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Archive for August, 2010

Posted by MartZee August 23, 2010

Visa was dropping as one mutual fund was selling and investors panicking

Marsico Capital Management was among the biggest sellers in the second quarter of Visa Inc., the world’s largest payments network, and Vanguard Group Inc. added to its holdings, as the stock posted its steepest decline in almost two years.

Marsico liquidated its remaining 10.4 million shares and also closed out its investment in No. 2 network MasterCard Inc., selling 5.21 million shares. Vanguard increased its stake to 17 million shares from 16.3 million shares, the company confirmed.

Visa and MasterCard both fell more than 20 percent in the three months ended June 30 as Congress approved limits on debit- card interchange, or “swipe” fees, charged to merchants. The companies and their investors are waiting for the Federal Reserve to determine fees that are “reasonable and proportional” to the cost of processing debit transactions.

MasterCard and Visa continue to grow profit amid a worldwide consumer shift from cash and checks to plastic. Morgan Stanley’s Frisch is among 33 analysts surveyed by Bloomberg who recommend investors buy the companies’ shares.

Fundamentals ‘Solid’

The stocks are “relatively cheap,” Frisch said in his research note. “Fundamentals remain solid.”

Maybe investors were panicking when seeing the mutual fund selling shares, but we do not know the reason for it. Visa may no longer fit into the fund’s investing strategy and there fore unloading the position. If it was due to uncertain future, it may not show up as terrible as expected and the fund may potentially start buying back the same way as Buffet did with Johnson & Johnson (JNJ) recently and that may push the stock back higher. From the long term I think this stock has a great potential for its growth towards its $100 fair value.
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Posted by MartZee August 23, 2010

Optimism in Visa rising, but will it be enough?

Recently we saw Visa (V) being beaten down and staying under a significant pressure as investors were trying to determine the impact of regulation act on the company. In my opinion, these expectations were too pessimistic and although CEO claimed in his press release couple months ago that the so called “finreg” will have very little impact to the company’s earnings investors seemed didn’t believe it. Later another boo boo news arrived claiming that Verizon (VZ) and AT&T (T) started planning on their own mobile payment network, while Visa a few days later announced its launching sent the stock to the south territory. Investors were irrationally panicking once again.

It seems to me as a great manipulation of the stock price since I couldn’t find anything wrong with the company and all the news which were predicting a fall of the stock and company’s dominance were a bit… well… off the wall. Someone is maybe loading up or the retail investors were panicking too much. Who knows. Maybe I am off the wall myself. However it seems that investors are realizing that all the predicted impact will not be as bad as expected and we can see some improvement. It may still mean nothing, since the crowd sometimes react weird way (which Contrarians like a lot) we can see the community improving on Visa.

We can see a big upgrade for Visa!

After spending more than a year locked at a mediocre three-star rank, Visa (NYSE: V) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to climb up to four stars. A total of 4,607 members have given their opinion on the payment firm, with many offering analysis and commentary to explain their recent optimism.

Shares of Visa and MasterCard (NYSE: MA) have come under pressure in recent months, as investors attempt to gauge the effects of financial reform efforts on their businesses. Both companies have yet to determine the effects of changing regulations on debit card payments. However, Visa’s CEO recently said he doesn’t expect changes to affect the growth of electronic payments in the U.S., and predicts only a modest earnings impact from the final rules.

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Posted by MartZee August 22, 2010

Picks 08/16 – 08/20

My weekly review of my portfolios during the last week. You can review my Trading account, which is my aggressive portfolio where I buy individual stocks, my ROTH IRA retirement account which is my dividend investing portfolio (to which I am focusing the most right now) and my Lending Club account, P2P lending investment which is growing very well.
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Posted by MartZee August 20, 2010

Market in correction again

This morning trading turned the market into correction again. I will be buying mutual funds only, but no individual stocks or ETFs. It seems the market is looking for direction. S&P500 is maybe entering into sideways trading. Let’s see what will happen next week.

Posted by MartZee August 17, 2010

Why is J&J falling? Maybe because Buffett’s buying…

Sometimes stocks act irrationally, weird and the opposite way than one would expect. Sometimes the whole market does that as well. Especially these days. I am closely watching my holdings as everybody should do and I am also watching Johnson & Johnson (JNJ), since the price drops make me nervous even though I am repeating myself every day that those drops are insignificant, look for the whole picture, not just this crazy period.

Warren Buffett’s company has partially rebuilt the stake in Johnson & Johnson (JNJ) he reduced over the past two years to raise cash for other investments as per Associated Press. Berkshire detailed its $46.4 billion U.S. stock holdings Monday in a filing with the Securities and Exchange Commission. The document revealed several changes in the Omaha-based company’s portfolio between March 31 and the end of June, including decreases in Berkshire’s holdings in Kraft Foods, ConocoPhillips, Procter & Gamble and M&T Bank. Berkshire also increased its stakes in Becton Dickinson & Co., Nalco Holding Co. and Sanofi Aventis. But the biggest change came in Berkshire’s J&J stake, which grew to 41.3 million shares at the end of June. That’s up from 23.9 million shares in March. In 2008 and 2009, Buffett sold off some of Berkshire’s Johnson & Johnson stock to help pay for more attractive investments.

Berkshire held 64.3 million shares of New Brunswick, N.J.-based Johnson & Johnson at the end of 2007. Buffett, who is Berkshire’s CEO and chairman, has said he sold some stock in the drug and medical products maker in 2008 to free up capital for Buffett’s $14.5 billion fixed income investments in Goldman Sachs Group Inc. and General Electric Co.

Later in 2009, Buffett again sold some J&J stock to help raise cash for Berkshire’s $26.7 billion acquisition of the Burlington Northern Santa Fe railroad.

Well, since the Omaha Oracle is buying, one would expect the stock rising, which is not happening. For Buffett a great opportunity to buy cheap, for us an opportunity to do the same. Maybe on Tuesday we may see some north-moving.

Source: Yahoo.com, BERKSHIRE HATHAWAY INC.

Posted by MartZee August 15, 2010

Picks 08/09 – 08/13

My weekly review of how my portfolios did this bumpy week. You can review my Trading account, which is my aggressive portfolio where I buy individual stocks, my ROTH IRA retirement account which is my dividend investing portfolio (to which I am focusing the most right now) and my Lending Club account, P2P lending investment which is growing very well.
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Posted by MartZee August 12, 2010

The market’s heading to a rally end

Stocks fall after disappointing Cisco (CSCO) earnings and jobless data for the third day and extending loss by 1% shortly after opening. If the markets close with this drop on high volume, the rally will be over.

Posted by MartZee August 11, 2010

Dividend stocks? How about Johnson & Johnson?

During this volatile market we can see a lot of stocks being driven by the market up and down. Many with no particular reason or based on short term look. Recently I was reviewing Johnson & Johnson (JNJ) because it was running up and down and today it again loses ground quite a lot. As a dividend investor I am trying to ignore these days and stick with the stock, hold it and if I can get some money buy more. But I need an assurance that I am holding the right stock. So I checked the overall picture of this stock and its chart with splits and I could see steady growth in value. Combined with roughly 45 years of growing dividend I do not see an issue to hold this stock.

This article originally appeared on The DIV-Net May 17, 2010.

Linked here is a detailed quantitative analysis of Johnson & Johnson (JNJ). Below are some highlights from the above linked analysis:

Company Description: Johnson & Johnson engages in the manufacture and sale of various products in the health care field worldwide.

[…]

Conclusion: JNJ earned one Star in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of five Stars. This quantitatively ranks JNJ as a 5 Star-Strong Buy (as of May 17, 2010).
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Posted by MartZee August 11, 2010

Dividend investing weathers the bumpy markets

Shareholders count on dividends more than ever these days to protect their portfolios against volatile markets. Companies hoarding cash since the start of the recession are beginning to pass on some of it to their shareholders in the form of increased dividends, but it’s unlikely to match the boom of a decade ago.

Moody’s Investors Service estimates that US nonfinancial corporations were sitting on $1.84 trillion in cash in the first quarter of this year—a 27-percent increase from early 2007.
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Posted by MartZee August 11, 2010

Stock market under pressure

Stocks retreat as Fed grows more cautious. Yea, who else pays attention what Fed feels these days? As usually, investors are running up and down when panicking or being greedy…

Stocks and interest rates are tumbling with investors worldwide growing concerned about the health of the U.S. economy after the Federal Reserve said the recovery was slowing down. We may expect this month to be a bit bumpy.

I am changing the status of the market into “Under pressure” since the morning’s drop is quite substantial and may end this rally. Let’s see a few next days.
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