24/7 Wall St. » CPB

24/7 Wall St. Closing Bell — May 21, 2012 ( AVP, PBR, SWY, BA, BBY, CPB, HAST, KKD, LOW, TECD, TUDO, AZO, GES, RL, WSM, TTWO, FB, CBE, ETN, WPRT)

Paul Ausick — Mon, 21 May 2012 20:04:35 +0000

The three major US stock indexes opened higher this morning as what seems to be a declaration of love for Greece at the G8 summit meeting pushed down fears that the Greeks would leave the euro and throw all of the monetary union into chaos (our coverage here). There is also some reason to believe that China will take its foot off the brake and step on the accelerator to get its economy on a growth path again. The US dollar index fell today, now down -0.19% at 81.138. The GSCI commodity index is down fractionally at 629.50, with commodities mostly mixed today. WTI crude oil closed up -1.2% at $92.57/barrel, and Brent crude trades up 1.58% at $108.83/barrel. Natural gas fell sharply today, down -4.4% today at $2.62/thousand cubic feet. Gold settled down -0.2% today, at $1,588.70/ounce.

The unofficial closing bells put the DJIA up more than 134 points to 12,503.87 (1.09%), the NASDAQ rose nearly 68 points (2.46%) to 2,847.21, and the S&P 500 rose 1.60% or nearly 21 points to 1,316.00.

There were several analyst upgrades and downgrades today, including Avon Products Inc. (NYSE: AVP) cut to ‘sell’ at UBS; Petrobras (NYSE: PBR) raised to ‘buy’ at SocGen; Safeway Inc. (NYSE: SWY) raised to ‘buy’ at Citigroup; Boeing Co. (NYSE: BA) raised to ‘buy’ at Argus; and Best Buy Co. Inc. (NYSE: BBY) cut to ‘hold’ at BB&T.

Earnings reports since markets closed on Friday have led to some price changes as of the last half hour of trading today: Campbell Soup Co. (NYSE: CPB) is down -2.1% at $32.71; Hastings Entertainment Inc. (NASDAQ: HAST) is up 15.2% at $2.05; Krispy Kreme Doughnuts Inc. (NYSE: KKD) is up 12.3% at $6.75; Lowe’s Companies Inc. (NYSE: LOW) is down -10.1% at $25.60 (more coverage here); Tech Data Corp. (NASDAQ: TECD) is up 0.7% at $47.78; and Tudou Holdings Ltd. (NASDAQ: TUDO) is up 11.3% at $33.37.

Tomorrow we are scheduled to get earnings reports from Autozone Inc. (NYSE: AZO), Best Buy, Guess? Inc. (NYSE: GES), Ralph Lauren Corp. (NYSE: RL), Williams Sonoma Inc. (NYSE: WSM), and Take-Two Interactive Software Inc. (NASDAQ: TTWO).

Other standouts from today include the following stocks:

Facebook Inc. (NASDAQ: FB) is down -11% at $34.03. Following Friday’s massively-hyped IPO and the CEO’s weekend wedding, a falling share price was probably inevitable. More coverage here.

Cooper Industries plc (NYSE: CBE) is up 25.2% at $69.96 after posting a new 52-week high this morning of $70.97. The company is being acquired by Eaton Corp. (NYSE: ETN) for $11.8 billion. More coverage here.

Westport Innovations Inc. (NASDAQ: WPRT) is up 12% at $26.57. The natural gas engine maker has a deal with Volvo for a new truck engine.

Stay tuned for Tuesday. Atlanta Fed President Dennis Lockhart is giving a speech. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Existing home sales
10:00 a.m. – Richmond Fed manufacturing index
11:30 a.m. – 4-week bill auction
1:00 p.m. – 2-year note auction

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AVP, AZO, BA, BBY, CBE, CPB, ETN, FB, GES, HAST, KKD, LOW, PBR, RL, SWY, TECD, TTWO, TUDO, WPRT, WSM

Investors Seeking Defensive Stocks Where 3% to Over 5% Dividends Rule!

Administrator — Mon, 14 May 2012 17:14:54 +0000

A stock market that sells off eight of nine days is not a good market. Even the Facebook IPO is being viewed as a one-off item rather than a systemic item which will make the market stronger. With “Sell in May and go away!” remaining prevalent and with Europe in meltdown as Asia slows, the big question is where to hide. Some investors just refuse to accept the floor-level rates of CDs and Treasury bills and Treasury notes, so they go hide out in the defensive stocks like tobacco, consumer staples, basic level food, utilities, big-pharma, and maybe even those high-yields in telecom. This is a market where defensive stocks should rule the roost.

People are going to buy Coke and Pepsi, most likely, in almost any economy. Pepsico, Inc. (NYSE: PEP) is actually up 0.6% at $67.23 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.6% at $76.95 against a 52-week high of $77.82. With yields of about 3% on average, these pay about the same as the 30-Year Treasury’s long-bond. The beer segment remains uncorrelated to defensive stocks as it did last week (in part due to currencies): Anheuser-Busch InBev SA (NYSE: BUD) is down by 0.7% at $71.43 and Molson Coors Brewing Company (NYSE: TAP) is down 1.2% at $40.81. Even the best water utility in America via American Water Works Company, Inc. (NYSE: AWK) is down another 1% $33.99 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive. You gotta eat, right? McDonald’s Corporation (NYSE: MCD) is down almost 0.4% at $91.55 and getting further and further away from that $102.22 all-time high recently seen. The rest of the defensive food segment is up to mixed as food is defensive and with dividends:

Kraft Foods Inc. (NYSE: KFT) is up 0.4% at $39.20 with a 3% yield that challenges the long-bond;
ConAgra Foods, Inc. (NYSE: CAG) is down 0.2% at $25.67 with a 3.7% yield that beats the long-bond;
Campbell Soup Co. (NYSE: CPB) is up 0.25% at $34.49 with a 3.4% yield that beats the long-bond;
Hormel Foods Corporation (NYSE: HRL) is down only 0.1% at $29.08 but its 2.1% yield is ‘only’ paying what the 10-year has been paying recently.

Smoking has those nice 5%-plus yields for the defensive tobacco sector: Altria Group Inc. (NYSE: MO) is down only 0.1% at $31.75 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down 0.5% at $16.73; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.41 against a high of $42.81.

Diapers, toothpaste, deodorant, and shaving… consumer products are acting defensive: Procter & Gamble Co. (NYSE: PG) is down only 0.3% at $63.50 with a 3.5% yield; Kimberly-Clark Corporation (NYSE: KMB) is up by 0.3% at $79.62 with a 3.7% yield; Colgate-Palmolive Co. (NYSE: CL) is down 0.1% at $99.20 but it only pays about 2.5% for a dividend yield.

Drug and medical is mixed to positive: Merck & Co. Inc. (NYSE: MRK) is up by over 0.8% at $38.35 with its 4.4% yield; Pfizer Inc. (NYSE: PFE) is down only $0.01 at $22.64 with its 3.9% yield; and Johnson & Johnson (NYSE: JNJ) is down 0.5% at $64.00 with its 3.8% yield.

Those smartphones and telephones are not acting defensive at all today with Verizon Communications Inc. (NYSE: VZ) down 0.9% at $40.80 with its 5% yield and with AT&T, Inc. (NYSE: T) down 0.7% at $33.36 with a 5.4% yield.

Some investors are willing to suffer from the near-zero return of Treasuries, while others are going to try to look for the safest of stocks to seek safe and steady dividends. The DJIA is down 0.7% and the S&P 500 was down 0.6% at last look. Both are actually much better than what we were looking at just two hours or so ago.

JON C. OGG

Filed under: Defensive Stocks, Dividend Tagged: AWK, BUD, CAG, CL, CPB, HRL, JNJ, KFT, KMB, KO, MCD, MO, MRK, PEP, PFE, PG, RAI, T, TAP, VGR, VZ

The Market Where Defensive Shares Are Working Again (PEP, KO, BUD, TAP, AWK, MCD, KFT, CAG, CPB, HRL, MO, VGR, RAI, PG, KMB, CL, MRK, PFE, JNJ, T, VZ)

Administrator — Tue, 08 May 2012 16:07:03 +0000

Blame whatever you want. A weaker U.S. economy, a weakening and flailing Europe, a move to socialism in France and Greece, a weaker BRIC and emerging market story, commodity prices and on and on… Commodity prices and their tracking shares are getting hosed today. Why does the “Sell in May and go away!” profile often coincide with sell-offs so well?

After the weakness in the broad market has the DJIA down 140 points (or -1.1%) and the S&P 500 Index down 15 points or 1.1%, it turns out that most of the defensive stock sector leaders are holding up far better than the broad market in our go-to defensive stock portfolio. We have taken a look at each of these with share price snapshots right before Noon EST.

No matter what, you gotta drink! Pepsico, Inc. (NYSE: PEP) is down 0.5% at $66.28 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.4% at $76.97 against a 52-week high of $77.82. With yields of about 3% on average, these are now challenging the 30-Year Treasury yields. The beer segment is not acting defensive as it should, perhaps because they are foreign issues now with more currency risks: Anheuser-Busch InBev SA (NYSE: BUD) and Molson Coors Brewing Company (NYSE: TAP) are not acting very defensive with price corrections of 3% and 2$ respectively.

Perhaps the most defensive you can get is water, and the top water utility is American Water Works Company, Inc. (NYSE: AWK) with a premium valuation. This water leader is down 0.8% at $33.73 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive, although a drop of 1.5% in McDonald’s Corporation (NYSE: MCD) to $94.10 is causing some added stress in what was the darling of the DJIA in 2011. The rest of the defensive food segment seems to be less damaged when you evaluate the moves: Kraft Foods Inc. (NYSE: KFT) is down only 0.4% at $39.11; ConAgra Foods, Inc. (NYSE: CAG) is down 0.7% at $25.52; Campbell Soup Co. (NYSE: CPB) is down only 0.3% at $33.97; and Hormel Foods Corporation (NYSE: HRL) is down only 1 penny at $28.92 as the world is getting excited about Spam again.

Smoking is defensive again and the tobacco stocks are holding up much better than the broad market with those 5% and higher dividends: Altria Group Inc. (NYSE: MO) is down only $0.3% at $32.10 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down only 0.2% at $16.88; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.18 against a high of $42.81.

Shaving, diapers, toilet paper, and other consumer products are acting defensive with some gains on a weak day. Procter & Gamble Co. (NYSE: PG) is trading up $0.11 at $64.36 and Kimberly-Clark Corporation (NYSE: KMB) is up $0.08 at $79.08 with KMB challenging the 52-week high. Colgate-Palmolive Co. (NYSE: CL) is down ‘only’ 0.5% at $99.10 against a 52-week high of $100.81.

Drug and medical is holding up on the consumer end with losses look far less than the broader market: Merck & Co. Inc. (NYSE: MRK) is down 0.35% at $38.40; Pfizer Inc. (NYSE: PFE) is down 0.3% at $22.38; and Johnson & Johnson (NYSE: JNJ) is down the least with a drop of 0.2% at $64.65 against a 52-week high of $68.05.

Those smartphones and telephones are somewhat defensive, and those 5%-plus yields sure shield investors who are worried about chasing the hottest growth stocks. Verizon Communications Inc. (NYSE: VZ) is down only 1-penny at $40.52 with a 5% dividend yield and AT&T, Inc. (NYSE: T) is actually up 0.2% at $33.08 with a yield of about 5.4%.

When investors want safety and when the Treasury yield is so low on the longer-term Treasury market, many investors turn to the safety of the higher dividends and safer stocks that are defensive. Greece and the rest of PIIGS may fall again, but the logic is that U.S. consumers still have to eat, drink, shave, put on deodorant, and tend to stick with their core vices as best as they can.

JON C. OGG

Filed under: Consumer Goods, Defensive Stocks, Dividend, Drug companies, Food, Telecom, Tobacco Tagged: AWK, BUD, CAG, CL, CPB, HRL, JNJ, KFT, KMB, KO, MCD, MO, MRK, PEP, PFE, PG, RAI, T, TAP, VGR, VZ

24/7 Wall St. Closing Bell (CHK, WYN, CMCSA, RL, DELL, CEG, ENB, SPWR, HNZ, CPB, DMD, BDCO, CTIC, GILD, SCON)

Paul Ausick — Fri, 17 Feb 2012 21:06:23 +0000

US stocks opened mixed this morning, with the Nasdaq opening lower than both the DJIA and the S&P 500. The Nasdaq briefly crossed into positive territory this morning, but has traded lower otherwise. There was no further news from Europe today, and the dollar traded weaker against both the euro and the British pound. Most commodities traded higher on the weaker dollar. Crude oil finished the day mixed, with WTI up 1.17% at $103.51/barrel and Brent crude down -0.46% at $119.56/barrel. Gold settled at $1,725.90, down -0.1%, and flat for the week.

The unofficial closing bells put the DJIA up nearly 46 points to 12,949.95 (0.36%), the NASDAQ fell more than 8 points (-0.27%) to 2,951.78, and the S&P 500 rose 0.23% or more than 3 points to 1,361.22.

There were several analyst upgrades and downgrades today, including Chesapeake Energy Corp. (NYSE: CHK) raised to ‘buy’ at Stifel Nicolaus; Wynn Resorts Ltd. (NYSE: WYN) reiterated as ‘outperform’ with a target price of $145 at Credit Suisse; Comcast Corp. (NASDAQ: CMCSA) cut to ‘hold’ at Argus; Ralph Lauren Corp. (NYSE: RL) raised to ‘buy’ with a price target of $202 at Argus; and Dell Inc. (NASDAQ: DELL) cut to ‘neutral’ at Baird.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Constellation Energy Group Inc. (NYSE: CEG) is down -0.38% at $36.53 (more coverage here); Enbridge Inc. (NYSE: ENB) is down -3.9% at $37.86; SunPower Corp. (NASDAQ: SPWR) is up 11.6% at $8.35 ;(more coverage here); H.J. Heinz Co. (NYSE: HNZ) is up 4.3% at $54.35; and Campbell Soup Co. (NYSE: CPB) is up 2.6% at $32.90 (more coverage here).

Other standouts from today include the following stocks:

Demand Media Inc. (NYSE: DMD) is up nearly 32% at $7.83. The Internet media company reported better-than-expected earnings last night.

Blue Dolphin Energy Co. (NASDAQ: BDCO) is up more than 25% at $10.87 after posting a new high of $11.60 earlier today. The pipeline and oil & gas producer has no news, but crude prices are rising today and Blue Dolphin is likely thought of as an acquisition target.

Cell Therapeutics Inc. (NASDAQ: CTIC) is up 23% at $1.37. The drug maker received a positive opinion for approval of its non-Hodgkin lymphoma drug from a European regulator.

Gilead Sciences Inc. (NASDAQ: GILD) is down nearly -15% at $46.74. The drug maker reported a setback on its hepatitis C trials. More coverage here and here.

Superconductor Technologies Inc. (NASDAQ: SCON) is down nearly -18% at $1.03 after posting a new 52-week low of $0.90 earlier today. The superconductor materials company completed a private placement of 4.6 million shares at $1.05/share. We have more coverage here.

US markets are closed Monday in observance of the President’s Day holiday.

Stay tuned for Tuesday. We have noted the following events on the schedule (all times Eastern):

11:30 a.m. – 6-month bill auction
1:00 p.m. – 2-year note auction

Have a great holiday weekend.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: BDCO, CEG, CHK, CMCSA, CPB, CTIC, DELL, DMD, ENB, GILD, HNZ, RL, SCON, SPWR, WYN

Campbell’s, Heinz is Tale of Contrasts (CPB, HNZ)

Paul Ausick — Fri, 17 Feb 2012 12:59:03 +0000

Two major food companies reported quarterly earnings this morning, and the differences between the two are notable. Campbell Soup Co. (NYSE: CPB) reported second quarter EPS of $0.64 on revenue of $2.11 billion and H.J. Heinz Co. (NYSE: HNZ) reported its third quarter adjusted EPS of $0.95 on revenue of $2.92 billion.

The consensus estimate on Campbell’s called for EPS of $0.62 on sales of $2.12 billion. Net sales fell -1% year-over-year, primarily due to promotional pricing. Campbell’s reaffirmed its fiscal year guidance of sales growth up to 2% and adjusted earnings before taxes down -7% to -9%. The company also expects adjusted EPS to be -5% to -7% lower year-over-year, with adjusted EPS coming in at $2.35-$2.42, compared with fiscal year 2011 EPS of $2.54. The consensus estimate for full-year EPS is $2.36.

At Heinz, adjusted EPS of $0.95 clobbered the consensus estimate of $0.86, and revenue of $2.92 billion also beat estimates of $2.89 billion. Sales grew 7% year-over-year, due to growth in emerging markets and better sales of the company’s most popular brands. Heinz narrowed its reported EPS range for the full year to $3.32-$3.34, excluding special items. The company expects 7%-8% sales growth on a constant currency basis.

Campbell’s is trading up about 1.4% in the pre-market, at $32.50 in a 52-week range of $29.69-$35.66. Heinz is up 2.5% at $53.40 in a 52-week range of $46.99-$55.00.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: CPB, HNZ

Top Analyst Upgrades & Downgrades (ACI, STD, BAC, BBBY, BIIB, BMRN, CPB, CBOE, EP, GPS, GDI, GIS, HNZ, KMI, KMP, KFT, NFLX, PRA, S)

Administrator — Tue, 14 Feb 2012 13:11:57 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Tuesday morning.

Arch Coal Inc. (NYSE: ACI) Cut to Hold at Argus.
Banco Santander (NYSE: STD) Raised to Hold at Societe Generale.
Bank of America Corporation (NYSE: BAC) Cut to Neutral at Citigroup.
Bed Bath & Beyond (NASDAQ: BBBY) Cut to Neutral at Citigroup.
Biogen Idec Inc. (NASDAQ: BIIB) Reiterated Buy but raised target to $140 at Argus; Started as Market Perform at Wells Fargo.
BioMarin Pharmaceutical Inc. (NASDAQ: BRMN) Cut to Underperform as Bear of the Day at Zacks. Campbell Soup Co. (NYSE: CPB) Started as Underweight at Morgan Stanley.
CBOE Holdings, Inc. (NASDAQ: CBOE) Cut to Neutral at Credit Suisse.
El Paso Corporation (NYSE: EP) Started as Hold at Deutsche Bank.
Gap Inc. (NYSE: GPS) Raised to Buy at Citigroup.
Gardner Denver, Inc. (NYSE: GDI) named as Value Stock of the Day at Zacks.
General Mills (NYSE: GIS) Started as Overweight at Morgan Stanley.
H.J. Heinz Company (NYSE: HNZ) Started as Underweight at Morgan Stanley.
Kinder Morgan, Inc. (NYSE: KMI) Raised to Buy at Deutsche Bank.
Kinder Morgan Energy Partners, L.P. (NYSE: KMP) Raised to Buy at Deutsche Bank.
Kraft Foods Inc. (NYSE: KFT) Started as Overweight at Morgan Stanley.
Netflix, Inc. (NASDAQ: NFLX) Reiterated Outperform and raised target to $140 at Credit Suisse.
ProAssurance Corporation (NYSE: PRA) Raised to Outperform as Bull of the Day at Zacks.
Sprint Nextel Corporation (NYSE: S) Reiterated Hold but widened out loss estimates by Argus.

If you enjoyed the top analyst upgrades and downgrades, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: ACI, BAC, BBBY, BIIB, BMRN, CBOE, CPB, EP, GDI, GIS, GPS, HNZ, KFT, KMI, KMP, NFLX, PRA, S, STD

Top Earnings Previews For The Week Ahead (CRL, CIM, NAT, RAX, AVP, GT, MET, OMC, ZNGA, A, NVDA, PCG, DVN, DE, NTAP, CMCSA, APA, DTV, WM, JWN, AMAT, DUK, HNZ, CPB)

Administrator — Sun, 12 Feb 2012 13:22:53 +0000

Earnings season is starting to slow down a bit but we will still have some sector-moving earnings reports from major companies. 24/7 Wall St. has prepared earnings previews for the following companies:

Charles River Laboratories International Inc. (NYSE: CRL); Chimera Investment Corporation (NYSE: CIM); Nordic American Tankers Ltd. (NYSE: NAT); Rackspace Hosting Inc. (NYSE: RAX); Avon Products, Inc. (NYSE: AVP); Goodyear Tire & Rubber Co. (NYSE: GT); MetLife Inc. (NYSE: MET); Omnicom Group Inc. (NYSE: OMC); Zynga Inc. (NASDAQ: ZNGA); Agilent Technologies, Inc. (NYSE: A); NVIDIA Corporation (NASDAQ: NVDA); PG&E Corp. (NYSE: PCG); Devon Energy Corporation (NYSE: DVN); Deere & Co. (NYSE: DE); NetApp, Inc. (NASDAQ: NTAP); Comcast Corporation (NASDAQ: CMCSA); Apache Corporation (NYSE: APA); DIRECTV, Inc. (NASDAQ: DTV); Waste Management, Inc. (NYSE: WM); Nordstrom Inc. (NYSE: JWN); Applied Materials Inc. (NASDAQ: AMAT); Duke Energy Corporation (NYSE: DUK); H.J. Heinz Company (NYSE: HNZ); and Campbell Soup Company (NYSE: CPB).

Earnings estimates are from Thomson Reuters and the dates may change by the companies. More detailed previews will be available each day this coming week with much more color and trading information.

MONDAY, FEB 13

Charles River Laboratories International Inc. (NYSE: CRL) $0.56 EPS

Chimera Investment Corporation (NYSE: CIM) $0.11 EPS

Nordic American Tankers Ltd. (NYSE: NAT) -$0.29 EPS… with losses expected this year, we will be watching for any dividend news after the company sold 5.5 million shares last month.

Rackspace Hosting Inc. (NYSE: RAX) $0.15 on $281 million in sales; this one still trades at close to 60-times 2012 expected earnings of $0.81 EPS.

TUESDAY, FEB 14

Avon Products, Inc. (NYSE: AVP) $0.51 EPS on $3.11 billion; a serial disappointment in shares, but turnaround investors have hopes that the bar is set extremely low. Earnings will prove if there is a value story here or just more of a value trap.

Goodyear Tire & Rubber Co. (NYSE: GT) $0.20 EPS on $5.88 billion in sales; this is still a long-term turnaround story valued at less than 7-times expected earnings.

MetLife Inc. (NYSE: MET) $1.24 EPS on $16.81 billion in revenues; shares are mid-way between the 52-week high and 52-week low.

Omnicom Group Inc. (NYSE: OMC) $0.95 EPS on $3.8 billion in sales.

Zynga Inc. (NASDAQ: ZNGA) estimates are not yet available for its first quarterly earnings report. Shares are now back over $13.00 due to the Facebook-effect on anything tied to social media.

Don’t forget about Valentine’s Day….

Filed under: 24/7 Wall St. Wire, Calendar, Earnings, The Week Tagged: A, AMAT, APA, AVP, CIM, CMCSA, CPB, CRL, DE, DTV, DUK, DVN, GT, HNZ, JWN, MET, NAT, NTAP, NVDA, OMC, PCG, RAX, WM, ZNGA

Ten Cheap Products Making American Companies Billions

247wallst — Mon, 30 Jan 2012 11:53:39 +0000

Just because certain products have a low price tag does not mean they cannot sell for billions of dollars. In fact, some of the cheapest products make the most money for their companies. 24/7 Wall St. identified some of the best-selling consumer goods and food products costing under $5 and the companies that make them. The cheapest and most successful products are sold by companies with the strongest and oldest brands that spend the most on advertising.

Read the Ten Cheap Products Making American Companies Billions

All of the companies that make the most money from selling inexpensive items have exceptionally strong brands. They are highly recognizable and held in high regard. Coca-Cola, which makes billions of dollars off its trademark drink Coke, is the most valuable brand in the world, according to brand valuation company Interbrand. According to Brand Z, McDonald’s, producer of the world’s favorite french fries, is the most valuable brand. Other brands, such as Cheerios, Campbell’s, and Starbucks, are also instantly recognizable.

These products have such strong brands partly because their parent companies spend huge sums of money on advertising. In 2011, Procter & Gamble, maker of Gillette razors, spent $9.3 billion on ads for all products — 11.3% of its total sales. This amount increases substantially each year, reflecting the lengths companies must go to preserve market share. Ian Cook, chief executive of Colgate-Palmolive, recently promised “increased advertising support behind many new and existing Colgate products” in 2012 to protect its global standing. The company said it had increased advertising spending in the fourth quarter to $428 million, up 5% from one year ago.

Additionally, these brands benefit from having been around for years and having existed in the public conscious a very long time. Products such as Coke, Colgate toothpaste, and Dole bananas have been around since the 19th century. Campbell’s soup and Cheerios have been household staples since the middle of the 20th century. Consumers have grown to trust the brands and expect a certain level of quality.

24/7 Wall St. reviewed the 500 largest companies by sales to identify the ones that focus on inexpensive consumer goods and low-priced food products. We then looked at the most inexpensive products sold for less than $5 and hold the highest market share. These are the cheapest products making American companies billions.

Filed under: 24/7 Wall St. Wire, Special Report Tagged: CL, CPB, DOLE, GIS, KFT, KO, MCD, PEP, PG, SBUX

24/7 Wall St. Closing Bell (MSFT, GILD, NFLX, AMGN, WYNN, CREE, LDK, CPB, HRL, STP, BRCD, FRO, ALU, GRPN, FMCN, ROYL)

Paul Ausick — Tue, 22 Nov 2011 21:06:52 +0000

Stocks opened a bit lower this morning, but almost immediately turned around without being able to break through the opening numbers. Revised third-quarter US GDP numbers were worse than expected, falling to a revised growth rate of 2%, compared with estimates that the growth rate would remain flat at 2.5%. Commodities, gold, and oil all rose in the morning, but by afternoon sentiment had shifted toward the negative. Gold is down slightly to $1,675.40, and crude oil is up slightly to $97.71/barrel. Even references to more easing from the Federal Reserve’s Open Market Committee when it released the minutes of its last meeting didn’t move markets much one way or the other.

The unofficial closing bells put the DJIA down more than 53 points to 11,493.88 (-0.46%), the NASDAQ fell nearly 2 points (-0.07%) to 2,521.28, and the S&P 500 fell about -0.41% or nearly 5 points to 1,188.05.

There were several analyst upgrades and downgrades today, including Microsoft Corp. (NASDAQ: MSFT) started as ‘hold’ at ThinkEquity. Other ratings actions included Gilead Sciences Inc. (NASDAQ: GILD) raised to ‘outperform’ at BMO and raised to buy at Citigroup; Netflix Inc. (NASDAQ: NFLX) re-initiated as ‘sell’ with a $60 price target at Canaccord Genuity; Amgen Inc. (NASDAQ: AMGN) cut to ‘market perform’ at BMO; Wynn Resorts Ltd. (NASDAQ: WYNN) cut to ‘neutral’ at Janney Capital; and Cree Inc. (NASDAQ: CREE) maintained as ‘buy’ with $33 target price at Canaccord Genuity.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: LDK Solar Co. Inc. (NYSE: LDK) is up nearly 7.5%, at $3.04; Campbell Soup Co. (NYSE: CPB) is down about -5.6%, at $31.74; Hormel Foods Corp. (NYSE: HRL) is a fraction at $28.82; Suntech Power Holdings Co., Ltd. (NYSE: STP) is up more than 17%, at $2.62; and Brocade Communications Systems, Inc. (NASDAQ: BRCD) is up more than 13%, at $5.08.

Be sure to check our story on the dismal showing of the Chinese solar stocks and then try to figure out why LDK and STP shares are up today. Investors have got to believe the stocks have hit bottom. Perhaps, but LDK is pretty shaky, regardless of investors’ hopes.

Several other standouts from today are as follows…

Frontline Ltd. (NYSE: FRO) is down nearly -41%, at $3.07, after posting a new 52-week low of $2.97 earlier today. The company reported awful earnings and said that it would either need to restructure or go out of business.

Alcatel-Lucent (NYSE: ALU) is down nearly -15%, at $1.59, a penny more than a new 52-week low set earlier today. The company is dogged by liquidity and cash flow concerns.

Groupon, Inc. (NASDAQ: GRPN) is down nearly -13.5%, at $20.40, after posting a new post-IPO low of $20.03 earlier today. Apparently investors have figured out that there are other companies competing hard in the same space and that there are few barriers to keep more competitors out.

Focus Media Holding Ltd. (NASDAQ: FMCN) is up more than 15%, at $17.80. The company was torched yesterday by allegations of mis-statements related its reporting. The CEO disputed yesterday’s allegations in a conference call today, and reiterated the company’s intention to continue buying back shares.

Royale Energy Inc. (NASDAQ: ROYL) is up nearly 12%, at $3.27. The company announced a new gas well flowing at 3 million cubic feet/day and said that it would begin selling the gas within 2 weeks.

Stay tuned for Wednesday. Here’s a list of other noteworthy events scheduled for tomorrow(all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
8:30 a.m. – Durable goods orders
8:30 a.m. – Initial unemployment benefits claims
9:55 a.m. – Reuters/University of Michigan consumer sentiment index
10:30 a.m. – EIA weekly natural gas status report (moved up from Thursday)
11:00 a.m – EIA weekly petroleum status report

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: ALU, AMGN, BRCD, CPB, CREE, FMCN, FRO, GILD, GRPN, HRL, LDK, MSFT, NFLX, ROYL, STP, WYNN

Top Active Trader & Day Trader Alerts (BAC, CPB, CHS, FMCN, EGPT, HAR, HPQ, JACK, MDT, NFLX, SNDA)

Administrator — Tue, 22 Nov 2011 13:44:26 +0000

This may be a short and choppy week, but we have many bits of news for active traders and day traders this Tuesday morning. We have included news and given a summary of the moves in the following stocks this Tuesday: Bank of America Corporation (NYSE: BAC); Brocade Communications Systems Inc. (NASDAQ: BRCD); Campbell Soup Company (NYSE: CPB); Chico’s FAS, Inc. (NYSE: CHS); Focus Media Holding Ltd. (NASDAQ: FMCN); Market Vectors Egypt Index ETF (NYSE: EGPT); Harman International Industries Inc. (NYSE: HAR); Hewlett-Packard Co. (NYSE: HPQ); Jack in the Box Inc. (NASDAQ: JACK); Medtronic Inc. (NYSE: MDT); Netflix, Inc. (NASDAQ: NFLX); and Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA).

Bank of America Corporation (NYSE: BAC) is actually indicated higher this morning by over 1% at $5.57 despite reports that it has been warned by regulators to bolster its financial position.

Brocade Communications Systems Inc. (NASDAQ: BRCD) may have turned in a net loss after items and options, but non-GAAP earnings were $0.16 EPS and $550 million versus estimates of $0.14 EPS and $527.4 million. Shares were up 6% last night and the $4.48 close of Monday is still up 6.7% at $4.78 on Tuesday morning.

Campbell Soup Company (NYSE: CPB) reported that normalized earnings were down nominally from a year earlier at $0.82 EPS and that sales fell 1% to $2.16 billion; estimates were $0.79 EPS on $2.2 billion in sales.

Chico’s FAS, Inc. (NYSE: CHS) reported that its third-quarter earnings was $0.16 EPS but after $0.02 in acquisition costs, while estimates were $0.20 EPS. Sales were $538.5 million versus estimates of $548.5 million. Same-store sales in the quarter rose 3.7% versus 5% or more expected and it turned in another $0.05 dividend for a 1.8% or so dividend yield.

Focus Media Holding Ltd. (NASDAQ: FMCN) was crushed yesterday with roughly a 40% drop after short seller Muddy Waters raised concerns about the company. The company has denied the allegations and said that the information provided was misrepresented. Shares are trading up 12% at $17.40 so far this morning, but this is a fluid situation and the “Muddy Waters” stocks tend to remain highly volatile for a period after a report of this sort is issued.

Market Vectors Egypt Index ETF (NYSE: EGPT) has not traded but trading on the Egyptian Exchange was halted after a 4.5% broad market drop due to continues protests and violence in Cairo after reports of dozens of deaths.

Harman International (NYSE: HAR) had its CEO featured on a Jim Cramer interview last night and Cramer said it is now getting to be a bargain at barely 10-times earnings with 20% growth possibilities. Zacks also named it the value stock of the day this morning.

Hewlett-Packard Co. (NYSE: HPQ) is now down 1% at $26.59 despite having been up almost 4% after earnings. Some wanted a better path to a return of growth but frankly the report and even the lower guidance should have been enough to quell at least some fears about the company.

Jack in the Box Inc. (NASDAQ: JACK) was up 4% in the after-hours on Monday after beating earnings estimates with higher same-store sales. Volume is very light and the stock is only indicated up 1% so far in early bird trading.

Medtronic Inc. (NYSE: MDT) has reported earnings of $0.84 EPS adjusted on $4.13 billion in sales; estimates were $0.82 EPS and $4.1 billion in sales. The medical devices giant has guided its fiscal year (April-2012) to $3.43 to $3.50 EPS versus estimates of $3.44 EPS.

Netflix, Inc. (NASDAQ: NFLX) had its secondary and placement offering announcement last night and now shares are getting hit all over again after a SELL rating was slapped on the stock. Netflix is trading down 5.2% at $70.60 in active trading.

Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) is getting acquired after receiving a “going private” letter a month ago. Monday’s ADS close in New York was $39.39 and the buyout price $41.35 per ADS.

JON C. OGG

Filed under: Pre-Market Activity, Trading Alert Tagged: BAC, CHS, CPB, EGPT, FMCN, HAR, HPQ, JACK, MDT, NFLX, SNDA