Interesting chart on how to improve the U.S. healthcare system:
Click to Enlarge
Source: Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, Institute of Medicine, National Academy of Sciences
Forbes: The World’s Most Innovative Companies
Forbes magazine recently published its latest list of the World’s Most Innovative Companies. These companies were selected based on a factor called “The Innovation Premium”.
Definition of The Innovation Premium:
“The Innovation Premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results (new products, services and markets) . Members of the list must have $10 billion in market capitalization, spend at least 1% of their asset base on R&D and have seven years of public data.”
The Top 10 Companies in the ranking are listed below:
[TABLE=1067]
The rest of the list can be found here.
Source: The World’s Most Innovative Companies, Forbes
On a related note, from a Bloomberg article on the lack of innovation at Procter & Gamble:
For much of its history, Procter & Gamble Co. (PG) didn’t just roll out new products, it created new product categories, from the first mass-produced disposable diapers to Crest teeth-whitening kits. That’s one reason P&G has more than 1,000 Ph.D.’s among the 8,000 employees at its 26 innovation facilities around the world.
“P&G is largely a branded science company,” said Larry Huston, former innovation officer at P&G who’s now managing director of 4inno, a consulting firm.
Lately, though, there’s been a dearth of pioneering brands emerging from the world’s largest consumer-products company. Spending on research and development in fiscal 2012 ended June 30 was $2.03 billion, or 2.4 percent of sales, the same as the prior year and down from 3 percent of sales in 2006.
P&G’s most recent homegrown blockbusters — Swiffer cleaning devices, Crest Whitestrips, and Febreze odor fresheners — all went on sale at least a decade ago.
“P&G is built on creating new categories, and innovation is in its DNA, but they need to rediscover it,” said Peter Golder, a professor at the Tuck School of Business at Dartmouth College.
P&G ranked 24th in the Forbes list.
Disclosure: No Positions
Nine Asian Airline Stocks
The Asian airline industry has experienced tremendous growth in the past few years in tandem with strong economic growth. Rising middle class with higher disposable income and eager to explore air travel has been the major driver of growth.Countries such as Indonesia, China, India, etc. with large populations have invested heavily in airport and related infrastructure upgrades in recent years.
Catering to the demand of the growing air travellers, many small discount airlines have propped up driving down the cost of air fares.These airlines are also competing fiercely with the traditionally dominant state or national carriers.In 2011, Asia Pacific Carriers accounted for 27% of global passenger traffic and 41%% of global passenger traffic according to Association of Asia Pacific Airlines.
Most of the airlines in the developed world are money-losing operations and their stocks should be avoided like the plague.However this is not the case with airlines in emerging countries.Many of them offer not only offer excellent service but are also profitable.
The following are nine of the Asian airline stocks traded on the US markets:
1.Company: Air China Ltd (AIRYY)
Current Dividend Yield: 2.92%
Country: China
2.Company: China Eastern Airlines Corp Ltd (CEA)
Current Dividend Yield: N/A
Country: China
3.Company: China Southern Airlines Co(ZNH)
Current Dividend Yield: 15.12%
Country: China
4.Company: All Nippon Airways Co Ltd (ALNPY)
Current Dividend Yield: 2.35%
Country: Japan
5.Company: Garuda Indonesia TBK PT (PSEOY)
Current Dividend Yield: N/A
Country: Indonesia
6.Company: Singapore Airlines Ltd (SINGY)
Current Dividend Yield: 1.87%
Country:Singapore
7.Company: Thai Airways International Ltd (TAWNY)
Current Dividend Yield: N/A
Country: Thailand
8.Company: Cathay Pacific Airways Ltd (CPCAY)
Current Dividend Yield: 4.33%
Country: Hong Kong
9.Company: Virgin Australia Holdings Ltd (VBHLY)
Current Dividend Yield: N/A
Country: Australia
Disclosure: No Positions
U.S. Healthcare Industry Drowns in Paper Records
The U.S. spends the highest amount per capita on healthcare and gets the lowest value for it. While some portion of the total money spent goes to unnecessary “defensive” medical procedures performed by doctors and other healthcare providers a large portion of the funds spent is actually wasted on paperwork. In fact, the healthcare industry in the U.S. drowns in all forms of paper record keeping and in the process unnecessarily kills millions of trees. Despite advances in technology, the fear of lawsuits, regulatory burden and other factors forces health care providers to avoid digital record keeping and maintain mountains of paperwork for all transactions. Hence much of the total healthcare expenditures is not spent on actual healthcare but on paper record keeping activities.
From an article in Bloomberg BusinessWeek:
The U.S. is spending $2.7 trillion annually on health care, a number that’s approaching 18 percent of gross domestic product.
Despite the lack of national health insurance, the Federal government spends nearly half of the total annual national health expenditures through the Medicare and Medicaid programs.
Click to enlarge
Source: Are Entitlements Corrupting Us?, The Wall Street Journal
The US ranks lowest in the usage of Electronic Health Records (EHR) according a study by the Commonwealth Fund. The Bloomberg BusinessWeek article added:
Countries with national health-care systems such as Denmark, Sweden, and New Zealand have largely dispensed with records on paper. According to a study by the nonprofit Commonwealth Fund, Danish doctors reported in the late 1990s that they were saving 30 minutes a day by prescribing drugs and ordering lab reports electronically. A 2010 study by the same organization said the annual salaries of New Zealand’s family doctors had risen 50 percent in five years, thanks to increased funding and their prolific use of EHRs.
In the U.S., things are different. Some providers, such as Kaiser, the Mayo Clinic, and, interestingly, the Veterans Administration, have installed sophisticated data systems. For the most part, though, American doctors have resisted. They worry about the privacy of their patients’ records—and that plaintiffs’ attorneys will use the computerized data against them in malpractice suits. And they resent that they’re expected to shoulder the cost of new technology that might help their patients or insurance companies, but would do little for their own bottom lines.
Ten OTC-Traded German Stocks to Consider
The export-oriented German economy at about $3.5 Trillion is the largest in Europe. Unlike other European countries Germany is unique in that the economy is composed of thousands of family-owned small to mid-size companies. In fact, thousands of such Mittelstand firms employ millions of workers in the private sector. These companies are highly successful and supply components and products not just to other larger German firms but also export them to other countries.
In addition to the Mittelstand firms, hundreds of large German companies operate globally and are leaders in their respective fields. BASF AG(BASFY) is the largest chemical maker in the world and holds the leadership position in the industry for decades.These global German companies employ thousands of workers in the countries they operate.For example, the top 50 German multinationals in the US alone employ over 461,000 workers in the U.S. as of 2011, according to a special report by the German American Chamber of Commerce.
While most investors avoid Europe due to ongoing crisis there, smart investors may want to add some of the top companies at the current levels.With a strong economy and solid fundamentals Germany should be the first choice for investors looking to invest in Europe.As many German companies have strong exposure to overseas markets especially the emerging markets they offer better opportunities than companies that mainly focus on Europe.
Compared to other European indices, the German DAX index has performed very well this year with an year-to-date of change of 18.18% as of August 31.
Due to expensive listing fees of the New York Stock Exchange (NYSE) and high regulatory requirements, only about seven German companies trade on the NYSE. So investors looking to invest directly in German firms have to beyond the NYSE such as the OTC markets.
Ten German ADRs trading on the OTC market are listed below for further research:
1.Company: Addidas AG (ADDYY)
Current Dividend Yield: 1.65%
Sector: Footwear
2.Company: BASF SE (BASFY)
Current Dividend Yield: 4.26%
Sector:Chemical Manufacturing
3.Company: Continental AG (CTTAY)
Current Dividend Yield: 2.01%
Sector:Auto & Truck Parts
4.Company: E.ON AG (EONGY)
Current Dividend Yield: Utilities
Sector: 5.73%
5.Company: RWE AG(RWEOY)
Current Dividend Yield: Utilities
Sector: 6.32%
6.Company: Allianz (AZSEY)
Current Dividend Yield: 5.35%
Sector:Nonlife Insurance
7.Company: Linde AG (LNEGY)
Current Dividend Yield:2.08%
Sector:Chemical Manufacturing
8.Company: Deutsche Telekom (DTEGY)
Current Dividend Yield: 7.37%
Sector:Mobile Telecom
9.Company: Henkel AG (HENKY)
Current Dividend Yield:1.64%
Sector:Household Goods
10.Company: Fresenius SE & Co KGaA (FSNUY)
Current Dividend Yield: 1.15%
Sector: Pharma & Biotech
Another simple and easy way to invest in Germany is via the iShares Germany ETF (EWG).The fund has net assets of over $2.7 billion and an yield of 2.87%. The fund’s portfolio includes many of the companies listed above.
Disclosure: Long EONGY, HENKY and RWEOY