In short, yes. Oil (USO) is a finite resource and the sooner we tale actions to wean ourselves off it, the better. Unfortunately, high and higher prices are the only way it will happen..
Here is a good discussion…
High prices lead to stuff like this which is good for all of us…
Disclosure (“none” means no position):Long Oil (USO)
What is interesting is not necessarily the investments they are making but the thought process that goes into it and how they look at the current environment.
John Catsimatidis
Jeremy Jacobs
Ron Baron discusses Ralph Lauren (RL) Wynn Resorts (WYNN)
What is interesting is not necessarily the investments they are making but the thought process that goes into it and how they look at the current environment.
John Catsimatidis
Jeremy Jacobs
Ron Baron discusses Ralph Lauren (RL) Wynn Resorts (WYNN)
Like McDonald’s (MCD), this isn’t really so much news anymore. Should they ever miss, only then will it be.
Wal-Mart (WMT) today reported its sales and earnings for the quarter ended April 30, 2008. Net sales for the first quarter of fiscal year 2009 were approximately $94.1 billion, an increase of 10.2 percent over $85.4 billion for the first quarter of fiscal year 2008. Net income for the quarter was $3.022 billion, an increase of 6.9 percent from $2.826 billion in the first quarter of fiscal year 2008. Diluted earnings per share for the first quarter of fiscal year 2009 were $0.76, up from $0.68 per share in the same prior year quarter.
In early April I said “a common refrain out there is that people are trading down to Wal-Mart from Target (TGT). I happen to disagree. While I think some people are indeed trading down, the changes the company has made to scores of locations, it online dominance and its new “Save More, Live Better” ad campaign have more to do with it. But, for arguments sake, lets go with “trading down”.
The wealth loss in the US is due to one thing, housing. People still have jobs as the unemployment rate is low and wages are actually rising. It is the value of their homes, their largest expense, and the fear that illicits are creating the current environment.
Now, since housing prices have fallen at the fastest rate in almost 100 years, this wealth deficit has been dramatic. It also means that a recovery to pre-bubble levels will take years, maybe decades. People who bought homes in the last 3 years have a negative equity or, now not enough to tap for loans. Sensing this, they will spend accordingly.
If this is the reason people are running to Wal-Mart rather than the other retailers, one can only assume this trend will be in effect for the foreseeable future.
For shareholders of Wal-Mart, that is indeed good news. For holders of Target (TGT), JC Penny (JCP), Macy’s (M) and others, it means rapidly shrinking margins and the necessity to redefine themselves.”
As each quarter is pout in the books, this appears to not only becoming fact, but the pace at which is doing so is accelerating. Target is already out there stumping about their prices and the “value” they give shoppers rather than focusing on their trendy image as they have in the past.
Even Bill Ackman, who holds a 10% economic interest in the company recently acknowledged this on CNBC recently when he said “because Target has bright clean isles, it is perceived as being more expensive.”. While I think that is too simplistic a reason, it is true they are perceived that way. It isn’t because they are clean (new and refurbished Wal-Mart’s are just as nice), it is because Wal-Mart pounds their value proposition into our heads ever day, unlike Target. Target, until recently has focused on their fashion and people equate fashion with expensive.
This isn’t a trend one ought to expect top reverse anytime soon.
Disclosure (“none” means no position):Long WMT, MCD, None
Country, 60 States?, Soros, New Blackberry
– If the choir is questioning you, there is an issue.
– Uh, Mr. Obama, want to do that math again??????
– Well, it isn’t April 1st so Soros must be on the sauce again…
– They look neat….
Country, 60 States?, Soros, New Blackberry
– If the choir is questioning you, there is an issue.
– Uh, Mr. Obama, want to do that math again??????
– Well, it isn’t April 1st so Soros must be on the sauce again…
– They look neat….
Upgrades
PFF Bancorp (PFB)- B. Riley & Co Sell » Neutral
Western Refining (WNR)- Caris & Company Below Average » Average
Allion Healthcare (ALLI)- Broadpoint Capital Neutral » Buy
A.O. Smith (AOS)- Robert W. Baird Underperform » Neutral
Applied Industrial (AIT)- Morgan Keegan Mkt Perform » Outperform
Commvault Systems (CVLT)- Morgan Keegan Mkt Perform » Outperform
Longtop Financial (LFT)- Kaufman Bros Sell » Hold
Cubic (CUB)- Needham Hold » Buy
Network Equip (NWK)- Brean Murray Hold » Buy
3D Systems (TDSC)- Piper Jaffray Sell » Neutral
Beacon Roofing Supply (BECN)- Morgan Keegan Mkt Perform » Outperform
Zoran (ZRAN)- Piper Jaffray Neutral » Buy
LM Ericsson (ERIC)- RBC Capital Mkts Sector Perform » Outperform
Dollar Tree (DLTR)- JP Morgan Underweight » Neutral
Cellcom Israel (CEL)- Lehman Brothers Underweight » Equal-Weight
Tal International (TAL)- Robert W. Baird Neutral » Outperform
FBL Financial (FFG)- Keefe Bruyette Mkt Perform » Outperform
Telecom Italia (TI)- Deutsche Securities Hold » Buy
El Paso (EP)- JP Morgan Neutral » Overweight
Downgrades
W&T Offshore (WTI)- CapitalOne southcoast Add » Neutral
Clear Channel Outdoor (CCO)- Stanford Research Buy » Hold
U-Store-It (YSI)- Stifel Nicolaus Buy » Hold
Move (MOVE)- Needham Buy » Hold
Perdigao S.A. (PDA)- UBS Buy » Neutral
FedEx (FDX)- Morgan Keegan Outperform » Mkt Perform
Edenor (EDN)- JP Morgan Overweight » Neutral
Navios Maritime (NM)- Oppenheimer Outperform » Perform
Cogent Communications (CCOI)- Cowen & Co Outperform » Neutral
Build-A-Bear Workshop (BBW)- Credit Suisse Outperform » Neutral
Vital Signs (VITL)- Piper Jaffray Buy » Neutral
Cheniere Energy (LNG)- RBC Capital Mkts Outperform » Underperform
Cogent Communications (CCOI)- RBC Capital Mkts Outperform » Sector Perform
Sadia S.A. (SDA)- UBS Neutral » Sell
DRS Tech (DRS)- Credit Suisse Outperform » Neutral
Public Storage (PSA)- Deutsche Securities Buy » Hold
Pacific Sunwear (PSUN)- Citigroup Buy » Sell
Cheniere Energy (LNG)- Citigroup Buy » Hold
Upgrades
PFF Bancorp (PFB)- B. Riley & Co Sell » Neutral
Western Refining (WNR)- Caris & Company Below Average » Average
Allion Healthcare (ALLI)- Broadpoint Capital Neutral » Buy
A.O. Smith (AOS)- Robert W. Baird Underperform » Neutral
Applied Industrial (AIT)- Morgan Keegan Mkt Perform » Outperform
Commvault Systems (CVLT)- Morgan Keegan Mkt Perform » Outperform
Longtop Financial (LFT)- Kaufman Bros Sell » Hold
Cubic (CUB)- Needham Hold » Buy
Network Equip (NWK)- Brean Murray Hold » Buy
3D Systems (TDSC)- Piper Jaffray Sell » Neutral
Beacon Roofing Supply (BECN)- Morgan Keegan Mkt Perform » Outperform
Zoran (ZRAN)- Piper Jaffray Neutral » Buy
LM Ericsson (ERIC)- RBC Capital Mkts Sector Perform » Outperform
Dollar Tree (DLTR)- JP Morgan Underweight » Neutral
Cellcom Israel (CEL)- Lehman Brothers Underweight » Equal-Weight
Tal International (TAL)- Robert W. Baird Neutral » Outperform
FBL Financial (FFG)- Keefe Bruyette Mkt Perform » Outperform
Telecom Italia (TI)- Deutsche Securities Hold » Buy
El Paso (EP)- JP Morgan Neutral » Overweight
Downgrades
W&T Offshore (WTI)- CapitalOne southcoast Add » Neutral
Clear Channel Outdoor (CCO)- Stanford Research Buy » Hold
U-Store-It (YSI)- Stifel Nicolaus Buy » Hold
Move (MOVE)- Needham Buy » Hold
Perdigao S.A. (PDA)- UBS Buy » Neutral
FedEx (FDX)- Morgan Keegan Outperform » Mkt Perform
Edenor (EDN)- JP Morgan Overweight » Neutral
Navios Maritime (NM)- Oppenheimer Outperform » Perform
Cogent Communications (CCOI)- Cowen & Co Outperform » Neutral
Build-A-Bear Workshop (BBW)- Credit Suisse Outperform » Neutral
Vital Signs (VITL)- Piper Jaffray Buy » Neutral
Cheniere Energy (LNG)- RBC Capital Mkts Outperform » Underperform
Cogent Communications (CCOI)- RBC Capital Mkts Outperform » Sector Perform
Sadia S.A. (SDA)- UBS Neutral » Sell
DRS Tech (DRS)- Credit Suisse Outperform » Neutral
Public Storage (PSA)- Deutsche Securities Buy » Hold
Pacific Sunwear (PSUN)- Citigroup Buy » Sell
Cheniere Energy (LNG)- Citigroup Buy » Hold
He is like the Energizer Bunny, “still buying”.
Sears (SHLD) Chairman Eddie Lampert purchases an additional 700,000 share of the auto retailer AutoNation (AN) Friday bringing his owner ship to just under 70 million shares (68.96 million) or 38.6% of the total outstanding.
Lampert began aggressively adding to his stake in December of 2007 and on several occasions has added million share blocks on almost a weekly basis through his hedge funds.
Disclosure (“none” means no position):Long SHLD, none
Tuesday’s Picks
Jeff Macke likes Wal-Mart (WMT) $58.02
Guy Adami prefers Cisco (CSCO) $25.84
Tim Seymour recommends Turkcell (TKC) $17.99
Pete Najarian thinks Applied Material (AMAT) $19.87 is a buy
Monday’s Results
Jeff Macke says if Fedex drags down UPS (UPS) $70.29 then UPS is a buy on the dip. Close $70.42 GAIN
Guy Adami likes Tesoro (TSO) $21.96 in anticipation of a relief rally.Close $24.15 GAIN
Along those same lines, Karen Finerman suggests the Valero (VLO) June 45 calls. Close $47.03 GAIN
Pete Najarian thinks Hewlett-Packard (HPQ) $49.13 is a buy ahead of earnings.Close $46.64 LOSS
2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 1-1
Jon Najarian= 4-3
Jeff Macke= 37-28-1
Tim Seymore= 16-13
Guy Adami= 37-32
Pete Najarian= 35-31
Karen Finerman= 32-29-1
Joe Terrenova= 1-1
2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
The following video does make a great point..
If you want to decrease the amount of speculation in oil (USO) prices, one way to do it is require those doing it to lay more money down when making the bets. They are not talking about diminishing the ability of those to speculate, but just asking them to actually out down more cash. This is not much different than your broker asking you to put down a larger percentage of cash for your margin account or your bank asking for more of a down payment for your house.
Disclosure (“none” means no position):Long USO
Less than a week after announcing good news, Sprint (S) reminded investors it is still in trouble now…
Wireless
* First quarter revenues of $8.0 billion declined 9% compared to the year-ago period and declined 6% from the fourth quarter of 2007. The declines are mainly due to lower average service revenue per customer and fewer post-paid subscribers.
* Adjusted Operating Income* was a loss of $253 million compared to profits of $253 million in the first quarter of 2007 and $168 million in the fourth quarter. The decline in Adjusted Operating Income* is due to lower service revenues that were partially offset by reduced operating expenses.
* Adjusted OIBDA* was $1.8 billion in the current period compared to $2.4 billion in the 2007 first quarter and $2.2 billion in the 2007 fourth quarter. Adjusted OIBDA* in the first quarter exceeded capital expenditures for the period by a little more than $900 million
Reported diluted loss per share was 18 cents compared to a 7 cent loss in the year-ago period and a loss of $10.28 per share in the fourth quarter of 2007. The fourth quarter results include a loss of $10.32 per share from a pre-tax non-cash goodwill impairment charge of $29.5 billion.
Oh Yea…
The company lost 1.09 million subscribers to the competition and average revenue per customer dropped to $56 a month. Sprint’s now has 52.8 subscribers falling even further behind #1 AT&T (T) and #2 Verizon (VZ) who are adding customers each quarter..
Do not expect the upcomingSamsung Instinct to do anything to stopped toe exodus. With new offerings from Research in Motion’s (RIMM) Blackberry and Apple’s (AAPL) iPhone (potentially), I just do not see much interest at all in a new Samsung offering.
That being said, CEO Dan Hesse is doing the right things for the future of the company. It is just that with it being in so much trouble, the here and now will be very painful.
Disclosure (“none” means no position):None
Less than a week after announcing good news, Sprint (S) reminded investors it is still in trouble now…
Wireless
* First quarter revenues of $8.0 billion declined 9% compared to the year-ago period and declined 6% from the fourth quarter of 2007. The declines are mainly due to lower average service revenue per customer and fewer post-paid subscribers.
* Adjusted Operating Income* was a loss of $253 million compared to profits of $253 million in the first quarter of 2007 and $168 million in the fourth quarter. The decline in Adjusted Operating Income* is due to lower service revenues that were partially offset by reduced operating expenses.
* Adjusted OIBDA* was $1.8 billion in the current period compared to $2.4 billion in the 2007 first quarter and $2.2 billion in the 2007 fourth quarter. Adjusted OIBDA* in the first quarter exceeded capital expenditures for the period by a little more than $900 million
Reported diluted loss per share was 18 cents compared to a 7 cent loss in the year-ago period and a loss of $10.28 per share in the fourth quarter of 2007. The fourth quarter results include a loss of $10.32 per share from a pre-tax non-cash goodwill impairment charge of $29.5 billion.
Oh Yea…
The company lost 1.09 million subscribers to the competition and average revenue per customer dropped to $56 a month. Sprint’s now has 52.8 subscribers falling even further behind #1 AT&T (T) and #2 Verizon (VZ) who are adding customers each quarter..
Do not expect the upcomingSamsung Instinct to do anything to stopped toe exodus. With new offerings from Research in Motion’s (RIMM) Blackberry and Apple’s (AAPL) iPhone (potentially), I just do not see much interest at all in a new Samsung offering.
That being said, CEO Dan Hesse is doing the right things for the future of the company. It is just that with it being in so much trouble, the here and now will be very painful.
Disclosure (“none” means no position):None
After a few week’s of wondering why I cannot tun on the tube without sees Berkshire’s (BRK.A) Chairman on it either in an interview or an a soap, it appears I am not the only one.
Now, is this a bad omen for shareholders? I do not think so. I think is will eventually tarnish Buffett’s legacy. Why? The more you saw and the more you predict to more people to more likely you are to be wrong. When that inevitably happens, some folks will seize on it and attempt to define him with it..
Buffett’s is also starting to be accused of “talking his book”. That is never a good thing and it then casts a shadow on everything you say from being “analytical” to perhaps trying to influence the results of one’s investments publicly. In the past Buffett was heard from once or twice a year and what he said was gospel. I have notice lately that his proclamations are beginning to be lumped in with the rest of the “noise” out there.
Where he the company’s “former” chairman and not running the book, none of this would be a big deal at all. But, since he is, there are more mumbling’s out there.
It is only a matter of time that the books start coming out now that he is giving them fodder on almost a daily basis…
Disclosure (“none” means no position):None
The common theme emerging is that theme parks may have a rough go of it this summer. I am not so sure..
Check out this video, the jist is that while Six Flags (SIX), Busch Gardens (BUD) and Cedar Fair (FUN) may suffer, Disney (DIS) ought to sail through unscathed.
Some empirical evidence may just suggest that may not be so true. A recent trip to Dunkin Donuts revealed the Six Flags summer coupons. A promotion of some type between the two companies in the Northeast has been a regular thing for the past few years.
In past years, coupons could be had all spring and even into the summer. Yesterday’s visit revealed only a few left. Of course I had to inquire and was told that they could not keep them in stock. Now, the price of the coupons with the ticket was $29.99 each so this was not a give away type thing and is in the same ballpark as past promotions.
The “coffee jockey” or “barista” (whatever we are supposed to call them) told me people have been coming in and asking for them this year, unlike past years.
It is an odd situation. Higher gas prices may just mean less “long distance”t most folks are not traveling that far for a Six Flags anyway. If their general audience comes in from 200 miles or so, then an additional $1 per gallon in gas for most folks is only another $10 on the travel bill. If you offset that with admission savings, it is a wash.
Do I think Six in a good investment? Not really, they just carry way too much debt and some very smart people are selling. I do think other operator may get knocked down a bit too far and offer a short term opportunity.
Since people seem to be clamoring for the ticket coupons, this may be the way they plan to have fun this summer, rather than a week at the shore.
Disclosure (“none” means no position):None