The IT industry is something I have stayed largely out of. This could be the double-jeopardy I feel from it being my core industry of work, but then again that has never kept me out of Oil and Gas. I think up until early 2010 I did not see where the growth would come. Now I’m starting to feel quite differently.
All year I have kept an eye on the storage companies like Seagate (STX), Western Digital (WDC), EMC (EMC), and NetApp (NTAP). Both EMC and NetApp have had good years, with EMC up 30% and NetApp up 56%. While at the same time the disk makers Seagate and Western Digital are down 20% and 25% respectively. I don’t think I would have picked it to end that way, so I have stayed out because I thought the actual HW was where the money would be made. Clearly I know less than I think…
Cisco (CSCO) on the other hand, they make lots of things… Hardware at every level from consumer to enterprise, Software, equipment, and they sell services. What could be better?
November 11th opened up a tremendous opportunity then, as Cisco issued low guidance the stock got pummeled. CSCO dropped 15% in one day, two days later I bought in. One week after that, the company announced a $10B buy-back of their stock. Clearly I was not the only one who thought the 15% drop was an overreaction.
CSCO is down about 17.5% for the year, and it is nowhere near its $33 highs in 2007. That said it is also off its 2009 lows of ~$14. I think this stock is a great long-term purchase in this $19.50 - $20 range. I also think the PE of only 14 is an indication of how underpriced this stock currently is. If they are able to make some big steps in 2011, then we should see this stock back in the $25 range where it was prior to the forecast announcements. If 2011 is a lackluster year, then I would hope 2012 could deliver that $25 range. This seems like a great 12 – 24 month opportunity.
Thursday, December 16, 2010
Talbots
On 7-December Talbots (TLB) released third quarter results, and very disapointing forth quarter guidance. They now expect that they could see a loss of 5 cents per share. This verse and average analyst forecast of 14 cents earnings per share. While income was up in the third quarter to $17M vs. $15.5M a year earlier, the earnings per share were down to 24 cents vs. 28 cents a year earlier.
All this seems to point to a company going down the wrong path, and that could well be. Never the less, I have purchased Talbots (TLB) today at $8.70. There are a few reasons for this which I will detail below.
First reason: The easy pickings that have been around in the dividend stocks are not looking so “easy” any more. Many of my favorite dividend stocks are near or at 52-week highs (see the whole oil industry). This does not seem like the right time to add to those holdings, or to find an entry point into a great stock like ConocoPhillips (COP). This is even more true in the preferred stocks, most of the great yield preferreds are now over their issue price, thus taking away some of their appeal.
Second reason: It’s time to try to look at some stocks that might “pop” and produce some good growth. Many of those stocks have already had big breakout years. And while TLB is down ~25% since the bad earnings, it is only down 3% on the year. During this year Ann Taylor (ANN) is up 104%. Perhaps ANN is a better pick, but with a 104% run-up this year I have to think the better chance for a “pop” in the next 6 months is TLB.
Third reason: US retail appears to be on the brink of a comeback. So far none of the indicators show anything as strong as the pre-recession years, but we still have 10% unemployment. My bet is that if unemployment starts to level off, and the economy starts to pickup, then we could see a “pop” in retail. This might be just as good an argument to buy ANN by saying it should see continued strength.
So is Talbots the right retail play? I think if my main objective here is long-term steady growth, then perhaps not. However I hold lots of long-term steady growth plays, and that is not what I am looking at here. For a ‘bang for your buck’ retail play that has a good chance of making a “pop” in the next 6 months, I think TLB is the right play. Let’s face it, everyone is planning for them to fall on their face. Even if they just stumble across the line there may be gains to make. And if they are really able to turn the ship around, and get back on a track to strong profitability, then there may be big gains to be had.
All this seems to point to a company going down the wrong path, and that could well be. Never the less, I have purchased Talbots (TLB) today at $8.70. There are a few reasons for this which I will detail below.
First reason: The easy pickings that have been around in the dividend stocks are not looking so “easy” any more. Many of my favorite dividend stocks are near or at 52-week highs (see the whole oil industry). This does not seem like the right time to add to those holdings, or to find an entry point into a great stock like ConocoPhillips (COP). This is even more true in the preferred stocks, most of the great yield preferreds are now over their issue price, thus taking away some of their appeal.
Second reason: It’s time to try to look at some stocks that might “pop” and produce some good growth. Many of those stocks have already had big breakout years. And while TLB is down ~25% since the bad earnings, it is only down 3% on the year. During this year Ann Taylor (ANN) is up 104%. Perhaps ANN is a better pick, but with a 104% run-up this year I have to think the better chance for a “pop” in the next 6 months is TLB.
Third reason: US retail appears to be on the brink of a comeback. So far none of the indicators show anything as strong as the pre-recession years, but we still have 10% unemployment. My bet is that if unemployment starts to level off, and the economy starts to pickup, then we could see a “pop” in retail. This might be just as good an argument to buy ANN by saying it should see continued strength.
So is Talbots the right retail play? I think if my main objective here is long-term steady growth, then perhaps not. However I hold lots of long-term steady growth plays, and that is not what I am looking at here. For a ‘bang for your buck’ retail play that has a good chance of making a “pop” in the next 6 months, I think TLB is the right play. Let’s face it, everyone is planning for them to fall on their face. Even if they just stumble across the line there may be gains to make. And if they are really able to turn the ship around, and get back on a track to strong profitability, then there may be big gains to be had.
Thursday, October 28, 2010
Energy Earnings
With Chevron (CVX) trading at basically a 52-week high going into its earnings release (tomorrow 29-Oct), I would recommend to keep an eye on ConocoPhillips (COP). The share price for COP has fallen off a bit from its 52-week high, hit late last week. I have seen before where they announce earnings, pay their dividend, and the stock pulls back 5% - 10%. COP shares are down about 3% from their pre-earnings price, I will be looking to see if the pull back brings the stock down below $55 a share. I think that if this pullback (without a broader market move) drops the shares down to $55 it would be a good entry point into COP.
Monday, October 18, 2010
Citigroup Inc.
Citigroup Inc.
Watch out for the earnings trap… It is not just Citigroup, but as a holder of Citigroup (C) stock it is the one that caught my attention. Today Citigroup beat earnings estimates, and the stock is up almost 6%.
So if the company beat earnings estimates what “trap” am I talking about? The “trap” I’m referring to is the practice of using cash reserves to cover bad loans. As one analyst put it “Reducing loan loss reserves is not something you can do indefinitely”.
If you look at just the top line and bottom line you can see where the problem is. While they beat on the bottom line, the top line (revenue) is lower than their second quarter. So they have actually beat expectations in the near-term (likely why the stock is up today), but their revenue dipping does not inspire confidence for their long-term prospects. Further to that, they used cash reserves to cover bad loans. As mentioned above, this is not sustainable for the long-term.
I currently hold Citigroup (C), and do not plan to sell (I have a small loss) on this spike. What this spike does is that it raises concerns about when they might be back to real profitable. I would fully expect that this stock can break the $5 barrier when the economy starts to make a recovery, but caution those who think it will go up three-fold from here.
The chance to make a 20%-25% gain is there in the medium to long-term, but I do not see the 300% gain many are hoping for. The biggest risk is getting in at these prices and expecting something to happen in the very near-term. For a medium-term play I think $5 is a real target, perhaps $6 if the housing and credit markets recover quicker than expected. Just don’t look at today’s “beat” of earnings as a strong sign of their health.
Watch out for the earnings trap… It is not just Citigroup, but as a holder of Citigroup (C) stock it is the one that caught my attention. Today Citigroup beat earnings estimates, and the stock is up almost 6%.
So if the company beat earnings estimates what “trap” am I talking about? The “trap” I’m referring to is the practice of using cash reserves to cover bad loans. As one analyst put it “Reducing loan loss reserves is not something you can do indefinitely”.
If you look at just the top line and bottom line you can see where the problem is. While they beat on the bottom line, the top line (revenue) is lower than their second quarter. So they have actually beat expectations in the near-term (likely why the stock is up today), but their revenue dipping does not inspire confidence for their long-term prospects. Further to that, they used cash reserves to cover bad loans. As mentioned above, this is not sustainable for the long-term.
I currently hold Citigroup (C), and do not plan to sell (I have a small loss) on this spike. What this spike does is that it raises concerns about when they might be back to real profitable. I would fully expect that this stock can break the $5 barrier when the economy starts to make a recovery, but caution those who think it will go up three-fold from here.
The chance to make a 20%-25% gain is there in the medium to long-term, but I do not see the 300% gain many are hoping for. The biggest risk is getting in at these prices and expecting something to happen in the very near-term. For a medium-term play I think $5 is a real target, perhaps $6 if the housing and credit markets recover quicker than expected. Just don’t look at today’s “beat” of earnings as a strong sign of their health.
Monday, October 11, 2010
Updates
Updates to previous posts:
On July 29th I recommended Oasis Petroleum Inc. (OAS) at $16.29 a share. It has never been back to that price and sits at $22.65 (well above my $20 end of year price target). This represents a gain of just under 35%, I have a 3% trailing stop-loss on the stock and will let it continue to run for now.
On June 14th I posted about a simple covered call play on oil futures (USO), the plan was to sell October calls at $36 a share, the purchase price was ~$34 share at the time. I netted a 6.5% premium for my October options (selling them for $2.25). This means my actual sale price is $38.25 a share. So should this stock close above $36 on Friday and below $38.25 I will have come out ahead and turned an 11.7% profit. Currently USO is at $35.60, and November calls would net another 3.75% premium.
On April 23rd I recommended Vale (VALE) a Brazilian mining company. This stock has turned out to be very up and down since that purchase, and at times I have been down quite a lot. I stand by this pick, and fully expect that in the mid-term this stock will show solid returns. So far I am only up 2.77% on this stock.
On July 29th I recommended Oasis Petroleum Inc. (OAS) at $16.29 a share. It has never been back to that price and sits at $22.65 (well above my $20 end of year price target). This represents a gain of just under 35%, I have a 3% trailing stop-loss on the stock and will let it continue to run for now.
On June 14th I posted about a simple covered call play on oil futures (USO), the plan was to sell October calls at $36 a share, the purchase price was ~$34 share at the time. I netted a 6.5% premium for my October options (selling them for $2.25). This means my actual sale price is $38.25 a share. So should this stock close above $36 on Friday and below $38.25 I will have come out ahead and turned an 11.7% profit. Currently USO is at $35.60, and November calls would net another 3.75% premium.
On April 23rd I recommended Vale (VALE) a Brazilian mining company. This stock has turned out to be very up and down since that purchase, and at times I have been down quite a lot. I stand by this pick, and fully expect that in the mid-term this stock will show solid returns. So far I am only up 2.77% on this stock.
Wednesday, August 25, 2010
Healthcare ETF's
Battle on the healthcare front
Below is a look at how drastically different 3 “healthcare” ETF’s have preformed. Below that are some details about each funds industry exposure
FIRST TRUST HEALTH CARE ALPHADEX FUND (FXH)
ISHARES S&P GLOBAL HEALTHCARE (IXJ)
ISHARES DOW JONES US HEALTHCARE (IYH)
YTD
FXH -1.02%
IXJ -10.06%
IYH -8.05%
LLY -4.08%
1-yr
FXH +14.88%
IXJ -1.85%
IYH -0.53%
LLY +1.12%
May 2007 till today
FXH +7.87%
IXJ -24.01%
IYH -18.66%
LLY -42.31%
Now for a closer look at these 3 funds that claim to be covering the same sector of “healthcare”, yet have such drastically different returns:
Industry Exposure (FXH):
40.95% - Health Care Providers & Services
22.91% - Health Care Equipment & Supplies
19.91% - Pharmaceuticals
7.17% - Biotechnology
4.71% - Life Sciences Tools & Services
2.30% - Health Care Technology
2.02% - Internet Software & Services
Industry Exposure (IXJ):
61.56% - Pharmaceuticals
11.22% - Health Care Providers & Services
10.71% - Health Care Equipment & Supplies
8.54% - Biotechnology
2.30% - Life Sciences Tools & Services
0.27% - Health Care Technology
Industry Exposure (IYH):
47.60% - Pharmaceuticals
19.06% - Health Care Equipment & Supplies
15.22% - Health Care Providers & Services
14.11% - Biotechnology
3.80% - Life Sciences Tools & Services
A deeper look into these funds exposure areas clears up the large gaps in returns:
Lately there has been a full-fledged beat down on big Pharma (I’m not saying if it is justified or not) and you’ll notice right away that FXH has less than 20% of its holdings in Pharma. Compare that to the other two (IXJ & IYH) who have 62% and 48% in Pharma. I’ve thrown Eli Lilly (LLY) into the returns for comparison, as I think it is the best of the big Pharma stocks.
Given that I’m holding LLY already, and I’m not too hot on the Pharma sector as a whole, I find no reason to use IXJ or IYH to play the “healthcare” segment. Rather I see the exposure of FXH touching the sectors I am more interested in; equipment and service providers. These are the two areas, along with healthcare technologies, that I think have the best chance of growth.
I currently own some IXJ, and this research has convinced me to swap that out in favor of FXH. If Pharma starts to make a comeback, there is no doubt I’d be better off in either IXJ or IYH. For now I prefer the position of FXH, I’ll continue to hold LLY as my Pharma play.
Below is a look at how drastically different 3 “healthcare” ETF’s have preformed. Below that are some details about each funds industry exposure
FIRST TRUST HEALTH CARE ALPHADEX FUND (FXH)
ISHARES S&P GLOBAL HEALTHCARE (IXJ)
ISHARES DOW JONES US HEALTHCARE (IYH)
YTD
FXH -1.02%
IXJ -10.06%
IYH -8.05%
LLY -4.08%
1-yr
FXH +14.88%
IXJ -1.85%
IYH -0.53%
LLY +1.12%
May 2007 till today
FXH +7.87%
IXJ -24.01%
IYH -18.66%
LLY -42.31%
Now for a closer look at these 3 funds that claim to be covering the same sector of “healthcare”, yet have such drastically different returns:
Industry Exposure (FXH):
40.95% - Health Care Providers & Services
22.91% - Health Care Equipment & Supplies
19.91% - Pharmaceuticals
7.17% - Biotechnology
4.71% - Life Sciences Tools & Services
2.30% - Health Care Technology
2.02% - Internet Software & Services
Industry Exposure (IXJ):
61.56% - Pharmaceuticals
11.22% - Health Care Providers & Services
10.71% - Health Care Equipment & Supplies
8.54% - Biotechnology
2.30% - Life Sciences Tools & Services
0.27% - Health Care Technology
Industry Exposure (IYH):
47.60% - Pharmaceuticals
19.06% - Health Care Equipment & Supplies
15.22% - Health Care Providers & Services
14.11% - Biotechnology
3.80% - Life Sciences Tools & Services
A deeper look into these funds exposure areas clears up the large gaps in returns:
Lately there has been a full-fledged beat down on big Pharma (I’m not saying if it is justified or not) and you’ll notice right away that FXH has less than 20% of its holdings in Pharma. Compare that to the other two (IXJ & IYH) who have 62% and 48% in Pharma. I’ve thrown Eli Lilly (LLY) into the returns for comparison, as I think it is the best of the big Pharma stocks.
Given that I’m holding LLY already, and I’m not too hot on the Pharma sector as a whole, I find no reason to use IXJ or IYH to play the “healthcare” segment. Rather I see the exposure of FXH touching the sectors I am more interested in; equipment and service providers. These are the two areas, along with healthcare technologies, that I think have the best chance of growth.
I currently own some IXJ, and this research has convinced me to swap that out in favor of FXH. If Pharma starts to make a comeback, there is no doubt I’d be better off in either IXJ or IYH. For now I prefer the position of FXH, I’ll continue to hold LLY as my Pharma play.
Friday, August 13, 2010
Role Reversal
Role Reversal
Stocks return historically 7% a year… at least that’s what we are told. But what about under these strange market conditions?
The Vanguard 500 Index (the most widely held mutual fund) is sitting on a -2.60% YTD. The Munder Mid-Cap Growth fund, a favorite of mine, has squeaked out a +2.43% YTD. I’d venture to bet that if you check most of the “stock based” mutual funds you’ll find them in this range -2.5% to +2.5%, with some small deviation.
So why then would bond funds be doing so amazingly well? Keeping in mind we are not even 2/3rds of the way done with the year yet… the numbers are staggering:
Templeton Global Bond (TGBAX), which I wrote about in November of last year is at +4.57% not counting monthly distributions of about 0.4%. Which for those trying to do the math in your head is another 2.8%.
MFS Intermediate Income Trust (MIN) is sitting at +3.73% YTD. Add in a monthly distribution of ~0.7% and you have another 4.9% .
New America High Income Fund (HYB) is sitting at +10.39% YTD. Again add in a monthly distribution of ~0.68% and you add another 4.76%.
Even the Vanguard GNMA fund (VFIIX) which is 80% Mortgage backed is up 3.95% plus distributions…
Many of these funds are not climbing back to where they once were, most are hitting new highs. So why then are these funds being pumped up so much?
Coupon notes in the corporate bond markets have been going sky high, read any of my blog posts about preferred stocks and you’ll see the rates are amazing. For this reason any fund investing in corporate bonds is getting great yield (see HYB at 93% & MIN 48% corp bonds).
In order to attract investors countries and municipalities are having to raise their bond rates too. This is very evident with international bonds. TGBAX takes advantage of this holding 80% bonds, of which 60% are foreign. Look at their top holding, it is the commonwealth of Australia, and was issued at 5.75%. Third on their list is one from New South Wales (also Australia, but a state this time) issued at 6%. More risky notes such as Brazil are issued at 10%. Now there can be no question as to why the distributions are so high.
So a question to ask yourself, retirement age or not, do I want to start collecting this type of distribution income? In your 20’s or 30’s many are saying put all your money in stocks (or 90% in stocks), but is that advise you should be following in these uncertain times? For now I will allow my accounts to get “heavy” in the bond and fixed income areas, I think I will be quite happy that I have.
Stocks return historically 7% a year… at least that’s what we are told. But what about under these strange market conditions?
The Vanguard 500 Index (the most widely held mutual fund) is sitting on a -2.60% YTD. The Munder Mid-Cap Growth fund, a favorite of mine, has squeaked out a +2.43% YTD. I’d venture to bet that if you check most of the “stock based” mutual funds you’ll find them in this range -2.5% to +2.5%, with some small deviation.
So why then would bond funds be doing so amazingly well? Keeping in mind we are not even 2/3rds of the way done with the year yet… the numbers are staggering:
Templeton Global Bond (TGBAX), which I wrote about in November of last year is at +4.57% not counting monthly distributions of about 0.4%. Which for those trying to do the math in your head is another 2.8%.
MFS Intermediate Income Trust (MIN) is sitting at +3.73% YTD. Add in a monthly distribution of ~0.7% and you have another 4.9% .
New America High Income Fund (HYB) is sitting at +10.39% YTD. Again add in a monthly distribution of ~0.68% and you add another 4.76%.
Even the Vanguard GNMA fund (VFIIX) which is 80% Mortgage backed is up 3.95% plus distributions…
Many of these funds are not climbing back to where they once were, most are hitting new highs. So why then are these funds being pumped up so much?
Coupon notes in the corporate bond markets have been going sky high, read any of my blog posts about preferred stocks and you’ll see the rates are amazing. For this reason any fund investing in corporate bonds is getting great yield (see HYB at 93% & MIN 48% corp bonds).
In order to attract investors countries and municipalities are having to raise their bond rates too. This is very evident with international bonds. TGBAX takes advantage of this holding 80% bonds, of which 60% are foreign. Look at their top holding, it is the commonwealth of Australia, and was issued at 5.75%. Third on their list is one from New South Wales (also Australia, but a state this time) issued at 6%. More risky notes such as Brazil are issued at 10%. Now there can be no question as to why the distributions are so high.
So a question to ask yourself, retirement age or not, do I want to start collecting this type of distribution income? In your 20’s or 30’s many are saying put all your money in stocks (or 90% in stocks), but is that advise you should be following in these uncertain times? For now I will allow my accounts to get “heavy” in the bond and fixed income areas, I think I will be quite happy that I have.
Thursday, July 29, 2010
Oasis Petroleum Inc.
Oasis Petroleum Inc. (OAS)
Oasis is a Houston based E&P company, that recently IPO’ed on the NYSE. Yesterday several large analysts initiated coverage of the stock putting price targets at around $20 a share. I decided that I would like to pick up this stock, here are some of the reasons why.
Oasis (OAS) has just under 300,000 acres of leasehold in the Williston Basin. This is located in North Dakota and Montana, and is one of the larger onshore US oil fields. In fact the US Geological Survey (USGS) now says there are 3.0 – 4.3 billion barrels of ‘technically recoverable oil’. In 1995 they assessed only 151 million barrels. Advances in drilling technology mean that more oil is recoverable than ever before. Oasis seeks to utilize these new technologies, along with its vast amount of land leases, to extract the oil.
OAS went public on June 17th at about $14 a share, I purchased it July 28th for $16.79. In the last two days the stock is up about 3.5%, and I am excited to see what it can do. A run up to the $20 target issued by the analysts would be almost 20% gain for me.
Oasis is a Houston based E&P company, that recently IPO’ed on the NYSE. Yesterday several large analysts initiated coverage of the stock putting price targets at around $20 a share. I decided that I would like to pick up this stock, here are some of the reasons why.
Oasis (OAS) has just under 300,000 acres of leasehold in the Williston Basin. This is located in North Dakota and Montana, and is one of the larger onshore US oil fields. In fact the US Geological Survey (USGS) now says there are 3.0 – 4.3 billion barrels of ‘technically recoverable oil’. In 1995 they assessed only 151 million barrels. Advances in drilling technology mean that more oil is recoverable than ever before. Oasis seeks to utilize these new technologies, along with its vast amount of land leases, to extract the oil.
OAS went public on June 17th at about $14 a share, I purchased it July 28th for $16.79. In the last two days the stock is up about 3.5%, and I am excited to see what it can do. A run up to the $20 target issued by the analysts would be almost 20% gain for me.
Tuesday, July 20, 2010
Does “playing the market” payoff?
Does “playing the market” payoff?
A short note on “playing the market”. Recently I was very discouraged to see all the red in my portfolio. I was looking at an account that I had first opened specifically for “playing” in the market. I was going to use this account to really cut my teeth on the more advanced market strategies, like trading options.
Over the course of the last 6-years that account became more and more my primary stock account. In 2009 alone I doubled the amount of money in the account… and yet here I have all this red, even having put money in during the down years…
Upon closer inspection I found that over the 6yr life of this account I was actually up; less than 1%, but up none the less. When I looked at the S&P, Nasdaq, and DOW over the same period I had beat all but the Nasdaq. Quite handily too, the S&P was down over 5% and the DOW was down nearly 4%. Suddenly my 1% looked a lot better.
I started to evaluate some of my “red” holdings… Many were stocks that I happened to originally buy near the high point in 2008. There has been no reason to sell them off and take my losses, as I think they are still good companies. In fact many of them I hold multiple “lots”, and have good gains on a portion of the holdings. Others are not quite so good.
I still hold PGH which is a Can-Royal. There was a window back in 2005/2006 when these things were solid gold. High dividend, which had to be paid by law, safe industries, stable stock price. Since then lots has changes, and probably should have gotten out early in those changes (particularly after some legal changes).
Also doing miserable, DRYS. The shipping industry has been devastated since the ‘collapse’ of the global economy. Should I continue to hold this stock, it’s a question I wrestle with. I also hold DSX which has been equally devastated. There is probably no reason to hold two shipping companies given the current state of global trade.
Under the surface though there are stocks like CEDC, which has been highly volatile, but the company itself has continued to grow tremendously. I’d venture to guess if you adjusted (favorably) for the fall in the Euro the stock would be a good 30% higher… but that’s not how things work. Given that they are dealing mostly in Europe, and then having to convert to US dollars, they are being hurt right now. I have about a 5% loss on my total holdings of CEDC, but I have one lot that is up over 100% and a larger lot that is down 20%.
Banks make up another portion of my ‘red’ stocks. They are all down 5%-20%, however several of those are preferred stock I’ve picked up in the last 6months. Once you start factoring in distributions (or dividends on some) then the loss is much smaller. I think in the long run I will make out quite well as those shares move back towards their issue price and continue to pay +8% dividends on their way there.
In short then; Yes, I would say it is worth “playing the market”. I also feel I have learned a lot about when to cut my losses, and while I would not have done that during the huge down turn, I did manage to go into that downturn with some stocks that had already started their falls.
A short note on “playing the market”. Recently I was very discouraged to see all the red in my portfolio. I was looking at an account that I had first opened specifically for “playing” in the market. I was going to use this account to really cut my teeth on the more advanced market strategies, like trading options.
Over the course of the last 6-years that account became more and more my primary stock account. In 2009 alone I doubled the amount of money in the account… and yet here I have all this red, even having put money in during the down years…
Upon closer inspection I found that over the 6yr life of this account I was actually up; less than 1%, but up none the less. When I looked at the S&P, Nasdaq, and DOW over the same period I had beat all but the Nasdaq. Quite handily too, the S&P was down over 5% and the DOW was down nearly 4%. Suddenly my 1% looked a lot better.
I started to evaluate some of my “red” holdings… Many were stocks that I happened to originally buy near the high point in 2008. There has been no reason to sell them off and take my losses, as I think they are still good companies. In fact many of them I hold multiple “lots”, and have good gains on a portion of the holdings. Others are not quite so good.
I still hold PGH which is a Can-Royal. There was a window back in 2005/2006 when these things were solid gold. High dividend, which had to be paid by law, safe industries, stable stock price. Since then lots has changes, and probably should have gotten out early in those changes (particularly after some legal changes).
Also doing miserable, DRYS. The shipping industry has been devastated since the ‘collapse’ of the global economy. Should I continue to hold this stock, it’s a question I wrestle with. I also hold DSX which has been equally devastated. There is probably no reason to hold two shipping companies given the current state of global trade.
Under the surface though there are stocks like CEDC, which has been highly volatile, but the company itself has continued to grow tremendously. I’d venture to guess if you adjusted (favorably) for the fall in the Euro the stock would be a good 30% higher… but that’s not how things work. Given that they are dealing mostly in Europe, and then having to convert to US dollars, they are being hurt right now. I have about a 5% loss on my total holdings of CEDC, but I have one lot that is up over 100% and a larger lot that is down 20%.
Banks make up another portion of my ‘red’ stocks. They are all down 5%-20%, however several of those are preferred stock I’ve picked up in the last 6months. Once you start factoring in distributions (or dividends on some) then the loss is much smaller. I think in the long run I will make out quite well as those shares move back towards their issue price and continue to pay +8% dividends on their way there.
In short then; Yes, I would say it is worth “playing the market”. I also feel I have learned a lot about when to cut my losses, and while I would not have done that during the huge down turn, I did manage to go into that downturn with some stocks that had already started their falls.
Monday, June 14, 2010
BP's Fall; other Big Oil plays
Shares of BP are down nearly 50% YTD mostly due to the Deepwater Horizon disaster. Some of their European competitors Shell (RDS.A) and Total (TOT) are also down 12% and 24% respectively. Comparatively XOM is down just 9% and CVX just 2.5%.
The uncertainty in the European Union and Euro currency is eclipsed by the uncertainty in the oil industry itself for these stocks. Clearly the European oil companies are feeling the effect of uncertainty in both areas. For a long-term investor, I believe this creates opportunity.
Certainly if you were holding BP and managed to sell on the frontend of their 50% slide (I am still holding large amounts of BP), now might not be a bad time to put that money back into the Oil & Gas sector. There are some very attractive choices right now.
I have added shares of Total (TOT). I believe their price drop has been exaggerated, even given the Euro issues. In this sector a strong dividend is a must for me, and Total does not disappoint with a +6% dividend. Over the last month, Total has preformed better than the rest of the oil majors.
A note about industry regulation. Given the possibility of heavy regulation, and lifting of liability caps, I do not think it would be wise to invest in oil companies that have a smaller market cap. Limited operating cash and overall size would likely hurt their ability to be competitive in a highly regulated, and high liability industry. For now I will stick to only the oil majors.
The uncertainty in the European Union and Euro currency is eclipsed by the uncertainty in the oil industry itself for these stocks. Clearly the European oil companies are feeling the effect of uncertainty in both areas. For a long-term investor, I believe this creates opportunity.
Certainly if you were holding BP and managed to sell on the frontend of their 50% slide (I am still holding large amounts of BP), now might not be a bad time to put that money back into the Oil & Gas sector. There are some very attractive choices right now.
I have added shares of Total (TOT). I believe their price drop has been exaggerated, even given the Euro issues. In this sector a strong dividend is a must for me, and Total does not disappoint with a +6% dividend. Over the last month, Total has preformed better than the rest of the oil majors.
A note about industry regulation. Given the possibility of heavy regulation, and lifting of liability caps, I do not think it would be wise to invest in oil companies that have a smaller market cap. Limited operating cash and overall size would likely hurt their ability to be competitive in a highly regulated, and high liability industry. For now I will stick to only the oil majors.
Options Play on Oil
Using the ETF for US Oil futures (USO) I have been able to play the oil market, and it was quite profitable for me in 2009. While I do not fundamentally agree with the idea of an "oil" ETF, as I have no plans to take delivery of any barrels of oil, it does offer a nice opportunity.
Last week I saw that USO was trading at around $34, for me a price point below $35 is always attractive.
I then looked into the options market to see what calls were selling for. I was able to sell October calls with a $36 strike for $2.25. This represented a 6.5% premium on my $34.20 buy price. Additionally I would get $1.80 of principle gain (another 5.2%). I decided 11.7% was an attractive options play for me in this 5-month window, especially with 6.5% up front.
Throughout 2009 I was able to used covered calls to earn premium up-front while holding USO. I found that by earning this premium I was able to more than cover the contango that exists in a futures based ETF. I hope to do the same thing again with this play.
Last week I saw that USO was trading at around $34, for me a price point below $35 is always attractive.
I then looked into the options market to see what calls were selling for. I was able to sell October calls with a $36 strike for $2.25. This represented a 6.5% premium on my $34.20 buy price. Additionally I would get $1.80 of principle gain (another 5.2%). I decided 11.7% was an attractive options play for me in this 5-month window, especially with 6.5% up front.
Throughout 2009 I was able to used covered calls to earn premium up-front while holding USO. I found that by earning this premium I was able to more than cover the contango that exists in a futures based ETF. I hope to do the same thing again with this play.
Thursday, April 29, 2010
Explosion and sinking of Deep Water Horizon Rig
The explosion, sinking, and leaking from a Transocean owned and operated oil rig in the Gulf of Mexico will have lasting impact. The Transocean rig, called the Deep Water Horizon, was drilling in a BP GOM (Gulf of Mexico) oil field when it experienced some sort of catastrophic failure during a likely blow-out. At this point it is fairly apparent that at least 11 people lost their life in this tragedy, I don't want that point lost on anyone while I discuss financial implications.
I currently own BP, which is in what appears to be a very strong downward movement. As I have recommended it over and over again in this blog, I feel the need to tell anyone owning this stock for the short-term to sell. I also want to cation long-term holders that there is a large potential for loss on this stock too. Anyone holding Transocean (RIG) should sell now.
Internal to the industry it is well known that Transocean was operating the Horizon rig when the incident occurred, however the company is not a household name and the field is owned by BP. Most people know of the company BP. In the court of public opinion the aftermath of this explosion, a giant oil leak in the GOM, is a BP problem. Indeed BP has jumped to action quickly to try to contain this leak, in fact they acknowledge that they are spending over $6M a day trying to contain the leak.
I am not sure how the legal part of this will play out, and I'm not sure who is legally responsible for this incident. However I do know that both companies will suffer tremendously from this incident. I do not expect that this is the kind of thing either of these two companies will be able to recover from this year. If I still owned RIG (which I do not) I would certainly sell now, I suspect that many lawsuits will be filed against them. As I do own BP, I am still trying to evaluate what this will mean for a long-term investor like me. If I was a short-term investor with BP stock I would sell immediately.
The potential environmental impact of this is hard to fathom, and it hurts me to think about the irrefutable impact this will have. Whether or not you consider yourself to be "green" or not, this impact will be devastating, and should make you stop to think about the impact we are having on this planet. It is a hypocrisy I face every time I invest in this industry.
I currently own BP, which is in what appears to be a very strong downward movement. As I have recommended it over and over again in this blog, I feel the need to tell anyone owning this stock for the short-term to sell. I also want to cation long-term holders that there is a large potential for loss on this stock too. Anyone holding Transocean (RIG) should sell now.
Internal to the industry it is well known that Transocean was operating the Horizon rig when the incident occurred, however the company is not a household name and the field is owned by BP. Most people know of the company BP. In the court of public opinion the aftermath of this explosion, a giant oil leak in the GOM, is a BP problem. Indeed BP has jumped to action quickly to try to contain this leak, in fact they acknowledge that they are spending over $6M a day trying to contain the leak.
I am not sure how the legal part of this will play out, and I'm not sure who is legally responsible for this incident. However I do know that both companies will suffer tremendously from this incident. I do not expect that this is the kind of thing either of these two companies will be able to recover from this year. If I still owned RIG (which I do not) I would certainly sell now, I suspect that many lawsuits will be filed against them. As I do own BP, I am still trying to evaluate what this will mean for a long-term investor like me. If I was a short-term investor with BP stock I would sell immediately.
The potential environmental impact of this is hard to fathom, and it hurts me to think about the irrefutable impact this will have. Whether or not you consider yourself to be "green" or not, this impact will be devastating, and should make you stop to think about the impact we are having on this planet. It is a hypocrisy I face every time I invest in this industry.
Friday, April 23, 2010
Options 101
Options 101 - High Premium (up front money)
Some of the best options premiums in the market right now seem to be Hecla Mining Company (HL). I have been buying and selling covered calls on HL for the last +12-months.
Here is an example of buying the stock today at market, and selling a covered call at market:
If you buy HL today at $5.88 and sell options with $6 strike in June (57 days) for $0.42, you will make 7% today. If the stock hits the strike price of $6 and the option is actioned you will make an additional 2% profit on the stock.
Some of the best options premiums in the market right now seem to be Hecla Mining Company (HL). I have been buying and selling covered calls on HL for the last +12-months.
Here is an example of buying the stock today at market, and selling a covered call at market:
If you buy HL today at $5.88 and sell options with $6 strike in June (57 days) for $0.42, you will make 7% today. If the stock hits the strike price of $6 and the option is actioned you will make an additional 2% profit on the stock.
Drugs, Banks, and Miners
Earlier this week I pulled the trigger on a couple of stocks that I have been eying for quite a while. I have very little exposure to the health-care sector, and have wanted to broaden that exposure. After looking at several drug makers, I settled on Eli Lilly (LLY). Year to date LLY is ahead of both Pfizer (PFE) and Bristol Myers Squibb (BMY). Its also ahead of Merk (MRK) and GlaxoSmithKline (GSK). When expanded out to a 1-yr chart, you see it is the lagger of the group, behind all four of the others.
I bought LLY based on two points, first the ~5.5% dividend, and second the fact that LLY has the lowest P/E ratio of the bunch. I think this means that the stock should pull back in with the other four. I think this is the reason that it is the strongest year to date, and I think that trend will continue. Since I bought LLY at the beginning of the week I am down 4.2%, which is about middle of the pack for the Pharma stocks in this off week. Time will tell if LLY is a lagger dog, or swinging back into the pack.
Worse than my timing on Eli Lilly was my timing on Banco Santander (STD). The Spanish bank is down 5.3% since I bought it. This was a play on several fronts; Brazil, where Banco Santander is a big player. The banking industry in general, which is coming out of a severe down cycle. Europe, which has been hit very hard by monetary problems in the Euro Zone (problems that are far from over by the way). And finally a sizable dividend, which is important because I expect this stock to have lots of pull backs on a very long very slow climb back to its 2007 levels. From 2005 - 2007 STD paid over 3% dividend annually while climbing from $11.75 a share to over $20 a share. I hope to see a move from today's levels (~$13.40) back to the +$15 a share by years end. If the recovery is slower than I expect I will count on the nearly 9% dividend STD pays to pad my time commitment.
Last on my list of buys at the beginning of the week was my purchase of Vale (VALE), the Brazilian based mining company. I was debating between Vale or BHP Billiton (BHP). BHP pays a dividend while VALE does not. Year to date VALE is up +11% while BHP is only even. Expanded out for a 1-yr chart you can see BHP up +47% compared to VALE +75%. Vale earns less per share than BHP, has a higher P/E ratio than BHP, and pays no dividend. BHP may be the logical safer play here, but Brazil is an extremely fast growing economy and Vale is reaping those rewards.
I bought LLY based on two points, first the ~5.5% dividend, and second the fact that LLY has the lowest P/E ratio of the bunch. I think this means that the stock should pull back in with the other four. I think this is the reason that it is the strongest year to date, and I think that trend will continue. Since I bought LLY at the beginning of the week I am down 4.2%, which is about middle of the pack for the Pharma stocks in this off week. Time will tell if LLY is a lagger dog, or swinging back into the pack.
Worse than my timing on Eli Lilly was my timing on Banco Santander (STD). The Spanish bank is down 5.3% since I bought it. This was a play on several fronts; Brazil, where Banco Santander is a big player. The banking industry in general, which is coming out of a severe down cycle. Europe, which has been hit very hard by monetary problems in the Euro Zone (problems that are far from over by the way). And finally a sizable dividend, which is important because I expect this stock to have lots of pull backs on a very long very slow climb back to its 2007 levels. From 2005 - 2007 STD paid over 3% dividend annually while climbing from $11.75 a share to over $20 a share. I hope to see a move from today's levels (~$13.40) back to the +$15 a share by years end. If the recovery is slower than I expect I will count on the nearly 9% dividend STD pays to pad my time commitment.
Last on my list of buys at the beginning of the week was my purchase of Vale (VALE), the Brazilian based mining company. I was debating between Vale or BHP Billiton (BHP). BHP pays a dividend while VALE does not. Year to date VALE is up +11% while BHP is only even. Expanded out for a 1-yr chart you can see BHP up +47% compared to VALE +75%. Vale earns less per share than BHP, has a higher P/E ratio than BHP, and pays no dividend. BHP may be the logical safer play here, but Brazil is an extremely fast growing economy and Vale is reaping those rewards.
Tuesday, March 23, 2010
Stock Appreciation
It has been a while since I looked at pure stock plays. Here are my best picks for strait stock appreciation.
General Electric (GE)
I have been a long-term holder of GE, and although my initial buy price of $35 is a long way off, I still believe in this stock. To be certain this is not a short-term play, even though some analysts are picking it for just that. Over the next two to three years I expect the stock to regain its old position. Furthermore I would expect to see the dividend grow during that time too.
Google (GOOG)
Google is down about 5% since the topic of leaving China become a hot-button issue. I have long loved Google and all their products (this blog is on Blogger.com, which is owned by Google). The stock price appears prohibitively high as an entry point, but I think you must look past that. A few shares of Google would be a good idea, many analysts are still pegging this as a $700 stock.
Central European Distribution Corp (CEDC)
I have been a long-term holder of CEDC for quite a while now, long enough to remember it at $75 a share. I was so confident in this stock and the company that I added to it when I was down and out on my initial holding. This has paid off well, I am currently up over 40% and have no plans to sell. I expect to see this stock in the $40's by summer and maybe $50 by the end of the year. (currently at about $35 a share).
Caterpillar Inc. (CAT)
Caterpillar is a cyclical company, the recovery of the global economy should benefit them tremendously. This once $85 stock will likely be a ways off from those highs, but I suspect it can blow through $70 this year. (Currently at about $60).
I should add Ford (F) for all the reasons I have listed in the past. Also missing on this list are bank stocks, because I am playing them with preferred stock. I would add HSBC (HBC) and Bank of America (BAC) if I was looking for strait stock appreciation. If you want a play on Nat-Gas look to Chesapeake Energy (CHK). McDonald's Corporation (MCD) could be a play on a slower than anticipated recovery, or a "double-dip",
General Electric (GE)
I have been a long-term holder of GE, and although my initial buy price of $35 is a long way off, I still believe in this stock. To be certain this is not a short-term play, even though some analysts are picking it for just that. Over the next two to three years I expect the stock to regain its old position. Furthermore I would expect to see the dividend grow during that time too.
Google (GOOG)
Google is down about 5% since the topic of leaving China become a hot-button issue. I have long loved Google and all their products (this blog is on Blogger.com, which is owned by Google). The stock price appears prohibitively high as an entry point, but I think you must look past that. A few shares of Google would be a good idea, many analysts are still pegging this as a $700 stock.
Central European Distribution Corp (CEDC)
I have been a long-term holder of CEDC for quite a while now, long enough to remember it at $75 a share. I was so confident in this stock and the company that I added to it when I was down and out on my initial holding. This has paid off well, I am currently up over 40% and have no plans to sell. I expect to see this stock in the $40's by summer and maybe $50 by the end of the year. (currently at about $35 a share).
Caterpillar Inc. (CAT)
Caterpillar is a cyclical company, the recovery of the global economy should benefit them tremendously. This once $85 stock will likely be a ways off from those highs, but I suspect it can blow through $70 this year. (Currently at about $60).
I should add Ford (F) for all the reasons I have listed in the past. Also missing on this list are bank stocks, because I am playing them with preferred stock. I would add HSBC (HBC) and Bank of America (BAC) if I was looking for strait stock appreciation. If you want a play on Nat-Gas look to Chesapeake Energy (CHK). McDonald's Corporation (MCD) could be a play on a slower than anticipated recovery, or a "double-dip",
Thursday, March 11, 2010
Dividends
Dividends, dividends, and more dividends
With the continuing uncertainty in the global economy, and thus the stock markets, its been hard to commit to individual stocks. Furthermore, all the analysts say the index's have had their run and you need to find individual winners in 2010.
What's a part-time investor to do?
If you look at some of the stocks with the most stable charts, you may notice they also have nice dividends…. Dividend investing is back, more people are in for the long-haul. More people are looking for steady income streams. More people are content to take a 3% - 4% dividend than to chase after a 20% stock return.
The reason is simple, the banks are paying below 1%, the treasuries are at 0, and corporate bonds don’t feel so safe these days.
Where does this leave income investors, just dividend stocks. Where do people looking to put a little 'skin in play' go to beat the rates at the bank….
A stock like MO has been +4% for the year and relatively stable. The DOW is pretty much even for the year. MCD is a relatively flat +2% for the year, plus the first dividend payment from its nearly 4% yield. Even a stock like GE, which has suffered an enormous beat-down is up 6.5% for the year and has a 2.4% yield. In fact you have to look hard for a stock with a decent yield that has been down this year (oil stocks for example -5% for BP).
Further to this theme, if you are looking for bank stocks (which have been beat-down) then you can explore the preferred share market. I have found some preferred stocks yielding well over 7%. For example Bank of America BML-Q with and 8.65% note. ING bank has IGK which is an 8.5% note. Both BML-Q and IGK are selling below the call price of $25, so in effect the payouts are higher. Be cautious in that the dividends can be suspended. (BML-Q just paid out its dividend last week). If the banks don't do it for you, you could look at Ford's F-A with a 7.5% note. F-A is also trading below its call price of $25.
Whether you get yield from a strait stock play, or you seek bigger yields from the preferred market, you can quickly see these numbers pile up in your favor over the long-term.
With the continuing uncertainty in the global economy, and thus the stock markets, its been hard to commit to individual stocks. Furthermore, all the analysts say the index's have had their run and you need to find individual winners in 2010.
What's a part-time investor to do?
If you look at some of the stocks with the most stable charts, you may notice they also have nice dividends…. Dividend investing is back, more people are in for the long-haul. More people are looking for steady income streams. More people are content to take a 3% - 4% dividend than to chase after a 20% stock return.
The reason is simple, the banks are paying below 1%, the treasuries are at 0, and corporate bonds don’t feel so safe these days.
Where does this leave income investors, just dividend stocks. Where do people looking to put a little 'skin in play' go to beat the rates at the bank….
A stock like MO has been +4% for the year and relatively stable. The DOW is pretty much even for the year. MCD is a relatively flat +2% for the year, plus the first dividend payment from its nearly 4% yield. Even a stock like GE, which has suffered an enormous beat-down is up 6.5% for the year and has a 2.4% yield. In fact you have to look hard for a stock with a decent yield that has been down this year (oil stocks for example -5% for BP).
Further to this theme, if you are looking for bank stocks (which have been beat-down) then you can explore the preferred share market. I have found some preferred stocks yielding well over 7%. For example Bank of America BML-Q with and 8.65% note. ING bank has IGK which is an 8.5% note. Both BML-Q and IGK are selling below the call price of $25, so in effect the payouts are higher. Be cautious in that the dividends can be suspended. (BML-Q just paid out its dividend last week). If the banks don't do it for you, you could look at Ford's F-A with a 7.5% note. F-A is also trading below its call price of $25.
Whether you get yield from a strait stock play, or you seek bigger yields from the preferred market, you can quickly see these numbers pile up in your favor over the long-term.
Friday, January 22, 2010
Preferred ETF's
In December I made a post about my "Venturing into preferred stock". Since that purchase of F-A I have also picked up BML-Q (an 8.6% note from Bank of America). The main difficulty with these preferreds is that you would have to buy a wide variety to spread your risk. Risks that exist from suspended payments, and underlying stock value (mainly).
The preferred market are largely based in financial institutions and real-estate , so their is inherent risk should the financial's and real-estate markets continue to have turmoil. 2009 was a particularly good year for the recovery of many bank stocks, and even some REIT's... This is reflected in the returns of the S&P U.S. Preferred Stock Index.
There is an ETF that tracks the S&P U.S. Preferred Stock Index (PFF) and one that tracks the Wachovia Hybrid & Preferred Securities Financial Index (PGX)
PFF - iShares S&P U.S. Preferred Stock Index Fund
PGX - PowerShares Financial Preferred Portfolio
For 2009 PFF returned 31.68% plus an 8.58% dividend, while PGX returned 23.75% plus a 9.06% dividend. I consider both of these to be good options for some fixed income with a much higher return than standard bind funds, albeit with higher risk too.
The preferred market are largely based in financial institutions and real-estate , so their is inherent risk should the financial's and real-estate markets continue to have turmoil. 2009 was a particularly good year for the recovery of many bank stocks, and even some REIT's... This is reflected in the returns of the S&P U.S. Preferred Stock Index.
There is an ETF that tracks the S&P U.S. Preferred Stock Index (PFF) and one that tracks the Wachovia Hybrid & Preferred Securities Financial Index (PGX)
PFF - iShares S&P U.S. Preferred Stock Index Fund
PGX - PowerShares Financial Preferred Portfolio
For 2009 PFF returned 31.68% plus an 8.58% dividend, while PGX returned 23.75% plus a 9.06% dividend. I consider both of these to be good options for some fixed income with a much higher return than standard bind funds, albeit with higher risk too.
Fund Analysis
Every year, after the previous years results are posted for mutual funds, I do some research to validate which funds I should be in. Sometimes I find that I am quite happy were I am, other times not so much.
A good example is the Fidelity Latin America Fund (FLATX), which had an eye-popping 94% return last year.... "Great!!" I say with pleasure... until I see that it lagged a common competitor by over 20%... The T. Rowe Price Latin America Fund returned over 115% last year...
This is just one example of why I do these checks... Granted the Fidelity fund is in my 401k program and the T. Rowe Price is not... But I have access via an account called "Brokerage Link" within my 401k to buy whatever I like... The hassle is worth it for 20% better return... Moreover on a 10yr annualized return I see it is about 4%, year after year...
Here is some of what I found:
T. Rowe Price Latin America - Just look at the returns... need I say more: 115% 1yr // 29.6% 5yr/an // 18.5% 10yr/an
T. Rowe Price Health Sciences - Better 3yr, 5yr, & 10yr returns than many competitors
Fidelity Emerging Markets K - new fund that timed the markets pretty well to return 89% in 2009
Fidelity New Markets Income - Dividend of 6.99%, market conditions had a lot to do with that, but see the outstanding 10yr annualized return of 12.55%
Oakmark Equity and Income I - Probably the best conservative balanced fund in the market, number 1 in sector for 10yr return at nearly 10% annualized.
Janus Balanced - Always lags in up markets, but smokes all competitors in down markets... Check the 7% advantage in 3yr return vs. Fidelity and others.
Fidelity Select Technology - If technology is going to lead the recovery, this is a good fund to own. It was ranked 6th in category last year with a monster 91% return
Allianz NFJ Small Cap Value Instl - A 12% annualized 10yr return ranks this 5-star fund it 7th in category.
T. Rowe Price New Era - My favorite energy sector fund, returned 57% last year, and is at 11.5% for 10yr annualized
Templeton Global Bond Fund Advisor Class - 4.5% dividend and over 19% return last year did not get it in the top ten for category, but it is number 1 in 10yr with 10.93% annually.
PIMCO Total Return Instl - Number 3 in category for 10yr paid out a 5.44% dividend last year with 12.4% return.
A good example is the Fidelity Latin America Fund (FLATX), which had an eye-popping 94% return last year.... "Great!!" I say with pleasure... until I see that it lagged a common competitor by over 20%... The T. Rowe Price Latin America Fund returned over 115% last year...
This is just one example of why I do these checks... Granted the Fidelity fund is in my 401k program and the T. Rowe Price is not... But I have access via an account called "Brokerage Link" within my 401k to buy whatever I like... The hassle is worth it for 20% better return... Moreover on a 10yr annualized return I see it is about 4%, year after year...
Here is some of what I found:
T. Rowe Price Latin America - Just look at the returns... need I say more: 115% 1yr // 29.6% 5yr/an // 18.5% 10yr/an
T. Rowe Price Health Sciences - Better 3yr, 5yr, & 10yr returns than many competitors
Fidelity Emerging Markets K - new fund that timed the markets pretty well to return 89% in 2009
Fidelity New Markets Income - Dividend of 6.99%, market conditions had a lot to do with that, but see the outstanding 10yr annualized return of 12.55%
Oakmark Equity and Income I - Probably the best conservative balanced fund in the market, number 1 in sector for 10yr return at nearly 10% annualized.
Janus Balanced - Always lags in up markets, but smokes all competitors in down markets... Check the 7% advantage in 3yr return vs. Fidelity and others.
Fidelity Select Technology - If technology is going to lead the recovery, this is a good fund to own. It was ranked 6th in category last year with a monster 91% return
Allianz NFJ Small Cap Value Instl - A 12% annualized 10yr return ranks this 5-star fund it 7th in category.
T. Rowe Price New Era - My favorite energy sector fund, returned 57% last year, and is at 11.5% for 10yr annualized
Templeton Global Bond Fund Advisor Class - 4.5% dividend and over 19% return last year did not get it in the top ten for category, but it is number 1 in 10yr with 10.93% annually.
PIMCO Total Return Instl - Number 3 in category for 10yr paid out a 5.44% dividend last year with 12.4% return.
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