Tag Archives: author

ALLETE (ALE) Q3 2015 Results – Earnings Call Webcast

Author Following Options: See their articles on your Seeking Alpha homepage and in your feed. Get their new articles emailed to you as they are published. Get all your favorite authors’ new articles emailed to you in one daily digest.

Equity Investing In A Low-Growth World

Global investors are figuring out how to cope with subdued growth. We believe the key is to focus on companies with strategic advantages in industries that can thrive – even in a low-growth world. Growth is clearly getting harder to find. Earnings reports for the third quarter showed diverse companies, including IBM (NYSE: IBM ) and Nestlé ( OTCPK:NSRGY ), falling short of expectations. China’s slowdown has spooked markets and fueled concerns that the world’s second-largest economy may not pull its weight in the coming years. And in the U.S., the Federal Reserve is reluctant to push up interest rates, fearing that the domestic economic recovery is still too fragile to withstand pressures emanating from abroad. Sluggish Days Ahead These are just some of the factors restraining growth around the world. Consensus estimates indicate that the global economy will expand by 2.9% in 2016. It’s not quite a recession or a crisis. But it’s far below the annualized rate of growth averaging about 4%-5% over the last decade. So what should equity investors do in this environment? We think there are three solid strategies for investing in a low-growth world: Invest in high-quality companies that are genuine growth businesses Search for undervalued companies that can restructure themselves to unlock value Look for companies with strong dividend yields Surprising Sources of Rapid Growth Let’s focus on the first category. The good news is that if you look in the right places, you can find surprising sources of healthy growth. Start by zeroing in on industries or trends poised to drive continued rapid growth, such as: The Internet of Things – As the number of connected devices continues to expand exponentially, companies that can provide enabling technologies should continue to grow at a rapid clip no matter what is happening in the surrounding economy. Payment Systems – The way we pay for goods and services is continuing to evolve. Payments technology is growing at a rate of 16% a year, according to A.T. Kearney, with payments using mobile technology are just beginning to take root. This is creating growth opportunities both for new companies that enable innovative payment services as well as incumbent payment processors and credit card groups. Healthcare – Aging populations in the developed world should create demand for targeted medicines. As science unlocks the secrets of the human genome, sophisticated treatments that are designed for individual needs are expected to play an increasing role in the pharmaceutical markets. Savings in the Developing World – In many emerging-market countries, the penetration of financial services is extremely low. As these societies become wealthier and more educated, greater financial awareness is likely to spur demand for more sophisticated products. Financial services firms that can tap into these needs-and are skilled at marketing in diverse cultures-are expected to grow faster than peers, in our view. Looking for Exceptional Companies These are just a few examples of pockets of growth that are expected to persist, even in a low-growth world. In passive portfolios, investors will by definition be holding positions in many low-growth companies that are vulnerable to domestic and global economic troubles. Active managers with skill should focus on building portfolios with companies that have strategic advantages in areas like these and can benefit from diverse return drivers throughout economic cycles. Challenges to growth will continue to cloud the outlook for equity markets for a while. But by identifying trends that can defy the sluggish environment-and the exceptional companies in these areas-we believe investors can tap into real sources of growth that can withstand the test of time. The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. AllianceBernstein Limited is authorized and regulated by the Financial Conduct Authority in the United Kingdom. Mark Phelps, Chief Investment Officer – Concentrated Global Growth

Top And Flop ETFs Of October

After a rocky Q3, the fourth quarter started off on a decent note, with the first month of the quarter – October – stepping up on gas. The U.S. markets were in green, thanks to a delayed Fed lift-off possibility at the end of September, no more economic shockers from China (the root cause of the Q3 massacre of the global market) and solid tech earnings. U.S. stocks delivered the largest monthly returns in four years. Among the top ETFs, investors saw the S&P 500-based SPY gain about 8.5%, Dow Jones-based DIA advance 8.6% and Nasdaq-based QQQ have a stellar rally and pop about 11.4% in October. While QQQ surged from superb tech earnings, DIA got positive cues from the oil price recovery, though for a shorter period. Though the bullish sentiments eased later in the month on the return of Fed-related worries, moderate corporate earnings and hopes for further policy easing across the globe (especially by the ECB) maintained the upbeat momentum. That being said, below we highlight the best and worst ETF performers of October (returns are mentioned as per xtf.com ). Global X MSCI Argentina ETF (NYSEARCA: ARGT ) – Up 25.1% Argentina stocks were a surprise winner in October on election euphoria. The election on October 25 did not however succeed in bringing out a victor and led to a runoff. In fact, Conservative opposition’s pro-business candidate Mauricio Macri’s unexpected strength in the poll box set the stage for a second round on November 22 . Hopes of a pro-growth leader and the ongoing election-related spending fueled Argentina’s stocks and the related ETF. KraneShares CSI China Internet ETF (NASDAQ: KWEB ) – Up 20.7% Overall, the Chinese stocks are back with a bang after the horrendous sell-off in the August-September period, on compelling valuation and the government accommodative policies. Of the whole set, the Chinese Internet stocks deserve a special mention as these are soaring on solid earnings. Be it Alibaba Group (NYSE: BABA ) or Baidu (NASDAQ: BIDU ), most stocks witnessed jump in its share prices post earnings release and helped KWEB gain over 20% in the month. Several other China-based ETFs including Guggenheim China Technology ETF (NYSEARCA: CQQQ ), PowerShares Golden Dragon China Portfolio (NYSEARCA: PGJ ), and KraneShares CSI China Five Year Plan ETF (NYSEARCA: KFYP ) returned over 19% in the month. Global X Copper Miners ETF (NYSEARCA: COPX ) – Up 19.0% Copper prices held up well in October on the possibility of an easing supply glut, fresh Chinese rate cuts as well as Beijing’s pro-growth reforms. Announcements by Freeport-McMoRan (NYSE: FCX ) and Glencore ( OTCPK:GLNCY ), the second and third largest copper producing companies worldwide, for considerable output cuts, boosted the price of the red metal. Moreover, China matters the most for this metal as the country is the world’s biggest consumer of this industrial metal, making up roughly 40% of global copper demand. All these tailwinds lifted the copper mining stocks and ETFs in October. Notably, mining ETFs generally trade as a leveraged play on the underlying metal and thus see a higher jump. C-Tracks on Citi Volatility Index ETN (NYSEARCA: CVOL ) – Down 45.2% Volatility products lost the most in October, as these tend to underperform when markets are rising or fear levels over the future are low, both of which were the flavors of October, though the trends began to alter at end the month. The Fed-induced bounce was behind the volatility crash in October. As such, CVOL linked to the Citi Volatility Index Total Return, plunged about 45% last month. iPath Dow Jones-UBS Natural Gas ETN (NYSEARCA: GAZ ) – Down 25.8% Natural gas prices fell through the floor in October on higher inventory and the buzz that this winter might be milder than the prior two. El Niño, a warm-water phenomenon that blows off the Pacific coast of South America, is likely to be stronger and keep the Northern Hemisphere relatively warmer. As almost 50% of Americans use natural gas for heating purposes, these fundamentals dented the pricing of the commodity. As a result, the product shed about 25.8%. iShares Currency Hedged MSCI ACWI ETF (NYSEARCA: HACW ) – Down 8.3% Since the U.S. dollar dipped early in October, the currency-hedging technique fell out of investor favor. As a result, this ETF lost about 8% in the month. However, investors should note that with the Fed rate hike talks on the table again, and China, Euro zone and Japan mulling over further policy easing, the flair for currency hedging is brightening up. Original Post