Posts related to ‘Accounting’

Sirius XM (SIRI) And CBS (CBS) Pose Greatest Financial Risk Among Media Firms

TVCBS (NYSE:CBS) and Sirius XM (NYSE:SIRI) pose the greatest investment risks among media companies based on a forensic measure of their transparency and the statistical reliability of their financial reporting and governance practices, according to new data from Audit Integrity. The probability for bankruptcy for Sirius is 8.5% and 4.6% for CBS. Both numbers are remarkably low, but still high for major US companies. Audit Integrity’s bankruptcy model achieved 90.9% accuracy in 2008 and 93.8% in 2009.

The safest companies for investors, based on the same measurement are Disney (NYSE:DIS) and  DirecTV (NYSE:DTV). The rest of the firms in the analysis are Time Warner (NYSE:TWX), Viacom (NYSE:VIA), Comcast (NYSE:CMCSA), Cablevision, (NYSE:CVC), GE (NYSE:GE), and Time Warner Cable (NYSE:TWC). Read More »

Posted on: November 12, 2009 – 9:23 pm in Accounting, Media, Old Media, , , , , , , , , ,

Apollo’s Woes (APOL)

Burning Money PicApollo Group Inc. (NASDAQ: APOL) is the clear leader of the private-sector public education companies.  Yet, that leadership position is coming with some severe pain after its earnings.  Apollo reported that its profit fell by some 60% on one-time litigation and write-off charges.  Earnings were $91.5 million, or $0.59 EPS, but outside of items its non-GAAP earnings was listed as being $1.06 EPS. Revenue rose by almost 30% to $1.08 billion.  The consensus estimates from Thomson Reuters were $1.04 EPS (non-GAAP) and $1.03 billion in revenues.  The bomb is here: the Securities and Exchange Commission has launched an informal inquiry over the company’s revenue recognition policy.

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Posted on: October 27, 2009 – 4:44 pm in Accounting, Earnings, Entertainment, SEC,

The Fannie-Freddie Equity Conundrum (FNM, FRE)

burning-house-image4It is no secret that things could be much better at Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).  But the last week or so has re-highlighted just how dire the situation is for these government sponsored entities and perhaps more importantly for the common shareholders. Both Freddie Mac and Fannie Mae were forced into federal conservatorship last year by Uncle Sam.

We have taken an in-depth look here at the situation and the past to get a feel for the future of these companies (GSE’s).  If you parse through the data and watch what has been happening in Washington D.C. of late, there is the clear reminder that these emperors have no clothes on.  In the world of Star Trek, these companies stockholders may be facing a Kobayashi Maru scenario.
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Posted on: October 25, 2009 – 7:45 am in Accounting, Bankruptcy, Bonds, Compensation, Corporate Governance, Cult Stock, Editor's Picks, Financial Stocks, Housing, Law, Politics, Regulation, Turnarounds, ,

Financial Junk Acting Independently (CIT, FNM, FRE, ABK, AIG, ETFC)

cit-logoCIT Group, Inc. (NYSE: CIT) is back to looking like its shares the paper they are printed on could be less valuable and less useful than toilet paper.  What is surprising is that this is not killing the other junky actively financial stocks.  CIT is down almost 40% at $1.46 on over 32 million shares on reports that it is close to collapsing, and that is before the market is even open. Common logic would dictate that this relation of one moving the others would be the case.  But junk under one roof is valued differently than junk under another roof.

Right before the open, there are many of the other junky financial stocks that are flat or trading up.  Fannie Mae (NYSE: FNM) is flat at $1.56 on less than 500,000 shares, while Freddie Mac (NYSE: FRE) is down 0.5% at $1.84 also on under 500,000 shares.  Ambac Financial Group, Inc. (NYSE: ABK) is actually up 1% at $1.80 on only 30,000 shares.

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Posted on: September 30, 2009 – 9:30 am in Accounting, Banking, Financial Stocks, Trading Alert, , , , , ,

The Lame Blame on Short-Termism

Bull and Bear ImageThere is a very silly notion being brought to you by the Aspen Institute Business & Society Program’s Corporate Values Strategy Group and what is admittedly a rather impressive list of names joining it. It is a call to end “Short-Termism” in the financial markets.  Imagine a long-term financial utopia where investors did not have to trouble themselves with the day in and day out wranglings of the stock market or the economy.

Imagine if quarterly earnings, monthly same-store-sales, quarterly or annual guidance, key turns in the demand cycle, interruptions or obsolescence of a business model and other issues were just able to be smoothed over.  Now imagine investing in this sort of a climate.  This idea sounds great on paper and probably looks great on economic models and charts that are the basis for the notion because it goes along with the current theme of thinking for the long-haul and doing what is best for everyone else.  The problem is that this is the most silly and perhaps dangerous notion for the public to embrace.  This is a path for investors large and small to get drummed, slapped, duped, discouraged and a few other things we decided not to print.
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Posted on: September 9, 2009 – 12:10 pm in Accounting, Activist Investor, Brokerage Firms, Buffett, Economy, Editor's Picks, Exchange News, Labor & Unions, Regulation, Research, Shareholder Issues, Utilities, Value Investing, , , , , , ,

Barrick Raising & Spending Billions To Drop Hedging (ABX)

Gold ImageBarrick Gold Corporation (NYSE: ABX) is going to be taking an action which has mixed implications for shares of Barrick versus the overall gold play now that the shiny yellow metal is hitting $1,000.00 an ounce.  The company has engaged a large syndicate of underwriters to raise billions in cash.  This is not to make an acquisition, but rather to remove gold hedging contracts.  With gold hitting $1,000.00 today, it seems that management does not want to leave major upside here in case the gold run-up is just starting.
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Posted on: September 8, 2009 – 5:29 pm in Accounting, Commodities, Metals, Secondary Offering, Shareholder Issues,

How Deep Are Buffett’s SEC & Derivative Issues? (BRK-A) (BRK-B)

Buffett ImageBerkshire Hathaway Inc.(NYE: BRK-A) (BRK-B) had its earnings and quarterly report last Friday, but the aftermath this week has shown more derivative criticism.  But more importantly, issues over SEC correspondence have been gathering some heightened interest.
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Posted on: August 14, 2009 – 10:18 am in Accounting, Buffett, SEC, ,

Tracking The Value Of The World’s Major Brands

apple
Several companies run annual brand valuations. It is a good business for advertising and marketing firms to be viewed as experts on brands. Brand values are based on the cash flow they create, and there are a number of ways to measure that. The mathematical parts of the formulas are relatively easy. The part that is hard, because it requires skilled forecasting, is what the reputation and value of a brand is likely to be three or four years from the date the values are set. It would have been hard half a decade ago to predict that AIG (AIG), the brand of the world’s largest insurance company, would be virtually worthless today, or that Facebook would be an extremely valuable brand. There is both art and science to determining the future of brands. Read More »

Posted on: August 12, 2009 – 3:21 pm in Accounting, Banking, China, Consumer Electronics, Consumer Goods, Editor's Picks, Financial Stocks, Hardware, PC Companies, Research, Software, Telecom, Tobacco, Wireless, , , , , , , , , , , , , , , , , , , , , , , , ,

Another $10.7 Billion For Fannie Mae (FNM)

bearFor those who want to know how much worse that housing market is getting they need look no further that the quarterly results of Fannie Mae (FNM). The mortgage operation lost $15.2 billion and will need another $10.7 billion from the government to continue.

The primary reason for the loss is that 4% of the loans that Fannie Mae owns or controls were delinquent, up from 1.4% a year ago. Based on that data, the government’s bailout of Fannie Mae and its near-twin Freddie Mac (FRE) is not nearly over. Taxpayers have put $85 billion into the two companies, and that tab is about to go much higher. Read More »

Posted on: August 6, 2009 – 7:28 pm in Accounting, Earnings, Financial Stocks, , ,

GE Gets SEC Issues Behind It (GE)

GE LogoGeneral Electric Company (NYSE: GE) has reached a settlement with the SEC regarding four accounting matters in 2002 and 2003.  Yep, 2002 and 2003.  This has enough of a look-back that it is probably as relevant to shareholders today as gold to a dead man.  This concludes the SEC investigation of these accounting issue, and GE was able to settle these allegations without admitting or denying allegations of any wrongdoing. GE consented to the entry of a judgment that requires the company to pay a civil penalty of $50 million and to comply with the federal securities laws.
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Posted on: August 4, 2009 – 11:10 am in Accounting, Conglomerates, Regulation, SEC,

Does ‘Going Concern’ Removal Change MGM’s Position? (MGM)

MGM LogoLast night we had an interesting volume spike alert in the after-hours trading in shares of MGM Mirage (NYSE: MGM).  It turns out that the spike was because the company’s auditor’s report will no longer include the “Going Concern” note.  This is an obvious huge development, but what we wanted to look at is how much this really changes the operational situation and outlook for MGM Mirage.
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Posted on: June 24, 2009 – 9:31 am in Accounting, Casinos, Entertainment

Two Quests Hit By One Going Concern (QELP, QRCP)

burning-money-picQuest Energy Partners, L.P. (NASDAQ: QELP) got hit hard on fairly innocent trading volume today.  The partnership was formed by Quest Resource Corporation (NASDAQ: QRCP) to acquire, exploit and develop natural gas and oil properties and to acquire, own, and operate related assets.  The partnership was late in filing its annual report and that was finally turned in.  Unfortunately, there are de-listing possibilities by NASDAQ and the auditors gave it a dreaded “going concern” note.
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Posted on: June 17, 2009 – 3:06 pm in Accounting, Annual Report, Oil & Gas, ,

Surprise: The Weakest Companies Are Leading the Rally

bank

Fed Chairman Ben Bernanke believes the green shoots of economic recovery are sprouting, and the market seems to agree: The S&P 500 is up 36 percent since March.

But a closer look reveals plenty of crabgrass on U.S. balance sheets —
enough to choke the rally before long. Balance sheets are the best snapshot of a company’s health. And for about 90 percent of the S&P 500 stocks outside the financial sector, the picture is still worse than a year ago. Read More »

Posted on: June 17, 2009 – 6:34 am in Accounting, Economy, ,

LDK Disclosing More Write-downs and Provisions (LDK)

Solar Panel PicLDK Solar Co.Ltd. (NYSE: LDK) has announced plans to file its 2008 report with the SEC tomorrow.  As many have become used to with LDK, there is some negative news as well.  The company said that during the preparation of the 2008 annual report, management determined that a further write-down to inventories and additional recovery provisions were needed.
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Posted on: May 21, 2009 – 9:28 am in Accounting, Alternative Energy, Annual Report, China, Green Biz, Restatements,

Who Runs The Government’s Portfolio? (C)(GM)(AIG)

bankThe federal government will end up owning bits and pieces of businesses including banks, car companies and insurance firms as it puts money into industries weakened by the recession. The Achilles Heel of this investing strategy is that there is no central authority watching the “portfolio” and no publicly articulated statement about when the holdings will be valuable enough to sell. Essentially, the taxpayer has nothing to tell him about the planned returns on his investments. Read More »

Posted on: May 21, 2009 – 3:58 am in Accounting, Autos, Banking, Politics, , ,

Many Biotechs Barely On Life Support (BPAX, CEGE, EPIX, IDMI, LJPC, NRGN, NFLD, TPTX)

Burning Money PicWe have run a watch list of companies under their own strategic review, and the number of biotech (or grouped with biotech) stocks under this description is just staggering.   We published a full review of this over at BioHealthInvestor.com.  The list includes Biosante Pharmaceuticals, Inc. (NASDAQ: BPAX), Cell Genesys, Inc. (NASDAQ: CEGE), EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX), IDM Pharma, Inc. (NASDAQ: IDMI), La Jolla Pharmaceutical Co. (NASDAQ: LJPC), Neurogen Corporation (NASDAQ: NRGN), Northfield Laboratories Inc. (NASDAQ: NFLD) and TorreyPines Therapeutics, Inc. (NASDAQ: TPTX) are all under strategic reviews and their futures are probably questionable at best.

You can read that full report here at the BioHealthInvestor.com website.

Jon C. Ogg
May 13, 2009

Posted on: May 13, 2009 – 11:31 am in Accounting, Biotech, Drug companies, FDA, Medical, Mergers and Buy Outs, Pharmaceuticals, Trading Alert, , , , , , , ,

Government Wants Bank “Stress Test” Results To Be Secret

water-lilies5The Federal Reserve keeps saying that many of its dealings with the financial industry must remain secret. Congress keeps insisting that no such secrets should be kept from the taxpayers who are funding the massive bank bailout.  But, Bernanke must believe that taxpayers are too poorly educated and ill-informed to handle complicated data on how companies such as Citigroup (C) and Bank of America (BAC) are doing. If the government’s information about the banks shows problems, it might frighten both investors and the general public. Read More »

Posted on: April 10, 2009 – 4:45 am in Accounting, Banking, ,

Morgan Stanley (MS): Why Investors Don’t Understand Financial Stocks

bank12The Wall Street Journal reports that Morgan Stanley (MS) lost money in the first quarter. The reason appears to be a perverse accounting rule, not unlike those that have plagued bank financial reporting for several quarters.

According to the paper, “Because of the accounting treatment on some bonds issued by Morgan Stanley before the financial crisis erupted, the New York company is expected to take a hit of $1.2 billion to $1.7 billion on the bonds when it reports quarterly results later this month.” Read More »

Posted on: April 9, 2009 – 4:29 am in Accounting, Banking,

Another Setback But Blockbuster (BBI) Is Likely To Survive

bear10Blockbuster’s (BBI) auditors gave the company a “going concern” letter which is often a kiss of death. The document is a way for the accounting firm to say the operation is unlikely to make it another year. In Blockbuster’s case, the news probably is not all that bad. The firm’s creditors have already agreed to restructure debt and give Blockbuster more time to re-create its business and build back the revenue that it is losing from renting movies out of stores. Alternatively, there is some expectations that Blockbuster can slash expenses so brutally that its operating income will recover. Read More »

Posted on: April 7, 2009 – 4:45 am in Accounting, Retail,

First Solar Sees Less Dilution For Acquisition (FSLR)

first-solar-logoFirst Solar, Inc. (NASDAQ: FSLR) has completed its acquisition of OptiSolar’s photovoltaic project pipeline.  The company said that it expects to construct the solar power plants developed under the pipeline over the next several years.  It also still plans to sell them to regulated utilities, diversified energy companies and other independent power producers. What is interesting is that the deal looks cheaper than when it was first announced, at least as far as shareholders and their expected dilution are concerned.

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Posted on: April 3, 2009 – 11:17 am in Accounting, Alternative Energy, Green Biz, Mergers and Buy Outs,