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Archives for April 2013

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

How These Companies Get Away with Paying Peanuts in Corporate Taxes

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Even though the United States has the highest corporate tax rate in the world, many American companies pay little or nothing in taxes – and some even get refunds.

That doesn't mean that U.S. companies necessarily cheat Uncle Sam, but the steadily falling amount of corporate taxes paid has clearly helped boost profitability.

A recent analysis by The Washington Post showed that it was typical for companies in the Dow Jones Industrial Average in the 1960s and 1970s to pay federal taxes that were between 25% and 50% of their global profits.

Today, most big U.S. companies pay half that.

A study by NerdWallet of the 500 biggest U.S. companies last fall showed that while the statutory corporate tax in the U.S. is 35%, the actual rate paid – not the amount companies set aside for taxes – is down to an average of 13%.

According to the NerdWallet data, 20% of the top 500 U.S. companies paid nothing in corporate taxes in 2011, and 42% paid between 0% and 15%.

The discrepancy has led some in Washington to call for corporate tax reform, which many U.S companies actually support – but mainly because they'd rather pay even less.

"We need to take steps to make our tax system more competitive and better aligned with the rest of the world by undertaking comprehensive tax reform that will reduce the corporate tax rate," Bob McDonald, CEO of The Procter & Gamble Co. (NYSE: PG), said in a statement released before a meeting of top U.S. CEOs with President Barack Obama in November.

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Adjusted for Inflation, Here's Where the "Real" Dow is Now

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The economy may be sluggish, and the deficits out of control, but you could never tell it from the stock market.

Thanks to Ben Bernanke, the markets are at all-time highs.

But before you pop the champagne, you should know that there's a big difference between "nominal" and "inflation-adjusted" numbers.

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Commercial Metals' Profit Dips in 2Q – Analyst Blog

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Commercial Metals Company (CMC) reported earnings of 4 cents per share in second quarter fiscal 2013 (ended Feb 28), a decline from 25 cents per share recorded a year ago. Earnings also missed the Zacks Consensus Estimate by 16 cents. Profit slid roughly 84% year over year to $4.6 million. Challenging conditions across the overseas […]

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Bear of the Day: Carnival (CCL) – Bear of the Day

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With discretionary spending surging higher, many investors are looking to consumer plays, such as those in the vacation space, for big gains. However, the entire segment isn’t a buy, as there have been some significant problems with a few big names in the space as of late. For example, for anyone looking to take a […]

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Why Not All Good Companies Are Among the Best Stocks to Buy

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Sometimes it's easy to mislabel fantastic companies as great stocks to buy, but the two attributes don't always go hand in hand.

That's because sometimes these great companies watch their share prices climb faster than the underlying fundamentals.

This is often the case with companies/brands that are a big hit with consumers, like Lululemon Athletica Inc. (Nasdaq: LULU) and Chipotle Mexican Grill Inc. (NYSE: CMG).

Since these companies are overpriced, they are usually most vulnerable to a market correction.

Investors should sweep their portfolios now to make sure they aren't holding any of these "high-risk" stocks.

To identify them, investors should look at the price/earnings ratio and price/earnings/growth ratio of the companies they hold.

High P/E and P/E/G ratios often indicate companies whose share prices have been bid up to a point that is no longer justified by fundamentals. The companies themselves might be good investments, but not at the current share price.

Here are two companies that fall into this category right now.

This Little-Known Indicator Says Stocks Should Double

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With the markets breaking all-time highs last week, it begs the question of just how high they can go.

At 1,569 points the bears would say at this point the S&P 500 is completely overdone. With a sluggish economy and a growing federal deficit, you might be prone to believe them.

But there is a little-known indicator that became very fashionable between 1982-2007 that says something else entirely. Noted for its accuracy over that period, it actually suggests that stocks should double.

It's called the "Fed Model."

Buy, Sell or Hold: Is Coca-Cola Still the "Real Thing" For Investors?

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Suffice it to say, Coke has been a big part of our culture for over 100 years.

When I was growing up I wasn't shy about shaking a malfunctioning vending machine whenever my craving for an icy cold Coke kicked in. 

But lately, have you noticed you are more likely to grab a Starbucks coffee for your caffeine fix? 

Or maybe you are more inclined to pick up a sports or energy drink when you are on the go.  Better yet, as you become more health conscious, it's a juice or a fruit smoothie that does the trick.

The good news is that the Coca-Cola Company (NYSE: KO) has "matured"  right along with you and is trying to use its status as the most recognized brand in the world to deliver new products to its thirsty customers.

That's one of the reasons I'm so bullish about Coke these days. But it's not the only one…