Best Stocks Broker For 2013, Top Stocks Broker In 2013: May 2015

Sunday, May 31, 2015

GM recalls another 2.4M for belts, bags, more

General Motors is recalling a total of 2.42 million vehicles in four separate action to fix safety flaws.

The total nearly matches the 2.6 million cars GM recalled in three stages earlier this year for a deadly ignition switch flaw. The biggest recent recall day, however, was last Thursday, when GM announced five recalls that totaled 3 million vehicles.

GM also said it now plans to take a $400 million charge against second-quarter earnings for the costs of recalls — double the $200 million it had forecast after the five recalls last week.

The automaker took a $1.3 billion charge the first quarter for recalls, almost wiping out its earnings.

GM says the new recalls are part of its "continuing effort to quickly address emerging safety issues."

The government fined GM the maximum $35 million last week for dragging its feet on the ignition switch defect — spotted within GM in 2001 but not recalled until this year.

By GM's count, its "house cleaning" has resulted in 29 recalls in the U.S. so far this year, including Tuesday's. Two involve fewer than 100 vehicles.

GM links 18 crashes and one injury to one of the problems in the latest recall, but no fatalities. The ignition switch fault is linked to 12 deaths in 46 accidents that involved injury or death in the U.S. and one fatal crash in Canada.

The vehicles involved, and their defects:

1,339,355 Buick Enclave, Chevrolet Traverse, GMC Acadia full-size crossover SUVs from the 2009-14 model years and Saturn Outlooks from 2009-10. Front safety lap belt cables can wear out due to people moving around while wearing the belts. GM told dealers they can't sell new or used versions of the vehicles until they are repaired.1,075,102 vehicles were added to an April 29 recall to fix a transmission shift indicator cable that can wear and fail to indicate the correct gear. Added in this action: 2004-08 Chevrolet Malibu and Maxx, 2007-08 Saturn Aura, 2005-08 Pontiac G6. This fault is the one linked to the 18 crash! es and one injury.58 Chevrolet Silverado HD and GMC Sierra HD full-size pickups from the 2015 model year because loose electrical connections in the engine compartment could cause a fire.1,402 Cadillac Escalades and Escalade ESVs from the 2015 model year because a flaw in how the passenger-side front air bag is connected to the dashboard could cause the bag to inflate improperly in a crash. Only 224 of those had been sold, and GM sent those owners overnight letters warning of the condition. XXX 2015 Cadillac Escalade

2015 Cadillac Escalade(Photo: General Motors)

Thursday, May 28, 2015

Golden Star Continues to Lose Ground

At the end of 2013 I wrote about Golden Star Resources Ltd. (GSS)'s troublesome future and gave several reasons for my bearish stance towards the stock. A small market, high geopolitical risk in some of the countries the firm operates, along with overexpansion in times of fluctuating gold prices gave tune to the massive shedding of shares by investment gurus. Five months have past since I last considered Golden Star's potential, and everything indicates the situation has not changed.

Guru Activity Shows a Clear Tendency

Steven Cohen (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Arnold Schneider (Trades, Portfolio), had already sold their entire holdings in the company by October 2013, indicating they had little faith in the gold miner's recovery. By the end of the year, Jim Simons' (Trades, Portfolio) Renaissance Technologies took a similar decision, reducing its stake in the firm by 32%. This tendency towards the sale of Golden Star stock was duly noted by investors and analysts alike, and concurs with the company's poor performance.

A Look at the Numbers

In an industry plagued by fluctuating metal prices, operating with lofty margins can be quite helpful. Yet Golden Star cannot afford such luxuries. With an operating margin of 0.1% and a net margin of -56.8% the firm is in a tight spot, especially when compared to the industry average. Unlike its industry peers' median, which are of 2.26% and -0.09%, respectively, the Toronto-based gold miner is struggling to generate decent cash flow levels. Further metrics depict a even worse situation for shareholders: return on equity is currently at -370% and revenue growth is estimated to reach a poor 2.5%. Purchasing overpriced assets, relative to current gold prices, is surely one of the reasons for such grim figures, as financial losses have taken their toll on Golden Star.

The announcement of its 2013 full year, and fourth quarter earnings only helped to add to shareholders' concerns. A 15% decline in revenue was expected by those who took the year-long drop in gold prices into consideration, yet the net loss of $311 million is worrisome. With such hefty losses, Golden Star will struggle to meet its short-term obligations, and thus will need to build further debt in order to stem payments. Yet while liquidity remains an issue, some good news did arise, as the company announced it intends to reduce operating costs below the $1,000 mark in 2014. Whether this will be enough to regain its foothold is doubtful considering recent events; however, it does remain a possibility and thus, a beacon of light for shareholders.

Poor Performance, Low Price

Apart from mounting debt levels and reduced margins, Golden Star has yet to produce positive cash flow levels, largely due to poor production and operational issues. Considering this scenario, the only upside to this stock seems to be its price. It is currently trading at $0.64 per share, at 0.4 times its trailing sales. This entails a significant price discount relative to industry peers' average, which is currently at 1.63. However, the risks of investing in a small and troubled gold mining company such as Golden Star are clear, especially considering the existence of viable alternatives such as Barrick Gold Corporation (ABX). In the end, I choose to remain consistent with my past conclusion and consider Golden Star shares are something investors should stay away from, unless they intend to gamble on a losing horse.

Disclosure: Patricio Kehoe holds no position in any stocks mentioned.

Also check out: Arnold Schneider Undervalued Stocks Arnold Schneider Top Growth Companies Arnold Schneider High Yield stocks, and Stocks that Arnold Schneider keeps buying Chuck Royce Undervalued Stocks Chuck Royce Top Growth Companies Chuck Royce High Yield stocks, and Stocks that Chuck Royce keeps buying
About the author:Patricio KehoeA fundamental analyst at Lone Tree Analytics

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Wednesday, May 27, 2015

Avon vs. Herbalife - Which Should You Take In 2014?

Related AVP Earnings Expectations For The Week Of February 10: AIG, Cisco, Deere, PepsiCo And More Short Sellers Place Their Holiday Retail Bets (AVP, BBY, GME) Related HLF Ackman's New Strategy: Targeting Herbalife Distributors And Board Members Bill Ackman Tries To Spoil Herbalife's Party

For decades, companies that practice the direct-selling business model have promised distributors a healthy share of company profits. In the direct-selling model, the share that would have been invested in advertising is paid out to distributors, as the distributors themselves essentially handle that part of the business.

Though many companies in the direct selling space have been tarnished with the moniker of being “pyramid schemes,” several companies weathered the criticisms and made formidable reputations for themselves.

Some were even able to rise to the prominent positions of being publicly traded companies, including Avon (NYSE: AVP) and Herbalife (NYSE: HLF). We will take a look at how these two direct-selling companies fared in 2013 and beyond.

On January 2, 2013, a share of Avon stock cost $15.00. Investors who held the stock for the 18 months preceding January 2013 were undoubtedly worried about the stock, as it had seen its share price cut in half in that time frame. Investors were given some positive signs in early-2013, as the stock popped above $21 in February, and continued to climb to a yearly-high in May of $24.43. Though the stock did pull back some, there was still plenty of time for investors to sell Avon and get out with a decent profit.

However, those who didn't liquidate the stock before late-October were in for a November surprise. Though the stock began its disappointing year-end skid on October 31, it was in November that Avon showed that there was no wind left in its sails. After a promising start, Avon limped to the finish line and closed 2013 at just $17.22. 2014 bought more bad news for the stock, as it tumbled below $15.00 in most recent trading.

Related: CVS vs. Altria - Which Would You Rather Invest In?

Herablife has had a rough go of it over the past few years. The three-year charts for the company show many ups and downs, but show the stock was on a solid upswing in January 2013, trading in the range of $32 to $34. As 2013 really got underway, so did Herbalife's stock. Herbalife trended steadily upward for the entire year, and closed the year at 78.70 - near its yearly-high. In early 2014 the stock pulled back from those highs, falling below $60 in late-January 2014, before revering some to $67 in recent trading.

Both Avon and Herbalife have expanded their businesses offerings into international markets in order to sustain growth. But while Avon struggled in 2013, Herbalife had a stellar year. Going into 2014 both stocks saw significant pulls back, and Herbalife even suffered public allegations about the legality of its business model and expansion practices. The 2014 fates of these companies depends on many unknowns, including the U.S. economy, the economies of countries into which the companies have expanded, and in the case of Herbalife – the result of public accusations relating to alleged wrongdoing.

Posted-In: Markets Best of Benzinga

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Monday, May 25, 2015

Healthcare Stocks: No Longer a Sure Thing

Popular Posts: 5 Stocks to Sell in FebruaryThe 3 Charts That Matter Most Right NowWhat Traders Can Learn From Super Bowl Sunday Recent Posts: Healthcare Stocks: No Longer a Sure Thing The 3 Charts That Matter Most Right Now What Traders Can Learn From Super Bowl Sunday View All Posts

Healthcare stocks were one of the best areas of the market in 2013, and they have continued to outperform so far in 2014.

HealthcareSurgeon185 Healthcare Stocks: No Longer a Sure Thing

Source: Flickr

In the most recent phase of the market correction, however, healthcare has begun to show some cracks. So is this a sign of things to come?

Healthcare stocks: Healthy Growth, Defensive Attributes Provide Support

First, the good news. The Health Care SPDR (XLV) is flat in 2014 (a total return of -0.07%, to be exact) compared with a return of -5.4% for the S&P 500. This places healthcare second only to utilities — up 1.6% based on the Utilities SPDR (XLU) — in terms of year-to-date performance among the 10 major sectors. This comes on the heels of a year in which healthcare stocks outpaced the S&P 500 by more than 9 percentage points.

One reason for this outperformance is that healthcare continues to deliver the goods in terms of earnings. According to FactSet, a full 86% of healthcare companies had reported better-than-expected fourth-quarter earnings through Jan. 31, tops among all sectors. In terms of top-line revenues, the number was the same: 86% exceeded expectations, second only to the telecom sector.

Healthcare stocks also led the way in terms of the extent to which they beat top-line estimates, coming in at an aggregate 2.7 percentage points ahead of expectations. Not least, their revenue growth rate of 5.4% was the highest of the 10 major sectors.

At a time in which investors have grown nervous about broader economic conditions, this type of fundamental strength is a magnet for those looking for a safe haven.

Perhaps even more important, healthcare stocks are largely immune to the broader issues that have plagued the stock market in 2014. The non-discretionary nature of their products and services means they aren't as vulnerable to the concerns about slower global growth, emerging markets contagion and higher natural gas prices that have combined to weigh heavily on performance elsewhere in the U.S. stock market.

Biotech, Pharmaceutical Stocks Beginning to Diverge

Based on the factors above, healthcare continues to look good on the headline level. More recently, however, the biotechnology industry has lost its leadership role. The table below shows the shifting relationship between pharmaceuticals and biotech stocks since XLV peaked on Jan. 22:

Sector	ETF	2013	YTD	Since Jan. 22
Healthcare	SPDR Health Care (XLV)	41.4%	-0.1%	-3.5%
Pharmaceuticals	Market Vectors Pharmaceutical ETF (PPH)	32.4%	1.1%	-3.1%
Biotechnology	iShares Nasdaq Biotechnology ETF (IBB)	65.5%	6.1%	-5.0%
S&P 500	SPDR S&P 500 ETF (SPY)	32.3%	-5.0%	-4.8%

One reason for this is the "risk-off" environment in which institutional investors are forced to sell winners in order to raise liquidity. This puts fund-manager favorites (and big 2013 winners) such as Biogen Idec (BIIB), Amgen (AMGN) and Celgene (CELG) in the crosshairs. Further, Celgene's earnings miss last month has depressed performance across the entire biotech sector since the news hit the wires.

In contrast, pharmaceutical stocks have held up relatively well. Merck (MRK) has bucked the broader-market downtrend to post a return of 6.9% year-to-date, while Pfizer (PFE) and Eli Lilly (LLY) are up 2.6% and 4.1%, respectively, through Tuesday.

This shift highlights a potential headwind to healthcare as a whole: valuations. With expectations high and stocks having performed so well in recent years, the latitude for disappointment is high. FactSet reports that as of Jan. 31, healthcare stocks were trading with a price-to-earnings ratio of 16.6 on 2014 earnings estimates. This isn't just higher than the S&P 500's forward P/E of 14.7, it's also higher than historical levels. In the past five years, healthcare has traded at an average of 12.2 times forward earnings; on a 10-year basis, the average is 14.1. This puts healthcare stocks at a valuation that’s nearly 18% above its long-term average.

That would be fine if the sector could deliver above-average earnings growth. However, FactSet estimates earnings growth of 7.3% for healthcare in 2014, behind the 9.6% for the S&P 500 and ninth among the 10 major sectors. (Only utilities are lower.)

It’s true that the estimates for healthcare are probably more reliable than that 9.6% number for the broader market, which looks destined to fall before the year is out. Still, investors are clearly paying a premium for the defensive characteristics of healthcare stocks at this point. This puts a potential damper on returns, especially if the recent selloff is just a blip and economic growth is indeed as strong in 2014 as investors were expecting coming into the year.

The Bottom Line

Healthcare stocks have demonstrated the ability to outperform in both up and down markets in the past few years. However, with valuations far richer than they were a year ago, investors need to take care to be selective and not overpay for growth.

At this stage, healthcare investors can no longer count on the "rising tide" to fuel uniform outperformance throughout the sector. Manage your positioning accordingly.

As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.

Sunday, May 24, 2015

PVH Corp (NYSE:PVH): An Under-Appreciated Long-Term EPS Play

Shares of PVH Corp (NYSE:PVH) touched a new 52-week high of $138.68 on Friday. The retailer could record significant EPS upside in the long-term after reinvestment in the first half of 2014.

New York-based PVH, or Philips Van Heusen, is one of the world's largest apparel companies with more than 75 percent of revenues coming from its two global designer lifestyle brands – Calvin Klein and Tommy Hilfiger. As such, PVH is most focused on the moderate- to high-price point apparel, handbags, and accessories market.

Investors seem over-focused on near-term risks of stepped-up investment, ongoing inventory reduction, and distribution right-sizing for the Calvin Klein (CK) jeans/underwear business (acquired from Warnaco in 2013).

UBS analyst Michael Binetti views that PVH has the most visible algorithm for EPS growth over the next three years at the high end of the large-cap apparel peer group. He expects EPS to grow at a rate of more than 18 percent CAGR in the next three years.

By the second half of 2014, PVH should transition to a significant CK margin improvement story, with the Warnaco CK business currently under earning its long-term EBIT margin potential by 500 basis points (80 cents in EPS).

Starting in 2015, Binetti believes that PVH can re-accelerate revenue growth with better pricing power, new categories and new geographic opportunities for the Calvin brand as well as an ongoing Europe white space opportunity, and accelerating owned-retail business in the US for Tommy Hilfiger brand.

Calvin Klein margin improvement story is PVH's most powerful near-term opportunity. PVH can improve margins for the legacy Warnaco CK business (Jeanswear/Underwear) by about 500 basis points by 2016.

The market assumes only 6 percent revenue growth for CK in 2014 (below PVH's long-term outlook for 8-10 percent annual growth). But, the company is already well underway in reducing CK inventories, right sizing distribution that over-skewed to low-end channels, and improving product quality to re-establish pricing power and re-accelerate revenues to the 8-10 percent long-term range.

Binetti estimate that the legacy Warnaco business is currently generating 7.5 percent operating margins (with the $1 billion revenue Jeanswear business currently at low single digit operating margins), but should improve to 12.5 percent by 2016.

Every 100 basis points of improvement in legacy Warnaco CK margins is 15 cents of EPS to PVH. On a pro forma basis, Calvin Klein EBIT margins can improve by 400 bp (to 19 percent by 2016 from 15 percent in 2013).

A key near-term concern for investors has been PVH's comments that Tommy Europe orders will be only up about 1 percent after several years of solid growth. However, Tommy orders should not remain sluggish. Even in the third quarter call, the company commented that it expects better growth by fall.

For Tommy, there is significant opportunity to extend the brand into new geographies—especially leveraging legacy Warnaco assets in Latin America and Asia.

Meanwhile, Binetti said an analysis of past PVH and Warnaco company presentations points to up $1.4 billion in revenues from additional licenses for Tommy Hilfiger and Calvin Klein that PVH could consolidate in the coming years—which could add an incremental $1 in EPS.

The 2014 will largely be a year of completing the repositioning of the Warnaco CK businesses. In 2015 and beyond, PVH will begin to roll-up these licenses. If PVH acquires about 50 percent of these outstanding licenses over the next three years, it could add 50 cents in EPS by 2016.

As the Warnaco business starts showing signs of stability, PVH will transition into one of the best three-year EPS stories in large-cap apparel. Investors could own the stock ahead of the turn in the fundamentals.

PVH shares currently trade at a forward P/E of 16.8 times, a discount to peer group average of 17.6 times. They gained 20 percent in the last one year and traded between $102.72 and $138.68.

Wednesday, May 20, 2015

Advisors Move to Raymond James, Securities America, Wells Fargo

Santa Claus has been kind to several firms just ahead of Christmas, rewarding them with a handful of recruited representatives — and, in one case, a returning rep.

Raymond James (RJF) said late Thursday that it added three advisors from Wells Fargo: Scott Haley, CFP; Judy Mansfield, CFP; Jason Koptish, AAMS; and Scott Glaze, CRPC.

The team, which will now do business as Mainsail Wealth Advisors, is joining Raymond James’ independent channel. It works out of Gloucester, Va., manages $210 million in client assets and has had annual fees and commissions of $1.6 million. (It previously used Glaze Wealth Management Group as its brand.)

“For some advisors and teams, going independent is the best choice,” said Scott Whitley, regional director of Raymond James Financial Services, in a press release. “I am pleased that this team chose to affiliate with Raymond James’ independent channel. They have a true client-first mentality, a value that Raymond James also shares, and we look forward to supporting their practice and clients.”

“We looked at several firms before deciding to go independent,” said Haley, branch manager and managing partner of Mainsail, in a statement. “Raymond James clearly won. The culture was a perfect fit. It was like returning home from where we once were, back to the mindset that our firm is there to help us help our clients.”

Haley began his career as an advisor more than 13 years ago at A.G. Edwards, while Mansfield has more than 35 years of experience in financial services.

Securities America

Securities America, part of Ladenburg Thalmann (LTS) said Thursday that Kathy Keadle is once again affiliated with the independent broker-dealer. She formerly worked with Lincoln Financial Securities.

Keadle and her team joined Securities America in 2005 but left in 2011. The practice, which has about $2 million in yearly production and $140 million in assets, does business as Keystone Financial Services in Augusta, Ga. Keystone includes seven advisors and five staff members.

“I felt that Securities America’s significant technology platform along with an advisor-centric environment was the best place for me to take my firm to the next level,” Keadle said, in a press release. “We look forward to working with Securities America because of the unparalleled support we will receive.”

Keadle joined the financial services industry 16 years ago as a recruiter and trainer. She later managed a branch at AXA in Atlanta. She also runs the Keystone Foundation for Financial Education.

“We are proud to welcome Kathy Keadle and her team back to the Securities America family,” said Gregg Johnson, senior vice president of branch office development and acquisitions for Securities America, in a statement.

“Open communication allows former advisors to see the continued growth of our company,” Johnson said. “This, coupled with a culture that we value greatly, has developed into a trend that has drawn advisors back to our firm, such as the case most recently with Kathy Keadle, in September with Wayne Maier and in June with Shannon Case and Mark Slattery. These three groups alone total more than $454 million in client assets.”

Wells Fargo

Early Friday, Wells Fargo Advisors (WFC) said it had recruited an advisor from UBS in New York.

Bruce Gelfand joined Wells Fargo at its Liberty Plaza Private Client Group office, where he will report to Bill George, manager of the office.

Gelfand has client assets of $89 million and yearly fees and commissions of about $665,000.

---

Check out LPL Names Chetney President of Retirement Partners on ThinkAdvisor.

Tuesday, May 19, 2015

Obama threatens to veto bill to delay DOL fiduciary-duty rule

Bloomberg News

The House approved legislation Tuesday evening, 254-166, that would delay – or possibly kill – a Department of Labor regulation that would strengthen advice standards surrounding retirement plans.

The measure, written by Rep. Ann Wagner, R-Mo., would prohibit the DOL from proposing its regulation until 60 days after the Securities and Exchange Commission has finalized a similar rule to raise standards for brokers providing retail investment advice. It attracted the support of 30 Democrats.

On Monday, the Obama administration threatened to veto the legislation, saying that it undermines DOL efforts to protect workers and retirees from conflicted investment advice as they build their nest eggs through 401(k) plans and individual retirement accounts.

Supporters of the bill say the SEC must go first to ensure coordination between the agencies and avoid duplicative costly fiduciary-duty requirements that would ultimately limit investment advice for smaller investors. Opponents say it would effectively kill the DOL rule if the SEC declines to propose its own regulation.

The legislation, which also would require the SEC to prove that investors are being harmed by the differing advice standards between investment advisers and brokers before it proceeds with its own rule, faces an uncertain future in the Democratic-led Senate.

So far, no similar bill has been offered on that side of Capitol Hill. Ms. Wagner is hopeful that an Aug. 2 letter from 10 Democratic senators to DOL urging it to delay the rule signals that there is momentum for the issue on that side of Capitol Hill.

“We are working on some things behind the scenes with the Senate to move this through both chambers of Congress and to the president's desk,” Ms. Wagner said in an interview. “We're just in the middle of the game, and I want to see it all the way through.”

The Financial Planning Coalition – comprised of the Financial Planning Association, the National Association of Personal Financial Advisors and the Certified Financial Planner Board of Standards Inc. – is trying to stop Ms. Wagner's bill.

“This legislation is…a 'back door' attempt to undermine investor protection provisions in the Dodd-Frank Act and prevent the SEC and DOL from requiring advisers to put investors' interests ahead of their own,” the FPC said in a statement after the House vote.

Originally proposed in 2010 and withdrawn amid fierce financial industry backlash, the DOL rule is slated to be proposed again sometime in the next few months. It would expand the definition of “fiduciary” under federal retirement law.

Investment advisers currently must act in the best interests of their clients, or meet a fiduciary duty, while brokers meet a! less stringent suitability standard that allows them to sell higher-priced products to clients as long as they meet their investment needs.

During the House floor debate on Tuesday, Rep. Maxine Waters, D-Calif., opposed the bill. She said that lawmakers should support the DOL rule because it would protect workers' retirement nest eggs from high fees that could come with some broker product recommendations.

“Whose side are we on?” said Ms. Waters, ranking member of the House Financial Services Committee. “Are we on the side of the brokers, who can say any old thing?”

Opponents of the DOL rule contend it would place a fiduciary duty for the first time on those providing advice to individual retirement account holders. They argue that would raise costs for brokers, potentially forcing them to abandon the market for investors with modest assets.

“All we're trying to do is preserve investment advice and investment opportunities for working Americans,” said Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee.

Wednesday, May 13, 2015

If You Like Rare Element Resources as a Trade Right Now, You'll Love This Competitor (REE, AVL)

Rare Element Resources Ltd (NYSEMKT:REE) has been getting more than its fair share of attention of late.... bullish attention, to be precise. The stock's benefited from the attention too, with REE shares up 58% in the past two and a half weeks. As compelling as that move is, however, it's not the best rare earth bet at this point. If you like Rare Element Resources, you'll love Avalon Rare Metals Inc. (NYSEMKT:AVL). Unlike REE, AVL isn't already overbought. Indeed, it's just getting started.

First and foremost, it's worth noting that the undertow pushing Avalon Rare Metals and Rare Element Resources Ltd shares upward is doing the same for most rare earth metal miners. That undertow is simply a broad price improvement for rare earth elements. Since July's low, neodymium ("the biggie) prices have advanced from $75/kg to the current price of $103/kg, and are still going strong. Some observers have already suggested the proverbial bottom has been made, and their arguments actually hold up pretty well. That's why REE and AVL have been such - no pun intended - hot commodities of late... this rebound in rare element prices seems to be the real deal.

So what's wrong with Rare Element Resources Ltd that isn't wrong with Avalon Rare Metals? In simplest terms, AVL isn't overbought right now, while REE is.

With just a quick glance at the chart of Rare Element Resources Ltd we can see that shares had already been hot, gapping higher back on the 16th, yet never looking back. Now it's up huge, and on huge volume. In fact, today's big 11% pop will be the highest volume day we've seen in months.

On the surface it seems bullish, but this is one of those "too much of anything is still too much" situations. REE may be hot, but it's well overextended already, and today's extreme bullishness may be actually be a blowoff top.

AVL, on the flipside, isn't nearly as overextended right now. In fact, it appears to just be getting started. Though it too is surging on huge volume today, this is the first time we've seen any real technical progress from the stock. Make no mistake, though - this progress should be catalytic. Not only has Avalon Rare Metals Inc. just now hurdled a key horizontal line at $0.96, but it's just not toying with its 200-day moving average line; Rare Element Resources Ltd shares have already blown well past their 200-day line, and if anything that long-term indicator line is ready to reel REE back in.

The tricky part here is dealing with the reality that both stocks are still subject to any fluctuations in rare earth element prices. If they fall, so too will REE, and most likely AVL will as well. But, Avalon shouldn't fall as much since it's not as overextended, which means it's going to rekindle the uptrend much better and much stronger (and at a much higher level) than Rare Element Resources shares will.

To make matters trickier, it's possible rare element prices won't fall anytime soon, or even in the distant future.

Regardless, if you're willing to bet that rare earth element prices have already seen their worst and can only get better from here - for the long haul - then Avalon Rare Metals Inc. is a much more palatable pick than Rare Element Resources Ltd is at this point.

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Tuesday, May 12, 2015

Top Insider Trades: PCI BTH HALL MDGN

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By Jonathan Moreland, founder of Insider Insights and author of Profit From Legal Insider Trading.

NEW YORK (TheStreet) -- It is a victory for common sense. Tracking the trading behavior of company executives, directors and large shareholders in the stocks of firms they're registered in as "insiders" has proven to be profitable, according to both academic studies and (more importantly) the experience of professional investors.

Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Thursday, Sept. 19, 2013 as ranked by dollar value. Please note, however, that these are only factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant. At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing. So use these regular Top Insider Trades columns as the initial research tools they are meant to be, and click the links in the tables to analyze a company's or insider's full insider history. Also feel free to contact us with any questions on our proprietary insider data, and how it is best analyzed.

Sunday, May 10, 2015

A Rental Housing REIT

The Intelligent REIT Investor's Brad Thomas discusses a new rental housing REIT and shares his view on whether it is something that investors should consider.

SPEAKER 1: My guest today is Brad Thomas and we are talking about housing rates. Hi, Brad, and thanks for joining me.

BRAD: Glad to be here, thank you.

SPEAKER 1: Yeah, I know there is a new IPO of a company. It is called American Homes 4 You.

BRAD: 4 Rent, American Homes 4 Rent.

SPEAKER 1: 4 Rent, okay, and that is a REIT that it is my understanding is they go out into the single-family housing market, they buy some of these properties that need to be renovated, and then they are not selling them or flipping them, they are renting them. Is that correct?

BRAD: That is correct, and first of all, I want to make a point about this company specifically. When you invest in a REIT today, you are not only investing in these hard assets, which in this case, would be single-family housing for rent, but you are also investing in the management team.

SPEAKER 1: Sure.

BRAD: When you invest in a company, one value that you have in a REIT structure is you have not only the liquidity, the transparency, and the diversification but you also get a management team. One thing I can tell you about American Homes 4 Rent is that they have an exceptional management team. One of the key figures behind the company is a guy named Wayne Johnson. Wayne has a long history of creating shareholder value in a company that he created many years ago called Public Storage, which is the largest public storage company in the world. Mr. Johnson is, every year, in the Fortune billionaire list. He has made a large wealth but he has also made a lot of wealth for his shareholders so I want to point that out. That is what backing American Homes 4 Rent. Now, the business model itself is fairly new. We have only had I think now two public rental housing REITS, the other one being Silver Bay, that came out with their IPO I believe in December of last year.

SPEAKER 1: Correct, and they were a division of another larger company, right?

BRAD: That is correct. I believe they were an offshoot as well. Now, American Homes 4 Rent is now the second largest in the sector. The largest is actually a private equities firm.

SPEAKER 1: It is Blackstone.

BRAD: Blackstone, that is correct. American Homes 4 Rent, they are very scalable. Obviously, their name, American Homes, they are scaling this, trying to create the critical mass, so there are some questions out there in terms of how they can manage effectively at such a large portfolio and all of these multiple markets. My opinion is I think I would, on this particular IPO, I would wait it out. There is nothing better than patience and seeing how this company performs. I would personally like to see that company create the track record for managing the large groups of housing because, again, they are in subdivisions. It is not like an apartment complex where you are aggregated.

SPEAKER 1: Exactly.

BRAD: They are in a lot of different places so I would like to see some management track record and I would also like to see, for most investors, the most important thing is the dividend track record. I would like to see that.

SPEAKER 1: Sure, sure. And you are not a big fan of REIT IPOs in general.

BRAD: Correct. I mean, I think, you know, there is really no reason to invest in a REIT today who comes out. Let’s wait on that company to perform and let’s wait on a bargain. I like to buy with a margin of safety so let’s wait on that stock to fall, it will come down, and then you can pounce on it then and if you want to load up the truck, load up the truck.

SPEAKER 1: Are there any other housing type REITS that you like?

BRAD: You know there are. There is a niche sector, which is the modular housing sector, and they are not mobile homes. That is a misconception.

SPEAKER 1: Yes, right, right.

BRAD: The one I really like is called UMH. They are headquartered up in New Jersey, run by a fellow named Sam Landy. The family has been around a long, long time. They invest mostly in the Northeastern markets. They are getting down to the Southeast now but they have a really attractive dividend in the seven-plus range

SPEAKER 1: That is very healthy.

BRAD: It is and they have been able to sustain that more recently so I like that sector some. I think there is a lot of demand for that space and, again, they are not mobile homes. They are really providing attractive housing for families.

SPEAKER 1: That is sort of like the Habitat for Humanity homes, right. Those are modular homes, that they bring in the walls.

BRAD: Exactly. I tell you, Warren Buffett owns a piece of Clayton Home, so that will tell you something.

SPEAKER 1: Sure, yes, exactly. Thanks for being here, Brad.

BRAD: Thank you.

SPEAKER 1: And thanks for joining us at the MoneyShow.com video network.

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