Thursday, March 28, 2013

Jeff Saut's Market Commentary: Still Due For a Pullback

Market strategist Jeff Saut released his investment commentary earlier this week.  In it, he talks about how the rally since the end of December has been rampant and is one of the longest he's seen.  He concludes,

"While we are certainly due for a pause/pullback, any such action should prove to be short-lived and shallow, providing there is not some kind of 'black swan' event that precipitates it.  If investors want to be bullish on the US economy, but are worried about the extended rally in stocks, they might consider 'long' positions in the US dollar."

Embedded below is Jeff Saut's weekly commentary:

You can download a .pdf copy here.

For more from this strategist, see his previous commentary on a permanent investment.

Lee Cooperman Raises Monitise Stake

Lee Cooperman's hedge fund Omega Advisors has revealed an increase in London listed Monitise (LON:MONI).  Due to trading on March 20th, Omega's position has increased from 5.65% to 10.06% of Monitise's voting rights.

Cooperman's firm originally took a stake in Monitise back in January of this year.  We've also detailed how Louis Bacon's hedge fund Moore Capital Management also disclosed a stake back in December.

Per Google Finance – “Monitise plc is a United Kingdom-based holding company. The principal  activity of the Company is as a technology company delivering mobile banking, payments and  commerce networks worldwide. The Company’s segments include Live Operations, Investment in  future operations and Investment in technology platform. Live operations include both territory  deployments and development contracts, which consist of Monitise United Kingdom, Monitise  Americas and Global accounts. Investment in future operations segment represents the Company’s  operations which are not live operations covering both pre-sales and start-up period. Investment in  technology platform segment comprises the ongoing development, enhancement and maintenance  costs of the Monitise technology platform. On June 25, 2012, the Company acquired US mobile  banking and payments specialist, Clairmail Inc.”

The Bull Case on Coach (COH) From Broyhill Asset Management

Broyhill Asset Management recently released its research on shares of Coach (COH).  They're bullish on the company and classify it as a classic compounder.

Broyhill writes,

"Coach currently trades at 8.3x EBIT,  13.0x current and 11.7x forward earnings. In other words, the stock is priced as if Coach’s growth is long in  its past. At its peak in 2001, shares fetched 32 times earnings. If we assume that Coach ultimately trades  back towards its average forward multiple of 15x over the next three years, we estimate the stock is worth  $76.60 in our base case, which represents more than 50% upside potential. In our bull case, upside is significantly greater."

Broyhill's thesis on this handbag retailer is pegged on three growth drivers: the ascent of affordable luxury, continued brand extension, and ongoing international expansion.

They feel a short-term shift in investor sentiment has created an entry point for long-term investors.  Their report, embedded below, highlights industry dynamics, competitive positioning, and executive leadership.

They also highlight the following as areas of potential risk:

- International expansion
- The Chinese consumer
- Margin compression
- Brand dilution
- Competition

Embedded below is Broyhill's full 20-page pitch on shares of Coach (COH):

For more research from this firm, we've also highlighted Broyhill's pitch on Oaktree Capital Group.

Wednesday, March 27, 2013

What We're Reading ~ Analytical Links 3/27/13

Doug Kass' basic investing tenets [TheStreet]

Cannibals: finding companies doing 'good' buybacks [ValueInvestingLetter]

Four villains of decision making [Farnam Street]

Student loan write-offs hit $3 billion in first 2 months of year [Yahoo News]

America's new railroad age [WSJ]

Examining Cupid PLC [Bronte Capital]

Relative value in credit risk [Bigger Capital]

Technicals: keeping an eye on Dr. Copper [Kimble Charting]

Soda consumption declines to lowest level since 1996 [CNBC]

Value investing in India is dead [Atyant Capital]

Investors face a shrinking stock supply [USAToday]

Market psychology money and investing personality tests [MarketPsych]

Hewlett Packard (HPQ) shares soar, but is it a real turnaround? [Barrons]

Dell (DELL) board continue talks with Icahn and Blackstone [Dealbook]

Google (GOOG): How YouTube is casually beating other social networks [PandoDaily]

Don't blame Barnes & Noble (BKS) [Digital Book World]

10 influential blogs financial advisors should be following [Financial-Planning]