Market Ideas Late February 2015

We fully expect over the next 10-15 days we could see the S&P 500 at 2000 or below,said Matthew Tuttle of Tuttle Tactical Management,because:
1.Greece hasn't been solved.
2.Vladimir Putin.
3.The Fed is the 800-pound gorilla.Once the Fed exits,investors will go with it.*
Ultimately,crude probably does go lower,adds Dennis Gartman,editor of The Gartman Letter.We've broken some down-trend lines.Actually,I own a couple of oil companies to hedge my own position.
The fact is,stocks are going higher.Anybody short of stocks has been in a very difficult position,and will continue to be.The beach ball is still going higher.There's no reason to believe otherwise.A lot of people have been bearish-very smart guys-and they've been wrong.*
Steve Milunovich,IT hardware analyst and managing director at UBS,has reiterated his buy rating on Apple,with a 150.00 price target.Apple is reportedly working on an all-electric minivan type car.We do think the Apple ecosystem is increasing-very important.The change is,Apple is becoming pervasive in consumer lives.It still primarily monetises through its devices,but services is the glue to the story.
CEO Tim Cook has done a tremendous job of putting it all together.If they really do expand,the less they depend on the iPhone,and that's helpful.If Apple goes up to 160-170 dollars per share,it will have a market cap of a trillion dollars.*
Apple Computer(AAPL),iShares Core S&P 500 ETF(IVV),Chevron(CVX),Valero Energy(VLO)

Investing Today:Top Positions February 2015

I think stocks are fairly valued,relatively cheap compared to bonds,said famed money manager Bill Miller,Chairman and Chief Investment Officer at Legg Mason Global Asset Management;but I also think there are too many cross-currents here:Greece,Ukraine.There's a fair degree of interest in the Fed of moving off the zero mark.I think they want to do it because of the very low rates.I would think the 10-year Treasury will settle somewhere at 4-5%,its normal rate.
Amazon had a bad year last year,and after Q4 we went into it heavily,to our largest position.They have a market cap of 170 billion;they haven't sold stock;and they make a lot of cash,which to me is more important than profits.The Apple Pay and Apple Watch should do very well this year.If Apple struggles to reach her highs,the whole market struggles.Intrexon is a synthetic biology company.It's going to rewrite DNA,with applications for health care,energy and the environment making it a consumer company.
The S&P Homebuilders etf is a top ten position,along with Intrexon,Mr.Miller revealed.*
Halliburton Oil is cutting 8% of its workforce-not surprising since prices are still below the level needed to sustain the industry,according to energy analyst Pavel Molchanov of Raymond James Financial.Fifty or fifty-five dollar oil doesn't cut it medium-term.If oil stays in the fifties,global supply will decline in 2016,being self-correcting.Oil supply is stabilising by the end of this year,as supply will be flat or down slightly.*
Amazon(AMZN),Apple Computer(APPL),Intrexon(XON),SPDR S&P Homebuilders ETF(XHB),Halliburton Oil Company(HAL)

Investing Ideas November 2014

Yum Brands,parent of Kentucky Fried Chicken and Pizza Hut,has been upgraded from hold to buy at Janney Capital Markets,mainly on undervaluation.The firm got a new price target of 88.00 a share.*
Don't expect Apple Computer to go higher,according to Pacific Crest Securities.There is a potential lack of growth beyond the iPhone 6,and the iWatch and other products won't be able to make up for it.*
Lumber Liquidators was raised from equal weight to overweight at Morgan Stanley,with an 85.00 a share price target.The company has about 10% square footage growth and powerful store remodel/relocate benefits in its favour.Rising home prices and lower fuel costs should also help Lumber Liquidators.*
The low gas prices should also help big box retailers such as Target and Best Buy,says Stifel Nicolaus.Another plus is the strength of their online businesses alongside their brick and mortar stores.Wal-Mart has already seen share price appreciation from these factors.*
Yum Brands(YUM),Best Buy(BBY),Wal-Mart(WMT),Target(TGT),Apple Computer(AAPL)

Words of the Day:Cybersecurity,Antitrust and Alibaba

I'm paranoid enough that I get a new credit card every three months,said Ken Westin,Tripwire security researcher.I'm guessing at least one or two retailers a week are going to be coming out with an announcement.I'm expecting to see more shoes drop.
I think the Home Depot hackers are a much more sophisticated group than those that hacked Apple's iCloud accounts of celebrities.Odds are,they're operating outside the US.Once those credit cards get exfiltrated out of the US to Russia or Eastern Europe,it's almost impossible to follow up on the investigation.*
Microsoft has an antitrust law problem in China.Their office was raided by Chinese authorities in July.This is pretty serious for Microsoft,said David Evans,Vice President and Chairman of Global Economics.It's not clear what exactly the allegations are.The full array of claims I don't think we know at this point in time.I think the point is,it's a law that was passed in 2008.This is a baby antitrust law.It's really a very new thing in China.This is actually very quick for China to be taking the law so seriously and acting so aggressively.*
Alibaba,the Chinese Internet titan,has valued itself at 162.7 billion dollars prior to its initial public offering on the New York Stock Exchange later this month.Alibaba will announce share pricing on September 18 and go public the following day.Its publicity roadshow begins at the Waldorf Astoria in New York today,followed by two weeks of meetings with prospective investors.
Alibaba has spent 4.6 billion dollars on 2014 deals.There will be questions about this M&A strategy,as profit margins are crimped when a business expands too rapidly.The company also has an ownership structure that is not investor-friendly.Investors have less of a say in big company decisions than they would like.
It does concern me,says Jeff Sica,founder and president of SICA Wealth Management,because transparency is clearly one of the clouds on their horizon.The top question is,is Alibaba going to be able to operate under the standards of the NYSE?*
Microsoft(MSFT,Home Depot(HD),Apple Computer(AAPL)

GoPro Promises;Ricciardo Wins

GoPro is now promising retailers they will have the new version of their camera out in time for the holidays,said CNBC host Jim Cramer.It's something very important to the young people.It's like Apple,people waiting for the next iteration.*
Nothing is enough for the industrials right now.Maybe it's because housing is weak.I think maybe buyers want too much from the industrials right now.*
I think tech is next.You're not seeing the next leg up.You need to see Twitter deliver something.I'm talking about the zeitgeist of the market.I just worry that you could get a bleed-off.*
Consolidation is not a dirty word.It just happens to be where we are right now.We're consolidating,popular investing expert Jim Cramer noted.*
Daniel Ricciardo of Australia won the Formula One Hungarian Grand Prix Sunday.It was his second win in the last five races for Red Bull Racing.He waged a closely-fought battle with Spaniard Fernando Alonso,who came in second for Ferrari.The Ferrari fans were ecstatic just to get a podium finish,it's been such a tough season for them.They out-cheered the other fans.*
GoPro(GPRO),Twitter(TWTR),Apple(AAPL)

Tech and Oil Deals;Inflation Rising

I am looking for tech deals and oil deals,said CNBC host Jim Cramer.Oracle should buy Concur Solutions-it's such a great company,I can't believe it's still independent.Anadarko Petroleum's now a clear story.It's one of the great oil stocks that's been held back by litigation.
Hillshire Brands-this is Sara Lee.Sara Lee,congratulations."We break out Hillshire Brands and we see the hidden value in Hillshire." Now Pilgrim's Pride and Tyson Foods want to acquire Hillshire.
With Twitter,a lot of what's going on is,people realise the shares lockup has expired.If you can make Twitter into something that you don't have to tweet,but still use as your personal news service,then I am positive on Twitter.*
There's been significant buying of Interpublic Group,and people are saying it's by Elliot Management Group,points out Cramer's colleague David Faber;while Beats was bought by Apple for three billion.Apple seeks the most innovative products and services.They got Dr.Dre and Tommy Iovine in the Beats deal.It's a play for wearable tech.*
Fundamentally,inflation is picking up across the board,said John Brynjolfsson of Armored Wolf Investments.Wage inflation is picking up.
I don't think Fed policy has untimately changed the laws of physics.It doesn't make sense to have a zero percent Fed funds rate.It's not a logical equilibrium.I'm long bunds right now,short treasuries.I'm very uncomfortable with the size of the Fed's balance sheet.It can't get out of hand.That's why it's better to tighten sooner,rather than later.*
Apple(AAPL),Hillshire Brands(HSH),Anadarko Petroleum(APC)

Australian Bank Shares Strong,Hyundai Slims Down

The major Australian banks Commonwealth Bank of Australia,National Australia Bank and Westpac rose 0.8% in Monday trading,shrugging off news that the four biggest banks will be required to set aside a further 1% of equity capital.The ASX 200 index climbed 0.51%.*
Other Asian markets also rose Monday,cheered by the US beating its GDP forecast last week,and the IMF announcing Sunday it would be raising its outlook for US growth on these strong results and the budget deal recently signed in Washington.The Shanghai Composite was up 0.24%,while the Hang Seng climbed 0.44%.Japanese markets were closed for the Emperor's Birthday holiday.*
South Korea's Hyundai Group is selling its three financial units to raise cash to reduce debt,as well as concentrate on its shipping,logistics and elevator machinery businesses.The sale is expected to bring in 3.1 billion dollars.*
Apple Computer has reached a deal with China Mobile allowing it to sell the iPhone in China as of next month.The move is expected to present Samsung with major competition in the vast Chinese market.*
In golf,Europe came swiftly from behind to win The Royal Trophy match play tournament at the Dragon Lake Golf Club in Guangzhou,China by one point.It was Europe's fifth win out of seven.

"Jobs":Wozniak Dismisses Kutcher Version of Events

The film "Jobs" starring Ashton Kutcher and Lesley Anne Warren was released August 16.*I thought the acting was great,said Apple co-founder Steve Wozniak on Bloomberg TV.There were a lot of things wrong with the film.Ashton was too much of this fan thing,as in a great cult leader.Steve Jobs in real life kept trying to make his own computer.He failed with the Apple 3,with the MacIntosh.He was trying to kill the Apple 2 and do very unrealistic things to it.*In portraying the early days of the company,Kutcher was over-glorifying Jobs,dismissing others who were really giving Steve Jobs the goods.I read an early script and we kind of abhorred it.I was in a busy time.I am consulting in another film about Jobs,the Sorkin film,but Kutcher could have called me any time,and he didn't.*Steve Jobs was not that good at making a profit initially-not until he came back after having been fired.He was a visionary.He was always very friendly and nice to me.He was the greatest tech leader of our lives.He did a lot to make our lives better.*I really admire Steve Jobs,but I wasn't entertained by the Kutcher movie.*As for Apple today,the hot products don't happen every year-consider the prolongation of the iPhone.They usually do it by keeping things secret.I wouldn't judge Apple as being out of the innovation field yet.Sometimes Apple has a big surprise,Apple co-founder Steve Wozniak cautioned.*"Jobs" has an IMDb rating of 5.4 out of 10.In sum,Wozniak thought the acting was great,but didn't feel this movie about his colleague and friend Steve Jobs was an accurate version of events.*"Jobs" is currently showing in US theaters.The trailer is available on the IMDb website.*Apple,Inc(AAPL)

Investing Today:The Promise of the Mega Caps

The biggest bargains right now are the mega caps,said thought leader Joel Greenblatt of Gotham Asset Management.Google has huge cash flow and growing.Over time,it's gonna pay out a lot of money.So is Apple.
We put together portfolios of hundreds of stocks on the short and long side.If you own a bucket of Apples,you're gonna make a lot of money.The company is incredibly cheap right now,trading at only seven times free cash flow.It hides in the market in plain sight.
I can't really tell you if Apple itself is gonna work out,but if you own a bucket of Apple-type bets,you're gonna do very well.
We short about 300 stocks.At the top is JC Penney.It's eating through lots of cash,and it's doing it quickly.History would say this is gonna be a tough one to turn around.If you're gonna short a bucket of JC Penneys,you're gonna make a lot of money.I wish JC Penney well,but the odds are against them.It's possible to turn it around,but it's a tough road.
We're basically underwriting good bets and bad bets.On the straight numbers,Herbal Life is cheap,but we can't trust the numbers,so we don't play.We have no opinion on it.
We're in about the 68th percentile toward cheap.The expected return for large caps is 13-15%.You have to invest someplace.
I'd like to hide in a business that spins out a certain amount of cash every year and can adjust to what's happening in the economy.On average,companies don't spend their cash very well.If they either buy back stock below fair value or increase dividends,it might be better than going out and spending it,Mr.Greenblatt suggested.
Founder of hedge fund company Gotham Capital Management,Joel Greenblatt is the former chairman of Alliant Techsystems and is currently an adjunct professor at Columbia University Graduate School of Business.He holds an MBA from The Wharton School,and is the author of "The Little Book That Beats the Market" and "The Big Secret for the Small Investor:A New Route to Long Term Investment Success."
Google,Inc(GOOG),Apple Computer(AAPL),JC Penney(JCP),Herbal Life(HLF)

Should You Invest in Yahoo

Yahoo beat Wall Street expectations for both profit and overall sales in Q4,with a roughly 4% gain in sales.Display ads alone brought in 520 million dollars in revenue,which was down 10% on the year;but search revenue was 427 million,up from 376 million a year ago.
Eric Jackson of Ironfire Capital said Yahoo is gonna be the AOL of 2013.I think Yahoo has really been trucking along nicely.This year,there is a possible sale of Yahoo's stake in China's Alibaba.com,plus the monetisation of Yahoo Japan.
Marissa Mayer,Yahoo's fifth CEO in four years,is clearly focused on mobile,but it will take years.They're gonna focus on small acquisitions-companies with 50 employees or less whom they can partner with.Yahoo can actually partner with anyone-even Apple or Google.
Ms.Mayer,37,who had been one of Google's founding employees, is a genuine star of the business world.She's injected some dynamism into a company Wall Street had all but given up on.
Yahoo shares are at a three year high.Stifel Nicolaus raised the stock from a hold to a buy Monday.Yahoo closed flat at 19.34 in Monday after hours trading.
Yahoo Inc(YHOO)

Asia This Day:Sharp Unloads Plants;Vietnam Worried About China

Japanese electronics titan Sharp is proceeding with restructuring plans.The company had said it was facing a material possibility of liquidation,with a record four year loss.Three of its TV factories were finally sold to Apple outsourcer FoxConn,the Sankei newspaper quoted sources as saying.
The assembly plants in China,Malaysia and Mexico went for approximately 667 million dollars.Sharp had sought approval for the sale from its banks on September 26.The company is also shedding 10,000 jobs as part of its survival strategy.
Vietnam's Deputy Foreign Minister Pham Quang Vinh said that economic force should not be applied to settle China's teritorial disputes with its Southeast Asian neighbours.There has been talk within ASEAN that,in accordance with international law,the normal process of commerce and economic relations would be better than using trade sanctions.
Vietnam plans to meet with other Southeast Asian nations to discuss how to resolve territorial disputes with China,which has threatened to intercept their ships in the South China Sea.
Asian markets were up in Monday morning trading,hitting a seven-month high on good manufacturing and service sector reports out of China,which suggest that the five-year plan growth rate of 7% will be exceeded.New factory orders continued to pick up.
India's manufacturing hit a five-month high,according to its Purchasing Managers Index.Oil prices were also up to a nearly two-year high on the Chinese data.China consumes 11% of the world's oil supply.
The MSCI Asia Pacific index rose 0.44%.

Asia This Day:More Trouble At Foxconn;Chinese Stocks Cheap

The Southern European shock has had a very sizable global impact,according to Stephen King,HSBC Group Chief Economist.We're not seeing the same kind of China boost this time around.HSBC predicts 8.6% China growth,with global growth at 2.2% for 2012.
The number of Australian help wanted ads were down for the sixth straight month,says ANZ Bank.
Japanese markets are closed today for Fitness Day,while Chinese markets reopened after a week-long holiday.Chinese stocks are the cheapest they've been since 1997.Hong Kong's Hang Seng index was down 0.70 in Monday morning trading.
At a Foxconn factory in Zhengzhou,China,workers returned to their jobs today after 3-4,000 walked off Friday,closing down two shifts.They had gotten upset when quality control said they were scratching too many Apple iPhone 5 casings.This follows a riot the week before at another Foxconn plant in Taiyuan that also makes iPhone 5 casings.
The Zhengzhou workers complained that new quality standards  for iPhone casings were beyond the limit of their vision.A ruckus broke out over the issue resulting in property damage,injury and hospitalisation.

Violent Unrest Rocks Chinese iPhone Factory-Apple contractor reacts

Eyewitness photos reviewed by this blog show that a violent incident took place Sunday night and early Monday morning at a Foxconn plant in Northern China that makes the back casing of Apple's iPhone 5.The photos were posted to the Internet and depict a disturbing scene.Windows of a factory building were smashed.A gatehouse was overturned and the iron gate was smashed.A vehicle's windshield was busted.Helmeted riot police faced off with a large crowd of workers.The long line of riot police was supplemented by security personnel in camouflage fatigues.Hundreds of male workers milled about in a courtyard or parking lot outside the plant.
Apple contractor Foxconn said the incident began at its Taiyuan factory dormitory over a worker fight.A source with knowledge of the situation,however,pointed out that the ruckus actually began when security guards beat a worker up.The undercover source revealed that the factory is known for its harsh management and practically compulsory overtime work.
The riot erupted when about 2,000 workers protested security guards striking a worker at 10 pm local time.At the factory,there has been an unprecedented ramping up of  Apple iPhone 5 production.Foxconn said it is still investigating the incident.Spokesman Louis Woo said our decision is to take a day off for that particular plant today.There had been previous trouble at the Taiyuan factory.
Apple declined to comment on the story,The Wall Street Journal reported.
Apple Computer(AAPL)

Is Apple Making A Big Mistake

Apple is planning to introduce a small,cheap tablet with a 7" screen and selling for around 200 dollars.Is this the wrong move for the consumer electronics titan?They are planning to go after a small market,said Todd Schoenberger,Managing Principal at The BlackBay Group.This is gonna squeeze them down the road.It means thin margins.This will cut into the iPad's 37% profit margins.
Apple is a category-killer.Reversing course,going after another market that they don't need right now is disturbing to a shareholder and investor.The profit margins are gonna be squeezed.Apple's challenge going forward is to break into new markets,emerging markets.You don't want to overlap product development.This happens with car companies,and it doesn't work.
The BlackBay Group is an asset management firm.The Payson,Illinois company says it will organize and simplify your financial affairs and help you make the informed decisions needed to achieve your financial goals.
Apple co-founder the late Steve Jobs explicitly rejected the idea of a small tablet.On the other hand,it is inevitable that new CEO Tim Cook will want to leave his own mark and take his own risks.He won't just  be following the party line.Whatever changes he makes will be viewed critically by some.
Apple Computer(AAPL)

Should You Buy Apple Stock

There's a question as to whether Apple is still innovative enough.Daniel Ernst of Hudson Square Research says Apple is growing revenues 60%,with a 2% dividend yield.It's probably the fastest growing company in technology today.The recent Apple announcements show an improvement in their ecosystem.They significantly raised the bar for their competitors.Now Apple's Siri  feature,the digital assistant and knowledge navigator built into the iPhone 4S,can find information that's not on the web,which Google can't.Apple is also updating the Macintosh computer line.
Investors are fixated on the next big thing,but these things tend to run in cycles,Mr.Ernst points out.Hudson Square has a 700 dollar price target on Apple,with a buy recommendation.
Hudson Square Research serves institutional clients with fundamental equity research,assessing valuation,risk and opportunity.Based in New York,they focus on the technology,media,telecom and consumer sectors.The company was founded in 2004.
Apple(AAPL)

Shop Talk

Dear Readers,
In one of his first major initiatives,Apple CEO Tim Cook has made an epic journey to China.Find out why and what he has promised the Chinese Vice Premier.Also consider whether the company can possibly grow even more than the current 600 dollar-plus share price indicates.You can do all this at International Daybook,a sister blog to this one that is accessible from the link list in the right hand column.Hope to see you there.
Thank you for visiting today,
Andrew Taylor

Research in Motion Isn't Dead

With the ascent of the Apple iPad,many have abandoned Research in Motion as hopelessly behind in the telecom space.We've seen a total catharsis of the stock,says analyst Kevin Smithen of the Macquarie Group.The sentiment has never been worse.Yet its international business grew 68% year over year and has never been healthier.
The Chinese,Asian and European markets are largely prepaid.RIM is more competitive in those markets.Foreign carriers do not have the spectrum the U.S. does.
We're frankly perplexed at the valuation at a multiple typically reserved for companies that are highly leveraged and cyclical at the trough of the cycle.We rate the stock as an outperform.
We're not optimistic about their hope for the U.S. consumer business,but our 12 month price target for the stock is 40.00.They have tremendous Blackberry momentum in Indonesia and Thailand.We think it's the product of choice in those areas,Mr.Smithen noted.
Macquarie Group,Ltd. is a full service financial firm operating in 28 countries.It cites its expertise,performance and growth as strong points for its global clientele and investors.The Australia-based company has 320 billion dollars U.S. under management.
Research in Motion(RIMM),Apple(AAPL),Macquarie Group,Ltd.(MQG)

Asia This Day

FoxConn,a major outsourcer for Apple,Hewlett-Packard and Sony,has suffered a tragic fire and explosion in Chengdu,China.Three workers were killed.All operations at that plant and similar plants were shut down.
Computers are assembled at the stricken facility.iPad and iPhone production may also be hindered by the blast in a dust duct there,which caused smoke to billow from the plant.
FoxConn is based in Taipei,Taiwan.It was plagued by a rash of worker suicides last year.
Elsewhere in Asia,Thailand's GDP growth has exceeded expectations.It grew 3.0% on the year.The growth is being attributed to very strong exports,as well as robust domestic demand.
Asian markets were lower today,Monday,on account of fears about European debt and a Chinese regulator's call for better risk management by banks.
Hong Kong saw a temperature of 73F under mostly cloudy skies,with thunderstorms in the forecast.
Apple(AAPL),Sony(SNY),Hewlett-Packard(HPQ)

Fundamentals,Not Speculation

John Calamos,Sr.,founder of Calamos Investments,thinks that we're in a very volatile period.If you sit on the sidelines,you end up missing a lot of opportunities-such as in the global markets.Investors need to think more globally now than ever before.The fundamentals of growth stocks are very favorable.
Calamos is looking at some of the consumer product tech firms.The fundamentals of Apple are what make it attractive.We're entering a slow growth market phase that will favor active managers.We're favoring the tech and energy sectors for the road ahead.The commodity and energy plays are hedges against the dollar being devalued.
Financials are more of a speculative trading play,rather than fundamentals,Mr.Calamos said.It's more a hope,a speculation that things will get better.I'd rather own cheap growth stocks,the thirty-plus year veteran of asset management stated.Calamos Investments,located in Naperville,Illinois,offers a suite of diversified portfolios designed to help clients reach a wide range of investment goals.

Consumers May Hurt Tech

Cautious consumers may hinder technology firms in the second half of the year,Dan Niles of Neuberger Berman thinks.Mr.Niles pointed out that housing prices are down 14% year over year,and homeowners won't be able to refinance.As well,the biggest impact of high oil prices hasn't been felt yet.Drivers are taking an extra hit of 450 billion dollars U.S..We don't know how consumer demand for tech products will be,Mr.Niles added.By early July,their tax rebate checks will be spent,so back to school and Christmas sales could be tough.He's constantly talking to Chief Information Officers,and they're ratcheting back their tech purchase plans.It is not a good picture right now.Nonetheless,he sees promise in selected firms,such as MEMC Electronic(WFR),which makes solar wafers;eBay(EBAY),as people are looking for bargains;and Apple(AAPL),which is launching a new iPhone.It's the most defensive in the portfolio Neuberger Berman has been for several years,Mr.Niles noted.