The analyst team at Sterne Agee has updated its book value estimates for the high-yield mortgage-backed securities (MBS) real estate investment trust (REIT) sector. The move is based on rising interest rates that keep adding pressure on MBS asset prices, even while the option-adjusted spreads have remained relatively stable or narrowed. The problem for investors seeking the double-digit dividend yields here is that book value models have continued to decline since the end of the last quarter.
Since the end of the last quarter, the 10-year Treasury yield increased 30 basis points and the low coupons and higher duration 30-year mortgage securities are underperforming higher coupon mortgage securities. The net result is a modest decline in non-agency MBS values. Sterne Agee shows that its models suggest a decline of 1.4% or so this quarter. In the June quarter, the firm’s models suggested an average decline of 10% to 12% and the actual book values declined on average about 15%.
Top 5 Financial Stocks To Buy For 2016: Dollar Tree Inc.(DLTR)
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.
Advisors' Opinion:- [By Jon C. Ogg]
Deutsche Bank is making a change in its coverage of dollar store themes on Monday: Dollar Tree Inc. (NASDAQ: DLTR) was raised to Buy from Hold and Family Dollar Stores Inc. (NYSE: FDO)�was downgraded to Hold from Buy, but the price target was raised to $74 from $70.
- [By Victor Reklaitis]
Today�� movers & shakers: Retailers have dropped in the wake of disappointing quarterly results or outlooks. Target Corp. (TGT) �was down 4% after posting weaker margins and earnings at its U.S. business, while Dollar Tree Inc. (DLTR) �dropped 4% after its earnings fell in the third quarter. Read more in the Movers & Shakers column.
Top 10 Value Companies To Invest In Right Now: Tupperware Corporation(TUP)
Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.
Advisors' Opinion:- [By Monica Gerson]
Tupperware Brands (NYSE: TUP) is expected to report its Q3 earnings at $1.03 per share on revenue of $623.34 million.
Varian Medical Systems (NYSE: VAR) is projected to post its Q4 earnings at $1.12 per share on revenue of $779.02 million.
- [By Oliver Pursche]
European large-cap pharmaceuticals like Novartis (NVS) �and Bristol Meyers Squibb (BMY) �count amongst some of our favorite stocks right now, as do U.S. multinationals that are growing revenue and margins in Asia ��Tupperware (TUP) �is a shining example. Stay away from utilities and energy stocks, as they are likely to be the laggards over the next year.
- [By Teresa Rivas]
We think KMB will be perceived as the safest of the multinationals. Its sales outside the US are about 55% of total; this compares to 65%-70% for Procter & Gamble (PG) and Coty (COTY) and 80%-90% for Colgate (CL), Avon and Tupperware (TUP). In general, its risk to the most volatile currencies is below average (its exposure to Eastern Europe is less than 2% of sales), though it is still translating results in Venezuela (about 3% of sales and profit) at the official rate of 6.3 VEF/$ (the parallel rate just hit 175 VEF/$) and Argentina (also 3% of sales) may devalue again. The cost of important raw materials has started to weaken; as they follow oil�� decline they could boost gross margins in 2H15. Of note, polypropylene and natural gas are off 17% 4Q-to-date; pulp prices, while not declining much, seem manageable.
Top 10 Value Companies To Invest In Right Now: Schlumberger N.V.(SLB)
Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.
Advisors' Opinion:- [By Lee Jackson]
Schlumberger Ltd. (NYSE: SLB) is a top mega cap oil field services stock rated as an Overweight at Baird. Strong offshore drilling activity combined with a seasonal rebound in western Canadian activity have driven Schlumberger’s recent growth. The company said it expects double-digit earnings growth for the rest of the year when it reported earnings recently. For 2014 and beyond, Schlumberger sees five markets providing strong growth: Russia, Sub-Saharan Africa, the Middle East, China and Australia. Shareholders are paid a 1.8% dividend. The consensus price target is $110.83. Schlumberger closed Thursday at $91.11.
- [By Johanna Bennett]
Denbury Resources (DNR) fell 2.5% to $7.95, while Diamond Offshore Drilling (DO) fell 2.2% to $37.24. Schlumberger (SLB), Nabors Industries (NBR) and Newfield Exploration (NFX) each fell 1%.
- [By R.P.H. Broens]
Halliburton (NYSE: HAL ) �and�Schlumberger (NYSE: SLB ) �are two larger competitors with market capitalizations two and five times that of Baker Hughes, respectively. Schlumberger, which is the industry leader, trades at the highest valuation multiples: 2.7 times 2012's annual revenues and 21 times earnings. Halliburton and Baker Hughes trade at lower and more acceptable earnings ratios of around 18 times earnings for 2012. Note that these competitors have seen rapid growth and margin expansion in recent years as well.
- [By David Smith]
Big and not so big at your service
In the services sector, perhaps the most difficult to comprehend of the sub-sectors, you likely have a good handle on the kingpin, Schlumberger (NYSE: SLB ) . The company, with a $100 billion market cap, operates in about 85 countries, through the efforts of more than 100,000 employees. Its services include everything from soup to nuts, or seismic to production assistance. So, if you're looking for an ideal company to constitute a single proxy for the services contingent, Schlumberger's a good bet.
Top 10 Value Companies To Invest In Right Now: Caterpillar Inc.(CAT)
Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
Advisors' Opinion:- [By Victor Reklaitis]
Boeing (BA) �drew 12.2% of its 2013 revenue from the world�� No. 2 economy, while for Nike (NKE) , it was 9.7%, according to FactSet data. China and Hong Kong delivered 18.8% of Intel�� (INTC) � revenue last year, and Caterpillar (CAT) �got 22.4% of its annual revenue from its Asia-Pacific segment, which includes China.
- [By Nikolaj Gammeltoft]
Caterpillar (CAT) slid 4.2 percent to $82.06 for the steepest loss in the Dow. Earnings for the world�� largest maker of mining and construction machinery trailed analysts��estimates for a third straight quarter and cut its forecast as mining-equipment sales declined on slower commodity demand from emerging markets.
- [By Matt Thalman]
Share of Caterpillar (NYSE: CAT ) rose 2.51% this afternoon, making it the best-performing Dow component of the day. My colleague Dan Dzombak explained why lowering interest rates in Australia gave the stock such a boost this morning. The long and skinny of it is that Caterpillar receives about 10% of its revenue from the country and the lower rates should help spur construction in the country and thus boost sales for the heavy machinery manufacturer.
- [By Charley Blaine]
But keep this in mind: Thirteen of the 30 Dow stocks are still ahead on the year, led by Merck (NYSE: MRK) and Caterpillar (NYSE: CAT), both up about 11.7 percent. Goldman Sachs (NYSE: GS), Visa (NYSE: V) and aerospace giant Boeing (NYSE: BA) are the laggards -- down 13.8 percent, 11.7 percent and 10.6 percent, respectively. More than 230 S&P 500 stocks are still ahead on the year.
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