U.S. Bank Dividend Yields Revisited

The Sun submits:

Last November, shortly after the Dow peaked at 14,280 points, I had a post on dividend yields of the largest banks in the country. At that time, I thought that, with many bank stocks yielding 6.0% or more, buying banks made some sense if the banks can keep their dividend payouts.

That was then and we all know what has happened since.

Universal Insurance Holdings: A Worthy Speculative Play

Anthony Tsung submits:

In my opinion, one of the best investors of our time is Peter Drucker. If you have never heard of this man, you are missing out.

Drucker has held his own legend in the sphere of executive management [almost every MBA student and CEO has heard of this man]. Accordingly, he is the father of management, writing the commandments as to how management ought to be implemented throughout a corporation. If one were to go back to the first few novels on management published by Drucker, one would find that the majority of today’s “hot executive business books” will, without a doubt, spew the main points Peter had been teaching his entire life.

Are Inflation Concerns Inflated?

Mark J. Perry submits:

M2: Percentage Change from Year Ago
M2: Monthly Percent Change, At an Annual Rate
The charts above (click to enlarge) are from the St. Louis Fed's most recent "Monetary Trends" report for M2 growth on a: a) percent change from a year ago basis (top chart), and b) monthly percent change at an annual rate basis (bottom chart).

If stability in the growth of M2 was one measure of monetary policy stability, it would seem like the Fed has been doing a pretty good job. The year-to-year change has been steady at about 5% in 2004, 2005, 2006, 2007 and 2008. It's almost as if the Fed has had a fixed money growth rule for M2 of 5% per year since 2004. Although the month-to-month annualized change spiked in early 2008, it is now down to about 0%.

Kodak Emerges from the Dark Room

Ockham Research submits:

Eastman Kodak (EK), the formerly iconic America company and Dow component, has hit a serious rough patch. The camera and film maker missed the boat on the digital imaging revolution, and the company has been playing catch-up ever since. The stock has reflected this lack of foresight in the evolving imaging marketplace by steadily declining over the better part of a decade.

Products that had made Kodak successful in the past, such as film, became nearly obsolete very rapidly and Kodak management was slow to recognize the peril. The recent weakness in the stock—it has lost nearly half its value in 2008—has depressed the price to such a degree that we now see opportunity. Particularly since Kodak announced Tuesday that it will use a $1 billion IRS tax refund from the 1993-1998 tax years to buy back nearly a quarter of its outstanding shares at a market price that is just above book value.

Taliman Energy: Analysts Cautiously Applaud About Iraq Deal

FP Trading Desk submits:

Analysts have filed their first impressions of Talisman Energy Inc.’s (TLM) adventures in Iraq. Their reaction? More than a golf clap, but not quite a standing ovation.

In short, they cheered the potential to find massive amounts of oil, while barely batting an eye that Talisman’s new oil exploration project is in Iraq — one of the world’s ugliest war zones.  Oh, sure, it is actually in the autonomous region of Kurdistan, but that is still part of Iraq.

MicroHoo Talks Resumed -- Again?

Blaise Zerega submits:

Microsoft (MSFT) and Yahoo (YHOO) are at it again. TechCrunch is reporting that the companies have resumed merger talks. CNET says what's being discussed is a full-on acquisition. Meanwhile, Yahoo's share price is going --- up, up, up. Mr. Icahn, please don't say, I told you so.

Only a full-blown acquisition makes sense. Given last week's high-profile departures and rumored reorganization being pushed by president Sue Decker, Microsoft would be getting a leaner, more nimble organization that would be easier to merge with.  Assuming the reports are true, it's likely that Decker would have a big role to play post-merger, but what about Jerry Yang? He'll have escaped Mr. Icahn's wrath, but can't see Mr. Ballmer asking him to stick around.

Tech Stocks Slide Down Oil's Slippery Slope

Shlomi Cohen submits:

There never seems to be a dull moment in the flash chip industry, and once again I find myself having to comment on the rollercoaster at SanDisk Corporation (SNDK). On Friday, Citi analyst Craig Ellis struck again when he downgraded his recommendation for SanDisk to from "buy" to "hold" and cut his target price to $27 from $35. The last time he downgraded the company was in October 2006.

Ellis's move is understandable, in light of flash prices which appear to be in a state of freefall, and macro economic concerns worldwide, but at its current price, Ellis appears to have locked the stable door with the horses having already bolted, unless he knows something that we don't. Back in March, an analyst from JP Morgan lowered his recommendation and price target to around $20, and the stock duly rebounded to $33.

Google Enters the Wild World of Web Traffic

Blaise Zerega submits:

So, it's not enough that Google (GOOG) has AdSense and DoubleClick. Yesterday, the search giant announced its Trends for Websites service. One might think hurrah! Google has turned its algorithmic prowess toward fixing the messy estimates of site traffic provided by Comscore (SCOR), Nielsen, Compete, and so many others. Not so fast.

Google's new service looks to be yet another bit of information to confuse naive media buyers who purchase ads based on a site's relative ranking. But that's a good thing. Really.

Oil Price Implications of a Strike on Iran

Jason Kelly submits:

Raymond wrote:

About a month ago you wrote an article looking at geopolitical risks, and identified a strike on Iran as the most pressing current situation. Any updated thoughts on that?

Verso Paper Faces Strong Competition in a Stale Market

Zachary Scheidt submits:

Verso Paper Corp. (VRS) came public midway through the month of May with a pricing of $12.00 per share.  After many other successful launches of IPOs in April, underwriters were trying to make the most of the new-found liquidity and get as many deals priced as possible in order to collect their fees while they could.  Verso Paper, however, didn’t possess many of the same characteristics that made IPOs such as Visa (V) and Intrepid Potash (IPI) successful.

For starters, the company is operating in a very stale sector.  As a manufacturer of coated paper, the company is very much at the mercy of the overall economic environment.  Most of Verso’s business comes from the direct mailing and catalog industries which are seeing volumes decline as weak consumer spending makes this type of advertising much less effective.  Industry statistics showed a 4% decline in catalog circulation in the first quarter which is certainly not good news for the company.  While many analysts are optimistic that these dynamics will change, an optimistic viewpoint seems more based on hope than on the current evidence in the market.

Analysts Applaud HudBay-Skye Deal; Rival Bid Unlikely

FP Trading Desk submits:

Analysts like what they see from HudBay Minerals Inc.'s (HBMFF.PK) C$432-million friendly offer to buy Skye Resources Inc. (SKRZF.PK), despite some dilution for shareholders.

In a note to clients, Desjardins Securities analyst John Hughes wrote:

Magna International: Slumping SUV and Pickup Sales Negatively Affect Earnings

FP Trading Desk submits:

RBC Capital Markets analyst Nick Morton has cut his valuation, earnings per share estimates for Magna International Inc. (MGA), arguing Canada’s biggest auto supplier will be hit by a potentially lengthy slump in U.S. SUV, and pickup sales as its largest customers drastically slash truck output.

He maintained his “outperform” rating on the shares, arguing it remains a good investment because it has C$18 a share of net cash and trades at a “very depressed” three times estimated 2008 EBITDA.

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