Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Penney arcane
In a move that was long overdue, J.C. Penney (NYSE: JCP ) finally dismissed Ron Johnson as its CEO. The stock tanked on the news because the reeling department store chain merely fished out former CEO Mike Ullman to serve as its interim helmsman.
A dynamic CEO may come, but after the flashy Johnson fizzled, it remains to be seen if J.C. Penney can be saved at all.
Johnson's plan to do away with sales and couponing while remaking the stores by introducing "store within a store" brands hasn't panned out. J.C. Penney's sales plunged 25% last year. We're talking about $4.3 billion in net sales, and things weren't going so well before that. Obviously. It's why the company turned to Johnson in late 2011.
However, the red flags were there from the beginning. His refusal to move to Texas -- and hiring many key executives who also raced back to their home states before the workweek was even over at a time when it should've been "all hands on deck" -- was telling. Pushing out policies before testing them was arrogant.
5 Best Logistics Stocks To Own Right Now: Golub Capital BDC Inc (GBDC)
Golub Capital BDC, Inc. (Golub Capital BDC), incorporated on November 9, 2009, is an externally managed, closed-end, non-diversified management investment company. The Company's investment objective is to generate current income and capital appreciation by investing primarily in senior secured, one stop, second lien, subordinated loans of, and warrants and minority equity securities in, United States middle market companies. The Company seeks to create a diverse portfolio that includes senior secured, one stop, second lien and subordinated loans and warrants and minority equity securities by primarily investing in the securities of United States middle market companies. The Company's investment activities are managed by the Company's investment adviser, GC Advisors LLC (GC Advisors).
The Company seeks to generate risk-adjusted net returns by assembling a diversified portfolio of investments across a broad range of industries and private equity investors. The Company seeks to create a diverse portfolio that includes senior secured, one stop, second lien and subordinated loans and warrants and minority equity securities by primarily investing on average, in the securities of United States middle market companies. The Company primarily targets United States middle markets companies controlled by private equity investors that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts. The Company may also make opportunistic loans to independently owned and publicly held middle market companies. The Company focuses on senior secured loans and one stops investments, given the principal protection from the first lien security interest associated with such loans.
Senior Secured Loans
The Company structures these investments as senior secured loans. The Company obtains security interests in the assets of the portfolio company that serve as collateral in support of the repayment of such loans. This collateral may take the form of! first-priority liens on the assets of the portfolio company borrower. The Company's senior secured loans may provide for moderate loan amortization in the early years of the loan, with the majority of the amortization deferred until loan maturity.
One Stop Loans
The Company structures its one stop loans as senior secured loans. The Company obtains security interests in the assets of the portfolio company that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of the portfolio company. One stop loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. One stop loans generally allow the borrower to make a lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity.
Second Lien Loans
The Company structures these investments as junior, secured loans. The Company obtains security interests in the assets of the portfolio company that serve as collateral in support of the repayment of such loans. This collateral may take the form of second priority liens on the assets of a portfolio company. Second lien loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity.
Subordinated Loans
1The Company structures these investments as unsecured, subordinated loans that provide for relatively high, fixed interests rates that provide the Company with interest income. These loans typically have interest-only payments (often representing a combination of cash pay and payment-in-kind, or PIK, interest) with amortization of principal deferred until loan maturity.
Advisors' Opinion:- [By GuruFocus]
SVP and CFO Michael D James bought 2,500 shares of GMAN stock on 12/17/2013 at the average price of 7.1. Michael D James owns at least 69,158 shares after this. The price of the stock has increased by 6.9% since.
Golub Capital BDC, Inc. (GBDC): CEO, 10% Owner David Golub Bought 5,000 SharesCEO, 10% Owner of Golub Capital BDC, Inc. (GBDC) David Golub bought 5,000 shares on 12/23/2013 at an average price of $18.71. Golub Capital BDC, Inc. was formed in November 2009. Golub Capital Bdc, Inc. has a market cap of $810.256 million; its shares were traded at around $18.71 with a P/E ratio of 13.90 and P/S ratio of 7.70. The dividend yield of Golub Capital Bdc, Inc. stocks is 6.84%.
- [By Monica Gerson]
Golub Capital BDC (NASDAQ: GBDC) dipped 2.88% to $17.89 in pre-market trading after the company announced a public offering of 3.5 million shares of its common stock.
- [By Jordan Wathen]
Alas, Eliasek's second comment about making sure the assets are qualifying rules out a senior secured lending program -- a strategy employed by competitors including Golub Capital� (NASDAQ: GBDC ) and Ares Capital� (NASDAQ: ARCC ) .
Top 10 Dow Dividend Companies To Buy Right Now: Horizon Technology Finance Corporation (HRZN)
Horizon Technology Finance Corporation, a specialty finance company, lends to and invests in development-stage companies in the United States. It provides secured loans to companies backed by established venture capital and private equity firms in the technology, life science, healthcare information and services, and cleantech industries. Horizon Technology Finance Corporation was founded in 2008 and is based in Farmington, Connecticut.
Advisors' Opinion:- [By BDC Buzz]
I believe investors should look past the current low dividend yields and relatively higher multiples of NAV per share for BDCs such as FDUS, MAIN, and TCAP, but should consider the total return for these companies. The table below compares FDUS and MAIN to both ACAS which does not pay dividends and Horizon Technology Finance (HRZN) that pays a higher than average dividend but after taking into account dividend growth, special dividends, and NAV per share growth (using last twelve months actual for projection purposes) it is clear that the expected investor return is based on more than the current dividend yield.
Top 10 Dow Dividend Companies To Buy Right Now: EMC Insurance Group Inc. (EMCI)
EMC Insurance Group Inc., an insurance holding company, engages in property and casualty insurance, and reinsurance activities. It operates in two segments, Property and Casualty Insurance, and Reinsurance. The Property and Casualty Insurance segment writes commercial and personal lines of insurance with a focus on medium-sized commercial accounts. Its commercial lines of insurance products comprise automobile, property, workers� compensation, and liability, as well as other products that provide protection against burglary and theft loss, aircraft, marine, and other types of losses; and personal lines of insurance products include automobile, property, and liability. The Reinsurance segment provides reinsurance for other insurers and reinsurers. The company serves small to medium-sized businesses, institutions, and individual consumers. EMC Insurance Group Inc. sells its products through independent insurance agents. The company was founded in 1974 and is headquartered i n Des Moines, Iowa. EMC Insurance Group Inc. is a subsidiary of Employers Mutual Casualty Company.
Advisors' Opinion:- [By Caroline Bennett]
EMC Insurance (NASDAQ: EMCI ) this week declared plans to keep its quarterly dividend payout steady at $0.21 per share of common stock.
Top 10 Dow Dividend Companies To Buy Right Now: Teradyne Inc.(TER)
Teradyne, Inc., together with its subsidiaries, provides automatic test equipment products and services worldwide. The company operates in three segments: Semiconductor Test, Systems Test Group, and Wireless Test. The Semiconductor Test segment designs, manufactures, and sells semiconductor test products and services. Its test systems are used for wafer level and device package testing. These chips are used in automotive, communications, consumer, computer, and electronic game applications. This segment provides its products to integrated device manufacturers (IDMs) that integrate the fabrication of silicon wafers into their business; fabless companies, which outsource the manufacturing of silicon wafers; foundries that cater to the processing and manufacturing of silicon wafers; and outsourced sub-assembly and test providers, which offer test and assembly services for the final packaged devices to fabless companies and IDMs. It also provides Magnum test platform that test s memory devices, such as flash memory and dynamic random access memory, as well as offers ETS platform for use by semiconductor manufacturers, and assembly and test subcontractors in the low pin count analog/mixed signal discrete markets. The Systems Test Group segment offers military/aerospace test instrumentation and systems; storage test systems for HDD manufacturers; and circuit-board test and inspection systems for electronics manufacturers of cell phones, servers, computers, Internet switches, automobiles, and military avionics systems. The Wireless Test segment designs, develops, and supports wireless test solutions for developing and manufacturing wireless devices, such as smart phones, tablets, notebooks/laptops, and personal computer peripherals. This segment offers cellular communication solution for verification and calibration of mobile devices; and products for connectivity testing. The company was founded in 1960 and is headquartered in North Reading, Massach usetts.
Advisors' Opinion:- [By Johnson Research Group]
In addition, Perrigo has some potential support building below as the 20-day moving average is sneaking up to the $155 level. The potential for support from the technicals and a break above $160 will likely be enough to get the shorts to scramble and turn into buyers to cover their positions, helping a new rally in PRGO stock.
Short Squeeze Candidate #3: Teradyne (TER)
Click to Enlarge Technology shares have been seeing some shorts lately as traders are betting on a fade in the trend of technology leadership. Among the names on our short list for squeezes is Teradyne (TER).
Top 10 Dow Dividend Companies To Buy Right Now: Flextronics International Ltd.(FLEX)
Flextronics International Ltd. provides design and electronics manufacturing services to original equipment manufacturers. The company offers its services to a range of products in the infrastructure, mobile communication devices, computing, consumer digital devices, industrial, semiconductor capital equipment, clean technology, aerospace and defense, white goods, automotive and marine, and medical devices markets. Its services include design and engineering services, such as contract design, joint development manufacturing, and original design and manufacturing services in a range of technical competencies that include system architecture, user interface and industrial design, mechanical engineering, enclosure systems, thermal and tooling design, electronic system design, reliability and failure analysis, and component level development engineering; and systems assembly and manufacturing services, including enclosures, testing, and materials procurement and inventory mana gement services. The company also offers various component product solutions comprising rigid and flexible printed circuit board fabrication, display and touch solutions, optomechatronics, and power supplies; after market supply chain logistics services; and reverse logistics and repair services, such as returns management, exchange programs, complex repair, asset recovery, recycling, and e-waste management services for consumer and midrange products, printers, PDA's, mobile phones, consumer medical devices, notebooks, PC's, set-top boxes, game consoles, and infrastructure products. It has operations in Asia, the Americas, and Europe. Flextronics International Ltd. was founded in 1990 and is headquartered in Singapore.
Advisors' Opinion:- [By Amber Hestla, Michael J. Carr]
Among its suppliers is Flextronics International (Nasdaq: FLEX), which offers a variety of engineering services and provides supply chain management. Other Flextronics customers include Hewlett-Packard (NYSE: HPQ), LG and Google's (Nasdaq: GOOG) Motorola Mobility.
- [By Rich Smith]
Singaporean contract electronics manufacturer Flextronics International (NASDAQ: FLEX ) lost its chief financial officer today -- and immediately replaced him.
- [By Dan Caplinger]
As a result, the big threat that Jabil constantly faces is the potential loss of its customers. Rival Flextronics (NASDAQ: FLEX ) suffered a huge hit last summer when major customer BlackBerry (NASDAQ: BBRY ) chose to stop using the company to help it make its namesake smartphones, citing cost-cutting efforts in its decision to make changes to its supply chain arrangements. Flextronics has seen substantial revenue declines as a result, even despite BlackBerry's relative weakness in the smartphone space in recent years. More importantly, the move came at the worst possible time, as BlackBerry has subsequently revived in the face of its latest product launch. Jabil counts BlackBerry as a customer as well, so it should be interesting to see how that relationship has developed in the wake of the Z10 and Q10 smartphone releases.
- [By Evan Niu, CFA]
Which contract manufacturer will benefit? China's Economic Daily News pegs Flextronics (NASDAQ: FLEX ) as a winner. Foxconn will no longer manufacture the Mac Pro, with Flextronics picking up the win, according to KGI Securities analyst Ming-Chi Kuo.
Top 10 Dow Dividend Companies To Buy Right Now: ePlus Inc.(PLUS)
ePlus inc., through its subsidiaries, engages in selling, leasing, financing, and managing information technology (IT) and other assets in the United States. Its Technology Sales segment involves in the direct marketing of IT equipment and third-party software solutions of Cisco Systems, HP, VMWare, NetApp, IBM, and Microsoft; and the provision of proprietary software for enterprise supply management, including order-entry and order-management, procurement, spend management, asset management, document management, distribution, and electronic catalog content management software and services. This segment also provides professional technology services in the areas of data center, storage, security, cloud enablement, and IT infrastructure that cover Internet telephony and communications, collaboration, cloud computing, virtual desktop infrastructure, network design and implementation, storage, security, virtualization, business continuity, visual communications, audio/visual technologies, maintenance, and implementation services. The company?s Financing segment offers a range of leasing and financing options for IT and capital assets, such as computers, associated accessories and software, communication-related equipment, medical equipment, industrial machinery and equipment, office furniture and general office equipment, transportation equipment, and other general business equipment. It also leases and finances equipment, as well as supplies software and services directly and through relationships with vendors and equipment manufacturers. ePlus sells its products primarily through direct sales force, inside sales representatives, and business development associates to commercial customers; federal, state, and local governments; K-12 schools; and higher education institutions. The company was formerly known as MLC Holdings, Inc. and changed its name to ePlus inc. in 1999. ePlus was founded in 1990 and is headquartered in Herndon, Virginia.
Advisors' Opinion:- [By alicet236]
ePlus Inc. (PLUS): President and CEO, 10% Owner Phillip G. Norton Sold 198,730 Shares
President and CEO, 10% Owner of ePlus Inc. (PLUS) Phillip G. Norton sold 198,730 shares on 05/05/2014 at an average price of $47.5. ePlus Inc. was founded in 1990 and is a Delaware corporation and began using the name ePlus inc. ePlus Inc. has a market cap of $401.106 million; its shares were traded at around $49.74 with a P/E ratio of 11.50 and P/S ratio of 0.38. ePlus Inc. had an annual average earnings growth of 6.70% over the past 10 years. GuruFocus rated ePlus Inc.�the business predictability rank of 2-star.
- [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on ePlus inc. (Nasdaq: PLUS ) , whose recent revenue and earnings are plotted below.
Top 10 Dow Dividend Companies To Buy Right Now: Bankrate Inc (RATE)
Bankrate, Inc. (Bankrate), incorporated on April 13, 2011, is a publisher, aggregator and distributor of personal finance content on the Internet. The Company provides consumers with personal finances editorial content across multiple vertical categories, including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Company provides financial applications and information to a network of distribution partners and through national and state publications. The Company develops and provides Web services to over 75 co-branded partners, including personal finance sites on the Internet such as Yahoo!, CNN Money, CNBC and Comcast. The Company licenses editorial content to over 100 newspapers on a daily basis, including including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times and The Boston Globe. The Company offers services, including Mortgages and Home Lending, Deposits, Insurance, Credit Cards and Other financial products, including those related to retirement, tax, auto, and debt management.
The Company online publishing, is the sale of advertising, sponsorships, leads and hyperlinks, and lead generation within its Online Network through Bankrate.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwidecardservices.com, Creditcardsearchengine.com, Feedisclosure.com, Insureme.com, Bankrate.com.cn (China), CreditCards.com, Creditcards.ca, Netquote.com, CD.com, CarInsuranceQuotes.com and InsWeb.com. The print publishing and licensing business is primarily engaged in the sale of advertising in the Mortgage Guide and CD & Deposit Guide.
Mortgages and Home Lending
The Company offers information on rates for different types of mortgages, home lending and refinancing options. The Company�� rate information is specific to geographic location and contains nearly 600 local markets, covering all 50 United States. Consumers can customize searches for mor! tgage rates by loan size, maturity, and location through its online portals. The Company also provides original articles that cover topics, such as trends in housing markets and refinancing perspectives to help consumers with their decision making.
Deposits
The Company offers rate information on different deposit products, such as money market accounts, savings accounts and certificates of deposit. It also provides online analytic tools to help consumers calculate investment value using customized inputs.
Insurance
The Company facilitates a consumer�� ability to receive multiple competitive insurance quotes for auto, business, home, life, health and long-term care based on a single application. It also provides advice and detailed descriptions of insurance terms, aiding consumers in deciding amongst a range of policy options. Insurance quotes can be customized by age, marital status and location. In addition, the Company provides articles on topical subjects, such as recent healthcare reforms, as well as the basics to understanding an insurance policy.
Credit Cards
The Company offers a selection of consumer and business credit and prepaid cards for visitors. It provides detailed credit card information and comparison capabilities, and allows consumers to search for cards that cater to their specific needs. It displays cards by bank or issuer, credit quality, reward program, or card limit. The Company further hosts news and advice on credit card debt and bank policies, as well as tools to estimate credit score and credit card fees.
Other Personal Finance Products
The Company offers information on retirement, taxes, auto, and debt management. The content provided on such topics include 401(k), Social Security, tax deductions and exemptions, auto loans, debt consolidation, and credit risk.
The Company sells leads to insurance agents, insurance carriers and credit card issuers. Its credit c! ard compa! rison marketplace is one of the third party online application sources for all issuers. The Company charges its advertisers on a per-lead basis based on the total number of leads generated for insurance products, and on a per-action basis for credit cards (upon approval or completion of an application). Advertisers that are listed in the Company�� rate tables have the opportunity to hyperlink their listings. In addition, advertisers can buy hyperlinked placement within its qualified insurance listings. It sells its hyperlinks on a per-click pricing model. The Company provides a variety of digital display formats. Its common digital display advertisement sizes are leader boards and banners, which are prominently displayed at the top or bottom of a page, skyscrapers, islands and posters. The Company charges for these advertisements based on the number of times the advertisement is displayed or based on a fixed amount for a campaign.
Advisors' Opinion:- [By WWW.DAILYFINANCE.COM]
Andy Dean Photography/Shutterstock Open enrollment for insurance plans under the Affordable Care Act begins on Nov. 15. Between then and Feb. 15, you'll be able to enroll in a new health care plan, re-enroll in the one you picked for 2014, switch plans, and apply for subsidies, depending on your income. Crucially, as HealthCare.gov points out, "If you don't enroll in a health plan by Feb.15, 2015, the only way you can get health insurance for 2015 through the Marketplace is if you qualify for a Special Enrollment Period." And unless you have other health coverage, enrolling in Obamacare is the only way you can avoid having to pay the government's fee for failing to secure health care coverage. Hold Up a Sec -- What Was That About a Fee? To ensure that insurers have enough healthy persons in the system, paying premiums and offsetting the cost of taking care of those who get sick, Obamacare requires that everyone either sign up for health insurance -- or pay a fee (sometimes referred to as a "tax" or even a "penalty") to opt out. And the fee the government requires you to pay in 2015 for not signing up for insurance may be double or even triple what it was in 2014 during the slow ramp-up of the Affordable Care Act. There's a long list of exceptions. For example, if you meet the government's definition of being too poor to afford even Obamacare -- no penalty. If you're an American Indian -- no penalty. Or if you're in jail -- no penalty. (This is what we call a "mixed blessing.") Crunching the Numbers Those exceptions aside, in 2014, the first year in which fees were charged for opting out of Obamacare, opt-outers were required to pay either $95 per person or 1 percent of their income above a certain threshold. Whichever number worked out to be greater was the one you paid for forgoing health care insurance. In 2015, these fees jump to the greater of either $325 or 2 percent of income over the filing threshold. And that's just if you're single. If you have
- [By Rich Smith]
Alamy You've probably heard by now that in some vague way, your credit rating has something to do with the premiums your auto insurance company charges you for coverage. But if you're like me, you've probably never quite understood the details of how this work. Fortunately, the good folks at InsuranceQuotes.com -- a subsidiary of Bankrate (RATE) -- recently published a report that draws back the curtain on this little-understood quirk of the insurance industry. Blame it on FICO Used to be, the rate you paid for insuring your car was tied primarily to demographic and personal factors that were clearly connected to the risk that you'd damage your car and ask the insurance company to pay for it: things like your age, sex, marital status, and driving history. It won't surprise anyone that younger, unmarried men are more likely to be risky drivers than soccer moms, and should therefore pay higher premiums. But about 20 years ago, the folks at Fair Isaac Corporation (FICO) found a correlation between low credit scores and a higher risk of filing an insurance claim. That's not causation, of course -- having bad credit doesn't somehow cause you to crash your car. But according to FICO, "people who choose to effectively manage their finances are also less likely to have future insurance losses." Conversely, there is a "statistical correlation between a person's credit score and the likelihood that he or she will file an auto insurance claim in the future." Suddenly, FICO had a new way to hawk its credit histories to insurance companies -- and insurance companies had a new excuse to raise your rates. News Flash: Everybody Does It Ever since, insurance companies have used this finding to tweak the rates they charge you for insurance. Today, says InsuranceQuotes, "about 97 percent of U.S. insurance companies" do it. But how do they do it, exactly?
- [By Rich Smith]
Alamy 2013 is turning out to be a banner year for bank customers -- in a bad way. According to a recent survey by personal finance website Bankrate.com (RATE), this year has already seen record highs set for the amounts that banks charge their customers for ATM fees, overdraft fees, and monthly maintenance fees -- just for keeping a bank account open. According to Bankrate's
- [By Jake L'Ecuyer]
Shares of Bankrate (NYSE: RATE) got a boost, shooting up 20.92 percent to $21.05 after the company reported better-than-expected Q4 results.
Coty (NYSE: COTY) was also up, gaining 7.36 percent to $14.73 after the company reported strong Q2 revenue and announced a $200 million share buyback program.
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