Welcome to Beacon Equity Research. Today is Sunday, 20 January 2008
 Home   Covered Companies   News and Commentary   TraderNotes   Our Team   Ratings   Contact Us   Charity   Affiliates  

Archive >> November 2007

Demand for energy is driven by economic activity, population growth, and the use of energy in residential, industrial, and transportation applications. The world's population is forecast to grow from its current figure of 6.6 billion to 8.2 billion in 2030.  At the same time, global economic growth is forecast at 3.8% annually through 2030.  In 2007, the world is consuming more than 86 million barrels of oil per day (up 1.7% over 2006).  Demand is forecast to rise 2.4% to 88.2 million barrels in 2008.

According to Helmut Kaiser Consultancy, the worldwide automotive industry employs 70 million people, directly and indirectly, and this number is expected to decrease by 20 to 30 percent by 2010.  Globally, about 53 million new cars were sold in 2007, up from about 49 million the previous year.  Around the world, there were about 806 million cars and light trucks on the road in 2007.  By 2020, that number will reach 1 billion. As of 2006, the U.S. industry included about 21,200 new-car dealerships, 1.07 million manufacturing employees and 1.12 million retail new and used car dealership employees.

The Chinese pharmaceuticals market is forecast to become the world’s fifth largest by 2010 - and the largest by 2050.  However, the industry is still small-scale, with a scattered geographical layout and duplicated production processes. Renhuang Pharmaceuticals, Inc. (RHGP), a fast-growing pharmaceuticals company, manufactures and distributes a broad line of high-quality nutraceutical, natural medicinal and bio-pharmaceutical products in mainland China. Its three major product lines are Acanthopanax-based natural medicinal products, the Shark Power healthcare series and traditional Chinese medicines.

The growth of the software industry depends mainly on the innovative efforts of software companies and on their efforts to provide security and protection to internet users.  StrikeForce Technology, Inc. (SKFT), a software development and services company, develops a suite of computer network security products. The company develops identification protection software products to protect computer networks from unauthorized access and to protect network owners and users from identity theft.

The growth of the global software industry mainly depends on the innovative efforts of software companies.  According to a study by McKinsey & Company, in collaboration with the Sand Hill Group, there is a strong connection between innovation and vendor success.  Innovation is a top priority and an essential source of value creation for software companies. In this survey of software customers on areas for software industry improvement, respondents ranked innovation and new product areas as the most important (30 percent), followed by ease of use (24 percent) and customer service (23 percent).

Gold is unique because it is the only commodity produced for accumulation. According to James Turk, founder of GoldMoney, although gold’s price is still a function of supply and demand, the supply that makes a difference is not the relatively little amount mined each year. History shows mined gold increases the aboveground stock year after year by a relatively consistent 1.7% per annum.  In the short-term gold’s supply is relatively unchanged because new mine production cannot be significantly increased quickly.  As a consequence, gold’s price is principally a function of demand.

U.S. existing home sales data measures the selling rate of pre-owned houses, which is considered a decent indicator of activity in the housing sector. It provides a gauge not only of the demand for housing, but the economic momentum as well. This report is regularly released every 25th of the month or on the first business day thereafter, which figures reflect data for the month prior. The National Association of Realtors (NAR) said in a monthly report for October that sales of existing homes and apartments fell to a seasonally adjusted rate of 5.04 million units in September from 5.48 million in August.   

Business Process Outsourcing (BPO) is the contracting of a specific business task to a third-party service provider, usually implemented as a cost-saving measure for tasks that a company requires.  Over the past five years, the demand for BPO related services has increased by more than 30% annually, and industry experts are convinced it will continue to gain momentum within the next decade.

The US small boat industry is comprised of mainly smaller companies that construct vessels outside of traditional shipyards.  The industry includes about 1,000 companies with combined annual revenues of approximately $11 billion in 2006.  The profitability of individual companies is dependent on manufacturing efficiency.  Large companies have advantages in name recognition and product distribution, while small companies compete by focusing on a market niche in a local or regional area.

Copyright 2007 Beacon Equity Research