Alcoa (NYSE: AA ) , the largest producer of aluminum in the U.S., was once a bellwether with a $40 billion market capitalization whose quarterly performance gave us a real sense of economic conditions at home and abroad.
Today, however, the company's market cap has plummeted to $8.5 billion, and its chief function as an economic gauge relates to its traditional role as the first component of the Dow Jones Industrial Average to tell us about its quarter. Following the market close on Monday it again performed that function, providing some optimism about what may be in the offing for others that will report behind it.
The numbers
Alcoa recorded a quarterly loss of $119 million, or $0.11 a share. However, excluding items, the company earned $0.07 per share, a penny higher than the consensus expectation among the analysts who follow it. Total revenue was $5.85 billion, down slightly from the $5.96 billion for the second quarter of 2012.
A portion of the one-time items -- $62 million -- involved reserves related to Department of Justice and Securities and Exchange Commission investigations into alleged corrupt payments in the sale of alumina in Bahrain. Management noted that a settlement of the Justice Department's charges could cost another $200 million. Beyond that, in an attempt reduce its costs, Alcoa took charges associated with shuttering a smelter in Italy and closing a pair of lines in Quebec.
Top Healthcare Equipment Stocks To Buy Right Now: EarthLink Inc.(ELNK)
EarthLink, Inc. provides communications services to individual and business customers in the United States. It operates in two segments, Consumer Services and Business Services. The Consumer Services segment offers Internet access and related value-added services. It provides dial-up Internet and narrowband access, broadband access, and voice-over-Internet-protocol services, as well as value-added services that include products for protection, communication, and performance, such as security products, premium email only, home networking, email storage, and Internet call waiting. This segment offer its products and services primarily through its call centers, search engine marketing, affinity marketing partners, resellers, and marketing alliances. The Business Services segment offers integrated communications services, such as secure IP-based networks, virtual private networks, Internet access, local telephone and long distance services, enhanced services, access trunks, pr ivate line services, asynchronous transfer mode/frame relay services, and mobile data and voice services, as well as installation, managed network, remote access, and disaster recovery services. It also provides wholesale services comprising broadband transport services, including private line, Ethernet private line, and wavelength services; local communications and local dial tone communications services; live and automated operator, and directory assistance services; and dedicated Internet access services and direct connectivity. In addition, this segment leases server space and provides Web hosting services that enable customers to build and maintain an online presence, including domain names, storage, mailboxes, software tools to build Web sites, e-commerce applications, and 24/7 customer support. This segment offers its services through direct sales, and independent dealers and sales agents. The company was founded in 1994 and is headquartered in Atlanta, Georgia.
Advisors' Opinion:- [By Rich Duprey]
Continuing its efforts to transform itself from a pure Internet service provider into an information technology company, EarthLink (NASDAQ: ELNK ) announced Monday it is buying�cloud computing and hosted IT services provider CenterBeam for $22 million.�
- [By Geoff Gannon] nflation growth: Dun & Bradstreet (DNB)
路 Inflation plus population growth: CEC Entertainment (CEC)
路 Nominal GDP Growth: Village Supermarket (VLGEA)
Over the last 10 years ��population growth, inflation, and real output per person growth has been so low it�� hard to tell the difference between companies growing at the rate of inflation, along with the population, or along with the economy.
You have to squint really hard to see any difference in the revenue growth records of DNB, Chuck E. Cheese, and Village.
This will not be true in all countries and at all times.
A literally no growth company like Earthlink is actually shrinking. It just happens to look like it�� staying perfectly flat because inflation is hiding the company�� real decay rate. In real terms, the company has been shrinking by about 3% a year for the last 10 years. So, Earthlink is not a no growth company. It�� shrinking.
That�� a bad sign. And, frankly, I don�� know how to value Earthlink. You would need to evaluate it as a turnaround or something ��not as a business that�� simplly stuck in place. I don�� know how to do that.
So, Earhtlink goes into the ��oo hard��pile.
Dun & Bradstreet and CEC Entertainment are actual no growth businesses. This is hidden by their constant share buy backs. So, if you look at their earnings per share growth they look kind of like Peter Lynch�� idea of a ��low growth��company or even a ��talwart�� They aren��. They��e no growth businesses.
The same is pretty much true with Village Supermarket. Although this is complicated. The nature of their business ��high volume, low cost groceries ��means they can appear to be a no growth business when they are actually just keeping prices down and increasing volume. You would need to check their sales numbers more carefully. Grocery stores often discuss inflation in their annual reports. Village Supermarket always does t
5 Best Penny Stocks To Invest In 2014: NET Servicos de Comunicacao S.A.(NETC)
Net Servicos de Comunicacao S.A., through its subsidiaries, provides cable television, Internet access, and voice services in Brazil. It offers cable television services under the ?NET? brand name through various cable networks located in the largest cities of Brazil. The company also offers broadband Internet access services under the ?NET VIRTUA? brand name by using Embratel's IP backbone infrastructure. In addition, it provides voice services under the ?NET FONE VIA EMBRATEL? brand name jointly with Embratel. Further, the company offers integrated video, broadband, and voice services. Net Servicos de Comunicacao S.A. was founded in 1994 and is headquartered in Sao Paulo, Brazil.
Advisors' Opinion:- [By Vanina Egea] offers bundled services and has aggressively expanded its Internet and TV subscriber base in the state.
Investing for Long-term Growth
Looking forward, Telef贸nica Brasil is investing in technology and network expansion to further empower its competitive position. The firm is expanding its 3G network based on CDMA EV-DO and HSPA technologies, which provide a great advantage over its peers. Further, it expects to benefit from the growth opportunities in the 4G market. Consequently, it has signed a deal with Ceragon Networks Ltd. (CRNT) to deploy the superfast 4G network nationwide.
A Valuable Stock
Telef贸nica Brasil has a healthy balance sheet with strong cash flow generation (up to 9,576 million in 2013 from 3,488 million in 2011) and reasonable debt levels. Its net debt-to-EBITDA ratio is of 0.17 times and it has a debt- to-equity ratio of 0.2 against its peers��average of 0.9. Its financial strength and a robust dividend have attracted investment gurus like Charles Brandes (Trades, Portfolio) and David Dreman (Trades, Portfolio), who have recently incorporated the company to its portfolio.
Considering the stock�� trading price of 14.6x its trailing earnings compared to the peer group average of 16.90x, and a compelling dividend yield of 7.30 with a payout ratio of 1.1 (against its competitors��median of 3.53 and 0.62, respectively), I believe this stock is a worthy investment opportunity with excellent growth potential.
Disclosure: Vanina Egea holds no position in any stocks mentioned.
Also check out: Charles Brandes Undervalued Stocks Charles Brandes Top Growth Companies Charles Brandes High Yield stocks, and Stocks that Charles Brandes keeps buyingAbout the author:Vanina EgeaA fundamental analyst at Lone Tree AnalyticsVisit Vanina Egea's Website
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5 Best Penny Stocks To Invest In 2014: Mad Catz Interactive Inc(MCZ)
Mad Catz Interactive, Inc. designs, manufactures, markets, sells, and distributes accessories for videogame platforms and personal computers (PC), as well as for iPod and other audio devices. Its products include videogame, PC, and audio accessories, such as control pads, video cables, steering wheels, joysticks, memory cards, light guns, flight sticks, dance pads, microphones, car adapters, carry cases, mice, keyboards, and headsets. It markets its products primarily under the Mad Catz, Saitek, Cyborg, Eclipse, Joytech, GameShark, Tritton, and AirDrives brands. The company also develops flight simulation software; operates flight simulation centers under its Saitek brand; operates a videogame content Website under its GameShark brand; publishes games under its Mad Catz brand; and distributes games and videogame products for third parties. It distributes its products through retailers in the United States, Europe, and Canada, as well as in Australia, Japan, Korea, New Zeal and, and Singapore. The company was founded in 1989 and is headquartered in San Diego, California
Advisors' Opinion:- [By Bryan Murphy]
If the name Mad Catz Interactive, Inc. (NYSEMKT:MCZ) rings a bell, it might be because yours truly penned some bullish thoughts on the video-gaming hardware (joysticks, control pads, headsets, etc.) back on August 20th. Neither MCZ nor my write-up were received as anything partially special at the time - it was just another stock dissected by just another guy, and you may or may not have given it a second thought. The 37% rally in the meantime, however, may garner a little more attention.
5 Best Penny Stocks To Invest In 2014: Gladstone Investment Corporation (GAIN)
Gladstone Investment Corporation specializes in buyouts and recapitalizations. It seeks to make debt and equity investments in small and mid-sized private businesses. The fund invests in junior subordinated loans, mezzanine debt, preferred stock, and warrants to purchase common stock of companies based in the the United States. It can also invest in senior secured loans and common stock. The fund prefers to invest between $3 million and $20 million. It invests individually as well as jointly with other buyout funds. The fund is treated as a business development company under the 1940 Act.
Advisors' Opinion:- [By Monica Wolfe]
Gladstone Investment Corporation (GAIN)
Over the past week two corporate executives made buys into Gladstone Investment Corporation. COO Terry Brubaker made three different buys over the past week and CEO David Gladstone made one.
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