Archive for 2011

• Another Blow for Medtronic
  Eddy Elfenbein, June 29th, 2011 at 10:15 am

  Like the company hasn’t had enough bad press. The New York Times reports:

  Spine Experts Repudiate Medtronic Studies

  In an extraordinary move, a group of spine specialists are publicly repudiating the research of other experts that has backed the widespread use of a Medtronic bone growth product. In a series of reports published in a medical journal on Tuesday, the specialists called the research misleading and biased.

  The repudiation, appearing in a full issue of The Spine Journal devoted to the topic, represents a watershed in the long-running debate over conflicts of interest for the sponsorship of scientific studies by makers of drugs and medical devices. It is extremely rare for researchers to publicly chastise colleagues, and editors of leading medical journals said they could not recall an instance in which a publication had dedicated an entire issue for such a singular purpose.

  Medtronic, the nation’s biggest maker of medical devices, has been facing intensifying scrutiny over its promotion of Infuse, the bone growth product at the center of the controversy. The bioengineered material is used primarily in spinal fusions, a procedure in which spinal vertebrae are joined to reduce back pain.

  Infuse is used in about a quarter of the estimated 432,000 spinal fusions performed in this country each year. The articles published on Tuesday charge that researchers with financial ties to Medtronic overstated Infuse’s benefits and vastly understated its risks by claiming there were none.

  The shares are currently down 66 cents to $38.35 which is a loss of 1.7%.

• Morning News: June 29, 2011
  Eddy Elfenbein, June 29th, 2011 at 7:07 am

  In a Greek Default, Higher Risk for Money Market Funds

  ECB President Trichet Urges New Vision for Europe

  France to Name New Finance Minister After Lagarde Chosen to Head IMF

  Automakers Lead Jump in Japanese Factory Output

  Billionaires Team Up to Back Carrefour in Brazil

  Deutsche Boerse Asks EU to Approve NYSE Euronext Takeover Bid

  $8.5 Billion Deal Near in Suit on Bank Mortgage Debt

  Home Prices Increase, for a Change

  Madoff Judge Approves Trustees $212 Million Settlement With Feeder Funds

  Morgan Stanley Said to Suffer Trading Loss

  Zynga IPO Could Raise $2 Billion, File Wednesday

  Campbell Soup To Exit Russia

  Natural Gas Bidding War Puts Spotlight on a Billionaire

  Brian Shannon: Stock Analysis & Trading Ideas for 6/29/11

  Stone Street: Some Perspective on YOKU’s Warner Brothers Deal

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• Market Update: June 28, 2011
  Eddy Elfenbein, June 28th, 2011 at 8:58 pm

  I have to apologize for the lack of posting today but honestly, there’s not much going on.

  The good news is that the stock market continues to recover. For now, it looks like the second bounce off the 200-DMA was a good one. The S&P 500 closed today at its highest level since June 3.

  Bespoke notes that we’ve just completed our best two-day gain in nearly five months. But I should caution you that the big gainers over the last two days have been cyclical stocks and I’m suspicious that they can lead the market for long.

  Remember how Oracle ($ORCL) fell after its “poor” earnings report? Perhaps Wall Street is starting to realize that this was a very good earnings report. The stock has recovered nearly everything it lost. Today Oracle closed at $32.34 which is just 12 cents below Thursday’s close. Imagine that! Patience FTW!

  

  Shares of Nicholas Financial ($NICK) have also stabilized after being knocked around after being added to the Russell 2000.

  Reynolds American ($RAI) fell along with the entire tobacco sector after the FDA said it was going to do an independent review of menthol cigarettes. This is a great stock and it carries a nice 5.7% yield.

  Bed Bath & Beyond ($BBBY) is still rising after its great earnings report. The stock broke $58 per share today. The stock is an 18% winner on the year for us. I really like it when good companies are rewarded.

  The one sector that’s been left behind by this market is the financial sector. It appears that investors are worried about exposure to Greece (or Portugal or Ireland or Iceland or ….). The earnings estimates for the major Wall Street banks are getting slashed in a big way.

  Three months ago, the Street saw Goldman ($GS) earning $16.41 per share for this year. Now that’s down to $14.01. Banks like Citigroup ($C) and Bank of America ($BAC) continue to be disaster areas.

  The sole exception, and not to my surprise, is JPMorgan Chase ($JPM). The last several earnings reports have come in much better than expectations. The bank is currently going for just eight times this year’s estimate. The stock, however, has suffered along with the rest of the banks.

  What I would really like to see is another dividend increase, but that will take permission from the Fed. JPM already increased their quarterly dividend from five cents per share to 25 cents. At the current price, that gives the stock a yield of 2.52%. I wouldn’t mind seeing them double that. That’s probably unrealistic, but JPM could do it if they wanted to and had Fed approval.

  Along with other financial stocks, AFLAC ($AFL) is still suffering. Wall Street is just being silly here. The company has made it abundantly clear that they’re not overly exposed to Europe. Plus, they keep delivering solid results. I don’t believe it’s a smart idea to bet against AFLAC.

• Morning News: June 28, 2011
  Eddy Elfenbein, June 28th, 2011 at 7:31 am

  Greek Unions Strike as Papandreou Seeks Support

  Rescue Measures for Greece Advance as French Offer to Ease Debt

  China Signs £1.4 Billion in UK Trade Deals

  Women Break Down Barriers in Mideast Finance

  Tokyo Electric Power Defeats Shareholders’ Efforts to Exit Nuclear Business

  Gold Advances for First Time in Four Days on European Sovereign-Debt Woes

  Kyrgyzstan’s Gold Rush on Ice

  Crude Oil in New York Rises From Near Four-Month Low; Brent Premium Widens

  U.K. Banking Giant Standard Chartered Sees Double-Digit Growth

  Nike 4Q Net Up 14%; North America, China Sales Surge

  Siemens Cautions on Slower Growth After Buoyant Q3

  TomTom Slumps As Profit Shrinks

  PepsiCo Wakes Up and Smells the Cola

  Todd Sullivan: Florida Casinos

  Robert Sinn via Josh Brown: Searching For and Finding an Edge

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• WSJ: Private Sleuths for Investors in Chinese Companies
  Eddy Elfenbein, June 27th, 2011 at 8:07 pm

• Our Buy List Is Up 3.82% YTD
  Eddy Elfenbein, June 27th, 2011 at 8:29 am

  Thursday will be the final day of trading for the first half of this year. Despite the market’s ups and downs, our Buy List is on track to beat the S&P 500 for the fifth-straight year.

  Through Friday, our Buy List is up 3.82% for the year compared with 0.86% for the S&P 500 (dividends not included).

  

• Gas Prices Fall
  Eddy Elfenbein, June 27th, 2011 at 8:16 am

  For the last six weeks, gas prices have pulled back. Gas is still pretty expensive compared with recent history but it’s just a little bit less expensive. Gas is still more than twice where it was during the financial crisis.

  

• Larry Kudlow on Dow 50,000
  Eddy Elfenbein, June 27th, 2011 at 8:09 am

  From 12 years ago:

  Think of the Internet as an economic freedom metaphor for our time. The Internet empowers ordinary people and disempowers government. The Internet creates wealth, expands growth, produces jobs and spreads prosperity. Standing behind the Net is the political power of well over 100 million investors and asset owners.

  Because of this, I believe the future economy will outperform all expectations. The stock market will head toward 15,000 in a few years, then 30,000, then 50,000 and higher. Believe it or not, the Internet is more important than the Fed.

• Morning News: June 27, 2011
  Eddy Elfenbein, June 27th, 2011 at 6:42 am

  European Banks May Need More Capital After Basel

  Spain Can Finance Itself Despite Rising Yields – Finance Minister

  South African Rand Slides to Lowest This Month Against Dollar on Investor Risk Aversion

  Germans Becoming Resigned to Messy Euro Divorce

  China Is Long-Term Investor in EU Bonds: Premier Wen

  France’s Lagarde Poised to Become Next IMF Chief

  Crude Falls In Asia; Stronger Dollar, Weak Sentiment Weigh

  Average Price for U.S. Gas Falls to $3.63

  Behind Veneer, Doubt on Future of Natural Gas

  Nissan Outlines Growth Strategy Focusing On Emerging Markets

  Stanley Black & Decker Agrees to Buy Niscayah for $1.2 Billion

  Companies Are Erecting In-House Social Networks

  Goldman Sachs: This Is The Best Stock For This Point In The Cycle

  Howard Lindzon: Amazon (AMZN) to Buy Twitter (TWIT) ….The Monday Headline We Need!

  Jeff Miller: Weighing the Week Ahead: Big News and Low Volume = High Volatility

  James Altucher: Politics is a Scam – Why I Will Never Vote Again

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• NICK’s Volume Surge
  Eddy Elfenbein, June 26th, 2011 at 5:56 pm

  On Friday, 1,284,100 shares of Nicholas Financial ($NICK) exchanged hands. That isn’t merely heavy volume; it’s off the scales.

  Put it this way, until fairly recently, a day with one-hundredth as much volume as Friday’s would be considered a busy day. Friday’s volume was greater than the entire volume for the first nine months of 2009.

  Friday’s volume represents more than 10% of all of NICK’s outstanding shares and more than 20% of the float.

  So what’s going on? I have no idea. Volume in NICK started to grow shortly before the last earnings report came out. The shares very briefly surged over $13 per share but have slowly pulled back.

  If someone is busy accumulating shares, they haven’t told me.

  

  Update: A reader informs me of a fact I had forgotten, NICK’s volume surge is due to Russell’s rebalancing. NICK was added to their Global index.