Filed under: Products and services, Industry, Consumer experience, Israel

Israeli cell phone carrier Cellcom Israel Ltd. (NYSE: CEL) is trading higher on almost 4 times average daily volume. While no reason has been given for the surge in volume, this weekend is extremely important for the Israel cell phone industry. Starting in December, number portability takes effect; meaning that customers will be free to take their phone numbers with them to any carrier they choose. No one is quite sure what will happen, but the anticipated marketing onslaught to persuade consumers to switch carriers, hasn’t really materialized.

Three weeks ago the company reported a rise in the number of subscribers and a 47 percent jump in income from data and content and that revenue rose 7.2 percent to $392 million. Net profit rose more than expected in the third quarter, boosted by cost cuts and sharply higher revenue from data and content services. Israel’s largest mobile phone operator posted net profit of $67 million, or 68 cents per diluted share, compared with $33 million or 34 cents a share a year earlier.

With a PE of 15.50 and a dividend yield of 8.5%, the stock is an attractive play for investors who want some exposure to the Israeli domestic economy.

But it’s important to keep in mind that with cellular penetration of 120% and potential surging marketing costs just to keep existing customers, let alone trying to get new ones, Cellcom may be in for some volatility.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 11/29/07.

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Filed under: Earnings reports, Forecasts, Citigroup Inc. (C), Economic data

Wall Street has to wonder why so many structured investment vehicles are being downgraded now? Are they really worth so much less than they were a month or two months ago? Since many of their assets do not trade due to a lack of market liquidity, there may never be an answer.

According to The Wall Street Journal (subscription required), “Debt-rating agency Moody’s Investors Service, signaling a new turn for the worse for some bank-affiliated funds, said it downgraded or put on review debt totaling $119 billion that was issued by structured investment vehicles that have been paralyzed by lack of investor appetite.” The value of many of the SIV assets linked to mortgages dropped by 22% between October 19 and November 21.

Citigroup (NYSE: C) has a continuing problem here. The financial paper adds, “the drop in the market values and the inability to finance the SIV debt is expected to put new pressure on banks such as Citigroup to support the billions of dollars in debt that SIVs face having to pay in coming months.”

All of this raises the question of whether the $7.5 billion stake that Citi sold to an investment arm of the Abu Dhabi government will be enough to support the bank’s need to improve its balance sheet, or whether it will have to raise additional funds. It begs the question of who would want the job of being Citi CEO, or whether chairman Robert Rubin will have to step into the spot in an attempt to get back some market confidence for the bank.

One thing is virtually certain. Some of the SIVs are near failure. HSBC (NYSE: HBC) took $45 billion in SIVs onto its balance sheet. The bank would not have done this unless an extreme measure was required. The same decision may have to be made a Citi. At $33, down from a 52-week high of $57, many investors think the bank’s stock has bottomed.

That would be a mistake.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Good news, Products and services, Consumer experience, Competitive strategy, General Motors (GM)

This post is part of AOL Money & Finance’s Best & Worst of 2007. Be sure to cast your vote for the hottest car of the year.

What is it about a car that makes it “hot” for you? Is it slinky lines, European styling and a deep throaty growl? Perhaps you prefer a ride with all the luxury appointments: leather, navigation, DVD players, and surround sound. Are you the kind of driver that seeks out a pavement-ripping roadster with more horsepower per pound than a F-1 formula racer, or are you more into the touring feel? Whatever your criteria for choosing a hot car, we’re asking for your opinions on the following four vehicles, and we like to know which one you’d choose as Hottest Car of the Year for 2007.

There is a bit of a shuffle these days in regard to when manufacturers release their year models, so for comparison I am using what I believe is the latest available production model for each of the four competitors. Please feel free to consider more than just one model year as you make your judgment. I want to know which vehicle make and model you think owns the road.

Continue reading Best & Worst of 2007: Hottest cars of the year

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Filed under: Bank of New York (BK), Comfort Zone Investing, Stocks to Buy, Housing

Ted Allrich is the founder of The Online Investor and author of Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he offers advice to investors who are just getting started.

If you own a bank stock, you know how brutal the stock market can be. Many are down more than 50% as the subprime mortgage mess continues to shock all investors. But some banks are being punished for being a bank, not for mortgages they don’t even own.

Not all banks are the same. Most banks make mortgage loans to several different kinds of buyers for different types of properties: existing homes, new construction, and/or commercial buildings. Or they only make loans to well-qualified buyers, ones with good income and high FICO scores (your credit score). Still others make no mortgages at all, have a diversified revenue stream and are only guilty of being called banks. Finally, there are banks that have a large percentage of their revenues from international lending. Smart investors will look for all of these types and start investing a small amount in several of them, then wait for the rally that will inevitably come.

Continue reading Comfort Zone Investing: Don’t be afraid of bank stocks

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Filed under: Politics, Housing, Federal Reserve

The New York Times reports that the market rally last week was due to investor’s confidence that the Bush administration is stepping in to bail out the economy. I don’t buy this explanation and think that the market moves because of what big investors are doing — information that does not get into the media. Moreover, based on its track record, I would conclude that the Bush Put — as I’d call the Times’ notion — is likely to be just as effective as the Mission Accomplished banner he used as a prop in May 2003.

To explain this, here’s some recent history. In May 2003 George Bush landed a jet on an aircraft carrier and strutted like a peacock in front of a banner blaring “Mission Accomplished.” That was over four years ago and that banner still looks like it’s premature. By contrast, during the reign of Fed Chair Alan Greenspan, the market formed the concept of the Greenspan Put — the execution of Fed policies that limited investor’s downside risk — because he successfully bailed out investors for their excesses.

This week my guess is that the market rallied in response to two moves: Fed Chair Bernanke’s comments on flexibility — hinting at further rate cuts on December 11th — and Treasury Secretary Paulson’s announcement of negotiations with banks to keep some mortgage rates from resetting upwards on some of the 1.5 million nonprime mortgages valued at $331 billion that will reset by the end of 2008. Since Bush seems to be coordinating the responses to the latest economic turmoil, I am elevating the market rescue efforts to the Oval Office — hence the Bush Put.

Continue reading Is the Bush Put’s mission accomplished?

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Filed under: Personal finance

Charging the rent to your credit card sounds insane — it seems like it would be the eighth deadly sin, tied with going to a payday lender to get gambling money.

But as the New York Times points out, the strategy can be great if you’re in good financial shape: If you pay off the balance each month you pay no interest, and you can rack up rewards on your credit card — possibly round-trip airfare anywhere in the country each year if you have high rent!

But there are some pitfalls: Because of the way FICO scores are calculated, drawing down a large percentage of your available credit, even if you pay it off each month, can hurt your score. So if paying your rent by credit would leave you with little additional credit available, it might be a bad idea — something that you cost you thousands on your mortgage when you do buy your own home.

The Times also points out, somewhat obviously, that if you can’t afford to pay off your rent in cash each month, you shouldn’t put it on your card. But if you can’t afford to pay your rent out of your monthly income, that’s a whole other problem…

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Filed under: Rumors, Law, Television, Scandals, Videos

This post is part of AOL Money & Finance’s Best & Worst of 2007. Be sure to cast your vote for the dumbest celebrity feud of the year.

Back in the day of the (fictional) Capulets and Montegues or the (real) Hatfields and McCoys, “feuds” were not something to be taken lightly. They separated men from boys and resulted in certain bloodshed. These days, tabloids will report on a new “celebrity feud” each week, as our nation’s most rich and famous lash out at one another in the press or on live television.

Sometimes, there are justified reasons for unrest among pop culture’s elite … a cuckolding, perhaps, or a vicious custody battle (I blame Alec Baldwin’s recent poor judgment on stress, but maybe he gets off lightly in my book because he’s so brilliant on 30 Rock). At any rate, here’s some of the most high-profile fights that took center stage in 2007.

The American public twice served as judge and jury for Rosie O’Donnell this year. Late last year, the comedienne found herself in a war of words with “The Donald” (Trump), after O’Donnell criticized the billionaire’s handling of a scandal involving the Miss USA Pageant, of which Trump holds the rights. Name-calling and mudslinging ensued, and O’Donnell colleague Barbara Walters caught some shrapnel. Months later, on the May 23 episode of The View — on which the liberally minded Rosie served as one of four co-hosts — she got into a heated (split-screen!) debate with Elisabeth Hasselbeck, the “conservative” member of the hosting panel. Tempers flared and Rosie ultimately walked out on her contract with the program, which was set to expire a few months later anyway. Whoopi Goldberg and Sherri Shepherd have since picked up hosting duties.

Continue reading Best & Worst of 2007: Dumbest celebrity ‘feuds’

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Filed under: Newcastle Investment (NCT), Raytheon Company (RTN)

The holiday season is upon us and that translates to shopping season. Generally speaking, I hate shopping and refrain from getting anywhere near a shopping mall or mingling with all the shop-o-holics. However, shopping for stocks is different and it is always the season for that.

Finding the best stock values for next year would be a great gift for everyone that is paying attention to my ramblings, that is, if I am able to maintain my track record. This mission was first shared in Serious Money: Hot stocks for a cool year — finding 8 for 2008. The heart of the story, the possible stocks, are posted below again, because this is a running story. I have bolded the new info as the story builds and I examine things more closely. But before we get to that review I am adding two companies.

The first to be added, and a candidate that has a good chance to be included in the final eight is Newcastle Investment Corp (NYSE: NCT). For the detailed review read yesterday’s story Chasing Value: Newcastle’s 21.9% yield too good to be true?. I will summarize here by letting you know, I did what homework I could as well as check out NCT’s recent conference call. This company has averaged an 8.8% yield over the last five years. However, today because the stock is now a third of it’s recent price the yield has jumped to 21.9%. Newcastle is standing by this dividend. Actually I think they have to because REITS are required to pay out most of their profits and they have earned 23% over the last fiscal year.

The stock is down because the underlying value of the collateral has gone soft in some cases, but mostly they have fallen victim to the generally poor market for various classes of loan packages, be they Alt-A, sub-prime CDO’s, or uncle Joe’s handshake. That said, NCT’s cash flow seems fine, it only has 10% of its portfolio in residential real estate and of that they claim to have a 60 day delinquency rate of less than 1%. NCT also expects $1 billion of loan repayments over the next year. The PEG ratio is 0.15 and they are trading at a book value of 0.74. At the conference call they claimed a book value after being marked-to-market of $15 to $16 a share. This is a strong value proposition.

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Continue reading Holiday shopping? Buy stocks, not clothes: searching for 8 for 2008

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Filed under: Motorola (MOT)

Even though his efforts to get on Motorola, Inc. (NYSE: MOT) board of directors came up short, Carl Icahn has been vindicated, in a way. The stock has continued to lag but today, Ed Zander, the target of much of Icahn’s vitriol has stepped down as CEO of the company.

Never one to miss an opportunity to dance on an enemy of shareholder value’s grave, Icahn put out a press release applauding the move:

“I believe that the replacement of Ed Zander as CEO is a positive step for Motorola, but that the action of the Board was long past due. As I said at Motorola’s shareholder’s meeting last year, although I like Ed Zander personally, I never thought that he was the right man for the job at Motorola. Further, I believe that the steps announced today do not even begin to address the major problems at Motorola. In my opinion, Motorola should be split into separate companies: a mobile devices company; an enterprise mobility company; a connected home company; and a company focused on mobile networks infrastructure. In particular, I believe that the best opportunity for the mobile devices’ business to attract top flight management and to prosper and grow is to establish it as a stand alone business.”

With Zander out of the picture, Icahn’s plans may have a better shot at coming to fruition. The stock closed up more than 2% today.

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Filed under: After the bell, Good news, Middle East, Citigroup Inc. (C), Wachovia Corp (WB), Technical Analysis, Economic data, Wells Fargo (WFC), Commodities, Oil, DJIA, Housing, Federal Reserve

True, no one on the trading floor of the New York Stock Exchange Friday yelled, “It’s a return to the ‘Roaring 90s,’ “ but given the way the U.S. economy and the stock market have gone in 2007, it’s a start.

The Dow Jones Industrial Average closed Friday up 59.98 points to 13,371.71 - - hardly the stuff of a headline, but it was a technically-significant day.

The Dow’s accomplishment? On Friday the Dow closed above the critical 200-day moving average at 13,250.10 - - the toughest moving average to break - - for the third consecutive day. Technical analysts argue that three consecutive closes above the 200-day moving average is a bullish sign. [For background on the Dow and the 200-day moving average, click on this bloggingstocks link: “Fed be nimble, Fed be quick.”]

Hence, the Dow has cleared a major technical hurdle. The ‘three closes above 200′ does not guarantee that the rally will continue, but it is a step in the right direction.

Continue reading For DJIA, 3 up days and a technical hurdle cleared

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