BigOlDave

14 Promising Chinese Dividend Stocks

The Himax Technologies (HIMX) stock price has, indeed, been a disappointment for the long-term holder. But the price changes do NOT go lock-step with the dividend payout. Pop up a chart with the dividend payments and see for yourself.

HIMX's Chinese managers are educated in the U.S. and look like a savvy group. They have a good record of managing a maturing constellation of products, but the latest Q report indicates new business coming on-stream.

At the current price ($2.42/ADR), this is a good stock to fill in the cracks if you have some idle cash. I think the June 2010 dividend will be down to $0.25 -- but that's still 10%, with excellent upside potential.

I've doubled my position on the recent price slide.

Beyond GLD: Four Alternative Gold ETFs

According to the latest (7/31/09) quarterly report from Central Fund of Canada (CEF), 99.4% is held in bullion in Canadian Imperial Bank of Commerce vaults. The 0.6% in certificates is an expedient pending receipt of the bullion.

This is safer than having gold or silver in physical form in your home, and at least as safe as storing it in a safe deposit box.

I do not trust any of the ETFs.

I trust the Central Fund of Canada, particularly since they have nothing to do with the Canadian government.

GM: Still a Long Road to Hoe

The saying is "...a long ROW to hoe".

Not "ROAD".

Words reflect worth: use them wisely.

The Good and Bad of Wal-Mart

...and, as a Wal-Mart shareholder, I can assure you that owning the stock (as opposed to, say, leaving it in the bank to accrue a really paltry interest rate) is not making that sector of the economy (Wal-Mart shareholders) any richer either.

If I don't see better days soon, I'm getting off this slow train!

Deja Vu 2008: Crude Oil Market Entirely Detached from Fundamentals

I doubt if there is a single, original idea coming from any economist on earth. This is not to disparage economists. Dian has rank in the crowded field for one reason: she picks up key pieces of information, relates to other things, then explains it clearly to us.

As for me, I'm grateful for her efforts. If I had one criticism -- which goes for perhaps 90 of the SA contributors -- it's that she (or he?) doesn't give enough actionable advice. Predicted direction of a related stock would give us not only information, but something to think about that might improve our health ...our economic health, that is.

Our Market Forecast Project Results

McDonald's (MCD) doesn't appear on any of these lists. Very curious.

The DJIA's Dangerous Indexing Philosophy

I compare my portfolio with the S&P 500.

Maybe that's because, when I hear the media report "the S&P is up 1.09 points for the day, closing at 1046.50", it's easy for my aging mind to calculate that the market's moved only about a 10th of a percent.

So I'll assume that I've made a little money today.

Cramer's Stop Trading! The Fall of Wal-Mart?(11/3/09)

For many years I worked for a paper company that ran tons of boxes for companies like P&G. P&G sourced through several of our competitors, whip-sawing us to the point where the business had no profit margins. Later many of these paper companies got out of the business entirely, or would not bid on business for cut-throat outfits like P&G.

Wal-Mart is similarly "cut-throat", dealing only with suppliers who sell to them at a price where Wal-Mart (1) makes an acceptable (usually low) profit margin; AND (2) can offer the supplier's product at a price at or below competitors' stores'. Wal-Mart buyers are savvy negotiators who will always leverage volume (good for suppliers -- covers fixed costs and allows economies of scale) and price (good for Wal-Mart customers and, ultimately, shareholders). Suppliers are forced to tighten up their operations to stay in business.

Suppliers that opt to fight with Wal-Mart will get to see Wal-Mart's back: Wal-Mart will walk away. If Stanley Black & Decker thinks they can now squeeze higher prices out of Wal-Mart (or Lowes or Home Depot, for that matter), they will end up with a lot of power tools in their finished goods inventory. If I ever replace my Craftsman drill, I could care less who makes it, as long as it's good value (value = quality + price).

Many Americans still don't accept that all markets are now global. If we can't compete, we die.

In the meantime, Wal-Mart looks like the best, one-stop place in town for good stuff at a bargain price. It lets me maintain a standard of living my income would otherwise no longer permit.

Owning Wal-Mart: Taking the Vito Corleone Approach

Three things worth noting about Wal-Mart (WMT):

(1) S&P gives it 5 stars (“Strong Buy”) with a Target price of $62/share by mid-August 2010. That’s appreciation of over 2%/month, which, added to the current yield of 2.2% gives a return of 27% within the next year. Twenty-two analysts listed by FirstCall have a “Buy” on WMT (7 “Strong Buys), 11 “Buys”, and 4 “Holds”).

(2) At the rate WMT has increased dividends in past, the 2010 quarterly dividend (full year to be announced in the first week of March 2010) may be $0.32. At current prices ($50.44), that’s still only 2.5%. I would expect WMT to lure more institutional ownership (currently 37% of float) by raising the dividend to $.34/quarter, which still would be only 2.7%.

(3) Management has stated that it continues to pursue a strategy of low prices and high value, but has recently stated that WMT will be focusing less on building stores and more on improving net margins. Operating margins are a paltry 5.65% (vs. Sector’s 7.56%), but net margins are 3.42% (vs. Sector’s 2.63%). Part of this is due to addition of grocery departments, which generally have razor thin margins. This also means that prices may not be cut as much, but the other retailers’ net margins will be even further squeezed.

Obviously, I should disclose that I have a relatively large position in WMT. But I’m also a trader: I don’t fall in love with any investment and, if WMT doesn’t perform or if there are better opportunities elsewhere, I’ll not be a long-term holder.

Dave

Top 10 Investment / Finance Websites: September 2009

Interesting that Google doesn't rate: something Google doesn't do well and apparently won't try to improve. The comments posted on Google are 99% spam.

Dave

Top 10 Investment / Finance Websites: September 2009

For those of you with Vanguard accounts, you'll find the online services excellent. Before investing in a stock, you can check analyses by S&P, Reuters, and FirstCall. Vanguard has a brokerage service that permits limit orders, not just market orders. This has saved more than the brokerage fee ($20/trade).

Perhaps Fidelity has similarly extensive services ...?

Dave

O Canada (Part II): There's Gold in Them Thar Hills - and Plains

If anyone doubts the value of paying a 7-12% premium to buy into the Canada Fund (CEF), just pop up its chart and compare it to the gold ETF (GLD) and silver (SLV). CEF outperforms GLD, but SLV is doing the best. CEF is a blend of the two, holding about 60% gold and 40% silver. I suspect that, in the future, it will tilt toward silver, which is under-priced relative to gold.

And I feel a lot more comfortable owning CEF -- knowing the gold and silver they say is there is really there!

HOG Is About to Catch Swine Flu

Here's Value Line's take in this week's edition:

"We are purchasing shares of Harley-
Davidson for Portfolio III this week.
With annual revenues of about $4.5 billion,
Harley is one of the world’s most
recognizable manufacturers and marketers
of heavyweight motorcycles.
The leisure-related stock, though well
off its 52-week low of $8, has taken a
big hit over the past year. Motorcycle
demand has dried up in the face of
weak economic fundamentals, and investors
have grown increasingly concerned
that the aging of the huge Baby
Boomer generation would permanently
damage the company’s domestic
business. (Baby Boomers have long
had a love affair with high-end Harley-
Davidson bikes.) But we believe that
the company’s best days are yet to
come, and that results will recover
quickly once the global economy
warms up.

The company, now headed by CEO
Keith Wandell (he took the helm in
May), has been managing its business
fairly well during the recession. Indeed,
Harley has slashed headcount,
boosted manufacturing efficiencies,
and significantly reduced its inventory
position, factors that should support
good earnings growth once the demand
demand picture stabilizes. Meanwhile,
over the next 3 to 5 years, results are
poised to benefit from share advances,
efforts to attract younger consumers in
the U.S., and a foray into the large market
in India."

I'm not convinced.
Dave

Real Journalists vs. Bloggers: Which Journalism Will Prevail?

nic,

As a journalist, you had to have heard of "Spell Check". When you post, just click "ABC Check Spelling" and your post will more closely resemble that of someone who uses words for a living.

Dave

Virtualization Demands Will Drive the Next Network Revolution

Though "Long VMware", which do recommending as an investment to play this space?

Average P/E for this group is 33 (leaving out Sun with negative earnings), ranging from the long-in-the-tooth IBM and HP in the teens to VMware at 52 !

This is a nice recap of the SRI Infrastructure 2.0 meeting, but I'd have liked some investment ideas pro- or con- for these 11 companies, or others that might be big-time victims of the oncoming changes.

Dave