Last week, the real-money Inflation-Protected Income Growth portfolio lost a few hundred dollars, essentially giving back the gains of the prior week that had pushed its total returns past 10%. It was a case of "easy come, easy go," as once again, no transactions took place in the portfolio.
Still, it was an active week for many of the companies held by that portfolio, as we're well into the quarterly confessional cycle known as earnings season. Ultimately, earnings are what drive a company's ability to pay and increase its dividend. Those dividends are the key drivers of the iPIG portfolio's strategy of seeking an income stream that grows at least as fast as inflation, so it's important to watch the earnings that support them.
Which way did they go?
Perhaps the biggest disappointment of the week came from fast-food titan McDonald's (NYSE: MCD ) , which announced flat earnings and negative same-store sales, while also warning on sales for April. The company blamed penny-pinching consumers and intense competition. Perhaps even more ominously, McDonald's CFO's comments could be interpreted to suggest that the company might be willing to enter a price war in order to gain share.
Top Clean Energy Companies To Watch In Right Now: Information Services Group Inc.(III)
Information Services Group, Inc. operates as a fact-based sourcing advisory company principally in the Americas, Europe, and the Asia Pacific. It provides strategic consulting, benchmarking and analytics, managed services, and research services with a focus on information technology, business process transformation, and enterprise resource planning. The company serves financial services, telecom, healthcare and pharmaceuticals, manufacturing, transportation and travel, and energy and utilities industries; and state and local governments and airport and transit authorities. Information Services Group, Inc. was founded in 2006 and is based in Stamford, Connecticut.
Advisors' Opinion:- [By Robert Abbott]
The company lists competitive factors this way, and in this order in its 10-K: "...(i) vendor and product reputation; (ii) product quality, performance and price; (iii) the availability of software products on multiple platforms; (iv) product scalability; (v) product integration with other enterprise applications; (vi) software functionality and features; (vii) software ease of use; (viii) the quality of professional services, customer support services and training; and (ix) the ability to address specific customer business problems."
Top 5 Penny Companies To Invest In 2014: Transocean Inc.(RIG)
Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The company also offers well and logistics services. In addition, it engages in oil and gas exploration, development, and production activities primarily in the United States offshore Louisiana and Texas, and in the United Kingdom sector of the North Sea. As of February 10, 2011, the company owned, had partial ownership interests in, and operated 138 mobile offshore drilling units, including 47 high-specification floaters, 25 midwater floaters, 9 high-specification jackups, 54 standard jackups, and 3 other rigs, as well as 1 ultra-deepwater floater and 3 high-specification jackups under construction. Transocean Ltd. was founded in 1953 and is based in Zug, Switzerland.
Advisors' Opinion:- [By Dan Caplinger]
Seadrill has done an excellent job of taking advantage of a huge boom in deepwater drilling activity. With the number of new finds below 4,000 feet of water in 2012 crushing the old record by 40%, there's been more than enough business for the entire industry. Rival Transocean (NYSE: RIG ) has managed to increase its backlog of business to $28.5 billion as of April, while Seadrill's latest total stood at $21 billion. That backlog has given Seadrill the flexibility to embark on a massive building project, seeking to extend its reach with nearly two dozen rigs under construction, including seven ultra-deepwater drillships. With dayrates climbing above the $600,000 mark, those new ships should help expand profits once they come on line for Seadrill.
- [By John Dobosz]
That's what happened recently with Switzerland-based Transocean (RIG), the world's largest offshore contract driller for oil and gas wells.
There's a lot to like about Transocean these days. Last month, it struck a deal with Carl Icahn, who owns nearly 6% of the company, and was agitating for a number of changes.
- [By Ben Levisohn]
Transocean (RIG) was supposed to release its financial results yesterday after the close. Instead, it delayed the release until Nov. 10 after taking nearly $2.8 billion in charges.
Kommersant via Getty ImagesCanaccord Genuity’s Alex Brooks and Richard Griffith have the details on Transocean’s writedown:
Transocean has delayed its 3Q results due to the ��omplexities involved��in determining $2.76bn in impairments, of which $1.97bn is a writedown of goodwill due to a decline in ��arket value�� and $0.79bn in the Deepwater Rig asset group due to drops in day-rates and utilisation…
There are 12 rigs in the Deepwater Rig group, all benign environment, 4G and 5G units, of which three are already idle without any future contracts. Three are fully booked through 2015, but the remaining six look likely to go idle for much of 2015, even if two have options. Given that these options are at rates of $370k and $420k, and prevailing day-rates for this category of unit are below $350k, we do not expect the options to be exercised. Our understanding of a writedown is that it implies profit generation will be less than the cost of capital; we already expect the group to be generating EBITDA losses from 2016E and therefore our best guess is that the fair value of this fleet is the PV of its contracts, which we estimate at $590m.
Perhaps surprisingly, Brooks and Griffith left their price target on Transocean unchanged at $20. They explain why:
Clearly in themselves the writedowns have only a small impact on numbers: these are entirely non-cash charges. However, they indicate that even within Transocean, projections for earnings are poor…
When the 3Q numbers are available, we expect EBITDA of $783m down 22% y/y and EPS of $0.80 down 53% y/y, largely because of the decrease in active rig-days in the period (down 9% y/y) and the consequent increase in non-operating costs as guided on the 2Q call. We have n
Top 5 Penny Companies To Invest In 2014: Nuveen Preferred and Convertible Income Fund (JPC)
Nuveen Multi-Strategy Income & Growth Fund is a close-ended balanced mutual fund launched by Nuveen Investments Inc. The fund is co-managed by Nuveen Asset Management, Spectrum Asset Management, Tradewinds Global Investors, LLC, and Symphony Asset Management, LLC. It invests in the public equity and fixed income markets of the United States. The fund seeks to invest in the stocks of companies operating across diversified sectors. For the fixed income portfolio, it invests in the debt instruments, including high yield debt and senior loans. The fund benchmarks the performance of its portfolio against the Merrill Lynch Preferred Stock Hybrid Securities Index, Lehman Tier 1 Capital Securities Index, Merrill Lynch All U.S. Convertibles Index, and CSFB High Yield index. It was formerly known as Nuveen Preferred and Convertible Income Fund. Nuveen Multi-Strategy Income & Growth Fund was formed on March 26, 2003 and is domiciled in the United States.
Advisors' Opinion:- [By Douglas A. McIntyre]
J.C. Penney (NYSE: JPC) and the KMart and Sears divisions of Sears Holdings (NASDAQ: SHLD) are supposes to be the losers among large U.S. retailers. Their stores are too old, their brands too badly damaged, and their balance sheet too frail for either to do well in the white hot competition for holiday sales. However, their stock prices say otherwise, which means there is some expectation that they will outperform forecasts.
Top 5 Penny Companies To Invest In 2014: Crown Media Holdings Inc.(CRWN)
Crown Media Holdings, Inc., through its subsidiary, Crown Media United States, LLC, owns, operates, and distributes pay television networks for adults and families primarily in the United States. The company operates and distributes Hallmark Channel network to approximately 87 million subscribers through approximately 5,369 cable, satellite, and other pay television distribution systems; and Hallmark Movie Channel network to approximately 45 million subscribers through approximately 2,680 cable, satellite, and other pay television distribution systems. Its networks offers a range of entertainment programming, including television series, movies, miniseries, theatricals, romances, literary classics, and contemporary stories. The company was founded in 1999 and is headquartered in Studio City, California.
Advisors' Opinion:- [By Equities Lab]
The stocks that currently pass the stock screen in order of market cap are Frontier Communications Corp , Crown Media Holdings (CRWN), Vonage Holding (VG), MCG Capital Corp (MCGC), 1-800-FLOWERS.COM (FLWS), MTR Gaming Corporation (MNTG), Alaska Communications (ALSK), and Enzon Pharmaceuticals (ENZN).
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