Tag Archives: John Maxfield

Business, Finance, Occupation & Industry

Billionaire George Soros' 10 Largest Stock Holdings

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By John Maxfield, The Motley Fool

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The famed hedge fund manager George Soros, known for breaking the British pound in 1992, shocked the world on Friday by announcing a 7.91% stake in J.C. Penney . The news sent shares of the ailing retailer sharply higher, making it the best-performing stock on the S&P 500 that day.

Besides throwing J.C. Penney a much-needed lifeline in the equity markets — its shares are down nearly 50% over the past year alone — the move reaffirms one of Soros’ central tenets: “The worse a situation becomes, the less it takes to turn it around, and the bigger the upside.”

The stake, valued at $295 million, makes J.C. Penney the third largest holding of Soros Fund Management, the privately owned hedge fund that’s largely responsible for managing its founder’s wealth. It also adds to an increasingly diverse portfolio of stocks. Among the fund’s other large holdings are companies as disparate as AIG , Johnson & Johnson , and Google :

George Soros’ 10 Largest Stock Holdings | Create infographics

This is contrarian investing at its best — and particularly Soros’ three largest holdings, all of which have run into hard times over the past few years.

The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article Billionaire George Soros’ 10 Largest Stock Holdings originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns AIG, Google, and Johnson & Johnson and has options on AIG. Try any of our Foolish newsletter services free for 30 days. We Fools don’t 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.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should Microsoft Shareholders Begin to Panic Over Falling PC Shipments?

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By Matt Thalman, The Motley Fool

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Shares of Microsoft took investors on quite the ride this week, but even though they plummeted more than 4.42% in just one day, they still managed to end the week higher than were they began. Do investors have anything to worry about? Let’s take a look.

So what happened?
On Monday, Microsoft dropped by 0.38%, after the company announced that it was selling its IPTV business to Ericsson. The terms and price of the deal weren’t disclosed, but it was estimated to sell for somewhere between $100 million and $234 million. The IPTV unit creates software that gives wireless device manufacturers the ability to deliver television signals over the Internet.  

Tuesday came along, and shares were flying high, up 3.57%, with a few analysts crediting Microsoft’s attacks on Google for the rise. Microsoft and a number of other technology companies are claiming Google’s open-source operating system gives it an unfair advantage over the competition. The main problem is that Google gives its operating system away, and Microsoft, which charges for its operating systems, can’t compete. The EU is looking into Microsoft’s allegations against Google, but we’ll have to wait and see who wins this battle. 

Also on Tuesday, the company announced that it’s teaming up with Cisco to help customers reduce complexity while enhancing IT productivity and business agility. The partnership is currently just focused on data centers and how to improve and grow operations in that area of business.  

On Thursday, the IDC released its PC shipment figures for the first quarter of 2013, and they were terrible. Sales dropped 14% in the quarter, while analysts were expecting a decline of only 7.7%. Microsoft tumbled 4.42% on the news and sent the PC manufacturers even further down than that.  

So what now?
Year to date, Microsoft is the sixth worst-performing component of the Dow Jones Industrial Average during 2013, but based on my colleague John Maxfield‘s calculations, it’s only the 14th most shorted Dow component, which would indicate that although the stock hasn’t performed fantastically so far this year, most market participants don’t think the stock is going to crash, either. (To see John’s full list and how much of each Dow component is sold short, click here.)

Although the current trend clearly indicates that PC sales will probably continue to decline over time, it’s clear that as a whole, the market hasn’t lost faith in the company yet, and individual shareholders also shouldn’t sell at this time.

While the company is best known for its Windows operating system, that’s now become just a small piece of the modern-day Microsoft. The company has a number of different revenue streams today:

<td

From: http://www.dailyfinance.com/2013/04/14/wild-ride-for-microsoft-shareholders-this-past-w/

Sector

Revenue

Operating Income (Loss)

Windows

$5,253

$2,671

Server and Tools

$5,191

$2,129

Online Services

$893

($283)

Microsoft Business

$6,491

$4,367

Entertainment and Devices

Business, Finance, Occupation & Industry

Home Depot Stock Has Gotten Ahead of Itself

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By John Maxfield, The Motley Fool

HD Dividend Chart

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It’s pretty clear at this point that the housing market is recovering, albeit slowly. Housing values are ticking up. Sales volumes are increasing. And stock in homebuilders and companies like Home Depot has responded in kind. But in the latter case, at least, it appears investors may have gotten ahead of themselves.

Consider the dividend yield on Home Depot stock. At 2.2%, there’s no question that it’s generous relative to the 10-year Treasury bond, which is paying a paltry 1.78%. But the same cannot be said when it’s compared to more analogous securities. According to The Wall Street Journal, for example, the dividend yield on the Dow Jones Industrial Average is 2.78% — nearly 60 basis points higher than Home Depot‘s.

HD Dividend data by YCharts.

Mind you, the yield isn’t low because the company hasn’t increased the quarterly payout on its common stock. As you can see in the chart above, Home Depot has done so consistently over the past 10 years. Most recently, in February of this year, it hiked the quarterly distribution by an impressive 34%, in addition to announcing a $17 billion repurchase program.

Home Depot stock is similarly expensive if measured against the price-to-earnings ratio. Trading at 23.71 times earnings, it’s the most expensive it has been in nearly a decade. “Even during 2006 and 2007,” Motley Fool blogger Timothy Green notes, “when the company saw rapid revenue growth to $90 billion per year, the stock was trading with the P/E ratio below 15.”

HD P/E Ratio TTM data by YCharts.

What explains the dear price? The explanation is simple: As the housing market picks up, investors are increasingly optimistic about any company that benefits from it, and this optimism has outpaced the growth in Home Depot‘s fundamentals — particularly the retail giant’s earnings (which serve as the denominator in the P/E ratio).

HD Total Return Price Chart

HD Total Return Price data by YCharts.

The bottom line here is that unless you already own Home Depot stock, you might want to think long and hard before establishing a new long position at its current valuation.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they’ll handsomely reward those investors who understand the landscape. You can read about the “3 Companies Ready to Rule Retail” in The Motley Fool‘s special report. Uncovering these top picks is free today; just click here to read more.

The article Home Depot Stock Has Gotten Ahead of Itself originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools

From: http://www.dailyfinance.com/2013/04/11/home-depot-stock-has-gotten-ahead-of-itself/

Business, Finance, Occupation & Industry

What to Watch for in Wells Fargo's Earnings

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By John Maxfield and Erin Miller, The Motley Fool

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On Friday, Wells Fargo reports earnings for the first three months of 2013. Because it and JPMorgan Chase are the first two big banks to do so, analysts take a close look at them to predict how the rest of earnings season may play out. In the video below, Motley Fool contributor John Maxfield discusses the three things that Wells Fargo‘s investors should be watching for.

Wells Fargo‘s dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool‘s top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.

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From: http://www.dailyfinance.com/2013/04/11/what-to-watch-for-in-wells-fargos-earnings/

Business, Finance, Occupation & Industry

What to Watch for in JPMorgan's Earnings

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By John Maxfield, The Motley Fool

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On Friday, JPMorgan Chase releases its earnings for the first quarter of this year. Because it and Wells Fargo are the first two major banks to report, investors and analysts will closely examining the results. In the video below, Motley Fool contributor John Maxfield discusses three specific things to watch for tomorrow.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, I invite you to read our premium research report on the company today. Click here now for instant access!

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From: http://www.dailyfinance.com/2013/04/11/what-to-watch-for-in-jpmorgans-earnings/

Business, Finance, Occupation & Industry

City National Bank: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in City National Corp. or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers that investors need to know about City National stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. While City National could easily be lumped together with regional banks, it more closely resembles a large community bank and trust with satellite offices in strategic cities throughout the country, including Las Vegas, New York City, Nashville, and Atlanta. Founded by a “small group of entrepreneurs in 1954,” the bank is headquartered in Los Angeles and is loosely known as the banker to the stars given its past support of Frank Sinatra, Arnold Schwarzenegger, and others, and the fact that about one-fifth of its business loans are entertainment-related. Its balance sheet boasts $29 billion in assets and it oversees an additional $57 billion in assets under management or administration.

As you can see in the table above, City National‘s biggest strength is unquestionably its prudent management of credit risk. With a nonperforming loans ratio of 0.63%, the bank handily beats the industry average by over 120 basis points. Beyond this, and thanks in large part to its robust asset management and administration business, a respectable 32% of total revenue comes from noninterest sources.

On the other hand, City National slightly underperforms its peers when it comes to both net interest margin and efficiency ratio. The former is nine basis points less than the average of the 100+ banks sampled for this article series — though, it’s well within the first standard deviation. And City National‘s efficiency ratio — which measures how much it costs a bank to produce each dollar of revenue — is three percentage points higher than the selected peer group.

Despite the latter issues, however, and largely as a testament to its management of credit risk, City National‘s return on equity beats the sample by 60 basis points — though it still underperforms the double-digit rate that most bank investors like to see.

Discover the “only big bank built to last”
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article City National Bank: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The

From: http://www.dailyfinance.com/2013/04/11/city-national-bank-9-critical-numbers/

Business, Finance, Occupation & Industry

Exxon Mobil's Stock Falls As the Dow Sets a New Record

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By Matt Thalman, The Motley Fool

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Only four of the Dow Jones Industrial Average‘s 30 components ended the trading session in the red today, as the blue-chip index rose more than 128 points. The main catalyst for the move higher today was the release of the Federal Reserve‘s minutes from its last meeting. These minutes made it clear that the Fed will only slow its quantitative easing programs once the jobs market dramatically improves. The promise of continued cheap money was enough for investors to push the Dow to an all-time closing high once again today. The Dow now rests at 14,802, after rising 0.88%.

Two of the four losers today were Wal-Mart and Travelers, which lost 0.96% and 0.54%, respectively, this afternoon. This morning I touched on a few reasons for the declines. To read about those companies, click here.

After releasing mixed earnings after the market closed on Monday, shares of Alcoa fell 0.95% today. My fellow colleague John Maxfield pointed out earlier today that the aluminum giant is now the most shorted Dow component. Currently 6.47% of the float has been sold short by investors speculating that the stock still has room to move lower. While this is not a particularly positive thing for the company, it’s really not all that bad, either. But what is a negative sign is that, according to John, the company’s earnings per share have fallen 44% since the financial crisis began. Alcoa also takes the No. 1 spot for this metric when compared with the other 29 Dow components.  

Shares of ExxonMobil lost 0.1% of their value today, after a Morgan Stanley analyst changed the stock‘s rating and gave investors a better option. Exxon was cut from an “equal weight” rating to an “underweight” rating this morning, in addition to having its target price cut from $90 per share to only $85. The new target price would indicate that shares are worth less than their current price of $88.68.

Morgan Stanley also stated that Exxon competitor and fellow Dow component Chevron will outperform Exxon by 55% over the next five years. Furthermore, Morgan Stanley slapped a price target of $135 per share on Chevron. Reports have cited that higher production growth and improving returns will give Chevron an advantage in the long run.  

While the analyst may be correct, the call is a little late. Shares of Chevron have already risen 10.63% year to date, while Exxon’s stock is up only 2.46% in 2013.

More Foolish insight
If you’re on the lookout for some currently intriguing energy plays, check out The Motley Fool’s “3 Stocks for $100 Oil.” For free access to this special report, simply click here now.

The article Exxon Mobil’s Stock Falls As the Dow Sets a New Record originally appeared on Fool.com.

Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Chevron. 

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Starbucks Stock Is Not a Value at Today's Price

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By John Maxfield, The Motley Fool

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Let’s get one thing straight: Starbucks is a great company. The problem has to do with its stock. Like a frothy overpriced latte, shares of the Seattle-based coffee chain are just too darn expensive right now.

There are a number of metrics that can be used to demonstrate this. Take its dividend yield. The average stock on the S&P 500 yields 2.12%. Starbucks stock pays out only 1.5%.

And this isn’t because the company is stingy with its earnings. Nothing could be further from the truth, in fact. Last year, it distributed nearly 40% of its net income to shareholders. The problem is with the denominator — its stock price.

Here’s another way to look at it. The most commonly used metric to value stocks is the price-to-earnings ratio. This gauges how much an investor must pay for each dollar of a company’s earnings. Right now, the average stock on the S&P 500 has a P/E ratio of 18. Starbucks’ ratio comes in at 31. That’s a 72% premium over the broader market.

What explains the hefty price tag? First and foremost, as I noted earlier, it’s a great company. It has a loyal customer base, treats employees like royalty compared to industry peers, and is led by one of the greatest chief executive officers alive.

But beyond this, the growth in Starbucks stock has simply outpaced the company’s fundamentals over the past five years. Consider the chart below:

SBUX Total Return Price data by YCharts.

As you can see, while the company has increased its earnings per share an impressive 195%, the price of its shares has bounded ahead by 289%. And to make matters worse, the bigger Starbucks gets, the slower it grows.

So what does this mean? If you ask me, it means that you should wait to buy Starbucks stock until the price comes down. Since the financial crisis, investors have flocked to solid companies with predictable revenue streams. Thus, once things resettle, it’s not unreasonable to think that valuation multiples for traditional defensive stocks like Starbucks will readjust accordingly.

Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool’s free report “3 American Companies Set to Dominate the World” shows you how. Click here to get your free copy before it’s gone.

The article Starbucks Stock Is Not a Value at Today’s Price originally appeared on Fool.com.

Fool contributor John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. 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.

Copyright © 1995 – 2013 The Motley Fool,

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

People's United Financial Stock: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in People’s United Financial or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers that investors need to know about People’s United stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. Founded in 1842, People’s United is one of the oldest financial institutions in the country. And today, it’s one of the largest regional banks in New England, with locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire, and Maine. It currently operates 418 branches and has $30 billion in assets.

As you can see in the table above, People’s United exhibits a number of core strengths. Its net interest margin exceeds the industry average by 16 basis points, showing prudent interest rate risk. Its nonperforming loans ratio is far below its typical peer, demonstrating a convincing handle on credit risk. And finally, it pays out a generous 89% of its earnings via dividends.

On the other hand, People’s United’s paradoxically low return on equity is indicative of death by a thousand cuts. It’s slightly less leveraged than its peers, has a smaller proportion of income generated by fees, and its efficiency ratio is marginally higher. Taken together, the cumulative effect is to drive down its ROE. And what’s not represented here, moreover, is the downward trend in the bank’s tangible book value per share, which has fallen from above $15 in 2007 to down below $9 today.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article People’s United Financial Stock: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

First Niagara Financial Stock: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in First Niagara Financial or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers investors need to know about First Niagara Financial stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. First Niagara traces its roots back to 1870 with the founding of Farmers and Mechanics’ Savings Bank. In the intervening years, it’s grown into one of the largest regional banks in the Northeastern United States. While it did so, according to Wikipedia, through “the recruitment of new customers, as opposed to the purchase of other firms’ assets,” the same can’t be said of the bank’s growth in the time since the financial crisis. The Buffalo, New York-based bank has completed multiple acquisitions over the last five years, culminating in the recent and anticlimactic departure of its now-former CEO John Koelmel. At present, First Niagara has $37 billion in assets and 360 branches in four Northeastern states.

As you can see in the table above, First Niagara‘s primary strength is in its management of credit risk — the significance of which cannot be overstated. Its nonperforming loans ratio comes in nearly 100 basis points less than the industry average. Beyond that, it pays out an arguably overly generous portion of its net income via dividends.

On the other hand, the more glaring problem is its subpar net interest margin and lackluster return on equity. Not captured by the numbers are the growing pains that First Financial is unquestionably suffering as a result of its aggressive expansion since the crisis. To fund the growth, the bank has increased its outstanding share count from 102.8 million shares in 2007 to nearly 350 million today. And as a consequence, its earnings per share have been sliced in half, going from $0.82 per share down to $0.40, and its quarterly dividend payout followed suit.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article First Niagara Financial Stock: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Bank of America Gets Kicked in the Trousers

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By John Maxfield, The Motley Fool

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It’s safe to say that Bank of America has seen better days. Besides the unfortunate performance of its shares last week, the nation’s second largest bank by assets recently received an unwelcome kick in the trousers by the New York court of appeals. The ruling is part of a long-simmering dispute between the bank and the mortgage-bond insurer MBIA . In the video below, Motley Fool contributor John Maxfield discusses the case and what it means for Bank of America’s shareholders.

Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool‘s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

1 Reason to Avoid Annaly Capital Management

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By John Maxfield, The Motley Fool

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Annaly Capital Management is one of the most popular mortgage REITs in the country. It pays a double-digit dividend yield and invests only in mortgage-backed securities that are issued or insured by Fannie Mae or Freddie Mac. The net result is that, aside from interest rate risk, investors in Annaly can have their cake and eat it, too, receiving large quarterly checks in the mail without having to worry about credit risk. What’s not to like?

In the video below, Motley Fool contributor John Maxfield discusses why, despite these things, investors should be wary of this stock.

There’s no question Annaly Capital‘s dividend is eye-catching. But can investors count on that payout sticking around? With the Federal Reserve keeping interest rates at historically low levels, Annaly has had to scramble to defend its bottom line. In The Motley Fool‘s premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Zions Bancorp: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in Zions Bancorp or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers that investors need to know about Zions stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. To paraphrase the bank’s website, Zions originated as Keystone Insurance and Investment Company, a Utah Corporation, in April 1955. In April 1960, Keystone, together with several individual investors, acquired a 57.5% interest in Zions First National Bank from the Mormon Church. In 1965, the bank’s name was changed to Zions Bancorp — though, it operated as Zions Utah Bancorporation from 1966 to 1987. Zions subsequently went public in January 1966. At present, the Utah-based bank operates over 480 full-service banking offices in 10 states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, and Washington

As you can see in the table above, Zions is one of a handful of banks that are struggling to emerge completely from the financial crisis. While its nonperforming loans ratio is 13 basis points better than the industry average, at 1.71%, it’s still far higher than it should be. In addition, its efficiency ratio exceeds many of the bank’s peers, meaning that it costs Zions comparatively more to generate each dollar of revenue. And as a result, its return on equity is far below both the average and the ideal double-digit level that bank investors prefer to see.

On the other hand, the best that can be said about Zions at this point is that it pays out a generous 38% of its earnings via dividends and trades for a relatively paltry 1.19 times tangible book value — though the latter is far from a bargain in the normal course of things.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stanout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article Zions Bancorp: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 – 2013 The Motley …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Bank of America Is Down So Big This Week

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By John Grgurich, The Motley Fool

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The big banks took a pounding this week, and Bank of America was no exception: down 2.30% on the week. With no breaking bad news for B of A, what’s to explain the superbank’s severe downturn?

The tale of the tickers
Before we dig into that, here’s a quick overview of how B of A’s peers and the markets performed this week:

  • Citigroup was down a massive 3.94%.
  • JPMorgan Chase was down a much less massive, but significant, 0.82%.
  • Wells Fargo held up the best by far of the big four, down just 0.62%.

The markets were all in the red, as well; with the Dow Jones Industrial Average down 0.51%, the S&P 500 down 1.37%, and the Nasdaq the worst performer by far, down 2.36%.

Foolish bottom line
A 2.30% share-price drop is nothing to sneeze at. Usually, it takes some big piece of bad news to move a single stock by that much. But again, there just wasn’t much cracking on the B of A home front this week.

Foolish colleague John Maxfield reported on poor B of A performance on the customer service front, per information released by the Consumer Financial Protection Bureau, but it’s unlikely investors would care too much about that.

But there was something unusual that happened in the markets on Wednesday. B of A, Citi, and JPMorgan all dropped off a cliff. Citi lost more than 3% that day alone, while JPMorgan and B of A both lost more than 2%. Wells Fargo held up the best on Black Banking Wednesday, losing only 0.22% off its share price. Warren Buffet‘s favorite bank also recovered very strongly on Thursday — again unlike its peers — only to start today down again.

There’s no apparent reason for this banking sector hammering, either. Wednesday did see a ADP, the payroll-processing giant, report less than expected private-sector job growth, but if you’re looking for a singular reason for Black Banking Wednesday, that’s a stretch. (And if markets didn’t like the ADP report, wait till they get a hold of today’s truly terrible jobs numbers.)

The bottom line is, sometimes the markets move down — and up — for no apparent reason. But as Foolish investors — buy-and-hold types who are in it for the long haul — remember not pay too much attention to the day-to-day, week-to-week, or even month-to-month gyrations of the markets. Markets are made up of people, and people can be fickle.

So long as the companies you hold stock in have sound fundamentals, you believe in the corporate mission, and you understand how they make money, have faith that your investing dollars are in the right place. Get rich slowly, Fools. 

Looking for unequalled in-depth analysis on Bank of America?
Look no farther than this Motley Fool premium report — expertly researched and written by top Foolish banking analysts Anand Chokkavelu and Matt Koppenheffer. They’ll help you lift the veil on the bank’s operations, and give …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

MetLife and Other Insurance Company Hit Hard by Jobs Report

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By John Maxfield, The Motley Fool

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There’s no getting around it: This morning’s jobs report was bad. Economists surveyed by Thompson Reuters were expecting total payrolls to grow last month by 200,000. Analysts and traders were accordingly shocked when the Department of Labor announced that the actual figure was only 88,000. An investment strategist quoted by Bloomberg News summed it up succinctly: “This report is a huge disappointment.”

Few companies are being hit harder by the news than insurance companies. For the past few months, there’s been a growing chorus of speculation that the Federal Reserve will wean the economy off its current, highly accommodative monetary policy — the central bank is purchasing $85 billion in Treasuries and agency mortgage-backed securities a month. That would mean higher interest rates and thus larger profits for insurers.

The likelihood that this will happen now seems to have evaporated — if it was ever likely at all, considering the Fed’s previous statement that it will keep rates low into 2015. “Fed officials have been wary of pulling back too quickly, given the disappointments the economy has produced in the past during this recovery,” said The Wall Street Journal‘s Jon Hilsenrath. “[Today’s] report reinforces that wariness.”

What this means for insurance companies like MetLife is a prolonged period of low interest rates, making it difficult for them to turn a profit without taking on too much risk. As an analyst quoted by Bloomberg News put it in a research note to clients, “Sustained low interest rates present a challenge for life insurers because of reduced reinvestment rates.”

It’s for this reason that six of the S&P 500‘s 20 worst-performing stocks today are insurance companies. AFLAC is leading the way down, having lost 4.1%, followed by Prudential Financial , Unum Group , Hartford Financial, and Lincoln Financial. For its part, MetLife has lost 2.7% of its value today.

The Motley Fool’s Top Stock for 2013
The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article MetLife and Other Insurance Company Hit Hard by Jobs Report originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Aflac. 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.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Comerica Stock: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in Comerica or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers investors need to know about Comerica stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. Comerica traces its roots back to 1849, when its predecessor company, Detroit Savings Fund Institute, was founded by Elon Farnsworth. Since then, it relocated to Dallas, Texas and transformed into one of the largest regional banks in the nation. Among other accomplishments, its website boasts that the bank is located in seven of the 10 largest U.S. cities, is the second largest pre-paid commercial card issuer, and is ranked tenth among other banks in terms of commercial and industrial loans. As of the end of last year, it had $65.4 billion in assets, ranking in size between M&T Bank at $83 billion and Huntington Bancshares at $56 billion.

As you can see in the table above, Comerica’s strongest suits are its management of credit risk and its low valuation. With respect to the former, its non-performing loans ratio is a full 66 basis points less than the industry average. And with respect to the latter, Comerica stock currently trades for 1.08 times tangible book value, roughly a third less than its typical peer.

On the other hand, the reason Comerica stock trades at such a relatively paltry multiple is because its operations exhibit a number of weaknesses. In the first case, its net interest margin is woefully below the average, at 3.03% and 3.7%, respectively. As a direct result of this, its 7.6% return on equity is approximately half of what you’d want to see. And finally, it pays out less than a fifth of its earnings via dividends, another red flag for potential investors.

Discover the “only big bank build to last”
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article Comerica Stock: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

M&amp;T Bank Stock: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in M&T Bank or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers that investors need to know about M&T Bank stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. Established in 1856 as Manufacturers and Traders Bank, M&T Bank is today one of the 20 largest commercial banks in the United States. Headquartered in Buffalo, New York, it operates more than 700 branches and over 2,000 ATMs across eight states, the District of Columbia, and in Toronto, Canada. As of the end of 2012, it had $83 billion of assets on its balance sheet, ranking it in size between Alabama’s Regions Financial and Texas’ Comerica.

As you can see in the table above, from a shareholder’s perspective, M&T Bank exhibits a number of attractive characteristics. Its net interest margin is above average, as are its return on equity and payout ratio. In addition, both of its non-performing loans ratio and its efficiency ratio are lower than average, evidencing a well-run bank that manages credit risk more effectively than its peers. It accordingly follows that the biggest downside is its valuation. Trading at 2.33 times tangible book value, M&T Bank stock is one of the most dearly priced regional lenders in the market today.

The one thing M&T Bank stock investors should be wary about is its recent acquisition of Hudson City Bancorp . To say that this is a transformative deal for M&T Bank is an understatement. With $40 billion in assets, Hudson City will increase M&T’s size by 50% in one fell swoop. But while this sounds good in theory, acquisitions like this rarely work out for shareholders. A perfect example of this is First Niagara Financial‘s recent transformative acquisition of HSBC‘s branch network in the Northeastern United States, which led the CEO of First Niagara to relinquish his post last month.

Discover the “only big bank built to last”
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article M&T Bank Stock: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Bank of America Exercises Its Fed-Given Rights

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By John Maxfield, The Motley Fool

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Earlier this week, Bank of America announced that it’s redeeming roughly $5.5 billion in preferred shares from investors. Boring, right? Not if you’re a shareholder in the nation’s second largest bank. In the video below, Motley Fool contributor John Maxfield gives three reasons investors should care about this.

Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool‘s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “John Maxfield“, contentId: “cms.30096”, contentTickers: “NYSE:BAC”, contentTitle: “Bank of America Exercises Its Fed-Given Rights”, hasVideo: “True”, pitchId: “29”, pitchTickers: “NYSE:BAC”, pitchTitle: “BAC Ticker Report” …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is a Bank the Best Investment in Silicon Valley?

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By John Maxfield, The Motley Fool

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When investors think about Silicon Valley, the first things that come to mind are technology companies. Facebook. Apple. Cisco. These names are synonymous with not only cutting edge innovation, but also with the strip of land more formally known as Santa Clara Valley. But as any investor knows, technology companies, and particularly start-ups, come and go at a frenetic pace, leaving many investors in the lurch.

With this in mind, in the video below, Motley Fool contributor John Maxfield discusses SVB Financial , a stock that offers exposure to the upside with seemingly less downside risk.

Discover the “only big bank built to last”
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool‘s new report. It’s free, so click here to access it now.

The article Is a Bank the Best Investment in Silicon Valley? originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Business, Finance, Occupation & Industry

Why the Dow Is Struggling to Hold On Today

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By John Maxfield, The Motley Fool

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Earlier today, it looked as if yesterday’s losses were behind us, as the Dow Jones Industrial Average had rallied more than 70 points in morning trading. However, it dipped into negative territory and then clawed its way back for a modest gain of 37 points, or 0.26%, by 3:15 p.m. EDT.

The obvious indecision in the market today stems from two countervailing factors. On the one hand, the Department of Labor reported today that significantly more Americans filed for unemployment last week than had been anticipated by economists. For the final week of March, 385,000 people submitted applications for unemployment benefits. That was 28,000 more than had filed in the prior week, and it greatly exceeded the expected figure of 350,000. According to an economist quoted by The Wall Street Journal, “Whether this is a genuine change in the trend or not, today’s data will undoubtedly only compound fears that growth is slowing significantly again.”

Alternatively, news that the Bank of Japan is initiating an aggressive policy of monetary easing spurred on the market‘s bulls. As I discussed earlier today, the Asian country’s central bank is making good on its promise to achieve a 2% rate of inflation after two decades of persistent deflation. To reach its goal, it has committed to doubling its monetary base “with a time horizon of about two years.” The news sunk the Japanese yen and sent the country’s primary stock index higher.

The best-performing stock on the Dow this afternoon is AT&T . As my colleague Dan Dzombak discussed earlier, rumors surfaced yesterday that the company may team up with its rival Verizon to buy Vodafone. Those rumors were subsequently denied. Today, however, Facebook introduced its new Facebook Home service, which will initially be featured exclusively on HTC phones offered by AT&T.

Alternatively, the worst-performing stock on the Dow is IBM . As noted earlier by fellow Fool Jessica Alling, the company has been fighting to ward off concern over a recently released study suggesting that Oracle is outperforming Big Blue when it comes to new chips and servers — two of IBM‘s strong suits.

Profiting from our increasingly global economy can be as easy as investing in the U.S. of A. The Motley Fool’s free report “3 American Companies Set to Dominate the World” shows you how. Click here to get your free copy before it’s gone.

The article Why the Dow Is Struggling to Hold On Today originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool owns shares of International Business Machines. 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 …read more

Source: FULL ARTICLE at DailyFinance