Tag Archives: construction

5 Best-Ranked Fidelity Mutual Funds To Watch For

With $1.5 trillion (excluding money market assets) of mutual fund assets under management and a wide variety of mutual funds spanning various sectors, Fidelity Investments is one of the largest and oldest mutual fund companies in the world. The company provides investment advice, discount brokerage services, retirement services, wealth management services, securities execution and clearance and life insurance products to its clients. Fidelity provides potential investment avenues worldwide for its investors after extensive and in-depth research by a large group of investment professionals. Fidelity Investments carries out operations in the U.S. through 10 regional offices and over 180 Investor Centers. It also has a presence in eight other countries of North America, Europe, Asia and Australia. Below, we share with you 5 top-ranked Fidelity mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy), and we expect the funds to outperform their peers in future. To view the Zacks Rank and past performance of all Fidelity mutual funds, click here . Fidelity Select Biotechnology Portfolio No Load (MUTF: FBIOX ) seeks capital appreciation. FBIOX invests a large chunk of its assets in companies primarily involved in research, development, manufacture, and distribution of various biotechnological products. Factors such as financial strength and economic conditions are considered to invest in companies located all over the world. The Fidelity Select Biotechnology Portfolio No Load is a non-diversified fund and has returned 8.8% over the past one year. FBIOX has an expense ratio of 0.74% as compared to a category average of 1.37%. Fidelity Small Cap Growth Fund No Load (MUTF: FCPGX ) invests the majority of its assets in securities of small cap companies that are believed to have impressive growth prospects. FCPGX focuses on acquiring common stocks of both US and non-US firms. The Fidelity Small Cap Growth Fund No Load has returned 5.6% over the past one year. As of July 2015, FCPGX held 176 issues, with 2.40% of its assets invested in 2U Inc. (NASDAQ: TWOU ). Fidelity Select Software & Comp Portfolio No Load (MUTF: FSCSX ) seeks growth of capital. The fund invests a lion’s share of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies. It uses fundamental analysis to select companies for investment purposes. The Fidelity Select Software & Comp Portfolio No Load is a non-diversified fund and has returned 8.6% over the past one year. Ali Khan is the fund manager of FSCSX since 2014. Fidelity Select Construction & Housing Portfolio No Load (MUTF: FSHOX ) invests a major portion of its assets in the common stocks of companies principally engaged in the design and construction of residential, commercial, industrial, and public works facilities, as well as companies engaged in the manufacture, supply, distribution, or sale of products or services to these construction industries. It invests in securities issued through the globe. The Fidelity Select Construction & Housing Portfolio No Load is a non-diversified fund and has returned 7% over the past one year. FSHOX has an expense ratio of 0.82% as compared to a category average of 1.41%. Fidelity Select Consumer Discretionary Portfolio No Load (MUTF: FSCPX ) seeks capital growth. The fund heavily invests in securities of companies mostly involved in the consumer discretionary sector. It primarily invests in common stocks of companies all over the globe. Factors including financial strength and economic conditions are considered before investing in a company. The Fidelity Select Consumer Discretionary Portfolio No Load is a non-diversified fund and has returned 6.8% over the past one year. As of October 2015, FSCPX held 60 issues, with 9.45% of its assets invested in Amazon.com Inc. (NASDAQ: AMZN ). Original Post

Duke Is Making All The Right Moves To Secure A Bright Future

Summary Company is taking correct strategic growth measures to ensure secure and sustainable earnings and cash flow growth. DUK can apply for strong rate cases in future due to its high growth investments. Long-term prospects of DUK seem bright due to accelerated growth investments. Company’s risk profile will improve given its measures to strengthen its regulated business. Duke Energy (NYSE: DUK ) is one of the leading electric utility companies in the U.S., which supplies energy to North America using an extensive portfolio of electricity generation assets. The company is regularly using a major portion of its growth investments on expanding its renewable regulated asset base by making regular acquisitions and by pursuing several appealing construction projects, under its attractive business strategy that focuses on having large regulated business mix. DUK’s ongoing capital expenditure will keep its rate base growing, above or in line with the management’s forecasted range, which will boost its long-term earnings and cash flow growth. Given the company’s on-track, strong long-term strategic growth measures, I think income-hunting investors should consider adding DUK to their dividend portfolios. Electricity consumption in the U.S. has been growing at a modest rate. The graph below reflects EIA projections for U.S. electricity consumption in 2016. Source: eia.gov To strengthen their electricity generation portfolio and to keep up with the changing environmental regulations, U.S. utility companies are trying to maximize opportunities of growth, while managing risk by intelligently shifting towards the regulated business side, which will provide stability to their cash flows and earnings. Speaking of DUK, the company has also followed industry norms by increasing its dependence on the regulated business side, which has been a very strong performer. DUK now expects regulated and commercial business to grow by 4%-6% . The company’s plan to have a larger regulated business mix through active acquisitions and through several construction-related projects, is working really well. DUK has built a strong portfolio of approximately 2000MW of owned and equity interest in both wind and solar projects. Speaking of the solar side of its renewable regulated business side, the company is systematically and strategically growing its solar energy-based electricity generation asset base. In North Carolina, where DUK already operates with 13 solar farms, the announcement for the construction of the biggest solar energy generation farm of 40MW , in collaboration with First Solar (NASDAQ: FSLR ), has been announced. Moreover, the company plans to complete the construction of 128MW utility-scaled solar operations in North Carolina. Additionally, DUK’s solar-based investments in South Carolina and Florida are advancing well with the plan. I think the company will benefit from its ongoing investments in the Carolinas by filing rate cases in upcoming years, which will bode well for its EPS and cash flow growth. The company is planning to make its renewable energy generation portfolio stronger, by agreeing on a $4.75 billion deal agreement with Piedmont Natural Gas (NYSE: PNY ). DUK’s management expects that the acquisition of PNY’s assets will be accretive to its earnings base in the first year, after the closure of the deal; the deal will add approximately 50bps to long-term EPS growth. The company is expecting benefit from robust rate base growth of around 9% from this acquisition, which will accelerate DUK’s sales and cash flow base and will ultimately increase its growth rate beyond the given guidance of 4%-to-6%. Moreover, the company has recently acquired a 50% stake in Mesquite Creek via Sumitomo joint venture, to acquire 211MW wind power project, upside of this deal rests in enhancing DUK’s energy generation capacity; also the deal has moved it a step towards achieving its goal of becoming carbon neutral by 2020. Taking another smart move towards achieving carbon neutrality goal, the company has announced the retirement of its Ashville coal plant in N.C. and its replacement with two 280MW CCGTs in 2020, with an expected investment of above $1 billion, the project might add as much as $0.05-to-$0.08 towards DUK’s EPS. Besides these acquisitions and constructions, there are a number of commercial wind and solar power projects planned by the company, which are likely to come in operation by the end of the year. In total, the company’s growth investments is expected to be $20 billion through 2019 and offer the base for strong earnings growth in the years ahead. Furthermore, DUK’s international business, which has been facing some challenges lately have stabilized in 2015. Given the fact that analysts are expecting lower market power crisis and higher energy demand from key international markets like Brazil, amid positive changes expected in the weather, I think the company’s international business will witness modest growth in 2016 and beyond. Furthermore, DUK has an attractive capital return plan, which is largely supported by its strong cash flows. The company has paid dividends for 89 consecutive years. Talking about DUK’s future dividend payments plans at the 3Q 2015 earnings conference call, its CEO said : We have made significant progress in advancing our strategic growth initiatives, both in our regulated and commercial businesses providing strong support for our long-term earnings growth objective. Our objective is to grow dividend annually at a rate consistent with our long-term’s earnings growth objectives. In the near term, our payout ratio will trend slightly above 70%. The company currently offers an attractive dividend yield of 4.85% . Moving ahead, as DUK’s strong growth prospect initiatives will positively affect its cash flows, I expect to see uninterrupted dividend payments for shareholders, which I believe will bode well for the stock valuation, as investor confidence will increase. Summation The company is taking the correct strategic growth measures to ensure secure and sustainable earnings and cash flow growth. DUK has won the ability to apply for strong rate cases in future due to its high growth investments to get an extended portfolio of regulated renewable energy generation asset base, which will have positive impact on its future financial performance and on the stock valuation. Given the accelerated growth investments, the long-term prospect of DUK seems bright. Also, the company’s risk profile will improve given its measures to strengthen its regulated business. Therefore, I think DUK is an attractive investment prospect for income-hunting investors.

Valuation Dashboard: Industrials – Update

Summary 4 key fundamental factors are reported across industries in the Industrial sector. They give valuation status of an industry relative to its historical average. They give a reference for picking stocks in each industry. This is part of a monthly series of articles giving a valuation dashboard in sectors and industries. The idea is to follow up a certain number of fundamental factors for every sector, to compare them to historical averages. This article covers Industrials. The choice of the fundamental ratios used in this study has been justified here and here . You can find in this article numbers that may be useful in a top-down approach. There is no analysis of individual stocks. You can refine your research reading articles by industry experts here . A link to a list of stocks to consider is provided in the conclusion. Methodology Four industry factors calculated by portfolio123 are extracted from the database: Price/Earnings (P/E), Price to sales (P/S), Price to free cash flow (P/FCF), Return on Equity (ROE). They are compared with their own historical averages “Avg”. The difference is named with a prefix “D” before the factor’s name (for example D-P/E for the price/earnings ratio). It is measured in percentage for valuation ratios and in absolute for ROE. The industry factors are proprietary data from the platform. The calculation aims at eliminating extreme values and size biases, which is necessary when going out of a large cap universe. These factors are not representative of capital-weighted indices. They are useful as reference values for picking stocks in an industry, much less for ETF investors. Industry valuation table on 11/25/2015 The next table reports the 4 industry factors. For each factor, the next “Avg” column gives its average between January 1999 and October 2015, taken as an arbitrary reference of fair valuation. The next “D-xxx” column is the difference between the historical average and the current value, in percentage. So there are 3 columns relative to P/E, and also 3 for each ratio. P/E Avg D- P/E P/S Avg D- P/S P/FCF Avg D- P/FCF ROE Avg D-ROE Aerospace&Defense 22.02 18.02 -22.20% 1.19 1.02 -16.67% 21.02 21.28 1.22% 7.89 9 -1.11 Building Products 28.48 20.14 -41.41% 1.28 0.64 -100.00% 33.72 22.38 -50.67% 9.91 6.07 3.84 Construction&Engineering 23.7 18.3 -29.51% 0.43 0.48 10.42% 18.32 19.81 7.52% 2.76 5.98 -3.22 Elec.Equipment 21.46 18.31 -17.20% 1.51 1.64 7.93% 27.36 21.88 -25.05% -8.4 -3.3 -5.1 Ind. Conglomerates 41.07 20.45 -100.83% 2.54 1.3 -95.38% 33.63 29.98 -12.17% 1.88 12.12 -10.24 Machinery 19.26 18.25 -5.53% 1.09 0.9 -21.11% 27.38 21.81 -25.54% 9.65 8.72 0.93 Trading Companies&Distri 15.36 17.14 10.39% 0.6 0.7 14.29% 12.99 25 48.04% 9.18 8.61 0.57 Commercial Services&Supplies 22.1 20.86 -5.94% 1.17 1.03 -13.59% 24.19 19.84 -21.93% 2.15 3.99 -1.84 Professional Services* 23.25 24.04 3.29% 1.46 1.22 -19.67% 21.24 17.43 -21.86% 7.36 3.09 4.27 AirFreight&Logistics 23.07 21.06 -9.54% 0.66 0.57 -15.79% 21.72 32.87 33.92% 11.93 11.12 0.81 Airlines 12.46 15.18 17.92% 0.97 0.41 -136.59% 19.15 12.37 -54.81% 34.11 3 31.11 Marine** 12.92 14.04 7.98% 0.81 1.41 42.55% 15.89 23.27 31.71% -15.58 6.05 -21.63 Road&Rail 16.88 19.17 11.95% 1.22 0.86 -41.86% 34.67 36.17 4.15% 16.97 9.43 7.54 Transport Infrastructure** 7.01 23.6 70.30% 1.06 1.19 10.92% 5.37 20.8 74.18% -1.33 -3.22 1.89 *Professional Services: Avg since 2008. **Factors may vary a lot for some industries with a low number of stocks or a lot of outliers. Valuation The following charts give an idea of the current status of industries relative to their historical average. In all cases, the higher the better. Price/Earnings: Price/Sales: Price/Free Cash Flow: Quality (ROE) Relative Momentum The next chart compares the price action of the SPDR Select Sector ETF ( XLI ) with SPY (chart from freestockcharts.com). (click to enlarge) Conclusion Industrials have slightly out-performed the broad market in the last 3 months, but underperformed it in the last 6 months. The 5 most prominent S&P 500 industrial companies in the recent rally have been General Electric (NYSE: GE ), Southwest Airlines (NYSE: LUV ), Norfolk Southern Corp (NYSE: NSC ), Raytheon (NYSE: RTN ), United Rentals (NYSE: URI ). LUV and RTN have hit new all-time highs, GE is close to its 2008 top. At industry level, Trading Companies and Transport Infrastucture are the only 2 industries with the 3 valuation ratios pointing to underpricing, and a quality level above the historical average. The industries with an improvement in valuation factors since last month are Trading Companies, Commercial Services and Supplies, Marine. There may be quality stocks at a reasonable price in any industry. To check them out, you can compare individual fundamental factors to the industry factors provided in the table. As an example, a list of stocks in Industrials beating their industry factors is provided on this page . If you want to stay informed of my updates on this topic and other articles, click the “Follow” tab at the top of this article.