Wednesday, July 17, 2013

NTI: My Favorite Oil Stock — With a 20% Yield

Rarely, if ever, does a stock yielding over 20% annually get overlooked by most investors…

But that’s just what’s happening with the refining and retail company, Northern Tier Energy LP (NYSE: NTI).

After coming on to the scene in July 2012 at nearly $14 per share, NTI surged over 110% by March. It’s since declined and stayed in the mid-$20 range.

The chief reason for this decline is a pessimistic outlook in Northern Tier’s ability to sustain such a high dividend over a substantial period of time.

You can see that in the company’s stock performance.  (more)

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NLR: A Momentum Breakout for the Uranium-Nuclear ETF

The Uranium-Nuclear ETF (NLR) caught a bid last week and broke resistance to forge a 52-week high. Notice that a series of rising troughs (green line) preceded this breakout. The indicator window shows MACD confirming strength with a 52-week high of its own.

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Shiller: Govt Should Curtail 'Enormous Subsidy' for Homeownership

The government should scale back the financial support it gives to encourage homeownership, says Yale University economist Robert Shiller.

The issue is quite germane as the government considers what to do with Fannie Mae and Freddie Mac, which increase the supply of money available for mortgages, and the Federal Housing Administration, which directly subsidizes homeownership, Shiller writes in The New York Times.

How the Federal Reserve handles its quantitative easing program also involves the issue of government support for homeownership, he notes. Experts credit the Fed's easing for much of the gain in home sales and prices over the past year.  (more)

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Tangoe Inc (NASDAQ: TNGO)

Tangoe, Inc. provides communications lifecycle management software and services primarily to commercial enterprises and governmental agencies. The company offers an on-demand Communications Management Platform (CMP), a suite of software designed to manage and optimize the complex processes and expenses associated with the lifecycle of an enterprise's fixed and mobile communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management, telecommunications expense management, invoice processing, expense allocation and accounting, and asset decommissioning and disposal. It also provides help desk, asset procurement and provisioning, and carrier dispute resolution services to manage customers' communications assets and services. In addition, the company offers strategic consulting and other services, including sourcing, strategic advise, bill auditing, inventory optimization, mobile optimization, policy administration, and mobile lifecycle; and implementation services comprising data conversion, system configuration, process review, and corporate system integration services that assist customers in the setup and deployment of CMP.
Please take a look at the 1-year chart of TNGO (Tangoe, Inc..) below with my added notations:
1-year chart of TNGO (Tangoe, Inc.) After selling off from August down into December, TNGO rallied back up to hit a high of $16 in February and sold off again into March and April. Since then, the stock has rallied back up to the $16 resistance (red) and appears to have formed a cup (blue) and handle (purple) pattern. TNGO would confirm the pattern by breaking through the $16 resistance, and if it does, the stock should be moving higher from there. To add validity to any breakout, the break should occur on heavier volume than usual.
Keep in mind that simple is usually better. Had I never pointed out this cup and handle pattern, one would still think this stock is moving higher simply if it broke through the $16 resistance level.
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Dow Theorists Wait For Transports to Confirm

In bull markets, you want to see both the Dow Jones Industrial Average and the Dow Jones Transportation Average making new highs together. Dow Theory suggests that when one of these gets left behind and doesn’t confirm the other, something is wrong and there should be cause for concern.
Last week the Dow Industrials closed at new all-time highs, and now sit above their May closing highs. Meanwhile, the Transports are still almost 2% from their May highs. So if you believe in Dow Theory, you want to see these transporation stocks get going quickly.
My friend Jonathan Krinsky, CMT over at Miller Tabak has a note out this morning discussing the current divergence:
“The Transports, however, should certainly be given some attention this week. The TRAN index made its all-time closing high on May 17th. Prior to last week, the DJIA all-time closing high was May 28th. So there was already a slight “non-confirmation”, but from our perspective, the time between the two highs was not sufficient to classify as a true “Dow Theory non-confirmation”.
The current divergence, on the other hand, would be nearly two months in the making (chart below). Of course, this could easily resolve itself with a rebound in key transport stocks such as United Parcel Service (UPS) and FedEx (FDX). The index is less than 2% away from those May closing highs. Until then, however, this is a small divergence that Bulls would certainly like to resolve sooner, rather than later.
7-15-13 djia vs tran
Bottom Line: It is hard to ignore the strength that was seen last week. Much like “The Running in Pamplona”, Bulls pretty much did everything they wanted, with an unrelenting climb. With most momentum indicators running in overbought territory, the NDX coming off 13 consecutive up days, and a potential “Dow Theory Non-Confirmation”, however, we are still hesitant to chase stocks without at least a few days of consolidation.
That does not mean that stocks are huge short-sales, however. There is very little evidence of a broad based decline, at least yet. Our point is that sometimes holding-off on aggressively buying, and waiting for better opportunities is the correct strategy.”
I think something else worth noting is the NYSE Composite. Because of all the ADRs and REITs in that average, it’s by far the worst of the US Stock Market gauges. We’re paying attention to that.

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4 Homebuilders on Sale: RYL, PHM, MDC, DHI

It has been a roller coaster ride for homebuilders the last several years. A spectacular boom in the housing market was followed by a tragic collapse. Not only did prices plummet, but the number of new homes being built plunged to levels around half of what they were in the 1960's - back when the United States had more than 100,000,000 fewer people living in it.
After some very dark days, homebuilders finally started to see some signs of life in 2012. You can see a solid rebound in the number of new housing starts recently:
In May 2013, new housing starts ran at an annualized rate of around 900,000. But many experts believe that in order to simply keep up with population growth, around 1,500,000 new housing units are needed annually. This means that the rebound in new home construction could very well be in its early stages.
But someone forgot to tell that to Mr. Market.(more)

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