NEW YORK, Mon Aug 20, 2012 – Investors have been attracted to Waste Management Inc.’s high dividends, but the stock of the trash hauling company is at risk of falling as much as 10 percent to 15 percent if it continues missing profit expectations, Barron’s financial weekly reported on Sunday.
Waste Management’s revenue, earnings, margins and cash flow have been stagnant for years as many investors seem content collecting a 4 percent annual yield on the stock, Barron’s said.
It said a Waste Management spokeswoman noted that the company already has started to slow its rate of dividend increases. After two years of 10-cent increases, the payout was up 6 cents a share in 2012 from 2011.
“With smaller increases, the stock is likely dead money at best, and is at risk of falling 10 percent to 15 percent toward $30 if the company’s habit of missing profit expectations continues,” the Barron’s report said.
Waste Management closed at $35.66 per share on Friday.
The dividend consumes most of Waste Management’s net income and free cash flow, Barron’s said. It said a few corporate insiders had sold about 180,000 shares during the past six months near current prices instead of holding them for the attractive dividend.
NEW YORK, Aug 3, 2012 – The software glitch that cost Knight Capital Group $440 million in just 45 minutes reveals the deep fault lines in stock markets that are increasingly dominated by sophisticated high-speed trading systems. But Wall Street firms and regulators have few easy solutions for such problems.
Automated trading can handle massive volumes of transactions in milliseconds, something human traders could never do. But the benefits come at a cost: stock markets have become a jumble of exchanges, market makers, high-frequency traders, and investors using different systems that can interact in unexpected ways.
The May 2010 ‘Flash Crash’, in which U.S. stocks inexplicably sank in a matter of minutes, illustrated how technological problems can cascade. These sorts of problems may be more likely given that many market participants are under pressure to cut costs – including technology spending – as trading margins narrow and regulation costs increase.
Since April, a series of embarrassing and costly technology issues have rocked markets and shaken the confidence of investors.
BATS Global Markets, an exchange, was unable to complete its own initial public offering because of a technical problem. Nasdaq botched the market debut of Facebook due to technical glitches, costing it tens of millions of dollars, while UBS AG lost more than $350 million in trading Facebook shares and is blaming Nasdaq.
“The structure just may be too complicated to work,” said Larry Tabb, founder of Tabb Group, a consulting firm that focuses on capital markets.
BOSTON, Wed Jun 13, 2012 – Top portfolio managers at Fidelity Investments are getting more scrutiny than ever of their investment decisions as the Boston-based mutual fund company works to reverse a pattern of inconsistent performance.
Stock mutual fund performance, according to Fidelity’s own internal assessment, has ranged from great to lousy over the past few years. In 2008, Fidelity hit rock bottom when its stable of stock funds beat only 36 percent of their peers during the height of the credit crisis.
Four years later, Fidelity executives concede their work is not finished.
“Turnaround is not the word I would use,” Brian Hogan, president of Fidelity’s equity division since 2009, told Reuters in an interview. “That would suggest we are done showing improvement.”
Investors are not waiting around. They yanked $9 billion from Fidelity’s diversified stock funds in 2012 through May after pulling $21 billion last year and $15 billion in 2010, fund researcher Lipper, a unit of Thomson Reuters, said.
American Funds manager Capital Research & Management was the only firm doing worse over the past few years, Lipper said. Between them, the two wounded giants accounted for almost three quarters of the entire industry’s outflow of $89 billion from the category last year and two-thirds so far this year.
Competitors like T. Rowe Price Group Inc. and Vanguard Group, meanwhile, each had stock fund inflows this year of $2 billion and have experienced positive flows for the segment every year since the end of 2008, Lipper said.
SAN FRANCISCO, Tue Apr 24, 2012 – Apple Inc. on Tuesday reported quarterly revenue that handily beat Wall Street estimates, driven by strong demand for its iPhones and iPads, sending its shares 3.5 percent higher.
The consumer electronics giant said its fiscal second-quarter revenue rose to $39.2 billion, better than the average analyst estimate of $36.8 billion, according to Thomson Reuters I/B/E/S.
NEW YORK, Wed Apr 18, 2012 – Shares in Chesapeake Energy Corp. fell nearly 10 percent on Wednesday after a Reuters report that CEO Aubrey McClendon had borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells.
The stock dropped 9.6 percent to $17.28 in early afternoon. Shares last traded at that level in July 2009.
The volume of Chesapeake shares changing hands was more than double the 10-day moving average, and the stock was the most actively traded on the New York Stock Exchange.
“It’s certainly not a positive article,” said Capital One Southcoast analyst Marshall Carver. “I think that has something to do with” the stock drop.
At a previously planned presentation to analysts and investors Wednesday morning, McClendon did not mention the Reuters report.
The CEO, who appeared subdued compared with his usual upbeat demeanor, was not asked about the report as he discussed the company’s drilling program and asset sales.
The news threatens to “put a cloud” over the company’s planned initial public offering of its oilfield services unit, Brean Murray analyst Ray Deacon said.
Chesapeake wants to raise up to $862.5 million from the IPO, first announced on Monday.
CUPERTINO, Calif., Tue Apr 3, 2012 – Apple Inc. shares are set to rocket to $1,001 within the next 12 months as it branches into new markets and expands its footprint in China, predicted Topeka Capital Markets analyst Brian White.
“Driven by an ever expanding portfolio of innovative products, a growing integrated digital grid, unmatched aesthetics and a brand that is able to touch the soul of consumers of all backgrounds, Apple fever is spreading like a wildfire around the world and we see no end in sight to this trend,” White wrote in an April 2 note initiating coverage of Apple.
Shares of Apple are trading up about 1.5 percent to $628.20 in early trade on Tuesday.
Many observers had once cast doubts that Apple could even hit $500 and $600 price targets. Today, the median price target on its shares stands slightly below $700, according to Thomson Reuters data.
Now Apple is the world’s most valuable company with an array of products that have shaken up the music, media and technology industries.
CUPERTINO, Calif. – Tue Mar 6: The world’s most valuable company has turned into a bit of a casino stock.
Since Apple Inc. on Feb. 29 became only the sixth company in U.S. history to top $500 billion in market capitalization, trading has become more volatile, indicating that more investors are tracking headlines and looking for quick gains.
Apple has gained 32 percent since the beginning of the year, outstripping its gains for all of 2011. It accounts for more than 4 percent of the weight of the S&P 500 index, a kind of outsized standing that has caused its moves to dictate market direction on a daily basis.
That’s a trend that is causing consternation among some players in the market. They note that other companies that had become members of the elite $500 billion club not only couldn’t sustain their standing, but weighed on the entire market as they fell.
For long-term investors, the stock of the iPad and iPod maker has been a winner, the ultimate in buying and holding. From a short-term basis, buyers have gotten much more fickle.
“Apple has become a favorite daytime trading stock for short-term traders. It’s one of the rare stocks that have momentum followers and that move on headlines that are not related to earnings,” said David Rolfe, chief investment officer at Wedgewood Partners in St. Louis, Missouri. The firm manages $1.5 billion in assets and owns Apple shares.
Intraday swings in Apple are at the most volatile levels since October last year. The swings have averaged around $12 a day for the past two weeks, compared with about $14 in October.
FINDLAY, Ohio – U.S. refiner Marathon Petroleum Corp. announced a stock repurchase of up to $2 billion and said it might spin off some assets, sending its shares up nearly 10 percent and overshadowing news of a wider-than-expected quarterly loss.
The company said on Wednesday that its board had approved a share buyback plan of up to $2 billion over two years and said it was looking at strategic alternatives for some of its midstream assets, including spinning them off into a master limited partnership.
The fourth-quarter net loss was $75 million, or 21 cents per share, compared with year-earlier net income of $230 million, or 64 cents per share.
Analysts on average expected a loss of 6 cents per share, according to Thomson Reuters I/B/E/S.
During the quarter, the price between U.S. benchmark crude oil and European Brent crude narrowed, squeezing margins. U.S. crude oil prices averaged about $92.39 per barrel.
Total revenue and other income rose 11 percent to $19.44 billion. Analysts expected $15.06 billion.
Shares of the company, which was spun off from Marathon Oil Corp. last year, were up 9.9 percent at $41.99 in trading before the market opened.
LOS ANGELES ― Apple Inc’s. newest board member, Walt Disney Co. CEO Bob Iger, bought about $1 million worth of the iPhone maker’s shares earlier this week, a symbolic gesture of confidence in the prospects of the company.
Iger, who was appointed to Apple’s board on November 15, bought 2,670 Apple shares on the open market on Tuesday at an average price of $375 each, according to a U.S. Securities and Exchange Commission filing.
Iger’s wife also owns 75 Apple shares, the filing said.
As part of being a director of Apple, the long-time Disney executive also is entitled to the standard $50,000 annual retainer and received an initial grant of 142 restricted Apple stock units that will vest in February.