Why stocks are in for a rough ride this week
Stocks in for a rough ride this week

Longtime market bull Jeremy Siegel says investors could realize the market is behind the curve on interest rates.

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A single fund holds some of the Oracle's most popular big-company investments.

By TheStreet Staff Feb 18, 2011 11:48AM

By Don Dion, TheStreet

 

It has been a busy week for Warren Buffett fans.

 

On top of Buffett's visit to the White House -- where he, George H.W. Bush, Maya Angelou and others were honored by President Barack Obama and presented with the Presidential Medal of Freedom -- the Berkshire Hathaway (BRK.A)13F filing was released to the public.

 

Oberservers have spent the week fiercely digging through the document in hopes of uncovering clues to Buffett's view of the global market.

 

In the final months of 2010, Buffett made some tweaks to his legendary portfolio. Overall, the famously bullish investor ended the quarter as a net seller, unloading shares of a number of his holdings and further increasing the size of his already substantial pile of cash.

 

Doomsayers and critics abound, but they are missing the point -- and missing opportunities to make money.

By Jim Cramer Feb 18, 2011 10:20AM

jim cramerthestreetYou can learn so much from Twitter. You can learn how total amateurs think (there are a lot of good people out there, too, but that's not the point of this post). You can learn how people are adept at losing money and have a total loser's mind-set. You can see how far people need to go to stay in the game and make money. In fact, you want to kick them out of the game!

 

Let me detail some of the loser attitudes I am seeing. By far the most common one is "Is this a top?" for the stock they want to know about. A top? This kind of illogic is something we seek to combat every day in Action Alerts Plus. If you think the fundamentals are deteriorating, that sales are decelerating, that margins are being compressed, that the end markets are getting weak, that the execution is getting sloppy, that the competition is heating up, then you very well might have a top on your hands.

 

If you think that gross margins are good and maybe getting better and sales are strong, you most likely don't have a top on your hands. You have a stock that can churn higher that might have excellent earnings power in the out years.

 

Boosted by improvement in the construction and forestry equipment units, Deere enjoys a blowout first quarter.

By Jim J. Jubak Feb 18, 2011 1:08AM
Jim JubakGood times for the world’s farmers and for Deere (DE) will continue, Deere said in its first-quarter earnings report, released before the market opened Wednesday.

The company’s earnings reports get scrutinized as much for Deere’s projections on farm prices as they do for the company’s own financial results. And Deere’s news for farmers was all good. The company raised its forecast for the 2011-2012 price of corn to $4.90 a bushel from its earlier forecast of $4.35 and its forecast for wheat to $6.35 a bushel from $5.50.

Not that the company’s own results were anything shabby. For the just-completed quarter, Deere announced earnings of $1.20 a share, better than the 99 cents a share expected by Wall Street analysts. In last year’s first quarter, the company earned 57 cents a share. Sales climbed to $6.12 billion, up 27% from the first quarter of 2010.
 

Traditionally sleepy sectors like healthcare are finding favor again. Here's why, along with a few fast moving stocks in the group.

By Anthony Mirhaydari Feb 17, 2011 6:15PM

A shift is underway. Long ignored stocks in defensive sectors are perking up. Specifically, I'm seeing activity among health care issues. As a group, the sector is recovering from a period of underperformance and demonstrating relative strength vs. the broad market for the first time since last summer. Why the shift?

 

For one, there is an argument to be made that as the economic growth cycle and stock bull market matures, investors will start to transition from ultra-cyclical stocks like semiconductors into more defensive names.

 

There are other reasons too, including attractive valuations and high "sector idiosyncratic risk" -- something I explain below. As all of this normalizes, there will be opportunities for those who can identify the best companies with the brightest growth prospects. Here are a few stocks that I think are good candidates.

 

The company is reportedly hogging touch panels from Taiwanese manufacturers, making it difficult for rivals to secure enough supply.

By Kim Peterson Feb 17, 2011 2:56PM
Credit: (© Justin Sullivan/Getty Images)
Caption: Apple iPadThere's an amusing report out of Digitimes in Taiwan today. Apple (AAPL) has snaked nearly 60% of the world's touch-panel supply, causing headaches for rivals debuting new tablets.

Apple wants to ship 40 million iPads this year, Digitimes reports, and it's buying what it can from major touch-panel makers Wintek and TPK. Now, second-tier tablet makers "are already out of the game," sources tell Digitimes.

There's tight supply left for Research in Motion (RIMM), Motorola (MSI) and Hewlett-Packard (HPQ), all of whom are debuting tablet devices this year. Apple's iPad already has a formidable market lead, and other companies need volume in order to catch up. "Sources from tablet PC makers also pointed out that the component shortage is causing their shipment volumes to be unable to catch up with their orders, especially for second-tier players," Digitimes reported. 

W.R. Berkley has a track record, talent, and a tantalizing price

By Motley Fool Pick of the Day Feb 17, 2011 2:52PM

Image: Insurance (© Hemera/age fotostock)After investing in an insurance company, Mark Twain said, "Life has seemed more precious. Accidents have assumed a kindlier aspect . . . But to me now there is a charm about a railway collision that is unspeakable." Fool analyst Michael Olsen explains Twain's not necessarily being macabre.

 

Rex Moore, Motley Fool Top Stocks Editor

 

The best insurance companies don't just write a simple policy, perform a service of mutual societal benefit, and part ways.

 

They seek risks -- the dirty, shunned variety -- and exploit them: Workers' compensation, product liability, and three-legged donkeys. The best insurers bide their time, and when other run, they write insurance on them. And they make lots of money.

 

The rumors are true: Android phones that allow users one-touch access to their Facebook accounts are unveiled at the World Mobile Congress in Barcelona.

By TheStreet Staff Feb 17, 2011 2:47PM

Credit: © Paul Sakuma/AP
Caption: Facebook CEO Mark Zuckerberg talks about the new email service at an announcement in San Francisco, Monday, Nov. 15, 2010By Seth Fiegerman, MainStreet

 

For months, Facebook has denied rumors that it would take a page from Google’s (GOOG) playbook and come out with its own line of smartphones, but this week the company did an about-face and revealed that even though it will not develop a Facebook phone, other companies already are.

 

“A lot has been made about a single Facebook phone but this year you can expect to see dozens of phones with much deeper social integrations than anything we’ve seen so far,” Mark Zuckerberg, the co-founder and CEO of Facebook, announced Tuesday at the 2011 Mobile World Congress in Barcelona, Spain.

 

In particular, Zuckerberg highlighted two new Android phones manufactured by HTC – the ChaCha and Salsa - that will boast a special Facebook button to give users the ability to pull up their Facebook accounts with one touch.

 

The National Enquirer publishes photos that purport to show the Apple chief outside of a treatment center in California.

By Kim Peterson Feb 17, 2011 1:11PM
File photo of Apple CEO Steve Jobs (© Tony Avelar/AP)Some Apple (AAPL) shareholders are nervous today after photos surfaced apparently showing chief executive Steve Jobs outside a cancer clinic in California.

The National Enquirer published photos after following Jobs from breakfast to the Stanford Cancer Center, Gizmodo reports. Jobs is on a medical leave from the company, but it's hard to tell whether he is in fact the man in the photos. Apple has not verified the Enquirer's report.

As unseemly as the photos are, shareholders are reacting by pushing the stock down more than 1% today to $358.50. That's not a huge drop -- certainly not enough to dent the massive climb the stock has made since September. Apple is still trading close to its 52-week high of $364.90.

Apple shareholders are desperate for information about Jobs, even unverified reports accompanied by National Enquirer photos. The company has not explained why Jobs needed to go on medical leave -- his third in seven years -- and the reports, if correct, could shed some light on the situation. 

The billionaire hedge fund manager increased his stakes in Delta, InterOil and Dendreon.

By TheStreet Staff Feb 17, 2011 11:25AM

Image: Paper airplane made of money (© Tetra Images/Corbis)By Frank Byrt, TheStreet

 

Billionaire investor George Soros' hedge fund made a big bet on Delta Air Lines (DAL) in the fourth quarter, while keeping gold as its largest holding. Apple (AAPL), maker of the iPad and iPhone, remained a top 10 position.

 

The fund, which serves wealthy investors, added 11 million shares to its Delta Air stake, bringing it to 14.7 million shares worth about $186 million, Soros Fund Management said in a Securities and Exchange Commission filing.

 

The fund's assets rose about 15% in the fourth quarter, to $7.7 billion, up from $6.7 billion on Sept. 30.

 

Companies with an abundance of coal and iron ore, like Cliffs Natural Resources, are reporting unheard-of profits.

By Jim Cramer Feb 17, 2011 10:16AM

jim cramerthestreetStep back into time to an era when great forges devoured coal and iron to make the world's best steel to meet the demand of industrial growth. The companies with an abundance of these commodities coined fortunes, expanding and raising prices far faster than costs increased and producing record profits for shareholders despite worries, woes and hand wringing from critics that it all must end and end badly.

 

Think back in time to the quarter that Cliffs Natural Resources (CLF) announced last night. That's right, I am talking about the most recent of histories, October through January, and I am looking at commodity producer Cliffs, which reported a to-die-for number after Wednesday's close, with a 100% increase in sales and a 450% increase in profits.

 

Yep, the successor to the oh-so-troubled Cleveland Cliffs, the iron ore company with a list of clients that constantly seemed to be seeking bankruptcy, stiffing their premier iron ore provider, the company that restructured repeatedly, is now in its halcyon days because of worldwide demand for iron and coal.

 

Concern over rising prices has investors moving back into precious metals after January's selloff.

By Anthony Mirhaydari Feb 16, 2011 7:10PM

Current inflationary pressures are larger and more pervasive than many believe, which was the subject of one of my recent columns. Both at home and abroad, prices continue to move higher. And now, inflation is beginning to cross-pollinate as ultra-lose monetary policy in the United States is exported to places like China, pushing up wages and commodity prices before being exported back to the United States via higher import prices.

 

In China, core consumer prices increased 2.6% year-over-year for the month from a 2.1% increase in December. And the Producer Price Index increased 6.6%, accelerating from the 5.9% increase in December and coming in well above the 6.1% increase forecast by analysts. In the United States, import prices are rising at a 5.3% annual rate and producer prices are rising at a 3.6% rate.

 

After flat lining for a few months, inflation expectations are moving higher again. And that's returned silver prices to their record high and pushed gold and gold stocks off their January lows. I think there's more to come as the market has yet to adequately discount the inflation problem -- setting the stage for continued gains by gold and silver in the months to come. Here's why.

 

Suntech Power has ongoing cost struggles, and new investments by rivals continue to add pressure.

By Jim J. Jubak Feb 16, 2011 4:02PM
Jim JubakI dropped Suntech Power Holdings (STP) from the Jubak Picks 50 long-term portfolio on Jan. 18, but this is the first opportunity I've had to explain why in detail or to actually remove it from the portfolio. I'm working on explaining the other sells and buys from that group over the next week or so. (See the Jan. 18 post here.)

What worries me about Suntech Power in the long-term? A new generation of investment in solar manufacturing likely to put Suntech even further behind on cost just when the company thinks it has caught up to competitors.

At the moment, Suntech has a cost problem. In the September 2010 quarter, Suntech’s cost-per-watt was $1.48, according to Morningstar. That compared to $1.11 at Yingli Green Energy Holding (YGE) and $1.20 at Trina Solar (TSL).

The company decided that the way to address this cost disadvantage -- created, it believed, because it didn’t produce silicon wafers but acquired them from outside producers -- by buying the wafer production operations of Glory Silicon in 2010.
 

The airline is making several changes to its SkyMiles program in hopes of keeping customers happy and loyal.

By Kim Peterson Feb 16, 2011 3:30PM
Image: Airport check-in (© Corbis)There is no reason for airlines to slap an expiration date on frequent-flier miles. We've earned them, and we shouldn't have to use them by a meaningless deadline.

DeltaAir (DAL) now agrees and says it will eliminate the expiration dates on its SkyMiles program. Previously, the miles disappeared after two years of no activity on an account. Delta is now the only major U.S. airline that doesn't expire its miles.

Why did Delta do this? For one thing, its mileage program was nothing to brag about. It lagged those of rivals in basic features. Try collecting a round-trip award at the basic 25,000-mile mark. You'll probably need to cough up 40,000 or more, writes Justin Bachman at BusinessWeek.

That's one way to infuriate customers. 

The payments division of eBay is trying to make inroads at grocery stores and other physical retailers.

By Kim Peterson Feb 16, 2011 2:23PM
Image: Filling fuel tank (© Corbis)PayPal, the shining star within eBay (EBAY), has done a spectacular job of expanding beyond the auction world, but its growth has been tied mainly to online purchases. That might change soon.

PayPal wants to move to the cash register next. It's testing ways to use PayPal to buy groceries and gas, reports Tricia Duryee at All Things Digital. If PayPal gets just 1% of retail sales, it will double its business, executives say.

That's fine to say, but how exactly would PayPal do this? The company is being a little cagey, preferring to keep its testing top secret. But president Scott Thompson gave some clues to AllThingsD.

PayPal has already tried putting stickers on phones. A mobile-payments company called Bling Nation makes a small adhesive square that sticks to your phone and links to your PayPal account. To pay for a purchase, you tap the sticker to a sensor installed in a store. A text message appears on the phone that the cashier types into the console. 

China and India provide the means for growth.

By Motley Fool Pick of the Day Feb 16, 2011 2:19PM

File photo of Starbucks barista (© Anthony Bolante/Reuters)Starbucks' growth opportunities are much more limited in the U.S. than they once were. (What's next, opening new stores within existing stores?) But Jason Moser says not to worry. The international scene provides plenty of high-energy opportunity.

 

Rex Moore, Motley Fool Top Stocks Editor

 

Not long ago I spoke with Roger Friedman about a few companies on my watch list. Today I am ready to put some money behind one of those companies on my list and add some globally caffeinated brand power to my Rising Star portfolio.

 

Star-what?
We all know the story. Starbucks (SBUX) is the iconic coffee brand known the world over. Trendy and delicious, it has worked its way into more than 50 countries around the globe, and I think it's just getting started.

 

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[BRIEFING.COM] The stock market finished the Thursday session on a higher note with the S&P 500 climbing 0.5%. The benchmark index registered an early high within the first 90 minutes and inched to a new session best during the final hour of the action.

Equities rallied out of the gate with the financial sector (+1.1%) providing noteworthy support for the second day in a row. The growth-oriented sector extended its September gain to 1.9% versus a more modest uptick of 0.4% for the ... More


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