Stock of the day.
APPLIED MATERIALS, Inc. (AMAT)
‘AMAT’ is a global leader in Nano-Manufacturing Technology and solutions with a broad portfolios of innovation equipments. Also the company provide equipments, services and software products for the fabrication of semiconductors chips, flat panels, solar photovoltaic cells and flexible electronics and efficient glass panels.
Worldwide spending on semiconductors fabrication equipments is expected to rise sharply during the year 2010, fuelled by a rebounding chip market according to the industry group. According to GARTNER Inc, Chip spending will rise over 77% this year vs. last year, to as much as 30B Dollars.
‘AMAT’ is going to be one of the beneficiary of this trend. On March 8, 2010 the company increased it’s dividend 17% to a yield of 2.27%, and a buyback of $2B of it’s own stock.
When a company buy it’s own stock it is believed that the stock is under value at current market prices, also when a company increase it’s dividend pay out it show a better profit in the near future.
According to my opinion ’AMAT’ is a strong buy with a target price of $20 a share by the end of the year.
Tuesday, March 9, 2010
Monday, March 8, 2010
IS THERE IS A BUBBLE IN US BONDS?
Today the US Government 10-Year bonds traded at 99.27 and yielded 3.71%. In other words, a bond that had a par value of $1,000 at maturity was currently trading below par at $992.70.
U.S. interest rates currently are historically low. Because of the recession, the Federal Reserve has kept interest rates artificially low in order to stimulate the economy.
One of the mandates of the Federal Reserve is to fight inflation. One tool at their deposal is to increase interest rates.
As the economy recovers and the unemployement numbers decline, the U. S. Federal Reserve will begin to increase interest rates. The moment they begin to do so, the interest rate increases will be frequent and dramatic. The result will be a decrease in the value of the U.S. 10 Years Bonds. It is very possible that the bonds can lose as much as 30% of their value in the next two years.
According to the latest Wall Street survey , most of the new money invested in Wall Street was invested in bond funds. Because of the latest market volatility, many investors feel more secure in the Bond market without any understanding that their losses could be significant. Additionally understand that upon maturity, the bond will be paid their full par value. The question is “do investors want to wait ten years to get their money back” ?
Today the US Government 10-Year bonds traded at 99.27 and yielded 3.71%. In other words, a bond that had a par value of $1,000 at maturity was currently trading below par at $992.70.
U.S. interest rates currently are historically low. Because of the recession, the Federal Reserve has kept interest rates artificially low in order to stimulate the economy.
One of the mandates of the Federal Reserve is to fight inflation. One tool at their deposal is to increase interest rates.
As the economy recovers and the unemployement numbers decline, the U. S. Federal Reserve will begin to increase interest rates. The moment they begin to do so, the interest rate increases will be frequent and dramatic. The result will be a decrease in the value of the U.S. 10 Years Bonds. It is very possible that the bonds can lose as much as 30% of their value in the next two years.
According to the latest Wall Street survey , most of the new money invested in Wall Street was invested in bond funds. Because of the latest market volatility, many investors feel more secure in the Bond market without any understanding that their losses could be significant. Additionally understand that upon maturity, the bond will be paid their full par value. The question is “do investors want to wait ten years to get their money back” ?
Friday, March 5, 2010
Today, the US February unemployment report was released at 8:30 am. It revealed that another 36,000 American workers lost their jobs. Unemployment remained at 9.7%. The market expected worse numbers then reported. Therefore, at opening the stock market rose 95 points.
According to some statistics, the real unemployment number is 14.8 millions. I personally am skeptical regarding the numbers released today. I anticipate a revision of these figures. It is commonplace for the US government to revise numbers within a month, no matter what the report is issued.
SOLAEFUN POWER HOLDINGS CO. LTD “SOLF”
Yesterday “SOLF” reported their earnings for last quarter. The company returned to profitability and anticipates their 2010 volume of their shipments to be up 20%, from 500MW to 600MW. Prices for PV modules are about $1.95 per unit. As the development of solar energy becomes cheaper, it will be more affordable for buyers to purchase and use this technology. Therefore, it will become more practical for the masses to use. Future earnings can only improve.
In the past, I recommended this company. The 52 week low is about $2.28 a share and the 52 week high is $10.78. According to my opinion, the stock trading today around $7 a share is a buy.
According to some statistics, the real unemployment number is 14.8 millions. I personally am skeptical regarding the numbers released today. I anticipate a revision of these figures. It is commonplace for the US government to revise numbers within a month, no matter what the report is issued.
SOLAEFUN POWER HOLDINGS CO. LTD “SOLF”
Yesterday “SOLF” reported their earnings for last quarter. The company returned to profitability and anticipates their 2010 volume of their shipments to be up 20%, from 500MW to 600MW. Prices for PV modules are about $1.95 per unit. As the development of solar energy becomes cheaper, it will be more affordable for buyers to purchase and use this technology. Therefore, it will become more practical for the masses to use. Future earnings can only improve.
In the past, I recommended this company. The 52 week low is about $2.28 a share and the 52 week high is $10.78. According to my opinion, the stock trading today around $7 a share is a buy.
Thursday, March 4, 2010
Today’s trading was extremely cautious in anticipation of the February’s monthly jobs report due to be released tomorrow at 8:30 am.
This report is released once a month on the first Friday of each month. Many times the market reacts drastically to this report. Reaction to the report is usually short lived. For the most part by the next day, no one seems to care about the results. It is a great opportunity to sell stock if the report is positive. However if the report is disappointing, it is a good opportunity to purchase stock. At the end of the day, reversing the trade can turn out to be a good short term trade.
Today the CEO of CITIGROUP (C ) Vikram Pandit testified in front of the TARP panel. During his testimony he made very interesting points. It seems that “C” is on the road to a full recovery.
The bank has changed their methods of operations and will return to profitability within a short time. The big cloud hanging over “C” is the government. As of today, US Treasury Department has a huge investment in CITIGROUP. The US Treasury has 25 Billion dollars invested and owns about 27% of “C” stock.
The Treasury Department has plans to sell a large chunk of the stock at the end of March, after the lockup is over. The belief is that at one point “C” will repay their obligations to the Government. At that point, “C” will trade as a public company, free of US Government controls.
Currently the stock is trading around $3.40 a share. I believe that after the Treasury Department will sell their shares at the end of March, the stock will rise dramatically. I think that the stock can finish the year at over $5.00 a share. A 50% return on your money from today‘s closing price.
This report is released once a month on the first Friday of each month. Many times the market reacts drastically to this report. Reaction to the report is usually short lived. For the most part by the next day, no one seems to care about the results. It is a great opportunity to sell stock if the report is positive. However if the report is disappointing, it is a good opportunity to purchase stock. At the end of the day, reversing the trade can turn out to be a good short term trade.
Today the CEO of CITIGROUP (C ) Vikram Pandit testified in front of the TARP panel. During his testimony he made very interesting points. It seems that “C” is on the road to a full recovery.
The bank has changed their methods of operations and will return to profitability within a short time. The big cloud hanging over “C” is the government. As of today, US Treasury Department has a huge investment in CITIGROUP. The US Treasury has 25 Billion dollars invested and owns about 27% of “C” stock.
The Treasury Department has plans to sell a large chunk of the stock at the end of March, after the lockup is over. The belief is that at one point “C” will repay their obligations to the Government. At that point, “C” will trade as a public company, free of US Government controls.
Currently the stock is trading around $3.40 a share. I believe that after the Treasury Department will sell their shares at the end of March, the stock will rise dramatically. I think that the stock can finish the year at over $5.00 a share. A 50% return on your money from today‘s closing price.
Wednesday, March 3, 2010
A STOCK ANALIST ON WALL STREET CAN BE WRONG ALL HIS/HER LIFE, YET PEOPLE WILL KEEP LISTENING TO HIM/HER.
Here is just one of thousands of examples.
BANCO SANTANDER CENTAL (STD).
On February 24, 2010, “STD” was downgraded by BARCLAY CAPITAL from equal weight to underweight. In other words, sell the stock. “STD” was trading that day at $12.70 a share. Today March 3, 2010, the stock is trading at over $13.75 a share. A gain of over 8% for this week.
According to my opinion, “STD” is a buy at any price below $12.50 a share. The bank’s EPS (earnings per share) is over $1.50 a share. The P/E (price earnings ratio) is about 9. The dividend of 6.75% is fairly secure.
As always, markets are created by buyers and sellers. The buyer will purchase a stock because the investor believes that the stock will go up. Conversely, the seller will sell the stock because he believes that the stock will go down. The challenge for investors is to choose whether to be a buyer or seller
Here is just one of thousands of examples.
BANCO SANTANDER CENTAL (STD).
On February 24, 2010, “STD” was downgraded by BARCLAY CAPITAL from equal weight to underweight. In other words, sell the stock. “STD” was trading that day at $12.70 a share. Today March 3, 2010, the stock is trading at over $13.75 a share. A gain of over 8% for this week.
According to my opinion, “STD” is a buy at any price below $12.50 a share. The bank’s EPS (earnings per share) is over $1.50 a share. The P/E (price earnings ratio) is about 9. The dividend of 6.75% is fairly secure.
As always, markets are created by buyers and sellers. The buyer will purchase a stock because the investor believes that the stock will go up. Conversely, the seller will sell the stock because he believes that the stock will go down. The challenge for investors is to choose whether to be a buyer or seller
Tuesday, March 2, 2010
STOCK OF THE DAY
MICROSOFT CORPORATION (MSFT)
MSFT is trading today at $28.50 a share. The company is one of the most successful corporations on Wall Street. MSFT has almost $40 billion in cash while the operation generates almost One Billion Dollars net a month. During this year, MSFT unveiled their new operating system (WINDOW 7) and are scheduled to release their business upgrade of OFFICE and WORKS. The future is very promising and the stock is poised to go significantly higher.
Here are possibilities of how to trade MSFT.
Buy the stock outright and wait for the stock to appreciate. The target price is $33 a share within six months.
Buy the stock at $28.50 today and to sell covered calls against it. The calls should be for July 2010.
As example, buy 1,000 shares at today price and the cost will be $28,500. By selling covered calls for
July 2010 with a strike price of $30, a $1,000 premium is earned. The net cost of the stock will be only
$27,500 and the owner has to hold the stock till option expiration (July 1, 2010). If MSFT will be over
$30
a share, the owner will lose the stock and will pocket a $2,500 profit-a gain of almost 10% for 5 months.
Sell April 2010 puts with a strike price of $28 against MSFT for $650. If MSFT dips below $28 a share within two months, the stock will be given to the owner at $28 a share. For example, the owner will receive $650 for the obligation to buy 1,000 shares at $28 each. The net cost for the owner will be only $27,350 for 1,000 shares of MSFT. That is considerably lower than today trading price. However if the stock during the next two months will stay above $28 a share, the owner will pocket the premium of $650 without ever buying the stock.
MICROSOFT CORPORATION (MSFT)
MSFT is trading today at $28.50 a share. The company is one of the most successful corporations on Wall Street. MSFT has almost $40 billion in cash while the operation generates almost One Billion Dollars net a month. During this year, MSFT unveiled their new operating system (WINDOW 7) and are scheduled to release their business upgrade of OFFICE and WORKS. The future is very promising and the stock is poised to go significantly higher.
Here are possibilities of how to trade MSFT.
Buy the stock outright and wait for the stock to appreciate. The target price is $33 a share within six months.
Buy the stock at $28.50 today and to sell covered calls against it. The calls should be for July 2010.
As example, buy 1,000 shares at today price and the cost will be $28,500. By selling covered calls for
July 2010 with a strike price of $30, a $1,000 premium is earned. The net cost of the stock will be only
$27,500 and the owner has to hold the stock till option expiration (July 1, 2010). If MSFT will be over
$30
a share, the owner will lose the stock and will pocket a $2,500 profit-a gain of almost 10% for 5 months.
Sell April 2010 puts with a strike price of $28 against MSFT for $650. If MSFT dips below $28 a share within two months, the stock will be given to the owner at $28 a share. For example, the owner will receive $650 for the obligation to buy 1,000 shares at $28 each. The net cost for the owner will be only $27,350 for 1,000 shares of MSFT. That is considerably lower than today trading price. However if the stock during the next two months will stay above $28 a share, the owner will pocket the premium of $650 without ever buying the stock.
Monday, March 1, 2010
The Semiconductor Industry Association (SIA) announced on Monday, March 12010 that worldwide chip sales in January rose to $22.5 billion. A significant 47.5% increase from the same month a year ago. Additionally, chip sales were higher in January 2010 from December 2009.
This confirms the recommendation of February 24, 2010 regarding the upgrade of computers and software in order to improve productivity and to stay current in difficult business conditions. In the past I recommended some stocks that will be winners this year. Add to the list APPLIED MATRIALS, Inc (AMAT) and MICRON TECHNOLOGY, Inc (MU).
Take Over Potential.
It is extremely likely that E*TRADE FINANCIALS CORPORATION ’ETFC’ will be taken over this year by one of the largest discount brokerage houses -perhaps Charles Schwab or Ameritrade It is very difficult for the largest brokerage houses to grow organically. Therefore in order to increase their accounts and cash potential from market money accounts, they need to acquire a smaller brokerage firms.
This confirms the recommendation of February 24, 2010 regarding the upgrade of computers and software in order to improve productivity and to stay current in difficult business conditions. In the past I recommended some stocks that will be winners this year. Add to the list APPLIED MATRIALS, Inc (AMAT) and MICRON TECHNOLOGY, Inc (MU).
Take Over Potential.
It is extremely likely that E*TRADE FINANCIALS CORPORATION ’ETFC’ will be taken over this year by one of the largest discount brokerage houses -perhaps Charles Schwab or Ameritrade It is very difficult for the largest brokerage houses to grow organically. Therefore in order to increase their accounts and cash potential from market money accounts, they need to acquire a smaller brokerage firms.
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