Barron's this weekend has as its Cover Story a special section on America's Top 500 Companies. This is their annual salute to companies that have done the best job of GROWING their businesses, whether organic growth or by acquisitions. I can instantly see three problems with their methodology (Sales Growth 2011, Cash-Flow-Based Return on Investment (three year median and 2011 vs Median(?), for a total of three equally weighted measures), the single biggest problem (for me) being extreme volatility in each year's rankings. Take a look at their Top 10 in 2012 vs. 2010:
2012 | 2011 | |||
Rank | Rank | Company | Ticker | |
1 | N. R. | CF Industries Holdings | CF | |
2 | 4 | Apple | AAPL | |
3 | 131 | Southerrn Copper | SCCO | |
4 | 327 | Qualcomm | QCOM | |
5 | 10 | Visa | V | |
6 | 27 | Intel | INTC | |
7 | 34 | Phillip Morris Int'l | PM | |
8 | 123 | MasterCard | MA | |
9 | 124 | MetLife | MET | |
10 | 14 | Henry Schein | HSIC |
CF Industries is a fertilizer company that bought Terra Industries (another fertilizer co.) and so it is in top spot by doubling its size while fertilizer prices have gone up. Companies like Visa and Intel are up there because of good growth of recent profits AND sales based on our "growing" economy.
My thought: A good list for speculators and traders, not so much for "Buy and Hold" guys like me.
***
Alan Abelson starts off with a long and winding parable on the purchase of upcoming IPO Facebook, which I would venture to say would be very risky to the downside even if they price at around the low-end price of $28.00. Me either Alan, no thanks, not for me or deal old mom...
He then goes on to mark the Second Anniversary of the May, 2010 "Flash Crash". He notes that it was at this point that frustrated investors just threw in the towel on stocks as the machines took over. And NONE of the causes have been fixed.
And you would expect him to glare at the new employment numbers..., as he does! Payrolls increased a less than expected 115,000, but two other surveys showed a DECLINE in payrolls... The guys Abelson is talking to all say that things are growing much more slowly than hoped. "QE3 Looks like more of a possibility than it did a few days ago." Ugh.
***
Michael Santoli's title ("Streetwise") is "Buy Stocks Slowly as Prices Fall".
"Sell Stocks Quickly as Prices Fall" <-- fixed it for ya!
***
"He Said":
"It's great that people get together and collaborate...all in the interest of having a great financial system."
I ought to make you all guess this one, it is so revolting... JP Morgan CEO Jamie Dimon.
Hey, Jamie? What collaboration?! Where is all of the MONEY that MF Global and Corzine sent you?!?!
Crooks...
***
Jonathan R. Laing writes a positive piece on United Continental, which is now the world's largest airline. United has been under pressure lately because of the costs of integrating Continental. But, with a pretty good route system and good hubs, he thinks that this one may the big winner among the airlines.
I have to write one more time: the airline business has LOST more money than it has made!
***
Andrew Bary writes a positive article on Phillips (PSX, the refining and marketing operations), which was just spun off from Conoco.
Many spin-offs do quite well afterwards. The additional piece of Phillips is that they have a profitable chemical business as well. Worth a look... 2.6% dividend...
***
Johanna Bennett writes a positive piece on generic drug maker Watson, which has just acquired a Swiss rival, now making it the third largest drug maker. The combined company (WPI) has a good stream of upcoming generics coming soon. But...
Lots of positive stock review in this edition...
***
Jim McTague ("D. C. Current") writes that even though there is now more money in retirement accounts than in 2007 (the previous peak I guess), that many investors have become sour on buying stocks... Why?
Because of the SEC changing the rules up to 2007, turning the stock market more into a casino than before. Oh, and then the flash crash. Investors had just started pouring real money into the markets early in 2010, then May's flash crash drove many out for good. McTague cites prescient authors Sal Arnuk and Joe Saluzzi (Broken Markets) who wrote a book in 2008 about HFT destroying investor confidence.
***
Lately, I have read and reviewed each "CEO Spotlight" as they have been interesting. This week I decline.
But, should you be interested, it is about John Stumpf, CEO of TBTF bank Wells Fargo.
***
Bill Alpert interviews Dan David (Co-Founder of GeoInvesting), who investigates all of these little Chinese companies listed over here. MANY have been found to be frauds. And the SEC does little about it.
Mr. David found a few himself (a company named Muddy Waters is probably the most famous of these investigators).
My suggestion? Don't little Chinese stocks you do not know REALLY WELL!
***
Editor Thomas Donlan now writes that Apple is now the new whipping boy by various levels of our dearly-beloved .gov. Apple has also picked up a hate club because of their Foxconn partners in China (who actually provide a much better deal to their workers than if they had stayed in their villages...).
Apple is, legally, doing what it can to pay lower taxes (what they SHOULD do), yet government at all levels rails against them and wants them to do it favors (HQ city Cupertino, CA wanted free Wi-Fi for the whole city, for example).
Donlan says that we have seen this all before (Microsoft and IBM were scorned and hated). Donlan says we should admire Apple because of their success (undeniable).
Or else Apple might suffer a fate like GM, US Steel, RCA and others who looked invulnerable in the past. On the other hand, maybe Apple could move to business Ireland...
***
The Market Week section has an article ("Current Yield") by Randall W. Forsyth about how Treasuries just keep getting stronger and stronger (with the yields going down).
Investors are accepting yields on 10 year bonds ( an almost unbelievable 1.88%) under the Fed's own stated inflation goal of 2.0%.
This means, according to Antal Fekete (famed economist, read his stuff, it's all online), more capital destruction...
***
Simon Constable writes ("Commodities Corner") about the price of rice going up. The USA as well as other big W. Hemisphere producers are harvesting less...
But, he expects that prices will be volatile as the results are not in from Asia.
***
Facebook will IPO very soon, between $28 and $35 is the range they expect. EVERY big broker is in on the one...
***
Two Apple insiders sold some $62,000,000 of AAPL stock on April 27...
***
The Mighty Peruvian Sol dropped a tiny bit vs. the buck this week, less than 0.1%.
***
Verdict this weekend: yes, sure, buy it!
Postscript:
The frat-style beer keg party last night in DC (I write now on the train between DC and NYC) was a big success! Even though we were over 20 years older than any of the others attending (22 in total)...
My wife played "Beer Pong" for the first time last night. On her first toss, she landed a ping-pong ball right in an opponent's cup! Bravo, mi amorcito!
My thought: A good list for speculators and traders, not so much for "Buy and Hold" guys like me.
***
Alan Abelson starts off with a long and winding parable on the purchase of upcoming IPO Facebook, which I would venture to say would be very risky to the downside even if they price at around the low-end price of $28.00. Me either Alan, no thanks, not for me or deal old mom...
He then goes on to mark the Second Anniversary of the May, 2010 "Flash Crash". He notes that it was at this point that frustrated investors just threw in the towel on stocks as the machines took over. And NONE of the causes have been fixed.
And you would expect him to glare at the new employment numbers..., as he does! Payrolls increased a less than expected 115,000, but two other surveys showed a DECLINE in payrolls... The guys Abelson is talking to all say that things are growing much more slowly than hoped. "QE3 Looks like more of a possibility than it did a few days ago." Ugh.
***
Michael Santoli's title ("Streetwise") is "Buy Stocks Slowly as Prices Fall".
"Sell Stocks Quickly as Prices Fall" <-- fixed it for ya!
***
"He Said":
"It's great that people get together and collaborate...all in the interest of having a great financial system."
I ought to make you all guess this one, it is so revolting... JP Morgan CEO Jamie Dimon.
Hey, Jamie? What collaboration?! Where is all of the MONEY that MF Global and Corzine sent you?!?!
Crooks...
***
Jonathan R. Laing writes a positive piece on United Continental, which is now the world's largest airline. United has been under pressure lately because of the costs of integrating Continental. But, with a pretty good route system and good hubs, he thinks that this one may the big winner among the airlines.
I have to write one more time: the airline business has LOST more money than it has made!
***
Andrew Bary writes a positive article on Phillips (PSX, the refining and marketing operations), which was just spun off from Conoco.
Many spin-offs do quite well afterwards. The additional piece of Phillips is that they have a profitable chemical business as well. Worth a look... 2.6% dividend...
***
Johanna Bennett writes a positive piece on generic drug maker Watson, which has just acquired a Swiss rival, now making it the third largest drug maker. The combined company (WPI) has a good stream of upcoming generics coming soon. But...
Lots of positive stock review in this edition...
***
Jim McTague ("D. C. Current") writes that even though there is now more money in retirement accounts than in 2007 (the previous peak I guess), that many investors have become sour on buying stocks... Why?
Because of the SEC changing the rules up to 2007, turning the stock market more into a casino than before. Oh, and then the flash crash. Investors had just started pouring real money into the markets early in 2010, then May's flash crash drove many out for good. McTague cites prescient authors Sal Arnuk and Joe Saluzzi (Broken Markets) who wrote a book in 2008 about HFT destroying investor confidence.
***
Lately, I have read and reviewed each "CEO Spotlight" as they have been interesting. This week I decline.
But, should you be interested, it is about John Stumpf, CEO of TBTF bank Wells Fargo.
***
Bill Alpert interviews Dan David (Co-Founder of GeoInvesting), who investigates all of these little Chinese companies listed over here. MANY have been found to be frauds. And the SEC does little about it.
Mr. David found a few himself (a company named Muddy Waters is probably the most famous of these investigators).
My suggestion? Don't little Chinese stocks you do not know REALLY WELL!
***
Editor Thomas Donlan now writes that Apple is now the new whipping boy by various levels of our dearly-beloved .gov. Apple has also picked up a hate club because of their Foxconn partners in China (who actually provide a much better deal to their workers than if they had stayed in their villages...).
Apple is, legally, doing what it can to pay lower taxes (what they SHOULD do), yet government at all levels rails against them and wants them to do it favors (HQ city Cupertino, CA wanted free Wi-Fi for the whole city, for example).
Donlan says that we have seen this all before (Microsoft and IBM were scorned and hated). Donlan says we should admire Apple because of their success (undeniable).
Or else Apple might suffer a fate like GM, US Steel, RCA and others who looked invulnerable in the past. On the other hand, maybe Apple could move to business Ireland...
***
The Market Week section has an article ("Current Yield") by Randall W. Forsyth about how Treasuries just keep getting stronger and stronger (with the yields going down).
Investors are accepting yields on 10 year bonds ( an almost unbelievable 1.88%) under the Fed's own stated inflation goal of 2.0%.
This means, according to Antal Fekete (famed economist, read his stuff, it's all online), more capital destruction...
***
Simon Constable writes ("Commodities Corner") about the price of rice going up. The USA as well as other big W. Hemisphere producers are harvesting less...
But, he expects that prices will be volatile as the results are not in from Asia.
***
Facebook will IPO very soon, between $28 and $35 is the range they expect. EVERY big broker is in on the one...
***
Two Apple insiders sold some $62,000,000 of AAPL stock on April 27...
***
The Mighty Peruvian Sol dropped a tiny bit vs. the buck this week, less than 0.1%.
***
Verdict this weekend: yes, sure, buy it!
Postscript:
The frat-style beer keg party last night in DC (I write now on the train between DC and NYC) was a big success! Even though we were over 20 years older than any of the others attending (22 in total)...
My wife played "Beer Pong" for the first time last night. On her first toss, she landed a ping-pong ball right in an opponent's cup! Bravo, mi amorcito!
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