Tag Archives: ETF

Tuesday's ETF Movers: REM, MOO

By MarketNewsVideo In trading on Tuesday, the iShares Mortgage Real Estate Capped ETF (REM) is outperforming other ETFs, up about 2.2% on the day. Components of that ETF showing particular strength include shares of American Capital Agency (AGNC), up about 6.3% and shares of American Capital Mortgage Investment (MTGE), up about 5.2% on the day. …read more

Source: FULL ARTICLE at Forbes Markets

Investors Are All In With Money Market Share At Record Low

By Brad Lamensdorf, Contributor

Retail investors have all their chips on the table, so to speak. TrimTabs Investment research reports there has been a record inflow in July into U.S. equity ETF and mutual funds. Meanwhile, retail money market assets as a percentage of stock market capitalization recently reached a record low. As the chart indicates, extreme readings, both high and low, are associated with a change in the direction of the market.  The current reading (bottom chart) is the most extreme low yet. …read more

Source: FULL ARTICLE at Forbes Latest

Trending Now: A New Gold Rush?

By Doug Ehrman, The Motley Fool

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After plunging first through $1,500 per ounce and then $1,400 per ounce, gold seems to have not only reversed, but begun to trend higher, rising seven of the eight trading days since the two-day slide. Helping the rise in prices has been increased demand for physical gold by both individuals and central banks. Further aiding the recovery is that many of the short-term forces that were weighing on gold prices have either been resolved or removed. Still, you must wonder if gold prices are getting an extended dead-cat bounce before falling lower, or if a new trend is being established.

Gold Price in U.S. Dollars data by YCharts

Look out below
After falling through a critical support level at $1,500, gold wasted no time dropping all the way through the next century mark at $1,400. So severe was the fall that Goldman Sachs quickly advised its customers to avoid the precious metal, pointing out that cash outflows were likely to take the commodity lower. With the investment bank’s price target for gold at $1,545 for 2013, however, current prices make the metal look cheap, at least as a near-term proposition. That said, it has set its 2014 price target at $1,350, so the longer-term outlook is not great.

The impact of the Cyprus crisis shouldn’t be overlooked, either. As a part of the bailout, Cyprus had to liquidate its gold positions to raise cash. This isn’t expected to have a lasting effect, but it probably added to the downward pressure. Even Goldman’s negative view on gold discounts the short-lived impact of these events: “With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely.”

One of the effects of Cyprus and other global macroeconomic events is that the U.S. dollar strengthened. This has been a drag on gold as safe-haven capital is enticed out of the precious metal and into dollar-denominated options. All of these factors pushed down prices, but only temporarily.

Trending does not make a trend
Just because gold has come off its recent lows, that alone doesn’t mean a new trend has started. Factors that should be considered, however, include the fact that despite the highest level of capital outflows from the SPDR Gold Trust ever, the ETF has also recovered since the slide. There also seems to have been a structural shift going on in the past week, potentially driven by the increased demand for physical gold. Central banks have been buying bullion, and individuals have bought sufficient quantities that the U.S. Mint has temporarily halted sales of one-tenth-ounce coins.

More fundamental to the structural shift in the market is that after an extended period of underperformance by gold miners such as Goldcorp and Newmont Mining , this phenomenon has reversed for the time being. As of

Source: FULL ARTICLE at DailyFinance

4 Cheap and Easy Ways to Buy the Stock Market

By Dan Caplinger, The Motley Fool

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Millions of investors around the world rely on the stock market to help them grow their wealth and meet their long-term financial goals. But many investors steer clear of stocks because they’re not sure how to pick the best ones to invest in or how to avoid problem stocks that can cost them their entire life savings.

Fortunately, if you want a cheap and easy way to add stock market exposure to your investment portfolio, then your smartest move could be to buy one of many exchange-traded funds that seek to mirror the returns of the S&P 500 or other benchmarks covering similarly large swaths of the stock market. To give you a sense of the variety of such funds that are available, let’s take a look at four ETFs that invest primarily in S&P 500 stocks to compare their good and bad points.

SPDR S&P 500
The granddaddy of the ETF world, the fund known as the Spiders takes a brute-force approach to index investing, owning shares of all 500 stocks in the S&P 500 in roughly the same proportion as their weightings in the index. With identical holdings to the S&P, the SPDR ETF essentially guarantees that you’ll match the index’s return, less minimal net expenses of less than 0.10% annually.

Vanguard Total Stock Market
In addition to having its own separate S&P 500-tracking ETF that uses the same approach as the SPDR ETF yet charges just half the expenses, Vanguard also offers its Total Stock Market ETF, which owns not just the 500 stocks in the S&P but also 2,700 more stocks that make up the MSCI US Broad Market index. The result is a small amount of exposure to small- and mid-cap stocks in addition to its core large-cap holdings. When smaller companies perform better, that gives the Vanguard ETF an advantage over SPDRs and other S&P-tracking funds, and its rock-bottom 0.05% expense ratio is about as cheap as you can get.

Guggenheim S&P 500 Equal-Weight
Equal-weight ETFs own the same stocks as regular S&P 500-tracking funds, but with a catch: rather than weighting the amount it invests in each stock by market capitalization, the Guggenheim ETF has roughly equal dollar amounts invested in all 500 of its holdings. Lately, that has produced better returns than the overall S&P, because of weak performance from the S&P’s largest companies. With an expense ratio of 0.40%, the Guggenheim offering isn’t the cheapest ETF available, but if you like simplicity and think that smaller companies are poised to outperform their larger counterparts, then the equal-weight ETF may be the right pick for you.

ProShares Ultra S&P 500
The ProShares ETF uses leverage to provide double the daily return of the S&P 500. In addition to holding individual stocks, the ETF also uses derivatives like swaps and futures contracts to get its leveraged return. Yet as the company’s website notes, returns

Source: FULL ARTICLE at DailyFinance

5 Dividend ETFs With 5 Very Different Strategies to Boost Your Income

By Dan Caplinger

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Income-hungry investors have been turning more and more to dividend ETFsexchange-traded funds that focus on stocks that pay out healthy amounts of income to their shareholders.

Although these funds share a common goal — boosting investors’ income — all dividend ETFs are not the same. In fact, they can have profoundly different methods for determining which stocks make the cut. Here’s a closer look at how five ETFs slice and dice the universe of dividend-paying stocks, and a few things you need to consider if you’re interested in adding them to your portfolio.

1. Vanguard Dividend Appreciation (VIG)
This Vanguard ETF seeks out stocks that have a long history of increasing their dividends over time. The index that the ETF tracks starts out by screening for stocks that have raised their dividends every single year for at least a decade, and then applies some additional tests to ensure the stocks it owns are liquid and easily tradable. Currently, the ETF owns almost 150 stocks that have passed those tests.

At just 2.1 percent, the Vanguard ETF‘s yield is fairly low compared to other dividend ETFs, as current yield is a secondary consideration for the Vanguard ETF. But over time, growing dividend payouts should give investors regular raises in their income levels in future years.

2. iShares Dow Jones Select Dividend ETF (DVY)
This iShares dividend ETF has the same goal as the Vanguard ETF of picking strong dividend stocks with histories of rising payouts. But the iShares ETF goes at it a slightly different way — first looking at the highest-yielding stocks in the market and then going down the list, picking only those stocks that have current dividends that are higher than their five-year averages and that pay out 60 percent or less of their earnings as dividends.

The result is a greater number of high-yielding stocks in the iShares ETF‘s portfolio, with the ETF carrying a current yield of 3.7 percent.

3. WisdomTree Emerging Markets High-Yielding Equity ETF (DEM)
This WisdomTree ETF takes dividend investors outside the U.S.: Its holdings are in promising emerging-market stocks that pay substantial amounts of dividend income. With stocks from China, Brazil, Russia and more than a dozen other countries, the ETF chooses companies whose dividends rank in the top 30 percent of WisdomTree’s broader index of dividend stocks and then buys them in appropriate amounts based on the total amount of dividends they pay.

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This method produces a mix of stocks of all sizes, and its current 3.4 percent yield as measured by the SEC rewards investors for taking on international exposure in their portfolios.

4. SPDR S&P International Dividend ETF (DWX)
This SPDR ETF also has an international focus, but it tracks a broader set of

From: http://www.dailyfinance.com/2013/04/17/dividend-etfs-strategies-Vanguard-iShares-spdr-wisdomtree/

4 Ways 'Free' ETF Trading Could Cost You

By Dan Caplinger

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Investors have pumped well over $1 trillion into exchange-traded funds, steadily moving their money out of older-style traditional mutual funds and into this investing world darling. It’s no wonder: Investors prefer the lower costs, tax savings, and greater flexibility that ETFs offer compared to regular mutual funds. And ETF providers have done everything they can to bolster demand for their products.

But even though financial companies are offering free ETF trading to clients, you need to be aware of both the pros and the cons of their offers before you jump in with both feet.

The Flip Side of ‘Free’

One big downside to ETFs is that you’ve traditionally had to pay brokerage commissions to buy and sell shares. But recently, several online brokers have offered no-commission ETF trading, taking away the last obstacle for many investors who want to incorporate ETFs into their investment portfolios.

As attractive as free commissions sound, you have to read the fine print to be absolutely sure about what you’re getting. In particular, here are four things to watch out for with commission-free ETF offers:

1. Not all ETF trading is free. The brokers that offer commission-free ETFs include only certain ETFs on their free lineups. For instance, Vanguard includes its own proprietary ETFs, but if you want to invest in another provider’s ETFs, you’ll have to pay regular commissions. Similarly, Fidelity, TD Ameritrade (AMTD), Schwab (SCHW), and a host of other discount brokers have made arrangements with various ETF providers to offer their ETFs at no commission. But if you stray from their respective lists, ordinary commission charges apply. So if you decide to open a brokerage account based on a broker’s free-ETF offer, make sure that you like the ETFs available at no commission from that broker, or else you’ll be in for a costly surprise.

2. “Free” can turn into “fee.” Many brokers discourage the use of commission-free ETFs for frequent trading by imposing additional restrictions, such as 30-day minimum holding periods or trading limits. If you violate those terms, then you may end up having pay the regular commission after all — or even an extra penalty as a short-term trading fee. If you’re a long-term investor, those fees won’t be a problem. But if you’re expecting to buy and sell ETF shares more frequently, then those programs won’t help you avoid costs.

3. Commission-free doesn’t equal good. In assessing a broker’s free-ETF offerings, make sure that the eligible ETFs meet your quality standards. In particular, what you should watch out for are ETFs with relatively high expenses. Even small differences in ETF expense ratios can add up to thousands of dollars in lost returns over long periods of time, dwarfing the savings from avoiding a commission of $10 or less. Stick with brokers that offer high-quality, low-cost ETFs,

From: http://www.dailyfinance.com/2013/04/16/free-etf-trading-caveats/

Hedge Fund Billionaires John Paulson And David Einhorn Lost $640M In Gold Bloodbath

By Agustino Fontevecchia

The gold bloodbath that hit the market over the past two trading sessions has definitely caused a dent in the portfolio of billionaire hedge fund managers. John Paulson and David Einhorn suffered combined losses of more than $640 million since Friday, according to their latest SEC filings, with the bulk concentrated in the former?s massive position in the SPDR Gold ETF. Einhorn’s Greenlight took a big hit on its holdings of the gold miners ETF.

From: http://www.forbes.com/sites/afontevecchia/2013/04/15/hedge-fund-billionaires-john-paulson-and-david-einhorn-lost-640m-in-gold-bloodbath/

Can TD AMERITRADE Make Money From Record-High Markets?

By Dan Caplinger, The Motley Fool

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On Tuesday, TD AMERITRADE will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Discount brokers have become increasingly popular as a low-cost way to invest, and TD AMERITRADE is a big player in the discount brokerage space. But competition has become fierce, and even with markets at new highs, some investors have been reluctant to put their money to work ever since the bear market of 2008. Let’s take an early look at what’s been happening with TD AMERITRADE over the past quarter and what we’re likely to see in its quarterly report.

Stats on TD AMERITRADE

Analyst EPS Estimate

$0.26

Change From Year-Ago EPS

4%

Revenue Estimate

$676.3 million

Change From Year-Ago Revenue

0.5%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Are things looking up for TD AMERITRADE?
Analysts have gotten more optimistic about TD AMERITRADE’s earnings prospects over the past few months. They’ve boosted their earnings-per-share estimates for the just-ended quarter by a penny, and full-year fiscal 2013 estimates have risen by a nickel per share. The stock has also performed well, jumping more than 11% since early January.

TD AMERITRADE and its discount peers offer low-cost trading for stocks, ETFs, and other financial products. By offering services at a fraction of the cost of full-service brokers, discount brokers have grown substantially over the years, broadening their product lines and offering new services such as banking.

But the industry has gotten fiercely competitive, especially as trading activity has fallen in recent years. TD AMERITRADE has answered by joining the big fee fight over exchange-traded funds, with its offering more than 100 ETFs from various fund families at no commission. Yet archrival Schwab answered back with its ETF OneSource offering earlier this year, with a suite of 105 ETFs one-upping TD AMERITRADE’s list.

Competition is also coming from other corners. Leveraging its purchase of Merrill Lynch during the financial crisis, Bank of America has reupped its efforts to attract new customers through its Merrill Edge discount-brokerage unit in an attempt to gain the opportunity to cross-sell clients into B of A banking and other financial products.

In TD AMERITRADE’s quarterly report, be sure to see how the broker’s ETF business is faring against Schwab and other competitors. If its attempt to draw in assets has been successful, then the move could continue paying dividends for TD AMERITRADE well into the future.

Bank of America has worked hard to become an all-purpose provider of financial services to millions of customers. But does the stock belong in your portfolio?

From: http://www.dailyfinance.com/2013/04/14/can-td-ameritrade-make-money-from-record-high-mark/

The World's Top Bank Tells Investors to Shun Gold

By Doug Ehrman, The Motley Fool

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For the second time this year, Goldman Sachs slashed its forecasts for gold prices for both 2013 and 2014, adding to the pressure on gold prices lately. So far, 2013 has seen the Dow Jones Industrial Average up nearly 11%, the S&P 500 up nearly 9%, and gold prices down more than 5%. Even with the global and U.S. economies continuing to show signs of weakness, gold prices have moved very little since late 2011. Given the negative view that Goldman is taking of gold, the bank now suggests shorting the commodity. While I don’t see things for gold as being quite that weak, significantly reducing your exposure to gold seems prudent.

Gold Price in U.S. Dollars data by YCharts.

Goldman’s case against gold
In the current round of price reductions, Goldman lowered its average price per ounce outlook for 2013 from $1,610 to $1,545. The investment bank now sees the price contracting to $1,350 in 2014, which is a significant reduction from the $1,490 price target it once held. For the rest of the year, Goldman sees plenty of negative pressure: “While there are risks for modest near-term upside to gold prices should U.S. growth continue to slow down, we see risks to current prices as increasingly skewed to the downside as we move through 2013. In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast.”

One of the potential catalysts for the above-mentioned increased decline is an accelerating deterioration in investor confidence. A great number of gold investors piled into the commodity on a speculative basis to not miss the expected move. As prices continue to stagnate and fall, investor capital is likely to look for greener pastures more and more quickly. As speculative positions are unwound and more stop-losses at triggered, the move lower could be sharp.

Spikes lower are actually a hallmark of commodities. Prices usually trend gradually higher, or even sideways, but when moves lower happen, they tend to be violent and expensive. This is one of the reasons so much risk is often associated with commodities trades — the move lower can occur before you have a chance to get out. Owning shares of ETFs such as the SPDR Gold Trust can mitigate some of this risk, but large speculative positions in GLD may have contributed to gold’s run, making the relative protection of the ETF somewhat diminished.

Is there safety in miners?
For an extended period, gold miners such as Barrick Gold have underperformed the pure commodity play. Over the past year, Barrick is down more than 40%, while GLD is down about 7%. Over the long term, you would expect this relationship to normalize, meaning miners should outperform at some point. When this happens, however, there’s no guarantee that either investment will be headed higher — the miners

From: http://www.dailyfinance.com/2013/04/14/the-worlds-top-bank-tells-investors-to-shun-gold/

Be Civilized and Don't Buy Gold in 2013

By Doug Ehrman, The Motley Fool

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When Warren Buffett speaks, the investment world tends to listen, and for good reason. Likewise, when Buffett’s second in command, Berkshire Hathaway Vice Chairman Charlie Munger, expresses an opinion, you should take note. Nearly a year ago, Munger told CNBC that he thinks that “civilized people don’t buy gold,” instead preferring a collection of well-run business, much like those in Berkshire’s portfolio. While his advice was sound a year ago, it truly resonates this year as analysts across the street slash price expectations and, in some cases, recommend being short gold. Given the turmoil and increasingly negative outlook settling over the gold market, 2013 may be a good year to sit out in pursuit of more prim and proper pursuits.

What Munger advocates
Rather than focus such plebian investment vehicles as gold, or even the gold ETF — the SPDR Gold TrustMunger talks up Berkshire’s holdings:

We just have a wonderful portfolio in business, if you average them out. By and large they’re doing productive, useful work. It’s not outsmarting the computer systems in the trading markets.

Even though the comment is self-serving, and arguably stale, it highlights an important concept when thinking about the gold market, namely that gold doesn’t really do anything. Unlike silver, which has a myriad of industrial uses, as do Molycorp‘s rare earths, gold is mostly coveted as a safe-haven investment or inflation hedge.

“I think civilized people don’t buy gold,” Munger said; “they invest in productive businesses.” Where the rare earth materials produced by Molycorp and others are used in health care, technology, water treatment, and defense applications, gold is used for very little beyond jewelry. He may not have had other materials companies in mind, but this distinction for gold is an important one and should not be lost.

The analysts are circling
Both Goldman Sachs and Deutsche Bank recently cut their respective outlooks for gold for the rest of 2013 and beyond. Deutsche focused on the strength of the U.S. dollar, the shift into stocks, and its view on improving U.S. growth as all being negative for gold over the medium and longer terms. It trimmed its 2013 outlook by nearly 12% and, while it dropped its 2014 projection by 4.7%, it still sees gold climbing to $1,810 next year.

Goldman’s view is much grimmer, leading the investment bank to recommend that clients go short gold ahead of continued weakness. In its second cut of the year, Goldman dropped its 2013 price target to $1,545 and its 2014 target to $1,350, well below the estimate of many peers. Some of the reasons cited include the muted response gold prices have had to economic weakness and the potential for accelerated selling pressure as speculative investments are wound down.

Ultimately, I believe reality lies somewhere in between the views of the two investment houses, with the real possibility that another debt hiccup in Europe could serve as a catalyst to redraw the

From: http://www.dailyfinance.com/2013/04/13/be-civilized-and-dont-buy-gold-in/

These Stocks Could Gush — Some Already Have

By Selena Maranjian, The Motley Fool

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some global energy stocks to your portfolio, the iShares MSCI Global Energy Producers ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF‘s expense ratio — its annual fee — is a relatively low 0.39%. The fund is very small, though, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is too new to have a sufficient track record to assess. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why energy?
Energy is a defensive sector, as demand for it doesn’t drop by a lot when economic times get tough. Interest in alternative energies is definitely growing, but we’re still quite dependent on good old oil and gas. Thus, oil and gas exploration and production companies are worth considering — and some of them have been getting involved in alternative energies, too.

Some energy companies had strong performances over the past year. Phillips 66 has been profiting by processing cheap U.S. oil and then selling it at higher prices in Latin America and Europe — thereby helping keep fuel prices in the U.S. high. Phillips management recently signaled confidence via a dividend hike of about 25% — its yield is 1.9% now. The stock took a bit of a hit recently due to proposed sulfur-reduction regulations from the EPA that would result in greater expense for the company, in order to comply. Meanwhile, Phillips is spinning off a master limited partnership.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Apache , yielding 1.1%, shed 19% over the past year, in part due to lower-than-hoped-for production levels. But that’s due to the company investing capital in projects that won’t immediately bump production much. Only 11% of Apache’s revenue last year came from natural gas, and unlike some peers, it’s cash-flow positive as well. It hiked its next dividend by a big 18%, and its plans to drill more wells are also promising. On various counts, the stock seems inexpensive. Meanwhile, a board member recently bought some $740,000 worth of shares.

Suncor Energy shed 4%, and yields 1.8%. It’s Canada’s largest energy company, with expertise in deep oil sands. The company recently canceled its plans to upgrade its Voyageur plant in northern Alberta, due in part to competitive pressures. Thus,

From: http://www.dailyfinance.com/2013/04/12/these-stocks-could-gush-some-already-have/

Profit From These Double-Digit Growers

By Selena Maranjian, The Motley Fool

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some big, technology-heavy stocks to your portfolio, the Direxion Nasdaq-100 Equal Weight Index ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Nasdaq-100 ETF‘s expense ratio — its annual fee — is a relatively low 0.35%. The fund is very small, too, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is too new to have a sufficient track record to assess. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why Nasdaq-100 and equal-weighting?
Nasdaq-100 stocks offer the benefits of large-cap status, which can provide a bit more stability than small caps, and they’re often in rapidly changing and growing industries, as well. Equal weighting is a sensible way to structure an index, as it doesn’t let the biggest companies overly influence the index’s returns, when the smaller ones, which might be able to grow faster, are left less powerful.

More than a handful of big, technology-heavy companies had strong performances over the past year. Seagate Technology surged 52%. Despite that, with a P/E ratio recently below 5, it’s still a seemingly cheap stock. It’s been whacked by the decline of the PC, but there’s still hope as cloud computing takes off and requires storage, and if solid-state drives grow in demand. Some don’t like the prospects for Seagate’s main drive business, though, and think Seagate is cheap, but not that attractive.

Vertex Pharmaceuticals jumped 48%, as it looks to expand the application of its promising cystic fibrosis drug, Kalydeco. Vertex recently entered into a deal with Bristol-Myers Squibb to pursue a treatment for Hepatitis C. 

Micron Technology gained 41%, with bulls seeing growth in tablets and smartphones driving demand for memory chips. The stock soared to a 52-week high recently, when Micron posted its second-quarter earnings. Bulls liked the report, seeing lower costs and rising margins hinting at a return to profitability soon. Micron’s purchase of Japanese manufacturer Elpida seems promising, boosting its capacity and its relationship with Apple. Bears worry about Micron losing market share, though.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Nuance Communications , a speech-recognition software specialist, slid 10%. Many had expected the health-care field to offer great new opportunity for the company, but now, some worry about competitors

From: http://www.dailyfinance.com/2013/04/11/profit-from-these-double-digit-growers/

Will Schwab's Recent Moves Pay Off?

By Dan Caplinger, The Motley Fool

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Earnings season has begun, and next Monday, Charles Schwab will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Schwab has been a longtime leader in the discount brokerage space, taking advantage of the rise of the Internet to offer a wide array of services to customers. Yet the market meltdown hurt its core business in several ways, and the company has had to work hard to recover ever since. Let’s take an early look at what’s been happening with Schwab over the past quarter and what we’re likely to see in its quarterly report.

Stats on Schwab

Analyst EPS Estimate

$0.16

Change From Year-Ago EPS

6.7%

Revenue Estimate

$1.27 billion

Change From Year-Ago Revenue

6.5%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will Schwab benefit from market records this quarter?
Analysts have had mixed views on Schwab’s earnings lately. In the past month, they’ve cut their consensus for the just-ended quarter by $0.01 per share, but they boosted their full-year 2013 calls by a penny per share as well. Investors have gotten more optimistic lately, with the stock up 13% since early January.

Schwab has done its best to capitalize on increased interest in investing in light of the big run-up in the stock market. In January, the company topped $2 trillion in total client assets for the first time ever, and as of February, it had seen a 13% jump in assets. Yet trading activity remains muted, with just a 1% year-over-year increase in daily average trades.

In order to encourage greater investor participation, Schwab recently boosted its presence in the red-hot exchange-traded fund market. Schwab pioneered commission-free ETF investing more than three years ago, but since then, rivals had cut into Schwab’s minimalist lineup of proprietary ETFs with broader deals. TD AMERITRADE  had issued a lineup of more than 100 no-commission ETFs from various fund families, drawing investors interested in greater variety of funds. In response, Schwab came out with its ETF OneSource platform, topping TD Ameritrade with 105 ETFs.

The big potential for Schwab lies in going after 401(k) accounts. Currently, mutual funds dominate 401(k) plan investment options, but ETFs are making inroads into the multitrillion-dollar industry. Despite existing competition from TD AMERITRADE and Capital One‘s ShareBuilder — and with Fidelity’s recent expansion of its ETF partnership with BlackRock‘s iShares unit signaling another potential entrant to the space — Schwab’s plans to launch an all-ETF 401(k) plan next year could tap a larger part of a lucrative market.

In Schwab’s quarterly report, look for more

From: http://www.dailyfinance.com/2013/04/11/will-schwabs-recent-moves-pay-off/

How to Copy Hedge Funds (and Collect Some Big Dividends)

By Selena Maranjian, The Motley Fool

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some stocks that are popular with hedge-fund managers to your portfolio, the Global X Top Guru Holdings Index ETF (NYSEMKT: GURU) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Global X ETF‘s expense ratio — its annual fee — is 0.75 %. It’s also very tiny, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is way too new to have a sufficient track record to assess. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver. The ETF aims to hold the stocks owned by a select group of hedge funds with an equity focus and relatively long holding periods, and it focuses on those funds’ strongest-conviction holdings.

Why Gurus?
If you’re interested in hedge fund investing, know that it’s not for most of us. You typically have to be a rather wealthy sort, and if you’re able to invest in such funds, they typically take 2% of your total asset value every year, plus 20% of your annual profits. This ETF, though, simply takes less than 1% of your investment each year.

More than a handful of Guru-approved companies had strong performances over the past year. Hartford Financial Services Group and Motorola Solutions each surged 31%. Hartford has been shifting its focus from annuities, retirement planning, and life insurance toward property and casualty insurance. It has been tackling its significant debt, and its fourth-quarter earnings exceeded expectations. The stock has exhibited volatility, but some see it as undervalued now, with a forward P/E ratio of just 8.

Motorola Solutions delivers communication infrastructure, devices, software, and services to governments and businesses globally. One offering, for example, is public safety radio systems. It recently hit a 52-week high and its fourth-quarter report featured double-digit earnings gains and revenue up 6% as well. Some worry about R&D cutbacks, while others like that it’s borrowing money to buy back shares. (That’s not always smart, if shares are not undervalued, though. And Motorola Solutions has recently been trading at a forward P/E of 14.6%.)

Mortgage REIT Annaly Capital Management gained 15%, and has many investors drooling over its 11.3% dividend yield. But it has also lost some fans, due to worries about rising interest rates hurting the company or its adding more risk by expanding beyond agency-backed securities. Some even worry about nepotism in

Source: FULL ARTICLE at DailyFinance

Ask a Fool: Green Tech ETFs

By Andrew Tonner, The Motley Fool

Filed under:

In the following video, Motley Fool tech and telecom analyst Andrew Tonner takes a question from a Fool follower on Facebook, who asks, “What are your thoughts on green tech investing and any related ETF recommendations?”

It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out “Who Will Win the War Between the 5 Biggest Tech Stocks?” in The Motley Fool‘s latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Ask a Fool: Green Tech ETFs originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

The 14% Rate of Corporate Profits Will Eventually Revert to the Mean, Spoiling the Party

By Robert Lenzner, Forbes Staff But when? It’s the combination of Quantitative Easing plus the ability of large public multinationals to increase their profits on revenues that has powered this market— call it the Bernanke market, if you will. Think about it. 14% profits on revenues cannot continue indefinitely– especially if QE gets a bit of rejiggering sometime this year or next, as some regional Fed bosses are murmuring about.In fact, since World WAr 2, corporate profits after tax seem to retreat often enough to a range between 5% and 9% dependinmg on the severity of the economic cycle. So, I thought it was about time to consult the nature of the early warning signals that are about and see how they might play in the financial markets today. And I spotted this early warning signal NUmber One in the HUssman Funds founder John Hussman‘s weekly market comment of April 8; “Companies issuing negative earnings preannouncements for Q1 2013; 78%.” Holy Cow! THe advance indications from companies themselves about their first quarter 2013 earnings are for a decrease in profits per share– not an increase. Horror of horrors; the bearish Hussman is even considering the possiblity of the nation drifting into another recession. Just think what that will do to the unemployment figures– much less corporate profits. To buttress his case, Hussman raises the issue most sophisticated investment advisers are wondering, sometimes aloud– about the “successively lower levels” of economic activity that result from each new bout of QE. Today, the $85 billion QE is particularly suspect in the light of the unexpected weakness in job creation (88,000-last month)and the softness in the Chicago Purchasing Managers index. Here’s Hussman on April 8, writing ” For my part, I continue to expect the U.S. economy to join a global recession that is already” starting in much of the developed world. In light of this dark view it’s no surprise that Hussman scoffs at the consensus view that stocks are cheap at 14 times earnings– but “are instead strenuously overvalued.” Overvalued, you see, in the wake of the very bubble created by the Fed’s QE policy. That 14% corporate profit rate– you eee–is to some extent the unusual result of the Fed maintaining interest rates at near zero. At zero, at 2%, corporations can borrow money to do their business and still report very solid profits, thank you very much. And yes, if interest rates go still lower, profits might temporarily move slightly higher– all the while increasing your downside risk at the certain to happen reversion to the mean of corporate profits. THere’s other signs of the top as well. One of my newest financial gurus,John Maulkin of Dallas, sent me the April 9 King REport, from M. RAmsey KIng Securities, Inc. which woke me up to a quite worrisome technical sign in the market. ” A disturbing sign for equities is financial stocks have turned soft. Since 2009, financial stocks have led stocks. The XLF( financial stock ETF index) tends to peak a few weeks

Source: FULL ARTICLE at Forbes Latest

Dangerous Times Ahead for Gold

By Doug Ehrman, The Motley Fool

Filed under:

Whether you invest in the SPDR Gold Trust ETF or prefer a direct allocation to gold miners like Barrick Gold or Goldcorp , global macroeconomic issues are swirling to push gold prices into a volatile period. Pressures out of China and the fallout from the Cyprus bailout in the EU are just beginning to be understood. While the pure play of the ETF may be safer, the recent underperformance of the miners has some investors convinced that despite ballooning production costs, these embattled companies are the smarter play.

In the following video, Fool.com contributor Doug Ehrman discusses two of the most important global macro catalysts affecting gold today. While the full ramifications of these developments are hard to gauge, he points to certain factors that should remain on the minds of gold investors in the coming months.

Goldcorp is one of the leading players in the gold mining market. For the past several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth. Goldcorp’s low-cost production of one of the most sought-after metals in the world continues to make this stock an attractive choice for long-term investors. To learn everything you need to know about this mining specialist, you’re invited to check out The Motley Fool’s premium research report on the company, which comes with a full year of ongoing updates and analysis to keep you informed as key news breaks. Click here now to claim your copy today.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Doug Ehrman“, contentId: “cms.30145”, contentTickers: “NYSE:GG, NYSE:ABX, NYSEMKT:GLD”, contentTitle: “Dangerous Times Ahead for Gold”, …read more

Source: FULL ARTICLE at DailyFinance

An Easy Way to Make Money in Oil, Gas, and Fracking

By Selena Maranjian, The Motley Fool

Filed under:

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some oil and gas stocks to your portfolio, the Market Vectors Unconventional Oil & Gas ETF  could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF‘s expense ratio — its annual fee — is 0.54%. The fund is very small, though, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF is too young to have a sufficient track record to assess. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why oil and gas?
Oil and gas exploration and production companies are worth considering because despite growing interest in alternative energy, we’re still quite dependent on good old oil and gas. The growing practice of fracking, in particular, is presenting great promise while also inspiring passionate opposition.

More than a handful of oil and gas companies had strong performances over the past year. Hess surged 25%, amid its transformation into a pure-play exploration and production company after it shed its downstream operations (i.e., refineries, gas stations, etc.). With the money it raises from divestitures, the company plans to significantly hike its dividend and pay down debt. Hess has also been a target of agitation by activist investment company Elliott Management.

Houston-based oil and natural gas company Linn Energy gained 6% and offers a hefty dividend yield of 7.6%. Better still, some expect further increases in the payout, due to recent income-generating acquisitions. The company specializes in buying mature, productive energy assets. It’s also admired for its successful long-term hedging and organic growth, and is seen by some as a very promising investment

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Chesapeake Energy slid 9%. Long reviled by many for questionable and regrettable management moves, it has been selling assets and addressing sizable debt. Bulls like its major presence in the promising Utica shale field, among other things.

Exploration and production specialist Whiting Petroleum shed 10%. It’s a major operator in the productive Bakken region, and its last earnings report featured record production and growing proved reserves. Management also expects double-digit production growth in 2013. Bulls like its well-positioned and sizable asset portfolio, and the company seems undervalued as well.

The big picture
Demand for oil and gas isn’t going away anytime soon. …read more

Source: FULL ARTICLE at DailyFinance

Make Money in Growing Environmental Stocks — the Easy Way

By Selena Maranjian, The Motley Fool

Filed under:

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some environmental services stocks to your portfolio, the Market Vectors Environmental Services ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF‘s expense ratio — its annual fee — is 0.55%. The fund is very small, so if you’re thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has outperformed the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why environmental services?
Interest in environmental responsibility and alternative energies has been growing, and is likely to keep doing so. Many of the companies in environmental services are still small, with lots of room to grow. And since we can’t know which ones will grow most, it can make sense to invest in a bunch of them, as this ETF permits.

More than a handful of pro-environment companies had strong performances over the past year. Waste Management surged 14%. Unbeknownst to many, the leader in garbage collection is also a recycling giant and a leader in converting waste and landfill gases to energy. It offers a hefty 3.8% dividend yield as well, and it has been streamlining its business and cutting costs.

Rentech gained 6%. It has offered investors early entry into the biofuel industry and established nitrogen fertilizer operations. Its bottom line has been in the red recently and it’s a penny stock, but its free cash flow has turned positive. The company has been shifting its focus away from alternative energy and toward opportunities that offer more immediate payoffs.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Veolia Environnement shed 8%, and has been doing its own shifting of focus, shedding waste operations and boosting its water management work. It’s cutting costs and working on paying down a lot of debt, and its earnings recently dipped into the red.

Clean Harbors slid 15%, with some investors not excited about its $1.25 billion acquisition of Safety-Kleen. That buy can help the disaster-relief and clean-up specialist address oil spills, though, which seem like they’ll be with us for quite some time. The company is poised to profit in other ways, too, such as by dealing with climate-change-related storms that wreak havoc on coastlines. Its operational diversification is another plus.

The …read more

Source: FULL ARTICLE at DailyFinance

The S&amp;P 500's 5 Most Loved Stocks

By Sean Williams, The Motley Fool

Filed under:

The first quarter was a truly memorable quarter from an investors’ standpoint. In a matter of four years, we went from the lost decade to an all-time record closing high for the broad-based S&P 500 . The most intriguing aspect of the 10% rally this quarter was that nearly every sector participated in moving the index higher.

As we saw on Friday, not all investors supported the markets’ broad rally, as is evidenced by the extreme short interest in the five “most hated” stocks within the S&P 500 that I highlighted on Friday. Today, I thought it worthwhile to examine the five most loved (i.e., least short-sold) stocks within the S&P 500.

Company

Short Interest as a % of Shares Outstanding

Berkshire Hathaway

0.04%

Beam

0.57%

Coventry Health Care

0.59%

Fidelity National Information Services

0.59%

Brown-Forman

0.64%

Source: S&P Capital IQ.

Just as we did with the S&P 500’s most hated stocks, I propose we examine the reasoning behind why short-sellers might be avoiding these five companies and take a closer look at whether current investors have any reasons to worry.

Berkshire Hathaway
Why are short-sellers avoiding Berkshire Hathaway?

  • It’s easy to see why short-sellers avoid Berkshire Hathaway‘s class “A” shares like the plague: It’s a mixture of price and diversification. At more than $156,000 per share, it can be incredibly painful from a margin perspective for short-sellers to get their hands on Berkshire’s class “A” shares. Also, Berkshire Hathaway is a conglomerate, holding 56 separate subsidiaries across a myriad of sectors. That type of diversification can usually only be bought with a mutual fund or ETF.

Do investors have a reason to worry?

  • With Warren Buffett at the helm and making the decisions, shareholders have little, if anything, to worry about. Hiccups in Berkshire’s insurance and reinsurance industry have hampered results over the previous two years, but other industries have helped pick up the slack. With a price that will keep short-sellers from gaining a big position in the company, I’d call Berkshire Hathaway‘s “A” shares a safe investment over the long run.

Beam
Why are short-sellers avoiding Beam?

  • Distilled-spirits maker Beam is another company that I feel naturally belongs on this list of least-shorted stocks. Regardless of the condition of the economy, alcohol producers tend to perform well and rarely have to resort to price reductions in order to drive sales. Beam has delivered six straight quarterly earnings beats in a row, including its fourth-quarter results that included an 11% sales increase and a 43% boost in net income.

Do investors have a reason to worry?

  • From a valuation perspective, there’s perhaps a little cause for concern: 21 times forward earnings is a steep price to pay for sales growth of 6% to 7%. However, U.S. spirits volume grew 3% in 2012, according to a report by The Wall Street Journal, which is stronger than …read more

    Source: FULL ARTICLE at DailyFinance