Joseph Lazzaro
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Ray of light: U.S. Treasury cuts October quarter borrowing estimate
One modest ray of light on the fiscal front for the United States: the U.S. Treasury, as expected, announced that total borrowing for the current quarter (October quarter) will be 43% lower, as a result of a reduction in money needed to help the U.S. Federal Reserve manage its balance sheet.
The Treasury said net borrowing will total $276 billion for October thru December, compared to the previous estimate of $486 billion. The Treasury also projects a borrowing of $478 billion for the January-March quarter.
The Treasury said net borrowing will total $276 billion for October thru December, compared to the previous estimate of $486 billion. The Treasury also projects a borrowing of $478 billion for the January-March quarter.
Continue reading Ray of light: U.S. Treasury cuts October quarter borrowing estimate
Expect market churn this week ahead of Friday payroll report
The latter half of this week before Friday's market open is perhaps not the best time to gauge the U.S. stock market's strength. And the reason is obvious enough: look for institutional investors (IIs) to take some money off the table ahead of Friday's non-farm payroll employment report for October from the U.S. Labor Department.
Continue reading Expect market churn this week ahead of Friday payroll report
Stanley Works buys Black & Decker: A win/win for shareholders
A double win: I'm Reiterating by Buy rating for New Britain,Conn.-based tool maker Stanley Works (NYSE: SWK) after the company announced Monday it will buy Black & Decker Corp. (NYSE: BDK) for $4.5 billion in an all-stock deal.Stanley, first recommended on February 10, 2009 at a price of $32.88, sees the deal as $1 accretive to earnings per share within three years.
Meanwhile, shareholders of Black & Decker, first recommended on April 17, 2009 at a price of $33.53, will receive a 22.1% premium to BDK's closing price as of Friday, October 30, 2009 of $47.22, or about $57.65 per share. Hence, if you bought BDK in April, that represents a 71.9% gain for owning the stock about six months. Not bad.
Continue reading Stanley Works buys Black & Decker: A win/win for shareholders
Valero Energy: Hold shares
For now, I'm placing a Hold on Valero Energy Corp. (NYSE: VLO) shares, first recommended on April 20, 2009 at a price of $20.08.Valero, the largest, independent refiner in North America, continues to underperform, as a result of the decline in demand for refined products triggered by the recession.
Continue reading Valero Energy: Hold shares
Logitech's shares are headed north
Institutional Investors are acting as forecast with Logitech International SA (NASDAQ: LOGI): they're piling into the shares, hence, I'm Reiterating my Buy rating for the company, first recommended on April 13, 2009 at a price of $11.40. If you bought LOGI in April, you're up an impressive 52%.Investors are looking right past FY2010's revenue decline, to a likely 15-20% increase in FY2011, on the continued recovery in PC sales. Logitech is a world leader in leveraging its ergonomic and tech-advancing research across multiple platforms: keyboards, mice, game consoles, headsets, speakers, and remote controls, among others. Hence, almost any positive data points for desktop computers causes Logitech's shares to move north.
Continue reading Logitech's shares are headed north
Royal Caribbean's Oasis of the Seas: A floating resort city
Royal Caribbean Cruises Ltd. (NYSE: RCL) reports Q3 earnings results Tuesday, hence I'll await those results before re-evaluating the stock, but today we'll take a moment to highlight a high-profile addition to its fleet: the Oasis of the Seas -- the world's largest oceanliner.Five times larger than the SS Titanic -- 225,282 gross tons and 1,181 feet in length versus Titanic's 46,328 gross tons and 830 feet in length -- the $1.5 billion Oasis will perhaps represent the world's largest and elaborate floating city, in terms of creature comforts (U.S. Nimitz-class aircraft carriers can carry more people, but no, the U.S. Navy does not offer as lavish accommodations nor as much per-person space for military personnel).
Continue reading Royal Caribbean's Oasis of the Seas: A floating resort city
Fiscal stimulus package's primary flaw: It was too small
New York Times (NYSE: NYT) columnist Paul Krugman argues quite persuasively that the major problem with the fiscal stimulus package was that it was too small, given the financial crisis and the large economic crater the accompanying, pronounced recession created. Further, the fiscal stimulus' many benefits -- including substantial job retention in essential public services such as education -- are harder to see and not likely to translate into too much political gain for President Obama and Congressional Democrats, he said. That's consistent with a political science axiom -- often repeated by U.S. Rep. Barney Frank, D-Massachusetts -- that "Congress gets little credit or benefit for averting something." Indeed, retained jobs are hard to see, and the fact that a local public school system is is still operating with as many teachers is an accomplishment, but one that most American voters will take for granted, and not give Democrats credit for.
Continue reading Fiscal stimulus package's primary flaw: It was too small
Kellogg keeps rolling along
Kellogg Company (NYSE: K) is another one of those sleep-well-at-night consumer non-cyclical stocks, hence it goes without saying that I'm reiterating my Buy rating for the company, first recommended on April 13, 2009 at a price of about $40. If you purchased K at that time, you're up 15%. Look for Kellogg's FY2010 revenue to increase a decent 4-6%, aided by tolerable commodity cost increases, and modest pricing power.
Continue reading Kellogg keeps rolling along
Black & Decker is rising with the U.S. housing sector's recovery
As expected, Black & Decker Corporation's (NYSE: BDK) stock is recovering ahead of the U.S. housing sector's better days, which is why I'm Reiterating my Buy rating for the company's shares, first recommended on April 17, 2009 at a price of $33.53. If you bought BDK in April, you're up about 42%.Look for a 4-7% revenue increase for BDK in FY2010, and an 8-10% gain in FY2011, mostly on the U.S. housing sector's stabilization, which will boost the company's power tools and home improvement segments. In this case, 'less bad is good enough' for Wall Street: only mild housing sector growth is forecast, but given the housing sector's three-year swoon, it will look like a day at the beach.
Continue reading Black & Decker is rising with the U.S. housing sector's recovery
Oceaneering International: Pull-back is Buy opportunity
Renewable energy sources are on the rise, but a breakthrough energy form discovery aside, oil will continue to be the world's most important commodity for at least 20 years, and probably for longer than that.And that bodes well for drillers and oil service companies, which is why I'm Reiterating my Buy rating for Oceaneering International (NYSE: OII), first recommended on April 7, 2009 at a price of $38.01. If you bought Oceaneering then, you're up more than 40%.
Continue reading Oceaneering International: Pull-back is Buy opportunity
U.S. Steel: Poised to race ahead during the global economic expansion
Not-for-squeamish U.S. Steel (NYSE: X) is rising on schedule, despite a recent pull-back, which is why I'm reiterating my Buy rating for the company, first recommended on April 15, 2009, at a price of $27.61. If you bought X in April, you're up about 28%.
The rationale for owning X's shares remains the same. U.S. Steel will likely be a survivor in the consolidating global steel sector with sufficient scale to either produce raw materials and acquire raw material assets.
Continue reading U.S. Steel: Poised to race ahead during the global economic expansion
Caterpillar: No longer a big bargain, but still attractive
I'm reiterating my Buy rating for Caterpillar Inc. (NYSE: CAT), first recommended on April 13, 2009, at a price of $33.02. If you bought CAT in April, you're up about 68%.
The growth story remains the same regarding Caterpillar: after a global recession that substantially reduced demand, the U.S. and global recoveries will enable construction and agriculture equipment to continue to rebound. Caterpillar's recent increase in its FY2009 EPS guidance to $1.85-2.05 adds to the positive mix. The First Call FY2009/FY2010 EPS estimates for CAT are $2.00 to $2.67.
Continue reading Caterpillar: No longer a big bargain, but still attractive
Want to know where the Dow is headed? Keep an eye on job growth
Now that the U.S. economy is growing -- GDP grew at a 3.5% annualized rate in Q3, according to U.S. Commerce Department data, one key question for investors large and small is: Is the U.S. economic expansion sustainable? Investors can immerse themselves in data on consumer spending, retail sales, new home sales, auto sales, and factory output etc., and all of those provide clues, no question. But if you're time-pressed and you want one metric to gauge the U.S. economy's likely health 6-9 months from now, monitor: monthly non-farm payrolls, as tallied by the U.S. Labor Department. I.E., how many jobs the U.S. economy lost or created in the previous month.
Continue reading Want to know where the Dow is headed? Keep an eye on job growth
Despite crisis, New York still viewed as financial capital of the world
To say that it's been a difficult decade for New York City, and the nation at large, would be an understatement. In New York, more than 100,000 lay-offs in the financial community stemming from the bursting of the leveraging bubble and closure of key financial institutions has led to the city's worst recession in more than two decades. However, the financial and economic crisis that has slowed New York's economy, surprisingly, has not resulted the loss of one city title -- that of financial capital of the world. 29% of respondents to a survey listed the city as the leading global financial center, with the city that never sleeps topping both Singapore, 17%, and London, 16%, according to a Bloomberg Global Poll. The poll of 1,452 Bloomberg subscribers was conducted October 23-27.
Continue reading Despite crisis, New York still viewed as financial capital of the world
Coach's shares are headed north
Coach Inc. (NYSE: COH) has a winning 'accessible luxury' formula, which is why I'm Reiterating my Buy rating for company, first recommended on April 13, 2009 at a price of $18.22. If you bought COH in April, you're up an impressive 71%. Most investors are aware that in the era of the 'frugal consumer' that's driven by stagnant incomes, difficult labor market conditions, and an uncertain economic recovery timetable, the retail sector is best avoided.
Wow! Why is gold trading at record levels?
Ray of light: U.S. Treasury cuts October quarter borrowing estimate 
Apple's iPhone sees lukewarm reception in China debut
