Saturday, April 28, 2012

New Zealand Real Estate Rallies

The Real Estate Institute of New Zealand (REINZ) and the latest QV index both indicate New Zealand residential property values are trending up and prices in February showed strong gains. Total sales volume was up 37% last month from a year ago, marking the highest peak since 2008, while median prices edged up 1.1% compared to February 2011. The news is favorable, but enthusiasm remains muted due to the marginal price gains with consideration to the large increase in sales. Auckland is seeing the most growth, although most areas in the country experienced a boost since the last data report. For more on this continue reading the following article from Property Wire.

The residential property market in New Zealand saw strong sales in February and prices were continuing to edge up, according to two leading market reports.

The latest data from the Real Estate Institute of New Zealand (REINZ) indicates strong sales growth in the residential housing market, with 6,168 unconditional sales for the month. The volume of sales is up by 37% or 1,666 sales compared with the same time last year, and is the best February result the market has recorded since 2008.

It also shows that the national median house price remained steady for the third straight month at $355,000 and is up 1.4% compared with February 2011.

While the latest QV index shows that values are now up 1.1% over the past three months, 2.9% up over the past year, and are 2.9% below the previous market peak of late 2007.

According to REINZ all regions apart from Otago and Canterbury/Westland recorded double digit growth compared to February last year. Although Canterbury/Westland’s sales volume more than doubled compared to February last year, the market was impacted by the February 22 earthquake and its aftermath.
Otago recorded the highest monthly increase, up 6.3%, followed by Hawkes Bay with 4.6%, and Waikato/Bay of Plenty and Northland, both with 3.3%. Compared to February 2011, Canterbury/Westland also recorded the highest rise in prices, up 14.0%), followed by Waikato/Bay of Plenty at 1.9% and Otago at 1.8%.
‘The real estate market in February has built on the strong results in December and January with a 37% lift in sales across the country compared to February last year and the highest number of transactions in a February month since 2008,’ said REINZ chief executive Helen O’Sullivan.
‘While agents are seeing more activity and more positive sentiment from buyers in most places this is not translating into significant price increases. Agents in a number of areas continue to report listing shortages. Despite the increased number of transactions, buyers are remaining cautious with the days to sell measure down by just one day, and still above the long term average,’ she explained.

‘While most of the focus is on Auckland, as the nation’s largest real estate market, its sales volume change and price movements are very much middle of the pack, with a number of the provincial markets showing stronger year on year sales volume and price growth. The improvement in the Canterbury/Westland market is remarkable especially given the complexity of a sale transaction in a post-quake environment,’ she added.

QV research director, Jonno Ingerson, pointed out that the rises are very modest compared with previous years. For example, from 1993 to 1997 values increased between 8% and 14% per year and in 2002 to 2007 values generally increased by 10% to 15% per year.

‘There has been a noticeable increase in activity in the market over the last month, which is typical for this time of the year. While this level of activity may be higher than the last few years, it is still below long term average. There is still a shortage of properties for sale in some areas, and in general buyers are acting cautiously and carefully,’ Ingerson explained.

The Auckland area remains the fastest growing of the main centres, up 1.7% over the past three months and 4.8% up over the past year. Values are now above the previous market peak by 2.3%. This increase across Auckland is being led by the old Auckland City which has increased in value by 6.5% over the past year and is 5.1% above the 2007 market peak.

‘There appears to be strong demand in the central areas of old Auckland City such as Ponsonby, Grey Lynn and Sandringham. Healthy sales prices are being achieved, with good properties coming to the market. Some buyers are staying cautious and sticking to their upper limit whereas others seem to have few financial constraints and as a result auction prices are setting new levels,’ said QV valuer Glenda Whitehead.

‘Buyers in the North Shore are being driven by location, as opposed to price, with activity patchy.  Some suburbs are experiencing good turnover of properties whilst others are quite stagnant.  The number of private sales is also noticeable,’ she explained.

‘In the West more renovations are noticeable, with people wanting to upgrade or extend their homes to meet their needs as opposed to incurring buying and selling costs. In comparison, the market in the Manukau area is active around the $500,000 to $800,000 range, even up to $1 million. Houses in the typically desirable areas such as old Howick properties with sea views, and houses in sought after school zones are experiencing good sales,’ she added.

Values in Hamilton remain relatively stable, rising 0.9% over the past year, but are currently 11.1% below the 2007 peak. ‘The number of sales appears to be the highest for five years, with homes in the mid to upper bracket appearing to be selling well especially. This renewed interest however, is not stimulating prices with values remaining consistently static,’ said QV valuer Richard Allen.
Tauranga values have also remained relatively static, up 1% over the past year but remaining 11.3% below the 2007 peak. ‘Many homes, particularly in the better regarded suburbs, are slightly overpriced in this market.

Buyers are still looking to pay a sharp price, which is reflected in the fact that realistically priced well presented homes in the low to mid value range are selling at a good rate,’ explained QV valuer Shayne Donovan-Grammer.

In Wellington values are the same as they were a year ago, having dropped 2% for the first six months, then steadily increasing for the last six months. ‘Across Wellington, prices seem to be firming and more listings are coming to the market.  Buyers are still being cautious, especially with the public sector restructuring and its effect on job security in the region,’ said QV valuer Pieter Geill.

Apart from Auckland City values in Christchurch have grown faster over the past year than any of the other main centres, rising 4% and are now level with the 2007 market peak.

Waimakariri District has increased 12% over the past year and Selwyn District 10.8%. Both areas are by far the fastest increasing parts of the country. They are also the highest about the 2007 market peak at 6.5% and 5.9% respectively.

‘Rents continue to rise with high demand placed on rental properties from people whose homes were uninhabitable due to earthquake damage, people who need to relocate whilst they carry out repairs, or from those who are moving to the city to help with the rebuild. This is making property investors look at what potential some properties now have,’ said QV valuer Richard Kolff.

‘Lifestyle properties are also seeing high demand, with agents saying there is an undersupply of properties for sale in the $700,000 to $1 million range,’ he added.

Dunedin values are 2.3% above the same time last year, although the growth of 4% over the past six months is even faster than Auckland City. ‘The lower end of the market is still seeing reasonable demand with purchasers now prepared to take on more risk with lower priced houses. This is in contrast to six months ago when most of the demand was for well presented dwellings with no deferred maintenance issues,’ said QV valuer Tim Gibson.

Values in most of the provincial centres have stayed relatively stable for the past three months, with the exception of Gisborne which is down 3.5% and Wanganui down 2%. Over the past year values are within 2% of last year’s value in all centres apart from Napier which is down 2.2%, Wanganui down 5.2% and Queenstown Lakes down 2.7%.

Ciena: Soleil Analyst Downgrades To Sell On Valuation Basis

Soleil Securities analyst Michael Genovese this morning downgraded shares of Ciena (CIEN) to Sell from Hold, while lifting his price target to $15, from $14. Note that the stock closed yesterday at $18.23.

“We somewhat reluctantly put a Sell rating on the shares,” he writes. “We like both the optical upgrade cycle story and Cinea’s positioning in long haul and metro transport, optical and OTN switching and carrier Ethernet….However, we believe the stock is significantly ahead of itself and we expect it to underperform in the near term due to disappointing guidance provided at the analyst day and significantly heightened integration/execution risk over the next several quarters.”

Genovese noted several items from yesterday’s analyst day that he didn’t like:

  • Quarterly run rate for the old Nortel metro business is $200 to $210 million, below his estimate of about $250 million.
  • Post-integration operating margin target of 7%-10% compares to his 10% estimate.
  • Combined opex of $195 million to $200 million is above his estimate of $175 million to $180 million.

CIEN is down 63 cents, or 3.5%, to $17.60.

Friday, April 27, 2012

HZHI, Horizon Health’s E-Commerce System in the Multi-billion Assistive Technology Market

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Tuesday November 17, 2009 Stock Report!

HZHI, Horizon Health International Corp., HZHI.PK

HZHI through its US and Canadian Subsidiaries is at present servicing all of North America through its E-Commerce System, as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping experience for aids for daily living, disability products, ergonomic solutions and leading-edge assistive technology through online retail stores across North America.

BCC Research reported that: “The US market for assistive technology is expected to be worth $ 38.2 billion in 2008, up from 36.4 billion in 2007. This should increase to $49.3 billion in 2013 , a compound annual growth rate of 5.3%”

Recently, HZHI reported the successful launch of their e-commerce website, that provides clients access to in excess of 4,000 products, competitive pricing and a safe, secure and user friendly shopping experience (Product selection includes adaptive technologies, orthopedics and ergonomics).

In May of 2009 Samson Industries, HZHI’s Canadian Subsidiary, entered into a Licensing Agreement with MEDIchair Calgary, Canada. Under the terms of the licensing agreement, MEDIchair Calgary will pay to HZHI’s wholly owned subsidiary, a monthly license fee of $250 plus 50% of the profit realized from on-line sales generated by MEDIchair through the website which is owned and operated by Samson Industries.

The Agreement allows MEDIchair-Calgary (with estimated annual sales of $ 5 million plus) to license HZHI’s website ( and call-centre for live customer service and order processing. MEDIchair Calgary is just one of 70 franchisees of MediChair Corporate) a division of Lifemark Health. HZHI will be entering into discussions with all the franchisees to license its website. Such a network will provide HZHI with an economic access to a greater customer base and demographic, an estimated market well over $100 Mio.

But that’s not all! Now HZHI will post and sell its products on eBay

Through Its US Subsidiary SunCity Ventures, HZHI has registered with eBay US as a Vendor-Company under the name �Horizon Health�, and will post and sell its products on eBay through their online shopping network.

HZHI launched a product awareness campaign. HZHI will be show-casing products through existing e-commerce sites to stimulate sales through online transactions - .

Just take a look to HZHI 30 days chart

Horizon Health International Corp.
Delbert G. Blewett

Add HZHI to your Watch List!, do your homework, and like always BE READY for the ACTION!

Merrill Lynch Boosts Asset Minimum

Merrill Lynch is raising its minimum asset level for client households to $250,000 from $100,000 this year, the Bank of America unit said in early January. The move, experts suggest, appears to be one more way for the unit to boost results of its high-end wealth-management business while carving out an expanding market for its mass-affluent Merrill Edge operations.

Merrill Lynch will not change payouts tied to existing household relationships of under $250,000 but will now pay out 20 percent on new accounts in this category. Plus, if an advisor has more than 20 percent of his or her book tied to relationships in which the household has assets of under $250,000, there will be no payouts for new household clients with asset levels of this size.

“Moving said minimum from $100,000 to $250,000 sends a loud message of what the firm values,” said Chip Roame, head of Tiburon Strategic Advisors, in an interview. “And it makes being an FA more challenging.”

On the one hand, “Merrill Lynch is back-filling service for these smaller accounts with Merrill Edge, so the firm will be able to capture all types of clients,” explained the Northern California-based consultant. And on the other, “The firm will allow its FAs to still take on and service these smaller accounts to a limited degree when the FAs see the upside.”

“A lower payout on smaller accounts is a well-founded business strategy,” stressed Roame. “Similarly, a policy that no payment will be earned after a book is comprised of more than 20 percent of these small accounts is another solid business strategy; I like it, too.”

In 2011, BofA said it was on track to nearly double thenumber of Merrill Edge advisors serving mass-affluentclients in branches and call centers to more than 1,000 by year-end. •

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Thursday, April 26, 2012


The markets opened higher this morning and all three major indexes have managed to hold onto most of their gains of the early morning. The S&P 500 index topped 1,300 for the first time since last summer, but hasn�t been able to remain at that level. The US dollar is trading weaker against the euro, but stronger against both the British pound and the Japanese yen. The dollar index is down a bit more than -0.5% at
81.071. Energy companies have done well today, even though natural gas prices have fallen below $2.50/thousand cubic feet. WTI crude oil is up nearly 2% at $100.62/barrel, while Brent crude is up only fractionally at $111.38/barrel. Gold is up more than 1% at $1,650.70.

The unofficial closing bells put the DJIA up about 60 points to 12,482.22 (0.48%), the NASDAQ rose more than 17 points (0.64%) to 2,728.08, and the S&P 500 rose 0.35% or nearly 5 points to 1,293.66.

There were several analyst upgrades and downgrades today, including FedEx Corp. (NYSE: FDX) cut to �hold� at Jefferies; BHP Billiton Ltd. (NYSE: BHP) started as �buy� at Goldman Sachs; Intel Corp. (NASDAQ: INTC) cut to �neutral� at JPMorgan; Tesla Motors Inc. (NASDAQ: TSLA) raised to �buy� at Wunderlich; and Panera Bread Co. (NASDAQ: PNRA) raised to �overweight� at Morgan Stanley.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: McMoRan Exploration Co. (NYSE: MMR) is up 4.55% at $13.32; TD Ameritrade Holding Corp. (NASDAQ: AMTD) is down -1.72% at $16.02; Wells Fargo & Co. (NYSE: WFC) is up 0.67% at $29.81; Citigroup Inc. (NYSE: C) is down nearly -8% at $28.29; and Check Point Software Technologies Ltd. (NASDAQ: CHKP) is up nearly 8% at $54.93.

Other standouts from today include the following stocks:

Ku6 Media Co., Ltd. (NASDAQ: KUTV) is up nearly 154% at $3.50. The Chinese online video company has signed an agreement with Google Inc. (NASDAQ: GOOG) to offer international viewers a Chinese video channel on YouTube.

Convio Inc. (NASDAQ: CNVO) is up nearly 48% at $15.89, after setting a new 52-week high earlier. The provider of software to non-profit organizations has agreed to be acquired by Blackbaud Inc. (NASDAQ: BLKB) for $16/share, or about $312 million.

Venoco Inc. (NYSE: VQ) is up nearly 31% at $10.05. The independent oil and gas company is being taken private by its CEO. We have more coverage here.

R.R. Donnelly & Sons Co. (NYSE: RRD) is down nearly -16% at $12.12 after posting a new 52-week low of $12.08 earlier. The business services company said revenues for 2011 are going to be lower than expected.

Carnival Corp. (NYSE: CCL) is down nearly -14% at $29.57. The cruise ship operator is sinking following the disaster off the Italian coast that has left 11 dead and 29 missing. We have more coverage here.

Stay tuned for Wednesday. Federal Reserve Bank governor Daniel Tarullo is giving a speech. We have the following events on the schedule (all times Eastern):

  • 7:00 a.m. – Mortgage Bankers Association mortgage applications
  • 8:30 a.m. – Producer price index
  • 9:15 a.m. – Federal Reserve report on industrial production
  • 10:00 a.m. – Housing market index

Paul Ausick

NYSE Listing of Brookfield Renewable Energy Partners Should Boost Unit Price

Brookfield Renewable Energy Partners LP (BRPFF.PK) was forged in November from the union of the former Brookfield Renewable Power Income Fund and renewable power assets of parent Brookfield Asset Management (BAM).

The result is the world�s largest bet on hydropower, with a growing $13 billion portfolio of 4.8 gigawatts in Brazil, Canada and the U.S.

The deal � which exchanged one unit of the new limited partnership for each of the income fund units on a tax-free basis � includes an immediate 5% boost to Brookfield Renewable�s quarterly distribution to 33.75 cents Canadian. Meanwhile, two gigawatts of new projects will fuel annual distribution growth of 3% to 5% through 2015.

Brookfield Renewable�s current sales are fully contracted, mostly to utilities and government entities, at inflation-protected rates for an average of 24 years. That includes the 10% of output from wind farms.

Pre-contracting before beginning construction on new plants further reduces risk. And this merger sharply reduces quarterly cash flow fluctuations. Dams protect water flows to newly added U.S. plants (48% of capacity), and plants in Brazil (14%) receive cash based on capacity.

Most Canadian limited partnerships restrict U.S. investment. Brookfield Renewable, however, intends to list on the New York Stock Exchange to �deepen its investor base and improve ability to fund growth.�

This listing alone will boost Brookfield Renewable�s unit price, which slipped from all-time highs reached in early November due to worries about a European financial crisis from which the company is largely immune.

Click to enlarge:

Tickers in the article:

Where's the Cash Coming From at Brady?

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Brady (NYSE: BRC  ) , whose recent revenue and earnings are plotted below.


Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Brady generated $130.5 million cash while it booked net income of $1.0 million. That means it turned 9.7% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Brady look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.


Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 76.1% of operating cash flow coming from questionable sources, Brady investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 5.5% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts payable, which represented 16.9% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

  • Add Brady to My Watchlist.

Wednesday, April 25, 2012

Microsoft: Barclays Cuts Target To $32, But Keeps Buy Rating

Barclays Capital analyst Israel Hernandez this morning reiterated his Buy rating on Microsoft (MSFT), but� trimmed his target price on the stock to $32, from $35, citing “increasing competitive concerns” in smartphones and tablets.

“While we see little risk to estimates given various enterprise product cycles, we believe multiple may remain under pressure as investors assess potential long term share implications as emerging computing platforms from Apple and Google gain momentum,” he writes in a research note.

MSFT today is off 11 cents, or 0.4%, to $25.89.

Tuesday, April 24, 2012


According to Reuters, the head of BHP Billiton, the world’s largest miner, stepped down and the company announced a $10 billion share buyback sending the stock up 6%.

Reuters writes that net profits at Roche rose 34% due to strong sales of its cancer treatments.

Reuters also reports that both profits and the outlook at Cisco (CSCO) beat Wall St. expectations.

Reuters writes that the CEO of Nike (NKE) expects sales to rise as much as 53% over the next five years to $23 billion.

Reuters reports that 8,000 workers left Ford (F) in January as part of a buy-out offer aimed at cutting costs.

The Wall Street Journal says that News Corp’s (NWS) MySpace is working with EBay (EBAY) on a deal that would allow members of MySpace to buy and sell goods using the auction company’s technology. The deal is slowing the negotiations between Google (GOOG) and MySpace for a deal that would make Google the sole provider of text ads on the big social network site. The deal could be a boost the Ebay’s Paypal system.

Amazon (AMZN) and Tivo (TIVO) have announced a partnership to allow movies downloaded from the new Amazon system to be stored on Tivo and played back on TVs.

Facebook and Comcast (CMCSA) have announed a deal to allow independent film makers who put content on the community site to have it viewed on TV.

The New York Times writes that Wal-Mart (WMT) and one of its unions will present a series of proposals aimed at providing universal healthcare.

The New York Times writes that Ford (F) will resurrect its Taurus brand.

The FT writes that Apple’s (AAPL) Steve Jobs has suggested that all music downloads be available without digital rights management protection setting off a debate about protecting music copyrights.

Barron’s writes that shares in Citrix (CTXS) may benefit from the launch of Vista. The company produces a product that allows customers to run Microsoft (MSFT) Windows without owning Windows.

Douglas A. McIntyre

Apple: Will Anti-Flash Stance Trigger Federal Antitrust Probe?

Apple (AAPL) could face a government antitrust probe over the company’s new policy of requiring software developers who create apps for the iPhone and iPad to use only Apple programming tools. The situation is related to Apple’s refusal to support the Adobe (ADBE) Flash platform.

The New York Post this morning reports that the FTC and the Department of Justice are “locked in negotiations” over which agency will take the lead on the company on the inquiry. The story notes that the fact that the government is looking at the situation does not necessarily mean any action will be taken against Apple. The story said both agencies declined comment.

There have previously been reports that Adobe plans to sue Apple over its bar on Flash.

Monday, April 23, 2012

Miners also broadly up during Monday morning trading

Gold Silver GLD IAU SLVGold and silver were up in early trading Monday morning. Spot gold was trading some 0.2% higher at 10:15 a.m., with a bid price of $1,619.50 and an ask price of $1,620.50. Spot gold traded as high as $1,623.40 and as low as $1,613.20. The London afternoon reference price fix came in at $1,615, down $1.50 from its Friday price, according to Kitco market data.

Spot silver was up nearly 1.4%, bid at $29.15 per ounce with an ask price of $29.25. The morning high as of time of writing was $29.35 and the low was $28.78. Monday�s reference price was set at $28.85 in the London a.m., 55 cents per ounce lower than Friday’s price fix.

The European Union’s sovereign debt problems continue to be at the forefront of market concerns. Spain and Italy will hold bond auctions on Thursday and Friday. Also of concern are the needs of EU banks to raise equity capital. Italy’s UniCredit is holding a rights issue, for which share prices have been “steeply discounted” to attract buyers, Fox Business reported.

Other potential market movers are the Thursday releases of the Commerce Department’s December retail sales report and the Labor Department’s weekly initial unemployment claims report. On Tuesday, the Federal Reserve will release its Beige Book, which summarizes economic and financial activity gathered and analyzed across all 12 U.S. Federal Reserve Bank districts.

A strengthening dollar and weakening euro continue to limit the upside for gold and silver, according to BullionVault‘s London Gold Market report, though gold continues to hold above its three-year support at $1,544.

&! #8220;Th e strength of the dollar is playing a role in limiting appetite (for commodities),” said Nick Trevethan, a Singapore-based senior commodity strategist at ANZ Bank. “But Europe is still a basket case and investors are hoping to see more easing out of the European Central Bank at some point.”

Turning to U.S. exchange trading, gold and silver trusts were moving higher.

  • The SPDR Gold Trust (NYSE:GLD) was showing gains of 0.3%.
  • The iShares Gold Trust (NYSE:IAU) was up some 0.16%.
  • The iShares Silver Trust (NYSE:SLV) was up 1.5%.

Gold and silver mining ETFs were up mid-morning as well.

  • The Market Vectors Gold Miners ETF (NYSE:GDX) was around 0.7% higher.
  • The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was up around 1.9%.
  • The Global X Silver Miners ETF (NYSE:SIL) was around 0.25% higher.

Gold mining shares were heading higher, Newmont Mining (NYSE:NEM) the exception.

  • Agnico-Eagle Mines (NYSE:AEM) was showing gains of around 0.25%.
  • Barrick Gold (NYSE:ABX) was up some 0.8%.
  • Eldorado Gold (NYSE:EGO) was up 0.15%.
  • Goldcorp (NYSE:GG) was 1.7% higher.
  • Newmont Mining was down around 0.3%.
  • NovaGold Resources (AMEX:NG) was up about 0.25%.

Silver mining shares also were higher mid-morning Monday.

  • Coeur d’Alene Mines (NYSE:CDE) was moving higher, up just over 1%.
  • Hecla Mining (NYSE:HL) was up around 1.25%.
  • Pan American Silver (NASDAQ:PAAS) was down 0.4%.
  • Silver Wheaton (NYSE:SLW) was showing gains of more than 0.3%.
  • Silver Standard Resources (NASDAQ:SSRI) was up around 0.2%.

As of this writi! ng, Andr ew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.

Best Stocks To Own For 2015

Successful investing is about concentrating on the factors that really count.

For us Fools, few things are more important than finding honest management teams with a whole lot -- reputations, careers and, preferably, a boatload of common stock -- riding on the success of the business.

Best Stocks To Own For 2015:Tandy Leather Factory Inc. (TLF)

 Tandy Leather Factory, Inc. operates as a retailer and wholesale distributor of leather and related products in the United States, Canada, and the United Kingdom. The company?s leather and related products consist of leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It also manufactures leather lacing and do-it-yourself kits. As of June 14, 2011, the company distributed its products through its 29 Leather Factory stores and 77 Tandy Leather retail stores in the United States and Canada, as well as one combination wholesale/retail store located in Northampton, the United Kingdom. It sells its products to individuals, wholesale distributors, tack and saddle shops, western stores, craft stores and craft store chains, other large volume purchasers, manufacturers, and retailers, as well as institutions, such as prisons and prisoners, schools, hospitals. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1980 and is based in Fort Worth, Texas.

Best Stocks To Own For 2015:Superior Uniform Group Inc. (SGC)

 Superior Uniform Group, Inc. manufactures and sells a range of uniforms, corporate identity apparel, career apparel, and accessories in the United States. Its principal products include uniforms and service apparel for the personnel of hospitals and health facilities; hotels, commercial buildings, residential buildings, and food service facilities; retail stores; general and special purpose industrial uses; commercial enterprises, including career apparel for banks and airlines; public and private safety and security organizations; and miscellaneous service uses. The company also offers various products directly related to uniforms and service apparel, such as boots and sheets; and industrial laundry bags. Superior Uniform Group, Inc. markets its products under the brand names of Fashion Seal, Fashion Seal Healthcare, Martin?s, Worklon, UniVogue, and Blade. The company was formerly known as Superior Surgical Mfg. Co., Inc. and changed its name to Superior Uniform Group, Inc. in 1998. Superior Uniform Group, Inc. was founded in 1920 and is based in Seminole, Florida.

Best Stocks To Own For 2015:Melco Crown Entertainment Limited (MPEL)

 Melco Crown Entertainment Limited, through its subsidiaries, engages in the development, ownership, and operation of casino gaming and entertainment resort facilities primarily in Macau. It owns and operates City of Dreams, an integrated resort development, which features approximately 400 gaming tables and 1,300 gaming machines; guest rooms; a stage performance theater; approximately 20 restaurants and bars, 69 retail outlets, and an audio visual multimedia experience; and recreation and leisure facilities, including health and fitness clubs, swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau that features approximately 228 gaming tables; hotel rooms consisting of suites and villas, and in-room entertainment and communication facilities; restaurants and dining facilities; and non-gaming entertainment venues, including a spa, gymnasium, outdoor garden podium and a sky terrace lounge. In addition, it owns and operates Mocha Clubs, which provide single player machines with various games consisting of progressive jackpots, as well as multi-player games where players on linked machines play against each other in electronic roulette, baccarat, and sicbo; Taipa Square Casino that features approximately 31 gaming tables servicing mass market patrons. The company was formerly known as Melco PBL Entertainment (Macau) Limited and changed its name to Melco Crown Entertainment Limited in May 2008. Melco Crown Entertainment Limited was incorporated in 2004 and is based in Central, Hong Kong.

Best Stocks To Own For 2015:VeriSign Inc. (VRSN)

 VeriSign, Inc. provides Internet infrastructure services to various networks worldwide. The company provides domain name registry services and infrastructure assurance services. It offers registry services that operate the authoritative directory of various .com, .net, .cc, .tv, and .name domain names, as well as the back-end systems for various .jobs and .edu domain names; and network intelligence and availability services that provide infrastructure assurance to organizations comprising Verisign iDefense security intelligence services, managed domain name system services, and distributed denial of service mitigation. VeriSign, Inc. was founded in 1995 and is headquartered in Reston, Virginia.

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The well to do drove Christmas week spending this year. Perhaps the prospect of extended tax cuts was part of the fuel. According to Gallup, “An upper-income spending splurge led the way to strong self-reported spending during Christmas week 2010. Upper-income Americans’ self-reported consumer spending in stores, restaurants, gas stations, and online averaged $183 per day during the week ending Dec. 26 — up from $126 during t
he same week in 2009.”

The number is an extraordinary 45% improvement.

“Americans’ overall self-reported spending surged to an average of $85 per day during the week ending Dec. 26 — up from $77 during the prior week and $66 during the first two weeks of December. As a result, spending during Christmas week 2010 exceeded that of 2009 and 2008.”

None of the information in the Gallup data allows for a forecast of whether this aggressive consumer spending will last into next year. It is possible that a great deal of the expenditures were made on credit. This would mean people are re-leveraging themselves. and as real wages remain flat, the ability to buy goods and services next year may well drop off.

Methodology:�Results are based on telephone interviews conducted as part of the Gallup Daily tracking survey during the week ending Dec. 26, 2010, with a random sample of 2,464 adults, with weekly random samples of about 3,000 adults for each of the first three weeks of December, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.

Douglas A. McIntyre

Webster Financial: Well-Capitalized Regional Bank

(Click to enlarge)

Regional bank Webster Financial (WBS) has been recovering successfully from the financial crisis, steadily increasing both earnings and tangible book value. A recent pullback, from a 52 week high of 23.73 to the 20 area, represents a buying opportunity.

I wrote the stock up favorably in September 2009, when it traded at 12.45, as a follow the smart money play. Warburg Pincus made an equity investment at 10 per share, received a board seat, and has been rewarded with handsome profits. I originally saw 27 within a 2 to 4 year time frame, and still believe that a target of 26 is realistic for late 2013.

This article is an update, focusing on recent events, valuation, and an options strategy.


Per the 10-Q:

Webster Financial Corporation (together, with its consolidated subsidiaries, "Webster," the "Company," our company, we or us), is a bank holding company and financial holding company under the Bank Holding Company Act of 1956, as amended, headquartered in Waterbury, Connecticut and incorporated under the laws of Delaware in 1986. Webster’s principal assets at March 31, 2011 were all of the outstanding capital stock of Webster Bank, National Association ("Webster Bank").

Webster, through Webster Bank and various non-banking financial services subsidiaries, delivers financial services to individuals, families and businesses throughout New England and into Westchester County, New York. Webster provides business and consumer banking, mortgage lending, financial planning, trust and investment services through 176 banking offices, 488 ATMs, mobile banking and its Internet website ( Webster Bank offers, through its HSA Bank division, health savings accounts on a nationwide basis. Webster also offers equipment financing, commercial real estate lending and asset-based lending.




Book Value

Tangible BV





















According to Jaywalk, analyst opinions have been developing favorably so far this year. While WBS is not rated highly on an absolute basis, it is rated higher than 94.5% of its industry. A rose among the thorns. Certainly the steady improvement in earnings and book value merits consideration.

TARP and Warrants

The company received 400 million of TARP assistance, which has been repaid, partly from earnings, and partly by the issuance of additional shares. Treasury announced that the 3.28 million warrants received as part of the TARP transaction were to be auctioned Thursday, June 2nd.

The warrants, which entitle the owner to buy the stock for 18.18 until 11/21/2018, sold for 6.30 at auction, with Webster repurchasing 69.5% of them. The repurchase implies that shares will be worth at least 24.48 before the options expire, and Webster's involvement at the price demonstrates management's opinion as to the future value of the shares.


Webster is well-capitalized by regulatory standards. From the 10-Q:

(Click to enlarge)


During the crisis, the dividend was cut to .01 quarterly. On April 26, the company announced an increase, to .05. That works out to 1% at today's share prices: there is room for improvement. Future increases will depend on performance and capital needs.

Performance Ratios

Net interest margin as of 3/31/2010 was 3.44%, up from 3.28% as of the same quarter last year. For 2008 through 2010, net interest margins were 3.28%, 3.13% and 3.34%.

The efficiency ratio at 67.61% continues to disappoint. Full year ratios for 2008 through 2010 were 62.38%, 65.92% and 66.49%. A ratio of 55% is attainable for a bank of this size, and this is developing in the wrong direction. According to the 1Q 2011 earning conference call presentation, the company's goal is to manage to a ratio of 60% or lower, over the 2011 to 2013 period.

It should be noted that Webster is service oriented, and that providing proper service in the wake of the financial crisis may be labor intensive. Nevertheless, the efficiency ratio does constitute a reservation for this investment and I plan to monitor it quarterly.


At an Investor Day on 9/23/2010 (no longer available on the website, but I secured a transcript) Gerald Plush, CFO at the time, suggested a range of 9% to 11% would be appropriate for return on capital. Projecting tangible book to increase to 15.66 over the next two years, and applying 10% return on capital to that, earnings of 1.57 would be indicated. A P/E of 15, considering the conservative returns and expected growth, would call for a share price of 24.

FINVIZ lists a target price of 24.17.

Consensus estimates for 2013 currently stand at 1.76. The investment banks are coming under hostile scrutiny and potential regulatory pressure in the form of capital requirements intended to reduce systemic risk. Under those conditions, large and well capitalized regional banks may do well. A period of consolidation is likely, which should increase values as deals are done. I'm investing on the basis that shares will trade at 26 by the end of 2013. If that target is reached, shares will return 11% appreciation plus the 1% dividend.

Options Strategy

WBS is optionable, no LEAPS, with implied volatility at 27.85%. There is not a great deal of open interest, and quoted spreads are wide. However, I've been able to get pricing which I regard as fair over the year and a half I've been trading this situation. After the recent dip brought share prices back into a buy area, I made the following trade:

The outcome as of the first expiration date is presented in 4 scenarios - static, expected, 52 week high and 52 week low. The expected case assumes that share prices advance 11% annualized, which amounts to a 4.3% increase by the first expiration date in October. The attraction here is the 40% annualized return on the expected case. I'm not asking this stock to do much, just meander up toward a conservative target. If it performs as expected, returns will be excellent.

The best and worst cases considered illustrate one drawback of this strategy - the maximum probable loss exceeds the maximum possible gain. However, book value and tangible book value are available as margin of security. Also, the January 2012 12.5 call will still have 3 months remaining in October, and the investor can sell another covered call, collecting income while waiting for the share price to recover.

Disclosure: I am long WBS. I'm long WBS by a combination of diagonal and vertical call spreads

Global Investing Roundups

Agricultural producers are being hit with yet another rising input cost plus a lot of decision making uncertainty surrounding the emergence of superweeds immune to Roundup.

Roundup Ready corn, soy, and cotton have been the norm in America during this past decade and longer. The seeds are used for 90% of soy and 80% of corn plantings. Roundup is used four times that of any other herbicide. But, nine weeds, including pigweed, horseweed and Johnsongrass, on millions of acres in more than 20 states in the Midwest and south have now developed immunity to Roundup. It was fun and easy while it lasted, but it didn't last long, did it?

Though this story has been known for some time, the June 4, 2010 WSJ did a front page article titled Superweeds Hit Farm Belt, Triggering New Arms Race by Scott Kilman. This is an important story. The issues resulting from Roundup resistant weeds will shake some of the efficiencies out of the modern industrialized agriculture system itself.

Every ag investor's poster-child for performance, Monsanto (MON), has had a tough year. Its stock is down 39%. The Roundup patent expired years ago and now cheap Chinese versions compete on international markets. The company's high priced GMO's haven't been embraced by seed buyers due to reaching a price-backlash breaking point this year. And now this. Resistant weeds popping up everywhere.

The WSJ article uses, as an example, an Arkansas cotton and soybean farmer who resorted to employing a crew of 20 laborers to attack weeds this year, plus a return to the use of the old highly toxic weed killer, paraquat. The cost of eliminating weeds on farms such as this has doubled in just a few years.

Still, when given a choice, farmers will pay more to reduce weeds rather than return to hand removal methods.

There is a new race under way for d! evelopme nt of new seeds and chemical combinations. Monsanto's monopoly is crumbling. DOW is working on seeds which resist the 65-year-old 2-4-D. However, spray drift from the toxic 2-4D will kill grapes and other desirable nearby crops. It is also said to disrupt hormones in trout, rodents and sheep. Another chemical, dicamba, will kill the weeds, but also kills the soybeans, so Monsanto is at work making a dicamba-resistant soybean. Bayer (BYERF.PK) is working with isoxaflutole. Syngenta (SYT) is testing Callisto use with soybeans. Dupont (DD) is working on soybeans and corn which can resist both Roundup and other herbicides.

Monsanto is also considering offering an inexpensive chemical to Roundup users to supplement Roundup and kill the resistant weeds. After the Monsanto dominated system has been in place for so long, these aforementioned companies are eager to regain market shares and see the failure of Roundup as a great opportunity.

In a nutshell, more and more weeds are growing resistant to Roundup. The current Monsanto agricultural model has allowed for larger and larger farms run with less and less labor, even less fuel. Consequently, we've adopted policies which have price supported overproduction and mega farms.

Now that farmers are looking towards returning to the use of more toxic chemicals to sterilize fields again, such as 2-4-D, I would expect some opposition and questioning from various watchdogs and policy makers. Some producers may choose to return to the old method of hired hand removal instead (think teenagers or migrant workers).

Eventually, a reversal towards smaller farms and less production of corn, soybeans and cotton may even result. Also, for a few years, U.S. input costs may escalate while other regions (not yet seeing superweeds) continue to use lower priced Roundup, making the cost of production lower in South America, for example. Consequent rising input costs here in the U.S. will include potentially higher new GMO seeds, chem! icals, l abor, and fuel. The volume of chemical use will potentially become much greater, more toxic, and more expensive.

That, to me, suggests, that in combination with our fragile domestic and global economy, strengthening dollar, potentially higher future fuel prices, and prospects for (most likely) lower commodity reimbursement, production itself will be forced to decline to essential levels at some point in the future.

Disclosure: No positions held.

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It is not too unusual for rumors to circulate that certain components of economic data contained errors or were just wrong in an instance where the actual number is so far off from expectations.� This morning there was a rumor that the jobs data on the non-farm payrolls had an error.� The market was expecting a reading of -525,000 or -530,00.� We had penned down an unofficial whisper number of -500,000.� The gros
sly different -345,000 started the rumor mill as this was far less than any of the economists surveyed.� A reading of 9.4% in unemployment rather then the expected 9.2% also led to many people scratching their heads.

Our call into the Bureau of Labor Statistics was answered with a denial of any errors in the jobs data.� The BLS press officer, Gary Steinberg, said the rumor of any errors was a false and said specifically, “We have no plans to revise any of the data released this morning.”

More likely than this being a real rumor, it was likely speculation because the data was so much different than expectations.

Jon C. Ogg
June 6, 2009

Don't Get Too Worked Up Over Pericom Semiconductor's Earnings

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Pericom Semiconductor (Nasdaq: PSEM  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Pericom Semiconductor for the trailing 12 months is 91.0.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing! a compa ny's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.


Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Pericom Semiconductor, consult the quarterly-period chart below.


Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Pericom Semiconductor looks less than great. At 91.0 days, it is 8.8 days worse than the five-year average of 82.2 days. The biggest contributor to that degradation was DIO, which worsened 16.6 days when compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Pericom Semiconductor looks OK. At 103.0 days, it is 7.0 days worse than the average of the past eight quarters. Investors will want to keep an eye on this for the future to make sure it doesn't stray too far in the wrong direction. With both 12-month and quarterly CCC running worse than average, Pericom Semiconductor gets low marks in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds! of find ing the underappreciated home run stocks that provide the market's best returns.

  • Add Pericom Semiconductor to My Watchlist.

Sunday, April 22, 2012

Natural Gas 'Flaring' Worries Investors

The practice hasn't been used very often over the past decade or so, but now we are starting to see a rise in energy companies burning (or “flaring”) natural gas. In traditional oil businesses, the practice of flaring had supposedly been on the decline, but now it is soaring in places of large shale oil formations, such as the boomtowns in North Dakota and Texas.

Energy companies decide to flare natural gas when they are unable to capture and sell as they produce shale oil which is much more valuable. Burning their natural gas is essentially an overwhelming supply issue in which the infrastructure cannot keep up with the large boom.

And now it is beginning to bother the investors.

Karina Litvack is the head of governance and sustainable investment at F&C Asset Management and she is one of 36 investors who sent a letter to 21 oil drillers asking them to disclose the amount of natural gas they are burning off. Some of the companies contacted were Chesapeake Energy Corp, Exxon Mobil, and Continental Resources Inc. These companies specifically are located in shale oil operations in North Dakota, Texas, Colorado and Ohio.

“We want to encourage companies to articulate plans for resolving this issue while shale oil production is still in its relative infancy,” Litvack says.

Shale oil drilling has dug the U.S. out of it's declines old decline of crude output, but the rapid pace at which the shale boom has developed has environmental and financial risks. Experts and investors alike say that emissions from flaring and venting natural gas cause air problems and increase global warming.

Therefore to get a better unders! tand of the flaring practice, as well as limit the risks, investors want companies to disclose by May 1 how much flaring is being done and to meet with them to plan ways to resolve the problem.

From Reuters,

The practice "poses significant risks for the companies involved, and for the industry at large, ultimately threatening the industry's license to operate," they wrote in a letter to the companies…

Techniques including hydraulic fracturing, or fracking, have given drillers in those states access to vast new deposits of shale oil. But some states, many of which are new to drilling, do not have strong regulatory systems in place.

One third of the gas North Dakota produces is flared. The amount flared per day by last July had increased 1,200 percent since 2004, when development of the Bakken shale formation began, according to the state's government.

The numbers are alarmingly high and investors are rightfully alarmed as well. Estimations of flared gas in North Dakota produced 2 million tons of carbon dioxide last year. That amount equals 384,000 extra cars on the road. But environmental issues aside, even with the low natural gas prices, the state still lost about $110 million in revenue last year from the flaring.


IMF gets $430 billion in new firepower

WASHINGTON (MarketWatch) -- The International Monetary Fund on Friday announced it had received commitments for more than $430 billion in new resources from its member nations in a show of force to financial markets that it can handle any renewed financial crisis.

�It really shows the resolve of the international community to have available the tools in the tool kit to resist and defend against crisis,� said IMF managing director Christine Lagarde at a press conference.

The hunt for new resources was not a cliff-hanger. The euro-area alone had pledged $200 billion to the IMF last month and analysts had expected the Washington-based institution would be able to hit its target of $400 billion.

The new resources almost double the IMF�s lending capacity.

The U.S. and Canada remained on the sidelines, saying Europe had the resources to meet any new crisis.

A U.S. official said the euro-zone needed to continue to develop flexible policies to respond to conditions given the hard road ahead for many of the countries involved

Still, the new funds should give the IMF a major voice in resolving the debt crisis in Europe which has recently flared up again after a few months of calm.

The IMF already has rescue packages with Greece, Portugal and Ireland. Financial markets fear that Spain does not have the funds to pay its debts and will need an assistance package.


The size of the Spanish economy dwarfs the other three European countries that received aid.

Spanish Finance Minister Luis de Guindos told reporters that finance ministers and central bank governors from the Group of 20 influential countries supported his government�s reform agenda and there had been no discussion of external financing assistance, according to Dow Jones.

Buckeye Technologies Inc. EPS this Year Remained More Than 271% - NYSE:BKI

Buckeye Technologies Inc. (NYSE:BKI) recently hit 52 week peak price $28.50, opened at $26.83 scored +2.51% closed $27.81. BKI traded on over 0.55 million shares in comparison to average volume of 0.65 million shares.

BKI has earnings of $109.35 million and made $807.44 million sales for the last 12 months. Its quarter to quarter sales remained 14.30%. The company has 39.49 million of outstanding shares and 38.42 million shares were floated in the market.

BKI has an insider ownership at 3.87% and institutional ownership remained 96.31%. Its return on investment (ROI) for the last 12 month was 14.29% as compare to its return on equity (ROE) of 22.99% for the last 12 months.
The price moved ahead +15.19% from the mean of 20 days, +23.51% from 50 and went up 76.61% from 200 days average price. Company�s performance for the week was 11.33%, +26.47% for month and yearly performance remained 143.09%.

Its price volatility for a month remained 5.05% whereas volatility for a week noted as 5.07% having beta of 2.59. Company�s price to sales ratio for last 12 months was 1.36 while its price to book ratio for the most recent quarter was 2.06 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 151.88 million for the past twelve months.

Boeing to close Kansas plant

NEW YORK (CNNMoney) -- Boeing announced Wednesday that it was closing a plant in Kansas that employs more than 2,160 people.

The decision to close the Wichita facility, which will be shuttered in by the end of 2013, came following "a thorough study of the current and future market environment and our ability to remain competitive," the aircraft and defense manufacturer said in a statement.

A Boeing spokeswoman said in an email that some employees from the plant would be laid off, while others would be asked to relocate. She did not provide an estimate of the job losses coming as a result of the decision.

"In this time of defense budget reductions, as well as shifting customer priorities, Boeing (BA, Fortune 500) has decided to close its operations in Wichita to reduce costs, increase efficiencies, and drive competitiveness," Mark Bass, a vice president at Boeing Defense, Space and Security, said in the statement.

Bass was alluding to the $600 billion in defense cuts scheduled to take effect beginning next year as a result of the so-called super committee's failure to agree on a deficit reduction deal.

The Wichita facility is the base for Boeing's B-52 and 767 International Tanker programs and also provides support for logistics and flight mission planning, the company said. Aircraft maintenance work from the plant will move to a facility in San Antonio, while engineering tasks will move to Oklahoma City.

Job cuts as a result of the decision will begin in the third quarter of this year, Boeing said.

Shares of Boeing were down slightly on Wednesday afternoon. 

A Business Continuity Plan Helps In Times Of Trouble

Events can happen that interrupt the normal production flow of a business. These can be anything from natural occurring circumstances to ones perpetuated by human beings. When these situations arise a company may become extremely challenged to keep on functioning in a positive way. There might be a significant interruption in their ability to process their orders or maintain proper records filled with sensitive information concerning customers or proprietary information. A business continuity plan helps a company prepare themselves for unexpected disruptions.

There can be a wide range of circumstances that could cause an interruption to the normal flow of operations for a company. Some are natural disasters like hurricanes and earthquakes that can interrupt communications. Sometimes this may happen to a supplier who cannot send product necessary to keep things running.

When putting a plan together to recover from these events, one of the first things one must understand is how they would be affected. Most businesses have the ability to keep on working for a limited basis. They might have enough supplies to complete some orders. Determining how long one can keep going is vital to understanding how long they an event can last before their operations are truly negatively affected.

Knowing how to recover documentation can be essential to recovering from a situation. Important information should be stored and accessible from more than one location. If everything is in one location and that place is destroyed, then all the information will be gone as well.

Having a location set aside to restart operations can be important. This location should be far enough away from the home office to not be affected by whatever is occurring in that region. One might want this remote spot to have the equipment necessary to quickly replace the functions of the primary office.

The systems that are put into place should be tested prior to an actual need arising. When the system is tested one shou! ld be ab le to locate areas that might be flawed. One can then correct whatever is wrong before a real emergency arises.

Natural and manmade events do happen that interrupts the flow of commerce. Companies who preplan for such events are in a better position to keep operating than those that do not. Having a business continuity plan enables a company to weather these unforeseen events.

Business Continuity Software offers Disaster Recovery Planning. Call today to learn how they can help you be prepared. (