It’s been a tough run for contrarians. Badly beaten down companies facing overwhelmingly bearish negative market sentiment have continued to weaken: for now, the bearish masses have been right.
Part of the problem is that many of the financials that seemed cheap suffered from opaque accounting and a lack of transparency. But now there’s at least one big contrarian stock that may be poised deliver some real value: Starbucks (SBUX).
Luxury retailer Saks Inc. (SKS) today reported abysmal results, indicating that higher-end consumers are starting to feel the economic pinch as well. The company is betting that that its flagship Saks Fifth Avenue store in New York is going to help lead the company out of its funk even as Wall Street continues to flounder.
The company had a net loss of $31.7 million, or 23 cents per share, compared with a net loss of $24.6 million, or 17 cents, a year earlier. Revenue fell 3.6 percent to $662 million and same-store sales dropped 4 percent. The results missed Wall Street expectations and the shares are tanking.
Hewlett-Packard Co. (NYSE: HPQ) posted earnings of $0.86 EPS and $28 Billion revenues after today’s close. First Call had estimates at $0.83 EPS on $27.41 Billion in revenues. As far as guidance for next quarter (fiscal Q4), the PC and IT giant put earnings at $1.01 to $1.03 EPS and $30.2 to $30.3 Billion in revenues. Estimates for the October quarter (also the year-end) are expected at $1.00 EPS on $30.22 Billion in revenues. Those estimates do not reflect any addition of EDS to the numbers.
J Crew Group (JCG) Analyst downgrade. Drops to $24.86 from 52-week high of $52.44.
Cameco Corporation (CCJ) Bad profits. Down to $27.56 from 52-week high of $52.33
Fannie Mae (FNM) Ongoing concerns about shareholders being wiped out. Plunges to $5.75 from 52-week high of $70.57.
Sirf Technology (SIRF) Losing case against Broadcom will not get ITC review. Falls to $1.96 from 52-week high of $30.16.
Douglas A. McIntyre
Why any bank which has undermined the value of its shares by poor management and taken billions of dollars in low-cost loans from the Fed would promote it environmental intiative is beyond imagining.
Bank of America (BAC) will be honored for its environmental commitment at a special reception on Monday, August 25, 2008 during the upcoming Democratic National Convention in Denver.
At least shareholders know the bank like Obama.
Barnes & Noble’s (BKS) online CEO left the company today. Marie J. Toulantis ran the part of the company on which its future is largely dependent. Call it a metaphor. BKS has to be a major force on the internet, and it is not.
BKS shares are down 25% this year, and it is any wonder? The company’s last quarter was pathetic. Barnes & Noble had an operating loss of $6.4 million on $1.158 billion in revenue. The firm no longer has any margins. As long as most of its sales are through stores, that won’t change.
Traders and investors alike are braced for the long awaited earnings out of Hewlett-Packard Co. (NYSE: HPQ) after today’s close. First Call has estimates at $0.83 EPS on $27.41 Billion in revenues. Estimates for the October quarter (also the year-end) are expected at $1.00 EPS on $30.22 Billion in revenues. Please see below for the forward estimates of 2009 because of key developments and issues around the stock.
Private equity giant The Carlyle Group has announced that Lou Gerstner will retire as Chairman of Carlyle and will become a senior advisor to its buyout funds in the U.S., Europe, and Asia. Carlyle hasn’t named a successor, but the effective date will be September 30, 2008.
Gerstner joined Carlyle as Chairman in 2003, after he had served as Chairman of IBM (NYSE: IBM) from 1993 to 2002. Normally we would not cover issues such as this, particularly as Carlyle is private. But Gerstner has long been considered as one of the workhorses and more commonly recognized individuals in corporate American leadership roles from the 1990’s into this decade.
Jon C. Ogg
August 19, 2008
Motorola’s (MOT) share of the US cellphone market is falling fast. The NPD Group said overall sales of handsets from all manufacturers dropped 13% to 28 million in the second quarter.
According to the AP, "Motorola Inc.’s phones were the most popular, but its share of the units sold dropped to 21 percent, from 32 percent last year."
There has been speculation what Motorola’s handset business has an value of zero due to falling revenue and huge losses. The market now has another data point to affirm that.
Douglas A. McIntyre
Just looking at the drop in price for common units of pipeline master limited partnerships could lead one to believe the midstream business is going to hell in a handbasket. DPC Midstream Partners (NYSE:DPM) is down 48% from its 52-week high, Buckeye GP Holdings (NYSE:BGH) is down 44%, Atlas Pipeline Partners (NYSE:APL) is down 32%, and Atlas Pipeline Holdings (NYSE:AHD) is down 30%. Even the two largest companies are lower — Enterprise Products Partners is down 12% and Kinder Morgan (NYSE:KMP) is off 6%.
According to VSInvestor, several stocks are moving this morning on large volume.
Staples (SPLS) is off 9% on poor earnings. These are notes on China Techfaith (CNFT) hitting an all-time low.
Xinhua Finance Media (XFML) opened up sharply. Jos. A Bank Clothiers (JOSB) sold off on no news.
Douglas A. McIntyre
The annual inflation rate in the US will be above 10% by the end of the year. Almost all the signs are pointing that way.
The AP writes "The Labor Department reported that wholesale prices shot up 1.2 percent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 percent gain that economists expected."
What does that mean?
Circuit City Stores, Inc. (NYSE: CC – News) has appointed director James A. Marcum as vice chairman of the company. In this new position, Marcum is expected to play a key role in leading the company’s turnaround. He will work with Philip Schoonover, President, CEO, and Chairman. The good news is that Marcum is deemed a turnaround manager. The bad news is that he is still under Schoonover, whom we named and still have as one of the top CEO’s that need to go.
Target Corp. (NYSE: TGT) has just come out with earnings at $0.82 EPS on $15.47 Billion in revenues versus First Call estimates of $0.76 EPS and $15.46 Billion in revenues. The company’s retail segment revenues gained by 5.7% t $15 Billion.
Amylin (AMLN) CEO Dan Bradbury earned a base salary of almost $560,000 last year according to the company proxy. He will probably do as well in 2008.
During the last twelve months, shares in the company are off 40%.
Yesterday, Federal regulators said they are working on a stronger label for a widely used diabetes drug marketed by Amylin Pharmaceuticals Inc. and Eli Lilly & Co. as deaths continue to be reported despite earlier government warnings.
The stock is likely to stay down for a long time
Douglas A. McIntyre
These are some of the upgrades and downgrades we are seeing from Wall Street this Tuesday morning:
The tug-of-war over oil prices has been going to the bears recently. Even with a storm near the Gulf of Mexico, crude moved down toward $112.
Some experts are taking the long view and for many of them the likelihood that oil will move up is plain and simple.
Dallas Federal Reserve Bank President Richard Fisher says that the case for huge increases in demand is unavoidable.
Home Depot (HD) had a fairly poor quarter, but it was a bit better than expected.
What was more important is that it held to its guidance for the rest of the year, a sign that the data from its retail outlets shows that spending on housing is not getting worse.
That notion is contrary to much of what economists and analysts are predicting about home values and the capitulation of home owners faced with difficult conditions.
The quality of American cars was supposed to be getting better. Perhaps that was an illusion.
Part of the reason that investors thought GM (GM) and Ford (F) could come back was that their vehicles were as well built as their Japanese and European counterparts.
Several of the modest-sized investment houses say they should not have to buy back auction-rate securities which they sold to their customers.
The dog ate their homework.
| Today’s top tickerspy Indexes | |
| Home Furnishing R... | +14.1% |
| Ethanol and Biofu... | +5.1% |
| Electronics Retai... | +2.1% |
| Diabetes Stocks | +2.0% |
| Memory Chip Stock... | +2.0% |
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