Bucking the Trend 03-12-15

It’s not exactly news, but the U.S. dollar has been on an absolute tear lately. The trade-weighted U.S. Dollar Index hit a 12-year high yesterday and has climbed 25 percent in the past year. And it’s widely assumed that the trend will persist, with the Federal Reserve likely to hike short-term interest rates even as many other nations ease credit. The increasing rate differentials, together with the view of the U.S. as a safe haven, should continue to attract more capital to our shores. But you know what they say about assumptions.

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March 6, 2015

Sign of the Times

Stocks and bonds are taking a breather today, following this morning’s employment report from the U.S. Labor Department. This appears a modest bout of profit taking rather the beginning of a meaningful pullback, however.

The surprisingly good report showed that harsh winter conditions had no adverse effect on payrolls in February, with employers adding 295,000 workers last month. The headline unemployment rate, meanwhile, dropped to a seven-year low of 5.5 percent. The employment report has sparked renewed concerns that the Federal Reserve will begin tightening credit as early as its June policy setting meeting. We think those concerns are overblown (in terms of both the timing and the severity of the impact from a modest hike off of the current zero interest rate the Fed has maintained for so long now).

Today’s issue looks at two commodities that investors have little love for these days, yet are nevertheless poised to rally smartly in the coming months. We also run down what’s going on with several of our stocks from various industries.  
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Natural Gas Gets the Cold Shoulder 02-26-15

The unusually harsh winds that have swept down from the Arctic in recent weeks guarantee that February will go into the books as among the coldest, if not the coldest, on record across much of the continental United States. Average heating degree days, at 253 last week, stood in stark contrast to the 175 norm for this time of year during the past several decades. Yet the steady blast of frigid air has done nothing to light a fire under natural gas. Read more about Natural Gas Gets the Cold Shoulder 02-26-15

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February 20, 2015

Cleared for Takeoff

Two events in recent weeks pave the way for faster adoption of unmanned aerial vehicles worldwide: The U.S. Federal Aviation Administration proposed a set of guidelines for the operation of small commercial drones, and the White House announced looser restrictions on the sale of larger drones—including armed
models—to friendly countries.

This issue we recommend a small company that stands to profit from these changes, in addition to making key components that play an important role in a variety of other cutting-edge technologies. With a charted flight plan likely to entail annual profit growth approaching 20 percent, a P/E little more than half that rate, and only a single Wall Street buy-side analyst following it, the stock is currently flying under the radar—but perhaps not for long. Read more about Cleared for Takeoff