Friday, July 29, 2011

Trash is treasure ($WM)

Recently, I have been very weary of my longs in Frontier Communications ($FTR). I have watched my holdings in this richly paying dividend telecom chip away since their very bleak earnings report in February. When it came out, I tried to remain confident and wait for the rebound, but I knew it just wasn't there; expenses were going up and revenues were going down.

 As we continue to be uncertain about what is bound to happen with our economy, (GDP revision was ugly this morning) one sector that looked attractive to me was Waste Management ($WM). "The Company is a provider of waste management services in North America. Its subsidiaries provide collection, transfer, recycling and disposal services. The Company is also a developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the United States". Basically, even if we have to go through rough times, people will still be creating trash that will need to be picked up, and recyclables that will need to be refined. Operating revenues from Recycling, Collection, Landfill were all up from Q1. Dividend yield is 4.25%, above the S&P average and greater than that of US Treasurers. P/E ratio of 16 tells me the company is still a value play. WM continues to sell off from its big down day yesterday, I will continue today to look through its report, set aside all of the “transitory” (lol) bad news and focus on growth strategies. Have a good weekend everyone. 

Above: chart of WM, w/ upper, lower b bands and SMA, notice drop off yesterday and continued weakness today

Tuesday, July 26, 2011

Kelley School visit/Debt and the markets

I'm having a great time on vacation out here in Bloomington, saw all the family and going back home early tomorrow morning. I visited IU Kelley school of business this morning, met up with associate director of admissions and I have to say that it is a great school. They were very helpful with all of my questions, and seemed impressed with what I have done so far. It is not definite yet, but a strong possibility after I'm done with my four years at St. Bonaventure University.

With this being my last time out here, I still can't believe it; 20 years has flew that quickly, I got to know more about my dad, his childhood, brothers and sisters than I have ever known before, I will truly miss it.

Market report: Alright where do I start? First we had America's finest Obama on last night telling us the same BS we already knew for the last idk how long, 25 minutes of my life I'll never get back. Our congressional "leaders" love that can kicking strategy and sadly it will probably work. We will get down to the last day or hour therefore possibly, then agree to another short-term deal. We will probably continue to live on the edge like this until we get real people to run our country.

Earnings front: 3M was a shocker to me, I didn't really expect a big down move like that, no positions
Amazon, I'm cautious on, as to how this internet "giant" creates 9.9B rev then only nets 100M? still have common, holding for now. The big tech names continue to deliver the good news, I'd like them and be more bullish with lower unemployment rate.

Sunday, July 24, 2011

Out on vacation/Limit down open?

Well couldn't post yesterday, was driving basically all day and saw some family. I only come out to Indiana one time a year for 4-5 days so we are generally very busy hopping from Indy to Bloomington visiting family. Washington appears to be playing one of the best games of chicken I've seen since 1995, though this is definately worse than back then. We are trillions more in debt, Republicans and Democrats need a plan now to act on. They were elected to run our country by the people and if they can't handle big issues such as this, maybe they shouldn't be in office. As of this morning, Boehner, Pelosi and the rest of the Senate/House leaders are trying to get something done, short or long term, before the Asian markets open tomorrow, giving them roughly 12 hrs from when I'm writing this. I'm not too positive on that being done today, leaving for a tanking in Asia, moving to Europe at their open in the wee morning hours in the states. Will we see a limit down pre-market tomorrow? Remember folks, the last time that happened was Fall of '08, you never know...

Friday, July 22, 2011

What a week/Apple blowout

The last two weeks we have seen some of the best, if not the best earnings reports for major well-known companies. Last week, Google blew the top off, as I expected it would with it's new invention Google+, I myself had to give this a try and I think it is pretty cool, something that could possibly challenge Facebook in the near future. Their Ad revenue and market share in the Android market continues to be strong, showing that the consumer still is spending. I still have long positions in Google and have a price target of $700, though I'd wait for a pullback (5% or so) then load up again. Next good report happened this week, Apple. This was one of the best quarterly reports I have ever seen, not one hint of slowdown for this behemoth of a company. They blew away EPS and revenue, strong tablet growth, sales continue to be very strong. Only concern was their talks of a new CEO successor, because of Jobs health. When we saw the market pullback early last month, Apple broke a key $320 level down to $315, that was when I became bullish, this company has so much cash ($78B) and is basically trading at a discount, P/E then was 12 or 13 compared to average 15. Now at close to $400, the shares are gaining the momentum they need to puch to my price target of $500. Apple will continue to innovate, given Jobs stays healthy enough, though I'm sure their designing team is well aware of the fact and prepared for anything. My Apple longs in my mutual fund continue to do very well, not touching them at all. Have a good weekend everyone, heading out to see the family in Indiana for a few days, I'll try to keep this updated, trade safely!

Thursday, July 21, 2011

Medco Health/Express Scripts

So I woke up this morning to some odd M&A news for a Thursday, Express Scripts $ESRX is buying Medco Health Solutions $MHS for $29 Billion dollars in a cash/stock deal. At $71, this a 28% premium to prior days closing price. Although CVS Caremark $CVS is still operatioal at a $50 Billion dollar mkt cap, this will create a mini-monopoly especially in the generic drug business. My thoughts are "why?" ESRX basically had to use all of their cash and a large amount of their stock for this deal, while shareholders will have that overhang.

Futures this morning flat, debt talks still happeneing, looking for a deal by tomorrow to get passed into legislation. This morning we have Jobless claims for week ending 7/15, some economists are looking for under 400k. This would be the first time in 4 months, if that does happen, expect a sharp bounce in ES and a US$ selloff.

Wednesday, July 20, 2011

First post

I will hopefully be updating this everyday, depending on my workload and if I feel the need. What has recently been in the news is the debt ceiling talks. Though I tend to have a conservative bias, something DOES need to be done or we could see handle after handle selloffs in the stock market. Though I know not very many of you are as financially savy as I am, this is something that you should pay attention to. We basically went through Armageddon in fall of '08, then recovered very quickly. We could see a catastrophe similar if something is not done, but if you are short the market as I am from prior events, godspeed. More tomorrow