It is common practice for investors to use the price-to-earnings ratio (P/E ratio) to determine if a company is over or undervalued. There are, however, many extreme cases of stocks trading at 10,000 or more times their earnings - these kinds of situations affect the ratio's accuracy for assessing a company. The companies with a high P/E ratio are typically startup companies with little or no revenues; however, a high P/E does not necessarily mean the stock isn't a good buy for the long term.
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Monday, February 19, 2007
Barclays 2006 profits jump 35 pct on BarCap boom
Barclays Plc, Britain's third biggest bank, beat expectations with a 35 percent jump in annual profits on Tuesday, as growth in investment banking and fund management countered a steep rise in bad debts.
Barclays reported record pretax profit of 7.14 billion pounds for 2006, up from 5.28 billion a year earlier and above an average forecast of 7.01 billion based on 18 analysts polled by Reuters Estimates.
Barclays said its bad-debt charge was 2.15 billion pounds last year, up 37 percent from 2005, as UK borrowers struggled to pay back loans at its Barclaycard credit card unit.
Read more at Reuters South Africa
Barclays reported record pretax profit of 7.14 billion pounds for 2006, up from 5.28 billion a year earlier and above an average forecast of 7.01 billion based on 18 analysts polled by Reuters Estimates.
Barclays said its bad-debt charge was 2.15 billion pounds last year, up 37 percent from 2005, as UK borrowers struggled to pay back loans at its Barclaycard credit card unit.
Read more at Reuters South Africa
Africa's ARM H1 EPS up fourfold to 264 cts
South Africa's African Rainbow Minerals Ltd (ARM) said higher metal prices boosted earnings per share fourfold to 264 Sth African cents in the six months to end December from 64 cents a year ago.
The diversified mining group said on Tuesday it had seen higher prices for platinum, nickel, iron ore, manganese and its coal unit, although exploration costs and rising corporate costs had somewhat reduced the earnings.
Read more at Reuters South Africa
The diversified mining group said on Tuesday it had seen higher prices for platinum, nickel, iron ore, manganese and its coal unit, although exploration costs and rising corporate costs had somewhat reduced the earnings.
Read more at Reuters South Africa
Anglo American bids for Mitsui stake in Sesa - paper
Mining giant Anglo American Plc has joined the race to bid for Japan's Mitsui & Co's 51 percent stake in Indian iron ore exporter Sesa Goa Ltd., the Business Standard reported on Tuesday.
Anglo American may emerge as a front runner as it had an existing partnership with Mitsui, Japan's second-biggest trading firm, the newspaper said, quoting unidentified banking sources
Read more at Reuters South Africa
Anglo American may emerge as a front runner as it had an existing partnership with Mitsui, Japan's second-biggest trading firm, the newspaper said, quoting unidentified banking sources
Read more at Reuters South Africa
Rand holds firm vs dollar on budget eve
South Africa's rand remained firm against the dollar on Tuesday morning, with traders forecasting a generally quiet session on the eve of Finance Minister Trevor Manuel's 2007 national budget speech.
The rand was a touch stronger at 7.0920 around 0640 GMT from a close of 7.1150 in New York on Monday.
In his proposals to parliament, Manuel is expected to announce the first ever budget surplus for Africa's biggest economy, a prospect that has helped boost government bonds over the past few days.
Read more at Reuters South Africa
The rand was a touch stronger at 7.0920 around 0640 GMT from a close of 7.1150 in New York on Monday.
In his proposals to parliament, Manuel is expected to announce the first ever budget surplus for Africa's biggest economy, a prospect that has helped boost government bonds over the past few days.
Read more at Reuters South Africa
French nukes 'circling Eskom'
Leading French nuclear companies are circling power utility Eskom, hoping to get in on the construction of the next conventional nuclear plant in the Western Cape, Business Report said on Tuesday.
Industry speculation is that Areva, the company that built South Africa's first and only plant at Koeberg, is prepared to take a stake in the development of the fourth-generation pebble bed modular reactor programme in exchange for the contract to build the country's second conventional nuclear plant.
Read more at FIN24.co.za
Industry speculation is that Areva, the company that built South Africa's first and only plant at Koeberg, is prepared to take a stake in the development of the fourth-generation pebble bed modular reactor programme in exchange for the contract to build the country's second conventional nuclear plant.
Read more at FIN24.co.za
Absa to place R1-2 bln in pref shares
South African biggest retail bank Absa Bank Ltd will place between 1-2 billion rand in preference shares to maintain its Tier I capital base, the bank said on Tuesday.
Absa Bank, a unit of Absa Group Ltd majority owned by Britain's Barclays Plc., said it intended to place the preference shares to selected investors at an effective 74 percent of prime interest rate.
Read more at Reuters South Africa
Absa Bank, a unit of Absa Group Ltd majority owned by Britain's Barclays Plc., said it intended to place the preference shares to selected investors at an effective 74 percent of prime interest rate.
Read more at Reuters South Africa
Absa banks 24% more earnings
South African banking group, Absa, increased annual headline earnings per share by 24% but said earnings growth may slow due to tight monetary conditions and household indebtedness.
Absa, majority-owned by Britain's Barclays Plc, said on Tuesday headline EPS rose to 1 181.8 cents per share while headline earnings increased by 25% to R7.87bn.
Read more at FIN24.co.za
Absa, majority-owned by Britain's Barclays Plc, said on Tuesday headline EPS rose to 1 181.8 cents per share while headline earnings increased by 25% to R7.87bn.
Read more at FIN24.co.za
Cyclical Versus Non-Cyclical Stocks
Investors cannot control the cycles of the economy, but they can adjust their investing practices with its ebbs and flows. Adjusting to economic transitions requires an understanding of how industries are characterized by their relationship to the economy. It's important for you to know the fundamental difference between cyclical and non-cyclical companies so that you can distinguish between sectors that are affected by economic changes and those that are more immune. Here we look at the industries that reside within these categories, and identify where it's best to put your money when the economy starts to decline.
Read the full article at investopedia.com
Read the full article at investopedia.com
Anglo American boosts S.African stock market
South African shares closed slightly higher on Monday, boosted by a rally in Anglo American, the bourse's most heavily weighted stock.
"Today was mainly a resources day, with industrials and financials flat," African Harvest portfolio manager Rajay Ambekar said.
The Johannesburg Top-40 index of blue-chip stocks traded 0.45 percent stronger to 24,029.73 points, while the All-share index gained 0.42 percent to 26,623.23 points.
Diversified mining group Anglo American was among the leading blue chips, up 1.80 percent to 361.73 rand. Rival miner BHP Billiton was 0.43 percent stronger, at 152.35 rand.
Steel manufacturer Mittal Steel, which is due to report results this week, was up 3.37 percent to 120.01 rand. Apart from expectations of solid results, Ambekar said the stock was further boosted by consolidation of the global steel market.
Read more at Reuters South Africa
"Today was mainly a resources day, with industrials and financials flat," African Harvest portfolio manager Rajay Ambekar said.
The Johannesburg Top-40 index of blue-chip stocks traded 0.45 percent stronger to 24,029.73 points, while the All-share index gained 0.42 percent to 26,623.23 points.
Diversified mining group Anglo American was among the leading blue chips, up 1.80 percent to 361.73 rand. Rival miner BHP Billiton was 0.43 percent stronger, at 152.35 rand.
Steel manufacturer Mittal Steel, which is due to report results this week, was up 3.37 percent to 120.01 rand. Apart from expectations of solid results, Ambekar said the stock was further boosted by consolidation of the global steel market.
Read more at Reuters South Africa
Rand firm in quiet trade, eyes budget
South Africa's rand held steady against the dollar on Monday after firming in early trade, supported by gold and positive emerging market sentiment.
Trade was thin due to a market holiday in the United States and amid consolidation ahead of the presentation of South Africa's budget on Wednesday.
The local unit was trading at 7.1240 to the dollar at 1530 GMT, 0.4 percent stronger than Friday's close in New York, but it was off the session's firmest mark of 7.10.
Dealers said the rand was trading fairly strong, with gold near a 7-month high and emerging markets broadly positive.
Read more at Reuters South Africa
Trade was thin due to a market holiday in the United States and amid consolidation ahead of the presentation of South Africa's budget on Wednesday.
The local unit was trading at 7.1240 to the dollar at 1530 GMT, 0.4 percent stronger than Friday's close in New York, but it was off the session's firmest mark of 7.10.
Dealers said the rand was trading fairly strong, with gold near a 7-month high and emerging markets broadly positive.
Read more at Reuters South Africa
Analyze Cash Flow The Easy Way
If you believe in the old adage, "it takes money to make money," then you can grasp the essence of cash flow and what it means to a company. The statement of cash flows reveals how a company spends its money (cash outflows) and where the money comes from (cash inflows).
We know that a company's profitability, as shown by its net income, is an important investment evaluator. It would be nice to be able to think of this net income figure as a quick and easy way to judge a company's overall performance. However, although accrual accounting provides a basis for matching revenues and expenses, this system does not actually reflect the amount the company has received from the profits illustrated in this system. This can be a vital distinction. In this article, we'll explain what the cash flow statement can tell you and show you where to look to find this information.
Read the full article at investopedia.com
We know that a company's profitability, as shown by its net income, is an important investment evaluator. It would be nice to be able to think of this net income figure as a quick and easy way to judge a company's overall performance. However, although accrual accounting provides a basis for matching revenues and expenses, this system does not actually reflect the amount the company has received from the profits illustrated in this system. This can be a vital distinction. In this article, we'll explain what the cash flow statement can tell you and show you where to look to find this information.
Read the full article at investopedia.com
No large-scale tax relief seen
South Africans should not expect large-scale tax relief in this year's Budget.
It is likely the focus will fall, instead, on social spending with, among other things, the planned national pension fund and possibly a basic-income subsidy as the core issues, notwithstanding the fact that room for tax relief for individuals does exist.
Read more at FIN24.co.za
It is likely the focus will fall, instead, on social spending with, among other things, the planned national pension fund and possibly a basic-income subsidy as the core issues, notwithstanding the fact that room for tax relief for individuals does exist.
Read more at FIN24.co.za
Inflation forecast up at 5.2%
Consumer inflation excluding interest on mortgage bonds (CPIX) - the measure used by the South African Reserve Bank (SARB) for its inflation target - is expected to increase to 5.2% in January from December's 5.0%, an I-Net Bridge survey has found.
Three economists expected CPIX to break below 5.0%, while nine of the 14 economists surveyed expected an increase above 5.0%. Forecasts ranged from 4.9% y/y to 5.3% y/y. CPIX was at 4.3% a year ago.
Read more at FIN24.co.za
Three economists expected CPIX to break below 5.0%, while nine of the 14 economists surveyed expected an increase above 5.0%. Forecasts ranged from 4.9% y/y to 5.3% y/y. CPIX was at 4.3% a year ago.
Read more at FIN24.co.za
Share weakness surprising
It may seem anomalous to treat one of SA's biggest industrial groups as a break-up situation, but most of the talk after today's results presentation by sugar, land and aluminium group Tongaat-Hulett centred on how the group's separate parts would be valued by the market after the planned unbundling of 50%-owned Hulett Aluminium.
Read more at FIN24.co.za
Read more at FIN24.co.za
JSE races to record close
The JSE raced to a record close on Monday buoyed by stronger metal prices, Asian markets and news that a large portion of a market heavyweight - AngloGold Ashanti - might be bought by Russia's Polyus.
However, the value and the volumes of trades were soft as the US markets were closed for a public holiday.
The all share index closed at its highest ever up 0.42% at 26 623.230.
The all share index touched a trading high of 26,721.590 earlier during the day.
Read more at FIN24.co.za
However, the value and the volumes of trades were soft as the US markets were closed for a public holiday.
The all share index closed at its highest ever up 0.42% at 26 623.230.
The all share index touched a trading high of 26,721.590 earlier during the day.
Read more at FIN24.co.za
Windfall tax details expected
Less than a year after appointing a team to investigate the potential for windfall taxes on South Africa's liquid fuel industry, Finance Minister Trevor Manuel is expected to announce details on the issue.
In his mini-budget speech last October, Finance Minister Trevor Manuel said he had received a comprehensive report from the team and that he would address the issue at the next full Budget
Read more at FIN24.co.za
In his mini-budget speech last October, Finance Minister Trevor Manuel said he had received a comprehensive report from the team and that he would address the issue at the next full Budget
Read more at FIN24.co.za
FTSE at 6-year high, boosted by miners, Sainsbury
Britain's FTSE 100 index rose to a six-year high by midday on Monday, led by mining stocks on a bullish outlook for copper, talk of a buyback from Anglo American and bid speculation around Sainsbury.
Anglo American surged 2.6 percent after the Financial Times reported the miner was expected to announce this week a further share buy-back plan that would return up to $4 billion to shareholders on the back of the boom in metal prices. JPMorgan lifted its price target for the stock.
Other miners were also buoyed by expectations that copper prices were set to rise as China replenished its stocks next week after the Chinese New Year holidays.
Lonmin climbed 2 percent, Kazakhmys gained 1.9 percent, BHP Billiton added 0.7 percent and Rio Tinto put on 1 percent.
Read more at Reuters South Africa
Anglo American surged 2.6 percent after the Financial Times reported the miner was expected to announce this week a further share buy-back plan that would return up to $4 billion to shareholders on the back of the boom in metal prices. JPMorgan lifted its price target for the stock.
Other miners were also buoyed by expectations that copper prices were set to rise as China replenished its stocks next week after the Chinese New Year holidays.
Lonmin climbed 2 percent, Kazakhmys gained 1.9 percent, BHP Billiton added 0.7 percent and Rio Tinto put on 1 percent.
Read more at Reuters South Africa
Gold probes 7-month high as dollar weakens
Gold surged to a seven-month high on Monday because of investor buying as the dollar weakened, and analysts expect the precious metal to push higher over coming days and weeks.
By 1130 GMT, spot gold was quoted at $670.90/$671.70 an ounce versus $669.00/669.70 an ounce late on Friday in New York. Earlier it hit an intraday peak of $673.20, the highest since July 17 2006 when it traded at a $676 high.
Read more at Reuters South Africa
By 1130 GMT, spot gold was quoted at $670.90/$671.70 an ounce versus $669.00/669.70 an ounce late on Friday in New York. Earlier it hit an intraday peak of $673.20, the highest since July 17 2006 when it traded at a $676 high.
Read more at Reuters South Africa
AngloGold Ashanti shares jump on Polyus report
Shares in the world's third biggest gold producer AngloGold Ashanti Ltd surged on Monday after a newspaper report that Russia's top gold miner Polyus Gold might buy a stake in Anglogold.
AngloGold shares jumped as much as 5.7 percent in early trade before paring gains to be up 3.97 percent at 352.99 rand by 0813 GMT.
Read more at Reuters South Africa
AngloGold shares jumped as much as 5.7 percent in early trade before paring gains to be up 3.97 percent at 352.99 rand by 0813 GMT.
Read more at Reuters South Africa
Oil dips, but Nigeria, refinery fires check fall
Oil futures slipped on Monday in modest profit taking from a surge late last week on jitters over Nigerian output, but losses were checked by refinery outages and signs that OPEC's supply cuts were helping drain stockpiles.
Front-month U.S. crude for March delivery was down 26 cents at $59.13 a barrel on the Globex electronic trading platform, after falling to as low as $58.87. London Brent crude was trading down 10 cents at $58.85 a barrel.
Read more at Reuters South Africa
Front-month U.S. crude for March delivery was down 26 cents at $59.13 a barrel on the Globex electronic trading platform, after falling to as low as $58.87. London Brent crude was trading down 10 cents at $58.85 a barrel.
Read more at Reuters South Africa
European shares open firmer, Daimler in focus
European shares opened firmer after strong performance in Japanese shares, and amid a slew of corporate news, while U.S. and several Asian markets are closed Monday.
The pan-European FTSEurofirst index of 300 leading shares rose 0.18 percent by 0802 GMT to 1,546.77 points.
London's FTSE 100 was up 0.3 percent, the French CAC 40 rose 2 percent and Germany's DAX gained 0.4 percent.
DaimlerChrysler shares rose 3.2 percent on news it was in talks with General Motors over the future of its ailing U.S. unit Chrysler.
Read more at Reuters South Africa
The pan-European FTSEurofirst index of 300 leading shares rose 0.18 percent by 0802 GMT to 1,546.77 points.
London's FTSE 100 was up 0.3 percent, the French CAC 40 rose 2 percent and Germany's DAX gained 0.4 percent.
DaimlerChrysler shares rose 3.2 percent on news it was in talks with General Motors over the future of its ailing U.S. unit Chrysler.
Read more at Reuters South Africa
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