Stocks have rallied 177%, and while calling a top is the easiest thing to do, it might not be the most accurate, Cramer says.
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Instead of judging Hewlett-Packard's stock by the value of its outgoing CEO, look at the strength of the company itself.
By Jim Cramer, TheStreet
How much is Mark Hurd worth? I know that's the question people will use to determine what they will pay for HPQ.
I think that's the wrong question. The right question is how much is HPQ worth, and for that it's pretty simple: It's worth more than one times its growth rate, where it stands if Friday's closing price were to hold.
I can't say Hewlett-Packard (HPQ), the stock, has been on a roll. It's been afflicted with the same atrocious action that almost all techs, with the exception of NetApp (NTAP), F5 Networks (FFIV), VMware (VMW) and Salesforce.com (CRM), have been victimized by. I can't even include Apple (AAPL) right now in the "up" stock quotient, because it's been stalled, although I think it's about to break out.
The market is up but having a hard time gaining against the poor news about job losses and a weak economy
Value Line Index -- Contains 1700 stocks so I think it is more representative of the market than the narrow S&P 500 or very narrow Dow 30 -- Trending up but not very strong
- Index up .99% for the week but up 10.95% for the last 20 sessions
- 20% Barchart short term buy signal
- 8% Barchart overall buy signal with 5 of 13 indicators a buy including the Trend Spotter (tm)
- 14 day Relative Strength Index -- 56.00% -- above 50% is good
Barchart Market Momentum -- Contains approximately 6000 stocks -- Percentage of stocks that closed above their Daily Moving Averages for various time frames -- Strong but last week was stronger
My Martin Zweig-inspired strategy has found growth when growth has been scarce. Here's how it works.
Over the past two years, the stock market has been driven largely by macroeconomic factors. That's not surprising, given just how powerful the economic winds have been. In late 2008 and early 2009, we experienced one of the worst financial crises in the country's history as the credit and housing bubbles burst. Then, the U.S. and other governments around the world sent an unprecedented wave of stimulus around the globe, helping to stabilize and jumpstart the stalled economy. Given the extreme emotions such major economic events cause, it's easy to see why hordes of investors have moved in near-lock-step in and out of the market.
Today, there are still big macroeconomic factors in play -- the skyrocketing levels of debt at the federal and state levels is a good example. But as we move further from the epicenter of the crisis, it seems likely that we'll start to see less correlation among stocks. As is usually the case in the markets, earnings results will separate the winners from the losers. And, with many fearing a period of slower-than-usual growth, firms producing strong earnings growth figure to be particularly prized by investors.
If you're looking for companies likely to generate strong growth, you'd be wise to consider the writings of Martin Zweig. Zweig's stock recommendation newsletter was ranked number one based on risk-adjusted returns by Hulbert Financial Digest during the 15 years Hulbert monitored it, and the growth-rich strategy Zweig laid out in his Winning on Wall Street forms the basis for one of my more successful "Guru Strategy" computer models. In the seven-plus years I've been tracking it, a 10-stock portfolio picked with this strategy has gained 55.0%, or 6.4% per year. Over the same period, the S&P 500 has gained just 12.5%, or 1.7% per year.
It's not allowed to, according to a secret sanction by the government, says one report.
Shareholders would love to see the dividend returned to some level of normal, but that's not going to happen anytime soon, thanks to the tight government leash on the bank.
A "secret U.S. sanction" imposed on the bank by regulators has banned any increase of the dividend, The Wall Street Journal reports. Bank of America is trying to get that sanction lifted, and is negotiating with the Fed and the Office of the Comptroller of the Currency.
Despite a weak jobs report, evidence suggests the recovery will continue.
Stocks are lower today in reaction to the disappointing July employment report. Payrolls fell 131,000 for the month, building on June's loss of 221,000 jobs. Much of the recent weakness has been due to the government cutting Census workers.
But Philippa Dunne of the Liscio Report notes that there were still a few positive signs. Mainly, private employment gained 71,000, with half of that coming from manufacturing. In fact, manufacturing has added jobs every month so far this year -- a seventh-month streak that hasn't been seen since 1998.
And that's not the only good news. The team at the ISI Group in New York compiled the following list of positive data points we've seen over the past week.
The bank will soon start to generate significant free cash flow. What to do with it?
Wait! A bank with too much capital?
UBS forecast that the bank's Tier One capital ratio hit 10% by the middle of 2010 after it successfully used a rights offering to raise capital. That ratio could well hit 13% by 2013.
That certainly removes any need to raise capital.
Between New York's drilling ban and the Senate's all but giving up on an energy bill, it's been a bad week for drillers and shares.
By Jim Cramer, TheStreet
For natural gas, this is the year of living sadly. In the past couple of days, we saw a drilling ban in New York, where the out-of-work, underfed Southern Tier has a ton of the stuff; a terrible article in The New York Times about why we can't switch to all-natural-gas electricity in the U.S. because it is too expensive; and hope for an energy bill fade as Harry Reid all but gave up on the issue in the Senate.
In the meantime, we have seen natural-gas futures get stuck below $5 -- convincingly so -- during the greatest heat wave in years.
None of this is good. I can't sugar-coat it. Sure, the premise of the Times article was fanciful -- nobody is advocating a total dismantling of the huge coal-based utility infrastructure, just a shutdown/phase-out of the oldest, worst coal plants, which can be replaced with natural gas. That's what Canada is doing. If we had a president who cared about something other than clean coal -- talk about fanciful -- it would be happening right now.
The coffee chain is testing reaction to a new line of 'Refreshers' drinks.
Starbucks (SBUX) has figured out a way to sneak coffee into fruity summer drinks, and will soon begin testing them in its San Diego stores.
The drinks, which are being called "Refreshers," will be made of fruit. But their secret ingredient is a powdered extract made from unroasted green coffee beans.
The beans won't taste like coffee. The company is calling them "flavor neutral," in fact. They are designed to give the drinks a little bit of a caffeine jolt -- less than you'd find in regular coffee.
A list of some of the more outrageous costs airlines try to extract from customers.
This is so preposterous it's kinda funny. Airline fees are so out of control that one airline is now offering to reduce them -- for a fee.
The "boarding and flexibility package" by American Airlines (AMR) promises not to charge you to get on standby. And it will take $75 off the regular $150 fee if you need to change your flight. All for an additional fee of $9 to $19, The New York Times reported.
Got that straight? The fee frenzy doesn't stop there. Susan Stellin of the Times lists some of the most outrageous airline gouges:
The Brazilian president has a big say in the oil company's ability to develop new fields.
Forget about news that Petrobras (PBR) has made a new oil discovery off Angola with at least 500 million barrels of oil, or that it is beginning production from the Urugua offshore oil field this week.
The only discovery that counts for Petrobras shares is what price the Brazilian government will charge the company for as much as 5 billion barrels of deepwater reserves in the deep, deep water pre-salt deposits off Brazil's South Atlantic coast. (Petrobras is a member of my Jubak Picks 50 portfolio).
As part of a complex plan to finance the development of the offshore fields, such as the apparently giant Tupi field that Petrobras has discovered but now needs to put into production, the government plans to sell Petrobras 5 billion barrels of reserves. The company will raise the purchase price of the reserves through a stock offering.
Buzz about secret meetings between the Internet power players raises worries about network neutrality.
Sorry, Huffington Post, this is not the end of the Internet as we know it. But it is a very messy, very thorny issue, and the Internet's biggest players are trying to get a seat at the table in the early stages while we figure this all out.
Here's the core problem: Our Internet capability in the U.S. is pathetic. We have less broadband -- and slower connections -- than many countries in Europe and Asia. We should be talking about building new online superhighways (to use an old term), but instead we're trying to figure out who should play traffic cop.
J&J and Pfizer are among the sector's duds.
By Louis Navellier, editor of Blue Chip Growth
Health care stocks are a vital part of most investors' portfolios. The theory goes that people will always get sick, so these companies will always have healthy profits.
Well, unfortunately, some rough quarterly earnings reports and dips in share values in recent weeks have proved that even the health care sector is subject to some volatility and that no earnings are guaranteed.
Here are three pharma and medical blue chips that have not lived up to expectations and are hazardous to the health of your portfolio:
It is doubtful that second-quarter earnings will affect the sale of the company in any meaningful way.
Adult-entertainment icon (or dinosaur, depending on your perspective) Playboy Enterprises (PLA) reported second-quarter earnings results today that missed expectations by the proverbial penny.
Does it really matter?
For the period, the company stated that it had lost 16 cents per share in the quarter versus analyst estimates calling for a loss of 15 cents. Revenue in the period dropped to $56 million versus an expectation of $58 million.
If not for the prideful efforts of Hugh Hefner and his bid to buy outstanding shares at a premium valuation of $185 million, taking the company private, this stock would have little going for it.
Blockbuster movies also contribute to a 52% rise in earnings.
By Theresa McCabe, TheStreet
Viacom (VIA) said second-quarter earnings rose 52% as the company slashed expenses and profited from blockbuster movies such as "Iron Man 2" and "Shrek Forever After."
For the quarter ended June 30, earnings climbed to $420 million, or 69 cents per share, compared with earnings of $277 million, or 46 cents, in the same period a year ago. Earnings from continuing operations were 68 cents per share, beating analysts' estimates of 66 cents per share.
Total expenses fell 7.6% to $2.51 billion from $2.71 billion.
They misjudged the travel, industrial and medical sectors. If they're also wrong about tech, bullish investors could benefit.
By Jim Cramer, TheStreet
Maybe U.S. analysts just can't understand Europe. Maybe they are baffled by how Europeans think or work.
You know there's some disconnect simply by looking at three particular companies in three different industries: Allergan (AGN) in the health care sector, Priceline (PCN) in travel and leisure, and Eaton (ETN) in manufacturing.
Earlier this week, Allergan reported a fantastic number, and a great deal of that rally came from strength in Europe that the analysts just hadn't seen.
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Like many companies this winter, McDonald's blamed a drop in same-store sales on the weather. But could the fast-food giant's problems be bigger than a snowbank?
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[BRIEFING.COM] The S&P 500 sits right in the middle of today's trading range as sector standing remains little changed from our midday update.
Outside of the disappointing trade data from China, participants did not receive any noteworthy economic news today. This week in general will be pretty quiet with only Thursday's Retail Sales report for February (Briefing.com consensus +0.2%), and Friday's preliminary reading of the Michigan Sentiment Survey (consensus 82.0) expected to ... More
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