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Posted
Oct 26 2009, 05:40 PM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
Perhaps the little guy is finally catching on to the games that Wall Street loves to play.
Last Thursday, Dole Foods (DOLE) priced its IPO at $12.50 per share, well below an expected range of $13-$15 a share. Based on that, you might have expected it to move higher when shares opened Friday morning.
But investors sensed something sour in this offering, and it wasn't the pineapple. Shares fizzled from the start and closed down fractionally; they sat at $12.20 at Monday's close. That's not a huge loss, but it's far from IPO glory. And it reflects the caution that all investors need to have right now
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Posted
Oct 24 2009, 09:29 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
Each weekend on Top Stocks I like to take stock of the market and see if the market has changed direction and I might need to rethink my strategy. I report how my portfolio on Wall Street Survivor is doing against the other participants from MSN's Top Stocks blog. I try to use the same standard methodology and explain my conclusions. I use BarChart and the various technical analysis indicators I have come to rely on for the last 5 years. Let's look at them one at a time: Value Line Index - an index of the 1700 stocks followed by Value Line - I like this better than the S&P 500 because it contains more stocks and is not market cap weighted so that larger companies are not given greater weight. To me that's a better feel of the overall market.
- BarChart still ranks the index as a 32% overall buy with 7 of the indicators buy, 3 sell and 3 hold. I would point out that the 3 sells are all short term and are what I expected to see. Bullish but not big time.
- The Value Line Index is tracking below its 20 day moving average -- just barely, but still tracking above it's 59 & 100 DMA. Weaker than last week but still in the green. Bullish but still weak.
- The Index is down for the week by 1.74% but up for the month by 1.02%. The index has been up each of the last 5 months
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Posted
Oct 23 2009, 02:11 PM
by
Ken Kam
Rating:
Money Blog: Top Stocks Blog - MSN Money
Banks are reporting great earnings. But this is to be expected because making banks profitable is the most politically palatable way for the government to recapitalize the banking system. The government accomplished this by holding interest rates that banks have to pay on their deposits to almost zero and relaxing the accounting rules so they don’t have to be diligent about writing off their bad loans. It looks to me like the plan is working. If this continues, the banks will make enough money to earn their way out of the bad loans that are still on their books. Some banks are putting their executives’ interests ahead of their shareholders’, by using the lion’s share of the profits to pay record bonuses. Other banks are using the profits to do things more in line with their shareholders’ interests — paying back TARP, making acquisitions, and rebuilding their capital without diluting shareholders.
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Posted
Oct 23 2009, 03:24 PM
by
Jim Jubak
Rating:
Money Blog: Top Stocks Blog - MSN Money
When I added Microsoft (MSFT) to Jubak’s Picks on July 24, 2009 after the company announced results for its fiscal fourth quarter, I wrote “This is as bad as it gets.”
After its Oct. 23 earnings release, the company is now saying the same thing. In the post-earnings conference call, Microsoft CFO Chris Liddell said that the fourth quarter may have been the bottom. Certainly, the company is behaving as if it were: Microsoft resumed buying back shares in the quarter that ended in September, with purchases of 1.4 billion shares.
First quarter earnings for fiscal 2010 fell to 40 cents a share, but that beat the 32 cents expected by Wall Street. Revenue declined by 14% from the first quarter of fiscal 2009 to $12.92 billion. That big drop in revenue came because Microsoft deferred $1.47 billion in revenue from customers upgrading to Windows 7. Put that back in and revenue came to $14.39 billion, a 4% decline from the year-earlier period.
Microsoft beat Wall Street estimates this quarter by cutting costs by more than Wall Street expected. Operating costs dropped 6.9% after the company made its first ever company-wide firings, slashed travel costs, and cut the prices it pays vendors. In the conference call, the company increased its cost-cutting target.
The big question going forward, however, isn’t about cutting costs, but about how many copies of the new Windows 7 operating system Microsoft can sell.
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Posted
Oct 23 2009, 09:38 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
Before you read too much into the headline notice I didn't say listen to the analysts; I said don't ignore them. Let me explain the difference. My own blog is called Financial Tides for a reason; I don't recommend swimming against the tide.
I think analysts and astrologists have a lot in common. They both claim they can foretell the future by interpreting the signs better than anyone else and are willing to share their insight with you for a price. Most of the analysts are young MBAs with CFAs so they have 2 little pieces of paper to certify how much better they are than you at reading the tea leaves. Their job is to produce reports that will give their brokers something to talk to you about.
Most brokerage firms do not allow their sale reps to do their own research. That would open them up to liability so they use these young MBA/CFAs to peruse all the published info on a company to document why they are making a buy/sell recommendation. How can you lose an arbitration hearing if your recommendations are well documented and produced using a standardized methodology?
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Posted
Oct 22 2009, 05:45 PM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
Is the market turning into a raging bull?
One sure way to tell if a bull market is back is by examining the number of private companies lining up to become publicly-traded securities.
That number seems to be rising. Last week private equity giant The Blackstone Group (BX) announced that it would be selling many of its portfolio companies via the public market. Interestingly, it was the IPO of BX itself that signaled the end of the last bull market in 2007.
But IPOs are a dangerous game for investors. Companies often debut with a lot of hype and at too-high prices. Stocks shoot up, then fall back as insiders and private investors who hold shares start selling. It’s the little guy who chased down shares in the market that loses.
So, I have a better idea for you: buy shares of busted IPOs. Here's why, plus three failed IPOs to buy now.
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Posted
Oct 22 2009, 04:42 PM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
Yesterday I wrote about perks for jerks. Today, the little guy gets his due.
While the economy may not be producing jobs sufficient to relieve persistent unemployment, corporations are feeling good enough to reinstate 401k matches to those currently employed.
With times tight and layoffs mounting many corporations suspended 401k matching as a way to preserve capital. No matter that doing so would hurt the very people that corporations depended on for long-term success.
The Best Vanguard Funds for your 401k
This was a time for desperate measures. Or was it a way to keep the good times rolling for those at the top?
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Posted
Oct 22 2009, 04:06 PM
by
Louis Navellier
Rating:
Money Blog: Top Stocks Blog - MSN Money
Buying a house is one of the biggest purchases most Americans will ever make. And right now, the housing market is the one of the biggest anchors holding back the U.S. economy. Though a recovery is under way in many sectors, the housing market remains a problem, and it looks likes it's going to get even worse.
7 Housing Stocks to Sell Now
Why do I say that? Here are seven reasons I'm convinced the housing market will continue to crater:
Reason #1 - Low Housing Starts
On October 20, data showed new housing starts were worse than expected, as builders remain cautious. While the total number of starts edged up a bit from 587,000 to 590,000, the increase was well under Wall Street's forecast of 610,000. Single-family starts appear to be leveling off—not increasing as some had hoped—and multi-family units saw a dramatic 15.2% drop on the month.
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Posted
Oct 22 2009, 07:59 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
So the word is out that Kenneth Feinberg, the Obama hatchet man, is going to have the pay of the top 25 executives at 7 of the companies who have not paid back the TARP money, by as much as 90%. If that's a good idea for those companies why not look at the rest of the people who got us into this mess. What's good for the goose is good for the gander, right? There are more than just these 175 executives who deserve pay cuts.
Let's cut the pay of the top 25 executives at the SEC and FDIC, they were asleep at the wheel. Next cut the pay of the 25 top ranking members of both the House and Senate Banking Committees, they didn't create legislation to keep us out of this mess. How about the top 25 executives of the external accounting firms of those 7 companies, they certified financial statements that didn't reflect the true worth of the companies?
While we are on a roll let's cut the pay of the top 25 executives of Standard & Poor's, Moody's, Fitch and A M Best they didn't have proper ratings on these companies. Oh, and let's not forget the top 25 analyst at all the brokerage firms who failed to warn us by downgrading these companies when they should have.
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Posted
Oct 21 2009, 02:48 PM
by
Ken Kam
Rating:
Money Blog: Top Stocks Blog - MSN Money
If we've learned anything from last year, it is that our economy is much more fragile than anyone thought possible.
Our government’s policy has created strong incentives for the CEOs of financial institutions that are deemed “too big to fail” to chase opportunities with very large upsides no matter what the risk. If the risks work out, the CEO gets an unbelievably large bonus. If things don’t work out, the chief has to make do with a big severance package while taxpayers pick up the tab for the losses.
As things stand now, our system steers private capital into high risk, high reward bets and relies on taxpayers to provide public capital when the risks go bad. I think it is only a matter of time before one of the “too big to fail banks” makes a big bet that does not work out. When that happens, as we all saw last year, the stock market can drop almost 40%. If we don’t want to go through this again, we need to take advantage of this rally to prepare.
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