Many times over the past two years (such as Armageddon Fears Are Overblown on June 1, 2012 and Can Doom and Gloom Save the Market? on September 16, 2011), I have made the case that the internal strength of the stock market was signaling that the economy was actually stronger than most thought.
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As stocks fluctuate from "overvalued" to "undervalued" due to stock market or internal cycles, the dividend yield also fluctuates between excessively rich and excessively meager.
The entire complex arrangement was treated by the U.S. Internal Revenue Service as a tax-free stock-for-stock merger.
Compensation should instead be based on phantom stock values, calculated by an independent internal unit.
Still, the government apparently put little stock in its chances: According to internal memos turned up in trial, the attorneys gave the case just 30% chance of winning.
With regulators at a loss and Boeing failing to detail what their internal investigation has shown, a cloud hangs over the stock, which remains essentially flat from a year ago.
But only a small proportion of Chinese companies are listed on the stock exchange and those that are rely mainly on internal finance.
Morgan Stanley reported that it was comfortable with it capital position, the results of its stress tests, and that it would dedicate its capital expenditures to capitalize its internal units, while PNC announced it would raise its common stock dividend.
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Phantom stock values are less prone to manipulation, since the internal unit calculating them has access to all the inside information, which is unavailable to the market.
If you bought a stock for its growth characteristics and the rate of growth is showing signs of slowing, that would be a cause for concern. (This would particularly be the case if it looks like internal factors had an adverse affect.) Conversely, if you bought a stock because the valuation was cheap, a merely decent (as opposed to a great) report might be acceptable.
In coming years, brokers and banks will likely have to report to the Internal Revenue Service (and to you) not just the gross proceeds of your stock and mutual fund sales (as they do now), but also what you paid for those shares.
Our team emphasizes internal idea generation, in-depth bottom-up research and independent analysis of each value stock monitored or owned by our clients.
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Before Navistar was finished with all the restatements, SEC investigations, lawsuits, fines, clawbacks and disciplinary actions against their former CFO and current CEO, internal investigations, restructuring, and delisting and eventual re-listing on the New York Stock Exchange, the company admitted as much.
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If you do decide to buy Apple's stock, as I did last week, remember that the pricing game has its own internal dynamics that may cause the price to move further away from value, before there is a correction.
Like Mr Kerviel, who used his knowledge of the bank's plumbing to create fictitious trades to cover his tracks, Mr Adoboli is alleged by sources close to an internal investigation of the affair to have bet the bank's money on the future price of various stock indices and to have then hidden these moves by creating offsetting fake transactions.
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