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The global handset business has faltered due to the recession. Research firm Strategic Analytics says that worldwide handset sales fell to 291 million units in Q3 down from 304 million in the same period a year ago. But, the firm expects Q4 to be a period of improving sales compared to last year, and part of that improvement is likely to be driven by strong sales of Apple’s (NASDAQ:AAPL) iPhone. Read More
Monthly Archives: October 2009
Handset Growth Expected To Surge With Apple (AAPL) Is The Lead
New Commercial Real Estate Accounting Rules: Cooking The Books
New guidelines for examining commercial real estate loans issued by the FDIC appear to allow examiners to go easy on banks as they account for what would be, under many circumstances, considered non-performing commercial real estate loans. This may help banks with their balance sheets and solvency, but it also misleads bank investors and the public about the seriousness of the huge problem in the commercial real estate lending business.
The new FDIC directive says ”Financial institutions that implement prudent CRE (commercial real estate) loan workout arrangements after performing a comprehensive review of a borrower’s financial condition will not be subject to criticism for engaging in these efforts even if the restructured loans have weaknesses that result in adverse credit classification.” Read More
Nine More US Banks Fail
Nine more banks failed and the pace of the closures appears to have quickened. The number of banks that would fail next year is more than four hundred if the current is maintained. Some analysts say that they expect more than 500 financial firms go under due to the recession.
The FDIC listed North Houston Bank, Houston, TX , Madisonville State Bank, Madisonville, TX, Citizens National Bank, Teague, TX , Park National Bank, Chicago, IL , Pacific National Bank, San Francisco, CA, California National Bank, Los Angeles, CA, San Diego National Bank, San Diego, CA Community Bank of Lemont, Lemont, IL and Bank USA, NA, Phoenix, AZ as those that went under. Read More
TeleNav Files For IPO, Maybe Too Late (TNAV, GOOG, GRMN, S, T)
If you watched any news this week about Google Inc. (NASDAQ: GOOG) launching a free personal navigation service on its Android phones, then you know it was a bad week for Garmin Ltd. (NASDAQ: GRMN). This wasn’t even really unknown news, although the timing caught many by surprise. And now most IPOs coming to market are getting sold and not bought. So if I were to tell you that a company called TeleNav, Inc. whose first line of their own description said “We are a leading provider of location-based services, or LBS, including voice guided navigation, on mobile phones” filed to come public via an Initial Public Offering the question is: what would you think?
If you can believe it, that is just what happened late Friday afternoon. No terms were issued, but TeleNav did say that it plans to sell up to $75 million for filing purposes. No exchange was listed and the company plans to trade under the stock ticker “TNAV” after the IPO.
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Next Week’s Top 10 Earnings on Deck (CHK, F, KFT, MA, CSCO, CMCSA, QCOM, BRK-A, SIRI, VG)
Earnings season may be winding down, but next week still has some very important companies that are economic indicators in and of themselves or are key stocks that have broad customer and investor bases. Picking only ten companies leaves many key stocks out, but we have some here which will appeal to most investors and traders. Among next week’s top earnings are Chesapeake Energy Corporation (NYSE: CHK), Ford Motor Company (NYSE: F), Kraft Foods Inc. (NYSE: KFT), MasterCard Incorporated (NYSE: MA), Cisco Systems Inc. (NASDAQ: CSCO), Comcast Corporation (NASDAQ: CMCSA), QUALCOMM Inc. (NASDAQ: QCOM), and Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).
We also have the biggest cult stocks of all with SIRIUS Satellite Radio (NASDAQ: SIRI) and Vonage Holdings Corp. (NYSE: VG) reporting next week. We have offered some color on each stock along with chart data where relevant, along with Thomson Reuters consensus estimates.
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Bankruptcy Watch: A Wave Of Energy Bankruptcies
Today South Texas Oil Company (NASDAQ: STXX), an oil and gas company, filed for relief under Chapter 11 in the United States Bankruptcy court for the Western District of Texas. The company will file a motion with the Bankruptcy Court to allow them to seek interim financing for $1.5 million.
Yesterday Rancher Energy Corp (OTC: RNCH), a company engaged in the development, production and marketing of oil and gas, filed for relief under Chapter 11 in the United States Bankruptcy Court for the District of Colorado.
On October 27th, CanArgo Energy Corporation (OTC: CANR), an oil and gas exploration company, filed for relief under Chapter 11 with the United States Bankruptcy Court for the Southern District of New York. The company has filed a motion with the Court that it approve an additional $1.2 million in loans for operational funding. The company’s Chapter 11 filing has caused roughly $18.1 million in debt to become due for the company.
Garrett W. McIntyre
Rig Counts Inching Back Up (BHI, OIH, DIG, USO, OIL)
This week’s data from Baker Hughes, Inc. (NYSE: BHI) on the weekly rig counts looks better and less mixed than in other weeks despite the notion that all projects should be financially sound at current levels. On the news, we are watching the key ETF products of the Oil Services HOLDRs (NYSE: OIH), the Ultra Oil & Gas ProShares (NYSE: DIG), the United States Oil (NYSE: USO) ETF and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) react to this news. The overall figure is up, but barely. Commodities players are mostly lower today, but more on the consumer data than on anything about rig counts.
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CIT (CIT) Gets $1 Billion From Icahn
CIT Group (NYSE: CIT) it has entered into an agreement with Carl Icahn to support its restructuring plan and secured an incremental $1 billion committed line of credit from Icahn Capital LP to provide supplemental liquidity for CIT as it pursues that plan. Read More
Signals From The Money Supply
Since the start of the financial crisis the Federal Reserve has grown the money supply with incredible speed. Inflation hawks have been crying bloody murder. To be sure, the amount of dollars in the system has increased dramatically. Since Q1 2005 M1 and M2 have grown about 21% and 30% respectively. However, this have been offset by a nearly commensurate decline in the amount dollars get around, or velocity. The charts below show both the growth rates of the money supply as well as the velocity of money since Q1 2005.
Money Supply Growth Rate, Q1 05 through Q3 09:
Velocity Growth Rate, Q1 05 through Q3 09:
Perhaps the most interesting thing to come out of yesterday’s economic data was that the decline in velocity seems to be coming to an end. If the trend reverses we are likely to see renewed growth in the price level, which may trigger FED tightening sooner rather than later.
Garrett W. McIntyre
Bill Gates Gets Further Entrenched in Waste Sector (RSG, WM, MSFT, BRK-A)
If you thought that Bill Gates might have an ambition beyond just passive investing in the garbage and waste disposal sector, you might be correct. Bill Gates’ Cascade Investment, L.L.C. and the Bill & Melinda Gates Foundation Trust own a collective share of about 15% of Republic Services, Inc. (NYSE: RSG). Republic is the #2 waste management player now that it acquired Allied Waste Industries behind the dominant Waste Management Inc. (NYSE: WM).
Today came the news that Gates’ confidant Michael Larson has joined Republic’s Board of Directors effective October 28, 2009, and Larson will also become a member of Republic’s Compensation Committee and its Nominating and Corporate Governance Committee. Larson is the Business Manager of Cascade Investment and is the Chief Investment Officer for the Bill & Melinda Gates Foundation Trust. In short, Bill Gates (or his investment funds) is not just going to be a mere large investor in the garbage sector. That is an entrenchment into a company, and there seems to be a reason for it.
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Top Day Trader Alerts (GNW, CIT, VVUS, NVTL, SWIR, HGSI)
We are only featuring a few key day trader and active trader stocks early this morning. We have links through to more data and analysis with links on each stock over at VSInvestor.com:
Genworth Financial Inc. (NYSE: GNW) is soaring on an unexpected earnings and on a huge discount to book value.
CIT Group Inc. (NYSE: CIT) is challenging some key lows from earlier this month and from August on amended loan terms. Actually, things are now getting much worse with a 9:20 update about potential bankruptcy filing.
VIVUS, Inc. (NASDAQ: VVUS) is trading up 8% on additional Qnexa obesity drug data.
Novatel Wireless, Inc. (NASDAQ: NVTL) did not at all match the gains reported by Sierra Wireless (NASDAQ: SWIR). Shares are down 20%.
Human Genome Sciences, Inc. (NASDAQ: HGSI) is going to be one to watch ahead of next week’s new clinical data. We saw huge volume in stock options yesterday on this one and would expect more of the same today.
You can join our open email distribution list to get updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.
JON C. OGG
Today’s Best Market Rumors (10/30/2009) (C)(CSCO)(SAPE)(DOX)(CTSH)
Updated throughout the day.
Updated 3.23 PM EST: Analyst Michael Mayo says Citigroup (NYSE:C) will take a $10 billion write down the quarter. Citi denies it (CNBC)
Updated 10.24 AM EST: Cisco (NSADAQ:CSCO) may drop its bid for Tandberg (Barron’s)
Venezuela may have gold reserves with a total value over $13 billion. (CNBC)
JP Morgan (NYSE:JPM) may have had concerns about Galleon as early as 2001 (Financial Times)
Likely near-term tech acquisition targets include Sapient (NASDAQ:SAPE), Computer Sciences (NYSE:CSC), WNS (NYSE:WNS), Amdocs (NYSE:DOX), Cognizant Technology (NASDAQ:CTSH) and ExlService (NASDAQ:EXLS) (Reuters)
Time Warner (NYSE:TWX) may spin-off AOL in December (TheStreet.com)
CIT (NYSE:CIT) is likely to file for bankruptcy in the next few days. (Reuters)
Cargill is the largest private company in the US followed closely by Koch Industries (Forbes)
Douglas A. McIntyre
Personal Income & Spending Dispel Inflation Fears
The consumer is still strapped. The Commerce Department posted its data for September’s personal income and spending, and frankly it almost makes you question yesterday’s GDP data. The report showed that Personal Income was unchanged in September, but showed that Spending was down by -0.5%. Dow Jones and other consensus data were looking for figures to be largely unchanged. The drop in spending appears to the worst reading this year, but there is a silver lining… with no income rise there is that much less fear of a heating inflation tea kettle.
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Expedia Expands in China After Earnings (EXPE)
Expedia Inc. (NYSE: EXPE) is looking solid on all fronts. Online travel is winning despite tight purses on direct travel as buyers look for better deals. Last night the online travel company beat earnings as its profits rose by 23%. Earnings were $117 million or $0.40 EPS net, but non-GAAP earnings were $0.48 EPS. Also noted was a 2% rise in revenue to $852.4 million. Thomson Reuters had estimates pegged at $0.43 EPS and $828.9 million in revenues. Then this morning came an acquisition in China.
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Top 10 Analyst Upgrades, Downgrades, Initiations (COH, ITG, K, LYG, WFR, STI, TWX, TOL, VMW, ZUMZ)
These are this Friday mornings top ten analyst upgrades, downgrades, and initiations of coverage from Wall Street firms:
Coach Inc. (NYSE: COH) Raised to Buy at Jefferies.
Investment Technology Group (NYSE: ITG) Cut to Neutral at JPMorgan.
Kellogg Company (NYSE: K) Raised to Buy at Citigroup.
Lloyds Banking Group (NYSE: LYG) ADR upgraded at both BNP Paribas and Credit Suisse.
MEMC Electronics (NYSE: WFR) Raised to Buy at Soleil.
SunTrust Banks (NYSE: STI) Raised to Equal-Weight at Morgan Stanley.
Time Warner Inc. (NYSE: TWX) Raised to Outperform at Credit Suisse.
Toll Brothers (NYSE: TOL) Raised to Buy at Citigroup.
VVMware (NYSE: VMW) Cut to Neutral at Goldman Sachs.
Zumiez (NYSE: ZUMZ) Raised to Buy at Jefferies.
You can join our open email distribution list to get updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.
JON C. OGG
No Stock Market Bubble In China
In a clear display of how much money is chasing investment in the equities markets in China, the new small cap stock market, ChiNext, had a spectacular debut. The average value of the 28 companies in the index doubled the first day. Trading had to be halted several times.
According to Reuters, as many as 1,000 firms will try to list on ChiNext in 2010. If the Chinese economy falters, the ChiNext index could drop 50% in a day.
Douglas A. McIntyre
Sony (SNE) Says Michael Jackson Movie Makes $20 Million In A Day
The film of Michael Jackson’s rehearsals for his British concert tour was a big risk for Sony (NYSE:SNE) which apparently put up $60 million for the rights to the footage. The gamble paid off.
The film “This is It” made $20 million in its first day. The movie was released worldwide and it will only be shown in theaters for two weeks. A music CD is being released at the same time and sales expectations for it are huge. Read More
Small Books Stores, Hurt By Amazon, Try To Strike Back
Amazon (NASDAQ:AMZN), Target (NYSE:TGT), and Wal-Mart (NYSE:WMT) are apparently sharply limiting the number of books customers can buy under their programs to sell popular titles at discount prices. Book publishers have already claimed that the three companies are trying to monopolized book distribution.
The Wall Street Journal surmises that the reasons for the restriction on the number of books any one customer can buy has been set at two or three is that small book stores are buying the books and then marketing them up in price for their customers. While that may be true, the entrepreneur with one or two stores cannot offer the discounts that Amazon can. The huge e-commerce company can afford to lose money on the titles because visitors to it website may but other items. The book shop owner cannot afford to adopt the same tactic. Read More
Galleon Warnings May Have Come A Decade Ago
The SEC missed a number of signals in the Bernie Madoff case. Some concerns were raised by his clients and Barron’s years before he was caught. It seems that a similar pattern holds true with Raj Rajaratnam and his firm Galleon. Several press reports say that information was being passed between Intel (NASDAQ:INTC) and Galleon as early as 1998. An FT story claims that a JP Morgan (NYSE:JPM) employee raised a red flag about Galleon in 2001.
The SEC has said a number of times that the reason that large incidents of fraud are missed by its investigators is that the agency is understaffed and incapable of covering all the ground which is part of its mandate, and that is almost certainly true. Read More
The New York Times’ Coming Jihad Against The Huffington Post
The old media is running out of time. The online editions of The Washington Post (NYSE:WPO), New York Times (NYSE:NYT), and Time, Inc (NYSE:TWX) properties do well, but not well enough to off-set losses at their print properties. 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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- UPDATE: Heritage To Sell Ugandan Oil Fields To Eni - FT
- Heritage To Sell Ugandan Oil Fields To Eni - FT
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