Lately the IPO market has been very difficult to impress. Apparently a Nobel Prize helps do the trick.

For months, investors in the initial public offering market have complained about the quality of the new equities making their debut. Against that backdrop, today’s successful IPO for Financial Engines (FNGN) stands out.

Financial Engines was founded in 1996, by William Sharpe, a co-winner of the 1990 Nobel Prize in Economic Sciences for “pioneering work in the theory of financial economics.” (Sharpe developed the “Sharpe ratio,” a measure how much investors are compensated for taking on risk in investments.) His company provides low-cost, online financial advice and manages retirement funds in employer-sponsored plans.

On Mar. 16, Financial Engines became the first IPO of 2010 to price above its initial offering range — out of 26 U.S. IPOs since the beginning of the year. The stock was initially estimated to sell for $9 to $11 per share, but premiered at $12. Then, when it began trading, the stock climbed higher all morning, eventually closing at 17.16, a 43% one-day return.

Of course, Sharpe’s prize isn’t the only thing that caught investors’ attention. Financial Engines is profitable and growing rapidly.

For example, the company:
• Saw revenues grow 19% in 2009, to $85 million.
• Reported net income of $5.7 million in 2009, its first profitable year.
• Saw its assets under management jump from $1 billion in 2004 to $25.7 billion last year.
• Provides services or runs retirement plans at 760 plan sponsors, including 116 Fortune 500 companies, for about 7.4 million plan participants.

Executives believe much more growth is possible. Financial Engines’ prospectus reads:

As the burden of retirement investing shifts to the individual, we believe that there is an increasing need for assistance and guidance on how to maximize retirement wealth.

If Financial Engines stands out so much, it’s probably because so many other IPOs in the last four months have fallen short.

Scott Sweet, managing director of IPO Boutique, tallies up the complaints: Private equity firms going public “with enormous debt loads.” Unlike the profitable Financial Engines, companies “not making any money.” IPOs that are inferior alternatives to competitors already on the market with long track records.

Over and over again, companies have been roundly rejected by investors. To take one example, Crude Carriers (CRU) — a transporter of crude and fuel oil by ship — went public on Mar. 11 priced at $19 per share, the low end of its predicted range. It closed on Mar. 16 at 18.07, offering its initial investors a 4.9% loss in four trading days.

Maybe the brokers that bring IPOs to market have learned a lesson. Sweet notes that several promising IPOs have filed recently. He says:

Underwriters are tired of having to slash virtually every deal below the original filing range to garner any interest. [They] have retooled and said, ‘We’re going to bring better-quality companies’ [to market].

Among those promising IPOs that could be heading to market, Sweet mentions video game renter Gamefly, prepaid debit card provider Green Dot, Tesla Motors and CBOE Holdings. Financial Engines proves that investors aren’t out to reject all IPOs — just those that don’t meet their high standards.

Original source for this article: Business Week

On 3/23/2009, I sent out a memo about the S&P 500 being back over 800. In retrospect, it was up 22.6% over the 10 trading days since the 3/9/09 low; the next 239 trading days produced a 36.5% gain. So, with the one-year anniversary of the Bull market coming up Tuesday (technically the opening of Wednesday, March 10), below is a status report.
I’ve added a few text lines to highlight, but mostly its data (file attached) for your use.

While 97.6% of the S&P 500 are up over the year, only 24.1% are up from the October 2007 high. Turning things around and getting them to work again was key. However, the driving forces over the last year – fewer layoffs, a reversal of the credit crunch, and fewer massive write-offs, have been replaced by the need for stable jobs and growth, which may prove a bit slower to develop. Hopefully things will get better, but don’t count on them getting easier.

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Original source for this article: Business Week

February was a sweetheart of a month, with love for all (it’s all in the definition), and not just on the 14th. The FDIC loved another 500 banks, raising its list of ‘challenged’ institutions to 702 from the 252 that were the center of their admiration at year-end 2008. Google decided to engage China in talks, as one part of Congress accelerated their love for Toyota, while another part of Congress yielded their approval for Ben with hopes of him not yielding some back. The quick Volker rule seemed to be more of a dating process, sometimes called discovery, other times called politics. Wall Street quantified that its love for bonuses had derived a 17% growth rate (not sure if there is a default swap on it – they never tell you to after the event), as both buybacks (at least for authorizations – the proof however is in the trade) and dividends (best month in 2 years – and that’s cash in your hand) come back into fashion. The Democrats and Republicans tenderly played with Health Care, in a picture (or photo) perfect setting, as investors fell in love with the dollar (actually they just liked the Euro a lot less), new home builders decided they loved their homes too much to sell them, translating into an 11.2% sales decline in January, as existing home owners also stayed put, as represented by a 7.2% decline in existing home sales. GDP was set 5.9% for Q4, but warnings emerged that 2010 may not be as good (everything is relative, and as stated in the definition). Canada started off depressed by its lack of metal, but cheered up as its ladies hockey team took gold (with the ladies starting the party on the ice); Canadian investors however were much more happy, as Canada performed the best of all global equity markets in February, permitting those people to party even more. The only one left on the side line appeared to be the consumer, whom with no one to turn to, were down right depressed over their insecure, paranoid, emotionally inspired belief that higher prices, higher taxes, and fewer jobs were ahead of them (where do they get that from? didn’t they get the memo?). That, even though it now appears that many of them may be classified as rich. These malcontents sent the Consumer Confidence Index down to 46 from an already discouraging 56.5; someone needs to lobby them a pick-me-up e-card, or at least something more than a token stimulus package. March madness is coming (Syracuse will beat Villanova, but in the end ‘you’re not in Kansas anymore’; if the President speaks basketball, you need to speak basketball), but in Washington, March madness will be called reconciliation, which should insure late-night TV employment.

Full February report available

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Original source for this article: Business Week

The 8.1% market decline from the Jan 19th Bull market high through the Feb 8th pullback low appears to have stabilized, at least for now, with the market gaining back about half of it’s loss, and holding onto a 63% gain, as the one-year anniversary of the Bull rally that started March 9th approaches. Of course, we still need another 41% to get back to the March 2007 high and even more depressing is that the hang over from the 1999 party remains (when the S&P 500 posted an annualized total return of 18.2% for the decade, or 433% in all), with long term investors down 33% from the turn of the century. Oh well, that was yesterday and today is now. And while today is still not clear, it is starting to take shape with familiar issues and arguments. The current debate is between the higher Bank rate by the Fed which could push rates up versa the January Core consumer rate which was down -0.1%, the first negative since 1982; the political debate is over the impact of the stimulus spending on jobs – both prior and the expected new one.

The market has had low volume for several months now, which includes the mini-pullback, and while there have been numerous opportunities inspired by economic, fiscal and issue data to trade, many investors are standing pat, with a sizable amount of cash on the side line. Overall, this lack of commitment is viewed as a sign of uncertainty and to some degree a lack of faith in global leadership to make things better – which in itself is a sad commentary.

Earnings were very good for Q4, and Q1 is also expected to show a nice increase, with a notable increase in Energy mostly due to a devastating Q1,’09 comparative. But sales remain the true issue, and they haven’t increased that much, and future sales growth is expected to be slow. Margins for Q4 were very high due to cost cutting, and that is expected to continue throughout 2010. We have already seen several issues announce additional layoffs, with some being minor when compared to their last year’s move. Humana and Boston Scientific will layoff 2,700 employees, but Merck will cut 15% of their newly acquired Schering-Plough division, Xerox is letting 5% go, and Verizon is targeting 13,000 employees for 2010. Those should help corporate earnings, but they can’t be good for those let go, the economy or municipalities, and they defiantly won’t inspire consumers to go out and spend more, which in the end can’t be good for long term profits.

Balance sheets are looking good. While cash appears to have dropped from its Q3 all time high, it remains very high at 72 weeks of expected 2010 operating income, giving company’s many options, including more aggressive M&A to increase sales. Buybacks are now back in style, at least in the announcements. The actual market buybacks, while up from the lows, remains well off the peak, and I expect that they will stay off their peak, but still outpace dividends, as companies buyback enough shares to prevent dilution, but not enough to improve EPS through share count reduction. The dividend news is all good with more issues increasing, fewer decreasing and coverage ratios for the top payer being at a more comfortable level. I believe the full year will produce a 5.6% dividend gain, with the second half being better than the first, if the economy cooperates.

The bottom line however is that a good deal of the markets fate lies in Washington. Companies can position themselves, develop product, form alliance and trim down, but if the overall economy doesn’t continue to improve, or if consumers and companies don’t believe that it will improve, then it won’t. And the bottom line to that item is jobs. The good news is Washington is working on it, the bad news is Washington is working on it.

Original source for this article: Business Week

(but we still love you Warren)

You need to think about this first before you calculate it. After the close of business tonight BNI with an index value of $26 billion and which pays a dividend will be removed from the S&P 500, and BRK.B, with an index market value of $127 billion (float adjusted) and which does not pay a dividend will be added. The removal will reduce the S&P 500 indicated dividend rate by $0.05, and also cause the index divisor (think of them as shares outstanding) to be increased by over 1%, to insure that there is no gain or loss in the index price. One of the side items however is that when you add up the index dividend rate in billions of dollars, you are dividing by a larger divisor, so the per share rate goes down. The full impact of the BRK / BNI deal is to negate all of the positive good dividend news we’ve had over the past three months. The simplified explanation is that your dividends in billions are only slightly lower but since you have more shares outstanding your piece of the pie is smaller (a concept to keep in mind when looking at Financial EPS).

That said, we are still holding to our initial 2010 overall 5.6% S&P 500 dividend growth rate, anticipating a good February, followed by a few decreases and better news in the second half (if the economy cooperates). Not that I knew about the change, but I certainly calculated it, just as I calculated if those three top issues (of the top 15 by market value) that don’t currently pay a dividend decided to yield their cash and pay (they would add $0.495 for each 1% yield; BRK would add another $0.141 for each 1% yield – no harm in knowing the numbers).

See file for issues, values and aggregates
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Original source for this article: Business Week

The index posted its fourth week of market losses, an event not seen since March 2009. However, this week’s damage was a minor -0.72% (Monday was up 1.43%, with Tuesday was up 1.30%) and the cumulative four weeks of damage was 6.88% (7.31% off the 1/19 high), compared to the 16.01% in March, and today ended with a field goal, as the market moved up slightly (0.29%) in afternoon trading. U.S. volatility (and damage) was much less than global, as concern over sovereign debt was added to the concern over the pace of growth.

With over 75% of the Q4 EPS in the bottom-line is good, relative to where we are in the recovery cycle, but non-financial sales still lag, and until they pick up, hiring won’t pick up. Dividend increases continued throughout the week, with more positive news expected next week. February is the busiest month for increases (fiscal over, annual being printed and share holder meeting coming up), but there are still issues that are straining to pay their dividend (didn’t make it in ‘08 or ’09), and we expect some negative news to start late in the quarter.

Its time to look at the long term whole picture, not just the trader’s notes. Look to the basic fundamentals – earnings, balance sheets, production and capacity, as well as balance sheets and business models. When these items come back in style and become relevant to investors, short-term tick by tick trading based on each news items or stat will diminish (but still exist, risk vs. reward), and investors will return to the market.
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Original source for this article: Business Week

Business plans are also called expansion, strategic, internal , operational, growth, annual, product and feasibility plans. There are also many other names, bottom line, these are all Business Strategic Planning. In all these different varieties of business plan, the plan matches your specific situation. For example, if you’re developing a plan for internal use only, not for sending out to banks or investors, you may not need to include all the background details that you already know. Description of the management team is very important for investors, while financial history is most important for banks.

Some of these specific case differences lead to different types of plans:

• The most standard business plan is a start-up plan, which defines the steps for a new business. It covers standard topics including the company, product or service, market, forecasts, strategy, implementation milestones, management team, and financial analysis. The financial analysis includes projected sales, profit and loss, balance sheet, cash flow, and probably a few other tables. The plan starts with an executive summary and ends with appendices showing monthly projections for the first year.

• Internal plans are not intended for outside investors, banks, or other third parties. They might not include detailed description of company or management team. They may or may not include detailed financial projections that become forecasts and budgets. They may cover main points as bullet points in slides (such as PowerPoint slides) rather than detailed texts.

• An operations plan is normally an internal plan, and it might also be called an internal plan or an annual plan. It would normally be more detailed on specific implementation milestones, dates, deadlines, and responsibilities of teams and managers.

• A strategic plan is usually also an internal plan, but it focuses more on high-level options and setting main priorities than on the detailed dates and specific responsibilities. Like most internal plans, it wouldn’t include descriptions of the company or the management team. It might also leave out some of the detailed financial projections. It might be more bullet points and slides than text.

• A growth plan or expansion plan or new product plan will sometimes focus on a specific area of business, or a subset of the business. These plans could be internal plans or not, depending on whether or not they are being linked to loan applications or new investment. For example, an expansion plan requiring new investment would include full company descriptions and background on the management team, as much as a start-up plan for investors. Loan applications will require this much detail as well. However, an internal plan, used to set the steps for growth or expansion funded internally, might skip these descriptions. It might not include detailed financial projections for the whole company, but it should at least include detailed forecasts of sales and expenses for the new venture.

• A feasibility plan is a very simple start-up plan that includes a summary, mission statement, keys to success, basic market analysis, and preliminary analysis of costs, pricing, and probable expenses. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing.

Future Africa Recommends Investing in Africa

Author: Tim Berry

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Successful Investments

Original source for this article: Successful Investments

If you want to save some cash and earn some money from it on a monthly basis, you should start investing. Money that lies in a drawer or a bank account is essential idle money and hence you should know how to invest so that you can start earning some money from it.

Investing means that you should set for yourself some rules that you will follow. Some of the most important decisions like when to buy and sell can be made by means of using these rules. It also helps in making you stay calm and hold on to your holdings.

A lot of these rules come from past experiences which are a mixed bag of good and bad experiences. If you are an investor you should not lose heart but learn from past bad experiences.

Some people are seen to base their opinions on what other investors think and do. But it is better if you do your own research and then look at testing this out by analyzing the findings. With this you will be able to form firmer investment opinions too. It is always advisable to be guided by your own convictions and not by the convictions or opinions of others. This is why it is important that you learn various techniques of investing and then apply these quite strongly.

One of the best things is if you can guide yourself. The reason is that you will be able to base your opinion on past experiences. From his you will benefit as you will be able to know what the various phases of investment are. The first step is to do proper and vigorous research after which you need to invest and leave the rest to fate or chance.

It is important to believe in your own convictions. It is fine if others follow our recommendations but you should not follow them. After all, you do not know they rationale or way of thinking. If things do not turn out well, you would regret that you did not follow your own judgment and just followed others.

There are many programs that can help you in investing. It is possible to invest in property, gold etc where you can sell on appreciation. Investment in stocks and bonds is also essential. Buying and selling in the stock market is essential for which you need to learn speculation. This is like gambling where you can become hit or perhaps make money while trying the play in the market. If you learn the truck, you can invest in the safest way.

See more Business Management Articles

Doug has been writing articles online since he was in middle school. Now he continues to write and build projects on a professional level, you can check out his latest advice on water softener pellets and also new information about water softener maintenance.

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Successful Investments

Original source for this article: Successful Investments

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In order to educate taxpayers regarding their filing obligations, this fact sheet, the eleventh in a series, explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:

• Does the time and effort put into the activity indicate an intention to make a profit?

• Does the taxpayer depend on income from the activity?

• If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?

• Has the taxpayer changed methods of operation to improve profitability?

• Does the taxpayer or his/her advisers have the knowledge needed to carry on the activity as a successful business?

• Has the taxpayer made a profit in similar activities in the past?

• Does the activity make a profit in some years?

• Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.

Deductions for hobby activities are claimed as itemized deductions on Schedule A (Form 1040). These deductions must be taken in the following order and only to the extent stated in each of three categories:

• Deductions that a taxpayer may take for personal as well as business activities, such as home mortgage interest and taxes, may be taken in full.

• Deductions that don’t result in an adjustment to basis, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category.

• Business deductions that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.

Future Africa recommends Individual Coaching and Mentoring

Further information is available in IRS Publication 535, Business Expenses

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Successful Investments

Original source for this article: Successful Investments

In this article will present you a high yield online investment fund managed by Genius Investments Ltd. Genius Funds offers you the possibility to invest online using different payment systems.

Genius Investments Ltd was incorporated in Cyprus and is located at 6 Karaiskakis Street 3032 Limassol. You can contact Genius Funds by email or by Telephone (Europe): +357 25 025067 or Fax (Global): +44 207 855 0844. They also provide support by Live Chat.

In order to be able to invest in Genius Funds you must use different e-currencies such as Libertyreserve, Perfectmoney, Alertpay, Solidtrustpay, Strictpay or you can invest by Bank Wire.

Because it is a high yield investment program, investing in Genius Funds is very risky, you should NOT invest more than you afford to lose.

Genius Funds offers two investment plans to its members:

• Emerging Markets Growth Fund EMGF with 1.0% – 1.9%, Daily payments. With EMGF you have the potential to earn 1.0%-1.2% for Common Shares(minimum deposit $10) 1,1%-1,4% for Preferred Shares(minimum deposit $500) and 1.8%-1,9% for Premium Shares(minimum deposit $5000).
• World Bond Market Fund WBMF with 6.0% – 9.0%, Weekly payments. With the WBMF you can earn 6.0%-6,5% for Common Shares, 6,5%-7.0% for Preferred Shares and 7,4%-9,0% for Premium Shares.

After you register your account with Genius Funds you will be able to invest in any of their plans by purchasing shares.

Genius Funds website is hosted on a dedicated server with protection against DDoS attacks and they use custom investment software.

Genius Funds was launched online for more than one year and all this time all the profits of its members were paid.

You can check their paying status on different monitors listed on their ratings page.

Here are some payments proofs, screenshots showing payments made by Genius Funds in different e-currencies: