Investment U

Doctor Up Your Portfolio With This Medical Communications Company

Investment U — Fri, 06 Nov 2009 15:06:28 +0000

Doctor Up Your Portfolio With This Medical Communications Company

by Louise Harris, Investment U Research

The healthcare reform debate continues to swirl in Washington. And Marc Lichtenfeld and Louis Basenese have discussed this crucial topic recently, offering their thoughts on the companies best positioned to profit.

That’s because regardless of the back-and-forth and political slanging match, the healthcare sector still offers strong potential for solid returns, due to skyrocketing demand.

In particular, one small-cap poised for gains is the Utah-based firm ZYTO Corp. (OTC: ZYTC). It focuses on medical communication software and services, including an operating system that transfers information from computers to humans.

But ZYTO goes beyond simple data input. It uses patent-pending methods that monitor biological states in near-real time, creating a stimulus-response experience called a bio-survey.

(Translation: It reads life signs and converts them into easily readable data for medical personnel.)

During that bio-survey, computer data – known as virtual stressors – stimulate observable changes in the biological state.

The technology then analyzes the interchange between the computer’s stimulus and the patient’s response, giving medical personnel the information to create comprehensive, client-specific health solutions.

But while the technology is impressive, let’s break the company down in terms that investors can appreciate…

Prognosis for ZYCO: Strong

ZYTO’s third-quarter 2009 earnings doubled, compared with the third quarter 2008, posting more than $1.1 million for the quarter.
Revenue for the nine months ending Sept. 30, 2009 rose 64% from the same period last year.
Demand for the company’s products has increased in Europe and ZYTO expects that trend to continue internationally in the months ahead.
ZYTO has a customer base of 2,000 so far and growing.

With those accomplishments, it’s drawn the attention of Larry Oakley, – founder of WallStreetCorner.com and the Conservative Speculator newsletter.

Touting ZYTO’s 30 million shares outstanding with 9 million floating, and its strong demand, Oakley expects share price to climb to $1.50 by 2010.

Healthy Enough to Take on Change

Due to the increasing global population and longer life expectancy, ZYTO has a ready-made consumer base. As people live longer, they require extra healthcare. And with costs soaring, patients need a way to reign in expenses.

To meet those needs, ZYTO created the Virtual Clinic, which allows patients to access their doctor’s information anywhere in the world. This makes it useful for doctors, too, who can conduct bio-surveys remotely. Saves time. Saves money. Cuts down on mistakes.

Few others have stepped into the niche market of online medical information, despite an increasing reliance on the Internet for anything and everything. That makes ZYTO stand out in the field. And its Virtual Clinic is perfectly suited for the world’s changing healthcare needs.

Even with government interference looming over the industry and the consistently heavy competition within the healthcare sector, I expect demand for ZYTO’s products to increase.

Good investing,

Louise Harris

Editor’s Note: ZYTO is just one small company carving out an exclusive niche for itself in a little-known field. This is exactly the kind of approach that the White Cap Report takes, too. Identify fast-growing companies with unique, critical products in under-appreciated sectors… invest early before Wall Street catches on… and tap into the companies’ powerful position in the industry. Check out this report to see what innovative companies they’re looking at right now.

Dendreon’s Reached Orbit… Now Who’s Next?

Robert Williams — Fri, 06 Nov 2009 14:17:40 +0000

Dendreon’s Reached Orbit… Now Who’s Next?

by Robert Williams, Publisher

When the opening bell rang on Tuesday morning, as the broader market sagged, shares of Dendreon Corp. (Nasdaq: DNDN) sprinted out of the gates, rising by 5.7%.

Unless you live in a cave, you should know about this biotech stock.

Back in April, shares went “parabolic,” blasting 454% higher during the month.

(That’s not a typo. The stock increased almost five-fold over the course of a single month, rendering the S&P 500’s 10% gain over the same period completely insignificant.)

With an impressive move like that, you might think the run is over. But shares will likely head higher still…

You see, Dendreon is blazing a brand new path in biotech. Its prostate cancer drug, Provenge, which it just submitted to the FDA for approval, is the first of its kind. Known as an active immunotherapy, it trains a patient’s immune system to attack deadly cancer cells instead of relying on surgery, radiation treatment, or an injected drug to wipe them out.

In laymen’s terms, Provenge is a cancer vaccine. And the growth for such vaccines is expected to soar by roughly 30% per year through 2012, according to the research firm, RNCOS, Inc. At such a rapid rate, cancer vaccines will account for one-quarter of the global vaccine market.

The good news is that Dendreon isn’t the only player in the space. After all, we’ll need more than one immunotherapy to help combat the 12 million new cancer patients annually. And Dendreon’s success is opening the door for other companies developing immunotherapy treatments that might not otherwise get a chance.

Today, our small and micro-cap specialist Louis Basenese reveals one such company, delivering promising early clinical results, which he believes could ultimately lead to similar profits like those of investors in Dendreon Corp.

A 454% return or more? That’s a bold claim, no doubt. So check in with Louis to find out how it’s possible.

Ahead of the tape,

Robert Williams

Dendreon Corp. (Nasdaq: DNDN): Put These Two Promising Biotech Stocks on Your Watch List

Louis Basenese — Fri, 06 Nov 2009 14:08:25 +0000

Put These Two Promising Biotech Stocks on Your Watch List

by Louis Basenese, Small Cap and Special Situations Expert
Friday, November 6, 2009: Issue #1132

All the hoopla surrounding the biotech stock, Dendreon Corp. (Nasdaq: DNDN), this year is well deserved.

After all, the market potential for its prostate cancer treatment, Provenge, is significant. This year, 190,000 new cases of prostate cancer are expected, with 27,000 deaths from the disease. That makes it the most common non-skin cancer in the United States and the third most common cancer worldwide.

But Provenge takes a novel approach to treatment. The drug is the first active immunotherapy to improve survival by training a patient’s immune system to attack the cancer. And since it uses the body’s natural defenses, patients only report flu-like symptoms instead of the nasty side effects associated with chemotherapy.

This could have a far-reaching effect: If Dendreon’s methodology works to combat prostate cancer, it may also work in combating other cancers, too.

If so, then forget blockbuster… we’re talking mega-blockbuster here.

Dendreon Won’t Be The Only Biotech Reaping Profits

In turn, we could very well see an explosion in the use of immunotherapies, akin to the proliferation of antibody drugs since the late 1980s. And as a first-mover in the space, Dendreon should reap tremendous profits.

But it won’t be the only one.

With over 12 million new cancer patients each year and the lack of any truly effective treatments, it’s only natural for other players to emerge successfully, too. And I’m convinced that a tiny Maryland-based biotech will be one of them.

With a market cap of just $50 million, the good news for us is that Wall Street is completely oblivious to the company’s existence. But don’t expect its anonymity – and its sleepy stock price – to last indefinitely. Here’s why…

Investor Popularity Increases for Dendreon & Northwest Biotherapeutics

As investors become increasingly aware of Dendreon, it’s only natural for them to start hunting for other companies in the biotech sector that may achieve similar levels of success.

And such curiosity will quickly lead them to Northwest Biotherapeutics (OTC BB: NWBO.OB).

The company’s prostate cancer treatment has also shown impressive preliminary results. In fact, the median survival rate for patients receiving Northwest’s DCVax®-Prostate treatment checked-in at 38.7 months. That’s almost a full 20 months better than the median survival rate for standard prostate cancer care.

In the life of a cancer patient, an extra year-and-a-half is a big deal. Most new cancer drugs add only about 10 weeks of additional life.

But Northwest’s overall survival rates after three years are even more impressive.

While just 11% of patients receiving standard prostate cancer care can expect to make it to three years, a staggering 64% of patients receiving Northwest’s treatment made it to three years in the company’s initial clinical trial. The company now has FDA clearance to conduct a large Phase III trial.

Northwest Biotherapeutics: This Biotech Stock is More Than a One-Hit Wonder

Rest assured, I’m excited about Northwest Biotherapeutics because of its strong preliminary results for its prostate cancer treatment. But I’m more enthusiastic about the company because of its pipeline of other drugs.

This isn’t a one-hit wonder biotech stock. Much like Dendreon, Northwest boasts a lineup of multiple drugs that are showing strong promise, based upon preliminary trials.

Take its DCVax®-Brain treatment, for instance…

Two weeks ago, Northwest released updated data from its Phase 1 and Phase1/II clinical trials (conducted at UCLA) for patients with the most lethal type of brain cancer – Glioblastoma multiforme (GBM).

And like DCVax®-Prostate, the results were impressive…

The median survival for the typical patient receiving standard care – surgery, plus radiation and chemotherapy – is 14.6 months. Yet the median survival for patients receiving Northwest’s DCVax®-Brain checked-in at more than double, at 36.4 months.
The treatment also showed tremendous promise in delaying recurrence. Typically, GBM tumors recur in just 6.9 months. But 74% of Northwest’s patients made it one year without recurrence. And the median time to recurrence came in at over two years, at 26.4 months.

With over 12,000 GBM deaths per year in the United States and similar numbers in Europe, as well as much larger numbers for other forms of primary brain cancer, the market potential for DCVax®-Brain is also significant.

Northwest’s drug pipeline also includes treatments for ovarian, breast, lung, liver, head and neck and pancreas cancers, so you can see why I believe the company’s shares could eventually match Dendreon’s appreciation.

If only one or two of Northwest’s products make it to market, the company will be extremely profitable. But we can’t wait until that happens to make an investment.

Why Biotech Stocks Are Not for the Faint of Heart

As Dendreon continues to make positive announcements, Wall Street will inevitably clue into Northwest. And shares will advance well before it actually books a single penny in sales for its treatments. Keep in mind, Dendreon has already enjoyed a massive run-up, but Northwest has not.

In other words, to reap the rewards, we need to be early… and willing to take some risk.

That said, don’t be blinded by the upside potential. You need to be fully aware of the risks when investing in biotech. And when it comes to Northwest, only serious speculators should consider investing. Here’s why…

As I noted, it’s a tiny company, with a market cap of just $50 million, compared to Dendreon’s $3 billion.
Trading volume is seldom more than 50,000 shares per day.
Despite its impressive results, it has large clinical trials to complete and like many biotechs, it will need to continue raising capital.

If you’re comfortable with those risks, invest accordingly. Otherwise, put Northwest on your watch list and monitor its developments for a possible future investment.

I’ll certainly be watching it closely. Like Dendreon, I’m convinced the long-term profits will be significant.

Good investing,

Louis Basenese

Editor’s Note: History has shown time and again that the most explosive stock market returns come when you invest in small, under-the-radar companies that Wall Street and the mainstream crowd know nothing about. And when these stocks hit the big time, that’s when savvy, early investors clean up.

Louis Basenese is a master at unearthing these thriving companies in his White Cap Report investment advisory. Companies with unique, critical products and little competition within their industry. Check out this report to see what innovative companies they’re looking at right now – and how you can tap into their potential.

Beware This Tech-Tonic Shift In The Global Technology Sector

Investment U Research Team — Thu, 05 Nov 2009 18:47:06 +0000

Beware This Tech-Tonic Shift In The Global Technology Sector

by Tony Daltorio, Investment U Research

If you’re betting on a recovery in technology stocks based on third quarter earnings reports from companies such as IBM (NYSE: IBM) and Google (Nasdaq: GOOG), you’re not alone.

While economists and commentators debate the issue, many investors have already placed large bets on a V-shaped recovery for the tech sector.

They have some good reason to think so too, since the tech-heavy Nasdaq composite has risen 70% from its March lows. The problem is, they’re expecting “business as usual” in the industry… meaning they think spending will pick up the way it did in the 1990s.

Kris Gopalakrishman, CEO of Indian tech giant, Infosys (Nasdaq: INFY) – a company in the Xcelerated Profits Report portfolio – sees it differently, though. He warns that capital spending was artificially high in the 1990s: “You had multiple bubbles going around, plus leverage – it was an unusual environment.”

Meanwhile, his competitors have joined him in calling for caution concerning how fast and far tech demand picks up. Although some tech insiders have expressed optimism about 2010, most don’t expect it to differ that much from 2009.

Craig Mundie, chief research and strategy officer at Microsoft (Nasdaq: MSFT), sums up the situation well: “The run-up in stocks seems to have outdistanced the run-up in practical terms of the underlying strength of the businesses.”

He goes on to say: “We don’t think it’s like other recessions. It’s essentially more like a global reset, from which there is going to be slower growth.”

So how can investors play the situation?

Profits Play Hide and Seek With the Technology Sector

If you want to play the tech sector recovery, it’s worth keeping several proven facts in mind…

Costs – not revenues – remain the overriding short-term focus. Since tech executives expect little or no real growth anytime soon, they’ll have to generate profits elsewhere, most likely by reigning in expenses.

In turn, this will lead to a continuation of certain trends that we saw before the downturn, such as…

A further shift of production to the emerging world, where it costs less to make the same products.
Increased consolidation in the form of mergers and acquisitions.
Branching out into new, related markets.

For proof of that, look no further than Cisco Systems (Nasdaq: CSCO), the leading supplier of networking equipment and network management. The firm recently spent $3 billion to acquire Tandberg, a global supplier of video communications equipment.

But tech companies have also begun to invest much more heavily in IT services instead of dealing only in equipment. For instance, in 2008, Hewlett-Packard (NYSE: HPQ) snapped up EDS, while Dell (Nasdaq: DELL) acquired Perot Systems.

One compelling reason for this strategy is that services represent a steadier source of income, thanks in part to the longer-term nature of the contracts involved. Plus, services have the added bonus of typically coming out of a company’s operating budget instead of its capital budget, making the area less vulnerable to swings in capital spending.

Technology companies have a final card up their sleeves, but they may have waited too long to play it…

Take a Byte Out of Emerging Markets

With emerging markets notching up impressive and consistent economic growth, they have an increasing need for a more solid, reliable infrastructure. This includes banking systems, new telecommunications networks and “smart” power grids capable of distributing electricity more efficiently.

And there’s plenty of room for growth, too. While emerging markets account for a mere 21% of global IT spending right now, that will grow to over 50% by 2013, according to technology research company IDC.

So where does this put the West?

Western-based tech companies recognize the buying power countries such as China, India and Brazil hold, but while some of them have the brains and brawn to make it big in emerging markets, they need to move quickly.

That’s because a growing number of local suppliers have sprung up over the past several years. These firms already have a better understanding of their consumers’ needs and present serious competition to anybody trying to move in on their consumers.

All told, big-name technology companies have to adjust if they want to thrive in this new business climate… and investors need to do the same. That means focusing on companies that have large exposure to the emerging economies.

But for now, most technology stocks have run too far, too fast. Investors should approach these stocks with caution.

Good investing,

Tony Daltorio

P.S. The Xcelerated Profits Report team identified the solid growth of emerging market tech firms – and the profit potential to match it – way back in December 2007. Investment Director and emerging market expert Karim Rahemtulla advised readers to buy Infosys shares and sell call options against them. Investors have since lowered their cost further on the position and are set to cash out for a handsome profit in January 2010. For more information on how you can start lowering your risk and bagging profits, too, check out the Xcelerated Profits Report.

Is Warren Buffett Signaling a Housing Recovery?

Robert Williams — Thu, 05 Nov 2009 16:49:37 +0000

Is Warren Buffett Signaling a Housing Recovery?

by Robert Williams, Publisher
Thursday, November 5, 2009

Warren Buffett is teaming-up with Goldman Sachs as the investment bank attempts to buy $3 billion of tax credits from taxpayer-owned mortgage firm Fannie Mae.

According to The Wall Street Journal, investments in low-income housing tax credits has waned dramatically in the face of the credit crisis.

Credits are being sold for between 65 cents and 79 cents on the dollar. By comparison – at the height of the real estate boom – developers were fetching 95 cents on the dollar.

(Property developers receive tax credits – worth between 30% and 60% of a project’s cost – to encourage building in low-income areas and to hold rents down. They typically then sell the credits to large financial institutions for the tax benefits they offer.)

Although Buffett and Sachs surely intend to use the credits to shield profits against taxes, they wouldn’t be speculating here if they didn’t think the credits represented a bargain.

Think about it. Demand for affordable-housing tax credits is picking up. And the only way that can happen is if developers are breaking ground again. And trust me, nothing gets built these days – given the state of the economy – unless a project is a cinch to sell.

As such, use this as further proof of a housing rebound. (The Case-Shiller home-price index just showed U.S. home prices logged their third monthly increase in August.)

But that’s not all that Buffett’s been up to.

David Fessler gets you up to speed on Buffett’s decision to buy railroad firm, Burlington Northern Santa Fe. And offers up a way to profit from the deal.

Ahead of the tape,

Robert Williams

Warren Buffett Goes “All in” on America… How to Play the Oracle’s Big Bet

David Fessler — Thu, 05 Nov 2009 15:20:09 +0000

Warren Buffett Goes “All in” on America… How to Play the Oracle’s Big Bet

by David Fessler, Energy and Infrastructure Expert
Thursday, November 5, 2009: Issue #1131

Last Sunday morning, I embarked on a spirited 60-mile bike ride with a few like-minded 50-somethings. Our route took us along the beautiful Delaware River. The Delaware – named after the Indian tribe that crossed its waters – defines the north-south border between New Jersey and my home state of Pennsylvania.

As we stopped to enjoy the view, we heard the unmistakable whistle of a steam locomotive. We looked up and there it was – New York, Susquehanna and Western’s number 142 – a steam locomotive pulling a line of cars along the Delaware.

One hundred years ago, engines like this – and the rails they ran on – were the backbone of the railroads. When it came to freight and passenger transportation in the United States, railroads were the only game in town.

Flash forward to this week. Warren Buffett – one of the most astute investors in the world – just placed a big bet. He’s gone “all in” on America’s future and bought a railroad company.

So what does this mean for the railroad industry – and what’s the best way to profit from it?

Warren Buffett: Railroad Bull

“Railroads can [move freight] in a very cost effective way, and they do it in an extraordinarily, environmentally friendly way.

“Burlington Northern Santa Fe last year moved a ton of goods 470 miles on one gallon of diesel. It releases far fewer pollutants into the atmosphere, saves enormously on energy consumption, and diminishes highway congestion.”

So said Warren Buffett in a CNBC interview after announcing that Berkshire Hathaway (NYSE: BRK.A) would pay $100 a share for the 75% of Burlington Northern Santa Fe Corporation (NYSE: BNI) that it didn’t already own.

Ever the optimist, Buffett said the decision to make the investment was easy:

“Rails last year moved more than 40% of all the ton-miles of goods in the country. They moved more than all those trucks… just the four big railroads. It’s a very effective way of moving goods.

“I believe that this country will prosper and you’ll have more people moving more goods 10, 20, 30 years from now and the rails should benefit. It’s a bet on the country, basically.”

So what makes those lumbering, seemingly endless freight trains so efficient? And are they really an attractive investment right now? Let’s take a closer look…

Rail Freight: From Bust to Boom

In the years after World War II, the advent of cheap fuel and a brand new interstate highway system led to the rise of “18-wheeler” trucks. As a result, the railroads fell out of favor and inefficiencies and waste abounded.

The situation became so grim for the railroad industry that in the 1980s, the ton-miles per gallon rate for freight transportation was one-tenth what it is today. Many carriers went broke. In the intervening decades, 40% of U.S. railroad track was abandoned. Much of it was ripped up and sold for its scrap value.

But what a difference a few years makes…

With the reality of “Peak Oil,” the nation’s railroads now carry 43% of all freight – nearly 50% more than all the trucks on the road.
Rail transportation is more than three times as efficient, too. For example, you can move one ton of freight an average of 400 miles on one gallon of diesel. Compare that to trucks, which move one ton a mere 130 miles on a gallon.
Hauling capacity is relatively cheap, too. The average cost for a new freight car runs about $81,000 – roughly one-third the cost of a new tractor-trailer truck. And you can string as many as 150 of them together behind a few diesel locomotives, which just adds to the operating efficiency.
Nearly all heavy industries need cheap, bulk delivery. And products from cars to coal are already served by rail. Plus, unlike trucks that have to negotiate city streets and narrow roads, rail lines go under and over them. And they always have the right-of-way.

What’s more… the bulk of the railroad infrastructure is already in place, without the need for much addition. The system has plenty of excess capacity and serves all major cities and towns across America.

According to the American Association of Railroads, there are about 24,000 locomotives and 460,000 freight cars in the United States. They move around on 140,695 miles of maintained track.

Ride the Rails to Profit With Berkshire Hathaway

Burlington Northern Santa Fe isn’t the only railroad that Berkshire Hathaway owns. It also has stakes in Union Pacific Corporation (NYSE: UNP) and Norfolk Southern Corporation (NYSE: NSC). Both stocks rose on the announcement – and both are up significantly since Buffett bought them.

So if you want to jump on board the railroad industry with Buffett, consider Norfolk Southern. Here’s why…

The company’s 21,000 miles of rails touch nearly all heavy industries in 22 states.
It serves every major container port in the eastern United States and provides excellent connections to western rail lines.
Its Crescent Corridor project – an existing 2,500-mile rail network that supports the supply chain from Memphis and New Orleans to New Jersey – is undergoing a $500 million upgrade and expansion.
Three new terminals will be built in Franklin County, PA, Memphis and Birmingham. Track improvements and additions will result in faster freight transportation, efficiency and reliability. And it’s estimated to generate 47,000 jobs in the five partner states.

In his CNBC interview, Warren Buffett commented that businesses we’ve not yet imagined, run by people not yet born, will continue to fuel the United States. And consequently, he expects rail tonnage to increase, with the railroad industry benefiting.

“America’s best years lie ahead. There’s no question about that,” Buffett told CNBC. And with his full purchase of Burlington Northern Santa Fe, he’s putting his money where his mouth is. The move is a bet on the United States, its citizens and the American spirit.

Nice going, Warren. We need more patriots like you and T. Boone Pickens.

Good investing,

David Fessler

Editor’s Note: David Fessler is The Oxford Club’s resident energy and infrastructure specialist. From oil, to wind, to solar, to electricity, he’s got his finger on the pulse of the latest developments, trends and moneymaking opportunities for investors.

What’s more, there’s a really neat story behind how David came to end up working with us. The life-changing story of a forgotten invitation that sat idle for a year until he stumbled across it again, acted upon it, and shared it with us over dinner at an investment conference. We encouraged him to share it with our readers – and here it is.

Fuel Your Portfolio With BHP Billiton (NYSE: BHP): The Best-Run Commodities Company In The World

Investment U Research Team — Thu, 05 Nov 2009 14:37:22 +0000

Fuel Your Portfolio With BHP Billiton (NYSE: BHP): The Best-Run Commodities Company In The World

by Tony Daltorio, Investment U Research

Some companies just stand out – both in their own sectors and in the larger market.

Australian firm BHP Billiton (NYSE: BHP) is one of them.

As the largest and most diversified commodities producer in the world, BHP has leading positions in most key, low-cost, metal and mineral deposits in the world.

And as if that weren’t enough, it also has a solid position in oil, thanks to its petroleum division, which had operating profits of $4 billion last year.

Impressively, that total only made the petroleum division BHP’s third-best performer in 2008. Its iron ore segment scooped up $6.23 billion, while base metals enjoyed a $4.62 billion operating profit.

Crucially, that sets BHP’s oil division apart from its competitors. Not only does it bring in extra revenue, it’s also not overly reliant on the commodity fuel its operations.

So what does this mean for investors?

BHP’s Big Three: Profits, Cash, Growth

Thanks to BHP’s highly disciplined management team, investors have seen consistent profitability. And with $5.6 billion in net debt, that’s significantly less than many fellow mining companies.

In addition, with BHP sitting on almost $11 billion in cash, rumors are swirling that it’s chasing acquisitions, especially in oil and potash.

However, it has no need to rush out and buy anything right away. Thanks in part to a recent $116 billion deal with Rio Tinto plc (NYSE: RTP) to merge the Pilbara iron ore operations in Western Australia, BHP is already well positioned with what it has.

Including the $5.8 billion it plans to sink into the Pilbara venture, BHP has a total of $17 billion already set aside for pre-existing projects over the next 12 months, highlighting the fact that it can grow simply by developing its own rich global asset portfolio.

BHP is Perfectly Poised in Emerging Markets

Like many other companies, BHP knows the strategic importance of establishing a strong base in emerging markets.

And deals like the one with Rio Tinto build strong, long-term shareholder value and help BHP fulfill its long-term mandate of capitalizing on booming emerging market demand.

The rise in consumer purchasing power in China, India, Brazil and other emerging economies will lead to a sharp spike in electricity consumption, as wealthier consumers buy televisions, refrigerators, washing machines and other consumer electronic items.

BHP sees energy demand alone growing at an annual 8% pace in China and 7% in India… and it has positioned itself perfectly to capitalize on those trends.

Coal: This still accounts for about 40% of global energy production, which suits BHP just fine, since it’s one of the largest producers of thermal coal in the world. Even better, the company produces copious amounts of coking coal, a commodity the steel industry depends on and one that emerging economies need vast quantities of.
Nuclear: Both China and India have plans to build numerous nuclear power plants over the coming decades. And BHP is already poised to take advantage through its Olympic Dam project in Australia, the world’s largest uranium deposit.

With a strong grasp on not only the commodities market, but also the countries most likely to need them, BHP is a must-have for any investor interested in taking advantage of the commodities markets and fast-growing global economies.

Good investing,

Tony Daltorio

P.S. For more information on how you can cash in on the best international companies in the fastest-growing emerging markets, check out the New Frontier Trader. In it, Investment Director Alex Green hunts down the latest developments and best opportunities in sectors and countries around the world. And the track record speaks for itself. Find out more here.

Two Investments to Add to Your “Green” Portfolio

Investment U Research Team — Wed, 04 Nov 2009 19:19:59 +0000

Two Investments to Add to Your “Green” Portfolio

by Louise Harris, Investment U Research

Green investing can be tricky.

That was evidenced after oil prices dropped last year and alternative energy companies saw their profits fall just as quickly.

Naturally, investor enthusiasm followed, as green ETFs like Claymore/Mac Global Solar Energy Index (NYSE: TAN) and Market Vectors Solar Energy (NYSE: KWT) have tumbled 45% over the past 12 months.

Similarly, the broad alternative energy portfolio PowerShares WilderHill Clean Energy (NYSE: PBW), has declined by an average of 13.5% annually for the last three years.

But despite those woes, the alternative energy sector still has a few things going for it…

Popularity: The more scientists talk about climate change and how to prevent greenhouse emissions, the more popular alternative energies become. This is especially true in Europe, which just passed legislation mandating renewable energy. In fact, Frost & Sullivan analysts believe the move has increased demand for renewable heating technologies within Europe, including biomass boilers and solar thermal systems.
Lower Costs: As green tech companies continue exploring their field, they keep finding innovative ways to cut costs on their existing products.

In all, the alternative energy market Scooped revenues of $7.14 billion in 2008 and is projected to reach $13.15 billion in 2015.

Chalk that up in part to the World Bank funding projects within emerging nations, such as a hydropower project in China, solar ventures in various African nations, and wind projects in South America.

Meanwhile, over in Mochau, Germany, Israeli startup BrightView has partnered with Signet Solar Inc. to work on another solar project.

Harnessing the Power of the Ocean for Energy

While we don’t expect alternative energy companies to pop right away, the movement is still taking on momentum.

Take a look at ANSYS Inc. (Nasdaq: ANSS), a global innovator of simulation software and technologies. It recently joined forces with Green Ocean Energy Ltd. to transform the energy from ocean waves into electricity.

Most companies relying on hydropower utilize energy from rivers and lakes. But Green Ocean Energy has plans to change all of that with the Ocean Treader and Wave Treader.

Designed to bob on the surface of the ocean, both devices draw power to their onboard generators through floating arms that harness the energy of the North Atlantic.

And because it depends on a precise balance between structural strength and weight restrictions, ANSYS stepped in to provide hydrodynamic and structural analysis tools that keep the machines sturdy enough to withstand harsh elements, yet light enough to keep production costs low.

I don’t expect Wall Street to wake up to ANSYS’ potential right away, but it will eventually, just like it will recognize the larger green tech movement’s full potential.

Already this year, New Alternatives (MUTF: NALFX) – a fund with a portfolio of energy efficient companies – is ranked in the top 15% of Morningstar’s World Stock category.

If you share the same values and long-term scope for the energy sector, than get in now and hold on for the long haul. This is one sector that should gain in strength and profit potential over time.

Good investing,

Louise Harris

Editor’s Note: For in-depth information on the crucial energy and infrastructure sectors – plus the companies that are leading the way with today’s innovations and changes, check out David Fessler’s “Hot Stacked” column. Featured in The Oxford Club’s Communiqué newsletter, David tracks all the latest developments and trends, alerting investors to the best recommendations. Go here to read more.

Bank On HSBC Holdings (NYSE: HBC) and the Asian Equation

Investment U Research Team — Wed, 04 Nov 2009 17:40:44 +0000

Bank On HSBC Holdings (NYSE: HBC) and the Asian Equation

Tony Daltorio, Investment U Research

“Go west, young man, go west!”

Written by Indiana journalist John Soule in 1851 and popularized by New York Tribune founder Horace Greeley the same year, that now-famous saying advised people to take advantage of the rapid growth in the United States as the country expanded westward across the North American continent.

If those visionaries could see the global picture today, I’m sure they would say something more along the lines of, “Go east, investors, go east!” instead. But since they can’t, global banking giant HSBC Holdings (NYSE: HBC) is saying it for them.

The company began operations in Hong Kong and Shanghai, financing trade between China and Europe under the name of Hong Kong Shanghai Banking Corporation.

Today, HSBC operates in 86 countries around the world with 55% of its assets in Europe, 23% in the Asia-Pacific region, 26% in North America and 4% in Latin America.

And while the global financial crisis has traumatized banks everywhere, HSBC has managed to emerge from it all in relatively better shape, largely due to its geographic diversification, strong balance sheet and disciplined credit.

Three Reasons Why HSBC Has An Edge On Its Competition

Unlike many of its American peers, HSBC remains a deposit-led bank, with over $1.1 trillion in deposits from over 125 million retail customers. It also has a loan-to-deposit ratio of 79.5%, meaning that it takes in more than it lends out.

As if that isn’t enough, HSBC has raised $20 billion in capital this year to bring its Tier 1 capital to an impressive 10.1%, while also cleaning up its problem loan areas. Mainly located in its U.S. unit, Household Finance, those loan loss provisions are set to decrease throughout 2010 and beyond and settle at a low of 1.1% within a couple of years.

All told, HSBC has an edge that its competition just can’t match. But HSBC shareholders are a demanding bunch…

HSBC Returns to its Roots

They want the bank to return to its Asian roots, which means transitioning out of Western markets… especially the United States.

Sounds like a bold move… but it’s a strategy that makes sense. Hong Kong and China accounted for 40% of HSBC’s pre-tax profits over the first half of the year. And within a few years, that number will rise to 50%.

HSBC appears to agree with its shareholders: It’s already begun putting a new growth strategy into action, one that includes downsizing its business in the beleaguered U.S. and other slow-growth countries in favor of emerging markets.

And as proof of its commitment to developing nations, CEO Michael Geoghegan recently announced that the firm will relocate from London to Hong Kong. In his words, “To drive the Asian growth, you’ve got to be here. This is a move from west to east and it’s centered in Hong Kong, which is the gateway to China and the dominant financial center in Asia.”

That also explains why it wants to become the first foreign company listed on the Shanghai stock exchange and why it’s entered negotiations with two troubled financials – the Royal Bank of Scotland (NYSE: RBS) and ING (NYSE: ING) – to acquire their Asian assets.

Further detailing his intentions, Geoghegan said: “We want to re-emphasize that we’re number one in Hong Kong and we’re going to grow from that position as the region grows. Our Asian business is going to be the dominant part of our business in the future.”

He has good reason to claim that, given that global trends keep shifting trade and investment from west to east. But while most financials pay lip service to Asian growth, HSBC is actually doing something about it.

As this very well managed and strong bank expands even further into emerging markets, consider adding HSBC to your portfolio and joining it for the ride.

Good investing,

Tony Daltorio

P.S. The Oxford Club recognizes the vital importance of adopting a diversified approach to investing – both in the U.S. and around the world. While HSBC is a globally renowned name, there are thousands of other international firms that investors don’t know about. That’s why Investment Director Alex Green founded the New Frontier Trader – a service that focuses exclusively on unearthing the fastest-growing international companies that can hand savvy, global-minded investors some outstanding profits. As of November 3, 2009, it had churned out stock winners of 53%, 39% and 38%, plus options winners of 473%, 334% and 208%. Check out this report for more information.

The Stock Market’s Red Flags: Four Ways to Handle Potential Market Turmoil

Marc Lichtenfeld — Wed, 04 Nov 2009 15:40:59 +0000

The Stock Market’s Red Flags: Four Ways to Handle Potential Market Turmoil

by Marc Lichtenfeld, Healthcare Expert
Wednesday, November 4, 2009: Issue #1130

Some people just don’t know when to quit.

A friend of mine is a professional boxer. But he’s 41-years old and his best days are behind him. Nevertheless, he continues to fight. Recently, he was knocked out and I was afraid he got really hurt. Luckily, he was fine, but I sincerely hope he retires, so he can enjoy his family in good health.

Then there’s my five-year-old daughter. Whenever she gets in trouble, she’ll stubbornly argue about her punishment, despite repeated warnings that her “take five” (five minutes in her room with the door closed) is about to increase. “Take fives” routinely become take fifteens and thirties.

Sometimes, investors don’t know when to let it go either. And right now, I’m concerned that many investors might be about to face the same outcome as my friend or my daughter – unnecessary punishment – when it comes to dealing with the stock market’s red flags.

Here’s why…

Technical Trouble

Take a look at the technicals…

The S&P 500 climbed by 48% from its low to the recent high of 1,101.
A retracement of 50% is very common in bear markets – and typically, if stocks can bust through the 50% level, they continue higher.
But very often, 50% is a ceiling and once stocks approach that level, they head back south again.

For example, here’s a chart of Dow Jones Industrials at the beginning of the bear market that began in 1929, courtesy of Distressed Volatility. Notice the 48% retracement before the market fell again.

To see the chart in its original size, click here.

There are plenty of other technical warning signs, too…

In mid-October, the Dow Jones Transportation Index (^DJT) set a double top. When a chart puts in two peaks at equal heights in succession, it’s a strong sign that a top is in place. This is important because Dow Theory, says the Transports must move in the same direction as the Dow Jones Industrials in order to confirm that the move in the Industrials is real.

Giddy Investors and GDP

If it’s fundamentals you’re after, I’ve got those too.

Investors have fallen in love with the stock market’s strong rally off the March lows. And with news last week that the economy is improving, it appears their level of fear has fallen dramatically.

For example, individual investors’ cash levels have fallen to their lowest level since July 2007, according to the American Association of Individual Investors. In July 2007, the S&P 500 was just 21 points away from its eventual top, which was reached just 3 months later.

The bulls and the media gleefully point to the 3.5% rise in third-quarter GDP as a signal that the recession is over. However, while the definition of a recession is two consecutive quarters of negative GDP growth, plenty of recessions have had a quarter or more of positive growth. During the 2000-2001 recession, GDP oscillated between positive and negative for four consecutive quarters.

This gives more support to the theory that the stock market is a forward-looking mechanism. One could argue that the rally over the past eight months was in anticipation of the impressive GDP number that was just posted.

So the big question is, what do you do about it?

Four Ways to Protect Yourself From Downside – And Profit From It

There are a few approaches you can take…

Put Options: In yesterday’s column, Karim Rahemtulla gave an example of how to hedge against a stock’s downside by buying put options on your existing stock positions through the married put option strategy. It’s an excellent way to hang on to stocks that you like, while protecting yourself from downside.
Stop-Losses: We also strongly advocate that you set stop-losses on your positions. This is where you enter an order to sell a stock if it reaches a certain price. Sometimes those stops are a percentage beneath the entry, current or high price. Other times the stop is below key support on a chart. But I’ll usually put one in place so the emotion is taken out of my decision making process.
Inverse Index ETFs: Over the past several years, ETFs have exploded in popularity and you can now buy ones that increase in value if the indexes they represent head go lower. For example, you can short Dow Industrials by buying the Short Dow Pro Shares (AMEX: DOG) or the Nasdaq 100 with the Short QQQ Pro Shares (Nasdaq: PSQ). Keep in mind… you’re not shorting the ETFs; you’re buying them. If the Dow or Nasdaq 100 decline by 2%, your position should rise by 2%.
Inverse Sector ETFs: You can also buy inverse ETFs of specific industries. If you want to play the financial sector downside, you could buy the Short Financials Pro Shares (AMEX: SEF).

Lastly, you want to adhere to this cardinal rule…

Don’t Be Stubborn

Make sure any short-term trade doesn’t become an investment.

What I mean is that if you’re wrong about a stock, cut it loose and take the small loss before it becomes a big one.

The lesson is this: It’s okay to be wrong in predicting the direction of a stock. Just don’t be more wrong than you have to be. So next time a position goes against you, think of my daughter getting sent to her room for a “take five.” Don’t let your trade become a “take fifteen.”

Hoping your longs go up and your shorts go down,

Marc Lichtenfeld

Editor’s Note: Marc Lichtenfeld is Senior Analyst and Healthcare Specialist for the Xcelerated Profits Report – an investment advisory that shows readers how to “invest like the pros.” Through powerful, cutting-edge, yet easy-to-understand and execute strategies, the team’s mission is to give investors the tools, tips and recommendations that will allow them to grow wealth in a faster, safer way than 99% of “ordinary” investors. Check out how you can start taking advantage today by taking a look at this report.