Author Archives: Scalper1

3 Strong Buy TIAA Mutual Funds

Teachers Insurance and Annuity Association of America (TIAA), formerly known as TIAA-CREF, was founded by Andrew Carnegie in 1918. As of Dec 31, 2015, TIAA Global Asset Management had $854 billion assets under management invested in a wide range of securities. The major portion of its assets are allocated to stocks and fixed income securities. The company seeks to offer financial services pertaining to investment advice and portfolio management to a wide range of investors including individual investors, intermediaries and institutional clients. TIAA invests in an array of mutual funds including both equity and fixed-income funds, and U.S. and non-U.S. funds. Below we share with you three top-rated TIAA Mutual Funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. TIAA-CREF Large-Cap Growth Fund (MUTF: TILPX ) seeks to return over the long run primarily through growth of capital. TILPX invests the lion’s share of its assets in equity securities of large-cap, growth-oriented companies. The fund invests in companies that benefit from steps including prospective acquisitions and corporate restructurings. TILPX may invest not more than 20% of its assets in securities of foreign companies. The TIAA-CREF Large-Cap Growth Premier fund has a five-year annualized return of 10.5%. Terrence Kontos is one of the fund managers of TILPX since 2014. TIAA-CREF Short-Term Bond Fund (MUTF: TCTRX ) invests a large chunk of its assets in securities of U.S. Treasury and agency. TCTRX invests in fixed income securities that are rated investment grade. The fund may also invest in corporate bonds, and mortgage-backed and other asset-backed securities. Its investments in securities can have average maturity of not more than 5 years. The TIAA-CREF Short-Term Bond Retail fund has a five-year annualized return of 1.5%. As of December 2015, TCTRX held 442 issues with 2.09% of its assets invested in U.S. Treasury Note 0.625%. TIAA-CREF Managed Allocation Fund (MUTF: TIMRX ) seeks favorable return. TIMRX is a “fund of funds” primarily focusing on Institutional Class shares. Notably, TIMRX invests around 60% of its assets in underlying funds that emphasize acquiring equity securities with not more than 5% of its assets invested in real estate funds. The rest of the assets are invested in underlying funds, which in turn invest in fixed-income securities. The TIAA-CREF Managed Allocation Retail fund has a five-year annualized return of 5.6%. TIMRX has an expense ratio of 0.25% compared with the category average of 0.89%. Original Post

Verizon: Congress Needs To Act In Apple Privacy, Security Battle

Congress may need to pass legislation  resolving the government’s dispute with Apple ( AAPL ) and other high-tech companies over smartphone encryption, national security and privacy, a Verizon Communications ( VZ ) executive VP said at a Jefferies financial conference on Wednesday. Apple has been battling the FBI over unlocking an encrypted iPhone used by by one of the shooters in a Dec. 2 attack in San Bernardino, Calif., that left 14 people dead. Apple has been fighting a federal court order to create software to hack into the iPhone. Facebook ( FB ) and other high-tech companies have sided with Apple. Asked about the controversy at a Jefferies media and communications conference, Verizon Wireless executive VP of wireless operations David Small said: “It’s a tough issue. Verizon has equal opinions and strength around customer privacy as well as safeguarding public safety.” “The Apple case is a little unique. This is an issue where you see a lot of friction at a very high level and in that regard generally you need some sort of Congressional action to resolve some of those frictions.” AT&T ( T ) chief executive Randall Stephenson in a recent interview also said Congress should determine U.S. policies regarding encryption rather than tech companies. Stephenson commented before the court ruling vs. Apple. Apple will reportedly argue in a court appeal that its software should be protected under the First Amendment as free speech. Small, meanwhile, said it’s unclear whether there will be a stronger upgrade cycle among Verizon wireless subscribers to new iPhones in late 2016. Upgrades to the iPhone 6S series last year disappointed Apple investors. Apple is expected to release the iPhone 7 in September. “I can’t comment on exactly what Apple is planning to launch,” Small said. “This is an even year (2016) so I would expect a more significant form factor.”

Best And Worst Q1’16: All Cap Blend ETFs, Mutual Funds And Key Holdings

The All Cap Blend style ranks third out of the twelve fund styles as detailed in our Q1’16 Style Ratings for ETFs and Mutual Funds report. Last quarter , the All Cap Blend style ranked third as well. It gets our Neutral rating, which is based on aggregation of ratings of 708 ETFs and 706 mutual funds in the All Cap Blend style. See a recap of our Q4’15 Style Ratings here. Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all All Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 4 to 3774). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the All Cap Blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Six ETFs are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Jensen Quality Value Fund (MUTF: JNVIX ) (MUTF: JNVSX ) is excluded from Figure 2 because its total net assets are below $100 million and do not meet our liquidity minimums. The Market Vectors Morningstar Wide Moat ETF (NYSEARCA: MOAT ) is the top-rated All Cap Blend ETF and the Smead Value Fund (MUTF: SVFYX ) is the top-rated All Cap Blend mutual fund. Both earn a Very Attractive rating. The ProShares Ultra Telecommunications (NYSEARCA: LTL ) is the worst-rated All Cap Blend ETF and the Rydex Russell 2000 2x Strategy A (MUTF: RYRUX ) is the worst-rated All Cap Blend mutual fund. Both earn a Very Dangerous rating. Aflac Inc. (NYSE: AFL ) is one of our favorite stocks held by SVFYX and earns a Very Attractive rating. Over the past decade, Aflac has grown its after-tax profit ( NOPAT ) by 9% compounded annually while improving its NOPAT margin from 9% in 2004 to 12% in the last twelve months. Aflac currently earns a top-quintile return on invested capital ( ROIC ) of 15%. Despite the consistent profit growth, AFL remains flat over the past year, which has made shares undervalued. At its current price of $59/share, Aflac has a price to economic book value ( PEBV ) ratio of 0.8. This ratio means that the market expects Aflac’s NOPAT to permanently decline by 20%. This expectation seems overly pessimistic given Aflac’s track record of profit growth. If Aflac can grow NOPAT by just 4% compounded annually for the next decade , the stock is worth $102/share today – a 72% upside. CubeSmart (NYSE: CUBE ) is one of our least favorite stocks held by UWM and earns a Dangerous rating. Despite GAAP net income that occasionally looks good, CubeSmart has never generated positive economic earnings since going public in 2004. The company’s ROIC has remained well below that of peers and is currently a bottom quintile 4%. Worst of all, the company’s negative free cash flow and -5% free cash flow yield could put pressure on its ability to continue paying its near 3% dividend yield. Despite the problems, CUBE remains overvalued. To justify its current price of $30/share, CubeSmart must grow NOPAT by 13% compounded annually for the next 22 years. Figures 3 and 4 show the rating landscape of all All Cap Blend ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.