Monthly Archives: November 2012
YUM is a quick service restaurant company based on a number of system units, which include 38,000 units in more than 120 countries. YUM generates revenue through company-owned restaurants, franchise fees and licensing agreements. YUM’s brands include KFC (17,400 units), Pizza Hut (12,100 units), and Taco Bell (5,500 units). With these brands’ sizeable international appeal and the company’s rare economic moats in the restaurant industry, YUM should be able to extend its leadership in emerging markets, including China, and continue to generate positive economic return in the long-term.
Softer Sales In China
The company added 800 new sites in China during the year while YUM has focused much of its attention in this country. However, in the short-term, YUM is suffering from the softer sales in China. The Company expects a decline in Q4 sales at established restaurants in China, where a cooling economy is making it difficult to exceed the 21 percent gain it had there a year earlier.
Read More HERE
By Alan Brochstein, CFA:
Preformed Line Products (PLPC), based in Mayfield Village (Cleveland), Ohio, with global operations manufacturing “high quality cable anchoring and control hardware and systems, fiber optic and copper splice closures, and high-speed cross-connect devices” for the telecommunications, broadband and cable television, power utility and other markets, is a growth company with a stock with deep value characteristics. Many value stocks are misunderstood, but this seemingly simple company is just unknown. Not only is there no Wall Street coverage despite years of consistent success and a market cap of $285mm, but management, while quite capable and particularly well-aligned economically with outside shareholders, doesn’t seem to care about the stock: No conference calls and no investor presentations. While there is no clear catalyst for value-recognition, PLPC offers a compelling entry for patient investors who are constructive on emerging markets growth.
PLPC began operations in 1947 when engineer Tom Peterson
INTC opened lower, hitting intra-day low of $19.46, and closed with 2.79% loss. The volume of 64.89M is 14.59% more than the 30 day average of 56.63M. The MACD (12, 26, 9) reversed and showed a bearish sign today. RSI (14) decreased to 34.03 from 40.24 with increasing selling momentum. INTC currently trade below its 50-day and 200-day MV of $21.41 and $24.85.
AAPL opened higher and closed higher with 1.10% gain. The volume of 18.35M is 17.2% less than the 30 day average of 22.16M. The MACD (12, 26, 9) continued to show a bullish sign and MACD difference did not change today (3 days in a roll without change already). RSI (14) increased to 53.53 from 51.10, indicating an increasing buying momentum. AAPL is currently trading below its 50-day MV of $613.53 and 200-day MV of $595.68, which should be the next major resistance.
SPY opened higher, hitting intra-day low of $141.38 and closed higher with 0.48% gain. The MACD (12, 26, 9) continued to show a bullish sign with increased MACD difference. SPY is currently trading above its 200-day MV of $137.73 and below its 50-day MV of $142.38. RSI(14) increased to 56.76 from 54.34 with an increasing buying momentum. The next major resistance will be $142.38, the 50-day MV.
INTC opened lower, hitting intra-day low of $19.64, and closed slightly higher with 0.80% gain. The volume of 43.19M is 23.87% less than the 30 day average of 56.73M. The MACD started to show a bullish sign today. RSI (14) continued to increase to 40.24 from 37.20 with increasing buying momentum. INTC currently trade below its 50-day and 200-day MV of $21.48 and $24.89.
AAPL opened lower, hitting intra-day of $572.26, and closed slightly lower with 0.31% loss . The volume of 18.60M is 15.8% less than the 30 day average of 22.09M. The MACD (12, 26, 9) continued to show a bullish sign and MACD difference did not change today. RSI (14) decreased to 51.10 from 51.82, indicating a decreased buying momentum. AAPL is currently trading below its 50-day MV of $615.67 and 200-day MV of $595.23, which should be the next major resistance.
SPY opened lower, hitting intra-day low of $139 and closed higher with 0.78% gain. The MACD (12, 26, 9) continued to show a bullish sign with increased MACD difference. SPY is currently trading above its 200-day MV of $137.69 and below its 50-day MV of $142.46. RSI(14) increased to 54.34 with increasing buying momentum. The next major resistance will be $142.46, the 50-day MV.
Zynga Inc. (ZNGA) no longer has the preferential treatment on Facebook Inc. (FB), the world’s No. 1 online social network. “ZNGA and FB loosened terms of longstanding alliance, giving themselves greater leeway to pursue social gaming independently and heightening concern that the companies will one day be rivals,” as reported from Bloomberg. This surprising announcement immediately raised a few serious concerns for ZNGA investors as the share price dropped 12.60% after hours.
The latest agreement is seen as a move by Facebook to level the playing field between Zynga and other game makers, which Facebook is trying to attract. On the positive side, Zynga will gain more flexibility to offer games on its own website and has the option not to use Facebook’s payments mechanism to collect revenue or display Facebook’s ads. In the long-term, these could give Zynga more freedom to build its platform with more controls. However, numerous challenges needed to be addressed in the short-term. Below is a list of risks and opportunities for this partnership change.
Read more HERE.
PepsiCo, Inc. (PEP) is a global food and beverage company that manufactures, markets, and sells a variety of salty, convenient, sweet, and grained-based snacks, as well as carbonated and non-carbonated beverages. Its portfolio of brands includes Pepsi, Mountain Dew, Gatorade, Tropicana, Lay’s, Doritos, and Quaker. With its economies of scale, efficient distribution network, and dominance in the snack category, PEP has built a wide economic moat. PEP’s strong returns on invested capital should be maintained with its direct-store delivery system, allowing the company to leverage its portfolio of brands. PEP will be a safe play during economic uncertainty, with its strong cash flow and consumer-defensive nature in the beverages industry.
Read more HERE.
Green Mountain Coffee Roasters, Inc. (GMCR) engages in two operations: the specialty coffee and coffee maker business. On Nov. 17, 2012, my coverage on GMCR was initiated and published with a review of credit put spread. The spread consists of shorting 1x Jan, 2013 put at the strike price of $20 for the credit of $2.43 and buying 1x Jan, 2013 put at the strike price of $17.5 for the cost of $1.53. If this spread is still opened, it is suggested to close the spread and take the profit with 53.12% return. A follow-up on GMCR and a new options play will be reviewed below.
Reader more HERE.
Enterprise Products Partners L.P. (EPD) owns and operates natural gas liquids (NGSs) related businesses of Enterprise Products Company (EPCO). EPD is a Houston-based master limited partnership that transports and processes energy commodities, primarily natural gas liquids and refined products. As a partnership, EPD pays no corporate income tax; thus the tax burden is transferred to individual stockholders. With EPD’s merger with TEPPCO Partners in 2009 and consolidation with its general partner in 2010, EPD has the asset base, liquidity position, and ability to undertake transformative projects to generate strong cash flow growth despite turbulent markets. Investors should take a look at EPD for a strong mix of income and growth.
Read more HERE.
SYSCO Corporation (SYY) is the largest North American food service distributor, controlling 17.5% of the estimated $225 billion market. The Company provides products and related services to approximately 400,000 customers, including restaurants, healthcare and educational facilities, lodging establishment and other foodservice customers. Almost 100% of the Company’s sales are derived from North America. Although food distribution is a low-margin and capital-intensive business, economies of scale and strong customer relationships have allowed SYSCO to post returns on invested capital that have consistently exceeded the estimate of its cost of capital. SYSCO enjoys a wide economic moat through its expansive distribution network and extensive product offering. SYY will be a solid cash flow investment to hold through any economic condition as SYY is less sensitive to the economic cycle due to its defensive nature in the consumer food sector.
Read more HERE.
Nearing the halfway mark in today’s session, here are the individual equity names with the most call and put buying on optionMONSTER’s ActionTracker data system.