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Wednesday, September 29, 2010

Investing the Recovery Act - LED Manufacture Cree Inc

The Recovery Act not only boost the economy it is also a good source of investment.  In this article lets look at project 9 on the Recover Act Report - LED Manufacture.  

In this project Cree Inc. (CREE), the leading manufacturer of solid state lighting based in North Carolina, received $39 million Advanced Energy Manufacturing Tax Credit to purchase new equipment to add capacity and capability to lower production costs of LED(light emitting diode) chips and fixtures. The project helped Cree Inc to add 375 jobs since 2009 and stay competitive with rivals in Korea, China and Japan.  

The LED industry is one of the hottest industries in today's energy saving aware world as LED lighting is more energy efficient than traditional lighting.  In addition it has broad applications even in traffic signals.  As Unite States is pushing into a more energy efficient economy, we should see continuous growth in this industry and especially Cree Inc.  

Looking at the stock CREE is currently trading near this year's low at $55.02 per share.  The technical chart shows CREE is on a rebound as it is now above 20 day moving average with KD line rising rapidly. Cree Inc's financial is very strong so buying the stock is not only safe but also has great growth potential. 

Tuesday, September 28, 2010

Investing the Recovery Act - Smart Meter

The Recovery Act not only boost the economy it is also a good source of investment.  In this article lets look at project 15 on the Recover Act Report - Smart Meter.  

In this project Itron Inc. (ITRI), a Washington State based leading technology provider to the energy and water industries throughout the world, has received $5.2 million of Advanced Energy Manufacturing Tax Credit to help them re-equip their West Union, South Carolina facility to produce an increased number of OpenWay CENTRON smart meters for smart grid projects around the nation.  The Recovery Act gave significant growth and allowed the company to expand 200 new jobs.  

At the moment ITRI is trading significantly lower than its 52 week high and has just came off the 52 week low.  Although recently the company reported revenue below analyst estimates, with new insider buying and raised revenue guidance for 2010 the stock looks really attractive. 

Monday, September 27, 2010

Investing the Recovery Act

President Obama signed the Recovery Act back in February 2009, the time when the stock market was at its lowest moment during the recession, to spark the recovery.  Since then many projects have been initiated through out the nation.  These projects covered the foundation for sustainable economic growth so infrastructure projects such as highway, railroad, waterway and broadband lines are the focus.  At the same time these projects tries to put America ahead by investing in industry of the future such as wind farm, solar plant, smart meter and electric-car battery.  In September of 2010 the report "100 Recovery ACT Projects that are Changing America" represents a fraction of these projects.  As investors these projects represent potential investment opportunities as each of these projects may benefit companies publicly traded.  In the following articles lets look at those projects and identified the companies that receive direct benefit.

Wednesday, September 22, 2010

Smart Stock - SVU and GAP

Supervalu (SVU) and The Great Atlantic & Pacific Tea Company (GAP) are both major grocery chain operators trading near multi-year low yet have both received insider interest recently.  At $11.17 per share, SVU is trading a a low P/E of 6.84 while GAP trading at $3.78 is still struggling to make net income since 2008.  Is it a good time to buy these stocks?  Which one is a better choice?  Let's take a detail look at the two.

The Great Atlantic & Pacific Tea Company is operating total of 429 stores throughout Northeastern United States with more than 50% of its stores in the tristate of New York, New Jersey and Pennsylvania.  Among its chains are full service supermarkets of Pathmark with 144 stores, A&P with 110, Waldbaum's with 64 and Super Fresh with 69stores.  Then there is the upscale gourmet stores of The Food Emporium with 23 stores.  In addition it also targets low-price market with Food Basics which has 9 stores in the tristate.

Supervalu is a far bigger grocery stores operator with the 10 chains throughout the nation including ACME (125 stores), Albertsons (463), Bristol Farms (16), CUB (78), Farm Fresh(44), Hornbacher's(6), Jewel-Osco(182), Lucky(5), Save-A-Lot(1179), Shaw's and Star (194), Shop'n Save(41) and Shoppers(62).  

As far as the store count Supervalu is the clear winner along with wider region coverage.  Revenue wise Supervalue earns $11 billion in the latest quarter while GAP earns $8 billion for the entire year and while GAP is still struggling to make a profit, Supervalu has turned profit for the year ending February, 2010 brining in $393 million.  In addition Supervalu is also able to provide a decent 3.5% dividend while GAP is still trying to sell stores to build up cash reserves.  

Supervalu is a safer investment with great upside potential as the stock is still trading at multi-year low.  GAP does has insider purchase recently but is a riskier investment.  However with GAP's 400 stores, it could be a take-over target.

Monday, September 13, 2010

An Old Industry In New Era

People Don't Like Going To The Movies Any More! This article written about five years ago in 2005 summarized the disastrous situation the 100+ year old movie industry was in.  No it was not the bad economy because the Financial Tsunami did not take place until 3 years later.  On the contrary it was at height of the real estate bubble and people are enjoying the excess cash generating from the rapid rising home equities.  And was people simply stopped watching movies?  Not likely with mega hits in that year including Star War III, Naria, Harry Potter, War of the Worlds and King Kong.  

So what happened?  The blame goes to digital revolution - the same thing that shoot down Blockbuster and the brick-and-mortar video rental industry.  Although some people still go to movie theater to enjoy the giant screen and surrounding sound experience, more and more people choose to wait a little bit for DVDs or digital downloads or streaming as they found no particular interest to go to the cinemas.

Fast forward 4 years after in 2009 and the entire stock markets were in the middle of the one of the greatest financial storm and the public listed cinema operators such as Carmike Cinemas (CKEC), Regal Entertainment Group (RGC), Cinemark Holdings (CNK) were trading at multi-year low of $1.3, $9.4 and $7.12 respectively.  The year saw the recovery of the stock market and also one of the most anticipated movies of all time - Avatar.  The James Cameron mega hit not only achieved huge success at the box office, the movie introduced new technology to the movie industry that would spark new interest for people to go to the movie theater - just as sound and color did in the early 20th century.  

Since then 3D becomes the main weapon for Hollywood to bring audience back to movie theater with subsequent 3D movies such as Shrek Forever After, Toy Stroy 3 and most recently Resident Evil: Afterlife 3D.  And how about the stock price of the movie theater operators?  As of today, CKEC is trading at $7.43, CNK at $15.91 and RGC at $12.29.  So you can count on these public traded cinema operator to keep bringing more upside.  Plus the recent insider buying of CKEC probably also prove the potential uptrend. 

Wednesday, September 1, 2010

Smart Stock Hidden Gem - ECTY

Ecotality Inc. is a stock off many investors radar.  Trading at $3.14 near 52 week low with average trading volume of 66,000, it is hardly going to be on the list of hot stock at any given day.  Take a look at what the company is doing and it may give you a second thought.

The San Francisco based company provides storage technologies for clean electric transportation.  More specifically the company is building a nationwide network of charging station for electric vehicles.  Therefore you can look at Ecotality as the gas station owner, operator and builder except the station is for electric vehicle.  

Currently the company is acting as the project manager overseeing the EV Project, a $230 million initiatives partly funded by Department of Energy to deploy 15,000 electric charging station in 16 cities across six U.S. states.  As U.S. government is putting electric vehicle industry as top priority, we should see strong government support. At the moment the company has pick the first charging station site and will set up 37 stations in October and November for the launch for Nissan Leaf and Chevy Volt in 2011.  And the following year additional 1500 stations will be installed.

The stock is still near 52 week low and with insiders buying in June and July this is probably a good time to buy before the company gets more attention nationally with the full deployment of the charging station.