Archives for April 2012

April 2012 - Page 2 of 13 - Money Morning - Only the News You Can Profit From

Amazon.com Inc. (Nasdaq: AMZN) Stock Surge Has Silenced Critics

Amazon.com Inc. (Nasdaq: AMZN) stock is soaring today, and analysts are rushing to raise price targets and ratings.

The world's largest online retailer showed its muscle by reporting healthy earnings after the close Thursday, handily beating Wall Street estimates.

The news sent shares soaring almost 15% in after-hours trading. AMZN stock was up more than 16% Friday by 1:30 p.m. EDT to $228.59.

The Seattle-based company reported first-quarter sales jumped 34% to $13.18 billion, compared with $9.86 billion in the first quarter of 2011. Estimates were for $12.9 billion.

Net income slipped to $130 million or 28 cents per diluted share, compared to $201 million or 44 cents a year ago. Despite the decline, it was still heads above the mean forecast for 7 cents a share.

Worldwide media sales surged 19% to $4.71 billion and worldwide electronics and other media merchandise swelled 43% to $7.97 billion.

But the number that really triggered a slew of analyst upgrades was Amazon.com's profit margin increase. The company's gross margin widened to 24% from 22.8% for its best year-over-year improvement in years.

"Bulls have been waiting a long time for this gross margin upside and it finally came in the first quarter," Macquarie Equities Research analyst Ben Schachter told Reuters.

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Oil and Gas Companies: What this EPA Official Doesn't Understand

Government bureaucrats really need to stop talking when there's a camera present; otherwise, they might just get caught telling the truth about their agenda when the tape resurfaces.

Enter Dr. Alfredo Armendariz, the U.S. Environmental Protection Agency (EPA) regional administrator for Region 6, a region that oversees environmental regulations for energy companies in Louisiana, Arkansas, New Mexico, Texas, and Oklahoma.

Turns out, Armendariz doesn't like oil and gas shale production, and he's quite the history buff.

Joel Gehrke in Washington explains:

"Al Armendariz, a regional administrator for the Environmental Protection Agency, explained in 2010 that he understands the EPA policy to be to "crucify" a few oil and gas companies to get the rest of the industry to comply with the laws.

"I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement," Armendariz said during a meeting in 2010. "It's kind of like how the Romans used to conquer little villages in the Mediterranean: they'd go into little Turkish towns somewhere, they'd find the first five guys they'd run into, and they'd crucify them and then, you know, that town was really easy to manage over the next few years."

Armendariz said that by finding companies that are "not compliant with the law and you make examples of them," the EPA could maximize its enforcement capability with limited resources. He added that "fines can get very high very quickly, and that's what these companies respond to.""

Breathe.

Let's forget the reference to killing dissidents for a second. That's a whole different therapy session.

There are a few important points that need to be addressed about this sort of rhetoric.

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Classic Cons: How to Avoid the World's 10 Biggest Financial Scams

Over the past 40 years, only one new entry has been added to the Federal Bureau of Investigation (FBI) roster of "Top 10" investment scams – the very broad category of "Internet fraud."

The other financial rip-offs listed are merely new versions of tried and true swindles that have been around for decades or more – from Ponzi schemes and pyramid systems to phony stock offerings and commodity cons.

The big difference is that the one new category – Internet fraud – has greatly increased the frequency, speed and effectiveness of the other types of financial fraud, as well as exponentially increasing the scammers' take.

In 2009, there were 6,062 robberies of physical bank offices and branches, netting the perpetrators a total of $45.9 million in loot, more than $8 million of which was recovered by law enforcement officials. By contrast, there were more than 14,000 reported (and countless unreported) online attacks on banks and bank customers, with the estimated loss exceeding $110 million, almost none of which was recovered.

In addition, where physical bank theft is local, online robbery is global. MSNBC recently reported that a ring of cyber thieves based in Eastern Europe had used a so-called Trojan horse computer program to steal more than $1 million from the accounts of more than 3,000 British bank customers in just four weeks – and, even though the banks had identified the problem, they weren't able to immediately stop the thefts.

That mirrored an even broader rip-off of banks and their customers…

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Is the U.S. Economy Still in a Recession?

According to a Fox News poll, 83% of Americans think the U.S. economy is still in a recession. Money Morning Chief Investment Strategist Keith Fitz-Gerald joined Fox Business’ "Varney & Co." to weigh in on the state of the U.S. economy, and whether or not it’s a good time for investors to be in the […]

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QinetiQ Group (QNTQY): If You Like James Bond, You'll Love This Company

In the Digital Age one thing is valued above all others: security. And nothing is more crucial to security than information.

Whether acquired by HUMINT (human intelligence) or SIGINT (signals intelligence) information is a powerful weapon for governments and businesses alike.

The firms that provide this critical information gathering infrastructure will form the foundation for the next generation of security companies.

One of the major players in this growing sector is a Farnborough, England-based company.

Today it's called QinetiQ Group(QNTQY.PK)–pronounced "kinetic". But its beginnings are just as fascinating as its business.

QinetiQ: From 007's Aston to Railguns

Born as the Defense Evaluation and Research Agency (DERA) in the mid-1990s, the agency worked on "unique" problems and solutions.

In essence, DERA's business was staying one step ahead of the bad guys. But DERA's mission actually goes even further back in time.

Ian Fleming, a former intelligence officer and creator of the iconic James Bond character, actually patterned Bond's mad scientist/inventor "Q" and his labs on the formative QinetiQ back in the '60s.

Fifty years later, QinetiQ is now into everything from rail guns (guns that use electricity to launch rockets or shells), to Scramjets (new jet technology that's three times faster than today's jets), to non-lethal weapons and equipment that today's James Bonds are packing.

But today's QinetiQ has had a bumpy ride since its public offering in 2001.

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Investing In ETFs: How Exchange-Traded Funds Can Save You Money

High commissions and management fees, along with taxes, can really cut into your returns.

That's where exchange-traded funds, or ETFs, come in. In today's investment world, ETFs are cheaper and more tax-friendly than mutual funds.

The average expense ratio for U.S.-listed ETFs is 0.4%, compared with 1.42% for diversified U.S. stock funds.They also give you exposure to an entire industry or market with the click of a mouse.

It's one of the reasons why exchange-traded funds are quickly becoming the investment of choice for investors seeking broad market exposure.

In fact, the number of ETFs has surged over 10-fold in the last decade.

The total number of ETFs in the market grew to 1,114 by October 2011, with assets over $1 trillion, according to the Investment Company Institute.

And the ETF market will expand to roughly $3.1 trillion by 2016, according to projections from the Financial Research Corp. in Boston.

So if you're looking to diversify your portfolio and save money doing it, ETFs may be the way to go.

Here's a primer on how ETFs can work for you.

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Biotech Stock Trading: The "ASCO Effect" Can Double Your Money in Days

At the beginning of May 2011, OXiGENE Inc. (Nasdaq: OXGN) was a relatively unremarkable biotech stock. It was trading at less than $2 a share.

You might even say that OXiGENE was deeply troubled.

The company faced questions about management turnover and its cash position. Its investors were worried about its cancer-drug pipeline.

In fact, the stock was one of the biotech sector's worst performers in 2010, and the company had to endure the ignominy of a reverse stock split in February 2011.

Then came the "ASCO Effect."

Over a nine-trading-day stretch that started the first day of May, OXiGENE shares soared 218% – on a massive spike in volume. If you include the intraday high, the stock gained as much as 245%.

This isn't an isolated case.

Each June, the American Society of Clinical Oncology (ASCO) hosts its annual meeting – an event that's attended by 30,000 people and the scene of 4,000 presentations.

Roughly two months beforehand, ASCO posts the titles of the research abstracts that will be the basis of those presentations.

Traders search those abstracts to identify the sponsoring companies – many of them development-stage oncology biotechs whose low share prices make them fodder for some fast action.

That's exactly what happened with OXiGENE at this time last year: Traders scoured ASCO's Website and found two abstracts dealing with the company's cancer drug Zybrestat.

Not long afterwards the stock zoomed.

Biotech Stocks and the ASCO Game Plan

This year's ASCO annual meeting is scheduled for June 1-5 in Chicago.

The ASCO Effect move often starts in April. But there's almost always an additional stretch in May during which oncology stocks experience near-vertical spikes in very short periods.

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What is CISPA?

The Cyber Intelligence Sharing and Protection Act has kept the Internet buzzing this week, leading many to ask, "What is CISPA?"

Basically, CISPA would allow companies and government agencies to share information they considered to be a "cyber threat" with other private companies or the government and not be penalized for such sharing.

The divisive cybersecurity legislation comes up for a vote in the House Friday, and civil liberties groups, Internet groups, and a swarm of political leaders are taking a strong stance against the bill.

The American Civil Liberties Union (ACLU) maintains CISPA is a serious threat to domestic privacy laws and threatens to undercut vital privacy protections.

The ACLU argues the bill is even more insidious than the Stop Online Piracy Act (SOPA), stating that the legislation "would give the government, including military spy agencies, unprecedented powers to snoop through people's personal information–medical records, private emails, financial information-all without a warrant, proper oversight or limits."

Even the Obama Administration opposes the bill, siding with the Internet forces on this one. President Barack Obama said Wednesday he would veto the bill if it passed in current form.

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ExxonMobil (NYSE: XOM) Earnings Miss - But Investors Should Stay Put

ExxonMobil (NYSE: XOM) earnings came up short this morning. The oil giant missed analysts' expectations by about 9 cents.

Steve Schaefer at Forbes runs down the numbers:

"The energy giant recorded earnings of $9.5 billion, or $2.00 per share. Those figures were down 11% and 7%, respectively, from the first quarter of 2011, and earnings per share were below the $2.09 analyst consensus. Revenue of $124.1 billion was up 8.8% from a year ago, but just shy of the $124.8 billion expected.

Earnings in Exxon's upstream, or exploration and production, fell 10.1% from a year ago, to $7.8 billion, while downstream earning, which include refining, were up 44% from the prior year to $1.6 billion, thanks largely to gains from asset sales and improvements in volume and mix."

This earnings miss is the least of Exxon's short-term worries as we head into the summer months and the election heats up. There are a lot of problems for the company to overcome all at once – but it shouldn't send ExxonMobil investors headed for the exits.

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This Biotech Startup Just Scored a Key Cancer Breakthrough

Don't worry if you've never heard of Robert Langer. Few investors have.

But 20 years from now, when some enterprising author writes the book about how the United States finally found a cure for cancer, you can bet that Langer will be there, front and center, in the table of contents, or maybe even on the cover.

Today Langer is a distinguished professor at MIT, in chemical and biomedical engineering. More importantly for investors like us, he is the co-founder of a hot biotech startup that just reported a key cancer breakthrough.

It's called BIND Biosciences. And it isn't just on an IPO track.

It's one of the companies I refer to when I say technology can save America. Thanks to this nation's innovative thinkers and savvy entrepreneurs, just like Langer, this country leads the world in high-tech breakthroughs – the kind that reshape lives and histories. And that's what makes me truly believe that The Land of Opportunity is bound to come out ahead in the long run.

So if you want to make big money in the Era of Radical Change, you can forget about the global debt crisis. Ditto Washington's antics. Same goes for monthly jobs reports and even the market's ups and downs.

You need to keep an eye on guys like Bob Langer.

Here's why…

His Team Has Given Millions New Reason for Hope

Right now 12 million Americans are suffering from some form of cancer; the disease will kill one-third of them outright. In the next 24 hours, nearly 1,500 cancer patients will die. Odds are, several people will have passed away by the time you read this report.

Many of you will relate to this on a personal level. I know I do. Cancer killed my maternal grandmother and two of my friends.

Yet today, finally, after many billions of dollars funneled into cancer research over the decades, I believe we have passed the "tipping point" in our long battle against this deadly disease. I predict that within a decade we will cut the number of cancer deaths in half.

Not only will sharp biotech investors (like us) profit along the way, the nation as a whole will get a tremendous payoff when that happens. After all, cancer costs the U.S. roughly $225 billion a year in health-care bills and lost wages.

So, the Langer team's breakthrough has much to offer America, at a time when many people fear that China is getting ready to have us for lunch. Well, let me tell you this. You won't see this kind of innovation coming out of China any time soon.

Here's How They Did It

As it turns out, Langer's team used very small – but very mighty – weapons to fight the cancer war.

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