Filed under: Stocks to Buy

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Fluor is worth a review.

Fluor Corporation (NYSE: FLR) is one of the world’s largest engineering, procurement, construction and maintenance companies. The company oversees construction projects for a large range of industrial sectors worldwide, primarily in its core strengths: designing and building manufacturing facilities, refineries, pharmaceutical facilities, healthcare buildings, power plants, and telecommunications and transportation infrastructure.

Analysts see 20-25% revenue growth for F2008, after likely 15-18% revenue growth in F2007, driven by strong demand for oil and natural gas projects.

Continue reading Fluor is ready to fly

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Filed under: Other issues, Commodities, Oil

With oil treading-water well above the $90 mark, a production cut by the world’s largest cartel, OPEC, at its March 5 meeting would be “disruptive and scandalous,” according to one economist.

Economist Steve Affinito told BloggingStocks Monday the fact that oil surged more than $10 from a pullback to $86 after certain OPEC officials hinted at a spring production cut underscores the thin margin — or safety cushion — that exists between global oil supply and demand. Oil closed Monday up 42 cents to $99.23.

“OPEC says it’s concerned about rising oil inventories this spring due to the sluggish U.S. economy but it conveniently forgets the small safety cushion. If markets were so well supplied as they say, oil prices wouldn’t jump $5 or $10 every time an OPEC oil minister expresses the slightest concern about rising inventories,” Affinito said. “The fact remains that although oil markets may be ‘well supplied’ there’s very little margin for error or production break-downs in the international oil system.”

Continue reading Economist: March OPEC supply cut would be ‘disruptive, scandalous’

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Filed under: Politics, Presidential elections

Hillary Clinton must win by gargantuan margins in next week’s primaries in Ohio and Texas or else her campaign for the Democratic presidential nomination will be over, according to her husband former President Bill Clinton and other political pundits. The odds of that happening are daunting.

Polls show that Clinton, who has lost ten straight contests to Obama, is losing ground to the Illinois senator in Ohio and that she is virtually tied in Texas. Over the past few months, Clinton’s support has eroded among almost every demographic group and there is no sign that is going to change.

These days, Clinton exudes all of the charm of a middle school disciplinarian. Her recent outburst that Obama should be “ashamed” of himself for sending out misleading advertising mailers is a case in point. Factcheck.org, which argued that she has some valid points, argued that Clinton is no slouch in stretching the truth in her advertisements either:

Continue reading Hillary Clinton makes a last stand in Texas and Ohio

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Filed under: Forecasts, Economic data, Politics

What’s the new president - - Republican or Democrat — likely to face after taking the oath of office in 2009?

Daunting fiscal problems — and right at a time when Congress may have to consider more fiscal stimulus to jump-start the U.S. economy, one economist observed.

The biggest problem, economist Glen Langan said, will be the federal government’s budget deficit. The United States is on-track to record a $200 billion deficit in Fiscal 2009 and a $241 billion in Fiscal 2010 — and that’s if the U.S. economy doesn’t fall into a recession, Langan said, citing Congressional Budget Office data.

“The baseline CBO projections present a large budgetary task for the new president, but by itself it’s not an impossible one, absent a major recession. The problem is there’s no money available to tackle any other problems, including ones a Democratic president would address — health care, energy policy, education and infrastructure. And don’t forget the Iraq War, anti-terrorism efforts, and potential mortgage assistance programs,” Langan said. “If there aren’t changes to the tax code, given the current revenue structure and tax rates,to say the next president’s hands are tied regarding new programs, would be an understatement.”

Continue reading U.S. fiscal condition for 2009 president will hardly be ideal

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Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO), Technology

News over the weekend of two Detroit pension funds suing Yahoo (NASDAQ:YHOO) for rejecting Microsoft’s (NASDAQ:MSFT) $41.2 billion offer, is the first bit of sanity that has come out of this whole story.

The proposed class action, filed by veteran shareholder litigation firm Bernstein Litowitz Berger & Grossman, takes Yahoo directors to task for spurning the Feb. 1 offer and “pursuing all manner of value-destructive third-party deals.”

These pension funds are the only party who have the investor interests at heart. Regarding both Yahoo and Microsoft, it’s hard to understand what they are thinking. Why would Microsoft pay a 60% premium for the much troubled search engine company? I understand that Microsoft basically wants to replace its own troubled MSN with Yahoo, but why overpay? I am sure that if it invested a fraction of this amount of money to generate more MSN traffic, things would improve.

As for Yahoo, hello? You are being offered such a huge premium, and just because you despise the suitor you reject the deal without presenting it to shareholders. “Yahoo said at the time the bid substantially undervalues the company, failing to take into account its 500 million users worldwide, investments in its advertising platform and lucrative overseas holdings.” Well, no offense but if your 500 million users are so lucrative why has your stock fallen by more than 45% pre-offer? Why are you cutting 7% of your workforce because you “forecast a tough 2008?”

Thank you pension funds for finally trying to actually represent your investors. At least someone cares about the investor.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer’s fund has no positions in any stock mentioned as of 2/25/08.

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Filed under: New York Times’A’ (NYT), Media World, Politics, Presidential elections

My initial assessment of The New York Times‘ (NYSE: NYT) controversial story about John McCain’s relationship with a female lobbyist gave the paper too much of the benefit of the doubt.

Originally, I wrote, “What people, particularly those outside of the media, need to realize is that there rarely are smoking guns in these sorts of stories and that anonymous sources are a necessary evil. At times, journalists have to build their cases using circumstantial evidence the same way lawyers do in court.”

But after reading Clark Hoyt, the paper’s ombudsman, blast the piece in his column Sunday, I realized that I was too easy on the paper. The story, as Hoyt noted, “did not say what convinced the advisers that there was a romance. It did not make clear what McCain was admitting when he acknowledged behaving inappropriately - an affair or just an association with a lobbyist that could look bad.”

Continue reading Taking another look at the New York Times’ John McCain story

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Filed under: Mexico, Entrepreneurs, Politics, Presidential elections

In an attempt to explain his position regarding trade, Democratic presidential front-runner Barack Obama said that he did not oppose free trade, despite making increasingly critical comments about multilateral deals such as NAFTA.

Asked how other countries should interpret his position, Obama responded that he supported free trade but wanted it to be fair.

“What the world should interpret is my consistent position, which is I believe in trade,” he said after meeting with workers at a manufacturing plant in Ohio.

“I just want to make sure that the rules of the road apply to everybody and they are fair and that they reflect the interests of workers and not just corporate profits.”

Well why, Senator Obama, do companies want to engage in trade? The answer is because both sides feel that they can gain from the deal. Corporations engage in trade to profit. Period. Entrepreneurs start companies because they think they can make a buck. On the other side, poorer countries want to trade to help create wealth.

Continue reading Hey Barack: People start companies in order to profit

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Filed under: Rants and raves, Politics, Presidential elections, Headline news

When I think of Ralph Nader running for president again as an independent candidate and how that could affect the general election, I think he must be a closet Republican, or have a few advisers that fit the bill. He was the spoiler before and he might be again.

He says that Republican and Democratic candidates are too beholden to big business. Perhaps. He says we are not doing enough to protect the environment, also true. He thinks he knows better, maybe; but Cuba just had a guy named Fidel step down from his presidency (sort-of) who knew better also, or so he insisted since 1959.

In the 1960’s and 1970’s Nader was an important figure who successfully championed many causes including the environment, consumer protection, civil rights, disclosure laws and fought for those that could not fight for themselves. He was a man of the times. These are his times no more. His provocation of the electorate may stem more from being ‘green with envy’, as much as being a green party advocate.

Continue reading Ralph Nader — closet Republican, perhaps only green … with envy

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Filed under: Economic data, Federal Reserve

More than half the collateral backing cash advances made by the U.S. Federal Reserve to U.S. banks is in the form of loans, not securities, the Federal Reserve Bank of New York told The Financial Times.

Economists and analysts had speculated that banks would post only complex housing-related securities — including mortgage-backed securities — that they could not refinance elsewhere.

That has not been the case. The Federal Reserve Bank of New York told FT that since the credit crisis began, banks had continued to provide a wide variety of assets as collateral — including U.S. Treasuries, other government and agency-backed securities, and private-label mortgage-backed securities.

Continue reading Banks posting a variety of assets as collateral with Fed

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Filed under: Products and services, Wal-Mart (WMT), Target Corp. (TGT), Procter and Gamble (PG)

Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) are in this one together, and we’re not talking a battle for retail supremacy here. The two mega discount retailers face an ongoing patent lawsuit over their use of RFID technology to keep track of warehouse and retail inventory levels and automated ordering and processing.

It’s hard to imagine a commodity technology being used in so many ways by retailers the world over being patented, but that’s just what Houston, Tx. citizen Ronald Bormaster is claiming. Bormaster’s RFID patent covers RFID in a way that ensures pallets and units of merchandise don’t “collide” when being handled in an automated fashion, and he assigned the patent to a Houston company called “RFID World” — which is not even using the system on a commercial basis to this day.

Wal-Mart and Target both have asked the patent lawsuit to be thrown out, arguing that it has no merit and that Bormaster’s patent isn’t a patent in the first place. The retailers say, based on a 2005 University of Arkansas study, that RFID allows in-store merchandise to be replenished three times more quickly when RFID is involved as opposed to manually-scanned bar code systems. Would customers see visible inconveniences in stores if this patent lawsuit was won by Bormaster and RFID was no longer allowed to be used by the two retailers? They say yes. Procter & Gamble Co. (NYSE: PG)’s Gillette brand is also involved with this dispute since it’s a large proponent of using RFID in its mass production facilities with its partners. All three companies want the case to be thrown out in its entirety.

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