Cash-Rich Companies

Written By Brian Hicks

Posted November 15, 2009

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.



It may seem like this market has just about lost its mind, as the dollar wobbles. 

But the world is still full of money-making opportunities. Here’s a look at some of them from the past week…

  • A week after Warren Buffett bought Northern Santa Fe for $34 billion, the buyouts continue. Hewlett-Packard, for example, just announced it’ll acquire 3Com Corporation (COMS) for about $2.7 billion. And this won’t be the last of the mega-deals: Companies are still sitting on record levels of cash, just waiting to spend. We’re talking $994 billion in cash hoarding. Tech companies, for example, are loaded with $269 billion in cash that could be used for M&A and dividends. Keep an eye on Microsoft, Google, Cisco, Apple, Intel, EMC Corporation, Dell, Yahoo, Amazon.com, and eBay Inc.

  • Ranging from $78 to $79 a barrel, oil’s been quiet this week. But we were hit with a lot of crude oil forecasts, making our Bakken investments that much more appealing. According to OPEC, global oil demand will grow by 700,000 barrels a day next year, thanks to China and India. The always ‘trustworthy’ Goldman Sachs maintained its $85 a barrel forecast for year end and $95 by next year. And the IEA is reporting that global oil consumption will average more than 86 million bpd in 2010 — marking the third straight month that the forecast has been increased.

  • And what would a week in investing be without mentioning gold? Gold continues to rocket. As of this writing, it passed $1,123 for December delivery. The increase now marks the ninth straight day that gold futures have spiked, as dollar-wary investors race to gold.

  • Speaking of gold, the Van Eck Market Vectors Junior Gold Miners ETF (GDXJ) started trading this week. But while the fund will offer good gold miner exposure, according to the prospectus, the fund is not allowed to invest in a junior gold miner with a market cap of less than $150 million. That means that some of the top-quality names will not qualify. Still, this fund should give you enough exposure to gold’s further run north.

  • Also making headlines: New claims for unemployment benefits fell more than expected last week to 502,000 from an upwardly revised 514,000 last week.

  • But you can profit from more than the good news. You can profit from the coming bad news, too. As we’ve been warning, the second round of the housing crisis will soon begin. (U.S. foreclosure filings passed 300,000 for the eighth straight month, as unemployment makes it tough for homeowners to pay bills. A total of 332,292 homes received a default or auction notice, or were seized by banks — that’s up 19% year over year.) But there is a way to trade the coming trend, as we’ve seen in Options Trading Pit.

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

P.S. In case you missed any of the week’s top-read articles from Wealth Daily and our sister publications, I’ve included them here.

Peak Oil Reality: Closer to Peak Oil than Officials Have Admitted
Wealth Daily Publisher Brian Hicks comments on a recent news article that sent shock waves through the energy sector, edging the theory of peak oil ever closer to reality.

Now Has Never Been An Easier Time to Profit: Commodities Again Leading the Charge
Oil prices are rising so fast that the International Energy Agency just increased its world oil demand forecast for 2009, mid-year. According to IEA analysts, we can expect demand to spike an average of $3.6 million barrels a month. . . and we plan to be right there to profit, again and again.

Global Desalination Investments: Where Abu Dhabi is Spending Oil Profits
Energy & Capital Editor Nick Hodge discusses the growth in Middle East desalination and the investments that go along with it.

Smart Grid Stocks: Wires, Lights, and Energy Networks
Green Chip Editor Nick Hodge discusses smart grid stocks. . . and what’s in store for the sector in 2010. . .

Biotech Stocks to Watch: The Race for the Cure
Not only is this company working on the cure to one of the deadliest diseases know to man, it’s also following an enormously profitable trend in the biotech sector.

Profit Update: Hyatt IPO: We Nailed It — Absolutely Nailed It
Despite the naysayers that advised against buying Hyatt (H) on the IPO, Wealth Daily bucked the trend — and won.

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