Thursday, November 21, 2013

3 Ways to Profit From Platinum’s Surge

Industrial firms, Wall Street hedge funds, and any big money investing in platinum anxiously await Johnson Matthey’s semi-annual review of the platinum industry.

And they got incredibly interesting reading in the group’s most recent report, released Tuesday…

In its Platinum 2013 Interim Review, Johnson Matthey said the platinum market this year is moving toward a supply and demand deficit of 605,000 ounces — the largest deficit since 1999. That’s up from a 340,000-ounce shortfall in 2012.

It said that gross demand for the precious metal could hit a record 8.42 million ounces in 2013, up 4.2% from last year. (more)

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BofAML Warns “It’s Time To Be Bearish On US Treasuries”

It’s time to turn bearish on US Treasuries, is the clarion call from BofAML’s Macneil Curry. The impulsive advance in US 10yr yields from 2.669%/2.630% and Tuesday Bearish Engulfing Candles in many of the futures contracts (WN, US & FV), Curry says, means the larger bear trend has resumed. In 10yr yields Curry targets 2.950%/2.992% (the high end of the 4m 2.47%/3.00% area range trade). Pullbacks should be seen as temporary, corrective and an opportunity to go short. This bearish view, he warns, is invalidated on a 10yr yield move below the 2.659% lows of Nov-18. From a trading perspective they express this view by selling USZ3. Downside targets are seen to 128-22/128-12, with a stop above 133-10.
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REITs are on Sale

The 10-year Treasury yield has jumped 30bps from its late-October trough, and is still below the 3% hit in early-September, yet the S&P REITs index has fallen to fresh three-year lows. Our U.S. equity strategists see such pessimism as unwarranted.
While Fed taper talk is heating up again, it is important to distinguish between tapering and tightening. In the absence of a major inflation threat, the Fed has made it clear that it prefers to err on the side of “too late and too loose” rather than “too early and too tight”.
Indeed, the above chart is compelling – the relative share price ratio has a close correlation with the number of months to the first Fed hike. The latter has climbed anew, underscoring that there is a chance to trade REITs from the long side. Value is attractive and cash flow prospects are improving alongside overall economic growth. Our U.S. equity strategists reiterate their recent upgrade to overweight.
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Honda Motor Revs up Returns: HMC

Sales for Honda Motor (HMC) exceeded $130 billion during the last 12 months. Under the Honda and Acura brands, the firm sells autos, trucks, motorcycles, and all-terrain vehicles.

However, many consumers put off purchasing a new vehicle during the recent worldwide economic slowdown. That situation is about to change.

The age of the average vehicle on US roads recently hit an all-time record: 11.4 years.

There is enormous pent-up demand for new cars and trucks. And we are beginning to see that demand show up in the Honda sales numbers.

In the most recent quarter, sales jumped 16.3%. And they are likely to climb sharply higher in the months ahead. Honda will earn approximately $2.50 a share in 2013. But I estimate net income will climb 40% in the year ahead.

One reason is new model introductions. Another is the weaker yen. A declining currency makes Japanese cars more competitively priced in foreign markets.

And most of Honda's sales, of course, are exports. We got a sign of what is ahead when Toyota reported unexpectedly strong sales and earnings. Plus, Honda yields 5%. And that dividend should rise with earnings in the weeks ahead.

In short, rising demand, a falling yen, and new model introductions should drive this Japanese blue chip sharply higher.

So, pick up Honda shares at market today. And place a protective stop at $32. If you prefer to play this one more aggressively, try the April $45 calls, which last traded at $0.60.
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Casey Research: This could be your greatest opportunity in over 30 years

I caught myself daydreaming last week…

It's October 27, 2008, and Silver Wheaton (SLW) just hit $3 per share. I buy 10,000 shares, more than I've ever devoted to any one stock. I sell half when it hits $33 per share and pocket $150,000 after a 1,000% gain. I pay off the mortgage, and my wife quits work—and I still have 5,000 shares…

Not a bad daydream, eh? I don't know how many investors actually had the intestinal fortitude to plunk down a big lump of cash on a stock at that time—but Silver Wheaton did indeed offer that 1,000% return, and more.

When you look back at the investments that have made the most money over the past few decades, they've always been assets that had reached an extreme—an extreme low or an extreme high.

Buying gold at $250 per ounce in 2001… buying tech stocks in the early '90s or Apple Computer at $8 per share in 2003… shorting real estate in 2007 or the stock market in 2008… the list goes on.

Each of those speculations led to massive returns only because the price of the respective asset was either dramatically undervalued and poised to take off or, in the case of the short sales, a bubble ready to pop.

Paradoxically, such opportunities aren't that hard to find—the truth is, they sprout up all the time. What is hard to find is...

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Sally Beauty Holdings, Inc. (NYSE: SBH)

Sally Beauty Holdings, Inc., through its subsidiaries, engages in the distribution and retail of professional beauty supplies primarily in North America, South America, and Europe. The company operates in two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment operates a chain of cash and carry retail stores that provide various professional beauty supplies, including hair color products, hair care products, hair dryers and hair styling appliances, skin and nail care products, and other beauty items to salon professionals and retail customers. This segment sells various third-party brands, such as Clairol, Revlon, and Conair, as well as a selection of exclusive-label merchandise. The Beauty Systems Group segment distributes professional brands of beauty products directly to salons and salon professionals through its sales force, as well as through company-operated and franchised stores. This segment operates stores under the CosmoProf service mark. It sells a range of third-party brands, such as Paul Mitchell, Wella, Sebastian, Goldwell, Joico, and Aquage.
To review Tyson's stock, please take a look at the 1-year chart of SBH (Sally Beauty Holdings, Inc.) below with my added notations:
1-year chart of SBH (Sally Beauty Holdings, Inc.) SBH has formed a key level of support around 25.50 (blue) over the last (3) months. In addition, the stock has created a down trending resistance starting from the middle of August (red). These two occurrences combined have SBH stuck trading within a common chart pattern known as a descending triangle. At some point, the stock has to break support or break its string of lower highs.

The Tale of the Tape: SBH has formed a descending triangle pattern. A short trade could be made on a break of the 25.25-50 support area. A breakthrough 26.50 would break the down trending resistance and would set up a potential long trade.
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