Out Fox The $treet

Just minutes ago, Hartford Financial announced that they has repaid the US Treasury the $3.4B that HIG had borrowed during the crisis. With this out of the way, the stock price should now be free to breakout above the current range. Looking at the chart $28.50 has been strong resistance so any solid break and close above it would signal a higher range going forward. 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.

Considering that oil has traded in the $80s range for months now, it shouldn't be that surprising that OPEC would revive projects shut down in 2008-2009. Apparently ever project is now moving forward though that wasn't conveyed by Foster Wheeler (FWLT) and other energy engineering firms in their Q4 reports. Maybe its a sign that we'll see some awards in the next 6 months. 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 t...

Synovus Financial (SNV) was hit pretty hard today by the FBR analyst downgrade . The stock slid all the way down to $3.17 or over 8% at one point. Evidently the downgrade caught some investors off guard as it didn't highlight anything new and basically just offered a different opinion to that provided by management. One that should've been a concern of any investor. 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 conce...

Some good points today from Barry James of James Advantage Funds. With the expected repeal of the Bush Tax Cuts and the future Medicare Tax of 3.8% on unearned income will favor stocks that buyback stock over dividends. During the crushing losses in the 2008 bear market, we've alot of negative comments about companies that bought stock at much higher prices. It seemed alot of investors were leaning back towards dividends, but the higher taxes could very well favor companies that buyback stocks as investors won't be taxed on those. 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 Caterp...

After such a reversal yesterday its surprising to see the market up much less 3 stocks that we own in the Growth and Opportunistic Portfolios hitting new 52 week highs today. Especially considering the reversal on Apple (AAPL) yesterday seemed to foretell lower prices. AerCap (AER) and Sears Holdings (SHLD) remain very cheap value plays while AAPL would be considered a cheap growth stock. Not sure I'd chase them today, but it further highlights how stock selection can beat the market.

Finally the merger between AerCap Holdings (AER) and Genesis Lease (GLS) will be finalized today creating the largest independent airplane leasing company. Its also creates a earnings powerhouse. For 2010, they expect to earn well over $2 with the stock trading below $11 now. A PE of 5 is absurd now that global growth has returned and most of their customers should see growth even in the US market. Not to mention that 5 years earnings growth is placed at 12.5% meaning a fair valuation would be around $25. 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 th...

Had sold a portion of Liz Claiborne (LIZ) back in early March as the stock got overheated. With it continuing to hold above the 20EMA, we used the early morning selloff to purchase our positions back in the Growth and Opportunistic portfolios. Unfortunately we missed the early drop and had to settle for $7.01. 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.