Month: January 2012

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Facebook May File For IPO Next Wednesday

The Wall Street Journal reports that social networking website, Facebook may file documents for an IPO next Wednesday.According to an anonymous source, the company is looking at a valuation of an estimates $75 billion to $100 billion.Morgan Stanley (NYSE:MS) is near to scoring the IPO deal, while Goldman Sachs (NYSE:GS) is also likely to play a significant role.

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E.U. Probing Delta Along With Two Other Airlines

The Associated Press reports that the E.U. is opening an investigation into whether three airlines, including Delta (NYSE:DAL), violated E.U. antitrust rules.The bloc is probing whether the airlines, who are all members of a joint venture called the SkyTeam alliance, illegally collaborated on flights between Europe and the U.S., the news service explained. Air France-KLM and Alitalia are the other two airlines.Delta Air Lines (NYSE:DAL) has potential upside of 36.2% based on a current price of $10.49 and an average consensus analyst price target of $14.29.

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Barnes & Noble In Talks To Sell Nook Products In U.K.

Bloomberg, citing a source, reported that Barnes & Noble (NYSE:BKS) is in talks with the U.K.’s Waterstones Booksellers to sell Nook digital devices outside the U.S. for the first time.Waterstones, which is a privately owned company, is the largest bookstore chain in Britain with about 300 stores.Barnes & Noble (NYSE:BKS) has potential upside of 40.1% based on a current price of $11.9 and an average consensus analyst price target of $16.67.

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Credit Crisis: Are We Set Up for The Perfect Storm?

Robert Prechter discusses what’s backing your dollars

By Elliott Wave International

In this video clip, taken from Robert Prechter’s interview with The Mind of Money, Prechter and host Douglass Lodmell discuss “real” money vs the FIAT money system, and what is backing your dollars under our current system. Enjoy this 4-minute clip and then watch Prechter’s full 45-minute interview here >>

 

 

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Get even more valuable insights as Mind of Money host Douglass Lodmell interviews Elliott Wave International’s President, Robert Prechter, about how to keep your money safe, the deflation versus inflation debate, and many more topics that are critical to your financial future.

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Can You Profit From Beer Drinking on Australia Day?

By MoneyMorning.com.au

Whether it’s cultural reflection, or a result of the booze wars between the two biggest supermarket chains, the liquor market in Australia is worth about $16.4 billion to the Aussie economy.

And the industry expands 3% each year.

That got us thinking… with that kind of growth rate, are there any companies worth investing in?


Well, when it comes to investing in our booze industry, pickings are slim. But there are a couple of potential gems out there.

Before you decide which booze firm to invest in, you need to work out which firms not to invest in.

First, we suggest ruling out most of the ASX-listed wineries. Even though Australia’s per capita beer consumption has reached a 62-year low – and wine sales are soaring – the Australian wine industry is suffering.

Thanks to the strong Aussie dollar, in 2011 Australia imported about 67.6 million litres of wine, up from 26.1 million five years ago. In fact, imported wines now account for 20% of sales.

Top French and Italian drops (once unaffordable) now feature on dining tables around Oz. In some bottle shops, French produced Moet & Chandon champagne is cheaper than the locally made Domaine Chandon sparkling wine.

But the high Aussie dollar isn’t just affecting local sales. Wine makers are suffering overseas as well. John Ellis, owner of the privately owned Hanging Rock Winery said this about the international wine market, ‘It’s not just the strength of the dollar, it’s the economic climate in Europe. We’ve basically abandoned that as a market.’

A sign of the struggling wine industry became apparent last year when Foster’s flogged off its wine business.

The ‘demerger’ of Foster’s wine and beer businesses, led to Treasury Wine Estates [ASX: TWE] initial share price offer of $3.20 a share. Surprisingly, in what’s been a gloomy market for wine companies, the stock is up 10%.

The Australian wrote at the time of the demerger: ‘The demerger document warns that every 1c increase in the value of the Australian dollar against the greenback reduces Treasury Wine Estates’ earnings before interest and tax by $4.8m.’

And the company draws almost half of its sales and profits from the US. So any decline in US sales will affect the share price.

As of Wednesday, the stock was trading at $3.52. Yet as far as wine stocks go, this is the only one that’s gained this year. All the other listed wineries are in the red.

So, that’s where you shouldn’t invest. Now where could you stick your cash?

Well, one way to get exposure to the booming booze market could be by investing in our two biggest supermarket chains.

Woolworths [ASX: WOW] liquor sales were up 5.4% for last financial year to $5.9 billion. It owns major retail distributors – including Dan Murphy’s, BWS and Woolworths liquor – and alcohol now accounts for 10% of Woollies revenue.

Then there’s Wesfarmers [ASX: WES]. It only has about $2.7 billion of the alcohol market. Which is about 1.5% of Wesfarmers revenue. But the company has a very aggressive plan to add another 181 alcohol retailers by 2016.

Wesfarmers owns the Coles Liquor, 1st Choice, Liquor Land and Vintage Cellars liquor brands. This creates the chance for it to become a big player in the alcohol sector.

But if buying shares in wineries and alcohol retailers isn’t your thing, how about this boutique brewer…

At the time of its demerger, Foster’s blamed part of its $89 million loss on the decline in the number of beer drinkers.

But ASX-listed Little World Breweries [ASX: LWB] challenges that belief.

Since 2010, its share price has risen 72%. The company specialises in the premium beer market. And overall last year, the premium beer market grew 15%.

The company has ambitious growth plans, and even better for the company, it expects an after tax profit of $5.2 million to $5.7 million this financial year. That means profit will be somewhere between 13% and 24% higher than last year.

It might be tough times for the wine industry and the big brewers. But if this small brewery is any indication, it looks like a pretty good time to be a small premium brewer.

Shae.
Editor, Money Weekend

P.S. Small company stocks are what Kris Sayce focuses on each month in Australian Small-Cap Investigator. And although he doesn’t have any brewery stocks on his buy list, there a few small-cap stocks he believes will put in big gains over the next 12 months. If you’d like a no-obligation trial of Australian Small-Cap Investigator and see Kris’ latest tips now, click here for details…


Can You Profit From Beer Drinking on Australia Day?

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Analyst Moves: RMD, AME

Resmed (RMD) was upgraded today by Deutsche Bank (DB) from hold to buy with a $32 price target, as mask sales remain strong. Shares are higher by about 10.2 percent.

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Daily Dividend Report: PH, MCD, SBUX, COST, HCP

Parker Hannifin Corporation (PH) announced its quarterly dividend of 39 cents per share, an increase of about 5% over its prior dividend in November of 37 cents. The dividend is on payable March 2, 2012 to shareholders of record as of February 10, 2012 and is the Company’s 247th consecutive quarterly dividend, resulting in a total distribution to shareholders of approximately $59 million.

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Monetary Policy Week in Review – 28 January 2012

The past week in monetary policy saw 2 central banks cutting interest rates (Israel -25bps to 2.50%, and Thailand -25bps to 3.00%), and 1 bank cutting its reserve ratio (India cut CRR 50bps to 5.50%).  Meanwhile 7 central banks held rates unchanged (Japan 0.10%, India 8.50%, Hungary 7.00%, Turkey 5.75%, New Zealand 2.50%, USA 0-0.25%, and Hong Kong 0.50%).  The week also featured the US Federal Reserve announcing an inflation target of 2 percent and releasing its inaugural economic forecasts as part of its efforts to improve transparency.

Following are some of the key quotes and comments from the banks that met, often these comments give an insight into how the central bankers are thinking and how their economies are faring.
  • US Federal Reserve (Held rate at 0-0.25%): “To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.  In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
  • Reserve Bank of India (Held rate at 8.50%): “In reducing the CRR, the Reserve Bank has attempted to address the structural pressures on liquidity in a way that is not inconsistent with the prevailing monetary stance. In the two previous guidances, it was indicated that the cycle of rate increases had peaked and further actions were likely to reverse the cycle. Based on the current inflation trajectory, including consideration of suppressed inflation, it is premature to begin reducing the policy rate.”
  • Bank of Japan (Held rate at 0.10%): “Japan’s economic activity has been more or less flat, mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen.  As for domestic demand, business fixed investment has been on a moderate increasing trend and private consumption has remained firm.  On the other hand, exports and production have remained more or less flat, due to the slowdown in overseas economies and the yen’s appreciation as well as the remaining effects of the flooding in Thailand.  Meanwhile, although global financial markets remain under heavy strain, financial conditions in Japan have continued to ease.”
  • Bank of Israel (cut rate 25bps to 2.50%): “The decision to cut the interest rate to 2.5 percent for February is consistent with the interest rate policy aimed at keeping inflation within the price stability target range and is intended to support real economic activity, against the background of the slowdown in global demand.”
  • Bank of Thailand (cut rate 25bps to 3.00%): “The MPC assessed that inflationary pressure remains contained, while headwinds from the global economy continue to pose  risks to Thailand’s economic growth. The MPC therefore voted unanimously to reduce the policy rate by 0.25 percent, from 3.25 percent to 3.00 percent per annum, effective immediately. With  private sector confidence improving but still fragile, this policy accommodation should help accelerate the return of economic activity to normal levels.”
Looking at the central bank calendar, the week ahead is relatively quiet with just a handful of emerging market and frontier market central banks meeting to review policy settings.  Aside from central bank meetings, there will be further European summits on the debt crisis, and the release of high frequency economic indicators such as the Purchasing Manager’s Index (PMI) for many countries.  The week also features FOMC Chairman, Ben Bernanke, testifying before the House Budget Committee – this will be watched by many for any clues of further quantitative easing.

  • MNR – Malaysia (Bank Negara Malaysia) expected to hold at 3.00% on the 31st of Jan
  • COP – Colombia (Bank of Colombia) expected to hold at 4.75% on the 31st of Jan
  • NGN – Nigeria (Central Bank of Nigeria) expected to hold at 12.00% on the 31st of Jan