Top Stocks

One step back and one step forward on the IPO (initial public offering) of the Agricultural Bank of China.

I’ve repeatedly tabbed this IPO as the indicator I’m watching to figure out the health of China’s stock market in particular and its financial system in general -- and to time buys of Chinese stocks.

China’s already publicly-traded banks need to raise $40 billion in new capital this year to meet requirements from bank regulators for higher reserve levels and to meet demands from the economy for new loans.

 

How exact a science is movie tracking? Lately -- not very.

Over Memorial Day weekend, Warner Bros.' "Sex and the City 2" was forecast to take in around $60 million. It ended up making just $36.8 million.

A week earlier, DreamWorks Animation's 'Shrek Forever After" was on track to take in about $90 million, but it ended up opening to just $70.8 million.

Then last weekend, the opposite happened with Sony's "The Karate Kid." Its domestic opening beat the high end of pre-release forecasts by a stunning $20 million.

What's going on?

 

Fitch has downgraded BP (BP) by six notches. Yeah, you read that right: BP is almost at junk status.

Investors responded Tuesday by unloading BP bonds, sending yield soaring. The yield for one bond that matures in 2013 rose to 8.7%, The Wall Street Journal reported. Another bond that matures next year is getting an 8.5% yield.

That sounds awfully attractive. But before you consider bonds, you need to think about another "b" word: Bankruptcy. That's the real danger to BP bond holders, the Journal reports. 

Be as critical as you want about Warren Buffett and Bill Gates. But when it comes to charitable giving, no one does it better.

The two have already pledged vast amounts of money to charity. Now, they want other billionaires to do the same. For the last year, Fortune reports, they've been pleading their case to the likes of David Rockefeller, Michael Bloomberg and Oprah Winfrey.

Fortune calls it the biggest fundraising drive in history: "They are driving to get the super-rich, starting with the Forbes list of the 400 wealthiest Americans, to pledge -- literally pledge -- at least 50% of their net worth to charity during their lifetimes or at death." 

By Jeanine Poggi, TheStreet

 

How many retailers does it take to equal the size of Wal-Mart (WMT)?

 

The answer: it takes a full six of the nations' largest companies -- including CVS Caremark (CVS), Costco Wholesale (COST), Home Depot (HD), Target (TGT), Walgreen (WAG) and Lowe's (LOW) -- to equal the scale of Wal-Mart's revenue.

 

Wal-Mart racked up revenue of more than $400 billion in 2008, which was six times that of rival Target, and the same as these six retailers combined, according to research conducted by Consensus Advisors, a boutique investment banking firm.

 

Poor Sears. Sears Holdings (SHLD), the retail stock behind the massive U.S. department-store chain Sears and discount retailer Kmart, peaked at nearly $200 a share in 2007.

Sears' shares hasn’t come anywhere close to that number in the last few years. More recently, the company has only had one quarterly profit in the last four reporting periods -- including an unexpected loss in the first quarter.

There’s little wonder Sears' stock has struggled recently, as big markdowns on pricey appliances have been part of an effort to connect with consumers. While sales haven’t really budged, margins have dropped through the floor – narrowing to a slim to 28.2% in the most recent quarter, from an already anemic 28.6% the year before.

 

By Jim Cramer, TheStreet

 

The math on this BP (BP) deal is starting to make sense. If you are blowing $500,000 a day on an oil rig, there had better be something like 50,000 to 60,000 barrels a day spewing out of it, or else it wouldn't be worth the money.

 

I was always skeptical of the initial reports of the spill, because if there were really just a couple of thousand barrels a day leaking out of a big hole in the ground that they spent a fortune drilling, then what kind of risk-reward was that? If it was only spewing 1,500 barrels -- heck, how about 3,000 or 5,000? -- you've got a losing proposition on your hands.

 

Now we are getting closer to the truth. This well, perhaps one of the greatest finds in history, was a terrific bargain for the company, despite the expense of the Transocean rig. It was such a bargain that you have to wonder why in heck would BP stint on anything? It should have gone full-out deluxe. It obviously didn't.

 

The government of German Chancellor Angela Merkel faces a critical vote on June 30. If it loses the vote, the country will be plunged into new elections just as German opposition to the euro debt bailout is near a peak.

There's some chance that a government opposed to bailouts for Greece, Spain, and Portugal could win those elections. And an even better chance that any Merkel-led government that survived would be much weaker. 

That could well send the eurozone back into crisis. (I'm no fan of the Merkel government or its policy of budget cuts for the eurozone's key economy, but I can't see how a weaker Merkel government or a coalition opposed to Germany's contributing to fix the euro debt crisis would help. For more on Merkel's proposed budget cuts, see this post).

 

Updated at 12:30 p.m.

Tuesday was not a good day for iPhone fans.

People trying to pre-order Apple's (AAPL) new iPhone 4 ran into one problem after another with AT&T's online ordering system, leading AT&T to suspend the program altogether.

Apple was able to get pre-orders for 600,000 new iPhones, but admitted that many customers were turned away or abandoned the process altogether. Apple has apologized for the problems.

 

Well, look at that. Deere (DE) shares are up 3.2% Tuesday. Could it be because "super mowers" are the next big thing?

Deere is seeing an unexpected jump in mower sales this year, The Wall Street Journal reports. Even though the economy is still recovering, some people are apparently crazy about premium riding mowers with more bells and whistles than some cars.

• Check out MSN Money's New Investor Center

"Sun shades, iPod compartments, cruise control, chrome hub caps and even alternative fuels are all part of the mower mania," writes Gwendolyn Bounds.

 

Tesla Motors is very optimistic about its upcoming initial public offering.

When the electric-car maker first set its sights on going to market, it was hoping to raise $100 million. But on Tuesday, the company uppedthe shares it will offer to 11.1 million at between $14 and $16 a share -- bringing the total raised to a cool $178 million.

Is Tesla a little too excited here? Or is the market that enthusiastic about a company that makes a $109,000 luxury car?

 

By Scott Moritz, TheStreet

 

Apple's (AAPL) winning streak has been good for its investors and good for Apple, but seldom has a tech success shared so little wealth with the rest of the sector.

 

Call it hardball or capitalism in its purest form, but Apple's autocratic approach to business and the current sway its products have in the market have been nothing but punishment for other players.

 

Sure, to the winner go the spoils and all that -- Apple shares are up ten-fold in the past 10 years. But unlike past stock rockets riding surging tech trends, Apple's rise has not been particularly uplifting for investors outside Apple.

 

By Jake Lynch, TheStreet

 

The selloff has put certain stocks on sale.

 

The S&P 500 Index ($INX) has slumped 10% from a 19-month high in April. And Greece's debt woes helped sink U.S. stocks again yesterday after they rebounded earlier in the session. Moody's downgraded Greece's credit rating by four levels to junk status.

 

Investors should consider the following companies, each of which ranks as analysts' favorite pick within its respective sector. Euro-region pessimism presents an opportunity to bargain-hunt in U.S. markets.

 

 

By Robert Hsu, editor of Asia Insider

On Thursday, the Hong Kong stock exchange approved Agricultural Bank of China Ltd.’s application for a $20 billion to $30 billion initial public offering. Hong Kong’s approval now makes the Chinese bank’s IPO a virtual certainty, and the stock could begin trading on both the Hong Kong and Shanghai stock exchanges by mid-July. The deal would represent the world’s largest-ever IPO.

I understand how hungry investors are for picks in China right now, as 2010 has been less than fruitful for the country’s equity markets after a red-hot 2009. The Shanghai Composite Index is down nearly 22% year to date. So investors should rejoice over the opportunity created by the Agricultural Bank of China IPO, right? Wrong.

 

By Jim Cramer, TheStreet

 

Just go buy Deutsche Bank (DB). Just go buy Barclays (BCS). If you really and truly believe that our investment banks will not be able to offer hedging and foreign exchange protection on bonds, if you really think that we are going to wipe out investment banking competitiveness at the altar of some Arkansas senator's desire to raise less corn and more hell, William Jennings Bryan-style, then just go buy the winners.

 

Deutsche is a well-run bank. It is in the strongest country in Europe with a healthy stock market that's barely down. Barclays got the good part of Lehman and is making real strides in the investment banking business without financial regulation.

 

These two banks stand to emerge as gigantic winners off of financial regulatory reform, if you are to believe the stories -- which I don't. If the stories were true, these two stocks would be much higher. But you know what? As the late great Sam Cooke crooned, "Don't fight the feeling."