Tobacco Stocks: Smoke ‘Em If You Got ‘Em
Published on Monday, 21 May 2012 19:49 Written by Todd Shriber
Plenty of judgment can be passed on the habit of tobacco consumption and the reality is the habit has been proven to be toxic to one’s health. Fortunately, one does not have to smoke to reap the rewards of tobacco stocks. Tobacco stocks are really the epitome of "sin stocks," though the infamy their products have gained for being so unhealthy is arguably unfair compared to the likes of McDonald’s (NYSE: MCD) and Coca-Cola (NYSE: KO).
Both of those companies hawk products that can lead to myriad serious health problems and both firms and their nearest rivals have certainly contributed to a serious obesity epidemic in the U.S. that costs the country billions of dollars in lost productivity every year. Still, tobacco stocks are seen as far more evil than hamburger or soda companies.
Well, tobacco stocks aren’t evil for investors and an investor doesn’t need to engage in the habit to profit from it. Think about tobacco stocks this way: Let someone else enjoy the habit while you enjoy your dividends and capital appreciation.
Philip Morris International (NYSE: PM):
Philip Morris International is the international version of the former Philip Morris. Altria (NYSE: MO) is the firm that’s more focused on domestic tobacco markets. The returns offered by both stocks in 2012 are almost identical, but long-term investors, of which the tobacco sector attracts many, might want to consider PM over MO.
The reason for that is simple and it involves one key fundamental. PM’s international exposure will be an important driver of growth in the coming years. Smoking is vilified here in the U.S., but in other countries, particularly fast-growing emerging markets, smoking is seen as a glamorous status symbol.
Japan Tobacco (PK: JAPAF):
Don’t worry about the fact that Japan Tobacco trades on the pink sheets. It’s actually quite common for large foreign companies to seek a U.S. listing on the pink sheets as a way of saving money. If it makes you feel any better, Nestle (PK: NSRGY), the world’s largest food company, is also listed on the pinks.
The company is of course dominant in its home country, another place where smoking is far more widely accepted than it is here in the states. Japan Tobacco also recently said it would consider emerging markets acquisitions in Asia and Latin America to boost its global profile.
Vector Group (NYSE: VGR):
With a market cap of just $1.3 billion, Vector Group fits the bill as a small-cap stock, but this not a fly-by-night operation as the company has been in business for 140 years. Vector’s brands are not as recognizable as Camel or Marlboro, but the shares yield almost 10%, by far the highest in the tobacco group and that’s saying something because tobacco stocks are prized for their dividends.
As a small-cap, Vector Group is more volatile than say Altria or Philip Morris and in a market environment where small-caps are being punished, patient investors might want to wait on Vector Group as better pricing (and a higher yield) could materialize in the coming weeks.
Heist of the century: university corruption and the financial crisis - The Guardian
Many people who saw my documentary Inside Job found that the most disturbing portion of the film was its revelation of widespread conflicts of interest in universities, at thinktanks, and among academic experts. Viewers who watched my interviews with eminent professors were stunned at what came out of their mouths.
Yet we should not be surprised. Over the past couple of decades medical professionals have amply demonstrated the influence money can have in a supposedly objective, scientific field. In general, medical schools and journals have responded well, adopting disclosure requirements. The economics discipline, business schools, law schools and political science schools have reacted very differently.
Over the past 30 years, significant portions of American academia have deteriorated into "pay to play" activities. These days, if you see a famous economics professor testify in Congress, or write an article, there is a good chance he or she is being paid by someone with a big stake in what's being debated. Most of the time, these professors do not disclose these conflicts of interest, and most of the time their universities look the other way.
Half a dozen consulting firms, several speakers' bureaus and various industry lobbying groups maintain large networks of academics for hire for the purpose of advocating industry interests in policy and regulatory debates. The principal industries involved are energy, telecommunications, healthcare, agribusiness – and, most definitely, financial services.
Some examples. Glenn Hubbard became dean of Columbia Business School in 2004, shortly after leaving the George W Bush administration. Much of his academic work has been focused on tax policy. A fair summary is that he has never seen a tax he would like. In November 2004 Hubbard co-authored an astonishing article, jointly with William C Dudley, then chief economist at Goldman Sachs. The article, How Capital Markets Enhance Economic Performance and Facilitate Job Creation, warrants quotation. Remember, this is November 2004, with the bubble well under way: "The capital markets have helped make the housing market less volatile ... 'Credit crunches' of the sort that periodically shut off the supply of funds to home buyers … are a thing of the past."
Hubbard refused to say whether he was paid to write the article. He also refused to provide me with his most recent government financial disclosure form, which we could not obtain otherwise because the White House had destroyed it. Hubbard was paid $100,000 (£63,000) to testify for the criminal defence of two Bear Stearns hedge fund managers prosecuted in connection with the bubble, who were acquitted. Last year, Hubbard became a senior economic adviser to Mitt Romney's presidential campaign.
Larry Summers has held almost every important government position in economics. Treasury secretary under President Clinton, in 2009 he became director of the National Economic Council in the Obama administration.
Although sensible about many issues, Summers has made a succession of well-documented mistakes and compromises. And his views on the financial sector would be hard to distinguish from those of, say, [Goldman Sachs chief] Lloyd Blankfein or [JP Morgan boss] Jamie Dimon.
Most of our information about Summers comes from his mandatory government disclosure form. Summers' 2009 disclosure form stated his net worth to be $17m-$39m. His total earnings in the year prior to joining the government were almost $8m. Goldman Sachs paid him $135,000 for one speech.
Summers is a compromised man who owes most of his fortune and much of his political success to the financial services industry, and who was involved in some of the most disastrous economic policy decisions of the past half century. In the Obama administration, Summers opposed strong measures to sanction bankers or curtail their income.
Harvard still does not require Summers to disclose his financial-sector involvements. Both Harvard and Summers declined my requests for information.
The problem of academic corruption is now so deeply entrenched that these disciplines, and leading universities, are severely compromised, and anyone considering bucking the trend would rationally be very scared. Consider this situation: you're a PhD student, or a junior faculty member, considering doing some research on, say, compensation structures on risk-taking in financial services, or the potential impact of public disclosure requirements on the market for credit default swaps. The president of your university is … Larry Summers.
The chairman of your department is …Glenn Hubbard. Or you're at MIT, and you want to examine the decline in corporate tax payments. The president of MIT is Susan Hockfield, on the board of GE, a company that has managed to avoid paying hardly any corporate taxes for several years.
How much do these forces actually affect academic research and policymaking? The available evidence suggests that the effect is large.
Academic commentary on the financial crisis by economists has been remarkably muted. There are, to be sure, some notable exceptions. But for the most part, the silence has been deafening. How can an entire industry come to be structured such that employees are encouraged to loot and destroy their own firms? Why did deregulation and economic theory fail so spectacularly?
The release of the film Inside Job clearly touched a nerve with regard to these questions. I was contacted by a large number of students and faculty, and there has been a great deal of debate. Departments including the Columbia Business School have adopted disclosure requirements for the first time. But most universities still have no such requirements, and few if any have any limitations on the existence of conflicts of interest. The same is true of most academic publications. Newspaper reporters are strictly prohibited from accepting money from any industry or organisation they write about.
Not so in academia.
There has been one significant positive development. Earlier this year, the American Economics Association adopted a disclosure requirement for the seven journals it publishes. But most institutions continue to oppose further disclosure and, when I was making my film, refused even to discuss the subject.
This is an edited extract from Inside Job: the Financiers Who Pulled Off the Heist of the Century by Charles Ferguson, published by Oneworld at £12.99. Order a copy for £10.39 with free UK p&p here or call 0330 333 6846. Charles Ferguson will appear at the Edinburgh international book festival on Sunday 12 August.
Coil stocks high on lack of state demand, Russian domestic traders say - Metalbulletin
Copying and distributing are prohibited without permission of the publisher
May 21, 2012 - 09:43 GMT Location: Moscow
KEYWORDS: Russia , hot rolled coil , HRC , cold rolled coil , CRC , stocks , Novolipetsk Steel , NLMK , Magnitogorsk Iron & Steel
Steel traders in Russia’s domestic market are holding “high” or “extremely high” stock levels of hot rolled coil and cold rolled coil (HRC and CRC) because of a lack of state orders, traders told Metal Bulletin on Monday May 21.
“Our stocks are extremely high, and we are still selling some metal we bought late last year and at the beginning of 2012,” a St Petersburg-based trader said. “Our stock level is high due to the absence of government orders in the construction sector,” a Rostov-based trader said. As a result, he will not buy any CRC in June, he added. A Moscow-based trader said her company’s stocks coefficient stands at 2, meaning that the company is selling half what it has at its warehouses each month. Traders said the dearth of domestic demand...
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US STOCKS-Wall St bounces but investors dump Facebook - Reuters
* Facebook shares down 12 pct, trades near $33/share
* World leaders back Greece, vow to combat crisis
* Apple stock boosts Nasdaq
* Stocks: Dow up 0.7 pct, S&P up 1 pct, Nasdaq up 1.3 pct
By Edward Krudy
NEW YORK, May 21 (Reuters) - U.S. stocks rose on Monday after their worst weekly decline for the year with signs investors were quickly exiting newly floated shares of Facebook following its broken IPO and redeploying capital elsewhere in the market.
Facebook Inc's shares fell below their $38 issue price as support from underwriters of the initial public offering dissipated after its Friday debut. The stock dropped over $5 to hit a session low of $33.00 in early trading, last trading down 11.8 percent at $33.71.
That contrasted with a sizeable rally in shares of Apple, which rose 2.8 percent to $545.14. Apple's shares are off almost 15 percent from a peak in April.
"People were coming out of Apple to participate in Facebook," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "Facebook is not doing what they thought it would so maybe they'll take that capital back where they had it."
On Saturday, G8 leaders stressed that their "imperative is to promote growth and jobs" and gave verbal backing for Greece to stay in the euro. That helped lift the sentiment after failed elections in Greece lifted speculation that the country was headed toward exiting the euro zone.
"We sold off on some fear and not all of that fear was realized," said Lesh. "We're in a bit of an oversold bounce in here at the moment and whether we're going to build on all of this we'll find out this week; we'll still hostage to European news and will be for the foreseeable future."
The Dow Jones industrial average gained 82.27 points, or 0.67 percent, to 12,451.65. The Standard & Poor's 500 Index rose 12.40 points, or 0.96 percent, to 1,307.62. The Nasdaq Composite Index added 36.92 points, or 1.33 percent, to 2,815.71.
Investors are watching 1,300 to 1,290 range on the S&P 500 as a major support level, the lower end of which was tested last week after the index fell 7.8 percent since April. The bottom of the range coincides with the index's 10 month moving average.
"The ability to find support near 1,290-1,300 can trigger buyers to return, igniting the next sustainable rally towards our 2012 target in the mid-1,400s and possibly overshoot to low-1,500s," said technical analysts at UBS.
Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.
"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
In earnings news, Lowe's Cos Inc, the world's second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter. The shares fell 9.8 percent to $25.69.
Yahoo shares rose 0.5 percent to $15.50 after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.
The Nasdaq said it plans to implement procedures through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company's market debut on Friday. Nasdaq shares gained 2.6 percent after falling more than 4 percent on Friday.
US STOCKS-Wall St edges up but Facebook's decline weighs - Reuters UK
* Facebook shares down 13 pct, trades near $33/share
* World leaders back Greece, vow to combat crisis
* Stocks: Dow up 0.2 pct, S&P up 0.2 pct, Nasdaq flat (Updates to market open)
By Angela Moon
NEW YORK, May 21 (Reuters) - U.S. stocks edged up on Monday from their worst weekly decline for the year as world leaders expressed support for Greece to stay in the euro zone, but gains were limited as shares of Facebook dropped more than 13 percent shortly after the open.
Facebook Inc's shares fell below their $38 issue price as support from underwriters of the initial public offering dissipated after its Friday debut. The stock dropped over $5 to hit a session low of $33.00 in early trading.
"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.
On Saturday, G8 leaders stressed that their "imperative is to promote growth and jobs" and gave verbal backing for Greece to stay in the euro. But gains were limited as the pledge was unlikely to herald quick new action from the region, meaning more uncertainly for nervous financial markets.
The Dow Jones industrial average was up 19.53 points, or 0.16 percent, at 12,388.91. The Standard & Poor's 500 Index was up 2.34 points, or 0.18 percent, at 1,297.56. The Nasdaq Composite Index was down 1.42 points, or 0.05 percent, at 2,777.37.
Yahoo shares fell 1 percent to $15.28 after rising in premarket trade, on news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing.
The Nasdaq said it plans to implement procedure through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company's market debut on Friday. (Reporting By Angela Moon, editing by Dave Zimmerman)
Financial Elder Abuse: Porterville Caregiver Accused - KMPH.com
What financial reports reveal about entertainment - AP - msnbc.com
Here is a summary of recent financial reports for selected entertainment companies:
April 12: Coinstar Inc. raises its first-quarter and full-year revenue guidance on the popularity of its Redbox movie business. Coinstar says recent price hikes didn't dampen movie rentals during the period as much as it thought they might. And consumer demand jumped on the popularity of movies such as "Moneyball" and "Puss and Boots."
April 23: Netflix Inc. says it added 1.7 million Internet video subscribers in the U.S. and 1.2 million elsewhere to end the quarter with 26.5 million. The company says it lost 1.1 million DVD customers to end with 10.1 million. Netflix says about 7 million of the DVD customers also subscribe to the streaming service. Although Netflix's comeback from a customer backlash accelerated during the first quarter, skittish investors keyed on a second-quarter forecast that calls for a slowdown in subscriber growth during the spring and early summer.
April 26: Coinstar Inc.'s first-quarter earnings soared as its Redbox kiosks proved there is still plenty of money to be made renting low-priced DVDs while Netflix and other services focus on streaming video. Revenue climbed 34 percent. Most of the gains flowed from the nearly 37,000 Redbox kiosks that Coinstar has set up in stores to dispense DVDs for $1.20 per month. Redbox has been picking up more customers since Netflix' raised its prices by as much as 60 percent last summer.
April 27: Big-screen theater technology company Imax Corp. reports a first-quarter net income, reversing a loss, as its theater network expanded and audiences showed up in big numbers for movies such as "Mission: Impossible — Ghost Protocol" and "The Hunger Games."
May 1: CBS Corp. says net income grew 80 percent in the first quarter, as revenue surged on digital licensing deals for its TV shows and overseas sales of reruns.
Satellite radio company Sirius XM Radio Inc. says profit rose 38 percent, as it continued to add subscribers and raised prices.
May 2: Time Warner Inc. says adjusted income beat Wall Street's expectations on the strengths of the company's television and movie studio businesses. Big performers included "Sherlock Holmes: A Game of Shadows" and "Journey 2: The Mysterious Island." The Warner Bros. division also benefited from higher licensing revenue of TV shows and the availability of a CW television series on Netflix, but revenue from DVDs and other home entertainment sales fell.
Comcast Corp.'s NBCUniversal division shone in the quarter. It accounts for a third of Comcast's revenue, but grew much faster, at 18 percent from last year. Revenue at the NBC broadcast network grew 37 percent thanks to the Super Bowl, which was broadcast on Fox last year. Excluding the Super Bowl, NBC's revenue grew 17 percent, helped by improving prime-time ratings and shows like "The Voice" and "Smash." At Universal Studios, revenue grew 22 percent on the theatrical success of "Dr. Seuss' The Lorax" and "Safe House."
Movie studio DreamWorks Animation SKG Inc. says first-quarter earnings rose slightly as both revenue and costs increased. More than half of the company's revenue came from ticket sales of its animated feature "Puss in Boots" overseas and its release on home video in the U.S. Recent titles like "Kung Fu Panda 2" also contributed to revenue. The studio's second-quarter and full-year results are expected to be driven by the release of "Madagascar 3: Europe's Most Wanted" on June 8.
May 3: Viacom Inc., the owner of Paramount Pictures, MTV and Nickelodeon, says net income rose 56 percent, even though a slate of movies that was lackluster compared with last year held back revenue. Revenue rose 5 percent at Viacom's TV networks, and fell 5 percent at Paramount, as movies like "The Devil Inside," "A Thousand Words," and "Jeff, Who Lives at Home," did not match hits from last year like "Rango" and "No Strings Attached." However, the lower movie revenue was more than offset by lower distribution costs, so Paramount's operating income expanded, contributing to the overall profit increase.
May 8: The Walt Disney Co. says net income in the first three months of the year grew 21 percent as better performance from pay TV network ESPN and its theme parks offset a loss at the movie studio driven by the flop "John Carter." Disney's movie studio had a loss of $84 million, which was on the low end of the $80 million to $120 million range that the company forecast based on the box office performance of "John Carter." Revenue fell 12 percent to $1.2 billion.
May 9: News Corp. says net income increased 47 percent thanks to strong performances at its pay TV networks and its movie studio. News Corp. books $63 million in legal fees in the quarter to deal with an ongoing investigation into phone hacking at its British newspaper unit.
May 10: Sony Corp. says sales improved in its film business in the fiscal year through March. It was lifted by TV shows it produced and home video sales of movies. Profits fell slightly, despite the popularity of "The Smurfs" and "Bad Teacher," offsetting the failure of "Arthur Christmas." Sales and profit both dropped in its music business. Best-sellers included Adele's "21" and Beyonce's "4."
Coming up:
May 30: Lions Gate Entertainment Corp.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Fairfax Financial buys Thomas Cook India stake - Reuters India
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Stocks, oil rise as G8 leaders pledge growth - Reuters India
NEW YORK |
NEW YORK (Reuters) - Global stocks on Monday rebounded from lows for the year and oil prices rose for the first time in four sessions as world leaders emphasized support for growth in the euro zone, and China said priority should be given to maintaining its economic expansion.
Still, most investors and analysts see the pause in selling of stocks, oil and other commodities as temporary, given the uncertainties ahead for Greece, which holds national elections on June 17.
Risk that Greece might leave the euro zone curbed a recovery for the euro, which stabilized above its lowest level in about four months.
On Saturday, leaders of the Group of Eight nations stressed that their "imperative is to promote growth and jobs" for the euro zone, and expressed support for Greece to stay in the euro.
Despite calls from the United States for immediate moves to boost growth, no sign emerged that Germany would soften its stance on austerity as the cure for Europe's debt problems.
"We're in a bit of an oversold bounce in here at the moment and whether we're going to build on all of this we'll find out this week. We'll still be hostage to European news and will be for the foreseeable future," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
The absence of negative news from Europe revived some appetite for U.S. equities despite a selloff of Facebook shares following its lackluster debut on Friday.
The Dow Jones industrial average gained 135.10 points, or 1.09 percent, to close at 12,504.48. The Standard & Poor's 500 Index rose 20.77 points, or 1.60 percent, to finish at 1,315.99. The Nasdaq Composite Index advanced 68.42 points, or 2.46 percent, to close at 2,847.21.
U.S. stocks came off their worst weekly loss in a year as Facebook's sloppy debut on Friday disappointed investors. The social networking company's stock lost 11 percent on Monday to close at $34.03 on Monday. It fell as low as $33 - $5 below its initial offering price, wiping out $10 billion of its market value.
While Facebook shares faded after much fanfare, established technology companies did better, led by Apple Inc whose shares rose 5.8 percent to $561.28.
The FTSE Eurofirst index of top European shares closed up 0.5 percent at 975.04 after losing 5.1 percent last week to reach its lowest level of the year.
The MSCI world equity index rose 1.1 percent to 301.33. It clawed above where it started the year after erasing all the gains made due to a concerted round of easing by central banks in the first quarter.
Spain's prime minister said on Monday that urgent solutions were needed to guarantee financial stability in Europe. On Friday, Spain revised upward its estimated 2011 budget deficit.
Spanish benchmark 10-year bond yields held at 6.29 percent, while the 10-year Italian debt yield was flat at 5.94 percent. These long-term borrowing costs are seen as unsustainable for the euro zone's fourth- and third-largest economies, respectively.
The euro rose 0.25 percent in choppy trading to $1.2814, well above Friday's four-month low of $1.2642, which was not far from its lowest point for 2012.
The dollar index slipped 0.43 percent to 80.941 after touching its highest level since mid-January on Friday on heavy bids for the U.S. currency and other perceived safe-haven assets.
Nagging jitters over the financial contagion from the festering debt problem in Europe offset earlier profit-taking on U.S. and German government debt.
Benchmark U.S. Treasury yields touched historic lows and Bund futures hit contract highs last week on bids from nervous investors.
The 10-year U.S. Treasury note slipped 6/32 in price for a yield of 1.74 percent, just 7 basis points above its lowest intraday level in at least 60 years, while German Bund futures edged down 15 basis points to 143.49 after touching a contract high of 144.06 last week.
OIL RISES ON CHINA'S GROWTH STANCE
Signs that China, the world's second-largest economy, was willing to support measures to boost growth offset some of the euro-zone worries in global stocks and commodity markets.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth," Premier Wen Jiabao said in comments reported by state news agency Xinhua on Sunday.
Brent crude recovered from a 2012 low, on hopes the Chinese premier's announcement could mean strong fuel demand by the world's second-largest oil user, although concerns about the euro-zone crisis capped gains.
Brent gained for the first time in four sessions, rising $1.67, or 1.56 percent, to settle at $108.81 a barrel. In New York, U.S. June oil futures gained $1.09, or 1.19 percent, to end at $92.57 a barrel.
Three-month copper futures on the London Metal Exchange gained 1 percent to settle at $7,731 a tonne.
Spot gold prices last traded flat at $1,592.69 an ounce, erasing an earlier loss with a late bounce in the euro.
(Reporting by Ed Krudy and Richard Leong in New York, Richard Hubbard, Anirban Nag, Jessica Donati in London, Umesh Desai in Hong Kong; Editing by Jan Paschal)
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