WSO is the largest distributor of air conditioning, heating, and refrigeration equipment, as well as related parts and supplies (HVAC/R), in the United States.

In our view, the company has plenty of room for growth. With the industry size approximated at $26 billion and annual growth set to grow well above 3%, Watsco represents a very small portion of the overall pie (8%). There are plenty of acquisition opportunities for the company as the HVAC/R distribution industry contains over 1,300 companies.

Apart from growth through acquisitions, Watsco aims to increase sales per location and gain market share by boosting its product offering.

The company recently formed a joint-venture with Carrier Corporation to distribute Carrier, Bryant and Payne products throughout the U.S. Sunbelt, Latin America and the Caribbean. This joint-venture not only adds significant new product groups to the company's sales mix, but also marks its entry into international markets with the addition of the Latin American and Caribbean sales operations of Carrier.

Moreover, Watsco is offering private label products to customers looking for exceptional value. We believe Watsco is becoming a one-stop shop for contractors and dealers.

With a healthy cash generation ability (operating cash flow of $94.1 million and free cash flow of $90.5 million over the last 12 months) and a strong balance sheet, Watsco has adequate financial flexibility in invest further in business expansion.

Company Description

Dr. Pepper Snapple Group Inc. owns, bottles and distributes beverages in the United States, Canada, Mexico and the Caribbean. The group was spun off from Cadbury in 2008 and has a market cap of $6.81 billion.

Recession or not, consumers love sugary beverages. So in spite of the weak consumer environment pervading the economy, Dr. Pepper Snapple Group reported strong second-quarter earnings on Aug 14 that were ahead of expectations.

Second-Quarter Results

Sales were down a bit from last year to $1.5 billion, but earnings came in 12 cents ahead of the Zacks Consensus Estimate at 62 cents per share.

The company noted that a few key elements helped its results, including gross margins increasing to 59.8% from 55.1% last year and operating margins growing to 20.1% from 17.4%.

Paying Down Debt

Dr. Pepper Snapple also added that it plans to pay $475 million in debt in 2009, a $75 million increase from previous estimates.

Estimates

Estimates have advanced since word of the good quarter, with the current-year estimate adding 19 cents and climbing to $1.96 per share.

Valuation

Based upon this earnings projection, this stock has a P/E multiple of 14X, a discount to the overall market.

The Chart

Shares of DPS have been on fire since bottoming out below $12 in early March, having since topped the $27 mark. Take a look below.

Zacks Investment Research

Revenue was $1,124.0 million, a decrease of 15.6% from $1,332.0 million in the year-ago quarter. This decline in revenue can be attributed to the overall downturn in the global economy and its impact on capital spending, particularly in the financial services and retail and hospitality industries. Revenue for the quarter exceeded our estimate of $1080.0 million.

The Americas reported revenues of $505.0 million, a decrease of 13.0% from $578.0 million in the year-ago quarter. This decrease was primarily due to lower product sales to customers in the financial services and retail and hospitality industries in the United States, the Caribbean, and Latin America. Revenue was also negatively impacted by 1.0% due to foreign currency translation.

In the Europe-Middle East-Africa (EMEA) region, revenues were $384.0 million, a decrease of 25.0% from $513.0 million in the year-ago quarter. This can be attributed to declines in product sales to customers in the financial services and retail and hospitality industries. Revenue of this region was also negatively impacted by 7.0% due to foreign currency translation.

The Asia-Pacific-Japan (APJ) region reported revenues of $235.0 million, a decrease of 2.0% from $241.0 million in the year-ago quarter. This decline can be attributed to the negative impact of foreign currency translation of 4.0%. Excluding the impact of currency translation, sales increased to customers in the retail and hospitality industry in Southern Asia Pacific and Japan, offsetting declines in sales to customers in the financial services industry.

GAAP gross margin for the quarter was 20.4%, versus 21.5% in the year-ago quarter. Gross margin was negatively impacted as cost of production declined at a lower rate than revenue.

Income from operations was $39.0 million in the second quarter and included $39.0 million of pension expense. This compares to $62.0 million of income from operations in the second quarter of 2008, which included $7.0 million of pension expense and $32.0 million of costs related to organizational realignment activities.

Excluding these items and pension expense, non-GAAP income from operations decreased 22.7% to $78.0 million in the second quarter, compared to $101.0 million in the second quarter of 2008.

Income from continuing operations was $23.0 million, or $0.14 per diluted share, for the quarter, versus income from continuing operations of $45.0 million, or $0.26 per diluted share, in the year-ago quarter.

Excluding special items, non-GAAP income from continuing operations were $0.13 per diluted share, versus $0.40 per diluted share in the year-ago quarter. Including the results of discontinued operations, net of tax, the company reported GAAP net income of $23.0 million, or $0.14 per diluted share, versus net income of $44.0 million, or $0.26 per diluted share, in the year-ago quarter.

The company recorded non-GAAP EPS of $0.13 in the second quarter, compared to $0.40 in the year ago quarter.

NCR generated $27.0 million of cash from operating activities during, compared to $69.0 million in the year-ago period. Capital expenditures of $36.0 million in the quarter were unchanged from $36.0 million in the year-ago period. NCR ended the second quarter with $407.0 million in cash and cash equivalents, compared to a $717.0 million balance as of Mar 31.

NCR expects Fiscal 2009 revenue to decline 5.0% to 10.0% from 2008 levels, and EPS of $0.60 to $0.75.

The bookings will start from October 2009 for any of the 12 Sandals Resorts or 4 Beaches Family Resorts. Destination weddings now represent 31% of all weddings, up from the previous range of 10% to 12%.

In addition, Martha Stewart will bring its craft expertise to the guests at resorts and beaches. Martha Stewart's crafts business continues to be robust, driven by ongoing distribution expansion, integrated marketing initiatives and an ever-improving line-up of products.

The partnership provides a boost to the Martha Stewart’s growing weddings franchise, which began in 1994 with the launch of Martha Stewart Weddings magazine. Since then, the company has gained a significant position in the category.

The company is attempting to grab a bigger slice of the wedding-related market, and has also acquired a 40% stake in WeddingWire, which helps couples plan and manage their wedding on marthastewart.com.

Martha Stewart is a leading creator of original how-to content and related products for homemakers and other consumers. The company supplies creative domestic solutions through its published materials, including magazines, books, television programs, and the Internet.

The company markets primarily to homemakers in the 25–54 age bracket. Topics covered include the home, weddings, babies, cooking, housekeeping, entertaining, holidays, gardening and crafts.

We maintain a Hold recommendation on the stock.

The company’s total revenue was down 20.6% driven by weak demand due to economic conditions, decline in new housing, and a late start to the cooling season. Sales in the quarter were also impacted by lower pricing for certain products that are sensitive to changes in commodity prices.

Second quarter’s revenue reflects a 15% decline in sales of air conditioning and heating (HVAC) equipment, a 28% decline in sales of other HVAC products and a 15% decline in sales of refrigeration products.

The rapid decline in housing starts is being a drag on overall unit demand. We expect the housing market to remain challenging for the next couple of quarters. Thus, the company depends more on the replacement market for its top-line growth.

It is estimated that approximately 80% of the U.S. industry sales are tied to the replacement market and are expected to increase as more energy-efficient units replace old units over the next decade. However, we believe that the replacement market cannot fully offset the rapid deterioration in the new home market over the near-term.

The company recently completed its previously announced joint-venture, named Carrier Enterprises LLC, with Carrier Corporation. This deal fits with the company’s strategy of increasing its market share through acquisitions and by boosting its product offering.

The joint-venture with Carrier not only adds significant new product groups to the company's sales mix, but also marks Watsco's entry into international markets with the addition of the Latin American and Caribbean sales operations of Carrier Enterprises.

Watsco, Inc. (WSO) said that it completed its previously announced joint-venture, named Carrier Enterprises LLC, with Carrier Corporation. Watsco is the largest distributor of air conditioning, heating, and refrigeration equipment as well as related parts and supplies (HVAC/R) in the United States. Carrier, a unit of United Technologies Corp., provides heating, air-conditioning and refrigeration solutions with operations in more than 170 countries.
 
Watsco owns 60% of the joint venture with options to purchase an additional 20% from Carrier in future years. Carrier Enterprises will operate 110 locations in 20 states and Puerto Rico, the Caribbean and Latin America and serve over 19,000 air conditioning and heating contractors. Carrier is contributing 95 locations in the U.S. Sunbelt and Puerto Rico and the export division located in Miami, Florida, while Watsco is contributing 15 locations in 8 states. The operations will sell Carrier, Bryant and Payne-branded residential and light-commercial air conditioning and heating equipment (80% of sales) and a complementary array of parts and supplies (20% of sales).
 
Watsco targets increasing its market share through acquisitions and by boosting its product offering. The joint-venture with Carrier will add significant new product groups to the company's sales mix. Also, this transaction will mark Watsco's entry into international markets with the addition of the Latin American and Caribbean sales operations of Carrier Enterprises.
 
The company estimates that approximately 80% of the U.S. industry sales are tied to the replacement market and are expected to increase as more energy-efficient units replace old units over the next decade. Watsco will benefit from the new economic stimulus legislation, which provides tax credits to homeowners for adding high-efficiency air conditioners or furnaces, covering 30% of the costs up to a total of $1,500. According to the management, this tax credit, along with local utility rebates currently offered to consumers for upgrading their air conditioning systems, provides Watsco another opportunity to enhance the sales penetration of high-efficiency systems.
 
Given its wide distribution network and broad product offering, we believe Watsco is well positioned to take advantage of the growth potential in the replacement market for HVAC products.
 

Company Description

Dr. Pepper Snapple Group manufactures 50 beverage brands for the North America and the Caribbean markets. Its brands include iconic names such as Dr. Pepper, Snapple, Sunkist soda, 7UP, A&W, Crush, Canada Dry, Mott's, Squirt and Hawaiian Punch.

Net Sales Rose 4% in the First Quarter

On May 12, Dr. Pepper Snapple Group reported first-quarter results that surprised on estimates by 23.33%, or 7 cents a share.

Adjusted earnings per share were 37 cents, which excluded net gains associated with the Hansen contract termination settlement and the sale of distribution rights. Analysts expected just 30 cents per share.

Excluding the loss of Hansen product distribution, sales climbed 4% as volume growth rose 6%. Lower commodity and fuel costs helped during the quarter.

Carbonated soft drinks and value juices performed well in the quarter, fueled by gains in Crush and Hawaiian Punch. Dr. Pepper continued to be solid. The premium priced drinks, such as Snapple, were still pressured due to the economic conditions.

2009 Outlook

Given the economic conditions, Dr. Pepper Snapple still expects 2009 sales to be down 2% to 4%. Excluding the loss of Hansen product distribution, it expects sales to grow 2% to 4%.

The company raised its 2009 forecast. Excluding adjustments, EPS should be in the range of $1.70 to $1.78 compared to the previous guidance of $1.59 to $1.67.

2009 Consensus Estimates Rise

Given the surprise on estimates in the first quarter and the revision to 2009 guidance, it's not surprising that 7 out of 7 covering analysts have raised estimates for the full-year to a consensus of $1.77 per share from $1.67 just 30 days ago.

Value Fundamentals

Dr. Pepper Snapple Group (DPS) is a Zacks #1 Rank (strong buy) stock.

It is trading with P/E ratio of just 12.7x forward earnings. The company has a price-to-book of 2.10. DPS has a solid 1-year return on equity (ROE) of 15.51%.

Zacks Investment Research

PepsiAmericas, Inc (PAS) just beat Wall Street expectations once again and shares are at a 52-week high.

Company Description

PepsiAmericas, Inc produces, distributes, and markets soft drinks under several well know PepsiCo brands, including Pepsi, Mountain Dew, and 7UP. The company operates across the United States, Europe, and the Caribbean. PepsiAmericas is head quartered in Minneapolis, has over 20,000 full-time employees, and carries a market cap of $3 billion.

Beat the Street

PepsiAmericas beat Wall Street's expectations for its first-quarter earnings when it announced 20 cents per share on April 29. The consensus heading into the report was 16 cents.

This was the company's fourth consecutive earnings surprise. On average PepsiAmericas has beat expectations by 14% over the past year.

Estimates Bubbling

Since the earnings report 7 of the 9 covering analysts have raised their estimates. The consensus for 2009 is now $1.87, up from $1.79. Estimates for 2010 are up 10 cents and average $2.02.

The Chart

Shares of PAS gapped up after the latest earnings report and went on to set new 52-week highs. Take a look at the chart below.

Read the August 27th Feature Here

Last Week's Aggressive Growth Zacks Rank Buy Stocks

BWAY Holding Co. (BWY) shares have gone on to set a new 52-week high following the latest earnings report and estimates revisions. Read Full Article.

HMS Holdings Corp. (HMSY) released another earnings surprise followed by bullish comments from its CEO. Read Full Article.

Ralcorp Holdings, Inc. (RAH) is growing rapidly and continues to acquire other brands. Shares are surging following the latest earnings report. Read Full Article.

OSI Systems, Inc. (OSIS) shares are surging after a consolidation as the company headed into its latest earnings announcement. Read Full Article. Zacks Investment Research

Company Description

Wyndham Worldwide is one of the world's largest hospitality providers. The company operates more than 7,000 hotels in 67 countries on 6 continents. It also has a network of over 150 vacation ownership resorts that services 830,000 owners in North America, the Caribbean and the South Pacific.

Wyndham Surprised for the 4th Consecutive Quarter

On Apr 29, Wyndham Worldwide reported first quarter results that beat analysts' estimates by 17.14%, or 6 cents per share. Adjusted net income rose 19% to $74 million, or 41 cents per share, compared to $62 million, or 35 cents, in the year ago period. Analysts expected 35 cents.

Revenue fell by 11%, however, to $901 million, mainly due to unfavorable foreign currency effects as the U.S. dollar strengthened in its vacation exchange and rental business. Vacation rental revenue fell 19% from the year ago quarter.

2009 Outlook Reaffirmed

Wyndham is optimistic about 2009 despite the difficult economic conditions encountered in the first quarter.

"Adjusted EPS was up 17% from last year, and the Company generated net cash from operating activities of approximately $210 million," said Stephen P. Holmes, Chairman and CEO.

"These results reflect the durability of our businesses and the resilience of our fee-for-service business models, as well as strong execution and continued cost discipline," he said.

The company reaffirmed 2009 guidance of revenue between $3.5 and $3.9 billion.

Second-quarter guidance is expected in the range of 36 to 41 cents. Full-year adjusted EPS was reaffirmed and was forecast between $1.61 and $1.85.

Consensus Estimates Rise

Given the company's confirmation of previous guidance, estimates for the second quarter moved higher by 2 cents to 38 cents, or in the middle of the company's guidance range.

For the full year, estimates jumped 8.2% to $1.72 from $1.59 per share with 6 out of 6 covering analysts raising in the last week. This puts the consensus squarely in the middle of the company's guidance range.

Value Fundamentals

Wyndham Worldwide is a Zacks #1 Rank (strong buy) stock. It has an attractive price-to-earnings ratio of 8.2. Its price-to-book is 0.97. The company has an average 5-year return on equity (ROE) of 10.80%. Additionally, the company pays a dividend with a current yield of 1.80%.

Zacks Investment Research

Shares of the company are up more than 3% today, though volumes are lower than usual.

The Canadian energy distributor expects to receive after-tax proceeds of 535.0 million Canadian dollars ($420.8 million) from the sale. The money will be used to fund operations as well as reduce debt.

CEO Patrick D. Daniel said that the funds will have a neutral impact on 2009 earnings. However, he further added that it will be accretive in subsequent years and enable the company achieve 10% plus growth through 2012.

The OCENSA pipeline has a capacity to transport 525,000 barrels per day of crude oil and connects Columbia to the Caribbean coast.

Enbridge is a Zacks #2 Rank ("Buy") stock.

Hedge Funds in the Cayman Islands

• The number of hedge funds registered with the Cayman Islands Monetary Authority (CIMA) has increased by approximately 23% over those registered in the first quarter of 2004. More than 80 per cent of the world’s 8,000-plus hedge funds are registered with CIMA.

• Great, in depth overview to hedge funds in the Cayman Islands.

• According to a number of reports, one of the Cayman Islands’ leading financial products, hedge funds, is not as lucrative as many have supposed, but its popularity remains at an all time high. Noted for the risky and exotic nature of their investments, hedge funds actually performed worse last year than the much more conservative Standard & Poor’s 500 Index.

• Information about the Fourth Annual Cayman Islands Open Your Heart to the Children Benefit, an event by the Hedge Fund Care organization.

• Turmoil caused by the US financial meltdown will likely effect Cayman’s hedge fund industry. Leader of Government Business Kurt Tibbetts acknowledged at the Cabinet press briefing Friday that Cayman’s economy “does not operate in isolation and that we are not immune from the global volatility and uncertainty”.

• On Feb. 27, the world's hedge funds, through their manipulation and miscalculation of the yen carry-trade, led to a violent unwinding of that carry-trade, which triggered disintegration of the world financial structure. But hedge funds had already bled the major international commercial banks and corporations into absolute bankruptcy. And where are those hedge funds? The Cayman Islands.

• A few days ago, the Cayman Islands Monetary Authority published their "Investments Statistical Digest", which is a summary of the "e-reports" that all Cayman hedge funds now have to submit to the local regulator. The statistics cover 5,052 Cayman domiciled hedge funds which filed as of December 31, 2006. This represents 81% of the funds which were due to publish their annual returns as of that date.

• Great bulletin that includes a piece about hedge funds in the Cayman Islands and their use of Chapter 15 of the Bankruptcy Code.

• When it comes to hedge funds, the Cayman Islands are a true heavyweight in the offshore world. Paul Scrivener, joint head of the investment funds group at Solomon Harris explains why and outlines what a hedge fund manager can expect when setting up his offshore fund here.

• The number of hedge funds registered in the Cayman Islands exceeded 10,000 in June for the first time, another indication that the hedge fund industry continues to grow despite market turmoil, Cayman authorities said on Monday. At the end of June, there were 10,037 hedge funds and fund-of-hedge-funds registered in the offshore tax haven, up from 9,413 at the end of 2007.

• The Cayman Islands have become the leading offshore jurisdiction in the funds industry and are currently home to more than 6,500 registered open-ended funds and many unregulated closed-ended or exempted funds. The majority of such registered funds are hedge funds intended for experienced investors and it has recently been reported that an estimated 80 per cent of the world’s hedge funds are registered in the Cayman Islands.

• Recent second quarter figures from the Cayman Islands Monetary Authority (CIMA), have confirmed the achievement of a key milestone by the Cayman Islands financial services industry, with more than 10,000 investment funds currently registered in the jurisdiction.

• Great document regarding the regulation of hedge funds in the Cayman Islands.

• More than 1,100 new hedge funds were created in the Cayman Islands in 2004, marking a 100 percent increase over the previous reporting period. For the first time, a surge in hedge fund interest from Asian investors was demonstrated, according to a new analysis by Walkers, the global offshore law firm of choice for companies, financial organizations, and international law firms.

• There has been a great deal of debate in the US and England recently as to whether hedge funds should be subject to increased regulation. From a Cayman Islands perspective, the success of the domicile in attracting hedge funds1 and the limited number of failures bears testimony to the effectiveness of the current regulatory system.

• Late In 2007, the Cayman Islands' hedge fund industry celebrated a milestone: the registration of the 10,000th fund to be authorized by the Cayman Islands Monetary Authority. But the celebration may have been premature, since as of Feb. 1, hedge funds physically located in the United States have had to be registered with the Securities and Exchange Commission, regardless of where the actual fund is domiciled.

• Hedge funds, already dodging calls for more oversight, now have a new nemesis: British tax cops. In a clear sign that United Kingdom tax authorities are keen to crack down on the tax practices of high-rolling hedge funds, GLG Partners Services Ltd., a Cayman Islands entity that distributes hedge funds run by GLG Partners LP, has settled a probe by British tax officials, people familiar with the situation said.

• The world’s most popular hedge fund domicile continues to grow this year, but one prominent hedge fund manager does not expect it to last. The number of hedge funds registered in the Cayman Islands rose 6.6% in the first half, with 624 funds and funds of hedge funds registering in the tax haven since the end of December.

• William Grayson, the president of EGM Capital, a hedge fund firm in San Francisco, has never set foot on the Cayman Islands, but he knows that sun-baked Caribbean haven quite well. That is because he set up one of his funds in the Caymans, where lucrative tax breaks and fabled financial secrecy have made this British territory a magnet for hedge fund managers.

• The Cayman Islands is successfully positioning itself as the hub for hedge funds, with the number of domiciled on the offshore financial center rising to 7,106 in 2005, a 32% rise from 2003.

• Great overview, in depth analysis of everything related to the Cayman Island hedge fund market.
  

Related to Cayman Island Hedge Fund Guide | Hedge Funds in the Cayman Islands:

• Geographical Hedge Fund Guides
• Hedge Fund Employment Guide
• Financial Certification
• Hedge Fund Forum
• Prime Brokers
• Hedge Fund Software
• Investment Book
• Hedge Fund Terms and Definitions
• Commercial Real Estate Brokers
• Hedge Fund Database

Collective Brands Inc. (PSS) is a national shoe retailer that is the largest non-athletic footwear company in the Western Hemisphere. The company has three divisions: Payless Shoesource, Stride Rite and Collective Licensing International.

Payless ShoeSource was founded in 1956 and has 4,600 retail stores in all 50 U.S. states, as well as in Puerto Rico, Guam, Saipan, the U.S. Virgin Islands, Canada, Central America, the Caribbean, and South America.

Payless' brands include Dexter, Disney, Champion and designer collections: Abaeté for Payless, Lela Rose for Payless and alice + olivia for Payless. The company now has a footwear and accessory design team in New York City. The goal of its designer collection is to democratize footwear fashion.

The Stride Rite Corporation sells high-quality children's footwear primarily through 300 Stride Rite stores. Brands include Keds, Sperry TopSider, Saucony, and Tommy Hilfiger footwear.

Collective Licensing International supports youth and lifestyle brands such as Airwalk, Vision Street Wear, Sims, Dukes, Rage and Skate Attack.

The company recently showed its Payless spring designer footwear line at New York's Fashion Week. The collection will be in stores in Feb 2009 and all items will average under $45. Its fall collection is currently in stores.

The Adidas Lawsuit

Collective Brands and Adidas are embroiled in a trademark infringement case in Oregon with Adidas about its sneakers. Adidas claims the 2 or 4 stripe sneakers are too similar to Adidas' trademarked 3 stripe sneakers.

The jury found in favor of Adidas but, on Sep 12, the Court lowered the award by 75% to $64.4 million. Collective Brands is appealing the original decision.

Collective Brands Beats Wall Street Estimates for 2Q by 86.21%

On Sep 3, Collective Brands reported its second quarter 2008 earnings and blew away estimates by 25 cents per share. Excluding litigation items, earnings increased 42% to $33.6 million, or 54 cents per share, from $24.9 million, or 38 cents per share. Analysts expected 29 cents.

Sales rose 30.4% to $911.7 million, but that included the addition of Stride Rite. Comparable store sales, including Payless Latin America, rose 0.2%. The company attributed the increase in sales to higher retail prices which offset lower unit volume.

Collective Brands Maintains Long Term Growth Targets

On Sep 23, the company held an analyst conference. The company's forward outlook is strong. The company is focused on international growth. It will close 250 domestic Payless ShoeSource stores over the next 5 years and open 200 additional stores in Latin America. International sales as a percentage of business unit total sales will grow at a 3-year compounded annual growth rate of 9% for Payless and 13% at Stride Rite.

In the near term, the company sees comparable store sales growth below long-term growth rates. But over the long term, it sees a growth rate in the mid-teens. During this rocky period, Collective Brands will be pruning inventory and controlling expenses.

Average inventory in Payless stores was down 2.4% in the second quarter versus the year ago period. Payless aged inventory was also lower than last year reflecting a cleaner inventory position.

Consensus Estimates Rise for the Third Quarter and the Full Year

Covering analysts responded to the company's bullish earnings report and outlook by raising estimates in the last 30 days. Third quarter estimates rose 3 cents to 42 cents per share. Full year estimates jumped 15% to $1.33 from $1.13.

Analysts expect 2008 year over year earnings growth of 12.29%.

Value Fundamentals

Collective Brands has a forward P/E of 12.87. Its price-to-book is 1.65. The company has a one year return on equity (ROE) of 11.35%.

"PSS" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

But it is perhaps worth recalling German unification chancellor Otto von Bismarck's warning that Russia is never as strong or as weak as it looks. As we approach the spectre of a new cold war, however, we can rest confident that Russia's strength is of the exaggerated quality. Last week, Russian bombers landed in Venezuela. After mauling its former colony of Georgia, Russia is now reaching out to a Latin American well-wisher, whose leader spoke positively of its actions and just severed diplomatic relations with Washington. Ugly shadows of the Cuban Missile Crisis, we are told, loom over the tranquil Caribbean. One would have to read far into most news stories, however, to learn that Russia's "power projection" consists of just two Tu-160 bombers, which were entered into service in 1987. Almost as old as the classic film Top Gun, their stated purpose is to train over neutral waters for a few days and then return to Russia. Hugo Chavez, the Venezuelan president and a former air force general himself, plans to fly "one of those monsters," as he calls them, and excitedly announced that "Yankee hegemony is finished."

Bermuda Hedge Fund Guide

Here is a short collection of articles on the hedge fund industry in Bermuda. I am always looking for more valuable online tools and resources to add to these geographical hedge fund guides to the hedge fund industry. If you have a white paper or PowerPoint that I can include here please send me an email and I will post it for everyone's benefit.

Hedgeweek Special Report on Bermuda Hedge Funds Services 2008. This report features several articles touched on various aspects of Bermuda’s Hedge Fund industry. It also analyzes the trends of globalization and institutionalization of the hedge fund industry. Regulations regarding funds’ performance, such as the level of manager access and transparency and investor protection are emphasized.

Island Hedge Funds Hold US $107 Billion. Estimates from the Hedge Fund Research Inc (HFR) Industry Report — Year End 2006 show that Bermuda has $107 billion in hedge fund assets under management, representing 7.7 percent of the world total and 11 percent globally not including the US, which itself accounts for 30.1 percent of the world total. Read more inside…

This article describes the establishment and administration process of the offshore funds, and its advantages and structure. Numerous areas of the world that are considered primary offshore centers for forming hedge funds are also briefly introduced, include Bermuda, the Cayman Island, Guernsey, Hong Kong and Dublin, etc.

BiBA Welcomes Bermuda Hedge Fund Law (12/21/2006). The Bermuda International Business Association (BIBA) has soundly endorsed the passing in Bermuda’s House of Assembly of the eagerly anticipated Investment Funds Act 2006, which more clearly outlines how public funds are regulated and refines the framework for non-public, institutional funds. Read more inside…

This is another feature report on the hedge fund industry in Bermuda. In this report, numerous topics regarding hedge funds in Bermuda are discussed, such as the role of Bermuda Monetary Authority (BMA), fund licensing regulation and requirements, and its local laws, etc.

Bermuda Battles Caymans for Offshore Funds (12/11/2007). While Bermuda dominates the offshore insurance industry, the Cayman Islands is slowly catching up as another epicenter for hedge funds, with about 9,000 of loosely regulated funds alredy registered in this British territory. Read more inside…

Establishing a Hedge Fund in Bermuda or the Cayman Islands. This report compares some of the key features of the laws and regulatory requirements between Bermuda and the Cayman Islands that are applicable to hedge fund.

The Hedge Fund Bermuda Triangle (May 2008). This article analyzed the reasons attribute to the failure of hedge funds, especially during the recent subprime crisis. Some of the addressed concerns are high leverage, illiquidity, and lack of investment diversity.

Hedge Funds and the Bermuda Reinsurance Market. Besides an epicenter for establishing offshore funds, Bermuda is also an insurance powerhouse that rivals New York and London. Bermuda is the center of international catastrophe reinsurance business, underwriting almost a third of global premiums, and is also the world’s leading captive domicile. Read more inside…

Bermuda’s Hedge Fund Industry. This small article provides a concise overview on Bermuda’s hedge fund industry, with description of its monetary authority, regulatory laws, and its advantages in comparison to other prime offshoring locations.

Offshore Explorations: Caribbean Hedge Funds. This article provides both qualitative and quantitative information on the funds located around the Caribbean, such as funds distribution, asset size, growth rate, and investor demographic, etc.

This website contains numerous information on offshore investing, investment funds, and taxation issues for hedge funds located in Bermuda.

This article, composed by KPMG, briefly described some of the regulatory issues for setting up hedge funds in Bermuda, such as authorization requirements and process, timescale, capital requirement, fund structure, and restrictions on type of investors.

A Time for Change: Bermuda’s Ability to Adapt Sets the Standard in an Uncertain Market. The changing demands of investors have forced changes in the way hedge funds operate, such as increased transparency and higher operational standards, are being implemented with more seriousness. Read more inside…

KPMG International Hedge Fund Survey. This comprehensive and broadly based research study focuses on the future of the hedge fund industry. The report presents the views of 550 top executives in 35 countries involved in hedge funds (including Bermuda), their administration, prime broking, mainstream fund management and pension funds, with combine assets worth U.S. $23 trillion.

New Fund Product Launched in Bermuda. The Bermuda International Business Association (BIBA) announced in May that it had brought to the Bermudian market a new product whereby funds can be simultaneously approved by the Bermuda Monetary Authority (BMA) and listed on the Bermuda Stock Exchange (BSX) in as short a time as two weeks. Read more inside…

Hedge Fund Jobs in Bermuda.

Institutional Investor’s Alpha Hedge 15th Annual Global Hedge Fund Summit. The Fairmont Southampton, Bermuda, October 26-28, 2008. This conference will foster an understanding of how current and ongoing developments are driving and influencing the funds in their home markets and the regions in which they invest and operate.

Annual Bermuda Financial Services Conference. 8am – 6pm, Tuesday, 9/30/2008. The Harvard Club, New York.

Citadel Solutions LLC has announced that the Bermuda Monetary Authority (BMA) has approved its license to operate Citadel Solutions Bermuda Ltd, making it the first company licensed by the BMA to provide administration services to hedge funds. Citadel Solutions Bermuda Ltd. will provide middle office and fund administration services to hedge funds as part of the global Citadel Solutions team.

More than USD 8billion in hedge fund and private equity money has recently been poured into, at last count, 11 new Bermuda reinsurance ventures. And, in what seems to be a first for the industry, some of this capital will be arriving in the form of sidecars, financial vehicles that can help speed the journey to an IPO or company sale.

Bermuda is one of the world’s premier off-shore jurisdictions, and is perhaps best known as the world’s second largest (after London) domicile for insurance and reinsurance companies. Bermuda is also the jurisdiction of choice for over 1500 hedge fund and pooled fund vehicles, and as the hedge fund industry continues its remarkable growth the choice of Bermuda as a home for hedge funds has never been more compelling.

Great general, in depth, overview relating to hedge fund regulation in Bermuda.

2003 article about the threatened movement by many hedge funds to offshore areas if the SEC increased its regulation of them. ''The most portable asset in the world is cash,'' said Robert K. Steel, the vice chairman of Goldman Sachs, who said during a two-day meeting on the subject in Washington that many funds would not put up with excessive regulation in the United States.

The global growth of hedge fund assets has tripled since the end of the bull market. Fuelled by increased interest by the retail market in alternative investment strategies not correlated to market performance, the SEC has estimated that there are currently 6,000 to 8,000 hedge funds. So what does this mean for the hedge fund industry? We think it means a maturing industry that will inevitably lead to greater regulation. In the US, this is already under active discussion for fund advisors. We believe that the Bermuda model will be followed by other offshore domiciles for hedge funds.

More great detailed, informative discussion of regulations in the Bermuda hedge fund industry and the lessons to be learnt from them.

The essential point is that Bermuda’s tax regime remains one of the world’s most attractive. There are no withholding, capital gains, transfer, wealth, gift or income taxes for non-resident entities. The meatiest issue facing the PLP is Bermuda’s independence. In much the same way as Britain’s Labour Party is said to be pro-European, the PLP is thought to be in favour of severing its ties with the UK.

Great extremely detailed, in depth, sophisticated look at Bermuda’s hedge funds by the International Monetary Fund.

Another overview guide to Bermuda including some background information on the country itself and what exactly makes it so attractive to hedge funds.

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Were there any major earnings surprises in the just-reported quarter among companies in your coverage?

Royal Caribbean (RCL) reported second-quarter earnings results that were in line with our estimate, while Carnival Cruises (CCL), (CUK) posted second-quarter results that exceeded our expectation by approximately 15%, or $0.07 per share. Despite these results, however, we reduced our full-year estimate for both companies, lowering our 2008 EPS estimate for Royal Caribbean by roughly 8% and our estimate for Carnival by approximately 13%.

Looking out to fiscal year 2009, we left our estimate for Royal Caribbean unchanged, and lowered our estimate for Carnival by approximately 15%.

What issues do you see having an impact on the industry in general?

At the moment, the price of fuel is by far the most critical issue facing the cruise line industry. As one might imagine for ships of such enormous size, fuel is a critical input expense, and as prices have risen over the last year, the operating margins of the cruise lines have been pressured.

Carnival’s management team expects that increased fuel prices will cost the company approximately $0.92 in earnings per share during fiscal 2008. For reference, our current earnings estimate for the company is $2.69 per share. Clearly, the higher price of fuel is taking a significant chunk out of the company’s overall earnings.

Royal Caribbean is also being significantly impacted by rising fuel expenses. Unlike Carnival, however, Royal Caribbean hedges a portion of its fuel needs, locking in prices for future expenditures. This hedging has provided some level of protection, but higher overall fuel expenses are simply unavoidable.

On its second quarter conference call, the company estimated that a $10 per barrel change in the market price of crude oil for the remainder of the year would lead to a $20 million change in the company’s total fuel expense, or approximately $0.10 per share. Given that crude prices have fallen somewhat since mid-summer, we expect that some of the expense pressure has eased, but in comparison to last year, the prices today are still significantly higher.

In what ways has the slowing U.S. economy had a direct impact on the companies you follow?

The cruise lines have been fortunate to this point in that top-line demand has remained relatively strong. Booking trends have remained favorable, and occupancy rates continue to be solid. Certainly, as the recession continues to impact consumer spending, the cruise lines may begin to see occupancy rates and pricing power soften. Thus far, however, it appears that many consumers would prefer to cut back on other day-to-day expenditures as opposed to forgoing an annual vacation. Additionally, the perceived value offered by the cruise lines remains high, relative to other potential vacation trips.

What ratings do you currently have on the major cruise lines?

We currently have a Buy rating on shares of Royal Caribbean, based primarily on valuation. The shares trade at a significant discount to Carnival, and we project solid growth going forward. Additionally, the company will introduce what will be the largest cruise ship in the world at the end of next year, and we anticipate that this addition to the fleet will give the company a significant competitive advantage in the Caribbean market.

We rate the shares of Carnival a Hold at this time. Although the company is largest in the industry, we believe that the share price accurately reflects the current state of operations at the company. Carnival will report third-quarter results later this month, and we will update our outlook at that time.

How would you advise investors looking to increase exposure to this industry in the near-term?

For most of the year, the stocks have traded in the same general direction as the price of crude oil, given the significance of that input on the companies’ overall financial performance. We expect this trend to continue somewhat, although steps taken by the companies to improve fuel efficiency have helped to some degree. In the near term, we would advise investors to keep an eye on the demand picture.

If the companies can keep their revenue generation strong throughout the recession, they should be poised to benefit from increased pricing power once the economy improves. If, however, demand starts to weaken, the impact of higher fuel expenses will be exacerbated, and we would expect earnings estimates to fall.

Sean P. Smith is a Zacks senior analyst covering the travel & leisure industry for Zacks Equity Research.
"RCL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

During his visit to Russia, Chavez said that the two nations had formed a strategic partnership and that he was buying a Russian missile defense system to thwart a potential U.S. air attack. In recent months, Chavez advisors have said Venezuela is considering buying as many as five diesel-powered Russian submarines. The deal would make Venezuela the region's top naval force, said retired Gen. Alberto Muller Rojas, a Chavez confidant. Venezuelan officials have justified arms purchases from Russia by noting the U.S. ban on all weapons sales by American companies to Venezuela, a mandate that extends to foreign manufacturers' arms that contain U.S. components. Deals with Israeli, Swedish and Spanish manufacturers were scrubbed because the weapons included U.S. parts. "The U.S. . . . has done everything to motivate Venezuela to seek a strategic military rapprochement with Russia," said a former advisor to Venezuela's Foreign Ministry who requested anonymity.

Company Description

PepsiAmericas, Inc produces, distributes, and markets soft drinks under several well know PepsiCo brands, including Pepsi, Mountain Dew, and 7UP. The company operates across the United States, Europe, and the Caribbean. PepsiAmericas is head quartered in Minneapolis, has over 20,000 full-time employees, and carries a market cap of $3 billion.

A Solid Second Quarter

On July 22nd PepsiAmericas announced its second-quarter results, including earnings per share of 72 cents. The announcement was 16% higher than the consensus estimate of 62 cents and a year-over-year increase of 11 cents.

The company saw strong revenue growth of 12% attributed to acquisition and increasing volume in European markets.

PepsiAmericas Raises Guidance

PepsiAmericas also raised the 2008 EPS estimate to between $1.92 and $1.96, up from between $1.77 to $1.83. The company's new target reflects earnings growth of 16-18%.

Analysts have also raised the consensus estimate for 2009 EPS in the past 60 days, now $2.13 up from $2.00.

Announces Share Repurchase Increase and Dividend

The company announced 10 million shares of common stock have been authorized for repurchase. There is no timeline for the repurchase and the company has approximately 127 million shares outstanding.

PepsiAmericas also declared a third-quarter dividend of 13.5 cent per share, the same as the previous quarter. The date of record is September 15th and will be payable on October 1st.

The Chart

Shares of PAS are consolidating near $24 following the second-quarter announcement. Prior to the earnings surprise in July the company was trading at the 52-week low. Take a look at the chart below.

"IL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

The Dow tumbled 241.81 points, or 2.08%, to 11,386.25, erasing Friday’s gain of almost 200 points. The Standard & Poor's 500 index lost 25.36 points, or 1.96%, ending the session at 1,266.84. The Nasdaq composite index declined by 49.12 points, or 2.03%, closing at 2,365.59.

Monday’s selloff translated into higher bond prices as investors fled to quality. The 10-year Treasury note yield, which moves opposite its price, slipped to 3.78% from Friday’s 3.87%.

The dollar was mixed against major currencies, while gold prices fell.

Adding to Wall Street’s woes today was a real estate report that revealed an all-time high of unsold properties in July. Additionally, the National Association of Realtors' report showed an above-expectations jump in existing home sales of 3.1%. However, this increase was for the most part received with apathy.

Oil prices saw a great deal of up and down action during today’s session as crude settled 52 cents higher at $115.11 per barrel on news of Tropical Storm Gustav forming in the Caribbean.

Gas prices at the pump are slightly lower as a gallon of regular gasoline dipped nearly a penny overnight. According to the AAA auto club, the national average stands at $3.681.

The Focus List

Our Focus List holdings were also down on average but by a narrower margin than the broader market. The portfolio slipped by 1.74% Monday.

Two companies that prevented the Focus List from falling further were CF Industries Holdings, Inc. (CF) and Genco Shipping & Trading Ltd. (GNK), which gained 1.65% and 3.27% respectively. There were no major developments on either holding.
"AQI" Free Stock Analysis: Buy? Sell? Hold?
"CF" Free Stock Analysis: Buy? Sell? Hold?
"GSTL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

The Dow tumbled 241.81 points, or 2.08%, to 11,386.25, erasing Friday’s gain of almost 200 points. The Standard & Poor's 500 index lost 25.36 points, or 1.96%, ending the session at 1,266.84. The Nasdaq composite index declined by 49.12 points, or 2.03%, closing at 2,365.59.

Monday’s selloff translated into higher bond prices as investors fled to quality. The 10-year Treasury note yield, which moves opposite its price, slipped to 3.78% from Friday’s 3.87%.

The dollar was mixed against major currencies, while gold prices fell.

Adding to Wall Street’s woes today was a real estate report that revealed an all-time high of unsold properties in July. Additionally, the National Association of Realtors' report showed an above-expectations jump in existing home sales of 3.1%. However, this increase was for the most part received with apathy.

Oil prices saw a great deal of up and down action during today’s session as crude settled 52 cents higher at $115.11 per barrel on news of Tropical Storm Gustav forming in the Caribbean.

Gas prices at the pump are slightly lower as a gallon of regular gasoline dipped nearly a penny overnight. According to the AAA auto club, the national average stands at $3.681.

The Focus List

Our Focus List holdings were also down on average but by a narrower margin than the broader market. The portfolio slipped by 1.74% Monday.

Two companies that prevented the Focus List from falling further were CF Industries Holdings, Inc. (CF) and Genco Shipping & Trading Ltd. (GNK), which gained 1.65% and 3.27% respectively. There were no major developments on either holding.
"AQI" Free Stock Analysis: Buy? Sell? Hold?
"CF" Free Stock Analysis: Buy? Sell? Hold?
"GSTL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

The Dow tumbled 241.81 points, or 2.08%, to 11,386.25, erasing Friday’s gain of almost 200 points. The Standard & Poor's 500 index lost 25.36 points, or 1.96%, ending the session at 1,266.84. The Nasdaq composite index declined by 49.12 points, or 2.03%, closing at 2,365.59.

Monday’s selloff translated into higher bond prices as investors fled to quality. The 10-year Treasury note yield, which moves opposite its price, slipped to 3.78% from Friday’s 3.87%.

The dollar was mixed against major currencies, while gold prices fell.

Adding to Wall Street’s woes today was a real estate report that revealed an all-time high of unsold properties in July. Additionally, the National Association of Realtors' report showed an above-expectations jump in existing home sales of 3.1%. However, this increase was for the most part received with apathy.

Oil prices saw a great deal of up and down action during today’s session as crude settled 52 cents higher at $115.11 per barrel on news of Tropical Storm Gustav forming in the Caribbean.

Gas prices at the pump are slightly lower as a gallon of regular gasoline dipped nearly a penny overnight. According to the AAA auto club, the national average stands at $3.681.

The Focus List

Our Focus List holdings were also down on average but by a narrower margin than the broader market. The portfolio slipped by 1.74% Monday.

Two companies that prevented the Focus List from falling further were CF Industries Holdings, Inc. (CF) and Genco Shipping & Trading Ltd. (GNK), which gained 1.65% and 3.27% respectively. There were no major developments on either holding.
"AQI" Free Stock Analysis: Buy? Sell? Hold?
"CF" Free Stock Analysis: Buy? Sell? Hold?
"GSTL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Company Description

TBS International Limited is an ocean transportation company that ships cargo worldwide on 44 vessels.

The company ships through liner, parcel, bulk and vessel chartering services on key trade routes between Latin America and China, Japan and South Korea and ports in North America, Africa, the Caribbean and the Mediterranean.

TBSI, a Zacks #1 Rank (Strong Buy), has developed a niche in multipurpose tweendeckers and smaller dry bulk carriers varying from 17,300 dwt to 45,500 dwt that can service ports that larger ships cannot. The company ships steel products, metals, fertilizer, coal, salt, sugar, grain, chemicals and other industrial goods.

TBS International is heavily concentrated in Latin America and offers a high-frequency of sailings from Chile, Ecuador and Peru to China, Japan and South Korea. The Latin America route serves industrial cargo customers in Brazil, Argentina and Venezuela with scheduled transports to the Caribbean, and the various coasts of Central and South America.

The company operates time charter services, which includes both short- and long-term time charters.

TBS International Reports the Best Quarter in the Company's History

On Aug 6, TBS International reported record second quarter earnings as charter rates and volumes soared. Net income rose 142.4% to $52.6 million, or $1.82 per share, compared to $21.7 million, or 77 cents per share in the second quarter of 2007. Consensus estimates called for $1.63 per share.

Revenues jumped 104.6% to $156.9 million from $76.7 million in the year ago period. Voyage revenues totaled $128.7 million, up 113.1% from $60.4 million in 2007.

Cargo volume increased 52.7% and freight rates rose 37.6%, or $25.06 to $91.79 per ton compared to $66.73 per ton in the 2007 period.

Average daily voyage time charter equivalent, which is industry standard after deducting all voyage expenses from revenues, surged 52% to $31,212 per day from $20,538 per day in 2007. TBSI also saw the average daily voyage time charter rise 10.3% in the quarter compared to the first quarter of 2008.

Time charter revenue also jumped compared to 2007. Revenues rose 57.1% to $25.3 million from $9.2 million in 2007.

Average Daily Time Charter Equivalent, the industry standard that reflects time charter-out revenues reduced by commissions, rose 63.2% to $30,563 per day from $18,727 in the second quarter of 2007. The company said the increase was due to the upward trend in the worldwide shipping spot market rates.

TBSI operated 39 vessels in the second quarter of 2008 compared to 31 vessels in the same period a year ago.

TBSI is Bullish on Its Business

All together, the company will be operating 46 vessels in the second half of 2008: 23 multipurpose tweendeckers and 23 handymax and handysize bulk carriers.

TBSI intends to target non-containerized project cargoes in the mining, energy, steel production and infrastructure and construction sectors as growth areas that will benefit from expanding global trade.

Entering into the second half of 2008, the company sees strong cargo requirements and firm freight rates.

Consensus Estimates Rising for the Full Year

The company saw higher forecasts from Wall Street. The full-year 2008 consensus estimate of $7.12 per share climbed from $6.37 over the past 30 trading days.

Value Fundamentals

TBS International is cheap. It trades at only 3.92x forward earnings. Its price-to-book is 2.4. The company has an outstanding return on equity (ROE) of 50%, versus the industry average of 14%.
"TBS2" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

"The Russians and the Venezuelans can engage in whatever cooperation that they would like. But it's curious, I'm not sure what Venezuela needs or gains by a visit by the Russian fleet," said [White House] spokesman Gordon Johndroe. "You would think that President Chavez would concentrate more on the problems that the people of Venezuela are having rather than inviting the fleet in for a port call," he said, adding that he could not confirm the invitation.