Bitter results for the recent quarter indicate more troubles ahead for this agribusiness company. BUNGE LTD (BG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
Archives for February 2013
February 2013 - Page 5 of 17 - Money Morning - Only the News You Can Profit From
When It Comes to Gold, Stick to the Facts
Gold dipped below $1,600 last week, falling to a six-month low, much to the chagrin of gold investors.
I find the timing of the correction peculiar, given the G20 Finance Ministers Meeting taking place over the weekend. There's been a growing debate over Japan's move to devalue its currency to stimulate growth, with reaction from the G-7 leaders stating that "domestic economic policies must not be used to target currencies," reports Reuters.
While the G-7 tried to legitimize the currency debasement with this statement, in reality, investors seem to be able to see through to the real motivations.
The main reason the mainstream media gave for the correction in the yellow metal is hedge funds' selling of gold late last year. According to quarterly filings, Hedge Fund Manager George Soros sold half of his holdings in the SPDR Gold Trust ETF (GLD) in the fourth quarter of 2012.
As Volatility Hits New Lows, It Could Be Time to Sell
The average daily price volatility of stocks has fallen more than 60% since the beginning of 2013. It's the biggest straight-line drop in some 82 years.
A lot of investors are rejoicing. After all, stocks have risen an average of 17% a year when volatility is as low as it is right now, Bloomberg reports.
There is, however, a dark side to low volatility. Namely, it tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, and at other key turning points over the past 100 years.
Today, I'm going to talk a bit about what low volatility means for you in terms of upside, and also show you how to protect yourself in a downslide.
Let's start with the concept of average daily volatility itself.
Two Dividend Stocks to Buy for Increasing Payouts
Following a banner year for dividend stocks in 2012, 2013 is delivering more of the same as an increasing number of companies are either initiating cash dividends or boosting existing payouts.
From Feb. 1 to Feb. 8, at least 15 companies increased their cash dividends. That list included familiar names such as Dow component 3M Co. (NYSE: MMM), Allstate Corp. (NYSE: ALL) and Archer Daniels Midland Co. (NYSE: ADM), a new addition to Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) equity portfolio.
It was more of the same when 14 companies raised their payouts in the week ending Feb. 15. That list includes Comcast Corp. (Nasdaq: CMCSA), PepsiCo Inc. (NYSE: PEP) and United Parcel Service Inc. (NYSE: UPS).
With all these familiar blue chips delivering ever-increasing dividends, it is not surprising that some stocks of the same caliber go overlooked by investors. Here are a couple of those unheralded names investors on the hunt for dividend stocks should become more familiar with.
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The Pound Gets Pounded
As the global currency war intensifies, the majority of attention has been paid to the 17% fall of the Japanese yen against the U.S. dollar over the past few months.The implosion has given cover to the sad performance of another once mighty currency: the British pound sterling.
But in many ways the travails of the pound is far more instructive to those pondering the fate of the U.S. currency.
Japan has a unique economic and demographic profile which makes it a poor stalking horse. Newly elected Prime Minister Shinzo Abe and the Bank of Japan have clearly and forcefully committed Japan to a policy of inflation at any cost.
Even in a world of serial money printers their plans stand out as exceptional. Britain, on the other hand, is charting a more conventional course to the same destination.
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The UK government, under conservative Prime Minister David Cameron and Chancellor of the Exchequer George Osborne, has succeeded in bringing marginal discipline to their budgetary imbalances.
From 2009 to 2012, British government expenditures rose a total of just 1.6%, which was far below the official pace of inflation. (In contrast, U.S. federal spending grew by 7.9% over that time period). Since 2009 the British have kept their debt-to-GDP ratio lower than America's and have cut into that metric at a faster rate.
The Best Ways to Profit from Food Inflation
Though tame through most of last year, food inflation has begun to surge again in 2013 – just as Money Morning Global Resources Specialist Peter Krauth predicted it would.
"Food inflation hasn't reared its head for some time, and I think it's about to start making headlines again before long," Krauth wrote in a Jan. 18 note to subscribers of his Real Asset Returns investment service.
Sure enough, an inflation report yesterday (Wednesday) from the Labor Department showed that the biggest increase in January prices came in the food category.
Food prices – for both groceries and food eaten at restaurants – rose 0.7% in January, compared with December, accounting for more than three-fourths of the increase in the Producer Price Index (PPI).
The biggest driver of food inflation in January was the cost of vegetables, which rocketed 39%, withbroccoli, cauliflower and lettuce increasing the most.
The U.S. Department of Agriculture's Economic Research Service is projecting food prices in 2013 will increase 3% to 4%, an annual increase the agency says is above the historical average.
The ERS said it expects animal-based food products (mostly meats) to be hit hardest, with cereals and bakery products also seeing above-average price increases.
The return of food inflation to the U.S. should come as no surprise, as it has become a worldwide trend over the past decade.
The Food Price Index developed by Food and Agriculture Organization of the United Nations has more than doubled from 97.7 in 2003 to 209.8 now following a decade of stability. (The index stood at about 102 in 1993.)
What Every Investor Should Know About the End of QE
Equity markets around the world yesterday expressed their distaste for the possible end of the Federal Reserve's quantitative easing (QE) policy.
Share prices tumbled from New York to Tokyo. Even resource-rich Australia and emerging markets, including China, saw shares decline following the release of the minutes of last month's Federal Open Market Committee meeting.
What upset the markets was a discussion at the January FOMC meeting about when and, more importantly, how to end the current QE policy.
As someone put it on Bloomberg Radio yesterday, "Would the markets have been happier if the FOMC was ignoring the issue of how to end QE?"
To understand how ending the QE policy might affect the economy and markets, investors need to understand how QE operates.
Retail Stocks to Buy: Time to Profit from Lifestyles of the Rich
CNBC stock picker Jim Cramer calls it a "Great Gatsby market," the growing divide between the rich and the rest of us.
And you can profit from it – by buying stocks of retailers that cater to the rich.
That's because these luxury retailers don't feel the pinch of economic hardships among their rich customer base nearly as much as lower-end retailers do.
Cramer says the rich can afford to buy expensive items, while much of the rest of the population struggles to get by and has less discretionary income now, partly because of the recent increase in the payroll tax and soaring gas prices.
"This is a Great Gatsby market; the rich are not like us," Cramer says.
Even if the stock market slows this year, analysts don't expect that to reduce spending among shoppers at high-end retail stores.
Investing in MLPs: Three Set to Soar on Shale Expansion
If you're one of the millions of investors trying to find decent yielding income investments, there's one place you should be looking — Master Limited Partnerships (MLPs).
That's because if you play your cards right you can pocket a cool 6% to 10% or more from investing in MLPs – while the yield on the broad market barely cracks 2%.
As an added bonus, 80% to 90% of distributions from MLPs are tax-free until you sell.
As America's newfound shale formations spew forth million of barrels of oil and gas an infrastructure boom will be needed to store and ship it.
And a few select MLPs will be primed to cash in.
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Bull of the Day: Valmont Industries (VMI) - Bull of the Day
Forging steel into growth for telecoms, utilities, and farmers LINDSAY CORP (LNN): Free Stock Analysis Report MRC GLOBAL INC (MRC): Free Stock Analysis Report VALMONT INDS (VMI): Free Stock Analysis Report SPDR-INDU SELS (XLI): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research