- The Hartford paid $3.4 billion to the U.S. Treasury to repurchase the preferred stock, plus a final dividend payment of about $21.7 million. The Hartford funded the repurchase with proceeds from its recent equity and debt offerings, as well as from available resources. The U.S. Treasury continues to hold warrants to purchase approximately 52 million shares of The Hartford’s common stock at an initial exercise price of $9.79 per share. The company does not intend to repurchase the warrants from the U.S. Treasury.
Wednesday, March 31, 2010
Monday, March 29, 2010
Today OPEC announced that some 150 projects are now moving forward to increase annual production by 12M barrels by 2030. Of those projects, some 35 were canceled/delayed and have now been restarted (other reports suggested that 135 projects were delayed). Either way the E&C firms should see higher order rates in the near future if true.
Another big issue during the crisis was financing and I'd expect with oil maintaining at these levels that will soon disappear as an issue as well.
- Members of Opec, the oil exporters’ group, have revived the oil projects they put on hold when oil prices collapsed to close to $30 dollars a barrel early last year, writes Carola Hoyos in Cancun.
- Abdalla El-Badri, Opec’s secretary-general, said all 35 projects that had been delayed or considered for cancellation were back on track. He said that Opec’s member countries now had a total of 150 projects under development, which would add about 12m barrels per day of oil production capacity by 2014.
- The 35 projects that have been restarted are expected to contribute about 5m barrels per day of that capacity. They have been revived following the recovery of oil prices in the past year to about $80 a barrel. Mr El-Badri said: “They are all back on track.”
- Speaking to the Financial Times ahead of the International Energy Forum meeting of oil-producing and consuming countries in Cancún, Mexico, he played down the delay caused by the year-long uncertainty on oil prices.
- The reversal is also a sign of Opec’s optimism about future oil demand growth, especially in Asia. Oil demand in developed countries that are members of the Organisation for Economic Co-operation and Development is expected to decline.
- “We hope the prospect for the future will be better than it is now,” Mr El-Badri said. “We base our projection not mainly on OECD countries: 80 per cent of the growth that we see in the future will come from India and China, and the Middle East and Asia as a whole.”
FBR claimed that SNV wouldn't be profitable this year as management claimed and that the bank wouldn't likely be bought out. Not really sure who would buy an unprofitable regional bank on a buyout hopes other then small retail investors. The whole reason to buy SNV is that they trade very cheaply compared to normalized earnings (see Tom Brown for more detail).
With the economy turning and the real estate sector likely bottoming out, I'm not sure why FBR is so eager to fight the trend. Clearly management at SNV is too be questioned so I think the fact that it only trades at $3.25 now confirms that concern. This downgrade is likely to be seen as a buying opportunity down the road. It smacked the stock right back to the 20EMA where it should be aggressively bought.
- Paul J. Miller of FBR Capital Markets cut his rating of Synovus to "Underperform" from "Market Perform."
- Miller wrote that he puts "low odds" on such an outcome. He expects continued erosion in tangible book value for Synovus, based in Columbus, Ga.
- Miller attributed the rise to expectations that Synovus would turn a profit at some point this year, and speculation that the bank might be bought out.
- "While not completely out of the question, we do not see this scenario as highly likely," Miller wrote, saying that other banks may be more attractive acquisition targets.
Our Net Payout Yield Portfolio has always sought a balance between dividends and buybacks to provide cash flow for clients from dividends but also to limit any tax burden with companies that buyback stock. Besides history has shown that the combined yield is much more predictive of returns then dividend alone. It very much appears that the buyback portion could shift back into focus starting in the 2nd half of this year.
In the past stocks like Caterpillar (CAT) and Disney (DIS) have been much more focused on buybacks then dividends.
Friday, March 26, 2010
Not sure I'd chase them today, but it further highlights how stock selection can beat the market.
Thursday, March 25, 2010
The finalization of this merger should hopefully bring much more focus to how cheap the combined entity remains. Both stocks have rallied big time since the March 2009 lows, but they still remain insanely cheap on a historical basis. The risks of airlines going bankrupt is greatly reduced now that the financial crisis is largely over. Also, the inability of Boeing (BE) to produce its new plane has helped reduce the competition for their existing planes. It will now be years before those new planes reach a critical mass.
The stock was at $16 just prior to the Lehman blowup and considering that the airline leasing business has faced little in the way of long term impacts ala share dilutions, major customer bankruptcies, or financing issues its actually remarkable that the stock is still that far below the pre-Lehman value while the overall market that had numerous stocks significantly diluted or basically forced out of business is approaching those levels.
In fact, some major competitors like ILFC, part of the callouses mess of AIG, have been impacted to the point that AER now has a better financing situation and hence a competitive advantage they would've never had in the past. Of course, some fears have existed that ILFC would flood the market with cheap planes via a distress sale, but now that seems very unlikely with ILFC issuing debt and AIG raising major funds via a couple of large asset sales.
That was just one of the major hurdles that AER and even GLS faced in the last 2 years. First, the market feared that all of their customers were going bankrupt which only happened on a small scale. Both companies had a handfull of planes returned at most. Then, lease rates were going to be greatly impacted. AER just reported a 40% increase in the net spread (lease rates minus interest expenses). Next, financing was going to be a huge problem. Both companies were able to rather easily obtain financing for new planes or deals. Heck, the biggest complaint with GLS is that they had an expensive credit line that wasn't used. Quick, name another debt laden industry where shareholders faced the issue of credit lines that were too big.
For an industry rather unscathed by the crisis, its amazing that the stocks originally sold off so much and have in reality recovered so little. Utilization rates remain in the upper 90% range and AER has a full plate of new planes coming on board with lease terms of 100 months. Its hard to find companies with such compelling locked in gains with little downside. If they were so unscathed in the worst crisis in 70 years, why the unwillingness to pay a reasonable price?
With the closing of the merger, its hopeful that this uncertainty (AER has been counting on GLS for some financing clout) will help to unleash the stock. The combined entity will be valued at $1.3B possibly placing it into a tier that will obtain more analyst coverage. When compared to other industries that operate on long term leases, airplane lessors compare favorably to deepwater drillers (RIG or ATW) or shippers (FRO or TK). AER typically has much longer leases providing much more stability. Of course it does limit the upside that you can see when global demand soars, but as we've seen in such cyclical industries its much better to have constant, very profitable rates.
Read the latest earnings report from AerCap and you'll start to wonder why Wall Street isn't buying this stock hand over fist.
Edit 10:30am - Looks like the merger has been finalized and the stock of AER is soaring.
Wednesday, March 24, 2010
With support it will hopefully breakout of the double top around $7.5 on its next run. After all it traded around $20 pre-Lehman and the retail sector is heating up. Its time for the CEO to show some results.
Saks (SKS) is approaching those levels and Coach (COH) has already zoomed past the pre-Lehman disaster.
Took a gamble yesterday and apparently we'll win out with this pricing. Some of the details of why we're very bullish on this stock.
- About 20 percent of the proceeds from Sao Paulo-based Gafisa’s sale will go to acquisitions and 35 percent will be used to buy land for construction projects, the company said on its Web site. Gafisa canceled a planned share sale last year.
- The projected sales value for new projects started in 2010 will climb to as much as 5 billion reais from 2.3 billion reais a year earlier, following a “strong improvement in market conditions,” Gafisa said Feb. 8.
- As much as 45 percent of the new work will focus on lower- priced housing as Gafisa takes advantage of a government plan to build 1 million homes for low-income families by 2011. Brazil’s economy is expected to grow 5.5 percent in 2010, according to the median forecast of about 100 economists in a central bank survey published March 22.
Tuesday, March 23, 2010
The stock has mainly been weak due to an expect secondary offering possibly after the close tonight. It might dip again tomorrow in the am but any weakness should be bought. GFA is a leading Brazillian homebuilder with decades of growth ahead.
Sunday, March 21, 2010
It all really depends on how the public reacts. If they remain negative, then its very doubtful that Democrats will commit career suicide my backing more unpopular programs like cap and trade. And considering the way the bill is being passed basically in the cover of the night almost in a secretive manner. The public voted for Scott Brown to stop healthcare reform and yet the Democrats strong armed it through. Giving special deals to gain support from the anti abortion group. This is exactly what the public doesn't want. How is this change?
When you read the bill it does little to control cost. Wasn't that what reform was about? What it actually does is include cost in the system? Most people covered, more services covered, and more people covered for longer. Does it reduce the cost of medicine? Cost of a doctors visit? Encourage people to act responsibly? Change the method of payment so that individuals are more accountable for wasted visits and procedures?
SP500 needs to hold 1150 the next couple of days. If so, the market likely rallies towards the 1225 to 1250 level by April/May. If it fails, then it could be a sign that Obama is about to push through a on ton of more anti business legislation. Personally, I think too many Democrats need to pull back in order to save their seats that Obama isn't going to have his baking. Winning by 3 votes isn't exactly overwhelming support.
Monday trading should be interesting. We bought some triple smallcap shorts (TZA) and double Russel shorts (TWM) the last few days in order to protect the downside. I'd like to see the push down to 1150 hold and possible pull these hedges.
Friday, March 19, 2010
With SP500 earnings expected over $80 now, 1325 isn't that far fetched. Especially went $95 for 2011 is becoming more realistic. $95 x 15 gets the market back to 1425. Might seem far fetched but when you review the real numbers surrounding corporate profits the questions should become 'Why Not?'.
With a name like Binky he better be good as well.
Both stocks are only 1.2% of our portfolio and we'll look to add to those positions on Monday assuming a lack of negative news. The move down could be related to quadruple witching today. Charts look very weak so buying is risky. IAAC at $14.50 has a natural stop there and PNX at $2.50 to start or all the way down to $2.20.
IAAC is a commodity risk management firm that should benefit from a volatile commodity environment and fast growing emerging markets that consume alot more commodities. Unfortunately they make a significant portion of their profits from short term interest on customer account balances. Not so good when rates are historically low.
Phoenix Cos is an insurance provider. Basically a play on a stock trading below book value.
Thursday, March 18, 2010
GFA is doing an offering next week so that explains the weakness on that stock. With FWLT, its difficult to see why it remains so weak. The news seems bullish and it continues to trade at much cheaper levels then a competitor like Jacobs Engineering (JEC).
Foster Wheeler (FWLT) estimate changed at Barclays. FWLT 2011 EPS estimates introduced at $2.50, 2010 maintained at $2.30. Reiterate Overweight rating and $38 price target.
Thanks to everybody that follows me on SeekingAlpha.com. Now at 102 followers as I write this tonight. Still nothing compared to the top guy - Pragmatic Capitalist - wtih 28,250 followers. Its wasn't long ago that just a 1,000 was huge. SeekingAlpha is really taking off as the place to read up on investment ideas.
Brian Westbury from First Trust has a nice video about the expectations for March jobs and more specifically his estimate that we'll report 300K. Now what will that mean to the stock market? Hard to tell as we've had a huge run since mid-Feb. In general though, I still see lots of stocks trading below intrinsic values. Hartford Financial (HIG) trading way below book. AerCap (AER) trading at 5.5x 2010 earnings. Puda Coal (PUDA) trading below 10x their low end guidance of $1.10. Those are just a few examples of how cheap the market remains.
Wednesday, March 17, 2010
Tuesday, March 16, 2010
- The offerings announced today will consist of $1.45 billion of common stock and $500 million of mandatory convertible preferred stock, represented by depositary shares. The debt offering related to the repurchase of the government's preferred stock will consist of $425 million of senior notes. In addition, the company will pre-fund the repurchase of its senior debt maturing in 2010 and 2011 through the issuance of an additional $675 million of senior notes.
HIG is one of the largest investments in our Growth and Opportunistic Portfolios and we'd use any weakness to add to positions.
Disclosure: Long HIG
Monday, March 15, 2010
“We anticipate the company will continue to execute well, and upside to March quarter and 2010 estimates is highly likely, but we believe this is already priced into the stock,” he writes. “Given the upside scenario already priced into RVBD shares, we think it will be hard for the stock to outperform on a relative basis.”
RVBD is the biggest holding at around 7% in our Growth Portfolio and one of the largest holdings in our Opportunistic (CV.IM) model. At this point, we're happy to hold a stock that can hold support especially on a downgrade.
The coal industry in China is very fragmented. Many of the coal mines have been operated by small companies leading to very inefficient mines and a high injury rate with several tragic mine accidents. Hence, the government has embarked on a mine consolidation plan in order to move the majority of the mines into the hands of larger operators that will be more efficient and easier to regulate. The program will reduce the number of mine operators from 1,000 to 100 while also significantly shrinking the total number of mines.
Puda Coal (PUDA) is one of the selected mine consolidators. It's virtually unknown by investors as they recently did an uplisting to the AMEX with little fanfare. Outside of Yanzhou Coal (YZC), the other Chinese public mine operators are relatively small and unknown like PUDA leaving a lot of opportunity for the small investor to capitalize on the lack of institutional investors. To this point, PUDA has been strictly a coking coal washer al beit a very profitable one. They have 3 coal washing facilities with a 3.5M mt annual capacity.
Last year they embarked on the consolidation of 8 coal mines into 5 with the recent purchase of 2 mines in the Shanxi Province. By October, they expect to double the output of the 2 mines to 900,000 mt from the current 450,000 mt. Once completed, they expect to double the output of the original 8 mines from 1,200,000 mt to 2,700,000 mt.
Considering they expect to purchase these mines at roughly 2x EBITDA they will be significantly accretive from day 1. With 40% net income margins, they will also provide significant income to PUDA, but even at these prices the $150M price tag for all 8 mines has been weighing on the stock. PUDA after all didn't even have a $100M market cap when it announced this plan.
Recently PUDA raised over $28M via a $13.6M stock offering and a $14.6M loan from the Chairman. These moves pressured the stock down to sub $5 but they've recently rebounded to over $10. These offerings plus cash on hand and income provides the money needed to close the deals on the first 2 mines and complete the expansion. For the other 6 mines, they are looking for partners to fund the $110M price tag and $56M in capital expenditures.
Another project they are working on is the Jiahne Project. In May of 2009, they bought a 18% ownership in a coking coal mine that has roughly 18M mt of reserves. The company has also applied to be a consolidator of 2 adjacent reserve areas giving them access to prized coking coal that could then be feed into their coal washing operation. For now they will settle for 14% dividends from the income of that mine.
Like most Chinese stocks, PUDA has phenomenal margins. They were already very profitable in the coal washing business, but now they expect to generate over 40% net margins in the mining operation.
On their 3/5 presentation to the Brean Murray Conferense, management guided to earnings of $1.10 to $1.52 for 2010. Although that is a very wide range, the results are very dependent on the finalization of the ownership of the 2 coal mines, the doubling of the mining capacity by Oct, and of course the price of thermal coal in the case of these 2 mines.
By all accounts, Puda Coal is very cheap with lots of potential. The biggest risk is that they don't have a track record as a mine operator. The ability to buy companies at 2x EBITDA doesn't come around very often making that risk worth taking in this case. Even at the low end PUDA trades at only 8x estimated earnings for 2010. Considering that 2011 is likely to easily surpass that high end, PUDA is far cheaper than US coal companies that lack the direct access to China coal demand and the benefits of the attractive consolidation program.
Interesting comments from theSteet.com:
For a stock with more upside, I like small-cap Puda Coal. PUDA uplisted to the Amex exchange in September 2009 and saw its stock shoot up more than 20% on the day. The company is a supplier of high-grade metallurgical coking coal used to produce coke for steel manufacturing in China and a coal mine consolidator of eight coal mines.Disclosure: Long PUDA
The company recently raised $13 million in a common stock offering priced at $4.75 per share to fund the acquisition of two new coal mines. Investors clearly like the story because the stock has risen from below $5.00 to more than $7.00 at present.
Puda trades at only 16 times trailing earnings, which is a clear discount to U.S. comparables such as James River Coal Company (JRCC Quote), which trades at 22 times earnings and Pacific Coal (PCX Quote), which trades at more than 30 times earnings, despite having similar margins to both. As a result, over the next year, PUDA could potentially have 50%-100% upside in its share price.
Friday, March 12, 2010
Of the 46 managers on the CVIM site, our Opportunistic Model ranks 2nd in the MTD results (click on MTD in the upper right corner) at over 13%. Check on Monday morning when they update the results from Friday and it'll be up 14%. We're proud of being 2nd because although this is an aggressive portfolio it is up against several daytraders and undiversified portfolios giving them alot more leverage for out sized short term gains.
Please email us at stonefox27@ymail with any questions or contact CVIM. Its only $5K to open an account with them. With as little as $10K, you can invest with 2 different managers giving you some diversification of managers. Something you can't get elsewhere unless you go the mutual fund route and most funds are so large and diversified into so many stocks that your almost buying the market.
Thursday, March 11, 2010
Hard to understand what caused the stock to collapse from $11 to $7.5 and then rebound right back to $11 today. Is it now a double top? Likely not, but it does need to consolidate the recent gains. See the RF chart from yesterday as thats the likely scenario for this stock.
Trading at only 5.5x the $2 in earnings expected this year the stop at $11 will likely only be short term if at all.
Disclosure: Long AER and GLS
TZA was purchased because it was and is extremely oversold having an RSI of 25 yesterday and a CCI below -100. Both signs that a reversal is likely. Small caps have just been too hot lately so we expect at least a minimal pullback.
For the Hedged Growth Portfolio this is on of the first hedges/shorts that we've used in the last year since the March 9th low.
Wednesday, March 10, 2010
The Opportunistic/CVIM Model is doing the best today as it has a higher concentration in those 2 stocks while the Growth Portfolio is also gaining in large part to a high concentration in the financial sector at roughly 20%. Though it contains much more of Hartford Financial (HIG) and ICICI (IBN) then these 2 regional banks.
The chart on RF looks similar to how we expect the SP500 to go over the next few weeks. Initial weakness at the recent high (Jan in the case of the SP500) and then support from the rising 20ema and an eventual push to new highs on the 3rd try at 1150.
Finally the chart of SNV. Not as impressive as RF. Still need to work thru several layers of resistance. The RSI is just at 57 so its got plenty of potential juice left to make that move.
Tuesday, March 9, 2010
When March started last year, we were about ready to give up. So many stocks were unbelievable buys yet the market kept spiraling down. A year later we feel vindicated as all 4 portfolios have easily beat the market since we started tracking them back in 2008. The Opportunistic Model had the biggest gain in the last 12 months at 165% (200%+ by our calculations) followed closely by the Growth Portfolio.
Going forward, were looking towards another strong year as the markets likely provide another solid gain in the 2nd year of this bull market. Its very unlikely that a bull market dies after only one year. As always we'll adjust the portfolios if it appears that the market won't continue the rally. At some point in late spring or summer we're like to finally face a true 10% correction so 2010/2011 won't be as easy as the last 12 months.
The Growth Portfolio gained 155% since the bottom in the market. Easily doubling the gains in the market and beating the SP500 by 84%. This portfolio has a huge loss entering March last year, but now its managed to claw back to a very respectable annualized 8% gain. Very impressive with the market down nearly 7% during that span.
The Hedged Growth Portfolio was clearly different with the portfolio actually underperforming over the 12 months by 17%. Though considering the portfolio is still 30% in total and 28% more then the SP500 in its roughly 17 month history, we'd consider that very successful. A constantly bull market isn't ideal for this portfolio but we see more possibility in the years ahead to out gain the market even in good times. Over the last 6 months its up on the market by over 2%. Its clear that the portfolio will drastically outperform in market turmoil and keep up in the good times. Basically what you want to keep capital and grow it in good times.
Net Payout Yield
Surprisingly was the performance of the Net Payout Yield Portfolio. Even though its comprised by mostly slow growth, high dividend stocks it outperformed the SP500 by over 16% in the last 12 months. This portfolio continues to out gain the markets on a daily, monthly, and yearly basis. It's now headed towards 4 straight years of beating the SP500.
These returns are impressive but I'll make a note that they seem off. Its only showing a 50% gain for the SP500 which is clearly too low. While generally accurate in the performance it seems inaccurate in the totals. Actual results should approach 200%+
|Return Since Inception||141.55 n/a|
|Month to Date Return||2.93 n/a||3.08|
|Last 3 Months Return||8.62 n/a||0.81|
|Last 12 Months Return||165.64 n/a||50.25|
|Annualized Return||109.95 n/a||-2.37|
Monday, March 8, 2010
Unlike a mutual fund you get the opportunity to see current trades and portfolio holdings and you have visibility to your assets via 3rd party brokerage Interactive Brokers (IB). So anybody worrying about giving their money to an investment manager ala Madoff no longer has to fear never seeing that money again. The money remains in your name and you alone have discretion over transferring in and out. CVIM only obtains the ability to execute trades and collect fees.
How CVIM works is that I make trades in my account at IB and then the CVIM team replicates those trades within 2 minutes to investors that are subscribed to use my model. The fees are 1.5% of assets plus limited trading fees as low as $1 a trade. So in essence I'm selling CVIM my trading data for them to manage your investment account.
CVIM just began offering these services in October so its still relatively new, but it does open up money management to new levels of people. Whats interesting to me is that even a person with a $500K portfolio was somewhat limited to using one manager in the past. Now they can divide that money up into several money managers. For example give 10 managers $50K each to diversify away management risk. Also there tool makes it alot easier to move from one manager to the next since it was designed for multi managed accounts. Now more awkward scenarios of having to remove your money from a manager that has had your account for years.
The Portfolio being offered is a slightly more aggressive one then I'd manage for high net worth individuals. The main reason being, it's based on the track record of my personal account since Dec 2008 that I typically invest more aggressively and to keep true to the track record I've selected to move forward with the same investment thesis. The Portfolio will be labeled as Opportunistic (Aggressive Growth). It basically incorporates the Growth Portfolio plus the ability to use margin and shorts. Its also only targeted at 15 stocks considering the portfolio size can be as small as $5K. Fees on the trades of 30 stocks even at $1 a trade can really eat into small portfolio gains.
Please let me know if you have any thoughts on the use of CVIM or the Model in general.
Regardless, we're very bullish on DKS long term. They trade at 19x the $1.32 estimate for this year. Not overly cheap but assuming they beat estimates and as the focus moves toward the 2011 (Jan 2012) estimates I'd expect a much higher stock price. Just don't expect a big ramp on beating estimates tomorrow.
Reported earnings of outwear makers like VF Corp (VFC.N) and Columbia Sportswear Co (COLM.O) as well as suppliers like Under Armor Inc (UA.N) and Nike Inc (NKE.N) suggest heightened demand for cold-weather gear, analysts said.
"I think the sell-through was strong for outerwear," SunTrust Robinson & Humphrey analyst David Magee said.
Analysts on average expect the Dick's Sporting to earn 55 cents a share on revenue of $1.29 billion, while Hibbett is expected to earn 31 cents a share, on revenue of $154.4 million, according to Thomson Reuters I/B/E/S.
SmartEstimates from Thomson Reuters StarMine, which lends more weight to recent estimates from top-ranking analysts, puts the average expectation for earnings marginally higher than the consensus for both companies.
However, Stephens Inc analyst Rick Nelson said Wall Street profit estimates "are conservative and beatable," as the cold-weather sales could be even higher than people are expecting.
Concerns over extreme weather conditions dampening sales in some markets seem to have eased.
"The storms that we thought would prevent shopping didn't prevent it as much," Needham and Co analyst Sean McGowan, who is expecting an upside to his profit estimates for the companies, said.
Friday, March 5, 2010
Still its very rare for a tech stock to exceed the 2000 high.
Part of the reason for the jump today was just the overall market, but it didn't hurt that Cramer was pushing the stock last night on his Mad Money show. Cramer is bullish because the new Apple iPad product is gaining key corporate support especially in the Healthcare and Legal areas. Read doctors and lawyers. That could really feed into Mac sales as well.
With the cash on hand and what could be yet another strong product with the iPad, AAPL is likely a must own for the next couple of years.
This is the difference between coal and natural gas. China needs coal. China doesn't need natural gas.
- JFE Holdings Inc. reportedly agreed to pay $200 per ton for coking coal in a three-month deal with Australian coal miner BHP Billiton Ltd.
- The amount was higher than expected, said William Burns, an analyst with Johnson Rice & Co. Burns, who expected JFE and other companies to pay only about $150 per ton, said this shows how aggressive countries have become in competing with China for natural resources.
- "China has become a black hole, and the Japanese steel makers are trying to lock up their supply," Burns said.
Wednesday, March 3, 2010
The business activity (54.8) and orders (55) suggest a V shaped recovery is indeed on the way while the employment index at 48.6 provides for great profits opportunities. This may not be good news for your neighbor that is unemployed, but it should help corporate profits and hence stock prices. After all, if your activity/orders increase but you have less people/costs your profits should soar.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Worldwide. "The NMI (Non-Manufacturing Index) registered 53 percent in February, 2.5 percentage points higher than the seasonally adjusted 50.5 percent registered in January, indicating growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 2.6 percentage points to 54.8 percent, reflecting growth for the third consecutive month. The New Orders Index increased 0.3 percentage point to 55 percent, and the Employment Index increased 4 percentage points to 48.6 percent. The Prices Index decreased 0.8 percentage point to 60.4 percent in February, indicating an increase in prices paid from January. According to the NMI, nine non-manufacturing industries reported growth in February. Respondents' comments vary by industry and company about business conditions."
Back on the V shaped recovery, Atlanta Fed President Fred Lockart was out today talking about a not so V shaped recovery. We have to wonder what he's looking at. Looking at the graph made by First Trust it sure looks like a V shaped recovery to us. The ISM number is likely to continue much higher then 53 as well.
It's also discouraging that the stock is down in an up day. Another sign that it might need to rest before trying to breakout of the double top.
Tuesday, March 2, 2010
* All below returns are actually 0.75% higher on a annualized basis then the below numbers due to our tracking system at Marketocracy.com assuming a 2%+ annual fee versus the 1.25% for this portfolio.
For 2010 YTD, the numbers are just as impressive. After today's gains, the YTD return will approach 6% while the SP500 is around 0.6%.
For more information contact us at email@example.com.