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Three Garbage Stocks

Three Garbage Stocks

The market goes up everyday… This two-year chart represents the thirty varsity players on the U.S. economic court. You might look at this 100% gain in two years and think that this bull market is overdue for a correction. But don’t worry. Uncle Ben, our fair Chairman over at the United States Federal Reserve, has it all in hand. This is not the time to fret over debt, inflation, taxes, or unemployment… Don’t fight the Fed This market is simple. The Fed is pumping liquidity into the market at an unprecedented rate. There is an old Wall Street platitude that says “Don’t Fight the Fed.” It means you buy stocks when interest rates are dropping and sell when they are going up. The current Fed fund rate is at 0.25%. It can’t get much lower, and no one expects them to hike rates in the near future. What are you waiting for… zero percent? People heed the Bernanke It looks like folks just like you and me are putting the hard times behind them… The adjusted retail numbers for December showed $380.9 billion in sales, an increase of 0.6 percent from the previous month, and 7.9 percent above December 2009. Total sales for 2010 were up 6.6 percent. For the fourth quarter, they were up 7.8 percent. Car sales jumped 14.7 percent over last year. For non-store retailers like Amazon, sales jumped 15 percent. The unofficial numbers for January show a 4.1 percent gain from a year ago. This is great stuff. Amazon investors liked it so much that the company now trades at twice the price it did during the dot-com bubble in 1999. Amazing. ~~SIGNUP_WD~~ The screen It’s a good idea to screen for stocks at least once a week. I generally screen for low P/E, small market capitalization, and good dividend. From there, I go through the list and look for red flags and growth potential. I like the companies that are under $250 million in market value, with high future growth and fat margins. I also look at debt ratios. I call these “garbage stocks” because they ain’t for widows and orphans, but they tend to run under the right circumstances. Today, three companies in the retail sector popped up on my screen. All three shared my garbage stock credentials. And they have something else in common: They cater to the petite bourgeois. They are Books-A-Million (NASDAQ: BAMM), Collectors Universe (NASDAQ: CLCT), and CPI Corp. (NYSE: CPY). The merchant of Wal-Mart All of these companies sell products to the middle class, but none of their products are necessities… Books-A-Million runs 223 discount bookstores in the Southeastern United States. Collectors Universe provides third-party authentication, grading, and related services for rare collectibles like coins, trading cards, and sports memorabilia. CPI runs Wal-Mart Portrait Studios and PictureMe Portrait Studios. BAMM has a market cap of $92 million and a trailing P/E of 6.62. The company had a negative revenue growth of 5.5% year over year, but it does pay a fat 5.2% dividend. (They could also be a beneficiary of Barnes and Noble going bankrupt.) CLCT has a market cap of $109.34 million, a P/E of 6.6, gross margins of 60%, quarterly revenue growth of 8%, and a dividend yield of 9%. CPY has a market cap of $152 million, a P/E of 8.06, 8% margins, a flat quarterly revenue growth, and a 5.10% dividend yield. …

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Noble Finds Oil in Israel – Analyst Blog

Filed in BP, Gold Investing, noble, o by on December 30, 2010 0 Comments

Noble Energy announced that it has made a natural gas discovery in the Leviathan field offshore Israel.

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Dividend Stock Leaders for the Week of Dec.6-10 (GE, BEC, COF, WLT, NSM, more)

Filed in Buenaventura, dividend, Gold Investment, noble, o by on December 11, 2010 0 Comments

Here are some of the biggest dividend stock winners and losers from the week that just ended. Company Fri. Close Weekly % Change Dividend Yield Arbitron Inc. ( ARB ) $38.47 +26.09% 1.04% Beckman Coulter Inc. ( BEC ) $72.08 +23.26% 1.00% Barnes & Noble Inc. ( BKS ) $15.08 +13.55% 6.63% Strayer Education Inc. ( STRA ) $154.07 +12.65% 2.60% Metlife Inc. ( MET ) $43.97 +9.54% 1.68% Capital One Financial Corporation ( COF ) $42.21 +8.90% 0.47% Walter Industries Inc. ( WLT ) $117.24 +6.08% 0.43% General Electric Company ( GE ) $17.72 +5.60% 3.16% 3M Company ( MMM ) $84.32 -3.01% 2.49% Compania Buenaventura S.A. ( BVN ) $49.98 -6.00% 1.20% National Semiconductor Corporation ( NSM ) $13.81 -6.50% 2.90% Men’s Wearhouse Inc. ( MW ) $24.88 -13.28% 1.45% Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Google’s Endless Ambition

Google’s Endless Ambition

It’s an exciting time for Google investors. Over the last few years, the company has positioned itself brilliantly. And it’s starting to pay off. Not only did they maintain their massive lead in search, they managed to grow it. And management made shrewd investments in other key areas. For example, in 2005 Google bought a little startup named Android. In 2005, most of us didn’t realize how quickly the smartphone market would take off. Google did, apparently. They moved into the space at just the right time. Google’s latest branded phone, the Nexus S Here we are five years later, and Google’s early investments are paying off in spades. Every day, 200,000 new Android devices are activated worldwide. Units sold rose 1373% in Q3, compared with the same period a year ago. That’s 20 million units sold last quarter, versus 1.4 million in Q3 of 2009. That is simply explosive growth. Dozens more Google-powered gadgets are in the pipeline at big manufacturers like Motorla, HTC, and LG; smart phones, e-readers, and tablets. They also just announced the Nexus S — their second Google-branded smart phone — a follow-up to the mediocre Nexus One . The new phone is the product of a partnership with Samsung. It does some unique tricks, like 3d graphics and some Nintendo Wii-like sensor functions. It’s slick-looking too, vastly more polished than its predecessor. Having a slick product is critical, as Apple has taught us. Tech retail isn’t easy, but Google is learning fast. PC World has a nice writeup on how the Nexus S stacks up against the iPhone 4 here . The S will be sold directly by Google, as opposed to most Android-powered phones, which are marketed independently. Best Buy secured the exclusive deal to sell the phone. I expect it to do well, especially with all the recent attention Android’s been getting. Google stands to make money from each Android-powered device sold by partners, as well. What’s that you ask? If Android is open source (free), how will they make money off it? Good question. Mobile ads, for one. Smartphone ad revenue will top $1 billion this year, and is growing at an incredible pace. With their dominant Adwords search platform, and their recent acquisition Admob, a leader in mobiles ads, Google was already set to dominate this market. Android’s success expands their reach in the space even further. Their apps marketplace will be another revenue driver. Apple has been making a killing selling apps and games for years, and Google is finally catching up. Android will drive revenue in other ways, too. But Google isn’t getting greedy, they’re focused on grabbing the most market share possible. Smartphones are still a young market, hard as that is to believe. Android could be a significant growth driver for decades to come. Getting the lead early, and keeping it, will be critical. Don’t think they forgot…

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Ultra-Deepwater Rigs are Back

Ultra-Deepwater Rigs are Back

Ben Bernanke, head of the Federal Reserve, went on 60 Minutes over the weekend and talked about a third round of quantitative easing (QE3). I’m of the opinion that you can’t spend your way out of a debt crisis, but Ben believes in “priming the pump” by spending — or loaning to banks, anyway. And by banks, we mean the massive trading companies that got us into this mess to begin with. Bernanke thinks that by giving money to banks so that they can loan it will spur small business growth and other spending… The problem is that money is like your ex-girlfriend; it goes where it is treated best. And right now, the market believes that the commodity super-cycle spurred by emerging market demand and inflationary fears will continue to push higher. Unintended consequences As I write this, oil is running just shy of $90 a 26-month high. Gold popped up to $1,424 — a near record. Silver is at a 30-year high. According to the Associated Press , Bernanke said he hopes the Fed’s bond buying will lower bond yields and encourage investment in stocks, boosting business activity and economic growth in the country. But what is happening is that — at a time when we need inexpensive commodities to lower costs — we have record prices in coal and gasoline will average more than $3.00 a gallon by Christmas. If you remember the sharp rise in commodity prices (most notably oil to $147 a barrel) crushed the U.S. economy back in 2008. The low price of oil ($33bbl) coincided with the bottom in March of 2009. (Oil is black, SP500 is gold in the chart below): The shakeout in commodities also took out a host of highly-leveraged hedge funds as they got crushed with margin calls. The New York Times reported in March 2009 that more than 200 hedge funds went under with losses of $84 billion. In December 2008, I recommended buying four gold companies that were trading at less than cash at the time. This was back when gold miners were sold off to a negative market value during a severe economic crisis, and when the gold price was moving up as a safe haven. That is the power of speculators in the commodities market. And right now, the speculators are being fed free money from Ben…

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Borders to Buy Barnes & Noble? Bill Ackman Willing to Finance Cash Deal (BKS, BGP)

Filed in dividend, Gold, noble, o, shares by on December 6, 2010 0 Comments

Book retailer Barnes & Noble, Inc. ( BKS ) on Monday saw its shares soar in premarket trading following the news that Bill Ackman’s Pershing Square Capital hedge fund is willing to finance a $16 per-share cash bid for the company from rival Borders Group ( BGP ). That $16 bid would represent a 20% premium to BKS’ Friday closing price of $13.28. Ackman also noted he would finance a cash/stock combination offer for BKS from BGP, should both parties prefer to go that route. Barnes & Noble shares soared $2.27, or +17%, in premarket trading Monday. The Bottom Line We have been avoiding shares of BKS since our early June 2008 coverage began, when the stock was trading at $27.31. The company has an unsustainable 7.53% dividend yield, based on Friday’s closing stock price of $13.28. The stock has technical support in the $12-$14 price area. If the shares can firm up, we see overhead resistance around the $17 price level. We would remain on the sidelines for now. Barnes & Noble, Inc. ( BKS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Is the Collapsing Empire and Its Police State Worth Fighting For?

Filed in BP, Debt, deflation, lead, noble, o, US Dollar by on December 1, 2010 0 Comments

In 43 BC, over 2,000 years ago, warring consuls Antony, Lepidus, and Octavian were duking it out with each other over control of Rome following Julius Caesar’s assassination the prior March. Each had legions at his disposal, and Rome’s terrified Senate sat on its hands waiting for the outcome. Ultimately, the three men chose to unite their powers and rule Rome together in what became known as the Second Triumvirate. This body was established by a law named Lex Titia on this date (give or take depending on how you convert the Roman calendar) in 43 BC. The foundation of the Second Triumvirate is of tremendous historical importance: As the group wielded dictatorial powers, it represents the final nail in the coffin in Rome’s transition from republic to malignant autocracy. The Second Triumvirate expired after 10 years, upon which Octavian waged war on his partners once again, resulting in Mark Antony’s famed suicide with Cleopatra in 31 BC. Octavian was eventually rewarded with rich title and nearly supreme power, and he is generally regarded as Rome’s first emperor. Things only got worse from there. Tiberius, Octavian’s successor, was a paranoid deviant with a lust for executions. He spent the last decade of his reign completely detached from …

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Barnes & Noble Posts Worse Q2 Loss; Guidance Falls Well Short of View (BKS)

Filed in dividend, earnings, Gold Investment, Guidance, noble, o, revenue, shares by on November 30, 2010 0 Comments

Book seller Barnes & Noble, Inc. ( BKS ) on Tuesday posted much worse-than-expected second quarter earnings results, and its guidance also badly missed analyst estimates. The New York-based company reported a fiscal second quarter net loss of 22 cents per share, compared with the average Wall Street analyst estimate for an 8 cent per-share loss. Revenue for the quarter was $1.91 billion, which also missed the consensus estimate of $1.98 billion. The company noted that comparable-store sales were down 3.3% from last year, but Barnes & Noble.com comps jumped 59%. Looking ahead, the company forecast third quarter earnings to range from 90 cents to $1.20 per share, which will fall well short of current analyst estimates for $1.29 per share. For the full year, BKS estimated a net loss of 75 cents to $1.15 per share, while analysts expect a much smaller loss of 40 cents. Barnes & Noble shares plunged 62 cents, or -4.2%, in premarket trading Tuesday. The Bottom Line We have been avoiding shares of BKS since our early June 2008 coverage began, when the stock was trading at $27.31. The company has an unsustainable 6.72% dividend yield, based on last night’s closing stock price of $14.87. The stock has

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Market Wrap-Up for Nov.26 (FCX, MA, SPG, AEM, NEM, more)

Filed in dividend, earnings, euro, freeport mcmoran, Gold, Gold Investment, lead, noble, o, updates by on November 26, 2010 0 Comments

The markets got off to a shaky start this morning as overseas markets were in worry mode about the tensions in the Korean peninsula, as well as the lingering economic concerns surrounding Ireland and possibly other European countries. The trading in the day after Thanksgiving is almost always on the light side as the equity markets closed early (1:00pm Est.). This was always a day I did very little on, but was a great day going through my accounts to make sure my positions were what I expected, and that I had not inadvertently made any transaction errors over the course of time. It happens to the best of investors, so be sure to double-check all your transactions every so often. Some of the names that pushed us lower today were Freeport McMoran ( FCX ), Mastercard ( MA ), PetroChina ( PTR ), and Simon Property Group ( SPG ). Gold-mining plays also lagged, with Agnico-Eagle Mines ( AEM ), and Newmont Mining ( NEM ) both lower. Del Monte Foods ( DLM ) bucked the early drop on news the company is going to be acquired. Private equity firms are continuing to make their moves. They will look geniuses if the equity markets hold up well, as the usual plan is to unlock hidden values and streamline operations in order to get the company ready for either a sale or IPO in due time. Looking ahead to next week, earnings will be extremely light, with notables such as Barnes & Noble ( BKS ) and Kroger ( KR ) coming out with earnings results. Be sure to catch up with our latest watchlist updates this weekend on Dividend.com Premium, and as always, you can view our current recommendations on our industry-leading Best Dividend Stocks List. Have a great weekend everybody, and thanks for reading! Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Noble (NYSE:NE) Should Outperform Peers in Short Term Says FBR

Filed in FBR Capital, Gold Bullion prices, noble, o, outperform, price-target by on November 24, 2010 0 Comments

Based on the narrowing of bifurcation rates, FBR said they see Noble Corporation (NYSE:NE) outperforming their peers over the next month or so. FBR said, “We are adding NE to FBR Top Picks, replacing FMC Technologies (NYSE:FTI). We expect the stock to outperform its peers in the next several weeks, based on our expectation for the bifurcation of rates to narrow as the jackup market builds

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