Daily Archives: October 14, 2007

A Knock On GE (GE)

“GE did not manage to convert growth into profitability as well as we had expected,” Nigel Coe at Deutsche Bank said to the FT. That seemed to sum up why the GE third quarter earnings pushed the stock down last week.

Margins in the big GE infrastructure businesses fell slightly compared to the numbers for the third quarter last year. The same was true for the commercial finance operations.

GE can continue to show "faster the the economy" growth. But, the market wants to see a better yield.

Douglas A. McIntyre

Posted on: October 14, 2007 – 1:16 pm in Conglomerates,

Are Hong Kong Shares Cheap?

Some interesting analysis from Bloomberg. "Hong Kong’s most expensive stockmarket in three years looks cheap to investors at TempletonAsset Management Ltd. and Baring Asset Management Inc." And based on cash flow, HongKong is the cheapest among the 20 biggest markets, data compiledby Bloomberg show.

But, the Heng Seng is up only 45% year-to-date compared to 120% for the rival Shanghai Composite. Bloomberg points out:  "The 10 most expensive Hang Seng stocks include sixcompanies based in Beijing, Shanghai or Shenzhen. Their sharestrade between 34.9 times and 62.8 times profit, Bloomberg datashow. The same stocks are valued at 42.5 to 70.4 times onChina’s mainland exchanges."

Based on those numbers, it does not matter which exchange lists these companies. They are too expensive.

Douglas A. McIntyre

Posted on: October 14, 2007 – 12:13 pm in China

BloggingStocks And SeekingAlpha: A Horse Race

After last week’s 24/7 Wall  St. valuation piece that pegged financial blog and comment site  SeekingAlpha’s value at  $36 milllion,  we took a look  at  its primary competition,  AOL’s  BloggingStocks. Based on  information from  traffic  measurement site Compete,  BloggingStocks picked up a lead in September, after  the  two sites were  in  a dead heat for  August.   

Douglas A. McIntyre

Posted on: October 14, 2007 – 11:02 am in Internet

The Week’s 52-week Highs And The Broader Market

A number of investors watch the list of 52-week highs each day or eachweek. It is a list that tells a story. Stocks that have risen over along period can be a "tell" about investor confidence. But,  a loftyprice may also be a signal that a company’s shares may have outrun themarket and are set for a tumble.

A few companies that hit 52-week highs last week:

Baidu (NASDAQ:BIDU)The shares in the Chinese search engine company may be the single mostimportant proxy traded on US markets about how the super-hot economy inthat country is viewed. The firm is visible because it has the largestshare of the search market in China, well ahead of Google (NASDAQ:GOOG)Baidu shares moved to over $359 last week, putting them up about 200%for the year. On comments that the company might not have strong Q4guidance, the stock slipped to under $300, but recovered to $323. So,the shares still have a huge gain in 2007. If this stock moves downsharply from here, it indicates problems with China stock valuationsand possibly a concern about internet share valuations.

Charles Schwab (NASDAQ:SCHW)At mid-week, the premier discount broker was up 20% for the year toover $23. But, the remarkable thing about these shares is the recoverythat they have staged since the credit market pulled financial sharesdown two months ago. Schwab is up about 18% since then. Have retailinvestors taken the market drop and trouble with mortgages in stride?Schwab’s stock would seem to indicate that. But, if it moves down andstays down for any period, the smaller investor may have left thebuilding.

Amazon (NASDAQ:AMZN) and Ebay (NASDAQ:EBAY).These stocks are the bell weathers for e-commerce. As  retail moves outof  physical stores and onto the internet, same-store sales are underpressure. But, if some of that slack is picked up online, then theconsumer may still be with us. Any disappointment in earnings in thesetwo may be a red flag showing that consumer spending has moved into thenegative column.

GM (NYSE:GM)Is Detroit back. GM shares seem to say so. For the first time sinceOctober 2004, GM shares moved above $43. The market believes that GM’ssteady sales in the US over the last two months coupled with costreductions coming out of the UAW negotiations mean the the company’sNorth American operations may finally be out of the woods. But, ifsales comparisons with last year turn negative in the fourth quarter,high fuel prices, a surging Toyota (NYSE:TM),and a falling housing market may have begun to drag auto sales sharplydown. GM share would be in for a significant correction.

Douglas A. McIntyre is a partner at 24/Wall St.

Posted on: October 14, 2007 – 8:10 am in HI/LOW, , , , , , ,

Qualcomm (QCOM): The Incompetence Gets Worse

CNNMoney writes: "Chipmaker Qualcomm (QCOM) dueled Friday in federal court with its hiredattorneys over who shoulders the blame for what a judge called "grossmisconduct on a massive scale" at a past trial." The news channel adds that the possibility of sanctions has threatened the careers of attorneysfrom two Silicon Valley firms and prolonged a damaging episode forQualcomm.

Qualcomm and/or its lawyers did manage to "misplace" more than 200,000 pages of documents in a trial against archrival Broadcom (BRCM).

Qualcomm says that not producing the articles was a mistake. The attorneys say the never intended to mislead anyone.

The Vegas odds that the judge believe either the company or its attorneys is 10,000-to-1 against

Douglas A. McIntyre

Posted on: October 14, 2007 – 6:29 am in Law,