Best Stocks To Invest In 2012: Best muni bond fund bets
Even if the most dire predictions about the current muni bond market come true, and we see $100 billion or more in defaults, that’s still a drop in the a multi-trillion dollar bucket.
True, fiscal coffers are percolating a thin gruel of anemic revenue. Also true, bond insurers that used to provide a safety net for most munis are basically gone thanks to 2008’s maelstrom.
True, fiscal coffers are percolating a thin gruel of anemic revenue. Also true, bond insurers that used to provide a safety net for most munis are basically gone thanks to 2008’s maelstrom.
Also true; most muni bonds skew toward the longer-end of the more interest rate sensitive duration spectrum (a function of being tied to long- term infrastructure projects).
But, muni bonds are backed by the ability to raise taxes; no small feature. Much of the risk of owning muni bonds that are weakest is ruled out by investing in muni bond funds where manager track records are strongest.
And, finally, one can address the interest-rate sensitivity issue by investing in a diversified, duration flexible muni bond fund or focusing on shorter duration muni bond funds.
The best way to pursue the upside is through a diversified basket of actively managed munis.
The shorter duration Fidelity Intermediate Muni Bond Fund (FLTMX) is one choice for taxable accounts.
I also like Fidelity Tax-Free Bond (FTABX) paired with a non-muni bond option that offers rubies in the current emerging market rubble, Fidelity New Markets Income (FNMIX).
But, muni bonds are backed by the ability to raise taxes; no small feature. Much of the risk of owning muni bonds that are weakest is ruled out by investing in muni bond funds where manager track records are strongest.
And, finally, one can address the interest-rate sensitivity issue by investing in a diversified, duration flexible muni bond fund or focusing on shorter duration muni bond funds.
The best way to pursue the upside is through a diversified basket of actively managed munis.
The shorter duration Fidelity Intermediate Muni Bond Fund (FLTMX) is one choice for taxable accounts.
I also like Fidelity Tax-Free Bond (FTABX) paired with a non-muni bond option that offers rubies in the current emerging market rubble, Fidelity New Markets Income (FNMIX).
Best Stocks To Invest In 2012: Rhodes: Trader calls for correction
Given the market's current overbought condition, traders believe it is wise to raise some cash. We agree. We also sense that there is a change in the air regarding the rise in commodity prices.
We've looked for at least a 20% correction in commodities sometime this year. Certainly “now” seems to be at least an interim top to be sure.
We've looked for at least a 20% correction in commodities sometime this year. Certainly “now” seems to be at least an interim top to be sure.
Perhaps the catalyst for this decline stems from Goldman Sachs commodity strategist Jeffrey Curriehas, who has now decided to close his profitable long commodities trade -- long a basket of crude oil, copper, cotton, soybeans and platinum or the “CCCP trade as it has become known.
Also, he is exiting long copper and platinum positions because he believes the risk-reward no longer favors a bullish stance.
However, we’ll go on to note that he believes that on a 12-month horizon – the “CCCP trade” continues to show upside potential; but the near term risk-reward no longer favors being long the trade.
Meanwhile, the S&P has clear resistance at 1340 and the NASDAQ 100 at 2360; if those levels are taken out to the upside, then we’ll assume that another leg higher is underway.
However, recent weakness suggests a correction is underway towards more established support levels at 1250 and 2189.
But let us note right away, that if the NASDAQ 100 does manage to test 2189 – it will have broken key neckline support of a larger bearish “head & shoulders” topping pattern. Thereby targeting 2000-to-2050…which would be a rough - 10% to -15% correction.
Best Stocks To Invest In 2012: Media buys: CVC & CMCSK
The rough-and-tumble media group gained new investor respect in late 2010 and two of them now offer solid buying opportunities following the market correction.
Cablevision Systems (CVC), the fifth largest U.S. cable TV provider, plans to spin off its Rainbow Media business—possibly unlock- ing added shareholder value.
Cablevision Systems (CVC), the fifth largest U.S. cable TV provider, plans to spin off its Rainbow Media business—possibly unlock- ing added shareholder value.
It is also strong in high-speed data and voice services for small and medium-sized businesses.
With its price softening a bit last week, but with prospects for earnings of $2.50 per share in 2012 and $3-plus in 2013 still intact, our 12-month price target from today’s 34 is around 45.
Top Dog in the media group is Comcast (CMCSK). The company with 40 million video subscribers in 39 states, 17 million Internet subscribers and over 8 million phone subscribers.
In January it took control of NBC Universal (from GE) just as the advertising market began showing renewed strength.
But according to Zacks, the two analysts tracking CMCSK are projecting 17% earnings growth and a 31 price target. Our target for CMCSK from today’s 23-plus is 35. The recently raised dividend provides a 2% yield.
Best Stocks To Invest In 2012: MIND C.T.I. Ltd. (MNDO)
Israel stands above all other nations when it comes to the high-tech industry, and one of my favorite emerging stocks in this sector is MIND C.T.I. Ltd. (MNDO); this is a microcap Israeli tech stock with a high-yield dividend over 9 percent.
With over ten years in the technology sector, MIND has quickly evolved into a leading global provider of real-time, product-based mediation, billing and customer care solutions for voice, data, video and content services.
With a market cap of $61.8 million, little MNDO doesn’t show up on many traders’ radar screens - especially because it’s thinly traded, averaging just over 136,700 shares traded daily.
With over ten years in the technology sector, MIND has quickly evolved into a leading global provider of real-time, product-based mediation, billing and customer care solutions for voice, data, video and content services.
With a market cap of $61.8 million, little MNDO doesn’t show up on many traders’ radar screens - especially because it’s thinly traded, averaging just over 136,700 shares traded daily.
That makes it exactly the type of small cap stock that we should keep an eye on and think about buying when the opportunity arises. We want to get into these types of companies before they receive significant analyst coverage.
In MNDO’s case, there are other strengths besides just a lack of coverage. The company’s income statement looks particularly strong. Total revenues for 2010 were close to $20 million, an increase of 14 percent year over year.
Growth in revenues helped to increase operating income from $2.2 million in 2009 to $4.8 million, or 25 percent of revenues, in 2010. Net income was $44.9 million or $0.26 per share.
The balance sheet also looks strong with a total cash position of $20.5 million at the end of 2010. The company boasts profit margins of 24.4 percent and return on equity of 20.8 percent. Moreover, MNDO continues to grow its customer base at a rapid pace.
The company recently took a major step towards catching institutional attention with the announcement that they have joined forces with Israel’s first mobile operator, Pelephone communication. Pelephone has over 2.8 million subscribers.
For the investor who wants the potential for outsized capital gains in small cap stocks that pay big dividends, MNDO is worth further research.
Best Stocks To Invest In 2012: Stillwater Mining (SWC)
Stillwater Mining (SWC) is the largest producer of platinum group metals (PGMs) in North America and the only significant producer in the US.
In 2010, the company produced a total of 485,000 ounces of PGMs including 374,000 ounces of palladium and 111,000 ounces of platinum from its Stillwater and East Boulder mines in southern Montana.
In 2010, the company produced a total of 485,000 ounces of PGMs including 374,000 ounces of palladium and 111,000 ounces of platinum from its Stillwater and East Boulder mines in southern Montana.
Palladium prices were at depressed levels for much of the period between 2002 and 2008, and Stillwater wasn’t in a position to expand operations or make money.
But with palladium prices now well over USD700 per ounce, the miner is once again solidly profitable.
Stillwater’s expansion projects are slated to push the company’s total output up by 40 percent over the next 4 years to roughly 700,000 ounces of PGMs per year.
And roughly three-quarters of that output will be palladium, the PGM with the strongest near-term growth prospects and tightest supply-demand conditions.
Stillwater trades at just 13 times projected 2011 earnings and should be able to grow profits by 20 to 30 percent over the next few years as it brings new production on-stream to take advantage of rising palladium prices.
Stillwater Mining, a new addition to the Metals and Mining Portfolio, rates a buy under 24.50.
Best Stocks To Invest In 2012: Global X FTSE Norway 30 (NORW)
If you are looking for an investment safe haven, Norway shuld be high on your list; while much of Europe is mired in fiscal turmoil, Norway -- which is not a memeber of the EU -- seems to have matters well in hand.
It is the world's seventh largest oil exporter and, unlike most countries in the world, actually carries a budget surplus that is estimated to be about 10% of GDP this year.
The common approach to national budgeting in much of the world seems to be spending money as long as it can be borrowed.
But Norway's budget conservatism and half-trillion dollar wealth fund means it has an extremely low default risk. In real market-cost terms, the cost of insuring against Norwegian default is the lowest in the world.
Also in Norway's favor is that its inflation and unemployment are low and its currency, the krone, is strong.
The Global X FTSE Norway ETF (NORW) is realtively new, having been trading since September 2010. The fund attempts to emulate the FTSE Norway index, a market capitalization-weighted index designed to reflect board-boased equity performance of the country.
The top three sector weightings are energy (40.5%), financial services (22%) and basic materials (10%). The annual expense ratio is 0.50%.
It is the world's seventh largest oil exporter and, unlike most countries in the world, actually carries a budget surplus that is estimated to be about 10% of GDP this year.
The common approach to national budgeting in much of the world seems to be spending money as long as it can be borrowed.
But Norway's budget conservatism and half-trillion dollar wealth fund means it has an extremely low default risk. In real market-cost terms, the cost of insuring against Norwegian default is the lowest in the world.
Also in Norway's favor is that its inflation and unemployment are low and its currency, the krone, is strong.
The Global X FTSE Norway ETF (NORW) is realtively new, having been trading since September 2010. The fund attempts to emulate the FTSE Norway index, a market capitalization-weighted index designed to reflect board-boased equity performance of the country.
The top three sector weightings are energy (40.5%), financial services (22%) and basic materials (10%). The annual expense ratio is 0.50%.
Best Stocks To Invest In 2012: Best Stocks To Invest In 2012: T. Price U.S. Large-Cap Core (TRULX)
T. Price U.S. Large-Cap Core (TRULX) has been managed since its inception in mid-2009 by Jeff Rottinghaus; the fund currently has less than $30 million in assets.
Rottinghaus seeks to fill the portfolio with 50 to 55 large-cap stocks rated highest by Price’s extensive cadre of equity analysts, who tend to be divided by sector and industry.
Rottinghaus seeks to fill the portfolio with 50 to 55 large-cap stocks rated highest by Price’s extensive cadre of equity analysts, who tend to be divided by sector and industry.
The criteria to favor one stock over another differ among various sectors: in technology, Rottinghaus says, the firm’s analysts tend to prefer companies going through very favorable cycles for new products and services. In the consumer staples area, on the other hand, valuation plays a greater role.
In general, however, the analysts favor modestly priced, high-quality companies that are gaining market share in growing industries.
For cyclical stocks, they look for companies beaten down due to a cyclical trough but likely to benefit mightily once the cycle turns, thanks to limited competition, engendered by high barriers to entry by competitors.
For all their picks, they spend a lot of time attempting to ascertain management quality.
In general, Rottinghaus favors GARP companies (growth at a reasonable price) while also devoting some of the fund’s assets to more highly valued companies thought to have excellent prospects.
Like most other equity funds at Price, U.S. Large Cap Core has a bias toward quality as indicated by low debt, high barriers to entry and strong return on capital. Rottinghaus hopes this would cushion the fund in a bear market.
