Donnerstag, 24. März 2011
Shaw Capital Management: NBR for March 18, 2011 - Full Episode | Nightly Business Report | PBS
Japan, Libya and U.S. Oil Futures
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: President Obama put Libya on notice today saying the U.S. and its allies are ready for military action. Tom, the president`s message was clearly aimed at Libyan leader Moammar Gadhafi.
TOM HUDSON, NIGHTLY BUSINESS REPORT ANCHOR: It sure was Susie. It was one of the most direct and forceful statements from President Obama on Libya. He said Gadhafi must end the violence and pull back troops from towns under attack.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me be clear, these terms are not negotiable. These terms are not subject to negotiation. If Gadhafi does not comply with the resolution, the international community will impose consequences and the resolution will be enforced through military action.
GHARIB: Ahead of the president`s warning, Libya said it`s ceasing all military action and will begin talking with opposition groups. That came after a vote at the United Nations calling for a no-fly zone over the country. Not surprisingly, oil markets were volatile today. Crude prices closed down $0.35 to settle at $101 a barrel, off their high of $103. As Suzanne Pratt reports, the oil market is coping with a long list of issues.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: In the past week, much of the world has been fixated on Japan, with one exception. The global oil market is paying much more attention to bubbling conflict in North Africa and the Middle East. Oil trader John Woods says right now all eyes are on Libya.
JOHN WOODS, ENERGY TRADER, JJ WOODS ASSOCIATES: You look at Gadhafi like, all right, listen, we`re going to go in there and start bombing you if you don`t knock it off. All of the sudden he says, OK -- oil drops three bucks, but nobody really believes him.
PRATT: And traders worry supply disruptions won`t end with Libya. Trouble is brewing in Bahrain, Iran and Saudi Arabia, all big suppliers of oil. Oil expert John Kilduff says conflict in any of those countries would have a huge impact on crude oil prices.
JOHN KILDUFF, PARTNER, AGAIN CAPITAL: If we see the situation in Saudi Arabia in particular worsen, if the protests in the Shia-dominated eastern region where the oil is produced escalates, all bets are off. We could easily see $150, $200 oil on increasing fears there.
PRATT: Still, traders say oil prices would be much higher today if there hadn`t been the earthquake and tsunami in Japan. Yes, in the short- term, Japanese demand for diesel fuel to power generators is expected to pick up. But, experts predict overall Japanese oil demand will be constrained for months, if not years.
KILDUFF: Stepping back you have to accept the fact that their economy is going to be damaged from this, that they will be knocked off their block for a while and it will take some time to come back.
PRATT: Experts also predict energy markets worldwide will be extremely volatile this year, not to mention dominated by the headlines.
WOODS: It`s tough to talk about a technical market because you can throw that stuff pretty much out the window. You have to pay attention to the news.
PRATT: All this turmoil in the Middle East comes at a particularly bad time for U.S. consumers. We are just weeks away from the start of peak driving season, which fuels demand and undoubtedly prices at the pump. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
Japan Disaster One Week Later
TOM HUDSON: The latest now from Japan, the nuclear troubles there remain in limbo tonight as engineers battle to cool spent fuel rods at the Dai- ichi power plant. They have put a new electric line in place and hope to make progress at the plant`s reactors over the weekend. While the nuclear situation unfolds moment by moment, Japan continues its massive rescue and recovery effort. Lucy Craft reports from Tokyo.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s been one week since Japan`s nightmare began and Tokyo`s normally bustling streets are darkened and quiet. A draconian energy conservation campaign -- triggered by the nuclear plant crisis -- has made travel difficult and forced the country to turn down the lights. To save electricity and because of continuing powerful aftershocks and anxiety over the threat of radiation contamination, leisure and entertainment has been sidelined. Shopping malls are deserted. Customers are staying home in droves, glued to their TV sets and the ongoing power plant disaster. How that drama resolves itself remains uncertain. What is likely is that Japan -- one of the world`s top nuclear power nations -- may at last be abandoning its love affair with atomic energy. Japan`s conservative party leader said this week that siting future plants will be extremely difficult, a conclusion the center- left ruling party called extremely obvious. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
Bank Dividends Are Back
TOM HUDSON: Remember bank dividends? They`re back. The Federal Reserve today gave some of the nation`s biggest banks the OK to pay investors more money, but only at banks that passed a financial stress test. Some analysts think those dividends are heading higher. But as Darren Gersh reports tonight, there is a limit.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Federal regulators did not sound the all clear on banking today. The stress test results were more like a cautious so far, so good, according to analysts like Karen Shaw Petrou.
KAREN SHAW PETROU, MANAGING PARTNER,FEDERAL FINANCIAL ANALYTICS: It is a signal that the banking system is beginning to get off the mat. I don`t think it is anywhere close to up and running yet.
GERSH: Since the crisis brought the industry to the brink of failure, the Federal Reserve says the nation`s 19 biggest banks have almost doubled a key capital ratio from 5 percent to more than 9 percent of assets -- a $300 billion swing. Regulators found big banks have enough capital to survive a scenario where unemployment climbs back to double digits and the economy falls back into recession this year. Banks that cleared the regulatory hurdle can now use some of their money to reward their investors, a move seen as a key step in healing the financial system.
PETROU: To make new loans, you have to have capital. To have capital, you have to have investors. To have investors, you have to give them something for their money and that`s dividends.
GERSH: Five banks announced dividend hikes today. JPMorgan, Wells Fargo (NYSE: WFC), U.S. Bancorp (NYSE: USB) and State Street (NYSE: STT) say they`ll also buy back some of their shares. But the good news has its limits. The Federal Reserve has effectively restricted dividend payouts to 30 percent of earnings and those dividends may face more risk than in the past, says Morningstar (NASDAQ: MORN)`s Jim Sinegal.
JIM SINEGAL, ASSOC DIR, RESEARCH MORNINGSTAR: If the economy starts to turn down again, I think regulators have given themselves a lot more leeway now to tell the banks to pull back and not pay out so much. So it`s possible that if the economy heads down again, these dividends that we`re seeing now could end up going away once more.
GERSH: Sinegal expects the strongest banks to raise dividends in the coming year. The payouts are still well short of the levels in the boom years, but Credit Suisse analyst Moshe Orenbuch says regulators are now drawing distinctions based on performance.
MOSHE ORENBUCH, BANKING ANALYST, CREDIT SUISSE: There are going to be haves and have nots among the banks. Some will be better than others. The Fed actually tried real hard in the last stress test in May of 2009 to kind of keep everyone sort of on an equal footing and so I think the stronger banks will actually do better as a result.
GERSH: One big investor has some reason to be happy with the results of today`s stress test. Warren Buffett injected capital into Goldman Sachs at the height of the financial crisis. Today Goldman got the green light to buy out that investment, handing Buffett a roughly 70 percent return. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
Steinberg Is Focused On Middle East, Not Japan
SUSIE GHARIB: Our "Market Monitor" tonight says his biggest concern is what`s going on in the Middle East, not Japan. Joining us now, Richard Steinberg, president of Steinberg Global Asset Management. Hi, Rich.
RICHARD STEINBERG, PRES., STEINBERG GLOBAL ASSET MANAGEMENT: Good to see you Susie.
GHARIB: Well, let`s start out by talking about how the situation in the Middle East is impacting your investment strategy.
STEINBERG: Sure, Gadhafi today said that he would take a step back from annihilating the rebels and he said (INAUDIBLE) before so oil took a step back, but he`s no fool. He did this to give himself a break. If we really end up with an increased problem in Libya and oil spikes, it could really create disruption in the market. Right now we think there`s about a 15 percent premium to the Libyan Bahraini Saudi problems. So it`s something that we`re watching very closely.
GHARIB: You have five stocks that you`re still recommending in this environment. Let`s get right to it and at the top of your list, you have Ford, Ford Motor, which is one of the stocks you recommended a year ago when you came on the program. Why do you like it?
STEINBERG: They`re clicking. It`s amazing. When you make cars that people want to buy, earnings go up. They`re going to earn $2 this year. We have a $24 target. We think that they`re just entering their sweet spot.
GHARIB: All right, so nice move on that from $14 where it is now. Tell us about Itron (NASDAQ: ITRI). This is ticker symbol ITRA. What`s the story there?
STEINBERG: Itron (NASDAQ: ITRI) makes the smart meters that go on the side of your house for electricity and natural gas and for water. And it`s an efficiency energy play. They`re going to earn $4 next year. It`s really, really cheap and we think that there`s a lot of upside to that, may have an $80 target.
GHARIB: Hewlett-Packard (NYSE: HPQ) is on your list and here`s a company that`s been having a really rocky time. Stock has been struggling. Why are you recommending HPQ?
STEINBERG: We think the market is over reactive. It`s trading at 7.5 times earnings. They have a new CEO that`s a show me CEO. But 7.5 times earnings, you really have an opportunity to buy a really great global name cheap.
GHARIB: And what target price do you have?
STEINBERG: We have a $55 target.
GHARIB: So there`s still room to grow there. Tell us about your next stock, CIT Group (NYSE: CIT). This is the financial services, ticker symbol CIT. John Thain, who used to be the CEO of the New York Stock Exchange has been the CEO there for a while. Tell us why you like the stock trading at $42.
STEINBERG: It`s got a $46 book value. This was a prearranged bankruptcy. They have lots of earning power. The credit cycle is just starting to turn. And there`s probably 20 percent upside to this name.
GHARIB: And the fifth stock you`re recommending is Nestle. We know what that company makes. Tell us why you like it.
STEINBERG: When people are stressed, they eat chocolate, right.
GHARIB: We`re all stressed.
STEINBERG: We think there`s 15 percent upside. It`s a great global brand. The commodity price has eased, especially in sugar. We think they`ll have a lot of leverage to their earnings. And it`s a name, especially with the rockiness in Europe, something you can buy really cheap right now.
GHARIB: Let`s quickly go over the four stocks you recommended a year ago when you were here and look at them, International Assets Holding (NASDAQ: IAAC), Ford Motor, Lowes Companies and a ETF for Korean stocks. All of them up from a year ago. What are your thoughts? Do you still own these? You told me about Ford, so what about the others?
STEINBERG: We own International Asset Holdings, great commodity (INAUDIBLE). We continue to hold it. We`ve taken some money off the table in Korea, especially with what`s going on in Japan now. It`s probably something we`ll reinvest again to buy back. And Lowes, we`ve owned it. It hasn`t really done much. We`re being patient and we`ll just see how the housing cycle starts to turn. I don`t own any of these names that we mentioned tonight, but our firm owns them all.
GHARIB: OK. You answered all the questions quickly, gave us a lot to think about it. Thanks a lot Rich, have a great weekend.
STEINBERG: And our prayers go out to the people of Japan.
GHARIB: All right. Thank you so much. And we`ve been speaking with Richard Steinberg, president of Steinberg Global Asset Management.
Apprentice School Education
SUSIE GHARIB: Here`s a dilemma for the job market: not enough job openings and where there is an opening, often there aren`t enough highly skilled workers to fill that job. To get around that problem some companies are following a centuries-old tradition: apprenticeships. Anna Olson takes us to Northrop Grumman (NYSE: NOC)`s apprentice school for shipbuilding.
ANNA OLSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Kimberly Jarvis is learning how to build parts that fit into aircraft carriers and nuclear submarines.
KIMBERLY JARVIS, APPRENTICE, NORTHROP GRUMMAN: This is a theory class that we go through during the apprenticeship program where we learn how to put different angles and bends in the pipe.
OLSON: Jarvis is one of more than 700 students enrolled in Northrop Grumman (NYSE: NOC)`s apprentice school. Apprentices in this program are full-time, paid employees who also take academic classes at the shipyard and local community colleges.
JARVIS: I realized that I could be a better asset to the company coming through the apprenticeship program and so far, it`s going awesome.
OLSON: The apprentices here are learning skills like pipe fitting and surveying -- skills that, for many, could lead to long-term jobs. Seventy percent of all Northrop Grumman (NYSE: NOC) apprentices are still with the company 15 years later.
EVERETT JORDAN, DIRECTOR, APPRENTICE SCHOOL: We remember when there were apprentices learning how to be gunsmiths and work with leather and do all of the things that were necessary in colonial times. I would tell you that it`s not that much different today.
OLSON: Everett Jordan, a former apprentice, is now director of a program that began in 1919. He says students learn leadership skills and the know-how to produce highly specialized equipment for the Defense Department.
JORDAN: It`s a great opportunity to select the best and the brightest and continue to educate them in craftsmanship, scholarship and leadership.
OLSON: The Obama administration has discussed the need to expand apprentice programs like this one across the country. But so far, many companies have been unwilling to invest in training. Apprentice graduates like Andrew Balarabe say employers might want to start.
ANDREW BALARABE, APPRENTICE SCHOOL GRADUATE, NORTHROP GRUMMAN: I think it should be contagious. Other companies need to realize, hey, let`s have these old guys that are getting ready to retire, let`s train the younger guys.
OLSON: Balarabe graduated from the program last month. He used to be a mechanic, but didn`t see a career in it. Now he`s an accomplished welder finishing his associate`s degree.
BALARABE: I see myself staying with this company for a very long time. I have a bright future.
OLSON: Northrop Grumman (NYSE: NOC) doesn`t require workers to stick around after training. Instead, the company says it creates competitive opportunities that entice them to stay. Apprentice grad Jerome Hashagen says that philosophy works.
JEROME HASHEGAN, APPRENTICE SCHOOL GRADUATE: It builds loyalty to a company where you`re not just job shopping all the time, looking for another company that pays a few dollars more an hour. It just becomes part of you.
OLSON: That kind of future is appealing to many, so much so the company gets 100 applications a week for the program. Anna Olson, NIGHTLY BUSINESS REPORT, Newport (NASDAQ: NEWP) News, Virginia.
Market Focus with Tom Hudson
SUSIE GHARIB: The Dow rose almost 84 points, the NASDAQ added seven, the S&P 500 up five. As for trading volume, almost two billion shares moved on the big board, over 2.5 billion on the NASDAQ.
TOM HUDSON: Lots of big headlines for the market this week, marked by nuclear fears in Japan, more tension rising in Libya, really putting investors worldwide on edge. For the week, here are the Dow Industrials, falling 1.5 percent. The gains today and yesterday just simply not enough to make up for the losses earlier in the week especially from Wednesday. The NASDAQ meantime dropped 2.7 percent from a week ago tonight. The NASDAQ remains in negative territory for the year. The S&P 500 off 1.9 percent compared to a week ago. Consumer staple stocks the biggest drag on the index this week.
Leading the sector gains today, no surprise it was financials. We`re going to roll out the exchange-traded fund, XLF, bouncing more than 1 percent, volume, it was triple its normal pace. Big banks took the lead after the Federal Reserve gave many of them the blessing to hike dividends and start stock buybacks as Darren reported. Now he did mention of course that JPMorgan was among the first to announce a big dividend increase and a stock buyback. Look at JPMorgan here, the last year we go and we`re off by 2.6 percent today. In fact it`s just today now we`re back to where the stock was one week ago. Other banks stocks jumping, Sun Trust up almost 5 percent. Goldman Sachs, Darren mentioned that one, up 3 percent today. Bank of America (NYSE: BAC) shares, though, kind of dragging, up just a fraction. It did not request permission from the Fed to raise its dividend in the second quarter.
Now Caterpillar (NYSE: CAT) continued adding to some recent gains here. We`re going to roll out the last 90-sessions. Look at this move. We`ve gone from $80 to over $105 just a few months ago. It`s the best performing Dow Jones Industrial stock this week. The most recent low came just a day before the Japanese disaster. Today Caterpillar (NYSE: CAT) said global dealer sales were up 59 percent in the three months ending in February. Shares up by almost 2 percent, leading the Dow.
Cigarette maker Lorillard (NYSE: LO) meantime popped 11 percent, seven times its usual volume. Look at this move higher. It takes up back to levels we haven`t seen since last fall when the Food and Drug Administration panel saying menthol cigarettes, removing them from the U.S. market would help public health. The panel did not recommend banning menthols, perhaps a bit of a relief rally. About 90 percent of its sales come from menthol cigarettes.
Starbucks (NASDAQ: SBUX) is becoming just the latest consumer company to raise prices, announcing today that it`s going to move its coffee prices higher. Shares though really just a fractional loss, but they were very active. It`s hiking grocery store coffee bean prices by 12 percent. The executive blames speculators on higher coffee prices.
Just one new stock to get you updated on this week, an IPO from Cornerstone OnDemand. It priced at $13 per share. But its first trade was over $19 per share today, so the stock actually closed lower. Cornerstone by the way is a human resources software provider.
And that is tonight`s "Market Focus."
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: President Obama put Libya on notice today saying the U.S. and its allies are ready for military action. Tom, the president`s message was clearly aimed at Libyan leader Moammar Gadhafi.
TOM HUDSON, NIGHTLY BUSINESS REPORT ANCHOR: It sure was Susie. It was one of the most direct and forceful statements from President Obama on Libya. He said Gadhafi must end the violence and pull back troops from towns under attack.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me be clear, these terms are not negotiable. These terms are not subject to negotiation. If Gadhafi does not comply with the resolution, the international community will impose consequences and the resolution will be enforced through military action.
GHARIB: Ahead of the president`s warning, Libya said it`s ceasing all military action and will begin talking with opposition groups. That came after a vote at the United Nations calling for a no-fly zone over the country. Not surprisingly, oil markets were volatile today. Crude prices closed down $0.35 to settle at $101 a barrel, off their high of $103. As Suzanne Pratt reports, the oil market is coping with a long list of issues.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: In the past week, much of the world has been fixated on Japan, with one exception. The global oil market is paying much more attention to bubbling conflict in North Africa and the Middle East. Oil trader John Woods says right now all eyes are on Libya.
JOHN WOODS, ENERGY TRADER, JJ WOODS ASSOCIATES: You look at Gadhafi like, all right, listen, we`re going to go in there and start bombing you if you don`t knock it off. All of the sudden he says, OK -- oil drops three bucks, but nobody really believes him.
PRATT: And traders worry supply disruptions won`t end with Libya. Trouble is brewing in Bahrain, Iran and Saudi Arabia, all big suppliers of oil. Oil expert John Kilduff says conflict in any of those countries would have a huge impact on crude oil prices.
JOHN KILDUFF, PARTNER, AGAIN CAPITAL: If we see the situation in Saudi Arabia in particular worsen, if the protests in the Shia-dominated eastern region where the oil is produced escalates, all bets are off. We could easily see $150, $200 oil on increasing fears there.
PRATT: Still, traders say oil prices would be much higher today if there hadn`t been the earthquake and tsunami in Japan. Yes, in the short- term, Japanese demand for diesel fuel to power generators is expected to pick up. But, experts predict overall Japanese oil demand will be constrained for months, if not years.
KILDUFF: Stepping back you have to accept the fact that their economy is going to be damaged from this, that they will be knocked off their block for a while and it will take some time to come back.
PRATT: Experts also predict energy markets worldwide will be extremely volatile this year, not to mention dominated by the headlines.
WOODS: It`s tough to talk about a technical market because you can throw that stuff pretty much out the window. You have to pay attention to the news.
PRATT: All this turmoil in the Middle East comes at a particularly bad time for U.S. consumers. We are just weeks away from the start of peak driving season, which fuels demand and undoubtedly prices at the pump. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
Japan Disaster One Week Later
TOM HUDSON: The latest now from Japan, the nuclear troubles there remain in limbo tonight as engineers battle to cool spent fuel rods at the Dai- ichi power plant. They have put a new electric line in place and hope to make progress at the plant`s reactors over the weekend. While the nuclear situation unfolds moment by moment, Japan continues its massive rescue and recovery effort. Lucy Craft reports from Tokyo.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s been one week since Japan`s nightmare began and Tokyo`s normally bustling streets are darkened and quiet. A draconian energy conservation campaign -- triggered by the nuclear plant crisis -- has made travel difficult and forced the country to turn down the lights. To save electricity and because of continuing powerful aftershocks and anxiety over the threat of radiation contamination, leisure and entertainment has been sidelined. Shopping malls are deserted. Customers are staying home in droves, glued to their TV sets and the ongoing power plant disaster. How that drama resolves itself remains uncertain. What is likely is that Japan -- one of the world`s top nuclear power nations -- may at last be abandoning its love affair with atomic energy. Japan`s conservative party leader said this week that siting future plants will be extremely difficult, a conclusion the center- left ruling party called extremely obvious. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
Bank Dividends Are Back
TOM HUDSON: Remember bank dividends? They`re back. The Federal Reserve today gave some of the nation`s biggest banks the OK to pay investors more money, but only at banks that passed a financial stress test. Some analysts think those dividends are heading higher. But as Darren Gersh reports tonight, there is a limit.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Federal regulators did not sound the all clear on banking today. The stress test results were more like a cautious so far, so good, according to analysts like Karen Shaw Petrou.
KAREN SHAW PETROU, MANAGING PARTNER,FEDERAL FINANCIAL ANALYTICS: It is a signal that the banking system is beginning to get off the mat. I don`t think it is anywhere close to up and running yet.
GERSH: Since the crisis brought the industry to the brink of failure, the Federal Reserve says the nation`s 19 biggest banks have almost doubled a key capital ratio from 5 percent to more than 9 percent of assets -- a $300 billion swing. Regulators found big banks have enough capital to survive a scenario where unemployment climbs back to double digits and the economy falls back into recession this year. Banks that cleared the regulatory hurdle can now use some of their money to reward their investors, a move seen as a key step in healing the financial system.
PETROU: To make new loans, you have to have capital. To have capital, you have to have investors. To have investors, you have to give them something for their money and that`s dividends.
GERSH: Five banks announced dividend hikes today. JPMorgan, Wells Fargo (NYSE: WFC), U.S. Bancorp (NYSE: USB) and State Street (NYSE: STT) say they`ll also buy back some of their shares. But the good news has its limits. The Federal Reserve has effectively restricted dividend payouts to 30 percent of earnings and those dividends may face more risk than in the past, says Morningstar (NASDAQ: MORN)`s Jim Sinegal.
JIM SINEGAL, ASSOC DIR, RESEARCH MORNINGSTAR: If the economy starts to turn down again, I think regulators have given themselves a lot more leeway now to tell the banks to pull back and not pay out so much. So it`s possible that if the economy heads down again, these dividends that we`re seeing now could end up going away once more.
GERSH: Sinegal expects the strongest banks to raise dividends in the coming year. The payouts are still well short of the levels in the boom years, but Credit Suisse analyst Moshe Orenbuch says regulators are now drawing distinctions based on performance.
MOSHE ORENBUCH, BANKING ANALYST, CREDIT SUISSE: There are going to be haves and have nots among the banks. Some will be better than others. The Fed actually tried real hard in the last stress test in May of 2009 to kind of keep everyone sort of on an equal footing and so I think the stronger banks will actually do better as a result.
GERSH: One big investor has some reason to be happy with the results of today`s stress test. Warren Buffett injected capital into Goldman Sachs at the height of the financial crisis. Today Goldman got the green light to buy out that investment, handing Buffett a roughly 70 percent return. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
Steinberg Is Focused On Middle East, Not Japan
SUSIE GHARIB: Our "Market Monitor" tonight says his biggest concern is what`s going on in the Middle East, not Japan. Joining us now, Richard Steinberg, president of Steinberg Global Asset Management. Hi, Rich.
RICHARD STEINBERG, PRES., STEINBERG GLOBAL ASSET MANAGEMENT: Good to see you Susie.
GHARIB: Well, let`s start out by talking about how the situation in the Middle East is impacting your investment strategy.
STEINBERG: Sure, Gadhafi today said that he would take a step back from annihilating the rebels and he said (INAUDIBLE) before so oil took a step back, but he`s no fool. He did this to give himself a break. If we really end up with an increased problem in Libya and oil spikes, it could really create disruption in the market. Right now we think there`s about a 15 percent premium to the Libyan Bahraini Saudi problems. So it`s something that we`re watching very closely.
GHARIB: You have five stocks that you`re still recommending in this environment. Let`s get right to it and at the top of your list, you have Ford, Ford Motor, which is one of the stocks you recommended a year ago when you came on the program. Why do you like it?
STEINBERG: They`re clicking. It`s amazing. When you make cars that people want to buy, earnings go up. They`re going to earn $2 this year. We have a $24 target. We think that they`re just entering their sweet spot.
GHARIB: All right, so nice move on that from $14 where it is now. Tell us about Itron (NASDAQ: ITRI). This is ticker symbol ITRA. What`s the story there?
STEINBERG: Itron (NASDAQ: ITRI) makes the smart meters that go on the side of your house for electricity and natural gas and for water. And it`s an efficiency energy play. They`re going to earn $4 next year. It`s really, really cheap and we think that there`s a lot of upside to that, may have an $80 target.
GHARIB: Hewlett-Packard (NYSE: HPQ) is on your list and here`s a company that`s been having a really rocky time. Stock has been struggling. Why are you recommending HPQ?
STEINBERG: We think the market is over reactive. It`s trading at 7.5 times earnings. They have a new CEO that`s a show me CEO. But 7.5 times earnings, you really have an opportunity to buy a really great global name cheap.
GHARIB: And what target price do you have?
STEINBERG: We have a $55 target.
GHARIB: So there`s still room to grow there. Tell us about your next stock, CIT Group (NYSE: CIT). This is the financial services, ticker symbol CIT. John Thain, who used to be the CEO of the New York Stock Exchange has been the CEO there for a while. Tell us why you like the stock trading at $42.
STEINBERG: It`s got a $46 book value. This was a prearranged bankruptcy. They have lots of earning power. The credit cycle is just starting to turn. And there`s probably 20 percent upside to this name.
GHARIB: And the fifth stock you`re recommending is Nestle. We know what that company makes. Tell us why you like it.
STEINBERG: When people are stressed, they eat chocolate, right.
GHARIB: We`re all stressed.
STEINBERG: We think there`s 15 percent upside. It`s a great global brand. The commodity price has eased, especially in sugar. We think they`ll have a lot of leverage to their earnings. And it`s a name, especially with the rockiness in Europe, something you can buy really cheap right now.
GHARIB: Let`s quickly go over the four stocks you recommended a year ago when you were here and look at them, International Assets Holding (NASDAQ: IAAC), Ford Motor, Lowes Companies and a ETF for Korean stocks. All of them up from a year ago. What are your thoughts? Do you still own these? You told me about Ford, so what about the others?
STEINBERG: We own International Asset Holdings, great commodity (INAUDIBLE). We continue to hold it. We`ve taken some money off the table in Korea, especially with what`s going on in Japan now. It`s probably something we`ll reinvest again to buy back. And Lowes, we`ve owned it. It hasn`t really done much. We`re being patient and we`ll just see how the housing cycle starts to turn. I don`t own any of these names that we mentioned tonight, but our firm owns them all.
GHARIB: OK. You answered all the questions quickly, gave us a lot to think about it. Thanks a lot Rich, have a great weekend.
STEINBERG: And our prayers go out to the people of Japan.
GHARIB: All right. Thank you so much. And we`ve been speaking with Richard Steinberg, president of Steinberg Global Asset Management.
Apprentice School Education
SUSIE GHARIB: Here`s a dilemma for the job market: not enough job openings and where there is an opening, often there aren`t enough highly skilled workers to fill that job. To get around that problem some companies are following a centuries-old tradition: apprenticeships. Anna Olson takes us to Northrop Grumman (NYSE: NOC)`s apprentice school for shipbuilding.
ANNA OLSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Kimberly Jarvis is learning how to build parts that fit into aircraft carriers and nuclear submarines.
KIMBERLY JARVIS, APPRENTICE, NORTHROP GRUMMAN: This is a theory class that we go through during the apprenticeship program where we learn how to put different angles and bends in the pipe.
OLSON: Jarvis is one of more than 700 students enrolled in Northrop Grumman (NYSE: NOC)`s apprentice school. Apprentices in this program are full-time, paid employees who also take academic classes at the shipyard and local community colleges.
JARVIS: I realized that I could be a better asset to the company coming through the apprenticeship program and so far, it`s going awesome.
OLSON: The apprentices here are learning skills like pipe fitting and surveying -- skills that, for many, could lead to long-term jobs. Seventy percent of all Northrop Grumman (NYSE: NOC) apprentices are still with the company 15 years later.
EVERETT JORDAN, DIRECTOR, APPRENTICE SCHOOL: We remember when there were apprentices learning how to be gunsmiths and work with leather and do all of the things that were necessary in colonial times. I would tell you that it`s not that much different today.
OLSON: Everett Jordan, a former apprentice, is now director of a program that began in 1919. He says students learn leadership skills and the know-how to produce highly specialized equipment for the Defense Department.
JORDAN: It`s a great opportunity to select the best and the brightest and continue to educate them in craftsmanship, scholarship and leadership.
OLSON: The Obama administration has discussed the need to expand apprentice programs like this one across the country. But so far, many companies have been unwilling to invest in training. Apprentice graduates like Andrew Balarabe say employers might want to start.
ANDREW BALARABE, APPRENTICE SCHOOL GRADUATE, NORTHROP GRUMMAN: I think it should be contagious. Other companies need to realize, hey, let`s have these old guys that are getting ready to retire, let`s train the younger guys.
OLSON: Balarabe graduated from the program last month. He used to be a mechanic, but didn`t see a career in it. Now he`s an accomplished welder finishing his associate`s degree.
BALARABE: I see myself staying with this company for a very long time. I have a bright future.
OLSON: Northrop Grumman (NYSE: NOC) doesn`t require workers to stick around after training. Instead, the company says it creates competitive opportunities that entice them to stay. Apprentice grad Jerome Hashagen says that philosophy works.
JEROME HASHEGAN, APPRENTICE SCHOOL GRADUATE: It builds loyalty to a company where you`re not just job shopping all the time, looking for another company that pays a few dollars more an hour. It just becomes part of you.
OLSON: That kind of future is appealing to many, so much so the company gets 100 applications a week for the program. Anna Olson, NIGHTLY BUSINESS REPORT, Newport (NASDAQ: NEWP) News, Virginia.
Market Focus with Tom Hudson
SUSIE GHARIB: The Dow rose almost 84 points, the NASDAQ added seven, the S&P 500 up five. As for trading volume, almost two billion shares moved on the big board, over 2.5 billion on the NASDAQ.
TOM HUDSON: Lots of big headlines for the market this week, marked by nuclear fears in Japan, more tension rising in Libya, really putting investors worldwide on edge. For the week, here are the Dow Industrials, falling 1.5 percent. The gains today and yesterday just simply not enough to make up for the losses earlier in the week especially from Wednesday. The NASDAQ meantime dropped 2.7 percent from a week ago tonight. The NASDAQ remains in negative territory for the year. The S&P 500 off 1.9 percent compared to a week ago. Consumer staple stocks the biggest drag on the index this week.
Leading the sector gains today, no surprise it was financials. We`re going to roll out the exchange-traded fund, XLF, bouncing more than 1 percent, volume, it was triple its normal pace. Big banks took the lead after the Federal Reserve gave many of them the blessing to hike dividends and start stock buybacks as Darren reported. Now he did mention of course that JPMorgan was among the first to announce a big dividend increase and a stock buyback. Look at JPMorgan here, the last year we go and we`re off by 2.6 percent today. In fact it`s just today now we`re back to where the stock was one week ago. Other banks stocks jumping, Sun Trust up almost 5 percent. Goldman Sachs, Darren mentioned that one, up 3 percent today. Bank of America (NYSE: BAC) shares, though, kind of dragging, up just a fraction. It did not request permission from the Fed to raise its dividend in the second quarter.
Now Caterpillar (NYSE: CAT) continued adding to some recent gains here. We`re going to roll out the last 90-sessions. Look at this move. We`ve gone from $80 to over $105 just a few months ago. It`s the best performing Dow Jones Industrial stock this week. The most recent low came just a day before the Japanese disaster. Today Caterpillar (NYSE: CAT) said global dealer sales were up 59 percent in the three months ending in February. Shares up by almost 2 percent, leading the Dow.
Cigarette maker Lorillard (NYSE: LO) meantime popped 11 percent, seven times its usual volume. Look at this move higher. It takes up back to levels we haven`t seen since last fall when the Food and Drug Administration panel saying menthol cigarettes, removing them from the U.S. market would help public health. The panel did not recommend banning menthols, perhaps a bit of a relief rally. About 90 percent of its sales come from menthol cigarettes.
Starbucks (NASDAQ: SBUX) is becoming just the latest consumer company to raise prices, announcing today that it`s going to move its coffee prices higher. Shares though really just a fractional loss, but they were very active. It`s hiking grocery store coffee bean prices by 12 percent. The executive blames speculators on higher coffee prices.
Just one new stock to get you updated on this week, an IPO from Cornerstone OnDemand. It priced at $13 per share. But its first trade was over $19 per share today, so the stock actually closed lower. Cornerstone by the way is a human resources software provider.
And that is tonight`s "Market Focus."
Shaw Capital Management Scam Info: Shaw Management Tips on Identity Theft
Fraud committed by a criminal who has stolen someone else’s identity is identity fraud usually used online and some boiler room management scams.
Fraud committed by a criminal who has stolen someone else’s identity is identity fraud usually used online and some boiler room management scams. By stealing documents such as your passport, driving license or bank statements - or online ID, such as usernames, passwords and personal security questions - thieves can now take cash from your accounts, commit benefit fraud, or take out new credit cards or loans, all in your name. Online frauds that sucker victims into revealing crucial private data, known as ‘phishing’ scams, are becoming more common. But for most people, the greater danger still lies in more old-fashioned methods: burglars who steal documents and chequebooks; fraudsters who intercept your post; and even thieves who dredge through bin bags.
Shaw Capital will give you tips on how big is the problem nowadays on online scams and fraud. In the UK, more than 70,000 people were victims last year, according to figures from the Credit Industry Fraud Avoidance Service (CIFAS). Given the large number of cases, the sums involved are hardly huge - the Association for Payment Clearing Services puts the total taken by identity fraudsters last year at £37m, but this is a 66% jump on the previous year. However, they calculate the overall cost to the economy - including the time and money spent by banks in combatting the crime - is a massive £1.3bn.
Caution is the key. Shaw Capital and its management always emphasize to read bank and credit-card statements carefully and check against receipts. If you have any worries, tell the bank concerned straightaway; scammers often test the water with a small transaction first before attempting a larger theft. Check your credit report often for any credit requests not made by you. Shred statements, bills and even direct mail; these all contain vital personal information. Register with the Mailing Preference Service (0845-703 4599, www.mpsonline.org.uk) to stop junk mail and get mail redirected when you move home. Leave all unnecessary credit cards and ID at home when you go out, but do not leave key documents together in one place easily accessible to a burglar. Use different PINs and passwords for different accounts, and never disclose your full PIN or password in an e-mail or over the phone, even if you think you are talking to a bank employee.
Report the suspected crime to the police and ask for a crime reference number, which you will need to recover any losses. Also, spend £11.75 on the protective registration service offered by fraud prevention service CIFAS (0870-010 2091, www.cifas.org.uk). They will place a notice on your credit file warning banks and lenders that there’s an increased risk of identity fraud. Companies will then seek extra verification from anyone applying for credit in your name. Impersonation of the dead is the fastest-growing type of identity theft, so take this into account when dealing with a relative’s death and estate: immediately notify the relevant Government departments, such as the Department of Work and Pensions and the Inland Revenue, and return important documents by registered delivery.
Dienstag, 8. März 2011
Shaw Capital Management Headlines: Shaw Capital Management Scam Info:Just beware of Google Gmail Corporation Scam Email
Sometimes it’s hard to believe but true cyber criminals are going wild with technology and changing their tactics to boost their crimebusiness. No matter how it comes ,but internet is very much great short cut from which they can execute their fraud tactics and escape.
Email scams are very much common these days . Online fraudsters are using new modus operandi these days to defraud computer users . Fake notifications are sponsored through emails under most popular subject headings like that you have won a prize money of (xxxxxxx GBP) under reputed names.
One of such email fraud ,419 legal would like to highlight which is making rounds in the form of scam email notification that represents itself from GOOGLE GMAIL CORPORATION .The email says you have won a prize money of (?1,000,000.00 GBP) by Google /Rediffmail Lottery in conjunction with the GOOGLE GMAIL CORPORATION.
Infact Google which is one of the world’s leading search engine never sends any prize winning notification to it’s user. These are nothing but fraud tactics by scammers to gain personal information.
419 legal strongly recommend it’s readers and internet users to beware of such fraud email and avoid sending any personal information.
Dear Winner r
We are Pleased to inform you that you have won a prize money of (?1,000,000
.00 GBP) by Google /Rediffmail Lottery in conjunction with the GOOGLE GMAIL
CORPORATION. we collects all the email addresses of the people that are acti
ve online, Among the millions that subscribed to Yahoo, Hotmail and various
Microsoft window users, we only select thirteen people every year as our wi
nners, we are congratulating you for being one of the people selected. All p
articipants were selected through a computer balloting system drawn from Nin
e hundred thousand E-mail addresses from Canada, Australia, United States, A
sia, Europe, Middle East, Africa and Oceania as part of our international pr
omotions program which is conducted annually.
This Lottery was promoted and sponsored by Google Corporation and a
conglomerate of rediffmail and some multinational companies as part of
their social responsibility to the citizens in the communities where they
have operational base
Qualification Number: (G/4979CFV3)
However you will have to fill and submit this form to the events manager
1. Full name…………..
2. Contact Address……..
3. Age………………..
4. Telephone Number…….
5. Marital Status………
6. Sex………………..
7. Occupation………….
8. State/City:……………..
9. Country……………
Information required for payment Such as:
i. Account Holder Name:
ii. Account Number:
iii. Bank Name:
(Contact Director Lottery Deespartment)
Name: xxxxxx
Email: claimsdirector2011@live.com
Tel: +447017415089
Director Lottery Department
The Google Rediffmail Corporation.
NOTE: Always check your email inbox and spam folder for our emails as we
will be in constant correspondence with you because we are committed to
delivering your funds to you within the shortest time.
Email scams are very much common these days . Online fraudsters are using new modus operandi these days to defraud computer users . Fake notifications are sponsored through emails under most popular subject headings like that you have won a prize money of (xxxxxxx GBP) under reputed names.
One of such email fraud ,419 legal would like to highlight which is making rounds in the form of scam email notification that represents itself from GOOGLE GMAIL CORPORATION .The email says you have won a prize money of (?1,000,000.00 GBP) by Google /Rediffmail Lottery in conjunction with the GOOGLE GMAIL CORPORATION.
Infact Google which is one of the world’s leading search engine never sends any prize winning notification to it’s user. These are nothing but fraud tactics by scammers to gain personal information.
419 legal strongly recommend it’s readers and internet users to beware of such fraud email and avoid sending any personal information.
Dear Winner r
We are Pleased to inform you that you have won a prize money of (?1,000,000
.00 GBP) by Google /Rediffmail Lottery in conjunction with the GOOGLE GMAIL
CORPORATION. we collects all the email addresses of the people that are acti
ve online, Among the millions that subscribed to Yahoo, Hotmail and various
Microsoft window users, we only select thirteen people every year as our wi
nners, we are congratulating you for being one of the people selected. All p
articipants were selected through a computer balloting system drawn from Nin
e hundred thousand E-mail addresses from Canada, Australia, United States, A
sia, Europe, Middle East, Africa and Oceania as part of our international pr
omotions program which is conducted annually.
This Lottery was promoted and sponsored by Google Corporation and a
conglomerate of rediffmail and some multinational companies as part of
their social responsibility to the citizens in the communities where they
have operational base
Qualification Number: (G/4979CFV3)
However you will have to fill and submit this form to the events manager
1. Full name…………..
2. Contact Address……..
3. Age………………..
4. Telephone Number…….
5. Marital Status………
6. Sex………………..
7. Occupation………….
8. State/City:……………..
9. Country……………
Information required for payment Such as:
i. Account Holder Name:
ii. Account Number:
iii. Bank Name:
(Contact Director Lottery Deespartment)
Name: xxxxxx
Email: claimsdirector2011@live.com
Tel: +447017415089
Director Lottery Department
The Google Rediffmail Corporation.
NOTE: Always check your email inbox and spam folder for our emails as we
will be in constant correspondence with you because we are committed to
delivering your funds to you within the shortest time.
Shaw Capital Management Headlines : South Korea Eyes Auto Parts Exports Of US$30 Billion In 2015
SEOUL, Feb 25 (Bernama) — South Korea aims to export US$30 billion worth of auto parts in 2015, helped by the country’s free trade pacts in the coming years, Yonhap news agency quoted the government as saying Friday.
The Ministry of Knowledge Economy said the amount represents a 58 percent gain from US$18.9 billion worth of parts shipped abroad last year.
Overseas demand for locally made products has gone up thanks to improved quality and brand recognition as South Korean-made cars have made solid inroads into overseas markets, such as the United States and the European Union, the ministry said.
“South Korea has five free trade agreements at present with three others waiting ratification after formal deals were signed,” said Kim Sung-chil, the head of the ministry’s auto and shipbuilding division.
He said there are currently seven other negotiations under way that could greatly expand export markets if agreements can be reached.
But the official said many car parts suppliers remain small and don’t have the necessary technology or marketing know how to individually enter foreign markets.
To overcome such shortcomings, an export promotion plan will be announced in the first half of this year to help smaller manufacturers better compete in the international arena, Kim said.
– BERNAMA
The Ministry of Knowledge Economy said the amount represents a 58 percent gain from US$18.9 billion worth of parts shipped abroad last year.
Overseas demand for locally made products has gone up thanks to improved quality and brand recognition as South Korean-made cars have made solid inroads into overseas markets, such as the United States and the European Union, the ministry said.
“South Korea has five free trade agreements at present with three others waiting ratification after formal deals were signed,” said Kim Sung-chil, the head of the ministry’s auto and shipbuilding division.
He said there are currently seven other negotiations under way that could greatly expand export markets if agreements can be reached.
But the official said many car parts suppliers remain small and don’t have the necessary technology or marketing know how to individually enter foreign markets.
To overcome such shortcomings, an export promotion plan will be announced in the first half of this year to help smaller manufacturers better compete in the international arena, Kim said.
– BERNAMA
Sonntag, 6. März 2011
Shaw Capital Management and Financing - Freight Bill Factoring to Fund Your Need
Using Freight Bill Factoring to Fund Your Transportation Company by Marco Terry.
Most transportation company owners have to constantly juggle responsibilities. They have to handle vehicle repairs, driver payments, insurance payments, office expenses and more importantly - collecting invoices. Collections can be source of problems for many transportation companies (or freight brokerages) since most clients pay their invoices in 30 to 60 days . Few can afford to wait that long.
Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.
One way to handle slow payment is to try and negotiate a quick pay - basically asking your clients to pay quickly. Some will do it. Others won't, or at least will only offer it if you give them a discount. Although they are not always reliable, negotiating a quick pay can be beneficial in most cases.
Shaw Capital Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.
If quick pays won't work, your best alternative is to secure business financing to ensure you always have funds on hand to cover business expenses. This can be difficult for most owners since institutions require that all applications have stellar credit, assets that can be held as collateral and many years of experience. This will rule out business loans as an alternative for most small and midsized trucking companies. However, this is not necessarily a big problem since a business loan is not always the solution to this problem.
For many, freight bill factoring will be the better alternative. Freight factoring, as it is commonly known, can provide the equivalent of a quick pay by using an intermediary. The intermediary, called a factoring company, advances you funds against your freight bill. The transaction is settled once your client pays the invoice in full.
One of the advantages of freight factoring is that it provides predictable cash flow, enabling you to comfortably handle your business expenses. It eliminates having to worry about when your clients will pay.
To qualify for freight factoring you need to work with credit worthy clients. Also, your company needs to be free of liens, judgments and other encumbrances. Because of this, freight bill factoring is an ideal solution for small and growing trucking companies and freight brokers.
If quick pays won't work, your best alternative is to secure business financing to ensure you always have funds on hand to cover business expenses. This can be difficult for most owners since institutions require that all applications have stellar credit, assets that can be held as collateral and many years of experience. This will rule out business loans as an alternative for most small and midsized trucking companies. However, this is not necessarily a big problem since a business loan is not always the solution to this problem.
For many, freight bill factoring will be the better alternative. Freight factoring, as it is commonly known, can provide the equivalent of a quick pay by using an intermediary. The intermediary, called a factoring company, advances you funds against your freight bill. The transaction is settled once your client pays the invoice in full.
One of the advantages of freight factoring is that it provides predictable cash flow, enabling you to comfortably handle your business expenses. It eliminates having to worry about when your clients will pay.
To qualify for freight factoring you need to work with credit worthy clients. Also, your company needs to be free of liens, judgments and other encumbrances. Because of this, freight bill factoring is an ideal solution for small and growing trucking companies and freight brokers.
Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.
Shaw Capital Financing on International Purchase Order Financing
For Canada, UK and beyond - On this challenging economy you are looking into new territories, markets and industry channels, some of those may be based outside the US. Unlike most purchase order financing companies, we work with businesses seeking growth in foreign markets such as Canada, Mexico, UK and Asia. Whether you are looking for PO financing in Canada, purchase order financing in Mexico or PO funding throughout the EU, our international PO financing program is designed to assist your business to grow and expand in the global marketplace.
Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.
What is purchase order financing
Every business faces the challenge of managing cash flow. One tool to make it easier is purchase order financing. It gives you access to working capital in a manner that is quick, convenient and affordable. Companies use purchase order funding to support an expansion, handle a large order or surge in business, and even occasionally for operating expenses. The tool is particularly well suited to newer companies that cannot get authorized for a traditional business loan. Manufacturers, distributors, importers and exporters are good examples. Lets say your suppliers want you to pay cash on delivery, but your customer won’t pay you until 60 days after they receive your finish product - a classic cash flow problem, which purchase order financing is designed to solve. Here are some other applications:
Inexperience in generating financing
Lack of working capital
Need to keep suppliers and customers separate
Desire to avoid credit risk (PO financing is not considered debt)
Immediate sales need calls for fast response
Profit opportunity
How does purchase order financing work
Purchase order financing involves issuing letters of credit to suppliers of finished or non-finished goods, based on specific, tangible goods that have been presold to a creditworthy end customer. It can help you deliver on time, increase market share, and grow without selling equity or incurring bank debt. You will need to supply financial information about your company, customer and supplier. We take care of the rest, usually offering approval and getting your short-term funding to you in as little as two weeks. You can use this cash flow management tool to meet future growth opportunities, too -once your account is set up, the process is faster still.
About PurchaseOrderFinancing.com
PurchaseOrderFinancing.com serves as the link between small businesses and the working capital they need to seize an atypically large business opportunity. This website is the newest addition to the structured finance firm founded by Dan Casey in 2002 which develops and implements creative financial strategies for commercial clients with working capital challenges. Dan Casey, Founder and CEO. A graduate of DePaul University in Finance, Dan has orchestrated an extraordinary career in starting and building businesses.
Shaw Capital Factoring VS Bank Loan
Factoring is Different From a Bank Loan in Raising Cash By Eve Garcia. Companies can sell their invoices to raise cash rather than go down the bank loan route.
Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.
More organizations and companies are selling invoices to a third party as a means of raising funds.
The financial process known as factoring is where a business sells its accounts receivable - its invoices - to a third party for immediate payment but receives less in return than the value of those invoices.
This system is usually used by a company when its available cash balance is not sufficient to meet its existing commitments or other cash needs such as fresh orders or contracts. It allows the business to maintain a smaller ongoing cash balance, though by selling the invoices for a lower amount than they are actually for.
The invoice is sold to a third party called a factor, and this is where the approach is different from a bank loan when it comes to a business looking to raise funds.
Shaw Capital Management and Financing - Factors make money available even in circumstances where a bank may be less willing to do so.
This is primarily because they are more concerned with the creditworthiness of the debtor - the business or organisation that is required to pay the invoices for the goods or the services delivered by the invoice seller.
In contrast, banks tend to focus more on the creditworthiness of the borrower when looking to lend.
Factoring is seen as a calculated risk by many firms and one they enter into for a specific reason.
The down side is that they are offloading their invoices for less than their face value, but the return is that they are getting the money owed to them much more quickly than they would have done if they had simply pursued the buyer of their goods direct.
A number of companies operate specifically in the factoring and invoice discounting business and actively contact companies and organizations that they believe will benefit from such services.
These firms look to promote a number of benefits of the services they offer to the invoice seller. They suggest that the process is a way to get access to money quickly and safely and that it also avoids the difficulties and inconveniences that can be involved in collecting bad debt.
It is also promoted to potential customer firms as helping to facilitate and smooth out cash flow and as a way of borrowing money that is secured by their debt.
Once the factoring business takes on the invoice and the debt, it has the responsibility of collecting payment. It makes its profit by paying the invoice seller less cash than the face value of the invoice.
It is worth "shopping around" when looking to engage the services of a such a firm, since the market is competitive, with estimates suggesting that in the UK alone it is worth in the region of £200 billion a year, and fees vary.
There are a variety of reasons for this, with a significant fact being the risk associated with the invoices that are purchased.
Before taking on the invoice, the factor will conduct various levels of research. This will include looking into the track record of the debtor firm to assess whether it is creditworthy or has a history of bad payment. Once taken on, the factor will then seek payment from the debtor.
Factoring is used across a wide spectrum of business organisations and more recently the practice - which has a history stretching back to the 14th century in England - has been adopted by government bodies.
Today in the UK, factoring is used in some form by around 50,000 companies as a means of releasing finance.
The financial process known as factoring is where a business sells its accounts receivable - its invoices - to a third party for immediate payment but receives less in return than the value of those invoices.
This system is usually used by a company when its available cash balance is not sufficient to meet its existing commitments or other cash needs such as fresh orders or contracts. It allows the business to maintain a smaller ongoing cash balance, though by selling the invoices for a lower amount than they are actually for.
The invoice is sold to a third party called a factor, and this is where the approach is different from a bank loan when it comes to a business looking to raise funds.
Shaw Capital Management and Financing - Factors make money available even in circumstances where a bank may be less willing to do so.
This is primarily because they are more concerned with the creditworthiness of the debtor - the business or organisation that is required to pay the invoices for the goods or the services delivered by the invoice seller.
In contrast, banks tend to focus more on the creditworthiness of the borrower when looking to lend.
Factoring is seen as a calculated risk by many firms and one they enter into for a specific reason.
The down side is that they are offloading their invoices for less than their face value, but the return is that they are getting the money owed to them much more quickly than they would have done if they had simply pursued the buyer of their goods direct.
A number of companies operate specifically in the factoring and invoice discounting business and actively contact companies and organizations that they believe will benefit from such services.
These firms look to promote a number of benefits of the services they offer to the invoice seller. They suggest that the process is a way to get access to money quickly and safely and that it also avoids the difficulties and inconveniences that can be involved in collecting bad debt.
It is also promoted to potential customer firms as helping to facilitate and smooth out cash flow and as a way of borrowing money that is secured by their debt.
Once the factoring business takes on the invoice and the debt, it has the responsibility of collecting payment. It makes its profit by paying the invoice seller less cash than the face value of the invoice.
It is worth "shopping around" when looking to engage the services of a such a firm, since the market is competitive, with estimates suggesting that in the UK alone it is worth in the region of £200 billion a year, and fees vary.
There are a variety of reasons for this, with a significant fact being the risk associated with the invoices that are purchased.
Before taking on the invoice, the factor will conduct various levels of research. This will include looking into the track record of the debtor firm to assess whether it is creditworthy or has a history of bad payment. Once taken on, the factor will then seek payment from the debtor.
Factoring is used across a wide spectrum of business organisations and more recently the practice - which has a history stretching back to the 14th century in England - has been adopted by government bodies.
Today in the UK, factoring is used in some form by around 50,000 companies as a means of releasing finance.
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