Top Stocks

By Daniel Dicker, TheStreet

 

Of all the energy names that have been mercilessly hammered during the stock market's recent moderation, no group has been more beaten up than the drillers.

 

Over the last three months, the Oil Service Energy Index (OSX) is off close to 25%, while the S&P 500 ($INX) is down a bit more than 11%.

 

And it is here that perhaps the greatest opportunity lies, in a sector that has been universally sold based on the sinking of the Transocean Deepwater Horizon rig and subsequent Gulf of Mexico oil spill.

 

No secret that commodity prices have plunged on fears that global economic growth is fading. Or in the case of China, slowing from near 12% annually to something like 8% or 9%.

And no secret that the prices of commodity stocks have plunged as well. Shares of copper, gold, and molybdenum producer Freeport McMoRan Copper & Gold (FCX) are down almost $30 from their April 5 high as of the close on Tuesday. That's a drop of 33% in three months.

But commodity producers, especially copper producers, are starting to talk about a actual commodity shortages in 2011 because commodity producers are responding to current low prices by slowing expansion plans or putting off opening new production completely.

 

Buying a car is not easy. Several people I know have been burned by a car salesman or the financing process, and those stories make car shopping a slightly terrifying experience.

You'd think that car buying would be a good fit with the new consumer protection agency that's part of the financial-reform bill in Congress. But no. The nation's auto dealers fought back hard, and as a result the new agency will leave them alone.

How could this happen? James Surowiecki has a nice explainer piece in the New Yorker. Auto dealers succeeded by convincing Congress that they were not part of Wall Street. Instead, they portrayed themselves as American as apple pie, and really, who could be mean to pie? 

By Scott Moritz, TheStreet

 

Talk about a heat wave.

 

With no cool-down in sales in the forecast, Apple (AAPL) is raising its iPad production for July.

 

It has ordered its Taiwan manufacturing partners to boost output to between 2.3 million and 2.35 million this month, according to a DigiTimes report.

 

By Jim Cramer, TheStreet

 

I'm down in Mexico, and wouldn't you know it, I bumped into a group of old-timers, including Benjamin Graham and David Dodd.

 

OK, not really. These investing gurus passed away more than two decades ago. But let's try to imagine such a scenario.

In my mind, we would play a round a golf. They would talk about the looming Death Cross -- the intersection formed by the 50-day moving average falling below the 200-day moving average, traditionally thought to signal a bear market -- in the S&P 500 ($INX) and how it was spooking them out of their growth positions.

 

Over on the 19th hole, while having a couple of cold Tecates, the two wise men would lament that they had to sell stocks they had bought for 50 cents that were now worth a dollar. Dodd would say "the lines had crossed -- it's all over."

 

I keep reading all the reasons the pundits give for why the economic data show we are in a recovery but the stock market is in a decline. My reason is as good as anybody's: We got the funk.

A funk is a state of depression, and that seems to be what the country has lately. Nothing seems to be going right. It's not any one reason. It's just a series of bad news reports that seem to have a cumulative effect, so we got the funk.

The housing market is in the toilet. That's the only way I can describe it. I just returned from south Florida, and news reports there say that more than 50% of the homes are "under water."

I talked to a guy who thought he had a bargain dream home that he bought just five years ago for $200K. It's 1,000 square feet, 3 bedrooms, 2 baths on a 125 x 125 foot lot. Houses in his neighborhood are all being listed for under $100K, and banks have had some short sales for between $45K and $75K. He doesn't feel good about his investment.

 

On Barchart Portfolio Blogs, I bring to your attention stocks you might want to consider for your portfolio. Every weekend I try to ignore all the headlines and conjectures and just look at the facts. Barchart is the best place to mine the data I need. I use three yard sticks because one just doesn't give me the whole picture. Let's see where we ended the week.

Value Line Index -- Contains 1700 stocks, so I think it is a better representation of the market than the narrow S&P 500 or even narrower Dow 30 -- Very ugly this week

• Sell signals on 12 of the 13 Barchart technical indicators for a 96% overall sell signal
• Down 6.32% for the week and 8.54% for the past month
• Friday closed below its 20, 50 & 100 Daily Moving Averages
• Trend Spotter sell signal
• Closed Friday at 2193.31 -- Way below its 50 Day Moving Average of 2422.33

 

We heard an extraordinary admission from Apple (AAPL) today regarding the antenna and reception problems on the new iPhone 4.

Apple gave a long-winded apology, saying it was "stunned" to discover that it completely blew the way it displayed signal bars on the phone. So to fix it, Apple is adopting a formula from AT&T (T).

How is this revelation-slash-apology sitting with Apple fans and tech observers? Not too well. 

Eric Jackson of Ironfire Capital joins us to set the facts straight regarding one of his value investments, Orient Paper (ONP).  

Jackson is confident in ONP for the long haul, and the following reasons helped him reach that conclusion:

• His visit to the company’s China headquarters, meetings with the CEO and CFO.

 

We now have more details and better projections on the European-bank stress test and on which banks are likely to fail the test.

The smaller-than-expected demand -- just $162 billion -- for three-month loans from the European Central Bank shows, I think, that the European banking sector is in better shape, as a whole, than initially feared. (For more on why this smaller draw is positive news, see this post.)

But the fact that some banks felt the need to grab up roughly $140 billion in six-day money yesterday, July 1, shows that some banks are still having trouble raising money in the financial markets. Analysts estimate that roughly 170 banks in Europe (out of 1,100) are having trouble accessing the markets for capital.

 

While the U.S. government's balance sheet has been getting the lion's share of the attention lately, there's another American balance sheet that deserves investors' attention: corporate America's.

When the financial crisis hit in 2008, many U.S. companies began planning for the worst. And by cutting costs and streamlining operations to prepare for a potential depression, they put themselves in a very good position when the economy began to rebound.

According to one recent study by Credit Suisse, U.S. companies collectively have all-time-high levels of cash as a percentage of market cap and aggregate free cash flow yield.

 

The market hasn't been very kind lately, so there hasn't been a lot to write about. Today, while screening on Barchart for stocks hitting new highs, I can across Hospira (HSP).

It's a specialty pharmaceutical and medication-delivery company that makes products for patient care. Its portfolio includes acute-care injectables and tools to manage medications and infusion therapy. It also offers manufacturing on a contract basis.

Generic medicine has a great future as medical care providers attempt to rein in costs. Hospira has a generic chemotherapy drug, Oxaliplatin, that should be a money maker. The company is now in the U.S., Europe and Asia, where socialized medicine in some of those countries likes generics. 

By Jim Cramer, TheStreet

 

We've thrown an awful lot of conventions out the window these past few months. We no longer think, for example, that there will be any new money in the market at the first of a new quarter, even if it is the second half. That used to be a big bump. We no longer expect or even talk about a summer rally. Unlike at the end of last year, there was no markup whatsoever. Favored stocks meant nothing.

 

Also, we no longer expect buyers to be attracted by yield, even though I can tell you that won't last, given the price of the 10-year T-note and the competition from the likes of DuPont (DD), 3M (MMM) and General Mills (GIS).

 

We don't care that Ford (F) has more money than we thought, or sales either. Autos used to be big.

 

Financial markets have been hoping that China would manage to slow its economy -- in order to keep inflation under control -- without causing a crash in either the stock or real-estate market.

There's mounting evidence that China is going to successfully engineer exactly the kind of "soft landing" that financial markets said they wanted.

But today, at least, stock markets don't seem very happy that they're getting what they wished for.

 

European airline Ryanair is determined to install stand-up airline seats -- even though regulators say the setup doesn't meet safety requirements.

The airline said it will start testing "vertical seating" next year, according to the Daily Mail. That's around the same time it will begin charging passengers one pound ($1.50 U.S.) to use the airplane lavatory.

• Check (seated) airfares on Bing Travel

The standing-room-only space will be ridiculously cheap, starting at $6, the airline says. The bathroom fee will help recover the money the airline loses on such cheap fares.