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"Fast Money" For Tuesday

Here are today’s picks and Monday’s results.

TODAY’S PICKS

Jeff Macke thought investors should buy the Retail HOLDRS (RTH). Open $99.75

Pete Najarian recommended shorting Countrywide Financial (CFC). Open $26.61

Guy Adami preferred to get short the whole DJIA by buying the Short Dow30 Proshares (DOG). Open $60.17

Eric Bolling liked streetTRACKS Gold Trust (GLD). Open $66.26

MONDAY’S RESULTS

Jeff Macke liked Callaway Golf (ELY). Open $17.72 Close $17.78 Gain $.06

Pete Najarian preferred Ivanhoe Mines (IVN). Open $12.46 Close $12.75 Gain $.29

Guy Adami said Hilton (HLT) is a buy. Open $43.91 Close $44.25 Gain $1.34

Tim Seymour recommended US Steel (X). $86.66 Close $87.72 Gain $1.06

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation week)

Adami= 13-11 Gain $25.11
Bolling= 9-10 Loss $15.29
John Najarian= 13-3 Gain $15.54
Macke= 20-13 Gain $6.96
Pete Najarian= 8-7 Gain $16.64
Seymore= 3-1 Gain $2.15
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29

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Sphere Added: Check It Out

I have added a great little item. Simply look for the “Sphere: Related Content” link after each post. A window will pop up giving you links to other posts on the net about the same topic as my post. It is a great way to see other commentary from other bloggers and from mainstream media.

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Monday’s 52 Week Lows

Bland day makes for a short list.

TMA Thornburg Mortgage
SNS The Steak n Shake Company
LEV Levitt Corp
INSP Infospace Inc
ILA Aquila Inc
FOOD Vaughan Foods Inc
ESE Esco Technologies Inc
COSI Cosi Inc

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Wal-Mart Earnings: What To Look For

Wal-Mart (WMT) releases earnings before the bell Tuesday and there really is only one thing I want to know.

First the “skinny” as they say. First Call estimates are $0.77 EPS and $92.75 Billion in revenues. Next quarter’s expectations are $0.68 EPS and $92.25 Billion, and fiscal January 2008 estimates are $3.16 EPS and $378.3 Billion revenues. July same store sales were released last week so much of the actual sales and assumed earnings data should already be reflected in the price of shares.

What to look for? How many shares did CEO Lee Scott and Co. repurchase since the $15 billion buyback was announced in June? I had called repeatedly for Lee to be let go to “pursue other opportunities” until the shareholders meeting at which the buyback and the store growth plans were announced. Now I am in a holding pattern.

So, the thing that needs to be known now is, are they following through with the plans? Wal-Mart stock sits about where it was 5 years ago so there will be no excuse about “value” and Wal-Mart sits on $6.5 billion in cash so the funds are there. I would like to see at least a billion dollars (about 22 million shares) in repurchases since the buyback was announced. Anything less would be very disappointing and one would have to wonder if the plans were just announced to buy Lee Scott more time. In short, Lee now has no excuses to be doing anything but shareholder friendly actions.

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Harley Davidson: "Below MSRP"

We took a quick vacation this past weekend and brought the kids to Storyland in Glenn, NH. If you’ve never done it and have pre-teen kids, do it, it is a wonderful place.

Anyway, on the way back home we stopped in Meredith, NH to have lunch at Hart’s Turkey Farm (another great place). Now, for those of you not familiar with the NH geography, Meredith is right next to Laconia, which is essentially the center of the Harley universe in New England. Laconia is famous for two things, “Bike Week” and well, “Bike Week”. My sons and I sauntered over to the massive Harley Davidson (HOG) dealership for a stroll and to look at all the bikes. One thing immediately struck me. Evey single bike in the store, almost 100 had the same tag on it “Priced Below MSRP”.

I casually asked a salesperson, “What is going on, why is everything on sale”? He replied “can’t move ’em and the new models are coming out”. HMMMM

When I asked why he though they were not selling he replied that most people had been upgrading the last few years with two things, house money (home equity) or Harley financing which is now getting harder to get and much more expensive. He said that because of this people are either sticking with the bikes they have much longer and those who are buying, are buying cheaper, lower margin bikes. For instance, a bike that was selling for $10,000 last year was being offered below $8,000 yesterday. Both of these are very bad for Harley.

When I asked what would happen if he can’t move the old models when the new ones come out, he said that they will just cut back the new model orders. Even worse for Harley.

Earlier this year when shares were at $70 I recommended waiting until they reached the mid $50’s to buy. Based on my weekend visit, they may go lower still. This is a great company that makes a one of a kind product, but, people are not buying it now and that will hurt. I think we may see share prices in the $40’s before the year is out.

Be patient and you may get a fantastic buy, later…

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Lampert Gobbling Up Sears Shares

Sears Holdings (SHLD)chairman Eddie Lampert was a busy buyer last month Sears said it spent $800 million in the last month buying back stock and said its board approved an additional $1.5 billion repurchase plan. The company bought back $1.5 billion in stock during the second quarter at an average price of $153.

A $3 billion total buyback, big deal. Well, it is really. $3 billion represent 15% of Sears Holdings current market cap and that is a very big deal. Also, unlike the massive buyback announced at Home Depot (HD), Sears can accomplish it’s plans with the cash it has sitting in the bank. There will be no need to tap currently the restrictive equity markets for cash. We can be as certain as we can be that these shares will be repurchased. Based on Lampert’s history, it will be sooner rather than later.

Retail is hurting currently and Sears share price is suffering. But, ever the value investor, Lampert is taking Buffett’s advice and “buying fear”. Eventually thing will turn around and Lampert is using this weakness to buy shares at a discount.

It is important to note that last fall and winter when shares were in the $180’s Lampert sat on his hands and did not repurchase shares. Now that prices have dropped, he is jumping in big time.

Have patience shareholders.

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Last Weeks Insider Buys

Let’s see who is buying during the carnage

1- Equity One (EQY)= $15,200,000

2- General Growth Properties (GGP)= $7,760,000

3- Biocryst Pharmaceuticals (BCRX)= $6,485,000

4- Resource Capital (RSO)= $6,020,000

5- NuStar Group Holdings (NSH) =$ 5,656,000

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Monday’s Upgrades and Downgrades

Here are this mornings analyst calls

UPGRADES

Sempra Energy SRE Deutsche Securities Hold » Buy
EarthLink ELNK CIBC Wrld Mkts Sector Underperform » Sector Perform
Innophos Holdings IPHS Bear Stearns Peer Perform » Outperform
Overseas Shipholding OSG Credit Suisse Neutral » Outperform
Textron TXT Credit Suisse Neutral » Outperform
Compass Minerals Intl CMP JP Morgan Neutral » Overweight
Sealed Air SEE Banc
of America Sec Neutral » Buy
Pactiv Corp PTV Banc of America Sec Neutral » Buy
CryptoLogic CRYP CIBC Wrld Mkts Sector Underperform » Sector Perform
CIT Group CIT CIBC Wrld Mkts Sector Perform » Sector Outperform
Energizer ENR Sun Trust Rbsn Humphrey Neutral » Buy

DOWNGRADES

Century Casinos CNTY Roth Capital Buy » Hold
Sirenza Micro SMDI CIBC Wrld Mkts Sector Outperform » Sector Perform
DR Horton DHI JP Morgan Overweight » Neutral
AMB Property AMB Citigroup Hold » Sell
ProLogis PLD Citigroup Hold » Sell
Hawaiian Electric HE Lehman Brothers Equal-weight » Underweight
Ruddick Corp RDK Friedman Billings Outperform » Mkt Perform

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"Fast Money" for Monday

Here are today’s picks and Friday’s results

Monday’s Picks

Jeff Macke liked Callaway Golf (ELY). Open $17.72

Pete Najarian preferred Ivanhoe Mines (IVN). Open $12.46

Guy Adami said Hilton (HLT) is a buy. Open $43.91

Tim Seymour recommended US Steel (X). $86.66

Friday’s Results

Jeff Macke liked Berkshire Hathaway (BRK) for Warren Buffet. Open $3,643

(a note: this pick will be treated as a $36.43 stock, otherwise any move in it will skew the tracking for Macke way off either up or down) Close $3,625 Loss $.18.

Pete Najarian recommended buying stock in NASDAQ (NDAQ). Open $32.56 Close $31.18 Loss $1.38

Guy Adami thought GlaxoSmithKline (GSK) is a buy. Open $52.45 Close $52.06 Loss $.39

Eric Bolling preferred Hewlett Packard (HPQ). $47.02 Close $47.21 Loss $.19

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation week)

Adami= 12-11 Gain $23.77
Bolling= 9-10 Loss $15.29
John Najarian= 13-3 Gain $15.54
Macke= 19-13 Gain $6.90
Pete Najarian= 7-7 Gain $16.33
Seymore= 2-1 Gain $1.09
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29

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Lead Paint Litigation Update

Here is the latest update on lead paint proceeding affecting Sherwin Williams (SHW) and NL Industires (NL)

From Jane Genova’s Law and More

This post is derived from LexisNexis Mealey’s Litigation Report on Lead, Volume 16, Issue # 10, August 2007. Since so many lead-litigation issues, including the ones associated to Chinese imports of children’s toys and trinkets, are emerging, I am going to focus this post only on the public nuisance class action ones. I will post on the other important issues later.

Documents associated with this litigation are available from LexisNexis Legal News, or by directly contacting James Cordrey, Legal Editor, James.cordrey@lexisnexis.com, 610-205-1125.

On behalf of readers, I want to thank Mr. Cordrey of LexisNexis for doing such a comprehensive job of tracking developments in lead litigation and providing these updates.

CALIFORNIA:

No surprise, it appears that the landmark April 4th contingency ruling by Judge Jack Komar in County of Santa Clara, et al. v Atlantic Richfield Co., et al. No. 1-00-CV-788657, Calif. Super, Santa Clara Co. isn’t going to go down without a fight from the plaintiff.

On June 29th, the California Association of Counties filed an amicus brief in the suit that had been filed against the former lead paint/pigment industry players by a number of CA counties. In that brief they contended that public nuisance actions provide a important function in maintaining the public health.

Specifically, the argument presented by the organizations is:

“Given the importance of public nuisance actions to address both large- and small-scale harms to the public, this court should reverse the trial court’s ruling, which would have the practical impact of significantly limiting or eliminating all together the ability of cities and counties to bring public nuisance actions.”

In addition, they contend that Judge Komar’s decision to abolish contingency fee agreements does not consider the unique aspects of People ex rel. Clancy v. Superior Court [1985] 39 Cal. 3d 740, 743 Shepardize. In that case, Clancy was disqualified based on the egregious, case-specific facts. As a result, the group concludes, the disqualification is not required under case law merely because financial assistance to the government has made the litigation economically feasible.

The economic argument being used is one of “realities” regarding resources. Specifically, the brief contends:

“Regardless of the number of public lawyers available to a public entity, it would be virtually impossible for any city or county in this state to match the resources at the disposal of Atlantic Richfield’s counsel and its 625 lawyers”

WISCONSIN:

Another no surprise is that the plaintiff in City of Milwaukee v. NL Industries Inc. No 01-CV-3066, Wis Cir., Milwaukee Co, filed a memo on July 12. That memo supported a motion to change the June 22 special verdict which found the NL Industries do not intentionally cause a public nuisance. The key argument is that the record lacks evidence to support that verdict.

Specifically, the city of Milwaukee contends that errors in they jury instructions warrant changing the verdict. It asks that NL Industries be found to have:

“intentionally caused the public nuisance in this case because NL knew, or was substantially certain, that its sales of – and conduct in – promoting lead paint and pigment were harming children and causing a public health threat.”

OHIO:

On August 1, the Ohio Supreme Court ruled that Governor Ted Strickland’s veto of a bill prohibiting public nuisance lawsuits against the former lead paint/pigment industry parties was invalid. That was because the 10-day waiting period under which the governor was permitted to take action had passed. State ex rel. The Ohio General Assembly, et al. v. Jennifer Brunner No. 07-0209, Ohio Sup.

The legal team representing Jennifer Brunner has 90 days from that decision to request a stay. If that stay is granted, then there could be a petition for a referendum to put the issue to voters

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Top Stories At Value Investing News

Here are the top stories for the week at one of my favorite sites, Value Investing News.

1- David Einhorn’s Analysis of St. Joe’s

2- Interview With Sardar Biglari

3- Note To Lampert: Let People Know About Land’s End Valueplays

4- Buybacks vs. Dividend Poll Results

5- Bruce Berkowitz

Please visit the site at here for more stories

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Wal-Mart 6 Month Results: Number Of Shoppers Rising

Half a year has gone by and Wal-Mart (WMT) released results yesterday.

26 week sales results at Wal-Mart stores are up 5.5%, Sam’s Clubs are up 7.1% and the International operations are up 16.2%. Total sales results are up 8% vs. 2006. Not bad at all.

At Wal-Mart stores grocery sales were once again stronger than general merchandise sales. Perishables led the increase in grocery, with solid performance in dairy and bakery, as well as pharmacy. Electronics continued to show solitore sales gains over last year, with strength in TVs, computers, digital cameras and video games.

At Sam’s Clubs sales have been driven by continued momentum with small business owners. Sales were driven by increases in average ticket. In addition to small business categories, other strengths included electronics, fresh food and grocery. As the month of August gets under way, the clubs are completing the transition from summer outdoor goods to a furniture gallery and back-to-college in many markets. A fall merchandise transition will begin in September.

Here is a small but very notable paragraph from the release “In comparable Wal-Mart stores, traffic was negative for the month. However, the trend improved for the third consecutive reporting period. The Central and West geographic regions of the Wal-Mart stores were strongest for the period.” Why is it so meaningful? It means people are beginning to go back to Wal-Mart to shop and that is very good news for shareholders. With all the unwarranted negative publicity they have endured the past three years, Wal-Mart became a dirty word. It would seem now that it is beginning to wear off and when push come to shove, people’s pocket book rules. Now that the image of Wal-Mart is slowly beginning to stand for “great prices on quality” rather than just “cheap”, this trend should continue.

Wal-Mart is also doing it’s usual masterful job with costs as “Fuel sales impacted the Sam’s Club sales figures for the four-week period ending August 3, 2007 by negative a 0.2 percentage point. Fuel sales had no impact on the total U.S. comparable store sales figures for the four-week period ending August 3, 2007.”

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Blockbuster: Now Can We Close The Stores?

Well, it seems Blockbuster (BBI) finally acknowledged the future. In a rumored $20 million deal, they are to acquire Movielink which is currently owned by several Hollywood studios.

Although one might ask Blockbuster, “what took so long?” Blockbusters is clearly the last one to this party. Cable companies like Cablevison (CVC) and Time Warner (TWC) have spent the last 3 years buiding video-on-demand services and signing up millions of customers. Apple (AAPL) has added movies to their iTunes service, Wal-Mart (WMT) opened a movies over the internet service, Amazon (AMZN) and Tivo (TIVO) launched the unBox and arch rival Netflix (NFLX) got into the download game in January.

Rather than hemorrhaging shareholder cash for the last two years, why wasn’t this deal done then? It has been rumored forever it seems. How much of a lead could Blockbuster have over it’s rivals had it not spent all this time trying to convince people they still want to go to the video store?

Will Blockbuster finally abandon the store model? They clearly do not have enough cash to continue on the current path and go in every direction. With almost 1,000 stores still around, there is still a ton of work to be done and as long as they have the stores cost around their neck, they can never truly compete with Netflix.

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Friday’s Upgrades / Downgrades

Late Thursday and early Friday analyst calls

UPGRADES

LSI Logic LSI Wedbush Morgan Sell » Hold
Omrix Biopharma OMRI Oppenheimer Neutral » Buy
Kinder Morgan Mgmt KMR Sanders Morris Harris Neutral » Buy
Kinder Morgan Prtnrs KMP Sanders Morris Harris Neutral » Buy
Deluxe DLX Longbow Sell » Neutral
Cincinnati Fincl CINF AG Edwards Hold » Buy
Automatic Data ADP AG Edwards Hold » Buy
Verint Systems VRNT Morgan Keegan Mkt Perform » Outperform
Emmis Comms EMMS Bear Stearns Underperform » Peer Perform
Novacea NOVC Bear Stearns Peer Perform » Outperform
Quebecor World IQW RBC Capital Mkts Underperform » Sector Perform
Frontier Oil FTO Caris & Company Average » Above Average
Occulogix OCCX Caris & Company Below Average » Average
Alon USA Energy ALJ Caris & Company Above Average » Buy
Forest Labs FRX FTN Midwest Sell » Neutral
Noven Pharma NOVN Oppenheimer Neutral » Buy
Transocean RIG Matrix Research Buy » Strong Buy

DOWNGRADES

Argon ST STST BB&T Capital Mkts Buy » Hold
Xenoport XNPT Lazard Capital Buy » Hold
Intermec IN Bear Stearns Peer Perform » Underperform
Amer States Water AWR AG Edwards Buy » Hold
California Water CWT AG Edwards Buy » Hold
Aqua America WTR AG Edwards Buy » Hold
Universal Display PANL Maxim Group Buy » Hold
Wrigley WWY Davenport Buy » Neutral
Geo Group GEO Avondale Partners Mkt Outperform » Mkt Perform
Citi Trends CTRN Avondale Partners Mkt Outperform » Mkt Perform
AmeriCredit ACF Friedman Billings Outperform » Mkt Perform

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"Fast Money" For Friday

Here are Friday’s picks and to date records.

Jeff Macke liked Berkshire Hathaway (BRK) for Warren Buffet. Open $3,643

(a note: this pick will be treated as a $36.43 stock, otherwise any move in it will skew the tracking for Macke way off either up or down)

Pete Najarian recommended buying stock in NASDAQ (NDAQ). Open $32.56

Guy Adami thought GlaxoSmithKline (GSK) is a buy. Open $52.45

Eric Bolling preferred Hewlett Packard (HPQ). $47.02

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation week)

Adami= 12-10 Gain $24.16
Bolling= 9-9 Loss $15.08
John Najarian= 13-3 Gain $15.54
Macke= 19-12 Gain $7.08
Pete Najarian= 7-6 Gain $17.71
Seymore= 2-1 Gain $1.09
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29