The US isn't strong enough not to care about them now. But one day it will be, Jim Cramer says.
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Too much selling can reverse course with one positive earnings report.
Occasionally the market gets it wrong. When a company reports results that are contrarian to conventional wisdom of investors, big profits can follow.
The entire financial sector has been weak for most of 2011. Banks, Wall Street firms and regional brokerage firms have been pummeled by aggressive selling. On the surface the action was very much a broad brush and may make bank stocks stupid cheap.
As such traders digging a bit deeper could exploit valuation discrepancies compared to reality. The key to success of any earnings trade is to identify a company that is likely to surprise those betting against a certain outcome.
If actual results surprise, shorts will cover and previous sellers are likely to return as buyers sending share prices higher. The key is to accurately predict results based on prior performance with a good idea of what will drive a particular company’s shares higher.
Case in point is Piper Jaffray Companies (PJC)
A miss on both ends of the income statement shears shares by 34%.
By Rick Aristotle Munarriz
Travel deals publisher and Groupon coattails hopper Travelzoo (TZOO) was fed to the lions today after a shocking quarterly miss.
This morning's report would seem to be spectacular if you didn't know what the expectations were. Revenue climbed 34% to $37.6 million, the company's headiest growth in four years. Despite investing to expand into 27 new local deal markets and testing its first ever television spot, net margins improved with earnings soaring 51% to $4.9 billion -- or $0.30 a share.
However, the shares opened 30% lower today because Wall Street was banking on a profit of $0.38 a share on $39.9 million in revenue.
Missing on one end of the income statement is painful, but missing on both ends is an unforgivable mistake.
Stay away from shares of Bank of America for now, but if the stock price drops further a buying opportunity may arise.
Express Scripts' acquisition reflects strong investing opportunities in the sector.
By Jake Lynch, TheStreet
Health care is the best-performing industry group of the 10 majors in the S&P 500 ($INX) this year, with its 46 components delivering a median gain of 13%. Top performers include Biogen Idec (BIIB), Intuitive Surgical (ISRG) and Humana (HUM).
Thursday's deal may make Express Scripts the largest pharmacy benefits manager in the U.S., controlling 30% of the market. CVS Caremark (CVS) would be the odd man out, in second place for market share.
The recent lack of participation by retail investors in US equities is a contrarian signal to buy, a strategist says.
By Robert Holmes, TheStreet
Retail investors are turning more bearish on U.S. equities, according to the latest data on sentiment and mutual fund flows, but one market strategist says it is time to be greedy now that others are fearful.
Investor sentiment worsened last week, according to a survey by the American Association of Individual Investors. The AAII Investor Sentiment Survey, which measures the percentage of individual investors who are bullish, bearish and neutral on the stock market for the next six months, showed that bearish sentiment rose 1.4% in the week ended July 20. That compares with a 0.5% rise in bullish sentiment and 1.9% decline in neutral sentiment.
Mutual fund flow data also show retail investors are steering clear of U.S. equities. The Investment Company Institute estimates that equity funds saw total outflows of $3.4 billion in the week ended July 13. Foreign equity funds saw an estimated increase of $648 million, while domestic equity funds saw more than $4 billion drain out over the week.
The investment bank's efforts to revamp its fixed-income business might be paying off. With video on Morgan Stanley's second-quarter results.
By Shanthi Bharatwaj, TheStreet
The investment bank's revenue from trading turned out to be much better than anticipated at $5.2 billion. Fixed-income trading revenue fell 10% year on year to $ 2.1 billion but was up 18% quarter on quarter. The higher revenues reflected hedging gains from exposure to monoline bond insurers and increased revenue in credit products that offset significantly lower results in commodities.
Equity trading revenue came in at $1.8 billion, up 9% quarter on quarter, despite lower trading volume, and up 31% year on year.
But a look at the charts shows one carrier's stock is bucking the trend and acting strong.
These funds rely on a buy-and-hold strategy in the often volatile agricultural sector.
By Don Dion, TheStreet
The agricultural industry started off this year on a strong note and continues to generate headlines regularly.
However, increasingly, this corner has become a choppy region of the market. With the divergence in crop prices, the full-steam-ahead mentality that defined much of the opening half of the year has begun to fall by the wayside.
Bullish agriculture investors will want to maintain a conservative stance on this industry in order to avoid being taken to the slaughterhouse. Clear evidence of the shaky action in the food industry can be found in "soft" commodities, such as coffee, sugar and cotton.
Ma Bell's mobile business grew by 331,000 customers, while wired connections fell by more than a million.
By Scott Moritz, TheStreet
The Dallas phone giant reported a profit Thursday of 60 cents a share, down a penny from year-ago earnings and in line with analysts' estimates.
In terms of sales for the second quarter, Ma Bell booked $31.5 billion in sales, up 2% from the $30.8 billion level a year ago, and slightly above the $31.3 billion analysts were looking for.
Technology trends will force these companies to change or crumble.
In the past it was hard to keep up. Now it's downright impossible. Companies like Hewlett-Packard-owned (HPQ), Palm, Yahoo (YHOO) and Blockbuster were all huge just 10 years ago. They still looked like the future. Now they're slowly crumbling, trying to keep up with the likes of Apple (AAPL) and its iPhone, Google (GOOG) and its ever-tightening grip on the Web, and the ubiquity of Netflix's (NFLX) streaming video.
The road to obsolescence is shorter than ever. Investors, analysts and reporters are turning on hot companies shortly after or even before their lusted-after IPOs are delivered. Look at the backlash against daily-deals business Groupon or floundering streaming-music service Pandora (P).
Who will be obsolete by the middle of this decade? Consider these three stocks:
Analysis: The deadlock in Washington has gotten so bad that the nation's central bank is getting ready for what might happen after Uncle Sam bounces his checks.
By Jeff Reeves, Editor, InvestorPlace.com
Reports emerged last night that the Federal Reserve is actively preparing for a government debt default. With negotiations over the debt ceiling still going nowhere, it's clear that Fed Chairman Ben Bernanke and his fellow central bankers don't want to be caught without a plan.
There are just 12 days to go until the Aug. 2 deadline set by the Treasury, when the government will run out of money and stop paying some bills. And, barring a last-minute compromise, the U.S. will face at least a credit downgrade and at worst the label of outright default on its debts.
Yes, it has gotten this bad. And the Fed is preparing for the worst.
Still no debt deal. More uncertainty in Europe. Tech stinking up the joint. We've been here before. The best strategy for now is to own good stocks and dividends.
No debt deal here. Lots of discord and posturing about Greek debt there. No uniform view. Some talking about selective defaults on Greek bonds, others talking about bailout terms of no certainty. To watch the decline in European markets as the discord unfolded was pretty breathtaking, although the Germans and the French keep saying they agree on a plan and that something positive is imminent.
It's always imminent with these politicians, isn't it? China didn't help either, with a purchasing managers report that could indicate a hard landing ahead -- something at odds with many other reports -- but none too positive.
All in all, it was a back-to-the-old-bad-ways night again, with my fallback defensive plan of not being all that opportunistic. Staying with a nontrading, "owning good stocks and dividends" strategy remains the best posture, and extreme caution is needed without European and American debt resolutions.
I looked at this stock about a year ago, and my thoughts are still relevant today.
Risk of growth by acquisition
Very significant portion of Brown & Brown's (BRO) growth in the past came from acquiring brokers. I am naturally skeptical of sustainability of this type of growth as it comes with the following risks:
A midcycle upgrade is coming in time for a year-end sales boost, an analyst says.
By Scott Moritz, TheStreet
Eager to flog would-be tablet competitors, Apple has modified the iPad 2 with a "slimmer profile with higher screen and camera resolution," said Rodman Renshaw analyst Ashok Kumar, citing his supply and manufacturing sources.
The midcycle upgrade appears to advance the iPad 2 but is not the full redesign expected with next year's iPad 3, Kumar said.
These shares may not be long-term holds, but they are cheap.
By Matt Koppenheffer
Fool regulars may know that although I spend most of my time looking for value-priced, dividend-paying stocks that I can own for the long term, I do occasionally like to rummage around in the bargain bin to see if there are any severely beaten-down stocks worth owning.
With these stocks, I'm not looking for cream-of-the-crop businesses that I want to own for years. I'm simply looking for decent businesses that are underpriced. I put a small amount of money into each and own them as a broader basket.
This search is far from idle. In my last go-round, one stock, Genworth Financial, was already part of personal portfolio, and three of the four others -- Bank of America (BAC), Hartford Financial Services (HIG), and Cemex -- have all been buys for me since I published that article.
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Improving the US's technological infrastructure would be a costly undertaking, but government regulation could help boost connection speeds and competition.
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[BRIEFING.COM] The major averages have continued their retreat with the S&P 500 widening its loss to 0.3%. Elsewhere, small caps have suffered from added pressure as the Russell 2000 trades lower by 0.6%.
The technology sector (+0.2%) continues trading in the green while the remaining nine groups sit below their flat lines. Most notably, the financial sector is now lower by 0.6% with bellwether names Goldman Sachs (GS 171.02, -2.49) and JPMorgan Chase (JPM 58.46, ... More
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