When it comes to life insurance, it seems that more folks are passing up plain vanilla term life for flashy hybrids.
In the past several years, the number of new term life policies in the U.S. has continued to fall, dipping to 41.1% of the life insurance market in 2009 from 44.6% in 2007, according to the American Council of Life Insurance. And last year, the slide continued. The number of new term life insurance policies sold in the U.S. dropped by 16% in the fourth quarter, compared with the same period in the previous year, according to insurance researcher and consultant LIMRA.
That's surprising, considering that a number of personal financial advisers and consumer experts still point to plain old term life insurance as the best choice when selecting a financial umbrella for your loved ones, especially before the kids are out of college.
"Term is still 99% the right thing to get, if you need insurance, and have a baby, and want to make sure they are fed and educated if you die," says Bob Hunter, director of insurance for the Consumer Federation of America. "But if you're looking for a tax break, then whole insurance makes sense."
"There's still too much non-term insurance being sold," he adds, "because agents make more money when selling things that are hooked onto it, or have premiums that go up. They have an incentive to sell you the wrong thing."
Nonetheless, consumers increasingly are purchasing life insurance policies that are other than straight term. For example, the number of new whole life insurance policies in the U.S. gained 6% in the fourth quarter over the previous year, while universal life insurance polices rose a whopping 20%.
Universal Policies Gain by Mimicking Term Life
I! ronicall y, the driver of this double-digit gain for universal life insurance policies in 2010 was the addition in 2009 of term life features to these hybrid policies, says Elaine Tumicki, vice president of product research for LIMRA.
"Some companies introduced a combination of permanent universal life and term life insurance products in 2009, and that's why we've seen some term life insurance policies decline, while universal life and whole life increased in 2010," Tumicki says.
Term life insurance is considered attractive because of its low premiums which are set for a given number of years -- a 10-year, 20-year or 30-year period, for example. Universal insurance generally costs more and allows policyholders to have flexibility in determining when and how much to apply to their premium payments. Whole life insurance is a permanent insurance that is available until the policyholder dies, and it can accumulate a cash value.
Under hybrid universal-term life insurance policies, like those of term universal life pioneer Genworth Financial Companies (GNW), the policy starts like a term insurance plan, with a set number of years at a level premium that's designed to be comparable to traditional term policies. However, Genworth's Colony Term UL, introduced in 2009, allows policyholders to extend their coverage, after the initial term is set to expire, at a new, higher premium that's good until the policyholder is 95.
Genworth created the term-universal life insurance product as a means to compete with term products, while giving consumers a permanent and flexible universal life product, says Janet Deskins, senior vice president of Life Products for Genworth, in an email interview.
Consumers who aren't sure if they want permanent insurance or term insurance are best suited for this type of universal term life insurance, says Scott Witt of Witt Actuarial Services, a scheduled panelist at this we! ek's Nat ional Association of Personal Financial Advisors (NAPFA) annual conference in Utah.
"The disadvantage with term universal life is there's no cash value like a permanent one," Witt says. "Cash values are useful if they lower your premiums later on or you can take a loan out against it. Then there is a living value to it."
Buy Long-Term Care Separately
In addition to this tweak to term and universal life insurance, other changes have been afoot in the life insurance industry.
John Ryan, a strategy consultant with Ryan Insurance and another panelists scheduled to appear on NAPFA's "Changing Face of Life Insurance" session, noted an increasing number of companies are offering long-term care insurance riders on universal or whole life insurance policies.
"They're becoming popular to where about 10% of policies are sold with this, versus 2% to 3% a couple years ago," says Ryan.
Witt is not a fan of these type of long-term care riders.
"If you need long-term care insurance, then you should buy long-term care," Witt says. "If you need life insurance, you should get life insurance. If you put the two together, you can erode your death benefits if your long-term care is paid out of that."
Long-term care riders are just part of a mix that's been introduced since the insurance industry was socked by the recession. And the wave of riders that's emerged is far different from the innovative products that came on the scene after the recession of the early 1970s, says Jim Mitchel, LIMRA vice president of developmental research.
In the six years that followed the dour early 1970s, those products included universal life insurance and stock-based variable life insurance. But since the current economic malaise hit, the insurance industry has largely pumped out new types of riders, says Mitchel.
He points to the example of a critical-illness rider, which allows policyholders to cash in a portion! of thei r life insurance as a lump sum if they have a stroke. Then there are income-replacement riders, which allow policyholders to get an amount equivalent to their paycheck, that's paid out on a regular schedule rather than a lump sum.
In summing up the type of products introduced since the nation was hit with a recession a couple of years back, Mitchel says: "There may be some innovative products in the pipeline now, but I haven't seen a lot of innovation this year. A lot of people are introducing extensions of their existing product line."
Sunday, January 29, 2012
Friday, January 27, 2012
2 Bold Predictions for 2012
Around this time of the year, predictions are a dime a dozen. Everyone has their best stock pick of the year lined up and thinks they have uncovered the next get-rich-quick scheme that will lead them to the promised land.
Fortunately for you, I've never been good at taking the easy route. Instead, I'm going to look at two completely outside-the-box predictions that I feel very confident about heading into 2012. I'm fully ready to accept my lashings on Dec. 31 if these turn out to be wrong, but let's just say that the odds aren't in my favor from the start.
Prediction 1: Large-cap stocks will outperform small-cap stocks
You might be thinking, "So what, this isn't exactly what I'd call a bold prediction!" I assure you, given that small caps have outperformed large-cap stocks in nine of the past 11 years, this is a prediction in which the odds are clearly not in my favor.
Small-cap companies hold an edge over their larger counterparts because they often boast much faster growth rates and can double their revenue a whole lot easier than a large-cap company can. They also act as a psychological lure to investors since many are drawn to the trend of past returns -- and in this case it's a rich history of small caps outperforming large caps. But that trend looks to change in 2012 by my estimation.
For starters, large-cap companies are significantly cheaper on an earnings basis than their usually faster-growing small-cap counterparts. Normally, pundits would compare the S&P 500 to the Russell 2000 to get a gauge of price-to-earnings ratios. As for me, I prefer to use the Vanguard Large-Cap ETF (NYSE: VV ) , which attempts to mirror the MSCI U.S. Prime Market 750 Index of primarily large-cap companies, and the Vanguard Small-Cap ETF, which attempts to track the returns of the MSCI U.S. Small-Cap 1750 Index. On a trailing-12-month basis, the large-cap ETF boasts a P/E of 12 versus the small-! cap ETF at 14.
An even bigger difference from a percentage basis is seen when comparing the yields of these two ETFs. As should be no surprise, small-cap companies have less capital to work with since they're constantly reinvesting their capital into their business. Less cash on hand often means little chance for a dividend. Large caps, on the other hand, have well-established businesses and often lure investors into purchasing their stock by sporting stable, yet high-powered, dividends. Once again, using our Vanguard example, the large-cap ETF boasts a 1.90% to 1.20% yield edge over the small-cap ETF.
With many expecting volatility to continue in 2012, low-beta, high-yielding large caps are likely going to be where investors park their money.
Prediction 2: U.S. money center banks will be the best performing sector in 2012
Yes, even with Europe near a complete debt meltdown, China's growth showing visible signs of slowing, and the U.S. economy sputtering in neutral, I'm choosing financials -- predominantly U.S. money center banks -- as the best performing sector in 2012.
This time I will beat the dead horse and point out that relative to book value, U.S. money center banks Bank of America (NYSE: BAC ) , Wells Fargo (NYSE: WFC ) , JPMorgan Chase (NYSE: JPM ) , and Citigroup (NYSE: C ) are trading at their lowest valuations in a decade.
Another common misconception is that U.S. banks wouldn't be able to stand up to the shock of a European meltdown. Bank of America withstood a huge $8.8 billion loss in 2011 related to legal settlements in its mortgage division -- chances are it would survive the $1.5 billion it currently has in exposure to Italy. JPMorgan Chase is in considerably better financial shape than Bank of America and even it, on a comparative basis, is only claiming $6.3 billion in exposure to Italy.
Fear-mongering can be a scary thing, and it ran full force throughout the banking sector in 2011. With these four banks now trading at minuscule forward P/E ratios ranging from six to nine, there is very little worry left to squeeze out of this sector. You know the old phrase "You can't get blood from a turnip"? Well this is it in action. Mark my words, U.S. money center banks will be the best performing sector come year end.
Foolish roundup
There you have it, folks -- two calls that will either make me look like a prince or a pauper. The odds are already stacked against me, so I'm going to need calmer heads to prevail and a little bit of luck to be correct.
What's your take on my two predictions? Share your thoughts in the comments section below.
Also, if you're looking for one more great prediction heading into 2012, consider downloading your copy of our latest special report, "The Motley Fool's Top Stocks for 2012," in which our chief investment officer reveals his top play which has been dubbed the "Costco of Latin America."
Fortunately for you, I've never been good at taking the easy route. Instead, I'm going to look at two completely outside-the-box predictions that I feel very confident about heading into 2012. I'm fully ready to accept my lashings on Dec. 31 if these turn out to be wrong, but let's just say that the odds aren't in my favor from the start.
Prediction 1: Large-cap stocks will outperform small-cap stocks
You might be thinking, "So what, this isn't exactly what I'd call a bold prediction!" I assure you, given that small caps have outperformed large-cap stocks in nine of the past 11 years, this is a prediction in which the odds are clearly not in my favor.
Small-cap companies hold an edge over their larger counterparts because they often boast much faster growth rates and can double their revenue a whole lot easier than a large-cap company can. They also act as a psychological lure to investors since many are drawn to the trend of past returns -- and in this case it's a rich history of small caps outperforming large caps. But that trend looks to change in 2012 by my estimation.
For starters, large-cap companies are significantly cheaper on an earnings basis than their usually faster-growing small-cap counterparts. Normally, pundits would compare the S&P 500 to the Russell 2000 to get a gauge of price-to-earnings ratios. As for me, I prefer to use the Vanguard Large-Cap ETF (NYSE: VV ) , which attempts to mirror the MSCI U.S. Prime Market 750 Index of primarily large-cap companies, and the Vanguard Small-Cap ETF, which attempts to track the returns of the MSCI U.S. Small-Cap 1750 Index. On a trailing-12-month basis, the large-cap ETF boasts a P/E of 12 versus the small-! cap ETF at 14.
An even bigger difference from a percentage basis is seen when comparing the yields of these two ETFs. As should be no surprise, small-cap companies have less capital to work with since they're constantly reinvesting their capital into their business. Less cash on hand often means little chance for a dividend. Large caps, on the other hand, have well-established businesses and often lure investors into purchasing their stock by sporting stable, yet high-powered, dividends. Once again, using our Vanguard example, the large-cap ETF boasts a 1.90% to 1.20% yield edge over the small-cap ETF.
With many expecting volatility to continue in 2012, low-beta, high-yielding large caps are likely going to be where investors park their money.
Prediction 2: U.S. money center banks will be the best performing sector in 2012
Yes, even with Europe near a complete debt meltdown, China's growth showing visible signs of slowing, and the U.S. economy sputtering in neutral, I'm choosing financials -- predominantly U.S. money center banks -- as the best performing sector in 2012.
This time I will beat the dead horse and point out that relative to book value, U.S. money center banks Bank of America (NYSE: BAC ) , Wells Fargo (NYSE: WFC ) , JPMorgan Chase (NYSE: JPM ) , and Citigroup (NYSE: C ) are trading at their lowest valuations in a decade.
Source: Morningstar.
Not even during the heights of the credit crisis did banking stocks see their valuations dip as much as they have in recent years -- yet oddly enough, bank liquidity is at its highest levels in near-term memory. Bank of America sold off much of its stake in Chi! na Const ruction Bank in order to boost its tier-1 common equity ratio to 8.65%. Its peers boast even higher tier-1 common ratios. JPMorgan Chase at 9.9% and Wells Fargo at 9.35% are so well-capitalized that both boosted their dividends earlier in the year. Citigroup is actually the best capitalized of the bunch with a tier-1 common equity ratio of 11.7%.Another common misconception is that U.S. banks wouldn't be able to stand up to the shock of a European meltdown. Bank of America withstood a huge $8.8 billion loss in 2011 related to legal settlements in its mortgage division -- chances are it would survive the $1.5 billion it currently has in exposure to Italy. JPMorgan Chase is in considerably better financial shape than Bank of America and even it, on a comparative basis, is only claiming $6.3 billion in exposure to Italy.
Fear-mongering can be a scary thing, and it ran full force throughout the banking sector in 2011. With these four banks now trading at minuscule forward P/E ratios ranging from six to nine, there is very little worry left to squeeze out of this sector. You know the old phrase "You can't get blood from a turnip"? Well this is it in action. Mark my words, U.S. money center banks will be the best performing sector come year end.
Foolish roundup
There you have it, folks -- two calls that will either make me look like a prince or a pauper. The odds are already stacked against me, so I'm going to need calmer heads to prevail and a little bit of luck to be correct.
What's your take on my two predictions? Share your thoughts in the comments section below.
Also, if you're looking for one more great prediction heading into 2012, consider downloading your copy of our latest special report, "The Motley Fool's Top Stocks for 2012," in which our chief investment officer reveals his top play which has been dubbed the "Costco of Latin America."
Do Weak PC Sales Now Mean Better Ones Later?
Microsoft (NASDAQ: MSFT) management says that PC sales may have fallen slightly in the fourth quarter of last year. The Thailand floods that interrupted supply chains are to blame. What Microsoft did not say is whether pent-up demand will offset the drop as 2012 wears on. That is, logically, what should happen.
Tami Reller, chief financial officer of Microsoft's Windows unit, predicted that figures will show PC sales fell 1% or more last quarter, according to a Bloomberg report. Disk drive parts made in Thailand were in short supply. Smartphone sales also may have undermined demand.
The economy?is good enough, and the number of new PC products is large enough, that when manufacturing returns to normal levels, there should be?a large uptick in sales. At least there should be one in the short term.
The usual cycle of PC replacement among consumers and companies will be one reason for robust sales as the year goes on. Products reach the market with new software and faster chips. Competition among the largest manufacturers keeps prices low. Entirely new segments of the market, in the current case tablets, drive customer sales. And there are the introductions of unexpected products like the new ultrabooks, which are light but have powerful processors.
It is convenient to say that smartphone adoption will hurt PC sales substantially. That may be true, but it also may not be. The PC can still do many things smartphones cannot because of their processors, screen size and storage capacity. Consumers and business users often have both PCs and smartphones. None of the large research firms, such as IDC, have changed their overall?global 2012?forecasts since the Thailand floods.
PC sales may have been partially?interrupted recently, but when that interruption has ended, demand will push sales higher.
Douglas A. McIntyre
Tami Reller, chief financial officer of Microsoft's Windows unit, predicted that figures will show PC sales fell 1% or more last quarter, according to a Bloomberg report. Disk drive parts made in Thailand were in short supply. Smartphone sales also may have undermined demand.
The economy?is good enough, and the number of new PC products is large enough, that when manufacturing returns to normal levels, there should be?a large uptick in sales. At least there should be one in the short term.
The usual cycle of PC replacement among consumers and companies will be one reason for robust sales as the year goes on. Products reach the market with new software and faster chips. Competition among the largest manufacturers keeps prices low. Entirely new segments of the market, in the current case tablets, drive customer sales. And there are the introductions of unexpected products like the new ultrabooks, which are light but have powerful processors.
It is convenient to say that smartphone adoption will hurt PC sales substantially. That may be true, but it also may not be. The PC can still do many things smartphones cannot because of their processors, screen size and storage capacity. Consumers and business users often have both PCs and smartphones. None of the large research firms, such as IDC, have changed their overall?global 2012?forecasts since the Thailand floods.
PC sales may have been partially?interrupted recently, but when that interruption has ended, demand will push sales higher.
Douglas A. McIntyre
GOP 2012: What they (wouldn't) cut
NEW YORK (CNNMoney) -- For all their differences, the 2012 Republican contenders have at least one thing in common: They all want to cut spending.
Rick Santorum wants to cut $5 trillion over 5 years, immediately return non-defense discretionary spending to 2008 levels, pass a balanced budget amendment and cap federal spending at 18% of Gross Domestic Product.
Mitt Romney would cap spending at 20% of GDP, immediately reduce non-security discretionary accounts by 5% and pursue a balanced budget amendment.
Newt Gingrich, Rick Perry and Jon Huntsman have designs of their own.
Problem is, the candidates lack a set of realistic, specific proposals that stand even a small chance of becoming law.
"If you look at most politicians talking about cuts, they are very, very, very short on specifics with a few exceptions," said Tad DeHaven, a budget analyst at the CATO Institute, a libertarian think tank that advocates for smaller government.
On the hunt for specific budget cuts, DeHaven combed through the economic plans listed on each candidate's campaign website.
He came away disappointed -- with one exception.
"From a spending standpoint, there is Ron Paul and then everybody else," DeHaven said. "You have a complete budget from Paul, and not much from anybody else."
Paul's plan doesn't lack ambition. He wants to eliminate the Departments of Energy, Housing and Urban Development, Commerce, Interior and Education.
And on his website, Paul lays out a four-year plan with budget lines for federal agencies and programs that he wants to eliminate with a high degree of specificity.
By way of contrast, Romney and Santorum list only a few programs they want to axe, despite their big promises.
Romney wants to cut funding for relatively small programs like Amtrak, the National Endowment for the Arts, foreign aid, the Corporation for Public Broadcasting and Title X family planning.
He does detail a few bigger ticket! items, like a reduction in the size of the federal workforce and a modification to Medicaid that would turn it into a block grant program -- but not much else.
Overall, DeHaven said Romney's specific cuts are "tiny" and "the typical small stuff."
The mix of politics and budgeting isn't too surprising, especially given that the candidates are still battling the Republican nomination, a process that requires capturing the attention of the conservative party base.
DeHaven said another factor is contributing to the lack of details: candidates from both parties often shy away from discussing budget cuts for fear of a backlash from interest groups and advocates.
"When you call for specific cuts, every program has a constituency, and that's when they come alive," DeHaven said.
For that reason, GOP candidates are returning to an old standby this cycle: The balanced budget amendment, a proposal that -- barring a GOP landslide in congressional races -- stands little chance of becoming law.
Should one of the Republican candidates defeat President Obama in November, they will run up against another budget plan buzzsaw: Congress.
House Republicans, including an enthusiastic set of freshmen, devoted much of the 2011 legislative session to initiatives that would have reduced spending.
The House passed an ambitious budget that was never enacted, and funding for the federal government almost lapsed on a few occasions while lawmakers squabbled over relatively small budget cuts.
And in perhaps the best exa! mple of how difficult it can be to cut spending, the country was brought to the brink of default after negotiations over the debt ceiling dragged until the last minute.
At the termination of that debate, a large number of spending cuts were left to the super committee to identify. Why? Because lawmakers couldn't agree on specific programs to cut.
And of course, the super committee then failed at the same task, despite overwhelming pressure and an extended deadline.
Rick Santorum wants to cut $5 trillion over 5 years, immediately return non-defense discretionary spending to 2008 levels, pass a balanced budget amendment and cap federal spending at 18% of Gross Domestic Product.
Mitt Romney would cap spending at 20% of GDP, immediately reduce non-security discretionary accounts by 5% and pursue a balanced budget amendment.
Newt Gingrich, Rick Perry and Jon Huntsman have designs of their own.
Problem is, the candidates lack a set of realistic, specific proposals that stand even a small chance of becoming law.
"If you look at most politicians talking about cuts, they are very, very, very short on specifics with a few exceptions," said Tad DeHaven, a budget analyst at the CATO Institute, a libertarian think tank that advocates for smaller government.
On the hunt for specific budget cuts, DeHaven combed through the economic plans listed on each candidate's campaign website.
He came away disappointed -- with one exception.
"From a spending standpoint, there is Ron Paul and then everybody else," DeHaven said. "You have a complete budget from Paul, and not much from anybody else."
Paul's plan doesn't lack ambition. He wants to eliminate the Departments of Energy, Housing and Urban Development, Commerce, Interior and Education.
And on his website, Paul lays out a four-year plan with budget lines for federal agencies and programs that he wants to eliminate with a high degree of specificity.
By way of contrast, Romney and Santorum list only a few programs they want to axe, despite their big promises.
Romney wants to cut funding for relatively small programs like Amtrak, the National Endowment for the Arts, foreign aid, the Corporation for Public Broadcasting and Title X family planning.
He does detail a few bigger ticket! items, like a reduction in the size of the federal workforce and a modification to Medicaid that would turn it into a block grant program -- but not much else.
Overall, DeHaven said Romney's specific cuts are "tiny" and "the typical small stuff."
America's Choice 2012
Santorum doesn't fare much better, focusing on red-meat Republican priorities like funding cuts for the National Labor Relations Board, USAID, Planned Parenthood and the Environmental Protection Agency.The mix of politics and budgeting isn't too surprising, especially given that the candidates are still battling the Republican nomination, a process that requires capturing the attention of the conservative party base.
DeHaven said another factor is contributing to the lack of details: candidates from both parties often shy away from discussing budget cuts for fear of a backlash from interest groups and advocates.
"When you call for specific cuts, every program has a constituency, and that's when they come alive," DeHaven said.
For that reason, GOP candidates are returning to an old standby this cycle: The balanced budget amendment, a proposal that -- barring a GOP landslide in congressional races -- stands little chance of becoming law.
2012 candidates slip on Econ 101
"Most candidates embrace a [balanced budget amendment] because they don't have the desire or ability to formulate a concrete proposal," DeHaven said.Should one of the Republican candidates defeat President Obama in November, they will run up against another budget plan buzzsaw: Congress.
House Republicans, including an enthusiastic set of freshmen, devoted much of the 2011 legislative session to initiatives that would have reduced spending.
The House passed an ambitious budget that was never enacted, and funding for the federal government almost lapsed on a few occasions while lawmakers squabbled over relatively small budget cuts.
And in perhaps the best exa! mple of how difficult it can be to cut spending, the country was brought to the brink of default after negotiations over the debt ceiling dragged until the last minute.
At the termination of that debate, a large number of spending cuts were left to the super committee to identify. Why? Because lawmakers couldn't agree on specific programs to cut.
And of course, the super committee then failed at the same task, despite overwhelming pressure and an extended deadline.
Consumer Business Roundup: Retailers Same Store Sales, Starbucks Expansion
Gap (NYSE:GPS)?reported?November net sales fell off 3% Y/Y, led down by a 7% at its Old Navy chain of stores and a 9% decline of international sales. YTD comparable sales are down 3% Y/Y.
Starbucks (NASDAQ:SBUX) awakens the economy of U.K. by saying it plans to create 5,000 new positions in their job sector over the next five years with the opening of?200 new drive-thru stores, adding to the nine it already has.
Though Target (NYSE:TGT) CEO Gregg Steinhafel says Nov. sales came in on the low end of expectations. He says the firm is keeping its view for December the same. The retailer survived Black Friday without any reported issues after an?online petition?and?misbehaving website caught media attention.
Coach’s (NYSE:COH) trading debut in Hong Kong got off to a rocky start, up 1.8% with little volume vs. a 5.6% jump for the Hang Seng in heavy trading. The company believes however, that its brand recognition will help in the long run. The handbag maker listed in Hong Kong without raising new capital.
Kohl’s (NYSE:KSS) is dropping, and J.C. Penney (NYSE:JCP) is as well, after reporting?weak November same-store sales. While calling its November results a disappointment, Kohl’s says it was excited by its Thanksgiving weekend performance.
Lululemon (NASDAQ:LULU) plunges premarket as it beats earnings. A?revenue miss?combined with weaker-than-expected sales?guidance?of $327-$332M for Q4 suggests the company will have to take a hit on margins to keep growth going.
American Eagle Outfitters (NYSE:AEO) expects to benefit from lower cotton costs beginning in the second half of 2012. Weighing in on the effect of cotton prices CEO James O’Donnell weighs in on his firm in an earnings CC says this: “Cotton prices will continue to affect merchandise profit in the fourth quarter, and it will be well into the spring season before we st! art to s ee a correction.
Krispy Kreme (NYSE:KKD) is selling off post-earnings and suggests?price hikes enacted in response to rising commodity costs may be hurting sales. Investors are paying more attention to its?FQ3 revenue miss?than its solid EPS guidance. BGB Securities?(Hold) is optimistic regarding the uptake for Krispy Kreme’s new coffee products, but thinks they’ll have a limited impact on results.
Walt Disney’s (NYSE:DIS)?50% dividend hike?is a vote of confidence in the company��s future according to Mark Hulbert view, and a ��very bullish development” for the broader economy: “Disney is in the entertainment business. Its profitability would suffer if the economy were about to go into a sustained downturn… to that extent, management��s vote of confidence extends to the economy as a whole.”
Wal-Mart (NYSE:WMT) says TVs are among the top gifts people are putting on layaway. The Westinghouse 46-inch LCD HDTV on sale for 50% at Target (NYSE:TGT) last weekend was a top seller. Big discounts are a huge draw. Prices overall have dropped 7% to an average $597.
Investing Insights: Are Shareholders Benefiting From the Health Conscience Consumer?
Starbucks (NASDAQ:SBUX) awakens the economy of U.K. by saying it plans to create 5,000 new positions in their job sector over the next five years with the opening of?200 new drive-thru stores, adding to the nine it already has.
Though Target (NYSE:TGT) CEO Gregg Steinhafel says Nov. sales came in on the low end of expectations. He says the firm is keeping its view for December the same. The retailer survived Black Friday without any reported issues after an?online petition?and?misbehaving website caught media attention.
Coach’s (NYSE:COH) trading debut in Hong Kong got off to a rocky start, up 1.8% with little volume vs. a 5.6% jump for the Hang Seng in heavy trading. The company believes however, that its brand recognition will help in the long run. The handbag maker listed in Hong Kong without raising new capital.
Kohl’s (NYSE:KSS) is dropping, and J.C. Penney (NYSE:JCP) is as well, after reporting?weak November same-store sales. While calling its November results a disappointment, Kohl’s says it was excited by its Thanksgiving weekend performance.
Lululemon (NASDAQ:LULU) plunges premarket as it beats earnings. A?revenue miss?combined with weaker-than-expected sales?guidance?of $327-$332M for Q4 suggests the company will have to take a hit on margins to keep growth going.
American Eagle Outfitters (NYSE:AEO) expects to benefit from lower cotton costs beginning in the second half of 2012. Weighing in on the effect of cotton prices CEO James O’Donnell weighs in on his firm in an earnings CC says this: “Cotton prices will continue to affect merchandise profit in the fourth quarter, and it will be well into the spring season before we st! art to s ee a correction.
Krispy Kreme (NYSE:KKD) is selling off post-earnings and suggests?price hikes enacted in response to rising commodity costs may be hurting sales. Investors are paying more attention to its?FQ3 revenue miss?than its solid EPS guidance. BGB Securities?(Hold) is optimistic regarding the uptake for Krispy Kreme’s new coffee products, but thinks they’ll have a limited impact on results.
Walt Disney’s (NYSE:DIS)?50% dividend hike?is a vote of confidence in the company��s future according to Mark Hulbert view, and a ��very bullish development” for the broader economy: “Disney is in the entertainment business. Its profitability would suffer if the economy were about to go into a sustained downturn… to that extent, management��s vote of confidence extends to the economy as a whole.”
Wal-Mart (NYSE:WMT) says TVs are among the top gifts people are putting on layaway. The Westinghouse 46-inch LCD HDTV on sale for 50% at Target (NYSE:TGT) last weekend was a top seller. Big discounts are a huge draw. Prices overall have dropped 7% to an average $597.
Investing Insights: Are Shareholders Benefiting From the Health Conscience Consumer?
Thursday, January 26, 2012
Gold Price: Beware! Government Spooks Infest Gold Market
Today’s revelation of China’s surge in gold imports in the month of November from its principal gold dealer, Hong Kong, exposes Western financial media for the umpteenth time for its blatant propaganda (at the behest of central bankers) against one of the only assets that will protect wealth during these most turbulent times.? Sign-up for my 100% FREE Alerts
"Mainland China’s imports from Hong Kong surged to 102,779kg/oz from 86,299kg/oz in October," stated bullion advisory group, GoldCore.? "This is a 20% increase from the already high number seen in October and a 483% y/y increase."
See zerohedge.com for the full article from GoldCore.
Note: see the staggering trend of Beijing gold purchases in the Reuter’s chart, below, halfway through the article.
While a media blitz campaign waged against the gold market kicks into full gear, the Chinese buy tons.
And let’s not forget India, the country that, last year, bought more gold than Switzerland claims it stores with the SNB, which is approximately 1,000 tons.
"Gold traders in India, the world’s biggest buyer of bullion, stepped up buying for the upcoming wedding season, as gold prices stayed near the week’s trough, giving silver a boost," India’s Economic Times stated on Jan. 11.
The two largest bulk buyers of gold are stepping up with increasingly larger orders as the spot price retreats, but the U.S. and UK media tell readers the gold bull market is over��or that gold should be seriously questioned as to its validity for wealth protection during the biggest financial crisis since the 1930s.
Goldmoney’s James Turk, who told King World News on Jan. 9 that he sees the propaganda machine blitz at full throttle throughout the pullback in the gold price from its incredible rise to $1,920.
Whatever happened to the "buy on the dips" mantra from ‘traditional’ media?
"There is a war going on with regard t! o gold a nd people are lined up on both sides," Turk told KWN’s Eric King.? "The central planners want gold to disappear, but gold is not going to disappear because it's been money for 5,000 years.? What the central planners and the manipulators and government agents and everybody else are doing is they are putting out a lot of anti-gold propaganda." [emphasis added]
For those not familiar with James Turk, it was he who broke the story about the UK-based financial magazine The Economist for its peculiar track record for publishing significantly bearish articles at, or near, gold price bottoms.? In two articles, Gold’s Infallible Indicator and Gold’s Infallible Indicator��Six Months Later, Turk demonstrates why gold bugs should watch for that out-of-the-blue gold article from The Economist.
And the Fed’s co-conspirators extend beyond The Economist, the Wall Street Journal, Financial Times (FT) of London, Bloomberg and CNBC serve as propaganda tools (at critical moments) for central bankers as well, according to several reliable sources, one of which is the UK-based Guardian in an article penned by journalist David Miller in Feb. 2006.
"A succession of scandals in the U.S. has revealed widespread government funding of PR agencies to produce ‘fake news’," Miller stated.
"World Television produces the fake news, but its efforts are entirely funded by the Foreign Office, which spent ��340m on propaganda activities in the UK alone in 2001."
And in the U.S., it’s no surprise that the feds fund propaganda budgets of its own, but presumably much larger than those of the UK.? From ComputerWorld, written by Darlene Storm in February 2011.
It’s recently been revealed that the U.S. government contracted HBGary Federal for the development of software which could create multiple fake social media profiles to manipulate and sway public opinion on controve! rsial is sues by promoting propaganda. It could also be used as surveillance to find public opinions with points of view the powers-that-be didn’t like. It could then potentially have their ‘fake’ people run smear campaigns against those ‘real’ people. As disturbing as this is, it’s not really new for U.S. intelligence or private intelligence firms to do the dirty work behind closed doors.?
It can be assumed a lot of UK and U.S. propaganda focus primarily on foreign policy issues.? Wars are tough sell, and a lot of propaganda must be bought in the same way commercial enterprises utilize ‘advertising’ of its products.? Makes?sense.
However, instead of outside foes endangering the sovereignty of nations (again, propaganda has us believe otherwise), the 16 intelligence agencies, which make up the NSA, stated in a 2009 report to Congress, that the economy has become an immediate national security concern.
Reuters, February 2009:
"The financial crisis and global recession are likely to produce a wave of economic crises in emerging market nations over the next year," said the report. A wave of "destructive protectionism" was possible as countries find they cannot export their way out of the slump.
"Time is our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," the report said.
According to The New American in an article in September 2011, titled, Fed Plotting to Monitor Critics, Tailor Propaganda, in response to the 2009 NSA report, the Federal Reserve issued a "Request for Proposal" to "monitor billions of conversations" and to "reach out to key bloggers and influencers [sic]" in an effort to massage opinion.
Apparently, CNBC’s Steven Liesman can’t do all the spin work and propaganda for the Fed, himself.
The Fed's "Request for Proposal" explains that the institution needs a platfo! rm to "m onitor billions of conversations" and "identify and reach out to key bloggers and influencers." Information collected will be used to measure the effectiveness of the central bank's "public relations" and "communication strategies" �� known in laymen's terms as propaganda operations.
"There is need for the Communications Group to be timely and proactively aware of the reactions and opinions expressed by the general public as it relates to the Federal Reserve and its actions on a variety of subjects," the document states. News outlets, Facebook, Twitter, forums, blogs, YouTube, and other social media platforms will all be targeted.
Government, media and central bankers want the public out of gold and work full time to make it happen.? ‘Analysts’, too, are deployed to spew misinformation about the economy and gold.? No surprise there.? Though, no one has publicly proved that any one particular analyst is involved in the anti-gold propaganda campaigns, but three men have been labeled the worst gold analysts since the gold bull market began in 2001.
Those three, or the "Three Stooges", gold analyst Peter Grandich had called them recently, Jon Nadler, Dennis Gartman and Jeff Christian, sport truly horrendous records, similarly to The Economist dismal calls, as James Turk had pointed out.
In December 2010, Richard Russell of the famed Dow Theory Letters attacked on both fronts against the these three Lord Haw-Haws, one, the traditional media and, two, Nadler, in particular��though Gartman and Christian could easily have been interposed instead.
"I listened to Kitco's Nadler on the Bloomberg channel this morning," Russell stated. "He's been bearish on gold for months, and I thought he sounded like a know-nothing fool today. Why didn't Bloomberg interview someone who's been bullish and right about gold?"
"What's with the Wall Street Journal and gold?" Russell asked rhetorically. "In the Dec. 6 pape! r, the f ront page blares, ��ETFs and Gold.' So I turned to the gold article, which included a rare error in its headline, ��Resisting Gold's Glister.' I assumed they meant gold's ��glitter.' The article was written by a Tim Medley, a random guy I had never heard of. Mr. Medley's main half-assed complaint about gold is that it is too expensive today and therefore dangerous in that it may correct. Worse, claims Medley, there is a current ��euphoria' regarding gold. Too many people are bullish on gold. Therefore, gold is about to lose its ��glister.'"
Gold investors, beware of what you read and who you follow for advice.? As a general rule, stick with analysts interviewed on King World News and not from infrequent or other Wall Street analysts on traditional news outlets.? Sign-up for my 100% FREE Alerts
Also read BER articles on this subject,
Gold Market hit by Chinese Bailout PSYOP; $2,000 Gold "in 45 days," says James Turk
Gold Price: Lord Haw-Haw Dennis Gartman announces "Death of a Bull"
Richard Russell Doesn't Trust the Media to Cover the Gold Market
Tags: 2012 Oil Stocks ,Best Stocks 2012 ,Best Stocks To Buy ,Best Stocks To Buy For 2012 ,KOSPI ,Oil Stocks ,Mobius Sees Smooth North Korea Transition; Still Holding S.Korea Stocks
Related Articles:
"Mainland China’s imports from Hong Kong surged to 102,779kg/oz from 86,299kg/oz in October," stated bullion advisory group, GoldCore.? "This is a 20% increase from the already high number seen in October and a 483% y/y increase."
See zerohedge.com for the full article from GoldCore.
Note: see the staggering trend of Beijing gold purchases in the Reuter’s chart, below, halfway through the article.
While a media blitz campaign waged against the gold market kicks into full gear, the Chinese buy tons.
And let’s not forget India, the country that, last year, bought more gold than Switzerland claims it stores with the SNB, which is approximately 1,000 tons.
"Gold traders in India, the world’s biggest buyer of bullion, stepped up buying for the upcoming wedding season, as gold prices stayed near the week’s trough, giving silver a boost," India’s Economic Times stated on Jan. 11.
The two largest bulk buyers of gold are stepping up with increasingly larger orders as the spot price retreats, but the U.S. and UK media tell readers the gold bull market is over��or that gold should be seriously questioned as to its validity for wealth protection during the biggest financial crisis since the 1930s.
Goldmoney’s James Turk, who told King World News on Jan. 9 that he sees the propaganda machine blitz at full throttle throughout the pullback in the gold price from its incredible rise to $1,920.
Whatever happened to the "buy on the dips" mantra from ‘traditional’ media?
"There is a war going on with regard t! o gold a nd people are lined up on both sides," Turk told KWN’s Eric King.? "The central planners want gold to disappear, but gold is not going to disappear because it's been money for 5,000 years.? What the central planners and the manipulators and government agents and everybody else are doing is they are putting out a lot of anti-gold propaganda." [emphasis added]
For those not familiar with James Turk, it was he who broke the story about the UK-based financial magazine The Economist for its peculiar track record for publishing significantly bearish articles at, or near, gold price bottoms.? In two articles, Gold’s Infallible Indicator and Gold’s Infallible Indicator��Six Months Later, Turk demonstrates why gold bugs should watch for that out-of-the-blue gold article from The Economist.
And the Fed’s co-conspirators extend beyond The Economist, the Wall Street Journal, Financial Times (FT) of London, Bloomberg and CNBC serve as propaganda tools (at critical moments) for central bankers as well, according to several reliable sources, one of which is the UK-based Guardian in an article penned by journalist David Miller in Feb. 2006.
"A succession of scandals in the U.S. has revealed widespread government funding of PR agencies to produce ‘fake news’," Miller stated.
"World Television produces the fake news, but its efforts are entirely funded by the Foreign Office, which spent ��340m on propaganda activities in the UK alone in 2001."
And in the U.S., it’s no surprise that the feds fund propaganda budgets of its own, but presumably much larger than those of the UK.? From ComputerWorld, written by Darlene Storm in February 2011.
It’s recently been revealed that the U.S. government contracted HBGary Federal for the development of software which could create multiple fake social media profiles to manipulate and sway public opinion on controve! rsial is sues by promoting propaganda. It could also be used as surveillance to find public opinions with points of view the powers-that-be didn’t like. It could then potentially have their ‘fake’ people run smear campaigns against those ‘real’ people. As disturbing as this is, it’s not really new for U.S. intelligence or private intelligence firms to do the dirty work behind closed doors.?
It can be assumed a lot of UK and U.S. propaganda focus primarily on foreign policy issues.? Wars are tough sell, and a lot of propaganda must be bought in the same way commercial enterprises utilize ‘advertising’ of its products.? Makes?sense.
However, instead of outside foes endangering the sovereignty of nations (again, propaganda has us believe otherwise), the 16 intelligence agencies, which make up the NSA, stated in a 2009 report to Congress, that the economy has become an immediate national security concern.
Reuters, February 2009:
"The financial crisis and global recession are likely to produce a wave of economic crises in emerging market nations over the next year," said the report. A wave of "destructive protectionism" was possible as countries find they cannot export their way out of the slump.
"Time is our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," the report said.
According to The New American in an article in September 2011, titled, Fed Plotting to Monitor Critics, Tailor Propaganda, in response to the 2009 NSA report, the Federal Reserve issued a "Request for Proposal" to "monitor billions of conversations" and to "reach out to key bloggers and influencers [sic]" in an effort to massage opinion.
Apparently, CNBC’s Steven Liesman can’t do all the spin work and propaganda for the Fed, himself.
The Fed's "Request for Proposal" explains that the institution needs a platfo! rm to "m onitor billions of conversations" and "identify and reach out to key bloggers and influencers." Information collected will be used to measure the effectiveness of the central bank's "public relations" and "communication strategies" �� known in laymen's terms as propaganda operations.
"There is need for the Communications Group to be timely and proactively aware of the reactions and opinions expressed by the general public as it relates to the Federal Reserve and its actions on a variety of subjects," the document states. News outlets, Facebook, Twitter, forums, blogs, YouTube, and other social media platforms will all be targeted.
Government, media and central bankers want the public out of gold and work full time to make it happen.? ‘Analysts’, too, are deployed to spew misinformation about the economy and gold.? No surprise there.? Though, no one has publicly proved that any one particular analyst is involved in the anti-gold propaganda campaigns, but three men have been labeled the worst gold analysts since the gold bull market began in 2001.
Those three, or the "Three Stooges", gold analyst Peter Grandich had called them recently, Jon Nadler, Dennis Gartman and Jeff Christian, sport truly horrendous records, similarly to The Economist dismal calls, as James Turk had pointed out.
In December 2010, Richard Russell of the famed Dow Theory Letters attacked on both fronts against the these three Lord Haw-Haws, one, the traditional media and, two, Nadler, in particular��though Gartman and Christian could easily have been interposed instead.
"I listened to Kitco's Nadler on the Bloomberg channel this morning," Russell stated. "He's been bearish on gold for months, and I thought he sounded like a know-nothing fool today. Why didn't Bloomberg interview someone who's been bullish and right about gold?"
"What's with the Wall Street Journal and gold?" Russell asked rhetorically. "In the Dec. 6 pape! r, the f ront page blares, ��ETFs and Gold.' So I turned to the gold article, which included a rare error in its headline, ��Resisting Gold's Glister.' I assumed they meant gold's ��glitter.' The article was written by a Tim Medley, a random guy I had never heard of. Mr. Medley's main half-assed complaint about gold is that it is too expensive today and therefore dangerous in that it may correct. Worse, claims Medley, there is a current ��euphoria' regarding gold. Too many people are bullish on gold. Therefore, gold is about to lose its ��glister.'"
Gold investors, beware of what you read and who you follow for advice.? As a general rule, stick with analysts interviewed on King World News and not from infrequent or other Wall Street analysts on traditional news outlets.? Sign-up for my 100% FREE Alerts
Also read BER articles on this subject,
Gold Market hit by Chinese Bailout PSYOP; $2,000 Gold "in 45 days," says James Turk
Gold Price: Lord Haw-Haw Dennis Gartman announces "Death of a Bull"
Richard Russell Doesn't Trust the Media to Cover the Gold Market
Tags: 2012 Oil Stocks ,Best Stocks 2012 ,Best Stocks To Buy ,Best Stocks To Buy For 2012 ,KOSPI ,Oil Stocks ,Mobius Sees Smooth North Korea Transition; Still Holding S.Korea Stocks
Related Articles:
Loop Theory – Capitalism vs. Socialism
Gold Price: Beware! Government Spooks Infest Gold Market
BofA’s Moszkowski Backs The Citi
Want to build up your wealth? Be your own CEO
Irish Banks, No Efficient Market Theory Applies (IRE, AIB)
The Bank of Ireland (NYSE: IRE) and Allied Irish Banks plc (NYSE: AIB) are back out of favor.? After huge gains off their recent lows, the Irish banks are lower again this morning following the European Central Bank’s efforts on Friday where the central bank was reportedly buying short-term Irish government debt.
Last week was when Ireland received approval from the European Commission for additional capital of 10 billion Euros for the state-owned Anglo Irish Bank, and that is on top of the 14.3 billion that the government has already put into it.
The latest earnings reports at the Irish banks were poor, something which the market should have taken into consideration.? It seems that those stress tests that we all agreed were watered down had no real meat to them after all.
European banks have been weak in general, but for now the pain continues. The Bank of Ireland is indicated down over 4% around $3.90 per ADR while Allied Irish Banks plc is indicated down less than 2% around $2.14.? The 52-week low in AIB is down at $2.06, which means one more day of bad headlines and the bank is trading at fresh 52-week lows all over again.
Some day the markets may learn to adequately price in the headlines.? So much for the efficient market theory.
JON C. OGG
Tags: Best Stocks For 2013 ,Best Stocks To Buy ,Best Stocks To Buy For 2013 ,EBR ,ELNK ,ESV ,HIT ,HITK ,MTU ,NVSL ,PTR ,SXCI ,Top Stocks For 2013 ,Top Stocks To Buy ,Top Stocks To Buy For 2013 ,Top Stocks To Buy In 2013 ,Top Stocks To Buy In 2013
Related Articles:
Last week was when Ireland received approval from the European Commission for additional capital of 10 billion Euros for the state-owned Anglo Irish Bank, and that is on top of the 14.3 billion that the government has already put into it.
The latest earnings reports at the Irish banks were poor, something which the market should have taken into consideration.? It seems that those stress tests that we all agreed were watered down had no real meat to them after all.
European banks have been weak in general, but for now the pain continues. The Bank of Ireland is indicated down over 4% around $3.90 per ADR while Allied Irish Banks plc is indicated down less than 2% around $2.14.? The 52-week low in AIB is down at $2.06, which means one more day of bad headlines and the bank is trading at fresh 52-week lows all over again.
Some day the markets may learn to adequately price in the headlines.? So much for the efficient market theory.
JON C. OGG
Tags: Best Stocks For 2013 ,Best Stocks To Buy ,Best Stocks To Buy For 2013 ,EBR ,ELNK ,ESV ,HIT ,HITK ,MTU ,NVSL ,PTR ,SXCI ,Top Stocks For 2013 ,Top Stocks To Buy ,Top Stocks To Buy For 2013 ,Top Stocks To Buy In 2013 ,Top Stocks To Buy In 2013
Related Articles:
Top 10 Pre-Market Analyst Calls (ABB, AMLN, ARNA, BP, EFII, MET, NVDA, LSI, NETL, XLNX, STO, TOT, WFC)
Irish Banks, No Efficient Market Theory Applies (IRE, AIB)
Standard & Poor’s Downgrades Euro Zone Countries, Germany Stays Solid
Spam, Spam, Spam And Spam: Hormel Ups Outlook
What a Key Indicator Says About the Direction of U.S. Stocks
According to Reuters, retailers offering the sharpest discounts got the lion’s share of this year’s holiday customers. CostCo (COST) and Wal-Mart (WMT) made the list.
The Wall Street Journal writes that a final push by retailers may bring a reasonable end to the holiday sales season.
The Wall Street Journal writes that there is a strong new interest in "blank check" IPOs.
The New York Times writes that Target (TGT) is having an especially rough holiday season.
The FT writes that Cisco (CSCO) has begun the work of wiring entire cities.
The FT writes that heavy use of hte internet on the Apple (AAPL) iPhone has raised hope that carriers can begng to being in billions for non-voice services.
Bloomberg writes that holiday e-commerce spending its trailing forecasts.
CNN Money writes that News Corp (NWS) will sell eight TV stations for $1.1 billion.
The Wall Street Journal writes that a final push by retailers may bring a reasonable end to the holiday sales season.
The Wall Street Journal writes that there is a strong new interest in "blank check" IPOs.
The New York Times writes that Target (TGT) is having an especially rough holiday season.
The FT writes that Cisco (CSCO) has begun the work of wiring entire cities.
The FT writes that heavy use of hte internet on the Apple (AAPL) iPhone has raised hope that carriers can begng to being in billions for non-voice services.
Bloomberg writes that holiday e-commerce spending its trailing forecasts.
CNN Money writes that News Corp (NWS) will sell eight TV stations for $1.1 billion.
Tuesday, January 24, 2012
With Oil, Uranium and Gold, There¡¯s Nothing Crazy About This Canadian Loonie Tune
One company Cramer talked about last week is RPM International (RPM), and he interviewed the CEO. The name RPM is one he likes that has 100 brands, and Rustoleum is 15% of the business. The CEO said that when they make acquisitions of brands they keep the name and they keep the management teams in place that built them up. Cramer said RPM doesn’t leave investors out in the wind and they don’t miss earnings when others in their field do. RPM closed flat on the day and traded up 1.75% to $23.15 in after-hours. The 52-week range for RPM is $17.40 to $22.94.
Sunday, January 22, 2012
NYSE-Deutsche Boerse Appeal Direct to Barroso in Deal Fight
NYSE Euronext (NYSE) and Deutsche Boerse AG (DB1)appealed directly to European Commission President Jose Barrosoas they fought to salvage their merger, arguing that blocking itwould ��represent a serious missed opportunity at a criticaljuncture for Europe.��
The exchanges told Barroso that failure to approve thetakeover would place European exchanges at a competitivedisadvantage, according to a copy of a letter sent seen byBloomberg News. The decision would hurt the creation oftransparent European markets and drive business to more lightlyregulated regions, they said in the letter.
Should the combination be prohibited, ��the globalconsolidation of exchanges might very well shift the balancetowards countries favoring light-touch regulation, which wouldseverely endanger the European Commission��s agenda,�� theexchanges said. ��Approving the proposed combination of DeutscheBoerse and NYSE Euronext (NYX) would significantly increase thelikelihood that the European Union��s regulatory philosophy wouldbecome the global standard.��
Chief Executive Officers Duncan Niederauer and Reto Francioni are fighting antitrust concerns, appealing directly topoliticians and other European regulators as they seek tosalvage their plan to create the world��s largest exchangecompany. Two people familiar with the talks told Bloomberg lastmonth that concessions offered by the exchanges didn��t go farenough and negotiators for the European Commission planned toprohibit the deal.
NYSE and Deutsche Boerse still have room to maneuver.Before deciding whether to approve or block a deal, the EuropeanCommission must consult! competi tion agencies from the EuropeanUnion��s 27 member nations, who are scheduled to meet Jan. 17,according to a person familiar with the situation.
The European Commission will decide on the deal on Feb. 1,EU Competition Commissioner Joaquin Almunia, the EU��s antitrustchief, told France24 radio in an interview today.
��We��re going to decide on Feb. 1 here at the commission,��he said. ��We don��t think of the interests of the exchanges��shareholders, we think above all of the interest of citizens, wethink of the companies who need capital, of the countries, ofthe national economies of Europe who need capital markets whichwork well.��
The German government today indicated it wouldn��tintervene.
��The power to make a decision in this case liesexclusively with the European Union,�� Ann-Christin Wiegemann, aspokeswoman for the Economy Ministry, told reporters in Berlintoday, adding she has no information on whether the Germangovernment is in touch with the European Commission on the case.
The exchanges told Barroso that failure to approve thetakeover would place European exchanges at a competitivedisadvantage, according to a copy of a letter sent seen byBloomberg News. The decision would hurt the creation oftransparent European markets and drive business to more lightlyregulated regions, they said in the letter.
Should the combination be prohibited, ��the globalconsolidation of exchanges might very well shift the balancetowards countries favoring light-touch regulation, which wouldseverely endanger the European Commission��s agenda,�� theexchanges said. ��Approving the proposed combination of DeutscheBoerse and NYSE Euronext (NYX) would significantly increase thelikelihood that the European Union��s regulatory philosophy wouldbecome the global standard.��
Chief Executive Officers Duncan Niederauer and Reto Francioni are fighting antitrust concerns, appealing directly topoliticians and other European regulators as they seek tosalvage their plan to create the world��s largest exchangecompany. Two people familiar with the talks told Bloomberg lastmonth that concessions offered by the exchanges didn��t go farenough and negotiators for the European Commission planned toprohibit the deal.
��Bridgehead of Integrity��
The exchanges ��have shown themselves to be a bridgehead ofintegrity and transparency against a tidal wave of opacity andgreed that permeates the less-regulated segments of financialmarkets,�� the letter said. The combination will ��offer aunique opportunity to deepen regulatory cooperation and reducethe risk of regulatory arbitrage,�� it said.NYSE and Deutsche Boerse still have room to maneuver.Before deciding whether to approve or block a deal, the EuropeanCommission must consult! competi tion agencies from the EuropeanUnion��s 27 member nations, who are scheduled to meet Jan. 17,according to a person familiar with the situation.
Commissioner Vote
Commissioners from each EU country must also vote on adecision and executives can appeal a merger ban at the EUcourts. Companies including Oracle Corp. have managed tocomplete deals to which the European Commission had initialobjections.The European Commission will decide on the deal on Feb. 1,EU Competition Commissioner Joaquin Almunia, the EU��s antitrustchief, told France24 radio in an interview today.
��We��re going to decide on Feb. 1 here at the commission,��he said. ��We don��t think of the interests of the exchanges��shareholders, we think above all of the interest of citizens, wethink of the companies who need capital, of the countries, ofthe national economies of Europe who need capital markets whichwork well.��
The German government today indicated it wouldn��tintervene.
��The power to make a decision in this case liesexclusively with the European Union,�� Ann-Christin Wiegemann, aspokeswoman for the Economy Ministry, told reporters in Berlintoday, adding she has no information on whether the Germangovernment is in touch with the European Commission on the case.
Saturday, January 21, 2012
Netflix: A Year in Review
Sometimes you have bad years, and then you have a colossal implosion on the level that Netflix's (Nasdaq: NFLX ) CEO Reed Hastings is now experiencing.
Even some of the video buffet operator's biggest critics had a hard time saying something bad about Hastings earlier this year. The bearish argument on Netflix revolved largely on valuation. Long-term concerns about the model's viability and the way that the company accounts for its content licensing liabilities were other naysayer knocks. But knocking Hastings? Never!
Well, with Hastings' name bubbling up near the top of most "Worst CEO of 2011" lists, it's time to break down the year that once began so promisingly for Netflix.
Things started out well for Netflix. The stock had nearly doubled in 2009, going on to more than triple in 2010. Netflix had proven its recession-resistant mettle by drawing a horde of new subscribers, kicking off 2011 by topping 20 million members.
The warning signs that investors missed
Even though Netflix's stock would go on to nearly double again by the summer of 2011, there were already signs that things were starting to come undone.
Amazon.com (Nasdaq: AMZN ) began offering customers who were paying $79 a year for Amazon Prime memberships -- a program that features free two-day shipping on Amazon-warehoused goods -- unlimited access to a small yet growing digital catalog of streaming titles in February. In a sense, Netflix had its first true big-name competitor.
A month later, AT&T (NYSE: T ) became the latest broadband provider to cap data usage on its DSL home service. As the country's biggest primetime data hog, Netflix is responsible for a growing chunk of the bandwidth that broadband customers go through in any given month. If more providers follow suit, Netflix's value proposition won't! truly b e unlimited.
March was also when CBS's (NYSE: CBS ) Showtime decided to pull early seasons of Dexter and Californication from Netflix's digital catalog. Instead of hoping to hook subscribers to the premium movie channel by giving them a taste of its content -- and cashing in on juicy streaming revenue along the way -- Showtime apparently felt that it was more important to protect the priced prestige of its shows. It may not have seemed like a big deal at the time, but it should have alerted investors that licensing deals go in both directions long before Liberty Media's (Nasdaq: LMCA ) Starz decided that it would not be renewing its meaty content deal that provides Netflix streaming with many of its first-run celluloids.
Look out below
In retrospect, the market misinterpreted Netflix's biggest blunder. The day after Netflix alienated its customer base by announcing that it would raise prices on some of its plans by as much as 60% -- essentially turning the streaming service that was available at no additional cost to customers on unlimited disc plans into a premium offering -- the stock went on to hit its all-time high of $304.79.
Yes, Hastings' biggest blunder is one that was initially applauded by many analysts and investors. Go figure.
International expansion plans became aggressive. Canada's launch in late 2010 inspired Netflix to establish a streaming-only service in 43 different countries through Latin America and the Caribbean this September. By the time that Netflix announced plans to enter Ireland and the U.K. in early 2012 -- and that the move would lead to an initial overall deficit -- investors began to realize that there was a price to pay for Netflix's globe-trotting ways.
Also lost in the excitement -- when Canada hit a million subs in its first year up north -- was the fact that net additions were decelerati! ng after its first complete quarter in Canada.
Subscribers were miffed. Expansion wasn't cheap. Starz was starting to pack up its copies of Toy Story 3 and Sling Blade for an early 2012 exit.
However, Hastings' biggest truly boneheaded move was yet to come.
Qwikster quandary
How could Netflix distance itself further from its already alienated user base? By telling its biggest customers -- the ones on dual plans who were the only ones hit with the summertime rate increase -- to take a hike.
The proposed plan to split Netflix into two distinct sites, forcing DVD and Blu-ray renters to manage independent queues at both Netflix.com and Qwikster, was a disaster. It was a call that Hastings thankfully reversed a few weeks later, but not before it was broadly lampooned.
Netflix's already tarnished reputation met a wrecking ball.
Could things get any worse? You know the answer. Customer defections proved to be worse than Netflix had originally feared in its latest quarter, and now Netflix sees red ink for all of 2012.
The moat that began the year as impenetrable finds a Netflix that is truly vulnerable. Coinstar's (Nasdaq: CSTR ) Redbox and DISH Network's (Nasdaq: DISH ) Blockbuster are hoping to swipe Netflix's DVD rental business, while Amazon and others waiting in the wings have their sights set on gobbling up market share in streaming.
If 2011 was a dream, then it surely was a bad one. The stock that seemed as if it would pull off another market-thumping performance this year has shed 60% of its value, and we still don't know when the situation will stabilize.
Good luck in 2012, Hastings. You're going to need it.
Even some of the video buffet operator's biggest critics had a hard time saying something bad about Hastings earlier this year. The bearish argument on Netflix revolved largely on valuation. Long-term concerns about the model's viability and the way that the company accounts for its content licensing liabilities were other naysayer knocks. But knocking Hastings? Never!
Well, with Hastings' name bubbling up near the top of most "Worst CEO of 2011" lists, it's time to break down the year that once began so promisingly for Netflix.
Things started out well for Netflix. The stock had nearly doubled in 2009, going on to more than triple in 2010. Netflix had proven its recession-resistant mettle by drawing a horde of new subscribers, kicking off 2011 by topping 20 million members.
The warning signs that investors missed
Even though Netflix's stock would go on to nearly double again by the summer of 2011, there were already signs that things were starting to come undone.
Amazon.com (Nasdaq: AMZN ) began offering customers who were paying $79 a year for Amazon Prime memberships -- a program that features free two-day shipping on Amazon-warehoused goods -- unlimited access to a small yet growing digital catalog of streaming titles in February. In a sense, Netflix had its first true big-name competitor.
A month later, AT&T (NYSE: T ) became the latest broadband provider to cap data usage on its DSL home service. As the country's biggest primetime data hog, Netflix is responsible for a growing chunk of the bandwidth that broadband customers go through in any given month. If more providers follow suit, Netflix's value proposition won't! truly b e unlimited.
March was also when CBS's (NYSE: CBS ) Showtime decided to pull early seasons of Dexter and Californication from Netflix's digital catalog. Instead of hoping to hook subscribers to the premium movie channel by giving them a taste of its content -- and cashing in on juicy streaming revenue along the way -- Showtime apparently felt that it was more important to protect the priced prestige of its shows. It may not have seemed like a big deal at the time, but it should have alerted investors that licensing deals go in both directions long before Liberty Media's (Nasdaq: LMCA ) Starz decided that it would not be renewing its meaty content deal that provides Netflix streaming with many of its first-run celluloids.
Look out below
In retrospect, the market misinterpreted Netflix's biggest blunder. The day after Netflix alienated its customer base by announcing that it would raise prices on some of its plans by as much as 60% -- essentially turning the streaming service that was available at no additional cost to customers on unlimited disc plans into a premium offering -- the stock went on to hit its all-time high of $304.79.
Yes, Hastings' biggest blunder is one that was initially applauded by many analysts and investors. Go figure.
International expansion plans became aggressive. Canada's launch in late 2010 inspired Netflix to establish a streaming-only service in 43 different countries through Latin America and the Caribbean this September. By the time that Netflix announced plans to enter Ireland and the U.K. in early 2012 -- and that the move would lead to an initial overall deficit -- investors began to realize that there was a price to pay for Netflix's globe-trotting ways.
Also lost in the excitement -- when Canada hit a million subs in its first year up north -- was the fact that net additions were decelerati! ng after its first complete quarter in Canada.
Subscribers were miffed. Expansion wasn't cheap. Starz was starting to pack up its copies of Toy Story 3 and Sling Blade for an early 2012 exit.
However, Hastings' biggest truly boneheaded move was yet to come.
Qwikster quandary
How could Netflix distance itself further from its already alienated user base? By telling its biggest customers -- the ones on dual plans who were the only ones hit with the summertime rate increase -- to take a hike.
The proposed plan to split Netflix into two distinct sites, forcing DVD and Blu-ray renters to manage independent queues at both Netflix.com and Qwikster, was a disaster. It was a call that Hastings thankfully reversed a few weeks later, but not before it was broadly lampooned.
Netflix's already tarnished reputation met a wrecking ball.
Could things get any worse? You know the answer. Customer defections proved to be worse than Netflix had originally feared in its latest quarter, and now Netflix sees red ink for all of 2012.
The moat that began the year as impenetrable finds a Netflix that is truly vulnerable. Coinstar's (Nasdaq: CSTR ) Redbox and DISH Network's (Nasdaq: DISH ) Blockbuster are hoping to swipe Netflix's DVD rental business, while Amazon and others waiting in the wings have their sights set on gobbling up market share in streaming.
If 2011 was a dream, then it surely was a bad one. The stock that seemed as if it would pull off another market-thumping performance this year has shed 60% of its value, and we still don't know when the situation will stabilize.
Good luck in 2012, Hastings. You're going to need it.
Friday, January 20, 2012
Fed Says Economy Expanding, Housing Market Still Dead
The U.S. economic recovery marches on, the latest Fed Beige Book shows.? Covering the month of December, all twelve Fed districts noted some level of expansion in activity, as the economy rode the holiday wave and increased consumption trends vis-��-vis 2010.? Still, commercial and residential real estate remains weak, prompting a response by three Fed governors noting they were failing at pumping life into the beleaguered sector.
Stronger consumer spending was the biggest positive data point to come out of Wednesday��s report, ��reflecting significant gains in holiday retail sales compared with last year��s season.��? The Beige Book confirms other reports showing the U.S. economy is indeed expanding, namely the latest jobs report which registered a 200,000 increase in jobs in December.
Despite heavy criticism, Fed Chairman Ben Bernanke can once again point to concrete evidence that his attempts to support the economy have, to some extent, worked.? Inflation, one of the most important data points, continued to ease as ��prior increases in the costs of selected inputs have eased.��
While inflation proved to be transitory, the reading is ambiguous as it suggests disinflation which, in extreme cases, can become deflation.? Bernanke has managed to conduct market expectations at his will, engaging in Operation Twist and managing to keep his silver bullet, quantitative easing, still in the barrel.
But it��s not time to cork champagne bottles just yet.? Wednesday��s Beige Book clearly highlighted continued fragility in real estate markets, considered necessary for any sort of self-sustaining recovery.? ��Activity stayed sluggish in residential real estate markets, and conditions in commercial real estate markets remained somewhat soft overall,�� read the report, which saw slight improvements in commercial markets in some districts.
Housing remains in the gutter, as the latest Case-Shiller Home Price Indices suggest.? Prices have ba! rely mov ed off their crisis lows despite unprecedented support from the Federal Reserve.? On Wednesday, three separate Federal Reserve Governors noted their efforts hadn��t done enough to reactivate the economy.
Before the open, Richmond Fed��s Jeffrey Lacker, considered the sole hawk remaining on the FOMC, warned QE hadn��t done much to help the unemployment situation.? Lacker also expressed his reservations regarding the Fed��s policy proposals for the housing market, according to Trade the News.
Atlanta Fed President Dennis Lockhart echoed his colleague, noting the continued decline in housing prices indicated a bottom hadn��t been reached yet.? Finally, Chicago Fed president Charles Evans, the dovish dissenter spoke about how to revive housing markets, adding the Fed could offer as much as $600 billion in another round of asset purchases, or QE.
Markets were mixed on Wednesday with a few clear outliers.? Bank of America, one of 2011��s worst performers, traded up 3.5% to $6.87 in New York, while Citigroup gained 4.2% to $31.25.? Ford was another strong performer, up 2.3% to $12.07.? On the flipside were stocks like Netflix, down 3.8% to $92.15, and Chesapeake Energy, which slid 3% to $22.59.
Stronger consumer spending was the biggest positive data point to come out of Wednesday��s report, ��reflecting significant gains in holiday retail sales compared with last year��s season.��? The Beige Book confirms other reports showing the U.S. economy is indeed expanding, namely the latest jobs report which registered a 200,000 increase in jobs in December.
Despite heavy criticism, Fed Chairman Ben Bernanke can once again point to concrete evidence that his attempts to support the economy have, to some extent, worked.? Inflation, one of the most important data points, continued to ease as ��prior increases in the costs of selected inputs have eased.��
While inflation proved to be transitory, the reading is ambiguous as it suggests disinflation which, in extreme cases, can become deflation.? Bernanke has managed to conduct market expectations at his will, engaging in Operation Twist and managing to keep his silver bullet, quantitative easing, still in the barrel.
But it��s not time to cork champagne bottles just yet.? Wednesday��s Beige Book clearly highlighted continued fragility in real estate markets, considered necessary for any sort of self-sustaining recovery.? ��Activity stayed sluggish in residential real estate markets, and conditions in commercial real estate markets remained somewhat soft overall,�� read the report, which saw slight improvements in commercial markets in some districts.
Housing remains in the gutter, as the latest Case-Shiller Home Price Indices suggest.? Prices have ba! rely mov ed off their crisis lows despite unprecedented support from the Federal Reserve.? On Wednesday, three separate Federal Reserve Governors noted their efforts hadn��t done enough to reactivate the economy.
Before the open, Richmond Fed��s Jeffrey Lacker, considered the sole hawk remaining on the FOMC, warned QE hadn��t done much to help the unemployment situation.? Lacker also expressed his reservations regarding the Fed��s policy proposals for the housing market, according to Trade the News.
Atlanta Fed President Dennis Lockhart echoed his colleague, noting the continued decline in housing prices indicated a bottom hadn��t been reached yet.? Finally, Chicago Fed president Charles Evans, the dovish dissenter spoke about how to revive housing markets, adding the Fed could offer as much as $600 billion in another round of asset purchases, or QE.
Markets were mixed on Wednesday with a few clear outliers.? Bank of America, one of 2011��s worst performers, traded up 3.5% to $6.87 in New York, while Citigroup gained 4.2% to $31.25.? Ford was another strong performer, up 2.3% to $12.07.? On the flipside were stocks like Netflix, down 3.8% to $92.15, and Chesapeake Energy, which slid 3% to $22.59.
Thursday, January 19, 2012
After A Stellar Q3, Chevron Warns Of Weak Q4 On Falling Margins
Chevron released aninterim update on its quarterly performance after the bell on Wednesday where it noted Q4 earnings were expected to come in substantially below its stellar third quarter earnings. ?The large oil and gas company posts earnings on January 27.
Its main problems stemmed from the company��s downstream operations, where lower margins and refinery input volumes hurt the bottom line. ?Refining margins averaged $14.45 through December, while marketing margins stood at $5.39.
Refinery volumes were weak as well, with U.S. refinery input reaching 717 million barrels per day (mbd). ?Internationally, refinery output hit 792 mbd.
Upstream business was relatively solid, with U.S. net oil-equivalent production during the first two months of the quarter coming in close to its Q3 numbers: the company produced 660 million barrels of oil equivalent (mboed) through November. ?International production during the same period actually exceeded its third quarter numbers, hitting 1,979 mboed.
Chevron, like rivals Exxon Mobil, had a really strong third quarter on rising energy prices.? The two large oil giants fared better than oil service companies like Halliburton and Schlumberger during the third quarter.? Chevron, though, has already warned investors its performance won��t blow anyone out of the water.
Shares in the company had fallen 1.2% during Wednesday��s trading session to $107.77.? In after hours trade, Chevron fell a further 2% to $105.67 by 5:12 PM.
Its main problems stemmed from the company��s downstream operations, where lower margins and refinery input volumes hurt the bottom line. ?Refining margins averaged $14.45 through December, while marketing margins stood at $5.39.
Refinery volumes were weak as well, with U.S. refinery input reaching 717 million barrels per day (mbd). ?Internationally, refinery output hit 792 mbd.
Upstream business was relatively solid, with U.S. net oil-equivalent production during the first two months of the quarter coming in close to its Q3 numbers: the company produced 660 million barrels of oil equivalent (mboed) through November. ?International production during the same period actually exceeded its third quarter numbers, hitting 1,979 mboed.
Chevron, like rivals Exxon Mobil, had a really strong third quarter on rising energy prices.? The two large oil giants fared better than oil service companies like Halliburton and Schlumberger during the third quarter.? Chevron, though, has already warned investors its performance won��t blow anyone out of the water.
Shares in the company had fallen 1.2% during Wednesday��s trading session to $107.77.? In after hours trade, Chevron fell a further 2% to $105.67 by 5:12 PM.
Wednesday, January 18, 2012
Fed: Recession "Very Likely Over," but Threats Remain
The Securities & Exchange Commission will no longer let companies caught in illegal activity have their cake and eat it, too. The commission��s is ceasing its much-criticized practice of allowing companies that have admitted to wrongdoing in criminal cases of securities fraud to cop a plea saying they ��neither admit nor deny�� those admitted wrongdoings in a separate SEC fraud case. The new approach applies as well to individuals who find themselves in that situation.
Said SEC Enforcement Director Robert Khuzami in a statement on Friday: ��The new policy does not require admissions or adjudications of fact beyond those already made in criminal cases, but eliminates language that may be construed as inconsistent with admissions or findings that have already been made in the criminal cases.��
As The New York Times pointed out, ��The commission has been sharply criticized, in federal court and on Capitol Hill, for allowing companies to repeatedly settle fraud cases without admitting or denying the charges. Until last week, that policy had been applied even when a company acknowledged the same conduct to another government agency, often the Justice Department..��
Lawyers interviewed by both NYT and The Wall Street Journal seem split on how significant the change is or whether it would have any bearing on SEC enforcement actions. But at least from the perspective of everyday common sense, it sure sounds like a step in the right direction.
Said SEC Enforcement Director Robert Khuzami in a statement on Friday: ��The new policy does not require admissions or adjudications of fact beyond those already made in criminal cases, but eliminates language that may be construed as inconsistent with admissions or findings that have already been made in the criminal cases.��
As The New York Times pointed out, ��The commission has been sharply criticized, in federal court and on Capitol Hill, for allowing companies to repeatedly settle fraud cases without admitting or denying the charges. Until last week, that policy had been applied even when a company acknowledged the same conduct to another government agency, often the Justice Department..��
Lawyers interviewed by both NYT and The Wall Street Journal seem split on how significant the change is or whether it would have any bearing on SEC enforcement actions. But at least from the perspective of everyday common sense, it sure sounds like a step in the right direction.
Tuesday, January 17, 2012
Apple, semis decline as sector retreats
The tech sector slipped into the red Friday, as shares of Apple Inc. dipped on reports that it has stopped selling the iPhone 4S in Beijing temporarily as the company was met with unruly customers.
Click to Play
iPhone 4S sales halted in Beijing
A brawl broke out outside the flagship Apple Store in Beijing, as hundreds lined up to buy the company's latest smartphone.Semiconductor stocks also highlighted the retreat, as major chip shares posted losses ahead of a three-day weekend for financial markets.
Apple AAPL ?dipped 0.4% to close at $419.81, as the sector kept pace with a retreat in the broader market. Wall Street reacted to, among other bearish developments, J.P. Morgan Chase & Co. JPM ?lower fourth-quarter profit. The Dow Jones Industrial Average DJIA ?shed 49 points.
The Nasdaq Composite Index COMP ?moved down 0.5% to close at 2,711. However, the benchmark wrapped up the week with a 1.4% gain.
The Morgan Stanley High Tech 35 Index MSH ?was also lower, down 1%, while the Philadelphia Semiconductor Index SOX ?fell 2%.
The chip segment��s decl! ine feat ured slumping shares of Intel Corp.INTC , Advanced Micro Devices Inc. AMD ?and Nvidia Corp. NVDA ?
/quotes/zigman/123472 NDX 2,371.98, -10.01, -0.42%
/quotes/zigman/1468249 SOX 383.47, -8.28, -2.11%
/quotes/zigman/6015481 MSH 610.22, -6.18, -1.00%
/quotes/zigman/1468249 SOX 383.47, -8.28, -2.11%
/quotes/zigman/6015481 MSH 610.22, -6.18, -1.00%
The semiconductor group��s still outpacing the broader tech sector on optimism that the industry will see stronger demand in the next few quarters.
But Caris & Co. analyst Craig Ellis counseled caution, saying in a Friday note: ��Cyclically, numerous companies thought [the firs! t quarte r of 2012] would mark an order bottom, though tellingly no company had seen an order rebound yet, so the coast is not yet clear.��
Hardware makers such as Hewlett-Packard Co. HPQ ?and Dell Inc. DELL ?traded in the red as well.
However, software giants Oracle Corp ORCL ?and Microsoft Corp. MSFT ?rebounded to post fractional gains.
Also on the upside, shares of Netflix Inc NFLX ?added 2.4% to $94.38. U.S.-listed shares of SAP AG SAP ?moved up 2.5% to close at $54.56 after the company reported better-than-expected results for the fourth quarter and 2011.
Monday, January 16, 2012
Unfortunately, it means things are about to get very, very ugly
Election Day 2011 is in the books. You may think it lacked fireworks, considering how big the prize will be in 2012, but here are some choice political headlines from yesterday��s votes across the U.S.:
But the most important thing about Tuesday��s vote is, of course, what it means for the White House race in 2012.
And unfortunately, it means things are about to get very, very ugly.
Look Out Incumbents!
The Ohio vote is interesting not just because it’s the latest in a long line of collective bargaining measures, but because it’s the result of a popular vote to repeal legislation enacted by incumbents.
The whopping 62% to 38% margin reported late Tuesday night shows just how out of touch legislators are with their constituents. Of course, you can cite low turnout or tout the legislature��s obligation to do what��s right even if it��s unpopular, but you can��t deny the loud voice of protest heard in this vote.
The anti-incumbent backlash and quick change of sentiment seems to be a theme nationwide. Take the first-ever recall vote in the conservative border state of Arizona to replace a controversial anti-immigration legislator after 10 years as an incumbent. Even more interesting is that a GOP g! overnor initiated the recall against the sitting lawmaker.
Also of note is a very competitive race in the swing-state of Virginia to oust incumbent Democrats. Considering President Obama was the first Democratic presidential candidate in 44 years to win Virginia, this is certainly noteworthy.
And it goes without saying that since Obama is also an incumbent, he has a tough hill to climb a year from now.
It Will Only Get More Polarizing
The fierce debate over labor laws in Ohio — and in Wisconsin and elsewhere previously — pales compared to the divisiveness in Mississippi, where the hottest of hot-button issues was rolled out at the ballot box.
It��s hard to have a ��moderate�� conversation even among friends about abortion. Just imagine what the scene was for voters in Mississippi as pro-life and pro-choice forces turned the state into a battleground over their agendas.
For those of you who are sick of the polarizing political atmosphere, expect issues like this to pop up again in a year. And worse, with the Supreme Court having eased restrictions on corporate election spending and the prospect of a big voter turnout, you’ll be suffering the tug-of-war of hyperbolic campaign ads very, very soon.
Jobs Remain Elusive
Perhaps most disconcerting is that all of the candidates appearing on the ballot yesterday touted how important it is to jump-start the economy and put Americans back to work. But the sad reality is that legislation at the local, state and federal level remains either a misguided or ineffective way to stimulate growth.
Consider that, according to a Challenger, Gray & Christmas report, government layoffs were the primary source of job losses in the economy for the first six months of this year! How are our lawmakers part of the solution with a statistic like that?
Admittedly, it’s a tall order to dig out of this deep hole — and some free-market purists would argue that it��s no! t even t he government��s job to consider digging us out.
However, politicians across the nation ran on the notion of job creation. Voter polls continue to show that the economy is the top concern. Everyone is talking a great deal about government��s role in spurring economic growth.
But talk is cheap. Thus far, lawmakers on every level continue to fail their constituents and fail on their promises of meaningful changes that can draw down unemployment. Those failures led to the ousting of many incumbents, but voters may be disappointed if they expect the new names will mean better results.
- Ohio voters repealed a controversial labor law limiting union rights.
- Early results show a political newcomer ousted an entrenched and polarizing Republican in the Arizona state Senate, and Democrats in the swing state of Virginia saw their majority in the Commonwealth��s upper house erode.
- Voters in Mississippi rejected a controversial ballot measure that would have defined human life as beginning at fertilization.
But the most important thing about Tuesday��s vote is, of course, what it means for the White House race in 2012.
And unfortunately, it means things are about to get very, very ugly.
Look Out Incumbents!
The Ohio vote is interesting not just because it’s the latest in a long line of collective bargaining measures, but because it’s the result of a popular vote to repeal legislation enacted by incumbents.
The whopping 62% to 38% margin reported late Tuesday night shows just how out of touch legislators are with their constituents. Of course, you can cite low turnout or tout the legislature��s obligation to do what��s right even if it��s unpopular, but you can��t deny the loud voice of protest heard in this vote.
The anti-incumbent backlash and quick change of sentiment seems to be a theme nationwide. Take the first-ever recall vote in the conservative border state of Arizona to replace a controversial anti-immigration legislator after 10 years as an incumbent. Even more interesting is that a GOP g! overnor initiated the recall against the sitting lawmaker.
Also of note is a very competitive race in the swing-state of Virginia to oust incumbent Democrats. Considering President Obama was the first Democratic presidential candidate in 44 years to win Virginia, this is certainly noteworthy.
And it goes without saying that since Obama is also an incumbent, he has a tough hill to climb a year from now.
It Will Only Get More Polarizing
The fierce debate over labor laws in Ohio — and in Wisconsin and elsewhere previously — pales compared to the divisiveness in Mississippi, where the hottest of hot-button issues was rolled out at the ballot box.
It��s hard to have a ��moderate�� conversation even among friends about abortion. Just imagine what the scene was for voters in Mississippi as pro-life and pro-choice forces turned the state into a battleground over their agendas.
For those of you who are sick of the polarizing political atmosphere, expect issues like this to pop up again in a year. And worse, with the Supreme Court having eased restrictions on corporate election spending and the prospect of a big voter turnout, you’ll be suffering the tug-of-war of hyperbolic campaign ads very, very soon.
Jobs Remain Elusive
Perhaps most disconcerting is that all of the candidates appearing on the ballot yesterday touted how important it is to jump-start the economy and put Americans back to work. But the sad reality is that legislation at the local, state and federal level remains either a misguided or ineffective way to stimulate growth.
Consider that, according to a Challenger, Gray & Christmas report, government layoffs were the primary source of job losses in the economy for the first six months of this year! How are our lawmakers part of the solution with a statistic like that?
Admittedly, it’s a tall order to dig out of this deep hole — and some free-market purists would argue that it��s no! t even t he government��s job to consider digging us out.
However, politicians across the nation ran on the notion of job creation. Voter polls continue to show that the economy is the top concern. Everyone is talking a great deal about government��s role in spurring economic growth.
But talk is cheap. Thus far, lawmakers on every level continue to fail their constituents and fail on their promises of meaningful changes that can draw down unemployment. Those failures led to the ousting of many incumbents, but voters may be disappointed if they expect the new names will mean better results.
How To Open A Restaurant – Avoid These Common and Simple Mistakes Made by Most New Restaurant Owners
Do you know why most restaurants fail? The reason is that they believe if the food is good, success will just be a step away. This is a wrong concept and most people are misguided by thinking this way. You do have a good vision to succeed but do you have a clue about how to open a restaurant? No? You do need to have a correct understanding about the real business that gets into opening a restaurant. Now, you are a little excited about starting your own restaurant, but in all this excitement, do not forget to make a reality check on your complete project. This lack of understanding will make you a complete failure in your attempt; if you want to succeed then read on to avoid the common mistakes.
A particular saying in the business world is that you must have 3 important things for your business they are location, location and location. It is true that a good location is a great investment for any business, but that alone is not a guarantee of your success. Location is a big factor but it is not the only factor that you should consider while opening a restaurant. Do you know that there are a lot of restaurant in “not so great places” that are a huge success. The poor business practice can also lead to the downfall of a restaurant and I am sure you would want to avoid it.
Another common mistake that most people do when thinking about how to open a restaurant is that they fail to draw a fair cost for each recipe placed on menu. These people set the prices of the items on the gut feeling and what they believe that the customers would shell out. The problem here is that they do not draw a fair cost of every recipe and then chalk out the basic charges on the items. These kinds of restaurateurs do not know the actual cost of the items on their menu.
You have to first look at the budget of the restaurant; you will be amazed to see the amount spend on the food. If you want to be successful about how to open a restaurant then you will have to price your food items on the menu correc! tly. Thi s is what you will have to control and if you are unable to control this aspect of your business then your business is traveling down the wrong path. The pricing should be moderate and must also help you earn profits. The key here is to avoid setting high prices.
The last problem is customer service. Yes, this is also the biggest problem of the restaurant industry today. There will always be people who complain about a certain recipe, while others might tell you that this is the prize winning recipe of your restaurant. You must know that you will not be able to make everybody happy. Always remember that your customers are the breath of life of your restaurant. They are the reason why in the first place you are thinking about how to open a restaurant.
There are other factors that you need to be aware of. The best way to ensure you get to tackle major concerns is to get advice from an expert for starting your own restaurant. If you are keen to learn more about how to open a restaurant, please
A particular saying in the business world is that you must have 3 important things for your business they are location, location and location. It is true that a good location is a great investment for any business, but that alone is not a guarantee of your success. Location is a big factor but it is not the only factor that you should consider while opening a restaurant. Do you know that there are a lot of restaurant in “not so great places” that are a huge success. The poor business practice can also lead to the downfall of a restaurant and I am sure you would want to avoid it.
Another common mistake that most people do when thinking about how to open a restaurant is that they fail to draw a fair cost for each recipe placed on menu. These people set the prices of the items on the gut feeling and what they believe that the customers would shell out. The problem here is that they do not draw a fair cost of every recipe and then chalk out the basic charges on the items. These kinds of restaurateurs do not know the actual cost of the items on their menu.
You have to first look at the budget of the restaurant; you will be amazed to see the amount spend on the food. If you want to be successful about how to open a restaurant then you will have to price your food items on the menu correc! tly. Thi s is what you will have to control and if you are unable to control this aspect of your business then your business is traveling down the wrong path. The pricing should be moderate and must also help you earn profits. The key here is to avoid setting high prices.
The last problem is customer service. Yes, this is also the biggest problem of the restaurant industry today. There will always be people who complain about a certain recipe, while others might tell you that this is the prize winning recipe of your restaurant. You must know that you will not be able to make everybody happy. Always remember that your customers are the breath of life of your restaurant. They are the reason why in the first place you are thinking about how to open a restaurant.
There are other factors that you need to be aware of. The best way to ensure you get to tackle major concerns is to get advice from an expert for starting your own restaurant. If you are keen to learn more about how to open a restaurant, please
Europe Markets 1/10/2008 BCS, BHP, BP
Markets in Europe were mixed at 6.25 AM New York time.
The FTSE was off a fraction to 6,271. Barclays (BCS) was up 1.1% to 464. BHP Billiton (BHP) was up 1.5% to 1532. BP (BP) was off 1.1% to 604.
The DAXX was flat at 7,783. BASF was down 2,2% to 102.54. Merck was down 1.6% to 92.31.
The FTSE was off a fraction to 6,271. Barclays (BCS) was up 1.1% to 464. BHP Billiton (BHP) was up 1.5% to 1532. BP (BP) was off 1.1% to 604.
The DAXX was flat at 7,783. BASF was down 2,2% to 102.54. Merck was down 1.6% to 92.31.
Saturday, January 14, 2012
New Yahoo CEO Welcomed with Mixed Reviews
After a months-long search for a new CEO, Yahoo! Inc. (NASDAQ:YHOO) finally found their guy: Scott Thompson of PayPal (NASDAQ:EBAY).?The news came on Wednesday and it was welcomed by mixed reviews.
Yahoo! Stock Declined
The stock market responded to the Thompson hire by sending Yahoo’s stock down 2 percent in early morning trading. The stock was down, as of Wednesday, 14 percent from its 52-week high in May but it has recovered from its $11 per share August low, according to The Wall Street Journal.?By Friday, the stock had finished the week at $15.52.
Analysts Were Not So Kind
Wall Street’s analysts weren’t really showing their love toward the Thompson selection.
Gabelli wrote:
Coming from the inside, an unnamed Yahoo executive had this to say about the Thompson selection, according to Business Insider:
To assist with the search, the company hired executive ! search f irm Heidrick & Struggles International Inc. to find a possible replacement for Bostock and directors who may hand in their resignation letters.
Yahoo! Stock Declined
The stock market responded to the Thompson hire by sending Yahoo’s stock down 2 percent in early morning trading. The stock was down, as of Wednesday, 14 percent from its 52-week high in May but it has recovered from its $11 per share August low, according to The Wall Street Journal.?By Friday, the stock had finished the week at $15.52.
Analysts Were Not So Kind
Wall Street’s analysts weren’t really showing their love toward the Thompson selection.
Gabelli wrote:
��We view this as a slight negative, as it likely rules out a?sale of the entire company,�� Gabelli said in a note before the official?announcement. Says one analyst on a conference call on the news: ��Scott, to a?large degree, is more of a technologist, not more of a media or turnaround?expert, which is what we thought Yahoo needed at this point.��Stifel Nicolaus seemed positive:
Shares may fade a bit today if investors?believe that the hiring of Thompson may indicate that the evaluation of?strategic alternatives is not going forward. We believe that would be a?buying opportunity. We believe the process continues, now with?Thompson as a guiding force.Piper Jaffray��s sees challenges ahead for Thompson:
This hiring may be a signal that a private equity injection into Yahoo! is?less likely now �� we believe that with a solid CEO like Thompson, a?private-equity led investment is less necessary.
We believe the hire is a slight positive to Yahoo!?as Thompson is likely to refocus employees who had lacked a permanent CEO for?months; however, we note that Yahoo! has deteriorated meaningfully during the?absence of a perman! ent CEO as evidenced by our daily ad checks (62% guaranteed in?December vs. 91% last December). We believe the appointment of a CEO suggests?that a private equity minority investment in YHOO is unlikely, but does not impact?the potential and timing of an Asian asset sale, echoed by Chairman Roy Bostock.And Citi, coming in the middle, gave Yahoo’s stock a “Netural” rating:
We remain Overweight due to the possible revaluation of shares through a potential?Alibaba/Yahoo! Japan deal as a deal could result in excess cash that Yahoo! could?use to buy back shares.
We?believe Mr. Thompson has strong technical and organizational skills (like Carol Bartz)?and should bring that rigor to Yahoo!.? His track record at PayPal was excellent.?However, we are somewhat concerned that he does not have strong media/advertising?experience, which we believe Yahoo! needs, given the structural issues surrounding?the company��s Search and Display initiatives.? And by selecting Mr. Thompson, Yahoo!?is explicitly pursuing a Growth strategy, whereas we believe a Value strategy might be?more appropriate.Exec Are Not So Impressed ?
Coming from the inside, an unnamed Yahoo executive had this to say about the Thompson selection, according to Business Insider:
“He sounds like a nice guy.?It’s so not what we need. We need a fucking animal to come in and change this company.One former PayPal colleague of Thompson responded,
“He is from Visa. That is why PayPal stopped innovating. It?hired a bunch of bank execs.”Now that a new CEO is in place, it may be a changing of the guard for Yahoo’s board of directors. On Friday, news come out that Yahoo is looking for new board candidates to replace potential outgoing ones, such as Chairman Roy Bostock, according to the Wall Street Journal.
To assist with the search, the company hired executive ! search f irm Heidrick & Struggles International Inc. to find a possible replacement for Bostock and directors who may hand in their resignation letters.
Friday, January 13, 2012
Credit Cards: Weighing Bad Debt Against Any Debt At All
Bank uber-analyst Meredith Whitney wrote in The Wall Street Journal that the economy will have more problems as banks take credit cards away from people to prevent bad debt write-offs. She says “Just six months ago, I estimated that at least $2 trillion of available credit-card lines would be expunged from the system by the end of 2010. However, today, that estimate now looks optimistic, as available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone.”
That leaves a possible revival of consumer spending in a hell of a mess. Most consumers are having such a rough time with their current debt along with the?possibility of?unemployment that they are hardly spending any money at all. If the economy begins to get better, their credit cards may have been taken away by their banks. They may have a tiny big of money to spend, but no easy way to do so.?That should slow the recovery by a significant amount.
Then there are those few people who do have money now and might be enticed to spend it as deflation brings the prices for almost everything down. And there are people who will?have more money because of proposed tax cuts.?Without credit cards, will those people pay cash? Not likely.
Banks have already pulled massive amounts of credit out of the system by denying new loans to businesses and consumers. And extinction of the credit card will make that a lot worse. The only solution may be for the Treasury to issue plastic to consumers. Instead of the MasterCard (MA) or Visa (V) logo,?they can?carry a picture of President Obama.
That leaves a possible revival of consumer spending in a hell of a mess. Most consumers are having such a rough time with their current debt along with the?possibility of?unemployment that they are hardly spending any money at all. If the economy begins to get better, their credit cards may have been taken away by their banks. They may have a tiny big of money to spend, but no easy way to do so.?That should slow the recovery by a significant amount.
Then there are those few people who do have money now and might be enticed to spend it as deflation brings the prices for almost everything down. And there are people who will?have more money because of proposed tax cuts.?Without credit cards, will those people pay cash? Not likely.
Banks have already pulled massive amounts of credit out of the system by denying new loans to businesses and consumers. And extinction of the credit card will make that a lot worse. The only solution may be for the Treasury to issue plastic to consumers. Instead of the MasterCard (MA) or Visa (V) logo,?they can?carry a picture of President Obama.
Thursday, January 12, 2012
POWRtec International Corp. (POWT) Signs Contract with DONG Energy for 50,000 Smart Read Meters
California-based energy monitoring company, POWRtec International Corp. (OTCBB: POWT)?announced today that it has signed a contract with DONG Energy to secure the delivery of 50,000 of its Smart Read Meters. The Danish energy giant is one of the leading energy groups in Northern Europe and is known for its visionary approach to providing clean and reliable energy.
POWRtec's Smart Read meters allow for efficient and comprehensive analysis of energy usage. This benefits the utility provider, the end-user and ultimately the environment. To date, POWRtec has delivered 160,000 meters to DONG Energy; following this agreement, that total will raise to 210,000 meters over the next 12 months.
POWRtec's Smart Read Meters align perfectly with DONG Energy's clean energy mission; users have noticed a more efficient use of resources, smaller energy bills and enormous benefits to the environment. POWRtec designed their products to directly reduce the amount of energy waste and make a meaningful difference to the environment. The innovative and intelligent meters are network-enabled and can utilize virtually any communications protocol, empowering the intelligent smart meters to directly control network enabled, power-draining devices by switching them on and off in accordance with the desired energy output.
Grant Jasmin, CEO of POWRtec, remarked, "We are very pleased to continue our successful collaboration with DONG Energy and assist them in reaching their goals for more sustainable and responsible energy consumption. This contract has further solidified our strong position in Northern Europe."
POWRtec's Smart Read meters allow for efficient and comprehensive analysis of energy usage. This benefits the utility provider, the end-user and ultimately the environment. To date, POWRtec has delivered 160,000 meters to DONG Energy; following this agreement, that total will raise to 210,000 meters over the next 12 months.
POWRtec's Smart Read Meters align perfectly with DONG Energy's clean energy mission; users have noticed a more efficient use of resources, smaller energy bills and enormous benefits to the environment. POWRtec designed their products to directly reduce the amount of energy waste and make a meaningful difference to the environment. The innovative and intelligent meters are network-enabled and can utilize virtually any communications protocol, empowering the intelligent smart meters to directly control network enabled, power-draining devices by switching them on and off in accordance with the desired energy output.
Grant Jasmin, CEO of POWRtec, remarked, "We are very pleased to continue our successful collaboration with DONG Energy and assist them in reaching their goals for more sustainable and responsible energy consumption. This contract has further solidified our strong position in Northern Europe."
Goldman Sachs Dumps Wal-Mart From Conviction Buy List (WMT)
Wal-Mart Stores (NYSE: WMT) is indicated lower after Goldman Sachs? removed the world’s largest retailer from the Conviction Buy List.? Goldman still has a “Buy” rating on the stock.? The concern that the firm may need to raise guidance after its latest sales data was an issue Goldman noted.? The target in the note is $55.00.? It is still way too early to have an accurate read on where Wal-Mart will open, but shares look down close to 2% at $48.10 in very early indications.? Its 52-week range is $46.25 to $63.85.
Wednesday, January 11, 2012
Robust Black Friday Sales Stimulate Hopes Of Stronger Holiday Season Sales
The retailers smiled their way during the just concluded weekend as Black Friday sales figures set the tone for a solid holiday season sales to come in. All eyes are on the results of weekend sales to gauge the impact of the various economic indicators that have been flooding the largest economy of the world that was threatening to play a spoilsport in the busy holiday season.
Thanks to the consumer confidence level, Black Friday started hitting the news even before the sales commenced, though for a different reason. The eagerness with which shoppers lined from midnight to take a slice of their share was obvious and much to the dislike of the retailers shopping began violently at least in the initial hours of shopping.
The Black Friday sales numbers echoed in the Asian and European markets too on Monday. For more than a week, one or the other negative news battered the markets badly. It was but natural that market men are pining for favorable news that could lift the sentiments. Strong Black Friday sales was the much-needed vitamin for the market to come from the slumber. True to the expectations, Black Friday sales continued its top-shopping day consecutively for the seventh year till 2010. The current year position will be known only after the seasonal sales are over.
The sales figures assumed significance in the wake of the U.S.'s second estimate of third quarter GDP recording 2 % rise at an annual rate, lower than its advance estimate of 2.5%. This has obviously ringed alarm bells of a possible recession looming large. But the latest consumer spending halted any such opinion at least for the short term.
As much as 86.3 million people thronged the shops and online stores to shop their favorites.
Commenting on the Black Friday sales, NRF President and CEO Matthew Shay said, "Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers' Black Friday promotions, a promising sign for the economic recovery." Though the holiday season is far from over, the turnout and value growth motivate the retailers to build on the momentum seen so far.
Clothing and clothing accessories dominated the buyers wish list with 51.4% preferring them followed by electronics and computer-related accessories that recorded 39.4% of shoppers fancying them.
Except for two years, i.e. in 2008 and 2009, the retails sales have been registering a growth. These two years saw retail sales nose-diving 4.4% and 0.4% respectively following the financial turmoil! inflict ed recession.
Currently, NRF is estimating holiday sales to witness 2.8% growth to $465.5 billion for 2011 holiday season sales from 2010's 5.2% upside. Last year results were significant as it came on the back of 0.4% downside recorded in 2009. The last ten years witnessed an average holiday sales of 2.6% per year.
Thanks to the consumer confidence level, Black Friday started hitting the news even before the sales commenced, though for a different reason. The eagerness with which shoppers lined from midnight to take a slice of their share was obvious and much to the dislike of the retailers shopping began violently at least in the initial hours of shopping.
The Black Friday sales numbers echoed in the Asian and European markets too on Monday. For more than a week, one or the other negative news battered the markets badly. It was but natural that market men are pining for favorable news that could lift the sentiments. Strong Black Friday sales was the much-needed vitamin for the market to come from the slumber. True to the expectations, Black Friday sales continued its top-shopping day consecutively for the seventh year till 2010. The current year position will be known only after the seasonal sales are over.
The sales figures assumed significance in the wake of the U.S.'s second estimate of third quarter GDP recording 2 % rise at an annual rate, lower than its advance estimate of 2.5%. This has obviously ringed alarm bells of a possible recession looming large. But the latest consumer spending halted any such opinion at least for the short term.
NRF Take
The National Retail Federation's (NRF) survey of Black Friday sales touched a record $52.4 billion, representing 16% increase over the previous year Black Friday sales. The traffic too witnessed a 6.6% upside to 226 million shoppers and websites from 212 million in the year-ago period. Significantly, the average spent of shopper also grew 9% to $398.62 from ! $365.34, while average spending through the web increased 37.8% to $150.53 over last year. Online shoppers numbered 28.7 million, significantly higher than 22.2 million in the previous year.As much as 86.3 million people thronged the shops and online stores to shop their favorites.
Commenting on the Black Friday sales, NRF President and CEO Matthew Shay said, "Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers' Black Friday promotions, a promising sign for the economic recovery." Though the holiday season is far from over, the turnout and value growth motivate the retailers to build on the momentum seen so far.
Clothing and clothing accessories dominated the buyers wish list with 51.4% preferring them followed by electronics and computer-related accessories that recorded 39.4% of shoppers fancying them.
Cyber Monday Outlook
The sales trend over the years has always been on the upside only. Even during the worst year of 2008 too, Cyber Monday shoppers witnessed a consistent rise. As much as 106.9 million visitors were recorded in 2010 for Cyber Monday sales. In 2011, about 122 million people are expected to shop on Cyber Monday going by the survey of Shop.org. The survey also points out that eight out of ten retailers are likely to have unique promotional schemes to attract online shoppers.Historically Speaking
The retail companies generate 25% - 40% of their annual sales from holiday season sales. However, the last fifteen years witnessed a continuous fall in share of yearly sales. NRF discloses that this is partly due to consumers preferring their holiday shopping in October itself or redeem their gift cards in January or later. Therefore, holiday season sales are viewed closely to gauge the consumers pulse.Except for two years, i.e. in 2008 and 2009, the retails sales have been registering a growth. These two years saw retail sales nose-diving 4.4% and 0.4% respectively following the financial turmoil! inflict ed recession.
Currently, NRF is estimating holiday sales to witness 2.8% growth to $465.5 billion for 2011 holiday season sales from 2010's 5.2% upside. Last year results were significant as it came on the back of 0.4% downside recorded in 2009. The last ten years witnessed an average holiday sales of 2.6% per year.
iStock Punch
Black Friday sales numbers provide the much-needed relief for the investors. The fears of dull holiday season on the back of recession fear seem to have vanished at least for the holiday season shopping. While there is a concern as to how much special discounts have been offered by the retailers to increase their sale, the increase in average spent of shopper assumes significance. The 2.8% projection of holiday season sales by NRF is above the 10-year average sales of 2.6% indicting the consumer confidence level. The catch seems to be on the amount spent on promotional activities to lift sales numbers. None-the-less, this is a period where retailers have to pull all their resources to make a killing and they seemed to be doing what is expected of them only.{
Tuesday, January 10, 2012
Oracle Corp. Second Quarter Earnings Sneak Peek
S&P 500 (NYSE:SPY) component Oracle Corp. (NASDAQ:ORCL) will unveil its latest earnings on Tuesday, December 20, 2011. Oracle develops, manufactures, markets, distributes, and services software designed to help its customers manage and grow their businesses.
Oracle Corp. Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 55 cents per share, a rise of 12.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 54 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 55 cents during the last month. For the year, analysts are projecting profit of $2.33 per share, a rise of 9.4% from last year.
Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 45 cents per share against a mean estimate of profit of 44 cents per share.
Wall St. Revenue Expectations: Analysts are projecting a rise of 6.7% in revenue from the year-earlier quarter to $9.23 billion.
Analyst Ratings: Analysts are bullish on this stock with 31 analysts rating it as a buy, none rating it as a sell and six rating it as a hold.
A Look Back: In the first quarter, profit rose 36.1% to $1.84 billion (36 cents a share) from $1.35 billion (27 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 11.6% to $8.37 billion from $7.5 billion.
Key Stats:
The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 27.1%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 46.5% from the year earlier qua! rter.
The company has seen net income rise in three straight quarters. Net income rose 35.8% in the fourth quarter of the last fiscal year and 78% in the third quarter of the last fiscal year.
Competitors to Watch: Intl. Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), SAP AG (NYSE:SAP), Intel Corporation (NASDAQ:INTC), Apple Inc. (NASDAQ:AAPL), Red Hat, Inc. (NYSE:RHT), EMC Corporation (NYSE:EMC), CA, Inc. (NASDAQ:CA), and Adobe Systems Incorporated (NASDAQ:ADBE).
Stock Price Performance: During November 15, 2011 to December 14, 2011, the stock price had dropped $3.09 (-9.4%) from $32.96 to $29.87. The stock price saw one of its best stretches over the last year between April 18, 2011 and May 2, 2011 when shares rose for 10-straight days, rising 8.1% (+$2.73) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight-straight days, falling 12.8% (-$4.22) over that span. Shares are down $1.21 (-3.9%) year to date.
Oracle Corp. Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 55 cents per share, a rise of 12.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 54 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 55 cents during the last month. For the year, analysts are projecting profit of $2.33 per share, a rise of 9.4% from last year.
Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 45 cents per share against a mean estimate of profit of 44 cents per share.
Wall St. Revenue Expectations: Analysts are projecting a rise of 6.7% in revenue from the year-earlier quarter to $9.23 billion.
Analyst Ratings: Analysts are bullish on this stock with 31 analysts rating it as a buy, none rating it as a sell and six rating it as a hold.
A Look Back: In the first quarter, profit rose 36.1% to $1.84 billion (36 cents a share) from $1.35 billion (27 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 11.6% to $8.37 billion from $7.5 billion.
Key Stats:
The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 27.1%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 46.5% from the year earlier qua! rter.
The company has seen net income rise in three straight quarters. Net income rose 35.8% in the fourth quarter of the last fiscal year and 78% in the third quarter of the last fiscal year.
Competitors to Watch: Intl. Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), SAP AG (NYSE:SAP), Intel Corporation (NASDAQ:INTC), Apple Inc. (NASDAQ:AAPL), Red Hat, Inc. (NYSE:RHT), EMC Corporation (NYSE:EMC), CA, Inc. (NASDAQ:CA), and Adobe Systems Incorporated (NASDAQ:ADBE).
Stock Price Performance: During November 15, 2011 to December 14, 2011, the stock price had dropped $3.09 (-9.4%) from $32.96 to $29.87. The stock price saw one of its best stretches over the last year between April 18, 2011 and May 2, 2011 when shares rose for 10-straight days, rising 8.1% (+$2.73) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight-straight days, falling 12.8% (-$4.22) over that span. Shares are down $1.21 (-3.9%) year to date.
Monday, January 9, 2012
Deals with carmakers should speed its reach into traditional radio
For this week, Pandora��s (NYSE:P) shares have been rockin�� a sweet tune. They are up over 22%.
Why the excitement? First, Pandora got a?nice boost on Monday when analysts at Needham & Company put a ��buy�� recommendation on the stock, with a price target of $13. Keep in mind that it’s already at $12.20.
Next, Pandora put out a glowing press release at the 2012 Consumer Electronics Show in Las Vegas announcing that the company now has 125 million registered users and controls about 68% of the market for Internet radio.
But perhaps the most notable development is Pandora’s traction with automakers. It currently has 23 partnerships with companies such as Ford (NYSE:F), Toyota (NYSE:TM), Acura and Kia.
This is important since Pandora is really focused on disrupting the traditional radio market, which is a $13+ billion opportunity. There’s no doubt that mobile devices from?Apple?(NASDAQ:AAPL) and Google?(NASDAQ:GOOG) are key drivers.
So far, Pandora has about 4% of the traditional radio market. But with its aggressive partnership strategy, that share is likely to expand quickly.
Despite all this, investors need to be cautious. Pandora��s stock could quickly go from hot to cold.
Tom Taulli runs the InvestorPlace blog?IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of?��All About Short Selling��?and?��All About Commodities.��?Follow him on Twitter at?@ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
Why the excitement? First, Pandora got a?nice boost on Monday when analysts at Needham & Company put a ��buy�� recommendation on the stock, with a price target of $13. Keep in mind that it’s already at $12.20.
Next, Pandora put out a glowing press release at the 2012 Consumer Electronics Show in Las Vegas announcing that the company now has 125 million registered users and controls about 68% of the market for Internet radio.
But perhaps the most notable development is Pandora’s traction with automakers. It currently has 23 partnerships with companies such as Ford (NYSE:F), Toyota (NYSE:TM), Acura and Kia.
This is important since Pandora is really focused on disrupting the traditional radio market, which is a $13+ billion opportunity. There’s no doubt that mobile devices from?Apple?(NASDAQ:AAPL) and Google?(NASDAQ:GOOG) are key drivers.
So far, Pandora has about 4% of the traditional radio market. But with its aggressive partnership strategy, that share is likely to expand quickly.
Despite all this, investors need to be cautious. Pandora��s stock could quickly go from hot to cold.
Tom Taulli runs the InvestorPlace blog?IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of?��All About Short Selling��?and?��All About Commodities.��?Follow him on Twitter at?@ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
Subscribe to:
Posts (Atom)
