Daily Archives: November 19, 2008

Market Assuming Citigroup (C) Will Go The Way Of AIG (AIG) Or Wachovia (WB)

Data_3The market is treating Citigroup (C) as if it knows something about the bank’s near-term fortunes and that something is not good. Shares in the bank have been off 21% to $6.60. What is remarkable is that the stock traded over $10 just four days ago.

Citi’s announcement that it would acquire the remaining assets of the SIVs it manages at current fair value should not have caused the drop. If the contents of these were remarkably toxic, Citi would have disclosed that.

The firm’s decision to fire 53,000 more people is unfortunate, but it would usually be a modestly positive piece of news.

Read More »

Posted on: November 19, 2008 – 3:43 pm in Banking, , , ,

FOMC Minutes: Recession & Depression Simultaneously

Burningmoney_3The FOMC Minutes from the late October 2008 meeting are out, and as you can imagine it is far more somber than any minutes in recent years.  The worse thing is that the projections look pretty bad, and we do not even think they are being objective enough.  If you don’t think this is a recession or a depression just read through the full minutes.  You will see a recession and you might get depressed…..

Read More »

Posted on: November 19, 2008 – 2:30 pm in Economy

Microsoft Kills Yahoo! Hopes (MSFT, YHOO)

Yahoo_logo_2Microsoft_logoSteve Ballmer is presenting data today at the Microsoft (NASDAQ: MSFT) annual shareholder meeting.  Ballmer has said that he essentially wants no part of a Yahoo! (NASDAQ: YHOO) merger.  It said that those acquisition talks with Yahoo! have finished and that Microsoft has moved on.  We have also gotten some other data out of the Microsoft shareholder meeting which tied in directly to this current situation that was offered up before any of the Yahoo! comments came across the tape.

Read More »

Posted on: November 19, 2008 – 12:20 pm in Internet, Mergers and Buy Outs, ,

Taking TheStreet.com Private (TSCM)

Cammonopoly_wideweb__430x3250TheStreet.com’s (TSCM) share price is down far enough that the company’s management must be giving some consideration to taking Cramer & Co. private. At $3 a share, the stock is down from a 52-week high of $16.74.

TSCM has a market cap of $92 million. The latest 10-Q shows $78 million in cash and marketable securities and taking out depreciation and amortization the company broke even last quarter. However, operating expenses were up 40% from the same quarter a year ago. That can probably be fixed.

Read More »

Posted on: November 19, 2008 – 12:19 pm in Private Equity,

Insiders Still Face Margin Calls (ALD, EXR, PDFS, TLB, TXCO)

Burningmoney_2Margin calls from corporate insiders to pay personal obligations are still coming, although last week’s pace into this week does not look as severe as in prior periods we have covered.  We have seen such filings from Allied Capital Corp. (NYSE: ALD), Extra Space Storage Inc. (NYSE: EXR), PDF Solutions Inc.’s (NASDAQ: PDFS), Talbots Inc. (NYSE: TLB), and TXCO Resources Inc. (NASDAQ: TXCO).  These are likely only some of the insider sales that have gone throughas a result of the margin calls.  As you can imagine, these rarelyoccur because things are going so well.

Read More »

Posted on: November 19, 2008 – 12:02 pm in Insider Activity, , , , ,

Grand Canyon IPO Still Coming, Lower and Lower (LOPE)

Grand Canyon Education is apparently still coming public.  But what is interesting is that the company has had to lower its price twice to get the deal done.  The company has cut its initial public offering price for a second time and the company plans to sell 10.5 million shares of common stock in a price range of $12.00 to $14.00.

Read More »

Posted on: November 19, 2008 – 11:26 am in IPOs,

Should You Chase BJ’s? (BJ, COST, WMT)

Bjs_logoBJ’s Wholesale Club Inc. (NYSE: BJ) appears to be one of the few standouts in retail right now.  How many companies are in retail are beating already-raised guidance and still raising forecasts ahead?  The big box retailer posted earnings gains of about 24% with $0.48 EPS, and that is after a $0.01 Charge.  The company had previously offered guidance of $0.45 to $0.49, and that was raised to $0.36 to $0.40 earlier on.  If you look through the numbers in this economic climate, you might think that BJ’s would be good for traders and investors.

Read More »

Posted on: November 19, 2008 – 10:11 am in Earnings, Retail, , ,

GM (GM) Hits 52-Week Low: Ford (F) Heads Toward Penny Stock Land

Batmobile512_2If stock market sentiment is any indication of whether The Big Three will get federal bailout loans before they run into solvency problems, then the world looks terribly grim.

GM (GM) made a new 52-week low at $2.60, down 13% for the day, compared with its period price of $43 in October 2007.

Ford (F) is trading off to its 52-week low at $1.47, down 11%, compared to a high of over $9 last October. Odds are fairly reasonable that Ford will trade below $1 before the end of the year.

At this point, there is no chance that the current Congress will get this done before leaving DC.

Douglas A. McIntyre

Posted on: November 19, 2008 – 10:02 am in Autos,

Enterprise Products Gets More Credit (EPD)

Money_stack_pic_2Enterprise Products Partners LP (NYSE:EPD), a pipeline master limited partnership, increased its credit facilities by $593 million yesterday. The company obtained a $375 million senior revolving credit facility and a $218 billion senior term loan to add to its nearly $1.8 billion in senior unsecured revolving credit facilities.

Read More »

Posted on: November 19, 2008 – 9:38 am in Oil & Gas,

Another Rough Day For Citigroup (C): It Buys Out Its SIVs

Data_2Citigroup (C) is off almost 4% at the open after news that it has committed to acquire the remaining assets of the Citi-advised SIVs at their current fair value.

That value is estimated to be approximately $17.4 billion, net of cash, as compared with $21.5 billion at September 30, 2008. The decline primarily reflects asset sales and maturities of $3.0 billion and a decline in market value of $1.1 billion since the end of the third quarter 2008.

The SIVs have been selling assets as part of an asset-reduction plan to fund maturing debt obligations, and have reduced long-term assets from $87 billion at the end of July 2007 to $17 billion currently.

With its shares down to $8.08, Wall St. seems unhappy.

Douglas A. McIntyre

Posted on: November 19, 2008 – 9:35 am in Banking,

Collapsing Auto Sales Hit Mining (SWC)

Hummer_crashIf Detroit doesn’t build cars, then there is little market for catalytic converters. And if there is a falling market for those pollution-control devices, there is a falling market for the  platinum and palladium that go into the converters.  That domino theory struck Stillwater Mining (NYSE:SWC) yesterday and it looks like it is about to strike it even harder today.

Read More »

Posted on: November 19, 2008 – 9:34 am in Uncategorized,

Sun Shines on LDK Solar (LDK, WFR, ENER)

Solar_panel_picBefore the market opened this morning, LDK Solar (NYSE:LDK) reported third quarter earnings. The company earned $88.4 million (diluted EPS of $0.77) on revenues of $541.8 million. Analysts were expecting EPS of $0.71 on revenues $486.7 million. LDK’s revenues topped even the highest estimate.

Read More »

Posted on: November 19, 2008 – 9:30 am in Alternative Energy, Earnings, , ,

Goldman Sachs Changes To Conviction List (RIMM, CSCO, RVBD)

Goldman_sachs_logoThis morning, Goldman Sachs has made two key technology changes to its Conviction Buy List.  Research-in-Motion (NASDAQ: RIMM) was added to the praised list, and its price target is $68.00.  Cisco Systems (NASDAQ: CSCO) was removed from the Conviction Buy List.  RIMM is up over 1% pre-market, while Cisco is down over 1% before the open. 

Riverbed Tech (NASDAQ: RVBD) removed from the Conviction Sell List, yet there is no reaction in RVBD shares.

Jon C. Ogg
November 19, 2008

Posted on: November 19, 2008 – 9:26 am in Analyst Calls, Technology Companies, , ,

Against All Odds, E*TRADE Keeps Growing (ETFC)

Etrade_logoE*TRADE FINANCIAL Corporation (NASDAQ: ETFC) has been hit much harder than other financial institutions and the last two weeks have been rather challenging  for the company and its shareholders.  This morning we are seeing some stabilizing data.  The company’s gross new retail accounts opened in October were 131,475 with net new retail accounts of 63,538.

Read More »

Posted on: November 19, 2008 – 8:55 am in Brokerage Firms, Internet,

Consumer Prices Tank, Almost As Fast As Homes

Burning_house_picBurningmoneyThis morning we got mixed news on the economy.  The good news is that the prices you are paying for goods is not as bad as in prior months when energy was through the roof.  The bad news is that housing is as far from recovery as it can be.

Read More »

Posted on: November 19, 2008 – 8:38 am in Economy, Housing

NVIDIA/Cray Supercomputing For You… Right As Hard Times Kick Off (NVDA, CRAY)

Cray_supercomputer_picNvidia_logoNVIDIA Corporation (NASDAQ: NVDA) and Cray Inc. (NASDAQ: CRAY) have announced the availability of NVIDIA Tesla C1060 GPU Computing processors in the new Cray CX1 line of supercomputers.  The companies call this as with "ease-of-everything" features and the ability to fit into a standard office setting.

Read More »

Posted on: November 19, 2008 – 7:43 am in PC Companies, Semiconductor, Technology Companies, ,

Top 10 Early Bird Analyst Upgrades & Downgrades (COGT, PSUN, RMD, NCTY, SAFM, UTHR, ARB, CS, CTRP, SUN)

Money_stack_picThese are ten of the early bird analyst upgrades and downgrades we are seeing from Wall Street this Wednesday morning:

  • Cogent Inc. (COGT) Raised to Overweight at JPMorgan.
  • Pacific Sunwear (PSUN) Raised to Neutral from Sell at UBS.
  • ResMed (RMD) Started as Buy at Jefferies.
  • The9 Ltd. (NCTY) Raised to Hold from Sell at Citigroup.
  • Sanderson Farms (SAFM) Raised to neutral from Underweight at JPMorgan.
  • United Therapeutics (UTHR) Raised to Neutral from Sell at Piper Jaffray.
  • Arbitron (ARB) Cut to Neutral at JPMorgan.
  • Credit Suisse (CS) Cut to Sell from Neutral at UBS.
  • CTrip.com (CTRP) Cut to Sell from Buy at Citigroup; price target cut to $30.40 at Credit Suisse.
  • Sunoco (SUN) Cut to Sell from Hold at Deutsche Bank.

Jon C. Ogg
November 19, 2008

Posted on: November 19, 2008 – 7:11 am in Analyst Calls, , , , , , , , , ,

Boeing (BA) Management Get Worse By The Day

R218533_855025Maybe Boeing (BA) should just stop selling airplanes and leave the market to Airbus. At least once a month, the US company says it will have to delay deliveries to customers. Not only does this hurt earnings, it also gives unhappy clients a chance to ask for compensation.

Read More »

Posted on: November 19, 2008 – 6:21 am in Aerospace,

Car Company Bailouts Move To China, Japan And Europe Next

Batmobile512A car industry bailout may save GM (GM), Ford (F), and Chrysler for a few months, but it is likely to set a painful precedent for governments in Asia and Europe.

If troubled American auto companies can get cheap and ready loans, why shouldn’t their peers in China, Japan, Russia, and Europe? Which country can afford to lose its automakers?

Read More »

Posted on: November 19, 2008 – 6:09 am in Autos, , ,

New Yahoo! (YHOO) CEO: Take This Job So We Can Fire You

Yahoo_logoWith Jerry Yang out as Yahoo! (YHOO) CEO, what most of the board and many large shareholders want is for the portal company to be sold to Microsoft (MSFT). It may be at half the price of Redmond’s first offer, but that is an indication of how awful Yahoo!’s prospects are.

Yahoo! is busy trying to find a new CEO who will probably be fired within a month or two of taking the position.

Read More »

Posted on: November 19, 2008 – 5:50 am in Management Change, , ,