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On tonight’s MAD MONEY on CNBC, Jim Cramer briefly addressed Apple Inc. (NASDAQ: AAPL). He said he has been against the company because of Steve Jobs’ health concerns. Today’s actions apparently are not even creating a "sell the rumor, and buy the news" trade mentality. That is odd unless you consider the state of the earnings and growth problems all coming front and center over the last 30 to 90 days. Cramer essentislly said, "I repeat, I don’t want you in Apple."
Daily Archives: January 14, 2009
Jim Cramer Stays Against Apple (AAPL)
Motorola Morale, An All-Time Low (MOT)
Motorola Inc. (NYSE: MOT) must be the worst place to work in the entire mobile communications sector. It is one thing that the company is issuing yet another earnings warning . But the layoff announcement is the icing on the cake after rounds and rounds of prior restructuring efforts. This is reminiscent of the old bumper stickers from the 1980’s, although you have to insert the world "Motorola" in place of "Michigan" … "Would the last person to leave Motorola please turn out the lights!"
Tim Cook Fills In For Steve Jobs (AAPL)
Apple Inc. (NASDAQ: AAPL) just delivered some startling news, which is actually not startling if you have been following the stories about the health of CEO Steve Jobs. Because of health issues, Steve Jobs is taking a medical leave.
SIRIUS XM Trades Equity For Debt, A Penny at a Time (SIRI)
SIRUS XM Radio Inc. (NASDAQ: SIRI) issued a statement after the close showing how the company is taking tiny steps to trim its debt balances. Every penny of debt it can shed helps its overall negotiating position with creditors as it seeks to refinance. Unfortunately, this comes with only more dilution to common shareholders.
The 52-Week Low Club (FNB)(HBC)(UNP)(NCS)(FITB)
F N B Corporation (FNB) Predicts big loss. Down to $8.89 from 52-week high of $20.70.
HSBC Hldgs (HBC) Concerns bank will take huge write-down. Drops to $41.04 from 52-week high of $88.15.
Norfolk Southern (NSC) Railroad traffic expected to fall. Market also does not seem to like Fitch rating. Sells down to $39.05 from 52-week high of $75.53.
Union Pacific (UNP) Another railroad stock. Moves off to $40.81 from 52-week high of $85.80.
Fifth Third Bancorp (FITB) Bad day for banks. Falls down to $6.08 from 52-week high of $28.58.
Douglas A. McIntyre
Merging The Mutual Fund Companies: Janus (JNS) And Alliance Bernstein (AB) Will Be Sold
Being in the mutual fund and institutional money management business is almost as bad as being in commercial banking. Several companies in the industry have lost half of their assets between redemptions and the falling value of portfolios which have dropped with the market.
If the market continues to fall some of the public companies in the fund business will begin to lose large amounts of money. Their portfolio management, back office, marketing, trading, and administration costs can only be chopped by so much.
Based on their share prices, two fund companies are doing much worse than their peers. Shares in Alliance Bernstein (AB) and Janus (JNS) are trading off almost 70% over the last year.
A 50 VIX, Again
The CBOE VOLATILITY INDEX, or "the VIX" or the "Fear Index" is still well off of its highs from the end of 2008 when it was trading at astronomical levels in the 60’s and the 70’s. But with the slow bleed in the markets, suddenly the VIX is back above the 50 mark.
Anadarko Wins in Court (APC)
Back in 1998-1999, the Clinton administration wrote contracts for offshore drilling that were supposed to provide royalty relief for oil companies if oil prices fell below $25/barrel. Somehow, the contracts were written without a ceiling price. As a result, royalty relief is available on certain leases no matter how high crude oil prices go.
Dr. Pangloss’s Beige Book Evaluation
The Beige Book is out and the district by district report on business activity is somewhat dismal. The good news is that the pace of bad news is not really out of line with what anyone would have expected. The bad news is that everyone is now just about braced for Armageddon.
Preliminary Bad News From Refinery Sector (MRO, TSO, VLO)
Lower oil prices were supposed to be good for the refiners. Yesterday, Marathon Oil Corporation (NYSE:MRO) released its interim update for the fourth quarter of 2008. Today, Tesoro Corporation (NYSE:TSO) followed suit, releasing preliminary fourth quarter results. The short version is that neither company anticipates matching third quarter results, or for that matter, even coming close. Valero Corporation (NYSE:VLO), another major refiner, has not publishedan interim report, but plans to report third quarter results on January27th.
Will Warner Music Go Hard After Death Row? (WMG)
Being a record label, or now a music label, is not what it once was. Not even close. Just ask Death Row Records and former owner Suge Knight. In an odd twist of fate, Warner Music Group Corp. (NYSE: WMG) may be bidding for assets of Death Row, which is bankruptcy proceedings.
Outlining Flextronics Exposure To Nortel Bankruptcy (FLEX, NT)
We have already highlighted that Nortel Networks Corp. (NYSE: NT) has filed for Chapter 11 bankruptcy protection. But the fallout from the filing continues to reverberate in the industry. For instance, Flextronics International Ltd. (NASDAQ: FLEX) is an electronics manufacturing services company ("EMS") that has exposure to Nortel.
Collins Stewart Initiates Coverage on Amazon.com (AMZN) with a Buy; Negative on eBay (EBAY)
Stewart initiates coverage on Amazon.com (Nasdaq: AMZN) with a Buy. Price target $65.
Collins analyst says, "AMZN leads the E-Commerce industry with a culture of innovation and a strong customer-centric approach. AMZN’s top-line growth is 2.5x the US E- Commerce growth rate and we expect margin expansion in 2010 and beyond…AMZN trades at a premium to its peers, but it is well deserved due to strong fundamentals and secular growth trends, in our view."
The Death of the Nortel Shareholder (NT)
Nortel Networks (NYSE:NT) has just been halted for trading on wire reports that the firm has filed for bankruptcy protection. It is no secret that the company has been in trouble. We noted before that the company was hinting at a reverse stock split. Things went from bad to really bad to just about the worst. This may completely wipe out the holders of common stock if past bankruptcy filings are any real judge of the future.
Posted Without Comment: December Retail Sales
According to MarketWatch:
"Stung by weak demand and falling prices, U.S. seasonally adjusted retail sales plunged 2.7% in December, the Commerce Department estimated Wednesday.
Excluding the 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%. Excluding gasoline and autos, sales fell 1.5%, the largest drop since September 2001.
Retail sales have fallen for six months in a row, the longest decline on record. Sales in October and November were revised lower.
Chain stores have reported further weakening in early January as the recession began its second year."
Douglas A McIntyre
Top Pre-Market Analyst Downgrades (MDRX, AAUK, EBAY, HNZ, SOLR, ITG, NVO, SI, SCR, PCU, STP, VISN)
These are most of the general analyst calls we have seen with downgrades or negative implications this Wednesday morning in the early pre-market trading hours:
- Allscripts-Misys (NASDAQ: MDRX) Cut to Neutral at UBS.
- Anglo American (NASDAQ: AAUK) Cut to Hold at Citigroup.
- eBay (NASDAQ: EBAY) Started as Sell at Collins Stewart.
- HJ Heinz (NYSE: HNZ) Cut to Market Perform at Bernstein.
- GT Solar (NASDAQ: SOLR) Started as Buy at Kaufman Brothers.
- Investment Tech (NYSE: ITG) Cut to Sell at Goldman Sachs.
- Novo-Nordisk (NYSE: NVO) Cut to Sell at Citigroup.
- Siemens (NYSE: SI) Cut to Neutral at Merrill Lynch.
- Simcere Pharmaceutical Group. (NYSE: SCR) Cut to Neutral at Goldman Sachs.
- Southern Copper (NYSE: PCU) Cut to Sell at UBS.
- Suntech Power (NYSE: STP) Cut to Underperform at FBR.
- VisionChina Media (NASDAQ: VISN) Cut to Perform at Oppenheimer.
There were also many financial downgrades and some downgrades specific to the oil patch this morning as well. As you can see by the few upgrades noted earlier, the pace of downgrades is still greatly exceeding upgrades.
Jon C. Ogg
January 14, 2009
Analysts Downgrading Oil Patch (NOV, PDE, REP, SII, STO, SU, RIG)
It is probably no huge shock that downgrades are coming more than upgrades now that oil has come down so much. Too bad these were not the calls several months ago. Here are some of the downgrades this Wednesday in the oil patch:
- National Oilwell Varco (NYSE: NOV) Cut to Underweight at JPMorgan.
- Pride International (NYSE: PDE) Cut to Underweight at JPMorgan.
- Repsol SA (NYSE: REP) Cut to Neutral at UBS.
- Smith International (NYSE: SII) Cut to Neutral at JPMorgan.
- Statoil (NYSE: STO) Cut to Neutral at UBS.
- Suncor Energy (NYSE: SU) Cut to Sector Perform at RBC.
- Transocean (NYSE: RIG) Cut to Neutral at JPMorgan.
Jon C. Ogg
January 14, 2009
Downgrading Hedgies, Private Equity & Financials (BX, FIG, GLG, IVZ, JNS, OZM, STD, TROW)
There is an interesting trend where Barclays has essentially cut its rankings on hedge fund and private equity operators. Here are the calls, plus a call elsewhere on a bank:
- Blackstone (NYSE: BX) Cut to Underweight at Barclays.
- Fortress Investment (NYSE: FIG) Cut to Equal Weight at Barclays.
- GLG Partners (NYSE: GLG) Cut to Equal Weight at Barclays.
- INVESCO (NYSE: IVZ) Started as Equal Weight at Barclays.
- Janus Capital (NYSE: JNS) Started as Underweight at Barclays.
- Och-Ziff Capital (NYSE: OZM) Cut to Equal Weight at Barclays.
- Banco Santander, S.A. (NYSE: STD) Cut to Sell from Neutral at UBS.
- T. Rowe Price (NASDAQ: TROW) Started as Equal Weight at Barclays.
Jon C. Ogg
January 14, 2009
Early Bird Analyst Upgrades (AUO, CLB, LAB, SKM, SOHU)
These are some of the early bird upgrades and positive research calls we have seen from Wall Street analysts this Wednesday morning with more than two hours to the open:
- AU Optronics (NYSE: AUO) Raised to Overweight at HSBC.
- Core Labs (NYSE: CLB) Raised to Outperform at JPMorgan.
- LaBranche (NYSE: LAB) Raised to Buy from Sell at Goldman Sachs.
- SK Telecom (NYSE: SKM) Raised to Buy at Citigroup.
- Sohu.com (NASDAQ: SOHU) Started as Outperform at Oppenheimer.
Jon C. Ogg
January 14, 2009
OPEC And The States Conspire To Raise Gas Prices
The price of gas is going up. Saudi Arabia, the lead member in OPEC, says that it is serious about cutting production this year. Last year’s cuts did nothing to stop the drop in the price of oil.
Now, OPEC is being joined by the states who want to tax gasoline use to offset falling revenue from other sources. It may drive some households into further financial distress, but the government comes first.
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