Tom Armistead submits:
Travelers (TRV) is a value stock where the catalyst is already visible. At a recent price of 51.42 it trades at TTM P/E of 7.9 and a P/B of .96. Earnings of 1.25 for 1Q 10 met guidance, in spite of heavy weather related catastrophe claims.
The company says they may come out of the recession with more business customers than they had at the onset. Premium to surplus stands at about one to one, and there is 3 billion of capital in the holding company, much of it available to fund share repurchases at favorable prices. As business customers experience recovery, increased written premiums will be forthcoming. The earnings conference call was upbeat on these and other issues.
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Brian Polino submits:
It was only after traveling across the heartland of America that I recognized the true value of a durable competitive advantage. On my way to the Berkshire Hathaway (NYSE:BRK.A) Annual Meeting, it was hard not to see a Coca-Cola (NYSE:KO) distribution truck every time you scanned the road’s horizon. After witnessing this firsthand, I wanted to immediately buy the stock as KO obviously benefitted from supreme economies of scale. Most investors flock to what seems to be the next high growth company, such as Amazon (NASDAQ: AMZN) or Apple (NASDAQ: APPL). However, these companies operate in a highly competitive industry where market share can be easily gained or lost. Coke’s biggest competitor is Pepsi (NYSE: PEP) and after a closer look, it seems more like friendly competition than a fierce fight for market share. Perhaps you need to look no further than Coke for the next high growth stock.
Franchise value, economies of scale, and durable competitive advantage all essentially translate to the same thing, which is operating with a wide economic moat to ward off competitors. Warren Buffett, an owner of Coke common stock, likes to invest in companies that operate with a wide and ever-expanding economic moat that makes it impossible for competitors to gain valuable market share and industry growth.
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We have been closely following Dendreon (DNDN) since back in 2003 when they had their first successful Phase 3 results for their immunotherapy treatment for prostate cancer, then known as sipuleucel-T.
Provenge, as it is now called, was finally approved by the FDA Thursday. Provenge is a whole new paradigm for treatment: instead of directly attacking the cancer, it "trains" the body’s own immune system to do the job. So far, Provenge has only been tested in men with advanced cancer (and weaker immune systems) and the fact that it positively effects survival in that population could be an indication that it may be even more effective when given to earlier-stage patients (with stronger immune systems).
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Jake Berzon submits:
First and foremost in my thinking these days is relative market risk of any position in my portfolio. What I see as high valuations have prevented me from opening any new equity positions so far this year and for much of 2009. In fact, before Exelon (EXC), my sole purchase this year has been that of iShares Barclays 20+ Year Treasuries Bond ETF (TLT) on February 11th, 2010 at $90.12 and I see it as insurance against a declining stock market and troubles in the eurozone.
April 28, 2010 was a day filled with important events for the market. No big bombs being dropped. Nothing like the previous day’s market shocking S&P downgrades of Greece’s debt from investment grade down to junk and Portugal’s debt by two notches. (Everyone knew this was coming and more of these sovereign debt downgrades are certainly on the way.)
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Davy Bui submits:
It’s been awhile since I’ve commented on Penn West Energy Trust (PWE) — these days, I save my stock specific analysis for Enlightened American Premium members — but I have blogged a bit about PWE in the past and so will share some brief comments.
The arrival of Murray Nunns has definitely invigorated Penn West on the operational side. F&D costs are down, reserves are being defined and exploration prospects are being put in clear focus, with three promising plays being primed for horizontal drilling. The company reduced debt by over $1B as well so Nunns has undoubtedly made positive changes at the company. PWE has also made a key strategic shift to more oily/liquids production in a very weak gas market, with 69% of proved reserves in the oil category.
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David White submits:
After writing an article about the attractiveness of Brazilian bonds, a comment on the article suggested many might be interested in the WisdomTree Dreyfus Brazilian Real ETF (BZF). A quick look at the 2-yr. chart tells one that this BZF ETF is indeed worth an investor’s interest (see below).
click to enlarge
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The Moneygardener submits:
Ho hum…Johnson & Johnson (JNJ) has increased its dividend for 2010 by 10.2%. The stock has essentially gone nowhere over the past 8 years – since 2002. However:
Earnings per share have doubled over this period (See latest earnings call transcript here).
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Dr. Stephen Leeb submits:
The earnings season excitement continues, with companies largely beating Wall Street estimates. Our recommendations have been no exception, so far. However, besting estimates doesn’t necessarily mean that a stock will rally – and this quarter we’ve seen many companies report impressive results for the period, only to see the stock fall in the subsequent market session.
One such example is cell phone chip-maker and Growth Portfolio member Qualcomm (QCOM), whose stock has been on a rollercoaster ride since the company’s last quarterly report in January. In that instance, the company reported a solid quarter, but its guidance (based on weaker demand from Europe), left something to be desired in the eyes of analysts. We agreed, but saw the short-term weakness in the stock as a buying opportunity. A couple months later, the company revised its guidance – essentially back to its original forecast – based on better than expected demand from its developed economy markets. The stock, as you might expect, gapped up.
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Dr. Stephen Leeb submits:
The earnings season excitement continues, with companies largely beating Wall Street estimates. Our recommendations have been no exception, so far. However, besting estimates doesn’t necessarily mean that a stock will rally – and this quarter we’ve seen many companies report impressive results for the period, only to see the stock fall in the subsequent market session.
One such example is cell phone chip-maker and Growth Portfolio member Qualcomm (QCOM), whose stock has been on a rollercoaster ride since the company’s last quarterly report in January. In that instance, the company reported a solid quarter, but its guidance (based on weaker demand from Europe), left something to be desired in the eyes of analysts. We agreed, but saw the short-term weakness in the stock as a buying opportunity. A couple months later, the company revised its guidance – essentially back to its original forecast – based on better than expected demand from its developed economy markets. The stock, as you might expect, gapped up.
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Paul Price submits:
Black Box Corporation [NDAQ:BBOX - $31.72] is a leading worldwide provider of technical network services and related products to businesses of all sizes. They also offer over 90,000 products through their mail-order catalogue. Black Box prides itself on providing unparalleled levels of technical support. The Black Box brand has earned a reputation for high quality and reliability. BBOX serves customers through its physical presence in 40 American states and 141 countries worldwide.
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Value Expectations submits:
The market environment over the last few years has been muddled by many things including but not limited to corporate scandals, major bankruptcies and the overall effect of the recession. These recent events have been a constant black cloud over the confidence investors have in the markets as well as in individual companies in Corporate America. Investors tend to find some solace in their investments when the company proves to be reliable and transparent in their management as well as accounting practices.
Avoiding companies that make poor management decisions and that tend to experience earnings blow-ups are one of the major advantages experienced by clients of The Applied Finance Group (AFG). AFG has an expertise in understanding management’s strategies and its ability to create wealth for shareholders, as well as an expertise in looking beyond traditional accounting numbers to see the true profitability companies earn.
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Cliff Wachtel submits:
A Summary Of Likely Outcomes For Greece, The Piigs, And The Euro
Background
Throughout last week, CDS spreads on Greek and other PIIGS bonds were already continuing their rise.
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Toby Shute submits:
The tragic events surrounding Transocean‘s (NYSE: RIG) Deepwater Horizon rig are certainly going to overshadow any of the earnings reports coming out of the sector. Even so, it’s worth checking in on two of the top operators in the space to see how the offshore drilling market is shaping up for 2010.
Noble (NYSE: NE) described the current environment as "somewhat challenging," with 14 jackups repricing at an average of 19% below their previous contract terms. Fortunately, Noble has a group of deepwater rigs working at premium rates for clients like Noble Energy (NYSE: NBL) and ExxonMobil (NYSE: XOM) that cushion the effects of the weakened shallow-water drilling market. You can imagine how jackup-only contractors like Seahawk Drilling (Nasdaq: HAWK) are faring.
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Invest With An Edge submits:
By Brandon Clay
If your goal is to generate income, you’ve spent a fair amount of time looking for dividend-paying stocks. It makes sense. There are plenty of solid companies on the market today with admirable histories of paying out dividends, and most investors have heard about these companies. We recently covered one of them (3M), but another type of stock offers perhaps the best and most reliable dividends on Wall Street: Master Limited Partnerships or “MLPs.”
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Brad McFadden of the Daily Trading Report manages a global macro proprietary fund that’s essentially “looking for beta rather than alpha.” They’re looking to ride primary trends of major asset classes with about half of their capital, and look for deep value or overvalued situations in global sectors or themes (not individual stocks) with the other half – with exposure gained primarily through ETFs and LEAPS options.
Without third-party investors, he says, “we’re not bound by the unspoken requirement to produce positive returns on a quarterly or even semiannual basis. Perhaps this is why we are not scared to look to sectors/markets that are completely out of favor.”
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Investing, Long Term Investment, stock market | admin April 30, 2010 | 
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