Smart Stocks Investing

Sprint: 30% Upside If Company Can Revert Subscriber Losses

Trefis submits:

Sprint (NYSE:S), which competes with telecom giants like AT&T (NYSE:T) and Verizon (NYSE:VZ) in the mobile phone subscription plans business, has suffered subscriber losses over the past few years. The company is making efforts to improve its network and quality of customer service that could lead to a reversal in the subscriber trend and boost Sprint’s stock.

Below we discuss how Sprint is partnering with Ericsson to improve network quality, its efforts to improve customer service, and how these initiatives could positively impact Sprint’s stock in the near future.

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Dish Network: Low Prices Bring New Subscribers

Ockham Research submits:

Aggressive marketing and pricing promotions helped lead Dish Network (DISH) to a stronger than expected fiscal fourth quarter. The second largest satellite TV provider reported Monday that net income fell to $179 million in the quarter from $217 million a year ago. However, EPS of 40 cents per share easily topped analysts’ estimates of 32 cents, and revenue rose 1.4% to $2.96 billion which slightly edged out Wall Street’s expectations. Perhaps most importantly though was the net subscriber additions of 249,000, which was 50,000 more than expected and demonstrated Dish is connecting with cash-strapped consumers.

The latest “Why Pay More” ad campaign out of Dish Network takes direct aim at satellite competitor DirecTV (DTV) claiming that their plan can save consumers $24 per month. However, DirecTV is suing over the ads claiming that the plans that were compared are not equal offerings. The result of the suit is pending, and DirecTV lost the recent ruling on an injunction pulling the ads from TV. Either way, the ads have been effective as Dish has lured consumers in with less costly plans, and then benefited as many customers upgrade to more pricey high definition plans. Following three straight quarters of subscriber growth Dish Network now has 14.1 million subscribers which means it is still small relative to DirecTV and other cable TV services, but they are gaining with attractive pricing.

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Rosenberg Joins Chorus for High Yield Bonds

Larry MacDonald submits:

A previous post noted that fixed-income strategist Hank Cunningham was advising clients to go into high-yield bonds. Last week, Gluskin Sheff economist and strategist David Rosenberg joined the chorus.

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VSE Corporation: Defending Strong Fundamentals

Paul Price submits:

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5 Microcaps to Watch This Week

Microcap Speculator submits:

Pulled up these charts with the century club stock screen, my tweaks to the Marketclub smart scanner.

1. Interleukin Genetics (Amex:ILI)

I have no idea what is going on with Interleukin Genetics, a $37M market cap developer of genetic tests. I know it’s cash-strapped, but its chart seems to be perking up.

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Buying Opportunity: Stocks and ETFs Affected by Chile’s Earthquake

• Copper

• Sociedad Quimica y Minera de Chile (SQM)

One of the world’s leading fertilizer companies is also a major player in the lithium sector. The earthquake is not likely to have a large effect on the company, however any weakness from the natural disaster would be viewed as a buying opportunity. Our firm owns shares of SQM.

• Lan Airlines (LFL)

• iShares MSCI Chile ETF (ECH)

• Banks

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Acme Is in a League of Its Own

Saj Karsan submits:

On Friday, Acme United (ACU) reported year-end results. While its customer markets are still soft, Acme was able to grow revenues by expanding its product lines and customer base. While many companies do this by slashing prices resulting in reduced margins and profitability, Acme has proven itself to be a superior company, maintaining strong profitability as it grows.

You wouldn’t know it from looking at Acme’s stock price, however. The company trades with a P/E of just 11, despite excellent returns on equity. To see the company’s valuation in perspective, consider the P/E ratios of the following companies with similar returns on equity over the last five years:

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Six Important Dividend Increases

Dobromir Stoyanov submits:

Any company could afford to boost distributions in a single year. Any type of business could also have a high yield, especially if it distributes all of its cash flows to shareholders. It takes a special kind of a business model to afford a proper balance between investing back into the business and distributing excess profits to shareholders. It is even more exciting when those distributions have been increased regularly for over ten consecutive years. I have highlighted six dividend stocks each of which has consistently raised distributions for over two decades.

Altria Group, Inc. (MO), through its subsidiaries, engages in the manufacture and sale of cigarettes, wine, and other tobacco products in the United States and internationally. The company’s board of directors raised its quarterly dividend by 2.90% to 35 cents/share. This is the 43rd consecutive dividend increase for Altria Group. The only reason why the company is not on the dividend aristocrat list is because its dividend payment is lower due to the spin-off of Phillip Morris International (PM) in 2008 and Kraft Foods (KFT) in 2007. The company does have a policy to return approximately 75% of earnings to shareholders in the form of cash distributions. Stock currently yields 7%. (analysis)

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Chinese Domestic Consumption Is the Way Forward

China OTC Player submits:

Last week, in a speech devoted to economic reform, the Chinese Minister for Industry and Information Technology Li Yizhong highlighted the importance of domestic consumption in moving China away from its export-dominated market orientation. This development follows speeches (in early February) by President Hu Jintao, Premier Wen Jiabao, and Vice Premier Li Keqiang, all focusing on the need for the transformation of the Chinese economy. Of course, increasing domestic consumption is not the only topic discussed. Also mentioned are sustainability, upgrading of technology and development of human resources.

It is, however, very clear that encouraging domestic consumption is going to be an important cornerstone of any major economic policy going forward. Already, in the past couple of years, there have been several measures put into effect for precisely this purpose:

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Old School Value Stock Portfolio Update February 2010

Jae Jun submits:

Portfolio Performance

Things moved back in the right direction this month. Up 10.67% compared to the market’s 2.71%.

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3 Stocks to Consider as Do-It-Yourself Tax Preparation Gains Popularity

Wall Street Cheat Sheet submits:

by Derek Hoffman

In case you were distracted by Ben Bernanke’s testimony last week, an interesting trend in consumer behavior is taking shape during this year’s tax-filing season.

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Gilead Science: Dominance in the HIV Market

Michael Kudrna submits:

Gilead Science (GILD) seemed to be on a roll lately, but has been met with a downgrade by the firm Morgan Joseph due to upcoming patent expiration concerns this decade. At the time of writing this, GILD was trading off its 52-week high to just under $48. At these levels, I feel GILD is undervalued as the pipeline is strong and the HIV sales will continue to be significant.

GILD has maintained dominance in the HIV market but, with patents expiring over the next decade, its HIV division is being threatened. Currently, 81% of GILD’s sales are from the HIV division so any threat of losing HIV sales would surely send GILD’s stock down. GILD plans to remedy those concerns with their new HIV drug Quad.

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Despite Risks, Net 1 UEPS Looks (Credit) Worthy

The Curious Investor submits:

It’s been a while and for that I apologize. Truth be told, I had gotten my portfolio almost fully invested by mid-last year. And, as the stock intense rally we’ve seen in stocks through 2009 has turned flat since the new year, I’ve been much less aggressive with my personal portfolio and as such have had a lot less to say. Though, for those of you who follow my Covestor account, you’ll know that I have not been completely out of the markets. I’m increasingly interested in companies which do the bulk of their business internationally as I believe this is a good way to capitalize on foreign growth while being constrained with access only to U.S. exchanges. (By the way, does anyone know any good online brokerages which allow you to trade stocks internationally?)

Universal Electronic Payment System (UEPS)
UEPS is a financial transaction system offered by Net1 which utilizes its patented Funds Transfer System and secure smart cards to provide real-time but offline payment solutions for un-banked/under-banked populations. These cards store all necessary information – available funds, user identity, etc. – and allows for transactions to take place without a connection to a host mainframe. As such, the cards are particularly useful to countries with under developed infrastructure.

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Telefonica: Increasing High Dividends, Improving Revenue Outlook

Telefonica (TEF) is the world´s fourth largest telecommunications firm in terms of revenue, and second only to AT&T (T) in terms of total profits. On February 26th Telefonica released quarterly and 2009 year end results which beat analysts’ estimates despite a severe recession in its Spanish home market. Additionally, the company issued a forecast for 2010 which calls for total revenue to increase between 1% and 4%, while maintaining its high margins of EBITDA over sales better than 40%.

We believe that Telefonica represents an outstanding ¨income and growth¨ opportunity at current valuations. These are the reasons:

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Sirius Staying Power – Earnings Update

Michael Kudrna submits:

Per my earnings preview for Sirius XM (SIRI), I want to update my readers on what has since transpired. SIRI released earnings last Thursday and if you have read my earnings preview, you will know what I was looking for in this release. Overall, I am very happy with the earnings and conference call. I’ve been digesting these earnings and taking into consideration other factors to reevaluate my thesis.

Fundamentals are of importance to me, yet they are not the only factor I consider in my overall Portfolio Management Strategy. While we all wish that the irrational beast known as the market would consistently price stocks with respect to the fundamentals, history tells us that is not always going to happen when it should. Therefore, I also take trends, the overall market sentiment, and various catalysts (not necessarily tied to fundamentals) into consideration. Since I am active throughout the day, I also take notice of emotional reactions and try to dissect the market in a psychological manner. This method helps me to more accurately decide what action I should take and when I should take it. If I am right 50% of the time, that is a significant win. I let my winners continue to ride up while I shave off some shares to lock in realized profits. The key to my strategy is being very protective by cutting losses quickly when I am wrong. In doing so, I have much less ground to make up so my profits are not eaten up. As my loyal readers know, I have zero loyalty to any stock. While many investors will treat a stock like part of the family, I, on the other hand, will treat it as an acquaintance whom I have no problem giving the boot when they overstay their welcome. With that being said, let’s dig into the pertinent details of SIRI’s earnings release and conference call.

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