Posted on 26 January 2012.
The world economy is at a critical turning point. A double dip is looming on the horizon. A repeat of the massive sell-off we experienced in 2008 could be on the way. The European crisis is far from over. Greece has been negotiating a debt swap for weeks. Greece’s creditors could realize losses up to 70%. This move is not expected to solve the problem. The current deal with Greece only covers private creditors and doesn’t touch any debt owed the European Central Bank. Needless to say, Europe will be dragging on the world economy throughout 2012.
China and Asia are also slowing. Recent reports from Bloomberg say China’s GDP rose 8.9% in the fourth quarter. This was a little higher than the 8.7% average estimate but still foreshadows China’s earlier statements of slowing growth in 2012. With two of the major influences of the world economy floundering, how can anyone expect the stock market to rise? The answer is simple, stick to solid American dividend-paying stocks. The Dow dogs made huge gains last year and they will do it again this year.
General Electric (GE) has been making a good run up since forming a bottom last year. The stock has gained more than 25% since moving up from its base around $15. GE is currently trading around $19 and looks strong to continue. In its fourth-quarter statement GE reported earnings of $0.39/share, an 11% gain over the same quarter in the previous year and full-year earnings are up 22%.To continue reading, click here.
Posted in Dividend Kings
Posted on 24 January 2012.
For many, investing in small and mid-cap stocks are an ideal strategy for increasing returns. A recent example of this occurred with the strong performance of 15.47% for the Russell 2000 Index during the last quarter. This highlights the benefits of owning this size of company in today’s marketplace. Several firms from this category that I will examine include Chimera Investment (CIM), Alcatel-Lucent (ALU), Huntington Bancshares (HBAN) and Hercules Offshore (HERO). Please Use my analysis as a starting point for additional research before you plunge in.
Chimera Investment trades a forward price earnings ratio of 6.13. The balance sheet includes revenues of $614 million, cash of $9.82 million and debt of $6.02 billion. The earnings have been volatile during the last year by declining from $.17 to $.06. This has helped to increase the weakness in the stock with shares trading below the 200 day moving average (which is bearish). Moreover, the volume has decreased and shares have formed some kind of double pattern. The problem going forward is the lack of confidence in the profits of the firm. This has caused shares to trade slightly higher and reverse. The same kind of situation is taking place with the recent rally in the stock to $2.76. Until there is more clarity in the earnings prospects, Chimera Investments will face continuing challenges. This will be fueled by fears surrounding the balance sheet and possible liquidity challenges. As a result, investors should avoid the stock.To continue reading, click here.
Posted in Dividend Kings