While major brick and mortar chains like Walmart and Target are doing everything they can to boost their online sales, and Amazon.com is jumping into the world of big box retail by buying Whole Foods, smaller online retailers are stepping into a retail void that has opened up in some of the best territory on earth, Manhattan. Esther Fung reports in The Wall Street Journal that online retailers are being courted by the likes of the Feil Organization, a commercial real estate firm, and others like it that see e-commerce companies looking for ways to expand their on-the-ground operations. Fung … [Read more...]
The Enemy of My Enemy is My Friend in the Chip Industry
Intel and Advanced Micro Devices (AMD) are teaming up to battle against Nvidia with new chips aimed at gamers who want light laptops. A new laptop being produced by Intel will contain an Intel processor and an AMD graphics unit. Ted Greenwald reports: The chip is intended for laptops that are thin and lightweight but powerful enough to run high-end videogames—attributes that lately have been driving sales in an otherwise waning market for personal computers. It will be the competitors’ first collaboration since the 1980s, said analyst Patrick Moorhead of Moor Insights & Strategy, and … [Read more...]
Monday Melee: Small-cap Edition
Small Stocks Look Toppy What We're Reading Everyone's a stock market genius in a Fed-induced rally (Marketwatch) When not to load up on stocks (Fortune) Wanna be rich--get back to work! (The Guardian) Correlation and causation (Spurious Correlations) Know Which Fish Are Low in Mercury With This Chart (Lifehacker) … [Read more...]
Can Your Portfolio Take a 50% Loss?
It's impossible to have it all ways. In order to craft an investment portfolio that can act as an all-weather armadillo, you must be willing to forgo potentially substantial upside rewards to balance against the horror of a downside wipeout. If you are retired or saving for retirement in the not-too-distant future, you can easily get a knot in your stomach when you look at the basic math of downside portfolio protection. By example, when you lose 50% on an investment, you must make 100% the next trip to the plate just to get back even. And that's without considering the negative drag of … [Read more...]
Young Research’s Retirement Compounders
Young Research’s Retirement Compounders is comprised of dividend paying common stocks selected from the over 40,000 global publicly traded companies. The Retirement Compounders Program favors high dividend payers, those with a history of dividend payments, and companies with a long record of consecutive dividend increases. Some of the companies included in Young Research's Retirement Compounders program have paid a dividend every year for over a century. Others can boast a more than five decade record of annual dividend increases. The combination of high dividend payments today and dividend … [Read more...]
Economic Distortion the Play of the Day
The Institute for Supply Management’s December Manufacturing ISM Report on Business was ballyhooed by the market on Monday. The headline PMI increased to 53.9%, up 1.2% percentage points compared to last month. A reading above 50% indicates that the American manufacturing sector is expanding, and the higher the number the more accelerated the growth. Take a closer look at the numbers below and they’re decent, but mixed. Manufacturers’ backlogs of orders are decreasing, though at a slower rate than last month. And the time it takes for suppliers to deliver materials is dropping, an … [Read more...]
Apparel Stores Hit Hard by Rising Costs
This week’s Market Mover is an entire industry, apparel stores. In the past week stock prices of many apparel stores like Gap (NYSE:GPS), Pacific Sunwear of California (NASDAQ:PSUN), Aeropostale (NYSE:ARO), and New York & Company Inc. (NYSE:NWY) have fallen by more than 5% (Chart 1). With a combination of high raw materials costs for clothing inputs like cotton and rayon still elevated and continuing weak customer demand, the apparel industry is in a vice. While prices for cotton have come down, they are still well above prices of a year ago. Americans are buying less, as their real wages … [Read more...]
Capacity Utilization: 2 Sectors That Win
This month’s Industrial Production and Capacity Utilization report from the Federal Reserve fell short of economists’ predictions. Capacity utilization remained essentially flat in April, with growth failing to meet analysts’ expectations. Parts shortages created by the continued troubles in Japan contributed to the lackluster performance of American industry. If you’re not familiar with capacity utilization rate, it is the percentage of total possible production an industry is employing at any given time. In other words, if I own a machine that can make 1,000 baseballs a day, and I’m … [Read more...]
Kentucky Derby Owner Hits 52-Week High
This year a record-breaking 164,858 people attended the 137th running of the Kentucky Derby, breaking a 37 year record. The race was watched by an additional 14.5 million people on television. The stock price of the Derby owner, Churchill Downs Inc. jumped to a new 52-week high on the news, and in response to an earnings report that showcased strong revenues from a number of recent acquisitions. Shares of Churchill Downs (NASDAQ: CHDN) climbed to $45.08 on May 12. The acquisitions helped boost the results at Churchill Downs. To diversify away from horse racing, a seasonal industry, … [Read more...]
Coal, an Export Story
Over the past year U.S. exports of metallurgical coal (met-coal) have nearly doubled in dollar terms. Increased trade of metallurgical coal, used in the steelmaking process, has led to consolidation in the coal mining industry as major players scale-up to meet the demands of globalized competition. Toward that end, Arch Coal (NYSE:ACI) announced a deal to buy International Coal Group (NYSE:ICO) on May 2, pushing ICO’s price up 32.23% last week, making it this week’s Market Mover. Arch Coal’s management estimates that world steel consumption will increase by 60% over the next decade, and … [Read more...]