You are on page 1of 21

years, and it hasn't gotten much better.

~ Carl Icahn

iShares Dow Jones US Financial Sector (IYF) Vanguard Financials ETF (VFH)

Feature of the Month


Asset Managers 2012 The Asset Managers and related companies featured in this report (listed by market cap) are: Goldman Sachs Group Inc (GS) Black Rock Inc (BLK) Bank of New York Mellon Corp (BK) State Street Corp (STT) T. Rowe Price Group Inc (TROW) Invesco Ltd (IVZ) Northern Trust Corp (NTRS) Blackstone Group LP (BX)

Table of Contents
Stock Picks and ETFs ........................1 2 Financial Select Sector SPDR (XLF) . 3 iShares DJUS Financial Sector (IYF) . 4 Vanguard Financials ETF (VFH) . 5 Featured Stocks: GS, BLK, BK, STT, TROW, IVZ, NTRS, BX, AMG, SEIC, EV, LM, AB .............................................. 6- 18 Market .................................................. 19

The chart shows as the average 10-year year return (percentage on the left Y-axis) axis) on GS while the percentage on the horizontal X-axis axis shows us the reliability factor. Looking at March, it would imply that it has a 62% chance of giving us an average gain of 4% while October is better with a 79% chance of a 5% gain. The month of May would seem like the best bet for a short sell with a 69% chance of a 3.5% drop. For better reliability, it is advised that you compare the trend of each individual stock with the sectors sector ETF. For example, the ETF (XLF) is bullish in March thus the 62% chance of GS making an average 4% in March is

Snapshot as of the Close of 28 Dece December 2012 Previous Close: 52wk Range: Inception Date: MorningStar Rating: Risk: 16.18 12.99 16.70 16Dec1998 6Dec1998 Stars 2 Star Above Average Volume: Shares Outstanding: Total Net Assets: Category: Return: 32.07 07M 579.86M 579.86 $8.15B 8.15B

Specialty - Financial Below Average

Source: moneycentral.msn.com

Cons Analysis: Definitely not the time to be long on this ETF but it does has a great shorting possibility in i February especially now that XLF has broken to a four-year year high.

Previous Close: 52wk Range: Inception Date: MorningStar Rating: Risk:

60.19 49.04 61.54 22 May 2000 2 Stars Above Average

Volume: Shares Outstanding: Total Net Assets: Category: Return:

403,556 10.77M $565.73M 565.73M

Specialty - Financial Below Average

Source: moneycentral.msn.com

Cons Analysis: Like the XLF, this ETF is good to short in Fe February bruary and then reverse it in March to get a 75% chance of a long profit in April.

Previous Close: 52wk Range: Inception Date: MorningStar Rating: Risk:

33.63 27.62 34.72 26 Jan 2004 2 Stars Above Average

Volume: Shares Outstanding: Total Net Assets: Category: Return:

216,768 28.65M $850.53M 850.53M

Specialty - Financial Below Average

Source: moneycentral.msn.com

Cons Analysis; And like the two previous ETF, VFH is no different but it carries a very wide slippage. Might not n be worth the risk given that its returns as no better than IYF and XLF.

Snapshot as of the Close of 28 Dece December 2012 Industry: Diversified ersified Investments Previous Close: 125.52 52wk Range: 90.14 129.72 Ave Daily Volume (13wk): 4.12M Beta: 1.37 Debt/Equity Ratio 6.02 Dividend Yield (12 months): 1.59%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 58.99B 469.94M 12.09 9.69 10.39

Cons Analysis: GS is normally a reliable bullish trade in January but goe goes s rather flat in February. But I will definitely be long on GS in March h as I have done in the last four years with much success.

(ETFs) and other exchange-traded traded products ( ET ETPs). Ps). In March 2012, it acquired Claymore Investments, Inc. from Guggenheim Partners, LLC. ember 2012 Snapshot as of the Close of 28 December Industry: Asset Management Previous Close: 204.51 52wk Range: 160.25 209.9 209.91 Ave Daily Volume (13wk): 780, ,920 Beta: 1. 1.49 Debt/Equity Ratio 0.3 0.32 Dividend Yield (12 months): 2.93 2.93%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 34.67B 34.67 169.54 54M 15.84 5.84 13 3.65 12.86

Cons Analysis: There is very little doubt ubt that BLK will give us a profit between January and April if you can afford its $222 price tag. Its not a huge profit but January has the second highest reliability percentage of the year, second to only Decembers 79% for more than 4% and it may be a good time to put in a position. position

2012, it purchased the remaining 50% of WestLB Mellon Asset Management joint venture from Portigon. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management agement Previous Close: 25.42 52wk Range: 19.30 26.25 Ave Daily Volume (13wk): 6.69 6.69M Beta: 0.88 Debt/Equity Ratio 0.95 Dividend Yield (12 months): 2.05 05%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 29.71B 29.71 1.17B 13.17 13. 10 0.77 1.92

Cons Analysis: Looks like we missed the best run on BK between October to December. . January is the last of the best four months on this stock and it might be worth a conservative position for a possible 1% gain in January. January

3, 2011, the Company acquired Complementa Investment Investment-Controlling Controlling AG. On January 10, 2011, it acquired ac Bank of Irelands asset management business (BIAM). Snapshot as of the Close of 28 December ember 2012 Industry: Regional - Northeast Banks Previous Close: 46.05 52wk Range: 38.21 47.30 Ave Daily Volume (13wk): 4.11 4.11M Beta: 1.40 Debt/Equity Ratio 0. 0.95 Dividend Yield (12 months): 2.08 08%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Moderate Buy 21.40B 21.40 464.81M 464.81 11.66 10.73 0.73 3.94

Cons Analysis: This one is screaming for a vertical spread in January and February.

channels. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 63.93 52wk Range: 54.47 66.95 Ave Daily Volume (13wk): 1.21M Beta: 1. 1.60 Debt/Equity Ratio 0. 0.00 Dividend Yield (12 months): 2.13 2.13%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 16.29B 16. 254.87M 254.87 19.98 16.78 16. 3.21

Cons Analysis: I am likely to go long on March Calls with a view to selling February Calls after Januarys January expiration.

Snapshot as of the Close of 28 December ember 2012 Industry: Diversified Investments Previous Close: 25.78 52wk Range: 19.92 26.94 Ave Daily Volume (13wk): 3.16M Beta: 1. 1.83 Debt/Equity Ratio 0.62 Dividend Yield (12 months): 2.68 68%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Moderate Buy 11.45B 11.45 444.04M 444.04 16 6.32 12 2.51 1.58

Cons Analysis: I intend to go long on IVZ after January Expiration Friday on May Calls. For now, I am wary of its 27.00 27.50 multi-year year high resistance and will wait to see if it successfully breaks above that confluence by Expiration Friday.

outsourcing and custody business of the Northern Trust Securities Services (Ireland) Limited. On July 29, 2011, Northern Trust acquired Omnium LLC (Omnium). Snapshot as of the Close of 28 December ember 2012 Industry: Regional - Midwest Banks Previous Close: 49.95 52wk Range: 39.51 50.46 Ave Daily Volume (13wk): 1.16M Beta: 0.91 Debt/Equity Ratio 0. 0.76 Dividend Yield (12 months): 2.40%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 11. .98B 239.80M 239.80 18 8.78 15 5.09 2.68 2.6

Cons Analysis: NTRS has been on an uptrend since bottoming out in 2011 at 32.50. T The he first four months on this stock seems like a low risk trade e for a modest aver average 1.5% return.

primary assets Vivint, Vivint vint Solar and 2GIG Technologies. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 15.25 52wk Range: 11.13 17.25 Ave Daily Volume (13wk): 3.44 3.44M Beta: 2.23 Debt/Equity Ratio 2.40 Dividend Yield (12 months): 2.62 2.62%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Moderate Buy 17.38B 17.38 1.14B 89.71 7.19 0.16 0.1

Cons Analysis: I love the reliability rate of BX in February, March and April. I also love the possibility of an average 5% return in that timeframe. This will be a straightforward Buy after January with a tempting reversal at the end of April for a short in May till June.

Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 127.74 52wk Range: 94.32 132.33 Ave Daily Volume (13wk): 309,554 Beta: 2.02 Debt/Equity Ratio 0.83 Dividend Yield (12 months): N.A
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Moderate Buy 6.62B 6.62 51.80M 51.80 48.39 14.26 4.26 2.63 2.6

Cons Analysis: The reliability factor between January and March is not that great but a long position in April is a consideration if there is nothing thing better in this report to buy by then. That 2.02 Beta is an attractive bet if you do consider this in April for a possible 67% chance of a 4% gain.

February 2012, the Company acquired t the he assets of NorthStar Systems International, Inc. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 23.06 52wk Range: 16.99 23.52 Ave Daily Volume (13wk): 728,850 Beta: 1. 1.10 Debt/Equity Ratio 0. 0.00 Dividend Yield (12 months): 1.39 1.39%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Moderate Buy 3.99B 3.99 172.90M 172.90 20.96 20. 16 6.13 1.10

Cons Analysis: I wonder if a short will pay off this January especially now that SEIC has broken to a multi-year high as of the close of 4 January. With only ly a 52% chance of a 2% profit, it might not be worth the risk.

owned subsidiary Navigate Fund Solutions LLC. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 31.61 52wk Range: 22.97 32.65 Ave Daily Volume (13wk): 1.11 1.11M Beta: 1.62 Debt/Equity Ratio 1.55 Dividend Yield (12 months): 2.53 2.53%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 3.68B 3.68 116.29M 116.29 18.38 8.38 13.51 13. 1.72

Cons Analysis: Very low risk trade for modest profits between January and May. December mber is this stocks stock best month for a long return of 5%.

of March 31, 2012, assets under management were $643.3 billion. During the fiscal year ended March 31, 2012 (fiscal 2012), the Company sold Bartlett & Co. Snapshot as of the Close of 28 December ember 2012 Industry: Asset Management Previous Close: 25.52 52wk Range: 22.36 29.49 Ave Daily Volume (13wk): 1.3 1.38M Beta: 1.76 Debt/Equity Ratio 0. 0.21 Dividend Yield (12 months): 1.72 72%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 3.36B 3.36 131.71M 131.71 20.25 0.25 11.39 1.39 1.28 1.2

Cons Analysis: LM has been languishing along its three three-year year old 24.00 support and looks good for a low risk low return trade between January and April.

LLC. On November 30, 2011, the C Company ompany acquired Taiwan International Investment Management Co. (TIIM). ember 2012 Snapshot as of the Close of 28 December Industry: Asset Management Previous Close: 17.48 52wk Range: 11.44 18.29 Ave Daily Volume (13wk): 346,820 Beta: 1.76 Debt/Equity Ratio 0. 0.00 Dividend Yield (12 months): 5.43 43%
Source: moneycentral.msn.com

Analyst Consensus: Market Cap: Shares Outstanding: Current P.E. Forward P.E. EPS

Hold 1.84B 1.84 105.17M -10.47 10.47 12.49 2.49 -1.72 1.72

Cons Analysis: AB broke its 52W high on 4 January and looks set to continue its uptrend between now and May for an average 1.50% to 2% gain.

In the U.S., the market only just managed to squeeze out a Santa Claus Rally in the last week of the run. This usually implies that the year ahead is likely to be bullish. January is usually a bullish month but I will be staying on the back-foot and watching from the sidelines till I know for certain where the market wants to go. The first five days of the month will be crucial in giving the market the confidence it needs. If these five days close higher on the S&P, then were not likely to get much of a threat for the year. According to the Stock Traders Almanac, this has a 84.6% reliability over the last 39 years. January Preview January 2013 has 21 trading sessions and two holidays. January is usually a bullish month and is famous for its January Barometer prophecy As goes January, so goes the year. This implies that is January closes with a gain, so will the rest of the year. But if January closes with a loss, were in for a tough year. January Trivia st January 1 is New Years Day Markets are closed The first trading day of the year is usually bearish The second trading day has seen the DOW go up 14 of the last 19 rd Santa Claus Rally officially ends on 3 January The second week of the month is quite bullish Expiration week in January is quite bearish with the DOW down 9 of the last 14 The Monday of January Expiration Week has been down on the DOW 15 of the last 20 January Expiration Friday has been down on the DOW 10 of the last 14 with big losses

Let's now remove 8 zeros and pretend it's a household budget: Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Balance owing on the credit card: $142,710 Total budget cuts so far: $385 Lesson # 2: Here's another way to look at the Debt Ceiling: Let's say you come home from work and find there has been a sewer backup in your neighborhood and your home has sewage all the way up to your ceilings. What do you think you should do - raise the ceilings or remove the crap?
Trade Safe & Happy Hunting Always! From Conrad, AT and Mel.