CMYK ➛
THE TIMES LEADER www.timesleader.com
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SUNDAY, JANUARY 1, 2012 PAGE 5D
MarketPulse CASH FOR HOMES More homes are being purchased with cash, thanks to tighter mortgage lending requirements and real estate investors’ appetite for foreclosures.
Homes bought with cash
percent
(est.) 38
38 34 31 28
18
26
19 ‘06
20 ’07
‘08
’09
‘10
THE BANKRUPTCY/CREDIT LINK Bankruptcy filings for 2011 are likely to be down between 10 percent and 12 percent from the nearly 1.6 million in 2010, ac-
The trend picked up momentum in the years since the housing market boom ended and the number of foreclosures skyrocketed, leading to steep declines in home prices. And it continued to do so this year, according to an analysis by Hanley Wood Market Intelligence. The firm estimates 38 percent of homes sold this year were purchased with cash. That's up from 34 percent last year and a twofold increase from 2006, the firm says. Hanley Wood anticipates the trend will continue, as real estate investors make up more of the home buying pool.
’11
Source: Hanley Wood Market Intelligence
HOPE FOR THE HOUSING MARKET? the government reports strong The spring home selling season growth in jobs the next two starts in about two months. It’s months, more people may feel ophard to make a call now about timistic enough to buy. how strong it’s likely to be. This past week, the National Association of Realtors reported that the number of people who signed contracts to buy homes rose more than 7 percent in November to the highest level in a year and a half. And mortgage rates were close to record lows at year’s end. But home sales through November have put 2011 on track to be one of the worst ever for the housing market. And home prices were dropping during the fall. So far, the expectations are that 2012 will be a bumpy year for housing. Still, if
cording to the University of Illinois. But Robert Lawless, a business law professor at the university, warns against viewing the drop as a sign of a stronger economy. Lawless says there’s a link between bankruptcy filings and the availability of credit. He notes that consumers found it harder to borrow during and after the credit crisis in 2008. That means many people have accumulated less debt, and therefore had fewer reasons to file for bankruptcy in 2010. He also says they’re also finding it easier to borrow now, which means they can tap that money to pay bills and avoid bankruptcy.
AP
Up in smoke
How did a quirky mutual fund that specializes in stocks like alcoholic beverage makers and casino developers end up one of 2011’s top-performers? By not letting the year’s double-digit gains for tobacco stocks go up in smoke. The aptly named Vice Fund (VICEX) returned 9 percent in 2011, placing it in the top 1 percent among large-blend stock funds. Four of the fund’s recent top holdings are cigarette makers, and had a stellar 2011. Their gains: Lorillard, 39 percent; Philip Morris International, 34 percent; Reynolds American 27 percent, and Altria Group, 20 percent. Contrast that with the S&P 500 index, which was virtually unchanged. Vice Fund’s tobacco stocks fared better than the other three industries that the fund specializes in: alcoholic beverages, defense contractors and gaming and casinos. Fund manager Gerry Sullivan discusses the 2011 results, and his unique fund:
InsiderQ&A
Sullivan
What’s behind this year’s strong results for tobacco stocks? These companies have hit their projected growth numbers. People are smoking less, yet the tobacco companies have been able to raise prices. And price increases overcompensate for loss of sales, by a factor of 3-to-1. Despite higher prices, everyone seems to remain brand loyal. But people in the U.S. are smoking less, because of health concerns, cigarette tax increases and smoking bans. Isn’t smoking declining in other countries, won’t that hurt tobacco companies? It doesn't seem to be true in Asia, although it does seems to be true in Europe. But the question for tobacco companies is, ‘Whatever loss results from having fewer people smoking, can you make that up in price increases?’ It seems they can. I would have to attribute that to the vice nature of the product. People stick with their brand. What’s your favorite tobacco stock now? Altria. Its dividend yield is about 5.6 percent. Ten-year Treasurys are yielding about 2 percent now. What would you be more comfortable holding for the next 10 years? If there’s inflation, it probably won’t affect tobacco sales much, because people will still smoke. But if there is steep inflation, it will really hurt bond yields. And look at Altria’s record. Its stock has beaten the S&P 500 for 11 years in a row now. Are you a smoker? No. I understand there are health risks. But I believe they are properly disclosed. And I do believe this is a society where you should be able to do what you want. The Vice Fund is explicit about its focus on sin stocks, starting with its name. Does that hinder or help the fund? The fund follows a disciplined approach, and it’s not salacious. The portfolio is very rational and wellmaintained. Its goal is to deliver a high-quality product. It just has a salacious name, and it’s kind of a double-edged sword. We’re hoping the more marketing we do, the less people will look at it as something salacious, and instead look at the fund’s long-term record, and say, ‘Can you get over the name, by looking at its performance, and understanding that it’s disciplined and defensive?’ AP
Mortgage rates near record lows
Optimistic about 2012 the S&P 500 will reach 1,425 by the end of next year. That would be a 13 percent rise from Thursday’s close of 1,263.02. He discussed the outlook for 2012 with The Associated Press. Here are excerpts:
Investors are worried as they head into the new year. They see the European debt crisis as a threat to the U.S. economy. And the recovery in this country inspires little confidence. But David Joy, chief market strategist at the mutual fund and financial planning firm Ameriprise Financial, is optimistic. He predicts that
InterestRates
Money market mutual funds
PRIME FED Taxable—national avg RATE FUNDS Fidelity Select Money Market FRIDAY 3.25 .13 Tax-exempt—national avg 6 MO AGO 3.25 .13 BMO Tax Free MMF/Class Y 1 YR AGO 3.25 .13
The U.S. stock market has been volatile because of Europe’s problems. Do you expect that to continue? Europe will eventually play a smaller role in the U.S. market, but we should expect to see volatility continue in the first quarter, and maybe beyond. It won’t calm down until there’s some mechanism so that the European Central Bank can serve as a lender of last resort. Investors need to be AMERIPRISE FINANCIAL convinced that there will be some CHIEF MARKET firepower behind the European debt STRATEGIST markets to, in essence, bail a country DAVID JOY out if investors turn their backs on it, and a country’s debt financing costs become unmanageable. Italy has a lot of debt coming due that it needs to What impact will low interest rates have? roll over in the first half of next year. So we’ll see the The cost of debt financing for business will remain crisis intensify in the first quarter. Countries like very attractive. If you want to borrow money to build a new plant, it’s cheap. It’s likely to stay cheap, because Greece and Italy face years of austerity, and Europe will be kind of a toothache for the market for a long we don’t see inflation becoming a problem, with 8.6 time, perhaps years. percent unemployment likely to be with us for a while.
What’s the biggest factor leading you to expect a double-digit gain in the stock market next year? Stocks are relatively inexpensive. Although stock prices have climbed since bottoming out in March 2009, they haven’t risen in tandem with the recovery in earnings. And prospects are good that earnings will remain strong, because corporate America remains lean after all the cost-cutting in recent years. And the economy is likely to continue picking up. We’ll probably see growth of about 2.5 percent next year – not great, but better than the 1.6 percent we’re expecting this year.
M kJ
LocalStocks COMPANY
TICKER
ll J
iS h
APD
72.26 6
98.01
85.19
-0.28
-0.3
s
s
Amer Water Works
AWK
25.17 9
32.78
31.86
-0.23
-0.7
s
s 26.0 +29.54
-6.3 —3.78
3
AP
6.1
15
2.7
18
2.9
36.76 7
51.50
45.91
1.57
3.5
s
s
-5.9 -+.05
2 12.9
20
6.4
19.28 7
23.79
22.05
0.03
0.1
s
s
-1.9
+.89
2
1.7
23
3.0
Arch Dan Mid
ADM
23.69 4
38.02
28.60
-0.46
-1.6
t
s
-4.9 —2.74
2
-0.4
9
2.4
AutoZone Inc
AZO
246.26 9 343.90 324.97
-5.33
-1.6
t
s 19.2 +19.22
1 23.0
16
...
Bank of America
BAC
t
t -58.3—58.02 5 -28.0
...
0.7
Bk of NY Mellon
BK
2.6
Bon Ton Store
BONT
CVS Caremark Corp
4.92 1
15.31
5.56
-0.04
-0.7
17.10 2
32.50
19.91
-0.17
-0.8
s
s -34.1—32.48 4 -10.1
9
2.23 1
17.49
3.37
0.03
0.9
s
t -73.4—72.20 5 -35.3
...
5.9
CVS
31.30 0
41.35
40.78
-0.21
-0.5
s
s 17.3 +18.72
16
1.6
Cigna Corp
CI
36.16 4
52.95
42.00
-1.13
-2.6
t
CocaCola
KO
61.29 9
71.77
69.97
0.03
0.0
s
Comcast Corp A
CMCSA 19.19 6
27.16
23.71
-0.02
-0.1
s
s
Community Bk Sys
CBU
21.67 0
28.45
27.80
0.40
1.5
s
s
Community Hlth Sys
CYH
14.61 2
42.50
17.45
0.23
1.3
Entercom Comm
ETM
4.61 2
13.63
6.15
-0.27
-4.2
Fairchild Semicond
FCS
10.25 2
21.02
12.04
-0.16
-1.3
t
s -22.9—22.87 4
-6.5
Frontier Comm
FTR
4.79 1
9.84
5.15
0.03
0.6
t
t -47.1—39.36 4
-7.4
Genpact Ltd
G
13.09 4
18.16
14.95
0.05
0.3
t
s
2 22.1a
19
1.2
Harte Hanks Inc
HHS
7.00 4
13.74
9.09
-0.69
-7.1
t
s -28.8—26.31 4 -17.5
13
3.5
Heinz
HNZ
46.99 9
55.00
54.04
-0.11
-0.2
s
s
9.3 +13.08
1
6.8
18
3.6
Hershey Company
HSY
46.24 0
62.26
61.78
0.78
1.3
s
s 31.0 +33.96
1
6.4
23
2.2
Kraft Foods
KFT
30.21 0
37.93
37.36
-0.09
-0.2
s
s 18.6 +22.25
1
3.8
20
3.1
Lowes Cos
LOW
18.07 8
27.45
25.38
0.11
0.4
s
s
2
-2.7
18
2.2
91.05
1
6.5
s 14.6 +14.68
1
-0.8
9
0.1
s
2 10.1
13
2.7
8.4 +10.40
2
-2.3
17
1.9
0.1 +3.71
2
7.0
14
3.7
t
s -53.3—53.30 5 -13.7
6
...
s
s -46.9—46.89 5 -21.8
6
...
9
...
34 14.6
M&T Bank
MTB
66.40 5
76.34
-0.55
-0.7
s
s -12.3 —9.09
3
-5.9
11
3.7
McDonalds Corp
MCD
72.14 0 101.00 100.33
0.18
0.2
s
s 30.7 +34.00
1 20.0
20
2.8
NBT Bncp
NBTB
17.05 7
24.98
22.13
-0.14
-0.6
s
s
-8.4 —5.05
3
0.5
13
3.6
Nexstar Bdcstg Grp
NXST
4.59 6
10.28
7.84
-0.05
-0.6
t
s 30.9 +30.88
1
11.0
...
...
PNC Financial
PNC
42.70 7
65.19
57.67
-0.90
-1.5
s
s
-5.0 —3.13
2
-2.5
9
2.4
PPL Corp
PPL
24.10 9
30.27
29.42
-0.23
-0.8
t
s
11.8 +17.10
1
0.2
11
4.8
Penna REIT
PEI
6.50 4
17.34
10.44
-0.03
-0.3
s
s -28.1—24.02 4 -15.5
...
5.7
PepsiCo
PEP
58.50 6
71.89
66.35
-0.22
-0.3
s
s
3.7
17
3.1
Philip Morris Intl
PM
55.85 0
79.42
78.48
-0.27
-0.3
s
s 34.1 +38.90
1 25.5a
17
3.9
Procter & Gamble
PG
57.56 0
67.72
66.71
0.04
0.1
s
s
2
3.2
17
3.1
Prudential Fncl
PRU
42.45 4
67.52
50.12
-0.80
-1.6
t
s -14.6—12.16 3
-8.5
6
2.9
SLM Corp
SLM
10.91 5
17.11
13.40
-0.47
-3.4
s
s
2 -22.2
14
3.0
3.7 +6.90 6.4 +8.82
SLM Corp flt pfB
SLMBP 39.09 1
60.00
39.00
-1.10
-2.7
t
t -11.0
...
0.0
Southn Union Co
SUG
23.85 9
44.65
42.11
0.07
0.2
s
s 74.9 +77.44
1 10.0
21
1.4
TJX Cos
TJX
42.55 0
65.50
64.55
-0.76
-1.2
s
s 45.4 +47.04
1 18.7
19
1.2
UGI Corp
UGI
24.07 6
33.53
29.40
0.15
0.5
s
s
-6.9 —3.64
2
4.3
14
3.5
Verizon Comm
VZ
32.28 0
40.08
40.12
0.14
0.4
s
s 12.1 +17.61
1
7.1
16
5.0
WalMart Strs
WMT
48.31 0
60.00
59.76
-0.23
-0.4
s
s 10.8 +13.52
1
7.2
14
2.4
Weis Mkts
WMK
36.52 7
42.20
39.94
-1.78
-4.3
s
s
2
3.1
15
3.0
-1.0 +4.41
... 11.9
Notes on data: Total returns, shown for periods 1-year or greater, include dividend income and change in market price. Three-year and five-year returns annualized. Ellipses indicate data not available. Price-earnings ratio unavailable for closed-end funds and companies with net losses over prior four quarters. Rank classifies a stock’s performance relative to all U.S.-listed shares, from top 20 percent (far-left box) to bottom 20 percent (far-right box).
Stock Screener
1WK
0.02 0.15 0.05 0.24 0.83
0.01 -0.01 0.02 -0.05 -0.15
s s s t t
r t r t t
-0.08 -0.15 -0.13 -0.40 -1.23
0.15 0.34 0.20 0.83 2.39
0.07 0.01 0.16 0.78
10-year T-Note 1.88 30-year T-Bond 2.89 Money fund data provided by iMoneyNet Inc.
-0.14 -0.16
t t
t -1.49 t -1.54
3.72 4.77
1.72 2.72
COMPANY
American Funds BalA m ABALX American Funds BondA m ABNDX American Funds CapIncBuA m CAIBX American Funds CpWldGrIA m CWGIX American Funds EurPacGrA m AEPGX American Funds FnInvA m ANCFX American Funds GrthAmA m AGTHX American Funds IncAmerA m AMECX American Funds InvCoAmA m AIVSX American Funds NewPerspA m ANWPX American Funds WAMutInvA m AWSHX BlackRock GlobAlcA m MDLOX BlackRock GlobAlcC m MCLOX BlackRock GlobAlcI MALOX Dodge & Cox Income DODIX Dodge & Cox IntlStk DODFX Dodge & Cox Stock DODGX Fidelity Contra FCNTX Fidelity DivrIntl d FDIVX Fidelity Free2020 FFFDX Fidelity GrowCo FDGRX Fidelity LowPriStk d FLPSX Fidelity Spartan 500IdxInv FUSEX FrankTemp-Franklin Income A m FKINX FrankTemp-Franklin Income C m FCISX FrankTemp-Mutual Euro Z MEURX FrankTemp-Templeton GlBond A mTPINX FrankTemp-Templeton GlBondAdv TGBAX Harbor IntlInstl d HAINX Oakmark EqIncI OAKBX PIMCO AllAssetI PAAIX PIMCO ComRlRStI PCRIX PIMCO LowDrIs PTLDX PIMCO TotRetA m PTTAX PIMCO TotRetAdm b PTRAX PIMCO TotRetIs PTTRX PIMCO TotRetrnD b PTTDX Permanent Portfolio PRPFX T Rowe Price EqtyInc PRFDX T Rowe Price GrowStk PRGFX T Rowe Price HiYield d PRHYX T Rowe Price MidCpGr RPMGX Vanguard 500Adml VFIAX Vanguard 500Inv VFINX Vanguard GNMAAdml VFIJX Vanguard InstIdxI VINIX Vanguard InstPlus VIIIX Vanguard MuIntAdml VWIUX Vanguard STGradeAd VFSUX Vanguard Tgtet2025 VTTVX Vanguard TotBdAdml VBTLX Vanguard TotBdInst VBTIX Vanguard TotIntl d VGTSX Vanguard TotStIAdm VTSAX Vanguard TotStIIns VITSX Vanguard TotStIdx VTSMX Vanguard Welltn VWELX Vanguard WelltnAdm VWENX Vanguard WndsrII VWNFX Wells Fargo AstAlllcA f EAAFX
18.21 12.55 49.22 32.12 35.16 35.39 28.73 16.76 27.09 26.16 28.40 18.16 16.93 18.24 13.30 29.24 101.64 67.46 25.52 13.12 80.89 35.73 44.49 2.10 2.12 18.95 12.41 12.37 52.45 27.05 11.54 6.54 10.29 10.87 10.87 10.87 10.87 46.09 23.06 31.83 6.49 52.73 115.80 115.80 11.07 115.04 115.05 14.03 10.64 12.27 11.00 11.00 13.06 31.30 31.30 31.29 31.34 54.13 25.78 11.92
-.05 +.08 +.13 -.03 -.66 -.17 -.13 +.02 -.08 -.36 -.11 -.07 -.07 -.07 +.10 +.05 -.66 -.26 -.04 -.44 -.38 -.15 -.26 +.01 +.01 +.17 -.05 -.06 +.15 -.11 -.41 -.85 -.01 +.02 +.02 +.02 +.02 -.32 -.17 -.21 +.02 -.33 -.67 -.67 -.08 -1.35 -1.35 +.05 +.02 -.32 +.07 +.07 -.03 -.19 -.19 -.19 -.23 -.40 -.46 -.23
+.8 +1.1 +1.4 -.6 -2.5 +.3 -1.2 +2.4 +.7 -1.7 +1.9 -1.5 -1.5 -1.5 +1.4 +1.3 +1.1 -1.1 -2.7 +.1 -1.9 -.3 +1.0 +2.7 +2.6 +.5 +.1 +.1 -1.9 -.2 +1.6 -2.7 +.4 +1.5 +1.5 +1.5 +1.5 -3.0 +1.9 -.9 +3.4 -1.0 +1.0 +1.0 +.6 +1.0 +1.0 +2.0 +.4 +.2 +1.1 +1.1 -2.6 +.8 +.8 +.8 +1.7 +1.7 +1.6 +2.0
NO. OF HEDGE FUNDS WITH STOCK AS TICKER TOP 10 HOLDING CLOSE
q 52-WK LOW
52-WK HIGH
1-YR STOCK CHANGE
$310.50
$426.70
25%
GOOG
58
645.90
473.02
646.76
8
Microsoft
MSFT
50
25.96
23.65
29.46
-7
JPM
31
33.25
27.85
48.36
-21
PFE
29
21.64
16.63
21.90
24
QCOM
29
54.70
45.98
59.84
10
GM
28
20.27
19.00
39.48
-45
LYB
24
32.49
22.90
48.12
-4
Liberty Interactive
LINTA
22
16.22
12.44
18.65
4
Baidu
BIDU
21
116.47
95.53
165.96
19
LyondellBasell
Data through Dec. 30
2.15 3.73 3.36 4.84 6.61 0.96
52-WK HIGH LOW
RETURN/RANK 1YR 5YR +4.0/A +6.8/C +3.0/A -7.4/C -13.3/C -1.9/D -4.9/D +5.6/A -1.7/C -7.5/C +7.1/A -3.5/C -4.2/C -3.2/C +5.0/E -16.4/ -4.0/D -.2/B -13.5/C -1.1/D +.3/B -.1/A +2.0/A +2.8/B +2.3/C -8.1/A -2.2/E -2.0/E -11.0/A +.6/C +2.7/ -6.9/ +1.8/C +3.9/E +4.1/E +4.3/E +4.0/E +2.5/C -.7/C -1.2/B +3.9/C -1.5/B +2.1/A +1.9/A +8.1/B +2.1/A +2.1/A +9.7/B +2.1/B -.2/A +8.1/A +8.1/A -14.1/C +1.0/B +1.0/B +.8/B +4.1/A +4.2/A +2.8/B +1.2/
+2.4/B +3.6/E +.9/C -.9/B -1.4/A +.4/A -.6/D +1.7/B -.9/C +.6/A +.1/A +3.6/A +2.8/B +3.9/A +6.3/B -3.5/ -4.1/E +2.6/A -4.6/C +1.1/C +4.0/A +2.0/B -.3/B +2.8/C +2.2/D -.6/A +9.0/A +9.3/A -.7/A +4.4/A +5.6/ +2.3/ +5.2/A +7.6/A +7.8/A +8.0/A +7.7/A +8.4/A -1.0/B +1.1/C +6.7/A +5.5/A -.2/B -.3/B +6.9/A -.2/B -.2/B +5.0/B +4.4/B +1.3/A +6.5/B +6.5/B -3.5/B +.3/B +.3/B +.2/B +3.5/A +3.6/A -1.4/B +2.3/
Rank: Fund’s letter grade compared with others in the same performance group; an A indicates fund performed in the top 20 percent; an E, in the bottom 20 percent.
$405.00
General Motors
3.29 5.31 4.22 5.95 10.15 2.46
CHANGE 1MO 3MO 1YR
4WK
105
Qualcomm
52-WK HIGH LOW
-0.75 -1.17 -0.31 -0.67 0.79 -1.08
WK CHG
AAPL
Pfizer
t t t t t t
FRIDAY NAV
Apple
JPMorgan Chase
t t t t t t
TICKER
What the pros own
You may not know Baidu, but hedge funds love the stock. Hedge funds invest money for rich people, university endowments, pension funds and other big investors. They are lightly regulated, but they give regular updates on what they’re holding. Each quarter, Goldman Sachs strategist David Kostin looks through regulatory filings to see which stocks pop up most often among funds’ top 10 holdings. For the end of the third quarter, he looked at 679 hedge funds. Some stocks on the list aren’t surprising: Apple reported earnings growth of 54 percent last quarter from a year earlier on strong sales of iPads. A quarter before that, growth was 125 percent. But a little further down the list is Baidu, which runs the dominant Internet search engine in China. Its share also trade in the U.S. under the ticker “BIDU.” Its net income rose 90 percent last quarter. A quarter before that, growth was 106 percent. SOURCE: Goldman Sachs; FactSet
FRIDAY YIELD
GROUP, FUND
1 18.2a
2
CHANGE 1MO 3MO 1YR
MutualFunds
APU
1.6 +4.66
-0.05 -0.09 -0.06 -0.05 -0.13 -0.01
3-month T-Bill 1-year T-Bill 6-month T-Bill 2-year T-Note 5-year T-Note
WTR
1.2 +3.19
0.01 0.12 $ 1,000 min (800) 236-3863
2.26 3.79 3.76 4.84 8.34 1.00
TREASURYS
Aqua America Inc
-1.6 —1.64
0.01 0.11 $ 2,500 min (800) 544-6666
1WK
Broad market Lehman Triple-A corporate Moody’s Corp. Inv. Grade Lehman Municipal Bond Buyer U.S. high yield Barclays Treasury Barclays
Amerigas Part LP
6.4 +9.24
MIN INVEST PHONE
YIELD
FRIDAY YIELD
U.S. BOND INDEXES
52-WK RANGE FRIDAY $CHG %CHG %CHG %RTN RANK %RTN LOW HIGH CLOSE 1WK 1WK 1MO 1QTR YTD 1YR 1YR 5YRS* PE YLD
Air Products
The average rate on the 30-year fixed mortgage rose slightly to 3.95 percent. The previous week’s average of 3.91 percent was the lowest on record dating to the 1950s. Rates have been below 5 percent for nearly all of 2011. Mortgage rates are tied to Treasury yields, which fall when demand for Treasurys rise. Investors have been buying Treasurys because of the uncertain economy.
q q q
Dow industrials
-0.6% WEEKLY
Nasdaq
-0.5% WEEKLY
LARGE-CAP
S&P 500
-0.6% WEEKLY
SMALL-CAP
Russell 2000
-0.9% WEEKLY
p p q q p n p q
+1.7%
MO +5.5%
YTD -0.8%
MO -1.8%
YTD +1.1%
MO ...%
YTD +0.8%
MO -5.5%
YTD