Canadian National: The Best Railroad for This Recession

David Powell submits:

Canadian National Railway (CNI) reported its second quarter results on July 21; earnings per share declined 6% from last year to $0.94 [US] and net income was down 11%. Even so, CNI shares are up 4% since last week and up 12% since the beginning of the year, while the Dow is down about 12%. Why is CNI so steadfast in this recession; aren't railroads sensitive to the economy? One reason could be the just-announced buyback of 25 million shares. But I believe there are many other important factors that make this stock a compelling long-term value play.

First, while oil prices may be down from their record highs, I believe higher energy prices, in general, are here to stay. This may make rail a better shipping alternative than trucking - although it is slower, it is less costly. And, rightly or wrongly, many see it as "more green." Higher oil prices have also boosted interest in oil sands projects in the northern part of the Canada, which will require rail support from CNI. Today, the oil sands produce about a million barrels a day, but this number is expected to triple over the next 10 years. Besides the oil sands, Canada's potash mines, coal mines and corn distribution centers are located on CN lines.

Four Canadian Financial Plays

Larry Bellehumeur submits:

Everyone is well aware of the issues that most of the US (and, to a certain extent, European) financial institutions have had. Many of them were overleveraged, and decided to push the envelope on good lending practices. It may be a long time before some of them (if they ever do) emerge to be good, solid investments again.

The same can't be said (with a few exceptions) about Canadian financial institutions. Many have limited sub-prime exposure (in some cases, none at all). However, many have been hit with declines of 20% or more from their peaks. With yields now north of 4% (some 6%), and an economy that is still showing some signs of life, now might be the time to get in.....

Eight US Real Estate ETFs

US real estate ETFs are a bellwether asset class these days. They have been tossed about by changes in bank credit and interest rates and remain an important hedge against inflation. We put US real estate ETFs under the microscope to identify the strongest candidates for various portfolio uses.

The first thing to emphasize is that no real estate ETF is exposed to single family housing, which is causing so much grief to individual Americans. With the recent withdrawal of the Adelante Shares line of real estate ETFs, the field has shrunk considerably. There are now five broad or large cap ETFs suitable as a core holding:

Junior Gold Stocks Benefit from Stabilizing Equity Markets

Chris Vermeulen submits:

With the Stock Market Panic behind us - for now - we are settling in for a range bound, relatively calm, second half of ’08. Junior Gold Stocks should finally start to benefit as the wet blanket smothering equity markets lift.

The New York Stock Exchange indicator for new lows reached an extreme of 1304 on Tuesday, July 15th. That was even worse than the 1100 new lows reached on January 22nd. Such extremes spell one thing: P-A-N-I-C.

Husky Energy: High Yielding Oil Play

The Moneygardener submits:

When a company's prospects for earnings success are tied to the price of a commodity, some funny things tend to happen to its share price. Throw in a rising dividend and a higher yield and things get even more interesting.

A case in point right now, is oil stocks. Most oil stocks in Canada are fairly low yielding but Husky Energy (HUSKY.PK) stands out in offering a higher dividend yield to investors. Recently as oil climbed from under C$100 to around C$147, oil stocks soared with sentiment all around claiming high oil was here to stay and that we could hit C$200/barrel quickly. Since then oil has begun to come off as it is now flirting with C$125/barrel. Evidence exists that high oil is curbing demand, and that the U.S. economy is slowing. These factors along with the usual speculative trading dynamics seem to have turned the bus around.

Steer Clear of Akeena Solar

Phillip Lyon submits:

I’ve looked into the financials of several solar companies and Akeena Solar is by far the worst solar company I’ve checked out based on fundamentals. Akeena Solar is a good example of what not to look for in a stock.

For the last five quarters the net loss of Akeena Solar has grown. In Q1 of 2007 Akeena Solar reported a net loss 930,000. In Q1 of 2008 Akeena’s net loss ballooned to 4.6 million.

Financials Are Having a Dead Cat Bounce

Gold Digger submits:

Yesterday financials had a big rally and obviously it was driven by shorts covering their positions after a new rule from SEC takes away the weapon. There is a saying that excess of everything is bad. And short sellers are paying the price of getting too greedy in the process. Lot of institutions were unfairly crushed when the stampede was on until Monday last week. To name a few: Lehman Brothers (LEH) getting crushed because of Fannie (FNM) and Freddie (FRE), and Wells Fargo (WFC). But what is happening now is also unjustified. Basically the US government is trying to artificially inflate the equities of its financial institutions.

Some of these institutions rightly deserved judgment for their practices in the "oh-so-long-ago but actually just few months back" booming mortgage markets. And this government manipulation does not require much proof to see Wachovia (WB) and Washington Mutual (WM) reporting losses that should have put them to shame.

Apple’s Uncharacteristically Sloppy Execution

FP Trading Desk submits:

On Monday, Apple (AAPL) reported a strong Q3 that again topped analyst estimates, but its forecast missed estimates. Along with activation and other service issues for the new 3G iPhone and concerns over Steve Jobs’ health, the weak forecast has led to shares falling 11% in after-hours trading to about $149. This is the first time Apple has looked sloppy.

For Q4, Apple expects revenue of $7.8 billion and EPS of $1 versus analyst estimates of $1.24 EPS on revenue of $8.3 billion. Gross margin is expected to decrease from 34.8% in Q3 to about 31.5%. A new accounting system for the 3G iPhone, “future product transition” and the impact of back-to-school promotions are behind this sequential decline.

Follow the Ring of Fire to Gold's Geological Hot Spots

The Gold Report submits:

Ron Parratt, president and CEO of AuEx Ventures, takes The Gold Report on an exclusive tour of the world's most geologically attractive areas for precious metals exploration. As a geologist and exploration manager for 30 years, Parratt has an exceptional record of discovery and development of North American gold projects and is credited with leading teams to more than 20 million ounces of gold in Nevada. He shares his passion for the industry and his enthusiasm for some of his favorite junior explorers.

TGR: As you look around the world, where are the geological hot spots for precious metals?

Wednesday Outlook: No Rhyme or Reason

David Fry (ETF Digest) submits:

After watching horrible earnings results Monday night and Tuesday morning, it was logical to think we’d be plunging back into the bear abyss. But no! Oil prices fell sharply again as many worried that poor economic conditions would hurt demand. That’s the good news since bulls believe that will get Chucky the Consumer shopping again. It’s also the bad news since, well, the economy sucks.

Wednesday Outlook: Commodities, Emerging Markets

David Fry (ETF Digest) submits:

<< Return to page 1 - No Rhyme or Reason

Raw Data Report: Tech

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