As the market wades through what many people hope is a sixth bull year, some have grown nervous about how long the run can go.
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A surge in buyback activity should help boost earnings per share just as more economic headwinds are expected.
If the economy fails to deliver higher earnings per share in the fourth quarter, companies may generate it themselves by using surplus cash on their balance sheets to buy back shares.
That's the message in the latest report on corporate stock buyback activity by Standard & Poor's. In the third quarter, buybacks totaled $118 billion, nearly 50% above year-earlier levels. But the big news, says Howard Silverblatt, senior index analyst at S&P, is that companies are buying back more shares than they need in order to cover the dilutive impact of issuing options to employees.
|Tags:||The Fiscal Times|
This emerging market play is outpacing its parent company.
By Louis Navellier, Editor, Blue Chip Growth
Brazil-based Companhia De Bebidas Das Americas (ABV), more commonly known as AmBev, is Latin America's biggest brewer. The company also is majority-owned by the No. 1 American brewer, Anheuser-Busch (BUD), which truly is the "king of beers" after the European leader InBev took it over. So with AmBev, you invest in the higher-growth subsidiary of the largest brewing company in the world.
Since AmBev is growing faster than InBev, ABV shares trade at higher valuation multiples (7.1 price/book, 6.8 price/sales) than the parent (2.5 price/book, 2.4 price/sales). This has allowed for an interesting accounting anomaly where InBev sports a market cap (as of the time of this writing) of $94.09 billion, while AmBev has a market cap of $112.27 billion -- in the alchemy of finance, the subsidiary is worth more than its majority shareholder.
Boston Scientifc and First Solar are downgraded to 'neutral.'
Thursday's noteworthy upgrades include:
- CME Group (CME) upgraded to Outperform from Neutral at Macquarie
- Juniper (JNPR) upgraded to Outperform from Market Perform at BMO Capital
- VMware (VMW) upgraded to Buy from Hold at Wunderlich
- Zimmer (ZMH) upgraded to Buy from Neutral at Mizuho
- Advance Auto Parts (AAP) upgraded to Buy from Hold at BB&T
- Potash (POT) upgraded to Outperform from Sector Perform at RBC Capital
- Micron (MU) upgraded to Outperform from Neutral at Wedbush
The discount retailer has caught the attention of bargain-oriented shoppers and investors alike.
With the economy weak, Dollar General (DG) has potential to benefit from increased sales as people look for bargains.
Based in Tennessee, the company operates 8,414 stores in 35 states selling housewares at low prices; it has annual revenue of $13.7 billion.
The stock came public in late 2009 trading at $22 and has climbed steadily the past two years.
JPMorgan lost a case Tuesday that opens the door for a greater number of aggrieved investors to sue banks.
Investors in financial stocks have a new reason to be nervous: On Tuesday, New York's highest court made it easier for disgruntled investors to sue banks and Wall Street firms. As a result, JPMorgan Chase (JPM), Bank of America (BAC) and Goldman Sachs (GS) -- among the many other possible targets of investors -- may face many new lawsuits in the coming months.
Depending on how many new cases are filed and their cumulative stakes, they might add up to real money, even for the largest banks. The financial meltdown, after all, created huge numbers of angry investors.
After a recession, several recalls, an earthquake and a tsunami, the Japanese auto giant wants its No. 1 spot back.
Toyota (TM) has had a rough few years. First the financial crisis and resulting recessions brutalized the automaking industry and prompted Toyota to post its first-ever loss in 2008. Then fears of "unintended acceleration" led to the recall of 9 million Toyotas in early 2010. Most recently, in early 2011, Toyota production was thrown into disarray by the earthquake and tsunami that affected businesses in Japan.
But investors and fans of the Prius and Camry should take heart: Toyota is revved up and ready for a comeback in 2012. And if you buy the pitch Toyota is selling, the Japanese company will return to its perch as the world's No. 1 automaker.
Deal or not, the two will continue to be the industry’s leaders and long-term attractive plays.
This is a case of No. 2 trying to gobble up No. 1. It won’t happen -- not yet, anyway.
The prevailing sentiment on Wall Street is that Vulcan Materials (VMC) will reject the unsolicited $4.8 billion buyout offer of Martin Marietta Materials (MLM). Vulcan, the largest U.S. producer of gravel and sand, has to decide in a few days whether or not to embrace the all-stock hostile bid by Martin Marietta, the second largest maker of construction aggregates. This may well be a protracted battle as Vulcan is expected to ask Marietta to back off, unless it raise the ante.
The grocery chain raises its full-year guidance after delivering a strong fiscal third quarter.
Management raised its guidance for the remainder of the year off the strong quarter, prompting analysts to revise estimates higher and sending the stock to a Zacks No. 2 rank ("buy"). As it generates strong free cash flow, management has been rewarding shareholders through stock buybacks and dividend hikes. It currently yields 1.9%.
Everyone seems to love the stock at this price. That's a problem.
By Rick Aristotle Munarriz
There's never a shortage of Apple (AAPL) bulls. The world's most valuable tech company is percolating globally and IS cheap by most historical measuring sticks.
There isn't a lot of suspense here. A whopping 50 of the 55 analysts following the company have the stock rated as a buy or strong buy. Does that worry you? It certainly concerns me.
If you can handle volatility, this shipping stock offers a double-digit yield.
Navios Maritime Partners L.P. (NMM) is a shipping firm with a fleet of 18 dry-bulk vessels used to transport commodities such as coal, iron ore and grains.
Shipping firms like Navios do not take ownership of the commodities they transport. They simply charge companies a fee, known as a day rate, to ship commodities on their vessels.
Hundreds of billions of dollars are in play. Is this a good move, or did the eurozone take on a lot more risk?
Analyst sentiment has turned negative, but charts signal rally potential.
By Tom Aspray, MoneyShow.com
The market's technical outlook improved considerably after Tuesday's sharp gains. Still, there need to be further gains and positive market internals to firmly shift the evidence in the bull's favor. Stocks were generally lower in afternoon trading Wednesday.
Though individual investors and financial newsletter writers aren't giving any strong signals, the big brokerage houses and financial media seem to be getting more negative.
Customers are calling the shots in the business software market, demanding discounts that companies may not otherwise want to give.
The company said many of the deals it expected to close in the quarter did not, even after it added 1,700 salespeople in the first half of the year. Revenue at Oracle rose 2% to $8.8 billion, and new software license revenue -- a critical metric -- rose just 2% to $2 billion.
The world's largest chain of indoor water parks expects to end year with a splash.
By Zacks Equity Research
Great Wolf Resorts (WOLF) recently raised its revenue per available room (RevPAR) and adjusted EBITDA outlook for the upcoming fourth quarter as it believes the business is progressing impressively and above expectation.
The Madison, Wis., company expects adjusted EBITDA to exceed the higher end of its previous guidance range of $10.5 to $12.5 million and same-store RevPAR growth to be 8.5%, up from the earlier projections of 6 to 8%.
The fix appears to address some, but not all, user complaints.
Amazon has issued a free software update that "enhances fluidity and performance." The update is also supposed to improve the tablet's touchscreen after complaints that the screen was slow to respond.
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Wall Street is getting more selective and demanding profits from this hyped-up sector.
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[BRIEFING.COM] Recent action saw a continuation of the range-bound trade that has essentially kept the S&P 500 where it began the trading day.
The technology sector (-0.8%) remains weak, which has prevented the broader market from climbing above its flat line. All things considered, despite today's loss, the technology sector is flat for the week versus a 0.7% gain for the S&P 500.
The tech sector will be in focus again tomorrow as participants will react to a full slate ... More
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