Out Fox The $treet

After a very cool summer in the markets, emerging market equities appear ready to emerge from the depths of massive losses for a warm winter. Inflation fears pushed investors away from the fast growing sector in droves in 2011, but now that inflation has begun easing now might be the time to return to the sector. Almost all of the emerging markets are down for the year, especially the leading BRIC markets. These inflation fears were somewhat misplaced since they were based on year over year comparisons of very volatile commodities. For example, copper prices soared to $4.6/lb in February which was a lot higher than in 2010, but only slightly higher than the peak back in 2008. Is that really inflation especially rampant inflation? Read the full article at Seeking Alpha. Disclosure: Long IBN. Please review the disclaimer page for more details. 

Home Depot (HD) announced after the close yesterday that they would issue $2B in debt to refinance $1B of senior notes and to accelerate a repurchase $1B of outstanding shares. Typically we're big fans of stock buybacks and place a major emphasis on stock re purchasers via the Net Payout Yields folio. Issuing debt though to repurchase shares aren't as attractive. Its the use of free cash flow and cash on hand that makes a stock appealing not debt. When a company can afford a large percentage buyback, then it clearly signals that the market likely misunderstands a stocks future. HD has been one of the top investments in the NPY folio for a while since they have a nice 2.8% dividend combined with a history of strong buybacks. The company has already announced the intention to buyback $2.5B of stock this year placing the buyback yield at roughly 4% for this $61B market cap stock. Combined with the dividend, HD has a NPY of nearly 7% making them very attractive. This debt enhan...

Interesting Bloomberg report on increasing competition for Indian banks not only for employees, but also the potential for new licenses to be issued by the government. The main thrust of the article is the potential implementation of 'gardening leave' which bans employees from working for a competitor for 6 months unless they pay a fine, but the more important aspect for the 2 Indian banks trading in the US, ICICI Bank (IBN) and HDFC Bank (HDB), are the new bank licenses to be issued by the Indian central bank. Portfolio holding IBN is the main private bank in India and hence the market appears to follow their moves. They appear to already be facing high turnover with 15% of junior staff leaving last year. Not sure that's high enough to be overly disruptive, but the number could rise if more competition is let into the market. Those new banks will want the experience of the employees at IBN. From a business perspective, they'll likely focus efforts on attacking the 7...