Thursday, May 29, 2008
Wednesday, May 28, 2008
In addition to the dividend increase, the company announced a new annual share repurchase program authorizing the purchase of up to $70 million of the Company's common stock. Stock purchases will be made from time to time in open market purchases primarily from the cash generated from the settlement of stock options. The company noted this annual authorization program replaces the existing $235 million share repurchase program authorized in April 2007.
Tuesday, May 27, 2008
Friday, May 23, 2008
Wednesday, May 21, 2008
I good example is Home Depot's (HD) first quarter 2008 earnings release earlier this week. In a discussion with the Wall Street Journal, the company's CFO noted:
"the second half of Home Depot's $22.5 billion share-repurchase program remains 'on pause just because of the instability of our business and the instability of the credit markets.'"
For an investor, slowing dividend growth and buyback program reductions can be used to evaluate potential earnings difficulty on a forward looking basis.
Home Depot Net Falls 66% As Store Growth Brakes ($)
Wall Street Journal
By: Ann Zimmerman & Marry Ellen Lloyd
March 21, 2008
Sunday, May 18, 2008
S&P 500 Q1 Earnings Down 25.9%;
Financials Again Posts Negative Earnings (pdf)
Standard & Poor's
By: David R. Guarino & Howard Silverblatt
Friday, May 16, 2008
If an investor waited to put money to work until these support and resistance levels were validated, they would have missed a strong upward move in the market since the end of March as noted in the NYSE Index chart below.
Thursday, May 15, 2008
Wednesday, May 14, 2008
Instead of looking in the rear view mirror, today's yield curve might be predicting stronger economic growth one year in the future. According to the Cleveland Fed study, "...the expected chance of the economy being in a recession next May stands at 0.9 percent, just below April’s 1 percent, and March’s 2.7 percent."
Projecting forward using past values of the spread and GDP growth suggests that real GDP will grow at about a 3.0 percent rate over the next year. This is on the high side of other forecast.
Two related posts on the yield curve are noted below.
The Yield Curve
Federal Reserve Bank of Cleveland
By: Joseph G. Haubrich
May 13, 2008
Monday, May 12, 2008
Sunday, May 11, 2008
Rate of Increase New Qrtly Rate Old Qrtly Rate (YOY) New Yield Old Yield Quality Ranking Pepsi 13.33% $.425 $.375 2.52% 2.22% A+ Rohm & Haas 10.81% $.41 $.37 3.04% 2.74% A- Granger (W.W.) 14.29% $.4 $.35 1.86% 1.63% A Johnson & Johnson 10.84% $.46 $.415 2.76% 2.49% A+ Procter & Gamble 14.29% $.4 $.35 2.45% 2.15% A+ Exxon Mobil 14.29% $.4 $.35 1.8% 1.58% A+ TJX Companies 22.22% $.11 $.09 1.42% 1.16% A+ Chubb 13.79% $.33 $.29 2.5% 2.2% A- Wal-Mart 7.95% $.2375 $.22 1.66% 1.54% A+ Air Products & Chemical Co. 15.79% $.44 $.38 1.8% 1.55% A
Thursday, May 08, 2008
Tuesday, May 06, 2008
...on average the stock market peaked about nine months before the onset of recessions, the pattern of each recession is different. In the 1990–91 recession, for example, the market hit its high less than a month before the recession began, while stocks peaked 14.5 months before the most recent recession began in March 2001.
...the market bottomed on average about five months before the end of recessions, this low has ranged from just about two months before the end of the 2001 recession to more than eight months prior to the end of the 1953–54 recession.
According to the spring edition of the T. Rowe Price Report, "For the 12-month period following the end of the last nine recessions, small-cap stocks on average provided a 24% gain compared with 17.6% for the S&P 500." Going into the slowdown though, "in 18 bear markets since the 1930s, small-cap stocks have suffered a median decline of 29% versus 21.4% for large-cap stocks."
Since studies indicate it is difficult to time the market, investors should use this point in the market cycle to make adjustments to their asset allocation. The adjustments should focus on those that bring an investor's overall portfolio allocation in line with their long term objectives.
Tracking Stock Market Performance
Through Past Economic Recessions (pdf)
T. Rowe Price Report
Saturday, May 03, 2008
In a recent dividend investing white paper (pdf) from Eaton Vance (EV), the company notes dividends have accounted for over 50% of a stock's return since the 1930s.
The white paper shows:
Dividends have been a major component of investment return over the long-term. In fact, over the past 45 years, more than 50% of the annualized total return of the S&P 500 Index came from dividends.1 As the chart below shows, $1000 dollars invested in 1960 in the S&P 500 would have grown to over $114,718 today. But if you take away dividends, that same $1,000 dollars would be worth $24,517.2
1Total return is annual price appreciation, or loss, plus dividends.
2 Source: Lipper Inc. Not meant to represent income from any Eaton Vance fund. S&P 500 Index is an unmanaged index commonly used as a measure of U.S. stock market performance. For illustrative purposes only. Past performance is no guarantee of future results. It is not possible to invest directly in an Index.
Favorable Long-Term Opportunities for Total Return and Income
By: Judith A. Saryan, CFA & Michael A. Allison, CFA
Friday, May 02, 2008
In the meantime, individual investor bullish sentiment rose to its highest level since being reported at 54.64% in October 2007. The percentage of individual investor reported as bullish this week rose to 53.29%. The bull/bear spread widened to +27% versus last week's reading of +19%.
This is a volatile contrarian indicator; however, since the bullish reading bounced along in the 20% range in mid to late March, the S&P 500 Index is up 6+% since that time.