Hello everybody! We apologize for the severe lack of posts, our schedule as students has prevented us from blogging with all of the end-of-the-year testing. However, we do come with good tidings! The LMHS Invest Club welcomes Francisco Arauz as our new Analyst, Nicholas Sepulveda as our new Vice-President and myself, Kyle Cook, as the new President!
This post primarily serves to inform you, our viewership, that we are indeed still here! More posts will be popping up as the summer progresses, and a more stable amount will follow as the following school year begins. I thank you all for the support and wish everyone a fantastic summer!
-Kyle Cook, President of Investment Club
NYSE
Another day at the Stock Market
Monday, May 27, 2013
Monday, March 11, 2013
Consumer Goods: Target (TGT), Wal-Mart (WMT), CVS (CVS), Walgreen (WAG), Home Depot (HD), Lowe's (LOW), Mattel (MAT)
It has been an amazing set of days on the Stock Market, with almost an entire week of all-time highs on the DOW Industrial Average, and we are excited to be blogging once again (we apologize for the long wait, our full-time student schedules prevent us from blogging as much as late last year)! We are going over our Consumer Goods sector today, briefly describing each company and their standings, as well as our predictions, much like the last post on pharmaceuticals!
Target (TGT) - Target is a general retail brand that was established in 1902; the current CEO is Gregg Steinhafel, and stocks sell for about $67. As we first observed statistics, we noticed a disappointing trends downwards in the last years. The recession make its impact, and as investment declined, stock prices began decreasing and hit a low of just over $58 in late 2012. Although revenue decrease slightly in late December as well, revenue for the 4th Fiscal QT was up 0.8%. Also, Target renewed their online shopping with their new Price Match Policy. With major online marketers like Amazon.com, Target introduced a program to draw more customers back to the nationwide brand, both in stores and online. We predicted strong growth following this policy, and shares have since increased to $67.34 (3/11 closing). It has been upgraded by analysts multiple times in the past two months (we were a full month ahead of them), and we continue to back the company. Growth in dividend may slow down, but we still expect long-term increases. Invest!
Wal-Mart (WMT) - Wal-Mart is also a general retail store, and was established in 1909. Stocks are a bit more expensive, topping $72. The current CEO is Gregory Wasson. Wal-Mart's advantage over many large general retail stores (including grocery in many cases), is its international presence. The stores are found everywhere in the United States, in many other countries, and, as we will discuss soon, are appearing on college campuses. Unfortunately for the company, they experienced earnings below expected, and EPS resulted in being only $1.51, instead of $1.53-1.58. In early January, Wal-Mart introduced a new contact lens program, allowing customers to purchase brand name contact lenses for a, well, Wal-Mart price. Also, Wal-Mart has been experimenting with a so-called "Wal-Mart On Campus" - a miniature version of a regular sized store (10% of a normal, 2% of a super-center), to allow college students to still benefit from the the store's low prices. Only two currently exist, but, if they are sustained with growth and more purchases, they could soon sprout on many campuses throughout the states. We encouraged investment in Wal-Mart as well, and have since made over $30 profit on 5 shares.
CVS Caremark (CVS) - CVS is a nationwide pharmacy which also sells general products. It was introduced in 1963, currently sells for $52, and is headed by CEO Larry Merlo. Stocks have been on the rise since late 2011, with relatively few bumps along the way. In January, CVS organized a further group effort to help victims of Hurricane Sandy, creating a partnership between BarnabasHealth, a local clinic group in New Jersey, and its own MinuteClinic. This temporarily allowed for strong growth in investment, but a controversy surrounding extortion via MoneyPak (Green Dot, with PayPal) caused confusion with CVS. The company, one of few still selling MoneyPak's after FBI advisories to take them off the market. These products installed a pop-up, virus-like program on your computer when used, which requested a specific domain and login, followed by a demand to pay a fine to an FBI look-alike. However, once that situation cleared up, CVS returned to its habitual growth, and has, since our own simulated investment, increased almost 6%. We continue to encourage investment, but to expect significant profits mainly in the long-term.
Walgreen (WAG) - Much like CVS, Walgreen is also a nationwide pharmacy with minor general retail. It is larger than the latter by 1300 stores, making it the largest pharmacy in the United States! Walgreen has been showing remarkable growth since taking a large hit in mid-November. To explain such large fluctuations in WAG's stock, the company lost major contracts with drug producers and distributors, forcing it to search for other, more reliable options. Fortunately for Walgreen, they are now back with stable deals. Their major distributor is Alliance Boots, providing 45% of their prescription drugs. On a more recent note (we don't have much to say about Walgreen, really), price targets were risen from $40 to $47 -- that is, until sales begin to drop. February sales were down 2.2%, and investors began taking a hit. More investors + less cash flow = smaller dividends. We projected growth in the company, and it has grown just under 4%, but we do not project significant earnings in stock investment in the short term.
Home Depot (HD) - Home Depot is a home improvement warehouse chain that was established in 1978. The current CEO is Francis Blake, and the company sells shares for over $71. Since the beginning of the year, with a new fiscal year, the company has been doing very well on the stock market. Stocks reached a year-low price in late December, but The Home Depot was labeled one of the top hiring companies with the arrival of the new year. A conspiracy appeared within HD's books, involving Lowe's and Orchard Supply (OSH) over a possible specialized monopoly on a large number of goods. Supposedly, this company was providing The Home Depot with better contracts and access to goods only they could sell; naturally, Lowe's attacked both companies, accusing the specialized sales agreement as an attempt to monopolize the home improvement market. However, last FY showed strong results, and stocks flew off the charts - the company reached a 13 year high in stock price, immediately following the earnings conference, especially considering the 34% increase in dividend for 4QT by itself. Our own stocks in the company fared excellently with the earnings report, surging 11% from our $64 purchase tag. We strongly encourage to invest in HD, as the earnings release will attract many more investors, and the ability to make good money.
Lowe's (LOW) - Lowe's is also a home improvement store, and was established in 1952. Although it is older than the former, shares are only about $40. The current CEO is Robert Niblock. LOW observed a trend similar to that of HD - a slight increase in stock price in late November (Christmas trees and decorations, anyone?), followed by another dip with the turn of the year, BUT back on the rise with the new year. It was originally downgraded to a sell status in early January, but new funding with solar companies allowed for sustained growth. Their main solar energy counterpart, Sungevity, received $125 million from investors for solar panel construction in nine states, with the largest contributions to fund California and Arizona (lots of sun). Recently, Lowe's released its earning report to the public and....was a huge hit. Stock prices began falling in the days preceding the report, expecting sub-expectation revenues. Surprisingly, FY2012 net earnings were on a significant rise - 6.5%, to hit an impressive $2 billion. Granted, The Home Depot topped more than twice that, but Lowe's did better than expected. We benefited from the surge, as our investments profited 12% since we bought them. Lowe's seems to be heading on a path to more success, but we advise to invest cautiously. The company is not one with a reputation to always do very well, so we advise caution.
Mattel (MAT) - Mattel is a toy manufacturer and distributor that sells goods on a worldwide basis. It was established in 1948, and holds a dominant share in the toy market (see the list of their current products at http://corporate.mattel.com/our-toys/default.aspx ). The current CEO is Bryan Stockton, and the mega-company sells stocks for $41. The company interestingly, has more share price fluctuations than the previous consumer good companies we discussed. The arrival of 2013 brought some stability with it, however - the American Girls 2013 catalogue was released, and quickly thereafter a new price target was set from $38 to $41. When Mattel published their earnings from the holidays, they boasted a confidant 2%. However, their main competitor, Hasbro, announced a nearly 4% dividend. Investors had already begun shifting stances towards Hasbro with the turn of the year -- they reported fewer sales, but higher earnings in 2012 -- but also announced to layoff a great number of workers in an attempt to save money (what is more important: employment or earnings?). Since these announcements, Mattel has shown consistent growth and we advise to invest in the company now. We have made 13% profit in less than two months, and expect to continue to see growth. Do not be discouraged if profits slow down; they will skyrocket with the Winter holidays, and bring increased dividends at those times.
Target (TGT) - Target is a general retail brand that was established in 1902; the current CEO is Gregg Steinhafel, and stocks sell for about $67. As we first observed statistics, we noticed a disappointing trends downwards in the last years. The recession make its impact, and as investment declined, stock prices began decreasing and hit a low of just over $58 in late 2012. Although revenue decrease slightly in late December as well, revenue for the 4th Fiscal QT was up 0.8%. Also, Target renewed their online shopping with their new Price Match Policy. With major online marketers like Amazon.com, Target introduced a program to draw more customers back to the nationwide brand, both in stores and online. We predicted strong growth following this policy, and shares have since increased to $67.34 (3/11 closing). It has been upgraded by analysts multiple times in the past two months (we were a full month ahead of them), and we continue to back the company. Growth in dividend may slow down, but we still expect long-term increases. Invest!
Wal-Mart (WMT) - Wal-Mart is also a general retail store, and was established in 1909. Stocks are a bit more expensive, topping $72. The current CEO is Gregory Wasson. Wal-Mart's advantage over many large general retail stores (including grocery in many cases), is its international presence. The stores are found everywhere in the United States, in many other countries, and, as we will discuss soon, are appearing on college campuses. Unfortunately for the company, they experienced earnings below expected, and EPS resulted in being only $1.51, instead of $1.53-1.58. In early January, Wal-Mart introduced a new contact lens program, allowing customers to purchase brand name contact lenses for a, well, Wal-Mart price. Also, Wal-Mart has been experimenting with a so-called "Wal-Mart On Campus" - a miniature version of a regular sized store (10% of a normal, 2% of a super-center), to allow college students to still benefit from the the store's low prices. Only two currently exist, but, if they are sustained with growth and more purchases, they could soon sprout on many campuses throughout the states. We encouraged investment in Wal-Mart as well, and have since made over $30 profit on 5 shares.
CVS Caremark (CVS) - CVS is a nationwide pharmacy which also sells general products. It was introduced in 1963, currently sells for $52, and is headed by CEO Larry Merlo. Stocks have been on the rise since late 2011, with relatively few bumps along the way. In January, CVS organized a further group effort to help victims of Hurricane Sandy, creating a partnership between BarnabasHealth, a local clinic group in New Jersey, and its own MinuteClinic. This temporarily allowed for strong growth in investment, but a controversy surrounding extortion via MoneyPak (Green Dot, with PayPal) caused confusion with CVS. The company, one of few still selling MoneyPak's after FBI advisories to take them off the market. These products installed a pop-up, virus-like program on your computer when used, which requested a specific domain and login, followed by a demand to pay a fine to an FBI look-alike. However, once that situation cleared up, CVS returned to its habitual growth, and has, since our own simulated investment, increased almost 6%. We continue to encourage investment, but to expect significant profits mainly in the long-term.
Walgreen (WAG) - Much like CVS, Walgreen is also a nationwide pharmacy with minor general retail. It is larger than the latter by 1300 stores, making it the largest pharmacy in the United States! Walgreen has been showing remarkable growth since taking a large hit in mid-November. To explain such large fluctuations in WAG's stock, the company lost major contracts with drug producers and distributors, forcing it to search for other, more reliable options. Fortunately for Walgreen, they are now back with stable deals. Their major distributor is Alliance Boots, providing 45% of their prescription drugs. On a more recent note (we don't have much to say about Walgreen, really), price targets were risen from $40 to $47 -- that is, until sales begin to drop. February sales were down 2.2%, and investors began taking a hit. More investors + less cash flow = smaller dividends. We projected growth in the company, and it has grown just under 4%, but we do not project significant earnings in stock investment in the short term.
Home Depot (HD) - Home Depot is a home improvement warehouse chain that was established in 1978. The current CEO is Francis Blake, and the company sells shares for over $71. Since the beginning of the year, with a new fiscal year, the company has been doing very well on the stock market. Stocks reached a year-low price in late December, but The Home Depot was labeled one of the top hiring companies with the arrival of the new year. A conspiracy appeared within HD's books, involving Lowe's and Orchard Supply (OSH) over a possible specialized monopoly on a large number of goods. Supposedly, this company was providing The Home Depot with better contracts and access to goods only they could sell; naturally, Lowe's attacked both companies, accusing the specialized sales agreement as an attempt to monopolize the home improvement market. However, last FY showed strong results, and stocks flew off the charts - the company reached a 13 year high in stock price, immediately following the earnings conference, especially considering the 34% increase in dividend for 4QT by itself. Our own stocks in the company fared excellently with the earnings report, surging 11% from our $64 purchase tag. We strongly encourage to invest in HD, as the earnings release will attract many more investors, and the ability to make good money.
Lowe's (LOW) - Lowe's is also a home improvement store, and was established in 1952. Although it is older than the former, shares are only about $40. The current CEO is Robert Niblock. LOW observed a trend similar to that of HD - a slight increase in stock price in late November (Christmas trees and decorations, anyone?), followed by another dip with the turn of the year, BUT back on the rise with the new year. It was originally downgraded to a sell status in early January, but new funding with solar companies allowed for sustained growth. Their main solar energy counterpart, Sungevity, received $125 million from investors for solar panel construction in nine states, with the largest contributions to fund California and Arizona (lots of sun). Recently, Lowe's released its earning report to the public and....was a huge hit. Stock prices began falling in the days preceding the report, expecting sub-expectation revenues. Surprisingly, FY2012 net earnings were on a significant rise - 6.5%, to hit an impressive $2 billion. Granted, The Home Depot topped more than twice that, but Lowe's did better than expected. We benefited from the surge, as our investments profited 12% since we bought them. Lowe's seems to be heading on a path to more success, but we advise to invest cautiously. The company is not one with a reputation to always do very well, so we advise caution.
Mattel (MAT) - Mattel is a toy manufacturer and distributor that sells goods on a worldwide basis. It was established in 1948, and holds a dominant share in the toy market (see the list of their current products at http://corporate.mattel.com/our-toys/default.aspx ). The current CEO is Bryan Stockton, and the mega-company sells stocks for $41. The company interestingly, has more share price fluctuations than the previous consumer good companies we discussed. The arrival of 2013 brought some stability with it, however - the American Girls 2013 catalogue was released, and quickly thereafter a new price target was set from $38 to $41. When Mattel published their earnings from the holidays, they boasted a confidant 2%. However, their main competitor, Hasbro, announced a nearly 4% dividend. Investors had already begun shifting stances towards Hasbro with the turn of the year -- they reported fewer sales, but higher earnings in 2012 -- but also announced to layoff a great number of workers in an attempt to save money (what is more important: employment or earnings?). Since these announcements, Mattel has shown consistent growth and we advise to invest in the company now. We have made 13% profit in less than two months, and expect to continue to see growth. Do not be discouraged if profits slow down; they will skyrocket with the Winter holidays, and bring increased dividends at those times.
Saturday, February 16, 2013
Pharmaceuticals: Accuray (ARAY), AstraZeneca (ANZ), BioTime (BTX), DepoMed (DEPO), Johnson & Johnson (JNJ), Pfizer (PFE)
Welcome back! We hope everyone had a wonderful Valentine's Day and apologize for blogging irregularly! This post will be rather lengthy and will include all the pharmaceutical companies we have yet to speak about.
Accuray (ARAY): Accuray focuses on robotic radio-surgery systems, and was established in 1990. The CEO is Euan Thompson. This company currently sells stocks for about $4.50, confirming our predictions over two months ago prices would severely fall. Since the beginning of the recession in 2008, Accuray has not done well; it sold shares for almost $30 but the cuts in employment and profits caused major problems, which consequently took their toll on the stock market. In late November, it was first rated an 'underperform' by many analysts. Releases later in 2012 showed that profits were only a mere 50% of the expected performance. When we first looked at the company, it was selling for $6.49, but we advised our members to not invest, and it has since hit a trough. We expect a slight increase in profits over last quarter, depending on lab results, but still do not advise investing in ARAY.
AstraZeneca (ANZ): Established in 1992, AztraZeneca is a tad younger than Accuray, and instead focuses on prescription medicine (you may recall "AztraZeneca may be able to help" from many commercials). The current CEO is Simon Lowth. Shares of ANZ currently sell for about $45-46, about the same as prices since 1998. We expected a strong surge of growth at the end of last year, following the signing of new major contracts and promising drug trials. Indeed, until late-January, AztraZeneca experienced strong growth on the market. Unfortunately, analysts predicted below-prediction earnings and share prices have been falling since. As the news wear off, we expect more investment into the company and expect prices to increase again.
BioTime (BTX): BioTime is a company established in 1990, and now headed by Michael West, that concentrates on regenerative medicine, including but not limited to stem cells and neural diseases. As with AztraZeneca, we predicted sustained growth due to good drug results. At this same time, we bought stocks at $3.29, and they reached a high of about $4.70. This was a 42% increase over our purchase price, and a significant source of income in our simulated investments (with $50,000, one could have bought more than 15,000 stocks and made $20,000 in profits). More companies are now approved for stem-cell research and testing, creating more competition. Although BioTime is one of the strongest companies in the industry, investors are now also visiting other options that may prove more lucrative. We advise to remain neutral in investing in BTX; stock prices should not fluctuate significantly over the next few weeks, but we expect slight growth in the long term.
DepoMed (DEPO): DepoMed focuses mainly on central nervous system research and disease treatment. The company was established in 1995 and the current CEO is James Shoeneck. Our first stock market impression of DEPO was of severe instability, alternating up to 75% in a single year. However, more recent observations suggest improving results, thus more investors. After hosting a medical conference, they were named leader in pain medication, and have since gradually gained investor momentum, gaining about 18%. We encourage investment in DepoMed, but make sure to sell your stocks if another company releases excellent results.
Johnson & Johnson (JNJ): Johnson and Johnson is one of the older pharmaceutical companies, dating to 1887, taking a head start into development of health care products. Headed by CEO Alex Gorsky, JNJ sells stocks for about $76. The company saw tremendous sustained growth with the Information Era and slight yet gradual growth since. One of the major results sending JNJ above the $60 was the announcement of the expansion of the psoriasis drug, which treats multiple immune inflammatory disorders. As more suppliers and hospitals buy the drug, the company keeps gaining investors and stock price is about to reach an all-time high. We advise to invest in the company, unless lawsuits from the recent hip replacement recalls cause lawsuits.
Pfizer (PFE): The oldest of our group, the 1849 Pfizer (originally known as Charles Pfizer & Co.), focuses on disease treatments and medicine. The company is headed by Ian Read and stocks sell for about $27. PFE held a constant decline of investment from the Information Era until the 2008 Recession, and now seems to maintain constant growth. The decision to acquire NextWave Pharmaceuticals late last year allowed Pfizer to gain new patents and new grounds in the market, including strong foundations for ADHD medication. The recent split between Pfizer and its animal division, Zoetis (ZTS) is attracting more investors as the focus of the company turns to humans only. Releases of testing for the Lyrica drugs, aimed at curing fibromyalgia (chronic pain), and improved results on stage 3 and 4 cancer also draw in investors. We also encourage investment in PFE and expect growth over the next months.
Accuray (ARAY): Accuray focuses on robotic radio-surgery systems, and was established in 1990. The CEO is Euan Thompson. This company currently sells stocks for about $4.50, confirming our predictions over two months ago prices would severely fall. Since the beginning of the recession in 2008, Accuray has not done well; it sold shares for almost $30 but the cuts in employment and profits caused major problems, which consequently took their toll on the stock market. In late November, it was first rated an 'underperform' by many analysts. Releases later in 2012 showed that profits were only a mere 50% of the expected performance. When we first looked at the company, it was selling for $6.49, but we advised our members to not invest, and it has since hit a trough. We expect a slight increase in profits over last quarter, depending on lab results, but still do not advise investing in ARAY.
AstraZeneca (ANZ): Established in 1992, AztraZeneca is a tad younger than Accuray, and instead focuses on prescription medicine (you may recall "AztraZeneca may be able to help" from many commercials). The current CEO is Simon Lowth. Shares of ANZ currently sell for about $45-46, about the same as prices since 1998. We expected a strong surge of growth at the end of last year, following the signing of new major contracts and promising drug trials. Indeed, until late-January, AztraZeneca experienced strong growth on the market. Unfortunately, analysts predicted below-prediction earnings and share prices have been falling since. As the news wear off, we expect more investment into the company and expect prices to increase again.
BioTime (BTX): BioTime is a company established in 1990, and now headed by Michael West, that concentrates on regenerative medicine, including but not limited to stem cells and neural diseases. As with AztraZeneca, we predicted sustained growth due to good drug results. At this same time, we bought stocks at $3.29, and they reached a high of about $4.70. This was a 42% increase over our purchase price, and a significant source of income in our simulated investments (with $50,000, one could have bought more than 15,000 stocks and made $20,000 in profits). More companies are now approved for stem-cell research and testing, creating more competition. Although BioTime is one of the strongest companies in the industry, investors are now also visiting other options that may prove more lucrative. We advise to remain neutral in investing in BTX; stock prices should not fluctuate significantly over the next few weeks, but we expect slight growth in the long term.
DepoMed (DEPO): DepoMed focuses mainly on central nervous system research and disease treatment. The company was established in 1995 and the current CEO is James Shoeneck. Our first stock market impression of DEPO was of severe instability, alternating up to 75% in a single year. However, more recent observations suggest improving results, thus more investors. After hosting a medical conference, they were named leader in pain medication, and have since gradually gained investor momentum, gaining about 18%. We encourage investment in DepoMed, but make sure to sell your stocks if another company releases excellent results.
Johnson & Johnson (JNJ): Johnson and Johnson is one of the older pharmaceutical companies, dating to 1887, taking a head start into development of health care products. Headed by CEO Alex Gorsky, JNJ sells stocks for about $76. The company saw tremendous sustained growth with the Information Era and slight yet gradual growth since. One of the major results sending JNJ above the $60 was the announcement of the expansion of the psoriasis drug, which treats multiple immune inflammatory disorders. As more suppliers and hospitals buy the drug, the company keeps gaining investors and stock price is about to reach an all-time high. We advise to invest in the company, unless lawsuits from the recent hip replacement recalls cause lawsuits.
Pfizer (PFE): The oldest of our group, the 1849 Pfizer (originally known as Charles Pfizer & Co.), focuses on disease treatments and medicine. The company is headed by Ian Read and stocks sell for about $27. PFE held a constant decline of investment from the Information Era until the 2008 Recession, and now seems to maintain constant growth. The decision to acquire NextWave Pharmaceuticals late last year allowed Pfizer to gain new patents and new grounds in the market, including strong foundations for ADHD medication. The recent split between Pfizer and its animal division, Zoetis (ZTS) is attracting more investors as the focus of the company turns to humans only. Releases of testing for the Lyrica drugs, aimed at curing fibromyalgia (chronic pain), and improved results on stage 3 and 4 cancer also draw in investors. We also encourage investment in PFE and expect growth over the next months.
Sunday, January 20, 2013
...and we are back! Abbott Labs and AbbVie
Happy New Year! The Investment Club is back for more discussion about the stock market and the economy, and we hope reading our blog is one of your New Year's resolutions! :)
We are starting off the year with, as we promised, Pharmaceuticals. These are companies that focus on developmental medicine, drug testing and production, medical products, and health or nutritional health products. As we will begin discussing shortly, success for these companies depend largely on testing results, competition, health conferences, monopolies, and company splits. The most recent split is our focus of research today, Abbott Labs (ABT) and AbbVie (ABBV).
The first of the two companies, Abbott Laboratories, works on the discovery and development of health care products, which include both medical and nutritional products. The company was established in 1900 and is now headed by CEO Miles White. Since the company was made public, it saw little growth until the Information Era (1998). This epoch of new industry and technology created an amazing boom in growth, and, accompanied by a 2:1 split, increased revenue and EPS for ABT. In late November 2012, Abbott Labs was given a 'buy' stock rating considering its 25% increase in equity (a company's balance sheet includes 'assets = liabilities [debt] + equity [gains, money owned]). A few days later, it announced a split within the company to produce a new independent company, AbbVie. Now, Abbott Labs is doing well, and we expect continued growth. We bought some stocks (simulated on Investopedia) at $30.07, and sold them on Friday before closing, at $32.74.
Our other company for today, AbbVie, is the latest 'offspring' of Abbott Laboratories. This company was created in 2012 from the split and began trading on the market on January 2nd, 2013. AbbVie focuses more on specialized drug testing, including treatments for arthritis, HIV, cystic fibrosis, Parkinson's, other major degenerative diseases, and many more. Unfortunately, we cannot delve far into the stock history of ABBV as it shares all history with ABT up until its stock independence. However, we can say that AbbVie is showing prominent efforts already. It was considered one of the best pharmaceutical investments for 2013, and it is a company we are already investing more in. We bought 8 stocks are $35 a week ago, and they now sit at $37.32, with about 40 more to be bought on Tuesday.
We are starting off the year with, as we promised, Pharmaceuticals. These are companies that focus on developmental medicine, drug testing and production, medical products, and health or nutritional health products. As we will begin discussing shortly, success for these companies depend largely on testing results, competition, health conferences, monopolies, and company splits. The most recent split is our focus of research today, Abbott Labs (ABT) and AbbVie (ABBV).
The first of the two companies, Abbott Laboratories, works on the discovery and development of health care products, which include both medical and nutritional products. The company was established in 1900 and is now headed by CEO Miles White. Since the company was made public, it saw little growth until the Information Era (1998). This epoch of new industry and technology created an amazing boom in growth, and, accompanied by a 2:1 split, increased revenue and EPS for ABT. In late November 2012, Abbott Labs was given a 'buy' stock rating considering its 25% increase in equity (a company's balance sheet includes 'assets = liabilities [debt] + equity [gains, money owned]). A few days later, it announced a split within the company to produce a new independent company, AbbVie. Now, Abbott Labs is doing well, and we expect continued growth. We bought some stocks (simulated on Investopedia) at $30.07, and sold them on Friday before closing, at $32.74.
Our other company for today, AbbVie, is the latest 'offspring' of Abbott Laboratories. This company was created in 2012 from the split and began trading on the market on January 2nd, 2013. AbbVie focuses more on specialized drug testing, including treatments for arthritis, HIV, cystic fibrosis, Parkinson's, other major degenerative diseases, and many more. Unfortunately, we cannot delve far into the stock history of ABBV as it shares all history with ABT up until its stock independence. However, we can say that AbbVie is showing prominent efforts already. It was considered one of the best pharmaceutical investments for 2013, and it is a company we are already investing more in. We bought 8 stocks are $35 a week ago, and they now sit at $37.32, with about 40 more to be bought on Tuesday.
Tuesday, December 18, 2012
Facebook: Blue in Person, Gold in Investment
Happy Tuesday to everyone! First, I would like to congratulate our Vice-President, Chris Cattafi, on his acceptance to NYU! Also, we know everyone is busy over the holidays therefore this will be our last post of the calendar year. We wish everyone Happy Holidays, Merry Christmas, and a Happy New Year (full of investing ;) ).
Our post today is about social network giant Facebook (FB). First established to compare people, and then as a social media site reserved exclusively for top-tier universities, Facebook now has over one billion users every month. Taken from a Harvard dorm room, the company established and run by CEO Mark Zuckerberg since 2004 is the epitome of modern online communications. Since the conglomerate is free, FB builds its revenue from advertising, lots and lots of advertising. For those of you who use Facebook, you most likely notice the right column filled with ads, often times specialized. You may also notice throughout the site the ability to advertise, create a page for a business, and even promote one's recently posted status update to ensure everyone will see it! These abilities, some of them quite ridiculous, build the bulk of revenues, and the recent addition of more advertising opportunities are sending stocks skyrocketing.
As we look at Facebook's stock history, we see a sharp drop since the beginning, a slight curve back up, and a drop down towards $20 a share. We all remember Facebook's first day on the market; easily one of the biggest failures, sinking about $12 in a week. Stocks have again been falling since July, but with new advertising campaigns are on the rise again.
In late October, Facebook sought such new programs to increase profits, investment, and overall reliability on the stock market. The newly announced campaign allowed Facebook to open at $24 on October 24th, while it closed at $20 on the 23rd. This 25% increase slowly fell back down towards mid-November, but is now tremendously rising again. When hitting a monthly low, Facebook predicted less revenue than the previous quarter. Fortunately (and for us), I predicted that stocks would quickly rise again -- we bought 90 shares of FB on the Investopedia Stock Simulator priced at $22.34 each nearly a month ago. This fairly large investment, of over $2000, has certainly paid off. When starting to write this, I sold all 90 shares at $27.81, in accordance to my predicted jump upwards. The difference between buy/sell amounts to a profit of almost $500, an outstanding 25%. Now is a better time than ever to invest in Facebook: it is headed back into the top of the market and we expect even more growth and profits over the next year. Perhaps a New Year's resolution could be to invest more in FB!
Thanks for reading our posts about the Stock Market and the global economy. We will write again in January to analyze Pharmaceuticals, and follow with Consumer Goods to analyze holiday shopping a few weeks later. With that, the Investment Club at LMHS wishes everyone Happy Holidays and a Happy New Year!!!
Our post today is about social network giant Facebook (FB). First established to compare people, and then as a social media site reserved exclusively for top-tier universities, Facebook now has over one billion users every month. Taken from a Harvard dorm room, the company established and run by CEO Mark Zuckerberg since 2004 is the epitome of modern online communications. Since the conglomerate is free, FB builds its revenue from advertising, lots and lots of advertising. For those of you who use Facebook, you most likely notice the right column filled with ads, often times specialized. You may also notice throughout the site the ability to advertise, create a page for a business, and even promote one's recently posted status update to ensure everyone will see it! These abilities, some of them quite ridiculous, build the bulk of revenues, and the recent addition of more advertising opportunities are sending stocks skyrocketing.As we look at Facebook's stock history, we see a sharp drop since the beginning, a slight curve back up, and a drop down towards $20 a share. We all remember Facebook's first day on the market; easily one of the biggest failures, sinking about $12 in a week. Stocks have again been falling since July, but with new advertising campaigns are on the rise again.
In late October, Facebook sought such new programs to increase profits, investment, and overall reliability on the stock market. The newly announced campaign allowed Facebook to open at $24 on October 24th, while it closed at $20 on the 23rd. This 25% increase slowly fell back down towards mid-November, but is now tremendously rising again. When hitting a monthly low, Facebook predicted less revenue than the previous quarter. Fortunately (and for us), I predicted that stocks would quickly rise again -- we bought 90 shares of FB on the Investopedia Stock Simulator priced at $22.34 each nearly a month ago. This fairly large investment, of over $2000, has certainly paid off. When starting to write this, I sold all 90 shares at $27.81, in accordance to my predicted jump upwards. The difference between buy/sell amounts to a profit of almost $500, an outstanding 25%. Now is a better time than ever to invest in Facebook: it is headed back into the top of the market and we expect even more growth and profits over the next year. Perhaps a New Year's resolution could be to invest more in FB!
Thanks for reading our posts about the Stock Market and the global economy. We will write again in January to analyze Pharmaceuticals, and follow with Consumer Goods to analyze holiday shopping a few weeks later. With that, the Investment Club at LMHS wishes everyone Happy Holidays and a Happy New Year!!!
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