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Fracking, Emergency Funds, a Mysterious Photo and More



June 12, 2009 – Comments (0) | RELATED TICKERS: JNJ , CHK , F

I'm trying to finish up some work before heading out to hang out with my brother and his family this weekend, so I don't have a lot of time to blog today.  Instead I though that I would quickly provide links to a number of interesting articles that I have come across today for your enjoyment.  Have a great weekend everyone.

Quake Zone: The Natural Gas Industry’s Big Fracking Problem

Five small temblors this month have some people pointing the finger at technology that drilling companies use to reach deep into the earth to shatter rock and release new stores of natural gas — the same technology that has made many of the locals rich.

Zacks - J&J Remains Undervalued

We believe the shares remain undervalued given J&J's strong financial position and ability to post solid growth even in times of severe macroeconomic stress.

We reiterate our Buy recommendation and have established a price target of $70, yielding 24% before dividend (currently yielding 3.5%). Our price target implies a P/E multiple of 15.5x our 2009 EPS estimate of $4.51. 

Disclosure, I am long JNJ both in real life and CAPS

Mo. family Christmas photo turns up in Czech ad

A strange, funny article about how Missouri family's Christmas card photo ended up in the Czech Republic, splashed across a huge storefront advertisement.

Build An Emergency Fund To Avoid Financial Crisis

This is some of the best advise that anyone can give or take.  I know that it's tough for many to save money when the economy is in rough shape, but it is very important.  I am in the process of increasing the size of my family's cash emergency fund right now.  You never know when something like a medical emergency, layoff, broken fridge, etc... will happen and it's an amazing feeling to have a nice cushion when something does pop up.  Thanks to the Federal Reserve, I'm earning close to nothing in interest on my liquid assets and I don't care because the peace of mind that they provide me with is priceless.

Stockpiles Pressuring Nat'l Gas

An interesting Zacks article on natural gas and its currently high inventory level.  With drilling activity falling off of a cliff, I am bullish on nat gas over the next year despite the current high inventory level.  I completely agree with the following statement:

We continue to favor select E&P players, such as EOG Resources , XTO Energy and Chesapeake (NYSE: CHK - News) to play the natural gas sector. These companies have access to resource-rich assets, have attractive hedges in place and can profitably operate in a low-price environment.

We remain wary of land drillers, such Nabors (NYSE: NBR - News), and natural gas centric service providers such as BJ Services , given the extent of excess capacity in the sector that is expected to weigh on dayrates and margins well into next year. As such, we remain unconvinced of the sustainability of recent gains made the land drillers and other onshore U.S. centric service players.

Europe Lags as U.S. Economy Shows Signs of Recovery

Cheer up.  As bad as things are here, they're worse in Europe.

Auto Industry News

Mazda could boost dealer ranks with Chrysler, GM refugees

Some of the dealerships that have been abandoned by Chrysler and General Motors may not have to close their doors afterall.  Mazda is interested in signing some of them up to sell its products.

Ford’s Mulally sees U.S. economy improving in 2nd half

Ford Motor Co. CEO Alan Mulally said the U.S. economy is poised to improve in the second half of the year.

"We think we are right on track to start this recovery," Mulally told reporters today on the sidelines of an event promoting the 2010 Taurus sedan.

Any uptick in the U.S. economy would help U.S. vehicle sales to recover from a recession that has sent two U.S. automakers and at least eight auto-parts suppliers into bankruptcy this year.

U.S. industry sales for the first part of June were "a little better" than May, said the president of Ford's Americas unit, Mark Fields, who was also present at the event.

This is consistent with what I have heard from my industry contacts.  Sales will likely come in at 9.5 to 10 million vehicles for all of 2009.

Tax break for new-car buyers expands to all 50 states

The U.S. Treasury said today that it expanded its offer of a tax break on new car sales to those bought in states without a sales tax.

"This tax deduction not only increases support for the auto industry as it seeks to rebuild, but also puts money back into the pockets of hard-working Americans," said Neal Wolin, deputy treasury secretary.

Under the American Recovery and Reinvestment Act of 2009, taxpayers who bought a new vehicle this year were entitled to deduct state or local sales or excise taxes paid on the purchase.


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