Daily Archives: August 21, 2008

Gap (GPS) Still Drowning

Angrybear_3Gap’s (GPS) earnings got a bit better, but the company is still coming apart at the seams.

In the latest quarter, Gap revenue fell from $3.69 billion to $3.5 billion. Comparable store sales were off 10%.  The company’s online sales for the second quarter increased 11% to $191 million, compared with $172 million for the second quarter of last year.

Gap’s Old Navy brand is badly broken. Comparable store sales for that division were down 16%. Revenue for Old Navy fell from $1.5 billion to $1.3 billion. The operation still has over 1,000 stores and its is difficult to see how Gap can ever make money on them.

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Posted on: August 21, 2008 – 3:43 pm in Retail,

Zumiez, Same Store Sales Down Now & Ahead (ZUMZ)

ZumiezZumiez Inc. (NASDAQ: ZUMZ) was halted pending news into earnings.  The snowboarding (as well as skateboarding, BMX, and action sports) apparel and outdoor wear retail and apparel company posted $0.09 EPS on $92.3 million in revenues, compared to $0.07 EPS and $92.64 million revenues. 

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Posted on: August 21, 2008 – 3:15 pm in Apparel, Earnings, Entertainment,

The 52-Week Low Club 8/21/2008 (PLD)(CTIC)(TELK)(SPC)

Sad_clownSpectrum Brands (SPC) No big news. Still falling after posting loss. Down to $1.67 from 52-week high of $6.20.

Prologis (PLD) Company recently increased presence in Mexico, but no other news. Drifts off to $42.50 from 52-week high of $73.35.

Cell Therapeutics (CTIC) Moving down several days after poor quarter. Hits bottom at $.25 off from 52-week high of $4.

Telik (TELK) No news, just dead air. Sells off to $.64 from 52-week high of $4.96.

Douglas A. McIntyre

Posted on: August 21, 2008 – 2:51 pm in HI/LOW, , , ,

No Hostile Takeover Of Lehman (LEH)

Lehman_brothersSpeculation has begun that the shares in Lehman (LEH) are so cheap that the brokerage might become the target of a hostile takeover. Not likely.

Dick Bove of Ladenburg Thalmann has begun a "rumor" that Lehman could be bought by a party with enough capital to hold on to the firm’s distressed assets until they recover.

According to MarketWatch, "Bove said a deep pocket buyer could wait until assets mature before they sell them, and could hence sell Lehman’s investment management unit Neuberger Berman for more than the value of the whole company and then basically own Lehman Brothers for nothing."

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Posted on: August 21, 2008 – 1:57 pm in Brokerage Firms,

Motorola’s (MOT) 24/7 Wall St. Worst Case Scenario Business Plan: Close The Handset Unit, License The Brand

MotMotorola’s (MOT) plan to spin-off its handset unit was set back further by the news that its domestic market share fell to 21% in the second quarter compared to 32% for the same period last year. The company’s sales in the US have been the one bright spot for its imploding cell phone operation.

In the June reporting period, Motorola’s handset revenue fell 22% to $3.33 billion. The unit’s operating loss hit $346 million compared to a deficit of $332 million last year. MOT shipped 28.1 million portable phones during the three months down from 35.5 million in the same quarter last year.

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Posted on: August 21, 2008 – 12:40 pm in Research, , , ,

Morgan Stanley Launching ‘Frontier’ Emerging Market Fund (MS, FFD)

Morgan_stanley_logo_2It looks like we are about to get a new frontier markets investment vehicle for investors to invest in "emerging-emerging markets" or "pre-emerging markets" depending on which you prefer for a reference.  The Morgan Stanley Frontier Emerging Markets Fund, Inc. has been filed and will trade under the ticker "FFD" on the New York Stock Exchange.  This is a closed-end fund rather than an ETF, so it can have wild swings based upon the premium or discount it trades at compared to its net asset values.

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Posted on: August 21, 2008 – 11:17 am in ETF, Emerging Markets, Mutual Funds, ,

Coal Stocks Above 2007, But Valuation Risks Remain (ACI, BTU, CNX, FCL, MEE, KOL)

Coal_image_2In the past 52-weeks, the stock price of five large coal companies has risen anywhere from 50% to nearly 250%. But that’s still between 27% and 42% below annual highs that the companies reached in June. Peabody Energy (NYSE:BTU) has fallen 27% from its 52-week high, Arch Coal (NYSE:ACI) and Massey Energy (NYSE:MEE) have both dropped 32%, Foundation Coal (NYSE:FCL) has dropped 34%, and CONSOL Energy has lost 42%. In late June, Massey was up nearly 400% and CONSOL was up more than 200%.  These numbers may be slightly different based upon UBS’s upgrade to coal stocks this morning, but you will see the general idea below.

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Posted on: August 21, 2008 – 10:36 am in Commodities, ETF, Utilities, , , , , ,

24/7 Wall St. Day-Trading Alert (FNM)(FRE)(UAUA)

FanniemaeVSInvestor has several volume and price alerts for early today.

Fannie Mae (FNM) and Freddie Mac (FRE) are off again on higher-than-normal volume.

Several airline stocks, with United (UAUA) out in front, are selling off.  Coal stocks are moving up.

And, Thermage (THRM) is having a strong pick-up in volume.

Posted on: August 21, 2008 – 9:04 am in Research, , , ,

Solutia’s Second Secondary Comes At Deep Discount (SOA)

Solutia_logoWe have seen a secondary offering now priced out of Solutia Inc. (NYSE: SOA).  The company sold 10,714,284 shares of common stock at a price of $14.00 per share to raise some $150 million in gross proceeds and $145 million in net proceeds.

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Posted on: August 21, 2008 – 8:21 am in Secondary Offering,

Jobless Figures For Dummies: Three Million More Unemployed

UnemplyThe latest jobless numbers are as complex as Einstein’s Theory of Relativity.

Leaving aside the fact that the govenment appears unable to turn out economic figures which are of any use to the press or the public, none of today’s employment data are good.

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Posted on: August 21, 2008 – 8:05 am in Economy

IAC/Interactive’s Do or Die Date Has Come (IACI, IACID, HSNI, IILG, TKTM, TREE)

Iaci_logoToday marks the break-up for IAC/Interactive, which trades asunder the IACI and IACID tickers after the August 11, 2008 record date.  IAC/Interactive is going to begin trading on a post-split basis to reflect the break-up today.  The company’s spin-off symbols are as follows:

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Posted on: August 21, 2008 – 7:31 am in Internet, Management Change, Shareholder Issues, Stock Splits, Turnarounds, , , , , ,

24/7 Wall St. Most Overpaid CEO Of The Day: JDS Uniphase (JDSU) CEO Kevin Kennedy

Angrybear_2JDS Uniphase (JDSU) announced it business fell to pieces in the last quarter. On a non-GAAP basis, the company said it would have earned $15.5 million, or 7 cents per share. Revenue grew to $390.3 million from $350.7 million last year. Analysts were expecting earnings of 10 cents a share on revenue of $395.8 million, according to consensus estimates from Thomson Reuters, writes MarketWatch.

The market was upset and pushed the shares down 11% in the pre-market, falling to $10.50, about $1 from its 52-week low. Over the last two years, JDSU is down about 50%.

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Posted on: August 21, 2008 – 7:13 am in Management Change,

Top Pre-Market Analyst Upgrades (AAUK, ACI, BBT, CETV, FCL, JKHY, MEE, WCG)

These are some of the top upgrades or positive calls we are seeing from analysts this Thursday morning:

  • Anglo American (AAUK) Raised to Strong Buy at S&P (late Weds. call).
  • Arch Coal (ACI) Raised to Buy at UBS.
  • BB&T Corp. (BBT) Raised to Buy at S&P.
  • Central European Media (CETV) Raised to Buy at Citigroup.
  • Foundation Coal (FCL) Raised to Buy at UBS.
  • Jack Henry (JKHY) Cut to Hold at Needham; Cut to Neutral at D.A. Davidson.
  • Massee Energy (MEE) Raised to Buy at UBS.
  • WellCare Group (WCG) Started as Buy at B of A.

Jon C. Ogg
August 21, 2008

Posted on: August 21, 2008 – 6:36 am in Analyst Calls, , , , , , , ,

Top Pre-Market Analyst Downgrades (AER, AGP, LEH, NVO, CRM, SNPS)

These are some of the downgrades or cautious analyst calls we are seeing this Thursday morning:

  • AerCap (AER) Cut to Hold at Citigroup.
  • Amerigroup (AGP) Started as Neutral at B of A.
  • Lehman (LEH) estimates cut at Citigroup.
  • Novo Nordisk (NVO) Started as Neutral at UBS.
  • Salesforce.com (CRM) Cut to Neutral at Piper Jaffray.
  • Synopsys (SNPS) Cut to Sell at Citigroup.

Jon C. Ogg
August 21, 2008

Posted on: August 21, 2008 – 6:29 am in Analyst Calls, , , , , ,

Airline Roulette: Industry Leader Sees More Failures (AMR)(DAL)

AngrybearThe head of the International Air Transport Association thinks that the plight of the airline industry will get worse before its gets better. He believes that losses among carriers could hit over $6 billion this year.

Oil prices have not come down enough to make fuel "affordable" to the point of curbing losses. Passenger traffic is falling even in formerly strong markets like Asia.

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Posted on: August 21, 2008 – 5:44 am in Airlines, ,

Net Neutrality And The Myth Of Fairness (CMCSA)

PcThe FCC did not like it when Comcast (CMCSA) started to shut off customers running video file-sharing services. Comcast said the programs use too much bandwidth. The agency said that people who pay for broadband should get it.

It is easy for the FCC to take its position. It does not have to pay billions of dollars to upgrade the infrastructure at Comcast or any of the other large cable companies.

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Posted on: August 21, 2008 – 5:12 am in Cable Companies,

Boeing (BA) And Its Unions Go To Hell Together

95129cBoeing (BA) has delayed the launch of its Dreamliner three times. Supply chain trouble and manufacturing flaws have damaged the company’s reputation with its customers and opened a door for more competition from Airbus. The set-backs have been so substantial that some Boeing customers want compensation for the late deliveries.

None of this has done any good for Boeing shareholders. Despite the fact that the company has a huge backlog of orders, its share price is $63, near a 52-week low and down from the period high of $107.15.

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Posted on: August 21, 2008 – 4:57 am in Aerospace,

Microsoft (MSFT) Attacks Its Self-Loathing By Turning To Seinfeld

MsftJerry Seinfeld can be a vicious and cruel comedian. Microsoft (MSFT) has changed that by putting $10 million in his pocket.

The people from Redmond have finally acknowledged that a huge portion of the PC using population hates Windows, especially the new Vista version. It is complex and heavy with bugs. Very few people can figure out how to tap many of its features.

The troubles with Windows have opened a door for Apple (AAPL) to promote its Mac OS which is supposedly user-friendly and safe for both children and pets.

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Posted on: August 21, 2008 – 4:42 am in Software, ,

Citigroup (C) Downgrades Everyone But Itself (LEH)(MS)(GS)

Citi_logoThe rule on Wall St. is that securities analysts don’t rate their own firms. Now that brokerage research departments are no longer slaves to investment banking, the independence of analysts is supposed to be a given. They still do not put "sell" ratings on many stocks, even in a bear market. Perhaps they lack the courage of their convictions because a bad grade may deny them access to the companies they cover.

Citigroup downgraded Lehman (LEH), Morgan Stanley (MS), and Goldman Sachs (GS) saying future write-downs and slow investment banking would hit earnings.

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Posted on: August 21, 2008 – 4:25 am in Brokerage Firms, , , ,

Media Digest 8/21/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

NewspaperAccording to Reuters, Nissan says it will start exporting cars from it China joint venture.

Reuters reports that Micorosft (MSFT) will enlist Seinfeld for its new ad campaign.

Reuters reports that the NY Attorney General will step up his auction-rate probe.

Reuters writes that Fannie Mae (FNM) and Freddie Mac (FRE) fell on concerns of a bail-out.

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Posted on: August 21, 2008 – 2:48 am in Press Digest, , , , , , , , , ,