Stocks and Dollars

By Benjamin Koellmann:

Despite another blowout quarter reported by Apple (AAPL) on January 24, it seems Apple naysayers still find reasons to make you doubt about investing in the company’s stock. Some of these critics doubt Apple’s ability to sufficiently reinvent itself and/or to retain its status as the market leader in smart phones and tablets. Others ignore the underlying growth in earnings and believe that a stock that has esentially quadrupled over the past three years and is now trading at $450 with a $400bn-plus market cap must inherently be overvalued. Others again try to foreshadow Apple’s doom, underlining concepts such as the “law of large numbers” or the fact that the company isn’t worth much without its iconic founder, Steve Jobs.

I could write an entire article about why I think the above statements are wrong and frankly don’t make much sense. However, instead of writing the 12,357th article this month

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By Benjamin Koellmann:

Despite another blowout quarter reported by Apple (AAPL) on January 24, it seems Apple naysayers still find reasons to make you doubt about investing in the company’s stock. Some of these critics doubt Apple’s ability to sufficiently reinvent itself and/or to retain its status as the market leader in smart phones and tablets. Others ignore the underlying growth in earnings and believe that a stock that has esentially quadrupled over the past three years and is now trading at $450 with a $400bn-plus market cap must inherently be overvalued. Others again try to foreshadow Apple’s doom, underlining concepts such as the “law of large numbers” or the fact that the company isn’t worth much without its iconic founder, Steve Jobs.

I could write an entire article about why I think the above statements are wrong and frankly don’t make much sense. However, instead of writing the 12,357th article this month

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By Conrad Schickedanz:

There has been a lot said recently about Best Buy (BBY) facing increasing competition from retail giants like Wal-mart (WMT) and Amazon (AMZN).

However, Best Buy has arguably a bigger enemy than its fierce rivals: the technology it sells. Here is a break down of Best Buy’s sources of domestic revenues by segment from its month ended December 31, 2011, and the quarter ended November 26, 2011:

‘Computing and Mobile Phones’ was the highest ranking segment at the end of last quarter. Unfortunately for Best Buy, smart phones and tablets offer apps that make many of the consumer electronics it sells unnecessary for many consumers. Examples include cameras, camcorders, GPS systems, and

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Seeking Alpha recently held an interview with Ford (F) CEO Alan Mulally, who joined the automotive giant in 2006 and has since overseen a turnaround that brought a net profit of $20.2B last year. Below is a transcript of the interview.

In its 2011 results, which Ford released a few days prior to our interview, the firm reported that pretax operating profit rose 6% to $8.8B while revenue increased 13% to $136.3B.

In addition to Seeking Alpha editors Yigal Grayeff and Yosef Levenstein, SA contributors Brian Nichols and Mark Bern participated in the interview.

Before we spoke to Mr. Mulally, we asked Seeking Alpha readers to send in questions that we could put to him. We’d like to thank you for the excellent response we received; we were unable to use all of the questions submitted, but for the ones we did use we have provided attribution as appropriate.

The

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By Stock Croc:

Chinese Internet search giant Baidu (BIDU) continues to enthrall investors with its dominant position in the world’s most populated country and the globe’s number two economy by size. Visions of an Asian Google (GOOG) dance in their heads and the thought of the onrushing growth of the Sino colossus. But with a recent share price near $130 placing it in the mid-point of its 52-week trading range of $100.95-$165.96, is Baidu a buy right now? I analyzed its fundamentals to see if it should be added to a portfolio.

First, looking at its basic numbers, the company has a current market capitalization of $45.6 billion. Earnings per share for the trailing twelve months stands at $2.60, which calculates out to a heady price earnings ratio of 50.4. Other numbers are also extremely pricey, with price to sales at a blood-curdling 82.4, price to tangible book at 29.7, and price to

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By Ploutos:

Over a long time horizon, BB-rated corporate bonds have outperformed their lower rated counterparts on an absolute return basis due to their lower default rates. An asset subsector providing higher absolute returns for lower variability of returns presents long-term investors the chance to generate alpha in the higher quality segment of the high yield universe. Below are annual total returns of the Barclays Capital U.S. High Yield index subdivided by ratings strata.

Examining loss rates by ratings category over a matched time horizon illustrates why BB-rated bonds have outperformed – investors have experienced much lower defaults historically on BB-rated bonds.

Examining the lowest ratings cohort in the bottom of the investment grade universe (BAA) versus the highest ratings cohort in the top of the speculative grade universe (BA) demonstrates that the increase in credit losses moving down in relative credit quality from Baa bonds to Ba bonds is minimal historically.

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By Tyler Laundon:

Public Cartel: In the public cartel a government is involved to enforce the cartel agreement, and the government’s sovereignty shields such cartels from legal actions. – Wikipedia

Quietly, CEOs of large-cap, dividend-paying companies have become the most powerful people in the world.

All because right now large-cap, dividend-paying companies – and their stocks – are the most sought after asset class in the market.

Their quiet rise to fiefdom has been largely aided by the Federal Open Market Committee (FOMC), and its low interest rate policies.

Last week’s announcement by the Fed that it “currently anticipates that economic conditions… are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014″ has only helped fuel investor demand for large-cap, dividend-paying stocks.

No longer do investors seem to care what business these companies are in, as long as they pay dividends.

And as long as their

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By Stock Croc:

A stock screen for high yield stocks will show Frontier Communications (FTR) at the top of the list. At the current time, this stock sports a 17.5% annual yield. This reported yield is not due to a one-time or variable payout. The Frontier Communications management has committed to paying the 75 cents annual payout. Outside of the mortgage REIT sector, there are very few stocks sporting a double-digit yield. A year ago, shares of FTR were worth twice as much, making the dividend yield half as high. What should income investors read into the falling share price?

A little history

Frontier provides telecommunications services such as telephone, high speed Internet and digital/satellite TV services in about half the states, primarily to small communities and rural areas. In May 2009, Frontier Communications reached an agreement to purchase the rural communications services and assets belonging to Verizon Communications (VZ) in 14 states.

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