Archive for November, 2007
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Web Freebies
Eddy Elfenbein, November 24th, 2007 at 4:33 pmThis is cool. Business Week has listed 101 freebies on the Web.
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The World’s Largest Outlet Mall
Eddy Elfenbein, November 24th, 2007 at 3:53 pmIn the eyes of Europeans, the United States has become one enormous outlet mall:
Hours after her flight from Dublin landed in Boston on Thanksgiving, Alice Kinsella headed in a white van with a dozen relatives and friends to Wrentham Village Premium Outlets. The 36-year-old has never visited Boston, but she is bypassing the sights for an extended weekend of binge shopping that started at midnight yesterday.
For Kinsella and other Europeans, America is one big discount bin, thanks to a weak dollar that slid this week to another record low against the euro. As a result, tourists are spending thousands to travel to the United States to snag blockbuster bargains on everything from iPods to designer clothes and handbags.
By 4 a.m. yesterday, Kinsella had rung up nearly $2,000 in Christmas presents and winter clothes, including a $79 black leather jacket at Guess that she estimated would cost more than $250 in Ireland.
“The bargains for us are so great,” said Kinsella, who paid $1,000 for a flight and hotel but expects to save even more on purchases here. -
The S&P 500 Is Down for the Year
Eddy Elfenbein, November 22nd, 2007 at 12:10 pmSince the start of 2007, the S&P 500 is down 0.11%.
Including dividends, the index is up 1.56%. The Wilshire 5000, which is the broadest index, is up 0.22% for the year. With dividends, it’s up 1.72% -
Michael Strahan’s Mad Money Outtake
Eddy Elfenbein, November 21st, 2007 at 12:39 pm -
Your Guide to the Subprime Market
Eddy Elfenbein, November 21st, 2007 at 10:43 amIf you have no idea what the subprime market is, this paper is a pretty good guide. Even though it’s written by economists, much of it is in readable English. It runs 26 pages, but a lot is charts and graphs.
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The 10-Year T-Bond Yield Plunges
Eddy Elfenbein, November 21st, 2007 at 10:21 amJust five months ago, you could have locked in a 10-year T-Bond at 5.33%. Earlier today, it hit 4.003%.
From Bloomberg:“What we’re seeing is a panic demand,” said David Ader, head of U.S. government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital. “Liquidity is a great problem.”
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Computer Problems Delay Zimbabwe’s Inflation Report
Eddy Elfenbein, November 20th, 2007 at 12:19 pmExperts believe inflation jumped from 8,000% in September to 15,000% in October.
Zimbabwe’s Central Statistical Office (CSO) was due to issue the figures last week. CSO acting director Moffat Nyoni, however, told Reuters on Monday they were not ready because commodity shortages had affected the collection and calculation process.
“I am afraid the figures are not yet ready, and they may not be available for a while,” Nyoni said.
“We have some problems – a computing problem – in that we have to find a formula of measuring prices of goods, some of which are not available on the (formal) market and which are in short supply in the economy,” he said. -
Medtronic’s Earnings
Eddy Elfenbein, November 20th, 2007 at 10:35 amShares are Medtronic (MDT) are much higher today. Actually, the stock is really gaining back much of what it lost over the past month. MDT got pounded one month ago with the company said that it would halt distribution of certain heart defibrillator wires.
The good news is that the sales impact is less than what the company, and Wall Street, expected. Medtronic said that the Sprint Fidelis heart wire hurt second-quarter earnings by nine cents to 10 cents per share. For the quarter, Medtronic earned 58 cents a share which was a penny less than last year. Sales rose 1.5% to $3.12 billion.
The AP reports:“This was a tough quarter,” President and CEO Bill Hawkins said. “We feel we have made solid progress over the past five weeks” since the recall was announced, “but clearly, much work still remains.”
Medtronic reported $1.15 billion in revenue in its largest unit, Cardiac Rhythm Disease Management, which makes pacemakers and defibrillators. The recall hurt revenue in that unit by $130 million, and it also absorbed $31 million in costs to write off the Sprint Fidelis leads recalled during the quarter. Last month, Medtronic had predicted a $150 million to $250 million loss of second-quarter revenue and inventory write-off costs of $15 million to $20 million.
When the Sprint Fidelis problems were discovered, Medtronic moved quickly to go back to its Sprint Quattro lead, including seeking regulatory approval to sell it in Japan. Hawkins said the company expects approval for Japanese sales by April.
One Medtronic product has actually benefited from the recall: CareLink, Medtronic’s system for monitoring its implanted defibrillators. The potential to spot problems such as the broken Sprint Fidelis wires has prompted more interest in CareLink, said Pat Mackin, president of the Cardiac Rhythm Disease Management unit.
“I can tell you that I’ve personally been to centers that were not interested in CareLink, and they want to put every single patient on it,” he said.
Sales grew in other Medtronic units. Spinal revenue rose 10 percent to $660 million, and CardioVascular revenue (which includes stents) grew 8 percent to $490 million.
Medtronic said revenue from outside the U.S. grew 12 percent to $1.17 billion, including $73 million from favorable currency exchange rates.
Medtronic doesn’t give quarterly guidance, but Ellis said he would not be surprised if the consensus of analysts remained around $2.52 per share for the full year. Analysts polled by Thomson Financial were predicting full-year earnings of $2.54 per share. Ellis said revenue should accelerate in the second half of the year.Here’s a look at MDT’s sales and earnings for the past several quarters:
Quarter………..EPS………….Sales
Jul-01…………$0.28………..$1,455.70
Oct-01………..$0.29………..$1,571.00
Jan-02………..$0.30………..$1,592.00
Apr-02………..$0.34………..$1,792.00
Jul-02…………$0.32………..$1,713.90
Oct-02………..$0.34………..$1,891.00
Jan-03………..$0.35………..$1,912.50
Apr-03………..$0.40………..$2,148.00
Jul-03…………$0.37………..$2,064.20
Oct-03………..$0.39………..$2,163.80
Jan-04………..$0.40………..$2,193.80
Apr-04………..$0.48………..$2,665.40
Jul-04…………$0.43………..$2,346.10
Oct-04………..$0.44………..$2,399.80
Jan-05………..$0.46………..$2,530.70
Apr-05………..$0.53………..$2,778.00
Jul-05…………$0.50………..$2,690.40
Oct-05………..$0.54………..$2,765.40
Jan-06………..$0.55………..$2,769.50
Apr-06………..$0.62………..$3,066.70
Jul-06…………$0.55………..$2,897.00
Oct-06………..$0.59………..$3,075.00
Jan-07………..$0.61………..$3,048.00
Apr-07………..$0.66………..$3,280.00
Jul-07…………$0.62………..$3.127.00
Oct-07………..$0.58………..$3,124.00
Here’s a chart of Medtronic’s stock and earnings-per-share. The stock is in blue and follows the left scale. The earnings are gold and follow the right scale. I scaled the lines at a ratio of 25-to-1, so when the lines cross, that’s a P/E ratio of 25. Even though earnings have climbed, the stock hasn’t.
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Third-Quarter Earnings By Sector
Eddy Elfenbein, November 19th, 2007 at 1:31 pmSo far, it looks like earnings for the S&P 500 will decline about 8.5% from last year. The pain, however, is not being felt equally.
Health Care………………………..14.80%
Information Technology………..13.68%
Consumer Staples……………….12.61%
Industrials………………………….11.82%
Materials…………………………….5.50%
Telecommunication Services…..4.09%
Utilities……………………………….0.73%
S&P 500……………………………..-8.48%
Energy……………………………….-9.92%
Financials…………………………..-33.15%
Consumer Discretionary………..-38.94%
The lousy number for the Consumer Discretionary sector is due to the homebuilders. -
America Finally Wins Vietnam War
Eddy Elfenbein, November 19th, 2007 at 10:08 amHANOI — Hang around Vietnamese cafés long enough and you are likely to see an arresting sight: one person handing another a grocery bag stuffed with bank notes. Drug deal? Bribe?
In fact, this is the way many Vietnamese buy stocks these days – not through a broker or the stock exchange but through the Internet, with payment made in cold cash. Finding each other through stock-trading chat rooms and websites, buyers and sellers strike a deal online and then close it by exchanging cash for stock certificates.
It’s a vivid sign of the times in booming Vietnam. With the economy growing at its fastest clip in a decade, everyone wants to get in on the action. From taxi drivers to tycoons, Vietnamese are speculating wildly on anything that might go up – apartments, gold, land and, above all, stocks.
Online trading is an easy way to play the game. Traders don’t need to open an account with a broker. They don’t even need a bank account. Unregulated, informal and private, the online market works something like Craigslist or eBay. But they’re not trading baseball caps or Dad’s stamp collection.
Participants are trading stocks in privatized state companies that make everything from fertilizer to tractors.
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