2/27/08

Economics

A look at housing prices nationwide:

http://bespokeinvest.typepad.com/bespoke/2008/02/december-2007-s.html

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.). Progress (?) on the Farm Bill:

http://www.cato.org/pub_display.php?pub_id=9240

Politics

Domestic

Obama’s votes on Supreme Court nominees:

http://www.powerlineblog.com/archives2/2008/02/019879.php

Clinton and Obama on free trade:

http://article.nationalreview.com/?q=MmM0ZmMwNTUwODU4M2MwMWZhYTI4YzUxNjU3OTVkYzA=

Clinton and Obama on curbing the influence of lobbyists:

http://www.usatoday.com/news/politics/election2008/2008-02-25-tax-breaks_N.htm?POE=click-refer

The latest statistics on global warming (er, ah, cooling):

http://www.dailytech.com/Temperature+Monitors+Report+Worldwide+Global+Cooling/article10866.htm

International War Against Radical Islam

More on Iran’s nuclear program:

http://www.powerlineblog.com/archives2/2008/02/019883.php

The Market

Technical

Fundamental

The High Yield Buy List

Company Close 2/26 Buy Value Range

AJ Gallagher 23.80 23-26

Martin Midstream Ptrs 34.59 35-40

Rayonier 41.70 39-45

Reynolds American 65.39 61-70

Company Highlight

Kimco Realty Corp is the largest strip center REIT in the US market. Its properties are geographically diversified with locations in 45 states and foreign countries. This REIT has grown its Funds From Operations and dividend at a 10% and 9% annualized rate respectively since its inception. KIM should be able to continue this performance because:

(1) its portfolio of properties are located in high growth areas and anchored by top mega store tenants such as Home Depot and WalMart,

(2) its properties’ occupancy rates are at all time highs and its releasing spreads are at record levels both domestically and internationally,

(3) the company’s development pipeline continues to grow which is particularly important at this time when yields on acquired properties are low,

(4) KIM is expanding its joint venture operation which will add fees from investment management programs,

(5) It has a growing international asset base which mitigates the downside exposure to the US economy,

(6) finally, the REIT has a diverse array of other affiliated businesses including preferred equity placement, retail restructuring, third party property management and mortgage financing which provides additional revenue and earnings.

KIM is rated B++ by Value Line, has a 60% debt/equity ratio and the stock yields over 5%.

http://finance.yahoo.com/q?s=KIM

Subscriber Alert

The stock price of Mastercard (MA-$195) has declined below the lower boundary of its Buy Value Range. Accordingly, MA is being Added to the Aggressive Growth Buy List. The Aggressive Growth Portfolio already owns this stock; however, it is not a full position. So at the Market open this morning, the Aggressive Growth Portfolio will Buy additional shares of MA (about an additional 1/5 position).

http://finance.yahoo.com/q?s=MA

Pfizer was recently moved from the Dividend Growth Universe to the High Yield Universe and its Valuation Model was altered accordingly. PFE’s stock price is trading in its new Buy Value Range. Therefore it is being Added to the High Yield Buy List. At the Market open this morning, the High Yield Portfolio will Buy a one half position in PFE.

http://finance.yahoo.com/q?s=PFE

At the Market open this morning the Dividend Growth Portfolio will purchase additional shares (about 1/10^th positions) in McGraw Hill (MHP-$44) and Manulife Financial (MFC-$43).

http://finance.yahoo.com/q?s=MHP

http://finance.yahoo.com/q?s=MFC

News on Stocks in Our Portfolios

Why WalMart (Dividend Growth Portfolio) is thriving:

http://mjperry.blogspot.com/2008/02/wal-mart-puzzle-why-is-it-thriving.html

Quaker Chemical (High Yield Portfolio) reported fourth quarter and full year earnings per share of $.46 and $1.53 respectively versus $.30 and $1.18 in the comparable 2006 periods.

http://finance.yahoo.com/q?s=KWR

More Cash in Investors’ Hands

Hellman & Friedman is buying Getty Images for $2 billion in cash.

Electronic Arts has offered to buy Take Two Interactive software for $2 billion in cash.

IBM is buying back $15 billion in stock.