The stock market is in turmoil today and the reasons can be found elsewhere (including in some peoples' imaginations). But if you are a bottom line investor, then here is where you should be looking. Food and energy exploration are the places to be.
Things can change rapidly, but as of right now food related stocks like Bunge Ltd. (NYSE: BG), the largest company involved with soy based products, and Potash Corp. of Saskatchewan (NYSE: POT), the largest fertilizer company, are up.
In the exploration sector, Anadarko Petroleum (NYSE: APC), the oil, gas and exploration company, Loews Corporation (NYSE: LTR), which is the majority shareholder in Diamond Offshore Drilling and is separating from its tobacco interests, and Precision Drilling TR (NYSE: PDS), the Canadian contract driller that is expanding into the lower 48 states, are all up.
All five stocks have out performed the market this year and that trend does not seem to be in jeopardy yet.
I will update this post with final results after the market close to see how the story ends.
UPDATE: four of the five closed in positive territory when all the major indices were in the red.
APC finished down to $77.69,-0.54 (-0.69%)
BG finished up to $122.40, +0.47 (+0.39%)
LTR finished up to $48.95, +0.45 (+0.93%)
PDS finished up to $26.95, +0.49 (+1.85%)
POT finished up to $223.10 +2.54 (+1.15%)
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of APC and PDS.
Today was a very gloomy day in the stock market with Oil reaching new highs and everything else losing -- almost. Among the few winners, and I mean very few, Apple Inc. (NASDAQ: AAPL), oil, and specialty steel were up. I went through my watch list and found this very short list of winners:
MOST NOTEWORTHY: Progressive, Netflix and Public Service Enterprise Group were today's noteworthy upgrades:
Wachovia upgraded Progressive (NYSE: PGR) to Market Perform from Underperform based on modest signs of improvement in underwriting trends.
Lehman upgraded Netflix (NASDAQ: NFLX) to Overweight from Equal Weight based on strong core trends and a potential announcement of digital service partners into its May 28 investor day.
Credit Suisse upgraded Public Service Enterprise Group (NYSE: PEG) to Outperform from Neutral based on earnings growth through utility investment, valuation, upside from U.S. CO2 policy.
OTHER UPGRADES:
Precision Drilling (NYSE: PDS) was raised to Outperform from Sector Perform at RBC Capital.
Hertz Global (NYSE: HTZ) was upgraded at Soleil to Buy from Hold.
Calyon upgraded Foundation Coal (NYSE: FCL) and Arch Coal (ACI) to Add from Neutral.
Do you have a good financial advisor? They are hard to come by, from my experience. If you are in business you probably get somebody fresh out of business school (if that) calling at least every other day. I am very cynical about the entire financial industry and think that much of what passes for good professional advice is neither good nor professional. I harped on this a little yesterday in Sunday Funnies: Analysts must have a great sense of humor.
If one were to measure many of our foremost fianancial institutions by how well they manage their own affairs, then most of them would come up wanting. The investment banks, ratings agencies, mortgage banks and even the federal watchdogs have made a poor showing over the past year and we are all paying for it.
Recently I made the acquaintance of a Michael G., who is a broker with a major financial institution that is advising a good friend of mine and seems to contradict my generally negative opinion of the industry. He was the seed that grew into my Precision Drilling Services TR (NYSE: PDS) recommendation and last month I was happy to post Chasing Value: PDS up 75% in Q1, announces distribution.
In my conversation with Mike, Seaspan Corp (NYSE: SSW) was his latest intrigue. According to AOL Money & Finance data, Seaspan maintains a fleet of about 30 vessels. Its charter operations are managed by sister company Seaspan Management Services Limited. Both companies are a part of The Washington Marine Group, a group of companies that focus on marine transportation and ship building.
It was only a few weeks ago I was thinking, how much higher can this one go but sure enough, Precision Drilling Services TR (NYSE: PDS), the Canadian Trust went higher. In my last report, PDS announced its monthly dividend distribution. The current yield is 5.6% down from the 10% range it was paying when I first recommended it, but still a good return.
Today PDS closed at $28.04, a new 52-week high, now 81.24% above the $15.47 it was five months ago. During the trading day it touched on $28.12.
Last month Precision reported a 33% loss and still the share price is moving up. This supports all the reports that keep popping up regarding the price differential between natural gas and oil suggesting the the NG prices are going up and that drilling companies like PDS will be swamped. Although PDS has had a rough trailing 12 months, creating the buying opportunity, the stock price is clearly being lifted by anticipation of a bright future.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of PDS.
It should not come as a surprise to many that as crude oil pushed $120 per barrel and gas prices passed $4 a gallon at the pump Anadarko Petroleum (NYSE: APC) reached a new 52 week high of $71.12 and finished Tuesday at $70.07. The stock is up over 75% (not including the dividend) since I recommended it last year.
At the time I disclosed that I acquired the stock at $40 and suggested this was a keeper. I like the fact that the company has a substantial amount of its proven oil and natural gas reserves in North America. It also pays a modest dividend 0.52% while sporting a P/E under 9 (TTM). When last I posted on the subject -- Serious Money: great picks: Aluminum Co. of China & Anadarko -- about ten weeks ago, APC was trading at $55, down from its previous high, though still returning a nice gain. That was the time to buy on the dip if you were watching it.
The current dividend yield of 5.8% remains very generous and far above most other stocks in the sector. After some of my high dividend stock recommendations either under performed or simply cut their distribution, it is reassuring to see that PDS not only is maintaining its dividend, but in this particular case continues to pay out monthly, allowing for better compounding of the yield.
The stock closed today at $27.15, up 75.5% from $15.47 when I recommended the stock three months ago. If you got into the stock back then you would still be receiving over a 10% yield. Last year I had several high flyers but not all of them stayed up so I am watching Precision closely for signs of weakness or changes in the business.
It has been a difficult year to find stocks that have done well in the market. To find a stock that has had staggering returns has been even rarer. I know because I've had a few disasters like Bear Stearns (NYSE: BSC), which will soon be folded up into JP Morgan Chase (NYSE: JPM), and is only one among many financial nightmares.
A while back I reported in Chasing Value: Precision Drilling up 46% since December that one of my picks was having an amazing year. The first quarter is behind us and the dream continues. Precision Drilling Services TR (NYSE: PDS), continues to rise while it is drilling down, increasing from $15.47 when I originally reviewed it to last night's close at $24.75.
This 60% jump is on top of the 10% dividend yield, which by itself is quite satisfactory. From the many people that follow my rants and raves, I sometimes get suggestions or questions that lead me in a certain direction. I have to share credit with a good friend of mine, Joe G., for shining a light on Precision Drilling. He was right that it was worth a look and of course I shared my findings with everyone when I recommended the stock three months ago.
The Dow Jones Industrial Average is down about 150 points as I peck away on my laptop. I was looking to see what stocks were holding up on a down day, and sure enough one of my favorites showed up -- Precision Drilling Services TR (NYSE: PDS), a stock I recommended two months ago.
I apologize if I seem like a cheerleader, or a play-by-play announcer, but it was only two weeks ago that I posted on what were already strong gains, and this one keeps going up (even though its business is to drill down...).From my original December recommendation at $15.47 per share, PDS has moved up to $22.61 by midday today and climbing, for a 46% gain. This is when the Dow industrials are down almost 7%.
It's foolish to get too excited about short term success unless you are a rapid fire trader. However, the first six weeks of 2008 have been dismal, so any success is a sigh of relief. I enjoy writing for BloggingStocks, in part because of the dialogue it allows, making it a good sounding board for things I am considering in my investment world.
In December, Canada's largest drilling contractor with a fleet of 240 service rigs was $15.47 per share, but last Friday it closed at $19.12, for a nice bounce of 24%. This when the market is down over 8% and almost nothing is looking very promising. When I first called PDS to readers' attention, it had a price to earnings ratio (P/E) near 5 and a dividend yield over 10%. The stock's appreciation has raised the P/E to 6.26 and the yield declined to 7.9% -- still very generous.
I have no crystal ball so predictions are hard to come by, but a closer look at PDS is worth while and you might like what you see. Of course comments are welcome.
Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. Disclosure: I do own shares of PDS.
The stock market is in turmoil today and the reasons can be found elsewhere (including in some peoples' imaginations). But if you are a bottom line investor, then here is where you should be looking. Food and energy exploration are the places to be.
Today was a very gloomy day in the stock market with Oil reaching new highs and everything else losing -- almost. Among the few winners, and I mean very few,
.gif){kind=logo}
It was only a few weeks ago I was thinking, how much higher can this one go but sure enough, 
The Dow Jones Industrial Average is down about 150 points as I peck away on my laptop. I was looking to see what stocks were holding up on a down day, and sure enough one of my favorites showed up -- 
Closing Bell: Dow stages comeback as bulls battle bears
Investor confidence in global growth continues to decline
Can Jerry Seinfeld improve Microsoft's brand equity?
