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Friday, December 31, 2010

For-profit College Under Attack - Apollo Group Inc

The US based for-profit colleges have been under attack by both the investors and the government due to these colleges questionable student recruiting practices and low graduation rate.  The U.S. Government Accountability Office(GAO) reported on August 4, 2010 that the undercover testing at 15 for-profit colleges found that 4 of the colleges encouraged fraudulent practices and all 15 made deceptive or questionable statements.  The continues governemnt probes into the for-profit colleges scared away the investors and drove down share prices of the entire group.  However as the wise investors alway say when many are fleeing it is probably the best time to get in.  So this may probably be a good time to take a close look at these used-to-be high flying stocks.

The Univeristy of Phoenix owned by Apollo Group Inc. (Nasdaq:APOL) is probably the most famous for-profit colleges among all as it has enrollment of 420,700 undergraduate students and 78,000 graduate students, the second largest of United States.  Beside Universisty of Phonenix, Apollo Group also owns 3 other private colleges.  The private education provider earned annual revenue of close to $5 billion in 2010, almost doubled its annual revenue of $2.7 billion in 2007.  The net income is also pretty decent at $553 million 2010, slightly under the $598 million it earned in 2009 but highter thant the $408 million earned in 2007.
Shares of Apollo are currently trading at $38.79 with P/E ratio of 10.51 and market cap of 5.73 billion.  The price is a 56% discount compared to the $90 per share price tag earlier in 2009.  The stock price has been on a downtrend for the past two years and the long term trend still looks negative with 200 day moving average keeps heading downward.  However the recent recovery brought the stock back above 50 day moving average and could bring the stock back to positive trend as KD is now heading up.  So many this is finally the time for the investors to get back in.

Wednesday, December 29, 2010

Online Travel Investment - Orbitz Worldwide Inc

American Automobile Association(AAA) in December projects this year 92.3 million people will travel 50 miles or more during the Christmas and New Year holiday, a 3.1% increase compared to 2009.  And one of the industries benefits the most from the holiday travel is probably the online travel industries as more people are using websites such as (Nasdaq:EXPE) and (Nasdaq:PCLN) to book their airline tickets and hotels.

Another player in the online travel industry is Orbitz Worldwide Inc(NYSE:OWW) operating under the website  Compared to Expedia and Priceline, Orbitz is a smaller player with annual sale of $738 million last year, about 1/3 of any of the other two major travel sites.  The financial storm also hit the company as the revenue shrank 15% from 2008 to 2009 and net loss grew from $85 million in 2007 to $337 million in 2009.  Based on the revenue for the first 3 quarters the revenue this year could be slightly better than last year while the company could swing to net income this year, a very positive sign.  

Shares of Orbitz have gained 56% to $5.53 from the 52 weeks low of $3.56 in July.  However for the year the stock is still down 29%.  The technical chart shows negative sign as the stock is traded below both 50 day and 200 day moving average. KD lines also show weakness as both K line and D line are heading downward.  The current support is at $4.91 so expect the stock to keep going downward until it reached the near term support. 

Online Travel Investment -

December's AAA report projects 92.3 million people will travel 50 miles or more during the holiday, a 3.1% increase compared to 2009.  With more people using online travel site to book their travel itineraries, let's look at the public traded online travel companies such as (Nasdaq:EXPE) which was mentioned yesterday.

Another major player in the online travel industry is who is best know for its "name your own price" approach to book airline tickets and hotels.  The company's annual revenues have been growing very rapidly for the past few years from $1.1 billion in 2006 to $2.3 billion in 2009, a 100% plus gain in just three years.  As the revenue for the first three quarters of 2010 has already reached $2.3 billion, the annual revenue of 2009, this year would be another year of monsterous growth for  And the financial storm did not seem to affect the growth at all as the company still experienced a $400 million dollar increase in revenue for both 2008 and 2009.  The net income looks even more impressive with a 580% growth from 2006 to 2009.

The success to is not just the online travel boom and its super cheap price, my personal and my friend's experiences with the site in terms of services have also been  excellent.  My recent booking at a 3 star hotel in California was almost a nightmare as the hotel gave us a king bed although we told the hotel ahead of time that we had 3 guests.  Unfortunately the hotel was overbooked so we ended up getting a free roll-away bed.  Not a pleasant stay but nothing we could do.  However when I called the next day to complaint about the hotel, I ended up getting the free night stay.  That 3 star hotel didn't even offer a free night stay. So what this experience taught me was every time instead of book directly from hotel, go through only.

Shares of are currently traded at $402 per share with P/E are traded at $25.57 with P/E ratio of 43 and market cap of $19.77 billion.  Since reaching 52 weeks low of $173.32 per share in early July, shares have gained 132% so far.  Compared to the price in early 2006 of $21 per share then you have an extrordinary 1820% gain in 4 years.  The technical chart shows positive trend as the stock is traded above both 50 day and 200 day moving average. However since KD line is still at its low, do expect some pull back in the mean time.

Tuesday, December 28, 2010

Online Travel Investment - Expedia

Recent AAA (American Automobile Association) report projects a 3% increase of Christmas and New Year holiday travel for Californians this year compared to last year.  Even nation wide AAA is expecting 92.3 million people will travel 50 miles or more during the holiday, also a 3% increase compared to 2009.  And as more and more people are using online travel site to book their travel itineraries, it is probaby worth while to look at the public traded online travel companies (Nasdaq:EXPE) is a major player in the online travel industry with close to $3 billion of annual revenue for both 2008 and 2009, both of which were better than previous years.  With revenue for the first 3 quarters totalled $2.5 billion, 2010's number should easily surpass any of the ones of the previous years including 2008 and 2009.  And it is interesting to note that although the whole economy sufferred the financial storm during 2008, the revneue for actually rose more than 10% compared to 2007 which shows a fundamental shift in ways people buys airline tickets, book hotels or rent cars.  

Shares of Expedia are traded at $25.57 with P/E ration of 16.41 and market cap of $7.28 billion.  The interenet company also provides dividend with annual yield of 1.09%, a rare given since most online companies do not provide dividend.  The technical chart shows weakness as the stock is traded below 50 day moving average but long term signal is still positive as stock is still above 200 day moving average.  Do expect support around $24 as the stock touched the 200 day moving average.

Sunday, December 26, 2010

Investing US Agriculture - Mosaic Company

Rising demand in U.S. crops due to drought in Russia is helping agriculture related industry such as farm equipment maker.  Another industry that also benefits from booming demand in US agriculture is the fertilizer maker such as the US based Mosaic Company (NYSE:MOS).

Since reaching 52 weeks low of $37.68 in late June early July, shares of MOS have gained more than 70% in just six months to $71 per share, a pretty amazing ride for a company with market cap of $31.68 billion.  The technical chart shows bullish trend as both 50 day and 200 day moving average are going up and KD lines are going up as well.  Revenue also shows positive sign with continue quarter revenue increase while net income almost tripled compare to the same quarter of last year.  The increasing demand in US crop should continue to help the company to report strong quarterly result.

Thursday, December 23, 2010

Investing US Agriculture - AGCO Corporation

Rising demand in U.S. crops due to drought in Russia generated $70 billion in export for the first 8 months of 2010.  And one of the group that benefits a lot from this is the farm equipment maker.  So far we've looked at Deere and Company,and CNH Global,  today lets take a look at another one - AGCO Corporation (NYSE:AGCO).

Since reaching 52 weeks low of $25.48 in June, shares of AGCO have doubled in just six months to $50.79 recently. The technical chart shows bullish trend as both 50 day and 200 day moving average are going up and KD lines are going up as well.  Although revenue has not improved much this year net income has improved dramatically in the past two quarters.  With strong sales expected the stock should continue to go up.

Tuesday, December 21, 2010

Investing US Agriculture - CNH Global NV

Surging demand in U.S. agricultural products have brought life to the U.S. agriculture industry with close to $70 billion in export for the first 8 months of 2010.  As farm equipment maker is reaping the benefits from the growing farming activities it is worth while to look at the major farm equipment maker.  After a quick view on Deere and Company yesterday, lets take a look its rival, the Amsterdam based CNH Global NV(NYSE:CNH).

Shares of CNH have been doing really well this year, rising almost 100% from $25 in December 31 of 2009 to $47.59 today.  The technical chart indicates a strong bullish signal as both 50 day and 200 day moving average are heading up.  The company's financials also looks strong as revenue in every quarters this year are higher than last year while net income has been growing.

Investing US Agriculture - Deere and Company

While the U.S. economy is still recovering from the disaster caused by the financial industry, an industry is actually enjoying a surprising boom this year.  According to the BusinessWeek article in October, U.S. agricultural exports actually increased 14% to $69.8 billion in the first 8 months of 2010 compared to previous year.  The farmers have always been the ones that need the government subsidizing due to falling price amid competition from Russia and Ukraine.  The same competitors that caused the price drop before helped the price surge as both countries are suffering one of the worst droughts.  So the global demand of grains turned to the other side of the world - the fertile farmlands in Midwest and South U.S.

So with such surged in U.S. agricultural products who would be the one that benefit the most?  One of the industry to benefit is the farm equipment maker.  Deere & Company (NYSE:DE) is the largest farm equipment maker of the world.  With $20 billion in net sales of equipment, the company would be a winner in this global demand of US crops.  With market cap of $35 billion, shares of Deere & Company are trading at $84 per share with P/E ration of 19.3 and should continue to rise.  The technical chart points to more upside as both 50 day and 200 day moving average are going up.  The company also provide divided yield of 1.7%.  This is definitely a quality stock to invest into.

Monday, December 20, 2010

Picture Perfect - Adobe Systems

I am not a professional photographer so many times I end up with a picture that is completely out of focus, no matter how expensive the camera is.  However a researcher at Adobe Systems (Nasdaq:ADBE), an application software maker, has a secret weapon that can eliminate photographer's nightmare like mine.  Todor Georgiev, a senior research scientist at Adobe Systems, is working on a technology called plenoptic lens that could capture a picture in different exposures or depth of fields.  The lens plus a specialized software would be able to take a blurred picture back into focus.  Adobe Systems may license the technology to camera and lens manufacturers.

Shares of Adobe Systems have reach its low point of the year in October to $25.45 per share and have since gradually climbed back up to $29.39 per share today.  The application software company is due to report its fourth quarter earning after the market close today and based on the movement of the stock it seems the investors are expected a positive result of the earning.  The technical chart at the moment shows neither positive nor negative signal so the movement after the earning could determine the next direction that the stock could go.

Friday, December 17, 2010

From Wrinkle Smoother to Migraine Headache - Allergan Inc

Who would ever come up with the idea to use a wrinkle smoother to treat migraine headache?  You probably may by accident.  But to proof it to the FDA that it really works so that you can commercialize the idea?  Probably need plenty of cash and a million dollar R&D like the biotech giant Allergan Inc. (NYSE:AGN).  The biotech company received approval from FDA recently to sell Botox, a wrinkle smoother, as a migraine headache treatment.  And analyst predicts the approval could double Botox's annual sale to $2.3 billion as the result of the approval.  

Shares of AGN are traded at $70.84, near its 52 weeks high.  It's technical trend is still pointing up so the recent pull back to $66 actually provided a great buying opportunity.  The stock should continue to head back to the previous high of $74 per share. 

Thursday, December 16, 2010

Recovery Act Investment - General Electric Home Appliance

The Recovery Act has help many companies by providing tax credit, loan or even direct funding.  General Electric (NYSE:GE), a potential winner from the nation-wide high speed rail deployment, has already indirectly benefited from a Recovery Act renewable energy project.  In addition the company is also getting direct funding from yet another Recovery Act project.

Energy efficiency is one of the main goal in many of the Recovery Act projects.  Beside the clean energy projects such as solar power, wind power and smart grid, another way to achieve energy efficiency is within the household by using energy efficient home appliances such as washers and dryers.  Therefore by receiving $24.8 million of Recovery Act funds through Advanced Energy Manufacturing Tax Credit, General Electric is investing $600 million into its Louisville, Kentucky Appliance Park facility to expand manufacturing of energy efficient home appliances.  The facility has already create 135 new jobs and will eventually contribute 800 new jobs.  

Shares of General Electric continues to go up with technical trend  points to more upside with 20 day moving average has just crossed above 50 day moving average.  As a mega cap company of close to $190 billion in market cap, General Electric still provide a decent dividend yield of 3.2%.

Wednesday, December 15, 2010

Recovery Act Investment - ABB Ltd

The wind power deployment project in Dekalb County Missouri, a Recovery Act project, helps Wind Capital Group, a wind power provider, with $107 million tax credit and also indirectly helps  General Electric (NYSE:GE) as the company received order of 100 wind turbines.  

Another company that gets a share of the pie is the Switzerland based ABB Ltd (NYSE:ABB), an power transformers maker.  The company's Jefferson City, Missouri branch received order of transformers for the same wind power project along with General Electric's wind turbine.  

Shares of ABB have been trading in a tight range for the past 52 weeks between $16 to $23 per share.  Currently trading at $21.52 per share, ABB has market cap of $49 billion with P/E of 20.43.  Both revenue and net income have been rising gradually for the past three quarters and with a 2.25% dividend yield this is a safe investment to hold.

Tuesday, December 14, 2010

Recovery Act Investment - General Electric

The Recovery Act signed earlier this year intended to boost the economy and help many companies, from micro cap company like Beacon Power introduced yesterday to mega cap company like the Dow component General Electric (NYSE:GE).  General Electric is already a potential winner from the nation-wide high speed rail deployment and on top of that it is also benefiting from The Recovery Act project.

One of The Recovery Act project that helps General Electric is the Dekalb County, Missouri's wind power deployment.  The 150 megawatt Los Creek Wind Farm, developed by St Louis based Wind Capital Group, received a $107 million tax credit for renewable energy generation.  Although General Electric did not receive the fund directly it does so indirectly as it supplied one hundred megawatt wind turbines for the project.

Shares of General Electric is currently on an uptrend and as the 20 day moving average is about to cross above 50 day moving average the stock should continue the uptrend.  The stock is currently trading at $17.68, only $2 away from its 52 week high.

Monday, December 13, 2010

Recovery Act Investment - Beacon Power

The Recovery Act signed earlier this year intended to boost the economy and help many companies, large or small.  One very small company in terms of market cap is Tyngsboro, MA based Beacon Power (Nasdaq:BCON), an electrical grid technology provider.

The company received $43 million of guaranteed loan from The Department of Energy for the 20 megawatt flywheel energy storage plant in Stephentown, New York.  The plant will help to improve the reliability of New York State's electric grid and will reduce carbon dioxide emissions up to 82% over its 20 year life compared to coal, gas or hydro plant.  The project will create about 40 permanent jobs and 20 temporary construction jobs.

Shares of Becon Power has been struggling for more than a year and is still on the decline.  The stock is currently trading at 23.7 cents per share with market cap of only 48 million.  The company's revenue is on the decline as the net loss continue to climb.  The Nasdaq listing extension recently relieved worry investor as stock traded at this price normally could face de-listing.  The company has until March 14, 2011 to get its stock price traded above $1 so either a reverse split will happen or some great news would lift the stock price up more than 300% of its current trading price.

Friday, December 10, 2010

Massey Energy On Sale

Massey Energy (NYSE:MEE) is the nations top six coal producer based in Richmond, Virgina.  It was also known by most people as the owner of the famous West Virginia Upper Big Branch coal mine that exploded in April 2009 and killed 29 miners.  In late October this year the company got to the spotlight again as The Wall Street Journal revealed the coal mine operator is thinking of putting itself on sale.  The Upper Big Branch incident  cost the company quite a bit with legal cost and repair.  Even inspector visit forced Massey Energy to conduct safety training as the visit came up with violations.

Since October shares of Massey Energy have gained more than 60% and is currently trading at $51 per share.  Despite increase in revenue for three consecutive quarters, the company turned into net loss in 2Q and is still losing money in the latest 3Q report.  The technical chart still points to the upside with 50 day moving average on top of 200 day moving average on recent stock rally.  Although the company has yet to be sold analyst are expecting the retirement of CEO would increase the chance for the sale of the company.

Thursday, December 9, 2010

Greek Yogurt Investment - Groupe Danone SA

Major Greek yogurt brands such as Fage and Chobani have been doing well with 57% and 246% increase in sales respectively.  Unfortunately to the investors none of these really matter as both of these brand are owned by private companies.  Another high flying one is Stonyfield Farm made Oikos Yogurt with 88% sales gain in a year.  Stonyfield is also not publicly traded unfortunately.  However digging further you'll find that actually 85% of the company is owned by Groupe Danone(DANOY), the France based multinational food company who owns the famous Dannon yogurt brand and Evian bottle water.  Although the company is not traded on NYSE, Nasdaq, nor AMEX, it is listed as a OTC Pink Sheet under the symbol DANOY.  So for those who has access to buy securities from OTC, here is a company who has actually made money from the growing Greek yogurt market.

Wednesday, December 8, 2010

Greek Yogurt Investment - General Mills Inc

Greek yogurt is a growing market with leader Chobani Greek Yogurt getting 246% increase in sales in a year.  Therefore major food giants have turned their attention to this new growing market.  Yesterday we talked about food giant Kraft Foods which enters into the Greek Yogurt market in September by selling Athenos brand Greek yogurt at Wal-Mart.  Today lets talk about another food giant General Mills(NYSE:GIS) who is known by yogurt lovers as Yoplait.   

General Mills's Yoplait is the leading yogurt brand with roughly 40% of the market share.  However its orginal yogurt saw 2% decline last year while rival Greek yogurt saw rapid sales increase from 57% to 246% according to Bloomburg BusinessWeek.  Therefore in March General Mills introduced Yoplait Greek yogurt to try to maintain its lead in the yogurt industry.

Shares of General Mills (NYSE:GIS) have not been doing well since end of October and have lost 10% so far.  With market cap of $22.6 billion and dividend payment of 3.17% the stock is more of a defensive investment.  The $3.5 billion in revenue plus $472 million in net income per quarter makes GIS a type of buy-and-hold worry free investment.  Now that General Mill is in the Greek Yogurt market, maybe this could spark some interst in the stock.

Monday, December 6, 2010

Greek Yogurt Investment - Kraft Foods Inc

Yogurt lovers, notice any change to the flavors?  Next time when you are at the dairy aisle pay attention to the new comers to the shelves called the Greek yogurt.   Greek yogurt has a thicker taste because it is made by squeezing out water and whey from traditional yogurt.  This type of yogurt has high protein and low fat and has won many health-aware customers.  According to Bloomberg BusinessWeek, Greek yogurt market leader Chobani has seen its U.S. sales up 246% to $196 million while at the same time U.S. sales of Yoplait original yogurt dropped by 2%.  Therefore major food giants have turned their attention to this new growing market.  

One of the food giant entering into the Greek Yogurt market is Kraft Foods Inc. (NYSE:KFT) who initially abandoned yogurt industry completely back in 2004 but in September, 2010 began to sell its new Athenos brand Greek yogurt at Wal-Mart  Stores and is planning to sell at other major grocery chains by early 2011.  Although the Northfield, IL based food giant already owns many popular brand from Trident gum, Oreo biscuit, Kraft salad, Maxewell House coffee.. and so on, investing in Greek yogurt will ensure the company does not miss a high growing market.  

Currently trading at $30.29 per share, Kraft Food has market cap of $52.91 billion with P/E ratio of 19.05.  It provide dividend yield of 3.83% and is still on the uptrend for the long term as the stock is still trading above 200 day moving average.  The sales of Greek yogurt will probably not contribute too much to its overall earning but may create some hype to its slow moving stock.

Sunday, December 5, 2010

High Speed Rail Investment - Wabtec

The massive high speed rail projects are worth $8 billion and have attracted companies with high speed rail technologies world-wide.  The third high speed rail related company is Wabtec(NYSE:WAB), the  Pennsylvania based manufacturer of a broad range of products for locomotives, freight cars and passenger transit vehicles.  

Wabtec owns 50% market for braking-related equipment in North America and makes freight cars as well as train-control electronics.  In addition the company is converting ordinary rail cars to become high-speed ready.  With the company's leadership in rail-car brake, it probably won't benefit too much from the construction of the high speed rail but should see more businesses coming when the high speed rails began operation.

Traded at $51.17 the Wabtec is worth market cap of $2.45 billion.  After falling to 5 year low of $24 per share in 2009, shares of Wabtec have doubled and is currently at 52 weeks high.  The technical chart points to more upside with 50 day moving average above 200 day moving average.  Cash flow also shows positive sign as the Wabtec has been buying its own shares in the latest quarter.

Thursday, December 2, 2010

High Speed Rail Investment - General Electric Company

The massive high speed rail projects are introducing gigantic pool of money worth $8 billion and companies with high speed rail technologies world-wide are trying to grab part of the pie.  Yesterday we've talked about Siemens AG as the leader in making high speed train.  And today let's take a look at the second high speed rail related companies - General Electric Company(NYSE:GE).

As a $177 billion giant conglomerate, General Electric is also trying to grab a share of the $8 billion high speed rail funding by teaming up with CSR Corp., a Chinese train maker, to bid the Obama Administrations high speed rail projects.  Winning the bid will help General Electric to step into the lucrative high speed rail business.

Being a component of the Dow 30 indices with market cap of $177 billion, General Electric stock has not changed much for the past 52 weeks and is traded around the $13.75 to $19.7 range.  Shares are attractive with P/E of 15.58 and respectable dividend of 2.88%.  The technical chart shows bullish sign with stock trading above both 20 and 50 day moving average and KD line rising up.   

High Speed Rail Investment - Siemens AG

Since the introduction of The Interstate Highway System 50 years ago championed by President Dwight Eisenhower who gained an appreciation of the German Autobann network, there has yet been a project with such scale and vision.  However the year 2010 could mark the history book again with yet another project with similar size - the high speed rail project.  Similar to the German Autobann, the high speed rail technology is used widely outside of US in places such as Europe and Japan.  However it is the recent nation-wide deployment of high speed rail system in China that has finally got the government seriously thinking of implementing such technology within continental US to avoid been falling behind at the high speed rail race.  Finally in January of 2010, President Barack Obama announced 13 high-speed projects worth $8 billion that span across 22 states including California, Washington, Oregon of the West Coast, Florida, Maine to New York to North Carolina of the East Coast, Texas in the South and 8 states in the Midwest including Illinois and Michigan.  

So with such hype and potential, it would be worth looking at the high speed rail related stocks.  Unfortunately as mentioned above, high speed rail technology wasn't popular here so the first company related is actually a German engineering company called Siemens AG(NYSE:SI).  The Munich, Germany based Siemens AG, is the largest manufacturer of high-speed trains in the world.  Countries that run the Siemens made high speed train include Spain with 26 trains, Russia with 8 trains and 54 more to come, Germany with 15 trains and China with 60 trains and 100 more on order.  The company is aggressively pushing its Valero high-speed train technology to be adopted across the U.S. rail network.

The stock itself is a huge one with $103.51 billion in market cap.  Despite the size it still provides a generous 3.12% dividend and is currently trading at P/E of 20.33.  The technical chart seems to be pointing to more upside with stock trading above 50 day moving average.