Category

Buy Sell Hold

Don't Miss the Stock Breakout for Ag Leader Monsanto Co. (NYSE: MON)

By , Money Morning - • Print | Email

Higher food prices aren't disappearing any time soon – meaning it's time to revisit one of the best "Buys" in the agricultural industry – Monsanto Co. (NYSE: MON).

I first called Monsanto Co. a "Buy" in October 2010, when I told you the company had started a rebound that would pay off for investors. The stock was trading at $56 a share and down 34% for the year – compared to an 11% gain in the Standard & Poor's 500 Index.

Since my recommendation, Monsanto has reversed its downward trend and is up more than 23% — almost triple the S&P 500's 3.4% rise. The stock hit a 52-week high of $77.09 on July 25 before recent volatility dented its comeback. Monsanto stock closed Friday at $69.77.

If you missed getting a position on Monsanto the first time around, it's not too late. This innovative global Ag leader is still taking off.

You see, St. Louis, MO-based Monsanto is the largest producer of seeds to commercial farms. With food prices expected to increase 4% next year, and global reserves dwindling, demand for Monsanto's products will rise.

This means Monsanto should see record-high seed prices and margins.

Not only that, Monsanto has a competitive edge: It's a leader in creating genetically modified seeds that help crops reach levels of productivity unimaginable a few decades ago.

So it's time – again – to buy Monsanto Co. (**) – especially if you didn't get a chance to pick it up last year. If you already have shares, I suggest you continue holding them and possibly look to add to your position.

To continue reading, please click here…

To continue reading, please click here...

Chesapeake Energy Corp. (NYSE: CHK) Could Be the Sector's Best Takeover Target

By , Money Morning - • Print | Email

When you hear the term "takeover target," you typically think of a small biotech or technology company – but that's not the case here.

I've found a company that logged $1.4 billion of adjusted EBIDTA and $1.2 billion of operating cash flow. And it just happens to be the second-largest natural gas producer in the United States.

I'm talking about Chesapeake Energy Corp. (NYSE: CHK) – a company that has increased production for 21 consecutive years.

In addition to being the second largest U.S. gas company, Chesapeake is the No. 1 horizontal-well driller in the world, and the most active new-well driller in the United States. The company holds a large portfolio of shale properties, and it plans to triple profitable liquids production.

Even aside from the fact that the company is an attractive takeover target, Chesapeake has enough going for it that it deserves a place in our portfolio.

So it's time to buy Chesapeake Energy Corp. (**).

Read more…

Read more...

Potash Corp. of Saskatchewan Inc. (NYSE: POT) Is Reaping the Rewards of a Global Ag Boom

By , Money Morning - • Print | Email

Potash Corp. of Saskatchewan Inc. (NYSE: POT) is the world's largest fertilizer company by capacity, which means it's perfectly positioned to capitalize on the current global agricultural boom.

Not only are populations growing, but middle class consumers in emerging markets are developing a taste for meat as well. This insatiable hunger for more choices has resulted in greater demand for corn-fed livestock, which is taking a hefty chunk out of crop yields.

And when you include new biofuel demands, crops are now being used for feed, fodder and fuel.

Of course, there's only so much arable land in the world, so fertilizer has become one of the primary drivers of increased crop yields.

When it comes to capitalizing on this evolving trend, Potash Corp. has the size and global diversity to dominate. That was clearly evidenced when the company reported record earnings in the second quarter.

So it's time to buy Potash Corp. of Saskatchewan Inc.(NYSE: POT) (**).

To continue reading, please click here...

Alliance Bernstein Holding LP's (NYSE: AB) 9.4% Dividend Yield is Too Juicy to Pass Up

By , Money Morning - • Print | Email

In a market denoted by volatility, stocks with a high dividend payout typically come at a premium, but in the case of AllianceBernstein Holding LP (NYSE: AB) we have a bargain.

This is a company that has broad global exposure, no debt to service, and a 9.4% dividend yield.

Better still, AB stock has been beaten down of late, which means we have the opportunity to snap up this gem at a bargain-basement price.

For patient investors looking for cash flow, it doesn't get any better than this. So it's time to buy AllianceBernstein Holding LP (NYSE: AB) (**).

Why AllianceBernstein Holding LP (NYSE: AB) Is a Buy

AllianceBernstein isn't a household name but it's one of the largest asset managers in the world. The $1.5 billion company is the end result of Alliance Capital Management acquiring Sanford C. Bernstein in 2000.

The company has offices in New York, London, Frankfurt, Tokyo, Hong Kong, Sydney and Chicago, giving the company a truly global reach.

Another great thing about AllianceBernstein is that it pays 100% of its earnings per share to investors. That's why the stock currently sports a yield of 9.4%.

To continue reading, please click here...

A Cyclical Shift in Energy Prices Creates Opportunity for San Juan Basin Royalty Trust (NYSE: SJT)

By , Money Morning - • Print | Email

If you're looking for higher yields than what the U.S. Treasury market, or for that matter your local bank's CD rates, are paying, San Juan Basin Royalty Trust (NYSE: SJT) is an interesting alternative source of cash flow.

Currently the company is yielding about 6.3% on an annualized basis. This yield is generated from the overriding royalties the trust owns on current natural gas production.

Additionally, the company is poised to profit from a seasonal shift in energy prices.

You see, San Juan Trust has the rights to 75% of the revenue generated by an oil-and-gas property owned by Burlington Resources Oil & Gas Company LP, a subsidiary of ConocoPhillips (NYSE: COP). It also has royalty interests in 119,000 net producing acres located in northwestern New Mexico's San Juan Basin.

The cash flow from these properties is returned to investors once the trust's costs and capital budgets are deducted.

This makes the company compelling to me as I review its mix of assets and yield, as well as the seasonality of natural gas at this point in the year. I love to buy yield that can appreciate in price and quantity, with a bull market in the out-of-favor underlying asset.

In simple terms, if natural gas goes up in value, so should the dividend rate paid per share of the trust. So investors will enjoy a double gain if the stock rises: One in share price, another in cash flow. This offers you a great way to play natural gas without using margin or futures.

To continue reading, please click here…

Read More…

Why It's Time to Buy Google Inc. (Nasdaq: GOOG)

By , Money Morning - • Print | Email

By announcing its plans to buy Motorola Mobility Holdings Inc. (NYSE: MMI) yesterday (Monday), Google Inc. (Nasdaq: GOOG) is forcing me to make a statement that I never thought I would make: It's time to buy Google.

The $12.5 billion deal will see Google acquire the phone-making half of the Motorola Inc. spin-off that took effect in January. Google is paying $40 a share in cash – about a 63% premium to Motorola Mobility's closing price on Friday. The deal – which Google says will help it "supercharge" its Android smartphone business – will close late this year or early in 2012.

I used to look at Google as the next Microsoft Corp. (Nasdaq: MSFT). But Google has achieved a status that Microsoft shot for – and missed: It's become an online leader and a factor in the everyday life of consumers. Google also has massive growth potential available, and hasn't quit trying to grow.

And that's a good reason – perhaps the best reason – to own Google today and into the future.

Google's purchase of Motorola Mobility will showcase this potential. It positions Google to pair Motorola smartphones with its Android software and compete against iPhone-maker Apple Inc. (Nasdaq: AAPL).

However, Google's new purchase does a lot more than dangle a bigger slice of smartphone market share – and this reason is why I finally decided Google is a "Buy." (**).

Motorola Mobility: All About the Patents

The game-changing benefit for Google in the Motorola Mobility deal is the intellectual property Google is picking up. We are talking about 17,000 patents in this purchase.

A stronger patent portfolio allows Google to reduce royalty costs by using cross-licensing agreements with handset makers. And it protects the Android smartphone market from getting slammed with patent fees (and lawsuits) as sales continue to climb.

The number of Android-software-powered phones jumped 300% last quarter.

Motorola Mobility's patent portfolio will enable Google to move to hardware design for its Android phones. That will give Google both the phone operating system and the intellectual property to act as a gatekeeper in the mobile space.

To continue reading, please click here...

Kraft Foods Inc.'s (NYSE: KFT) Spin-off Strategy Will Unlock Value for Investors

By , Money Morning - • Print | Email

Kraft Foods Inc. (NYSE: KFT) is about to unlock a lot of value for patient investors.

I chose Kraft Foods as my first "Buy, Sell or Hold" pick of 2011 as a hedge against inflation. At the time the world was looking at food inflation caused by fires in Russia, rains in Australia, and droughts in China.

The move paid off. In a market that had dropped by as much as 20% in the last two weeks, Kraft is still up about 8% since my recommendation.

Kraft is the very definition of slow, stable value, and in times of fear and uncertainty, nothing is more defensive than food. That is exactly why I recommended the stock at the beginning of the year, and why I believe it's a "Hold" today.

But that's not all. A recent development has given investors yet another reason to hold on to Kraft.

Kraft Foods – which is currently the second-largest global-food company, behind only Nestle SA – announced on Aug. 4 it was going to split into two.

It's going to separate its global snacks operations from its North American grocery business, creating two independent companies.

One company will include its European and developing markets units and will hold brands like Oreo cookies and Cadbury chocolates; it will have revenue of $32 billion.

Meanwhile, the North American grocery business, with revenue of $16 billion, will include such brands as Oscar Mayer processed meats and Kraft macaroni and cheese.

The news was a surprise since Chief Executive Officer Irene Rosenfeld – who favors big companies – said just 18 months ago that "scale is a source of great competitive advantage."

To continue reading, please click here...

Be a Gold Digger with Compania de Minas Buenaventura SA (NYSE ADR: BVN)

By , Money Morning - • Print | Email

Compania de Minas Buenaventura SA (NYSE ADR: BVN) is the largest publicly traded precious metals company in Peru.

As such, it stands to profit handsomely from the record high gold prices we're now seeing on a daily basis.

Gold prices hit another intraday record yesterday (Wednesday) topping $1,801 on the Comex division of the New York Mercantile Exchange (NYMEX). Gold prices rose to new record highs on both Monday and Tuesday as well.

Indeed, gold has been on a bull-run since 2007, but Standard & Poor's U.S. credit rating downgrade and the escalating sovereign debt crisis in Europe have the yellow metal continually testing new highs.

For instance, the European Central Bank (ECB) on Tuesday was forced to intervene and buy Italian and Spanish bonds as yields ticked higher. The cost for Italy to continue to issue new public debt, or even to roll its current pile, had reached the same levels that caused Greece, Ireland and Portugal to seek government support.

It's important to note that fear stemming from European and U.S. debt isn't just pushing individual investors into precious metals. It's also driving central banks around the world to flee fiat currencies for hard physical assets – especially gold.

Indeed, global gold sales are climbing as more countries stock up on the yellow metal.

South Korea spent more than $1 billion over the past two months on its first gold purchases in more than a decade, doubling its national holdings. The Bank of Korea said even though prices have already hit historic highs, it was the right time to diversify its foreign reserves.

"South Korea's central bank seems a little late to the party, but gold investors should continue to expect price support as central bankers around the world are underinvested in the yellow stuff," Sean McGillivray, head of asset allocation at Great Pacific Wealth Management, told Reuters.

You know it's bad out there when central banks are buying gold at record highs, with expectations that other central banks will be adding to their own hoards as the risk of continued devaluation of the U.S. dollar continues.

To continue reading, click here...

Buy, Sell or Hold: Now's Not the Time to Connect to LinkedIn Corp. (NYSE: LNKD)

By , Money Morning - • Print | Email

Linkedin Corp. (NYSE: LNKD) made a lot of headlines this summer with one of the most successful initial public offerings (IPOs) since the dotcom bubble.

However, that IPO has left the company slightly overvalued. At current levels LinkedIn has a market cap of almost $10 billion and is trading at more than 30-times 2010 sales. And while the company has guided third-quarter and full-year revenue higher, it also has warned that it won't be profitable in 2011.

That's not to say LinkedIn doesn't have some real advantages – it does. The company has performed very well in some areas and operates in an attractive niche. But it's also facing some serious headwinds that include market saturation, pressure from short-sellers, and low revenue expectations.

For those reasons, LinkedIn is a "Hold" – at least until its share price more closely aligns with its fundamentals.

A Closer Look at LinkedIn

Let's look at the positives first.

LinkedIn has $106 million in cash and no debt. The company's second-quarter revenue more than doubled from last year to $121 million. Revenue from marketing solutions surged 111% to $38.6 million, and sales of premium subscriptions increased by 60% to $23.9 million.

These results are no fluke. As a social network focused on professionals, LinkedIn is a valuable resource for unemployed workers – and there are a lot of people looking for jobs right now.

To continue reading, please click here.

OGX Petroleo e Gas Participacoes SA (PINK: OGXPY) Could Be the Next Exxon Mobile

By , Money Morning - • Print | Email

OGX Petróleo e Gás Participações SA (OTC PINK: OGXPY) is probably the biggest oil and gas company you've never heard of.

That's understandable, considering it has not yet produced a single barrel of commercial oil. But this Brazilian company could soon be on par with the likes of Exxon Mobil Corp. (NYSE: XOM), CNOOC Ltd. (NYSE ADR: CEO) and state-owned local rival Petroleo de Brasileiro SA (NYSE ADR: PBR).

Since its initial public offering (IPO) in 2008, OGX's resource base has more than doubled from 4.8 billion barrels of oil equivalent (boe) to 10.8 billion boe. It has drilled 52 wells in the last 20 months, with a success rate of over 90%, as it prepares for its first commercial production this fall.

OGX's first long-term well test is expected to produce about 20,000 barrels of oil a day starting this fall. And the company already has ordered the long lead items needed to ramp up production to 150,000 boe per day by 2014. From there, OGX is expected to ramp up its production to 1.4 million boe per day in 2019.

In simple terms, this oil and gas company is conducting the largest private sector exploratory campaign in the history of Brazil.

So it's time to buy Petróleo e Gás Participações S.A. (**).

Click here to continue reading...