Economics
fiscal profligacy (Government spending as a percent of GDP is too high and the looming explosion in entitlement expenditures will make it worse. There is no good solution save spending discipline.) W once again fails at the job of fiscal responsibility:
http://www.examiner.com/blogs/tapscotts_copy_desk/2008/1/28/Bush-earmark-cavein-shows-GOP-death-wish
Politics
Obama on immigration:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/28/MNH1UL57Q.DTL&type=politics
McCain on the judicial appointments:
http://campaignspot.nationalreview.com/post/?q=NmNjZDZmZGIyNmI4ZjVjMzc5OTU2NjQ4N2E3MDdhNjg=
Domestic
International War Against Radical Islam
The Market
Technical
A study on the S&P’s performance in years that start poorly:
http://bespokeinvest.typepad.com/bespoke/2008/01/worst-starts--1.html
Fundamental
Sunday 60 Minutes had a big segment on how terrible the housing market is and recounted the multiple sins of lenders/borrowers; then yesterday; the lead in this week’s edition of Newsweek is the recession. As you probably know when the main stream media starts putting the economy or Market on the front page, it usually means that it is yesterday’s story. All we need for the hat trick is for Time’s front page to bemoan the decline in stock prices. The point being that seeing the media tell the public what most of us knew six months ago is a reassuring sign that a good deal of the bad news is behind us (and as if to punctuate this point, this morning December durable goods were reported up 5.2% versus estimates of a 2% increase).
An update on the monocline insurer’s problems:
http://bigpicture.typepad.com/comments/2008/01/monoline-insura.html
Subscriber Alert
The stock prices of United Technologies (UTX-$73) and United Parcel Service (UPS-$71) have recovered to their respective
The Dividend Growth Portfolio will purchase the final one third position in T Rowe Price (TROW-$52) at the Market open this morning.
At the Market open this morning, the Aggressive Growth Portfolio will purchase additional shares in Mastercard (MA-$189) and a second one third position in Luxoticca (LUX-$26).
Company Highlight
I wanted to focus on the Defense Department’s hardware budget because Iraq War or no, there is a lot of re-constitution of materiel that needs to be done; and it won’t likely matter which political party is in control of the budgetary purse strings. (But note that General Dynamics is not currently on the Buy List.)
General Dynamics is a leading defense contractor supplying products and technology to marine systems, combat systems, information systems and aerospace (basically submarines, tanks, aircraft and command and control systems). The company has grown earnings and dividends 14% and 10% respectively over the last 10 years and has earned a consistently high 17-18% return on equity. GD should be able to continue to match that record because of:
(1) the expected increase in spending to modernize the Armed Forces,
(2) an aggressive acquisition program that has increased GD’s exposure to the growing defense information technology market and extending its reach into the intelligence sector; recently the company has acquired companies that complemented its existing command, control and communications capabilities, enhanced its expertise in rugged wireless computing, visualization and collaboration technologies, increased its ability to provide mission, operational and IT enterprise services and improved the quality of ammunition and related products. As important, most of these acquisitions were accretive to earnings.
(3) its Gulfstream division is benefiting from increased demand which not only helps revenue growth but also has stabilized the prices of used jets allowing the company to no longer lose money on trade-ins,
(4) robust cash generation is financing an aggressive stock buy back program.
GD has a debt to equity ratio of approximately 26%, is rated A++ by Value Line and its stock provides a yield of 1.3%.
http://finance.yahoo.com/q?s=GD
News on Stocks in Our Portfolios
A positive write up on Abbott Labs (Dividend Growth Portfolio):
http://www.zacks.com/newsroom/commentary/index_pdf.php?id=6822
T Rowe Price (Dividend Growth Portfolio) reported fourth quarter and full year earnings per share of $.68 and $2.40 respectively versus $.53 and $1.90 recorded in the comparable 2006 periods.
http://finance.yahoo.com/q?s=TROW
Eli Lilly (Dividend Growth Portfolio) reported fourth quarter operating earnings per share of $.90 versus expectations of $.85 and $.82 reported in the fourth quarter of 2006.
http://finance.yahoo.com/q?s=LLY
Verizon (High Yield Portfolio) reported fourth quarter operating earnings per share of $.62 in line with expectations.
http://finance.yahoo.com/q?s=VZ
More Cash in Investors’ Hands
No comments:
Post a Comment