The second half of this year has been great for gold. Prices have jumped from a low of $1560 in July to its current $1700. Early in October, prices were knocking on $1800, but failed to get over the milestone. However, gold has seen a pullback since then, and I believe that we could see a resurging gold market after these election results. Understandably, investors have been turning to gold as a hedge against the uncertainties that the market faces such as the U.S. fiscal cliff, Europe’s debt crisis and China’s cooling economy.

When it comes to gold, there are a wide variety of ways to invest. For the purposes of this article, we will talk about gold miners. My favorite play is AngloGold Ashanti (AU). To be fair, AngloGold recently settled a worker strike in South Africa, which was losing the company 32,000 ounces of gold each week. However, the strike is over, and workers will be heading back to work; hopefully, the company can make up a little of that production in the coming weeks.

Lets take a look at the fundamentals to determine the strength of AngloGold Ashanti. To start, the gold miner has a forward price to earnings ratio of 6.86, PEG of 0.96 and has a reasonable debt load, with the debt to equity ratio at 0.45. I like to see a current ratio of 2.72, because that tells me that the company is in strong enough financial position to pay off any unforeseen costs or liabilities. To continue reading, click here.

Austerity trends have arrived for companies in the Code Division Multiple Access (CDMA) business. Weak demand for network equipment and rising competition plagues the sector. The effects of declining demand in North America for network gear that runs on CDMA have been terrible. The entire sector is weak, but some companies are more vulnerable than others.

Recently, Alcatel-Lucent (ALU) reported second quarter results that showed a $312 billion loss. Its sales fell 7.1% from the period a year ago to about $4 billion. Alcatel-Lucent’s revenue from North America, which accounted for 39% of sales, fell 8.3% to $1.7 billion during the quarter. Alcatel-Lucent posted operating margins of 4% at the end of 2011, while its rival, Sweden-based Ericsson (ERIC), managed a margin for underlying earnings of 11.6%. China’s Huawei reported an operating margin of 15.8% in 2010, the last year for which figures are available.

I believe that Alcatel-Lucent is significantly undervalued at its current price of around $1 per share, but I don’t believe it is certain to grow in the next few years. While its rivals such as Cisco (CSCO), Nokia (NOK), Siemens (SI), and Ericsson are coping in a deteriorating macroeconomic environment, Alcatel-Lucent is going through a painful program to accelerate its transformation and reduce costs in order to keep ahead of market pressures.

Alcatel-Lucent may not prosper for several reasons. First, the CDMA business is disappearing. Verizon (VZ), the market leader in the U.S., Second, Alcatel-Lucent is faced with increasing pressure from its telecom vendor rivals and the harsh global economy. is phasing it out. To continue reading, click here.

Investing is all about financing a project with as little capital as possible to receive the most capital back as quickly as possible. Some companies appear better-poised to return capital to investors than others.

Some firms which are selling assets are trading at lower price multiple than firms which are tapping the markets for more capital. The former are attractive buy candidates, while the latter are not.

Companies Selling Debt

According to the Markit iTraxx Crossover Index, the credit ratings of 50 companies have been raised 14 basis points within four consecutive days in the UK. Legal & General Group Head of Credit Strategy Ben Bennett stated during an interview, “We’ve had an amazing run of spread compression and it’s only natural that credit takes a bit of a breather. There is still good demand for new issuance, particularly rare names or deals that provide more yield.”

Two of the world’s biggest companies, Nokia (NOK) and Pepsico (PEP) are selling bonds in Europe. Nokia, which is facing deteriorating sales and market share, has planned to bolster funds by selling convertible bonds in the new European market and thus prevent debt maturity failure. Many other local and international companies are also inclined to sell bonds in Euros to secure their respective financial positions. The increasing stock ratings of high-yield credit companies entice investments in the European market from many multinational businesses.

This sale will provide about $978 million for Nokia with debt maturities in 2017. To continue reading, click here.

Yahoo (YHOO) CEO Marissa Mayer certainly has a lot on her plate. Being the new CEO of a company that has had five in the past year is certainly a challenge, and she can hardly afford to sit still. But one item that Mayer might want to consider adding to her agenda could spell the difference between success or failure during her tenure at Yahoo: she needs to either tell or ask the Board of Directors what Yahoo wants to be when it grows up.

Everything will flow from the answer to that question.

1. Is Yahoo a tech company or a media company?
2. Should it focus on growth?
3. Should it focus on wringing maximum value out of its current platform?
4. Are transformative acquisitions the answer (the killing of Flickr notwithstanding)?
5. Is it time to sell?

Absent a firm understanding of what the goal is, Yahoo management has little hope of reversing the company’s slide into irrelevance.

The trouble with technology companies that fall on hard times, and the industry more broadly, is that there is a tendency to reach for the next dose of innovation or deal making to return to growth. But trees don’t grow to the sky and growth stories do not continue forever. Oracle (ORCL) CEO Larry Ellison was vilified when he began pursuit of competitor PeopleSoft nearly 10 years ago. Ellison maintained that consolidation was necessary in the industry, and he was right. Though Yahoo is in a different business than Oracle, the very same tech mindset that recoiled at Ellison’s suggestion that the era of limitless (but not really) growth was over seems to be at work in the Yahoo boardroom. To continue reading, click here.

Mobile computing devices, such as smartphones and tablets, are displacing laptop and desktop computer sales in developed economies. This structural shift in the technology sector has sent shares of many personal computer companies down in price. Are their valuations low enough at today’s market prices to justify the risk of investing in a losing sector?

The End of An Era

After being number one in market share for six straight years, Hewlett-Packard Co. (HPQ) has dropped to second place behind Lenovo Group (LNVGY.PK). Surely this change was no surprise for HP CEO Meg Whitman, since it was widely anticipated by analysts and did not happen overnight.

Market research firm Gartner cited Lenovo’s acquisition of IBM‘s (IBM) personal computer unit seven years ago as a crucial source of its success. Lenovo captured 15.7% of sales in the last quarter, as compared to Hewlett-Packard’s 15.5%, according to a Gartner’s report.

Hewlett Packard’s sales slump is widely attributed to the decline in the demand of PC units after the sudden emergence of smartphones and other mobile devices like the iPad. Reigning since 2006, Hewlett-Packard has been unable to compete against Lenovo in developing markets.

Lenovo gained mostly in the less-developed countries – its planned acquisitions and high penetration in the emerging markets are outpacing the developed ones. Pacific Crest Securities analyst Brent Bracelin said, “It’s a whole new bigger trend coming, not just Lenovo.”

Don’t Pay Premiums in Troubled Sectors

Many firms in the personal computer ecosystem are seriously threatened by the evolution of consumer computing. Stock investors must demand a discount in the form of low valuations before even considering investing in these firms. To continue reading, click here.

The market is set up for fuel prices to relax from their highs. This is good news for travel-related stocks. We will review online travel search as a business model and consider which of these stocks is most attractive.

Clicks Vs. Bricks

Hotels and airline companies compete against their peers on price. Online search companies compete against each other based on the attractiveness of their platforms. The platform with the most vendors and traffic provides the best environment for search. Online search sites do not compete for vendors, banner ads, or users primarily based on the prices they charge participants. Hotel and airline vendors are more concerned about making sure their prices are seen and purchased by a large number of potential consumers.

In addition to sidestepping head-on price competition, the online search business model requires less capital expenditure. This is great news for investors, who should vehemently hate cash outflows. Since this newer business model is more attractive, investors should be willing to pay higher valuations for online search stocks.

The Case for Travel Stocks: Oil Price Decline and Economic Recovery

Gas prices might be at their 2012 peak in the U.S., but according to analyst estimates they could drop to their yearly lows by the end of 2012. This price drop would rest on dormant oil refineries starting production again. The onset of winter will also decrease miles driven, leading to lower demand.

Prices at oil service stations could fall by as much as 6.3% per gallon, which translates to a final price of about $3.54. To continue reading, click here.

People have been clamoring for smartphones ever since Apple (AAPL) introduced the iPhone in 2007. Today, thousands of people carry smartphones or tablets. Now, soon the military may too.

Military operations require dependable information on locations, a way for communicating efforts and a way to share information in real-time – sounds like a regular Saturday night for most people as they use their smartphones or tablets to get directions, meet up with friends, and share pictures of the festivities.

Of course, the military versions of these items are considerably “hardened” and developed specifically for military usage by the Defense Advanced Research Projects Agency (DARPA), but many of the apps carry similarities to those used by civilians, such as DARPA’s custom application that sports Google-like maps based on satellite images.

“Darpa, the defense research arm that contributed to the development of the Internet, has launched an effort called Transformative Apps under which it has developed a few dozen smartphone applications that work on a number of mobile devices it is evaluating,” reports the Wall Street Journal. “In addition to mapping, the apps can do things like identify explosives and weapons and help navigate parachute drops” and they have shown marked success.

“During a battle in a village near Kandahar, Afghanistan, Lt. Kevin Pelletier used a tablet computer with a custom map application to direct soldiers’ movements,” continues the paper. “As thousands of rounds flew through the village near Kandahar, Lt. To continue reading, click here.

The broad market rally on September 7, 2012, saw the Dow at its highest level since 2007 and the S&P 500 ending at its highest level since 2008. The new European bond buying program was instituted to stem that region’s debt crisis and provided a much needed boost in confidence to world capital markets. Stronger-than-expected domestic service sector and labour market data added fuel to the fire and saw materials, financials and industrials gaining more than 2%.

Micron Technology Inc. (MU) added 7.8% to its share price on September 7. While the broad market advance definitely played a large part in this increase, the business activity of other companies in the same space led buyers to Micron, which also provided a portion of the boost. In addition, some of the recent share price activity in the companies in this space has also been driven by speculation as to mergers, acquisitions and rationalizations.

Micron manufactures semiconductor devices, data storage and retrieval products. Its products include data random access memory products (DRAM), NAND flash memory products and NOR flash memory chip products. NAND and NOR flash memory do not require power to retain data or memory. Flash chips are used in high speed, high capacity storage drives. Markets that fuel the demand for the chips are the smartphone and tablet markets which continue to provide steady outlets for Micron’s chips.

OCZ Technology Group Inc (OCZ), a solid state drive manufacturer of ultra fast storage products, experienced a shortage of NAND flash memory chips that make its drives work. To continue reading, click here.

As the auto industry has been booming, some investors have been disappointed that General Motors (GM) has not been making as strong of gains as other companies. Its new money-back, no-haggle-price promotion is an attempt to attract more customers and gain market share, but in comparison to promotions involving Chrysler, Nissan, Honda (HMC), Toyota (TM), Ford (F) and even eBay (EBAY), this does not seem like such a big deal. I think the General Motors promotion has received too much hype and will ultimately have no significant impact on the company. Due to its low price, I suggest watching for other developments, but I would not recommend this stock quite yet.

General Motors is currently trading around $21, which is at the low end of its 52-week range of $19 to $31.30. It has a market cap of $31.11 billion and a trailing P/E of 5.98. GM’s revenue and gross profit numbers are up from this point last year, though perhaps not as much as investors would like.

Other companies have been passing by General Motors this year, as auto sales grew by 15% industry-wide, but sales increased by just over 6% for General Motors’ Chevrolet brand. As a result, General Motors is offering a 60-day money-back promotion, where customers will be able to return unwanted new Chevrolet, GMC, Buick, and Cadillac vehicles within 60 days of their purchase. The requirements are quite reasonable, furthermore, as the vehicle must be undamaged, it must have less than 4,000 miles, and the customer must be up to date on payments. To continue reading, click here.

Potash, referred to in the trade as ‘pink gold’, has been thrust into the spotlight lately. Chicago’s full 7th Circuit recently ruled that potash sellers must face price-fixing claims. There was a number of interesting points in Joe Celentino’s article that hint at tremendous investment opportunity. I will talk briefly about the publicly traded defendants in the litigation.

Agrium (AGU) is a Canadian company. It is not involved in mining. It is a wholesaler and retailer, and through its advanced technology segment, an agricultural chemical innovator and purveyor. The Mosaic Company (MOS) is a United States company and operates three mines in Canada — Belle Plaine, Colonsay and Esterhazy. Potash Corporation of Saskatchewan (POT) is a Canadian company with mining rights to almost 850 thousand acres of Canadian land, principally in Saskatchewan. The company also has mining rights with four companies from Russia and Belarus: JSC Uralkali, JSC Silvinit, JSC Belarusian Potash and JSC International Potash. Uralkali and Silvinit merged last year.

The period covered in the litigation is from July 1, 2003 through the present day. During this period, “defendants sold millions of tons of potash in the United States.” Potash is selling at around $435 per ton, and there is no cost-effective substitute for potash. The CEO of Russian potash producer Uralkali (URKA.ME) has suggested that spot potash prices could reach $600 per ton. This is a realistic projection, given the fact potash rose 600 percent from 2003 to 2008.

It does makes you wonder if at some point, growing populations and resulting higher demand for food, will one day put U.S. farmers at the mercy of a Russian ‘potash cartel’ in the same vein as today’s ‘oil cartels’. After all, the defendants in the lawsuit we are discussing produce about 70% of the world’s potash. In 2008, the United States consumed 6.2 million tons. 5.3 million tons (85%) were imported that year. That’s a significantly higher percentage of import than we are experiencing with oil. Oil is important to the U.S. economy…but food is just as critical. Only a fraction of the potash produced worldwide is used for making soap, glass and animal feed.

I see strong value in potash investment. As an American, I am concerned about our ability to develop domestic supplies. Domestically produced potash would be less costly, improve our balance of trade, and make it less likely that our farmers (and our food) will find themselves in the grip of a greedy cartel.

We have already mentioned one U.S. company, Mosaic, but its mines are in Canada. How about a pure play Canadian mining company with rights in the United States? Passport Potash (PPRTF) is just such a company. Passport Potash controls mining rights to about 122,000 acres in Arizona’s Holbrook Basin. I think this particular property gives Passport Potash a strategic advantage over other domestic mining operations in the U.S. There is a railroad (BSNF) just seven miles away. The property is bordered by a major interstate highway that connects to the farmlands of California, and there is a major power station just 25 miles from the site. Another huge factor, although hard to put a monetary value on, is the fact that the State of Arizona is very mining friendly. Seriously, how do you put a price on red tape?

I like the management team as well. The CEO, Joshua Bleak, is just 32, but he has had a lot of exposure to the business as a fourth generation miner. I would like to think that assures some good instincts and maybe, at the very least, some good family advice. Estimates on the quantity of potash in the ground come in at around 600 million tons. In other words, if Passport Potash could produce one million tons annually at current prices, it has the potential to earn $4 to $4.5 billion per year for 600 years. Even if everyone is wrong by half…well, you do the math. Before we move on, there’s one more feather in Passport’s cap that deserves some attention. In this recent article, CEO Bill Doyle of Potash Corporation of Saskatchewan, said he doesn’t envision opening any new potash mines. Later in the article, he speaks of increasing food demand, acquisitions in the potash sector, and higher imports from Brazil. Doyle hasn’t convinced me and considering his remarks, I don’t think he has convinced himself. Passport Potash could easily undercut Doyle in the domestic market. To be sure, it will take additional capital to get Passport Potash producing for the domestic market. It is not an investment that one should enter into lightly, but on its face, it makes good business sense, and Passport Potash has already demonstrated that it can raise capital as it did for the Fitzgerald Ranch acquisition.

Prospect Global Resources (PGRX) is another domestic miner with high potential. Its holdings are not as large, and like Passport Potash, it is an early stage company. Its holdings are also in the Holbrook Basin, so it undoubtedly has access to most, if not all, the infrastructure we discussed earlier in the piece. I can’t speak with a great deal of authority on Prospect Global Resources as it has not been the focus of my research, but clearly, many of the same arguments apply. In any case, you will want to do your own due diligence.

Transparency/Disclosure: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research. I am a consultant to a third-party and have received one hundred fifty dollars for independent research. Always discuss investments with a licensed professional advisor before making any financial decisions. Statements made herein are often “forward-looking statements” as stipulated under Section 27A of the Securities Act of 1933, Section 21E of the Securities Act of 1934, and the Private Securities Litigation Reform Act of 1995. While I have researched this company thoroughly, my due diligence is not a substitute for your own.

One great way to make money in equities is to find a growth company in a growth business, but do so before the company actually grows so the stock is dirt cheap. As for the business, it makes no sense to invest in a new and better sewing machine manufacturer, for instance, as sewing is not a growth industry. One industry that fits the bill for a true growth industry is mixed martial arts. As established sports leagues and events as popular as the National Football League and NASCAR have experienced actual drops in attendance these past few years, mixed martial arts bills itself, quite correctly, as the fastest growing sport in the world. That makes the arena of providing product and services to the mixed martial arts industry an attractive proposition to any company.

One company that is in a position to take advantage of both the growth of mixed martial arts and the fact that its primary target audience is persons under 35 years of age is Respect Your Universe (RYUN). It is a young company, with limited sales to date and no profits. It describes itself on its website as “a premium training apparel and equipment company rooted in and inspired by mixed martial arts.” Yet, when looking at any sort of developmental company, one must first look at the managers. When it comes to Respect Your Universe, I like what I see. Its Chief Executive Officer and Director, Christoper Martens, is formerly an executive at Nike (NKE), specifically serving as its General Manager and Merchandise Director. He served also as Global Director of Apparel for the Beijing Olympic Games in 2008. Prior to Nike, he served eleven years in the apparel division at Eastern Mountain Sports.

John Wood is President of Respect Your Universe, and also a board member. Prior to coming to his current position, he was Director of Customer Development at two major Las Vegas nightclubs, putting him in contact with many of the promoters and participants in Ultimate Fighting Championship events. He is also a martial arts expert on his own accord. His contacts make him the “point” man for Respect Your Universe’s efforts to become the “inside” apparel maker for the mixed martial arts community.

Steven Eklund is the Chief Financial Officer. He has decades of experience in finance with large consumer operations like Nike, General Mills (GIS), and Eddie Bauer. He is 64 years old, substantially older than the other officers, and will add a nice bit of seasoning to the management team.

The other director, Erick Siffert, is Chief Operations Manager. He too has decades of experience in operations, much of that for Nike. All told, this is an idea combination of experience, contacts, and energy for any developing company to be lucky to have. This team gives me great confidence that Respect Your Universe will have every chance to succeed.

Respect Your Universe purports to base its products on foundation beliefs in respect, strength, honor and sustainability. Its products all have special markings, taken from ancient Swahili iconography to designate it is a moisture wicking fabric “Air Weave”, a weather resistant fabric “Wind Weave”, thermal control fabric (Fire Weave), and environmentally friendly fabric (“Terra Weave”).

Respect Your Universe sells a wide variety of performance athletic and leisure wear for indoor and outdoor, competition and training. All its products either incorporate recycled materials, or organic fabrics. Offerings are for men and women, everything from performance shorts to hoodies and duffel bags. The bulk of its sales have been through its web site, but inroads have been made with national retailers also such as Von Maur department stores and Eastbay. Earlier this month, Respect Your Universe reached an agreement to open its first, and flagship, retail store in Las Vegas. It will be placed in an upscale mall, across from a Burberry (BURBY) store.

I do not know of any company as uncompromising to quality and environmentalism as Respect Your Universe purports to be. Its biggest downside is it has no real track record. It has a market capitalization of a little less than $40 million, and trailing 12 month revenue of $67,000 through March 31, 2012. At that time it held a little more than $2 million cash on hand, $0.5 million in inventory, $0.8 million in deposits, and $1.7 million in prepaid expenses. The company recorded a loss in the second quarter of the year of $1.94 million, and since the inception of the company in 2008 has recorded a cumulative loss of a little over $10 million. It carries virtually no long term debt.

This company bears all the hallmarks of a young company in its development stage. It will begin to receive real revenue in the current quarter through its new retail marketing partners and its web site, which only because operational in February of this year.

Perhaps the “grown up” company that most resembles what Respect Your Universe might someday be is Lululemon Athletica (LULU). This high cap ($8.8 billion market capitalization) company has achieved terrific growth without taking on long-term debt. Its operating margin of 28% is more than double Nike’s and Under Armour’s (UA). Its return on equity of 35% is outstanding in any sort of business. And best of all, it is selling at a lower 5 year PEG than Nike, Under Armour or Adidas (ADDYY). Lululemon has obtained this enviable record and position by securing a market, in its case the yoga market, and from that position it is chewing on the virtual heels of Nike and Under Armour in running and other athletic apparel. That, in my opinion, is the way for Respect Your Universe to sustain years of growth. Secure the mixed martial arts market, and then slowly make inroads in other athletic or fashion areas. Time will tell.

Transparency/Disclosure: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research. I am a consultant to a third-party and have received one hundred fifty dollars for independent research. Always discuss investments with a licensed professional advisor before making any financial decisions. Statements made herein are often “forward-looking statements” as stipulated under Section 27A of the Securities Act of 1933, Section 21E of the Securities Act of 1934, and the Private Securities Litigation Reform Act of 1995. While I have researched this company thoroughly, my due diligence is not a substitute for your own.