Archives for January 2013

January 2013 - Page 14 of 20 - Money Morning - Only the News You Can Profit From

This Profit Play Builds "Hunter" Drones To Counter the Chinese Sub Threat

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I'll never forget my conversation with defense-industry leader Bob Beyster.

Armed with a doctorate degree and decades of experience, Beyster ranked as one of the U.S. defense industry's true visionary thinkers. That came through loud and clear when I interviewed him for Signal magazine back in early 1999.

Beyster could talk with ease about everything from the impact of the dot-com boom of the 1990s to the future of information technology at the Pentagon.

This University of Michigan-educated scientist was a walking, talking encyclopedia of global tech trends. He gave me loads of insight into the major shifts that would reshape our world far beyond defense – from changes in telecommunications to how the Web would slash business costs for thousands of global firms.

With fond memories of that chat, I have been a faithful follower of the groundbreaking company Beyster founded some 35 years ago.

I'm referring to Science Applications International Corp. (NYSE: SAIC), now headquartered in McLean, VA.

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Don't Miss This Sector in 2013

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If there's one place you want to be this year, it's in semiconductor stocks.

After snoring its way to a 5% decline in 2012, the chip sector is going to look more like Flash Gordon than Rip van Winkle in the New Year.

Projections are calling for across-the-board revenue growth of as much as 10% – and some parts of the chip market could advance at three times that already-hefty pace.

Double-digit growth in a slow-growth economy is pretty great all by itself. But the fact that semiconductor stocks have actually been negatively correlated to the broader stock market means this is an investment that could also serve as a bit of a hedge against a drop in the Standard & Poor's 500 Index.

So let's take a little tour of the latest forecasts.

Our first stop will be accounting-and-consulting firm KPMG LLC.

In its latest Global Semiconductor Survey, which it conducts annually, KPMG found that three-quarters of the semiconductor executives it polled are expecting revenue growth this year. Two-thirds expect to hire more workers (up from 48% in last year's survey) and 71% say annual industry profitability will increase in 2013.

The survey, conducted in September, polled more than 150 sector leaders – primarily senior-level executives – at device, foundry and "fabless" manufacturers. Half of those companies have revenues of $1 billion or more.

The execs' consensus viewpoint: The semi sector will experience a recovery that builds up steam – especially heading into the second half of the year.

Let's consider a couple of other predictions.

How to Play the Resurgence in Oilfield Services

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Whenever a recovery begins in crude oil prices and natural gas, it always begins upstream, usually very far upstream. As I have noted before, this is signaled in the oilfield services (OFS) segment of the energy sector.

My tracking index for OFS companies currently follows 63 providers of early field development and preparation. These include everything from initial geological surveys, through seismic, analysis, test and exploratory wells, to pad preparation, drilling, well completion, maintenance, support, and workover rigs.

Before the improvement is recorded by the operators – the firms actually producing the oil and gas – we should expect a spike to take place in OFS. These are the providers who will experience a push before anything is extractable. Normally, indications of a recovery occur in OFS first.

It appears the recovery is happening again this time. All 63 stocks on my tracking list are up for the week (by an average of 4.5%) and 60 are up for the month (with an average rise of over 14% for all 63).

As we go forward, there's one strategy you should use to play this recovery…

Get in the Ground Floor of This $1 Trillion Industry

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How many times have you studied the stock charts of Google Inc. (Nasdaq: GOOG), Apple Inc. (Nasdaq: AAPL) or Amazon.com (Nasdaq: AMZN) – and wished you could travel back in time to become an early stage investor in just those sorts of king-making companies?

We can't, of course, but I can offer the next best thing: I can tell you about the brand-new industry where the next stock like this will likely come from.

I'm talking about 3D printing.

Folks who've been following my work know that I've been predicting this sector's emergence for some time. Back in March, I told readers of our sister newsletter Money Morning that 3D printing was a $1 trillion industry in the making. In October, in a note to all of you, I followed up with a roundup report on the newest breakthroughs.

In every piece I've written, my key message was always the same: 3D printing will give tech investors the next real shot at windfall profits.

It's already playing out just as I predicted. But even I was surprised at how much money investors made off this segment last year.

Nissan Starts Producing 2013 LEAF - Analyst Blog

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Nissan Motor Co. (NSANY) announced that it has started the production of all-electric 2013 LEAF at its Smyrna, Tenn., plant. The 2013 model year LEAF will be produced together with the company’s gasoline-powered products in the plant. Recently, Nissan opened its largest lithium-ion automotive battery plant in Smyrna, which is adjacent to the LEAF assembly […]

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Apple is Really Four Fortune 500 Companies Rolled Into One (Nasdaq: AAPL)

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Apple Inc. (Nasdaq: AAPL) is certainly no stranger to impressive numbers. But even if Apple were split into four separate companies, each would be impressive in its own right.

Apple's four major divisions – the iPhone, the iPad, the Mac, and the iTunes Store – rake in so much revenue each that they would rank individually in the top half of the Fortune 500.

The iPhone business, with fiscal year 2012 revenue of over $80 billion, would rank 29th in the Fortune 500, ahead of such tech titans as Microsoft Corp. (Nasdaq: MSFT), Amazon.com (Nasdaq: AMZN) and Google Inc. (Nasdaq: GOOG).

The $32 billion iPad business is no slouch either: It would rank 95th – bigger than Time Warner Corp. (NYSE: TWX).

It's hard to believe that all of AAPL had revenue of just $6.21 billion in 2003.

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Gold Prices: Don’t Let Faber Scare You

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After hitting its 12th straight year of new highs, gold prices got off to a bumpy start in 2013.

"Dr. Doom" Marc Faber even came out Tuesday with a reduced price prediction for gold.

In a CNBC "Squawk Box" interview, Faber said, "I don't think [gold] will go up right away, and we maybe have a correction of 10 percent or so on the downside."

Faber had also estimated a gold price range in his JanuaryMarket Commentary of "… perhaps down to between $1550 and $1600."

But any gold price correction would be a short-term move. Even Faber admitted central bank action is a reason to bet on higher gold prices for the long term.

That's why investors should look at any price correction in gold as an opportunity to stock up.

By Thursday, the yellow metal jumped 1% after the European Central Bank left interest rates the same and the euro rose against the dollar. The February gold contract jumped $20.90 (1.3%) to $1,676.40 per troy ounce.

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Investing in 2013: Don't Ignore this Huge Shift in China

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When looking for hot spots for investing in 2013, investors must consider this major trade shift happening in China.

You see, China is the world's largest consumer of grains. That's not surprising considering China's population is 1.3 billion, with an additional 8 million children born each year.

China historically has been largely self-sufficient in most grain categories, rarely importing products like corn and wheat.

But that is changing

China is becoming a net importer of grains.

As Rabobank (one of the largest lenders in global agribusiness) analyst Erin FitzPatrick told AgriMoney, "This is something that the market should be looking at."

Here's why.

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Stock Market Today: Can S&P Nudge Closer to its All-Time High?

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The stock market today (Friday) will try to continue its impressive rally after the Standard & Poor's 500 Index closed at a five-year high Thursday.

The S&P 500 closed at 1,472.12, about 93 points away from its all-time high of 1,565 hit in October 2007 and its highest close since December of that year.

By 1 p.m., the S&P 500 was down just over 2 points, and the Dow was up 4 points, or 0.04%.

While the stock market today fights for a continued climb, here are companies investors should be eyeing.

Why Warren Buffett is Wrong About U.S. Banks

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Warren Buffett has made billions since the financial crisis by investing in U.S. banks, including Bank of America (NYSE: BAC),

Wells Fargo & Co. (NYSE: WFC) and Goldman Sachs Group Inc. (NYSE: GS).

The Oracle of Omaha has even guaranteed the safety of U.S. banks.

"The banks will not get this country in trouble, I guarantee it," Buffett told Bloomberg News. "Our banking system is in the best shape in recent memory."

Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A, BRK.B), says U.S. banks are safe because they have increased capital ratios, sold risky assets, cut unnecessary jobs and bolstered their balance sheets.

But while the U.S. banking system might be in better shape than it was five years ago, it is nowhere near fixed. And banks could cause another crash.

Here's why.

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