Category Archives: Investments

Hotel Industry Optimistic About Coming Year

Economy, Investments, Real Estate, , ,
Arthur de Haast of Jones Lang LaSalle

Movers and shakers from the hotel industry were gathered together last week in Los Angeles for the Americas Lodging and Investment Summit, where they discussed the prospects for business this coming year.

Bracing for Better Business Climate

Real estate companies as well as hotel businesses are looking towards the coming year with hope despite the fears they have about the European economic situation and challenges finding debt financing.

The economic recovery has been business-led, which has given a boost to US hotel occupancy rates. Nevertheless development of new projects seems to still be stalled as credit conditions remain tight, making the building of new hotels difficult. Yet, the hoteliers remain optimistic.

“People are expecting 2012 to be a pretty positive year, with solid performance by the industry in terms of the demand for hotel accommodations and the ability to get deals done,”

Arthur de Haast, chairman of Jones Lang LaSalle Hotels, said at the summit.

Billion Dollar Industry

Jones Lang, a hotel investment services firm, predicts that hotel deals in the Americas will at least do as well as last year’s level, reaching about $15 billion in value.

Hotel deals increased in their activity in the first two quarters of 2011, but substantial slowing down occurred at the end of last year due to the economic troubles in Europe began to make headlines.

Even though Europe has by no means recovered from its woes, most people at the three-day hotel summit believed that a further recovery which includes room-rate rises, will make the hotel sector seductive for investment.

“There’s a lot of money on the sidelines waiting to pounce and find opportunities,”

said Christian Charre, president and chief executive of the Charre Group, a Florida-based hotel brokerage and consulting firm.

Once Hot Utilities Stocks Losing Popularity

Economy, Investments, , ,

Just like everything else powered by the whims of crowds, types of stocks also have their “five minutes of fame.” Take, for instance, the coolness surrounding Chinese Internet stocks one month, solar energy manufacturers another month, or daily-deal sites like Groupon a third month.

Dust Off Grandma's Stocks

But who would have ever thought the boring, safe, old-fashioned, faithful utility stock would become the darling of 2011? Well maybe you grandmother, but regular investors? Yes they sure were popular last year; in fact, utility sector stocks were the be-all and end-all best-performing stock sector, up 8.7% overall in 2011, says the fund-tracking firm Lipper. We don’t have to tell you this was quite a bit better than the go-nowhere, do-nothing, S&P 500.

Proceed with Caution as Economy Recovers

But before you sell the farm and buy out the electric company, heed the warning that this unlikely hero has likely wilted back into the safe haven of slow growth, where it is usually found. Investors bestowed their beneficence on utility sector stocks because of their reputation for being safe and sound, but now their price to earnings ratio has gone a bit high; up to 14, well above the S&P’s average of 12.2, a warning to proceed with caution.

"Utilities stocks were red-hot, but the public needs to know the tide has turned against them," says Alec Young, global equity strategist for S&P Capital IQ. "It's an untold story, and there hasn't been enough coverage of it."

What makes Young say this? During recessions, such as the one we are hopefully emerging from, investors flee to utility stocks for their lovely mix of stability and yield. But as the economy recovers with decent GDP growth and jobless rates lowering, history has shown that counter-cyclical stocks like utilities tend to fall behind.

"The macro picture is improving, and we're past the point of maximum fear," says Young. "Now there will be less focus on yield and capital preservation, and more willingness to speculate. All of that is bad news for utilities."

Saudi Billionaire Buys Shares in Twitter

Communications, Investments, , , , , ,

Prince Alwaleed bin Talal, active Saudi global investor, has just become part owner of the

Prince Alwaleed bin Talal

famous micro-blogging website Twitter for $300 million.

Breaking Into Global Communications

Alwaleed is one of the Saudi King’s nephews was estimated to be worth at least $19 billion and is already has a 7% stake in News Corps and is considering beginning his own cable news channel.

It is interesting to note that Twitter was one of the major tools used for communications between the protestors during the famed Arab Spring revolts a year ago, including violence which posed a threat to the ruling family of Saudi Arabia. The revolt was quelled after the kingdom proposed a $130 billion social spending package.

Months of Negotiations

The purchase of Twitter came after months of intense negotiations between Twitter and the Prince and his Kingdom Holding Company investment firm.

The investment transaction was what is known as a secondary transaction, which means that the shares that Alwaleed and his Kingdom Holding Company purchased were from shareholders already invested in Twitter, and not a direct investment in the company.

Owns Four Percent of Twitter

Chief executive of Twitter Dick Costolo said that the company is valued at about $8 billon in the secondary markets as of October, making Alwaleed’s investment worth about 4 percent of the company.

The co-founder of Social Media, a firm specializing in analysis and advice, Bernhard Warner said,

“The Arab world, of course, knows full well the value of Twitter. In the past year, it has been a force in politics, in regime change, so there is not a single person in that region in a position of influence who is not following the increasing power of Twitter.”

“(Alwaleed) must see Twitter as something that is going to be a really powerful broadcast channel,” he said, and added that the Saudis got into the internet craze relatively late, which has been a bit of a problem, and it could still be “kind of late” again to this game.

Its Technical Communications Corp For Cloak and Dagger Operations

Companies, Investments, ,

Technical Communications Corp (TCCO) has an interesting market niche. It develops, manufactures and sells communication security equipment around the world. Its products protect communication privacy between telephones, radios, fax machines and data processing equipment. The products protect information transmitted through telephone wires, fire optic cables, microwaves, radio waves and satellite links. The company sells various types of encryption devices to code and decode data in real time. Technical Communications sells to law enforcement agencies, governments, and multinational companies which need to protect their information.

The company is apparently well run according to the management effectiveness ratios of return on assets of 14.61% and return on equity of 18.14%. Also, the profitability margins look good with an operating margin of 28.65% and a profit margin of 18.75%.

The company’s stock is rated among the best 25 stocks in terms of dividend return according to an article in Forbes magazine. The stock itself has slide from $12 to $8 over the last year, but it offers a 5.37% yield which is some compensation.

Disclaimer: The information in this article may be incomplete. Before making any investment, the investment should be thoroughly analyzed.

Unilever The Giant Continues Onwards And UPwards

Companies, Investments, , , ,

Unilever PLC (ULVR.L) is a consumer goods company that sells foods, personal care products, and home care products. Each product category is marketed under several brand names. The company is active in the Americas, Europe, Africa and Asia. Unilever was founded in 1885 and we have all grown up with their products.

Here is some news about the company:

Unilever will be selling its Culver Specially Brands Division to B&G Foods, Inc. The brands include are: Static Guard branded anti-static spray, Mrs. Dash salt-free  seasoning blends, Bakers Joy branded baking spray, Sugar Twin branded sugar substitute, and Molly McButter branded flavored sprinkles.

Unilever has been recognized as the best employer in the Russian fast moving consumer goods section. These surveys were undertaken by the Surveys were carried out by the Changellenge Academy, the Future Today, the Finance University and the Universum which are respected Russian institutions.

By the way, the Unilever stock is going up and is near its 52 week high.

Disclaimer: The information on this website is general information only and does not constitute investment advice. All investment decisions should be made only after a thorough analysis of the stock involved.