[Originally published 7/11/2014]
Go ogle's (NASDAQ:GOOG) senior executives are busily touting the wonders of autonomous vehicles. There's the technological marvel, at least in the eyes of Silicon Valley. There are the economic benefits - no more congestion, no more accidents. Wonder of wonders! – and great for the Google empire, and for its stock price.
The PR machine is a marvel to behold, and the gullibility of the audience – well, it's Google! Is their part in this really that much of a marvel? Will economic benefits be as great as they claim? Will they even be a player in future vehicle technologies? Their PR machine is not paid to probe such issues, much less point out that alternative technologies may bring almost all of these benefits more quickly and at a very modest cost.
First, the core innovations necessary for an autonomous vehicle are already on the road, the
[Originally published 8/20/2014]
I've talked in recent weeks about the low returns available on savings. Let me trace that logic in more detail. In the end, I'll tie this to the discussion going on in economics circles about secular stagnation. (Since this is a blog, here's a link to VoxEU, which has just released a free eBook with essays by 19 economists, arguing the empirical strengths, weaknesses and implications of "staganation.")
Long-term rates are generally down since December: 30-year bonds fell from 4.0% to 3.2% and 20-year bonds from 3.0% to 2.4%. Those are drops of 0.8 percentage points and 0.6 percentage points, respectively. (Meanwhile-year rates are flat at 1.6%.) That is not necessarily good news, as it means that the serious money crowd think that growth will be weak for years to come.
Let's look at the numbers over time and see what they imply. If you're an investor,
ZF Friedrichshafen is buying TRW (NYSE:TRW); JCI sold its automotive business to Gentex and Visteon. Are we in a new era of supplier M&A activity? The previous wave didn’t work out well – Dana, Tower, Dura, Lear and others ended up in Chapter 11.
So how about Federal-Mogul (NASDAQ:FDML)? They too went on an acquisition binge in the late 1990s, including the British firm T&N. In the process they took on debt, with a $2.75 billion package just for the T&N purchase. As with others, they bit off more than they could chew. Federal-Mogul’s downfall however wasn’t operational issues but one T&N factory that had used asbestos. The accompanying $1 billion-plus in costs tipped them into Chapter 11, and it took until 2007 – 6 years – for them to emerge. So where are they heading?
Now back in 1999 Carl Icahn, a corporate raider, started buying shares in Federal-Mogul.
There's no such thing as the perfect investor. No one exists who knows with absolute certainty which companies are good, which are bad, and when to buy or sell them. Perfection may not be possible, but we attempt to get as close as possible by never resting on our laurels and studying different investment styles to get a better idea of what works and what doesn't.
There are names on Wall Street who can be associated with a specific investment philosophy. Warren Buffet is a legendary value investor while George Soros is known as a leveraged short-term speculator. There are countless others who have their own unique investment style and can teach us something about how to better our own trading strategies.
Some investors have a style that seems to fly in the face of everything we know about diversification and risk management but still manage to post steady returns
Goldfield (NYSEMKT:GV) is a company primarily engaged in electrical construction, including the placement of fiber optic cable. It is also, to a much lesser extent, a real estate developer of residential properties on the east coast of Florida. The company supplies the management, labor, equipment and tools, while customers generally supply most of the required materials. It operates exclusively in the United States with a focus in the southeast.
Contracts are acquired through competitive bids, which account for the majority of revenues, or direct negotiations with costumers. The company utilizes two contract types: fixed-price contract, for which revenue is recognized on a percentage-of-completion basis, and master service agreements, for which revenue is recognized as work is performed. Revenues experienced a sudden increase in 2012, growing from about $30 million to more than $80 million due to several large electrical construction projects assigned to Goldfield's subsidiary Southeast Power in Texas, Florida
AngioDynamics, Inc. (NASDAQ:ANGO)
Q1 2015 Earnings Conference Call
October 9, 2014 4:30 PM ET
Bob Jones - IR
Joe DeVivo - President and CEO
Mark Frost - EVP and CFO
Tom Gunderson - Piper Jaffray
Charles Haff - Craig-Hallum
Jayson Bedford - Raymond James
Larry Haimovitch - HMTC
Good day and welcome to the AngioDynamics Fiscal Year 2015 First Quarter Results Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Mr. Bob Jones, Investor Relations. Please go ahead, sir.
Thank you, Angela and welcome everyone. Thank you for joining us for AngioDynamics' conference call this afternoon to review the financial results of the fiscal 2015 first quarter results, which ended on August 31st, 2014. The news release that crossed the wire this afternoon is available on the company's web site at www.angiodynamics.com. A replay
The income producing portfolio that I manage for my wife and I has undergone some changes in the past month. My most recent article can be found here. Essentially, I've become quite cautious/bearish in the last few months, taking our stock allocation down from 39% to 15%, our bond allocation down from 42% to 35%, and increasing our cash allotment from 19% up to 50%. In the process, our yield has shrunk from 6.3% down to 3.6%. In my last article, I mentioned my desire to increase our yield a bit, and as a result, was on the lookout for some beaten down high dividend paying stocks. The recent selloff, not only in the overall market, but also in crude oil, was just what the doctor ordered. I've identified a number of beaten down high yielding stocks and MLPs which, after substantial pullbacks, now offer a more acceptable risk/reward
Joe's Jeans Inc. (NASDAQ:JOEZ)
Q3 2014 Results Earnings Conference Call
October 9, 2014 4:30 PM ET
Lori Nembirkow - General Counsel
Marc Crossman - President and CEO
Hamish Sandhu - Chief Financial Officer
Jeff Wallin Van Sinderen - B. Riley Caris, Research Division
James Fronda - Sidoti & Company
Welcome to the Q3 2014 Joe’s Jeans Inc. Earnings Conference Call. My name is [Takiba] (ph), and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.
I would now turn the call over to Lori Nembirkow. Please go ahead.
Thanks, Operator, and thanks to everyone for joining the call. Present on our call today to discuss our results are Marc Crossman, our President and CEO; and Hamish Sandhu, our CFO.
The breakup makes sense
In our October 1 article, we said that the appointment of Michael Brown as permanent CEO clearly suggested that the odds of a Symantec (NASDAQ:SYMC) breakup were rising in view of Mr. Brown's professional background. Hence, we are not surprised by Symantec's announcement that it will split into two independent companies, a storage business and a security software unit. The transaction will take the form of a tax-free distribution to Symantec shareholders of 100% of the storage business in a new, publicly traded stock.
The deal makes great sense. The acquisition of storage specialist Veritas ten years ago has not delivered the expected revenue synergies, as illustrated by flattish revenue growth at the storage unit in past years and very slightly positive revenue growth at the security unit. And both businesses need to become more nimble in a tough competitive environment. Specifically, the storage industry,
Monsanto (NYSE:MON) didn't ignite excitement among shareholders since the agricultural business reached a 52-week high in early July. Since then, shares of Monsanto have declined 16%. Its year-to-date return doesn't look much better: Shares are down 7% since the beginning of the year, and its most recent earnings release probably won't do much to woo investors.
Fourth quarter and full-year results
From a pure financial point of view, Monsanto had a solid fourth quarter, as well as a strong financial year, yet managed to disappoint investors because of free cash flow declines and because of its earnings outlook for fiscal 2015. The most important takeaways with respect to Monsanto's fourth quarter results were:
- 4Q 2014 revenues increased 19% to $2.63 billion and exceeded analyst estimates of $2.42 billion.
- Gross profit jumped 33% y-o-y to $1.23 billion.
- A net loss of $156 million was reported vs. a net loss of $249
Since the S&P 500 hit 2011 on September 18, it has forfeited 4.1%. That may not represent a significant decline. Yet, the year-to-date damage across an array of 18 popular asset classes is a bit more vexing.
|Depreciation Across 18 Unique Asset Classes|
|% Off 2014 High||200 Day MA|
|Vanguard Total International Bond (NASDAQ:BNDX)||0.0%||Above|
|Vanguard Short-Term Bond (NYSEARCA:BSV)||-0.1%||Above|
|Vanguard Intermediate Bond (NYSEARCA:BIV)||-0.2%||Above|
|iShares 20+ Treasury (NYSEARCA:TLT)||-0.4%||Above|
|PowerShares Preferred (NYSEARCA:PFF)||-1.0%||Above|
|PowerShares Emerging Market Sovereign (NYSEARCA:PCY)||-2.0%||Above|
|iShares High Yield Bond (NYSEARCA:HYG)||-2.5%||Below|
|S&P 500 SPDR Trust (NYSEARCA:SPY)||-4.0%||Above|
|Vanguard REIT (NYSEARCA:VNQ)||-5.0%||Above|
|SPDR Convertibles (NYSEARCA:CWB)||-5.3%||Below|
|Vanguard MidCap (NYSEARCA:VO)||-5.9%||Below|
|JP Morgan Alerian MLP (NYSEARCA:AMJ)||-8.1%||Above|
|SPDR S&P Emerging Markets Small Cap (NYSEARCA:EWX)||-8.5%||Below|
|Vanguard Emerging Markets (NYSEARCA:VWO)||-9.0%||Above|
|Vanguard FTSE Developed Markets (NYSEARCA:VEA)||-11.1%||Below|
|iShares Russell 2000 (NYSEARCA:IWM)||-11.3%|
By Steven Carroll
While many analysts clearly welcomed the proposed deal, citing the synergies and other cost savings it would create, it reinforces the fin de siècle feel as mega-mergers and huge corporate spin-offs seem to be announced on a daily basis.
Iron ore price fallout
The recent fall in the price of iron ore (see above chart) has different impacts from an industry standpoint. It will (of course) result in reduced cash flow and therefore cause a reassessment of capex and dividend policy. Over the medium term we will certainly see a reduction of industry players as some of the higher- cost producers are uneconomic at current levels. Indeed, the first Australian iron ore producer has already entered administration - as reported by Reuters here.
Looking at forward estimates for commodity companies is always challenging. For Rio Tinto (NYSE:RIO), an Analyst Revisions Model (ARM) score of 12 indicates
Anyone familiar with Apple (NASDAQ:AAPL) is likely equally familiar with the regular voice of activist investor Carl Icahn whispering in the ears of CEO Tim Cook and other top managers. In a recent letter to the company, Icahn implores Cook to institute an accelerated buyback program given his belief that the stock is massively undervalued: he places fair value at roughly $203 per share - roughly twice its current trading price. The open letter contains a variety of metrics to justify the position, but the underlying message is that Apple is a screaming buy. The question for investors, of course, is whether these seemingly outrageously claims are even remotely justifiable, or if simply the fact that they have been made is enough to drive the stock higher. While I do not share Icahn's level of exuberance, I continue to be a buyer of Apple at current levels.
Icahn on Apple
IAMGOLD (NYSE:IAG) is a mid-tier gold mining company with five operating gold mines on three continents. The company is estimated to produce 835,000 to 900,000 ounces of gold in 2014 at all-in sustaining costs below $1,100 an ounce.
With a ramp up in production at the high-grade Canadian Westwood mine, a new power agreement that reduces rates and improves mining and processing productivity at Rosebel, higher expected mining grades at Essakane and the recent announcement of a sale of a non-core asset, IAMGOLD is taking the necessary steps to improve margins by lowering cash costs, and strengthening its balance sheet.
With a current market cap of $1 billion and an estimated enterprise value of $900 million following the asset sale, I think shares of IAMGOLD present a compelling buying opportunity at current levels.
IAMGOLD's 2014 Production Profile
Here is a brief summary of IAMGOLD's production:
- Rosebel Gold Mine in Suriname
Dividend ETFs are more popular than ever, thanks to the central banks of the world giving us zero interest rate policies (ZIRP), but the word "dividend" in an ETF means different things in different funds. Some funds target very high-yields, such as the Global X Super Dividend ETF (NYSEARCA:SDIV), but others such as the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) aim for growth, while WidsomTree has an entire line-up of ETFs that use dividends as a selection factor in their indexes. Most investors are probably looking for rising dividends and assume that most common stock dividend ETFs provide it - but that is an incorrect assumption.
SPDR Dividend ETF (NYSEARCA:SDY) is the third-largest dividend ETF, the last of the three currently above $10 billion in assets, and also one of the oldest, launched in 2005.
Index & Strategy
SDY tracks the S&P High Yield Dividend Aristocrats Index. Inclusion in the index
One of the major hurdles for package delivery is being present at the delivery location. This is especially common for the working population living in urban areas. If the receiver is not available, delivery has to be attempted at some other time or packages are just left at doorsteps. In order to cater to such residential package deliveries, United Parcel Service (NYSE:UPS) has announced that it will expand its UPS My Choice and UPS Access Point network.  Using these services, online shoppers will be able to choose a convenient pick-up location or locker for their deliveries, and collect the packages upon producing a valid IDs and tracking numbers.
UPS My Choice is a service in which online shoppers can track their packages, reschedule and reroute packages, and sign for packages online. UPS Access Point locations are generally local businesses such as dry cleaners and grocery stores, where
New entrants and technological change have conspired to expose weakness in the traditional business of cable television providers. Lulled into over-reliance on geographic monopolies, cable providers were slow to respond to competitive threats represented by Netflix (NASDAQ:NFLX), TiVo (NASDAQ:TIVO), YouTube, iTunes, Amazon (NASDAQ:AMZN) Prime, Google (NASDAQ:GOOG) Fiber, telcos and direct broadcast satellite, among others. Internally, cable providers were hampered in their response by operational inefficiencies, specifically in the fragmented IT infrastructure that resulted most visibly in poor customer service. Other external threats have come from judges, regulators, and cord-cutting millennials. The disruption of cable television, it has seemed, is all but inevitable.
A survey of recent results for global cable companies, however, casts doubt on that imminent fate. The resiliency of cable providers in retaining television customers despite the level of competition has been impressive. The impact of cord cutting to date appears overblown. Retransmission fees continue to be
When it comes to companies in the investment business, none is more influential, in my opinion, than Goldman Sachs (NYSE:GS). When analysts at Goldman speak, Wall Street listens and equity prices move. However attractive that may be, though, it does little to support the valuation placed on shares of Goldman Sachs. Instead, valuation is directly tied to EPS growth, so we need to take a close look at that to identify value in Goldman's shares at this time.
At first glance, the PE multiple of Goldman Sachs is not expensive when compared to other stocks. The PE is slightly over 11x, which by comparative standards is low, but proper valuation analysis compares the PE to EPS growth rates for the company itself, not to other companies' PE multiples; and when we look at the EPS growth rate for GS, something very concerning comes to light.
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Art's-Way Manufacturing Co., (NASDAQ:ARTW)
Q3 2014 Earnings Conference Call
October 9, 2014 11:00 am ET
J. Ward McConnell Jr., - Executive Chairman
Carrie Majeski - President, CEO, Interim CFO
Marc McConnell - Executive Vice Chairman
Roger Miller - Frontier Asset Management
Sam Rebotsky - SER Asset
Good morning, ladies and gentlemen. Today is Thursday, October 9, 2014 and welcome to the Art's-Way Manufacturing Quarterly Investor Call. At this time, all participants are in a listen-only mode. (Operator Instructions) Your call leaders for today's call are Carrie Majeski, President, Chief Executive Officer and Interim Chief Financial Officer, J. Ward McConnell, Jr., Chairman of Board of Directors of Art's-Way Manufacturing; and Marc McConnell, Vice Chairman of the Board of Directors of Art's-Way Manufacturing.
I'd now like to turn the call over to your host. Ms. Majeski, you may begin.
Good morning. I will start by reading
Ellington Financial LLC (NYSE:EFC) remains be one of the more consistent "mREIT-like" companies in the market. The company has been able to post near-monthly book value increases, all while maintaining its robust dividend intact.
This trend continues, as Ellington just announced a September 30, 2014 book value of $23.78 per share on a diluted basis, a small increase from the August 2014 book value of $23.60 per share. When including dividends, Ellington has been able a post positive total economic every quarter since Q3 2011.
(click to enlarge)
Ellington expands into reverse mortgages
While Ellington typically trades in line with the mREITs, it is an actual an LLC, which allows it to have a more actively managed portfolio and own a greater concentration of higher-risk non-agency assets.
An example of this, as I noted in a recent article, was displayed recent when Ellington made a minority investment into New