Daily Archives: August 11, 2007

Massive 52-Week Lows (Aug. 11, 2007)

ALU AMGN ANN BBW BECN CC CKEC DNA FINL HAUP HILL HLYS  INSP MAQ NAPS NTES NWY OPWV PMI RVI TRAC TI TMA TRB VECO WYE

52-week lows are always an interesting lot.  We screened out many many names, but this list here is almost shocking.  Yesterday’s recovery didn’t pertain to everyone, and all things considered it could have been worse.  Much worse.  Some of the companies you’d almost never guess they would be appearing in this hall of shame.  Others, well they are obvious.  Sorry for some of the off the cuff commentary, but it’s the only way to keep sane looking at this list.

Alcatel-Lucent (ALU)… you know the French are trying to figure out a way to give Lucent back.  Who could blame them…

Amgen (AMGN)… this is a biotech that turned into a crummy pharma.  This is also what happens when Congress earmarks your whole line of goods for attack.

Ann Taylor (ANN)… this was surprising.

Build-A-Bear Workshop Inc. (BBW).. "Sorry kids.  You can’t have those custom expensive Teddie Bears.  Mommy & Daddy took out a NINJA loan and we can’t take anymore out of the dirt anymore.  Can we put your other Toys on eBay.  We love you kids."

Beacon Roofing Supply Inc. (BECN)… I know this CEO is praying for a many low grade hurricanes.  Who could blame him?

page forward to continue the massive list…..

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Posted on: August 11, 2007 – 11:51 am in HI/LOW,

Verizon (VZ) FiOS And The Corning’s (GLW) Miracle Fiber

GigaOm pointed out yesterday that Verizon (VZ) now has about 1.1 million FiOS fiber-to-the-home customers being delivered voice, broadband and TV. The telecom is adding 2,600 customers a day.

For those in the media and on Wall St. who believed that FiOS would be a $23 billion train wreck, the early signs are that the system may do well.

But, fiber has had a big drawback and that is raising Verizon’s installation costs considerably. As Barron’s points out: "Existing fiber cable can’t be bent without significant loss of signal, requiring expensive corner-turning devices." But, Corning (GLW) seems to have solved that problem. In the near future, it is bringing fiber that bends without signal problems to market.

The product should cut some of Verizon’s costs for installing FiOS in seven million homes, which is its goal. It should also help the revenue picture for Corning’s telecom business.

Better earnings, lower costs.

Douglas A. McIntyre

Posted on: August 11, 2007 – 11:11 am in Uncategorized, ,

The Future Of Linux Still Dark (NOVL)(IBM))(MSFT)(RHT)

A federal judge ruled yesterday that Novell (NOVL) is the owner of the critical copyrights for the Unix operating system. Another company SCO Group (SCOX) had claimed these rights. As The New York Times writes: "The ruling could remove the cloud over open-source software like Linux, an operating system loosely modeled on the proprietary Unix." SCO had sued IBM (IBM) over intellectual property rights for Unix, and that suit will now have to be dropped.

Two things will probably happen immediately. SCO shares, which traded at $4.25 in June 2006, and are at $1.50 now, may sell off to under $1. It is fair to ask if the company has any future now. The firm only has about $6 million in revenue each quarter and losses over $1 million on that.

Novell’s shares should strengthen. The big IP issues around Linux seem to be resolved, and the theory is that companies were concerned about using it instead of Microsoft software because of the potential liabilities around the SCO litigation. Microsoft (MSFT) and Novell announced a deal in November 2006 for the companies to jointly market Windows and Linux. Novell’s shares jumped from about $6 to $9. But, as the Linux community has voiced its concern about Microsoft being in bed with Novell, its  stock has moved back to just above $6. The ruling should help drive it back up.  It should also help Redhat (RHT) the largest marketer of enterprise Linux.

The Wall Street Journal offers the opinion that "the ruling is a boon to the "open source" software movement and to Linux, the freely available computer operating system that has become an alternative to Microsoft’s Windows operating system." That may be premature.

In May of this year, Microsoft said that Linux violated 235 Microsoft patents. Redmond has not done anything about those alleged infringements, but, it may have hoped that the SCO/IBM litigation would take care of some of that.

Linux may be a little better off today, but it still lives in Microsoft’s shadow, and 235 is a lot of patents.

Douglas A. McIntyre

Posted on: August 11, 2007 – 10:20 am in Technology Companies, , , , ,

This Week on StockHouse August 6 to 10

In his From the Horse’s Mouth (http://www.stockhouse.ca/blogs.asp?page=viewblog&blogid=245) blog, 3cpxbro reports about company meetings and investment conferences. The Victoria Resource Corp (TSX: V.VIT) General Meeting (http://www.stockhouse.ca/shfn/article.asp?edtID=20060) was covered in great detail.

Reporter Robert Arber noted that the Minera Andes (TSX: T.MAI) BullBoard was returning to fine form, thanks to a fresh batch of contributions from chartmaker (http://www.stockhouse.ca/shfn/article.asp?edtID=20056) gabrielgray (http://www.stockhouse.ca/bullboards/userview.asp?usernumber=1301018).

For a discussion unclouded by acrimony (http://www.stockhouse.ca/shfn/article.asp?edtID=20070), Reporter Arber suggested looking at the Vero Energy (TSX: T.VRO) BullBoard.

StockHouse staff listed the Top Five (http://www.stockhouse.ca/shfn/article.asp?edtID=20065) posters, Boards and articles for the week.

What’s the next big development for Canadian oil sands operators? At least one poster is suggesting that Canadian Oil Sands Trust (TSX: T.COS.UN) could be snapped up (http://www.stockhouse.ca/shfn/article.asp?edtID=20067) by a buyer, but others on the BullBoard played down that buzz, according to reporter Sean Mason.

Danny Deadlock updated regular readers of his Microcap Monday column about three favourite stocks. Among them, the microcap speculator said that his oil and gas services (http://www.stockhouse.ca/shfn/article.asp?edtID=20050) company pick, High Arctic Energy Services (TSX: T.HWO), could see significant gains in the next six to twelve months, because it had survived the broader market sell-off without testing new lows.

Microcap Spotlight featured an interview with the Lakota Resources (TSX: V.LAK) chief executive, who spoke about the company’s prospects at its East African properties (http://www.stockhouse.ca/shfn/article.asp?edtID=20053).

Precious metals got multiple mentions on StockHouse this week. Steven Saville noted that gold’s recent strength (http://www.stockhouse.ca/shfn/article.asp?edtID=20058) has occurred in partnership with reduced liquidity in the markets.

An approval for a new AIDS drug (http://www.stockhouse.ca/shfn/article.asp?edtID=20063) is great news, but will not have a significant impact upon shares of Pfizer (NYSE: PFE), said Leon Hamerling & J. Paul in their weekly column.

After a long dormant season for the initial public offerings market (http://www.stockhouse.ca/shfn/article.asp?edtID=20066), things are finally heating up, wrote Jon Ogg.

While traditional energy shares have been on fire of late, Greg Silberman noted that prices for uranium companies have backed up sufficiently to be worth a second look (http://www.stockhouse.ca/shfn/article.asp?edtID=20068).

There are three stages of a bull market in resource stocks, wrote Doug Casey. The key to future profits is choosing well managed, well financed companies with mineral properties in the right areas at a time when the markets are still climbing a wall of worry (http://www.stockhouse.ca/shfn/article.asp?edtID=20072).

In this month’s Global Speculator, Troy Schwensen wrote that precious metals shares are most likely to appreciate in the near term. (http://www.stockhouse.ca/shfn/editorial.asp?edtID=20074)

Confidence is fine for most folks, noted John J. De Goey, but stock pickers suffer from a crisis in over-confidence, (http://www.stockhouse.ca/shfn/editorial.asp?edtID=20073) which is not bourn out by the research.

Posted on: August 11, 2007 – 9:47 am in Uncategorized

Qualcomm (QCOM): Double Trouble, Time For CEO To Go

It was hard to imagine that things could get worse for Qualcomm (QCOM) but they have. The company announced strong earnings this month and guided higher, but all of the other news around the firm was bad.

The White House refused an appeal of the International Trade Commission’s decision to bar imports of handsets with Qualcomm’s technology because the chips inside violated some of Broadcom’s (BRCM) patents. Verizon (VZ) took a license directly from Broadcom so that it could get phones into the US.

Nokia (NOK), Qualcomm’s largest customer, moved some of its chip sourcing to ST Microelectronics. Nokia has been fighting with Qualcomm over license fees.

Yesterday, a federal judge doubled the damages due Broadcom on three patents that Qualcomm violated. That would put the amount at about $40 million.

Qualcomm’s greed and its unwillingness to listen to either the courts or its customers has now cost the companies investors enough. Qualcomm’s share are down over 15% in the three months, and, if  legal and customer decisions keep running against the company, that will get worse.

The company needs new management and a fresh start. It is time for CEO Paul Jacobs, the son of the founder, to go.

Douglas A. McIntyre

Posted on: August 11, 2007 – 9:42 am in Wireless, , , ,

Top 5 Earnings For This Coming Week (BX, AMAT, WMT, DE, HPQ)

This coming week is going to be dominated by 5 top earnings.  We have included the name and a link through to a full earnings preview we did for each on Friday, although we are providing the basic estimates for basic numbers expected.  There are many others reporting, but you’ll notice thta there are 5 top earnings for traders to focus on and these are the ones that will impact elsewhere:

On Monday morning, you’ll get to see THE BLACKSTONE GROUP (NYSE:BX), and this is the one to watch for hints on private equity going forward.  Basic Estimates: $0.46 EPS.

On Tuesday morning we get earnings out of Wal-Mart (NYSE:WMT).  They might be boring, but their earnings and forecast can still be used as a guage for about 40% of the economy.  Basic Estimates: $0.77 EPS and $92.75 Billion in revenues.

On Tuesday, get ready for Applied Materials (NASDAQ:AMAT).  This one didn’t get the down market memo, so watch what Applied has to say to see if it can keep its upward momentum.  Basic estimates:  $0.32 EPS and $2.53 Billion in revenues.

On Wednesday, Deere & Co. (NYSE:DE) will show us earnings and let is know if they deserve to go back up from being on a long-term uptrend up until last week.  Basic estimates: $1.99 EPS and $6.65 Billion revenues.

On Thursday, you’ll get to see Hewlett-Packard (NYSE:HPQ) results.  Great expectations are going to be demanded, particularly since it has held up so well. basic estimates: $0.65 EPS and revenues of $24 Billion.

Jon C. Ogg
August 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: August 11, 2007 – 6:01 am in Calendar, Earnings, , , , ,