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[ October 24, 2014 | Author: admin | Views: 11294 | Weather: | Mood: normal]

Apache Corporation (APA) is one of the world’s largest mid-major oil and gas exploration and production companies. They have a diversified portfolio of energy assets including on-shore, offshore, international, and domestic exposure. Diverse revenue streams protect Apache against volatility in any particular operating segment or region. Apache operates an "acquire and exploit" strategy, acquiring land previously explored by major oil companies and either boosting production or further exploring the land. This strategy is entirely dependent on management’s ability to identify underutilized assets and pay reasonable prices. Apache’s management has come under criticism lately for mis-execution and an apparent reversal of strategy announced on their February, 2013 conference call in the form of a potential $2 billion asset sale. Shares are down 28% over the last twelve months and presently trade below their book value of $76.84. The market is mistaken, and this note will explain the rationale behind management’s recent … Continue reading

[ October 24, 2014 | Author: admin | Views: 71321 | Weather: | Mood: normal]

Shares of Bed Bath & Beyond Inc. (BBBY) touched a new 52-week high of $76.94 on Friday, Jul 12, 2013 and eventually closed trade at $76.74. The stock has been performing well based on the companys robust quarterly results, impressive outlook and store growth initiatives. This specialty retailer has amassed a year-to-date return of 36.7%. Average volume of shares traded over the last 3 months was approximately 2,061K. Moreover, the company currently trades at a forward P/E of 15.3x, an 8.8% discount to the peer group average of 16.77x. The last traded price is 0.6% above the Zacks Consensus average analyst price target of $76.29. Additionally, the companys long-term estimated EPS growth rate is 13.6%. Investors are optimistic about this Zacks Rank #3 (Hold) stock as it constantly strives to expand and renovate its stores, boosting online presence, incorporating technological advancements and reviving its merchandise mix to enhance productivity. Such … Continue reading

[ October 24, 2014 | Author: admin | Views: 54023 | Weather: | Mood: normal]

In 2009 I called China the “Michael Jackson economy,” meaning that it was kept going by artificial stimulants, but that inevitably their cumulative effects would cause serious, and perhaps fatal problems. They mask the effect of the underlying ailment, and have severe side effects. China responded to the 2008 financial crisis by engaging in massive stimulus, and has inflated credit bubbles whenever growth stuttered in the past several years. Moreover, allocation of credit and investment in the economy is subject to substantial direct and indirect government control. Local governments invest massive amounts in infrastructure and housing projects, and the banking system is tilted to direct credit to large state enterprises that invest primarily in heavy industry-steel manufacture and shipbuilding, for instance. This “investment” can prop up GDP statistics, but they are recorded at cost, not value. (I recommend this David Henderson piece about t he perversity of GDP fetishism, and … Continue reading

[ October 24, 2014 | Author: admin | Views: 43238 | Weather: | Mood: normal]

With shares of Kraft Foods Group (NASDAQ:KRFT) trading at around $51.49, is KRFT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Lets analyze the stock with the relevant sections of our CHEAT SHEET investing framework: C = Catalyst for the Stocks Movement NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! Lets get right to it on this one. Positives: Productivity improvements Higher net pricing International expansion potential Analysts like the stock: 11 Buy, 10 Hold, 0 Sell Cost savings Brand loyalty New product rollouts 3.90 percent yield (higher than peers) Kraft Macaroni & Cheese revenue increased 11 percent year-over-year Velveeta revenue increased 12 percent year-over-year MiO seeing strong sales Strong cash flow Plans to reduce overhead Negatives: Poor debt management Advertising costs increased 20 percent last year Volume declines Cautious management Increased marketing … Continue reading

[ October 24, 2014 | Author: admin | Views: 34731 | Weather: | Mood: normal]

NEW YORK The amount of money investors borrowed from Wall Street brokers to buy stocks rose for a seventh straight month in January to a record $451.3 billion, a potential warning sign that in the past has coincided with irrational exuberance and stock market tops. Borrowing money or using leverage to buy a house or a car is a sign of confidence. But getting a loan from a broker to finance stock purchases might be a sign of overconfidence in the outlook for the market, especially one trading in record-high territory, as is the current Wall Street bull. “One characteristic of getting closer to a market top is a major expansion in margin debt,” says Gary Kaltbaum, president of Kaltbaum Capital Management. “Expanding market debt fuels the bull market and is an investors’ best friend when stocks are rising. The problem is when the market turns (lower), it is the … Continue reading