Archives for February 2011

February 2011 - Page 7 of 8 - Money Morning - Only the News You Can Profit From

Nine Winning Sports Stocks as We Enter Championship Season

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After all of the buildup, Super Bowl XLV is finally in the history books. But the fact that America's new favorite pastime is now in hiatus doesn't mean the world of sports will stop spinning.

In fact, a number of high-profile sporting events will take place in the next few months:

  • Major League Baseball Spring Training starts on Valentine's Day, Feb. 14, with the season set to open on March 31.
  • That coincides with the NCAA basketball tournament affectionately known as "March Madness," which starts March 15-16.
  • The National Hockey League's regular season comes to an end on April 10, paving the way for the start of the Stanley Cup Playoffs.
  • The National Basketball Association ends its regular season on April 12, with the playoffs running into June.
  • And the PGA's Masters Tournament runs from April 7 to April 10.

Indeed, the Super Bowl is really just the kick off to the 2011 championship season. So what better time could there be to talk about sports stocks?

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Buy, Sell or Hold: With its Laser Focus on China, It's Time To Buy McDonald's Corp. (NYSE: MCD)

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Since the start of the global financial crisis in 2007, the economic slowdown that Western nations have experienced has been offset on a worldwide basis by the strong growth that we've seen in the developing markets.

These emerging economies have become the engines of growth in a developed world that's wrestling with widespread overcapacity that spans multiple industries. That's why the emerging markets represent some of the last real growth opportunities for large, multinational companies.

And when it comes to the world's emerging markets, China is the 800-pound … dragon.

In China, the rapid growth in car ownership along with the development of a major-and-growing middle class has led to a change in food consumption patterns in major cities. The old way of doing business is running into a new generation of consumers, with different expectations.

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Speculators Sanctioned Amid Soaring Cotton Prices

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Reacting to a potential squeeze that threatens to drive up cotton prices, the biggest cotton-futures exchange took measures last week to prevent speculators from taking big positions.

The IntercontinentalExchange Inc. (NYSE: ICE), is increasing scrutiny on speculators amid soaring demand that has nearly tripled cotton prices in the last 12 months, threatening the profits of mills, commodity suppliers and apparel producers.

Growing demand for the fiber, particularly from China, has raised fears of shortages this year. Low global stocks and torrential rains in Pakistan and India, the second-biggest grower, as well as recent floods in Australia have added to the concerns.

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2011 State of the Union: Obama's Sputnik Moment Crashes and Burns

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In his State of the Union address, U.S. President Barack Obama said the United States is experiencing another "Sputnik moment." Unfortunately, Obama and all of his pals on Capitol Hill have forgotten that the Sputnik-triggered Apollo space program cost America $190 billion in 2011 dollars. And the "innovations" supplied by two decades of government-sponsored research […]

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Gridlock No Threat to Profitable Growth of China's Auto Market

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China's auto market last year continued the sales surge that helped it oust the U.S. auto market from its top spot in 2009.

Sales of passenger cars, buses and trucks in China rose 46% in 2009 to 13.6 million, beating out U.S. vehicle sales of 10.4 million. The growth pace of China's auto market was the fastest in more than 10 years, according to the China Association of Automobile Manufacturers, and continued to soar in the first six months of 2010 – jumping 30.45% in that time.

While booming auto sales contributed to growth opportunities for automakers like General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F), analysts worried that the drastic increase in vehicles would contribute too much to painful traffic gridlock and wear and tear to aging Chinese infrastructure. The influx of cars on roadways even led Beijing to announce at the end of last year that it would allow just 240,000 vehicles to be registered in 2011, a little more than 33% of the number of new vehicles registered in 2010. The impending limits sparked a buying spree in December, with 30,000 new vehicles registered in one week alone.

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Airline Profits Grounded by Rising Fuel Prices and Bad Weather

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After barely scraping through a two-year recession and a global financial meltdown, the airline industry's struggle to sustain a turnaround is now being threatened by rising fuel prices and nasty winter weather.

Civil unrest in Egypt combined with surging demand have already boosted oil prices by 20% since last June, setting off alarm bells among the nation's carriers. Now, a series of winter storms that began in December has slashed airlines' revenues by tens of millions of dollars.

Most carriers, other than AMR Corp. (NYSE: AMR), made sizable profits for all of 2010, including records for some carriers. But expectations for 2011 are shrinking now that fuel prices have risen and a relentless series of winter storms have forced thousands of flight cancellations.

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Junk Bond Outlook: Why You Should Beware of the High-Yield-Debt Market

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Junk bonds got issued at record rates in 2009 and again in 2010. And that pace has carried over into the New Year.

While the ability to raise money in the less-than-investment- grade bond market indicates that the market is getting back to where it used to be, there are reasons to be worried.

Investors chasing income in the form of high-yield debt – the technical term for junk bonds – are increasingly accepting lower returns and fewer protective covenants, even as they take on increased risk.

Even if you're not a junk-bond investor, it's important to study and understand these recent developments in the high-yield debt market. The reason: They can serve as an early warning signal for trouble to come in the stock and bond markets.

And if you are heavily weighted in junk bonds, now may be a good time to take some profits off the table.

To find out the one move to make to protect yourself from a correction, please read on...

Obama's "Better Buildings" Plan Aims to Fuel Green Energy Development at the Expense of Oil Majors

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President Barack Obama's "Better Buildings" plan to encourage businesses to become more energy-efficient could fuel a renovation boom for years. However, it faces opposition from Republican lawmakers, as it would eliminate tax breaks for oil companies.

The president gave a rough outline of the plan in a speech yesterday (Thursday) at Pennsylvania State University. He claimed that the so-called "Better Buildings Initiative," if implemented, would make commercial buildings 20% more efficient by 2020, thus reducing business owners' energy bills by $40 billion annually.

However, the main sticking point will be how to pay for the tax incentives in the plan. Obama declined to say what the program would cost, but said it would be paid for by eliminating tax breaks for oil companies.

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The Super Bowl Indicator: Everybody's a Winner Come Sunday

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Given their steady intake of beer, buffalo wings, and hot dogs, it may not come as a surprise that diehard football fans are at a higher risk of suffering a heart attack during the Super Bowl.

But before going apoplectic on Sunday, try to take solace in the fact that – regardless of the game's outcome – you're investments are in for a good year.

So says the Super Bowl indicator, anyway.

Laugh it off as a coincidence or superstition if you will, but the Super Bowl indicator has been correct in 35 of the past 44 years – giving it a success rate of nearly 80%. And it was correct 28 out of 31 times between 1967 and 1997- a 90% success rate.

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How to Profit from the Verizon iPhone

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After three years of rumors, the Verizon iPhone has finally arrived.

Well, almost.

Existing Verizon Communications Inc. (NYSE: VZ) customers can pre-order the phone today (Thursday), with the long-awaited device going on sale to all on Feb. 10.

Of course, as soon as Verizon confirmed the existence of the iPhone Jan. 11 speculation turned from when the product would arrive to how many units would sell in the first year. Initial projections from analysts ranged from 9 million to 12 million handsets, although last week an analyst from R.W. Baird & Co. estimated the number of Verizon iPhones activated in the next three months alone could go as high as 25 million. Compare that to the 9 million iPhones AT&T Inc. (NYSE: T) sold in the second half of 2010.

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