Ctrip (ticker CTRP)

Ctrip (ticker CTRP)

[private]

 

Company: Ctrip.com
Ticker Symbol: CTRP
Action: Buy up to $58

10/27/13 Analysis…

 

I am adding a 10% position to Ctrip.com International, Ltd. (CTRP) with a buy up to $58.  This reports earnings on Nov 5th. My price target is a 20-25% gain.  Ctrip provides travel service for hotel accommodations, airline tickets, packaged tours, and corporate travel management in the People’s Republic of China.  This will also have a 20% stop loss.

[/private]

Shutterfly (ticker SFLY)

Shutterfly (ticker SFLY)

[private]


z (22)

Company: Shutterfly
Ticker Symbol: SFLY
Action: Buy up to $60

10/27/13 Analysis…

I am adding 10% to Shutterfly, Inc. (SFLY) with a buy up to $60. Its next earnings date is October 29th.  My target is $70-$75. It is an Internet-based social expression and personal publishing service. Shutterfly provides a range of products and services that make it easy, convenient and fun for consumers to upload, edit, enhance, organize, find, share, create, print and preserve their digital photos in a creative and thoughtful manner. Shutterfly, Shutterfly.com and Collections are trademarks of Shutterfly, Inc. Its primary focus is on helping consumers manage their memories through the powerful medium of photos. We provide a full range of products and services that make it easy, convenient and fun for consumers to upload, edit, enhance, organize, find, share, create, print and preserve their digital photos in a creative and thoughtful manner. Consumers use its products and services to stay connected to their friends and family, to organize their memories in a single location, to tell stories and to preserve their memories for themselves and their children. I am putting a 15% stop loss on this.

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This Pro-Big Government Stock Should Continue to Soar Under Obama’s Watch

This Pro-Big Government Stock Should Continue to Soar Under Obama’s Watch

This Big-Government Friendly Stock Could be a Big Winner!

big government

With government spending still on everyone’s mind, this red hot government services stock should continue to outperform the market!

By Jay Peroni, CFP®

When you hear the words “government” and “efficiency” they are hardly used in the same sentence.  With government shutdowns, debt ceiling showdowns, and another heated battle brewing for the next round of debt ceiling debates just months away, now is a great time to look at a company that specializes in operations program management and consulting services to government and government agencies.

Now the biggest challenge in government is not fixing the mess but rather just trying to get accurate, timely information on where federal funds dollars are actually going. No one within government or outside truly has a full and complete understanding of how the federal government truly spends its money. As government gets larger, it becomes more inefficient.

David Mastran saw this first hand.  After years of schooling at West Point, Stanford University, and George Washington University and a seven-year tour as an Air Force veteran who served in Vietnam, David got a glimpse at how inefficient government could be. As an employee at the U.S. Department of Health, Education, and Welfare, David managed contracts and grants for social welfare programs.

David became frustrated when he was unable to find a private company that understood welfare programs well enough to help the government instill efficiency, and so he quit his job and sought out to fill a void.

In 1975, following a short stint working for the consulting firm of Arthur Young, David founded a company with $12,000 of capital as he began working out of his home before this was en vogue.  His mission: make government more efficient.

In 1997, his company went public and had a rough go for many years.  When Obama took office in 2009, shares adjusted for splits stood at just $8.64.  Since that time, shares have skyrocketed and today it trades around $50 a share, an amazing gain of 475% in under 5 years.  With three years still left in Obama’s second term, the real party is just beginning for this stock.

maximus-logoThe company I am referring to is Maximus Inc. (NYSE: MMS). Maximus basically is in the business of providing outsourcing services to government health and human services agencies. It does the administrative work for Medicaid, the Children’s Health Insurance Program (CHIP), health care reform, welfare-to-work, Medicare, child support enforcement, and a host of other government programs.

It has two divisions: 

1. The Health Services segment. This offers business process outsourcing and administrative support services, as well as consulting services for state, provincial, and federal programs, such as Medicaid, CHIP, Medicare, and the British Columbia Health Insurance program. This segment’s services include government health insurance program administration, health insurance program eligibility and enrollment, eligibility and enrollment modernization for government health benefit programs, premium payment processing and administration, multilingual customer contact centers, objective and evidence-based health appeals, eHealth solutions with the Medigent product suite, independent medical reviews, health plan oversight, Medicaid Management Information System planning and oversight, and specialized program consulting, as well as consumer outreach and education, and application assistance and enrollment counseling.

2. The Human Services segment. This segment provides various business process outsourcing, case management, job training, and support services. This segment’s services comprise job training and support services; child support case management services, customer contact center operations, and program and systems consulting services; management tools and professional consulting services for higher education institutions; K-12 special education case management solutions; program consulting services; and business and tax credit services for employers.

By providing these services they have done quite well under a BIG government administration (Obama) and should continue to thrive during the rest of his second term.  President Obama is in favor of BIG government and as government gets bigger, the demand for MAXIMUS’ services will increase as well.

Think about the economic and demographic factors driving social reform around the world.  Maximus has superior positioning for health care & welfare reform. It is the largest Medicaid & CHIP administrator in United States. It is the largest provider for health insurance appeals for Medicare.  It established welfare-to-work provider in US, UK, Australia.  Maximus was also selected to develop Minnesota’s Health Insurance Exchange.

Look at Maximus under Obama’s Watch:

mms chart

It has soared since 2009 and we have at least 3 more years of BIG Government!

 

MAXIMUS has seen a steady increase of revenue over the past 5 years:

Fiscal Year

Total Revenue (Millions)

2012 $1,050.1
2011 $929.6
2010 $831.7
2009 $720.1
2008 $699.5
2007 $584.5

It is very solid from a financial perspective.  In my financial analysis of a stock, I utilize a five-point inspection:

  1. Analyze earnings trends: Is it positive, neutral, or negative?   Maximus has a positive earnings trend and is in the top 10% of all stocks according to our scoring system.
  2. Examine financial strength: Is it in good, fair, or poor financial shape?  We rate Maximus as very good as it has strong free cash flow and little to no debt.
  3. Evaluate pricing: Is the asset undervalued, fairly priced, or overvalued? The valuation of Maximus is that it is fairly priced.  At the moment it is not over or undervalued.
  4. Assess momentum.  Is it moving in an upward, sideways, or downward trend?  Maximus is in a strong upward trend, which is favorable for the stock.
  5. Gauge risk: Is it high, medium, or low risk? Because of Maximus’ strong financial position, reasonable price, strong upward price trend, and strong industry demand, I would rate Maximus’ risk level at low.

 

Bottom Line:  MAXIMUS, Inc. (MMS) is a good buy up to $60 a share.  This one should hit $80-100 (a potential gain of 60-100%) over the next 12-18 months as we see increased demand for business process outsourcing services. MAXIMUS provides services to the United States, Australia, Canada, and the United Kingdom.  It is well diversified and in a high demand industry during this time of fiscal crisis.

The Next Debt Ceiling Debate Just Months Away

What’s Next in the Debt Ceiling Debate?

Implications for the short term & the long term.

debt ceiling debateIn January, will the federal government be shuttered again? At first thought, it seems inconceivable that Congress would want to go through another protracted fight like the one that shut things down for 16 days in October. That could occur, however, if a new budget panel doesn’t meet its deadline.

Once more, the clock is ticking. By December 13, a group of 30 senators and representatives have to hammer out a bipartisan budget agreement. It must a) reconcile the markedly different House and Senate FY 2014 budget plans passed earlier in 2013, and b) map out a longer-term plan to shrink the federal deficit. If a) doesn’t happen, then the country will be threatened with another federal shutdown on January 15. If b) doesn’t happen, then another round of sequester cuts from the 2011 Budget Control Act will be initiated as of that same date.

Does this seem like déjà vu? It does among many political and economic analysts, who fear a repeat of the supercommittee debacle of 2011, when a bicameral, bipartisan group of 12 Capitol Hill legislators just gave up trying to find a way to shave $2 trillion from the deficits projected for the next decade.

This new committee is bigger, and like the supercommittee, its leaders are far apart politically. Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) are the budget chairs of their respective chambers of Congress. The key difference lies in the modesty of its ambition. On October 18, Murray told Bloomberg that the committee would aim for “a budget path for this Congress in the next year or two, or further if we can” rather than a “grand bargain” across the next 10 years.

Will they manage that? Some observers aren’t sure. Murray co-chaired the failed supercommittee of 2011, and while Ryan was quiet during the fall budget fight, he recently authored an op-ed piece for the Wall Street Journal reiterating his controversial ideas to slash the deficit by reforming entitlement programs. Still, Sen. Lindsey Graham (R-SC) told Bloomberg that “there’s a real desire to take another effort, not at a grand bargain, but at a sequestration replacement,” and Sen. Jeff Sessions (R-AL) commented that “we don’t want to raise expectations above reality, but I think there’s some things we could do.”

Leaders from of both parties maintain there will be no shutdown in January. Senate Minority Leader Mitch McConnell (R-KY) stated that a shutdown is “off the table” this winter. On CNN’s State of the Union, Sen. John McCain (R-AZ) warned that the public would not tolerate “another repetition of this disaster”; on ABC’s This Week, House Minority Leader Nancy Pelosi (D-CA) said she sympathized with the public’s “disgust at what happened.” These comments do not necessarily imply expedient negotiations ahead.

The short-term fix didn’t fix everything. As a FY 2014 budget hasn’t yet been agreed upon, the Treasury is still relying on stopgap funding to keep the federal government running through January 15 and “extraordinary measures” to raise the federal debt limit through February 7.

The long-term outlook for America’s credit rating didn’t really change. Fitch put its outlook for the U.S. on “negative” and warned of a potential downgrade; Dagong, the major Chinese credit ratings agency, actually downgraded the U.S. from A to A-. Even so, S&P and Moody’s didn’t take action as a result of October’s shutdown; while S&P thinks the shutdown will cut 0.6% off of Q4 GDP, it still gives the U.S. an AA+ rating (downgraded from AAA in 2011).

America lacks top-notch credit ratings, but few nations have them. In fact, only 11 countries possess the coveted AAA rating from S&P and Fitch plus the leading Aaa rating from Moody’s. If you look at S&P’s ratings for the globe’s ten largest economies, Germany is the only one with an AAA. China gets an AA- with a “stable” outlook and Japan has an AA- with a “negative” outlook. While Russia has the world’s eighth biggest economy, Moody’s, Fitch and S&P all rate it one grade above junk bond status.

Is Wall Street all that worried about another shutdown? At the moment, no – because there are several reasons why the next debt debate could be less painful. As the goal appears to be a near-term bargain instead of a grand one, it may be more easily realized. If the newly appointed budget panel fails, the economy can probably weather $20 billion of 2014 sequester cuts. Also, many mid-term elections are scheduled for 2014; do congressional incumbents really want to damage their reputations further with another shameful stalemate?

While confidence on Wall Street and Main Street would erode with a repeat shutdown, the Treasury might face a slightly easier challenge in January than it did in October. Sequester cuts would trim the already-shrinking federal deficit further in early 2014, conserving some federal money. As a Goldman Sachs research note just cited, Fannie Mae and Freddie Mac could also make their dividend payments to the Treasury early in Q1, which would also help.

Global investors can’t really back away from America. The dollar is still the world’s reserve currency, and China owns about $1.3 trillion of our Treasuries. Those two facts alone should compel our legislators to work things out this winter, hopefully before the last minute.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Congress Passes a Debt Deal!

Congress Passes a Debt Deal!

A Debt Deal Emerges

The fix is merely short-term, but it is certainly welcome.

deal done

A bipartisan deal emerges from the Senate. After weeks of contention, a bill to reopen the bulk of the federal government and avert an unprecedented U.S. default appears headed toward President Obama’s desk. Senate Democrats and Republicans reached an accord on October 16, and as House Speaker John Boehner has promised an expedient vote on any bill crafted in the Senate, the measure seems poised for quick passage. “From our side [in the Senate], I don’t see any evidence of delay,” Sen. Rand Paul (R-KY) told the New York Times Wednesday morning.

In a sense, Congress merely kicked the can down the road. The measure would fund the federal government through January 15 and extend America’s borrowing authority through February 7. A bipartisan negotiating committee would face a December 13 deadline to create a federal spending and tax blueprint for the next ten years.

The Senate bill includes only one alteration to health care reforms. The Affordable Care Act will emerge from this battle relatively unscathed. People who receive federal subsidies for their health insurance under the ACA will face a stricter income verification procedure, but the subsidies will remain in place. House Republicans had demanded a 2-year delay for the 2.3% tax on medical devices stemming from the ACA, but that effort was set aside Tuesday. Congressional Democrats had argued for a 1-year delay in the $63 per-person “reinsurance” fee slated to hit group health plans in 2014; they didn’t get it.

The bill also arranges retroactive pay for furloughed federal workers. All federal employees sent home as a result of the shutdown are slated to receive delayed salary payments.

The budget cuts passed into law in 2011 will remain in place. The $1.2 trillion in automatic federal spending cuts scheduled through 2021 will still be carried out, as mandated by the Budget Control Act of 2011 that brought an end to that summer’s debt ceiling fight. The 2013 sequester cuts represented the first step in this reduction of federal spending.

Wall Street felt relief. By the middle of the trading day Wednesday, the S&P 500 was approaching its all-time peak. The DJIA, NASDAQ and S&P were all up more than 1% and three stocks were gaining on the NYSE for every one falling. Fitch Ratings had threatened to downgrade America’s credit rating late Tuesday; presumably, it will now refrain from doing so due to the deal reached on Capitol Hill.

A short-term fix is better than none at all. You could argue that this deal simply postpones a solution in favor of a short-term truce on Capitol Hill. Even so, it beats the potentially catastrophic alternative of a U.S. default. Wall Street will now wait to see if Congress can provide a gift for the holidays – a larger-scale solution to trim future deficits.

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  • Large cap, mid cap, small cap, and global companies.
  • All for less than $20/month

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.