As more investors flock to the FMCG sector as a defensive measure, FMCG stocks continue to reap huge investment returns. Blue-chip stocks like Hindustan Unilever (HUL), Nestle , Dabur , Colgate , Britannia and Glaxo SmithKline Consumer yielded over ten-fold jump in return for every rupee invested ( One rupee test ) during the period FY10-FY12. Clearly, the FMCG sector is being lapped up by the investor community.
Warren Buffet, the guru of value investing believed that the best way to test the investment potential of a stock is to determine the return earned by shareholders on every rupee invested. In other words, have these stocks generated at least one rupee for every rupee invested? This is measured by the increase in market cap relative to the increase in net worth.
The table below shows that FMCG companies have done very well with the "one rupee test", which is why investors are willing to wager on this defensive bet?
One Rupee test on FMCG companies (standalone)
Top 5 Defensive Companies To Watch In Right Now: Pennant Energy Inc.(PEN.V)
Pennant Energy Inc., a junior exploration company, engages in the investment, exploration, and development of oil and gas properties. It holds 100% working interest in the Bronson and Kaybob prospects covering 1,920 acres of land located in the established Kaybob South Field area of west central Alberta; an undivided 25% working interest in 2 producing oil and gas wells and certain P&NG right in 2 sections of land located at Badger, Alberta; 17.17% working interest in the Ferrier property located northwest of Red Deer, Alberta; 25% working interest in the Pearl and Watts fields located northeast of Drumheller, Alberta; and 24% interest in the Pembina property located southwest of Edmonton, Alberta. The company also has non-operated working interests ranging from 15% to 45% in 9 producing oil wells in the Daly Field in Manitoba. The company was formerly known as Penteco Resources Limited and changed its name to Pennant Energy Inc. Pennant Energy Inc. was founded in 1987 and is headquartered in Vancouver, Canada.
Top 5 Defensive Companies To Watch In Right Now: Gold Port Resources Ltd. (GPO.V)
Gold Port Resources Ltd., an exploration stage junior mining company, engages in the identification, acquisition, and exploration of mineral properties primarily in Guyana, South America. It principally explores for gold and copper ores. The company owns interests in the Groete Creek Gold and Akaiwong projects located in Guyana. Gold Port Resources Ltd. was incorporated in 1995 and is headquartered in Vancouver, Canada.
5 Best Value Stocks To Buy Right Now: MFA Financial Inc (MFA)
MFA Financial, Inc., incorporated on July 24, 1997, is engaged in the business of investing, on a leveraged basis, in residential Agency mortgage-backed securities (MBS) and Non-Agency MBS. Its business objective is to generate net income for distribution to its stockholders resulting from the difference between the interest and other income it earn on its investments and the interest expense it pays on the borrowings, which it uses to finance its leveraged investments and its operating costs. Its operating policies require that at least 50% of its investment portfolio consist of ARM-MBS, which are either Agency MBS or rated in two rating categories by at least one of rating agency, such as Moody�� Investors Services, Inc., Standard & Poor�� Corporation (S&P) or Fitch, Inc. The remainder of its assets may consist of direct or indirect investments in other types of MBS and residential mortgage loans; other mortgage and real estate-related debt and equity; and other yield instruments.
The mortgages collateralizing the Company�� MBS portfolio are Hybrids, ARMs and 15-year fixed-rate mortgages. The Hybrids collateralizing its MBS typically have fixed-rate periods ranging from three to 10 years. Interest rates on the mortgage loans collateralizing its ARM-MBS reset based on specific index rates, which include London Interbank Offered Rate (LIBOR) or the one-year constant maturity treasury (CMT) rate. The mortgages collateralizing its ARM-MBS have interim and lifetime caps on interest rate adjustments. The Company�� Non-Agency MBS have been at discounts to face/par value.
Advisors' Opinion:- [By Jon C. Ogg]
MFA Financial Inc. (NYSE: MFA) has an estimated $0.20 decline in book value. This is partially attributable to the company’s recent special dividend declaration. For the third quarter, Sterne Agee sees MFA with a core earnings per share of $0.19, yet the dividend of $0.50 is a combined $0.22 estimated and $0.28 special.
- [By Jonas Elmerraji]
We're seeing the exact opposite setup in shares of MFA Financial (MFA). Unlike NCT, shares of MFA have been in a well-defined downtrend since the middle of May. That high probability range puts this stock's likely target price lower for the end of August.
Since the best time to buy an uptrend is at support, it makes sense that the best time to sell a stock in a downtrend is at trendline resistance. That's the exact level that MFA is testing this week. If you own MFA right now, it makes sense to be a seller on the first semblance of a bounce lower.
Momentum provides some extra confirmation here too. RSI has been suck down in bearish territory since the uptrend began in May. Oscillators like RSI tend to become range-bound when stocks' price action trends. I'd look for a move above 50 on RSI as a precondition to a move higher in price.
- [By Dividend]
MFA Financial (MFA) has a market capitalization of $2.68 billion. The company employs 37 people, generates revenue of $499.16 million and has a net income of $306.84 million. MFA Financial�� earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $289.95 million. The EBITDA margin is 58.09 percent (the operating margin is 57.14 percent and the net profit margin 61.47 percent).
Top 5 Defensive Companies To Watch In Right Now: Sandspring Resources Ltd (SSP.V)
Sandspring Resources Ltd., a resource exploration company, engages in the exploration and development of mineral properties in the Republic of Guyana, South America. It primarily focuses on the Toroparu gold-copper prospect, which consists of 100% controlled Upper Puruni property comprising a claim block of 167 contiguous medium scale prospecting permits, 13 medium scale mining permits, and 7 small scale claim licenses covering an area of 74,742 hectares; and 5 contiguous prospecting licenses that cover an area of 23,471 hectares located west of Georgetown in the Upper Puruni river area, Guyana. The company is based in Centennial, Colorado.
Top 5 Defensive Companies To Watch In Right Now: Castings(CGS.L)
Castings P.L.C. produces and sells various iron castings. It offers ductile iron castings, spheroidal graphite (SG) iron castings, austempered ductile iron castings, simo castings, Ni-resist castings, and grey iron castings. The company also undertakes the design, including virtual analysis, of ductile and SG iron castings; and produces prototypes and pre-series castings, as well as fully machined ductile iron castings and sub-assemblies. It serves the commercial vehicle and automotive markets. The company has operations primarily in the United Kingdom, Sweden, rest of Europe, and North and South America. Castings P.L.C. is headquartered in Brownhills, the United Kingdom.
Top 5 Defensive Companies To Watch In Right Now: Reis Inc(REIS)
Reis, Inc., through its subsidiary, Reis Services, provides commercial real estate market information and analytical tools in the United States. The company maintains a proprietary database containing information on commercial real properties, including apartment, office, retail, and industrial properties in the metropolitan markets and neighborhoods. Its data is used by real estate investors, lenders, and other professionals to make informed buying, selling, and financing decisions; and debt and equity investors to assess, quantify, and manage the risks of default and loss associated with individual mortgages, properties, portfolios, and real estate backed securities. The company?s products include Reis SE and ReisReports that provide online access to a proprietary database of commercial real estate information and analytical tools designed to facilitate debt and equity transactions, and ongoing evaluations; and trend and forecast analysis at metropolitan and neighborhoo d levels, as well as to building-specific information, such as rents, vacancy rates, lease terms, property sales, new construction listings, and property valuation estimates. It serves banks, other financial institutions, investment funds, equity owners, regulators, brokers, and appraisers, as well as property owners, developers, and builders. The company was founded in 1980 and is based in New York, New York.
Top 5 Defensive Companies To Watch In Right Now: Mercer International Inc.(MERC)
Mercer International Inc., together with its subsidiaries, manufactures and sells pulp produced from wood chips and pulp logs. The company offers northern bleached softwood kraft (NBSK) pulp and market pulp. Mercer International sells its products primarily in Europe, Asia, and North America. The company was founded in 1968 and is based in Vancouver, Canada.
Top 5 Defensive Companies To Watch In Right Now: Berkshire Bancorp Inc.(BERK)
Berkshire Bancorp Inc. operates as the bank holding company for The Berkshire Bank that provides community banking services to businesses, professionals, and retail customers primarily in New York City metropolitan area and the Villages of Goshen and Harriman. The company offers various deposit products, including statement savings accounts, NOW accounts, money market deposits accounts, checking accounts, time deposits, and certificates of deposit. Its loan portfolio comprises commercial mortgage loans secured by office buildings, retail establishments, multi-family residential real estate, and other types of commercial property; commercial loans to businesses for inventory financing, working capital, machinery and equipment purchases, expansion, and other business purposes; and residential mortgage loans secured by first liens on one-to-four family owner-occupied or rental residential real estate, as well as residential single family construction, home equity, and short-t erm fixed-rate consumer loans. Berkshire Bancorp Inc. also offers title insurance agency services. The company operates seven deposit-taking offices in New York City; four deposit-taking offices in Orange and Sullivan Counties, New York; one deposit taking office in Ridgefield, New Jersey; and one deposit taking office in Teaneck, New Jersey. The company was founded in 1979 and is based in New York, New York.
Advisors' Opinion:- [By Tim Melvin]
One interesting bank that is seeing insider buying activity is Berkshire Bancorp (BERK). The company has recently switched from the Nasdaq to OTC markets, but that has not stopped director Moses Marx from consistently buying BERK stock. Berkshire does business in the already overbanked New York and New Jersey markets, and the stock is very cheap at just 82% of book value. Insiders won more than 60% of the bank, so investors are on the same side of the table as management.
Top 5 Defensive Companies To Watch In Right Now: Universal Electronics Inc.(UEIC)
Universal Electronics Inc. develops and manufactures pre-programmed wireless remote control products, audio-video accessories, and software products. The company offers infrared and radio frequency remote controls; audio-video accessories; integrated circuits; and software, firmware, and technology solutions, which enable devices, such as televisions, set-top boxes, stereos, automotive audio systems, cell phones, and other consumer electronic devices to wirelessly connect and interact with home networks and interactive services to deliver digital entertainment and information. It is also involved in intellectual property licensing activities. The company sells its products directly, as well as through distributors in Europe, Australia, New Zealand, South Africa, the Middle East, Mexico, Asia, and Latin America under the One For All and Nevo brands. It primarily serves cable and satellite television service providers, original equipment manufacturers, retailers, custom inst allers, software development companies, private label companies, and personal computing companies. Universal Electronics Inc. was founded in 1986 and is headquartered in Cypress, California.
Top 5 Defensive Companies To Watch In Right Now: Generex Biotechnology Corp (GNBT)
Generex Biotechnology Corporation, incorporate in September 1997, is a development stage-company. The Company is engaged in the research and development of drugs delivery systems and technologies. The Company focuses at the technology for the administration of formulations of large molecule drugs to the oral (buccal) cavity using a hand-held aerosol applicator. Through the Company's wholly-owned subsidiary, Antigen Express, Inc. (Antigen), the Company has expanded its focus to include immunomedicines incorporating vaccine formulations. During the fiscal year ended July 31, 2011, the Company has received regulatory approval in Ecuador, India, Lebanon and Algeria for the commercial marketing and sale of Generex Oral-lyn. Using the Company's buccal delivery technology, the Company has also launched an over-the-counter glucose spray called Glucose RapidSpra.
The Company's wholly-owned subsidiary, Antigen, concentrates on developing vaccine formulations that work by stimulating the immune system to either attack offending agents or to stop attacking benign elements. The Company's immunomedicine products are based on two platform technologies and are in the early-stages of development. The Company continues clinical development of Antigen's synthetic peptide vaccines designed to stimulate a potent and specific immune response against tumors expressing the HER-2/neu oncogene for patients with HER-2/neu positive breast cancer in a Phase II clinical trial and patients with prostate cancer and against avian influenza in two Phase I clinical trials. The Company initiated a Phase I clinical trial in patients with either breast or ovarian cancer.
The Company's buccal delivery technology involves the preparation of formulations in which an active pharmaceutical agent is placed in a solution with a combination of absorption enhancers and other excipients classified generally recognized as safe (GRAS) by the United States Food and Drug Administration (FDA) when used in accordance with speci! fied quantities and other limitations. The resulting formulations are aerosolized with a pharmaceutical grade chemical propellant and are administered to patients using the Company's RapidMist brand metered dose inhaler. The device is a small, lightweight, hand-held, easy-to-use aerosol applicator comprised of a container for the formulation, a metered dose valve, an actuator and dust cap. Using the device, patients self-administer the formulations by spraying them into the mouth. The device contains multiple applications, the number being dependent, among other things, on the concentration of the formulation. Absorption of the pharmaceutical agent occurs in the buccal cavity, principally through the inner cheek walls.
The Company competes with Pfizer, Eli Lilly, Novo Nordisk Merck & Co., Inc., GlaxoSmithKline PLC, Novartis, Inc., MedImmune Inc., MannKind Corporation, Alkermes, Inc. CPEX Pharmaceuticals, Inc., Nektar Therapeutics, Amylin Pharmaceuticals, Cephalon, Inc., Micromet, Inc., Novavax, Inc., Sanofi Pasteur Inc., Dendreon Corporation's, Rxi Pharmaceuticals Corporation's, Cell Genesys, Inc., Pharmexa-Epimmune, Inc. and CEL-SCI Corporation's.
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