If everything goes as planned, this week will be the busiest for initial public offerings since 2000.
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Rubber-stamping excessive executive compensation ruins things for the rest of us.
By Alyce Lomax
Last year, CEOs at the biggest American companies made better money than they did in 2007, despite the intervening economic havoc. Why did executives enjoy such a cushy payday? Because their biggest shareholders did nothing to stop it.
According to executive compensation research firm Equilar, the typical CEO made $9 million in 2010, a 24% increase over last year. In 2007, before the housing bubble burst and the financial crisis hit, the median pay for CEOs was $8.4 million. Although CEO pay did clock two years of declines, major CEOs have apparently quickly regained lost ground in pay levels.
Sadly, they seem to be among the few groups of individuals who have regained much at all in the last couple of years. While some of these CEOs undoubtedly deserve pay hikes for great performance, many don't.
We’ve been following three technically sound stocks whose strong overseas operations will also benefit if the US dollar stays weak. One is still a good buy, and a fourth stock has just emerged.
Funds that tap a mix of gold, silver, platinum and palladium can be useful in a variety of investing scenarios.
By Don Dion, TheStreet
Precious metals have become a major region of interest for ETF sponsors. Since its introduction in late 2004, the physically based SPDR Gold Shares (GLD) fund has taken off in popularity, gathering over $60 billion in assets, making it the second-largest ETF in the world.
Over the ensuing years, the success of this fund has been noticed by large and small providers. Many, attempting to profit from interest in this corner of the market, have launched their own funds designed to offer investors access to these shiny resources.
While some firms, like Global X and Market Vectors, have opted to take the equity-based route with miner funds like the Global X Silver Miners ETF (SIL) and Market Vectors Gold Miners ETF (GDX) respectively, others have chosen to use futures contracts or physical stockpiles to provide investors with direct access to their desired metals.
By pricing the stock more than 80% below its opening price, the social-media giant is left out while initial investors make big profits.
By Jeff Reeves, Editor, InvestorPlace.com
LinkedIn (LNKD) shares soared in their market debut Thursday, though the social-media giant made a nearly $300 million mistake with its IPO.
The company priced its long-awaited IPO at $45 a share Wednesday, but the stock opened at a stunning $83. By 11 a.m ET, shares were trading up a whopping 95% at $97.85. With 7.8 million shares up for grabs, LinkedIn made $351 million in its public offering. But had it priced the initial shares 84% higher, it would have raked in $647 million in capital instead.
In short, somebody made a fortune on this initial public offering, but it wasn't LinkedIn.
Analysts are all too eager to sound the alarm, but good stocks are good stocks -- period.
Let's see, after you've had a good run in stocks, or after stocks have reported some good news, you are usually forced to chase them, courtesy the momentum people who want in and want up.
Occasionally, though, you get your entry points from the Street, which, since the 2000-03 and 2008-09 debacles, is always anxious to downgrade at a moment's notice, just when things are starting to look up.
Take Intel (INTC). Goldman, which had been saying that Intel was going to $21 and had a "hold" rating on it, went to an outright "sell" Thursday and changed its price target to $20. I have not been a fan of Intel, preferring ARM Holdings (ARMH), because Intel is not part of the vast Apple (AAPL) ecosystem. It does not have the proper smartphone entry. And it is still very much linked to a device in decline -- the personal computer. But it now has a new chip that has lots of power and uses a lot less energy, and that might be the perfect solution to its problems.
CSCO is a recent addition that has underperformed, and the index should focus more on consumer tech than corporate tech.
By Jeff Reeves, Editor, InvestorPlace.com
Next Thursday marks 115th birthday of the much-followed -- and much maligned -- Dow Jones Industrial Average. Charles Dow created the benchmark on May 26, 1896, at a reading of 40 points, representing the dollar average of 12 stocks from leading U.S. industries.
There have been a host of changes to the index over the years, with the lineup of component stocks growing to 30 and involving 48 different formulations since its inception. Of course, some of the most recent changes include booting out victims of the financial crisis: General Motors (GM), American International Group (AIG) and Citigroup (C).
But why wait until a company goes bankrupt or gets bailed out to rejigger the index? If the Dow is so widely cited by the media and economic analysts, shouldn't it be a precise gauge of the stock market and the American economy as a whole and not just a nostalgic list of old giants that have seen better days?
The high-end grocer has seen its share price go through the roof in the last year.
The company's second-quarter earnings were the strongest in five years. Whole Foods is making so much money, in fact, that it repaid outstanding debt ahead of the August 2012 due date. How often does that happen?
Standard & Poor's raised its corporate credit rating on Whole Foods to BB+, which is the top notch before investment-grade levels. "The rating on Whole Foods reflects our expectation that the company will maintain its sales and profit growth and enhance credit metrics," S&P analyst Charles Pinson-Rose told Dow Jones.
Fund managers surveyed by Merrill Lynch have cut exposure to risky sectors and assets as they become less confident about economic growth and profits.
Based on the findings of the latest Merrill Lynch fund manager survey, the "smart money" has become a lot less excited about the future. Growth expectations are being marked down, and earnings are expected to stagnate.
These are all consequences of the negative factors I've been discussing in my recent columns and blog posts. From fresh losses for the housing market to a peak in corporate earnings growth to the end of accommodative monetary and fiscal policy to surging inflation, disappointing economic data and renewed concerns over the health of the euro zone, investors have plenty to worry about.
And now, based on the survey findings, the big boys are starting to pull in their horns. The overall takeaway: Fund managers surveyed, who collectively control more than $800 billion in assets, are questioning whether global economic growth can continue to press ahead, given all the headwinds we face. As a result, they're starting to take action.
For the average investor, it might pay to wait until after shares go public.
LinkedIn is expected to price its initial public offering on Thursday. All in all, it looks like the investor demand is substantial, as the company boosted the per-share price range on the deal to $42-$45 from $32-$35.
LinkedIn doubled its revenue last year – reaching $243.1 million – and the company is even profitable. The IPO will also give investors a taste of the social-networking market — the LinkedIn website has more than 100 million registered members.
So how can you get shares in the IPO? Here’s a look at some of the options:
Top funds disclose their moves for the past three months.
By Dan Caplinger
Many investors pay mutual fund managers thousands of dollars each year to make the right moves with their money. But thanks to Securities and Exchange Commission disclosure rules, you get a free look every three months at the investments that mutual funds buy. Although they come with a time lag, that information can give you some great insight into the way that professional investors think about strategy.
Every quarter, institutional investors and mutual funds that meet certain size requirements must disclose their holdings to the SEC on what's called Form 13F. These 13F reports provide most of the information that market trackers follow in seeing what top investors like Warren Buffett and George Soros are doing with their money.
Travel, dining and high-end retail companies should benefit.
By Scott Rothbort, Stockpickr
I have said for some time that the synchronous and meteoric rise in the prices of commodities is unsustainable. These markets were not being driven by the interaction of supply-and-demand dynamics. Rather, we had a situation in which speculative fervor was juiced up by the excessive leverage available through commodity futures and, to a lesser extent, leveraged commodity exchange-traded funds.
While in traditional economics the market's equilibrium is set by buyers and sellers agreeing on a price and quantity, in commodity markets the price of the commodity is a function mostly of the futures markets rather than the spot or cash markets.
Further, from where we sit in the U.S., commodities are priced in U.S. dollars. But in other nations, those commodities are priced in their local currency. While the prices of crude oil and gold were surging in U.S. dollar terms, they were relatively unchanged when priced in euros. In essence, the recent commodity speculation was a dual trade on the price of commodities in U.S. dollars and the exchange rate of U.S. dollars vs. euros.
Higher food and gasoline costs are pushing consumers to lower-margin necessities at retailers this year.
Shoppers at both stores are showing similar characteristics so far this year. They're buying more necessities, such as food and toilet paper, and shying away from clothing, furniture and other pricier items.
That's cutting into profits at both stores because groceries and household items generally have lower margins. Target said its gross margin fell to 30.4% from 31.3% in its first quarter, which ended April 30. Target's margin is also hurt by the 5% discount it gives shoppers who use its credit and debit cards.
Post continues after this video analyzing Target's quarterly performance:
United, Delta and Alaska could buck the usual trend of a seasonal slump.
By Ted Reed, TheStreet
After a better-than-expected first quarter for the airline industry, a veteran analyst is recommending that investors buy airline shares now, despite their historical tendency to perform their best between fall and spring.
Deutsche Bank analyst Mike Linenberg, in a report issued Wednesday, said the outlook is good for "a contra-seasonal trade" after carriers largely managed to overcome a variety of first-quarter headwinds.
"History would suggest that the time to own airline shares is from the fall to the spring and to lighten up during the early summer," Linenberg wrote. "However, every once in a while airline shares are some of the summer's best performing stocks."
These 2 funds provide yields in a shaky market. Includes video.
By Don Dion, TheStreet
In recent weeks, a variety of factors have helped to muddy many investors' market outlooks.
The ongoing commodities shakeup, concerns about the U.S. debt limit, and the ongoing political and economic turmoil facing regions including Europe, the Middle East and Northern Africa are reigniting fears and causing skittish investors to second-guess the strength and longevity of the market recovery.
Given these looming concerns, the relief that comes with sticking to the sidelines may be attractive. However, heading for the exits is not the ideal option. The recovery may be rocky, but investors who bail out now could miss out later.
These leaders can give important signals about the broader market. With one of their charts showing a bottom, investors should take notice.
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The glory days are over for big-box retailers as consumers search for more convenience, say Goldman Sachs analysts.
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- Aug gold fell into negative territory in morning action as the dollar index strengthened after an advance GDP reading showed a 4.0% expansion during Q2 (Briefing.com consensus expected GDP to increase 3.2%). The move lower also came ahead of the latest policy statement from the FOMC released at 14:00 ET. The yellow metal slipped from its session high of $1303.00 per ounce and spent the remainder of the session trading in the red. It eventually settled with a 0.3% loss at ... More
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