1. Philip Morris
a. Good for investors:
i. gained 10% in 10 months (1/2013)
ii. Despite being hated, this stock is up more than 95% in the past three years while the S&P; 500 is up 19%.
iii. The company does business in 180 countries and owns seven of the world’s top 15 global brands in its market.
iv. Then there are the buybacks. Since May 2008 the company has repurchased more than $20 billion in stock — or nearly 20% of the outstanding shares.
v. In the last three years, it has returned more than $12 billion in dividends while increasing the payments per share by 46%. Today, the shares pay a yield of 3.4%.
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b. Bad for Mankind
i. Tobacco kills more than 400,000 Americans each year and 5 million worldwide
ii. CEO Louis Camilleri: claimed Smoking is “not that hard to quit” campaign
iii. Unfair Trade: Admitted in 2010 that at least 72 children were working for the farms that provided their tobacco
2. Walmart
a. Good for Investors
i. (graph)
ii. Net Sales continue to increase – 5.9% in 2012
iii. Gross Profit Margin for 2012: 24.5%
iv. Net income per share of common stock: $4.54 (highest in the last 5 years)
v. Dividends declared per common share: 1.46 (highest in the last 5 years)
b. They Brand We Love to Hate
i. 26,267,445 fans as of 1/21/2012
1. most Liked brand on Facebook
ii. . In the U.S., Walmart’s reported emissions grew by roughly 7 percent between 2005 and 2009. In Asia, its greenhouse gas emissions have doubled. The company expects 13 million metric tons of cumulative growth in emissions by 2015.
iii. Healthcare
1. Walmart stopped offering health insurance to part-time employees (working less than 24 hours per week) in 2012.
2. in 21 of 23 states which have disclosed information, Walmart has the largest number of employees on the public rolls of any employer
3. For employees earning $8.81/hour working an average of 34 hours per week, some of Walmart’s 2012 healthcare plans would cost between 77% and 104% of the employee’s annual gross income. At this rate, an employee who works Walmart’s definition of full-time (34 hours per week) makes just $15,500 per year.
4. Three major studies – one in Georgia, one in California, and one in Massachusetts – found that Walmart was the employer that had workers most reliant on government assistance. It is estimated that Walmart employees cost taxpayers more than $1 billion nationwide
5. Encompasses 25% of US food sales
3. Bank of America
a. Faith in Warren Buffet
i. In August of 2011 Warren Buffettpumped $5 billion into Bank of America. The investment had two components: 50,000 preferred shares yielding 6% – redeemable at a 5% premium – and 700 million warrants to buy common shares at $7.14 apiece.
ii. By March of 2012, 72% year-to-date (3.9% higher Friday at $9.60) shares are a comfortable 34% above that $7.14 threshold and Buffett’s 700 million warrants have a paper gain of just over $1.7 billion, not bad for less than seven months.
iii. Where is it now? No report yet, but investors are expecting that the S&P; 500 Index will hit the 1,600 mark in 2013 because…
1. BofA-Merrill Lynch’s researchers lend support to Peery’s picks, noting in a comment published on Dec. 11 that U.S. home prices are expected to rise 3% in 2013. This rise would add to the 5% gain in 2012.
b. (graph)
c. Love to Hate
i. 2nd largest bank in the U.S. (second to Chase)
1. with 2160.85 ($B) in assets
2. and 1035.23 ($B) in deposits
3. 29 million customers
ii. BUT, it ranked 86 out 100 on Forbes’: “Best and Worst Banks” for 2012
1. In January 2008, Bank of America began increasing credit card interest rates by up to 28%, declining to provide explanations
2. WikiLeaks claimed that 5 GB of Bank of America leaks was part of the deletion of over 3500 communications by Daniel Domscheit-Berg,
3. (more at http://www.nationofchange.org/10-reasons-hate-bank-america-1320153713 if necessary)
3 Companies American Consumers Can’t Get Enough of, but Investors Should Be Wary
1. Apple
a. Bad Apple
i. (graph) ii. Since late October, the company’s stock price has dropped some 18 percent, wiping out more than $100 billion of market capitalization. And more curiously, the drop appears to be purely the result of Apple-specific issues
iii. 2012 showed a slowdown in the rate of growth of net sales: from 2010 to 2011, net sales grew 66 percent, buoyed by 311 percent year-over-year growth in iPad sales. But from 2011 to 2012, overall net sales growth was “only” 45 percent.
iv. Apple’s share of global tablet sales has fallen from about two thirds to half;
1. Meanwhile, Google’s Android operating system has about 75 percent of new sales in the smartphone market.
b. Not So American Apple Pie
i. In the 2012 fiscal year, Apple sold just more than 125 million iPhones, bringing in $80.5 billion in net sales from the phone and services, making up just more than half of its total net sales for the year.
ii. Apple has created over 50,000 jobs in the US, but Apple manufacturing in China is still controversial:
iii. Apple’s products are assembled in massive factory complexes in China, run by Foxxconn.
1. The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s workforce lives in company barracks and many workers earn less than $17 a day.
2. Facebook
a. Bad for Investors
i. Facebook (FB) alienated its shareholders in a particularly public drama that played out in many major media outlets in the United States and abroad.
ii. The company’s initial public offering was one of the most widely anticipated since the dot-com bubble of 1999 and 2000, which was immediately followed by a collapse in the value of many of those offerings. In Facebook’s case, it took less than three months for the stock to drop from the IPO price of $35 to below $20.
iii. Facebook has had customer-satisfaction issues, partly due to privacy concerns. It recently did a particularly good job of alienating some of its nearly 1 billion users after it announced that it had the right to republish any and all photos in the accounts of its Instagram service (it later backtracked on that)
b. America Loves to Hate
i. how many Americans are on FB? How many hours are spent on FB each day by Americans?
ii. Penetration of total US Population: 53.97%
iii. Penetration of total US Online Population: 72.9%
iv. 167.4 million users on FB in the US
v. Just how much are advertisers making with all of those annoying widgets on your newsfeed?
1. Average CPM (cost per mille or Cost per impression) : $.11
2. Average CPC (cost per click): $.71
3. Microsoft
a. Bad for Investors? Jury is still out.
i. (graph)
ii. In Spite of 2012 innovations, prices of stock or hovering at a low $25.29 (down from $32 at the peak of the year)
b. The thoughts that count
i. 25 million Outlook.com users since July 2012
ii. 1 billion Skype users
1. In the first quarter of FY13, more than 120 billion minutes’ worth of calls were made using Skype, a 58 percent year over year increase.
iii. Halo 4 earned US$220 million in global sales during its first 24 hours of release.
iv. More than 70 million Xbox 360 consoles have been sold worldwide since the product launched.
v. 4 billion Windows 8 upgrades
