Hickey and Walters (Bespoke) submit:
General Electric (GE) has had a pretty good couple of days.
Since last Thursday, the stock has gained more than 10%, which is a big move for GE. The move has propelled GE to its highest level since late 2008, and it has made a big impact on the S&P 500 given its size.
Matteo Radaelli submits:
Ockham Research submits:
Temple-Inland, Inc. (TIN), which makes paper, packaging and building products, was put on credit rating watch with a positive outlook by Standard & Poor’s. The stock is up nearly 10% on the news Wednesday and it is also giving a boost to some of Temple-Inland’s competitors’ stocks. S&P credits the company will reducing its debt load by $440 million over the last year, and said that if it can continue with its debt reduction plans it would be eligible for a credit upgrade to “BBB”. While their efforts to reduce debt should be commended, it is a bit surprising that this announcement would be met with such enthusiasm by the market.
Temple-Inland was able to shave its debt in an environment that was certainly not hospitable to an important business segment, building products such as lumber and particle board. Clearly, this segment is heavily correlated to the strength of US housing starts, which have been at extremely low levels over the past two years. The company was able to utilize $175 million in alternative-fuels tax credits as well as $335 million in free
cash flow in fiscal 2009, and rolled the majority of that into cutting down its debt. What makes this especially impressive is that the company devoted these resources even though they did not have any significant amount of debt maturing until 2012. It is clear that there were not a lot of great opportunities for TIN to invest in growth over the last year, so they were content to bide their time and strengthen their balance sheet. This may not be the sexiest strategy for investors, but it should give them greater flexibility to pursue growth as better opportunities present themselves in the years ahead.
eChristian Investing submits:
Speaking at a Goldman Sachs investor conference yesterday, General Electric (GE) CFO Keith Sherin indicated that profits at the conglomerate will begin growing again in 2011. GE’s profits have been in decline since 2007 and Wall Street expects another decline this year.
Dividend investors also have reason to cheer as GE’s CFO also indicated that the company plans to begin growing their dividend again, but not until 2011.
Mariusz Skonieczny submits:
Just as business owners must constantly search for new leads that turn into clients, investors also must be on the lookout for leads that can turn into profitable investment opportunities. On numerous occasions, I have been asked about my sources for investment ideas.
There really isn’t one source that I use because leads can come from many different avenues. For example, one of my best ideas in the second half of 2009 actually came from the editor of my book, Why Are We So Clueless about the Stock Market? After the editing work, he asked me if I could look through about 20 companies and advise him on whether any of them were good. Even though I discarded 19 of his ideas, one company really caught my eye. It was Arctic Cat (ACAT), which manufactures snowmobiles and all-terrain vehicles (ATVs).
Hard Assets Investor submits:
By Brad Zigler
Real-time Monetary Inflation (last 12 months): 2.3%
As a child, I remember being very careful to wear green on St. Patrick’s Day to avoid pinches from schoolmates. Investors in greenery this year have managed to avoid some financial pain themselves.
Tom Konrad (AltEnergyStocks) submits:
World oil supplies are stagnant, and in the not-so-distant future will begin to decline. If economic growth continues, demand for oil will increase as well. This will lead to a long term rise in oil prices, which will only stop if 1) high oil prices or other factors stop or reverse economic growth, or 2) we find some way to use much less oil for the same amount of economic activity. Each of these scenarios will have winners and losers. In other words, investment opportunities.
Substitution
Tom Lydon (ETF Trends) submits:
Move over, gold. You’ve had your day in the sun. Right now, industrial demand from both developing and developed markets is powering a rally in base metal ETFs.
Last year was the Year of All Things Gold as the safe haven metal supplied investors with a shelter for the market turmoil. But rampant fear in the marketplace has abated, and a bigger risk appetite is the order of the day. That means markets are moving, countries are growing and they’re hunting down the materials they need to get it going:
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