U.S. technology stocks, the second-best industry of the past decade, have fallen to the cheapest levels in at least seven years and are vulnerable to more losses as analysts reduce second-quarter profit estimates.
Earnings at computer companies will fall 5.5 percent in the three months through June as consumers and government agencies cut spending, according to more than 2,000 analyst estimates tracked by Bloomberg. The group, led by Apple Inc. (AAPL) and International Business Machines Corp. (IBM), trades at 13 times projected profit, the lowest level compared with the Standard & Poor’s 500 since Bloomberg began compiling the data in 2006.
Bulls say the unprecedented discount means technology stocks, which tend to lead during expansions, are too cheap to pass up as the world economy grows. Bears say the shares will remain the worst-performing group in the S&P 500 this year with companies and governments spending less on technology as growth weake ns in Europe and China. President Barack Obama’s proposed budget would reduce spending on information technology by $2.5 billion by 2015, according to Bloomberg Industries.
Top Cheapest Stocks To Buy Right Now: Hauppauge Digital Inc.(HAUP)
Hauppauge Digital Inc. engages in the design, development, manufacture, and marketing of analog and digital TV tuner products for the personal computer (PC) market in the Americas, Europe, and Asia. It offers video recorder products, such as USB-Live2, a standard definition video recorder used to record video tapes and other types of video into a PC; HD PVR, a high-definition video recorder for making real-time H.264 compressed video recordings at resolutions up to 1080i, and to record old home video tapes into an AVCHD format; and Colossus to record high definition video from a cable TV or satellite set top box, or an Xbox 360 or Sony playstation 3 game console. The company also provides TV receivers, including Broadway that connects to a TV signal and then transmits that TV signal through a Wi-Fi network or the Internet; analog TV tuners to enable a PC user to watch analog cable TV in a resizable window; digital TV receivers and hybrid analog/digital TV receivers, which allow a PC user to watch digital television in a resizable window on a PC or laptop screen; and PCTV TV tuner products that allow users to view television programming on their computers. In addition, it offers non-TV tuner products comprising WinTV application, a PC-based TV watching, pause, and recoding application; WinTV Extend software product, a PC-based Internet video server that streams live TV or other video content to remote devices; Impact video capture board for PC-based video conferencing and video capture in industrial applications; MediaMVP-HD, a Linux-based digital media device that links TV sets and PCs; and MediaMVP to watch and listen to PC-based videos, music, and pictures on a TV set through a home network, as well as provides an on-TV-screen display of media directory listings. The company sells its products through retailers, PC manufacturers, and distributors. Hauppauge Digital Inc. was founded in 1994 and is headquartered in Hauppauge, New York.
- [By Monica Gerson]
Hauppauge Digital (NASDAQ: HAUP) shares fell 8.70% to touch a new 52-week low of $0.42. Hauppauge Digital shares have dropped 61.02% over the past 52 weeks, while the S&P 500 index has gained 18.17% in the same period.
Top Cheapest Stocks To Buy Right Now: RDA Microelectronics Inc.(RDA)
RDA Microelectronics, Inc., a fabless semiconductor company, designs, develops, and markets radio-frequency and mixed-signal semiconductors for cellular, broadcast, and connectivity applications. Its products include power amplifiers, transceivers and front-end modules, FM radio receivers and transmitters, set-top box tuners, analog mobile television receivers, walkie-talkie transceivers, LNB satellite downconverters, and Bluetooth system-on-chips for mobile handsets. The company?s products also comprise GSM/EDGE power amplifier modules, GSM transceivers, TD-SCDMA transceivers, SCDMA transceivers, 3G switch modules, GSM power amplifier and switch modules, PHS transceivers, TD-SCDMA/GSM dual-mode transceivers, and radio frequency switches; DVB-T tuners, DVB-S and DVB-S2 satellite tuners, analog mobile television receiver system-on-chips, and FM radio receivers with radio data system; and Bluetooth + FM system-on-chips for mobile handsets and walkie-talkie transceivers for p rofessional applications. Its products are incorporated into mobile handsets, set-top boxes, MP3 players, and other wireless and consumer electronic devices. RDA Microelectronics sells its products through distributors in the People?s Republic of China, southeast Asia, India, the Middle East, Africa, the Russian Federation, and Latin America. The company was founded in 2004 and is headquartered in Shanghai, the People?s Republic of China.
- [By Anna Prior]
RDA Microelectronics Inc.(RDA) agreed to be acquired by a unit of Chinese state owned Tsinghua Holdings Co. in a deal estimated at $910 million. RDA Microelectronics shareholders will receive $18.50 per American depositary share, a 5.5% premium to Friday’s close.
- [By Jake L’Ecuyer]
RDA Microelectronics (NASDAQ: RDA) was also up, gaining 11.12 percent to $17.28 after the company announced the receipt of $18.00/ADS acquisition proposal from Tsinghua Unigroup.
- [By Luke Jacobi]
RDA Microelectronics (NASDAQ: RDA) shot up 11.96 percent to $15.54 after the company received a non-binding acquisition proposal.
Finish Line (NASDAQ: FINL) got a boost, shooting up 9.02 percent to $24.41 after the company reported a 6.1 percent rise in its fiscal second-quarter earnings.
- [By Lauren Pollock]
RDA Microelectronics Inc.(RDA) has received a takeover proposal from Shanghai Pudong Science & Technology Investment Co. valuing the Chinese semiconductor company at $745 million. PDSTI, a state-owned investment company, offered to buy RDA for $15.50 an American depositary share, a 12% premium to RDA’s closing price Thursday. RDA shares were halted premarket ahead of the news.
Top Cheapest Stocks To Buy Right Now: Gastar Exploration Ltd (GST)
Gastar Exploration Ltd (Gastar) is an independent energy company engaged in the exploration, development and production of natural gas and oil in the United States. The Company’s principal business activities include the identification, acquisition, and subsequent exploration and development of natural gas and oil properties with an emphasis on unconventional reserves, such as shale resource plays. As of December 31, 2011, it is pursuing the development of liquids-rich natural gas in the Marcellus Shale in the Appalachia area of West Virginia and, to a lesser extent, central and southwestern Pennsylvania. The Company also holds prospective acreage in the deep Bossier play in the Hilltop area of East Texas and conduct limited coal bed methane (CBM) development activities within the Powder River Basin of Wyoming and Montana. The Company is a holding company. Advisors’ Opinion:
- [By Robert Rapier]
Gastar Exploration (NYSE: GST) is another Aggressive Portfolio pick made on Dec. 11, and so far it has rallied quite aggressively, producing a three-week capital gain of 26 percent. It helped here too to catch the very bottom of the recent correction, but Gastar has continued to report strong test well results from the Hunton Limestone play it’s pioneering in Oklahoma.
- [By Heather Ingrassia]
Gastar Agreement: On April 1st it was announced that Gastar Exploration, Ltd. (GST) had entered into a definitive agreement to acquire proven reserves and undeveloped leasehold interests in Kingfisher and Canadian counties of Oklahoma from Chesapeake Energy Corporation, repurchase Chesapeake’s common shares of the Company and settle all litigation for $1 million. Although smaller in scope than most of Chesapeake’s previous asset-shedding transactions, the agreement with Gastar accomplishes two things. First, is the fact the settlement resolves the legal wrangling both companies were engaged in and as a result Chesapeake walks away with $85 million of the potential $130 million they were suing for. Second, is the fact Chesapeake wipes it hands of acreage, that although producing, may not be producing as much as Chesapeake had once hoped, and therefore was worth much more to Gastar in the long run.
Top Cheapest Stocks To Buy Right Now: Spansion Inc(CODE)
Codere, S.A. engages in the management of gaming machines, bingo halls, horse racing tracks, casinos, and off-track betting facilities in Argentina, Brazil, Colombia, Italy, Mexico, Spain, Panama, and Uruguay. As of December 31, 2008, the company managed 54,818 slot machines and electronic bingo terminals, 137 bingo halls with 30,803 seats, 106 off-track betting facilities, 3 horse racing tracks, and 6 casinos. It also operated 15,963 AWP machines in approximately 10,886 bars and restaurants in Spain. Codere, S.A. was founded in 1980 and is headquartered in Alcobendas, Spain.
- [By Seth Jayson]
Spansion (NYSE: CODE ) reported earnings on April 30. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), Spansion missed estimates on revenues and beat expectations on earnings per share.
- [By Tim Brugger]
Based on a review of “preliminary financial results,” embedded systems solutions provider Spansion (NYSE: CODE ) has lowered its second quarter 2013 revenue and earnings guidance, the company announced today.
Top Cheapest Stocks To Buy Right Now: Theravance Inc.(THRX)
Theravance, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of small molecule medicines for various therapeutic areas, including respiratory disease, bacterial infections, and central nervous system (CNS)/pain. The company?s key development programs with GlaxoSmithKline (GSK) include the RELOVAIR, a Phase 3 clinical trial program for the treatment of patients with chronic obstructive pulmonary disease (COPD) and/or asthma; the LAMA/LABA program, a Phase 3 COPD program; and the Bifunctional Muscarinic Antagonist-beta2 Agonist (MABA) program, a Phase 2b program for the treatment of COPD, as well as Peripherally Selective Mu-Opioid Receptor Antagonist (P Advisors’ Opinion:
- [By Sean Williams]
A revolutionary COPD treatment?
On Wednesday, chronic obstructive pulmonary disease, or COPD, treatment collaborators GlaxoSmithKline (NYSE: GSK ) and Theravance (NASDAQ: THRX ) are set to go before the FDA’s panel with their combo Breo Ellipta. This revolutionary drug combines Theravance’s long-acting beta-2 agonists with Glaxo’s long-acting muscarinic antagonists into a dry powder inhaler to provide long-term COPD relief.
- [By Sean Williams]
What: Shares of Theravance (NASDAQ: THRX ) , a biopharmaceutical company that focuses on central nervous system and respiratory disorders, leapt as much as 19% — its second double-digit jump this week — following a positive recommendation from the Food and Drug Administration’s panel regarding COPD drug Breo Ellipta.
- [By Keith Speights]
Shares of Theravance (NASDAQ: THRX ) popped 34% this week. The nice gains came after Theravance and partner GlaxoSmithKline (NYSE: GSK ) announced that the FDA’s Pulmonary-Allergy Drugs Advisory Committee voted 9-4 to recommend Breo Ellipta for approval.
Top Cheapest Stocks To Buy Right Now: Research in Motion Limited(RIMM)
Research In Motion Limited (RIM) designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. The company, through the development of integrated hardware, software, and services, provides platforms and solutions for seamless access to time-sensitive information, including email, phone, short messaging service, and Internet and Intranet-based applications and browsing. Its products and services principally comprise the BlackBerry wireless platform, the RIM Wireless Handheld product line, software development tools, and other software and hardware. The company?s BlackBerry smartphones use wireless, push-based technology that delivers data to mobile users? business and consumer applications. Its BlackBerry smartphone portfolio includes BlackBerry Bold series, the BlackBerry Torch, BlackBerry Curve series, the BlackBerry Style, BlackBerry Storm series, the BlackBerry Tour, BlackBerry Pearl series, and the BlackBerry PlayBook tablet. T h e company?s BlackBerry enterprise solutions comprise BlackBerry enterprise server, BlackBerry enterprise server express, BlackBerry mobile voice system, and hosted BlackBerry services. Its technology also enables third party developers and manufacturers to enhance their products and services through software development kits, wireless connectivity to data, and third-party support programs. In addition, the company offers BlackBerry technical support services, non-warranty repairs, and nonrecurring engineering services. Further, it provides BlackBerry App World that offers BlackBerry smartphone users an electronic catalogue that aids in the discovery and download/purchase of applications directly from their BlackBerry smartphone. The company markets and sells its BlackBerry wireless solutions primarily through global wireless communications carriers, and third party distribution channels. Research In Motion Limited was founded in 1984 and is headquartered in Waterloo, Canad a .
- [By Holly LaFon]
If an idea doubles within a year, the contestant will win more. This month, GuruFocus is awarding author Jean-Francois Nobert (Ecotycoon) $1,000 for his idea, Research In Motion (RIMM), which doubled since he submitted in July.
- [By Matthew Indyke and Brian Zen]
Klarman said the following to investors in his Baupost letter earlier this year: “Our disciplined risk aversion throughout 2011 enabled us to avoid dangerous temptations and remain focused on investments in our areas of strength and competitive advantage.” Competitive advantage comes down to two questions. Can the company raise prices for their products while maintaining sales in a competitive environment? Can it continue to retain customers as the business undergoes operational and technological changes? One aspect for investors to keep in mind is that of technological change, a constant threat to industries like retail stores and mobile communications. Best Buy (BBY) used to be the go-to place where customers could shop for electronic appliances but internet retail took that away. RIM (RIMM) used to be a model company that produced phones for email on-the-go but competitors like Apple (AAPL) and Google (GOOG) upped the ante and took away the value of RIM’s produc ts. These kinds of circumstances show that keeping up with trends on a regular basis is a vital part of bottom-up investing.
- [By GuruFocus] rch-In-Motion is a high-profile case as renowned investor Prem Watsa bought into the company and sits on the company’s board. The stock was traded at above $140 in 2008. It has since lost more than 95%, traded at single digits and still sinking.
Again let’s take a look at its gross margin:
While BlackBerry was a must-have in the corporate world, the profit margin of Research-In-Motion has started to decline. This was well before Apple (AAPL) released its first iPhone. Again as pointed by Adib, value investors did not buy into RIMM while it was traded at $140 because the P/E ratio then was 45. Value investors bought into RIMM while it was traded at $30-40 because the P/E ratio was at 10. This was in 2009 and the decline in profit margin had been happening for three years.
Why You Should Avoid Margin Decliners?
The reason is simple. The company is losing its price power or it never had price power. Competition is eating into its market.
Will the profit margin of these companies ever recover sustainably? That is a “too-hard” question. We should avoid situations where we have to answer this question.
Will these companies ever become good investments? They may. But not until they become net-nets.
The Power of Margin Expansion
On the other hand, if a company can expand its profit margin, it has a competitive advantage. A good example here is Apple (AAPL), which is the king of all margin-expanding companies:
We all know what has happened to the stock of Apple.
GuruFocus will release a feature called “Warning Signs” which will warn you about the problems a company may have, including margin declines.
In the meantime, our new “All-In-One Screener” allows you to screen for the companies that can expand profit margins or those with declining margins. Those with expanding profit margins (think Apple) at reasonable prices will mostly likely be rewarding. Those
Top Cheapest Stocks To Buy Right Now: American Realty Capital Properties Inc (ARCP)
American Realty Capital Properties, Inc., incorporated on December 2, 2010, is a real estate investment trust (REIT). The Company owns and acquires single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with credit quality tenants. The Company is externally managed by ARC Properties Advisors, LLC. In February 2013, it announced the closing of the transaction to acquire American Realty Capital Trust III, Inc. In March 2013, it announced that it purchased a TD Bank office building in Falmouth, Maine. In April 2013, it closed lease acquisitions, including nine properties located in four states plus Puerto Rico with approximately 200,000 total rentable square feet. In April 2013, it closed an additional single tenant net lease acquisitions, including six properties leased to four investment grade or credit-worthy tenants, including CVS, Family Dollar, Hy-Vee and Advance Auto. In November 2013, American Realty Capital Properties, Inc acqu ired CapLease, Inc. Effective January 3, 2014, American Realty Capital Properties Inc, , through its Thunder Acquisition LLC unit, acquired the entire share capital of American Realty Capital Trust IV Inc (ARCT).
As of December 31, 2012, rental revenues derived from investment grade tenants. As of December 31, 2012, the Company owned 146 properties, which consists of 2.4 million square feet and located in 26 states, excluding one vacant property classified as held for sale. The Company is holder of 95.9% of the interest in the ARC Properties Operating Partnership, L.P.
- [By Charles Sizemore]
And he’s not the only insider buying. Director Sarofim Fayez chipped in $15 million of his own money, and Vice President James Street added $130,000. I recommend we invest with the insiders. At time of writing, KMI stock yields an attractive 4.7%, and management expects to raise the dividend by about 8% in 2014.
Dividend Stocks to Buy Now:American Capital Realty Properties (ARCP)
ARCP Dividend Yield: 7.5%
- [By Jim Fink]
Industry Diamond Offshore (NYSE: DO) $55.39 $7.7 billion 3.3 -14.2% Oil Drilling HCP Inc. (NYSE: HCP) $36.22 $16.5 billion 3.5 -16.0% Healthcare REIT American Realty Capital Properties (Nasdaq: ARCP) $12.64 $2.4 billion 8.6 1.9% Retail and Office REIT Southern Co. (NYSE: SO) $40.88 $36.1 billion 9.8 -0.1% Electric Utility Cooper Tire & Rubber (NYSE: CTB) $22.01 $1.4 billion 10.3 -11.8% Automobile Tires CenturyLink (NYSE: CTL) $31.36 $18.5 billion 11.8 -14.5% Telecommunications Quest Diagnostic (NYSE: DGX) $54.05 $7.8 billion 13.4 -5.4% Medical Diagnostic Tests Kinder Morgan Energy Partners (NYSE: KMP) $79.57 $34.9 billion 15.4 6.0% Energy pipeline MLP Altera (Nasdaq: ALTR) $31.98 $10.3 billion 15.9 -5.6% Semiconductors ADT Corp. (NYSE: ADT) $40.01 $8.0 billion 16.8 -12.9% Home Security
- [By Charles Sizemore]
Next on the list of monthly dividend stocks is one of Realty Income’s upstart competitors, American Capital Realty Properties (ARCP).
I call ARCP an “upstart” due to its short trading history (it’s only been trading since 2011). But the truth is, after its merger with Cole Properties (COLE), ARCP will be the largest triple-net REIT by market cap, and its total square footage will be nearly double that of Realty Income. And while ARCP stock has a short history, its executive team has an average of 20 years experience in the industry.
Top Cheapest Stocks To Buy Right Now: Home Bancorp Inc.(HBCP)
Home Bancorp, Inc. operates as the holding company for Home Bank that provides various banking services in Louisiana. The company offers various deposit products, including interest-bearing and noninterest-bearing checking, money market, savings, and negotiable order of withdrawal accounts; and demand deposit and certificates of deposit. It also provides various loan products, such as single-family residential first mortgage loans, commercial real estate mortgage loans, commercial loans, home equity loans and lines of credit, construction and land loans, and other loans. In addition, the company offers online banking, bank cards, and ATM services. As of December 31, 2010, it had 18 full-service banking offices in the Greater Lafayette, Baton Rouge, and Northshore regions of south Louisiana. The company was founded in 1908 and is headquartered in Lafayette, Louisiana.
- [By Tim Melvin]
The credit crisis slowed the pace of deals temporarily, but there are plenty of former thrifts trading at low valuations that have the potential for large long-term returns.
Home Bancorp (HBCP)
Home Bancorp (HBCP) is a 22-branch bank located in Lafayette, La. The bank has almost $1 billion in assets and the balance sheet is in excellent condition. Also, its equity-to-asset ratio is 14.5 — well above my preferred minimum of 10. Meanwhile, Home Bancorp’s nonperforming assets are just 2.09% of the total.
Top Cheapest Stocks To Buy Right Now: W.R. Berkley Corporation(WRB)
W. R. Berkley Corporation, an insurance holding company, operates as commercial lines writers in the property casualty insurance business primarily in the United States. The company operates in five segments: Specialty, Regional, Alternative Markets, Reinsurance, and International. The Specialty segment underwrites third-party liability risks, primarily excess, and surplus lines, including premises operations, professional liability, commercial automobile, products liability, and property lines. The Regional segments provide commercial insurance products to small-to-mid-sized businesses, and state and local governmental entities primarily in the 45 states of the United States. The Alternative Markets segment develops, insures, reinsures, and administers self-insurance programs and other alternative risk transfer mechanisms. This segment offers its services to employers, employer groups, insurers, and alternative market funds, as well as provides a range of fee-based servic es, including consulting and administrative services. The Reinsurance segment engages in the underwriting property casualty reinsurance on a treaty and a facultative basis, including individual certificates and program facultative business; and specialty and standard reinsurance lines, and property and casualty reinsurance. The International segment offers personal and commercial property casualty insurance in South America; commercial property casualty insurance in the United Kingdom and continental Europe; and reinsurance in Australia, Southeast Asia, and Canada. The company was founded in 1967 and is based in Greenwich, Connecticut.
- [By Monica Gerson]
W.R. Berkley (NYSE: WRB)is estimated to report its Q3 earnings at $0.74 per share on revenue of $1.57 billion.
V.F. Corp (NYSE: VFC) is projected to report its Q3 earnings at $3.78 per share on revenue of $3.34 billion.
- [By Laura Brodbeck]
Earnings reports expected on Monday include:
Netflix, Inc. (NASDAQ: NFLX) is expected to report third quarter EPS of $0.48 on revenue of $1.10 billion, compared to last year’s EPS of $0.13 on revenue of $905.09 million. Discover Financial Services (NYSE: DFS) is expected to report third quarter EPS of $1.19 on revenue of $2.07 billion, compared to last year’s EPS of $1.21. W.R. Berkley Corporation (NYSE: WRB) is expected to report third quarter EPS of $0.71 on revenue of $1.57 billion, compared to last year’s EPS of $0.61 on revenue of $1.42 billion. Gannett Co., Inc. (NYSE: GCI) is expected to report third quarter EPS of $0.44 on revenue of $1.27 billion, compared to last year’s EPS of $0.56 on revenue of $1.31 billion.
- [By Rich Duprey]
Insurance holding company W.R. Berkley (NYSE: WRB ) announced yesterday its second-quarter dividend of $0.10 per share, an 11% increase over the $0.09 per share it paid last quarter.
Top Cheapest Stocks To Buy Right Now: American International Group Inc.(AIG)
American International Group, Inc. is an international insurance organization. The company operates property and casualty insurance networks worldwide and conducts activities in the U.S. life insurance and retirement services industry. It also involves in commercial aircraft leasing and residential mortgage guaranty insurance businesses. The company, through Chartis Inc., provides various property and casualty insurance products under commercial and consumer categories worldwide. These products include surplus lines, executive liability/directors? and officers? liability, employment practices, excess casualty, and travel/assistance lines. American International Group, through SunAmerica Financial Group, offers a suite of life insurance and retirement products and services, including term life, universal life, accident and health, fixed and variable deferred annuities, fixed payout annuities, mutual funds, and financial planning products and services to individuals and grou ps in the United States. The company, through International Lease Finance Corporation, operates as an aircraft lessor that acquires commercial jet aircraft from various manufacturers and other parties, and leases those aircraft to airlines worldwide. It also sells aircraft from its fleet to other leasing companies, financial services companies, and airlines, as well as provides management services to third-party owners of aircraft portfolios. American International Group, through United Guaranty Corporation, issues residential mortgage guaranty insurance that covers mortgage lenders from the first loss for credit defaults on high loan-to-value conventional first-lien mortgages for the purchase or refinance of one- to four-family residences in the U.S. and internationally. The company was founded in 1967 and is based in New York, New York.
- [By Marc Bastow]
Global insurance company AIG (AIG) raised its quarterly dividend 25% to 12.5 cents per share, payable March 25 to shareholders of record as of March 11.
AIG Dividend Yield: 1.03%
- [By Christina Rexrode]
American International Group (AIG) said late Thursday that it swung to a profit in the fourth quarter, and it announced plans to raise its dividend and buy back more of its own shares. But analysts were concerned about weakness in the property and casualty line, where the bank needs to cut costs if it wants to get consistent underwriting profits, said Sandler O’Neill analyst Paul Newsome. With no major catastrophes, like last year’s superstorm Sandy, analysts had expected more improvement in the unit’s “severe losses,” said Evercore analyst Mark Finkelstein.
- [By Monica Wolfe]
American International Group (AIG)
Pzena’s fourth largest position is in American International Group, or AIG. The guru maintains 10,491,924 shares, representing 3.3% of his total portfolio and 0.71% of the company’s shares outstanding.