Sector Focus

That’s right: rising rates can be good for financial services Mark Turner Rick Wetmore David Honold Pablo Echavarria More...

Auto pendulum swinging to materials companies Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Scott Swickard The auto industry has traditionally been highly sensitive to economic cycles, so its production rates and financial condition have commonly been described as swinging between feast and famine extremes. But the famine that the auto industry has endured in the past two years has been especially harsh. Indeed, a Barron’s reporter tweaked that metaphor further and observed that the industry has largely been on a starvation diet throughout 2008 and 2009. More...

Harley, Honda, and Sony: the leaner, meaner machines William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Eric Turner A brand can make or break a company in the marketplace, but sometimes even the strongest brand just isn’t enough. For instance, consider the plight of three highly regarded consumer companies that we think have exceptionally strong international brands -- Harley-Davidson, Honda Motor, and Sony. All three are struggling now to sustain or return to profitability in the face of lackluster consumer spending and new competitive pressures. More...

Light-emitting diodes: The Great Light Hope Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano Daniel Hirsch Business journalists with a fondness for puns have referred to light-emitting diodes, or LEDs, as "The Great Light Hope." The hope in business, government, and environmental circles is that wider use of LEDs for indoor and outdoor lighting will help conserve energy, reduce greenhouse-gas emissions, and lower overall energy costs. More...

Acquisitions: Big Pharma's response to expiring patients Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang Merger and acquisition activity of late has been characterized as a drought. But that drought hasn’t been quite as severe in the pharmaceutical industry, where there’s been a relatively steady stream of deal-making. More...

To us, the best regional banks are the best-capitalized regional banks Mark Turner Rick Wetmore David Honold Pablo Echavarria More...

U.S. steel industry: an early economic barometer Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Scott Swickard Business journalists have pointed out the irony that Pittsburgh, once known as the steel capital of the world, no longer actually contains any major steel mills within the city limits. To them, it’s a telling symbol of the dwindling global role of the U.S. steel industry. Today China, not the U.S., is the world’s leading producer of steel; China accounted for about 38% of the world’s steel made in 2009, compared with 7% for the U.S., according to Barclays Capital. More...

There's life yet in an aging auto industry William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Eric Turner Alas, even the greatest of growth businesses inevitably mature, as the automotive industry knows all too well. A great growth business in its day, the automotive industry has been notably beset with the financial problems of advancing age in this decade. The industry’s growth and profitability have been distinctly below average. And the industry faces continued hard times, additional downsizing, and more government controls, some auto analysts have been saying in the aftermath of the recent bankruptcies of once-mighty titans Chrysler and General Motors (or "Government Motors," as a Wall Street Journal reader archly referred to the company). The consulting firm A. T. Kearney predicts that only three of 17 major automakers are likely to survive in the long run. More...

Why small solid-state drives may become big Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano Daniel Hirsch More...

The drugs may be generic, but their prospects aren't Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang The competitive dynamics between branded drug and generic-drug companies, like tectonic plates, continue to shift, and the stakes have never been higher. We estimate that over the next three years about $50 billion of revenue from currently marketed branded drugs will be targeted by generic-drug companies. To the generic companies that were the first to file Abbreviated New Drug Applications (ANDAs) with the Food and Drug Administration (FDA), that opportunity presents enormous profit potential, in our estimation. More...

Yes, investment banking is still alive and well Mark Turner Rick Wetmore David Honold Pablo Echavarria Where have all the major investment banks gone? At the start of 2008 there were five major investment banks: Bear Stearns, Goldman Sachs Group, Lehman Brothers, Merrill Lynch, and Morgan Stanley. But by the end of the year, like the victims in an Agatha Christie murder mystery, then there were none: Bear Stearns was acquired by JPMorgan Chase, Lehman Brothers went bankrupt, Merrill Lynch was bought by Bank of America, and Goldman Sachs and Morgan Stanley became, voila, regulated bank holding companies. More...

LNG: the ups trump the downs Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Scott Swickard Over the years liquefied natural gas, or LNG, has been anything but a Steady Eddie market in terms of price, demand, and investment in production capacity. The LNG market has behaved more like the Incredible Hulk, roiled by sharply contrasting stop-and-go, boom-or-bust, feast-or-famine forces. When natural-gas prices and demand are high, LNG production capacity tends to grow. When prices and demand are low, additions to production capacity tend to taper off. More...

Education firms make the grade in a recession William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten A commonplace observation by the news media was that this year’s corporate parties before Super Bowl XLIII in Tampa were less ostentatious and more subdued than in the past, reflecting somber times throughout the land: a worsening recession, rising unemployment, and a sustained decline in consumer spending. But the chief executive officer at one notably glitzy Super Bowl party cheerily told Sports Illustrated: "We’ve chosen not to participate in the recession." More...

Cyber-security: to catch a thief Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano Daniel Hirsch You may think the doomsday scenarios of the banks and automakers that are seeking bailouts from the federal government are scary -- the prospect of hundreds of thousands of jobs lost, a chronic credit crunch, plant closings, and bankruptcies. But all of that is relatively tame compared with the Night of the Living Dead-caliber scenarios conjured up by authorities in the field of digital security, or "cyber-security." More...

How defensive is health care? Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang Although we believe the health-care sector has attractive short-term prospects, that’s not necessarily true for all segments of the sector. Overall, the outlook for the health-care sector looks strong to us. The U.S. spends nearly 16% of its gross domestic product on health care. And projections by Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, are that by 2030 health care will account for about 25% of GDP. That growth will be propelled by an aging population, increases in personal income, and the development of new drugs, medical devices, and technologies. That growth is also translating into employment growth, as health care accounted for 45% of all new jobs in the private sector last year, according to the American Hospital Association. More...

Seven you can still bank on Mark Turner Rick Wetmore David Honold Pablo Echavarria What do these seven banks have in common -- JPMorgan Chase, Wells Fargo, Bank of Hawaii, Hudson City Bancorp, People’s United Financial, PrivateBancorp, and Prosperity Bancshares? More...

Recycling: good for the ecosystem and profits Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Scott Swickard Environmentalists and capitalists are often stereotyped as philosophical adversaries, as rarely seeing eye-to-eye on issues involving the ecosystem and the financial system. But if there’s one thing that both groups do seem to agree on, it’s this: recycling -- the conversion of solid waste into energy or reusable products -- has merit. More...

E-commerce: cure for retailers’ holiday blahs? William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten For U.S. consumers today, shopping till you drop is out, thrift is in. Inflation, rising unemployment, and high gasoline prices are pressuring consumers, even the most affluent, to rein in their spending and focus on getting value for their money. As we see it, consumers are likely to be especially discretionary in their discretionary spending during the forthcoming holiday shopping season. According to industry veterans like Mickey Drexler, chief executive officer of J. Crew, this holiday season may be the softest in 40 years, with most retailers hard-pressed to boost sales from last year’s levels. More...

Apple's iPhone makes a mobile connection Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano Daniel Hirsch On the first day that Apple’s new iPhone 3G was introduced in July, a host of chagrined buyers were unable to activate it, which prompted The New York Times to refer to it sardonically as the iCan’t. Nevertheless, we think the iPhone 3G will ultimately prove to be the iCan -- a positive catalyst to advance a long-term global mega-trend known as mobile connectivity, i.e., the ability of consumers to gain access to information and digital applications any time, anywhere, and through any wired or wireless medium. More...

Contract research helps keep drug pipeline flowing Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang Imagine a new-product development process that typically lasts 10 to 15 years, has only a one in 5,000 chance of succeeding, and costs at least $800 million. That’s the daunting reality that biopharmaceutical companies face in seeking to bring a new drug to market. More...

MasterCard and Visa: profitable toll takers Mark Turner Rick Wetmore David Honold Pablo Echavarria The legendary investor Warren Buffett favors companies that he likens to operators of an unregulated toll bridge -- they display some characteristics of an oligopoly and thus have relative freedom to raise prices and earn superior profits. More...

Shales underground prove a gas in U.S. Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Scott Swickard In modern times Pennsylvania hasn’t exactly been a mecca for energy exploration and production in the U.S. The real action of course has been in the West, Southwest, and the Gulf of Mexico. So imagine the surprise of veteran drilling crews from the Southwest who are accustomed to exploring for natural gas in, say, the arid wide open spaces of the Texas plains; suddenly they now find themselves working in, of all places, the green hills and valleys of Pennsylvania. As one drilling-crew member from Texas confided to a New York Times reporter at a natural-gas well in Hughesville, a small town in north central Pennsylvania: "I never thought I’d be north of the Mason-Dixon line." More...

From Russia and Eastern Europe, with affluence William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten America’s celebrated shop-till-you-drop consumers, who have kept the economy humming for years, seem to be finally dropping. Among other signs of what might be called Consumer Fatigue Syndrome, U.S. retail sales have waned in recent months, due to high gasoline and food prices, a housing downturn, and a soft job market. But it would be a mistake to conclude that consumer spending is similarly lethargic around the world. Indeed, in Russia and Eastern European nations such as Ukraine, Kazakhstan, and Romania, consumer spending is downright vigorous. More...

Microsoft wanders lonely as a cloud and bids for Yahoo Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano An investing rule that we generally follow for technology stocks is to sell any large-cap tech holding whose issuer is involved in a merger with another large company. That rule is based on our research and experience, which show that a merger of big tech companies typically takes awhile to work out or doesn’t work out at all. A merger often proves a dud because both parties have serious problems that tend to be the motivation for the deal in the first place. More...

Will plasma products' prospects remain sunny? Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang It’s a story as old as business. An industry is burdened with poor fundamentals, including an excess of capacity and a lack of pricing power. The industry then consolidates, and the surviving companies eliminate the extra capacity, which subsequently improves their pricing power. And when demand picks up, the industry goes on to thrive. That’s the story of the plasma-products industry, a $6.9-billion business that a few years ago was struggling under the weight of poor pricing power and an oversupply of blood plasma, the substance used to produce life-saving products for patients with maladies ranging from liver disease to hemophilia. As a result the industry was compelled to close many plasma-collection centers, thus reducing the supply of plasma by an estimated 28% from 2000 to 2005, according to Morgan Stanley. It was part of a wave of consolidation in the industry, in which a number of companies exited the business. More...

Africa: a banking lightweight bulks up Mark Turner Rick Wetmore David Honold Pablo Echavarria For decades Africa was widely regarded as an economic basket case, bedeviled by government corruption, red tape, dysfunctional social policies, under-investment, lofty debt levels, and widespread poverty. Today, however, Africa is being seen in a far more flattering light: as the only continent in which economic growth is both above-average and accelerating. As a result the former economic basket case is being transformed into a magnet for global capital -- "a hot destination for money," as The Wall Street Journal puts it. More...

In video games, the (casual) play's the thing William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten Players of video games have tended to be stereotyped as young male couch potatoes who have preternaturally nimble thumbs from the ceaseless pushing of console buttons and who, in their parents’ view, need to get a life. But that stereotype is changing, since it’s increasingly less grounded in reality. A study by Nielsen, the market researchers, showed that only 40% of video gamers are teens. And a survey by the Entertainment Software Association revealed that the average age of people playing video games is 38, with nearly 40% of them women. More...

Virtualization: are you being served? Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Michael Lozano Virtualization has been called a chief information officer’s best friend. That’s because virtualization, with its specialized software, consolidates the work of many servers (the powerful, pricey computers that run digital networks) on a single machine, thereby enabling organizations to cut hardware and electricity expenses and improve the efficiency of computer systems. More...

Aesthetic medicine: a booming (and boomer) market Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD Theresa Hoang We think there’s some truth to the conventional wisdom that the aging generation of baby boomers should lift the fortunes of the health-care sector for years to come. To us, one segment of the sector that seems particularly well-positioned to benefit from the patronage of the 76 million baby boomers in the U.S. is the market for "aesthetic medicine." Aesthetic medicine revolves around anti-aging, appearance-enhancing products, such as Botox, dermal fillers, and breast implants, created by pharmaceutical or biotechnology companies More...

O Canada: an oil sands bonanza Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA The Athabasca Field in Canada’s Alberta province is to oil sands what the Ghawar Field in Saudi Arabia is to petroleum: the largest field of its kind in the world. More...

To some consumer firms, it hardly matters if the U.S. catches a cold William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten A shopworn economic cliché is that when the United States sneezes, the rest of the world catches a cold. Now, however, as a result of a strengthening global economy that’s less dependent on American trade, the cliché may deserve a new twist: when the United States sneezes, the rest of the world goes shopping. More...

Think wireless, think emerging markets Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA In selecting telecommunications companies for investment, we have current preferences as simple as a piece of Shaker furniture: we favor wireless companies over wired companies . . . and wireless companies that are focused on emerging markets over wireless companies that compete mainly in developed markets. More...

Anemia drugs: sudden tremors in a franchise Heather McMeekin Frank Sustersic, CFA Vijay Shankaran, MD, PhD If, as some Wall Street pundits believe, the biotechnology industry is the glamour industry of this era, then anemia drugs are its most glamorous products. Anemia drugs have proven a glittering franchise for the biotechnology industry, with worldwide sales of about $10 billion in 2006. But because of recent concerns about the drugs’ safety and overuse, that franchise, like an earthquake-prone valley in California, is showing some worrisome fissures.   More...

Subprime mortgages: way past their prime Mark Turner Rick Wetmore David Honold If you’re among the more than 3 million Americans who are now selling a home and hoping a rebound in the housing market will help you do that, perhaps you shouldn’t get your hopes up just yet. As we see it, the housing slump should continue in 2007. More...

A renaissance aids uranium production Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Lately some managers in the nuclear-power industry have been using the word renaissance so often in conversation, you might think they were art historians. But when the nuke managers talk about renaissance, they don’t mean the golden age of art in the 15th and 16th centuries that produced Raphael, Michelangelo, and Leonardo da Vinci. What they’re actually referring to is a rebirth -– a revival of business interest and activity -- in nuclear power as a source of electricity around the world. More...

China: a slumbering consumer giant awakes William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Jillian Batten Here’s the kind of factoid about the Chinese consumer that quickens the pulse of red-blooded marketers at Western companies: The Wall Street Journal reported recently that China Telecom is adding more than 4 million cell-phone subscribers a month, or close to two every second. More...

Cellular towers: one beautiful business Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA For years communities have railed against cellular towers as eyesores that threaten to lower property values. The tower companies have tried, with some success, to make the towers more aesthetically pleasing. For instance, towers have been dressed up to look like trees and concealed in chimneys and electrical signs. More...

Part D debuts in all its complexity Heather McMeekin Jason Schrotberger, CFA Vijay Shankaran, MD, PhD Medicare Part D, the government-sponsored prescription-drug plan that was widely anticipated to be the biggest change to Medicare ever, has in fact quickly made as much of a splash as its proponents had hoped and its opponents had feared. More...

Solar energy heats up Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA Talk about your long-term source of energy: solar power will be readily available for at least the next 4 billion years -- the estimated remaining active life of the sun. In contrast, the most conservative projections are that the supply of coal, the most abundant fossil fuel, should last a mere 160 years or so. More...

Trexima: 1+1=3 in relieving a migraine? Frank Sustersic, CFA Vijay Shankaran, MD, PhD With Trexima, a new combination drug that offers more rapid, longer lasting relief from the pain of migraine, the third time may at last be the charm for Pozen, a small, 10-year-old pharmaceutical company based in Chapel Hill, North Carolina. The Food and Drug Administration had rejected Pozenâ??s two previous drug candidates, but on June 9 the company won the FDAâ??s conditional approval for Trexima. More...

Gaming firms raise the ante overseas William McVail, CFA Jason Schrotberger, CFA Halie O'Shea As a University of Pennsylvania professor once observed, casino gambling in economic terms boils down to an incremental wealth transfer in which one party (the gambler) makes transactions with odds that favor the other party (the casino). If so, we think the rate of wealth transfer from gambling is likely to be greater overseas than in the U.S. over the next three to five years, due in part to an intensive burst of international expansion by U.S.-based gaming companies. More...

Cable, telecom firms turn the quadruple play Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Baseball may have its triple play, but cable and telecommunications companies have their quadruple play. For those of you who may be more familiar with the terminology of baseball than that of technology, quadruple play is an industry buzzword for the bundling of four key communications services -- TV, telephone, wireless, and high-speed Internet data -- by cable and telecommunications companies in the high-stakes battle for consumer business worldwide. We like to refer to that battle as the "Clash of the Titans" -- the contest for communications supremacy in the home waged by corporate giants like Verizon Communications, Comcast, Cablevision Systems, AT&T, and BellSouth in the U.S. and Vodafone, BT, and Orange (the former France Telecom) in other countries. More...

The price is right for specialty insurers Mark Turner Rick Wetmore David Honold It might be expected that natural disasters like last year’s Hurricane Katrina, the biggest catastrophe in U.S. history, would have a similarly devastating impact on the business fundamentals of property/casualty insurance companies. But that hasn’t been the case at all. More...

Coal’s prospects burn brightly (and more cleanly) Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA To some, clean coal may seem an oxymoron, like honest crook. After all, isn’t coal the foul fossil fuel that blackens the skies and creates greenhouse gases that are altering the world’s temperatures and weather? But new technologies are transforming coal into a "greener" fuel and in the process enhancing what we think are coal’s favorable long-term prospects. More...

Why four specialty retailers are special. William McVail, CFA Jason Schrotberger, CFA Halie O'Shea At times some retailers just don’t get it. For instance, certain hapless retailers do things that are widely known to alienate customers, yet they do them anyway: they make customers wait too long in checkout lines, they don’t provide adequate help to customers, and they fail to provide what customers want. More...

In the tech sector, don't look back Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Data General, Control Data, Digital Equipment, Wang Laboratories -- where, oh where, are they now? As a matter of fact, all of them are as extinct as the passenger pigeon or the computer punch card. They were once premier growth companies in the technology sector. To us, they above all serve as cautionary tales on the tenuous nature of success in a sector that’s a hothouse of "creative destruction." (Briefly, the concept of creative destruction was popularized by economist Joseph Schumpeter early in the last century; it posited that nimble, innovative new companies destroy the markets of slower-moving, less-innovative, established companies.) More...

Morbid obesity: a growth market Heather McMeekin Frank Sustersic, CFA "At one point I was so overweight that when I went out in a yellow raincoat, people would yell, ‘Taxi!’" the comedian Rodney Dangerfield once joked. Alas, in the United States today, more than a few people might relate ruefully to Mr. Dangerfield’s observation. More than one-third of Americans -- about 100 million people -- are clinically obese, or 30% above their ideal body weight. The rate of obesity has more than doubled since the 1970s, according to the federal government, and in the process has helped increase the incidence of health problems such as diabetes and heart disease. More...

How electronic trading is reshaping Wall Street Mark Turner Rick Wetmore David Honold David Honold, security analyst/portfolio manager; Mark Turner, president and senior portfolio manager/security analyst; and Rick Wetmore, security analyst/portfolio manager; who cover the financial-services sector More...

Suddenly automakers are high on hybrids Robb Parlanti, CFA Don Smith, CFA Marc Bianchi, CFA In the United States over the long term, gasoline supply should grow at a lesser rate than gasoline demand, which is expected to rise 1.7% annually, according to the Energy Information Administration. And to further confound the supply/demand equation, Americans are driving more miles each year, primarily because their commutes to work are getting longer. More...

Ready or not, here comes Medicare Part D Heather McMeekin Frank Sustersic, CFA Myrtle Anderson, a 75-year-old Maryland resident, had what we think may be a common reaction to the new Medicare prescription-drug benefit, known as Medicare Part D, which will be introduced in the U.S. next January. More...

Bankruptcy law: less forgiving to debtors, kinder to creditors Mark Turner Rick Wetmore In a business-magazine cartoon, a weary middle-aged man at a bar complains that although the Lord’s Prayer may advocate forgiving our debtors, the new bankruptcy law doesn’t forgive his debts. More...

Wine and spirits go to the top shelf William McVail, CFA Jason Schrotberger, CFA Halie O'Shea Bill McVail, senior portfolio manager/security analyst; Halie O’Shea, security analyst/portfolio manager; and Jason Schrotberger, security analyst/portfolio manager; who cover the consumer-staples sectorAttention, students of significant cultural change: Americans are going upscale in their drinking habits, with demand for wine and spirits outpacing that of beer. More...

The digital home cometh Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA On the household refrigerator, it’s commonplace to show snapshots of, say, your family’s latest vacation at Disney World. Now, thanks to Salton, the company known for its George Foreman grills, you can use your refrigerator to display digital photos of that vacation on a video screen -- and do things like wirelessly play recorded music and surf the Web. It’s yet another vestige of a phenomenon known as the “digital home,” which we think will provide plenty of profitable opportunities for companies in the technology sector over the next five years. More...

Hypertension Focus: The big and small battle for supremacy in PAH drugs To us, the market for drugs to treat pulmonary arterial hypertension (PAH) is fascinating because it largely encompasses the kaleidoscope of influences shaping the pharmaceutical and biotechnology industries today. That kaleidoscope includes some noteworthy innovations, intense competition between established pharmaceutical  companies and upstart biotechnology firms, high development costs and product prices, a combination of therapies, third-party reimbursement issues, and tradeoffs between drug risks and rewards. By tradeoffs, we mean that every PAH drug has its shortcomings and no single PAH drug is a “cure.” As background, PAH is a rare lung disorder that results in blood pressure in the pulmonary artery rising far above normal levels and a less-than-efficient flow of blood to the heart. If unrelieved, PAH can lead to heart failure and death. The average PAH patient is between 20 and 40 years old. It’s estimated about 50,000 Americans and an equal number of Europeans have PAH. More...

Look who's got pricing power now: steel, copper, and chemicals For much of the past two decades, raw materials/processing sector were mired in what one of our industry contacts termed "the Business Slump from Hell."  A combination of production overcapicity and lackluster demand resulted in raw-materials producers suffering from a chronic lack of pricing power. More...

Online advertising: a promising tool for consumer companies Halie O'Shea Consumer-product companies such as Coca-Cola and Kraft Foods are widely considered among the savviest of marketers and the biggest of advertisers. So it comes as no surprise that they've begun experimenting with a budding, fast-growing advertising medium that we think can help them communicate better with specific groups of consumers: the Internet. More...

VOIP: The next New New Thing in telecom Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA Aficionados of the New New Thing, please take note: the next blockbuster technology, in our opinion, is likely to be VOIP (Voice Over Internet Protocol, pronounced "voyp"). Like the mobile phone, the personal computer, and the Internet, VOIP has the potential to do nothing less than reshape markets, alter lifestyles and ways of doing business, and generate stock-market riches over time. In the process, it's likely to make obsolete traditional circuit-based telecommunications systems. More...

Health Savings Accounts: an idea whose time has come? Frank Sustersic, CFA For years people have put money into defined-contribution 401(k) plans to save for retirement. Today, as a testament to how expensive health care has become, a relatively new defined-contribution tool called Health Savings Accounts is helping people to save for their health care. More...

Stored-value cards: a win-win product for consumers and companies Christopher Perry, CFA Mark Turner Rick Wetmore America is a plastic nation is a favorite pun of business journalists about the nation's love affair with charge cards. Indeed, Americans now use plastic — credit, debit, and other cards — more often than cash to buy retail goods and services. One especially promising growth niche of the charge-card market is stored-value, or prepaid, cards. More...

Why oil prices are likely to stay high Robb Parlanti, CFA Don Smith, CFA Just when you think oil prices can't go any higher, they do. And as we see it, due to limited additional global production capacity, prices are likely to remain high for some time. We think the share prices of some companies in the energy sector haven't fully reflected this contingency yet. More...

Staffing services: a strategic shift to higher value William McVail, CFA Staffing services, which involve placing temporary employees in organizations, is among the most cyclical of businesses. When the economy is humming, staffing services are in great demand. But when the economy is struggling, headlines reverberate with the drumbeat of declining demand for those services. More...

LNG: the best hope for expanding our natural-gas supply Robb Parlanti, CFA Don Smith, CFA Liquefied natural gas, or LNG, is a topic that's unlikely to come up at your next cocktail party, but in the energy industry it's discussed often and enthusiastically these days. The reason it's such a hot topic in the industry is that demand for LNG has grown spectacularly (U.S. imports of the fuel have risen by almost 170% since 1998) and should continue to do so for years to come. More...

Bank of Ireland Asset Management (U.S.) Trade Update International Portfolio: New Stock Addition Nippon Telegraph & Telephone Corp (NTT) More...

Semiconductor leaders seek to spend their way to prosperity Tara Hedlund, CFA, CPA Christopher McHugh Robert Turner, CFA There's an old adage in the soft-drink industry: you can spend your way to prosperity or save your way to oblivion.  It seems that leading companies in the semiconductor industry may be applying that adage as well.  More...

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