On the 31st of January, 2013 we wrote about the cheapness of Atlas Iron Ltd. at $1.50, when we actually bought our shares from it. Then, as we predicted, it climbed to $1,875, what is a nice, accurate 25% gain. On 14th of February we sold it, realizing the profit, but furthermore we have gone short on this one. But why? you could ask, because we have written that Atlas Iron is a good pick for investors. That is true, and we hold our statement, this is a good pick for investors. But we are not only investors, we are traders as well, and everybody wants to maximize their profit, just like us, so here is a new idea for Atlas Iron Ltd.
The thing is simple. We are waiting for the earnings release, what is coming out on 26th of February, so until then the prices are forced into a zone, and cannot escape from it. The zone’s upper end is marked by the $1.90 price, which was very close with the $1.875 price, and on the following day it is started to fall. In our opinion, the next week, we will see Atlas falling back until $1.55-$1.50, so we have gone short at $1.85 price and we set the limit on $1.55 as we are very cautious investors/traders. If you are not follow our example, just follow the charts of Atlas Iron and see our vision come true. Or not.
Randgold Resources Ltd.’s (LSE:RRS.L) results for the fourth quarter and year ended 31 December 2012 show that Randgold was able to overcome extraordinary challenges and close a record year concerning both production (nearly 800,000 ounces of gold), profits (over half a billion US dollars) and EPS ($4.70). They rose 14%, 16% and 12% year over year respectively. These results were attained thank to the 20 percentage increase in gold sales and an average price rise of 4% for gold. Linked to these operations exploration and corporate expenditure rose only 7.5% but total costs went up 38%. The company can show up positive results in case of gold on hand, which increased 19%, receivables 120% and on the other side payables climbed only 36%.
Other factors such as injuries and infections rates decreased considerably, which ensures higher efficiency for the company. We should also mention that beside the positive developments there were difficulties encountered with the expansion of Rnadgold’s flagship Loulo-Gounkoto complex in Mali as well as with the the fast-track development of the giant Kibali project in the Democratic Republic of Congo. But these hurdles will be taken the company in the near future because Randgold was spending $563m on expansion projects over the year. This amount of money indicates real effort and tenor to improve the company’s locations and operations portfolio.
Despite of the very positive picture about the company after its record achievements in 2012 investors are still concerned about the direction of the gold price. But they shouldn’t. Gold is at a relatively low level currently and factors such as the request from the side of Germany that they want to get back their gold reserves from the U.S. will certainly shift up the gold price.
Frankly, Randgold is currently facing some other difficulties as its CEO Mark Bristow said, gold exploration and mining in Africa must compete for investment with South America, Eastern Europe, Russia, Asia and other countries on the Pacific Rim. These competitors have better infrastructures, greater pools of skilled workers and more sophisticated economies. Although if there is a lower stage of development there can be achieved a much greater improvement. Every investor should know that a higher risk, should it be country or companyspecific, it will be compensated by higher return. We should also point out that the mining sector will always be a risky investment but with a prudent and good choice our risk-taking behaviour will recieve its reward.
We see really positive potential and possibilities in Randgold Resources and set a target price around 7000 penny or nearly $100 for 2013.
Adidas AG (XETRA:ADS:DE) doesn’t have to be introduced. The brand is well-know by everybody so we will describe the company’s performance and what we are expecting from it in the future. Several banks and financial institutions gave ADS.DE recently a buy rating because Adidas‘ stock price is showing a strong bullish trend since the middle of 2011 as it was around 45 euros. Last month its share price is moving between 71 and 66 euros. Currently it’s trading at 67-68 euros and we are curious if it will be able to break through the 70 euros limit in the long run. Frankly, the post-crisis environment is quite beneficial for Adidas, it’s growth in sales, earnings and market capitalization. The firm is guarding its high liquidity ratios and shows increasing return on equity and capital employed, which are one of the most important indicators of a healthy company. The balance sheet data are denoting rise in every seeded account as it can be seen on the table below
|Balance Sheet Data (€ in millions)|
|Total assets 4)||11,380||10,618||8,875||9,533||8,325|
|Receivables and other current assets||2,558||2,324||2,038||2,523||2,048|
|Working capital 4)||2,154||1,972||1,649||1,290||1,522|
|Net cash/(net borrowings)||90||(221)||(917)||(2,189)||(1,766)|
|Shareholders’ equity 4)||5,327||4,616||3,771||3,386||3,023|
Further, Adidas was able to reduce its personnel expenses (from 35,754 € to 35,153 € per employee) compared to the increase in the number of employees which is signaling rationalization and optimization within the company beside its expansion. These factors represent a forward looking and balanced growth strategy.
And again we assume that Adidas‘ share price is on a parking orbit until its Q4 and full year 2012 results will come to light on March 7. Shareholders and potential investors are waiting for further increase in sales, earnings and dividends, which are likely to be realistic requirements only the extent of growth is a real question . The company’s dividend payout ratio is continuously increasing since 2008, which indicates a strong allegiance to its stakeholders. The tenor to reduce borrowings to an optimal level and the increase in cash and receivables let us presume an optimistic picture for the company’s future. ADS is at a position where it is worth to pay attention to it, and get it soon particularly for them who are looking for a mid-long-run investment opportunity.
How will BlackBerry‘s (NASDAQ:BBRY), formerly called Research in Motion‘s, new smartphone line perform on the “real” market after the drop of RIMM (now BBRY) shares while the company introduced them on Wednesday. Investors did not like that sales will only start in March because BlackBerry is already late to get in the smartphone market. Originally the company planned to announce the new BlackBerry 10 smartphones in 2011 but it struggled to work with a new operating system. Despite of these negative signs BlackBerry surprised the market with its low prices. The question is if BlackBerry will be able to develop a totally different marketing strategy than it has been following until now. Because Z10 had been put together from the valuable features of Apple Inc‘s iPhone and Samsung’s smartphones and it’s not a conventionally phone from BlackBerry even if they have enriched the phone with own developments. For example the “Black Berry balance” which allows users to separate work and private life, to have one set of apps and settings while at work and another, completely different set when they’re at home. The idea is that users can keep their office time free from distracting apps such as Angry Birds, while sheltering their private life from office emails, etc. Additionally the BlackBerry Messenger returns with a new video chat feature. These innovations will go along more than 70,000 apps in March with the release of BlackBerry 10′s.
It seems that investors are still waiting because the release in March is far away yet. BlackBerry is a well-known brand name worldwide and although the Z10 is not a perfect model, it could provide the floundering company with optimism and potentially boost sales as BlackBerry is aiming to gain traction in key emerging markets like India and Indonesia it was the best decision to come out with a low-cost smartphone. Frankly we assume that a low-cost smartphone with already known and innovative features will be welcomed all over the developed world not only in emerging markets. This is why we think that BBRY is worth to put it on our watch list and consider to buy it soon.
Relations between the United States and the Russian Federation constantly worsening since the reelection of President Vladimir Putin, distracting the process of a 2009 initiative agreed by Barack Obama and former russian president Dimitrij Medvedev to “reset” ties.
Alexei Pushkov, head of the foreign committee at the russian parliament and a Putin ally said this process is slowed down and endangered by the worsening relationship between the two countries. ”The priority is political realism, ideology matters should be secondary. I tell you, issues over ideology and values can destroy anything,” Pushkov told Reuters in an interview. ”If the United States believes that as part of bilateral relations between two countries it can be supporting the Russian opposition, this clearly does not help Russian-U.S. ties,” he added, speaking next to a framed picture of him with Putin. “The U.S. should not be part of Russia’s internal political process.”
It is not so easily understandable to us why the U.S. continuously trying to force his political system on countries on the other end of the World. Because it is understandable that they are seeking a bigger piece from the russian cake, but after 2009 Russia started to open it’s economy, so step-by-step the american investors could step in and take a hard cash. But they have to wait now, because of the main characteristic of the U.S.’s ‘warfare’ that is “The Guardian of the Western Democracy and Human Rights”.
The U.S. government simply cannot stop interfering in other countries internal political system. That kind of strategy was very well working in the Cold War, but not in the 21st century. Tha american leaders have to realize that democracy and human rights are no longer widely wanted values. And that is logical. Russia’s political environment and the russian people is not ready for a fully working democracy. And we have not talked about the countries in the middle east. They are far not ready.
Washington and Moscow have recently scrapped bilateral deals after Moscow was enraged by the U.S. Magnitsky Act, named after an anti-graft lawyer who died in a Russian prison. The bill bans visas and freezes assets of Russians deemed rights violators. Pushkov told that there was a tacit agreement that the U.S. will discuss the matters of human rights and democracy in a non-political way, and outgoing Secretary of State Hillary Clinton and other Washington officials violated it.
Moscow retaliated against the Magnitsky Act with its own blacklist of U.S. officials. It also banned Americans from adopting Russian orphans and outlawed U.S.-funded NGOs that it said meddled in political activities. These are understandable reactions, especially the outlawing of NGOs, because they were interfering in Russia’s political life, which is clearly a violence of home affairs.
The other problem is, today Russia’s and USA’s representatives meet in Munich to discuss among others the case of Syria, where U.S. seeks to put pressure on al-Assad’s regime. That is almost impossible, because of the economic and personal ties between al-Assad and Moscow. The recent behaviour of the United States worsened onwards the situation leaves only a slight chance to get an agreement. As a final conclusion, we could say that the leaders of the U.S. have to start think over the export of human rights and democracy to countries where they are not welcome.