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It's often difficult to comprehend - much less internalize - the risks posed by the European sovereign debt crisis. But understand this: If Europe's problems aren't resolved in an orderly fashion, the stock market drops we saw last month will be small potatoes compared to the steep declines that lie ahead. So here's the solution: Let the Eurozone break up right now on its own terms. And let a new, stronger euro currency come as a result. At this point, that is the only viable solution to the problems Europe faces. So far, everything the European Union (EU) has done to try to subdue this outbreak has come up short. In spite of all the group's efforts, the European sovereign debt crisis continues to snowball, drawing more and more countries into the fold as it gathers momentum. The trendy solution is to simply expel the weaker members of the Eurozone. That would work if Greece was the only problem, but it's not. That's why a better solution would actually be the opposite - for the stronger countries to abandon the euro and create their own currency. European countries with strong economies - Germany, the Netherlands, Finland and Sweden - should simply walk out. I'd like to take credit for breaking new ground with this idea, but I can't. Former head of the Federation of German Industries, Hans-Olaf Henkel, writing in the Financial Times recently proposed this alternative solution as well. Still, it's worth subscribing to for a number of reasons. To begin with, it would absolve the strong countries of their liability to prop up their weak Mediterranean sisters. It was one thing when only small countries, such as Greece, Ireland and Portugal needed propping up. But now Spain, with a collapsed housing bubble and eight years of bad management, and Italy, with the most debt of any country in the EU, are at risk. Both of those countries' economies are large enough to put a sizeable dent in even Germany's vast wealth. Even more ominous, storm clouds have started swirling around France, which is still rated AAA but does not deserve to be. The country has not balanced its budget since the early 1970s, and public spending has soared on the back of hopelessly uneconomic schemes such as the 35-hour workweek. Now the French government has come up with a supposed solution - one that consists entirely of tax increases. So it's clear now that something must be done. And the solution I support has benefits for both strong and weak Eurozone countries. The Benefits of Breaking UpFor the stronger countries, leaving the Eurozone voluntarily and forming a new, stronger euro currency would have three immediate advantages. - First, since a number of countries would be involved, it would be a chunky currency, so speculators would not be able to drive it up to absurd levels and kill off exports.
- It would also allow the strong euro countries to manage their own monetary policy. That would wipe out the inflation threat and ensure that domestic savers were adequately compensated. It also would eliminate any need for bailouts among these countries.
- Finally, it would preserve the advantages of a foreign exchange free zone between these countries, so that transfers would remain cheap, without additional forex costs.
However, there are also benefits for the countries that stick with the euro, which would presumably weaken. These countries would not incur the stigma of failure that they would by leaving the euro themselves, yet its new weakness would improve their competitiveness. It would push up their economic growth rates and make it easier to bring their governments back into shape. Their inflation rates and interest rates would be higher, of course, as was the case for the Mediterranean countries before the euro was invented. However, their debts would remain denominated in euros, so they would not suffer the problems of the Asian countries that devalued in 1998 and increased their debt burdens and bankrupted the banks. Getting Past the European Sovereign Debt CrisisIt's likely that Greece's economy would be too weak to sustain itself even in the weaker euro, so it would have to return to the drachma, and its creditors would have to write off most of their debt. Still, that's a small problem in the context of the EU as a whole. An EU with two euros, plus peripheral currencies - such as the British pound, the Danish crown and the Polish zloty - would keep much of the benefits of the euro. For the most part there would only be one large foreign exchange market, rather than 17. However, the two blocs would be much closer to Robert Mundell's "optimal currency zones" than the oversized and unwieldy Eurozone. They also could coordinate fiscal and economic policies with each other, rather than ceding more power to the arrogant and unresponsive European Central Bank in Brussels. There's a sporting chance that the German Federal Constitutional Court will declare the bailouts of Greece and other countries to be unconstitutional and contrary to the 1993 Maastricht Treaty. In that case, a new currency bloc will be the only solution to the European sovereign debt crisis. But even without an adverse court decision, it represents a more attractive alternative to endless bailouts of the feckless laggards. There are, of course, several ways for investors to prepare for the Eurozone's inevitable disintegration. Right now exchange-traded funds (ETFs) represent the best opportunity to profit. The two best economies are Germany and Sweden, so at the very least you should consider the iShares MSCI Germany Index Fund (NYSE: EWG) and the iShares MSCI Sweden Index Fund (NYSE: EWD). Sweden is a member of the EU but doesn't use the euro. And Germany's economy will perform even better than it does now if it's ever liberated from the freeloaders it currently carries on its back. I'm also looking into some specific companies for subscribers to my Merchant Banker Alert. So if you're a member, stay tuned - and if you're not you can learn more by clicking here.
Parker Drilling (NYSE: PKD ) reported earnings on Feb. 21. Here are the numbers you need to know. The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Parker Drilling missed slightly on revenues and missed expectations on earnings per share. Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share shrank to a loss. GAAP loss per share shrank. Gross margins dropped, operating margins contracted, net margins increased. Revenue details
Parker Drilling chalked up revenue of $157.2 million. The five analysts polled by S&P Capital IQ wanted to see revenue of $159.7 million on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $181.1 million. Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates. EPS details
EPS came in at -$0.03. The six earnings estimates compiled by S&P Capital IQ anticipated $0.06 per share. Non-GAAP EPS were -$0.03 for Q4 versus $0.17 per share for the prior-year quarter. GAAP EPS were -$0.17 for Q4 versus -$0.77 per share for the prior-year quarter. Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates. Margin details
For the quarter, gross margin was 28.0%, much worse than the prior-year quarter. Operating margin was -5.0%, much worse than the prior-year quarter. Net margin was -12.8%, much better than the prior-year quarter. Looking ahead
Next quarter's average estimate for revenue is $167.8 million. On the bottom line, the average EPS estimate is $0.06. Next year's average estimate for revenue is $721.0 million. The average EPS estimate is $0.37. Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 642 members out of 668 rating the stock outperform, and 26 members rating it underperform. Among 105 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 101 give Parker Drilling a green thumbs-up, and four give it a red thumbs-down. Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Parker Drilling is outperform, with an average price target of $6.25. Is Parker Drilling the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report. - Add Parker Drilling to My Watchlist.
SavWatt USA, Inc. (SAVW.PK), pioneers in LED lighting and the Green revolution, recently announced that in cooperation with the City of Baltimore, SavWatt will receive grant funds from the Maryland Energy Sector Grant. This million dollar grant will offer companies the ability to take LEED certification classes. LEED is an internationally recognized green building certified program. LEED certification important as many new construction and government projects are required to meet LEED standards. SavWatt is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. SavWatt is a market-leading innovator of LED lighting. SavWatt’s product families include LED fixtures, bulbs, Street Lights and Parking Lights. Haynes International, Inc. (Nasdaq:HAYN), a leading developer, manufacturer and marketer of technologically advanced high-performance alloys, reported its financial results for the fiscal fourth quarter and twelve months ended September 30, 2010. In addition, the Company announced that its Board of Directors has authorized a quarterly cash dividend of $0.20 per outstanding share. TeleNav, Inc. (Nasdaq:TNAV), one of the largest global wireless location-based services providers with more than 17 million subscribers, reported that HP Jin, chief executive officer, and Douglas Miller, chief financial officer, will present at the J.P. Morgan SMid Cap Conference 2010 on Thursday, December 2 at 1:30 p.m. PST (4:30 p.m. EST) in New York, NY. Primo Water Corporation (Nasdaq:PRMW) reported that the underwriters of its initial public offering have exercised in full their over-allotment option to purchase an additional 1,250,000 shares of common stock. The option was granted in connection with PRMW’s initial public offering of 8,333,333 shares of its common stock at $12.00 per share, which closed November 10, 2010. The issuance of the additional 1,250,000 shares upon the exercise of the over-allotment option closed today. The net proceeds from the initial public offering, including the exercise of the over-allotment option, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $104.7 million.
Crown Equity Holdings Inc. (OTCBB:CRWE) announced recently that it has launched its crwenewswire.fr website to provide news in France’s native language. Crown Equity Holdings Inc. had previously launched its German website crwenewswire.de and is launching its Canadian website crwenewswire.ca shortly. “The new website is one step in many towards the company goal of expanding its footprint internationally, ” commented Kenneth Bosket, President and CEO of Crown Equity Holdings Inc. “Our goal for 2010 is to have all CRWE’s clients’ press releases, articles and news content published in every major financial country’s native language, as well as within cities of every state of our country,” stated Mr. Bosket. Crown Equity Holdings Inc. is a consulting organization which provides and assists small business owners with the knowledge required in taking their company public, and has re-focused its primary vision with its aligned group of independent website divisions to providing media advertising services, as a worldwide online media advertising publisher, dedicated to the distribution of quality branding information, as well as search engine optimization for its clients. TIBCO Software Inc.’s (Nasdaq:TIBX) Director of Life Sciences Industry Solutions for TIBCO Spotfire, Ben McGraw, will present a session titled “Making Sense of Clinical and Operational Data: The Challenges and Opportunities Facing Drug Development” at the annual Oracle Health Sciences User Group Conference. The conference’s goal is to facilitate the exchange of information among users of any products in the Oracle Health Sciences suite. The event is being held October 10-13, 2010 at JW Marriott San Antonio Hill Country Resort and Spa in San Antonio, Texas. TIBCO Spotfire, a product group of TIBCO Software Inc., is a leading provider of enterprise analytics software for next generation business intelligence. TIBCO Spotfire products offer a visual and interactive experience that helps professionals quickly discover new and actionable insights in information. Distinguished by its speed to insight and adaptability to specific business challenges, Spotfire rapidly reveals unseen threats and new opportunities, creating significant economic value. Spotfire customers include industry leaders among the Global 2000 that have deployed Spotfire analytics to gain an information advantage over their competitors. Tidewater Inc. (NYSE: TDW) reports that Dean E. Taylor, Chairman, President and Chief Executive Officer, and Joseph M. Bennett, Executive Vice President and Chief Investor Relations Officer, will present at the Johnson Rice & Company 2010 Energy Conference in New Orleans, Louisiana on Tuesday, October 5, 2010, at approximately 8:00 a.m. Central time. The presentation will be available via real-time webcast at http://www.tdw.com. Playback will be available on October 5, 2010, at approximately 9:00 a.m. Central time and will be available for ninety days. Upon completion of the presentation, the company will also file a Form 8-K with the SEC which will include a transcript of the presentation and a copy of the slides used by the presenters. In addition to the above referenced conference, Quinn P. Fanning, Executive Vice President and Chief Financial Officer, will present at the RS Platou (Asia) 2ndOffshore & Shipping Conference in Singapore on Friday, October 8, 2010, at 4:20 p.m. local Singapore time. Upon completion of the presentation, the company will also file a Form 8-K with the SEC which will include a copy of the slides used by the presenter. Tidewater Inc. owns 396 vessels, the world�s largest fleet of vessels serving the global offshore energy industry. Tim Hortons Inc. (NYSE:THI) reports the Company’s decision to sell its 50% interest in the Maidstone Bakeries business to joint venture partner Aryzta AG for gross proceeds of CAD$475 million. The Company has a net investment of approximately $75 million in this business, which in 2009 generated contributions to Tim Hortons earnings as follows: approximately $26 million in operating income, $22 million in net income and earnings per share contributions of $0.12 per share. The all-cash transaction is subject to receipt of regulatory approvals, and is expected to close before year-end 2010. Tim Hortons is the fourth largest publicly-traded restaurant chain in North America based on market capitalization, and the largest in Canada. Operating in the quick service segment of the restaurant industry, Tim Hortons appeals to a broad range of consumer tastes, with a menu that includes premium coffee, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches, wraps, hot breakfast sandwiches and fresh baked goods, including our trademark donuts. As of July 4th, 2010, Tim Hortons had 3,627 systemwide restaurants, including 3,040 in Canada and 587 in the United States.
EVCARCO (OTC.BB:EVCA) is pleased to present to the shareholders of EVCARCO the latest update from its Italian manufacturer TAZZARI. Over 6 months have passed since ZERO was launched. While a discerning public admires its technological features, ecological concept, its design and the performance of this all-electric vehicle built using cutting-edge techniques, the TAZZARI team is busy planning and defining the vehicle’s coming innovations. What’s in store for 2011: Planned for spring next year there will be a number of innovations that are currently at an advanced stage of development. These include a driver control panel with touch-screen technology. Part of the dashboard, the new control panel will give the driver easy, finger-tip control over a range of vehicle functions. Its design is essential and ultra-modern and this instrument represents a major innovation in the automotive sector, bringing it closer to that of latest-generation communication devices such as the iPod. Externally, there will be a number of new optional features such as LED lights and front fog lamps. As far as drivability is concerned, adjustable suspensions are being developed to suit all road types, from urban freeways to off-road surfaces. Further developments for ZERO remain top-secret for the time being, but will be disclosed at the end of the year and will be available in 2011. Spring 2012 will see the Roadster take to the roads. Just 18 months before we will see the open top version of the TAZZARI ZERO ready for those star-filled summer nights. Available in Spring 2012, the TAZZARI ZERO Roadster is perfect for the free-spirited lovers of driving sensations. Sauer-Danfoss Inc.(NYSE: SHS) has entered into a new Credit Agreement with Danfoss A/S. The new Credit Agreement replaces the prior credit facility from Danfoss A/S that was set to expire on April 29, 2011. Danfoss A/S is the Company’s majority stockholder. The new Credit Agreement provides a 5-year term loan of approximately $200 million ($140 million and 45 million euro) and a 3-year revolving credit facility of approximately $300 million ($180 million and 90 million euro). The term loan calls for fixed interest rates of 8.00% and 8.25% for the U.S. dollar and euro loans, respectively. The revolving credit facility bears interest at the underlying base rate plus 3.90%. The Company will pay an up-front fee of approximately $4.2 million. In addition, the Company will pay approximately $1.7 million in prepayment penalties for early cancellation of the loans outstanding under the prior credit facility. By paying off the previous loans early and re-borrowing at the lower rates under the new Credit Agreement, Sauer-Danfoss will save approximately $12.7 million of interest and commitment fees through April 29, 2011. Sauer-Danfoss Inc. is a worldwide leader in the design, manufacture, and sale of engineered hydraulic, electric and electronic systems and components for use primarily in applications of mobile equipment. Sauer-Danfoss, with 2009 revenues of approximately $1.2 billion, has sales, manufacturing, and engineering capabilities in Europe, the Americas, and the Asia-Pacific region. THL Credit, Inc. (NASDAQ: TCRD) reports its participation in the acquisition of Country Pure Foods, LLC (�Country Pure�) led by Mistral Equity Partners. THL Credit provided mezzanine financing for the transaction. Country Pure, headquartered in Akron, OH, is a leading independent producer and distributor of premium quality juices in the United States. THL Credit is an externally-managed, non-diversified closed-end management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940. THL Credit�s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of middle market companies. THL Credit invests primarily in private subordinated debt, or mezzanine debt, in middle market companies with annual revenues of between $25 million and $500 million that require capital for growth and acquisitions. Such investments in many cases include an associated equity component such as warrants, preferred stock or other similar securities. THL Credit�s investment activities are managed by THL Credit Advisors LLC, an investment adviser registered under the Investment Advisers Act of 1940. Thomas & Betts Corporation (NYSE:TNB) has acquired Cable Management Group, Ltd. (CMG), a privately held, leading global manufacturer of cable protection systems specified in industrial and infrastructure / construction applications, for �70 million (approximately $110 million) from available cash reserves. Based in Birmingham, U.K., CMG reported sales of approximately �28 million (approximately $44 million) for the fiscal year ended July 31, 2010. CMG manufactures a broad range of metallic and non-metallic flexible conduit and fitting systems used to protect critical power and data systems from fire, dust, moisture, vibration and corrosion. Marketed worldwide under the Adaptaflex, Kopex and Harnessflex brand names, key vertical markets for CMG products include rail, machine building, petrochemical, oil and gas, mining, heavy vehicle, automation and construction / infrastructure. Thomas & Betts Corporation is a global leader in the design, manufacture and marketing of essential components used to manage the connection, distribution, transmission and reliability of electrical power in industrial, construction and utility applications. With a portfolio of over 200,000 products marketed under more than 45 premium brand names, Thomas & Betts products are found wherever electricity is used. Headquartered in Memphis, Tenn., Thomas & Betts reported revenues of $1.9 billion and had approximately 8,500 employees in 2009.
There's no foolproof way to know the future for Black Box (Nasdaq: BBOX ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result. A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future. Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can also suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.) Why might an upstanding firm like Black Box do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors. Is Black Box sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO: Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter. The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above. Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Black Box's latest average DSO stands at 56.5 days, and the end-of-quarter figure is 56.0 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Black Box look like it might miss it numbers in the next quarter or two? The numbers don't paint a clear picture. For the last fully reported fiscal quarter, Black Box's year-over-year revenue shrank 0.3%, and its AR grew 9.9%. That's a yellow flag. End-of-quarter DSO increased 10.2% over the prior-year quarter. It was up 2.6% versus the prior quarter. That demands a good explanation. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions. What now?
I use this kind of analysis to figure out which investments I need to watch more closely as I hunt the market's best returns. However, some investors actively seek out companies on the wrong side of AR trends in order to sell them short, profiting when they eventually fall. Which way would you play this one? Let us know in the comments below, or keep up with the stocks mentioned in this article by tracking them in our free watchlist service, My Watchlist. - Add Black Box to My Watchlist.
PROTEONOMIX, INC. (OTC.BB:PROT), a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives, has executed a joint venture agreement with a group of investors that will create a new stem cell treatment and research facility in the United Arab Emirates (U.A.E.). The Investor Group has committed to invest $5 million on or before September 10, 2010. The Joint Venture company, XGen Medical LLC (“XGen”), a Nevis Island limited liability company, will be owned 51% by Proteonomix and 49% by the Investor Group. Due to confidentiality and competitive reasons, the Investor Group has requested to remain anonymous for the present. The Investor Group is not related directly and/or indirectly to the Company, its management, its board of directors and/or its current shareholders. The Investor Group assumes a variety of operational duties under the agreement, including some regulatory responsibility in the U.A.E., physician recruitment and cooperative management of the local entity. The Investor Group $5 million cash investment includes the purchase of $1 million of cellular material from Proteonomix. Additionally, as part of the agreement Proteonomix will license to XGen (the joint venture), both a use and treatment license in the UAE, as well as a license to manufacture the cellular material. The agreement also anticipates the formation of treatment facilities in other locations to be jointly agreed upon between the Company and the Investor Group. Each new facility would require the Investor Group to contribute a minimum investment of $5 million. Additionally, the agreement calls for XGen, the joint venture, to market and distribute Proteoderm, including the Matrix NC-138 anti-aging products. XGen will purchase Proteoderm at a wholesale price of 50% of the Manufacturer’s Suggested Retail Price (MSRP). XGen will maintain exclusive distribution rights in the U.A.E., provided the Joint Venture purchases a minimum order of 5,000 units the first year, and increases purchases at a rate of 20% per annum until reaching 10,000 units per year. Generex Biotechnology Corporation (Nasdaq:GNBT) has named Craig Eagle, M.D. to its scientific advisory board. Dr. Eagle brings a wealth of oncology experience to help the Company’s wholly-owned subsidiary, Antigen Express, Inc., dba “Generex Oncology”, further its synthetic cancer and influenza vaccine development efforts. Dr. Eagle currently serves as Vice President of Strategic Alliances and Partnerships for the Oncology business unit at Pfizer Inc. Dr. Eagle attended medical school at the University of New South Wales, Sydney, Australia and received his general internist training at Royal North Shore Hospital in Sydney. He completed his hemato-oncology and laboratory hematology training at Royal Prince Alfred Hospital in Sydney. He was granted Fellowship in the Royal Australasian College of Physicians (FRACP) and the Royal College of Pathologists Australasia (FRCPA). After his training he performed basic research at the Royal Prince of Wales hospital to develop a new monoclonal antibody to inhibit platelets. He joined Pfizer Australia in 2001 as part of the medical group. In Australia, his role involved leading and participating in scientific research, regulatory and pricing & re-imbursement negotiations for compounds in therapeutic areas including oncology, anti-infectives, respiratory, arthritis and pain management. Generex is engaged in the research, development and commercialization of drug delivery systems and technologies. Generex has developed a proprietary platform technology for the delivery of drugs into the human body through the oral cavity (with no deposit in the lungs). The Company’s proprietary liquid formulations allow drugs typically administered by injection to be absorbed into the body by the lining of the inner mouth using the Company’s proprietary RapidMist device. Marina Biotech, Inc. (NASDAQ:MRNAD) has acquired the intellectual property of Novosom AG of Halle, Germany for its SMARTICLES liposomal-based delivery system in an all-stock transaction. The transaction further expands Marina’s RNA delivery platform IP estate, which now includes DiLA2 delivery platform, tkRNAi (bacterial delivery platform), peptide nanoparticle delivery platform, and the SMARTICLES liposomal delivery platform. This acquisition significantly broadens the number of approaches Marina may take for systemic and local delivery of its proprietary UsiRNA therapeutics. The assets were acquired by Marina for approximately $5 million in unregistered Marina common stock. Additional terms of the agreement were not disclosed. Novosom’s SMARTICLES define a novel class of liposomes: fully charge-reversible particles. Novosom’s liposomal vectors allow delivery of active substance (siRNA, antisense, decoy, etc.) inside the cell either by local or systemic administration. SMARTICLES are designed to ensure stable passage through the bloodstream and release of the nucleic acid payload within the target cell where it can engage the RNA interference pathway and exert its therapeutic effect. Marina Biotech (formerly known as MDRNA, Inc.) is a biotechnology company, focused on the development and commercialization of therapeutic products based on RNA interference (RNAi). Marina’s pipeline currently includes a clinical program in Familial Adenomatous Polyposis (a precancerous syndrome) and two preclinical programs — in hepatocellular carcinoma and bladder cancer. Marina’s goal is to improve human health through the development of RNAi-based compounds and drug delivery technologies that together provide superior therapeutic options for patients.
U.S. utilities are in a rut and, according to recent energy projections, aren't about to dig themselves out any time soon. But if you're looking for a solid dividend with growth potential, you may find a match in U.S. utilities with international assets. I'll highlight five utilities with different degrees of foreign forays and let you decide which fix fits your fancy. America doesn't want your energy
When Exelon (NYSE: EXC ) CEO Chris Cane recently said "2012 was a difficult year on the economic front for our sector," he wasn't just making excuses for his company. Falling sales were a common trend for utilities last year, and the sector lagged the S&P 500 by more than 5 percentage points. ^SPXTR data by YCharts. Looking ahead, projections aren't peachy. A recent Department of Energy report predicts that electricity demand will clock in at 0.58% compound annual growth over the next decade, dulled by both America's economy and advancements in energy efficiency. The Federal Reserve announced last week that it expects U.S. GDP to fall between 2.9% and 3.7% by 2015, child's play compared with many emerging markets. And although many utilities are overhauling their energy portfolios to set themselves up for a profitable future, some companies are looking abroad to propel top line growth. Yes to AES?
When looking for utilities with international exposure, AES (NYSE: AES ) is the elephant in the room. Its 27-country spread offers formidable international exposure. Source: AES Earnings Presentation (MCAC is Mexico, Central America, and the Caribbean. EMEA is Europe, Middle East, and Africa) But diversification doesn't make bad business good, and AES is currently working to cut costs. Its 4.9 debt-to-equity ratio is higher than 98% of its peers, and the company's decision to sell 14 assets in nine countries over the past year is no coincidence. The utility's stock jumped 6% on solid Q4 earnings, and BRIC bulls would do well to give AES a closer look. Feeling Chile?
Hailing from my home state, North Carolina-based Duke Energy (NYSE: DUK ) offers investors a nibble of internationalism with a big serving of Southern sauce. Its International Energy subsidiary is primarily focused on generation in Latin America, but it also owns a 25% stake in Saudi Arabian National Methanol Company. Duke axed a similar 25% stake in a Greek gas company in Q1 2012, while adding on a 240 MW thermal plant and 140 MW hydropower facility to its Chilean operations. In total, Duke directly or indirectly generates 4,900 gross MW of international energy. That's approximately 10% of the utility's U.S. generation capacity, a significant slice of its portfolio pie. The utility beat top-line and earnings estimates last quarter and could be ready for some serious growth with its $12 billion of modernization projects well under way. (Inter)National Grid
National Grid (NYSE: NGG ) is anything but, unless you're based in the United Kingdom. This utility is listed on the U.S. stock exchange, but its blood runs British blue. Its U.K. transmission and gas distribution collectively account for 67% of total operating profit, compared with 29% for its Northeast �U.S. regulated companies. A bet on National Grid is, in many ways, a bet on Europe's recovery. National Grid earned The Motley Fool's Income Investor stamp of approval way back in 2005, and it has ticked up nicely since its Great Recession correction. With its dividend at a 10-year high, now might be the perfect time to pull some profit from the 'ol motherland. Canada, eh?
As a final note, who could ignore the diversification in our Northern neighbor? Exelon and Atlantic Power (NYSE: AT ) have hopped across the border to make electricity alongside maple syrup. Canada's proximity allows for inputs and outputs to flow easily and freely, creating a unique international opportunity. Canada and the U.S. are two of the most closely tied economies in the world, but there are other reasons to head abroad. Exelon's 20-state and three-province spread create a myriad of regulation options for the utility to choose from as it reorients its generation portfolio. Source: Exelon EEI presentation.� Atlantic is reeling from a dismal quarter and slashed dividend, and it plans to invest heavily in natural gas and renewables to put itself back in the black. With 13 states and two provinces to choose from, a decent dose of strategy could help Atlantic to generate profit in addition to electricity. Source: Atlantic Power Investor Relations.� Global growth
Growth rates aren't what they used to be in the U.S., and a dash of international assets could go a long way to pushing your dividend stocks past mediocre margins. Including utilities in your diversification plan is one of the easiest ways to balance steady income with growth opportunities, so make your move today. As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.
MusclePharm Corporation (OTCBB:MSLP), one of the fastest growing nutritional supplement companies in the United States with a proprietary formulation used in eight performance products, reports that MusclePharm athlete and NFL star Joey Porter will wear MusclePharm�s new clothing line during a 17-episode weekly series spanning the 2010 NFL season on NFL Network. The new MusclePharm-branded hats and shirts will be unveiled to the retail market in the coming weeks and Porter�s notoriety in the world�s most popular sport presents an ideal platform to create exposure for the product line. Consistently recognized as one of the most recognizable faces in the NFL thanks to his outgoing nature, Porter will be wearing MusclePharm apparel in all 17 episodes of a weekly NFL Network series that focuses on the upcoming NFL season. The Arizona Cardinals and Super Bowl-winning linebacker is a 4-time Pro Bowler and was voted one of the top defensive players of the last decade. Porter has been an important MusclePharm spokesman due to his relentless playing style, tireless work ethic and outspoken personality, making this project a perfect way to reveal the new MusclePharm-branded apparel. �At MusclePharm, we find creative ways to make our brand stand out to multiple audiences and in multiple formats to reach all consumers,� said Cory Gregory, MusclePharm�s President. �We currently have focused on brand awareness in marketing in the UFC, NFL, MLB and in action sports markets. We believe we are a company that crosses over to multiple demographics and helps all of these athletes in these different sports, while also appealing to the normal, everyday athlete.� MusclePharm products are currently available in 1,200 of the top General Nutrition Centers (GNC) in the United States, as well as Vitamin Shop. MusclePharm�s award-winning products � Assault, Battle Fuel, Bullet Proof, Combat Powder, Recon and Shred Matrix�are also available online at gnc.com, bodybuilding.com, amazon.com and many other locations. San Juan Basin Royalty Trust (NYSE:SJT), recently declared a monthly cash distribution to the holders of its units of beneficial interest of $7,725,203.37 or $0.165746 per unit, based principally upon production during the month of July 2010. The distribution is payable October 15, 2010, to unit holders of record as of September 30, 2010. Gas production for the properties from which the royalty was carved (the �Underlying Properties�) totaled approximately 2,864,723 Mcf (3,171,129 MMBtu). Dividing revenues by production volume yielded an average gas price for July 2010 of $5.42 per Mcf ($4.90 per MMBtu) as compared to $4.17 per Mcf ($3.78 per MMBtu) for June 2010. The average gas price may vary from the posted index price for the San Juan Basin. The index price is a gross sales price, and the revenues used in the calculation of average gas prices are net of transportation, processing and gathering costs. Furthermore, the distribution to the Trust in any given month may include significant volume adjustments for sales in prior months that reflect pricing for those prior months. Capital costs for the month were $1,016,055. Lease operating expenses were $2,892,989 and taxes were $1,556,069. Sanderson Farms, Inc. (NASDAQ:SAFM) has declared a regular cash quarterly dividend of $0.17 (seventeen cents) per share payable October 19, 2010, to stockholders of record on October 5, 2010. This represents a new annual dividend rate of $0.68 (sixty-eight cents) per share. Payment of the regular quarterly dividend will remain subject to Board approval each quarter. Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. SanDisk Corporation (Nasdaq:SNDK), the global leader in flash memory cards, and NDS, the leading provider of technology solutions for digital pay-TV, report that NDS has successfully combined NDS MediaHighway STB software and SanDisk P4 solid state drives (SSD) to enable a new range of lower cost set-top box (STB) with DVR like functionality. By provisioning a set-top box with a small amount of storage, operators can introduce new revenue generating features such as live-pause and video on demand (VOD) with the ability to enable home networking functionality and advanced advertising solutions, including ad substitution. The new solution also allows for the deployment of energy-efficient STBs with decreased power consumption, small form factors and virtually silent operation. SanDisk Corporation is the global leader in flash memory cards, from research, manufacturing and product design to consumer branding and retail distribution. SanDisk’s product portfolio includes flash memory cards for mobile phones, digital cameras and camcorders; digital audio/video players; USB flash drives for consumers and the enterprise; embedded memory for mobile devices; and solid state drives for computers. SanDisk is a Silicon Valley-based S&P 500 company, with more than half its sales outside the United States.
Constellation Energy Group, Inc. (NYSE:CEG) achieved its new 52 week high price of $38.76 where it was opened at $38.76 UP +0.48 points or +1.23% by closing at $39.42. CEG transacted shares during the day were over 931,522 million shares however it has an average volume of 1.43 million shares. CEG has a market capitalization $7.91 billion and an enterprise value at $11.22 billion. Trailing twelve months price to sales ratio of the stock was 0.55 while price to book ratio in most recent quarter was 0.99. In profitability ratios, net profit margin in past twelve months appeared at -7.71% whereas operating profit margin for the same period at 5.30%. The company made a return on asset of 2.28% in past twelve months and return on equity of -12.10% for similar period. In the period of trailing 12 months it generated revenue amounted to $14.32 billion gaining $71.52 revenue per share. Its year over year, quarterly growth of revenue was -0.50% holding -63.20% quarterly earnings growth. According to preceding quarter balance sheet results, the company had $1.16 billion cash in hand making cash per share at 5.77. The total of $4.56 billion debt was there putting a total debt to equity ratio 55.30. Moreover its current ratio according to same quarter results was 1.80 and book value per share was 39.65. Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 19.95% where the stock current price exhibited up beat from its 50 day moving average price of $37.76 and remained above from its 200 Day Moving Average price of $34.21. CEG holds 200.70 million outstanding shares with 185.46 million floating shares where insider possessed 7.64% and institutions kept 71.60%.
Shares of beleaguered smartphone giant BlackBerry (NASDAQ: BBRY ) �have sunk lower after the having reached a 52-week high of $18.32 on Jan. 24. The stock is down more than 20% over the past two months. However, shares are still up 140% since reaching bottom at $6.22�last September. Investors are wondering what's next. But that's where things get complicated. "Pretty good" is not as good as "Wow!"
BlackBerry faced an uphill battle. The company needed to remove the negative stigma that's been associated with its name. The company, formerly known as Research In Motion, had become the "new Palm," the once-dominant smartphone manufacturer that was killed off by BlackBerry. Today, however, it is BlackBerry that's suffering the same morbid fate as Palm. This time, it's at the hands of Apple (NASDAQ: AAPL ) and Samsung. Remarkably, even Microsoft's�Windows Phone has surpassed BlackBerry. However, BlackBerry had an ace called BB10, the new platform that was going to revolutionize the company. Investors bought into the idea. After numerous product delays, on Jan. 30, the company finally unveiled the phone. Unfortunately, the bar was set too high. The reception was underwhelming. The Street expected "Wow!" The company, however, delivered "pretty good." This was unacceptable, especially for BlackBerry, which had the impossible task of coming back from the dead. The launch fell short of the "Lazarus" quality that the Street expected. The phone, while pretty good, offered no new mobile experience. And the stock got punished for it -- falling as much as 25% the following day. Who are we kidding here?
Current BlackBerry users were impressed. But that's not saying much. BlackBerry did not present anything that would cause a non-BlackBerry user to switch from Apple or Samsung. This point was very evident last week when the phones when on sale in the U.S. for the first time. The so-called "buzz," long lines, tents, overnight sleeping bags -- things that have become standard with product launches from Apple and Samsung -- were nowhere to be seen for BlackBerry. Granted, this is not a predictor of success. And BlackBerry enthusiasts will argue that this "buzz" is not needed. I don't buy it. Neither does the Street. The company has sold investors on the idea that the new phones and platform can revive its fight against Apple and Google. But investors yawned. BlackBerry bulls are now suggesting that whether or not the company is able to steal market share from Apple or Samsung does not matter. Then what's the point, especially after the company has waged its entire future on BB10? BlackBerry can't survive solely on the support of its existing users. The company's ability to attract new customers away from competing devices is how BlackBerry will be judged. And the Street doesn't feel confident that the new phonecan do that, which explains the 17% sell-off last week once the device finally hit the stores. Unfortunately, the sell-off may not be over. A new name, new era -- what to expect?
The company begins a new era under its new name and ticker when BlackBerry announces its fiscal fourth-quarter earnings results this Thursday for the period ending March 2. No one knows what to expect. Estimates are all over the map. The Street has had a hard time pinning down sales figures for BlackBerry's Z10 phones, which launched globally earlier in the quarter. For instance, Wells Fargo�expects the company to report a loss of $0.23 per share on revenue of $2.99 billion. Raymond James sees a loss of $0.17�on $3 billion in revenue. As far as devices sales are concerned for the Z10, the figures range from 500,000�units from Sterne Agee to 1 million projected by BMO Capital. There is no real consensus. This may or may not matter, however. The company is coming off a decent third quarter -- reporting a net loss of $0.22 per share on revenue of $2.7 billion, which beat on both top and bottom line estimates. Meanwhile, the underwhelming phone launch notwithstanding, investors should feel encouraged that management has made considerable operational improvements. BlackBerry has been growing cash at an impressive rate, including amassing close to $2.7 billion in the third quarter, with zero debt. Unfortunately, this does not address the lack of consumer appeal. And investors should be prepared for what the company will reveal about the success of its new flagship product. A better idea for 2013
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General Electric (NYSE: GE ) is getting out of the gas card business Down Under. On Tuesday, it was announced that the financial-industrial conglomerate has sold its branded Fleet Card gas charge-card business to Norcross, Ga.-based FleetCor (NYSE: FLT ) . FleetCor acquires GE's "Fleet Card product, brand, acceptance network contracts, supplier contracts, and approximately one-third of [GE's] customer relationships with regards to fuel cards" in Australia. FleetCor said it expects to see adjusted net income increase by $0.03 in 2013 as a result of this deal, even after deal-related expenses. Terms of the transaction were not disclosed. The Fleet Card is accepted at more than 6,000 fuel outlets and more than 7,000 automotive service and repair centers across Australia. The Fleet Card acquisition marks FleetCor's entrance into the Australian market, but not GE's entire exit. In a statement describing the deal, GE noted that it is retaining its "Custom Fleet" customers, comprising corporate customers who have relationships with GE such as fleet management and leasing, in addition to fuel. Also, GE is entering into a long-term agreement with FleetCor to have the latter perform fuel card processing for Custom Fleet customers.� link
Americans became incrementally richer this past February. According to the Commerce Department's latest release on personal income and outlay data compiled by the Bureau of Economic Analysis, the category grew during the month by $143.2 billion, or 1.1%, over January's level. Disposable personal income also advanced, as did personal consumption expenditures. The growth in those categories was by $127.8 billion (1.1%), and $77.2 billion (0.7%), respectively, over that same time frame. The fortunes of those indicators were mixed on a month-over-month basis in January. Personal income dropped by $513.5 billion (3.7%), while DPI fell by $498.3 billion (4%). On the other hand, PCE climbed by $40.8 billion ( 0.4%).
Today, the Motley Fool's Consumer Goods Analyst Isaac Pino, and Motley Fool contributor Matt Thalman discuss one sock to sell today. Shares of Caesars Entertainment (NASDAQ: CZR ) are up more than 56% in just the last month. The likely culprit for the massive run-up is the increased attention the company has received due to the legalization of gambling online in certain states over the past few months. While Caesars could possibly see increased revenue from online gambling, the company has a massive pile of debt, and limited growth options besides online. Some of the casinos that have also aligned themselves to benefit from online gambling, but have better growth opportunities than Caesars, are MGM Resorts International (NYSE: MGM ) and WYNN Resorts (NASDAQ: WYNN ) . One casino which hasn't laid any bets on the Internet, but still has solid growth ahead of itself, is Las Vegas Sands (NYSE: LVS ) . More foolish insight
For many companies, successfully capitalizing on a booming Chinese economy is like winning the jackpot. That's indeed the case for gaming company Las Vegas Sands, which made a big bet on Macau gaming about a decade ago that's paid off in spades. The company is now looking to spread its empire further; but will it be able to replicate its prior successes? Learn about all these opportunities, and the risks they pose, in our brand new premium report on Las Vegas Sands. Be sure to claim your copy today by clicking here.
In Germany there is a centuries-old rule on Good Friday called Tanzverbot. Translation: Dancing is forbidden. In the past few years, thousands have gathered across the country on Good Friday to protest the ban. WSJ's Laura Stevens reports. FRANKFURT�Every year on Good Friday, Germany becomes a little like the fictional town in the movie "Footloose"�dancing is verboten. The decades old "Tanzverbot," or dance ban, applies to all clubs, discos and other forms of organized dancing in all German states. In a country that takes pride in its disco traditions�immortalized by Mike Myers's Dieter character in Saturday Night Live's "Sprockets" sketch�the ban has begun to chafe. At a rally in the center of Frankfurt on Thursday, a couple dozen protesters gathered to call for an end to the ban. The rally's slogan: "I'll let you pray�you let me dance." Political activists, pirates and a person in a hot-pink bunny costume were all in attendance as observers stopped by booths set up with information in the busy shopping district. The Tanzverbot "severely limits the rights of those who are either atheists or who believe in other religions," said Horst Weintraut, a member of the Pirate Party who was dressed in a black cloak and hat. "When someone is dancing Friday evening in a club in the basement, that doesn't disturb any Christians who are praying or doing something in the church during the day." Enlarge Image Close dapd Protesters of the historic dance ban blew bubbles and danced on Good Friday last year in Frankfurt. Protests to overturn the Tanzverbot have grown over the past couple of years as students, atheists and club owners alike have lobbied to strike the law, which they say is outdated and unreasonable. On Good Friday last year in the largely Catholic city of Cologne, around 150 dancers wearing headphones bopped silently in the shadow of the city's towering cathedral. A conga line formed as police stood by to keep order. Those who support the law contend that a sacred day for reflection isn't asking too much. "They can dance on 364 days a year," said Lars Witteck, the district president of the town of Giessen. "We cannot just forget our history. We have certain types of laws that show the respect to our tradition." Germany has a rich Christian tradition, from Martin Luther to Pope Benedict XVI. Yet much like the rest of Europe, German society is increasingly secular and a dwindling number of people regularly attend church services. Still, German law has been slow to reflect the trend. Shops across the country remain closed on Sunday. More controversial is the government "church tax" on those in Catholic or Protestant religions, among others, which is collected to fund churches regardless of attendance. The only way to avoid the tax is to officially leave the church, a step many Germans are unwilling to take. The Tanzverbot was first established by the church and was later adopted by many city governments starting in the Middle Ages, said Wolfgang Kaschuba, director of the Institute for European Ethnology at Humboldt University in Berlin. Largely, explicit laws weren't needed, however, due to existing traditions. Now, each of Germany's 16 states has its own Tanzverbot law. In addition to Good Friday, dancing is forbidden in many states on several of the so-called quiet religious days throughout the year, including Christmas Eve. But protesters have rallied around Good Friday, where organized dancing is banned for at least several hours in every state. The strictest bans start at 4 a.m. on Thursday and run through Saturday. Penalties vary, but fines can range from �5 to �500, or about $6.50 to $650. Adding to the push to allow partying: Good Friday is a public holiday and the start of a four-day weekend. Easter Monday is also a holiday. "When only 30% of the people belong to a church in a given city, then religious traditions face some backlash," Mr. Kaschuba said. At Thursday's rally in Frankfurt, protesters called on their countrymen to officially declare themselves atheists to the government and to stop paying the tax levied on members of some religious communities. Organizers even offered a prize: A book on personal freedom. About an hour north of Frankfurt, in the small university town of Giessen, the local branch of the antiestablishment Pirate Party has taken the Tanzverbot on as a major issue. "There's a very strong community pressure that you're not able to criticize the church," said Christian Oechler, a Pirate Party leader and one of the organizers. "But now, the people are confident enough to take to the streets." Last year, members were denied permission from officials to organize an official protest on that day. Still, some gathered and started moving around because they wanted "to warm up because of the weather," Mr. Oechler said. Protesters try to keep the demonstrations respectful and from interrupting any church activities planned for the day, said Mr. Oechler. He said it is important to keep the church and state separate. Mr. Witteck, however, argued it was a matter of mutual respect and tolerance. "For many people, this is the highest sacred day of the year," he said. "Our society has become so fast. Everybody tells us we have to be international, multifunctional. It's not the worst thing to have a certain break during this time." The Giessen Regional Commission, led by Mr. Witteck, stepped in last year to prohibit the planned demonstrations on Good Friday. "I like to dance, and I want people to dance, and I think it's important to have fun. I think it's very important to allow everyone to protest," Mr. Witteck said. "But it's the way it is done�This is a provocation." This year, the Pirate Party of Giessen is maintaining that it isn't organizing an official protest. However, it has posted a Web page under the slogan: "Dance against the Tanzverbot�Alone instead of together." The notice proposes dancing alone "in your own backyard, on a busy street or perhaps at 6:30 p.m. in front of the Regional Commission" building, where Mr. Witteck's government is based. There is also a link to a special sign for dancers to print out and carry in case police try to enforce the ban on organized dancing or demonstrations. The sign reads: "Safety warning: I'm here alone!" Write to Laura Stevens at laura.stevens@wsj.com
Institutional investors have been instrumental in stoking the flames of the U.S. housing recovery and many large firms are still in the market for deals even as housing prices improve. Some large investors are spending billions in the hopes of converting single-family homes into rental properties to increase portfolio of assets as well as take advantage of the growing demand for rental properties. Many of these investors are also buying large blocks of homes to then resell to other investors that are also looking to get into the new single-family home rentals market. For more on this continue reading the following article from National Real Estate Investor. The tentative recovery in the residential housing market has not put a damper on the supply of single-family home investment properties?or buyer demand. Both individual and institutional investors continue to find ample opportunities to acquire properties at discount prices. Since starting to buy single-family homes at the beginning of 2012, Los Angeles-based Colony American Homes has amassed a portfolio of nearly 10,000 homes. “The ability to buy homes at attractive values in all of the markets that we are in continues to be very compelling,” says Justin Chang, CEO of Colony American Homes. For example, Colony expects to buy 1,000 or more properties in South Florida alone over the next year. Colony isn’t the only institutional investor active in the single-family home niche. Blackstone Group LP recently secured a $2.1 billion syndicated loan from Deutsche Bank AG to facilitate its REO-to-rental investment program. These buyers are facing more competition and rising prices as the housing market begins to improve in many metros. Yet there continues to be a solid inventory of available properties including properties in foreclosure or distress, as well as homes listed on the open market at prices that are well below peak 2006 prices. “There really seems to be a continued flow of distressed properties and shadow inventory,” says Stephen Karbelk, CAI, AARE, co-chairman and founder of AmeriBid LLC in Reston, Va. AmeriBid conducted an auction of single-family homes on behalf of the New Orleans Redevelopment Authority (NORA) last October where approximately 125 homes were sold. Nearly half of the properties that sold, 47 percent, sold to investors. AmeriBid had a second NORA auction planned on March 23to sell about 130 homes. In addition, the firm has multiple auctions in the works with other public agencies that it will be announcing in the next week, one of which involves the auction of as many as 6,000 properties, Karbelk notes. “Buying opportunities are not drying up for us in Chicago,” agrees Eric Workman, vice president of sales and marketing for MACK Companies in Tinley Park, Ill. MACK is a veteran investment group that has been buying distressed or foreclosed single-family homes and redeveloping them as rentals for the past 15 years. Earlier this month, the firm announced the sale of 93 single-family homes to American Residential Properties,an Arizona-based REIT, for more than $12 million. MACK is continuing to actively pursue acquisition and redevelopment opportunities to provide additional inventory for ARP on an ongoing monthly basis. Prices edge higher Single-family home sales prices have appreciated in the past year. Markets such as Phoenix, Southern California and Atlanta in particular are becoming very competitive with acquisition prices rising 20, 30 and even 40 percent, notes Workman. Price appreciation in some markets is a combination of growing demand from both investors and home buyers, as well as a recovery in the housing market. The economy is showing signs of improvement, and people are looking to buy again. “Your average homeowners is feeling a little bit more bullish about things than they have in quite a few years, and there is a lot of pent-up demand out there,” says Workman. Nationally, single-family home prices rose 6.0 percent to average $176,800 in 2012, according to the National Association of Realtors. Although a notable improvement, it is still well below the peak home prices of $221,900 in 2006. “I think we have multiple years of opportunity ahead to try to acquire homes,” says Chang. Despite interest from high-profile investors such as Blackstone, the reality is that large investors still represent a very small segment of the single-family home market. In 2012, 81 percent of the single-family homes purchased were bought by individuals, and 19 percent were bought by investors, notes Chang. But most of those investors are small, mom-and-pop investors buying a few homes in their local market. “The institutional investors are a pretty small portion of the overall picture,” he adds. “So, we don’t think it is all that competitive in the sense that there are a lot of good homes out there to buy and a lot of homes for different buyers.” Building long-term strategies Although depressed values have been a key to sparking investor interest, firms such as Colony see the long-term possibilities in the sector due to a strong demand for rental housing. “As fast as we are buying, we are leasing up at a good rate,” says Chang. That speaks to the fundamental shift in America of families that want to rent quality, well-located homes. Colony owns properties in Florida, Georgia, Texas, Arizona, Colorado, Nevada and California. The firm has targeted those markets both for its opportunities to buy homes at a discount, as well as the strong renter demand. “Fundamentally, we want to acquire homes where we like the long-term economic prospects for those cities and states,” says Chang. Colony typically buys three- and four-bedroom homes and then investments between $20,000 and $30,000 in improvements before renting them out to end users. Certainly, single-family rentals are not a new concept. Even before institutions started snapping up properties in the past two to three years, about 11 percent of the housing stock was earmarked as rental properties–about 13 million homes, notes Chang. What is new is that firms such as Colony and ARP are bringing institutional capital, as well as professional management to the niche on a much broader scale. How effective investors are in creating a profitable platform for single-family homes remains to be seen. One of the challenges to the industry is the management costs. Unlike managing an apartment building where all of the tenants are in one central location, single-family homes are scattered throughout a metro area or community. So far, institutional investors seem to be following the strategy that creating a sizable portfolio with properties that are clustered in certain markets is creating efficiencies and economies of scale. Property management is going to be the key to creating successful portfolios. “From a management standpoint, it is a very local business where you have to have strong local operators with a lot of experience,” says Workman.
(gigaom.com) -- Audiobus ($4.99) is an interesting concept on iOS. It’s a program that acts as a bridge between several compatible audio apps — you can find a complete listing of compatible apps here. Add in the apps you want into the Audiobus interface and you can have a drum track from a drum machine playing along to your heavy metal guitar. Up until now, what’s been missing is support for GarageBand, Apple’s iOS recording software. But now, with a recent update for GarageBand, the app will work with Audiobus-enabled apps. I’ve never been thrilled with GarageBand’s built-in amps, so I love that I can use a different amp modeling package. I’m going to walk you through how to integrate GarageBand, Audiobus and Audiobus-supported apps. Since I’m a guitar player, I’ll be focusing on how I use it for guitars, but any instrument you can hook into your iOS device will do. More from gigaom.com - Hands on: Audiobus and GarageBand on iOS
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- Podcast: T-Mo's no plan, SummlYahoo and everyone's a paparazzi
The first thing you’ll need to do is launch AudioBus. You’ll see a screen with three boxes labeled Input, Effects and Output. Tap on Input to select the apps you want to feed into Audiobus. I’ve chosen Amplitube and Pocket Beats (you can have up to three inputs). Pocket Beats is a drum machine with a heavy techno feel, and combined with my blues/classic rock playing style certainly yielded an interesting jam track. Then tap on Outputs and choose GarageBand. You can probably do the next steps in any order, but I like to go from start to finish. I open up Pocket Beats and start the drum machine. I then launch AmptiTube and find a preset I like. Then I tap on GarageBand from the Audiobus app to launch it. GarageBand is going to ask you what input source to use for your instrument. Note: this isn’t the Audiobus feed, but how the instrument is getting jacked in. Since I’m not using GarageBand’s craptastic amps, I choose Audio Recorder. If you don’t find the built-in amps as displeasing as I do, you can choose Guitar Amp as your input. Now, GarageBand takes an extra step, which I found out the hard way. By default, GarageBand records in eight-measure increments. So, I was jamming along to my unholy union of blues rock and house dance beat when I noticed the whole shebang had stopped recording. So be sure to tap on the Plus icon in the upper right of the measure ruler and extend the measure as far as you need. Next I went to AmpliTube to start the actual recording. On the righthand side of the screen you’ll see a floating palette. From here you can either change the apps Audibus is passing or start the recording. It’s important to note that you will want to start the recording here; not in GarageBand. Play along to your heart’s content. Once you’re done, open up GarageBand, and you’ll see the Audiobus track. The Fender Squire USB Guitar is the guitar I take when I’m traveling or practicing outside. The USB 30-pin connector combined with an amp app is all I need to practice or write with when I’m not in my studio. I usually have some backing tracks I play along with and I’m getting in the habit of recording most of my practice sessions to help me get better. Now, I can use some MP3 I’ve uploaded into iOS GarageBand, get an amp sound that I’m happy with in an app like AmpliTube and record, and write when I’m sitting by the lake this summer. Apple including Audiobus support in its own apps is an interesting sea change. It’s not often Apple includes support for a third-party service in an iOS app. I hope this is a sign of things to come. Now that Apple has increased awareness of Audiobus, I’m hoping we’ll start to see some great apps become available that will really fuel my creativity.
Shares of Apple (AAPL) are down $8.19, or 1.8%, at $452.95, as Pacific Crest’s Andy Hargreaves reiterates a Sector Perform rating on the shares, warning that the company will likely miss expectations for the March-ending fiscal Q2 when it reports in April, and probably miss estimates for the June-quarter outlook, largely because of a lower outlook for the iPad. Hargreaves cut his Q2 estimate to $41.1 billion and $9.60 per share in net profit from a prior $41.8 billion and $9.89 per share. That is below the average $42.77 billion and $10.14 per share. He also cut Q4′s estimate to $33.5 billion and $7.16 per share from a prior $37.1 billion and $8.32 per share. That is below consensus for $39.78 billion and $9.41 per share. Hargreaves trimmed his Q2 iPhone number to 36.9 million from 37.3 million, “largely related to the product cycle, which we consider to be a transitory issue.” “However, we continue to believe sell-through evidence supports our view that the high end of the smartphone market is quickly becoming saturated.” His main concern is the iPad: “We consider the reduction to our large-format iPad estimates to be the most significant, as this appears likely to be a sustained trend as tablet demand shifts to smaller and less expensive models.” His iPad number goes to 16.5 million units for Q2 from a prior 17-million estimate. For Q3, he is number goes to 15 million from 18.5 million, “as we anticipate soft demand for large-format iPads and a demand pause in front of a likely fiscal Q4 product refresh.” “We expect a Retina iPad Mini in FQ4,” adds Hargreaves, “but we do not know if it will replace the existing iPad Mini at the same price points, or if Apple will keep the iPad Mini as an entry-level product and replace the iPad 2.” Hargreaves also comments in brief on rumors of a lower-priced iPhone, stating that he’s not been able to divine any evidence of component orders for the device, “which is somewhat unusual this close to the anticipated launch.” One question is what a cheaper iPhone will do for Apple in the market: In addition to the lack of clear component orders for a �low-cost� iPhone, it remains unclear whether the �low-cost� device is intended to open up the sub-$300 market, or if it is intended to expand share of the $300-plus market through a broader assortment of more fashion-oriented products. We believe Apple would maximize its long-term profit potential by continuing to focus on dominating the $300-plus market segment rather than moving significantly downstream. Update: I neglected to mention earlier that Shebly Seyrafi of FBN Securities also cut estimates for Apple today, while reiterating an Outperform rating and a $650 price target. Seyrafi cut his March-quarter iPhone estimate to 35.3 million from 37 million units, and cut his Q3 estimate to 30 million from 43 million. His estimate for the full fiscal year ending in September goes to $184.8 billion and $44.58 per share form a prior $198.2 billion and $47.82. Seyrafi acknowledge stepped-up competition, but thinks Apple will prevail with new products later this year: Clearly, the AAPL story has become more challenged lately due to increased competition from Samsung (which has more SKUs and more price points suitable for faster-growing emerging markets), concerns about innovation post-Steve Jobs, and concerns about whether the long-term GM is headed much lower (a la Nokia (NOK)). However, we see AAPL addressing the low-end iPhone concern in CH2 and the lack of a 5″ or higher iPhone concern in C2014. On the iPad front, we expect a new fifthgeneration iPad and and an iPad Mini with Retina Display this year, although the timing is more unclear. Meanwhile, we see the company starting to return more capital to shareholders in the form of higher dividends (we see dividends going from $10.60/yr. with a 2.3% dividend yield currently to ~$14/yr. with a 4.0% dividend yield) and possibly share buybacks as the company executes on its program to return $45B in capital to shareholders over three years (note that $10B of this has already occurred). Seyrafi adds that he thinks the stock is cheap even if gross margin declines substantially going forward, as he expects it will: We see AAPL’s gross margin (38.6% last quarter) declining steadily over the next many years due to increased competition from Samsung (pressuring AAPL’s highest gross margin segment – the iPhone), the introduction of low-end iPhones, more form factors/SKUs (increasing costs), and the possible introduction of an iTV (where we would model the GM at ~30%). Even so, as long as the GM does not decline below 33%, the stock is undervalued.
In a story produced jointly with NPR, ProPublica.org, that new tax-exempt investigative-journalism outfit, puts forward what sounds like a smart proposal for improving the efficiency of the federal government: Imagine filing your income taxes in five minutes--and for free. You'd open up a pre-filled return, see what the government thinks you owe, make any needed changes and be done. The miserable annual IRS shuffle, gone.It's already a reality in Denmark, Sweden and Spain. The government-prepared return would estimate your taxes using information your employer and bank already send it. Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours in prep costs and time, according to one estimate.The idea, known as "return-free filing," would be a voluntary alternative to hiring a tax preparer or using commercial tax software. The concept has been around for decades and has been endorsed by both President Ronald Reagan and a campaigning President Obama."This is not some pie-in-the-sky that's never been done before," said William Gale, co-director of the Urban-Brookings Tax Policy Center. "It's doable, feasible, implementable, and at a relatively low cost."So why hasn't it become a reality? For two reasons, as it turns out. There is a plausible public-spirited argument against it and a venal interest group working to thwart it. The ProPub story focuses on the latter, as will this column. But let's give the former its due: Grover Norquist of Americans for Tax reform, argues that "the IRS invites a conflict of interest by adding 'tax preparer' to its role as 'tax collector.'�" He thinks the agency would systematically err on the side of overestimating taxes due, so that it would be "a near-certainty that everyone's taxes will rise." It's a pertinent concern, though we'd say the tax increase would likely be regressive rather than across-the-board. "Return-free filing would not be available to everyone," ProPub reports. "It's best"--meaning worst, if Norquist is right--"for the slice of taxpayers with straightforward returns who don't itemize or claim various credits." These tend to be taxpayers with relatively low levels of both income and wealth. The primary villain of the piece is identified right in the headline: "How the Maker of TurboTax Fought Free, Simple Tax Filing." Intuit has spent $11.5 million lobbying Congress over the past five years, some of it on "two bills, both of which died, that would have allowed many taxpayers to file pre-filled returns for free" and on two other bills "that would have barred the Treasury Department .�.�. from initiating return-free filing." (H&R Block, an Intuit competitor, apparently has also lobbied on at least one related bill, but shrewdly declined to talk to ProPub.) Intuit offers its own high-minded arguments for opposing the idea. It echoes Norquist's warning about higher tax collections and also asserts that government-completed returns would curtail "citizen participation in the taxation process." These arguments may have merit, but one is inclined to discount them given the company's manifest self-interest in maximizing its potential customer base. It's an interesting story, and ProPub deserves a laurel for its reporting. But several darts are due for the childlike Manichaeism of its narrative. Here it is, simplified only slightly: White-hatted government heroes try to help people. Black-hatted corporate villain hires evil lobbyists to thwart the effort. (The implicit conclusion: In steps mild-mannered reporter Liz Day--her very name connotes sunshine!--to Expose the Truth, and everyone lives happily ever after.) Let's assume for the sake of argument that return-free filing is a good idea and that Norquist's concerns either are unwarranted or can be obviated. In that case it makes sense to fault Intuit for its self-interested opposition to legislation that would be in the public interest. It is still far too simplistic, however, to regard Intuit as the villain and members of Congress as heroes or victims. Intuit is engaging in a perfectly normal activity that economists call rent-seeking. "People are said to seek rents when they try to obtain benefits for themselves through the political arena," Stanford's David Henderson explains in the Concise Encyclopedia of Economics. "They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors." (Henderson argues that "privilege seeking" would be "a much better term.") Enlarge Image Close Sipa Press Rent-seeking behavior would be futile if government did not assert the power to grant the privileges sought. The TurboTax business wouldn't even exist if Congress had not seen fit to enact a tax code too complicated for most people to navigate. Of course many of those complications were established for high-minded reasons: to ensure that the rich pay their "fair share" and the poor are rewarded for taking low-wage jobs; to encourage homeownership, investment, contributions to charity and so forth. If Congress is a hero in this tale, it is a tragic one, for Intuit's influence was made possible by Congress's own actions. The more powerful the government is, the more complicated it gets, and the more opportunities there are for rent-seeking. Consider this example, from the Associated Press: Applying for benefits under President Barack Obama's health care overhaul could be as daunting as doing your taxes.The government's draft application runs 15 pages for a three-person family. An outline of the online version has 21 steps, some with additional questions.�.�.�.At least three major federal agencies, including the IRS, will scrutinize your application. Checking your identity, income and citizenship is supposed to happen in real time, if you apply online.�.�.�.Once you're finished with the money part, actually picking a health plan will require additional steps, plus a basic understanding of insurance jargon.And it's a mandate, not a suggestion. Sounds like a business opportunity for Intuit, doesn't it? When Congress was considering ObamaCare three years ago, journalists largely cheerled. (For a particularly egregious example, see this October 2010 column featuring Mark Halperin.) The government white-hats were going to provide free medical care for everyone! Oh, there was some talk about how the black-hatted insurance and drug companies were hiring lobbyists to cut dirty deals, but again that fit in to a broader narrative of government good guys vs. business baddies. There's another important element of this basic journalistic narrative: the means by which the bad guys have their way with the good guys and hurt the public. In ProPub's TurboTax story, it's "lobbying." In other stories it might be "campaign contributions." In the Constitution, these are known respectively as petitioning the government for redress of grievances and freedom of speech. Both are among the rights guaranteed in the First Amendment. Well, this is curious, isn't it? A staple of journalism--a profession that lives and breathes by the First Amendment--is attacking corporations for exercising their First Amendment rights. There is an argument--or a reflexive claim, anyway--on the ideological left that corporations have no constitutional rights. But journalists can't make that claim with a straight face. Almost all of them do their work under the aegis of a corporation, whether a nonprofit like ProPublica or a business that at least aspires to make a profit like the New York Times Co. As we've noted many times, many media corporations, including the New York Times Co., take the position that corporations should not have First Amendment rights--but they make an exception for media corporations. No wonder journalists don't inform the public--or, quite possibly, themselves--about rent seeking. Their employers depend on it. That Word Doesn't Mean What You Think It Means Georgia journalism prof Cynthia Tucker isn't impressed with Ben Carson, a black physician who wowed conservatives by giving a speech critical of President Obama at the National Prayer Breakfast--with Obama in the audience. In a CNN.com piece, Tucker writes: Like giddy teenagers, Republican activists have fallen for another charming, personable and accomplished black conservative. Dr. Ben Carson is the newest object of their crush, which was born of a desperate need to attract more black men and women as high-profile standard-bearers.You can't blame Republican loyalists for swooning over the doc, a renowned surgeon who rose from poverty to head pediatric neurosurgery at Baltimore's famed Johns Hopkins Hospital. Question 1: How exactly does Republicans' behavior toward Carson differ from Democrats' behavior toward Barack Obama in, say, 2004-10? Tucker continues: If wooing voters of color were simply a matter of finding an attractive black face with an inspiring personal story and an impressive resume, Carson would be hard to beat.But black voters tend to be more discerning than that.�.�.�.One of the reasons is that Carson doesn't seem to know black Americans' political values very well. In his most recent book--a political tract called "America the Beautiful: Rediscovering What Made This Nation Great"--he writes: "Many African-Americans voted for Obama simply because he was a black man and not because they resonated philosophically with his policies." In fact, black voters have been increasingly allied with the Democratic Party since the 1960s when Lyndon Johnson pushed through significant civil rights legislation. Al Gore received about 95% of the black vote in 2000, John Kerry about 93% in 2004. Black turnout was up significantly in 2008 and 2012 compared with previous years, and Obama's race probably had something to do with that. But Tucker is correct that the level of Obama's support among blacks was a function of his party more than his race. But that leads us to Question 2: Is "discerning" really the right word to describe a voting bloc that so nearly approaches unanimity in its support for one party? John Roberts Was Right - "If you tell a child that somebody has to be their [sic] friend, I suppose you can force the child to say this is my friend, but it changes the definition of what it means to be a friend."--Chief Justice John Roberts, Hollingsworth v. Perry oral arguments, March�26
- "Man Accused of Using Gasoline to Set Friend on Fire"--headline, News-Gazette, (Champaign-Urbana, Ill.), March�26
Fox Butterfield, Is That You? - "Procter & Gamble .�.�. reported a federal tax burden in 1969 that was 40 percent of its total profits, a typical rate in those days. More than four decades later, P&G is a very different company, with operations that span the globe. It also reports paying a very different portion of its profits in federal taxes: 15 percent. .�.�. Most of the 30 companies listed on the .�.�. Dow Jones industrial average, have seen a dramatically smaller percentage of their profits go to U.S. coffers over time, even as their share prices have driven the Dow to an all-time high."--Jia Lynn Yang, Washington Post, March�27
- "Despite making enormous strides professionally and financially, almost half of American women fear becoming bag ladies, even many of those earning six-figure salaries, according to a new survey."--Walter Hamilton, Los Angeles Times website, March�27
Other Than That, the Story Was Accurate "An earlier version of this post questioned how the argument against Proposition 8 could be taken seriously. Rather, it is the argument in favor of the proposition that is questionable."--Los Angeles Times website, March�26 Metaphor Alert "Richard Feldman, the former NRA lobbyist who now advocates universal background checks, said Obama's mistake was seeking gun control reforms that are too broad. .�.�. 'If you're all over the board, you're as strong as your weakest link. Drop your weakest link. Put your best foot forward. I'd always rather go back to Congress as a winner and ask for more later,' he said. "Anyone in Washington that doesn't know how to play the game puts themselves at a disadvantage for winning the game. The NRA knows how to win the game for their side. They've proved it on the defense or the offense.'�"--Politico.com, March�27 We Blame George W. Bush "Shoes Blamed for Fire at Tsukasa of Tokyo"--headline, Patch.com (Vernon Hills, Ill.), March�26 What Happens When the Choom Gang Gets the Munchies "Justices, Citing Ban on Unreasonable Searches, Limit Use of Drug-Sniffing Dogs"--headline, New York Times, March�27 Still Crazy After All These Years "The Ghost of Paul Simon Haunts Obama"--headline, NationalJournal.com, March�26 Mr. Bad Example - "Biden Advises Shooting Shotgun Through Door"--headline, U.S. News & World Report website, Feb.�28
- "Biden Blasts Republicans at Event With House Democrats"--headline, CNN.com, March�24
Doesn't Have the Same Ring as 'And That's the Way It Is' "NBC Anchor: I'm Gay, I'm Pregnant and I'm Marrying My Partner"--headline, Washington Times, March�27 Is There Anyone He Can't Crush? "Poll: Christie Still Crushes Buono in N.J. Race"--headline, NationalJournal.com, March�26 At Their Age, Wouldn't You? "Justices Seem Ready to Take It Slow on Marriage Issue"--headline, Blog of Legal Times, March�26 And After She Ate From the Tree of Knowledge "First Woman Is Chosen to Lead Secret Service"--headline, New York Times, March�27 Hard to Believe Money Launderers Still Use Checks "Fed Orders Citigroup to Improve Money Laundering Checks"--headline, Reuters, March�26 So Much for the War on Drugs "Dan Carpenter: Public Schools Take Blow From Indiana Supreme Court"--headline, Indianapolis Star, March�27 Shortest Books Ever Written "Kim Kardashian Pregnancy Weight Fat-Shaming: Why You Really Should Care"--headline, Puffington Host, March�26 But Why Would Anybody Be a Well? "Lincoln, Neb., Bests All Cities in Wellbeing in 2012"--headline, Gallup.com, March�26 The Veterinarian Says He's Comin', but You Gotta Pay Him Cash "Eagles on the Mend After Scavenging Euthanized Horses"--headline, Seattle Times, March�27 Questions Nobody Is Asking "What Kind of Men Go to Prostitutes?"--headline, LiveScience.com, March�25 Look Out Below! - "Rhode Island City Drops Cussing Cockatoo Case"--headline, Associated Press, March�27
- "Ahmadinejad Roadshow: Pitching His Political Heir"--headline, Associated Press, March�27
It's Always in the Last Place You Look "Men and Boys Behaving Badly: Where Are Their Fathers?"--headline, Puffington Host, March�26 Too Much Information - "Chris Christie: I'll Keep 'Firm Grip' on Prince Harry During Royal Visit"--headline, Guardian website (London), March�26
- "Gay Marriage Without the Robes"--headline, Puffington Host, March�27
Someone Set Up Us the Bomb "Force Lose Hooker Charles for the Season"--headline, RugbyWeek.com, March�26 News You Can Use - "Resisting Change Can Hinder Your Progress"--headline, Albany (Ga.) Herald, March�25
- "Holidaymakers Advised to Take Back-Up Cash as Cyprus' Banks Prepare to Reopen"--headline, Daily Mail (London), March�26
Bottom Stories of the Day "Poll: Anger at D.C. on the Rise"--headline, Politico.com, March�27 Some Things Money Can't Buy This story from the Puffington Host is priceless: The reorganized Obama campaign, now called Organizing for Action, is jumping into the New York state legislative effort, pushed by Gov. Andrew Cuomo (D), to pass campaign finance reform that would include public financing of candidates. Yes, the new champion of "campaign finance reform" is the same 501(c)(4) corporation that is renting out the president for a cool half-million dollars. Wait, it gets better. Here's the concluding paragraph from the PuffHo piece: Common Cause also cheered the OFA's step in a somewhat double-edged statement. "Organizing for Action's involvement in New York is great news," Common Cause President Bob Edgar said, adding that he hoped the announcement "is a precursor to a national drive for reforms like public financing and full disclosure of campaign donations to campaigns, PACs and the politically active and tax-exempt 'social welfare' organizations that have emerged since the Citizens United decision." Since Common Cause is itself a 501(c)(4) corporation, we'd say that statement is triple- or quadruple-edged. Follow us on Twitter. Join Fans of Best of the Web Today on Facebook. Click here to view or search the Best of the Web Today archives. (Carol Muller helps compile Best of the Web Today. Thanks to Miguel Rakiewicz, Steve Howe, William Thode, Brian Warner, John Williamson, Eric Jensen, Kevin Hisel, Scott Hill, Campbell Sasser, Dan Goldstein, Ryan Baker, John Bobek, Terry Holmes, Mark Kellner, Bob Wukitsch, James Benenson, Len Haynes, Pete Yarbro, Irene DeBlasio, Stefan Sharkansky, Howie Menard, Mark Finkelstein, Todd Crampton, Terry Holmes, Chris Green and Nick Kasoff. If you have a tip, write us at opinionjournal@wsj.com, and please include the URL.)
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