Closing Comment
Closing Comment - September 7, 2010
After a nice rally by the bulls last week, the bears showed up to throw cold water on the party during the first trading session of this holiday-shortened week. With little domestic news on the economy and Corporate America on tap, investors focused most of their attention on news from the other side of the Atlantic, particularly a dour report that surfaced about the health of European banks. Following the lead of several of the European bourses, which reacted poorly to the banking reports, the Dow Jones Industrial Average fell 107 points, to end the day at 10,341.
Stock Highlight
Using the Value Line Page: McDonald’s September 3, 2010
In the late 1990s and early in the new century, investors were concerned that McDonald’s (MCD) was no longer a fast growing company. As a result, its shares dove during 2002. Since hitting a low of $12 a share in early 2003, McDonald’s has proven that growth at this multinational food chain is anything but over.
Commentary
With E-Payments Growing, Visa Beefs Up Its Security and Fraud Prevention
The transition to electronic forms of payments has been a boon to Visa (V) and MasterCard (MA), and debit cards now account for over half of all transactions and more than a quarter of revenues. But as the secular shift continues and security becomes more of a challenge, Visa is looking to beef up its fraud prevention tools.
Stock Screen
Stock Screen: Major Insider Purchases and Sales September 6, 2010
There are any number of events that investors use as buy and sell signals. One of the most often viewed is insider decisions. This week, we ran a screen of insider purchases and sales and turned up interesting insider buying at Dish Network (DISH), PharMerica (PMC), and Titanium Metals (TIE). Selling activity, meanwhile, was seen at Medicis Pharmaceutical Corporation (MRX).
Commentary
Room for Growth in Drug Stocks?
Over the past few decades, the pharmaceutical industry has experienced a period of unprecedented growth. While this performance has been impressive, it also has many wondering if the market is nearing or has reached a peak. At present, the long-term outlook for drug stocks appears largely uncertain, in our view. Several factors are affecting investor perception including the newly passed healthcare legislation and upcoming patent expirations.
Stock Highlight
eBay's Foray into Mobile
Mobile shopping is beginning to take off, and will likely become increasingly important in the coming years. At present, eBay (EBAY) appears well-positioned to benefit from this trend.
Stock Screen
Stock Screen: Low-Risk Stocks for Worthwhile Total Return – September 3, 2010
Conservative investors can readily find low-risk stocks. Of course, there is a tradeoff between risk and return, and low-risk securities often produce commensurately low returns. With this in mind, we screened for stocks that combine below-average risk with worthwhile total return potential over the long haul. Given our stringent criteria, our screen only produced a few names, most of which are blue-chip companies like Intel Corp. (INTC).
Commentary
Tiered Pricing: Good for Telecom and Cable Stocks?
Since the introduction of modern mobile telephone technology, consumers have complained about, and fought against, what they consider to be excessive charges and fees billed by service providers (e.g., AT&T (T), Verizon Communications (VZ), Sprint Nextel (S)). In recent years, the Federal Communications Commission (FCC) has increased its focus on related customer billing and, lately, has paid much attention to consumer protection issues involving broadband speed. Cable (Cablevision (CVC), Comcast (CMCSK), Time Warner Cable (TWC)) and telecom companies want to widely introduce a tiered pricing system, which they believe would unclog networks and establish a fairer fee structure. FCC Chairman Julius Genachowski has been cautious about letting the companies have their way.
Commentary
Investing in China for Non-Experts
China’s rapid growth in the last ten years has attracted plenty of investor interest. But investing in China is not easy for the non-expert, retail investor. A bewildering array of share classes and a considerable state ownership presence are only two of the issues with which investors have to contend. One way to invest in China without taking on too much risk and without having to be an expert in the region is to buy funds such as Matthews China Fund (MCHFX), China Fund, Inc. (CHN), or Guinness Atkinson China & Hong Kong (ICHKX).
Stock Highlight
Coverage Initiation: AFC Enterprises, Inc.
We recently welcomed AFC Enterprises (AFCE) to The Value Line Investment Survey. The Atlanta-based company offers a unique brand of “New Orleans”-style fast food at nearly 1,950 Popeyes restaurants around the globe. We think that the company will serve up pretty decent investment returns, as well, over the next year or so.
Stock Screen
Stock Screen: Best Performing Stocks September 1, 2010
In this screen, we took the stocks with the best price performance over the trailing 13 weeks and then searched for some, like RPC, Inc. (RES) and Priceline.com (PCLN), whose advances seem on solid ground. Our goal is to highlight investments with positive share price momentum. However, our simple screen also turned up some companies, such as The Medicines Company (MDCO), that should probably be avoided.
Using the Value Line Page: Johnson & Johnson August 27, 2010
Healthcare-related companies have been out of favor of late, which should present investors with long-term investment opportunities. This may very well be the case with Johnson & Johnson (JNJ). The Value Line research report for company helps to show why.
Performance of the Model Portfolios: August, 2010
Value Line manages four 20-stock Model Portfolios. They are reviewed in each week’s Selection & Opinion. August was a challenge for each of the portfolios. Portfolios I, II, and III declined more than their common benchmark, the S&P 500 Index (adjusted for dividends), which fell 4.5% for the month. In contrast, the loss posted by Portfolio IV was narrower than its benchmark, the Mergent Dividend Achievers Index, which declined 2.7% in August.
Stock Screen: Major Insider Purchases and Sales August 30, 2010
There are any number of events that investors use as buy and sell signals. One of the most often viewed is insider decisions. This week, we ran a screen of insider purchases and sales and found little of interest on the insider buying side, but Lazard Limited (LAZ), Mohawk Industries (MHK), and VMWare (VMW) all had interesting insider selling going on.
The Value Line Industrial Composite - August 13, 2010
This week we are updating our forecast for The Value Line Industrial Composite (last published in Selection & Opinion on November 6, 2009). The Industrial Composite represents the pooled results of 886 major industrial companies and provides a yardstick for evaluating the historical performance and future prospects of the diverse industrial businesses reviewed by Value Line. All of the companies included in the Composite must possess operating histories of at least eight years.
Insider Decisions and why they matter
Insider decisions show the investment actions of key company employees and beneficial owners of a particular company. These insiders are required to disclose each trade they make involving the stock to the SEC. This information is made public, and can provide useful information for an investor trying to make an investment decision.


