Financial Research

Cynosure, Inc. (CYNO)
Tata Motors LTd. (TTM)
Powershares Preferred Portfolio (PGX)
Powershares Golden Dragon Halter USX China Portfolio (PGJ)
Invesco AIM Developing Markets Fund (GTDDX)
Floating Rate Mutual Funds (AFRAX, HFLAX, or FFRAX)

Lets start off by talking about why you'd want to own this stock to begin with.  And by talk, I mean you should be able to hold a conversation at a party about why you own this stock.  They develop and market aesthetic treatment systems to dermatology, plastic surgery, and general medical markets.  They were founded in 1991 and now offer 18 different treatments in the segment of medical devices and equipment.  People want to look better, period.  It is now becoming socially acceptable at nearly any age to "fix" your appearance.  This is a secular (as opposed to a cyclical) trend that means that the number of people getting plastic surgery or aesthetic dermatology work in the future will be more than it currently is today.  More people getting this kind of medical care means more revenue for Cynosure, who is a leading name in the space.  It was also mentioned in the James Altucher book: "The Forever Portfolio" as a stock you could own for decades as a result of this growing trend.
 
OK, now the boring stuff.  Right now, because we are in a recession/garden variety depression pricing is difficult for CYNO, but this means that margins can get much, much better when the environment improves, meaning a better, more profitable company and then the stock will react appropriately.  They have $86.51 million in cash and only $625,000 in debt.  That is phenomenal in terms of a balance sheet being able to weather a difficult environment.  They have 2.87 million in operating cash flow and $6.78 cash per share.  That means that if you subtract the cash out of the stock price, over half of the stock's current price is the cash on the balance sheet. 
 
I think you can hold this stock for a return to the $20 52-wk high.  You are free to buy under $12.  If you read this article above that level, buy a little up to $15, above $15 I really think you need to wait for this to come back in before you grab it.  Always be prepared to buy more if it goes down, use limit orders to get the price you want and keep checking on Yahoo.com/Finance to make sure the news on CYNO doesn't change.

This is an Indian auto maker started in 1945.  They also now own luxury brands Jaguar and Land Rover.  India's infrastructure isn't what it is in China.  This means that while they are putting hundreds of thousands of cars on the road each year, once the infrastructure is put in place and the roads are better, even more growth can take place.  TTM is the creator of the Nano, the most cost effective automobile in the world.  If they are able to sell this car outside of India, it will be a massive hit with so many people focused on things like Smart cars and other smaller, more efficient vehicles.
 
India is thriving market and has a lot of room to run.  TTM is at it's 52-wk high, and you don't get there by doing things wrong.  The company has been as high as $22 in its history, so you still have room to run owning it here at $13.  I'd try to catch this stock under $13 on a pullback and always be prepared to buy more if it gives you a chance lower.  The balance sheet shows 856 Million in cash to 7.26 billion in debt.  It's not bulletproof, but it's not terrible either.  I think this can be owned for the long haul on rise in the number of the world's drivers as TTM exports its cars to Europe, Africa, the Middle East, Asia, and South America. 

This is an ETF that gives you exposure to preferred stocks of dozens of companies, most of which are financials.  Remember, preferred stocks are "senior" to common stock in a liquidation, which gives you a good measure of protection against losing your investment.  Preferred shares also are less volatile than the common stock and so offer big dividends to attract investors.  BUT, in recent times, the preferred stocks of companies have been badly beat down, just like the common shares.  This means that you now have a chance to own an asset that will increase AND you'll get paid 8.14% just to hold this ETF.  That's a fantastic dividend in addition to the points already laid out above.
 
What else, lets take a look at the top 10 of the index: JP Morgan Chase, Barclays, HSBC, Wells Fargo, Morgan Stanly, General Electric, Public Storage, Deutsche Bank, Comcast, ING, Credit Suisse, AT&T, MetLife, BB&T.  OK, that's more than 10, but it gives you an idea that this is chock full of commercial and investment banks.  But, you also have telecom and utilities, because they are notoriously big dividend payers.  It IS very heavy in financials, so if you already have an overweight in the financials, be careful.  Diversity is the only free lunch, but I think that this is a great way to collect some yield while you wait for things to improve across the board in the economy.

 

There are really two easy ways to play China and get a broad exposure: Mutual Funds and ETFs.  Invesco AIM has both, the ETF (PGJ) and an actively managed mutual fund (AACFX).  You can own either, but I really like the ETF.  In the ETFs there is the FXI and this one, PGJ.  If you go to http://yahoo.com/Finance and you put in PGJ and then graph it and compare it with FXI year to date, about April PGJ broke away from FXI and hasn't looked back since.  It's actually up more than 10% over the FXI.  So, really, if you're going to own a broad based index in China, why not own the best one?  It does actually pay a small dividend; I mean it, it's small, don't call your Mom.  But, hey, free money is free money.
 
It does own the big names in China in the top 10: Baidu, China Life, China Petro, China Telecom, China Unicom, PetroChina, Yanzou Coal, and Cnooc.  These are very large Chinese companies and it's a more conservative to way to play China that some of the small cap individual names that can be owned.  The top 10 is very weighted to telecom and energy, but the entire ETF is much more balanced: Consumer Discretionary (8.74%), Consumer Staples (2.79%), Energy (18.09%), Financials (7.00%), Health Care (4.30%), Industrials (10.95%), Information Technology (23.20%), Materials (7.90%), Telecommunication Services (12.39%), and Utilities (4.63%).
 
China is arguably the world's fastest growing economy.  Growth means people will pay up for the stocks.  The stock market community wants growth, likes growth, will pay up for growth.  Between Brazil and China, I like China.  Brazil is not a bad place to have money either, (you can own the EWZ for that).  You can start out with a lump sum, but with an ETF, consider using something like Sharebuilder.com to buy this thing weekly.  You could buy it every Tuesday (that's the day they do automatic investments at Sharebuilder), say $25/week and get a really great average price over the years.  Consider investing in this rather than trading.  It's really hard to trade a whole country and ETFs like this are meant to offer you a convenient way, with lower fees, to invest in a growing trend.  I think PGJ is a great way to play the growth in China, take a look.

Emerging Markets is a "hot" word in the investment community right now.  Why do people want to own those, because that is where the growth going forward in the world will come from.  Small companies have more room to grow than someone like Walmart*.  In fact, pull up a chart of Walmart* stock for the last 10 years and it looks terrible, not to mention their dividend just isn't there.  But, small companies can double by going from 2 stores to 4, 4 stores to 8.  Over the long haul, starting smaller is better.
 
Lets take a look under the hood, fantastic country break-down in this fund: Brazil (14.19%), China (9.32%), Mexico (8.69%), Philippines (8.44%), Indonesia (7.63%), Malaysia (5.46%), Turkey (5.33%), Thailand (5.27%), South Korea (4.49%) and South Africa (4.05%).  Very, very diverse.  No more than 4% of the fund is any one stock as well.  Banks are 11.93% of the portfolio which is not as scary as saying that about the US markets.  Foreign banks have done far better in the recent crisis than US banks, especially outside of Europe (European banks were actually terrible).
 
By owning this you're going to get active money management in key growing areas around the world.  I think this is another great place to place to save money over time.  It's not a place to trade in and out, really, no mutual fund should be traded because they contain short term trading fees.  This is a fund you can own for a decade or more.  The 10 year cumulative number in this fund is 175% return over the last 10 years.  Over the last 5 years owning this fund, you would still be up 130% over that period.  Even the 3 year cumulative number on this fund is 19%.  Only last year was down in the last 10 years (down 5%)  The 10 year average growth of the fund is 10.65%, that's much better than you can say about the US markets.  Take a look here if you have 20 years to save money.

First, what is a Floating Rate Fund?  Floating Rate loans are more senior in the capital structure than preferred or common stocks and other types of debt as well.  For this reason, Floating Rate Loans are at the top of the capital structure and are therefore much more secure than other things you can own.  Most Floating Rate Loans are collateralized.  That means there are assets tied to them that will be seized in the event of a default in the loan.  Something like 90% of all Floating Rate Loans are either paid in full or collected and then paid for with the seized assets.  Recovery statistics on defaulted loans is around 75-80%.  But, if you look at what has happened to Floating Rate Loans in October when Lehman Brothers Failed, you'll see they fell 25% that month.  Most of the damage Lehman did was in the credit markets.  This means that you now have an opportunity to own something that will go up in addition to paying interest.  These loans are longer in term than Money Markets and are usually paid in full within 3 - 5 years time.
 
Floating Rate Loans were designed to move very little.  In fact, from 2006 to mid July 2008 Floating Rate Funds did almost nothing.  So, on a reversion to the mean, a fancy term that just mean things will eventually find their way back to the way they are over the long term, you'll see Floating Rate Loans appreciate another 20% or so until the loans are trading close to par.  Being able to buy bonds at a discount makes bond investing almost as much fun as buying stock, but they traditionally move much less than you will see in the next 12-18 months.  Specifically regarding this point, The Hartford and Invesco AIM have Floating Rate Funds (HFLAX and AFRAX respectively) that can still go up significantly while the Fidelity Floating Rate Fund has already recovered nearly all of it's value.  This says two things.  You can own the Fidelity Floating Rate Fund as a best in breed that shouldn't keep you up at night, BUT, you will not see it go up nearly as much this year as the other two.  On the flip side, there is still significant upside to the Floating Rate Funds from The Hartford and Invesco AIM (but also the chance to under perform in a bad situation like they did in 2008).  You will have to decide if stability or appreciation is more important to you.
 
You can buy the C shares in these funds and use the Fund like a liquid CD or Money Market.  Just remember, the value will fluctuate up and down, something that CDs and Money markets will NOT do.  But, you can see price appreciation and the dividends are much bigger than any CD or Money Market you will find at your bank unless you're talking about 1 million dollars.  Plus, these loans are designed to reset their interest every 90 days and the Feds will eventually raise the interest rates, even if it's not until next year, which means that you will receive bigger dividends for owning a Floating Rate Fund in the future than you do right now.  Consider reinvesting the dividends into something exciting at the Fund Company you Choose.  An example would be, buy Floating Rate at Fidelity Advisers and then invest the dividends in New Insights or Latin America.  At The Hartford, buy the Floating Rate Fund and Invest the Dividends in Capital Appreciation II.  At Invesco AIM, you can buy the Floating Rate Fund and invest the dividends in China or Developing Markets.