Displaying items by tag: stocks

(Los Angeles)

Tesla investors got some grim news yesterday (unless you are the group hoping for Musk’s departure). That news is that the SEC is suing Elon Musk for fraud and is seeking to have him removed as the leader of Tesla. The suit seeks to have Musk banned from serving as an officer or director of a public company. The basis for the suit is the series of tweets Musk made regarding taking the company private, which the SEC says were “false and misleading statements”.

FINSUM: This is a pretty serious move from the SEC, made worse by news out today that Musk chose the price of $420 as a marijuana reference to impress his girlfriend.

(New York)

Retail has been doing great lately and may be poised to continue its gains. However, the best way to play the sector might not be to buy retail stocks. Instead, consider buying real estate stocks that would gain from retail’s success. With that in mind, Barron’s has run a piece choosing seven real estate stocks that will benefit from retail’s growth: Simon Property Group, Link REIT, Brixmor Property Group, Public Storage, and Mid-America Apartment Communities.

FINSUM: Make no mistake, these are deeply contrarian bets given the challenges mall and other retail REITs are facing. That said, if the strategy works, it may do so in a big way.

(New York)

One of the important elements of last year’s tax changes that has not been covered much by the mainstream financial press is the way in which the new tax code proves a big boon for REITs. That big gain is that the effective tax rate on REITs has been slashed from 37% to just 29.6%, a big move downward. One REIT industry expert summed up the changes this way, saying “Now, REITs have even more of an advantage over fixed-income products … Seventy percent of REIT returns have historically come from income, so any relative pickup in income is a big benefit for investors”.

FINSUM: This seems like a big help to REIT investors, and it couldn’t have arrived at a better time given that rate rises will inevitable hurt REITs a bit.

(New York)

US dividend stocks are in a curious, if tenuous, positon at the moment. They have done well recently, but rate rises seem poised to bring prices down. Overseas dividend stocks, however, are not in the same predicament, as the rate environment in many other parts of the world is more benign. Accordingly, here are six overseas dividend stocks to consider: Allianz (4.1%), Hang Lung Properties (5%), Heidelberg Cement (2.8%), Nestle (2.9%), Royal Dutch Shell (5.3%), and Sanofi (4.1%).

FINSUM: Not only are these stocks attractive because of the good yields and mild rate environment, but they mostly have very attractive P/E ratios as well.

(New York)

Morgan Stanley has just put out a warning, or perhaps better stated, a notice to investors. The bank is reminding the market that this year will likely have the lowest returns in a decade. The bank’s strategists say that “2018 is on track to have the lowest share of positive returns adjusted for inflation across 17 major asset classes since 2008”. The poor returns have been particularly true for those holding globally diversified portfolios. What’s worse, Morgan Stanley thinks returns are going to get worse because of rising rates. According to the bank “We’re big believers that real rates matter most for risk markets, as it’s the rate over and above inflation that matters most for discounting future cash flows … As ‘invincible’ as the U.S. equity market has been, it hasn’t had to confront a different rate regime”.

FINSUM: If you look internationally, this has been a terrible year for markets, and it does seem true that rising rates won’t help anything in the coming year.