Archives for March 2012

March 2012 - Page 2 of 12 - Money Morning - Only the News You Can Profit From

Buy, Sell or Hold: Why Now is the Time to Buy Bacterin International
Holdings Inc. (AMEX: BONE)

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Getting old isn't all it's cracked up to be.

When I was young, dumb, and all too daring, I took chances that in hindsight were pretty boneheaded, and I'm still paying for them.

Once I even jumped off the roof of my grandmother's house, thinking I was going to catch the storm drain as I dropped by. Why I believed that I'm not sure.

Instead, I ended up in the hospital needing five reconstructive surgeries that included bone grafts donated from my own hip.

In fact, today I still suffer from a dull ache in the same hip, which is a decent trade off because I can still use my arm.

Fortunately, medicine has come a long way since the day I stood on that roof eyeing up that gutter.

Today someone in the same situation would turn to a biotech company to provide the material needed for that surgery, not a human donor.

This is one of the reasons I like Bacterin International Holdings Inc. (AMEX: BONE)

Breaking Down Bacterin

Bacterin designs, manufactures and markets revolutionary dermal and skeletal health products, bone graft material, biological scaffolds and related medical devices.

They also design and produce bioactive, anti-microbial coatings for implantable devices that act as barriers to infection.

Their total potential markets in the United States alone are estimated at over $8.5 billion. Of that, Bacterin has gained a small but growing percentage.

But here's what more impressive:

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Stock Market News Today: Why Annie's (NYSE: BNNY), Amylin (Nasdaq: AMLN) Soared Today

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Among the biggest moves in stock market news today include an 87% gain for organic food maker Annie's Inc. (NYSE: BNNY) in its first trading day, and a 55% jump for Amylin Pharmaceuticals (Nasdaq: AMLN).

Annie's Inc. (NYSE: BNNY) surges in first-day trading: It was expected to be among the best performers of the nine other companies going public this week – and it delivered.

The organic food producer ended its first trading day up 87%. The company offered 5 million shares at $19 a share.

"It's definitely the hottest deal of the week," Scott Sweet, senior managing partner at IPO Boutique, told Reuters. "They have only a few products but they've executed very well and have high brand awareness."

Known for its organic and gluten-free foods, Annie's hopes to capitalize on Americans' increasing trend toward healthy eating.

The growing popularity of more nutrition-conscious grocery shopping is illustrated in Whole Foods Market Inc. (Nasdaq: WFM) 844% share price rise in just over three years. Same-store sales at Whole Foods have steadily risen 8% over the past two years.

Annie's sales for the 2011 fiscal year that ended March 31 were $118 million, 23% higher than 2010. Profit increased 233% to $20.2 million from the year before.

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From Obamacare to Taxes: 5 Hot Topics Politicians Love to Lie About

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Political lies are as old as the Republic, but that doesn't make the practice any less of an insult to the American people.

Whether they are about Obamacare or taxes, political lies are a special kind of deception.

Rarely are they blatantly false. Political lies rely on misrepresentation of facts and convenient omissions that make their target look better – or worse – than it really is.

So convincing are today's politicians and their minions it's not even clear they always realize when they're bending facts past the breaking point.

"The problem is we never know whether they believe what they're saying or not," Brendan Nyhan, a Dartmouth political scientist and author ofAll the President's Spin, told USA Today.

At least three fact-checking organizations – the Annenberg Public Policy Center's FactCheck.org, the Washington Post's Fact Checker column and the Tampa Bay Times' PolitiFact – do their best to point out the almost daily deceptions.

But politicians know that few citizens ever visit such Websites. And that's what politicians and their surrogates are counting on.

"I don't think [the fact checkers] make a whit's worth of difference," Rick Tyler, a senior adviser to Winning Our Future, a super PAC that supports Newt Gingrich, told USA Today. "Millions more people will see [our] ad than will ever see the political fact check."

That doesn't deter the fact checkers, however. The constant stream of political lies has been keeping them very busy lately.

Here are five issues that have been particularly prone to political lies over the past several months. You'll probably hear variations of these all the way through the 2012 election.

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Not Even Saudi Arabia Can Save Us From High Oil Prices

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With oil prices soaring ever higher, Saudi Arabia stepped in last week and vowed to increase its production by 25% if necessary.

But while that assurance managed to siphon a few dollars off of oil futures, the reality is there's nothing Saudi Arabia – or anyone else, for that matter – can do about rising oil prices.

In fact, crude is still on track to reach $150 a barrel by mid-summer.

As Saudi Oil Minister Ali Naimi pointed out last week, current oil supplies already exceed global demand by 1 million-2 million barrels per day.

For its part, Saudi Arabia is already breaking its own OPEC-imposed production quota limit, churning out about 10 million barrels of oil per day – close to its 12.5 million barrel capacity.

Yet the effect of that production has been negligible.

Oil is still trading at $106 a barrel on the NYMEX – something that has clearly flummoxed the world's largest oil producer.

"I think high prices are unjustified today on a supply-demand basis," said Naimi. "We really don't understand why the prices are behaving the way they are."

Naimi and his colleagues may not understand oil's price gyrations, but Dr. Kent Moors, an adviser to six of the world's top 10 oil companies and energy consultant to governments around the world, does.

"Despite the excess storage capacity in both the U.S. and European markets and the contracts already at sea, oil traders set prices on a futures curve," said Moors. "In a normal market the price is set at the expected cost of the next available barrel. During times of crisis, on the other hand, that price is determined by the cost of the most expensive next available barrel."

And with tensions with Iran running high, we are currently in crisis mode. Pushed to the brink by Western sanctions, Iran has threatened to close the Strait of Hormuz – the narrow channel in the Persian Gulf through which 35% of the world's seaborne oil shipments and at least 18% of daily global crude shipments pass.

If Iran closes the Strait of Hormuz, crude oil prices will pop by between $30 and $40 a barrel within hours. Should the strait remain closed for 72 hours, oil trading will push up the barrel price to $180 in New York, and closer to $200 in Europe.

The situation is further complicated by potential military conflict – such as an Israeli air strike on Iran's nuclear facilities.

And with indications that Iran will have the ability to develop nuclear weapons in the next 18 to 24 months, Western powers have apparently shifted their focus from halting Iran's nuclear program to sowing instability in the country with the hopes of catalyzing a regime change.

So what does that mean for investors?

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Pentair Inc. (NYSE: PNR): How this Water Stock Delivered Double-Digit Gains in One Day

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Pentair Inc. (NYSE: PNR), one of the three stocks we highlighted Tuesday in our report on investing in water , has reached a deal with Tyco International (NYSE: TYC) to create a major water solutions company with annual revenue of $8 billion.

Pentair, which specializes in filter and pump manufacturing, will buy Tyco's flow control business for $4.6 billion in an all-stock deal. Tyco's flow business sells valves and thermal controls.

Pentair Inc. Price History
(NYSE: PNR)


Tyco's flow control business is one of the three parts it divided into last year in an attempt to rebuild its image, tarnished by a fraud scandal in 2002. Tyco will spin off its flow unit to shareholders and then immediately merge with Pentair. Tyco investors will own 52.5% of the combined company's shares.

The news shot PNR stock up 19% to $47.85 in early morning trading.

Pentair is already poised to profit from the world's growing need for clean water, as we detailed Tuesday. Investors who bought in to Pentair at Tuesday's closing price could have netted a double-digit gain today.

Now Pentair's merger with Tyco will give it an even bigger market share in the growing water solutions industry. Pentair will expand its product offering to include pipes, valves, and control products, and increase its industrial exposure and global reach.

"The new Pentair will be well positioned to benefit from the increased demands on energy, water, infrastructure and industrial process resulting from the growing population and wealth of developing economies," Pentair CEO Randall Hogan said Wednesday in a conference call. "The combined company will have increased scale, broader geographic reach and greater access to high-growth attractive sectors."

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How to Buy Shares of Apple for Less Than $30

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When a stock trades up to $600… that's impressive. Problem is when we're talking about Apple (Nasdaq: AAPL) and as that's exactly what we're doing here, it's also depressing. Depressing because a lot of investors want to get in on the action, but at $600, 100 shares costs $60,000. That's an entire portfolio for some investors.

One option for relief from this quandary comes from ETFs, scores of which offer decent exposure to Apple.

Fortunately, there are no "Apple ETFs" trading for $600. In fact, none of the ETFs that can be used for decent Apple exposure even trade in the triple digits – at least not yet. Here are some more "Apple on the cheap" ETF options to consider beyond the PowerShares QQQ (Nasdaq: QQQ), the Technology Select Sector SPDR (NYSE: XLK) and the iShares Dow Jones US Technology Index Fund (NYSE: IYW).

Global X NASDAQ 500 ETF (Nasdaq: QQQV)The Global X NASDAQ 500 ETF debuted in December 2011, so it's still fair to call this fund a new ETF and it might be that rookie status that has folks glossing over this fund as a legitimate way of getting solid exposure to Apple. That's too bad because since QQQV debuted, it's up 19.74% and that's not including Tuesday's gains. That performance is triple what QQQ has offered over the same time frame.

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Investing in Water Stocks: Three Names to Buy Right Now (SBS), (PNR), (PIO)

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You've no doubt heard about the building scarcity of water. It's the reason savvy shareholders have been busy investing in water stocks.

Here's why.

Water may be everywhere but only 3% of it is fresh or suitable for drinking. Two-thirds of that is locked in glaciers and polar icecaps, which means less than 1% of the world's fresh water is available for human use.

That's the water found in lakes, rivers, reservoirs, and underground sources shallow enough to be accessed cheaply. Even still, much of that is polluted or otherwise unsuitable for consumption.

The water that's left is then used in agriculture and industry, and here's the kicker: It is divided between seven billion people… and demand is increasing all the time.

According to the United Nations, in the last century water use has increased at more than twice the rate of population growth.

Water has become so critical that Willem Buiter, chief economist at Citigroup, believes it will soon become "the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals."

That may be hard to imagine, considering we can simply turn on the tap and get fresh water for next to nothing.

But it's true. There are myriad of factors-from population growth to climate change-putting a strain on the world's water supply and causing demand to spike.

We'll look at those factors and how investors can benefit from this growing demand by investing in water stocks.

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Forget Goldman Sachs; Only Fools Rush In

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Is Goldman Sachs (NYSE: GS) playing us all for Muppets when they say stocks now present a generational buying opportunity?

The investment bank's 40-page bullish report, titled "The Long Good Buy: The Case for Equities," says to forget the huge run-up since 2009, forget the 25% rise in equities over the last five-and-a-half months, and forget bonds. This party is just getting started.

Are they right? Yes, they are.

Should you heed their advice and sell your bonds and load up the truck with equities? Hell no.

Goldman's report is like me forecasting increasing dark towards evening. It's too obvious. Of course stocks are a better buy than bonds in the long run when bond yields are so low.

But there's this little problem of timing that they don't address.

If you load up on equities now, and there's a correction, or worse, a double-dip in major market economies, and you get taken to the cleaners, unless you're young enough to hold onto your stocks for a generation, you may be done… as in toast.

Right now is not the time to jump onto the bull market. It looks great, I agree. But this creature is getting restless, and coming into the spring, some caution may be warranted.

If you want to get in, have patience. There's plenty of time, if the markets are presenting a generational buying opportunity.

By the way, they already have had a generational run, and you probably missed it. Did you load up in March 2009? Did you load up in October of last year?

Piling on right now is exactly when the fools rush in. Forget Goldman. You know they fleece their clients. Just because you aren't a client doesn't mean they're not out to use you, too.

The markets didn't rally on the Goldman report. They shrugged it off as mere public relations, perhaps to defray that conversation about the firm playing its clients like puppets.

What drove markets last week was China. There are increasing worries that the Chinese economy may be slowing more than anticipated. If that is the case, if Chinese GDP growth slows to below 7.5%, global markets will cool down. If its GDP growth falls to 5%, or lower, global markets could crash.

Yes, I mean crash, as in, drop 50% in short order.

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Is Apple Stock (Nasdaq: AAPL) the Short of a Lifetime or the New Widow Maker?

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I have a confession to make.

I believe Apple stock (Nasdaq: AAPL) is going to be world's first trillion-dollar company yet I want to short the snot out of it.

Am I being compulsive?…impulsive?….or foolish?

Perhaps it is all three considering that Apple has risen more than 3,000% in the last ten years, turning almost any attempt to go against the grain into a "widow maker" trade.

I say almost because I am one of the lucky ones.

A few weeks ago I recommended my Strike Force subscribers purchase put options on Apple, effectively shorting the stock. That resulted in a 47% profit in less than 24 hours for anyone who followed along, excluding fees and commissions.

I'm not alone in my thinking.

Uber investor Doug Kass, general partner of Seabreeze Partners Long/Short LP and Seabreeze Partners Long/Short Offshore LP, tweeted recently that he had covered "half his short" on Apple following the announcement of their dividend and buyback plan.

Given that the stock had run up to nearly $608 a share before the announcement, presumably Kass had banked some gains, too.

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Health Care Reform: How the Supreme Court's Affordable Care Act Ruling Could Affect Our Economy

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Health care reform takes center stage this week as the U.S. Supreme Court hears arguments on the constitutionality of the Affordable Care Act, otherwise known as Obamacare – and it's going to be a real doozy.

A final decision will be issued around the end of June, just months before the presidential election. It could be like the shot heard "round the world.

Law, politics, U.S. world image, and our economy weigh in the balance.

Pundits are predicting and cogs are turning. Here's how the Supreme Court's decision on Obamacare may play out and how it might affect our economy.

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