Friday, September 10, 2010

8 Value Stocks With Increasing Dividends

There has been a plethora of posts about dividend stocks lately. Quite a few have pointed out that many stocks that offer dividends now yield more than Treasuries or corporate bonds. Others tout the advantage of dividends being able to add to total return in a choppy, range-bound market. For a good round up of the latest articles on this topic, you can visit the Investing Ideas page at Seeking Alpha and check out the section on dividends.

The following list is from this weekend's screen of those stocks that just raised their dividend last week and yet are still more or less in the value stock category. (more)

Symbol Name New Dividend Yield New Annual Dividend Old Annual Dividend
ACGY Acergy S.A. 1.24% 0.21 N/A
BOBE Bob Evans Farms, Inc. 2.91% 0.80 0.72
ESLT Elbit Systems Ltd. 2.30% 1.18 N/A
SSI Stage Stores, Inc. 2.49% 0.30 0.20
MGPI MGP Ingredients, Inc. 1.36% 0.10 0
HRS Harris Corporation 2.28% 1.00 0.88
PZE Petrobras Energia Participaciones SA 3.70% 0.57 0.35
SPIL Siliconware Precision Industries Company, Ltd. 6.21% 0.30 N/A

The Fat Lady Just Sang Another Bar For The Treasury Rally

The Mad Hedge Fund Trader,

The Treasury bond market is certainly doing its best to roll over like the Bismark, the 30 year closing on the lows, 5 ½ points off its highs two weeks ago, boosting the yield back up to 3.81% (click here for my last piece, "Have Treasury Bonds Had It?").

Like a good Agatha Christie mystery, there are culprits hiding behind every set of drapes. Maybe it was the immense amount of debt the government brought to the market in the past two days as part of its regular refunding operations? Perhaps it was the surprise fall in initial jobless claims today from 477,000 to 451,000?

The smoking gun might even be found in Obama's hand with his $50 billion infrastructure spending project and proposed capital investment tax cuts. Sure, $50 billion amounts to little more than the change found under the sofa cushions in Washington these days. But it might just be the stick that finally broke the horribly burdened camel's back.

You knew the end was near with prime corporates, Like Hewlett Packard (HPQ), suddenly floating 100 year debt issues. The big call here is whether we have put in the definitive spike top in the Treasury market, or if we have established a new, higher trading range. A September sell off in equities, even a little one, would without a doubt make the case for the latter. It looks like someone just gave the short ETF (TBT) a shot of Viagra. Stay tuned for the next act.

Should You Buy a House Now?

By David Galland, Managing Editor, The Casey Report

Recently, we have had a number of queries about real estate. And no wonder. For starters, real estate prices have come down. Plus, in an environment with next to zero interest rates, the idea of possibly picking up some income-producing property on the cheap holds a certain appeal to some. Then there’s the fact that real estate is very much a “tangible” – and so should hold up reasonably well, should the fiat currency system come undone, as we expect it will before this crisis is over.

The following, from reader and correspondent Ross, considers the issue of home buying from an interesting angle.

    My wife and I have been considering buying/building a house for a while now. After long months of searching, we have had to ask ourselves about the "value" of a home. I say this because my parents in 1972 purchased a 2, 000 sq/ft home for $20,000. That was almost exactly what my father made per year at his job at the time of purchase. Is this ratio one to consider as a prudent homebuyer not trying to live beyond his means? I make about $150,000 a year and can't imagine purchasing a house here in Pittsburgh for that price and being happy with that purchase.

    My parents sold their home in 2001 for $180,000, which is obviously 9 times what they paid for it. We are looking at homes in the low 300s to purchase, and I can't imagine the sales price in 30 years being 9 times that price, which would be $2.7 million! So do you see my line of thinking?

    Could hyperinflation cause the price to "appreciate" that same way over time? Is inflation what caused my parents home to return 9 times what they paid for it? The reason I wrote to you regarding this topic is that I thought maybe there was a future missive buried in this line of thinking. Maybe not, but if you have time I would love to hear your thoughts on home purchasing at this time. (more)

BNN: Top Picks

BNN speaks to John Zechner, chairman, J. Zechner Associates shares his top picks.

click here for video

Dow Theory: The Formation of a Line

According to Dow Theory, the formation of a line, the stock market trading in a narrow range, typically portends a major movement in the market once the range is broken through on the upper or lower end of the channel it has traded in. To be specific, Dow Theory indicates that a line is created when both the Dow Jones Transportation and Industrial Averages are in a range of 5% over a period for 8 weeks or more.

In the charts below, neither index has exhibited a narrow range of 5% or less. In addition, from a strictly technical basis, it would be difficult to say that a range has not been broken on the upside in March and April of 2010 for the Dow Jones Industrial Average or the downside in July 2010 for both indexes. However, it is challenging to ignore the general range of 10,700 to 9,750 that the Dow Industrials has traded in since late September 2009. Likewise, the Transportation index has traded in a fairly tight range since mid-May 2010. (more)

Precious Metals Equity Index Form a Triple Top, What’s Next?

Gold, Silver and PM Stocks On Edge

I am going to step out on a limb in this report and cover what I think to be an intermediate top in the precious metals sector. Everyone I speak with and from the hundreds of emails I get I would say the vast majority are bullish on gold and silver. That being said, I feel we are 3-8 days away from a pop and drop in the price of gold.

Below are my explanation and charts of what I think is unfolding.

HUI – Gold Bugs Index

This chart tracks a basket of gold companies and can be used as a leading indicator for gold bullion at times. This index tends to lead the price of gold before rallies and also during declines. I have seen this lead by a few hours and even up to 7 days. I find it out perform when gold is about to rally, and under perform when gold is topping or about to start another move down.

It looks as though we are forming a triple top which also happens to be at a previous 2009 resistance level. Each time this level has been reached sellers take control and send the market sharply lower. There have been several long upper wicks formed in the past few sessions telling me that buyers are pushing the price up, but sellers hit the sell button pulling the market right back down. If this triple tops plays out, I would expect a multi month correction to take place. (more)

Dividends Beating Bond Yields by Most in 15 Years

More U.S. stocks are paying dividends that exceed bond yields than any time in at least 15 years as profits rise at the fastest pace in two decades.

Kraft Foods Inc. and DuPont Co. are among 68 companies in the Standard & Poor’s 500 Index with payouts that top the 3.80 percent average rate in credit markets, based on data since 1995 compiled by Bloomberg and Bank of America Corp. While Johnson & Johnson sold 10-year debt at a record low interest rate of 2.95 percent last month, shares of the world’s largest health products maker pay 3.68 percent.

The combination of record-low interest rates, potential profit growth of 36 percent this year and a slowing economy has forced investors into the relative value reversal. For John Carey of Pioneer Investment Management and Federated Investors Inc.’s Linda Duessel, whose firms oversee $566 billion, it means stocks are cheap after companies raised payouts by 6.8 percent in the second quarter, data compiled by Bloomberg show. (more)

Musante: Look for Undervalued, Oily E&P Plays

C. K. Cooper Senior Analyst Joel Musante likes oily exploration and production (E&P) names in name-brand plays, especially the Bakken. In this exclusive interview with The Energy Report, Joel discusses a few of his favorite names with underappreciated acreage or technology and talks about how he reaches his conclusions.

The Energy Report: Joel, you've covered E&P companies for more than a decade for various firms. Tell us how you started covering this sector and why you're still doing it 10 years later.

Joel Musante: I started covering the sector when I was with W. R. Huff Asset Management after getting my MBA. At Huff, I was a credit analyst, and I performed due diligence on private equity deals. I think this provided a sound foundation for doing any kind of financial analysis. The E&P sector is probably one of the more exciting sectors to cover. Although economic growth may have slowed in the U.S., the emergence of China and India and some of the other Asian economies has us asking how we're going to meet all this future energy demand. For oil and natural gas, the E&P companies have probably been the best at answering that question, as opposed to the majors.

TER: How so?

JM: If you look at some of the big shale plays that have emerged recently—the Haynesville and the Bakken—the leaders in those plays have been the E&Ps. Chesapeake Energy Corp. (NYSE:CHK) put the Haynesville play on the map a couple of years ago. And then EOG Resources (NYSE:EOG) and Brigham Exploration Co. (NASDAQ:BEXP) were on the forefront on the east and west frontiers of the Bakken Shale. Those were among the biggest new shale plays out there. (more)

10 Top-Ranked Stocks with Big Upside

TheStreet Investment Analyst

The S&P 500 Index has rallied 5 percent in September as improving economic data reassured investors. The long fixed-income, short-stocks trade appears to be unwinding.

Individual investors that need equity exposure should consider the following 10 stocks; they get the highest aggregate ratings from analysts and are expected to make big gains in the weeks ahead. They are ordered by sentiment, from bullish to most bullish.

10. G-III Apparel [GIII 29.97 0.07 (+0.23%) ] designs outerwear and sportswear apparel. G-III swung to a fiscal second-quarter profit of $3 million, or 16 cents a share, as revenue grew 39%. The operating margin turned positive. G-III's stock trades at a trailing earnings multiple of 12, a forward earnings multiple of 10 and a book value multiple of 2.4 — 36%, 39% and 32% discounts to peer averages. Its PEG ratio, a measure of value relative to predicted long-run growth, is 0.3, signaling a 70% discount to fair value. Piper Jaffray expects the stock to gain 34%, to $40. (more)

Dennis Gartman: Gold to Hit New Highs?

Gold will likely hit new highs, said commodities trader Dennis Gartman while speaking on Tuesday's "Fast Money Halftime Report."

Gartman said there are concerns raised that the monetary authorities could be too aggressive in adding reserves and monetizing debt. The euro experienced pressure because of disregard for the bank stress tests throughout Europe. It bounced, but is heading down. Gold, therefore, has become the third largest reservable asset in the world behind the US dollar and euro.

*It's worth noting that during Fast at 5p Gartman returned to talk more about the gold trade and said expressly, "I'm not waxing terribly enthusiastic. I wouldn't throw caution to the wind and buy gold here."

In other words, he believes gold will go higher but also thinks there are better places to put money to work. (more)

Webbot Clif High on One Radio Network, 9/8/2010

one on one conversation regarding November event, dollar, economy,2012.Clif High shared a recap of some his 'web bot' hits, as well as presented some dire predictions for the future. He foresees a strong earthquake possibly hitting the West Coast in the next few days. He predicted economic collapse over the summer orchestrated by "the powers that be," and increased censorship of the Internet. During this same time frame, "sun disease," or solar flare-ups will impact life on Earth, he said. High also issued a warning over the dates November 8th through the 11th, 2010 in which he said an Israeli attack on Iran/nuclear war could occur that will have 9/11-like consequences.

Webbot predictions predictions about the economy, and U.S. and world events for the summer of 2010 and beyond . Here are some of the highlights of what they see coming:

* No warfare between Israel and Iran, at least not until November.
* Six very large earthquakes are yet to come during the rest of 2010.
* A major tipping point will occur between November 8th – 11th, 2010, followed by a 2-3 month release period. This tipping point appears to be US-centric, and could be a dramatic world-changing event like 9-11 that will have rippling after-effects. The collapse of the dollar might occur in November.
* From July 8th, 2010 onward, civil unrest will take place, possibly driven by food prices skyrocketing, and the devaluation of the dollar.
* A second depression, triggered by mass layoffs, bankruptcies, and the popping of the "derivatives bubble," will see people moving out of cities.
* After March 2011, the revolution wave will settle down into a period of reformation.
* A "data gap" has been found between early 2012 running through May 2013. One explanation is that "our civilization gets knocked back to a pre-electronic state," such as brought about by devastating solar activity.
* A new benign form of capitalism will emerge during 2017-2020.

U.S. stocks end off highs as European bank worries return

(MarketWatch) -- U.S. stocks on Thursday posted a second day of gains, with the Dow industrials just a few points away from posting gains for 2010, as investors cheered a drop in weekly jobless claims and an improvement in the trade deficit.

The market pared its gains, however, after a report Deutsche Bank might sell stock to raise billions in cash.

"They will likely not be the only bank that will have to raise more money," Peter Boockvar, equity strategist at Miller Tabak, said after Bloomberg reported Deutsche Bank AG /quotes/comstock/13*!db/quotes/nls/db (DB 59.97, -0.02, -0.03%) was considering a stock sale to raise as much as $11.4 billion.

While the report concerning Germany's largest bank triggered a softening in equities and the euro, Boockvar said the paring of gains "came in context of a market that keeps running up above 1,100 [on the S&P 500] and then stalling out." (more)