Investing in Farmland – A Beginners Guide to UK Farmland Investment

Agricultural land investment is clearly the hot ticket of the moment, with every level of investor from institutional funds such as Schroders and Barings investing millions of pounds, to smaller retail investors with a few thousand seeking good quality farmland for investment. Whether you have access to 50 million or 20,000, there are projects and strategies available on the open market to suit your budget and requirement, from the UK to Australia, and from the Ukraine to South America, all with subscribing to different investment strategies, and some less credible in terms of end value than others.One part of the current trend that alarms me is the apparent rush of retail investors to invest in farmland overseas, buying up title or leases with little or no comprehension of the true value of the underlying asset. For which they are parting with hard earned cash for. Agricultural land produces soft-commodities (food), and as such the value of the land is intrinsically linked to current pricing trends for whichever commodity is being produced by that land, along with a host of other factors. Currently food commodity prices are at a forty year low, indicating a huge margin for growth in value of both soft-commodities and therefore the underlying asset that produces them, yet investors that lack experience seem to be purchasing or leasing farmland outside their domiciled country without sight of any kind of credible, regulated valuation, seemingly smitten with the story of growth and income, without truly understanding the fundamentals supporting farmland investment, risk, or exit strategy.When speaking to clients on a daily basis about the relevance of investing in farmland as part of an overall low-risk strategy, I think it is most important for investors to understand the fundamentals supporting agricultural land investment, as well as the various investment strategies that can be employed to gain exposure to this sector and asset class, and more importantly, investors should have enough knowledge to decide whether farmland investment is a suitable asset allocation strategy to suit their own needs. Here are some of the broad profiles of investors that should or should not investigate the prospect of investing in farmland:- Investors that Should Consider Farmland
- Investors that Should Not Consider Farmland
- Investors holding cash as part of a low-risk portfolio
- Investors with a requirement to leverage
- Investors requiring stable, consistent income
- Investors with a high-risk approach / strategy
- Investors with a necessity to hedge inflation
- Investors with a risk-averse approach
- Investors desiring exposure to propertyCurrent Market ConditionsIf this article is to be well-rounded and achieve the goal of helping the investor to make an informed decision, it is important to explore the current market conditions that have led to this whirl of interest in farmland investment from both the retail and institutional sectors.Firstly, we are seeing price volatility in more traditional asset classes such as stocks and bonds, which is a result mostly of the fact that the world is still in a precarious economic position with very poor levels of forward visibility. With Economists unable agree with each other and comfortably project where our global and national economies are headed, it is very difficult to price and value assets such as companies, and therefore the shares that make up these businesses.Secondly, on a global basis, and specifically in the UK, the central bank has undertaken a policy of quantative easing, i.e. printing more money and flushing it into the main supply in an effort to kick-start the economy. This will lead to higher levels of inflation to some degree, and in an inflationary environment investors seek to protect their wealth by purchasing assets that have a positive correlation with inflation i.e. their value rises when inflation rises, providing growth for the investors over and above the rate of inflation..Thirdly, investors have always kept back some cash as part of their portfolios, feeling it is the safest of assets offering the lowest level of capital risk, whilst at the same time providing an income return relevant to the interest rate they achieve. In the current climate with central bank interest rates so low, investors have lost these risk-free returns, so must seek out an asset that not only grows in value, but also produces an income to replace the lost revenue.These three characteristics that define the current economic playing field all combine to draw investors to the idea that investing in farmland is a sound strategy, and that a well-placed farmland investment will provide not only the inflation beating growth that is required, but also replace the income lost from cash deposits, as well as provide the low-risk stability that is required in times of poor visibility, as farmland is one of the very few assets that are absolutely essential to the survival of the human race yet is in ultimately short supply, ensuring that sound fundamentals support a continuation of the current value growth, and increasing income streams as food commodity prices start to increase to previous levels.So how does arable land perform as an investment asset? Well some of the key characteristics of agricultural land investment are as follows:Investing in farmland provides a proven inflation hedge, with data showing very clearly that tillable land shares a positive correlation with inflation. Historically farmland values increase faster than inflation, which lend investors confidence in the asset as not only an inflation hedge but also a capital preservation tool as farmland is viewed as a low-risk asset as the investment is underpinned with an asset that is in limited supply but where demand for food is increasing at an astounding, and frankly unsustainable rate, and unlike other commodities that we require for day to day operation such as oil, metals or gas, farmland is a renewable resource that continues to produce food season after season.Agricultural land investment is also a good strategy for stable, consistent income, as unlike other popular low-risk investments such as gold, farmland also provides regular income, either from the commercial farming activities, or from renting the farm to a farmer to work the land and capturing a rental income instead. With farming tenancy occupancy rates at nearly 100% in the UK, this income is stable and regular, making investing farmland ideal for those investors seeking low volatility income.Investing in farmland also provides some excellent tax planning opportunities and many investors look to farmland investment to provide relief for IHT and various other tax strategies.Aside from all of these characteristics that help farmland investment fit very well into the current market conditions that we described earlier, investing in farmland is simple and transparent and very easy to overcome one of the first hurdles I mentioned in this article; value for money. One choosing to invest in farmland in the UK for example would commission a regulated Red Book Valuation undertaken by a RICS regulated Chartered Surveyor, ensuring that the investor receives value for money. Again, one of the biggest mistakes that investors are making right now, is purchasing asset without knowing whether they are overpaying as there is no evidence to support the sale price. One piece of advice, if it doesn’t have a proper valuation, don’t buy it, simple.So exactly how can investors gain exposure to this low-risk, income producing inflation hedge? Well there are various investment strategies available to the qualified investor with liquid capital in the region of 20,000 +, here we will cover the two main options, and also break down the various sub-categories to give the reader a broad understanding of the options available to him/her. The two main options available to the retail investor are farmland investment funds andAside from taking into account the particular investment strategy, all farmland investment funds share the same pros and cons as any other type of investment fund when compared to direct asset ownership. The fund will be managed by person or persons with the relevant experience and successful track record (or not) of investing in agriculture. You will own shares in a vehicle that will own many different underlying assets rather than focussing your capital and attention on one asset you believe to show good qualities. Essentially the investor relinquishes control of his capital to the Fund Manager who will invest it on their behalf, hopefully scoring well. In actual fact many studies have shown that the benefits of spreading the risk of investing capital over many different assets is equalled by the added risk of acquiring much larger assets in the first place, and should one particular acquisition turn out to have an overall negative effect, then the value of the entire fund is likely to drop.Investing in Farmland DirectlyInvesting in farmland directly allows the investor ton gain exposure to the raw asset that is increasing in value, and allows the investor to dictate the terms of the investment strategy, location, size of the investment, and most importantly in my opinion this is the only strategy that allows the investor the opportunity to directly own a tangible asset that has no correlation to financial markets and is most likely to increase in value above the rate of inflation and also gives the investor the chance to have their asset produce an income.Selecting a good quality piece of farmland is the key of a successful strategy here, and this is where expert advice is useful. To keep things nice and simple a good rule is looking at how much revenue that land could produce, this will give an indication of the level of income that could be generated through rent of farming activity. Also, carrying out a Red Book Valuation via a RICS regulated Chartered Surveyor with comparative values and working historical data to get an idea of whether this farm has increased in line with, above, or below the national average.In my opinion, when investing in farmland, the only land that should be considered at all is land that is part of, or could be part of a profitable working farm. Using this as your golden rule will ensure that you only invest in farmland that produces revenue and profit and therefore will grow in value in line with commodity prices and inflation.This all leads me to believe that whilst farmland investment funds are an option to take a hands off approach, direct ownership of farmland as an investment asset provides the investor with less risk, a tangible asset, and full control of their holdings.RisksFarmland investment is not a risk free affair, as with any opportunity to part with cash, investing in farmland presents the investor with a number of risks that should be considered when assessing the asset for acquisition as the income produced may be contingent upon them.Firstly one should assess they type of crops being producing, seasonal or row crops are best as they van be changed each season to take advantage of whichever foodstuff is commanding the greatest price on the commodity market, these crops include wheat, maize, soy, and barley. These crops are much more reactive to market than permanent crops such as vines as vines will not produce any income within the first three years during their maturation period and also are much more susceptible to disease during this period.Secondly one must consider whether to buy existing farmland for investment, or to buy a Greenfield site and convert it to agricultural use. Investing in farmland that already has a proven track history of producing revenue offers the investor the lowest risk and also the lowest cost.Lastly the structure of the deal to which the investor commits will dictate overall risk profile to an extent. You may choose to simply rent out the land to a farmer for a fixed rental payment, this in my opinion offers the lowest risk and most stable income as any default in the rent van result in eviction of the farmer. Another option is to start a farming enterprise and work the land for a profit, only seriously experienced and successful farmers should consider this route. Also there is some middle ground here too, with the landowner sharing in the revenue from crop sales and also taking a top up rental payment, and whilst this does allow the investor to participate in any spike in commodity prices, it also exposes the investor to unnecessary risk.So to summarise my chosen farmland investment strategy; find a good partner to work with who knows good quality farmland and is able to source good quality deals, buy actual farmland, whether in your name, in a company name, by holding title deed, or holding shares in an ownership vehicle, either way, when investing in farmland, buy direct. Investing in farmland should be considered if you are holding cash, if you require income, if you wish to preserve your capital through hard times, or if you have a SIPP or SSAS pension.Farmland Investment FundsAs with any investment fund, every agricultural fund will have it’s own parameters of investment and investment style, a Fund Manager or Investment Committee. Some will invest in farmland alone, others will acquire farming businesses, and others will acquire support services businesses. Most farmland investment funds will undertake to invest in agriculture using a variety of investment strategies covering all of the above.

Obama Health Care – How it Affects Middle Class Americans

Obama health care has received mixed emotions from people all over the nation. Some are in favor, others feel that the government has completely taken control of their rights. For the middle class Americans, many believe Obama care will adversely affect themselves and the upper class. While it does make significant changes to our current system, every class will be affected in one way or another.It is believed by many individuals and institutions that low-income families will benefit greatly, and have health insurance for perhaps the first time ever. However, this benefit to the lower income class means that high-income families will pay considerably, most of it in the form of increased taxes. Obama care is a touchy subject with many Americans, who feel they will be forced to pay stiff penalties if they do not buy health insurance coverage.Middle class Americans feel that they may suffer the most, and cannot see a way out as they attempt to pay for basic necessities such as childcare, food, housing, utilities, etc. In their minds, it they are already struggling to meet these obligations, how in the world can they afford health insurance? But if they don’t purchase it, according to Obama laws they will face penalties if they fail to get health insurance coverage.Struggling with the rising cost of insurance has been a problem for years, and the debate has continued regarding how to get the United States health care system under control. Under Obama health care, families who earn in excess of $250,000 per year will face an increase in Medicare tax from 1.45% to 2.35% – same for individuals who earn $200,000 per year. Since there is now no option regarding whether an individuals decides to purchase health insurance coverage or not, they will face penalties.Americans who already have health insurance may think “So what? What’s the big deal?” In fact, Obama health care may affect those who previously had health insurance coverage. While it seems that having more people paying in to the system would mean lower insurance premiums, that may not be the case. According to congressional estimates, by the year 2016 individual premiums may be 10 to 13% higher than they are currently.Several factors that play in to the equation include the fact that in 2014, insurance companies will no longer be able to deny coverage or charge increased premiums due to existing conditions. Add to that the fact that shortly thereafter, insurers will no longer be able to set lifetime limits on coverage, nor will they be able to drop insured individuals who become ill. What does this mean? In a nutshell, Obama health care means that more sick people will be covered, and those costs are greater to insurance companies than those of healthy individuals. All of this may ultimately counteract the benefits of a larger health care pool.At the current time, it is difficult to determine exactly how it will affect Americans in specific classes, or who will ultimately end up paying the most for mandatory health care coverage. One thing is for certain – while some believe that this is the best thing since buttered bread, others aren’t nearly so optimistic. In a few years, we will all be able to determine just how Obama health care has affected our lives personally.

Home Health Care Agency Tips

Getting home health care services is an investment. It would be something that your family would be considering for a long time. With this, you need to make sure that your care services are appropriate for the care recipient. You should also look at the other details of the agency when it comes to the professionals that they are hiring.The first thing you need to do is find a list of accredited and licensed agencies. This would give you the basic assurance that you would be getting the right and the best kind of home health care for your folks.Once you get this list, it would be best to make a shortlist in terms of their proximity to your home. This way, you can take time to visit them and also research about them. You can go to the location and check it out yourself. You should know how long the agency has been in operation so far so that you would be able to qualify how they would serve the purpose of caring for your folks.Reference checks are a must. You need to be sure that the care worker is licensed and also comes from a clean background. So you should also make it a point to ask what specific methods your home health care agency uses when it comes to hiring their health professionals.Speaking of references, you should also ask if they get in touch with specific agencies or professionals for the said background information. This would also help you understand how well-affiliated they are with other networks.You should also look at the specific services being offered by the home health care agency. Make sure that they have what your folks need and what the doctor would have to prescribe to them. It is important that the care provided in the agency also coordinates well with your folks’ medical condition.Once you have zeroed in on your home health care agency, better book an appointment with them. This way you can discuss in person all the necessary things that you would want to ask and clarify. You should also ask if you can be given the chance to choose the professional to work with your folks.Choosing the right home health care agency is something you need to take time with. You need to make sure that you are doing the right thing and that you are making the right investment.

There is an excessive amount of traffic coming from your Region.

#EANF#

S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows

Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
Advertisement

Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.

The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.

Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.

Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.

Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.

From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.

S&P 500 Tests Resistance At 3730

S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.

On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.

SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

S&P 500 Biotech Giant Vertex Leads 5 Stocks Showing Strength

Your stocks to watch for the week ahead are Cheniere Energy (LNG), S&P 500 biotech giant Vertex Pharmaceuticals (VRTX), Cardinal Health (CAH), Steel Dynamics (STLD) and Genuine Parts (GPC).

X
While the market remains in correction, with analysts and investors wary of an economic downturn, these five stocks are worth adding to watchlists. S&P 500 medical giants Vertex and Cardinal Health have been holding up, as health-care related plays tend to do well in down markets.

Steel Dynamics and Genuine Parts are both coming off strong earnings as both the steel and auto parts industries report optimistic outlooks. Meanwhile, Cheniere Energy saw sales boom in the second quarter as demand in Europe for natural gas continues to grow.

Major indexes have been making rally attempts with the Dow Jones and S&P 500 testing weekly support on Friday. With market uncertainty, investors should be ready for follow-through day breakouts and keep an eye on these stocks.

Cheniere Energy, Cardinal Health and VRTX stock are all on IBD Leaderboard.

Cheniere Energy Stock
LNG shares rose 1.1% to 175.79 during Friday’s market trading. On the week, the stock advanced 3.1%, not from highs, bouncing from its 21-day and 10-week lines earlier in the week.

Cheniere Energy has been consolidating since mid-September, but needs another week to forge a proper base, with a potential 182.72 buy point formed on Aug. 10.

Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday, as the largest U.S. producer of liquefied natural gas eyes strong demand in Europe.

Even though natural gas prices are plunging in the U.S. and Europe, investors still see strong LNG demand for Cheniere and others.

The U.K. government confirmed last week that it is in talks for an LNG purchase agreement with a number of companies, including Cheniere.

In the first half of 2021, less than 40% of Cheniere’s cargoes of LNG landed in Europe. That jumped to more than 70% through this year’s second quarter, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortage only intensified last month. That is when an explosion disabled the Nord Stream 1 pipeline from Russia that had once supplied 40% of the European Union’s natural gas.

In Q2, sales increased 165% to $8 billion and LNG earned $2.90 per share, up from a net loss of $1.30 per share in Q2 2021. The company will report Q3 earnings Nov. 3, with investors seeing booming profits for the next few quarters.

Cheniere Energy has a Composite Rating of 84. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 41.

Vertex Stock
VRTX stock jumped 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares climbed 2.2% for the week. Vertex stock has formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.

The stock has remained consistent over recent weeks, while the relative strength line has trended higher. The RS line tracks a stock’s performance vs. the S&P 500 index.

Vertex Q3 earnings are on due Oct. 27. Analysts see EPS edging up 1% to $3.61 per share with sales increasing 16% to $2.2 billion, according to FactSet.

The Boston-based global biotech company dominates the cystic fibrosis treatment market. Vertex also has other products in late-stage clinical development that target sickle cell disease, Type 1 diabetes and certain genetically caused kidney diseases. That includes a gene-editing partnership with Crispr Therapeutics (CRSP).

In early August, Vertex reported better-than-expected second-quarter results and raised full-year sales targets.

S&P 500 stock Vertex ranks second in the Medical-Biomed/Biotech industry group. VRTX has a 99 Composite Rating. Its Relative Strength Rating is 94 and its EPS Rating is 99.

CRISPR Stocks: Will Concerns Over Risk Inhibit Gene-Editing Cures?

Cardinal Health Stock
CAH stock advanced 3.2% to 73.03 Friday, clearing a 71.22 buy point from a shallow cup-with-handle base and hitting a record high. But volume was light on the breakout. CAH stock leapt 7.3% for the week.

Cardinal Health stock’s relative strength line has also been trending up for months.

The cup-with-handle base is part of a base-on-base pattern, forming just above a cup base cleared on Aug. 11.

Cardinal Health, based in Dublin, Ohio, offers a wide assortment of health care services and medical supplies to hospitals, labs, pharmacies and long-term care facilities. The company reports that it serves around 90% of hospitals and 60,000 pharmacies in the U.S.

S&P 500 stock Cardinal Health will report Q1 2023 earnings on Nov. 4. Analysts forecast earnings falling 26% to 96 cents per share. Sales are expected to increase 10% to $48.3 billion, according to FactSet.

Cardinal Health stock ranks first in the Medical-Wholesale Drug/Supplies industry group, ahead of McKesson (MCK), which is also showing positive action. CAH stock has a 94 Composite Rating out of 99. It has a 97 Relative Strength Rating and an EPS rating of 73.

Steel Dynamics Stock
STLD shares shot up 8.5% to 92.92 on Friday and soared 19% on the week, coming off a Steel Dynamics earnings beat Wednesday night.

Shares blasted above an 88.72 consolidation buy point Friday after clearing a trendline Thursday. STLD stock is 17% above its 50-day line, definitely extended from that key average.

Steel Dynamics’ latest consolidation could be seen as part of a larger base going back six months.

Steel Dynamics topped Q3 earnings views with EPS rising 10% to $5.46 while revenue grew 11% to $5.65 billion. The steel producer’s outlook is optimistic despite weaker flat rolled steel pricing. STLD reports its order activity and backlogs remain solid.

The Fort Wayne, Indiana-based company is among the largest producers of carbon steel products in the U.S. It engages in metal recycling operations along with steel fabrication and produces myriad steel products.

How Millett Grew Steel Dynamics From A Three Employee Business

STLD stock ranks first in the Steel-Producers industry group. STLD stock has a 96 Composite Rating out of 99. It has a 90 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement that tops at 99. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 98.

Genuine Parts Stock
GPC stock gained 2.8% to 162.35 Friday after the company topped earnings views with its Q3 results on Thursday. For the week GPC advanced 5.1% as the stock held its 50-day line and is in a flat base.

GPC has an official 165.09 flat-base buy point after a three-week rally, according to MarketSmith analysis.

The relative strength line for Genuine Parts stock has rallied sharply to highs over the past several months.

On Thursday, the Atlanta-based auto parts company raised its full-year guidance on growth across its automotive and industrial sales.

Genuine Parts earnings per share advanced 19% to $2.23 and revenue grew 18% to $5.675 billion in Q3. GPC’s full-year guidance is now calling for EPS of $8.05-$8.15, up from $7.80-$7.95. The company now forecasts revenue growth of 15%-16%, up from the earlier 12%-14%.

During the Covid pandemic, supply chain constraints caused a major upheaval in the auto industry, sending prices for new and used cars to record levels. This has made consumers more likely to hang on to their existing vehicles for longer, driving mileage higher and boosting demand for auto replacement parts.

Fellow auto stocks O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have also rallied near buy points amid the struggling market. O’Reilly reports on Oct. 26.

IBD ranks Genuine Parts first in the Retail/Wholesale-Auto Parts industry group. GPC stock has a 96 Composite Rating. Its Relative Strength Rating is 94 and it has an EPS Rating of 89.

Shoe Repairs And Several Other Things When I Was 7

Shoe Repairs And Several Other Things When I Was 7
My Dad repaired most of our shoes believe it or not, I can hardly believe it myself now. With 7 pairs of shoes always needing repairs I think he was quite clever to learn how to “Keep us in shoe Leather” to coin a phrase!

He bought several different sizes of cast iron cobbler’s “lasts”. Last, the old English “Laest” meaning footprint. Lasts were holding devices shaped like a human foot. I have no idea where he would have bought the shoe leather. Only that it was a beautiful creamy, shiny colour and the smell was lovely.

But I do remember our shoes turned upside down on and fitted into these lasts, my Dad cutting the leather around the shape of the shoe, and then hammering nails, into the leather shape. Sometimes we’d feel one or 2 of those nails poking through the insides of our shoes, but our dad always fixed it.

Hiking and Swimming Galas
Dad was a very outdoorsy type, unlike my mother, who was probably too busy indoors. She also enjoyed the peace and quiet when he took us off for the day!

Anyway, he often took us hiking in the mountains where we’d have a picnic of sandwiches and flasks of tea. And more often than not we went by steam train.

We loved poking our heads out of the window until our eyes hurt like mad from a blast of soot blowing back from the engine. But sore, bloodshot eyes never dampened our enthusiasm.

Dad was an avid swimmer and water polo player, and he used to take us to swimming galas, as they were called back then. He often took part in these galas. And again we always travelled by steam train.

Rowing Over To Ireland’s Eye
That’s what we did back then, we had to go by rowboat, the only way to get to Ireland’s eye, which is 15 minutes from mainland Howth. From there we could see Malahide, Lambay Island and Howth Head of course. These days you can take a Round Trip Cruise on a small cruise ship!

But we thoroughly enjoyed rowing and once there we couldn’t wait to climb the rocks, and have a swim. We picnicked and watched the friendly seals doing their thing and showing off.

Not to mention all kinds of birdlife including the Puffin.The Martello Tower was also interesting but a bit dangerous to attempt entering. I’m getting lost in the past as I write, and have to drag myself back to the present.

Fun Outings with The camera Club
Dad was also a very keen amateur photographer, and was a member of a camera Club. There were many Sunday photography outings and along with us came other kids of the members of the club.

And we always had great fun while the adults busied themselves taking photos of everything and anything, it seemed to us. Dad was so serious about his photography that he set up a dark room where he developed and printed his photographs.

All black and white at the time. He and his camera club entered many of their favourites in exhibitions throughout Europe. I’m quite proud to say that many cups and medals were won by Dad. They have been shared amongst all his grandchildren which I find quite special.

He liked taking portraits of us kids too, mostly when we were in a state of untidiness, usually during play. Dad always preferred the natural look of messy hair and clothes in the photos of his children.

US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%

US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 1.14%. While S&P 500 was trading at 3,701.66, up by 0.98% and Nasdaq Composite 10,690.60 was also up by 0.71 per cent

Twitter Facebook Linkedin
US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%
Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. Source: Reuters
US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 345.25 points or1.14 per cent. While S&P 500 was trading at 3,701.66, up by 35.88 points or 0.98 per cent and Nasdaq Composite 10,690.60 was also up 75.75 points or 0.71 per cent. A Reuters report said that today’s strength was on the back of a report which said the Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, reversing declines set off by social media firms after Snap Inc’s ad warning.

Source: Comex

Nasdaq Top Gainers and Losers

Source: Nasdaq

Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. The BSE Sensex ended at 59,307.15, up by 104.25 points or 0.18 per cent from the Thursday closing level. Meanwhile, the Nifty50 index closed at 17,590.00, higher by 26.05 points or 0.15 per cent. In the 30-share Sensex, 13 stocks gained while the remaining 17 ended on the losing side. In the 50-stock Nifty50, 21 stocks advanced while 29 declined.

Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?