INO.com Contributors Archives - Page 274 of 393

China: Signals From Dim Sum Bonds

Posted on September 2, 2017August 30, 2017 by Lior Alkalay

Lior Alkalay - INO.com Contributor

Over the past three years, a dark cloud has been looming large in China—a massive debt bubble. It seems that, with each bit of good news, whether it’s GDP growth hitting 6.9% for the second quarter in a row, exports climbing to 7.2% Year on Year or Retail Sales surging by 10.4%, the dark cloud of a looming debt crisis grows darker and more menacing. So, when investors suddenly find their appetite whetted for Offshore Chinese debt, one should sit up and take notice.

Chinese Offshore RMB bonds, amusingly nicknamed Dim Sum bonds, are relatively new in the market, existing only since 2007. The Dim Sums’ appeal is, that they trade on offshore markets, rather than in mainland China, thereby allowing investors to buy Chinese debt without the risk of interference from Chinese regulators. As a result, the performance of Dim Sum bonds reflects the sentiment of Chinese debt more accurately. Continue reading "China: Signals From Dim Sum Bonds" →

The Debt Storm Is Coming

Posted on September 1, 2017August 30, 2017 by Matt Thalman

While we can debate until we are blue in the face the actual ins and outs of what causes recessions, most would agree that high debt loads play a significant role. If we look back at the 2008-2009 recession, this is very true. Or the dot.com bubble bursting, debt played a large role. Even go a little further back into history and look at the 1929 stock market crash and subsequent recession, mostly fueled by margin trading (investors trading with borrowed money, i.e., using debt to fuel larger trades).

At this point, not many people are talking about the United States current debt levels. Not only is the U.S. government's debt level out of control, but more importantly consumer debt levels are also out of control, and that is likely the more concerning issue.

When consumer debt gets out of hand, first we begin to see increased levels of defaults. That leads to reduced levels of credit as the institutions who lend credit begin to tighten their requirements to borrow. With less available credit, consumers begin spending less on discretionary purchases because they either can't get credit or have maxed out what credit they did possess. Lower spending leads to lower profitability for consumer facing companies, which then leads to a reduced number of jobs in those sectors. Continue reading "The Debt Storm Is Coming" →

Disney's Long-Term Vision - Growth

Posted on August 30, 2017August 29, 2017 by Noah Kiedrowski

The Long-Term Vision – Growth and Direct to Consumer Offerings

The Walt Disney Company (NYSE:DIS) reported an information dense earnings report that included mixed numbers (as comparable numbers from the previous year were banner numbers), its vision for the future via streaming while cutting off Netflix (NFLX) in the process. As always, a conspicuous ESPN remained at the forefront of investors’ minds, serving as the root cause of this streaming initiative as profits and revenue from the Media Networks division have stalled out over the past few years. Simply put, Disney is going all-in on a Disney branded streaming service come 2019, more on that later. As investors digest the earnings report and fixate on the eroding Media Networks division, I think Disney is offering a long-term buying opportunity near ~$100 per share. Although ESPN makes up a disproportionate amount of the company’s revenue and income, all of its other franchises are posting robust growth hence Disney will be relying less on its ESPN franchise over the coming years. It’s noteworthy to highlight (when comparing year-end fiscal numbers) that in 2011 its Media Networks segment made up 70% of Disney’s income. That percentage has decreased to 49% at the end of 2016. It curtailed its Media Networks contribution to the company's income by 30% since 2011. Disney’s perpetual stock slump and roller coaster ride over the last two years has almost entirely been attributable to the decrease in ESPN subscribers and subsequent revenue slowdown. I feel too much of an emphasis is being placed on ESPN as it weighs less on overall profits. Disney is evolving to address this deteriorating business segment with initiatives put forth previously and doubling down during its recent conference call. Disney offers a compelling long-term investment opportunity considering the growth, pipeline, Media Networks remediation plan, diversity of its portfolio, share repurchase program and dividend growth. Continue reading "Disney's Long-Term Vision - Growth" →

Fed Can't Backtrack On Regulatory Reforms

Posted on August 29, 2017 by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates

I’ve been pretty harsh in this column on Federal Reserve monetary policy, but the one area that I haven’t written much about– financial regulation – is probably the main area where the Fed does deserve a lot of credit.

In her speech at the Jackson Hole symposium late last week, Fed Chair Janet Yellen probably disappointed a lot of market watchers for her failure to talk about interest rates or unwinding the Fed’s balance sheet. Instead, she spent most of her speech defending the Fed’s actions in the regulatory realm in the wake of the global financial crisis and pushed back against critics who want to roll back those regulations, including President Trump, who vowed that he wants to “do a big number” on Dodd-Frank.

If Yellen wants to be reappointed to her position by Trump when it ends in February, she certainly didn’t sound like it. Then again, making comments in opposition to Trump is hardly a heroic stance.

Still, she deserves credit for defending the Fed’s position on bank regulation, and the next Fed chair, whether it’s Yellen, Gary Cohn, or someone else, should stick with the current policy, which will go a long way toward keeping our banking system safe and secure and make sure that the global financial crisis doesn’t repeat itself. After all, if you can’t trust keeping your money in a bank, nothing else matters. Continue reading "Fed Can't Backtrack On Regulatory Reforms" →

Stocks To Watch Amid Gold's Rise

Posted on August 28, 2017 by Aibek Burabayev

Gold broke above both daily and monthly resistances, and we could witness a further strong move to the upside. In this post, I would like to find out if there are gold stocks with upside potential to follow the strengthening metal using my unique selection criteria.

When you buy stocks, you become shareholders of the company participating in the equity. That is why this time I decided to sort the gold stocks by ROE (return on equity) and chose the top 5 (in the table below) to analyze. The range includes stocks with a market cap over $300 million.

Table 1. Top Gold Stocks By Return-On-Equity (ROE)

Image courtesy of finviz.com

These top stocks tickers are ABX (Barrick Gold), SBGL (Sibanye Gold), IAG (IAMGOLD), GSS (Golden Star) and HMY (Harmony Gold Mining). Continue reading "Stocks To Watch Amid Gold's Rise" →

Category: INO.com Contributors