11 May 2016
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Financial Sector
o
Goldman Sachs
§
Stock prices spiked on 5/10
§
Point: GS has very high liability and low
assets. This was explained as being due to “debt being cheap” and a fact of
banking
o
Berkshire Hathaway
§
Revenue fell, but net profit jumped
o
Watching: BAC, Wells Fargo, Deutsche Bank
·
Telecom
o
Frontier Communications
§
Customer complaints after it purchased millions
of accounts from Verizon.
·
Defense
o
First general down day in a couple of weeks.
§
Likely due to general downturn
o
Lower amounts of oil and reserves by a couple millions
of barrels
§
This caused oil to go up a bit/be flat, while
the market is generally down.
o
Lockheed Martin (LMT)
§
Recently, they’ve been up quite a bit, are expected
to increase.
§
They’re restructuring, which should increase
efficiency.
§
Focused on expansion in international markets.
§
Still a leading defense company.
§
Deficiencies in ship markets
·
Criticized for systemic shortcomings
o
Huntington Ingalls (HII)
§
Builds and maintains the Navy’s nuclear
submarines
§
Little competition
§
Will the Sino-sphere conflicts increase demand
for ships?
o
The US Army is holding a competition for
helicopters in 2017. The two main competitors are Bell Helicopters and
Boeing-Sikorsky.
·
Energy
o
Chevron is down a couple cents.
·
Department/Malls
o
Macy’s (M)
§
Reported terrible numbers, went down a lot.
§
Stores at certain tiers are down- Sears, Macy’s,
JC Penny’s, etc. These are lower to middle end. High-end malls (in LA area)
appear to be doing fine.
§
Can be replaced with Amazon
·
High-tiers are safe because you wouldn’t buy a
$1000 jacket on Amazon
o
Large trend of “athleisure”
§
Especially on college campuses
§
Leggings, sport shoes, shorts
§
Lulu Lemon, Under Amour, Nike
o
Sears (SHLD)
§
Slowly going out of business
§
Selling properties
·
Agriculture
o
Terra Nitrogen (TNH)
§
Their dividend is down, closer to $1.50 per
share.
§
Still a strong company. Their annual income is
strange: high profit margin, but revenue is decreasing.
§
17% drop in stock lately. They combat an unscheduled
two-month outage and decreased earnings.
§
Thought: if we own this due to high dividends,
why not invest in a safer company (Verizon, AT&T) that has similarly high
dividends?
§
Did they lower dividend due to outages or
something else?
·
Tech
o
Lenovo (LNV)
§
Now owns Motorola
§
Plans on launching smartphone with Google Tango,
a 3D mapping camera system
§
Will be holding a conference soon
§
Not traded on American Exchanges
·
Motions
o
Regarding last week’s motion to sell stocks,
there is a thought that we should hold off selling until the beginning of next
term, in order to make more than 0.1% that we would get in the money market
o
What if the market tanks in the summer?
o
Do we have a responsibility to keep at least
some of it out of the money market?
o
Defenses:
§
Lockheed Martin
§
Northrop Grumman
·
Miscellaneous
o
What’s up with Carl Icahn?
§
Historic 150% net short.
§
Very bearish
§
Sold Apple
o
Leasesmart Inc still dead.
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