Oil declines to 2-week low as stocks slide

Grant Smith, Bloomberg Published 7:55 am, Tuesday, February 6, 2018 Photo: KAREN BLEIER, Staff Image 1of/1 CaptionClose Image 1 of 1  An oil well near Tioga, North Dakota. ( AFP PHOTO / Karen BLEIER / FILESKAREN BLEIER/AFP/Getty Images)  An oil well near Tioga, North Dakota. ( AFP PHOTO / Karen BLEIER / FILESKAREN BLEIER/AFP/Getty Images) Photo: KAREN BLEIER, Staff Oil declines to 2-week low as stocks slide 1 / 1 Back to Gallery Oil slid to a two-week low and headed for its longest losing streak in two months as a plunge in global equities dragged other markets lower. Crude futures in New York fell a third day, sliding as much as 1.6 percent. Stock indexes from Japan to Germany tumbled on Tuesday after a frantic sell-off in U.S. shares sent the Dow Jones Industrial Average to its biggest loss in 6 1/2 years. Nonetheless, oil market conditions look "solid" thanks to production cuts by OPEC, according to Vitol Group, the world's largest independent energy trader. RELATED: Stocks plunge; Dow has biggest point drop in history Oil is being swept into the global sell-off at a time when concerns are emerging that a rally in crude is overdone. Speculation is also rising that U.S. shale production and stockpiles will undermine efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. The number of rigs drilling for crude in America jumped to the most in almost six months, and U.S. output breached 10 million barrels a day in November, the highest in more than 40 years. "Oil prices could not escape the risk-off mood in financial markets," said Norbert Ruecker, head of commodity research at Julius Bear Group Ltd. in Zurich. West Texas Intermediate for March delivery dropped as much as $1.03 to $63.12 a barrel on the New York Mercantile Exchange, the Continue Reading

Best Low P/E Stocks to Buy in January

The Dow Jones Industrial Average keeps hitting new highs, and it recently broke through the 25,000-point level. That suggests we're in a market where it's difficult to find stocks still offering good value. But it isn't. Scouring the universe of stocks, I identified Cars.com (NYSE: CARS), DSW (NYSE: DSW), and Harley-Davidson (NYSE: HOG) as stocks that look as if they offer not only attractive valuations, but also the promise of appreciating in value over the next few years. Image source: Getty Images. Cars.com There are good reasons the activist investors at Starboard Value staked out a 9.9% position in digital automotive marketplace operator Cars.com. The market is betting heavily against the stock, with more than a quarter of its shares outstanding shorted, and its days to cover have reached 10 -- anything over seven days is a lot. The hedge fund also thinks it's a candidate for a buyout by private equity. Although Cars.com hasn't had an impressive run since being spun off by Tegna last year, reasons remain for being bullish. Some 80% of Cars.com revenue comes from car dealerships that have annual subscription-based contracts, and though there are no long-term agreements with the dealers, the contracts are automatically renewed unless the dealers cancel them. Moreover, digital advertising is where car dealerships are spending the majority of their money. According to ad market researcher Borrell Associates, online and digital ads account for 54%, or $16 billion, of the $30 billion dealers will have spent in 2017. With over 20,000 dealers advertising on its site, Cars.com can expect to receive its share of ad spend, particularly if car sales are expected to decline. Trading at 18 times trailing earnings and only 12 times free cash flow, Cars.com's stock looks like a cheap choice that could see its engines rev in the future. Image source: Getty Images. DSW Footwear retailer DSW has had one of those cliched roller-coaster years, rising and Continue Reading

3 Embarrassingly Low Dividend Stocks

Income investors can earn a dividend yield of about 2% today by purchasing a diversified index fund that approximates the makeup of the S&P 500. Below, we'll look at a few well-known dividend stocks that pay well below that rate. Costco (NASDAQ: COST), FedEx (NYSE: FDX), and Ross Stores (NASDAQ: ROST) each appear to have room for significantly larger dividends, especially when their payouts are stacked up against industry peers. Image source: Getty Images. Costco should bulk up its payout Costco consistently beats its main rival Wal-Mart (NYSE: WMT) in key operating metrics, including sales growth, customer traffic, and membership loyalty. Yet the nation's second-largest retailer comes up short in the dividend department. Costco commits to pay just $0.50 per quarter to its shareholders, which equates to a 1% yield compared to Wal-Mart's 2%. That gap has been even larger in recent months, but Wal-Mart's surging stock price helped bring it down recently. The $2 per share in annual dividends that Costco promises translates to less than one-third of the earnings it booked in its most recent fiscal year. Wal-Mart's payout ratio, meanwhile, is much closer to the broader market average of 50%. Costco's actual dividend payout has been much larger over the last few years as a result of the $8 billion that it delivered to shareholders in a string of special one-time payments. Still, income investors can't count on those windfalls like they can with a steadily growing dividend like Wal-Mart's. FedEx isn't delivering much income FedEx is pouring resources into expanding its delivery network, just like its peer UPS (NYSE: UPS). But UPS has found extra cash to send to shareholders despite those major capital requirements, while FedEx hasn't. In fact, its yield is more than three times the 0.7% that FedEx pays today. Image source: Getty Images. FedEx's payout ratio is tiny, as well. The $426 million it paid out in fiscal 2017 amounts to just 14% of Continue Reading

Fast-food wars heat up as McDonald’s, Taco Bell and others roll out low-priced items

A new battle for low-priced eats is breaking out in the fast-food wars. As McDonald’s Corp. prepared to roll out a new Dollar Menu on Thursday, Taco Bell countered by announcing Wednesday that it would sell a new item, Nacho Fries, for $1 starting Jan. 25. Taco Bell, the Irvine-based unit of Yum Brands Inc., also said the fries were one of 20 new $1 items that the chain plans to unveil this year, on top of 20 “mainstay” $1 products it already sells including certain tacos and burritos. Wendy’s Co. also jumped into the fray, saying Wednesday it expanded the chain’s “4 for $4” menu to include eight entrees, such as burgers and chicken sandwiches. Each entree comes with chicken nuggets, a small order of French fries and a drink for $4. Jack in the Box Inc. this week also promoted “Value Done Jack’s Way,” with items priced from $1 to $5. All the moves are aimed at grabbing market share from rivals — or at least protecting the share they have — and boosting sales with so-called value offerings. Even if the chains make little profit, if any, from the inexpensive fare, “it’s all about getting people in the restaurants,” said R.J. Hottovy, an industry analyst at the investment research firm Morningstar Inc. “Right now it’s a market-share game.” Another goal: Once customers walk in, they’re apt to buy additional items with higher prices and profit margins. “You go in for the $1 burger but you tack on a beverage or a side dish,” Hottovy said. In the case of McDonald’s, the new value menu is needed to reverse customer-traffic declines at its U.S. restaurants that the industry titan has suffered in recent years since moving away from its original Dollar Menu, some analysts said. McDonald’s has continued to prosper nonetheless. Its U.S. same-store sales, or those of stores open at least a year, rose 4.1% in the third quarter of 2017 from a Continue Reading

Street fashion finds a new meaning with retail trucks that ferry new styles and low prices all over town

You trust food trucks to fill your stomach — why not let shopping trucks fill your closet? Whether you need beachy espadrilles, some bold Thierry Lasry sunglasses or a last-minute mani-pedi, there’s a store on wheels for every fashion and beauty desire. And the drivers of this trend say they’d rather be on the road than parked at a brick-and-mortar. “I never really wanted to start a store,” says the Styleliner founder Joey Wolffer, 31, who jump-started the mobile shopping movement by converting an old potato chip delivery van into a high-end boutique in 2010. “But I wanted to launch my own brand.” Wolffer fills her stylish truck with hand-picked European designers and gets calls from Hamptons clients to park the goody-packed van outside their parties. She’s not the only show on the road. In Bushwick, Tiffany Nicole McCrary parks her 1987 Continental camper across from the hip pizzeria Roberta’s. Her pitch? Everything is $10 or less. “I was really looking for a way to make money,” says McCrary, owner of the Mobile Vintage Shop. “I had this run-down trailer literally illegally parked in the middle of the street.” Turns out, there are deals on wheels all over the place. Here’s a road map for getting the best goods off the back of a truck — from the Hamptons to Harlem: The Styleliner Who: Joey Wolffer realized it was time to hit the streets when she launched the Styleliner three years ago. “In 2010, food trucks were definitely taking off, as were Twitter and social media,” says Wolffer. Before rolling into rolling fashion, she worked in the corporate world and at her family’s Wolffer Estate Vineyards in the Hamptons. Her motive is simple: She has “always been interested in traveling and finding unique designers,” but knew she wouldn’t be happy “sitting in a store and waiting for customers to come.” Continue Reading

Amazon drops low-price strategy in grocery expansion

SAN FRANCISCO -- Amazon.com CEO Jeff Bezos built the world's largest Internet retailer by having the lowest prices.That strategy is changing as the company expands into the vast grocery and consumer packaged goods market through its AmazonFresh business.Now the priority is convenience rather than the lowest prices, an approach that could limit how much of this market Amazon can grab from grocery store operators like Safeway and Kroger and other rivals including Wal-Mart Stores, FreshDirect and the start-up Instacart.AmazonFresh, which delivers groceries and related items the same day or the next day, started as a test in Amazon's home town of Seattle several years ago. The service expanded to Los Angeles earlier this year and launched in San Francisco Wednesday. If those cities perform well, the company may expand to many other urban areas and even outside the U.S. next year.The thought of Amazon entering a new sector usually strikes fear into the hearts of incumbent companies as they worry profit margins will have to fall to compete with the Internet giant's lower prices.But AmazonFresh prices are higher, or similar to most grocery stores, according to a recent analysis by RetailNet Group.A basket of almost 30 grocery items from AmazonFresh in Los Angeles cost $94.80 and AmazonFresh in Seattle charged $99.58, according to a September survey by RetailNet.Walmart To Go, an online grocery delivery rival, charged $80.38 for the same products and it cost $84.85 to have Instacart pick up and deliver those items from Trader Joe's, the survey found. Online, only Safeway's delivery service cost more than AmazonFresh in Seattle, at $101.83.A similar basket of groceries cost less than $90 at physical grocery stores in LA run by Walmart, Trader Joe's and Target, the survey also found.AmazonFresh also charges a $299 subscription for customers in LA and San Francisco. This makes grocery deliveries free for orders over $35 and it also gives shoppers access to the benefits of Continue Reading

Big jump in low-ranking stocks could already be on last legs

Some of the poorest-quality stocks are among the best performers when the markets turn up after a sharp decline. Think of this group like a roller coaster: The steeper the initial plunge, the faster the subsequent ascent. “What was priced to go out of business, but did not, is the area that has the greatest upside potential,” said Sam Stovall, chief investment strategist at S&P Equity Research. Stocks in the S&P 500 index with the lowest-quality ranking have had a median total return of 57.1% as the market advanced in the three months through mid-June, while those with the highest ranking enjoyed only a 19.4% median return. The quality rankings are a computer-scored measure of a stock’s profits, dividend growth and stability over 10 years. Over the past year, low-ranked stocks in the S&P 500 tumbled 37.9%, while the best-rated stocks fell 17.2% on a total-return basis, which includes dividends. Stocks usually overshoot heading up or down, Stovall noted. He offered a hypothetical example of a poorly rated stock that sold for $25 a year or so ago, fell to $1 and has since rebounded to $5. But the rebound in lower-quality stocks may have played out for this cycle, possibly making the valuations of higher-quality issues more attractive. Highly rated stocks in the S&P 500 have a median price-to-earnings ratio of 14.9, meaning you are buying the stock (the price) for almost 15 times what the company makes in profits (the earnings). A price-to-earnings ratio is one of Wall Street’s most widely used yardsticks of a company’s value. Stocks in the second-highest ranking are even cheaper at a P/E of 14, while low-ranked issues have a median P/E of 20.2. Also, the higher-ranked stocks usually pay higher dividends, a cushion should the market retreat again. Join the Conversation: Continue Reading

Quirk allows Americans to buy stock in Chinese companies at a very low price

If you want to invest in China, the world's fastest-growing major economy, there's an opportunity due to a quirk that allows Americans to buy stock in several thousand Chinese companies at valuations far lower than what's available to the Chinese. Here's how it works: As China's economy blossoms, millions of people have money to invest. But only the largest companies sell stock to the public in China, leaving investors with limited choices. The government also restricts the flow of Chinese money outside of China, limiting citizens to their own markets. This means there's a huge pool of cash chasing a small number of stocks, which explains why the valuations of stocks in China are often sky-high. Many smaller companies, blocked from the domestic Chinese exchanges, are forced to go outside of China. About 1,500 have sold stock in the U.S. Thousands more have done so in Canada, England, Hong Kong and Singapore. Most of the Chinese companies that have done initial public offerings in the U.S. are regarded legally as American companies. They have U.S. lawyers and auditors, and file reports with the Securities and Exchange Commission, just like other public companies, except that they operate in China. These companies tend to have low price-to-earnings ratios - which measures a company's stock price compared with its earnings per share of stock - especially when contrasted with their growth rates. Some American investors are leery of small companies doing business in the U.S. but operating in China. But if Chinese citizens could invest their money outside of China or if these companies could sell shares in China, the price of many of these stocks would soar. For now, they remain orphans on foreign exchanges. It is relatively easy to learn about these companies. You can find financial information at SEC.gov. Many brokerage firms have analysts who follow them, so you can read the reports. Almost all have investor relations firms that can put you on an Continue Reading

Trenton makes: HHG Dev. gets buyers with historical housing stock and arty lofts at low prices

When Fabienne Clark tells people she’s moving to Trenton, they look at her like she’s a little off. But the Wall Street legal staffer knows better. Clark bought a two-bedroom loft for just over $200,000 in the Cracker Factory, a converted 1800s manufacturing facility in the Trenton Ferry  neighborhood that blew away anything she saw in New York City for the price, construction quality and space. She even got about $10,000 back from a New Jersey state financial program geared toward promoting urban development. “Whenever anyone puts Trenton down, I just look at them and say you need to regroup and see what they got going on there,” says Clark, a Bedford-Stuyvesant renter who closes on her 1,200-square-foot home in January. “I saw a lot of trash in New York before they showed me this.” “They” are HHG Development Associates, three partners committed to improving the housing stock in the often-criticized New Jersey capital city. Composed of two architects and an ex-technology executive heading up sales and marketing, HHG fights daily to improve Trenton’s reputation and draw new residents. With quiet streets that feel more Brooklyn Heights than Washington Heights, a new train station and a community that celebrates ethnic and sexual diversity, Trenton may be poised to dispel the popular perception that it’s not a livable city. “Our target housing market extends from the Bronx to Philadelphia,” says David Henderson, an HHG partner and preservation architect who moved to Trenton 19 years ago from Hell’s Kitchen after working with Robert A.M. Stern Architects. “New York City is just an hour away. It’s closer to midtown for some buyers than where they live in Brooklyn.” According to Henderson, it’s more than location that attracts buyers.  “We’re offering people a chance to live in renovated historic housing at prices that are a Continue Reading


Thrifty girls, tonight's your night. This evening, the City Opera Thrift Shop - the Bergdorf of bargain haunts - reopens with stocked racks of Marc Jacobs ($50 for an Edwardian styled blouse), Christian Dior (yes, that's just $25 for a jeans jacket) and Tocca (red embroidered dress, $50), among others (on a scouting mission, we spotted Cynthia by Cynthia Steffe and ­Lolita Lempicka). The spring preview, with a $10 entrance donation at the door, gives throngs of shoppers first dibs on some of the most sought-after second-hand goods in the city. "Because of our reputation for having a fashion edge, many of the fashionistas who shop in the store also donate to us," says Jay Thompson, the store's organizer and manager. "Seventh Ave. designers and fashion students often shop our vintage events for inspiration. Because of our 'cozy' space, we edit our donations and put out only the highest quality merchandise." Proceeds support the New York City Opera (hence the name) and help with the creation and upkeep of opera costumes. The store's artistic bent draws indie fans from Parker Posey to Chloe Sevigny, who are frequent thrifters. Since opera is never far from the thrift store's heart, every event has a theatrical theme - drama or comedy - depending on what's on tap at Lincoln Center. But the only real drama is choosing which thriftastic piece to grab. And it won't be easy. What draws shoppers to the City Opera is the condition of the goods: Items that aren't from designers are still in perfect condition - and some even look vintage. And everything's neater and better arranged than any New York City closet. City Opera also offers bags, shoes, home accessories, books and artwork, too - and in late March, the store fills up with vintage wares from Gucci to Pucci that have been collected throughout the year. Spring Shopping Preview; today, 5 p.m.-8 p.m.; 222 E. 23rd St., (212) 684-5344. $10 donation at the door. SIDEBAR: THRIFTERS ADRIFT Continue Reading