Archives for August 2010

August 2010 - Page 9 of 10 - Money Morning - Only the News You Can Profit From

Barnes & Noble Sale Won't Rid the Retailer of its Woes

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Barnes & Noble Inc. (NYSE: BKS) announced late Tuesday that it would put itself up for sale. But even with its recent struggles analysts aren't sure of what the company hopes to accomplish.

"There are companies that do this because they have to and there are companies that do this because they have impatient shareholders and I'm not sure what's driving this kind of statement," Michael Norris, a senior analyst at Simba Information, told The Associated Press. "It just seems daft."

The company's board said that it believed Barnes & Noble stock was "significantly undervalued" and that it had established a special committee to review its options.

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Google's Android an iPhone Killer?

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The struggle for dominance in the smartphone market is heating up and Google Inc.'s (NASDAQ: GOOG) Android operating system for handsets appears to be winning the war against Apple Inc.'s (Nasdaq: AAPL) iPhone system.

When Apple debuted the iPhone 4 on June 24 it broke sales records. In the first three days, the company sold 1.7 million devices in the United States, the United Kingdom, Japan, France and Germany, the most for any version of its top-selling product.

But the popular device has been plagued by misfortune – including the suicide of a Chinese worker, lost prototypes, reception problems, and an inauspicious introduction to the press and public when Chief Executive Steve Jobs could not get the phone to connect to the Internet.

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Slight Job Gains Won't Shrink the High Unemployment Rate

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Employment reports released this week show mixed results, but lead to the same conclusion: The high unemployment rate isn't improving any time soon.

U.S. private-sector jobs last month grew by only 42,000, according to a report issued yesterday (Wednesday) by payrolls processor Automatic Data Processing, Inc. (Nasdaq: ADP). ADP revised the number of jobs added in June to 19,000 from 13,000, which fell far short of economists' predictions of 39,000.

The ADP report "shows continued weakness in the jobs market, which is in part caused by the uncertainty in the economy and general business climate," said Gary Butler, ADP's chief executive, in a statement. "American businesses are on the cusp of recovery, but more effective incentives are needed to encourage business investment resulting in the creation of more jobs."

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Question of the Week: Readers Respond to Money Morning's BP Image Query

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BP PLC (NYSE ADR: BP) last week confirmed that Robert Dudley – an American and a company insider – would be replace Tony Hayward as the company's chief executive officer in a move that's intended to improve the battered BP image.

Dudley, who takes over Oct. 1, will have to take on a double-edged challenge. He has to continue the cleanup effort that he's headed since June. And he must persuade the U.S. government that BP should be allowed to continue offshore drilling work in the Gulf of Mexico – the region it has targeted for 25 of its 40 future production operations over the next five years.

Because he's led the BP oil-spill-response efforts since June, Dudley has developed a much closer rapport with U.S. officials than his predecessor. Make no mistake: The respect he commands was a key reason for BP's swap at the top.

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Cashing in on Canada: Four Ways to Profit - Big - From the World's "Safest Economy"

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Canada is more than just back bacon, maple syrup, and hardscrabble-mining claims. It's a leader in natural resources, precious metals, and such alternative-energy investments as oil sands.

In fact, Canada right now boasts one of the world's most compelling targets for investors' hard-earned money. Consider that:

  • Through 2008, Canada enjoyed 12 straight years of budget surpluses.
  • Since the outset of the global financial crisis, not a single Canadian bank failed.
  • Canada was the first G-7 nation to raise interest rates.
  • And while Canada has already reaped the benefits of a full 10 years worth of a full-blown bull market in commodities, there are at least 10 years more to go.

Added together, this points to a major potential payoff for those who invest in Canada right now.

For the four best profit plays in the world's safest economy, please read on...

Hot Stocks: OGE Energy Corp. (NYSE: OGE) Is Electrifying Investors' Portfolios

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Utilities have been red-hot in the past month, as subscribers to my private advisory service – The Strategic Advantage – have earned double-digit profits on power generators from Vermont to Arizona.
Let's take a look at one of my favorites now: OGE Energy Corp. (NYSE: OGE), the parent company of electric utility Oklahoma Gas and Electric Co. and natural gas pipeline operator Enogex LLC.
OGE exemplifies our summer theme: Low-risk asset growth, stable earnings and rising dividends. The stock has performed very well for us – it's up more than 11% this month. OGE also pays a 3.7% dividend.

We've talked a lot about utilities, but it is hard to overstate their importance. Businesses need electricity to run production lines, operate computer servers, manage inventory, and light buildings. A power outage that only lasts a few minutes can cost a business thousands of dollars, because machines need to be readjusted so that products can be correctly assembled.

Oklahoma Gas and Electric is the utility unit of OGE and provides electricity to nearly 800,000 customers in Oklahoma and western Arkansas. It is a sizeable utility with $3.14 billion in annual sales and a $3.83 billion market cap. OGE mainly generates electricity from natural gas because the utility receives excellent distribution rates from Enogex.

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We Want to Hear From You: Are You Preparing for a Double-Dip Recession?

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The "pause" button has been hit on the U.S. economic recovery, fueling worries that we're headed for a double-dip recession.

"We're in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession," Former U.S. Federal Reserve Chairman Alan Greenspan said in an interview on NBC's "Meet the Press" broadcast Sunday.

Greenspan touched off speculator interest in a double-dip downturn when he announced that a further decline in home prices could push the economy toward a new recession.

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Flat Consumer Spending and Declining Factory Orders Point to Slower Economic Recovery

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Consumer spending in the United Sates was flat in June and personal savings were the highest in a year, underscoring how unemployment continues to hamstring the U.S. economic recovery.

Separately, U.S. factory orders fell by more than expected in June from May, and pending home sales continued to plunge as the expiration of a government subsidy for first-time homebuyers depressed housing market activity.

Taken together with the gross domestic product (GDP) data for the second quarter, the latest string of reports shows a U.S. economy that is drawing closer to a double-dip recession.

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Taipan Daily: Zero-Interest-Rate Market Investments

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We all know the economy has a tough row to hoe… We're facing severe unemployment. Almost 50% of those unemployed have not been able to find a job in six months. We've also seen huge bankruptcies over the past two years, such as General Motors, CIT Group and Lehman Brothers, and more than 100 banks […]

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Insights on ECRI: Is This Stock-Market Prophet Calling for a Double-Dip Recession?

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The Economic Cycle Research Institute – referred to as the "ECRI" by anyone in the know on Wall Street – has correctly called every U.S. recession during the last 45 years.

To work its magic, the ECRI charts the weekly changes in an index of Leading Economic Indicators (WLI). Market professionals like myself very quietly use the same group of indicators to call market tops and bottoms. The indicators are so accurate in terms of what they have to say about the future that I refer to ECRI and the WLI as "The Prophet."

Given the Prophet's 100% hit rate over the last half century, investors should definitely take heed of the warning signals that this economic seer of seers is making right now.

To see if the ECRI has labeled this as a "double-dip" recession, please read on…

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