You can still find small-cap superstars
Small-cap superstars still abound

There are some picks in this sector that have excellent valuations and strong earnings growth.

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One analyst sees hope for the BlackBerry maker if it were to divide into separate businesses for network and devices.

By TheStreet Staff Jul 12, 2011 12:10PM

By Scott Moritz, TheStreet

 

Management seems clueless, insiders are losing hope, and now analysts are calling for a split of Research In Motion (RIMM).

 

RBC analyst Mike Abramsky is the most recent RIM watcher to call for action. Abramsky, a die-hard RIM supporter, urged the company in a research note Tuesday to split into two businesses: network and devices.

 

"Acting now may target opportunities and unlock significant shareholder value," Abramsky wrote.

 

The restructuring call comes as RIM's stock continues its free fall this year, down 52% since January, while rivals Google (GOOG) and Apple (AAPL) continue to sweep up BlackBerry market share.

 

The company's franchising strategy and expansion opportunities will make it a worthwhile investment after it goes public.

By TheStreet Staff Jul 12, 2011 11:07AM

By Jake Lynch, TheStreet

 

Dunkin' Brands (DNKN), the owner of the doughnut-and-coffee chain and ice-cream purveyor Baskin-Robbins, is set to go public. Millions of people in the Northeast can't get enough of Dunkin' Donuts coffee. So how will its stock fare?

 

First, the basics: The company, co-owned by private-equity investors Bain Capital, Carlyle Group and Thomas Lee, is seeking to sell more than 22 million common shares for between $16 and $18 a share for net proceeds of up to $400 million. Dunkin' amended its S-1, an initial public offering request form to the Securities and Exchange Commission, on Monday. In it, Dunkin' indicated that it would have 126 million total common shares after the share sale.

 

That translates to a market value of more than $2 billion. Even after the IPO, the private-equity owners will retain more than half of the outstanding stock. Its profit stream is likely to enrich Bain, Carlyle and Lee for years to come.

 

The US stock correction is now under way, and global markets, gold and the dollar are on the move. Where are the next buying opportunities?

By MoneyShow.com Jul 12, 2011 10:43AM
By Tom Aspray, MoneyShow.com

It has been a rough start to the week and selling early Tuesday has been heavy overseas. 

The E-mini S&P 500 futures plunged below 1300 in early trading, but a couple hours before the market open, they were trading well above the early lows. A correction was expected last week, however, and the key levels are still holding.

Gold surged to new highs in euro, as the spreading fears about Italy’s debt crisis hit the single currency hard. Clearly, skittish investors are once again jumping out of riskier assets.

Interestingly, the dollar was also higher on the day, but it is still locked in its trading range. Rates also dropped again, and the low-yielding Treasury market is seen as a safe haven.

The apparent impasse over the debt ceiling is also starting to weigh heavily on the markets. It is too bad that most of our representatives failed to take Econ 101, as many apparently are not worried about the real consequences of a debt default.  Hopefully, both sides will come to their senses soon; otherwise, the Treasury market is unlikely to be a safe haven.

Technically, the decline in the stock market has not done any lasting damage, but the strength of the first rebound will be informative. The emerging markets, as well as gold and the dollar, will need to be watched closely as the week progresses.
 
Tags: etfgold

The bond guru will be more transparent, but investors hoping to use his fund as a blueprint will be out of luck.

By TheStreet Staff Jul 12, 2011 10:35AM

By Frank Byrt, TheStreet

 

Followers of bond fund maven Bill Gross of Pimco will be able to get a gander at his trading strategy once the firm launches its first exchange-traded fund later this year. But that doesn't mean investors can replicate Gross' big wins on their own.

 

That's because of a regulatory wrinkle that will preclude do-it-yourselfers from matching his moves trade for trade, at least for now.

 

Gross has built a reputation as a brilliant manager of the world's largest mutual fund, the $253 billion Pimco Total Return Fund (PTTAX), which has a five-year average annual return of 8.5%, more than twice that of the S&P 500 Index.

 

We're better off than we were 3 years ago, though it may not feel like it.

By Jim Cramer Jul 12, 2011 9:12AM

the streetjim cramerDidn't know we now face another Armageddon. In fact, a couple of Armageddons. The debt-ceiling Armageddon. The Italian Armageddon. The Chinese inflation Armageddon.

 

Jeez, these Armageddons seem like a dime a dozen. And that's the real problem: Armageddons aren't sold a dozen by the dime. They are sold very rarely. We should know it -- we lived through one just a couple short years ago.

 

Here's the problem, though. We have learned the wrong lesson. We have learned that every single crisis is the paramount crisis. That every single woe is the death rattle. That the sky not only falls but falls hard and takes all of us chickens with it.

 

Here's what we should have learned. You can almost blow up the western financial world. You can almost nationalize every single bank. You can almost destroy capitalism. We almost did. We can scorn Bernanke and Geithner and criticize them for 9% unemployment. But I think we should have and could have had 25% unemployment. I think we could have had a depression.

 

Italy is the world's third-biggest debtor after the US and Japan. That fact, along with the country's deficit, makes many bondholders nervous.

By Jim J. Jubak Jul 11, 2011 5:29PM
Jim Jubak"If I fall, then Italy falls. If Italy falls, then so falls the euro. It is a chain," Italian finance minister Giulio Tremonti said over the weekend.

The grandiosity of Tremonti’s rhetoric aside, global financial markets bought into his logic Monday. The French CAC stock index closed down 2.7%, the German DAX index was down 2.33%, and the euro was down 1.74%, to $1.4016.

Yields on Italy's 10-year bonds were at 5.68%, a nine-year high. That puts Italy perilously close to the 7% threshold that triggered bailout rescue requests from Greece, Ireland and Portugal.

Why is Italy in crisis  now? And why is what happens with Italy so important to the euro?

Italy makes so many bondholders nervous because it is the world's third-biggest debtor after the U.S. and Japan, with $2.6 trillion in government bonds outstanding. The country will run a budget deficit again this year that will push debt to 120% of GDP.
 

The upscale grocer appeals to niche consumers who are well on their way to economic revival. Goldman Sachs has added the stock to its list of picks.

By Kim Peterson Jul 11, 2011 2:50PM

Image: Groceries (© Tetra Images/Corbis)As the recession lingers, a grocer nicknamed "Whole Paycheck" shouldn't be doing well. But Whole Foods Market (WFMI) is on fire, with shares up an astonishing 70% in the past year.

And now Goldman Sachs (GS) has added the stock to its Conviction List. Analyst Stephen Grambling thinks sales and profits will come in better than management has forecast for 2011.

Those beats will come in as the chain expands, Grambling says. He set a $76 target on the stock, which is about 18% higher than Monday's price.

So why is Whole Foods doing so well in this time of high unemployment and economic turmoil? The grocer is capitalizing on a growing divide in this country between the well-to-do and the middle- to low-income households. Wal-Mart (WMT) shoppers are still living paycheck to paycheck, struggling to make ends meet and shopping at dollar stores when they can.

 

Even dollar-store customers are staying away from unnecessary items, and the slowdown in showing in company earnings.

By Kim Peterson Jul 11, 2011 1:58PM
Image: Cash register (© Hill Street Studios/Blend Images/Getty Images)A significant shift is taking place with American shoppers: The urge to splurge is ending.

This became evident at Target (TGT) and Wal-Mart (WMT) in the recession as those stores saw customers pass up furniture and sporting goods in favor of basic must-haves like toilet paper and cereal.

Now even dollar stores are seeing the end of the splurge. Sales and profits aren't growing as fast anymore, The Wall Street Journal reports. Shoppers are no longer buying even the cheap toys and home decorative items.

With high gas prices and high unemployment on their minds, shoppers are sticking to food, cleaning supplies and other necessities. Those products have lower margins, and as a result, investors are seeing missed quarterly earnings from Dollar General (DG), Family Dollar Stores (FDO) and Dollar Tree (DLTR).  

The search giant's answer to Facebook is gaining users quickly.

By TheStreet Staff Jul 11, 2011 1:47PM

By Scott Moritz, TheStreet

 

Google's (GOOG) social-networking site Google+ is possibly the best office-time distraction since, well, Facebook.

 

Ripples of invites launched during the Google+ field trials have built rapidly expanding waves of sign-ups across the broader online population. In other words, everybody's doing it -- or will be soon.

 

Blogger Paul Allen estimates the number Google+ users, as of Sunday, has nearly tripled to 4.7 million from 1.7 at the beginning of last week. Allen expects to update his estimate Monday.

 

But so what? Google has a product that could be as big as Gmail. Does that mean success on any level other than popularity in the blogosphere?

 

The company is said to be looking for another manufacturer to help build its next tablet.

By TheStreet Staff Jul 11, 2011 1:24PM

By James Rogers, TheStreet

 

Faced with massive demand for its next-generation iPad, Apple (APPL) is looking for an additional contract manufacturer to help build the device, according to the DigiTimes Web site. Taiwan companies Quanta Computer and Pegatron Technology are in the frame, it said.

 

Citing industry sources in Taiwan, DigiTimes reports that Pegatron stands a better chance of winning the potentially lucrative iPad orders. Previously, Apple used just one manufacturer, Foxconn, to build its iconic tablet, but a recent explosion at the company's plant in Chengdu, China, has sent the gadget maker looking for an additional contractor.

 

Rumors have also been swirling for some time that Apple is tightening its relationship with Pegatron. Earlier this month, DigiTimes said Apple had ordered Pegatron to begin production of 15 million new iPhones for a September sales launch.

 

Despite low valuations, Bank of America, Citigroup and JPMorgan are sucker's bets.

By MoneyShow.com Jul 11, 2011 12:38PM
By Tom Aspray, MoneyShow.com

The dramatic stock market rally over the past few weeks has caused some analysts and advisers to recommend some of the beaten-down big banks because their valuations are supposedly attractive.

There is always the temptation to step in and buy the bargains once a well-known company declines sharply. These choices are often made on the basis of projected earnings, book value or some other fundamental justification.

One of the more painful lessons all investors learn is that a 20%-40% loser in your portfolio can offset the nice gains from the other holdings. Of course, this is why risk management is so important.

If you can avoid taking a big hit in one stock or one trade, your portfolio has a much better chance of showing positive performance. The big banks have been on my stinker list for most of the year. In February, my technical appraisal of both Bank of America (BAC) and Citigroup (C) was negative, and I advised having stops in place to avoid having big losers in your portfolio.

Two technical tools that I find most important for gauging a stock’s potential are the on-balance volume (OBV) and relative performance, or RS analysis. Stocks that have positive volume patterns and are acting better than a market average like the S&P 500 are the best stocks to consider buying.

So using volume and RS analysis, do the Select Spyder SPDR - Financial (XLF), Bank of America, Citigroup and/or JPMorgan Chase (JPM) deserve consideration for your portfolio?
 

Strong quarterly results from JPMorgan and Citigroup could help the SPDR KBW Banks ETF. For Google exposure, consider First Trust Dow Jones Internet Fund.

By TheStreet Staff Jul 11, 2011 10:56AM

Image: Stock investor (© Tom Grill/Corbis)By Don Dion, TheStreet

 

Here are five exchange-traded funds to watch this week.

 

1.    SPDR KBW Banks ETF (KBE)

 

Earnings season kicks off this week with aluminum giant Alcoa (AA) scheduled to announce its quarterly performance and outlook after the bell. A number of companies will follow suit, providing investors with insight into the state of the U.S. and global economic recoveries.

 

Financials will be of particular interest among earnings watchers during the latter half of the week when JPMorgan (JPM) and Citigroup (C) step up to the plate. These two rank as the first- and second-largest KBE components and together account for 15% of its index.

 

It's hard to pull the trigger on what appears to be a crowded trade, but these energy stocks are poised for ongoing earnings growth and greater gains.

By TheStreet Staff Jul 11, 2011 10:49AM

Image: Oil drums (© Kevin Phillips/Digital Vision/age fotostock)By Jake Lynch, TheStreet

 

Bullish commodities analysts see oil hitting $150 by next spring. Such a spike, while a detriment to economic growth, would bring outsized gains to energy stocks.

 

Chevron (CVX) and larger rival Exxon Mobil (XOM) delivered record profits in 2008, following crude's meteoric rise to $147 a barrel. We may be in the midst of another energy bull market as oil has retained a foothold above $90 and is enjoying support amid improving global demand fundamentals.

 

Chevron is scheduled to report second-quarter results Tuesday. The company's stock has advanced 15% in 2011 and 50% in the past 12 months as the commodities boom widened the company's profit margins, bolstering net income. Chevron's first-quarter pre-tax margin, at nearly 20%, ranked in the 73rd industry percentile. Return on equity, the critical measure of profitability for stockholders, was outstanding, at 20%.

 

Earnings will need to impress investors to keep stocks moving higher.

By Jamie Dlugosch Jul 11, 2011 10:06AM

A weaker-than-expected jobs report Friday took some of the steam out of the pre-earnings rally, but the market rebounded at the close, limiting the damage. The market finished the week with a small gain.

 

Earlier in the weak, economic data supported bigger gains as the market waited for corporate profits to roll in. Investors won't have to wait much longer, as earnings season begins in earnest this week with a report from Alcoa (AA) after the close of trading Monday.

 

After Alcoa (AA), a whole host of companies are set to report results. The big-name report this week comes from Google (GOOG). The technology bellwether will give us a read on the overall health of the economy.

 

I expect a strong report. ETF buyers should keep the pedal to the metal this week with the iShares S&P North America Technology and Multimedia Fund (IGN).

 
Tags: etf

Italy is the latest dire debt story being used to stir up fear amid what should be a decent earnings season.

By Jim Cramer Jul 11, 2011 9:14AM

jim cramerthe streetSubstitute Italy for Greece and replay the whole thing? Is that the plan for folks who need the market lower?

 

Start pumping up the credit default swaps like last time? And the time before? And the time before that? Get everyone frightened, including the ratings agencies? Make sure everyone knows that Italian bonds are really so overvalued that they have to be restructured and you simply can't own them?

 

Why not? If it worked before, why not again? You can do this for every country on earth save maybe Germany and France, and definitely not China. It's too lucrative not to do.

 

Of course, it helps that the current backdrop of stalled employment growth and politicians struggling over debt ceilings allows the negativity to come center stage. A deal to take over Arch Chemicals (ARJ), the only good news here today, certainly can't counteract the gloom. Not to mention China's inflation figures, which are particularly egregious, just when they are supposed to be peaking.

 

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[BRIEFING.COM] Coming off the three-day weekend, it was a groggy start for the equity market with neither buyers nor sellers showing much conviction.

The energy sector (-0.6%) has been a key drag in the early-going as it is following crude prices (-$1.28 to $94.68/bbl) lower.  Meanwhile, the consumer discretionary sector (+0.3%) has helped act as an offset.

Moments ago, it was reported that the ISM Index for August jumped to 59.0 (Briefing.com consensus 57.0) from 57.1 in ... More


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