Daily Archives: October 2, 2008

Companies Hit Hardest By Credit Crisis (AAPL)(SIRI)(CC)(DIS)(WMT)(MCD)

Updated: 31 October 2008

Angrybear_2Not all companies and industries will be hit equally hard by the consumer credit crisis. Operations such as Procter & Gamble (PG), McDonald’s (MCD), and Wal-Mart (WMT) may be safe. They either sell things people can’t do without or offer inexpensive goods and services that consumers can afford during a tough period. McDonald’s reported earnings today and its same-store sales were up in every region.The stock traded up on a day when the overall market was swamped by selling.

If the credit crisis gets substantially worse and only the most stable companies with the highest credit ratings have access to cash, some will not be able to maintain inventory. Other firms will be affected because their target consumers no longer have any discretionary income. The head of AutoNation (AN), the largest car dealer chain in the US, said that even his prime customers cannot get bank loans for new cars in many cases. "The banks are looking for every excuse possible to say no and they are saying no to good customers," Reuters quotes him as saying.

Neither set of companies has a bright future, but the ones who cannot finance their operations and inventories face almost immediate consequences

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Posted on: October 2, 2008 – 8:01 pm in Economy, , , , , , , , , , , , , , , , , , , , , ,

Yahoo Under $16, Breaks Five Year Lows (YHOO)

Yahoo_logoYahoo! Inc. (NASDAQ: YHOO) is probably wishing it could go back in time and take that $30+ buyout from Microsoft.  Shares closed today at $15.58.  That is a 52-week low and a 5-year low. You have to go back to Summer of 2003 to find lower prices.   It has steadily given up ground on the search market and the benefits of the new Google deal remain elusive to most.  Wall Street hasn’t seen what the benefits will be from that yet, and that was mainly a follow-on attempt of Jerry Yang to keep Microsoft away.  This is a very dangerous time for the company.  Sure, the market tanked and tech stocks and media stocks are under pressure.  But pressure will start to mount again if things don’t get better.  And management with its back up against the wall frequently makes decisions are not the best for shareholders.

Stay tuned.

Jon C. Ogg
October 2, 2008

Posted on: October 2, 2008 – 3:36 pm in HI/LOW, Internet, , ,

Freescale Joins Motorola in Purgatory (MOT)

Freescale announced that it is exploring strategic options for its cellular handset business and intends to complete a sale, joint venture agreement or other transaction in the coming months. Former corporate parent Motorola (NYSE: MOT) agreed to provide certain consideration in exchange for Freescale eliminating the remaining minimum purchase commitments. Freescale now expects its cellular handset revenues and total operating earnings to decrease beginning in the fourth quarter.

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Posted on: October 2, 2008 – 3:17 pm in Mergers and Buy Outs, Private Equity, Semiconductor,

The 52-Week Low Club 10/2/2008 (GGP)(MOS)(POT)(WFT)(STLD)(AAPL)(EBAY)(YHOO)

Sad_clownGeneral Growth Properties (GGP) S&P cuts ratings on growth concerns. Falls to $7.25 from 52-week high of $57.84.

Mosaic (MOS) Fiscal quarter earnings miss mark. Drops to $39.50 from 52-week high of $163.25.

Potash Corporation (POT) Fertilizer company hit by downgrade and falling grain prices. Plunges to $93.65 from 52-week high of $241.62.

Coeur d’Alene Mines (CDE) Analyst downgrade. Sells down to $1.11 from 52-week high of $5.18.

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Posted on: October 2, 2008 – 3:00 pm in HI/LOW, , , , , , , ,

Petrobras Analyst Call Adds Fire To Fuel (PBR)

Petrobras_logo_4Petroleo Brasileiro (NYSE: PBR), or Petrobras, is down an astonishing 13% to $37.77 today in mid-day trading.   It has also almost traded an entire day’s volume.  Falling oil prices, economic softness, the migration away from emerging markets and are all acting against it.  But a key downgrade from Citigroup is adding fuel to the fire.  In this case, it added fire to the fuel.

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Posted on: October 2, 2008 – 12:57 pm in Analyst Calls, Emerging Markets, Oil & Gas,

IBM (IBM) Pessimism Overblown

IbmA number of people are trying to convince IBM (IBM) shareholders that the company may miss its quarterly numbers. Not likely.

IBM stock was almost $121 on Friday. It trades at $104 today.

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Posted on: October 2, 2008 – 12:23 pm in Hardware,

Prediction Market Betting on Congress Bailout Passage

Intrade_logoThe government’s bailout package is likely to pass if you believe in the new event-driven alternative futures markets.  The latest active contract on intrade.com, perhaps the most liquid of the "prediction markets," is still indicating a done deal.  These event driven futures work like many with a quote of 50 meaning break even odds, 0 being what it sounds like, and 100 being a prediction of 100% certainty.  For the deal passage to come on or before October 31, 2008, there havebeen 6,102 contracts traded and the last trade seen was 87.0.

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Posted on: October 2, 2008 – 11:30 am in Economy, Exchange News

Monsanto Raises Guidance In Weak Sector (MON)

Monsanto_logoMonsanto Company (NYSE: MON) today raised its 2008 guidance again. This is in response to the clear drop in the agriculture and fertilizer sector weakness.  Roundup, other glyphosate-related herbicides, and its seeds-and-traits performance are all cited as the reasons for its raised guidance.

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Posted on: October 2, 2008 – 10:37 am in Agriculture, Earnings,

Oil Patch Offers No Great Earnings Assurances (NBR, NE, ESV, PDE)

Oil_well_logo_2Oilfield services company Nabors Industrial (NYSE:NBR) revised its guidance downward after the market closed yesterday and its share price is approaching a new 52-week low. And its bringing its competitors down with it. Noble Corporation (NYSE:NE) is off more than 7%, Ensco International (NYSE:ESV) is off more than 5%, and Pride International (NYSE:PDE) is off nearly 7% in early trading today. Both Pride and Noble have touched new 52-week lows.

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Posted on: October 2, 2008 – 10:14 am in Earnings, Earnings Warning, Oil & Gas, , , ,

NCC (NCC) Triples In Two Days

R218533_855025In a sign of how perverse and debased the market’s reactions to simple news has become, NCC (NCC), the large regional bank, dropped from over $4 last Friday to $1.36 on Monday. Today, the shares change hands at $3.50.

There has been no news about the financial firm to account for either its fall or resurrection. Rumors about credit and bank runs took NCC down despite comments from several brainy analysts including Oppenheimer & Co.’s Terry McEvoy. He upped his rating to "outperform" when trading opened at the beginning of the week.

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Posted on: October 2, 2008 – 9:08 am in Uncategorized, ,

Mosaic Proves Potash & Fertilizer Are Back To Poop (MOS, POT, IPI)

Mosaic_logoMosaic Co. (NYSE: MOS) is being slaughtered this morning. Any hopes that agriculture was going to be cool again are gone. The phosphate and potash producer’s earnings missed the bar by what might as well be a long shot.  Earnings were $2.65 per share on $4.32 billion in revenue.  Analysts expected earnings of $2.94 on $4.11 billion in revenue, according to First Call.  While these numbers are up massively from last year, it isn’t indicative of the wild growth of earlier that investors.

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Posted on: October 2, 2008 – 8:56 am in Agriculture, Earnings, Earnings Warning, , ,

GE’s Massive Offering (GE)

General Electric Co. (NYSE: GE) has priced its massive secondary offering this morning of 547.8 million shares at a substantial discount of $22.25 per share. It has also given underwriters an overallotment option to buy 82.2 million shares.

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Posted on: October 2, 2008 – 8:41 am in Conglomerates, Secondary Offering,

Suspending Mark-to-Market Won’t Suspend Reality

By John Tamny, RealClearMarkets

The University of Texas is famous for having the second largest university endowment in the country, behind that of Harvard. Less known is that UT’s second-place ranking is an accounting abstraction.

In truth, for years the overseers of the endowment marked each barrel of oil on the endowment’s books at a value of $2.50/bbl. despite economic realities revealing something very different. So while adherence to accounting rules gave UT the nation’s "second" largest university endowment, no one in the know actually took the ranking seriously.

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Posted on: October 2, 2008 – 8:37 am in Uncategorized

Atmel Merger Odd, But Proves Mergers Still Possible (ATML, MCHP, ONNN)

Atmel_logoAtmel Corporation (NASDAQ: ATML) is going to be trading up big this morning.  Shares are currently halted on the news that Microchip Technology Incorporated (NASDAQ: MCHP) and ON Semiconductor Corporation (NASDAQ: ONNN) have sent a proposal to Atmel to acquire the company for $5.00 per share in cash.

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Posted on: October 2, 2008 – 8:27 am in Mergers and Buy Outs, Semiconductor, , ,

Jobless Data Reminiscent of Bread Lines

Labor_department_logoMaybe the Hurricane damage has something to do with this, but the weekly jobless claims are reaching a critical point.  This last week’s initial jobless claims rose again to 497,000.  The Labor Department put an estimate that 45,000 of these were related to Hurricane Ike.  The prior week’s report was also revised higher from 493,000 to 496,000.  This report is the highest reading since the last week in September of 2001. 

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Posted on: October 2, 2008 – 7:52 am in Economy

Solar Ambitions Keep Growing (ENER, STP, CSIQ)

Solar_panel_picIf one sector always keeps having new projects and new expansions, it is solar and alternative energy.  There were several announcements this morning from some key solar players such as Energy Conversion Devices (NASDAQ: ENER), Suntech Power Holdings (NYSE: STP), and Canadian Solar Inc. (NASDAQ: CSIQ).

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Posted on: October 2, 2008 – 7:35 am in Alternative Energy, , ,

Top Pre-Market Analyst Upgrades (AMGN, CPLP, DRIV, DSX, DNA, GNK, MAKO)

These are some of the top upgrades we are seeing from Wall Street analysts this morning:

  • Amgen (AMGN) Raised to Outperform at William Blair.
  • Capital Product Partners (CPLP) Started as Outperform at Oppenheimer.
  • Digital River (DRIV) Raised to Neutral at Goldman Sachs.
  • Diana Shipping (DSX) Started as Outperform at Oppenheimer.
  • Genentech (DNA) Raised to Outperform at William Blair.
  • Genco Ship & Trading (GNK) Started as Outperform at Oppenheimer.
  • Mako Surgical (MAKO) Started as Buy at Piper Jaffray.

Jon C. Ogg
October 2, 2008

Posted on: October 2, 2008 – 7:16 am in Analyst Calls, , , , , , ,

Top Pre-Market Analyst Downgrades (AKAM, CVLT, JNPR, LVS, MUR, N, PDX)

These are some of the early analyst downgrades we have seen this Thursday morning:

  • Akamai Tech (AKAM) Cut to Sell at Goldman Sachs.
  • CommVault Systems (CVLT) Cut to Neutral at Goldman Sachs.
  • Juniper Networks (JNPR) Cut to Market Perform at Morgan Keegan.
  • Las Vegas Sands (LVS) Cut to Equal Weight at Morgan Stanley.
  • Murphy Oil (MUR) Cut to Underperform at Merrill Lynch.
  • NetSuite (N) Cut to Sell at Goldman Sachs.
  • Pediatrix Medical (PDX) Cut to Market Perform at Morgan Keegan; Cut to Underweight at Morgan Stanley.

Jon C. Ogg
October 2, 2008

Posted on: October 2, 2008 – 6:38 am in Analyst Calls, , , , , , ,

Nokia (NOK) Goes After Apple (AAPL): A Gun To A Knife Fight

Applelogo1Nokia (NOK) has been very slow moving into the market for high-end smartphones, especially in the US. There are plenty of Apple (AAPL) iPhones and RIM (RIMM) Blackberries on the shelves. Samsung has even come to market with its cool new Instinct handset, the new flagship of the Sprint (S) wireless portfolio.

But, Nokia has 40% of the world’s cellphone market. It can afford to be slow. It carries big wood.

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Posted on: October 2, 2008 – 5:15 am in Wireless, , , ,

Wal-Mart (WMT): Coal In The Retail Industry’s Stocking

Wmt"Everyday low prices" are getting out of hand. Wal-Mart (WMT) already is cutting what it charges for toys and the holiday season has really not begun.

According to The Wall Street Journal, the world’s largest retailer "said it will cut prices on some of the most popular toys and speed up the opening of Christmas shops in its stores nationwide as it tries to lure budget-conscious shoppers and jump start its biggest selling season."

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Posted on: October 2, 2008 – 5:03 am in Retail, , ,