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Daily Archives: January 7, 2009
The 52-Week Low Club (LF)(SMA)(CSNT)
Leapfrog (LF) Concerns about holiday toy sales. Down to $3.06 from 52-week high of $10.63.
Symmetry (SMA) Wachovia downgrades orthopedic sector. Falls to $9.67 from 52-week high of $21.99.
Crescent Banking (CSNT) Enters into new "change of control" deal with officers. Sells off to $3.01 from 52-week high of $14.90.
Douglas A. McIntyre
The Next Corporate Crisis: Massive Pension Deficits
We have noted on more than one occasion that pension plans would be trouble in the future. It has been well known that city, county, and state pension plans are facing severe losses and are underfunded. Ditto for the Big 3 in the auto sector, and go ahead and throw in all the parts supplier shops as well. But today we saw a new report showing just how bad the pension plan deficits are in Corporate America.
Akeena Dips on Possible Capital Raise (AKNS)
Akeena Solar, Inc. (NASDAQ: AKNS) is trading lower today after the company filed to sell up to $30 million in a mixed securities shelf offering. No terms were listed, but the company listed that it would be able to sell any combination of common stock, preferred stock, debt securities, warrants, and units.
Progress Energy Raising Cash (PGN)
Progress Energy Inc. (NYSE:PGN) announced yesterday that it would issue 11.5 million new shares of common stock. JP Morgan Securities Inc. and Morgan Stanley & Co. are joint managers and have an over-allotment option on 1.725 million shares.
Congressional Budget Office: Forget Stimulus, 2009 Hole Is Already Stunning
A look at the Congressional Budget Office figures for 2009 and 2010 is enough to drive most strong men to despair.
Right at the start the CBO says that the federal government will run a $1.2 trillion deficit in the next fiscal year, That does not include the cost of the new administration’s stimulus plan, which could push the total of the red ink to $2 trillion. The figures for bailing out Fannie Mae (FNM) and Freddie Mac (FRE) and the cost of the TARP at $750 are included in the numbers..
Based the CBO assumption GDP will fall 2.2% for calendar 2009
Expectations for recession is that it will last until the second half of 2009, making it the longest downturn since WWII.
The agency also forecasts unemployment moving to 9% by 2010. Unemployment compensation is projected to nearly double from $43 billion to $79 billion to cover rising joblessness.
The news sets up a real fight in Congress over what the government can afford.
Russia, Ukraine & E.U… The Politics of Natural Gas
As the dispute drags on between Ukraine and Russian over the price of Russian natural gas, the weather gets colder in Europe and the European Union has demanded an immediate solution to the problem. Good luck with that.
Meredith Whitney Predicts Banks Need More Capital (BAC, C, JPM, WFC)
Oppenheimer’s star banking analyst Meredith Whitney slammed the banking giants yet again this morning. The difference between today’s note and her prior criticisms, is that now she expects that many banks will need to raise additional capital in 2009. She sees additional loss provisions at Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), JPMorgan Chase (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), and at other banks in her universe.
Yep, Meredith Whitney is putting banks back on the stretching rack and into the Iron Maiden.
Collins Stewart Initiates Coverage on Apple (AAPL) with a Buy
Collins Stewart initiates coverage on Apple (Nasdaq: AAPL) with a Buy. Price target $117.
Collins analyst says, "The heavily subsidized smart phones remain the sole bright spot in an otherwise anemic handset market. While iPhone remains the category leader, momentum has waned as telegraphed by the recent production order cuts. Never a player in commercial accounts, Apple seems to be doing everything right in PCs. Their products have the most attractive designs and work almost effortlessly…
Intel Shows Tech & PC Woes Ahead, Again, Again (INTC, CLWR)
Technology is far from a recovery if you trust what the companies are telling you at face value. Just look at Intel Corporation (NASDAQ: INTC) and you will see why. The processor and chip beast just issued more downward numbers this morning and shares are paying the price.
Boutique Warms To Apple & Qualcomm (AAPL, QCOM, NVDA)
Collins Stewart has initiated coverage on several key technology stocks this morning. The boutique firm has come out positive on Apple Inc. (NASDAQ: AAPL) and on Qualcomm (NASDAQ: QCOM), and a little more conservative on shares of NVIDIA (NASDAQ: NVDA). It noted that the "pie ripening towards Apple" and Qualcomm is positioned for long-term growth.
ADP Sees December Job Losses Off The Charts
This is a revised number with new methodology, but ADP’s job loss number predictions for December are off the chart. ADP had previously been under expectations where Wall Street economists saw 500,000 non-farm payroll losses. This new revised target from ADP is now showing that ADP expects to see a contraction in total jobs by a whopping 693,000 in December.
Top 10 Pre-Market Analyst Upgrades (AKS, ARO, NTRS, OCNF, URBN)
There were not as many analyst upgrades today, but here are this Wednesday’s early bird upgrades:
- AK Steel (NYSE: AKS) Raised to Buy at Goldman Sachs.
- Aeropostale (NYSE: ARO) Started as Buy at KeyBanc (late yesterday).
- Northern Trust (NASDAQ: NTRS) Raised to Buy at Goldman Sachs.
- OceanFreight (NASDAQ: OCNF) Raised to Perform at Oppenheimer.
- Urban Outfitters (NASDAQ: URBN) Started as Buy at KeyBanc (late yesterday).
Jon C. Ogg
January 7, 2009
Top Pre-Market Downgrades (AMSF, SQM, TRI, TSCO, WOOF, VOLVY)
There were not as many analysts calls today, and you will see that the upgrades and downgrades from Wall Street analysts are just not as robust as some might have expected. Here are this Wednesday’s early bird downgrades:
- Amerisafe (NASDAQ: AMSF) Cut to Perform at Oppenheimer.
- Sociedad Quimica (NYSE: SQM) Cut to Neutral at JPMorgan.
- Thomson Reuters (NYSE: TRI) Cut To Sector Perform By Scotia
- Tractor Supply (NASDAQ: TSCO) Cut to Neutral at Piper Jaffray.
- VCA Antech (NASDAQ: WOOF) Cut to Market Perform at Morgan Keegan.
- Volvo (NASDAQ: VOLVY) Cut to Sell at UBS.
Jon C. Ogg
January 7, 2009
Aladdin Comes Clean, Addresses Merger Reports (ALDN)
We reported yesterday that Israeli-data and IT security firm Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN) was up sharply higher on reports that its old merger offer "may" be developing again. The company has issued a response, and it seems that there are still more questions and opportunity for skepticism than there are any solid answers.
Crypt Alert: T. Boone Pickens & $100 Oil, Maybe, Again (CLNE)
T. Boone Pickens may still have some relevance in the media and in oil circles. And he may not. The oil magnate made a call late yesterday that oil could be back at $100.00 per barrel by the end of 2010. It seems that all these supply cuts are being noticed by him (and others) and this recent pop from the Middle East tensions gave another chance to kiss the kiss the pig at the town fair.
Satyam Turns Out to be a House of Cards (SAY, INFY, WIT, PIN, EPI, IFN)
If you are one of those who cannot stand Indian IT-outsourcing firms, you probably just got another feather in your cap. India’s Satyam Computer Services Ltd. (NYSE: SAY) is turning out to be a house of cards. Shares closed at $9.35 yesterday after many recent troubles, and that was already down two-thirds from their highs. Things are worse this morning. Much, much worse.
Bank Stocks Could Drop By Half This Year (BAC)(JPM)(WFC)(C)
Yesterday, Bank of America (BAC) said it would miss its 2008 numbers. There has been a good deal of talk that Jamie Dimon will be pulled off his thrown at JPMorgan (JPM) once the integration of Bear Stearns and write-off of consumer and business credit starts to hit its earnings.
No one in the banking industry likes analyst Meredith Whitney. She is actually the most loathed person covering big financial firms. She is pessimistic about the future of banking in America and with each new forecast that gets worse.
China Car Sales: The End Of Hope For US Auto Firms
It is the Year of the Rat in China. Perhaps they could change that to the Year of the Dog so that it would be in keeping with the general mood.
One of the hopes of the US car companies is that China, the world’s second largest auto market after America, would keep up double-digit vehicle sales growth. An economy with 10% GDP increases and a ballooning middle class had to be the salvation of the industry.
Last fall, the numbers started to turn against car sellers. The increase of vehicle purchases year-over-year started to drop.
The Growing Trend Of Profitable Firms Firing People (AA)(IBM)
It would be hard to miss the headline that Alcoa (AA) fired 15,000 people yesterday. The actions of big companies are probably a much better indicator for what is ahead for the economy than forecasts from business professors.
The fascinating and troubling aspect of the Alcoa cuts is that the company made $470 million in the last reported quarter and Wall St. estimates have it making a very modest amount of money this year. Dow Chemical (DOW), which recently let thousands of people go, also is a money maker. One of the most successful corporations in the US, IBM (IBM) is rumored to be a week away from cutting more than 10,000 people. IBM may have as good a balance sheet and earnings stream as any American public company.
Challenger, Gray reports that big companies had 166,348 layoffs in December, up 275% from a year. A look at their reports for the first 11 months of the year shows that many cuts came at firms which were doing well like Hewlett-Packard (HPQ)
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