Archive for March, 2010

Top Stock Picks: Dividend ETF’s

By: ispeculatornew | Date posted: 03.26.2010 (4:00 am)

Many of the readers of this blog are especially interested in our monthly top dividend stock picks but like myself, they are looking for easier ways to get it done. Buying high dividend yield names can bring great rewards but it can also carry its own risk. Often, a stock with a high dividend yield is attractive but it look so because many investors are already anticipating that the dividends will be decreased (usually because the company cannot afford to keep up with the payments) and there goes that great dividend yield you were anticipating. That is why I usually include earnings information when I present this info. A high dividend yield in a company that is losing money is never a good sign.

But as regular readers know, I am a big fan of ETF’s and in terms of dividends, they can be a very good solution. Instead of picking one company, you are picking several dozens of high dividend yield names. One or two might reduce their payouts, but that would have a very limited impact on the entire ETF.

At first I figured I would compile a list of the top “dividend ETF’s” or perhaps the top “fixed income” ETF’s (which I will do next week) but I ended up seeing a lot of other opportunities in areas such as Real Estate ETF’s. So here is the complete list of the top 50 Dividend ETF’s:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
PCLNPriceline Group Inc/The1039.9823.3416.9-8.7929.134.62166.821.23133.431.5130.83N/AN/A

There were a few surprises such as seeing a pharmaceutical ETF or real estate ETF’s but in general, the top ETF’s are either composed of preferred shares or some type of corporate bonds, usually high yield. I personally like many of these picks. What about you guys?

Quick news – March 25 2010

By: ispeculatornew | Date posted: 03.25.2010 (3:29 pm)

Netease (NTES) rated new “BUY” aby Auriga
Some Google (GOOG) partners in China are getting out of partnerships – among them Tianya (internet company)
Sohu (SOHU) will boost its effort on the search business following Google’s (GOOG) departure
Google (GOOG) Android software is no longer on Motorola phones shipped to Chin
Ebay (EBAY) raised to outperform by Credit Suisse
Dell (DELL) is now also threatening to leave China
Google (GOOG) calls for action on web limits (more)

Speculating Excavation: Iron Ore In Labrador & Quebec

By: ispeculatornew | Date posted: 03.25.2010 (5:00 am)

By The Rat

First of all, I’d like to thank the Intelligent Speculator for allowing for me to write a guest post and be featured on what I consider to be a great personal finance resource.

As you may have noticed from the image, this is not one of those usual threads discussing potential gems within the technology sector. I think the Speculator is doing a terrific job covering a lot of the news and investing opportunities within this field, and I’ll leave him to work his magic in that regard.

As a result, I’ve decided to cover what I consider to be a potentially good company to watch out for in a totally different sector – mining. I’m optimistic that I can be consistent with the intent of this site by highlighting a company that isn’t necessarily making a pile of cash at the moment, but may easily be on its path to excavation, extracting minerals, and making money.

New Millennium Capital Corporation (NML: TSX-V) is presently a small company with a market capitalization of around $146 million. The company is listed on the TSX Venture with a current ask price of about $1.11 per share.

Here’s a snapshot of the company’s 1-year chart, complements of the newly enhanced Globe Investor site:

It was only this past autumn that the stock price was hovering at about $0.52 per share. I vividly remember this because I was seriously considering buying in at that time.

New Millennium is seeking to develop projects in Northern Quebec and Labrador.  The company’s website states, “New Millennium controls the emerging Millennium Iron Range, which holds the world’s largest undeveloped iron ore deposits in the Province of Newfoundland and Labrador and in the Province of Quebec.”

Another interesting piece of information to note is that NML is financially backed by a reputable and large corporation. We’ve all heard of China’s thirst and demand for various commodities as it has experience dramatic economic growth, right? Well, iron ore is no different, and India can be considered by many to be ‘next in line’ to experience dramatic economic growth.

As the company website mentions, “Tata Steel, the world’s sixth largest steel company, owns 19.9% of New Millennium and is the Company’s largest shareholder and strategic partner.”

One of the company’s strategic initiatives involves the Direct Shipping Route (DSO) and the results of this project’s feasibility study have recently been released. Here are some of the highlights from the release issued on February 25, 2010:

Highlights of the DSO Project Feasibility Study:

  • Production assumption of 4 million tonnes per year (“mtpy”) of Sinter

Fines and Super Fines products.

  • Proven and Probable Mineral Reserves of 64.1 million tonnes (“mt”).
  • Variable stripping ratio, from mine to mine, with an average of 1.03

over the life of the mines.

  • Total initial capital cost of US$ 300 million and working capital of

about US$ 13.5 million.

  • Sustaining capital, capital leasing, mine rehabilitation and Goodwood

development at US$ 115 million

  • Internal rate of return (“IRR”) of 29% (unleveraged and before

corporate taxes and mining taxes).

  • Payback of 3 years after the start of commercial production.
  • Direct jobs creation of about 200 at the mine, wash plant and

administrative areas.

  • Anticipated start of commercial production in Q3, 2011, provided that

certain advanced engineering, purchases of equipment and site infrastructure development are made in March, 2010.

Whether you’ve noticed on the Business News Network (BNN), or in the news elsewhere, many analysts seem to think that iron ore prices are poised to increase in 2010 and beyond.

New Millennium has a very large iron ore deposit, and it appears as though they are making the necessary steps in getting the excavator to the ground and begin production.

The overview of the anticipated projects section of the company website highlights the eventual construction of a slurry pipeline, ship loading facilities, and related infrastructure.

From a disclosure perspective, I presently do not own a position in this company; however, I am keeping a close eye on it for investment purposes.

Despite the fact that my investment strategy normally entails investing primarily in companies that pay dividends or income generating investment vehicles, I may make an exception with this company. I believe it is well positioned to experience share price appreciation.

However, with that being said, I am the furthest thing from being a professional so do your own due diligence, research the company more, and decide for yourself.

In the meantime, it’s been a pleasure showcasing a potential ‘diamond in the rough’. I wish you the best of luck with your investment decisions!

[Image Source:] – Many thanks “Ending the Rat Race” for this guest post

Quick news – March 24 2010

By: ispeculatornew | Date posted: 03.24.2010 (3:28 pm)

Baidu (BIDU) was raised to buy from sell by Samsung Securities Co.
Baidu (BIDU) was downgraded to hold at Mirae Securities
Google’s (GOOG) Hong Kong website has been available on and off for China’s mainland residents
Go Daddy will stop selling China domain names
Shanda Interactive (SNDA) rated new “Buy” by Auriga

Amazon (AMZN) vs Apple (AAPL)

By: ispeculatornew | Date posted: 03.24.2010 (5:00 am)

I’ve written about this in the past but I believe it even more as time goes by. Amazon will suffer a lot more from the arrival of the Ipad than most would imagine. Some had pointed out that electronic books represented such a small portion of Amazon’s sales that the impact would be minimal. And they could have been right. But my opinion was that Amazon would lose so much focus & energy on this battle with Apple, one that I believe it cannot win, that it would impact the rest of the business as well.

Last week, I mentioned that Amazon was threatening smaller publishers that decided to offer their books on Apple’s Itune store. Seriously? Is that the best they can come up with? Because knowing how Apple has dominated Apps and music, I can’t imagine a publisher would go down that route. Instead, they would probably take themselves off of Amazon. And right now, the selection of books is the only thing keeping clients around.

The product is simply superior

Hearing about Apple hiring staff to start building a colour screen for its Kindle is cute in a way but kind of pathetic in another no? I mean we knew years ago that this was going to happen so why did Amazon just figure out now that having a black and white screen might be a problem when competing against competitors? Did it not anticipate that the competition would have multi-use products to compete with the Kindle? The problem is that at this point, it is probably too late for Amazon to catch up. The Ipad has not even been shipped yet and it’s already years ahead of the Kindle or even worse, it’s years of the future version of the Kindle.

So what is Amazon to do?

I would say it’s simple. Wave the White Flag, give up. Not in the sense that Amazon should stop selling and producing the Kindle, but rather that it should focus on its core strengths, its distribution and shipping network. Continue producing the Kindle but set it off as a division that is no less but also no more important than the others. And when I hear news about Amazon, I would expect the Kindle to be a small portion of it. Amazon is not equipped to compete with Apple for such a device, especially when you consider companies like Sony & Microsoft failed.

Am I being too radical? I just don’t think it’s bad luck that Amazon’s stock has suffered since the release of the Kindle.

Quick news – March 23 2010

By: ispeculatornew | Date posted: 03.23.2010 (3:48 pm)

Baidu (BIDU)
raised to Buy at Kaufman Bros
Goldman Sachs (GS) raises target for Baidu (BIDU) to 675$
Baidu (BIDU) cut to hold at Mirae Asset Securities
Chinese government partially blocks access to Google (GOOG) Hong Kong (more)

Google (GOOG) at war with China

By: ispeculatornew | Date posted: 03.23.2010 (4:00 am)

There had been speculation about an outcome for several weeks now ever since Google (GOOG) had announced its intention to stop filtering search results. And finally it happened today, Google took drastic action basically taking action against the Chinese government. It took the step of redirecting all traffic from its Chinese website, to its Hong Kong operations. There users can find an unfiltered search engine in their language. This is a direct attack towards the Chinese government and it did not take much time to generate reactions:

-“This move is totally wrong” – Xinhua (Chinese official news agency).

-“They stressed that foreign companies in China should abide by Chinese laws, and if Google is willing to abide by Chinese laws, we continue to welcome it operating and developing in China. If Google insists on dismantling the search service of its Chinese website, that is Google’s own affair. But it must follow Chinese law and international custom, and responsibly handle the aftermath.” – Chinese Official

Google carefully explained its decision on its own blog. This was not a mistake, not an error, it was a carefully planned move, that had been discussed with the US government with even Barack Obama being kept informed about the process that led to this outcome. What’s most clear is that this is a bold move. No matter how powerful Google might be (and it clearly is very much so), this is a bold move that could have massive implications for internet users in China as well as all companies involved in the Chinese market.

It is an interesting strategy because it is not illegal. The Chinese website owned by Google does not display unfiltered results, which would have made it easy for Beijing to kick out the internet giant. But let’s face it, the result is the same and the ball is now in China’s camp. It can now either block Google and deal with internal problems or a less likely scenario would be for China to now compromise or be more flexible with Google. How likely is that to happen? I’d say almost impossible. China considers itself a world power and surely hates to see Google challenge its power right now.

The winner?

Of course Baidu right now is looking like a very bright star. There is no doubt that the Chinese government will be on Baidu’s side in the near future. I had been hesitant to take a position on Baidu but I’m getting more comfortable with the idea and might become even more so when it becomes more clear how the Chinese government will react to Google’s recent challenge…

Quick News – March 22 2010

By: ispeculatornew | Date posted: 03.22.2010 (3:44 pm)

-Google (GOOG)
takes new direction regarding China (more)
-Google (GOOG) going ahead despite warnings from Chinese government  (more)
-Microsoft (MSFT) privately testing a Twitter for business service (more)
-Tablet war heats up: HP Slate details leaked (more)
-Amazon (AMZN) offering Kindle App for Apple (AAPL) users (more)
-NY Times (NYT) planning on offering free content initially on the Ipad and perhaps move to subscription model later on
IAC Interactive (IACI) cut to neutral by UBS
Shanda Interactive (SNDA) to buy back $300 million in shares
-Amazon (AMZN) rated sell at Singular Research

New Trade: Long Ebay (EBAY) & Short IAC Interactive (IACI)

By: ispeculatornew | Date posted: 03.22.2010 (4:00 am)

It did not take very long did it? Only a few days after closing out a trade where I was long Ebay, I’m ready to go long once again on the stock. Ebay’s electronic payment unit Paypal is looking more attractive each week and recent announcements that Paypal would be used by Facebook but also used in a new Peer to Peer payment system on the Iphone could mean a lot more business for the company. The main aspect about Paypal is that it has no real competition to speak of. There are alternatives but they are not as widely used and none looks like a credible threat to Paypal at the moment. It is also making a push to improve its growth in Asia, seen as a key area in the future of the company.

Regular readers know that I am not a huge fan of IAC Interactive and most other web content conglomerates. I do not have a specific reason to short IAC Interactive (IACI) right now apart from the fact that based on valuations they do look expensive. I also do not think their financial performance warrants such a high return so far this year (stock is up over 18% YTD).

Is Ebay the perfect story? No, but going long Ebay against IACI seems like the perfect trade right now and so I stand ready to push ahead.

Quick news – March 19 2010

By: ispeculatornew | Date posted: 03.19.2010 (1:46 pm)

Is Palm (PALM) headed for a takeover? – (more)
Palm (PALM) rating cut to sell at Kaukman Bros, Cannacord Adams & Morgan Joseph (2 of them have a 0$ price target for PALM)
Research in Motion (RIMM) rated as “Buy” at Wunderlich
Google (GOOG) Finance preparing battle with Bloomberg & Reuters? (more)
Amazon (AMZN) threatening small publishers to remove them if they move to Apple (AAPL) store… bad strategy (more)