For the past several years, Sprint Nextel (S) has endured some difficult financial circumstances which, despite its best efforts, have resulted in continued losses entering the second quarter of 2012. Sprint reported a loss of $863 million in the first quarter of 2012, which comes on the heels of its dismal 2011 that saw it lose a reported $1.3 billion.

As a result of the continued losses sustained by Sprint, its share price dropped from its 52 week high of $6 in June, 2011 all the way down to $2 in December, 2011.

Although it may be easy to discount Sprint as a lost cause with no substantial upside, recent news and the rise in Sprint’s customer base have begun to show that it is on the rebound. As a result its share price, after finding its floor during the middle of 2011, has started to rise.

Despite the first quarter losses reported by Sprint, there was also an abundance of good news including a reported 5% rise in growth for the first quarter of 2012. This growth was the result of the additional 1.1 million net new customers that joined the Sprint network in the first quarter of 2012.

This is great news for Sprint as its figures surpassed AT&T (T), which reported 736,000 net new customers for the first quarter and Verizon (VZ), which reported 734,000 net new customers for the same time period.

A significant factor to Sprint’s substantial rise in new customers was its entry into the Apple (AAPL) iPhone market. 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.

Has automaker General Motors (NYSE: GM) finally recovered from its near extinction in the throes of the Great Recession and become a good buy? North American operations have been growing strongly despite the poor economic environment as the public has embraced a new generation of vehicles. Still, GM is a turnaround in progress. I looked at the companies fundamentals as well as its market outlook to see if it is time to move General Motors to the buy category.

The company has a recent share price of $27 which places it in the middle of its $19.05-$36.15 52-week trading range. It has a reported earnings per share of $4.57 which translates to a tiny 5.98 price to earnings ratio. The share value is definitely at depressed levels, with its price per sales of 0.46 and a price to book of 1.24. More enticing is the book value per share which comes out to be $21.96.

Its February 16 earnings announcement for 4th quarter 2011 showed healthy North American operations growth with those divisions pumping out $23.1 billion in revenues for $1.5 billion in pretax earnings, a cool $1 billion increase in year over year numbers. But despite those exciting numbers, the overall profit was only $0.39 a share, a number which missed analyst predictions by $0.02 for in fact North America was fine but the rest of the global operations was a quagmire.

The big loser was General Motor’s European Operation where the company bled over $700 million in losses. The Opel AG Division in particular was staggered by a number of restructuring costs and ended up in the red to the tune of $600 million by itself. GM has come out to say that it is moving to resolve the problems, but I cannot see how any significant progress will be made while the Euro credit crisis plays out, and the while some observers think 2012 will see a rebound I expect 2013 to be the earliest the European operations will come anywhere near to breaking even, or showing a small profit.

Meanwhile South American operations continue to underperform with a $200 million quarter loss. There is more of a vision for a positive future here though. General Motors’ product mix has been aging here and a number of new models are starting to hit show rooms and if the reaction is half as good as that seen in the North American run outs there should be some excellent 2012 results in Latin America.

Other international results, especially in China, have been positive, with earnings at over $400 million before taxes, a $100 million improvement year over year.

Taken together there were high points and lows, but management was only able to squeeze out a return on assets of a miserable 2.56%. Take that with the overall disappointing earnings report and it is little wonder that investors are skeptical. Worse, General Motors is still struggling with its pension plans legacy. Those pension plans are underfunded to a tune of around $24.5 billion, still rising in 2011 year over year despite agreements between the company and its union to mitigate the damage.

So, General Motors has an extremely cheap price with lots of upside, but it still has to show it can find a way through the many problems it has to turn the company to consistent profitability. It has to contend with Ford (NYSE: F) not only for customers but for investors too. The rival has a recent share price near $13 with a price to earnings ratio of 6.70 – similarly low priced to General Motors and it too has seen an underperforming European  division. But Ford has shown much more consistent improvement and in fact profits have stabilized so much that Ford reinitiated paying a dividend which now pays a 1.24% yield.

Of course the opposite end of the competitor scale is Toyota (NYSE: TM) which has a price near $84 with a price to earnings ratio of 41.70 – priced like an emerging tech stock. That is because Toyota’s earnings were shattered due to the Japanese earthquake fallout of 2011 and is only now starting to recover its production capacity. The problem is with the current price most of the potential growth is already priced into the stock and I see no opportunity here.

With current valuations General Motors is at an attractive price point. I have no doubt that the company will sort out its issues and return to a more aggressive profitability. My doubts are the timing, and I expect there will be more quarters of disappointment before General Motor’s turnaround is complete. I would want to watch a little longer before entering a position but investors with lots of patience probably can buy now. However, my preference is its competitor Ford, which has an almost identical price valuation, but is much farther along in establishing profits and dealing with its own problem areas.

The Chinese Internet stocks started out 2012 with a nice rally. The four stocks discussed here produced share price gains of 20% to 40% in the first six weeks of the year. However, the price gains were – in general – just a break in longer term down trends as these companies either try to maintain levels of profit growth to justify the share valuations or figure out how to grow profits along with growing revenues. Traders looking for short sale prospects should check if their analysis match the reasons below why these stocks are better short candidates than buy long investments.

Youku, Inc. (NYSE: YOKU) Youku is the Chinese answer to YouTube or Hulu in the U.S., offering Internet television and video services. Youku was a hot IPO in December of 2010 and the shares traded as high as $70 in early 2011. Then reality set in. The company has posted net losses every quarter for the last four and is expected to lose 38 cents per share when the 2011 fourth quarter results are released, putting the loss for the full year at a loss of $1.52 per share. The Wall Street analysts have been slashing their 2012 expectations: Ninety days ago the consensus estimate for 2012 was a loss of 10 cents per share. Currently the consensus is a loss of $1.42 with the most pessimistic analyst predicting a loss of $2.27. The most optimistic analyst expects a measly 15 cents per share profit. Price rallies on Youku, like the recent runup above $20 to $24 are short selling opportunities. Cover a short position at $15 and avoid being short during an earnings release announcement.

Sina Corporation (NASDAQ: SINA) Sina is the owner of a Chinese micro-blogging weibo website. Micro-blogging is a growth craze in China and Sina reported 250 million users at the end of 2011 and was adding 20 million per month. Unfortunately, Sina has suffered from the curse of social media companies as a business: How to generate profits in the face of growing expenses to support the growing number of subscribers? Sina earned $1.74 per share in 2010, saw usership increase exponentially in 2011 and the consensus earnings estimate for 2011 is 94 cents per share, a 50% decline. The company reports 2011 fourth quarter results on February 27. The earnings estimate for the quarter is a profit of 21 cents per share, less than half the 46 cents earned a year earlier. The Wall Street analysts as a group have a little more optimism about 2012, forecasting earnings of $1.41. Over the last several months, the consensus earnings have been declining and Sina is trading at 44 times very iffy forward earnings. It is hard to see a good reason to be long this stock, so short it.

Renren, Inc. (NYSE: RENN) Renren is the Chinese answer to Facebook. The company went public in May 2011 and after the $14 IPO the shares peaked at $21.93 on the IPO trading day. The share value has been mostly downhill ever since. The share price dropped below $10 in early August 2011. Since the end of summer the stock’s trading range has been $3.20 to $7. The share price popped 50% – from $4 to $6 – when the Facebook pending IPO was announced. As the forerunner to the Facebook IPO, Renren was not profitable who it went public, but was expected to soon turn profitable, after raking in that $700 million of IPO money. For 2012, the consensus earnings estimate is a loss of 7 cents per share with the most optimistic analyst forecasting a 4 cent profit. Sell Renren short above $5 and cover at $3.50.

Baidu.com, Inc. (NASDAQ: BIDU) Baidu is probably the most dangerous short selling candidate listed here. Baidu is the Chinese version of Google (NASDAQ: GOOG), receiving 75 percent of the country’s search results and is a large cap stock itself with a $47 billion market cap. Baidu operating profits were up 91% in 2011 and net income for the fourth quarter increased by 77%. The Wall Street consensus estimate has net income growing by 50% in 2012. So what are the reasons to short sell this growth stock?

• The stock is valued based on both the company’s and the China economy projected growth rates. Any stumble in either of these growth projections will lead to a price tumble.
• Baidu earns all of its revenue and profits in the Chinese currency with no viable outlet to invest that currency or earn revenue outside of the China economy. If the Yen is devalued, the Baidu share value will be hammered.

To short Baidu a trader can either wait for some bad news then ride the share price down until it bottoms or aggressively try to predict a slowing of the growth results. Keep those stops set tight.

These Chinese Internet stocks have mostly received positive press and share value forecasts over the recent past. Yet they all have vulnerabilities which could result in profits for short sellers. Traders who short sell often must go against the Wall Street crowd, which has a vested interest in stocks generally going up in value. As a final point, foreign stocks from a specific country often move in the same direction together. If a large company such as Baidu starts to lose value, many other Chinese tech stocks will follow along as investors sell of the country as a whole.

The recent volatility in the markets and lack of confidence about future growth are making dividend stocks attractive. The reason why stems from the belief that these kinds of companies can provide income and earnings stability. To determine the strongest firms for 2012 requires examining Altria (MO), Partner Communication (PTNR), Hudson City Bancorp (HCBK) Energy Transfer Equity LP (ETE) and AT&T (T). Therefore, use this information as a starting point for all future research.

Altria

Altria yields 5.70% and has a payout ratio of .82. The firm has a forward price earnings ratio of 13.18 and earnings have been rising consistently over the last year (going from $.44 to $.56). This is helping to fuel bottom line growth of 21.16 % in profits. There is a current ratio of 1.49. Moreover, the stock is trading in a bullish technical pattern with shares trading above the 200 day moving average of $26.55.

These factors are showing how the dividend rate for Altria will increase in the future. The firm is attractively valued and has above average rates of growth. While the sale of tobacco products, alcohol and fuel hedging strategies are providing consistency in earnings. The majority of profits are paid out to shareholders in the form of a dividend. This has pushed the stock price higher (which is protecting Altria against inflation and sudden changes in the economy).

As a result, this stock is an ideal purchase for the dividend. In the future, yields will more than likely increase from strong profit margins, a sound business model, ample liquidity and stable earnings.To continue reading, click here.