Buy DIS at $99

In my recent post, “Three $100 Buys on a Pullback” I suggested buying Disney (DIS) on a pullback to $100. However with the huge drop in price today (nearly 6%), I lowered my strike price to $99.

DIS

Disney did cross under in late trading but is now hovering around the $100 mark.  Adding DIS to my portfolio is the plan, saving an additional $1 share is hopefully a good idea because today I could have owned DIS at $100.

According to TD Ameritrade’s Social Indicators, in the last 7 days the DIS
brand has been tweeted 157,425 times with a 94% positive sentiment. In
the past 30 days, nearly a quarter of a million tweets were regarding the
Star Wars brand.

Here are some additional twitter tags and emojis that will help whip up the Star Wars fanatics:

Three $100 Buys on a Pullback

bfOwning any of these three investments on a pullback to $100 would be great additions to my Beaglefolio.

APPL – Apple Computer (full disclosure: I own APPL shares)
DIS – Disney
GLD – SPDR Gold Shares (ETF)



APPL – Weighing another Apple buy, currently trading at $114.88, an 11% pullback to $100 is not likely, but if it does I will be adding to my position. APPL is a great company with fantastic products that continue to do well in the world marketplace. There are still plenty of growth opportunities in new markets and new products. I rate this stock a long term hold and look for opportunities like this current market correction, to add AAPL.


DIS – Disney has a fantastic mix of businesses and a great social media pipeline. In the last 7 days the term Star Wars’ has been tweeted 167,170 times, Lusasfilm 88,160 times, ESPN 51,580, Marvel Studios 47,200 and Disneyland Resort 22,230 times. (Source: Ameritrade Social Indicators)

With Starwars on the horizon and a continuation the global expansion of the Disney brands, I would love to own DIS and it is possible if it pulls back just another 7% from its current price of $107.26


Gold bar or ingotGLD – Owning the ETF GLD is a much easier way to own gold than having the physical gold. As a contrarian investor, I look for good entry points on my investments and gold is starting to look good. Currently trading at $104.45, a pullback of 4.5% could certainly happen.

While everyone is selling gold I’m looking to buy my first lot of GLD, the gold ETF, if and when it hits $100. (Source: Buy GLD at $100)

 

 

Buy GLD at $100

As a contrarian investor, I look for good entry points on my investments and gold is starting to look good. While everyone is selling gold I’m looking to buy my first lot of GLD, the gold ETF, if and when it hits $100.

gld
Chart: One year of GLD (Gold EFT)

Can it go lower, surely but gold is something I want in my portfolio as an added measure of diversity. If gold does goes lower, I will consider a second lot.

As you can see by the chart of GLD, Gold has dropped to a new fresh set of lows. It could be argued the low price is due to low demand, a strong dollar, threat of higher interest rates, a rising stock market and more.

But if GLD does hit $100 it could go up just as easily. Eventually the strong dollar will weaken and as world economies pickup, so will demand for gold. With geopolitical uncertainties surrounding ISIS, Iran, the middle east and the Ukraine, the next act resulting in widespread FEAR could easily move gold higher.

spy
Chart: One Year SPY (S&P 500 EFT)

With stocks hitting new highs I’m on a holding pattern. GLD looks ripe for new investment money.

gld1
Chart: One Month GLD

Ben Bernanke’s Blog

Former Fed Chairman Ben Bernanke

Today Former Fed Chairman Ben Bernanke started a blog here: http://www.brookings.edu/blogs/ben-bernanke. Why now?

Here is an excerpt from Chairman Bernake’s blog explaining why:

On January 31, 2014, I left the chairmanship of the Fed in the capable hands of Janet Yellen. Now that I’m a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers. I look forward to doing that—periodically, when the spirit moves me—in this blog. I hope to educate, and I hope to learn something as well. Needless to say, my opinions are my own and do not necessarily reflect the views of my former colleagues at the Fed.

His first article: ‘Why are interest rates so low?‘ does and excellent job explaining why the Fed is keeping rates so low. A factor called the ‘equilibrium real interest rate’ is a factor that the fed uses to assist in balancing inflation and employment rates. He also explains why keeping interest rates so low is not throwing seniors under the bus. An excellent read.

I will be looking out for Chairman Bernanke’s future blog posts.

MCD Answering question about Food Quality with Videos

McDonald’s stock has been suffering. One reason MCD is suffering is that people question the quality of McDonald’s food such as ‘are there beaks and feet in Chicken McNuggets?’ To answer that question and others McDonald’s shares it’s food production techniques in several videos.

In these videos MCD answers a questions concerning the quality and content of its food. See videos below for examples of MCDs effort to prove its uses only the best ingredients.

From McDonald’s: Is it real Chicken? Is the whole chicken used? Those ‘pink slime’ pictures, is it really an ingredient of Chicken McNuggets? One of the biggest questions about McDonald’s food is about what goes into our Chicken McNuggets, so Grant Imahara visited Tyson Foods, one of our suppliers to get you answers. Watch to see what goes into our Chicken McNuggets

Also from McDonald’s: Why is the egg in the Egg McMuffin round? Is it sliced from a roll? Are the eggs even real? Prompted by a question from a McDonald’s skeptic, Grant Imahara heads to Herbruck’s Poultry Ranch, an egg supplier for McDonald’s USA, to find the real story about our eggs. Watch and discover if McDonald’s eggs are real.

Also from McDonald’s: Does McDonald’s USA use real potatoes? Why do the fries always taste so good? Are they mashed and formed in a mold? There are a lot of questions about our fries so Grant Imahara is going to investigate our fry making process in his own way. Watch and discover how we make our World Famous Fries.

There are several other ‘Food Quality’ videos on the McDonald’s YouTube Channel. Will these videos answer consumer questions and help customers understand that McDonald’s food is good food. (Just not gourmet)

Full Disclosure: I own MCD, I have a hold rating on this stock.

Crude Nearing 16 yr Resistance

crude oil 1946-2014

In 1973 OPEC had an oil embargo on the US which rose to sharply higher prices.

Today the lower US Dollar coupled with rising supply from nontraditional sources such as fracking and oil sands has led to a temporary glut in the market.

Supply and Demand Adjustment Period
With oil on sale consumers are going shopping for SUV’s and larger gas guzzling vehicles. With the fast growth in consumerism in China, oil consumption will continue to increase over the next several decades.

China’s ascent marks “a new age in the history of energy,” IEA chief economist Fatih Birol said in an interview. The country’s surging appetite has transformed global energy markets and propped up prices of oil and coal in recent years, and its continued growth stands to have long-term implications for U.S. energy security. Source: WSW

Demand will meet supply on the world crude oil market the question is how long will it take to see $100 oil again? Could be in as little as a week if a terrorist attack hits a major oil producing country. Likely we won’t see $100 crude oil until 2016, that’s why for the second and third quarters of 2015 I will likely continuing to add to my energy investment portfolio.

I currently hold positions in CVX, ED, EPD, OXY, KMP, LINE, VLO, BTU and PBT.

energy

Corporate Fraud; China; Financial Development; Corporate Governance

In a March 23, 2014 whitepaper titled: “Cheating in China: Corporate Fraud and the Roles of Financial Markets” authors Minwen Li and Tanakorn Makaew reported on a study on how financial market monitoring affects corporate fraud in China. They came to the conclusion that financial markets play a crucial role in fraud prevention.

Financial markets play a crucial role in fraud prevention.

From the report, “Corporate fraud scandals have plagued emerging markets such as China. In 2012, the China Securities Regulatory Commission (CSRC), the main regulator of security markets in China, received 380 allegations and investigated 316 cases involving financial fraud, false information disclosure, and other violations of the securities laws. Given that there are 2,494 companies listed on Mainland China’s two stock exchanges, such prevalence of fraud threatens to strain capital market activity and overall economic growth.”

Case in point, DEER, a Chinese designer, manufacturer and seller of small home and kitchen electric appliances. Back in Feb 2012, I picked a small position this stock based on the financials provided via Schwab, TD Ameritrade, Yahoo and other publications.  According to these reports, DEER has a PE ratio of 3.978, one of the lowest in the Appliance and Tool industry. DEER has a Net Profit Margin of 17.405, making it one of the most profitable in its industry. In March 2012 I bought more on the heels of yesterday’s annual report announcing record results! By August 2013 the lies caught up with DEER and the stock was halted.

This despite that fact that the National People’s Congress (NPC) began to amend the Securities Law and the Company Law in 2003, both of which took effect on Jan 1, 2006. NPC also passed Amendments to The Criminal Law (VI) in 2006 to clarify the responsibilities of listed companies related to breaches of the law, and impose heavier punishments for violations.

Lesson: I don’t know how anyone can trust financials from any company based in China.

MCD: The Past, The Present,The Future

“As our predominately franchised business model continues to generate significant levels of cash, our priorities regarding the use of cash have not changed. After investing in our business, we’re committed to returning all free cash flow to shareholders over the long term, first through dividend and then through share repurchases. For the second quarter, we returned $1.2 billion to shareholders through a combination of dividends and share repurchases.” – McDonalds President Thompson


“…fortifying our position as our customers’ favorite place and way to eat and drink.”

by McDonald’s Don Thompson, President and CEO

I’d like to begin by briefly framing our performance using three lenses. The past, the present, and the future.

First the past, because it provides perspective and guides our present and future. Throughout McDonald’s history, we respectively grown both the top and the bottom lines to varying degrees across a variety of economic and competitive cycles. We have an iconic brand an outstanding system of owner-operators, suppliers and employees and superb real estate locations in nearly every market around the world. This provides a solid foundation from which we operate.

Second, the present. In second quarter we grew revenues, operating income and earnings per share, despite the ongoing impact of the challenging environment. This is truly a testament to the fortitude and resilience of our system, our sustainable competitive advantages, and the collective focus on execution at our restaurants.

And third the future. We expect the dynamics of this cycle should persist in the near-term, namely flat to declining informal eating out markets, increasingly less ability to take price, cost pressures throughout our P&L and heightened competitive activity.

Based on our recent sales trends, our results for the rest of the year are expected to remain challenged.

Our second quarter results tells story consistent with these lenses. Global comparable sales were up 1%, operating income was up 3% and constant currencies and earnings per share was $1.38, a 6% increase in constant currencies. And as we begin the third quarter, global comparable sales are expected to be relatively flat in July. Based on our recent sales trends, our results for the rest of the year are expected to remain challenged.

We remain committed to the plan to winning our three global growth priorities to optimize our menu, modernize the customer experience, and to broaden accessibility to brand McDonald’s around the world. This customer centric plan enables us to deliver an appealing experience by offering great tasting, affordable food and beverages, and clean and modern restaurants.

At the same time, we are diligently implementing thoughtful adjustments to our proven strategies and solutions when and where needed. This flexibility has enabled us to maintain or grow market share in most of our major markets around the world.

Let’s review ours results in every geographic business units, starting with the United States, where comparable sales for the quarter were up 1% and operating income was flat. We continue to appeal to our customers with an increased emphasis on new news across our menu, and an ongoing focus on everyday affordable value.

The Dollar Menu remains a foundational component of our strategy

The Dollar Menu remains a foundational component of our strategy to consistently deliver value across the menu, rather than implementing aggressive short-term discounting tactics. At the same time, our focus on enhancing core classics and offering additional premium products, continues to provide customers with even more variety and choices across day parts and price points.

Premium McWraps launched in April, the Blueberry Pomegranate Smoothie and Egg White Delight debuted in May and last month we added fresh new taste to our Quarter Pounder Burgers with three new flavorful recipes, Bacon Habanero Ranch, Lettuce Tomato Deluxe and Bacon & Cheese.

This quarter we introduce new items across all four key growth categories, chicken, beef, breakfast and beverages. Premium McWraps launched in April, the Blueberry Pomegranate Smoothie and Egg White Delight debuted in May and last month we added fresh new taste to our Quarter Pounder Burgers with three new flavorful recipes, Bacon Habanero Ranch, Lettuce Tomato Deluxe and Bacon & Cheese.

From a comparable sales standpoint, these new menu additions individually met or exceed its targeted performance levels. However, softer IEO environment and comparisons against prior-year promotion was chicken and beverage activity offset the sales driven by the new menu news. And while June comparable sales were slightly negative in the U.S., we continue to outpace the competitive set.

In June, I met with our leadership franchisees while they were in Oak Brook for one their regularly scheduled meetings. While the challenges of operating a small business today are many, it is clear that we’re aligned and focused on what’s most important and that’s the customer. It’s that commitment to remaining customer centric, along with the assertive plans and vision we have in place, that enables all three legs of the McDonald’s system to grow sales and profitability for the long-term.

Let’s shift to Europe, where comparable sales were down 10 basis points for the quarter and operating income was up to 5% in constant currencies. The U.K. and Russia continue to deliver positive results, while weak performance in Germany and France persist. The UK’s business remain solid. Second-quarter results and continued market share growth were driven by a balanced focus across value core new products, and promotional offers.

The U.K. launch blended ice beverages in June, just in time to satisfy customers’ craving for something cool and refreshing during the summer months. The lineup includes two delicious fruit smoothies, strawberry and banana and mango and pineapple, and a line of frappes including Carmel and Iced Mocha.

Inspired by the U.S., these new products expand the overall beverage lineup and further validate blended ice as a proven system solution that can be deployed across markets worldwide. Russia also delivered positive performance for the quarter on top of last year’s strong results. In addition to a focus on the Big Mac, two seasonal premium offerings, the Royal Cheeseburger and The Big Tasty with Bacon, contributed to Russia’s performance and demonstrated the strong ongoing appeal of our brand in this growth market. We expect the lower inflationary environment in Russia to continue dampening our pricing power, pressuring near-term sales momentum compared to last year.

France, comparable sales in guest count performance remain negative as the recession continues

Moving over to France, comparable sales in guest count performance remain negative as the recession continues to pressure the informal eating out industry. However, we’re growing market share by balancing value in premium products across the menu. For example, France recently added two new recipes to the popular Casse-Croute entrée and drink combo, they contributed to market share growth during the lunch day part. This value offer was complemented by a strong focus on two premium beef burgers, Le M and Le 280.

Germany negative comparable sales and traffic trends persist.

In Germany negative comparable sales and traffic trends persist. Our traffic has declined at a faster rate than the IEO industry, which also continues to contract. It’s critical that our initiatives resonate with consumers in this environment and in this marketplace. So to reestablish our momentum, we are leveraging recent consumer insights and continuing to adjust our plans.

market share improved in China, Australia and Japan, comparable sales were negative for our big three markets. Positive performance in other markets like South Africa, Singapore and South Korea partially mitigated the overall segments decline.

Let’s shift to Asia Pacific, Middle East and Africa or APMEA. Comparable sales were down 30 basis points for the quarter and operating income increased 3% in constant currencies. Although market share improved in China, Australia and Japan, comparable sales were negative for our big three markets. Positive performance in other markets like South Africa, Singapore and South Korea partially mitigated the overall segments decline.

Markets across APMEA are taking a holistic approach to stimulating demand. Across day parts there are offering limited time and innovative products alongside established price value platforms. In Australia, we continued to grow market share by balancing our focus on the core with new product introductions and promotional activities. Strong performance in 2012 including the launch of our Loose Change menu along with external pressures in 2013 from lower levels of consumer spending and high competitive activity have contributed to weaker performance.

Japan, consumers remain extremely price sensitive

In Japan, consumers remain extremely price sensitive. Comparable sales have been positive the last two months and we continue to grow share by leveraging limited time offerings like the Chicken Teritama and sharing options such as the Mega Potato to keep customers coming back to our restaurants and to build our average check.

China, comparable sales were down 6.1%

In China, comparable sales were down 6.1% for the second quarter reflecting the negative impact from avian influenza which continues to dissipate. We remain focused on leveraging promotional activities to showcase the diversity of our menu beyond chicken and strengthening our connection with customers through our ongoing brand trust campaign that focuses on the quality and the safety of our food.

We remain confident in our ability to drive future performance in China. Going forward, comprehensive plans for our key growth areas particularly beverages, the family business and the late night day part remain our top priorities.

Around the world and across our system we are focused on ensuring our strategies and tactics resonate with customers. That’s the key, the key to our performance, today and for the long term. As I mentioned earlier, our market teams continue to strategically and thoughtfully adjust their plans in response to local consumer dynamics and growth opportunities.

At the same time, we remain committed to prudently investing our capital and resources in those initiatives that will further differentiate us from the competition for the long term. We’re broadening accessibility by adding new restaurants, we’re modernizing our existing restaurants with reimages and remodels and we continue to deploy technology and convenience initiatives.

our predominately franchised business model continues to generate significant levels of cash, our priorities regarding the use of cash have not changed

As our predominately franchised business model continues to generate significant levels of cash, our priorities regarding the use of cash have not changed. After investing in our business, we’re committed to returning all free cash flow to shareholders over the long term, first through dividend and then through share repurchases. For the second quarter, we returned $1.2 billion to shareholders through a combination of dividends and share repurchases.

In closing I want to reiterate my confidence in our business and in the growth opportunities that exists. We are diligently focused on executing the proven strategies within our plan to win. We have a resilient business model and aligned and talented system and an experienced management team.

We’re leveraging these strengths and making deliberate, continued progress toward winning this battle for market share and fortifying our position as our customers’ favorite place and way to eat and drink.

Source

DEER Suspended from NASDAQ

The NASDAQ Stock Market (Nasdaq:NDAQ) announced that Deer Consumer Products, Inc. (DEER), which has been subject to a trading halt since August 13, 2012, will be suspended from the NASDAQ Stock Market effective January 11, 2013. As a result of the suspension, Deer Consumer Products may be eligible to resume trading in the over the counter market. The suspension is the result of a final determination to delist the Company’s shares issued by the Panel after a hearing on the matter. NASDAQ will file a Form 25 Notification of Delisting with the Securities Exchange Commission upon the expiration of applicable appeal periods.

For news and additional information about the company, please contact the company directly or check under the company’s symbol using InfoQuoteson the NASDAQ Web site.

For more information about The NASDAQ Stock Market, visit the NASDAQ Web site at http://www.nasdaq.com.