Joseph Lazzaro
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General Cable Corp.: Stopped-Out
In investing, they don't all work out. General Cable Corp. (BGC), which I first wrote about on May 5, 2009, at a price of $34.59, has been stopped-out at at the sell/stop loss of $28.
The stock of General Cable, which develops, designs, manufactures, and distributes copper, aluminum, and fiber optic wire and cable products for the communications, energy, and electrical markets, has been retreating since it announced a Q4 production cut back in mid-2009.
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Avon Products: An Overcorrection Creates an Opportunity
Avon Products (AVP), which I first wrote about on May 6, 2009, at a price of $23.12, has pulled-back with the market's retreat, but I still like the company and the stock. Here's why:
Avon remains the world leader in direct-marketed cosmetics, toiletries, fashion jewelry, and fragrances, with ample growth opportunities in Latin America, China, and Central/Eastern Europe.
Continue reading Avon Products: An Overcorrection Creates an Opportunity
Ray of Light: G-7 Finance Ministers Vow to Maintain Stimulus
Monday's upbeat data point concerns the G-7, which agreed over the weekend to maintain economic stimulus measures, even as institutional investors (among others) start clamoring for nations to address large budget deficits. Meeting amid the frozen tundra of Iqaluit, Canada (as opposed to the almost equally frozen tundra of Washington, D.C.), Canada's Finance Minister Jim Flaherty said G-7 ministers "are mutually committed" to continuing stimulus, and will start looking at exit strategies after regional economies are on a sustainable growth track, Bloomberg News reported Monday.
Continue reading Ray of Light: G-7 Finance Ministers Vow to Maintain Stimulus
Fiscally, California and Greece Are Not Identical
There's been some comparison in the popular press between Greece's serious fiscal condition, and the State of California's. Well, while both are running budget deficits, the similarities stop there. Greece's fiscal situation is far more serious. Greece's budget deficit as a percent of GDP is roughly 12.7%. California's is about 7%, based on the state's 2008 GDP.
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Northeast Utilities: Adequate Growth, Decent Dividend
It goes without saying that one sector I've liked for years has been the electric power generation sector, and within this category Northeast Utilities (NU), which I first wrote about on May 6, 2009 at a price of $21.48, is a standout. Investors should not expect mega revenue growth or gargantuan customer gains with NU, just predictable, steady earnings growth, evenly split between the company's generating/distribution business and its transmission operation. Further, look for the company's transmission sector to play an increasing role in revenue growth, moving forward. NU serves about 1.9 million customers, primarily in Connecticut, but also in New Hampshire and Massachusetts.
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American Electric Power: Low-Profile Utility Gem
I have long argued that the electric power generation sector offers investment opportunities, and within that category I've liked American Electric Power (AEP), which I first wrote about on May 4, 2009, at a price of $25.38.AEP, with 5 million retails customers (mostly in Ohio, Virginia, Indiana, and Oklahoma), should continue to shine as a low-cost power provider. True, increased energy efficiency across the U.S. economy will be a trend for the next decade and beyond, but relatively low-cost electric power does not go out of style.
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Greenspan: 'The Recession Is Over'
One of the world's preeminent economists and former central bankers had some good news and not-so-good news for investors. Speaking on NBC's Meet The Press on Sunday, Former U.S. Federal Reserve Chairman Alan Greenspan said, "The recession is over. It bottomed back in the middle of the year."
However, Greenspan added that, as many economists agree, the economic recovery will have to continue for some time to absorb the slack in the labor force to lower the U.S. unemployment rate significantly.
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Banks Still Not Providing Enough Credit to Small Businesses
The political climate in Washington is hardly conducive to a joint resolution by the Democrats and Republicans honoring Moms on Mother's Day, let alone high-stakes banking issues, but one reality is clear: if banks don't starting providing more credit to small and medium-sized businesses, Congress will have to create agents -- or new institutions -- that do. The issue is too important for the long-term health of the economy: small and medium-sized businesses account for the bulk of America's jobs and new hiring.
Presently, demand is growing incrementally, but as it increases, if business credit lines don't as well, the recovery could stall, necessitating Congressional action.
Continue reading Banks Still Not Providing Enough Credit to Small Businesses
Dollar/Oil Link Shows Impact of U.S. Budget Deficit on Crude's Price
The way the price of oil has plummeted this week on the dollar's rise amid the flight-to-safety lends more support to the theory that if the U.S. budget was balanced, crude would fall, oh, about $30 or $35. Oil is priced in dollars. Hence, when the dollar falls, oil's price usually rises, and vice-versa. Starting in 2001, the dollar began to weaken as the U.S. budget went from a surplus under President Bill Clinton to a deficit under President George W. Bush, with the euro strengthening from about 82 cents versus the dollar to the current $1.3605. During that time oil's price has more than tripled from the $25 per barrel crude price in 2001.
Continue reading Dollar/Oil Link Shows Impact of U.S. Budget Deficit on Crude's Price
American Express: Well-Positioned for the Upturn in Business Start-ups
You won't find too many fans of the credit card/revolving debt sector, but American Express (AXP), which I first wrote about on April 27, 2009 at a price of $27.28, in my interpretation, still has considerable appeal. Here's why: I expect credit card charge-offs to continue to stabilize in the quarters ahead, with a reduction in delinquencies, improving cash flow for AXP. That will help build capital for future expansion/new business projects. A better pace of small business/medium business expansion adds to the positive story, and AXP still has ample room to increase use of its business cards in the emerging markets of Asia and Latin America.
Continue reading American Express: Well-Positioned for the Upturn in Business Start-ups
U.S. Has a $1.6 Trillion Deficit, and the Dollar Still Rises
Trillion dollar deficits extending out, purportedly for a decade. A projected $1.6 trillion deficit for next year, fiscal 2011. A higher U.S. national debt ceiling. And what's the U.S. dollar doing amid the above? Oh, it's trending higher against the world's major currencies.
The dollar early Friday strengthened more than 1 cent versus the euro and British pound, to $1.3607 and $1.5612, respectively, capping a week of impressive gains for the buck.
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Canadian Pacific Is Attractively Priced
Readers of this space know that like Warren Buffett, I like the rails, and Canadian Pacific Railway (CP), which I first wrote about on May 1, 2009, at a price of $37.47, still looks attractive. Here's why.
I expect the global upturn, albeit with fits-and-starts, in commodity shipments (potash, coal) to continue, and look for the pace to quicken in 2010. Industrial car loadings also should register an impressive improvement this year. Meanwhile, increases in CP's railroad efficiency add to the positive story.
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China Still Holds Decidedly Different View on the Yuan's Value
China is sending signals that efforts to assimilate the giant Asian economy into the international financial system are not likely to include measures that Beijing has heretofore resisted. One tack China is opposed to: changes in the yuan's value that it does not see as acceptable.
Ma Zhaoxua, a China Foreign Ministry spokesman, said at a regular news conference, "wrongful accusations and pressure will not help solve this issue," The New York Times reported Thursday.
Continue reading China Still Holds Decidedly Different View on the Yuan's Value
As Expected, ECB, BOE Keep Key Interest Rates the Same
As expected, both the European Central Bank and the Bank of England kept their key, short-term interest rates at the same levels Thursday, in decisions that are consistent with a continued, accommodative central bank policy in the world's major economic regions. The ECB kept its refinance rate at 1.0% and the Bank of England maintained its 0.5% rate. The Bank of England also maintained its 200 billion pound/$315 billion asset buying program at the same level.
Continue reading As Expected, ECB, BOE Keep Key Interest Rates the Same
Will the Tea Party Endure?
What to make of the Tea Party at this junction? It's too soon to tell. You'll hear a great of rhetoric, and banter and hype, but regarding a systematic and professional evaluation of 'the TP,' there just aren't enough data points yet. Hence, for now, place them in the category of a faction. Factions are more likely to be merged into an existing party, form a separate interest group, or disband.
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