Monthly Archives: June 2008

Sirius (SIRI): A Mysterious Rally

Sirius (SIRI) staged an odd rally late Friday, moving up 15%. the rise began after 2 PM.

The sharp increase in the shares was may on tremendous volume, nearly 47 million shares.That is nearly twice what the company trades in a normal day.

There may be more rumors that the FCC is going to give the Sirius merger with XM Satellite (XMSR) more generous terms than Wall St. thinks. So far it has been assumed that pricing to the consumer will be capped to prevent monopoly pricing. But, both companies are in such bad financial shape that regulators may fell allowing for no increases in pricing to the consumer could doom the two companies.

No matter what the cause, Sirius is likely to drop back to where its started and drop back there early Monday.

Douglas A. McIntyre

Posted on: June 29, 2008 – 6:59 am in Satellite, ,

Media Digest 6/21/2008 (BCS)(MSFT)

According to Reuters, Steve Ballmer has become the lone voice at the head of Microsoft (MSFT).

Reuters writes that fund managers hope that clients from sovereign funds will fill the gap left in money management income.

Reuters writes that the head of BNP Paribas says the worst of the credit crisis is over.

The Telegraph writest that the CEO of Barclays (BCS) say the 4.5 billion pound the company raised will get it through the current crisis.

The FT writes that global markets are going to have their worst first half in 26 years.

Bloomberg writes that the president of OPEC say oil may hit $170 this year.

Douglas A. McIntyre

Posted on: June 29, 2008 – 6:06 am in Press Digest, ,

Apple (AAPL): The Recession Comes Calling

Wall St. was disappointed by RIM’s (RIMM) forecast for the upcoming few quarters? Could the same thing happen to Apple (AAPL)?

Several companies in the cell phone business have made comment that the second half of the year will be rough. The latest was Sony-Ericsson, which relies on high-end handsets for most of its sales. Shares in Nokia (NOK) have dropped sharply on similar concerns.

The launch of the new 3G iPhone is almost certain to be a success which will be the envy of every other handset company in the world. But, if the recession continues to deepen, what happens to the product a month or two after the first flood of buyers?

A recession will cut into the buying power of customers shopping for iPhones, iPods, and Mac, but inflation, which erodes consumer spending capacity, is even worse. All of Apple’s products are discretionary purchases, which makes the company vulnerable to a sharp drop in the economy.

Apple’s shares have already made a move down from nearly $190 in early June to $170. If analysts begin to show concern that Apple’s sales are being cut by sharp drops in consumer purchasing, the firm’s shares could move back toward $120 where they traded in late March.

Douglas A. McIntyre

Posted on: June 28, 2008 – 8:26 am in Consumer Electronics, , ,

Media Digest 6/28/2008 (MBI)(SI)(LEH)(MER)(BUD)

According to Reuters, the Anheuser-Busch (BUD) board is under pressure to justify what it did not take InBev’s buy-out offer.

Reuters writes that overseas money is reluctant to invest in US car companies.

Reuters reports that consumer spending moved up as people got federal rebate checks.

Reuters reports that Lehman (LEH) says Merrill Lynch (MER) may write-down $5.4 million in Q2.

Reuters reports that Moody’s is likely to cut Morgan Stanley’s (MS) credit rating.

The Wall Street Journal reports that the Dow has hit bear market territory.

The Wall Street Journal writes that Siemens (SI) will cut over 17,000 jobs.

The Wall Street Journal reports that Anheuser-Busch will lay-off 1,000 people. raise prices, and buy-back more shares.

The Wall Street Journal writes that handset company Sony-Ericsson warned that its business was doing poorly.

The Wall Street Journal writes that MBIA (MBI) is selling munis to raise cash.

The New York Times reports that venture investors had an unusually poor quarter.

The FT writes that Merrill Lynch is considering selling its stakes in Blackrock and Bloomberg in the hope of raising $15 billion.

Douglas A. McIntyre

Posted on: June 28, 2008 – 4:40 am in Press Digest, , , , , ,

The 52-Week Low Club (ABK)(WM)(HUN)(IGT)(AEO)(SFD)

Smithfield Foods (SFD) S&P downgrades due to credit problems. Falls to $19.75 from 52-week high of $24.69.

American Eagle Outfitters (AEO) President of the company is leaving, and retail is poor. Falls to $13.37 from 52-week high of $28.28.

International Game Technology (IGT) Morgan Stanley downgrades after earnings. Sells down to $24.38 from 52-week high of $49.41.

Huntsman (HUN) Still falling after failed IPO. Down to $9.76 from 52-week high of $28.40.

Washington Mutual (WM) Still grave concerns about write-offs. Drops to $4.65 from 52-week high of $44.04.

Ambac (ABK) More worries about future credit agency downgrades. Dips ot $1.60 from 52-week high of $88.65.

Douglas A. McIntyre

Posted on: June 27, 2008 – 2:47 pm in HI/LOW, , , , , ,

Bear Market Forming An IPO Famine?

This week could be called "official bear market territory" with some traders, but IPO traders might call this one the "IPO Withdraw Week."  As you will see below, we had three IPO filings get formally withdrawn this week.

Initiate Systems, Inc.withdrew its planned IPO…."The initial public offering would have been a discretionary financing for the Registrant. The terms currently obtainable in the public marketplace are not sufficiently attractive to the Registrant to warrant proceeding with the initial public offering. "

Broncus Technologies, Inc. withdrew its IPO "due to current public market conditions"

Sonics also withdrew its IPO on Monday in a filing with the SEC.  Here was the original filing.

Jon C. Ogg
June 27, 2008

Posted on: June 27, 2008 – 1:28 pm in IPOs

Some Good News for Cheniere Energy, Finally (LNG, CQP, JPM)

For the past two months, all the news from Cheniere Energy (AMEX:LNG) has been bad. First, there was the triple whammy. Then there was an awful earnings report for Cheniere and its spin-off, Cheniere Energy Partners (AMEX:CQP). Last, the company’s stock hit a 52-week low on May 9th, and has dropped as low as $3.65/share since then.

Cheniere shares hit a high of $5.05 today on the company’s announcement that it has reached a marketing agreement for its re-gasified LNG at the Sabine Pass terminal. Cheniere Partners reached $9.42 earlier today, before backing off to $9.12 currently. A subsidiary of J.P. Morgan (NYSE:JPM), J.P. Morgan Ventures Energy Corporation, will purchase LNG cargoes from Cheniere as soon as the LNG gets to Sabine Pass. In return, the JPM energy group acquires some storage and re-gasification capacity from Cheniere. The mother ship, JPM, guarantees all the energy group’s financial obligations.

This is the first good news the Cheniere companies have had in some time. It does reduce their earnings potential, but the companies were so short of cash that their ability to pay for LNG cargoes was questionable. Now, however, the deal with Morgan frees Cheniere from life support. The agreement probably won’t have any impact in the second quarter, where analysts are estimating Cheniere’s loss at $1.12/share. But estimated third quarter losses of $1.29/share will almost certainly be revised downward.

Paul Ausick
June 27, 2008

Posted on: June 27, 2008 – 10:43 am in Oil & Gas, , ,

Virgin Hopes Helio Can Slow Customer Defections (VM, ELNK, SKM, S)

If you have followed the launch of the "cool cellular" service called Helio over the last year or so, you might be among the few who remembered it even launched.  This was the joint venture between Earthlink Inc. (NASDAQ: ELNK) and SK Telecom (NYSE: SKM).  Richard Branson’s Virgin mobile USA Inc. (NYSE: VM) has decided it might be able to to turn this into shinola, and if it doesn’t work out it will have ended up being a tiny gamble.

Virgin is acquiring Helio for nearly $39 million.  But it is acquiring the company with 13 million shares of stock.  The interesting part here is that Virgin may actually get to lower its network costs in the carrier agreement with Sprint (NYSE: S).

Helio will give Virgin Mobile approximately 170,000 existing subscribers with an average revenue per of close to $80.00.  It will also give it a a handset inventory of some 85,000 units with a book value of $17 million.  With 20% of Virgin’s customers migrating to post-paid products, the company hopes this will add to the retention.

Virgin Group and SK Telecom will each invest $25 million of capital into the operations in the form of mandatory convertible preferred stock with an $8.50 per share conversion price. These will have a four-year maturity and a 6% annual dividend, and SK Telecom will own a combined equivalent of approximately 17% of Virgin Mobile USA and will take two seats on Virgin Mobile USA’s Board of Directors.

EarthLink shares are down over 3% today at $8.72 as this will likely result in a charge for the company.  Virgin Mobile USA shares are up less than 1% at $3.00 on the day.

Jon C. Ogg
June 27, 2008

Posted on: June 27, 2008 – 10:27 am in Wireless, , , ,

Seven High-Yield Dividend Stocks For The Current Market (MO, AIV, T, VZ, DOW, DUK, SNH)

We have been running through many companies to determine which dividends appear safe.  Investors chase high dividend stocks with stable earnings when they are concerned about where to put their money.  We looked for stocks with dividend yields north of 4.5% (above 10-YR T-Note) as the cut-off and those who are expected to see earnings remain ample to maintain the numbers.  We had to eliminate everything tied to financial stocks in this climate as many dividends there are trimmed.  We also had to eliminate anything tied to high volatility and anything tied to auto’s.  We screened many others, but here are seven stocks with dividends that we think will either stay the same or grow in the coming year.

Altria Group, Inc. (NYSE: MO) is one of the old defensive stocks in a defensive sector: good old investor-friendly and cancer-causing tobacco.  The company recently split off Philip Morris International unit and is in the midst of a buyback and restructuring.  This company didn’t drop the dividend when the stock was butchered in the 1990’s, so now that its business is stable it’s a safe bet that it will try to keep its dividend no matter what.  With a $1.16 dividend (annualized) you have a 5.4% yield as of today and the $1.67 EPS estimate for 2008 and $1.84 EPS estimate for 2009 may actually leave more room for that dividend to increase rather than just stay the same.

Apartment Investment & Management Co. (NYSE: AIV) is one of th larger apartment-REIT’s out there, and it is diversified on property scales and by geography.  REIT’s also have to pay out 90% of their taxable income to shareholders in the form of dividends.  While apartments have not at all been immune from late-pays, the credit crunch, and the soft economy, the one area that sane people can’t eliminate is their roof.  Unless they want to be homeless, destitute, or back with mom and dad, the public has to live somewhere.  Unfortunately that has not translated into share appreciation as this has lost more than 1/3 of its value.  Its $2.40 dividend does seem sustainable with expected FFO (equivalent to EPS) of $3.25 in 2008 and $3.41 in 2009.  Because the price has come off this much, its current dividend yield is almost 6.8%.

AT& T (NYSE: T) and Verizon Communications (NYSE: VZ) are both believed to have safe and stable dividends.  Out of the two, Verizon is in the midst of a larger acquisition.  It is not expected to tie up all the cash that would have been applicable for the dividend, but this does make AT&T as the leader now that its recombination of BellSouth, SBC Communications and the old AT&T are all Ma-Bell once again.  AT&T has a $198 Billion market cap, its dividend is currently $1.60/annualized (4.60%), and forward income estimates of $3.01 EPS for 2008 and $3.38 for 2009 make the dividend more than sustainable for AT&T.

Dow Chemical Co. (NYSE: DOW) is perhaps one of the least exciting of industries, but because it has a monster track record and it has to keep running whether the economy is good or bad (with profits) this one made the list.  The company’s $1.68 dividend (annualized) generates an approximate yield of 4.6%.  The reason this has made the cut in the 4.5% yield threshold is because the stock is so far off of its recent highs.  At $35.10 (Thursday close), its shares are down from almost $48.00.  With over $3.00 in projected EPS in both 2008 and 2009, its $1.68 annualized dividend doesn’t look in jeopardy.  When you consider its recent flurry of price hike announcements and a perception that the pricing power will be able to stick, that seems even more likely today.

Duke Energy Corp. (NYSE: DUK) is one of the top ten electric utilities in the U.S. with a market cap north of $20 Billion.  Its main operations are in the Carolinas with smaller presence in Ohio, Indiana, and Kentucky; and it has some Latin American exposure as well.  The utility isn’t immune from current issue, and while its debt-to-equity is lower than many it has lower valuation multiples than many peers (part because of restructuring).  But one things that utilities have historically sought is to be steady dividend payers, and they hate lowering dividends.  Earnings estimates of $1.28 EPS in 2008 and $1.35 EPS in 2009 should allow this giant electric utility to keep on paying out a $0.92 annualized dividend even if it does have to eat some higher costs that can’t be entirely passed down to consumers.

Senior Housing Properties Trust (NYSE: SNH) has been one of the more reliable senior care facility operators and REIT compared to many peers of late.  This sector even fits within our "secular trend" sector as the elderly care facility sector has far more future demand than current and planned supply when you look at the managed elderly care facilities.  Its FFO (EPS equivalent) estimates of $1.71 for 2008 and $1.79 for 2009 should allow the company to maintain its $1.40 (annualized) dividend.  Because the company has made an acquisition and financed it with a dilutive secondary offering, we are not expecting the real earnings jump to come that would increase dividend-eligible income (90% for REIT’s) until 2010 or 2011.  But the income is there to maintain its dividend and the company would likely rather sell stock or take on light debt rather than to cut its dividend to holders. This one isn’t without any risk, but as it is in the middle of a longer-term range and as the company has been a stable operator of nursing homes where others haven’t done as well we feel the company can maintain its high dividend.   

Jon C. Ogg
June 27, 2008

Posted on: June 27, 2008 – 9:35 am in Defensive Stocks, Dividend, , , , , , ,

Goldman Sachs Pans Ethanol (AVR, PEIX, VSE)

In coverage this morning, Goldman Sachs has come out and reiterated the firm’s Cautious analyst coverage view for the corn-based ethanol producers.  Specifically, the firm has reiterated its "SELL" ratings on:

  • Aventine Renewable Energy (NYSE: AVR),
  • Pacific Ethanol NASDAQ: PEIX),
  • and VeraSun Energy (NYSE: VSE).

The firm notes that corn markets are already short of supply already tight and that spot prices are now much higher because of the Midwest flooding.  It also noted that the next big ramp-up in ethanol capacity will keep pressure on ethanol equities.

As part of this call, Goldman Sachs made wider loss projections for PEIX in 2008 and 2009 and now sees losses rather than gains in VSE as well.  The interesting part of the call besides the reiterated Sell rating is that Goldman Sachs actually now sees a gain in AVR and less of an earnings drop-off in 2009 as a result of likely decelerated plant expansion plans.

Jon C. Ogg
June 27, 2008

Posted on: June 27, 2008 – 6:27 am in Alternative Energy, Analyst Calls, , ,

Early-Bird Technology Upgrades & Downgrades (ARMH, FFIV, MFE, MOT, NOK, NOVL, QCOM, TIBX)

These are the earl-bird upgrades and downgrades we are seeing in Telecom, Tech, and I.T. on this Friday morning with about two and a half hours to open:

  • ARM Holdings (NASDAQ: ARMH) raised to Outperform at Credit Suisse.
  • F5 Networks (NASDAQ: FFIV) started as Buy at Deutsche Bank.
  • McAfee (NYSE: MFE) Started as Outperform at R.W.Baird.
  • Motorola (NYSE: MOT) Started as Underperform at Credit Suisse.
  • Nokia (NYSE: NOK) Downgraded to Neutral at Credit Suisse.
  • Novell (NASDAQ: NOVL) Raised to Buy from Hold at Jefferies.
  • Qualcomm (NASDAQ: QCOM) Started as Outperform at Credit Suisse.
  • Tibco Software (NASDAQ: TIBX) Raised to Hold from Underperform at Jefferies.

Full Med-Bio Analyst Upgrade/Downgrade summary from BioHealthInvestor.com: BMY, EHTH, IMCL, BABY, NUVA, ONXX, OSIP, ZMH

Jon C. Ogg
June 27, 2008

Posted on: June 27, 2008 – 6:08 am in Analyst Calls, Technology Companies, , , , , , , ,

Microsoft (MSFT): Ballmer’s Big Plan

The Wall Street Journal has unearthed a memo from Steve Ballmer, CEO of Microsoft (MSFT). In it, he lays out some of his plans for the company.

The program falls into four buckets. The first is that he will more carefully monitor the launch of Windows 7, which will eventually replace the doomed Vista OS. Next, he will set up a structure which allows the operating groups within the company to work more closely together. Third, he wants to build out a consumer electronics group. As the paper writes, "He now is pushing to more aggressively attack the consumer market and compete with Apple’s hit iPhone." Finally, he wants to ramp up his internet group and search business.

The memo may be instructive, but is covers ground which has been part of the Microsoft push for over a year.

Ballmer does have a shot at the consumer electronics business, but it is a long one. The Xbox has been a huge success. The Zune multimedia player has been a tremendous failure. Competing with the iPhone is a dream, but not one that will come true.

Search is also a long shot. If Ballmer can pull that off without the Yahoo! deal, it will be a miracle.

The hopes for Windows 7 are the most important hopes, and they are real and realistic. Microsoft has certainly learned from Vista. The product before it, XP, is a fine map for what Windows 7 could be. The OS is where Microsoft makes its money. It should stick to the knitting.

Douglas A. McIntyre

Posted on: June 27, 2008 – 5:28 am in Software,

Apple’s (AAPL) China Adventure, The Death Of iPhone Margins

After over a year of playing cat and mouse, it looks like Apple (AAPL) may be close to a deal with China Mobile (CHL) to sell the iPhone on the mainland. Since the country has more cellular subscribers that any nation in the world and the base is growing rapidly, it may be the most critical deal Apple can strike to drive rapid adoption of its newest product.

The problem that China Mobile has had with Mr. Jobs is that he wanted a piece of the subscription revenue from each customer who bought the phone. He seems to have dropped that requirement. According to Reuters, "Apple is no longer insisting on a revenue-sharing policy, so the biggest hurdle for China Mobile to bring in the iPhone has been cleared, but there are practical issues still to be resolved," said China Mobile spokeswoman Rainie Lei.

In the process of getting into China and some other markets, Apple is taking a very significant risk. A piece of the subscription revenue for each iPhone buyer could be worth several hundred dollars every year year for every unit. Giving it up hurts the profit for each handset sold. Apple is also dropping the price of the 3G iPhone to drive adoption.

Apple may eventually end up selling 20 million iPhones worldwide every year. It will be faced with the unpleasant reality the now bedevils firms like Motorola (MOT) and Nokia (NOK). Sales volume is not any good as a substitute for a high yield on each product. Low margins have never been part of the Apple formula for success.

That is probably about to change, and Apple is going to be much worse off for it.

Douglas A. McIntyre

Posted on: June 27, 2008 – 4:37 am in Wireless, , , ,

A Plan To Save The Stock Market (GE)(MSFT)

If the stock market crashes, it could bite a number of parts of the economy, and bite them hard. There are several things that Congress could do to help the situation, although the government body is almost always slow to act.

The laundry list is short, but a 2,000 point drop in the Dow could wipe out the savings of many of America’s older citizens and some of the so-called baby boombers. With home prices falling, a big sell-off could take the net worth of many citizens to zero.

1. Eliminate the tax on dividends. This would drive buyers into many large cap companies which have strong yields. Companies like GE (NYSE:GE) are almost certainly a source of safe yields for shareholders even if the stock is at a multi-year low.

2. Open the strategic oil reserve. The government could "talk" the price of oil down by putting its own supply of oil into the market. Is there a risk? Yes. In the event of a huge interruption of supply coming into the country, the US could be caught short. But, high oil prices may be the greatest enemy of the stock market.

3. Allow investments in the market to be tax deductible for one year. A dollar into the market is a dollar taken off of income. The benefit of owning common shares goes up, even if the market continues to drop.

4. Give public companies a tax credit for the buy-backs of their own shares. Shrinking the base of stock outstanding increase EPS. This does not always increase share price, but it may in cases where companies have huge cash reserves. Microsoft (MSFT) may be one of the best examples.

5. Move private equity back into the market. The best way to do this may be for the Fed to supply banks with capital to lend to buyers by creating a facility that allows deals to be done with below market  interest rates.

6. Take away all caps on the tax benefits of money put into IRAs. It encourages the purchase of stock for future retirement needs.

Of course, by the time Congress looks at any of these options, it will be the end of the decade.

Douglas A. McIntyre

Posted on: June 27, 2008 – 4:21 am in Economy, ,

Media Digest 6/27/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, M&A activity is down sharply.

Reuters writes that Anheuser-Busch (BUD) turned down an offer from InBeve.

Reuters reports that Yahoo! (YHOO) has realigned its senion management

Reuters reports that China Mobile (CHL) said it was making progress with Apple (AAPL) on iPhone distribution.

The Wall Street Journal reports that Mozilo of Countrywide (CFC) helped many people get loans.

The Wall Street Journal writes that the Fed will make it easier for private equity firms to invest in banks.

The Wall Street Journal writes that IACI (IACI) will take a $300 million goodwill hit.

The Wall Street Journal write that the new Centro did not keep Palm (PALM) from a big loss.

The New York Times writes that a suit claims that UBS (UBS) misled investors.

The New York Times writes that Sony (SNE) has put together a plan to improve returns in its electronics businesses.

The Wall Street Journal writes that Ford (F) is offering buy-outs at some of its plants.

The Wall Street Journal reports that a memo from Microsoft’s (MSFT) Ballmer offers clues about what he will do with the company.

The New York Times writes that Chrysler brought back Lee Iacocca to give employess a pep talk.

The FT writes that Verizon (VZ) is pressing Vodafone (VOD) to exit its piece of Verizon Wireless.

Bloomberg writes that AIG (AIG) is facing another $5 billion in write-downs.

Douglas A. McIntyre

Posted on: June 27, 2008 – 3:04 am in Uncategorized, , , , , , , , , , , ,

Asia Market 6/27/2008

Markets in Asia were down sharply.

The Nikkei fell 2% to 13,544.

The Hang Seng fell 1.8% to 22,055.

The Shanghai Composite fell 5.3% to 2,746.

Data from MarketWatch

Douglas A. McIntyre

Read More »

Posted on: June 27, 2008 – 2:42 am in International Markets

XM Taps Credit Facility, Extends Chairman Contract (XMSR, SIRI)

XM Satellite Radio Inc. (NASDAQ: XMSR) and its XM Satellite Radio Holdings Inc. announced in a filing today that (on June 26, 2008) it has entered into a Credit Agreement relating to a $100 million term loan with UBS AG.

XM said it has used a portion of the loan proceeds to repay the previously disclosed draw under its $150 million GM credit facility. Following the repayment, XM noted in the filing that it has full access to the GM credit facility.

On June 26, 2008, the lenders who are party to XM’s $250 million revolving secured facility entered into a fourth amendment to the original facility to approve the credit agreement (which replaces XM’s right under the Original Facility to elect to increase the size of the Original Facility by $100 million).

Goldman Sachs said that both Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM would need cash, but this is just the credit facility side of it.

The Credit Agreement has a scheduled maturity date of May 5, 2009 and will survive if the pending merger with Sirius Satellite Radio is consummated.  The agreement is also secured by substantially all of XM’s assets other than specified property.  Additionally, this contains a financial covenant that requires XM to maintain a level of cash (and equivalents) from time to time of either $50 million or $75 million.

In a separate note, the company noted in this filing that Chairman Gary parsons extended his employment term from June 30, 2008 to November 18, 2009.

Jon C. Ogg
June 26, 2008

Posted on: June 26, 2008 – 4:23 pm in Satellite, ,

Five Big Winners For A Crummy Day (BBBY, NVO, SWHC, S, AUY)

Chances are that if you weren’t short selling all day, this was another ugly summer day that made you want to panic. Covering the market wasn’t any more fun either.  But imagine that there were some key stock winners on a day where oil breaks above $140.00 per barrel and when the DJIA, NASDAQ, and S&P 500 were all down roughly 3%.  You might think you’d have to be Dr. Pangloss for any positive takes, but here are a few key stock winners:

Bed Bath & Beyond Inc. (NASDAQ: BBBY) closed up 4.27% at $29.79 after beating earnings the night before.  We saw nearly triple the volume with more than 14.3 million shares traded.  Earnings were down from the prior year but still better than analysts were expecting.  You just know their customer base isn’t going to stay at home forever, recession or not….

Novo Nordisk A/S (NYSE: NVO) was another standout winner, and it is amazing that the volume on this diabetes winner has remained so low.  The Danish drug company is often one of the few winners on crummy days as their diabetes treatments are above and beyond all.  Shares closed up 2.8% at $67.85.  While 480,000 shares isn’t as actively traded as many key US drug stocks, it is nearly double a normal day for NVO shares. Recession or no recession, that insulin for diabetics has to keep coming and it has to keep getting better and better.

Smith & Wesson Holding Corp. (NASDAQ: SWHC) rose by 6.6% to $5.45 today on more than double volume of 1.66 million shares.  And it wasn’t because we all have to buy guns to fight off the economically challenged. The Supreme Court overturned a handgun ban in Washington D.C. by a 5-4 decision, ruling that the district’s handgun laws violated the Second Amendment by denying individuals the right to own guns.

Sprint Nextel Corp. (NYSE: S) bucked the day’s trends after it said that the recently launched touch screen Samsung Instinct smart phone broke company sales records in its first week in stores.  If there was a phone company that needed a rally, it’s Sprint.  Shares closed up almost 3.4% at $8.84 on almost twice the normal trading volume with more than 64 million shares trading hands.

Yamana Gold Inc. (NYSE: AUY) was the volume leader in major gold stocks today.  With a weakening dollar and oil cruising past $140/barrel, you know the gold bugs were winning today.  We saw more than a 3% gain to back above $900/ounce for gold today.  Yamana shares were up 6.8% at $15.61 on over 21.4 million shares, almost twice its average daily volume.

Interestingly enough, none of the major integrated U.S. oil companies rose today.  Even that huge list of DEFENSIVE STOCKS FOR A CRUMMY MARKET failed to perform again today. 

Jon C. Ogg
June 26, 2008

Posted on: June 26, 2008 – 4:03 pm in Defensive Stocks, HI/LOW, , , , ,

Palm (PALM) Bites The Dust As Yield-Per-Phone Collapses

Things were supposed to be bad at Palm (PALM), but, based on earnings, they were even worse.

The firm, which has products which compete with the Apple (AAPL) iPhone and RIM (RIMM) Blackberry, among others, posted a loss of $41 million on revenue of $296 million. For the quarter ending May 31 a year ago, the numbers were much better. Revenue was $410 million and the company had a $17 million net profit.

According to the company "Smartphone sell-through for the quarter reached a record high, totaling 968,000 units, up 29 percent year over year." That means the price that Palm got for each phone was awful.

Cash and short-term investments were $258 million at the end of the quarter compared to $546 million at the end of the period a year ago.

The market did not much like the news. Shares were down almost 8% after hours to $6.01.

Douglas A. McIntyre

Posted on: June 26, 2008 – 3:28 pm in Wireless, , ,

Micron Dribbles Earnings (MU)

Micron Technology, Inc., (NYSE:MU) posted earnings at -$0.30 EPS on net sales of $1.5 Billion.   First Call had estimates at -$0.28 EPS on $1.47 Billion in revenues.

The company generated $217 million in cash flow from operating activities during the third quarter of fiscal 2008 and ended the quarter with $1.6 billion in cash and investments.

The company didn’t offer any fixed outlook in its press release, so all ears that care after a day like today will be on that conference call.  As Wall Street had a dismal day, shares are indicated modestly lower after a 7.1% drop to $6.99 in regular trading.

Jon C. Ogg
June 26, 2008

Posted on: June 26, 2008 – 3:13 pm in Earnings, Semiconductor,