Archive for 2006

  • Dell Delays Quarterly Earnings Report
    , September 11th, 2006 at 9:35 am

    DOJ and the SEC are looking into the company’s accounting practices:

    The company postponed an analyst meeting that was to be held on Sept. 13 and suspended its stock buyback program. Dell said in a statement today that it will reschedule the New York analyst event to a later date.
    The investigations by the SEC and the U.S. Attorney for the Southern District of New York indicate the possibility of misstatements in prior financial results, Dell said. The Round Rock, Texas-based company said it plans to file the report as soon as possible and is cooperating with the investigations.
    “We will take any appropriate remedial or corrective actions to address any problems,” Chairman Michael Dell said in the statement.

  • Crossing Wall Street Five Years Ago
    , September 11th, 2006 at 6:36 am

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  • Adams Morgan: Now With 11% Fewer Crack Whores!
    , September 10th, 2006 at 1:14 am

    I thought I’d give you a few pictures of my ‘hood, the Adams Morgan section of Washington, DC.
    There’s no place in DC quite like Adams Morgan. Gay, straight, rich, poor, black, white, Hispanic, tranny vegans, goof-off stock bloggers, you name it, Adams Morgan has it.
    On Friday and Saturday night, the place turns into a frickin zoo. Eighteenth Street is home to some of the hippest bars and restaurants in the entire city. The place is packed and parking is a nightmare.

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  • Twelve Angry Men
    , September 9th, 2006 at 5:27 pm

    Don’t ever say this blog doesn’t present high culture.

  • Oil Is Down 15% Since July
    , September 8th, 2006 at 3:53 pm

    Today is another decent day for our Buy List. Since we don’t have any energy stocks, whenever oil falls, the Buy List tends to beat the market. The price of light sweet crude has now dropped over 15% since Bastille Day. I wonder if there will be a Congressional investigation into manipulation from the big oil companies. Eh…prolly not. I think the energy sector has even more room to fall.
    Our big winner today is Fiserv (FISV) which is up over 6% thanks to an upgrade from Prudential. Harley-Davidson (HOG) is inches always from a new 52-week high. The stock, however, is having trouble making it through $60 a share.
    In April 2005, Harley warned of slower sales and stock plunged. Since then, the shares have made an impressive comeback. The company is still doing well, although profits may not grow at quite the same rate as before. The stock is going for about 15.6 times this year’s earnings. Not a bad deal.
    Donaldson (DCI) is still looking good. After Wednesday’s big surge, the stock pulled back some yesterday, but it’s up again today.
    Another overlooked stock is Danaher (DHR). The company will report third quarter earnings on October 19. The current estimate is for 82 cents a share, which is probably too low.
    The big news next week will be the OPEC meeting on Monday, and the CPI report on Friday. The year-over-year headline rate of inflation should have a big drop due to the large number from a year ago. This should happen again next month because last September’s CPI was gigantic. This is a good example of why it’s sometimes important to focus on the core rate of inflation, instead of the headline rate.

  • More Problems for Homebuilders
    , September 8th, 2006 at 12:57 pm

    If you raise interest rates 17 straight times, it begins to have an impact. Today Lennar (LEN) became the latest homebuilder to slash its profit forecast. Last week, Beazer Homes USA (BZH) and KB Home (KBH) both slashed their forecasts.
    Lennar now says it’s going to earn $1.25 to $1.35 a share for the quarter. This is a big cut from the earlier forecast of $1.90 and $1.95 a share. For the full year, Lennar sees earnings of $8 to $8.25 a share, which is down from its previous forecast of $9.25 a share. I have a feeling we’re going to see more earnings warnings in the months ahead.
    Over the past year, the homebuilding sector has been absolutely mauled. The index is down nearly half from last year’s peak.
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  • How Good Are Economic Forecasters?
    , September 8th, 2006 at 9:52 am

    Not very good according to Martin Fridson. He looked at the median GDP forecast of some 60 professional forecasters.

    The median prediction was in the range of 3.1% to 4.0% in every single quarter. Perhaps not coincidentally, the actual quarterly GDP increase over the past 25 years (1981-2005) averaged 3.14%. The forecasters, in aggregate, perennially thought that one year hence, business conditions would be just about average. In reality however, actual GDP gains gyrated between 0.2% and 7.5%. The forecasters’ nearly inert consensus was all but worthless.

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    It seems that no matter what happened, the economists always believed in reversion to the mean. Fridson concludes:

    The imprecision of economic forecasts isn’t a comment on the forecasters’ intelligence or work ethic. Rather, it demonstrates that the economy is too complex a system to be adequately captured by existing modeling techniques. The rational response to this realization is a combination of caution and humility.

  • Wachovia Upgraded on Golden West Buy
    , September 8th, 2006 at 12:47 am

    From The Contra Costa Times:

    Shares of Wachovia Corp., the parent of Oakland-based Golden West Financial Corp. (GDW) fell along with the rest of the banking sector on Thursday, failing to react to an upgrade from Standard & Poor’s. S&P analyst Mark Hebeka pointed at the purchase of Golden West as a chief revenue generator, as well as a source of favorable synergy.
    Hebeka upgraded Wachovia to a strong buy from a buy, citing what he sees as a “compelling” valuation and the bank’s “strong growth prospects and sound business strategy.”
    The stock, however, has had trouble recovering from a slump since the acquisition was announced in May and remains 6 percent below its May highs.
    The market has remained skeptical of the transaction because of potential risks associated with Golden West’s portfolio of mortgages, according to Bear Stearns analyst David Hilder, who reiterated an underperform rating on Wachovia’s stock in late July.

  • Subliminal Stock Spams
    , September 7th, 2006 at 3:41 pm

    Ugh:

    Pump-and-dump stock campaigns work by spammers purchasing stock at a cheap price and then artificially inflating its price by encouraging others to purchase more (often by spamming “good news” about the company to others). The spammers then sell off their stock at a profit. Sophos experts report that pump-and-dump stock campaigns account for approximately 15 percent of all spam, up from 0.8 percent in January 2005.
    A new “pump-and-dump” stock spam campaign uses an animated graphic to display a “subliminal” message to potential investors. Animated GIF graphics are composed of a number of frames, which are shown in succession. This is often used for animation on websites, but has recently been adopted by spammers in their attempt to try and avoid detection by anti-spam products.
    In a spam campaign seen by Sophos researchers an embedded image attempts to artificially inflate the price of shares in a company called Trimax. However, unlike the many other similar scam emails the graphic briefly flashes up a message saying “BUY!!!” approximately every fifteen seconds.

    I’m not impressed. Bob Pisani is down to 11 seconds.
    In other news: “Suri Cruise Photos Expected to Fuel Stock Market Rally.”

  • It Just Can’t Get Any Bigger
    , September 7th, 2006 at 1:16 pm

    Peter Lynch said he remembers people telling him 25 years ago that Wal-Mart (WMT) just couldn’t get any bigger. That’s an argument against a stock you should always ignore. With capitalism, profits are like jello…there’s always room for more.
    Check out this chart of Eaton Vance, the asset manager (EV):
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    Pretty spiffy, no? Thirty years ago, you could have picked up some shares for about $4 a piece. Adjusted for splits, that comes to 2.7 cents a share. In thirty years, the stock is up 1,000-freaking-fold.
    So what’s Eaton Vance’s current market share of the mutual fund industry?
    One percent.