Archive for May, 2011

• Afternoon Market Update
  Eddy Elfenbein, May 3rd, 2011 at 2:46 pm

  The stock market is pulling back again today. The pain is particularly being felt among cyclical stocks. That usually means that our stocks are outperforming the market and that’s what’s happening today.

  Energy stocks and materials stocks are down the most today. Of all the energy stocks in the S&P 500, ExxonMobil ($XOM) is down the least.

  I had mentioned that I found the market’s reaction to Becton Dickinson’s ($BDX) earnings to be baffling. Fortunately, the stock has regained its bearings and it hit a new 52-week high yesterday.

  Johnson & Johnson ($JNJ) is finally starting to creep higher. The company had a very good earnings report two weeks ago, plus it raised guidance. I didn’t realize this at the time, but I suspect that some traders were expecting an earnings miss. The shares have continued to rise which may reflect a vote of confidence for the Synthes deal.

  I’m surprised to see Moog (MOG-A) react so poorly to what I thought was a very good earnings report. If you haven’t noticed, the stock market isn’t always rational.

  Speaking of which, Nicholas Financial ($NICK) is due to report tomorrow. I’m expecting a very good earnings figure (40 cents per share). I think NICK is a $17 stock.

• S&P 500 Total Return
  Eddy Elfenbein, May 3rd, 2011 at 10:11 am

  Including dividends, the S&P 500 is up 9.06% this year. Below is a look at the total return of the S&P 500 over the past several years. As low as the current dividend rate is, it does add up over the years.

  Since the beginning of the century, the S&P 500 is down 7.19%. But including dividends, the market is up 14.07%. That means the dividends have provided a return of 22.90%.

  

• Morning News: May 3, 2011
  Eddy Elfenbein, May 3rd, 2011 at 7:30 am

  India Central Bank Toughens Stance, Lifts Rates by 50 Basis Points

  U.K. Manufacturing Index Dropped to Seven-Month Low in April

  Greek Finance Minister Says Debt Restructure ‘Huge Mistake’

  Dollar Trades Near Five-Week Low Versus Yen on Fed Interest-Rate Outlook

  Silver Prices Tumble 12% After CME Hikes Margin

  Geithner Extends Debt-Ceiling Deadline by Three Weeks to August

  Americans Favor Budget Cuts Over Raising Corporate Tax

  U.S. Business Has High Tax Rates but Pays Less

  Pendulum Swings Back Toward Detroit

  Nasdaq Takes Bid to Investors

  NYSE-Deutsche Boerse Merger Favored So Niederauer Can Close Sale: Real M&A

  Teva Bets on Stem Cells, Cancer in $6.2 Billion Cephalon Bid

  Arch to Acquire International Coal for $3.4 Billion for Steelmaking Assets

  Joshua Brown: Forget the Dollar, Influence is the New Global Currency

  Howard Lindzon: The Markets Post Osama Bin Laden…

  Paul Kedrosky: The 100-Year Storm in 100-Year Storms

• April ISM = 60.4
  Eddy Elfenbein, May 2nd, 2011 at 10:15 am

  Today’s ISM report was 60.4. A reading over 50 means the economy is expanding. This is the 21st-straight month over 50 and the fourth-straight over 60.

  February’s number of 61.4 tied us for the highest ISM since December 1983.

  

• Moog Beats and Guides Higher
  Eddy Elfenbein, May 2nd, 2011 at 8:37 am

  The futures market indicates that stocks are poised to open higher today on the news of Bin Laden’s demise. The S&P 500 may break 1370 today and we could make a run at 1400 which we haven’t seen in nearly three years.

  We had another Buy List earnings report this morning. Moog ($MOG-A) reported fiscal Q2 earnings of 66 cents per share which was two cents more than estimates. Even better news is that the company is raising its full-year guidance from $2.75 per share to $2.80 per share.

  This is the second time Moog has raised guidance. Three months ago, Moog beat earnings by ten cents per share and they raised full-year guidance from $2.70 per to $2.75 per share.

  Moog Inc which makes precision control components, posted better-than-expected quarterly results, helped in part by a 30 percent increase in sales at its industrial systems segment, and raised its full-year outlook for the second time.

  Moog, whose products are used in aircraft, satellites and industrial machinery, now expects full-year earnings of $2.80 a share, up from its prior forecast of $2.75 a share.

  The company raised its revenue forecast to $2.27 billion from $2.25 billion.

  For the quarter ended April 2, Moog’s net income was $30.6 million, or 66 cents a share, compared with $25 million, or 55 cents a share, a year ago.

  Revenue rose about 13 percent to $574.2 million. Industrial systems sales increased to $156 million. Sales from aircraft controls, Moog’s largest segment, and space and defense controls segment also rose.

  Analysts expected earnings of 64 cents a share on revenue of $551 million, according to Thomson Reuters I/B/E/S.

• Update Earnings Calendar
  Eddy Elfenbein, May 2nd, 2011 at 8:21 am

  It’s May and the bulk of this earnings season has already passed. Here’s a summary of our Buy List stocks that are on the March-June-September-December reporting cycle:

  Symbol	Date	Estimate	Reported
  JPM	13-Apr	$1.16	$1.28
  JNJ	19-Apr	$1.26	$1.35
  SYK	19-Apr	$0.89	$0.90
  GILD	20-Apr	$0.97	$0.87
  ABT	20-Apr	$0.90	$0.91
  RAI	21-Apr	$0.58	$0.59
  BDX	26-Apr	$1.30	$1.38
  F	26-Apr	$0.49	$0.61
  AFL	27-Apr	$1.52	$1.63
  FISV	27-Apr	$1.04	$1.02
  DLX	28-Apr	$0.73	$0.75
  MOG-A	2-May	$0.64	$0.66
  WXS	4-May	$0.69
  NICK	5-May	$0.40
  SYY	9-May	$0.41

• Morning News: May 2, 2011
  Eddy Elfenbein, May 2nd, 2011 at 7:41 am

  Greece Requests Another Bailout Loan Extension, As Restructuring Chatter Continues

  Schaeuble Says New German Bundesbank Head Must Further Reduce Costs

  China Advisor: QE2’s End Won’t Ease Inflation Soon

  Silver Futures Drop 13% on Investor Sales as CME Boosts Margins

  S&P 500 Futures Jump on Bin Laden’s Death

  Dollar Gives Up Earlier Gains

  U.S. Treasury Bonds Fall as Bin Laden Death Triggers Profit Taking

  Dish Network Q1 Profit Up on Strong Subscriber Additions

  2 Years After a Bankruptcy, Chrysler Posts a Profit

  Danisco Board Backs $6.6 Billion DuPont Bid

  Commerzbank First-Quarter Profit Climbs 40% to Record as Provisions Fall

  PPR to Buy Sportswear Company Volcom

  Buffett Extols Berkshire’s CEO Candidates, Faults Sokol’s Trades

  Needed: A Clearer Crystal Ball

  Where To Live To Avoid A Natural Disaster

  Howard Lindzon: Never Buy Stocks…Long Live Trading…Momentum Rules

  Joshua Brown: Welcome Back, Retail Stock Investors

• Bin Laden Dead
  Eddy Elfenbein, May 2nd, 2011 at 12:01 am

  Not much else to say. The markets should be happy tomorrow.

  Congratulations to U.S. Special Forces.