As it turns out, the most recent Great (Sector) Rotation was short-lived and perhaps not so great after all. Although defensive sectors are back to outperforming cyclical sectors amid June market volatility, I still believe there's a strong case for preferring cyclicals over defensives, or at least select cyclicals.
There are three reasons to consider investing in cyclical sectors now:
1. Attractive Valuations. Defensive sectors continue to look overpriced. Investors searching for safety and yield have driven up the valuations of defensive companies. The three classic defensive sectors -- healthcare, staples, and utilities -- are now trading at an average premium of around 20% to the broader market. By way of comparison, back in the fall of 2009 these three sectors were trading at an average discount of around 40% to the broader market. Current premiums seem unjustified considering that profitability is somewhat lower for companies in the defensive space.
Top Restaurant Companies To Buy Right Now: Cliffs Natural Resources Inc.(CLF)
Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore pellets, lump and fines iron ore, and metallurgical coal products. The company operates six iron ore mines in Michigan, Minnesota, and eastern Canada; two iron ore mining complexes in Western Australia; five metallurgical coal mines located in West Virginia and Alabama; and one thermal coal mine located in West Virginia. It also owns a 45% economic interest in a coking and thermal coal mine located in Queensland, Australia; and a 30% interest in Amapa, a Brazilian iron ore project in Latin America, as well as chromite properties in Ontario, Canada. The company, formerly known as Cleveland-Cliffs Inc, was founded in 1847 and is headquartered in Cleveland, Ohio.
Advisors' Opinion:- [By Nicole Seghetti]
Fisher completely sold his position in mining company Cliffs Natural Resources (NYSE: CLF ) . The stock has a high short ratio of nearly 25%, signaling that the market is betting Cliffs will post lackluster results. Given its subpar financial performance in recent quarters, this isn't startling. And since the company cut its dividend, the stock has become much less desirable for income investors.
- [By Ben Levisohn]
The Dow Jones Industrials were held back by Exxon Mobil (XOM), which fell 2% this week to $99.51 as oil dropped the most in 19 months this week, and Procter & Gamble (PG), which finished off 1.9% at $80.45 as investors fled consumer staples. Those losses also overwhelmed the week’s big winner: Disney (DIS), which gained 2.4% to $76.11 after being upgraded at Guggengheim because of the strong performance of Frozen. The S&P 500 got hit by big drops in oil-exploration company Pioneer Natural Resources (PXD), which fell 6.2% to $176.05 as investors wait for it to provide an update on the impact of cold weather on production (thanks to a reader of this post for supplying that bit of information), and Cliffs Natural Resources (CLF), which finished the week off 5.6% at $25.05.
- [By Eddie Staley]
Basic materials sector was the top gainer in Wednesday’s trading. Top gainers in the sector included A. Schulman (NASDAQ: SHLM), up 4.63 percent, and Cliffs Natural Resources (NYSE: CLF), up 4.87 percent.
5 Best Performing Stocks To Watch Right Now: Markwest Energy Partners LP (MWE)
MarkWest Energy Partners, L.P. (MarkWest Energy) is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering and transportation of crude oil. It provides services in the midstream sector of the natural gas industry. The Company also provides processing and fractionation services to crude oil refineries in the Corpus Christi, Texas area through its Javelina gas processing and fractionation facility. As of December 31, 2011, the Company operated in four segments: Southwest, Northeast, Liberty and Gulf Coast. Effective December 31, 2011, the Company acquired the remaining 49% interest in MarkWest Liberty Midstream. On February 1, 2011, the Company acquired Langley processing plant.
Southwest Segment
The Company owns a system in East Texas that consists of natural gas gathering pipelines, centralized compressor stations, a natural gas processing facility and an NGL pipeline. The East Texas system is located in Panola, Harrison and Rusk Counties and services the Carthage Field. Producing formations in Panola County consist of the Cotton Valley, Pettit, Travis Peak and Haynesville formations. During the year ended December 31, 2011, approximately 77% of its natural gas volumes in the East Texas System result from contracts with six producers. The Company sells substantially all of the purchased and retained NGLs produced at its East Texas processing facility to Targa Resources Partners, L.P. (Targa) under a long-term contract. Such sales represent approximately 19.4% of its consolidated revenue in 2011.
The Company owns a natural gas gathering system in the Woodford Shale play in the Arkoma Basin of southeast Oklahoma. The liquids-rich natural gas gathered in the Woodford system is processed through Centrahoma Processing LLC (Centrahoma), its equity investment, or other third-party processors. In addition, it owns the Foss Lake! natural gas gathering system and the Western Oklahoma natural gas processing complex, all located in Roger Mills, Beckham, Custer and Ellis Counties of western Oklahoma. The gathering portion consists of a pipeline system that is connected to natural gas wells and associated compression facilities. The Company also owns a gathering system in the Granite Wash formation in Wheeler County in the Texas panhandle that is connected to its Western Oklahoma processing complex. The Company completed the expansion of the Western Oklahoma natural gas processing plant in October 2011.
Approximately 70% of its Oklahoma volumes result from contracts with three producers in 2011. The Company sells substantially all of the NGLs produced in the Western Oklahoma processing complex to ONEOK Hydrocarbon L.P. (ONEOK) under a long-term contract. Such sales represent approximately 13.2% of its consolidated revenue in 2011. The Company owns a number of natural gas gathering systems located in Texas, Louisiana, Mississippi and New Mexico, including the Appleby gathering system in Nacogdoches County, Texas. It gathers a portion of the gas produced from fields adjacent to its gathering systems, including from wells targeting the Haynesville Shale. In addition, it owns four lateral pipelines in Texas and New Mexico.
Northeast Segment
The Company�� Northeast segment assets include the Kenova, Boldman, Cobb, Kermit and Langley natural gas processing plants, an NGL pipeline and the Siloam NGL fractionation plant. In addition, it has two caverns for storing propane at its Siloam facility and additional propane storage capacity under a long-term firm-capacity agreement with a third party. The Northeast segment operations include fractionation and marketing services on behalf of the Liberty segment. The Company owns and operates a crude oil pipeline in Michigan (Michigan Crude Pipeline) providing transportation service for three shippers.
Liberty Segment
The Company pr! ovides na! tural gas midstream services in southwestern Pennsylvania and northern West Virginia through MarkWest Liberty Midstream. It is a processor of natural gas in the Marcellus Shale, with gathering, processing, fractionation, storage and marketing operations.
Utica Segment
Effective January 1, 2012, the Company and The Energy and Minerals Group (EMG) formed MarkWest Utica EMG, a joint venture focused on the development of natural gas processing and NGL fractionation, transportation and marketing infrastructure to serve producers' drilling programs in the Utica shale in eastern Ohio. During 2011, the Utica Segment did not have any operations.
Gulf Coast Segment
The Company owns and operates the Javelina processing facility, a natural gas processing facility in Corpus Christi, Texas that treats and processes off-gas from six local refineries operated by three different refinery customers. As of December 31, 2011, the Company owned a 40% interest in Centrahoma Processing LLC (Centrahoma), a joint venture with Cardinal Midstream, LLC (Cardinal). Centrahoma owns certain processing plants in the Arkoma Basin and Cardinal operates an additional processing plant that is not owned by Centrahoma but is located adjacent to and operates in conjunction with the Centrahoma plants.
Advisors' Opinion:- [By Arjun Sreekumar]
1 midstream company to watch
But the company that has perhaps invested most aggressively in Utica infrastructure is MarkWest Energy Partners (NYSE: MWE ) . In just the past year alone, it has completed 60 miles of gathering pipelines, commenced operations at two major gas plants in the region, and hammered out agreements with a handful of major operators, including Gulfport Energy (NASDAQ: GPOR ) , Antero Resources, PDC Energy, Rex Energy, and ��most recently ��CNX. - [By Matt DiLallo]
MarkWest Energy� (NYSE: MWE ) �has taken this as a challenge and will soon be the top infrastructure provider in the region. During the year it plans on bringing a 100,000 barrel per day fractionation facility on line with truck, rail, and pipeline access. This facility will also have access to fractionation facilities in the Marcellus Shale. This addition broadens a portfolio that already houses multiple facilities capable of refrigeration, cryogenic processing, and fractionation. As you can see from the following slide, the company has a number of projects under construction to meet the growing needs of producers in the region. �
- [By Ben Levisohn]
Abbvie (ABBV)
Ameren Corp. (AEE)
Arthur J. Gallagher (AJG)
E.I. DuPont de Nemours & Co. (DD)
ENSCO (ESV)
Enterprise Products Partners LP (EPD)
General Mills (GIS)
H&R Block (HRB)
Hancock Holding (HBHC)
Kraft Foods Group (KRFT)
Lorillard (LO)
Magellan Midstream Partners LP (MMP)
MarkWest Energy Partners L P (MWE)
McDonald’s (MCD)
Microchip Technology (MCHP)
NextEra Energy (NEE)
Regency Centers (REG)
TELUS Corp. (TU)
West Corp. (WSTC)
Williams Companies (WMB)
5 Best Performing Stocks To Watch Right Now: bluebird bio Inc (BLUE)
bluebird bio, Inc., incorporated on April 16, 1992, is a clinical-stage biotechnology company, the Company is focused on transforming the lives of patients with severe genetic and orphan diseases using gene therapy. Gene therapy seeks to introduce a functional copy of the defective gene into a patient�� own cells, a process called gene transfer. Through gene transfer, a functional copy of the mutated gene is delivered to the patient�� cells, thereby correcting the underlying genetic defect that causes aberrant gene expression. As of December 31, 2012, the Company is conducting a Phase I/II clinical study in France evaluating an earlier generation of its LentiGlobin vector for the treatment of �-thalassemia major and SCD. Initial proof-of-concept data from this study were published in Nature. During the year ended December 31, 2013, the Company plans to initiate an extension of this study under a revised protocol for LentiGlobin, which the Company refers to as the HGB-205 Study. The Company also plans o initiate a second Phase I/II clinical program in the United States for LentiGlobin, which the Company refers to as the HGB-204 Study, for �-thalassemia major. In March 2013, the Company entered into a strategic collaboration with Celgene Corporation, or Celgene, to discover, develop and commercialize, disease-altering gene therapies in oncology.
Its gene therapy platform is based on viral vectors that utilize a modified, non-replicating version of the Human Immunodeficiency Virus Type 1 (HIV-1) virus, that has been stripped of all of the components required for it to self-replicate and infect additional cells. The HIV-1 virus is part of the lentivirus family of viruses, as a result of which the Company refer to its vectors as lentiviral vectors. Its lentiviral vectors are used to introduce a functional copy of a gene to the patient�� own isolated blood stem cells, called hematopoietic stem cells (HSCs), which reside in a patient�� bone marrow and are capable of differentiating int! o a wide range of cell types. HSCs are dividing cells, thus its approach allows for sustained expression of the modified gene as the Company is able to take advantage of a lifetime of replication of the gene-modified HSCs. Additionally, the Company has developed a cell-based vector manufacturing process that is both reproducible and scalable.
Adrenoleukodystrophy
Adrenoleukodystrophy is a rare X-linked, inherited, neurological disorder that is often fatal. ALD is caused by mutations in the ABCD1 gene which encodes for a protein called the ALD protein (ALDP), which plays a critical role in the breakdown and metabolism of long-chain fatty acids (VLCFA). Without functional ALDP, VLCFA accumulate in cells including neural cells in which they cause damage to the myelin sheath, a protective and insulating membrane that surrounds nerve cells in the brain. This damage can result in decreased motor coordination and function, visual and hearing disturbances, the loss of cognitive function, dementia, seizures, adrenal dysfunction and other complications, including death. ALD is divided into various sub-segments with three main phenotypes that impact brain function: CCALD (Childhood cerebral adrenoleukodystrophy, AMN (Adrenomyeloneuropathy) and ACALD (Adult Cerebral ALD).
�-thalassemia
�-thalassemia is a rare hereditary blood disorder caused by a genetic abnormality of the �-globin gene resulting in defective red blood cells (RBCs). Genetic mutations cause the absence or reduced production of the beta chains of hemoglobin, or �-globin, thereby preventing the proper formation of hemoglobin A, which normally accounts for greater than 95% of the hemoglobin in the blood of adults. Hemoglobin is an iron-containing protein in the blood that carries oxygen from the respiratory organs to the rest of the body. Hemoglobin A consists of four chains-two chains each of a-globin and �-globin. Normally existing at an approximate 1:1 ratio, genetic mutations that impair t! he produc! tion of �-globin can lead to a relative excess of a-globin, premature death of red blood cells. The clinical implications of the a-globin/�-globin imbalance are two-fold: first, patients lack sufficient RBCs and hemoglobin to effectively transport oxygen throughout the body and can become severely anemic; and second, the shortened life span and ineffective production of RBCs can lead to other complications such as splenomegaly, marrow expansion, bone deformities, and iron overload in organs.
Sickle cell disease
Sickle cell disease (SCD) is a hereditary blood disorder resulting from a mutation in the �-globin gene that causes polymerization of hemoglobin proteins and abnormal red blood cell function. The disease is characterized by anemia, vaso-occlusive pain crisis (a common complication of SCD in which there is severe pain due to obstructed blood flow in the bones, joints, lungs, liver, spleen, kidney, eye, or central nervous system), infections, stroke, overall poor life and early death in a subset of patients. Under low-oxygen conditions, which are exacerbated by the red blood cell abnormalities, the mutant hemoglobin aggregates causing the RBCs to take on a sickle shape (sickle cells), which causes them to aggregate and obstruct small blood vessels, thereby restricting blood flow to organs resulting in pain, cell death and organ damage. If oxygen levels are restored, the hemoglobin can disaggregate and the RBCs return to their normal shape, but over time, the sickling damages the cell membrane and the cells fail to return to the normal shape even in high-oxygen conditions.
Advisors' Opinion:- [By Garrett Cook]
Bluebird Bio (NASDAQ: BLUE) shares shot up 34.74 percent to $35.15 following the presentation of positive data on LentiGlobin BB305 at the European Hematology Association (EHA).
- [By David Williamson]
In this video, health-care analyst David Williamson takes a look at the tremendous success of the�Bluebird Bio (NASDAQ: BLUE ) �IPO. The company increased the size of its initial public offering, and priced shares at $17 -- above the top end of its range -- but that still couldn't contain investor appetite for this stock. Shares shot up 50% on the opening day of trading, and have remained there.
- [By Jay Silverman]
Some of the biggest leaders in that field, and there have been dozens in fields, if not more this year, such as Bluebird (BLUE) and Stemline Therapeutics (STML) and have all pulled back to significantly lower levels; even below, in Bluebird's case, the price that had actually opened up as an IPO, even though it's above its IPO price.
5 Best Performing Stocks To Watch Right Now: Accuride Corporation New (ACW)
Accuride Corporation, together with its subsidiaries, engages in designing, manufacturing, marketing, and supplying commercial vehicle components in North America. The company offers heavy- and medium-duty steel and aluminum wheels, light truck steel wheels, and military wheels; and wheel-end components and assemblies, such as brake drums, disc wheel hubs, spoke wheels, disc brake rotors, and automatic slack adjusters. It also provides truck body and chassis parts comprising bumpers, fuel tanks, battery boxes and toolboxes, front-end cross members, muffler assemblies, and crown assemblies and components, as well as fenders, exhaust components, sun visors, windshield masks, step assemblies, brackets, fuel tank supports, inner-hood panels, door assemblies, dash panel assemblies, and various other components. In addition, the company offers ductile and gray iron casting of transmission and engine-related components, which comprise flywheels, and transmission and engine-relate d housings and brackets; and ductile and gray iron casting of industrial components, such as flywheels, pump housings, small engine components, and other industrial components. Accuride Corporation markets its products under Accuride, Gunite, Imperial, and Brillion brand names. It serves heavy- and medium-duty truck, and commercial trailer original equipment manufacturers (OEM); and aftermarket suppliers, including OEM dealer networks, wholesale distributors, and aftermarket buying groups. The company was founded in 1986 and is headquartered in Evansville, Indiana.
Advisors' Opinion:- [By Seth Jayson]
Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Accuride (NYSE: ACW ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Accuride doing by this quick checkup? At first glance, pretty well. Trailing-12-month revenue decreased 14.3%, and inventory decreased 30.5%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue dropped 28.6%, and inventory dropped 30.5%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 9.2%, and inventory dropped 6.1%. - [By George Putnam]
Because of a very leveraged balance sheet, the company—Accuride Corp. (ACW)—could not survive the 2008-09 recession, and it filed for bankruptcy in October 2009.
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