2 minutes of news on Bloomberg when combined with recent charts posted give me the impression that selling cloud become fierce. Osamas sons may not have been captured. Trimtabs turns neutral from bullish on stocks after clear evidence of a lack of corporate buying. Oil continues up, within 5 bucks a barrel for Brent Crude. Blix uses "smoking gun" in same sentence with Iraq after apparently discovering a missile equiped to deliver a chemical payload. Powell says that the risks of war rise daily.
In stocks:
07:47 ET SkillSoft provides mixed guidance (SKIL) 2.75: Excluding merger costs, co continues to see a Q4 loss of approx $0.06 (Multex consensus is -0.04); expects Q4 revs to meet or exceed guidance. For 2004, co sees EPS of $0.11-$0.13 on revs of $185-$195 mln (consensus $0.17 and $190.97 mln).
07:46 ET Ahold knew in 2001 of US accounting problem - FT (AHO) 3.27: The Financial Times reports that a former exec said a senior finance officer at US Foodservice alerted headquarters of AHO about potential problems in the accounts as early as 2001.
07:44 ET Morning Briefing : An extremely quiet Monday morning. Currently looking at minor losses in the equity Index futures (S&P 3.7 below fair value, Nasdaq -2). Overseas markets mostly in the red with Japan down for 5th consecutive session to new 20-yr lows; U.K. was one of the few major markets showing gains, but has now pulled back to unchanged. Dollar remains under pressure; 10-yr note rallying 14/32 to 3.588%... On the research front, Dow component DuPont being upgrade by BofA; Lehman upgrading several independent refiners.
07:42 ET NY Times article discusses AOL's plans to enter TiVo market (AOL) 11.40: The article discusses AOL's attempts to enter the personal video recorder market with its own version called Mystro TV. For the past two years, the Company's top cable executive and top engineer have been working on this clandestine project in an effort to participate in what could be the "future of the television business." There are some concerns over its technology and AOL's ability to "win the cooperation of networks, studios and the creators of shows". Mystro TV is slated for its product rollout in two years.
07:40 ET DuPont upgraded at BofA (DD) 36.00: Banc of America upgrades to Buy from Neutral based on a gradually improving top-line, easing oil prices, and value creation from the expected separation of DTI. Target is $42.
07:34 ET Qualcomm increases MSM phone chip outlook by 4% (QCOM) 35.23: Based on firm orders, QCOM now expects to ship approx 28 mln MSM phone chips during Q2, exceeding its previous estimate of 27 mln MSM shipments. For Q3, co sees shipments of approx. 23-25 mln units. "As suggested in our previous guidance, MSM shipments in the June quarter are expected to be up substantially year-over-year but lower sequentially due in part to the ongoing transition to CDMA2000 1X in China and completion of initial channel loading for Reliance's commercial launch in India."
07:34 ET World News : Secretary of State Colin Powell said the US and Britain were within "striking distance" of winning 9 or 10 votes on the Security Council for their Iraq resolution, which could come as early as tomorrow... Time magazine reported yesterday that a nuclear power facility at Natanz in Iran is closer to enriching uranium than previously thought... North Korea test-fired another missile into the Sea of Japan... Administration hopes for a new vote in the Turkish parliament allowing the deployment of US troops received a boost after Recep Tayyip Erdogan won a by-election that will allow him to assume the post of prime minister.
07:26 ET Deutsche Telekom falls 3% amid pension concerns (DT) : Stock slides 3% in German trading after co posted its largest annual loss in history and concerns that company would have to divert more money to its underfunded pension fund. Shares of T-Online rallied almost 5% after Deutsche Telekom said it had no plans to sell more T-Online shares.
07:24 ET Citigroup succession plan falters - WSJ (C) 33.16: The Wall Street Journal reports that an activist outside director, Reuben Mark, has grown increasingly frustrated over the succession process for CEO Sandy Weill, and will decline to stand for re-election at the annual meeting in April. Weill has declined to set up an explicit "horse race" for fear it could cause high-level defections once the leader is clear, similar to what happened at GE.
07:19 ET GTSI Corp warns of Q1 loss (GTSI) 8.20: Provider of government IT solutions warns of a loss for the 1st qtr. The First Call consensus is $0.01 (one analyst surveyed). GTSI blames potential military action on Government IT spending and continued delays in passing the 2003 Federal Civilian Agency Budget, as well as market pressures on gross margins.
07:14 ET Capital One told some investors of Willey probe (COF) 27.48: The Wall Street Journal reports that COF told some bond investors of an insider-trading probe of its CFO and his planned resignation before publicly disclosing the news.
07:09 ET Expedia's stock price might be flying too high -- Barron's (EXPE) 70.39: Barron's article suggests Expedia's stock could be trading too high given concerns over its chief executive's recent departure, increased competition, a weak economy and fears over terrorism. However, the article also highlights the Company's "superior technology, diversified business model and early forays into corporate travel and vacation packaging" as compelling factors to be in the stock. In light of these concerns and the stock trading at 30x projected earnings for 2003, the upwards trajectory of its stock price could face an inflection point.
07:09 ET Lehman upgrades refiners : Lehman raises their sector rating on the independent refiners to Positive from Negative, upgrades VLO and FTO to Overweight from Equal-Weight, TSO to Overweight from Underweight, and PCO to Equal-Weight from Underweight; firm thinks the U.S refining industry is at the early stage of a prolonged cyclical recovery which could last for the next 18-24 months; says COP should be the largest net beneficiary of a stronger U.S. refining market outlook.
07:07 ET Reliant Resources to exit proprietary trading biz after incurring major loss (RRI) 4.10: RRI says it took an $80 mln loss following a major spike in natural gas prices over the weekend of Feb 22-23. "While this loss resulted from unprecedented market volatility, its magnitude is inconsistent with our desired risk profile and led to our decision to exit the proprietary trading business."
07:02 ET U.S. soliciting bids for rebuilding postwar Iraq : The Wall Street Journal reports that the Bush administration is preparing to award a contract valued at as much as $900 mln to begin rebuilding a postwar Iraq; at least 5 U.S. engineering co's, including FLR and HAL, have been asked to submit bids.
06:56 ET UTStarcom holder Softbank to sell 8 mln shares back to UTSI (UTSI) 17.02: Reuters reports that Softbank Corp plans to sell 8 mln UTSI shares. (Remember that on Fri, UTSI announced a $350 mln convertible; said it would use $139 mln of the proceeds to repurchase 8 mln shares from Softbank; so news not as bad as headline might suggest).
06:49 ET S&P futures vs fair value: -5.5. Nasdaq futures vs fair value: -2.5.
06:44 ET European Markets FTSE...3492.90...+1.30...+0.0%. DAX...2395.60...-36.06...-1.5%.
06:44 ET Asian Markets Nikkei...8042.26...-101.86...-1.3%. Hang Seng...8861.87...-45.23...-0.5%.
06:37 ET Barron’s interviews Alan Snyder, whose $1.8 bln fund has delivered an average of 16% since 1985 :
Mr. Snyder is bullish on retail and gold stocks while shying away from technology and financial companies. He highlights J.C Penney (JCP) in light of its current management and discounted valuation trading at 11.1x forward earnings for 2003. Winn-Dixie Stores (WIN) is another retailer mentioned favorably given its free cash flow of $1 a share and strong fiscal management. In regards to his bullish outlook on gold and gold stocks, he cites the historical precedence of gold investment by many countries "when they don't feel comfortable" dating back as far as 3,000 years ago. In addition, gold can also serve as a hedge against inflation and has seen a recent rise in prices due to the looming war with Iraq. Gold stocks mentioned in the article that could be positioned for substantial upside if gold were to increase to $400 an ounce were NEM, ABX and KGC.
06:28 ET Mattel mentioned favorably in NY Times story (MAT) 21.00:
The article attributes the stock's appreciation in value to strong sales in brands such as Barbie coupled with sound fiscal management. MAT has been able to lower debt while sustaining improvements in operating margins bringing its current debt to capitalization ratio to 30%, a significant improvement from 52% in 2000. Fund manager's opinions are mixed on the company's stock price as being "fairly valued" in light of its current P/E of 16.73, which is higher than its closest competitor Hasbro's P/E of 13.67. However, a fund manager states, "Mattel has stronger brands, and they've done a better job innovating, advertising and distributing their products." The consensus of the article appears positive given MAT's sales growth potential and diversification of its geographical revenues.
06:20 ET Federated financials remain compelling despite weakness in the retail sector -- Barron’s (FD) 25.29: Article discusses the general weakness in retail stocks and places a favorable emphasis on Federated in light of its free cash flow, which is expected to rise by approximately $650 mln in the current fiscal year with a healthy $700 mln in cash on the balance sheet. By having such strong fiscal management, the article suggests FD will be able "maintain its investment-grade credit rating while repurchasing stock and even paying down debt, a rarity in the industry." In addition, the stock currently trades at a discount to share book value of $29 and 8x forward earnings.
06:08 ET Despite rich valuations, Whole Foods could still be a buy -- Barron’s (WFMI) 50.88: Barron's article focuses on the pros and cons of WFMI's valuations and potential upside in its specialty organic and natural food markets. The article cites concern over the vulnerability associated with its P/E given its precedent of 20% total sales growth in 12 of the last 13 quarters. However, the content in the piece suggests WFMI is poised for more upside given its strategic positioning in the burgeoning organic markets, which represented 2% of total U.S. retail food sales of $522 bln in 2001. The Nutrition Business Journal's editor in chief states "green food could total 10% of food sales in 10 years."
Saturday's In Play
11:15 ET Stocks to Watch Next Week : See Mike Ashbaugh's "Stocks to Watch Next Week" column for a profile of stocks demonstrating relative strength going into next week's trading.
Friday After the Close
18:49 ET Harris Corp reiterates 2003 guidance with cautious tone (HRS) 30.19 -0.52: Co reiterates 2003 outlook of $1.30-$1.40 (excluding items). Multex consensus for the yr is $1.38. "While the high end of the $1.30 to $1.40 earnings per share range noted above may still be achievable, the timing of an economic recovery and the rising geopolitical risks remain real concerns going forward."
18:04 ET Trimble Navigation files $100 mln shelf registration (TRMB) 16.61 -0.25: Company plans to use the net proceeds of any offering of these securities for general corporate purposes.
17:08 ET Steel Dynamics files $115 mln shelf registration (STLD) 11.71 +0.09: Co registers the resale of up to the full $115 mln of 4% Convertible Subordinated Notes due 2012, as well as the approx 6.76 mln shares of common stock that are issuable upon conversion of the notes.
16:44 ET SIRI jumps 15% in after hours trading :
16:42 ET Sirius Satellite removed from S&P Watch List (SIRI) 0.47 -0.01: -- Update -- S&P also lowered its senior secured ratings to 'D' from 'CCC-' following the exchange of most of its debt and all of its preferred stock for common stock. --Reuters
16:29 ET Sirius Satellite closes $1.2 bln recapitalization (SIRI) 0.47 -0.01: |
