Shares of electric car maker Tesla Motors (TSLA) plunged $5.46, or 19%, to $22.79, late in today’s session but regained 7% in late trading after the company said its head of engineering, Peter Rawlinson, for chief of chassis engineering for its “Model S” line, Nick Sampson, quit, as related by Bloomberg’s Alan Ohnsman.
Rawlinson departed to attend to personal matters, the company said, and Sampson is said to have “transitioned” away from working on the Model S, Ohnsman notes.
Have you been in search of a brand-new Tv? If that’s the case, have you thought about leasing as opposed to purchasing? Listed here are 10 benefits that Tv rentals have over buying a brand new set. –You could possibly possess the capacity to rent a Tv that’s larger and than you may have had the opportunity to spend for ought to you be buying. –Christmas is generally an pricey time, so even once you would love or call for a brand new Tv, you may not be able to spend out for just 1. By leasing, you’ll get your brand-new Television above time to look at some Xmas telly. –Should you purchase a Television, then understand you’d like some thing just just a little bigger or with superior specs, it is past also far. Obtaining a Tv rental deal, you will most most likely possess the ability to change your contract.
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Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Zoltek (Nasdaq: ZOLT ) out of line?
To figure that out, start by comparing the company's inventory growth to sales growth. How is Zoltek doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue increased 18.1%, and inventory increased 26%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 11.8%, and inventory dropped 2.1%.
Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)
A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. W! e call i t "positive inventory divergence."
On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.
What's going on with the inventory at Zoltek? I chart the details below for both quarterly and 12-month periods.
Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.
Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.
Let's dig into the inventory specifics. On a trailing-12-month basis, work-in-progress inventory was the fastest-growing segment, up 73.7%. On a sequential-quarter basis, work-in-progress inventory was also the fastest-growing segment, up 12.9%. Although Zoltek shows inventory growth that outpaces revenue growth, the company may also display positive inventory divergence, suggesting that management sees increased demand on the horizon.
Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide the market's best returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.
I run these quick inventory checks every quarter. T! o stay o n top of inventory and other tell-tale metrics at your favorite companies, add them to your free watchlist, and we'll deliver our latest coverage right to your inbox.
Stocks jumped Tuesday morning, supposedly because China’s Q4 GDP growth rate slowed to 8.9%. Slower is better, we’re told, because it means Beijing can ease credit and inflate the great Chinese bubble again.
Exactly how this logic works is a bit hard to fathom. But investors didn’t have much time to fathom it yesterday: The stock market’s burst of strength began to fade shortly before 10 a.m. and continued to tail off until late in the session. The Dow closed 60 points in the green, noticeably stronger in percentage terms than the broader list of stocks.
Beneath the surface, a number of cracks are starting to appear in the market’s armor. For example, banks and other financial stocks had mounted a hopeful rally during the New Year’s first few sessions, but a mediocre earnings report from JPMorgan Chase (NYSE:JPM) on Friday and a somber one from Citigroup (NYSE:C) yesterday sent the financials skidding again.
I still think JPM is unnaturally cheap at just over 7 times estimated 2012 earnings. I’m also delighted that Jamie Dimon’s empire bought back $950 milllion worth of stock in the December quarter — a modest dividend hike seems probable at the March 2012 directors’ meeting.
However, I also recognize that we’re in a touchy period for the global economy and financial system. Accordingly, I’m trimming my buy limit on Morgan — one of the world’s strongest banks and an undoubted survivor — to $37 (from $40 previously).
At current levels, I’m projecting a total return of 15% to 35% in the year ahead for JPM. That’s an abnormally wide spread, reflecting the exceptional degree of uncertainty we’re grappling with.
Another curiosity, and a potential “crack,” has showed up lately in the roster of new highs and lows. Since Jan. 3, despite an upward tilt in the headline ! indexes, the number of individual Big Board stocks touching new 52-week highs has dropped more than 30%, while the number of new lows has risen.
So there’s plenty of reason for caution amid the Street’s euphoria. I wouldn’t put on any additional shorts or other hedges just yet. However, I would be very sparing with new purchases.
The sector has gotten roughed up in the past two sessions as operational problems emerged at several companies — including Hecla Mining (NYSE:HL), a silver producer, and Kinross Gold (NYSE:KGC).
Newmont Mining (NYSE:NEM) also disappointed some of its fans yesterday by projecting somewhat lower copper production in 2012 and higher operating costs than the consensus had expected. Copper, though, accounts for only about 8% of NEM’s sales.
Thus, we’re not talking about an earth-shaking change in the company’s profit outlook. At about 10 times estimated 2012 earnings, Newmont sports limited downside and a potential total return of 25% or more in the next 12 months.
Pay up to $62.80 for NEM.
Last week in a story about whether HP could make a transition to a services and software focus from PC's and hardware, Richard Kugele an analyst at Needham & co said, "To be the company Leo envisioned, you would need to do many acquisitions." Later that week, at a forum to discuss California's economic future, Whitman said that the company is definitively not looking to make more near-term acquisitions. In TheStreet's October 4th interview with Kugele, he said, "I suspect that if clearer heads prevail, the business may be kept (albeit now weakened). webOS should find a home because I feel it was a good OS, just needed some investment and MANY more apps."
The New York based company has seen its operating losses accelerate from $8.5 million to $64.5 million this year. It's also failed to be profitable in any year since 2006 and hasn't had a profitable quarter since this time in 2007.
So, show of hands: who really thought that former Massachusetts Governor and current GOP presidential hopeful Mitt Romney would win South Carolina?
My hand will stay firmly by my side. I expected Romney to lose South Carolina. I also still fully expect him to get the nod from the party at the GOP Convention despite noting earlier that no Republican candidate for President has ever failed to win South Carolina and gone on to secure the nomination. I think he’s the exception. (No, this isn’t an endorsement, it’s an educated guess.)
I know South Carolina pretty well. I grew up in North Carolina (much of my family still remains) and spent many a summer in Greenville; I’ve been to family reunions in Georgetown; been porch sitting in Rock Hill and wandered around the naval base in Charleston with my brother. And yes, I once bought a Fiat in Pumpkintown. With my background, I feel confident that I easily could rattle off ten reasons why Romney lost South Carolina.
Not releasing his tax returns isn’t one of them.
Despite that fact, which I’m sure his handlers already know, Romney is still getting grief about not releasing his returns. This week, apparently still reeling after the primary loss to former House Speaker Newt Gingrich, Romney is going to do something he’s never done before: make his tax returns public. He plans to release his 2010 returns and offer an estimate of what he’ll pay in 2011 (someone get that tax preparer a redeye quick).
I don’t think it will make much difference in the race at this point – which is exactly why Romney is releasing the returns. This is his Obama birth certificate moment. I think Romney realizes that voters are going to talk about those returns until he makes them public. The more that voters focus on the lack of returns, the worse he’s going to look. Romney’s supporters want to move the discussion along.
So what w! ill thos e tax returns reveal? My guess is nothing we haven’t heard already. We know that he’s rich. Crazy rich. We know that he has offshore accounts. And we know that he pays “about 15%” in taxes.
What else is there to see? I’m sure there’s something there to pick on. But I don’t think we’re going to see any game changing information in those returns. But it sure makes good fodder for Gingrich, who told NBC’s David Gregory:
If there are things in there that can be used against him, we better know it before the nomination. The last thing Republicans want to do is nominate somebody that collapses in September.
You know, like an old ethics violation related to federal tax laws.
Good thing Gingrich is just looking out for the party.
All that said, when the returns are released later this week, I think we’re going to see a flurry of activity that turns out to be pretty much a non-event. I think, by midweek, we’ll all be saying, “There’s nothing to see here, folks, let’s move along.”
In the calculus of oil prices, Wall St. often factors in supply interruptions that could come from political instability and terrorism. But, what if selective large reserves simply start to run out, without much warning?
Mexico’s largest oil field, one of the biggest in the the world, suffered a huge drop in production during 2006. According to industry experts, the decline will continue.
The news comes as somewhat of a surprise. And, the supply and demand metrics that move oil prices are often unsettled by unexpected news.
Watch for the price of oil to move higher, and, if the news from Mexico gets worse, cost-per-barrel could sit at a higher level for awhile.
Douglas A. McIntyre can be reached at douglasacmcintyre@247wallst.com.
Groupon's (Nasdaq: GRPN ) daily deals are a dream for consumers. Who wouldn't want half off on dinner at that kitschy restaurant across town or a round of golf on the cheap with your buddies? But for the small businesses Groupon needs as partners, the benefits aren't as clear.
A study by Rice University has found that 32% of businesses surveyed lost money on the Groupon promotion, and more than 40% said they would not partner with Groupon again. Another study said that only 36% of deal users spent beyond the value of the deal. Nearly all businesses need repeat customers to survive, and the daily-deals model is no different. While Groupon's promotion with Gap (NYSE: GPS ) attracted a lot of attention, daily-deal sites generally rely on small business partners such as restaurants or service businesses like salons and spas so they can offer their customers a variety of new and unique experiences.
Race to the bottom
There are several problems businesses have with the Groupon model. The deal is supposed to serve as an ad for the business, attracting new customers, but just one in five daily-deal users comes back. The deal undermines the regular full-price-paying customers the partnering businesses already have, essentially encouraging customers they don't want and discouraging the ones they do, or gives a discount to a customer who would have paid full price. Many retailers think they are only creating an expectation of continued discounting, and the new customers will just hop on to the next deal when they're done with theirs. The deals seem to instill loyalty to the website offering them instead of the end businesses, and retailers feel pressure to offer the discounts to match their competitors, even though the end result seems to be squeezing margins across participating businesses.
Two's company, 300's a crowd
Currently, there are ! more tha n 300 daily-deal sites, with heavyweights such as Microsoft (Nasdaq: MSFT ) , Google (Nasdaq: GOOG ) , and Amazon.com (Nasdaq: AMZN ) now gunning for a piece of the action. Some consumers have complained of "deal fatigue" from the constant barrage of emails, and 87% said they would purchase more deals if they were conveniently located on one site. The industry has virtually no barriers to entry, and it seems as if Groupon's lead has come from its clever marketing, first-mover advantage, and huge sales force, which eats up so much of its budget that it's still operating at a loss. Consolidation seems to be inevitable, and innovation will be necessary for the industry to be sustainable.
Foolish takeaway
With Internet powerhouses like Facebook bowing out of the daily-deal racket and Yelp cutting its deals sales staff in half, it looks as if the boom may be over. Investors in deal sites Travelzoo (Nasdaq: TZOO ) and OpenTable (Nasdaq: OPEN ) don't need be reminded of that, as both stocks are down more than 60% from their 2011 highs. Until someone can develop a daily-deals model that benefits all parties involved, it looks as if this phenomenon is just the latest version of that old adage: "If it's too good to be true, it probably is."
The daily-deals industry is a quickly changing one. Keep up with any developments in the battle over discounts by adding these companies to My Watchlist.
Before you pack your holiday bags for a trip to visit your folks or for a European Getaway, the travel aficianados have advice for what to pack in your smallest piece of luggage ��your smartphone. The apps recommended by prolific freelance travel and food writer, Gayle Keck, will help you phone home, find your destination, secure restaurant reservations and translate languages. The staff at travel book publisher, Avalon Travel, has app recommendations for self-guided walking tours, finding rest areas on car trips, navigating most airports, keeping your air itinerary handy and getting around subway systems.
-Skype? (iOS, Blackberry, Android and Select Verizon phones)
“If you’re traveling internationally it’s indispensible if you have access to Wi-Fi. There are incredible cost-savings. I’ve usually had good luck with call quality.”
-Google Maps (Android, Blackberry, iOS, Nokia or S60 and Windows Phone)
“If I’m driving in the US, I look to see what the traffic is like. I may switch my route based on traffic.”
-OpenTable (Android, Blackberry, iOS, Windows Phone and webOS)
“If I already know of a restaurant in a particular location, it’s a fairly easy way to make a reservation on the fly.”
-Google Translate (iOS and Android)
“It’s good enough to get by when you can’t find someone who speaks English. You can type in whole sentences.”
-Truck Stops USA (iOS)
“During our cross-country move I used the Truck Stops USA app for finding rest areas, services, weigh stations (had to take the moving truck through the scales), local fuel prices, and current weather conditions. It was pretty ! handy ha ving all that information in a single app.” �� Gayle Hart, Web Content Editor.
-Metro Paris Metro Subway (iOS)
“If you��re planning a trip to Paris, the Metro Paris Subway app is a must! There are similar apps for the London Tube and the NYC subway, but the Metro Paris one is the best.” �� Sierra Machado, Publishing Assistant.
-Trip It (iOS, Android Blackberry and Windows Phone 7) and GateGuru (iOS and Android)
“When I��m taking a vacation and flying to a destination, I like keeping all my itinerary information in one place with the Trip It app. I also love Gate Guru for finding what shops, restaurants, and service options a particular airport has. It’s prefect for layovers and long breaks between flight connections because I don’t have to hike the entire airport with luggage in tow.” �� Gayle Hart, Web Content Editor.
-Rick Steves’ Walks & Tours apps (audio tours on Android and iOS, mapped tours iOS)
Want an accomplished tour guide on your trip without constant supervision? Avalon Travel author Rick Steves shows you around Europe with audio tours of cities and attractions. An interactive walking tour where you can click on tourist attractions and restaurants for detailed information is available for iOS users only.
Don’t see your phone or phone’s operating system on your favorite app? Search for a similar app compatible with your smartphone. You may find an app with a similar name by the same app creator.
For more vacation articles from Mint.com, checkout Day Trips: The New Cheap Vacation, Getting Home for the Holidays on a Budget and Money-Saving Tools for Travelers.
The debt sale scheduled for Monday in Egypt that had been postponed from last week took place, but on a smaller scale than originally anticipated due to low demand. And on Tuesday, the country’s central bank took steps to support the Egyptian pound, but would not specify how much they had devoted to the effort.
According to Reuters, the debt sale previously reported by AdvisorOne had been planned for more than 15 billion Egyptian pounds ($2.53 billion) of short-term debt overall, with 8 billion pounds of that in 91-day bills on the market. However, when the sale actually took place, it was scaled back to only 7 billion pounds, according to an Egyptian banker. Other categories of debt were also reduced because of "subdued demand" in the marketplace. Another dealer said that he had not seen any foreign demand in the market at all.
Meanwhile, the Egyptian pound, which had fallen to its lowest level in 6 years, finally got some support from the country’s central bank, which intervened in the market to boost the currency against the dollar. Hisham Ramirez, the deputy governor of the central bank, was quoted in the report as saying, "We intervened in the market." He would not specify to what extent.
The nation’s stock market is expected to reopen next week, and the action was seen as an advance to restore confidence in the currency before that happens. Economist John Sfakianakis of Banque Saudi Fransi said in a statement that he had not expected the bank to intervene before it had dropped to 6 pounds to the dollar; on Monday, before the intervention, it had closed at 5.952 to the dollar.
"They are doing it earlier than the market had expected, which shows that they are taking seriously the issue of pound depreciation and they will intervene at any cost," he said.
The Conference Board has just released the “Leading Economic Indicators” for the month of February.? While these arguably don’t really lead, there was another drop to -0.4% for February.? Both components, the “coincident” and “lagging” indicators, came in at the same -0.4% reading.? Estimates from Bloomberg were for a reading of -0.6%.? This data follows a slight increase in January, although that was revised slightly lower.
The CEI drop was driven by continued declines in employment and industrial production. The drop in the LEI continued the general downward trend that began in July 2007, but what interesting is that the data noted that its rate of decline has moderated slightly in recent months.? Before getting too exited about the data, the Conference Board also noted that the six-month decline in the CEI is the largest since 1975 and the data suggests that the economic recession that began in December 2007 will continue in the near term.
The funniest thing to consider about the “Leading Indicators” is the name.? Most of the data is actually old and most of the data is actually known before the numbers actually get published.
The S&P 500 Index was at 735.09 as of the close of February 27.? Even with the drop this morning, that index sits at 790.64.? That is a gain of 7%, but the index sits 16% above the low close of 676.53 on March 9.?? Hence, Leading Indicators look like they are lagging, at least in part.
JON C. OGG
Schlumberger Ltd. (SLB), the world��slargest oilfield-services provider, said fourth-quarter profitrose 36 percent as higher crude prices pushed oil companies toboost exploration and production spending around the world.
Net income rose to $1.41 billion, or $1.05 a share, from$1.04 billion, or 76 cents, a year earlier, Houston- and Paris-based Schlumberger said today in a statement. Excluding chargesrelated to a write-off of Libya assets, the company earned $1.11a share, beating by 2 cents the average of 32 analyst estimatescompiled by Bloomberg. Sales climbed 21 percent to $11 billion.
Oil prices advanced 10 percent to average $94.06 a barrelon the New York Mercantile Exchange in the quarter, up from$85.24 a year earlier. The average number of active oil andnatural-gas rigs around the world rose 15 percent in the finalthree months of the year to 3,676, Baker Hughes Inc. data show.
Revenue in its North America region, which excludes Mexico,climbed 6 percent to $3.52 billion while the operating profitmargin was $947 million, or 27 percent.
��North America was really the good upside surprise,�� John Keller, an analyst at Stephens Inc. in Houston, who rates theshares at ��overweight�� and owns none, said in a telephoneinterview. ��The return of deepwater rigs in the Gulf certainlyadded a tailwind during the quarter.�� Keller had estimatedrevenue of $3.45 billion and a 25 percent margin.
Schlumberger reported its best North American marginperformance in more than four years, according to data compiledby Bloomberg.
��Uncertainty remains over the outlook for 2012 due to thecontinuing sovereign debt crisis in Europe which places downwardpressure on GDP and oil demand forecasts,�� Chief ExecutiveOfficer Paal Kibsgaard said in the statement. ��Against thisbackdrop, we are planning for growth in 2012, while building therequired flexibility into our resource plans.��
Kibsgaard��s comments were cautious, Bill Herbert, ananalyst at Simmons &! ; Co. in Houston, wrote today in a note toclients.
��Management made a reference to ��building the requiredflexibility into�� its ��resource plans�� in the event of industrydislocations,�� he wrote. ��This is code for throttling back onspending, at a minimum, if warranted.��
The company is expected to earn net income of $1.10 pershare in the first quarter, according to the average of 17analyst estimates compiled by Bloomberg. Kibsgaard toldinvestors on a conference call that consensus estimates are onthe ��high side.��
��There is some added uncertainty going into Q1 now interms of the impact of the accelerating drop in North Americanshale-gas activity,�� Kibsgaard said on the call. ��Generally, Iwould say the current consensus is somewhat on the optimisticside.��
Explorers and producers around the world are expected toboost annual spending by 9 percent this year to a record $595billion, James Crandell and Omar Nokta, managing directors atinvestment bank Dahlman Rose & Co., wrote in a Jan. 3 note.
Schlumberger helps companies drill for oil and gas,including using hydraulic fracturing to free the fuel from shaleformations.
Gulf of Mexico
The average number of rigs active in the Gulf of Mexicoclimbed 68 percent to 37 in the fourth quarter, compared with 22a year earlier, according to Baker Hughes.
In the U.S. onshore market, the largest region in the worldfor hydraulic fracturing work, Stephens analysts project an 8percent growth in the number of drilling rigs working this yearcompared with 2011.
Schlumberger rose 1.3 percent to close at $73.80 in NewYork. The shares, which have 31 buy ratings from analysts, fiveholds and one sell, rose 14 percent during the quarter.
The Certified Financial Planner Board of Standards announced Wednesday that it’s seeking comments by Feb. 17 on whether to modify the way the board handles bankruptcy filings by CFPs.
As it stands now, the CFP Board asks CFP candidates on their initial application if they’ve filed for bankruptcy to determine whether they are “fit for CFP certification,” and in the case of a CFP professional, to determine whether the bankruptcy filing resulted from conduct that would warrant discipline. CFP professionals are asked on their CFP renewal application, which they must fill out every two years, whether they have filed for bankruptcy.
The CFP Board says that it proposes replacing the current disciplinary approach to cases involving a "single bankruptcy filing (bankruptcy-only cases)" with a "non-disciplinary, disclosure-oriented approach" in which the public has access to notice of the bankruptcy filing to assist it in making an informed decision when evaluating whether to work with a CFP professional who has filed for bankruptcy.
Under the proposed approach, the CFP Board says that it “would no longer investigate and the Disciplinary and Ethics Commission would no longer hear bankruptcy-only cases.”
Rather, CFP Board would “verify the bankruptcy filing and note it in the individual’s public profile,” which is available through the Find a CFP Professional and/or Verify an Individual’s CFP Certification search functions on CFP Board’s website, as well as through responses CFP Board provides to individuals who contact CFP Board regarding an individual’s certification status.
This disclosure of the bankruptcy in an individual’s public profile, the CFP Board says, “would continue for 10 years from the date CFP Board is notified of the bankruptcy, whether through disclosure by the individual or discovery by CFP Board.”
The proposed approach of noting all bankruptcies filed in the past five years in an individual’s public profile “is aligned with its mission to benefit the public,” CFP Board says, and that this proposed approach will benefit CFP professionals and CFP candidates “because they will no longer be subject to potential discipline in bankruptcy-only cases.”
Final proposed amendments will be presented to the Board of Directors for review and approval in March.
The Consumer Price Indexes (CPI) program of the US Department of Labor produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services in the United States. Tracking the CPI data began in 1913 and by 1983, inflation had reached 100%. Therefore, today most all data is calculated using a 1983 base of 100. For example, a CPI of 215.3 in 2009 indicates 115.3% inflation since 1983. Below is the inflation calculator based on data provided by the U.S. Department of Labor Bureau of Labor Statistics showing inflation during the past decade:
CPI Inflation Calculator
If in 2008 (enter year)
I purchased an item for $100
then in 1998 (enter year)
that same item would cost:$132.09
Rate of inflation change:32.1%
The above calculator shows that if you put $100 under your mattress ten years ago it, through the inflation of goods and services during the past decade, it would be worth $76 ($100/1.32) today, i.e., worth 76% of its original value or a loss of 24% in terms of 1998 purchasing power.
In order to hedge against inflation, many advisors suggest that you buy various commodities, oil and gas, foreign dollars, Real Estate Investment Trusts (REITS), Treasury Inflation-Protected Securities (TIPS), gold, and silver, etc. All of these investment vehicles are now available through Exchange Traded Funds (ETF’s) where you don’t have to take physical possession of the commodities; for relatively small investments, gold and silver in the form of bullion or coins is readily available and simple to purchase and hold. All of these forms of hedges against inflation can be excellent, however for the purpose of this article, we’ll concentrate on silver.
Silver has always been one of Mexico’s major export materials; in fact, until just a few years ago, Mexico was the largest producer and exporter of silver in the world. Let’s assume ten years ago, instead of putting your $100 un! der the mattress, you bought $100 worth of silver selling at approximately $5.50/ounce. Today, at $16.65/ounce, you can sell your silver and enjoy a gain of more than 200%, i.e., your $100 investment is now worth $303 resulting in a 1999 purchasing power of $230 (76% of $303); not bad! If you’re concerned that the recent increase in silver prices is only a temporary spike, it should be known that silver was selling at $20/ounce in 1981 and when the Hunt brothers were speculating in 1980, it was driven up to over $50/ounce; now that was a spike! The last time silver was selling for $16.65/ounce was in 1981. Taking the CPI inflation index of 2.37 (1981 to 2009) into consideration, $16.65/ounce in 1981 was equivalent to almost $40/ounce (2.37 X $16.65) in today’s money and therefore it’s not too difficult to imagine a much further increase in silver prices! This logic is further reinforced when you take into consideration the weakening dollar forecast for the near future. (see ten year silver price graph below)
The world’s leading miner and producer of silver is the Pan American Silver Corp. (PAAS), headquartered in Vancouver, B.C. This publicly traded company has silver mines throughout Latin America with a couple of its largest mines in Mexico. In fact, one of these two mines is their only open pit mine and the other huge Mexican mine, located north east of Puerto Vallarta, has been producing the purest silver of all their mines since 1929. The graph below reveals the PAAS stock performance during the past ten years.
Next, let’s analyze the performance of the US stock market during the same ten year time frame. If your $100 had been invested in SPY, the S&P 500 ETF, it would be worth 80 dollars today per the graph below. Let’s take it a step further and adjust for inflation; that $80 would have only $61 (76% of $80) of 1999 purchasing power. Yes, that’s correct; if you were invested in the US stock market and your return was better than average, you’! ;ve lost almost 40% of the purchasing power that you had ten years ago!
Now, let’s compare the ten year performance of the Mexican stock market (Bolsa) to the US stock market. If you had purchased EWW, the ETF basket of Mexican stocks, in 1999, you would have realized a 150% gain and your initial investment would now be valued at $250, with a 1999 purchasing power of $190 (76% of $250); pretty decent, especially when you compare it to the $61 left from investing in the SPY’s!
You’ll immediately see how much the ETF basket of Mexican stocks (EWW) and the Pan American Silver Corp. (PAAS) stock had appreciated in value through 2007 and then fell precipitously in the second half of 2008. More importantly, you can see how both are recovering beautifully as the world recovers from the global recession. Comparing both of these Mexico related stocks to the SPY’s; you may never again want to invest your $100 in a US related stock! Assuming that the global economy continues its gradual recovery, it seems quite apparent from extrapolating the curves below that Mexican stocks and silver are very attractive areas for investing a portion of your portfolio at this time. It’s amazing to see how closely the EWW and the PAAS stock prices have correlated over the past decade!
Finally, let’s look at Mexican real estate. Along the prime region of the Mexican Riviera, property values have tripled from 1999 to 2008 (we don’t have any empirical data but after being invested in the real estate market in Puerto Vallarta for more than a quarter of a century, we can state it as a fact; some properties have quadrupled in value!), after which they have remained flat to perhaps dropping by as much as 20%. Therefore, a real estate investment of $100 in 1999 was worth about $300 in 2008. Assuming a depreciation of $60 (20% of $300) over the past 18 months, it’s now worth $240. In terms of 1999 purchasing power, it’s worth $182 (76% of $240); about the same as EWW and PAAS, ! not as m uch as silver, but a whole lot more fun than owning either! When comparing these facts and figures to the $61 of 1999 purchasing power remaining from the $100 invested in the SPY’s, it’s truly disheartening to think of those of you that were fully invested through IRA’s or 401k’s during the past decade. Fortunately, it’s not too late to recoup your losses; in fact, the time could never be better!
The recent drop in Mexican real estate values was caused mainly by the global recession; however, the recent border town drug cartel war news (1,200 miles between PV and Juarez!) and the swine flu scare (three confirmed cases in PV!) contributed significantly to the local real estate recession. The border town drug cartel war and the swine flu scare effects will vanish over time and in all probability, the property values will soon recover to their 2008 highs. Unlike the 20% property value drop in the US, there are virtually no foreclosures dragging down the housing values in Mexico. The housing crisis in the US will probably continue for a couple more years resulting in further erosion of home values by an additional 10-20%. Currently, millions of Real Estate Owned (REO-lender owned) properties exist in the US but you won’t find any in Mexico!
In summarizing, $100 placed under the mattress ten years ago has a 1999 value of $76 today, $61 if in the S&P 500 SPY’s, $230 if in silver, $190 if in the Mexican EWW fund, $185 if in the silver company PAAS, and $182 if in Mexican real estate. Regardless of where in Mexico you had invested your $100 ten years ago, whether it was in Mexican silver, stocks, or real estate, you’ve now got at least three times as much as you would have had if you had invested in the S&P 500 SPY’s! So, here we are in 2009; the question is where best to invest your remaining money after the fiasco of the past decade? With real estate prices 20% off recent highs, long term mortgages of 50% (or more) available in Mexico,! and man y developers willing to short term finance up to 50%, there has never been a better time to invest in Mexican real estate.
Why hesitate; isn’t it about time that you at least consider making an investment decision totally contrary to those recommendations that you’ve been receiving from your personal financial “guru” that have cost you 40% of your life’s savings? Come on down and retire in Mexico; maybe you’ll even want to buy a bag full of Mexican Libertads or dabble in the Mexican Bolsa through a vehicle such as the EWW fund while enjoying retirement to its fullest! Who knows; as you’re relaxing in your beach front condo on the Mexican Riviera, perhaps your investments in Mexico will gain enough over the next couple of years to recover what you’ve lost during the past decade!
(Please refer to GRAPHS associated with this article)
Jim Scherrer is a retired entrepreneur from Houston, has owned property in Puerto Vallarta, Mexico for 26 years, and has made Vallarta his permanent residence for the past twelve years. He founded Puerto Vallarta Real Estate Buyers Agents (PVREBA), whose mission is to reveal all the recent changes that have occurred in Vallarta while dispelling the misconceptions about living in Mexico. PVREBA acts exclusively as buyers agents by introducing North Americans to Vallarta, showing them properties that meet their needs and budgets, and assisting them through the foreign buying process, with all payments made by the listing agents. For the full series of nearly 70 articles regarding Retirement in Puerto Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, defense contractor General Dynamics (NYSE: GD ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at General Dynamics' business and see what CAPS investors are saying about the stock right now.
General Dynamics facts
| Headquarters (Founded) | Falls Church, Va. (1899) |
| Market Cap | $25.7 billion |
| Industry | Aerospace and defense |
| Trailing-12-Month Revenue | $32.1 billion |
| Management | Chairman/CEO Jay Johnson CFO L. Hugh Redd |
| Return on Equity (Average, Past 3 Years) | 20% |
| Cash/Debt | $1.5 billion / $4.1 billion |
| Dividend Yield | 2.6% |
| Competitors | Boeing Lockheed Martin Northrop Grumman |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 95% of the 1,357 members who have rated General Dynamics believe the stock will outperform the S&P 500 going forward. ?
Just last month, one of those Fools, market8, tapped the stock as a solid way to play defense:
My recommendation for a stable cash company would be General Dynamics, which is getting negative press related to politics, but has solid long-term appeal. ... I am not worried about the political hammer on defense, albeit a negative at the margin. The growth rate will re! main pos itive even if the slope flattens out on budget cutbacks. With this company you get very stable cash flows, but my favorite part of the company is the upside the Gulfstream brand provides. Time is a critical resource for the super wealthy and business jets should have strong global demand going forward as the rising elite seek to maximize the one resource they can't buy more of.
What do you think about General Dynamics, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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Why do I say this? I don't know what kind of a manager he'll be, but I do know he has the most to lose of anyone on this list -- in taking this job, he's leaving his perch at eBay(EBAY) subsidiary PayPal. He would have become very rich and powerful on any PayPal spin-off, which has been in discussion, and if it happens the company will only grow in influence. Thomson has really given up a lot, and he's done it because he's apparently judged that, on a risk-adjusted basis, he had more to gain by going to Yahoo!.
American Tower Corporation (NYSE:AMT) recently hit 52 week peak price $55.08, opened at $54.43 scored +0.75% closed $55.00. AMT traded on over 1.95 million shares in comparison to average volume of 2.60 million shares.
AMT has earnings of $353.69 million and made $1.89 billion sales for the last 12 months. Its quarter to quarter sales remained 15.59%. The company has 399.08 million of outstanding shares and 395.01 million shares were floated in the market.
AMT has an insider ownership at 0.02% and institutional ownership remained 96.35%. Its return on investment (ROI) for the last 12 month was 4.20% as compare to its return on equity (ROE) of 10.59% for the last 12 months.
The price moved ahead 6.61% from the mean of 20 days, +7.51% from 50 and went up 14.78% from 200 days average price. Company��s performance for the week was 4.40%, +8.98% for month and yearly performance remained 29.35%.
Its price volatility for a month remained 1.69% whereas volatility for a week noted as 1.42% having beta of 0.68. Company��s price to sales ratio for last 12 months was 11.64 while its price to book ratio for the most recent quarter was 6.37 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 1.20 billion for the past twelve months.
If you’re looking to make money in the online world, then chances are that you’ve seen more than your fair share of moneymaking ideas that simply don’t work. Between forex trades that promise the world from work-at-home opportunities that are more trouble than they’re actually worth, it can be enough to discourage anyone from making money online. However, there’s one great option from moneymaking ideas that actually work – and they’re about to make you very happy with your bank account.
Sports arbitrage trading is a great alternative to traditional investments because it’s a low risk, high yield investment scheme that requires little maintenance on behalf of the investor. Instead of relying solely on the performance of a single stock, sports arbitrage trading seeks out price differences in the market and then exploits those differences to earn a substantial return. Investors regard sports arbitrage trading as relatively risk-free, which is why it’s such a popular choice for new investors who are looking to try out moneymaking ideas.
Sports arbitrage earns significant returns because it compounds your investment capital with each trade. The more you invest, the more your trade compounds, as the typical compounding rate for each trade averages out between one to five percent – and this figure stands during even the worst periods of market performance. This snowballing effect from compounding trade rates has earned many new traders a yearly income that far exceeds the one from their day job! Best of all, you won’t have to hand over half of your yields to the government, as the profits from sports arbitrage trading are tax-free.
Don’t waste another moment on a moneymaking idea that will lead nowhere. Why not skyrocket your knowledge of the sports investment market by visiting CSI Arbitrage today – your bank account will thank you for it later!
Late word from the World Economic Forum is that the founder of YouTube has announced that the video sharing site, bought by Google (GOOG), will start to pay some of its contributors for content. What metric may be used is still not certain.
The announcement seems exceedingly odd, given that the video operation has not figured out how to make large sums of money from its traffic and is embroiled in disputes with TV and movie studios posted on the website in violation of copyright laws. So, paying contributors would seem to be a good way to drive the operation further into the red.
But, it is the internet.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Microsoft (MSFT) this afternoon reported fiscal Q2 revenue in line with expectations and profit a penny ahead of consensus.
Revenue in the three months ending in December rose 5%, year over year, to $20.9 billion, yielding EPS of 78 cents.
Analysts had been modeling $20.92 billion in revenue and EPS of 76 cents.
Windows revenue was down 6%, year over year. Server and Tools revenue was up 11%, Microsoft Office revenue was up 7%. The company had competitive wins in its “Dynamics” business, said investor relations director Bill Koefoed in a phone call following the report.
Xbox had a “huge” quarter, said Koefoed, with revenue up 15%, year over year. The company’s losses in its online services business diminished by $100 million, to a little under half a billion dollars. It was the second consecutive quarter of improvement.
Discussing the decline in Windows, Koefoed remarked that one factor depressing the product were sales of Netbooks, which fell 70%, year over year, in the quarter.
Excluding Netbooks, consumer Windows sales were actually up 2%, year over year, he pointed out.
However, inventory levels at OEMs exiting the quarter were down, said Koefoed, and it wasn’t immediately? clear where that drop came from, he said.
Some of it may have been attributable to flooding in Thailand, about which Microsoft had already warned last week that there would be an impact on Windows sales. But not entirely. The overall decline in PC inventory that was affecting Windows revenue was still not quite explainable, said Koefoed.
Shares of Microsoft are up 48 cents, or 1.5%, at $28.55 up 60 cents, or 2.2%, at $28.74 in late trading.
Microsoft! ’s conference call with analysts is getting underway now, at 5:30 pm, Eastern, and you can catch the webcast of it here.
Google’s (GOOG) stock is having a really rocky time. On January 31, the stock hit $505. Today, it dropped below $470. A drop of 7% in such a short time is worth a look. The shares can’t seem to find a floor.
Over the weekend, Time Magazine ran a piece about what Yahoo! (YHOO) would have to do to turn itself around. It covered Panama taking share from Google and a lot of other news magazine junk. But, why anyone would use Panama over Google’s product unless it is substantially better is really hard to say.
Google’s earnings weren’t good enough for a lot of investors. There is fear that as the company’s growth inevitably slows and it invests in new products that margins will drop. Fair, and probably true.
And, then there is the news that Viacom wants about 100,000 videos containing its content taken down from Google property YouTube. The YouTube buy will look expensive if the fight with big content holders goes on. But, the other side of that argument is that the YouTube audience is too large to be ignored at an outlet and that content owners will eventually come back with distribution deals.
The real problem for Google is that it has gone from being a stock of hope to a stock of doubt. That has happened to other big stocks over the years. Certainly Microsoft (MSFT) and Yahoo! qualify. In the collective minds of investors Google has more going against it than for it, at least for now. Being the leader in search is giving way to concerns about competition and whether its efforts outside its core competence will ever an pay off.
The floor under that stock may keep falling.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Intel (INTC) has come up with a chip architecture that is a sea change in the way that processors operate. Intel claims that it is the most significant evolution in the way that it produces its products since the company came out with its first chips over 30 years ago.
IBM (IBM) says that it is working on a similar technology for producing processors. Apparently so is Texas Instruments (TXN)
Intel rival AMD will have access to the IBM advances, so it is now a race to see which company can get the technology to market first.
Intel has indicated that its new chips will be available in the second half of 2007. The IBM/AMD products may not be available until early 2008, giving Intel a distinct advantage.
Intel has been looking for a "silver bullet" in a effort to get back market share taken by AMD over the last three years. The price battle between the two companies has destroyed margins at both. AMD’s stock has been driven down from $42.70 to under $17 over the last year.
If this is Intel’s coup de grace to AMD, the smaller company’s stock could go much lower.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
The Securities and Exchange Commission's Enforcement Division announced January 13 the heads of its newly specialized units spread throughout the country that are designed to crack down on financial wrongdoing. The Division announced the same day the newly created Office of Market Intelligence that is responsible for the collection, analysis, and monitoring of the hundreds of thousands of tips, complaints, and referrals that the SEC receives each year. Thomas Sporkin, who has served as Deputy Chief in the Office of Internet Enforcement at the SEC since 2001, will head the new Office of Market Intelligence.
According to the SEC, the specialized units and their Unit Chiefs are:
Asset Management. Will be led by Co-Chiefs Bruce Karpati and Robert Kaplan and will focus on investigations involving investment advisors, investment companies, hedge funds, and private equity funds.
Karpati was founder and head of the SEC's Hedge Fund Working Group, and has served as Assistant Regional Director for the New York Regional Office of the SEC. Kaplan has served as Assistant Director of the SEC's Division of Enforcement, and previously held positions as Assistant Chief Litigation Counsel and Senior Counsel/Staff Attorney in the Division.
Market Abuse. To be led by Daniel Hawke, this unit will focus on investigations involving large-scale market abuses and complex manipulation schemes by institutional traders, market professionals, and others. Hawke is Director of the SEC's Philadelphia Regional Office. The Market Abuse Unit Deputy Chief is Sanjay Wadhwa, who has been Assistant Regional Director for the New York Regional Office of the SEC.
Structured and New Products. To be led by Kenneth Lench, this unit will focus on complex derivatives and financial products, including credit default swaps (CDSs), collateralized debt obligations (CDOs), and securitized products. Lench has served as Assistant Director, Branch Chief, Assistant Chief Counsel, and Senior Counsel/Staff Attorney with the SEC's Division of Enforcement. The Structured and New Products Unit Deputy Chief is Reid Muoio, who has been an Assistant Director, Branch Chief, and Staff Attorney with the Division of Enforcement.
Foreign Corrupt Practices. To be led by Cheryl Scarboro, this group will focus on violations of the Foreign Corrupt Practices Act, which was passed in 1977 and revised in 1988, and which prohibits U.S. companies from bribing foreign officials for government contracts and other business. Scarboro has served as Associate Director, Assistant Director, Deputy Assistant Director, and Staff Attorney in the SEC's Division of Enforcement.
Municipal Securities and Public Pensions. To be led by Elaine Greenberg, this unit will focus on misconduct in the large municipal securities market and public pension funds including: offering and disclosure fraud; tax or arbitrage-driven fraud; pay-to-play and public corruption violations; public pension accounting and disclosure violations; and valuation and pricing fraud. Greenberg is the Associate Regional Director of the Philadelphia Regional Office of the SEC and has served as the Co-Chair of the Division's national Municipal Securities Working Group.
Comedian and actress Margaret Cho stopped by the WSJ Studio to talk with Speakeasy’s Barbara Chai about her new DVD, the coming season on Lifetime’s “Drop Dead Diva,” and her freshly-inked tattoo.
Follow Barbara Chai on Twitter: @barbarachai
The former chief counsel at the Securities and Exchange Commission’s exam division, John Walsh, has formed a Whistleblower Response Team with several of his colleagues at the law firm Sutherland Asbill & Brennan to help firms develop whistleblower response programs as Walsh says the SEC’s “initiative is beginning to show traction.”
Walsh, a 23-year veteran of the SEC where he played a key role in creating the Office of Compliance Inspections and Examinations (OCIE), including serving as OCIE’s chief counsel, said in a statement that the SEC’s Whistleblower program, which the agency expanded under Dodd-Frank, is beginning to “see results.”
Walsh cites the November report issued by the SEC detailing the first seven weeks of the Whistleblower program that found that between Aug. 12 and Sept. 30, the SEC received 334 whistleblower tips, an average of nearly 48 per week.
The SEC report notes that the most common complaint categories were market manipulation (16.2%), corporate disclosures and financial statements (15.3%), and offering fraud (15.6%). The commission received whistleblower submissions from individuals in 37 states, as well as from several foreign countries, including China (10) and the United Kingdom (nine).
“Senior SEC officials have stated publically that they are now receiving high-quality information,” Walsh said. “As a result, we believe it is critical that companies receive the most up-to-date information and proper counsel to effectively respond to whistleblower claims as they emerge.”
Other members of Sutherland’s Whistleblower response team are Cynthia Krus, Allegra Lawrence-Hardy, and Holly Smith. The legal team will help clients create effective whistleblower response programs, respond to whistleblower claims, and defend against SEC enforcement actions and civil litigation.
Walsh, the former associate director and chief counsel at OCIE, retired from the agency at the
In August, the SEC launched a web page that allows individuals to report a violation of the federal securities laws and apply for a financial award. The whistleblower program provides a monetary incentive of between 10% and 30% of sanctions the SEC collects for whistleblowers who voluntarily provide the agency with original information that leads to a successful SEC action with sanctions exceeding $1 million.
While 170 applicable enforcement judgments and orders issued from July 21, 2010 through July 31, 2011 included the imposition of sanctions exceeding the statutory threshold of $1 million, the SEC explained in its report, because the 90-day application period had not passed with respect to any of these actions as of the end of the fiscal year, applications for awards had not yet been processed. Accordingly, the commission did not pay any whistleblower awards during fiscal year 2011.
CEO Laurence D. Fink of BlackRock, Inc. (NYSE:BLK), wants corporations to adopt shareholder friendly practices, according to Bloomberg. The company holds at?a minimum?5% of the shares of 2,400 companies worldwide. In letters to 600 of the firm’s biggest holdings,?Fink wrote?that BlackRock seeks to “engage in dialogue” with management to address issues that will be raised this year at shareholder meetings.
Shares of Johnson Controls, Inc. (NYSE:JCI) are trading 8.09% lower today, with consensus?of $44.03B. Johnson Controls lowers their Euro assumption to $1.30 from $1.35,?having seen Europe auto production at 20.1M units, +1.5%.
Versus a consensus of $5.06B,?Union Pacific Corporation (NYSE:UNP) reports Q4 revenue of?$5.1B.
Shares of Morgan Stanley (NYSE:MS) are trading 4.5% higher today, as the company is rumored to be cutting senior banker and trader pay 20%-30%, according to?Bloomberg. Sources with knowledge of the plan were cited.
Shares of UnitedHealth Group Inc. (NYSE:UNH) are trading 2.97% lower today, after?FY12 revenue $107B-$108B vs. consensus $108B is being projected.
Shares of Knight Capital Group Inc. (NYSE:KCG) are trading 9.28% higher today, following reports of Q4 revenue $341.3M vs. consensus $312.47M. Q4 Electronic Execution Services projects revenue $40.6M vs. $37.1M. And Market Making revenue is projecting?$187.4M vs. $111.0M.
Shares of? 8×8, Inc. (NASDAQ:EGHT) are trading 24.11% higher today, after it was revealed that business customer churn decreased to a record low of 2.0%, compared to a churn rate of 2.2% in the same period in 2011 and 2.1% in the 2012. Ending Q3 with 27,677 business customers, 8×8 reported Q3 revenue $23.3M vs. consensus $22.09M.
To contact the reporter on! this st ory: Mark Lawson at staff.writers@wallstcheatsheet.com
To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com
