• Morning News: September 27, 2010
    Posted by on September 27th, 2010 at 8:04 am

    The 10 Costliest U.S. Housing Markets in Pictures

    Stock Index Futures Inch Higher as M&A in Focus

    Unilever Agrees to Buy Alberto Culver for $3.7 Billion

    Treasury Said to Prepare AIG Exit, Repayment Plan

    China Imposes a Steep Tariff on U.S. Poultry

    Wal-Mart Offers to Buy South Africa’s Massmart for $4.2 Billion

    Takefuji Says Eyeing Restructuring Measures; Investors Spooked

    How Americans’ Love Affair with Debt Has Grown

    Mazlan Othman Named Ambassador to Theoretical Extraterrestrials

  • Ignore the Dow
    Posted by on September 26th, 2010 at 6:19 pm

    Unless it’s across 10,000, I haven’t paid attention to the Dow in years. The S&P 500 is by far the better index. On top of that, consider this stunning fact: Caterpillar’s stock is responsible for 40 percent of the Dow’s climb since the beginning of the year. That’s crazy!

    If not for Caterpillar Inc., the world’s most widely-followed stock index would be up just 2.5 percent this year instead of 4.1 percent. Take out gains from the next three biggest contributors to the index — McDonald’s Corp., DuPont Co. and Boeing Co. — and we would be sitting on losses.

    “It’s all about Cat,” marvels BNY ConvergEx strategist Nicholas Colas in a recent report. “Names like Microsoft, Cisco, Bank of America and Intel might be large companies but as far as Dow impact goes, they are tiny.”

    The difference is that the Dow is weighted by price. To compute the Dow, you add up the 30 stocks and divide the sum by a divisor (currently 0.132129493) and, bingo. The S&P 500, however, is done by adjusting by the actual market value of each stock which makes much more sense.

  • NICK at $9.33
    Posted by on September 26th, 2010 at 6:07 pm

    Earlier I had noted that shares Nicholas Financial (NICK) had suddenly sprung to life. As it turned out, Thursday and Friday were the two heaviest trading days in over two months. The stock jumped from $8.35 on Wednesday to as high as $9.33 just before the close on Friday. That was NICK’s highest price in over three years. The stock finished the week at $9.01.

    I have no idea what’s caused the sudden interest in NICK. It’s a small stock so it doesn’t take a lot to cause some waves. I don’t have much else to say except I still think it’s an excellent stock and it should be going for around $12 per share.

  • A Little Bit Late
    Posted by on September 24th, 2010 at 12:04 pm

    Eighteen months and 70% after the bottom, Steven Pearlstein of the Washington Post tells us “Yes, it may finally be time to get back into stocks.”

    Finally? This is honestly one of the silliest columns I’ve read in a long time. What else can you say about a gem like this?

    As I see it, the biggest risk to stocks right now is the prospect that radical Republicans might win control of Congress, setting up a political stalemate with a veto-wielding president that almost surely put an end to the Dow’s 2,700-point Obama rally.

    The Obama rally? Even if you’re a hyper-partisan, how can someone really say that the Republicans are the biggest threat to stocks? Not inflation or deflation. Not taxes. Not a double-dip. Not an oil spike or Iran. None of those. The real threat is…political stalemate! Looking at the 1990s, that was a pretty good time for stocks and it was marked by political stalemate.

  • NICK Suddenly Wakes Up
    Posted by on September 24th, 2010 at 10:26 am

    Yesterday the Buy List only fell modestly compared with the rest of the market thanks to strong gains for Bed Bath & Beyond (BBBY) and Nicholas Financial (NICK). I have no idea why, but NICK seems to have suddenly woken up from its slumber. Who knows? Sometimes stocks do weird things. Yesterday was NICK’s heaviest volume in over two months. It even broke $9 per share today.

    Today looks like it will be a good day for us. So far, 19 of the 20 Buy List stocks are up. The only one that’s down is BBBY.

  • Morning News: September 24, 2010
    Posted by on September 24th, 2010 at 9:57 am

    Greenberg: Can an ETF Collapse?
    Yes, it May Finally Be Time to Get Back into Stocks
    Apple Passes PetroChina to Become Second-Largest Stock
    Wall Street Futures Signal Firmer Open
    German Business Confidence Unexpectedly Increases
    Obama Asks Wen for More Action on Yuan
    Petrobras Raises $70 Billion in World’s Largest Share Sale
    Amazing Horned Dinosaurs Found on ‘Lost Continent’
    Ida Blankenship speaks! Actress Randee Heller on the ‘Mad Men’ loopy secretary
    Getting Made The Scorsese Way (Mandatory reading for all Goodfellas fans)

  • Hawkins Keeps Charging
    Posted by on September 23rd, 2010 at 1:03 pm

    A few months ago, I highlighted Hawkins (HWKN).

    One company that I’ve followed for many years is Hawkins Inc. (HWKN). Talk about unloved! Barely anyone follows widdle Hawkins. Yet, this has been an outstanding stock for decades! (BTW, I’m not recommending the stock. I’m just using them as an example.)

    Hawkins is a specialty chemical company based in Minnesota. So if you’re in, say, Fargo and you need a shipment of sodium hydroxide, well…these are the boys to call. They’ve been around for many years and the company is largely in family hands. They do what they do, and they do it well.

    The odd thing about Hawkins is that they used to split their stock almost every, but by small amounts. You’d get a 10%, 15% or 20% stock dividend each year. As a result, the nominal share and dividend price didn’t move much, but the stock really did very well.

    This is the kind of stock I love finding. It’s a tiny micro-cap that nobody follows. The odd thing is that the stock has taken off over the past two years. While the rest of the world was falling apart, Hawkins has soared.

    The stock hit $36.99 yesterday. Hawkins is up more than four-fold since early 2003, and it’s close to a triple in the last 18 months. Even after this impressive run, Hawkins is still less than 1/100th the size of DuPont (DD). Over the last 30 years, Hawkins’ stock is up about 80-fold. That’s better than Intel (INTC) yet no analyst currently follows it.

  • From The Onion
    Posted by on September 23rd, 2010 at 11:05 am

    JPMorgan Chase (JPM) -$2.99 $34.72 (down 7.9%)

    Financial stocks plunged today on reports the House and Senate were nearing agreement on wide-scale banking reforms that, if enacted, would have the devastating potential to foster long-term stability in the national economy.

  • Bed Bath & Beyond Hits $44
    Posted by on September 23rd, 2010 at 10:35 am

    The stock is very strong today. It seems like only a few weeks ago that BBBY was below $36, which, in fact, it was.

  • McDonald’s Raises Dividend by 11%
    Posted by on September 23rd, 2010 at 10:10 am

    I recently noted that McDonald’s (MCD) stock hit an all-time high. I wrote, “Forty years ago you could have picked up the shares for just 29 cents apiece. That’s adjusted for nine stock splits; four 2-for-1s and five 3-for-2s which equals 121.5-for-1. That’s a gain of close to 26,000% or nearly 15% per year, and it doesn’t include dividends.”

    Well, dividends certainly mean something and McDonald’s just raised its quarterly dividend by 11% to 61 cents per share. The new dividend indicates a yield of 3.25% which is 75 bps more than a 10-year Treasury. If McDonald’s goes bankrupt, what’s the point of the government still being in business?

    McDonald’s is on a roll. The company has increased sales for 88 straight months. If you bought the stock 20 years ago, it’s now yielding you close to 40%. I’m lovin’ it.