When should you sell Terra Nitrogen (TNH)?

When should you sell Terra Nitrogen (TNH) if you own it or are considering shorting it?  Terra Nitrogen’s stock price has increased 43.6% in the past year while the S&P 500 has only risen 0.9%.  I don’t know why the stock’s price has rocketed since April 2011.

Image001

http://stockcharts.com/h-sc/ui?s=TNH&p=W&b=5&g=0&id=p33864843115

The stock is currently yielding 8.1% at today’s price of $183.38 per share.  It is now paying a $3.75 quarterly dividend on $3.95 in earnings per quarter.  This brings the dividend payout ratio up to a worrying 95%.  I like dedicated dividend payouts of between 50% and 80% (dedicated, but not too high).

TNH has an average adjusted earning power of $9.97 over the past five years.  Consider buying at or below $119.64 (12 times average adjusted earnings).  Consider sell at or above $  $199.40 (20 times average adjusted earnings).  It is almost sell time.

Their balance sheet is strong.  To read the other articles I’ve written on Terra Nitrogen click here: http://www.myhighdividendstocks.com/category/high-dividend-stocks/terra-nitrogen

Disclosure: I don’t own Terra Nitrogen (TNH).

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Published in: on August 31, 2011 at 3:21 pm  Leave a Comment  

Ron Paul’s best interview to date. Economics in one interview.

I just finished watching CNBC's "Meeting of the Minds" show with some of the most elitist people I've ever seen.  The video link is not the one I just watched, but the posted videos are typical of the republocrat solutions.
 
They were all a bunch of republocrat hardcore Keynesian statists.  Even former General Electric CEO sounded like a 80% free market / 20% socialist.  They had no solutions because they don't understand Austrian economics.  They don't understand capitalism.  That means that they don't understand that the customers are in charge in a capitalist society because they hold the most desirable commodity – money.  Government regulation prevents producers from competing against one another to please customers.  Regulaton does this by creating barriers to entry more commonly know as liceansing and bureaucratic redtape.
 
None of the so-called "minds" had anything to say about the crux of the problem.  The problem is a lack of sound money and individual liberty.  Ron Paul explains this better than any economist at the Federal Reserve.  See the video below.
 
The people calling themselves the government and the Federal Reserve are destroying the environment for accumulating capital.  This is not good because our standard of living will worsen due to the policies since 1913 (the creation of the Federal Reserve).

The Best Ron Paul Interview Ever?
Ron Paul schools neocon Chris Wallace, who is suddenly respectful of his surge

Recently by Ron Paul: The Illusion of Safety

Ron Paul joins Chris Wallace on Fox News Sunday to discuss his rise in the mainstream presidental polls (to #3 on the latest Gallup) and the hot issues of the day. It is impossible not to notice how these interviews have changed. The normally belligerent neocon host was respectful as Ron smoothly and convincingly stated his positions.

Since this interview coincided with the media hysteria about Hurricane Irene, Wallace first asked Ron why he was opposed to FEMA. As the representative of a Gulf Coast district, Ron knows full-well the damage the weather can do. Indeed, he says: "It has the worst reputation for a bureaucracy ever. It hinders local people keeps people away from their homes. It's a system of central economic planning that is deeply flawed…..and it's broke."

Ron also rips the US intervention in Libya. He schools Wallace about the consequences of our destructive foreign policy. When asked about Gaddafi, Ron reminds him that "we've been very bad at picking dictators around the world. We may be delivering al-Qaida another prize."

Regarding Austrian economics – which Ron is actually asked about – he describes his solution for a healthy economy as, government “hands off, free markets, property rights, no bailouts, and sound money.” The Fed has caused endless problems with its policy of keeping interest rates artificially too low for too long. It has to stop monetizing debt.

When asked if he's in it to win it, Ron says Yes – but he wants to take a different approach – Not to seek power, but to seek to diminish it, to diminish dependency on government. People are waking up and saying "Ron Paul is right," he notes. Darn right!

See the Ron Paul File

August 30, 2011

Dr. Ron Paul is a Republican member of Congress from Texas.

Published in: on August 30, 2011 at 5:07 pm  Leave a Comment  

Art Laffer on the stalled economy and why it will get worse

This video contains a lot of common sense and he mentions excess reserves.  That means he is following the money and understand cause and effect.
 
 
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Published in: on August 26, 2011 at 2:27 am  Leave a Comment  

Safe Bulkers on sale, but wait for the bottom.

 
It suggest that the recent 16% in the Baltic Dry Index is forecasting improvement to worldwide economic conditions.  This is nothing but Keynesian wishful thinking.  Government debt crises all over the world coupled with very high unemployment and massive quantities of fiat money printing will sink economies from here.  I like Safe Bulkers, but you will be able to buy it much cheaper than today.
 
It isn't done going down.
 
 
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Published in: on August 23, 2011 at 4:01 pm  Leave a Comment  

Gary North’s Tip of the Week – August 20, 2011 Inflation Calculator

I'm travelling this week so I will borrow a Tip of the Week from a man whom I consider a mentor, Dr. Gary North.
 
* * * * * * * * * *
GARY NORTH'S TIP OF THE WEEK

Gary North's Tip of the Week – August 20, 2011 Inflation
Calculator
=====================================================
  The U.S. government’s Bureau of Labor statistics offers a
useful too free of charge: the inflation calculator. I use it
constantly. I have for at least five years.

    http://www.bls.gov/data/inflation_calculator.htm

 I have created a short link:

            http://bit.ly/BLScalc

  The BLS calculator factors in changes in consumer prices, as
estimated by the BLS's consumer price index (CPI). You can track
this back to 1913. That was the year before the Federal Reserve
System started operations.

  The Federal Reserve was officially created to guarantee price
stability. Test its performance. Type in 1000 in the beginning
year box. Click CALCULATE. See how much money, after taxes, it
would take to match $1,000 in 1913. (Note: there was no income
tax in 1913.)

  Very few financial journalists use this tool on a regular
basis. How do I know? Because they discuss investment returns
from stocks without factoring in price inflation and income tax
payments. Consider this statement:

"And keep in mind, that 'lost decade' wasn’t so for everyone. If
you put $10,000 into the S&P 500 in 2000, you’d have about the
same amount in 2010," Thoma said. But investors who put in $10,000
 over time in regular monthly installments? “Their money would
have grown to over $14,000 during that timeframe, if you were in
a 65/35 portfolio,” Thoma said.

      http://bit.ly/DowJonesLaLaLand

 Use the calculator. Find out what it takes today to match the
purchasing power of $10,000 in 2000. Mr. Thoma didn't. Neither
did the wide-eyed 20-something who wrote the article.

  If you have a 401(k) or IRA retirement account, pick the year
you opened it. See what the dollar bought then compared to now.

  This will help you find out how well your portfolio has done.

  Next, factor in income taxes owed when you cash it out.

  Next, see what the after-tax annual income your portfolio
would generate today if you were 60 years old and you started
living on the dividends generated.

  How is your portfolio working for you?

  You say you don’t want to know? You say this exercise would
depress you?

 That’s why so few people ever use the BLS calculator.

 Reality hurts.

Gary “4 a.m. to 8 p.m.” North
 =============================================
Recent articles posted at www.garynorth.com

================================================================

Japan's Stock Market Set the Pattern for America's Stock Market,
Beginning in 1990.

When you watch Tout TV on the stock market, think "Japan, 1989-201
1." Do not ignore the obvious. The TV talking heads do.

Read the full article at:
< http://www.garynorth.com/members/8393.cfm >

================================================================

Why You Had Better Rent The Company Men in Preparation for 2012's
Job Market

It's not a laugh-a-minute film. It is a good training film.

Read the full article at:
< http://www.garynorth.com/members/8392.cfm >

================================================================

There Are Two Kinds of Resum&eacute;s. Yours Is Probably the
Wrong Kind.

This is not your father's job market any more. Your resum&eacute;
had better reflect this. I will now let you in on a secret. You
will not read this anywhere else.

Read the full article at:
< http://www.garynorth.com/members/8391.cfm >

================================================================

Presidential Politics Today . . . And in 2016

This is a unique election cycle. The system is the same. The
outcome is rigged. The results are predictable, but not the
fallout.

Read the full article at:
< http://www.garynorth.com/members/8390.cfm >

================================================================

The Paradox of Thrift: An Invariable Mark of a Keynesian Who
Knows Zilch About Economics

Keynes said a lot of really silly things, but none so silly as
the paradox of thrift.

Read the full article at:
< http://www.garynorth.com/members/8389.cfm >

That's it for this week!

Visit my site, www.garynorth.com, for the latest charts on the U.S. dollar, gold's price, and Federal Reserve statistics.

Published in: on August 22, 2011 at 4:12 pm  Leave a Comment  

I was 79 seconds short of the Nurburgring world record for a VW Golf GTI. Not bad for my first try.

Today was a dream come true.  I raced on the world famous Nurburgring Nordschleife for 5 laps.  Each lap is 21 km long.  I drove a VW Golf 5 GTI DSG.  The word record for the car I drove is 8:36.  My best lap time was 9:55.  Here is the video of the world record so you can see the roller coaster that this track is with traffic:

Published in: on August 21, 2011 at 2:31 pm  Leave a Comment  

An opportunity to pick up Safebulkers (SB) below $7.00 per share (9.6% dividend yield) will come again.

You had your chance to buy Safebulkers (SB) below $7.00 like I recommended: http://www.myhighdividendstocks.com/category/high-dividend-stocks/sb 
 
SB has gained 21% ($6.20 to $7.56) since its 52 week bottom on August 8th, 2011.  Safebulkers was yielding 9.6% at the bottom also.  It didn't expect you to buy at the exact bottom.  If you used my combination of technical indicators: CCI, Bollinger Bands, and MACD then you would have bought on August 14th or 15th at around $7.00 per share.
 
Disclosure: I don't own Safebulkers yet because I'm paying down some debts.  That is using all my free cash flow, but it pains me to miss this opportunity.  I believe that the next crash of the stock market will take Safebulkers down with it and present more buying opportunities.
 
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Published in: on August 17, 2011 at 4:19 pm  Leave a Comment  

Don’t be aggressive buying (AGRO). Patience, please.

I’m looking for bull markets within the secular bear market.  Precious metals and food commodities come to mind.  There are no high dividend food stocks, but there are some food commodity ETFs and some food production companies.  One of those companies is Adecoagro (AGRO).  The bottom line is AGRO should not be purchased until they can prove they can earn profits.  This company has good potential, so don’t stop reading yet.  They produce crops that people will buy in boom times or bust.  I think the bust will continue plus massive doses of price inflation.

Adecoagro S.A. is an agricultural company in South America, with operations in Argentina, Brazil and Uruguay. It is engaged in a range of businesses, including farming crops and other agricultural products, cattle and dairy operations, sugar, ethanol and energy production and land transformation. As of September 30, 2010, it owned a total of 287,884 hectares, consisted of 21 farms in Argentina, 15 farms in Brazil and two farms in Uruguay. As of September 30, 2010, it owned and operated several agro-industrial production facilities, including three rice processing facilities in Argentina, a dairy operation with approximately 4,500 milking cows in Argentina, two coffee processing plants in Brazil, seven grain and rice conditioning and storage plants in Argentina and two sugar and ethanol mills in Brazil with a sugarcane crushing capacity of 5.2 million tons. It is engaged in three businesses: farming business; sugar, ethanol and energy business, and land transformation business.

The socialist government of Argentina might pass a law restricting foreign ownership of agricultural lands.  This doesn’t help AGRO attract foreign capital to buy new properties and businesses in Argentina.  The CEO explained in the recent conference call that they are going to expand in Brazil and Uruguay where the governments are less hostile.

To hear the recent earnings conference call click on the 1Q11 Webcast button on this site http://ir.adecoagro.com/adecoagro/web/default_en.asp?idioma=1&conta=44

Adecoagro (AGRO)

Market price: $10.12

Shares: 108.87 million

Market capitalization: $1.101 billion

Image002

Dividend record: None.  The company has never paid a dividend.

Earning power: Since 2007 AGRO has an average adjusted earning power of ($0.07) per share.  The company has lost money the last three out of four years.  I only like profitable companies.  It will be interesting to see if AGRO can start producing profits in the next two years.

(Earnings adjusted for changes in capitalization.  Adjusted EPS based on 108.87 million shares)

            EPS                   Net inc.             Adj. EPS            Shares

2006

2007     $0.20                $29.170 M         $0.27                144.105 M

2008     ($0.09)             ($19.334 M)       ($0.18)             204.279 M

2009     ($0.01)             ($0.26 M)          ($0.002)            228.05 M

2010     ($0.36)             ($43.904 M)       ($0.40)             121.667 M

Four year average adjusted earnings per share ($0.07)

Consider buying below $6.51 (less than the 2010 shareholder equity without the recent secondary equity offering)

Consider selling above $9.00 (the current book value per share including the money from the recent secondary offering)

Balance sheet: Up from its purchases of farmland

Image004

Book value per share: $9.00 (TTM and most of it from the recent secondary equity offering)

Price to book value ratio: 1.12 (good)

Current ratio: 2.89 (over 2.0 is good)

Quick ratio: 2.17 (over 1.0 is good)

Disclosure: I don’t own Adecoagro (AGRO) and I won’t until it is profitable without equity offerings.  This one is going on my watch list at $5.00 per share

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Published in: on August 16, 2011 at 2:24 pm  Leave a Comment  

This Alternative to Buying Farmland Could Turn Into a High Dividend Stock.

Jim Rogers and others have been recommending agriculture as an investment.

http://tinyurl.com/3hx5cbt

That got me thinking about high dividend stocks in the agricultural sector.  Guess what?  There are none.  But I did find ConAgra (CAG).  The company has been in business for more than 90 years.  It is a diversified player in the packaged food industry. The majority of its sales are derived from North America. Its portfolio includes such well-known brands as Act II, Banquet, Chef Boyardee, Healthy Choice, Orville Redenbacher’s, Parkay, and Reddi-wip. Beyond grocery retailers, ConAgra also sells to restaurants and other food service establishments. With its Lamb Weston brand, the firm is the largest supplier of french fries in the U.S.

ConAgra is cheap at $23.19, but you will be able to buy it at a deep discount when the “double-dip recession” panics stock market investors.  Wait for the bottom in the $12 – $15 per share range.

ConAgra (CAG)

Market price: $23.19

Shares: 410.80 M

Market capitalization: $9,526,452,000

Image001

Dividend record: ConAgra started paying a 3 cent quarterly dividend in 1987.  The company grew its dividend from 1987 (34 cents) to 2006 (27.25 cents).  Then they missed a quarter in April 2006 (2Q2006).  They resumed paying a dividend in 3Q2006, but the dividend was cut to 18 cents quarterly.  Since then they have paid a quarterly dividend to today’s 23 cents quarterly dividend.

Dividend: $0.23 quarterly

Dividend yield: 3.9% ($0.23 dividend x 4/$23.19)

Recent EPS: $1.90

Dividend payout ratio: 48.4% ($0.92 annual dividend/$1.90 recent EPS)

ConAgra would be a 6% high dividend stock if its price dropped to $15.33 per share.  CAG traded in this range as recent as April 2009.

Earning power: $2.05 EPS @ 410.8 million shares

(earnings adjusted for changes in capitalization.  ConAgra has been buying back shares)

EPS             Net inc.        Adj EPS

2007   $1.51            $765 M         $1.86

2008   $1.90            $931 M         $2.27

2009   $2.15            $978 M         $2.38

2010   $1.62            $726 M         $1.77

2011   $1.88            $817 M         $1.99

Five year average adjust earnings per share: $2.05

Consider buying below $24.65 (12 times avg. adjusted earnings)

Consider selling above $41.00 (20 times avg. adjusted earnings)

ConAgra is trading at 11.3 times average earnings this is value territory.

Balance sheet: Unexciting.  Stagnant since 2007 (assets and liabilities have declined with equity remaining the same)

Image004

Book value per share: $10.83

Price to book value: 2.14 this is good ($23.19/$10.83)

Current ratio: 1.83 (over 2.0 is good)

Quick ratio: 0.86 (over 1.0 is good)

Disclosure: I don’t own ConAgra (CAG)

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Published in: on August 15, 2011 at 1:37 pm  Leave a Comment  

Jim Rogers on QE3

Jim Rogers Says US Needs to Face Reality, Not QE3

Business Intelligence Middle East

 
   

Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers, spoke Monday about the Standard & Poor’s credit rating downgrade of US sovereign debt, saying the ‘no news’ event has nothing to do with the markets plunging and will not affect his investment strategy.

He also discussed the Federal Reserve monetary policy, arguing that further money printing, better known as QE3, will bring more inflation, social unrest and will lead to lost decades for the United States. He urged investors to be prepared as ‘more problems are coming’.

The only thing that will work, he said, is to face reality by letting people that are bankrupt go bankrupt.

Speaking in an interview from Singapore with Rishaad Salamat on Bloomberg Television’s “On the Move Asia” Monday, Rogers said: “Everyone has known that America is the biggest debtor nation in the world”.

Standard & Poor’s decision to cut the US’s long-term debt rating is “not news, it’s not even old news, it’s just not news,” Rogers said.

The US downgrade will not affect financial markets and has not caused the plunge in markets, he argued.

“Markets are coming down because America has problems, Europe has problems, China is trying to slow down…There’s plenty of reasons for markets to come down, but it has nothing to do with S&P,” Rogers told Rishaad Salamat.

Anyone who is investing on the downgrade, should not be investing at all, he said, adding that the world had known – about the US’s problems – for a long-long time.

“The markets look ahead. No none who invests on the news makes any money. The markets are looking 6-12 months ahead and when you look 6-12 months ahead there are some bad things coming.”

Where are markets heading now?

“Normally when you see panic like this it may be getting to building up towards a selling climax. If it gets to a selling climax, I will cover my shorts…because this kind of action usually leads to a reversal at some point,” Rogers said.

What is he buying?

Talking about his investment strategy, Rogers, who predicted the start of the global commodities rally in 1999, reiterated he owned commodities, real assets, especially agriculture, gold and silver.

“If equities continue to fall, I will cover my shorts, perhaps all my shorts, and I will look for things to buy. And it looks as commodities are continuing to be beaten down, that’s where I will put my money,” the legendary investor said.

Gold and silver are going up too high too fast, he said, adding he hoped a correction will take place, “so that I can buy some more”.

“Gold and silver, over the next few years, are going to go much higher, as will agricultural commodities,” Rogers predicted.

“I hope this will protect me if things go bad,” he told Bloomberg.

Gold for December delivery in New York advanced as much as 3.6% to a record US$1,774.80 an ounce today on concern the economic slowdown will worsen. The precious metal has surged 23% this year, heading for an 11th year of gains, as the global sovereign-debt crisis and a faltering economy boost demand for wealth protection.

Gold holdings had their biggest daily advance since May 2010 as of August 8.

Gold also advanced today to a premium over platinum for the first time since December 2008, as demand for a haven outweighed the appeal of platinum used mostly in catalytic converters.

Read the rest of the article

August 10, 2011

Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author ofAdventure Capitalist, Investment BikerHot CommoditiesA Gift to My Childrenand A Bull in China. See his website.

Copyright © 2011 Business Intelligence Middle East

The Best of Jim Rogers

Jim Rogers is correct in his assessment.

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Published in: on August 13, 2011 at 7:42 pm  Leave a Comment