When selecting income investments, the three most important questions to answer are : 1) Is the investment increasing its dividend each year, 2) Is the increase likely to continue into the future and 3) Are you being compensated for the risk you are taking? When you answer yes to all three of the questions, you just might have found an excellent income investment.

F3Q09 Earnings Call

September 17, 2009; 11:00 am ET

• Cuomo subpoenas BoA directors. New York Attorney General Andrew Cuomo subpoenaed five board members from Bank of America (BAC) in connection with the probe over Merrill Lynch bonuses. The five directors will likely be asked how much they knew about Merrill's losses, what role they played in disclosure decisions, whether there was pressure from government officials and whether the board sought outside counsel. Cuomo is also considering possible civil fraud charges against CEO Ken Lewis.
• eBay faces Skype lawsuit. The founders of Skype software have filed a copyright lawsuit against current owner eBay (EBAY) and the proposed buyers of a 65% stake in Skype, alleging breach of licensing terms and escalating eBay's ongoing legal drama over the unit. eBay denied the claims, but the suit could complicate the deal which is due to close in Q4 2009.
• Kodak takes a moment for financing. Eastman Kodak (EK) plans to raise up to $700M in debt to shore up its balance sheet. The financing, which is being led by Kohlberg Kravis Roberts, gives Kodak more financial breathing room and will help it pay off debt due next year. However, the deal is not without its costs and KKR could end up with as much as a 20% equity stake in Kodak through warrants issued as part of the deal. Shares -2.7% premarket (7:00 ET).
• FDIC repackages loans. The FDIC launched a new program yesterday to package loans from failed banks and subsidize their purchase by investors. To kick-off the long-awaited program, the FDIC announced a partnership with Residential Credit Solutions to take ownership of loans originally worth $1.3B. Officials said a second deal will follow soon, and others will be announced before the end of the year.
• Insurance regulators target ratings agencies. Regulators of some of the largest bond buyers in the world are considering cutting the role of ratings agencies in the market in response to the poor job the agencies did with complex mortgage securities. State insurance regulators are in the early stages of reassessing their reliance on firms like Moody's (MCO) and Standard & Poor's (MHP) and may opt instead for analysis from other financial firms with expertise in valuing the securities.
• California AG targets ratings agencies. In addition to being challenged by insurance regulators (see above) and facing heightened scrutiny from the SEC, ratings agencies will soon be under investigation by California Attorney General Jerry Brown for the role they played in the economic crisis through their evaluations of asset-backed securities. Ratings agencies "worked behind the scenes with the same Wall Street firms that created [the securities]," said Brown, earning "billions of dollars in revenue, at a rate double what they earned for rating other financial products." Brown didn't specify which companies will be investigated.
• Google focused on book deal. Google (GOOG) is reportedly in talks with the Department of Justice and a group of authors and publishers to modify its book-scanning settlement, with the hope of easing regulators' concerns that Google's ambitious project will discourage companies from competing for access to books online. Meanwhile, Google is buying reCaptcha, an online fraud prevention start-up, to use in its book-scanning project. Terms of the deal weren't disclosed.
• Oracle's sales cloud tech recovery hopes. Oracle (ORCL) reported quarterly earnings in-line with estimates (see details below), but its software sales were sharply lower than expected. New license sales were down 17% vs. the 4-14% decline Oracle had forecast, disappointing analysts hoping to see further signs of a tech sector rebound. Shares -2.1% premarket (7:00 ET). (Read Oracle's earnings call transcript)
• Toyota revs up for U.S. sales push. Toyota (TM) is planning a major marketing campaign to lift U.S. sales in Q4. The effort will cost $1B, which is 30-40% more than Toyota usually spends in a quarter, and will include subsidized leases and loans, customer incentives and financial support for dealer advertisements. The company also intends to expand its line of Prius hybrids.
• BoJ holds rates steady. As expected, the Bank of Japan left its key interest rate unchanged at 0.1%, but raised its economic forecast for the first time since July. The bank said "Japan's economic conditions are showing signs of recovery," a marked improvement from July's comment that the country's economy had "stopped worsening." (Read BoJ's statement (.pdf))
• Housing index ticks up. The NAHB Housing Market Index increased by 1 point to 19, its third straight gain and its highest point since May 2008. Current sales expectations and prospective buyer traffic ticked up, but expectations for the next six months declined slightly, likely as a result of the expected expiration of the homebuyer tax credit.
• Consumer prices rise. The Consumer Price Index rose 0.4% in August from the previous month and fell 1.5% Y/Y, vs. consensus of +0.3% and -1.7%. Core CPI rose 0.1% M/M and 1.4% Y/Y, both in-line with consensus.
• TIC: Foreign purchases fall. July Treasury International Capital data was released yesterday, with net foreign purchases of long-term securities registering at $15.3B, way down from June's $90.7B. Foreigners picked up $44B in long-term U.S. securities ($32.1B by private investors and $12B by official institutions), and U.S. residents bought $28.8B in foreign debt.
• Industrial production increases. Industrial Production rose 0.8% in August vs. consensus of +0.6%, the second straight monthly gain. July's increase was revised to +1% from +0.5%. Ex-auto, manufacturing was +0.4%. Capacity utilization rose to 69.6% from 69%, but is still 11.3 points below its historical average.
• Current account deficit. The Current Account Deficit was $98.8B in Q2 vs. consensus of $92B. The Q1 deficit was revised to $104.5B from $101.5B. The deficit on both goods and services moved lower.

Earnings: Thursday Before Open

• Pier 1 Imports (PIR): Q2 EPS of -$0.17 vs. consensus of -$0.22 (may not be comparable). Revenue of $287M (-11%) vs. $282M. Comparable store sales -7.6%. (PR)

Earnings: Wednesday After Close

• CKE Restaurants (CKR): Q2 EPS of $0.22 in-line. Revenue of $336M (-5%) vs. $341M. Same-store sales declined 2.3%. (PR)
• CLARCOR (CLC): FQ3 EPS of $0.42 misses by $0.01. Revenue of $230M (-17%) vs. $246M. (PR)
• Herman Miller (MLHR): FQ1 EPS of $0.22 beats by $0.03. Revenue of $324M (-32%) vs. $326M. (PR)
• Oracle (ORCL): FQ1 EPS of $0.30 in-line. Revenue of $5.1B (-5%) vs. $5.3B. Operating margin up 570bp to 46%; reduced value of foreign currencies hurt EPS by $0.02. (PR)
• The Dress Barn (DBRN): FQ4 EPS of $0.39 beats by $0.02. Revenue of $399M (+4%) vs. $401M. (PR)

Today's Markets

Markets worldwide are showing gains.

Standard & Poor's recently updated the list of dividend growers from the S&P 1500 Index. In addition to the list containing decent growers, the companies exhibit a strong dividend coverage ratio. The criteria used in assembling the list include:

• paid increasing annual cash dividend for the past 10-years

• paid increasing annual cash dividends for the past ten years

• 2009 estimated coverage and 2010 ratio of at least 2-to-1 (based on street estimates divided by the current 12 month indicated dividend rate)

Source:

Standard & Poor's (.xls)

Some of the best economic discussions I’ve had this month were with my automechanic. We’ve discussed solar power. Land use laws. Housing development. And yes, trends in new and used auto sales. We are both firmly in agreement: new auto sales in North America peaked this decade and are unlikely to see those levels again for a long, long time.

F1Q09 (Qtr End 02/28/09) Earnings Call Transcript

March 19, 2009 11:00 am ET

At the end of each week, our market direction radar scans the Hillbent 3000 universe (minimum average daily volume of 100k and largest 3000 market capitalization stocks) for the top 3 and bottom 3 sectors based upon aggregate performance and analyzes their winners and losers.

Using this weekly sector report on a regular basis allows Hillbent.com’s readers to efficiently monitor sector rotations and investor sentiment biases.

The markets ended September with a big decline in the major indexes. Last week the volatility of the past month continued as stocks traded like a yo-yo – falling 777 points after congress failed to approve the 700 billion dollar bailout, and then rising 500 points before hitting new 52 week lows by the end of the week after the bailout was approved.

There was some negative dividend news from S&P that there were 138 dividend cuts or suspensions in the third quarter while 346 issues increased their payments to shareholders. Most of the dividend cuts were in the financial sector. Standard and Poors reported the following:

When most people hear the phrase “missed opportunities" they tend to reflect on past events and what could have been. By nature I am forward looking, so "missed opportunities" for me is the present and the future.

At some point in the future, will we look back on our actions today and refer to them as our greatest missed opportunity? There is a lot of fear in the market. Not all companies are created the same. While the market roars as a bear to frighten the weak, some prominent companies stand strong.

F3Q08 Earnings Call

September 18, 2008 11:00 am ET

The amount of water on this planet hasn’t really changed in the last million years. However, today there are over six billion humans drinking and bathing in the stuff. And while the world’s population has doubled in the last 60 years, water consumption has more than tripled over the same time period.

Q2 2008 Earnings Call

June 18, 2008 11:00 am ET

Clarcor, Inc. (CLC)

Q1 2008 Earnings Call

Q4 2007 Earnings Call

January 17, 2008 11:00 am ET

China's Rise as Auto-Parts Power Reflects New Manufacturing Edge

TWST: What is CLARCOR?

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