Wednesday, June 26, 2013

3 Oversold REITs: MAA, CHSP, HIW

Since May 22 - the first day Federal Reserve Chairman Ben Bernanke hinted at "tapering" quantitative easing - the S&P 500 has fallen nearly 7% while the yield of the 10-year Treasury note has risen from 1.89% to 2.55%.
Some of the hardest hit stocks during this selloff have been those with strong yields as higher interest rates have made their dividends comparatively less attractive.
But is this selloff in dividend stocks overdone?
The Fed Giveth, the Fed Taketh Away
A common misperception is that over the last couple of years, yield-starved investors bid up all dividend stocks to untenable valuations and that this recent selloff is just a normal correction for these overbought securities.
That may be the case for some dividend stocks - but not all.
In fact, one of the hardest hit groups has been real estate investment trusts (REITs). But there are many REITs with strong fundamentals there were trading at very reasonable prices before the recent "dividend off" trade. (more)

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Italy Could Need EU Rescue Within Six Months, Warns Mediobanca

Italy is likely to need an EU rescue within six months as the country slides into deeper economic crisis and a credit crunch spreads to large companies, a top Italian bank has warned privately.
by Ambrose Evans-Pritchard

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.
“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.”
The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery.
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IMAX Corporation (NYSE: IMAX)

IMAX Corporation, together with its subsidiaries, operates as an entertainment technology company specializing in motion picture technologies and presentations worldwide. The company operates in seven segments: IMAX Systems, Theater System Maintenance, Joint Revenue Sharing Arrangements, Film Production and IMAX Digital Re-Mastering (DMR), Film Distribution, Film Post-Production, and Other. The IMAX Systems segment designs, manufactures, sells, or leases IMAX theater projection system equipment. The Theater System Maintenance segment maintains IMAX theater projection system equipment in the IMAX theater network. The Joint Revenue Sharing Arrangements segment provides IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The Film Production and IMAX DMR segment produces films and performs film re-mastering services. The Film Distribution segment distributes films for which the company has distribution rights. The Film Post-Production segment offers film post-production and film print services. The Other segment owns and operates IMAX theaters; rents two-dimensional and three-dimensional (3D) large-format film and digital cameras to third party production companies; and offers after market sales services for projection system components and 3D glasses.
Please take a look at the 1-year chart of IMAX (IMAX Corporation) below with my added notations:
1-year chart of IMAX (IMAX Corporation) IMAX has been holding a very important level of support at $25 (blue) since the middle of February. No matter what the market has or has not done over that period of time, IMAX has held that $25 level, which was also a brief resistance in January. The stock approaching $25 again should provide another bounce higher, but if the overall market continues to sell-off, IMAX could break that support.
The Tale of the Tape: IMAX has a very good level of support at $25. A trader could enter a long position at $25 with a stop placed under the level. If the stock were to break below the support, a short position would be recommended instead.
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Zillow 30-Year Fixed Mortgage Skyrockets By Massive 50 bps In One Week To 4.38%, Most Since 2011

from Zero Hedge:
Goodbye housing (non)recovery… except for those private equity-cum-landlord firms and offshore oligarchs who pay all cash of course. “The 30-year fixed mortgage rate on Zillow(R) Mortgage Marketplace is currently 4.38 percent, up fifty basis points from 3.88 percent at this time last week. The 30-year fixed mortgage rate hovered between 3.82 and 4 percent late last week, before spiking up near the current rate over the weekend. This represents the highest rate on Zillow Mortgage Marketplace since July 2011.”
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Marc Faber: S&P Could Drop 30% From High

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Chinese Stocks Drop To Lowest Since Jan 2009; Down 20% From Feb Highs / By Tyler Durden / June 24, 2013, 21:48 -0400
With US equities 7.5% off their all-time highs and on the verge of instigating a ‘Markets In Turmoil’ special, we thought it perhaps of note that the growth engine of the world continues to see real turmoil. Short-term funding rates remain elevated (7-day repo jumping 240bps to 10% today) as the ‘engineered’ credit crunch continues for China. The Shanghai Composite opened down today, crossing the 20% drop level from the recent Feb highs (and -16.5% in the last 16 days!)pushing the index to its lowest level since January 2009.
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