07 – October – 2008 – 24/7 Wall St.

Daily Archives: October 7, 2008

Growing List of Damaged Post-IPO’s (SB, NM, RSOL, RAX, IPI, WES, PSE)

We would be reporting the economic numbers from the government’s Department of Redundancy Department if we said it is an ugly bear market and if we told you that the IPO market was all but dead. But what is amazing here is the absolute poor performance we have seen out of the 2008 post-IPO companies. Many of these companies are still doing well, and some are not. But in our screen of the big IPO’s there is an astonishing number of post-IPO’s that are trading much worse than just busted IPO’s by being under the IPO price.

Our list of 2008 IPO’s here was 30% and a somewhat active stock volume. Below is the list of post-IPO’s we track with shares down more than 30% from the IPO price:

Posted on: October 7, 2008 – 4:17 pm in Uncategorized, IPI, NM, PSE, RAX, RSOL, SB, WES

Northern Technologies Raising Cash (NTIC)

Northern Technologies International Corp. (NASDAQ: NTIC) has filed a shelf offering to sell stock, warrants, and units in an amount of up to $50 million. The company has said it will sell the units directly to investors or via placement agents.

Posted on: October 7, 2008 – 3:49 pm in Secondary Offering, NTIC

Alcoa Earnings, A Sideshow Compared To Forward Expectations (AA)

If you care about earnings in the commodity and metals sector, Alcoa Inc. (NYSE: AA) has just missed its earnings and given cautious guidance. It posted earnings of $0.33 per share on $7.2 billion in revenue. First Call had earnings estimates of $0.54 and $7.23 billion in revenue. That $0.33 includes about $0.04 from a smelter shut down and $0.06 negative impact from currency. The earnings may only be the start of the problem.

Posted on: October 7, 2008 – 3:33 pm in Earnings, Metals, AA

The 52-Week Low Club (TSL)(RBS)(GGP)(SANM)

General Growth Properties (CGP) Trouble re-financing. Down to $3,51 from 52-week $57.84,

Trina Solar (TSL) Solar stocks downgraded on oversupply. Falls to $12.43 from 52-week high of $68.25.

Royal Bk Scotland Group (RBS) Worries about capital adequacy of UK banks. Down to $1.41 from 52-week high of $11.22.

Sanmina (SANM) Downgraded by Credit Suisse. Falls to $.93 from 52-week high of $2.66.

Douglas A. McIntyre

Posted on: October 7, 2008 – 2:58 pm in HI/LOW, GGP, RBS, SANM, TSL

Consumer Credit Evaporates

If our calendar and math are correct, the data from the Fed just released on consumer credit in August shows that the rate of borrowing has come down to levels not seen in 10 years. Consumer credit fell by some $7.9 billion down to $2.577 trillion. That was following a $5.2 billion rise in July. Economists were looking for an increase of $5 billion or more for the month of August. As a reminder, consumer credit data excludes home mortgages and other real estate-secured loans.

Posted on: October 7, 2008 – 2:11 pm in Economy

Strategic Hotels & Resorts: Bill Gates Vs. Goldman Sachs (BEE)

Following billionaires, activist investors, and even opportunists has been a difficult job in recent weeks. Activists can blame poor management decisions, but they cannot blame management over stock prices in a bear market. This creates an interesting situation with Strategic Hotels & Resorts, Inc. (NYSE: BEE) as we have Bill Gates opposing Goldman Sachs.

Posted on: October 7, 2008 – 1:11 pm in Activist Investor, Insider Activity, REIT, BEE

Bernanke Leaning Toward Rate Cuts & More Actions

If you were looking for a strong tone from Ben Bernanke, he may have given you what you wanted to hear. Today’s speech to the National Association for Business Economics hinted at a very high chance of rate cuts in the near future. He discussed the downside risks to growth have increased while price outlook has improved. Bernanke now expects economic activity to be subdued for the rest of 2008 and into 2009. He also noted that the cost of credit has spiked if it is even available and that there is no liquidity in the credit markets. He also outlined the extraordinary stress on the global markets which are seeking new methods to reduce funding pressures as the need to stabilize the economy is great.

Posted on: October 7, 2008 – 12:26 pm in Economy

Watch Google (GOOG) Go To $250

Google (GOOG) hit another 52-week low today bottoming at $348.23. So far this year, shares in the big search company are off 45%. By contrast, Time Warner (TWX) is down a little more than 30%. So is Yahoo! (YHOO). Google should be doing better than an "old media’ shop that owns AOL and a failing portal run by a disgraced CEO.

Posted on: October 7, 2008 – 11:46 am in Internet, GOOG, TWX, YHOO

Interim Reports Mixed for Oil Companies (APC, MMR, CVX)

Energy companies are focusing on just a couple of things as they head into earnings season. First is debt and financing; second is production, especially for those companies who suffered from Hurricanes Gustav and Ike. Anadarko (NYSE:APC) and McMoRan (NYSE:MMR) have shown key updates and Chevron (NYSE:CVX) is on deck to do so.

Posted on: October 7, 2008 – 9:58 am in Oil & Gas, APC, CVX, MMR

Department Of Energy Predicts Large Increase In Oil Prices

Tx00338coilwellgusherodessatexasp_2 It is hard to believe that crude prices would drop from $147 this summer to under $90.

The Department of Energy believes prices will move back up. The agency now predicts that West Texas Intermediate (WTI) crude oil prices will average about $112 per barrel in both 2008 and 2009.

Unless the global economy is weaker than anticipated, EIA expects that the call on Organization of the Petroleum Exporting Countries’ (OPEC) crude oil will exceed OPEC crude oil production over the next 6 months.

Posted on: October 7, 2008 – 9:51 am in Oil & Gas

The Witch Burning At Yahoo! (YHOO) Turns Ugly

Yahoo! (YHOO) seems to have several options to revive its moribund business, but the market is not buying them based on the portal company’s share price. The stock trades just above $15, not far from its 52-week low.

Investors no longer believe that a partnership based on Google (GOOG) selling search advertising for Yahoo! will make it to the starting line. The US government, the EU, and officials in Canada are all giving the deal a monopoly litmus test. Google has very little incentive to push the deal if it faces legal or political challenges. It was only willing to go forward to kick sand in Microsoft’s (MSFT) face.

Posted on: October 7, 2008 – 9:12 am in Internet, GOOG, MSFT, TWX, YHOO

A Costless Bank-Rescue Proposal

By John Tamny RealClearMarkets

Amid much fanfare, Treasury Secretary Paulson’s $700 billion plan to allegedly save the banking system passed last Friday. The Dow Jones Industrial Average was up 250 points before its presumed passage, but once reality set in about the inability of governments to fix economies, the Dow fell 150 points on Friday, and it fell another 369 points yesterday.

Much as government action didn’t stave off the Great Depression in the ’30s, so will federal efforts today meant to ward off pain merely cheer scared investors in the near term ahead of a massive hangover. Indeed, there’s a pattern developing here: markets rally upon news of more government "help", but with government intrusion into the marketplace nearly batting 1.000 when it comes to the opposite of success, the wiser among investors inevitably pour cold water on that which won’t work.

Corning Outlines Slower Growth Expectations (GLW)

Corning Inc. (NYSE: GLW) is addressing the slowing economies and supplies and how these will impact the company. Vice Chairman and CFO James Flaws is presenting some longer-term projection data at the Maxim Group Growth Conference today in New York City. Third-quarter glass volume shipments for the company’s wholly owned business and Samsung Corning Precision Glass Co., Ltd. grew less than expected at a rate of 2% sequentially, as there was a more pronounced shift in glass demand to Corning’s equity venture. Corning Precision Glass volume was up 12%, but volume at Corning’s wholly owned business was down 10%. Despite lower volume, it is reaffirming its earnings guidance and there is an obvious case of "Good News, Bad News" to consider.

Posted on: October 7, 2008 – 8:25 am in Technology Companies, GLW

More ETF’s Bite The Dust, Including Wal-Mart ETF (SAW, PUF, MYP, WSI, WMT)

Another ETF group with esoteric index funds is closing down and liquidating several ETF programs. FocusShares, LLC has announced that its board and its advisors plan to discontinue and liquidate several exchange-traded funds.

The following ETF’s are being liquidated:

Posted on: October 7, 2008 – 7:56 am in ETF, FocusShares, MYP, PUF, SAW, WMT, WSI

Fed’s Term Auction Facilities Lack Meat For Hungry Market

A procedural announcement from the Federal Reserve is being blamed for the stocks going from positive by about 9 points to being down by 2 points this morning. The market wanted something at least reminiscent of yesterday’s talk of coordinated rate moves or much larger liquidity injections. Unfortunately, all they are getting so far as term auction facilities rather than rate cuts or large infusions that help get bad assets off the books of banks.

Posted on: October 7, 2008 – 7:41 am in Economy

Royale Discovery Lights Up Interest (ROYL)

Royale Energy Inc. (NASDAQ: ROYL) has announced that it discovered natural gas in its Andrus Island East well in the Sacramento Basin of California which was drilled as part of its 2008-A drilling project. While individual finds and individual projects are not major events for larger oil and gas players, this is one very very speculative company with a low market cap and low revenues as you will see below.

Posted on: October 7, 2008 – 7:26 am in Oil & Gas, ROYL

Fixing AMD (AMD) By Breaking it

Hector Ruiz, former CEO and current chairman of AMD (AMD), was undoubtedly the worst big company chief of the last decade. What he could not ruin with his modest intelligence he made up for with his foolhardy strategy for fixing the chip company. He has become such a rare species among American executives that he is likely to be entombed in the Smithsonian so that he can be studied by future generations of corporate managers.

Ruiz managed to take AMD shares from $40 less than three years ago to $4. He did this by taking on $5 billion in debt when he bought graphic chip maker ATI. The acquisition was a bust and AMD took its focus away from competing with larger rival Intel (INTC). It tool all of AMD’s resource to develop better chips and market them in an industry with cut-throat prices and low margins.

Posted on: October 7, 2008 – 6:54 am in Semiconductor, AMD, INTC

Top Pre-Market Analyst Upgrades (FCX, INCY, JEF, LPX, TU, WBS)

Below are some of the top early bird analyst upgrades we have seen early this morning with more than two hours to the open:

Freeport-McMoRan (FCX) Raised to Outperform at FBR.
Incyte (INCY) Started as Buy at Stanford Group.
Jefferies (JEF) Raised to Market Perform at Wachovia.
Louisiana-Pacific (LPX) Raised to Sector Perform at RBC.
TELUS Corp. (TU) Raised to Buy at UBS.
Webster Financial (WBS) Raised to Buy at Sander O’Neill.

Jon C. Ogg
October 7, 2008

Posted on: October 7, 2008 – 6:40 am in Analyst Calls, FCX, INCY, JEF, LPX, TU, WBS

Top Pre-Market Analyst Downgrades (AAV, AMLN, CEPH, TV, VE)

Below are some of the top early bird analyst downgrades we have seen early this morning with more than two hours to the open:

Advantage Energy (AAV) Cut to Sector Perform at CIBC.
Amylin Pharmaceuticals (AMLN) Raised to Hold at Canaccord.
Cephalon (CEPH) Started as Overweight at JPMorgan.
Grupo Televisa (TV) Cut to Neutral at JPMorgan.
Veolia (VE) Cut to Hold at Citigroup.

Jon C. Ogg
October 7, 2008

Posted on: October 7, 2008 – 6:38 am in Analyst Calls, AAV, AMLN, CEPH, TV, VE

Goldman Sachs Cuts Solar Stock Benchmarks (FSLR, SPWRA, CSIQ, LDK))

Two key solar stocks are being hit hard in early indications. First Solar, Inc. (NASDAQ: FSLR) and SunPower Corporation (NASDAQ: SPWRA) have both been downgraded to "Sell" from the prior "Buy" ratings over at Goldman Sachs. The fallout from these calls may create new issues for the sector which has already seen its key components chopped down in the current market.

Posted on: October 7, 2008 – 6:27 am in Alternative Energy, Analyst Calls, CSIQ, FSLR, LDK, SPWRA

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