Friday, December 28, 2012

Investopedia: Is Too Much Expected Of Bemis?

It would stand to reason that a company's products that help extend the shelf life of food and/or offer improvements in customer experiences would do pretty well. And to a certain extent, that has been true for Bemis (NYSE:BMS). At a minimum, Bemis has been an excellent dividend stock. The question now, though, is whether investor expectations are running a little too high for a company whose competitive advantages don't really translate into clearly superior returns on capital or free cash flow (FCF).

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Investopedia: Greif Looks Set Up For An Interesting 2013

The stock of Greif (NYSE:GEF), a company that makes industrial packaging products like drums (steel, fiber or plastic), rigid bulk containers and paper packaging, is one of those that is pretty frustrating to investors, as you have to be willing to buy (or sell) into considerable uncertainty. While 2013 looks like it will be a challenging year for industrial companies, investors are also likely to be on the lookout for signs of bottoming, and Greif could do well on that trade.

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Investopedia: Can Silgan Balance Ongoing Returns Of Capital With Building For The Future?

It's hard to argue that Silgan (Nasdaq:SLGN) doesn't have a very attractive business with pretty significant barriers to entry. Silgan has a better than 50% share in North American can markets, and likewise substantial share in its closures business. What's more, other competitors like Ball (NYSE:BLL), Crown Holdings (NYSE:CCK) and Berry Plastics (NYSE:BERY) tend towards the rational when it comes to pricing. Couple that with a strong emphasis on returning capital to shareholders (with dividends and buybacks), and you have what looks like a strong company.

The question with Silgan, though, is the extent to which it can adapt with the times. As food producers have switched from glass to plastic, I expect the same to happen over time with metal. While Silgan can offset some of that with expansion into emerging markets, I have to ask whether the company also needs to grow beyond metal cans to maintain its long-term earnings power.

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Investopedia: A Look Back At The Year In Pharmaceuticals

As a group, 2012 has been a middling year for the pharmaceutical sector. Against a roughly 13% year-to-date gain in the S&P 500, the S&P Pharmaceuticals ETF (ARCA:XPH) is up only about 8%. Companies in the pharmaceutical space continue to face heavy pressure to their revenue as key drugs have gone off-patent and many companies have struggled to develop new blockbusters to pick up the slack. Instead, many companies have focused on cost-cutting as a means of improving results and investors seem to be relatively skeptical about the near-term growth potential of the sector.

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Investopedia: A Look Back At The Year In Medical Technology

This year has turned out to be an odd one for the medical technology industry. Although the overall performance of the sector has basically matched the year-to-date performance of the S&P 500 (a low teens gain for the year), it has very much been a "stock picker's market" with individual company stories standing out against a backdrop of only modest volume growth and ongoing pricing pressure.

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Investopedia: A Look Back At The Year In Biotech

Despite 2012 being a year where investors were increasingly skittish as the year wore on, the exceptionally risky biotechnology industry enjoyed an exceptionally good year. While the group has come off a bit from its peak in the early fall, the group is up more than 30% year to date - making it not only a strong outperformer relative to the S&P 500 (which is up about 12%), but one of the best-performing groups of the year.

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Investopedia: A Triple Play Of Biotech Disappointments Last Week

While disappointing clinical trial results are not only common, they're what most investors should ultimately expect (only about 10 to 15% of new drugs make it to market). Even so, last week saw three highly-anticipated biotech events all go against long investors. While the prospects for these three stories do vary quite a bit, at a minimum they ought to serve as a reminder that there are no sure things in this space.

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Important note!
Investopedia's editors mistakenly altered the final paragraph to a significant extent. The original read:
Perhaps there are some CFS patients who could benefit from Ampligen. Unfortunately, I believe that the poor quality of the the trials run by Hemispherx (the resulting data) make it a moot point, and I believe this company and stock will continue to serve as clear warnings regarding biotechs that linger on for years at a time and cannot generate interest from proven biotech institutional investors. 

I have requested that the text be changed back to this correct/intended final paragraph.

Investopedia: China's Sluggish, But Nike's Growing Well Everywhere Else

Nike (NYSE:NKE) gave investors a rare chance to pick up shares at a more reasonable price twice this year, but it looks like it's back to business as usual for the world's biggest footwear company. Although business in China remains sluggish, Nike's overall growth and margin profile continue to look quite strong.

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Thursday, December 27, 2012

Investopedia: A Look Back At The Year In Banking

There were at least a couple reasons why this should not have been an especially good year for banks in the United States. Low interest rates have made it very difficult for banks to thrive on their core spread businesses, and new banking regulations have certainly crimped their ability to generate the same fee-based income as before. And yet, lending has gradually improved and many banks have seen investors increasingly become willing to assign more reasonable valuations to their shares.

All in all, the regional banking industry has seen better than an approximate 30% appreciation this year, well ahead of the 13% gain in the S&P 500.

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Monday, December 24, 2012

Merry Christmas!

I hope all of my readers have a holiday season filled with family, friends, and all of the best they have to offer.

Friday, December 21, 2012

Investopedia: Ways To Destroy Your Net Worth

Net worth is no trivial matter, as it is ultimately the only meaningful measure of personal wealth. There are many good ways to build individual net worth, including earning more, saving more and improving the return on savings and investments, but it's equally important to play a good defense. With that in mind, look to avoid these prime ways to destroy net worth.

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Investopedia: How To Get A Job On Wall Street If You Went To Community College

For better or worse, Wall Street is a "who you know" sort of world where reputation and image go a long way. Although getting a job with a Wall Street firm does not require a degree from a top-notch university, the fact remains that many top banks recruit at a limited number of schools, and those schools are often prominently placed on the ubiquitous "Best" lists. In fact, in some cases, particular firms will hire only from a narrow list of specific universities; if an outsider applies, their resume will "be kept on file," but the odds of an interview are quite low.

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Investopedia: Jabil Likely Still In A Holding Pattern

For a couple of quarters now, I've thought that Jabil Circuit (NYSE:JBL) looked undervalued on a long-term basis, but that the trends in the electronic manufacturing services (EMS) industry were likely to keep the stock stuck. To that end, the shares are down about 1% for the year, even though the company's business with Apple (Nasdaq:AAPL) seems to be ramping up well. I continue to believe that Jabil's current price understates its long-term value, but I also believe that getting the timing right on when to buy this stock could be tricky given the ongoing malaise across so much of consumer and tech hardware.

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Seeking Alpha: FutureFuel Looks Undervalued, But Mind The Volatility

For most of the past decade, investors have been badly burned by energy-tech and bio-whatever. In many cases, investors bought into bad business models that were built more on hype than sound economic principles. Yet, throughout that time, ethanol and biodiesel use has continued to grow and the U.S. government has continued to encourage (and in many cases, mandate) increased use of these fuels.

That leaves the very small FutureFuel (FF) as an interesting, albeit very risky, stock to consider. Not only does FutureFuel have a real biodiesel plant up and running, but it uses a different feedstock than most if its competitors. FutureFuel also has a specialty chemical business that not only offsets some of the volatility of the biodiesel business, but also offers growth prospects in its own right.

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FutureFuel Looks Undervalued, But Mind The Volatility

Investopedia: ConAgra Improving Margins, But Elasticity Is A Challenge

As investors have seen with General Mills (NYSE:GIS) a couple of days ago and now again with ConAgra (NYSE:CAG), the packaged food industry is still facing pretty challenging conditions. In particular, it looks as though companies can raise prices if they want, but they see an almost immediate hit to volumes. At the same time, give credit where it's due - ConAgra has continued to make progress with its margins. With Ralcorp (NYSE:RAH) now coming into the fold, the next year or two could be pretty interesting for ConAgra, even as the retail environment remains challenging.

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Thursday, December 20, 2012

Investopedia: Google Transforms ARRIS

It's not often that a company buys its way into becoming three times bigger overnight, but that's basically what ARRIS (Nasdaq:ARRS) has done by becoming the winning bidder in Google's (Nasdaq:GOOG) sale of the Motorola Home business. While it's a bold and transformative deal for ARRIS, the ultimate value to Google is still to be determined.

The Deal
It was no great surprise that Google sold the Motorola Home business. When Google bought Motorola, it did so for the company's patents and its smartphone business (likely in that order). Motorola's set-top box and cable TV equipment business was never of all that much interest to Google, though it was valuable enough not to just be shut down.

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Investopedia: FedEx Still Getting The Benefit Of The Doubt

Wall Street can be a surprisingly stubborn place, and many sell-side analysts continue to stubbornly defend FedEx (NYSE:FDX). While the company's performance isn't all bad, and there's clearly value in its large global asset base, it's still difficult to reconcile sell-side affection for this name with likely free cash flow (FCF) growth over the coming decade.

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Seeking Alpha: Hollysys Looks Like A Name To Watch In Emerging Market Automation

Investors do well to hold on to a thorough skepticism when it comes to small Chinese companies, but Hollysys Automation Technologies (HOLI) looks like a name that aggressive investors should get to know better. While it is a lofty goal indeed to say that Hollysys could become the next ABB (ABB), Siemens (SI), Emerson (EMR), or Rockwell (ROK), Hollysys has already shown that it can carve out a meaningful niche against these large foreign competitors in China's fast-growing automation market.

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Hollysys Looks Like A Name To Watch In Emerging Market Automation

Investopedia: Oracle Shows More Strength Than Expected

Software giant Oracle (Nasdaq:ORCL) continues to show that size is not an insurmountable obstacle to growth. Although the enterprise IT world continues to evolve (with concepts like Big Data, cloud and so on getting ample airtime), Oracle continues to show that it is willing to evolve with it. While this company is quite large and very closely followed, I still believe shareholders can look forward to meaningful gains to come.

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Investopedia: Navistar Is Terrible Today, But That May Not Be Relevant

There was absolutely no reason to think that the fiscal fourth quarter was going to be a good one for truck builder Navistar (NYSE:NAV), and it certainly was not a good one. The real question for investors, though, is whether this company can hit its new product launch targets, streamline its manufacturing process and rebuild the share that management missteps destroyed over the past couple of years. This continues to look like a binary stock to me - if management can direct a real turnaround, the shares will thrive from here, but survival (and success) are far from assured.

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Wednesday, December 19, 2012

Investopedia: Sanderson Farms Does OK This Quarter, But Long-Term Value May Be Elusive

Protein production is a tough, low-margin business. Like most other tough, low margin businesses, it's also difficult to build real economic moats and create long-term shareholder value. So while Sanderson Farms (Nasdaq:SAFM) deserves credit for a decent quarter during challenging times, investors would likely do well to regard this name as more of a trading opportunity than a long-term core holding.

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Investopedia: General Mills Still A Good News, Bad News Story

I haven't felt all that adamantly positive or negative about General Mills (NYSE:GIS) for a while now. While the company has some definite positives in its favor (a history of innovation and good international growth potential), it is also struggling with weak volumes and share loss in key categories. With the price close to fair value and an uncertain retail strategy in the United States, I'd still just as soon own other stocks in the consumer staples area.

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Investopedia: A Look Back At The Year In Semiconductors

In what has been a fairly good year for stocks, a few industries stand out as laggards. Although technology has had a decent 2012, semiconductors are a notable exception, as the industry is only up about 3 to 6% for the year (depending upon the data provider). A number of factors have played in this weak performance. One of the biggest culprits, though, has been weak demand for computers and consumer electronics. Flagging or stagnant demand for telecom equipment has also played a major role, as have slowdowns in the automobile and industrial end-markets. Of course, the semiconductor industry in not a uniform bloc, and there are many stories worth further exploration.

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Investopedia: Icahn Has Another Go At Greenbrier

If Bravo ever needs to recast "Millionaire Matchmaker," their producers ought to consider giving Carl Icahn a call, as it seems like Icahn likes nothing more than to try to land opportunistic M&A deals. In his latest attempt, Icahn is proposing (via his listed company Icahn Enterprises LP (Nasdaq:IEP)) that his majority-held American Railcar Industries (Nasdaq:ARII) acquire fellow railcar builder Greenbrier (NYSE:GBX). As is so often the case with Icahn-proposed deals, though, the deal is long on logic and short on value for the selling shareholders.

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Tuesday, December 18, 2012

Seeking Alpha: Is Turkcell's Upcoming Transformation Enough Reason To Hold The Shares?

Investors' options for investing outside the United States have steadily gotten better over the past decade, and it's no longer that difficult to find online brokers who will handle trades for Canadian, Japanese, or Western European markets. It's still not easy to invest in Turkey, though, and that leaves investors with a rather limited menu of options, including the iShares MSCI Turkey ETF (TUR) and Turkey's leading mobile network service provider, Turkcell (TKC).

I am generally not in favor of substituting a company as a country investment, even when an argument can be made that the country's fortunes and the company's success are tied relatively closely together. So setting aside the scarcity of Turkish investment options, is Turkcell still a worthwhile holding for aggressive investors?

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Is Turkcell's Upcoming Transformation Enough Reason To Hold The Shares?

Seeking Alpha: Is America Movil Still A LatAm Growth Story?

Like people, companies change as they grow older. America Movil (AMX) was once a premier Latin American growth stock at a time when retail investors had few good options for investing in that region. Since then, both the company and its markets have matured, and investors now have numerous other options for investing in emerging markets. Given the company's maturing model and its ventures into Europe, is America Movil still a growth stock and is it still worth owning?

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Is America Movil Still A LatAm Growth Story?

Investopedia: Hard-To-Value Finisar Could Be In For Better Days

It can be dangerous to have a good feeling about a company's stock, but not be able to back it up with strong quantitative data. And yet, that broadly describes most turnaround situations, as the timing and magnitude of earnings and cash flow recoveries are so hard to model accurately. With that in mind, I think Finisar (Nasdaq:FNSR) could be in for better days as upgrade cycles in the data center and telecom markets take revenue and earnings higher.

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Investopedia: Canada And Australia Dollars To Be Reserve Currencices

There's always a difference in the markets between "de facto" ("in practice") and "de jure" ("in law"), and recent announcements regarding international reserve currencies would seem to reflect that difference. Word came out in mid-November that the IMF is likely to reclassify the Australian dollar and Canadian dollar as "official" reserve currencies. While this is indeed a significant development, it seems more a reflection of reality than a major prospective change.

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Investopedia: 5 Biggest Tech Losers For 2013

Question: Who will be the biggest gainers and losers in the tech sector for 2013?

Even if some of the gains have evaporated in the second half of the year, 2012 has still been a pretty solid year for tech stocks. On Wall Street, though, no good deeds go unpunished for long, and there will certainly be some losers in 2013. While crystal balls are still in short supply, these are some stories that investors might want to approach with some caution in 2013.

WinTel (Microsoft (Nasdaq:MSFT) / Intel (Nasdaq:INTC)
Although I don't necessarily believe that Microsoft and Intel are going to rack up big losses for 2013 (and the stocks have underperformed in 2012), I do believe 2013 may mark the Waterloo for those who believe that the WinTel PC concept still has legs. The ultrabook concept has yet to catch on and Win8 could be setting up for a disappointment. While I think Lenovo (Nasdaq:LNVGY) still has room to grow its PC business (and that neither the desktop or notebook computer are going away), I think 2013 will confirm that whatever future growth Microsoft and Intel may have, it's not in the PC business anymore.

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Monday, December 17, 2012

Investopedia: Is Another Copper Star On The Rise?

It's not all that often that the Street seems to agree on something, but there is widespread agreement among analysts and investors that Freeport McMoRan's (NYSE:FCX) bids for Plains Exploration (NYSE:PXP) and McMoRan Exploration (NYSE:MMR) are both bad ideas. Assuming they go through, then, Freeport McMoRan may find its luster as a copper play dulled. Lucky for investors, then, a new option may be on the rise.

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Investopedia: Will A Sub-$3 Bid Get The Deal Done For Sprint?

When word came out last week that Sprint (NYSE:S) had approached Clearwire (Nasdaq:CLWR) with a $2.90 per share cash bid, the common reaction was that Sprint would have to do better. Well, Sprint has done better, and the Clearwire board has unanimously agreed, but I suspect that an extra 7 cents per share is not going to thrill Clearwire's investors.

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Investopedia: Another Quarter Of Discontent For Energy Services

It looks like the energy services sector isn't going to deliver any sort of Christmas miracle this year. While I don't believe investors were expecting especially strong results for the calendar fourth quarter, early guidance is suggested that this is going to be a disappointing end to what has been a pretty dismal year.

Rigs Keep Easing
The data from Baker Hughes (NYSE:BHI) on global rig counts for November was not especially strong. The United States rig count fell more than 1% from October and the November 2012 count was about 10% lower than the 2011 figure, as producers continue to cut back in the face in the face of low natural gas prices.

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Investopedia: Adobe's Model Still In Transition, But It Seems To Be Working

With Adobe (Nasdaq:ADBE) is still in the midst of a significant change in its business model (towards a subscription-based model), it is likely that it is still going to take a few more quarters for investors to really dial in their expectations. Nevertheless, it does look as though this switch holds the potential of rejuvenating a model that some thought was bereft of growth. Adobe's valuation isn't as compelling as it was just a quarter ago, but this remains a quality company trading at a discount.

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Friday, December 14, 2012

Investopedia: The Long Awaited Sprint-Clearwire Deal Is Closer Than Ever

Given large ongoing losses and sizable funding needs, most investors have considered it a given that Clearwire (Nasdaq:CLWR) will be acquired. With its approximate 50.5% ownership stake, meaningful high-end spectrum needs and a recent influx of capital from Japan's Softbank, Sprint (NYSE:S) was seen as the most likely candidate. Now it seems like Sprint is finally making its move, but the market reaction and relative valuation suggest Sprint may have some work left to do.

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Investopedia: VeriFone Loses The Tailwind Again

Something is going on with VeriFone (NYSE:PAY), and it's not good. Not only is the stock well off its highs, but whatever momentum that the company had gained since its fiscal third quarter miss is likely to evaporate with another miss. Although I don't think VeriFone is a fundamentally flawed business, it may well be transitioning away from that phase of its corporate life where investors look past almost any bad news in the pursuit of growth.

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Investopedia: MetLife's Guidance Reflects A Wider Problem

For readers who think that the United States government bends over backwards to accommodate the financial industry, MetLife's (NYSE:MET) discussion of guidance for the remainder of 2012 and 2013 is a must-read. While the troubled asset relief program and a variety of other government programs clearly allowed financial companies to shore up their capital, the reality is that the zero interest rate policy and "QE infinity" are taking a toll on companies that earn their living on interest rate spreads.

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Investopedia: Joy Global And The Coal Conundrum

While it's hardly news that investors have sold all manner of heavy industrial OEMs as 2012 has progressed, and Joy Global (NYSE:JOY) has been hit a litter harder than most. Without the offsetting construction or agriculture businesses of Caterpillar (NYSE:CAT) or Deere (NYSE:DE), or the industrial compressor business of Atlas Copco (OTC:ATLKY), Joy Global shares have had a tough year. Although this large mining concern ended its fiscal year on a relatively positive note and valuation is not particularly demanding, these shares figure to be more volatile than average as investors guess about the timing of the eventual coal recovery.

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Investopedia: The Street Seems All In On Ciena's Recovery

Optical networking company Ciena (Nasdaq:CIEN) reported sales below expectations and lowered its guidance for the fiscal first quarter ... so of course the stock is up about 2% (as of this writing) after the announcement. That's just part of the weirdness that surrounds providers of carrier equipment these days - while 2012 was a pretty rough year, analysts and investors expect big carriers like AT&T (NYSE:T) and Verizon (NYSE:VZ) to start spending again soon. Although Ciena is difficult to value today because of the uncertainty of the pace of the spending recovery, I still believe this is an interesting stock for aggressive investors thinking a few moves ahead.

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Investopedia: Will This Aerospace Cycle Finally Let Hexcel Take Off?

It may sound contradictory, but Wall Street is often both predictive and reactive. To that end, the stock of carbon fiber specialist Hexcel (NYSE:HXL) has done pretty well since 2009 on the basis of investor expectations for more composite material content in commercial aerospace. At the same time, though, it's well worth remembering that Hexcel has struggled to deliver consistent, impressive margins and returns on capital. If Hexcel can't find a way to establish better peak earnings and cash flow potential, it may be difficult for these shares to outperform.

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Investopedia: Pier 1 Continues To Perform At A High Level

It's a beautiful thing when a company makes the transition from turnaround to good operator, and home furnishings retailer Pier 1 (NYSE:PIR) seems to be doing exactly that. Comp growth continues to impress, margins are looking good and the company has several initiatives underway that should drive higher sales and/or margins. I wouldn't be in any hurry to leave this party were I already in the room, but new investors might want to consider the valuation today before diving in with their own money.

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Thursday, December 13, 2012

Seeking Alpha: The Occultation Of Rigel Pharmaceuticals

Investors in Rigel Pharmaceuticals (RIGL) got another very much unwanted dose of bad (or at least confusing) data on Thursday, with disappointing OSKIRA-4 Phase 2 data on fostamatinib. While there are additional studies still under way and scenarios under which this drug could still make it, Rigel Pharmaceuticals is well on its way to being one of my worst biotech calls, and the risk on this stock is definitely running high.

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The Occultation Of Rigel Pharmaceuticals

Investopedia: Bull Vs. Bear - A Deal For The Fiscal Cliff Won't Be Finalized Before The End Of December

Question: Is a deal for the fiscal cliff going to happen?

Bear's Response
When considering the question of the upcoming "fiscal cliff" (the expiration of various tax cuts and the simultaneous automatic cuts across a variety of federal budget items), I'm reminded of a famous quote from Winston Churchill, "Americans can always be counted on to do the right thing ... after they have exhausted all other possibilities." While I do believe Congress will have little choice but to find a compromise that undoes the growth-damaging combination of higher taxes and lower spending, it will not come until 2013.

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Investopedia: A Few Hiccups Aren't Going To Derail Costco

As one of the strongest retailers in the United States (not to mentioned one of the best-liked), Costco (Nasdaq:COST) already has a lot going for it. Not only is Costco already an exceptionally efficient retailer in terms of generating sales per square foot, the company still has ample organic expansion potential in the U.S. and abroad. The down-side to this story is not too surprising - Costco's success and popularity are well-known among investors, and the stock doesn't offer a compelling bargain relative to expected above-average growth rates.

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Investopedia: Molycorp Facing Even More Uncertainty, And At The Wrong Time

Wall Street hates uncertainty, but rare earth miner Molycorp (NYSE:MCP) is providing exactly that right now, and along multiple lines. There were already sufficient worries in the market about the future of rare earth oxide (REO) prices and whether years of elevated prices had permanently destroyed demand, and the announcement of an investigation by the Securities And Exchange Commission (SEC) didn't help. Now the company has to deal with the unexpected resignation of its CEO at a time when it also likely needs to arrange additional financing.

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Investopedia: Is A Deal For Gardner Denver What SPX Really Needs?

Rumors have been swirling for a while about whether industrial compressor, blower and pumpmaker Gardner Denver (NYSE:GDI) would, in fact, reach a deal to sell itself and whether SPX (NYSE:SPW) would make an aggressive play for this company. With rumors now heating up that the two companies are in exclusive talks, it's very much worth asking whether this is really a good deal for SPX or Gardner Denver shareholders.

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Investopedia: How Far Can Philips' Turnaround Take The Stock?

I have to be honest right off the bat - I didn't think Philips (NYSE:PHG) had what it would take to really get the business turnaround they needed. Yet, here we are with this European conglomerate reporting steady mid-single digit organic growth and improving margins. While I definitely missed the potential for Philips' self-improvement in 2012 (and the stock performance that has doubled the S&P 500), I still have some long-term fundamental questions about where Philips stands against the competition and whether sell-side analysts (and investors) are expecting too much from this company.

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Investopedia: Investors Seem To Already Buy Into Procter & Gamble's Turnaround Story

Turnarounds can be great investments, but you generally have to buy in at a point where the Street is still questioning the survivability of the company and pushing for dramatic, sweeping changes. In the case of Procter & Gamble (NYSE:PG), the pressure is still very much on management to deliver better results, but the shares don't reflect all that much uncertainty or pessimism about the company's prospects. On the contrary, it looks like the Street already pretty much expects this story to have a relatively happy ending.

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Investopedia: Honeywell Battens Down The Hatches

More and more it's looking like 2013 is going to be a challenging year for a variety of businesses. While it's convenient (and not entirely inaccurate) to lay some of this at the feet of the "fiscal cliff," it also looks like the strong industrial rally in North America is petering out, while Europe and China aren't looking strong enough to take up the slack. With all of that in mind, Honeywell's (NYSE:HON) guidance update was not all that surprising. Though this remains a generally underrated conglomerate, the shares don't look like a tremendous bargain today.

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Wednesday, December 12, 2012

Seeking Alpha: Taking Setbacks In Stride, MTN Group Should Be Ready To Outperform

To at least some extent, this has been one of those "if it can go wrong, it will" years for South Africa's MTN Group (MTNOY.PK). And yet, despite setbacks in Nigeria, Iran, and Syria, MTN Group continues to post solid revenue growth, expanding margins, and excellent returns on capital, while generating more cash than it needs to run the business. While political risk is always going to shadow MTN Group, this looks like an undervalued play on one of the best remaining growth stories in mobile services.

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Taking Setbacks In Stride, MTN Group Should Be Ready To Outperform

Seeking Alpha: Is Bausch & Lomb The Next Multibillion-Dollar Deal?

Could another major med-tech M&A transaction be on the way?

Rumors are now in flight that large private equity group Warburg Pincus is ready to sell its large eye care business Bausch & Lomb. While recent reports suggest that Warburg would prefer an outright sale at this point, it sounds like an IPO could be in the works as a back-up plan. But the larger question for investors is whether there are any motivated bidders out there likely to meet Warburg's price target.

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Is Bausch & Lomb The Next Multibillion-Dollar Deal?

Seeking Alpha: YM BioSciences's Strange Journey Comes To A Strange Conclusion

Nothing about YM BioSciences (YMI) was ever easy or entirely normal, so I suppose it's no great surprise that this company's final story is a more than a little bit out of the norm. Although it was not surprising to see that YM BioSciences got a buyout bid, the fact that it is Gilead Sciences (GILD) stepping up for the deal certainly surprises me.

The Deal To Be
Assuming that the deal goes through as announced, Gilead will be acquiring YM BioSciences for $2.95 per share in case. That's a bill of about $510 million for Gilead, though YMI's cash on hand of about $125 million offsets the net price by a meaningful amount. As a development-stage biotech, YMI has no revenue or profits, though I would think Gilead should be able to make use of at least some of YMI's accumulated tax losses.

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YM BioSciences's Strange Journey Comes To A Strange Conclusion

Investopedia: Rumors About A Diageo-Beam Tie-Up Are Interesting, But Not Too Likely

December is the season for rumors in the financial markets, as there's relatively little actual news for reporters and columnists to discuss. With that in mind, a weekend piece in Britain's Sunday Telegraph regarding a potential merger between Diageo (NYSE:DEO) and Beam (Nasdaq:BEAM) should be taken with more than a few grains of salt.

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Investopedia: Should November's Rail Data Encourage Investors?

In many respects, November's rail carload data (as reported by the Association of American Railroads (AAR) in its monthly Rail Time Indicators report) is more of the same, only more so. United States railroads continue to see an ongoing erosion of coal business, but underlying industrial demand continues to be relatively positive. Although a host of U.S. industrial companies continue to express caution about demand for the first half of 2013, carload traffic suggests that there may not be as much downside risk as feared.

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Investopedia: A123's Story Ends With A Zero

With the bankruptcy auction of defunct battery developer A123's (OTC:AONEQ) commercial assets now complete, the story is over and common shareholders will walk away with a total loss. Not only does the A123 story serve as a bitter reminder of the sizable hurdles that new energy-tech companies must face, but also the dangers of buying into the hype at the cost of scientific and economic realities.

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Investopedia: Is Alcatel-Lucent Playing Its Last Cards?

To say that Alcatel-Lucent (NYSE:ALU) is in serious trouble is to say that water is wet, as these shares have seen a bumpy ride down from the tech bubble peaks in 2000. Despite a lucrative patent estate and solid technology, the company has struggled to translate its intellectual property into successful products and has largely failed to compete effectively with other telco equipment rivals like Cisco (Nasdaq:CSCO), Juniper (Nasdaq:JNPR), Huawei and ZTE (OTC:ZTCOY). Now with rumors flying that the company is considering using its patent portfolio to secure financing, it's worth asking if Alcatel-Lucent is down to its final cards to play in its ongoing effort to turn around.

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Tuesday, December 11, 2012

Seeking Alpha: Does SABMiller Taste Great, Or Is The Valuation Too Filling?

This has been a good year to own companies in the adult beverage trade, as stocks like Anheuser-Busch InBev (BUD), Diageo (DEO), Pernod-Ricard (PDRDY.PK), and Heineken (HINKY.PK) have all outperformed the S&P 500 by a significant margin. The world's second-largest brewer, SABMiller (SBMRY.PK) belongs on that list of outperformers as well, as investors have bid up the shares on improving volume growth and margins. Looking out into 2013, though, the question is whether SABMiller is still poised to be an outperformer.

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Does SABMiller Taste Great, Or Is The Valuation Too Filling?

Seeking Alpha: Can Amgen Unlock DeCODE's Value?

The biotech scrap heap isn't always the most promising place to go shopping, but biotech giant Amgen (AMGN) is going to give it a try, announcing on Monday that it will acquire Iceland's deCODE Genetics for $415 million in cash. That's a pretty stunning reversal for a company that sold for $14 million not so long ago, and it remains to be seen whether Amgen can find the key to unlock the value that many have seen in deCODE's approach for more than a decade.

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Can Amgen Unlock DeCODE's Value?

Seeking Alpha: Taking The Bitter With The Sweet At Senomyx

It's a fact of the investing life that when you swing for the fences, you will occasionally strike out. Thus far, owning shares of "bioflavor" developer Senomyx (SNMX) has been a frustrating and losing experience for most investors. While there is still considerable potential in this very under-followed stock, investors have to accept a biotech-like risk that Senomyx will ultimately be a bitter experience and a total washout as a stock.

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Taking The Bitter With The Sweet At Senomyx

Monday, December 10, 2012

Investopedia: How Debt Limits A Country's Options

Debt is an evergreen topic in financial writing, whether it involves the perks and perils of individual consumer debt, corporate debt or national debt. While the national debt of the United States has never really ever slipped out of the national dialogue, events over the past decade have intensified the discussion.

Tax cuts, spending on multiple wars and a major recession induced by the collapse of the housing market have combined to spike the U.S. debt burden, while sovereign debt issues have all but blown up the economies of Southern Europe (not to mention the banks, insurance companies and other investors who bought that debt). What's more, debt has started to increasingly factor into bilateral and multilateral political squabbles. While debt is fundamentally necessary to the operation of a national government, it is increasingly clear that debt can be limiting and dangerous.

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Investopedia: Titan Machinery's Model is Still Risky, But The Growth Is There Today

The markets have seen plenty of stories like Titan Machinery (Nasdaq:TITN) - stories where a company uses debt to consolidate a highly-fragmented, low-margin industry where the hope is that scale can ultimately improve those margins. Many of these stories hit the rocks when acquisition-fueled growth peters out and/or operational missteps make the debt load unmanageable. There's no guarantee that Titan Machinery will meet this same fate, but investors would do well to realize the risks that come with the apparent undervaluation here.

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Investopedia: Broadcom's Analyst Day Supports The Bulls

Analyst days are supposed to be a chance for management to give analysts a solid run-down on the company's priorities and strategic direction. When done right, they also tend to have analysts and investors walking out the door feeling a little better about the company. Broadcom's (Nasdaq:BRCM) analyst day pretty much checked all of the boxes that it needed to, and this remains a chip stock well worth consideration from most investors.

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Investopedia: Volatile Smithfield Delivers A Good Quarter

As I've written a few times before, when it comes to protein producers such as Tyson (NYSE:TSN), Smithfield (NYSE:SFD) and Pilgrim's Pride (NYSE:PPC), above-average year-to-year and quarter-to-quarter volatility is just the way these businesses are. While Smithfield delivered a surprisingly good fiscal second quarter, investors considering these shares need to realize that this is a tough industry in which to try to earn long-term economic returns.

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Investopedia: Palo Alto IPO Slide Is Getting Interesting

It's not uncommon at all for tech IPOs to selloff, sometimes sharply, once the hoopla of the IPO fades - Facebook (Nasdaq:FB) being perhaps the best recent example. While Palo Alto Networks (NYSE:PANW) debuted to much fanfare, the shares have been carving out new 52-week lows on worries about the macro IT environment and fading stock momentum. Palo Alto is still a long distance from value, but these shares are a lot more interesting today than just one quarter ago.

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Sunday, December 9, 2012

Commodity HQ: 5 Of The Biggest Oil Finds In History

Oil makes the world go ’round, and finding more oil is one of the principal goals of multinational energy giants like Exxon Mobil (XOM), British Petroleum (BP) and Chevron (CVX). Unfortunately, it has become harder and harder to find fields that really move the needle for corporate or national reserve totals. Nevertheless, just because it is difficult does not mean it is impossible, and investors can look back to some notable successes in the history of the oil industry.

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5 Of The Biggest Oil Finds In History

Commodity HQ: A Deeper Look At Iran's Commodity Industry

Iran is quite possibly one of the best-known and least-known countries in the world for American investors. Tense, if not outright hostile, relations between Iran and many Western countries have kept it in the news, but relatively few investors seem to appreciate Iran’s size, demographics (it’s a very young country), and economic prospects. In recent years sanctions have had a massive impact on Iran’s economy, but it remains a major player within OPEC and in the global energy market.

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A Deeper Look At Iran's Commodity Industry

Commodity HQ: A Deeper Look At Australia's Commodity Industry

One of the wealthiest countries in the world, and the richest in Asia in GDP per capita terms, Australia is an unusual mix of a modern market economy with a large commodities-driven export infrastructure. Despite the influx of wealth created by its natural resources, Australia has never been particularly successful in developing a large manufacturing base. What’s more, the country has run large and persistent current account deficits for over a half-century. Nevertheless, Australia has very significant and efficient mining and agricultural sectors, and ranks highly in the world in many categories.

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A Deeper Look At Australia's Commodity Industry

Commodity HQ: A Deeper Look At China's Commodity Industry

Although the geographical size of China is perhaps not that difficult for North Americans to appreciate, their population is another matter. As China has become the second-largest economy in the world, it is without question transformed into an enormous force in the world’s commodity markets; so much so, in fact, that the recent commodity supercycle is now generally seen as a byproduct of China’s emergence.

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A Deeper Look At China's Commodity Industry

Commodity HQ: A Deeper Look At South Africa's Commodity Industry

South Africa is the largest economy of Africa, and it accounts for almost one-quarter of the continent’s GDP. The path to this status has not been an easy one, however, as the country languished under sanctions in the 1980s tied to the government’s apartheid policies. While South Africa has a relatively well-developed manufacturing sector by the standards of African economies (and developing economies in general), a meaningful percentage of the country’s economy still revolves around commodities.

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Friday, December 7, 2012

Seeking Alpha: Should The Amylin Example Discourage Amarin Shareholders?

One of the biggest decisions in the life of any biotech is whether to keep a promising compound in-house and market it directly, or whether to partner with a larger pharmaceutical company and collect royalties. While there have been a number of notable go-it-alone success stories (including names like Alexion Pharmaceuticals (ALXN), Gilead (GILD), and Amgen (AMGN)), there have also been multiple of examples of companies that essentially shortchanged themselves by marketing a compound on their own.

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Should The Amylin Example Discourage Amarin Shareholders?

Seeking Alpha: Can Labelmaker Multi-Color Make The Leverage Stick?

Multi-Color (LABL) is the sort of obscure small-cap company that I love; the company's products are ubiquitous and essential (product labels), but nobody really ever thinks about them. What's more, Multi-Color is a good play not only on the overall volume growth of consumer goods, but also on the increasing sophistication of labels and the very fragmented nature of the industry. While Multi-Color is not a very liquid or well-covered stock, I believe patient investors will be impressed with what this company becomes over the next three, five, or 10 years.

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Can Labelmaker Multi-Color Make The Leverage Stick?

Investopedia: Bull Vs. Bear - Special Dividends Are A Good Thing

Question: Is early payment of dividends an effective way of avoiding the tax due to the fiscal cliff?

Bull's Response
There's really only one fundamental reason for publicly-traded companies to exist - to pool capital from shareholders, invest it in projects that generate positive net economic returns on that capital and return the capital to shareholders. Whatever legal moves a company can take to maximize the value of the capital they return to shareholders is, on balance, a good thing.

So too with the recent spate of special dividends and accelerate dividend payment schedules in light of the potential tax ramifications of the fiscal cliff.

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Investopedia: lululemon Continues To Deliver High-Priced Performance

"Pay for performance" has long been a mantra on Wall Street, and it's a little harder to condemn athletic apparel maker lululemon athletica (Nasdaq:LULU) for its valuation when it continues to perform as well as it does. Not only does the company continue to move truly impressive quantities of premium-priced merchandise, but the company's cautious inventory and expansion philosophies mitigate some of the normal retailing risks. All of that said, investors aren't getting any bargains in these shares.

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Investopedia: Toro And The Runaway Recovery

Wall Street is always looking for a rebound play, and there has been no shortage of interest in going long on the housing/consumer recovery this year. While data from home improvement superstores like Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) does indeed support the idea that the worst has passed, investors have been pretty aggressive in bidding up many residential housing plays. Toro (NYSE:TTC) remains a top-notch manufacturing company, but absent a buyout bid, it seems hard to see how cash flow is going to grow fast enough to leave much upside on the table for today's buyers.

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Investopedia: Brown-Forman May Struggle To Keep This Premium

When times get tough, investors will hit the bottle. Although sales of beer and spirits aren't quite as invulnerable to economic conditions as some investors like to believe, they are a lower-beta product category. All of that said, and allowing for the good success seen lately in promoting new internally-developed products and boosting margins, it's hard to see how Brown-Forman (NYSE:BF.B) keeps its elevated premium for the long haul.

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Thursday, December 6, 2012

Seeking Alpha: Challenges Abound, But Overlooked Microsemi Should Be Ready To Deliver

Small-cap chip company Microsemi (MSCC) gets a lot of flak for what it is (highly exposed to defense) and what it isn't (a fast-growing mobile device story), but the fact remains that this company has grown revenue at a 20% compounded average rate over the past decade. What's more, the company is offering a rare combo - a good legacy business where competition faces an uphill battle, coupled with organic growth opportunities in growth markets and positive margin leverage.

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Challenges Abound, But Overlooked Microsemi Should Be Ready To Deliver

Investopedia: Oxford Industries Experiences Some Growing Pains

Change can be painful, and while Oxford Industries' (NYSE:OXM) move to a more proprietary and aspirational product assortment has produced solid gains for long-term shareholders, there has been a lot of volatility along the way (shares went from over $50 in 2007 to below $5 in 2009). Oxford's third quarter is perhaps a microcosm of some of those challenges - top-tier brands like Tommy Bahama and Lilly Pulitzer continue to grow well, but the Ben Sherman and legacy Lanier businesses are struggling and it's taking a lot of money to support the company's hybrid direct retail/wholesale model.

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Investopedia: Is TIBCO's Stumble An Early Christmas Gift?

Back in March, I wrote that investors were only likely to see TIBCO Software (Nasdaq:TIBX) trade at a discount to fair value "if the company significantly disappoints the Street." Well, the company did just that on December 4, announcing a nearly 10% revenue miss and a bigger miss in earnings per share terms. While TIBCO just bought itself a spell in the penalty box, risk-tolerant investors may want to take this opportunity to check out one of the few quality independent middleware companies left on the market.

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Investopedia: Freeport McMoRan Announces A Real Doozy

Shareholders of copper giant Freeport-McMoRan (NYSE:FCX) had been waiting a while for the company to "do something," and they certainly got their wish on Wednesday, though almost certainly not in the fashion they were expecting. While many analysts and investors had been looking for Freeport-McMoRan to announce a big move with its capital, either a sizable buyback/special dividend or further diversification in mining, almost nobody expected the big move into energy that the company announced Wednesday morning.

Not only does the sheer size of the transactions make this a risky move for Freeport-McMoRan, but so too do the details. In buying Plains Exploration & Production (NYSE:PXP) and McMoRan Exploration (NYSE:MMR), Freeport is buying two companies that are not exactly non-controversial assets in their own right. Consequently, this looks like a pretty high-risk/high-reward transaction for this copper mining giant.

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Investopedia: Pandora Still Has Hope

Why any company would want to tie themselves in any way to Pandora's Box (which contained all the evils of mankind) is beyond me, but there's more to Pandora (NYSE:P) than a name. Pandora has quickly established itself as the dominant Internet radio platform, but many investors have struggled with reconciling Pandora's market share to its ability to monetize its user base and (eventually) post solid operating leverage. Although the post-earnings reaction on December 5 seems overdone, it's not really surprising given how much of Pandora's value lies in the future and how sensitive that value is to even small changes today.

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Wednesday, December 5, 2012

Seeking Alpha: FEMSA May Just Be Getting Started

Mexico's FEMSA (FMX) has already accomplished quite a lot. Not only is Coca-Cola FEMSA (KOF) the second-largest Coca-Cola bottler in the world and the sole supplier of brands like Coke and Fanta to the world's second-largest soft drinks market (Mexico), but FEMSA also operates OXXO, one of the most profitable and well-run retail operations in Mexico. The stock certainly has reflected this success, with shares up nearly 50% over the past year and nearly 200% over the past five years, but shareholders may have even greater things to look forward to in the coming years.

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FEMSA May Just Be Getting Started

Investopedia: Will Pep Boys Ever Show Real Growth Again?

By and large, the U.S. retail world is not forgiving to companies with failed business plans. And yet, Pep Boys (NYSE:PBY) continues to stubbornly hang on. Despite a turnaround process that is going on 15 years now, it's still unclear to me how the company has a leveragable competitive advantage in the auto parts or service market. Although improvement to just sub-optimal levels of performance (relative to industry standards) would likely drive decent gains in the stock, I'm not sure Pep Boys is a stock for any but the most risk-tolerant turnaround investors.

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Investopedia: Beneath The Surface, Bank Of Montreal Not So Strong

Bank earnings are admittedly foggy at the best of times, and it only gets worse when the size of the bank in question increases. That said, Bank Of Montreal (NYSE:BMO) increasingly looks under pressure when it comes to core growth. With Canada potentially facing a housing crunch of its own and BMO's assets in the United States still underperforming, shareholders ought to ask themselves if the discount in BMO's price really compensates them for the risks.

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Tuesday, December 4, 2012

Investopedia: If You Can't Beat The Taxman, Outrun Him!

Economic theorists warn that fiddling too much with tax policy provides incentives for market participants to devote time and energy to managing their tax exposure, as opposed to going about the productive work that generates that taxable income. The last few weeks have suggested that those theorists are onto something, as a variety of companies make moves designed to end-run the upcoming changes in tax policies tied to the fiscal cliff.

Many companies, including
Costco (Nasdaq:COST), have announced special dividends to be paid ahead of the year-end as a means of transferring more cash to shareholders before taxes on such distributions increase significantly. Now a host of companies are making slightly less dramatic, but still significant, changes to the timing of their dividend payments in order to avoid at least some of the effects of the fiscal cliff.

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Investopedia: Will SingAir's Pain Become Delta's Gain?

Plenty of investors, analysts and commentators have noted that the airline business is fundamentally lousy and one of the fastest routes to losing large amounts of money. There's ample evidence that that is more than just simple grousing over sour grapes - Warren Buffett's Berkshire Hathaway (NYSE:BRK-A) has struggled to make any real profits from its various investments in the sector, and even the well-respected Singapore Airlines (OTC:SINGF) has seen its nearly $1 billion investment in Virgin Atlantic do it almost no good at all. Now there are stories that SingAir is ready to cut its losses, and that American air giant Delta Airlines (NYSE:DAL) is eager to pick up the asset.

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Investopedia: Dean Foods Checks Another Major Item Off The To-Do List

The restructuring/repositioning of Dean Foods (NYSE:DF) has taken another significant step forward. On Monday before the open, the country's largest dairy processor announced that it had reached a long-awaited agreement to sell its Morningstar business. While Dean Foods got a reasonable price for this asset, it's still an open question as to whether Dean Foods' overall operating strategy can reward shareholders.

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Investopedia: Should Investors Direct Their Portfolio Toward DIRECTV?

Investors with a few gray hairs may remember when DIRECTV (Nasdaq:DTV) was a controversial stock, with plenty of doubters as to whether this company's satellite-based pay TV approach could ever make hay against likes of Comcast (Nasdaq:CMCSA). That debate is long over, and the company has proven that it can generate pretty significant amounts of cash flow. That doesn't mean that the stock still doesn't offer some controversy, though, with the debates now shifted as to whether the company can withstand the evolving competition of the pay TV market in the United States and continue to grow in Latin America.

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Monday, December 3, 2012

Seeking Alpha: BioMimetic Looks Like Serious Augmentation For Wright Medical

As a BioMimetic Therapeutics (BMTI) shareholder, I have long regarded a buy-out as the overwhelmingly logical end game for the company. While I would have initially preferred to see one of the ortho giants like Johnson & Johnson (JNJ), Stryker (SYK), or Zimmer (ZMH) make the bid, the combination with Wright Medical Group (WMGI) could ultimately prove a lot more powerful for both companies than the Street currently seems to believe.

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BioMimetic Looks Like Serious Augmentation For Wright Medical

Saturday, December 1, 2012

Investopedia: For OmniVision, Weird Is Just Its Version Of Normal

It seems like nothing is ever normal with CMOS image sensor company, OmniVision Technologies (Nasdaq:OVTI). Accept that and it can be an intriguingly volatile trading opportunity. While the stock has often been batted around on rumors, worries and hopes tied to adoption from key customers like Apple (Nasdaq:AAPL), now margins have become another big variable. Consequently, while very strong revenue guidance for the next quarter really jumps, so to does the possibility of ongoing margin pressure. Not surprisingly, that continues to make this a very difficult company to model and a difficult stock to recommend or own.

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Investopedia: ONEOK Backs Off The Bakken

A strange thing has happened in the ongoing development of the Bakken oil producing region of the United States. While more than a few writers and analysts have talked about producers in the Bakken region suffering from too little takeaway capacity, a large pipeline operator has canceled plans to build a pipeline that would have carried crude from the Bakken region down to the Cushing, Oklahoma hub. 

No Thanks, We're Fine
ONEOK Partners (NYSE:OKS) had planned to build the Bakken Crude Express Pipeline to connect multiple points in the Williston Basin (part of the Bakken formation) in Montana and North Dakota, a top oil producing state, to Cushing. The pipeline would have been about 1,300 miles long, carried about 200,000 barrels per day and covered much of the same territory as the Bakken NGL Pipeline project that is underway at a cost of around $1.7 billion.

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Investopedia: Kroger Makes The Best Of Tough Environment

For those who think supermarket operators can't produce worthwhile capital gains, Kroger's (NYSE:KR) roughly 18% move up over the past three months is a good counter-argument. What's more, while food retailing continues to be a tough business, made even more difficult by price competition from entities like Walmart (NYSE:WMT) and dollar stores and economic pressures on shoppers, Kroger continues to execute at a high level. Although this stock still does not look all that cheap on a cash flow basis, investors should never be quick to abandon well-run companies.

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Investopedia: Aspirational Shoppers Trip Up Tiffany

When you're a public company, investors' appetite for growth has to be taken into account when it comes to business strategy. I suspect this is part of the reason so many publicly-traded luxury brands have spent the last two decades targeting that "mass affluent" market. While that approach has generally earned these companies quite a lot of money on balance, it may have been part of what tripped up Tiffany (NYSE:TIF) this quarter. Even with the disappointment, though, this is still not what you'd call a cheap stock.

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Investopedia: Is Avago Preparing To Pop In 2013?

As a semiconductor stock with strong ties to the smartphone/tablet market, Avago (Nasdaq:AVGO) has been a part of that favored group of chip stocks ((which includes Qualcomm (Nasdaq:QCOM) and Skyworks (Nasdaq:SWKS)) that has generally outperformed its peers. Not only did Avago deliver growth in a tough quarter, but smartphone wins could make 2013 a strong year as well. Betting on better conditions for chip stocks has been a losing bet for most of 2012, but Avago remains a name worth knowing for more risk-tolerant investors.

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