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Posted by TwillyD June 24, 2016
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Through 600-point Sell Off, Verizon Falls Just .44%


We saw most of the stock market sell off on Friday following the U.K.’s historic exit from the European Union. However, there were some stocks that managed to hold their own with one of those being Verizon (NYSE: VZ).

One of the reasons the company was able to stay in the green could be attributed to a key acquisition it made last week.

I consider Verizon to be a mixed bag of tricks. It’s fresh off of a strike that lasted almost two months, which is expected to have negatively affected its second quarter earnings. It reports those earnings next month.

Last week, it announced the acquisition of a company that develops location-based software to manage mobile resources.

While Verizon weathered the Friday’s deep declines, at this point, I would steer clear in buying Verizon as a long-term play. However, there is a good amount of interests in the options market for calls and puts that expire just before it reports earnings next month, and they may be the way to go as investment plays.

While most stocks opened down, Verizon opened at $54.31 and moved up to $55.22 before pulling back. It closed Friday down .40%. The stock is up just over 18% year-to-date.
 

 · IoT investment

 
Verizon acquired a company that develops location-based software to manage mobile resources. Called Telogis, the company sells software-as-a-service (SaaS), which incorporate location information into applications for vehicles, as well as geospatial software development toolkits.

Verizon is specifically seeking to position itself in the connected vehicle and mobile enterprise management sectors. In addition to Telogis’ enterprise product portfolio, Verizon was attracted to the software company because of its partnerships with some of the world’s leading vehicle and equipment manufacturers.

Telogis brings its software platform and new distribution relationships to Verizon
Telematics’ suite of connected vehicle solutions for consumers and enterprise customers.
 

 · Strike of the year

 
Verizon’s wireline employees went on strike beginning on April 13. It lasted through June 1, and during that time the company experienced all kinds of problems.

The sheer magnitude, in terms of the numbers of workers who walked off the job and left the company’s Fios unit unmanned, will have a long-term effect of the company. While the company was able to maintain the Fios unit while it negotiated new contracts with the workers, there is still concern over when the company will fully rebound from the strike.

Referred to as the wireline workers, roughly 40,000 of them went on strike, including network technicians and customer service representatives. Fios consists of Internet, telephone and television services.

As a result of the strike, Verizon had to incur several additional costs. For example, it had to shift costs that had been associated with acquiring new customers and new installations to keep existing customers who needed regular maintenance and repairs. It also saw its costs increase related to hiring contractors to replace the striking workers; and it had to pay overtime to management employees.

Verizon’s CFO Fran Shammo has said that earnings per share during the second quarter were expected to be lessened by between $.05 and $.07. As of June 16, its EPS was $.96. Shammo added that the company’s earnings “will flow to the end of the year.”

Shammo recently spoke at a conference hosted by Bank of America Merrill Lynch. He opened up to the group and also spoke about how the strike, which was the first time he had done so since the end of the strike. He admitted that he was unable to pinpoint the numbers, such as how many installations it has in the works.
 

 · Call and put activity

 
Verizon is due to release its second quarter earnings report on July 26. There was a considerable amount of interest on Friday for the call and put contracts that expire on July 15.

The contracts with the most open interest were as follows:
The 52.50 call had an open interest of roughly 44,000
The 55 call had an open interest of roughly 29,000
The 45 put had an open interest of roughly 66,000
The 50 put had an open interest of roughly 55,000




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Positive Housing Data; Guidance Make Sector a Long-term Play


Recent housing-related figures from a wide range of players in the space indicate the economy is continuing to recover. The positive data can be used as a basis for those who may have avoided the space as a long-term investment play.

Housing-related data came from many sources this week. On Thursday, the Commerce Department released new home sales. On Wednesday, the National Association of Realtors released numbers for existing home sales for May. Home Depot (NYSE: HD) received an upgrade by an analyst who noted that a slowdown in the growth of home prices doesn’t present as much risk anymore. Lastly, KB Home (NYSE: KBH) and Lennar (NYSE: LEN) reported strong earnings this week.
 

 · Commerce Department numbers

 
In May, new home, single family home sales dropped 6% to a seasonally adjusted annual rate of 551,000 units, according to the Commerce Department. Also, April’s sales pace was revised down to 586,000 units, still the highest since February 2008, from the previously reported 619,000 units.

Although they make up just a tenth of all home purchases, they are important nonetheless. Just consider all of the other areas that are affected. Home building generates substantial economic local activity, including new income and jobs for residents, and additional revenue for local governments, notes the National Association of Home Builders.
 

 · National Association of Realtors

 
Realtors especially benefit from upticks in the housing industry. The group that represents them, the National Association of Realtors, reported that existing-home sales sprang ahead in May to their highest pace in almost a decade, while the uptick in demand this spring amidst lagging supply levels pushed the median sales price to an all-time high. Also, all major regions except for the Midwest, saw strong sales increases last month.

The group reported that total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.8% to a seasonally adjusted annual rate of 5.53 million in May from a downwardly revised 5.43 million in April. With last month’s gain, sales are now up 4.5% from May 2015, when they were 5.29 million. Sales are at their highest annual pace since February 2007, when sales totaled 5.79 million. As you recall, that was right before the 2008 housing industry collapse.
 

 · Home Depot strengths

 
Home Depot got a boost this week, partly due the strengthening of the housing market. Nomura Securities upgraded the company to “buy” from “neutral.” Analyst Jessica Schoen Mace said:

“The biggest change in our position from our former thesis is the previous notion that slowing home price growth posed a great risk to Home Depot’s comp. After the [year over year] increase in home price growth slowed to 4.4% and 5.6% in 2014 and 2015 from 13.5% in 2013, Home Depot’s comps were still solidly positive, including a high-single-digit increase in the U.S. in 2015.”

Nomura still expects home prices to decelerate, which is an assumption also held by Home Depot. However, any positive growth would be a tailwind. It is one of several factors that affect the contribution from housing to HD’s sales opportunity, including housing formation, turnover, and aging housing stock, Schoen Mace said.
 

 · Housing builders enjoyed strong first quarter

 
KB Homes’ shares climbed this week, partly due to it reporting second quarter earnings that beat estimates. It reported earnings per share of $.17 versus analysts’ estimates of $.14. Revenue was up 30% to $811 million for the quarter.

In reporting earnings, the company’s CEO Jeffrey Mezger said its officials were encouraged by the continued improvement in housing market conditions across the country. Also encouraging is the recent increase in participation from first-time homebuyers, which have historically been KB Homes’ primary customer segment.

The company believes it is well-positioned to leverage its strength in serving the demand from first-time homebuyers with dynamic product offerings. With favorable market trends and progressive financials and operations in the first half of the year, the company believes it has positive momentum for the rest of the year.
Lenner homes, the second-largest homebuilder behind D.H. Horton, also beat analysts’ estimates when it reported second quarter earnings this week. Its EPS came in at $.95 versus analysts’ estimates of $.86. Revenue was up 15% to $2.7 billion.

The company noted a somewhat interesting happening that stifled growth in one city in particular. It said that its decision called “Homebuilding Houston and Homebuilding Other” experienced a decrease in home deliveries in Houston, which was primarily due to less demand driven by volatility in the energy sector.

Federal Reserve Chair Janet Yellen delivered her semi-annual notes to Congress this week, and said housing has continued to recover gradually, aided by income gains and the very low level of mortgage rates.

All of these factors contribute to the rational that there are several long-term investment opportunities for the housing sector right now.




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Posted by TwillyD June 22, 2016
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Finding Bargain Bonds in a Low-yield Environment


The low interest rate environment may be around for some time to come as the Federal Reserve earlier this year announced that it would likely not raise interest rates again this year and maybe even wait until 2018. I think that’s a stretch; this year or next seems more like it. But with the slowing job market ad the pending possible exit of Britain from the EU, it may be some time. Considering how low yields are right now, the thought of finding deeply discounted municipal bonds may seem unreasonable. For the determined investor, however, there are some buying opportunities that could be worth their wild.
 

 · Price Yield Relationshipe

 
When interest rates rise, bond prices fall and when interest rates fall, bond prices rise. The prices change in order for bond yields to stay in line with the yields of bonds newly sold in the primary and those being traded in the secondary market.

To determine if a bond is a bargain or discount, look at their par value. Bonds that trade, or are sold, at prices below their par values are considered discount bonds. Bonds trading above their par values are trading at a premium.
 

 · Where to Shop

 
One of the best places to shop for discount bonds is the secondary market. This is because bond prices are typically much lower here than they are in the primary market. This is especially true when rates are on the rise.

A caveat to buying discount bonds in the secondary market is the tax implications. When they are redeemed, they may be taxed at the capital gains rate.
 

 · When to Shop

 
The best time to shop for bargain bonds is when there is a lot of supply in the market. Issuers have to settle for paying higher interest rates because they know investors have a lot to choose from. The opposite is the case when there is not a lot of supply in the market.
 

 · Zero-coupon Bonds

 
Investors who can stand to wait 20 or 30 years to reap returns from their investment may consider zero-coupon bonds, which are typically available in the secondary market. This type of bond trades and is sold at deep discounts because it only pays interest at maturity instead of over time.
 

 · Bargains Not Just Junk Bonds

 
When interest rates are as low as they are now, investors may have to do more work, and make more sacrifices to find bargain bonds. One way to find these bonds is to be willing to take on more risk. This doesn’t have to mean jumping right into junk bonds or bonds that have below investment grade ratings. You may find investment-grade issuers that are facing financial problems that are willing to sell their bonds at lower prices and offer higher yields.
 

 · Fiscal Pressuress

 
To get some insight into an issuer’s credit quality, begin with their bond rating reports. Rating agencies put out warnings on issuers prior to downgrading them by either placing them on their watchlists for a downgrade or changing their ratings outlook to negative. If the rating is placed on watchlist, the issuer is under review for a potential downgrade within the three to six months. If the outlook is changed, the rating agency will likely take no action for at least six months.

Having this knowledge can help you gauge whether or not the issuer is in truly dire straits with great fear of default, or if its situation simply stems from needing to raise more revenues to cover their debts. If this issue is planning a new money deal or a refunding, they also may be more likely to offer bonds at lower prices.

Keep in the mind the that ratings information can also have positive effect on an issuer. Issuers that are improving their financial bottom lines can have an upgrade or stable or positive outlook change in store. This would cause their bonds to trade at a premium.




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Slowing Job Growth, Low Inflation Make Likelihood for Rate Hike Doubtful


Fed Chair Janet Yellen may not think the time is right to raise interest rates, but many retirees and other savers, would beg to differ. They say the time is right, and that it has been right for years.

The low interest rate environment has impacted these groups perhaps more than any other. Those who’ve saved using traditional types of vehicles, such as a CDs or savings accounts, can be the equivalent of putting their money under the mattress because the amount of return on saving through such vehicles is so low.

While Yellen frets over the overall health of the economy in determining when it will be healthy enough to sustain a rate hike, savers have some savings instruments they can use to increase their returns.

Before we get into those vehicles, let’s review some of the factors that have led to this low interest rate environment.
 

 · Semi-annual testimonial

 
This week, Yellen was on Capitol Hill to update lawmakers on a wide array of financial issues. She explained that while the economy showed signs of improvement, such as an improved unemployment rate. Still she remained cautious because hiring was slowing.

She told members of the Senate Banking Committee that there were a number of different metrics over the last several months that suggest a loss of momentum in terms of the pace of improvement.

“We believe that will turn around, we expect it to turn around, but we are taking a cautious approach and watching very carefully to make sure that that expectation is borne out before we proceed to raise interest rates further,” Yellen said.

One good thing for savers that came from Yellen’s talk was that the Fed would not implement a negative interest rate policy. However, she acknowledged that the Fed does have the authority to do so.
 

 · Chance of hike this year

 
There could be two hikes this year, according to Yellen. However, it looks like one would be most likely and would likely not occur until after the November elections.

An immediate headwind is Brexit, which is the possibility of Britain leaving the European Union. The vote is set for Thursday. If voters decide to leave the EU, it could cause turmoil in the markets. This is the last thing the economy needs, and it could lessen the chance of a rate increase.

Some speculate that the Fed could announce a rate hike in July when it meets. However, the market, and investors, has learned to not put much stake into the rumor mill when it comes to the Fed and interest rates. It was thought that the monetary policy was set to raise rates this month. All eyes were on the May jobs report as being the nudge the Fed needed to raise rates. However, it sorely disappointed. Only 33,000 jobs were created; at least 240,000 had been expected
 

 · So what a saver to do?

 
Instead of watching all of these metrics to determine when, and if, the dovish Fed will raise interest, savers should consider some of the following as ways to maximize their returns during this low interest rate environment.
– Dump the Government Bonds
Although government bonds have traditionally been great investments, that’s not the case in low interest rate environments. Instead, consider something like bond ladders. We told you most recently about this method in April. Bond ladder portfolios contain bonds with different maturities bonds and coupon payments. They can be reinvested according to the “rungs” that make up the ladder. For example, bonds that are reinvested in the longest rung of the ladder offer higher yields than those bonds that are reinvested in the shorter rungs.
– Stocks
Reallocate a portion of your income-oriented portfolio away from bonds and into stocks, according to Barrons. It states that a comparison of earnings and bond yields suggests that, at least on a relative basis, equities are still the better bargain. Seek out stocks from companies that offer dividends.
– Leveraged funds
Consider real estate investment trusts, or REITS, that invest in mortgage-backed securities. These REITs are popular because they are known for their high dividend yields.

Also consider leveraged closed-end funds. They can thrive in low interest rate environments. However, investors must be aware of the risks, so it is best to discuss this option with your financial advisor.




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Posted by TwillyD June 21, 2016
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Like It or Not; Brexit Referendum is Coming

Like It or Not; Brexit Referendum is Coming

You’ve likely heard about Brexit by now, and the rhetoric over it is ramping up considerably. In this piece, I’ll give you some tips about how you can play the market in the wake of the historic vote.

 

 · First, let’s go over what exactly is Brexit

 
Brexit is an abbreviation of British exit. To decide whether Britain should leave or remain in the European Union, a referendum is being held on Thursday, June 23.
Observers seem equally divided about whether voters will approve the exit, but they are fairly equal over who will be hurt by it.
 

 · Sectors that could be affected

 
Jamie Dimon, the CEO and Chairman JPMorgan (NYSE: JPM), said his bank has more than 16,000 employees in Britain. That means that 4,000 workers may have to move from the U.K. That could hurt the British economy, and be a headache for the bank. Other U.S. banks may have to deal with this, and they include Citigroup (NYSE: C) and Morgan Stanley (NYSE: MS)

Banks have already faced global uncertainty, and there are concerns that will increase this week and lead to volatility. Then there is the release of the results of annual stress tests by the Federal Reserves, also on June 23.

Retailers, insurers, other financial sectors and property-related stocks may not be affected as much.

A vote to leave the EU could cost banks billions of dollars, if they lose a key right known as “pass porting,” according to Market Watch.
 

 · Risk companies

 
Traders note that companies with high sales exposure to the U.K, like eBay (NYSE: EBAY), Xerox (NYSE:XRX) and Ford (NYSE: F), which gets 18% of its revenues from the U.K.

Bloomberg and J.P. Morgan found that Penske Automotive Group (NYSE: PAG) gets the largest chunk of its revenue from Britain — 33.4%.

Coca-Cola Bottling, which manufactures in the U.K., Abercrombie & Fitch, Gap, Delfy, Invesco, and Walmart are also heavily exposed to Britain and likely to suffer in the event of a Brexit.
 

 · What if they remain

 

If Brits vote to leave the EU, government officials will have two years to change their minds. Leaving the EU would shift the U.K.’s trading position to other foreign governments.

This time of uncertainty over whether the Brits will decide to go back (if they exit) is the issue. One of the worst things for the markets is uncertainty. So during this two years in which market players won’t know what Britain will do could be a period of marked volatility.

If the people of Britain vote to remain in the EU, investors should make sure their portfolios are balanced by reestablishing their assets so they are back up to normal levels.

Also, avoid making short-term investing decisions if Brexit becomes reality, and Britain exits the EU. Hold your positions, if you can, for the long-term.

Morgan Stanley pointed out some good issues that investors need to watch out for:

• The bank calculates a 30% probability that Britain will leave the EU. Based on these numbers, the bank sees that numerous assets, seen in the table above, "reflect less risk premium than we think is warranted." In other words, many places are not calculating enough risk into these assets.
• The pound and the euro will be hit on a Leave vote, but even if Britain decides to stay in the EU, there will be only "modest gains." Morgan Stanley expects the pound "to weaken immediately on a vote to Leave, but by year-end we think Euro could weaken even more."
• US equities are a better buy for investors right now.
• The European Central Bank's corporate bond purchase programme has "reduced sensitivity" to a Brexit, and therefore European corporate credit "has the most balanced risk/reward." But the programme hasn't mitigated Brexit risks completely.
• A Leave vote won't make it easy for the Bank of England's Monetary Policy Committee to ease credit conditions for the market.




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Posted by TwillyD June 20, 2016
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Redstone Keeps His Word To Replace Viacom Board


UPDATE: On Thursday, June 23, the judge overseeing the case about the Viacom directors being replaced by Sumner Redstone has ruled they can remain for now, according to CNBC.

It seems that Sumner Redstone is making good on his threat to rid the current members of Viacom’s (NYSE: VIAB) board of directors.

Now let’s see who he will choose to be on the board. I think that he will do well to get rid of the failing Paramount Pictures. And going further to recombine with CBS (NYSE: CBS) would be the icing on the cake.

Earlier this month, we wrote about the turmoil going on between Redstone, who is the controlling shareholder, and members of the board. Specifically, Redstone, and his daughter Shari, took issue with Viacom Chief Executive Philippe Dauman and board member George Abrams.

Shari. She’s thought to be pulling the strings, as opponents of the changes charge that the 93-year-old Sumner Redstone may be making such dramatic decisions because of a diminished mental capacity.
The lawsuit
Dauman and Abrams had vowed to sue Redstone if they were removed. Redstone owns roughly 80% of the company National Amazements, which gives him controlling voting stake in Viacom and CBS.

In addition to Paramount, Viacom operates BET, MTV, Comedy Central, Nickelodeon and VH1.
 

 · Change needed

 
Look no further than the company’s latest earnings report, which was released on Friday. They were for the second quarter of 2016. Quarterly revenues declined 3% to $3 billion. Media Networks revenues were $2.38 billion, a decline of 3%.

Domestic advertising revenues decreased 5%, as pricing increases were more than offset by softer ratings at some of its networks. International advertising revenues declined 1%.

Viacom’s stock traded on news that the board replacements. Also, RBC upgraded Viacom to sector perform from underperform. It also raised the price target on the share price to $45 from $34.

Guidance issued by the company for the third quarter indicates it will decline.
According to CNBC, Viacom’s Class B shares have performed well this year, trading nearly 8% higher. Still they are more than 33% lower over the past 12 months.
The future

Viacom is looking to Paramount’s release of Teenage Mutant Turtles: Out of the shadows and Star Trek to help it line its coffers. However, Teenage Mutant Turtles is having a tough time of it. The release of the Star Trek Beyond movie because of its strong following of “Trekkies.” It’s difficult to count on that to help Paramount financially.

Crying foul over their removal, and the negative consequences they perceive the changes will have on the company, Dauman and Abrams are vowing to fight to get their positions back. A hearing over the matter has been set for June 7 over the matter.

As I said in May, given that so much is up in the air for Viacom, I would not invest it in in the short-term. While I said a long-term play would be more appropriate to allow time, I don’t think so now. The stock is cheap, but it could be a value trap. Also, it could be a takeover target, but who would touch it now.




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Twilio, Several Other IPOs on Tap This Week


Twilio opened Thursday, June 23, at $15 a share. During intraday trading it surged 92% above that price and closed at $28.79. It’s market cap is valued at $2 billion.

As you know, there have been few opportunities for investors to get in on initial public offerings this year. However, that will change next week as four companies, with various sized offerings will be in the market.

The market has been especially dry for Silicon Valley tech companies going public, but Twilio will change that. The cloud communications company is expected to well, which could spur other tech companies to go public.

Twilio is looking to raise up to $130 million, with 10 million shares priced between $12 and $14. Twilio is one of the bright stars, startup companies in the tech sector right now. It’s been reported that Twilio’s offering will be the first initial public offering from the tech sector in six months. The last IPO from Silicon Valley was Square, the payment systems company.

One of the reasons tech companies have been slow to go public has to do with so-called unicorn valuations, which refer to startup corporations with valuations of at least $1 billion. Twilio’s valuation is $1 billion.

Twilio is fast-growing due to the type technology it offers. It is aimed at software developers and some of the companies that use it are Facebook and Uber. They use Twilio’s technology to add voice or text communications features to their apps.

While Twilio’s market cap is estimated to be $1 billion, its profits are virtually non-existent. Its annual revenues rose to $167 in last year. That’s impressive considering it was just $50 million in 2013.

Through six rounds of funding, from 23 investors, it achieved $233 million of funding. Twilio will trade on the NASDAQ under the ticker TWLO.

Angel investors have gone to town with tech companies, which has caused their valuations to reach these billion-dollar levels. This has made them unattractive to investors who trade stocks in the public market.

Many startups have many reluctant to go public because they may have to discount their valuations, which many are unwilling to do.

Roger Lee, a general partner with Battery Ventures, said he doesn’t expect a surge of tech IPOs to immediately follow Twilio. But to break an IPO market out of a slump, one or two brave companies must go first and test the waters, he said.

“There are at least 20 or more really good companies that could go public in the coming few quarters here, and if there is a successful IPO from Twilio, I wouldn’t be surprised to see them push forward with their own IPOs,” Lee said. “That’s why everyone’s watching.”

Selecta Biosciences plans to raise up to $75 million in its IPO. The biotech company uses synthetic vaccine nanoparticles to develop treatments for rare and serious diseases. Selecta reported $6 million in revenue for a loss of $3.88 a share for 2015. It plans to trade on the NASDAQ under the ticker SELB.

Gemphire Therapeutics will seek to raise $45 million through the offering of 3.8 million shares. It plans to raise $45 million at a price between $11 and $13 a share. About 22% of the shares, or $10 million worth, will be purchased by insiders. The company develops therapies for the cardiovascular disease dyslipidemia.

Tactile Systems Technology, which sells at-home compression therapy devices for vascular swelling, plans to raise $60 million by offering four million shares. The price range will be between $14 and $16.

The Minneapolis-based company plans to raise $60 million by offering 4.0 million shares at a price range of $14 to $16. At the midpoint of the proposed range, Tactile Systems Technology would command a fully diluted market value of $262 million.




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Smith & Wesson Among Gun Makers Whose Sales Soared Last Week

Smith & Wesson Among Gun Makers Whose Sales Soared Last Week

As the nation mourns the Orlando terrorist attack by a man who was radicalized and pledged his allegiance to ISIS, Smith & Wesson is enjoying a spike in sales. In fact, the gun-maker’s surged to just a few dollars; of its new 52-week high of $30.44.

Gun-maker Smith & Wesson (NASDAQ: SWHC) rose more than 7% during intraday trading on Friday. Two factors contributed to the stock’s soar.

One is the gun-maker beat analysts’ estimates for its fourth quarter. Revenue in the fourth quarter reached $211 million, representing 22% growth. Earnings per share can in at $.66. Analysts were expecting just $.54. Gross margin for the quarter was 41.6% compared with 37.1% for the comparable quarter last year.

However, guidance was $.51 to $.53. On the news, Smith & Wesson stock soared.
The second reason the stock is up is due to it being upgrade to buy from hold. Craig Hallum has a price target of between $26 and $28. Wedbush reiterated its neutral rating on the stock earlier this month. Its price target is between $26 and $23.

James Debney, Smith & Wesson President and Chief Executive Officer, commented, “Our solid fourth quarter and full year performance further validates our vision, which is to become the leading provider of quality products for the shooting, hunting and rugged outdoor enthusiast.”

Debney boasted that the company continued to execute on its long-term strategy, while delivering financial and operational results that set a number of new company records. Its firearms division, enjoyed several important new product introductions and continued to leverage its flexible manufacturing model, allowing the company to benefit from strong consumer demand.

The company expects fiscal 2017 to have a strong balance sheet, combined with its track record of successful acquisitions. That positions the company well for an expanding role in the market for products for shooting, hunting, and rugged outdoor enthusiasts, according to Debney.

Debney’s positivity about fiscal 2017 reflects increased sales due to the renewed calls for gun control. Sales have spiked following previous massacres. The shooting in Orlando claimed 49 lives.

One reason the stock may be surging is because analysts believe the outlook provided by management is conservative, given it hasn’t accounted for a potential spike in demand that would come after the Orlando shooting.

However,Yahoo Finance quoted the company’s CFO Jeff Buchanan as saying, “basically, this guidance does not take into account any surge, any potential spike in consumer demand as a result of any

Gross margin performance remained strong throughout fiscal 2016, driven by robust volumes in our firearms division and favorably impacted by the strong gross margins in our accessories division.

In fiscal 2016, Buchanan said the company we generated $168.6 million in operating cash flow, establishing a new company record. We ended the year with cash and cash equivalents totaling $191.3 million and total bank debt and Senior Notes of $175.3 million, leaving us with zero net debt. In fiscal 2017, we expect to use the strength of our balance sheet, including our unused $175 million revolving line of credit, to fuel growth opportunities, both organic and inorganic.”of that. He added that with regard to what happened in Orlando, any impact on demand is unknown and therefore not included in its guidance.

Shares of sellers were up many of the companies last week. Zacks reported that Sturm Ruger & Co. (NYSE: RGR) climbed to 8.5% after Orlando shooting. Vista Outdoor Inc. (NYSE: VSTO), which makes ammunition was up roughly .19%. rose about 0.19%.

Sporting goods retailer Sportsman’s Warehouse Holdings, Inc. (NASDAQ: SPWH) saw its shares fall 2.55%. Cabela’s Inc. (NYSE: CAB)l shares fell 1.59%.




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IEX: The new stock exchange aimed to slow down high frequency trading


This post was originally published at New York Times.
 

IEX stock exchange floor
The IEX office/trading floor, located in downtown Manhattan. Credit Cole Wilson for The New York Times

America is getting a new stock exchange from the most prominent critics of high-frequency trading.

After months of delays and a brutal lobbying battle that divided Wall Street, the IEX Group won approval on Friday from the Securities and Exchange Commission to become the nation’s 13th official stock exchange.

IEX is run by the people at the center of the Michael Lewis book, “Flash Boys: A Wall Street Revolt,” which profiles the early efforts of the IEX team to create a trading exchange that would be somewhat shielded from high-frequency traders.

Other exchanges and trading firms had urged the S.E.C. to reject the IEX application to become an exchange.

Opponents of IEX, including the other stock exchanges, have argued that the structure of the new exchange will add unnecessary new complexities into an already complex stock market, and potentially end up hurting small investors.

But the three S.E.C. commissioners all voted on Friday to approve the IEX exchange, with one commissioner, Michael S. Piwowar, a Republican, dissenting on a few points.

“Today’s actions promote competition and innovation, which our equity markets depend on to continue to deliver robust, efficient service to both retail and institutional investors,” Mary Jo White, the S.E.C. chairwoman, said in a statement.

The most novel and controversial feature of the IEX exchange is a so-called speed bump that would slow down trading slightly to throw off traders that rely only on speed.

The speed bump slows trades down by only 350 microseconds — or millionths of a second — but that is an eternity in a stock exchange universe in which computers can buy and sell stocks in nanoseconds — or billionths of a second.

The Nasdaq, and other existing exchanges, have said that the IEX’s speed bump will violate rules mandating that exchanges make their prices available to all parties at the same time.

IEX’s critics have also said that the speed bump could add new complications into a stock market infrastructure that is already criticized for its complexity.

In a statement, the S.E.C. said that the commissioners “determined that a small delay will not prevent investors from accessing stock prices in a fair and efficient manner.”

The S.E.C. did say, though, that within two years it will do a study to examine whether the delays lead to problems in the markets.

If nothing else, the approval of the exchange will provide an opportunity to test the many competing theories about what impact the IEX’s speed bump will have on the pattern of trading.

The IEX has been a flash point in the broader debate over technological changes that have altered the basic functioning of the American stock markets over the last two decades.

IEX won support — and financial backing — from several large mutual fund companies, which said that the exchange would help them trade more cheaply and efficiently, as well as from hundreds of small investors, many of whom read “Flash Boys” and wrote in to the S.E.C.

Brad Katsuyama, the chief executive of IEX, said on Friday night that the company was “grateful and humbled by the support we’ve received from the investor community, without it, we may have faced a different result.”

In addition to the speed bump, the IEX has said it will not offer the same fees or rebates that other exchanges do to attract traders, a common practice at other exchanges that has been criticized for distorting trading incentives. The IEX also offers fewer complicated ways to enter trades than other exchanges, in an effort to simplify trading.

Mr. Katsuyama has argued throughout the application process that IEX would provide a market-based solution to the problems created by high-frequency trading rather than requiring the S.E.C. to change the rules governing the markets.

The other exchanges have complained that the IEX was essentially asking to be exempt from rules that governed them.

In a letter written in May, Nasdaq’s lawyers suggested that the S.E.C. could face a lawsuit if it approved the IEX application. A spokesman for Nasdaq said on Friday that the exchange company had no comment on the S.E.C.’s decision.

Larry Tabb, a market analyst with the Tabb Group, said the IEX speed bump could end up benefiting more sophisticated traders, like high-frequency traders, who can find ways to take advantage of the small delays.

“It hurts the broad middle who may not have access to the best tools,” Mr. Tabb said.

The hedge fund and trading firm Citadel has been one of the most outspoken critics of the IEX application. On Friday, a spokeswoman for Citadel said that the S.E.C.’s decision “will test and potentially reverse the gains in fairness, efficiency and transparency that have been made to our markets over the last decade. We must be vigilant to identify unintended consequences.”

Another relatively new American stock exchange company, BATS Global Markets, initially supported the IEX application, but earlier this year withdrew its support, pointing to “gross omissions of fact” by IEX. BATS wrote that the problems “call into question the applicant’s professional judgment.”

On Friday, a BATS spokesman, Randy Williams, said that the company “congratulates IEX and appreciates the significant changes they made to their application to address industry concerns.”

IEX has already been operating as a private trading pool and has recently been attracting about 1.6 percent of all daily trading volume.




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How To Start An Online Trading Business?


It is an appealing idea for many people to start with online trading. You are your own boss, set your own schedule and work from the convenience of home with unlimited income potential. Adding to the advantages anyone with a laptop and working internet connection can give it a try by just opening an easy trading account with the broker of your choice. There are no degrees, special training or experience needed in this profession unlike many others.

 

 · Online trading is not as easy as it seems

 

But many people often fail to acknowledge the financial, emotional and timely commitments which are required to create a successful online trading business with XTrade or any other broker. Here are some of the quickest facts about trading-

 

  • There is no way to eliminate the risk in trading completely
  • There is no trading system which provides you win 100 percent of the time
  • Even you are a rock star trader, you have to face some losing trades at times
  • With a small trading account it takes time to get rich
  • It is not a way to become rich overnight and it takes time to gain substantial income

 

The ease with which you are able to start trading does not imply that it is easy to become a profitable and successful trader. Many of the online traders who fail within the first year do so because they have not developed any type of logical plan and strategies in place. Any business with a lack of planning is likely to fail.

 

 · It needs planning, research and discipline

 

As a business, it requires constant research, discipline and evaluation. There is no guarantee in this and you might work a number of hours and might lose money in the end. Anyone who joins this business must be ready to accept these challenges and plan every move in advance to get the best results.

Ask yourself this before you start with your adventure:

  • Am I motivated and driven for success?
  • How to handle the losses?
  • Do I have time for learning the trading business?
  • Do I have a support?
  • Do I have realistic expectations?
  • How to deal with stress?

 
So, you need to ask yourself the questions mentioned above and then decide what would be the best course of action. Whether you become a part time or full time trader, you should give some time to research and plan the trading business you have. This profession is not the profession where you achieve all the skills overnight. It takes some time in learning the skills of trading, which pays off in the long run. Traders who have realistic expectations and who treat online trading as a business are more likely to succeed and beat the odds.
 
 




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