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Exchange-traded funds offer retail investors access to the currently hot commodity sector. However, not all of these funds are created equal.
By Daniel Dicker, TheStreet
With commodities flying high, everyone is looking for the best way to get in on these fast-gaining assets.
There are many different ways to try to capture the seemingly daily gains in oil, copper, coffee, cotton and corn -- but like other investments, each kind of commodity play has its own pluses and minuses.
Let's look at what is probably the most accessible vehicle for the retail investor -- commodity exchange-traded funds -- and lay out the best ideas and avoid the ones that can sink your portfolio and your wallet.
The restaurant chain, famous for both chicken wings and cleavage, has been bought out by a consortium of private investors.
By Miriam Marcus Reimer, TheStreet
Hooters of America said it has been bought out by a consortium of private investors, including Chanticleer Holdings (CCLR).
The group of private investors simultaneously acquired Dallas-based Texas Wings, Hooters' largest franchisee.
"I am so extremely proud of what my father and our team here have built," said Coby Brooks, the CEO of Hooters since 2003 and the son of the late founder. "And I am even more excited about our next phase of growth following this transaction."
Owning not only the land but the timber as well just might be a great long-term strategy.
Today I took Will Rogers' advice and bought
Plum Creek Timber (PCL)for my Barchart Van Meerten New High portfolio. Plum Creek Timber is the second largest private timberland owner in the United States, with approximately 7.8 million acres of timberlands located in 19 states.
As America's and Chinese thirst for wood for building materials and furniture returns the harvesting of wood should make this company a long term cash cow. As the population grows who wouldn't want to own almost 8 million acres of raw land?
I know this looks like an asset buy but it actually came to my attention when screening on Barchart for stocks hitting the most frequent new highs. This company hit 16 new highs and appreciated 12.71% in the last month earning it a 100% Barchart technical buy signal. It trades around 41.84 with a 50 day moving average of 37.65. The stocks momentum is increasing with a Relative Strength Index that is 78.90% and rising.
Although a late starter, the company has made a big splash with exchange-traded funds by cutting expenses.
By Don Dion, TheStreet
Among exchange-traded funds, a number of interesting fundamental trends have developed that will continue to alter the industry's landscape over the long term. In the case of the ETF price war, it is the investor who will ultimately come out the winner.
Since their introduction, exchange-traded funds have been lauded for their ability to undercut the expense ratios of mutual funds. Rather than rely on the investment preferences of an active manager, traditional ETFs are designed to track the performance of a passive index. This has played a big role in allowing providers to charge significantly less for their products. As a result, ETFs have welcomed a staggering influx of funds from cost conscious investors.
Low costs continue to play a major role in helping ETFs gain ground on the massive mutual fund industry. However, within this industry itself, a price war is taking place, threatening the long-term dominance of many top providers.
The trend of Main Street investors watching metrics like housing starts and jobless claims is worth exploring.
By Jonas Elmerraji, Stockpickr
Since the financial crisis of 2008, economic data have become a mainstream indicator of the world’s market pulse. Suddenly, Main Street investors are paying attention to metrics such as housing starts and jobless claims, and the broad market is reacting directly to new data as soon as it hits the street.
For investors, that increased interest in economic data is a trend that’s worth exploring. To do that, it’s important to know where to focus your efforts. The truth is that some stocks are more susceptible to the market’s economic news than others.
By homing in on trades that have higher data-induced volatility, traders can actually eke out gains from this market. This isn’t the first time we’ve looked at the investability of economic indicators. Back in August, we took a look at three ways to play the data.
Now, though, with a new market tone being set in 2011, it’s time to look at three updated ways to trade that economic data.
Rubicon combines glittering potential with a low valuation.
Fool analyst Andrew Sullivan is always looking for low-risk, undervalued opportunities, and lately his attention has been on gold mining equities. Today he introduces us to a gem in Rubicon Minterals.
Rex Moore, Motley Fool Top Stocks editor
Earlier this week, I allocated 6% of my portfolio to Rubicon Minerals (RBY). With a tremendous gold deposit in the very prolific Red Lake, Canada, mining zone, this company is undervalued based on its peers as well as recent takeover transactions in the gold space.
The threat of $4 gas and its impact on the economy are far more worrisome than a pullback in commodities.
As someone whose biggest fear is $4-a-gallon gas and what it will do to the U.S. economy, I find days that start out like this -- with oil almost back to $85 and stocks floundering -- deeply troubling. You remove my principal worry of $110-a-barrel oil, where we are knee-deep in the $4-plus gas range, and I think the market should be quelled of fear, not fearful.
Of course, it is just the opposite. It is the bursting of the commodity bubble, which signals that economies are cooling off. It is a sign that China has gotten too soft, that things aren't as good as we think.
And it means that the industrials have to sell off with no place to rotate that money into, because the other commodities aren't coming down as hard as oil. Without those coming down, many of the food and beverage stocks we would rotate into don't work. Plus, the drug stocks are just awful.
The most attractive way to play the metal's potential upside story -- with the least downside risk -- could be Freeport McMoRan.
In an effort to bring in more revenue and customer loyalty, airlines are selling all kinds of extras.
Want your luggage picked up at home? They can do that. How about a pass for the snazzy airport club lounge? Done. Wine and cheese on the flight? Sure. And then there are some extras you probably never even considered, like paragliding lessons at your vacation destination.
It's all part of a new effort to provide customers with everything they need on the day of flight, and then some. Airlines get more control over the customer, and they also see it as a way to win brand loyalty and compete on more than just price, The Wall Street Journal reports.
In the recession, drinkers traded down to less-expensive brands. Now they're hooked.
Wine drinkers traded down to cheaper brands over the past few years, and now they're not returning to the pricey bottles, The Wall Street Journal reports. Instead, they're sticking with lower-priced ones.
The economic downturn was the hardest on wineries that sell bottles for $20 and up, the Journal reports. Last year, wines priced at $9 to $12 a bottle saw sales spike 12%, while the overall industry saw only a 3% increase.
People "have woken up to the fact that there are a lot of choices out there," one California winemaker told the Journal. He said he doesn't expect buyers will return to their earlier spending habits. "It's not ever going to be what it was."
Even Wal-Mart (WMT) is jumping on the lower-priced-wine trend, installing wine vending machines at some locations.
One energy stock with an asymmetric payout.
Fool analyst Dan Dzombak has found a stock that's quite risky, but also has some catalysts that could propel it upward. Instead of buying the stock, he's employing a LEAPS options strategy that improves his risk/reward ratio.
Rex Moore, Motley Fool Top Stocks editor
Today, I'm excited to recommend and open a 2-Year LEAPS position in ATP Oil & Gas (ATPG), which at its current value will represent 8% of my portfolio.
Like Cobalt International Energy (CIE) and Callon Petroleum (CPE), ATP is an exploration and production (E&P) company, unlike them, ATP takes the "E" out of the equation. It does this by buying proven, yet undeveloped, offshore fields and bringing them into production.
One company hopes to sell Canna Cola and other flavors to medical-marijuana patients.
Diavolo Brands hopes to market a line of soft drinks enhanced with THC, the psychoactive ingredient in marijuana, The Santa Cruz Sentinel reports. The company wants to produce a number of flavors, including Canna Cola, a Dr Pepper-like Doc Weed and a lemon-lime Sour Diesel.
You won't find the drinks at 7-Eleven. The sodas are intended for use by medical-marijuana patients and likely will be distributed at pot dispensaries that have received regulatory approval.
As states continue to decriminalize marijuana use for medicinal purposes, a new kind of entrepreneurship is unfolding. Small companies are developing ways to market pot products across the country, aiming to stake an early claim in a budding industry.
History suggests investors would have more to gain from a Pittsburgh victory over Green Bay in Super Bowl XLV.
By Robert Holmes, TheStreet
The Steelers and Packers will meet after the teams won their respective conference championship games Sunday. Appearances in the big game by both teams have been historically good for investors, according to data collected by financial analytics firm Capital IQ. However, stocks rose more during the years the Steelers won.
The average return of stocks during the years the Steelers represented the AFC in the big game is 25%. When the Packers represented the NFC, the stock market returned 24%, according to the data. Capital IQ calculated the annualized average returns for the S&P 500 ($INX) from January 1967 through Dec. 31, 2010. The data offer a lighthearted look at 44 years of Super Bowl history and stock market returns rather than serious fundamental analysis.
Amazon, Qualcomm and others will likely benefit from stronger spending.
By Frank Byrt, TheStreet
Amazon.com (AMZN), Yahoo! (YHOO), EMC (EMC) and Qualcomm (QCOM) are expected by analysts to have closed out 2010 on a positive note as the recovering economy boosted demand for their products and services.
That sets the stage for potentially big gains in 2011. Technology stocks should benefit from customers' postponement of capital spending for the past two years, which means many are in dire need of upgrades to computer systems.
In addition, the increasing use of the Internet and the potential growth in advertising on Web pages, the booming use of mobile-computing devices and the concurrent demand for data storage -- thanks to the growth of cloud computing -- contribute to a positive outlook for each of these firms. Here are the fourth-quarter earnings expectations for the four companies, starting with Yahoo:
A deal at $20 per share would be the largest leveraged buyout since the credit crisis.
By Jeff Reeves, editor of InvestorPlace.com
Sara Lee (SLE) is one of the most iconic names in the grocery aisles. But if a group of prospective buyers has its way, the name will be taken off the shelves of Wall Street as the publicly traded stock goes private in a deal worth nearly $13 billion.
The move is worth noting for a few reasons, not the least of which is its size. A deal at that price would be the largest leveraged buyout since before the financial crisis. But a Sara Lee purchase would also show all investors that mergers and takeovers are still very much in favor on Wall Street -- a good sign for all stocks and for the economy in general.
Sara Lee will have a few days to weigh an offer from a group of private-equity firms that have valued the company at up to $20 a share, or nearly 10% above the share price last week. That totals almost $13 billion.
So why should you care about a deal this size? Here are three reasons the Sara Lee buyout is a good sign for everyone -- even if you're not a shareholder:
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[BRIEFING.COM] The stock market continued its strong start to the week with a broad-based Tuesday rally that sent the S&P 500 higher by 0.5%. Nine of ten sectors registered gains while the benchmark index extended its week-to-date advance to 1.4%.
Equities received an opening boost from a pair of economic data points that crossed the wires this morning. An in-line CPI report suggested inflationary pressures remain contained, while a better than expected Housing Starts report ... More
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