Financial highlights of 2013 – currencies
Other than the usual stuff about the S&P 500 being up a huge amount for the year, perhaps the unexpected financial highlight for most Canadians is in the following chart:
Looking at the other major currencies, the Euro has appreciated slightly against the USD over the year (from US$1.32 to US$1.38 per Euro), while the Yen has weakened considerably, with 87 Yen being one USD at the beginning of the year – now this is 105!
The Chinese Yuan strengthened against the USD of the year, 6.23 CNY per USD, while today it is 6.07. This continues a very slow trend of appreciation for the Chinese currency since they changed their monetary policy since 2010:
Some questions for 2014 will be:
– Will the Canadian dollar continue to downtrend?
– How low will the Yen go before Japan collapses its economy?
USEC Inc. – Another company on the discard list
USEC Inc. (NYSE: USU) is going to undergo a pre-packaged recapitalization to refinance a convertible debt offering that is maturing in 2014 that the company has no chance of repaying. Existing equity holders will get 5% of the newly reorganized entity, which constructively means the common shares presently trading represent 1/20th of the current market capitalization.
There is much more to the actual operating business in terms of strategy – uranium refining is not exactly a wide-scale industry and proper analysis requires looking at more geopolitical and government considerations than most investors would probably want to swallow.
After they announced their pending pre-packaged bankruptcy filing, I put this on my research radar. The risk/reward seemed quite good at around $3.50/share, but unfortunately the market caught up in a very efficient manner and while I still believe the entity is somewhat undervalued at its present $6.30/share, the risk/reward metric is not favourable enough to take a position. The proposed recapitalization is still contingent on the approval of a couple strategic partners, but they are receiving a stake in the new entity which they should be accepting.
So I will put this equity in my discards pile – feel free to make what you wish out of this. I’m still rather miffed that low priced companies that I have been researching lately are ruthlessly taken to more efficient prices before I can even complete any reasonable amount of due diligence.
Former Blackberry CEO dumps stake
Michael Lazaridis sold enough shares to have a 4.99% ownership stake in Blackberry. Below 5% he is no longer required to file with the SEC if he wishes to dispose of any more equity.
The material part of his SEC filing is:
(c) On December 23, 2013, 1258701 sold 3,166,893 Shares at an average price per share of $7.55 and on December 24, 2013, 1258701 sold 333,107 Shares at an average price per share of $7.63, in each case through open market sales.
What a vote of confidence. He raised $26.45 million out of these transactions, which would have been a quarter billion had he done this three years ago!
Taxation year for Canada coming to a close
For Canadians, today is the last day to buy and sell stocks and debentures on the TSX and still have it count for the 2013 tax year.
The date for US securities is on the 26th because Boxing Day is not a trading holiday in the USA.
If it is your US tax return you are concerned with, you can sell securities up until December 31 to have the IRS consider it a 2013 tax year transaction.
Regardless of all of this, market movements at this time of year are on computer trading autopilot as most decision-makers with any market influence are away from their main desks.
Merry Christmas everybody.