Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
|
|
|
|
How to Profit From a Game of
Chicken |
[http://www.streetauthority.com/includes/article-top-ao.htm]Published:
July 2, 2009
China is expected to block the import of U.S. chicken,
potentially extinguishing one of the few bright spots for poultry
farmers who have been struggling with high grain costs and low chicken
prices caused by oversupply. China has imported 829 million pounds of
U.S. chicken in the past 12 months, or 10.7% of all U.S. chicken
exports, according to the Agriculture Department.
A key trade group leader said he was told by several leading Chinese
chicken importers that China wouldn't issue any more import permits for
American chicken beginning July 1.
The U.S. Poultry and Egg Export Council says China's move could cost
U.S. chicken producers $370 million in the next six months alone.
Difficult market conditions have already forced Pilgrim's Pride, the
nation's largest chicken producer, into Chapter 11 bankruptcy
protection. A heavy-handed ban on the part of the Chinese -- who are
upset with Washington over several trade issues -- would be devastating
news for Tyson Foods (NYSE: TSN), the Springdale, Arkansas-based
producer of beef, chicken, pork and prepared foods.
Chicken, which accounts for a third of Tyson's revenue, has long been an
erratic category. Net results for the segment range from a disappointing
-1.8% loss last year to a stunning +7.0% profit in 2005.
The company's 2008 results, which break down earnings by product
segment, showed chicken brought in $8.9 billion in revenue at a net loss
of $115 million -- despite higher prices and higher volume. The first
quarter of 2009 hasn't offered much hope for improvement, with a $104
million loss on $6.3 billion in sales. (The company only issues
consolidated quarterly statements.)
Not only are its chicken results inconsistent, but Tyson's shares have
been all over the map, as you can see from the chart below.
For the year, they've seen
an impressive run of nearly +50% versus a slight +2.3% rise
in the Standard & Poor's 500 Index. In the past three
months, since April, shares have swung from as low as $9.78
to as high as $13.88. This is not a stock -- and this is not
a market -- where any company is going to hold onto its
recent gains when bad news like the trade blockade hits. The
fundamentals -- that is, the earnings -- simply aren't
there, and China is one of the leading consumers of U.S.
chicken. Production was already expected to be down -3% in
2009; exports were already expected to decline -13%. Now
this.
That's not to say there aren't some things to like about
Tyson. Corn prices, which reached a high within inches of $8
a bushel last year, are now back below $4. As corn is a
major input cost for poultry, these significantly lower
prices will translate into dramatic savings for Tyson that
will go straight back to the bottom line. And though China
is no doubt an important trade partner, it's only one
market. What's more, the ban is unlikely to be permanent.
U.S. law has some restrictions on Chinese chicken (and on
low-cost Chinese tires, of all things) and now China is
retaliating. U.S. Trade Representative Ron Kirk and his
Chinese counterparts can likely work out their differences.
But the nuances of the logical and inevitable progression of
this little trade spat will be lost on the market, which is
still in somewhere between manic mode and panic mode. When
word of China's move hits the evening news, traders are
going to dump Tyson.
And that's the opportunity. Tyson is a strong buy below $10
and a steal below $9.50. At $10, you can either hold it for
the inevitable short-term bounce, say to $12, and capture a
quick +20% gain, or you can hold on for Tyson's return to
profitability as it capitalizes on dramatically lower input
costs caused by halved grain prices.
The easiest way to profit from this Chinese government
action is with a limit order specifying your bid on Tyson
shares. That might be $9.50, it might be $10.25. If your
price is accepted, you know the play: Hunker down and wait
for a new trade pact or the panic to recede. If the shares
don't hit your offer, then you live to fight another day.
[http://www.streetauthority.com/includes/editor-profiles-ao.htm]
Disclosure: Andy Obermueller does not own shares of
TSN.
|
|
Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
|
|
|
