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Meet n Greet Time!!
15 Saturday Aug 2015
Posted in Uncategorized
Daily News Breakdown 8/14/2015
14 Friday Aug 2015
Posted in News Breakdown
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- Daily Market Update
- The Dow ended the day up 69.15 points or approximately 0.40%.
- The S&P 500 ended the day up 8.15 points or approximately 0.39%.
- The NASDAQ ended the day up 14.68 points or approximately 0.29%.
- Oil ended the day up $0.27 at $42.18 a barrel.
- Gold ended the day down $2.90 at $1,113.20.
- The United States Allows Restricted Oil Exports to Mexico
The United States will allow 100,000 barrels a day of light oil that is drilled in the United States to be exchanged for heavy crude from Mexico. This is a major shift in United States policy as previously only Canada was allowed to export oil from the United States. The shift is certainty because of the oil drilling boom in the United States and because of the low prices that oil is now demanding. For more information click here
- Keyless Cars Can Be Hacked
According to research that Volkswagen has been attempting to keep hidden through court fillings for the past two years the Radio-Frequency Identification (RFID) transponder chip has had a security flaw that allows hackers to access the cars. The hack has been found to be responsible for 42% of all stolen vehicles in London. This flaw was known since 2012 but before it could come to light Volkswagen sued to keep the research from the public. For more information click here
- The United States Raises Flag Over Cuban Embassy
The United States reopened its Cuban Embassy after over 54 years of its closer during the cold war. This symbolizes the reinstatement of diplomatic ties between the two countries as President Obama’s administration calls for the lifting of the embargo, something Republicans have blocked. For more information click here
Why I Loved Consolidated Water’s Second Quarter Report
14 Friday Aug 2015
Posted in Individual Equity Analysis
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Consolidated Water (CWCO) is a company that operates, builds, maintains, and upgrades water desalinization plants. The company is based in the Cayman Islands and operates in the Cayman Islands, Bahamas, Belize, British Virgin Islands, and Bali with plans in motion to expand into Mexico. Below is a summery of their Q2 2015 earnings report.
- Income
Consolidated Water’s net income for the second quarter declined year over year from approximately $2.8 million to $2.25 million. Looking at these numbers alone they may seem like cause for concern; but when you break them down you see that Consolidated Water is a stable long-term growth company with huge potential.
-Energy Costs
Due to Consolidated Water’s pricing model the company passes off increases in energy prices to the consumer. Since energy prices were considerably lower this quarter than Q2 2014, they did not charge as much thereby decreasing overall revenue.
-Retail Segment
Year over year gross profit increased $813 as water sales were consistent when compared to Q2 2014 and the cost of retail revenue, due to decreased energy costs, offset the decrease in retail revenue. The retail segment of Consolidated Water’s businesses operates the water utility for the Seven Mile Beach and the West Bay area of the Grand Cayman as well as selling water to resorts in Bali, Indonesia.
-Bulk Segment
Year over year revenue decreased from $10 million to $8.2 million. CEO Frederick McTaggart explained this drop in revenue during their Q2 2015 conference call:
Bulk segment revenues declined from $10 million in the second quarter of 2014 to $8.2 million this past quarter, again, on significantly lower energy pass-through charges to our customers and to a lesser extent, lower volume sales in our Bahamas and Cayman bulk water operations.
What Frederick McTaggart was discussing above was the Bahamas Water and Sewerage Corporation, Consolidated Water’s client, continued water conservation efforts. These efforts caused a 9% drop in volume sales. The 5% drop in volume sales from the Grand Cayman was due to increased rainfall which causes less water to be needed for irrigation. The bulk segment of Consolidated Water’s operation supplies water to government utilities in the Grand Cayman, The Bahamas and Belize.
- Mexico
Consolidated Water is attempting to expand their operations further into Central America through building a 100 million gallon a day seawater desalination plant in Rosarito Beach, Mexico. They are currently awaiting the committee who decides whether to move forward with the plant final decision on their proposal however, Consolidated Water is confident that it will get approved.
- Balance Sheet
Consolidated Water’s cash and cash equivalents increased from $36.755 million in Q1 2015 to $39.323 million in Q2 2015 and debt continued to decrease with their demand note payable decreasing from $8.5 million to $8 million. (For information on what a demand note payable is click here) Total debt, the demand note payable plus Accounts payable and other current liabilities, totaled $12.231 million down from $13.414 million in Q1 2015.
- Conclusion
Consolidated Water is a long-term growth company and are perfect for any value investors portfolio. Cash and cash equivalents continue to increase while debt continues to decrease. In addition they are a company who is continually expanding as shown with their maneuver into Mexico. The stock pays a solid dividend of $0.30 (2.52%) a share. In addition the industry they are in is one of continual increased importance. Recently the United Nations released a report stating that by 2030 the world will only have 60% of the total usable water that we need. Water is a commodity that is necessary for the human race’s survival and as the population of the world continuously grows so will Consolidated Water’s business. They are the definition of a value investment.
Disclosure: While I express my opinion in this article, only you can determine if a specific stock is right for your portfolio. You should always do your own research before buying or selling any stock.
Daily News Breakdown 8/12/2015
12 Wednesday Aug 2015
Posted in News Breakdown
- Daily Market Update
- The Dow ended the day down 0.33 points or approximately 0.00%.
- The S&P 500 ended the day up 1.98 points or approximately 0.10%.
- The NASDAQ ended the day up 7.60 points or approximately 0.15%.
- Oil ended the day up $0.22 at $43.30 a barrel.
- Gold ended the day down $15.90 at $1,123.60.
- China Blast Kills at Least 17 People
Two blasts rocked the Chinese port of Tianjin on Wednesday as over 300 people were injured and at least 17 people were killed including four firefighters. The first blast was approximately three tons of TNT while the second was approximately 21 tons of TNT.
Source: The BBC
The Chinese State controlled broadcaster China Central Television announced that a shipment of explosives had detonated. However, like all news that comes out of China this cannot be independently verified. The truth is we will most likely never know what happened on Wednesday. For more information click here
- More News From Today
For the rest of today’s earlier news click here
China Weakens Yuan Again
12 Wednesday Aug 2015
Posted in Commentary
The People’s Bank of China on Wednesday set the price of the yuan 1.60% lower than Tuesday’s price for 6.3306 per United States dollar. The continued move lower versus the dollar by the People’s Bank of China shows just how committed China is to continuing to battle the United States for economic supremacy. It is also important to remember that China is a communist country and because of their political system they have a smaller number of people who the leader, Xi Jinping, needs to keep happy and he can only continue to do that if the money continues to flow. Therefore, this could also be seen as a move to stabilize the economy to continue the communist’s hold on power.
Daily News Breakdown 8/11/2015
11 Tuesday Aug 2015
Posted in News Breakdown
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- General Electric Sells Healthcare Lending Business
General Electric has finally announced the sale of its Healthcare Financial Services U.S. Lending business to Capital One for approximately $9 billion. This sale to Capital One is just one of the business that GE is currently attempting to sell with the liquidation of the majority of GE Capital. This sale brings the total of General Electric’s total announced sales to approximately $78 billion.
- Small Business in the United States Gets a Confidence Boost
The National Federation of Independent Business on Tuesday announced that the Small Business Optimism Index increased 1.3 points to 95.4 points versus the expected 94.3 points during June 2015. The index charts the economic outlook of small businesses’ in the United States and reports monthly. The full report can be found here
- Daily Market Update
- The Dow ended the day down 212.33 points or -1.21%.
- The S&P 500 ended the day down 20.11 points or -0.96%.
- The NASDAQ ended the day down 65.01 points or -1.27%
- Oil ended down $1.88 at $43.08 a barrel the lowest since February of 2009.
- Gold ended the day up $3.60 at $1,107.70.
- More News From Today
For the rest of today’s news click here to go to today’s Mid-Day News Breakdown.
Not a Saver? Try the One Percent Plan
11 Tuesday Aug 2015
Posted in Uncategorized
A great article with a clear and easy to follow plan.
Not When But How
11 Tuesday Aug 2015
Posted in Commentary
I was recently reading two articles on the United States and our mounting debt problem. The topic has seen an increasing amount of press as our debt crisis finally comes into the spotlight. The first article I read was on CNBC and was titled: “Listen up, candidates: Social Security is broken.” It was not until I read the second article on How to $tuff Your Pig called: “An Idiots Question” that I really started to think about the crisis the United States faces. How to $tuff Your Pig spoke about private debt, but I want to talk about public; an issue I find substantially more alarming.
- The issue:
The United States is 58% underfunded on all future endeavors. That means that 58% of the money the United States has pledged nobody knows where it is going to come from. Since the end of World War Two the United States has been the world economic superpower and yet since the 1950s our national debt has continued to rise at an alarming rate.
- The Reality:
If this issue is not fixed in the next twenty years at most; the United States will not be a world economic power. The United States cannot keep pushing off our expenses to the next generation because eventually the gravy train has to come to a stop. As How to $tuff Your Pig pointed out this could not have come up at a worse time as not only is the government of the United States broke so are its people with no reasonable solution insight. The fact is when planning for retirement do not count on Social Security to be there as it alone is 32% underfunded or approximately $25.80 trillion in the red.
- Conclusion:
The question is not when will we pay it back but how because I have not heard a viable solution yet.
Mid-Day News Breakdown 8/11/2015
11 Tuesday Aug 2015
Posted in News Breakdown
- Dow Drops
The Dow is currently down approximately 218 points as Wall Street attempts to understand the move by China yesterday to devalue the yuan against the dollar. The move by the People’s Bank of China is thought to be in response to China’s abysmal July export number. This move by China clearly shows just how worried China’s ruling elite are about China’s economy.
- Oil Drops Again
At one point today oil was down below $43 in a move not see since March. The downward progression made by oil today was in response to concerns about weaker demand from China and an increase in production from Iran. For a more detailed analysis click here
- GOP Tries to Gain Support for an Iran Veto Override
The GOP House leader said in an interview in Jerusalem that there is a chance for a President Obama veto override as the debate regarding the Iran Nuclear deal continues to heat up. Congress is almost certainly not going to pass the deal and with President Obama saying he will veto any resistance from Congress the GOP has been trying to get enough support to override a veto.
- After All Night Negotiations Greece Has a Deal
While Greece has a deal negotiated with European Union heads of state, the deal still has to be ratified by Greece’s parliament in which the Syriza party, who oppose austerity, currently hold a majority. Due to this fact I am not confident that the deal will indeed pass through parliament. For a more detailed analysis click here
Daily News Breakdown 8/10/2015
11 Tuesday Aug 2015
Posted in News Breakdown
Tags
China, Gold, Oil, Q2, Second Quarter
- Google is now Alphabet
Google announced on Monday that they were forming a parent company called Alphabet. Don’t worry this is not a splitting of the company Google, but rather a more streamlined consolidation of the company as a whole. As we have seen recently Google has become more of a Berkshire Hathaway than just a search engine as they have dabbled in everything from cars to extending life indefinitely. But what does this mean for investors? In truth not much in the short-term; investors who currently own Google will just have their shares transformed into Alphabet stock and will keep their current number of shares. However, in the long run we can look forward a company that is more focused as the parent company structure allows each department to coexist separately rather than a jumbled mess.
For a more detailed analysis from Jim Cramer click here
- Shake Shack Earnings Beat the Street
Shake Shack released its Q2 2015 earnings on Monday and destroyed Wall Streets estimates of 3 cents per share on $43 million in revenue with $48.5 million in revenue on 9 cents per share. The stock, in after hours trading, is up 7.73%.
- People’s Bank of China Lets Yuan Depreciate
The PBOC set Tuesday’s Midpoint at 6.2298 per U.S. dollar which is a decrease of approximately 2% from Monday. For a more detailed account click here
- Gold Above $1,100 Again
Gold reached as high as $1,108.80 on Monday the highest price since July 21, 2015. This was due to a less than expected jobs number released last week.
- Oil Ends the Day Up
Oil ended the trading day Monday up 2.48% at $44.96. This was due to an outage at a refinery in Whiting, Indiana due to a malfunction on Saturday. However, the rally was short-lived as oil is now down 0.80% at $44.60. The rally on Monday should not cause anybody to think that oil has hit the bottom. Always remember to look at the bigger picture; in this case Saudi Arabia, Iran, and United States’ drillers. Oil has not reached its bottom and I would not care to guess where that is until we receive accurate and definitive numbers out of Iran.
- Kyushu Electric Power Restarts Reactor At Sendai Plant
After the 2011 Fukushima disaster all of Japan’s nuclear plants were shutdown for safety inspections and evaluations. Since the plants were shutdown Japan began to rely on the importation of fossil fuels to power the country. Even though over $100 million has been spent on fitting new safety equipment to the reactor there are still large protests over the restart of the power plants as Japan is in an earthquake prone area.
- Australia to Cut Emissions
Australia has pledged to cut greenhouse gas emissions by 26% to 28% below 2005 levels by 2030. As more countries pledge less reliance on fossil fuels is this the end of oil dominance? I think so. For more information please click here
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