Wall Street Cheat Sheet submits:
By David Gibbs
Apple Inc. (AAPL) requires little introduction. The designer, manufacturer and retailer of consumer electronics is both a household name and often the apple of Wall Street’s eye. Always the toast of the town for one reason or another, the fast-approaching release of the iPad has been the company’s primary source of momentum as of late.
After trading from the mid-180’s up to about $215 as the last decade came to a close, AAPL began forming a base on January 6th. This base, which turned out to be a cup-without-handle, took about eight weeks to form. This is comfortably above the six to seven week minimum that we would typically like to see. Shares finally broke out on strong volume on March 5th on news that the iPad would be released earlier than the Street had originally expected.
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Mark Riddix submits:
Time Warner Inc. (TWX) appears to be making all of the right moves. The media conglomerate posted strong 4th quarter results with revenue of $7.3 billion dollars and earnings per share of 55 cents. Time Warner announced that it would be raising its dividend to 85 cents per share and buying back an additional $2 billion dollars in stock. Time Warner looks attractive now that the company is no longer held back by its horrific merger with AOL.
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John Middleton submits:
John Middleton, CFA, CAIA joined Clinton, NJ based Brighton Financial Planning in August 2008 and assumed ownership in February 2010. Prior to Brighton, John spent 7 years with the Invesco Quantitative Strategies Group as a Senior Director and Client Portfolio Manager. While with IQS, John was responsible for over 50 clients worldwide with more than $2.5 billion in assets under management.
Seeking Alpha recently had the opportunity to ask John about his current asset allocation and perspective on opportunities in this market.
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Rick Konrad submits:
The Pantry just received a mention in a blog that is part of Toronto’s Globe and Mail, essentially Canada’s version of the Wall Street Journal.
The article, On the Hunt for ‘the king of value factors‘ highlights price to sale ratios. At the top of the list is The Pantry.
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The Gold Report submits:
"The case has never been better for having a position in precious metals as a store of value," says Mike Niehuser, founder of Beacon Rock Research, LLC, especially in light of increasing amounts of government debt. In this exclusive interview with The Gold Report, Mike talks about his goal of finding mining stocks with good management and assets with defined pathways to value creation and two in particular that he’s keeping an eye on that "have excellent exploration upside."
The Gold Report: Mike, has your outlook for precious metals changed given the recent strengthening of the U.S. dollar?
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Rick Konrad submits:
"You can’t buy what is popular and do well" is one of the great Warren Buffett quotes. Even though over time, I have learned to be far more comfortable investing in quality businesses that throw off lots of free cash flow and earn superior returns on invested capital, many value investors start their search for cheap stocks with the new low list and those that are making news headlines that portray disappointment. Contrarianism does work; as Buffett says, there are many ways to get to "financial" heaven. As is obvious, the real challenge for us as investors is separating those businesses that have been unfairly beaten down because of Street overreaction from those that truly deserve to be disregarded and ignored. "Moribund and poorly run businesses deserve to languish" as the great mutual fund investor, John Neff once described.
So how do you separate these businesses? For many years, academics focused on low price to book value companies (or put another way, high book to market companies) as a place to seek superior returns. As it turns out, these companies demonstrated an anomaly to the prevailing capital assets pricing theory. Subsequent analysis showed that a low price to book value ratio implies that prices contain expectations of low ROE expectations. Such companies, at current prices are generally expected by the consensus to be poor performers and therefore considered risky.
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Jeffrey Saut submits:
Excerpt from Raymond James strategist Jeffrey Saut’s latest essay (published Monday, March 29th):
…Interestingly, [our] institutional accounts want to know what retail accounts were “doing,” while the retail accounts want to know what the institutions were doing. Accordingly, at least from my observations, order flow from retail investors suggests that they have under-played the current equity rally and are instead buying bond funds. In fact, ~70% of retail order flow into mutual funds has been into bond funds, and not short-term oriented bond funds, but long-duration bond funds.
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Value Expectations submits:
The Applied Finance Group’s (AFG’s) valuation techniques have proven successful at identifying mispriced securities. Clients use the tools built by AFG to identify investment opportunities in order to outperform their benchmarks. Normally when searching for attractive investment opportunities, AFG uses, along with Valuation, a combination of proprietary variables that include Economic Performance (EM), Management Quality, and Earnings Quality. Although our valuation variable (Value Score) works best in concert with our other proprietary variables, AFG’s valuation metric also works well on its own.
For those investor’s who focus on small to mid cap stocks from the Russell 2000, we have provided a list of companies with the most attractive valuations within the index.
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Market Folly submits:
In the past we posted David Einhorn and hedge fund Greenlight Capital’s investor letter. In it, we learned that Einhorn was bullish on shares of Vodafone (VOD) as it represented one of the larger positions in Greenlight’s portfolio. Greenlight Capital of course has an impressive track record, returning 22% annualized. Einhorn’s thesis on Vodafone argues that VOD’s most valuable asset is its 45% ownership stake in Verizon Wireless. (Verizon Communications (VZ) owns the other 55%).
Previously, Vodafone had received a dividend from Verizon Wireless. However, it hasn’t received one in quite some time as Verizon Wireless’ cashflow was being used to pay back debt to Verizon Communications. Verizon Wireless is expected to be debt-free by the end of next year and this is where the catalyst component of this investment comes in. Einhorn believes the restoration of this Verizon Wireless dividend or some other transaction is highly likely. And as you’ll find out below, this may very well be the case.
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Value Expectations submits:
Barron’s is a well-respected, widely-publicized weekly newspaper that covers U.S. financial information, market developments, and relevant statistics. Each issue provides a wrap-up of the previous week’s market activity and news reports, as well as an informative outlook on the week to come. An interesting piece within Barron’s that garners special attention each week is their interviews of well-known fund managers (who often manage over 1 Billion in A.U.M.), which gives their best stock picks.
According to a 1994 study by Gary Banesh and Jeffrey Clark from The Journal of Financial and Strategic Decisions (The Value of Indirect Investment Advice: Stock Recommendations in Barron’s (.pdf)), stock picks from Barron’s weekly Money Manger Interview outperform the market. The success of the picks from Barron’s is likely due to the fact that each fund manager provides one pick, which is usually a holding in their fund, and the success of that pick could bring their fund new investors. Therefore, there is plenty of incentive for these managers to get their best picks in front of the public’s eyes via Barron’s.
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David Brown submits:
The market continued to inch ahead Monday, with the S&P 500 taking another aim at the 18-month high of 1180 which it reached last Thursday before backing off a bit on Friday. The only thing nudging the market forward seems to be the lack of anything really negative. The economic releases over the past week and Monday were either at or slightly above projections, and we seemed to have dodged the bullet on a couple of portentous events.
For example, the poor consumer sentiment reading by the Conference Board in February seems to have been anomalous, and it appears that progress is being made in the Greece-related problems in Europe that will likely preclude any long-term negative effect.
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Zachary Scheidt submits:
ISRG)” hspace=”6″ vspace=”6″ width=”216″ height=”106″ />Medical stocks have received more than their fair share of attention in the past few weeks as congress passed the health care reform bill. While I see the bill as a major impediment to free commerce – Note AT&T Inc. (T) $1 billion dollar charge related to healthcare – there are still many medical companies which will continue to experience growth and opportunity in the coming years. Best of all, some of these investments are trading at discounts to a “fair market value” due to concern over what healthcare reform will look like.
Intuitive Surgical (ISRG) has put in a very strong performance with the stock up more than 250% since this time last year. The company makes robotic equipment for Minimally Invasive Surgery (MIS) procedures and has expanded the number of procedures and the quality of service that physicians can offer patients. The daVinci Surgical System employs cutting-edge (no pun intended) technology which is assisting surgeons around the world.
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Timothy Lutts submits:
Today’s tip is about an unknown stock with big growth potential.
It’s Cimarex Energy (XEC), and here’s what editor Michael Cintolo wrote about it in a Cabot Top Ten Report three weeks ago.
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Paul Price submits:
Constellation [CEG: NYSE - $35.50] is the holding company for Baltimore Gas and Electric, the regulated supplier of those commodities to about 1.1 million electric customers and about 640,000 natural gas consumers. They also own the non-regulated Constellation Energy Commodities Group and Constellation NewEnergy.
It’s been a wild ride for CEG shareholders over the past five years as the merchant energy trading arm first made great profits and then nearly bankrupted the company from 2008’s huge energy price rise and fall. Liquidity needs skyrocketed due to the extreme volatility and CEG’s traders being on the wrong side of the markets. Constellation shares plunged from an early 2008 high of $108 to a panic low of $13 in the fall when the financial markets froze after the Lehman collapse.
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Investing, Long Term Investment, stock market | admin March 30, 2010 | 
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