Best Investments For 2014
The new year has just began, and there are many analysts making bold predictions. These predictions vary from cautiously optimistic about the markets and the world economy to overly pessimistic about Europe, Financial Crisis and inflation.
Unfortunately, I cannot predict the future. I do know however, that investors become successful only after they find a niche that gives them an edge in their quest for long term wealth accumulation. My niche is dividend growth stocks. These companies have managed to boost earnings and dividends for many decades, through recessions, wars, oil embargoes and double digit inflationary periods. The companies I invest in typically provide consumers in every continent with products or services they use on a daily basis. No matter what happens with the economy, people will still do grocery shopping, and spend on basic needs. This makes the business model for most of the stocks I focus on very defensive in its core.
Some of the best companies to own in 2014, make great acquisitions that I plan to hold for several decades. I mostly sell only when one of these three events occurs. The one prediction I will make is that the following companies will boost their dividends in 2014, as they have previously done for years before.
Best Investments For 2014: Australia and New Zealand Banking Group Ltd (ANZ)
Australia and New Zealand Banking Group Limited (ANZ) provides a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Company conducts its operations in Australia, New Zealand and the Asia Pacific region. It also operates in a range of other countries, including the United Kingdom and the United States. The Company operates on a divisional structure with Australia, International and Institutional Banking (IIB), New Zealand, and Global Wealth and Private Banking. As of September 30, 2012, the Company had 1,337 branches and other points of representation worldwide, excluding automatic teller machines (ATMs). In September 2012, it sold its remaining shareholding in Visa Inc. Advisors’ Opinion:
- [By Dale Gillham]ANZ’s chart shows a similar story to the financial sector chart, with ANZ moving up from its low around $17.50 in 2011 to trade sideways between $20.00 and $22.00. The first positive sign indicating the pendulum may have shifted to favouring equities occurred when ANZ broke through a trend line and created a potential entry in mid-October 2011. This opportunity was only for short-term traders as there was the risk from very strong overhead resistance at around $22.00 for it to turn down again.
In November 2011 ANZ fell sharply, which suggested it was more likely to continue falling than to rise. However, since then it has shown some resilience and risen again to challenge $22.00. How it reacts here is important and illustrates why investors need to stay alert. While ANZ holds above $20.31 the likelihood for a continuation of the recent rise increases, and for ANZ to achieve a 10 per cent return in a few months.
Best Investments For 2014: Selectica Inc.(SLTC)
Selectica, Inc. provides contract management and sales configuration software solutions that allow enterprises to manage sell-side business processes. It offers Selectica contract lifecycle management (CLM) solution, a contract authoring, analysis, repository, and process automation product that is offered on-premise or hosted basis enables customers to create, manage, and analyze contracts in a single repository. The company also offers Selectica sales configuration (SCS) solution, which consolidates configuration, pricing, and quoting functions into a single application platform. It provides SCS solutions to manufacturers, service providers, and financial services companies to streamline the opportunity-to-order process. In addition, the company provides professional implementation and customization services; on-demand hosting services for CLM solutions; and complex product configuration modeling services for SCS solutions. It sells its CLM products primarily through its direct sales force and strategic and OEM partners, as well as SCS products primarily through partnership relationships in the United States, Canada, India, New Zealand, Switzerland, and the United Kingdom. The company was founded in 1996 and is headquartered in San Jose, California.
Best Investments For 2014: Kratos Defense & Security Solutions Inc.(KTOS)
Kratos Defense & Security Solutions, Inc. provides mission critical products, services, and solutions in the United States. The company?s Kratos Government Solutions segment offers various services comprising weapon systems sustainment, lifecycle support, and extension; command, control, communications, computing, combat systems, intelligence, surveillance, and reconnaissance services, including cybersecurity, cyberwarfare, information assurance, and situational awareness solutions; military range operations and technical services; missile, rocket, and weapons systems test and evaluation; mission launch services; modeling and simulation; unmanned aerial vehicle products and technology; advanced network engineering and information technology services; and public safety, security, and surveillance systems integration. Its Public Safety & Security segment provides independent integrated solutions for homeland security, public safety, critical information, and security and su rveillance systems. This segment?s solutions consists of designing, installing, and servicing building technologies that protect people, critical infrastructure, assets, information, and property in various areas, such as the design, engineering, and operation of command and control centers; design, engineering, deployment, and integration of access control; building automation and control; communications; digital and closed circuit television security and surveillance; fire and life safety; maintenance services; and product support services. The company primarily serves the United States government agencies, including the department of defense, classified agencies, intelligence agencies, other national security agencies, and homeland security related agencies. The company was formerly known as Wireless Facilities, Inc. and changed its name to Kratos Defense & Security Solutions, Inc. in September 2007. The company was founded in 1994 and is headquartered in San Diego, Cali fornia.
Best Investments For 2014: Courier Corporation(CRRC)
Courier Corporation, together with its subsidiaries, engages in printing, publishing, and selling books. It operates in two segments, Book Manufacturing and Specialty Book Publishing. The Book Manufacturing segment produces hard and softcover books, as well as offers related services involved in managing the process of creating and distributing these products for publishers, religious organizations, and other information providers. The Specialty Book Publishing segment publishes books in approximately 30 specialty categories, including fine and commercial arts, children?s books, crafts, music scores, graphic design, mathematics, physics and other areas of science, puzzles, games, social science, stationery items, and classics of literature for juvenile and adult markets in the United States. This segment also publishes approximately 900 test preparation and study guide titles for teachers and other consumers; and 130 titles comprising books on home decoration, design, and improvement, as well as gardening and landscaping for the home and garden retail book market. This segment sells its products through its specialty catalogs and through the Internet at doverpublications.com, REA.com, and creativehomeowner.com; and maintains DoverDirect.com, which is a business-to-business site for its retailers and distributors. This segment also sells its products through bookstore chains, independent booksellers, mass merchandisers, children?s stores, craft stores, gift shops, college bookstores, teachers? supply stores, and home and garden centers, as well as through a range of distributors in the United States and internationally. The company was founded in 1824 and is headquartered in North Chelmsford, Massachusetts.
Best Investments For 2014: MineFinders Corp. Ltd.(MFN)
Minefinders Corporation Ltd. engages in the exploration, development, and mining of precious and base metal properties. The company?s principal project includes the Dolores gold and silver mine, which consists of 7 claims in 3 concessions totaling an area of 27,700 hectares, located in the Madera Mining District in the state of Chihuahua, Mexico. It also has property interests in Sonora, Mexico; and in Nevada and Arizona, the United States. The company was formerly known as Twentieth Century Explorations Inc. and changed its name to Minefinders Corporation Ltd. in May 1979. Minefinders Corporation Ltd. was founded in 1975 and is headquartered in Vancouver, Canada.
- [By Paul]As a pure play, small cap stock, Minefinders could greatly benefit from a jump in silver prices, yet fall just as easily.
That said, MineFinders is more of speculative play.
ACE Investments’ Chang says if silver jumps, Minefinders, currently trading at about $10.80, could hit $13 to $15 almost instantly. “This one could go up like crazy,” he said.
“By the same token, I think there is a risk that the stock could be at about $7 to $7.50. So before you know it, it could have 30 per cent downside risk.”
For the third-quarter ended Sept. 30, Minefinders reported loss of 7 cents a share; above BMO’s estimate of 9 cents loss a share, but below the consensus estimate of loss of 2 cents a share, as sales of gold and silver fell due to ongoing production problems. But the negative production impact was offset by lower-than-expected cash expenses.
BMO analyst Andrew Kaip told clients that the company’s weak production had a “slightly” negative impact on his view of the stock and maintained his market perform rating for Minefinders.
Minefinders, precious metals mining and exploration company, currently operates the multi-million ounce Dolores gold and silver mine in northern Mexico. In late 2010, Minefinders received credit approval from The Bank of Nova Scotia for the renewal of its existing US$50-million revolving credit facility.
Best Investments For 2014: Imi Grp(IMI.L)
IMI plc, through its subsidiaries, engages in the design, manufacture, and sale of engineering solutions for the control and movement of fluids in critical applications to customers in various industries worldwide. It operates in five segments: Severe Service, Fluid Power, Indoor Climate, Beverage Dispense, and Merchandising. The Severe Service segment offers custom engineered severe service valve, actuation, and control solutions for use in power generation, oil and gas production, combined heat and power, liquefied natural gas, iron and steel, and petrochemical and gas processing industries. This segment sells its products under the CCI, BTG, IMI Nuclear, Orton, Truflo Rona, STI, Z&J, and THJ brand names. The Fluid Power segment provides motion and fluid control systems, principally pneumatic devices, for original equipment manufacturers in industrial pneumatic, commercial vehicles, food and beverage, life sciences, rail, and energy industries. This segment markets its p roducts under the Norgren, FAS, Kloehn, Herion, Buschjost, and KIP brand names. The Indoor Climate segment offers indoor climate control systems, primarily balancing valves for large commercial buildings, thermostatic radiator valves for residential buildings, and water conditioning equipment under the TA Hydronics, Heimeier, Pneumatex, and FDI brand names. The Beverage Dispense segment provides still and carbonated beverage dispense systems, beverage cooling solutions, and associated merchandising equipment for bars, restaurants, and retail outlets under the Cornelius and 3Wire brand names. The Merchandising segment offers point-of-sale solutions and technologies under the Artform, Cannon Equipment, DCI Marketing, and Display Technologies brand names for brand owners and retail sales outlets. IMI plc was founded in 1862 and is headquartered in Birmingham, the United Kingdom.
Best Investments For 2014: Halliburton Company(HAL)
Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.
- [By Conrad]Halliburton (HAL-N32.381.876.13%), like Schlumberger, is an oilfield-services company, with completion and production as well as drilling and evaluation segments. Halliburton is scheduled to release fourth-quarter results this morning. Analysts forecast an adjusted profit of 63 cents, equivalent to 126 per cent year-over-year growth, and $4.9-billion of sales, equivalent to 32 per cent year-over-year growth. In the third quarter, Halliburton posted 87 per cent profit growth, beating the consensus expectation by 3.4 per cent, but its stock still fell 4.8 per cent on the announcement. Analysts are bullish on Halliburton, with 89 per cent advising clients to purchase shares. A $53.21 me dian target implies 37 per cent upside.
Bullish Scenario: Deutsche Bank predicts that the stock will soar 61 per cent to $63 in 2011.
Bearish Scenario: Sanford Bernstein rates the stock “market perform” with a $46 target.
Best Investments For 2014: Cloud Peak Energy Inc(CLD)
Cloud Peak Energy Inc., through its subsidiaries, engages in coal mining operations in the Powder River Basin of the United States. It produces sub-bituminous steam coal with low sulfur content for electric utilities and industrial customers. The company owns and operates Antelope surface coal mine located to the south of Gillette, Wyoming; the Cordero Rojo surface coal mine located to the south of Gillette, Wyoming; and the Spring Creek surface coal mine located in Montana. It also owns a 50% interest in the Decker surface coal mine located in Montana. As of December 31, 2010, it had approximately 970 million tons of proven and probable reserves. The company was founded in 1993 and is headquartered in Gillette, Wyoming.
- [By seekingalpha.com]The third-largest coal producer in the United States, the company has approximately 970 million tons of proven and probable reserves. It supplies its product to electricity utilities.
Shares are trading at $20.06 at the time of writing, compared to their 52-week trading range of $14.77 to $24.69. At the current market price, the company is capitalized at $1.07 billion. Earnings per share for the last fiscal year were $2.07, placing the shares on a PE ratio of 9.69. It paid no dividend last year.
These earnings are expected to dip through the next couple of years, retreating to $1.79 this year, before rising to $2.11 the following year as economic constraints take hold, and the search for cleaner energy continues.
When compared to its sector, its price-to-earnings ratio is one of the lowest, and below the average of 12.42. Though the third largest of the coal production companies in the United States, it is far smaller than its main competitors, Arch (ACI) and Peabody (BTU). This could give it the agility it will need to succeed in the coming years. Its operating margin of 16.07% is better than Arch, and this is an indicator of a management that has the company cost structure under control. Expect the shares to outperform those of its major rivals through the next 24 months.
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