/* Article Data (Server Side) article (o): [object Object] Content (s): Article Not Found. relatedData (o:Array(16)): 0 (o): [object Object] Headline (s): Girl Scouts Celebrate 40th Anniversary Of The Samoa With Sweet Giveaway Teaser (s): LOS ANGELES (CBSLA.com) - A lucky person in Burbank is the winner of a year's supply of Girl Scout cookies. Fifteen golden tickets were hidden in boxes of Samoas during a sweet scavenger hunt in Los Angeles Saturday. 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Source (s): Poughkeepsie Journal DocumentDate (s): 1 hour ago DocumentDate_raw (n): 1425174750000 Link (s): http://www.poughkeepsiejournal.com/story/money/2015/02/28/low-wage-workers-pay/24201463/ DocumentKey (s): HTTPwww.poughkeepsiejournal.com/story/money/2015/02/28/low-wage-workers-pay/24201463/ DMSourceID (s): Google ContentType (s): Article 3 (o): [object Object] Headline (s): Languishing China Factory Gauge Underscores PBOC's Rate Cut Move Teaser (s): Workers assemble products at the Logitech International SA factory in Suzhou, Jiangsu Province, China. Worker advocates such as China Labor Watch have been critical of Apple suppliers, with reports that workers in China are forced to work unpaid overtime ... 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Source (s): wwlp.com DocumentDate (s): 2 hours ago DocumentDate_raw (n): 1425170025000 Link (s): http://wwlp.com/2015/02/28/futuristic-city-with-hyperloop-proposed-in-california/ DocumentKey (s): HTTPwwlp.com/2015/02/28/futuristic-city-with-hyperloop-proposed-in-california/ DMSourceID (s): Google ContentType (s): Article 5 (o): [object Object] Headline (s): REGION: Gas prices soaring Teaser (s): A cyclist rides by a sign at a gas station in Los Angeles posting the latest gas prices on Friday, Feb. 27. , NICK UT, AP. Related article ». Source (s): Press-Enterprise DocumentDate (s): 3 hours ago DocumentDate_raw (n): 1425165341000 Link (s): http://www.pe.com/articles/gas-761366-prices-california.html DocumentKey (s): HTTPwww.pe.com/articles/gas-761366-prices-california.html DMSourceID (s): Google ContentType (s): Article 6 (o): [object Object] Headline (s): Obama Weekly Address: Country Does Best When "Everybody Does Their Fair ... Teaser (s): PRESIDENT OBAMA: Hi everybody. In America, we believe that a lifetime of hard work and responsibility should be rewarded with a shot at a secure, dignified retirement. Source (s): RealClearPolitics DocumentDate (s): 5 hours ago DocumentDate_raw (n): 1425160198000 Link (s): http://www.realclearpolitics.com/video/2015/02/28/obama_weekly_address_country_does_best_when_everybody_does_their_fair_share.html DocumentKey (s): HTTPwww.realclearpolitics.com/video/2015/02/28/obama_weekly_address_country_does_best_when_everybody_does_their_fair_share.html DMSourceID (s): Google ContentType (s): Article 7 (o): [object Object] Headline (s): Buffett looks to succession, signals future growth problem Teaser (s): NEW YORK (Reuters) - In his 50 years at the helm of Berkshire Hathaway Inc, Warren Buffett has transformed a failing textile company into a sprawling conglomerate that has vastly outperformed most of the rest of corporate America. Source (s): Reuters DocumentDate (s): 5 hours ago DocumentDate_raw (n): 1425158550000 Link (s): http://www.reuters.com/article/2015/02/28/us-berkshire-buffett-idUSKBN0LW0YN20150228 DocumentKey (s): HTTPwww.reuters.com/article/2015/02/28/us-berkshire-buffett-idUSKBN0LW0YN20150228 DMSourceID (s): Google ContentType (s): Article 8 (o): [object Object] Headline (s): Herbalife CEO Johnson's 2014 Compensation Down 36% To $6.73 Mln Teaser (s): disclosed in a regulatory filing that its Chairman and Chief Executive Officer Michael Johnson received a 2014 total compensation that was about 36 percent lower than the prior year, while his base salary remained unchanged in 2014 as well as 2013. 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Source (s): ValueWalk DocumentDate (s): 14 hours ago DocumentDate_raw (n): 1425124800000 Link (s): http://www.valuewalk.com/2015/02/interest-rates-u-s-dollar-shovelin-schmitt-against-the-tide/ DocumentKey (s): HTTPwww.valuewalk.com/2015/02/interest-rates-u-s-dollar-shovelin-schmitt-against-the-tide/ DMSourceID (s): Google ContentType (s): Article 10 (o): [object Object] WSODIssue (s): |6123342|24812378 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): China's electric vehicle market: Kandi and Tesla Link (s): http://folionation.squarespace.com/news/2015/2/27/chinas-electric-vehicle-market-kandi-and-tesla.html Thumbnail (s): DocumentDate_raw (n): 1425055080000 DocumentDate (s): February 27, 2015 DocumentDate_smart (s): Feb 27, 2015 DocumentKey (s): 1107-290734296785735248649-0O9B14AHKGJNVMK6ESIFTBFQFF ContentType (s): Article TrackingPixel (s): Teaser (s):

Kandi electric vehicles are selling like hot cakes in China. Meanwhile Tesla hits a wall.

Value investors should pay attention when stocks fall steadily from previous highs. Kandi Technologies (KNDI) is a perfect example. Share prices peaked on July 22 at $22.49 and bottomed out on December 16, at a 52-week low of $10.30. Since then, the vehicle maker’s stock has rebounded slowly, the primary reason being that the SEC has closed its investigation into the company.

Kandi is a pure electric vehicle maker that runs a joint venture car-share program in China. The company reported sales of $44.21 million for the quarter ending September 30 and announced in December that it delivered 700 EVs to a distributor in Guangzhou. Altogether, the firm delivered 14,398 units in 2014.

Kandis’ success is in stark contrast to Tesla’s (TSLA) troubles in China. Forbes has called the company’s venture into the Chinese market a “flop,” noting that Tesla China imported just 444 units in December, a sharp drop from 747 the previous month. June Jin, Tesla China’s Vice President of Communications, left the company after less than a year on the job, and CEO Elon Musk has threatened further layoffs.

For the last year, Tesla and Kandi’s stocks are performing roughly the same, but this could change soon. Car-sharing is rapidly becoming an established trend in China, and the government has extended subsidies for electric vehicles to 2020, which may stimulate demand for domestic EV manufacturers.

In terms of valuation, Kandi is much more appealing than Tesla. The stock trades at 3.1 times book, compared to 27.1 for Tesla. Kandi’s debt to equity ratio is 0.23, compared to 2.51 for Tesla.

On the other hand, judging by its stock price, Tesla’s branding value is enormous. Founder Elon Musk is confident the firm could be worth as much as Apple by 2025. In the U.S., where Tesla has enjoyed strong demand, mass adoption will ultimately depend on the availability of superchargers.

Bottom line

Neither Tesla nor Kandi’s stock is without risk. Tesla’s valuation is scary, but the firm is expecting better sales for its flagship Model S. Kandi’s business may now be beyond the concerns of the SEC, but renewed worries may emerge. The latter scenario is likely: the short float on Kandi’s stock is 25.50 percent.

Written by Chris Lau.

 

Click on the interactive chart to view data over time. 

 

1. Kandi Technologies Group Inc. (KNDI, Earnings, Analysts, Financials): Engages in the design, development, manufacture, and commercialization of off-road vehicles, motorcycles, mini-cars, and special automobile related products. Market cap at $640.05M, most recent closing price at $13.83.

 

 

2. Tesla Motors Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $25.98B, most recent closing price at $207.19.

 

(List compiled by Chris Lau. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

 

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Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

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11 (o): [object Object] WSODIssue (s): |36276|242250|72887506|248333 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): BlackBerry could see a boost in device sales Link (s): http://folionation.squarespace.com/news/2015/2/26/blackberry-could-see-a-boost-in-device-sales.html Thumbnail (s): DocumentDate_raw (n): 1424971140000 DocumentDate (s): February 26, 2015 DocumentDate_smart (s): Feb 26, 2015 DocumentKey (s): 1107-290734296785735247251-5VVCNAC16V9VKP1EONLHOI651O ContentType (s): Article TrackingPixel (s): Teaser (s):

 AT&T is offering BlackBerry's Classic and Passport devices on its site and in retail stores.

Unless you're Xiaomi or OnePlus, selling smartphones through a direct to consumer (DTC) model is unheard of. This is what BlackBerry (BBRY) was doing in the US until February 20, when its flagship Passport and Classic devices became available on AT&T's (T) website and at retail stores. This move could help BlackBerry boost device sales.

Custom design

BlackBerry has customized the Passport for the AT&T network, adding rounded edges, for example. AT&T is also making the Classic available at a much lower cost. Consumers may choose either the Passport, at $200 with a two-year contract, or the Classic, at $50 with a two-year contract.

Challenges ahead

AT&T's support for BlackBerry is interesting, given that the company is not even in the top five smartphone makers in terms of US market share. Xiaomi, Lenovo, ZTE, and Huawei all make smartphones that cost significantly less for consumers than the Passport or the Classic. At a $200 price point, the Passport will have a hard time competing with Apple's (APPL) iPhone or devices running Google's (GOOG) Android OS. Yet the Passport has a physical keyboard, a decent camera sensor and a massive battery. In short, the device should still interest business users who prefer a keyboard for input.

Bottom line

While BlackBerry sales are unlikely to skyrocket as AT&T offers Classic and Passport devices, it could still be a positive development for a firm in the midst of a turnaround. The stock is still hovering around $10 for now, and acceleration in revenue growth will take several quarters.

Written by Chris Lau.

Disclosure: The author owns a long position in BlackBerry.

Click on the interactive chart to view data over time. 

1. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $750.17B, most recent closing price at $128.79.

 

 

2. BlackBerry Limited (BBRY, Earnings, Analysts, Financials): Offers BlackBerry wireless communications platform solution, which includes the sale of BlackBerry handheld devices; and the provision of data communication, and compression and security infrastructure services enabling BlackBerry handheld wireless devices to send and receive wireless messages and data. Market cap at $5.56B, most recent closing price at $10.51.

 

 

3. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world's most popular search engine. Market cap at $370.17B, most recent closing price at $543.87.

 

 

4. AT&T Inc. (T, Earnings, Analysts, Financials): Provides telecommunication services to consumers, businesses, and other service providers worldwide. Market cap at $177.45B, most recent closing price at $34.21.

 

(List compiled by Chris Lau. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

 

 

12 (o): [object Object] WSODIssue (s): |5694821|183704|50801295|40546234|4118275 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Is it time to lift the ban on crude oil exports? Link (s): http://folionation.squarespace.com/news/2015/2/25/is-it-time-to-lift-the-ban-on-crude-oil-exports.html Thumbnail (s): DocumentDate_raw (n): 1424894160000 DocumentDate (s): February 25, 2015 DocumentDate_smart (s): Feb 25, 2015 DocumentKey (s): 1107-290734296785735245972-55IELRPI98SQVF5FDD7AIGM356 ContentType (s): Article TrackingPixel (s): Teaser (s):

Falling oil prices hurt oil companies, especially ones that frack. Would lifting the crude oil export ban help?

It seemed to make sense at the time.

US field production of crude oil peaked at just under 3.52 billion barrels in 1970. In January 1973, currency shocks and Nixon’s resignation sent global stock markets tumbling. Then on October 6, Egypt and Syria sparked the Yom Kippur War with Israel, putting nuclear powers on alert and throwing global energy markets into conniptions. OPEC cut production and raised prices, and the Arab Oil Embargo was underway.

The price of a barrel quadrupled. Angry lines formed outside of gas stations across the US. In an effort to maintain supply, Gerald Ford signed a ban on most crude oil exports into law in December 22, 1975.

Why lift the ban?

The law stands, but a growing chorus is calling for it to be lifted. The logic is worth considering.

First, as The Economist reports, the US already exports a number of hydrocarbons, including liquefied petroleum gas (LPG), natural gas liquids (NGL) and liquefied natural gas (LNG). The US is the world’s largest exporter of diesel, kerosene and gasoline: as refined products, these are legal to export, but the definition of “refined” is so broad that stabilized crude—the kind that’s safe to transport via pipeline—counts. Some companies have obtained licenses to export entirely unrefined crude oil, so far only to Canada but perhaps soon to Mexico as well.

Second, the ban has hampered the efficiency of the US economy. As the Council on Foreign Relations’ Blake Clayton writes, mismatches between crude oil quality and the locally available refining and transportation capabilities mean that “producers are forced to choose between leaving oil in the ground and pumping it at depressed prices.”

Who benefits?

The counterargument is the same as it was in 1975. Since the US remains a net importer of crude oil, exporting it is bad math. As Clayton notes, though, the relationship between commodity prices and trade isn’t just an issue of addition and subtraction. Inefficiencies along the supply chain may have more of an effect on prices than anything else.

Some suspect that shadowy industry interests are at work: companies want to export crude oil in order to pad thinning margins, and American consumers will suffer at the pump. The first argument is undoubtedly true. But lifting the export ban might actually lower gasoline prices, since, as Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, told NPR, “the price consumers are paying for gasoline is being set by the world price of oil, not by the US price.” In any event, the US already exports gasoline—more than any other country.

There are clashing interests at work, of course. Environmentalists support the ban, predictably, but so do independent refiners, whom the status quo makes the gatekeepers of US oil exports: they turn unexportable crude into exportable petroleum products.

The frackers

The ban falls hardest on the frackers. This is ironic, since the “shale revolution” is largely responsible for the supply glut that led to low oil prices in the first place. They are in part victims of their own success.

The Market Vectors Unconventional Oil & Gas ETF (FRAK) is down 19.4% for the year:

Some of the ETF’s holdings have fared far worse. Five—counting Linn Energy LLC (LINE) and LinnCo (LNCO) as one—are down 50% or more for the year.

Two of these companies, Breitburn Energy Partners LP (BBEP) and Linn Energy, have cut dividends in order to save cash, reports The Wall Street Journal. Linn, which was drawing on credit to pay shareholders even before oil prices fell, has also cut capital spending by half.

Another of these badly hurting companies, EXCO Resources (XCO), suspended its dividend in December.

Oasis Petroleum (OAS), which is down nearly 60% for the year, announced in December that it would cut capital spending and it would transition to operating six rigs by the end of March, down from 16 in September.

If the ban were lifted, local refineries would have less control over what projects are economical to pursue, and business could increase for ailing frackers. Despite the global supply glut, the latter might find markets for export—perhaps beyond Canada and Mexico—which are currently dominated by the industry giants.

Of course, just as an add-and-subtract approach to assessing the export ban is simplistic, a more-demand-more-money analysis might also being misleading. Many companies have heavily hedged their production for next year. In November, the CEO of Laredo Petroleum (LPI), another severe drag on FRAK’s performance, stated that the company had hedged 60% and 90% of its expected 2015 gas and oil production, respectively.

The new normal

Of course, few will carry on the argument if oil returns to breakeven levels. The International Energy Agency thinks all of these spending cuts might alleviate the supply glut. While the new normal may not be $80-100 per barrel, it’s unlikely those crying out about a $40 future will be vindicated this decade.

13 (o): [object Object] WSODIssue (s): |141221|144221|172027|196723 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Everything is awesome for Lego Link (s): http://folionation.squarespace.com/news/2015/2/25/everything-is-awesome-for-lego.html Thumbnail (s): DocumentDate_raw (n): 1424893200000 DocumentDate (s): February 25, 2015 DocumentDate_smart (s): Feb 25, 2015 DocumentKey (s): 1107-290734296785735245957-4MCHMU6UPI997MIF1LQM9UTRE0 ContentType (s): Article TrackingPixel (s): Teaser (s):

Lego is riding a wave of sales growth that puts Mattel to shame. Sorry, Barbie.

Having surpassed Mattel (MAT) as the world's largest toymaker by sales in September, Lego reported Wednesday that it achieved 15 percent growth in sales in 2014 and netted $1.5 billion in profit, up 16 percent from 2013.

The Lego Movie

Much of the company's success is due to The Lego Movie, distributed by Time Warner (TWX), which grossed $258 million at the box office and boasts a 96 percent rating on Rotten Tomatoes. Many consider the Academy's refusal to nominate it for the best animated feature category a snub. That didn't stop Tegan and Sara and the Lonely Island from proclaiming the complete and thorough awesomeness of everything at the Oscars while awarding Oprah the Lego Oscar for best Oprah. "Everything is Awesome" lost out to Selma for best original song.

But no matter. Two spin-offs are on their way and a full-blown sequelThe Lego Movie Sequel, is slated for 2018.

Sadly, you can't buy shares of Lego, which is privately held. But what about other toymakers? Does the rising tide lift all cheap, plastic boats, batteries not included?

Mattel

Nope. Here are Mattel's stock price and quarterly sales over the past year:

Worldwide net sales were down 7 percent in 2014, in part due to the impact of the strong dollar. Sales of the Barbie brand were particularly dismal. According to Fortune, a portion of the drop can be attributed to Disney's (DISFrozen-mania and girls' shorter doll-playing window, down to three years from six. 

Perhaps it is also due to an increasing consciousness of the unhealthy body image that Barbie dolls perpetuate. The contrast between a Barbie doll and a doll with the average American woman's proportions is striking. The contrast between an average flesh-and-blood woman and a woman who has spent tens of thousands of dollars to turn herself into a flesh-and-blood-and-plastic Barbie doll is disturbing. When your biggest fan is convinced she can overcome the need to eat and survive by inhaling "cosmic micro-food" alone, well, that's an issue.

New markets

The contrast with Lego is significant. Unfavorable exchange rates are a real problem for dollar-based companies. Yet, according to CEO Jørgen Vig Knudstorp, Lego has managed to achieve "very nice growth in Russia" despite the ruble, which is tumbling compared to the dollar and Danish krone alike. And in contrast to Mattel's image problems, Lego's new Friends line has begun to even out its wildly skewed gender balance—until recently 90 percent male—with relatively little ire.

The direct approach

Luckily for Lego believers, there is a way to invest directly in the company besides stock. Very directly. According to USA Today, a $10,000 investment in the Vanguard S&P 500 ETF (VOO) would have earned a 15 percent return from between the end of 2011 and the end of 2012, dividends included. A $10,000 investment in the exclusive Emerald Night Lego train sets—released in 2009 and discontinued in 2012—would have blown that investment out of the water, clocking a 103 percent profit in the same period. 

Mattel has performed terribly, but that's not true of all publicly traded toysmiths. The other three stocks in the toys and games industry have seen positive returns in the past year. 

Think about it, if stocks and bonds and real estate and education aren't your thing.

 

Click on the interactive chart to view data over time. 

 

1. Gaming Partners International Corporation (GPIC, Earnings, Analysts, Financials): Engages in the manufacture and supply of casino table game equipment worldwide. Market cap at $70.40M, most recent closing price at $8.90.

GPIC is up 1.37 percent in the past year. 

 

2. Hasbro Inc. (HAS, Earnings, Analysts, Financials): Engages in the design, manufacture, and marketing of games and toys. Market cap at $7.80B, most recent closing price at $62.05.

Hasbro is up 17.54 percent in the past year. 

 

3. JAKKS Pacific Inc. (JAKK, Earnings, Analysts, Financials): Designs, produces, markets, and distributes toys and consumer products worldwide. Market cap at $165.84M, most recent closing price at $7.13.

JAKKS Pacific is up 4.85 percent in the past year. 

 

4. Mattel Inc. (MAT, Earnings, Analysts, Financials): Engages in the design, manufacture, and marketing of various toy products worldwide. Market cap at $8.58B, most recent closing price at $25.32.

Mattel is down 26.2 percent for the year.

 

(List compiled by David Floyd. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

 

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

 

 

14 (o): [object Object] WSODIssue (s): |77435|89999|113574|4874202|24259044|10808544 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Disney World tickets are pricier than ever Link (s): http://folionation.squarespace.com/news/2015/2/23/disney-world-tickets-are-pricier-than-ever.html Thumbnail (s): DocumentDate_raw (n): 1424729820000 DocumentDate (s): February 23, 2015 DocumentDate_smart (s): Feb 23, 2015 DocumentKey (s): 1107-290734296785735242505-3NI3GU8U6ESQM3PLFADEPLGA18 ContentType (s): Article TrackingPixel (s): Teaser (s):

Money can't buy happiness, but it can get you into the happiest place on Earth (with Disney World tickets).

Have an extra $105 burning a hole in your wallet? Then you're in luck—that's now the price of a one-day Disney World ticket for the Magic Kingdom in Orlando, Florida. The Associated Press reports that Walt Disney Co. (DIS) raised the prices for all tickets to its domestic theme parks by $3 to $6 on Sunday. So while a single-day ticket for Disneyland would have set you back $96 on Saturday, it now costs $99 for entry.

And while Disney says it raises ticket prices annually, the company's fourth-quarter, record-breaking US theme park attendance may have played a role in the decision. Attendance rose 7 percent during that period, and Disney resorts hotels experienced an 8 percent increase in bookings, resulting in an impressive 89 percent occupancy rate. 

Disney World and Disneyland aren't the only theme parks seeing bigger crowds and longer lines. In 2013, worldwide attendance at theme parks increased by 5.4 percent in 2013 at parks run by the 10 largest companies. Attendance at North American theme parks grew by 2.7 percent, or 3.6 million visits, at the 20 largest parks in the region.  Then there's SeaWorld (SEAS)—attendance fell by 4 percent in 2013, which may or may not be due to Blackfish, a documentary about the park's treatment of captive orcas. 

Below is a list of theme park-related stocks that are rallying above their 20-day, 50-day and 200-day simple moving averages (SMA), like Disney World ticket prices, as of 3:00PM EST. The stocks also have positive sales growth on a quarter-over-quarter basis and positive sales growth over the last five years. In addition to the companies that own theme park stocks, we tossed credit card companies that have theme park-related perks since that's another way of enticing people to visit. 

Do you think growing attendence at theme parks will help these stocks sustain their upward momentum? Or will they plummet like the Tower of Terror

Click on the interactive chart to view data over time. 

1. Comcast Corporation (CMCSA, Earnings, Analysts, Financials): Provides entertainment, information, and communications products and services in the United States and internationally. Market cap at $150.50B, most recent closing price at $58.50.

The stock is rallying 2.53% above its 20-day SMA, 2.91% above its 50-day SMA, and 7.25% above its 200-day SMA.

Sales growth quarter-over-quarter at 4.00%. Sales growth over the last five years at 13.40%.

Comcast owns Universal Parks & Resorts, which operates Universal Studios Hollywood, Universal Orlando Resort, Universal Studios Japan and Universal Studios Singapore. The company is set to open Universal Studios Moscow in 2018 and Universal Studios Beijing in 2019.

 

2. The Walt Disney Company (DIS, Earnings, Analysts, Financials): Operates as an entertainment company worldwide. Market cap at $177.69B, most recent closing price at $104.55.

The stock is rallying 5.89% above its 20-day SMA, 9.67% above its 50-day SMA, and 18.55% above its 200-day SMA.

Sales growth quarter-over-quarter at 8.80%. Sales growth over the last five years at 6.20%.

 

Through its Walt Disney Parks and Resorts division, Disney manages Disneyland Resort in Anaheim, California; Walt Disney World Resort in Lake Buena Vista, Florida; Tokyo Disney Resort in Urayasu, Japan; Disneyland Paris in Marne-la-Vallée, France; and Hong Kong Disneyland Resort in Hong Kong, China.

The official opening date for the Shanghai Disney Resort, the company's newest park, should be announced in the coming months.

 

3. Cedar Fair L.P. (FUN, Earnings, Analysts, Financials): Operates amusement and water parks in the United States and Canada. Market cap at $3.03B, most recent closing price at $54.26.

The stock is rallying 2.95% above its 20-day SMA, 9.50% above its 50-day SMA, and 13.57% above its 200-day SMA.

Sales growth quarter-over-quarter at 15.60%. Sales growth over the last five years at 4.80%.

The company operates 14 theme and water parks in the United States and Canada.

 

4. MasterCard Incorporated (MA, Earnings, Analysts, Financials): Provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers' cheque programs. Market cap at $105.38B, most recent closing price at $90.79.

The stock is rallying 5.58% above its 20-day SMA, 6.73% above its 50-day SMA, and 6.56% above its 200-day SMA.

Sales growth quarter-over-quarter at 13.60%. Sales growth over the last five years at 13.20%.

In addition to being the official payment partner of The Walt Disney Company EMEA & Russia and of Euro Disney Associés C.S.A, MasterCard offers Disney-related perks for cardholders.  

 

5. Six Flags Entertainment Corporation (SIX, Earnings, Analysts, Financials): Operates regional theme, water, and zoological parks in North America. Market cap at $4.41B, most recent closing price at $47.13.

The stock is rallying 7.76% above its 20-day SMA, 11.07% above its 50-day SMA, and 22.96% above its 200-day SMA.

Sales growth quarter-over-quarter at 7.40%. Sales growth over the last five years at 2.00%.

Six Flags operates 13 theme parks and 7 water parks in North America (including Canada and Mexico).

 

6. Visa Inc. (V, Earnings, Analysts, Financials): Operates retail electronic payments network worldwide. Market cap at $167.59B, most recent closing price at $273.0.

The stock is rallying 3.89% above its 20-day SMA, 4.40% above its 50-day SMA, and 18.76% above its 200-day SMA.

Sales growth quarter-over-quarter at 7.20%. Sales growth over the last five years at 12.90%.

Disney Visa cardmembers can redeem rewards for tickets, resort stays and other purchases at Disney theme parks. 

 

(List compiled by Mary-Lynn Cesar. Monthly return data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

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15 (o): [object Object] WSODIssue (s): ||59146|198609|202757|227524|236532|268937|278490 DMSourceID (s): KAPITALL Source (s): Kapitall Headline (s): Never forget rule number one: Rob McIver talks risk management Link (s): http://folionation.squarespace.com/news/2015/2/23/never-forget-rule-number-one-rob-mciver-talks-risk-managemen.html Thumbnail (s): DocumentDate_raw (n): 1424725980000 DocumentDate (s): February 23, 2015 DocumentDate_smart (s): Feb 23, 2015 DocumentKey (s): 1107-290734296785735242389-6EKEEJ2QNSLGEO955CN3CK8CD8 ContentType (s): Article TrackingPixel (s): Teaser (s):

We sat down with Rob McIver of Jensen Investment Management to discuss his approach to risk management.

As Portfolio Manager of the Jensen Quality Growth Fund (Class I: JENIX, Class J: JENSX, Class R: JENRX), Rob McIver and his colleagues take a "boot camp" approach to risk management. To start, they run a grueling screen that requires ten consecutive years of at least 15 percent return on equity (ROE). Only about 200 companies make the cut. All of these are profitable (by virtue of the ROE requirement) and can reasonably be considered "all-weather" companies, especially given that the 10-year window includes the financial crisis of 2008 and 2009. This universe is winnowed down even further with screens for strong fundamentals. When all is said and done, the fund currently invests in only 26 companies.

With that introduction, here's a rundown of our conversation on the Jensen Quality Growth Fund's approach to risk management.

DF: So Rob, I'll start with the obvious question: what is risk, and how do you hedge against it?

RM: The answer might seem obvious, but it's an important question to consider. For a lot of people, the risk is that you'll underperform a certain index in the short term. We prefer a more holistic view. You may have heard of Warren Buffett's definition: risk is the permanent loss of capital. That's the stance we take, and we also make sure to follow his two inviolable rules:

Rule number one: Never lose money.
Rule number two: Never forget rule number one.

To accomplish that, we try to single out companies with durable competitive advantages. To paraphrase another Warren Buffett maxim, we don't trade stocks, we buy businesses. 

There are two kinds of risk we analyze when considering an investment: business risk and pricing risk. 

Business risk is the risk that a company will tank during an economic downturn due to poor fundamentals. We measure a stock's performance from market peak to market peak in order to fully account for challenging market conditions.

First of all, we look for strong free cash flow. Then we look for signs that the company is invested in growth: geographical expansion, research and development and, ideally, growth in dividends and share buybacks that reward shareholders in the short term. A long-term growth strategy rather than quarter-by-quarter plans to beat earnings estimates is an important consideration for us.

Pricing risk is the risk that you are buying a company’s stock when it's overvalued. We try to identify stocks that are undervalued in terms of industry standard metrics like price to earnings (P/E), price to book (P/B), etc. But for Jensen, free cash flow is also a key consideration here, and our primary valuation tools are discounted cash flow methodologies to try to identify relatively cheap stocks.

DF: It sounds like you've got quite the regimen for determining when to buy a stock. What about selling?

RM: We review the fund's holdings every day. The first reason we'll sell a stock is if it doesn't meet the ROE threshold. For example,  Ametek (AME) is one holding we sold because its ROE was 14.8 percent in 2009.

DF: In 2009? That's harsh.

RM: We like to think of it as disciplined. The thing is we rarely run into that situation since the average ROE for our portfolio companies is closer to 30 percent. When one of our stocks' performance dips like that, it usually turns out to be an underlying business issue, so we stick to that policy.

We'll also sell a holding if the share price exceeds our estimate of full value. We sold ADP (ADP) in December because all the valuation metrics were flashing red. 

DF: Are there any particular sectors you favor or avoid?

RM: We're sector agnostic. We prefer to take a company-specific approach when allocating our holdings—not to be confused with a stock-trading approach. Still, some patterns emerge. We've never owned a telecom or utility company, since they tend to be subject to too much regulation to generate the kind of shareholder returns we require. We've never owned a pure energy play either. Energy companies produce a product for which they don't control the end price, which turns us off. That said, we do see opportunities for companies with indirect exposure to energy.

DF: So those are the sectors you stay away from, how about the ones you like?

RM: We like healthcare. UnitedHealth (UNH) is a recent purchase—it’s a company that we've followed for some time. The Affordable Care Act has added a measure of uncertainty to the sector since 2010, but UnitedHealth has some very compelling advantages. It's the largest managed healthcare company in the US. It has a dominant position in a broad market and the size to exploit economies of scale. It also benefits from the huge amount of data it's collected. And we like that it's returned $14.5 billion to shareholders through dividends and buybacks over the past five years.

UnitedHealth is primarily a US company, but most of our investments are global. We favor global industrials like PepsiCo (PEP), DuPont (DD), P&G (PG) and 3M (MMM). 

DF: Does that global focus include emerging markets?

RM: We avoid direct exposure to emerging markets, which means no ADRs. Emerging markets are subject to huge fluctuations, and sometimes lower standards can leave investors in the dark about how their holdings are actually performing. We take comfort in the SEC’s and the US accounting regulatory requirements—standards that are not always available in less developed markets.

But we don't mind indirect exposure. About 50 percent of our companies’ sales are in the US. We have exposure to Latin America, particularly through a company like Colgate-Palmolive (CL), which has been diversified overseas since the 1920s and dominates the oral care market in that region. We have exposure to China through Becton Dickinson (BDX), but China's arguably not even "emerging" anymore.

DF: Sorry, Becton who? 

RM: They supply 70 percent of the world’s demand for needles and syringes. If you think about it, it's a beautiful model with a strong annuity-like stream of earnings. They sell a product that people use once, throw away and buy again. This company sells 29 billion syringes a year, and the growth potential in emerging markets is enormous. Its ROE is 24 percent, and annual dividend growth has been over 11 percent over the past ten years. The company doesn’t get the buzz that a company like Apple does, but we think the investment opportunity is compelling.

DF: Alright Rob, thank you so much for taking the time to speak with us. Do you have final thoughts for our readers about how to invest going forward?

RM: I think the best lesson for investors to internalize going forward is that the status quo for the past six years is going to change. If you've been making money, that's because everyone has. The new normal is going to look a lot more like the fourth quarter of 2014, unfortunately. Investors are going to have to be more discerning as low-low interest rates and quantitative easing come to an end, and we think fundamentals will be much more important in that environment.

Rob McIver is co-Portfolio Manager of the Jensen Quality Growth Fund. Read more about the fund here. The above article is a loose reconstruction of an interview conducted by phone on February 4, 2015. 

This interview was conducted by Kapitall Wire. The information contained in the article is not guaranteed as to its accuracy or completeness. This material should not be considered an offer for any of the securities referenced. The information provided in this article does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. All of the stock charts contained in this article, as well as the stock-specific information shown in the article, including the buy/sell ratings, were obtained from Kapitall Wire and have not been provided by or endorsed by the Jensen Quality Growth Fund.​


Below are the Jensen Quality Growth Fund's largest holdings, together comprising around 42 percent of the total. Click on the interactive chart to view data over time. 

 

Click on the interactive chart to view data over time. 

 1. Accenture plc (Earnings, Analysts, Financials): Provides management consulting, technology, and business process outsourcing services worldwide. Market cap at $60.13B, most recent closing price at $90.49.

Accenture is the fund's sixth largest holding, at 4.99 percent and 3,037,000 shares. 

 

2. Becton Dickinson and Company (BDX, Earnings, Analysts, Financials): Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Market cap at $28.07B, most recent closing price at $145.51. 

Becton Dickinson is the fund's largest holding, at 6.52 percent and 2,524,000 shares.

 

3. Medtronic plc (MDT, Earnings, Analysts, Financials): Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. Market cap at $111.79B, most recent closing price at $78.79.

Medtronic is the fund's eighth largest holding, at 4.70 percent and 3,535,000 shares.

 

4. 3M Company (MMM, Earnings, Analysts, Financials): Operates as a diversified technology company worldwide. Market cap at $106.71B, most recent closing price at $168.12.

3M is the fund's seventh largest holding, at 4.94 percent and 1,628,000 shares.

 

5. Pepsico Inc. (PEP, Earnings, Analysts, Financials): Engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. Market cap at $146.84B, most recent closing price at $99.06.

Pepsico is the fund's second largest holding, at 5.47 percent and 3,137,000 shares.
 

 

 

6. Praxair Inc. (PX, Earnings, Analysts, Financials): Engages in the production, sale, and distribution of industrial gases primarily in North America, South America, Europe, and Asia. Market cap at $37.68B, most recent closing price at $129.31.

Praxair is the fund's fifth largest holding, at 5.13 percent and 2,136,000 shares. 

 

7. The TJX Companies Inc. (TJX, Earnings, Analysts, Financials): Operates as an off-price apparel and home fashions retailer in the United States and internationally. Market cap at $47.35B, most recent closing price at $68.73.

TJX is the fund's third largest holding, at 5.20 percent and 4,138,000 shares. 

 

8. United Technologies Corporation (UTX, Earnings, Analysts, Financials): Provides technology products and services to the building systems and aerospace industries worldwide. Market cap at $112.59B, most recent closing price at $124.11.

United Technologies is the fund's fourth largest holding, at 5.17 percent and 2,430,000 shares. 

 

(List compiled by David Floyd. Fund holdings information sourced from Jensen Investment Management. Monthly returns data sourced from Zacks Investment Research. All other data sourced from FINVIZ.)

 

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© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

 

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