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The Growth of the Short-Selling Hedge Fund ETF (HDGE, GT, OPEN, ENR, COL, GMCR, C, ERIC, ATI, BBY, JCI)

Administrator — Thu, 12 Apr 2012 15:06:03 +0000

Apparently having a short selling strategy under a hedge fund exchange-traded fund model has been working. This week we received notice that the assets under management for AdvisorShares ActiveBear ETF (NYSE: HDGE) hit a record with more than $209 million in assets under management. That figure was listed on the fact sheet as being $205 million as of Wednesday’s close. This is a short-selling strategy ETF, so in theory its share price will rise as the market falls and/or when the holdings fall in value.

The short-only equity ETF saw inflows as well this week as the market was soft earlier in the week, but that will obviously ebb and flow as the markets rise and fall. The top ten short positions are as follows (largest first): Goodyear Tire & Rubber Co. (NYSE: GT); OpenTable, Inc. (NASDAQ: OPEN); Energizer Holdings Inc. (NYSE: ENR); Rockwell Collins Inc. (NYSE: COL); Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR); Citigroup, Inc. (NYSE: C); Ericsson (NASDAQ: ERIC); Allegheny Technologies Inc. (NYSE: ATI); Best Buy Co. Inc. (NYSE: BBY); and Johnson Controls Inc. (NYSE: JCI). Without rounding up or down, these top ten short positions account for only 32% to 33% of the entire ETF’s short positions.

Here is the ETF’s philosophy in a nutshell: “The portfolio management team implements a bottom-up, fundamental, research driven security selection process. In selecting short positions, the Fund seeks to identify securities with low earnings quality or aggressive accounting which may be intended on the part of company management to mask operational deterioration and bolster the reported earnings per share over a short time period. In addition, the portfolio management team seeks to identify earnings driven events that may act as a catalyst to the price decline of a security, such as downwards earnings revisions or reduced forward guidance.”

One thing is nearly certain here. If investors are looking for an ETF product that bets against high valuations or against what may be market aberrations, they may have found their vehicle.

Now, here is the flip-side of this ETF. There are two sides to every coin. If you get into a serious bull situation this can lose incredible amounts of money. Sometimes it is the most troubled stocks which rally the most, and it doesn’t take a rocket scientist to figure out what likely happens to the price of this ETF in that situation.

The ETF’s Net Expense Ratio is currently 3.29% but the fund noted “The Advisor has contractually agreed to keep the Fund’s Total Annual Fund Operating Expenses from exceeding 1.85% for at least a year from the date of the Prospectus. This agreement is limited to the Fund’s direct operating expenses and, therefore, does not apply to “Acquired Fund Fees and Expenses.” The fee breakdown is as follows per the ETF fact sheet:

Management Fee 1.50%
Short Interest Expense 1.44%
Other Expenses 0.22%
Acquired Fund Fees 0.13%
Gross Expense Ratio 3.29%

JON C. OGG

Filed under: ADR, Corporate Governance, ETF, Mutual Funds, Personal Finance, Short Interest Tagged: ATI, BBY, C, COL, ENR, ERIC, GMCR, GT, HDGE, JCI, OPEN

Commodities Watch: Molycorp Acquires A US Processing Plant; Demand for Steel to Grow; Wheat Prices Rise Again (MCP, REE, AVL, REMX, MT, AKS, ATI, X, NUE, GLD, SLV)

Administrator — Mon, 18 Apr 2011 17:58:50 +0000

Commodities news today features another processing plant acquisition, the latest projections on demand for steel, and more increases in the price of wheat. Gold and silver continue to make new highs today, as crude prices decline some.

Rare earths darling Molycorp, Inc. (NYSE: MCP) has acquired an Arizona processor of rare earth alloys and metals for $17.5 million. Earlier this month Molycorp spent $89 million to acquire a European rare earths processor.

The most interesting news about the latest Molycorp acquisition is its plan to begin immediately shipping rare earth feedstock from its California mine to the Arizona facility for processing. Molycorp has long said that it would begin production before the end of 2011, but this is a lot earlier than anyone expected. The company is probably shipping ore from stockpiles, and likely has been for a while, but now Molycorp will begin to capture the profits at a higher level on the value chain.

Other rare earth miners Rare Element Resources Ltd. (AMEX: REE) and Avalon Rare Metals, Inc. (AMEX: AVL) cannot afford to keep pace with Molycorp’s acquisitions nor will they be able to begin production as soon as Molycorp. Whenever Molycorp does a deal, it bashes the other stocks. When there’s news affecting rare earths in general, the other stocks benefit — and really for no good reason other than they have a stake in the ground on a rare earths play. The Market Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) down more than -3% today, to $27.06, in a 52-week range of $19.25-$28.91.

The World Steel Association expects steel consumption to rise by 5.9% in 2011, to 1,359 million metric tons, less than half the 13.2% growth in 2010. The group expects demand to rise another 6% in 2012, to 1,441 million metric tons.

The outlook is promising for steel producers ArcelorMittal (NYSE: MT), AK Steel Holding Corp. (NYSE: AKS), Allegheny Technologies Inc. (NYSE: ATI), United States Steel Corp. (NYSE: X), and Nucor Corp. (NYSE: NUE). Goldman Sachs upgraded ArcelorMittal from ‘neutral’ to ‘buy’ today, and either maintained or downgraded three other European steel makers.

Demand from China is expected to be about 605 million metric tons in 2011, almost 45% of the worldwide total. Much of that will come from Chinese producers.

Wheat prices both in Chicago and Kansas City are up more than 4% today as traders are now worried about the European wheat crop. A lack of rain in the north is expected to continue for at least another week.

Gold prices have reached another record high above $1,498/ounce, helped by a change in the outlook for US debt from ‘stable’ to ‘negative.’ Silver prices topped $43.50/ounce, but have come back below $43/ounce late in the day. The SPDR Gold Shares ETF (NYSE: GLD) is up to $145.58 after having set a new 52-week high of $146.07. The iShares Siver Trust (NYSE: SLV) is off fractionally late in the day, at $41.83, after also posting a new 52-week high earlier of $42.50.

Paul Ausick

Filed under: Commodities, Metals Tagged: AKS, ATI, AVL, GLD, MCP, MT, NUE, REE, REMX, SLV, X

Top Analyst Upgrades and Downgrades (ABT, ALU, ATI, CSCO, EL, F, GRMN, GMR, MOT, QCOM, RIMM, SAP, STP, SVN, TIVO)

Administrator — Thu, 18 Nov 2010 13:20:58 +0000

These are some of this Thursday’s key analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Abbott Laboratories (NYSE: ABT) Cut to Market Perform at Bernstein.
Alcatel-Lucent (NYSE: ALU) Cut to Underperform at Credit Suisse.
Allegheny Technologies Inc. (NYSE: ATI) Raised to Overweight at JPMorgan.
Cisco Systems Inc. (NASDAQ: CSCO) Cut to Underperform at First Global.
Estee Lauder Companies Inc. (NYSE: EL) Raised to Perform at Oppenheimer.
Ford Motor Co. (NYSE: F) Cut to Hold from Buy at S&P Equity Research (late Wednesday call ahead of GM IPO).
Garmin Ltd. (NASDAQ: GRMN) Started as Sell at Stifel Nicolaus.
General Maritime Corp. (NYSE: GMR) Cut to Market Perform at Wells Fargo.
Motorola Inc. (NYSE: MOT) Started as Buy at Stifel Nicolaus.
QUALCOMM Incorporated (NASDAQ: QCOM) Raised to Outperform at Credit Suisse.
Research In Motion Ltd. (NASDAQ: RIMM) Cut to Hold and target cut to $45 from $65 at Stifel Nicolaus.
SAP AG (NYSE: SAP) Started as Market Perform at BMO.
Suntech Power Holdings Co., Ltd. (NYSE: STP) Raised to Hold at Citi after a rival downgrade killed solar stocks yesterday.
7 Days Group (NYSE: SVN) Cut to Equal-weight at Morgan Stanley.
TiVo Inc. (NASDAQ: TIVO) Started as Hold at Stifel Nicolaus.

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JON C. OGG

Filed under: Analyst Calls Tagged: ABT, ALU, ATI, CSCO, EL, F, GMR, GRMN, MOT, QCOM, RIMM, SAP, STP, SVN, TIVO

Top Analyst Upgrades & Downgrades (ATI, ADY, BWA, CTCM, DGI, ERES, NOC, NVDA, BPOP, RBS, SWSI, WFMI)

Administrator — Tue, 10 Aug 2010 12:20:20 +0000

These are some of this Tuesday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls:

Allegheny Technologies Inc. (NYSE: ATI) Raised to Buy at BofA/Merrill Lynch.
American Dairy Inc. (NYSE: ADY) Cut to Hold at Roth Capital.
BorgWarner Inc. (NYSE: BWA) Cut to Hold at Deutsche Bank.
CTC Media, Inc. (NASDAQ: CTCM) Raised to Overweight at Morgan Stanley.
DigitalGlobe Inc. (NYSE: DGI) Cut to Hold at Canaccord.
eResearch Technology (NASDAQ: ERES) Cut to Sell at Benchmark.
Northrop Grumman Corp. (NYSE: NOC) Cut to Market Perform at FBR.
NVIDIA Corporation (NASDAQ: NVDA) Maintained Neutral at Gleacher & Co.
Popular, Inc. (NASDAQ: BPOP) Started as Overweight at Morgan Stanley.
Royal Bank of Scotland Group plc (NYSE: RBS) Cut to Neutral at Credit Suisse.
Superior Well Services, Inc. (NASDAQ: SWSI) Cut to Hold at Jefferies.
Whole Foods Market Inc. (NASDAQ: WFMI) Raised to Buy at UBS.

JON C. OGG

Filed under: Analyst Calls Tagged: ADY, ATI, BPOP, BWA, CTCM, DGI, ERES, NOC, NVDA, RBS, SWSI, WFMI

Top 10 Analyst Upgrades & Downgrades (ATI, APOL, AUO, ABX, BWLD, EXPD, HAL, JCOM, NOK, MTN)

247wallst — Tue, 21 Apr 2009 11:51:15 +0000

These are the ten top analyst calls we have seen early this Tuesday morning with about two hours until the open:

Allegheny Tech (ATI) Cut to Sell at Citigroup.
Apollo Group (APOL) Started as Buy at Deutsche Bank.
AU Optronics (AUO) Raised to Outperform at Credit Suisse.
Barrick Gold (ABX) Raised to Overweight at Thomas Weisel.
Buffalo Wild Wings (BWLD) Started as Outperform at Oppenheimer.
Expeditors International (EXPD) Cut to Neutral at JPMorgan.
Halliburton (HAL) Cut to Neutral at JPMorgan.
j2 Global (JCOM) Cut to Hold at Jefferies.
Nokia (NOK) Started as Buy at Jefferies.
Vail Resorts (MTN) Cut to Market Perform at Wachovia.

Jon C. Ogg
April 21, 2009

Posted in Analyst Calls Tagged: ABX, APOL, ATI, AUO, BWLD, EXPD, HAL, JCOM, MTN, NOK

Stocks Which Doubled Market Performance (ATI, CMCSA, COH, FMCN, HPC, IPG, MICC, NEM, SNI, TIE, VMED)

247wallst — Tue, 28 Oct 2008 16:22:14 +0000

As you will see today’s gains of 10% and more on both the DJIA and the S&P 500 Index, we wanted to explore which stocks greatly outperformed the markets today. We’d note that it is rather odd to see that technology stocks measured by the NASDAQ were actually lagging the overall market today.

DJIA             9,065.12 (+889.35; +10.88%)
S&P500       940.51 (+91.59; +10.79%)
NASDAQ    1,649.47 (+143.57; +9.53%)

Below is a list of the stocks which outperformed by roughly double over the major index gains of the DJIA, S&P 500, and NASDAQ 100. These stocks posted gains of 20% or more on the day, and we’d note that this list would actually be much larger if we included the financial stocks and REIT Stocks which we backed out for obvious reasons:

STOCK & TICKER                                              CLOSE    CHANGE          Comment
ALLEGHENY TECH (NYSE: ATI)                      $23.36 +$4.78 (25.73%) Metals
COMCAST CORP (NASDAQ: CMCSA)             $16.96 +$3.34 (24.52%) Cable
COACH INC (NYSE: COH)                               $19.38 +$3.29 (20.45%) Apparel
FOCUS MEDIA HOLDING (NASDAQ: FMCN) $14.98 +$2.77 (22.69%) Advertising
HERCULES INC (NYSE: HPC)                         $16.98 +$3.62 (27.10%) Chemicals
INTERPUBLIC GROUP (NYSE: IPG)                $5.54 +$1.44 (35.12%) Advertising
MILLICOM INTL CELL (NASDAQ: MICC)       $32.23 +$5.72 (21.58%) Int’l Wireless
NEWMONT MINING (NYSE: NEM)                   $26.47 +$4.93 (22.89%) Metals (Gold)
SCRIPPS NETWORKS (NYSE: SNI)                $26.16 +$4.75 (22.19%) Media
TITANIUM METALS CORP (NYSE: TIE)          $8.14 +$1.42 (21.13%) Metals
VIRGIN MEDIA INC (NASDAQ: VMED)             $5.25 +$1.26 (31.58%) UK Cable/Telecom

Jon C. Ogg
October 28, 2008

Posted in HI/LOW, Index Tagged: ATI, CMCSA, COH, FMCN, HPC, IPG, MICC, NEM, SNI, TIE, VMED

Top Pre-Market Analyst Downgrades (ATI, BIDU, DISCA, FHN, JNS, NOV, PTEC, RSH, SIGM, VRGY)

247wallst — Fri, 24 Oct 2008 07:03:24 +0000

These are some of the top pre-market analyst downgrades we are seeing this Friday-crash morning:

Allegheny Tech (ATI) Cut to Hold at Deutsche Bank.
Baidu.com (BIDU) Target Cut to $260 from $350 at Goldman Sachs.
Discovery Communications (DISCA) Cut to Underweight at JPMorgan.
First Horizon National (FHN) Cut to Neutral at Goldman Sachs.
Janus Capital (JNS) Cut to Underperform at FBR.
National Oilwell Varco (NOV) Cut to Neutral at JPMorgan.
Phoenix Tech (PTEC) Cut to Buy from Strong Buy at Needham.
Radio Shack (RSH) Cut to Neutral at Goldman Sachs.
Sigma Designs (SIGM) Cut to Hold at Deutsche Bank.
Verigy (VRGY) Cut to Underperform at Oppenheimer.

Jon C. Ogg
October 24, 2008

Posted in Analyst Calls Tagged: ATI, BIDU, DISCA, FHN, JNS, NOV, PTEC, RSH, SIGM, VRGY

The 52-Week Low Club 7/25/2008 (SSP)(MNI)(CVG)(ATI)(CROX)(AFFX)

247wallst — Fri, 25 Jul 2008 15:49:35 +0000

Scripps (SSP) Newspaper stock takes big hit on earnings. Falls to $7.17 from 52-week high of $147.78.

McClatchy Newspapers (MNI) Another newspaper company with problems. Sells down to $4.30 from 52-week high of $26.43.

Convergys (CVG) Still dropping after downgrade, to $11.77 against 52-week high of $20.

Allegheny Technologies (ATI) Still dropping after rough earnings. Bottoms at $45.03 from 52-week high of $115.55.

Crocs (CROX) Takes tremendous beating on missing numbers. Plunges to $4.72 from 52-week high $75.21.

Affymetrix (AFFX) Bad Q2 takes shares down to $7.25 from 52-week high of $29.29.

Douglas A. McIntyre

Top 10 Pre-Market Analyst Calls (ADBE, ATI, CAT, HOTT, MOT, NWAC, UAUA, URI, VRSN, VMED)

247wallst — Thu, 05 Jun 2008 06:47:16 +0000

These are ten of the analyst calls we are focusing on this Thursday morning:

Adobe Systems (NASDAQ: ADBE) cut to Neutral at Cowen & Co.
Allegheny Tech (NYSE: ATI) Cut to Neutral from Overweight at JPMorgan.
Caterpillar (NYSE: CAT) cut to Sell at UBS.
Hot Topic (NASDAQ: HOTT) Raised to Outperform from Market Perform at FBR.
Motorola (NYSE: MOT) Cut to Underperform from Perform at Oppenheimer.
Northwest Airlines (NASDAQ: NWAC) Raised to Overweight from Equalweight at Lehman.
UAL Corp. (NASDAQ: UAUA) raised to Overweight at Lehman Brothers
United Rentals (NYSE: URI) cut to Neutral at UBS.
VeriSign (NASDAQ: VRSN) Cut to Neutral from Overweight at JPMorgan.
Virgin Media (NASDAQ: VMED) Raised to Overweight at Morgan Stanley.

Jon C. Ogg
June 5, 2008

Top 10 Pre-Market Analyst Calls (ANF, ATI, BCS, DTV, LVLT, MFB, RFMD, QLTI, TTWO, TRLG)

247wallst — Thu, 24 Apr 2008 06:15:10 +0000

These are ten of the top calls we are seeing that could impact shares early this Thursday morning:

Abercrombie & Fitch (NYSE: ANF) started as Market Perform at Morgan Keegan.
Allegheny Tech (NYSE: ATI) Cut to Neutral From Buy at Goldman Sachs.
Barclays (NYSE: BCS) cut to Neutral at Collins Stewart.
DIRECTV (NYSE: DTV) downgraded to Market Perform at Bernstein.
Level 3 Communications (NASDAQ: LVLT) raised to Neutral from Sell at Merriman Curhan Ford.
Maidenform Brands (NYSE: MFB) Cut to Sell from Neutral at UBS.
RF Micro Device (NASDAQ: RFMD) raised to Buy at Jefferies.
QLTI Inc. (NASDAQ: QLTI) raised to Outperform at RBC Capital.
Take-Two Interactive (NASDAQ: TTWO) cut to Hold from Buy at Citigroup.
True Religion Apparel (NASDAQ: TRLG) Raised to Outperform at Morgan Keegan.

Jon C. Ogg
April 24, 2008