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The Stingy News Weekly (07/10/2011)


"Yes, risk-taking is inherently failure-prone. Otherwise, it would be called sure-thing taking."
- Tim McMahon


Stingy News Flash

I recently added the new income trust conversions to the S&P/TSX 60 screening lists. As a result, Yellow Media (YLO) gets top billing on the dividend front but the firm is frankly rather weak and not for the faint of heart. I suspect that its generous dividend will be cut at some point in the future. It's best to do extra due diligence on the trust conversions.


Stingy Links

How rising rates may affect bonds
"While many have been calling for the end of the bond bull market and the damage that awaits bond-heavy investors, I have rarely seen any quantification of the potential losses that bond investors could suffer. So, I ran some simple calculations."


Once Greece goes…
"The economic crisis in Greece is the most important thing to have happened in Europe since the Balkan wars. That isn’t because Greece is economically central to the European order: at barely 3 per cent of Eurozone GDP, the Greek economy could vanish without trace and scarcely be missed by anyone else. The dangers posed by the imminent Greek default are all to do with how it happens."


A free checkup for low-cost investors
"Here’s some free advice for you. If you’re interested in building a portfolio with low-cost mutual funds, you can sometimes get ongoing investment advice at no extra charge. Wondering how much you should invest in stocks and bonds, or how much global diversification you should have? This is exactly the kind of free advice that is available when you buy funds directly from Leith Wheeler Investment Counsel, Matco Financial, Mawer Investment Management, Phillips, Hager and North and Steadyhand Investment Funds."


Mr. Innovation and his buddy, Mr. Great Idea
"Imagine you have $500,000 to feed, shelter and clothe your family for the next 30 years. You need to invest this money to protect your family against inflation. Now, imagine Mr. Innovation shows up on your doorstep and says, “I have a business to sell you and the price I put on it is $500,000.” You reply, “As it turns out, I have that sum to invest, so tell me about your business.” He responds: “All you need to know is that a bunch of PhDs have analyzed the business’s historical share-price movements. Based on their super-computer algorithms, they believe its price will be higher in three months’ time. So give me your money.” Would you do it? My guess is no. Would it surprise you to hear that billions of dollars change hands on the stock market every day based on this approach?"


Dodger Mania
"The result has been a vicious circle: because tax evasion is so common, people trust the system less, which makes them less willing to pay taxes. And, because so many don’t chip in, the government has had to raise taxes on those who do. That only increases the incentive to cheat, since there tends to be a correlation between higher tax rates and higher rates of tax evasion."


Only millionaires should invest in bonds
"A Bond ETF will have a management expense ratio of 25-35bp. The bid-offer spread on seven year bonds purchased in amount of $5,000 will almost certainly exceed this. Additionally, there will be costs associated with further trading, unless you spend amounts exactly equal to your coupon income."


Fear and loathing in the Eurozone
"The problem, as Mundell anticipated, is that if the shocks to the system are not random and are specifically and continually related to one country the concept of currency union begins to fall apart. In particular, if specific countries are characterised by lack of price flexibility and rigid labor laws restricting wage adjustment in response to lack of competitiveness the only alternative is to transfer money from one region to another: and potentially to keep on doing it, till the voters squeak."



DOW 30 Value Screens

High Dividend Yield StocksP/EP/BP/SYield
AT&T (T)5535
Verizon (VZ)1345
Merck (MRK)1325
Pfizer (PFE)1425
Johnson & Johnson (JNJ)3215
Kraft (KFT)1445
Procter & Gamble (PG)2324
General Electric (GE)3544
Intel (INTC)4314
EI DuPont (DD)3134
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Travelers (TRV)5553
AT&T (T)5535
Hewlett-Packard (HPQ)5451
JP Morgan Chase (JPM)5533
Chevron (CVX)5444
Microsoft (MSFT)4213
Intel (INTC)4314
Exxon Mobil (XOM)4342
Wal-Mart (WMT)4353
Cisco (CSCO)4421
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
AT&T (T)55351.61
Travelers (TRV)55532.87
Intel (INTC)43143.46
Chevron (CVX)54443.49
JP Morgan Chase (JPM)55333.69
Wal-Mart (WMT)43534.37
Microsoft (MSFT)42134.50
Johnson & Johnson (JNJ)32154.54
Pfizer (PFE)14254.82
Coca-Cola (KO)41134.84
Notes | More Info...


US Stock SummaryYieldP/EV.R.
AT&T (T)YYY
Intel (INTC)YYY
Chevron (CVX)YY
JP Morgan Chase (JPM)YY
Johnson & Johnson (JNJ)YY
Microsoft (MSFT)YY
Pfizer (PFE)YY
Travelers (TRV)YY
Wal-Mart (WMT)YY
Cisco (CSCO)Y
Coca-Cola (KO)Y
EI DuPont (DD)Y
Exxon Mobil (XOM)Y
General Electric (GE)Y
Hewlett-Packard (HPQ)Y
Kraft (KFT)Y
Merck (MRK)Y
Procter & Gamble (PG)Y
Verizon (VZ)Y
Notes...



S&P/TSX60 Value Screens

High Dividend Yield StocksP/EP/BP/SYield
Yellow Media (YLO)5555
Enerplus (ERF)1515
TransAlta (TA)1445
BCE Inc. (BCE)3245
Sun Life Financial (SLF)5555
ARC Resources (ARX)1215
Penn West Petroleum (PWT)5525
Husky Energy (HSE)3445
Bank of Montreal (BMO)5435
CIBC (CM)5235
Notes | More Info...


Low Price/Earnings StocksP/EP/BP/SYield
Research In Motion (RIM)5450
Penn West Petroleum (PWT)5525
Inmet Mining (IMN)5421
Nexen (NXY)5531
Magna (MG)5453
Sun Life Financial (SLF)5555
Canadian Tire (CTC.A)5553
Yellow Media (YLO)5555
CIBC (CM)5235
National Bank (NA)5334
Notes | More Info...


Value Ratio StocksP/EP/BP/SYieldV.R.
Yellow Media (YLO)55550.36
Penn West Petroleum (PWT)55251.63
Sun Life Financial (SLF)55552.13
CIBC (CM)52352.71
Bank of Montreal (BMO)54352.72
BCE Inc. (BCE)32453.01
Canadian Oil Sands (COS)41243.04
Power Corp of Canada (POW)45553.23
National Bank (NA)53343.41
Husky Energy (HSE)34453.50
Notes | More Info...


Canadian Stock SummaryYieldP/EV.R.
CIBC (CM)YYY
Penn West Petroleum (PWT)YYY
Sun Life Financial (SLF)YYY
Yellow Media (YLO)YYY
BCE Inc. (BCE)YY
Bank of Montreal (BMO)YY
Husky Energy (HSE)YY
National Bank (NA)YY
ARC Resources (ARX)Y
Canadian Oil Sands (COS)Y
Canadian Tire (CTC.A)Y
Enerplus (ERF)Y
Inmet Mining (IMN)Y
Magna (MG)Y
Nexen (NXY)Y
Power Corp of Canada (POW)Y
Research In Motion (RIM)Y
TransAlta (TA)Y
Notes...



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The Rothery Report provides research on select deep-value stocks in North America. Discover overlooked and undervalued stocks in quarterly investment reports which provide detailed analysis of Canadian and U.S. stocks. Weekly email news and additional updates keep subscribers informed about new opportunities and developments.

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