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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United, Delta and Alaska could buck the usual trend of a seasonal slump.

By TheStreet Staff May 18, 2011 12:34PM

Image: Airline (© Christie & Cole/Corbis)By Ted Reed, TheStreet

 

After a better-than-expected first quarter for the airline industry, a veteran analyst is recommending that investors buy airline shares now, despite their historical tendency to perform their best between fall and spring.

 

Deutsche Bank analyst Mike Linenberg, in a report issued Wednesday, said the outlook is good for "a contra-seasonal trade" after carriers largely managed to overcome a variety of first-quarter headwinds.

 

"History would suggest that the time to own airline shares is from the fall to the spring and to lighten up during the early summer," Linenberg wrote. "However, every once in a while airline shares are some of the summer's best performing stocks."

 

These 2 funds provide yields in a shaky market. Includes video.

By TheStreet Staff May 18, 2011 10:47AM

By Don Dion, TheStreet

 

In recent weeks, a variety of factors have helped to muddy many investors' market outlooks.

 

The ongoing commodities shakeup, concerns about the U.S. debt limit, and the ongoing political and economic turmoil facing regions including Europe, the Middle East and Northern Africa are reigniting fears and causing skittish investors to second-guess the strength and longevity of the market recovery.

 

Given these looming concerns, the relief that comes with sticking to the sidelines may be attractive. However, heading for the exits is not the ideal option. The recovery may be rocky, but investors who bail out now could miss out later.

 

These leaders can give important signals about the broader market. With one of their charts showing a bottom, investors should take notice.

By MoneyShow.com May 18, 2011 10:30AM
By Tom Aspray, MoneyShow.com

Sharply higher earnings from Dell (DELL) boosted its stock sharply in after-hours trading, which could help the market continue the rebound from late Tuesday. 

The market’s ability to reverse to the upside—with the Nasdaq-100 actually closing higher— may signal that the worst of the correction is over. A strong close on Wednesday would support this view.

If the market is ready to resume its intermediate-term uptrend, the relative performance (RS) analysis suggests that the technology sector may be able to take over leadership. As I noted last week (see 2 Key Sectors Top Out), the industrials and materials sectors are acting weaker than the overall market. 

Therefore, without a strong technology sector, it will be tough for the market to challenge or exceed the recent highs.

Of course, market leaders like Amazon.com (AMZN), Netflix (NFLX) and Apple (AAPL) will be watched closely, as the market tries to stabilize and move higher. The chart for one of these bellwether stocks looks as though it has indeed bottomed out.
 
Tags: internet

Don't buy or sell a stock by mimicking the moves of major fund managers without knowing the rationale behind their decisions.

By Jim Cramer May 18, 2011 9:15AM

jim cramerthe streetI don't know about you, but I am beginning to tire of the cottage industry that is seeing what funds own and what they are selling and buying, particularly if they are hedge funds. Let's see, Paulson still likes gold. Hmm, hold on to Novagold (NG). But wait a second, Soros sold his Novagold. In fact, he sold every gold. Maybe sell Novagold? Maybe short the SPDR Gold (GLD)?

 

Steve Cohen still likes cyclicals. But I see lots of mutual funds dumping cyclicals and buying health care. Meanwhile Buffett isn't doing much at all. Stay put with cyclicals, dump them? Who knows?

 

But there's one thing I know I don't know: the rationale behind the move. Will Steve Cohen be gone tomorrow? Is Paulson just a believer in gold no matter the price? Is Soros just taking profits?

 

After a rough 2010, Precision Castparts has a good future riding on the launch of Boeing's 787 Dreamliner.

By Jim J. Jubak May 17, 2011 6:06PM
Jim JubakOnly one question: Does Precision Castparts (PCP) have enough upside potential to make its shares worth buying? Or holding -- since I own them in my Jubak’s Picks portfolio?

The company’s business has clearly turned the corner after a tough calendar 2010. In 2011, Precision Castparts should profit from the recovery in aerospace, and in particular the launch of Boeing’s 787 Dreamliner.

If this were a typical cyclical stock, I know how I’d go about accounting for that recovery and valuing the shares. But Precision Castparts isn’t your typical cyclical, and that makes putting a target price on the shares quite a bit tougher.

Let me explain why.

With the typical cyclical, revenue and earnings plunge when the economy or the company’s industry goes into a downturn.
 

The recent spate of high-profile security breaches has focused attention on tech stocks such as Symantec, Fortinet and Websense.

By TheStreet Staff May 17, 2011 3:28PM

the streetBy James Rogers, TheStreet

 

The recent data breaches at Sony (SNE), Epsilon and EMC's (EMC) RSA security division provide ample evidence -- if any was needed -- that hackers are on a tear.

 

"For hackers, the RSA breach was akin to attacking Fort Knox," Laura DiDio, principal analyst at ITIC, told TheStreet. "The hackers are now more organized and the attacks themselves are becoming more sophisticated and more pernicious."

 

Corporate America's pain, however, could be a gain for investors, as recent events focus attention squarely on security firms capable of locking down data and networks. Cue Symantec (SYMC), Fortinet (FTNT) and Websense (WBSN), which tout their wares as a way for businesses to avoid embarassing data breaches.

 

Sales crews working overnight shifts. Black curtains in store windows. Early-morning staff meetings. Is Apple cooking up a new product?

By Kim Peterson May 17, 2011 3:21PM
Apple (AAPL) celebrates 10 years of retail Thursday, and rumors are swirling that the company has something big planned for its stores.

The technology site Boy Genius Report says it has heard that about 10 to 15 employees are signed up to work overnight shifts at each Apple store Saturday night. During those shifts, the employees must lock their cellphones away and will have to sign a nondisclosure agreement about their activities.

Apple will put up black curtains in its store windows during that time, the site reports, and install specialized hardware inside the store that night. Employees are getting special training, and all stores will have mandatory meetings Sunday.

Sounds intriguing. What could Apple be planning? 

The home improvement chains both report a surprise drop in first-quarter sales, but one stock is the clear winner.

By TheStreet Staff May 17, 2011 3:04PM

By Jeanine Poggi, TheStreet

 

In a head-to-head battle, Home Depot (HD) continues to reign supreme against Lowe's (LOW), according to analysts.

 

Here's a look at how the first-quarter earnings of the two companies stacked up:

 

Home Depot earned 50 cents a share on revenue of $16.82 billion, beating Wall Street profit estimates of 49 cents a share, but missing analysts' revenue projections of $17.06 billion. Lowe's posted earnings per share of 34 cents on revenue of $12.19 billion, falling short of forecasts of 36 cents on revenue of $12.54 billion.

 

Home Depot reported same-store sales decline of 0.6% versus Lowe's 3.3% decrease.

 

Is there finally enough evidence to go after Goldman Sachs?

By Motley Fool Pick of the Day May 17, 2011 12:45PM

By Matt Koppenheffer

 

In a piece earlier this year titled "Why Isn't Wall Street in Jail?" Rolling Stone fire-breather Matt Taibbi began with a quote from a former Senate investigator:

 

"Everything's [bleeped] up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that." [Censoring via The Motley Fool.]

 

The teddy-bear regulators
Many Americans resent the profound dearth of Wall Streeters sent to jail after the horrific financial crisis. It seems to be a particularly sore spot for Taibbi, particularly when it comes to Goldman Sachs (GS), the company he infamously tagged the "great vampire squid."

 

As selling pressure intensifies, important technical milestones are lost, clearing the way for additional broad market losses.

By Anthony Mirhaydari May 17, 2011 12:43PM

With Monday's sell-off, the bulls couldn't hold their line of defense, seen most clearly at the Russell 2000's 50-day moving average and the 1,340 level on the S&P 500. The bears are on full attack.

 

A similar downside breakout was seen back in March during the fallout from the Japanese earthquake and meltdown at the Fukushima Daiichi nuclear plant. That decline proved to be short-lived and was followed by a quick and decisive rebound.

 

But things are different this time. We've seen a huge shift out of cyclical sectors into defensives. Sentiment indicators have risen to levels not seen since the end of the last bull market. And we've seen a huge deceleration in the economic growth trend. All suggest this new downturn will last longer than March's speed bump.  Here's why.

 

The lawsuit says that after 3 days of training, the company dismissed an employee who asked to use a step stool.

By Kim Peterson May 17, 2011 12:38PM
You're a Starbucks (SBUX) barista who can't reach all the tools needed to do the job. Should Starbucks allow you a step stool?

That's at the heart of a lawsuit filed against Starbucks on behalf of Elsa Sallard, a dwarf hired to work as a barista in El Paso, Tex.

In the lawsuit, Sallard claims she was only allowed to train for three days before she was fired. She wasn't tall enough to do the job, and she asked to use a stool or a small stepladder. The same day, the lawsuit says, she was fired for posing a potential danger to customers and employees. 

The company relied on overseas business for its first-quarter profit. With video.

By Kim Peterson May 17, 2011 12:05PM
Wal-Mart's (WMT) U.S. sales slump is one of the worst in its history. Nothing the company tries here seems to work.

The retail giant reported a solid first quarter Tuesday, beating analysts' expectations with a 3.8% gain in profit. But the store relied on strong overseas business to overcome a sales drop in the U.S. that has stretched for eight straight quarters.

Meanwhile, other retailers in the U.S., including dollar stores and Target (TGT), are eating away at Wal-Mart's market share here. Wal-Mart executives said American shoppers are running out of money faster than before.

Post continues after this video of one investor discussing Wal-Mart's flaws: 

Commodities appear headed for volatility, so investors should be careful with resource-related funds.

By TheStreet Staff May 17, 2011 11:22AM

By Don Dion, TheStreet

 

At the start of this week, Joy Global (JOYG) stole the headlines with news that the coal mining equipment firm was planning to purchase LeTourneau Technologies from Rowan Companies (RDC) for $1.1 billion.

 

There are a number of ETFs that will be likely affected as more is learned about this deal.

 

The most direct way to gain access to the Joy Global deal is through the Market Vectors Coal ETF (KOL), which is designed to track some of the world's largest and most liquid coal-related companies. Currently, shares of JOYG represent 8% of its portfolio, making it the third largest position.

 

Other major KOL holdings include Bucyrus International (BUCY), Consol Energy (CNX) and Peabody Energy (BTU).

 

The PC giant says weak sales and slow spending will cut profits.

By TheStreet Staff May 17, 2011 11:18AM

By Scott Moritz, TheStreet

 

Hewlett-Packard (HPQ) slashed its outlook for the quarter and the year on soft consumer spending and weak PC demand.

 

Shares of HP were down 5% in pre-market trading Tuesday after the No. 1 computer maker was forced to release its earnings a day early due to a leaked memo from CEO Leo Apotheker that warned his management team of "another tough quarter."

 

The disappointing forecast comes just a week after switching and computer networking rival Cisco (CSCO) cut its outlook for the third straight time on deteriorating sales across several segments of the business.

 

The sector's outperformance has been surprising, but the current market correction brings risk.

By MoneyShow.com May 17, 2011 10:38AM
By Tom Aspray, MoneyShow.com

One of the surprising areas of market strength since the March 2011 lows has been the retail sector. In past years, this has not been a typically strong seasonal period for the group, but the Dow Jones Retailers index is up over 10% in just two months.

Many of the big retailers have reported strong earnings in the past week, including Macy’s Inc. (M), Kohl’s Corp. (KSS), and Dillards, Inc. (DDS), but strong earnings have not boosted all the stocks in this group.

The sharp increase in gas prices has kept many investors away from these stocks, as it was expected to have a serious impact on consumer confidence and limit shopping trips to the mall. Now that crude oil prices have softened, the better-than-expected earnings have been met with some good buying.

Of course, the key question now is whether the current market correction will set up a favorable entry point on the long side, or whether now is the time to get out of these stocks.
 

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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.

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