Thursday, August 12, 2010
Wednesday, August 11, 2010
Mexico’s Crashing Oil Industry
Mexico is a critical oil supplier to the United States. But Mexico’s ‘s oil industry is in crisis. Indeed the grim numbers come from no less a source than the Mexican Energy Ministry. Production statistics make it clear that Mexico’s overall oil output is declining rapidly — with the word “crashing” coming to mind as one views the chart.One particular oil field is central to the problem. It’s called Cantarell. It’s a super-giant, offshore oil field that was discovered in 1976 — based on a natural oil seep under about 150 feet of water, by the way.
After decades of production, Cantarell is getting long in the tooth. Oil output from Cantarell, is declining rapidly. Cantarell is depleting at an astonishing rate. Meanwhile, the yield from new Mexican oil fields is simply not making up the difference. (more)
*Secrets of Successful Traders: Turn $1000 Into $1.9 Million In 1.7 yrs
Trading Stocks. Extra $200 Cash Back Guarantee (click here)
The 10 most attractive Dow stocks
John DeFeo,New York — TheStreet.comThe Dow Jones Industrial Average is no longer a bargain, according to one fundamental valuation measure. As of Friday's close, the liability-adjusted cash flow yield (the anticipated rate of return through which all of a company's debts and liabilities are proportionally assumed into the purchase price of the stock) of the SPDR Dow Jones Industrial Average ETF(DIA-N106.66-0.46-0.43%) is 4.03 per cent. Divide this figure by the 2.82 per cent yield of a 10-year U.S. Treasury Note and the resulting margin of safety ratio is a scant 1.43 (a ratio greater than 2 is desirable).
In light of these figures, bond and index fund investors should prepare for total-returns below historical averages. However, "stock pickers" should be able to generate satisfying long-term returns by selecting equities with attractive valuations, strong returns on invested capital and a durable competitive advantage.
Last week we focused on the 10 Dow stocks with the least attractive valuations -- a portfolio of companies that suffer from weak or irregular cash-flows, excessive debt burdens, and possibly, a damaging speculative interest. This week we highlight the 10 Dow stocks with the largest (most-attractive) liability-adjusted cash-flow yields (using 10-year historical data). (more)
3 Stocks With Small Price-to-Sales Ratios
Would you pay $100,000 for a business with yearly sales of $150,000? It sounds like a good deal, but of course, profit matters more than sales. The business might produce a $10,000 loss each year after expenses are deducted, or it might generate a $50,000 profit. For that reason, most stock investors prefer to discuss company valuations in terms of the price-to-earnings ratio, rather than the price-to-sales ratio.In several long-term studies, however, the P/S ratio has proved a better predictor of stock returns. Perhaps that's because earnings are far more volatile than sales, and the P/E ratio can mislead when earnings are temporarily suppressed or inflated. Or, it might be related to research showing that profit margins tend to revert to industry averages over long time periods, as extraordinarily profitable companies attract new competition, and as companies with weak margins come under shareholder pressure to make improvements.
Among the large, American companies that make up the S&P 500 index, the median P/S ratio is 1.5. However, ratios vary sharply by industry, according to whether companies specialize in achieving high sales volume or large mark-ups, and according to investor popularity. For mass merchants, the median P/S ratio is 0.5. For software developers, it's 3.5. (more)
Roughly 1.9 Yrs... Interested? (click here)
BNN : Top Picks
Barry Schwartz, vice-president and portfolio manager, Baskin Financial Services, shares his top picks.
click here for video
Secrets of Successful Traders: Turn $1000 Into $1.9 Million In 1.7 yrs Trading Stocks. Extra $200 Cash Back Guarantee (click here)
Subscribe to:
Posts (Atom)