Markets rarely move at random. InvestorPlace’s leading analysts break down macro trends, sector dynamics, and recurring market patterns to help investors understand what is changing, what matters most, and where opportunities may emerge.
By
Jim Woods, Editor-in-Chief, Successful Investing, Intelligence Report, Bullseye Stock Trader
Initial Public Offerings, or IPOs, were once the Holy Grail of prodigious profit potential for investors lucky enough to get in on the ground floor of the hottest new issues. Then the recession hit, and the IPO market dried up faster than a puddle of water in the Mojave Desert. All that has changed, however, as many high-profile new stock IPO plans are set for the next several months. Among the biggest IPO names are retailer Toys R Us, ratings agency Nielsen, options and commodities exchange CBOE, and perhaps the biggest IPO of all time, the Agriculture Bank of China.
Walgreen Co. (WAG), the nation's largest retail drugstore by store count, is ending its 15-year prohibition on alcohol sales and will begin restocking shelves with beer and wine at about 3,100 locations nationwide. Rivals CVS Caremark (CVS) and Rite Aid Corp. (RAD) already sell booze themselves, so the move by Walgreens will put the retail chain on equal footing with its competitors on the alcohol sales front.
Overall, about two-thirds of US retail stocks are showing some profit gains and about one-third are not. Some of the winners in the May same-store sales sweepstakes are Target Corp. (NYSE: TGT), Costco Wholesale Inc. (NYSE: COST), Gap Inc. (NYSE: GPS), Saks Inc. (NYSE: SKS), and Nordstrom Inc. (NYSE: JWN). The losers among retail stocks in May include Abercrombie and Fitch Co. (NYSE: ANF), J.C. Penney Co. Inc.(NYSE: JCP), Rite Aid Corp. (NYSE: RAD), American Eagle Outfitters (NYSE: AEO), and Hot Topic Inc. (NASDAQ: HOTT).
Will the iPhone from Apple Inc. (NYSE: AAPL) come to Verizon Wireless, the joint venture between Verizon Communications Inc. (NYSE: VZ) and Deutsche Telekom AG (NYSE: DT)? That depends who you ask. A spokesman for Verizon Wireless said yesterday that his company had "no plan to carry the Apple iPhone in the immediate future." That may sound definitive, but is in fact pretty vague. The "immediate future" could be this week and "no plan" can turn into a big plan pretty quickly.
If your investment strategy involves buying stocks with a high dividend yield, you may want to look carefully before you buy and bet on the income. Many dividend stocks with high yields have calculated their income payout based on previous dividends that are annualized out. This means that you're buying based on past dividend investment trends, not on the future. A safer bet is to buy stocks raising their dividends and boosting yields like H.J. Heinz (HNZ), Lowe's (LOW) and McKesson (MCK) have of late – among others.
When you think 3D TV, there possibilities are limitless. That game-winning touchdown pass spiraling out of your flat screen, alien invaders flying ships through the screen ... and yes, even naked chicks strutting their stuff in your living room. It is this latter and controversial content that is fueling the 3D business in Japan right now, where a pair of porn stars are leading the charge in developing three-dimensional entertainment that is compatible with Sony (SNE) and Panasonic (PC) televisions.
Ford Motor Co. (F) offered up a pair of interesting investment headlines today: First, Ford sales rose 22% in May over last year's numbers, topping the forecast of +16% to mark. That makes it the third consecutive month where more than 11 million Ford cars and trucks were sold and sixth straight month of sales gains of Ford in excess of +20%. Secondly, Ford is going to kill its Mercury brand.
Berkshire Hathaway (BRK-A, BRK-B) CEO and investment icon Warren Buffett defended rating agencies in testimony in New York today before the Financial Crisis Inquiries Commission. Legislators and regulators critical of rating agencies like Moody's (MCO) and McGraw-Hill (MHP) division Standard and Poor's wanted an explanation as to why mortgage-backed securities could get high grades but still be so toxic. Buffett's response was simple: "They made the wrong call. I was wrong on it too."
Private conglomerate Virgin Group -- along with its iconic helmsman Sir Richard Charles Nicholas Branson -- knows a thing or two about investing strategies. From airlines to media to mobile phones, the company has its fingers in a lot of pies. But according to a new website set to launch June 15, it appears that the next Virgin venture will be video games -- and that has leading studios like Activision Blizzard (ATVI) and Electronic Arts (ERTS) taking notice.
It's official: Target (TGT) has confirmed that it will begin selling the Amazon.com (AMZN) Kindle e-reader this weekend. The Amazon gadget will see a $259 price tag at Target stores' brick and mortar locations. Rumors of the Amazon Kindle and Target sales partnership between AMZN and TGT stock was first reported here about a month ago, and has finally been confirmed.
AT&T (T) announced today that it is eliminating unlimited data plans for its wireless service. The move comes conspicuously just before the expected launch of a new Apple (AAPL) iPhone in about a week, the data hungry device that is blamed by many as the culprit behind recent criticism of AT&T's network and reliability. Now that the Apple iPad is also draining AT&T bandwidth with 3G data plans for the tablet computer, it's clear T stock needs to do something about managing its wireless data network.
BP plc (BP) has been nothing short of a disaster. It seems that if anything can fail or go wrong with the disaster recovery, then it goes wrong and gets even worse. But things are getting worse for the company. While it still seems impossible to fathom a credit default from the likes of a BP, the cost to insure BP debt against default is rising.
Motorola (MOT) has been one of those stocks that investors love to kick around. It peaked at almost $60 a share during the tech bubble days of 2000, slumped to $20 a share in 2006 amid increased competition from smartphones, and bottomed out at about $3 a share in March of 2009. But thanks to Google (GOOG) and its Android smartphone OS, Motorola and its Droid handset are profitable.
By most Wall Street estimates, the sell-off of BP plc (BP) is overdone -- sparking speculation of a buyout of the crude oil stock from western rivals like Exxon Mobil (XOM), Royal Dutch Shell (RDS) and Chevron (CVX). There are also thoughts about Brazil's state run oil giant Petrobras, more formally Petroleo Brasileiro (PBR), as a potential BP buyout suitor -- and a few fringe theories about China Petroleum and Chemical Corporation (SNP) or Sinopec, or China National Offshore Oil Corporation (CEO) known as CNOOC.
ArcelorMittal (NYSE: MT), Nucor Corp. (NYSE: NUE), AK Steel Holding Corp. (NYSE: AKS), Freeport-McMoran Copper and Gold Inc. (NYSE: FCX), and U.S. Steel Corp. (NYSE: X) have all been touted as on the mend, but the worries about the global economy have cooled some of the enthusiasm for steel stocks in the past two weeks. Anticipating a recovery in the global economy, steelmakers have ramped up production since the beginning of the year. The recent troubles in Europe have caused expectations of a strong recovery to fade quickly and have generated concern that the supply of steel will outstrip demand and weigh down steel prices.
Hewlett-Packard Co. (NYSE: HPQ) has announced that it will "invest" $1 billion in its Enterprise Services business by taking a charge of $1 billion over several years to cut 9,000 jobs. That's one way of looking at layoffs. HP spent $13.9 billion in 2008 to acquire EDS, putting the company in a position to challenge IBM Corp. (NYSE: IBM) in the IT services business. Since then, IBM has widened its offerings in services, Oracle Corp. (NASDAQ: ORCL) has swallowed up Sun Microsystems, and SAP AG (NYSE: SAP) recently announced that it would pay $5.8 billion for Sybase Inc. (NYSE: SY). The common thread in all this is that scale and diversity are required to compete successfully.
