Archive for September, 2004

Any oil stocks left?

Wednesday, September 29th, 2004

If you didn’t buy oil stocks a while back, you may be thinking that the industry is too overvalued to get in now. While the industry is overvalued, Dan Gallagher at CBS MarketWatch argues that there are some reasonably priced oil stocks left. These include large caps like Royal Dutch/Shell Group’s component stocks, BP, and ChevronTexaco. Then there are independent refiners like Devon Energy Corp., Anadarko Petroleum Corp., Apache Corp., and Burlington Resources Inc.

I should note that these stocks are considered by the author to be reasonable compared to the other stocks in the oil sector, but they are not touted as bargains compared to other sectors.

Money Mangers bullish

Wednesday, September 29th, 2004

I recently wrote about how Simon Brewer feels US stocks are overvalued, but it certainly seems that he is in a minority. A new Russel Survey reveals that most money magers feel US stocks are fairly valued and many feel they are undervalued. However there are declines in attitudes toward growth stocks and certain sectors:

Health care remained the most favored sector, with net bullish sentiment at 47%. However, this sentiment declined quarter-on-quarter by 24%. Similarly, net bullish sentiment declined in other growth sectors such as technology (declined 28%) and consumer discretionary (declined 21%).

Interest-sensitive sectors saw an improvement in sentiment: the quarter-on-quarter net bullish outlook for financial services improved by 41% and utilities improved by 33%.

Also worth noting is that large caps are viewed more positively than small caps (some fear small caps are overvalued).

US deficit to worsen, G7 oil focus boost yen

Wednesday, September 29th, 2004

In this Bloomberg article on Japanese stocks and currency, there’s some interesting information on how the dollar comes into play:

`Although past depreciation of the dollar is still helping to some degree, as the economy grows at a faster rate the deficit will probably tend to worsen….He’s the second Fed official this month to make such a prediction. The Fed doesn’t set dollar policy, which is managed by the Treasury….San Francisco Fed President Janet Yellen said the current-account gap will expand should the U.S. currency stay near present levels.

Another thing helping the Yen is that the G7 will be looking for ways to reduce oil prices:

“The G-7 will focus on higher oil prices and what to do about global growth, and that benefits the yen,” said Meg Browne, a currency strategist at HSBC Bank USA in New York.

Where to put your money

Tuesday, September 21st, 2004

Simon Brewer, Chief Investment Officer of Morgan Stanley, likes oil, gold, and Asian equities better than US equities and the dollar. Gold is a good hedge against possible declines in US stocks and currency; the US has too much debt, poor demographics, and is overvalued.

He likes oil because of increasing demand in India and China. He likes Asian stocks because the valuations and demographics are better than in the US.

MLS

Sunday, September 12th, 2004

In June I wrote about a stock screener that turned up MLS. THE MILLS CP has been relatively good to me considering how volatile the market has been. Currently at 50.99, the dividend is down to 4.67% which isn’t especially good for a REIT. I’m considering getting out.

MCGC recovering

Sunday, September 12th, 2004

When I wrote about MCGC on April 28, the stock was down to 16.20 on unimpressive earnings. Things have been solid enough to maintain a hefty dividend though, and now the stock is up to 17.95.

I still like MCGC. According to Yahoo’s quote, PE is 15.28, PEG is 1.28, and dividend yield is 9.39%. If you like the financial services industry, and their management, you gotta like those numbers.

Huge Gainers

Friday, September 10th, 2004

A couple of stocks I have been watching but have not invested in had huge gains. Salton Inc. (SFP) and Microwave Filter Co Inc (MFCO) are both up over 20%. Salton plans on restructuring, but that was announced Monday and earnings were hardly spectacular. I/m still looking for news on MFCO which sells electronic filters for radio and microwave frequencies. They used to offer a nice dividend, but no longer. There’s a new director, but can one man account for this jump?

IMH, diversity, & mortgage industry

Tuesday, September 7th, 2004

When I wrote about IMH in April, the stock was under 20.00/share. Last time I wrote about IMH and dividends for choppy markets, it was priced in the low 20s. We’re looking at a bit over 26.00/share now. A look at the chart comparing IMH to the S&P shows that IMH does not follw the broader market. This makes it a nice holding for people who want to diversify. The staeady dividends have been nice too. Currently at 3.00/share we’re looking at better than 11% dividend yield.

Since IMH deals with mortgages, it’s important to note that rates have fallen to the lowest they’ve been in 5 years. It’s ahrd to say exactly what this means for IMH. On the one hand lower rates might signal lower profit margins, but if people are encouraged to refinance their homes there’s an opportunity for increased business. Analysing the mortgage industry is out of my league, so (as always) do your own research before investing in any of the stocks I write about.

Oil Prices key

Saturday, September 4th, 2004

This article about slowing corporate profits, notes that energy costs are key in determining how fast the US economy will grow. Reuters estimates 13% for the July-September quarter.

The slowing rate of economic growth is still considered “respectable” and “not worrisome”. Despite this, I wouldn’t be surprised to see very choppy markets as their are likely to be more warnings and we’ve already heard from Intel, Tyson, Novellus, and Krispy Kreme.

Uninspiring economic growth means Intel profit Warning hurts

Saturday, September 4th, 2004

This AP article notes that jobs data is not too impressive:

Investors were satisfied with — but not impressed by — the Labor Department’s latest reading on unemployment, which fell to 5.4 percent from 5.5 percent in July, and the 144,000 jobs created in August was close to the 150,000 Wall Street expected.

“I think this continues the pattern of decent economic growth,” said Ken Tower, chief market strategist for Schwab’s CyberTrader. “It’s not lighting a fire under anyone, nor is it suggesting the economy is on the edge of a serious contraction.

With no strong economic data, the Intel news is weighing the markets down.