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The launch of Boeing’s 787 Dreamliner has been delayed so often that it would be comical except that the aerospace firm’s shareholders and customers are not laughing. Boeing trades at $50, down from more than $100 less than two years ago. Management has been appropriately blamed for most of the tardiness which has been caused by labor unrest, supply chain problems, and design flaws. Each time the delivery date was pushed back again, investors wondered why management was getting a vote of confidence from the board. Read More
Monthly Archives: August 2009
Boeing’s (BA) CEO Finds A Scapegoat
GAIN, or FOREX.COM, Files For IPO
GAIN Capital Holdings, Inc., and online provider of retail foreign exchange trading and related services with the FOREX.COM portal, has just filed to come public via an initial public offering. The IPO terms and shares are not disclosed, but for filing purposes it listed a sale as being up to $125 million in shares being sold. It also listed NASDAQ as the exchange it would trade on, but did not offer up a stock ticker. The two underwriters listed on the preliminary prospectus are Morgan Stanley and Deutsche Bank.
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How the Legacy Airlines Lost So Much Altitude Since 9/11
By Robert Herbst
After losing over $5 billion last year, the airline industry is now on course to lose a similar amount for 2009. This projected loss comes after the airlines will spend over $13 billion less for fuel compared to 2008.
Losing money for the old legacy carriers is nothing new. But this year, even low cost Southwest (LUV), after 35 consecutive years of profits, is expected to lose money. Of significance for how serious the revenue problems are for the industry, Southwest’s load factor will be the highest in the airline’s history.
If you’ve taken a flight or read a newspaper lately, you’re probably aware the airline industry has serious problems from customer service to record financial losses. Read More
Whitman & Third Avenue Launch Focus Credit Fund (TFCVX, TFCIX, TAVFX)
If you do not know M.J. Whitman or the Third Avenue Management Inc. family of mutual funds, then you are probably not a value investor. Whitman and his team have been perhaps some of the deepest value investors for decades on Wall Street. And now the fund group is launching a new fund called the Third Avenue Focused Credit Fund. There will be two classes of shares: the investor class shares will trade under the ticker ‘TFCVX’ and the institutional class will trade under the ticker ‘TFCIX.’
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Chicago Purchasing Managers Showing Some Growth
The reading for Chicago Purchasing Managers for August is now back in positive territory. The adjusted August figure is 50.0 vs. 43.4 in July. A reading above 50.0 is growth, a reading under 50 is contraction. Bloomberg had a consensus reading expected at 48.0, and this apparently matches the highest expectation of all economists surveyed.
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Top Day Trader Alerts (AIG, BJS, BHI, GENZ, FNM, FRE, HGSI, MVL, DIS)
These are Monday’s top day trader and active trader alert stocks. We have links through to each with more detailed price/volume analysis over at VSinvestor.com:
American International Group (NYSE: AIG) is giving back some of last week’s gains after Barron’s gave a harsh reminder here.
BJ Services Company (NYSE: BJS) is surging on a deal where Baker Hughes Inc. (NYSE: BHI) is acquiring the company….
Genzyme Corporation (NASDAQ: GENZ) is down over 3% on a downgrade and ahead of an FDA review date tomorrow.
Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are both getting their wings clipped after FBR reminds of no underlying value remaining….
Human Genome Sciences, Inc. (NASDAQ: HGSI) is getting clipped as buyout hopes fade.
Marvel Entertainment, Inc. (NYSE: MVL) is surging after being acquired in a serious surprise merger by Walt Disney Co. (NYSE: DIS).
If you wish to be notified by email when the top day trader alerts hit, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more, you can join our open email distribution list which goes out several times per week.
JON C. OGG
When Banks and Brokers Downgrade Each Other (BAC, MS)
It is usually a wonder when you see bank and brokerage firms analyst upgrades or downgrades on competitors in the bank and brokerage sector… Are they really downgrading themselves? That is the question regarding Bank of America Corp. (NYSE: BAC) and Morgan Stanley (NYSE: MS) this morning. Bofa/Merrill Lynch has downgraded Morgan Stanley. The new rating, Neutral. The old, Buy. And the comments and the notes might be more important than the official rating change.
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Top Analyst Upgrades (APSG, BWA, CBI, ETH, GME, PIR, TD, WSM)
These are some of the top pre-market analyst upgrades and positive research calls that we have seen from Wall Street firms early this Monday morning:
Applied Signal (APSG) Raised to Buy at Colliins-Stewart.
Borg Warner (BWA) Raised to Outperform at Wells Fargo.
Chicago Bridge & Iron (CBI) Raised to Overweight at JPMorgan.
Ethan Allen (ETH) Raised to Hold at KeyBanc.
GameStop (GME) Raised to Conviction Buy List at Goldman Sachs.
Pier-1 Imports (PIR) Raised to Hold at KeyBanc.
TD Bank (TD) Raised to Outperform at RBC.
Williams-Sonoma (WSM) Raised to Hold at KeyBanc.
JON C. OGG
Top Analyst Downgrades (AGO, CP, KOF, GENZ, SHAW)
These are some of the top early-bird analyst downgrades and cautious research calls we have seen from Wall Street analysts early this Monday morning:
Assured Guaranty (AGO) Cut to Neutral at UBS.
Canadian Pacific Railway (CP) Cut to Neutral at UBS.
Coca-Cola Femsa (KOF) Cut to Sell at UBS.
Genzyme (GENZ) Cut to Neutral at Baird.
Shaw Group (NYSE: SHAW) Cut to Neutral at JPMorgan.
JON C. OGG
Audits Of The Fed May Begin Soon
Barney Frank and other Congressmen are anxious to pass a law that would allow the government to audit the Fed including what its assets are, how they are lent, who they are lent to, and what the results of the loans are.
The Government Accountability Office, which is an agency of Congress, would do the work, giving Congress some level of new oversight of the Fed, whether it wants to admit that or not. Read More
For AT&T (T), The Apple (AAPL) iPhone Is A Bust
There are two ways to look at the economic relationship between Apple (AAPL) and AT&T (T) and both may be accurate. AT&T says it has signed up 10 million subscribers to buy the iPhone and take its long-term cellular calling plans. Many of those customers have come from other cellular provides. AT&T is thus adding new, and perhaps, profitable business.
On the other hand, AT&T pays Apple an estimated $400 a phone. AT&T probably has to hold onto its iPhone customers for the full two years of their subscription plan to make a lot of money. Read More
Economists Make Their Case For Inflation
The latest poll by The National Association of Business Economists shows that 41% believe that the Fed’s actions will cause inflation during the next two years. The top reasons cited for concern were “lagged effects of policies now in effect”, “monetization of the debt” and “ineffective exit strategy.” Put another way, the Fed will not be able to get out of its own way as the economy recovers. Read More
The Fed’s $14 Billion Paper Profit
The Fed has made so many bank loans, most of them short term, over the last several quarters that it would bound to lose money. But, it hasn’t so far. The agency has made money on capital it has invested in helping soften the blow of the liquidity crisis.
Accoring to the FT, “The Federal Reserve has made a $14bn profit on loan programmes that provided hundreds of billions of dollars in liquidity to the financial system since the start of the crisis two years ago.” Read More
Tax Avoidance And The 2011 GDP Dip
UK investment banks are preparing to pay many of their big earners at the beginning of 2010 to avoid an income tax on April 5. The Times points out that this may reinforce notions that investment bankers are now so greedy that they plan to shift taxable income from one year to the next. Protests are useless and the tax strategy that has produced this practice will be a huge drain on government revenue in the US and UK. These losses will probably be significant enough to undermine tax receipts in 2011 and challenge GDP growth as well. Read More
Lockerbie And Crude Ethics
The Times of London claims that people within the British government turned over convicted Lockerbie bombing participant Abdelbaset Ali Mohmed al-Megrahi to Libya as part of an attempt to secure a major oil deal. The Times reported “Gordon Brown’s government made the decision after discussions between Libya and BP over a multi-million-pound oil exploration deal had hit difficulties.” The heinousness of the Lockerbie bombing gives the apparent “trade” a special level of abhorrence, but it is not the first time that the interests of profits have outweighed better ethics. Read More
Media Digest 8/31/2009 Reuters, WSJ, NYTimes, FT, Bloomberg
Reuters: The best investment for Chinese companies may be the nation’s own 1.3 billion person home market.
Reuters: Japan’s Democrats took power.
Reuters: Economists say there is no need for a second stimulus package.
Reuters: The Fed made $14 billion on loans made during the credit crisis. Read More
Asia Markets And Europe Open 8/31/2009
Markets in Asia fell.
The Nikkei was off .4% to 10,493. Toyota (TM) was down over 1%.
The Hang Seng was off 2.1% to 19,668.
The Shanghai Composite was down 6.7% to 2,668.
At the open in Europe, the Dax was down 1% to 5,464. The CAC 40 fell .7% to 3,666.
Data from Reuters and MarketWatch.
Douglas A. McIntyre
Schaeffer’s Investment Research: Exaggeration At Its Finest
Schaeffer’s Investment Research of Cincinnati, run by Bernie Schaeffer, has been sending out e-mail promotions which are as clever as they are opaque. The solicitation is to join the Elite Trader service. Some of the statements in the e-mail are odd and incredible. Read More
The Unusual Suspects (ATVI, AIG, ALTH, TREE, GOOG, PAY, EXPO, WIRE, AXYS)
We have almost a whole new slate of stocks in this week’s round of “The Unusual Suspects” for key stocks traders need to keep an eye on for the week ahead. Activision Blizzard Inc. (NASDAQ: ATVI) was singled out by Barron’s. We ran a bit noting $100 as a possible target for American International Group Inc. (NYSE: AIG), and let’s just say that it was widely read. Allos Therapeutics Inc. (NASDAQ: ALTH) has a key FDA ruling this coming week. Tree.com, Inc. (NASDAQ: TREE) may have its model crushed by none other than Google Inc. (NASDAQ: GOOG). And troubled VeriFone Holdings, Inc. (NYSE: PAY) has earnings due this coming week, right at a key stock inflection point. Exponent Inc. (NASDAQ: EXPO) and Encore Wire Corp. (NASDAQ: WIRE) are S&P index additions as new entrants. Axsys Technologies Inc. (NASDAQ: AXYS) also has a shareholder proxy date this week, and some think a higher buyout price may be in the works. We have run key details and previews for all of these to watch in the coming week.
24/7 Wall St. TV: August Cars Sales, And Beyond
August light vehicle sales in the US have to be good. The “clunkers” program produced almost 700,000 sales. The industry might as well enjoy it while its lasts. September and the rest of the year will be awful.
Edmunds predicts that the 1.17 million cars will be sold this month, which is up 18% from last month and down “only” 6% from last year. Drops of 30% have been closer to the norm in 2009.
The annual sales rate actually hit 19 million in late July. but is only half of that now, the car research company says. Read More
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Today’s top tickerspy Indexes Home Furnishing R... +14.1% Ethanol and Biofu... +5.1% Electronics Retai... +2.1% Diabetes Stocks +2.0% Memory Chip Stock... +2.0% 
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