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Company News for November 23, 2009 – Corporate Summary

Zacks Market Commentaries — Mon, 23 Nov 2009 14:11:02 +0000

• A large run of holiday sales offerings crashed the Ebay (NASDAQ:EBAY) website, causing a major weekend web outage

• Tyson Foods (NYSE:TSN) reported better-than-expected earnings of 28 cents a share, beating Zacks estimates by 2 cents, on revenues of $7.2 billion, which exceeded Zacks estimates of $6.85 billion

• India’s Reliance Industries bid $12 billion in cash for Lyondell Bassell when it exits bankruptcy

• Microsoft (NASDAQ:MSFT) is reportedly in discussions with News Corp. (NASDAQ:NWSA) to "de-index" the firm's news websites from Google (NASDAQ:GOOG)

• Coca-Cola (NYSE:KO) announced plans to more than double the number of its bottling plants in China over the next ten years as part of its goal to triple sales to the country

• Hershey (NYSE:HSY) trust encouraged the firm to counter Kraft's (NYSE:KFT) hostile, $16.2 billion bid with its own, $17 billion offer

• According to S&P most US banks are failing to meet adequacy standards comfortably enough to avoid ratings downgrades. Both HSBC (NYSE:HBC) and Goldman Sachs (NYSE:GS) showed stronger-than-average balance sheets, with UBS (NYSE:UBS) and Citigroup (NYSE:C) well below average

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Muscle Flex, Inc. (MFLI.PK) Invites Public to Tune into MuscleFlexInc.com for the American Music Awards Online Pre-Show

QualityStocks — Fri, 20 Nov 2009 18:44:45 +0000

Muscle Flex Inc. today invited the public to tune into www.MuscleFlexInc.com for the American Music Awards Online Pre-Show Sunday, November 22, 2009 from 3:00 – 5:00 PM broadcast live from the Red Carpet at the Nokia Theatre with Muscle Flex CEO Danny Alex as the Official Fitness and Lifestyle Expert Commentator. Danny Alex will participate [...]

Muscle Flex, Inc. (MFLI.PK) CEO Chosen to Participate on the American Music Award’s Pre-Show November 22, 2009

QualityStocks — Thu, 12 Nov 2009 16:25:00 +0000

Muscle Flex Inc. announced early this morning that its CEO, Danny Alex, will participate live on the American Music Awards online pre-show on November 22, 2009. Muscle Flex brands will be referenced during his segments which will focus on fitness and lifestyle. According to the press release, the introduction was made by Muscle Flex’s marketing [...]

Cereplast, Inc. (CERP.OB) Projects Bio-Plastics to Capture 30% of U.S. Market, Topping $10B by 2020

QualityStocks — Wed, 11 Nov 2009 16:31:22 +0000

Cereplast, Inc., a pioneer in the manufacture of plastics which derive largely from resins based on plant starches, released news announcing projections for its market sector. Expecting a ten-fold sales increase in the U.S. bio-plastics market by 2020, the Company cited the $1B sales figures from 2007 and estimates which show that, within ten years, [...]

Dollar Decline in Perspective – Analyst Blog

Dirk Van Dijk — Tue, 10 Nov 2009 21:44:42 +0000

The dollar has clearly been under pressure this year. Most of the graphs of it that you have seen probably look like the first graph below, which shows what the dollar has done against two indexes since the start of the year. The blue line is how the greenback has fared against the major currencies like the Euro and the Yen, and the red line includes those, but also looks at how it has fared against a much broader collection of currencies.

Since March 9th, the day the market hit bottom -- and the dollar hit its high for the year -- it is down 14.4% against the major currencies and down 11.5% against the broad basket of currencies.

This has a number of implications. For starters, anyone from outside the country has seen nice gains if they invested in the U.S. market, but not nearly as eye-popping as the returns that domestic investors have seen. It also means that commodity prices have gone up much less for people based in Europe or Japan than they have for people in the U.S. Yes, the price of oil is up in Yen and Euros this year, but not by nearly as much as in the U.S.

There are those (many with very large soapboxes) who would have you believe that the decline in the dollar is a crisis. I, however, beg to differ.

While in the big picture over time it is not desirable to have the currency constantly devalued, at this point the decline is not likely to cause major problems. The major downside to a falling dollar is that it makes our imports more expensive, and thus can contribute to inflation. This is particularly true in the case of oil, which tends to rise as the dollar falls. After all, why should the price of oil for someone in France or Japan go down just because the dollar is weak?

However, right now such inflation is just offsetting deflation in other parts of the economy. The biggest weighting in the CPI is owner’s equivalent rent, or what it would cost you to rent a home identical to the one you own next door to your house. It makes up almost 24% of the overall CPI. Add in the rent that people pay to landlords if they don’t own a house and the figure gets close to 30%. It is part of core inflation, so if you strip out food and energy prices it is almost 40% of the core basket of goods.

Due to the weak housing market, and rapidly rising rental vacancy rates, rents are likely to be under substantial pressure for some time to come.

There is one currency, though, that the dollar has not declined against, and that is the Chinese Yuan, since the Chinese peg it to the dollar. Since we import a lot of goods from China, the decline in the dollar is not going to cause inflation in those prices.

The upside is that it means that our exports are much more competitive. This applies even in China, since we are often going head to head, not against local Chinese companies, but against European or Japanese firms. More exports mean more jobs, and a lower trade deficit.

Remember that net exports are a direct input into the GDP calculations. With an unemployment rate of 10.2% and rising, getting the economy moving again is a FAR higher priority than fighting inflation during a time of major deflationary pressures.

Since many U.S. companies have substantial operations abroad, or export goods, the decline in the dollar means a major tailwind to their earnings, since the euro they earned is worth more in dollars today than the euro they earned a few months ago was worth then. For the S&P 500 as a whole, more than 40% of the earnings come from abroad. For many companies like Coca Cola (KO) and Colgate Palmolive (CL), it is much higher than that.

One also has to take a longer-term look. The dollar has been slipping against both indexes since 2001, but there was a huge and sharp counter-trend rally a year ago as the world economy saw the wheels come off. The U.S. has always been a safe haven in times of distress, and around the world people flocked to pull their money out of Pounds and Rupees as they tried to find a safe place to hide in the turmoil.

The dollar still has not returned to the lows it saw early last year. Seeing the dollar decline as a crisis is sort of like seeing the decline in the TED spread as a crisis. It is not -- it is a sign that things are getting back to normal.

Also, the dollar has suffered far greater declines in the past with no major ill effects on the economy. To believe that a 14.4% decline in the dollar today is going to cause major havoc in the economy, then one must remember the last half of the 1980’s -- when the dollar fell by almost 40% against other major currencies -- as a period of economic disaster. Somehow that is not my recollection of the time.

Given the chronic trade deficits this country is running, and has been running for a long time, a weak dollar might not be good, but it is necessary. The last quarter we ran a trade surplus in was the 3Q of 1980. That’s right, when Jimmy Carter was in the White House.

While recently the trade deficit has come down, it was still 2.71% of GDP in the third quarter. That is still an awful number for our long-term economic health. However, it looks great when you consider that the trade deficit has averaged 4.575 of GDP so far this century and was over 5% of GDP for three straight years, from the second quarter of 2004 through the second quarter of 2007.

It is the trade deficit that determines how indebted we are to the rest of the world, not the fiscal deficit. We have run up big debts to the rest of the world, resulting in China for example owning over $1.5 Trillion in T-notes. In return, we got all the stuff that line the shelves of Wal-Mart (WMT). Now the credit card statement has come and we have to start paying. As the dollar falls it means we get to pay that debt back cheaper. We have to make and sell less stuff overseas compared to the stuff that was made abroad and sent here.

Now, other countries might not be all that happy about it, but what are they going to do? Sell their dollars so we can repay even cheaper? As long as the decline in the dollar is gradual and orderly, it will help boost the economy. The stock market realizes this. The fact that the market bottomed on the same day the dollar peaked out was no coincidence.
Read the full analyst report on "KO"
Read the full analyst report on "CL"
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Today in Russian Business – Nov 6, 2009

Robert Amsterdam — Fri, 06 Nov 2009 09:41:12 +0000

'We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us': Putin reacts to the aborted GM deal. Finance Minister Alexei Kudrin...

Zacks Analyst Blog Highlights: Wal-Mart, Target, Claymore China Small Cap ETF, Coca-Cola and Aflac – Press Releases

Zacks Market Commentaries — Thu, 05 Nov 2009 12:25:26 +0000

For Immediate Release

Chicago, IL – November 5, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Wal-Mart (WMT), Target (TGT), Claymore China Small Cap ETF (HAO), Coca-Cola (KO) and Aflac (AFL).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s AnalystBlog:

China Booming Again

The long-term key for China is to generate more consumer demand at home so it is not forever dependent on exports to fuel its growth. This is the mirror image of what the U.S. needs. We cannot forever run trade deficits, consuming more from the rest of the world than we produce.

It is the trade deficit that drives the expansion of U.S. debt held by China, not our fiscal deficit. Remember that point, it is an important one -- and one that the vast majority of talking heads on TV just don’t seem to get. Of course, each country’s exports are another country’s imports, and for every trade surplus, there must be an offsetting trade deficit somewhere else in the world.

So far it has been a pretty sweet deal for the U.S.: we get all the goods that fill the shelves of Wal-Mart (WMT) and Target (TGT), and they get little green pieces of paper. Recently those little green pieces of paper have been going down in value. How much longer does China want to send us real useful stuff in return for those pieces of paper (or, more accurately, little blips inside of computers)?

They have done so thus far because along with the paper, making that stuff they send abroad (actually, they export more to Europe than they do to the U.S.) creates jobs, and China needs jobs for social stability. However, so does the U.S., as our unemployment rate approaches 10%.

The deal is getting progressively less sweet for both sides as the dollars keep on piling up in Beijing. The solution over the long term is for China’s 1.3 billion people, the majority of whom still live in poverty, to start to consume more. If that can be accomplished, then Chinese society will be more stable, it will be able to maintain its employment levels and the U.S. might actually start to add a few jobs.

This would also greatly benefit the millions of smaller non-state-owned firms in China. The best way to play that trend is in the Claymore China Small Cap ETF (HAO), which has by far the largest exposure to the Chinese consumer of any of the China ETF’s. Buying individual stocks that are direct plays on the Chinese consumer is a risky proposition and is probably best left to those who can both read Mandarin and decipher financial statements written in it.

While China’s market has done well so far this year, so have most emerging markets. However, the economies of most emerging markets have not come close to matching the performance of the Chinese economy.

Underpinned by the strength in China, and rapidly growing inter region trade, the World Bank sees all of East Asia growing at a 6.7% rate in 2009, up from 5.3% growth seen back in April. Since Japan’s growth is likely to be rather sluggish (but also improving), that implies solid growth for the rest of the region. As the auto sales numbers yesterday showed, the Korean auto industry is not exactly hurting that much anymore.

In short, there are better places in the world to invest than in the U.S., and most U.S. investors are still far too heavily weighted towards domestic investments. However, you don’t just have to buy ADR’s or ETF’s to have international exposure. U.S. companies that get a high proportion of their sales from Asia will also probably benefit from the growth there. Coca-Cola (KO) would be a good example to take a well-known name. Aflac (AFL) is another, although for them the revenues come from Japan, not China.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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China Booming Again – Analyst Blog

Dirk Van Dijk — Wed, 04 Nov 2009 19:45:11 +0000

The World Bank now estimates that China will grow 8.4% in 2009, up from its June forecast of 7.2% growth. Like the U.S., China embarked on a large fiscal stimulus program, one that relative to the size of its economy is more than three times as large as the American Reinvestment and Recovery Act was.

Well, surprise, surprise -- a bigger package has been more effective than a smaller one at lifting economic growth. China, of course, is in a better fiscal position to invest in its economy than the U.S. That is a legacy of the years of fiscal mismanagement in the U.S. going into the crisis, and the fact that China perpetually runs large trade surpluses while the U.S. runs chronic trade deficits.

For 2010, as some of the stimulus in China wears off -- but as the private economy there regains its footing -- growth of 8.7% is forecast for China by the World Bank. While this is down from the double-digit growth rates that China was running before the world economy went off the rails, relative to the rest of the world, China’s out-performance has stayed about the same.

That means that the financial crisis has not slowed China’s ascendency as a world economic power. It is currently the third largest economy in the world, and it will only be a few more years before it passes Japan to move into second place.

Based on the pace of quarterly improvement so far this year, the 8.7% growth rate for 2010 looks very conservative to me. In the first quarter, China grew at a 6.1% rate, then accelerated to 7.9% in the second quarter and to 8.9% for the third quarter. To reach the 8.4% level for all of 2009 implies a growth rate of over 10.5% in the fourth quarter.

That would imply that on a quarterly basis that growth starts to slow significantly in 2010 for China. That seems unlikely to me as its exports should pick up as the rest of the world starts to recover.

The long-term key for China is to generate more consumer demand at home so it is not forever dependent on exports to fuel its growth. This is the mirror image of what the U.S. needs. We cannot forever run trade deficits, consuming more from the rest of the world than we produce.

It is the trade deficit that drives the expansion of U.S. debt held by China, not our fiscal deficit. Remember that point, it is an important one -- and one that the vast majority of talking heads on TV just don’t seem to get. Of course, each country’s exports are another country’s imports, and for every trade surplus, there must be an offsetting trade deficit somewhere else in the world.

So far it has been a pretty sweet deal for the U.S.: we get all the goods that fill the shelves of Wal-Mart (WMT) and Target (TGT), and they get little green pieces of paper. Recently those little green pieces of paper have been going down in value. How much longer does China want to send us real useful stuff in return for those pieces of paper (or, more accurately, little blips inside of computers)?

They have done so thus far because along with the paper, making that stuff they send abroad (actually, they export more to Europe than they do to the U.S.) creates jobs, and China needs jobs for social stability. However, so does the U.S., as our unemployment rate approaches 10%.

The deal is getting progressively less sweet for both sides as the dollars keep on piling up in Beijing. The solution over the long term is for China’s 1.3 billion people, the majority of whom still live in poverty, to start to consume more. If that can be accomplished, then Chinese society will be more stable, it will be able to maintain its employment levels and the U.S. might actually start to add a few jobs.

This would also greatly benefit the millions of smaller non-state-owned firms in China. The best way to play that trend is in the Claymore China Small Cap ETF (HAO), which has by far the largest exposure to the Chinese consumer of any of the China ETF’s. Buying individual stocks that are direct plays on the Chinese consumer is a risky proposition and is probably best left to those who can both read Mandarin and decipher financial statements written in it.

While China’s market has done well so far this year, so have most emerging markets. However, the economies of most emerging markets have not come close to matching the performance of the Chinese economy.

Underpinned by the strength in China, and rapidly growing inter region trade, the World Bank sees all of East Asia growing at a 6.7% rate in 2009, up from 5.3% growth seen back in April. Since Japan’s growth is likely to be rather sluggish (but also improving), that implies solid growth for the rest of the region. As the auto sales numbers yesterday showed, the Korean auto industry is not exactly hurting that much anymore.

In short, there are better places in the world to invest than in the U.S., and most U.S. investors are still far too heavily weighted towards domestic investments. However, you don’t just have to buy ADR’s or ETF’s to have international exposure. U.S. companies that get a high proportion of their sales from Asia will also probably benefit from the growth there. Coca-Cola (KO) would be a good example to take a well-known name. Aflac (AFL) is another, although for them the revenues come from Japan, not China.
Read the full analyst report on "WMT"
Read the full analyst report on "TGT"
Read the full analyst report on "HAO"
Read the full analyst report on "KO"
Read the full analyst report on "AFL"
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Zacks Industry Rank Analysis Highlights: Coca-Cola, PepsiCo, Kao, Revlon and Helen of Troy – Press Releases

Dirk Van Dijk — Thu, 29 Oct 2009 12:00:32 +0000

For Immediate Release

Chicago, IL – October 29, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Coca-Cola (KO), PepsiCo (PEP), Kao (KCRPY), Revlon (REV) and Helen of Troy (HELE).

Zacks Industry Rank Analysis is written by Dirk van Dijk, CFA.

This week: Staples Turn to Shine

The Consumer Staples sector has the second-best sector rank and the second-best revisions ratio for this year, following only the small and incoherent Conglomerates sector. (Incoherent by their very nature of being conglomerates).

This is largely due to Consumer Staples consistently surprising on the upside in the third-quarter earnings season so far. Among the S&P 500 firms in the sector, there have been 16 positive surprises and only 1 disappointment through last Friday’s close.

Not only that, but the sector is actually producing honest to goodness earnings growth. Nothing dramatic mind you, but these companies are seeing positive year-over-year comparisons in distinct contrast to most of the economy. Among the S&P 500 firms, 12 have reported higher earnings than a year ago, while only 5 are lower. Most of the gains, however, have come from better-than-expected margin as there have actually been more disappointments on the top line (7 to 9) than positive surprises. Plus, the majority (5 to 12) have reported lower sales than last year.

While this has been a very successful earnings season for almost all areas of the market, the Staples sector is among the best. For the S&P 500 excluding the Staples, the ratio of positive earnings surprises to disappointments is 5.56:1, which is very strong, but it trails well behind the 16:1 ratio in the Staples sector. Actual earnings growth has been hard to come by outside the Staples sector with a positive growth to negative growth ratio of 0.59, far below the Staples 2.40:1 ratio. (Medical is an exception and has also done well.)

Among the 206 industry groups we rank, the four groups from the Consumer Staples sector are in the top 15. The two most important of these are soft drinks, where all the major players like Coca-Cola (KO) and PepsiCo (PEP) are Zacks #2 Rank ("buy") stocks and none of the 17 firms in the industry have ranks worse than a 3. The firms that are Zacks #3 Rank ("hold") are for the most part bottling companies located abroad.

The Cosmetics Industry is also looking good with only one firm with a Zacks Rank worse than 3 and that is a Japanese firm (Kao (KCRPY)). Revlon (REV) and Helen of Troy (HELE) are standouts with number 1 rankings.

These steady eddie companies have by and large underperformed in the massive stock market rally since March, and look relatively inexpensive. Given there strong estimate momentum they are worth taking a second look at as possible additions to your portfolio. If the economic recovery were to falter, they would be a good place to hide as well.

Zacks "Profit from the Pros " e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5611.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=5610.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Contact: Dirk van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.zacks.com

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The Rise of the Rest

Trading School — Thu, 29 Oct 2009 10:46:12 +0000

One great thing about my position here as Director of Marketing is my extensive contact list. I say that because I have access to thousands of excellent traders, investors, and economists at my finger tips! So when things around the world catch my attention, I can quickly find someone who can give me the skinny [...]

Coca Cola Enterprises Beats, Raises – Analyst Blog

Zacks Market Commentaries — Wed, 28 Oct 2009 22:40:46 +0000

Coca Cola Enterprises (CCE) reported its second consecutive quarter of strong results, with earnings of 51 cents per share. Earnings were 5 cents above the Zacks Consensus Estimate of 46 cents, driven by the benefits of price and package initiatives in North America, volume and pricing growth in Europe and efficient cost control mechanisms.

Net operating revenues during the quarter declined 3% year-over-year. Benefits of positive net pricing (+7.5% in North America and +4.5% in Europe) were fully offset by 10.0% volume declines in North America. Volumes in Europe grew 4.0%. Currency translations have negatively impacted the top-line by 3.0%. Overall physical case and can volume declined 6.5% while net revenue per case increased 7.5% year-over-year.

In North America, revenues fell 3.9% as the benefits of pricing and packaging initiatives of 7.5% were fully offset by volume declines of 10% year-over-year. In the year-ago period, North American sales got a boost from Olympic-related promotions and the benefit of July 4th holiday falling in the quarter.

European revenues declined marginally by 0.9% driven by strong volume and pricing in the quarter. Volumes grew 4.0%, driven by a 4.5% growth in the Coca-Cola trademark brands. Pricing also benefited the segment by 4.5%.

Based on the robust performance during the first nine months of 2009, management raised guidance for the full year. Earnings are now expected in the range of $1.54 to $1.57 per share. Previous guidance was $1.44 to $1.49 per share. The guidance includes full year negative currency impact of approximately 16 cents.

Excluding the impact of currency, on reported basis revenue is expected to decline slightly. The company also expects strong free cash flow of approximately $800 million and capital expenditures of approximately $900 million.
Read the full analyst report on "CCE"
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Let China’s Middle Class Lead You Into Luxury

Investment U — Wed, 28 Oct 2009 18:49:29 +0000

Let China’s Middle Class Lead You Into Luxury Tony Daltorio, Investment U Research According to the World Bank, the global middle class could grow to 1.15 billion in 2030 – a huge jump from the 430 million middle class folks in 2000. Driving the extraordinary growth is… you guessed it, the emerging “BRIC” nations. In [...]

Coca-Cola’s Wuhan Plant Goes Into Production

China Retail News — Sun, 25 Oct 2009 19:31:36 +0000

Coca-Cola has announced that its non-carbonated beverage plant in Wuhan, Hubei, was put into production recently. With a total investment of CNY600 million, this new production base is reported to be the company's largest non-carbonated beverage plant in the world. According to reports in local media, Coca-Cola's production base in Wuhan will have four production lines. So [...]

Stock Market News for October 21, 2009 – Market News

Zacks Market Commentaries — Wed, 21 Oct 2009 14:20:30 +0000

A tepid report on housing starts sent stocks into a tizzy and major indexes slipped from their year highs as solid earnings reports from Apple Inc. to Caterpillar were overlooked by anxious investors. A rebound in dollar from its 14-month lows also added to the downward pressure and hurt commodities, sending energy and material shares lower.

Weakness in share sent Treasury prices higher, with the 10-year closing up 13/32, to 102 11/32. The yield fell to 3.34%, from 3.39% late Monday. On Tuesday, the 30-stock Dow Jones industrial average fell 50.71 points, or 0.50%, to 10,041.48. The broad Standard & Poor's 500-stock index retreated 6.85 points, or 0.62%, at 1,091.06 and the tech-heavy Nasdaq composite index lost 12.85 points, or 0.59%, to 2,163.47. Market breadth was negative. On the New York Stock Exchange, declining shares beat those that rose in price two to one on volume of 1.24 billion shares.

After the close yesterday, Yahoo Inc. (NASDAQ:YHOO) and SanDisk Corp. (NASDAQ:SNDK) reported strong quarterly numbers that were well ahead of Street expectations. Caterpillar (NYSE:CAT) was the leading gainer among the Dow 30 stocks, rising 3.4% after it reported estimate topping numbers. Apple (NASDAQ:AAPL) shares climbed 4.7%.

Military contractor Lockheed Martin (NYSE:LMT) fell nearly 6% after it announced weak 2010 outlook. Chemical maker DuPont (NYSE:DD) and UnitedHealth Group Inc (NYSE:UNH) reported better-than-expected numbers, helped by cost-cutting measures. However, DuPont (NYSE:DD) shares fell 2.2% after the company reported lower-than-expected revenue, even as earnings came in above estimates and the firm raised its full-year outlook.

Coca-Cola's (NYSE:KO) shares dropped 1.3% as it reported revenue below estimates, even as earnings were inline with expectations. The company noted, "We expect the consumer to continue facing economic uncertainties into 2010 and for consumer sentiment to recover slowly."

Interestingly, the market’s measure of volatility, the CBOE Vix, continued its southward move, falling 2.75% to 20.90. All ten S&P500 sectors ended in the red, led by declines in utilities (-1.2%), health care (-1.1%), and basic materials (-1.0%). Technology stocks showed some strength and eased 0.03%.

Oil prices rose to an intraday high of $80.05 yesterday, the highest level in a year, before retreating a little and ending the session off 52 cents at $79.09. The drop came amid concerns that the world's largest oil consumer might face a weaker-than-expected recovery. Moreover, OPEC Secretary General El-Badri noted that prices above $80 could hinder economic growth. El-Badri said he does not expect prices above $100 in the near future due to what he called "no shortage of oil supply."

Today's markets will see earnings from big names including Boeing (NYSE:BA), Eli Lilly (NYSE:LLY), Freeport-McMoRan (NYSE: FCX), Morgan Stanley (NYSE:MS), US Bancorp (NYSE:USB) and Wells Fargo (NYSE:WFC) before the market opens.

Zacks Investment Research

Coca Cola Reports Modest Results – Analyst Blog

Zacks Market Commentaries — Tue, 20 Oct 2009 16:26:13 +0000

The Coca Cola Company (KO) reported modest results for the third quarter with earnings of 81 cents per share. Earnings were in-line with the Zacks Consensus Estimate and flat year-over-year.

Net operating revenues for the quarter declined 4% year-over-year, driven by a 6% negative impact from currency translation and a 1% adverse impact from a structural change. This was partially offset by 2% increase in concentrate sales and a 1% benefit from pricing and product mix.

Worldwide unit case volume increased 2% in the quarter, aided by a 4% improvement in international unit case volume and 2% growth in the Coca Cola trademark brand. The emerging markets of India and China grew an impressive 37% and 15%, respectively. In addition, strong unit case volume growth was observed in other key markets including Eurasia & Africa, Latin America and Pacific. Europe posted a 2% volume decline, while North American volume declined 4%.

In Europe, volume declined due to the tough macro economic environment. While in North America, in addition to the challenging environment, aggressive competitive pricing within the non-carbonated beverage category added to the decline in volume. Furthermore, in North America, many consumers for health reasons prefer juices and teas instead of soft drinks.

Carbonated soft drink (CSD) case volume increased 1% during the quarter. Non-carbonated beverage (NCB) volume grew 7% driven by strong growth across the portfolio, including juices and juice drinks, sports drinks, teas and water brands. In North America, NCB’s were flat year-over-year.

Gross margins for the quarter contracted 49 basis points (bps) to 63.5% versus 64.0% in the prior-year quarter. The decline was primarily attributable to adverse currency impact of currency translation and impact from structural changes related to bottling investments. The operating margin for the quarter expanded 64 bps to 26.7% versus 26.1% in the prior-year quarter. The increase was attributable to lower selling, general and administration expenses.

The company had cash and cash equivalents of $8.8 billion and a debt-to-capitalization ratio of 17%.

During the first nine months of 2009, the company topped the nonalcoholic ready-to-drink industry in most of its key markets for the ninth consecutive quarter, thereby driving further global volume and market share gains. Management states that its investments in key growth markets such as China, Mexico, India and Brazil contributed to the results.

The company is on track to achieve the $500 million target in annualized savings by 2011 and expects to deliver more than half of the savings by the end of 2009.

Coca Cola also rolled out its 2020 Vision, which is the roadmap for the company to grow along with its worldwide bottling partners. Management stated that the 2020 Vision roadmap is improving clarity and focus of the global business. It therefore expects better utilization of growth opportunities, going forward.
Read the full analyst report on "KO"
Zacks Investment Research

Company News for October 20, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 20 Oct 2009 14:28:41 +0000

• Adecco announced plans to acquire professional staffing firm MPS (NYSE:MPS) for $1.3 billion

• Pfizer (NYSE:PFE) bettered earnings and revenue expectations with third quarter adjusted results of 51 cents a share, 3 cent higher than Zacks estimates, on revenues of $11.6 billion, which beat Zacks estimates of $11.47 billion. Full-year guidance was also raised to $2.00-$2.05 from $1.90-$2.00 prior

• United Technologies (NYSE:UTX) third quarter numbers beat consensus estimates with earnings of $1.14 versus Zacks estimates of $1.12 on revenues of $13.38 billion up from estimates of $13.40 billion. The firm expects full year earnings in the mid-point of its earlier guidance of $4.00-$4.20

• State Street (NYSE:STT) reported third quarter operating earnings of $1.05 a share, beating Zacks estimates of $1.00 a share, as revenues of $2.77 billion were above estimates of $2.22 billion. However, the company lowered full-year operating results from $4.25-$4.50 to $4.13-$4.17

• Comerica (NYSE:CMA) reported third quarter earnings of 10 cents, versus Zacks estimates of a 54 cent loss, with $311 million provided for loan losses

• Bank of NY Mellon (NYSE:BK) reported third quarter earnings of 54 cents a share, beating Zacks estimates by 7 cents, on revenues of $3.33 billion versus $3.20 billion

• DuPont (NYSE:DD) reported third quarter earnings of 45 cents, 12 cents better than expected, on revenues of $5.96 billion versus $6.14 billion. The firm sees full-year results of $1.95-$2.05 versus $1.83. According to the firm, "We see overall sequential improvement in our industrial businesses as market conditions begin to firm"

• Caterpillar (NYSE:CAT) reported better-than-expected earnings and revenues with earnings of 64 cents 57 cents above Zacks projections as revenues reach $7.29 billion versus $7.53 billion. "We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s. We are seeing encouraging signs that indicate a recovery may be underway"

• Coca-Cola (NYSE:KO) reported quarterly results of 82 cents versus Zacks estimates of 81 cents on revenues of $8.04 billion versus $8.03 billion. According to the company, "We expect the consumer to continue facing economic uncertainties into 2010 and for consumer sentiment to recover slowly"

• Qatar announced plans to sell its $2.1 billion Barclays (NYSE:BCS) stake, locking in a $1.2 billion gain in the shares

Zacks Investment Research

Stock Market News for October 20, 2009 – Market News

Zacks Market Commentaries — Tue, 20 Oct 2009 14:25:52 +0000

With buyers back in action, US stocks rose to their fresh one-year highs and remained near their high points as optimism grew that an economic recovery, helped by solid third-quarter earnings reports and increased M&A activity, is on cards.

The Dow Jones industrial average rose 96.28 points, or 0.96%, to close at 10,092.19. The broader S&P 500 index jumped 10.23 points, or 0.94%, to 1,097.91 and the tech-heavy Nasdaq climbed 19.52 points, or 0.91%, to 2,176.32, its highest point since September 26, 2008. Market breadth was positive, with advancing shares ahead of decliners by a margin of three-to-one. Only five of the DJIA thirty declined in price.

After the close, iPhone maker Apple Inc. (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) reported better-than-estimated numbers, fuelling hopes for the technology industry. Last week Google Inc. (NASDAQ:GOOG) and Intel Corp’s (NASDAQ:INTC) numbers had come in above expectations.

Although there were some jitters last week after some major banks reported higher loan losses during the quarter, expectations that companies across a broad range of industries would report numbers above projections kept the momentum going. Nevertheless, companies could find it relatively easy to beat analyst’s lowered bars of expectations and then turn in splendid performance in the future quarters as the economy moves into a recovery mode.

This week is likely to be decisive with 13 of the Dow 30 and more than 130 of the S&P 500 slated to report their results. The numbers could well be the fodder for the next rally – or a downward spiral – even as a call for a 10-15% correction has gone unmet. This morning's lengthy list of key corporate results, however, continues to surprise on the upside, adding fuel to the rally's fire.

On Monday, the S&P 500 broke above the 1100 mark before retreating a little to settle at 1097, its highest close since October 2, 2008. All ten industry sectors rose, led by gains in basic materials (+1.7%), utilities (+1.4%), oil and gas (+1.2%) and consumer services (+1.2%).

Caterpillar (NYSE:CAT), due to report its earnings today, led the gainers with a 6% jump as analysts upgraded shares of Bank of America (NYSE:BAC) and RBC Capital that took price targets on the stock to $65 per share. American Express (NYSE:AXP), due to report after the close Thursday, climbed 2.3% after FBR lifted its price target on the firm to $37 from $25. On the downside, General Electric (NYSE:GE) shares fell 1.5% as questions continued regarding the price of the 20% stake Vivendi owns in NBC Universal.

Today's market action will be interesting to watch to find how the better-than-expected results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) are seen by the broader indices. Both companies posted strong results, beating top and bottom line expectations. Apple (NASDAQ:AAPL) said results were helped by record quarterly sales of Macintosh computers and iPhones, permitting earnings of $1.82 on strong sales of $9.87 billion. The shares hit an all-time high of $204. TI (NYSE:TXN) also bettered projections, reporting strong demand across all business segments. The company reported earnings of 42 cents a share, ahead of estimates of 39 cents, as revenues of $2.88 billion beat estimates of $2.82 billion, and presented a sequential quarterly gain of 17%.

Today’s list includes Coca-Cola (NYSE:KO), SanDisk (NASDAQ:SNDK), Caterpillar (NYSE:CAT), DuPont (NYSE:DD), Pfizer (NYSE:PFE), Untied Technologies (NYSE:UTX), Yahoo (NASDAQ:YHOO), State Street (NYSE:STT), and Bank of New York Mellon (NYSE:BK).

Zacks Investment Research

October 19th CEOcast Weekly Newsletter

QualityStocks — Mon, 19 Oct 2009 20:51:15 +0000

Companies featured in this edition of the newsletter: CHIP, ENZ, GERS, IWEB, OMCM, ONEZ, XSNX Markets hit fresh highs for ‘09 yet again last week, as the first round of earnings helped to assuage investor concerns that operating results would underpin robust gains in equities this year. All told, the Dow gained 130 points to [...]

Stock Market News for October 19, 2009 – Market News

Zacks Market Commentaries — Mon, 19 Oct 2009 14:15:35 +0000

A bit of selling pressure sent major averages lower at the end of an otherwise upbeat week on Wall Street as Bank of America and General Electric’s numbers disappointed investors. The Dow Jones industrial average, after closing above the 10,000 mark for two successive sessions, finished just below that level. Despite the drop, stocks managed to post impressive gains on the week even as investors grew jittery about credit losses in the financial sector.

Bank of America (NYSE:BAC) said it lost $2.2 billion during the quarter after it wrote down almost $10 billion in bad loans and General Electric’s (NYSE:GE) revenue numbers were below Street projections. Higher loan losses aggravated investors’ concerns as Citigroup (NYSE:C) and JP Morgan (NYSE:JPM) had also reported higher loan losses during the quarter. General Electric’s (NYSE:GE) results were impacted by lower earnings at its GE Capital unit.

The 30-share Dow Jones industrial average fell 67.03 points, or 0.67%, to close at 9,995.91. The broad Standard & Poor's 500-stock index retreated 8.88 points, or 0.81%, at 1,087.68. The tech-heavy Nasdaq composite index lost 16.49 points, or 0.76%, to 2,156.80.

Last week only 61 of the S&P500 released results, too early to signal trends, although the results were mainly above projections. This week hundreds of companies report their earnings, and that could signal where the economy is headed in the times to come. So far most earnings reports have beaten expectations.

Although nine of the ten S&P 500 industry sectors dropped Friday, on the week eight of the ten sectors managed gains. Financials dropped 2.4% Friday, and ended off 0.2% for the week. Oil and gas shares were the leading gainers during the week, up 5%, for a 20.2% year-to-date increase, as crude prices continued their advance, rising 95 cents Friday to $78.53 per barrel. Crude prices have been rising on promising economic signs as well as the dollar's decline. This morning China announced that its economy grew at a rate of more than 7% during the first nine months of the year and said it was comfortably placed to achieve its full-year target of an 8% GDP growth. The greenback rose slightly Friday from a 14-month low.

This week 75 S&P500 firms are due to report their earnings, including today's results from Apple (NASDAQ:AAPL) and Texas Instruments (NYSE:TXN) after the close. On Tuesday results are due from: Caterpillar (NYSE:CAT), Coca-Cola (NYSE:KO), DuPont (NYSE:DD), Pfizer (NYSE:PFE) and United Technologies (NYSE:UTX). On Wednesday: Boeing (NYSE:BA), Freeport-McMoRan (NYSE:FCX), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC). On Thursday: 3M (NYSE:MMM), AT&T (NYSE:T), Credit Suisse (NYSE:CS), Dow Chemical (NYSE:DOW), McDonald's (NYSE:MCD), Merck (NYSE:MRK), and Travelers Cos (NYSE:TRV). Microsoft (NASDAQ:MSFT) reports its numbers on Friday.

Zacks Investment Research

Simulated Environment Concepts Inc.’s (SMEV.PK) SpaCapsule Helps Companies through Massage Therapy

QualityStocks — Wed, 14 Oct 2009 17:12:48 +0000

Stress-related employee turnover, absenteeism and low morale all affect a company’s bottom line. Based on information from the American Institute of Stress and the American Psychological Association, job stress and related problems cost companies an estimated $200 billion or more a year. Massage has been known to reduce blood pressure, relieve arthritis pain, improve joint and [...]

Company News for September 29, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 29 Sep 2009 14:04:09 +0000

• China Unicom also advised iPhones will be sold in China beginning in October. Meanwhile, Apple (NASDAQ:AAPL) said iTunes' application downloads exceeded the 2 billion mark

• MBIA's (NYSE:MBI) main bond insurance unit was downgraded by S&P to non-investment grade status

• Dell (NASDAQ:DELL) revealed a new, high-end, ultra thin PC

• Cameron International (NYSE:CAM) reported a $500 million subsea equipment deal with Petrobras

• Howard Shultz, CEO of Starbucks (NASDAQ:SBUX), offered high hopes for its Via Ready Brew instant coffee product, claiming it "perhaps the biggest opportunity" in the company's history, amid today's North American launch

• Walgreens' (NYSE:WAG) reported fiscal fourth quarter results of 47 cents ex-items, topping estimates of 39 cents, on sales of $15.7 billion

• Goldman Sachs (NYSE:GS) lifted price targets on several retailers, including conviction buys on Target (NYSE:TGT) and Macy's (NYSE:M)

• Citigroup (NYSE:C) started coverage of Dr. Pepper Snapple (NYSE:DPS) and Coca-Cola (NYSE:KO) with "buy" recommendations

• Bank of America (NYSE:BAC) upgraded Phillips-Van Heusen (NYSE:PVH) to a "buy" with a price target of $54

Zacks Investment Research

Stock Market News for September 18, 2009 – Market News

Zacks Market Commentaries — Fri, 18 Sep 2009 14:17:05 +0000

After surging to almost one-year highs Wednesday, stocks took a step back as worries that the recent rally has gone too far, too fast resurfaced. Investors pulled out profits even as latest round of upbeat economic data tried to convince them that a recovery is indeed underway. Shares of companies that have led the recent advance failed to find favor amid a lackluster trading session. Although the retreat was modest, it signaled a growing belief that the rally is overextended.

The Dow Jones industrial average declined 7.79 points, or 0.08%, to end the day at 9,783.92. The broad Standard & Poor's 500 Index retreated 3.27 points, or 0.31%, at 1,065.49 and the tech-heavy Nasdaq Composite Index eased 6.40 points, or 0.30%, to end at 2,126.75. On the New York Stock Exchange, declining shares beat those that advanced by eight to seven on volume of 1.52 billion shares. At Wednesday's close, the DJIA stood almost 50% above its 12-year low of last March; the S&P500 at 58%, with the NASDAQ up 68% from its 6-year low.

Shares of FedEx (NYSE:FDX) and Oracle (NASDAQ:ORCL) declined after the companies’ lower-than-expected results. FedEx’s CEO noted plans to up shipping rates by almost 6% in January, a bullish signal of expected volume growth. FedEx fell 2.2% to $76.46 and Oracle declined 2.8% to $21.52. A decline in natural gas prices sent shares of Chesapeake Energy (NYSE:CHK) and Nabors Industries (NYSE:NBR) lower. Chesapeake fell 3.3% to $27.97. Eastman Kodak (NYSE:EK) fell more than 11% after the company announced plans to raise more than $700 million in senior secured notes.

Among the ten S&P 500 industry groups, telecom companies were the biggest decliners, retreating 1.6%, following UBS' (NYSE:UBS) analyst comments suggesting pressure in wireless business. Verizon Communications (NYSE:VZ) retreated almost 3% to $29.51. Moreover, yesterday Verizon's (NYSE:VZ) CEO suggested its wireless operations would consider dividend payments only after debt reductions. Companies that receive a significant portion of their revenues from overseas operations showed strength, with Caterpillar (NYSE:CAT) up 2.4% and Coca-Cola (NYSE:KO) rising 1.4%. Basic materials shares declined 0.8%, oil and gas was down 0.7%, and financials retreated 0.5%

American Airlines parent AMR Corp. (NYSE:AMR) was a major gainer Thursday as its shares surged 19.7% to $8.80 after the company said it secured $2.9 billion in new financing. AMR also said it is working on its flying schedule and would shift flying to more profitable routes.

Today’s calendar contains little of market-moving interest, with the day's quadruple witching expected to results in volatility. Lacking a firm catalyst for the next upward move, the demand for increased risk eased, with the greenback backing off its one-year high against the euro, oil prices down $0.68 to $71.79, and gold up $2.20 to $1015.70.

Zacks Investment Research

DoCoMo Pursues Global Ambition – Analyst Blog

Zacks Market Commentaries — Tue, 15 Sep 2009 09:30:53 +0000

NTT DoCoMo (DCM) has decided to focus strongly on mobile content offerings, a new avenue to increase revenue. In order to become a powerful mobile content delivery player internationally, the company has decided to acquire German wireless value-added services specialist Net Mobile AG for a consideration of approximately $60.8 million. The deal is expected to be completed by the end of this month. DoCoMo will start implementing LTE (Long Term Evolution) networks in Japan from 2010. The main purpose of deploying the LTE network is to offer mobile content services in Japan and then systematically in the international markets.

Net Mobile is a leading mobile content specialist in Europe offering mobile content distribution and mobile payments services to more than 500 telecom operator and corporate clients. Its major customers include Coca-Cola (KO), RTL2, Vodafone Group Plc (VOD), E-Plus Mobilfunk GmbH, Telefonica O2 Europe Plc, and SwissCom AG (SCM). Additionally, the company has business agreements with various record labels, broadcasters, and film studios for the distribution of music and video content.

At present DoCoMo commands more than 50% of the Japanese wireless market. However, this market is quickly approaching maturity, is low margin and characterized as highly competitive. For the last one year, the company is trying very hard to achieve its two objectives: (1) offers innovative wireless value-added services to its customers (2) become a powerful international player. Management sets a target that international revenue should accounted for 10% of total revenue within a decade.

DoCoMo is on the verge of launching a mobile payment service in Japan for the company’s i-mode mobile internet subscribers using its 3G FOMA network. Leveraging on this, successful acquisition of Net Mobile will enable the company to offer this service in the international markets.

DoCoMo has signed a $66 million joint venture with Avex Entertainment Inc, the largest music and movie content company in Japan, to produce and distribute on-demand mobile videos. The company holds 30% in this partnership. On May 1, the company started a new service called Bee TV. This service offers custom-made videos for mobile phones. As of now, more than 400,000 paying customers have signed up for this service. In last June, DoCoMo has purchased 35% stake in PacketVideo Corp, a subsidiary of NextWave Wireless Inc (WAVE), for a consideration of $45.5 million. This strategic alliance will enhance DoCoMo’s music and video services.

In May 2009, DoCoMo entered into a significant international business agreement through which the company purchase 26% stake of Tata Teleservices Ltd., (TCL), the sixth largest telecom service operator in India, for a consideration of around $2.7 billion. This gives DoCoMo a strong foothold in the world’s second largest emerging market. Earlier, in 2006, the company purchased minority stake in the Philippine mobile service provider Smart Communications Inc and in 2008, DoCoMo also acquired minority stake of Bangladeshi player Aktel.
Read the full analyst report on "DCM"
Read the full analyst report on "KO"
Read the full analyst report on "VOD"
Read the full analyst report on "SCM"
Read the full analyst report on "WAVE"
Read the full analyst report on "TCL"
Zacks Investment Research

Deficit Not As Bad As Feared – Analyst Blog

Dirk Van Dijk — Mon, 14 Sep 2009 15:57:49 +0000

Late Friday, the Treasury Department released the budget deficit for August. It came in at $111.4 billion, which was far better than the $140 billion monthly shortfall that had been expected.

It was also slightly less than the budget shortfall in August 2008. And it was a huge improvement over the $180.7 billion deficit in July. However, don’t get too excited about the month-to-month decline as the monthly budget deficit numbers are extremely seasonal. Although that seasonality is reason to be very optimistic.

Not long ago, the projections for the fiscal 2009 budget deficit were running at about $1.8 Trillion. With 11 months now under our belt (the Government's fiscal year ends in September), the cumulative deficit is now $1.38 Trillion. Thus if September were to come in at the same level as August, the deficit for the year would end up at $1.49 Trillion.

However, it is extremely unlikely that September will come in at the August level. It is almost a sure thing that the September deficit will be significantly less than the August deficit. As a matter of fact, since 1980, the Federal Government has run a surplus in September with only four exceptions, the last of which was in 1991 (the others being 1989, '86 and '82). Thus, having a balanced budget for the month is actually a fairly conservative estimate. In 2008, the September surplus was $45.7 billion.

Now if we do run a surplus in September, don’t get too excited -- we will be back to running a deficit in October. However, there is a very real possibility that the budget deficit for fiscal 2009 will come in at under $1.4 Trillion -- a $400 billion improvement from where we thought it was going to be at the start of the summer.

The key is that the stabilization of the economy has led to a stabilization in tax revenues. It looks like the fears about near-term budget deficits were way overblown.

Now, I don’t want to suggest that $1.4 Trillion is small -- it isn’t, and it is a record any way you cut it. It is almost 10% of GDP. However, it is one heck of a lot smaller than $1.8 Trillion.

I am not particularly worried about short-term deficits. In an economic downturn, we need them. Remember the old Y = C + I + G + (X-M) equation: in a downturn, C (Consumption) shrinks -- and this time around C has to shrink by much more than normal given the huge overleveraging of consumer balance sheets. We have allowed C to become far too large a part of the economy at 71%.

It was not always thus: since the end of WWII, Consumption has only averaged 64.7% of the economy. If consumers are not spending, then businesses are not going to invest to increase capacity. And anyway, in recent decades when businesses have invested to increase capacity, they have not done so in the U.S. -- they have spent the money in Asia. Thus I (Investment) also falls.

We have made good progress on improving the (X-M) or net exports part of the equation, even if we have seen a little bit of back-sliding in the last two months. However, with so much of our imports (M) being oil, it is hard to see how over the medium-term we can make up the difference entirely through slowing imports and expanding exports (X).

A weak dollar will help in that regard, but unless we have a complete collapse of the dollar (which has lots of other problems) I don’t see it doing the trick, especially given the magnitude of the needed consumer deleveraging. However, dollar weakness will greatly benefit U.S. exporters such as Boeing (BA) and those firms like Coca Cola (KO) and Aflac (AFL) that get most of their earnings from abroad.

By process of elimination, then, G (Government) must increase as a share of the economy. Cutting spending or raising taxes in this environment would be economic suicide. That is exactly the policy that Hoover carried out that got us into the Depression. It is also the policy that FDR tried in 1937 and caused the economy to fall back after one of the more robust periods of economic growth in our history (albeit off a very depressed base) from 1933 through the first half of 1937.

A budget deficit can help to stabilize the economy. The stimulus package has been extremely effective in that regard. Back on Presidents Day, very few people thought that we would be looking at the possibility of economic growth in excess of 2% in the third quarter, but now that seems likely.

Fiscal stimulus is sort of like, well, a stimulant. A cup of coffee can be very useful in the morning (I sure know it is for me), and there are medical situations where a doctor would want to give a massive dose. However, if you take stimulants for a long time in high doses, well, you might end up being addicted.

It is the long-term structural deficits that pose the real danger. As President Obama pointed out on Wednesday, over the longer term, the deficit problem is the health care problem. The relentless rise in medical costs is the principal factor in the structural budget deficits going forward. Nothing else even comes close.
Read the full analyst report on "BA"
Read the full analyst report on "KO"
Read the full analyst report on "AFL"
Zacks Investment Research

Stock Market News for September 3, 2009 – Market News

Zacks Market Commentaries — Thu, 03 Sep 2009 14:16:51 +0000

Lingering economic uncertainties kept stocks under pressure for the fourth straight day on Wednesday even as minutes from the Federal Reserve’s last policy meeting showed the economy is slowly turning a corner and inflation is likely to remain restrained. Trading was mostly rangebound as investors chose to remain on the sidelines. As investors went into risk-aversion mode, Treasuries jumped and corresponding yields declined, with the yield on the 10-year tanking to its lowest in more than seven weeks.

Trading may remain subdued as the Labor Day weekend approaches. Nevertheless, today’s trading could benefit from last afternoon’s optimistic FOMC minutes coupled with improved growth expectations from the Organization for Economic Cooperation and Development and Chairman of China’s Securities Regulatory Commission advising regulators will promote stable markets. China’s Shanghai Composite Index jumped 4.8% in an otherwise normal day for Asian bourses. This morning’s stock futures are pointing to a higher opening on the Wall Street as investors turn their focus towards reports on jobs and consumer spending.

Yesterday, the 30-stock Dow Jones industrial average retreated 30 points, or 0.3% and the S&P 500 index slid 3 points, or 0.3%. The Nasdaq composite edged up a paltry 2 points, or 0.2%. During the last three sessions, the DJIA has lost almost 270 points. On the NYSE, volume slowed to 1.38 billion shares and declining stock beat those that advanced three to two. Gold prices jumped 2.3% to $978.50.

The decline was broad based as all but six DJIA components declined. Those leading the Dow lower were Merck & Co. (NYSE:MRK), which declined 3.1% to $30.81 and JP Morgan (NYSE:JPM), which closed down 1.9% to $40.86. Coca-Cola (NYSE:KO) and Cisco Systems (NASDAQ:CSCO) were the leading gainers, rising 2.62% and 1.8%, respectively. Alcoa (NYSE:AA) eased 0.4%. The company said it sees an 8% aluminum demand growth for the second half, due to China's stimulus measures.

The FOMC report released last afternoon showed the economic recovery will likely start gaining momentum in 2010, although there still remains "considerable uncertainty" about its pace. The report noted inflation is likely to stay subdued over the next few years, with some pointing to risks of "substantial disinflation."

Chain store comparable sales reports could be of importance in today's trading, especially considering the recent spike in shares of retailers. Early to report, Costco (NASDAQ:COST) announced a 2% drop in monthly sales. Wet Seal's (NASDAQ:WTSLA) same-store-sales fell 11.2% in August; Children's Place (NASDAQ:PLCE) sales dropped 8%; Limited Brands (NYSE:LTD) fell 4%.

Zacks Investment Research

Getting the Big Questions Right

Dirk Van Dijk — Fri, 28 Aug 2009 21:58:35 +0000

Sometimes in investing there is a tendency to over think things, to get bogged down in the details, to lose the forest through a close study of the trees. It is not that such matters are irrelevant, but that if you get the big major questions right you will be most of the way there.

Unfortunately, most investors tend to avoid even asking the big really important questions, or at least don't act on them. The big questions really tend to boil down to what sectors you should be investing in. Yet, many investors simply rely on indexing instead. Even worse, those that do not explicitly index often invest in mutual funds that "closet index".

Investment managers will do that because there is a big premium put on not being too far away from the "bogey", usually the S&P 500. Sure, it's great if they are substantially better than the index on the upside, but the consequence of sharply lagging, even for only one year, is that you get fired.

The end result is that much of money management turns into the relentless pursuit of mediocrity. It turns out you can make a very good living just mimicking the overall index. After all, the majority of active managers actually underperform the S&P 500 over any given five year time period. Being down 10% when the market is down 8% will not get them fired; however, being up 15% when the market is up 25% will.

In any given year, most fund managers don't underperform by all that much. The reason is that their sector allocations tend to be very close to that of the overall index, and they have overhead costs that eat into the returns. They will then spend a huge amount of time and effort trying to decide if they should buy Exxon Mobil instead of Chevron, Proctor & Gamble or Colgate. The fact is that most of the time, if Exxon is going up, then so is Chevron, and by very similar percentages. Both will tend to be driven by the price of oil. However, if your goal is to beat the market by 1% or 2% per year, and not underperform it by that much, then making the right choice between XOM or CVX can make the difference. If your objective is to create real wealth, you are spending lots of effort for minimal results.

There is a reasonable case to be made for actual indexing, since it aims to lower the overhead costs and, over time, that adds up. There is not much good that can be said for closet indexing. Despite that, it is done all the time, not because it is good for the investor, but because it is a very safe choice for the manager's job security. Just because at the start of 2000 over 30% of the S&P 500 market value was in technology was not a very good reason to have 30% of your money there when some of those stocks were selling for over 30X SALES! But that is what all those closet indexers were buying.

However, if really believe indexing is the answer (because of low costs), I doubt you would be reading this. Just send your money to Vanguard and forget about it. You will not beat the market, but you will not underperform it, and you don't have to pay a lot for it. On the other hand, you are not going to build real wealth that way.

In effect, people took a very good idea, diversification way too far. The reduction of risk (volatility) you get by holding 50% of your assets in one stock and 50% in another is huge. This is particularly true if the stocks are in different industries. But having 101 stocks in your portfolio rather than 100, does not meaningfully reduce your risk. Buying a little bit of everything is fine if you don't really want to work at it, but it will not make you wealthy.

This isn't to say that stock selection counts for nothing. But most of the time within major industry groups the difference is minor compared to the difference between the major groups. For example, look at the chart below that shows the performance of Exxon, Chevron, Citigroup, and Bank of America over the last 3 years. While it is true that you would have preferred to be in CVX instead of XOM over that period and in BAC instead of C, but really, the important decision was to be in oil instead of banking.

To take another example, here is the same sort of chart with Coca-Cola, PepsiCo, Macy's and JC Penney on it. Again the big question was not do you want to have a Coke or a Pepsi? It was would you rather be in soft drinks or department stores?

Picking the right stocks within a group can be very hard to do. Getting the big questions right is not always easy, but can be done with a good understanding of what is happening in the world around you. Since most of your relative return is going to be decided if you are in the right industry, not the right stock within that the industry, doesn't it make sense to spend most of your effort trying to figure out which is the right industry?

The differences in returns between companies in the same industry is in large part determined by the details of their capital structure, the quality of their management, and perhaps their ability to come out with successful new products. Unless you have a lot of time on your hands this can be hard to figure out. Fortunately, the analysts on Wall Street spend all their time focusing on those sorts of details. The most significant items will ultimately find their way into the income statement. The best way to keep track of if things are improving or deteriorating is to see if the analysts are raising or lowering their expectations for future earnings. The Zacks Rank does a very good job of this.

The differences between industries are driven much more by the big trends in the economy. Is the price of oil going up or down? Is the dollar going to be weak or strong? Is inflation going to increase or decrease? Is the economy going to boom or bust? Are consumers in a mood to spend or save? Answering these questions right depends on an understanding of what is happening in the world around us, and then understanding how each of those sorts of questions will affect different industry groups. Getting the big questions right leads to asking the right questions about the little picture. Answering them right leads to big returns.

If you just want to try to beat the market by 1% a year, then weight your portfolio with the same weights that the S&P 500 has and then spend all your time worrying about Coke or Pepsi. If you want real wealth, focus on the big questions. But it's not easy because economics, politics and the stock market are not exact sciences. So if you have a great track record at gauging these 3 areas over time, then I salute you. If not, then you might need some help from folks who do understand these things and have a good track record. Oh yeah, I'm talking about myself.

Think about how much you would have made buying homebuilders in 2000 and riding the wave until 2006. It didn't really matter if you bought Centex or Standard Pacific, you would have made a fortune. I was a portfolio manager then and had the most I was allowed to have in a single industry (per the prospectus) in the group. I am also on record telling people to get out of the group in the middle of 2006, saying the housing bubble was going to burst.

That is what drives our Strategic Investor, the new Zacks service I’m directing. If you have ever read my Strategy Report, you know that I spend a lot of time thinking about those big questions and predicting how they will affect different industries and sectors.

My track record in this regard has been well documented. As early as late 2005, I was urging people to invest in Energy and Commodities. In the middle of 2007, I was pointing out the huge risks to the financial system from the bursting of the housing bubble. In early 2008, I warned that raising the conforming limit was putting Fannie and Freddie in grave danger. At the time, most of the Street was saying things were "contained".

In the Strategic Investor, I will be striving to continue to get the big questions right. I will also answer them with specific investment recommendations aimed at substantial long-term profits. You may want to look into this service today because a significant savings opportunity ends after this weekend.

Click here for more details about the Strategic Investor.

Sincerely,
Dirk van Dijk, CFA

With more than 25 years of experience as an analyst and portfolio manager, Dirk is Zacks' Chief Equity Strategist. He regularly authors market strategy reports and articles, and appears on many investment TV programs. He also manages the new long-term investing service, Strategic Investor.Zacks Investment Research

AmBev’s Upbeat Outlook – Analyst Blog

Zacks Market Commentaries — Tue, 25 Aug 2009 15:45:49 +0000

Earlier this month, Companhia de Bebidas das Americas (AmBev or ABV) reported better-than-expected second quarter figures with excellent results in the key Brazilian market.

Top line grew 8.8% driven by volume growth and price increase across regions. Organic volume growth of 4.1% was a result of a 7% volume growth in Brazil, partly offset by a 3.5% volume decline in Southern Latin America. Canada and Hila-Ex volumes grew 2.3% and 1.1%, respectively, in the period.

EBITDA reached R$2,383.1 million, an organic growth of 13.8 % and margin expansion of 230 basis points to 44.6%. Operating cash flow generation was R$1,991.1 million in the quarter, an increase of 31.4% year over year. Net income was R$1,391.4 million, up 35.1% from the same period of 2008, while EPS grew 34.6% year over year.

Despite the continued efficiency improvements in the North American business, the market remains quite competitive. We remain quite concerned with the difficult economic environment and the recession in the U.S, which makes competition even fiercer. Presently, the company faces competition from Coca-Cola FEMSA S.A.B de CV (KOF) Fomento Económico Mexicano, S.A.B de C.V (FMX) Embotelladora Andina S.A. (AKO.A). Indeed, the outlook for the key U.S. market for 2009 is not encouraging, which is going to affect Canada and AmBev’s North American results in the short term.

We believe that the company is less exposed to the international economic crisis since it is a producer of low cost everyday products, focused on domestic markets. Indeed, we have an optimistic view on the medium to long-term demand for soft drinks in Latin America. In the short run, we believe Brazil will be less affected by the international credit crisis compared to more developed markets such as the U.S., Europe and Japan. Also, a more relaxed monetary policy in Brazil is very positive for the company.

AmBev’s strategy to focus on a few premium brands with the stress on higher quality and higher margins has already started delivering strong results and will continue to deliver robust revenues and earnings. This strategy has enabled the company to deliver strong organic growth, including higher revenues and margins and increase market share, which reached 68.3% in the second quarter from 67.5% in the year-ago period.

Read the full analyst report on "ABV"
Read the full analyst report on "KOF"
Read the full analyst report on "FMX"
Read the full analyst report on "AKO.A"
Zacks Investment Research

Coca Cola Enterprises Inc. – Momentum – Zacks Rank Buy

Michael Vodicka — Mon, 24 Aug 2009 05:00:00 +0000

Coca Cola Enterprises Inc. (CCE) recently broke above a key level of short-term resistance after reporting better than expected second-quarter results on July 29.

Second-Quarter Results

Sales were mostly flat from last year, up .5% to $5.9 billion. Earnings came in at 67 cents per share, 16 cents ahead of the Zacks Consensus Estimate.

Coca Cola has been a steady player in the choppy economy of the last year, beating estimates in each of the last four quarters by an average of 11 cents, or 115%.

Dividend Raised

The company also announced a dividend increase of 4 cents, with CEO John Brock saying the decision was a reflection of the company's stronger balance sheet.

Estimates Jump

Analysts were quick to upgrade their earnings forecasts after the nice beat, with the current-year estimate adding 20 cents and climbing to $1.52 per share. The next-year estimate is also up 20 cents to $1.67, a 10% growth projection.

Valuation

Based on the current-year estimate, this stock has a P/E multiple of 13X, a discount to the overall market with the nice next-year growth projection in tow.

The Chart

Shares of CCE jumped past a short-term level just above $17 in late July after reporting the strong quarter. Take a look below.

Last Week's Momentum Zacks Rank Buy Stocks

Boston Beer Inc. (SAM) is fresh off the heels of another strong quarter, sending shares higher in spite of the company's somewhat cautious tone about tough competition and a tepid consumer environment. Read Full Article.

Bed Bath & Beyond, Inc. (BBBY) posted strong first-quarter results in June that easily beat expectations, sending estimates higher as analysts revise their earnings projections.Read Full Article.

Canadian Solar, Inc. (CSIQ) is up huge since bottoming out in March on surging estimates and cost cutting measures. Read Full Article.

Whole Foods Market, Inc. (WFMI - Analyst Report) has rebounded nicely from its November low as the company continues to pursue price and promotional initiatives to attract value conscious consumers. Read Full Article.

Zacks Investment Research

The Latest Western Insult to Russia

Robert Amsterdam — Tue, 18 Aug 2009 21:23:36 +0000

OK, folks, this has gone far enough. There's no need for the United States and Europe to continue in their unchecked and outrageous aggression against Russia, renewing Cold War tensions and antagonism, no matter how jealous they are of her...

Profiting From the New Chinese Consumerism

QualityStocks — Fri, 14 Aug 2009 19:29:14 +0000

Despite the mis-informed opinions that flow from some on Wall Street, China is becoming less and less dependent on exports to the U.S. More demand for products is coming from China itself. Recent shipping container points to this change. A year ago there were only 56 tons of Chinese imports for every 100 tons of Chinese [...]

Biggest S&P Est Increases – Analyst Blog

Dirk Van Dijk — Tue, 11 Aug 2009 20:55:35 +0000

When you invest in a stock, one of the best things you can see is analysts raising their expectations about what the company is going to earn for the current fiscal year. There are several ways of measuring this, but the following is a list of the companies with the biggest increases in their consensus earnings expectations for this year over the last month.

To make the list, a company had to have a current mean (average) estimate of over 50 cents, be a member of the S&P 500 and have at least three estimates for this year. The 50-cent restriction was put in to prevent small dollar changes that are huge percentage moves from dominating the list (going from a penny expected to a nickel). Having 3 or more estimates also helps insure it was not a fluke. The S&P 500 restriction was put in to make sure we are dealing with substantial companies.

Most likely these firms either reported much better than expected earnings, or communicated better times coming in their conference calls to the analysts after earnings were announced. Notice that there are companies from a wide variety of industries on this list. Often the best strategy is to pick stocks where the overall level of expectations is low -- for example, where the expected earnings level for this year is well below last year’s level, but where the analysts are starting to think that things might just be bad, not a disaster. The low level of earnings causes the stock price to be depressed, and when the worst does not happen, the stock rebounds.

Also, a consensus estimate in motion tends to remain in motion (notice how for most of the firms the 12-week change is larger than the 4-week change). If the analysts have been raising their estimates, they are far more likely to continue raising them than turn the other direction and start cutting them. Having a large number of estimates moving in the same direction has also been useful in predicting which direction a stock is likely to go in the near future.

This list is a good starting point to investigate companies that might be worth investing in.

I will post a second list with the stocks with the biggest estimate cuts shortly, which if they are in your portfolio should be candidates for culling from the herd.

Company	Ticker	2009 Zacks Consensus	4-Week % Change	Positive Revisions	Negative Revisions	EPS Growth	P/E
Intl Paper	IP	$0.60	400.00%	12	0	-70.30%	33.63
Fifth Third Bk	FITB	$0.77	201.85%	14	0	135.12%	12.57
Hess Corp	HES	$1.10	116.78%	7	1	-84.98%	49.8
Freept Mc Cop-B	FCX	$2.59	69.00%	10	1	-62.19%	24.45
Western Digital	WDC	$3.04	43.58%	11	0	19.56%	10.53
Caterpillar Inc	CAT	$1.49	32.59%	14	1	-73.67%	32.07
Avery Dennison	AVY	$1.78	27.18%	8	0	-41.76%	15.47
Franklin Resour	BEN	$3.34	21.46%	13	1	-49.95%	28.23
Cameron Intl	CAM	$2.22	19.04%	13	0	-17.01%	15.37
Apache Corp	APA	$4.86	18.07%	14	1	-58.18%	17.93
Noble Energy	NBL	$2.82	17.90%	12	1	-60.04%	21.44
Whirlpool Corp	WHR	$3.89	17.30%	5	0	-29.24%	15.87
Texas Instrs	TXN	$0.84	17.21%	25	1	-44.67%	28.66
Goldman Sachs	GS	$15.25	16.74%	16	1	241.21%	10.73
Gannett Inc	GCI	$1.53	15.69%	5	0	-57.54%	5.05
Wells Fargo-New	WFC	$1.66	15.18%	17	2	120.93%	17.36
Expedia Inc	EXPE	$1.13	14.97%	10	0	-1.67%	19.92
Jpmorgan Chase	JPM	$1.61	14.76%	10	3	93.75%	26.34
Eastman Chem Co	EMN	$2.89	14.07%	7	0	-35.83%	18.26
Coca-Cola Entrp	CCE	$1.50	14.00%	7	0	13.26%	12.99
Intuitive Surg	ISRG	$5.27	13.46%	12	0	2.95%	43.66
Black & Decker	BDK	$1.78	13.37%	9	0	-63.57%	23.25
Corning Inc	GLW	$1.17	12.08%	13	0	-25.76%	14.54
Autonation Inc	AN	$1.03	11.00%	6	1	2.73%	19.45
Whole Foods Mkt	WFMI	$0.85	10.93%	7	0	-19.98%	33.51
Radioshack Corp	RSH	$1.53	10.41%	15	0	0.54%	10.6
Newell Rubbermd	NWL	$1.26	10.23%	10	0	3.07%	11.02
Devon Energy	DVN	$2.99	10.12%	10	2	-69.78%	21.31
T Rowe Price	TROW	$1.42	9.91%	15	2	-22.13%	34.36
Pactiv Corp	PTV	$2.40	9.86%	8	0	37.20%	10.82
Iron Mountain	IRM	$0.94	9.75%	6	0	25.04%	31.46
3M Co	MMM	$4.19	9.32%	16	0	-18.74%	17.39
Fmc Tech Inc	FTI	$2.60	9.23%	10	0	-4.26%	16.76
Invesco Ltd	IVZ	$0.70	8.84%	13	2	-46.52%	29.51
Cf Indus Hldgs	CF	$7.60	8.75%	4	1	-47.29%	10.98
Amerisourcebrgn	ABC	$1.77	8.47%	13	1	22.54%	11.49
Tjx Cos Inc New	TJX	$2.36	8.29%	14	0	17.45%	15.03
Mylan Inc	MYL	$1.16	8.05%	14	0	45.00%	11.37

Read the full analyst report on "IP"
Read the full analyst report on "FITB"
Read the full analyst report on "HES"
Read the full analyst report on "FCX"
Read the full analyst report on "WDC"
Zacks Investment Research

Buy, Sell or Hold: Will PepsiCo Inc.’s (NYSE: PEP) Recent Acquisitions Pay Off?

Contrarian Profits — Mon, 10 Aug 2009 20:00:07 +0000

pSince I recommended strongPepsiCo Inc. (NYSE: a href="http://www.google.com/finance?q=PEP" target="_blank"PEP/a)/strong a href="http://www.moneymorning.com/2008/10/20/buy-sell-or-hold-pepsico-inc/" target="_blank"on Oct. 20/a, the stock has greatly outperformed the market, up about 10%. /p pHowever, the stock has underperformed since the market began its rebound on March 10. And since the end of March, Pepsi’s shares have lagged those of arch rival, strongThe Coca-Cola Co. (NYSE: a href="http://www.google.com/finance?q=ko" target="_blank"KO/a)/strong, since the end of March, as well. a href="http://www.moneymorning.com/2009/08/03/coca-cola/" target="_blank"I recommended Coca Cola last week after the company reported stellar growth in the emerging markets/a./p pWhile Pepsi’s less-than-stellar performance is not yet a major concern, the trend is discomforting. In addition, there has been a major divergence in the strategies of these two companies./p pWhile both Coke and Pepsi divested of their bottling operations many years ago, a href="http://www.moneymorning.com/2009/08/04/pepsi-bottlers-merger/" target="_blank"Pepsi just agreed to buy#8230;/a/p

Buy, Sell or Hold: Will PepsiCo Inc.’s (NYSE: PEP) Recent Acquisitions Pay Off?

Contrarian Profits — Mon, 10 Aug 2009 20:00:07 +0000

Buy, Sell or Hold: The Coca-Cola Company (NYSE: KO) Continues to Deliver Knockout Profits

Contrarian Profits — Mon, 03 Aug 2009 14:51:38 +0000

pBack on a href="http://www.moneymorning.com/2009/02/17/ko-coca-cola/" target="_blank"Feb. 17, as the market was on sell-off mode, I recommended buying/a strongThe Coca-Cola Co./strong strong(NYSE: a href="http://www.google.com/finance?q=ko" target="_blank"KO/a)/strong. The stock is up some 16% from our entry point. That’s because Coca-Cola recently reported a near-20% jump in profit, which soared to 67 cents a share, excluding restructuring charges./p pCoca-Cola beat earnings, increased guidance, increased dividends and reinstated its stock buyback program. The company plans to repurchase $1 billion in shares of stock in the second half of 2009. What more do we need? The answer is: Consistent performance./p pAs I tracked the developments in Coca Cola and their global markets, I ascertained that my original view remains unchanged and Coca Cola should keep growing profits consistently, which should keep propelling its stock up./p pRemember, on March 9,#8230;/p

FEMSA Reports Strong Top Line – Analyst Blog

Zacks Market Commentaries — Tue, 28 Jul 2009 21:05:39 +0000

In the middle of a tough operating environment, Fomento Economico Mexicano, S.A. de C.V., also known as FEMSA (FMX) delivered 18.8% year over year growth in revenues, 16.1% operating income, and15.0% in EBITDA driven mainly by its double-digit performance at Coca-Cola FEMSA (KOF) and FEMSA Comercio. However, net income increased just 0.3% to MXN$2,505 million (US$187.6 million) from MXN$2,496 million in the year-ago quarter.

KOF’s total revenue, which accounted for 74% of the FMX’s revenue, increased 30.4% to MXN$24,184 million (US$1,811.5 million) versus MXN$18,544 million in the year ago quarter, due to positive exchange rate translation effect and the consolidation of REMIL in Brazil and Brisa in Colombia, which contributed approximately 30% and 20% of incremental revenues in the quarter. Operating income grew 16.0% to MXN$3,677 million (US$275.4 million) from MXN$3,169 million in the second quarter of 2008, mainly driven by double-digit operating income growth in the Latincentro and Mercosur divisions. Thus, consolidated majority net income in the quarter reached MXN$2,161 million (US$161.9 million), up 17.2% from MXN$1,844 million in the second quarter of 2008.

FEMSA Comercio’s total revenue increased 13.3% and reached MXN$13,554 million (US$1,015.3 million) in the second quarter of 2009 compared to same period in 2008. The increase was mainly driven by the opening of 269 net new stores in the quarter. Thus, operating income grew 40.9% to MXN$1,088 million (US$81.5 million) from MXN$772 million in the second quarter of 2008. EBITDA increased 36.4% to MXN$1,420 million (US$106.4 million) from MXN$1,041 million in the year ago quarter.

During the quarter Mexican domestic beer sales volume decreased 5.9% from the same quarter of 2008; Brazilian beer sales volume decreased 8.4%, while export beer sales volume increased 2.4%. Total revenue from FEMSA Cerveza increased 6.7% year over year to MXN$11,880 million (US$889.9 million).

The company recorded a cash balance of MXN$17,702 million (US$1,338 million), an increase of MXN$8,243 million (US$ 623.1 million) compared to the same period in 2008, reflecting the cash earmarked to pay down some of FEMSA’s local-currency bonds and KOF’s Yankee bond and other debt, which became due in early July. Net debt decreased by MXN$1,328 billion year over year and MXN$8,371 million sequentially for a net debt balance of MXN$30,987 million (US$ 2,342.2 million) at the end of second quarter 2008.

The company has been able to post positive operating numbers within a very competitive market. Moreover, we believe Latin American remains one of the most attractive areas for the beverage industry in the medium-term, due to the positive demographics. Thus, we reiterate our Buy recommendation on FMX.
Read the full analyst report on "FMX"
Read the full analyst report on "KOF"
Zacks Investment Research

Invest Like Buffett: Dump Moody’s and Snatch Up These 11 Stocks

Contrarian Profits — Fri, 24 Jul 2009 20:48:25 +0000

p class="MsoNormal"Warren Buffett’s Berkshire Hathaway Inc (NYSE:BRK.A) is finally starting to offload its 20% stake in ratings agency Moody’s Corporation (NYSE.MCO). /p p class="MsoNormal"Here are listed sales in the filing, courtesy of 24/7WallStreet.com:/p p class="MsoNormal" /pp class="MsoNormal"· 7/20/09… 1,817,000 at $28.7269 average in open market sale./p p class="MsoNormal"· 7/21/09… 3,915,100 at $26.9188 average in open market sale./p p class="MsoNormal"· 7/22/09… 2,254,200 at $26.6425 average in open market sale./p p class="MsoNormal" /pp class="MsoNormal"What took Buffett so long to start selling Moody’s? We have no idea. Moody’s runs one of the biggest scams on Wall Street. It charges the companies whose securities it rates (just like Standard #38; Poor’s and Fitch also do)./p p class="MsoNormal"So what do you think these ratings agencies did when presented with a whole load of junk mortgage-backed securities to rate? They assigned them investment#8230;/p

Pepsico and AmBev – a Cola and a Beer, Together?

Investment U — Wed, 22 Jul 2009 21:10:02 +0000

Pepsico and AmBev - a Cola and a Beer, Together? Tony Daltorio, The Investment U Research Team According to a recent research study for the Financial Times prepared by the consulting firm Wolff Olins, the world’s next top brands are set to rise in the east. A strategist at Wolff Olins, Melanie McShane, stated [...]

PepsiCo Beats; Reaffirms Guidance – Analyst Blog

Zacks Market Commentaries — Wed, 22 Jul 2009 14:37:23 +0000

PepsiCo (PEP) earned $1.02 per share last quarter, excluding one-time items, a penny ahead of expectations. A year prior, the company earned $1.05.

Management reaffirmed its guidance for 2009. Both net revenue and EPS are expected in the mid to high single-digit growth range. The company expects foreign exchange to have approximately 6% negative impact on the EPS.

As far as the second quarter results, net revenues declined 3% during the quarter, attributable to declines in Quaker Foods North America - QFNA (-2.5%), Latin America Foods - LAF (-9.5%), PepsiCo Americas Beverages - PAB (-9.1%), United Kingdom and European Union - UKEU (-10.6%) and PepsiCo International (-3.9%). These declines more than offset growth in Middle East/Asia/Africa - MEAA (+5.3%), and Frito-Lay North America - FLNA (+6.4%).

The FLNA segment benefited from robust product innovation including line extensions of its core brands focusing on the segment’s health and wellness offerings. QFNA revenues declined primarily due to a shift towards lower priced products. In the PAB segment, revenues declined primarily due to challenging dynamics in the liquid refreshment beverage (LRB) market, shifts towards lower-priced products, stiff competitive environment and certain strategic choices on management’s part. LAF revenue growth declined due the negative impact of foreign currency. The UKEU revenue declined reflecting adverse foreign currency. MEAA segment revenue growth was driven by volume growth and favorable net pricing and mix.

PepsiCo is investing aggressively in R&D (research and development) in order to drive innovation to differentiate brands. Additionally, as part of its strategy to grow in key markets, the company intends to invest $1 billion over the next four years in China and another $1 billion in Russia over the next three years.

PepsiCo’s primary competitor, Coca-Cola (KO) topped expectations yesterday with profits of 92 cents per shares.
Read the full analyst report on "PEP"
Read the full analyst report on "KO"
Zacks Investment Research

Stock Market News for July 22, 2009 – Market News

Zacks Market Commentaries — Wed, 22 Jul 2009 14:26:20 +0000

Federal Reserve Chairman Ben Bernanke’s assessment that the economy is showing signs of stabilization and better-than-expected earnings report from companies pushed the Dow Jones industrial average to its highest level in six months even as the session remained volatile and most stocks seesawed. Reports of losses at a number of regional banks had financials stocks under pressure. Bernanke’s prediction of rising unemployment was also a reason for the subdued tone on the Street. In his testimony on the Hill, Bernanke warned that "even if the economy begins to turn up in terms of production, unemployment is going to say high for quite a while, so it's not going to feel like a really strong economy."

The Dow Jones industrial average ended up 68 points, or 0.8% and the broader S&P 500 index edged up 3 points, or 0.4%, its highest close in 8 months. The tech-heavy NASDAQ added 7 points, or 0.4%, and recorded its 10th consecutive day of gains.

Crude prices continued to climb, advancing 74 cents to $64.81, and climbing over $65 for the first time in more than two weeks. Bond prices gained as Fed Chairman Bernanke noted that interest rates are likely to remain low for an "extended period." The 10-year rose 1 1/32 and the yield declined to 3.484%.

Gains in the DJIA were driven by a 7.7% advance in Caterpillar (NYSE:CAT) and a 6.1% jump in Merck (NYSE:MRK). Caterpillar (NYSE:CAT) reported a much smaller-than-expected earnings decline and raised its full-year guidance, fueling hopes for a global industrial recovery. However, Caterpillar’s (NYSE:CAT) stocks pared gains after it said third quarter would be the year's weakest for sales and profits.

Gains in the S&P500 were led by health care (+1.4%), oil and gas (+1.2%), and utilities (+1.1%). Three industrial groups declined, with financials off 0.8%, consumer services down 0.3%, and industrials off 0.2%. After the close, Apple (NASDAQ:AAPL) reported non-GAAP earnings to $2.14 per share, well ahead of consensus estimates of $1.17, helped by a 626% surge in iPhone sales; revenues of $8.34 billion exceeded consensus projections of $8.2 billion. Yahoo's (NASDAQ:YHOO) reported earnings of 16 cents a share, inline with last year's figures and eight cents ahead of estimates; sales declined 13% to $1.57 billion; the company’s third quarter guidance was, however, below Street estimates.

Regions Financial (NYSE:RF) and State Street (NYSE:STI) posted results which fell well short of last week's strong financial numbers. Coca-Cola (NYSE:KO) noted the US consumer remains under pressure. The three airline majors posted dismal results, as leisure travel bookings held, but business travel weakened. Southwest (NYSE:SWA) turned a profit, but said the situation was yet to improve. UAL (NYSE:UAL) said it expects a 12% drop in overall capacity in the second half. Continental (NYSE:CAL) reported a loss of $1.36 a share that was well off expectations of a 5 cent per share loss.

Zacks Investment Research

Coca Cola Meeting Targets – Analyst Blog

Zacks Market Commentaries — Tue, 21 Jul 2009 18:16:02 +0000

Coca Cola (KO) reported strong second quarter results with earnings of $0.88 per diluted share, up 44% versus the prior-year. However, excluding items impacting comparability, earnings were down 9%.

Net revenues declined 8.6% during the quarter year-over-year due to a 9% negative impact from currency translation, a 2% decline from bottling divestitures and a 1% impact from pricing and mix. This was partially offset by a 3% increase in concentrate sales.

Worldwide unit case volume increased 4% in the quarter, aided by a 5% improvement in international unit case volume and a 3% growth in the Coca Cola trademark brand. The emerging markets of India and China grew an impressive 33% and 14%, respectively. In addition, strong unit case volume growth was observed in other key markets including Japan, Brazil, Mexico, Argentina, Thailand, Korea and Northwest Europe. Europe posted a 1% volume growth, while North American volume declined 1%, primarily due to the tough macro economic environment.

Carbonated soft drink (CSD) case volume grew 2% during the quarter, after continued declines for more than a year. Non-carbonated beverage (NCB) volume increased 8%, led by sound growth across the portfolio, including juices and juice drinks, sports drinks, teas and water brands. In North America, NCB’s increased 1%.

During the first half of the year, the company delivered volume and profits in line with its long-term growth targets, despite the challenging global economic conditions. KO topped the non-alcoholic ready-to-drink industry in most of its key markets, thereby driving further global volume and market share gains. Management states that its investments in key growth markets such as China, Mexico, India and Brazil contributed to the results.

The company is on track to achieve the $500 million target in annualized savings by 2011, and expects to deliver more than half of the savings by the end of 2009.

Coca Cola also rolled out its 2020 Vision, which is the roadmap for the company to grow along with its worldwide bottling partners. Management stated that the 2020 Vision roadmap is improving clarity and focus of the global business. It therefore expects better utilization of growth opportunities going forward.
Read the full analyst report on "KO"
Zacks Investment Research

Earnings Optimism Hides Ugly Truth

Investment U — Tue, 21 Jul 2009 16:08:25 +0000

Earnings Optimism Hides Ugly Truth by The Investment U Research Team The mood seems to have soured on Wall Street since its bounce early this morning. And if you peer beneath the headlines, you can see why. The big news has been Caterpillar’s (NYSE: CAT) earnings, which tripled analyst’s expectations. But as we look deeper, [...]

Bernanke Defends His Policies – Analyst Blog

Charles Rotblut — Tue, 21 Jul 2009 15:41:56 +0000

Fed Chairman Ben Bernanke's prepared remarks read more like a defense of his leadership than an assessment of the economy.

In his semi-annual testimony before Congress, Bernanke spent most of his verbiage discussing the Fed's actions in responding to the financial crisis and its steps to protect the consumer. He also said that plans for an exit strategy were being developed.

Typical of the Chairman's comments was this statement: "Many of the improvements in financial conditions can be traced, in part, to policy actions taken by the Federal Reserve to encourage the flow of credit."

As far as the state of the economy, Bernanke opined that the U.S. is moving towards stabilization, but that the labor markets will remain weak. He does not anticipate inflationary pressures in the foreseeable future, and basically ruled out any rate hikes this year.

Though there was some news for bond traders, by and large, Bernanke's comments really did not provide much new insight into central bank policy. Rather, the Chairman seemed more focused on keeping his job and defending his actions.

The take-away from this morning's testimony is that Bernanke is aware of the economic environment and is prepared to react accordingly.

For stock traders, however, the focus should be on earnings announcements. We've already seen Caterpillar (CAT) and Coca-Cola (KO) top expectations this morning, and we'll see if Apple (AAPL) can continue the trend after the market close.

The S&P 500 (SPX) is above resistance, but it will take more good news on the earnings front -- not more words from Bernanke -- to send stocks even higher.

The full text of Bernanke's speech can be viewed on the Fed's web site. http://www.federalreserve.gov/newsevents/testimony/DBBB5C9F26B6440AA4A21E104A61577A.htm
Read the full analyst report on "CAT"
Read the full analyst report on "KO"
Read the full analyst report on "AAPL"
Read the full analyst report on "SPX"
Zacks Investment Research

Company News for July 21, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 21 Jul 2009 14:30:28 +0000

• Caterpillar (NYSE:CAT) reported earnings of 72 cents a share, versus consensus estimates of 22 cents. The company also increased its year-end guidance to $1.15 to $2.25 a share, up from Street estimates of $1.01

• Coca-Cola (NYSE:KO) reported global case volume increased 4% during the quarter, with earnings coming in at 92 cents a share, ahead of Street estimates of 89 cents a share

• DuPont (NYSE:DD) reported second-quarter earnings of 61 cents a share, ahead of projections of 53 cents a share. The firm provided full-year guidance of $1.70 to $2.00 a share, versus consensus views of $1.70 a share

• Merck (NYSE:MRK) reported second quarter earnings of 83 cents a share, beating estimates by 6 cents, as revenues dropped 2.5% to $5.9 billion

• Western Union (NYSE:WU) posted better-than-estimated second quarter earnings of 32 cents a share, 2 pennies ahead of Street projections on in-line revenues, which dropped 6.9% to $1.25 billion

• UnitedHealth Group (NYSE:UNH) reported second-quarter earnings of 73 cents a share, three cents ahead of expectations, on revenues of $21.66 billion, slightly off estimates of $21.77 billion. The company increased its 2009 earnings outlook to $3.00 to $3.15 a share from $2.90 to $3.15 earlier

• Regions Financial (NYSE:RF) reported a second quarter loss of 28 cents a share, missing projections by 6 cents

• United Technologies (NYSE:UTX) topped estimates, but cut guidance as the firm posted one penny better than estimated second quarter numbers of $1.05, on revenues of $13.2 billion, versus estimates of $13.92 billion. For the year, the company lowered its top end guidance from $4.50 with a $4.00-$4.20 range, cutting revenue estimates to $53 billion

Zacks Investment Research

Stock Market News for July 21, 2009 – Market News

Zacks Market Commentaries — Tue, 21 Jul 2009 14:26:58 +0000

Continued optimism and new signs that the economy is showing signs of resilience pushed stocks higher Monday with the major indexes recording broad based gains and the S&P 500 index zooming off to its highest level since November. Just a little over a week ago, weak unemployment numbers, weaker-than-expected retail sales and disappointing confidence data had investors worrying and talks of a second stimulus package started to gain ground. However, impressive earnings numbers, robust outlook from companies and a number of analyst upgrades have boosted investor confidence as they have appeared increasingly eager to participate in riskier bets.

On Monday stocks hit their highest levels since November 5, as all ten industry groups on the S&P500 moved higher during the session, led by consumer, commodity and industrial stocks. The gains were led by basic materials (+2.4%), industrial (+1.9%) and oil and gas (+1.5%). The DJIA added 1.2% or 104 points to close at 8,848 points. The NASDAQ rose 1.2% to finish at 1,909; the S&P500 index rose 1.1% to 951. The US dollar fell to six-month lows against a basket of foreign currencies as its safe-haven appeal lost its allure.

Helping the gains yesterday was Goldman Sachs which raised its forecast for the S&P 500 index, saying better earnings will spur the steepest second-half rally since 1982. The bank raised its year-end target for the index to 1,060. Nevertheless, the firm pointed out that "the US economic backdrop represents the most significant risk to our equity market forecast," and "the risk of a double-dip recession is significant." Sentiments also got a boost from reports that said small and mid-sized corporate lender CIT Group (NYSE:CIT) avoided an imminent bankruptcy with $3 billion rescue financing from some major bondholders, following last week's collapse of a government bailout.

Also buoying sentiments were a number of analyst upgrades, including a Bank of America/Merrill (NYSE:BAC) report on Caterpillar (NYSE:CAT), asserting demand for its construction machinery likely bottomed in the second quarter, with a recovery expected to begin next year. After the close, Texas Instruments (NYSE:TXN) beat projections for the second quarter, but CFO March warned, "The global economy is, by all indications, still declining," ..."What we are seeing here is that the rate of inventory depletion slowed down quite a bit."

Twelve DJIA components are scheduled to report this week, and among S&P500 stocks 145 are due to report their earnings during the week. According to Bloomberg, on average, S&P500 firms have topped estimates by 15% since July 8; Thomson Reuters' numbers show S&P500 results, boosted by last week's strong financial firm numbers, fell 35.2%, compared with a prior second-quarter estimates of a 35.7% decline.

Monday's economic post of three straight months of improvements in the Conference Board's Index of Leading Economic Indicators, also helped sentiments on the Street, with its 0.7% rise in June, which beat estimates of a 0.5% increase.

As Federal Reserve Chairman Bernanke presents his semi-annual economic report to Congress at 10:00 AM ET, he may point to weak economic conditions as evidence that the inflation outlook remains subdued, paving the way for the Fed to maintain current low interest levels. While most expect Bernanke will mention exit strategy options, few expect clear details and timing to be offered.

Today's earnings calendar is heavy with numbers due from Apple (NASDAQ:AAPL), Caterpillar (NYSE:CAT), Coca-Cola (NYSE:KO), DuPont (NYSE:DD), Merck (NYSE:MRK), United Technologies (NYSE:UTX) and Yahoo (NASDAQ:YHOO).

Zacks Investment Research

Coca-Cola Hellenic: Think Strength – Analyst Blog

Zacks Market Commentaries — Mon, 13 Jul 2009 17:52:29 +0000

Coca-Cola Hellenic Bottling Company (CCH) will report first half 2009 financial results on Thursday, August 6th at 8:30 am Athens Time (1:30 am New York Time). We are expecting second quarter earnings of $0.59 and rate the stock a Buy.

Since the company conducts business and reports financial results in Euros, much of the stock’s performance is inversely correlated with US dollar’s exchange rate with the Euro. Exchange rates are a key driver of the company’s financial results, and hence, the stock’s price. Much of the stock’s outperformance in 2007 was due to US dollar weakness relative to the Euro.

Earnings results for the second quarter of 2009 will be negatively impacted by the year-over-year 10% decline in the Euro versus the US Dollar. Hence, our $0.59 estimate represents a 24% year-over-year decline from the $0.78 reported in the comparable prior-year quarter.

However, management has a sound business strategy and proven execution skills. The company enjoys a broad mix of geographies, a diversified portfolio of beverage brands and strong marketplace execution. Coca-Cola Hellenic Bottling Company is one of the largest bottlers of soft drinks in Europe, operating in 28 countries. The recent earnings weakness in terms of year-over-year comparisons is providing a valuation-based buying opportunity.
Read the full analyst report on "CCH"
Zacks Investment Research

Coca-Cola Expands in China – Analyst Blog

Zacks Market Commentaries — Wed, 08 Jul 2009 22:05:21 +0000

The Coca-Cola Company (KO) and its bottling partner COFCO Coca-Cola Beverages Ltd. continued their expansion in China with the opening of two new bottling facilities in July 2009, located in less-developed central and western China. The new facilities are proof the company’s long-term commitment in China as part of the recently announced $2 billion, 3-year investment plan, which is primarily aimed to strengthen further growth in one of the world's largest and fastest growing beverage markets.

The bottling facility at Xinjiang is expected to provide a strategically important platform for continuous growth of Coca-Cola in Northwestern China, which is the largest province. Similarly, the company also opened another new bottling plant in Nanchang, Jiangxi Province. This plant will provide refreshing Coca-Cola products to the 44 million consumers in this central region.

Management states that by opening new plants in Jiangxi and Xinjiang, the company will be able to increase its geographic presence, and enhance its competitive edge in China, while supporting local community development through jobs, local procurements and education. The expansion of KO in China is a trend followed by many consumer companies seeking growth in emerging markets, due to sluggish performance in North America.

PepsiCo (PEP) also announced that, beginning in 2008, it would invest $1 billion in China over the following four years. The investment includes the expansion of manufacturing capacity and local research and development catering to new products tailored to Chinese consumers, in addition to building the company’s sales force and fund brand-building initiatives.

Campbell Soup Company (CPB) also expanded its Swanson broth to China, especially Shanghai, which is a leading soup market in China with highest per capita soup consumption -- almost 72% of the population consumes a bowl of soup every day.
Read the full analyst report on "KO"
Read the full analyst report on "PEP"
Read the full analyst report on "CPB"
Zacks Investment Research

Nonfarm Payrolls Worsen in June – Analyst Blog

Charles Rotblut — Thu, 02 Jul 2009 14:28:12 +0000

U.S. employers cut 467,000 jobs last month, sending the unemployment rate up to 9.5%. This was the first time since January that nonfarm payrolls worsened.

The June drop was also far worse than economists had projected. Offsetting the bad news was a positive revision to May's number, with "just" 322,000 jobs being shed in the month.

Though the June unemployment rate was only fractionally higher than the month previous, it does imply that more than 1 out of every 11 Americans is unemployed. This is a conservative estimate, given that the unemployment rate has been previously criticized for under-counting the number of jobless workers.

This morning's data reinforces what I have said before: the economy is not out of the woods. Though economic conditions are clearly better than they were a few months ago, we remain in the midst of a recession.

Furthermore, once the economic data does finally start showing growth, it won't feel like a recovery to many Americans. Jobs will continue to be shed as CFOs focus more on cash flows than expansion. It's going to be a long, slow recovery.

Given the current backdrop, investors need to start positioning their portfolios for growth while not being overly aggressive. Look at companies that could benefit from the early stages of a recovery, such as International Business Machines (IBM), Research in Motion (RIMM), National Semiconductor (NSM) and Weatherford (WFT). At the same time, balance out the portfolio with more conservative names like Sara Lee (SLE) and Coca-Cola Femsa (KOF).

What you don't want to do is to be overly aggressive and buy companies that still have too much economic risk, such as Nordstrom (JWN), or stocks that have gotten ahead of themselves, like Palm (PALM).
Read the full analyst report on "IBM"
Read the full analyst report on "RIMM"
Read the full analyst report on "NSM"
Read the full analyst report on "WFT"
Read the full analyst report on "SLE"
Read the full analyst report on "KOF"
Read the full analyst report on "JWN"
Read the full analyst report on "PALM"
Zacks Investment Research

Coca Cola Sets Up New Bottling Plants In China

China Retail News — Mon, 29 Jun 2009 19:30:56 +0000

Beverage company Coca Cola has announced the opening of its 37th bottling plant in China. Located in Nanchang city, Jiangxi province, the new bottling plant is invested in by COFCO Coca-Cola Beverages, Coca Cola's joint venture with China National Cereals, Oils & Foodstuffs Corp., and covers an area of 147,000 square meters, with initial investments of [...]

How to Make 20 Times Your Money Buying the World’s Safest Stocks

Contrarian Profits — Fri, 26 Jun 2009 15:35:13 +0000

h2The most fundamental tenet of investing is that risk and reward go hand in hand. The greater the potential reward, the greater the risk. The lower the risk, the lower the reward you can expect. This leads many investors to believe that the surest way to make big gains in the stock market is to take big risks (even if they don’t think what they are doing is risky). But it’s not true. In fact, the biggest gains in the stock market, by far, come from the safest stocks./h2 div class="entry" pI will prove it to you. And I will also show you how to make 10-20 times your money in addition to 20% - 30% annual yields, while owning a portfolio that#8230;/p/div

Morgan Revises Brazilian GDP Up – Analyst Blog

Zacks Market Commentaries — Wed, 17 Jun 2009 16:07:16 +0000

Some months ago during the difficult moments of the financial crisis, Morgan Stanley (MS) issued a report forecasting a GDP contraction of 4.5% for Brazil in 2009. We always had a more benign view on emerging markets in general and Brazil in particular.

We had been stressing that: (i) the Brazilian banking system remains sound, (ii) domestic interest rates have huge room for cuts and (iii) Brazil is still a "closed" country which does not rely overly much on exports and imports. All this together points to a more positive economic environment in Brazil in 2009, if compared to more developed economies like those in Europe, the U.S. and Japan.

The more positive view on Brazil (and other emerging markets, particularly China and India) is now considered basic common sense. Yesterday Morgan Stanley announced that it revised its expectation for the Brazilian GDP from -4.5% to just -1% for 2009. For 2010, Morgan Stanley revised its estimate from +0.5% to +2.5%. We believe the new numbers are a better portrait of the current economic situation in Brazil.

We continue to favor companies with strong exposure to the Brazilian domestic market. We like Vivo (VIV), Cemig (CIG), Sabesp (SBS) and Coca-Cola Andina (AKO.A).
Read the full analyst report on "MS"
Read the full analyst report on "VIV"
Read the full analyst report on "CIG"
Read the full analyst report on "SBS"
Read the full analyst report on "AKO.A"
Zacks Investment Research

Zacks Analyst Blog Highlights: McDonald’s, Coca-Cola, PepsiCo, Procter & Gamble and Colgate-Palmolive. – Press Releases

Zacks Market Commentaries — Wed, 17 Jun 2009 13:47:41 +0000

For Immediate Release

Chicago, IL - June 17, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald's (MCD), Coca-Cola (KO), PepsiCo (PEP), Procter & Gamble (PG) and Colgate-Palmolive (CL).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday's Analyst Blog:

BRIC Nations Discuss the Dollar

China and India have sizable labor resources, while Russia and Brazil are rich in natural resources. China is the main importer of natural resources, while Russia and Brazil are the main exporters. While China and India benefit from lower oil prices, Russia and Brazil seek higher oil prices. There is also a huge competition among the BRIC [Brazil, Russia, India, China] nations for foreign capital and investment.

Further, even taken together, BRIC economies are smaller than the US economy and as such their influence is rather limited as of now -- though it is rising rapidly. Also, the reality remains that there is no immediate alternative to the US Dollar, as no other markets in the world have the depth and liquidity of those in the US.

Emergence of an alternative reserve currency or a basket of currencies could take many years. So, there is no immediate threat to the US Dollar's role as the world reserve currency, and any outcome of the meeting will be more symbolic at present.

However, if there are significant negative comments on the dollar or signals of shifting the reserves composition away from the dollar (which seems to be a less likely outcome in the present circumstances), it could weigh on the US currency. Companies that derive a significant portion of their revenue from their overseas operations, like McDonald's (MCD), Coca-Cola (KO), PepsiCo (PEP), Procter & Gamble (PG) and Colgate-Palmolive (CL) benefit from any weakness in the US Dollar.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

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Zacks Investment Research

BRIC Nations Discuss the Dollar – Analyst Blog

Zacks Market Commentaries — Tue, 16 Jun 2009 19:12:39 +0000

The leaders of Brazil, Russia, India and China (BRIC) are meeting today in Russia to discuss issues ranging from the financial crisis to climate change. The US Dollar's role in their foreign exchange reserves and cross-border trade is also on the agenda of the meeting.

Recently Russia, China and Brazil have expressed the need for having an alternative to US Dollar -- in view of the soaring US debt -- and have decided to invest in IMF bonds, a move to diversify their dollar-heavy currency reserves. IMF bonds are denominated in Special Drawing Rights, or SDRs. India has so far been non-committal on this issue.

BRIC nations hold a total of $2.8 trillion in international reserve assets (excluding gold) -- about 42% percent of the world's total. Further, these countries comprise about 15% of the world economy, 40% of the world's population and output (in purchasing power parity terms), and thus there is a thinking that the group has the potential to lead global economic growth.

Brazil, India and China have also weathered the global financial crisis better than the rest of the world.

China is U.S.'s biggest foreign creditor, holding an estimated $1 trillion in U.S. government debt. In view of their large holdings, the Chinese have been considerably more careful than the Russians in talking about potential alternatives to the dollar, since such comments could undermine the value of their dollar assets. China continues to add dollars to its reserves in order to prevent the appreciation of its currency, which would hurt its exports.

In addition to discussing how to reduce dollar assets in their existing reserves, the BRIC nations are also trying to limit the use of the dollar in their bilateral trades. China signed a deal with Brazil last month, which would allow some bilateral trade transactions to be conducted in their respective currencies.

While these nations seem to be united in their apprehension about the dollar, there are a lot of conflicting interests and disagreements over various other issues. The nature and composition of their economies are also very different.

China and India have sizable labor resources, while Russia and Brazil are rich in natural resources. China is the main importer of natural resources, while Russia and Brazil are the main exporters. While China and India benefit from lower oil prices, Russia and Brazil seek higher oil prices. There is also a huge competition among the BRIC nations for foreign capital and investment.

Further, even taken together, BRIC economies are smaller than the US economy and as such their influence is rather limited as of now -- though it is rising rapidly. Also, the reality remains that there is no immediate alternative to the US Dollar, as no other markets in the world have the depth and liquidity of those in the US.

Emergence of an alternative reserve currency or a basket of currencies could take many years. So, there is no immediate threat to the US Dollar's role as the world reserve currency, and any outcome of the meeting will be more symbolic at present.

However, if there are significant negative comments on the dollar or signals of shifting the reserves composition away from the dollar (which seems to be a less likely outcome in the present circumstances), it could weigh on the US currency. Companies that derive a significant portion of their revenue from their overseas operations, like McDonald's (MCD), Coca-Cola (KO), PepsiCo (PEP), Proctor & Gamble (PG) and Colgate-Palmolive (CL) benefit from any weakness in the US Dollar.
Read the full analyst report on "MCD"
Read the full analyst report on "KO"
Read the full analyst report on "PEP"
Read the full analyst report on "PG"
Read the full analyst report on "CL"
Zacks Investment Research

Company News for June 9, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 09 Jun 2009 14:24:35 +0000

* Apple (NASDAQ:AAPL) halved its iPhone price to $99, and also slashed prices on products including notebook computers. A faster model iPhone was also introduced

* McDonald's (NYSE:MCD) posted comparable sales numbers for May of 5.1%, which failed to equal April's 6.9% advance

* Goldman Sachs (NYSE:GS) downgraded shares of Burlington Northern (NYSE:BNI), and raised CSX (NYSE:CSX)

* Morgan Stanley (NYSE:MS) downgraded shares of Nucor (NYSE:NUE)

* Google (NASDAQ:GOOG) and eBay (NASDAQ:EBAY) will present at the Credit Suisse (NYSE:CS) convergence conference

* Qualcomm (NASDAQ:QCOM) will present at the UBS (NYSE:UBS) Tech and Service conference at 12:45 PM ET

* Procter & Gamble (NYSE:PG) and Coca-Cola (NYSE:KO) are due to present at the Deutsche Bank (NYSE:DB) global consumer and Food Retail Group

Zacks Investment Research

Kenya’s beverage wars: fighting for sub-Saharan consumption

Jason G. Wulterkens — Thu, 04 Jun 2009 16:00:44 +0000

Great piece in today’s Wall St. Journal (”Soft-Drink War Rages in Kenya–but Not Over Cola”) highlighting the ongoing “battle” between East African Breweries, a unit of London-based spirits maker Diageo, and Coca-Cola over non-alcoholic, malt drinks (Alvaro versus Novida). East African Breweries owns all of Kenya’s major beer brands; yet as the piece points out, [...]

Coca-Cola Remains a Hold – Analyst Blog

Zacks Market Commentaries — Thu, 04 Jun 2009 15:25:00 +0000

Headquartered in Atlanta, Georgia, The Coca Cola Co. (KO) is the largest global producer and marketer of soft drink concentrates and syrups.

Coca-Cola has strong soft drink brands, leading market shares and generates solid cash flow. The company's CEO, Muhtar Kent, will continue with Isdell's revitalization plan to deal with the challenges of continually increasing volume.

Despite global economic weakness, worldwide volume growth continues, driven by non-carbonated beverages and international markets, along with incremental marketing spending of $400 million annually.

However, when the dollar remains strong, sales and operating earnings growth will be constrained from currency translations. The Hold rating is maintained.
Read the full analyst report on "KO"
Zacks Investment Research

Buy, Sell or Hold: Campbell Soup Co. (NYSE: CPB) Looks to Profit From its Recent Overseas Expansion

Contrarian Profits — Mon, 01 Jun 2009 16:06:13 +0000

pstrongCampbell Soup Co. (NYSE: a href="http://www.google.com/finance?q=NYSE%3ACPB" target="_blank"CPB/a)/strong traces its origins back to 1869. This company has been around forever, and it has used its time well. Campbell Soup has survived and thrived through the Great Depression of the 1930s, both World Wars, and every single one of the challenges and setbacks that the U.S. economy has suffered since. The magnitude of this accomplishment is almost unthinkable. /p pI have been following Campbell Soup for almost a decade, mainly as a fixed-income play. Its reliable earnings and very strong cashflow allow it to pay a very attractive 3.6% dividend, which is very secure, given that it represents just 30% of the company’s earnings./p pAlso, this “Old Faithfull-like” revenue stream that grows steadily over time allows Campbell#8230;/p

Buy and Hold is Alive and Well

Bullish Bankers — Wed, 27 May 2009 11:00:40 +0000

Every time the United States goes through a recession, the pundits all race to be the first to proclaim that “Buy and Hold” is dead. I can’t watch a financial news channel or read a financial website without some mention of this proclamation. Well I’m growing tired of it, and if it were up to [...]

Sovereign Wealth Funds: $7 Trillion Reasons to Stay Invested

Investment U — Tue, 19 May 2009 14:08:35 +0000

Sovereign Wealth Funds: $7 Trillion Reasons to Stay Invested by Alexander Green, Oxford Club Investment Director In February, I wrote that the decline in stocks was just about over. Why? There was more money available to buy shares than at any time in almost two decades. The $8.85 trillion held in cash, bank deposits and money market funds [...]

Coca-Cola FEMSA Inexpensive – Analyst Blog

Zacks Market Commentaries — Wed, 06 May 2009 21:19:57 +0000

Coca-Cola FEMSA S.A. de C.V. (KOF) is the largest Coca-Cola bottler in Mexico and Argentina, and is one of Coke's two anchor bottlers in Latin America.

The company posted positive operating results for the first quarter of 2009, mainly considering the difficult economic situation. Moreover, the results in the Mercosur and Latincentro division were particularly impressive. The recent acquisitions will enhance company's topline growth in the medium term.

However, in the very near term, the Mexican economy will be affected by the swine flu, which is rapidly spreading all over the world. Nevertheless, being a producer of an inexpensive, daily use product, focused on domestic markets, KOF is less exposed to the international credit crisis.

Finally, KOF has been reducing debt, a necessary step for lowering financial costs and increasing confidence. We are keeping our Buy recommendation on Coca-Cola FEMSA.
Read the full analyst report on "KOF"
Zacks Investment Research

Molson Coors Readies For Beverage Wars

Investment U — Tue, 05 May 2009 15:00:53 +0000

Molson Coors Readies For Beverage Wars by The Investment U Research Team Molson Coors Brewing Co (NYSE: TAP) announced impressive numbers this morning, on earning that doubled in the first quarter. It sent the stock up over 10%. They credit this achievement to an aggressive cost cutting strategy. Interesting that its biggest competitor, the Anheuser-Busch [...]

SectorWatch.biz: Building a Better Beverage

Stuart T. Smith — Wed, 29 Apr 2009 13:38:49 +0000

IRVINE, Calif., April 29, 2009 (GLOBE NEWSWIRE) — There are fads and there are trends and it’s clear that companies greatly prefer to capitalize on the latter. And while many might have made short term money selling survival kits for the fad of Y2K, those who focused on creating anti-virus software for the unfortunate trend [...]

Zacks Analyst Blog Highlights: McDonald’s, Coca-Cola, Dr Pepper Snapple Group, United States Steel Corp. and Pfizer Inc. – Press Releases

Zacks Market Commentaries — Wed, 29 Apr 2009 12:57:25 +0000

For Immediate Release

Chicago, IL - April 29, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: McDonald's (MCD), Coca-Cola (KO), Dr Pepper Snapple Group (DPS), United States Steel Corp. (X) and Pfizer Inc. (PFE).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Tuesday's Analyst Blog:

McDonald's Calling the "Doctor"

McDonald's (MCD) is replacing Pibb Xtra (aka Mr. Pibb) from Coca-Cola (KO) with Dr Pepper at all of its 14,000 U.S. restaurants. The 5-year agreement with Dr Pepper Snapple Group (DPS) will expand the availability and market share of Dr Pepper.

Dr Pepper's "shelf space" at McDonald's is almost doubling from 8,500 to 14,000 soft-drink slots, along with expanding into McDonald's restaurants in the important Chicago, Los Angeles and Northern California markets.

US Steel In-Line, Dividend Cut

United States Steel Corp. (X) reported a first quarter 2009 net loss of $439 million, or $3.78 per diluted share, compared to first quarter 2008 net income of $235 million, or $1.98 per diluted share.

Other items not allocated to segments in the first quarter of 2009 increased net income by $7 million, or 6 cents per diluted share. Other items not allocated to segments in the first quarter of 2008 reduced net income by $45 million, or 38 cents per diluted share.

Pfizer Reports, Ests Trimmed

This morning, Pfizer Inc. (PFE) reported financial results for the period ending March 31, 2009. Revenue came in at $10,845 million, compared to our and the Street estimates of $10,885 million and $11,080 million, respectively. Revenue fell 8% from the first quarter 2008 and was down 3% excluding the negative impact from foreign exchange.

U.S. sales fell 10% to $5.0 billion while international sales of $5.9 billion were down 7%, but increased by 3% on an operational basis.

Lipitor sales fell 13% in the quarter and were down 17% in the U.S. This was significantly below our estimate. It appears the weak economy is accelerating a shift to lower-cost generic statins, including simvastatin (generic Zocor). Sales of Celebrex and Geodon were also weaker than expected.

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Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Contact:
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Visit: www.zacks.com

Zacks Investment Research

Coca-Cola Gets Innocent – Analyst Blog

Zacks Market Commentaries — Thu, 23 Apr 2009 16:29:44 +0000

The Coca-Cola Company (KO) is investing £30 million ($44 million) for a minority stake of between 10% and 20% in Innocent Drinks, a U.K.-based maker of fruit smoothies. Innocent sells about 2 million smoothies a week and will use the proceeds to fund European expansion.

The company currently operates in 13 European countries and has revenues of £100 million ($148 million). In addition, Coca-Cola may be able to help Innocent Drinks distribute its products.

Innocent makes only natural healthy products using socially and environmentally packaging and production methods. The company distributes its drinks in vans made to look like cows. The three original founders will continue to run the company.

The management of Coca-Cola has five strategic priorities for sustainable growth, one of which is to improve the company's growth in the still (non-carbonated) beverage portfolio, especially through strategic acquisitions. The minority stake in Innocent Drinks fits into this mandate.

The group business unit president for Coca-Cola Europe, James Quincey, stated that Coca-Cola has long admired the Innocent Drinks brand, their products and their unique approach to business. Coke's investment will support Innocent and accelerate its expansion across Europe.

Coca-Cola's investment in Innocent came shortly after China's Ministry of Commerce rejected Coke's attempt to buy China Huiyuan Juice Group Limited, China's largest juice maker, for $2.3 billion. Obviously, Coca-Cola's management is looking for acquisitions to augment its juice segment globally.

In North American operations, the company has benefited from the growth of non-carbonated beverages, not only juices, but also bottled water and sports drinks. The category of non-carbonated beverages should generate higher margins for Coca-Cola as economies of scale improve.
Read the full analyst report on "KO"
Zacks Investment Research

Company News for April 21, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 21 Apr 2009 14:35:45 +0000

* DuPont (NYSE:DD) reported a 59% lower first quarter, dropped its guidance for the year due to weak demand, and said it is planning further cost-cutting measures. First quarter earnings of 54 cents a share beat estimates of 52 cents; however, sales fell 20% to $6.87 billion, missing estimates of $7.44 billion. The company lowered its 2009 guidance of $1.70-$2.10 a share from an earlier range of $2.00-$2.50 a share, inline with analysts' expectations of $1.88. The firm noted the "revision anticipates that weak demand across key markets will continue throughout 2009."

* Boston Scientific (NYSE:BSX) beat estimates of 7 cents a share, with first quarter earnings of 19 cents, as revenues fell 1.8% to $2.0 billion, inline with estimates

* Schering-Plough (NYSE:SGP) reported better-than-expected earnings of 56 cents ex-items versus 53 cents a year earlier and projections of 47 cents. Revenue declined 5.7% to $4.39 billion

* United Technologies (NYSE:UTX) reported 87 cents ex-items, beating estimates of 78 cents a share, versus $1.03 a year ago. The company's full-year guidance of $4.00-$4.50 fell in line with the Street's projections of $4.20

* Eli Lilly (NYSE:LLY) beat estimates of 99 cents a share, posting results of $1.20, and offering inline full-year guidance of $4.00-$4.25

* Merck (NYSE:MRK) reported an earnings miss of 3 cents as earnings posted at 74 cents versus 89 cents a year earlier. Full year guidance of $3.15-$3.30 fell inline with consensus estimates of $3.25

* Caterpillar (NYSE:CAT) reported better-than-expected first quarter numbers of 39 cents ex-items versus estimates of 6 cents, down from $1.45 a year ago, on revenues of $9.22 billion, topping estimates of $8.54 billion

* Coca-Cola (NYSE:KO) reported inline first quarter earnings of 65 cents versus 67 cents a year earlier, as revenues of $7.17 billion missed projections of $7.35 billion

Zacks Investment Research

Stock Market News for April 20, 2009 – Market News

Zacks Market Commentaries — Mon, 20 Apr 2009 13:53:50 +0000

US stocks ended another week on a winning note as earnings reports, although not great by normal standards, and a consumer sentiment survey indicated the economy and financial markets are showing signs of stabilization. The Dow Jones industrial average closed the week up 47.95, or 0.6%, at 8,131.33. The Standard & Poor's 500 index rose 13.04, or 1.5%, to 869.60. The tech-heavy Nasdaq rose 20.53, or 1.2%, to 1,673.07. The broad-based S&P 500, which recorded its steepest six-week gain since 1938, is now up 29% since hitting its 12-year nadir on March 9.

As risk appetite grew treasuries declined, taking the yield on the 2-year to 0.981% and the 10-year to 2.953% as prices fell 4/32 and 30/32, respectively on Friday. The Vix, CBOE's volatility index, declined 2.59 points over the week, closing at its lowest in seven months and the week's success with IPOs Rosetta Stone (NYSE:RST) and Bridgepoint Education (NYSE:BPI) also signaled the market's heightened interest in assuming riskier investments.

First-quarter corporate earnings will reach a peak this week, with 40% of the Dow Jones Industrial Average companies and a quarter of those in the Standard & Poor's 500 Index reporting their quarterly numbers. Markets are likely to face turbulence as big names including Microsoft (NYSE:MSFT), IBM (NYSE:IBM), Apple (NYSE:AAPL), Eli Lilly (NYSE:LLY), Merck (NYSE:MRK), Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP) American Express (NYSE:AXP), Bank of America (NYSE:BAC), and McDonalds (NYSE:MCD) report their earnings.

On Friday, financial companies jumped 4.1% to help fuel a slender advance in stocks. Citigroup (NYSE:C) which has been hit hard by the credit crisis, was the leading gainer on the DJIA. The stock jumped 20% to close at $3.65 after swinging to a $1.6 billion first quarter profit. JP Morgan (NYSE:JPM) rose 1.6% to close at $33.26 and Goldman Sachs' earnings of $3.39 a share surpassed Street expectations. Huntington Bancshares (NASDAQ:HBAN) jumped 81% to $3.89.

General Electric (NYSE:GE), which reported a 35% decline in first-quarter earnings, advanced 9.4% as the numbers were better than Street expectations. The firm advised it saw no need for a fresh capital. GE reported net income of $2.9 billion, or 26 cents a share, versus Street estimates of 21 cents a share. Revenue fell 9% to $38.41 billion.

On Friday, the Reuters/University of Michigan preliminary consumer sentiment index for April showed consumer confidence jumped to 61.9, compared with 57.3 in March, and was better than expected 57.5.

General Motors Corp. (NYSE:GM) interim Chief Executive Fritz Henderson did not rule out liquidation, saying bankruptcy remains a "probable" outcome for GM, subsisting on government loans and in need of more cash.

This Friday's release of the preliminary assumption of the stress tests performed on 19 US banks will bring into sharper focus the likely capital-raising needs of several banks. Today's media reports indicate the administration is considering taking what some consider back-door steps toward nationalization by stretching existing loans through equity conversions to up firms' capital cushions.

The week's major economic reports will reveal March leading indicators on Monday (10:00 AM ET), expected to indicate a lessening pace of decline, down 0.2% versus the prior month's 0.4% drop. Housing will remain in focus as investors seek signs of its bottoming after last week's report that U.S. March housing starts fell 11 percent and building permits, a sign of future construction, fell to a record. Existing home sales and new home sales for March are expected to reveal existing sales eased to 4.54 million from 4.72 million, while new sales edged higher to 340,000 from 337,000. Friday's durable orders report for March is expected to reverse February's 5.1% jump with a 1.5% drop.

Zacks Investment Research

Earnings Preview for Apr 20-24 – Press Releases

Charles Rotblut — Mon, 20 Apr 2009 12:57:41 +0000

For Immediate Release

Chicago, IL - Apr 20, 2009 - Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Allegiant Travel (ALGT), Brinker International (EAT), Western Digital (WDC) and Xilinx (XLNX) and Schlumberger (SLB). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.

The Week's Events

Earnings season will hit full stride this week with 443 companies confirmed to report. Nearly one-fourth of the S&P 500 will release results.

Dow components include 3M Company (MMM), AT&T (T), Bank of America (BAC), Boeing (BA), Caterpillar (CAT), Coca-Cola (KO), DuPont (DD), International Business Machines (IBM), McDonald's (MCD), Merck (MRK), Microsoft (MSFT) and United Technologies (UTX).

The economic data will largely take a back seat to the earnings news, though the March home sales figures will grab some attention.

Monday: March Leading Indicators
Wednesday: weekly crude inventories
Thursday: March existing home sales, weekly initial jobless claims
Friday: March new home sales, March durable goods orders

Vice Fed Chairman Donald Kohn will present his economic outlook at the University of Delaware on Monday night. The next Fed meeting will occur on Apr 28 and 29.

As I write this, the U.S. stock markets are on track to post their 6th consecutive weekly gain. Earnings look like they could continue to be better than feared, which means more fuel for the rally. Volume has been below average lately, however, so don't take unnecessary risks.

Companies That Could Issue Positive Earnings Surprises

This past Tuesday, Allegiant Travel (ALGT) preannounced first-quarter profits of $1.34 to $1.38 per share. The results were well above the previous consensus earnings estimate of $1.17 per share. No reason was given for the preannouncement, though the company had previously revealed that both its revenue passenger miles and load factor grew last quarter. The airline has topped expectations during 3 out of the last 4 quarters. Allegiant Travel is scheduled to report on Monday, Apr 20, before the start of trading. (The announcement date was moved up one day to avoid a "potential schedule conflict".)

Brinker International (EAT) recently preannounced fiscal third-quarter earnings of 44 to 45 cents per share, well above previous expectations for 28 cents per share. The company credited cost-cutting measures for improving profitability. The covering brokerage analysts responded by pushing the consensus estimate up to 45 cents per share. EAT has topped expectations twice and met forecasts twice in the past 4 quarters. Brinker International is scheduled to report on Tuesday, Apr 21, before the start of trading.

Within the past 7 days, 2 of the 14 covering brokerage analysts raised their fiscal third-quarter profit projections on Western Digital (WDC). The positive revisions, combined with a third changed forecast last month, pushed the consensus estimate a penny higher to 10 cents per share. The most accurate forecast is more bullish at 12 cents per share. The storage device maker has topped expectations for 5 consecutive quarters. Western Digital is scheduled to report on Thursday, Apr 23, after the close of trading.

Xilinx (XLNX) is one of the chipmakers on which brokerage analysts have recently raised forecasts. Revisions by 3 analysts over the past 30 days have resulted in a most accurate estimate of 19 cents per share, a penny better than the consensus estimate. Though XLNX did miss expectations last quarter, it met or exceeded estimates during 4 out of the previous 5 quarters. Xilinx is scheduled to report on Wednesday, Apr 22, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Schlumberger (SLB) has missed expectations during 3 out of the last 4 quarters. Ahead of the company's first-quarter earnings release, nearly half of the covering brokerage analysts have lowered their forecasts. This has resulted in the consensus estimate falling 6 cents to 77 cents per share. The most accurate estimate is even more bearish at 73 cents per share. Schlumberger is scheduled to report on Friday, Apr 24, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com.

Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206.

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=4988.

About Zacks

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

Zacks Investment Research

SectorWatch.biz Issues MarketStats on Beverage Companies ATTD, DPS, JSDA, KO, PEP, HANS

Stuart T. Smith — Fri, 17 Apr 2009 14:04:37 +0000

IRVINE, Calif., April 17 /PRNewswire/ — SectorWatch.biz announces the availability of MarketStats for leading beverage equities in the news and driving markets today. MarketStats offers a perspective on the aforementioned equities and the opportunity for investors to respond with articles, blogs and opinions. Investors can view MarketStats by visiting: www.SectorWatch.biz -a division of FiSpace.net, a dynamic [...]

A Retail Investing Framework

Daniel Hung — Mon, 13 Apr 2009 04:30:16 +0000

Generally speaking, I see myself as a value investor. Why then, would am I so often looking towards retailers and generally consumer facing businesses for my best investment ideas (see: A Retail Reversal and Irrational Retail Valuations)? After all, many of the best retail stocks are those that rely on growth to provide shareholder return. [...]

Difficult Times for Dividend Investors

Richard Shaw — Tue, 07 Apr 2009 18:31:34 +0000

In theory, equity income investing creates a reasonably steady and growing income stream from stock investments — a good chance of maintaining real purchasing power of the stream. That contrasts with bonds which create a more reliable, but constant income stream that has no chance of maintaining real purchasing power (inflation protected Treasuries and perhaps [...]

Invest with Main Street

Daniel Hung — Tue, 31 Mar 2009 02:23:28 +0000

With all the recent hub-bub about “Wall Street vs. Main Street,” maybe its time investors start taking stock of what Main Street wants. After all, it’s consumer demand which ultimately drives those sales numbers that seem to have been in free fall. Warren Buffett once described his philosophy of looking for businesses with “wide moats” [...]

Drinks Americas Announces Plans To Acquire Global Beverages Asia

China Retail News — Sun, 29 Mar 2009 19:30:57 +0000

Following the Chinese Ministry of Commerce rejection of Coca-Cola's application to acquire China Huiyuan Juice Group, Drinks Americas Holdings Ltd., an owner, developer and marketer of global premium beverages, has announced plans to acquire Global Beverages Asia Ltd. Global Beverages Asia is the new name for the combination of Yarraman Winery and Asia Distribution Solutions, a [...]

Coke Wins NCAA Brackets

Investment U — Mon, 23 Mar 2009 14:13:38 +0000

Coke Wins NCAA Brackets by Investment U Research Team We’re always keeping our eyes peeled for aggressive marketing, signs of brand domination and more importantly, changeovers in established hierarchies. Watching the NCAA tournament we were presented with a big one. Many who have been glued to their TV’s at home, (or the office) during the NCAA tournament have [...]

China’s MOC Rejects Coca Cola’s Takeover Of Huiyuan

China Retail News — Sun, 22 Mar 2009 19:31:48 +0000

The Chinese Ministry of Commerce has announced that in accordance with China's anti-monopoly law, it has decided to reject Coca-Cola 's application to acquire China Huiyuan Juice Group. The MOC said that the acquisition may disturb market competition in China and the major reasons for its rejection of the transaction are if Coca-Cola successfully acquires [...]

ALPS Files For Equal-Weight ETF Of Sector SPDRs

IndexUniverse Staff — Wed, 18 Mar 2009 21:41:49 +0000

New All-Select Sector SPDRs to offer twist on equal-weighting strategies of the S&P 500.

Another equal-weight exchange-traded fund based on the S&P 500 is being proposed, this time using Select Sector SPDRs to carve up the index.

The ALPS Equal Sector Weight ETF would track a Merrill Lynch benchmark that divvies up the broad U.S. stock market by its nine major sectors, according to a recent filing still under review by the Securities and Exchange Commission. Each would be represented by a Select Sector SPDR fund.

"At all times, the Merrill Lynch Equal Sector Weight index will be comprised of the constituents in the S&P 500, albeit in different weights," said the registration statement.

The fund-of-funds ETF is expected to come with an annual expense ratio of 0.55%.

The proposed ETF would compete against equal-weight sector portfolios both from Rydex and ProShares. But one other, the Rydex S&P Equal Weight (NYSE: RSP), actually does much the same as the new ALPS fund would attempt to accomplish. Namely, it includes all sectors under one umbrella.

But there's a caveat. While RSP equal-weights each of the S&P 500's stocks, the new product is giving the same weights to each sector—on a cap-sized basis.

That should make the new ETF correlate much closer to the actual S&P 500's performance. Also, RSP rebalances on a quarterly basis.

"It's not a bad idea—we've been big fans of equal-weighting for years," said Anthony Welch, a portfolio manager at Sarasota Capital Strategies.

He has been using separate Rydex equal-weight ETFs for each sector to come up with an overall mix to match the S&P 500.

"We'll have to see what the internal costs are going to be for the new SSgA (State Street Global Advisors) equal-weight ETF and how much it rebalances," said Welch. "But with its closer correlation to the S&P 500, and RSP's greater emphasis on mid-cap stocks, it comes down to what you want to equal-weight.

He added: "It comes down to a choice of weighting your portfolio at the stock level or at the sector level."

You can read the prospectus for the new ALPS/SSgA fund here.

Sky Falling for Plane Makers – Analyst Blog

Zacks Market Commentaries — Wed, 18 Mar 2009 21:05:17 +0000

Highlighted stocks include Boeing's (BA), Embraer (ERJ), B/E Aerospace (BEAV), Hexcel (HXL) and Ladish (LDSH).

The Sky is Falling! Really!

The aviation financiers gathered together in Phoenix this week to commiserate -- with each other as well as the commercial aircraft manufacturers. Their message: "You can build 'em, but you can't get financing for 'em!" Uh oh!

One attendee opined that we who live in the Pacific Northwest are about to see whitetails (vernacular for undeliverable aircraft) at Boeing's (BA) finishing plant in Seattle (as are the French at the Airbus plant in Toulouse). The ultimate consequence of this shortfall in funding is that Airbus and Boeing -- plus Bombardier and Embraer (ERJ) -- are about to encounter the same thing that has happened to the executive aircraft manufacturers (not to mention the automobile makers, et al): Too many pieces of equipment and too few buyers with money. Darn!

Of course, the affected stocks have forewarned us of this impending disaster. While the S&P 500 is down 41.5% over the last 52 weeks, Boeing is off by 55.0%, B/E Aerospace (BEAV) is down 78.2%, Esterline Technologies (ESL) is down 59.5%; Hexcel (HXL) is down 68.8%, Ladish (LDSH) down 78.8%...and the list goes on.

Perhaps -- just perhaps -- ILFC (the World's largest aircraft leasing company which, in turn, is owned by AIG) can convince its parent to furnish it with enough (government) funds so that it can "keep em flying!" Otherwise, will the last person out of Seattle, Renton and Everett please turn off the lights?

Let us continue praying!
Read the full analyst report on "ERJ"
Read the full analyst report on "BEAV"
Read the full analyst report on "LDSH"
Zacks Investment Research

AMZN Kindles New Controversy – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 18 Mar 2009 21:03:50 +0000

Adding fuel to the controversy that Amazon.com (AMZN) will evade paying royalties to authors from its Kindle device, Discovery Communications Inc. (DISCA) sued the online retailer for violating its patent on electronic book technology.

On Tuesday, the media company filed a lawsuit in the U.S. District Court in Delaware accusing Amazon's electronic reader Kindle of infringing intellectual property rights of a patent it had registered in November 2007.

Amazon introduced the second version of Kindle last month for a retail price of $359, calling it the future of book reading. The first model of the wireless device was released in November 2007.

Discovery sought a "fair compensation" through damages for "any future infringement" of the patent but did not seek an injunction preventing sales of the Kindle.

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

Early Entry of Generics Thwarts MRX – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 18 Mar 2009 20:51:33 +0000

Medicis Pharmaceutical Corp. (MRX) slumped the most in 12 years on Wednesday after the U.S. Food and Drug Administration rejected the company's appeal for banning generic versions of its acne drug Solodyn from entering the market before the patent expired.

Mylan Inc. (MYL), Barr Laboratories Inc. and Novartis AG (NVS) unit Sandoz Inc. have submitted abbreviated new drug applications (ANDAs) for Solodyn. Israel-based Teva Pharmaceutical Industries Ltd. (TEVA) has already received a nod from federal health regulators to market its generic version of the oral antibiotic and began shipment of the product.

Medicis filed its petition for a 30-month stay on ANDAs of Solodyn, after suing all the generic makers. Solodyn, which is scheduled to lose patent protection in 2018, contributes nearly 50% of the Scottsdale, Arizona-based company's total revenue.

Shares of the company are down more than 11% today.

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

Oil & Gas Industry – Industry Outlook

Zacks Market Commentaries — Wed, 18 Mar 2009 20:41:49 +0000

While downside risks remain, the overall outlook for the oil sector has improved in recent days, owing largely to the tentative signs of a supply response to anemic global demand. With demand falling sharply due to worldwide economic problems, inventories started building at a faster rate since last fall.

In response, OPEC (which accounts for roughly 40% of all oil supplies) announced a number of production cuts. While there was ample skepticism early on regarding OPEC's ability to enforce the announced cuts, recent evidence suggests a significant level of compliance within the cartel.

As such, while oil prices over the coming weeks will track the outlook for the global economy, the commodity's improved supply situation is expected to help prices consolidate around current levels.

Natural gas, on the other hand, is a North American story and developments here over the coming months will determine its outlook.

On balance, we see more upside potential than downside risk in the sector.

OPPORTUNITIES

The risk-reward trade-off for a number of sub-sectors remains very compelling, in our view. The large-cap integrateds, oilfield services and offshore drilling sub-sectors offer lucrative opportunities at current levels.

The relatively low-risk energy conglomerate business structures of the large-cap integrateds, with their fortress balance sheets, ample free cash flows even in a low oil price environment, and growing dividends are well suited for uncertain times like these. Our preferred names in this group remain Exxon (XOM) and Chevron (CVX).

The underlying business fundamentals of oilfield service companies, particularly those with an international focus and deepwater-capable drilling contractors still remain robust. We like Schlumberger (SLB) and Baker-Hughes (BHI) in the oilfield service space, and our preferred deepwater drillers remain Transocean (RIG) and Diamond Offshore (DO). We like Pride (PDE) as an emerging and relatively under-appreciated deepwater driller.

WEAKNESSES

We strongly feel that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided.

The two major sub-sectors that fit that description would be the onshore drillers and service players with heavy pressure pumping operations. We believe that pricing and margins for operators in these two sub-sectors will remain under pressure through 2010, even as the outlook for natural gas price improves.

Halliburton (HAL), the largest North American pressure pumping player, and BJ Services (BJS), one the largest in this category, need to be avoided. We also have Sell recommendations for Nabors (NBR) and Patterson-UTI (PTEN), two major North American land drillers.

Zacks Investment Research

FNF’s Volume Much Higher – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 18 Mar 2009 20:32:35 +0000

Fidelity National Financial Inc (FNF) shares are experiencing unusually high trading volume. The Jacksonville-based company's stock jumped over 6% at noon.

Zacks Investment Research

Base Metals Little Changed

Doug Casey — Wed, 18 Mar 2009 18:58:01 +0000

p class="maintextDRP"The base metals were mixed on Tuesday. Copper rose and fell in small fits and starts yesterday, with the final move being to the downside as it finished at $1.702/lb., down 2¾ cents. /p p class="maintextDRP"Nickel was in positive territory to start the New York day, but fell off sharply to mid-morning, after which it regained a little lost ground to close at $4.5185/lb., down just over a penny. Zinc ended modestly lower, at $0.5496/lb., down better than three-quarters of a cent. Aluminum had a modestly higher day, adding a third of a cent, to $0.6077/lb., while lead pushed higher, tacking on a penny and a third, to $0.6006/lb./p pCopper eased off of the four-month high reached on Monday as investors decided to#8230;/p

Don’t Worry About “Catching the Bottom”

Michael E. Brisky — Wed, 18 Mar 2009 18:14:00 +0000

There's a lot of noise coming out from market pundits lately. Is this the bottom? Is it time to buy? To that I'd say "turn off the tv." These prognosticators predicted little to nothing of what has happened during the past year, so now is not the time to start listening to them. When the market bounces, as its doing now, there is often some easy money made in the first moves. But this is a dangerous game to play for individual investors. The market can shed these gains as quickly as they came. br /br /Also, most investors are in less stable financial positions that they were a year ago. Its not a time to take extra risk. Its a time to protect cash. There is one exception. If you have a decent amount of time until retirement, you can put some long-term money to work. Think about index funds. This is your best bet for beating inflation over the long term. br /br /If you're looking for more detail about his subject, and specific names to buy, you can read my recent article a href="http://personaldividends.com/money/briskycapital/retirement-plans-stalled-managing-risk-safe-investments"published at Personal Dividends online magazine/a.br /br /Also, a href="http://online.wsj.com/article/SB123732198154761163.html"here's an article on the subject/a by Brett Arends from the WSJ.div class="blogger-post-footer"img width='1' height='1' src='http://res1.blogblog.com/tracker/819581243324579563-8110782565972798007?l=briskycapital.blogspot.com'//div

GreenMan Announces Welch Products Inc. Name Change to Green Tech Products, Inc. (GMTI.OB)

QualityStocks — Wed, 18 Mar 2009 13:10:12 +0000

Before the opening bell, GreenMan Technologies, Inc. announced that it has changed the name of its Welch Products Inc. subsidiary to Green Tech Products, Inc. The new company name better reflects the nature of their new product-line extension strategy beyond playground safety tiles and equipment. Lyle Jensen, GreenMan’s President and Chief Executive Officer, commented, “We [...]

Watch Out Pepsi and Coke! Get Ready for the Cow Urine Soft Drink

Fred Fuld — Thu, 19 Feb 2009 05:35:00 +0000

Who knows how popular the a href="http://news.yahoo.com/s/nm/20090212/od_nm/us_urine_drink_odd;_ylt=AozEaMgPhz37tDDtqzTwQrHtiBIF" target="_blank"cow urine soft drink/a will be, and if it will take market share away from Coca Cola (KO) and Pepsi (PEP). But it is expected to be distributed in India, and will include gooseberries and aloe vera. Anybody thirsty?div class="blogger-post-footer"div class='adsense' style='text-align:center; padding: 0px 3px 0.5em 3px;' script type="text/javascript"!-- google_ad_client="ca-pub-2427831169011625"; google_ad_width=300; google_ad_height=250; google_ad_format="300x250_as"; google_ad_type="text"; google_ad_channel ="8681602088"; google_color_border="FFF3DB"; google_color_bg="FFF3DB"; google_color_link="1B0431"; google_color_url="1B0431"; google_color_text="29303B"; //--/script script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js" /script /div

Invest in Coke (KO), It’s the Real Thing

Contrarian Profits — Tue, 17 Feb 2009 14:12:29 +0000

pWith its huge emerging market and bearish presence as well as strong high margins, the Coca-Cola Co. (stronga href="http://www.google.com/finance?q=ko"KO/a/strong) doesn’t look like its going to folllow the recent downturn in equity markets. a href="http://www.moneymorning.com" class="alinks_links"Money Morning/a’s Horacio Marquez reccomends that you jump on this stock./p pThis from Horacio:/p blockquotepContinuing with the trend of companies that have blasted through Wall Street’s earnings estimates of late, strongThe Coca-Cola Co. (NYSE: a href="http://www.google.com/finance?q=ko"KO/a)/strong last week announced its ninth-straight quarter of double-digit earnings per share (EPS) growth and a third straight year of meeting or exceeding its long-term-growth targets./p pExcluding one-time items, the Atlanta-based a href="http://www.reuters.com/article/rbssHouseholdProducts/idUSN1254337020090212"company’s earnings per share of 64 cents represented a 10% gain from last year’s fourth quarter/a, beating analysts’ expectations by three cents. In addition, Coke’s unit-case volume was#8230;/p/blockquote

Coca Cola Shares Rally On Company’s Earnings

Daniel Shepard — Thu, 12 Feb 2009 22:22:02 +0000

Thursday February 12, 2009 Navivest Shares of the Coca-Cola Company (KO) were up a whopping $3.12 or 7.56% today, after the company this morning, reported that for the fourth quarter period ending December 31, 2008, it had net operating revenues of $7.12 billion, gross profits of $4.55 billion and net income of $995 million. This compares to net [...]

Andina Performing Admirably – Analyst Blog

Zacks Market Commentaries — Thu, 12 Feb 2009 11:44:09 +0000

Embotelladora Andina S.A. (AKO.A) is a leading bottler and distributor of soft drinks in Chile, Brazil, and Argentina. The company also produces beer, juices, and mineral water. It owns franchised Coca-Cola territories in the metropolitan area of Santiago, Chile and neighboring provinces. In Brazil, the company operates mainly in the cities of Rio de Janeiro and Vitoria.

We reiterate our Buy rating on Embotelladora Andina. The company reported good results for the 4th quarter of 2008, despite the difficult economic environment. We believe this positive trend should continue in the short-to-medium term.

Although the continued crisis throughout the world remains a matter of concern, the company, which is focused on low cost, daily use products, is not tied directly to the international economic cycle. The company's strong balance sheet and healthy financial condition will help Andina to grow in the future.

Read the full analyst report on AKO.A

"AKO.A" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Stocks of Super Bowl Advertisers Part 3

Fred Fuld — Mon, 02 Feb 2009 02:47:00 +0000

Priceline.com (PCLN)br /br /Overstock.com (OSTK)br /br /Chevron Corporation (CVX)br /br /Progressive Corporation (PGR)br /br /Coca Cola (KO)br /br /Denny's (DENN)div class="blogger-post-footer"div class='adsense' style='text-align:center; padding: 0px 3px 0.5em 3px;' script type="text/javascript"!-- google_ad_client="ca-pub-2427831169011625"; google_ad_width=300; google_ad_height=250; google_ad_format="300x250_as"; google_ad_type="text"; google_ad_channel ="8681602088"; google_color_border="FFF3DB"; google_color_bg="FFF3DB"; google_color_link="1B0431"; google_color_url="1B0431"; google_color_text="29303B"; //--/script script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js" /script /div

Publicly Traded Companies Advertising in the Super Bowl

Fred Fuld — Mon, 19 Jan 2009 06:05:00 +0000

a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://2.bp.blogspot.com/_T9VXVyuEITg/SXQbY2xIC2I/AAAAAAAAAnw/ApzEcNwL7XU/s1600-h/Football.jpg"img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;width: 200px; height: 144px;" src="http://2.bp.blogspot.com/_T9VXVyuEITg/SXQbY2xIC2I/AAAAAAAAAnw/ApzEcNwL7XU/s200/Football.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5292885575899548514" //abr /The Super Bowl XLIII is scheduled for Sunday, Feb 1, 2009. The kickoff time is 3:28pm PST. Most of the advertisers are publicly traded companies. They include:br /br /Anheuser-Busch InBev (AHBIF.PK) br /br /Audi AG (AUDVF.PK) br /br /Bridgestone (BRDCY.PK) br /br /Gannett Company, Inc. (GCI) majority owner of CareerBuilder.com, also part owner of Cars.combr /br /Coca-Cola (KO) br /br /Denny’s (DENN) br /br /Dreamworks Animation (DWA) br /br /PepsiCo, Incorporated (PEP) owner of Frito-Lay and SoBe Lifewaterbr /br /HR Block (HRB)br /br /Hyundai Motors (HYMLF.PK)br /br /Monster (MWW)br /br /span style="font-style:italic;"Super Bowl is a registered trademark of the NFL. No affiliation expressed or implied./spandiv class="blogger-post-footer"div class='adsense' style='text-align:center; padding: 0px 3px 0.5em 3px;' script type="text/javascript"!-- google_ad_client="ca-pub-2427831169011625"; google_ad_width=300; google_ad_height=250; google_ad_format="300x250_as"; google_ad_type="text"; google_ad_channel ="8681602088"; google_color_border="FFF3DB"; google_color_bg="FFF3DB"; google_color_link="1B0431"; google_color_url="1B0431"; google_color_text="29303B"; //--/script script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js" /script /div

Coca-Cola (CCE) Teaches Us a Valuable Lesson

Andrew Snyder — Fri, 19 Dec 2008 16:28:01 +0000

pWarren Buffet has shown the prowess of his trading strategy once again. Not only did he walk away with over $1.5 billion in his pocket earlier this week, but now his prized investment in Coca-Cola (NYSE:a href="http://finance.google.com/finance?q=CCE"CCE/a) is jumping in value. /p pWarren Buffet continues to show investors why his name is consistently at the top of the list of richest Americans. The man makes deals that simply work, no matter what happens in the industry or economy surrounding him./p pTake this week’s news as a prime example. Buffet wanted to diversify into the nuclear-power industry, so he offered to buy strongConstellation Energy Group (NYSE:a href="http://finance.google.com/finance?q=ceg" target="_blank"CEG/a)/strong for $4.7 billion. It was a pretty low bid and drew plenty of criticism from shareholders./p pBut most importantly, it#8230;/p

Coca-Cola Looking to Pop Trends – Analyst Blog

Zacks Market Commentaries — Wed, 17 Dec 2008 10:16:48 +0000

The Coca-Cola Company (KO) has strong soft drink brands, leading market shares, and generates solid cash flow. The company's new CEO, Muhtar Kent, will continue with Isdell's revitalization plan to deal with the challenges of sluggish volume trends.

Though world-wide volume growth has begun to improve, it is being driven by non-carbonated beverages and international markets along with incremental marketing spending of $400 million annually.

Profit warnings by two Coca-Cola bottlers -- Coca-Cola Enterprises (CCE) and Coca-Cola Hellenic (CCH) -- are concerning. The Hold recommendation is maintained.

Read the full analyst report on KO

Read the full analyst report on CCE

Read the full analyst report on CCH

"KO" Free Stock Analysis: Buy? Sell? Hold?
"CCE" Free Stock Analysis: Buy? Sell? Hold?
"CCH" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Redefining Deficits, Inflation Plummets, Market and Oil Forecasts, The Dububble and More!

Addison Wiggin — Tue, 16 Dec 2008 22:40:52 +0000

pFeel like getting angry? Treasury publishes latest debt/deficit details#8230; But Fed now encouraged to intervene more… latest data show historic inflation drop#8230; How to invest accordingly? Burritt on near-term trading, Grantham on the long haul#8230; Byron King explains why $40 oil is “worst of both worlds”#8230; Bill Jenkins explains the dollar’s recent downturn#8230; Plus, the Dububble expands… refrigerated beaches on UAE shores#8230;/p p class="BodyCopy" align="left" strongHowever dire you think U.S. government’s fiscal condition has become… today we learn it’s even worse./strong For starters, would you invest in this business?/p p class="BodyCopy" align="center" div div/div /div /pp class="BodyCopy" align="left"2008 fiscal year net operating cost: $1 trillion. Triple that of 2007. And those aren’t funky alternative accounting methods… today’s charts and numbers come directly from the 2008 Financial Report of the U.S. Government, issued yesterday./p p class="BodyCopy" align="left"What is#8230;/p

Stockerblog’s James Bond Stock Index Update: Down 6.47%

Fred Fuld — Mon, 08 Dec 2008 04:14:00 +0000

a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_T9VXVyuEITg/STyfzzjduiI/AAAAAAAAAmU/9ao36XAFsuY/s1600-h/jamesbondindex.jpg"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 273px;" src="http://3.bp.blogspot.com/_T9VXVyuEITg/STyfzzjduiI/AAAAAAAAAmU/9ao36XAFsuY/s400/jamesbondindex.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5277268575732480546" //abr /Quantum Of Solace, the latest James Bond movie, starring Daniel Craig and Olga Kurylenko, was released in the United Kingdom on October 31, and is supposed to have more product placements than any other James Bond movie. There are many publicly traded companies that have paid to have their product appear in the film and several companies that benefit from the Bond movie. Stockerblog has put together the James Bond Stock Index.br /br /Here are the components of the index:br /br /Ford Motor (F) for the Aston Martin, and the Ford Car that Camille drives.br /br /Heineken Holding NV (HKHHF.PK) for the beer.br /br /Diageo plc (DEO) for the Smirnoff vodka.br /br /Swatch Group (SWGNF.PK) for the Omega watch.br /br /Singapore Air (SINGF.PK) which owns 49% of Virgin Atlantic.br /br /Sony (SNE) Sony Ericsson cell phones, laptop and mobile phones.br /br /Coca Cola (KO) Coca-Cola Zero Zero Seven.br /br /Activision Blizzard, Inc. (ATVI) Quantum of Solace video-game.br /br /Corgi International (CRGI) James Bond collectibles and toys. [An extremely low cap and therefore extremely speculative stock]br /br /Avon Products Inc. (AVP) 'Bond Girl 007' women's perfume.br /br /It is interesting to note that through September of this year, the James Bond Stock Index outperformed the Dow Jones Industrial Average, dropping 9.9% versus a drop of 14.2% for the Dow. Unfortunately, since the movie was released, the James Bond Index was down 6.47% versus only a drop of 5.44% for the Dow Jones Industrial Average.br /br /br /Assumptions: br /This is a price-weighted index, similar to the Dow Jones Industrial Average.br /Dividends were included.br /br /Other celebrity indexes worth checking out:br /br /a href="http://stockerblog.blogspot.com/2007/06/paris-hilton-stock-index.html"Paris Hilton Stock Index/a br /br /a href="http://stockerblog.blogspot.com/2007/08/jessica-alba-stock-index.html"Jessica Alba Stock Index/abr /br /a href="http://stockerblog.blogspot.com/2007/07/eva-longoria-stock-index.html"Eva Longoria Stock Index/abr /br /a href="http://stockerblog.blogspot.com/2007/12/gisele-bundchen-stock-index-update.html"Gisele Bundchen Stock Index/abr /br /a href="http://stockerblog.blogspot.com/2008/07/heidi-klum-stock-index.html"Heidi Klum Stock Index/abr / br /a href="http://stockerblog.blogspot.com/2007/11/president-barack-obama-stock-index.html"President Barack Obama Stock Index/abr /br /Author owns F.br /br /By Fred Fuld at a href="http://Stockerblog.com"Stockerblog.com/a.div class="blogger-post-footer"div class='adsense' style='text-align:center; padding: 0px 3px 0.5em 3px;' script type="text/javascript"!-- google_ad_client="ca-pub-2427831169011625"; google_ad_width=300; google_ad_height=250; google_ad_format="300x250_as"; google_ad_type="text"; google_ad_channel ="8681602088"; google_color_border="FFF3DB"; google_color_bg="FFF3DB"; google_color_link="1B0431"; google_color_url="1B0431"; google_color_text="29303B"; //--/script script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js" /script /div

James Bond Stock Index

Fred Fuld — Sun, 16 Nov 2008 09:21:00 +0000

Quantum Of Solace, the latest James Bond movie, starring Daniel Craig and Olga Kurylenko, has just been released, and is supposed to have more product placements than any of the other James Bond movies. There are many publicly traded companies that have paid to have their product appear in the film and several companies that benefit from the Bond movie.

Here are the components of the index:

Ford Motor (F) for the Aston Martin, and the Ford Car that Camille drives.

Heineken Holding NV (HKHHF.PK) for the beer.

Diageo plc (DEO) for the Smirnoff vodka.

Swatch Group (SWGNF.PK) for the Omega watch.

Singapore Air (SINGF.PK) which owns 49% of Virgin Atlantic.

Sony (SNE) Sony Ericsson cell phones, laptop and mobile phones.

Coca Cola (KO) Coca-Cola Zero Zero Seven.

Activision Blizzard, Inc. (ATVI) Quantum of Solace video-game.

Corgi International (CRGI) James Bond collectibles and toys. [A very low cap and therefore very speculative stock]

Avon Products Inc. (AVP) 'Bond Girl 007' women's perfume.

It is interesting to note that through September of this year, the James Bond Stock Index outperformed the Dow Jones Industrial Average, dropping 9.9% versus a drop of 14.2% for the Dow. However, through October of this year, the James Bond index is down 29.1% versus a drop of 26.2% for the Dow. Now that the movie is out, hopefully the James Bond Stock Index will begin to outperform again.

Assumptions:
This is a price-weighted index, similar to the Dow Jones Industrial Average.
Dividends were included.

Other celebrity indexes worth checking out:
Paris Hilton Stock Index
Jessica Alba Stock Index
Eva Longoria Stock Index
Gisele Bundchen Stock Index
Heidi Klum Stock Index
President Barack Obama Stock Index

Author owns F.

By Fred Fuld for Stockerblog.com.

Has Cash Been King for the Past 10 Years?

Jim Musselwhite — Sat, 25 Oct 2008 14:03:13 +0000

If you’re like most investors, you’ve been nearly brainwashed with conventional market “wisdom” that stocks are [...]

Cramer’s New Top 4 Dividend Stocks

CEO Blogger — Thu, 16 Oct 2008 20:51:23 +0000

Cramer recommended four dividend-paying stocks during Thursday’s Stop Trading!. Track Cramer’s picks at: http://trackthepros.com/stocks/category/27 HJ Heinz offers a 4% dividend yield. A stronger dollar has caused some weakness in the stock, but Cramer thinks HNZ should be bought right now. He’s not sure how much longer the company can stay independent if the stock goes any lower. Coca-Cola pays [...]

Intrepid Capital Stock Picks

CEO Blogger — Thu, 16 Oct 2008 20:36:37 +0000

Despite the high level of volatility, MarkTravis, of Intrepid Capital Funds, sees opportunities in this market environment. He advises investors to look for businesses with no financing risk. Track his picks at: http://trackthepros.com/stocks/category/1446 His first pick is Oil-Dri , a maker of cat litter products. “Their business is improving, but their share price is not,” he said. “At $12 or [...]

Intrepid Capital Stock Picks

CEO Blogger — Thu, 16 Oct 2008 20:36:37 +0000

Coca-Cola (KO) Once Again Beats Wall Street Estimates – 3Q Profits Up 14%

QualityStocks — Wed, 15 Oct 2008 19:55:31 +0000

Coca-Cola has been able to weather the economic uncertainties in today’s markets because of the global nature of the company - a good benchmark of a good investment. The company saw a 5 percent increase in case volume in the quarter, including 3 percent growth in carbonated drinks and 10 percent growth in noncarbonated drinks, [...]

IQ Trends TOP TEN TIMELY BUYS

CEO Blogger — Fri, 26 Sep 2008 14:23:21 +0000

“Our Timely Ten — our top ten current buys — is the best collection of high-quality stocks at or near historic low prices and high yields I have seen,” says Kelley Wright in IQ Trends. http://trackthepros.com/stocks/category/1760 “Strictly from an information standpoint, this is the most confusing, contradictory and divergent period I can recall. “I believe the market is [...]

Caxton Associates Hedge Fund | Exclusive 13F Holdings Analysis

Richard C. Wilson — Fri, 26 Sep 2008 04:33:43 +0000

Caxton Associatese

Caxton Associates Hedge Fund Holdings

This post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.

Up next in the macro hedge fund tracking series we have Caxton Associates, ran by Bruce Kovner. Taken from Wikipedia, Kovner's bio is as follows: "Kovner's first trade was for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of hedge fund risk management. In his eventual role as a trader under the legendary Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which today manages over $10 billion in capital and has been closed to new investors since 1992." Year-to-date, Caxton Associates was up 5% as of a few weeks ago.

So, now that we've got a background on Kovner and Caxton Associates, let's take a quick look at his portfolio highlights. Keep in mind that this is merely a brief summary of Caxton's top holdings. Due to the time sensitive nature of the 13F material, I wanted to get this information posted before the next set of filings come out in November.

Top 20 Holdings by % of portfolio
1. Compania Cervecerias Unidas (CCU) - Increased position by 72934%, from 25,000 shares to 18,233,668 shares
2. Electronic Data Systems (EDS) - New Position
3. Activision (ATVI) - New Position
4. Monsanto (MON) - Increased position by 41 %
5. Rockwood Holdings (ROC) - Increased position by 68.8%
6. W-H Energy Services (WHQ) - Increased stake by 195%
7. Occidental (OXY) - Increased stake by 65%
8. ChoicePoint (CPS) - Decreased position by
9. DirecTV (DTV) - Decreased stake by 25%
10. W.R. Grace (GRA) - Boosted stake by 8%
11. Qualcomm (QCOM) - Boosted stake by 44.6%
12. Coca Cola (KO) - Decreased position by 12.5%
13. Rural Cellular (RCCC) - Increased stake by 12.4%
14. Research in Motion (RIMM) - Boosted stake by 8.7%
15. Service Corporation (SCI) - Increased position by 32%
16. Nucor (NUE) - Boosted position by 37%
17. (ANST) - New position
18. XTO (XTO) - Boosted stake by 150%
19. Stewart Enterprises (STEI) - Increased position by 12%
20. Gilead (GILD) - Decreased position by 26.7%

Kovner's Caxton Associates definitely disassociate themselves from the rest of the macro pack when it comes to the equity side of their portfolio. While their portfolio does hold typical energy and technology names often seen in other hedge fund portfolios, they also hold seemingly obscure names that I have yet to see pop up in any other funds I track. So, Kovner and his team may have discovered some diamonds in the rough here. In particular, I want to focus on his top holding: Compania Cervecerias Unidas (CCU). In the quarter prior to the filing, he held just 25,000 shares of this name. Then, over this past quarter, he ratcheted up his holdings in the name big time. He increased his position by 72,934%, bringing it all the way up to his firm's top holding, with a market value of over $642 million at the time of the filing. Needless to say, they bought this name with conviction. And, although I've seen numerous other funds buying up shares of Latin & South American beverage companies, this is the first fund I've seen pick up this name. So, definitely keep an eye on it.

Additionally, I want to point out his holdings in Rocwood Holdings (ROC), W-H Energy Services (WHQ), and Service Corporation (SCI). These are three other names I am seeing for the first time amongst the hedge funds I track. And, he was adding across the board to all three names. Caxton added to WHQ the most, increasing their position by 195%.

Now, turning to the 'hedge fund favorite' names that tend to pop up in numerous hedge fund portfolios that I track, we see Caxton holds positions in Qualcomm (QCOM), Research in Motion (RIMM), XTO Energy (XTO), Occidental (OXY), and Gilead (GILD). Caxton was out adding pretty moderately to all these names. OXY and XTO are easily two of the favorite equity energy plays amongst various hedge funds. And, you have to wonder how they affected their portfolio, given the volatile ride energy stocks have seen as of late. Turning to tech, we see that Caxton, like so many other funds, enjoy large positions in both QCOM and RIMM. As I've noted before, QCOM is easily a top five most common equity holding among the hedge funds I track. And, just like energy, technology stocks have been whipsawed around a lot recently. So, although Caxton was out adding this past quarter, we'll have to see if they were still adding to these names come the next 13F filing.

We already knew hedge funds (and macro funds in particular) had a rough July. And, it's easy to see why, with the heavy commodity exposure many of them had. What we don't yet know is how they've rebounded (if at all). Lastly, I just want to re-emphasize that since Caxton is a macro fund, they obviously have the majority of their positions in the commodity, currency, futures, or other markets. But, at the same time, they still have a sizable chunk of money in the equity markets.

Caxton Associates' full 13F filing listing every position can be found at the SEC.

Guest post by Market Folly

Please check here next week for some further analysis on specific holdings of leading hedge funds.

Analysis #1: Tontine Capital Partners - 13F Hedge Fund Holdings
Analysis #2: Lone Pine Capital - 13F Hedge Fund Holdings
Analysis #3: Tremblant Capital - 13F Hedge Fund Holdings
Analysis #4: Maverick Capital Management 13F Holdings Analysis
Analysis #5: BP Capital Management 13F Holdings Analysis
Analysis #6: Blue Ridge Capital 13F Holdings Analysis
Analysis #7: Clarium Capital Management 13F Holdings Analysis
Analysis #8: Greenlight Capital David Einhorn 13F Holdings
Analysis #9: Soros Fund Management LLC 13F Holdings Analysis

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