"Any further market weakness creates creates another opportunity to acquire some outstanding stocks," suggests Kelley Wright, noted for his focus on blue chip, dividend-paying stocks.
In his Investment Quality Trends newsletter, he looks at the benefits of keeping a long-term focus, the value of dividend districutions to an investor's long-term returns, and his current "timely ten" picks for conservative investor.
"The cash dividend for the Dow is $322.40. One year ago the dividend was $284.06. Amidst all the turmoil in the markets and the economy something must be going right with the Dow 30 companies because the dividend is ever climbing.
"Dividends, as we all know, can only come from the reality of earnings; you can't pay what you don't have. The dividend yield on the Dow is currently 2.66%, which represents an 11% downside to a 3.0% yield and the historically repetitive area of Undervalue.
"Will the Average make it down to that level? No one knows but that isn't the point. At current levels the upside is FAR greater, particularly in many of the stocks in our Undervalued area.
"In our search for stocks that can not only grow in good times, but will also hold up well when the going gets rough, we find ADP. Its steady cash generation means the company has a number of options at its disposal when it comes to maximizing shareholder value.
"ADP offers services including payroll processing, human resource benefits administration products and other outsourcing services. The stock's P/E, using expected year-ahead earnings, doesn't seem so cheap at 18. But relative to the company's long-term growth rate, it's quite reasonable. In fact, the stock is trading at its lowest valuations in more than a decade.
"And ADP's balance sheet has never been stronger. Management's confidence in the company's future recently prompted them to up the stock's payout by 26%. We see good things ahead for ADP as well.
"ADP has demonstrated a record of maximizing shareholder value. For instance, the company has a history of using part of its cash flow generation to repurchase its own stock. In the first quarter the company repurchased approximately 5.8 million shares, and it's likely to continue to buy back shares in the future."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Non-farm private employment decreased 79,000 in June on a seasonally adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (pdf)
Meanwhile, the May estimated change in employment was revised down 15,000 to a gain of 25,000 jobs, ADP said.
In the June jobs report, employment in the service-providing sector fell 3,000, its first declined since November 2002. The goods-producing sector declined 76,000, and manufacturing employment fell 44,000, their 19th and 22nd consecutive monthly declines, respectively.
Employment among small-size businesses, defined as those with fewer than 50 workers, rose just 7,000 during the month, while employment at large businesses with more than 500 workers declined 51,000. Jobs at medium sized business, with 50-499 employees, decreased 35,000.
For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
Obama is being shaped by the pressures of running for office and to believe otherwise is delusional. I suppose one has to have hope but the effects of the campaign are becoming clear. Obama has been painting McCain as an extension of Bush, which is nonsense, and now in a typical tit-for-tat response, McCain is filling the air with Carter references.
Both McCain and Obama are wrong in their assessments of their opponents and they are becoming commoners to resort to the bottom of the barrel campaign techniques used in every campaign for most of our nation's proud history. Obama gave up the high ground too easily and McCain has decided he can sling mud with the best of them.
Non-farm, private employment increased by 40,000 in May on a seasonally-adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (pdf)
Meanwhile, the April 2008 estimated change in employment was revised up 3,000 to a gain of 13,000 jobs, ADP (NYSE: ADP) said.
The service sector of the economy added 77,000 jobs, while employment in the goods-producing sector declined 37,000 - - its 18th consecutive monthly decline.
Most of the decline in employment during May was accounted for by job losses at large companies, which registered an 18,000-job decline. Meanwhile, small businesses added 61,000 jobs and medium-sized business cut 3,000 jobs.
Conditions in two economic sectors hard hit by the slumping housing sector - - construction and financial activities - - continued to deteriorate. Construction employment fell 13,000 - - its 18th consecutive monthly decline - - bringing the total decline in construction jobs since the peak in August 2006 to 298,000. Employment in financial activities declined 5,000, its third straight monthly decline.
Economic Analysis: In general, a surprisingly upbeat ADP job report. The 40,000 job gain wasn't nearly enough to keep unemployment from rising, but at least it wasn't a decline. However, economists caution that one should not read too much into the monthly ADP job report, due to its limited scope (private sector payrolls). The more-telling indicator is the U.S. Labor Department's monthly payroll statistic, and May 2008's data will be released Friday at 8:30 a.m. EDT. That report is expected to show a 60,000-job decline, according to a Bloomberg News survey of economists.
Today started out as one of those positive days again as the investment climate appeared to be getting better. Then the unemployment data came out, and frankly it wasn't really as bad as one would expect. But shortly after 10:00 AM, we saw profit takers come into the market. In fact, even oil traders ran oil up after shorts covered after a good week of selling Texas Tea; oil closed up $3.82 at $116.34.
Below are the unofficial closing levels for major US index levels:
DJIA 13,051.36 (+41.36; +0.32%)
S&P500 1,413.96 (+4.62; +0.33%)
NASDAQ 2,476.14 (-4.57; -0.18%)
10YR-TBond 3.845% (+0.096)
Agrium Inc. (NYSE: AGU) was a winner with shares up almost 5% at $82.25 in the last minutes of the day. The agricultural nutrients supplier beat earnings, and this gave some pause to the selling in the potash and fertilizer stock selling that had been seen this week.
Non-farm private employment increased 10,000 in April 2008 on a seasonally adjusted basis, Automatic Data Processing announced Wednesday in the ADP National Employment Report (pdf).
Meanwhile, the March 2008 estimated change in employment was revised down 5,000 to a gain of 3,000 jobs, ADP said.
In the April 2008 job report, employment in the service sector grew 64,000, while the goods-producing sector declined 54,000, its 17th consecutive monthly decline. Manufacturing employment fell 26,000 in April 2008, its 20th consecutive monthly decline.
Economist Peter Dawson called the April 2008 report "a qualified, very modest, positive surprise. At least it wasn't negative."
Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause.
There are many possible outcomes for this meeting, as we have seen a substantial change in investor sentiment regarding the potential need for further rate cuts. The buzz on the street is for a cut of 25 basis points and then a wait-and-see attitude from there. I think that is the most likely direction.
There has been a great deal of concern that all the recent rate cuts have not provided the benefit to consumers the economy needs. Clearly, there is a fatty clog within our financial circulatory system. Traditionally, the Fed likes to see how its actions trickle into the economy before it continues too far down one path, which would argue for a pause now. Plus, the Fed does not want to run out of ammunition by cutting rates too far too fast. But there is no question that we are dealing with a more aggressive Fed than we have seen in decades, so I think we will see another small rate cut.
Non-farm U.S. private employment increased just 8,000 in March 2008 (pdf) on a seasonally adjusted basis, ADP announced Wednesday. Meanwhile, the February 2008 estimated change in employment was revised up 5,000 to a loss of 18,000 jobs, ADP said.
Unlike February 2008, the March 2008 employment weakness was concentrated among larger businesses in the goods-producing sector.
The service sector of the economy added 85,000 jobs, while employment in the goods-producing sector declined 77,000 -- its sixteenth consecutive monthly decline. Manufacturing employment fell 58,000 in March 2008.
Most of the decline in employment during March 2008 was accounted for by job losses at large companies, which registered a 52,000 job decline. Meanwhile, small businesses added 55,000 jobs in March 2008, after adding a revised 16,000 in February 2008.
Also, construction employment fell 22,000 -- its sixteenth consecutive monthly decline -- bringing the total decline in construction jobs since the peak in August 2006 to 259,000. Employment in financial activities was flat for the month.
Economic Analysis: In general, a poor job report. The March 2008 statistic wasn't gloomy, but it wasn't rosy either. It was tepid, which is still net negative for the U.S. economy. The 55,000 gain in employment at small businesses was impressive, but it wasn't nearly enough to create overall job gains necessary to keep unemployment from rising. The March 2008 ADP report provides further evidence of a comprehensive U.S. economic slowdown.
Since August, the shares of Paychex Inc. (NASDAQ: PAYX) have dropped from $45 to $33.45. For the most part, the company provides a variety of payroll and human resource services for small and medium size businesses. However, with the slowing economy, investors are getting jittery.
Despite this, Paychex had a reasonable Q3. Revenues increased 9.7% to $532.2 million and earnings were up 13% to $142.5 million, or $0.39 per share.
While its customers are experiencing pain, the fact remains that they still need the kinds of services that Paychex provides. Simply put, the company has built a solid recurring revenue generator based on a competitive offering, which has kept up with players like ADP (NYSE: ADP). Keep in mind that Paychex has achieved its 18th consecutive year of record revenue and earnings growth.
Yes, Paychex admits that things are tougher (that is, with the macroeconomic environment). For example, the selling season has been difficult and there's been an uptick in business failures, especially in the construction and mortgage sectors.
Although, Paychex still has a fairly diversified customer base, which counts about 570,000 clients. And based on prior economic downturns, the company has been able to deal with the problems and grow through them.
Non-farm private employment declined 23,000 in February 2008 on a seasonally-adjusted basis, ADP announced Wednesday in the ADP National Employment Report (pdf).
The February 2008 23,000-job-reduction contained a deceleration in employment growth across businesses of all sizes, ADP (NYSE: ADP) said. The service sector of the economy saw an increase of 47,000 jobs, while employment in the goods-producing sector declined 70,000, its 15th consecutive monthly decline. Manufacturing employment fell 40,000 in February 2008 after declining a revised 3,000 in January 2008.
Most of the decline in employment during February 2008 was accounted for by job losses at large companies, but there was a notable deceleration of employment growth at businesses of all sizes, ADP said. Employment among small-size businesses, defined as those with fewer than 50 workers, advanced just 15,000 during the month, while employment among medium-size businesses with between 50 and 499 workers dropped 4,000. This was the first outright decline at medium-size businesses since June 2003 when job growth was still recovering from the last recession. Employment at large businesses with more than 500 workers declined 34,000.
Conditions in two economic sectors hard hit by the slumping housing sector -- construction and financial activities -- continued to deteriorate in February 2008. Construction employment fell 30,000 -- its 15th consecutive monthly decline -- bringing the total decline in construction jobs since the peak in August 2006 to 236,000. Employment in financial activities declined by 5,000.
Economic Analysis: Although not a large monthly job loss, the broad-based decline suggests near-spectrum-wide weakness in the U.S. economy, with housing's doldrums continuing to take a toll. Further, the fact that small businesses as well as larger companies are reducing payrolls provides further evidence of the comprehensive of the slowdown.
Job cut announcements by U.S. corporations increased 19% in January 2008 compared to a year ago, according to a survey the outplacement firm Challenger, Gray & Christmas, Bloomberg News reported Monday. Corporations announced 74,806 job cuts in January, up from 44,416 in December 2007, and up 19% from the previous January.
Economist Glen Langan told BloggingStocks Monday that while the Challenger survey is a sample and not a comprehensive survey, the report, in conjunction with other data on jobs, helps economists form a picture of overall labor force conditions.
"I use the report in conjunction with the ADP payroll data and U.S. Labor Department job data. When the three flash negative or positive for more than two months, that's usually indicative of a labor force trend," Langan said. Last Friday, the U.S. Labor Department announced the nation lost 17,000 jobs in January 2008.
Langan said the January 2008 Challenger report is consistent with a U.S. economic slowing, and cutback in employer hiring.
"Thus far we're not seeing mass lay-offs across the economy, but hiring clearly has tapered off," Langan said. "Companies are taking a wait-and-see stance given the substantial economic slowing and legitimate concerns about future business activity."
Langan said the February and March jobs 2008 data across surveys/samples will provide a more-accurate picture of hiring conditions in early 2008, as they are away from the often-volatile holiday hiring season.
Private sector employers in the U.S. added 40,000 jobs in December, according to a report by private employment service ADP (NYSE: ADP), which announced the figures in a statement Friday.
The December statistic was in-line with the consensus estimate of 40,000. ADP said the service sector added 71,000 jobs in December, while goods-producing sectors cut about 30,000 jobs. ADP also announced a revision of its November jobs total to 173,000, from 189,000.
Economists and analysts monitor the ADP survey for clues regarding job growth in the U.S. economy. On Friday, the U.S. Department of Labor will release the U.S government's non-farm payroll report for December. Luke-warm ADP report
"The ADP total is a lukewarm one, at best," economist David H. Wang told BloggingStocks on Thursday. "The report is not a picture of a recession, but it certainly is not a picture of robust job growth, either. Obviously Friday's Labor Department job report will be followed closely. The U.S. economy seems to be inching along and the Fed will scrutinize Friday's report to see if it confirms continued job softness."
Analysts expect the Labor Department's December job report to show a gain of 70,000 jobs. While that 70,000 figure may sound impressive, it isn't, given the size of the U.S. economy. Economists and analysts are quick to point out that the U.S. economy must create 125,000-150,000 new jobs per month just to accommodate the increased number of work-eligible adults seeking work and to keep the unemployment rate from rising. The U.S. economy created 94,000 jobs in November 2007.
MOST NOTEWORTHY: The small-cap bank sector, Waste Connections, Warnaco Group and Intersections were today's noteworthy upgrades:
Lehman upgraded the small-cap bank sector to Neutral from Negative as they expect the group to benefit from the decline in short-term interest rates and the steeping yield curve. The firm upgraded Associated Banc-Corp (NASDAQ: ASBC), Pacific Capital Bancorp (NASDAQ: PCBC) and Westpac Banking Corp (NYSE: WBK) to Equal Weight from Underweight.
Friedman Billings added Waste Connections (NYSE: WCN) to its Top Picks list. The firm believes the company can outperform the group and overall market in an economic downturn.
Warnaco Group (NASDAQ: WRNC) was upgraded to Overweight from Neutral at JP Morgan on valuation and growth potential.
JMP Securities' checks indicate that Intersections (NASDAQ: INTX) is on track to meet EPS expectations for the quarter and is well positioned to beat their 2008 EPS estimate of 80c. The firm raised shares to Strong Buy from Outperform.
Commenting on the market's volatility, Kelley Wright says, "Damn the torpedoes and full steam ahead." He explains, "These events are what create value and have provided us with opportunity over the years to acquire outstanding companies at excellent price/yield levels. I suspect this time will be no different. Hang in there; this too shall pass."
In his Investment Quality Trends, Kelley Wright select stocks based on quality and yield. In his latest update, he says, "Whenever liquidity, the lifeblood of any market, is compromised, things can get ugly right damn skippy."
However, he remains optimistic for the long-term. He notes, "Fundamental measures of value are fundamental for a reason; they don't change with the whims of the day. The markets are a self-regulating mechanism that restores order when excess exceeds a sustainable level."
Meanwhile, he notes that he continues to recommend several blue chip equity. He says, "We have been long Barrick Gold (NYSE: ABX) in our model portfolio since 2003, when the stock traded in the high teens. We buy more every time it falls into our undervalued category, such as now. With the U.S. dollar under pressure, it makes even more sense."
The advisor also likes Automatic Data Processing (NYSE: ADP). He notes, "ADP is undervalued by our proprietary measures, has an S&P earnings and dividend quality ranking of A-plus, has had at least 10% annual dividend growth for the past 12 years and has a 55% or better return on equity."
In addition, he sees value in Colgate-Palmolive (NYSE: CL). He explains, :The stock also has a quality ranking of A-plus. It has also shown 10% annual dividend growth over the past 12 years. If things turn ugly, this stock should hold up nicely."
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
"Any further market weakness creates creates another opportunity to acquire some outstanding stocks," suggests Kelley Wright, noted for his focus on blue chip, dividend-paying stocks.
Non-farm private employment decreased 79,000 in June on a seasonally adjusted basis, ADP announced Wednesday in the ADP National Employment Report. 
For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
Non-farm, private employment increased by 40,000 in May on a seasonally-adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (
Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause.
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For blue chip buyers: 'This too shall pass'
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Cramer on BloggingStocks: Banks fail to raise money when they could 
