Stocks and Dollars

By David Van Knapp:

Dividend growth investors come in all shapes and sizes. Some invest for total return, others are interested exclusively in the dividends, and many have their eyes on both. Some have a relatively short time frame (say 10-20 years), while others are looking for success over much longer time spans. An investor beginning in her 20s may think of her time frame as 70 years or more. Some want “high yield,” but they define that in different ways. Some care more about the rate of the dividend’s growth than they do about its yield. Some are interested in low payout ratios, but then debate about whether the ratio should be computed as a portion of earnings, cash flow, or free cash flow; others pay relatively little attention to the payout ratio.

Is there anything that practically all dividend growth investors agree about? I think that there is. Here is my list

Complete Story »

By Mark Anthony:

There is a big controversy in shale well natural gas production.

The supporters say that shale gas brings a cheap and abundant new energy source to America’s economy; Opponents say shale gas production is non-economical, as the wells deplete quickly, and the ultimate production volumes are far below original estimates; Environmentalists claim that hydraulic fracturing, called “fracking”, causes water pollution.

Aubrey K. McClendon, CEO of Chesapeake Energy (CHK), is one of best-known proponents. Texas geologist Arthur Berman is one of the most outspoken critics of the shale gas revolution.

The controversy is important to not just to the US natural gas sector, but to the coal sector as well. James River Coal Company (JRCC) CEO mentioned shale gas declines in last week’s earnings conference even though they produce no shale gas. Is shale gas abundant and cheap to produce? If it is, coal demand is threatened, as cheap and clean-burn

Complete Story »

By Benjamin Mackovak:

Contrarian investors live for the moments when the Wall Street herd becomes homogeneously euphoric or pessimistic. With everyone betting on the same outcome, the market prices these situations for perfection with no “margin of safety” should the dominant view prove to be incorrect. It is precisely these situations that provide incredibly attractive risk/reward opportunities for the independent thinker that can predict when the herd is wrong.

Diamond Foods (DMND) is a stock that has gone through a rough patch; however, the underlying business continues to be attractive and growing despite the extreme level of pessimism displayed in the stock market. Looking at the price chart you would think Diamond was selling “Herman Cain In 2012″ t-shirts, when in reality its brands continue to register strong growth and take market share. Diamond provided a business update in March that showed all of its brands growing year over year, with Emerald registering

Complete Story »

By Mark Anthony:

There is a big controversy in shale well natural gas production.

The supporters say that shale gas brings a cheap and abundant new energy source to America’s economy; Opponents say shale gas production is non-economical, as the wells deplete quickly, and the ultimate production volumes are far below original estimates; Environmentalists claim that hydraulic fracturing, called “fracking”, causes water pollution.

Aubrey K. McClendon, CEO of Chesapeake Energy (CHK), is one of best-known proponents. Texas geologist Arthur Berman is one of the most outspoken critics of the shale gas revolution.

The controversy is important to not just to the US natural gas sector, but to the coal sector as well. James River Coal Company (JRCC) CEO mentioned shale gas declines in last week’s earnings conference even though they produce no shale gas. Is shale gas abundant and cheap to produce? If it is, coal demand is threatened, as cheap and clean-burn

Complete Story »

- By Aryeh Katz:

Obesity is fast becoming America’s number one healthcare issue, eating up an increasingly gluttonous percentage of both the Medicare and Medicaid pie. Americans of every age, socio-economic and ethnic background suffer from the malady. Between 1987 and 2002 the number of obese Medicare recipients doubled and the cost of their treatment almost tripled.

(click to enlarge)

Recognizing just how dire the situation has become, legislators decided last November to pass a measure that would give free screening and intensive behavioral counseling for obesity, a move that Washington expects will soon be copied by private insurers.

Research conducted by the Center for Disease Control (CDC) shows that states are currently spending as much as $75 billion on obesity related expenditures every year. In 2002 the CDC figured those costs at $93 billion when both overweight and obese individuals were tallied together. Note, too, that health care costs for overweight and obese

Complete Story »

- By Josh Krause:

Has SODA Gone Flat?

On Wednesday, May 2, Green Mountain Coffee Roasters (GMCR) disappointed the markets with first quarter earnings [see transcript] that saw a decrease in growth and its stock got punished severely. At the same time we saw SodaStream (SODA) get a hefty chunk taken out of it on no significant news.

Is the market correct in thinking that SODA will suffer the same fate as GMCR on Wednesday, May 9, when first quarter earnings are reported before the market opens?

Company Basics

SODA manufactures and sells home carbonation devices on a roughly razor-blade model popularized by Gillette and Green Mountain Coffee Roasters. Carbonation machines are sold at near cost with higher margin carbonation refills and flavored syrups providing continued revenue from the installed base.

The brand is a lot older than many in the US might realize. Originally operated as a subsidiary of W & A Gilbey,

Complete Story »

By E Hunter:

In evaluating potential investments, I often give consideration to how the company will perform during a recession. As economic output falls, consumers grow skeptical about future prospects and limit their spending. This can be harmful in industries that rely on discretionary spending, sectors such as technology and entertainment. This has less of an effect on consumer staples, and in particular the companies that bring those products to market.

For instance– food is a consumer staple, a consumer may choose to restrict the amount of times they eat out in a month, however the amount of food consumed remains static and still needs to be brought to the consumers. Consumers have little power in reducing their electricity consumption; coal still needs to be provided to power plants. A consumer may be less likely to upgrade their vehicle in recessionary times. Regardless, their gasoline consumption remains little changed, and the oil that

Complete Story »

By Doug K. Le Du:

We learned during the Global Credit Crisis that agency ratings were imperfect for a variety of reasons. Shortcomings of both mathematics and character led to grossly incorrect ratings in too many cases.

But historically, short of such crisis conditions, agency ratings of securities have served millions of investors all over the globe very well for many decades. And as imperfect as these ratings are, the fact is that most investors have little choice but to use such ratings as a proxy for investment risk– even though what the investor wants to know and what the rating is measuring are, at least to a certain extent, two different things.

Investors are usually trying to determine the likelihood of a bankruptcy of the company they are considering investing in while rating agencies are trying to quantify creditworthiness. To most investors, these are two views of the same scenery. Where agency ratings come

Complete Story »