Saturday, June 16, 2012

Top Stocks To Buy For 2012-2-1-1

Kraft Foods Inc. (NYSE:KFT) Kraft Foods Inc. (Kraft Foods) manufactures and markets packaged food products, including biscuits, confectionery, beverages, cheese, convenient meals and various packaged grocery products. Kraft Foods Inc achieved its new 52 week high price of $37.53 where it was opened at $36.93 UP 0.44 points or +1.19% by closing at $37.35. KFT transacted shares during the day were over 12.05 million shares however it has an average volume of 7.91 million shares.

KFT has intra-day a market capitalization $65.99 billion and an enterprise value at $93.49 billion. Trailing twelve months price to sales ratio of the stock was 1.23 while price to book ratio in most recent quarter was 1.80. In profitability ratios, net profit margin in past twelve months appeared at 6.06% whereas operating profit margin for the same period at 13.24%.

The company made a return on asset of 4.67% in past twelve months and return on equity of 9.07% for similar period. In the period of trailing 12 months it generated revenue amounted to $53.45 billion gaining $30.36 revenue per share. Its year over year, quarterly growth of revenue was 11.50% holding 22.30% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $2.06 billion cash in hand making cash per share at 1.17. The total of $29.65 billion debt was there putting a total debt to equity ratio 80.56. Moreover its current ratio according to same quarter results was 0.85 and book value per share was 20.71.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated -1.04% where the stock current price exhibited up beat from its 50 day moving average price $35.68 and remained above from its 200 Day Moving Average price $34.83.

KFT holds 1.77 billion outstanding shares with 1.67 billion floating shares where insider possessed 0.05% and institutions kept 74.00%.

Daily ETF Roundup: DBB Jumps On Upbeat Data, UNG Sinks On Warm Weather

Tuesday was filled with all sorts of good, bad, and ugly news. At home, investors digested a solid earnings report from Wells Fargo, although Citigroup’s quarterly performance came in below expectations, painting a gloomier outlook for the financials sector as a whole. News from overseas was mixed as well; China posted better-than-expected GDP results while Standard & Poor’s cut the credit rating of the European Financial Stability Facility, the region’s bailout fund [see ETF Insider: Euro Woes Weigh On Earnings].

The latest Empire State Factory Index helped to propel equities higher as investors on Wall Street rejoiced over better-than-expected data. New York’s manufacturing index came in at 13.5, blowing past analyst estimates of 11.3, and surpassing last month’s reading of 8.2. Amidst the cornucopia of economic data, U.S. stocks sided with the bulls; the Nasdaq led the way higher with a 0.64% gain on the day, while the S&P 500 lagged behind, inching higher by 0.36%. Equity market euphoria created headwinds for the U.S. dollar and gold took the opportunity to climb higher. Futures prices for the precious yellow metal settled near $1,650 an ounce as the trading session drew to a close.

The PowerShares DB Base Metals Fund (DBB) was one of the best performers, gaining 2.68% on the day, bolstered by encouraging manufacturing data at home as well as robust growth in China. Demand for industrial metals was reignited as investors reacted to China’s latest GDP report, which showed growth of 8.9% in the booming Asian economy, compared to estimates of 8.6% [see Commodity Guru ETFdb Portfolio]. Commodity prices rose higher across the board on Tuesday thanks to weakness in the U.S. dollar.

The United States Natural Gas Fund (UNG) was one of the worst performers, shedding 5.29% on the day. Uncharacteristically warm weather all across the U.S. has been a major headwinds for natural gas prices, which plunged to their lowest levels in nearly a decade on Tuesday. The absence of cold weather has taken its toll on futures prices for the fuel, losing nearly 20% in the past six trading sessions alone [see 25 Ways To Invest In Natural Gas].

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]


10 Early ETF Stars Of 2012

The unfriendly economic landscape from 2011 has been gradually evolving into a much more optimistic environment in the new year as confidence has improved across the board. Better-than-expected corporate earnings, manufacturing output, housing sales, and encouraging employment reports have all paved the way higher for stocks as investors are rejoicing over clear cut signs of economic recovery on the home front. Sentiment overseas has also improved considerably as European lawmakers continue to take measures that ensure stability in the currency bloc going forward. Although the bulls haven’t quite staged a stampede on Wall Street just yet, 2012 is off to a hot start and several ETFs have posted stellar returns in the first month of trading alone [see 100 Highest YTD ETF Returns].

Below we highlight ten of the best performing products year-to-date, highlighting some obvious winners as well as covering several funds flying under the radar for most investors (returns as of 1/24/2012; some ETFs similar to those included below have been omitted):

10. First Trust BICK Index Fund (BICK): +16.23%

Investors’ risk appetite has started to gradually increase thanks to encouraging economic developments across the globe, which has translated into growing demand for emerging markets exposure. BICK has appreciated nicely in the first month of 2012 thanks to improving confidence that emerging markets are still steaming with action. This ETF holds 90 of the largest and most liquid public companies that are domiciled in Brazil, India, Mainland China and South Korea.

9. EG Shares Industrial GEMS ETF (IGEM): +16.89%

Interest in sector-specific emerging market exposure has grown in the new year thank to improving confidence in the global economic recovery. Investors looking to tap into the booming industrials sector across the developing world have made good use of IGEM, as this product is the only targeted ETF on the market capable of delivering such exposure. This fund tracks the 30 largest emerging market companies in the industrials sector and features heavy allocations to China, Indonesia, South Africa, Malaysia, and Mexico.

8. UBS E-TRACS Long Platinum ETN (PTM): +17.00%

With interest rates expected to remain at historically low levels for the foreseeable future , its not much of a surprise to see that precious metals are off to a great start this year. Platinum is leading the way higher, bolstered by ongoing concerns for inflation coupled with increasing industrial demand [see Ultimate Guide To Platinum Investing]. PTM measures the collateralized returns from a basket of platinum futures contracts; the underlying contracts are targeted for a constant maturity of three months.

7. Barclays iPath Dow Jones-UBS Tin Total Return Sub-Index ETN (JJT): +17.27%

Industrial metals have also been able to bounce back after a brutal fight to keep afloat in the final quarter of 2011. Tin is off to an impressive start and is leading the way ahead of copper and aluminum prices. JJT is the only product on the market that offers targeted exposure to this corner of the commodities market. Few investors have enjoyed JJT’s rise to start off 2012; this ETN has amassed only about $8 million in assets under management since launching in mid-2008.

6. UBS E-TRACS ISE Solid State Drive Index ETN (SSDD): +18.15%

With bullish sentiment sweeping over Wall Street, its not too surprising to see this hyper-targeted tech ETN take on appeal. Investors looking to round out their exposure to Technology Equities ought to consider an allocation to companies involved in the booming solid state drive market. SSDD tracks a benchmark that consists of firms operating in the solid state drive industry, while also employing an equal weighted allocation strategy across the underlying holdings.

5. Van Eck Egypt Index ETF (EGPT): +18.53%

After enduring a grueling period of instability in 2011, Egypt is back on the board and many investors are probably surprised to see this beat-down ETF post one of the most impressive performances early in the new year. EGPT consists of 30 stocks that are domiciled and primarily listed on an exchange in Egypt or that generate at least 50% of their revenues in Egypt. Top holdings from a sector breakdown perspective include: communication services, financial services, and industrials [see EGPT Holdings].

4. Guggenheim Solar ETF (TAN): +18.63%

With tension in Iran creating more and more uncertainty surrounding fossil fuel prices, investors have been prompted to reconsider opportunities in alternative energy. TAN is a popular option for investors looking to tap into solar energy; this ETF consists of 35 companies in the solar industry, featuring allocations to solar cell and module producers as well as companies that supply raw materials or components to solar power equipment producers.

3. VelocityShares Daily Inverse VIX Short-Term ETN (XIV): +26.42%

Uncertainty has begun to evaporate from the markets thanks to better-than-expected economic data releases and positive corporate earnings at home. Likewise, this inverse volatility product has staged an impressive bounce back following its gruesome sell-off in the final months of last year. XIV has accumulated $430 million in assets under management since launching in late 2011, showcasing the demand for products that offer exposure to volatility as an asset class.

2. Global X Uranium ETF (URA): +26.86%

Despite the backlash against nuclear power in 2011 given the catastrophic events in Japan, many investors are still very bullish on this corner of the energy market. URA consists of close to 30 companies which are active in the uranium mining industry; top holdings include Cameco Corp., Urnaium One Inc., and Hathor Exploration. This ETF offers global exposure across Canada, Australia, the United States, and the United Kingdom.

1. Van Eck India Small-Cap Index ETF (SCIF): +30.13%

The booming Indian economy has begun to attract assets yet again thanks to improving expectations for economic growth and an increasing risk-appetite amongst many investors [see Evaluating India ETFs: Three Important Factors To Consider]. SCIF is made up of over 120 individual holdings, and only about a quarter of its total assets are allocated to the top ten companies alone, resulting in a well-balanced portfolio. This ETF has been able to profit from local, favorable demographic and consumption trends given its heavy allocation to consumer cyclical companies in India. SCIF also rounds out exposure to the industrials, financial services, basic materials, and technology sectors.

Disclosure: No positions at time of writing.

Disclaimer: ETF Database is not an investment advisor, and any content published by ETF Database does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. From time to time, issuers of exchange-traded products mentioned herein may place paid advertisements with ETF Database. All content on ETF Database is produced independently of any advertising relationships.

Original post

Evergreen Solar Expected to Report in the Red

Massachusetts-based Evergreen Solar Inc. (ESLR) reported un-audited preliminary results for the quarter ended December 31, 2010. The company clocked $89.3 million in revenues for the fourth quarter of 2010 missing the Zacks Consensus Estimate of $100 million. Results however were higher than both the year-ago and sequential quarterly revenues of $74.5 million and $86.5 million, respectively. Shipments for the fourth quarter of 2010 increased to approximately 47 MW, compared to approximately 43 MW shipped in the sequential quarter.

Average selling price (ASP) for the reported quarter was $1.90 per watt, down 6% from $2.02 per watt reported in the third quarter of 2010. Total manufacturing cost per watt was approximately $1.92, an increase of $0.04 per watt from $1.88 per watt reported for the third quarter of 2010. As a result of the decline in average selling prices and increase in manufacturing costs, gross loss was approximately $0.4 million, versus gross income of $6.5 million during the third quarter of 2010. Evergreen Solar ended fiscal 2010 with Cash and cash equivalents, including restricted cash, of approximately $68.4 million.

Evergreen Solar’s results for both the fourth quarter of 2010 and the first quarter of 2011 would be further affected by expected non-cash charges of approximately $340 million associated with the write-off of existing building, facilities and equipment associated with closing its Devens facility. Furthermore, the company also expects to incur approximately $15 million to $20 million of costs associated with employee separation and outplacement services, facility decommissioning and other costs required to close the facility.

Evergreen Solar is also internally reviewing approximately $150 million of intangible and cash-related prepayments associated with various silicon contracts to determine whether additional non-cash charges will be incurred.

Massachusetts-based Evergreen Solar engages in the development, manufacturing, and marketing of solar power products worldwide, including solar cells, panels, and photovoltaic systems. The company, through its crystalline silicon technology known as String Ribbon, uses approximately half the silicon for manufacturing wafers, compared to peers using the conventional sawing method.

These modules are designed for a range of solar electric power applications, including water pumping, communications, outdoor lighting, rural electrification, recreational vehicles and stand-alone applications. The company sells its products through distributors, system integrators, and other value-added resellers. Its products are sold primarily in the U.S. and Europe.

Evergreen Solar also recently completed a 1-for-6 reverse stock split in 2011. The reverse split reduced the outstanding shares of the company to 35 million from the previous level of 209 million.

Evergreen Solar is expected to release its full numbers for the fourth quarter on February 9, 2010. However the company is expected to take a beating due to lower ASPs and dearer costs of importing aluminum frames for solar panels. We expect Evergreen Solar to digest a loss of 73 cents for the fourth quarter of 2010.

Thus we maintain our long-term Neutral recommendation on the Zacks #4 Rank (Sell) Evergreen Solar stock. In the solar space we would advise investors to focus on the Zacks #1 Rank (Strong Buy) stocks like ReneSola Ltd. (SOL) and LDK Solar Co. Ltd. (LDK) in the near-term.

Monday’s biggest gaining and declining stocks

NEW YORK (MarketWatch) � Shares of the following companies made notable moves in Monday�s U.S. stock market:


Amylin Pharmaceuticals Inc. AMLN �shares rose 17.5% after U.S. regulators cleared a version of the drug developer�s diabetes shot.

Click to Play Housing crisis drives Fla. presidential politics

WSJ's Arian Campo-Flores take a look at the housing crisis and how it has hit Florida especially hard. He reports resident are looking to presidential candidates for specific remedies. Photo: Jason Henry for The Wall Street Journal

GTx Inc. GTXI �gained more than 49% after Citigroup Inc. doubled its share-price estimate of the developer of a prostate-cancer drug.

The Pep Boys � Manny, Moe & Jack PBY �shares jumped almost 24% to $14.93 after the auto-aftermarket chain said it would be acquired by Gores Group for $15 a share.

Thomas & Betts Corp. �rose 23% to $71.31 after Swiss engineering conglomerate ABB Ltd. ABB � CH:ABBN �said it would a acquire the electrical components maker for $3.9 billion, or $72 a share. U.S.-listed shares of ABB fell 3.3%.

US Airways Group Inc. LCC � advanced 4.2% after Bloomberg News reported Delta Air Lines Inc. DAL �was considering making an offer for the carrier.


Cell Therapeutics Inc.�s CTIC �shares lost 18% after the biotechnology firm pulled its new-drug application for its treatment of non-Hodgkin�s lymphoma.

Gannett Co. GCI shares declined 6.9% after the publisher of USA Today and other newspapers reported fourth-quarter earnings.

PharMerica Corp. PMC �shares shed nearly 12% after the Federal Trade Commission on Friday sought to block Omnicare Inc.�s OCR �hostile takeover attempt of the pharmacy-services provider.

Staples Inc. SPLS �shares fell almost 4.9% after Goldman Sachs downgraded the office-supplies retailer to sell from neutral.

Safety Stocks: Three Ways to Profit From Market Mayhem

There's never been a better time to invest in "safety stocks."

The Dow Jones Industrial Average is down 14% since July 22 and the Standard Poor's 500 Index is down 15% in that time. The U.S. economy is grinding to a halt, and a double-dip recession could be in the offing. Meanwhile, the U.S. Federal Reserve continues to undermine the dollar with expansive monetary policy.

Indeed, with so much bad news and chaos, there's never been a better time to stock up on the essentials - gold, guns, and cheap food. These are the things people turn to when the going gets tough - and the companies that provide these bare necessities shine the brightest when everything else seems to be falling apart.

That said, here are three safety stocks that are worth a look:

  • Newmont Mining Corp. (NYSE: NEM).
  • McDonald's Corp. (NYSE: MCD).
  • And Sturm, Ruger & Co. Inc. (NYSE: RGR).
Let's examine each in a little more detail.

Newmont Mining Corp.Gold has been the can't-miss profit play of the past three years.

The yellow metal settled at yet another record high yesterday (Tuesday), surging 1.7% to $1,743.00 an ounce on the Comex division of the New York Mercantile Exchange (NYMEX). And Money Morning Contributing Editor and global resources specialist Peter Krauth says it could more than double from there.

"I expect gold to reach $5,000 before this bull market peaks," said Krauth. "I'm very open to the possibility that gold could correct from here, but I'd expect that to be nothing more than a short-term pullback."

Indeed, developed nations' debt problems remain unresolved and the Fed's monetary policy continues to weaken the dollar, making the outlook for gold very bright.

That's good news for Newmont Mining Corp., which has 93.5 million ounces of proven and probable gold reserves. The company generated nearly $10 billion in revenue and gross profit of $6 billion in its trailing 12 months.

Newmont's stock price does not yet reflect its true value, as the company has a Price/Earnings (P/E) ratio of just 11.27. But what's even better is that Newmont is pegging its dividend payout to the price of gold.

For instance, gold settled last Friday at $1,659 an ounce, leaving the dividend at 30 cents a share. But at Monday's record high price of $1,718 an ounce, the dividend jumped to 35 cents a share. The stock currently yields about 2.2%, but you can expect that to rise, and rise quickly, as the price of gold continues to soar.

McDonald's Corp. McDonald's Corp. is the quintessential "recession-proof" stock. It's a huge company that's very active globally. It's made a big splash in fast-growing emerging markets - particularly in Asia - and hard economic times make its affordable menu even more appealing.

The company's same-store sales increased 5.1% in July. Sales were up 5.3% in Europe, 4% in Asia, and 4.4% in the United States.

McDonald's reported a second-quarter profit of $1.41 billion, or $1.35 a share, up from $1.23 billion, or $1.13 a share, a year earlier. Revenue jumped 16% to $6.91 billion.

A strong global brand, low prices, and growing revenue were enough to land McDonald's on Goldman Sachs Group Inc.'s (NYSE: GS) prestigious "Conviction Buy" list. The firm set a $96 price target on MCD, which suggests an 11% upside to the stock's Monday closing price of $82.11.

Goldman noted it sees a total potential return of 20% for the stock when including its dividend.

McDonald's stock is up 10.5% year-to-date, compared to a nearly 10% decline for the S&P 500.

Sturm, Ruger & Co. Inc.Finally, there's Sturm, Ruger & Co. - the firearms manufacturer that's blowing away the competition.

Sturm Ruger's net income rose 32% to $10.8 million, or 57 cents per share in the second quarter. The company also is raising its dividend and buying back shares - two hallmarks of a good company.

Ruger has raised its dividend twice lately -- most recently when the company announced earnings on July 27, 2011. The new dividend rate is now 56.8 cents per share on an annualized basis. This brings the current yield to about 2.3%.

Meanwhile, the company bought back 133,400 of its 18.9 million outstanding shares in the first half of 2011. Those purchases absorbed $2 million; another $8 million in authorized purchases remain.

Ruger's large cash stockpile made all of this possible. The company had cash and equivalents and short-term investments of $76.5 million as of July 2.

The stock is up nearly 77% in the past year, compared to the S&P 500, which is flat.

Exxon reports $9.4 billion profit

NEW YORK (CNNMoney) -- Exxon reported a 2% rise in fourth-quarter earnings Tuesday as higher oil prices offset declining production volumes.

The largest U.S. oil company also defended its focus on natural gas, which is part of its plan to develop unconventional energy sources in the United States.

Prices for natural gas have remained in a deep slump, falling more than 25% in the fourth quarter.

David Rosenthal, the company's vice president of investor relations, blamed mild winter weather and weak economic growth in Europe for cutting into demand.

But Exxon is optimistic about the future prospects for the fuel that's used to heat buildings and generate electricity.

"We remain bullish on the future of natural gas as an energy source," Rosenthal told analysts in a conference call. "Given the steep decline in conventional gas, unconventional gas will pay dominant roll going forward."

Natural gas prices fell 8% Tuesday, while oil prices edged higher.

The biggest winners of Obama's natural gas push

Before the market opened Tuesday, Exxon reported net income of $9.4 billion, or $1.97 a share, in the fourth quarter. That's up from $9.25 billion, or $1.86 a share, in the same period in 2010.

Analysts were expecting earnings of $1.96 a share, according to a survey by Thomson Reuters.

Revenue rose 15% to $121.6 billion, the company said.

For the full year, Exxon earned $8.43 per share, in 2011. Analysts were expecting annual profits of $8.42 per share.

Shares of Exxon (XOM, Fortune 500) were down 2% in midday trading.

The results reflected higher oil prices, which jumped 25% in the quarter. But the industry has struggled to increase production as global oil supplies become more scarce.

Oil-equivalent production fell 9% in the fourth quarter, though it was up 1% for the full year.

Rosenthal said overall production was impacted by entitlement volumes, which reflect payments made to governments and other partners, and other quotas.

The company said earnings from oil exploration and production rose 18% to $8.8 billion in the quarter. But lower volumes and a negative impact from Exxon's production mix reduced earnings by $1.4 billion.

Forget Iran, Iraq is threatening oil prices

Exxon said earnings from its oil and gas refining operations declined during the quarter, citing tighter profit margins. Earnings from the company's chemicals business also declined.

Rival oil company Chevron (CVX, Fortune 500) reported a 3% decline in quarterly profits last week, as its oil and gas production fell to the lowest levels in years. ConocoPhilips (COP, Fortune 500) also reported declining production volumes, even as profits rose in the quarter.

On Saturday, Exxon announced plans to sell its stake in a Japanese refining business to TonenGeneral Sekiyu for $3.9 billion.  

Cloud Computing: Bubble or Revolution?

Few technology trends have captured as much popular attention as Cloud Computing. The level of hype associated with the ‘Cloud’ hasn’t been seen since the hoopla created during the era. As a result, there has been plenty of debate about whether the Cloud Computing phenomenon is headed to a similar demise.

This quote is taken from a Seeking Alpha article by Jeffrey Kaplan, published in December 2010.

Just a few weeks after Jeffrey's comments, two separate but similar acquisition moves of cloud computing providers, made by Verizon (VZ) and Time Warner Cable (TWC), have investors wondering whether the multiples used in these transactions are a reminder of the past “bubble times” or the sign of a new revolution coming.

Cloud computing may be considered the natural evolution of virtualization and utility computing. The key characteristic of cloud computing is that the computing is "in the cloud", i.e. the processing (and the related data) is not in a known place.

From a consumer point of view, it is a relatively simple process to explain if you can use an example: cloud computing is what happens when you check your Gmail account. You do not really know where your data are, but you do enjoy the fact that you're allowed to access your emails from several location (home or office computer, mobile phone, etc.), with little to no knowledge of the technology making it possible. A real revolution, when you think about it.

From an enterprise point of view, cloud computing avoids high CapEx spent on hardware, software, and services, as you pay a provider only for what you use. Quite a change in the way you think about computing, and in your costing.

In recent times, venture capitalists pumped millions of dollars into cloud computing start-ups, which may be seen both as a sign of the great potential for the sector or as an omen of a bubble.

A Gartner's recent survey shows that cloud computing services are the top CIO priority for this year:

According to Gartner's findings, CIOs will adopt cloud computing services at a swifter pace than originally predicted. Gartner said 3 percent of CIOs currently have the majority of their IT environments running in the cloud or on SaaS technologies, but over the next four years that is expected to jump to 43 percent.

Such a paradigm shift can very well explain why Telcos may be looking at cloud computing (which needs their infrastructure to reach end users) as a way to increase their revenues and create a closer relationship with customers.

Back to the original question, bubble or revolution? The answer may be obtained by changing the question: how about real revenues and profits in the sector? At least, this approach worked very well during the bubble times...

If we examine the recent Verizon's acquisition of Terremark (TMRK) trying to get a sense of the multiples paid for its cloud computing offering, and using this revenues/profit approach, the answer may be scary.

Verizon paid a little over $2 billion for Terremark, including debt. The strategic reason for the acquisition was explained by Verizon's President & COO, Lowell McAdam, during the conference call following the news:

This transaction will accelerate Verizon’s everything-as-a-service cloud strategy by delivering a powerful portfolio of highly-secure, scalable on-demand solutions to business and government customers across the globe.

As we looked at how best to position ourselves for opportunities in this market, it became increasingly clear to us that a purely organic build would not get us into this rapidly evolving market as fast as we wanted. At the same time, it became clear as we worked cooperatively with Terremark on other joint commercial activities, that they would bring as much of what we needed and accelerate us on a path to leadership in cloud services.

If we look at Terremark's latest results, cloud computing is running at a 37.5 million annual run rate – or just about 10% of Terremark's revenues (click to enlarge):

Here is a comment made during the Q&A section of the conference call:

David Barden - BofA Merrill Lynch - Analyst

The second question was just trying to parse this down a little bit more, Lowell. Terremark I think in the last quarter reported something like $7.5 million of quarterly cloud revenues, which seems like a very, very, very small number for a Company as large as Verizon, and for them to come out and say that that is something that they couldn't have done by themselves and they needed to buy this company to accomplish, seems strange.

But I guess what does seem more plausible is that what Terremark has is the raw material, the co-location, the relationships, the people, that, as you say, would take a long time to develop independently to be in a position to then develop the cloud opportunity.

So I guess as we try to look across the rest of the sector and understand is are you really buying this company for the $7.5 million of cloud revenues or are you really buying it for all of the things that it has put together to put you in a position to try to leverage the future cloud opportunity?

Lowell McAdam - Verizon - President & COO

David, you did probably a better job of answering the question than I could, to be honest. I think that's it. As we've gotten to know the team, and you look at all the -- to me it is foundational elements, it's the cornerstone that you would need to build the business on. And I think we can provide the jet fuel that will help them really take off, but they have really done the hard work of getting the data centers in Culpeper and in Miami and the other ones around the country and around the world, and they have assembled a team that knows the security side of it and the applications, and how to run world-class centers. They've got all the relationships with the key federal government and the large enterprise customers, so we think we can really kick this into a higher gear as we say. So that's what we bought here.

As to profits, Terremark has about $ 417.5 millions of accumulated deficit, and is not profitable, yet.

There's obviously more than the Terremark-Verizon deal to evaluate cloud computing.

While hosting in data centers is common today with many companies, cloud computing represents something bigger and better than just hosting. It brings the necessary technology, cost efficiencies, and bandwidth together finally to present businesses an environment suitable for moving from the client/server model to an IT as a service model.

Cloud computing truly represents the evolution of technology. Time will share winners and losers in the sector, as it always happens when a new business is born. First time movers will benefit from their predominant position, most likely.

As investors, we'd like to emphasize that the data center remains at the heart of cloud computing and every cloud-based service. All the applications and services we retrieve or consume in the cloud eventually reside in some data center – a good reason not to forget the main players in this sector – the Equinix (EQIX) kind of guys, whose customers are not only emerging cloud companies, but financially sound enterprises, banks and financial services, content companies, network providers, etc. etc.

Disclosure: I am long EQIX.

Friday, June 15, 2012

Top Stocks To Buy For 2012-1-30-3

W.R. Grace & Co. (NYSE:GRA) witnessed volume of 3.22 million shares during last trade however it holds an average trading capacity of 775,926.00 shares. GRA last trade opened at $49.68 reached intraday low of $49.68 and went +12.72% up to close at $51.65.

GRA has a market capitalization $3.79 billion and an enterprise value at $3.53 billion. Trailing twelve months price to sales ratio of the stock was 1.38. In profitability ratios, net profit margin in past twelve months appeared at 7.44% whereas operating profit margin for the same period at 12.02%.

The company made a return on asset of 5.08% in past twelve months. In the period of trailing 12 months it generated revenue amounted to $2.76 billion gaining $37.80 revenue per share. Its year over year, quarterly growth of revenue was 13.10% holding -3.70% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $819.40 million cash in hand making cash per share at 11.16. The total debt was $972.10 million. Moreover its current ratio according to same quarter results was 3.17 and book value per share was -0.03.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 19.58% where the stock current price exhibited up beat from its 50 day moving average price of $44.80 and remained above from its 200 Day Moving Average price of $40.66.

GRA holds 73.44 million outstanding shares with 57.25 million floating shares where insider possessed 0.31% and institutions kept 88.70%.

Google Off 9% on Q4 Miss; Click Fees Drop 8%

Google (GOOG) this afternoon reported Q4 revenue and profit below analysts’ estimates.

Revenue in the three months ended in December rose 25% to $8.13 billion, yielding EPS of $9.50.

Analysts had been $8.43 billion and $10.51 per share in profit.

The company’s owned and operated Web sites saw revenue rise 29%, to $7.29 billion, while affiliate sites’ advertising revenue was up 15% in the quarter, at $2.88 billion.

Google’s paid click volume rose 34%, year over year, and rose 17% from the prior quarter, it said.

Perhaps of greatest concern to investors, the average Google was paid for each click, so-called cost-per-click, dropped 8%, while the company’s “traffic acquisition cost” rose by� 18%, year over year, to $2.45 billion.

The company ended the quarter with $44.6 billion in cash and equivalents. With roughly 325 million shares outstanding, that equates to about $137 per share in cash.

Google shares are down $54.53, almost 9%, at $585.04.

Google’s conference call with analysts gets under way now, at 4:30 pm, Eastern time, and you can catch the webcast of it here.

Update: In a brief note just out, Citigroup’s Mark Mahaney writes that the company’s interest and other income line item was a negative $18 million, whereas he had expected a positive $260 million; and the effective tax rate of 22% was higher than the 19% he had been expecting. Mahaney also notes that international revenue was up just 6%, on a gross basis, which was well short of the 9% he was estimating. Excluding hedges and foreign exchange impact, international revenue was up 28%, lower than the 31% growth in the prior quarter. Mahaney takes that as a “neutral-ish” trend.

Mahaney notes that the 8% drop in cost-per-click was in contrast to a 5% rise in Q3, and that it was “the first Y/Y decline reported in over 8 quarters.”

And Susquehanna Investment Group’s Herman Leung, who has a “Positive” rating on Google shares, writes that the miss was largely a factor of revenue coming up short, as “margins held stable,” in his view. He notes the 8% drop in cost-per-lick was in contrast to his expectation for a 6.1% increase, and what was Street consensus for a 3.2% increase.

SM: IRAs for Kids?

Hey kids! Want a neat-o idea for how to use your summer job money? How about opening an Individual Retirement Account? I know you might be more interested in having a little spending cash for the weekends or saving for a car. But saving for retirement can be cool, too, right? Right? Um.

OK, I admit that convincing your kids to use their summer earnings to invest in an IRA is a pretty tough sell. But in all seriousness, it's an excellent idea and one that might not be too outlandish if you encourage your child simply to allocate a portion of his or her earnings to the cause. (You could even sweeten the pot a little by offering a "match" in the form of a little extra spending money.) Not only will modest contributions add up to significant savings come retirement, but it's also a way to teach your child an invaluable lesson one he or she isn't likely to learn in school.

Let's face it, some people Opening an IRA account also provides a chance to teach your kids about stocks, mutual funds and the basics of investing. Trust me, the lesson will be a whole lot more interesting when it's their hard-earned dollars on the line.

And even relatively small contributions can add up big over the long haul. Say your teenaged child pays $1,000 into an IRA each year for three years, starting this year. After 45 years, the account would be worth $39,005 assuming a 6% annual return. Bump that up to $1,500 for each of the three years and the IRA would be worth $58,508 in 45 years. Not bad for mowing a few lawns.

Sold yet? Good. Here's the scoop on how to get Junior started.

The Basics

Under our beloved tax system, all that's required to make an IRA contribution is earned income. Until you turn 70 1/2, age is irrelevant. So if your child earns some dough this summer from, say, cleaning pools, dog sitting, working as an employee of your small business (more on that later) or whatever, the kid is entitled to make an IRA contribution for the tax year.

Specifically, for 2012, your child can contribute the lesser of:

1. her earned income for the year or

2. $5,000.

Your kid can contribute to either a traditional IRA or a tax-free Roth IRA. The contribution limits are the same for both types of accounts.

The Roth IRA Is the Way to Go

For a kid, the Roth IRA alternative is usually better because contributions can be withdrawn at any time without any tax hit. That said, earnings generally cannot be withdrawn before age 59 1/2 without triggering income taxes and a 10% penalty.

Granted, it's pretty much always a better idea to simply let the account grow until retirement, at which point withdrawals can be taken completely tax free. (Don't underestimate the significance of this: It's a huge gift from the government.) But this might be an easier sell if you explain to your child that he doesn't have to wait roughly four decades to access his summer money.

In contrast, if your kid contributes to a traditional IRA (which offers an upfront tax-deduction on contributions), most or all of the subsequent withdrawals will be taxed. To boot, withdrawals before 59 1/2 will be hit with a 10% penalty tax, unless the money is used for certain IRS-approved reasons (one of those reasons is to pay college costs).

Another reason for shunning the traditional IRA is because your child may not actually be entitled to any tax deductions for his contributions. Why? Because an unmarried dependent kid's standard deduction automatically shelters up to $5,950 of earned income for 2012. So unless your child's job pays more than $5,950 or he had income from other sources (like dividends and capital gains from a trust or custodial account), contributing to a traditional IRA won't generate any current tax savings.

Finally, the fact that your child owns an IRA (Roth or traditional) won't cause him or her to lose out on any financial aid benefits at college time. Why? Because the financial aid number crunchers don't count IRAs as assets. In other words, IRAs are invisible when it comes to determining financial aid eligibility.

If You're Self Employed, Hire Your Kid

If you run a small business as a sole proprietorship or husband-wife partnership, hiring your under-age-18 child as a part-time employee of your business can be good for both you and the kid. Here's why:

  • Your child can contribute to a Roth IRA and pile up lots of tax-free bucks.
  • If the kid is under 18, her wages are exempt from Social Security, Medicare and Federal Unemployment taxes. (This loophole applies equally to single-member LLCs treated as sole proprietorships for federal tax purposes and husband-wife LLCs treated as husband-wife partnerships.)
  • You can deduct your kid's wages as a business expense, which lowers both your income and self-employment tax bills. If you live in a state with a personal income tax, it lowers your state income tax bill too.
  • For 2012, the first $5,950 of your child's wages is sheltered from the federal income tax by the kid's standard deduction (assuming she has no other income).

If your small business is set up as a corporation, your kid's wages are subject to Social Security, Medicare and Federal Unemployment taxes, regardless of his age (same as for any garden-variety employee). But you still get the other tax breaks listed above. Although in this case, you deduct the kid's wages as a business expense on your corporation's income tax return.

Bottom line: Hiring your child is one of the most tax-smart things anyone can do. Just remember to pay a wage that is reasonable for the work done, keep proper time records, and take care of those W-2s just like you would for any other employee.

Best Stocks To Invest In 2012-1-27-3

First Acquisition by Apricus Bio of an FDA Approved and Marketed US Drug

SAN DIEGO, Dec. 16, 2011 (CRWENewswire) — Apricus Biosciences, Inc. (”Apricus Bio” or the “Company”) (Nasdaq:APRI) announced today a definitive agreement to acquire Topotarget USA, Inc. (”Topotarget USA”), a subsidiary of Topotarget A/S, a public Danish company (”Topotarget A/S”). Topotarget USA owns Totect (Dexrazoxane HCl), the only drug approved by the FDA to treat a potentially serious complication of cancer therapy–the leakage of chemotherapy drugs from veins into surrounding tissues. This complication is known as anthracycline extravasation, and can lead to infections and tissue death.

With this acquisition, Apricus Bio will move into the commercialization and sales of oncology and oncology supportive care pharmaceuticals. Topotarget USA has a pre-existing sales infrastructure, sales team, and a revenue-generating product with strong future growth potential. “This is an important step for the Company’s drug commercialization process. Since I came on board as the new CEO of Apricus Bio in 2010, the goal has been to advance the Company into a fully commercial pharmaceutical company,” said Dr. Bassam Damaj, Chairman, President and CEO of Apricus Bio. “In addition to commercializing products that incorporate our NexACT(R) technology such as Vitaros(R) Femprox(R), MycoVa(R) among others, we have also been looking for specific acquisitions that fit into our core focus of adding to our product portfolio, approved, revenue generating drugs. We are pleased to complete the first in what we believe will be a series of acquisitions taking us further into product commercialization and revenue generation, not only in the U.S. but also abroad.”

To acquire Topotarget USA and its drug, Totect, Apricus Bio has agreed to purchase 100% of the outstanding common stock of that company in exchange for Apricus Bio common stock worth approximately $2 million in upfront payments and up to approximately $2 million more in Apricus common stock if certain milestones are achieved. Following the closing of the transaction contemplated by the Agreement, Apricus Bio, through Topotarget USA, will own all rights to Totect in the U.S. in North America and South America and the respective territories and possessions of the countries in North America and South America.

The sale is subject to customary closing conditions and is expected to close by December 31, 2011.

About Totect(R) and the Anthracycline Extravasation Market

Totect or Dexrazoxane HCl is used to treat anthracycline extravasation, which is the leaking of chemotherapy from the veins of cancer patients into tissues and other areas of the body. Anthracyclines are among the most used chemotherapy drugs to treat cancer. There are over 500,000 anthracycline infusions in the U.S. every year and if an extravasation that occurs following an anthracycline infusion is left untreated, patients with this condition may risk serious infection, tissue necrosis, or in some cases death. It is estimated that in the U.S., there are approximately 3,500 cancer centers that provide chemotherapy treatments where anthracyclines are administered. Totect, has been on the market in the U.S. since 2007, with 2011 sales estimated to be approximately $2 million. More information on Totect(R) can be found on

About Apricus Biosciences, Inc.

Apricus Bio, a San Diego-based, revenue-generating, specialty pharmaceutical company, with commercial products and a broad pipeline across numerous therapeutic classes.

Revenues and growth are driven from the sales of the Company’s commercial products and out-licensing in certain territories of its product pipeline and NexACT(R) technology. The company’s pipeline includes Vitaros(R), approved in Canada for the treatment of erectile dysfunction, Totect the only drug approved in the US for the treatment of anthracycline extravasation, as well as compounds in development from pre-clinical through pre-registration, currently focused on Sexual Dysfunction, Oncology, Dermatology, Autoimmune, Pain, Anti-Infectives, Diabetes and Consumer Healthcare.

The Company also expects to develop and/or acquire and then bring to market additional pharmaceutical products in areas of care that will benefit patient needs worldwide.

For further information on Apricus Bio, visit, and for information on its subsidiary please visit You can also receive information at and

About Topotarget A/S

Topotarget (NASDAQ OMX: TOPO.CO) is an international biopharmaceutical company headquartered in Copenhagen, Denmark, dedicated to clinical development and registration of oncology products. Topotarget A/S focuses, in collaboration with Spectrum Pharmaceuticals, Inc., on the development in pivotal studies of its lead drug candidate, belinostat, which has shown positive results as a monotherapy treating hematological malignancies and positive results in solid tumors. Belinostat may be used in combination with full doses of chemotherapy, and is in a pivotal trial within PTCL (peripheral T-cell lymphoma).

Apricus Bio’s Forward-Looking Statement Safe Harbor

Statements under the Private Securities Litigation Reform Act, as amended: with the exception of the historical information contained in this release, the matters described herein contain forward-looking statements that involve risks and uncertainties that may individually or mutually impact the matters herein described for a variety of reasons that are outside the control of the Company, including, but not limited to, its ability to further develop its and their products such as Vitaros(R) for erectile dysfunction, Totect for anthracycline extravasation and other products and product candidates, to have its products and product candidates approved by relevant regulatory authorities, to successfully commercialize such products and product candidates, to integrate successfully its acquired companies such as Topotarget USA and other companies, products and technologies and to achieve its development, commercialization and financial goals. Readers are cautioned not to place undue reliance on these forward-looking statements as actual results could differ materially from the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company’s most recent annual report on Form 10-K, subsequent quarterly reports filed on Form 10-Q and other filings made with the SEC. Copies of these reports are available from the SEC’s website or without charge from the Company.

Topotarget Safe Harbor Statement

This announcement may contain forward-looking statements, including statements about our expectations of the progression of our preclinical and clinical pipeline including the timing for commencement and completion of clinical trials and with respect to cash burn guidance. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Topotarget cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, but not limited to, the following: The risk that any one or more of the drug development programs of Topotarget will not proceed as planned for technical, scientific or commercial reasons or due to patient enrollment issues or based on new information from non-clinical or clinical studies or from other sources; the success of competing products and technologies; technological uncertainty and product development risks; uncertainty of additional funding; Topotarget’s history of incurring losses and the uncertainty of achieving profitability; Topotarget’s stage of development as a biopharmaceutical company; government regulation; patent infringement claims against Topotarget’s products, processes and technologies; the ability to protect Topotarget’s patents and proprietary rights; uncertainties relating to commercialization rights; and product liability exposure; We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.


Apricus Biosciences, Inc.
Edward Cox, V.P.
Corporate Development & Investor Relations
Apricus Bio, Inc.
(858) 848-4249
Apricus Bio Investor Relations
Paula Schwartz
Rx Communications Group, LLC
(917) 322-2216

Source: Apricus Biosciences, Inc.


Top Stocks To Buy For 2012-2-1-4

ATP Oil & Gas Corporation NASDAQ:ATPG opened at $16.06 and with a gain of 10.23% closed at $17.24. Company’s fifty days average price is $15.78 whereas it has a market capitalization $883.92 million.
The total of 4.81 million shares was transacted over last trading day.

Level 3 Communications, Inc. NASDAQ:LVLT opened at $1.15 and with a gain of 8.85% closed at $1.23. Company’s fifty days average price is $1.05 whereas it has a market capitalization $2.05 billion.
The total of 21.77 million shares was transacted over last trading day.

GenVec, Inc. NASDAQ:GNVC opened at $0.59 and with a gain of 8.81% closed at $0.63. Company’s fifty days average price is $0.52 whereas it has a market capitalization $81.31 million.
The total of 4.67 million shares was transacted over last trading day.

Magic Software Enterprises Ltd. NASDAQ:MGIC opened at $8.09 and with a gain of 8.57% closed at $8.00. Company’s fifty days average price is $6.49 whereas it has a market capitalization $274.94 million.
The total of 1.82 million shares was transacted over last trading day.

Solarfun Power Holdings Co., Ltd. (ADR) NASDAQ:SOLF opened at $9.10 and with a gain of 7.33% closed at $9.67. Company’s fifty days average price is $8.72 whereas it has a market capitalization $562.23 million.
The total of 5.30 million shares was transacted over last trading day.

Thursday, June 14, 2012

Why Seasonal Trades Are the Solution to Market Volatility

Given all the volatility in the markets of late it might be time to try something with a high probability - though not a guarantee - of paying off.

I'm talking about "seasonal trades."

Seasonal trades are moves you can make in the futures markets, or now via exchange-traded funds (ETFs), that have a history of producing a profit.

Let me explain.

Seasonal trade opportunities arise from patterns that occur at specific times of the year. They are most apparent in the agricultural sector, where changing weather patterns have an impact on prices.

For example, one such seasonal trade - a bullish October sugar play that has posted a perfect record over the past 15 years, producing an average profit of $1,035 per futures contract in seven weeks or less - launched in mid-June.

That particular trade is keyed to the June conclusion of the sugar harvest in Mexico, the last of the year in the Northern Hemisphere. After that, existing stocks of sugar start to decline and prices are subject to weather scares that could disrupt Southern Hemisphere harvests and new-crop growth in the North. As a result, sugar prices typically tend to rise from mid-June through late July.

Opportunities for seasonal trades are by no means limited to agricultural products. They occur in almost every futures market, including petroleum products, precious metals, stock indexes, and currencies. Often, the reasons underlying these price patterns are obscure, particularly in some of the financial markets, but the reasons aren't nearly as important as the fact that the patterns repeat - and do so consistently year after year.

Moore Research Center Inc. (MRCI), a leading commodity markets statistical firm, tracks more than 250 seasonal trades each year (along with a similar number of intra- and inter-commodity spreads), advising subscribers on the top 15 positions that can be entered each month. To qualify for listing, a trade must have been profitable at least 80% of the time over the prior 15 years - although most, like the sugar trade cited above, have even stronger records.

Similar records and recommendations are provided by, which follows a wide array of what it calls High Odds Seasonal Trades (HOSTs) and tracks records as far back as the 1960s and 1970s.

There's no question that seasonal commodity price patterns exist - and they can offer major profit opportunities to knowledgeable traders in the futures markets.

But what if you can't afford the large margin deposits required to trade many commodities, don't have a futures trading account, or simply aren't comfortable with the high risks that go along with playing these markets? Is there a way you can get in on the seasonal action?

Up until a few years ago, the answer was usually "no." The only alternative to futures for making such plays was with equally risky and highly leveraged commodity options. However, thanks to the recent introduction of so-called "pure play" ETFs, it's now possible to make seasonal commodity trades in the comfort of your stock brokerage account, with no more cost or risk than you'd have with any purchase of regular common shares.

ETFs and Seasonal TradesAlthough the ETFs don't yet have the long-term track record of the commodities on which they're based, their short-term performance seems to indicate they track the seasonal price moves in the underlying futures fairly closely.

Let's look at a petroleum-complex seasonal trade that calls for entry in late July - meaning there's still time to play it.

According to Moore Research, the price of the September crude oil (CL) contract traded on the NYMEX (New York Mercantile Exchange) division of the CME Group has risen from around July 23 until early August in 14 of the past 15 years (a 93% success rate), producing an average profit per trade of $1,278 per contract.

The rationale for this trade is that gasoline consumption hits its highest level in August when driving conditions are best and many families vacation prior to the start of school. Preparation for this demand increase leads to a drawdown in refinery crude stocks, which must be replenished prior to an even sharper rise in demand for heating oil that comes in the fall. Thus, refiners tend to buy more crude during this period, sending prices higher.

As proof of that, prices for September crude oil futures rose from $67.16 a barrel to $69.45 a barrel in late July 2009, and from $78.96 to $81.34 in late July 2010, gaining $2.29 a barrel and $2.36 a barrel, respectively. Since each futures contract represents 1,000 barrels, that equated to respective profits of $2,290 and $2,360 per contract - in roughly 12 days.

Had you chosen to play that seasonal trade with an ETF, the best choice would likely have been the United States Oil Fund LP (NYSE: USO), recent price $35.36. (Note: There are currently five other crude-linked ETFs offering both long and short exposure to oil, as well as 200% leverage in both directions.)

In 2009, you could have anticipated the seasonal move by entering on July 22 at a price of $34.01 per share - and you would have been quickly rewarded. USO prices rose steadily for two weeks, peaking at $38.27 on August 6. Had you closed the next morning on the assumption the seasonal trade had run its course, you could have sold at $38.15, scoring a gain of $4.14 per share, or $414 per 100-share lot. Had you bought 1,000 shares to mirror the size of the 1,000-barrel futures contract, your gain would have been $4,140 - even better than the profit scored by the futures traders.

An almost identical scenario played out in 2010, when prices for the USO fund closely tracked futures prices, climbing from $34.20 on July 21 to $36.91 on August 3, good for an 8% profit in just 14 days - or $2,710 on a 1,000-share position.

Obviously, with Moore Research suggesting 15 seasonal trades per month, all having an 80% success rate or higher, we could cite numerous other examples - but we won't. Rather we'll just note that seasonal moves - either up or down - in July are projected for commodities such as sugar, cocoa, heating oil and natural gas, corn, soybean meal, oil, and silver. Other seasonal trades involving currencies include the Canadian dollar, British pound, Japanese yen, and 30-year U.S. Treasury bonds, among others.

ETFs aren't available on all of those commodities and financial instruments, but they are on many.

Be aware, however, that you should never rely solely on past seasonal tendencies when initiating a new trade - whether with futures or ETFs. Even when you're dealing with a strategy that's worked 80% to 90% of the time for a decade or two, it's a bad idea to just blindly do a trade without knowing what's going on in the world. So, always review both the individual markets and the overall economic situation and other "macro" factors that could impact your trade before placing your order.

Remember, too, that speculative emotion can strongly impact all of the markets on which futures trade - so always use sound money-management techniques and employ protective stops when doing any seasonal strategy.

News and Related Story Links:

  • Money Morning Archives:
    Global Commodity Prices: Soaring Worldwide Population Growth and a Can't-Miss Profit Play

  • Money Morning Archives:
    Agricultural Commodities Markets Are Fertile Ground for Profit

  • MSN Money: More investors shift to hard assets

    Trading Commodity Seasonal Trends

    List of Most Current Futures Margin Rates

  • Moore Research Center Inc.:
    Official Website

  • Futures Trading
    Commodity Spreads

  • Orion Futures Group Inc.:
    Understanding Opportunities and Risks in Commodities Futures Trading

    High Odds Seasonal Trades

  • ETF Trends:
    Tech, Oil ETFs Trade Lower to End Week

  • ETF Trends:
    Cotton, Sugar ETFs Among Big Movers in Commodities

  • ETF Trends:
    Grain, Corn ETFs Rise on Reports of U.S. Crop Damage

  • Inside Futures:
    Official Website

  • CME Group:
    Futures and Options Trading for Risk Management

Bank on These 7 Preferred Dividend Shares

To hedge against uncertainties in capital appreciation, consider preferred stocks. Preferred stocks don’t offer the same profit potential as common stock. However, they are more stable investment vehicles because they guarantee a regular dividend that is typically tied to company cash and earnings rather than future cash flow considerations. This type of stock guarantees dividends, which common stock does not.

Considering the low interest rate environment in today’s market, the following companies’ preferred stocks have shown solid performance by paying out consistent dividends alongside positive price movements. It seems unlikely Bernanke will raise rates in the first half of 2011, given the precarious nature of the recovery, so we believe risk of erosion in the following names is limited. However, we advise you to do your own due diligence.

Bank of America Series I Preferred ((BAC-I)) has consistently made all dividend payments since inception. The current yield is 7%. The 52-week range is $19.43 to $24.55. The next dividend payment will occur on April 1, and it goes ex-dividend on March 11. As of late volume has been rather heavy, so pick this up when you notice an inverse head and shoulders formation.

Barclays Series D Preferred ADR (BCS.PD) has shown a strong upward trend over the past four weeks. It is also trading at levels pre-Lehman. The current yield is 7.7 percent. The ex-dividend date is February 25, and the dividend is paid out on March 15.

Citigroup Series Q Preferred ((C-Q)) has been callable at $25 a share since September 2009. It has shown a strong upward trend over the past year, when it climbed over seven points. The current yield is 6.25 percent. The next dividend payment occurs on March 27.

JP Morgan Chase Series J Preferred ((JPM-I)) exhibits stability, as it has traded between $25 and $29 over the past 52 weeks, and in the 27s over the past 3 months. The current yield is 7.8%. The next dividend payment is on March 1, but it already went ex-dividend on January 27. Because preferred stocks tend to have higher bid-ask ranges closer to ex-dividend dates, buy it at lower levels ASAP to reap in a higher yield.

Fifth Third Bank Series C Preferred (FTB-C) is paying out $2.21875 in total dividends, which is a current yield of 8.4 percent. Since January 2010, it has been virtually trading sideways. It is also trading $10 above mid-September 2008 levels. The most recent dividend payment was February 15, so pick it up soon at lower price levels.

Regions Financial Series Z Preferred ((RF-Z)) pays out the same dividend amount as Fifth Third and has virtually the same current yield. It has also been trading sideways since January 2010, and trading 5 to 6 points above mid-September 2008 prices. The next dividend payment occurs on March 15, and it goes ex-dividend at least two business days before then.

KeyCorp Series F Preferred ((KEY-F)) came out in Q2 2008, and has made all dividend payments. It is yielding 7.7 percent currently. The 52 week range is $21.25 - $26.32. As a sign of confidence, it is trading 10 points higher than pre-Lehman levels. The next dividend payment is on March 15.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Not Much of a Debate: Inflation is Part of the Plan

Forget about lost decades. Forecasts that we'll be turning Japanese couldn't be further from the truth.

Here's why.

It's simple, really. Deflation is not in the interest of anybody in power, so it's very unlikely to happen.

The U.S. Federal Reserve's policy move to target inflation last week just re-emphasizes this point.

That's not to say deflation is a bad thing for everybody.

For savers and those living on fixed incomes, deflation would be a very good thing indeed.

Their income would gradually increase in real terms, and their savings would become steadily more valuable. Holders of Treasury bonds would also gain mightily from deflation.

However, the very people who would gain from deflation are not in power.

The People's Bank of China can't vote in the U.S. (yet!), Ron Paul is not president, and there is not an organized and powerful savers' political movement. After all, this is not Germany or Japan!

Meanwhile, in the real world, the U.S. government is spending far more than it takes in, and its debt is rising to dangerous levels. This has been happening on a bipartisan basis since at least 2001.

The Tea Party may have elected a Congress committed to reducing spending, but none of the battles of 2011 actually reduced spending - they just slowed the rate of growth somewhat.

Since much of the debt is borrowed long-term at low interest rates, the best way to reduce its burden on future generations is to encourage inflation.

Savers may lose out on the deal, but to those in Washington, the idea of inflating our way out of debt is irresistible.

Of course, sometimes we can depend on an independent central bank to resist this temptation. But at present, Fed Chairman Ben Bernanke is committed to near-zero interest rates in his fight against deflation.

Now you don't have to be a conspiracy theorist to realize that, if the power structure is committed to at least moderate inflation, inflation is what you are going to get.

In fact, it is already brewing.

Keep Your Eye on The Money SupplyOne of the more reliable signs of future inflation, at least in the medium term, is monetary growth.

In the last year, the St. Louis Fed's Money of Zero Maturity, the nearest counterpart to the old broad-money M3, has risen by 9.5%, while the slightly narrower M2 has risen by 9.8%.

As for the monetary base, which monetary theory tells us is supposed to be the most accurate inflation indicator of them all, that's up 29.9%. What's more, there is no sign of M2 and M3 slowing down.

If you don't believe me, you can discover these facts by clicking here and seeing for yourself from the St Louis Fed's weekly data.

This 9% to 10% increase in the money supply is compared to a current rise in nominal gross domestic product (GDP) of about 5%. (That's including some acceleration in 2011's fourth quarter over earlier in the year.)

Since monetary "velocity" tends to increase continually with modern payment systems, that is far more money growth than you need to currently run the economy.

So the real puzzle is not whether we will get inflation, but why we don't have it now.

After all, interest rates have been near zero for more than three years now, and the money supply was rising faster than the economy for many years before that.

By all accounts, prices should be higher -- but they are not.

Inflation Pressures Begin to BuildPart of the answer is found overseas.

The main factor suppressing inflation since the middle 1990s has been the Internet and modern telecoms. These have made it much easier to source products in low-wage countries.

So today we buy our clothes from China, whereas 20 years ago many of these same items were made in the U.S. The result has been about a 20% decline in apparel prices since their peak in 1993.

With this effect on consumer goods, and Moore's Law making technology-based goods cheaper and better all the time, even the rise in oil prices from about $10 per barrel in 1998 to about $100 today has been easily absorbed.

So the extra money that is sloshing around the world has pushed up commodity and energy prices, but has had much less of an effect on consumer prices.

However, there are signs that the price-suppressing effect of emerging markets manufacturing is coming to an end.

Chinese wages are rising rapidly, the currency has risen against the dollar, and China's balance of trade surplus has almost disappeared.

In fact, consumer price inflation worldwide began trending up in 2011. Now that commodity prices are rising again - as you would expect with expansionary money policy worldwide -2012 inflation pressures are beginning to build.

And now even Ben Bernanke finally weighed in last week as he tipped the scales even more decisively towards inflation.

By promising to keep interest rates at zero until the end of 2014, Bernanke has insured that interest rates almost certainly will remain below the inflation rate for the next three years.

That alone will cause inflation to rise, so we can expect the upward pressure on prices to continue.

So forget about deflation, since it will be vigorously resisted by the Obama Administration, Congress, and the Bernanke-led Fed. Inflation will keep heading higher from here.

In fact, by Election Day in November, inflation could be at troubling levels.

As for turning Japanese? .... I don't think so.

News and Related Articles:
  • Money Morning:
    Better Than Brazil: How to Invest in a Colombian Safe Haven
  • Money Morning:
    How to Win Bernanke's War on Savers with a 19% Yield
  • Money Morning:
    If You're Out of Work Blame Your Cell Phone
  • Money Morning: The Madness of Crowds: How to Play Bonds, China, and Gold in 2012

Coming Soon To An ETF Near You: Finland, Small Cap UK Funds From iShares

iShares, the ETF market leader in the U.S. with more than 200 individual funds across virtually every asset class, will notch another first for the industry later this month when it becomes the first ETF provider to list products on the BATS Exchange. January 24 will mark the first day of trading for eight new iShares ETFs on the BATS, with each of the upcoming products offering single-country exposure to an international stock market:

  • MSCI Norway Capped Investable Market Index Fund (ENOR)
  • MSCI Australia Small Cap Index Fund (EWAS)
  • MSCI Canada Small Cap Index Fund (EWCS)
  • MSCI Finland Capped Investable Market Index Fund (EFNL)
  • MSCI Germany Small Cap Index Fund (EWGS)
  • MSCI India Index Fund (INDA)
  • MSCI India Small Cap Index Fund (SMIN)
  • MSCI United Kingdom Small Cap Index Fund (EWUS)
ENOR will reportedly be the first ETF to begin trading, with the other seven following shortly thereafter.�

EFNL will become the first U.S.-listed ETF offering exposure to Finland; currently, the most significant allocation to that market is found in the Global X FTSE Nordic 30 ETF (GXF weights about 13% to Finland). The other first-to-market product in the group will be the small cap UK ETF; currently, iShares’ MSCI United Kingdom Index Fund (EWU) is the only ETF linked to UK stocks. EWU has amassed about $1.3 billion in assets under management since launching in 1996.

The move also represents a significant expansion of iShares’ lineup of small cap international equity ETFs [see Small Cap ETFdb Portfolio]. Already in 2012, the company has rolled out small cap ETFs targeting Singapore (EWSS) and Hong Kong (EWHS) to join funds focused on Brazil (EWZS), China (ECNS), emerging markets (EEMS), and developed ex-U.S. markets (IFSM). Other issuers already offer ETFs linked to indexes consisting of small cap stocks from Australia (KROO), Canada (CNDA), Germany (GERJ), and India (SCIN).�


BATS operates stock and options markets out of Kansas City and London. The company reported market share of 11.2% in the U.S. in December, up from about 9.5% during the same period in 2010. BATS has a considerably larger presence in Europe, where it holds about a quarter of the market. BATS is the third largest market operator in the U.S., trailing NYSE Euronext and Nasdaq OMX. Similar to the game plan for ETF issuers to attract money from mutual funds, BATS is aggressively competing on cost. The initial listing fee for the exchange is $100,000, which is less than half of what the two other major exchanges charge. Annual fees come in at a flat $35,000; those costs can run as high as $99,500 on the Nasdaq and up to $500,000 for the largest companies on the NYSE [see also How ETF Investors Can Save $415 Million].�

BATS has filed to publicly list its shares on its own exchange under the ticker BATS. An IPO could come during 2012, with the company seeking to raise $100 million in cash.�

�We�re pleased to be the first ETF provider to list products on BATS Exchange and believe it demonstrates our continued commitment to bringing clients the most innovative and highest quality products,� said Noel Archard, Global Head of Product Development & Management for iShares at BlackRock. �We appreciate the partnership and the innovative approach they are bringing to the market.”

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Top Stocks To Buy For 2012-1-27-5

Blueknight Energy Partners L.P (NASDAQ:BKEP) Blueknight Energy Partners, L.P. (Blueknight Energy Partners) provides integrated terminalling, storage, processing, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and asphalt product. Blueknight Energy Partners L.P witnessed volume of 1.17 million shares during last trade however it holds an average trading capacity of 19,329 million shares. BKEP last trade opened at $5.85 reached intraday low of $5.69 and went +8.85% up to close at $6.27.

BKEP has intra-day market capitalization $142.06 million and an enterprise value at $416.68 million. Trailing twelve months price to sales ratio of the stock was 0.83 while price to book ratio in most recent quarter was 0.29. In profitability ratios, net profit margin in past twelve months appeared at 7.46% whereas operating profit margin for the same period at 21.62%.

The company made a return on asset of 7.46% in past twelve months. In the period of trailing 12 months it generated revenue amounted to $170.22 million gaining $5.03 revenue per share. Its year over year, quarterly growth of revenue was 22.20%.

According to preceding quarter balance sheet results, the company had $1.01 million cash in hand making cash per share at 0.05. The total debt was $275.62 million. Moreover its current ratio according to same quarter results was 0.33 and book value per share was 21.74.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated -1.39% where the stock current price exhibited down beat from its 50 day moving average price of $6.33 and remained below from its 200 Day Moving Average price of $7.12.

BKEP holds 22.66 million outstanding shares with 966.58K floating shares where insider possessed 58.31% and institutions kept 1.70%.

Freddie Mac: A mess, and likely to stay that way

NEW YORK (CNNMoney) -- It's not tough to find critics of Freddie Mac and Fannie Mae on either the right or the left. But there has been little progress made in rehabilitating the mortgage giants.

Treasury took over the two firms three years ago, and the Obama administration laid out a range of options to reform them nearly a year ago.

Together, they have received $183.8 billion in taxpayer funds to date, making them recipients of the biggest bailout of the financial crisis. So far, the firms have returned more than $30 billion to Treasury through dividends.

Freddie Mac was thrust back into the spotlight when Gingrich's $25,000-a-month contract with Freddie became a point of contention in the Republican presidential primary battle.

Both the Gingrich and Romney campaigns blame Freddie and Fannie for the housing bubble and the financial meltdown that followed. But some experts argue that Wall Street firms, not Freddie and Fannie, were at the root of the bubble and the crisis that followed.

Critics of Fannie and Freddie on the left argue the firms should be more active in helping troubled homeowners refinance or reduce the amount they owe on underwater mortgages.

Now sparking even more criticism of the housing giants is a report out today from NPR and ProPublica contending that Freddie made a series of investments in mortgage securities that would pay off only if homeowners remained trapped in high-interest rate mortgages.

Has Obama's housing policy failed?

"Rather than maximizing assistance for homeowners, as they are directed to do by statute, reports indicate that Freddie Mac is betting against homeowners and making a profit when homeowners are not given an opportunity to refinance into lower rates," said Rep. Elijah Cummings, a Maryland Democrat and frequent critic of the firms.

He said the investment by Freddie is a sign that the interim director of the Federal Housing Finance Agency, the regulator overseeing Fannie's and Freddie's reorganization, should be replaced.

Freddie denied Monday that the firm is positioned against having homeowners refinance, although it did confirm the investment itself.

"Refinancing is our bread and butter today," said Freddie spokeswoman Sharon McHale. She said that 74% of mortgages it financed in 2011 were refis, and that it has provided funding for more than four million refinancings since being taken over by the government in 2008.

"We are very committed to helping borrowers refinance their loans," she said.

But McHale said she couldn't comment on debate about reforming Fannie and Freddie. Neither the Treasury department nor the FHFA, had any comment about the lack of progress on reforms. FHFA did say Freddie Mac's investments had had no impact on refinance decisions, and that Freddie had previously agreed not to increase those investments without further consultation with the agency.

Guy Cecala, the CEO of Inside Mortgage Finance, a leading home loan trade publication, said Fannie and Freddie are no longer losing money on the new loans they're funding.

And the lack of a private sector alternative to the government-backed mortgage securities means Congress is in no rush to wind the firms down, despite the rhetoric about the need to do so.

"They're at this point a very necessary evil," he said. "It is unclear how long it will take for a private security market to come back. It's been dead for three years and is showing no signs of life now."

Cecala said that there is little sign of Congressional commitment to action, even on issues where there is broad bipartisan agreement, such as the need to lower the size of mortgages that the firms will back.

"The problem is there have been 20 reform bills introduced," he said. "All that is has done is muddy the waters so much we can't sift through and see what's practical and what's not." 

Penny Stock Titan Resources Skyrockets +220%

Titan Resources International Corp. (PINK: TNRI) shares are seeing a huge rally in today�s trading. The penny stock reached a high of $0.05 in early trading, and at last check, it was up 207.69% to $0.0400, with volume up from daily average of 75,736 to 3.72 million. Titan Resources shares gained 300% in the last three trading sessions. The stock is currently trading above its 50-day and 200-day moving averages.

Titan Resources shares are soaring after the company reported the engagement of MPH Consulting Limited to further continue the exploration on its silver bearing Dinty Moore Property, which is located just outside of New Denver in British Columbia, Canada. Recently the company completed the preliminary analysis of the airborne survey conducted on the property. The airborne survey data will be further reviewed by MPH Consulting.

Commenting on the development, Bill Akrivos, CEO of Titan Resources International, said that the company is very excited to have the opportunity to work with Jeremy Brett of MPH Consulting. Akrivos further said that the company deliberately chose MPH for its solid reputation in the global exploration and mining community and is excited with its participation in the project.

Titan Resources International is engaged in the acquisition, exploration and development of small to medium size precious metals properties of exceptional merit. The company is based in Ontario, Canada.

  • This newsletter has been helping traders make a killing on TNRI. Click here for a 25% discount offer.
  • Need fast service and cheap rates from a broker? Buy stock online at my favorite brokerage
  • Want more? Check out the message board buzz for TNRI
  • See what newsletters are recommending these stock picks
  • Get breakingnews alerts on these stocks:

Top Stocks For 2012-1-23-17 Stock Report!

Friday August 28, 2009

Cardtronics, Inc. (Nasdaq:CATM) has entered the Puerto Rican ATM market with its first customer in Puerto Rico, To Go Stores. With over 33,000 ATMs in the United States, the United Kingdom, and Mexico, Cardtronics is the world’s largest non-bank ATM operator. Cardtronics will install ATMs in 11 of the 26 To Go Stores locations in Puerto Rico, with the expectation of placing ATMs in the remaining 15 To Go Stores during 2010.

Heartland, Inc. (OTC Bulletin Board: HTLJ) today announced that Heartland Steel, the company’s steel warehousing subsidiary, has achieved $1 million in sales. The company noted that this milestone is especially notable because it was achieved prior to the completion or occupation of Heartland Steel’s new state-of-the-art warehousing and distribution facility and office space in Washington Court House, Ohio.

Magellan Petroleum Corporation (Nasdaq: MPET) reported consolidated net income of $665,000 ($0.02 per share) on gross revenues of $28.2 million for its fiscal year ended June 30, 2009, as compared to a net loss of $8.9 million (loss of $0.21 per share) on revenues of $40.9 million in fiscal 2008.

Global 8 Environmental Technologies, Inc. (OTC Bulletin Board: GBLE), a company committed to preserving our planet through environmental consciousness, technology and education, announced today that the Company’s President and CEO, Julio Ferreira, will be travelling to Brazil. While in Brazil, Mr. Ferreira will conduct a series of conferences with many prominent business leaders, investors and government officials.

Live Current Media Inc. (OTCBB:LIVC), a media company built around content and commerce destinations, announces today that it has completed the sale and assignment of the domain name and the Indian Premier League contract for a total consideration of approximately $1.75 million. This transaction eliminates all of the Company’s liabilities, past and future, associated with the Company’s cricket operations. In addition, the unrelated third party purchaser, GCV Mauritius, has agreed to hire Mark Melville, Live Current’s President, and to cover severance costs related to the termination of certain Live Current employees associated with the cricket operations. This transaction allows Live Current to completely exit the cricket business while significantly reducing corporate overhead.

Verenium Corporation (Nasdaq: VRNM) announced today that it has entered into privately negotiated exchange agreements with certain existing holders of its 5.5% Convertible Senior Notes due 2027 (the “5.5% Notes”). Pursuant to the agreements, existing holders of the 5.5% Notes have agreed to exchange approximately $28.5 million in aggregate principal of the 5.5% Notes, for approximately $12.8 million of 9% Convertible Senior Secured Notes due 2027 (the “New Notes”). Lazard Middle Market LLC acted as a financial advisor to the Company for this transaction.

Wednesday, June 13, 2012

Why Every Investor Should Care About Apple

Apple (NASDAQ: AAPL) is a company and stock everybody knows and follows, and it carries a 1.9% weighting in the S&P 500, which is precisely why it is worth watching closely.

Case in point, Tuesday’s announcement that Steve Jobs will hold the keynote address at next week�s Worldwide Developers Conference was all over the news and gave the stock a nice pop, although it fell with the rest of the market on Wednesday.

On a two-year weekly chart we see a clear uptrend channel that is very much still in place as AAPL currently trades smack in the middle of the channel.

Zooming in closer on a daily chart, the downtrend resistance becomes apparent. After putting in an all-time high on Feb. 16, Apple has had a fairly volatile sideways consolidation period, and more importantly, one that looks to resolve itself soon in either direction.

This downtrend line currently comes in just around $350 and gives us a clear risk/reward setup. The setup would trigger on a solid daily close above the $350 level. A final profit target on the long side would be near the highs of February, and a clearly defined stop-loss could be placed just a smidge below the 50-day moving average (yellow line).

The potential trade setup (if and when triggered) is interesting in and of itself. However, I am just as interested in closely monitoring how AAPL trades as a proxy for the broader tape.

The Most Detailed G Headshot Review And The Best Bonus

Confidential Conversions is a product by Philip Mansour. The course is going to focus on how to make money with CPA programs. It is a course with 30 Live Videos with 10 Hours of Footage and PDF for “2 Hour Master Plan”. There are 3 main modules:

Module #1: Network Traffic Reconnaissance

This module exploits the secret PPC programs which will generate you traffic for an extremely low price. The traffic which comes from those PPC programs are not people who are forced to watch at your website. These people are actually looking for your website and will be happy to take whatever you offer!

The second part of the course is called “Mobile Match Maker”

This module is actually extremely good and I love it. Only a few online marketers use mobile marketing or even know about it. However mobile marketing was announced years ago and many marketers forgot about it. Nevertheless you can use mobile marketing to make tons of cash. Philip even reveals his own techniques.

The third module is called “Artificially Organic”

This Philip’s “wonder weapon”. This method allows you to “hijack” visitors from search engines and other big websites. This is an extremely simple technique that almost everyone does not use it.

A great addition to the main course is the “Two Hour Master Plan”. This is a detailed instruction on how to implement all the techniques to your own websites.

Furthermore there will be an amazing offer from Phil. For a small fee you get access to the weekly live seminars with him! He will answer any questions and even show how he works every single day.

Believe me one thing: Phil Mansour knows what he is talking about! He is a young internet marketer and started his career with only eighteen years. However he managed to produce two of the best selling Clickbank products. These courses changed even my life!

I strongly urge yout to get the G Headshot. Nevertheless you should read the whole G Headshot Review here.

Corporate Confidence Continues To Wane

I closed my review of the 2012 prospects for mergers and acquisitions with this paragraph: “Let’s hope the boom in M&A business does take place. Let’s hope that the corporate cash and corporate borrowing do not go just to corporations buying back their own stock. Let’s hope that the unwinding and restructuring takes place because that is one prerequisite for business to get back to the capital investment activities that do drive economic growth.”

However, at the end of January we see theheadlines: “M&A volumes at lowest for a decade.”

“Dealmaking has had its slowest start to a year for nearly a decade, as companies’ appetite for mergers and acquisitions remains suppressed by the uncertain outlook for the global economy.”

The deal volumes announced so far this year…about half the level of 2011 at this time according to S&P Capital IQ.

Additionally, we read “Hordes of hoarders,” concerning corporate cash hordes "…with corporate entities holding onto well over $1.7 trillion at last count...At present, cash accounts for more than 6 percent of US non-financial companies.”

In one specific case, Apple (AAPL) has almost $100 billion in cash on its balance sheet, about level with the market value of companies like McDonald's (MCD), ConocoPhillips (COP), or Cisco Systems (CSCO).

This pales against the cash holdings of U.S. commercial banks, which in January 2012 hold almost 13 percent of their assets in cash balances, up from 9.3 percent at the end of 2010.

I know that this is early in the year, but with everyone looking for positive signs that the economy is picking up steam we need to consider other signs as well. Furthermore, the current situation is not unlike the situation that existed at the start of last year, and the actual commitments never really came about.

The one word that seems to be on almost everyone’s lips concerning this situation is uncertainty. There is just so much uncertainty that exists in the world right now that people are unwilling to commit substantial resources to acquisitions or capital investments.

Where is this uncertainty coming from?

In my mind this uncertainty exists from the lack of economic leadership in the world today. Europe continues to dither and so does the U.K., and so does the U.S. No one seems to know where they are going or where we are going.

How can anyone commit in such an environment?

Who knows what economic policies are going to prevail in these areas over the next year or two, let alone the next three months?

Who knows how the people in these areas are going to react to whatever economic policies are going to be enacted by their governments?

We’ve seen how the governments have acted in the recent past and these examples cannot give anyone much confidence.

Right now, I am concentrating on factors such as these to try and understand the state of the economy. Business leaders may be prepared to commit in the future and certainly they have the means to borrow additional funds if they need them.

These leaders still face the following question: “Why should I commit to buy another company now when the economy could get worse and I could buy the same company for a lower price at some time in the near future?”

Right now, the probability of this happening is still apparently large enough that it is causing these business leaders to hesitate to commit on acquisitions or capital investment.

I keep asking people to name one person in a position of political authority in the world that they would apply the title “leader” to, and I keep coming up with silence.

Unfortunately, I don’t believe that business leaders are going to commit resources until some sort of political leadership is forthcoming. I still believe that we can look at how corporations are using their “cash” as an indicator of future economic performance.

For right now, though, the “cash” stays on the balance sheets!

Why Not Gold as Equity Hedge?

Gold has historically been used in a variety of ways by different investors, but the precious metal is perhaps most commonly embraced as a safe haven investment that smooths out overall portfolio volatility in rocky economic environments. When signs of economic weakness appear, investors tend to sell risky assets such stocks in favor of low-risk safe havens such as Treasuries and physical currency. The relative performance of these asset classes during the most recent recession highlights the potential benefits of holding gold: between September 2008 and the bear market lows in in March 2009, the SPDR Gold Trust (GLD) added 14% while the S&P 500 SPDR (SPY) lost almost 45%.

But so far in 2010, gold hasn’t lived up to its reputation as an equity market hedge. Far from it in fact. The correlation between SPY and GLD has been nearly 0.95, compared to nearly zero historically. As shown in the chart below, GLD and SPY have moved in lockstep through the first six weeks of 2010:

Despite the recent breakdown in relationship (or lack of relationship) between these two asset classes, jumping to the conclusion that gold as an equity hedge is a thing of the past is a bit premature. There’s actually a relatively simple explanation: both U.S. stocks and gold bullion have been reactionary assets for much of the year, driven by developments in overseas markets.

Europe in Focus

Most recently, investors around the globe have been carefully monitoring the financial health of Greece. Although the European nation accounts for only a sliver of global GDP, an escalating debt crisis has stoked fears of a contagion effect and intensified concerns over public finances in larger debt-laden countries such as Spain and Portugal.

In a reversal of the cause-effect relationship that dominated markets at the start of the recent recession, U.S. stocks have taken their cue from European markets for much of the year, tumbling when a full-blown debt crisis appeared imminent and recovering slightly on hopes of an effective bailout. Gold prices have also been driven (indirectly) by the European markets. As concerns about the short-term stability and long term sustainability of the euro zone currency have popped up, the euro’s major rivals, most notably the U.S. dollar, have moved accordingly.

Because they are priced in dollars, commodities have historically had and inverse relationship with the U.S. currency. Since gold also competes with the dollar as a safe haven investment and reserve holding, the inverse relationship between these two “currencies” has been particularly strong. So negative developments in Europe have both weighed on U.S. markets and boosted the dollar (which in turn has sent gold prices lower), explaining the suddenly strong relationship between two assets that have historically exhibited very low correlations.

Disclosure: No positions at time of writing.

The Sovereign Debt Crisis: Bad For Europe, Good For U.S. Stocks

For several months now, we've been talking about the post-financial-crisis "new world order" that's emerged from the speculative excesses, recessionary realities and regulatory breakdowns of recent years. This new world order has created a world of lucrative new profit opportunities - that are governed by a new set of profit rules.

In terms of that whole new rules/new profit opportunities paradigm, here's one that may surprise you: The ongoing European crisis could end up as a net positive for U.S. stocks.

Let me explain...

A Revealing Prediction We've talked a lot about the debt and corporate growth troubles in Europe and the developed economies of Asia, and I've shown you a lot of reasons why the companies in those regions should suffer. Yet shares in those regions of the world have actually risen.

For some additional insight on the forces at play, I checked in with the folks at the New York-based Craig Drill Capital - a great, under-the-radar hedge fund that employs some of the best analysts and money managers in the world. Steven H. Reynolds , the firm's chief investment officer, has a sanguine view of Europe. And he believes that the European debt crisis could end up looking like a net positive for American shareholders.

"For U.S. equity investors, a return to the 'Goldilocks' environment will evolve," Reynolds said. "Moderate economic growth, subdued inflation, strong corporate profits, low interest rates and ample liquidity argue for higher asset prices" - including U.S. stocks.

Eurozone Blues For investors who insist on keeping informed, there's no shortage of news about the European debt situation. Trouble is, most of that news is bad. And, in typical knee-jerk fashion, with each announcement, investors in each of the world's major markets react by whipsawing security prices for the following day or two, which causes additional worry - and uncertainty.

For instance, Bloomberg News just reported that European banks at risk of write-downs from the sovereign debt crisis face a funding squeeze that may depress earnings, curb lending and imperil the region's economic recovery.

Bloomberg said investors are shunning bank securities on concerns that Greek, Portuguese and Spanish bonds held by the lenders will plunge in value. Bank bond sales slowed in May to the lowest level since the Lehman Brothers Holdings (OTC: LEHMQ) failure in 2008, as the extra yield buyers demand to hold the securities over government debt soared to the highest this year. Firms are wary of lending to each other, depositing record funds with the European Central Bank. (ECB).

"There is a lot of mistrust," said Christoph Rieger, a bond analyst at Commerzbank AG (PINK ADR: CRZBY) in Frankfurt, told Bloomberg. "Banks are trading with the ECB rather than with each other."

Reynolds, the Craig Drill Capital analyst, says the situation isn't nearly as alarming as it seems.

He basically believes that while pu blic and private debt levels and interest payments relative to gross domestic product (GDP) are at dangerous levels in Europe, the problems are more manageable than the ones that sparked the global financial crisis in 2008:

  • The banks are sounder.
  • There is more transparency.
  • Most of the problems are out in the open.
  • And - most important of all - the "financial engineers" at the European Union (EU) and ECB are now experienced in crisis management.
Those financial engineers, "honed on the Panic of 2008 ... are capable of developing creative remedies to the current liquidity crisis," Reynolds said. "For a reasonable period of time, a relatively stable - yet fragile - financial system will result."

A Buoyant U.S. Outlook? There's no denying that bearish investors have made their case in recent weeks. They are legitimately afraid that the economies of the United States and Europe will fade so much in the months to come that they will sink back into recessions punctuated by credit blowups and a resumption of a bear market for U.S. stocks.

Still, the simple fact that there are a few economic boogey-men lurking behind each piece of data (many of which are actually quite suspect) doesn't mean that investors should run screaming away from stocks.

In fact, if you take the time to listen to the opposite point of view before you make up your mind about the direction the economy is headed, you might be pleasantly surprised.

Just consider these most-recent developments and revelations.

Capital Economics, a crack London-based macroeconomic research team, reported four positive developments for the U.S. recovery. CapEcon said that:

  • U.S. household net worth rose for the fourth straight quarter.
  • Manufacturing output will rise by 1% in June.
  • Gasoline prices are expected to drop 4.5% this month from last month, keeping inflation at bay.
  • And a weather-related jump in energy generation is expected to add 0.6% to industrial production
Analyst Richard Berner - the co-head of global economics and chief U.S. economist at Morgan Stanley (NYSE: MS), recently said that his economic models suggest that the pace of economic growth will actually quicken in the months to come.

According to Berner, "incoming data portray a robust economy, an acceleration from a 3% pace of growth in Q1 to a 4% annual clip in Q2 even as consumer spending decelerates ... and we continue to expect 3.5% overall growth in the second half of this year."

The U.S. recovery will benefit from a bit of a tailwind created by the European debt situation, says Craig Drill Capital's Reynolds.

"For the European economy, restrictive policies should be moderately deflationary with slower growth, a competitive euro for trade, and stable interest rates. For the U.S., the impact should be minimal with a weak euro/U.S. dollar, moderately lower exports, continued low levels of interest rates and positive foreign capital inflows.''

Plus, don't forget that the whole European mess will provide two big tailwinds to American consumers: A continuation of the afore-mentioned drop in gasoline prices - thanks to a stronger dollar - and lower mortgages rates - thanks to a rise in demand for U.S. Treasury bonds spawned by the lack of faith in the European financial system.

Europe is troubled. But the region's leaders are on the case, and the lower euro and interest rates will prove to be palliative - at least for awhile, Reynolds says.

Just how long the "perfect storm" fallout from an imperfect Europe will continue to aid the U.S. rebound and support U.S. stocks remains to be seen.

The bottom line for U.S. investors : Overall economic and corporate growth may be set to slow, but not to levels that are disastrous, or even likely to imperil U.S. stocks - at least not yet.

Investors should continue to trade the pessimism while it persists. But they should also be watchful for an overabundance of optimism if we get to the top of the range at the 1,150 level of the Standard & Poor's 500 Index, or if bears get the upper hand and manage to push the benchmark U.S. stocks index back down under 1,040. That would represent a decline of about 5% from yesterday's (Wednesday's) close of 1,092,04.

[Editor's Note: As this market analysis demonstrates, Money Morning Contributing Writer Jon D. Markman has a unique view of both the world economy and the global financial markets. With uncertainty the watchword and volatility the norm in today's markets, low-risk/high-profit investments will be tougher than ever to find.

It will take a seasoned guide to uncover those opportunities.

Markman is that guide.

In the face of what's been the toughest market for investors since the Great Depression, it's time to sweep away the uncertainty and eradicate the worry. That's why investors subscribe to Markman's Strategic Advantage newsletter every week: He can see opportunity when other investors are blinded by worry.

Subscribe to Strategic Advantage and hire Markman to be your guide. For more information, please click here.]