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Though its earnings are disappointing, consumer lending is on the mend. In the long run, that's a very bullish sign.
Jeff Reeves, editor of InvestorPlace.com
Bank of America (BAC) reported earnings before the bell today that weren't exactly earnings at all. The company tallied a loss of $1.6 billion in the fourth quarter of 2010 as bad mortgages continued to eat away at profits. The shortfall equaled a negative 16 cents a share, and the stock's revenue rolled back to $22.4 billion from $25.1 in the same quarter of the previous year.
The news is certainly disappointing -- and not just to me personally, since I own Bank of America stock. These earnings are the latest bad report this week from a financial sector that seemed on the mend but now doesn't look so hot.
But there are still big reasons to be optimistic.
The company's board shake-up is akin to shuffling deck chairs on the Titanic. It's just not going to help.
It seems to me that Hewlett-Packard is shuffling deck chairs on the Titanic, trying to get the new guy, Leo Apotheker, a more agreeable team to work with. Either that or there is yet another back story that this once-pristine paragon of corporate governance just isn't telling anyone.
It's not the only thing that's difficult to fathom. Like what happened at Google (GOOG), where Eric Schmidt did such a terrific job as CEO before stepping aside to let Larry Page run the joint. Hey, Page founded it, he can run it for certain. I just hope Schmidt stays around to help do the job, unless, perhaps, he's moving to Washington, where he would be a fabulous addition to the Obama team.
An executive shake-up breaks up the three-way decision team at Google, as co-founder Larry Page replaces Eric Schmidt as CEO.
By Scott Moritz, TheStreet
Google (GOOG) is breaking up the band.
Schmidt, who was long thought of as the seasoned hand and management talent at the search giant, will take the executive chairman title.
The restructuring also includes the departure of Sergey Brin from the management team. Brin's new role will be far less central to Google's core operations and he will have the title of "co-founder."
We could see a 5% drop in U.S. stocks, but there's still a strong investing story in the U.S. this year.
- An overbought market ripe for profit-taking after a long rally.
- Worries about a slowdown in China as it struggles to get inflation under control
- More squabbles among Eurozone members over how to fix the continuing euro crisis
- Good but not great earnings reports (and therefore disappointments) in the financial sector
- A weak report on housing starts reminding investors the sector isn’t out of its slump yet.
Analysts and investors have their expectations set to high for this industry.
Am I the only one who is having butterflies about the solar industry? Is there a market for this resource, or is it all just smoke and mirrors?
Using Barchart, I found 4 solar stocks that on average are up over 20% in the last month alone. The brokerages have fantastic projections and there is very high investor sentiment, but my intuition is holding me back from making a recommendation. Here's what others think. Let me hear your opinions.
- Barchart Trend Spotter technical buy signal
- 9 new highs and up 29.13% in the last month
- Relative Strength Index 64.33% and rising
- Trades around 28.16 with a 50 day moving average of 24.63
- Wall Street brokerages have 4 buy, 1 hold and 2 under perform recommendations
- Revenue projected to increase 177.40% this year and 43.10% next year
- EPS estimated to increase 1,302.30 this year and increase annually 15.00% for at least 5 years
- Motley Fool CAPS members vote 75 to 22 and All Stars vote 14 to 8 that the stock will beat the market
Wendy's/Arby's Group says that focusing on Wendy's is a better bet. Will Arby's find any bidders?
Wendy's/Arby's Group (WEN) plans to put the Arby's chain up for sale, The Wall Street Journal reported. Arby's doesn't have the two things it takes to succeed as a fast-food chain these days: The ability to expand overseas or steal business from the competition.
The company now wants to focus entirely on Wendy's. "The reality is that the Wendy's brand, given its relative size and scope, is the key driver of shareholder return," said Wendy's/Arby's chairman Nelson Peltz in a statement to the Journal.
Shares of the company soared Thursday on the news, rising by more than 8% to $4.85.
The pros are professing newfound love for these funds, but you should tune them out.
By Gary Gordon, TheStreet
Goldman Sachs (GS) reported weak revenue, Citigroup (C) missed profit forecasts and Wells Fargo (WFC) merely matched estimates. In truth, JPMorgan Chase (JPM) is the only major financial institution that has reported inspirational numbers, but even "J.P." has problems in its mortgage division.
Herein lies an ongoing dilemma. You can improve your balance sheet by offloading troubled assets and/or writing off low-quality loans. You can ensure a measure of profitability by limiting your employee overhead, maintaining double-digit credit card rates, having some success in trading volume and/or offering next-to-zero savings rates to depositors. Yet financial stocks will still see "fits" without a more potent level of lending to small businesses and individuals.
Lately, many readers have been devouring rapturous reports on the incredible prospects for the financial sector. Hypothetically, economic expansion should encourage greater demand on the part of consumers and businesses alike.
The company makes it harder to add to the DVD queue from streaming devices, igniting a firestorm of controversy.
Netflix is removing the "Add to DVD queue" option for people who use Xbox 360s and other devices that stream Netflix videos. Those users must now go directly to Netflix's website to add movies to the DVD queue (you can still add to the "instant" queue from anywhere).
Talk about inconvenient. The move has ignited a firestorm of resentment among users, and the blog post has received 4,500 mostly negative comments. Why would Netflix do this? The explanation is, well, a little bit murky.
"We're doing this so we can concentrate on offering you the titles that are available to watch instantly," the company says on its blog.
With world markets recovering and developing, the prospects for the power industry appear promising.
By Don Dion, TheStreet
Rising commodity prices have been the talk of the Street for weeks, leading investors to seek out new and promising ways to gain access to wheat, coal, copper and other hard assets.
Energy, in particular, has gained a great deal of investor interest as improving economic conditions around the globe help lift crude prices back toward $100. This week, looking ahead to the new year, the International Energy Agency offered a promising outlook, raising its 2011 global oil demand forecast.
Targeting oil and other facets of the energy sector has become a simple endeavor, thanks to the advent of exchange-traded funds. Using products such as the United States Oil Fund (USO) or the iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ), investors can directly capture the price action of this fuel source through futures contracts, or take an indirect approach to the industry and play the effect of rising prices on producers.
With Steve Jobs on medical leave, all eyes are on his No. 2.
By James Rogers, TheStreet
Investors listening to Apple's (AAPL)first-quarter conference call Tuesday hoping for some Steve Jobs-style showboating and fiery rhetoric were surely disappointed. A soft-spoken, somewhat reserved Southerner is now center stage at the world's biggest technology company.
With Jobs on medical leave, all eyes are now focused on his No. 2, COO Tim Cook. Whereas his flamboyant boss spiced up press events and analyst calls with the occasional dig at fellow Silicon Valley companies like Adobe (ADBE), Cook's conference call comments (save for one swipe at rival tablet makers) were much more restrained. The Alabama native instead made vague references to the "magic of Apple" while giving little away about the company's broader strategy and its succession plan.
Cook, of course, is familiar with this role. He has already taken the company's reins on two prior occasions: for two months in 2004 when Jobs was receiving treatment for pancreatic cancer, and again for six months in 2009.
Take advantage of the market's messed-up expectation on the maker of the Cessna business jet.
The recession hit capital equipment makers hard because many customers had to forestall upgrades in order to survive. But the market seems to be ignoring the fact this can't continue forever, and all that cash sitting around has to be put to use sometime soon.
Rex Moore, Motley Fool Top Stocks editor
With a record amount of cash now sitting on company balance sheets, management teams are beginning to feel comfortable enough with the economic recovery to start loosening the purse strings. One company that stands to gain heavily from this is Textron (TXT).
The retailer plans to offer cheaper, better eats. But past efforts to boost product quality and lower prices didn't help sales.
By Jeff Reeves, editor of InvestorPlace.com
The company announced a plan today that will give shoppers healthier food options at lower prices, cutting out some of the most unhealthful foods packaged under its store brands. Coupled with better food on the shelf is a better PR push for the company's healthful offerings -- led by a partnership with Michelle Obama, who will attend the official Wal-Mart announcement, according to reports.
The in-store plan involves taking unhealthful salts, saturated fats, transfats and sugar out of Wal-Mart store-branded products under the Great Value and Sam's Choice labels. The retailer also has pledged to lower prices on fruits and vegetables.
Internet stocks are down 5% to 10% after F5 Networks' disappointing earnings. It's a chance to pick up the names you thought had gotten away from you.
Shoot first. Shoot everything! That's the market's reaction to Internet backbone F5 Networks' (FFIV) earnings last night, and I have to tell you that I believe it is a vicious overreaction. But don't tell the sellers.
I am seeing anything connected to the Net down 5% to 10%. Anything. Juniper (JNPR). Salesforce.com (CRM). Riverbed (RVBD). Acme Packet (APKT). Motricity (MOTR). Akamai (AKAM) is the only one that seems not to be down too far . . . yet. The whole mobile Internet tsunami has been wiped out because of F5's guidance!
What's the truth here?
First, if you can get F5 down even 30 -- who would ever have thought that would merit an "even"? -- then you should just grab it.
That's ridiculous. The company is a good company. While you can't be overly eager, because we don't know enough yet about what "went wrong" at F5, it doesn't deserve to be drawn and quartered (or thirded)!
The cement-maker almost went under in the credit crisis. But economic growth in the US and Mexico is helping it recover.
Yes, Chinese airlines have ordered 200 aircraft from Boeing. But we already knew that.
But shareholders didn't react to the news, and Boeing shares actually fell by 1%. That's because there actually aren't any new orders to announce.
All those planes have already been announced in the past four years, The Seattle Times reports. Boeing has already received nonrefundable deposits on them and booked them as firm orders.
So the impact on Boeing is minimal. The only newsworthy thing to come out of today is that the Chinese government gave final approval to the airlines that placed those plane orders.
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All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
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[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
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