At a time when Treasury yields have been nonexistent, MLP investors have been able to get high payouts that are viewed as quasi-dividends, due to some payouts representing income and some representing return of capital. The question to ask now is whether the risk-reward is there for new investors at the current prices. The unit prices of many key MLPs have been hit hard along with stocks in the past few weeks, and we wanted to take a risk-reward look for summer 2012. This sector could get a recovery, or it could face additional pressure like we saw in 2011.

If investors have been involved in the MLP sector since before, during or right after the great panic selling of 2008 and 2009, they are up huge if they held on. In many cases they have doubled their money or more. And as far as they are concerned they have been getting 5% to 8% in payouts each year (again, some income and some return of capital). The problem is that the prices here have become choppy and the MLP structures often have had secondary offerings on top of secondary offerings. Those secondary offerings have provided growth and acquisition capital, but some investors have started to worry that these secondary offerings may be the biggest contribution to the never-ending payout increases that have been seen in this sector.

MLPs in the energy space often attract the same sort of investors who would buy utility shares and preferred shares of banks, but they also overlap with REIT investors who look for above-market yields. This sector has enjoyed large price gains in the unit (share) prices, and investors are looking for any safe investments that have high payouts, compared to the world of no-returns in CDs and Treasuries. A wave of secondary offerings from many MLPs came before and during the recent market sell-off.

24/7 Wall St. has evaluated some of the top MLP investments to see how much implied upside remains in this sector. We have taken price performance as far as the sell-off from recent highs, as well as issues like the payout ratios (implied yield-equivalent) and the consensus price targets from Thomson Reuters. We have evaluated the following MLPs: Enterprise Products Partners LP (NYSE: EPD), Kinder Morgan Energy Partners LP (NYSE: KMP), Plains All American Pipeline LP (NYSE: PAA), ONEOK Partners LP (NYSE: OKS), Energy Transfer Partners LP (NYSE: ETP) and Enbridge Energy Partners LP (NYSE: EEP). These MLPs mentioned and covered here are some of the ones we track and keep on our watch list in the sector. These have market caps above $8 billion, they have a history of increased payouts each quarter, for the most part, and generally speaking these MLPs are all believed to have good management teams.

Investors have made a bundle here in this sector. MLPs are not really all that correlated to the price of oil because these are the partnerships (general and limited) for pipelines, terminals, and other facilities involved in the oil and gas sector in America. MLPs must derive 90% of their income from real estate, natural resources and commodities. The issuing of K-1 statements can make the structure more complicated, but the payouts often make that worth it for many investors seeking higher streams of cash flow.

We also have evaluated some of the key ETFs and closed-end funds in this sector. Be advise that just the three vehicles we have tracked in funds and ETFs have a combined market value of more than $11 billion.

The dividend will be payable on July 13, 2012, to stockholders of record on June 29, 2012, with an ex-dividend date of June 27, 2012.

As far as how this dividend compares to the other large apparel makers, this is as follows: V.F. Corporation (NYSE: VFC) has close to a 2.1% dividend yield and Columbia Sportswear Company (NASDAQ: COLM) has a 1.9% yield.  Having a 1% or 2% dividend might not sound huge on the surface when you consider the DJIA components and other dividend growers, but most of the large apparel companies either do not pay a dividend or they have a low yield.   Accessories maker Coach, Inc. (NYSE: COH) has a 1.8% yield. Even the great sports apparel and equipment maker Nike Inc. (NYSE: NKE) pays only a 1.4% yield to investors.

Maybe a 1.1% dividend yield now isn’t so bad after all.  The 5-year Treasury note pays only 0.74% and the 10-year Treasury pays 1.74% right now.

JON C. OGG

Of the top brands, the following came in after Apple:

2. International Business Machines Corporation (NYSE: IBM)

3. Google Inc. (NASDAQ: GOOG)

4. McDonald’s Corporation (NYSE: MCD)

5. Microsoft Corporation (NASDAQ: MSFT)

6. Coca-Cola Corporation (NYSE: KO)

7. Marlboro of Altria Group Inc. (NYSE: MO)

8. AT&T, Inc. (NYSE: T)

9. Verizon Communications, Inc. (NYSE: VZ)

10. China Mobile Limited (NYSE: CHL)

11. General Electric Co. (NYSE: GE)

The ‘Top Riser” from 2011 to 2012 was Facebook, Inc. (NASDAQ: FB) with a 74% rise

The full Millward Brown study on these brands gets broken down into segments such as industry, brand growth, geographic, and sectors.

JON C. OGG

Take a look at any chart and you will see that Best Buy shares hit a low not seen since back in 2009 when every stock tied to retail and technology had hit the ‘free fall’ button.  This stock hit a low of $17.53 this morning and its prior 52-week range was $17.84 to $32.85.

Somehow Amazon remains the winner here.  Many buyers go to Best Buy to interact with consumer electronics and then turn around and buy the item online from a competitor to avoid sales tax and/or to pay a lower price.

Analysts still have a consensus price target around $25.00 for Best Buy, but for now that should not be trusted.  And what about that $3.59 EPS target for this year at Best Buy from Thomson Reuters?  Or the $3.72 EPS target for next year from Thomson Reuters?  If those were to remain true then Best Buy trades at only 5-times this year’s earnings and under 4.9-times next year’s earnings estimates.

The reality is that Best Buy has no CEO, it lost its founder, it is suffering from margin compression, and it is often cited as losing more and more of the potential customer base. BB&T Capital Markets also downgraded Best Buy shares to Hold from Buy just this morning, although admittedly that is just a very late downgrade.

The one thing which may actually act as a slingshot on any news that “lass bad” is that Best Buy has close to 54 million shares in its short interest per the most recent data.  It is hard to get excited that short sellers may drive up the price if the news is not just dismal.

JON C. OGG

But a CEO wedding announcement on the following day? The answer that new shareholders should be concerned with is simple: “You knew you had a founding CEO who was able to do whatever he wants, even though he is now playing with your money. Now you know he WILL do whatever he wants whenever he wants.”

Magically announcing a wedding at what was supposed to be a graduation party is one thing. But within a day of an IPO of this magnitude? Shareholders now have every reason to be concerned. Oh, and by the way, if you do not like it your only way to make a statement is to sell your shares. You have no vote in the company at all because Zuckerberg has well over 50% of the share votes either under ownership or under control.

It is hard to imagine that Zuck would go take a three-week honeymoon, but he could do that at some point and the poor Facebook shareholders would just have to sit there and take it. Again, your only vote as a shareholder is to sell your shares. Even then, do you think a guy now worth $20 billion or so really cares?

We warned you that there were 18 big risks in chasing Facebook ahead of the IPO, and all of these risks are still present. We never thought that there were two more: 19) CEO decides to distract himself with his own marriage status as just a small deal, and 20) CEO could go take a long vacation/honeymoon immediately.

Who knows what Zuckerberg’s living situation will be now and who knows if he and his now-wife will decide to go take a great vacation and honeymoon. I would if I was in his shoes, at some point, but not the weekend after an IPO. Shareholders should care what this means, but they better remember over and over that they were warned about the corporate governance here as a controlled entity (over and over, and over).

As of 6:50 PM EST on Sunday night there have been “853,293 people like this” on Zuckerberg’s Facebook status page. If any of those people are shareholders liking this, well let’s just say that they have a conflict of interest over “liking” their own money.

Barron’s wrote about the new downside risks about Facebook shares falling if underwriters choose not to support the IPO like they did on Friday at the $38.00 share price. That was without considering the CEO would sneak out and get married the same weekend.

JON C. OGG

The proposed split would create a $35 billion snack food company with brands like Oreo, Cadbury, Tang, and Trident, and a $14 billion grocery business that would continue to supply grocers with Maxwell House coffee, Jell-O, and Philadelphia-brand cream cheese.

One investor who is not excited by the news is Warren Buffett, who recently reduced his holdings of Kraft shares from 87 million to 78 million. Buffett never liked the deal Kraft made for Cadbury and has been lightening his holdings of the food giant ever since.

Paul Ausick

Ackman had pushed for replacing Green with Hunter Harrison, former CEO of Canadian National Railway Co. (NYSE: CNI), but following the coup Ackman now said not to expect a coronation, “We’re going to do a proper job, we’re going to meet all the candidates and do it the right way.”

Canadian Pacific’s problems, at least according to Ackman, are due to high operating costs and he wants to reduce those costs. Ackman’s stated goal is to lower CP’s operating ratio — that is cost as a percentage of revenue — from around 80% to 66%. That would match the operating ratio at Canadian National, Harrison’s former company. Most of the credit for CN’s success, however, is attributed to Harrison’s predecessor.

CP’s main problem is that it operates mainly in western Canada in a nasty climate with difficult topography. The company hauls mainly commodity minerals and is captive to swings in the market for those minerals. Lowering costs won’t be easy once the workforce is trimmed.

CP’s ability to compete with the likes of Union Pacific Corp. (NYSE: UNP), CSX Corp. (NYSE: CSX), Burlington Northern Santa Fe (BNSF), owned by Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A), and Norfolk Southern Corp. (NYSE: NSC) is dubious, given that CP is much smaller than any of these and that the only likely merger possibility is Kansas City Southern (NYSE: KSU). A potential merger between Canadian National and BNSF was squashed by regulators in 1999, so a tie-up with one of the larger railroads is unlikely.

What is likely is that Ackman has shaken up sleepy Canadian companies and shareholders. This was Canada’s first big, public battle over corporate direction and many observers believe that it’s just the beginning.

Who could be next? A good bet might by phone maker Research in Motion Ltd. (NASDAQ: RIMM) whose recent struggles are well documented.

CP did not get much of a share price boost yesterday, closing at $75.07 in a 52-week range of $44.74-$79.91. The stock is inactive in pre-market trading this morning.

Paul Ausick

Faber notes that while the number of job cuts are not yet known, sources indicate that the turnaround of the company is going to include thousands of layoffs.

The question that has to be asked here is one of relevance.  H-P is a DJIA component and it is worth under $44 billion in market capitalization since the stock is down more than half from the peak in early 2011.  This company employed a whopping 349,600 employees as of October 31, 2011 per its annual report.

What is so sad here is that the market is completely discounting H-P.  Literally, this stock trades at less than 6-times its expected earnings.  The company was going to jettison its PC business, but the turnaround plan under Meg Whitman determination was that it would just cost too much to break the PC unit out of H-P.

The market either just does not believe that H-P can live up to its earnings through time or it has just reset what the company’s valuation really is.  Under 6-times earnings is not expensive by any count as long as those earnings can be maintained.  Rival (at least in PC sales) Dell Inc. (NASDAQ: DELL) now trades at only about 7.5-times its forward earnings.

H-P is already loaded up with enough debt of over $25 billion even if it does have a $19 billion cash and liquidity arsenal.  Earnings are next week and the layoffs are expected to be announced sometime around that report.  The current targets for the April-end quarter are $0.91 EPS and $29.9 billion in sales according to Thomson Reuters.

H-P is up three-cents at $22.06 and the 52-week trading range is $21.50 to $37.70.

Apparently the slogan on a tee-shirt is true, “The beatings will continue until morale improves.”

JON C. OGG

The market value is still the largest of any public company at $501 billion, but the market value is now down almost $100 billion from the actual peak.  We have reported on two recent occasions how weak iPhone sales projections from analysts seem to be the big concern.  Both reports indicate that the iPad will save the day, and the latest earnings report showed that China really saved the day (with purchases rather than cheap labor).

The consensus analyst target on Apple is now above $708.00 and that implies another 32% upside if the analysts are right.  Some analyst calls even target $1,000 (and higher) for Apple stock.  At that rate, it becomes cheaper to buy Apple’s products than it does to buy 1 share of Apple stock.

Maybe this is the peak valuation concern coming into play as well.  Microsoft Corporation (NASDAQ: MSFT), which ultimately may have saved Apple with a Gates-led investment, reached up close to the $600 billion or so at the peak in 2000.  Cisco Systems Inc. (NASDAQ: CSCO) also reached about $350 billion.

General Electric Co. (NYSE: GE) peaked somewhere around the $475 billion valuation.  Exxon Mobil Corporation (NYSE: XOM) also peaked out above $500 billion during the energy bubble run-up, but that has not been seen since and the current market value is about $385 billion or so.  The common theme is that all of these values have come crashing down.

There is one thing to consider here in the ’mega-cap valuations and that is that Exxon Mobil is the only stock that had a low valuation like Apple still has.  In fact, Apple now trades at only about 10-times the Fiscal 2013 earnings estimates now that it has pulled back over $100.  Its multiple is even less than that if you back out the $100+ billion treasure trove that the company has.

The focus ahead has to be on Apple TV.  iPad and iPhone sales may only be able to go so far, and now it will be up to the new devices.  One concern we have is that the story of the Mac is a lost one.  Honestly, when was the last time you heard anyone focused on Mac sales in the last few months?  It is all about iPads and iPhones, which are actually cannibalizing what would have been Mac sales, and the talk remains around Apple TV.

One issue to consider is that certain funds have had to lighten up in Apple shares.  The large institutional sales orders have not been very evident in recent months, but the reality is that Apple started to become too heavily weighted for many non-index fund managers.  To prove this in the NASDAQ 100, the PowerShares QQQ (NASDAQ: QQQ) has close to an 18% weighting in Apple.  We have seen one estimate that only about one-third of the share selling was tied to large funds and hedge funds, although that no longer be the case since that data is 45 days old (or longer).

What seems to be at work is simply a change of heart.  The stock was weak ahead of May and the stock was still above $600 as recently as April 27.  Still, the psychology of “Sell in May and go away!” has been exaggerated due to the woes of Europe, the slowing growth of the BRIC nations, and weakening U.S. economic data.

Another concern may be that Microsoft Corporation (NASDAQ: MSFT) is being favorably treated going into the Windows 8 launch later this year.  All of the companies in technology are talking this up.  It is even possible that investors are unloading shares just so they can buy up Facebook shares after the IPO on Friday.

Apple is not expensive at all.  The question is whether or not it can be maintained.  When you are paying 10-times for future earnings today, that implies that you are paying for earnings out about ten years on a static basis.  All that is happening after the massive run that has been seen over the last decade is that the growth rate cannot be maintained indefinitely.

This sentiment won’t last forever, but the focus is elsewhere for the time being.  Will Apple hit $500 or even lower?  Maybe.  As long as the market does not really tank and as long as we do not enter a second recession, the consensus is that Apple’s stock still has a lot of room to rise after the dust settles.

JON C. OGG

News on Wednesday night showed that Chief Financial Officer Mark Murphy is leaving the company to rejoin a position at Praxair.  The news is on the heels of previous report showing a major loss due to poor solar materials sales. Does the notion that MEMC named Brian Wuebbels as executive vice president and CFO help?  Not really, even if Murphy will act as a “consultant” during the transition period.

Losing a CFO is not as bad as losing a founder and not as bad as losing a CEO, but the problem with losing a CFO is that Wall Street assumes that the CFO has lost faith in the future of the company. In some cases, it could mean something far worse.  With MEMC shares having fallen from over $90 during teh solar boom down to under $2.00 it is easy to wonder if things are going from just awful to even worse.

So, here is where we cannot help but wonder about MEMC’s future.  Thomson Reuters expects a loss of -$0.10 EPS in 2012 on sales of $2.6 billion.  But almost magically in 2013 the consensus is back up to $0.45 EPS on $2.83 billion in sales.  The revenues in 2011 were $2.715 billion, in 2010 they were $2.239 billion, and 2009 revenues were $1.163 billion.  The problem is that sales in the solar sector are getting harder and harder to come by and the solar sector is in total disarray.  The company’s latest loss and decline in revenues also reflected weak demand in the semiconductor wafer markets.  Yep, MEMC is facing a war on two fronts and its non-GAAP margins are getting squeezed.

The sector leaders are looking like hell frozen over.  First Solar Inc. (NASDAQ: FSLR) is effectively at all-time lows if you discount a small 2% gain today.  SunPower Corporation (NASDAQ: SPWR) is down over 75% since Total SA (NYSE: TOT) bought the controlling interest.

If the company was on the verge of a great turnaround then the CFO would seemingly not have pulled the ripcord on the way down here.  The company has what looks to be ample cash reserves to fund operations, but it also has significant amounts of long-term debt. This situation just feels like it is one which is going from awful to far worse.

MEMC is in serious trouble.  Still, it is one of these outfits that has enough cash to fund operations for probably quite some time, but its core businesses are challenged and the company has so far been unable to get its operating costs in order.  It has also forecast a weaker demand for semiconductor materials in 2012 as well as a lower price per watt in solar.  Our big concern is that the projections may have been based entirely upon the CFO forecasts just a week or so ago, and his departure would bring even the lower guidance into question.

For whatever this is worth, Wunderlich Securities cut its target down to $1.00 after it maintained a SELL rating after the most recent earnings.

It is too soon to declare that MEMC will be a total implosion.  It is even possible that there could be a turnaround of major proportion coming here.  Unfortunately, that does not appear to be the case any time in the immediate future.

So you tell me in a poll, no “I don’t know” answers allowed…

JON C. OGG