• Louie the Stockbroker
    Posted by on March 20th, 2007 at 12:50 pm

  • Credit Spreads
    Posted by on March 20th, 2007 at 11:42 am

    Here’s an interesting look at credit spreads over the past few years:
    image444.png
    Notice how much closer the lines are today compared with five years ago. That’s a big reason for the private equity boom.

  • FactSet Beats the Street and Doubles Its Dividend
    Posted by on March 20th, 2007 at 11:02 am

    FactSet Research Systems (FDS) just reported another great quarter. The company earned 52 cents a share, compared with 38 cents last year. Excluding a three cent a share gain, the company earned 49 cents a share which was a penny ahead of analysts’ expectations. Sales rose 24% to $116.3 million.
    The company also announced that it’s going to double its quarterly dividend to 12 cents a share, plus it’s expanding the stock repurchase program by $100 million.
    FactSet also guided its sales forecast for this quarter slightly higher. It now sees revenues coming in between $118 million and $121 million. That will probably translate to earnings of about 52 cents a share.
    The market doesn’t seem to know what to do. The stock had been our top-performing stock of the year. Then it fell yesterday, and Joe Bank (JOSB) rallied to take the #1 spot. FDS opened much higher today, but has given back a lot of the gain.
    FDS.png

  • JOSB Hits Nine-Month High
    Posted by on March 19th, 2007 at 1:54 pm

    When Jos. A Bank‘s (JOSB) stock collapsed last June, I immediately put it on my radar. The catalyst for the drop was a horrible earnings report. But as more evidence comes out, it looks like the company is still doing well.
    The stock finally broke out above $34 a share today.
    JOSB1.png
    It’s now the top-performing stock on the Buy List for the year.

  • The Change to Penny Spreads
    Posted by on March 19th, 2007 at 12:37 pm

    Here’s a fascinating article from Bloomberg on the effects of changing option spreads to a penny:

    Kevin Fischer spent 17 years as a floor trader at the Philadelphia Stock Exchange until Interactive Brokers Group Inc. moved him to its headquarters in Greenwich, Connecticut.
    Now he sits in front of a computer screen, creating a trading system to help investors use algorithms, sets of rules calculating the best time and price to buy or sell securities. Fischer is caught in the middle of a regulatory change that’s throwing about $1 billion of commissions up for grabs annually and putting Interactive, the world’s largest options broker, on the defensive.

  • The Fed’s Game Plan
    Posted by on March 19th, 2007 at 8:18 am

    The Federal Reserve meets again this week in Washington. A survey of 73 economists showed unanimous agreement that the Fed will leave rates unchanged at 5.25%. But the Fed could soon make a move. The futures market now indicates that there’s a 24% chance that the Fed will lower rates three times before the end of the year.
    Here’s a look at the Fed Funds rate (blue line) and core inflation rate (black line) going back a few years. The red line is the difference. Basically, in a recession the blue line should be equal to the black line. In an expansion, the blue line should be about 2.5 to 3 points higher than the black line.
    image443.png

  • Dept. of Irony: Blackrock to IPO?
    Posted by on March 16th, 2007 at 1:26 pm

    Today’s big news is that private equity firm, Blackstone Group, may be going public. Strange that the company taking everyone private might be going public. Here’s an interview Maria Bartiromo did earlier this week with Steve Schwarzman, the head of Blackstone, and Laurence Fink, the head of Blackrock. (Stone. Rock. I’m not sure what the significance is.) (By the way, when Rock Hudson was on the Flintstones, they still changed his name to “Rock Hudstone.” Talk about redundancy! Stoney Curtis, I get. But Hudstone?)
    Anywho, at the very end of the clip, Maria asks Schwarzman is he’s going to go public. He knew what was in the works, but dodges the question very deftly.
    By the way, both Bartiromo and Schwarzman are on the board of the New York City Ballet. It doesn’t mean anything, I’m just mentioning it.

  • The BusinessWeek 50
    Posted by on March 16th, 2007 at 10:47 am

    BusinessWeek has unveiled its BusinessWeek 50.
    Varian Medical Systems (VAR) comes in at #14, followed by Bed Bath & Beyond (BBBY) at #15.
    Two more of our stocks appear in the Extra 25: Sysco (SYY) at #58 and Harley-Davidson (HOG) at #60.

  • Today’s CPI Report
    Posted by on March 16th, 2007 at 10:04 am

    Today’s report on consumer inflation showed that prices rose 0.4% last month, which was 0.1% more than what economists were expecting. The core rate, which excludes food and energy, rose 0.2%, which was in line with forecasts.
    Here’s a look at the core rate going back a few years:
    image442.png

  • Indiana, We’re All for You!
    Posted by on March 16th, 2007 at 8:30 am

    You gotta hand it to those never-say-die kids at IU. The Mad Money Club at Indiana did everything in their power to get Jim Cramer to do a show from Bloomington. They even made a video based off 24, which is JJC’s favorite show.

    It worked! Jimmy C. is going to IU. Here’s more on the Mad Money Club’s efforts. It’s a heart-warming pull-for-underdog kinda thing.
    It’s almost like some dramatic come-from-behind upset in a bicycle race. Or something.