Mcgraw Hill Companies Incorporated (MHP) announced its quarterly dividend of 25.5 cents per share, an increase of about 2% over its prior dividend in November of 25 cents. The dividend is payable on March 12, 2012 to shareholders of record as of February 27, 2012.
Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned dollars to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.
Brazil Points to a New Sovereign Debt Story
by Jason Jenkins, Investment U Research
Thursday, January 19, 2012
Will there be some slowdown in the BRICs and emerging markets for 2012?
Yes…
But let’s remember: It’s all relative – relative to the fact that those returns will probably be better than those of developed countries. Plus, who can say what dictates an emerging market anymore?
Some have already emerged and can be considered growing markets – a term Jim O’Neill now uses for those countries he once coined BRICS.
Over the last three months we’ve seen a clear flip-flopping in a new world order. It sounds a little dramatic – because it really is. One of the best examples is Brazil. I know they’re a sexy country in the investment world at the moment, but there’s substance behind the flash.
And when you compare them to other supposed developed countries, they began to look a lot better.
Brazil Debt Upgraded in November
Standard & Poor’s upgraded Brazil’s sovereign dollar-denominated foreign debts to BBB from BBB- and upgraded the government’s local currency debt to A- from BBB+. It’s the first time since the nation’s inception that the government has an A rating on its debt. The S&P said the outlook for Brazil’s credit profile was stable with over $350 billion in foreign currency reserves, a stable economy and strong leadership on both the monetary and fiscal fronts.
Now if you take this information and compare it with Italy’s current bio – which somehow still has an A credit rating – there’s not much of comparison.
The Sixth-Largest Economy
According to the Centre for Economics and Business Research (CEBR), Brazil has already overtaken the U.K. as the world’s sixth-largest economy. As the banking crash of 2007 to 2008 and its subsequent recession are still being felt by developed countries, Brazil has been propelled by its exports to China and the rest of Asia.
The English newspaper The Guardian reported – while covering the CBRE’s announcement – that Europe is expected to suffer a “lost decade” of low growth following a credit binge over the past 20 years. Paying back debts over a short timescale will restrict growth and prevent many countries, including the U.K., from clawing back output lost in the banking crash for many years.
A Record Low Yield on Foreign Bonds
The Brazilian government sold $825 million in long-dated bonds on Wednesday and demand for the debt was so great that yield came in at a record low 3.449 percent. The bond’s coupon yield at par was 4.875 percent, but buyers pushed the value of the bond higher, meaning interest payments, or current yield on the bond, was sold at historic lows for Brazilian foreign debt.
Demand for Brazilian government’s dollar denominated bonds was seven times the anticipated volume, with an order book of more than $3.5 billion, according to Itau, one of the underwriters.
“Sovereign U.S. dollar paper of high quality issuers like Brazil still are favored by the marketplace in these turbulent times,” said Sara Zervos, an international bond fund manager at Oppenheimer Funds. “It’s analogous to the amount of money invested in money markets and U.S. Treasuries, low yield, but ‘safe.’”
Above is a table of the CEBR’s Top 10 national economy 10-year forecasts. No change in the top three… but the middle gets very interesting.
Good Investing,
Jason Jenkins
Article by Investment U
AutoNavi (AMAP) was downgraded today by Jefferies (JEF) to hold from buy with a price target of $12, as the company’s business is in transition. Shares are lower by about 5.3 percent.
Advance Auto Parts (AAP) was upgraded today by Credit Suisse (CS) from neutral to outperform with a price target of $80, as the firm believes that the stock has yet to price in momentum from solid earnings. Shares are higher by about 1.7 percent.
Stocks held onto modest gains, as investors took into consideration mixed economic data, including weekly jobless claims which fell to a near four-year low. The Labor Department reported that claims were down 50,000 to a seasonally adjusted 352,000, far better than economists had expected.
U.S. Gas and Diesel Prices: The Latin American Connection
by David Fessler, Investment U’s Energy and Infrastructure Specialist
Thursday, January 19, 2012
Pull into any gas station in the United States, and you’ll find diesel fuel more expensive than regular gasoline. About $0.46 a gallon more.
In the United States, diesel and heating oil (known collectively as distillate fuels) have been higher than gas since 2004. Before that, it was the other way around. So what’s changed?
In a word, demand. Prior to six or seven years ago, the demand here for gasoline was higher than for distillates. The only time diesel and heating oil jumped above the price for gasoline was during colder-than-usual winters, when demand for heating oil soared.
Very little U.S. distillate production was exported, so prices fluctuated primarily based on the supply and demand equation here.
Today, it’s whole different ballgame. Diesel’s much higher than gasoline because, on a worldwide basis, the demand for it is greater than it’s ever been. Oil refineries, ever the opportunists, are producing and exporting as much of it as they possibly can.
It’s the exporting that upsets the supply demand equation in the United States. With more of U.S. distillate production headed for foreign shores, the dearth of supply makes it more expensive here.
When I travel to Latin America, diesel is the number one transportation fuel. Nearly every car, bus and truck you see runs on the stuff.
Consequently, gasoline is more expensive there than diesel. In some places, it’s the equivalent of $1.00 a gallon more. Once again, it’s all about supply and demand, and now it depends on where you live.
There’s another factor at work here, as well. The United States has imposed stricter limits on the sulfur content of diesel, whereas many other countries haven’t. The low-sulfur variety is more expensive to produce, and most of it stays here.
With a few key East Coast refineries shutting down over the next year, things could get even worse for diesel prices here. But there’s a light at the end of the proverbial tunnel.
Strict new government standards on emissions, as well as a pending 54.5 miles-per-gallon standard that’s supposed to be in place by 2015, could spell the beginning of a diesel-powered renaissance in the United States.
If demand for diesel here exceeds that of gasoline on a permanent basis, more refineries will start producing it. Those that already do will begin to export less, since the margins will be greater here. Distribution costs will be lower since there won’t be a ship involved.
As more and more manufacturers begin to offer diesel-powered vehicles here, it’s difficult to imagine that U.S. consumers will turn their noses up at them.
Volkswagen has offered diesel version of its most popular models here for decades, and has done very well with them. But now GM, Honda and Toyota are all planning to introduce diesel variants by 2014.
Even at $0.46 cents a gallon premium over gasoline, diesel will certainly make economic sense to a lot of cost-conscious consumers.
Will that bring prices down here? We’ll have to wait and see, but my bet is prices will stay elevated due to the global demand for crude.
The bottom line is that oil, in just about any form, is going to be a good investment for some time to come.
Good Investing,
Dave Fessler
Article by Investment U
In trading on Thursday, agriculture & farm products shares were relative laggards, down on the day by about 1.4%. Helping drag down the group were shares of Origin Agritech Limited (SEED), down about 10% and shares of Cresud Sacip YA Adr (CRESY) trading flat on the day.
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let’s look at two noteworthy recent insider buys.
How to set up your charts for price action trading on MT4 –
Being one of the most commonly used charting platforms for spot FX trading we’ll focus on Meta Trader 4 for this tutorial. Being such a versatile platform, MT4 allows traders a variety of options in the way they can lay their charts out. The easiest and most logical way to set up your charts for price action trading is to use a different profile for each currency pair you actively trade. Using a separate profile for each pair allows you as a trader to solely focus on a specific pair without running the risk of having your judgment influenced or clouded by other crosses.
After opening up our MT4 platform, the first thing we want to do is click on the default tab in the status bar as shown below. MT4 will then bring up a list of all profiles we have saved. We then want to click on the first in the list which is Default. This will open a default profile which we will later customize to our price action trading format.
The next step we have to take is opening 4 of the same chart for our default profile. We simply click on the new chat tab (or file -> new chart). This will bring up a list of the pairs our broker will allow us to trade. We then open 4 charts for the same pair. We can confirm we’ve opened 4 charts by looking just above the status bar at the bottom of the screen as seen below.
The third step we have to take is arranging our 4 charts so that they are all visible on the screen at the same time. To do this we click on the ‘window’ tab on the top tool bar and then select either: Tile horizontally or Tile vertically. Our charts are then displayed as seen below, with each one taking a quarter of the screen.
In our fourth step we have to change the Timeframe for each chart on our screen. To do this we simply have to click on each chart separately and then change the timeframe using the tabs at the top of the screen as seen below. We can also click (Charts -> periodically) from the main tool bar which will allow us to change the timeframe. The timeframes we use for price action trading are: 1hr, 4hr, Daily & Weekly. Setting our charts up in this way allows us to see the price for each pair on one screen using different timeframes allowing for better analysis.
We now have our first profile set up. The next thing we need to do is save it as a new profile. To do this we click the default tab in the status bar at the bottom of the screen. We then click on ‘Save profile as…’
We then save the profile using a name we can associate with the pair we’re saving. In the eur/usd example we’ve used we will save our new profile as ‘EUR/USD. We then click OK.
We now have our 1st profile saved. Every time we open MT4 we can simply click the profiles tab on the status bar at the bottom of our screen to open a list of our saved profiles
We have to repeat the process for each pair we want to trade or analyze remembering to save a new profile for each one. Once we set up our charts for each pair we simply click the profiles tab on the status bar allowing us to easily change between charts.
The method for chart layouts we’ve explained in this tutorial is an easier way to analyze each currency pair we trade without over complicating our analysis with numerous different pairs on the same screen. This layout also allows for clearer chart viewing and easy switching between pairs.
