Hewlett-Packard (HPQ) is a well-known brand in the technology industry. Over the years, the company has managed to build a strong reputation in the global market with a diverse portfolio of products and services. In this analysis, I will discuss some of the most recent developments that will affect the company’s competitive advantages. The most prominent among these developments are acquisitions and divestment plans that the business has announced recently, formation of new partnerships, launch of new innovative products and introduction of aggressive market expansion strategies.

Hewlett-Packard has always targeted a greater market share with its diversified portfolio of innovative products and services. It has recently launched the HP 3PAR, a program that allows clients to boost returns on investment in server utilization by effectively doubling the performance of physical server virtual machines. This innovative new technology has tremendous commercial applications in the future as it promises to boost the capacity of virtual servers by two times.

Apart from this, the company remains as dedicated as ever to push for greater share of the business market. For this reason, Hewlett-Packard has recently unveiled its latest fleet of state-of-the-art high-tech business-oriented commercial computers that are specifically engineered to cater to designing, reliability, performance and security needs of businesses and end-users. This will significantly help Hewlett-Packard in widening its competitive moat in the global market for Ultrabooks.

Hewlett-Packard has assembled a temporary moat around its server and cloud computing businesses.To continue reading, click here.

Based on widely-touted substitution of mobile devices for traditional PCs, investors are presented with the following question: is Dell (DELL) trading at a value discount in the light of bad news, or is it a value trap which has suffered irreversible damage in the midst of a secular market change? At current price levels, is there an advantage to investing in the battered Dell, the resistant Hewlett-Packard (HPQ), or the triumphant device makers like Apple (AAPL) and Google (GOOG)?

More Devices and Less PCs

Mobile device sales are seen as direct competition for desktop and laptop computers. Jim Cramer recently said, “That’s the reason why notebooks and netbooks seem to be going the way of the typewriter.” Mr. Cramer seems to be exactly right in this assessment. Mobile devices are not purchased in addition to new computers, but as substitutes for new computers.

This trend was evident earlier this week when Dell’s quarterly results did not meet expectations. As a result, Dell shares plummeted over 15%. The sentiment that Apple’s gains in mobile devices are the cause of Dell’s lost revenues is common among Wall Street analysts.

Hewlett-Packard is another traditional PC maker which announced radical restructuring which will lay off as much as ten percent of the firm’s employees. These deep cuts will slash 27,000 jobs over the next two years. Though Hewlett-Packard is still the world’s largest PC maker, its dramatic reinvention of itself demonstrates that the industry is changing. HP has essentially admitted that these are drastic times which require drastic measures.To continue reading, click here.

Chimera (CIM) is loosely related to the largest mortgage REIT, Annaly Capital (NLY). A subsidiary of Annaly acts as investment advisor for Chimera. Investors might view the two as similar, with both in the mortgage REIT business – one large and one small. However, the two companies work with distinctly different business models, and the current state of the mortgage backed security – MBS – business may push the investment results of the two stocks in different directions.

Over the last year, Annaly has outperformed Chimera, although both share values have declined. The Annaly share price is off 10 percent, and the value of Chimera shares is down 28 percent. Using the most recent dividend payments, Annaly yields 13.5% and the Chimera yield is a few basis points under 15%.

The results from Annaly going forward from here will be primarily driven by interest rates. The Annaly MBS portfolio is almost entirely composed of agency – Fannie Mae, Freddie Mac and Ginnie Mae – backed securities. There is little chance of losses from mortgage defaults. The risk lies in a shrinking yield spread between what the company can earn on its mortgage portfolio and the rate the company pays to borrow money to leverage the rate earned on the portfolio. If the interest rate spread tightens, Annaly will be forced to cut the dividend and the share price will probably decline. If the spread widens, positive things will happen for shareholders. The spread has tightened in each of the three previous quarters, compared to the preceding quarter. To continue reading, click here.

General Mills (GIS) is listed in the Fortune 500 and has established itself as one of the largest multinational corporations in the world. The company has a wide portfolio of products and brands. It is also the market leader in a number of product categories. In this article, I will be analyzing the different indicators which suggest that this company would be a good option to invest in.

Even in the stock market, General Mills has been one of the best investment options. Performance indicators have shown that the company is doing quite well. This is one of the basic reasons why I have chosen this stock for my analysis. The stock has offered significant yields to its investors and is one of the safest options as well. The company is operating in an industry which has been growing steadily over the past few years. This has allowed General Mills to expand itself and explore new opportunities. They have penetrated new markets and developed new segments worldwide.

The stock is currently trading in the market at a price just above $38 per share. The price has been fluctuating but for now they are showing a steady increase. In the last 52 weeks, the stock has been trading at a price as low as $34 per share and as high as $41 per share. Market capitalization at this price is almost $25 billion while the average trading volume is close to $5 million. There are approximately 645 million shares outstanding in the market. To continue reading, click here.

The recent stagnation in global economic activity has played a pivotal role in determining the approach of prudent investors who have sought smarter, safer investments in attractive, large-cap, high-yield stocks that promise to offer higher returns on investment.

In this article, I have selected Abbott Laboratories (ABT), which is a major player in the global pharmaceutical market. With an enormous share in global markets, a diverse product portfolio, planned product launches in the coming months, a range of profitable acquisitions, a high dividend yield and favorable market sentiment in recent quarters, Abbott shows a lot of investment promise for stock traders in the current year.

Abbott Laboratories is an international pharmaceuticals and health care products company having an enormous global market share. With a diverse product portfolio, the company has managed to maintain a wide competitive moat in a predominantly volatile and highly competitive market. As a result, the company has remained largely immune to unfavorable investor sentiment that has haunted multinational companies operating in other markets segments.

At $57 a share, the current trading price of the stock is at its highest in the last 52 weeks, although a brief period of increased market instability saw the stock shortly plummet to as low as $46. Abbott has a massive market capitalization of more than $90 billion with an average trading volume of nearly $7 million.The company’s performance in the last 3 years has been promising, with a range of lucrative investments and smart acquisitions that have allowed it to enjoy a strong market position while also spearheading high returns on equity, consistent dividends, and strong operating cash flows. To continue reading, click here.

PepsiCo (NYSE: PEP) has a strong presence in the world beverage market, but unbeknownst to many is the fact that PepsiCo produces roughly half of its revenue each year through its foods division that owns popular brands such as Doritos, Quaker, Frito-Lay and Tostitos. While PepsiCo competes directly with the beverage behemoth Coca-Cola (NYSE: KO) and the smaller beverage giant of the Dr. Pepper Snapple Group, it also competes with Kraft Foods (NYSE: KFT) and Nestlé in the foods market. The company’s versatility and presence in multiple markets provides it with an economic moat that reduces the risk of investing in the company and secures long term returns for its shareholders.

PepsiCo maintains solid footing in the carbonated beverage industry and has performed well against its main rival, Coca-Cola with its seasonal Mountain Dew offerings that vary each season and its Pepsi Cola product. As consumers have begun to become more health conscious and move away from heavily sugared and carbonated soft drinks, PepsiCo has shifted its focus into its Lipton Tea and Tropicana brands, which provide an assortment of teas and juices. The Dr. Pepper Snapple Group competes with PepsiCo in the tea segment with Coca-Cola pushing back against the Tropicana line with its Minute Maid brand.

A recent probe by the Food and Drug Administration into both Minute Maid and Tropicana may end up hurting both PepsiCo and Coca-Cola, however, after traces of fungicide were found in each brand’s orange juice products. While the initial reports state that the fungicide is nontoxic, the reports themselves will continue to push health conscious consumers away due to the growing trend toward natural foods and beverages with minimal additives. The Dr. Pepper Snapple Group has been taking advantage of this shift by advertising its All Natural line of products.

Where PepsiCo has strength is in its food brands, which compete with Nestlé and Kraft Foods in grocery stores across the globe. Its snack brands also have exposure in convenience stores and gas stations as impulse buys for travelers to snack on over a long drive. PepsiCo plans to make more moves toward providing healthier food as well and already has a footing in the market with its Quaker brand of foods and snacks.

PepsiCo has excelled against its competitors in both the food and beverage markets, showing revenue growth of 13% over the last year which was slightly higher than Kraft Foods’ 11% and well above the 5.2% and 4.9% growth shown by Coca-Cola and the Dr. Pepper Snapple Group, respectively. Its acquisition of the Russian dairy and juice company, Wimm-Bill-Dann has allowed PepsiCo to make a play in Russia and Asia in both the food and beverage markets, widening its economic moat.

The acquisition added $12.6 billion to PepsiCo’s debt load, but its increase in assets has justified its liability. PepsiCo now has $75.3 billion in assets and carries $58.1 billion in liabilities. Its profits have risen over the last three years from $5.1 billion in 2008 to $5.9 billion in 2009 and $6.3 billion in 2010. In the first three quarters of 2011, PepsiCo reported net revenue of $4.9 billion, on track to continue its steady incline.

PepsiCo provides a quarterly dividend of $0.51 per share, for a total of $2.06 per share over the last four quarters. Its quarterly payout provides more opportunity to compound returns for income investors and it is currently paying out at a ratio of 0.52 with a projected yearly yield of 3.2%. I believe that despite its declining carbonated beverage sales, PepsiCo has established enough of a safety net here to protect its dividend and continue to provide returns to its shareholders.

Kraft Foods is the largest threat to PepsiCo in the food market, but I believe that PepsiCo has a broad range of products that allow it to compete and its expansion into the Russian and Asian markets will protect it against any pressure that it receives from Kraft. Nestlé has an extremely strong presence in the Chinese coffee market, which it plans to solidify even further in 2012, but I don’t believe that Nestlé poses a great threat to PepsiCo’s expansion into the Asian market due to PepsiCo’s ability to offer a variety of food products in addition to its beverages.

Over the last three years, PepsiCo stock has grown in value from $47 per share to $63 and I believe that its wide economic moat will protect it against the incursions it will undoubtedly face from the Dr. Pepper Snapple Group in the natural tea and juice market and the opposition it will meet against Nestlé when it expands into China. PepsiCo shows itself to me as a lower risk buy with long term growth potential and consistent dividend gains that can be reinvested for a stronger position in the company.

Oil is surging right now, driven wild by fear and inflation.

The first issue is Iran. The country, which is the world’s third largest exporter, cut off exports to Great Britain and France. These two countries may not account for much of Iran’s revenue in and of themselves, but European countries do account for roughly 18% of the country’s oil exports and there is talk that Iran halt shipment to other countries in the Eurozone going forward. In fairness, half of Iran’s revenues come from oil; if it continues to shut countries out it will have to bear the burden on its bottom line.

An embargo planned for July 1 would like have increased oil prices anyway, but what we are dealing with here is a matter of perception – and perception, especially fearful perception, has been known to have a disastrous effect on stock prices, leading companies to be priced higher or lower on trading momentum rather than anything to do with the stock itself. The second issue is the US dollar. When the dollar goes lower, like it is now, oil prices start to swell. There is also the issue of the economy. Despite all the doom and gloom in the media (like George Soros saying in January, “The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”), the economy has been showing pockets of strength. In any case, these are the facts and oil prices reflect them.

Billionaire oilman turned hedge fund manager T. Boone Pickens is saying that oil will end up trading at an average of $110 to $120 this year. He’s probably right. Benchmark oil prices are over $109 a barrel, while Benchmark crude has increased by 9 percent year-to-date in 2012. This will drive up the price of gas at the pump, obviously, but it will also push oil company stock prices higher.

The question is, where will your money earn the most profit?

ExxonMobil (NYSE: XOM) is one option. The company is one of the leaders in the major oil and gas industry and it has plenty of upside. Exxon recently traded for $87.34 a share on a mean one-year target estimate of $93. If analysts are right, the stock will return roughly 6.5% in the next year, plus another 2.20% for its $1.88 dividend – that’s an upside of roughly 8.7%. Exxon is also priced low at 9.72 times its forward earnings, and it is one of the best run companies in the world, which is saying something given its size. Management runs the company well but they also look after shareholders – in terms of dividends, stock repurchases, etc. One of Exxon’s biggest advantages is that it takes a long-term view of everything it does – that is part of the reason it has been able to grow as large as it has.

But, the company isn’t coming up all roses. Analysts predict that Exxon’s earnings will fall -2% this year, with most of the loss coming in the current quarter. They estimate that its earnings will increase by 9.0% next year, all in all producing an earnings increase of 7.36% on average per annum over the next five years. That’s less than its industry, which is expected to grow 51.20% this quarter, 26.20% this year and 16.19% over the next five years. That’s even less than the S&P, which is predicting to grow by 10.49% a year on average over the next five years.

So, why the long face? One reason is that Exxon has a comparatively large exposure to natural gas and, right now, natural gas prices are at the lowest they have been in years. However, that may play out okay if the company wasn’t so bullish about natural gas. Right now, most companies in the oil and gas industry are going in the opposite direction, pushing their extra cash flows into the activities that would earn them the most – namely crude. They are cutting back on natural gas activities while Exxon has increased its focus and actually ramped up plans to increase production. In its annual report, Exxon announced that it would continue investing $37 billion annually for the next several years. Even if Exxon is right in the long term, until then its focus on natural gas is going to be like a headwind, preventing it from achieving maximum shareholder value.

In addition, for as low as Exxon is priced, its rivals are priced even lower. ConocoPhillips  (NYSE: COP) is priced at 8.68 times its forward earnings and pays a higher dividend ($2.64 or 3.60% yield at its recent price of $75.95), but there is a trade off. ConocoPhillips also has an earnings growth estimate of just 4.41% a year on average over the next five years and it doesn’t have the upside – it has a mean one-year target estimate of $78.98.

Competitor Chevron (NYSE: CVX) has the greatest predicted upside of the three – it recently traded at $109.08 a share on a mean one-year target estimate of $124.43 – and it pays a decent, $3.24 dividend (3.00% yield). It also has the lowest forward P/E of the three; it is priced at just 8.26 times its future earnings. However, Chevron also has the lowest predicted earnings growth. Analysts anticipate the company’s earnings will grow by an average of just 4.35% a year for the next five years.

So, the question is whether Exxon is worth the premium pricing. I don’t think so, at least not for the shorter term investor. It may be a good play in the long term, as in over five years, but I prefer to put my money in stocks that have plenty of upside and stable growth, like Chevron. Exxon could be the big winner once natural gas goes up, but I say that investors would do better to bet on Chevron, realize the short-term gain, then sell and invest in Exxon – there is time for both plays. Alternatively, conservative investors could hedge one against the other. As natural gas prices go up, so will Exxon; as oil prices go up, Chevron will be the winner. It’s a win-win.