bullwinkle

Economy in Crisis: Three Bears and a Missing Goldilocks

Actually if you have $100 of capital and $900 of debt funding $1000 of assets, all you need is a 10% decline to wipe out your capital, not an 11% decline. I don't think I'll subscribe because your math skills are so bad. Okay, just kidding, but this is the problem not only with banks, insurance companies, and other financial institutions, but also with private equity.

Terex Should Continue to Thrive

It certainly seems like a cheap stock. If the company reports decent earnings this month, the stock should have a significant bounce. The market is obviously concerned about the slowing global construction industry, but infrastructure and mining projects overseas should stay strong, and the long term prospects for this company seem very attractive to me.

Friday Watch: Oil, Chesapeake Energy, Concho

END, the stock you recommended last year and then abandoned, has been doing great this year, up 80%. Think it's still a good company?

Terex: Big Infrastructure Winner

Thanks for the idea ... bot some on the dip (crash?) Friday, and plan to buy more if it keeps going down. Terex has lagged behind BUCY and JOYG, two stocks being heavily hyped by Cramer. It trades much cheaper than its competitors (10x vs. 27x) and as you said it has the kind of product mix one looks for these days, strongly biased to heavy construction and mining machinery, and 65% overseas.

It seems the stock has far less downside than its over-hyped relatives, but substantial upside if the global infrastructure story remains intact, along with continued expansion of global mining activities. Plus they are headquartered here in America, and it's always good to root for the home team.

Penn West Energy: More Questions Than Answers

Regarding the "post-Halloween-massac... high around $36," PWE was last at that level on 6/7/07. Since then (through 6/4/08) the stock price is down 10% but the total return including dividends has been positive 3%. On the year, PWE is up 29% while XLE is up only 5%. The stock sports a 13% dividend and trades at about 11x earnings. The company is sitting on a lot of reserves situated in the friendly and secure country of Canada. What is not to like about this stock? Sure it will go down if energy prices get crushed, but if energy prices stay high and countries like China keep snapping up supplies around the globe, this stock should do very well.

One thing that could hurt the Canadian oil trusts is that Congress may pass a law that disqualifies dividends from preferential tax treatment. I have mine in my IRA anyway, but it would lessen the appeal of these stocks to US investors. In the meantime, the 13% tax-advantaged dividend is a steal.

Eaton: Unappreciated New-Age Stock - Barron's

The main problem I see with GE is that it still has a fairly high P/E considering that it is about 50% financial. A typical industrial stock trades around 13x and a typical financial these days trades around 9x, which suggests that a fair multiple for GE should be around 11x rather its current estimate of about 13-14x. This is a very hazy valuation methodology, but it suggests that the stock could drop another 15-20%, to around 25. The dividend yield is very appealing, however, and the stock seems to be forming a base around the 30 level, so if financials start picking up this stock should do better. However, if financials stay under pressure I think GE could go lower.