tag:blogger.com,1999:blog-26597429090470434332024-03-05T14:45:26.856-05:00Passion for Stocks and Lifefocus on cyclicals.focus on 1 to 6 months.cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.comBlogger138125tag:blogger.com,1999:blog-2659742909047043433.post-80205990405143631382012-02-06T22:02:00.000-05:002012-02-06T22:02:55.224-05:00A turning point of US coal stocks and dry bulk shipping?Due to the glut of natural gas and environmentalist pressure, the domestic demand for coal has been depressed. US coal producers are looking abroad.<br />
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From <a href="http://www.marketwatch.com/story/momentum-gets-behind-greater-coal-exports-to-asia-2012-02-06">Marketwatch</a><br />
<blockquote class="tr_bq">"The U.S. Energy Information Administration estimates 2011 exports surpassed 100 million short tons for the first time since 1992, and some market watchers expect exports to top that this year. ....................................<br />
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Higher sales prices in Asia and Europe have made sending coal to those markets more attractive, while U.S. emissions regulations and competition from cheap natural gas limit domestic demand. <br />
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Fast-growing China and India have been sucking up shipments to fuel an expansion of coal-fired power plants, disrupting traditional supply channels. South Africa -- a traditional exporter to Europe -- has been sending more shipments to Asia, creating a hole in the market that the U.S. has helped fill. "</blockquote>The US coal exports could eventually hit a ceiling, as transportation costs will make U.S.-produced coal less competitively priced than coal produced closer to major Asian customers. However, shipping rates that are hovering around historic lows can help US coal exports. Meanwhile, dry bulk shipping that has been abysmal amidst a gigantic glut of ships may get a lift from increased coal transportation across the ocean. <br />
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Watch lists:<br />
Coal- ACI, ANR, BTU, CNX, PCX<br />
Dry Bulk Shipping- DRYS, DSX, EGLE, EXM, SB, NM<br />
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Disclaimer: <em>I have no position of the above mentioned stocks in my personal account as of 2/6/2012. However, I may have distributed the information to friends, family and affiliates prior to the post. My friends, family and business affiliates may have positions in stocks I mention. </em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com30tag:blogger.com,1999:blog-2659742909047043433.post-90289619819508410482012-02-04T18:53:00.000-05:002012-02-04T18:53:59.440-05:00How Much is SINA Worth?It is an understatement to say that the future of <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a> lies with Weibo. <br />
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<a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a>, one of the largest media portals in China, is transforming itself into a Twitter-Facebook hybrid. Starting out as a Chinese version of Twitter, Weibo is on its way to becoming the Chinese version of Facebook. Sina Weibo has taken China by storm, gaining 250 million registered users in 2 years and showing no sign of slowdown. This is compared to 485 million internet users in China and 800 million users of Facebook. <br />
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With all the buzz, shares of <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a>, however, are not considered bargains by traditional valuation standards. <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a>, on February 2, 2012, was valued at $4.86 billion in the US stock market, with a forward PE ratio over 60. Has its shares price gone ahead of itself or this is just the beginning of a super growth stock? <br />
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In other words, how much is Weibo worth and how much has been priced in? I am not here to throw a single number out but instead I would like to find out, by a reasonable stretch of imagination, whether there is any room to the upside from its current market valuation.<br />
<strong><span style="font-size: large;">Valuation 1: Taking away Sina's value as a media portal , how much is it worth?</span></strong><br />
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As of February 1, 2012, the market capitalizaion of <a href="http://finance.yahoo.com/q?s=sohu&ql=1">SOHU</a> was $2.28 billion versus SINA at $4.86 billion. The estimated revenue of for <a href="http://finance.yahoo.com/q?s=sohu&ql=1">SOHU</a> in 2011 was $850.33 million versus $464.99 million. That leaves a Price-Sale ratio of 2.68 for SOHU. With the same multiple, <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a> should have a market cap of $1.25 billion. That means SINA weibo reaps a market cap of $3.61 billion. Can it be worth that much? Since SINA weibo currently has no revenue, I will use a social media benchmark for a reasonable multiple. <br />
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<strong><span style="font-size: large;">Valuation 2: Comparisons with American peers, Facebook and Twitter</span></strong><br />
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Both Facebook and Twitter are not yet publicly traded, thus rendering their valuations a guessing game. A <a href="http://www.guardian.co.uk/technology/2011/aug/02/twitter-valued-8bn-large-investment">recent private investment</a> indicated Twitter valued between $8 and 10 billion while recent trading on SharesPost showed a value between $6.8 and 7.7 billion. Facebook, is valued between $70-$100 billion depending on the sources. Given an estimate of 2011 revenue of $140 milllion for Twitter and $4 billion for Facebook, the price-to-sales multiple of Twitter is much higher than Facebook. Leaning to the conservative side, I use only Facebook as the benchmark. Considering the prejudice against Chinese concepts just very recently, 50% discount of Facebook's multiple for is assumed forWeibo. <br />
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As you can see from Figure 1 (click on the image to a larger view), assuming <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a> without revenue from businesses other than Weibo and ignoring discounting, Weibo will have to reap a revenue of $600 million,$500 million, $400 million for a multiple of 7.5, 10 and 12.5 respectively to justfify any upside in market capitalization. Are these possible? Let's look into Weibo's monetization. <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMmXnrfoEsH4D9VSMxzsPFH79sOTZtfwPa2ndqbTjNjWq7ggyyEdXVGOYg-Cz8hSom3NgzCXbBp8mVNzBPcUFvcaXvkFdOduymQTLwDaePlkn0iEeqtq4ppXs_diMLdDq4FogSDmJSyK8/s1600/facebook+and+sina.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="292" sda="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMmXnrfoEsH4D9VSMxzsPFH79sOTZtfwPa2ndqbTjNjWq7ggyyEdXVGOYg-Cz8hSom3NgzCXbBp8mVNzBPcUFvcaXvkFdOduymQTLwDaePlkn0iEeqtq4ppXs_diMLdDq4FogSDmJSyK8/s320/facebook+and+sina.jpg" width="320" /></a></div><br />
<strong>What could be the revenue? </strong><br />
The biggest bang of Weibo monetization will come from its experimental business platform similar to Facebook page that caters to businesses' connecting directly with users and a spread of words among users. According to SIG analyst, Chunming Zhao's calculation, annual revenue of Weibo when the business platform is executed will be as much as $1 billion. This calculation assumes Weibo gets 150,000 business users (half of what Baidu currently has) and 40,000 RMB per customer (Baidu's average revenue per user (ARPU)). This is used as the upper limit of revenues in the second valuation. <br />
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<strong>Conclusion</strong><br />
From the above exercise, it is not totally unreasonable for <a href="http://finance.yahoo.com/q?s=sina&ql=1">SINA</a> to have more upside, and possibly a big one if its plan to monetize Weibo follows the path of Baidu, Twitter or Facebook. Of course, skeptics could say it is a big “if"<br />
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<em>Disclaimer: I have no position of SINA in my personal account as of 2/4/2012. However, I may have distributed the information to friends, family and affiliates prior to the post. My friends, family and business affiliates may have positions in stocks I mention. </em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com1tag:blogger.com,1999:blog-2659742909047043433.post-50679220279736900572012-02-03T15:14:00.003-05:002012-02-06T18:48:27.070-05:003 cases for DANGCoined as "Amazon of China", the Chinese B2C company, Dangdang (<a href="http://finance.yahoo.com/q?s=DANG">DANG</a>) that was barely $5 at the start of the year, soared by 70% to as high as $8.50 before it retreated to $7+ toward the end of January. There were many non-<a href="http://finance.yahoo.com/q?s=DANG">DANG</a> factors that contributed to a great run, namely, the revival of Chinese-concept stocks that were beaten up in most of 2011, the return of chasing "growth" as governments print money and European debt crisis was tentatively brushed aside, and last but not least, the euphoria surrounding the historic IPO of social media giant, Facebook. All these buzzes aside, <a href="http://finance.yahoo.com/q?s=DANG">DANG</a> has some merits to itself. These may not merit a 70% run in less than a month but they may merit a much higher valuation in 12 months than what it is now.<br />
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<strong><span style="font-size: large;">1. Significant Upside of the Ecommerce market in China</span></strong><br />
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The growth of the ecommerce market is of lightning speed. The ecommerce market in China is expected to reach 2 trillion RMB ($310 billion ) by 2015. A rising tide lifts all boats. Currently DANG’s market share is somewhere between 4-9% (depending on the source of data). Take the worst case scenario that Dang does not grow the market share at all from now on . The market share even goes down some to 3%, it gives a sale of $9 billion, about 18 times more than DANG’s revenue in 2011. <br />
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DANG stands to benefit and grow together with such a big wave in China’s ecommerce even if it performs somewhere between mediocrity and average.<br />
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<strong><span style="font-size: large;">2. The Peer Effect-Jingdong's IPO</span></strong><br />
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One of the largest B2C player in China, Jingdong (360buy.com) IPO is expected to be above $ 5 billion. Jingdong's market share of ecommerce is somewhere between 18 to 32% depending on the classification and source. Its recent private equity deals indicated that the company was valued at $10 billion. DANG’s current market cap is $579 million. If it doubles, it will still be far below Jingdong. <br />
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There are two possible effects on DANG after Jingdong’s IPO: 1. Jingdong’s high profile IPO, if successful, is likely to remind investors of the great potential of China’s ecommerce market again 2. Jingdong’s IPO is likely to take investors away from DANG as Jingdong’s market share in Ecommerce far exceeds that of DANG. With only a few Chinese B2C ADR listed in the US exchange and the current low stock price of DANG, I am leaning toward the first possibility.<br />
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<strong><span style="font-size: large;">3. Product Diversity and Logistic Improvement</span></strong><br />
One of the biggest obstacles facing Chinese E-commerce is the lacking in logistic and distribution system. E-commerce players find it hard pressed to guaratee quality and consistency in delivery. Customers are often frustrated with the quality and consistency of such service. B2B giant, Alibaba, the parent company of Taobao and B2C leader, Jingdong are both devoted to massive amount of capital in the improvement of logistic system.<br />
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DANG is focused on expanding product diversity and improving logistic system, e-book, baby, beauty, home décor,etc. With its dominance in book market, it can leverage its knowledge of reading pattern of its customer base and direct customers to products that may be of their interests. Of no lesser importance is a large amount of cash at hand . DANG has $246 million to put into the above implementation.<br />
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<strong>Caveat</strong><br />
The recent rally of Chinese concepts, especially internet related stocks, has put DANG at risk of an immediate pull back (which may have already taken place to a large extent) but it is definitely a stock worth a place in your watch list in 2012.<br />
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<em>Disclaimer: I am long DANG in my personal account as of 2/2/2012. However, I may have distributed the information to friends, family and affiliates prior to the post. My friends, family and business affiliates may have positions in stocks I mention. </em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com1tag:blogger.com,1999:blog-2659742909047043433.post-61308301120790097132012-02-02T14:25:00.001-05:002012-02-02T14:34:27.730-05:00Short squeeze on GMCR's earningsAs I am writing, the shares price of Green Mountain Coffee (<a href="http://finance.yahoo.com/q?s=gmcr&ql=1">GMCR</a>) soared by over 22% to $65.81 following its earnings release yesterday. <br />
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The once enamored star had been brutally attacked, not the least, by a high profile <a href="http://www.cnbc.com/id/44957716/David_Einhorn_s_Case_Against_Green_Mountain">bashing of the renowned hedge fund manager, David Einhorn</a> in October, sending the shares plummet from over $100 to as low as $37.<br />
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Yesterday, the company's announcement of a 102% rise in sales and a stunning 526% increase in operating income seemed to have garnered some confidence. The call did sooth the nerves of investors who were worried about the growth potential of the Keurig system and K-cup pack sales. <br />
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The Keurig system and K-cup did not seem the least bit losing momentum. "Our brewer sales in the first quarter of fiscal year 2012 were above our expectations, with approximately 4.2 million brewers sold by the combination of <a href="http://finance.yahoo.com/q?s=gmcr&ql=1">GMCR</a> and our licensed partners. That total is more than half of the 6.5 million brewers sold in all of our fiscal year 2011," said Blanford, the CEO of <a href="http://finance.yahoo.com/q?s=gmcr&ql=1">GMCR</a>. Taking away the effect of the acquisition of Van Houtte that contributed 13% increase in K-Cup pack sales, the company managed to raise the price point of K-cup by as much as 21% (talk about pricing power) and brought in a whopping 81% rise in sales volume. <br />
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The inventory was cited by critics as an issue. According to the management, it was a deliberate effort to meet the increase in demand. In the quarter ended December 31, 2011, inventories were $606.7 million compared to $269.1 million at December 25, 2010. However, more than half of the increase was due to a 266% increase in raw materials, most notably from an increase in green coffee volume and a 44% average green coffee cost increase. Combined with the growth in sales, a $162.4 million increase in finished goods inventory was hardly a sign of slowing sales. <br />
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With a current market in the mode to chase "growth", <a href="http://finance.yahoo.com/q?s=gmcr&ql=1">GMCR</a>, with "growth" written all over its head, is back to the game. This is not all without caveats though. The management guided a 60-65% growth in net sales for the fiscal year of 2012. Given a 102% growth in the first quarter, investors who was looking for super growth above the company's past 3 years (75% compound annual growth rate) could very well be disappointed.<br />
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<em>Disclosure: I do not have any position of </em><a href="http://finance.yahoo.com/q?s=gmcr&ql=1"><em>GMCR</em></a><em> in our personal account.</em><br />
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<iframe frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?lt1=_blank&bc1=000000&IS2=1&bg1=FFFFFF&fc1=000000&lc1=0000FF&t=cokandkinkon-20&o=1&p=8&l=as4&m=amazon&f=ifr&ref=ss_til&asins=B00390T5JA" style="height: 240px; width: 120px;"></iframe><br />
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<span style="color: #231f20; font-family: Helvetica;"></span>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com12tag:blogger.com,1999:blog-2659742909047043433.post-65111417953414589322012-02-01T13:39:00.001-05:002012-02-01T13:41:34.825-05:00It's time for a uranium rebound?<a href="http://finance.yahoo.com/news/Shares-Uranerz-Energy-Ur-iw-602013036.html?x=0">Source</a>: Press Release from Paragon Financial Limited – Wed, Jan 25, 2012 8:20 AM EST<br />
<blockquote class="tr_bq">"<em>The Global X Uranium ETF, which holds over 20 uranium stocks, has surged more than 25 percent over the last month as positive guidance from some of the industry's largest players has renewed investor optimism in the sector. In addition, recent remarks from Chinese Prime Minister, Wen Jaibao have highlighted the country's intentions to focus on nuclear energy and limit its use of coal...................... </em></blockquote><blockquote class="tr_bq"><em>China's primary economic planning agency, The National Development and Reform Commission, estimates that China can expand its current nuclear capacity of 10.8 gigawatts to between 70 and 80 gigawatts by 2020. According to the U.S. Energy Information's International Energy Outlook for 2011, China intends to add 106 GW of nuclear capacity by 2035. China plans to have 40 reactors by 2020 and, by 2030, enough additional reactors to generate more power than all 104 reactors in the US. In early 2011, following the tragic meltdown of the Fukushima Energy Plant, the Chinese State Council temporarily halted the construction of 27 nuclear power plants declaring the need for new safety regulations. During the delay, China re-assessed the safety of its planned and approved Generation-II reactor projects. "</em></blockquote>My watch list: URS, URZ, URRE, USU, CCJ, DNN<br />
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My notes: I am not a chartist but these stocks' charts look stretched in the very short term. The risk/reward of entering the play now is not favorable. However, this is a policy change that is important enough to lift a relatively small sector, thus worth noting and finding opportunities for building some small positions. <br />
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<em><span style="font-size: x-small;">Disclosure: I do not have any position of the above stocks in my personal account</span></em>.cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com15tag:blogger.com,1999:blog-2659742909047043433.post-69709312087114409762011-08-03T22:08:00.000-04:002011-08-03T22:08:41.334-04:00Stocks and the Economy: Economic Slowdown?<a href="http://macroinvesting-coke.blogspot.com/2011/08/economic-slowdown.html?spref=bl">Stocks and the Economy: Economic Slowdown?</a>: "July manufacturing and non-manufacturing survey released by the Institute of Supply Management (ISM) pointed to a worrisome outlook of the ..."cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-13289563750036024612011-08-02T21:36:00.001-04:002011-08-02T21:40:58.571-04:00Which stocks get hit by the budget cut? Part IIAs the debt deal came to a close, most started to worry about ramifications of budget cuts on the economy. Most of the cuts will not take place until 2014. discretionary spending, which excludes Social Security, Medicare and Medicaid, would be cut $21 billion in 2012 and $42 billion in 2013, according to an analysis by the Congressional Budget Office. The spending cuts wouldthen increase to $75 billion in 2015 and $156 billion in 2021. Overall, the first phase of cuts would reduce spending by $917 billion over 10 years. A congressional committee would decide on a second phase of cuts totaling $1.5 trillion. One condition that popped out involved defense spending. If lawmakers fail to reach a deal on a second round of cuts, the Pentagon's budget would be cut automatically by about $500 billion. <br />
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Defense-related stock prices such as General Dynamics (GD), Lockheed Martin (LMT), etc, had been shedding since July, anticipating such budget cuts. <br />
<a href="http://finviz.com/chart.ashx?t=GD&ty=c&p=d&s=m"><img alt="GD" src="http://finviz.com/chart.ashx?t=GD&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=BA&ty=c&p=d&s=m"><img alt="BA" src="http://finviz.com/chart.ashx?t=BA&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=LMT&ty=c&p=d&s=m"><img alt="LMT" src="http://finviz.com/chart.ashx?t=LMT&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=NOC&ty=c&p=d&s=m"><img alt="NOC" src="http://finviz.com/chart.ashx?t=NOC&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=OSK&ty=c&p=d&s=m"><img alt="OSK" src="http://finviz.com/chart.ashx?t=OSK&ty=c&p=d&s=m" /></a><br />
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<em>Disclaimer: This blog is for general information purpose only. Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author may have released this information prior to this post to affiliates or parties that have financial interests in trading on this information. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog. </em><br />
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<em>Disclosure: The blog author does not own any of the above positions in her personal account as of August 2, 2011</em><em><br />
</em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-92173461293311335352011-08-02T20:21:00.001-04:002011-08-02T20:33:35.667-04:00Which stocks get hit by the budget cut? Part IWhile budget cuts are inevitable following the debt ceiling deal, the Centers for Medicare and Medicaid Services surprised the market on Friday that it planned to reduce payments to skilled-nursing facilities by 11.1% for fiscal 2012, cutting $3.87 billion out of the spending plan. The 11% was much larger than the 5-6% that was anticipated. CMS said in a note Friday that the rates “correct for an unintended spike in payment levels and better align Medicare payments with costs.” <br />
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The news hit nursing and healthcare facilities. Catching the eyeball was Sun Healthcare Group (<a href="http://finance.yahoo.com/q?s=sunh&ql=1">SUNH</a>) which dropped more than 50% in a day. Others hard hit by the news included Skilled Healthcare Group Inc.(<a href="http://finance.yahoo.com/q?s=SKH&ql=1">SKH</a>), Kindred Healthcare Inc. (<a href="http://finance.yahoo.com/q?s=KND&ql=1">KND</a>), Ensign Group Inc.(<a href="http://finance.yahoo.com/q?s=ENSG&ql=1">ENSG</a>)<span class="quotePeekContainer"><span class="quotepeekbase bgQuote down" id="quote1657054865" jquery15202943741609279381="53"> </span></span>, National Healthcare Corp. (<a href="http://finance.yahoo.com/q?s=NHC&ql=1">NHC</a>)<span class="quotePeekContainer"><span class="quotepeekbase bgQuote down" id="quote480962697" jquery15202943741609279381="54"> </span></span>, Five Star Quality Care Inc. <a href="http://finance.yahoo.com/q?s=FVE&ql=1">(FVE</a>). Real Estates Investment Trusts (REITs) that cater to nursing and healthcare facilities did not escape the slump. Omega Healthcare Investors (<a href="http://finance.yahoo.com/q?s=OHI&ql=1">OHI</a>)<span class="quotePeekContainer"><span class="quotepeekbase bgQuote down" id="quote480962788" jquery15202943741609279381="56"> ,</span></span> Health Care REIT Inc. (<span class="quotePeekContainer"><span class="quotepeekbase bgQuote up" id="quote1891690111" jquery15202943741609279381="57"><span class="symbol"><a href="http://finance.yahoo.com/q?s=HCN&ql=1">HCN</a>)</span></span></span> , HCP Inc. (<a href="http://finance.yahoo.com/q?s=HCP&ql=1">HCP</a>) all lost more than 6% on Monday.<br />
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General care hospitals soon joined the slump as the market anticipated further Medicare/Medicaid cut would involve this group that included HCA Holdings Inc.<span class="quotePeekContainer"><span class="quotepeekbase bgQuote down" id="quote1891690102" jquery15202943741609279381="59"> (<span class="symbol"><a href="http://finance.yahoo.com/q?s=HCA&ql=1">HCA</a>), </span></span></span>Community Health Systems Inc.(<span class="quotePeekContainer"><span class="quotepeekbase bgQuote up" id="quote1797581990" jquery15202943741609279381="60"><span class="symbol"><a href="http://finance.yahoo.com/q?s=CYH&ql=1">CYH</a>)</span></span></span> and Universal Health Services Inc. (<a href="http://finance.yahoo.com/q?s=UHS&ql=1">UHS</a>).<br />
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<a href="http://finviz.com/chart.ashx?t=SUNH&ty=c&p=d&s=m"><img alt="SUNH" src="http://finviz.com/chart.ashx?t=SUNH&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=KND&ty=c&p=d&s=m"><img alt="KND" src="http://finviz.com/chart.ashx?t=KND&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=SKH&ty=c&p=d&s=m"><img alt="SKH" src="http://finviz.com/chart.ashx?t=SKH&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=ENSG&ty=c&p=d&s=m"><img alt="ENSG" src="http://finviz.com/chart.ashx?t=ENSG&ty=c&p=d&s=m" /></a><a href="http://finviz.com/chart.ashx?t=NHC&ty=c&p=d&s=m"><img alt="NHC" src="http://finviz.com/chart.ashx?t=NHC&ty=c&p=d&s=m" /></a><br />
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<i>Disclaimer: This blog is for general information purpose only. Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author may have released this information prior to this post to affiliates or parties that have financial interests in trading on this information. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog. <br />
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Disclosure: The blog author does not own any of the above positions in her personal account as of August 2, 2011</i>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-23544416776841919792011-07-14T21:59:00.000-04:002011-07-14T21:59:12.644-04:00可乐股吧 Coke and King Kong: 天然气汽车-初步涉猎<a href="http://cokeandkingkong.blogspot.com/2011/07/blog-post_14.html#links">可乐股吧 Coke and King Kong: 天然气汽车-初步涉猎</a><br /><br />Coke wrote on stocks related to natural gas engines/vehiclescokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-86340868482827963422011-07-14T11:46:00.000-04:002011-07-14T11:46:07.300-04:00Citigroup Bullish on PotashI ran into a useful excerpt from the <a href="http://finance.yahoo.com/news/Why-Citi-Is-Bullish-On-siliconalley-1992003795.html?x=0&.v=2">Business Insider</a> that I would like to share with you:<br />
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With potash prices riding high, and fertilizer fundamentals growing strong, Potash Corp (POT), is expected to have a strong second half this year.<br />
Citi analyst P.J. Juvekar explains why:<br />
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•Fall is expected to be a strong season for fertilizers after Spring application came in 10% lower that expected because of a slow start to planting. With grain prices riding high, farmers are expected to usmore fertilizers to maximize yields.<br />
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•Supply of Chinese diammonium phosphates (DAP) and urea exports may be restricted because of the nation's sliding scale tariff policy. Urea exports are projected to decline to 5 million metric tons, from previous 7mmt, while DAP exports are expected to fall to 2mmt from 4mmt last year.<br />
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•The DAP market is also expected to be tight because of a ruling that has barred phosphate mining company Mosaic from mining in South Fort Meade. The Mosaic Company (MOS) may also have to buy large quantities of phosphate rock which is likely to constrain the market making room for Potash Corp (POT).<br />
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•Rising spot prices and the floor price for potash set by the China contract bode are expected to maintain price momentum. India imports all of its potash but even with a lack of contract settlement there, high global demand has kept the market tight. Potash Corp is looking for $590/st price for shipments later this year and expectations are that a portion new prices will be accepted by Q4.<br />
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<em><span style="font-family: Times, "Times New Roman", serif;">Disclaimer: This blog is for general information purpose only. Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author may have released this information prior to this post to affiliates or parties that have financial interests in trading on this information. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog. </span></em><br />
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<em><span style="font-family: Times, "Times New Roman", serif;">Disclosure: The blog author does not own any of the above positions in her personal account as of July 14,2011.</span></em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-45697373253710845922011-07-13T23:31:00.000-04:002011-07-13T23:31:39.784-04:00可乐股吧 Coke and King Kong: Coinstar 能从Netflix消息得利吗?<a href="http://cokeandkingkong.blogspot.com/2011/07/coinstar-netflix.html">可乐股吧 Coke and King Kong: Coinstar 能从Netflix消息得利吗?</a>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-37091361254891659562011-07-13T13:29:00.001-04:002011-07-13T13:32:02.861-04:00Alcoa's earnings and the global economyAlcoa (<a href="http://finance.yahoo.com/q?s=aa&ql=1">AA</a>), the largest aluminium producer in the world is broadly viewed as one of the barometers of the global economy. Analysts often look at AA's earnings release for some hints of economic conditions.<br />
The second quarter report was no exception. The shares price of<a href="http://finance.yahoo.com/q?s=aa&ql=1"> AA</a> fell about 2% preceding the release and did very little after it.<br />
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Bulls on the global economy may have found assurance from AA's forecast. For the year, Alcoa projects aluminum demand to grow 12% on top of the 13% growth witnessed in 2010. What is better is that the optimism is broad based, including aerospace (7%), automotive (4-8%), commercial transportation (7-12%), packaging (2-3%), building and construction (1-3%), and industrial gas turbines (5-10%). According to Alcoa, aluminum demand would double by 2020 from 2010 on 6.5% annual growth.<br />
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<span style="font-family: "Trebuchet MS", sans-serif;"><strong>By segments,</strong></span><br />
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Alumina - The shipments increased 11.8% year over year to 2.4 million metric tons on production of 4.1 million metric tons. The price of alumina jumped 7%. <br />
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Primary Metals - Shipments were 0.7 million metric tons, almost flat with the previous-year quarter. Pricing improved. Production increased by 5% year over year to 0.9 million metric tons. <br />
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Flat-Rolled Products - Shipments jumped 24.8% year over year to 0.4 million metric tons. Both Russia and China continued to see positive trends. Besides, third-party volumes were up 41% in Russia and 30% in China compared with the second quarter of 2010.<br />
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Engineered Products and Solutions - Shipments surged 23.9% year over year to 0.57 million metric tons. The segment’s strong results were marked by new product developments and productivity improvements.<br />
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Obviously all the above results were partially offset by higher energy and raw material prices.<br />
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Not everyone shared the optimism. Citigroup analyst, Brian Yu lowered his 2011 earnings estimate to $1.21 from $1.25 per share and his 2012 estimate to $1.35 from $1.43, citing higher-than-expected input prices. Yu estimates that cash costs in the company's primary metals group averaged $1.11 per pound in the second quarter. He notes that if other producers are seeing the same high prices, then current aluminum prices are too low to offset them. He believes these cost pressures are continuing in the third quarter.<br />
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<strong><span style="font-family: "Trebuchet MS", sans-serif;">My takes: </span></strong><br />
AA's earnings release echoed another economic bellweather <a href="http://cocacolabuffet.blogspot.com/2011/06/take-aways-from-fedexs-earnings_24.html">Fedex (FDX)'s earnings</a> release that indicated that impacts on profit margins were contained. However, if oil prices stay stubbornly above $80 for the rest of the year, smaller companies that do not have global presense may not be in the same shoes.<br />
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<em>Disclaimer: This blog is for general information purpose only. Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog. </em><br />
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<em>Disclosure: The blog author does not own any of the above positions in her personal account as of July 13, 2011</em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-31902636251545600342011-07-13T11:13:00.000-04:002011-07-13T11:13:19.326-04:00Stocks and the Economy: The Timeline of The Fed's Exit Strategies<a href="http://macroinvesting-coke.blogspot.com/2011/07/timeline-of-feds-exit-strategies.html?spref=bl">Stocks and the Economy: The Timeline of The Fed's Exit Strategies</a>: "From the June FOMC meeting minutes , Step 1 : cease reinvesting some or all payments of principal on the securities holdings in Special Ope..."cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-86207478034715676712011-07-11T14:32:00.000-04:002011-07-11T14:32:32.864-04:00可乐股吧 Coke and King Kong: 咖啡股经<a href="http://cokeandkingkong.blogspot.com/2011/07/blog-post_11.html#links">可乐股吧 Coke and King Kong: 咖啡股经</a><div><br /></div><div>GMCR, SBUX, JVA, PEET, CBOU, FARM. Coke wrote about coffee stocks stories in 2011.</div>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-25765105677911013672011-07-08T22:30:00.000-04:002011-07-08T22:30:09.304-04:00Corn prices caught a break from ChinaIn a <a href="http://cocacolabuffet.blogspot.com/2011/07/two-conflicting-cases-for-fertilizer.html">previous post</a>, corn (futures) prices plummeted on a USDA survey that reported more acreage planted than anticipated. July corn futures price dived from almost $8 to as low as $6.15. This sharp dive in crop prices also dragged down most of the agriculture-related stocks. <br />
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However, corn prices rebounced sharply to $6.75 after a report from USDA on US trade data and exports sales released on Wednesday and Friday respectively revealed that China bought 540,000 metric tons of corn from the US just last week, much more than the USDA's forecast of 500,000 tons for the whole year. <br />
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China is known to be the largest corn consuming country in the world. However, its timing to import corn has been elusive. USDA, as well as analysts will fumble to revise their exports estimates to China upward significantly.<br />
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From <a href="http://online.wsj.com/article/SB10001424052702304793504576434261682404834.html?mod=WSJ_hp_LEFTWhatsNewsCollection">Wall Street Journal</a><br />
<blockquote>The USDA is slated to update its outlook for China's corn imports in a crop report Tuesday. The agency will likely raise the forecast by 3 million to 4 million tons, said Shawn McCambridge, senior grains analyst at Jefferies Bache, a brokerage in Chicago. <br />
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USDA chief economist Joe Glauber wouldn't preview next week's report, but said the staff "will certainly be looking at this information" on recent China corn purchases.<br />
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"The fact they are in the market is significant," he said. "We expect them to be a bigger and bigger player in the corn market."<br />
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Market analysts are also now increasing their China corn import projections. Sudakshina Unnikrishnan of Barclays Capital predicts that China will import about 5 million tons in the 2011-2012 crop year. A month ago, she said she would have forecast about 2 million tons of imports.<br />
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"You don't know when or where they are going to make a big splash," said Paul Christopher, international markets strategist at Wells Fargo, "but they will," <br />
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</blockquote>The fact that the Chinese is in the market is certainly bullish for agriculture related stocks such as <a href="http://finance.yahoo.com/q?s=POT&ql=1">POT</a>, <a href="http://finance.yahoo.com/q?s=MOS&ql=1">MOS</a>, <a href="http://finance.yahoo.com/q?s=AGU&ql=1">AGU</a>, <a href="http://finance.yahoo.com/q?s=CF&ql=1">CF</a>.<br />
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<em>Disclaimer: This blog is for general information purpose only. Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog. </em><br />
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<em>Disclosure: The blog author does not own any of the above mentioned positions in her personal account as of July 8, 2011</em><em><br />
</em>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com2tag:blogger.com,1999:blog-2659742909047043433.post-87590390628067510992011-07-08T17:59:00.000-04:002011-07-08T17:59:52.322-04:00可乐股吧 Coke and King Kong: Lululemon瑜伽风姿Click on the link for more details on LULU:<br /><a href="http://cokeandkingkong.blogspot.com/2011/07/lululemon.html#links">可乐股吧 Coke and King Kong: Lululemon瑜伽风姿</a>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-20819379477236415132011-07-07T22:48:00.000-04:002011-07-07T22:48:46.531-04:00June 2011 Same Store Sales ScorecardWhether it is the overly pessimistic downward revised estimates, or the rather sudden subsiding raw material and gasoline prices, or the unusually dry and hot weather, most retailers reported same store sales that beat analysts' estimates. <br />
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<strong>Luxury and Strong Brand</strong><br />
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Leading the way were luxury and strong brand name retailers. Luxury departmental stores such as Neiman Marcus and Saks 5th Ave (<a href="http://finance.yahoo.com/q?s=sks&ql=1">SKS</a>), strong brand superstore such as Costco (<a href="http://finance.yahoo.com/q?s=COST&ql=1">COST</a>) and women's clothes, Limited Brands (<a href="http://finance.yahoo.com/q?s=LTD&ql=1">LTD</a>) whose flagship lingerie stores, Victoria's Secrets reaped a 17% rise in same store sales, all reported double digit same store sales growth.<br />
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Teenager brands such as Abercrombie and Fitch (<a href="http://finance.yahoo.com/q?s=ANF&ql=1">ANF</a>), Aeropostle (<a href="http://finance.yahoo.com/q?s=ARO&ql=1">ARO</a>), American Eagles (<a href="http://finance.yahoo.com/q?s=AEO&ql=1">AEO</a>) no longer provide monthly same store sales figures while Buckles reported a 10.4% same store sales growth.<br />
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<strong>ALL GOOD FROM NOW OR JUST AN ADJUSTMENT OVERDONE?</strong><br />
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Just a little over a month ago, shares of retailers, especially apparel and shoe makers were beaten down on costs pressure and profit margin squeeze brought by record raw material prices (leather, cotton,etc) and rising gasoline prices that kept shoppers at home. <br />
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Commodity and energy prices went through almost a month of correction. International Energy Association (IEA) together with Obama's administration gave energy prices an ultimatum by releasing strategic petroleum reserves,an unusual move given the circumstances but a strong signal of the authorities's determination to stop the energy and commodity rally. The market got the hint. Analysts very soon picked up optimism as gasoline and cotton prices retreated. <br />
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However, as many retailers getting ready to hike their products' prices, some as much as 10-15% to pass on higher costs, will the relief in gasoline and raw material prices be enough and in time to score a good report card for retailers in the summer? <br />
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Disclosure: The author does not own any of the above mentioned position in her personal account as of July 7, 2011cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-12058281052712637502011-07-06T20:07:00.000-04:002011-07-06T20:07:16.221-04:00可乐股吧 Coke and King Kong: Green Mountain Coffee 和 K-cup<a href="http://cokeandkingkong.blogspot.com/2011/07/green-mountain-coffee-k-cup.html#links">可乐股吧 Coke and King Kong: Green Mountain Coffee 和 K-cup</a><br /><br />Coke wrote on GMCRcokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-19735193324844216022011-07-05T16:32:00.000-04:002011-07-05T16:32:34.380-04:00可乐股吧 Coke and King Kong: SODASTREAM,自制汽水?<a href="http://cokeandkingkong.blogspot.com/2011/07/soda.html#links">可乐股吧 Coke and King Kong: SODASTREAM,自制汽水?</a><br />Coke wrote about SODAcokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-23624474287663273842011-07-05T15:19:00.000-04:002011-07-05T15:19:37.376-04:00可乐股吧 Coke and King Kong: Crocs再续Coke wrote about CROX<br /><a href="http://cokeandkingkong.blogspot.com/2011/07/crocs.html#links">可乐股吧 Coke and King Kong: Crocs再续</a>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-90609245268209989352011-07-03T23:35:00.000-04:002011-07-03T23:35:43.145-04:00Macao Casinos Delivered Again in JuneFrom <a href="http://www.reuters.com/article/2011/07/01/macau-revenues-idUSL3E7HS1DG20110701?feedType=RSS&feedName=cyclicalConsumerGoodsSector&rpc=43">Reuters</a><br />
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<blockquote>Macau, the world's largest gambling market, posted an annual 52.4 percent rise in gaming revenue in June to 20.8 billion patacas ($2.6 billion), the Macau government said on Friday, signalling a ravenous gambling appetite from Chinese tourists.</blockquote>Casino stocks that stand to benefit from a regional presence rallied on Friday : Las Vegas Sands(<a href="http://finance.yahoo.com/q?s=LVS&ql=1">LVS</a>) up 4.22% today, MGM Resorts (<a href="http://finance.yahoo.com/q?s=MGM&ql=1">MGM</a>) up 4.16%, Wynn Resorts (<a href="http://finance.yahoo.com/q?s=WYNN&ql=1">WYNN</a>) up 4.26%, Melco Crown Entertainment (<a href="http://finance.yahoo.com/q?s=MPEL&ql=1">MPEL</a>) up 6.03%.<br />
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For related articles, please check out the following section:<br />
<a href="http://cocacolabuffet.blogspot.com/search/label/Gaming">http://cocacolabuffet.blogspot.com/search/label/Gaming</a><br />
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Disclosure: The blog author does not own any of the above positions in her personal account as of July 3, 2011cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-10118405159636822042011-07-03T23:26:00.000-04:002011-07-03T23:26:01.549-04:00Two conflicting cases for fertilizer stocks this weekTwo pieces of news moved stock prices of fertilizer companies this week . <br />
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As most of us probably have noticed, stock prices of fertilizer companies move closely together with crop prices (especially corn prices) in the short-term. Surveys by the U.S Agriculture Department (USDA) reported on Thursday that U.S. farmers planted far more corn than expected this growing season. This report sent corn prices plunging and sparked speculation that upward pressure on food prices may be coming to an end. Corn futures for July delivery tumbled to 9.9% to $6.29 a bushel after falling as low as $6.15 on Thursday. Shares of agriculture stocks were affected despite a 4-day rally for Dow Jones Index. <br />
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From <a href="http://online.wsj.com/article/SB10001424052702304584004576417770984715678.html?mod=googlenews_wsj">Wall Street Journal</a>,<br />
<blockquote>USDA's conducted during the first two weeks of June found farmers had planted 92.3 million acres of corn, the second most since World War II after 93.5 million acres in 2007. ..........<br />
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As recently as June 9, USDA officials had guessed that excessive rain and widespread flooding this spring limited farmers to 90.7 million acres. But a separate USDA report also found supplies were bigger than expected in early June, signaling relief for food companies, livestock producers and consumers. <br />
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</blockquote>In the meantime, fertilizer stocks found strength in Canpotex's success in <a href="http://business.financialpost.com/2011/06/29/canpotex-china-sign-potash-deal-price-jumps/">negotiating a price hike of potash with China</a>. The agreed-upon price of $470 per tonne was $70 higher than last year. Many had expected $450 per tonne. This contract signalled tightness in the supply of potash and continued strong demand from China, the largest fertilizer consuming country in the world. <br />
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In my opinion, share prices of fertilizer stocks will go through a streak of volatility and possibly weakness as crop prices, especially corn prices are testing their support. Once corn prices find their support, say, between $5-$6, the tightness in supply of fertilizers should regain importance. After all, it is generally believed that the economics of using fertilizers makes sense as long as corn prices stay above $3.56, soy bean $8.49, wheat $6.73.<br />
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Note: Canpotex is a potash consortium formed by Potash Corp (<a href="http://finance.yahoo.com/q?s=pot&ql=1">POT</a>), Mosaic (<a href="http://finance.yahoo.com/q?s=MOS&ql=1">MOS</a>) and Agrium (<a href="http://finance.yahoo.com/q?s=AGU&ql=1">AGU</a>). It controls 70% of the world potash trade. <br />
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Disclosure: The blog author does not own any of the above positions in her personal account as of July 3, 2011cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-88711539147718397662011-06-24T13:13:00.001-04:002011-06-24T13:14:55.656-04:00Take aways from Fedex's earningsFedEx Corp.(<a href="http://finance.yahoo.com/q?s=fdx&ql=1">FDX</a>), the world's second-largest package delivery company painted a rather rosy economic picture on Wednesday as it reported a 33 percent increase in earnings for the quarter ended May 31 (its 4th quarter for the fiscal year 2011) in addition to a guidance of per-share earnings growth of 39 to 50 percent for the fiscal year 2012. The company expects the global economy to accelerate in the second half of the year as fuel prices retreat from three-year highs and the Japanese economy recovers. While much of the growth will be driven by China and other developing nations, FDX said the U.S. economy will improve as well.<br />
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The company serves as the barometer of the global economy as it transports a variety of goods. FDX expects the U.S. economy to grow 2.5 percent this year and 3 percent in 2012. The company expects U.S. industrial production to grow around 4.2 percent this year and another 4.3 percent next year.<br />
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However, as one digs deeper into the statement, FDX's good news may be more of its own growth story rather than a global economic growth story. FDX, after successfully squeezed its European competitor, DHL out of the US market, understandably should enjoy a signficant pricing power sharing a duopolistic market with UPS. FDX, in its last quarter, was able to raise revenue per package by 10%, including raising fuel surcharge. In other words, it was able to pass on higher costs to its customers. <br />
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If an increase in transportation cost is widespread , can this be good news to other companies and the economy?cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-29826576825465454982011-06-16T12:32:00.000-04:002011-06-16T12:32:15.229-04:00What happens to the economy this week? June 13, 2011<div><strong>Manufacturing</strong><br />
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<a href="http://macroinvesting-coke.blogspot.com/2011/06/manufacturing-is-in-contraction.html?spref=bl">Stocks and the Economy: Manufacturing is in contraction</a>: "Two important regional manufacturing indices this week reported contractions in manufacturing. For the first time since November 2010, Empi..."<br />
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<strong>Prices</strong><br />
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<div><a href="http://macroinvesting-coke.blogspot.com/2011/06/cpi-figures-mean-no-more-qe3.html?spref=bl">Stocks and the Economy: CPI figures mean no more QE3?</a>: "The consumer price index in May grew at a 0.2 percent rate. The core CPI, that excludes energy and food prices, jumped 0.3 percent. Both mea..."</div></div>cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com0tag:blogger.com,1999:blog-2659742909047043433.post-73641806758665283612011-06-13T15:07:00.000-04:002011-06-13T15:07:48.758-04:00Commercial real estates the next leg down?With all the fuss about a slowing economy and increasing tighter capital market with QE2 winding down, one would probably start to find cracks in cyclical sectors, sectors that are most vulnerable should the economy slow. <br />
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Commercial real estates (CRE) have historically been one of the most sensitive to economic conditions and capital availability. With the Fed's two rounds of quantitative easing, recovering businesses and confidence among investors, CRE has been able to utilize leverage to significantly improve return on investment. Real-estate research firm Green Street Advisors reported that its index of Midtown Manhattan office-building values is up 88% since its mid-2009 nadir, back to within 15% of their 2007 peak. The index is tilted toward better quality buildings.<br />
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Stock market noted this sharp rise in valuation. Dow Jones Equity All REIT Index has almost tripled since the market's low on March 9, 2009. CRE big names like Vornado Realty Trust (VNO), Boston Property (BXP), Simon Property (SPG), has each almost quardupled its share value in March 2009. However, hints of caution have crept in these waves of euphoria. Big players may have started their way to take some chips off the table. <br />
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According to a recent article from <a href="http://online.wsj.com/article/SB10001424052702304906004576371800946316830.html">Wall Street Journal</a>, high-profile office buildings in large cities have been put on the sell block, including Willis Tower in Chicago, Constitution Center in Washington, the Seagram Building in New York, to name a few. <br />
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<blockquote>In April, the total value of new sales listings of U.S. office buildings was $8.7 billion, according to real-estate research firm Real Capital Analytics. That was the highest level since 2008. Preliminary data for May show $10 billion in new listings, which would be the highest monthly total since late 2007.......................................................................</blockquote><br />
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<blockquote>The sharp rise in values has come over the past year, a relatively short time frame in the real-estate market. Recent deals include the sale of 750 Seventh Ave. in New York's Times Square by Hines Interests for a surprisingly high $485 million and Beacon Capital Partners' sale of Market Square in Washington for a record $905 a square foot........</blockquote><br />
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<blockquote>Beacon also is considering bringing to market 1211 Ave. of the Americas in coming weeks, for which the company would look to retrieve well above the $1.5 billion that it paid in 2006, according to people familiar with the matter. The 45-story property houses the headquarters of News Corp., publisher of The Wall Street Journal.</blockquote>This rush to sell is likely to result from worries that there will no longer be easy money, namely easy access to financing. Since April, rallies of high yield corporate bonds and commercial real estates debt came to a halt as yields rose, a sign that lenders now require higher risk premium before they provide the financing. In an article of <a href="http://online.wsj.com/article/SB10001424052702304259304576375233556859772.html">Wall Street Journal</a>, <br />
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<blockquote>Some of the selloff can be attributed to a heavy supply of these bonds, both from the Fed and from companies taking advantage of better market conditions since the crisis. Companies issued a record $114 billion worth of junk bonds through June 2, a 27% increase of the same period last year, according to Standard & Poor's Leveraged Commentary & Data.</blockquote><br />
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<blockquote>"The timing couldn't be worse for the market," said Marina Tukhin, head of asset-backed securities trading at Gleacher Descap in New York, referring to the effect of the Fed's auctions on the mortgage market, which she calls "oversaturated" with troubled assets. </blockquote><br />
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Meanwhile, other measures that gauge the ease of obtaining financing or risk attitude, such as TED spread (the difference between LIBOR and treasury securities yield) has remained quite subdued although its current level is much higher than the one in March. Fundamental wise, most REITs are showing growth in net operating income (NOI) and funds from operations (FFO) which measure strengths in CRE companies. <br />
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That said, for those who anticipate no more quantitative easing and a slowdown in the eocnomy, gradually building shorts position in REITs into the summer should provide fairly handsome risk/reward profiles.cokehttp://www.blogger.com/profile/03281739954493049714noreply@blogger.com3