Anthony Alfidi

12 Cheap Growth Companies

The health reform bill that passed the House today will more likely than not put a cap on health insurers' profitability, knowcking them out of the growth category.

Defense spending is heavily dependent on deficit spending. That won't continue forever. The U.S. defense budget is larger than those of the next 44 nations; can any contractor grow its way into markets that small?

Lockheed Martin Passes Important Missile Test

A contract for $4.4B running for 13 years annualizes about $338mm per year. That's not enough to meet the shortfall in LMT's defined benefit pension plan.

Lockheed Martin's Great Week on Main Street

Those contracts run for multiple years, but unfortunately LMT books the revenue up front. What happens when a bond market discloation disrupts defense contractors' favorite gravy trains? The contract termination fees won't be a fraction of projected revenue. Future earnings statements will have to be restated downwards.

Furthermore, LMT had had to put over $1B in Q3 into its underfunded pension plan. Read the transcript of their conference call and you'll see that LMT executives employ "Rosy Scenario" from the Reagan Administration's budget office. That's $1B no longer available to shareholders.

LMT is a lot riskier than it appears at first glance.

Cause for Concern: No Change from the Fed

Exercises like this always end badly. Just ask the Japanese. Dr. Roubini is probably correct about this QE funding a dollar carry trade and the Fed knows it. The slightest uptick in rates would be a disaster for the markets.

Market Bulls Are Clearly Exhausted

The bulls may be exhausted but continued QE is like an intravenous drip full of adrenaline. I'd like to think the market will break downwards at some point. The length and strength of this rally has been absurd.

Wall Street Breakfast: Must-Know News

The Fed's inaction supports the bond and housing re-bubbles. No money to be made shorting those for a while. It also means gold will probably continue its steady climb. The only good short idea here might be HYG given the rising junk default rate.

Green Energy Experts: Why Do They Buy Solars?

Energy efficiency and transmission stocks have an intuitive appeal. Analysts need to determine whether they are as constrained by natural resources as solar and wind companies.

2 New Ways to Hedge Inflation with ETFs

CPI's asset allocation makes little sense for an inflation-fighting strategy. Majority allocation to short-term government bonds? Gimme a break; fixed income is the first thing to lose purchasing power when inflation ramps up. GRES makes a lot more sense with its heavy commodity focus.

Is There an Opportunity in First Solar?

First Solar's business model is technologically unsustainable. There is not enough tellurium in the earth's crust to enable FSLR to survive for more than a decade or so. Mark Anthony's synopsis above is absolutely correct. Anybody buying FSLR now with the intent to hold it for more than a couple of years is throwing money away.

Stocks to Watch as Market Leadership Changes Hands

How will AMZN and NFLX keep their growth up if consumer spending stays weak? Style investing has its drawbacks, among them a disregard for fundamentals that affect all styles and asset classes.

Energy ETFs in Focus Ahead of Key Earnings Reports

Such disappointing earnings from two of the biggest majors says much about their cost of operations. Strong performances from the energy ETFs are no big surprise in the midst of high oil prices.

Third Quarter Earnings Derby: Stocks Still in the Game

How many of those positive earnings surprises were induced by the stimulus? Seeing lots of beats in absolute terms does not mean the economy is out of the woods.

Friday Roundup: Commodities, Emerging Markets

The FDIC shut down some more banks on Friday. Factor that into market spookiness for next week.

Market: Spooked Today, But Panic Attack Is Likely Temporary

Evidence of deterioration in the fundamentals is easy to find. Start with this weeks' numbers on consumer spending. Then back the Cash for Clunkers effect out of Q3 GDP. Finally, check shadowstats.com for more depressing news.

Today in Commodities: Vindication as Markets Make Sense

Corn might be a good long-term buy as long as the federal government subsidizes ethanol production. Raising cattle will be more expensive long-term due to rising energy prices, rising corn prices (those are related), and reduced land available for grazing.