North Carolina's Supreme Court overturns a decision by state regulators that allowed Duke Energy (DUK) to increase rates for customers, finding the state utilities board didn't fully analyze the issue before approving a 7.2% rate hike in 2012, which provided DUK a guaranteed 10.5% rate of return on equity. DUK believes the increases will be upheld upon review. [View news story]
All part of the political dance going on. The rate increase is badly needed and on the average monthly bill is very manageable. Jim Rogers will do an excellent job in explaining the balance that has to be maintained to make sure the state has adequate power capacity for the hot summer coming up and many more to come and pursue the path to renewable energy sources and maintaining the retirement rate for coal plants.
Good rundown on the positives and mentioning some of the negatives but the main problem remains: PR, perception by the public, mortgage litigation, the stockholder suits and all the other litigation that hopefully is coming to an end. But now, we have this Elizabeth Warren ranting. A new sideshow where this "do gooder" is getting too much exposure and championed by the liberal zanies with BAC a target of continued venom.
What needs to be done to counter this new attack on the financial sector is to show how well the bank has saved many hundreds if not thousands of homeowners by mortgage modifications allowing them to stay in their homes and lower their payments. Championing those who extended themselves on the credit dole to buy boats pulled by Escalades and allowing them to sue the banks is simply not the way to go. This permanently puts the foreclosed homeowner into a category of a poor credit risk never again to be extended a loan by any financial institution.
Warren has to be shown that putting people into permanent welfare situation is simply not the way to go and to allow the banks to work with their customers for an optimum solution for all parties. We need to turn welfare recipients into tax payers and good bank customers. She should be told to turn off the viper tongue and champion a healthy financial sector to service the economic recovery
Johnson & Johnson: 3 Things You Need To Know Before Buying At Current Levels [View article]
Interest rates are at historically low levels. JNJ's dividend is providing a healthy current return over that of a "risk-free" investment in Treasury securities. Investors hungry for yield are buying stocks to provide a better return. Especially for those like myself who are plagued by bond and preferred calls pouring lots of cash into portfolios. This cash has to be reinvested. JNJ is a dividend grower - this makes it very attractive.
I believe that valuing a stock price with historic norms where investment returns from bonds have been 2-3 times higher is not the way to go. The market is still undervaluing JNJ is if the low interest rates continue for more than 2 years. Two more years of low rates are in the bag because I doubt that you will see any increase in rates before mid-term elections.
I see no need to reduce my JNJ holdings at this time. I need the income to pay my bills.
Bank Of America: When Is The Dividend Hike Coming? [View article]
According to the key stats on Yahoo, with the billions of shares outstanding it is owned at a lower percentage that the average DJIA stock by institutions and the insider percent age is at 0.00% - it could be from not having the data.
Cisco Offers Investors An Annualized Gross Return Of Between 15-18% Over The Next 5 Years [View article]
Wow - another stock hype article on what to expect within 5 years. The last one read here on SA I believe was for MSFT saying it will provide a 25% annual return in that time period. With the stock now 1 standard deviation "SD" from the 5 year average (however that was computed), as the stock stays in the relatively tight trading range as it has over the past 5 years - what is this company going to do to make it exceed its high during this past period which is approximately 27 by eye-balling the chart? To do that again would provide only a 5.5% annual return. The 1 SD is a statistic that sets a range of probability +/- 66%. It is well within a normal trading range right now and it could decline further. The bias is now seeing in at the low end of that range. To say it is terribly undervalued? I would prefer to see it 2 SD from the average.
Goldman's Pointless Warning And What You Can Do About It [View article]
Goldman starts out by saying that loan growth is declining by 2% then say the loan business in total is declining. If the growth is down by only 2% what about the other 98% that has already grown? The people who already have loans outstanding didn't pay them off in one quarter. These loans plus the growth in business that has only declined at a 2% pace is greatly adding to profits.
I have recently bought BAC, been adding and now have an average date of ownership 2 week old that is producing an annualized growth of 57%. I would be extremely happy to have a growth rate decline of 2%.
Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
25% wishful thinking. What the business does and what the stock price is are two entirely different things. As go-go companies mature, their investment ratios decline, some actually go out of business. My performance with MSFT is only a 7% annualized yield (stock price gain + Dividend) but I have only owned for approximately 6 months. After a good day yesterday, tech stocks are due for profit taking. I am inclined to look for better LT performing stocks and to try to hold onto MSFT with its potential to possibly catch up with the DJIA average performance.
Don't fight the tape. And don't stop being worried. The tape is up the market is going higher. Can't dispute that. Flood of liquidity is still coming in. Funds have to buy, the indexes are going up, it keeps going higher. Bonds are going up too and cash is still building up on the sidelines from those nay sayers.
Bank Of America A Buy At Current Price Levels [View article]
The bank, the bank, the bank - But, what we are talking about is the one of the largest financial conglomerates in the world. With confidence being restored, a flood of liquidity continues to enter the market. And its not coming from bonds - they are getting bought along with preferred stock (those still available as mine are seeing to be called). Who is on the exchanges doing this for their customers - THINK Merrill!
Merrill Lynch was a premiere brokerage firm before the financial melt-down it still has its vitality. Any analyst to truly look under the hood of this portion of the company would see historically they have much higher operating profits and ratios such as the P/E and P/B - much higher that the stogy bank.
The fully recovered business will eclipse the previous valuations of all the components combined at their peak during the first decade of the turn of the century. Even considering the dilution involved, the future valuations on a per share basis will be at record highs in less than 5 year, IMHO.
Microsoft - Growing Strength In The Enterprise Is Where The Real Value Is [View article]
I too am a LT investor but currently I much rather own a Mexican tortilla vendor than MSFT. To get superior results its better to be in companies that are exhibiting LT up trends.
Bank Of America's Mean Reversion Illustrated [View article]
Adam, good chart on the charge-offs. This has been needed here on SA since recently reading of the increase of delinquencies and amounts being set asside for bad loans. I commened that this was only symptome of increase loan business. But you have shown that these bad loan losses are declining.
This makes me feel like Tevur the milkman in Fiddler on the Roof - "May God strike me with the curse!"
Alcoa Outlook After Q1 Earnings: Aluminum Weakness Still Overshadows Downstream Success [View article]
It certainly is a commodity stock and will not do well again until the economy heats up and we have some inflation. Along with the other metals, the author points to the price slump and thus the stock price stuck in the mud. We are starting to see inflation in housing. Metal prices will advance as soon as we start seeing stronger employment numbers and the Fed increasing interest rates. That will start the stampede back into AA but that may be several years off.
Microsoft - Growing Strength In The Enterprise Is Where The Real Value Is [View article]
Being retired and being away from any enterprise other than managing my family portfolios, this article is an eye opener to the business organization software market. The whole market is looking for more favorable trends as far as profits to develop from the new software availability. Networking stocks got hit of recent making any tech stock purchase too tentative.
I believe it will take awhile longer to see major enterprise software upgrade purchases. Desktop improvement should drive the hardware end of the business first as has been the traditional evolution of technology. Meshing with the cloud will come later but just a desktop upgrade with faster speed and lower power consumption would greatly improve business productivity.
It will come but it is going to take awhile longer. As we wait for the grand correction in the market, I am dumping tech positions. Already sold IBM and APPL. MSFT may be next along with CSCO, INTC & AVGO. When they really get clobbered, that may be the time to buy them back.
Is There Room For Growth In General Electric's Dividends? [View article]
Must also mention while GE invests in their growth they also divest in business that do not go along with their core. After the recession presures and the wars are over, they are positioning themselves to improve our infrastructure. The recent oil exploration acquisition is the best example that followed divestiture of NBC.
Why Caterpillar Shares Could Drop To $50 And Still Be Fairly Valued [View article]
North Carolina's Supreme Court overturns a decision by state regulators that allowed Duke Energy (DUK) to increase rates for customers, finding the state utilities board didn't fully analyze the issue before approving a 7.2% rate hike in 2012, which provided DUK a guaranteed 10.5% rate of return on equity. DUK believes the increases will be upheld upon review. [View news story]
5 Reasons To Buy Bank Of America [View article]
What needs to be done to counter this new attack on the financial sector is to show how well the bank has saved many hundreds if not thousands of homeowners by mortgage modifications allowing them to stay in their homes and lower their payments. Championing those who extended themselves on the credit dole to buy boats pulled by Escalades and allowing them to sue the banks is simply not the way to go. This permanently puts the foreclosed homeowner into a category of a poor credit risk never again to be extended a loan by any financial institution.
Warren has to be shown that putting people into permanent welfare situation is simply not the way to go and to allow the banks to work with their customers for an optimum solution for all parties. We need to turn welfare recipients into tax payers and good bank customers. She should be told to turn off the viper tongue and champion a healthy financial sector to service the economic recovery
Johnson & Johnson: 3 Things You Need To Know Before Buying At Current Levels [View article]
I believe that valuing a stock price with historic norms where investment returns from bonds have been 2-3 times higher is not the way to go. The market is still undervaluing JNJ is if the low interest rates continue for more than 2 years. Two more years of low rates are in the bag because I doubt that you will see any increase in rates before mid-term elections.
I see no need to reduce my JNJ holdings at this time. I need the income to pay my bills.
Bank Of America: When Is The Dividend Hike Coming? [View article]
http://yhoo.it/Z9fmCs
Cisco Offers Investors An Annualized Gross Return Of Between 15-18% Over The Next 5 Years [View article]
Goldman's Pointless Warning And What You Can Do About It [View article]
I have recently bought BAC, been adding and now have an average date of ownership 2 week old that is producing an annualized growth of 57%. I would be extremely happy to have a growth rate decline of 2%.
Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
Counterfeit Rally? [View article]
Bank Of America A Buy At Current Price Levels [View article]
Merrill Lynch was a premiere brokerage firm before the financial melt-down it still has its vitality. Any analyst to truly look under the hood of this portion of the company would see historically they have much higher operating profits and ratios such as the P/E and P/B - much higher that the stogy bank.
The fully recovered business will eclipse the previous valuations of all the components combined at their peak during the first decade of the turn of the century. Even considering the dilution involved, the future valuations on a per share basis will be at record highs in less than 5 year, IMHO.
Microsoft - Growing Strength In The Enterprise Is Where The Real Value Is [View article]
http://yhoo.it/11Ok1Lb
Bank Of America's Mean Reversion Illustrated [View article]
This makes me feel like Tevur the milkman in Fiddler on the Roof - "May God strike me with the curse!"
Alcoa Outlook After Q1 Earnings: Aluminum Weakness Still Overshadows Downstream Success [View article]
Microsoft - Growing Strength In The Enterprise Is Where The Real Value Is [View article]
I believe it will take awhile longer to see major enterprise software upgrade purchases. Desktop improvement should drive the hardware end of the business first as has been the traditional evolution of technology. Meshing with the cloud will come later but just a desktop upgrade with faster speed and lower power consumption would greatly improve business productivity.
It will come but it is going to take awhile longer. As we wait for the grand correction in the market, I am dumping tech positions. Already sold IBM and APPL. MSFT may be next along with CSCO, INTC & AVGO. When they really get clobbered, that may be the time to buy them back.
Is There Room For Growth In General Electric's Dividends? [View article]