Over the next five years, it is expected that there will be a strong demand for deepwater and ultra-deepwater (UDW) rigs, as major oil and gas producers increasingly look towards offshore production in water exceeding depths of 5,000 feet. Despite this being a relatively high-risk area of operation, producers hope that the increased danger will be offset by larger and more lucrative hydrocarbon reserves.
Indeed, as of October 2012 more »
Jim Rogers has been banging on about farmland investment recently and he has a point. Depressed crop prices and monetary outflows from emerging markets have depressed the values of both farmland and farm stocks, so where do the opportunities lie?
Relatively low-risk Brazil
Adecoagro (NYSE: AGRO) buys, develops, farms/operates, and occasionally sells farmland. Currently, the company owns 145,000 hectares spread across multiple farms in Argentina, Brazil, and Uruguay more »
Any investor will tell you that the key to long-term sustainable investment returns is through diversification. Diversification through stocks is one thing, but companies that are not diversified themselves are another.
Companies that rely on only one production facility, one product or, one product line are exposing themselves to significant risks, such as the loss of a production facility, or boycotts and changing trends, all of which can quickly erase more »
I like to look for undervalued companies by searching for stocks that have put in the worst performances over the past week or month. However, it is not always that easy, as some companies have further to fall and there's no thesis for a long-term investment. So how do some of the biggest decliners this month stand up to analysis?
First up, then down 24% this month
Intuitive Surgical more »
Expedia (NASDAQ: EXPE) has been one of the worst performers of the whole market in the past week, with the stock falling nearly 30% in just two days.
What went wrong?
Expedia is a good example of a growth company that missed expectations. Before the declines, the company traded at a trailing 12-month P/E ratio of 65 compared to the sector average of around 23.
Expedia was expecting to more »
In this market, it is becoming hard to find companies that are undervalued. In particular, with the market reaching all-times highs, valuations are becoming somewhat distorted and value is becoming more and more hidden.
However, there is one valuation method that gives a good indication of how the stock is valued compared to the whole market and risk-free bonds, allowing for a more comprehensive evaluation.
A company's earnings yield more »
Before the announcement of second-quarter results, Philip Morris International (NYSE: PM) always had the edge over former parent company Altria (NYSE: MO). However, Philip Morris' poor second quarter highlights how the company is struggling to grow worldwide with many different factors pulling the company down, such as the strong US dollar, excise taxes rising faster than sales and competition.
Altria, on the other hand, is still growing thanks to the more »
Netflix (NASDAQ: NFLX) is somewhat of a cult stock. Indeed, the company has not made a sizable profit for the last two years, but yet, the stock price keeps rising. However, there could be some gaps starting to show in the company's strategy.
For a start
First off, the company's margins. Netflix's gross margins have risen from 61% in the first quarter of 2011 to a high more »
Crocs (NASDAQ: CROX), just like its feature product, is a love-hate company. The stock's valuation, compared to the rest of the sector, looks attractive (on a historical basis anyway). The company has tried to reinvent itself by putting new products on the market, but so far, according to the company's most recent results, this strategy is not working.
The fashion world is fickle and highly competitive, and for more »
A key part of the economic recovery is infrastructure growth and a good way to play this trend lies in the railroad stocks.
However, I am less interested in the traditional railroad companies such as Union Pacific (NYSE: UNP) and CSX but the rail car manufacturers, in particular, American Railcar Industries (NASDAQ: ARII) and FreightCar America (NASDAQ: RAIL).
Both companies have their strengths and weaknesses and the best way to more »
With the market consistently hitting new all-time highs, the best companies in the market are starting to look overvalued when compared to historical valuations. That said, there are some companies that still look undervalued, however they are not currently in favor with the market and have become slightly contrarian in nature.
So, here are three contrarian picks to help navigate the market in these uncertain times.
An unloved miner
Hecla more »
It has finally happened. The FDA has finally started to seriously raise the issue of a full-on ban on menthol tobacco products. However, before it takes action, the administration has decided to purse more research and public comment on the issue. On July 23, the FDA issued what it called '"an advanced notice of proposed rule making," which typically indicates that the administration is considering regulation. In this case, it more »
The market as a whole could be overvalued, or depending on who you listen to, the market is still undervalued. Whatever the case, there are lots of individual stocks on the market that appear overvalued based on their own historic valuations and in relation to their peers.
Although it is difficult to decipher whether or not the market is overvalued, or indeed undervalued, it is possible to gauge to a more »
It maybe too early to call it just yet but initial indications seem to suggest that the euro zone is actually on the road to recovery. I make this statement after a flood of good information from the euro zone over the past few days. The Markit 'flash' estimate of its composite purchasing managers index for July rose to 50.4 from 48.9 in June - a reading over 50 more »
Miners have been out of favor with investors for the past year or so as the falling price of gold and continual write-downs have sent stock prices to rock-bottom levels. However, while the majority of the sector is useless, with most companies suffering horrendous cash burn and rising debt, there are a few diamonds in the rough.
The tiny South African producer
Second quarter results for the country's biggest banks appear to show that the glory days of banking are back. The total net income of JPMorgan (NYSE: JPM), Wells Fargo (NYSE: WFC), Citigroup (NYSE: C), Bank of America, Goldman Sachs (NYSE: GS) and Morgan Stanley touched a level not seen since the second quarter of 2007, and more importantly, the banks did this on a loan to deposit ratio of more »
Earnings yield is a valuation method used by some analysts to compare individual companies to the rest of the market and government bonds, in particular, the risk-free 10-year Treasury. Currently the earnings yield for the S&P 500 stands at 5.1%, while the current 10-year Treasury yield is about 2.5% - indicating that the market as a whole is undervalued compared to bonds.
What about individual companies? Well, surprisingly more »
No one really knows where this market is going. It continues to trend upwards, but downside risks such as China and the specter of Fed tapering continue to overshadow gains.
Still, although it is impossible to predict the direction of the market, it is easier to forecast the direction of individual stocks. And there are plenty of companies in the market that are currently trading on metrics that suggest that more »
The market is missing something with chemical's company Axiall (NYSE: AXLL) and miner Pan American Silver (NASDAQ: PAAS). Both companies have very strong cash flows, generating huge amounts of cash, but despite this, the market is still placing a lower valuation on them than that of their peers.
Why is this?
Axiall has been sold off recently after a poor set of first quarter results. The company made a more »
Deathcare is an industry that is always going to be in demand. Indeed, there will never be a shortage of death and death rates will always rise as the population continues to grow at an ever faster rate. However, there are not that many investments that the average investors can make in the market for death unless they decide to go out and start a firm themselves.