Kurt Wulff (McDep Associates) submits: Buy-recommended ConocoPhillips (COP) offers unlevered appreciation potential of 66% to a McDep Ratio of 1.0 where stock price would equal Net Present Value (NPV) of $105 a share. Third quarter results released today matched our estimates from three months ago for unlevered cash flow (Ebitda) in the strengthening upstream segment and fell short in the weak downstream (other) segment. We see NPV concentrated 87% upstream and 13% downstream in our valuation that capitalizes cash flow at unlevered multiples (PV/Ebitda) related to reserve life (Adjusted R/P) for natural gas and oil. Chief Executive Jim Mulva sees the refining market improving from today’s distressed levels to the point where the company would sell some refineries in 2012-2013. Until then, a recently announced program to sell $10 billion of assets would be concentrated on upstream properties. The sales could include COP’s 9% of the Syncrude Joint Venture worth US$5.3 billion by our estimate. The proceeds from sales and reduced capital spending plans would be applied to reduce debt, pay dividends and repurchase stock. Mr. Mulva no longer believes COP needs to be a giant company to support new investments in resource rich countries. Meanwhile, the prospects for existing resources look good with futures prices for the next six years for oil and gas above the 40-week average.Complete Story »

  Excerpt from fund manager John Hussman's weekly essay on the U.S. market:Excerpt from the Hussman Funds' Weekly Market Comment (11/30/09):In my estimation, there is still close to an 80% probability (Bayes' Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we've observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle. Meanwhile, valuations are clearly unfavorable here, and even under the “typical post-war recovery” scenario, we are observing an increasing number of internal divergences and non-confirmations in market action.Complete Story »

  IndexUniverse Europe submits: By Paul AmeryAccording to a news story in Money Marketing this past Thursday, fund manager Evercore Pan-Asset is lobbying iShares to adjust the total expense ratio for its ETFs.Complete Story »

  Fred Wilson submits: David Carr has a good post this morning in the New York Times called The Fall and Rise Of Media.The post starts out with the old way of the media business. Kids would come to NYC out of school and work in marginal jobs in the hopes of getting a break and joining the "velvet rope" of mainstream media.Complete Story »

  Kurt Wulff (McDep Associates) submits: Buy-recommended Encore Acquisition Company (EAC) offers unlevered appreciation potential of 10% to a McDep Ratio of 1.0 where stock price would equal Net Present Value (NPV) of $50 a share. We raise NPV from $44 a share on the basis of delayed cost reductions that now appear to have been achieved a few quarters after oil price declined. Released late October 27, third quarter results demonstrated strong recovery in unlevered cash flow (Ebitda) not only with lower than expected operating cost, but also higher volume and higher price. NPV is sensitive to expected performance in our valuation that capitalizes cash flow at unlevered multiples (PV/Ebitda) related to reserve life (Adjusted R/P) for natural gas and oil. Complete Story »

  Caution remains the catchword as traders resume business after a holiday weekend in the U.S. The dollar has opened lower after the central bank of the United Arab Emirates said it would stand behind local lenders and that of Abu Dhabi said it would provide liquidity to borrowers using a special lending facility. Such swift actions may take much of the sting out of the possible debt default from Dubai World on some of its $59 billion in loans. The strength of the Japanese yen serves to remind us that the investment world remains in a cautious mood and at this stage of the game conveys a preference for the Japanese rather than American currency. Complete Story »

  Macro Man submits: OK, so it looks as if disaster may be averted in Dubai: the latest hot rumor is that the central bank will guarantee all Dubai World debt. This is not altogether shocking - was this not among the rationales for the big intraday equity bounce on Friday? - but has nevertheless provided comfort to bondholders. The (in)famous Dec '09 Nakheel bond was recently quoted 65/70....well below par, but certainly a damn sight better than the 40-mid price that Macro Man saw on Friday morning.Equity holders, on the other hand, may be left holding the bag, or at least that's the fear. The Dubai stock market, open for the first time since Wednesday, has cratered lower, down more than 8% at the time of writing.Complete Story »

  David Hunkar submits: In the 1950s investors used to own stocks mainly for their dividends.They looked for companies that paid consistent dividends out of profits. If the stock appreciated in price, that was an added incentive. However all that changed in the recent years when many investors started investing purely for price appreciation. This strategy failed miserably when many of the tech stocks got crushed in the dot-com crash and some non-dividend payers disappeared. Even in a rising market investing in dividend stocks is still important for a diversified portfolio. Historically utilities and financials have been investors’ favorites for dividends. But since the credit crisis began, most of the financial stocks have substantially cut or suspended dividend payments. However there are still many high quality dividend paying stocks in utilities, consumer staples and healthcare that offer excellent long-term opportunities.Complete Story »

  Wall Street Cheat Sheet submits: by Carolyn AustinHas “Too Big to Fail” become “a policy enshrining crony capitalism” in the oft-quoted phrase, or does the argument against breaking up TBTF banks have merit? Do regulatory approaches to prevent systemic risk merely serve to institutionalize the TBTF concept? Let’s see who stands where in this collection of economic heavyweights.Complete Story »

  Daniel M. Harrison submits: It has long been known that banks use derivatives both as insurance products to protect themselves against calamitous events and as speculative products to engineer outsize returns. In the case of banks in Abu Dhabi last week, they appear to have been using credit default swaps and other complex financial instruments in order to strong-arm more financial control out of Dubai. Friday, I reported how some international bankers were speculating that the surge in buying of CDS on Dubai’s government debt was a “squeeze play” by Abu Dhabi, organized by the latter to wrestle more control over the former (see story here). This weekend, I heard from various other financial professionals who expressed support for that theory. Judging by a wire report this morning, Abu Dhabi isn’t being particularly shy about its intention now, either:Complete Story »

  Jim Delaney submits: Black Friday got a little darker for Dubai as the nation requested a six-month stand-still agreement on its debt. A year ago, when the world was not only staring into the abyss but appeared to have slipped off the edge and was falling into it, Nouriel Roubini was predicting all sorts of horrible outcomes at the time which included at least one sovereign debt holder failing if not two or three. To some extent it is a little surprising that it has taken this long for that prediction of his to come about. The actual jolt seems somewhat less terrible than all of the headlines would have us believe however as Roy Ramos, an analyst with Goldman Sachs in Hong Kong said, “Our first stab at potential worst-case loss estimates suggests a manageable impact.” After some back of the envelope calculations, RR thinks the two banks with the biggest exposure, HSBC (HBC) and Standard Chartered Bank could take hits of $611MM and $177MM respectively. Not fun by any means but given the write-offs of the last year, these numbers seem more like rounding errors than anything with the potential to sink either institution.Complete Story »

  Jae Jun submits: This is a continuation of the series valuing each of the 200 Forbes Best Small Companies. You can find the list of stocks and the corresponding intrinsic values as calculated by me with the stock value calculator. Complete Story »

  David Hunkar submits: The three ETFs that investors can use to invest in foreign utilities are iShares S&P Global Utilities Sector Index Fund (JXI) , WisdomTree International Utilities Fund (DBU) and SPDR S&P International Utilities Sector Fund (IPU). Among these ETFs, iShares’ JXI is the largest fund with an asset base of $165M. The distribution yield is 5.62%. In addition to foreign utilities, JXI invests in US utilities also such as Exelon (EXC) and Southern Company (SO). As of 10/31/2009 this year, the fund has a negative return of 2.19%. Last year it was down 29.15%. However the fund is an easy way to gain exposure to many foreign utilities like Iberdrola (IBDRY.PK) (Spain), Centrica (CPYYY.PK) (UK) and E.ON (EONGY.PK) (Germany).Complete Story »

  Prieur du Plessis submits: This week Consuelo Mack is joined on WealthTrack by Robert Rodriguez of First Pacific Advisors. His 25-year track record of running both a top performing stock and bond fund has earned him the accolade “best fund manager of our time”. The outspoken Rodriguez - who sheltered shareholders from the credit crisis - explains why he is even more worried about the future and how he intends to invest as a result. Complete Story »