Daily Archives: March 16, 2009

Energy Conversion Devices Stumbles Again, Again (ENER)

solar-panel-pic13burning-money-pic21Energy Conversion Devices, Inc. (NASDAQ: ENER) has made an announcement after the close that really is nothing better than an old fashioned earnings warning.  The company also is lowering production levels and cutting costs via headcount and other consolidation.  Everything you’d expect from the industry of the future, right?

The company is slowing the pace of its demand-driven production and expansion plan.  It noted the present impact of credit availability on project flow in the global pipeline for photovoltaics as a result.

The company also withdrew its earnings guidance because of the current economy.   It now believes that solar product revenue for its third quarter will be roughly the same as the period a year ago.

There will be a delay in its production and expansion via a two-week production hiatus effective March 22.  The orders for its pending Battle Creek facility for equipment and the hiring of new employees will be postponed until demand improves.

It is consolidating some production from its Auburn Hills 1 facility into its newer Auburn Hills 2 facility. It notes that about 130 employees will be relocated, but this will result in a permanent reduction of approximately 70 positions from the remaining operations at Auburn Hills 1.

Shares closed down 3.6% at $18.43 today, and shares are now trading down under $17.00 in after-hours trading.  Its 52-week trading range is $16.00 to $83.33.

It seems that even after an 80% sell-off that the magnitude of the bad news in the solar sector just is not getting priced into the stocks.  Obama’s green energy press in the stimulus package was supposed to be a boom for these companies.  Let’s just hope if they go to D.C. with hat in hand that they don’t fly on a private jet.

This also has shares of First Solar Inc. (NASDAQ: FSLR) trading down in after-hours trading.  It was our single pick in alternative energy out of our Energy Stocks To Double picks, but that isn’t until by the end of 2010.  We expect many more negative headlines in the sector just like this for a while.

JON C. OGG

Posted on: March 16, 2009 – 3:22 pm in Earnings Warning, Green Biz, ,

The 52-Week Low Club

bear104 Kids Entertainment (KDE) Big Q4 loss. Drops to $1.01 from 52-week high of $25.30.

Nanogen (NGEN) Delisting notice. Drops to $.07 from 52-week high of $.59.

Data Domain (DDUP) Lazard downgrade. Sells off to $10.25 from 52-week high of $25.16.

Sinclair Broadcasting (SGBI) No news. Just another media company out of favor. Drops to $.90 from 52-week high of $10.03.

Douglas A. McIntyre

Posted on: March 16, 2009 – 3:16 pm in HI/LOW, , , ,

Home Builders Hope Vs. Reality

burning-money-pic20The latest National Association of Home Builders’ survey shows that confidence is unchanged from last month.

This is the second month in a row that the level has remained at 9 for new single-family homes.  Current sales conditions remained at 7, but the traffic of prospective buyers part of the index fell down to 9 from 11 in the report.
Read More »

Posted on: March 16, 2009 – 12:18 pm in Economy, Housing

One Percent Of All The People On Wall St. Make Ninety-Nine Percent Of All The Profits

bank18President Obama has asked Treasury Secretary Tim Geithner to look at compensation being paid to AIG (AIG) employees for work done in 2008 and to pursue “every legal avenue to block these bonuses and make the American taxpayers whole.”

New York Attorney General and future governor Andrew Cuomo says he may subpoena AIG over the bonuses.

There is nothing wrong with either move. Politicians know what makes the electorate mad. Taking taxpayer bailout money and paying it to wealthy bankers looks bad. Read More »

Posted on: March 16, 2009 – 11:49 am in Compensation, Politics,

Cisco’s Unified Computing: Many Risks, Questionable Rewards (CSCO, VMW, EMC, BMC, MSFT, RHT, ACN)

cisco-logoCisco Systems, Inc. (NASDAQ: CSCO) came out with its big technology platform announcement, as prior reports had hinted at.  This includes announcements for services and products involving Microsoft Corp. (NASDAQ: MSFT), Red Hat Inc. (NYSE: RHT), VMware, Inc. (NYSE: VMW)and EMC Corp. (NYSE: EMC), BMC Software Inc. (NYSE: BMC), and Accenture Ltd. (NYSE: ACN).  While this sounds complex, it is not really that complex.  But there are some risks.  This could cloud the waters at Cisco in determining if it wants to use the business model of an arms dealer or a mercenary.  It may also open the company to risks in new businesses which it has been able to avoid to date.
Read More »

Posted on: March 16, 2009 – 10:44 am in Software, Technology Companies, , , , , , ,

Enbridge Exits Colombia (ENB, EC)

money-stack-image33Canadian pipeline company Enbridge Inc. (NYSE: ENB) has agreed to sell its 24.7% equity stake in Colombia’s Ocensa pipeline to the country’s national oil company, Ecopetrol S.A. (NYSE: EC). The sale is worth about $400 million, and gives Ecopetrol a 60% stake in the pipeline.
Read More »

Posted on: March 16, 2009 – 9:54 am in Emerging Markets, Mergers and Buy Outs, Oil & Gas, ,

Name Change on New Oil Price Assessment

Today is the first day of reporting for the new crude oil price assessment announced earlier this month by Platts. The new marker has already had its name changed from Americas Sour Marker to Americas Crude Marker (ACM). The marker reflects the price of sour crude in the Gulf Coast region.
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Posted on: March 16, 2009 – 9:50 am in Index, Oil & Gas

Barclays, iShares, and Selling the Crown Jewels (BCS)

broken-money-merger-image6Barclays plc (NYSE: BCS) is trading higher on word that it may sell off its valuable iShares unit.  This is the golden child of the ETF industry.   The reports from the WSJ note that discussions have been held with multiple parties.  While no determination has been made yet, the figure being thrown around is 4 billion British pounds (over $5.6 billion U.S. dollars).  This may offer independent survival, but this looks like it would be no different than pawning off the Crown Jewels.
Read More »

Posted on: March 16, 2009 – 8:46 am in Banking, ETF, Mergers and Buy Outs,

US and Europe – Two Sides of the Natural Gas Storage Coin (CHK)

nat-gas-picNatural gas contracts in the US have been trading at around $4/thousand cubic feet. The prime suspect for the low price is, surprise, the slow economy. The amount of natural gas being consumed has dropped, but since production has not slowed down as quickly as the economy, much of the gas being produced has gone into storage.
Read More »

Posted on: March 16, 2009 – 8:21 am in Oil & Gas,

UBS Removed its Short-Term Sell Rating on General Electric (GE)

UBS removed its short-term sell rating on General Electric (NYSE: GE). The firm is maintaining its Neutral rating.

Shares of GE rocketed 36% higher last week as it recovers from its absolute free fall. Two major overhangs, a dividend cut and triple-A rating cut, are now out of the way.

Read more…

Posted on: March 16, 2009 – 8:12 am in Conglomerates, Research,

Citi Discloses New Independent Board Members (C, USB, BOH)

pandit-citi-imageCitigroup Inc. (NYSE: C) has disclosed those four new independent board members that it is nominating for election at the April 21 shareholders’ meeting.  There were reports last week that these would be established and known individuals with deep roots  in the financial community.  These are the individuals named:
Read More »

Posted on: March 16, 2009 – 8:05 am in Banking, Management Change, , ,

Oil & Energy Upgrades & Downgrades (APA, DNR, E, XOM, OXY, PXP, RDS.A, SPWRA)

oil-well-image4These are the top analyst calls we have seen in the oil patch and in the energy sector this Monday morning:

  • Apache (NYSE: APA) Raised to Outperform at Credit Suisse.
  • Denbury Resources Inc. (NYSE: DNR) Cut to Neutral at Credit Suisse.
  • ENI S.p.A. (NYSE: E) Raised to Overweight at JPMorgan.
  • Exxon Mobil (NYSE: XOM) Started as Buy at Citigroup.
  • Occidental Petroleum (NYSE: OXY) Cut to Neutral at Credit Suisse.
  • Plains Exploration (NYSE: PXP) Cut to Neutral at Credit Suisse.
  • Royal Dutch Shell (NYSE: RDS.A) Cut to Market Perform at Sanford Bernstein.
  • SunPower (NASDAQ: SPWRA) Cut to Underweight at Morgan Stanley.

JON C. OGG

Posted on: March 16, 2009 – 7:20 am in Alternative Energy, Analyst Calls, Oil & Gas, , , , , , , ,

Top Analyst Upgrades & Downgrades (KG, MXIM, NWL, WFMI, WY, LM, POWI, S)

These are some of the top pre-market analyst upgrades and downgrades from Wall Street this Monday morning:

  • King Pharma (KG) Raised to Overweight at Wachovia.
  • Maxim Integrated Products (MXIM) Raised to Market Perform at FBR.
  • Newell-Rubbermaid (NWL) Raised to Buy at B of A Merrill.
  • Whole Foods (WFMI) Raised to Market Perform at FBR.
  • Weyerhaueser (WY) Raised to Buy at Deutsche Bank.
  • Legg Mason (LM) Cut to Underperform at B of A Merrill.
  • Power Integrations (POWI) Cut to Sell at Piper Jaffray.
  • Sprint-Nextel (S) Cut to Market Weight at Wachovia.

JON C. OGG

Posted on: March 16, 2009 – 7:06 am in Analyst Calls, , , , , , , ,

When We Ban Short Sales, We Ban Share Buyers

John Tamny  RealClearMarkets

For some publicly held banks, the end of the share-price decline is seemingly nowhere in sight. Despite positive earnings news last week, Citigroup continues to bounce around in the $1-per-share range, while Bank of America remains in the low single digits.

The biggest factor dictating the health of financial institutions remains the Troubled Asset Relief Program (TARP). Indeed, it can’t be stressed enough that when the banks accepted TARP money, they effectively signed their death warrants because counterparties are understandably reluctant to do business with politicized entities. Plus, when the most pressing issue for a business involves pleasing politicians over shareholders, the days of the government-funded concern as a vibrant player in private markets are numbered.

Read…

Posted on: March 16, 2009 – 7:03 am in Uncategorized

EU Becomes A Drag On Global Economy

earth2Payrolls are shrinking in Europe which is not good for US multinationals that do business there, US firms that export there, or Chinese operations which send tens of billions of dollars of goods to the region each year.

According to Bloomberg, ”European payrolls shrank 0.3 percent in the fourth quarter from the previous three months, the second quarterly contraction and the biggest decline since the data series started in 1995, a separate report showed.”

Posted on: March 16, 2009 – 6:33 am in Economy, International Markets

Paying Farmers In China “Cash Back” Deals To Buy Cars

water-lilies2China has come up with another economic stimulus idea worthy or emulation by the US.

The central government in the world’s most populous nation will give farmers a credit if they buy new light trucks of minivans. The “cash back” deal is worth almost $1,000 for each vehicle. Read More »

Posted on: March 16, 2009 – 5:14 am in Autos

Bernanke’s Trouble Forecasting The Future

bear9“It now appears likely that real gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly. We expect economic activity to strengthen in the second half of the year, in part as the result of stimulative monetary and fiscal policies; and growth is expected to proceed at or a little above its sustainable pace in 2009, bolstered by a stabilization of housing activity, albeit at low levels, and gradually improving financial conditions. “–Ben Bernanke, Congressional testimony, April 2, 2008.

Mr. Bernanke, Chairman of The Federal Reserve and an esteemed economist said, about a year ago, that the economy was faltering, but that the slowdown was a blip and that GDP growth would be back in fine shape by 2009. Things have not turned out that way.

Last night on “60 Minutes”, Bernanke said that he thought the current recession would probably end late this year. Read More »

Posted on: March 16, 2009 – 4:52 am in Economy

AIG (AIG) Bailout And The Price Of Doing Business

bank17One of the things that Congress and the Administration knows but do not want to admit in public is that bailouts are messy affairs where most of what is planned does not work and one of the unintended consequences is that the process of salvaging large institutions is rarely fair. A lot of people, who should in a utopia, get nothing as the taxpayers dump money into the financial system to save it are paid very well. Others, who seem to be innocent bystanders in the process that has ruined financial firms and put tens of thousands of people out of jobs, are simply given the shaft. Read More »

Posted on: March 16, 2009 – 4:26 am in Banking, Politics, , , , ,

OPEC’s Enigma

sunset4OPEC elected to continue production at its current level, at least until May. The announcement was an unexpected result of the cartel’s meeting in Vienna.

There was no consensus among analysts about why OPEC did not try to increase prices. A number of member nations and oil producers from outside OPEC have said that if crude stays below $70 a barrel they cannot balance their national budgets and will face increasing deficits. Iran and Venezuela are the most vocal among these nations. Read More »

Posted on: March 16, 2009 – 3:57 am in Oil & Gas

Selling The Washington Monument

oil4China’s premier made some pointed remarks about the US economy and  its appetite for increasing the national deficit in order to save the American way of life.  The fallout from his observations is a new concern in the public’s mind about whether the Treasury can make the payments on its bonds.

China holds more US debt than any other entity either private or sovereign. Whether the communist government is really worried about the value of the US paper it holds or is just making a public insult about the flaws in American capitalism may never be known. What is known is that the financial markets have enough concern about Treasuries now to support a market for insuring US debt in the event that  the government cannot meet its obligations in the future. Read More »

Posted on: March 16, 2009 – 3:53 am in Economy, Oil & Gas, Politics