Zachary Scheidt submits:
CTCT)” hspace=”6″ vspace=”6″ width=”200″ height=”111″ />Equity markets continue to rally as economic news appears sanguine and professional managers add risk. For most professional money managers, there’s nothing worse than under performing their benchmarks, so as the market climbs higher it is becoming more difficult for these institutional investors to resist buying attractive growth stocks. While I still expect the market to turn lower due to economic weakness, Constant Contact Inc. (CTCT) could at least temporarily benefit from the willingness of institutions to increase their risk exposure.
Constant Contact is primarily an email marketing firm which allows small businesses to build a contact list of prospective clients, and send regular emails to this list in order to generate sales. The platform is attractive not only to small businesses (who may not have the technical resources to design their own email marketing programs) but is also helpful for non-profit organizations soliciting donations or simply distributing information to interested parties. With an attractive entry price of just $15 per month, the service is accessible to almost any venture and could easily pay for itself with a minimal level of converted sales.
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Xiaofan Zhang submits:
Chinese gaming company Shanda Games (GAME), a subsidiary of Shanda Interactive Entertainment (SNDA), reported solid 4Q09 earnings on February 28, but its stock has plunged to a 52-week low on disappointing 1Q10 guidance. Shanda’s Q4 earnings and Q1 usage trends matched my estimates, but the declining revenue of flagship game Mir II in 1Q10 proved that my assumption of stable monetization was wrong. I believe Shanda is likely to recover from current difficulties, as it did in the past.
Positives: Solid Q4 earnings and stable game usage in Q1. As I expected, Shanda Games grew revenue by 5% Q/Q in 4Q09, at the high end of management guidance, and Legend Series games contributed about 75% of total revenues, with Mir II Return (Chuan Qi Gui Lai) becoming a significant growth driver. Despite the surprising revenue decline of flagship game Mir II, management confirmed my view that Mir II and other major games has maintained stable daily usage in 1Q10. Compared with one year ago, I believe the internal distribution of Shanda’s user base has become much more reasonable due to the launch of Aion and new Legend Series games including Chuan Qi Wai Zhuan, Chuan Qi Gui Lai and Chuan Shi Qun Ying Zhuan.
Negatives: Surprisingly weak monetization of Mir II in Q1. Due to declining monetization of Mir II, Shanda is guiding 1Q10 revenue to decrease 10%-15% Q/Q. Previously, I assumed Mir II’s operation team would sustain its success in stimulating players’ spending. The fact proved me wrong: Mir II’s expansion pack Jue Dai Shuang Jiao [JDSJ] has failed to increase monetization since its launch in December 2009. JDSJ’s major feature is allowing players to carry two Heroes (pets in the form of humans) instead of one Hero in prior versions. Carrying multiple pets is very common in other popular games such as TLBB. However, Mir II’s middle-class players strongly opposed this change because raising a Hero (pet) in Mir II was very expensive. They believed the change provided rich players with an extra opportunity to spend their money and gain unfair advantage over ordinary players. These disappointed players decreased their spending, causing a major decline in Mir II’s revenue.
Author’s Disclosure: no positions.
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Rick Newman submits:
It’s hard to think of another company that nose-dived as fast as Toyota (TM) has. A few months ago, millions of drivers considered Toyota the gold standard for automobiles, with quality and reliability you could practically take for granted. Then came mysterious gas-pedal problems, claims of deadly "sudden acceleration" incidents, the global recall of more than 8 million vehicles, and vacillating 
assurances from shellshocked executives. The recalls could end up costing $2 billion or more. Toyota’s sales have plunged, and its U.S. market share has fallen from 17 percent to 13 percent in just two months. The collapse rivals Enron or Lehman Brothers.
What’s different about Toyota, though, is that it will recover. The automaker has deep pockets and tons of talent. Diffident CEO Akio Toyoda may not be the right man to lead Toyota through the worst crisis in its history, but sooner or later the company will regain control and get back on the pavement. It may even end up a better company than before. Meanwhile, Toyota automobiles could be a smart buy, with dealers forced to offer discounts and other incentives to move merchandise sullied by the scandal. Shoppers should research prices at sites like Edmunds.com or kbb.com to make sure that the price paid today is commensurate with the likely resale value down the road. If the price seems right, there are several other good reasons to buy a Toyota:
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Dr. Duru submits:
Major resistance has broken and trends are turning back up on the major indices, so it is time to consider more seriously the prospect of the market printing fresh highs on the year sooner than later. Yesterday, I examined Cummins (CMI) as one of several stocks that may indicate the market has sufficient buying power to keep pressing upward. Today, consumer-related stocks have my attention.
The earnings coming from retail companies continue to show surprising resilience and these data are supporting steadily increasing prices in retail stocks. The charts of retail-related ETFs suggest consumers have become increasingly bullish on their ability to support low savings rates (the consumers with jobs or working spouses, anyway). In particular, the retail ETF, XRT, is trading at 28-month highs and pre-recession levels!
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China is the largest consumer of coal in the world, both in terms of power generation and in terms of supplying coal to the coking industry for making steel. Despite all the progress being made in cleantech areas, such as solar and wind, coal is and will continue to be the predominant source of energy in China for the foreseeable future.
The economic and stock market rebound over the past year has translated directly into massive gains in the coal industry. Combined with the continued growth expected in China over the coming years, coal is clearly an attractive investment opportunity. Currently the three best ways to play coal in China are Yanzhou Coal (YZC), Puda Coal (PUDA) and the best in my opinion, Sinoclean Energy.
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David Hunkar submits:
For the past few months, the Greek debt crisis has been the focus of investors worldwide as the major European countries try to figure out a solution to solve the crisis. Due to politics and the integration of many countries under the common currency, the crisis does not seem as if it will end anytime soon. In addition, Greece, Portugal, Ireland, Italy and Spain (collectively dubbed as PIIGS by traders) are also suffering from high deficits.
Despite the current chaos in the European Union, some good investment choices can be found in these countries. An article in the latest edition of Bloomberg BusinessWeek lists a few stocks from PIIGS that are liked by fund managers.
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Ron Sommer submits:
We first wrote about Endo Pharmaceuticals (ENDP) in a blog post on March 22, 2009. We recommend Endo then and we reiterate that recommendation now.
“Endo Pharmaceuticals Holdings Inc., is a specialty pharmaceutical company in pain management. The Company is engaged in the research, development, sales and marketing of branded and generic pharmaceutical products primarily to treat and manage pain. Its portfolio of branded products includes Lidoderm, Opana ER, Percocet, and Frova. It concentrates on generics that have one or more barriers to market entry, such as complex formulation, regulatory or legal challenges or difficulty in raw material sourcing. During the year ended December 31, 2008, the branded products and non-branded generic portfolio comprised approximately 93% and 7%, respectively, of the Company’s net sales. It markets its branded pharmaceutical products to prescribing physicians in pain management, neurology, surgery, anesthesiology, oncology and primary care. In March 2009, Endo Pharmaceuticals Holdings Inc. completed the acquisition of Indevus Pharmaceuticals, Inc.”
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The Gold Report submits:
Gold has been about the best investment around for the past decade," says Eric Coffin, despite having been lukewarm towards the precious metal in the early ’90s. Co-editor along with his brother David of the HRA (Hard Rock Analyst) publications, Eric explains why they’re sticking with the exploration stories that work and how they prefer mining executives who will "swing for the fence for themselves rather than just option everything" in this exclusive interview with The Gold Report.
The Gold Report (TGR): Eric, in a recent HRA Journal you have written that you’re not expecting a big gain in the market for 2010. However, you also indicated that it’s not required to have big gains in the market to have the mining sector do well. So, as long as the markets don’t hit the panic button, you’re expecting that metal explorers will continue to be rewarded for their discoveries. Can you expand on that for us? And to what extent do you believe the metals market has decoupled from the major markets?
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The Gold Report submits:
<< Return to Exploration Stories That Work, Part I
The Gold Report (TGR): When you look at companies making a discovery, what price of gold do you use to see if it’s going to be economically viable?
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optionMONSTER submits:
By David Russell
Coca-Cola (KO) fell last week on a plan to buy its bottling operations, and now traders are looking for a rebound.
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Kurt Wulff (McDep Associates) submits:
Buy-recommended Occidental Petroleum (OXY) offers unlevered appreciation potential of 23% to a McDep Ratio of 1.0 where stock price would equal Net Present Value (NPV) of $95 a share. Fourth quarter results released today disclosed unlevered cash flow (Ebitda) meeting our expectations of three months ago, helped by growth in oil and gas volume of 5% compared to fourth quarter 2008 and 3% compared to third quarter 2009. Management expects volume growth in 2010 of 5-8%, which would be better than our projection and would possibly warrant an increase in estimated NPV.
A new discovery in California, announced with second quarter results, is contributing to rising natural gas production in that state. Chairman Irani emphasized on the earnings call that year-end reserves, to be reported in a few weeks, will show that 200% of production has been replaced. Meanwhile the trend for oil, 82% of the value in OXY, continues up with futures prices for the next six years at $84 a barrel compared to the 40-week average of $81. OXY stock is also above its 200-day average of $73 a share, which defines an uptrend by that measure.
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Kurt Wulff (McDep Associates) submits:
Buy-recommended ConocoPhillips (COP) offers unlevered appreciation potential of 65% to a McDep Ratio of 1.0 where stock price would equal Net Present Value (NPV) of $105 a share. Fourth quarter results released today matched our estimates from three months ago for unlevered cash flow (Ebitda) while exceeding both the third quarter 2009 and fourth quarter 2008.
Lower than expected costs in the strengthening upstream segment helped offset a loss in the cyclically weak downstream (other) segment. NPV appears well supported by cash flow and reserve life in our valuation of COP in an industry context. Put into the McDep Ratio framework, COP appears to be the most undervalued of large cap North American and European stocks in our coverage.
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David Brown submits:
If the bulls had been paying attention to the economic indicators reported last week, you’d assume the market would be down substantially by now. The fact is, however, that the S&P 500 is just down about -0.4% for the past calendar week, and Monday it was up over a full percent. Obviously, the bulls didn’t see the surprising drop in Consumer Confidence, which fell to 46.0 from 56.6 in January, its lowest reading since early last year. Moreover, the lesser known Present Situation Index fell to 19.4, its lowest level in 27 years (which was in February 1983 when it was at 17.5).
The bulls also seemed to have missed a couple of other negative numbers: New Home Sales, 309K instead of 360K and Initial Jobless Claims, 496K vs. 460K. And their heads were buried somewhere other than The Wall Street Journal this morning when the stream of negative numbers continued: Personal Income, 0.1% vs. an expected 0.4%; Construction Spending, down 0.6%; and the ISM Manufacturing Index for February, 56.5 rather than the expected 57.9.
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Davy Bui submits:
THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET
- Enlightened-American Portfolio: +0.8% through Feb, 2010 (my actual IRR, including cash balance)
- DJIA: -1.0%
- Nasdaq: -1.4%
- S&P 500: -1.0%
- DJ Wilshire 5000: -0.4%
- Russell 2000 (smallcap): -0.9%
February was a sedentary month for us here at Enlightened American. Sometimes, indeed most times when dealing with investing, doing nothing is the best course of action and for that, we are in positive territory for the year, a feat not managed by any of the major indices we track.
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What should investors take from yesterday’s action and decision from OSI Pharmaceuticals (
OSIP)?
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Investing, Long Term Investment, stock market | admin March 2, 2010 | 
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