August 8, 2012
Earnings season is well under way and the majority of our companies have all ready reported. It has been a tough quarter for most of our companies with many of them just barely meeting the analyst’s expectations. The majority, have not been able to meet their revenue numbers and are guiding shareholders to look for lower numbers later in the year.
Read Full Article: CAIM in the News
July 17, 2012
From a peak in early April the S&P 500 fell almost 10% by early June but has rebounded in recent weeks. Stocks have moved modestly lower this quarter and U.S. equities are now attractively valued following their April/May declines. For the 2nd quarter, the Dow had a loss of 1.9% and the S&P 500 2.8%. U.S. and global economic growth remains sluggish with multiple fluctuating factors making it difficult for the market to sustain a trend. Here are four crucial areas currently affecting the market.
Read Full Article Here: Market Update 2nd Quarter 2012
June 8, 2012
When it comes to the pros and cons of when to take your Social Security benefits there’s an ongoing debate. Is it better to start withdrawing at 62, or wait until you reach 70? How much difference will it make monetarily?
According to Jennie L. Phipps in: “7 Secrets You Won’t Learn from Social Security,”everyone is pretty much on their own when it comes to making this very important decision, because the Social Security Administration is certainly not going to advise you.
Read Full Article Here: The Social Security Question
May 22, 2012
In a difficult investment environment, it is comforting to know that there are ways to get paid while you wait. While most investors would still rather be in bonds, their purchasing power is being eroded. The US government is paying investors little to nothing for taking on that risk.
In contrast the following three companies offer attractive yields compared to the 5-year Treasury, which currently yields .73% and in most cases the 10-year Treasury yielding 1.77%.
Read Full Article Here: Dividend Champs 2nd Quarter 2012
August 12, 2010
Despite the dismal market this week, two of our companies announced dividend increases.
AFLAC (AFL) initiated a 7% hike increasing their dividend to $.30 a share. The stock now has a current yield of 2.4%. The company has also made a commitment to buy back stock. They may buy back as much as 3 million shares by the end of 2010 and plan to purchase 6 million shares in 2011.
Illinois Tool Works (ITW) announced a 105 dividend increase to$.34 per share. The stock has $2.55 in free cash flow per share and a current dividend yield of 3%.
August 6, 2010
Good news for International Business Machine (IBM), bad news for investors. On August 2nd, IBM sold $1.5 billion of 3 year debt at a 1% interest rate. This rate is a mere .3% higher than government debt with a 3 year maturity and 50% less than the dividend yield on the common stock.
The Wall Street Journal had a great article talking about IBM’s remarkable track record of being able to issue low rates on bonds right before the Federal Reserve raises rates (link to article: http://blogs.wsj.com/marketbeat/2010/08/05/is-big-blue-flashing-a-bond-warning/?mod=wsjcrmain).
Pretty smart for IBM. If they used the proceeds to buy back their own stock, they are borrowing at 1% to get 2% on their dividend so even if the stock went nowhere they are still ahead of the game. If their track record holds true, this is bad news for bond holders. Higher rates will mean losses for bond investors.
Our advice? Buy the stock with a 2% dividend yield and put it away for the next 5 years.
July 21, 2010
This is a company we want to own for the long term and are buyers on weakness in price. Stock is down based on disappointing revenue number. Overall earnings slightly beat consensus. We expect the revenue number to be mixed over this sluggish period of economic growth. We are encouraged by the following positives:
1. Dividend has increased by 18%.
2. Europe and China did not slowdown.
3. Services were down in the 2Q but expect to ramp up in 3Q.
International Business Machine 2Q 2010 Earnings
July 14, 2010
Intel’s (INTC) 2nd quarter came in at $.51, well above street estimate of $.43. Gross margins exceeded expectations at 67.2% versus 64%e. We are encouraged by management’s increase in guidance for the 3rd quarter despite the fact that inventories grew 12% quarter to quarter.
Company will benefit from the following areas:
1. Rebound in IT spending.
2. PC growth in emerging markets.
3. Increase in higher margin products.
In our opinion, this company continues to remain undervalued based on its ability to grow earnings and a superior balance sheet. Even if the stock traded at a market multiple for 2010, it would be worth $25.80 or a 22% increase from current price.
July 13, 2010
Since the beginning of the year we have been talking about having a bumpy stock market this year. Year to date, the S&P 500 is down 7.6% In the second quarter, we hit a pretty hard bump with the S&P 500 down 11.9%. The combination of health care reform, Greece (and the other PIIGS countries) and financial services reform sent people running from the stock market to the safety of treasuries. So much so, that the 10 year bond is now yielding 2.95% and the 2 year note is at .62%. Compare this to a 2.8% dividend yield on the Dow. We also had some hiccups in the weekly unemployment claims. It has always been our belief that the economic recovery would be driven by capital spending with a sluggish consumer. We still believe that to be true. Our philosophy of buying high quality large cap dividend paying stocks is even more appropriate in this environment. As long term investors we recognize that these stocks offer great value when compared to bonds and cash. The next few years we expect a slow growing economy and these stocks have the financial strength and flexibility to thrive in that environment.
CAIM LLC’s 2nd quarter performance was -9.66% versus -11.9% for the S&P 500. Year to date we are -4.16% versus -7.6% for the S&P 500. Our overall stock selection has been better than the market and we are continuing to hold a 6% average cash position.
July 1, 2010
For all of you across the country, Catherine Avery of CAIM, LLC will be featured tomorrow, July 1st, on the 5:30 pm and 7:30 pm newscasts on News 12 CT, Channel 12, 12 on the Money. Tune in to hear more about Baby Boomers and Investing!