What Are Global Investors Thinking? Are There Any Good Stock Plays?

Although the first few weeks in 2012 have been mostly positive, investors recognize that overall trends are still fairly volatile. Commodities and currencies keep fluctuating wildly, and investors may be looking for plays with interesting risk-reward profiles. In this economy, great uncertainty comes great opportunity.

Traders need to be aware that macroeconomic factors are playing large roles in moving broader indices. As expected, today has seen very interesting trading action. While the Dow Jones Index has been moving to the upside, the Nasdaq and S&P 500 moved lower.

One of the biggest reasons why the equity markets have moved in an odd fashion is that Dow components such as IBM IBM, Intel INTC, and Microsoft MSFT all reported positive earnings last night. On the other hand, Google GOOG, a Nasdaq stock, posted poor earnings. .

Unfortunately, according to various mass media outlets, the equity markets gains appear to be catalyzed by subdued fears of European contagion. As Greece is nearing a deal with private investors, many analysts are becoming convinced that the sovereign debt situation is being solved. Another thing to remember, however, is that in these uncertain times, Wall Street views no news as good news.

Interestingly, as the Eurozone debt fears subsided, banks gained traction in the markets. JP Morgan, Goldman Sachs GS, and Bank of America BAC all rallied over the week due to positive earnings. These results may be a sign that a troubled financial services industry may be able to adapt to rapid changes in the long-run.

Some investors may want an equity that may perform well if the equity markets move downwards. Great Panther Silver GPL is a Canadian silver miner that has several operations in Mexico and Canada. Although traders push the company up and down in tandem with silver prices, Great Panther has attractive fundamental aspects.

The company's net income has been periodically increasing, with increasing revenues and decreasing costs. The company's cash position has also increased significantly, with other current assets also increasing. Property, plant, and equipment have increased significantly over the years as well, which may signify that the company has been expanding operations in its current mines. Furthermore, the company may have started operations in other areas.

Great Panther has a tiny amount of short and long-term debt, and has been systematically paying it off over the last several years. Likewise, shareholders' equity has been increasing over the last few years. The company's cash from operations has been increasing over the last five years as well, primarily from increases in net income. Capital expenditures have increased, and while this action decreases cash on hand, it is often indicative of growth.

Great Panther Silver is a strong company that may help investors to hedge their portfolios. Another company that shows a promising growth profile is Entropic Communications ENTR.

Entropic is a semiconductor company that is catered to small business client as well as individuals. In times of evolving technology, the semiconductor industry, as a whole, is gaining traction and will be increasingly important in electronics.

Entropic's revenues have increased significantly over the last few years, while expenses have not increased very much. As such, its net income has appreciated significantly, treating shareholders to impressive EPS boosts. This happened in the year ended 2010, despite a significant reduction in net income due to provisions for income taxes.

The company's cash has also been increasing over the years, along with current assets. Property, plant, and equipment have increased over the years, indicating that the company may be increasing operational expansion. The company also holds no debt, short or long-term. Liabilities are minimal, with most money in shareholders' equity. Retained earnings, while negative, has been increasing significantly and may increase going into the future as well. Paid-in capital has also been increasing significantly.

Entropic's cash from operations has been increasing over the years, with money flowing out as a result of receivables and other current assets. Cash resulting from an influx in liabilities has also been limited. Capital expenditures are significant, which could mean that Entropic is expanding operations aggressively. Lastly, the company did not pursue any capital raises for the year ended 2010.

Entropic looks good from a fundamental perspective, and with a low P/E ratio, may have an even more attractive valuation. The global economy is not stable right now, but the Entropic, Great Panther Silver pair trade takes advantage of undervalued stocks that hedge each other.