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EMC Shares Are Cheap And A VMware Spin-Off Could Still Be A Future Catalyst
- A pullback in EMC shares is a buying opportunity.
- Investors are disappointed by a few recent events such as earnings results, dollar strength and no timeline for CEO succession or a VMware spinoff.
- EMC shares are trading at strong support levels and the stock is cheap which means downside risks could be limited.
- A strong balance sheet, rising dividend and the 80% stake in VMware (worth about $25 billion) makes the stock even more attractive.
How I Am Playing The Rebound In High Yield Bonds And Getting Paid 9.5%
- Junk bonds make sense for 2015.
- Concerns about the decline in oil prices have faded and few asset classes offer yields of 6% or more.
- The European Central Bank's bond buying program just made junk bonds even more attractive.
- While some junk bond ETFs make sense, better values and higher yields are possible with closed end funds that trade at a discount.
Genworth: Why Investors Should Take Advantage Of The 50% Off Sale
- Genworth shares appear to be very undervalued after a decline of roughly 50%.
- This decline was primarily caused by reserve charges, and appears excessive based on the actual numbers.
- Genworth shares are undervalued, based on book value and the price-to-earnings ratio.
- With the long-term care reserve charges out of the way, this stock could be poised to rebound.
Metalico: Buyout Deal Arbitrage Could Offer 50% Gains
- A credible offer appears to put Metalico in play.
- The bidder already owns a major stake in Metalico and appears to have the resources, as well as strategic motivations for buying this company.
- Metalico management appears aloof regarding the offer, but that could be just a negotiation tactic in order to seek a higher bid.
- Metalico has responded by retaining an investment banking firm.
- I think this deal will happen at 78 cents per share, (or more) which represents an attractive premium of about 50% and an arbitrage play for investors who buy now.
Sterling Construction: I See Very Significant Upside In This $3 Stock
- Sterling Construction shares appear to be a bargain at $3, which is well below book value.
- Investors seem to have overreacted to some recent news and that has created an ideal buying opportunity.
- A new and highly experienced CEO has just been appointed to turn around the company and he is taking just $1 in salary and stock options.
- Based on multiple analyst price targets of $9 per share, book value at $7.49 per share, and a DCF valuation of $14 per share, I am a buyer of this.
2 Stock Bargains 'Hiding' In Plain Sight
- Genworth Is And Out Of Favor Play That Is Undervalued Based On Book Value.
- The market is trading near record highs, but there are always undervalued stocks worth buying.
- The stocks detailed below are well-known and yet trade at bargain valuations based on the price to earnings ratio and other metrics.
Genworth: A Cheap Stock With Bullish Long-Term Upside Catalysts
- Genworth Shares trade at "dirt-cheap" levels based on book value and PE ratios.
- The company has some challenges, but it also has some major long term trends going for it.
- Long-term care policy premium increases are coming and many of these policies will terminate in the coming years.
- Rising interest rates and a $100 million cost saving plan should also cause profits to increase.
- Genworth could be a prime candidate for a spin-off in 2016, which could create more shareholder value.
U.S. Steel Is One Of The Few Bargains Left In This Market
- This company recently beat analyst estimates and the stock remains cheap as it trades below book value.
- U.S. Steel shares also appear undervalued based on analyst price targets and the price to earnings ratio.
- U.S. Steel's CFO just purchased about $1 million worth of stock.
At $85, Caterpillar Shareholders Are In Deep Denial
- Caterpillar appears expensive even after a recent drop.
- This company has a significant amount of debt on the balance sheet and results have been underwhelming.
- I believe Caterpillar management has over-promised and under-delivered for years.
- New investigations add new potential expenses and risks, plus other significant challenges loom.
- Caterpillar shareholders appear to be in denial and this stock is likely to remain a poor performer.
Is $6 Possible For Transocean Shares?
- Transocean shares have rebounded from recent lows and the stock held up well after the company announced a major dividend cut, but risks remain.
- Transocean is trading at the high end of the recent range, therefore upside could be limited for now.
- A number of potential downside risks remain which include high debt loads, an aging fleet, and possibly even a secondary offering.
- One credible analyst has a $6 price target which implies this stock could plunge about 70%, before reaching the bottom.
Managed High Yield Plus Fund: A 9% Yield And A 12.5% Discount Is Hard To Resist
- Investors are showing renewed interest in high-yielding junk bonds.
- With yields of government bonds near record lows, high yield bonds look increasingly attractive.
- Concerns about exposure to the energy sector appear overblown, especially as oil is now rebounding.
- Closed end funds offer some of the highest yields and still trade at significant discounts to net asset value.
- The Managed High Yield Plus Fund offers a rare combination of high yields and professional management, while trading at a major discount to net asset value.
Secular Trends And Overvaluation Make McDonald's A Strong Sell
- McDonald's shares should be sold on the recent spike.
- This company is like a aging rock star that is trading on past glory.
- McDonald's shares are too expensive at nearly 20 times earnings.
- Competitive pressures are strong and likely to keep weighing on McDonald's financial results and share price.
Seadrill: Is It Finally Time To Start Buying?
- Seadrill shares appear cheap but significant risks remain.
- The big question could be whether or not Seadrill can avoid breaching debt covenants in the future and thereby avoid a secondary offering.
- On the positive side, the recent dividend cut preserves cash and will improve balance sheet strength.
- With a compelling valuation, but with potential downside risks looming, it only makes sense to consider a small position and average in over time.
Petrobras: This Stock Is So Bad It Might Be Good To Buy
- Petrobras shares trade for about one-third of the September 2014 highs.
- The negative investor sentiment towards the oil sector and towards Petrobras could be creating a very attractive buying opportunity.
- Petrobras shares appear to have hit rock-bottom levels and oil also may have bottomed out.
- This stock appears unloved and cheap and that could mean it is positioned to outperform.
I Am Buying The Pullback In Johnson & Johnson For Yield And Break-Up Potential
- Johnson & Johnson shares look increasingly attractive after a pullback.
- This company offers relative safety and stability due to its product line and balance sheet strength.
- This stock deserves to trade at a premium thanks to its yield and history of dividend increases.
- Johnson & Johnson shares look downright cheap when compared to the 10-year Treasury Bond.
- In the future, this company might be poised for a break-up into three separate companies.
Dreyfus High Yield Strategies Fund: This Net Asset Value Bargain Offers A Generous 9.7% Yield
- High yield bonds are rebounding and still offer generous yields.
- The Dreyfus High Yield Strategies Fund is trading at a significant discount to net asset value.
- With a yield of nearly 9.7% and a discount of nearly 6%, this closed end fund looks particularly attractive now.
Buy Russia: Now A Bargain At Just About 6 Times Earnings
- Russian stocks are very cheap at just over 6 times earnings and should be appealing for bargain hunters and contrarians.
- Weak oil prices have hurt Russia's economy, but oil may have bottomed out and could rise in the future.
- The issue with Ukraine remains a wild card, but it appears that all parties have too much to lose and that means a resolution could be likely.
Parker Drilling Is A Survivor And Too Cheap To Ignore At $3
- Parker Drilling shares now trade at a significant discount to book value.
- This company has a long history that should make investors confident it can manage the weakness in oil prices.
- International exposure reduces risks for investors.
- Oil prices appear to have bottomed and oil sector stocks are worth averaging into for a long-term rebound.
Think Blue Chip, Think Exxon: There Was No Blood And There Won't Be
- Many investors are hoping and waiting for a bigger buying opportunity in Exxon, but that doesn't seem likely for a number of reasons.
- Exxon just reported better than expected earnings results and the stock remains a blue chip favorite for many investors.
- The oil price drop is not likely to last and the relative strength in Exxon shares could be a signal that energy prices will rebound fairly soon.
- Exxon shares look downright cheap on a yield basis, when compared to the ten-year U.S. Government bond.
- Rig shutdowns and increased oil demand are likely to boost prices in the coming months and that should also support Exxon shares.
Update: American Superconductor Raises Guidance, And India Boosts Wind Goals
- American Superconductor provides preliminary results that beat prior guidance.
- GE sees the potential in resilient grid systems.
- India recently boosted wind power targets and this could benefit American Superconductor.
- Stock remains undervalued.
Oil Prices Spike 8%: This Is Another Potential Sign Of A Bottom
- After a big plunge, oil appears to have been building a solid base for the past couple of weeks.
- Geopolitical risks appear to be coming back into the picture to support oil prices.
- Eni's CEO believes the next oil spike could take it to $200 per barrel, if OPEC does not react to keep prices at a healthy level soon.
- Investors should realize that oil demand is expected to grow in 2015, and that with rig shutdowns taking place now, the seeds of another price spike are sown.
McDermott's Recent GE Deal And More Details On This $2 Stock
- McDermott shares appear severely undervalued by the market due to very negative investor sentiment.
- A closer look into the financials, contract backlog and business model indicates that market pessimism is overdone.
- This company has a contract backlog of about $4 billion, nearly $900 million in cash and no significant debt (of just $300 million) due until 2019.
- Most analyst price targets suggest this $2 stock could double in value, if not more.
- A recent deal with GE boosts the long-term outlook.
Caterpillar: After A Big Drop, Is This Stock A Buy?
- Caterpillar shares plunged due to disappointing earnings and weak guidance.
- Many investors might be tempted to buy now, but this stock is not really cheap.
- I believe investors should also consider the balance sheet as a potential downside risk factor more thoroughly.
- With a number of remaining challenges, this stock might not have much upside for now.
Update: U.S. Steel Earnings Soar Past Estimates
- U.S. Steel easily beat results which shows management is executing and that the market has been too bearish on this stock.
- This stock is cheap as it trades below book value and for just about 7 times earnings.
- Shorts could help fuel gains in the coming days and the longer-term outlook could also brighten as cheap oil boosts consumer spending on autos and appliances.
OPEC Made A Huge Mistake That We Can All Profit From
- OPEC appears to have made a huge mistake financially by not simply cutting production.
- OPEC members including Saudi Arabia are in this business for money and long-term decisions will be based on this point, not on politics or other short-term factors.
- By doing some basic math, it's easy to see that OPEC could be much better off by simply cutting production rather than "cutting prices".
- Production is being cut by companies in the U.S. and OPEC could also make cuts if oil prices don't rebound soon.
- The inaction by OPEC is likely temporary as is the oil "glut" which makes this a potentially significant buying opportunity for values not seen in many years.
These 5 Signs Indicate That Oil May Have Already Hit Rock Bottom
- Oil appears to be stabilizing and could now be at or near the bottom.
- The gold to oil ratio and a few key oil stock charts also indicate that we might have already seen the bottom.
- Historical data from the 2008 Financial Crisis and data from past oil plunges now suggests a powerful rally may be looming.
- New policies from Europe should boost demand for oil in the coming months which could begin to support prices now.
- Significant new buying interest in the energy sector from industry insiders, major corporations and private equity firms also suggest a bottom may have been reached.
'Smart Money' Keeps Buying Cheap Shares Of J.G. Wentworth
- This relatively unknown stock is trading for just about 6 times earnings estimates.
- In this niche segment, J.G. Wentworth is an industry leader with a solid business model.
- Kerrisdale Capital, and other "smart money" investors continue to hold large stakes and some have even bought significantly more in the past weeks.
Oil Doomsayer Price Predictions Could Be A Major Buy Signal For The Sector
- Analysts and media outlets appear to be grabbing headlines with extremely bearish oil price predictions.
- These types of predictions may never come to fruition, just as bold and overly bullish predictions have failed in the past.
- Investors should avoid short-term and fear-based thinking and focus on the fact that oil prices rebounded after the 2008 financial crisis plunge.
- Investors should also realize that rapid rig shutdowns will cure the current oversupply and balance will return to the market in the future.
- It makes sense to be averaging into the oil sector while extremely negative headlines continue to capture the attention of the markets.
Oil Stocks: Buy Low (Now), Sell High (Later)
- After a oil price plunge, investors are getting a chance to buy low and participate in a future potential rebound.
- Supply destruction is taking place and that should begin to support oil prices.
- Consumption remains solid and could grow by nearly a million barrels per day in 2015, according to the IEA.
- Extremely bearish price predictions and cover stories for oil could be a major buy signal.
U.S. Steel: After A 50% Drop, This Stock Looks Strong For Value Investors
- While U.S. Steel is probably experiencing reduced demand for tubular steel products, it is not enough to warrant a 50% decline in the share price.
- It is possible that increased demand from other sectors could offset any weakness in the energy sector, as cheap oil can boost economic growth.
- This stock appears to be a bargain as it trades well below book value and for just about 7 times earnings.
- Cost cutting measures continue and that could translate into higher profits in the future.
Update: American Superconductor Outlook Bullish With Growing Cyber-Security Threats And New $1.50 Price Target
- The market appears to be unaware of the potential emerging from American Superconductor's resilient grid system.
- New and bullish analyst coverage suggest this stock is worth double the current price.
- Shorts continue to cover this beaten-down stock and it has built a solid base over the past few weeks which could signal that downside is limited.
Update: McDermott And General Electric Announce A New Oil And Gas Joint Venture
- General Electric and McDermott have announced a new joint venture which could lead to significant opportunities.
- General Electric is one of the world's largest companies and it has been expanding its oil and gas industry exposure.
- McDermott shares are very undervalued due to negative investor sentiment in the oil sector and this has created a significant buying opportunity.
- At less than $3, McDermott shares are near Financial Crisis lows of 2009, and investors who bought back then made huge gains as it rebounded to $25 by 2011.