USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.
Q: Do stock buybacks increase companies' profit?
A: Companies are going crazy buying back their own shares. And these buybacks create the mirage that earnings per share are rising. Savvy investors know how to look beyond this distortion.
Members of the Standard & Poor's 500 boosted the amount they spent buying back their own stock by 30.5% in the fourth quarter of 2013 versus the same year-ago period, says S&P Dow Jones Indices.
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In a positive development for investors, while companies were busily buying back stock, they didn't issue new shares as rapidly. The result? A major bump to earnings per share.
IGI Laboratories, Inc. engages in developing, manufacturing, filling, and packaging topical semi-solid and liquid products for cosmetic, cosmeceutical, and pharmaceutical customers in the United States. The company�s products are used for various skin conditions, including the treatment of symptoms of dermatitis, acne, psoriasis, and eczema. It offers contract formulation and contract manufacturing services to a range of topical formulations, including creams, ointments, lotions, gels, and topical liquids. The company is also developing a portfolio of prescription generic formulations in topical dosage forms. IGI Laboratories, Inc., through its license agreement with Novavax, Inc., utilizes the Novasome lipid vesicle encapsulation and certain other technologies for applications in animal pharmaceuticals, biologicals, and other animal health products; foods, food applications, nutrients, and flavorings; cosmetics, consumer products, and dermatological over-the-counter and prescription products; fragrances; and chemicals, including herbicides, insecticides, pesticides, paints and coatings, photographic chemicals, and other specialty chemicals. The company was formerly known as IGI, Inc. and changed its name to IGI Laboratories, Inc. in May 2008. IGI Laboratories, Inc. was founded in 1977 and is based in Buena, New Jersey.
Advisors' Opinion: - [By Holly LaFon]
The Barclays Aggregate Index rose by 0.57% in 3Q13, having stood at a loss of -0.36% the day before the FOMC's declaration to not slow QE. Despite the bounce, the Index remains in negative territory YTD and for the trailing 12-months at -1.77% and -1.68%, respectively. In stark contrast to 2Q13, Investment Grade (IG) corporate spreads tightened 10bps during 3Q13, producing a positive nominal return of 0.82% and an excess return of 0.92%. The respective YTD total returns in IG remain a disappointing -2.62%, but excess returns are still positive at 0.61% YTD. The 1-Yr results for IG Credit now fall to a nominal -1.58%, but 1.79% in excess of Treasuries.
Top 5 Prefered Companies To Watch For 2014: Howard Hughes Corp (HHC)
The Howard Hughes Corporation, incorporated on July 1, 2010, is a developer and operator of master planned communities and mixed use properties. The Company operates three segments: master planned communities, operating assets and strategic developments. The Company specializes in the development of master planned communities and ownership, management and the redevelopment or repositioning of real estate assets generating revenues, also called operating assets, as well as other strategic real estate opportunities in the form of entitled and unentitled land and other development rights, also called strategic developments. In August 2012, the Company purchased 70 Corporate Center office building, located in downtown Columbia, MD.
Master Planned Communities
The Company�� master planned communities segment consists of the development and sale of residential and commercial land, primarily in projects in and around Las Vegas, Nevada; Houston, Texas; and Columbia, Maryland. Revenues are derived primarily from the sale of finished lots and undeveloped pads to both residential and commercial developers. Additional revenues are earned through participations with builders in their sales of finished homes to homebuyers. The Company�� master planned community in Maryland includes four separate communities that are collectively referred to as the Maryland Communities. Its master planned communities include over 12,500 acres of land remaining to be sold.
Residential sales, which are made primarily to home builders, include standard and custom parcels, as well as parcels designated for detached and attached single- and multi- family homes, ranging from entry-level to luxury homes. Commercial sales include land parcels designated for retail, office, resort, services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities. Spanning the western rim of the Las Vegas Valley and located approximately ni! ne miles from downtown Las Vegas, its 22,500 acre Summerlin master planned community is consists of planned and developed villages and offers suburban living with accessibility to the Las Vegas Strip. With 26 public and private schools, five institutions of higher learning, nine golf courses, and cultural facilities, Summerlin was an integrated community, as of December 31, 2011. As of December 31, 2012, there were approximately 40,000 homes occupied by approximately 100,000 residents.
As of December 31, 2012, Summerlin is consisted of hundreds of neighborhoods located in 19 developed villages with nearly 150 neighborhood and village parks, all connected by a 150-mile long trail system. As of December 31, 2012, Summerlin included approximately 2.1 million square feet of developed retail space, 3.2 million square feet of developed office space and three hotel properties containing approximately 1,400 hotel rooms, as well as health and medical centers, including Summerlin Hospital and the Nevada Cancer Institute. Summerlin is divided into three regions or projects: Summerlin North, Summerlin West and Summerlin South. As of December 31, 2012, Summerlin had approximately 5,184 residential acres and 890 commercial acres remaining to be sold. Bridgeland is a master planned community near Houston, Texas consisted of approximately 11,400 acres, as of December 31, 2011. There were approximately 1,800 homes occupied by approximately 6,250 residents as of December 31, 2012.
Bridgeland�� plan includes four villages, which include Lakeland Village, Parkland Village, Prairieland Village and Creekland Village. Bridgeland�� first five neighborhoods are located in Lakeland Village. The Lakeland Activity Center is anchored by a 6,000 square foot community center and features a water park with three swimming pools, two lighted tennis courts and a fitness room. As of December 31, 2012, Bridgeland had approximately 3,635 residential acres and 1,226 commercial acres remaining to be sold. The C! ompany�� s Maryland communities consist of four distinct projects: Columbia, Gateway, Emerson and Fairwood. Columbia, located in Howard County, Maryland. As of December 31, 2012, Columbia was home to approximately 100,000 people. Columbia�� full range of housing options is located in 10 distinct, self-contained villages. Each village is consists of several neighborhoods, a shopping center and community and recreational facilities.
As of December 31, 2012, the Company owned approximately 35 net acres of land in Columbia. The land consists of raw land and subdivided land parcels readily available for new development. Gateway is a 630-acre master planned corporate community located in Howard County, Maryland. Gateway offers office space in a campus setting with approximately 63 commercial acres. Emerson is a master planned community located in Howard County, Maryland and consisted of approximately 520 acres, as of December 31, 2011. There were approximately 1,210 homes occupied by approximately 3,407 residents, as of December 31, 2012. Emerson offers a range of single-family and townhome housing, which is located in Maryland�� public school districts.
As of May, 2012, the residential component of this project has been completely sold out. In addition, 28 of its townhouse lots were under contract, as of December 31, 2012. As of December 31, 2012, it had sold 28 townhouse lots. Fairwood is a developed master planned community located in Prince George�� County, Maryland, consists of approximately 1,100 acres. As of December 31, 2012, 11 commercial acres were available for sale. There were approximately 1,200 homes occupied by approximately 2,600 residents on December 31, 2012. As of December 31, 2012, Fairwood consisted of single-family and townhouse lots, as well as undedicated open space and two historic houses. In addition to the commercial acres remaining to be sold, it owns a few undedicated open space parcels, and 24 acres of unsubdivided land. The Woodlands is a mixed-use master ! planned c! ommunity situated 27 miles north of Houston and consists of 28,400 acres. The Woodlands is a community that integrates recreational amenities, residential neighborhoods, commercial office space, retail shops and entertainment venues.
As of December 31, 2012, approximately 28% of The Woodlands land consisted of green space, including parks, pathways, open spaces, golf courses and forest preserves. As of December 31, 2012, the Woodlands has full or partial ownership interests in commercial properties totaling 436,042 square feet of office space, 201,280 square feet of retail and service space and 393 rental apartment units. It also own and operated a 440 room resort and conference center facility and a 36-hole golf and country club, as of December 31, 2012. As of December 31, 2012, The Woodlands had approximately 857 acres of unsold residential land, representing approximately 2,750 lots, and approximately 961 acres of unsold land for commercial use. The Woodlands includes a waterway, outdoor art and an open-air performance pavilion, a resort and conference center, a luxury hotel and convention center, educational opportunities for all ages, hospitals and health care facilities and office space.
Operating Assets
The Company�� operating assets segment contains 26 properties and investments, consists of commercial mixed-use, retail and office properties. As of December 31, 2012, these assets included nine mixed use and retail properties, seven office properties, a resort and conference center, a 36-hole golf and country club, a multi-family apartment building, two equity investments and five other assets. Ward Centers is consists of approximately 60 acres situated along Ala Moana Beach Park. As of December 31, 2011, Ward Centers included a 665,000 square foot shopping district, which consisted of six specialty centers and over 140 shops, a variety of restaurants and an entertainment center, which included a 16 screen movie theater.
South Street Seaport! is compr! ised of three mid-rise buildings and the Pier 17 pavilion shopping mall located in a historic waterfront district on the East River in Manhattan. The Company also leases 24,000 square feet for sublet to retailers at the base of an adjacent 1.1 million square foot office tower. All of the property except the office tower retail space is subject to a lease with the City of New York. As of December 31, 2012, the total property controlled by us approximates 300,551 square feet of leasable space, substantially all of which is retail. As of December 31, 2011, anchored by Macy�� and Sears, Landmark Mall was an 879,294 square foot shopping mall located in affluent Alexandria, Virginia. This mall is located nine miles west of Washington, D.C. and the Pentagon. Park West is a 249,168 square foot open-air shopping, dining and entertainment destination in Peoria, Arizona.
Park West is approximately one mile northwest of the Arizona Cardinals��football stadium and the Phoenix Coyote�� hockey arena. Park West has an additional 100,000 square feet of available development rights as permitted for retail, restaurant and hotel uses. Rio West Mall is located in Gallup, New Mexico, which is 521,194 square foot shopping center. Riverwalk Marketplace is located along the Mississippi River in downtown New Orleans. The 193,874 square foot shopping center is consists of more than 100 local and national retail shops, restaurants and entertainment venues. Cottonwood Square is a 77,079 square foot community center located in Salt Lake City, Utah. 20 & 25 Waterway Avenue are two retail properties located in The Waterway Square commercial district in The Woodlands Town Center. The properties total 49,972 square feet. Waterway Garage Retail is attached to The Waterway Square Garage located within The Woodlands Town Center.
The Company owns a 99% joint venture interest in an entity that has a ground leasehold interest in the land underlying a 226,000 square foot office building located at 110 N. Wacke! r Drive i! n downtown Chicago. It owns five office buildings and is a master tenant of a sixth office building. The buildings consists of approximately 491,000 square feet in the heart of downtown Columbia including American City Building (master tenant), the Columbia Association Building, the Columbia Exhibit Building, the Ridgley Building, the newly acquired building known as 70 Columbia Corporate Center, and the Columbia Regional Building. This group also consists of the Merriweather Post Pavilion, an outdoor amphitheater and concert venue. 4 Waterway Square is a nine-story office building located within The Woodlands Town Center, which totals 218,551 square feet. 9303 New Trails is a four-story office building located within the Research Forest district of The Woodlands. The property totals 97,705 square feet.
1400 Woodloch Forest Drive is a five-story office building located at the entrance to The Woodlands Town Center, which totals 95,667 square feet. 2201 Lake Woodlands Drive is a two-story office building located in the East Shore commercial district of The Woodlands. The property totals 24,119 square feet. The Woodlands Resort and Conference Center is located approximately two miles south of The Woodlands Town Center. As of December 31, 2012, the property operated 440 hotel rooms, has 90,000 square feet of meeting space. The Club at Carlton Woods is located within the communities in The Woodlands. As of December 31, 2012, the Club at Carlton Woods included an 18-hole Jack Nicklaus Signature Golf Course and an 18-hole Tom Fazio Championship Course, in addition to two clubhouses, spa, tennis, and fitness facilities. The wholly owned Waterway Square Garage, located within The Woodlands Town Center, is a five-story parking garage, which includes1,933 parking spaces and 21,513 square foot of retail space.
As of December 31, 2012, the Company had an 83.55% interest in a 393-unit apartment building located within The Woodlands Town Center. Forest View apartments are a 216 unit, multi-f! amily ren! tal community. Timbermill apartments are a 256 unit multi-family rental community. The Company owns 100% interests in Hexalon Real Estate, LLC (Hexalon). Hexalon owns a 1.42% interest in Head Acquisition, LP, a joint venture between GGP, Inc. (GGP), Simon Property Group, L.P. and Westfield Group. The partnership owns certain retail mall interests. It owns a 20% interest in three office/industrial buildings located in The Woodlands Research Forest district within The Woodlands. The portfolio consists of 132,050 square feet. The Company has an indirect ownership interest of approximately 6.8% in the Summerlin Hospital Medical Center. This property is a 450-bed hospital located on a 32-acre medical campus near Las Vegas. It owns a 50% interest in Stewart Title, a company located in The Woodlands, which handles the residential and commercial land sale closings for The Woodlands.
Strategic Developments
The Company�� strategic developments segment is made up of near, medium and long-term development projects for 21 of the Company�� real estate properties. As of December 31, 2012, its development projects included Ala Moana Condo Project, Bridges at Mint Hill, Columbia Parcel Done, 3 Waterway Square, Alameda Plaza, AllenTowne, Century Plaza, Circle T Ranch and Power Center, Cottonwood Mall, Elk Grove Promenade, Fashion Show Air Rights, Kendall Town Center, Lakemoor (Volo) Land, Maui Ranch Land, Nouvelle at Natick, Redlands Promenade, The Shops at Summerlin Centre, Village at Redlands and West Windsor. It owns the rights to develop a residential condominium tower over a parking structure at Ala Moana Center in Honolulu, Hawaii. Bridges at Mint Hill property consists of vacant land located southeast of Charlotte, North Carolina. The parcel is approximately 210 acres and consists of 120 developable acres and is zoned for approximately 1.3 million square feet of retail, hotel and commercial development.
Alameda Plaza is located in Pocatello, Idaho at the intersection of ! Yellowsto! ne Park Highway and Alameda Road. The 22-acre site contains 190,341 square feet of mostly vacant retail space. AllenTowne consists of 238 acres. Century Plaza is located on the eastern side of Birmingham, Alabama. Circle T Ranch is 20 miles north of downtown Fort Worth, in Westlake, Texas. The property is approximately 279 total acres on two parcels. The Circle T Ranch parcel contains 128 acres while the Circle T Power Center parcel contains 151 acres.
Cottonwood Mall is located 7.5 miles from downtown Salt Lake City, in the city of Holladay, Utah. Kendall Town Center is a mixed-used site located at the intersection of North Kendall Drive. It owns the 70 acres, which are entitled for 621,300 square feet of retail, 60,000 square feet of office space, and a 50,000 square foot community center. Lakemoor (Volo) Land is 40-acre vacant land parcel is located 50 miles north of Chicago in a growing suburb. Maui Ranch Land consists of two, non-adjacent, 10 acre undeveloped land-locked parcels located near the Kula Forest Preserve on the island of Maui, Hawaii. The land is zoned for native vegetation.
Nouvelle at Natick is a luxury condominium community consists of 215 residences located in the Natick Collection in the Boston suburb of Natick, Massachusetts. Nouvelle at Natick�� amenities include a 4,000 square foot private club, a 2,800 square foot fitness center and a 1.2-acre rooftop garden with winding boardwalks, native grasses, flowers and trees. As of December 31, 2012 the condominium units were sold out. Redlands Promenade is a 10 acre site located at Eureka, which is entitled for 125,000 square feet of retail development.The Redlands Mall is a single-level, 174,787 square foot enclosed shopping center at the intersection of Redlands Boulevard and Orange Street. As of December 31, 2012, anchored by CVS, Denny�� and Union Bank, the site is located in downtown Redlands two blocks south of the Redlands Promenade site. West Windsor is a former Wyeth Agricultural Research & Deve! lopment C! ampus on Quakerbridge Road. The land consists of 658 total acres.
Advisors' Opinion: - [By George Putnam]
With a new CEO and board of directors it emerged from court protection in November, 2010 as two companies, General Growth, a REIT, and Howard Hughes Corp. (HHC), which focuses on master planned communities.
Top 5 Prefered Companies To Watch For 2014: Alpha and Omega Semiconductor Limited(AOSL)
Alpha and Omega Semiconductor Limited engages in the design, development, and supply of a range of power semiconductors worldwide. The company offers power discrete product line comprising trench MOSFETs, electrostatic discharge, protected MOSFETs, and SRFETs; and power ICs. Its products are used in notebooks, netbooks, flat panel displays, mobile phone battery packs, set-top boxes, portable media players, and power supplies. The company sells its products to distributors. Alpha and Omega Semiconductor Limited is based in Hamilton, Bermuda.
Advisors' Opinion: - [By Tim Melvin]
This split among industry segments has created some value opportunities as those companies with high exposure to PCs are very cheap. And while the move towards smart phones and tablets may continue, the PC is not dead — demand will pick up along with the economy.
Alpha and Omega Semiconductor (AOSL) Alpha and Omega Semiconductor (AOSL) is a designer, developer and global supplier of a broad portfolio of power semiconductors. The portfolio of power semiconductors includes more than 1,400 products, and has grown rapidly with 195 new products introduced last year alone. Its semiconductors are used in a wide range of products, including things like personal computers, flat panel TVs, LED lighting, smart phones, and telecommunications equipment.
Top 5 Prefered Companies To Watch For 2014: Bridgepoint Education Inc (BPI)
Bridgepoint Education, Inc. (Bridgepoint), incorporated in May 1999, is a provider of postsecondary education services. The Company�� academic institutions include Ashford University and University of the Rockies. Its institutions deliver programs primarily online, as well as at their traditional campuses. As of December 31, 2011, the Company had 86,642 total students enrolled in its institutions. Bridgepoint�� institutions conduct ongoing faculty and student assessment processes and provide a range of student services. The Company is also focused on developing new technologies, such as through Waypoint Outcomes, Constellation, and the development of its institutions' mobile learning platforms. The Company has developed Constellation to replace third party textbooks with digital course materials. Constellation materials are displayed in a browser-based platform. In January 2012, Bridgepoint introduced Thuze.
Ashford University offers associate's, bachelor's and master's degree programs online, as well as bachelor's degree programs at its campus in Clinton, Iowa. Ashford University consists of four colleges: the College of Business and Professional Studies, the College of Education, the College of Health, Human Services and Sciences, and the College of Liberal Arts. University of the Rockies is a graduate institution that offers master's and doctoral degree programs in the social and behavioral sciences. Classes at University of the Rockies are presented in a progressive online format, as well as at its campus in Colorado Springs, Colorado. Waypoint Outcomes provides learning and assessment software to K-12 and higher education institutions nationwide.
Constellation provides mobile access to students over the Internet, as well as on a variety of devices, including Web-enabled smartphones and tablet devices. Constellation is a cloud-based and is compatible across operating systems, browsers and mobile technologies. The Company has developed Constellation-enabled courses pri! marily in core classes to reach students. As of December 31, 2011, approximately 76% of Bridgepoint�� institutions' students had taken a Constellation-enabled course. As of December 31, 2011, it had 32 Constellation titles available. Thuze is a cloud-based, multi-platform, collaborative learning environment for students to interact with their course digital materials and with each other. Thuze provides students with the resources to work from both their desktop computers and also from their tablets and smartphones. It launched Thuze as a pilot program with publishers in higher education. During the year ended December 31, 2011, the Company deployed new mobile application technology at Ashford University. The Company has online students from all 50 states and from the District of Columbia. It has students from 69 different countries. As of December 31, 2011, over 34,400 students have graduated from the Company�� institutions, with approximately 15,200 students graduating from its institutions, during 2011.
Students finance their education at the Company's institutions through Title IV programs and Non-Title IV funding sources. Title IV programs includes The Federal Family Education Loan (FFEL) and Federal Direct Loan Programs. FFEL and Federal Direct Loan Programs consist of two loans: Stafford loans, which are either subsidized or unsubsidized, and PLUS loans, which are made available to graduate and professional students, as well as parents of dependent undergraduate students. Non-Title IV funding sources include other funding sources, which consist of cash, private loans, state grants, corporate reimbursement, military benefits and institutional loans. The Company has engaged Affiliated Computer Services, Inc. (ACS) to provide call center and transactional processing services for the online financial aid student populations at its institutions, including services related to disbursement eligibility review and Title IV fund returns. If Bridgepoint�� engagement with ACS were terminate! d, it wou! ld handle these processing services using its own resources or engage another third party vendor.
The Company�� institutions provide student support services, including academic, administrative and technology support. As of December 31, 2011, Bridgepoint�� institutions offered approximately 1,430 courses, 85 degree programs and 140 specializations. Its institutions offer programs and specialization areas through Ashford University's four colleges: the College of Business and Professional Studies; the College of Education; the College of Health, Human Services and Science; and the College of Liberal Arts, and through the University of the Rockies' two schools: the School of Organizational Leadership and the School of Professional Psychology. The Company�� leads are primarily generated from online sources. Its main source of leads is third party online lead aggregators. It also purchases keywords from search providers to generate online leads directly. In addition, the Company has an in-house team focused on generating online leads.
Advisors' Opinion:
