Tuesday, June 20, 2017

Gold Vs Silver

To many novice traders, and investors it's assumed Gold and Silver are basically mirror opposites of each other, they just have different values per ounce.  That's not true. Hence why we have the Gold/Silver ratio which is used by commodity traders and investors around the world. I decided to take a look at the recent, and longer term performance of the two metals. Let's take a look at the widely held Gold(GLD) and Silver(SLV) ETF's through a few charts. First is the YTD chart.  We see gold has a near 5% lead over it's counterpart. 

Saturday, June 17, 2017

TLH Market Review - 6/17/17

The big news this week other than Amazon(AMZN) snapping up Whole Foods(WFM) for $13.7 billion was the Federal Reserve sticking to it's guns to raise interest rates yet again.  The move by the Fed was widely expected.  In turn equity markets were relatively muted during the event, and even the bond market saw a modest reaction.  In fact yields on 1 Month Treasury Notes actually fell after the announcement.

Thursday, June 15, 2017

The Great Sector Rotation?

We've been hearing a lot about the sector rotation going on with stocks the last week. So I decided to take a look at what's been happening recently, and not as recently. Below are the Sector SPDR ETF's and their performance from the last 10, 40, 100, and 200 days in that respective order.

Saturday, June 10, 2017

TLH Market Review 6/10/17

This week was not dull by any means. Between the now seemingly endless charade of "He said, she said, they said, I don't know who said", on Capitol Hill, the Brits that can't catch a break, and the huge rotational move in equities we witnessed Friday.  Yep that's a lot to swallow in just a few days.  The markets don't even seem concerned about next weeks Fed meeting where it's all but certain we'll see another rate hike, yet the bond markets have seen yields trend lower at the long end recently.

Wednesday, June 7, 2017

Does International Real Estate Have More Room To Run?

I was browsing various asset class performance via ETF's that I follow.  I happened to be looking at the Vanguard REIT ETF(VNQ) which focuses on the USA, and it's international counterpart Vanguard Global ex-US REIT ETF(VNQI).

I noticed there was quite a large difference in performance YTD.  Now the performance in the chart below does not include dividends, which are generally quite large for REIT's. There is also a large difference in yield between the two on a TTM basis.

Friday, June 2, 2017

Stocks No One Talks About - Rockwell Collins

Every once in awhile I like to look at companies no one really talks about, but have performed really well. This is usually where you can find some solid winners perfect for your portfolio. 
Today is Rockwell Collins(COL). The company was spun off from Rockwell International on June 29, 2001.  In a nutshell the company basically makes aviation equipment, and parts. Well more specifically communication, and electronic equipment for the aviation industry.   Shareholders have been rewarded well by this company. Since the spin-off shares have gained a total of 465% versus a 98% gain for the S&P 500. If we include dividends for the S&P 500 the gain is 172%. Considering Rockwell Collins doesn't pay a dividend that's some huge out-performance.

Visit StockCharts.com to see more great charts.

Saturday, May 27, 2017

TLH Market Review - 5/27/17

"The willingness of America's veterans to sacrifice for our country  has earned them our lasting gratitude." - Jeff Miller

Let's not forget the real reasons why Memorial Day marks the unofficial start of summer in the USA.  It takes a lot of courage, will, and fearlessness to fight for what you truly believe. That common belief runs through all of us. The belief that we are free individuals to pursue our dreams, and a life full of happiness. It doesn't matter what country you hail from.  Ultimately that's what we all want in life.  So as you sit back unwind on a long scenic road trip, and BBQ in the back yard with family and friends give a thought of gratitude to those whom gave the ultimate sacrifice so we could pursue our dreams.

This week was full of news.  We received the Fed Minutes which shined some light on the Fed's interest rate intentions, and balance sheet issues.

Friday, May 26, 2017

Is Sugar A Bad Investment? - Part Two

Earlier this week I pondered if Sugar Is A Bad Investment? I highlighted portfolio member Hershey's(HSY) along with fellow snack, and confectioners. It was noteworthy to see the overall out-performance of the group compared to the S&P 500 over 5 years.

Today we are going to take a quick look at what's most likely the sugar industries dreaded 800 pound gorilla. Beverage Manufacturers. They have been under increased public scrutiny due to  high sugar content drinks that offer no additional nutritional value.  There also seems to be a larger incorrect belief by the public that sugary drinks are more harmful than sugary snacks.

Thursday, May 25, 2017

Earnings - Universal Corp & Costco

On May 23rd after the close we received FY 2017 & Q4 results from Universal Corp(UVV).  The company reported Q4 EPS loss of $1.64 on revenues of $650 million. The loss was a result of a mandatory conversion of UVV's 6.75% convertible perpetual preferred shares into approximately 2.5 million common shares, which resulted in a one time cost at $74.4 million reducing EPS by $2.99(basic) & $2.90(diluted).  For the year the company reported EPS of $0.88 on revenues slightly down at $2.07 billion. If you add back the share conversion charge for the quarter UVV earned on a diluted basis $1.35, and for the year $3.88. Both numbers are down from $1.95 & $3.92 respectively in 2016. Shares took a 5 point hit on the news, and have been extremely choppy in 2017 after hitting a high of $83.35 in February. Here is part of managements statement:

Tuesday, May 23, 2017

Is Sugar A Bad Investment?

I've been thinking about the danger's of sugar a lot lately as I try cutting down my own consumption to shed a few extra pounds for summer. It's no secret that consuming sugary drinks, and especially sugar laden foods are bad for your overall health.

I decided to look at the performance of Tootsie Roll(TR), Mondelez(MDLZ), and portfolio member Hershey's(HSY) versus the S&P 500. 

Saturday, May 20, 2017

TLH Market Review - 5/20/17

Was that the correction we have all been waiting for?  Earlier this week the markets caught a lot of people off guard when all the major indexes dropped 1.50%, and the Russell took a whopping when at one point it was down around 2.50%.  The indexes rallied back to erase most of the losses for the week.  Time will tell if this turns out to be the start of a pullback, or just a blip on the radar screen.  I'd welcome a good 5-10% downdraft in equities.  It'd be healthy for the market to wipe out some weaker hands, and create a nice base for further gains.

YTD the majors are all still showing gains, led heavily by technology stocks, and some lagging by small caps.

S&P 500 - 6.38%
Dow Jones - 5.27%
Nasdaq - 13.01%
Russell 2000 - 0.75%

The drop was so surprising because the Volatility Index(VIX) was testing decade long lows below 10 when all of the sudden it surged 50%+.  That might sound like a huge number but the VIX ultimately only hit a high of 16.30, and it's not abnormal for the index to trade around that number historically. I don't like to think of the VIX as the best overall indicator for tops either. Personally I think it's a bit better at marking bottoms.

We received economic reports his week per usual, and the standout was Industrial Production which rose 1.0%. That's a good number since more manufacturing works its way throughout the economy very well.  Remember about 3 weeks ago I pointed out the decades long time decline in Industrial Capacity Utilization

The Atlanta Fed's GDP Now is predicting a 4.1% increase for Q2. But the New York Fed is only predicting a 2.3% increase for Q2. Why the difference? It comes down to the way each model is calculated.  Either way both reports have cited IP as a reason to boost forecasts this week. 


It was a quiet week on the news front.  No holdings had earnings this week as earnings season wraps up. The portfolio was however a bit choppy due to the overall market.

Global Payments(GPN), PayPal(PYPL), and Visa(V) all hit a 52-week high to start the week. Global Payments now trades with a $90 handle, and Paypal just edged above the psychologically important $50 level for the first time. Needless to say I'm expecting big things from this group. The portfolio isn't shy about focusing on certain sectors such as financial payments, and tobacco.  It means the portfolio can lag the market at times due to it's concentration, but when these sectors are out-performing like they should it translates to much better gains. 

Wednesday, May 17, 2017

Similar Strategies But Vastly Different Outcomes

One thing I like to do is compare the performance of certain groups of stocks, asset classes, or strategies.  Today I'm going to take a look at what appears to be a similar investing strategy, and how it can affect your results with just a few charts.

Many investors are fans of buying the best available stocks. For good reason as they usually carry the following traits:

Saturday, May 13, 2017

TLH Market Review - 5/13/17

Despite what seems to be a constant barrage of worries about European elections, Chinese capital flows, trade & tax reform going nowhere, and dysfunction in DC as normal the markets keep chugging along to new highs just about everyday.

Wednesday, May 10, 2017

Wabtec Increases Quarterly Dividend 20%

There's nothing like waking up on a Wednesday morning to find out you received a 20% pay raise for doing little more than holding some stock in a great company.  Today Wabtec(WAB) announced a 20% hike in their dividend to a quarterly rate of $0.12 from $0.10.  That comes out to a current dividend yield of around 0.58%. For their fiscal year Wabtec is projected to payout $0.46/share in dividends.   That's not a huge yield compared to some other holdings like Altria(MO) which sports a 3.6% yield.

Still WAB has raised it's dividend for 7 years in a row now, and sports a 10 year dividend growth rate of 36%.

Tuesday, May 9, 2017

Earnings - Vector Group, Cognizant Technology

Life got a bit in the way last week but here is a quick earnings recap for Vector Group(VGR), and Cognizant Technology Solutions(CTSH).

Vector Group(VGR) reported Q1 results with EPS of $-0.03 on revenues of $415 million. The loss is mainly due to extinguishing older 7.75% senior secured notes due 2021 with new notes of $850 million principal at 6.125% due 2025.  The company reported strong growth in their tobacco brands as consumers look for discounted options with a 6.2% YoY increase in retail shipments. The stock took a dive after earnings, but that's short term noise. The company is still well positioned within the real estate markets it transacts, and maybe it's looking like the other major tobacco companies have come close to their max price points in a lot of markets judging by the VGR's surge in discount brand sales. That's not exactly a great thought considering the portfolio is heavy in tobacco, but I think this is a short-term industry issue.