Monthly Archives: January 2014

Windhaven Portfolios: Is Schwab just blowing hot air?

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Dear Mr. Market:

The investment industry is notorious for not being transparent with investors.  The industry tends to be a shade of grey as opposed to being black and white. There are often hidden agendas or conflicts of interest that the average investor is never aware of or informed about.  Think back to some of the situations that have negatively impacted investors in just the last few years: Bernie Madoff, Insider Trading, the Mortgage Industry debacle and the meltdown of Enron!  Conflict of interest is essentially why the Sarbanes-Oxley Act is now in existence.

Conflict of Interest – Occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation. (from Wikipedia).

WindhavenToday we will take a look at an investment firm that has had incredible growth over the last several years: Windhaven Investments.

schwabIn 2010 Charles Schwab & Company (SCHW) purchased a small investment advisory firm in Boston named Winward Investments.  The firm’s strategies had posted impressive results for several years and didn’t use the industry standard ‘buy and hold’ type of approach.  They used primarily ETF’s (Exchange Traded Funds) and claim to invest in over 40 different sectors, participating in positive markets and protecting in downturns.  Schwab paid a hefty price for the firm, paying $150 million in cash and stock (source: WSJ). Continue reading →

Clean Energy Fuels (CLNE): Bleeding soon to become Profit

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anghmap-011614Just about anyone who has invested in Clean Energy Fuels Corp. (Nasdaq: CLNE), has traveled a rough road thus far. Clean Energy has serious potential but its great story hasn’t materialized at all. The stock has done absolutely nothing for shareholders and if you’re the type of investor that screens for strong fundamentals it probably hasn’t hit your radar; at least not yet…

What do United Parcel Service (UPS), Frito-Lay/Pepsi (PEP), Procter & Gamble (PG), Ryder (R), and Lowe’s (LOW) all have in common? Each of these companies, and more and more of corporate America, is pouring money into the natural gas industry. Companies like these all see the writing on the wall with regard to energy trends and they are expanding their natural gas fleets.

The U.S. heavy-duty trucking market is beginning to embrace the economic and environmental benefits of natural gas fueled trucks.  There are over 8 million heavy-duty trucks in the U.S. consuming about 20,000 gallons of fuel per year.  The operating cost savings that operators will benefit from by converting from gasoline and diesel to natural gas along with movements towards clean air regulations bode extremely well for companies like CLNE.

Company summary:

Clean Energy is headquartered in Newport Beach, CA and has a market capitalization of almost $1.1 billion.  CLNE supplies compressed natural gas (CNG) fuel for light, medium, and heavy-duty vehicles; and liquefied natural gas (LNG) fuel for medium and heavy-duty vehicles. They are the largest provider of natural gas fuel for transportation in North America. CLNE fuels over 30,000 vehicles per year at over 500 fueling stations throughout the U.S. and Canada. The company has created and continues to develop a network of fueling stations with what they call “America’s Natural Gas Highway”. This network connects major truck corridors across the country for coast-to-coast and border-to-border natural gas fueling. Continue reading →

Should You Buy Target (TGT) Stock?

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Target InvestigationDear Mr. Market:

With the holiday season now in the rear view mirror U.S. consumers are being reminded of the world we live in.  In the middle of the holiday shopping season Target made an announcement that had an impact on millions of individuals.  On December 19th Target announced that 40 million credit and debit cards had been jeopardized by a cyber attack.  Since then the number of cards has grown to 70 million, it has been reported that the number could grow to as many as 110 million!  Just last week Neiman Marcus released news that it is dealing with a similar situation and other retailers are likely to be in the same boat in the coming weeks.

On Friday (January 10th) Target announced that the security issue had a negative impact on their holiday shopping results.  Stores saw sales decline up to 5% (depending on location) when compared to the previous years results.  When 4th quarter earnings are announced on February 26, 2014, the additional expenses the company has incurred due to the hacking incident will certainly have an impact.  CEO Greg Steinhafel announced that 4th quarter EPS (earnings per share) were lowered to $1.20 – $1.30 from the previous guidance of $1.50 – $1.60.  Continue reading →

Portfolio Combo #3 : 60 / 40 with extra Fries and a small Coke please…

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MW-BB798_sm6040_20130422180557_MDCongratulations! You either hit the lottery, just retired, or are leaving a job where you will rollover your $1 million 401(k) into an IRA. For the sake of our newest monthly column and “game”…that’s the basic situation. All joking aside, this scenario plays out all too often and it’s not a game at all.  Most baby boomers or high net worth investors are often faced with having to decide on what the most appropriate allocation mix is. They also may find themselves in a situation where they want smart and time tested investment advice but don’t want to be sold the “flavor of the day”.

We decided to kick off 2014 with a model portfolio (“Core MPG Tactical Portfolio”) that allows an investor to track and see what tactical adjustments we are making for our very own clients. Each month you will see how this model portfolio performs against a benchmark. You will also be able to read commentary on why certain adjustments were being made. Before we outline the initial portfolio here are some basic details and rules of the road: Continue reading →