Out Fox The $treet

Bought Agrium (AGU) today for all 3 portfolios. AGU provides an investment for the portfolios that is tied into the agriculture market. A sector that has been greatly lagging and the prices are finally right. The Growth Portfolio is invested in FCStone (FCSX) that benefits greatly from the ag market, but AGU gives the portfolio its only real investment in the sector. Agriculture is a great place to invest now since stock prices have fallen greatly but the end user demand has only fallen in the short term. Low inventory levels of corn compared to long term fast growing demand especially from China and India and even renewable fuels such as the ethanol mandates in the US should considerably increase the demand for the fertilizer products of AGU. Agrium engages into retailing of agricultural products and services. It also produces and markets agricultural nutrients and supplies fertilizers in North America. Agrium operates through three segments: Retail, Wholesale and Advanced Technologie...

For transporters, the cost of gas will be a 'driving' force in future profits and the ability to transport more commodities and less retail products will be beneficial. For that fact, Stone Fox has decided to swap shares in UPS for a bigger focus on CSX. Both were favorites of the NetPayout Yield Portfolio for decent dividends and a history of buybacks. Unfortunately for UPS whether public perception or reality, the cost of fuel will likely continue to hinder the amount of products shipped going forward. Even if it doesn't, its likely to hold the price of the stock down and competition with FedEx and USPS is likely to hold down profit growth regardless. Not to mention that legal documents that used to be delivered via Express services will likely move to a sort of digital format reducing the need for UPS services because it can be done cheaper and is more economical and even greener. Fortunately for CSX, the increasing cost of gas and likelihood that it will stay higher inc...

At Stone Fox, we're not huge technial analysts, but this market has gotten to the point that pays to check them out. Gafisa ( GFA ) has been one of our favorite picks so a while due to booming demand in Brazil for homes due to GDP growth and a huge lack of housing. As of close today, GFA as a very interesting technical setup. We're looking at a rare situation where the 20 EMA and 50 EMA are convering on the 200 EMA from opposite directions so this is about to make a very bullish or bearish move. At a closing price of $16.52, GFA now sits on the bullish side above all the moving averages with the 50 EMA now within reach of making a bullish cross of the 200 EMA. Unfortunately, the 20 EMA has come back down and any turn south could threaten to make this bullish scenario today very bearish. With the underpinnings of the world economy starting to show growth again and China being bullish on all things commodity related it seems so unlikely that a stock like GFA would suddenly turn b...

Tween Brands is up 30% today on news of the all stock deal with Dress Barn (DBRN). Its interesting that DBRN is up 10%+ on the news. Its very uncommon for an acquirer to increase on news of a purchase. Our take is that the market sees this as a steal by DBRN considering they were able to buy a premium brand for about 85% lower then its peak valuation. My only concern is that TWB has some stuff hiding in the closet for their BOD to agree to such a minimal price of $137M when they still have sales in the $1B range. Being that its an all stock deal they do still get the opportunity to participate in any further market rallies and to any rebound in the Justice line, though on a very diluted basis. In general your getting mostly an investment in DBRN going forward. Highlights of the deal: Stock-for-stock merger expected to be neutral to earnings in the first full year of combined operations and accretive thereafter Dress Barn, Inc. to add 908 Justice ...

This time they've one a deal in Italy. Aria owns a nationwide network so this is likely one of the $20M+ deals that ALVR management continuously discuss. ALVR continues to remain a very cheap stock especially now that they've announced 2 major contracts. Aria currently holds nationwide WiMAX licenses at the 3.5 GHz frequency bands in Italy. By using Alvarion’s Open WiMAX solution, Aria will be able to build a state of the art network with exceptional coverage to meet the growing demand for broadband services in the country. Analyst from CL King provides his view. While we agree the deal is likely worth more then $20M, we don't agree in how the analyst only comes to a target price of $5. Its easily worth $5 now with a target price more in the range of $10. The order is from Aria SPA, an Italian wireless Internet service provider. Financial details were not disclosed. However, Lawrence M. Harris, an analyst with CL King & Associates, said in a note to investors the valu...

For all the noise about whether the economy is recovering or not. Whether we're seeing actually good news or just less bad. The regional manufacturing report is actually seeing good news. The report for June came in at +6 which means they are actually experiencing growth. Heck, I didn't even catch that they reported growth in May as well since this isn't one of the major regionals followed. Accounting for 9% of the manufacturing base it covers the central Atlantic and includes states such as the Carolinas and Virgina. This is much more then a 'green shoot'. This is actual recovery. Looking at the graph you actually can see a V shaped recovery which is exactly what most experts say isn't going to happen. The main highlights are that new orders increased at a fast clip, employment improved dramatically especially the hours worked part, and backlogs were up for the first time since Aug 2007. Now we just need the other regions to join in the recovery. Overview Manu...

After a wild year that saw the market drop nearly 30%, Stone Fox is pleased to report that our Growth Portfolio outperformed the market by over 10.5%. The figure below includes 2% fees while Stone Fox only charges 1% hence the difference. Considering the Growth Portfolio typically outperforms in up markets it is encouraging that it did relatively well this last year. In fact, over the last 3-6 month periods it is up 30% more then the market. In real terms though, it was a disappointing year as nobody wants to lose 19% of their money no matter what the market does. We look forward to a much better 2nd year though it's started off just like last year considering the markets dropped 3% today. Lets just hope this isn't a repeat of last year. RETURNS Last Week -1.17% Last Month 7.57% Last 3 Months 52.41% Last 6 Months 35.44% Last 12 Months -19.98% Last 2 Years N/A Last 3 Years N/A Last 5 Years N/...