In case you missed it, Morgan Stanley will be officially spinning off Discover in the near future. If you were lucky enough, you may have owned Morgan Stanley (MS) stock by closed today, in which you were rewarded with a share of Discover for each two shares of MS you owned.
Unfortunately, if you don't own any shares of Morgan Stanley, the likelihood of obtaining Discover shares before they hit the open market are slim to none. However, there still remains a plethora of money to be made on both stocks. Recently, Mastercard (MA) reached highs in the $160/share range after issuing its IPO around $45/sh. Although Discover may be priced at a higher premium do to the foreseeable or comparable demand, it likely will enter the NYSE undervalued and be an immediate speculative and euphoria play. Holding Discover for a longer time frame may not be a bad idea either. American Express (AXP) was issued back in the late 1970s around a mere $3. Since, the company stock is valued over $60/share, splitting four times along the way.
Discover has always been emulated because of their innovative ideas for the credit card industry, most notably its cash back rewards program. After Discover and American Express won a landmark case allowing issuance of cards for rival companies, both up-and-coming credit card companies have been able to significantly increase their exposure to the marketplace and subsequently, the number of locations cards can be accepted at.
Discover is not the only strong stock play in this business deal. Morgan Stanley continues to show undervaluation, and like its competitors, MS is showing signs of blossoming soon. Recently, Lehman Bros. posted record profits and significant gains, boosting optimism for Wall Street's investment banks, especially those with limited exposure to the housing (specifically, sub-prime) sector such as MS. Unlike the top-rated investment bank on Wall Street, Goldman Sachs (GS), Morgan Stanley's stock price has yet to experience excessive gains, rendering many to expect a price catch-up shortly. Historically, GS and MS moved simultaneously, but in the past couple years, GS has realized far superior gains.
Monday, June 18, 2007
Monday, June 11, 2007
Jacobs Engineering IS Globalization
If you are like many U.S. investors, you are worried about the slowing US growth relative to the global economy. Also similar to most American stock market participants, you fear the risks of investing abroad. One of the perfect solutions is to invest in Jacobs (JEC), a diversified construction, engineering, and architectural group based in Pasadena, CA.
Jacobs Engineering operates within the following sectors: Aerospace & Defense, Automotive & Industrial, Construction (buildings), Chemicals & Basic Resources, Consumer & Forest Products, Infrastructure, Environmental, Oil & Gas (includes refining), Pharma & Biotech, and Ttechnology.
Jacobs also has created markets in the US, Canada, Australia, China, India, Spain, U.K. and various other European countries.
Diversification is an essential part of anyone's portfolio. Conglomerates like Altria Group, Berkshire Hathaway or General Electric are certainly one way to achieve it. But, in order to fully realize the benefits being made abroad, JE could end up being a better play. In order to sustain growth and continue developing, Europe, India and China have been forced to begin with basics such as infrastructure, construction and energy, all of which Jacobs possesses expertise and solutions. As you see these countries become more developed, Jacobs will leverage their solid relationships and credibility in the region to generate new business in other sectors and industries such as Pharma & Biotech, Technology, Industrial, Environmental Programs, and Consumer products.
Instead of attempting to pour money into risky, foreign stocks, Jacobs provides solid American management along with global growth and market exploration and penetration. According to Yahoo! Finance, Jacobs accounting and reporting is in the top 10 percentile in governance, signifying a lower potential risk of financial problems.
Valuation-wise, Jacobs trades at 25x earnings, slightly under the industry average. Additionally, double-digit growth is expected to continue, providing a steady long-term outlook with little volatility.
If you lack diversification, Jacobs fits perfectly in your portfolio.
Jacobs Engineering operates within the following sectors: Aerospace & Defense, Automotive & Industrial, Construction (buildings), Chemicals & Basic Resources, Consumer & Forest Products, Infrastructure, Environmental, Oil & Gas (includes refining), Pharma & Biotech, and Ttechnology.
Jacobs also has created markets in the US, Canada, Australia, China, India, Spain, U.K. and various other European countries.
Diversification is an essential part of anyone's portfolio. Conglomerates like Altria Group, Berkshire Hathaway or General Electric are certainly one way to achieve it. But, in order to fully realize the benefits being made abroad, JE could end up being a better play. In order to sustain growth and continue developing, Europe, India and China have been forced to begin with basics such as infrastructure, construction and energy, all of which Jacobs possesses expertise and solutions. As you see these countries become more developed, Jacobs will leverage their solid relationships and credibility in the region to generate new business in other sectors and industries such as Pharma & Biotech, Technology, Industrial, Environmental Programs, and Consumer products.
Instead of attempting to pour money into risky, foreign stocks, Jacobs provides solid American management along with global growth and market exploration and penetration. According to Yahoo! Finance, Jacobs accounting and reporting is in the top 10 percentile in governance, signifying a lower potential risk of financial problems.
Valuation-wise, Jacobs trades at 25x earnings, slightly under the industry average. Additionally, double-digit growth is expected to continue, providing a steady long-term outlook with little volatility.
If you lack diversification, Jacobs fits perfectly in your portfolio.
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