Wednesday, January 31, 2007

What's With These Super High Yields? 45% !!!

If you look through the high yielding stocks that are pulled up by stock screeners, you will notice that there are some outrageously high yields out there, one as high as 45%; but are they genuine high yields? You will also find that different screeners come up with different results. I discovered that when doing this screening, one of the stocks in my portfolio supposedly pays 37%. I didn't even know it paid a dividend! So let's look at the top ten yielding stocks [all of which supposedly pay over 25% yields] to see why the yield is showing up at such a high level.

Royce Focus Trust, Inc. (FUND) 45.5% This is a closed end investment company that invests in stocks and bonds of various sector companies. They pay their dividend quarterly and if you take the last four dividend payments, they add up to $1.57. If you divide that by the closing price of 10.80, you get a yield of 14.5%, still high yet far below the 45.5% the screener pulled up. The only way I could get close to the higher yield was to extrapolate out just the last payment made of $1.20 and multiply it by four to give an annual payment of $4.80. Unfortunately, you can't do that because the payments for the first three quarters of last year were 12 cents, 12 cents, and 13 cents, and its probable that the next three quarters will be around that lower amount. The dividend history shows that the first three quarters are always lower than the last quarterly payment. In addition, 91% of the distributions for last year were capital gains. Therefore, the portion of the distributions that come from ongoing dividends was minimal. You can't rely on the capital gains distributions in the future.

Cal-Bay International Inc. (CBAY.OB) 37% This is a company that invests in real estate. They have only made one dividend distribution that I could find, in April of last year. The amount of the distribution was a penny per share. So how does this generate a high yield? The stock trades at an extremely low price of 2.1 cents per share, causing the yield calculation to be so high. Since the company has only paid one dividend, you can't rely on it in the future.

Polyair Inter Pack Inc. (PPK) 37% This is another one-time-only dividend payer. The company makes protective packaging products and swimming pool products. They went ex-dividend in December 2006 at 81 cents per share.

Latin American Discovery Fund Inc. (LDF) 34.1% This is a closed-end management investment company that invests in Latin American stocks. This company has usually paid a small dividend mid-year and a large dividend at year end. Unfortunately, almost all of the company's year end distribution comes from short and long term capital gains, as opposed to dividend distributions from the stocks in the portfolio. Can't rely upon the same high distributions.

Nicholas-Applegate International & Premium Strategy Fund (NAI) 30.9% Another closed end fund with a year end distribution that includes capital gains.

Frontline Ltd. (FRO) 30.7% This company owns oil tankers which transports crude oil, coal and iron ore. They have been paying dividends since August 2001, with four distributions in 2006, five distributions in 2005, seven distributions in 2004, etc. The dividends have fluctuated all over the place from a high of $5.855 in February of 2006, and the last dividend paid of $2.50 per share. The dividends are reliant upon the company's ability to command the high fees that have been charged for transporting oil.

Templeton Emerging Markets Fund (EMF) 30.4% Yet another closed end fund with a year end distribution that includes capital gains.

Novastar Financial Inc. (NFI) 26% This mortgage company specializes in residential nonconforming loans. They have paid dividends four times a year for several years. In 2006, they paid out $5.60 per share in dividends, yet their diluted earnings per share were only $3.24. How much longer can they keep up these dividends at this level.

New Century Financial Corp. (NEW) 25.8% A mortgage real estate investment trust that has been paying dividends at least four times a year for the past several years, and dividends have increase with every payment since July 2004. In the last year, they paid out $7.30 per share. Diluted earning per share were $6.72. How much longer can they keep this up?

American Israeli Paper Mills Ltd. (AIP) 25.4% This manufacturer of paper products in Israel has paid dividends sporadically since 1997, with a couple years being skipped. Dividends have fluctuated from a low of $.685 per share to a high of $9.21 per share. Because of the substantial fluctuations of the dividends in the past, future dividends cannot be predicted.

Rules for Investing in Very High Yield Stocks

1. Check the consistency in the number of payments per year.
2. Check the consistency in the amount of the dividend from quarter to quarter.
3. Check to make sure the dividend payment doesn't include capital gains.
4. Check to make sure the yield isn't generated by a special high year-end distribution.
5. Check to make sure that the dividends don't exceed the stock's earnings per share.
6. And most important, check to make sure that your stock information provider is calculating the correct yield.


Author owns PPK.

Odd Financial News of the Week: Businesses Support Minimum Wage Increase

Many businesses, both large and small, are now saying that increasing the minimum wage is good for business. They are saying that states that have higher minimum wages than the Federal minimum have had better employment and growth of small businesses.
Some of the executives of publicly traded companies who have signed a statement supporting higher minimum wages include:

Jim Sinegal, CEO, Costco (COST)
Arnold Hiatt, former CEO, Stride Rite (SRR)
Robert Glassman, Chairman, Wainwright Bank & Trust Co. (WAIN)

Matsushita in the Hot Seat!

Matsushita Electric Industrial Co. Ltd. (MC), which trades on the New York Stock Exchange, has come under fire [no pun intended, really!] due to the fact that the massage chairs that they manufacture under the Panasonic brand could catch fire. Two of the chairs that were used as demos had incidents occur after they were used repeatedly. The company has recalled over 68,000 of the chairs, and said they don't think the recall would affect earnings. The stock closed up 10 cents per share.

Tuesday, January 30, 2007

Unusual Trust Stocks

The publicly traded trusts are different from regular stocks in that the earnings that are generated avoid double taxation. There is no taxation at the corporate level, only at the shareholder level. In addition, income that is distributed may be tax deferred. Most investors have heard of real estate investment trusts which invest in properties and/or mortgages, and oil & gas income trusts which receive income from gas and oil well royalties.

Oil income trusts have become so popular in Canada that the Canadian government has passed a law to end the pass through benefit in the next few years. What has happened in Canada is that other non-oil companies are jumping on the trust bandwagon. So you end up getting such stocks as a beer trust [Big Rock Brewery Income Trust (BR-UN.TO)], a trucking trust [TransForce Income Fund Trust (TIF-UN.TO)], and a "parts and service support of mobile equipment, power systems and industrial components" trust [Wajax Income Fund (WJX-UN.TO)].

Canada doesn't hold a monopoly over these trusts. There are several 'unusual' trusts that are traded in the United States, unusual being defined as non-REIT's and non-oil & gas trusts. Here are a few.

Mesabi Trust (MSB), founded in 1919, owns royalty rights in mineral properties in the United States. The Trust receives royalties based on the volume of shipments and the selling prices of iron ore pellets. Their properties are located in Louis County, Minnesota. The trust trades on the New York Stock Exchange and yields 5.2%.

Mills Music Trust (MMTRS.OB) receives payments from a deferred contingent obligation payable to Mills Music Inc. for its catalogue of over 25,000 songs of copyrighted music. Some of the more famous songs in the catalog include "Stardust", "When You're Smiling", "Sleigh Ride", "I'm Getting Sentimental Over You", "Who's Sorry Now", and "Little Drummer Boy". Other songs include those written by Bing Crosby and Duke Ellington. Paul McCartney was reported as one of the major shareholders in the past. The company has paid consecutive quarterly dividends since 1965 [over 40 years] and currently yields 4.2%. One online source has reported that the trust distributions are non-taxable until the payments exceed your cost basis, however I wouldn't rely on that info without contacting your accountant first.

Fording Canadian Coal Trust (FDG) This New York Stocks Exchange traded trust, based in Calgary, Canada, owns an interest in a partnership which produces and sells seaborne metallurgical coal that is used primarily for making coke in integrated steel mills. They have ownership interests in six open-pit coal mines. They also own wollastonite mining operations in New York and Mexico. Wollastonite is primarily used in the manufacture of automotive composites, adhesives, sealants, and many other products. The stock trades on the NYSE and pays quarterly and yields 15.1%.

Great Northern Iron Ore Properties (GNI) founded in 1906, receives income from its iron ore mineral properties in Minnesota. It trades on the NYSE and yields 11.1%.

CSS Income Trust (CCRUF.PK) provides energy and environmental waste management services. They provide waste processing, engineered landfill disposal services, terminaling and storage, completions, workovers, and abandonments. Yields 5.7%.

Macquarie Infrastructure Company Trust (MIC) owns and operates a group of infrastructure businesses, including an airport services business, an airport parking business, a district energy business, a gas production and distribution business, and a bulk liquid storage terminal business. Trades on the NYSE and yields 6.1%.

Author owns MMTRS.

Stocks That Pay Dividends Monthly (Jan. 2007 Update)

During the last few months, I have provided articles on the stocks, including exchange-listed closed end funds [CEF's], that pay their dividends monthly. Many income investors are looking for monthly payers to support their income during retirement. Some investors want monthly dividend stocks for their IRA's for faster compounding.

This list is now up to 150 different stocks, CEF's, REIT's, floating rate funds, and oil income funds [such as Canadian royalty trusts], all of which are traded on the New York Stock Exchange or American Stock Exchange. I've added over twenty new securities since the year-end update, reposted the yields, kept the readers' recommendations of sorting by yield with the highest first, and identifying the Canadian companies [due to the tax withholding issues].

For a list of all the monthly dividend stocks in an Excel format which you can download, sort, add to, delete from, and change, go to WallStreetNewsNetwork.com.

Harvest Energy Trust (HTE) 18.4% [Canada]
BlackRock Floating Rate Inc. Strat. Fund II (FRB) 17.4%
Advantage Energy Income Fund (AAV) 17.0% [Canada]
Canetic Resources (CNE) 15.0% [Canada]
Pengrowth Energy Trust (PGH) 14.8% [Canada]
Precision Drilling (PDS) 14.2% [Canada]
PrimeWest Energy Trust (PWI) 13.6% [Canada]
BlackRock Floating Rate Inc. Strat. Fund (FRA) 13.3%
Provident Energy Trust (PVX) 11.9% [Canada]
Boulder Growth & Income Fund (BIF) 11.8%
Penn West Energy Trust (PWE) 11.8% [Canada]
Baytex Energy (BTE) 11.0% [Canada]
RMK High Income Fund Inc. (RMH) 10.9%
RMK Strategic Income Fund (RSF) 10.9%
RMK Advantage Income Fund (RMA) 10.8%
RMK Multi-Sector High Income Fund (RHY) 10.6%
Enerplus Resources Fund (ERF) 10.3% [Canada]
Enterra Energy Trust (ENT) 10.0% [Canada]
Eaton Vance CRD Opportunities (EOE) 9.7%
Nuveen Equity Premium Advantage Fund (JLA) 9.5%
Nuveen Equity Premium Opport. Fund (JSN) 9.5%
Pioneer High Income Trust (PHT) 9.4%
PIMCO High Income Fund (PHK) 9.2%
BlackRock Diversified Income Strategies (DVF) 9.1%
Nuveen Equity Premium Income Fund (JPZ) 8.9%
Calamos Convertible Opport. & Income (CHI) 8.9%
Van Kampen Senior Income Trust (VVR) 8.8%
Eaton Vance Floating-Rate Income (EFT) 8.7%
ING GL Equity Dividend (IGD) 8.7%
Lehman Brothers First Trust Income Opp. (LBC) 8.7%
Eaton Vance Senior Floating Rate Trust (EFR) 8.6%
Scudder High Income Trust (KHI) 8.6%
BlackRock Senior High Income Fund (ARK) 8.5%
Alpine Global Dynami (AGD) 8.4%
Eaton Vance Enhanced Equity Income Fund II (EOS) 8.4%
Nuveen Equity Premium Growth Fund (JPG) 8.4%
Calamos Convertible & High Income (CHY) 8.4%
Van Kampen High Income Trust II (VLT) 8.3%
First Trust/Four Corners Senior Fltg Rate Inc. (FCM) 8.1%
Nuveen Preferred Convertible Income Fund 2 (JQC) 8.1%
Western Asset High Income Fund II Inc. (HIX) 8.1%
BlackRock Enhanced Dividend Achievers Trust (BDJ) 8.0%
Eaton Vance Senior Income Trust (EVF) 8.0%
Evergreen International Balanced Income (EBI) 8.0%
United Dominion 8.5 (UDM) 8.0%
BlackRock Global Floating Rate Income (BGT) 7.9%
Pimco Global Stocksplus Income Fund (PGP) 7.9%
Strategic Global Income Fund Inc. (SGL) 7.9%
BlackRock Limited Duration Income (BLW) 7.8%
Blackrock World Investment Trust (BWC) 7.8%
Cross Timbers Royalty Trust (CRT) 7.8%
Eaton Vance Enhanced Equity Income Fund (EOI) 7.8%
Western Asset High Income Opportunity Fund (HIO) 7.8%
American Strategic Income Portfolio III (CSP) 7.7%
BlackRock Enhanced Government Fund, Inc. (EGF) 7.5%
Franklin Templeton Ltd. Duration Income Trust (FTF) 7.5%
Advent Claymore Convertible Secur. & Income (AVK) 7.4%
Nuveen Real Estate Income Fund (JRS) 7.4%
BlackRock Preferred and Corporate Inc. Strat. (PSW) 7.4%
Western Asset Global High Income Fund Inc. (EHI) 7.3%
ACM Income Fund Inc. (ACG) 7.3%
40/86 Strategic Income Fund (CFD) 7.2%
Scudder Multi-Market Income Trust (KMM) 7.1%
Gabelli Gold, Natural Resources & Income (GGN) 7.0%
ING Clarion Real Estate Income Fund (IIA) 7.0%
Scudder Strategic Income Trust (KST) 7.0%
ACM Managed Dollar Income Fund (ADF) 7.0%
ACM Government Opportunity Fund Inc. (AOF) 6.9%
Alliance World Dollar Government Fund II (AWF) 6.9%
Morgan Stanley Municipal Premium Income (PIA) 6.9%
Permian Basin Royalty Trust (PBT) 6.8%
RMR Real Estate Fund (RMR) 6.8%
Morgan Stanley Quality Municipal Income Trust (IQI) 6.7%
BlackRock Preferred Income Strategies (PSY) 6.7%
Aberdeen Asia-Pacific Income Fund Inc. (FAX) 6.6%
AIM Select Real Estate Income Fund (RRE) 6.5%
San Juan Basin Royalty Trust (SJT) 6.5%
Colonial Intermarket Income Trust 1 (CMK) 6.4%
Flaherty & Crumrine Preferred Income Opp. (PFO) 6.4%
Neuberger Berman Real Estate Securities Inc. (NRO) 6.4%
Van Kampen Income Trust (VIN) 6.4%
RMR Hospitality and Real Estate Fund (RHR) 6.3%
BlackRock Income Opportunity Trust, Inc. (BNA) 6.2%
Scudder RREEF Real Estate Fund II, Inc. (SRO) 6.2%
American Income Fund Inc. (MRF) 6.2%
AEW Real Estate Income Fund (RIF) 6.1%
AmREIT (AMY) 6.1%
BlackRock Income Trust, Inc. (BKT) 6.1%
Gabelli Dividend & Income Trust (GDV) 6.0%
ING Clarion Global Real Estate Income Fund (IGR) 6.0%
Scudder RREEF Real Estate Fund Inc. (SRQ) 6.0%
Aberdeen Global Income Fund (FCO) 6.0%
MFS Multimarket Income Trust (MMT) 5.9%
BlackRock Municipal Income Trust (BFK) 5.8%
Gabelli Global Utility & Income Trust (GLU) 5.8%
Hugoton Royalty Trust (HGT) 5.8%
Morgan Stanley Insured Municipal Income (IIM) 5.8%
BlackRock Municipal Income Trust II (BLE) 5.7%
Morgan Stanley Municipal Income Opportunities (OIA) 5.7%
Real Estate Income Fund Inc. (RIT) 5.7%
Putnam Master Intermediate Income Trust (PIM) 5.6%
Putnam Premier Income Trust (PPT) 5.6%
Colonial Municipal Income Trust (CMU) 5.5%
Dreyfus Strategic Municipals Inc. (LEO) 5.5%
MFS Charter Income Trust (MCR) 5.5%
MFS Municipal Income Trust (MFM) 5.5%
Morgan Stanley Municipal Inc. Opp. Trust II (OIB) 5.5%
Realty Income Corp. (O) 5.5%
BlackRock California Municipal Income Trust (BFZ) 5.4%
BlackRock Florida Municipal Income Trust (BBF) 5.4%
Colonial High Income Municipal Trust (CXE) 5.4%
Morgan Stanley Municipal Inc. Opp. Trust III (OIC) 5.4%
Pioneer Municipal High Inc. Advantage Trust (MAV) 5.4%
Scudder Strategic Municipal Income Trust (KSM) 5.4%
BlackRock New York Municipal Income Trust (BNY) 5.3%
MFS Government Markets Income Trust (MGF) 5.3%
Putnam Managed Municipal Income Trust (PMM) 5.3%
BlackRock New Jersey Municipal Income Trust (BNJ) 5.2%
MFS Intermediate Income Trust (MIN) 5.2%
Pioneer Muncipal High Income Trust (MHI) 5.2%
Sabine Royalty Trust (SBR) 5.2%
Alliance National Municipal Income (AFB) 5.2%
BlackRock California Municipal Income Trust II (BCL) 5.1%
Morgan Stanley California Insured Muni Inc. (IIC) 5.1%
BlackRock Florida Insured Municipal Income (BAF) 5.0%
Eaton Vance Municipal Income Trust (EVN) 5.0%
Inland Real Estate Corp. (IRC) 5.0%
Van Kampen Advantage Municipal Inc. Trust II (VKI) 5.0%
Van Kampen California Value Municipal Income (VCV) 5.0%
ACM Municipal Securities Income Fund (AMU) 5.0%
BlackRock Insured Municipal Income Trust (BYM) 4.9%
ACM Managed Income Fund Inc (AMF) 4.9%
Alliance California Municipal Income (AKP) 4.9%
Alliance New York Municipal Income (AYN) 4.9%
BlackRock New York Municipal Income Trust II (BFY) 4.8%
Eaton Vance Pennsylvania Municipal Income (EVP) 4.8%
BlackRock California Insured Municipal Income (BCK) 4.7%
BlackRock New York Insured Municipal Income (BSE) 4.7%
Eaton Vance Florida Municipal Income Trust (FEV) 4.7%
Eaton Vance Michigan Municipal Income Trust (EMI) 4.7%
Eaton Vance New York Municipal Income Trust (EVY) 4.7%
Eaton Vance Ohio Municipal Income Trust (EVO) 4.7%
Neuberger Berman Real Estate Income Fund (NRL) 4.7%
Van Kampen Massachusetts Value Muni Inc. (VMV) 4.7%
Eaton Vance California Municipal Income Trust (CEV) 4.5%
Eaton Vance New Jersey Municipal Inc. Trust (EVJ) 4.5%
Morgan Stanley Government Income Trust (GVT) 4.4%
Scudder Municipal Income Trust (KTF) 4.4%
Eaton Vance Massachusetts Municipal Income (MMV) 4.3%
Mesa Royalty Trust (MTR) 2.2%

Author owns PWE and PWI.

Monday, January 29, 2007

Four Reasons Why Google Could Drop

A Korean blog called OhMyNews.com has listed four major reasons why the Google (GOOG) stock could drop in value, including security issues, a potential merger between Microsoft (MSFT) and (YHOO), becoming "uncool", and consumers preference for humanization of search engines.

Author owns GOOG, YHOO, and MSFT.

House for Sale: $155 Million

The most expensive house in the world will be built at the Yellowstone Club, a resort near Bozeman, Montana by Tim Blixseth, a real estate and timber tycoon. The house will be 53,000 square feet on 160 acres with 10 bedrooms.
The second most expensive mansion is Updown Court in Windlesham, England at $139 million. In third place is Donald Trump's house in Palm Beach, Florida at $125 million.

Short Interest Numbers Out

Short positions of stocks is required to be reported on the 15th or the month or earlier if the 15th falls on a Saturday, Sunday or holiday. The compilation is done within eight days. NASDAQ provides a nice database on short positions, even on New York Stock Exchange Stocks. [That's very nice of them.] If you look at the change in the short interest from December 15 to January 12 for some of the more active stocks, you will see some interesting data:

Intel (INTC) down 2.8%
Ford (F) up 20.7%
Cisco (CSCO) up 1.8%
Motorola (MOT) up 11%
Bristol-Myers Squibb (BMY) down 18.7%
Pfizer (PFE) down 12.4%
Oracle (ORCL) up 11.6%

Author currently does not own any of the above.

Is a Stock Symbol Just Symbolic or Does It Add Value?

If you have been reading Stockerblog for several months, you have noticed that I have occasionally included stock market stock symbol trivia, where I ask what you think the company is that has a certain stock symbol, such as TAP, FUEL, CAKE, FACE, XRAY, SEED, PILL, etc.
But is having an interesting name, just that, interesting? Or is it possible value can be added to the stock by having a great stock symbol. Let's look at one example which is interesting trivia in itself.
For many years, the stock symbol for Harley Davidson (HOG) was HDI. However on August 15, 2006, the company changed its symbol to HOG, which is a term that is closely associated with Harley, and is also the abbreviation for the Harley Owners Group. If we look t the performance of the stock for the five month previous to the symbol change from May 15 to August 15, the stock was up only 14.7%; however for the five months subsequent to the stock symbol change, the stock was up 28.3%, almost double the return.

Author owns HOG.

Top Selling Wall Street and Stock Market Domain Names

There is a website called dnsaleprice.com which provides a database of sales of domain names, and shows the sales price, the sales date, and who handled the sale. It allows you to search by keywords.
The two highest with the keyword 'stock' were StockQuotes.mobi and StockTickers.com, which sold for $27,000 each, both of which sold in October of last year. WallStreet.com was sold for $1,030,000 in May of 1999. The top domain with the word 'investment' was ForeignInvestments.com, which sold for $8,000. Interestingly, a typo domain, at least it looks like a typo domain to me, InvestmentFonds.info, sold for $5,673. The top two sales for domains with 'bonds' as a keyword were JunkBonds.com at $8,090 and BondPrice.com at $5,100.

Highest Yielding Soft Drink Stocks

On January 25, the Board of Directors for Coca-Cola Bottling Co. Consolidated (COKE) declared a dividend for the first quarter of 2007 of $.25 per share. The company’s dividends have been paid every quarter since 1990. Many of the non-alcoholic beverage company stocks pay dividends, a couple of which pay a yield of over 2%. Most have been consistent dividend payers for many years. Here are the top soft drink dividend payers, sorted by yield.

Coca Cola (KO) 2.6% One of the largest manufacturers, distributors, and marketers of nonalcoholic beverage concentrates and syrups in the world.

PepsiAmericas Inc. (PAS) 2.3% Pepsi, Diet Pepsi, and Mountain Dew. Distributes in United States, Central Europe, and the Caribbean.

Cadbury Schweppes Plc. (CSG) 2.1% Dr.Pepper, Schweppes, 7 Up, Snapple, Mott's, Hawaiian Punch, Clamato, and Schweppes Tonic Water. Founded in 1783.

Pepsico, Inc. (PEP) 1.9% Manufacturer of Mountain Dew, Diet Pepsi, Gatorade, Tropicana Pure Premium, Aquafina water, Sierra Mist, Mug, Tropicana juice drinks, Propel, SoBe, Slice, Dole, Tropicana Twister, and Tropicana Season’s Best.

Coca-Cola Bottling Co. Consolidated (COKE) 1.5% distributes and markets carbonated and noncarbonated beverages, primarily of The Coca-Cola Company. Distributes in North Carolina, South Carolina, West Virginia, Alabama, Mississippi, Tennessee, Kentucky, Virginia, Pennsylvania, Georgia, and Florida.

Pepsi Bottling Group (PBG) 1.4% Bottler of Pepsi-Cola, Diet Pepsi, Mountain Dew, Aquafina, Lipton Brisk, Sierra Mist, Diet Mountain Dew, Tropicana Juice Drinks, SoBe, and Starbucks Frappuccino. Distributes in United States, Canada, Spain, Greece, Russia, Turkey, and Mexico.

Coca Cola Enterprises (CCE) 1.2% Coca-Cola classic, Diet Coke, Sprite, Dasani, Fanta, Schweppes, and caffeine free Diet Coke. Distributes in North America, Great Britain, France, Belgium, the Netherlands, Luxembourg, and Monaco.

Coca-Cola Hellen ADS (CCH) 1% Athens, Greece based company. Distributor of Coca Cola products in Europe.

Embotell Andina SA (AKO-A) 1% Santiago, Chile based company. Distributor of Coca-Cola products in Chile, Brazil, and Argentina.

Coca Cola Femsa SA (KOF) .8% Distributor of Coca Cola products in Mexico, Central America, Colombia, Venezuela, Argentina, and Brazil.

Author owns KO and KOF.

Sunday, January 28, 2007

Geothermal Stocks Heating Up

In previous articles, I've written about several types of alternative energy stocks, including solar energy stocks, wind energy stocks, ethanol stocks and flywheel stocks. Today I'm writing about an alternative energy that hasn't received much press coverage: geothermal stocks. Geothermal generation utilizes natural underground heat sources to powering a turbine which drives a generator. Geothermal comes from the Greek words geo, which means earth, and therme, meaning heat. The litertranslationion of geothermal is "earth heat". And as it turns out, several of these geothermal stocks are heating up.

Calpine Corporation (CPNLQ.PK) Founded in 1984, this San Jose based company provides electricity in the United States and Canada through the ownership and operation of its own power generation plants. They own 19 geothermal power plants at The Geysers in California.

Constellation Energy Group (CEG). This 1906 electrical generating company owns and operates generating plants and fuel processing facilities utilizing various types of fuel including nuclear, coal, natural gas, oil, solar, geothermal, hydro and biomass. Yield is 2.1%.

IdaCorp, Inc. (IDA) This holding company owns Idaho Power Company (IPC), which is involved in the generation, transmission, distribution, and sale of electric energy primarily in southern Idaho and eastern Oregon. Their electrical generation comes from hydroelectric, natural gas, diesel, coal, and geothermal plants. The stock yields 3.3%.

Nevada Geothermal Power, Inc. (NGLPF.OB) This company explores for and develops geothermal projects in the United States to provide electrical. They own a 100% leasehold interest in the Blue Mountain, Pumpernickel, Black Warrior projects in Nevada and the Crump Geyser Project in southern Oregon.

Ormat Technologies Inc. (NYSE: ORA) This Nevada based company traded on the New York Stock Exchange and founded in 1965, owns, and operates geothermal power plants, selling electricity in the United States, Guatemala, Kenya, Nicaragua, and the Philippines. They also provide products and services to other geothermal power generators.

PG & E Corp. (PCG) This California-based electric and gas utility serves 5 million customers. Their electrical generation comes from natural gas, nuclear, hydro, coal, geothermal, wind, and several other types of renewable sources. Yields 2.9%.

Polaris Geothermal (PGTHF.PK) The company is a developer of renewable energy in Latin America. They are currently developing a 66 MW geothermal project on its San Jacinto Tizate concession in Nicaragua.

Raser Technologies (RZ) This Utah based company traded on the New York Stock Exchange Arca exchange, and founded in 2003, develops high performance electric motor and controller technology. In addition, it has secured geothermal rights to certain Nevada properties owned by Truckee River Ranches, LLC, under the terms of a 50-year lease agreement.

Sierra Geothermal Power Corp (SRAGF.PK) – Sierra Geothermal is a developer of renewable power from geothermal sources. The have investments in 15 geothermal projects located in Nevada and California. Sierra has also recently completed an approximate $5 million private placement.

US Geothermal Inc. (UGTH.OB) This Boise based company, founded in 2002, is involved in the development of geothermal energy power plants in the Raft River area of Idaho.

Western GeoPower Corp (WGPWF.PK) The company develops geothermal energy projects. They own the Unit 15 Steam Field located in The Geyser Geothermal Field in California, United States and in the South Meager Geothermal Project in British Columbia, Canada.

WFI Industries (WFILF.PK) This Fort Wayne, Indiana company is development and manufacture of geothermal heating and cooling systems, for both residential and commercial customers. The company has paid quarterly dividends since September 2003, and currently yields 2.2%. The stock is up over 60% during the last year.

Author does not own any of the above at this time.

Wednesday, January 24, 2007

Top Gainers on the NYSE

Everyone has been focusing on the large NASDAQ gains on Wednesday, January 24, but the New York Stock Exchange has also done quite well, up about 88 points for the day over a previously strong day on Tuesday. The largest gainers by percentage gain on the NYSE for Wednesday are as follows:

Transdigm Group (TDG) 12.4% aircraft components
Corning (GLW) 10.9% display technology
A V X Corp. (AVX) 9.8% electronic components
Salton Inc. (SFP) 9.3% small appliances and personal care products
Hancock Fabric (HKF)8.4% fabric and sewing accessories

Author does not own any of the above.

Seven Companies Announce Stock Buybacks Today

When a company has a buyback, it means that the company is going out and buying shares of their own company on the open market. This is generally very bullish for stocks, since it shows confidence by executives in their own companies, it reduces the number of shares outstanding making them scarcer [scarcity causes price increases], and it means that the earnings and dividends are split up among fewer shares, benefiting the remaining shareholders. An article in TheStreet.com lists all the buybacks that were announced for the last month and a half. Here are the announcements today [January 24]:

Bank of America (BAC)
Cypress Semiconductor (CY)
East West Bancorp (EWBC)
eBay (EBAY)
FreightCar America (RAIL)
Rome Bancorp (ROME)
Varian (VARI)

Author owns EBAY.

eBay has more Business in Britain than any other Country

You are probably already aware that eBay (EBAY) was up about 18% today [January 24] including after-market trading, but what you probably didn't know is that eBay gets more business per capita from Britain than any other country in the world, including the U.S. Approximately $98 per year is traded per person per year on eBay in the United Kingdom.

Author owns EBAY.

400% Return! Minimum Investment: One Penny

Did everyone pay attention when I wrote the article last month about the melting value of pennies being worth more than the face value of the penny. The government was so concerned that they also put a restriction on the export of the coins.

Now the Fed is talking about 'rebasing' the penny, by changing the value of it from one cent to five cents. Hoarders are already stockpiling pennies as a speculation. If this proposal goes through, that would be a pretty substantial return on a one cent investment.

Tuesday, January 23, 2007

Large US Companies Expanding into Bangalore

Hewlett-Packard (HPQ), Dell (DELL), IBM (IBM), Accenture (ACN), Intel (INTC) and over 500 large international corporations have set up operations in Bangalore, India.

Bill Gates, Michael Dell, Larry Page, Sergey Brin, Claudia Schiffer and Bono Meeting in Switzerland

Bill Gates founder of Microsoft (MSFT), Michael Dell founder of Dell (DELL), Larry Page and Sergey Brin founders of Google (GOOG), Claudia Schiffer and Bono are just a few of the famous who are meeting in Davos, Switzerland at the World Economic Forum 2007 from January 24 to January 28. The purpose of the forum is to "contribute towards solving the problems of our age".

Unilever in Trouble for Sending Knives to Families

Unilever NV (traded on the New York Stock Exchange under the symbol UN), the consumer goods and personal products company which is traded on the New York Stock Exchange, got into trouble for sending out knives to 200,000 homes in the Netherlands, since many children were hurt from the knives in the package.

Coal Stocks Heating up in the Last Few Days

In case you didn't notice, every major coal stock, except one, was up significantly today, January 23, and some some of them were up as much as 3%. Not bad for a one day move. They have all started to move up in the last few days. Some are attributing this to the cold weather. But it is most likely more than that. In a previous article, I discussed the use of coal by electric utilities. With more than 70% of all utilities using coal to run their generators to produce electricity, the demand for coal is significant. The following is a list of the major coal stocks. Fording Canadian Coal Trust (FDG) is excluded from the list because it is a Canadian trust that I will be covering in an upcoming article on publicly traded trusts. You will notice that coal producers are not really high dividend payers [with the exception of Yanzhou Coal Mining and Fording Canadian Coal Trust], but I have included the yields for your review. If the current PE is not listed, it means recent earnings are negative.

Arch Coal Inc. (ACI) mines, processes, and markets bituminous and sub-bituminous coal with low sulfur content. PE=24. Yield .8%

CONSOL Energy Inc. (CNX) mines and markets steam coal. PE=17. Yield .8%

Foundation Coal Holdings Inc. (FCL) extracts, cleans, and sells coal to electric utilities, steel producers, and other industrial companies. PE=18. Yield .6%

International Coal Group, Inc. (ICO) produces, processes, and sells steam and metallurgical coal. No dividend.

James River Coal Co. (JRCC) mines, processes, and sells bituminous, steam, and industrial-grade coal. No dividend.

Massey Energy Co. (MEE) produces, processes, and sells steam and metallurgical grade bituminous coal. Yield .7%

National Coal Corp. (NCOC) mines, processes, and sells bituminous steam coal. No dividend.

Peabody Energy Corp. (BTU) has ownership interests in 36 coal operations. PE=19. Yield .6%

Westmoreland Coal Co. (WLB) produces and sells coal from surface mines to electric utilities. PE=38. No dividend.

Yanzhou Coal Mining Co. Ltd. (YZC) This Chinese company mines, and sells coal in China and Australia. PE=14. Yield 2.8%.

Author does not own any of the above.

Is Your Portfolio Ready for Vista? Is Your Computer?

Many investors believe that the release of the Vista Operating System should help the Microsoft (MSFT) stock. In addition, some investors believe that the retailers of computers, such as Dell (DELL) and Hewlett-Packard Co. (HPQ), are the better buy because businesses and individuals will have to upgrade their computers in order to run Vista.

But the question remains, are you ready for Vista? The easiest way to check is to go to the Windows Vista Upgrade Advisor which will have you download a program to determine whether your computer can run Vista and will provide a report of all known system, device, and program compatibility issues.

Author owns MSFT.

Monday, January 22, 2007

Puerto Rico Stocks: A Passport to Riches?

In a recent article on Yahoo about the new passport regulations, it discussed the benefit that Puerto Rico and the U.S. Virgin Islands would receive. In the past, visitors to the non-US Caribbean islands, Canada, and Mexico could travel with just an American Drivers License. However, beginning February 23, American travelers to those nations would require a U. S. passport in order to return to the United States. The Caribbean islands are anticipating economic devastation.

On the other hand, a boom is expected for the travel business and economy of the U.S. territories in the Caribbean, which include the Commonwealth of Puerto Rico and the United States Virgin Islands, consisting primarily of the islands of St. Thomas, St. John, and St. Croix. [Trivia: What is the only part of the United States where traffic drives on the left? U.S. Virgin Islands.] Because they are considered part of the United States, American tourists don't need a passport to travel in those locales.

So if the Puerto Rican economy benefits from the new Passport law, does that mean that the Puerto Rican stocks should benefit? Most of the publicly traded companies in Puerto are banks or bank holding companies which have the same risks that all United States banks have. There is also the "risk" of Puerto Rico becoming independent, which may not even be a risk at all. The economy on the island has been shaky since May of 2006, when they experienced the first partial shutdown of the government in Puerto Rico's history. But if you are willing to accept the risks, then here is a list of Puerto Rican stocks to review, most of which are traded on the New York Stock Exchange [NYSE stocks listed first].

First BanCorp (FBP) banking
Doral Financial Corp. (DRL) mortgage banking, banking, institutional securities, insurance
Oriental Financial Group Inc. (OFG) banking, insurance
R&G Financial Corporation (RGF) banking, mortgages
Santander Bancorp (SBP) banking, asset management, insurance
W Holding Co. Inc. (WHI) banking, insurance
Popular Inc. (BPOP) banking, leasing, insurance
Equus Gaming Co. (EQUUS.PK) thoroughbred racing
Margo Caribe Inc. (MRGO.PK) tropical plants and trees

EU Law May Impair Online Sales

A proposed law may require British businesses who sell online to comply with the laws of all 27 member countries of the European Union.

Starbucks an Insult to Chinese Culture

Chinese protesters are trying to shut down the Starbucks (SBUX) restaurant in the China Palace Museum in Beijing's Forbidden City. Starbucks has been there since the year 2000.

Sexy Stocks

The adult entertainment industry is anywhere from a $10 billion to a $20 billion industry, depending what source you refer to. According to freespeechonline.org , the adult entertainment industry generated $12.6 billion in 2005, with the adult Internet businesses growing 150% since 2002.
There are several ways to play in this sexy industry. The most famous company in this arena is Playboy (PLA) which is involved in most aspects of the industry including video and DVD’s, television shows, documentaries, Internet entertainment, e-commerce sites, and numerous Playboy brand products. They also own the Spice brand of TV shows and products. Other companies allow you to invest in more targeted areas of the industry including gentlemen’s clubs, video producers, and television broadcasting. A couple of the stocks were up over 34% for the last half of last year.
Check out these hot stocks before investing because you don’t want to get screwed. It’s hard to know when to cock your gun and pull the trigger on these stocks since the prices of some of them have become engorged during the last six months. Let’s hope that the investors continue to get lucky and the bubble in these stocks hasn’t been pricked, otherwise they may go down with a bang.

Here is the hot stock list:

Playboy (PLA) This New York Stock Exchange company was founded by Hugh M. Hefner in 1953 in Chicago Illinois with a $600 loan. Playboy Corporation grew to become the largest adult entertainment conglomerate in the world, with divisions covering magazines, clubs, clothing, web sites, television channels, and videos. It has a forward P/E of 23 and a Price/Sales Ratio of 1.13. The company is run by Christie Hefner, daughter of Hugh. The stock was up over 14% for the last six months of 2006.

New Frontier Media (NOOF) This Boulder, Colorado based company, traded on NASDAQ, provides adult entertainment TV networks, cable television video-on-demand, satellite broadcasts, motion pictures and hotel room broadcasts. It has a forward P/E of 17 and a Price/Sales Ratio of 4.2. The stock was up over 34% for the last half of 2006.

LodgeNet Entertainment (LNET) This NASDAQ traded Sioux Falls, South Dakota company provides television broadcasts to hotels in the U.S. and internationally, including on-demand movies which include mature audience entertainment. It has a forward P/E of 143 and a P/S of 1.6. The stock was up over 34% for the last half of 2006.

Private Media Group (PRVT) This adult media company is based in Barcelona, Spain. The company, which was founded in 1980, produces magazines, videos, DVD’s and movies for broadcast television, cable, satellite, and the Internet. The stock has a very high P/E of 140 and a P/S of 5.

Rick's Cabaret International (RICK) This Houston based company operates adult nightclubs in cities throughout the United States including Houston, New York, New Orleans, Charlotte, and Minneapolis. P/E is 22 and Price Sales is 1.65.

Million Dollar Saloon Inc. (MLDS.PK) Operates an adult cabaret in Dallas, Texas. The company was founded in 1982.

Scores Holding Co. Inc. (SCRH.OB) This New York City based company licenses its trademark to adult oriented nightclubs. P/E of 1.88 and a P/S of .9.

Interactive Brand Development Inc. (IBDI.OB) The company, based in Deerfield Beach, Florida, provides online payment processing services for adult entertainment companies. They also own a part interest in Penthouse Media Group, and an adult TV network.

Author owns RICK.

Friday, January 19, 2007

Inflation Proof Postage Stamps: An Investment?

This spring, the United States Postal Service is planning on releasing what it is calling Forever Stamps, which are inflation proof postage stamps that can be used anytime forever for first class one ounce postage, even if rates go up to $1 per ounce or $10 per ounce. So whether you are a small business that does a lot of mass mailouts, a consumer who pays a lot of bills by mail, or even an autograph collector who sends out stamped self addressed envelopes to movie stars and worries about getting a response a year later after rates have gone up and the envelope being returned to the actors, these stamps could be for you. Now if the post office would offer a similar type of postage for bulk rate Forever postal permits, that would be a boon to large businesses.

Notable Business Quotes

Emily Brown Bloomberg.com released the Notable Business Quotes for the week. I especially liked:

``The tepid forecasts spooked people.''
Portfolio manager Warren Simpson at Stephens Capital Management

``They are in the sweet spot of the economy.''
Roger Kubarych, chief U.S. economist at Unicredit HVB

Flywheel Stocks: An Obscure Alternative Energy


I’ve covered several types of alternative energy stocks in previous articles, including solar energy stocks, wind energy stocks, and ethanol stocks. Today, I’m covering a fairly obscure type of alternative energy called flywheel storage energy. Flywheels are rotating disks that are used to store kinetic energy. Flywheels have recently become popular in the Uninterruptible Power Supply (UPS) business for short term power outages and research has been done into its use for automobiles. There are several advantages to the flywheel technology over the lead-acid batteries in UPS’s, including higher efficiency, a longer lifespan, and a smaller size, not to mention the reduction in safety and disposal issues that exist with the lead-acid battery UPS's.

The universe of flywheel stocks is small, with only two publicly traded companies, both of which trade on NASDAQ. The older of the two companies is Active Power Inc. (ACPW) which was founded in 1992 and is based in Austin, Texas. They manufacture and sell power products that are battery free such as their CleanSource UPS, a battery-free uninterruptible power supply utilizing flywheel technology. The company is debt free with year-over-year quarterly revenue growth of 27%.

Beacon Power Corp. (BCON) was founded in 1997 and is based in Wilmington, Massachusetts. Their primary product is Smart Energy matrix, a flywheel-based energy storage system used by electrical utilities for electric grid regulation. This company is also debt-free but has a 9% year-over-year revenue reduction.

Author does not own either of the above.

Plenty of Foreclosures Available for Real Estate Investors

If you are thinking of investing in real estate and you thing the real estate market is near a bottom, there are plenty of opportunities available for you, either on a pre-foreclosure basis (where you buy the property from the owner before it goes into foreclosure), auctions, and bank owned properties (also known as REO's or Real Estate Owned properties).
Fortunately for the investor (and unfortunately for the homeowners), there are thousands and thousands of properties that are available in these categories. At RealtyTrac.com, they provide an outstanding service which allows you to search by city or zip code, and find all the available properties broken down by the various categories (pre-foreclosures, auctions, etc.). Then for every property, it lists the address and the number of bedrooms and bathrooms, and when you click on the property you are interested in, it shows square footage, lot size, year built, a map showing where the property is, history of notices, estimated property value range, estimated property market value, and much, much more.
One of this nice features about this website is that it can give you an idea of how foreclosures are trending across the country and from city to city. For example, even though Los Angeles is a far bigger city than San Diego, San Diego has more bank owned properties for sale than LA. Chicago has 13,529 pre-foreclosure properties for sale whereas Houston has only 3. However, Houston has many more bank owned properties (5,513) than Chicago (4,164). (Maybe Texas is much more strict on how long a property can stay in pre-foreclosure?) Boston's auctions and bank owned properties were extremely low compared to the other major cities.
The following table should give you a good idea of the number of foreclosures across the United States.

City..........Pre-Foreclosure...Auction..........Bank Owned
San Diego.........1,709..............339..............1,174
Los Angeles......2,494..............442..............1,107
Houston................3............1,933..............5,513
Memphis............289............2,007..............3,540
Miami..............6,316............1,804..............2,313
Boston...............566...............64................171
Chicago.........13,529............4,633..............4,164

Thursday, January 18, 2007

Lucent Closed at over $1000 per Share Today

Yes, you read that right. Lucent, the voice, data, and video communication services company, closed at $1,037.50 per share Thursday, January 18. You didn't think this was the Lucent common stock that used to trade on the NYSE under the symbol LU, nor is it the Alcatel-Lucent (ALU) stock which is the result of the merger between French communications company Alcatel with Lucent. Of course, I'm talking about Lucent's preferred stock, with the official name of Lucent Technologies Capital Trust I (LUTHP.OB). This is a 7.75% Cumulative Convertible Trust Preferred Security which was first issued in 2002. During the last year, it had a low of 935.00 and a high of 1,100.00.

Tuesday, January 16, 2007

Best Selling Investment Books according to Amazon

Stocks Category

Jim Cramer's Real Money: Sane Investing in an Insane World
by Jim Cramer

The Essays of Warren Buffett : Lessons for Corporate America
by Warren E. Buffett, Lawrence A. Cunningham

The Little Book That Beats the Market
by Joel Greenblatt

The Neatest Little Guide to Stock Market Investing (Revised Edition) (Neatest Little Guide to Stock Market Investing)
by Jason Kelly

The Second Great Depression
by Warren Brussee

Real Estate Category

The Wall Street Journal. Complete Real-Estate Investing Guidebook
by David Crook

Rich Dad's Advisors®: The ABC's of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss (Rich Dad's Advisors)
by Ken McElroy

Rich Dad's Real Estate Advantages: Tax and Legal Secrets of Successful Real Estate Investors
by Sharon L. Lechter, Garrett Sutton

Find It, Fix It, Flip It!: Make Millions in Real Estate--One House at a Time
by Michael Corbett

The Pre-Foreclosure Property Investor's Kit: How to Make Money Buying Distressed Real Estate -- Before the Public Auction
by Thomas Lucier

Cigarette Stocks are Smokin'

But are they good for your financial health? Last year, all the major tobacco companies were up, and a couple of them, Gallaher Group plc (GLH) and Carolina Group (CG), were up over 50% for the year. In addition, all the big cigs pay dividends of over 2%. Here is the list sorted by highest yield first:

Vector Group Ltd. (VGR) 9% yield, based in Miami Florida, Brands include: Liggett Select, Eve, Jade, and Quest.

Reynolds American Inc. (RAI) 4.7%, Winston-Salem, NC; Camel, Winston, Kool, Salem, Doral, More, and Now.

Altria Group Inc. (MO) 3.9% headquarters in New York City; owns Kraft Foods, Philip Morris USA, Philip Morris International and Philip Morris Capital Corporation.

British American Tobacco plc (BTI) 2.9%, based in London; Kent, Dunhill, Lucky Strike, Pall Mall, Vogue, Viceroy, Rothmans, Kool, Benson & Hedges, State Express 555, Peter Stuyvesant, and John Player Gold Leaf.

Gallaher Group plc (GLH) 2.8%, based in United Kingdom; Benson & Hedges, Hamlet, LD, Mayfair, Memphis, Old Holborn, Ronson, Silk Cut, Sobranie and Sovereign.

Carolina Group (CG) 2.7%, New York based; Kent, True, Maverick, and Old Gold.

Author does not currently own any of the above stocks.

Do Cable Stocks Pay Dividends?

Surprisingly, the largest cable company, Comcast (CMCSA) and the second largest in the U.S., Cablevision Systems Corp. (CVC), do not pay dividends. However, several of the other non-U.S. companies pay a dividend.

The highest yielding cable stock is i-CABLE Communications Ltd. (ICAB), a Hong Kong based company that has paid dividends for the last four years and currently yields about 4.5%.

Second highest is Shaw Communications, Inc. (SJR), a Calgary Canada based company that pays 2.3% and has paid dividends since 1998.

Third on the list is British Sky Broadcasting Group plc (BSY), a UK company that pays 2.3%. They have been paying their dividends since 1995. This is one of the largest companies on this list in terms of market cap.

Next is Naspers Ltd. (NPSN), which in addition to television, is also heavily involved in print media. This South African based company yields .7%. Dividends paid since 2003.

Finally, Net Servios de Comunicao (NETC), based in Brazil yields .4%.

Author does not currently own any of the above stocks.

What Stock Has Increased their Dividend over 50 Years in a Row?

According to the Atlanta Journal-Constitution, Genuine Parts (GPC) has increased their dividend every year for 51 years. Genuine Parts is in the business of distributing automotive parts, industrial replacement parts, office products, and electronic materials. Anyone know of stocks with dividend increases over a longer period of time?

Corn Trading at Highest Price in 10 Years: Ethanol?

According to a BBC article, the price of corn is the highest it's been in 10 years. Is this due to the increased production of ethanol? Probably, according to an article in Agriculture Online, however, they say that higher prices won't continue. I posted an article a month ago on ethanol stocks.

Sunday, January 14, 2007

Apple Stock Price MacWorld Expo Correlation DOES IT AGAIN: “Predicted” by Stockerblog

Back in February 27, 2006, I posted the “MacWorld Expo Apple Stock Price Indicator” article about the stock trend of the rising price of Apple Computer stock as the San Francisco MacWorld Expo convention approaches. Then again, on December 17, 2006 I posted the “Update: MacWorld Expo Apple Stock Price Correlation” article, in which I updated the price of Apple stock at that time. Both articles described how in the previous four out of the last five years, Apple Computer stock (AAPL) has increased by at least 8% and as much as 37%, measured from November 15 to the last day of the Expo in January.
This year, the stock did it again, up about 13% from November 15 to the last day of the Expo on January 12. The overall average for the last six years during this two month time frame was an increase of 14%. Several of the factors that probably contributed to this trend include strong year-end sales of Apple products from holiday shopping, anticipation and release of new products to be released at the Expo and the heavy promotion of the MacWorld Expo which is indirect stock promotion. In other words, the product buzz created the stock buzz.
The Expo this year was very successful and packed with attendees. I attended during the last hour of the last day of the show, expecting to find the place half empty with exhibits shutting down. I discovered the exact opposite. People were lined up to get in the John Lennon Bus, hundreds of yelling and screaming attendees were surrounding an exhibit that was throwing out free T-shirts [I couldn’t even get close enough to see what company it was], and it was standing room only at all the software demonstrations. The number of companies with exhibits there that make peripheral equipment for Apple products, software for Macs, books and training courses for software for Apple items, and other related products and services was substantial. The industries that revolve around Apple Inc. are tremendous. People didn’t start leaving until way after closing time when they started turning the lights down.
So here is how the Expo buzz performed. The following table shows the results since 2001. A few notes about this analysis. This just looks at the 'effect' of the MacWorld Expo in San Francisco, not New York or Boston. If a date fell on a weekend, it was moved to the next business day to determine pricing. All prices were adjusted for splits and all returns rounded to the nearest percent.

11/15/2001 ...... 9.73 ..... 1/11/2002 ..... 10.52 ....... 8%
11/15/2002 ...... 7.97 ..... 1/10/2003 ...... 7.36 ...... -8%
11/15/2003 ..... 10.56 ...... 1/8/2004 ..... 11.50 ....... 9%
11/15/2004 ..... 27.62 ..... 1/14/2005 ..... 35.10 ..... 27%
11/15/2005 ..... 62.28 ..... 1/13/2006 ..... 85.59 ..... 37%
11/15/2006 ..... 84.05 ..... 1/12/2007 ..... 94.62 ..... 13%
Average Return .................................................. 14%

Keep in mind that past performance is not a guarantee of future results. No recommendation is expressed or implied.

Author owns AAPL.

Saturday, January 13, 2007

Teaching Your Kids About the Stock Market

Encourage your kid's teachers and schools to sign up for the The Stock Market Game which is run by the non-profit Foundation for Investor Education. It's designed for older elementary, middle school and high school students. Kids will learn math, economics, research, finance, and more, much of which will be important to them when they are adults.

Friday, January 12, 2007

3rd Highest Priced Stock Just Paid a $100/share Special Dividend (in addition to their $75/share quarterly dividend)

Yes, you read that correctly, a bank stock paid a $100 special plus their regular quarterly dividend of $75 per share, paid January 2, 2007 to shareholders of record December 1, 2006. Obviously, to pay dividends like this, the price per share would be very high, and this company is definitely a member of the "high priced share club." A couple of websites, stockmarkettrivia.com and investmenttrivia.com, list several high priced stocks that trade for over $1,000 per share. In addition, back in November, I posted an article on Highest Priced Shares.
So what is the name of the stock? Mechanics Bank (MCHB.OB), which is number three on my list [after Indians Inc. (INDN.PK)], or number two [after Berkshire Hathaway (BRK-A)] if you only look at the stocks that are traded fairly regularly, as Indian Inc. hasn't traded since November 1.
Back to Mechanics Bank, based in Richmond California, which closed at $19,600 per share today [1/12/07] on a volume of 6, not 600 or 6000 but 6, down $10 from yesterday. The stock is up from $18,750 from January of 2006, the low for the year. They have paid $75 per quarter PLUS a $100 special dividend every year for the last four years.
Profit margin for the bank is approximately 23% and operating margin is about 49%. Interestingly, total non-accrual loans represented only .01% of total loans. The stock is trading at 1.4 times book value per share.

Currently author does not own any of the above.

Thursday, January 11, 2007

Low Priced Coal Fires Up Utilities


Yesterday, I wrote an article about the effect of the price of oil on certain utility stocks. Today, I am writing about how coal can have a similar effect on a much larger group of utilities.
As you can see from the chart courtesy of the Energy Information Administration division of the U. S. Department of Energy, the NYMEX price of Central Appalachian Coal Futures is the lowest it's been in the last three years. You will notice that the tiny orange line on the left next to the $40 and trending downward, is lower than the blue 2004 line, the purple 2005 line, and the green 2006 line [with the exception of a short period in November].
As of the end of last week, the price per ton was $38.75, far below its high of $63 back in August and Septmber of 2004.
So what does this mean for utility stocks? Since more than half of all utilities use coal for electrical generation, the fuel cost reduction can cause a major savings in expenses for the companies. The following is a list of electrical utilities which use coal as a fuel to generate at least 40% of their electricity [the ones with very high coal generated electricity have been noted].

Ameren Corporation (AEE) [over 85%]
ALLETE Inc. (ALE)
Allegheny Energy Inc. (AYE) [over 75%]
CMS Energy Corp. (CMS)
DPL Inc. (DPL)
DTE Energy Co. (DTE) [over 70%]
Duke Energy Corp. (DUK)
Firstenergy Corp. (FE)
Great Plains Energy Inc. (GXP) [over 70%]
Aquila Inc. (ILA)
MDU Resources Group Inc. (MDU) [over 70%]
MGE Energy Inc. (MGEE)
Nisource Inc. (NI) [over 85%]
OGE Energy Corp. (OGE)
Otter Tail Corp. (OTTR)
PNM Resources Inc. (PNM) [over 70%]
SCANA Corp. (SCG)
Southern Co. (SO)
TECO Energy Inc. (TE)
Unisource Energy Corp. (UNS)
Wisconsin Energy Corp. (WEC)
WPS Resources Corp. (WPS)
Westar Energy Inc. (WR) [over 75%]
Xcel Energy Inc. (XEL)

Hedge Funds are now Investing in Movies

Crossing Wall Street has an interesting article, Hollywood & Hedge Funds, about how hedge funds have been investing in and losing money in hedge funds.

Stock Market Stock Symbol Trivia = LABL

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol LABL ?

Answer:

Multi-Color Corporation a supplier of decorative label solutions and packaging services.

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

How About Buying Your Own Country as an Investment?


The country of Sealand, considered by many to be the smallest "legitimate" country is now up for sale. It is located seven miles off the east coast of England. The average population is about 10 and its area is 1800 sq. ft.

Wednesday, January 10, 2007

Electric Utilities that Benefit from Lower Oil Prices

Utilities generate their electricity using various sources of fuel including coal, oil, gas, hydro, nuclear, wind, thermal, and even wood. Some utilities, such as Consolidated Edison Inc. (ED), Energy East Corp. (EAS), and Northeast Utilities (NU), purchase some or even all of their energy from other power generators. Many years ago, oil seemed to be the fuel generation of choice for a large number of utilities but now, utilities utilize fewer oil based generators. There are still a few electric utilities which have a substantial portion of their power generated from oil, and they are the ones who would benefit the most from the reduction in the drop of the price of oil [i.e. their generator fuel costs]. The utilities which have a significant portion of their generating sources from oil and their fuel sources are the following.

FPL Group (FPL) 63% oil, 13% purchased, 24% nuclear/coal/wind
Hawaiian Electric Industries (HE) 61% oil, 39% purchased
Progress Energy (PGN) 35% oil, 34% nuclear, 30% coal
Empire District Electric (EDE) 26% oil, 43% coal, 30% purchased
Entergy Corp. (ETR) 21% oil, 34% purchased, 33% nuclear

Oldies but Goodies: How Old Companies Outperformed

Recently, I published an article on water utility stocks, almost half of which were over a century old. Some investors consider old companies as stodgy and has-been's. However, if you look at the performance of five of the oldest publicly traded companies for last year, you would find otherwise. The average return for the 'old five' was 13%, beating the NASDAQ and the S&P 500 for 2006.
The oldest company on the list is Bowne & Co. (BNE), the financial printing company founded in 1775, which had a return of 9% for the year. The best of the oldies is Bank of New York Company, Inc. (BK) founded 1784, up 24%. Here is the list:

Bowne & Co. Inc. (BNE) 9% Founded 1775
Bank of New York Company (BK) 24% Founded 1784
Washington Trust Bancorp (WASH) 11% Founded 1800
Valspar Corp. (VAL) 12% Founded 1806
York Water Company (YORW) 8% Founded 1816

Sales for Homebuilder Stocks are Down Significantly

The Wall Street Breakfast at SeekingAlpha.com reported on the news about homebuilder companies, D.R. Horton and Meritage, having substantially lower sales. Is the air leaking out of this real estate bubble faster than we think?

How to Invest in Domain Names through the Stock Market

You may have read about how the domain name business.com sold for $7.5 million, and even the misspelled word mortage.com recently sold for $242,000. Suppose you've tried to register some domain names as investments for yourself, but found that all the good ones were taken. There are a few publicly traded companies, such as VeriSign (VRSN), that will actually be a play on the domain name market. For a list of these stocks, check out James Altucher's article.

Author does not own VRSN at this time.

Tuesday, January 09, 2007

$1 a Year Salary for CEO: Good for Stocks?

It may be hard to believe, but there are several Chief Executive Officers of publicly traded companies that are paid salaries of only one dollar a year. Obviously, they are compensated in other ways, usually through stock options or restricted stock. However, having that compensation gives the CEO’s very, very strong incentives to make sure the company does well and which would in turn help the price of the stock.
Some of the well known executives who are members of the “buck a year club” include Steve Jobs, founder and CEO of Apple Computer (AAPL) and Sergey Brin, Larry Page, and Eric Schmidt at Google (GOOG).
When analyzing the returns of six of these dollar a year stocks for the year 2006, it turns out that they were all up, with the exception of Yahoo (YHOO), and if you exclude Yahoo from the list, the average return for the group was up 14%, higher than the return for the NASDAQ at 8% and the S&P 500 at 12%. Yahoo probably should have been excluded since Terry Semel was paid at an annual rate of $600,000 per year for five months during 2006, according to Yahoo’s 10-Q Report. The following list shows six of the largest companies with dollar-a-year CEO’s.

Apple (AAPL) 13% Steve Jobs
DreamWorks (DWA) 18% Jeff Katzenberg
Google (GOOG) 6% Sergey Brin, Larry Page, Eric Schmidt
Kinder Morgan (KMI) 16% Rich Kinder
Univision (UVN) 18% Jerrold Perenchio
Yahoo (YHOO) -38% Terry Semel (1)

(1) In May 2006 the Committee approved a $1 base salary rate for Mr. Semel for the period from June 1, 2006 through December 31, 2006, as well as for each of calendar 2007 and calendar 2008. For the period from January 1, 2006 through May 31, 2006, Mr. Semel was paid at his 2005 rate of base salary, $600,000 annually.

Author owns AAPL, GOOG, and YHOO.

Google's Blogspot/Blogger Down Today

In case you had trouble accessing my blog today, the servers for Blogger also known as Blogspot, owned by Google (GOOG), were down for several hours today. I was unable to post, you were unable to view, because Stockerblog is hosted by Blogger. Fortunately, everything appears to be working now.

Monday, January 08, 2007

Wall Street Quotation of the Week

"Don't try to buy at the bottom and sell at the top. It can't be done except by liars."
Bernard Baruch (1870-1965) financier & economist

Be Careful with Your ATM Card

In case you haven't seen this in the recent past, your ATM card can be easily stolen.

http://tech.yahoo.com/blogs/null/10998

Want a Ride on a Spaceship? Cost: Only $200,000

Richard Branson, founder and CEO of Virgin Group and Virgin Atlantic Airways, has set up Virgin Galactic which will provide spaceships for passengers who want to go into outer space. Tickets are cheap at only $200,000.

Saturday, January 06, 2007

Top 14 Stocks on Message Boards

The stock with the most number of topics in Yahoo (YHOO) Message Boards in the Stocks category is Cisco Systems, Inc. (CSCO) at a total of 1,637,745 topics, about 60% more than the second highest which is Sirius Satellite Radio (SIRI) with 1,021,359 topics. The following list shows the top fourteen:
Cisco Systems, Inc. (CSCO) 1,637,745
Sirius Satellite Radio (SIRI) 1,021,359
Advanced Micro Devices (AMD) 454,850
Applied Digital Solutions (ADSX) 414,501
Google Inc. (GOOG) 379,499
Intel Corporation (INTC) 341,169
JDS Uniphase Corporation (JDSU) 333,334
Microsoft Corporation (MSFT) 331,115
Rambus Inc. (RMBS) 327,760
E*TRADE Group, Inc. (ET) 313,686
Elan Corp., plc (ELN) 311,087
Nortel Networks Corp. (NT) 309,160
Lucent Technologies Inc. (LU) 306,506
Apple Computer, Inc. (AAPL) 300,781

Author owns AMD, GOOG, MSFT, LU, and AAPL.

The Best NASDAQ Day of the Week for Investing is ...

If you look at the return on the NASDAQ on a day by day basis since 1971, comparing the previous day's close to the current day's close, you will find that on Fridays, the market was up more times than down (61% of the time), more than any other day of the week, meaning the "best time to invest" would be on Thursdays at the close. The day with the most down times was Monday, down 53% of the time from the previous Friday's close.
Remember, correlation does not mean causation, and coincidence does not mean correlation.

Water Utilities: Old Companies, New Opportunities

Last month, I posted articles about electric utilities and gas utilities. I am rounding out the group with a write-up on water utility stocks. One of the most unusual idiosyncrasies about this group of companies is that five out of the twelve are over 100 years old. The list below shows the stock name, symbol, yield, and the primary states that they serve.

BIW Ltd (BIW) 4.3% [Connecticut]
The highest yielding company in the list, BIW is a regulated public water service company serving the state of Connecticut.

Connecticut Water Service Inc. (CTWS) 3.7% [Connecticut]
This is another Connecticut water supplier company that was founded in 1956.

Middlesex Water Company (MSEX) 3.7% [New Jersey & Delaware]
This New Jersey based company is one of the oldies on the list, founded in 1897. It also provides wastewater services.

Artesian Resources Corporation (ARTNA) 3.4% [Delaware]
Artesian provides water and fire protection services in Delaware. Founded in 1905.

Pennichuck Corp (PNNW) 3.2% [New Hampshire]
This is the second oldest company on the list, which was started in 1852. It provides water to the southern half of New Hampshire.

California Water Service Group (CWT) 2.9% [California]
The San Jose based company serves over 2 million customers in California.

York Water Company (YORW) 2.6% [Pennsylvania]
Founded in 1816, this is the oldest company on the list and one of the oldest publicly traded companies.

American States Water Company (AWR) 2.4% [California and Arizona]
This company just received a rate increase from the California Public Utilities Commission. In addition to distributing water, they also provide electricity to some of their customers.

Aqua America, Inc. (WTR) 2.0% [PA, OH, NC et al.]
This company water in numerous states including Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Florida, Indiana, Virginia, Maine, Missouri, New York, and South Carolina.

Southwest Water Company (SWWC) 1.7% [California, Texas, and New Mexico]
This company has operations in Alabama, California, New Mexico, Oklahoma, Texas, Colorado, Georgia, Mississippi, New Jersey, and South Dakota.

SJW Corp (SJW) 1.40% [California]
Founded in 1866 [third oldest on the list], they provide water service to the Silicon Valley area. They just sold two parcels to Adobe Systems (ADBE) for $32,500,000.

Basin Water Inc. (BWTR) [California]
Although not technically a water utility as such, it designs and builds groundwater treatment systems. It does not pay a dividend.

Author owns CTWS and CWT.

Thursday, January 04, 2007

Commercial REIT's: Better than Residential REIT's?

Yesterday, Jim Cramer said on his Mad Money TV show that he likes commercial real estate investment trusts [REIT’s] as opposed to residential REIT’s. There are several types of commercial REITs including those that invest in office buildings, those that are retail oriented including shopping centers, and the industrial REITs, which can include warehouse, manufacturing, and mini-storage properties. There are also diversified REITs which invest in any or all of the above in addition to apartment buildings. Of course, one of the prime features of investing in commercial REIT’s is the high yield. The following is a list of commercial REIT’s with yields above five percent.

Pres Rlty Cp Cl B (PDL-B) 9.1% [Diversified]
Resource Cap Corp (RSO) 9.0% [Diversified]
Newkirk Realty Trust (NKT) 8.9% [Diversified]
Newcastle Inv Cp (NCT) 8.8% [Diversified]
RAIT Financial Trust (RAS) 8.7% [Diversified]
Northstar Rlty Fin (NRF) 8.2% [Diversified]
PMC Commercial SBI (PCC) 8.0% [Office]
Trustreet Prop Inc (TSY) 7.8% [Retail]
Arbor Realty Tr (ABR) 7.7% [Diversified]
Crescent Rl Est Eqty (CEI) 7.6% [Diversified]
Feldman Mall Prop (FMP) 7.4% [Retail]
Gramercy Cap Corp (GKK) 7.3% [Diversified]
Glimcher Raelty Trst (GRT) 7.2% [Retail]
Monmouth Real Inv (MNRTA) 7.1% [Industrial]
Republic Property Tr (RPB) 7.1% [Office]
Capital Lease Fnding (LSE) 6.9% [Office]
HRPT Properties (HRP) 6.8% [Office]
American Fin Rlty Tr (AFR) 6.6% [Diversified]
Lexington Cp Pty Tr (LXP) 6.5% [Diversified]
Ashford Hosp Tr Inc (AHT) 6.4% [Diversified]
First Ind Rlty Inc (FR) 6.1% [Industrial]
Capital Trust Sbi (CT) 6.0% [Diversified]
Franklin St Prop (FSP) 5.9% [Diversified]
Getty Rlty Hldg Co (GTY) 5.9% [Retail]
Colonial Property Tr (CLP) 5.8% [Diversified]
National Retail Prop (NNN) 5.8% [Retail]
Penn Real Estate Tr (PEI) 5.8% [Retail]
Cedar Shop New (CDR) 5.7% [Diversified]
One Liberty Prop (OLP) 5.7% [Diversified]
Pitts W Virginia RR (PW) 5.7% [Diversified]
Agree Realty Cp (ADC) 5.6% [Retail]
U-Store-It Trust (YSI) 5.6% [Retail]
Realty Income Cp (O) 5.5% [Retail]
Brandywine Realty Tr (BDN) 5.3% [Office]
Inland Real Estate (IRC) 5.1% [Retail]
Parkway Prop Inc. (PKY) 5.1% [Office]
Mack-Cali Realty Cp (CLI) 5.0% [Office]
Extra Space Storage (EXR) 5.0% [Industrial]
Liberty Properties (LRY) 5.0% [Office]

Currently author does not own any of the above.

Amazon Founder Reveals Spaceship

Jeff Bezos, the founder and head of Amazon.com (traded on NASDAQ under the symbol AMZN) has released pictures of his space ship, which he hopes will bring low priced space travel to the masses.

You can see a picture here.

Stock Market Stock Symbol Trivia = BULK

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol BULK ?

Answer:

Navios Maritime Holdings Inc. which is a seaborne shipping company, providing services for international dry bulk cargo transportation worldwide.

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

Wednesday, January 03, 2007

Google Secrets

Google Inc. (traded on NASDAQ under the stock symbol GOOG) has a lot of things coming down the pipeline. Have you heard of Google Radio? If not, you will soon. What is strange is that the googleradio.com domain is registered to an individual, whereas googletv.com is registered to Google Inc. Have you heard of Google TV? Well, now you have.
By the way, are you familiar with Google Reader? Google calls it "your inbox, for the web." It checks all your favorite blogs and news sites for updates and puts them on one central page. Please note that it is still in beta.

Author owns shares in GOOG.

Stock Trader's New Years Resolutions

The Kirk Report provides a nice list of Stock Trader's New Years Resolutions provided by his readers.

http://www.thekirkreport.com/2007/01/new_years_resol.html

Compare Your Portfolio to Hedge Funds with Stockpickr

Stockpickr.com allows you to enter your own portfolio, get comparisons to mutual fund and hedge fund portfolios, and get a blended set of 5 recommendations. James Altucher has described the site in detail:

Picking Better Stocks With Stockpickr

Tuesday, January 02, 2007

Correlation Between Prime Rate and the Dow?


Do you think there is an indirect correlation between the prime rate and the Dow Jones Industrial Average (in other words, do you think that when interest rates goes up, the stock market goes down)? Not from looking at this graph. This tracks the DJIA and the prime since 1955. The only thing close to a correlation that I see is since 1991 there seems to be somewhat of a direct correlation, the opposite of what I would have assumed.

Do Small Cap Stocks Even Pay Dividends?

Generally, you think of small cap stocks as growth companies that reinvest their earnings and don’t pay any dividends. However, there are a few stocks in the S&P 600 Small Cap Index that pay a dividend of 6% or more (i.e. they “pay you for the risk of owning their stocks”). All of the following five stocks are components of the S&P 600 Small Cap Index.
New Century Financial Corp. (NEW) is by far the highest with a yield of 24%. New Century is a real estate investment trust [REIT] that purchases mortgages on both a wholesale and retail basis. The company has paid dividends since 2002, and has increased their dividend every quarter for the last ten quarters. (Remember, past payment history is not indicative of future payments.)
Another high yielder is Standard Register Co. (SR) which generates a dividend rate of 7.7%. This Ohio based company is in the business of providing document management solutions. They have been paying quarterly dividends regularly since 1990.
In third place is StarTek Inc. (SRT) which is in the business of providing business process management and supply chain management services to U.S. and Canadian companies. They yield 7.4%.
Next on the list is another REIT which pays 6.5% and has been paying their dividends since 1994 The company is Lexington Corporate Properties Trust (LXP) and they specialize in owning office, retail, and industrial properties.
Last but not least on the list is United Online Inc. (UNTD) which pays a yield of 6%. The only tech stock on this short list, they provide Internet services in the U.S., India and Germany. They own NetZero, Juno and Classmates.com.

Author does not own any of the above stocks at this time.

Stock Market Stock Symbol Trivia = EGOV

Stock Market Stock Symbol Trivia

Question:

What stock has the stock symbol EGOV ?

Answer:

NIC, Inc. which provides online services that enable governments use the Internet for providing various services to businesses and citizens,

These stock symbols are known as Personalized Stock Symbols (TM), similar to personalized license plates. The symbol spells out a word, which is not a word in the company name and is not the initials of the company name. However, the word does describe the company's business. (Special thanks to InvestmentTrivia.com )

How to Invest in Stocks Without Paying a Commission

DripInvestor.com lists about 350 stocks that you can buy commission-free directly from the company. It lists the stock symbol, the minimum investment and the toll-free number for further information.

Book Reviews: Three Very Different Hedge Fund Books

How to Create and Manage a Hedge Fund: A Professional's Guide
by Stuart A. McCrary
I’m not sure why this book received so many negative reviews on Amazon. First, who is the book not for? It’s not for someone who wants to invest in hedge funds (unless they want a very thorough understanding of how hedge funds work). It’s not for someone looking for hedge fund trading techniques. And it’s not for someone who's already running a hedge fund.
It is designed for the stockbroker, money manager, pension fund manager, mutual fund portfolio manager, or personal trader. They know how to trade, and now they are considering going out on their own and setting up their own hedge fund. The book covers the advantages and disadvantages of the business structures (corporation versus partnership, general versus limited, S versus C, domestic versus offshore, etc.). It discusses business plans, performance measurement, legislation and regulations (as of 2002), and tax reporting, all of which many portfolio managers might have a cursory understanding of but not all the details. After all, their expertise is trading.
For hedge fund manager wannabes, I recommend this as the starting textbook.

Trade Like a Hedge Fund: 20 Successful Uncorrelated Strategies & Techniques to Winning Profits (Wiley Trading)
by James Altucher
An excellent book with many techniques I was unaware of. (How many of you are aware that Wednesday is a trend reversal day?) The strategies are very diverse and all well researched. I’ve already put one of the techniques (with a slight adjustment) to use last week, very successfully I might add. My only suggestion for a new edition would be to expand Chapter 6, "Stocks Less Than $5", with regards to differentiating the OVER type stocks from the WCOM type stocks. New traders should be aware that the “under 5’s” are not a slam dunk.
One of the most important chapters in the book is Chapter 19, "What Does Not Work?" This chapter debunks many previously published trading techniques.
Some readers may ask, why all the tables and charts and graphs. The answer is “Validation”. All of this backup shows that Altucher has done his homework. I strongly recommend this book to both new traders and experienced traders who want to learn new trading techniques.

Confessions of a Street Addict
by James J. Cramer
Ever want to know how and why Jim Cramer turned out the way he did? Ever want to know why Cramer became “addicted” to the stock market? Ever want to know what it’s really like being a hedge fund trader? Check out this book.

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