Different states have made it a law to require drivers to get a policy for their cars. True enough, there are a lot of motor vehicular accidents occurring in modern and highly urbanized areas, and the government has to device a way to protect their citizens from incurring large debts. Thus, making use of the services from car insurance companies would be necessary.
Finding a good company may mean searching through various resources online but it can become a little bit difficult to judge the quality of their services. Reading forums may be helpful to get some views of other clients. Moreover, asking for some recommendations from other people may also be useful.
Hiring free lance agents may also be a good idea because these people know the offers of different establishments. By providing these information to their clients, the latter can make comparisons right there and then, and, therefore, arrive at a very carefully thought of decision.
For some straight facts, clients may be able to get cheaper premiums if their cars are of lesser sophistication. Age would also be a determinant in this case because younger drivers tend to commit more accidents than older ones. Statistically, women are also found out to be more careful when on the road than males. Checking on these aspects would provide clients the idea on how much would be probably charged to them.
Finding ways to save up for one’s premium payments may also be another option. Clients who can pay cold cash for the first six months at one time may be able to avail of considerable discounts. Multiple cars that enroll in the same policy provider may pay much lesser too.
To further be one with the attempt to reduce the number of road accidents, insuring establishments also offer driving skills enhancement programs to their clients. It is free of charge and it would provide clients the chance to refresh their minds on the basic rules of the road.
One’s driving record wo! uld grea tly affect the rate that would be given by the establishments. If one has had several instances of collisions in the past, he can expect much higher premiums. This is the company’s way of securing their financial stability knowing they have an accident prone client.
As there are several types of insurances that car insurance companies offer, it is very necessary that clients know beforehand what they should get. Some states mandate specific types of coverages and drivers should know these in order to make a good choice.
You need to find good car insurance companies that offer good policies. If you are interested in New Jersey ins right now, we are here to help you.
There's plenty of chefs in the public offering kitchen
The IPO process is extremely complex. A company must abide by onerous�regulations, such as the Securities Act of 1934 and the Sarbanes-Oxley Act. As a result, even top-notch companies can have problems somewhere down the line. Google (NASDAQ:GOOG), Salesforce.com (NYSE:CRM), Groupon (NASDAQ:GRPN) and Zynga (NASDAQ:ZNGA) all faced missteps along the way.
To deal with the complexities, a company must hire a variety of top-notch advisers. Not to mention, businesses also have to get funding from private investors. By the time a company goes public, a ton of people have had their hands in the mix in one way or another. To sort it all out, let’s take a look at the main players in an IPO:
Venture Capitalists
Venture capitalists (also just called VCs) are people or firms that invest in early-stage companies. The funding amounts can range from $1 million to $100 million or more.
A VC often will have a board seat to take an active role with a company. This can include finding top employees, snagging customers and even making acquisitions.
For VCs, it’s usually just a handful of deals that will generate strong returns, as the risks are substantial for start-up companies. But in some cases, the returns can be enormous. An example is Accel Partners, which invested $12.7 million in Facebook in 2005 — and could see a return of more than $11 billion once the company goes public.
Some of the top VCs in the game include Andreessen Horowitz, Sequoia Capital, Accel, Benchmark Capital, NEA, Kleiner Perkins and Greylock Partners.
See Also: 4 Reasons Companies Go Public
Investment Bank
An inve stment bank (also known as an underwriter) is a Wall Street firm such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan (NYSE:JPM) that essentially manages the whole IPO process. This means drafting the necessary documents, coming up with a valuation, finding the right investors and conducting the road show.
For its services, an investment bank will be paid based on the amount of money raised. This usually amounts to a percentage ranging between 2% and 7%.
Attorneys
Companies usually will have in-house counsel, as well as an outside firm that will handle SEC disclosures. Both groups will help put in better check systems and engage in “corporate cleanup,” which means making adjustments to contracts and so on.
Some of the top IPO law firms include Wilson Sonsini Goodrich & Rosati, Latham & Watkins, O’Melveny & Myers, Shearman & Sterling and Sullivan & Cromwell.
See Also: How an IPO Works
Auditors
A company will have an internal auditor and an external auditor. They will focus on making sure a company’s financials are in compliance with generally accepted accounting principles (GAAP). The external auditor then will write a “comfort letter” that vouches for the financials.
Having a well-known auditor is extremely important, especially considering the kind of damage an accounting scandal can do. Top auditors include PricewaterhouseCoopers, KPMG and Deloitte & Touche.
Public Relations Firm
When a company is in the IPO process, it must abide by the “quiet period.” This means management and insiders are limited in what they can say to the media, as to not hype the offering.
No doubt, this isn’t a f! un task for public relations firms, which traditionally want to increase their clients’ visibility. But experienced PR firms will know how to play within the rules while still keeping the lines of communication open.
Financial Printer
It seems archaic, but a company must print all its SEC filings. This can be a hassle, as S-1 filings can easily be several hundred pages. And speed is important, as an IPO filing often must be turned around to the SEC within 24 hours.
One of the top names in financial printing is R.R. Donnelley & Sons (NASDAQ:RRD), which acquired longtime printer Bowne & Co. in 2010.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of �The Complete M&A Handbook”, �All About Short Selling� and �All About Commodities.� Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
To deal with the complexities, a company must hire a variety of top-notch advisers. Not to mention, businesses also have to get funding from private investors. By the time a company goes public, a ton of people have had their hands in the mix in one way or another. To sort it all out, let’s take a look at the main players in an IPO:
Venture Capitalists
Venture capitalists (also just called VCs) are people or firms that invest in early-stage companies. The funding amounts can range from $1 million to $100 million or more.
A VC often will have a board seat to take an active role with a company. This can include finding top employees, snagging customers and even making acquisitions.
For VCs, it’s usually just a handful of deals that will generate strong returns, as the risks are substantial for start-up companies. But in some cases, the returns can be enormous. An example is Accel Partners, which invested $12.7 million in Facebook in 2005 — and could see a return of more than $11 billion once the company goes public.
Some of the top VCs in the game include Andreessen Horowitz, Sequoia Capital, Accel, Benchmark Capital, NEA, Kleiner Perkins and Greylock Partners.
See Also: 4 Reasons Companies Go Public
Investment Bank
An inve stment bank (also known as an underwriter) is a Wall Street firm such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan (NYSE:JPM) that essentially manages the whole IPO process. This means drafting the necessary documents, coming up with a valuation, finding the right investors and conducting the road show.
For its services, an investment bank will be paid based on the amount of money raised. This usually amounts to a percentage ranging between 2% and 7%.
Attorneys
Companies usually will have in-house counsel, as well as an outside firm that will handle SEC disclosures. Both groups will help put in better check systems and engage in “corporate cleanup,” which means making adjustments to contracts and so on.
Some of the top IPO law firms include Wilson Sonsini Goodrich & Rosati, Latham & Watkins, O’Melveny & Myers, Shearman & Sterling and Sullivan & Cromwell.
See Also: How an IPO Works
Auditors
A company will have an internal auditor and an external auditor. They will focus on making sure a company’s financials are in compliance with generally accepted accounting principles (GAAP). The external auditor then will write a “comfort letter” that vouches for the financials.
Having a well-known auditor is extremely important, especially considering the kind of damage an accounting scandal can do. Top auditors include PricewaterhouseCoopers, KPMG and Deloitte & Touche.
Public Relations Firm
When a company is in the IPO process, it must abide by the “quiet period.” This means management and insiders are limited in what they can say to the media, as to not hype the offering.
No doubt, this isn’t a f! un task for public relations firms, which traditionally want to increase their clients’ visibility. But experienced PR firms will know how to play within the rules while still keeping the lines of communication open.
Financial Printer
It seems archaic, but a company must print all its SEC filings. This can be a hassle, as S-1 filings can easily be several hundred pages. And speed is important, as an IPO filing often must be turned around to the SEC within 24 hours.
One of the top names in financial printing is R.R. Donnelley & Sons (NASDAQ:RRD), which acquired longtime printer Bowne & Co. in 2010.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of �The Complete M&A Handbook”, �All About Short Selling� and �All About Commodities.� Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
Sears Jumps as Traders React to Takeout Buzz
On a fundamental basis, Sears Holdings (SHLD) is an absolute mess. Sales have slipped well below expectations and the company’s future is murky at best. And CIT Group (CIT) recently halted loans to Sears’ suppliers. But the anxiety surrounding Sears can also lead to sharp moves higher for the stock.
Today, shares are up about 7%, apparently on speculation that the company could be taken private by top shareholder Eddie Lampert and private equity heavyweight Bruce Berkowitz. Trading in the shares has already doubled the normal volume, and options trading is even more elevated, Reuters noted.
Of course, it may simply be a fool’s game trying to figure out what exactly is making the stock move.
Sears stock has fallen 51% in the past year. On days when the shares rise, it tends to be on speculation about Lampert’s motives. But without an actual buyout, that kind of momentum could be short-lived.
Today, shares are up about 7%, apparently on speculation that the company could be taken private by top shareholder Eddie Lampert and private equity heavyweight Bruce Berkowitz. Trading in the shares has already doubled the normal volume, and options trading is even more elevated, Reuters noted.
Of course, it may simply be a fool’s game trying to figure out what exactly is making the stock move.
Sears stock has fallen 51% in the past year. On days when the shares rise, it tends to be on speculation about Lampert’s motives. But without an actual buyout, that kind of momentum could be short-lived.
How to Handle the Anxiety of Retirement: RIIA Confab
How great is the anxiety over retirement? A study shows even greater, for some, than the worry generated over the Sept. 11 terrorist attacks in New York.
That was the finding of a group of researchers at the Center for Retirement Research at Boston College, said Andrew Eschtruth, associate director for external relations at the institute.
“Thinking about retirement induces anxiety,” Eschtruth said Tuesday during a presentation at the Retirement Income Industry Association spring conference in Chicago. “People feel powerless. They don’t feel that they have control over their destiny … and could be facing a situation that could have a bad outcome or a good outcome.”
Eschtruth, whose presentation was entitled “How People Behave: New Insights on Retirement Decisions,” broke down his talk into three major areas: retirement anxiety, saving strategies and drawdown behavior.
Unsurprisingly, the Boston institute’s research shows that the financial crash of late 2008 has significantly affected the way people think about retirement and the ability of public institutions and private plans to provide for a safe nest egg.
For instance, in the past few years there have been 613 average monthly Google citations with the search terms “state, local, crisis and pension fund.”
Eschtruth (left) said the web searches reflect a real concern. The institute’s research shows that a larger percentage of people today are at risk of failing to maintain their current standard of living after retirement than before the financial crisis: 44% versus 51%.
Gen Xers will suffer because the retirement age will increase to 67 in the years to come, but Eschtruth also pointed to a nagging problem for most Americans.
Despite the crash in the markets and the housing crisis, individuals still aren’t saving enough for retirement.
In one study, the Boston researchers investigated the behaviors of people in their 50s and older whose kids had left home. It might be reasonable to expect these parents to spend less of household income, but in fact the study found they spent more.
Turning to the draw-down phase of retirement, Eschtruth said that attitudes toward home equity may change in the near future. Until now, research shows that retirees hold onto their homes well into their 80s and downsizing a home remains rare. In the future, however, ignoring home equity may be a luxury that few can afford. Without selling a home, more and more retirees will be at risk of not being able to afford retirement.
Eschtruth suggested that if the investment advisors attending the conference explain the consequences of holding onto home equity, more retirees might sell and downsize. In fact, Eschruth provided data to show that once the threat to retirement health was made explicit, more people changed their behavior and decided to work longer or save more.
That was the finding of a group of researchers at the Center for Retirement Research at Boston College, said Andrew Eschtruth, associate director for external relations at the institute.
“Thinking about retirement induces anxiety,” Eschtruth said Tuesday during a presentation at the Retirement Income Industry Association spring conference in Chicago. “People feel powerless. They don’t feel that they have control over their destiny … and could be facing a situation that could have a bad outcome or a good outcome.”
Eschtruth, whose presentation was entitled “How People Behave: New Insights on Retirement Decisions,” broke down his talk into three major areas: retirement anxiety, saving strategies and drawdown behavior.
Unsurprisingly, the Boston institute’s research shows that the financial crash of late 2008 has significantly affected the way people think about retirement and the ability of public institutions and private plans to provide for a safe nest egg.
For instance, in the past few years there have been 613 average monthly Google citations with the search terms “state, local, crisis and pension fund.”
Eschtruth (left) said the web searches reflect a real concern. The institute’s research shows that a larger percentage of people today are at risk of failing to maintain their current standard of living after retirement than before the financial crisis: 44% versus 51%.
Gen Xers will suffer because the retirement age will increase to 67 in the years to come, but Eschtruth also pointed to a nagging problem for most Americans.
Despite the crash in the markets and the housing crisis, individuals still aren’t saving enough for retirement.
In one study, the Boston researchers investigated the behaviors of people in their 50s and older whose kids had left home. It might be reasonable to expect these parents to spend less of household income, but in fact the study found they spent more.
Turning to the draw-down phase of retirement, Eschtruth said that attitudes toward home equity may change in the near future. Until now, research shows that retirees hold onto their homes well into their 80s and downsizing a home remains rare. In the future, however, ignoring home equity may be a luxury that few can afford. Without selling a home, more and more retirees will be at risk of not being able to afford retirement.
Eschtruth suggested that if the investment advisors attending the conference explain the consequences of holding onto home equity, more retirees might sell and downsize. In fact, Eschruth provided data to show that once the threat to retirement health was made explicit, more people changed their behavior and decided to work longer or save more.
Financial Management Tips For Selling Your Home
If your home market has started to peak, you may be ready to sell your home. In the seller’s market, there’s a lot to research in order to keep your edge on the housing market. To walk away with the best price, you’ll have to keep tabs on priorities like where you’ll move to next; how you’ll improve your resale value; and how you can encourage buyers to accept your asking price, or even bid higher. You can’t discount solid research when entering the home market. Taking care of a few actionable items with good financial management can mean the difference between sitting on your home for eight months, and turning it around in three.
The first step to take before selling your home is to figure out where you’ll move once you’ve handed over the keys. You don’t want to be left holding your bags and boxes by the curb side, so start researching a new place — or if you plan to rent, look for apartments and make sure they’re available when the time comes.
Be as prepared as possible, since selling is no small feat. Your first step is to look into a home loan pre-approval, and examining your credit ratings to be sure you’ll get a good percentage. If you’re interested in moving up-market with your next house, too, be sure you can make a sufficient down payment so your monthly payments will be reasonable.
As you look at your possible early pre-payment penalties costs, request a mortgage payoff amount as well: It’s is the amount of money you’ll need in order to pay off the loan right now. You’ll need that information — as well as the info on pre-payment penalties —to determine a good listing price for the home as well.
Quick Fixes: Home Improvement
Let’s focus on that listing price for a moment, though. Obviously when you sell your home, you’re looking for the best price possible. Often, then, that means doing small to even major renovations so that you land in a good segment of the market. If you’re skeptical, don’t worry: you’ll be surprised at your return-on-investment for these improvements. Focusing on areas like bathrooms, kitchens, and the master suite becomes especially valuable at this stage. A clean, smart-looking, and upgraded kitchen can add an enormous amount of value to your home and can also improve its general appeal to your buyers.
Other home improvements can be easier to manage, as well: You can improve the value of your bathroom, for example, by replacing its faucets, shower heads, fixtures, and lighting. It’s also a good idea to replace the toilet and to examine the floors and counter tops for wear. Last but not least, your walls could probably use a facelift: especially if your bathroom has a show! er, wall s can accumulate mold or mildew. Most people prefer painted bathroom walls over wallpaper, as well, so you may want to rip out that old floral pattern and give it a more modern look.
A few other cheap upgrades for your home include replacing its carpeting and doing minor landscaping in your yard. Clear out weeds and debris outside, power-wash your driveway, and don’t forget to repaint or re-stain those old wooden fences. A fresh coat of paint on the outside of the home — in a natural, neutral tone — will also give your home that curb appeal it desperately needs for a quick and easy sale.
Finally, The Appraisal
Your next step in the process of selling your home is to order an appraisal! This is important, because a professional will be able to assess the fair market value of your home. Appraisals are tricky, though: don’t fall under the assumption that you’re automatically going to get a buying price for the amount at which your home was appraised. A myriad of other factors come into play, and you could end up selling for more or less depending on the surrounding neighborhood’s market, the number of buyers on the market, and the current standard interest rates.
Key Costs
Since everything here in the end is about improving your personal finance situation, you need to know what the costs of selling your home will actually be. Some key factors in determining your overall costs are:
Now that you’re armed and ready to sell, you’ll need to exercise patience and maintain a clean home for potential buyers to view. If you use a real estate agent, you shouldn’t have much to worry about. Simply keep your finances in order, keep in mind the costs of selling your home, pre-payment penalties, and mortgage payoff amounts when considering a potential sale, so you can leave confidently with a tidy sum at the end of the sale.
Your personal finances are important, especially when selling a home. Be smart in your choices, stay informed, and be prepared for when that real sale occurs — so that you’re not left knocking on your in-laws’ door for a place to stay!
The first step to take before selling your home is to figure out where you’ll move once you’ve handed over the keys. You don’t want to be left holding your bags and boxes by the curb side, so start researching a new place — or if you plan to rent, look for apartments and make sure they’re available when the time comes.
Be as prepared as possible, since selling is no small feat. Your first step is to look into a home loan pre-approval, and examining your credit ratings to be sure you’ll get a good percentage. If you’re interested in moving up-market with your next house, too, be sure you can make a sufficient down payment so your monthly payments will be reasonable.
Check your credit ratings. Unlike credit reports, credit scores are a formulated rating which lets you know where you stand in terms of creditworthiness. One of the most popular and credible credit score are FICO scores from Fair Issac, which are used by 90% of the largest U.S. banks.
Get Your Credit Score! Find out where you stand in terms of credit by getting your scores.
- Equifax
- 3-Bureau Credit Report and FICO Score!
- Sign Up
- Experian Credit Score
- Free Score and Reports from Experian.
- Sign Up
As you look at your possible early pre-payment penalties costs, request a mortgage payoff amount as well: It’s is the amount of money you’ll need in order to pay off the loan right now. You’ll need that information — as well as the info on pre-payment penalties —to determine a good listing price for the home as well.
Quick Fixes: Home Improvement
Let’s focus on that listing price for a moment, though. Obviously when you sell your home, you’re looking for the best price possible. Often, then, that means doing small to even major renovations so that you land in a good segment of the market. If you’re skeptical, don’t worry: you’ll be surprised at your return-on-investment for these improvements. Focusing on areas like bathrooms, kitchens, and the master suite becomes especially valuable at this stage. A clean, smart-looking, and upgraded kitchen can add an enormous amount of value to your home and can also improve its general appeal to your buyers.
Other home improvements can be easier to manage, as well: You can improve the value of your bathroom, for example, by replacing its faucets, shower heads, fixtures, and lighting. It’s also a good idea to replace the toilet and to examine the floors and counter tops for wear. Last but not least, your walls could probably use a facelift: especially if your bathroom has a show! er, wall s can accumulate mold or mildew. Most people prefer painted bathroom walls over wallpaper, as well, so you may want to rip out that old floral pattern and give it a more modern look.
A few other cheap upgrades for your home include replacing its carpeting and doing minor landscaping in your yard. Clear out weeds and debris outside, power-wash your driveway, and don’t forget to repaint or re-stain those old wooden fences. A fresh coat of paint on the outside of the home — in a natural, neutral tone — will also give your home that curb appeal it desperately needs for a quick and easy sale.
Finally, The Appraisal
Your next step in the process of selling your home is to order an appraisal! This is important, because a professional will be able to assess the fair market value of your home. Appraisals are tricky, though: don’t fall under the assumption that you’re automatically going to get a buying price for the amount at which your home was appraised. A myriad of other factors come into play, and you could end up selling for more or less depending on the surrounding neighborhood’s market, the number of buyers on the market, and the current standard interest rates.
Key Costs
Since everything here in the end is about improving your personal finance situation, you need to know what the costs of selling your home will actually be. Some key factors in determining your overall costs are:
- To get your home out into the market, you’ll need to advertise — which may include costs for listings in newspapers, on websites, using signs near the home to announce your sale, and flyers for the home that potential buyers can use as a reference.
- Even though your buyer should pay for surveys and inspections, it’s good to keep these expenses in mind as your buyer will need to consider them when considering their purchase.
- If you use a real estate agency to sell your home, you’ll ne! ed to kn ow the real estate commission amount and any possible miscellaneous fees.
- Don’t forget to include prorated costs for annual expenses like property tax, propane tank rentals, home owner association fees (if applicable), or any other rental fees for the home.
- The excise tax for the sale will make a difference in your total.
- Closing costs, escrow fees, and any possible attorney or professional fees factor in, as well.
Now that you’re armed and ready to sell, you’ll need to exercise patience and maintain a clean home for potential buyers to view. If you use a real estate agent, you shouldn’t have much to worry about. Simply keep your finances in order, keep in mind the costs of selling your home, pre-payment penalties, and mortgage payoff amounts when considering a potential sale, so you can leave confidently with a tidy sum at the end of the sale.
Your personal finances are important, especially when selling a home. Be smart in your choices, stay informed, and be prepared for when that real sale occurs — so that you’re not left knocking on your in-laws’ door for a place to stay!
5 Good Value Stocks 2014
In mid-September, stocks broke through the top of a trading range that had stubbornly resisted both buyers and sellers for five months. But instead of the breakout being accompanied by high volume with emphasis on blue-chip stocks, the rally has lacked volume and is currently being led by lower-quality stocks. This conundrum has perplexed even the most experienced technicians and fund managers.
September turned the best performance in 71 years, with the major indices rising over 8%, but stocks now appear to be grossly overbought. Investors should consider locking in their gains by selling or using options strategies to stabilize their holdings. This is no time to be a hero by buying at the top. However, despite the short-term overbought nature of the market, there are always bargains to be found if you look hard enough. The six stocks to buy listed here represent extraordinary value even in the current market condition.
September turned the best performance in 71 years, with the major indices rising over 8%, but stocks now appear to be grossly overbought. Investors should consider locking in their gains by selling or using options strategies to stabilize their holdings. This is no time to be a hero by buying at the top. However, despite the short-term overbought nature of the market, there are always bargains to be found if you look hard enough. The six stocks to buy listed here represent extraordinary value even in the current market condition.
5 Good Value Stocks 2014:Olin Corporation (OLN)
Olin Corporation engages in the manufacture and sale of chlor alkali products in the United States and internationally. The company operates in two segments, Chlor Alkali Products and Winchester. The Chlor Alkali Products segment manufactures and sells chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, bleach products, and potassium hydroxide. The Winchester segment offers sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges. The company serves various industrial customers, wholesalers, and other distributors, as well as the U.S. Government and its prime contractors. Olin Corporation was founded in 1892 and is based in Clayton, Missouri.5 Good Value Stocks 2014:Avon Products Inc. (AVP)
Avon Products Inc. manufactures and markets beauty and related products worldwide. Its product categories include color cosmetics, fragrances, skin care, and personal care; fashion jewelry, watches, apparel, footwear, and accessories; and gift and decorative products, housewares, entertainment and leisure, and children?s and nutritional products. Avon Products Inc. markets its products through direct selling and independent representatives, as well as through distributorships. The company was founded in 1886 and is based in New York, New York.5 Good Value Stocks 2014:Ball Corporation (BLL)
Ball Corporation, together with its subsidiaries, supplies metal packaging to the beverage, food, and household products industries worldwide. It offers aluminum and steel beverage containers for producers of beer, carbonated soft drinks, mineral water, fruit juices, energy drinks, and other beverages. The company also provides two-piece and three-piece steel food containers and ends for packaging vegetables, fruit, soups, meat, seafood, nutritional products, pet food, and other products, as well as aerosol cans, paint cans, custom and specialty containers and decorative steel tins. In addition, the company provides various aerospace systems comprising spacecraft, instruments and sensors, radio frequency and microwave technologies, data exploitation solutions, and other aerospace technologies and products, as well as offers technical services and products to government agencies, contractors, and commercial organizations for a range of information warfare, electronic warfare, avionics, intelligence, training, and space systems needs. Ball Corporation was founded in 1880 and is headquartered in Broomfield, Colorado.5 Good Value Stocks 2014:Crown Cork & Seal Company Inc. (CCK)
Crown Holdings, Inc. engages in the design, manufacture, and sale of packaging products for consumer goods. The company?s products include beverage cans and ends, and other packaging products for various beverage and beer companies; a range of food cans and ends, including two-and three-piece cans in various shapes and sizes for food marketers; and aerosol cans and ends for manufacturers of personal care, food, household, and industrial products. In addition, it produces a range of steel containers for cookies and cakes, tea and coffee, confectionery, giftware, personal care, tobacco, wines, and spirits, as well as for non-processed food products; and offers metal vacuum closures for food market and various specialty containers, as well as steel containers for paints, inks, chemical, automotive, and household products. Further, the company manufactures and sells can-making equipment. It has operations in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. Crown Holdings was founded in 1927 and is headquartered in Philadelphia, Pennsylvania.5 Good Value Stocks 2014:Carriage Services Inc. (CSV)
Carriage Services, Inc. provides death care services and merchandise in the United States. It operates through two segments, Funeral Home Operations and Cemetery Operations. The Funeral Home Operations segment offers various services to meet a family?s death care needs, including consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and services, and transportation services. As of December 31, 2010, it operated 147 funeral homes in 25 states. The Cemetery Operations segment provides interment services; the rights to interment in cemetery sites, including grave sites, mausoleum crypts, and niches; and related cemetery merchandise, such as memorials and vaults. This segment operated 33 cemeteries in 12 states. Carriage Services, Inc. also markets funeral and cemetery services and products on a preneed basis. Its preneed funeral or cemetery contracts enable families to establish, in advance, the type of service to be performed, the products to be used, and the cost of such products and services. The company was founded in 1991 and is headquartered in Houston, Texas.Saba Software Misses on Revenues but Beats on EPS
Saba Software (Nasdaq: SABA ) reported earnings on Jan. 5. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Nov. 30 (Q2), Saba Software missed on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved, and earnings per share contracted.
Margins dropped across the board.
Revenue details
Saba Software chalked up revenue of $30 million. The five analysts polled by S&P Capital IQ expected a top line of $32 million. Sales were 2.8% higher than the prior-year quarter's $29 million.
Non-GAAP EPS came in at -$0.10. The five earnings estimates compiled by S&P Capital IQ forecast -$0.11 per share on the same basis. GAAP EPS were -$0.16 for Q2 versus -$0.03 per share for the prior-year quarter.
For the quarter, gross margin was 62.1%, 290 basis points worse than the prior-year quarter. Operating margin was -17.6%, 1,530 basis points worse than the prior-year quarter. Net margin was -15.0%, 1,270 basis points worse than the prior-year quarter.
What does the future hold?
Next quarter's average e! stimate for revenue is $33 million. On the bottom line, the average EPS estimate is -$0.04.
Next year's average estimate for revenue is $131 million. The average EPS estimate is -$0.21.
Investor Sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 56 members out of 75 rating the stock outperform, and 20 members rating it underperform. Among 20 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Saba Software a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Saba Software is buy, with an average price target of $11.88.
The 10-second takeaway
For the quarter ended Nov. 30 (Q2), Saba Software missed on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved, and earnings per share contracted.
Margins dropped across the board.
Revenue details
Saba Software chalked up revenue of $30 million. The five analysts polled by S&P Capital IQ expected a top line of $32 million. Sales were 2.8% higher than the prior-year quarter's $29 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS detailsNon-GAAP EPS came in at -$0.10. The five earnings estimates compiled by S&P Capital IQ forecast -$0.11 per share on the same basis. GAAP EPS were -$0.16 for Q2 versus -$0.03 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
Margin detailsFor the quarter, gross margin was 62.1%, 290 basis points worse than the prior-year quarter. Operating margin was -17.6%, 1,530 basis points worse than the prior-year quarter. Net margin was -15.0%, 1,270 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
Looking aheadWhat does the future hold?
Next quarter's average e! stimate for revenue is $33 million. On the bottom line, the average EPS estimate is -$0.04.
Next year's average estimate for revenue is $131 million. The average EPS estimate is -$0.21.
Investor Sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 56 members out of 75 rating the stock outperform, and 20 members rating it underperform. Among 20 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Saba Software a green thumbs-up, and six give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Saba Software is buy, with an average price target of $11.88.
- Add Saba Software to My Watchlist.
Why IPOs Are a Lousy Bet
I never thought that one of my guilty pleasures would give me investing insight. But something I learned watching a home shopping channel showed me why buying into initial public offerings makes less sense than ever right now.
I'll share that insight later in this article. But first, I want to give some perspective on where the IPO market stands right now.
IPOs are back!
After a several-year hiatus in which we saw relatively few IPOs of any magnitude, initial public offerings are back in vogue. Facebook's IPO announcement last week was just the latest in a big series of companies going public, and you can expect far more IPOs to come if the stock market continues performing well.
But just because IPOs are getting more numerous doesn't mean they're a smart investment. It used to be that going public was a great accomplishment that marked a pinnacle of success for a company. But now, the IPO process is increasingly about prestige and exclusivity rather than actually putting a legitimate price on a company's value -- and IPO investors are the ones who'll suffer in the long run.
What I learned from home shopping
When I channel-surf, I often get stuck on a shopping channel, especially when they're selling coin sets. I like coins, but what draws me to the program is how they market them. The announcer always makes it clear that a coin is part of a relatively small set available, that quantities are limited, and that you should therefore buy now before they're all gone. That rarity is seen as a mark of potential price appreciation for the future.
What does that have to do with investing? Companies going public have taken a page from the home shopping channel and borrowed the same marketing strategy -- turning IPOs into limited-edition stock offerings. But there's a catch that can burn you in the long run.
Get your red-hot shares now!
In particular, companies are offering tiny amounts of their overall stock. Even t! hough Fa cebook's $5 billion offering will dwarf other tech IPOs, it will still represent only 5% of the total shares outstanding. That's become commonplace among tech companies; Groupon (Nasdaq: GRPN ) only offered 6.3% of its outstanding shares in its IPO -- the lowest stake for an IPO in the past decade -- while LinkedIn (NYSE: LNKD ) came in at 8.3%. Those stakes are far less than the 20% to 25% that are more typical for an initial public offering.
Several analysts at the time pointed out that the scarcity value contributed to high valuations -- valuations that for Groupon and LinkedIn soared during the first hours of trading but then quickly led to big price declines for the companies involved. And interestingly, it's not a strategy that every tech company is following. Zynga (Nasdaq: ZNGA ) , for instance, offered nearly 15% of its shares in its IPO -- a move that some blamed for the company's failure to jump on its IPO day.
But now you're starting to see the trend move beyond tech. Casino company Caesars Entertainment is planning a tiny offering of just 1.8 million shares worth about $16 million. That apparently may not include amounts that selling shareholders may add to the offering, but at least as the prospectus reads today, it represents only 1.5% of the total shares outstanding.
IPOs shouldn't be collectors' items
The problem comes when lock-up agreements expire, allowing investors to sell more shares onto the open market. For instance, Pandora (NYSE: P ) came out of the gate with a roar at its June IPO, with shares trading as high as $26 before settling at an opening-day close of $17.42. But by the time locked-up shares became available six months later, the shares were down to around $10. Battery-tech company! A123 Systems (Nasdaq: AONE ) saw a similar plunge on the day its lock-up period ended.
IPO investors need to realize that companies understand supply and demand, and that low-float offerings are designed to make investors pay too much for shares. Don't let share scarcity scare you into overpaying, or else you'll end up with an investment that you can't just return to the shopping channel.
On the other hand, if you start out with excellent companies, collecting their shares for the long haul is a smart move. Discover the names of three great prospects by accepting my invitation to read The Motley Fool's latest special report, which focuses on stocks that will help you retire rich. The report is absolutely free, but it won't be around forever, so click here and read it today.
I'll share that insight later in this article. But first, I want to give some perspective on where the IPO market stands right now.
IPOs are back!
After a several-year hiatus in which we saw relatively few IPOs of any magnitude, initial public offerings are back in vogue. Facebook's IPO announcement last week was just the latest in a big series of companies going public, and you can expect far more IPOs to come if the stock market continues performing well.
But just because IPOs are getting more numerous doesn't mean they're a smart investment. It used to be that going public was a great accomplishment that marked a pinnacle of success for a company. But now, the IPO process is increasingly about prestige and exclusivity rather than actually putting a legitimate price on a company's value -- and IPO investors are the ones who'll suffer in the long run.
What I learned from home shopping
When I channel-surf, I often get stuck on a shopping channel, especially when they're selling coin sets. I like coins, but what draws me to the program is how they market them. The announcer always makes it clear that a coin is part of a relatively small set available, that quantities are limited, and that you should therefore buy now before they're all gone. That rarity is seen as a mark of potential price appreciation for the future.
What does that have to do with investing? Companies going public have taken a page from the home shopping channel and borrowed the same marketing strategy -- turning IPOs into limited-edition stock offerings. But there's a catch that can burn you in the long run.
Get your red-hot shares now!
In particular, companies are offering tiny amounts of their overall stock. Even t! hough Fa cebook's $5 billion offering will dwarf other tech IPOs, it will still represent only 5% of the total shares outstanding. That's become commonplace among tech companies; Groupon (Nasdaq: GRPN ) only offered 6.3% of its outstanding shares in its IPO -- the lowest stake for an IPO in the past decade -- while LinkedIn (NYSE: LNKD ) came in at 8.3%. Those stakes are far less than the 20% to 25% that are more typical for an initial public offering.
Several analysts at the time pointed out that the scarcity value contributed to high valuations -- valuations that for Groupon and LinkedIn soared during the first hours of trading but then quickly led to big price declines for the companies involved. And interestingly, it's not a strategy that every tech company is following. Zynga (Nasdaq: ZNGA ) , for instance, offered nearly 15% of its shares in its IPO -- a move that some blamed for the company's failure to jump on its IPO day.
But now you're starting to see the trend move beyond tech. Casino company Caesars Entertainment is planning a tiny offering of just 1.8 million shares worth about $16 million. That apparently may not include amounts that selling shareholders may add to the offering, but at least as the prospectus reads today, it represents only 1.5% of the total shares outstanding.
IPOs shouldn't be collectors' items
The problem comes when lock-up agreements expire, allowing investors to sell more shares onto the open market. For instance, Pandora (NYSE: P ) came out of the gate with a roar at its June IPO, with shares trading as high as $26 before settling at an opening-day close of $17.42. But by the time locked-up shares became available six months later, the shares were down to around $10. Battery-tech company! A123 Systems (Nasdaq: AONE ) saw a similar plunge on the day its lock-up period ended.
IPO investors need to realize that companies understand supply and demand, and that low-float offerings are designed to make investors pay too much for shares. Don't let share scarcity scare you into overpaying, or else you'll end up with an investment that you can't just return to the shopping channel.
On the other hand, if you start out with excellent companies, collecting their shares for the long haul is a smart move. Discover the names of three great prospects by accepting my invitation to read The Motley Fool's latest special report, which focuses on stocks that will help you retire rich. The report is absolutely free, but it won't be around forever, so click here and read it today.
Idenix Pharmaceuticals, Inc. Traded with an Unusual Volume - NASDAQ:IDIX
Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX) witnessed volume of 1.43 million shares during last trade however it holds an average trading capacity of 593,634.00 shares. IDIX last trade opened at $6.49 reached intraday low of $6.47 and went +9.78% up to close at $6.96.
IDIX has a market capitalization $668.13 million and an enterprise value at $577.20 million. Trailing twelve months price to sales ratio of the stock was 57.90. In profitability ratios, operating profit margin in past twelve months appeared at -429.96%.
The company made a return on asset of -53.49% in past twelve months. In the period of trailing 12 months it generated revenue amounted to $11.54 million gaining $0.16 revenue per share. Its year over year, quarterly growth of revenue was 49.10%.
According to preceding quarter balance sheet results, the company had $31.41 million cash in hand making cash per share at 0.33. The total debt was $0.00 billion. Moreover its current ratio according to same quarter results was 2.28 and book value per share was -0.56.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 19.95% where the stock current price exhibited up beat from its 50 day moving average price of $5.40 and remained above from its 200 Day Moving Average price of $4.39.
IDIX holds 96.00 million outstanding shares with 60.19 million floating shares where insider possessed 46.21% and institutions kept 41.80%.
IDIX has a market capitalization $668.13 million and an enterprise value at $577.20 million. Trailing twelve months price to sales ratio of the stock was 57.90. In profitability ratios, operating profit margin in past twelve months appeared at -429.96%.
The company made a return on asset of -53.49% in past twelve months. In the period of trailing 12 months it generated revenue amounted to $11.54 million gaining $0.16 revenue per share. Its year over year, quarterly growth of revenue was 49.10%.
According to preceding quarter balance sheet results, the company had $31.41 million cash in hand making cash per share at 0.33. The total debt was $0.00 billion. Moreover its current ratio according to same quarter results was 2.28 and book value per share was -0.56.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 19.95% where the stock current price exhibited up beat from its 50 day moving average price of $5.40 and remained above from its 200 Day Moving Average price of $4.39.
IDIX holds 96.00 million outstanding shares with 60.19 million floating shares where insider possessed 46.21% and institutions kept 41.80%.
ITT Exelis and Boeing team completes wind tunnel testing of Next Generation Jammer pod
CLIFTON, NJ — 12/19/2011 (CRWENEWSWIRE) — As part of the Next Generation Jammer (NGJ) program�s technology maturation phase, ITT Exelis [NYSE:XLS] and The Boeing Company [NYSE:BA] have successfully completed wind tunnel testing of the team�s proposed full-scale pod at NASA’s Langley Research Center in Hampton, VA.
The testing, observed by U.S. Navy representatives, demonstrated the power generation and control capability of the pod�s Ram Air Turbine, used to generate electrical power for jamming. The pod, if selected by the Navy, will be deployed aboard the U.S. Navy�s electronic attack EA-18G aircraft.
�Successful wind tunnel testing of an integrated power generation system is a significant risk reduction achievement for the ITT-Boeing NGJ program,� said Bob Ferrante, vice president and general manager of Exelis Electronic Systems� airborne electronic attack business. �The wind tunnel test operations validated our engineering team�s projections, so now we�re preparing for the next step of in-flight testing.�
The Next Generation Jammer program, a complete upgrade to existing technology, will ensure that U.S. forces have dominance of the electronic spectrum, providing a comprehensive capability.
�Increased power generation is critical to NGJ success,� said Jim Skerston, Boeing NGJ chief engineer. �The embedded Ram Air Turbine must generate adequate power to operate the system, the transmitter and other mission electronics.�
“The successful demonstration of the power generation system was the culmination of collaborative design work that leveraged ITT’s high power electronics expertise with Boeing’s system integration capabilities,” said Rick Martin, Boeing̵! 7;s Advanced Military Aircraft chief engineer. “This work takes us one step closer to fielding the next major capability step in the EA-18G electronic attack arsenal.”
ITT Exelis Electronic Systems provides innovative integrated solutions for the global defense, intelligence, information assurance and commercial aerospace sectors. As a leader in electronic warfare and communications, we leverage our experience and innovation to ensure the success of our customers� critical missions. Our technology leadership extends into the areas of airborne electronic attack, networked and satellite communications, counter-improvised explosive devices, airspace management, surveillance systems, airborne and shipboard radar, acoustic sensors, advanced composite structures and electronic weapons interfaces.
A unit of The Boeing Company, Boeing Defense, Space & Security is one of the world’s largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world�s largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Defense, Space & Security is a $32 billion business with 63,000 employees worldwide. Follow us on Twitter: @BoeingDefense.
About ITT Exelis
ITT Exelis is a diversified, top-tier global aerospace, defense and information solutions company with strong positions in enduring and emerging global markets. Exelis is a leader in networked communications, sensing and surveillance, electronic warfare, navigation, air traffic solutions and information systems with growing positions in cybersecurity, composite aerostructures, logistics and technical services. The company has a 50-year legacy of innovation and technology expertise, partnering with customers worldwide to deliver affordable, mission-critical products and services for managing global threats, conflicts and complexities. Hea! dquarter ed in McLean, VA, the company employs about 21,000 people and generated 2010 revenue of $5.9 billion. www.exelisinc.com
Source: ITT Exelis
Contact:
ITT Exelis, Electronic Systems
John C. Dench
Communications Manager
973-284-4543
john.dench@exelisinc.com
The testing, observed by U.S. Navy representatives, demonstrated the power generation and control capability of the pod�s Ram Air Turbine, used to generate electrical power for jamming. The pod, if selected by the Navy, will be deployed aboard the U.S. Navy�s electronic attack EA-18G aircraft.
�Successful wind tunnel testing of an integrated power generation system is a significant risk reduction achievement for the ITT-Boeing NGJ program,� said Bob Ferrante, vice president and general manager of Exelis Electronic Systems� airborne electronic attack business. �The wind tunnel test operations validated our engineering team�s projections, so now we�re preparing for the next step of in-flight testing.�
The Next Generation Jammer program, a complete upgrade to existing technology, will ensure that U.S. forces have dominance of the electronic spectrum, providing a comprehensive capability.
�Increased power generation is critical to NGJ success,� said Jim Skerston, Boeing NGJ chief engineer. �The embedded Ram Air Turbine must generate adequate power to operate the system, the transmitter and other mission electronics.�
“The successful demonstration of the power generation system was the culmination of collaborative design work that leveraged ITT’s high power electronics expertise with Boeing’s system integration capabilities,” said Rick Martin, Boeing̵! 7;s Advanced Military Aircraft chief engineer. “This work takes us one step closer to fielding the next major capability step in the EA-18G electronic attack arsenal.”
ITT Exelis Electronic Systems provides innovative integrated solutions for the global defense, intelligence, information assurance and commercial aerospace sectors. As a leader in electronic warfare and communications, we leverage our experience and innovation to ensure the success of our customers� critical missions. Our technology leadership extends into the areas of airborne electronic attack, networked and satellite communications, counter-improvised explosive devices, airspace management, surveillance systems, airborne and shipboard radar, acoustic sensors, advanced composite structures and electronic weapons interfaces.
A unit of The Boeing Company, Boeing Defense, Space & Security is one of the world’s largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world�s largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Defense, Space & Security is a $32 billion business with 63,000 employees worldwide. Follow us on Twitter: @BoeingDefense.
About ITT Exelis
ITT Exelis is a diversified, top-tier global aerospace, defense and information solutions company with strong positions in enduring and emerging global markets. Exelis is a leader in networked communications, sensing and surveillance, electronic warfare, navigation, air traffic solutions and information systems with growing positions in cybersecurity, composite aerostructures, logistics and technical services. The company has a 50-year legacy of innovation and technology expertise, partnering with customers worldwide to deliver affordable, mission-critical products and services for managing global threats, conflicts and complexities. Hea! dquarter ed in McLean, VA, the company employs about 21,000 people and generated 2010 revenue of $5.9 billion. www.exelisinc.com
Source: ITT Exelis
Contact:
ITT Exelis, Electronic Systems
John C. Dench
Communications Manager
973-284-4543
john.dench@exelisinc.com
5-Star Stocks Poised to Pop: Seadrill
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, offshore driller Seadrill (NYSE: SDRL ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Seadrill's business and see what CAPS investors are saying about the stock right now.
Seadrill facts
Just last week, one of those Fools, jdwelch62, tapped Seadrill as an attractive income opportunity:
Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.
With that in mind, let's take a closer look at Seadrill's business and see what CAPS investors are saying about the stock right now.
Seadrill facts
| Headquarters (founded) | Hamilton, Bermuda (1972) |
| Market Cap | $16.0 billion |
| Industry | Oil and gas drilling |
| Trailing-12-Month Revenue | $4.3 billion |
| Management | Chairman/President John Fredriksen CEO Alf Thorkildsen |
| Return on Equity (average, past 3 years) | 21.7% |
| Cash/Debt | $496.0 million / $9.9 billion |
| Dividend Yield | 8.9% |
| Competitors | Ensco Noble Transocean |
Source: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 99% of the 549 members who have rated Seadrill believe the stock will outperform the S&P 500 going forward.Just last week, one of those Fools, jdwelch62, tapped Seadrill as an attractive income opportunity:
The world's thirst for oil doesn't show any signs of diminishing. We're going to need to drill in deeper waters to find the next big reserves. SDRL is positioned to provide the means of doing so with their rigs. I've been loading up on high yielding stocks that look like they can sustain their dividend payouts for th! e long h aul, and just added SDRL to my portfolio.What do you think about Seadrill, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.
Banking is back in Latin America
SAN FRANCISCO (MarketWatch) � Banking is back in Latin America. While most of the rest of the world is still recovering from the global financial crisis of 2008, Latin American banks have recovered.
Five factors have fueled that growth: a growing middle class, access to banks for the previously �unbanked� population, growth in deposits, a broader and expanding loan portfolio, and greater efficiency by Latin American banks.
Brazilian banks have led the surge, occupying the top five spots on The Banker�s list of the best Latin American banks. They�ve done this mainly by focusing on the growth of the middle class. The middle class in Latin America has grown to 51% of the population in the major economies in 2011, from just 41% in 2001. That growth in the middle class has pushed per capita income to $11,900 from $7,600 a decade ago.
It has also increased the demand for consumer loans: be they mortgages, car loans, or small business or industry loans.
Itau Unibanco Holdings SA ITUB , has focused on reducing costs and streamlining efficiency since the two banks merged in November 2008 to form Brazil�s largest bank. �But I can guarantee that we will not reduce our investment plans as part of that effort,� CEO Roberto Setubal said. Itau Unibanco has been rapidly expanding both within Brazil and across Latin America, capitalizing on success in consumer banking.
Regional growth
Itau Unibanco is just one of several banks with eyes on the rest of Latin America. �The flow of investments among the region�s various countries is increasing strongly,� said Andre Esteves, BancoBTG Pactual�s chief executive, in a statement. �Capita! l market s are developing at a fast pace in Colombia and Peru. Even the more mature markets, such as Brazil and Chile, continue to have high growth rates. We are very optimistic about the perspectives for Latin America.�
With money from Abu Dhabi, Singapore and China, BTG Pactual has grown to become one of Brazil�s top-10 banks. It recently expanded into Chile, Colombia and Peru and has reportedly been meeting with investment banks to launch its own shares over the next few months.
Recent analyst reports have suggested the major banks in Latin America, such as Itau Unibanco and BancoBradesco BBD , are losing market share to smaller, regional banks. We don�t see this as a reason not to invest in the larger banks. While they may end up losing share nationally, we believe the bigger banks will gain from their cross-border initiatives and from the rapid overall growth of banking in Latin America. Even if they did lose market share, that doesn�t mean their growth will slow. Like elsewhere, being bigger is a plus in Latin America�s banking industry.
There has been some backlash in Latin America as a result of the global financial crisis. Latin American countries have been more apt to approve regulations to protect consumers against fraud since 2008, and these same rules have not just protected consumers, but also shielded the local banking industry from foreign predators.
Even without better regulations, we expect you will start to see more intra-Latin America mergers and fewer acquisitions from developed countries. Already Latin American banks have pushed foreign banks from the top positions, in businesses including retail banking and investment banking. Last year, Itau Unibanco pushed Citigroup C �and Credit Suisse Group CS �CH:CSGN �from their top positions in investment banking.
But retail banking remains the key that most banks are after. In a survey for the Economist Intelligence Unit, most executives (27%) expect the greatest increase in competition in retail banking, compared with 17% in investment banking, 15% in corporate banking and 12% in consumer finance and cards.
The one country in Latin America where foreign banks have held onto their positions, and in some cases increased, is Mexico. Indeed, Spain�s Banco Santander ES:SAN �has amplified its penetration in Mexico, while also actively playing a large role in banking in Argentina, Uruguay, Chile and, to a lesser extent, in Brazil. Citibank, with its control of Banamex, has also benefited from its Mexico operations by penetrating retail banking and issuing more than a million credit cards per year.
Unbanked
And that brings us back to one of the strongest reasons to invest in Latin American banks: reaching the unbanked population. Half of the population in Latin America still does not use banks. In Brazil, 58% still use cash at supermarkets, with just 15% of purchases coming from credit cards and another 15% from debit cards.
A study by GrupoBursatilMexicano shows the potential of Latin American countries in bank loans to the private sector: If Chile is the model with close to 70% of private sector loans as a percentage of GDP, Brazil is still far behind at 50%, and Colombia (30% of! GDP) an d Mexico (less than 20%) are even further behind.
Latin Americans have devised their own ways to bring the unbanked into the mainstream. Even if it�s using a prepaid card for purchases, or having bank branches or ATMs in supermarkets, the growth of these will only pick up as the emerging middle class expands.
In Brazil, as in many South American countries, ATMs are often not operated by banks but by third parties. These kiosks are often much more prominent than the ATMs of banks. The largest of these is TecBan, which is planning to expand its network of Banco24Horas ATMs to 13,000 by the end of 2012, from 11,000 currently. TecBan plans to install ATMs at gas stations, supermarkets, shopping centers, drug stores, and subway, bus and rail stations. The company generates revenue by charging financial institutions a fixed price per transaction.
In summary, we think the banking sector in Latin America is going to benefit long-term from the growth of the middle class, and from greater access to the unbanked population, especially as new technologies gain adoption such as mobile banking and innovations in credit cards.
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