By Sean Corey
Staff Writer
Housing starts plunged more than 16 percent compared to January of last year. Some economists and investors blamed much of this decrease on the cold weather. Others, however, say the poor housing data, along with low retail sales and mediocre job growth is a sign that there are underlying problems in the U.S. economy. Markets seemed to agree with the weather excuse. Both the DOW and the S&P 500 were up more than one-and-a-half percent in the past week. Earnings from large companies such as Goodyear and Metlife also boosted investor confidence.
This Week in SIMM
Long Fund: $256,850
Energy Fund: $283,300
GAINERS
Goodyear (GT) 10.26%
Chesapeake (CHK) 6.65%
Teva Pharm. (TEVA) 6.29%
Apache (APA) 3.79%
LOSERS
GNC Holdings (GNC) -14.05%
Harley-Davidson (HOG) -2.15%
Deere & Company (DE) -1.93%
Boeing (BA) -1.20%
Trading Activity
SELL
Computer Task Group (CTG),
Computer Task Group is an information technology solutions and staffing company headquartered in Buffalo, N.Y. A large portion of their business comes from providing Electronic Medical Records (EMRs) for hospitals and providing staff for companies including IBM. In fact, 23 percent of their revenue comes from IBM’s server business. When we originally bought CTG last January, we predicted that the new healthcare legislation, that provides an incentive for hospitals to implement EMRs, would have a positive impact on CTG. However the EMR legislation has been delayed on several occasions, and hospitals are strapped for cash. Additionally, IBM has been struggling to grow their server business which hurts CTG’s staffing solution division. CTG’s stock has fallen about 10 percent since our purchase and we expect the stock to be stagnant through 2014.
BUY
Phillips 66 (PSX)at $75.26,
Phillips 66 is a Dallas-based energy company that processes and transports oil and natural gas. Along with numerous refineries, Phillips 66 owns pipelines, railcars and gas compressors. Phillips 66 is investing in building an export terminal and new refineries. A new petroleum export terminal, set to become operational in 2015, will export more than 4 million barrels a month. Currently there are limits to how much raw oil can be exported out of the United States, but there is no limit on exports of refined oil products such as petroleum. Refined oil products are typically more expensive in Europe and Asia compared to the United States. Thus Phillips’ new projects, that will boost their refining and exports, will increase their earnings. Our target price is set at $79.84.
coreysm10@bonaventure.edu
