Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day… Read More

Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day in August, versus 12.2 million produced in the United States. The International Energy Agency (IEA) reported that Saudi Arabia added 400,000 barrels a day of production last month. At the same time, the United States took 460,000 barrels a day out of its production. This shift is exactly what Saudi Arabia and OPEC were hoping for. It’s been keeping the taps on its competitors and driving down oil prices in order to price out high-cost shale oil production in the United States. It worked. Investment in shale oil has fallen 66% since 2014, according to Rystad Energy and Bloomberg. And… Read More

In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they… Read More

In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they would “get most of the earnings upside from rates in the initial hikes rather than relying on normalized rates.” But did they? Not according to their share price movements. These four companies have been flat to down during the past nine months since the hike… Historical data doesn’t back up Goldman, either. From Fortune, on December 16, 2015, the day of the rate hike: Banks often get pointed at as potential buys when interest rates rise. And share of the biggest banks have been rising lately. That’s because they can benefit from higher interest rates as long… Read More

In a bit of a surprise move, our northerly neighbor, Canada, has joined the Asian Infrastructure Investment Bank (AIIB). The AIIB has garnered a bit of controversy, with naysayers arguing that the bank is just a way for China to gain more influence in the world. The United States has not signed on to the bank… But it’s only one of two G8 members to not do so, now that Canada has thrown its hat into the ring. #-ad_banner-#Germany, France, Italy, the United Kingdom and Russia have already signed on to the bank. In fact, Canada’s membership will bring the… Read More

In a bit of a surprise move, our northerly neighbor, Canada, has joined the Asian Infrastructure Investment Bank (AIIB). The AIIB has garnered a bit of controversy, with naysayers arguing that the bank is just a way for China to gain more influence in the world. The United States has not signed on to the bank… But it’s only one of two G8 members to not do so, now that Canada has thrown its hat into the ring. #-ad_banner-#Germany, France, Italy, the United Kingdom and Russia have already signed on to the bank. In fact, Canada’s membership will bring the total number of members to 58. As the name suggests, the AIIB will invest in infrastructure in Asia. And in late June the bank announced $509 million in loans for four projects (via New York Times): •    Spread electric power in rural Bangladesh, •    Improve living conditions in slums in Indonesia, •    Repair and build roads in Pakistan, and •    Improve roads in Tajikistan. The bank is partnering with other institutions like the World Bank in order to fast-track some of these projects. What’s interesting is that the AIIB is focused on projects that will lead to… Read More

Does anyone ever believe anybody who says, “We’ll be fine”? My guess is that this phrase is met with an awful lot of skepticism, as it should be. It’s a bit too nonchalant, isn’t it? Especially when it comes on the back end of a $4.1 billion investment. Yes, those are the words that came out of CEO Steve Wynn’s mouth after the opening of the — what CNBC calls — lavish Wynn Palace in Macau: In every business there are good years and bad years. For our return on investment, I expect we will be fine. Wynn Resorts… Read More

Does anyone ever believe anybody who says, “We’ll be fine”? My guess is that this phrase is met with an awful lot of skepticism, as it should be. It’s a bit too nonchalant, isn’t it? Especially when it comes on the back end of a $4.1 billion investment. Yes, those are the words that came out of CEO Steve Wynn’s mouth after the opening of the — what CNBC calls — lavish Wynn Palace in Macau: In every business there are good years and bad years. For our return on investment, I expect we will be fine. Wynn Resorts (Nasdaq: WYNN) opened its $4.1 billion Wynn Palace on Monday, August 22, in the middle of a gambling slump. From CNBC: July marked Macau’s 26th consecutive monthly gaming revenue decline, with gross gaming revenues declining 4.5 percent during the month on a year-over-year basis. Daiwa estimates Macau’s GGR will fall by 10 percent in 2016 from the prior year. So that’s why Steve Wynn’s comments don’t inspire a lot of confidence from me. #-ad_banner-#But I have to say that this slump is a bit heavier than I expected it to be. I’ve spent a lot of time researching and… Read More

Ah, the unmistakable growl of a Harley… Here in Wisconsin, it’s Harley country. We’ve even got a museum that lauds the Milwaukee-based company. #-ad_banner-#But on August 18, 2016, Harley had a little less defiance in its growl. Harley-Davidson (NYSE: HOG) agreed to pay a $12 million fine for selling after-market parts designed to increase performance and power, but had the unlucky effect of emitting more emissions than was allowable under EPA rules. It’s a tricky rule… Harley believed it was following the law by stating that the “super tuner” part was only to be used for competition. The EPA investigation… Read More

Ah, the unmistakable growl of a Harley… Here in Wisconsin, it’s Harley country. We’ve even got a museum that lauds the Milwaukee-based company. #-ad_banner-#But on August 18, 2016, Harley had a little less defiance in its growl. Harley-Davidson (NYSE: HOG) agreed to pay a $12 million fine for selling after-market parts designed to increase performance and power, but had the unlucky effect of emitting more emissions than was allowable under EPA rules. It’s a tricky rule… Harley believed it was following the law by stating that the “super tuner” part was only to be used for competition. The EPA investigation found that most of them were being used on public roads. The company sold some 340,000 of them. In the settlement with the EPA, the company did not admit to wrongdoing, but did agree to stop selling the super tuners in its dealerships, buy back and destroy the dealerships’ stocks of super tuners and deny customers’ warranty claims if they are in use of the part. There has been no official word on how much that will cost Harley, though I don’t think it’ll be as big a blow to the company as the emissions scandal was for Volkswagon (OTC:… Read More

Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth,… Read More

Investor ratings can be a bit confusing… Confusing because they can be somewhat arbitrary. It’s not that they are fickle, per se. It’s just that different analysts place different weights on factors that could result in a vastly different rating. That said, ratings do have an effect on the markets, and they can give individual investor a sense of overall sentiment or trajectory. #-ad_banner-#I ran investor ratings through one of my favorite market screeners to find the top five U.S. stocks with a market cap higher than $10 billion. I then sorted them by trading ratings, followed by revenue growth, profitability and valuation. These top five companies beat out famous names like Amazon, Inc. (Nasdaq: AMZN), ranked 8th, Facebook, Inc. (Nasdaq: FB), ranked 18th, Google’s parent company Alphabet, Inc. (Nasdaq: GOOGL), ranked 31st, and China’s Baidu (Nasdaq: BIDU), ranked 32nd. Let’s take a look at them: 5. Raytheon Company (NYSE: RTN) With a five-star investor rating and a five-star trading rating, Raytheon boasts strong profitability. RTN develops and manufactures engineering technology for government and commercial uses, in sectors such as defense, IT and electronics. Analysts rate RTN as a very strong buy, and technical analysis indicates bullishness in both the… Read More

About two months ago, I showed you this chart: It showed front-month oil future rebounding in a solid uptrend, but heading for a ceiling. I warned that oil producers could see a short-term pop, but that it would be temporary. I also said that higher oil prices would positively affect quarterly earnings reports. I was mostly right… Take a look. This first snapshot is of Exxon Mobil’s (NYSE: XOM) quarterly income: This second snapshot is of ConocoPhillips’ (NYSE: COP) income: Both showed substantial growth in gross profits quarter over quarter. Year over year, XOM’s… Read More

About two months ago, I showed you this chart: It showed front-month oil future rebounding in a solid uptrend, but heading for a ceiling. I warned that oil producers could see a short-term pop, but that it would be temporary. I also said that higher oil prices would positively affect quarterly earnings reports. I was mostly right… Take a look. This first snapshot is of Exxon Mobil’s (NYSE: XOM) quarterly income: This second snapshot is of ConocoPhillips’ (NYSE: COP) income: Both showed substantial growth in gross profits quarter over quarter. Year over year, XOM’s revenues grew 18.45% in the quarter ending June 30, while COP revenues grew 11.17%. COP released earnings on July 28 and XOM released earnings three days later. Since the earnings release, stock prices have climbed about 4.6% and 2.3% respectively, with some volatility. But I wasn’t entirely right in my article… You see, oil prices did some tricky dance moves since early June. This chart shows the same trendlines from the ones I included in my chart back in early June. I’ve marked when my article hit the airwaves with a blue circle. In that article,… Read More

I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber… Read More

I’ve written quite a bit this year about China’s economic transition. Michael Spence, the Nobel Prize-winning economist, calls it the middle-income transition, when a company moves from a developing economy to an advanced economy. #-ad_banner-#For China, this means a shift away from exports and export-based growth and toward domestic consumption. We’ve seen this evidenced in the rise in wages and also in the rise in the amount that services contribute to GDP. But for those of you still not convinced of this economic shift, let’s take a look at the multi-billion-dollar deal that just happened in China. From Bloomberg: “Uber Technologies Inc. is selling its China operations to fierce rival Didi Chuxing, ending an expensive price war and freeing it up to focus on other markets and possibly an initial public offering. The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has already lost $2 billion in China in two years there, people familiar with the matter have said, prompting investors to pressure the company to cut a deal. As part of the arrangement, Didi will invest $1 billion in Uber’s global company, people familiar with the matter… Read More

Johnson Controls, Inc. (NYSE: JCI) is headquartered in my backyard: Milwaukee, Wisconsin. #-ad_banner-#It’s a company focused heavily on efficiency, and it’s got its finger on the pulse of what the corporate world wants. And it turns out, the corporate world wants what JCI is selling. In its latest Energy Efficiency Indicator survey, JCI found that 72% of the 1,243 participants said their companies are anticipating increasing their investment in energy efficiency and renewable energy in the next twelve months. That’s a massive number, and it’s also a massive increase compared to just four years ago. In 2013, JCI’s Energy Efficiency… Read More

Johnson Controls, Inc. (NYSE: JCI) is headquartered in my backyard: Milwaukee, Wisconsin. #-ad_banner-#It’s a company focused heavily on efficiency, and it’s got its finger on the pulse of what the corporate world wants. And it turns out, the corporate world wants what JCI is selling. In its latest Energy Efficiency Indicator survey, JCI found that 72% of the 1,243 participants said their companies are anticipating increasing their investment in energy efficiency and renewable energy in the next twelve months. That’s a massive number, and it’s also a massive increase compared to just four years ago. In 2013, JCI’s Energy Efficiency Indicator survey found that only 42% of those surveyed had planned to increase investment. And take a look at this map: Emerging markets are going to be investing heavily in efficiency and renewable energy, but developed economies aren’t sitting on the sidelines, either. I think the efficiency sectors is going to be an interesting area over the next couple of years, and there are several different areas that could be of note to investors. According to the survey, heating, ventilation and air conditioning (HVAC) improvements were the most popular improvement over the past 12 months, followed by energy-focused… Read More

Southwest Airlines (NYSE: LUV) has always flown against the crowd with pick your own seats and free checked bags. The company was even forward thinking enough to buy oil futures when oil prices were still in the $50s back before the 2008 financial crisis and the subsequent spike of oil prices above $100 a barrel. #-ad_banner-#But there is one key area where the airline isn’t as progressive as its competitors: technology. From Bloomberg: “For most of its 45 years, Southwest Airlines Co. has operated with a kludgy hodgepodge of technology systems, mainly built in-house. It was generally a cheaper approach… Read More

Southwest Airlines (NYSE: LUV) has always flown against the crowd with pick your own seats and free checked bags. The company was even forward thinking enough to buy oil futures when oil prices were still in the $50s back before the 2008 financial crisis and the subsequent spike of oil prices above $100 a barrel. #-ad_banner-#But there is one key area where the airline isn’t as progressive as its competitors: technology. From Bloomberg: “For most of its 45 years, Southwest Airlines Co. has operated with a kludgy hodgepodge of technology systems, mainly built in-house. It was generally a cheaper approach that better fit the needs of its network, radically different from those of hub-and-spoke airlines.” Kludgy… That’s one way of putting it. Falling behind its competition is another. Because there’s a line between cost efficiencies and being cheap enough that you sacrifice other efficiencies. And Southwest crossed that line quite a bit ago, according to the company’s CEO Gary Kelly. Apparently, the company hasn’t updated its reservation system in 30 years… an unheard-of amount of time for a technology. One has to ask if they’re still using dot-matrix printers, too. The main reason for this update is the need for… Read More