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Tonight, Cramer ran through his weekly SELL BLOCK on CNBC’s Mad Money. This is where he reviews past recommendations and shows where he was a champ or chump and where he recommends for you to still Buy, Sell, or Hold.
Daily Archives: April 12, 2007
Cramer’s Paper Trade
Tonight, on MAD MONEY, said that he has a paper trade. The ex-Treasury head John Snow at Cerberus is benefitting from the Chinese coated free sheet paper tariff, but Sappi Ltd. (SPP-NYSE) is the one that will benefit from this. The tariffs are intended to be used for magazines, yearbooks, etc. Sappi is South African, but they are the largest in the US and most of the other companies doing this are private. Cramer thinks it is a trade rather than an investment.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Cramer’s Anti-Subprime Mortgage Play
On tonight’s MAD MONEY on CNBC, Jim Cramer says he has a stock that can offer some insulation and even some profits from the blow-up in subprime. He said you will make money on this as subprime lenders blow-up in Annaly Mortgage Management, Inc. (NLY-NYSE), but keep in mind this is a very recent re-visit and second round he has visited it. The CEO Mike Farrell predicted this and the CEO stuck his neck out and repositioned his company to profit. Cramer said it is a liquid stock, and Cramer said he hasn’t always been right about it because he has doubted it when he shouldn’t have. Cramer thinks it may double now that they raised cash and if the fed blinks and cuts rates NLY will be the first to benefit because of their management.
NLY has a 52-week trading range of $11.83 to $15.90 and shares are up 3.5% at $16.11 after-hours. Cramer just interviewed the company on a video on the evening of April 10 when the stock closed at $15.64. It closed at $15.55 the next day and closed unchanged at $15.55 today.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Is Apple Getting Bogged Down Like Microsoft?
Apple (AAPL-NASDAQ) just dropped a bit of news pointing to news about delays in its new Leopard OS launch dates. Shares closed down 0.4% in regular trading and are down almost 2% at $90.40 after the release. Does this sound somewhat like the Vista launch at Microsoft (MSFT-NASDAQ). Here is the statement from the company:
iPhone has already passed several of its required certification tests and is on schedule to ship in late June as planned. We can’t wait until customers get their hands (and fingers) on it and experience what a revolutionary and magical product it is. However, iPhone contains the most sophisticated software ever shipped on a mobile device, and finishing it on time has not come without a price — we had to borrow some key software engineering and QA resources from our Mac OS® X team, and as a result we will not be able to release Leopard at our Worldwide Developers Conference in early June as planned. While Leopard’s features will be complete by then, we cannot deliver the quality release that we and our customers expect from us. We now plan to show our developers a near final version of Leopard at the conference, give them a beta copy to take home so they can do their final testing, and ship Leopard in October. We think it will be well worth the wait. Life often presents tradeoffs, and in this case we’re sure we’ve made the right ones.
The answer is still almost certainly NO, they aren’t as bogged down as Microsoft or others. But this shows that rapid growth and major new product launches can come with a cost at even the most inventive and nimblest operators out there. We’ll have to see what this does to calendar Q3 estimates (Q4 for Apple, therefore year-end and fiscal 2007). These numbers will have to now be backed out by the street.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
So Far, Lam Not Sacrificial; CEO Says “Secular”
Lam Research (LRCX-NASDAQ) reported earnings of $1.15 diluted EPS and $650.3 million in revenues; estimates were $1.06 and $644.75M. There was no guidance given. Gross margin of $326.2 million for the March 2007 quarter met expectations at 50.2 percent compared to gross margin of $322.9 million, or 51.0 percent, for the December 2006 quarter. Actual operating margin was noted as 29.1%.
LRCX shares were up more than 1% on the initial EPS number, but are now actually only up 0.5% because of no guidance. Instead of making these CEO’s pay down to the penny the focus, maybe Wall Street should tell the companies that if they are going to give guidance then they should just do it in the actual earnings press releases. There’s a thought, particularly since they aren’t exactly selling air-time like they are a radio or TV station.
Cash and cash equivalents balances were $1.5 billion, and cash flows provided by operating activities were $151.4 million during the quarter; LRCX repurchased approximately $239 million of its common stock during the quarter; Deferred revenue and deferred profit balances were $277.0 million and $166.1 million, respectively. The anticipated future revenue value of orders shipped to Japanese customers that are not recorded as deferred revenue was approximately $49 million.
The CEO also claims that recent activities ‘position Lam to serve a larger segment of the wafer fab equipment market that is benefiting from a favorable secular demand outlook for advanced integrated circuits.’ Shareholders may want to look at the word SECULAR that the CEO used. He better hope that is the case, because ’secular’ represents Very long-term in the financial markets.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
The 52-Week Low Club
Ectel (ECTX) Fraud protection software company has order delays. Drops to $3.02. From 52-week high of $5.75.
Childrens Place (PLCE) Disappointing same store sales and earnings warning. Down to $50.61. The 52-week high was $71.81.
Conexant (CNXT) Roth Capital downgrades semiconductor solution company. Falls to $1.42 from 52-week high of $3.90.
Wireless Facilities (WFII) Does outsourcing work for network wireless business. Many class action suits. Drops to $1.10. from 52-week high of $4.53.
Huntington Bancshares (HBAN) Retail and commercial bank takes small dip. Down to $21.30 from 52-week high of $24.97/
Netlist (NLST) Part of weakening DRAM business. Builds server and computing systems. Down to $5.93 from $12.64 at 52-week high.
Douglas A. McIntyre
Cramer Looking For the Next Dendreon
Cramer said in a video this afternoon on TheStreet.com that this Dendreon (DNDN-NASDAQ) is a classic case of short sellers not covering themselves by not buying calls with the strikes above. The street.com ran a piece about "reality check" after a five-fold run and letting it pullback. He thinks this could ultimately settle back down in the $10 to $12 range. Cramer said there are some short sellers that lost their year on DNDN. Cramer thinks that management is very promotional here and he thinks that its own officers selling shares on the immediate jump shows that it
Incyte Corp (INCY-NASDAQ) and Nastech Pharma (NSTK-NASDAQ) are two that Cramer thinks could make similar type of moves down the road. Nastech was brought to Cramer he said by a short seller and it was as the short seller’s "only long." NSTK has a $283 million market cap; at $11.10 it is still closer to the lower-part of its 52-week trading range of $9.50 to $19.98; about 16% of its float is short.
INCY has a $636 million market cap. At $7.55 it is close to the top of 52-week highs of $7.81 ($3.67 52-week lows). INCY’s long-dated options do not have large open interest positions, but about 10.8% of its float is short.
He’s been positive on these two names, so these are not really new. Here is a summary of what he said on them Monday evening.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
CDWC: Apples to Apples, CDW’s Sales are Improving
By Willaim Trent, CFA of Stock Market Beat
The Saks Turnaround is Worth Watching
By Chad Brand of The Peridot Capitalist
The Death of Newspapers?
From Ticker Sense
Earlier this year when the Wall Street Journal reformatted its layout, one of the changes instituted was the placement of ads on the front pages of sections including the "A Section".
Just a Blip on the Radar Screen
From Ticker Sense
The Shanghai Stock Exchange Composite (SHCOMP) has been on a tear lately, making the 9% one-day decline it suffered back in late February look like a minuscule sell-off in a broader uptrend.
CBS Video Deals: Quincy Smith Being Smart Again
From Internet Outsider
Icahn’s Golden Touch Finds MedImmune (MEDI)
From 13D Tracker
Cramer’s STOP TRADING (APR 12, 2007)
Cramer noted that Dow Chemical (DOW-NYSE) this last round of firing over unauthorized merger talk engagements of talks signals that this means the ousted executives could lead a deal to take DOW private. Otherwise this would be down on the news.
If you look at Citigroup (C-NYSE) it is a pro-stagnation board, which is why the stock is down.
Pepsico (PEP-NYSE) was a great Sanford Bernstein call according to Cramer, but that is because Cramer recently went over this positively.
As far as Gap (GPS-NYSE), Cramer thinks that Old Navy is coming back (yuck, I hope not). The same store sales were well above estimates according to him.
On MGIC Investment (MTG-NYSE) Cramer said that stock should be down, not up, after missing numbers.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Uranium: When Is Too Much Really Too Much?
Stock Tickers: USU, CCJ, EMU, URZ, USEG, TXU, URRE, URME
The recent performance of Uranium stocks has just been too powerful to overlook, even if the mere mention of it is probably a jinx. Spot prices of Uranium have gone through the roof and it sort of has the earmarks of a bubble, or at least like California real estate prices going up and up because of voodoo financing. Last week spot Uranium prices reached $113.00 per pound to what looks like is the highest level on record, it looks like prices may be lower now but this isn’t exactly a fluid market. Not bad considering these prices were under $10.00 in 2002.
I ran an article at the end of 2006 titled “Uranium Investors Get One More Safety Net for 2007” after Merrill Lynch ran a report that put Uranium prices up 78% for 2008. The week before this report in December, Uranium prices were $68.00 per pound; and that was up from $63.00 in November, and up from $45.00 last summer. This report has turned out to be one of the most underestimated calls imaginable: it was only looking for $75.00 on average for 2007 and $80.00 average in 2008. There was even the mention of RBC Dominion saying Uranium could reach $100.00 per pound in 2007 before falling back to $75.00 in 2009.
What has changed? Well, for starters the slide we saw in oil prices ended and now there is a prevailing thought that even if Iraq turned into a peaceful area and even if Iran and our buddy Chavez decided to love America that $50.00 may be too low for a floor. That may be a comment appropriate for Nirvana, but this is a prevailing thought out there. TXU (TXU-NYSE) has scrapped its dirty coal plants in favor of nukes, and all of these use enriched uranium. I won’t bother noting that both India and China are building more and more nuclear plants. And now the spot market for Uranium is through the roof. Hedge funds and speculators are also said to be responsible, and it is hard to not to notice that Nuclear Energy is the pure-play hedge against global warming.
Maybe the mere mention of this marks a top. Maybe not. When I wrote the article in December it made sense, now it is just guesswork. This looks and feels like something that has just gone parabolic and may have gone out of control, but I won’t even pretend to be able to claim that my Uranium crystal ball is working. So here is where some of these stocks are, and it is hard not to notice the performance:
USEC (USU-NYSE) today $18.90, DEC 11 $13.14
Cameco Corp (CCJ-NYSE) today $45.75, DEC 11 $38.80
Uranium Resources (URRE-NASDAQ) today $9.68, DEC 11 $5.96
Uranerz Energy Corporation (URZ-AMEX) today $6.38, DEC 11 $3.83 (and $4.30 on Jan 3, 2007 the day they made a speculative land acquisition we discussed at the time).
Uranium Energy Corp (URME-NASDAQ/OTC) today $6.88
U.S. Energy Corp. (USEG-NASDAQ) today $5.77; DEC 11 $5.58
Back on FEB 22, 2007 Jim Cramer did a feature on a Uranium pick. He picked Energy Metals Corp. (EMU-NYSE): today it sits at $13.05 and it had closed at $11.88 that day. Sure, it fell off its rocker and traded back to under $10 briefly, but all of these have seen some major pullbacks since December before they made some major runs.
This really has all the earmarks of a “Uranium Girls Gone Wild” and many of these are already off of recent highs in the last two days. But the moves have been in many cases so sharp that it is too impossible to ignore. The good news is that there are at least put and call options in the more active names so that hedges can be made or gains can be locked in: USEC (USU) and Cameco (CCJ) have put and call options that trade. CIBC World Markets just downgraded "CCJ" on Monday because of recent performance, but by and large the coverage on most of these stocks is thin at best and it looks like more of the Canadian brokerage firms are involved compared to the US brokerage firms.
This is only a partial list and it does not include most of the Canadian names tied to Uranium. There are literally dozens of far more speculative micro-caps in the US and Canada, but keep in mind that they are the equivalent of wildcatters in the sector. I know this is one area that will generate some controversy because I have already looked to see the bickering and hatred evident between the bulls and bears in chat rooms on many of these names. StockHouse has a feature article that shows many of the speculative names in Canada if you wish to check it out. You’ll have to decide on these and other Uranium-related names all on your own.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
MedImmune Decides To Pursue a Sale
MedImmune, Inc. (MEDI-NASDAQ) announced that its board of directors has authorized management to evaluate whether third parties would have an interest in acquiring the company at a price and on terms that would represent a better value for its stockholders than having the company continue to execute its business plan on a stand-alone basis.
As of February of this year, the board re-affirmed, and the company publicly disclosed, the board’s belief that the best way for the company to maximize value for its stockholders is to aggressively implement its business plan. However, indications of interest by major pharmaceutical companies, coupled with recent expressions by certain stockholders of dissatisfaction with the company’s short-term stock price performance, have led the board to authorize management to gather information regarding possible strategic interest in acquiring the company.
MedImmune has hired Goldman Sachs & Co. and Dewey Ballantine LLP to assist in the process, which it says is well underway. It is also saying that it will not publicly disclose further information regarding the status of its evaluation until the process has been completed.
If you will recall, that the January 5, 2007 version of Business Week noted in an article that MEDI could fetch $45.00 in a takeover offer (our morning summary here). This morning shares are up 8% on more than 4 million shares to what will be a new year high; the prior 52-week range was $24.87 to $38.34. This one used to trade over $60.00 per share back in 2000 and has bee trading between $20.00 to $40.00 for the last 4 years. As of yesterday’s close it had a market cap of $9 Billion.
Here is what a buyer would get as far as products and here is what a buyer would be locking down as far as a R&D pipeline. Here is what it already has as far as R&D Collaborations.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Wal-Mart: Sales Up, Earnings Down?
Wal-Mart (WMT) said its same store sales for the period rose 4% in March. Sales for the five weeks ending April 6 were up almost 12% to $34.26 billion.
That would appear to be very, very good news for the nation’s largest retailer, which has been watching its same store sales move up 1% or so recently.
But, the company said hitting earnings targets for the current quarter may be challenging.
Odd.
Douglas A. McIntyre
Vonage Decides Its CEO Must Go, Finally
Vonage Holdings Corp. (VG-NYSE) announced that Michael Snyder has (FINALLY) stepped down from his position as CEO and resigned from the Company’s Board of Directors effective April 11, 2007. Jeffrey Citron, Chairman, has been appointed as the interim CEO and is expected to serve on a short-term basis. Vonage will also begin a search for Mr. Snyder’s replacement.
The Company also announced its preliminary estimation of its operating and financial results for the quarter ended March 31, 2007: Total Revenue $195 million (versus estimates of $197.5M); Gross Subscriber Line Additions 332,000; Net Subscriber Line Additions 166,000; Average Monthly Customer Churn 2.4%;Marketing Cost per Gross Subscriber Line Addition $275.
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