Filed under: Management, Competitive strategy

This post is one of several on business heirs apparent. Let us know in the comments whether you think Roger Penske, Jr., should take up the reigns of Penske, and be sure to check out the other heir apparent posts.

Roger Penske is as much a fixture of the auto racing world as any person could claim to be. At 70 years old, he’s still an effective if not brilliant leader, with his hands on the wheel of a carefully built, racing world success. You have to wonder though, if Roger Penske is getting ready to step aside and let some new talent slip into the driver’s seat. If a change in leadership fits into his immediate or mid-range plans, who might his replacement be?

With four sons and one daughter, Roger has no shortage of Penske offspring who might be considered for stepping into the racing patriarch’s formidable shoes. The question is, are any of them fit for the job? We may have gotten just a glimmer of what’s to be expected by the recent stepping down of Roger Penske, Jr., from his position as president of Penske Automotive Group Inc. (NYSE: PAG). Roger, Jr., is reported by Crain’s Detroit Business to be retiring from Penske Automotive and purchasing four California auto dealerships from Penske Corp. Is this change to facilitate his being groomed to step into his dad’s position? No source I’ve seen appears to be sure if that is the case.

Continue reading Heir apparent: Team Penske has room on the inside groove

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Filed under: Major movement, Analyst upgrades and downgrades, General Electric (GE), Stocks to Buy

General Electric Co. (NYSE: GE) shares gained 4.3% by 1 p.m. following an upgrade from Merrill Lynch to Buy from Neutral. Analyst John G. Inch said GE seems to be a good defensive play in today’s climate and that its range of businesses and large global exposure (more than half its revenue comes from outside the U.S) will help it weather a U.S. recession.

Just as GE’s finance units are unlikely to record massive writedowns the way other banks do these days due to their subprime exposure, so are its other units less exposed to the slowing U.S. economy. With an above-average dividend yield of 3.5%, and divisions like health care equipment and electricity generation that will not be hurt by a weakening economy, the stock is positioned as strong defensive play. Not only that, but Inch expects GE to be more profitable this year than the rest of the S&P 500, which is inline with GE’s own forecast of 10% profit growth for 2008.

By the way, Jim Cramer today also mentioned GE as a stock with a high dividend yield, backed by a company with a good business, and which is likely a bargain now.

Continue reading General Electric (GE) — a good, defensive play

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Filed under: Management, Competitive strategy

This post is one of several on business heirs apparent. Let us know in the comments whether you think Roger Penske, Jr., should take up the reigns of Penske, and be sure to check out the other heir apparent posts.

Roger Penske is as much a fixture of the auto racing world as any person could claim to be. At 70 years old, he’s still an effective if not brilliant leader, with his hands on the wheel of a carefully built, racing world success. You have to wonder though, if Roger Penske is getting ready to step aside and let some new talent slip into the driver’s seat. If a change in leadership fits into his immediate or mid-range plans, who might his replacement be?

With four sons and one daughter, Roger has no shortage of Penske offspring who might be considered for stepping into the racing patriarch’s formidable shoes. The question is, are any of them fit for the job? We may have gotten just a glimmer of what’s to be expected by the recent stepping down of Roger Penske, Jr., from his position as president of Penske Automotive Group Inc. (NYSE: PAG). Roger, Jr., is reported by Crain’s Detroit Business to be retiring from Penske Automotive and purchasing four California auto dealerships from Penske Corp. Is this change to facilitate his being groomed to step into his dad’s position? No source I’ve seen appears to be sure if that is the case.

Continue reading Heir apparent: Team Penske has room on the inside groove

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Filed under: Major movement, Analyst upgrades and downgrades, General Electric (GE), Stocks to Buy

General Electric Co. (NYSE: GE) shares gained 4.3% by 1 p.m. following an upgrade from Merrill Lynch to Buy from Neutral. Analyst John G. Inch said GE seems to be a good defensive play in today’s climate and that its range of businesses and large global exposure (more than half its revenue comes from outside the U.S) will help it weather a U.S. recession.

Just as GE’s finance units are unlikely to record massive writedowns the way other banks do these days due to their subprime exposure, so are its other units less exposed to the slowing U.S. economy. With an above-average dividend yield of 3.5%, and divisions like health care equipment and electricity generation that will not be hurt by a weakening economy, the stock is positioned as strong defensive play. Not only that, but Inch expects GE to be more profitable this year than the rest of the S&P 500, which is inline with GE’s own forecast of 10% profit growth for 2008.

By the way, Jim Cramer today also mentioned GE as a stock with a high dividend yield, backed by a company with a good business, and which is likely a bargain now.

Continue reading General Electric (GE) — a good, defensive play

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Filed under: Indices, Market matters, Technical Analysis, S and P 500

Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.

However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year’s values, only one month stands out so far.

In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.

The high-low range for this year’s first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.

Continue reading Is the stock market more volatile than in the past?

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Filed under: Major movement, Analyst upgrades and downgrades, General Electric (GE), Stocks to Buy

General Electric Co. (NYSE: GE) shares gained 4.3% by 1 p.m. following an upgrade from Merrill Lynch to Buy from Neutral. Analyst John G. Inch said GE seems to be a good defensive play in today’s climate and that its range of businesses and large global exposure (more than half its revenue comes from outside the U.S) will help it weather a U.S. recession.

Just as GE’s finance units are unlikely to record massive writedowns the way other banks do these days due to their subprime exposure, so are its other units less exposed to the slowing U.S. economy. With an above-average dividend yield of 3.5%, and divisions like health care equipment and electricity generation that will not be hurt by a weakening economy, the stock is positioned as strong defensive play. Not only that, but Inch expects GE to be more profitable this year than the rest of the S&P 500, which is inline with GE’s own forecast of 10% profit growth for 2008.

By the way, Jim Cramer today also mentioned GE as a stock with a high dividend yield, backed by a company with a good business, and which is likely a bargain now.

Continue reading General Electric (GE) — a good, defensive play

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Filed under: Indices, Market matters, Technical Analysis, S and P 500

Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.

However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year’s values, only one month stands out so far.

In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.

The high-low range for this year’s first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.

Continue reading Is the stock market more volatile than in the past?

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Filed under: Television, Scandals

Of the executive bad boys who gained infamy during the early 2000s — executives at Enron and Worldcom being the most prominent — Tyco’s (NYSE: TYC) Dennis Kozlowski is perhaps the most complex story. For one, the company is still public, sporting a $20 billion market cap, plus another $15 billion for its spin-off, Tyco Electronics (NYSE: TEL).

This made Kozlowski an interesting choice for a profile on American Greed, which had thus far profiled now-defunct entities exclusively.

Kozlowski comes across as a greedy scoundrel — fraudulently evading over $1 million in taxes on his art collection, using corporate assets to buy personal items, in spite of his frequent 9-figure paydays, and just generally acting like a pretty typical late 90’s imperial CEO. Corporate governance at the company was a total joke, with one director reaping an 8-figure payday for arranging one meeting that led to a deal.

In the end, Kozlowski ended up in prison for 22 counts of grand larceny and defrauding shareholders out of more than $400 million. He has maintained that there was no criminal intent, and that the bonuses were authorized by the company’s board of directors.

Still — Tyco was never exposed as an accounting fraud on the same scale that companies like Enron and Worldcom were and, while Deal-a-Day Dennis was too aggressive in his pursuit of acquisitions, a lot of other companies were too, and the stock has appreciated more than 5-fold since he became CEO in 2002.

All that aside, the Kozlowski story definitely fits in the category of “American Greed”, even if the Tyco debacle falls short as a “scam.” This is definitely the best look at it I’ve seen so far; be sure to check your local listing for the replays.

To learn more about Kozlowski, take a look at the terrific website CNBC has set up.

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Filed under: Indices, Market matters, Technical Analysis, S and P 500

Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.

However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year’s values, only one month stands out so far.

In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.

The high-low range for this year’s first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.

Continue reading Is the stock market more volatile than in the past?

Permalink | Email this | Comments

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Filed under: Television, Scandals

Of the executive bad boys who gained infamy during the early 2000s — executives at Enron and Worldcom being the most prominent — Tyco’s (NYSE: TYC) Dennis Kozlowski is perhaps the most complex story. For one, the company is still public, sporting a $20 billion market cap, plus another $15 billion for its spin-off, Tyco Electronics (NYSE: TEL).

This made Kozlowski an interesting choice for a profile on American Greed, which had thus far profiled now-defunct entities exclusively.

Kozlowski comes across as a greedy scoundrel — fraudulently evading over $1 million in taxes on his art collection, using corporate assets to buy personal items, in spite of his frequent 9-figure paydays, and just generally acting like a pretty typical late 90’s imperial CEO. Corporate governance at the company was a total joke, with one director reaping an 8-figure payday for arranging one meeting that led to a deal.

In the end, Kozlowski ended up in prison for 22 counts of grand larceny and defrauding shareholders out of more than $400 million. He has maintained that there was no criminal intent, and that the bonuses were authorized by the company’s board of directors.

Still — Tyco was never exposed as an accounting fraud on the same scale that companies like Enron and Worldcom were and, while Deal-a-Day Dennis was too aggressive in his pursuit of acquisitions, a lot of other companies were too, and the stock has appreciated more than 5-fold since he became CEO in 2002.

All that aside, the Kozlowski story definitely fits in the category of “American Greed”, even if the Tyco debacle falls short as a “scam.” This is definitely the best look at it I’ve seen so far; be sure to check your local listing for the replays.

To learn more about Kozlowski, take a look at the terrific website CNBC has set up.

Read | Permalink | Email this | Comments

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