Posts by Lawrence Lewitinn

  • Markets 'haven't seen enough pain yet': Portfolio manager

    Lawrence Lewitinn at Yahoo Finance 1 day ago

    The Greek crisis may have led to a selloff in global markets worldwide on Monday. And although one portfolio manager sees potential for rougher days ahead, that could create a buying opportunity for U.S. stocks.

    Greece decided to default on a €1.55 billion ($1.73 billion) payment to the International Monetary Fund scheduled for Tuesday. After failing to come to an agreement with the “troika” – the IMF, the European Commission, and the European Central Bank – Greece will be holding a referendum on the troika’s previous proposal this Sunday.

    While the latest bout of uncertainty led to the worst day for U.S. stocks in over a year, the markets have yet to see a full-on correction like it did in 2011. Troy Gayeski, partner and portfolio manager of SkyBridge Capital, a $13 billion alternative asset manager, sees major differences between 4 years ago and today.

    “The European economy is in a much better position today than it was back in 2011 when it was going into a deep recession,” said Gayeski. “The European Central Bank is in the midst of a quantitative easing and have stated they’ll do more if necessary to keep markets calm.”

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  • Harvard's best degree: Dropping out?

    Lawrence Lewitinn at Yahoo Finance 2 days ago

    After a successful IPO, FitBit's (FIT) founder and CEO James Park is now worth more than $700 million dollars.

    But starting and taking a company public is not the only thing Park has in common with other tech entrepreneurs. So is being a Harvard dropout.

    Others in the "class" include Mark Zuckerberg, who famously dropped out of Harvard after starting Facebook (FB) in his dorm room. His battle with the school was even part of the Oscar-winning film "The Social Network"

    Bill Gates is another Harvard dropout. He started Microsoft (MSFT) soon after and is now the world's richest man. According to Forbes, Gates has a net worth of almost $80 billion dollars.

    Some of yesteryear's most important tech leaders also quit Harvard. Polaroid founder Edwin Land left the university after his freshman year.

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    So is dropping out from Harvard the best degree the school can offer?

  • The 5 stocks to buy with rising rates: Portfolio manager

    Lawrence Lewitinn at Yahoo Finance 5 days ago

    As the Federal Reserve gears up to eventually raise interest rates, one portfolio manager says the days of momentum stocks will give way to larger, more established names.

    Since the second half of 2012, the S&P 500 (^GSPC) is up more that 50%, boosted in part by the Fed’s quantitative easing policy and low short-term interest rates. The fed funds rate has been close to 0% since for over half a decade.

    According to Chad Morganlander, portfolio manager at Stifel Nicolaus’ Washington Crossing Advisors, this has been a boon to stocks with high volatility. He calculates returns of 82% over the past 3 years for S&P 500 stocks with high volatility while those with lower volatility have only seen 33%.

    But with the Fed now expected to raise rates within the next several months, Morganlander says investors should take on stocks that have moved more “slow and steady” compared to highflying stocks.

    “Investors should start moving up the quality spectrum,” he said. “They will take leadership position over the high-momentum, high-beta stocks.”

    Chad Morganlander’s picks for rising rates

    Company

    Market cap

    Price (6/25/15)

    Est. 1-year target*

    P/E (ttm)

  • Microsoft could get $31m because the U.S. Navy still runs XP

    Lawrence Lewitinn at Yahoo Finance 6 days ago

    The American taxpayer could be shelling out nearly $31 million to Microsoft (MSFT) because the U.S. Navy hasn't updated some of its computers from Windows XP.

    The tech giant ended support on XP back in April 2014. But to keep old software running, the Navy still has about 100,000 computers using the discontinued version of the Windows operating system.

    The Navy is also paying for support on other phased-out Microsoft products as well, including the 2003 versions of Office and Exchange.

    A list of defense contracts was recently released showing the company is getting more than $9 million this year alone. The Navy has options to extend its contract with Microsoft until 2017 with additional payments, making the total potential cost $30,842,980.

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    By the time Windows 8 was launched in 2013, nearly 40% of computers ran XP -- almost as many as those running the more recent Windows 7. As of June 2015, more computers used XP than Windows 8.1.

  • Why the U.S. will beat China: Portfolio manager

    Lawrence Lewitinn at Yahoo Finance 7 days ago

    Chinese stocks have soared in 2015 but one portfolio manager says there’s a market that may outperform China in the next few years – the United States.

    The rally in China’s equity market has been nothing short of astounding. While the Shanghai Composite index (000001.ss) has been volatile over the past month, it’s still up more than 40% this year and has more than doubled in the past 12 months.

    Meanwhile, the S&P 500 index (^GSPC) has managed to gain just 3% year-to-date and is up a relatively modest 8% since this time last year.

    Yet Chad Morganlander, portfolio manager at Stifel Nicolaus’ Washington Crossing Advisors, expects the United States will outperform China in the next couple of years.

    Though he anticipates the Chinese market to gain another 3% to 7% in the short run, “when you go out 12- 18 months, we would be much more cautious on China,” Morganlander said.

    He is particularly concerned with China’s government’s heavy role in the economy and capital markets.

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  • Secret indicator shows Wall Street richest getting richer

    Lawrence Lewitinn at Yahoo Finance 13 days ago

    A handful of small towns are showing the rest of the world just how rich the superrich really are. And according to one market strategist, they also serve as a signal that the superrich are about to get even richer.

    The average home sales price in New York’s Hamptons is now $1.76 million, 3% higher than last year, according to data compiled by Douglas Elliman and Miller Samuel.

    For much of the year, the Hamptons are quiet a collection of small villages of just a few thousand people on the southern shore of eastern Long Island. However, in the summer months, its streets are flooded with luxury cars as it transforms into a playground for New York’s moneyed elite. And the summer rental market there could be showing signs that the gap between the very rich and extremely rich is widening.

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    Colas sees the growing number of $1 million-plus summer rentals as an indication that Wall Street’s richest are getting an income boost.

     

  • Why the market has more room to go

    Lawrence Lewitinn at Talking Numbers 3 mths ago

    D espite a recent pullback in the past few days, the S&P 500 is just 19 away from breaking its all-time high.

    The index is up 12.1 percent in the past year. That’s well above the 7.8 percent average annual return over the last decade, according to Morningstar Data. However, the past five years have seen an average of 15.7 percent annual returns.

    However, many investors and traders are not convinced the S&P 500 has entirely run out of steam.

    “There is a little more room to go,” said Erin Gibbs, equity chief investment officer of S&P Capital IQ Global Market Intelligence. “I am predicting another 5 percent over the next 12 months.”

    Gibbs, who has more than $15 billion in assets under advisory, bases her outlook on projected slower growth in the S&P 500’s earnings. She expects 3 percent earnings growth ahead, lower than the market originally anticipated.

    “That’s largely due to energy weighing on earnings,” said Gibbs. “Without energy, we’re looking at about 4.5 percent growth. This is slower growth than the past two years. Hence I’m expecting slower appreciation than the past two years. That’s where I get my 5 percent appreciation target.”

  • This sector could be the best bet this year

    Lawrence Lewitinn at Talking Numbers 3 mths ago

    Is the best-performing sector so far in 2015 also the best bet for the rest of the year?

    The ETF tracking the S&P 500’s health-care sector (trading under the symbol XLV) is up 6 percent year to date. That easily trounces the returns for the index as a whole, which is currently at around 2 percent.

    One portfolio advisor expects health care to remain the best sector for the balance of 2015 for several reasons.

    “Health care has the highest earnings out of all the sectors in the S&P 500—about 13 percent growth while the index only has 3 percent growth,” said Erin Gibbs, equity chief investment officer at S&P Capital IQ Global Market Intelligence. “We are looking at over four times the rate of growth. It’s also one of only two sectors with double-digits growth.”

    The health-care sector’s valuation is more attractive than the rest of the S&P 500, said Gibbs, noting that the XLV trades at 18.4 times estimated forward earnings versus 17.7 times for the index. “You get only a 4 percent premium on valuations for four times as much growth,” said Gibbs, who has more than $15 billion in assets under advisory. “Not a bad trade-off.”

    The XLV closed at $72.8 4 per share on Thursday.

  • Why this could be the bottom for oil

    Lawrence Lewitinn at Talking Numbers 3 mths ago

    Traders have been getting bearish on oil.

    Despite a rebound in oil prices over the past few weeks, recent data showsthat investors are cooling their exposure to crude. The Commodity Futures Trading Commission said that money managers increased their short positions during the week ending Feb . 24.

    One thing adding fuel to the bear case is the record level of inventories in the United States. The Energy Information Administration reported 444.4 million barrels in storage, “the highest level for this time of year in at least the last 80 years,” the agency said in a statement.

    But all this bearish sentiment may be reason to expect the decline in oil has exhausted itself, according to one trader.

    “The supply/demand situation is certainly pretty negative right now,” said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. “But that’s all pretty well known and it’s all pretty wellreflected in the price.”

    Burkly believes January’s low at $44.45 per barrel is the bottom that crude will see for the year.

    The technicals are also turning up for crude, based on the charts of Mark Newton, chief technical analyst at Greywolf Executions.

  • Gold threatens to break down

    Lawrence Lewitinn at Talking Numbers 3 mths ago

    Gold prices are testing key support again.

    The past month saw a rise in interest rates which, in turn, hit the yellow metal hard.

    Yields on the benchmark U.S. Treasury 10-year note spiked from 1.65 percent at the start of February to over 2.1 percent currently. At the same time, bullion dropped 6 percent and is now trading close to $1,200 per ounce. That is within striking distance of the $1,180 level, which has served as technically significant support several times for well over a year.

    One trader said there’s little reason for investors to hold gold now.

    “In the short term, it’s a protection against volatility, especially currency volatility,” said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. “We saw that in the beginning of this year where we had some surprise central bank actions…. Gold did its job, essentially. But I think we’re past that point now.”

    Gold is also used as a hedge against inflation risk, noted Burkly. “Do we have inflation really picking up? There’s really no evidence of that.”

    That leaves Burkly to conclude that investors should stay away from the metal for now.

    Newton’s longer-term chart of gold is not particularly optimistic.