Yellen's big debut... Blackstone CEO: 'Big pop' in housing is over... KB Home soars... Former Chrysler CEO: More woes for Tesla... U.S. current account deficit at its lowest level in 14 years... Join us in Dallas... How to follow stop losses...
The markets were quiet today leading up to the release of the Federal Open Market Committee hearing... Federal Reserve Chair Janet Yellen's first since taking the reins from Ben Bernanke.
Leading up to the meeting, the Fed had set an unemployment goal of 6.5% as a point when it would consider raising rates... We're at 6.7% today.
However, we're not close to the Fed's 2% inflation target... Consumer price inflation ("CPI") – the government's inflation measure that excludes food and energy – rose at an annualized rate of 1.1% in February.
So the Fed will have to set more qualitative goals for monetary policy... It doesn't want to be forced to prematurely raise rates.
Perhaps the Fed will once again lean on its "persistent headwinds" argument to keep rates low. As Wall Street Journal chief economics correspondent Jon Hilsenrath noted on Monday...
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As we expected, the Fed announced it would taper another $10 billion of monthly bond purchases, taking it to $55 billion a month... and would keep interest rates near zero. The Fed moved away from clearly defined measures, and instead said it would monitor "a wide range of information" on the economy to determine when to raise rates. The market wasn't impressed with Yellen's debut. The S&P 500 and Dow Jones both fell around 0.8%.
We agree that the economy is far from out of the woods. But we're not sure Bernanke's argument for the "slow recovery of the housing sector" stands true today.
As we discussed in Monday's Digest, the big institutional players in the single-family homes business are slowing their purchases. The largest single-family landlord – private-equity firm Blackstone Group – decreased spending by 70% from its peak.
Blackstone CEO Steve Schwarzman appeared on CNBC this morning to discuss his firm's housing bet... He noted prices in some markets are up as much as 20%, and the average return on single-family homes is now between 5% and 10%...
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Digest Premium subscribers can learn more about the slowdown of institutional money into the housing sector by reading Monday's Digest Premium... Stansberry's Investment Advisory analyst E.B. Tucker – who headed the research efforts on landlord American Homes 4 Rent – shared his thoughts on why we're seeing a slowdown.
Despite Schwarzman's comments, housing stocks still ripped higher today...
Shares of KB Home, the fifth-largest U.S. homebuilder, soared as much as 10% today on good earnings...
The company earned $10.6 million ($0.12 per share) in the first quarter, up from a loss of $12.5 million a year ago. Analysts were expecting $0.08 per share. The company said its average selling price rose 12% in the quarter. And new home orders rose 6% in the quarter to 1,765.
In January, D.R. Horton, the nation's largest homebuilder, announced its best first quarter since 2006... And said it expected a "very strong" spring season.
Bob Nardelli, former Chairman and CEO of Chrysler, also appeared on CNBC this morning. An anchor asked Nardelli's thoughts on electric-car maker Tesla's ability to circumvent traditional auto dealers and sell cars direct to consumers via showrooms...
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Tesla is one of our favorite whipping boys... Despite losing money, the company's shares trade for nearly 15 times sales. To make it on Porter's "Black List," a company only needs to trade for more than 10 times sales.
We noted Tesla would have a difficult time getting around auto dealerships... They're a powerful lobby with strong, local ties. But that's just one of the company's problems... its cars also catch on fire.
On stage at our inaugural Stansberry Society event in Miami Beach last month, Porter showed the audience this chart...
He explained that while our nation's finances are in shambles, there's still a way out... The energy renaissance we're currently experiencing thanks to hydraulic fracturing ("fracking") and massive shale deposits could alleviate the U.S.' debt problems.
And the chart above – which displays the country's current account deficit (our exports versus our imports) – shows the situation is already improving.
Today, the U.S. Bureau of Economic Analysis reported our current account deficit has reached its lowest level in 14 years – falling to $81.1 billion from $96.4 billion in the third quarter. Our deficit fell from 2.3% of gross domestic product to 1.9% today.
As you can see from the chart below, also from Porter's Miami presentation, we're starting to export more energy...
But we're still waiting on the government to lift the ban on exporting unrefined oil – despite the fact our nation is producing a record amount of it.
We also only have one operational liquefied natural gas (LNG) export terminal in Alaska. The government approved the widespread export of natural gas starting in 2015. And it has approved six applications for LNG export terminals. The closest to completion is the Sabine Pass, Louisiana terminal owned by Cheniere Energy... It's slated to open in late 2015.
Harold Hamm, CEO of Continental Resources, the largest landowner in the Bakken Shale, used the Russia/Ukraine conflict to talk about his book this morning on CNBC.
Hamm said Europe is being held hostage by Russia – Europe depends on Russia for 40% of its imported gas. He said the U.S. should be "aggressively exporting [natural gas] to European allies."
Of course, it's too late to solve this crisis by exporting our abundant natural gas... We're still years away. But it has been a rallying cry for those who support the idea.
The amount of oil and gas being produced domestically today is the single most important economic factor for the U.S. It is the only thing that can help turn this country around.
We've already made a fortune from this boom... But there's still more to come. And we want to provide you with as much information as possible so you're best prepared to profit.
That's why we're hosting our second Stansberry Society meeting this May in Dallas. The conference is energy-focused. And we've invited some of the biggest names in the business to speak...
T. Boone Pickens, the billionaire founder of Mesa Petroleum, is our keynote speaker... He's one of the best-known people in the oil business. And he started a non-profit organization called the Pickens Plan to espouse the benefits of natural gas and raise awareness of the massive amount of energy we're producing in the U.S.
Sprott U.S. Holdings CEO and resource-investing legend Rick Rule is also speaking... Rick is one of the shrewdest investors we know. He has made a fortune in the energy business... And he's an encyclopedia of knowledge when it comes to natural resources.
Porter will share his latest views on the U.S.' energy landscape... As will S&A Resource Report editor Matt Badiali and Small Stock Specialist editor Frank Curzio. And that's just the beginning...
We only have a handful of "early bird" tickets left for Dallas, which we're selling for $299. Once these tickets are sold out, we're raising prices. We doubt we'll have any early bird tickets after today... So don't miss out. You can sign up here.
New 52-week highs (as of 3/18/14): Becton-Dickinson (BDX), Chicago Bridge & Iron (CBI), C&J Energy Services (CJES), Callon Petroleum (CPE), Carrizo Oil & Gas, (CRZO), Diebold (DBD), Dolby Laboratories (DLB), EMC (EMC), Enterprise Products Partners (EPD), Fidelity Select Medical Equipment & Systems Fund (FSMEX), Integrated Device Technologies (IDTI), KLA-Tencor (KLAC), Microsoft (MSFT), and ProShares S&P 500 BuyWrite Fund (PBP).
In today's mailbag, one reader asks how we calculate trailing stops. Send your questions and comments to feedback@stansberryresearch.com.
"'Around the world, offshore exploration can be full of unnecessary drama. Some countries make you hire inexperienced locals... or bribe government officials... or navigate through last-minute tax and regulation changes.'
"Bless you brother, few people realize this fact and it is good of you to comment so. Added to the exploration part is getting one of the offshore facilities built... correctly... the drama will add some color to your local vocabulary. A slight error in your grammar however, replace the OR with AND." – Paid-up subscriber Jim
"I have held BIB for many months. I am not quite sure how you calculate your 15% trailing stop and whether it is on an intraday or closing basis. To play it safe, I closed out my BIB position when it got into the low 90s. Did the newsletter which was holding BIB close it out or are they still holding?" – Paid-up subscriber Lawrence Spilg
Goldsmith comment: We always calculate our trailing stop based on closing prices, unless otherwise noted. DailyWealth Trader editor Amber Mason wrote a great essay in Monday's Growth Stock Wire discussing this very issue (and coincidentally, the same security).
You can also try TradeStops, which will track your stop losses (without entering them in the market) and alert you when it's time to sell. Click here to sign up.
Regards,
Sean Goldsmith
New York, New York
March 19, 2014
Why George Soros just plowed $8.7 million into my favorite shale-oil stock...
S&A Resource Report subscribers are already up 134% in one of Matt Badiali's favorite oil producers... But hedge-fund legend George Soros just bought $8.7 million worth of shares.
In today's Digest Premium, Matt reveals the company... and explains why shares could continue their meteoric rise...
To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.
Why George Soros just plowed $8.7 million into my favorite shale-oil stock...
The markets were quiet today leading up to the release of the Federal Open Market Committee hearing... Federal Reserve Chair Janet Yellen's first since taking the reins from Ben Bernanke.
Leading up to the meeting, the Fed had set an unemployment goal of 6.5% as a point when it would consider raising rates... We're at 6.7% today.
However, we're not close to the Fed's 2% inflation target... Consumer price inflation ("CPI") – the government's inflation measure that excludes food and energy – rose at an annualized rate of 1.1% in February.
So the Fed will have to set more qualitative goals for monetary policy... It doesn't want to be forced to prematurely raise rates.
Perhaps the Fed will once again lean on its "persistent headwinds" argument to keep rates low. As Wall Street Journal chief economics correspondent Jon Hilsenrath noted on Monday...
|
As we expected, the Fed announced it would taper another $10 billion of monthly bond purchases, taking it to $55 billion a month... and would keep interest rates near zero. The Fed moved away from clearly defined measures, and instead said it would monitor "a wide range of information" on the economy to determine when to raise rates. The market wasn't impressed with Yellen's debut. The S&P 500 and Dow Jones both fell around 0.8%.
We agree that the economy is far from out of the woods. But we're not sure Bernanke's argument for the "slow recovery of the housing sector" stands true today.
As we discussed in Monday's Digest, the big institutional players in the single-family homes business are slowing their purchases. The largest single-family landlord – private-equity firm Blackstone Group – decreased spending by 70% from its peak.
Blackstone CEO Steve Schwarzman appeared on CNBC this morning to discuss his firm's housing bet... He noted prices in some markets are up as much as 20%, and the average return on single-family homes is now between 5% and 10%...
|
Digest Premium subscribers can learn more about the slowdown of institutional money into the housing sector by reading Monday's Digest Premium... Stansberry's Investment Advisory analyst E.B. Tucker – who headed the research efforts on landlord American Homes 4 Rent – shared his thoughts on why we're seeing a slowdown.
Despite Schwarzman's comments, housing stocks still ripped higher today...
Shares of KB Home, the fifth-largest U.S. homebuilder, soared as much as 10% today on good earnings...
The company earned $10.6 million ($0.12 per share) in the first quarter, up from a loss of $12.5 million a year ago. Analysts were expecting $0.08 per share. The company said its average selling price rose 12% in the quarter. And new home orders rose 6% in the quarter to 1,765.
In January, D.R. Horton, the nation's largest homebuilder, announced its best first quarter since 2006... And said it expected a "very strong" spring season.
Bob Nardelli, former Chairman and CEO of Chrysler, also appeared on CNBC this morning. An anchor asked Nardelli's thoughts on electric-car maker Tesla's ability to circumvent traditional auto dealers and sell cars direct to consumers via showrooms...
|
Tesla is one of our favorite whipping boys... Despite losing money, the company's shares trade for nearly 15 times sales. To make it on Porter's "Black List," a company only needs to trade for more than 10 times sales.
We noted Tesla would have a difficult time getting around auto dealerships... They're a powerful lobby with strong, local ties. But that's just one of the company's problems... its cars also catch on fire.
On stage at our inaugural Stansberry Society event in Miami Beach last month, Porter showed the audience this chart...
He explained that while our nation's finances are in shambles, there's still a way out... The energy renaissance we're currently experiencing thanks to hydraulic fracturing ("fracking") and massive shale deposits could alleviate the U.S.' debt problems.
And the chart above – which displays the country's current account deficit (our exports versus our imports) – shows the situation is already improving.
Today, the U.S. Bureau of Economic Analysis reported our current account deficit has reached its lowest level in 14 years – falling to $81.1 billion from $96.4 billion in the third quarter. Our deficit fell from 2.3% of gross domestic product to 1.9% today.
As you can see from the chart below, also from Porter's Miami presentation, we're starting to export more energy...
But we're still waiting on the government to lift the ban on exporting unrefined oil – despite the fact our nation is producing a record amount of it.
We also only have one operational liquefied natural gas (LNG) export terminal in Alaska. The government approved the widespread export of natural gas starting in 2015. And it has approved six applications for LNG export terminals. The closest to completion is the Sabine Pass, Louisiana terminal owned by Cheniere Energy... It's slated to open in late 2015.
Harold Hamm, CEO of Continental Resources, the largest landowner in the Bakken Shale, used the Russia/Ukraine conflict to talk about his book this morning on CNBC.
Hamm said Europe is being held hostage by Russia – Europe depends on Russia for 40% of its imported gas. He said the U.S. should be "aggressively exporting [natural gas] to European allies."
Of course, it's too late to solve this crisis by exporting our abundant natural gas... We're still years away. But it has been a rallying cry for those who support the idea.
The amount of oil and gas being produced domestically today is the single most important economic factor for the U.S. It is the only thing that can help turn this country around.
We've already made a fortune from this boom... But there's still more to come. And we want to provide you with as much information as possible so you're best prepared to profit.
That's why we're hosting our second Stansberry Society meeting this May in Dallas. The conference is energy-focused. And we've invited some of the biggest names in the business to speak...
T. Boone Pickens, the billionaire founder of Mesa Petroleum, is our keynote speaker... He's one of the best-known people in the oil business. And he started a non-profit organization called the Pickens Plan to espouse the benefits of natural gas and raise awareness of the massive amount of energy we're producing in the U.S.
Sprott U.S. Holdings CEO and resource-investing legend Rick Rule is also speaking... Rick is one of the shrewdest investors we know. He has made a fortune in the energy business... And he's an encyclopedia of knowledge when it comes to natural resources.
Porter will share his latest views on the U.S.' energy landscape... As will S&A Resource Report editor Matt Badiali and Small Stock Specialist editor Frank Curzio. And that's just the beginning...
We only have a handful of "early bird" tickets left for Dallas, which we're selling for $299. Once these tickets are sold out, we're raising prices. We doubt we'll have any early bird tickets after today... So don't miss out. You can sign up here.
New 52-week highs (as of 3/18/14): Becton-Dickinson (BDX), Chicago Bridge & Iron (CBI), C&J Energy Services (CJES), Callon Petroleum (CPE), Carrizo Oil & Gas, (CRZO), Diebold (DBD), Dolby Laboratories (DLB), EMC (EMC), Enterprise Products Partners (EPD), Fidelity Select Medical Equipment & Systems Fund (FSMEX), Integrated Device Technologies (IDTI), KLA-Tencor (KLAC), Microsoft (MSFT), and ProShares S&P 500 BuyWrite Fund (PBP).
In today's mailbag, one reader asks how we calculate trailing stops. Send your questions and comments to feedback@stansberryresearch.com.
"'Around the world, offshore exploration can be full of unnecessary drama. Some countries make you hire inexperienced locals... or bribe government officials... or navigate through last-minute tax and regulation changes.'
"Bless you brother, few people realize this fact and it is good of you to comment so. Added to the exploration part is getting one of the offshore facilities built... correctly... the drama will add some color to your local vocabulary. A slight error in your grammar however, replace the OR with AND." – Paid-up subscriber Jim
"I have held BIB for many months. I am not quite sure how you calculate your 15% trailing stop and whether it is on an intraday or closing basis. To play it safe, I closed out my BIB position when it got into the low 90s. Did the newsletter which was holding BIB close it out or are they still holding?" – Paid-up subscriber Lawrence Spilg
Goldsmith comment: We always calculate our trailing stop based on closing prices, unless otherwise noted. DailyWealth Trader editor Amber Mason wrote a great essay in Monday's Growth Stock Wire discussing this very issue (and coincidentally, the same security).
You can also try TradeStops, which will track your stop losses (without entering them in the market) and alert you when it's time to sell. Click here to sign up.
Regards,
Sean Goldsmith
New York, New York
March 19, 2014
Editor's note: S&A Resource Report subscribers are sitting on 134% gains in one of Matt Badiali's favorite oil stocks. And hedge-fund legend George Soros just bought $8.7 million worth of shares. Today, Matt reveals the company's name... and explains why there's still plenty of upside left...
It's one of my favorite ways to invest in America's boom in shale-oil production... and apparently, legendary investor George Soros agrees with me.
The company is Penn Virginia (NYSE: PVA). Originally named Virginia Coal & Iron, John Leisenring of Mauch Chunk, Pennsylvania founded the company in 1882 based on his coal-mining interests. In 1967, the company changed its name to Penn Virginia Corp. And over the next 30 years, it acquired oil and gas companies that both produced and piped the products around the U.S.
Starting in 2001, the company began a radical series of changes. It spun off both its coal and pipeline operations. Then the thinned-down company went after shale projects in a big way.
I wrote about Penn Virginia's new focus in the October issue of the S&A Resource Report. At the time, I was interested in it because the company was acquiring huge tracts of land in the giant Eagle Ford Shale in eastern Texas, vastly increasing its holdings there.
In 2010, the company owned just 6,800 net acres in the Eagle Ford Shale. By 2013, it owned 62,300 net acres. In 2011, the company generated just 40% of its revenue from crude oil production. In 2013, it produced 80% of its revenue from crude oil.
I could tell, both from the company's expressed plans and the areas that it invested, that its strategy would pay off for investors. So we bought shares for $6.73.
Yesterday, the fund of legendary investor George Soros announced that it boosted its position in Penn Virginia to more than 9% of the company. The Soros Fund Management hedge fund already had a substantial 5.8 million-share stake in the company. But since the start of 2014, it bought 670,000 more shares, for a total of $8.7 million. The net result of Soros' transactions was to increase his Penn Virginia position from 8.2% of the company to 9.2%.
What's interesting is that his fund paid around $13 per share for its recent acquisitions... almost twice what S&A Resource Report subscribers paid back in October. As you would expect, the market went wild, sending shares of the stock up more than 15%. It hit a new 52-week high at $15.73 per share.
Investment analysts at SunTrust Bank raised their target price from $21 per share to $25 per share on the news. Readers of my S&A Resource Report are up 133% and are likely to make much more on this investment... Because if Soros is buying at $13 per share, Penn Virginia has more room to grow.
– Matt Badiali
Why George Soros just plowed $8.7 million into my favorite shale-oil stock...
S&A Resource Report subscribers are already up 134% in one of Matt Badiali's favorite oil producers... But hedge-fund legend George Soros just bought $8.7 million worth of shares.
In today's Digest Premium, Matt reveals the company... and explains why shares could continue their meteoric rise...
To continue reading, scroll down or click here.
Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)
As of 03/19/2014
| Stock | Symbol | Buy Date | Return | Publication | Editor |
| Prestige Brands | PBH | 05/13/09 | 369.7% | Extreme Value | Ferris |
| Constellation Brands | STZ | 06/02/11 | 289.7% | Extreme Value | Ferris |
| Enterprise | EPD | 10/15/08 | 273.1% | The 12% Letter | Dyson |
| Ultra Health Care | RXL | 03/17/11 | 252.7% | True Wealth | Sjuggerud |
| Ultra Nasdaq Biotech | BIB | 12/05/12 | 236.5% | True Wealth Sys | Sjuggerud |
| Fluidigm | FLDM | 08/04/11 | 228.9% | Phase 1 | Curzio |
| Ultra Health Care | RXL | 01/04/12 | 208.2% | True Wealth Sys | Sjuggerud |
| Hershey | HSY | 12/06/07 | 183.9% | SIA | Stansberry |
| McDonald's | MCD | 11/28/06 | 175.5% | The 12% Letter | Dyson |
| Altria | MO | 11/19/08 | 174.5% | The 12% Letter | Dyson |
Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.
| Top 10 Totals |
| 2 | Extreme Value | Ferris |
| 3 | The 12% Letter | Dyson |
| 1 | True Wealth | Sjuggerud |
| 2 | True Wealth Sys | Sjuggerud |
| 1 | Phase 1 | Curzio |
| 1 | SIA | Stansberry |
Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)
| Investment | Sym | Holding Period | Gain | Publication | Editor |
| Seabridge Gold | SA | 4 years, 73 days | 995% | Sjug Conf. | Sjuggerud |
| Rite Aid 8.5% bond | 4 years, 356 days | 773% | True Income | Williams | |
| ATAC Resources | ATC | 313 days | 597% | Phase 1 | Badiali |
| JDS Uniphase | JDSU | 1 year, 266 days | 592% | SIA | Stansberry |
| Silver Wheaton | SLW | 1 year, 185 days | 345% | Resource Rpt | Badiali |
| Jinshan Gold Mines | JIN | 290 days | 339% | Resource Rpt | Badiali |
| Medis Tech | MDTL | 4 years, 110 days | 333% | Diligence | Ferris |
| ID Biomedical | IDBE | 5 years, 38 days | 331% | Diligence | Lashmet |
| Northern Dynasty | NAK | 1 year, 343 days | 322% | Resource Rpt | Badiali |
| Texas Instr. | TXN | 270 days | 301% | SIA | Stansberry |