Archives for April 2013

April 2013 - Page 14 of 21 - Money Morning - Only the News You Can Profit From

Companies Race for Profits with Floating Liquefied Natural Gas (FLNG)

Recently two of the world's largest energy companies announced they were joining to develop a record-breaking liquefied natural gas (LNG) project – one that could deliver huge profits for the companies and investors.

Exxon Mobil Corp. (NYSE: XOM) and BHP Billiton (NYSE ADR: BHP) announced earlier this month they were forming a joint venture to build the biggest floating LNG, or FLNG, facility ever. It'll be located off the northwestern shore of Australia.

FLNG is the industry's answer to accessing supplying much needed LNG to energy-hungry Asia, but trying to avoid the increasing costs of onshore plants in Australia.

An increasingly number of companies plan to invest in FLNG over the next few years.

Energy research firm Douglas-Westwood recently reported that global spending on FLNG projects will reach $47.4 billion between 2013 and 2019. About $28 billion will go to FLNG liquefaction spending, and $19 billion on import terminals.

"For more than 30 years FLNG export has been an ambition of the offshore industry, but it is now well on the way to reality," said report author Murray Dormer.

2013 Earnings Season: Forget Alcoa; Track These Real Bellwethers

At the start of every earnings season, investors typically turn to Alcoa Inc. (NYSE: AA) – the first company in the Dow Jones to report earnings each quarter – as a market bellwether.

But Alcoa is no longer a reliable market indicator.

"With this upcoming earnings season, we wouldn't put nearly the same confidence [in Alcoa] that we would just five or six years ago," Ryan Detrick, a Cincinnati-based analyst at Shaeffer's Investment Research, told Bloomberg News. "The company's results now predict the direction of the market about as well as a coin flip."

In fact, Money Morning Global Investing Strategist Martin Hutchinson said Alcoa, the largest producer of aluminum in the U.S., should never have been used as an economic indicator.

"I don't think Alcoa was ever a very good bellwether; it just reports first," Hutchinson said. "The aluminum cycle tells you something about manufacturing conditions, but manufacturing is a small part of the economy these days."

So if not Alcoa, then what stocks should investors pay attention to this earnings season?

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Goldman Sachs Is Manipulating Gold Prices Right Before Your Eyes

If you want a lesson on how to manipulate gold prices, you need only look at what Goldman Sachs Group Inc. (NYSE: GS) has been doing over the past few months.

Goldman set the table by predicting a turn in gold prices back in December 2012, which no doubt contributed to the precious metal's 5% decline in the first two months of the year.

At the end of February, Goldman issued a research report that said the big Wall Street bank had soured on the yellow metal, and dropped its three-month target for gold prices from $1,825 an ounce to $1,615, its six-month forecast from $1,805 to $1,600, and its one-year outlook from $1,800 to $1,550.

Then, just yesterday (Wednesday), Goldman doubled down on its negative outlook for gold prices.

The bank's new targets for gold prices are $1,530 in three months, $1,490 in six months and $1,390 in one year.

The double whammy – two downgrades in two months – had its intended effect, as gold prices fell 2%, to $1,558.80, after Goldman released its report. It was the biggest single-day percentage drop for gold in nearly six months.

"If you've ever suspected gold prices are being manipulated, you're not alone – and you're right, they are," said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

The proof is right in front of us.

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Ruby's 3Q Earnings In Line, Revs Miss - Analyst Blog

Ruby Tuesday Inc.’s (RT) adjusted earnings of 10 cents per share in the third quarter of 2013 matched the Zacks Consensus Estimate but were much lower than the year-ago earnings of 22 cents per share.  Earnings suffered mainly due to lower revenues. Revenues in the quarter slipped 4.3% year over year to $307.4 million. Revenues […]

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This Small-Cap Tech Stock Is Running Circles Around Oracle

For years, Larry Ellison's company has made some of the best software on the planet.

With a market cap of $155 billion, Oracle Corp. (Nasdaq: ORCL) has also become one of the industry's leading buyout shops, snapping up dozens of companies in the past five years alone.

But while Oracle has been expanding its software empire, it was late to latch onto one of the hottest new tech trends in many years.

I'm talking about cloud computing.

And now I'll bet you any amount of money Larry Ellison wishes he had learned how to tap into the power of the cloud years earlier.

Here's why.

The respected research firm Forrester predicts the cloud computing industry is going to increase from about $41 billion in 2011 to $241 billion in 2020.

That's an increase of roughly 487%over a nine-year period.

The problem for Ellison is that a small-cap tech stock I've discovered has beaten him to the punch.

In fact, I'd be willing to say at this point it's running circles around him.

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Every Gold Coin Has Two Sides

Just as every coin has two sides, every data point that doesn't meet expectations usually has an upside somewhere.

For instance, although gold prices have fallen with the strengthening U.S. dollar, the yellow metal is appreciating in Japanese yen. So when negative news about the economy came out this week, along with the U.S. Labor Department reporting that the country added only 88,000 jobs in March, investors found reasons to be encouraged.

For one, the Federal Reserve is apt to maintain its stimulative easing course and keep interest rates low.

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IPO Calendar 2013: This Could Be the Biggest Week of the Year

The third week of April is going to be a busy one for our IPO calendar. Six companies will be making their debut including some of the most anticipated offerings of the year so far.

The aftermarket has remained strong with recent offerings like Pinnacle Foods (NYSE: PF), which appreciated more than 20% following the IPO. As long as the equity markets remain stable and pricing in the aftermarket remains solid we should continue to see strong demand from institutional investors for IPOs.

Let's take a look at what investors have to watch in the IPO market next week.

Obama Budget 2014 Busts Open the Middle-Class Piggy Bank

With a little sleight of hand in how the government calculates inflation, the Obama budget 2014 released today (Wednesday) proposes to both raise taxes on the middle class and reduce future payments to Social Security recipients.

That's quite a reversal coming from a Democratic president who had promised to protect the American middle class.

In the past, U.S. President Barack Obama has focused his desire to raise more federal revenue on the rich, who he has repeatedly said "need to pay their fair share."

But the reality is that the wealthy citizens of the United States don't have nearly enough money – even if all of it were taxed – to solve America's many fiscal problems.

Practically speaking, there are only two ways to attack the trillion-dollar deficits that have plagued the country: massive spending cuts or massive tax hikes on the middle class.

The Obama budget 2014 offers some token reductions, but putting the middle class in the budget crosshairs is a new and ominous White House strategy.

"While it's not my ideal plan to further reduce the deficit, it's a compromise I'm willing to accept," President Obama said on Saturday in his weekly address.

Oh, and don't expect much resistance from the Republicans on this, despite their historic opposition to tax increases. Last year, it was Republican leaders talking up the need to adjust the Consumer Price Index (CPI).

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Best Investments: How These Investors Got 20% Annual Gains for a Decade

When billionaire and corporate raider Carl Icahn gets involved in a stock, the share price often skyrockets – known as the "Icahn Effect," or "Icahn Lift."

The activist investor's recent involvement in Dell Inc. (Nasdaq: DELL), Herbalife Ltd. (NYSE: HLF) and Transocean Ltd (NYSE: RIG) have propelled shares higher.

That's why investors often follow his lead into these stocks, hoping to get a piece of the resulting gains.

But there's another way to profit from Icahn's investing prowess. Investors who took this route have scored 20% annual gains for a decade.

We're talking about investing in Icahn's $6 billion master limited partnership, Icahn Enterprises LP (NYSE: IEP).

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