GOAL IS SMOOTH
CHEAP STOCKS THAT COULD GO BIG
The economy added an extraordinary 313,000 jobs in February. The unemployment rate for the month was 4.1%. One group that has been left far behind is black Americans. The unemployment rate of this population was 86% higher than among white Americans, according to the February data released by the U.S. Bureau of Labor Statistics (BLS).
The primary numbers released:
Total nonfarm payroll employment increased by 313,000 in February, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in construction, retail trade, professional and business services, manufacturing, financial activities, and mining.
Household Survey Data
In February, the unemployment rate was 4.1 percent for the fifth consecutive month, and the number of unemployed persons was essentially unchanged at 6.7 million.
Among the major worker groups, the unemployment rate for Blacks declined to 6.9 percent in February, while the jobless rates for adult men (3.7 percent), adult women (3.8 percent), teenagers (14.4 percent), Whites (3.7 percent), Asians (2.9 percent), and Hispanics (4.9 percent) showed little change.
The 6.9% figure for black Americans is 86% higher than the 3.7% for white Americans.
In its analysis titled The Worst Cities for Black Americans posted in November 2017, 24/7 Wall St. pointed to some of the reasons for the differences. Although the list does not cover every factor, it captures many of them:
One of the largest contributors to racial inequality in the United States is the disparity in arrest and incarceration between white and black Americans. Today, 1,408 in every 100,000 black Americans are incarcerated in state prisons, an increase of nearly 200% since 1960. Meanwhile, the white incarceration rate is 275 per every 100,000 white Americans.
Numerous policies have contributed to the racial disparity in incarceration. A broad set of policies related to the war on drugs have disproportionately targeted African Americans, and they are largely responsible for the increase in black arrests and longer sentences for black Americans. For example, sentences related to crack cocaine, an illegal substance more common among black drug users, are far harsher than sentences related to powdered cocaine, a substance more common among white drug users.
Perhaps nowhere is inequality clearer than in the disparities in poverty — as well as the social and economic difficulties that accompany it — between white and black Americans. Disparities in income, as well as in education, unemployment, health, and incarceration can exacerbate each other and deepen the overall divide between black and white prosperity in the United States.
One thing that can be said conclusively is that the wide gulf between black American and white American unemployment has existed for decades, almost certainly since the government started to keep records. Additionally, there is no reason to believe the gulf will close soon.
Boeing Co. (NYSE: BA) stock regained some ground last week after dropping about 3.4% in the prior week. Shares added 2.86% last week, but that was less than the Dow Jones industrial average’s gain of nearly 3.5%. The stock remains the Dow’s best performer for the year to date, however, with a gain of 20.2%.
The second-best performer among the Dow 30 so far this year is Cisco Systems Inc. (NASDAQ: CSCO), up about 18.5%, followed by Intel Corp. (NASDAQ: INTC), which is about 13.1% higher. Then comes Microsoft Corp. (NASDAQ: MSFT), up about 12.9%, and JPMorgan Chase & Co. (NYSE: JPM), up about 10.4%. More than half of the 30 Dow stocks (17) have posted year-to-date gains as of Friday.
The Dow added nearly 850 points over the course of the past week and closed at 25,355.74, up nearly 3.5% for the week.
Hawaiian Airlines finally pulled the trigger on an order for 10 787 Dreamliners after canceling an order for six Airbus A330-800s. The story broke more than two weeks ago, but the confirmed order gave Boeing’s stock a shot in the arm.
On Wednesday, the U.S. Air Force issued a statement concerning the new KC-46A refueling tanker. Boeing was to have delivered the first batch of 18 to the Air Force by August, but that that delivery has been delayed until the end of the year. Boeing so far has taken charges of around $2 billion on the program, and more are certainly possible.
Boeing’s shares closed up about 1.7% on Friday to $354.52, in a 52-week trading range of $173.75 to $371.60. The consensus 12-month price target on the stock is $386.78, unchanged in the past week. The low end of the price target range is $289 and the high end is $470.
The new head of Volkswagen’s U.S. operations believes that if the German car company’s American unit can become more American, it can solve its sales problems here. The plan has flaws.
According to comments he gave Automotive News, Hinrich Woebcken, CEO of Volkswagen Group of America, said:
We want to get more Americanized not only in our product but in our business. It’s not that we’re giving up on the genes of the Volkswagen brand. Volkswagens are Volkswagens. But what we recognized over the years is … that we were too much a small-car company, too much a sedan company.
The comment misses a critical mark. Almost every large non-luxury manufacturer based outside the United States already has “Americanized” its lineup. And most sell many times the number of vehicles VW does domestically.
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Part of Woebcken’s plan is to drop prices and add models at a rapid pace. That puts him up against companies such as Honda, Toyota, Nissan and Hyundai, which adopted this tactic decades ago and have lineups that include low-priced coupes, sedans, sport utility vehicles and crossovers. Each of these companies sells several times the number of cars in the United States that VW does. And each has a stronger brand, larger dealer network and, for the most part, a better reputation.
VW also has another hurdle, which is that the U.S. car industry has peaked, at least for the foreseeable future. VW has to pick up market share against the best and largest car companies in the world.
BOEING TOP STOCK
Had just about enough of winter for this year? Thinking about a warm, sunny stretch of sand and surf to wash away that ennui? Or dreaming about that same beach as place to live year-round?
Heck yeah! But where to find a place with the sandy shores you crave and that you can afford — that’s only one issue. There are plenty of others.
The experts at Realtor.com evaluated countries with plenty of beachfront but also relatively painless laws on foreign homebuyers. Then they looked at a number of other important issues, including safety, size of the coastline and the cost of living.
Jennifer Stevens, executive editor of the International Living website, commented:
My No. 1 caution is that [home-buying] laws in other countries do not look like the laws in the United States. You need to get a good attorney, who isn’t representing the seller, to lead you through the process.
Perhaps it goes without saying that no beach town in the United States made the list — they’re just too expensive.
Here’s the list, along with the country’s population and the length of its coastline.
Zlatni Rat (Croatia)
> Population: 4.2 million
> Coastline: 3,626 miles
Myrtos Beach (Greece)
> Population: 11.2 million
> Coastline: 8,498 miles
> Population: 129.2 million
> Coastline: 5,797 miles
Port Dickinson (Malaysia)
> Population: 31.6 million
> Coastline: 2,905 miles
Praia da Rocha (Portugal)
> Population: 10.3 million
> Coastline: 1,114 miles
Sunny Beach (Bulgaria)
> Population: 7.1 million
> Coastline: 220 miles
An Bang Beach (Vietnam)
> Population: 95.5 million
> Coastline: 2,140 miles
La Concha Beach (Spain)
> Population: 46.4 million
> Coastline: 3,085 miles
Dominical Beach (Costa Rica)
> Population: 4.9 million
> Coastline: 802 miles
> Population: 16.6 million
> Coastline: 1,390 miles
MARCH NEWSLETTER 2
While Most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy, as many of the biggest companies, especially the technology giants, trade in the low to mid-hundreds per share — all the way up to over $1,000. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found five stocks trading under the $10 level that could provide investors with some solid upside potential. While more suited for aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
This stock has been absolutely demolished from its 2014 highs, but it may be offering aggressive investors big upside potential. Weatherford International Ltd. (NYSE: WFT) is one of the largest multinational oilfield service companies, providing innovative solutions, technology and services to the oil and gas industry. It operates in over 100 countries and has a network of approximately 1,200 locations, including manufacturing, service, research and development, and training facilities and employs approximately 37,000 people.
The company offers customers a wide range of global capabilities, including a proprietary system for pressure management in the mushrooming arena of subsea production. The changes in government oil policy in Mexico in 2014 may provide some favorable tailwinds for the company, despite the huge downturn in oil pricing.
SunTrust rates the shares at Buy and has a massive $6 price target on the stock. That compares with the Wall Street consensus target of $4.90, as well as the most recent closing price of $2.64.
This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.
Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, and 41 rigs for offshore drilling operations in the United States and internationally.
While the stock has rallied off the lows, Nabors is still down over 50% from highest levels posted a year ago. This concern has been exacerbated recently by a softer-than-expected third-quarter earnings report and focus on 2018 non–cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.
Nabors investors are paid a 3.5% dividend, though that may be lowered going forward. Merrill Lynch has a $10 price target and rate the stock at Buy. The posted consensus price objective was last seen at $9.10. Shares closed well below those levels Friday at $7.18 apiece.
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