MARKETPULSE
Stocks may be overdue for a correction, but a drop of a few percent is the most we’re likely to get shorter term.
FRONT PAGE
The New Growth Plays : With P/Es Slated to Play Catch-Up
Food and energy prices are in sustained uptrends, but the market has yet to catch on. Eventually, though, stocks in these sectors will soar as they finally get the multiples they deserve.
GROWTH PORTFOLIO
Deere, Denbury: On the Right Side of Rising Prices, But We Shed Two Stocks With Faltering Price Momentum
We’re adding two stocks to Growth Portfolio—an agriculture play and an energy play—in line with our view (p.1) that food and energy prices have entered sustainable uptrends that will push valuations in those sectors higher. By the same token, we’re shedding two stocks with faltering price momentum, a recipe for a decline in relative P/Es. Among the latter, as noted in market updates, we’ve soured on the drug industry, which increasingly will struggle because…
INCOME PORTFOLIO
China’s Red-Hot Income Plays: PetroChina, CNOOC, and Huaneng Power Are Humming
When you own shares in a public company, you have a claim on its business equal to your ownership stake. That’s why most measures of profitability, such as earnings, are reported on a “per share” basis. If that company issues new shares, your ownership stake can become diluted, and per share measures of profitability often drop. As a result, the market usually reacts negatively at first to the issuance of new shares. It needs time…
FUNDFOLIO
Five Stars and Focused: Janus Orion: a Quintessential Stock-Picker’s Fund
A short time back, a fund that had started out as one of our mid-cap growth picks—Calamos Growth fund—was reclassified by Morningstar. As a result, it migrated into our large-cap growth category, which now contains three attractive funds. This left us with just one mid-cap growth choice, Meridian Growth fund. This issue we’ve decided to sell it and replace it with Janus Orion fund, which we think will be a far more sizzling choice going forward. Meridian…
FUND FINDS
A Stellar Play on Global Industrial Growth: ABB Group Helps The World Operate More Efficiently
This issue FundFolio (p. 6) added a top-performing mid-cap growth fund to its roster, the five-star-rated Janus Orion fund. Scanning its holdings, we noted its bet on global engineering company ABB Group, the fund’s second-biggest position. ABB Group is an outstanding play on global industrial growth and related trends such as rising energy prices and environmental concerns, and it joins FundFinds. Headquartered in Switzerland, ABB Group is a worldwide leader in power and automation technologies, designed…
FAST TRACK
Battle of the Smartphones: Apple’s iPhone Looks Set to Pummel Palm’s Treo
Capitalism ensures that in any growing new market, some companies will thrive while others get knocked down. In that spirit, we’re adding a new short to Fast Track this issue—Palm, which we think is slated to become one of the also-rans in the race to make it in the burgeoning market for smartphones. If you’re one of the dwindling number of people not familiar with the term smartphone—and there still are technophobes out there who have…
SECTOR SENSE
More Ways to Milk Water: An ETF and Two Diversified French Engineering Companies
Last issue in TCI, we added two water stocks to two different portfolios. In Growth Portfolio, we bought giant U.S.-based ITT, the world’s largest diversified water company. And in our new Small Cap Value Portfolio we added Watts Water Technologies. In addition, General Electric, a longtime Growth pick, has staked out a claim to the water industry via its leading global position in desalination and wastewater treatment. But these investments just begin to tap the tremendous…
MARKET BITES
Market Bites
Bearish on Bonds, Bullish on Gold, P/Es Then and Now, Chindia
WHAT THEY'RE THINKING
Tim Harford: Undercover Economist
This month we’re doing something different: featuring a book instead of a person. Written by Financial Times columnist Tim Harford, it’s called The Undercover Economist. It’s highly entertaining—not a word generally used in the same breath with economics—while striking a much-needed blow for economic literacy. Harford starts with some basic economic concepts behind the operation of free markets, such as scarcity, marginal costs, and price-sensitivity, illustrating them with a range of modern-day realities—the high price of…
BACK PAGE
Getting Back in Shape: Expecting a Second Wind from Nautilus and DRS Technologies
Every day millions of Americans hit the gym or hop onto their home fitness equipment in a quest to attain six-pack abs, tighter buns, or simply better health. Scan the crowds at any shopping mall and you’ll acknowledge that millions more should step up their physical regimen. One company striving to get us in shape (while promising also to fatten up investors’ wallets) is Nautilus. The company owns several well-known commercial and home fitness brands, including…
