Big dividends from a small retailer

October 31, 2006

This being Halloween, it seems appropriate to ask, who’s afraid of big, bad Wal-Mart? If you were thinking women’s apparel retailer Cato Corp. (CTR), think again. This microcap has consistently stood its ground.

Another look at Wrigley

October 30, 2006

It hasn’t been an easy year for Wm. Wrigley Jr. Co. (WWY), given difficulties integrating the June 2005 Life Savers/Altoids acquisition and increased aggressiveness of confectionary rival Cadbury Schweppes Plc (CBRY.L). Both issues appear to have helped take a toll on what had been traditionally high returns on capital. Table A shows how in this area, Wrigley slowed more than an already-lackluster industry.

Weak GDP prompts look at selected income stocks

October 27, 2006

Thanks in good measure to the housing slump, the economy’s decelerated. That in turn, has lifted hopes in some quarters that the Federal Reserve will reduce interest rates down the road or at least, will be hesitant to raise them. Either scenario, but especially the first, could provide a nice boost to income stocks.

Madonna stirs the pot anew

October 27, 2006

madonna1.jpgThe queen of controversy has done it again.

Earlier this month pop superstar Madonna, following a lead of other Hollywood stars, sought to adopt a young boy from a poor African country. Since then a battle has raged about the legality of the move, the morality of it, the motive behind the adoption of the tot from Malawi and whether the father of the boy understood the adoption process. Madonna this week went on “The Oprah Winfrey Show” to talk about the decision. The entertainer said on the show that she worries that the furor will discourage adoptions.

Ten new ideas

October 27, 2006

The number of stocks that are new to Reuters Select is larger than usual at 252,  twice as many as we typically see added to our 19 stocks screens. Whatever one may want to say about earnings season in general, it seems that core fundamentals and market sentiment, the main factors that drive our screens, seem to be on the rise, at least for now.

Thank goodness it’s insurance

October 26, 2006

It’s a good thing Aetna Inc. (AET) doesn’t sell women’s apparel.

Its shares are flying high, up nearly 7 percent as of this writing, in response to a strong third-quarter profit. Commercial medical cost containment improved sharply with previously-seen upticks now being characterized by CEO Ron Williams as “an aberration rather than an enduring trend.” J. Paul Newsome of A.G. Edwards, reiterated his “Buy for Aggressive Investors” rating in a report headlined “Finally, Aetna shows its skills: MCR (medical cost ratio) improves to 78.8% vs. prior year 79%.”

Boeing’s unpopular R&D

October 25, 2006

When one of two companies in what is essentially a duopoly is in crisis, you’d think Wall Street would look kindly upon the healthy one. But the uneven performance of Boeing Co. (BA) stock this year, despite the problems at rival Airbus, a division of European Aeronautic Defense and Space Company NV (EAD.PA), says otherwise. 

Getting Paid From the Grave

October 25, 2006

Albert Einstein StampWant to leave a bundle to your family, not to mention your attorneys? Here’s the key: Become very smart or talented or both; write, record or think up an idea and make lots of money off it. Don’t forget to have your picture taken. And be sure to die.

Connecting the auto dots

October 24, 2006

It looks like connecting the dots is not part of the Wall Street skill set.

Yesterday, Ford Motor Co. (F) reported a horrible quarter that clarifies a situation that Argus Research analyst Kevin Tynan described as going beyond a need for shrinkage. He said, “Ford needs to become a company flexible enough to be profitable at lower production volumes on each line (and) on each platform.” Translation: It needs to really transform its manufacturing process.

IBM sues Amazon; Wall Street snores

October 24, 2006

Politicians seem to care deeply about China’s respect for intellectual property, and media giants remain antsy about upstart web sites. Interestingly, though, when a big-name U.S. corporation is formally accused of basing a substantial portion of its business model on patent infringement, nobody, at least nobody on Wall Street, seems to care.