If everything goes as planned, this week will be the busiest for initial public offerings since 2000.
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Right now it's earnings vs. Washington interference -- expect a bit of selling for now.
By Jim Cramer, TheStreet
Why isn't it down more? You will hear that all day. The answer is simple: The pain is in the back years. You will not see the real crimp in purchasing power and job formation until 2011, and then maybe we will be in better shape for it.
In fact, the real balance is between next quarter's earnings and what President Barack Obama has in store for us next. Will it be amnesty, so those who are illegal get a card that entitles them to universal health care? Will it be an energy bill that tacks on costs to companies that pollute and adds a new layer of bureaucracy? Will it be a push to restore the historic power of unions to their "rightful" place in history? Will it be financial legislation that punishes all large banks and Goldman Sachs (GS) in particular because Goldman makes too much money? Will it be rules about how the combinations that the government begged for, JPMorgan (JPM) / WaMu, JPMorgan / Bear Stearns, Wells Fargo (WFC) / Wachovia and Bank of America (BAC) / Merrill Lynch must be broken up and the institutions punished for helping the government?
Every weekend I step back and use the numbers on Barchart to analyze the market action
Value Line Index -- The Index contains 1700 stocks which is much broader than the S&P 500 or the much narrower Dow 30 -- Still looks good
- The Index closed Friday above its 20, 50 and 100 day moving averages
- The Barchart technical indicators still rate the stock as a 72% buy with 10 buy, 2 hold and only 1 sell signal
The smart phone maker is not looking too smart these days. Bankruptcy now a real threat.
The talk now is of a possible bankruptcy and the picture looks bleak. One indicator: Palm shipped some 960,000 units at the end of the third quarter, but only 408,000 ended up in the hands of customers. That leaves significant inventory out there that no one's in a rush to buy.
You can't help but wonder if Palm can survive the phenomenon that is Apple's iPhone, and my view on this dog is unchanged. Sell. Short. Run away. Here's the story.
Pepsi leads the pack of companies planning to buy back shares. Would investors prefer dividends instead?
Case in point: Pepsi (PEP), which said this week it will buy back up to $15 billion in shares in the next three years, including $4.4 billion in 2010. That's the biggest repurchase since the financial crisis hit, the Economist reports. (Pepsi also increased its dividend by 7%).
So far this year, buybacks are in the range of $65 billion, compared to $137 billion for all of last year.
So are these buybacks a good thing?
Union Pacific expects good things in the second half of 2010 and could be a good way to capture momentum.
Union Pacific (UNP) historically hasn't been an especially well-run railroad, but it is run well enough so that the transcontinental road will get a big boost from the recovering U.S. economy in the first half of 2010 -- and expectations for further improvement in the second half.
I'm not convinced that expectations for second-half growth will prove out, which is why I'm keeping this buy on a very short-term leash.
Billionaire corporate raider makes bold play for studio.
Billionaire corporate raider Carl Icahn has upped his offer to buy Lions Gate Entertainment (LGF), offering to acquire all of the studio’s outstanding shares.
"The Icahn Group is now offering to purchase UP TO ALL of Lionsgate's outstanding common shares. In addition, the expiration date of the Offer has been extended to April 30, 2010," he said in a news release.
The offer comes on the very day that Lionsgate is poised to bid in the final round of the expected sale of MGM, a deal that Icahn opposes. Lionsgate has been struggling with what price to set for the debt-laden MGM, and is bidding against better-funded and larger rivals, Time-Warner and Access Industries.
Last week, Lionsgate rejected Icahn’s offer to acquire 13.2 million shares -- about 30% of Lions Gate -- for $6 per share, or nearly $80 million.
Stock-picking models based on writings of Ken Fisher and Joel Greenblatt point to a couple of intriguing plays.
While many investors -- including John Paulson and George Soros -- have been keying on gold lately, Kenneth Fisher recently offered some words of caution to investors looking to ride the gold wave. In his latest Forbes column, Fisher says that while gold has averaged annual returns of about 7.1% since the downfall of the Bretton Woods exchange-rate system 37 years ago, the gains have come in bursts -- gold has gained ground in just 66 of the 433 months in that period. So, "if you aren't an exquisite timer, or very lucky, gold isn't a great place to aim your money," he warns.
Instead, Fisher says he is currently targeting stocks of firms with good growth potential. I think he's wise to do so, and I recently came across two such stocks -- thanks in part to the Guru Strategy I base on Fisher's early writings.
The two picks came to my attention through the new "Trade Alerts" feature on my Validea Professional Web site. The Trade Alerts are issued by my Guru Strategies, each of which is based on the approach of a different investing great. Developed after extensive historical testing, the alerts are issued when my models detect a series of high-conviction buy signals that, when previously reached by individual stocks, have tended to be followed by strong performance.
Synovus needs to raise equity and cut debt. And then the common stock will be a winner.
By Jim Cramer, TheStreet
Crunch time for Synovus (SNV). SunTrust put the kibosh on the stock Thursday, citing its recent run and its need to raise more capital to repay the nearly $1 billon in TARP money that it took. In many ways, Synovus represents the last of the lottery tickets for the bank turn, one that we saw first with Fifth Third (FITB), then Huntington Bancshares (HBAN), Regions (RF), KeyCorp (KEY) and Zions Bancorp (ZION).
First, let me say I am not a fan of Synovus. But I wasn't a fan of Zions and that didn't stop me from making money here. Throughout the run from $13 to $23, Zions needed capital. The company, however, made a point of not raising it, instead letting the common stock run and that judgment was right. It can raise a ton of money now and get on even footing if it wants to. It can exchange debt for equity. It has a myriad ways out of its jam.
With the U.S. prison population down 6%, publicly traded correction companies have fallen on hard times
In an era of runaway government spending and uncertainty on Wall Street, publicly traded corrections companies may have seemed like a good idea to some investors. With a literally captive customer base, revenue seemed reliable.
Well chalk up private sector prisons as just one more industry that’s fallen on hard times. According to The New York Times, for the first time since 1972 we have seen a reduction in the U.S. prison population instead of an increase. That means less overcrowding of state and federal facilities – and less need for private sector help to take care of the overflow inmates.
With state budgets getting leaner on lower tax revenue, the expense of “outsourcing” prisoners is hard to justify. When you look at how staggering the cost is, it’s easy to see why elected officials are ending these contracts.
Ford's stock price climbs to its highest level since January 2005 after Moody's boosts its credit rating.
By Andrea Tse, TheStreet
Ford stock hit an intraday high of $14.15 a share, a level not seen since January 2005. Some equity analysts say Ford has the potential to keep climbing, but it still faces formidable competition from Toyota Motor (TM), which has been weakened by recent recalls.
"The success of some of the new vehicles has surpassed even my expectations,” says Wall Street Strategies analyst David Silver, who owns Ford shares. “Stronger sales coupled with the improving cost structure bode extremely well for Ford in the coming quarters. General Motors indicated it could earn a profit during 2010, and if that is true, then Ford will be even stronger."
Times are good for Green Mountain Coffee, but its valuation should give investors pause.
The story is the same. Hot stock grows quickly, attracts momentum investors, and ultimately crashes spectacularly.
Who will be next on the list? (10 stocks not on the list)
My bet is on Green Mountain Coffee Roasters (GMCR).
Corporate sales of Microsoft's new operating system could be strong in the second half of this year.
The second-quarter results, reported Jan. 28, were good enough on their own. (Microsoft's fiscal year ends in June.)
The company reported earnings of 60 cents a share. Once you added back in $1.7 billion in deferred revenue and about 14 cents a share in earnings from sales of Windows 7 that Microsoft decided it would recognize in future quarters, the earnings picture looked even better at 74 cents a share. (Microsoft is the publisher of MSN Money.)
Warren Buffett rocks out in black leather and long hair for a Geico company video.
Until this one.
Warren Buffett does Axl Rose in a bizarre -- but strangely catchy -- video made by employees of the Geico insurance company. You've never seen Buffett like this: black leather, long hair held in a bandanna, faux tattoos and the red plaid kilt that Rose favored.
Foreclosures, expiring aid programs and potential regulation could hurt the performance of the largest US banks.
By Dan Freed, TheStreet
The largest US banks have had a strong run of late, with the Philadelphia KBW Bank Index ($BKX) climbing 72% during the past year. We've pulled together five reasons to be cautious about their future prospects.
1. The second foreclosure wave
Roughly five to seven million home owners are technically in default, but have not yet been foreclosed upon, according to a report last week from the Washington Post.
Why pay mutual fund fees when with just four components of the Dow, you can match the market's ups and downs 9 times out of 10?
By Ed Elfenbein, editor of Crossing Wall Street
Here’s a fact you don’t often hear -- even index funds that have rock-bottom fees are over-charging you.
It’s true! With a little creativity, investors can closely mimic the performance of an index fund and bypass the fees that go to the mutual fund companies – and keep that money in their pockets. You may not be able to get 100% accuracy this way, but you can get awfully close if you do your homework.
For instance, if you take these four Dow Jones Industrial Average component stocks, you can correlate the performance of the broader market with 89% accuracy:
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[BRIEFING.COM] The stock market ended the Tuesday session on a lower note after generally upbeat earnings took the back seat to geopolitical concerns. The S&P 500 (-0.5%) and Nasdaq Composite (-0.1%) ended on their lows, while the Russell 2000 (+0.3%) displayed relative strength.
Once again, market participants were focused on quarterly reports in the early going, but geopolitical worries overshadowed the impact of mostly better than expected earnings. Specifically, equities ... More
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