ETF Database submits:
With the passage of the sweeping health care reform late Sunday night, many investors are scrambling to determine which sectors are likely to benefit from the new legislation. Although the timing and impact of changes remains to be seen, generic pharmaceutical firms will likely emerge as one of the big winners. Many big name drugs are going off patent very soon and will be open to the generic market. Popular drugs Cozzar and Flomax will lose their patents this year, and Lipitor, the best selling drug in the country, will lose its patent in 2011. Plavix will follow soon after. While this is a negative development for Big Pharma, it should be good news for consumers and generic manufacturers, which will be able to quickly gain market share. 
More importantly, more than 30 million previously-uninsured Americans will now have coverage (and will probably be encouraged to buy generics whenever possible in order to keep costs down). The Motley Fool also makes an interesting point on the subject, noting that “unlike lifesaving medicines, which may be one-time charges, it’s easy for uninsured patients to justify skipping a prescription when the benefits are years away and the drugs have to be taken daily.” Now that the drugs will be covered by insurance, those in need will be less likely to forgo them, further boosting generic producers’ profits. Both of these developments should be good news for generic drug manufacturers who could experience a boom in sales if the overhaul proceeds as planned.
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Rising Dividend Investing submits:
Wells Fargo’s (WFC) stock appears to be trying to break to a new high. Could this possibly mean that Wall Street is underestimating their earnings over the next couple of years?
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Jim Van Meerten submits:
For my
Financial Tides portfolios I was using
Barchart to screen for some new stocks and on the top of my screens came 2 hotels: Host Hotels & Resorts (
HST) and Starwoods Hotels & Resorts (
HOT). If I’m on Bing and trying to make a travel reservation I have to pick one or the other but how about when I’m investing? How do I choose?
Let’s take them one at a time with my normal analysis:
Host Hotels & Resorts had a price appreciation in the last 30 days of 27.32%. It hit new highs on 17 of the last 20 trading sessions and was 4 for 5 recently. On Barchart, 13 of the 13 technical indicators signal buy for a 100% technical rating.
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Brian Kelly submits:
We have highlighted the unusual negative swap spread relationship in the fixed income market. The inversion continued down the curve to the 7 year maturity – which makes the 7 year auction even more important. The message from the markets is clear – Uncle Sam is a worse credit than those evil CEOs. Taking a step deeper into the pool, we view the strength in swaps (lower yield) as a sign investors are still betting the Government is the ultimate put option.
Has the Greenspan Put Become the Bernanke Put?
While Alan Greenspan was Chairman of the Federal Reserve, his monetary policy was affectionately referred to as the Greenspan Put. As a refresher, the Greenspan Put referred to the Chairman’s inclination to respond to every economic hiccup with a rate cut. Some have argued (and we would not push back) that the Greenspan Put was part of the reason risk was embraced and consequences were ignored – if the Fed was always there to catch the markets fall then why not buy!
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Stone Fox Capital submits:
Finally, the merger between AerCap Holdings (AER) and Genesis Lease (GLS) will be finalized today, creating the largest independent airplane leasing company. It also creates an earnings powerhouse. For 2010, they expect to earn well over $2/share with the stock trading below $11 now. A P/E of 5 is absurd now that global growth has returned and most of their customers should see growth even in the US market. Not to mention that 5 years earnings growth is placed at 12.5%, meaning a fair valuation would be around $25.
The finalization of this merger should hopefully bring much more focus to how cheap the combined entity remains. Both stocks have rallied big time since the March 2009 lows, but they still remain insanely cheap on a historical basis. The risks of airlines going bankrupt is greatly reduced now that the financial crisis is largely over. Also, the inability of Boeing (BA) to produce its new plane has helped reduce the competition for their existing planes. It will now be years before those new planes reach a critical mass.
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Zacks.com submits:
Leading flash memory producer and hard disk manufacturing company SanDisk Corporation (SNDK) has declared that a leading Chinese manufacturer of portable computers, e-book readers and other consumer electronics products named Malata; Wanlida Group Co. Ltd, has selected SanDisk’s 16-gigabyte (GB) pSSD modular solid state drives (SSD) Gen2.
This product will be used by Malata, in its new pocket design netbook, with dimensions of 256X27X143mm and an 8.9 inch LCD screen. So netbook is a newly growing area, with a potential to offer major growth in the coming years.
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Carl Pasternak submits:
I grew up in New York City, not far from the waterfront. As a special treat, my father would take me to the piers off Atlantic Avenue in downtown Brooklyn.
There we would stand and watch with amazement as forklifts unloaded heavy packages of cement and grains from gigantic ships that had just arrived from faraway places.
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Zacks.com submits:
We are upgrading Energizer Holdings, Inc. (ENR) to Neutral from our previous Underperform rating, indicating that it will continue to perform in line with the market. The target price of $66.00 is based on a P/E multiple of 12.5X our 2010 EPS estimate.
Energizer Holdings’ first quarter earnings beat the Zacks Consensus Estimate on higher sales of batteries and razors and increased cost cutting. We also remain upbeat about ENR’s personal care division. The feminine and infant care businesses are still struggling, as both Johnson & Johnson (JNJ) and Gerber Scientific Inc. (GRB) play a significant role in the infant care segment.
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Zacks.com submits:
Recently, Human Genome Sciences Inc. (HGSI) announced interim results on hepatitis C candidate Zalbin from a mid-stage study. The study evaluated the safety and efficacy of Zalbin. The results revealed that a monthly dose of Zalbin was as effective as a weekly dose of Roche’s (RHHBY.PK) Pegasys (peginterferon alfa-2a), which is the current standard of care.
The study combined Zalbin with ribavirin in 391 treatment-naive patients infected with genotypes 2 and 3 hepatitis C. Full results from the study are expected to be presented later in the year.
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Veronique Adam submits:
Stock price: $74.2
Conclusion: Good resistance in Q3. We are slightly upgrading our valuation range to $72-$77 in light of improved worlwide future orders. Nonetheless, our pricing range suggests that Nike (NKE) stock price looks close to its fair value.
Q3 results: sales up 7% reported (+2% organic-down 3% 9m), EPS adjusted up 2%, slightly down 9m. Guidance F10: Revenue slightly below last year levels, higher gross margin, low single digit increase in SG&A.
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Value Expectations submits:
In yesterday’s article on ValueExpectations.com we discussed the solid month of February for the retail segment as most retailers posted better-than-expected same store sales growth. The question we posed was whether or not this was sustainable growth, or just a small temporary boost caused by easy comparisons and tax refunds.
The conclusion that we come to is that it is not the time to rush out and buy retail companies but to proceed with caution as the “easy money has likely been made in the retail sector.” However if you are an investor that is actively pursuing positions from within the retail industry, we have provided a few retail names that look attractive (6) and unattractive (6) based on criteria that The Applied Finance Group (AFG) uses in its stock selection process.
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While running some new value screens recently, I came across KSW, Inc. (KSW), a company that furnishes and installs heating, ventilation, and air conditioning (HVAC) systems and process piping systems for institutional, industrial, commercial, residential, and public works projects. The company is based in Long Island, NY, and its revenue is concentrated in New York City. Given the economic downturn, revenue and earnings have fallen precipitously, and the outlook for residential and commercial projects looks bleak. That is the bad news.
The good news is that KSW’s balance sheet, flexible cost structure, and strong backlog suggest the company is resilient enough to withstand the near-term challenges and could potentially surprise to the upside this year. As of 12/31/09, net cash totaled $14.75 million, which equals approximately 65% of market cap. In addition, the company is profitable, earning $0.20 in a cyclically depressed year (revenue declined 31% in FY 09). Further, it managed to almost double backlog (from $62.5 million to $121.5 million), suggesting the company is continuing to provide value-add to its customers.
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Brandon Matthews submits:
By Brandon Matthews
Some very good news from Chrysler Wednesday morning as the company announced that it is expecting a 50% jump in its U.S. March retail sales. This is certainly a positive development for Sirius XM Radio (Nasdaq: SIRI) on several fronts. Let’s face it, if Chrysler retail sales are up that much it is more likely than not that other OEMs will be up by a similar percentage, if not more. Chrysler fell short of providing details of total monthly sales.
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Let’s start with a basic assumption, the “fundamentals” and financial markets do not always move congruently. At the present time, I get the sense that a significant portion of investors involved with, or who follow, base metals are quite skeptical of the prices and performance within the complex. A few variables these skeptics get focused on are supply growth and a total lack of demand.
Skeptic Supply Argument: supply growth will exceed demand growth. I will candidly admit I have no idea about the time frame these folks are focusing on. It is possible that supply growth could outstrip demand growth in 2010 (although I doubt it), and of course should this theory come to fruition the basic metals may face some headwinds…but does that automatically make it the norm? Not a chance. I have previously posted an article on the notoriously over-optimistic supply expectations in this industry which can be seen by clicking here.
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Ockham Research submits:
Paychex Inc (PAYX) provides payroll and human resources services to small and medium sized business, and the tough employment market has obviously put a drag on results for the past year. The company serves more than half a million businesses around the globe, but experienced declining revenue recently due to small businesses not hiring and in some cases going out of business. However, many economists have become bullish on the labor market as the weather gets warmer and the economic recovery continues ahead, and it’s not just because of the temporary hiring of census workers (so they say). We make no predictions about the labor market, but if you agree with the optimistic outlook on jobs that is permeating much of Wall Street then Paychex would be a smart way to play this trend.
The company reported third quarter earnings on Wednesday afternoon that came in 1 cent ahead of consensus expectations with EPS of $.34 excluding one-time charges, which trails last year’s results by 2 cents per share.
However, the stock is indicated slightly lower in after hours trading because revenue of $508 million was just shy of analysts’ expectations, falling 3.9% from a year ago. Their client base declined by 2.1% thus far in fiscal 2010. Given the continued bleed of jobs that occurred over the last year, it is not hard to imagine that comparisons to last year could have been much worse. Despite the decline in fundamentals, we think the stock represents attractive value for investors looking to take advantage of improving employment trends.
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Investing, Long Term Investment, stock market | admin March 25, 2010 | 
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