Investors know what's working and what's not. Jim Cramer says these stocks could power higher through the end of the year.
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Fourth quarter profits beat expecations, but results may be temporary.
Sears Holding (SHLD) reported earnings today that beat expectations. Helped by a stronger than expected retail sales environment at both Sears and K-mart, the company posted a profit of $3.69 in the fourth quarter.
Analysts were expecting a profit of $3.54. Shares are trading higher on the news.
Sears is benefiting from significant cost cutting and a search for discounts by consumers, but before you pop open the cork to celebrate consider that the results may be a last hurrah for a company running on fumes.
I’m not impressed.
Bigger rivals are making deals for firms like Smith, Airgas and Millipore before prices go higher.
By Jim Cramer, TheStreet
Smith International (SII), Airgas (ARG), and now Millipore (MIL) all had one thing in common: They used to be highflying stocks before they were taken down by the Great Recession and, more pertinent, the Second Great Crash.
As we look back at a period when the Dow fell from 14,000 to 6300, we can recognize that many stocks were totally collateral damage.
A filtration company, an oil field services company and an industrial gas company all fit that bill.
Lowe's beats Wall Street with its fourth-quarter earnings but misses its own guidance. Huh?
So, when does beating low expectations stop counting as good news?
It's an important question for the stock market and the economy as a whole. After easy-to-beat earnings comparisons in the first and second quarters, stocks face a bigger challenge in the third and fourth quarters of 2010 as they pass the absolute bottom for the economy. (For more on how earnings comparisons get tougher as 2010 goes along, see this post).
Monday, before the stock market opened, Lowe's (LOW) reported fourth-quarter 2009 earnings of 14 cents a share and revenue of $10.17 billion. The results were above Wall Street expectations of 12 cents a share in earnings and $10 billion in revenue, but below the company's own guidance for 15 cents a share and $10.3 billion in revenue.
An options play examined
Written by Douglas Estadt
- Shorted Mar. 19: 31/32 calls
- Shorted the 31 call and bought the 32 (this way he’ll reduce risk significantly)
- Sold the call @ .60 and bought the 32 call at .37
He thinks that it’s not going to go too much further up and at the same time is giving himself another 5-6 % of room. This will pay 30% as long as SNDK closes below 31 on March expiry.
- Bought Mar. 26 puts at .37 (with the puts he is genuinely shorting the stock)
To hear more about Ash on SNDK view the video below
Toyota executives, led by CEO Akio Toyoda, seek to revive the company's flagging image when they appear at congressional hearings this week.
By Ted Reed, TheStreet
That much is expected when Toyoda and other executives appear at two congressional hearings this week. Toyoda will testify before the House Oversight Committee on Wednesday, but other Toyota executives will attend the Tuesday session of the House Energy and Commerce Committee.
"It's not enough to say he's sorry," says Satish Jayachandran, associate professor of marketing at the University of South Carolina. "In Toyota's case, the issue goes to the root of the car, so they have to show clarity to explain the problem and to address what's being done."
Big profits and big bonuses have made the investment bank so unpopular, they've turned to a PR firm for damage control.
By Jim Woods, InvestorPlace.com
PR firm Public Strategies knows a thing or two about damage control. One of its headline clients in recent years was President George W. Bush, who saw his approval rating stumble to a historic low of 22% during the course of his presidency.
Now, the Texas PR giant has a new client that's as dubious as Dubya ever was -- much-maligned investment bank Goldman Sachs (GS). Record profits and billion-dollar bonuses at the Wall Street firm have really rubbed some folks the wrong way, and the company is concerned that its image problem could cause serious trouble if not addressed.
So Wal-Mart suffers a 'bad' quarter. But a deeper look at the numbers shows some not-so-bad results.
Sun fails to come up. Water no longer wet.
Time to add this company to my watch list for a buy some time within the next three months.
If you're looking for thin reeds (see this post), here's another one that says U.S. consumers are feeling better about themselves:
Investors are largely ho-hum about a proposal to limit increases to health insurance rates.
But even with this potential threat hanging over them, Humana (HUM), UnitedHealth (UNH) and other health insurance stocks were doing just fine Monday. Investors apparently don't think Obama's proposal will see the light of day, MarketWatch reports.
Adding fuel to the debate is a plan by one health insurer, WellPoint's (WLP) Anthem Blue Cross, to hike rates in California by as much as 39%. Obama is proposing to allow the Health and Human Services Secretary to block rate increases that are deemed unfair,
The CARD Act might help banks by making their lending businesses less risky over time.
By Lauren Tara LaCapra, TheStreet
New credit-card rules that go into effect today will make the industry less profitable, but also less risky, for the country's largest card lenders and issuers.
Credit cards had become cash cows for big firms like Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM) and Capital One (COF). Credit cards provided $23 billion in fees alone last year, according to the advisory firm R.K. Hammer, and also have higher interest rates than most other types of consumer debt.
Those penalty fees soared 21% from 2008 while the average interest rate has climbed 2 percentage points during the past six months to 14%, according to CreditCards.com. Customers with the worst credit have been hit the hardest, with their average rate surging to 24.86% from 14.29% over the same period of time.
Nevada casinos lost money last year -- for only the second time in history.
To find one source of the problem, look no further than the bright lights of the Las Vegas Strip -- home to major properties for Wynn Resorts (WYNN), Las Vegas Sands (LVS) and MGM Mirage (MGM).
Casinos there took the bulk of the hit, reporting a $4.1 billion loss for the year, according to the Las Vegas Sun. That's a 686% drop from the previous year.
Netflix faces stiff competition in streaming content from cable providers Comcast and Time Warner Cable.
By Jason Notte, TheStreet
Netflix (NFLX) is pushing the envelope it wants to escape, but the company's strictly digital future faces a very long wait.
Netflix's deal for new releases and streaming content with Warner Bros. announced in January, expansion of streaming service to all three major gaming consoles by spring and growth amid the misfortunes of its disc-renting counterparts all coincided with an 81% hike in Netflix shares during the past year. Netflix's earnings last quarter were just as rosy, as $444.5 million in revenue brought its 2009 take to $1.9 billion, or 22% more than 2008, and 1 million more subscribers swelled Netflix's ranks to 12.3 million.
Netflix, which aims to boost net income as much as 18% this year, is slowly moving away from its DVDs-by-mail business model that was a huge innovation when it was launched a decade ago. However, Netflix faces stiff competition in streaming content from cable providers Comcast (CMCSA) and Time Warner Cable (TWC), which are looking for new ways to wrest money from millions of subscribers.
An auto worker decides to stay with GM -- even though that means working 500 miles away.
The Huffington Post has the story of Michael Hanley, who faced losing his job after GM shut down the Wisconsin plant he worked at. He could either look for a new job where there were few available, or track down a GM opening, wherever that may be.
He decided to keep his GM paycheck and health insurance, even though that meant working in Fairfax, Kan. Once a week, he drives back home to see his wife and children -- a round-trip journey of more than 1,000 miles.
I just don't think investors are willing to see another big slide without jumping in.
By Jim Cramer, TheStreet
You always need to fret when the S&P 500's proprietary oscillator breaches five, and when it soared to six and change after Friday's session I marveled that it could have gotten there so fast. Of course, a couple of weeks when the S&P roars 3% will do it every time, especially when a lot of it came when no one expected it.
But how worried should we be? Now that we have seen the fourth quarter of so many companies -- a quarter that got stronger throughout the market -- it's not clear that the worry includes more than a fear that a 15 multiple on future earnings might go to 14, with 13 always a possibility but not a likelihood when you consider that so many estimates are based on the economy continuing to stumble along both here and in Europe, the latter being a source of weakness for just about every company.
What really struck me, though, is how low the multiple is for so much of tech. Hewlett-Packard (HPQ) had one of the best quarters out there and it is selling for 11 times earnings, for heaven's sake. What is that all about? With more than $2.5 billion in stock bought back and a positive outlook for so many of the company's businesses, I find that multiple unfathomable. But Intel (INTC) and IBM (IBM) have very similar multiples and these companies are throwing off cash and coming off remarkable quarters too.
The Tiger saga is supposedly costing billions, but his faith can help you make money in the market.
It is hard not to be cynical regarding the Tiger Woods saga, but the golf king’s recent press conference included subtle insight that investors can use to beat the market.
Perhaps this story is worth watching after all.
Tiger’s misdeeds are the latest in a long line of boorish celebrity behavior followed by the obligatory public apology. It really is an old story.
So too is Tiger’s solution.
Your guess is as good as mine to explain why the market does what it does. I'm just here to report the facts as I see them.
First let's visit the Conference Board's report on the Leading Economic Index -- LEI. You'll remember that this is a once a month report I use to get a quick gauge on the state of the economy. The LEI was up .3% for the tenth month in a row with the Coincident Economic Index up .2% and the Lagging Economic Index is still declining at .1% but slowing. That makes 2 up and the Lagging slowing -- good signs of good things happening.
Now on to my 3 Barchart indicators that I follow:
The Value Line Index -- contains 1700 stocks so it's broader than the S&P 500 and the narrower Dow 30 -- up 3.45% for the week which is the second week in a row of price appreciation
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The S&P 500 manages to keep a deathgrip on 2,000, but key areas of the market are already buckling under pressure.
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[BRIEFING.COM] The headlines generally favored Tuesday being another good day for the stock market. Instead, it was just a mixed day with modest point changes on either side of the unchanged mark for the major indices.
For the most part, the stock market was a sideshow. The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex.
Dollar strength was at the heart of the weakness in ... More
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