Tag Archives: trading

Dividend Stocks, Financial Stocks, Investing, Retirement

Financial Education: Stock Dividends vs. Stock Splits

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Every investor has one goal in mine when they are investing in a company – and that is to earn income. Cash dividends may be distributed during some periods due to a company’s success. There are times that companies do not allocate their wealth through cash.

But it is not a clear indication that the company is already failing. Declaring a stock dividend or a stock split are the two corporate strategies that can be used in dealing with different situations.   

What is a Stock Dividend?

Stock dividends are distributed by corporations to their shareholders as payment through additional shares. Shareholders receive stock dividends issued through an additional number of shares of the same kind held by them. The additional dividends come from up to 25 percent of the existing number of shares outstanding.

Therefore, the worth of the market value per share will remain unchanged. Instead of declaring cash dividends, corporations prefer issuing stock dividends as payment for plenty of reasons which will be discussed later on. 

To exemplify the outcome of a stock dividend, let’s presume that a motorcycle manufacturing company obtains 300,000 shares outstanding. The corporation earned $600,000 at the end of the year. If we are going to compute for its earnings per share, you are going to get $2 per share.

The market value per share outstanding is $60. As a result, the price per earnings ratio or the multiple that measures the relativity of the company’s annual net income earned to the market value per share is 30.

Instead of issuing cash dividends, the board of directors decided to distribute 10% stock dividends to give back to its shareholders. The corporation will have 30,000 additional shares (300,000 shares outstanding x 10%).

Thus, a shareholder that owns 30 shares will obtain 2 additional shares. This will affect the earnings per share which decrease to $1.82 and the price per earnings ratio rises to $32.97. Consequently, the shareholder that possesses 30 shares still owns an unaffected total value of $1,800.  

Stock Dividends are classified into two kinds:

  1. Small Stock Dividends: Stock dividends are deemed as small if it is below 20-25% of the total number of shares outstanding before the dividend declaration occurs. 
  2. Large Stock Dividends: Stock dividends are considered large if it is above 20-25% of the total number of shares outstanding before the dividend declaration occurs. 

What is a Stock Split?

A stock split occurs when more than 25% of the dividends are equally distributable to the shareholders.

Just like in stock dividends, dividends are transferred from retained earnings to the capital accounts and the shareholders will maintain the amount of their total market value. The commonly applied stock split is 2-for-1 and 3-for-1. It simply requires corporations to divide a share to 2 or 3 and it will still result in the same total dollar value.

For instance, a pharmaceutical company has 500,000 shares outstanding with $50 per share issued a 30% stock dividend.   The board of directors planned to divide its stocks by 2-for-1. Subsequent to the stock split, the market value per share will be $25 and will increase its number of shares by 500,000. Therefore, a shareholder that has 2,000 shares outstanding will acquire additional 2,000 shares and retains the total value of shares.

Comparison

Companies declare a stock dividend or a stock split to aim for long-term objectives. As a result, the investors will acquire a number of shares higher than the number of shares that they had before the distribution of stock dividends or the occurrence of the stock split. As a company proclaims a stock dividend or a stock split, its investors are anticipating better financial performance because it can now sell its shares for a lower price. 

Justifications for a Stock Dividend or a Stock Split

A company may declare a stock dividend due to its need to fuel its financial growth. These companies appropriated their cash and temporarily distributed stock dividends because they are planning to make new projects or intending to satisfy their debts. However, the declaration of stock dividends may also a sign that a company does not have enough cash. Therefore, it is incapable of issuing cash dividends.

A stock split occurs when companies believe that the market price per share is preventing the investors to capitalize on them. If the market price per share of a company is too high compared to the value of its competitors, potential investors may disregard the company.

Reverse Stock Split

If corporations have the capacity to split up the number of shares outstanding, they can also merge it to a smaller total number and appreciate the value per share.

However, the consolidation of total shares will not affect the total value of shares outstanding. This process is called as a reverse stock split or stock consolidation. If five or ten existing shares of a corporation are merged into one share, it will be named as a 1-for-5 or 1-for-10 reverse stock split. The opposite of this corporate procedure is the stock dividend.

To illustrate this, let’s assume that an e-commerce company obtains 300,000 shares outstanding which trades for $40 per share. The board of directors decided to combine 10 current shares into a new share or a 1-for-10 reverse stock split. As a result, the number of shares outstanding of the corporation will shrink to 30,000 but will raise its market value per share to $400. 

The management suggests the reverse stock split which needs the approval of the shareholders. Even though the corporate value is not affected, this corporate procedure allows companies to deduct the number of shares outstanding due to several reasons.

Companies increase their value per share because of the rules of mutual funds and institutional investors about the minimum price of a stock. A company that is unsuccessful to be qualified for the acquisition of an important investor may impair its good name. 

In addition, companies are merging their total shares to acquire a higher price per share for them to be listed on an exchange. A minimum trading price is one of the listing requirements that must be met by the companies in order for them not to be de-listed. 

 

Economy, Market News

Eurozone: Central Banks Continue to Guide Economic Outlook

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Central Banks Continue to Guide Economic Outlook

Federal Reserve policy measures have recently shown various ways central banks are currently guiding the global economic outlook.  According to Ask Traders, markets have reacted favorably with the stock market hitting fresh record highs after the Federal Reserve decided to cut interest rates by 25 basis points. Central bank members in the Eurozone have adopted a similar stance policy metrics, which include a monetary union of 19 out of the 28 countries in the EU (European Union) and is the second largest economy (both in nominal terms and purchasing power parity or PPP), after the United States. Eurozone GDP was estimated to be around $18.8 trillion in 2018 and the Eurozone economy holds great weight for world economists because the region also produces 22% percent of global GDP each year.

Future Economic Outlook

For the most part, the Eurozone kept pace with the central banks around the world in 2019, although its growth has not quite matched prior highs. The incomes underpinned by unplanned but healthy consumer spending but restrained by some well-directed investments and activities with an unsupportive external backdrop. There’s obviously a drop in the economy as the Brexit event has taken its toll on consumers. Britain is one of the world’s top GDP producers, and political analysts have said that the conservative party’s victory in UK elections will create a clearer roadmap ahead, reducing uncertainties. 

Global Marketplace

Recently, the European Commission reproached France, Italy, and Spain for not procuring meaningful fiscal management measures and exposing themselves to potential economic shocks.  The European Union contains the internal elements of mixed economies, based on the free market principles and advanced social models. Euronext is the prime stock market of the Eurozone, which is also the 6th largest stock market in the world. European Union maintains a content relationship with other major economically developed countries (United States, China, Switzerland, Russia, Turkey, Japan, Norway, South Korea, India, and Canada which are also the highest trading partners of EU). The subtotal amount of the trades made in the Eurozone by foreign countries is $5.1 trillion in 2012. In comparison, the EU traded around $9.1 trillion over foreign countries across the globe, which is one of the highest domestic and foreign investment levels currently visible in the world economy.

Sectors of the Economy

The four main industry sectors in the EU include services, agriculture, tourism, and energy. However, the services sector holds the highest importance in the EU economy as it produces 70% of the region’s total GDP figure. That’s quite high in comparison to other sectors, as the agriculture sector holds just 1.8% of total GDP.  In 2013, the EU spent approximately $45 billion which is 33 percent of its total budget of $148 billion. The Eurozone is also a major tourist zone, so the EU emphasizes tourism an important sector continued growth. London and Paris were recently the most visited places with 16.9 and 16 million visitors, respectively. Additionally, the Eurozone has uranium, coal, oil and natural gas reserves for its energy production. The EU is the 2nd largest consumer and the 19th in oil production, as the region produces 1,241,370 (2013) barrels a day.

The Eurozone is a highly developed union but still faces many of the same challenges other economies around the world. The EU thrives more and more every year by its significant contribution to the world economy. The member states play the role of them by growing economically. Bulgaria, Czech Republic, Estonia, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Poland, Romania, etc. are some of the growing GDPs.  Besides these, there are already some economic giants in the Eurozone. Austria, Belgium, Finland, France, Germany, Ireland, UK, Spain are the top countries based on per capita income.

Labour Market and Economic Growth

In the Eurozone, the unemployment rate was 8.1%. Among the member states, the Czech Republic had the lowest with 2.3% and Spain with the highest of 14.9%.  The momentum is not on the EU’s side. Slow global growth, uncertain external backdrops will reduce investment and export activity. Lower job gains due to hard labor markets in important countries will somehow resist consumer spending. But the political uncertainties of Spain and Italy summing up with Brexit (described below) already clouds the outlook. Growth is at 1% in 2020 which looks shacky but despite these, economists are positive about its longevity in terms of growth.

Brexit Factors

Brexit simply refers to Britain’s exit from the EU. It is a major turnoff for Eurozone economics as Britain is one of the most significant country let alone the EU but also in the world. After winning the elections the new PM proposes a new Brexit deal with new customs arrangements. Brexit means that UK will be out of the EU with financial, economic, and political relationships. 

Eurozone Economy after Brexit

Though all the dark clouds, the eurozone economy keeps growing at a modest pace. But sooner or later a slowdown is expected in the eurozone economy because of trade tensions and Brexit uncertainty.  The Eurozone economy expanded 0.2 percent in the three months to September. According to Eurostat, the annual growth rate is 1.1 percent. The current situation states that fears are there that it could slow down. Economists expect the growth to fall to 0.1 percent in the next quarter.

Global Economic Barriers

The EU has many barriers both externally and internally. Research from 1999 to 2003 by examining 166 manufacturing industries in 11 EU members, barriers still remain. Apart from transportation costs, the most damaging is the technical barriers.  In numeric terms, the costs associated with geography and transport explain only 25 percent of the trade integration variation. And the distance between the origin and destined shipments are at 5 percent. The policy factors can explain only 7 percent of the variation. Technical barriers at 5 percent is another major issue that the EU must deal consider going forward.  Apart from all the chaos and difficulties in trade and business which defines the economy, Economists are still hopeful. Some minor and major changes in the policies, agreements, and contracts, along with some enforced initiatives can clear all the clouds and EU will hold its significance, nevertheless.

 

 

Gold, Precious Metals

Precious Metals: Gold Is Basing For Next Bullish Wave

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Precious Metals: Gold Is Basing For Next Bullish Wave

In 2019, one of the market’s most surprising stories has been the massive bull trend movement that has been established in gold.  Additionally, a series of unpredictable changes occurred in the realm of monetary policy, as the Federal Reserve has already broken with its long-standing position to raise interest rates as a way of preempting continued expectations for growth.  In the U.S., the latest evidence in the national GDP readings implies growth rates that are close to zero for the fourth quarter. Overall, this is not a bullish scenario for stocks —even with the S&P 500 trading near its record highs. 

My regular readers know that I often tend to look at market inflow activity in some of the precious metals industry’s most popular exchange-traded funds (ETFs).  This would also include instruments like the VanEck Gold Miner’s ETF, which is a topic I have discussed in a prior article.  Ultimately, this type of approach to baseline fundamental analysis can provide important clues that help identify price trends that are likely to begin reversing relatively soon.  

Most directly, we can see that recent activity in the SPDR Gold Trust ETF (NYSE: GLD) has shown outflows worth $1,308.7 million over the last four weeks.  However, this figure might paint a very different picture when compared to various time horizons. In the last 13 weeks, GLD has seen inflows of $2,330.9 million but this figure actually grows to $7,191.3 million over the past 26 weeks.  Overall, these are significant differences that give us a fundamental reason to believe that there will be underlying strength in any technical trading events that are generated as a result of 2019’s bullish trend moves.

Gold GLD

Traders should define the major rallies in precious metals as a development the occurred after the beginning of summer.  However, the true origins of that really actually began much earlier (as commodities markets were confirming their lows near the end of 2017).  In this chart, I have outlined a series of levels that could prove to be pivotal in the event we see a true bearish reversal in the price of precious metals.  

Using the price valuations in GLD, we can isolate these important price levels as falling near $106.80, $112.05, and $126.50.  This first level marks the lows from December 2016 while the second level marks the lows from August and September 2018. The third level on the GLD price chart shown above is meant to mark the highs from February 2019.  This final price zone will now be expected to act as support once the GLD valuation overcame resistance at these levels.

Gold GLD

Shorter-term, the confluence of these technical factors suggest we are likely to begin basing above the $126.50 region.  Evidence supporting the bearish outlook would include the slowing momentum levels that are present on the daily charts. In my own trading, I will be paying special attention to the technical indicator readings in the Commodity Channel Index (or CCI).  I expect to see the first clues of short-term reversal in the CCI reading. Longer-term charts (weeklies) are clearly positive and it seems to be just a matter of time before that prior uptrend resumes.  

Initial resistance levels suggest traders will likely target $147.10, which was the price high from September.  However, the price targets that could be reached if these levels are broken could be outrageous. Long-term readings in market momentum remain favorable and the short-term retracements we have seen to the downside could create some new buying opportunities in the weeks ahead.  For additional information on how I use the Commodity Channel Index to gauge price momentum, readers might be interested to see my Momentum Trading Tutorial which explains in greater depth some of the ways these technical charting tools should be interpreted.

 

Gold, Precious Metals

Silver: This Under-Achiever Is Ready To Shine

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Silver: This Under-Achiever Is Ready To Shine

For most of 2019, the emerging trends in the precious metals space have been undeniably strong.  Many analysist (possibly a majority of the financial analyst community) seemed to think that these types of events were impossible, given the fact that the S&P 500 was on a clear course to continue posting record highs.  

However, when this type of enthusiasm in equities reaches an extreme, it’s often a good idea to start looking at the precious metals space as a protective buffer against the growing potential for downside volatility.  This was the basis for many of my bullish commentaries (and actual trades) during these periods and recent price moves have largely confirmed the accuracy of those forecasts.

If we take a long-term view of the SILVER/USD chart history (weekly), we can see that the initial surge in price activity became apparent during the May-June trading period.  The first major signal that the paradigm had shifted developed once prices forcefully broke through the Ichimoku Cloud structure. Prior to this event, the most significant price lows formed toward the end of May (just below $14.30) and SILVER/USD soon rallied by more than 37.5% to reach new highs of $19.65 in roughly five weeks.

Silver Price Chart
Silver Price Chart

For some investors (particularly those focusing on cryptocurrencies), these rallies might not seem all that significant.  However, we must consider the fact that SILVER/USD had been caught in a dramatic long-term downtrend that had produced very little upside price movement since July 2016.

If we look at this same catalyst event on the SILVER/USD daily charts, we can see that Kumo support lies within close proximity to the current market valuation.  This is another highly encouraging element for anyone bullish on assets tracking the value of silver. As long as markets can hold these levels (and not break downward through the Kumo), the implication is that SILVER/USD will be in a position to move above the September highs of $19.65.

Silver Price Chart
Silver Price Chart

Of course, all of that will depend on price performances seen in the shorter-term charts.  Interestingly, we are starting to see similar events unfold on the SILVER/USD hourly charts (and this largely supports the broader thesis).  

Silver Price Chart
Silver Price Chart

Traders that are familiar with the practice of Fractal Analysis might view these recent developments as particularly exciting, given the ways they suggest an extension of the prior bull move that generated the May-June price breakout in SILVER/USD.

Silver Price Chart
Silver Price Chart

What’s notable here is that the short-term Ichimoku Cloud break (on the hourly charts) shares many of the same features that were present during the May-June catalyst event.  On the hourly charts, there is a bit more distance present between price and the Kumo, so this actually suggests we could still see some further downside without eroding the bullish bias for SILVER/USD.

Silver Price Chart
Silver Price Chart

Furthermore, this recent break of cloud resistance on the SILVER/USD monthly charts was accompanied by an overbought surge in the Connors RSI indicator reading.  When I use the Connors RSI indicator, I will generally look for bullish/bearish divergences rather than instances of price extremity. The reason for this is that the indicator tends to send many more signals when compared to the traditional RSI reading.  

In this case, the Connors RSI projected upside price moves (based on the divergence) and this is another factor that points to an eventual re-test of the September highs.  For more information on how I interpret these specific indicator readings, I encourage readers to review my Connors RSI Trading Tutorial for a detailed explanation of how I conduct my price analysis. 

Energy Stocks, Market News

UK Markets: British Petroleum Basing For Stock Rally?

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UK Markets: British Petroleum Basing For Stock Rally?

One of the most surprising stock market trends over the last few years has been the extreme decline seen in energy markets.  After hitting highs near $150 per barrel in 2008, crude oil has fallen to extreme lows.  Will these trends be able to reverse in 2018?  It is starting to look at though this is a strong possibility.

USO Oil Price Chart
USO Oil Price Chart

We prefer to view the broader trends in oil using exchange-traded funds, or ETFs, as they tend to smooth the volatility that might be seen in a spread betting account in many areas of the market.  The United States Oil Fund (NYSEARCA:USO) provides an excellent gauge in this regard, and we can now see that markets have essentially flat-lined since 2015. From a chart standpoint, this type of trend activity can be read in two different ways — and both may be significant for oil coming stocks during the next few quarters.  

UK stocks in these areas include British Petroleum PLC (NYSE:BP) as one of the largest companies in the industry (by market cap).  The long-term trends in energy markets have a significant impact on BP’s profitability expectations, which are already quite low relative to the levels the stock has seen in the past.  If we do see a turnaround in energy markets, however, a company like British Petroleum could represent one of the best trading opportunities available in the current market landscape.

We can add to this the fact that the stock pays a very healthy dividend, as the stock comes with a yield of 5.46%.  Interest rates remain low both in the US and throughout the global economy, and so those focused on income or retirement savings opportunities stand to benefit from long positions in these types of assets.  

British Petroleum Stock Price Chart
British Petroleum Stock Price Chart

In our analysis for this chart, there is building evidence that the long-term downtrend in BP has reached a completion point.  Specifically, markets have invalidated the decline that began while crude oil prices were at their all-time highs, and this is being further confirmed by the technical indicator readings on the weekly time frames.  

BP Earnings Data: Yahoo Finance
BP Earnings Data: Yahoo Finance

On the break higher in BP, markets have moved above $40 per share and have broken a key psychological level in the process.  Now that the most significant downtrend line for the underlying energy assets (crude oil) have been broken, there is clear scope for these gains to continue.  Lack of technological progress in self-driving cars has only made it more difficult to pass clear legislation for stricter oil mileage standards and so there will continue to be external factors that could weigh on companies like BP.

At the same time, changes in the underlying oil price will need to filter through to earnings, which have been in decline over the last three years.  On the positive side of things, a return to the mean in oil prices would likely mean that BP is able to break through the selling pressure and resistance levels that exist above the current valuations.  

US Dollar Declines

It should also be remembered that, since oil is still priced in US Dollars, foreign exchange markets will continue to have a high level of importance.  The USD has posted declines against many of its major forex counterparts, and the ETF that is typically associated here is the PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP).  

Assets that are denominated in US Dollars traded under pressure for most of last year, as investors sold the currency in favor of its global counterparts.  Most of the attention has focused on the European Central Bank (ECB), which may be adopting a policy perspective that is more aggressive than previously anticipated.  

There were portions of the financial analyst community that actually believed the ECB might initiate an entirely new QE stimulus program and so any change from the norm in these areas could impact currency values during the first half of this year.  Commodities have also gotten a lift, as there has been increased gold buying by European corporate investment banks.  Many of these decisions came as a response to the declines in the US Dollar, further strengthening the Influence of gold on currency markets peripherally.

Current Market Expectations

Current market expectations suggest that we will see a predictable series of three interest rate increases in 2018, so if we do not see any policy changes that are more aggressive it is more than likely that precious markets will have a strong performance over the next several quarters.  Increased buying activity in the Euro could put pressure on the US Dollar in ways that actually support oil prices and, by extension, the mega-cap oil companies like British Petroleum.

Given the recent trendline breaks in the stock price, positions that implement scaling and EMA trading strategies could benefit from the changes that are currently taking place within the underlying momentum.  Lower interest rates could spur economic activity and put further downside pressure on the US Dollar.  Since this is almost always positive for commodities, it should support crude oil prices over the next three months.

The energy space has had a difficult time over the last five years but if we see a confluence of events in a certain direction, there is a strong possibility that valuations could start reverting to the mean.  Earnings trends within BP as a company need these sorts of macro influences in order to drive momentum, so these are potential areas for investors to watch over the next few weeks.  

Market News

Stock Trading: Oracle Shares Surges to New Highs

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Stock Trading: Oracle Shares Surges to New Highs

Stock markets continue to post major bull rallies but one sector that has been largely missed by investors is the technology space.  This can be seen in professional indices trading trends, which have recently shown that assets tied to the NASDAQ have underperformed those tied to the value of the S&P 500.

But we are starting to see some of these trends change, as tech stocks have been able to post better rallies in recent weeks.  One of the best examples here can be seen in Oracle Corp. (NYSE: ORCL) which is now trading at long-term highs.

Stock Price Chart: Oracle Corp. (NYSE: ORCL)

Stock prices in ORCL have surged above prior resistance levels en route to new highs above $45 per share.  “Information driven,” Oracle is one of the most prominent names in tech development and marketing of business software products, database technology software and cloud engineered systems.  Based in the USA and established in 1977, the company is a public multinational entity having more than 136,000 employees currently with head office in California’s Silicon Valley.  

Key products among others related to Oracle are storage, servers, oracle applications and oracle enterprise manager. Enterprise resource planning, supply chain management, and customer relationship management soft wares are also specialized names which are associated with Oracle. It reported annual revenue of $37.04 US billion Dollars (2016) and net income worth 8.90 US billion Dollars (2016).

Tech Manufacturing Companies

In addition to manufacturing and marketing of business software products Oracle also offers other services which comprise consultancy, training and financing which is also a unique element in relation to Oracle. Since its inception Oracle has gone through a comprehensive process of acquisition of entities both corporate and individuals.  In 1995, IRI software was acquired by it under consideration of $100 million US Dollars.  

Other notable acquisitions include:

  • PeopleSoft in 2005 $10.3 billion US Dollars
  • Seibel Systems in 2006 for $5.85 billion US Dollars
  • Hyperion Corporation in 2007 for $3.3 billion US Dollars
  • Sun Microsystems in 2010 for $7.4 billion US dollars
  • Micros Systems in 2014 for $5.3 billion US Dollars
  • NetSuite in 2016 for $9.3 billion US Dollars
  • Apiary in 2017  for which the valuation of purchase consideration is yet to be agreed

According to reports in 2015 Oracle after Microsoft was second-largest software maker revenue wise which is indeed an impressive and substantial outlook internationally. Since the beginning company has introduced multiple technological dimensions like UNIX-based Oracle applications in 1987, PL/SQL in 1988, 64 bit RDBMS in 1995.  

This was followed by its free database to qualify industry standard security evaluations in 2002, smart scans that enhance software query response in HP Oracle Database machine in 2008 and in particular initiative in the shape of Oracle 12c which can facilitate cloud services along with Oracle Database in 2015.  Conclusively, despite facing multiple challenges since the beginning, Oracle has proved itself among preferred and highly recommended global tech entities.

Long Ideas

Gilead Sciences: Sluggish After Healthcare Reform Debate

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Gilead Sciences: Sluggish After Healthcare Reform Debate

Gilead Sciences is an American biopharmaceutical company that discovers, develops and commercially sells a range of therapeutics including antiviral drugs for the treatment of Hepatitis, HIV, and influenza.

The company was founded in 1987 by Michael Riordan, a medical doctor. He served as CEO till 1996. A venture capital firm Menlo Ventures made the first investment of $2 million dollars in Gilead. In 1996, it entered a collaborative research agreement with Glaxo for the development of genetic code blockers or antisense. This was terminated in 1998 and its antisense intellectual property portfolio was sold to Isis Pharmaceuticals.

Gilead IPO

Its Initial Public Offering raised $86.25 million. It launched Vistide for the treatment of CMV in patients with AIDS. It collaborated with Pharmacia & Upjohn to reach more markets outside the United States. In 2010, it acquired CGI Pharmaceuticals for $120 million which expanded its research into kinase biology and chemistry. It also acquired Arresto Biosciences for $225 million and their research for treating fibrotic diseases and cancer. It acquired Pharmasset Inc. for $10.4 billion dollars.

Drug Pipelines

This gave it control over the HCV treatment market by holding Sofosbuvir (medicine for Hepatitis C). It was the first firm to manufacture a pill which is known to reduce the risk of HIV infection. It had a market capitalization of US $113 billion and its stock doubled its value after the acquisition. It was ranked the 4th best drug company by Forbes. It attributed its success to FDA approval and potentially revolutionary drug Sovaldi.

The drug has faced its fair share of criticism for its high price. The committee of finance of the United States Senate investigated wherein it sent letters to the CEO of the company as to how it derived its price. It has recently also acquired Phenex Pharmaceuticals, EpiTherapeutics and Nimbus Apollo. This has given access to treat liver diseases such as non-alcoholic steatohepatitis, inhibitors of histone demethylases which regulates gene transcription in cancer and potentially treating hepatocellular carcinoma and an anti-inflammatory drug filgotinib which may be used to treat arthritis and Crohn’s disease. It’s current president and chief executive officer is John F. Milligan.

Long Ideas, S&P 500

GE: Trump’s Infrastructure Policies Favor Blue-Chips

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General Electric is an American multinational conglomerate incorporated in New York. It offers a range of services from power and oil, gas and aviation to financial services and even software development. It is one of the original 12 companies listed on the Dow jones index and while it may have not been listed on the index continuously it currently features in the index. It was one of the earliest companies incidentally funded Thomas Edison’s electricity projects.

General Electric was one of the earliest companies incidentally funded Thomas Edison’s electricity projects. The Radio Corporation of America was founded through GE in 1919. It was also used as the retail arm for radio sales until their separation in 1930. GE has been involved in power generation and its history working with turbines, it introduced the first superchargers. These were incorporated into flights during World War I. It reacquired RCA in 1986 and by that NBC.

Changing Company Focus

In the 1960s, GE was considered one of the major computer companies. It had a line of both general and special purpose computers such as GE200, GE400 etc. IN 1970, GE sold most of its computer division to Honeywell, though it did retain its timesharing options for a while after. GE’s current business divisions include GE Power, GE Oil & Gas, GE Renewable Energy, GE Energy Connections, GE Aviation, GE Healthcare, GE Transportation, GE Capital and GE digital.

Through these GE participates in various markets ranging from generation and distribution of electricity, medical imaging equipment, automation, motors and aviation. It also offers financial services through GE Commercial Finance, GE Consumer Finance etc. GE has a history of large scale water and air pollution. IT heavily contaminated the Hudson river with PCBs between 1947 and 1977. It also polluted the Housatonic River with PCB discharges from 1932 till 1977. Recently GE has shifted its efforts towards using clean renewabl

Recently GE has shifted its efforts towards using clean renewable energy. It unveiled its EV solar Carport which has solar panels on its roof with electric vehicle charging stations under its cover. It has a renewable energy programme ‘Ecomagination’ which has resulted in over 70 green products such as halogen lamps, biogas engines being introduced into the market. It invested nearly $25 billion dollars into the project due to popular market response.

Long Ideas, S&P 500

Goldman Sachs: Financials Ride Trump Train Higher

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Goldman Sachs: Financials Ride Trump Train Higher

The Goldman Sachs Group is an American multinational financial company that provides financial services such as investment management, securities and is involved in investment banking. Investment banking accounts for about 21% of the group’s revenue. It gained a reputation as a white knight against hostile takeovers. It is one of the leading M&A forms and frequently tops the Thomson Financial league tables in size of transactions.

Goldman’s Business

It performs various activities such as financial advisory, underwriting etcetera. Investing and lending activities included 16% of its revenue while Institutional client services such as currency and commodities, equities trading accounts for 45% of its total revenue. It is a primary dealer in U.S Treasury securities market. It was founded in 1869 and is headquartered at New York City.

In August 2012, Goldman Sachs created the first social impact bond to support therapy for 16-18 year olds incarcerated on Rikers Island. It has implemented internal policies to address global warming and climate change. It has given around $119 million in grants since 1999 to promote youth education. It was ranked as one of the best places to work for by Fortune magazine and it supports employee philanthropic efforts. As a result the employees are highly loyal to the organisation.

Mortgage Market Criticism

As a result, the employees are highly loyal to the organization. Goldman Sachs has also been criticised as being responsible for the collapse of the mortgage market. It faced investigations from the Congress, the Justice Department and the SEC which it had to settle. It was alleged to have misled investors. Goldman Sachs has denied the allegations and stated that its customers were aware of the bets. It has been accused of various other ethical violations including insider trader based on information obtained from the U.S government and working to

Goldman Sachs has denied the allegations and stated that its customers were aware of the bets. It has been accused of various other ethical violations including insider trader based on information obtained from the U.S government and working together with dictatorial regimes and increasing prices of commodities through futures speculation. It was accused of helping Greece hide its debt by creating a special credit default swap to cover the high risk of Greece’s national debt. 

Goldman Sachs has donated money to both major American political parties during election cycles as well as the candidates and the super PACs of both parties. In 2016, Goldman employees donated $371,245 to the Republican National Committee and $301,119 to the Hilary Clinton presidential campaign but top employees were forbidden from donating to Donald Trump.

Long Ideas, Options, S&P 500

KO: A Look at Coca-Cola Stock Ahead of Super Bowl

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KO: A Look at Coca-Cola Stock Ahead of Super Bowl

  • Stock choices become increasingly difficult when S&P 500 is at record highs.
  • Seasons like Christmas to not spell the end of buying activity for consumer products.
  • Consumer surveys showing more bullish signs that you might think exist, when viewing valuations at Coca-Cola.

Stock markets have taken some turbulent turns over the last few months, as the post-summer doldrums have been anything but dull.  The SPDR S&P 500 ETF (NYSEARCA: SPY) and the SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA) continue to press toward all-time records and generalized optimism has been the rising tide that has lifted all ships.  Investors looking to establish positions in these assets can use the MetaTrader platform through an MT4 broker, as this is one of the most efficient means of accessing the market that is currently available.

Chart View: SPDR S&P 500 ETF (NYSEARCA: SPY)

When we make our investment analysis in these central benchmarks, investors are most interested in finding opportunities that have been missed and one of the best examples of this can be found in The Coca-Cola Co. (NYSE: KO), as broader consumer spending levels should become evident within the company over the next few months.  

While many investors are being distracted by the holiday cheer that typically accompanies the Christmas season, investors should be looking ahead to the next big consumer event.  This, of course, can be found in the media juggernaut that is the NFL Super Bowl, which will take place on Sunday, February 5th.

Chart View: University of Michigan Consumer Survey

When we are assessing the market reaction to these types of events, it is important to understand the macro foundations that go into determining whether or not consumer spending is likely to change in material terms.  One of the best ways of doing this is to assess activity in the University of Michigan Consumer Survey, which has now risen to 98.2 and the highest level in almost 15 years.  

Now, the importance of these types of trends can be argued from multiple directions.  But the reality is that we are seeing a material shift in the ways American consumers are likely to approach their everyday purchases.  In pure searches on the internet, terms like NFL Playoffs and Super Bowl consistently come in near the top of the list and it is important to understand that this is more of a seasonal event that it is a one-time viewing opportunity for advertisers.  

Chart View: Coca-Cola Co. (NYSE: KO)

The company is commonly thought of as a perennial favorite of leading Berkshire Hathaway (NYSE: BKR.A) mind Warren Buffet, which in part is due to the KO’s handsome dividend yield (which currently stands at 3.36%).  This is a massive yield given the fact that we are still in a low-interest rate environment and in a weak state as far as GDP production is concerned.  

Stock Market Outlook

This means that investors are paid to wait for stock markets to realign themselves in ways that should favor consumer stocks like KO.  On the broadest level, it should be remembered that stock choices become increasingly difficult when the S&P 500 is at record highs.  In cases like this, it is essential to take a long-term view and identify the potential for growth before it happens.  

Seasons like Christmas do not spell the end of buying activity for consumer products, as some of the biggest consumer audience events happen in the months that follow.  All of this points to bullish signs that you might see when viewing valuations at KO, the stock could rally over the next few months.