21 – January – 2009 – 24/7 Wall St.

Daily Archives: January 21, 2009

The 24/7 Wall St. Twenty-Five Best Financial Blogs

It has been more than a year since we published our feature, “The Twenty-Five Best Financial Blogs.” A great deal has changed. Some of the blogs on the list are gone or no longer have regular posts. Others have grown and become better.

This is a list of independent blogs. However, several major media outlets have excellent blog sections including David Gaffen at WSJ.com, Fortune.com’s Apple 2.0 blog, BusinessWeek.com’s Fine On Media, and BloggingStocks at AOL (24/7 contributes content to this site). Obviously, these blogs have a level of financial support that independent blogs do not enjoy. Their writers are paid salaries. They have greater exposure due to their relationship with larger websites. They are excellent, but really should not be compared with websites operated by one person or a small group of individuals. Nevertheless, they should be recognized for their own commentary as well as the exposure that they give to independent blogs.

Financial information on blog sites is not readily available. Most financial blogs are much too small to bring in enough direct revenue to support their writers. Some have newsletters, but it is impossible to know what they yield. A number run Google AdSense links on their sites to generate ad revenue, but, based on data gathered from a few financial blogs, if a site is not in the top of its category as measured by audience tracking sites like Quantcast, Alexa and Compete, it is unlikely to have enough revenue to support even one or two people.

Posted on: January 21, 2009 – 7:03 pm in Uncategorized

Toll’s 3.99% 30-Year Mortgage Incentive (TOL)

Toll Brothers (NYSE: TOL) may have a home buyer’s incentive above and beyond what other deals you have seen. We have seen on multiple sources that the homebuilder is using a 3.99% mortgage rate fixed for 30-years to entice people to purchase homes.

Before you go rush over there, it appears that there are caveats. There are probably many more than what we found.

Posted on: January 21, 2009 – 5:53 pm in Economy, Housing, TOL

Big Bank CEOs Buy Stock… Should You? (BAC, JPM)

Buying bank stocks might not be the worst investment ever. At least that is the case if you bought today when the market was down. Late in the day came SEC filings showing that the controversial CEOs of Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co (NYSE: JPM) bought shares of stock on the open market.

Posted on: January 21, 2009 – 5:01 pm in Banking, Insider Activity, BAC, JPM

Richard Parsons, The Biggest Loser, Takes Over Citigroup (C) Chairman’s Job

Why belabor the point? Richard Parsons, who did an awful job as Chairman and CEO of Time Warner (TWX), a position from which he mercifully retired , has been named Chairman of "death watch" candidate Citigroup (C).

Poor Sir Win Bischoff, who never meant anyone harm, stepped down as Chairman and will not be re-elected to the board.

It is worth pointing out, no matter how many times it needs repeating, that Parsons was on the Citi board during the period when many of the decisions which undermined the bank’s balance sheet were made. He also left Time Warner worse off than it was when he took over.

At least Sir Win will not have to be around when Citi is finally driven into the ground.

Douglas A. McIntyre

Posted on: January 21, 2009 – 4:52 pm in Banking, C, TWX

Apple Shines, Amazingly No Worms (AAPL)

Apple Inc. (NASDAQ: AAPL) has reported earnings, although it also now has the SEC looking into the company via an inquiry over its disclosure practices. Earnings were $1.78 non-GAAP EPS and $10.17 billion in revenue. Consensus estimates from Thomson Reuters (First Call) were $1.39 non-GAAP EPS and $9.75 billion in revenue. Its gross margin was 34.7%, equal to the year-ago quarter.

Among the highlights:

Posted on: January 21, 2009 – 4:41 pm in Consumer Electronics, Earnings, PC Companies, Technology Companies, AAPL

Ebay (EBAY) Earnings: Expecting Nothing And Getting It

Wall St. had low expectations for Ebay’s (EBAY) fourth quarter. For the period Ebay is expected to report earnings of $.39 a share on revenue of $2.1 billion, according to consensus estimates from FactSet Research. In the same period last year, Ebay posted earnings of $.45 on revenue of $2.18 billion.

The lack of enthusiasm shows. Ebay shares trade at just over $13, down from a 52-week high of $33.47.

Those who were prepared to be disappointed had their way. Ebay posted fourth quarter revenue of $2.04 billion. It posted net income on a GAAP basis of $367 million or $0.29 per share. EPS was off 29% from the same period in 2007.

Posted on: January 21, 2009 – 4:41 pm in Earnings, EBAY

Energy Transfer Partners Raising Cash (ETP)

Energy Transfer Partners, L.P. (NYSE:ETP) is raising cash. The company is offering 5,000,000 common units that represent limited partner interests rather than common shares.

The net proceeds from this sale will be used to repay debt from its revolving credit facility, and the company expects to use some of the funds to finance capital expenditures and other growth projects.

Posted on: January 21, 2009 – 4:23 pm in Oil & Gas, Secondary Offering, ETP

Netgear Holds The Line While Others Do Not (NTGR)

Netgear, Inc. (Nasdaq: NTGR) issued preliminary guidance for the fourth quarter ended December 31, 2008. The company said that it expects $155 million to $160 million in revenue. Thomson Reuters (First Call) has estimates at $157.2 million.

Posted on: January 21, 2009 – 4:12 pm in Earnings, Technology Companies, NTGR

An Ugly Truth About Bank Accounting (BAC)(WFC)(C)

24/7 Wall St. set out to look at whether financial reporting at a number of companies, particularly banks ,is "reliable"? This process took into account the chances that a firm might have to restate earnings, face litigation over misstatements, and even exposure to charges of fraud.

24/7 turned to Audit Integrity, which conducts forensic measurements of the transparency and statistical reliability of corporate financial reporting. The firm uses its own "Audit Integrity Accounting and Governance Risk Rating" to determine accounting risk: 1) a forensic assessment of the risk that financial results are misrepresented in public disclosures, and 2) governance risks, a forensic measurement a company’s governance practices helps users identify statistically high-risk behavior.

Posted on: January 21, 2009 – 3:28 pm in Banking, BAC, C, FITB, KEY, PNC, WFC

Anti-General Electric Bets Grow Stronger (GE)

General Electric Co. (NYSE: GE) briefly hit a new 52-week low earlier this morning. What is interesting is that there has been no support of the stock heading into Friday morning’s earnings announcement. Expectations are getting stronger that more bad news is headed its way. We do not want to say that traders are betting that shares will get cut in half, but conviction against the conglomerate is growing.

Posted on: January 21, 2009 – 2:34 pm in Conglomerates, Options, Trading Alert, GE

Expected Earnings Woes At Seagate Technology (STX)

Seagate Technology (NYSE: STX) is set to report earnings after the close. Shares are up 4% despite the softening of expectations to the point that the company is now expected to lose money.

Posted on: January 21, 2009 – 1:25 pm in Earnings, Technology Companies, STX

Investors Brace for eBay Earnings (EBAY)

Online auction leader eBay Inc. (NASDAQ: EBAY) is set to report earnings after the close of trading. The consensus estimates from Thomson Reuters (First Call) are $0.39 EPS on $2.12 billion in revenues. Because of valuations, we will be paying close attention to its outlook more than its overall review of the ever-important Q4 report of the past.

Posted on: January 21, 2009 – 1:01 pm in Earnings, Internet, EBAY

Apple’s Earnings Focus Likely Far Different Today (AAPL)

Apple Inc. (NASDAQ: AAPL) is expected to report earnings after the close of trading today. Consensus estimates from Thomson Reuters (First Call) are $1.39 non-GAAP EPS and $9.75 billion in revenues. Today’s guidance is also likely expected to be viewed far differently than in prior quarters where the company was deemed merely as being conservative. Unfortunately, Apple may be judged on much more than just its results today.

Posted on: January 21, 2009 – 12:44 pm in Consumer Electronics, Earnings, PC Companies, Technology Companies, AAPL

Jumpstarting Clean Energy… Is it Possible?

There is a lot of speculation on how clean energy and alternative energy programs are going to get off the ground under the new administration and under the current economic environment. Today’s Environmental Capital blog at the WSJ includes an article by Keith Johnson on how the Obama administration could promote the development and adoption of new clean-energy technologies. Johnson reviews tax credits (including refundable credits), feed-in tariffs, and renewable portfolio standards. He finds all fall short in one way or another.

Posted on: January 21, 2009 – 12:08 pm in Alternative Energy, Nuclear, Utilities

Buffett Adds Burlington Northern Shares Before Earnings (BNI, CSX, BRK-A)

Burlington Northern Santa Fe Corp. (NYSE: BNI) is set to report earnings today, and this comes just a day after competitor CSX Corp. (NYSE: CSX) earnings missed analyst expectations after a resort writedown took earnings down more than 30%. What is most interesting here is that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) disclosed that purchased an additional 4.36 million shares of common stock for a total of $271.2 million on the open market.

Posted on: January 21, 2009 – 11:44 am in Buffett, Earnings, Transports, BNI, BRK-A, CSX

Trouble in the Oil Sands (SU, ECA)

Yesterday’s New York Times carried a story about the commercial building boom in Calgary, Alberta. About 75% of Calgary’s office space is occupied by companies involved in extracting fossil fuels, and much of that is taken up by companies in the oil sands business.

Two of the largest players in the oil sands are Suncor Energy Inc. (NYSE:SU) and Encana Corporation (NYSE:ECA), and both are headquartered in Calgary. Encana has fully leased a 58-story office tower that is still under construction and that is finding it difficult to secure financing to complete the building.

Posted on: January 21, 2009 – 10:30 am in Oil & Gas, ECA, SU

UBS Slaps Short-Term Sell on GE (GE), Says AAA Rating and Dividend At Risk

Once the bluest of the blue chips, General Electric (NYSE: GE) can not seem to get a break anymore. Today, analysts at UBS slapped a "Short Term Sell" on GE, saying the company’s AAA rating and the company’s dividend is at risk. The firm also lowered their price target from $18 to $12.

Northern Trust Gets It Right (NTRS)

Northern Trust Corporation (NASDAQ: NTRS) is indicated higher after the trust bank and depository institution managed to show that some banks can beat earnings and still post positive earnings.

Posted on: January 21, 2009 – 8:46 am in Banking, Earnings, Financial Stocks, NTRS

Top Pre-Market Analyst Upgrades (AXL, ARCC, FSLR, F, GOOG, HOG, JBL, LEA, MYL, RYAAY, UL)

These are some of the top upgrades and positive calls we have seen from analysts on Wall Street this Wednesday morning:

American Axle (AXL) Raised to Hold from Sell at Deutsche Bank.
Ares Capital Corporation (ARCC) Raised to Neutral from Underweight at JPMorgan.
First Solar (FSLR) Started as Buy at Merriman Curhan Ford.
Ford (F) Raised to Hold from Sell at Deutsche Bank.
Google (GOOG) Started as Outperform at JMP Securities.
Harley Davidson (HOG) Raised to Hold from Sell at Citigroup.
Jabil Circuit (JBL) Raised to Hold from Sell at Citigroup.
Lear (LEA) Raised to Hold from Sell at Deutsche Bank.
Mylan Labs (MYL) Started as Buy at Citigroup.
Ryanair (RYAAY) Raised to Buy from Neutral at UBS.
Unilever (UL) Raised to Buy from Hold at Citigroup.

Jon C. Ogg
January 21, 2009

Posted on: January 21, 2009 – 7:43 am in Analyst Calls, ARCC, AXL, F, FSLR, GOOG, HOG, JBL, LEA, MYL, RYAAY, UL

Top Pre-Market Analyst Downgrades (AINV, BHI, BAC, WFR, MBT, OZM, SPWRA, STP, VIP, WMT)

These are some of the top pre-market analyst downgrades or cautious calls we are seeing from Wall Street this Wednesday morning:

Apollo Investment (AINV) Cut to Neutral from Overweight at JPMorgan.
Baker Hughes (BHI) Cut to Underweight at from Overweight at Morgan Stanley.
Bank of America (BAC) Cut to Neutral at Baird.
MEMC Electronics (WFR) Cut to Hold at Citigroup.
Mobile TeleSystems (MBT) Cut to Underperform at credit Suisse.
Och-Ziff Capital Management Group LLC (OZM) Cut to Market Perform at KBW.
Sunpower (SPWRA) Started as Neutral at Merriman Curhan Ford.
Suntech Power (STP) Started as Sell at Merriman Curhan Ford.
Vimpel Com (VIP) Cut to Neutral from Outperform at Credit Suisse.
Wal-Mart (WMT) Cut to Neutral from Outperform at Credit Suisse.