Cisco (CSCO) has made the right decision in choosing to concentrate its innovation on open standards and open source. At the base level, Cisco’s technologies will be available on the open source platform while the company will continue to add value from the top. This is a very successful business model as limited versions of software programs and networking products can be made available to smaller businesses and developers, while professional grade products and services can be sold at premium prices to medium and large businesses.

By choosing to keep base level technologies on an open source platform, Cisco is effectively increasing its long-term profitability. A networking ecosystem that is premium at the upper levels and open source at a basic level will have a great appeal among developers, small, medium and large businesses.

Moreover, small businesses that need assistance from Cisco’s experts can go ahead and purchase networking solutions at an additional cost. The best part is, Cisco’s technological integrations can be used in any type of the industry, enabling production lines that are monitored by means of an intelligent network, with benefits for production management, product quality and cost reduction.

Cisco also announced a plan for global availability in the fourth quarter of 2012, bringing a teleconferencing and networking solution that incorporates tools for effective online meetings, both in the office and in mobile environments, albeit in a private cloud environment. To continue reading, click here.

Pfizer’s (PFE) current pipeline makes it a more attractive investment option than its peers and rivals. The company has 78 drugs in its pipeline currently. 53 of these drugs are in Phase 1 or Phase 2 trials. Eight, however, are in registration, and another 17 are approaching registration in Phase 3 trials. In just the last three months the company has seen four of its drugs approved for sale by the FDA.

By comparison, Merck (MRK) has 32 drugs in trial stages, and three under review. Johnson & Johnson (JNJ) has a total of 16 drugs in clinical trials with two in registration. Both of these companies have particularly weak pipelines, although Johnson & Johnson does not depend as heavily on its pharmaceutical business as Merck does. Bristol-Myers Squibb (BMY) has seven drugs in the registration phase with an additional 46 drugs in the clinical trials stage. Eli Lilly (LLY) has a healthy 62 drugs in clinical stages. But Eli Lilly is in trouble given that its best-selling drug Cymbalta is on track to lose patent protection in the first half of 2013. Cymbalta provided Lilly 22% of its revenue in 2011 and losing patent protection will see Cymbalta sales decline by two-thirds or more.

Pfizer’s recently approved drugs will go a long way towards making up the $9 billion a year in sales that Lipitor, which has lost patent protection, provided. The rheumatoid arthritis drug Xeljanz is expected to provide more than $2.5 billion in sales a year. Xeljanz is a pill taken twice a day that functions by inhibiting molecules known as “Janus kinases”, crucial to the joint inflammation that characterizes rheumatoid arthritis. To continue reading, click here.

The commodity bulls only tell half the story. They say that globalization and rising affluence with increase demand for commodities. This is true, but what they don’t mention is that globalization and rising affluence also increases the supply of commodities. A global community means a global network of investors now deploy capital to develop energy projects. More regions are starting to produce. Investors should fear supply instead of chasing demand.

Producers Pump Faster

Energy companies tried to cut production in response to low natural gas prices, but couldn’t stick to it. United States natural gas production for 2013 will match its 2012 year record levels. Active U.S. gas rigs drastically fell 49% this year and the number of gas rigs stood at 413. This is the lowest number of active rigs since June 1999. US prices this year are estimated only one third of its 2008 price levels.

Unfortunately for energy companies, these efforts have failed. The price of fuel started to fall last October 30 and dropped by 9.2% last November 12 from a record 44% price increase last September 10. “As the gas price goes down, it’s almost like they need to produce twice as much to keep their cash flow where it was,” said Mr. Edward Kallio, director of Calgary based gas consulting firm Ziff Energy Group. Gas stockpiles surged to an all-time high this month to around $15 billion using current spot prices. Oklahoma based Chesapeake Energy (CHK) reported third quarter gas production rose 9.8% from second quarter to 302 billion cubic feet.

Gas companies remain positive that a rise in gas prices would yield from diminishing number of gas rigs. 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.

Today many industries in the tech sector are in value territory. This fall from grace is apparent in how the firms of the SPDR Technology Selector Fund (XLK) trade at an average 15 price-to-earnings ratio which is only slightly higher than the 14 price-to-earnings ratio of the S&P 500 (SPY) fund companies. Many familiar semiconductor names trade at even lower valuations. Apparently, tech is no longer the darling of investors and the sector has nearly the same valuations as the broader stock market.

Investors can seize the opportunity offered by the market today by reviewing the challenges faced by different semiconductor stocks that are priced as value investments. In particular, semiconductor manufacturers and their suppliers are frequently trading at attractive multiples in today’s markets. Are they value investments or value traps?

PC Sales Slide

The tech sector is recoiling from the third quarter’s blow to personal computer sales. PC sales worldwide declined 8.3% compared with the last year’s third-quarter sales, according to Gartner Inc. market research.

Gartner head analyst Mikako Kitagawa said, “The overall PC market decline was triggered by a continuing slowdown in PC shipments,” and that the outlook for the launch of Microsoft Windows 8 is tenuous because “shipments were less vigorous as vendors and their channel partners liquidated inventory in the third quarter.”

Retailers resisted placing orders because of the weak back-to-school sales. These firms had cleared out their entire inventory before the launch of Windows 8. In contrast, the professional market remained unaffected. To continue reading, click here.

With interest rates remaining at historical lows, REIT investors have been nicely rewarded with growing share prices and healthy dividend yields. In some instances, especially in light of the recovering real estate market, REIT shares have risen year to date by as much as 20% or more.

While both the current and expected performance of most REITs has been positive, there is one REIT in particular that I feel could be a real winner in terms of longer-term income and growth due to its diversified portfolio and income-generating strategies. In this article, I will discuss why Two Harbors Investment (TWO) is a great fit for REIT buyers.

Although Two Harbors recently cut its dividend, the company still offers a nice yield of over 12%. Over the past 12 months, Two Harbor’s sales growth has increased by more than 400%, with income growth in excess of 250%. The company feels that this is due in large part to its diversified asset portfolio that consists of both agency and non-agency mortgage-backed securities, as well as the firm’s purchase of foreclosed single-family properties from big banks that are subsequently rented out for income generation.

Upon purchase of these homes, Two Harbors rolls the properties into an entity named Silver Bay Realty Trust. This trust has recently registered for its own IPO. Although Silver Bay is a new offering, it has an advantage when seeking financing from lenders in that it is owned by Two Harbors.

Two Harbors has a P/E ratio of 9, which is actually below that of the real estate industry overall of closer to 10, and substantially lower than the P/E ratio of 17.7 for the S&P 500 index. To continue reading, click here.

Something very interesting is happening in the metals markets these days. Copper prices are up, and the demand for the metal is high despite a dismal global economy. Copper was actually trading at $7,815 a metric ton for three-month contracts on the London Metals Exchange on July 3. The situation was even better in Shanghai, where an October copper contract on the Shanghai Futures exchange was trading at 56,310 yuan, or $8,900 a metric ton, according to Reuters. Reuters speculated that the increased demand was created by an increase in the Chinese Purchasing Managers Index, which expanded at its fastest pace in June. In this article, I will look at how this development could impact copper miners Freeport-McMoRan (FCX), Southern Copper (SCCO), Newmont Mining (NEM), BHP Billiton (BHP), Rio Tinto (RIO), Anglo American (AAUKF.PK), and Barrick Gold (ABX).

Freeport’s stock went up by 3.9% on July 3 and it is easy to see why. The company is in a perfect position to meet China’s increased demand for copper with its Grasberg Mine in Indonesia. The reason for this is obvious the Grasberg mine is located in New Guinea, which means a shorter voyage to China. That gives Freeport an edge over competitors like Southern Copper that have to ship copper half way around the world from Chile and Peru. Even if Freeport has to pay higher excise taxes to the Indonesian government it can still make up profits with lower shipping costs. Therefore Freeport should be one of the first companies to profit from higher copper prices because of its proximity to the biggest copper consumer China.To continue reading, click here.

Telecommunications is becoming increasingly important in a world without boundaries and the relentless advance of technology. Previously stand-alone electronic devices now work together smoothly, allowing us to use mobile phones to produce photographs and videos, watch TV via the Internet, and use TV sets to browse the Internet. Telecommunications also tie together offerings from various industries such as movies and music from the entertainment industry and payment processing and fund transfers from the financial services industry. As a result, the market for telecommunications is growing rapidly and the Telecommunications Industry Association (TIA) estimates that telecommunications spending was $3.34 trillion in 2011 and is expected to reach $4.4 trillion by 2015. This has resulted in a major battle between wired and wireless technologies, and TIA is of the opinion that future growth will be driven by wireless, even though there is plenty of potential for wired technology in sectors such as cloud computing.

Windstream (WIN) is a wireline telephone and DSL Internet service provider. Windstream provides consumers in predominantly rural areas with phone, Internet broadband and digital TV services as well as a range of IP-based voice and data services. It also provides businesses and government agencies with advanced phone services. The company has been aggressive when it comes to making acquisitions and, following the acquisition of CT Communications in 2007 and Lexcom and D&E Communications in 2009, the pace of inorganic growth has accelerated. In 2010, it acquired KDL, Norlight, Hosted Solutions, Iowa Telecommunications Services, and NuVox and PAETEC in 2011.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.