iBankCoin
Joined Mar 30, 2016
40 Blog Posts

Game On GEO!!

8-18-16

Game On! Although I’m watching the Bears and Patriots pre game, that is not exactly what is on my mind.  I got hit pretty damn hard today by the Justice Department’s announcement of plans to phase out the use of privately-run prison facilities.  Namely, I was holding $GEO.  Having purchased some shares of $GEO back on 8-2-2016, I’m guessing things were already in the works for this decision by the Justice Department.  I am sharing this information for those who may be able to benefit from it.

This statement was released 8-18-16:

EQUITY ALERT: Rosen Law Firm Announces Investigation of Securities Claims Against The GEO Group, Inc. – GEO

1 hour 12 minutes ago – DJNF

NEW YORK–(BUSINESS WIRE)–August 18, 2016–

Rosen Law Firm, a global investor rights law firm, announces it is investigating potential securities claims on behalf of shareholders of The GEO Group, Inc. (NYSE:GEO) resulting from allegations that GEO Group may have issued materially misleading business information to the investing public.

On August 18, 2016, the Justice Department announced its plans to end its use of private prisons after officials concluded that such facilities are both less safe and less effective at providing correctional services than those run by the government. The contract prisons are operated by three private corporations, including GEO Group. On this news, shares of GEO Group fell $12.78 per share or over 39% to close at $19.51 per share on August 18, 2016.

Rosen Law Firm is preparing a class action lawsuit to recover losses suffered by GEO Group investors. If you purchased shares of GEO Group on or before August 17, 2016, please visit the firm’s website at http://www.rosenlegal.com/cases-942.html for more information or to join the proposed class action. You may also contact Phillip Kim or Kevin Chan of Rosen Law Firm toll free at 866-767-3653 or via email at [email protected] or [email protected].

Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Follow us on Twitter: @rosen_firm

Attorney Advertising. Prior results do not guarantee a similar outcome.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160818006328/en/

CONTACT: The Rosen Law Firm, P.A. Laurence Rosen, Esq. , Phillip Kim, Esq. , Kevin Chan, Esq,.

275 Madison Avenue, 34(th) Floor, New York, NY 10016, Tel: (212) 686-1060, Toll Free: (866) 767-3653,  Fax: (212) 202-3827, [email protected][email protected], [email protected], www.rosenlegal.com,  www.linkedin.com/company/the-rosen-law-firm.  SOURCE: Rosen Law Firm

Copyright Business Wire 2016

(END) Dow Jones Newswires

August 18, 2016 19:01 ET (23:01 GMT)

P.S.  Go Bears!

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U.S. Consumer Spending Rose 0.4%, Personal Income Fell 0.1% in June

Looks like consumers are tapping into their savings. The 0.4 percent rise in spending was similar to the increase last month.  The medium forecast by Bloomberg called for a 0.3 percent gain.  Consumer spending accounts for 70 percent of the economy.

Incomes rose only 0.2 percent; the expected income was 0.3 percent.

The savings rate for June declined to 5.3 percent from 5.5 percent; the lowest numbers since March 2015.

“The Federal Reserve’s preferred measure of inflation remained contained. The price gauge based on the personal consumption expenditures index increased 0.1 percent from the prior month and was up 0.9 percent from a year earlier.” “The core price measure, which excludes food and fuel, increased 0.1 percent from May and was up 1.6 percent from June 2015.  Inflation has not reached the Fed’s 2 percent goal since 2012” (Bloomberg report)

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Transportation Is the Big Winner

7-27-16

The durable goods orders for the factory sector proved weak for the second straight month in June, down 4.0 percent. Core readings are also lower for the second month, down 0.5 percent, with core capital goods (nondefense ex-aircraft) a bit higher, but only by 0.2 percent.  This follows two straight prior declines of 0.5 and 0.9 percent.

The transportation group reported 2.6 percent gain for vehicles. Alas, nearly all other sectors posted declines.  Computers are down 9.1 percent in June, communications equipment is down 2.3 percent, and primary metals are down 1.3 percent.

Total orders are down 6.4 percent. Ex-transportation orders are down year-on-year 3.6 percent with core capital goods down 3.7 percent, the 17th decline in 18 months.  Shipments of capital goods fell 0.4 percent in June.  This is a second straight decrease and does not bode well for the second-quarter GDP report coming out on Friday.

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Preparing For the Worse, Hoping For the Best

7-25-16

It started when the kids were babies. It was my fear that we would get stranded in the car by a surprise snow storm on some back road unable to get to a safe shelter.  That was when I started to pack emergency supplies in the car.  Back then, the supplies included extra formula, diapers, water, blankets, and baby food for the kids; and chocolates for me.  Over the years, I started adding some essentials such as a flashlight with extra batteries and a standard first-aid kit.

As the world and events evolve, so too has my emergency bag. Some call it a “bug-out” bag; however you refer to it, think of it as your 72 hour preparation bag for events out of your control.

Depending on your region, some of those events might be natural disasters such as a tornado, earthquake, hurricanes, or floods.

In my region, we have a number of nuclear power plants. There is always the fear of a release of radiation and evacuations ordered.

This article is meant to get you thinking about preparing your own emergency bags if you have not already down so. I keep one in all our vehicles.  If you commute, think about keeping one in your work area.

Items in our bags include small bills, bottled water, high calorie food bars, first-aid supplies, a first-aid manual, potassium iodide pills, a poncho, an emergency blanket, compass, a whistle, knives, matches, fire starters, water purifier, empty water container, flashlights and extra batteries, glow sticks, portable radio and extra batteries, a multi-tool, work gloves, large trash bags, parachute cord, paper and pencil/pen, power cords for the cell phones, back-up cell phone battery, mini cook stove with fuel, metal cup, plastic ware, small towel, a camp trowel/shovel/axe, a wool sweater, wool socks, and individual package cleaning wipes, small toiletries, some tissue, and a deck of cards.

Your emergency bag might also include special things for small children, an elderly person, and your pet’s needs.

In addition to the above items, we packed a month supply of our daily medications.

In your emergency bag, include your birth certificate, passports, insurance policies, bank account information, medical records, titles to the vehicles, deed to the house, a list of important phone numbers, a list of important websites and passwords. Some of these items, I made copies of and keep the originals in a safe place at home.  Make sure the papers you pack in the bag are kept in a waterproof container.

Consider such a bag for each member of your family. I have my grandchildren put at least some water, a snack, and a flashlight in their school bags.

An emergency bag is one of those things that you pack and hope to never use it. Each new season, I go through the bags and make sure nothing is leaking, check the dates on the batteries, change the water bottles, change the medications, check the dates on the food bars, and in the winter I add new hand warmers.

I hope you make your emergency bags and I also hope that you never have to use them.

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Innocence, Backpacks, and Who Knew $VFC Has So Many Subsidiaries!

7-18-2016

“Grandma, I’ll always like Spiderman, even when I’m all grown-up, he’ll still be my favorite.” Our youngest Grandson, Evan, stated as he was picking out a new backpack for his 2nd Grade school year.  He informed me that his 1st Grade backpack was for a 1st Grader, not someone as grown up as he going into 2nd.

With all the craziness going on in the world, his innocence is refreshing and huggable.

If you are investing in a new school backpack, which one offers the best value for the price? Why a JanSport of course!

JanSport, Inc. designs, manufactures, and sells packs and outdoor gears. It offers backpacks, laptop/tablet bags, professional bags, messenger bags, outside bags, totes, rolling bags, and waist packs; outdoor bags that include daypacks, multi-day packs, and outdoor travel bags; digital accessories that include iPhone accessories, iPad/tablet accessories, and laptop sleeves; and travel bags that include carry-on luggage, checked luggage, and duffels. The company also provides collegiate apparel. Its products are available online; and through a network of retailers in Brazil, Canada, Chile, Hong Kong, India, the Philippines, Saudi Arabia, Taiwan, the United Arab Emirates, and the United States.  JanSport, Inc. was founded in 1967 and is based in Alameda, CA.  (I apologize for sounding like a commercial!)

JanSport offers the following company policy for packs, bags, and luggage: JanSport engineers quality, durability, and reliable products. So, if your pack ever breaks down, simply return it to our warranty center. We’ll fix it or if we can’t, we’ll replace it or refund it. We stand by our packs for a lifetime and since we’ve been making packs since 1967, that’s a guarantee you can stand by.

I love this policy! If I invest $35 on a JanSport backpack for each one of our nine Grandkids, technically, they can use the same backpack throughout their years in school.

JansSport is a subsidiary of VF Corporation, $VFC.

VF Corporation is an American worldwide apparel and footwear company founded in 1899 and headquartered in Greensboro, North Carolina. VFC designs, manufactures, markets, and distributes branded lifestyle apparel, footwear and accessories.

Other subsidiaries of $VFC include the brands: LEE, Wrangler, Rustler, Jantzen, Redkap, Bulwark, The North Face, Eastpak, Nautica, Vans, Kipling, napapiijri, Reef, Majestic, lucy, Eagles Creak, and Timberland.

On June 30, 2016, $VFC signed a definitive agreement to sell it’s 7 For All Mankind, Ella Moss, and Splendid subsidiaries to Delta Galil Industries, Ltd. The selling price is $120M, subject to various working capital adjustments.

Today, $VFC Market Cap is $26.69B with a volume of 1,741,110. It Yields 2.31 with a DIV rate of 1.48, and EPS (TTM) of 2.79 and a PE Ratio of 22.90 and a stock price of 64.01.

Now if I could just find tennis shoes, and coats with at least a one year warranty, I would be feeling pretty lucky with the rest of the school year.

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Kinder Morgan Endeavors to Reduce Its Debt

$KMI Kinder Morgan Inc. ($19.28), is planning to sell 50% of its stake in the Southern Natural Gas pipeline to $SO Southern Company ($53.76). The price of the sale is $1.47 billion.

Kinder Morgan is a company headquartered in downtown Houston, Texas. It is the largest energy infrastructure company in North America.

Steve Kean, CEO of Kinder Morgan, said in a press release the company will use proceeds from the transaction to pay down debt.

“The transaction significantly advances our effort to strengthen our balance sheet and move us closer to returning value to shareholders in the form of an increased dividend or stock repurchases”, Kinder Morgan Chief Executive Steve Kean said in a statement.

The two companies will share the systems expansion cost, which is a major factor for Kinder Morgan, as well as try to work together on additional projects expanding the pipeline system.

Southern Company is an American electric utility holding company based in the southern United States. It is headquartered in Atlanta, Georgia, with executive offices also located in Birmingham, Alabama

The transaction is subject to the notification and clearance and reporting requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The companies expect to complete the transaction in the third quarter or early in the fourth quarter of 2016.

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Personal Income and Consumer Spending in May 2016

Personal income increased 0.2% in May after increasing 0.5% in April. Current disposable personal income (DPI) also increased 0.2% in May from 0.5% in April.  The real DPI, income adjusted for taxes and inflation, increased 0.1% in May after increasing 0.2% in April.

Real consumer spending (PCE) increased 0.3% in May after increasing 0.8% in April. Spending on durable goods only increased 0.6% in May compared to 2.6% in April.

Remember the GDP was adjusted three times for the first quarter of 2016 to an annual rate of 1.1%, compared to the fourth quarter of 2015 of 1.4%. (Bureau of Economic Analysis BEA)

Now that we have a picture of income and spending, here are the numbers for household debt in the first quarter of 2016:

Aggregate household debt balances increased in the first quarter of 2016. As of March 31, 2016, total household indebtedness was $12.25 trillion, a $136 billion (1.1%) increase from the fourth quarter of 2015. Overall household debt remains 3.3% below its 2008Q3 peak of $12.68 trillion.

Mortgage balances, the largest component of household debt, increased in the fourth quarter. Mortgage balances shown on consumer credit reports stood at $8.37 trillion, a $120 billion increase from the fourth quarter of 2015. Balances on home equity lines of credit (HELOC) dropped by $2 billion, to $485 billion.   (Federal Reserve Bank of New York

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Beware the student and auto loans.

Outstanding student loan balances increased by $29 billion, to $1.26 trillion as of March 31, 2016. 11% of aggregate student loan debt was 90+ days delinquent in the first quarter of 2016, in the last quarter of 2015, the rate was 11.5%.

Auto loans reached a balance of $1.07 trillion the first quarter of 2016. This is a $7 billion dollar increase from the last quarter. Note 3.5% of the loan balances are 90 or more days delinquent.

Credit card balances for the first quarter of 2016 declined by $21 billion, to $712 billion.

Last but not least, personal savings as a percent of DPI decreased to 5.3% in May compared to 5.4% in April. March personal savings rate was 6.0%.  Notice a pattern?

Sources: Bureau of Economic Analysis (BEA), Federal Reserve Bank of New York, U.S. Census Bureau

 

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Balance of Trade

Do you ever wonder why it is difficult to find something made in the USA when shopping? Goods and services deficit increased to-41.1 billion in May compared to April’s deficit of -37.4 billion.  If a country exports a greater value than it imports, it is called a trade surplus, or a “favorable balance.” If a country imports a greater value than it exports, it is called a trade deficit, or “unfavorable balance”, or a “trade gap”.

Balance of trade (BOT) is the difference between a country’s imports and its exports. Balance of trade is the largest component of a country’s balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad.  (Investopedia)

The U.S. Bureau of Economic Analysis (BEA) uses the data to update U.S. balance of payments, gross domestic product, and national accounts. Other federal agencies use them for economic, financial, and trade policy analysis (such as export promotion studies and export price indexes). Private businesses and trade associations use them for domestic and overseas market analysis, and industry-, product-, and area-based business planning. Major print and electronic news media use them for general and business news reports.

  • Exports decreased to $182.4 billion in May from $182.7 billion in April. Goods were $119.8 billion in May, down from $120.0 billion in April. Services were $62.5 billion in May, down from $62.6 billion in April.
  • Imports increased to $223.5 billion in May from $220.1 billion in April. Goods were $182.1 billion in May, up from $178.6 billion in April. Services were $41.4 billion in May, up less than $0.1 billion from April. The increase in imports of goods mainly reflected increases in industrial supplies and materials ($2.3 billion) and in consumer goods ($1.3 billion).
  • For goods, the deficit was $62.2 billion in May, up from $58.6 billion in April. For services, the surplus was $21.1 billion in May, down from $21.2 billion in April. (United States Census Bureau)

Total May exports of $182.4 billion and imports of $223.5 billion resulted in a goods and services deficit of $41.1 billion.

GandS

The goods deficit with China increased from $24.3 billion in April to $29.0 billion in May. Exports decreased $0.1 billion (primarily other industrial machines and civilian aircraft) to $8.5 billion, while imports increased $4.6 billion (primarily cell phones, computers, and computer accessories) to $37.5 billion.

The balance with the United Kingdom shifted from a surplus of $0.7 billion to a deficit of $0.3 billion in May. Exports decreased $1.2 billion to $4.0 billion and imports decreased $0.2 billion to $4.3 billion.

The deficit with South Korea decreased $1.1 billion to $2.0 billion in May. Exports increased $0.7 billion to $3.7 billion and imports decreased $0.3 billion to $5.6 billion.

The goods deficit with the European Union increased from $11.9 billion in April to $13.4 billion in May. Exports decreased $1.0 billion (primarily civilian aircraft and nonmonetary gold) to $22.2 billion, while imports increased $0.5 billion (primarily passenger cars) to $35.5 billion.

The goods deficit with Mexico increased from $5.7 billion in April to $5.8 billion in May. Exports decreased $0.3 billion to $19.0 billion (primarily computer accessories and passenger cars), while imports decreased $0.3 billion (primarily computers and automotive parts and accessories) to $24.8 billion.

Sources: Investopedia, Wikipedia, U.S Bureau of Economic Analysis (BEA), U.S. Census Bureau

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Utilities as a Safe Haven

Why utilities are considered a safe haven in a changeable market? Utilities are a diverse group of companies which generate power and water as well as providing natural gas for residential, commercial and industrial building.  The utility sector shows a strong parallel to the U.S. bond market in flight to safe assets.

In the past 6 months the median return for diversified utilities is 26.78%, electric utilities 23.59%, foreign utilities 47.40%, gas utilities 28.62%, nuclear utilities -13.43%, and water utilities 26.81%.

Consider the SPDR Utility Select Sector ETF $XLU. The sector holds 99.84% in domestic utilities. The index includes companies from the following industries: electric utilities; multi-utilities; independent power producers & energy traders; and gas utilities. The fund is non-diversified. Its top 10 holdings are $NEE, $DUK, $SO, $D, $AEP, $EXC, $PCG, $PPL, $SRE, $EIX.  $XLU performance YTD is 24.08% with a market cap of 2.9 billion.  It has a current DIV yield of 3.27%.

The Vanguard Utilities ETF $VPU has 79 holdings. The fund employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index (IMI)/Utilities 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the utilities sector, as classified under the Global Industry Classification Standard (GICS). The fund is non-diversified.  $VPU holds 100% in domestic utilities.  The top 10 holdings are $NEE, $DUK, $SO, $D, $AEP, $EXC, $PCG, $SRE, $EIX. The performance YTD for $VPU is 24.27% with a market cap of 519.05 million and a DIV yield of 3.09%.

One of the biggest attractions of utilities is the dividends. As people chase yields they will look for companies that can increase dividends.

Another defensive play on utilities is their immunity to the rising U.S. dollar. When a company’s assets are in the U.S. and they have all U.S.-paying customers, the strengthening dollar presents less uncertainty in the investment.

Disclaimer, I am long $XLU.

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With Gold in Your Pockets, Here Are the Market Breadth Numbers for 6-24-16

As I went to post this article, I noticed RaginCajun and I must have been thinking along the same lines. His post, “Weekly Look at the US Stock Market” is both timely and informative.  His graphs give a good picture of the strongest industries week over week.

On June 24, 2016, the market breadth flagged 13.36% of stocks were up and 86.64% of stocks were down at the end of the day.

We all know gold and silver were on most watch lists. The silver industry flagged a 100% breadth yesterday up 4.5% and the gold industry flagged a 95% breadth up 5.40%.

Assuming we cannot survive on gold and silver (yes, Midas tried, but he went hungry), I took a look at consumer non-cyclical industries to see how they fared in the choppy seas of red.

One of my first surprises was the auto parts stores. The market breadth for this industry flagged a whopping 80%. This actually makes sense when you think about the rough start we had this year in the economy.  To save you some time, here is a list of some of the auto parts stores:

$AAP Advance Auto

$AZO Auto Zone

$MNRO Monroe Muffler

$ORLY O’Reilly Auto

$PBY Pep Boys

One industry that I did expect to see was water. The water utilities industry breadth flagged 70%.  Even if you are on Dr. Fly’s Ark, you will still need water to drink and maybe wash under the armpits if you please.  If you are looking for a water company instead of an ETF, check these out:

$AWK American Water Works up 2.18%

$CTWS Connecticut Water up 0.51%

$CWT California Water up 2.08%

$WTR Aqua America Inc. up 1.01%

$MSEX Middlesex Water up 0.33% (As a disclaimer, I have stock in this company. You might be thinking why not AWK or CWT? It was a toss-up between going east or going west, I chose east, but will probably add CWT down the road.)

The diversified utilities industry flagged a market breadth of 68%. My XLU helped keep me above water for part of the day as it was up .83%.

The electric utilities industry flagged a market breadth of 55%. There were a handful of gas related stocks that were up, but not enough to flag the whole industry.

Reit healthcare market breadth was 64%. Let’s face it; we baby boomers have a few issues with obesity, high blood pressure, sugar diabetes, and the beginnings of Alzheimer.  We cannot go without our meds and doctor visits.

Surprisingly, I did not see the food industry performing well. My guess is we’re all eating mac and cheese and ramen noodles from our stocked pantries.

In my opinion it does not hurt to be prepared for the down times whether it be stocking the pantry or having an emergency fund, (actually both are a good idea). When times become tough, top priorities will be food, gas, medical care, and utilities.  Silver and gold are a good hedge and Dr. Fly led us on the right path going into these last few weeks, which helped soften the blow if you were still holding long.

Just breathe.

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