG) [ UPS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UPS&selected=UPS) [ UNH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UNH&selected=UNH)**37****Wal-Mart Stores ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) )****39,037,142****37,836,642****1,200,500****+3%** [WPO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WPO&selected=WPO)**39****Wells Fargo ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) )****320,088,385****312,355,657****6,732,728****+2%** [WLP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLP&selected=WLP) [ WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Disclosure: Andy Obermueller owns shares of BRK-B.Andy ObermuellerEditor: Government-Driven Investing © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | What Buffett Sold, What He Bought and What's to Be Made of It? | News | Andy Obermueller | Unknown | 0.0007 | 14.2849 | 14.3395 | 14.3535 | 14.848 | 14.848 | 14.848 | 14.848 | 14.848 | 14.9356 | 14.9066 | 14.998 | 14.9485 | 14.9987 | 15.2175 | 15.2947 | 15.2947 | 16.0776 | 16.5126 |
B | Barnes Group Inc. | Industrials | Metal Fabrications | https://www.nasdaq.com/articles/can-we-keep-rally-going-2010-02-18 | 2010-02-18 08:26:00 | XAU|Markets|SPX|WST|CAT|XLE|WMT|AVA|HD|LL|BAC | ****Stocks moved ahead again yesterday, but despite the good earnings reports and economic news, it lacked the enthusiasm of Tuesday's broad advance. The many encouraging reports led to a rally in the U.S. dollar -- a deviation from the strong dollar/weak stock and commodities markets pattern of the past year and a half.The Dow Industrials rose again with Bank of America ( ** [BAC](http://moneycentral.msn.com/detail/stock_quote?symbol=bac)** ) the best performer, up 3.3%. Home Depot ( ** [HD](http://moneycentral.msn.com/detail/stock_quote?symbol=hd)** ) and Caterpillar ( ** [CAT](http://moneycentral.msn.com/detail/stock_quote?symbol=cat)** ) also gained. Caterpillar announced Q4 earnings prior to the opening that exceeded estimates by a wide margin. Fed policy was again on the minds of market commentators following the release of the minutes of the FOMC's January meeting. It was revealed that the Fed governors are "slightly more confident" that a recovery is taking hold, according to the Wall Street Journal. And they raised their 2010 GDP forecast to 3.2% from 3%. But despite some improvement, the Fed voiced no desire to increase interest rates in the near future.Health care, consumer discretionary, consumer staples and industrials led the market, while energy and utilities underperformed.At the close, the Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) was up 40 points to 10,309, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) rose 5 points to 1,100, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) gained 12 points to 2,226.On the NYSE, volume was about 1 billion shares, and advancers exceeded decliners by more than 2-to-1. The Nasdaq's advancers were ahead by 3-to-2 with volume of 530 million shares.Crude oil for March delivery rose 32 cents to $77.33 a barrel, and the Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) fell 8 cents to $56.82. February gold gained 20 cents to settle at $1,119.0 an ounce. The PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) fell 1.02 to 162.97. **What the Markets Are Saying** On the surface, yesterday's modest advance following a very strong day on Tuesday, might encourage the bulls since profit-taking was minimal. But this sort of ordinary advance for the averages with lower volume and less impressive breadth is not good when the indices are approaching what could be a major resistance zone.On the NYSE breadth was positive 2-to-1 on Wednesday versus 5-to-1 positive on Tuesday. This lack of enthusiasm at the very beginning of a major resistance zone is a disappointment, especially considering the extent of the bounce accompanied by a key reversal day less than two weeks ago.Yesterday, the Dow Industrials got to within less than 70 points of their next hurdle -- the 50-day moving average. But the S&P 500 still has a bigger reach to its 50-day, while Nasdaq's intraday high came within less than 3 points of the barrier.Will the major indices break their respective 50-day moving averages, or roll over and meander around for several more weeks? The primary internal indicator for the indices is the [Relative Strength Index ( ](http://www.optionszone.com/learn-more/chris-rowe/using-relative-strength-index-to-sell-stocks-at-the-right-time.html) [RSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RSI&selected=RSI) ) . The RSI for the Dow is 52.91, for the "500" it is 52.06, and for Nasdaq it is 54.52. Every index is in the slightly above average reading and far from the overbought numbers of December, which were north of 70.The other internal indicators are just poking above what is considered average levels.My guess, then, is that we could get a series of tests of the 50-day moving averages on the major indices with a better-than-even chance that the barriers will fall. But in order to jump-start the market's engine, NYSE volume will have to increase to at least 1.4 billion shares from its current anemic levels with 1 billion shares trading.Watch volume for the next directional clue. Tomorrow we'll take a look at the latest sentiment indicators. **Today's Trading Landscape****Earnings to be reported before the opening include:** Ameren, Apache, Arbitron, Ariad Pharmaceuticals, Asset Acceptance Capital, AtriCure, Avista, Barnes Group, Barrick Gold Corp., Build-A-Bear Workshop, Cabela's, Colfax, CryoLife, Daimler AG, DIRECTV, DryShips, ev3, Five Star Quality Care, Gentiva Health Services, GLG Partners, Goodyear Tire, Heartland Payment Systems, Hormel Foods, i2 Tech, Incyte, Invesco Mortgage Capital, KBW, Knology, K-Swiss, Life Time Fitness, Lumber Liquidators, MGM Mirage, Navigant Consulting, Nexen, Noble Energy, NRG Energy, Omega Health, Orbital Sciences, Patterson Companies, Playboy, Pool Corp, Pride International, Public Service, Reliance Steel, Revlon, School Specialty, Spartan Motors, Spectranetics, State Auto Financial, Stealthgas, Swift Energy, Sycamore, Teekay Shipping, Terra Industries, Toro, Ultralife, Vasco Data Security, Ventas, Wal-Mart, Watson Wyatt, WellCare Health Plan, West Pharmaceutical Services, Williams Companies, Williams Partners and Windstream. **Earnings to be reported after the close:** Acacia Research, Anadigics, Anworth Mortgage Asset, Argo Group, Aruba Networks, AuthenTec, Bioform Medical, Bucyrus, Builders FirstSource, California Pizza, CBS Corp, CEC Entertainment, Dell, Developers Diversified Realty, Dress Barn, Eclipsys, Energy Transfer, Energy Transfer Equity, Fairfax Financial Holdings, First Solar, Gen-Probe, GFI Group, Grand Canyon Education, Harleysville Group, Hittite Microwave, Home Properties of NY, Ingram Micro, Internet Brands, Intuit, Ixia, j2 Global, Marchex, Maxwell Technologies, Maxygen, Merit Medical Systems, Morningstar, Nanometrics, Navios Maritime, On Assignment, RC2, Red Robin Gourmet Burgers, Rocky Brands, Sapient, Select Medical, Semitool, Senior Housing Properties Trust, Sequenom, Sunstone Hotel, The Knot, Universal American Corp., VCA Antech, Washington REIT, WebMD Health and Wright Medical. **Economic reports due:** producer price index (the consensus expects 0.8% and 0.1% ex-food and energy), jobless claims (the consensus expects 440,000), leading indicators (the consensus expects 0.5%), Philadelphia Fed Survey (the consensus expects 17), EIA natural gas report, EIA petroleum status report, Fed balance sheet and money supply. **Quarterly earnings news (earnings vs. estimates):** - Arbitron ([ARB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ARB&selected=ARB)) ): 33 cents vs. 32 cents - Avista ([AVA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AVA&selected=AVA)) ): 40 cents vs. 42 cents - Barnes GP ([B](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=B&selected=B)) ): 11 cents vs. 21 cents - Barrick Gold Corp. ([ABX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABX&selected=ABX)) ): 61 cents vs. 57 cents - Colfax ([CFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CFX&selected=CFX)) ): 26 cents vs. 24 cents - ev3 ([EVVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EVVV&selected=EVVV)) ): 23 cents vs. 13 cents - Lumber Liquidators ([LL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LL&selected=LL)) ): 25 cents vs. 25 cents - Nexen ([NXY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NXY&selected=NXY)) ): 49 cents vs. 50 cents - Orbital Sciences ([ORB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORB&selected=ORB)) ) 16 cents vs. 12 cents - WellCare Health Plans ([WCG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WCG&selected=WCG)) ): 47 cents vs. 44 cents - West Pharmaceutical Services ([WST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WST&selected=WST)) ): 67 cents vs. 65 cents - Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ): $1.17 vs. $1.12 - Windstream ([WIN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WIN&selected=WIN)) ) 17 cents vs. 20 cents **Related Articles:** - [Set Your Sights on Marvell](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/02/stock-picks-marvell-technology-group-mrvl.html) - [Options Don't Expire on Friday](http://www.optionszone.com/options-trading-101/getting-started/options-expiration-options-dont-expire-on-friday.html) - [Use Moving Averages to Keep Profits 'On the Move'](http://www.optionszone.com/learn-more/chris-rowe/how-moving-averages-work.html) **Trade Options to Get Richer, Quicker!**There has never been a more exciting time to be an options trader. And now, you can get the option information you need FREE each week. [Sign up for your free subscription to Chris Johnson's Market Edge newsletter today!](http://www.optionszone.com/order/?sid=HD3101) [](http://www.optionszone.com/order/?sid=SQ3134) | Can We Keep This Rally Going? | News | Unknown | Unknown | 0.0007 | 16.0081 | 16.512 | 16.3145 | 15.6492 | 15.6492 | 15.6492 | 15.6492 | 16.2366 | 16.3892 | 16.5456 | 16.6812 | 16.5798 | 16.1112 | 16.1298 | 16.1695 | 16.1688 | 16.8569 | 18.0585 |
VNDA | Vanda Pharmaceuticals Inc. | Health Care | Biotechnology: Pharmaceutical Preparations | https://www.nasdaq.com/articles/longer-dated-options-action-yahoo-nasdaq-yhoo-vanda-nasdaq-vnda-2010-02-19 | 2010-02-19 03:32:00 | Markets|MSFT | By 10:15 a.m. EST, more than **10,000 Yahoo! (NASDAQ: YHOO ) January 2011 15 puts crossed the tape at $1.69** , a penny below the ask price. Option investors most likely bought these puts, which are currently up two cents on the day and have an implied volatility of 33%. YHOO and Microsoft ([MSFT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSFT&selected=MSFT)) ) gained regulatory approval for a new search agreement yesterday, which could be a positive move for the companies, according to a Collins Stewart note released this morning. YHOO shares have dropped 20 cents to $44.04 so far today. **Vanda Pharmaceuticals (NASDAQ: VNDA )** options received a boost out of the gate from an **investor who likely sold 5,000 September 12.5 calls.** The investor colleted roughly $1 per contract. Current open interest of these options is 10,000 contracts, suggesting this call seller could have closed a long position. VNDA shares have dropped nine cents to $10.78 so far this morning. The company announced earnings of 34 cents a share on Feb. 16 and beat estimates by 18 cents. | Longer-dated options action in Yahoo! (NASDAQ: YHOO), Vanda (NASDAQ: VNDA) | News | Karla Yeh | Unknown | 0.0006 | 10.4767 | 10.47 | 10.8628 | 10.8555 | 10.8555 | 10.8555 | 10.8555 | 10.8558 | 10.8558 | 10.8543 | 10.6722 | 10.65 | 10.7136 | 10.6706 | 10.6636 | 10.6509 | 10.6908 | 11.7531 |
MFIC | MidCap Financial Investment Corporation | Finance | Finance/Investors Services | https://www.nasdaq.com/articles/inside-numbers-best-drips-america-2010-02-19 | 2010-02-19 06:30:00 | CNP|Markets|PNW|LLY|CINF|PBI | They say success comes at a price. The same thing applies to capital gains.Most investors forgot that lesson in the 1990s, when high-growth "dot-com" stocks were all the rage. Growth at any price was the name of the game, and some investors paid dearly for it. Why not get paid instead?That's why dividends are so important. A company paying a stable, steady dividend is more likely to be a safe investment than your average growth stock. Dividends may have lost some of their luster in the go-go 1990s, but there is no denying their power. Standard & Poor's estimates that dividends have accounted for about 44% of the market's total return during the last 80 years.There's something to be said for a steady dividend check rolling in through good times and bad. Even better, reinvesting dividends can build enormous wealth over time. For example, if you invested $10,000 in the S&P 500 in 1965 and held it to today, you'd be sitting on $110,600. Not bad, but consider this: if you had reinvested dividends, you'd have $451,300, or four times as much!Reinvesting dividends is simpler than some might think. All you need is a DRIP, and you don't have to go through your broker to use one.DRIPs are an incredibly easy way to compound returns over the long-run, but the process isn't as simple as picking a high-yielding stock with a DRIP. Investors will want to make sure their dividend is safe. After all, a hefty dividend paid by a company running low on cash won't last long. A good place to start is the dividend payout ratio, which measures the percentage of a company's earnings that are being paid out as dividends.For example: say a company earns $100 million in a year and paid out $70 million in dividends. That makes for a payout ratio of 70%. A good payout ratio depends on the industry. A ratio above 100% means a company is paying out more than it's earning -- meaning it's dipping into cash reserves to meet the payment, and a dividend cut could come if the earnings picture doesn't improve. By simply looking at the S&P's puny yield of 2.2%, it's tempting to think the era of high dividends is over. Not true. There are many options for yield-hungry investors to choose from. And after consulting the StreetAuthority research staff, we came up with the following criteria:-- Market capitalization of at least $250 million-- Currently yielding at least 5%-- Dividend payout ratio of less than 80%-- Offers a DRIP to investorsAfter sifting through the data, here's what turned up:**Company Name (Ticker)****Industry****Market Cap****Dividend Payout Ratio****Dividend Yield** [ LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY) [ PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN) [ CNP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CNP&selected=CNP) [ SCG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCG&selected=SCG) [ PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI) [ PNW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNW&selected=PNW) [ TE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TE&selected=TE) [ WR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WR&selected=WR) [ UIL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UIL&selected=UIL) As a starting point, conservative investors may want to choose among the utilities on this list. Their highly regulated businesses provide for stable cash flows and high barriers of entry to competitors. Readers may also be intrigued by the lone pharmaceutical stock in our results, **Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) )** . The company is trying to leverage its substantial cash flow from existing drugs and an acquisition of biotech firm ImClone to replenish its pipeline before the industry-wide patent cliff in 2011-2014, when many name-brand drugs will lose protection.But the real opportunity here seems to be **Apollo Investment Corp. (Nasdaq: AINV)** , a business development company. Apollo was hit hard in the downturn, primarily because it invests in small and medium-sized companies by providing equity loans and other forms of funding.Apollo cut its dividend during the worst of the downturn, but the current payout of $0.28 represents a trailing twelve-month yield of about 10%. Investors with a bit more of an appetite for risk should consider Apollo a rare opportunity to lock in a large, well-covered yield before prices return to historical levels. [Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Brad Briggs Staff Writer StreetAuthorityBrad BriggsStaff WriterStreetAuthorityP.S. Two years ago my boss Paul Tracy started an unusual investing program. It's already paying him nearly $3,000 a month in dividends. His goal is $100 a day -- and he's almost there. Paul admits he's no genius, and promises that anyone can transform their own portfolio into a "daily income machine" just like his. The trick, he says, is to simply follow a small set of "income rules" that guides your every investment. Reinvesting dividends is one of these rules... click here for the other seven.Disclosure: Brad Briggs does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | Inside the Numbers: The Best DRIPs in America | News | Brad Briggs | Unknown | 0.0006 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
PBI | Pitney Bowes Inc. | Miscellaneous | Office Equipment/Supplies/Services | https://www.nasdaq.com/articles/inside-numbers-best-drips-america-2010-02-19 | 2010-02-19 06:30:00 | CNP|Markets|PNW|MFIC|LLY|CINF | They say success comes at a price. The same thing applies to capital gains.Most investors forgot that lesson in the 1990s, when high-growth "dot-com" stocks were all the rage. Growth at any price was the name of the game, and some investors paid dearly for it. Why not get paid instead?That's why dividends are so important. A company paying a stable, steady dividend is more likely to be a safe investment than your average growth stock. Dividends may have lost some of their luster in the go-go 1990s, but there is no denying their power. Standard & Poor's estimates that dividends have accounted for about 44% of the market's total return during the last 80 years.There's something to be said for a steady dividend check rolling in through good times and bad. Even better, reinvesting dividends can build enormous wealth over time. For example, if you invested $10,000 in the S&P 500 in 1965 and held it to today, you'd be sitting on $110,600. Not bad, but consider this: if you had reinvested dividends, you'd have $451,300, or four times as much!Reinvesting dividends is simpler than some might think. All you need is a DRIP, and you don't have to go through your broker to use one.DRIPs are an incredibly easy way to compound returns over the long-run, but the process isn't as simple as picking a high-yielding stock with a DRIP. Investors will want to make sure their dividend is safe. After all, a hefty dividend paid by a company running low on cash won't last long. A good place to start is the dividend payout ratio, which measures the percentage of a company's earnings that are being paid out as dividends.For example: say a company earns $100 million in a year and paid out $70 million in dividends. That makes for a payout ratio of 70%. A good payout ratio depends on the industry. A ratio above 100% means a company is paying out more than it's earning -- meaning it's dipping into cash reserves to meet the payment, and a dividend cut could come if the earnings picture doesn't improve. By simply looking at the S&P's puny yield of 2.2%, it's tempting to think the era of high dividends is over. Not true. There are many options for yield-hungry investors to choose from. And after consulting the StreetAuthority research staff, we came up with the following criteria:-- Market capitalization of at least $250 million-- Currently yielding at least 5%-- Dividend payout ratio of less than 80%-- Offers a DRIP to investorsAfter sifting through the data, here's what turned up:**Company Name (Ticker)****Industry****Market Cap****Dividend Payout Ratio****Dividend Yield** [ LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY) [ PGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGN&selected=PGN) [ CNP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CNP&selected=CNP) [ SCG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCG&selected=SCG) [ PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI) [ PNW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNW&selected=PNW) [ TE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TE&selected=TE) [ WR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WR&selected=WR) [ UIL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UIL&selected=UIL) As a starting point, conservative investors may want to choose among the utilities on this list. Their highly regulated businesses provide for stable cash flows and high barriers of entry to competitors. Readers may also be intrigued by the lone pharmaceutical stock in our results, **Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) )** . The company is trying to leverage its substantial cash flow from existing drugs and an acquisition of biotech firm ImClone to replenish its pipeline before the industry-wide patent cliff in 2011-2014, when many name-brand drugs will lose protection.But the real opportunity here seems to be **Apollo Investment Corp. (Nasdaq: AINV)** , a business development company. Apollo was hit hard in the downturn, primarily because it invests in small and medium-sized companies by providing equity loans and other forms of funding.Apollo cut its dividend during the worst of the downturn, but the current payout of $0.28 represents a trailing twelve-month yield of about 10%. Investors with a bit more of an appetite for risk should consider Apollo a rare opportunity to lock in a large, well-covered yield before prices return to historical levels. [Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Brad Briggs Staff Writer StreetAuthorityBrad BriggsStaff WriterStreetAuthorityP.S. Two years ago my boss Paul Tracy started an unusual investing program. It's already paying him nearly $3,000 a month in dividends. His goal is $100 a day -- and he's almost there. Paul admits he's no genius, and promises that anyone can transform their own portfolio into a "daily income machine" just like his. The trick, he says, is to simply follow a small set of "income rules" that guides your every investment. Reinvesting dividends is one of these rules... click here for the other seven.Disclosure: Brad Briggs does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | Inside the Numbers: The Best DRIPs in America | News | Brad Briggs | Unknown | 0.0006 | 22.6726 | 22.6877 | 22.3705 | 22.6541 | 22.6541 | 22.6541 | 22.6541 | 22.6541 | 22.7682 | 22.8291 | 22.827 | 22.8309 | 22.8355 | 22.927 | 22.9282 | 22.7024 | 22.9191 | 24.4687 |
GSL | Global Ship Lease, Inc. | Consumer Discretionary | Marine Transportation | https://www.nasdaq.com/articles/short-case-crown-castle-international-2010-02-23 | 2010-02-23 04:12:00 | Markets|AMT|SBAC|CCI | **Summary** Crown Castle International ([CCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CCI&selected=CCI)) ) operates wireless towers primarily in the US. Like most of its competitors, CCI has been growing slowly but unprofitably for a long time and is expected to remain so through 2010. It is highly levered and could easily experience a cash crunch within the next two years. Nevertheless, it is trading at a bewildering 92x consensus earnings estimates for 2011 (not 2010). In recent M&A deals, per-tower prices imply a valuation for CCI that is about 35% lower. Management and insiders have taken advantage of this to sell 30% of their shares over the past 6 months. **The bull case** The wireless tower industry looks attractive on the surface:o Revenues are recurring, predictable and growing slowly. Over >90% of CCI's sales are from renewals. o Leases with tenants are typically long-term. The average CCI tower lease has 7 years to go.o Towers can accommodate multiple tenants (wireless carriers), but maintenance costs per tower are largely fixed, so revenue from additional tenants is very profitable. In CCI's case, substantially all towers can accommodate at least one more tenant.o Additionally, there seems to be plenty of room for growth as 3G and 4G networks come online, and as users switch from just talking on cell phones to using them in data networks. US Wireless data service revenues for the first half of 2009 increased by 31% over the first half of 2008 and now represent approximately 28% of the total average revenue per user.As a company, CCI looks like it's about to turn the corner:o It has just reported a profitable quarter, earning 5c/share in Q4 2009. Q1 2009 was also barely profitable. o It has about 1.8B in NOLs, and is not expecting to pay taxes for 7 years.o It grew revenue per tower approximately 10% in 2009, primarily from increased tenant density (per tower) So, what's wrong with this picture?**Industry problems** Wireless carriers used to own and operate their own towers, and some of them still do. However, the industry evolved into a model of 3rd party operators primarily because one tower can usually accommodate five or more carriers, and it is more efficient to share. Additionally, this business model reduced capex requirements on the carriers and created revenue stability for tower operators, so they could be valued more highly.The valuation part of the thesis worked out beautifully: The top three largest publicly traded tower operators in the US ([[AMT]], [[CCI]] and [[SBAC]]) trade at over 5x book and 8x revenue. Unfortunately, the operational reality is a little less sunny: Of the three, only AMT is profitable, and only since 2006. SBAC has been unprofitable each year since 1999. CCI has been unprofitable each year except 2004. Not a good record.The tower industry is suffering from three adverse trends that are not likely to stop anytime soon: 1) **Wireless carrier consolidation:** Wireless carriers have been merging and consolidating so quickly it's triggered a recent and well-publicized FCC inquiry. Carrier consolidation hurts tower operators in two ways: The number of tenants per tower goes down, and the surviving carrier's negotiating leverage goes up. In fact, lower network costs and economies of scale are one of the major rationales for the mergers. These economies are extracted directly from the tower operator's bottom line.2) **Tower technology advances:** Early cell towers were very tall and their locations were chosen to support as many subscribers as possible per tower. As a result, some towers were in "prime" locations and could command high rents. More recently, the technology has evolved from "best location" to "multiple location." Newer towers are more numerous and lower to the ground, and coverage is much more of a patchwork. This improves coverage redundancy and reliability, but it means there's almost no such thing as a "prime" spot any more. That's good for wireless customers like you and me, good for wireless carriers, bad for tower operators and owners. We can see evidence of this trend in dropping cell tower lease rates. This trend is slow because leases are usually long term, but it should intensify as the technology evolves to make coverage cheaper to deliver.3) **Dropping barriers to entry and switching costs:** Contrary to CCI's 10k, it is cheap and getting cheaper for a cell phone carrier to switch towers. It has also gotten cheaper to put up a new antenna, particularly in urban locations where they can go right on top of an existing roof or water tower. New "stealth" towers are much less of an eyesore, and are becoming easier to get through local ordinances and building standards (although they are a bit more expensive to build). These advances work toward increasing competitive intensity among tower operators. It is reminiscent of the shift from mainframes to PCs.Additionally, the U.S. wireless market is pretty close to being fully penetrated at 91%. Sure, there is some growth remaining - a few countries like Finland and the U.K. report wireless penetration rates as high as 120% (100 people have 120 phones). However, these countries are much smaller geographically than the US and have higher population densities. Even if we accept 120% as a target, surely we are past the fast-growth part of the curve and well into the diminishing returns area.There is also some growth in minutes (3% YoY) and data (31% YoY) but that kind of growth accrues primarily to the wireless carrier because tower lease rates are generally fixed, and do not depend on the volume of traffic the tower handles. There is some room for renegotiation when leases are up, but that is infrequent and due to increased competition between tower operators (as discussed above) lease rates end up going primarily down, not up. The tower industry is also particularly prone to inflation risk, which has not been mentioned much. This is because - like many commercial property owners - its revenues are fixed and long term (average CCI lease expires in 7 years) whereas costs (maintenance) are short term and primarily driven by inflation. So if you believe inflation is going to tick up over the next 7 years, this opportunity should of interest.At the end of the day, there is just very little differentiation between a CCI, AMT or SBAC tower. There are no major economies of scale that I can discern - AMT, the only profitable competitor - has slightly fewer towers than CCI. Lease rates for the towers are driven much more by location than by the "brand" of the tower, which means that economic profits accrue (or will eventually accrue) to the owner of the underlying real estate, not necessarily to the operator. CCI owns the land under just 24% of the towers it operates** Problems with the company** CCI is covered by a small army of 16 sell-side analysts. Additionally, the company provides quarterly guidance on revenues, net income, EBITDA, etc. And, isn't the point of investing in wireless towers that the revenue is so predictable? So, I would not presume to second-guess this highly compensated and trained group by attempting to craft a more accurate forecast. I would, however, question the valuation:The analyst consensus is that CCI will lose 6c/share in 2010 and earn 42c/share in 2011. Let's say that's exactly what will happen. At the current price, this comes to about 92x projected 2011 earnings. That's pretty high on an absolute level. What's interesting is that is even high relative to CCI's top competitor, AMT, which is also overpriced in my opinion. AMT trades at "only" 65x TTM earnings and 51x 2010 earnings, despite the fact that AMT has the better reputation, higher revenue per tower, lower leverage and actual profits. I guess Mr. Market would rather pay up for prospective growth than ongoing profits. **M&A comps** CCI's market cap is about $11B, and it operates 24k towers, implying a value of about $457k per tower. AMT bought 88 U.S. towers in Jan-Sep 2009 for an average of $292k/tower, 65% of CCI's value. This is probably the most comparable deal. AMT bought several other towers in 2009 for $58k and $223k per tower, respectively 13% and 49% of the CCI-implied value, but these were located in India and Brazil which are less mature markets (though higher growth) and probably deserve a lower valuation. About the only M&A deal I could find that could possibly justify CCI's valuation was when CCI bought Global Signal ([GSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSL&selected=GSL)) ) in January 2007. CCI paid about $5.8B for GSL's portfolio of 10,659 towers which comes to $544k per tower or 120% of CCI's current value. The rationale for the deal was that GSL's portfolio was complementary, and its towers were "less mature" i.e. had fewer tenants per tower, so if CCI could increase that to match its own tenants per tower, it would realize synergies. In the two years since the acquisition, CCI has been able to boost tenants per tower from 2.5 to 2.9. However, given the massive price it paid, I believe the benefits accrued mostly to the selling GSL shareholders. I think it overpaid in the 2007 market peak. **NOLs** CCI boasts $1.8B in NOLs, and pays very little taxes. What's interesting is that management claims it will exhaust its NOLs in seven years. That seemed like a very long time to me, considering the valuation. I tried to think through what that management forecast looks like. For simplicity's sake, let's assume CCI will grow NI 10%/year for 7 years (which will be hard to do , that total NI over the 7 years will be 1.8B, that it will be able to convert all NI to FCF (an aggressive assumption that is also incompatible with the growth assumption above), at that the end of that period, CCI will keep on growing at 3% a year forever (= inflation). I tried to do a couple of "back of the envelope" DCF-type valuations using these #s and all manner of discount and growth rates, and I can't seem to get above 30% of the current CCI market cap. I must be missing something big. **Adjusted EBITDA / FCF** CCI curiously states that "Adjusted EBITDA…is the primary measure of profit and loss used by management for purposes of making decisions about allocating resources to, and assessing the performance of, our operating segments." I thought this was a bit strange - shouldn't management be looking primarily at net income? Return on capital? Or at least EBIT? Perhaps this is why the company (and industry) is chronically and unabashedly unprofitable.Nonetheless, I tried to value the company using free cash flow (which I assume is what "adjusted EBITDA" is trying to capture). Using FCF=Operating CF-Capex, we get $398m of FCF in 2009. The enterprise value is about $17.5B so we have a paltry FCF/EV yield of 2.3%.Suppose we want to refine this calculation to only use "maintenance" capex. Management claims only $28m of the $173m in capex was "sustaining" and the rest was "discretionary." I think this is highly suspect, because management also states that "During 2009, we limited our discretionary investments, including a reduction in discretionary capital expenditures, in order to increase liquidity available to retire debt and settle certain of our interest rate swaps." I believe this means they cut discretionary spending to zero to save cash. Also, of the 3 public competitors profiled above, the lowest capex/sales I could find in any of the past 3 years was around 11%, which is about what CCI spent in 2009, so I think that is the right "maintenance" capex figure. But even if we take management at their word, FCF goes up to $543m, and the FCF/EV yield only goes up to about 3.1%. **Insider selling** Insiders sold 6.5m shares over the past year, including 4.6m shares over the past 3 months. Insiders only hold an additional 13.7m shares, so these sales were very significant relative to holdings. There were no insider share purchases over the past 12 months. **Catalyst: Leverage** So far, I've presented a couple of different ways to value CCI, and hopefully established that the company is vastly overvalued. But what's going to bring the valuation back inline, other than a general market correction? I believe the answer is leverage and liquidity.Given CCI's nice and predictable cashflows, it has taken on a lot of debt. This was exacerbated by its purchase of GSL in 2007, when it paid a very high price in my opinion. Operating income was insufficient to meet interest expenses in each of the past three years.If you look at Operating Income / Total Fixed Costs, you get coverage ratios of 0.79, 0.64 and 0.22 in 2009-08-07 respectively. Total Fixed Costs, which are helpfully calculated for us in the 10k, include interest payments, ground lease payments and other things that CCI can't get out of. They exclude $20m/year that CCI pays in preferred dividends (yes, it has paid a steady dividend despite being steadily unprofitable) because that dividend could be paid in stock instead at CCI's option.Another way of looking at this problem is to examine "Contractual Cash Obligations" which the company also tabulates for us by year. These include primarily interest payments and ground least rent which the company will owe. They add up to about $1B/year in each of the next 3 years (2010-12). Compare that with operating cash flow of $571m in 2009 and cash in hand of $766m. Will there be enough cash to cover contractual obligations through 2011? Through 2012? What about the ambitious expansion plan, and dividend payment? If not, where will the extra cash come from? Are there any answers that could be good for equity holders? CCI has already refinanced $5.2B of its 6.5B in debt in 2009 to extend maturities into future years. The new debt bears higher interest rates on average, with senior unsecured debt yielding 9%. This will make things harder for the company moving forward. The bond market seems to be waking up to the risk the company poses. **Pair Trade** If you agree with the analysis of CCI but disagree with the analysis of the tower industry, or if you just want less delta exposure, you can still take advantage of the mispricing by going short CCI and long AMT. As mentioned above, AMT trades at "only" 65x TTM earnings and 51x 2010 earnings, compared to CCI's 92x 2011 earnings, despite the fact that AMT has the better reputation, higher revenue per tower, lower leverage and actual profits. **Disclosure:** Short CCISee also [Cellcom Israel Ltd. Q4 2009 Earnings Call Transcript](http://seekingalpha.com/article/191566-cellcom-israel-ltd-q4-2009-earnings-call-transcript?source=nasdaq) on seekingalpha.com | The Short Case for Crown Castle International | News | SeekingAlpha | Unknown | 0.0008 | 1.61423 | 1.62046 | 1.62 | 1.60926 | 1.60926 | 1.60926 | 1.60926 | 1.60926 | 1.60926 | 1.61742 | 1.60139 | 1.01835 | 0.988494 | 1.63843 | 1.67955 | 0.0249 | 2.12264 | 2.64494 |
EE | Excelerate Energy, Inc. | Utilities | Oil/Gas Transmission | https://www.nasdaq.com/articles/market-verge-falling-2010-02-23 | 2010-02-23 08:26:00 | XAU|Markets|BAC|XLE|SPX|CBRL|OHI|WLK|HD|SLB | ****Yesterday, a sluggish session ended on a down note as investors pondered the significance of last week's rate cut, the economy, and a stubborn technical barrier. And it ended four days of advances with the energy sector down sharply and the financial sector folding in the final hours of trading.Energy stocks were the worst performers with Schlumberger ( ** [SLB](http://moneycentral.msn.com/detail/stock_quote?symbol=slb)** ) off 1.3% following its announced stock-for-stock merger with Smith International ( ** [SII](http://moneycentral.msn.com/detail/stock_quote?symbol=sii)** ). Financial stocks did well in the morning, helped by a 2.1% surge in Bank of America ( ** [BAC](http://moneycentral.msn.com/detail/stock_quote?symbol=bac)** ) after a federal judge approved a $150 million settlement between the bank and the SEC over matters involving disclosures before its acquisition of Merrill Lynch.The uneventful session ended on low volume with the Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) down 19 points to 10,383, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) off a point to 1,108, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) down 2 points to 2,242.The NYSE traded just 944 million shares with slightly more decliners than advancers, and on the Nasdaq, 557 million shares traded with advancers ahead by 7-to-6.March crude oil gained 15 cents to $76.96 a barrel as the refinery strike in France continued. The Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) fell to $56.57, down 79 cents.Gold for February delivery fell $8.70 to $1,112.60 an ounce, and the PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) fell 2.44 points to 162. **What the Markets Are Saying** Sluggish trading failed to penetrate the key technical barriers as the Dow closed fractionally above its 50-day moving average, leaving only the Nasdaq cleanly above the barrier, but by just 9 points.Both the S&P 500 and the NYSE Composite again closed below this important moving average, and the S&P is barely holding above the psychologically important number of 1,100.The major indices are in a quagmire, and the internal indicators, which are in overbought zones, are starting to curve down, indicating that a sell signal from the stochastic and [Moving Average Convergence/Divergence ( ](http://www.optionszone.com/learn-more/john-lansing/moving-averages-what-the-macd-can-tell-you.html) [MACD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MACD&selected=MACD) ) could occur at the slightest round of selling. Just as important, the momentum indicator has moved to an extreme overbought position in just two days, and at this extreme level could quickly go negative.This leaves us with a bullish divergence: The Dow and Nasdaq are above their 50-day moving average, and the two broad indices, the "500" and the NYSE Composite, are under it.Meanwhile, [as pointed out yesterday](http://www.optionszone.com/learn-more/john-lansing/moving-averages-what-the-macd-can-tell-you.html) , only the Nasdaq has managed to penetrate the February trading peak, and that leaves the most speculative group of stocks as the only ones to have crossed two significant technical barriers, while the big caps and better-quality stocks are not attracting buyers. Adding to the market's difficulty in shaking out of a narrow trading range is the volume and breadth problem. With such low volume and narrow breadth working against the bulls, it will be hard for them to maintain their hard-won advances.A definite confirmation of the Nasdaq's move above resistance from the other broad-based indices is required in order to keep the bullish ball rolling, and that confirmation had better arrive soon, or stocks will fall. **Today's Trading Landscape****Earnings to be reported before the opening include:** Acorda Therapeutics, Amedisys, Astec Industries, Barnes & Noble, Bill Barrett, BluePhoenix Solutions, CDI Corp., Ceradyne, Checkpoint Systems, China Automotive, Cracker Barrel, Daktronics, Denbury Resources, Diana Shipping, El Paso Electric, Entercom, EW Scripps, Expeditors, Federal Signal, FirstEnergy, GrafTech, GTX, Heidrick & Struggles, Henry Schein, Home Depot, HRPT Properties Trust, Huron Consulting, Iconix Brand, IdaCorp, Interactive Data, IPG Photonics, Isle of Capri Casinos, Knology, Liz Claiborne, Macy's, Marvel Entertainment, Medco Health Solutions, Medtronic, Mobile Mini, Navios Maritime Holdings, NRG Energy, Office Depot, Omega HealthCare Investors, Petrohawk Energy, Radian Group, Sanderson Farms, Sears Holdings, Sonic Automotive, St. Joe Company, Target, Tenet Healthcare, Tennant, Ternium S.A., Unit Corp., Vornado Realty Trust, Wabtec, Watson Pharmaceuticals and Westlake Chemical. **Earnings to be reported after the close:** American Capital, American Reprographics, Apollo Commercial Real Estate, Autodesk, AXT, Basic Energy Services, BGC Partners, BioMarin Pharmaceuticals, Blue Coat, Brookdale Senior Living, Catalyst Health Solutions, Century Aluminum, Chiquita Brands, Conceptus, DealerTrack, Dolan Media, Dreamworks Animation, Duff & Phelps, Dycom Industries, Education Realty Trust, EPIQ Systems, Exco Resources, First Industrial Realty Trust, Global Cash Access, Global Defense Technology & Systems, Hansen Medical, Herbalife, Hersha Hospitality Trust, Hertz Global Holdings, Interface, ISTA Pharmaceuticals, Kaiser Aluminum, Limelight Networks, Northeast Utilities, Onyx Pharmaceuticals, Orient-Express Hotels, Ormat Technologies, OSI Pharmaceuticals, Papa John's, Parallel Petroleum, Premiere Global Services, Psychiatric Solutions, Radiant Systems, Range Resources, Schawk, SRS Labs, STEC, Stone Energy, Sunstone Hotel Investors, Verigy, Volcano, Waste Services and Wilson Greatbatch. **Economic reports due:** ICSC-Goldman Sachs store sales, Redbook, S&P/Case-Shiller home price index, consumer confidence (the consensus expects 55), and State Street Investor Confidence Index. **Quarterly earnings news (earnings vs. estimates):** - Ceradyne ([CRDN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CRDN&selected=CRDN)) ): 55 cents vs. 32 cents - Cracker Barrel ([CBRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBRL&selected=CBRL)) ): $1.09 vs. 90 cents - El Paso Electric ([EE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EE&selected=EE)) ): 18 cents vs. 21 cents - Home Depot ([HD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HD&selected=HD)) ): 24 cents vs. 17 cents - Medco Health Solutions ([MHS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHS&selected=MHS)) ): 76 cents vs. 75 cents - Omega Health ([OHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OHI&selected=OHI)) ): 36 cents vs. 36 cents - Petrohawk Energy ([HK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HK&selected=HK)) ): 12 cents vs. 15 cents - Sanderson Farms ([SAFM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAFM&selected=SAFM)) ): 75 cents vs. 64 cents - Sears Holding Corp. ([SHLD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHLD&selected=SHLD)) ): $3.69 vs. $3.54 - Westlake Chemical ([WLK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLK&selected=WLK)) ): 19 cents vs. 19 cents **Related Articles:** - [3 Emerging Market Bubbles Ready to Burst](http://www.optionszone.com/trading-picks/stocks-to-short/2010/02/emerging-markets-to-short-with-etfs.html) - [Give EEV a Second Go-Round](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/02/stock-picks-proshares-ultrashort-msci-emerging-markets-fund-eev-2.html) - [New Options Allow Traders to Make Dividend Bets](http://www.optionszone.com/market-commentary/options-activity/2010/02/options-on-dividend-etfs-dvs-dvy-vig-pey.html) **3 Cheap, Must-Own Recovery Stocks to Double in 2010**Get the names of the best cheap stocks to rebuild your wealth in 2010. Each stock sells for less than $10 a share and is set to double (even triple!) in the next 12 months. [Download your FREE report here.](http://www.optionszone.com/order/?sid=SM3134) | Market on the Verge of Falling | News | Unknown | Unknown | 0.0008 | 20.0104 | 20.5876 | 20.5973 | 20.4931 | 20.4931 | 20.4477 | 20.448 | 20.2219 | 20.1533 | 20.186 | 20.1295 | 20.1295 | 20.2278 | 19.8472 | 20.1616 | 20.1229 | 20.2143 | 20.2933 |
CBRL | Cracker Barrel Old Country Store, Inc. | Consumer Discretionary | Restaurants | https://www.nasdaq.com/articles/market-verge-falling-2010-02-23 | 2010-02-23 08:26:00 | XAU|Markets|BAC|XLE|EE|SPX|OHI|WLK|HD|SLB | ****Yesterday, a sluggish session ended on a down note as investors pondered the significance of last week's rate cut, the economy, and a stubborn technical barrier. And it ended four days of advances with the energy sector down sharply and the financial sector folding in the final hours of trading.Energy stocks were the worst performers with Schlumberger ( ** [SLB](http://moneycentral.msn.com/detail/stock_quote?symbol=slb)** ) off 1.3% following its announced stock-for-stock merger with Smith International ( ** [SII](http://moneycentral.msn.com/detail/stock_quote?symbol=sii)** ). Financial stocks did well in the morning, helped by a 2.1% surge in Bank of America ( ** [BAC](http://moneycentral.msn.com/detail/stock_quote?symbol=bac)** ) after a federal judge approved a $150 million settlement between the bank and the SEC over matters involving disclosures before its acquisition of Merrill Lynch.The uneventful session ended on low volume with the Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) down 19 points to 10,383, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) off a point to 1,108, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) down 2 points to 2,242.The NYSE traded just 944 million shares with slightly more decliners than advancers, and on the Nasdaq, 557 million shares traded with advancers ahead by 7-to-6.March crude oil gained 15 cents to $76.96 a barrel as the refinery strike in France continued. The Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) fell to $56.57, down 79 cents.Gold for February delivery fell $8.70 to $1,112.60 an ounce, and the PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) fell 2.44 points to 162. **What the Markets Are Saying** Sluggish trading failed to penetrate the key technical barriers as the Dow closed fractionally above its 50-day moving average, leaving only the Nasdaq cleanly above the barrier, but by just 9 points.Both the S&P 500 and the NYSE Composite again closed below this important moving average, and the S&P is barely holding above the psychologically important number of 1,100.The major indices are in a quagmire, and the internal indicators, which are in overbought zones, are starting to curve down, indicating that a sell signal from the stochastic and [Moving Average Convergence/Divergence ( ](http://www.optionszone.com/learn-more/john-lansing/moving-averages-what-the-macd-can-tell-you.html) [MACD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MACD&selected=MACD) ) could occur at the slightest round of selling. Just as important, the momentum indicator has moved to an extreme overbought position in just two days, and at this extreme level could quickly go negative.This leaves us with a bullish divergence: The Dow and Nasdaq are above their 50-day moving average, and the two broad indices, the "500" and the NYSE Composite, are under it.Meanwhile, [as pointed out yesterday](http://www.optionszone.com/learn-more/john-lansing/moving-averages-what-the-macd-can-tell-you.html) , only the Nasdaq has managed to penetrate the February trading peak, and that leaves the most speculative group of stocks as the only ones to have crossed two significant technical barriers, while the big caps and better-quality stocks are not attracting buyers. Adding to the market's difficulty in shaking out of a narrow trading range is the volume and breadth problem. With such low volume and narrow breadth working against the bulls, it will be hard for them to maintain their hard-won advances.A definite confirmation of the Nasdaq's move above resistance from the other broad-based indices is required in order to keep the bullish ball rolling, and that confirmation had better arrive soon, or stocks will fall. **Today's Trading Landscape****Earnings to be reported before the opening include:** Acorda Therapeutics, Amedisys, Astec Industries, Barnes & Noble, Bill Barrett, BluePhoenix Solutions, CDI Corp., Ceradyne, Checkpoint Systems, China Automotive, Cracker Barrel, Daktronics, Denbury Resources, Diana Shipping, El Paso Electric, Entercom, EW Scripps, Expeditors, Federal Signal, FirstEnergy, GrafTech, GTX, Heidrick & Struggles, Henry Schein, Home Depot, HRPT Properties Trust, Huron Consulting, Iconix Brand, IdaCorp, Interactive Data, IPG Photonics, Isle of Capri Casinos, Knology, Liz Claiborne, Macy's, Marvel Entertainment, Medco Health Solutions, Medtronic, Mobile Mini, Navios Maritime Holdings, NRG Energy, Office Depot, Omega HealthCare Investors, Petrohawk Energy, Radian Group, Sanderson Farms, Sears Holdings, Sonic Automotive, St. Joe Company, Target, Tenet Healthcare, Tennant, Ternium S.A., Unit Corp., Vornado Realty Trust, Wabtec, Watson Pharmaceuticals and Westlake Chemical. **Earnings to be reported after the close:** American Capital, American Reprographics, Apollo Commercial Real Estate, Autodesk, AXT, Basic Energy Services, BGC Partners, BioMarin Pharmaceuticals, Blue Coat, Brookdale Senior Living, Catalyst Health Solutions, Century Aluminum, Chiquita Brands, Conceptus, DealerTrack, Dolan Media, Dreamworks Animation, Duff & Phelps, Dycom Industries, Education Realty Trust, EPIQ Systems, Exco Resources, First Industrial Realty Trust, Global Cash Access, Global Defense Technology & Systems, Hansen Medical, Herbalife, Hersha Hospitality Trust, Hertz Global Holdings, Interface, ISTA Pharmaceuticals, Kaiser Aluminum, Limelight Networks, Northeast Utilities, Onyx Pharmaceuticals, Orient-Express Hotels, Ormat Technologies, OSI Pharmaceuticals, Papa John's, Parallel Petroleum, Premiere Global Services, Psychiatric Solutions, Radiant Systems, Range Resources, Schawk, SRS Labs, STEC, Stone Energy, Sunstone Hotel Investors, Verigy, Volcano, Waste Services and Wilson Greatbatch. **Economic reports due:** ICSC-Goldman Sachs store sales, Redbook, S&P/Case-Shiller home price index, consumer confidence (the consensus expects 55), and State Street Investor Confidence Index. **Quarterly earnings news (earnings vs. estimates):** - Ceradyne ([CRDN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CRDN&selected=CRDN)) ): 55 cents vs. 32 cents - Cracker Barrel ([CBRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBRL&selected=CBRL)) ): $1.09 vs. 90 cents - El Paso Electric ([EE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EE&selected=EE)) ): 18 cents vs. 21 cents - Home Depot ([HD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HD&selected=HD)) ): 24 cents vs. 17 cents - Medco Health Solutions ([MHS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHS&selected=MHS)) ): 76 cents vs. 75 cents - Omega Health ([OHI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OHI&selected=OHI)) ): 36 cents vs. 36 cents - Petrohawk Energy ([HK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HK&selected=HK)) ): 12 cents vs. 15 cents - Sanderson Farms ([SAFM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAFM&selected=SAFM)) ): 75 cents vs. 64 cents - Sears Holding Corp. ([SHLD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHLD&selected=SHLD)) ): $3.69 vs. $3.54 - Westlake Chemical ([WLK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WLK&selected=WLK)) ): 19 cents vs. 19 cents **Related Articles:** - [3 Emerging Market Bubbles Ready to Burst](http://www.optionszone.com/trading-picks/stocks-to-short/2010/02/emerging-markets-to-short-with-etfs.html) - [Give EEV a Second Go-Round](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/02/stock-picks-proshares-ultrashort-msci-emerging-markets-fund-eev-2.html) - [New Options Allow Traders to Make Dividend Bets](http://www.optionszone.com/market-commentary/options-activity/2010/02/options-on-dividend-etfs-dvs-dvy-vig-pey.html) **3 Cheap, Must-Own Recovery Stocks to Double in 2010**Get the names of the best cheap stocks to rebuild your wealth in 2010. Each stock sells for less than $10 a share and is set to double (even triple!) in the next 12 months. [Download your FREE report here.](http://www.optionszone.com/order/?sid=SM3134) | Market on the Verge of Falling | News | Unknown | Unknown | 0.0008 | 39.9553 | 39.9723 | 39.9733 | 41.4018 | 41.4018 | 41.3982 | 41.3418 | 42.0086 | 42.6177 | 42.3837 | 42.3542 | 42.3542 | 42.6438 | 43.3635 | 43.6545 | 43.6843 | 44.6464 | 46.9054 |
ADTN | ADTRAN Holdings, Inc. | Utilities | Telecommunications Equipment | https://www.nasdaq.com/articles/buy-balance-sheet-2010-02-25 | 2010-02-25 03:01:00 | AAPL|Markets|CIEN | We can all be thankful for the remarkable rebound in the stock market, which has helped to rebuild many portfolios during the past 11 months. Stocks may power yet higher if the economy is indeed on the mend, but concerns remain that we're due for another slowdown. In a time like this, you may as well stick with stocks that possess leverage to an economic upturn, but are likely to hold their own if the market cools off. You can find those "safe stocks" by looking for balance sheet strength.With its mountains of cash telecom equipment maker **Tellabs (Nasdaq: TLAB)** is one company that provides comfort. Tellabs was early to the internet/telecom revolution, providing high-end gear to phone companies since 1974. The company has always sought to increase the efficiency of those networks, and was a key player in the effort to help voice networks handle increasing volumes of data. Of course, it's been a long time since that industry was in high-growth mode, which explains why this stock once fetched more than $80 but now trades for less than $7.Though the days of sizzling growth are over, Tellabs looks set to start growing at a moderate pace in the years to come. That's because the company is rolling out gear that helps telecom providers handle the rising volume of data that is being pushed out to mobile devices such as **Apple's (Nasdaq: AAPL)** iPhone and **Research in Motion's (Nasdaq: RIMM)** Blackberry. Telecom operators are having a hard time keeping up with the explosive demand for faster speeds and large video files that are increasingly being viewed on mobile devices. Apple's coming iPad tablet, along with a raft of similar products, should only stoke mobile traffic even higher. (For another way to profit from the booming smartphone market, see "Stock #5" in this report. The company gained more than +150% last year and is poised to crush the S&P 500 again in 2010.) The economic slowdown led Tellabs' customers to defer any non-essential spending, which explains why sales fell another -12% in 2009 to around $1.5 billion. But the sales plunge appears to be at an end. Management expects first-quarter sales to be around $370 million, roughly $10 million above year-ago levels. That would mark the first year-over-year quarterly increase in several years. As a result, sales and earnings estimates, which had been steadily falling, are now starting to rise. Management's confidence is aided by the fact that book-to-bill, which compares incoming orders to actual sales, was above 1.0 in the fourth quarter of 2009.To be sure, Tellabs' sales rebound will likely be modest, perhaps in the +5% to +10% range once the economy is truly back on sustainable footing. But that should be sufficient to drive profit growth at a faster clip. That's because management has been steadily cutting costs, which is giving a clear boost to gross margins and operating margins. In the most recent quarter, gross margins rose 370 basis points from a year earlier to 45.2%. Gross margins were also aided by a shift in the sales mix to newer cutting-edge products. Operating margins, which were barely positive a year ago, hit an impressive 9.0% in the most recent quarter. And they could exceed 10% in coming quarters, as management plans to shed an additional 200 jobs.Rising profits are being aided by an ever-shrinking share count: The company bought back 12 million shares in 2009, and is expected to keep buying stock in 2010 as well. That's the benefit of having a super-strong balance sheet. Tellabs' has more than $1.3 billion in cash. That accounts for exactly half of the company's market value. So if the economy cools and the stock market pushes this stock back down, then the company's ongoing stock buyback program will simply be able to buy an even greater number of shares. Meanwhile, shares trade at a discount to rivals **Ciena (Nasdaq: CIEN)** and **Adtran (Nasdaq: ADTN)** . Tellabs' enterprise value (market capitalization plus debt minus cash), as a percentage of projected 2010 sales, is below 1.0, while those other firms trade at 1.2 times and 2.3 times, respectively. And enterprise value, as a multiple of operating cash flow, is just 5.5 times for Tellabs, while that ratio is 96 times and nine times, for its respective rivals.A strong balance sheet, attractive valuations, and a brightening sales picture? What more could a value investor ask for?-- David StermanContributorStreetAuthorityDisclosure: David Sterman does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | Buy This Balance Sheet | News | David Sterman | Unknown | 0.0009 | 23.2828 | 23.3111 | 23.2849 | 23.5414 | 23.5414 | 23.5414 | 23.5414 | 23.5414 | 23.5414 | 23.5414 | 23.2987 | 23.5395 | 23.6468 | 23.3903 | 23.5077 | 23.4847 | 25.5749 | 26.6042 |
PBI | Pitney Bowes Inc. | Miscellaneous | Office Equipment/Supplies/Services | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 22.927 | 22.7024 | 22.6476 | 22.6906 | 22.6906 | 22.6906 | 22.6906 | 22.6906 | 22.6512 | 22.68 | 22.8737 | 22.8971 | 22.9679 | 22.9046 | 23.0292 | 23.0361 | 23.6704 | 24.3816 |
LEG | Leggett & Platt, Incorporated | Consumer Discretionary | Home Furnishings | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 19.4229 | 19.4331 | 19.3094 | 18.9315 | 18.9315 | 18.9315 | 18.9315 | 18.9315 | 18.8561 | 18.6928 | 18.817 | 18.8225 | 18.8733 | 18.9695 | 19.111 | 19.1152 | 21.2243 | 21.6859 |
TNC | Tennant Company | Industrials | Industrial Machinery/Components | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 25.6536 | 25.3588 | 23.2022 | 23.2314 | 23.2314 | 23.2314 | 23.2314 | 23.2314 | 23.9448 | 23.673 | 24.1868 | 24.1641 | 24.1738 | 23.9885 | 24.0984 | 24.0952 | 26.6779 | 26.0753 |
UVV | Universal Corporation | Industrials | Farming/Seeds/Milling | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 53.363 | 54.2595 | 53.3621 | 52.9894 | 52.9894 | 52.9894 | 52.9894 | 52.9894 | 52.7121 | 53.4641 | 53.8324 | 53.9315 | 54.111 | 53.0825 | 53.4998 | 53.5451 | 53.7896 | 53.446 |
MSEX | Middlesex Water Company | Utilities | Water Supply | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Unknown | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 16.7362 | 16.893 | 16.8601 | 17.1019 | 17.1019 | 17.1019 | 17.1019 | 17.1019 | 17.1358 | 17.1229 | 17.0397 | 17.0589 | 17.0414 | 16.5698 | 16.661 | 16.6688 | 17.3593 | 17.2384 |
NWN | Northwest Natural Holding Company | Utilities | Oil/Gas Transmission | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 44.1522 | 44.4341 | 44.1503 | 43.9366 | 43.9366 | 43.9366 | 43.9366 | 43.9366 | 43.9721 | 43.9968 | 44.1077 | 44.1055 | 44.1003 | 44.0099 | 44.3366 | 44.3585 | 46.355 | 46.4255 |
CTBI | Community Trust Bancorp, Inc. | Finance | Major Banks | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 25.4563 | 25.5434 | 25.4598 | 25.8464 | 25.8464 | 25.8464 | 25.8464 | 25.8464 | 25.825 | 25.8834 | 26.0233 | 26.143 | 25.9835 | 25.5518 | 25.615 | 25.6246 | 26.8932 | 27.1712 |
WEYS | Weyco Group, Inc. | Consumer Staples | Apparel | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 22.1883 | 22.2399 | 22.8032 | 23.1759 | 23.1759 | 23.1759 | 23.1759 | 23.1759 | 23.247 | 23.3209 | 23.5012 | 23.4361 | 23.5766 | 23.0653 | 23.3069 | 23.323 | 23.9796 | 23.5632 |
GRC | The Gorman-Rupp Company | Industrials | Fluid Controls | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SCL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 24.0263 | 24.066 | 23.4491 | 23.0167 | 23.0167 | 23.0167 | 23.0167 | 23.0167 | 22.96 | 23.0159 | 23.4374 | 23.5092 | 23.4583 | 23.5201 | 23.5944 | 23.5884 | 25.5962 | 26.6816 |
SCL | Stepan Company | Consumer Discretionary | Package Goods/Cosmetics | https://www.nasdaq.com/articles/comparing-dividend-aristocrats-dividend-champions-2010-02-25 | 2010-02-25 07:01:00 | Markets|CLX|APD|WMT|MMM|XOM|HRL|VFC|CBSH|BOH|TDS|CINF|GWW|WEYS|TGT|ORI|AFL|SYY|T|PG|PBI|NFG|LOW|KMB|CWT|GRC|BDX|RPM|MGEE|ED|BEN|ABM|CTBI|LEG|NDSN|FRT|RLI|BKH|PPG|DBD|TNC|SJW|CSL|KO|AWR|MSEX|JNJ|EMR|MDT|NWN|ADP|ADM|ABT|PNR|FUL|MCD|GPC|UBSI|DOV|SON|MSA|JCI|PH|TR|ITW|TFX|LLY|HP|WSC|CTAS|UVV|NUE|CB|SWK|SHW|PEP|LANC|CL | ** [David Van Knapp](http://www.sensiblestocks.com/) submits:**There are two lists that serve as basic source material for investors interested in long-term dividend-raisers. One is the well-known ** [Dividend Aristocrats](http://www.standardandpoors.com/indices/market-attributes/en/us)** list published by S&P. (To get the list, click the link here, then Market Attributes, then Dividend Aristocrats. Free registration is required.) The other is the lesser-known ** [Dividend Champions](http://www.dripinvesting.org/Tools/U.S.DividendChampions.pdf)** list maintained by The DRiP Investing Resource Center, a non-profit organization.In my book, the latter list is far more useful than the former. What follows is a comparison between the two lists. **Goals:** Both lists, at first glance, appear to have the same goal: To identify companies that have raised their dividends for 25 consecutive years. That would lead one to believe that the lists should be identical. But they are not. The Dividends Aristocrats [DA] list identifies **43** such companies as of February 17, 2010. The Dividend Champions [DC] list names **98** . How can that be? The answer lies in the methods used to compile the lists.The two organizations use slightly different wording to describe what their lists show. S&P states that the DA list shows companies with "25 consecutive years of increased cash payments." DriP puts it this way: "[C]ompanies that have increased their dividend in at least 25 consecutive years[,…]broadened to include additional companies that [have] paid higher dividends (without necessarily having increased the quarterly rate in every calendar year."**Source Universe:** DA uses the S&P 500. If a company is removed from the S&P 500, it is immediately removed from the DA list. If a company is added to the S&P 500, it is not eligible to be included on the DA list until the list is recompiled in mid-December each year. DC does not specify its universe, but it appears simply to be all US-based companies. Note that neither list includes foreign-based companies. **Update Schedule:** S&P's DA list is updated once per year, in mid-December. It remains unchanged during the year unless a company is dropped from the S&P 500 as just described. Each month during the year, DA is updated to show whether or not a dividend increase or decrease has been declared by each company on the list. So even if a company declares a decreased dividend early in the year, the company will remain on the DA list for the rest of the year. For example, when GE announced in Feb. 2009 that it intended to cut its dividend, GE remained on the DA list for the rest of 2009, with a notation that its dividend had "decreased in February."DC is updated every month. GE was deleted from its list at the end of Feb, 2009, as it should have been. DC maintains a running chronology of changes to its list. That chronology notes, "2/27/09: Deleted General Electric (div. reduced)." GE has not appeared on the DC list since that date. **What Qualifies as a Dividend Increase:** S&P focuses on "dividend actions." These are positive declarations by a company that it is increasing its dividend.DriP focuses on the actual dividend paid annually. This introduces another difference between the two lists. A company can increase its dividend distribution year-over-year without declaring a dividend increase. For example, "alternators" are companies that declare a dividend increase every other year, then hold the payment steady between increases. Say that a company pays out four times per year, as is typical of US companies. Then the actual annual dividend distribution will rise each year even if there is a declared increase only every other year. DC picks up such companies, DA does not. (If it is not intuitive to you why every-other-year increases result in annually increasing payouts, see the example in the DC document.) Another apparent difference is that DC accounts for "special dividends." When a company declares a special dividend, it can appear the following year that it cut its dividend, even though its "regular dividend" has actually increased. DC factors out special dividends for its listing, and therefore it does not drop a company on the basis that it issued a special dividend the preceding year. **Information Provided by Both Lists:** Each list gives the company name, ticker symbol, and sector/industry for each company on its list. Each list is available in Excel spreadsheet form. DriP also provides a pdf version of DC. The DA list is alphabetical, while the DC list is in descending order of the dividend streak. **Additional Information Provided:** DA provides a year-by-year tabulation (going back 8 years) of dividend actions by the companies on its list. It tells what month the dividend was increased in that year. For the current year, it tells whether a company has decreased its dividend, without removing the stock from the list. If the company has neither increased nor decreased its dividend in the current or preceding year, that cell is left blank in the spreadsheet. Even if a company has declared a decreased dividend, S&P keeps the company on the DA list until the next December update. So, for example, in the list dated 11/11/2009, DA showed 52 companies, even though 8 of them had decreased their dividends (as noted in the document). Two other companies remained on the list even though no increase was noted in either 2008 or 2009. All 10 of those companies have been removed from the 2010 list. DriP's DC list provides a host of additional information beyond the bare list itself: - Number of years of consecutive dividend increases (the leader = Diebold [DBD] at 56 years) - Whether the company offers a dividend re-investment plan [DRIP] - Price and yield as of the end of each month - The old and new quarterly dividend rate - The percentage of the most recent dividend increase - The ex-dividend, record, and payment dates - DriP's source of information for each stock - Notes, such as whether a stock's information has been adjusted because it issued a stock dividend, or if its payment schedule is other than quarterly - Totals and averages for all the stocks - A chronology of all adds, deletes, and methodology adjustments since the DC list was first published in 2007 The DC list uses colors to flag special situations: It uses green to indicate that an increase announcement is expected in the next 30 days. It uses red to indicate that the last dividend increase was more than a year ago (i.e., that this stock is a candidate to be dropped from the list.) The DC list drops stocks that freeze their dividend across two consecutive years. For example, Johnson Controls ([JCI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JCI&selected=JCI)) ) is one of the companies noted earlier that S&P kept on its list even though their spreadsheet showed blanks for both 2008 and 2009 (i.e., no dividend increases). DRiP, on the other hand, noted in its chronology that Johnson Controls was dropped in 9/2009 because "4 divs. pd. 2009 = 2008."Finally, the DC list includes an addendum of "contenders," companies that have recorded at least 15 but less than 25 years of dividend growth. Thus, DC is really a source for companies that have increased their dividends for 15 years or more I have seen it said that business cycles typically last for 3-8 years. Therefore, a company with a 15-year history of dividend growth has maintained that record through at least two business cycles, while a company with 25 straight years has done it through at least three cycles. Each is an impressive achievement. **Notes on Use:** In my opinion, either list should be used only as a starting point for doing your own due diligence. As many banks proved in 2008-09, just because a company has raised its dividend many years in a row does not mean that it has the financial wherewithal to keep doing so. Some financial institutions raised their dividends (and repurchased shares) just months before failing. Utilize a method for determining the financial soundness of a company, and the sustainability of its business model, before investing in it for increasing dividends. I modestly suggest the method laid out in my own [The Top 40 Dividend Stocks for 2010: How to Generate Wealth or Income from Dividend Stocks](http://www.sensiblestocks.com/dividendtop40description.html) . Also, just because a company has been raising its dividend for many years does not mean that it has a good yield. If you have a threshold minimum yield of 2.5% or 3%, some of these companies will not meet it. For example, Parker-Hannifin (52-year streak) yields 1.8% at the moment. Tootsie Roll (44 years) yields 1.2%. **Company Comparison:** The following table compares the two lists. It shows vividly the difference between them as sources for 25-year dividend raisers. You will note that just one company-Supervalu-appears on the DA list and not on the DC list. The company cut its dividend last October; it is not clear why S&P kept it on the DA list for 2010. **Company****S&P****Dividend Aristocrat?****DRiP****Dividend Champion?**Abbott Laboratories ([ABT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABT&selected=ABT)) ) YesYes (37 years) ABM Industries ([ABM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ABM&selected=ABM)) ) Yes (43) Aflac ([AFL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AFL&selected=AFL)) ) YesYes (27) Air Products & Chemicals ([APD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=APD&selected=APD)) ) YesYes (27) American States Water ([AWR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AWR&selected=AWR)) ) Yes (55) Archer Daniels Midland ([ADM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADM&selected=ADM)) ) YesYes (34) AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ) Yes (26) Automatic Data Processing ([ADP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ADP&selected=ADP)) ) YesYes (35) Bancorp South ([BXS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BXS&selected=BXS)) ) Yes (25) Bank of Hawaii ([BOH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOH&selected=BOH)) ) Yes (30) Becton Dickinson ([BDX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BDX&selected=BDX)) ) YesYes (37) Bemis ([BMS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BMS&selected=BMS)) ) YesYes (26) Black Hills ([BKH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BKH&selected=BKH)) ) Yes (40) Bowl America (BWL-A) Yes (38) Brown-Forman (BF-B) YesYes (26) California Water Service ([CWT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CWT&selected=CWT)) ) Yes (43) Carlisle ([CSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CSL&selected=CSL)) ) Yes (33) CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) ) YesYes (35) Chubb ([CB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CB&selected=CB)) ) YesYes (44) Cincinnati Financial ([CINF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CINF&selected=CINF)) ) YesYes (49) Cintas ([CTAS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTAS&selected=CTAS)) ) YesYes (27) Clarcor ([CLC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLC&selected=CLC)) ) Yes (26) Clorox ([CLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLX&selected=CLX)) ) YesYes (32) Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ) YesYes (47) Colgate-Palmolive ([CL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CL&selected=CL)) ) Yes (46) Commerce Bancshares ([CBSH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CBSH&selected=CBSH)) ) Yes (41) Community Trust Banc. ([CTBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTBI&selected=CTBI)) ) Yes (28) Connecticut Water Services ([CTWS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTWS&selected=CTWS)) ) Yes (40) Consolidated Edison ([ED](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ED&selected=ED)) ) YesYes (36) C. R. Bard ([BCR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCR&selected=BCR)) ) YesYes (38) Diebold ([DBD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DBD&selected=DBD)) ) Yes (56) Dover ([DOV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DOV&selected=DOV)) ) YesYes 54) Eaton Vance ([EV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EV&selected=EV)) ) Yes (29) Eli Lilly ([LLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LLY&selected=LLY)) ) YesYes (42) Emerson Electric ([EMR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EMR&selected=EMR)) ) YesYes (53) Energen ([EGN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EGN&selected=EGN)) ) Yes (28) ExxonMobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) YesYes (27) Family Dollar Stores ([FDO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FDO&selected=FDO)) ) YesYes (34) Federal Realty ([FRT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FRT&selected=FRT)) ) Yes (42) Franklin Resources ([BEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BEN&selected=BEN)) ) Yes (29) Genuine Parts ([GPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GPC&selected=GPC)) ) Yes (53) Gorman-Rupp ([GRC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GRC&selected=GRC)) ) Yes (35) H. B. Fuller ([FUL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FUL&selected=FUL)) ) Yes (40) Helmerich & Payne ([HP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HP&selected=HP)) ) Yes (37) Hormel Foods ([HRL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HRL&selected=HRL)) ) Yes (44) Illinois Tool Works ([ITW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ITW&selected=ITW)) ) Yes (45) Integrys Energy ([TEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TEG&selected=TEG)) ) YesYes (51) Johnson & Johnson ([JNJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JNJ&selected=JNJ)) ) YesYes (47) Kimberly-Clark ([KMB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KMB&selected=KMB)) ) YesYes (37) Lancaster Colony ([LANC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LANC&selected=LANC)) ) Yes (47) Leggett & Platt ([LEG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LEG&selected=LEG)) ) YesYes (38) Lowe's ([LOW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LOW&selected=LOW)) ) YesYes (47) McDonald's ([MCD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MCD&selected=MCD)) ) YesYes (33) McGraw-Hill ([MHP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MHP&selected=MHP)) ) YesYes (37) Medtronic ([MDT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MDT&selected=MDT)) ) Yes (32) MGE Energy ([MGEE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MGEE&selected=MGEE)) ) Yes (34) Middlesex Water ([MSEX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSEX&selected=MSEX)) ) Yes (37) Mine Safety Appliances ([MSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MSA&selected=MSA)) ) Yes (37) National Fuel Gas ([NFG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NFG&selected=NFG)) ) Yes (39) Nordson ([NDSN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NDSN&selected=NDSN)) ) Yes (46) Northwest Natural Gas ([NWN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NWN&selected=NWN)) ) Yes (54) Nucor ([NUE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUE&selected=NUE)) ) Yes (37) Old Republic International ([ORI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ORI&selected=ORI)) ) Yes (27) Parker-Hannifin ([PH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PH&selected=PH)) ) Yes (52) Pentair ([PNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNR&selected=PNR)) ) Yes (34) Pepsico ([PEP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEP&selected=PEP)) ) YesYes (37) Piedmont Natural Gas ([PNY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PNY&selected=PNY)) ) Yes (31) Pitney Bowes ([PBI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PBI&selected=PBI)) ) YesYes (27) PPG Industries ([PPG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PPG&selected=PPG)) ) YesYes 38) Procter & Gamble ([PG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PG&selected=PG)) ) YesYes (53) Questar ([STR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STR&selected=STR)) ) YesYes (30) RLI ([RLI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RLI&selected=RLI)) ) Yes (35) RPM International ([RPM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RPM&selected=RPM)) ) Yes (36) Sherwin-Williams ([SHW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHW&selected=SHW)) ) YesYes (31) Sigma-Aldrich ([SIAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SIAL&selected=SIAL)) ) YesYes (33) SJW ([SJW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SJW&selected=SJW)) ) Yes (43) Sonoco Products ([SON](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SON&selected=SON)) ) Yes (26) Stanley Works ([SWK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWK&selected=SWK)) ) YesYes (42) Stepan ([SCL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SCL&selected=SCL)) ) Yes (42) SuperValu ([SVU](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU)) ) YesSysco ([SYY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SYY&selected=SYY)) ) Yes (40) Target ([TGT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TGT&selected=TGT)) ) YesYes (42) Teleflex ([TFX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TFX&selected=TFX)) ) Yes (31) Telephone & Data Systems ([TDS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TDS&selected=TDS)) ) Yes (34) Tennant ([TNC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TNC&selected=TNC)) ) Yes (38) Three M ([MMM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MMM&selected=MMM)) ) YesYes (51) Tootsie Roll ([TR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TR&selected=TR)) ) Yes (44) United Bancshares ([UBSI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UBSI&selected=UBSI)) ) Yes (36) Universal ([UVV](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=UVV&selected=UVV)) ) Yes (39) Valspar ([VAL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VAL&selected=VAL)) ) Yes (29) Vectren ([VVC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VVC&selected=VVC)) ) Yes (50) V. F. ([VFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VFC&selected=VFC)) ) YesYes (37) Walgreen ([WAG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WAG&selected=WAG)) ) YesYes (34) Wal-Mart ([WMT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WMT&selected=WMT)) ) YesYes (35) Washington REIT ([WRE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WRE&selected=WRE)) ) Yes (38) Wesco Financial ([WSC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WSC&selected=WSC)) ) Yes (38) Weyco ([WEYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WEYS&selected=WEYS)) ) Yes (28) WGL Holdings ([WGL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WGL&selected=WGL)) ) Yes (33) W. W. Grainger ([GWW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GWW&selected=GWW)) ) YesYes (38)**Author's Disclosure**: Long PG, EMR, MMM, JNJ, CB, ABT, PEP, CTL, MCD, T, SHWSee also [Productivity: Cyclical or Structural?](http://seekingalpha.com/article/191959-productivity-cyclical-or-structural?source=nasdaq) on seekingalpha.com | Comparing Dividend Aristocrats to Dividend Champions | News | SeekingAlpha | Unknown | 0.0009 | 51.2229 | 51.0599 | 49.4337 | 48.314 | 48.314 | 48.314 | 48.314 | 48.314 | 48.1767 | 48.1966 | 48.1995 | 49.4712 | 48.051 | 47.9677 | 47.156 | 47.1353 | 52.8368 | 53.2791 |
SA | Seabridge Gold Inc. | Basic Materials | Precious Metals | https://www.nasdaq.com/articles/gold-slightly-amid-renewed-concerns-over-greek-sovereign-debt-rating-2010-02-26 | 2010-02-26 08:15:00 | Markets | Gold is drifting slightly higher in early morning trading Friday, but ongoing concerns about the debt situation in Greece is giving the metal an upward momentum.On Thursday, credit rating agency Moody's said that Greece's sovereign debt rating could be lowered in coming months if it fails to meet its budget targets. At 0805 ET, gold is trading up 0.1 percent at $1,109.20 an ounce, while silver is up 0.3 percent at $1,616.00, and copper is up 0.5 percent at $320.95 a pound.Still, if the dollar gains significantly against the euro, it will likely keep a lid on a rise in the yellow metal, as a stronger greenback decreases the allure of alternative assets, including precious metals.Meanwhile, a senior executive at a Chinese government think tank said that China needs to keep buying gold in the long term, and any falls in price will be a good opportunity to step in to buy. Xia Bin, head of the financial institute of the Development Research Center, told reporters that "China has to keep buying gold, but the detailed timing should be decided by the price curve."On the corporate front, Seabridge Gold ([SA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SA&selected=SA)) ) is issuing a public offering of 2.5 million shares for $22.90 per share for a total of $57.3 million. There is an option to purchase up to 375,000 additional shares at the offering price within 30 days to cover over-allotments. Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited. | Gold Up Slightly Amid Renewed Concerns Over Greek Sovereign Debt Rating | News | MTNewswires | Unknown | 0.0009 | 23.5799 | 22.0929 | 22.1066 | 23.1975 | 23.0299 | 22.9064 | 23.0137 | 24.1387 | 24.1789 | 24.1864 | 24.2435 | 24.2435 | 24.2385 | 24.2075 | 24.2047 | 23.892 | 21.75 | 24.2137 |
JBSS | Sanfilippo (John B.) & Son, Inc | Consumer Staples | Specialty Foods | https://www.nasdaq.com/articles/high-conviction-footware-company-runs-generation-y-2010-03-01 | 2010-03-01 12:59:00 | LRN|Markets|BOOT|DECK|SAM|CROX|IOO|NUS | ** [Jamie Moye](http://www.beaconassetmanagers.com/) submits:**Logie Cassells (at right, top) and Jamie Moye (at right, below) are the principals of [Beacon Asset Managers](http://www.beaconassetmanagers.com/) based in Chester, Nova Scotia. The company is a subsidiary of Beacon Securities Ltd., and offers independent investment services to financial institutions.The company's "3 Beacon" research approach focuses on three disciplines - demographics, valuation and sentiment - to discover undervalued equities, the performance of which are tracked in its model Beacon Master Portfolio. Cassells and Moye report that the model portfolio is showing a return of more than 75 percent since its December 2008 inception, representing more than 50 percentage point outperformance of the S&P Global Index ETF ([IOO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IOO&selected=IOO)) ), which is up about 18 percent for the same time frame. We recently had the opportuntity to ask Cassels and Moye about their current outlook on the market, their investment approach, and their single highest conviction holding at this time. **Did the market recovery of 2009 surprise you?**What a difference a year makes. At this time last year the vast majority of Wall Street pundits had adopted en masse the "nattering nabob of negativity" persona to warn us of the impending financial Armageddon. In hindsight this should have been expected. As noted by French philosopher Arthur C. Pigou: "The error of optimism dies in a crisis, but in dying it gives birth to the error of pessimism. This new error is born, not an infant, but a giant."To the surprise of many, but not all, the market recovery has been very similar to the eight previous recoveries since 1926. Near the lows the financial experts proclaim that the world is ending, the general public takes fright and sells everything, and floods into "low-risk" cash or bonds that return practically nothing, and promise never to return to equities again. This time investors can hardly be blamed for their behavior, as they were expecting early retirement but instead received the worst decade of returns since the 1930s. However, at or near the final lows investors always forget what ultimately lies at the very bottom of Pandora's Box. And that is, hope. **Has the market recovery been different this time?**The market recovery since last March has been "textbook" in that the market has continued to climb a wall of worry. Having spent nearly two years slipping down the slope of hope, small caps outperformed large caps, stocks priced to extinction at the lows roared back to life, equities outperformed bonds and those sectors geared to the recovery led the way back up the hill of worry.We believe that last March marked the start of a once-in-a-generation opportunity to invest in equities, and that this opportunity (with the odd speed bump along the way) is similar to those golden periods of equity returns experienced from 1939 to 1967 and 1974 to 2000. **What are your expectations for markets through the rest of 2010?**We expect the trend for stock prices in 2010 in general to be up; however, at times it could be bumpy (as the Ned Davis Research 2010 composite maps out). We continue to favor those sectors that are geared to the economic recovery, and the ever-growing consumer demand of Generation Y.In managing exceptions in terms of what type of returns to expect in 2010, we turned to O'Shaughnessy Asset Management's (([OSAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OSAM&selected=OSAM)) )) research in their January 2010 note. It found that the average return in the first year of a recovery following a severe bear market is 46 to 61 percent; the second year, 14 to 15 percent; and the third, 1 to 3 percent. Therefore, it would be prudent to lower our expectations for the year and expect the market to return about 14 percent, which would give the S&P 500 a target of about 1300.This sharp pullback from mid January has corrected many of our concerns about extreme optimism, and we now expect markets to recover their footing. In many ways investors, including us, sometimes get caught up with trying to fine tune the market over the short term to such an extent we forget the forest for the trees. What we should be doing is spending less time watching what the market averages are doing, and more time focusing on the discovery of undervalued potential "Super Stocks" that will be supported by generational demand and that sell for 75 cents or less on the dollar, or a price to sales ratio of 0.75 or better. **And you determine "generational demand" through demographics?**Yes. Demographics is one of the three key investment tools we use to discover undervalued assets - and to avoid over-believed and over-priced assets. Demographics gives us a longterm, or decennial, global picture of emerging and declining consumer demand. On the macro level we believe today's weight of evidence supports a "generational opportunity" in equities over the next 20 years similar to ones that emerged in 1939 and 1974 as shown on this chart. [](http://static.seekingalpha.com/uploads/2010/2/28/saupload_longtermcycles.jpg) The G.I. Generation - born 1905-1924 and more than 50 million strong - spurred the 1939 generational opportunity, while the much larger Baby Boomer generation - born 1945-1964 and more than 75 million strong - spurred the opportunity that emerged in 1974.By examining those previous opportunities we can manage our expectations during the first eight years of this current opportunity. In those two previous ones, investors had eight years to patiently accumulate the next generational winners before entering secular bull markets that lasted nearly 20 years and saw more than 10-fold returns from 1947 to 1967, and more than 20-fold returns from 1982 to 2000. **So you believe the current generational opportunity will be driven by Generation Y?**Yes. Generation Y is bigger than the Baby Boomers, and we believe they will prove to be economically more influential, too. But we also feel that the Baby Boomers, unlike predecessor generations that rapidly aged out of the consumer market, will continue to be a significant consumers, as early indications seem to indicate that Boomers may redefine what it means to be "old."**Can you describe your other two investment tools?**Valuation and sentiment. For valuation we rely on the uncommonly used metric of price to sales ratio. This is less available for manipulation and quickly shows investors what the market is willing to pay for a dollar of a company's sales. The key advantage of using sales rather than earnings is that earnings can widely fluctuate or be manipulated. The other advantage of using the P/S ratio is that it reminds you of the risk you are taking for the perceived return. If you are paying $7 for every $1 of sales of the latest hot stock or theme, it reminds you to consider why you are paying so much, and to better consider what the likely returns may be over the next 3 to 5 years. Sentiment allows us to gauge how over- or under-believed the market or a theme is. The simplest way to explain this is to borrow a quote from Warren Buffett: "Be fearful when others are greedy and greedy when others are fearful."**So, these three tools help you find the "Super Stocks" highlighted in your reports?**Yes, we look for out-of-favor, under-believed stocks that are poised to benefit from generational demand and have P/S ratios below 0.75. For an historic example of how this works let's look back at Nike in 1984. At that time investors who saw its value on a P/S of 0.3 and its potential to tap into the emerging generational demand of the latter half of the Baby Boom and first half of Gen. X, made off like bandits.The shares between 1984 to 2000 rose from 48 cents to $36 (up 75 times), and its P/ S, or popularity barometer, rose from 0.3 to over 2.5 times. In common sense terms, new investors were prepared to pay $2.50 for every $1.00 of its sales because it was now a success. To be fair, since the year 2000 Nike has outperformed the S&P 500 (Nike up 140 percent versus a decline for the S&P 500 of 23 percent). However, investors in 2000 looking for further "Super Stock" returns from Nike should have been wise to the fact that a P/S of 2.5 would likely limit the chances of "super" returns.In 2000, prescient investors using our approach would have sold Nike and rolled their profits into the next shoe wonder stock: Deckers Outdoor ([DECK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DECK&selected=DECK)) ) on a P/S of around 0.4. The shares rose 3,669 percent and were one of the top-10 performers of the last decade. No shoe review would be complete without reference to Crocs' ([CROX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CROX&selected=CROX)) ) Icarus-like flight to the sun and subsequent meltdown back to earth. The company came to the market in 2006 on a P/S of 1.4 (using 2007 sales) and quickly found investor favor taking the shares to a P/S of over 7.0 by late 2007. The shares rose over 5 times during this time and then collapsed nearly 90 percent to leave the shares unloved and on an undemanding P/S of 0.1. Not surprisingly the shares have recovered strongly (nearly eight times) from these capitulation lows, and currently sell on a P/S of 0.9. **OK, so what is your highest conviction stock position in your current model portfolio?**It's hard to pick just one, but if pushed I guess we're going to have to stick with shoes, and in particular, **LaCrosse Footwear ([BOOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOOT&selected=BOOT)) )** .Most investors have probably never heard of LaCrosse, other than as a sport. But we believe the attractive growth story of the company's exciting footwear business, strong management, record cash in the bank, emerging generational demand for its products, and 3+ percent dividend.LaCrosse seems very well placed over the next decade to see demand for its work and outdoor boots and shoes grow at a healthy rate as Gen. Y enters the workforce and leisure market. The company's recent acquisition of Environmentally Neutral Design (([END](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=END&selected=END)) )) will have a marginal impact on LaCrosses's revenue stream in the near term; however, by the end of the decade END has the potential of being larger than its new parent. END is a Portland-based outdoor athletic shoe manufacturer that focuses on sustainable footwear. The company was launched in 2007 by Ben Finlea and award winning footwear designer Andrew Estey, the former global design director for sport culture at Nike.The company released its first products in August 2007 exclusively on the web (REI, Zappos, Rock Creek and Backcountry.com). This was quickly followed by a retail launch in early 2009, and its products are now available in 100 stores across the U.S., Canada and Japan. END's light weight Stumptown shoe won best trail shoe debut by Runner's World magazine in March 2009.Major footwear companies have done an amazing marketing job over the last 15 to 20 years, convincing us that we need more high-tech design along with higher prices in our athletic shoes. However, END's 12oz trail trainer (Stumptown) when ranked against the top five competing shoes represents a 35 to 59 percent reduction in complex shoe parts, and its next 10oz model will reduce glues and cements by 75 percent. The company's ultimate goal is an 8oz trail trainer, whose light weight should also make the aging Baby Boomers happy.A further plus in END's strategy to change the footwear, as well as the "sustainability" industry, is on the issue of price. Today in the U.S. "sustainability" and its first cousin, "organic," are expensive. It seems that for the majority of us in North America if we want to buy wind powered energy at home, organic produce at the market, or a bamboo shirt then we'd better be prepared to pay anywhere from 20-70 percent more for that product versus a comparable "non-green" everyday option. We agree with END's management that this is not a very sustainable way of doing business. If END's strategy is successful in demonstrating to people that they can actually get a better shoe that is actually a few dollars less and is good for the environment it could represent the start of a paradigm shift, or tipping point, in organic premium pricing. No shoe in END's lineup is over $100-its 12oz will retail for $80, the 10oz for $70, and the 8.5oz for $60. These prices still deliver great margins to the retailer, and very good ones to END, and ultimately LaCrosse.We believe END could transform the athletic footwear market with its products and that eco-aware Gen. Y will love them. We look forward to following this exciting story, and should also note that investors are buying this company's potential at 68 cents on the Dollar (P/S 0.68). **What other emerging generational opportunity equities are you looking at?**There are plenty of them out there. Among those that have caught our attention are **Collective Brands ([PSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSS&selected=PSS)) )** , **Pacific Sunwear of California ([PSUN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSUN&selected=PSUN)) ), Boston Beer Co. ([SAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAM&selected=SAM)) )** , and **K12 ([LRN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LRN&selected=LRN)) )** for Generation Y; and **NuSkin Enterprises ([NUS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUS&selected=NUS)) )** and John **B. Sanfilippo & Son ([JBSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JBSS&selected=JBSS)) )** as aging Boomer plays. **John B. Sanfilippo & Son - nuts?**Yeah, nuts. The most recent health food story. Boomers are going to eat them up. **Thanks so much for describing your process, thesis and investment ideas, Logie and Jamie. **Our pleasure. Happy to contribute. **Disclosure:** Beacon Asset Managers is long BOOT, PSS, PSUN, SAM, LRN, NUS and JBSS.See also [Gilead Science: Dominance in the HIV Market](http://seekingalpha.com/article/191170-gilead-science-dominance-in-the-hiv-market?source=nasdaq) on seekingalpha.com | High Conviction: A Footware Company That Runs With Generation Y | News | SeekingAlpha | Unknown | 0.0009 | 15.7169 | 15.8384 | 15.7921 | 15.927 | 15.905 | 15.8971 | 15.8983 | 15.9453 | 15.8879 | 15.8879 | 15.8879 | 15.8374 | 15.8561 | 15.8345 | 15.9643 | 16.2006 | 16.4205 | 14.9977 |
JBSS | Sanfilippo (John B.) & Son, Inc | Consumer Staples | Specialty Foods | https://www.nasdaq.com/articles/high-conviction-footwear-company-runs-generation-y-2010-03-01 | 2010-03-01 12:59:00 | LRN|Markets|BOOT|DECK|SAM|CROX|IOO|NUS | ** [Jamie Moye](http://www.beaconassetmanagers.com/) submits:**Logie Cassells (at right, top) and Jamie Moye (at right, below) are the principals of [Beacon Asset Managers](http://www.beaconassetmanagers.com/) based in Chester, Nova Scotia. The company is a subsidiary of Beacon Securities Ltd., and offers independent investment services to financial institutions.The company's "3 Beacon" research approach focuses on three disciplines - demographics, valuation and sentiment - to discover undervalued equities, the performance of which are tracked in its model Beacon Master Portfolio. Cassells and Moye report that the model portfolio is showing a return of more than 75 percent since its December 2008 inception, representing more than 50 percentage point outperformance of the S&P Global Index ETF ([IOO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IOO&selected=IOO)) ), which is up about 18 percent for the same time frame. We recently had the opportuntity to ask Cassels and Moye about their current outlook on the market, their investment approach, and their single highest conviction holding at this time. **Did the market recovery of 2009 surprise you?**What a difference a year makes. At this time last year the vast majority of Wall Street pundits had adopted en masse the "nattering nabob of negativity" persona to warn us of the impending financial Armageddon. In hindsight this should have been expected. As noted by French philosopher Arthur C. Pigou: "The error of optimism dies in a crisis, but in dying it gives birth to the error of pessimism. This new error is born, not an infant, but a giant."To the surprise of many, but not all, the market recovery has been very similar to the eight previous recoveries since 1926. Near the lows the financial experts proclaim that the world is ending, the general public takes fright and sells everything, and floods into "low-risk" cash or bonds that return practically nothing, and promise never to return to equities again. This time investors can hardly be blamed for their behavior, as they were expecting early retirement but instead received the worst decade of returns since the 1930s. However, at or near the final lows investors always forget what ultimately lies at the very bottom of Pandora's Box. And that is, hope. **Has the market recovery been different this time?**The market recovery since last March has been "textbook" in that the market has continued to climb a wall of worry. Having spent nearly two years slipping down the slope of hope, small caps outperformed large caps, stocks priced to extinction at the lows roared back to life, equities outperformed bonds and those sectors geared to the recovery led the way back up the hill of worry.We believe that last March marked the start of a once-in-a-generation opportunity to invest in equities, and that this opportunity (with the odd speed bump along the way) is similar to those golden periods of equity returns experienced from 1939 to 1967 and 1974 to 2000. **What are your expectations for markets through the rest of 2010?**We expect the trend for stock prices in 2010 in general to be up; however, at times it could be bumpy (as the Ned Davis Research 2010 composite maps out). We continue to favor those sectors that are geared to the economic recovery, and the ever-growing consumer demand of Generation Y.In managing exceptions in terms of what type of returns to expect in 2010, we turned to O'Shaughnessy Asset Management's (([OSAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OSAM&selected=OSAM)) )) research in their January 2010 note. It found that the average return in the first year of a recovery following a severe bear market is 46 to 61 percent; the second year, 14 to 15 percent; and the third, 1 to 3 percent. Therefore, it would be prudent to lower our expectations for the year and expect the market to return about 14 percent, which would give the S&P 500 a target of about 1300.This sharp pullback from mid January has corrected many of our concerns about extreme optimism, and we now expect markets to recover their footing. In many ways investors, including us, sometimes get caught up with trying to fine tune the market over the short term to such an extent we forget the forest for the trees. What we should be doing is spending less time watching what the market averages are doing, and more time focusing on the discovery of undervalued potential "Super Stocks" that will be supported by generational demand and that sell for 75 cents or less on the dollar, or a price to sales ratio of 0.75 or less. **And you determine "generational demand" through demographics?**Yes. Demographics is one of the three key investment tools we use to discover undervalued assets - and to avoid over-believed and over-priced assets. Demographics gives us a longterm, or decennial, global picture of emerging and declining consumer demand. On the macro level we believe today's weight of evidence supports a "generational opportunity" in equities over the next 20 years similar to ones that emerged in 1939 and 1974 as shown on this chart. [](http://static.seekingalpha.com/uploads/2010/2/28/saupload_longtermcycles.jpg) The G.I. Generation - born 1905-1924 and more than 50 million strong - spurred the 1939 generational opportunity, while the much larger Baby Boomer generation - born 1945-1964 and more than 75 million strong - spurred the opportunity that emerged in 1974.By examining those previous opportunities we can manage our expectations during the first eight years of this current opportunity. In those two previous ones, investors had eight years to patiently accumulate the next generational winners before entering secular bull markets that lasted nearly 20 years and saw more than 10-fold returns from 1947 to 1967, and more than 20-fold returns from 1982 to 2000. **So you believe the current generational opportunity will be driven by Generation Y?**Yes. Generation Y is bigger than the Baby Boomers, and we believe they will prove to be economically more influential, too. But we also feel that the Baby Boomers, unlike predecessor generations that rapidly aged out of the consumer market, will continue to be a significant consumers, as early indications seem to indicate that Boomers may redefine what it means to be "old."**Can you describe your other two investment tools?**Valuation and sentiment. For valuation we rely on the uncommonly used metric of price to sales ratio. This is less available for manipulation and quickly shows investors what the market is willing to pay for a dollar of a company's sales. The key advantage of using sales rather than earnings is that earnings can widely fluctuate or be manipulated. The other advantage of using the P/S ratio is that it reminds you of the risk you are taking for the perceived return. If you are paying $7 for every $1 of sales of the latest hot stock or theme, it reminds you to consider why you are paying so much, and to better consider what the likely returns may be over the next 3 to 5 years. Sentiment allows us to gauge how over- or under-believed the market or a theme is. The simplest way to explain this is to borrow a quote from Warren Buffett: "Be fearful when others are greedy and greedy when others are fearful."**So, these three tools help you find the "Super Stocks" highlighted in your reports?**Yes, we look for out-of-favor, under-believed stocks that are poised to benefit from generational demand and have P/S ratios below 0.75. For an historic example of how this works let's look back at Nike in 1984. At that time investors who saw its value on a P/S of 0.3 and its potential to tap into the emerging generational demand of the latter half of the Baby Boom and first half of Gen. X, made off like bandits.The shares between 1984 to 2000 rose from 48 cents to $36 (up 75 times), and its P/ S, or popularity barometer, rose from 0.3 to over 2.5 times. In common sense terms, new investors were prepared to pay $2.50 for every $1.00 of its sales because it was now a success. To be fair, since the year 2000 Nike has outperformed the S&P 500 (Nike up 140 percent versus a decline for the S&P 500 of 23 percent). However, investors in 2000 looking for further "Super Stock" returns from Nike should have been wise to the fact that a P/S of 2.5 would likely limit the chances of "super" returns.In 2000, prescient investors using our approach would have sold Nike and rolled their profits into the next shoe wonder stock: Deckers Outdoor ([DECK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DECK&selected=DECK)) ) on a P/S of around 0.4. The shares rose 3,669 percent and were one of the top-10 performers of the last decade. No shoe review would be complete without reference to Crocs' ([CROX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CROX&selected=CROX)) ) Icarus-like flight to the sun and subsequent meltdown back to earth. The company came to the market in 2006 on a P/S of 1.4 (using 2007 sales) and quickly found investor favor taking the shares to a P/S of over 7.0 by late 2007. The shares rose over 5 times during this time and then collapsed nearly 90 percent to leave the shares unloved and on an undemanding P/S of 0.1. Not surprisingly the shares have recovered strongly (nearly eight times) from these capitulation lows, and currently sell on a P/S of 0.9. **OK, so what is your highest conviction stock position in your current model portfolio?**It's hard to pick just one, but if pushed I guess we're going to have to stick with shoes, and in particular, **LaCrosse Footwear ([BOOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOOT&selected=BOOT)) )** .Most investors have probably never heard of LaCrosse, other than as a sport. But we believe in the attractive growth story of the company's exciting footwear business, strong management, record cash in the bank, emerging generational demand for its products, and 3+ percent dividend.LaCrosse seems very well placed over the next decade to see demand for its work and outdoor boots and shoes grow at a healthy rate as Gen. Y enters the workforce and leisure market. The company's recent acquisition of Environmentally Neutral Design (([END](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=END&selected=END)) )) will have a marginal impact on LaCrosse's revenue stream in the near term; however, by the end of the decade END has the potential of being larger than its new parent. END is a Portland-based outdoor athletic shoe manufacturer that focuses on sustainable footwear. The company was launched in 2007 by Ben Finlea and award winning footwear designer Andrew Estey, the former global design director for sport culture at Nike.The company released its first products in August 2007 exclusively on the web (REI, Zappos, Rock Creek and Backcountry.com). This was quickly followed by a retail launch in early 2009, and its products are now available in 100 stores across the U.S., Canada and Japan. END's light weight Stumptown shoe won best trail shoe debut by Runner's World magazine in March 2009.Major footwear companies have done an amazing marketing job over the last 15 to 20 years, convincing us that we need more high-tech design along with higher prices in our athletic shoes. However, END's 12oz trail trainer (Stumptown) when ranked against the top five competing shoes represents a 35 to 59 percent reduction in complex shoe parts, and its next 10oz model will reduce glues and cements by 75 percent. The company's ultimate goal is an 8oz trail trainer, whose light weight should also make the aging Baby Boomers happy.A further plus in END's strategy to change the footwear, as well as the "sustainability," industry is on the issue of price. Today in the U.S. "sustainability" and its first cousin, "organic," are expensive. It seems that for the majority of us in North America if we want to buy wind powered energy at home, organic produce at the market, or a bamboo shirt then we'd better be prepared to pay anywhere from 20-70 percent more for that product versus a comparable "non-green" everyday option. We agree with END's management that this is not a very sustainable way of doing business. If END's strategy is successful in demonstrating to people that they can actually get a better shoe that is actually a few dollars less and is good for the environment it could represent the start of a paradigm shift, or tipping point, in organic premium pricing. No shoe in END's lineup is over $100-its 12oz will retail for $80, the 10oz for $70, and the 8.5oz for $60. These prices still deliver great margins to the retailer, and very good ones to END, and ultimately LaCrosse.We believe END could transform the athletic footwear market with its products and that eco-aware Gen. Y will love them. We look forward to following this exciting story, and should also note that investors are buying this company's potential at 68 cents on the Dollar (P/S 0.68). **What other emerging generational opportunity equities are you finding?**There are plenty of them out there. Among those that have caught our attention are **Collective Brands ([PSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSS&selected=PSS)) )** , **Pacific Sunwear of California ([PSUN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSUN&selected=PSUN)) ), Boston Beer Co. ([SAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAM&selected=SAM)) )** , and **K12 ([LRN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LRN&selected=LRN)) )** for Generation Y; and **NuSkin Enterprises ([NUS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUS&selected=NUS)) )** and John **B. Sanfilippo & Son ([JBSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JBSS&selected=JBSS)) )** as aging Boomer plays. **John B. Sanfilippo & Son - nuts?**Yeah, nuts. The most recent health food story. Boomers are going to eat them up. **Thanks so much for describing your process, thesis and investment ideas, Logie and Jamie. **Our pleasure. Happy to contribute. **Addendum from Jamie Moye, 3/2/10:** Readers have informed us that LaCrosse plans to discontinue the END line of footwear as a stand-alone brand and leverage the END platform of innovative and lightweight designs under its LaCrosse and Danner lines and distribution channels in the Fall of 2010. This does not change our opinion of the company as expressed in the above interview, and we trust that LaCrosse will maintain END's eco-friendly design, sustainable production methods, and competitive pricing when the line is offered as part of the LaCrosse and Danner lines of footwear. **Disclosure:** Beacon Asset Managers is long BOOT, PSS, PSUN, SAM, LRN, NUS and JBSS. ** [Read more High Conviction Picks »](http://seekingalpha.com/tag/high-conviction)**If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please [email Rebecca Barnett](mailto:[email protected]) .See also [Predictions From the Retail Front](http://seekingalpha.com/article/191525-predictions-from-the-retail-front?source=nasdaq) on seekingalpha.com | High Conviction: A Footwear Company That Runs With Generation Y | News | SeekingAlpha | Unknown | 0.0009 | 15.7169 | 15.8384 | 15.7921 | 15.927 | 15.905 | 15.8971 | 15.8983 | 15.9453 | 15.8879 | 15.8879 | 15.8879 | 15.8374 | 15.8561 | 15.8345 | 15.9643 | 16.2006 | 16.4205 | 14.9977 |
NUS | Nu Skin Enterprises, Inc. | Health Care | Other Pharmaceuticals | https://www.nasdaq.com/articles/high-conviction-footware-company-runs-generation-y-2010-03-01 | 2010-03-01 12:59:00 | LRN|Markets|JBSS|BOOT|DECK|SAM|CROX|IOO | ** [Jamie Moye](http://www.beaconassetmanagers.com/) submits:**Logie Cassells (at right, top) and Jamie Moye (at right, below) are the principals of [Beacon Asset Managers](http://www.beaconassetmanagers.com/) based in Chester, Nova Scotia. The company is a subsidiary of Beacon Securities Ltd., and offers independent investment services to financial institutions.The company's "3 Beacon" research approach focuses on three disciplines - demographics, valuation and sentiment - to discover undervalued equities, the performance of which are tracked in its model Beacon Master Portfolio. Cassells and Moye report that the model portfolio is showing a return of more than 75 percent since its December 2008 inception, representing more than 50 percentage point outperformance of the S&P Global Index ETF ([IOO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IOO&selected=IOO)) ), which is up about 18 percent for the same time frame. We recently had the opportuntity to ask Cassels and Moye about their current outlook on the market, their investment approach, and their single highest conviction holding at this time. **Did the market recovery of 2009 surprise you?**What a difference a year makes. At this time last year the vast majority of Wall Street pundits had adopted en masse the "nattering nabob of negativity" persona to warn us of the impending financial Armageddon. In hindsight this should have been expected. As noted by French philosopher Arthur C. Pigou: "The error of optimism dies in a crisis, but in dying it gives birth to the error of pessimism. This new error is born, not an infant, but a giant."To the surprise of many, but not all, the market recovery has been very similar to the eight previous recoveries since 1926. Near the lows the financial experts proclaim that the world is ending, the general public takes fright and sells everything, and floods into "low-risk" cash or bonds that return practically nothing, and promise never to return to equities again. This time investors can hardly be blamed for their behavior, as they were expecting early retirement but instead received the worst decade of returns since the 1930s. However, at or near the final lows investors always forget what ultimately lies at the very bottom of Pandora's Box. And that is, hope. **Has the market recovery been different this time?**The market recovery since last March has been "textbook" in that the market has continued to climb a wall of worry. Having spent nearly two years slipping down the slope of hope, small caps outperformed large caps, stocks priced to extinction at the lows roared back to life, equities outperformed bonds and those sectors geared to the recovery led the way back up the hill of worry.We believe that last March marked the start of a once-in-a-generation opportunity to invest in equities, and that this opportunity (with the odd speed bump along the way) is similar to those golden periods of equity returns experienced from 1939 to 1967 and 1974 to 2000. **What are your expectations for markets through the rest of 2010?**We expect the trend for stock prices in 2010 in general to be up; however, at times it could be bumpy (as the Ned Davis Research 2010 composite maps out). We continue to favor those sectors that are geared to the economic recovery, and the ever-growing consumer demand of Generation Y.In managing exceptions in terms of what type of returns to expect in 2010, we turned to O'Shaughnessy Asset Management's (([OSAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OSAM&selected=OSAM)) )) research in their January 2010 note. It found that the average return in the first year of a recovery following a severe bear market is 46 to 61 percent; the second year, 14 to 15 percent; and the third, 1 to 3 percent. Therefore, it would be prudent to lower our expectations for the year and expect the market to return about 14 percent, which would give the S&P 500 a target of about 1300.This sharp pullback from mid January has corrected many of our concerns about extreme optimism, and we now expect markets to recover their footing. In many ways investors, including us, sometimes get caught up with trying to fine tune the market over the short term to such an extent we forget the forest for the trees. What we should be doing is spending less time watching what the market averages are doing, and more time focusing on the discovery of undervalued potential "Super Stocks" that will be supported by generational demand and that sell for 75 cents or less on the dollar, or a price to sales ratio of 0.75 or better. **And you determine "generational demand" through demographics?**Yes. Demographics is one of the three key investment tools we use to discover undervalued assets - and to avoid over-believed and over-priced assets. Demographics gives us a longterm, or decennial, global picture of emerging and declining consumer demand. On the macro level we believe today's weight of evidence supports a "generational opportunity" in equities over the next 20 years similar to ones that emerged in 1939 and 1974 as shown on this chart. [](http://static.seekingalpha.com/uploads/2010/2/28/saupload_longtermcycles.jpg) The G.I. Generation - born 1905-1924 and more than 50 million strong - spurred the 1939 generational opportunity, while the much larger Baby Boomer generation - born 1945-1964 and more than 75 million strong - spurred the opportunity that emerged in 1974.By examining those previous opportunities we can manage our expectations during the first eight years of this current opportunity. In those two previous ones, investors had eight years to patiently accumulate the next generational winners before entering secular bull markets that lasted nearly 20 years and saw more than 10-fold returns from 1947 to 1967, and more than 20-fold returns from 1982 to 2000. **So you believe the current generational opportunity will be driven by Generation Y?**Yes. Generation Y is bigger than the Baby Boomers, and we believe they will prove to be economically more influential, too. But we also feel that the Baby Boomers, unlike predecessor generations that rapidly aged out of the consumer market, will continue to be a significant consumers, as early indications seem to indicate that Boomers may redefine what it means to be "old."**Can you describe your other two investment tools?**Valuation and sentiment. For valuation we rely on the uncommonly used metric of price to sales ratio. This is less available for manipulation and quickly shows investors what the market is willing to pay for a dollar of a company's sales. The key advantage of using sales rather than earnings is that earnings can widely fluctuate or be manipulated. The other advantage of using the P/S ratio is that it reminds you of the risk you are taking for the perceived return. If you are paying $7 for every $1 of sales of the latest hot stock or theme, it reminds you to consider why you are paying so much, and to better consider what the likely returns may be over the next 3 to 5 years. Sentiment allows us to gauge how over- or under-believed the market or a theme is. The simplest way to explain this is to borrow a quote from Warren Buffett: "Be fearful when others are greedy and greedy when others are fearful."**So, these three tools help you find the "Super Stocks" highlighted in your reports?**Yes, we look for out-of-favor, under-believed stocks that are poised to benefit from generational demand and have P/S ratios below 0.75. For an historic example of how this works let's look back at Nike in 1984. At that time investors who saw its value on a P/S of 0.3 and its potential to tap into the emerging generational demand of the latter half of the Baby Boom and first half of Gen. X, made off like bandits.The shares between 1984 to 2000 rose from 48 cents to $36 (up 75 times), and its P/ S, or popularity barometer, rose from 0.3 to over 2.5 times. In common sense terms, new investors were prepared to pay $2.50 for every $1.00 of its sales because it was now a success. To be fair, since the year 2000 Nike has outperformed the S&P 500 (Nike up 140 percent versus a decline for the S&P 500 of 23 percent). However, investors in 2000 looking for further "Super Stock" returns from Nike should have been wise to the fact that a P/S of 2.5 would likely limit the chances of "super" returns.In 2000, prescient investors using our approach would have sold Nike and rolled their profits into the next shoe wonder stock: Deckers Outdoor ([DECK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DECK&selected=DECK)) ) on a P/S of around 0.4. The shares rose 3,669 percent and were one of the top-10 performers of the last decade. No shoe review would be complete without reference to Crocs' ([CROX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CROX&selected=CROX)) ) Icarus-like flight to the sun and subsequent meltdown back to earth. The company came to the market in 2006 on a P/S of 1.4 (using 2007 sales) and quickly found investor favor taking the shares to a P/S of over 7.0 by late 2007. The shares rose over 5 times during this time and then collapsed nearly 90 percent to leave the shares unloved and on an undemanding P/S of 0.1. Not surprisingly the shares have recovered strongly (nearly eight times) from these capitulation lows, and currently sell on a P/S of 0.9. **OK, so what is your highest conviction stock position in your current model portfolio?**It's hard to pick just one, but if pushed I guess we're going to have to stick with shoes, and in particular, **LaCrosse Footwear ([BOOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOOT&selected=BOOT)) )** .Most investors have probably never heard of LaCrosse, other than as a sport. But we believe the attractive growth story of the company's exciting footwear business, strong management, record cash in the bank, emerging generational demand for its products, and 3+ percent dividend.LaCrosse seems very well placed over the next decade to see demand for its work and outdoor boots and shoes grow at a healthy rate as Gen. Y enters the workforce and leisure market. The company's recent acquisition of Environmentally Neutral Design (([END](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=END&selected=END)) )) will have a marginal impact on LaCrosses's revenue stream in the near term; however, by the end of the decade END has the potential of being larger than its new parent. END is a Portland-based outdoor athletic shoe manufacturer that focuses on sustainable footwear. The company was launched in 2007 by Ben Finlea and award winning footwear designer Andrew Estey, the former global design director for sport culture at Nike.The company released its first products in August 2007 exclusively on the web (REI, Zappos, Rock Creek and Backcountry.com). This was quickly followed by a retail launch in early 2009, and its products are now available in 100 stores across the U.S., Canada and Japan. END's light weight Stumptown shoe won best trail shoe debut by Runner's World magazine in March 2009.Major footwear companies have done an amazing marketing job over the last 15 to 20 years, convincing us that we need more high-tech design along with higher prices in our athletic shoes. However, END's 12oz trail trainer (Stumptown) when ranked against the top five competing shoes represents a 35 to 59 percent reduction in complex shoe parts, and its next 10oz model will reduce glues and cements by 75 percent. The company's ultimate goal is an 8oz trail trainer, whose light weight should also make the aging Baby Boomers happy.A further plus in END's strategy to change the footwear, as well as the "sustainability" industry, is on the issue of price. Today in the U.S. "sustainability" and its first cousin, "organic," are expensive. It seems that for the majority of us in North America if we want to buy wind powered energy at home, organic produce at the market, or a bamboo shirt then we'd better be prepared to pay anywhere from 20-70 percent more for that product versus a comparable "non-green" everyday option. We agree with END's management that this is not a very sustainable way of doing business. If END's strategy is successful in demonstrating to people that they can actually get a better shoe that is actually a few dollars less and is good for the environment it could represent the start of a paradigm shift, or tipping point, in organic premium pricing. No shoe in END's lineup is over $100-its 12oz will retail for $80, the 10oz for $70, and the 8.5oz for $60. These prices still deliver great margins to the retailer, and very good ones to END, and ultimately LaCrosse.We believe END could transform the athletic footwear market with its products and that eco-aware Gen. Y will love them. We look forward to following this exciting story, and should also note that investors are buying this company's potential at 68 cents on the Dollar (P/S 0.68). **What other emerging generational opportunity equities are you looking at?**There are plenty of them out there. Among those that have caught our attention are **Collective Brands ([PSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSS&selected=PSS)) )** , **Pacific Sunwear of California ([PSUN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSUN&selected=PSUN)) ), Boston Beer Co. ([SAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAM&selected=SAM)) )** , and **K12 ([LRN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LRN&selected=LRN)) )** for Generation Y; and **NuSkin Enterprises ([NUS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUS&selected=NUS)) )** and John **B. Sanfilippo & Son ([JBSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JBSS&selected=JBSS)) )** as aging Boomer plays. **John B. Sanfilippo & Son - nuts?**Yeah, nuts. The most recent health food story. Boomers are going to eat them up. **Thanks so much for describing your process, thesis and investment ideas, Logie and Jamie. **Our pleasure. Happy to contribute. **Disclosure:** Beacon Asset Managers is long BOOT, PSS, PSUN, SAM, LRN, NUS and JBSS.See also [Gilead Science: Dominance in the HIV Market](http://seekingalpha.com/article/191170-gilead-science-dominance-in-the-hiv-market?source=nasdaq) on seekingalpha.com | High Conviction: A Footware Company That Runs With Generation Y | News | SeekingAlpha | Unknown | 0.0009 | 26.0641 | 26.7263 | 26.7878 | 27.7032 | 27.7155 | 27.7584 | 27.771 | 28.1657 | 28.1303 | 28.1303 | 28.1303 | 28.3108 | 28.3447 | 28.0162 | 28.1269 | 28.1669 | 28.6437 | 29.0965 |
NUS | Nu Skin Enterprises, Inc. | Health Care | Other Pharmaceuticals | https://www.nasdaq.com/articles/high-conviction-footwear-company-runs-generation-y-2010-03-01 | 2010-03-01 12:59:00 | LRN|Markets|JBSS|BOOT|DECK|SAM|CROX|IOO | ** [Jamie Moye](http://www.beaconassetmanagers.com/) submits:**Logie Cassells (at right, top) and Jamie Moye (at right, below) are the principals of [Beacon Asset Managers](http://www.beaconassetmanagers.com/) based in Chester, Nova Scotia. The company is a subsidiary of Beacon Securities Ltd., and offers independent investment services to financial institutions.The company's "3 Beacon" research approach focuses on three disciplines - demographics, valuation and sentiment - to discover undervalued equities, the performance of which are tracked in its model Beacon Master Portfolio. Cassells and Moye report that the model portfolio is showing a return of more than 75 percent since its December 2008 inception, representing more than 50 percentage point outperformance of the S&P Global Index ETF ([IOO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=IOO&selected=IOO)) ), which is up about 18 percent for the same time frame. We recently had the opportuntity to ask Cassels and Moye about their current outlook on the market, their investment approach, and their single highest conviction holding at this time. **Did the market recovery of 2009 surprise you?**What a difference a year makes. At this time last year the vast majority of Wall Street pundits had adopted en masse the "nattering nabob of negativity" persona to warn us of the impending financial Armageddon. In hindsight this should have been expected. As noted by French philosopher Arthur C. Pigou: "The error of optimism dies in a crisis, but in dying it gives birth to the error of pessimism. This new error is born, not an infant, but a giant."To the surprise of many, but not all, the market recovery has been very similar to the eight previous recoveries since 1926. Near the lows the financial experts proclaim that the world is ending, the general public takes fright and sells everything, and floods into "low-risk" cash or bonds that return practically nothing, and promise never to return to equities again. This time investors can hardly be blamed for their behavior, as they were expecting early retirement but instead received the worst decade of returns since the 1930s. However, at or near the final lows investors always forget what ultimately lies at the very bottom of Pandora's Box. And that is, hope. **Has the market recovery been different this time?**The market recovery since last March has been "textbook" in that the market has continued to climb a wall of worry. Having spent nearly two years slipping down the slope of hope, small caps outperformed large caps, stocks priced to extinction at the lows roared back to life, equities outperformed bonds and those sectors geared to the recovery led the way back up the hill of worry.We believe that last March marked the start of a once-in-a-generation opportunity to invest in equities, and that this opportunity (with the odd speed bump along the way) is similar to those golden periods of equity returns experienced from 1939 to 1967 and 1974 to 2000. **What are your expectations for markets through the rest of 2010?**We expect the trend for stock prices in 2010 in general to be up; however, at times it could be bumpy (as the Ned Davis Research 2010 composite maps out). We continue to favor those sectors that are geared to the economic recovery, and the ever-growing consumer demand of Generation Y.In managing exceptions in terms of what type of returns to expect in 2010, we turned to O'Shaughnessy Asset Management's (([OSAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=OSAM&selected=OSAM)) )) research in their January 2010 note. It found that the average return in the first year of a recovery following a severe bear market is 46 to 61 percent; the second year, 14 to 15 percent; and the third, 1 to 3 percent. Therefore, it would be prudent to lower our expectations for the year and expect the market to return about 14 percent, which would give the S&P 500 a target of about 1300.This sharp pullback from mid January has corrected many of our concerns about extreme optimism, and we now expect markets to recover their footing. In many ways investors, including us, sometimes get caught up with trying to fine tune the market over the short term to such an extent we forget the forest for the trees. What we should be doing is spending less time watching what the market averages are doing, and more time focusing on the discovery of undervalued potential "Super Stocks" that will be supported by generational demand and that sell for 75 cents or less on the dollar, or a price to sales ratio of 0.75 or less. **And you determine "generational demand" through demographics?**Yes. Demographics is one of the three key investment tools we use to discover undervalued assets - and to avoid over-believed and over-priced assets. Demographics gives us a longterm, or decennial, global picture of emerging and declining consumer demand. On the macro level we believe today's weight of evidence supports a "generational opportunity" in equities over the next 20 years similar to ones that emerged in 1939 and 1974 as shown on this chart. [](http://static.seekingalpha.com/uploads/2010/2/28/saupload_longtermcycles.jpg) The G.I. Generation - born 1905-1924 and more than 50 million strong - spurred the 1939 generational opportunity, while the much larger Baby Boomer generation - born 1945-1964 and more than 75 million strong - spurred the opportunity that emerged in 1974.By examining those previous opportunities we can manage our expectations during the first eight years of this current opportunity. In those two previous ones, investors had eight years to patiently accumulate the next generational winners before entering secular bull markets that lasted nearly 20 years and saw more than 10-fold returns from 1947 to 1967, and more than 20-fold returns from 1982 to 2000. **So you believe the current generational opportunity will be driven by Generation Y?**Yes. Generation Y is bigger than the Baby Boomers, and we believe they will prove to be economically more influential, too. But we also feel that the Baby Boomers, unlike predecessor generations that rapidly aged out of the consumer market, will continue to be a significant consumers, as early indications seem to indicate that Boomers may redefine what it means to be "old."**Can you describe your other two investment tools?**Valuation and sentiment. For valuation we rely on the uncommonly used metric of price to sales ratio. This is less available for manipulation and quickly shows investors what the market is willing to pay for a dollar of a company's sales. The key advantage of using sales rather than earnings is that earnings can widely fluctuate or be manipulated. The other advantage of using the P/S ratio is that it reminds you of the risk you are taking for the perceived return. If you are paying $7 for every $1 of sales of the latest hot stock or theme, it reminds you to consider why you are paying so much, and to better consider what the likely returns may be over the next 3 to 5 years. Sentiment allows us to gauge how over- or under-believed the market or a theme is. The simplest way to explain this is to borrow a quote from Warren Buffett: "Be fearful when others are greedy and greedy when others are fearful."**So, these three tools help you find the "Super Stocks" highlighted in your reports?**Yes, we look for out-of-favor, under-believed stocks that are poised to benefit from generational demand and have P/S ratios below 0.75. For an historic example of how this works let's look back at Nike in 1984. At that time investors who saw its value on a P/S of 0.3 and its potential to tap into the emerging generational demand of the latter half of the Baby Boom and first half of Gen. X, made off like bandits.The shares between 1984 to 2000 rose from 48 cents to $36 (up 75 times), and its P/ S, or popularity barometer, rose from 0.3 to over 2.5 times. In common sense terms, new investors were prepared to pay $2.50 for every $1.00 of its sales because it was now a success. To be fair, since the year 2000 Nike has outperformed the S&P 500 (Nike up 140 percent versus a decline for the S&P 500 of 23 percent). However, investors in 2000 looking for further "Super Stock" returns from Nike should have been wise to the fact that a P/S of 2.5 would likely limit the chances of "super" returns.In 2000, prescient investors using our approach would have sold Nike and rolled their profits into the next shoe wonder stock: Deckers Outdoor ([DECK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DECK&selected=DECK)) ) on a P/S of around 0.4. The shares rose 3,669 percent and were one of the top-10 performers of the last decade. No shoe review would be complete without reference to Crocs' ([CROX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CROX&selected=CROX)) ) Icarus-like flight to the sun and subsequent meltdown back to earth. The company came to the market in 2006 on a P/S of 1.4 (using 2007 sales) and quickly found investor favor taking the shares to a P/S of over 7.0 by late 2007. The shares rose over 5 times during this time and then collapsed nearly 90 percent to leave the shares unloved and on an undemanding P/S of 0.1. Not surprisingly the shares have recovered strongly (nearly eight times) from these capitulation lows, and currently sell on a P/S of 0.9. **OK, so what is your highest conviction stock position in your current model portfolio?**It's hard to pick just one, but if pushed I guess we're going to have to stick with shoes, and in particular, **LaCrosse Footwear ([BOOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BOOT&selected=BOOT)) )** .Most investors have probably never heard of LaCrosse, other than as a sport. But we believe in the attractive growth story of the company's exciting footwear business, strong management, record cash in the bank, emerging generational demand for its products, and 3+ percent dividend.LaCrosse seems very well placed over the next decade to see demand for its work and outdoor boots and shoes grow at a healthy rate as Gen. Y enters the workforce and leisure market. The company's recent acquisition of Environmentally Neutral Design (([END](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=END&selected=END)) )) will have a marginal impact on LaCrosse's revenue stream in the near term; however, by the end of the decade END has the potential of being larger than its new parent. END is a Portland-based outdoor athletic shoe manufacturer that focuses on sustainable footwear. The company was launched in 2007 by Ben Finlea and award winning footwear designer Andrew Estey, the former global design director for sport culture at Nike.The company released its first products in August 2007 exclusively on the web (REI, Zappos, Rock Creek and Backcountry.com). This was quickly followed by a retail launch in early 2009, and its products are now available in 100 stores across the U.S., Canada and Japan. END's light weight Stumptown shoe won best trail shoe debut by Runner's World magazine in March 2009.Major footwear companies have done an amazing marketing job over the last 15 to 20 years, convincing us that we need more high-tech design along with higher prices in our athletic shoes. However, END's 12oz trail trainer (Stumptown) when ranked against the top five competing shoes represents a 35 to 59 percent reduction in complex shoe parts, and its next 10oz model will reduce glues and cements by 75 percent. The company's ultimate goal is an 8oz trail trainer, whose light weight should also make the aging Baby Boomers happy.A further plus in END's strategy to change the footwear, as well as the "sustainability," industry is on the issue of price. Today in the U.S. "sustainability" and its first cousin, "organic," are expensive. It seems that for the majority of us in North America if we want to buy wind powered energy at home, organic produce at the market, or a bamboo shirt then we'd better be prepared to pay anywhere from 20-70 percent more for that product versus a comparable "non-green" everyday option. We agree with END's management that this is not a very sustainable way of doing business. If END's strategy is successful in demonstrating to people that they can actually get a better shoe that is actually a few dollars less and is good for the environment it could represent the start of a paradigm shift, or tipping point, in organic premium pricing. No shoe in END's lineup is over $100-its 12oz will retail for $80, the 10oz for $70, and the 8.5oz for $60. These prices still deliver great margins to the retailer, and very good ones to END, and ultimately LaCrosse.We believe END could transform the athletic footwear market with its products and that eco-aware Gen. Y will love them. We look forward to following this exciting story, and should also note that investors are buying this company's potential at 68 cents on the Dollar (P/S 0.68). **What other emerging generational opportunity equities are you finding?**There are plenty of them out there. Among those that have caught our attention are **Collective Brands ([PSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSS&selected=PSS)) )** , **Pacific Sunwear of California ([PSUN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PSUN&selected=PSUN)) ), Boston Beer Co. ([SAM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SAM&selected=SAM)) )** , and **K12 ([LRN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LRN&selected=LRN)) )** for Generation Y; and **NuSkin Enterprises ([NUS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NUS&selected=NUS)) )** and John **B. Sanfilippo & Son ([JBSS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JBSS&selected=JBSS)) )** as aging Boomer plays. **John B. Sanfilippo & Son - nuts?**Yeah, nuts. The most recent health food story. Boomers are going to eat them up. **Thanks so much for describing your process, thesis and investment ideas, Logie and Jamie. **Our pleasure. Happy to contribute. **Addendum from Jamie Moye, 3/2/10:** Readers have informed us that LaCrosse plans to discontinue the END line of footwear as a stand-alone brand and leverage the END platform of innovative and lightweight designs under its LaCrosse and Danner lines and distribution channels in the Fall of 2010. This does not change our opinion of the company as expressed in the above interview, and we trust that LaCrosse will maintain END's eco-friendly design, sustainable production methods, and competitive pricing when the line is offered as part of the LaCrosse and Danner lines of footwear. **Disclosure:** Beacon Asset Managers is long BOOT, PSS, PSUN, SAM, LRN, NUS and JBSS. ** [Read more High Conviction Picks »](http://seekingalpha.com/tag/high-conviction)**If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please [email Rebecca Barnett](mailto:[email protected]) .See also [Predictions From the Retail Front](http://seekingalpha.com/article/191525-predictions-from-the-retail-front?source=nasdaq) on seekingalpha.com | High Conviction: A Footwear Company That Runs With Generation Y | News | SeekingAlpha | Unknown | 0.0009 | 26.0641 | 26.7263 | 26.7878 | 27.7032 | 27.7155 | 27.7584 | 27.771 | 28.1657 | 28.1303 | 28.1303 | 28.1303 | 28.3108 | 28.3447 | 28.0162 | 28.1269 | 28.1669 | 28.6437 | 29.0965 |
XRX | Xerox Holdings Corporation | Technology | Computer peripheral equipment | https://www.nasdaq.com/articles/attention-citigroup-board-pandit-does-not-deserve-bonus-2010-03-02 | 2010-03-02 06:39:00 | Markets|AA|C | ** [Amit Chokshi](http://kinnaras.com/cblog) submits:** [](http://static.seekingalpha.com/uploads/2010/3/2/saupload_clogo.jpg) [Bloomberg reported Monday](http://www.bloomberg.com/apps/news?pid=20601108&sid=aKWvUvCwZng0) that Citigroup's ([C](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=C&selected=C)) ) Board of Directors believes CEO Vikram Pandit deserved a bonus for 2009. This is a laughable assertion and significant shareholders should really hold the feet of the Board of Directors of Citigroup to the fire. Is the Board beholden to shareholders or its CEO? Giving Pandit a bonus would further dilute the investment of shareholders (albeit slightly) so given that Pandit did the right thing and declined a bonus, why change course in a move that is detrimental to shareholders?In typical, "me too" mentality, C's Board believes because the CEOs of other banks such as Jamie Dimon or Lloyd Blankfein received bonuses in large part due to market recoveries and their banks' special status in receiving massive taxpayer subsidies, that C's CEO should also get a bonus. Pandit has done the right thing first off by declining any bonus. While he did bilk his predecessor Chuck Prince into paying an idiotic price for a mediocre hedge fund, Pandit has now done right by shareholders by saying he would pass on a bonus, particularly since he deserved no bonus whatsoever. The author of the Bloomberg article, Bradley Keoun, indicates that Board members felt Pandit deserved a bonus in part due to C's ability to raise capital, sell assets, and repay $20B in TARP. Anyone could have done the same job as Pandit as all of these moves were predicated on market conditions as opposed to any managerial talent.C was able to raise capital but at what price? C has consistently diluted shareholders and its success in raising capital has largely been due to massive US taxpayer support. The last capital raise C executed was to repay its TARP obligation. Laughably, this capital raise was done at essentially C's low of the entire crisis. Apparently, raising billions of high cost equity capital at multi decade lows is a sign of managerial talent according to C's Board. In addition, C was a follower in this event, raising capital to pay back TARP because its competition had done so, hardly a sign of forward thinking.Click on all images to enlarge** CHART I: C STOCK PERFORMANCE** [](http://static.seekingalpha.com/uploads/2010/3/2/saupload_csuccesschart.jpg) C's Board wants to credit Pandit for selling off C assets. A quick memo to the Board: C **had** to sell off assets. C sold off much of its garbage and did so in many cases at great prices but this again has nothing to do with managerial acumen. What happened was when C was receiving capital from the US taxpayer during the height of the crisis, managers were scared and felt that all of their loans were worthless so they took heavy marks on these securities. In 2009, credit spreads compressed, in part due to the Federal Reserve and US taxpayers' actions which buoyed the market. All of a sudden securities marked at $0.20 on the dollar were worth $0.40 or $0.80 or more. C, which had to divest itself of its more racier securities, sold these but only because market conditions allowed for it.I own C shares myself and am very bullish on the company but it's in no part due to the managerial talent of the company. It's due to mostly to deep analysis of the company's financial statements and running analyses that indicate there's value at C. As a shareholder I am more concerned by the Board's preference to treat Pandit at the expense of the true owners of C.However, when reading that some of the directors that believed Pandit deserved a bonus included Alcoa ([AA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AA&selected=AA)) ) Chairman Alain Belda, former Time Warner ([TWX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TWX&selected=TWX)) ) CEO Richard Parsons, and Xerox ([XRX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XRX&selected=XRX)) ) Chairwoman Anne Mulcahy, I was not that surprised. After all, a quick review of the stock performance of the respective companies for each of these management executives in recent years demonstrates that the shareholders received a fair kick in the teeth while these executives no doubt collected tens of millions for destroying shareholder value. **CHART II: ALCOA, XEROX, TIME WARNER STOCK PERFORMANCE** [](http://static.seekingalpha.com/uploads/2010/3/2/saupload_aa.png)[](http://static.seekingalpha.com/uploads/2010/3/2/saupload_xrx.png)[](http://static.seekingalpha.com/uploads/2010/3/2/saupload_twx.png) C's Board is clearly polluted with mediocre executives that received major rewards for delivering years of subpar performance to the shareholders of their respective companies. As a result, they have a skewed worldview of what warrants incentive compensation. While I'm not hopeful of any changes to corporate governance, large C shareholders should really contemplate to whom C's Board is beholden. **Author's disclosure:** Long C.See also [How to Deregulate Our Way to Better Payday Lending](http://seekingalpha.com/article/193058-how-to-deregulate-our-way-to-better-payday-lending?source=nasdaq) on seekingalpha.com | Attention Citigroup Board: Pandit Does Not Deserve a Bonus | News | SeekingAlpha | Unknown | 0.0009 | 9.28803 | 9.34567 | 9.34622 | 9.54901 | 9.54901 | 9.54901 | 9.54901 | 9.54901 | 9.51417 | 9.49755 | 9.52072 | 9.52072 | 9.59472 | 9.38171 | 9.58587 | 9.82 | 10.1093 | 9.76189 |
THR | Thermon Group Holdings, Inc. | Energy | Industrial Machinery/Components | https://www.nasdaq.com/articles/gold-nudges-continued-greece-woes-australia-output-seen-rising-2010-03-02 | 2010-03-02 08:18:00 | Markets|NEM | Gold is benefitting from the ongoing saga of Greece's sovereign debt, as demand for the precious metal continues to rise steadily amid worries about Greece's outlook.On the supply side, Australia could beef up its production by 10 percent by 2011, according to the Australian Bureau of Agricultural and Resouce Economics. The Canberra-based group said increased output at the Boddington mine of Newmont Mining Corp. ([NEM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NEM&selected=NEM)) ) would be the single biggest contributor to the increase. At 0810 ET, gold is up 0.3 percent at $1,122.00 an ounce, while silver is 0.8 percent stronger at $1,659.50, and copper is largely unchanged at $335.10 a pound.On the corporate front, a major shareholder in Russia's OAO Polyus Gold ([PLZL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PLZL&selected=PLZL)) ) said that the mining company is looking to merge or acquire a rival as part of its global expansion strategy. Mikhail Prokhorov cautioned, however, that any deal must allow Russian shareholders to continue keeping control of Polyus, which is the biggest gold producer in the country. Together with Suleiman Kerimov, Prokhorov controls about 40 percent of Polyus.Meanwhile, Australia's Thor Mining ([THR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=THR&selected=THR)) ) is looking to acquire a gold project in western Australia. The move is part of the mining group's plan to expand further into western Australia, focusing largely on gold mining. The Dundas project consists of three tenements, and Thor will initially acquire a 51 percent stake in the three for 100,000 Australian dollars. Thor closed up 5 percent at 21 Australian cents on the Australian Stock Exchange Tuesday. Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited. | Gold Nudges Up on Continued Greece Woes, Australia Output Seen Rising | News | MTNewswires | Unknown | 0.0009 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
DIN | Dine Brands Global, Inc. | Consumer Discretionary | Restaurants | https://www.nasdaq.com/articles/one-index-thats-not-stuck-2010-03-03 | 2010-03-03 08:26:00 | XAU|Markets|COST|XLE|FXI|BIG|SPX|BJ | ****Stock purchases were not on the minds of investors yesterday as a low-volume session ground to a flat close. Some blamed the malaise on the expiration of the Q4 earnings season and a renewed emphasis on economic news. Others said that the foreign economic situation gave pause to traders.Futures were strong with gains in gold and oil as the inverse relationship between the U.S. dollar and commodities again asserted itself. Natural resource and materials stocks were higher, and technology and financial stocks closed lower. Key economic reports will be issued late this week with a focus on the jobs numbers due on Friday.At the close, the Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) was up 2 points to 10,406, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) gained 3 points to 1,118, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) rose 7 points to 2,281.The NYSE traded just over 1 billion shares with advancers ahead of decliners by over 2-to-1. On the Nasdaq, 769 million shares traded also with advancers ahead by over 2-to-1.April crude oil closed at $79.68 a barrel, and the Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) closed at $57.13, up 47 cents.Gold (March contract) surged to a new 18-month high, up $19.10 to $1,137.40 an ounce. The PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) rose 3.85 points to $167.96. Yesterday's rise in the XAU resulted in a near breakthrough of the three-month resistance line drawn from the early December high at over $195 and a clear break through its 50-day moving average. **What the Markets Are Saying** Each of the major indices has grudgingly closed above its 50-day moving average as low volume but acceptable breadth again marked yesterday's trading.But one bright spot has emerged, and that is the action of Nasdaq. It is the only major index to fully clear its 50-day moving average. And yesterday it even rose to the bottom of the next resistance zone at 2,270 to 2,326.But the other indices seem stuck despite small gains: The Dow is at its highest level in five weeks, but it is capped by the February high of 10,459. The S&P 500 is now well into the next resistance zone of 1,115 to 1,150, but its internal indicators are not so overbought, and volume is so low that its staying power is questionable.There is one other noteworthy development, besides the breakout of the PHLX Gold/Silver Sector Index mentioned above. That is the reversal of the iShares FTSE/Xinhua China 25 Index ( ** [FXI](http://moneycentral.msn.com/detail/stock_quote?symbol=fxi)** ).After a clear breakdown in January and February that resulted in a crossing of the 200-day moving average by the 50-day moving average (a death cross), the index has had a dramatic high-volume recovery in just two days. It is not unusual for a major ETF, especially the difficult FXI, to bounce following a breakdown, but the extent of the rebound and the accompanying high volume is unusual and bears watching for additional signs of a genuine reversal. The bottom line is still one of caution, but the bull is stirring while the bear is still pacing. Neither, it seems, wants to give away much ground. **Today's Trading Landscape****Earnings to be reported before the opening include:** Big Lots, BJ's Wholesale Club, Brown Shoe, Canadian Solar, Carrizo Oil & Gas, China Medical Technologies, Costco, DineEquity, Joy Global, Lincoln Educational Services, LoJack, Maidenform Brands, Nelnet, Netezza, Pozena and Rimage. **Earnings to be reported after the close:** Alliance Imaging, Altra Holdings, American Railcar Industries, Cbeyond, Celera, Coldwater Creek, Coleman Cable, Comtech Telecommunications, Cross Country Healthcare, Darling International, DCP Midstream, DivX, Dynamex, Famous Dave's, Finisar, Foot Locker, Fuel-Tech, Home Inns, Jazz Pharmaceuticals, LHC Group, Natural Gas Services, PetSmart, Sigma Designs, Sina, Sun Healthcare, Take-Two Interactive Software, Triangle Capital, Virgin Mobile USA, Volcano, WCA Waste and Yamana Gold. **Economic reports due:** MBA purchase applications, Challenger Job-Cut Report, ADP employment report, ISM non-manufacturing index (the consensus expects 51), EIA petroleum status report and Beige Book. **Quarterly earnings news (earnings vs. expected):** - Big Lots ( ** [BIG](http://moneycentral.msn.com/detail/stock_quote?symbol=big)** ): $1.31 vs. $1.28 - BJ's Wholesale ( ** [BJ](http://moneycentral.msn.com/detail/stock_quote?symbol=bj)** ): 95 cents vs. 96 cents - Costco ( ** [COST](http://moneycentral.msn.com/detail/stock_quote?symbol=cost)** ): 70 cents vs. 72 cents - Dine Equity ( ** [DIN](http://moneycentral.msn.com/detail/stock_quote?symbol=din)** ): 76 cents vs. 15 cents **Related Articles:** - [How to Cash in on the ETF Craze](http://www.optionszone.com/trading-ideas/gallery/what-is-an-etf.html) - [Biotech ETF Could Run to $100](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/03/stock-picks-ishares-nasdaq-biotechnology-index-fund-ibb.html) - [Technical Analysis IQ Test](http://www.optionszone.com/trading-ideas/gallery/technical-analysis-iq-test.html) **The Options Trader's Guide to Technical Analysis** In his latest report, learn how John Lansing leverages the power of technical analysis to identify the short window when a trade is set to go straight up or down. [Get your FREE copy here!](http://www.optionszone.com/order/?sid=HB3208) | The One Index That's Not Stuck | News | Unknown | Unknown | 0.0009 | 29.3449 | 29.2812 | 29.3803 | 30.5193 | 30.5193 | 30.5193 | 30.7322 | 33.1969 | 33.4742 | 33.038 | 33.2725 | 33.2233 | 32.7385 | 35.1951 | 35.1103 | 35.1103 | 38.6183 | 39.1734 |
MEI | Methode Electronics, Inc. | Technology | Electrical Products | https://www.nasdaq.com/articles/has-market-run-out-gas-2010-03-04 | 2010-03-04 08:26:00 | Unknown | ****Yesterday's economic data was positive with the release of the Fed's Beige Book at center stage, showing that the economy was gradually improving. Although payrolls were down by 20,000 (an expected number), the ISM services index for February came in at 53, which was several points better than expected.The initial impact was that stocks rallied, but by 11 a.m., the market was exhausted and sold off for the rest of the day. Even the weakness in the U.S. dollar and a stronger euro due to Greece's new austerity plan failed to halt the selling that began mid-morning. The afternoon's losses wiped out a Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) gain of over 60 points made in the first 90 minutes of trading. Volume was again very light as the market appears abnormally focused on the unemployment numbers coming up on Friday.The afternoon sell-off was [led by the pharmaceutical group](http://www.optionszone.com/market-commentary/options-activity/2010/02/medivation-mdvn-options-active-after-company-announces-poor-trial-results.html) following an early morning report that a co-developed experimental Alzheimer's treatment by Pfizer ( ** [PFE](http://moneycentral.msn.com/detail/stock_quote?symbol=pfe)** ) and Medivation ( ** [MDVN](http://moneycentral.msn.com/detail/stock_quote?symbol=mdvn)** ) failed to show positive results. And heavy selling of the health care group occurred late in the day after a statement from President Obama that he is seeking to push the "long and wrenching debate" over health care into its final stages.Health care was the worst performer, down 0.5%, while the strong economic data helped basic materials (up 1%) and energy (up 0.2%).At the close, the Dow was down just over 9 points to 10,397, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) gained fractionally to 1,119, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) fell slightly to 2,281.The NYSE traded just 937 million shares with advancers ahead of decliners by 8-to-7. The Nasdaq traded 694 million shares, and breadth was flat. Better economic data led to a gain in April crude oil, up $1.19 to $80.87 a barrel. The Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) closed at $57.38, up 25 cents.April gold rose $5.90 to $1,143.30 an ounce, and the PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) rose 2.32 points to 170.28. **What the Markets Are Saying** The markets are still stuck in a narrow trading range. Even after apparently clearing the 50-day moving averages of the major indices, volume contracted from the weak numbers of the past five trading sessions.The best that may be said of the current technical situation is that the trend is still up. And yesterday, one of my favorite indices, the broad-based NYSE Composite Index, put some distance between the close and its 50-day moving average. The index closed at 7,165, up 29 points. Its 50-day moving average is at 7,127.There are a few groups that continue to move ahead. Gold and precious metals, and coal are strong. But other oft-mentioned groups, even the highly touted technology sector, are up one day and down the next -- except for semiconductors, which have been rising since early February. The consumer goods group is strong and [broke out again yesterday](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/03/stock-picks-proshares-ultra-consumer-goods-uge.html) . It may be that investors are focused on tomorrow's jobs numbers. But solid, powerful breakouts are not usually dependent upon a news event for support -- especially one that is so regularly reported. In fact, the strongest breaks usually are in the face of bad news.I remain cautious, but optimistic longer term. **Today's Trading Landscape****Earnings to be reported before the opening include:** American Ecology Corp., Babcock & Brown Air, Bio-Reference Labs, Ciena, Consolidated Communications Illinois, Cornerstone Therapeutics, Del Monte, Fuel Systems Solutions, Gerber Scientific, H&E Equipment Services, Inspire Pharmaceuticals, Medifast, Methode Electronics, Micromet, Midas, Monotype Imaging, Nash Finch, Natus Medical, Orion Marine, Penwest Pharmaceuticals, Perficient, Ritchie Bros, Suntech Power, SXC Health Solutions, Teekay Shipping, U.S. Physical Therapy, Urban Outfitters, Wendy's and Western Refining. **Earnings to be reported after the close:** 51job, AMN Healthcare Services, ArcSight, AthenaHealth, Cooper Companies, DepoMed, Dynamic Materials, Emergent BioSolutions, Energy Recovery, Equity One, Giant Interactive, Martin Midstream, Marvell Technology, Medidata Solutions, Mentor Graphics, Move, PC-TeL, S1 Corp, Silver Wheaton and Union Drilling. **Economic reports due:** chain store tales, Monster Employment Index, jobless claims (the consensus expects 475,000), productivity and costs (the consensus expects 6.3% for non-farm productivity, and -4.5% for unit labor costs), RBC CASH Index, factory orders (the consensus expects 2%), pending home sales, EIA natural gas report, Fed balance sheet and money supply. **Quarterly earnings news (earnings vs. estimated):** - Babcock & Brown Air ([FLY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FLY&selected=FLY)) ): 45 cents vs. 29 cents - Canadian National Resources ([CNQ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CNQ&selected=CNQ)) ): $1.23 vs. $1.38 - Ciena ([CIEN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CIEN&selected=CIEN)) ): 12 cents vs. 6 cents - ENGlobal ([ENG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ENG&selected=ENG)) ): 3 cents vs. 2 cents - Fuel Systems Solutions ([FSYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FSYS&selected=FSYS)) ): $1.12 vs. 98 cents - Methode Electronics ([MEI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=MEI&selected=MEI)) ): 11 cents vs. 3 cents - Suntech Power ([STP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=STP&selected=STP)) ): 27 cents vs. 11 cents - Urban Outfitters ([URBN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=URBN&selected=URBN)) ): 45 cents vs. 40 cents - Western Refining ([WNR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WNR&selected=WNR)) ): 58 cents vs. 68 cents **Late news:** The Greek government asked banks to plan a much-awaited 10-year bond issue in hopes of raising between $4.11 billion to $6.85 billion to help cover short-term funding gaps, according to the Wall Street Journal. **Related Articles:** - [Use Trendlines to Predict the Market's Next Move](http://www.optionszone.com/technical-analysis/technical-indicators/use-trendlines-to-predict-the-markets-next-move.html) - [10 Tips to Getting Started With Technical Analysis](http://www.optionszone.com/trading-ideas/gallery/technical-analysis-stock-getting-started.html) - [Leverage Your Profits in This Consumer Goods ETF](http://www.optionszone.com/trading-ideas/gallery/technical-analysis-iq-test.html) **Your Guide to Profiting From Asia's Explosive Growth** For access to the best-kept secrets about investing in China and the rest of Asia, plus the hottest stocks to buy and sell, sign up now for Robert Hsu's FREE investing newsletter, Asia Insider . [It's sent right to your e-mail inbox every week -- absolutely FREE!](http://www.optionszone.com/order/?sid=EK3116)**** | Has the Market Run Out of Gas? | News | Unknown | Unknown | 0.0009 | 12.481 | 13.0154 | 13.0606 | 13.0421 | 13.0421 | 13.0421 | 13.0421 | 12.1993 | 11.921 | 11.5838 | 11.5116 | 11.5116 | 11.5673 | 10.8277 | 10.6693 | 10.6638 | 10.0509 | 9.98267 |
NRP | Natural Resource Partners L.P. | Energy | Coal Mining | https://www.nasdaq.com/articles/forget-buy-and-hold-periodic-rebalancing-new-discipline-2010-03-05 | 2010-03-05 01:53:00 | KO|Markets|BCE|AXP|WFC | ** [Joseph L. Shaefer](https://www.nasdaq.com/articles/www.stanfordwealth.com) submits:**After a recent article I wrote disparaging index investing ([here](http://seekingalpha.com/article/189925-index-investing-is-no-panacea)) ), I received a number of private messages asking "then how do we do it?" Some were genuinely seeking a way out of the index fund morass, some were saying, nicely, "OK, smart guy, but what works any better?" Let me answer by excerpting something I wrote in the February issue of Investor's Edge ®: This is the strategy we use to attempt to consistently maximize our returns, and one that has historically beaten a "buy and hold" philosophy as well as day-trading / over-trading. Let's dispense with these two extremes by turn:Warren Buffett says his favorite holding period is forever. Well, heck, that would be my favorite holding period, too! If only we could buy stocks that never went down, even in a secular bear market, of course we'd like to hold forever. It requires only one decision, then we let the miracle of compounding make us rich, right? Um, not exactly . It is seductive in its simplicity, but it doesn't really happen that way...What is disingenuous about the comment, for most investors besides Mr. Buffett, is that the rest of us don't have 80% of our earnings (closer to 100% lately) coming from 100% privately-held cash cows. By owning so many privately held firms, Berkshire Hathaway ([[BRK.A]] and the now much more widely available [[BRK.B]]) doesn't have to worry when the value of their publicly-held securities plummet, as long as the private parts of the company still reel in the cash flow. And the publicly-held stocks are corporately -held -- so it doesn't matter if it takes 10 or 50 years to come back.But we as individuals may not have the 10 years or more it takes to get whole again. (BRK's biggest holding, Coca-Cola ([KO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KO&selected=KO)) ), was 55 in 2000 and is 54 today. Its 2nd-biggest holding, American Express ([AXP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AXP&selected=AXP)) ), was 50 in 2000 and is 39 today. #3 Wells Fargo ([WFC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=WFC&selected=WFC)) ) was 20 ten years ago and is 28 today. Etc.) If you want to buy-and-hold, I hope you're getting lots of dividends because even legendary investor Warren Buffett has earned just under **0%** over the last ten years on his let's-just-hold-it-forever portfolio.At least the buy-and-hold extreme has a certain charm, a "don't-we-wish" quality that those with a vested interest in keeping your money with them all the time (like brokers, hedge funds, mutual funds, et al) will sonorously intone is the only safe way for an individual to invest. (What they mean, of course, is leave all your money with them all the time so they can trade it willy-nilly -- Goldman Sachs' SEC filing for 2009 shows they made more than $100 million day-trading, closing out their positions by the end of the day, on 131 separate days in 2009! They only lost money day-trading on 19 days, and then never approaching $100 million.) Those who believe they can duplicate Goldman's success at day-trading, however, have an infinite capacity for self-delusion. Have inside information? A Cray super-computer? An office a half-block from the exchanges' servers? Can you execute trades in milliseconds? I've been involved in the market as an investor and an insider for 40 years and I have yet to see a day-trader make money for more than one lucky bull market cycle. And in lucky bull market cycles, chimpanzees could buy and hold or throw daily darts and make money. Genius is a rising market.If your propensity is to disagree based upon the propaganda you've been fed by Wall Street, you need look no further than the documented results in these pages since we began our Model Portfolios, with timely re-balancing, 11 years ago. We just had the worst two-year run we've ever had. Ever . And still, over those 11 years, we beat buy-and-hold, "the market" and, with all the gyrations of up Dow 400 one day, down 600 the next, no doubt the day-traders, were whipsawed mercilessly.The risk we take in re-balancing, of course, is getting the time we choose to re-balance wrong. I claim no infallibility; just good fortune or good instincts (conscious and subconscious analysis of past history and current events) over that time. Let's take a look at the past two years where, even with our -- my -- lousy re-balancing choices, we are still ahead of the market.This is a critical analysis because it clearly shows that you can be wrong on your entry and exit points by some number of weeks or even months, but by taking the proper action -- even "too early" or "too late" relative to the absolute optimal entry point, still do better than you would have by "buy-and-pray" or "trade-and-lose." If you began the year 2008 with $1000 in an S&P 500 index fund, you would have lost 38.5% -- $385 -- by the end of the year, leaving you with $615. But let's say you are a devotee of buy-and-pray and you hung in there, not the least bit swayed when the market plunged and your portfolio fell apace. By the end of 2009, you would have enjoyed a whopping 23.5% gain on your remaining $615, sort of vindicating your decision to hold through thick and thin. Add 23.5% to your $615, and you have $760. At year-end 2009, you were only down $240 after 2 years, having lost "only" about one-quarter of your net worth.I was way off in my re-balancing timing in 2008 and 2009. I predicted the decline in 2007, then stayed far too long at the fair in 2008, hit the exact week to get back in March 2009 ([SA article here](http://seekingalpha.com/article/123768-can-you-hear-the-bell-signaling-a-bottom)) ), left too early and, horror of horrors, went short in the summer via inverse ETFs. As a result of that in-retrospect-terrible decision, I had my Thead handed to me. Those results may not be typical, but the frequency is: major re-balancing to meet market, external event and sentiment expectations typically happens about twice a year. I'm usually 2 for 4 or 3 for 4; over this 2-year period, I was just 1-for-4. Abysmal. And yet…Because we re-balanced in 2007 and 2008 to get subscribers into a good chunk of cash, we were only down 18.7% in 2008. ( Only is relative - the S&P 500 was down 38.5% in 2008 and makes no apology for it. At least we have the humanity to be embarrassed by our staying too long at the fair and the humility to try to do better.) Even after failing to reduce our equity position to $0 in early 2008, and under-performing the great rebound in the S&P 500 by 23.5% to just 5.4%, still -- every $1000 invested the way we recommended in our Model Portfolios left you with $857 versus $760 if you bought-and-held. Our awful decision to exit too early in 2009 and go short for 12 weeks of gut-wrenching wrong-way Corrigan was partially made up with our out-performance in the 2nd and 4th quarter, but we were up just 5.4% for the year, leaving subscribers at the end of those two years with $857. That means we still beat buy-and-hold by $97 for every $1000 invested - making just 4 re-balancing decisions in 2 years to do it, only 1 of which was spot-on. ( to be continued )[In Part II](http://seekingalpha.com/article/192099-forget-buy-and-hold-periodic-rebalancing-is-the-new-discipline-part-ii) , I'll contrast buy-and-hold with an example of better re-balancing decisions and suggest reasons why people typically hunker down with what they have rather than re-balance their portfolios. In the meantime, if you'd like to act upon these thoughts, it takes nothing more than reducing your current equity exposure. You don't have to sell everything, but how about selling 50-70% of the issues that you are uncomfortable with at their present valuation levels? How about replacing them by increasing your exposure to some good income-producing firms like Penn Virginia ([PVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PVR&selected=PVR)) ), Natural Resource Partners ([NRP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NRP&selected=NRP)) ), Atlantic Power ([ATLIF.PK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ATLIF.PK&selected=ATLIF.PK)) ), Bell Canada ([BCE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCE&selected=BCE)) ), New Zealand Telecom ([NZT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NZT&selected=NZT)) ), and Nuveen Senior Income Fund ([NSL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NSL&selected=NSL)) ). Do your research on these dividend standouts and see if you agree they are excellent holdings for uncertain times. **Author's Disclosure**: We and / or clients for whom these investments are appropriate, are long BCE, NRP, PVR, MMP, ATLIF.PK. NZT, and NSL- while maintaining a sizeable cash cushion. **The Fine Print**: As Registered Investment Advisors, we see it as our responsibility to advise the following: We do not know your personal financial situation, so the information contained in this communiqué represents the opinions of the staff of Stanford Wealth Management, and should not be construed as personalized investment advice.Also, past performance is no guarantee of future results, rather an obvious statement if you review the records of many alleged gurus, but important nonetheless - for example, our Investors Edge ® Growth and Value Portfolio beat the S&P 500 for 10 years running but did not do so for 2009. We plan to be back on track on 2010 but then, "past performance is no guarantee of future results"!It should not be assumed that investing in any securities we are investing in will always be profitable. We take our research seriously, we do our best to get it right, and we "eat our own cooking," but we could be wrong, hence our full disclosure as to whether we own or are buying the investments we write about. See also [Curb Short Selling? The SEC Resides in Unreal World](http://seekingalpha.com/article/193885-curb-short-selling-the-sec-resides-in-unreal-world?source=nasdaq) on seekingalpha.com | Forget Buy and Hold. Periodic Rebalancing Is the New Discipline | News | SeekingAlpha | Unknown | 0.0011 | 25.7161 | 26.1856 | 26.4104 | 26.4379 | 26.4415 | 26.4415 | 26.4379 | 26.4379 | 26.4391 | 26.4391 | 26.4389 | 26.6647 | 26.8244 | 26.8205 | 26.857 | 27.0746 | 26.5791 | 25.2118 |
CXW | CoreCivic, Inc. | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/continued-profits-are-lock-industry-2010-03-05 | 2010-03-05 11:13:00 | Markets | Interesting data from your federal government:The average wage of the 15.2 million employees in California, according to the U.S. Bureau of Labor Statistics, is $48,090. That's about $23.12 an hour.Very low on the scale: Private security guards, at $25,950. Also bailiffs, who earn just under $49,000. Yet relatively high on the scale is state prison guards, who can, with overtime, easily earn more than $100,000 a year. By contrast, a kindergarten teacher in the Golden State can expect to pull down an average $56,540.If that makes you crazy, try this statistic on for size: Fully 9.5% of the California state budget is allocated toward prisons. Only 5.7%, by comparison, goes to universities.Twenty-five years ago, prisons were 4% of the budget. Higher education represented 11% of the state budget.The prison guards union has historically been one of the most powerful in the state. No one pays guards more. And these jobs are very secure: If Sacramento is facing the squeeze and has to furlough state workers, prison guards are one of the few groups that are exempt and must stay on the job.Wages are only the tip of the compensation iceberg: Guards also receive generous health care and retirement benefits. You won't get 90% of your salary in retirement. A prison guard in California, however, absolutely will. The Governator is not happy with this.His administration has been plagued by budget crises. The current budget proposal creates a $20 billion deficit , which half of Californians -- according to a poll released today -- say should come not from more taxes but from spending cuts.(The half that doesn't think that way were among those who sued the governor for exercising his line-item veto last year. The courts ruled on Tuesday that he had the authority to reduce or eliminate state programs.) Mr. Schwarzenegger is sponsoring a ballot initiative that would automatically give more money to higher education than to prisons. He has also said he wants to build jails in Mexico to house the 20,000 or so illegal immigrants in California prisons. That suggestion, however, raises constitutional questions and is unlikely to gain traction as a serious solution.What's left?Well, the governor could let people out of jail. The politics of this are dicey, as anyone who remembers Willie Horton can attest.There are other practical considerations as well. In some cases, release isn't even an option. California has a "three strikes" law. Since 1994, three felony convictions have put offenders in jail for the rest of their lives, with scant chances for parole. The law, upheld by the Supreme Court, is wildly popular. After 15 years, one study suggested it has saved the state $54 billion and prevented 10,000 murders. I'll give you three guesses which lobby pushed that bill through the statehouse.If you said "the California Correctional Peace Officers Association," you're right.Mr. Schwarzenegger's only serious alternative is to find a cheaper solution than putting these inmates in prisons with platinum-paid guards. The governor can outsource the problem to companies with lower costs. Private prison operators pay security guard wages rather than correctional officer wages, which gives them a significant pricing advantage. (Wages represent 70% of a prison's budget.) What's more, private business is far more adroit at building prisons than the slow ship of state can, especially during a financial crisis. And while there is some question as to whether it's kosher to ship inmates to Mexico, it's perfectly all right to ship them to another state.All that is why 25 U.S. states have deals to outsource prisoners. The leading vendor is **Correctional Corporation of America ([CXW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CXW&selected=CXW)) )** , a $2.4 billion company that operates 65 private prison facilities with 87,000 beds in 19 states and the District of Columbia.Corrections revenue, not surprisingly, has not decreased since 2005. And the future looks bright for the company, not just because of the problems of Mr. Schwarzenegger, but because of the long-term trend toward harsher incarceration in this country. In 1980, 319,598 people were in prison. At the end of 2008, the latest year for which the Department of Justice has data, the total U.S. prison population stood at 1.5 million, a gain of +375%, exceeding the growth in the general population -- +32.4% -- more than tenfold.The bottom line is that Corrections can't build prisons fast enough, and it will never run out of supply. Even given its status as the No. 1 operator of private prisons, its bed count is equal to a mere 5.7% of the total inmate population.Given this immense growth potential, CXW is exceedingly cheap. Shares trade for a mere 15.5 times earnings, a significant discount to its historical average earnings multiple of 18.5 and a -13.9% discount to the broader market.Low costs, strong margins and an endless supply of "customers" is as good as business models get. As governments, like Mr. Schwarzenegger's, seek to find ways to reduce spending, CXW's services will look very appealing. If his ballot initiative wins passage, the state will have no choice but to outsource massive amounts of prisoners. These government actions are very good news for the company's shareholders -- and very good reasons to become one today.Government actions mean big money. If you're looking for a steady stream of government-driven profit opportunities like CXW, I invite you to test-drive my premium investing ideas.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Disclosure: Andy Obermueller does not own shares of any security mentioned in this article.Andy ObermuellerEditor: Government-Driven InvestingDisclosure: Andy Obermueller does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | Continued Profits Are a Lock for This Industry | News | Andy Obermueller | Unknown | 0.0011 | 21.389 | 20.8083 | 20.84 | 21.1425 | 21.1102 | 21.0837 | 21.067 | 21.1 | 21.1826 | 21.1921 | 21.1921 | 21.1921 | 21.1938 | 21.1491 | 21.1 | 21.1524 | 19.8069 | 19.8177 |
HLX | Helix Energy Solutions Group, Inc. | Energy | Oilfield Services/Equipment | https://www.nasdaq.com/articles/commodities-mixed-mondays-close-gold-falling-oil-rises-2010-03-08 | 2010-03-08 03:09:00 | Unknown | Commodities were mixed at the end of trading Monday with gold ending lower as oil moved up a few notches.Gold futures edged lower as investor enthusiasm for the U.S. economy and aid to Greece faded. That lifted the dollar while reducing the appeal of gold. Gold for April delivery closed at $1,124 an ounce, down $11.20, or 1% at the New York Mercantile Exchange. It earlier rose as high as $1,138 and fell as low as $1,118.50 an ounce.In other metals, silver for April delivery ended down $0.09, or 0.6%, at $17.26 an ounce.Meanwhile, oil finished higher on positive sentiment about the U.S. economy and comments from a Chinese official about that country's economic growth.Crude oil for April delivery finished up 37 cents, or 0.4%, at $81.87 a barrel at the New York Mercantile Exchange.Traders looked to stocks to check investor optimism about the U.S. economuy. The Dow Jones industrial Average was down 1.89 or 0.02%, to 10,564. An Energy Department report on March 10 will show that U.S. crude supplies climbed last week, a Bloomberg News survey showed.Oil prices were boosted by Chinese Premier Wen Jiabao, who said in his report to the Chinese legislature that he would maintain an 8% growth rate for the economy this year. The positive economic outlook raised prospects for oil demand.In energy stocks, Helix Energy Solutions Group ([HLX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=HLX&selected=HLX)) ) is up as it looks to divest its entire oil and gas business. The energy group said it will concentrate on becoming a contracting services company focused on deepwater well intervention and subsea construction.Helix did not give details on a timeline, but stated that its executive vice president of oil and gas, Robert Murphy, will be leaving the company as it prepares to push ahead in a new direction.Helix shares were up 7.84%, or $0.93, to $12.79Last December, the company said it would divest some non-core assets including some or part of its oil and gas operations. Royal Dutch Shell ([RDSA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RDSA&selected=RDSA)) ) and PetroChina together bid more than $3 billion for Australia's Arrow Energy ([ASX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ASX&selected=ASX)) ), marking a Chinese firm's first venture in the country's burgeoning coal-seam gas sector.In other energy prices, heating oil futures rose 0.34%, or $0.71, to $210.45. Natural gas futures declined 1.24%, or $0.05, to $4.53. Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited. | Commodities Mixed At Monday's Close With Gold Falling As Oil Rises | News | MTNewswires | Unknown | 0.0011 | 11.6163 | 11.882 | 12.104 | 12.1189 | 12.1189 | 12.1189 | 12.1189 | 12.1189 | 12.1189 | 12.1535 | 12.6971 | 12.8018 | 12.7912 | 13.0611 | 14.1257 | 14.5172 | 13.5264 | 14.8685 |
CNSL | Consolidated Communications Holdings, Inc. | Telecommunications | Telecommunications Equipment | https://www.nasdaq.com/articles/high-conviction-regional-telco-8-dividend-and-strong-growth-prospects-2010-03-09 | 2010-03-09 02:24:00 | Markets|T|VZ | ** [Barry Barker](http://barkerfinancialmanagement.com/) submits:**Barry Barker is founder and President of [Barker Financial Management](http://barkerfinancialmanagement.com/default.aspx) , a fee only Financial Planner and RIA based in Baltimore, MD. Before starting his investment firm, Barry earned a Masters from Johns Hopkins University Whiting School of Engineering and worked for FMC Corporation performing financial analyses of technical innovations and new business while developing technology alliances and joint ventures.We recently had the opportunity to ask Barry what his single highest conviction stock holding currently is in his portfolio. **Barry, how do you view the current market and what is your highest conviction stock position that you are recommending to your clients - long or short?**The U.S. economy and investors were badly hurt by the collapse of the real estate market and it will take years for both to fully recover. Although investor sentiment improved as the economy bottomed out, the easy money has been made in the stock market. As the economy stabilizes, we can expect slow economic growth with wide oscillations in the stock market this year and next, fueled by strong investor reactions to divergent economic and political news. In this environment, and until we see greater evidence that the domestic economy is gaining traction and that investors are becoming more confident, I am putting value before growth, and stability before opportunity by recommending a basket of large and mid cap dividend paying stocks.I believe that solid companies with superior management and good cash flow backed up by a history of increasing dividends are prime investment candidates in an apprehensive market. One of my highest conviction positions in this basket of dividend stocks that I am recommending to my clients is regional telco **CenturyLink ([CTL](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CTL&selected=CTL)) )** , formerly CenturyTel/EMBARQ.I view CenturyLink as a good short term position with long term possibilities. The current dividend yield is 8.0%. CTL recently increased their dividend and they have a consistent history of doing so. CTL is slightly off its 52 week high, but with the recent acquisition of the larger telco, EMBARQ, CenturyLink will realize added cost savings as the EMBARQ business is assimilated and a larger footprint to generate greater revenues with the potential to push their stock price to historic values. **What do you find attractive in this business?**Century provides telephone and broadband services to rural areas of the country not served by the larger telcos like Verizon ([VZ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VZ&selected=VZ)) ) and AT&T ([T](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=T&selected=T)) ). Last year they acquired Embarq Corporation and are in the process of integrating the two companies. By leveraging their synergies, they expect to achieve $375 million of cost savings over three years with the bulk of those savings occurring this year and next. Voice-related revenues continue to decline due to recessionary pressures and as some customers migrate to VOIP using high-speed internet services. The switch to VOIP and the cannibalization of CTL's access lines is offset by the more profitable switch to high-speed internet service, but that only slows the access line revenue decline.With the Embarq acquisition, CenturyLink's strategy to push broadband service to its customers over a larger footprint will increase revenues and improve profitability longer term, but integration costs and the loss of access line customers will adversely impact revenues for the near term.CenturyLink's sustainable free cash flow, however, and their continued track record of increasing dividends, including the recent 3.6% quarterly dividend increase from $0.70 to $0.725 per share, makes CTL an attractive company to own simply due to the fact that the hefty dividends can be counted on to carry the investor through the next couple of years until the longer term strategy is realized to support growth in the stock price. **To what extent is this a sector pick on regional telecom, as opposed to a pure bottom-up pick on CTL?**Although the recent drop off in price makes CTL a reasonably priced stock and a decent entry point for value investors, it is more of a sector pick than a value pick. At the end of last year, if you liquidated the company's tangible assets and paid off its current liabilities, its book value was close to its shareholder's equity. So my short term conviction for this pick is in the company's superb management of cash flow and its philosophy of rewarding its stockholders with increasingly more valuable dividend payouts.Longer term, I like its strategy of increasing revenue growth through the execution of its broadband strategy, launch of Pure Broadband fiber optics across the Embarq markets, and the potential for additional acquisitions in 2012.Although CenturyLink could surprise, I am being tough on the growth potential of this stock because I want to make it clear that my commitment is not related to stock price growth in the near term. The strength of my commitment is compelled by the judicious use of this position to help the investor weather the gyrations of the market until the growth of the U.S. economy can support future market advances in this subsector and to give CenturyLink time to execute its long term strategy. **Can you describe the company's competitive environment?**CenturyLink operates in the Integrated Telecommunications Services subsector, and with its recent acquisition of Embarq has a stock market capitalization of a little over $10 billion, which makes it the largest supplier of telecommunications in this subsector.It can use its size to gain economy of scale, further reduce costs, and position itself to gain market share from its competitors through brand and pricing strategies and/or acquisitions. It makes sense to me that we will see continued consolidation in this subsector and that CenturyLink will continue to acquire small regional telcos to continue its growth so that it can leverage its size in the regional markets the same way that Verizon, AT&T, and Sprint do in the metropolitan areas of the U.S. **What about CTL stock's valuation - and how does valuation compare to the competitors?**Since CenturyLink distributes a significant amount of its free cash as dividends to its shareholders, I prefer to use a Price to Book valuation rather than PEG to determine valuation. Currently CTL has a tangible P/B ratio below 1.0, which compares well with its primary competitors. I prefer to use tangible P/B rather than overall price to book as I believe that removing intangibles like Goodwill from the calculation gives a more realistic valuation. CTL is also more profitable than many of its competitors by all standard profitability measures. **What is the current sentiment on the stock? How does your view differ from the consensus?**Some research companies and many of the analysts that cover this company rate this stock a buy. There are notable recent exceptions, however, so there is a range of opinion depending on the outlook for the company and how each analyst measures the strength of the company and its potential for growth. I give greater weight to the company's free cash flow and its ability to continue to pay hefty dividends to the shareholders than its near term growth potential so I am more bullish than some analysts that rate this stock a hold or lower. **Does CenturyLink's management play a role in your position?**I like that management has a good plan for returning value to its shareholders in the form of dividends while it marshals its forces to execute its long term strategy. I also like that management is taking an incremental approach to consolidation as Embarq is integrated into the business and is ensuring that it is well assimilated before continuing any further M&A activity.This is also true of their efforts to leverage their broadband technologies, including fiber optics, while managing an orderly cannibalization of their voice lines to control the loss in revenues during the switch to new technologies. It is easy to develop a 5 year plan, but much more difficult to execute it effectively. CenturyLink's management is doing a good job of executing their strategy while maintaining shareholder value as we emerge from the recession. **What catalysts do you see that could move the stock?**Since CenturyLink does not have any significant debt maturities next year, I would not be surprised to see the company begin to repurchase some of its own shares using its excess cash in lieu of raising dividends to shareholders. Providing a buyer will drive the stock price and EPS upward as they purchase and retire shares.Notably, cash flow-positive companies like CenturyLink often opt to repurchase shares instead of paying dividends simply because dividends get taxed twice so the corresponding increase in stock price can provide greater after tax value to the shareholder when those stocks are held long term in a taxable account. I also expect to see the stock move higher in the next few years as CenturyLink executes their broadband strategy and acquires smaller telcos to increase their footprint in the regional telecommunications market. **What could go wrong with your CTL holding?**A couple of things could drive the stock price down, including an inability to recoup all of the cost savings from the synergies related to the Embarq acquisition. They could also experience an accelerated loss of voice access lines if the recession lingers which will put downward pressure on revenues and cash flow.Finally, CenturyLink may forgo share repurchases if they decide to further pay down debt to maintain or improve their credit rating and/or accumulate cash to fuel additional M&A activity. **Thank you for sharing your thesis on CTL, Barry. **Happy to participate. **Disclosure:** Barry Barker currently owns a long position in CTL personally. ** [Read more High Conviction Picks »](http://seekingalpha.com/tag/high-conviction)**If you are a fund manager and interested in doing an interview with us on your highest conviction stock holding, please [email Rebecca Barnett](mailto:[email protected]) . See also [Brett Weisel Highlights Opportunity in California Real Estate Foreclosures](http://seekingalpha.com/article/192630-brett-weisel-highlights-opportunity-in-california-real-estate-foreclosures?source=nasdaq) on seekingalpha.com | High Conviction: A Regional Telco With 8% Dividend and Strong Growth Prospects | News | SeekingAlpha | Unknown | 0.0012 | 17.3812 | 17.4723 | 17.4693 | 17.9539 | 17.9539 | 17.9542 | 17.9539 | 17.9542 | 17.9542 | 17.9542 | 18.0179 | 17.7745 | 17.8248 | 18.0056 | 18.3504 | 18.4201 | 19.0451 | 19.2234 |
NRP | Natural Resource Partners L.P. | Energy | Coal Mining | https://www.nasdaq.com/articles/strategy-current-market-time-cut-back-limbs-and-feed-roots-2010-03-11 | 2010-03-11 01:45:00 | KGC|Markets|ERF|RGLD|TIP|BCE|PFL|TBT | ** [Joseph L. Shaefer](https://www.nasdaq.com/articles/www.stanfordwealth.com) submits:**This is the market's "strong season." Flush with cash from bonuses (some ill-gotten, some well-deserved), New Year raises (small for most of us in the real world, absurd for those who pump out the "news" on Wall Street) and new-found stock gains for the past 12 months, the market "should" do well in the rosy glow of all this for another month or two.But. Even as a tree given artificial growth stimulants grows ever fuller, with new limbs, branches and pretty bright green leaves, if the roots and trunk haven't had time to grow in circumference apace, it gets weaker. It still **looks** better than it did before all that artificial stimulus, but it is now more subject to the vagaries of wind, rain, lightning and infestation. You must strengthen the roots and trunk, or the tree may be prettier but it is also weaker and more susceptible to unexpected damage. That's the roots and trunk of the tree; the **real** economy. Government can paste on some phony branches and leaves, as they do in election years, or they can take our money to pump a bunch of artificial stimulants that green up the tree but do nothing for the root system or the trunk. It can provide artificial stimulants like $8,000 for first-time home buyers, $6,500 for any home-buyer, $4,500 to stimulate car sales, and sundry social engineering like 30% credits for installing various energy-saving devices, but that is just something the government has taken from one set of citizens to sprinkle around the tree to benefit other citizens.That doesn't mean that one shouldn't take advantage of these credits. If you happen to be buying any of these items right now, your timing is propitious, albeit through no planning or particular brilliance of your own. Besides, that $8000 pales next to the bought-and-paid-for votes to give $700 billion to Wall Street. ("We search for the guilty in order to find and punish the innocent…") I happen not to consider myself among the group "eligible" for any of this largesse. Of course, if I were a Wall Street type, I would have considered myself not only eligible but entitled. Since we are building a vacation home and need a car to leave there, I could have gamed the system and bought any old clunker so I could turn in "my" old car (owned a month or so) and gotten the $4,500. Or I could have made the vacation home our primary residence for a couple years and gotten the $6,500. ( Our business is quite fungible and can be run from just about anywhere.) B ut both seemed a little too smarmy to me. If I can afford to build a vacation home, why take money from my fellow citizens to do so? Did anyone bother to tell the overpaid architects of these stimulus plans there was a recession outside The Beltway?I don't care who inside The Beltway says it's all over now and things are just hunky-dory. It doesn't matter what you call it: if it looks like a duck and it waddles like a duck and it quacks like a duck, it's a duck. Are we still in a recession? If you use the commonly accepted definition of two quarters of "negative growth" (an obtuse term economists use to avoid saying the words "a loss") well, then, it appears we are out of the woods. Lots of pretty leaves fluttering in the breeze. **effects** What to do? I think it's time to trim back the tree. Since the government is too clueless to do so, I say it's time to protect your portfolio and mine from the worst of possible events - wind damage, lightning storms, a hurricane, etc. If you have great profits, which by now you may, I believe you might want to take some profits off the table and plant the cash around your **own** money tree. (Cash is a great fertilizer for the root system…) For what it's worth, here's what we are doing. We have already sold about half our positions in our most favored industries of energy, water, metals and mining, and agriculture. If we own companies with PEs higher than their internal rate of growth, we are now pruning them from our investment tree, as well. If a company is growing revenues and earnings at 9% a year and selling at 30 times earnings, it's no longer welcome in our portfolios. If we are correct and the "market tree" is becoming increasingly unstable, we will buy these favorites back at a cheaper price after a correction. If we're wrong, there will always be another opportunity. (If you don't believe it, just watch what happens when you fail to buy one of your broker's Can't Miss Gotta Buy Now Deal Of A Lifetime recommendations -he'll be right back next week with An Even Better One!) That doesn't mean we are out of the market. But we are now in securities that will benefit from volatility and toppiness, that will increase in value if interest rates rise and bonds therefore decline in value, and in lower-PE, PS and BV ratio income-producing firms whose cash flow continues through good markets and bad.Against the probability that yields will rise and bonds will fall we've bought the iShares TIPS Bond ETF ([TIP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TIP&selected=TIP)) ), some floating-rate senior note funds like [[NSL]] and [[PFL]], and the ProShares UltraShort 20+ Year Treasury ETF ([TBT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TBT&selected=TBT)) ) - yes, we do understand the inherent daily volatility of leveraged ETFs.The way we've chosen to play the possibility of extreme volatility is via the iPath S&P 500 VIX ETF ([VXX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=VXX&selected=VXX)) ). Since most people will wait to sell until all others are selling, we're betting, via VXX, that volatility will rise.[NRP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NRP&selected=NRP) [ PVR](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PVR&selected=PVR) [ ERF](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ERF&selected=ERF) [ PGH](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PGH&selected=PGH) [ ATLIF.PK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ATLIF.PK&selected=ATLIF.PK) [ NZT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=NZT&selected=NZT) [ FTE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FTE&selected=FTE) [ DT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=DT&selected=DT) And we have kept a couple precious metals / crisis protection securities like Goldcorp ([GG](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GG&selected=GG)) ), Kinross ([KGC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KGC&selected=KGC)) ), and Yamana Gold ([AUY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=AUY&selected=AUY)) ), as well as the royalty firms Franco-Nevada ([FNNVF.PK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FNNVF.PK&selected=FNNVF.PK)) ), Royal Gold ([RGLD](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=RGLD&selected=RGLD)) ) and Silver Wheaton ([SLW](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SLW&selected=SLW)) ).This leaves us with slightly more than 50% in cash. We'll bury that near the roots of our tree, keeping it handy for the aftermath of any storm…**Author's Disclosure**: We and / or clients for whom these investments are appropriate, are long NRP, PVR, ATLIF.PK, NZT, FTE, TBT, TIP, NSL, PFL, VXX, GG, KGC, FNNVF.PK, RGLD and SLW - and a very large cash cushion. **The Fine Print**: As Registered Investment Advisors, we see it as our responsibility to advise the following: We do not know your personal financial situation, so the information contained in this communiqué represents the opinions of the staff of Stanford Wealth Management, and should not be construed as personalized investment advice.Also, past performance is no guarantee of future results, rather an obvious statement if you review the records of many alleged gurus, but important nonetheless - for example, our Investors Edge ® Growth and Value Portfolio beat the S&P 500 for 10 years running but did not do so for 2009. We plan to be back on track on 2010 but then, "past performance is no guarantee of future results"! It should not be assumed that investing in any securities we are investing in will always be profitable. We take our research seriously, we do our best to get it right, and we "eat our own cooking," but we could be wrong, hence our full disclosure as to whether we own or are buying the investments we write about. See also [U.S. and China Macroeconomics: Brad De Long, Please Elaborate](http://seekingalpha.com/article/194713-u-s-and-china-macroeconomics-brad-de-long-please-elaborate?source=nasdaq) on seekingalpha.com | Strategy for the Current Market? Time to Cut Back the Limbs and Feed the Roots | News | SeekingAlpha | Unknown | 0.0012 | 26.8205 | 27.0501 | 27.0635 | 27.201 | 27.2004 | 27.1999 | 27.1999 | 27.2004 | 27.2004 | 27.2004 | 27.1269 | 27.3006 | 27.243 | 27.0272 | 26.9324 | 26.9251 | 26.1256 | 25.1366 |
CLNE | Clean Energy Fuels Corp. | Utilities | Natural Gas Distribution | https://www.nasdaq.com/articles/commodities-end-thursday-mixed-china-worries-take-hold-2010-03-11 | 2010-03-11 03:28:00 | Markets|XOM | Commodities ended Thursday trading higher, with oil and gold closing in the black.Gold for April delivery reversed early losses, spurred by fear of Chinese tightening measures, to close up 10 cents at $1,108.20 an ounce. Copper futures also finished higher as the metal received a boost after Chile, the world's largest producer of the metal, was hit by aftershocks to last month's earthquake. Copper for May delivery rose 1.2 cents, or 0.4%, to end at $3.38 a pound at the New York Mercantile Exchange.Meanwhile, crude for April delivery rose 2 cents to settle at $82.11 a barrel on the New York Mercantile Exchange.Crude had come under some pressure earlier in the day as Chinese economic reports fueled concerns that Beijing might further tighten access to money to cool growth, leading to less demand from one of the world's biggest oil consumers.In energy stocks, Clean Energy Fuels ([CLNE](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CLNE&selected=CLNE)) ) reported a narrower-than-expected fourth-quarter loss which drove investor interest in the stock on Thursday.For the latest fourth quarter, net loss was $1.9 million, or $0.03 a share, compared with a loss of $23.7 million, or $0.49 a share, last year. Total revenues for the quarter rose 49% to $42.2 million, driven by a 58% increase in gasoline gallon equivalents sold.Clean Energy shares were up 17.39%, or $3.36, to $22.68.Also Thursday, Exxon Mobil ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) said it will increase its capital spending nearly 4% this year to $28 billion as it evaluates new fields around the world. At the same time, executives cautioned that the global economy remained unsteady.Exxon Mobil shares were down 0.25%, or $0.16, to $67.05.Heating oil for April rose $0.01 to $2.11 a gallon, while gasoline for the same month fell $0.01 to $2.27 a gallon. Natural gas fell 2.54%, or $0.11, to close at $4.43.Silver futures were up 0.75%, or $0.12, to close at $17.14. Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited. | Commodities End Thursday Mixed As China Worries Take Hold | News | MTNewswires | Unknown | 0.0012 | 19.6664 | 19.6144 | 19.2167 | 19.9017 | 19.9017 | 19.9029 | 19.9029 | 19.9029 | 19.9029 | 19.4746 | 21.2828 | 22.6315 | 22.3092 | 21.8307 | 21.5184 | 21.5 | 21.5938 | 21.451 |
PEB | Pebblebrook Hotel Trust | Real Estate | Real Estate Investment Trusts | https://www.nasdaq.com/articles/reit-ipo-backlog-exceeds-3-billion-2010-03-12 | 2010-03-12 12:29:00 | Financial Advisors|TRNO | There are 11 real estate investment trust initial public offerings totaling more than $1 billion that are backlogged with the **Securities and Exchange Commission** . The slowdown stems from a range of factors, including bankers rushing companies into registration prematurely and uncertainty over proposed blind pool offerings, according to panelists at a **New York University** -sponsored REIT symposium last week. **Debra Cafaro** , president and ceo of **Ventas** , **Inc** ., cited the banker factor. **Michael Graziano** , managing director at **Goldman Sachs** , agreed that tapping the equity market is expensive. Three of the planned IPOs are for blind pool REITs. Their window may have already passed, speculated **Michael Kirby** , principal at **Green Street Advisors** . "They have to spend the money fast in a very brief moment in time," he explained. "We won't see it again for another decade."A number of blind pool deals were completed since the IPO of **Terreno Realty Corp.** in November. That transaction was followed by **Pebblebrook Hotel Trust** and **Chesapeake Lodging Trust** . The success of those deals, however, is being attributed to the executives at the companies."Chesapeake was ex-Highland Hotel guys who sold their company," explained **Rod Petrik** , managing director, at **Stifel Nicolaus** , in a call following the conference. "Both had a background that was current and investors trusted it."Two of the three blind pool IPOs are still trading under their initial sale price. Pebblebrook ([PEB](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PEB&selected=PEB)) ) traded at $21.05 on Thursday, up from $20 at its launch date. Terreno ([TRNO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TRNO&selected=TRNO)) ) and Chesapeake ([CHSP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CHSP&selected=CHSP)) ), however, were at $19.45 and $19.74, respectively.Despite the uncertainty over blind pools, **Murray McCabe** , managing director at **J.P. Morgan** , expects more REITs to tap the public markets this year. He explained that the key points in the process are to, "set yourself apart" and "have an actionable business plan." -- **J.W. ** Copyright © 2010 Institutional Investor | REIT IPO Backlog Exceeds $3 Billion | News | Real Estate Finance | Unknown | 0.001 | 21.4241 | 20.948 | 20.8656 | 21.4351 | 21.3086 | 21.3859 | 21.3382 | 21.2853 | 21.1426 | 21.1426 | 21.1426 | 21.1436 | 21.1436 | 21.1144 | 20.9564 | 21.3755 | 20.9598 | 20.1753 |
JACK | Jack in the Box Inc. | Consumer Discretionary | Restaurants | https://www.nasdaq.com/articles/opportunities-green-lifestyle-stocks-2010-03-15 | 2010-03-15 02:28:00 | YUM|Markets | Last month, in the midst of what was a dreary and largely snow-free February outside of Boston, my wife and I decided to break the winter monotony one day by bringing our two kids, Lila, age two, and Phoebe, five months, to the mall. The day was a success for Lila especially because a local Italian ice shop was giving away free samples and she got a pair of Thomas the Tank Engine rain boots.But a problem with the trip to the mall was the food options. Nowadays, you generally have two options at a mall--food court fast food or upscale casual places that end up being too risky (and too quiet!) to risk spending 90 minutes in with a temperamental toddler and an unpredictable infant. So we tried a recently opened location of Chipotle Mexican Grill. Chipotle is a chain of Tex-Mex "fast casual" restaurants that started in 1993 and grew under the guidance of McDonald's, which spun Chipotle off in an IPO four years ago.We walked up to the counter and were greeted by a chipper employee who waited while we perused the small (management would say focused) menu, consisting of burritos, tacos, quesadillas and salads with the option for each of steak, chicken, pork and barbacoa, a spicy slow-roasted beef.Lila isn't a picky eater, but with a two-year-old you never know, so my wife Jeanne and I have a policy of getting different meals in case Lila decides she'd prefer something else. So Jeanne got the steak burrito, I got the barbacoa burrito and we got Lila the kid's chicken quesadilla (Phoebe, still nursing, gets her meals separately.) The employee who greeted us started making our meals, passing the dish to another person who added the toppings we wanted and who then passed it on to the cashier.Two things immediately struck me about the restaurant, it had none of the stale, sometimes rancid smell of old frying oil fast food joints often acquire, because there is very little deep-frying going on, and the workers seemed happy. Lila was tickled by the little brown bag of tortilla chips that accompanied her quesadilla. "Mommy, you got me a treat!" she exclaimed and promptly ate up her lunch, saving some chips to snack on as we continued through the mall, both of which pleased Jeanne immensely.For our part, we both quite liked the food, the meat was tasty and the lettuce was crisp and it all seemed a fine value for around $7 for each of the adult meals.While it was the first time I ate at a Chipotle, I admit I was already familiar with the company. It's one of the highest profile companies that are looking to offer humanely raised meat in their restaurants, along with growth hormone-free dairy products and organic beans.Chipotle calls it "Food with Integrity," which they define as sourcing from cattle, cows and pigs that are pastured, vegetarian fed and free of antibiotics and growth hormones. As parents, we look to avoid giving our kids food that isn't organic or which doesn't come from hormone-free and antibiotic-free animals (I won't digress into the details why, but I'd suggest reading "Fast Food Nation" by Eric Schlosser and "The Omnivore's Dilemma" by Michael Pollan for a disturbing and revealing look at our mainstream food supply).Plus, as someone who spent many summers in my youth helping out on my uncles' dairy farms in Ireland, I feel strongly that animals need to be treated with respect and pastured when possible, so much so that instead of supermarket meat, we've just started getting deliveries from Vermont's Houde Family Farm, a small farm that will regularly deliver meat from humanely raised, hormone-free livestock. In Chipotle's case, all of its pork and chicken meets the chain's stated natural guidelines and at locations here in Massachusetts, all of its beef also meets the goal (the level is 60% nationally, expected to grow to 70% by 2011).There is another reason I bring up Chipotle today. It's a heckuva stock. Since early January, shares have surged 23% from 90 to over 110, and are primed to rise further, having clearly and easily held technical support along the 50-day and 200-day moving averages in recent months. Charts indicate there may be some resistance around 130, but it looks like it will be mild.From that point, there should only be a little selling pressure from people who bought around the all-time high of 150, touched right before the economic crisis hit in 2008. Mutual funds have added nicely to their already strong positions in Chipotle lately. That translates into excellent share support in rough markets, while a $100 million share buyback plan in 2010 will further boost the stock.Beyond technical strength, I'm a believer that strong fundamentals beget strong technicals, and Chipotle supports that argument. The chain reported a sales increase of 19% in 2009 to $1.5 billion, including decent same-store sales gains of 2.2%. The company, with 986 locations right now, plans to open another 120 or so this year.It's also looking to build on its menu through testing breakfast fare at its Dulles airport location, and a possible kids' menu (it turns out the kids' menu that gave my Lila such enjoyment is actually a test-run for possible wider rollout). Management is still evaluating, but believes it sees signs the kids' menu is producing outsized gains in sales and check size. Compare that to competitor Qdoba Mexican Grill, owned by Jack in the Box ([JACK](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=JACK&selected=JACK)) ), which saw same store sales fall 1.7% in its most recent quarter on top of a 1.1% slip the prior year period. Cheap Mexican food competitor Taco Bell of Yum Brands ([YUM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=YUM&selected=YUM)) ), draws in the late night munchies crowd with its 99-cent Volcano Tacos, but pulls in $500,000 fewer sales per location annually than Chipotle.I detailed Cabot Green Investor subscribers all about Chipotle in our March issue, out earlier this month. We usually cover alternative energy and technology stocks in CGI (and our other stock pick this month is a crucial player in the growing LED market whose shares are taking off--and no, it's not Cree, which was already in the Green portfolio and is up 23% for us this year).But the world of Green also includes fascinating lifestyle growth plays and we occasionally leap into the exceptional names we're seeing in order to make profits (CGI subscribers are also enjoying an 11% gain in another Green-related food stock we added to the portfolio on February 26).Contrary to what many experts predicted entering the most recent recession, Green lifestyle spending, especially food and drink, hasn't dropped in response to the poor economy--it has simply slowed it growth, and that's in sectors where overall sales have fallen. That strength has shown itself in share performance: A look at the subsector of Green food and beverage related stocks we track for Cabot Green Investor reveals that every stock in the subsector has outpaced the S&P over the past year.I recently dug through all the polls and surveys I could find from 2009 and 2010. I estimate from those that about one in 10 consumers chooses to patronize a company (or chooses to avoid it) based on its environmental reputation. That's not a huge percentage, but it's enough to give some companies an edge--after all, when it came to a decision that day between McDonald's, Chik-Fil-A or Chipotle, the decision had essentially already been made for me and my wife. For the other 90%, there's the taste of the food, and Chipotle more than holds its own there. No stock is buy-and-forget-about, but Chipotle presents a nice opportunity to make money right now and for the foreseeable future.All the best,Brendan Coffey | Opportunities in Green Lifestyle Stocks | News | Brendan Coffey | Unknown | 0.0012 | 22.763 | 23.0811 | 23.0959 | 23.123 | 23.123 | 23.123 | 23.123 | 23.123 | 23.123 | 23.123 | 22.9507 | 22.9169 | 23.1285 | 24.5364 | 24.5433 | 24.2907 | 23.6574 | 25.2773 |
BRY | Berry Corporation | Energy | Oil & Gas Production | https://www.nasdaq.com/articles/chinese-behemoth-not-so-secretly-buying-worlds-oil-reserves-2010-03-15 | 2010-03-15 05:28:00 | PAA|Markets | Here's a brief three-part history and economics primer, followed by some advice on how to make money from it. **The Past** Nearly a half-century ago, on Dec. 14, 1960, the United Nations passed Resolution 1514, a declaration on the granting of independence to colonial countries and peoples. Though far less eloquent than Thomas Jefferson's Declaration of Independence, the United Nations' missive is nevertheless a profound statement in support of liberty and the right of self determination."Recognizing the passionate yearning for freedom…convinced that the continued existence of colonization prevents the development of international economic cooperation, … [and] affirming that peoples may, for their own ends, freely dispose of their natural wealth and resources," the declaration holds that "the subjection of peoples to alien subjugation, domination and exploitation constitutes a denial of fundamental human rights."**The Present** Countries don't colonize anymore. Today, if the British Empire needs tea, tobacco or beaver pelts, it buys them for cash rather than sending the Royal Navy. If the French need rubber, ivory or timber, they import them rather than functionally enslaving the Congo.And if Red China needs oil, it doesn't send Chairman Mao's army (Proud motto: Every man a private), it sends a state-owned company.That company is **Cnooc ([CEO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CEO&selected=CEO)) )** . And it is on the march. Recently, Cnooc -- China National Offshore Oil Company -- sealed a ten-figure deal to acquire a third of the massive Tullow find in Uganda, a region thought to contain several billion barrels of oil. Cnooc is also developing a 2.5 billion-barrel field in Iraq. And late last year Cnooc inked a deal with Venezuela to gear up production in a field in the eastern part of that country.Now, after several British firms say they've found oil in an area north of the Falkland Islands in the South Atlantic, Cnooc has spent $3.1 billion to buy a stake in nearby Argentina, Bolivia and Chile. **The Future** China's growth targets for the foreseeable future are off the charts. For 2009, when the rest of the world was mired in recession, China's economy grew +8.7%, besting even the government's own optimistic targets. This year, growth is expected to come in at a sizzling +9.6% before "decelerating, in the words of The Economist Economic Intelligence Unit, to a mere +8.1% growth in 2011. Some observers have suggested that sustaining an extremely high level of economic growth is necessary to contain civil unrest.They have a point. The Chinese government may not afford its citizens many human rights -- the latest U.N. report on the subject called conditions there "poor and worsening" -- but the people are absolutely demanding improved economic conditions. That means great wealth for a few (Forbes says China has 89 billionaires) and it means modest affluence for scores of millions. Result: Cars. Over the next 40 years, the world's automotive fleet will quadruple. In 2050, China will have more vehicles on its roads than there are cars on the planet today. **How to Make Money from It** Cnooc, which is the Chinese company that deals with oil outside of China's borders, isn't going to quit buying up crude reserves anytime soon. And though it has inked deals with governments directly -- Venezuela, to name one -- it mostly deals with companies. The Argentine deal, for example, involved Cnooc paying $3.1 billion for a stake in a company called Bridas Energy Holdings. It also paid dearly for a sizable stake in Tullow's find. The clear fact is that this company is unconstrained by geography or even economy. It's going to buy oil wherever it can for as much as it takes. The smart money bet is that Cnooc will continue to develop fields in Africa and South America and that it will keep its finger on the pulse of Iraq with an eye toward expanding whenever possible. No one should be at all surprised if Cnooc begins to eye the possibilities of deepwater wells in the Gulf of Mexico or even to start buying up U.S.-based independent producers such as **Berry Petroleum ([BRY](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BRY&selected=BRY)) )** or **Plains Exploration & Production ([PAA](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=PAA&selected=PAA)) )** .While the era of colonization is over, the age of the corporation is here and here to stay. Cnooc, which is partially public-owned and whose ADRs are traded on the NYSE under the ticker CEO, is setting up corporate colonies all over the world with three facts in mind: There's only so much oil left. The Chinese government wants it. The Chinese government will pay for it.Growing Chinese control over the world's natural resources is inevitable. Investors who position their portfolio to benefit from these large government actions appear to be putting themselves in a position to profit, either from ownership in Cnooc or by taking positions in companies with assets Cnooc needs.[Image](https://www.nasdaq.com/sites/acquia.prod/files/ARP-Inline-Image.png) Disclosure: Andy Obermueller does not own shares of any security mentioned in this article.Andy ObermuellerEditor: Government-Driven InvestingDisclosure: Andy Obermueller does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | The Chinese Behemoth That is (Not-So) Secretly Buying Up the World's Oil Reserves | News | Andy Obermueller | Unknown | 0.0012 | 29.1976 | 29.6599 | 29.5926 | 29.5816 | 29.5816 | 29.5816 | 29.5816 | 29.5816 | 29.5816 | 28.7352 | 28.8757 | 29.1889 | 29.3907 | 29.2618 | 29.3489 | 28.7013 | 28.1445 | 30.5595 |
XRX | Xerox Holdings Corporation | Technology | Computer peripheral equipment | https://www.nasdaq.com/articles/company-cant-stop-printing-profits-2010-03-19 | 2010-03-19 05:55:00 | Markets | During the past few years, companies have sought to cut all non-essential expenses. Office equipment was among the many items that saw a sharp slowdown in demand. But like all other hard goods, copiers and the like tend to wear out over time. So as the economy moves into recovery mode, a replacement cycle can't be too far off.This cycle should play right into the hands of **Electronics for Imaging (Nasdaq: EFII)** , which provides the printer engines that go into high-end machines offered by companies like **Canon ([CAJ](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CAJ&selected=CAJ)) )** , **Xerox ([XRX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XRX&selected=XRX)) )** and Epson. These companies are starting to see a nice turnaround in demand that is in turn fueling a turnaround for EFI. It's fair to wonder why those esteemed firms wouldn't simply develop their own printer engines. The answer lies in EFII's massive R&D spending, which has enabled the company to stay on the leading edge of printer capabilities. EFII knows that those customers are great at selling, and it prefers to keep it simple by focusing on product advancements that help to maintain its cutting edge reputation.EFII routinely spends more than $100 million on annual R&D -- and that accounted for nearly 25% of sales last year. The payoff: EFII is rolling out a range of new products in both its inkjet division (42% of sales) and Fiery printing engines division (47% of sales). Fiery is the brand name for EFII's state-of-the-art printer systems.EFII was duly humbled by the recent downturn after many years of profitable growth. But if history is any guide, a solid rebound could be in the offing. Back in 2002, the company saw sales fall from $518 million to $350 million. As the economy rebounded in the ensuing decade, sales steadily rebounded to $621 million by 2007. But they fell back again in 2008, and quite sharply in 2009, all the way down to $401 million.Yet a snapshot of recent trends indicates that we're entering another rebound phase. Quarterly sales, which fell to the $90 to $95 million range in the first two quarters of 2009, recently moved back north of $100 million -- to $114 million in the most recent quarter. And even though sales are likely to be soft in the seasonally weak March quarter, they should still be handily above year-earlier levels. EFII looks set to post solid double-digit quarterly sales gains in 2010, even as many companies remain capital-constrained. As credit opens up for small and medium-sized businesses down the road, EFII looks set for additional double-digit sales gains in 2011 as well.EFII has been using the downturn to its advantage by buying back massive chunks of stock and sharply reducing expenses. The company had 68 million shares outstanding in 2007, but has since removed 20 million shares from the market. Moreover, operating expenses fell by more than $200 million in 2009. If the share count had remained static, EFII would likely earn around $0.50 a share in 2011 (assuming sales grow +15% this year and +10% in 2011). The reduced share count would propel that figure to around $0.70. The other appeal for investors is the likely floor in place for the stock's price. Shares trade for right around book value and a little more than two times cash. The shares would likely find support in the $10 range, even if sales growth proves slow to materialize. As noted above, first quarter results might appear weak on a sequential basis. Yet management is likely to note on the conference call that sales trends for the seasonally important second and third quarters are extending the promising trend seen in the December quarter. A bullish outlook from management could be the catalyst to send shares higher. With modest downside, and potentially impressive upside toward the $20 mark, the risk/reward on EFII looks quite appealing.-- David StermanContributorStreetAuthorityDisclosure: David Sterman does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | This Company Can't Stop Printing Profits | News | David Sterman | Unknown | 0.0013 | 9.86973 | 10.1093 | 9.94214 | 9.9 | 9.9 | 9.9 | 9.9 | 9.9 | 9.71053 | 9.64963 | 9.6163 | 9.6126 | 9.60994 | 9.53045 | 9.52728 | 9.87202 | 9.94001 | 10.2281 |
GES | Guess', Inc. | Consumer Discretionary | Apparel | https://www.nasdaq.com/articles/correction-could-come-today-2010-03-19 | 2010-03-19 07:31:00 | XAU|Markets|FDX|MMM|NKE|XLE|CAT|SPX|JPM|BA | ****The Dow Jones Industrial Average ( ** [DJI](http://moneycentral.msn.com/detail/stock_quote?symbol=dji)** ) closed higher again yesterday -- its eighth straight gain. Gains were more confined to the blue chips than the broad market, and focused on the Dow stocks, which closed at a 17-month high.Boeing ( ** [BA](http://moneycentral.msn.com/detail/stock_quote?symbol=ba)** ) was the top performer in the Dow with a gain of 2.1%, but there were other strong performers in the index, too. DuPont ( ** [DD](http://moneycentral.msn.com/detail/stock_quote?symbol=dd)** ) gained 1.6%, and 3M ( ** [MMM](http://moneycentral.msn.com/detail/stock_quote?symbol=mmm)** ) rose 1.8%. But Caterpillar ( ** [CAT](http://moneycentral.msn.com/detail/stock_quote?symbol=cat)** ) was down 0.27%, and that held back gains. FedEx ( ** [FDX](http://moneycentral.msn.com/detail/stock_quote?symbol=fdx)** ), Nike ( ** [NKE](http://moneycentral.msn.com/detail/stock_quote?symbol=nke)** ) and Guess ( ** [GES](http://moneycentral.msn.com/detail/stock_quote?symbol=ges)** ) announced better-than-expected earnings.Bank of America ( ** [BAC](http://moneycentral.msn.com/detail/stock_quote?symbol=bac)** ) fell 1.5%, and JPMorgan Chase ( ** [JPM](http://moneycentral.msn.com/detail/stock_quote?symbol=jpm)** ) fell 1%, as the financial stocks were weak over concerns that Congress would propose new financial regulations.But, overall, there was little in the way of corporate news to have impact on the broad market.Consumer prices in February were flat, and initial jobless claims fell last week. But there are still storm clouds over Greece, and the euro reflected that as it fell versus a basket of other currencies. Despite assurances by the EU, and especially Germany, worries continue that the significant amount of debt due in April will cause an economic collapse. Greece continues to resist help from other countries and the EU.Materials stocks fell 0.7% as the U.S. dollar rose slightly due to the expectedly flat consumer price data. At the close, the Dow was up 46 points to 10,779, the S&P 500 ( ** [SPX](http://moneycentral.msn.com/detail/stock_quote?symbol=spx)** ) fell slightly to 1,166, and the Nasdaq ( ** [NASD](http://moneycentral.msn.com/detail/stock_quote?symbol=nasd)** ) rose 2 points to 2,371.The NYSE traded 942 million shares with advancers ahead of decliners by 2-to-1. The Nasdaq crossed 566 million shares and breadth there favored advancers by 3-to-2.The April crude oil contract fell more than $1 overnight over worries about Greece, but closed only 64 cents lower, at $82.29 a barrel, on a New York day-to-day price. The Energy Select Sector SPDR ( ** [XLE](http://moneycentral.msn.com/detail/stock_quote?symbol=xle)** ) fell 87 cents to $58.18.March Gold rose $3.40 to $1,127.40 an ounce on a flight to safety over the Greek economic situation, and the PHLX Gold/Silver Sector Index ( ** [XAU](http://moneycentral.msn.com/detail/stock_quote?symbol=xau)** ) fell 1.17 points to 168.60. One trader was quoted by the Wall Street Journal as saying, "Gold at the moment is being bought not as a hedge against inflation, but as a hedge against currency difficulties."**What the Markets Are Saying** Each day the market slogs along to new highs, and each day momentum seems to be slowing, only to be followed the next day by another new high. But yesterday, the upside was confined to the better-quality stocks. Volume contracted to one of the lowest of the year, which is unusual for a day before a [quadruple witching expiration](http://www.optionszone.com/market-commentary/options-activity/2010/03/quadruple-witching-options-expiration.html) when four major classes of options go off the board. There have been many reasons proposed as to why the volume has been consistently low, but one that seems most logical is that the public is, by and large, out of the market. And without public participation, we are deprived of the cushion against wild trading that steady public buying provides.A week ago, we learned that mutual fund cash is down to only 3.6%, and much of that is derived from the inflow of public sources of funds. As evidence of the impact of the public's purchasing power, consider the year-opening rally that resulted from the flow of cash from IRAs and other public pension sources.Now without the public "cushion," stocks are subject to sharp sell-offs since the market is in the hands of institutions that sometimes pull the trigger en masse and drive prices wildly lower.S&P analyst Mark Arbeter noted recently that the major swings in the past six months are unusual in that they have been devoid of the usual backing and filling at key [resistance and support areas](http://www.optionszone.com/learn-more/john-lansing/chart-analysis-resistance-and-support-levels.html) . "In a sense, the market has become very one-dimensional at times with the uptrends and downtrends very strong and unrelenting. In our view, there seems to be a lot of hot money jumping into and out of the market, which is great for the nimble trader, but a nightmare for the rest of us."With the expiration of major options contracts today, it is likely that the current string of advances will come to an end. Let's hope that the correction is not of the burn-and-pillage variety, but of the backing-and-filling type. A correction of modest proportions with the usual backing and filling would be welcomed since it would bring prices back to more normal levels and establish a platform for a more orderly advance to new highs. **Today's Trading Landscape****Earnings to be reported include:** Perry Ellis.There are no significant economic reports due today. **Related Articles:** - [Gold is Back](http://www.optionszone.com/trading-picks/trade-of-the-day/2010/03/stock-picks-spdr-gold-shares-gld.html) - [4 Lucky Option Trades](http://www.optionszone.com/trading-picks/options/2010/03/lucky-option-trades-orly-q-ul-ryaay.html) - [How Wicked is the Quadruple Witching?](http://www.optionszone.com/market-commentary/options-activity/2010/03/quadruple-witching-options-expiration.html) **Top 5 Stocks for 2010**These must-have companies are just hitting their stride and are poised to outperform the market in the short-term. Investing pro Louis Navellier reveals his top five picks for 2010 in this free stock guide -- [download your FREE copy here](http://www.optionszone.com/order/?sid=XH3254) . | Correction Could Come Today | News | Unknown | Unknown | 0.0013 | 45.7668 | 46.894 | 47.5597 | 47.4493 | 47.4493 | 47.4493 | 47.4493 | 47.515 | 47.1093 | 47.0282 | 47.0317 | 46.9217 | 46.9258 | 46.8028 | 46.7389 | 47.903 | 47.1498 | 47.0638 |
SWI | SolarWinds Corporation | Technology | Computer Software: Prepackaged Software | https://www.nasdaq.com/articles/microcap-tech-stock-yielding-7-2010-03-19 | 2010-03-19 12:20:00 | Markets|INTC|MSFT|CLMB | Tech stocks are notoriously stingy dividend payers. Typically, these companies use earnings to fuel growth and to keep up with the competition, not to pay shareholders. In fact, the tech-rich Nasdaq Composite Index yields just 0.8% -- less than half of what the S&P 500 yields.There is a small group of tech stocks that do pay nice dividends. These companies aren't from some obscure corner of the tech world. In fact, they're software companies whose business models allow them to afford both growth and distributions to shareholders. In the case of this little company, moreover, shares haven't fully recovered from the beating they took in 2008, and its earnings are just beginning to. Despite the weaker results, the company hasn't lowered its dividend, and earnings still support it. **Wayside Technology Group (Nasdaq: WSTG)** distributes, sells and markets software from, for example, **Intel (Nasdaq: INTC)** , **Quest (Nasdaq: QSFT)** and **SolarWind's ([SWI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWI&selected=SWI)) )** , to software development and information technology professionals. The $42 million New Jersey-based company has been around since 1982 and has been listed on the Nasdaq since its 1995 initial public offering.Wayside pays quarterly distributions that have increased +50% since 2003. The current distribution is $0.15 and has been at that level since 2007, giving the company a forward and historical yield of 7.0%. The company's 2009 earnings of $0.65 per share cover the dividend.In 2009, Wayside's net income totaled $2.9 million, down -9.5% from 2008. This was due to a -15.9% drop in sales. Wayside says that the economic downturn was causing current and potential customers to delay or reduce technology purchases, which resulted in longer sales cycles and slower adoption of new technologies.But there's a silver lining. Fourth-quarter 2009 sales topped the same period in 2008, increasing +6%. This was the first time quarter-over-quarter sales rose in 2009. In addition to help from the economy, Wayside's management plans to grow the business by investing in information technology and marketing, and expanding its sales team and software offerings.The company should have no problems finding the capital to implement its strategy. Wayside has a solid balance sheet . It has no debt, $3.44 in cash per share, and a book value of $5.20 per share.The company's shares have underperformed the market during the past year, setting the stage for a possible comeback. While the S&P has gained +55% during the past twelve months, Wayside has only gained +32%. But since the beginning of the year, it's begun to outperform, returning +10% since January 1st, compared with the S&P 500's +4%.Despite these recent gains, the shares are still undervalued -- perhaps because no one follows this company. Wayside's current dividend yield of 7.0% is not only about +15% higher than its five-year average, but also more than +300% higher than the S&P 500's current average yield of 1.8. Its price-to-earnings ratio (P/E) of 13.5 is -35% lower than the S&P 500's average P/E of 21 and -20% lower than its five-year average P/E of 17.One caveat: Wayside is a small company whose shares are thinly traded, which could lead to volatility. The company's average daily volume is just 6,000 shares -- **Microsoft (Nasdaq: MSFT)** , by contrast, trades about 50 million shares daily. But if you're in the market for a small-cap dividend payer with upside potential, then you should consider this high-yielding tech stock. Anthony HaddadStaff WriterStreetAuthorityP.S. If you're looking for both high yields and enormous capital gains, then you need to learn more about our "Income Security of the Month" for March 2010. With a strong history of paying increasing dividends, this stock is currently yielding an eye-popping 10.2%. That's double the 10-year Treasury yield, nearly three times what "AAA"-rated corporate bonds pay you and five times what you get from the S&P 500!Disclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | A Microcap Tech Stock Yielding 7% | News | Unknown | Unknown | 0.0013 | 21.1923 | 21.3326 | 21.0146 | 20.7974 | 20.7476 | 20.7548 | 20.7 | 20.6997 | 21.0053 | 21.0064 | 21.0064 | 20.9604 | 20.9604 | 20.3589 | 21.3449 | 21.6862 | 21.7052 | 24.1644 |
CLMB | Climb Global Solutions, Inc. | Technology | Retail: Computer Software & Peripheral Equipment | https://www.nasdaq.com/articles/microcap-tech-stock-yielding-7-2010-03-19 | 2010-03-19 12:20:00 | SWI|Markets|INTC|MSFT | Tech stocks are notoriously stingy dividend payers. Typically, these companies use earnings to fuel growth and to keep up with the competition, not to pay shareholders. In fact, the tech-rich Nasdaq Composite Index yields just 0.8% -- less than half of what the S&P 500 yields.There is a small group of tech stocks that do pay nice dividends. These companies aren't from some obscure corner of the tech world. In fact, they're software companies whose business models allow them to afford both growth and distributions to shareholders. In the case of this little company, moreover, shares haven't fully recovered from the beating they took in 2008, and its earnings are just beginning to. Despite the weaker results, the company hasn't lowered its dividend, and earnings still support it. **Wayside Technology Group (Nasdaq: WSTG)** distributes, sells and markets software from, for example, **Intel (Nasdaq: INTC)** , **Quest (Nasdaq: QSFT)** and **SolarWind's ([SWI](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWI&selected=SWI)) )** , to software development and information technology professionals. The $42 million New Jersey-based company has been around since 1982 and has been listed on the Nasdaq since its 1995 initial public offering.Wayside pays quarterly distributions that have increased +50% since 2003. The current distribution is $0.15 and has been at that level since 2007, giving the company a forward and historical yield of 7.0%. The company's 2009 earnings of $0.65 per share cover the dividend.In 2009, Wayside's net income totaled $2.9 million, down -9.5% from 2008. This was due to a -15.9% drop in sales. Wayside says that the economic downturn was causing current and potential customers to delay or reduce technology purchases, which resulted in longer sales cycles and slower adoption of new technologies.But there's a silver lining. Fourth-quarter 2009 sales topped the same period in 2008, increasing +6%. This was the first time quarter-over-quarter sales rose in 2009. In addition to help from the economy, Wayside's management plans to grow the business by investing in information technology and marketing, and expanding its sales team and software offerings.The company should have no problems finding the capital to implement its strategy. Wayside has a solid balance sheet . It has no debt, $3.44 in cash per share, and a book value of $5.20 per share.The company's shares have underperformed the market during the past year, setting the stage for a possible comeback. While the S&P has gained +55% during the past twelve months, Wayside has only gained +32%. But since the beginning of the year, it's begun to outperform, returning +10% since January 1st, compared with the S&P 500's +4%.Despite these recent gains, the shares are still undervalued -- perhaps because no one follows this company. Wayside's current dividend yield of 7.0% is not only about +15% higher than its five-year average, but also more than +300% higher than the S&P 500's current average yield of 1.8. Its price-to-earnings ratio (P/E) of 13.5 is -35% lower than the S&P 500's average P/E of 21 and -20% lower than its five-year average P/E of 17.One caveat: Wayside is a small company whose shares are thinly traded, which could lead to volatility. The company's average daily volume is just 6,000 shares -- **Microsoft (Nasdaq: MSFT)** , by contrast, trades about 50 million shares daily. But if you're in the market for a small-cap dividend payer with upside potential, then you should consider this high-yielding tech stock. Anthony HaddadStaff WriterStreetAuthorityP.S. If you're looking for both high yields and enormous capital gains, then you need to learn more about our "Income Security of the Month" for March 2010. With a strong history of paying increasing dividends, this stock is currently yielding an eye-popping 10.2%. That's double the 10-year Treasury yield, nearly three times what "AAA"-rated corporate bonds pay you and five times what you get from the S&P 500!Disclosure: Anthony Haddad does not own shares of any security mentioned in this article. © Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved. | A Microcap Tech Stock Yielding 7% | News | Unknown | Unknown | 0.0013 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
LINC | Lincoln Educational Services Corporation | Real Estate | Other Consumer Services | https://www.nasdaq.com/articles/fisher-and-greenblatt-approaches-high-alert-2010-03-22 | 2010-03-22 01:00:00 | ROST|Markets|BCPC | While many investors -- including John Paulson and George Soros -- have been keying on gold lately, Kenneth Fisher recently offered some words of caution to investors looking to ride the gold wave. In his latest Forbes column, Fisher says that while gold has averaged annual returns of about 7.1% since the downfall of the Bretton Woods exchange-rate system 37 years ago, the gains have come in bursts -- gold has gained ground in just 66 of the 433 months in that period. So, "if you aren't an exquisite timer, or very lucky, gold isn't a great place to aim your money," he warns.Instead, Fisher says he is currently targeting stocks of firms with good growth potential. I think he's wise to do so, and I recently came across two such stocks -- thanks in part to the Guru Strategy I base on Fisher's early writings. The two picks came to my attention through the new "Trade Alerts" feature on my Validea Professional web site. The Trade Alerts are issued by my Guru Strategies, each of which is based on the approach of a different investing great. Developed after extensive historical testing, the alerts are issued when my models detect a series of high-conviction buy signals that, when previously reached by individual stocks, have tended to be followed by strong performance.The two stocks my models issued alerts on this week are Lincoln Educational Services Corporation ([LINC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LINC&selected=LINC)) ) and Fuel Systems Solutions, Inc. ([FSYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FSYS&selected=FSYS)) ), and the reason is that both attained certain scores on my Fisher- and Joel Greenblatt-based models. In the past, stocks that hit similar scores on those two models went on to gain an average of 15% over the next three months, producing positive returns 76% of the time and beating the S&P 500 almost 70% of the time.Hopefully, these two stocks will have the same success enjoyed by several other stocks my models have issued Trade Alerts on this year. Among the big winners so far in 2010: Ross Stores ([ROST](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ROST&selected=ROST)) ), which is up 24.7% since an alert was issued for it, vs. just 2.0% for the S&P 500; Aeropostale ([ARO](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=ARO&selected=ARO)) ), up 27.1% since its alert vs. 1.1% for the S&P; and Balchem Corporation ([BCPC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BCPC&selected=BCPC)) ), up 32.4% vs. the S&P's 8.3% gain since its alert.To be clear, these Trade Alerts aren't short-term, technical, market-timing instruments. They are triggered by the scores a firm receives from my Guru Strategies, which are fundamental-based models. And the duration of the buy signals, determined by the specific signal's past performance, is usually in the three- to six-month range. (In the case of Lincoln and Fuel Systems, the alerts are expected to last about three months.) You should also be aware that I use a 15% stop-loss on each trade.With that in mind, let's see which of Lincoln's and Fuel Systems' fundamentals are impressing my Fisher- and Greenblatt-based models right now: **Lincoln Educational Services Corporation ([LINC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=LINC&selected=LINC)) ):** Like many private education firms, this New Jersey-based company has seen a surge in earnings in recent years, as the recession led many people who were unable to find work to try to further their education. Lincoln, which offers high school graduates and working adults various degree and diploma programs, is a small-cap ($700 million) that has taken in about $550 million in sales in the past year.Lincoln gets a 90% score from my Fisher-inspired model, which is based on Fisher's 1984 classic Super Stocks. This model targets firms with low price/sales ratios (PSRs), and for non-cyclicals like Lincoln that means below 1.5 (and preferably below 0.75). With a PSR of 1.28, the strategy considers Lincoln to be a good value.A few other reasons the Fisher-based approach likes Lincoln: The firm has a reasonable 26.2% debt/equity ratio; 5.6% three-year average net profit margins; and an inflation-adjusted earnings per share growth rate of more than 27% over the long term.Lincoln also gets a strong 90% score from my Greenblatt-inspired model, which is based on the remarkably simple two-variable "magic formula" Greenblatt laid out in his Little Book that Beats the Market. The two variables the strategy uses are earnings yield and return on capital, and Lincoln acquits itself nicely on both fronts. It has a 12.3% earnings yield, which ranks 123rd out of the several thousand stocks I track, and it has a return on capital of 50.2%, which ranks 120th. Those strong scores make Lincoln the 38th-most attractive stock in the market, according to this model. **Fuel Systems Solutions, Inc. ([FSYS](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=FSYS&selected=FSYS)) ):** This New York-based firm makes alternative fuel components and systems that involve propane and natural gas. Its products are used in a variety of vehicles and industrial applications, and are designed to generate savings, reduce emissions, and promote energy independence. Fuel Systems is another small-cap ($600 million) that gets 90% scores from both my Fisher- and Greenblatt-based models. The Fisher-based approach likes its 1.32 PSR, as well as its 8% debt/equity ratio. Fuel Systems has also been growing earnings rapidly over the past two years, despite the recession, and has an inflation-adjusted long-term EPS growth rate of more than 57%.The Greenblatt-based model, meanwhile, likes Fuel Systems' 14.1% earnings yield, which ranks 65th of the thousands of stocks I track. The firm also has an excellent 42.3% return on capital, which ranks 166th. Overall, this model sees it as the 35th-best stock in the market.Disclosure: I'm long LINC, BCPC, ROST, and ARO. | Fisher and Greenblatt Approaches on High Alert | News | Validea | Unknown | 0.0013 | 27.7602 | 27.7549 | 27.6143 | 27.5595 | 27.5595 | 27.5595 | 27.5595 | 27.5595 | 27.5595 | 27.5595 | 27.5595 | 27.4526 | 27.6162 | 28.0072 | 27.1332 | 26.9401 | 24.9118 | 27.4013 |
B | Barnes Group Inc. | Industrials | Metal Fabrications | https://www.nasdaq.com/articles/20-biggest-oil-and-gas-stocks-arent-so-hot-2010-03-22-0 | 2010-03-22 04:45:00 | Markets | I'm sure you've noticed that gasoline prices continue to climb across the country. From **Exxon** ([XOM](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=XOM&selected=XOM)) ) to **Sunoco** ([SUN](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SUN&selected=SUN)) ) to **BP** ([BP](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=BP&selected=BP)) ), prices are edging up once more - about 80 cents higher than at this point in 2009. And after the shock of $4 a gallon gas in the peak driving months of 2008, you may be part of the growing American population that is cutting back spending in anticipation of higher costs at the pump.But experts say prices will stabilize soon and could possibly stay below the $3 a gallon benchmark all spring and into the summer. That's because the movement up in gasoline prices doesn't really correlate to a spike in crude oil demand like it did in 2008. The upwards movement for crude is due largely to a weaker dollar (comparatively) that has boosted commodity prices. The bottom line is that supply is strong and demand is weak. And that means that while oil companies may be commanding a decent price for crude, they are not selling nearly enough to make the big profits they did before the recession.As a result, my latest fundamental analysis of the 20 largest oil & gas companies on Wall Street shows only one worth buying: Columbia-based **Ecopetrol** ([EC](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=EC&selected=EC)) ), which has seen strong demand due to its Latin American operations, gets a B or "Buy" recommendation in my Portfolio Grader database. The big players like **Chevron** ([CVX](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=CVX&selected=CVX)) ) and Europe's **Total** ([TOT](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=TOT&selected=TOT)) ) get my worst grade: F or "Strong Sell."[Portfolio Grader, my FREE stock ranking tool](http://www.investorplace.com/order/?sid=CK3108) , offers updated recommendations each week on about 5,000 publicly traded stocks. Click on any company's ticker below to get my free fundamental analysis of each stock:**TICKER****STOCK NAME****MARKET CAP ([B](http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=B&selected=B)) )****PORTFOLIO** GRADER GRADE [APA](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=APA) Apache Corp.$34.2D [APC](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=APC) Anadarko Petroleum Corp.$34.5D [BP](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=BP) BP PLC$180.3C [CEO](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=CEO) CNOOC Ltd.$72.1D [CNQ](http://www.investorplace.com/CNQ) Canadian Natural Resources Ltd.$39.1D [COP](http://www.investorplace.com/COP) ConocoPhillips$77.8D [CVX](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=CVX) Chevron Corp.$150.5F [E](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=ENI) ENI S.p.A.$83.8F [EC](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=EC) Ecopetrol S.A.$56.9B [IMO](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=IMO) Imperial Oil Ltd.$32.2F [OXY](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=OXY) Occidental Petroleum Corp.$67.0D [PBR](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=PBR) Petrobras Petroleo Brasileiro$199.3F [PTR](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=PTR) PetroChina Co. Ltd.$213.5D [RDS.A](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=RDS.A) Royal Dutch Shell PLC$180.1D [REP](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=REP) Repsol YPF S.A. ADS$29.5D [SNP](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=SNP) China Petroleum & Chemical Corp.$69.7D [STO](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=STO) Statoil ASA$73.7F [SU](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=SU) Suncor Energy Inc.$48.4F [TOT](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=TOT) Total S.A.$128.0F [XOM](http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=XOM) Exxon Mobil Corp.$316.9D** [Tell us what you think here.](mailto:[email protected])****Related Articles:******** [Top 5 Emerging Market Airlines](http://www.investorplace.com/experts/jeff_reeves/china-airline-stocks-latin-america-airline-stocks-cpa-lan-gol-cea-znh.html)**** [Coke vs. Pepsi: And the winner is… Dr. Pepper!](http://www.investorplace.com/experts/louis_navellier/articles/coca-cola-ko-pepsi-pep-dr-pepper-snapple-dps-stocks.html)** [Buys and Sells in the 50 Biggest Bank Stocks](http://www.investorplace.com/experts/louis_navellier/articles/top-bank-stocks-financials-bac-wfc-c-jpm-gs.html)**Top 5 Stocks for 2010**These must-have companies are just hitting their stride and are poised to outperform the market in the short-term. Investing pro Louis Navellier reveals his top five picks for 2010 in this free stock guide - ** [download your FREE copy here](http://www.investorplace.com/order/?sid=XH3252)** . | 20 Biggest Oil and Gas Stocks Aren’t So Hot | News | Louis Navellier | Unknown | 0.0013 | 17.8108 | 18.0544 | 17.9699 | 17.9658 | 17.9658 | 17.9658 | 17.9658 | 17.9658 | 17.9658 | 18.1894 | 18.1904 | 18.1538 | 18.0355 | 19.0629 | 19.6038 | 19.4658 | 19.7341 | 19.793 |
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