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Chasing Value: Anglo American, Gold or Something Else

Sheldon Liber — Thu, 28 Oct 2010 14:00:00 EST

Filed under: Rants and Raves, Market Matters, Chasing Value[TM], Anglo American (AAUKY)

In recent discussions with some friends, one had bought Anglo American ADR (AAUKY) when I recommended it years ago, and the other thinking about what the current opportunity might be. It seemed time for an update.

I'm into Anglo for $9.80 a share and a spot check has it trading at $23.00 per share in morning trading; a nice 135% return. It was much easier to recommend the stock before. Now that AAUKY is hovering around it's 52-week high of $23.55, it's a tough call. It certainly is not a value play now.

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Isn't It Romantic? Shop Tiffany from Your Phone

Beth Gaston Moon — Tue, 15 Jun 2010 10:00:00 EST

Filed under: Consumer Experience, Tiffany and Co (TIF), iPhone, Smartphones, Technology

Well, guys, it's become a little easier for your girlfriend to hint for that engagement ring. On the plus side, it's become easier for you to shop for one. Tiffany & Co. (TIF) has launched a new app for Apple's (AAPL) iPhone, and it may just become a girl's best friend.

The free app, called the "Engagement Ring Finder," allows a would-be groom (or bride) to browse through shapes, settings, metals, designs, and carat sizes (only up to 2.5 carats, so the super generous among you will have to visit a TIF store). It is also possible to view the rings from various angles and look at them "actual size." Users can save their favorite looks to consult with friends and family via text, email, Facebook, and Twitter.

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Isn't It Romantic? Shop Tiffany from Your Phone originally appeared on BloggingStocks on Tue, 15 Jun 2010 10:00:00 EST. Please see our terms for use of feeds.

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DeBeers sales are falling, so why not buy a diamond now?

Connie Madon — Mon, 13 Apr 2009 15:00:00 EST

Filed under: International Markets, Bad News, Commodities, Financial Crisis

Cecil Rhodes, founder of DeBeers, started in business by renting water pumps to miners during the diamond rush of 1867. With his profits he bought the claims of small mining companies and soon formed DeBeers Consolidated Mines in 1888.

Through a series of mergers, DeBeers soon became the sole owner of all mining operations in the country. Then in 1889, Rhodes negotiated a strategic agreement with the London based Diamond Syndicate, which agreed to purchase a fixed quantity of diamonds at a fixed price and the DeBeers diamond monopoly was born.

The astounding success of DeBeers continued well into the 1990s until Russia, Canada and Australia started distributing diamonds outside the DeBeers channel. This effectively ended the DeBeers monopoly of the diamond market.

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DeBeers sales are falling, so why not buy a diamond now? originally appeared on BloggingStocks on Mon, 13 Apr 2009 15:00:00 EST. Please see our terms for use of feeds.

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Sell your marginal stocks and upgrade with DIA - an ETF betting on America

Mitch Tuchman — Thu, 18 Dec 2008 17:00:00 EST

Filed under: ETF Investing, Personal Finance, Best Stocks for 2008

It's never been a good idea to bet against America. And nothing is better than America's diamonds, so you can't help but love the companies that comprise DIAMONDS Trust, Series 1 (NYSE: DIA) exchange-traded fund (ETF). DIA is one of the first ETFs ever created and indexes the Dow Jones Industrial Average. These are the best companies in America -- good, solid producers.

Valuations have been crushed across the board in 2008, and many money managers that I know who have owned more speculative small cap companies, are looking at the stocks in the Dow Jones that are trading at historically low multiples and "trading up" in the quality of their companies. Do you have $10,000 in a few marginal small cap companies? Sell them all and buy DIA -- you might get a safer ride if the market continues to fall, while preserving nearly all of the upside.

During the last 12 months, DIA has paid about $3 of dividends. Based upon an $87 price, this is about a 3.4% yield and you still have all the upside -- remember a few months ago the Dow was at $135.

Examples of the well-known and respected companies in DIA include 3M Company (NYSE: MMM), Boeing Company (NYSE: BA), Johnson & Johnson (NYSE: JNJ), McDonald's Corp. (NYSE: MCD), and Wal-Mart Stores, Inc. (NYSE: WMT) among many other famous brands. These brands are consistent performers and even in times of economic crisis, will probably still draw huge numbers of customers to their products.

Why pay a large cap money manager to stock pick among the Dow Jones? DIA only charges 0.14% to own all the companies through this ETF whereas a traditional money manager would charge you much 1% - 2% to invest in the same companies, thus taking most of your dividend away in fees.

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Sell your marginal stocks and upgrade with DIA - an ETF betting on America originally appeared on BloggingStocks on Thu, 18 Dec 2008 17:00:00 EST. Please see our terms for use of feeds.

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Chasing Value: Inflation protection with gold & platinum (AAUK)

Sheldon Liber — Wed, 10 Dec 2008 13:15:00 EST

Filed under: International Markets, Bargain Stocks, Chasing Value[TM], Commodities, Anglo American (AAUKY), Stocks to Buy

Rampant inflation seems likely at some point in the future, as demand for commodities increases and the pain of running the government's printing press full time comes back to haunt us. So once again I am revisiting Anglo American ADR (NASDAQ: AAUK).

How can you protect yourself against the pain of inflation? One thing to remember is that although cash is king -- as we are told every day -- cash will not perform well in a highly inflationary environment. What usually performs well are things that you can hold in your hand, that you can touch and that other folks want.

Now that I want to buy things, what kind of things do I want to buy? How will I know what things to buy? Where will I put these things? What if I buy the wrong things?

From my perspective the answer to all of these questions can be found in AAUK, which I most recently wrote about five weeks ago Chasing Value: Anglo American on sale.

Since the company has mining operations on six continents and owns reserves in most every natural resource, precious and not, you will be diversified geographically and in breadth of resources -- things, that is, things people want.

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Chasing Value: Inflation protection with gold & platinum (AAUK) originally appeared on BloggingStocks on Wed, 10 Dec 2008 13:15:00 EST. Please see our terms for use of feeds.

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Chasing Value: Anglo American on sale

Sheldon Liber — Fri, 07 Nov 2008 12:35:00 EST

Filed under: Market Matters, Bargain Stocks, Chasing Value[TM], Commodities, Anglo American (AAUKY), Stocks to Buy

On more than one occasion, "my pal Warren" has commented that folks have no fear about buying stocks at the top of the market but give them a chance to buy that same stock on sale at half the price and they have no interest.

Last March I was lamenting a lost opportunity to buy Anglo American ADR (NASDAQ: AAUK) at $26 or $27 before it popped to $34 a share. I wanted it at a price it never dropped to, and I did not get it (Chasing Value: Anglo American -- great pick, but alas...).

Then the market started dropping, and dropping some more until finally things were looking pretty bad and I decided it was time to make my play. I recently bought in at $11.69. and it has bounced up and down since then, closing on Thursday November 6, at $10.37, dropping from $12.13 a day earlier.

Since last spring the bottom has fallen out of the commodities market. If you have pondered the idea of buying into a diversified fund focused on mining and mineral assets, then the following profile may depict a stock for you.

The UK-based company owns significant stakes in global producers of platinum (75%, Anglo Platinum) and diamonds (45%, De Beers S.A.). In addition, Anglo American has interests in ferrous and base metals, and industrial minerals; it also is one of the world's largest independent coal miners. Though it used to have a majority stake in AngloGold Ashanti, Anglo American has reduced its share to 17%. The company controls assets around the world.

Just a few metrics that may be of interest: AAUK is paying over a 5% yield, has a forward P/E ratio 3.2, and almost 30% profit margins. As the following 10-year chart indicates, the stock is almost down to where it was way back then.

Given that the world is printing money unabashedly, and that China and India are not going to stop growing, I think the current prices for coal, gas, diamonds, gold, silver, platinum and all else are destined to go up dramatically after we all take a deep breath. I have no idea what will happen in the short term, but in the long term I believe inflationary pressures will be significant.

Owning a company like Anglo American that is diversified around the world with significant exposure to both precious and semi-precious materials, as well as basic commodities, seems like a good place to invest, if you have the courage to buy it on sale as I believe it is now.

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 AAUK.

Chasing Value: Anglo American on sale originally appeared on BloggingStocks on Fri, 07 Nov 2008 12:35:00 EST. Please see our terms for use of feeds.

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Chasing Value: Anglo American (AAUK) is down...but!

Sheldon Liber — Fri, 18 Jan 2008 16:37:00 EST

Filed under: International Markets, China, Brazil, Chasing Value[TM], Commodities, Anglo American (AAUKY), Stocks to Buy, Best Stocks for 2008

Among the many investment pontificators you will find in the media, I pride myself on laying everything out on the table, good calls, bad calls and even my unfortunate periodic stupidity. All of my 2008 picks are down to a varying degree, making me look none too smart in the opening weeks of the year.

Among the stocks I like, Anglo Amercican PLC (NASDAQ: AAUK) has gone down from the $30 level where I recommended it to around $25 a share today. Its 52-week low is $23.38, and its high was $38.75. It pays a dividend currently yielding about 2%.

Early this morning, this was reported: Anglo American Enters Into Exclusive Discussions To Acquire Control Of The MMX Minas-Rio And MMX Amapa Iron Ore Projects. AAUK is a partial owner now and seeks full control of these Brazilian copper mines. Under the leadership of Cynthia Carroll, who became chief executive of Anglo American, it has been refocusing its business structure, planning sales of its building material division Tarmac for $6 billion, while it has also been reducing its stake in gold miner AngloGold Ashanti.

There has been a push to get big in copper, and all of the news out of South America supports this theme. Meanwhile MarketWatch reported China now world's largest gold producer; foreign miners at door. China is now producing more gold than South Africa, which has been the top producer since 1905.

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Chasing Value: Anglo American (AAUK) is down...but! originally appeared on BloggingStocks on Fri, 18 Jan 2008 16:37:00 EST. Please see our terms for use of feeds.

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Blue Nile just sparkles with opportunity

Joseph Lazzaro — Fri, 28 Dec 2007 12:53:00 EST

Filed under: Stocks to Buy

There are stock pull-backs, and then there are stock pull-backs that signal 'opportunity.' Or should one say here just 'sparkles' with opportunity?

Online diamond company Blue Nile (NASDAQ: NILE) is the largest online retailer of certified diamonds and fine jewelry, and part of the reason it attained that status is the company's philosophy: Blue Nile believes choosing the right engagement ring doesn't have to be complicated.

The company's web site is a pillar on which the NILE foundation stands: its structured so that the typical person can navigate carat / cut / clarity / color characteristics of diamonds and ring characteristics with relative ease. A 30-day return policy puts the potential purchaser at ease.

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Blue Nile just sparkles with opportunity originally appeared on BloggingStocks on Fri, 28 Dec 2007 12:53:00 EST. Please see our terms for use of feeds.

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Chasing Value: Anglo American (AAUK) flying deep below the earth

Sheldon Liber — Thu, 08 Nov 2007 12:21:00 EST

Filed under: Major Movement, International Markets, ETF Investing, BHP Billiton Ltd ADR (BHP), Rio Tinto plc ADS (RIO), Chasing Value[TM], Commodities, Headline News, Anglo American (AAUKY), Stocks to Buy

One of my Chasing Value picks is flying high this morning on no company news. Several months ago, I posted Chasing Value: Anglo American (AAUK) - Inflation hedge & more when the stock was $24.65 a share. Today as I write, it is up over almost 19%, reaching an intra-day high of $38.75.

So what gives? That's a big jump, and there must be something going on. So here is the picture as I see it. Yesterday, the Dow closed down 360 points, followed by Asian markets dropping overnight across the board, with the dollar continuing to sink and oil continuing to rise. Then to top it all off, we wake up this morning to Doug McIntyre's BHP Billiton, world's largest miner, offers to buy rival, so mining stocks are in play. Anyone interested in gold? Silly question I know.

Anglo American is not just a precious metals miner. It is a major player in diamonds, coal and paper; plus it is diversified around the world. Just being outside the U.S. makes it a hedge against the dollar. So if it is possible to fly underground -- then AAUK is doing it!

Disclosure: I own shares of AAUK (still eating my own cooking).

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Chasing Value: Anglo American (AAUK) flying deep below the earth originally appeared on BloggingStocks on Thu, 08 Nov 2007 12:21:00 EST. Please see our terms for use of feeds.

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Blue Nile (NILE): Build-your-own diamond rings

Larry Schutts — Tue, 14 Aug 2007 14:35:00 EST

Filed under: Earnings Reports, Tiffany and Co (TIF), Technical Analysis, Stocks to Buy

So you need to buy some diamond jewelry, but don't know anything about the market? That's all right. There's a place online that explains shape, cut, color, clarity, carat weight, certification and setting ... and then let's you design your piece right there on the site. It's the largest online diamond retailer in the world.

Blue Nile (NASDAQ: NILE) sells diamond, platinum, gold, pearl, and sterling silver jewelry on web sites based in the United States, the United Kingdom and Canada. Products include settings, wedding bands, earrings, necklaces, pendants, bracelets, and watches. The Blue Nile web sites showcase in-depth educational materials and online tools that place consumers in control of the jewelry shopping process. Prices are significantly below traditional retail. Tiffany (NYSE: TIF) is a major competitor.

The company pleased investors last week, when it reported Q2 EPS of 23 cents and revenues of $72.1 million. Analysts had been expecting 18 cents and $67.1 million. Management also guided Q3 EPS to 13-15 cents (13 cent consensus), Q3 revenues to $66-$67.5 million ($62.7M consensus), FY07 EPS to 94-99 cents (90 cent consensus) and FY07 revenues to $312-$318 million ($306M consensus). The news popped the shares out of a late-July/early August "cup" into the mid-August "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle."

Brokers recommend the shares with three "strong buys," one "buy," eight "holds" and two "sells." Analysts see a 27% growth rate through the next year. The NILE Sales Growth rate (26.67%), EPS Growth rate (27.78%), Return on Assets (16.81%), Return on Investment (30.68%), Return on Equity (31.12%) and Revenue per Employee ($1.77M) compare favorably with industry, sector and S&P 500 averages. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $33.05 and $98.50. A stop-loss of $73.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

Blue Nile (NILE): Build-your-own diamond rings originally appeared on BloggingStocks on Tue, 14 Aug 2007 14:35:00 EST. Please see our terms for use of feeds.

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