Top Stocks

By Gavin Magor, TheStreet

 

President Barack Obama backs a plan that would require health insurers to spend at least 80% of their premiums on medical care, a move that could result in penalties for 16% of health insurers.

 

On Monday, Obama presented his plan for health care reform, which included many provisions from the Senate's health care bill. One of the proposed rules would penalize health insurers that spend more than 20% of premiums on operational costs, such as salaries and marketing.

 

As of September, 93 of 587 health insurers that take in at least $1 million in premiums spent less than 80% of that amount on patient care, according to data compiled by TheStreet. The average portion put toward medical expenses is 87.8%.

 

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.

 

See: Five reasons Sears will die

 

I’m not impressed.

 

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.

 

 

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.

 

Written by Douglas Estadt

 

Ash Rust from StockTwits http://twitter.com/ashrust explains an options play he opened today with SanDisk.  Here’s how he played SNDK:

•  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)

Ash doesn’t think it will stay at 26 for too long, it may drop, volatility will go up, and the put will increase in value.  If this happens, he could sell for up to a 50% gain.

 

To hear more about Ash on SNDK view the video below

 

By Ted Reed, TheStreet

 

Toyota (TM) Chief Executive Akio Toyoda can’t just apologize and accept responsibility for the carmaker's mistakes.

 

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."

 

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.

 

Sun fails to come up. Water no longer wet.

Wal-Mart (WMT) comparable sales dropped at U.S. stores for the quarter ended Jan. 31. That's the first time ever. Ever. 

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:

 

President Obama offered a new health-care plan Monday, one that wants to do more to cap increases to 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,  

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.

 

It isn't just the gamblers losing money in Vegas these days. Nevada's 260 major casinos lost nearly $7 billion last year, ending in the red for only the second time ever.

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.  

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.

 

 

It's a sad sign of the times -- and of the state of the U.S. auto industry: One General Motors worker now drives an eight-hour commute to keep his job.

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. 

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.

 

 

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.