SubscribeThe Week Ahead: The rules have changed
August 10, 2008
The Week Ahead
I am not sure how things can get any worse from this point although the more I learn about the accounting antics within the financial industry and the see wild market volatility, it appears obvious that we are not out of the woods yet - even with the recent dead cat bounce. The main problem stems from the fact that the rules have changed.
Yes, even though many of the core principles that we may use to identify market opportunities are solid and have worked for years, this time it is different. No matter how you choose to look at it, the economy is in shambles and this extreme volatility is clearly reflective of a bear market rather than what may appear to be the return to a bull run.
Last week, earnings came in all over the place and many of the reporting companies missed by a wide margin. In fact, as over half of the S&P 500 has already reported earnings know this quarter, we’re seeing an overall decline of about 18% from a year ago.
(ANF) (BIDU) (AMAT) and others….
The Week Ahead - Crocs, Banks and Beer
August 1, 2008
Here is a peek at my article for MSN Money for this week.
There is plenty of fun in store for this week. The markets have not been taking kindly to missed earnings these days, so why not get right down to some of the ideas you should be looking at as potential opportunities to make a few bucks.
Monday, August 4
If you are looking at a complete disaster, consider the fundamental and technical’s for Nam Tai Electronics. Earnings have been slowing considerably over the last several quarters and sporting a P/E ratio of 12 against an annual growth rate of -3% doesn’t provide much incentive to purchase shares. Add to that the fact that volume has been spiking on share declines and it is no wonder that the trend has been negative. Even though the technology sector has been somewhat stable throughout this recent market fiasco, there’s always an exception. Analysts are looking for $.17 per share of profit on $140 million of revenue.
The travel industry has been under intense pressure as the continuation of the negative sentiment by consumers is causing many people to buckle down and think twice about spending money. But what’s even more concerning is the fact that this is the second time around for Orbitz Worldwide. If you don’t remember the story, this company first came public in 2003 and had a very difficult time earning money. It was eventually taken private after they incurred regular and significant losses essentially obliterated shareholder value. Then, one day in 2007 they reappeared again as an IPO presumably hoping to confound and confuse us into believing that this time something would be different. Now, over a year has gone by and shares have lost almost 60% of their value since they began trading again. Even though there has been a showing of insider buying on this position, the notion that they pulled the same stunt twice, to the severe financial detriment of shareholders makes me, well, angry. As you can imagine, analysts are expecting a loss of $.03 per share for the period on $233 million in revenue. Who knows maybe the third time will be a charm!
Some of the Stocks Mentioned: Crocs (CROX), Nam Tai (NTE), Orbitz (OWW), Archer Daniels (ADM), Leap Wireless (LEAP)
The Week Ahead: Earnings you need to know about
July 28, 2008
Excerpt from my MSN Money article on the coming week’s earnings:
How about we play a game, shall we? It goes like this: I say a term and you tell me the first thing that comes to your mind. Ready?
What do you think of when you hear the word recession? Did you think slowdown or inflation? What comes to mind with the word write-offs? Did you think earnings growth? How about record commodity prices? Do you immediately think of increasing revenues and profits?
I bet you thought of several phrases and words associated with a general economic slowdown, but not those above. I asked because a curious situation is occurring within our markets. For example last week many of the companies reporting earnings showed an increase in year-over-year revenues and actually beat estimates. Of course this isn’t the norm this quarter, but even so, it is a peculiar occurrence.
Of course there were also several companies that had their share of difficulty, but it was still odd to see so many results come in better than expected during a time of widespread economic problems. How does that happen? Studies have shown that analysts often overshoot estimates during bullish times and underestimate in bearish environments, but I am really referring to reported revenue, not the estimate. Does that mean companies are actually selling more and taking in more revenue?
Read The Week Ahead: Pains, Games and Automobiles in its entirety.
Partial list of companies discussed: (AAPL) (MSFT) (F) (SOHU) (GOOG) (LVS) (WYNN)
The Week Ahead - Apple, Netflix and More
July 19, 2008
The Week Ahead - My Weekly Column on MSN Money
We are the heart of earnings season and this week’s lineup is massive. As I write this, I’m looking at over 25 pages of earnings estimates on hundreds of companies presenting results in one of the toughest quarters we’ve seen in decades. It appears that many of the companies that have already reported have been doing a fine job of beating lowered expectations and providing a nice balance to a market that has been under siege.
This week will be no different in terms of volatility. But those companies which have been savvy enough to project estimates that they figure they can beat will have an easy time pleasing investors. Those that don’t will pay a heavy price into the next cycle. Let’s face it, it’s a game. If played well it can provide wondrous rewards.
Here are a few companies that you may want to pay attention to. Remember, this all is predicated on oil behaving and limited announcements of any kind from the financial sector.
Stocks Discussed: Apple (AAPL), Netflix (NFLX), Amazon (AMZN), Wynn (WYNN), Las Vegas Sands (LVS), JetBlue (JBLU), Ametek (AME), Chipotle Mexican Grille (CMG) and more…
Click Here to read the rest of the Article
The Week Ahead: A Few Nuggets
July 12, 2008
This week will be full of exciting earnings announcements that may actually show some promise. As investor anxiety grows, sometimes a stock will mistakenly get caught up in the hysteria/euphoria and shares will behave erratically. In these conditions, if a company can prove that it isn’t in imminent danger by showing a string of solid earnings in the face of financial adversity, investors will bid shares up with a vengeance.
There may actually be a few nuggets that will show up this week. Yes, even in a market that seems to whipsaw investors around daily, there may be a few good stocks out there. Even in the worst forest fire there is usually some form of life left that will help to bring life out of the ashes. With that in mind, here are few ideas to ponder:
Stocks: (SCHW) (C) (IBKR) (FNM) (FRE) (OXPS) (INTC) (EBAY) (COF) (GOOG) (MAT)
