GOOG (Google, Inc.), the Bloodbath Begins

Google, Inc, is seeing a massive downgrading by investors so far in 2008. The massive losses are due in part to Google’s rutle tactics to dominate the internet community and their refusal to stick with what made them a household name. Google has diluted their business model to the point that it’s hard to say what industry they are actually in anymore.

All the rumors about enterprise applications to compete with Sun and IBM, all the rumors about a Goolge competitor to Apple’s iPhone and all of Google’s talk about rivaling eBay in the online auction market have many savvy brokers quetion which direction the company is headed in.

If you want a very realistic view of Google’s entering a decline after assuming a head and shoulders pattern followinf a bull run, please see my friend Dace’s post GOOG Drops 5% – Google Shareholders Taking a Beating. There’s no need for me to further elaborate on the positions he’s taken in the article Google’s meteoric rise and potential to be the biggest falling star the market has ever seen.

 

Purchasing Retail Stocks at the Holidays

I saw somebody asking this at a popular stock forum and I thought it would make a good topic for this blog….

Do stocks usually increase during Christmas time? Especially companies such as Best Buy or Sears that see an increase in sales during this special time Smile If so, which ones usually are good to invest in? Any strategies? Thanks for the help

It’s important to point out that retail stocks, while they may be a sustainable investment in the long run, do not generally benefit from a surge in sales at the holidays. Overall, their performance is grades on forcasted expectations and they have quarterly earning to meet up to. In the end, I’d say, no, it’s not a good idea to go buy retailer stocks before the holidays in hopes of a quick gain.

Another particular issue is that if the retailers are hitting a slump as they are this year it could spell a poor return on your investment. In my opinion, if you’re going to invest in retail stocks, go long, don’t go sort term on them and plan on holding them for a decent period of time.

 

Ticker: WU – Western Union Company (NYSE)

Ticker: WU – Western Union Company (NYSE)

This is a pretty interesting stock that I’ve been watching for several months and looking for specific buy and sell points.

The 52 Week Average: 17.96 – 23.99
The Average Volume: 4,961,190
1y Target Est: 26.18

If you look at the charts, WU has been rumbling around in this range for a year now and has had some excellent entry and exit point is you know when to hold and when to sell. The current movement puts this one at a buy in my opinion even though it appears to have hit a high and might follow on a downward trend.

One of the key factors for me with WU is the volume at which it has been trading and it’s history of hitting volume “spikes” that lend to it’s movement in a rather volatile pattern over a few days events.

Right now, I’d say this one is a strong buy when it crosses back down under the 21 per share range. (which it will probably do early next week because we can expect to see some more falling back in the market, so I will be watching WU for my strike price of 21 per share.

In my opinion the chrts show that WU is headed for a breakout into a higher trading range and many forecasters are predicting a growth etimate of 13.5% over the next year while the industry estimate for similar companies is 19.3% over the next year which shows that this is a particularly high growth sector.

Company Details
The Western Union Company provides a range of money transfer and bill payment services worldwide. It offers various consumer-to-consumer money transfer services, primarily through a network of third-party agents using multi-currency and real-time money transfer processing systems. Its consumer-to-consumer money transfer services primarily include walk-in money transfer services, online money transfer services, and telephone money transfer services.

Sector: Services
Industry: Personal Services
Full Time Employees: 5,900

Western Union Co.
12500 East Belford Avenue
Englewood, CO 80112
United States – Map
Phone: 866-405-5012
Fax: 720-332-4753
Web Site: http://www.westernunion.com

My Reasons for Watching WU
We all know Western Union is a leading money transfer service with locations worldwide. Their chief competitors are Moneygram, Paypal and the US Postal Service. That’s some heavy competition to be in league with. Western Union has been in business for over 150 years with more than 245,000 Western Union Agent locations in over 200 countries and territories. My chief interest in this stock is that with the flailing econmy and the ever increasing number of immigrants to the US who are wiring money back home, Western Union’s services are only going to be in higher demand. The company has had a history of turning profits especially during poor economic times or durinf times of political unrest and war. With the current economic conditions it’s only logical that the company’s business will continue to increase and they will continue to establish more locations and agents worldwide in the coming year.

 

Dividend Reinvestment Plans (DRIP)

Dividend Reinvestment Plans (DRIP) is an easy way to give the shareholders a great way to reinvest the dividends automatically buying additional shares of the companies stock. These DRIP accounts are a convenient and inexpensive way to accumulate wealth over time. Basically, A DRIP is when the company pays you its quarterly dividend; the dividend amount is exchanged into additional shares every quarter for the convenience of the Drip members like yourself.

These plans are easy to join. Simply call the company usually the investors relations division and have them send you the forms for the DRIP program, fill them out and send them back. You can also look up the companies on their website. Go to the investor’s part of the site. There is a lot of information there for your convenience.

Once you are in the plan, the number of shares you hold will accumulate with each passing dividend date. Thus, no expensive brokerage fees, usually a small percentage of the shares bought for the quarter. Some companies offer to the public the initial stock purchase, sometimes called a DSP (Direct Stock Purchase); otherwise you have to use a broker to buy your first few shares. Look around and do not forget to ask.

Through the plan, extra cash deposits can be sent in to acquire more shares. Make sure to find out the dates that the company reinvests. Sometimes it is weekly or at least monthly. This is very important. Send in your money, usually a check, to the company several days before the deadline, not several weeks. Find out the quarterly date that the company declares dividends. Ideally, send in a check to buy shares right before the dividend date is the secret to get the best market timing. It is called buying a dividend as long as these shares are “on record” before the company declares the dividend.

Keep track of these dates. Companies declare dividends on a quarterly basis. Every three months and four times a year. Quarterly cycles are different depending upon the company. For instance, Telephone companies like T reinvest at the first of the month of February, May, August and November, (2,5,8,11). Other companies, have a (3,6,9,12) cycle and there is a (1,4,7,10) cycle also. This may not mean much right now, but is very important when you need the income later in life. Ideally you can get a check every month given the arrangement of your portfolio. This is why you need to estimate your monthly needs for mainly retirement and organize accordingly. These cycles are also important when buying dividends. Each month send in your money to enhance that particular cycle.

Cash optional payments as they are called, depending upon the company, offer different minimum amounts. Many are 25 dollars, but the amount does vary. Keep track of your companies and the amounts. When you have a few dollars, the share price looks about right, buy some more to add to your plan. Do not be so concerned with buying whole shares because the company will purchase fractional shares. It all adds up in the long run. Do send in as much as you can and use the dates, cycles and or the stock price to maximize your money.

Every quarter you will receive a Statement of Account from the company. It is very important to keep these. Be smart and put them in a folder and keep them all together. Also, buy yourself a hardbound memo book for keeping records.