Buy-backs and Mergers

Buy-backs and Mergers Keep a “Floor” Under U.S. Stock Prices

by Louis Navellier

April 13, 2015

The S&P 500 gained 1.7% last week (and is up +2.1% year-to-date); but there is still a massive leadership shift underway that is continuing to bolster the relative performance of mid-cap domestic stocks, as a strong U.S. dollar continues to “pinch” the sales of large multinational companies that dominate the S&P 500.

Euro Notes ImageSo far, 2015 has been characterized by (1) the continuing collapse of interest rates in the euro-zone, (2) persistent deflation in the euro-zone, and (3) a strong U.S. dollar relative to the euro. This causes Treasury yields to decline as foreign capital pours into the U.S.  This ultra-low interest rate environment will continue to fuel more stock buy-backs, since many companies have a higher ROE than the interest rates they must pay out on their loans.Corporate America will continue to borrow cash and buy back their respective shares. (Trimtabs recently reported that corporate stock buy-backs hit an all-time record.)

The breadth and power of the overall stock market is actually becoming narrower, since the money flowing into the stock market is chasing fewer stocks.  As a result, stock picking is crucial.  With the earnings season beginning, the financial media continues to raise the alarm that sales growth has suddenly disappeared for the S&P 500.  Overall, that is true, but it is not true for the domestic companies that are emerging as market leaders.  Wall Street is hungry for those few stocks that continue to report real sales growth, steady earnings growth, a good dividend yield, and strong stock buy-back activity.

German and Japanese 10-year bonds now yield only 0.16% and 0.36%, respectively, and the Swiss National Bank sold $390 million in 10-year government bonds at a negative yield of -0.055% last week. Meanwhile, U.S. 10-year Treasury bonds yield a comparatively hefty 1.95%, so the Federal Reserve should have no real motivation to raise interest rates any time soon, no matter what the financial media may say.

In This Issue

Ivan Martchev’s Income Mail will examine the investment implications of last week’s Hong Kong market surge, which is mostly due to China opening a trading link between Shanghai and Hong Kong. This flow of funds is exacerbated by the ongoing corruption crackdown in China, which has made many wealthy Chinese nervous,; so they are rushing to diversify their wealth in Hong Kong stocks. In addition, Chinese investors are using this new opening to convert their yuan into Hong Kong dollars.  Previously, they went to Macau to gamble with their yuan, cashing out in Hong Kong dollars, which is clearly an inefficient way to convert currencies! Ivan will also include some dramatic charts of the boom-bust cycle in China.

In Growth Mail, Gary Alexander will examine the M&A landscape, as companies borrow cheap money to buy other companies to improve their own earnings, creating windfall profits for investors.  According to Dealogic, 15 deals announced so far this year have been valued at more than $10 billion, the fastest rate ever for mega-deals. Some of the biggest new deals are emerging from Europe, where negative interest rates mean companies can borrow cheaper than ever to fuel mergers and acquisitions.  So far this year, over $1 trillion in deals have been announced, so 2015 could become be the biggest M&A year ever.

Then, in my Stat of the Week column, I’ll expand on how America is “importing deflation” from Europe, and why the bulk of the economic evidence continues to give the Fed plenty of reasons to keep rates low.

Income Mail:
Hong Kong is Going Parabolic
by Ivan Martchev
Hong Kong Rally Beneficiaries
Implications for U.S. Interest Rates

Growth Mail:
M&A Activity Could Revive Earnings (and the Market)
by Gary Alexander
Could We See Some Positive Earnings Surprises Soon?
Mergers & Acquisitions Could Boost Earnings & Deliver Windfall Profits
Thank You, Rich Folks!

Stat of the Week:
Import Prices Fall 10.5% as America “Imports Deflation”
by Louis Navellier
Crude Oil Prices Reach 7-Week High
FOMC Minutes Confirm a “Dovish Bias” Rules the Fed

Income Mail:

Hong Kong is Going Parabolic

by Ivan Martchev

Hong Kong’s market is one global market that doesn't need currency-hedged ETFs as it has been de facto denominated in U.S. dollars via the hard peg of the local currency. Since 1983 the Hong Kong dollar has moved very little relative to the U.S. dollar, save for a few adjustments of the tight trading band fixing it at its present level of 7.75HKD.

It is interesting to note that as the mainland Chinese are now actively managing the parabolic rise of the Shanghai Composite (as shown in green in the chart below), they are trying to do the same with the former British colony as they opened the floodgates towards Hong Kong shares on March 27, 2015. This has resulted in the regular hitting of quotas for purchases of Hong Kong shares by mainland investors. Last Wednesday and Thursday, Chinese investors bought the maximum daily allowance of 10.5 billion yuan, making the Hong Kong Hang Seng Index the best performing global market last week, up 10%.

HangSengIndex.png

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

A rise of 10% in a week for a major benchmark index is not normal and it typically happens only after a major stock market bottom such as the bottom hit in March 2009. There is no recent “bottom” in Hong Kong – just the careful management of the flow of funds towards Hong Kong.

I don't know how high the Hang Seng index will rise but suffice to say that if central planners like the mainland Chinese want to get an asset price up, they can do a lot to move the market via relaxation of trading restrictions. It is peculiar to note, though, that they have been unsuccessful in arresting the decline of the mainland real estate market over the past year. It seems like the encouragement of the parabolic rise of the Shanghai Composite from 2K to 4K in the last year is an attempt to dampen the negative wealth effect that is evident from the downturn in the mainland real estate market.

I am not sure the substitution of a stock market bubble for a real estate bubble is a real solution for the mainland Chinese. I think it could compound the problem in 2016. Before then we may experience one of the legendary Chinese momentum markets similar to the way the Shanghai Composite moved from a low of around 1000 in 2005 to over 6000 in 2007.

Hong Kong Hang Seng Index ImageThe all-time high in the Hong Kong Hang Seng index is 32K while the benchmark closed at 27.3K last week. Given the relaxation of trading restrictions, it seems a foregone conclusion that we will retest that all-time high soon in 2015. The Shanghai Composite closed over 4K last week and it too is being prepped by the Chinese authorities for an assault on its all-time high at 6124.

I think that an index “managed” by regulators is a terrible policy as it can create massive misallocation of capital. The Chinese clearly believe that such a practice is beneficial to their economy as they have good experience with misallocation of capital in their central planning policies. I think we are rapidly approaching the moment when the interventionist policies of the mainland Chinese will be proven wrong.

Still, one lesson we learn having experience dealing with the stock market is that one should never stand in front of a momentum market. It is comparable to jumping in front of a moving train. The legendary George Soros, who generated $40 billion in profits after 40 years of trading in his Quantum fund, astutely noted in 2009, “When I see a bubble forming, I rush in to buy, adding fuel to the fire. That is not irrational.”

The rational trade here would be for one to be long with the expectation that the bubble will pop in the next 6-12 months based on the expectation that the real estate market in China is likely to drag the economy into a precarious situation at a time of record leverage in the mainland financial system.

Shanghai Stock Exchange Composite Index Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Typically, the way bubbles progress, the index keeps delivering accelerating gains based on the “greater fool” theory. After the last buyer is in, the index has a sharp correction and a weak rebound that fails to make a fresh all-time high. After a lower high is established, the index rolls over and unravels the vast majority of the gains. The last such trip for the Shanghai Composite was its move from 998 (in 2005) to 6124 (in October 2007) and back to 1665 in 2008. I think we will see something similar here with the caveat that there is absolutely no sign that the index is ready to roll over. The train full of greater fools is still gathering momentum at the moment.

Hong Kong Rally Beneficiaries

Right now mainland Chinese investors are officially using 2X more leverage to buy Chinese stocks than investors in the U.S. relative to the size of their market. Bloomberg reported that “the outstanding balance of the margin debt on China’s smaller exchange in Shenzhen was 502.5 billion yuan on April 1. That puts the combined figure for China’s two main bourses at the equivalent of about $242 billion. In the U.S., which has a stock market almost four times the size of China’s, margin debt on the New York Stock Exchange was about $465 billion at the end of February.”. If one looks closer, beyond the official statistics, one finds that the notorious local unregulated shadow banking system is likely involved in the parabolic rise of Chinese equities. We have no clear data on how much that adds to the leverage ratios.

This leverage is spilling over in Hong Kong. This makes Hong Kong iShare (EWH) a diversified way to possibly capitalize on moves in the local stock market. EWH is actually weighted differently than the Hang Seng Index as it follows the MSCI Hong Kong index, the benchmark for foreign investors interested in the former British colony’s stock market. EWH already made an all-time high last week.

EWH holdings are not expensive. They trade at an average PE ratio of 12.6 and a price to book of 1.3. About two-thirds of the ETF holdings are in real estate and financial companies, which have long dominated the trading hub. Still, the point I would like to make is that the rise in the Hong Kong market is engineered via the mainland floodgates, and mainland investors are not always responsible users of leverage.

The obvious beneficiary of surging Hong Kong stock market volumes is the stock exchange itself, which is publicly traded as Hong Kong Exchanges and Clearing (HKXCY). The reasons why the stock trades at an unusually high PE multiple of 56 is because the company has a massive operating margin of 63%. Surging volumes for a profitable exchange should mean surging profits as long as the floodgates keep letting mainland Chinese investors do with Hong Kong what they were already doing with the mainland market.

One stock that has not yet been caught in the frenzy is Hang Seng Bank (HSNGY), which still trades at a forward PE of 15. Major Chinese banks have been somewhat lagging due to their exposure in the mainland real estate mess, but in this case the bank is domiciled in Hong Kong and as such can be considered as “the lesser evil’ when compared to mainland banks.

Implications for U.S. Interest Rates

I think that the weakness in commodity prices – which is related to a slowdown in mainland China, as well as the strength in the dollar – is giving FOMC members reasons to delay any interest rate hikes. I believe the FOMC is reluctant to initiate a series of rate hikes that could disrupt the markets during a time of a global deflationary shock.

Thirty Day Fed Funds - Daily OHLC Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Such considerations are the reasons why December 2016 fed fund futures have been rallying and in effect are showing a reduced probability of rate hikes, as estimated by fed funds futures traders. At 98.92 at the close last week, that contract estimated four quarter-point rate hikes to push the fed funds rate to 1.08% by December 2016. A month ago the same fed funds futures contract indicated six quarter-point hikes.

A deteriorating economy in China also suggests lower long-term U.S. interest rates via the weakness in global aggregate demand and safe haven status of Treasuries. While Treasuries were surprisingly down last week after a weak employment report, I think we will see a new all-time low of 10-year Treasury yields in 2015; the 30-year T-bond already did that in January of this year.

Twenty Year Zero Coupon United States Treasury Index Fund Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

This suggests that long high-quality duration is a trade that has not run its course despite any disruptions that may come to the bond market on the news of a single Fed rate hike. The U.S. has the highest long-term interest rates of any developed global economy and that will keep attracting capital to the U.S. Treasury market in 2015.

Growth Mail:

M&A Activity Could Revive Earnings (and the Market)

by Gary Alexander

“The stock market is going to fluctuate.  Sometimes it will fluc down; other times it will fluc up.”

 –Louis Rukeyser

The Dow Jones Industrial Average finished the first quarter down 0.26% while the S&P 500 rose 0.44%.  Something very similar happened at the start of 2014, when the Dow fell 0.71% and the S&P rose 1.3%.  However, those small positive and negative changes masked greater volatility when measured by months:

In 2015, the Dow fell 3.7% in January, then roared back 5.6% in February and fell 1.7% in March. This seemed like an instant replay of the opening quarter last year, when the Dow fell 3.6% in January, rose 4.3% in February, and then rose 0.7% in March. This sounds like a bit of “déjà vu all over again.”

The similarities continue.  Last year, there were fears about shrinking economic growth due to a hard winter.  First-quarter GDP fell 2.1% in 2014, throwing a scare into Wall Street.  Last year at this time, there were also great debates about whether the Federal Reserve would raise interest rates this year (i.e., 2014), or would they wait until 2015?   There were also concerns about a slowing Europe and tepid emerging markets.  Concerns about a slowdown in the first-quarter earnings outlook also arose.

United States Dollar ImageThe biggest changes over the last 12 months are the rise of the U.S. dollar and the corresponding fall in the price of oil, among other commodities.  While that trend has taken a bite out of energy sector profits, lower oil prices also tend to boost consumer confidence and – after a while – consumer spending.

Michael Wilson, chief investment officer at Morgan Stanley Wealth Management, says “History shows that big positive moves in the U.S. dollar and declines in oil prices tend to have disproportionately negative effect on S&P earnings estimates initially, but that these effects are subsequently reversed.”

Could We See Some Positive Earnings Surprises Soon?

So far we have seen a wave of negative warnings from company managements and analysts. In the first quarter, there have been about five times as many instances of negative guidance as positive guidance. Analysts have also turned more negative. From October through mid-March the consensus forward earnings estimate for the S&P 500 fell by more than 5%, the biggest decline since the financial crisis and Great Recession of 2008-2009.  With all that downbeat talk about declining earnings estimates and managers issuing downbeat quarterly guidance, you’d have to say that stocks have done darn well to rise 2% YTD.

Last year, the economy and corporate earnings turned on a dime between the first and second quarters:

  • In 2014, real GDP declined 2.1% in the first quarter but then rose 4.6% and 5.0% in the next two quarters.  With a modest 2.2% gain in the fourth quarter, the full-year 2014 GDP gain was 2.4%.
  • Corporate profit growth roughly followed GDP in 2014, with corporate profits declining 9% in the first quarter (vs. the previous quarter), followed by an 8% gain in the next quarter.
  • Something similar happened in 2011.  First-quarter GDP fell 1.5%, but the next three quarters were positive, capped by a 4.6% gain in the fourth quarter and +1.7% for the full year of 2011.*

*Source: March 27, 2015 BEA press release, including quarterly GDP and profits data, 2011 to 2014.

This history could repeat. Over the last two weeks, analysts have been revising their S&P 500 earnings estimates up about 1% from the mid-March trough. The consensus expectation for energy sector earnings in the first quarter is -63.4%, so ex-energy, the rest of the market could deliver positive earnings. Morgan Stanley has postulated that management guidance has downplayed first-quarter results so far that positive surprises are likely. Even with a bad quarter, analysts still forecast $120.87 full-year 2015 S&P earnings (up 2.6% over 2014) and $136.42 earnings next year, representing a huge 12.9% earnings leap in 2016.

Mergers & Acquisitions Could Boost Earnings & Deliver Windfall Profits

Since tomorrow is tax day, let me share my personal “earnings surprise” when computing my 2014 taxes.  As it turned out, I owe the IRS a substantial sum (the result of a better-than-expected earnings year), so I looked at my brokerage account to see what I could sell to raise cash.  I discovered that two stocks were sold out from under me in mid-March, providing more than enough money to meet my IRS tax bill. Both stocks were sold in mergers at a much higher stock price than existed before the deal, so I made enough profits on these stocks to pay for the capital gains tax on their sales as well as my sizeable 2014 tax bill.

One example was PetSmart, a stock I bought in 2006 (before I began working on MarketMail), because I thought most people spent outrageous amounts of money on their furry friends.  A year ago, PetSmart was an unloved little puppy, the fifth-worst performer among retailers in the S&P in the first half of 2014. Of the 25 analysts that later updated their recommendations, 24 gave the equivalent of a hold rating and one had the equivalent of a sell, so the stock was depressed.  Shares were $55 last May and $59.80 on June 30, right before management began shopping the company. Shares rose to around $70 in one week, followed by a buyout at a record-high $83-a-share offer, thus helping me to meet my tax bill tomorrow.

Global M&A volume in the first quarter of 2015 rose to $887.1 billion, up 23% from the same quarter last year, and the pace has picked up in early April – pushing year-to-date deals over the $1 trillion mark.

Here are three examples from last week: (1) Mylan bid $28.9 for rival drug maker Perrigo; (2) Royal Dutch Shell agreed to buy BG Group for about $70 billion; and (3) a private equity firm (Permira) announced that it would team up with the Canada Pension Plan Investment Board to purchase Informatica, an enterprise software provider based in Redwood City, Calif., for $5.3 billion.

Fish Eating Fish ImageSo far this year, 15 deals have been announced for over $10 billion, the highest number of “mega-deals” on record, according to Dealogic.  Prior to the Shell deal, the biggest deal was a merger of H.J. Heinz, Kraft Foods, and Brazilian private equity firm 3G Capital in a $46 billion deal midwifed by Warren Buffett, creating the third-biggest food and beverage conglomerate in the world. (Kraft shares rose 36% on the day of the announcement.) Another recent mega-deal was Cheung Kong’s $40.5 billion bid for Hutchison Whampoa, reflecting the fact that M&A fever is now rife in Asia, too.

The biggest surprise this year might be the fact that ultra-low interest rates could spur enough mergers, buyouts and share buy-backs to (1) lower the number of available shares on the Big Board, and (2) reduce the volume of names to choose from. Buy-backs generate rising earnings per share, even if total earnings are flat, while mergers can reduce the number of available names to buy, drawing more attention to the remaining share names.  In the meantime, those who hold target takeover stocks can reap windfall profits.

Thank You, Rich Folks!

I can’t let April 15 pass without reminding anyone willing to listen that the federal services they rely on are provided by the favorite scapegoats of the press and populist politicians – i.e., successful American entrepreneurs and investors. To honor tax day tomorrow, I want to pause to thank the top 20% of earners (making $134,000 or more per year in Adjusted Gross Income) for paying 84% of the personal income taxes in America.  As for the super-rich, let us thank the hated 1% for paying 45.7% of all income taxes.

Distribution of Income and Federal Income Taxes by Quintile Chart

Chart source: AEI Carpe Diem.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The top 20% earn barely half of all income (51.3%), but they pay 83.9% of all income taxes. As this chart shows, the bottom 40% pay no net income tax, since Earned Income Tax Credits and other tax benefits more than offset any small amount of income taxes they pay, so let’s all thank a rich person on April 15.

An even better piece of news is that most Americans have a good chance to be in that top 20% for at least part of their working career.  As we grow older, we usually gain experience and more earning power.  The latest Fortune Magazine cites a study by Thomas Hirschl of Cornell and Mark Rank of Washington University, which shows that American income distribution is “remarkably fluid, with households cycling in and out of the top brackets more frequently than populist rhetoric might suggest.”  Specifically, the study says that 70% of households will spend at least one year among the top 20% of earners and 11% of households will spend at least one year in the infamous top 1%. America remains a Land of Opportunity.

Stat of the Week:

Import Prices Fall 10.5% as America “Imports Deflation”

by Louis Navellier

Another example of how a strong dollar impacts the U.S. economy is that import prices have fallen 10.5% in the past 12 months. Excluding fuel prices, which fell 50% since last summer, import prices have still declined 2% in the past 12 months, the largest drop in six years! The Fed’s favorite inflation indicator, namely the personal consumption expenditures price index, rose only 0.3% in the past 12 months.  Since a strong dollar makes U.S. goods more expensive, U.S. exports are falling, restricting overall economic growth.

The Institute of Supply Management (ISM) announced last week that its service sector index declined to 56.5 in March, down from 56.9 in February, but since any reading over 50 signals an expansion, this report represents a bright spot amidst the recent mixed economic news.  Also notable is that the ISM new orders component rose to 57.8 in March, up from 56.7 in February, which bodes well for future growth.

Across the pond, Markit announced on Tuesday that its euro-zone purchasing managers index (PMI) rose to 54 in March, up from 53.3 in February.  Especially notable is that Markit’s new orders component rose at the fastest pace in almost four years.  The PMIs in Ireland and Spain were growing the fastest, while Germany and Italy were also growing strongly.  France is also growing, but at a much slower pace.

Crude Oil Prices Reach 7-Week High

Crude oil prices hit a brief seven-week high on Tuesday, despite the probability that more Iranian oil may be hitting the market if sanctions are eased in the event of an eventual nuclear inspection deal.  The near-term catalyst for rising crude oil prices was that Saudi Arabia raised its official selling price to its Asian customers by 30 cents per barrel, which most analysts interpreted as evidence that Asian demand is rising.  However, on Wednesday, Saudi Arabia’s oil minister Ali al-Naimi said that crude oil production was raised to 10.3 million barrels per day in March, up from 10.0 and 9.7 million barrels per day in the previous two months.  Saudi Arabia’s previous peak crude oil production was 10.2 million barrels per day in August of 2013, so crude oil production is now at an all-time high due to rising demand from Asia.

Oil Pipelines ImageDespite the stronger worldwide demand that Saudi Arabia is reporting, the Energy Information Administration (EIA) reported on Wednesday that U.S. crude oil inventories rose by 10.9 million barrels to 482.4 million barrels in the latest week, the largest weekly rise since 2001 and the highest April inventory level the past 80 years!  The EIA also said that domestic crude oil production rose by 18,000 barrels per day to 9.4 million barrels, so the domestic crude oil boom continues, despite falling rig counts.

FOMC Minutes Confirm a “Dovish Bias” Rules the Fed

In my opinion, the biggest news last week was Wednesday’s release of the latest Federal Open Market Committee (FOMC) minutes, which revealed infighting within the Fed about a potential rate increase in June.  Although several FOMC officials thought that June might be the right time for a rate increase, other officials were worried about deflation and argued for the Fed to maintain its 0% interest rate policy.

The FOMC minutes also revealed concerns regarding economic growth, saying specifically that “several participants noted that the dollar’s further appreciation over the intermeeting period was likely to restrain U.S. net exports and economic growth for a time.”  Translated from Fed-speak, as long as (1) the U.S. dollar is strong, (2) crude oil prices remain weak, (3) employment growth is decelerating, and (4) GDP growth is slowing, the Fed remains “data dependent” and the FOMC will likely NOT raise interest rates.

Speaking of GDP growth and the Fed, New York Fed Governor William Dudley said last week that he expects U.S. GDP growth to slow to an annual rate of 1% and then grow at a 2.2% annual pace for the rest of 2015.  Dudley acknowledged soft economic reports, saying that the economic recovery has been “disappointing compared to historical patterns.”  Interestingly, Dudley attributed the first-quarter economic slowdown to (1) harsh winter weather, (2) a stronger U.S. dollar, and (3) the negative effects of cheap oil on the vibrant U.S. energy industry. Dudley went on to say that the surge in the dollar poses “another significant shock” to the U.S. economy by making U.S. exports more expensive.  In other words, the Fed will not likely raise key interest rates anytime soon, mostly due to decelerating economic growth.


It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Click here to see the preceding 12 month trade report.

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report.

Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation of any offer to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for you. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor's holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Results presented include the reinvestment of all dividends and other earnings.

Past performance is no indication of future results.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not intended or written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE: The performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier's Growth Investor, Louis Navellier's Breakthrough Stocks, Louis Navellier's Accelerated Profits, and Louis Navellier's Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters' reported performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier's composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

Marketmail Archives

It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Click here to see the preceding 12 month trade report.

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report.

Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation of any offer to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for you. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor's holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Results presented include the reinvestment of all dividends and other earnings.

Past performance is no indication of future results.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not intended or written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE: The performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier's Growth Investor, Louis Navellier's Breakthrough Stocks, Louis Navellier's Accelerated Profits, and Louis Navellier's Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters' reported performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier's composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

Marketmail Archives