Wednesday, October 14, 2009
INVESTING BIBLE
I just went on Amazon and found the Investing Bible used for .73 cents. Boo for me since I thought I was getting a great deal with my 40% off coupon at Borders. Oh well, it's still an informative reference source!
Friday, October 9, 2009
WHEN PICKING A STOCK...
Ask yourself these questions:
1. Does the company produce high-quality products or services? Would you want to be a customer?
2. Is the stock reasonably priced?
3. Is the stock priced competitively compared with the other companies in the same industry?
4. What are the company's future earning prospects?
5. Has the company's earnings continued to improve?
6. What do the important financial ratios say about the corporations prospects?
7. Does the company have a clean balance sheet?
8. Does the corporation's cash flow statement set off any warning bells?
9. Are there any time bombs ready to go off such as extensive lawsuits, expiring patents, or aggressive competitors?
10. Does a company have patents, government regulations or other barriers to keep rivals or potential competitors at bay?
11. What percentage of the company is owned by insiders? What kind of insider trading activity has occurred in recent months?
12. What percentage of stock is owned by institutional investors?
1. Does the company produce high-quality products or services? Would you want to be a customer?
2. Is the stock reasonably priced?
3. Is the stock priced competitively compared with the other companies in the same industry?
4. What are the company's future earning prospects?
5. Has the company's earnings continued to improve?
6. What do the important financial ratios say about the corporations prospects?
7. Does the company have a clean balance sheet?
8. Does the corporation's cash flow statement set off any warning bells?
9. Are there any time bombs ready to go off such as extensive lawsuits, expiring patents, or aggressive competitors?
10. Does a company have patents, government regulations or other barriers to keep rivals or potential competitors at bay?
11. What percentage of the company is owned by insiders? What kind of insider trading activity has occurred in recent months?
12. What percentage of stock is owned by institutional investors?
Friday, September 11, 2009
P/E RATIO does not stand for Pretty/Entertaining...
But alas, the P/E Ratio is a basic tool used in the world of fundamental stock analysis, so knowing what it is, is pretty/essential.
From ABOUT.COM: STOCKS
For the more visual learners such as myself, below is a hot european guy giving a good explanation of P/E and it's relevance in considering a stock.
Hot european guy (H/E/G) uses the future earnings method to determine the P/E, where the most common (or so I have read) method is to use the "trailing" or last 12 months earnings instead.
In this video the guy with the great hair is discussing P/E and it's relation to actual earnings.
And in this video, the guy who says uummm a lot presents some interesting facts and perspective about the current S&P P/E. He says CAUTION AHEAD!
posted by Eve
From ABOUT.COM: STOCKS
If there is one number that people look at than more any other it is the Price to Earnings Ratio (P/E). The P/E is one of those numbers that investors throw around with great authority as if it told the whole story. Of course, it doesn’t tell the whole story (if it did, we wouldn’t need all the other numbers.)The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular metric of stock analysis, although it is far from the only one you should consider.
You calculate the P/E by taking the share price and dividing it by the company’s EPS.
P/E = Stock Price / EPS
For example, a company with a share price of $40 and an EPS of 8 would have a P/E of 5 ($40 / 8 = 5).
What does P/E tell you? The P/E gives you an idea of what the market is willing to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings. Some investors read a high P/E as an overpriced stock and that may be the case, however it can also indicate the market has high hopes for this stock’s future and has bid up the price.
Conversely, a low P/E may indicate a “vote of no confidence” by the market or it could mean this is a sleeper that the market has overlooked. Known as value stocks, many investors made their fortunes spotting these “diamonds in the rough” before the rest of the market discovered their true worth.
What is the “right” P/E? There is no correct answer to this question, because part of the answer depends on your willingness to pay for earnings. The more you are willing to pay, which means you believe the company has good long term prospects over and above its current position, the higher the “right” P/E is for that particular stock in your decision-making process. Another investor may not see the same value and think your “right” P/E is all wrong.
For the more visual learners such as myself, below is a hot european guy giving a good explanation of P/E and it's relevance in considering a stock.
Hot european guy (H/E/G) uses the future earnings method to determine the P/E, where the most common (or so I have read) method is to use the "trailing" or last 12 months earnings instead.
In this video the guy with the great hair is discussing P/E and it's relation to actual earnings.
And in this video, the guy who says uummm a lot presents some interesting facts and perspective about the current S&P P/E. He says CAUTION AHEAD!
posted by Eve
Saturday, February 14, 2009
STOCK VS. CASH - THE RULES
Our Partnership Agreements reads as follows:
Something to think about.
Eve
XXIV. ASSET WITHDRAWAL: Upon...voluntary withdrawal..., the Club can chose to exercise the following payment methods, decided upon by a majority vote. These methods of payment are: cash, cash/stock, stock transfer, stock sale or a special assessment. The Club retains the right to vote on special circumstances.Although in the recent past our members have stated their desired form of payout and we have accommodated them, it is our choice based on what we think is best for the club as a whole.
Something to think about.
Eve
Monday, October 8, 2007
SEPTEMBER MEETING MINUTES
MONI Meeting Minutes 9/8/07
Meeting was called to order at 10:18am. Elenie made a motion to accept minutes from last month; Eve made a 2nd motion, all in favor.
Previous visitors Linda Klein and Diana Valentine were unable to make the meeting but would like to return again.
Treasurer’s Report:
We’ve earned $74.43 in dividends from Lowes, AT&T, and Polymedica and earned $19.92 in interest, totaling $94.35.
As of 9/8/07 we have $808.92 in cash for trading, $136.32 in petty cash.
There’s new software we’re interested in trying out. Eve has links on our blog to our live portfolio. Cool!
As of 9/7/07
Cash (PC and held by broker) $ 945.24
Securities Market Value 67,475.26
Total cash & stock $ 68,420.50
Stock Info: (as of 8/10/07)
STOCK PRICE P/E RATIO 52WK Hi/Lo Reported by
AMGEN 50.90 14.63 77.00/48.30 Katie
ATT 24.12 n/a 25.90/21.90 Julie
BAC 49.02 10.02 55.08/46.52 Debra
BBBY 32.77 15.46 43.32/32.46 Elenie
CRNT 16.46 n/a 18.60/4.00 Dee
HET 86.03 28.11 86.80/60.90 Suzette
INTC 25.47 25.99 26.52/18.75 Jan
LOW 29.43 14.64 35.74/25.98 Cheri
PEP 67.98 19.10 76.25/61.15 Katie **
PLMD 51.86 30.89 51.99/35.82 Debra
TEVA 43.39 61.11 44.31/30.33 Elenie
TM 113.30 13.05 138.00/105.00 Carla
**will be assigned to Roma
Stock Reports:
AMGN – Lobbied the FDA to re-evaluate labeling for anemia drugs. S&P still ranks it great. 12,000 staff layoffs, and they may have to further downsize. Maybe they’re in the middle of a bad news cycle. They’ve got diabetes drugs down the pipeline, but Aranesp and Epogen are their biggies. Their meeting is Tuesday 9/11. SELL (partial??)
ATT – Eve passed out information on preferred stock (which is what our AT&T stock is.) The call date on AT&T is around 2012.
BAC – Income statement was better than last quarter. They paid $140million to lobbyists. On Motley Fool’s top 10 stocks. They do have exposure to credit card debt issue. Having more of a presence in China—lending to Chinese to build. New executive is Silverstein from the bay area. They may bail out Countrywide, paying them $18/share. Soooo much news….HOLD
BBBY – Boring….not going to make us cash rich, too slow growing. 5 year plan is steady but slow growth. 12 month target price is $47. HOLD or SELL
CRNT-- No news. No target price available. Should we sell and take the profit? SELL
HET -- Should be another dividend paid before the deal is closed (stock buyout), which should happen before the end of the year or by Feb 2008. Harrah’s announced last month a partnership with AEG (owner of Staples among many other venues) to build a $500m 20,000 seat sports arena east of Bally’s and Paris. This is intended to transform the area of Flamingo Road and Las Vegas Blvd. into a major community centerpiece. (HET owns Flamingo and Harrah’s that are right there.) HOLD
INTC – No report ☹ Tech stocks are sizzly hot again.
LOW -- Not much happening. Sold $1.3billion in debt in the form of notes, proceeds are to finance the repurchase of stock…so will there be a buyback? HOLD or SELL?
PEP -- 3rd Quarter earnings to be reported on 10/11. In Southeast Asia, Pepsi is tied with Santori, which is privately held. Introducing diet Gatorade (yuck) and diet Propel (double yuck) in early 2008. HOLD
PLMD -- It’s getting bought out by Medco at $53/share at the end of the year. Medco is cash rich, baby. HOLD
TEVA – (Tev – uh) S&P recommends it as a BUY. 12-month target price is $51. Revenue has doubled every 2 years. Low volatility, medium risk. HOLD or BUY
TM – No report ☹
Other Talk:
Don’t forget to set yourself up a GMAIL account so you can blog with all the cool kids.
We discussed selling AMGN, BBBY, and CRNT, and buy more INTC
• Dee motioned to put a stop limit order at $14.00/share to sell all 100 shares CRNT, Deb seconded, all in favor.
• Elenie motioned to sell 75 shares AMGN. Deb motioned to sell 100 shares AMGN, Bonnie seconded, 5 in favor, motion passed.
• Deb motioned to sell all 100 shares BBBY, Cheri seconded, all in favor.
• Deb motioned to buy 100 shares INTC, Dee seconded, all in favor.
Elenie made a motion to vote in new member Roma Maffia, Eve seconded, all in favor.
Food Queen is Julie and Coffee Princess is Cheri.
Meeting adjourned at 11:48am
Meeting was called to order at 10:18am. Elenie made a motion to accept minutes from last month; Eve made a 2nd motion, all in favor.
Previous visitors Linda Klein and Diana Valentine were unable to make the meeting but would like to return again.
Treasurer’s Report:
We’ve earned $74.43 in dividends from Lowes, AT&T, and Polymedica and earned $19.92 in interest, totaling $94.35.
As of 9/8/07 we have $808.92 in cash for trading, $136.32 in petty cash.
There’s new software we’re interested in trying out. Eve has links on our blog to our live portfolio. Cool!
As of 9/7/07
Cash (PC and held by broker) $ 945.24
Securities Market Value 67,475.26
Total cash & stock $ 68,420.50
Stock Info: (as of 8/10/07)
STOCK PRICE P/E RATIO 52WK Hi/Lo Reported by
AMGEN 50.90 14.63 77.00/48.30 Katie
ATT 24.12 n/a 25.90/21.90 Julie
BAC 49.02 10.02 55.08/46.52 Debra
BBBY 32.77 15.46 43.32/32.46 Elenie
CRNT 16.46 n/a 18.60/4.00 Dee
HET 86.03 28.11 86.80/60.90 Suzette
INTC 25.47 25.99 26.52/18.75 Jan
LOW 29.43 14.64 35.74/25.98 Cheri
PEP 67.98 19.10 76.25/61.15 Katie **
PLMD 51.86 30.89 51.99/35.82 Debra
TEVA 43.39 61.11 44.31/30.33 Elenie
TM 113.30 13.05 138.00/105.00 Carla
**will be assigned to Roma
Stock Reports:
AMGN – Lobbied the FDA to re-evaluate labeling for anemia drugs. S&P still ranks it great. 12,000 staff layoffs, and they may have to further downsize. Maybe they’re in the middle of a bad news cycle. They’ve got diabetes drugs down the pipeline, but Aranesp and Epogen are their biggies. Their meeting is Tuesday 9/11. SELL (partial??)
ATT – Eve passed out information on preferred stock (which is what our AT&T stock is.) The call date on AT&T is around 2012.
BAC – Income statement was better than last quarter. They paid $140million to lobbyists. On Motley Fool’s top 10 stocks. They do have exposure to credit card debt issue. Having more of a presence in China—lending to Chinese to build. New executive is Silverstein from the bay area. They may bail out Countrywide, paying them $18/share. Soooo much news….HOLD
BBBY – Boring….not going to make us cash rich, too slow growing. 5 year plan is steady but slow growth. 12 month target price is $47. HOLD or SELL
CRNT-- No news. No target price available. Should we sell and take the profit? SELL
HET -- Should be another dividend paid before the deal is closed (stock buyout), which should happen before the end of the year or by Feb 2008. Harrah’s announced last month a partnership with AEG (owner of Staples among many other venues) to build a $500m 20,000 seat sports arena east of Bally’s and Paris. This is intended to transform the area of Flamingo Road and Las Vegas Blvd. into a major community centerpiece. (HET owns Flamingo and Harrah’s that are right there.) HOLD
INTC – No report ☹ Tech stocks are sizzly hot again.
LOW -- Not much happening. Sold $1.3billion in debt in the form of notes, proceeds are to finance the repurchase of stock…so will there be a buyback? HOLD or SELL?
PEP -- 3rd Quarter earnings to be reported on 10/11. In Southeast Asia, Pepsi is tied with Santori, which is privately held. Introducing diet Gatorade (yuck) and diet Propel (double yuck) in early 2008. HOLD
PLMD -- It’s getting bought out by Medco at $53/share at the end of the year. Medco is cash rich, baby. HOLD
TEVA – (Tev – uh) S&P recommends it as a BUY. 12-month target price is $51. Revenue has doubled every 2 years. Low volatility, medium risk. HOLD or BUY
TM – No report ☹
Other Talk:
Don’t forget to set yourself up a GMAIL account so you can blog with all the cool kids.
We discussed selling AMGN, BBBY, and CRNT, and buy more INTC
• Dee motioned to put a stop limit order at $14.00/share to sell all 100 shares CRNT, Deb seconded, all in favor.
• Elenie motioned to sell 75 shares AMGN. Deb motioned to sell 100 shares AMGN, Bonnie seconded, 5 in favor, motion passed.
• Deb motioned to sell all 100 shares BBBY, Cheri seconded, all in favor.
• Deb motioned to buy 100 shares INTC, Dee seconded, all in favor.
Elenie made a motion to vote in new member Roma Maffia, Eve seconded, all in favor.
Food Queen is Julie and Coffee Princess is Cheri.
Meeting adjourned at 11:48am
Profit Views Show Toll Of Credit Crisis, But Not For Long?
October 08, 2007: 08:05 PM EST
Oct. 9, 2007 (Investor's Business Daily delivered by Newstex) --
Profit growth likely screeched to a virtual halt in the third quarter. But Wall Street already is betting corporate earnings will quickly rev back into high gear.
Hit by the credit crunch, third-quarter profits for S&P 500 companies likely rose just 0.8% vs. a year earlier, according to Thomson Financial. That would be the worst showing since the start of 2002.
Actual profits typically top views by about 3 percentage points.
Earnings estimates have fallen sharply in recent days. Just a week ago, analysts saw 3.6% growth.
That's almost entirely due to big banks. Citigroup (NYSE:C) C, Merrill Lynch (NYSE:MER) (OOTC:MERIZ) MER and Washington Mutual (NYSE:WM) WM all have warned they'll miss forecasts.
S&P 500 financial firms are now seen posting a 6% profit drop. A week ago, analysts saw a 4% gain.
Yet investors have rushed back into stocks, especially financials.
"The credit crunch is being interpreted as a one-quarter story," said John Butters, director of earnings research at Thomson Financial. "Look at the fourth quarter. The estimates haven't changed all that much."
Analysts see 11% growth in the fourth quarter, with continued strength in 2008.
How can profit growth reaccelerate amid a soft U.S. economy?
"Roughly 45% of the S&P 500's sales come from overseas vs. 32% in 2001," said Alec Young, equity strategist at Standard & Poor's. (NYSE:MHP)
So strong overseas economic growth and the weak dollar are fueling multinationals' results.
Hefty stock buybacks also are boosting earnings per share.
Meanwhile, some sectors should enjoy strong third-quarter results.
Health care profits are supposed to rise by 12%, led by Merck (NYSE:MRK) MRK and other drug makers, Butters said.
S&P 500 tech firms' earnings are expected to climb 10%.
"We're seeing a lot of estimate upgrades to technology recently," noted Dirk van Dijk of Zacks Financial Research.
Joining financials on the downside, consumer discretionary firms likely will suffer a 7% profit slide as home builders post or predict big losses. Excluding builders, discretionary profits should rise 6%.
Energy profits should fall 4%, even with oil prices near record highs. Refining margins have fallen, and natural gas prices aren't up as much as oil. Companies also face tough year-ago comparisons.
Profit views on financials may keep heading south.
"A lot of banks have yet to step into the confessional," said van Dijk. He adds that analysts are still reacting to warnings from Merrill and others.
Preannouncements outside of finance have been sparse. But they may pick up this week.
Ryder R said Monday it will miss third-quarter profit views, citing weaker commercial rentals and broad economic weakness. The truck leasing firm's shares fell 7%. The Dow transports skidded 1.2%.
After the close, Yum Brands (NYSE:YUM) YUM said third-quarter profit rose 19%, easily beating views. Yum, owner of KFC, Taco Bell and Pizza Hut, rose 3% in late trading after surging 6% to a new high ahead of results.
On Tuesday, Alcoa (AMEX:AA.PR) (NYSE:AA) AAwill be the first Dow component to report.
Next week tech giants Google GOOG, Yahoo (NASDAQ:YHOO) YHOO, Intel (NASDAQ:INTC) INTC and eBay (NASDAQ:EBAY) EBAY are up to bat.
Oct. 9, 2007 (Investor's Business Daily delivered by Newstex) --
Profit growth likely screeched to a virtual halt in the third quarter. But Wall Street already is betting corporate earnings will quickly rev back into high gear.
Hit by the credit crunch, third-quarter profits for S&P 500 companies likely rose just 0.8% vs. a year earlier, according to Thomson Financial. That would be the worst showing since the start of 2002.
Actual profits typically top views by about 3 percentage points.
Earnings estimates have fallen sharply in recent days. Just a week ago, analysts saw 3.6% growth.
That's almost entirely due to big banks. Citigroup (NYSE:C) C, Merrill Lynch (NYSE:MER) (OOTC:MERIZ) MER and Washington Mutual (NYSE:WM) WM all have warned they'll miss forecasts.
S&P 500 financial firms are now seen posting a 6% profit drop. A week ago, analysts saw a 4% gain.
Yet investors have rushed back into stocks, especially financials.
"The credit crunch is being interpreted as a one-quarter story," said John Butters, director of earnings research at Thomson Financial. "Look at the fourth quarter. The estimates haven't changed all that much."
Analysts see 11% growth in the fourth quarter, with continued strength in 2008.
How can profit growth reaccelerate amid a soft U.S. economy?
"Roughly 45% of the S&P 500's sales come from overseas vs. 32% in 2001," said Alec Young, equity strategist at Standard & Poor's. (NYSE:MHP)
So strong overseas economic growth and the weak dollar are fueling multinationals' results.
Hefty stock buybacks also are boosting earnings per share.
Meanwhile, some sectors should enjoy strong third-quarter results.
Health care profits are supposed to rise by 12%, led by Merck (NYSE:MRK) MRK and other drug makers, Butters said.
S&P 500 tech firms' earnings are expected to climb 10%.
"We're seeing a lot of estimate upgrades to technology recently," noted Dirk van Dijk of Zacks Financial Research.
Joining financials on the downside, consumer discretionary firms likely will suffer a 7% profit slide as home builders post or predict big losses. Excluding builders, discretionary profits should rise 6%.
Energy profits should fall 4%, even with oil prices near record highs. Refining margins have fallen, and natural gas prices aren't up as much as oil. Companies also face tough year-ago comparisons.
Profit views on financials may keep heading south.
"A lot of banks have yet to step into the confessional," said van Dijk. He adds that analysts are still reacting to warnings from Merrill and others.
Preannouncements outside of finance have been sparse. But they may pick up this week.
Ryder R said Monday it will miss third-quarter profit views, citing weaker commercial rentals and broad economic weakness. The truck leasing firm's shares fell 7%. The Dow transports skidded 1.2%.
After the close, Yum Brands (NYSE:YUM) YUM said third-quarter profit rose 19%, easily beating views. Yum, owner of KFC, Taco Bell and Pizza Hut, rose 3% in late trading after surging 6% to a new high ahead of results.
On Tuesday, Alcoa (AMEX:AA.PR) (NYSE:AA) AAwill be the first Dow component to report.
Next week tech giants Google GOOG, Yahoo (NASDAQ:YHOO) YHOO, Intel (NASDAQ:INTC) INTC and eBay (NASDAQ:EBAY) EBAY are up to bat.
Thursday, September 20, 2007
Green Stocks for Staying in the Black
By Farnoosh Torabi
TheStreet.com Correspondent
9/20/2007 3:59 PM EDT
URL: http://www.thestreet.com/newsanalysis/conscious-companies/10376921.html
After seeing a screening of An Inconvenient Truth last fall, 31-year-old Karyn Ravin regretted ever leasing her gas-guzzling Nissan Pathfinder. She should have bought a Toyota Prius, she realized.
But with one more year left on her SUV's lease, Ravin opted for the next best green thing -- 100 shares of Toyota (TM) , an auto company known for its dedication to fuel efficiency. "It was doing our little part," says Ravin, owner of Maletzky Media, a public relations and marketing firm in New York City. So far, the stock's been friendly to her broad-based retirement portfolio, climbing roughly 15% since she bought it last September.
Indeed, green is the new black on Wall Street, with individuals increasingly placing bets on eco-friendly stocks, mutual funds and exchange-traded funds. "People understand you don't have to sacrifice returns to invest in an environmentally responsible way," says Jack Robinson, lead portfolio manager of the Winslow Green Growth Fund (WGGFX) .
While some financial experts preach that the greener the investment, the better, there are potential downsides. "It's a speculative sector as a whole," says John Quealy, analyst at financial services firm Canaccord Adams.
For one, this sector is vulnerable to the demand for traditional energy.
"If we saw oil go back down to $50 [a barrel] , all of a sudden there's not going to be as much demand for green stocks," says Tom Lydon, editor of ETFTrends.com, a blog about ETFs.
What's more, investors should watch out for bursting bubbles within certain subindustries, such as solar, whose capital investments, experts caution, run the risk of outpacing demand. "It looks to me like too much manufacturing capacity is coming on too quickly," says Jim LoGerfo, founder of Vortex Energy LLC, a financial advisory firm.
He compares today's solar popularity to the 2006 heyday of ethanol, when biofuel project financing was up 1,700% from 2004, according to researchers at New Energy Finance. "Both industries are being hugged to death," says LoGerfo.
Considering that, here are some ways to hug the world and curb your risk:
Mutually Green: Green mutual funds are popular because they offer diversified sector exposure. The Winslow Green Growth Fund invests in 30 to 40 small-cap, high-growth green stocks. "Green" to Winslow means promoting healthier lives, plain and simple. Some of the highest-growth players in the no-load portfolio include Chipotle Mexican Grill (CMG) and Fuel Tech (FTEK) . The Green Century Balanced Fund (GCBLX) and the Spectra Green Fund (SPEGX) are two other mutual fund options.
ETFs -- Pure and Liquid: For pure exposure to a certain index of green companies, such as simply solar or clean tech, experts recommend ETFs, which trade like stocks, so they're more liquid than mutual funds. PowerShares Wilderhill Clean Energy Portfolio (PBW) and the New Alternatives Fund (NALFX) are widely popular.
Stocks With Green Ingredients: Adding, say, GE (GE) or Toyota -- industry-leading stocks with active green initiatives -- to an existing portfolio can also give investors green exposure while mitigating risk. Others include Advanced Micro Devices (AMD) , Dell (DELL) and Google (GOOG) . One caveat: These companies may not see direct revenue gains from their green doings as quickly as "pure" green stocks. "If you bought Applied Materials (AMAT) today, for example, you are buying something that, in terms of revenue, is not a 'clean tech' company. Give it three years," advises LoGerfo.
Ravin says she'll hold on to her Toyota shares for the long haul, in addition to trading in her SUV for a Prius when her lease is up. "We're trying to make our carbon footprint as small as possible," she says.
TheStreet.com Correspondent
9/20/2007 3:59 PM EDT
URL: http://www.thestreet.com/newsanalysis/conscious-companies/10376921.html
After seeing a screening of An Inconvenient Truth last fall, 31-year-old Karyn Ravin regretted ever leasing her gas-guzzling Nissan Pathfinder. She should have bought a Toyota Prius, she realized.
But with one more year left on her SUV's lease, Ravin opted for the next best green thing -- 100 shares of Toyota (TM) , an auto company known for its dedication to fuel efficiency. "It was doing our little part," says Ravin, owner of Maletzky Media, a public relations and marketing firm in New York City. So far, the stock's been friendly to her broad-based retirement portfolio, climbing roughly 15% since she bought it last September.
Indeed, green is the new black on Wall Street, with individuals increasingly placing bets on eco-friendly stocks, mutual funds and exchange-traded funds. "People understand you don't have to sacrifice returns to invest in an environmentally responsible way," says Jack Robinson, lead portfolio manager of the Winslow Green Growth Fund (WGGFX) .
While some financial experts preach that the greener the investment, the better, there are potential downsides. "It's a speculative sector as a whole," says John Quealy, analyst at financial services firm Canaccord Adams.
For one, this sector is vulnerable to the demand for traditional energy.
"If we saw oil go back down to $50 [a barrel] , all of a sudden there's not going to be as much demand for green stocks," says Tom Lydon, editor of ETFTrends.com, a blog about ETFs.
What's more, investors should watch out for bursting bubbles within certain subindustries, such as solar, whose capital investments, experts caution, run the risk of outpacing demand. "It looks to me like too much manufacturing capacity is coming on too quickly," says Jim LoGerfo, founder of Vortex Energy LLC, a financial advisory firm.
He compares today's solar popularity to the 2006 heyday of ethanol, when biofuel project financing was up 1,700% from 2004, according to researchers at New Energy Finance. "Both industries are being hugged to death," says LoGerfo.
Considering that, here are some ways to hug the world and curb your risk:
Mutually Green: Green mutual funds are popular because they offer diversified sector exposure. The Winslow Green Growth Fund invests in 30 to 40 small-cap, high-growth green stocks. "Green" to Winslow means promoting healthier lives, plain and simple. Some of the highest-growth players in the no-load portfolio include Chipotle Mexican Grill (CMG) and Fuel Tech (FTEK) . The Green Century Balanced Fund (GCBLX) and the Spectra Green Fund (SPEGX) are two other mutual fund options.
ETFs -- Pure and Liquid: For pure exposure to a certain index of green companies, such as simply solar or clean tech, experts recommend ETFs, which trade like stocks, so they're more liquid than mutual funds. PowerShares Wilderhill Clean Energy Portfolio (PBW) and the New Alternatives Fund (NALFX) are widely popular.
Stocks With Green Ingredients: Adding, say, GE (GE) or Toyota -- industry-leading stocks with active green initiatives -- to an existing portfolio can also give investors green exposure while mitigating risk. Others include Advanced Micro Devices (AMD) , Dell (DELL) and Google (GOOG) . One caveat: These companies may not see direct revenue gains from their green doings as quickly as "pure" green stocks. "If you bought Applied Materials (AMAT) today, for example, you are buying something that, in terms of revenue, is not a 'clean tech' company. Give it three years," advises LoGerfo.
Ravin says she'll hold on to her Toyota shares for the long haul, in addition to trading in her SUV for a Prius when her lease is up. "We're trying to make our carbon footprint as small as possible," she says.
Wednesday, September 19, 2007
Teva Pharmaceutical Drug Fails Study
Teva Pharmaceutical Industries' Lupus Drug Candidate Fails to Meet Goal in Midstage Study
September 19, 2007: 01:56 PM EST
NEW YORK (Associated Press) - Drug developer Teva Pharmaceutical Industries Ltd. said its lupus drug candidate edratide failed to meet its goal in a midstage clinical trial.
The Phase II clinical trial involved 340 patients with systemic lupus erythematosus from 12 countries. The goal of the study was a reduction of lupus disease activity over a 26-week treatment period. The drug was given in weekly injections.
Symptoms for systemic lupus erythematosus include fatigue, low-grade fever, muscle aches, arthritis, ulcers of the mouth and nose and facial rash.
Teva said the drug was shown to be safe and well tolerated in the study. The company said future plans for the drug candidate has not been determined.
Shares of Israel-based Teva rose 30 cents to $44.25 in afternoon trading
September 19, 2007: 01:56 PM EST
NEW YORK (Associated Press) - Drug developer Teva Pharmaceutical Industries Ltd. said its lupus drug candidate edratide failed to meet its goal in a midstage clinical trial.
The Phase II clinical trial involved 340 patients with systemic lupus erythematosus from 12 countries. The goal of the study was a reduction of lupus disease activity over a 26-week treatment period. The drug was given in weekly injections.
Symptoms for systemic lupus erythematosus include fatigue, low-grade fever, muscle aches, arthritis, ulcers of the mouth and nose and facial rash.
Teva said the drug was shown to be safe and well tolerated in the study. The company said future plans for the drug candidate has not been determined.
Shares of Israel-based Teva rose 30 cents to $44.25 in afternoon trading
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