Category: Articles

Monday’s Picks
Jeff Macke like Procter & Gamble (PG) $72.02

Guy Adami agrees with Macke and recommends Johnson & Johnson (JNJ) $65.84

Pete Najarian likes Anderson (ANDE) $46.76

Jon Najarian says short iShares Russell 2000 Index (IWM) $72.09

Friday’s Results
Jeff Macke recommends Cypress Semiconductor (CY) $36.02 Close $34.64 LOSS

Guy Adami likes Intelb(INTC) $24.67 Close $22.66 LOSS

Tim Seymour prefers Tata Motors (TTM) $19.65 Close $19.32 LOSS

Jon Najarian says short Valero (VLO) Open $66.43 Close $54.14 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 2-1
Jeff Macke= 1-1
Tim Seymore= 1-1
Guy Adami= 0-2

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

Top Insider Purchases:

Synthesis Energy Systems Inc (SYMX) = $9,558,739
Wesco International Inc (WCC)= $2,409,533
Berkshire Bancorp Inc De (BERK) = $2,192,382
Tcf Financial Corp (TCB) = $1,953,370
Presstek Inc (PRST )= $1,917,648
Goodrich Petroleum Corp (GDP)= $1,621,370
Pimco Municipal Income Fund Ii (PML) =$ 1,364,000
United Community Banks Inc (UCBI) = $1,278,105
National Research Corp (NRCI) = $1,137,925
Financial Industries Corp (FNIN)= $1,127,049
Lions Gate Entertainment Corp (LGF) = $1,009,361

Dividend Increases of Note:
Rite Aid (RAD)= 661%
American financial Group (AFG)= 25%
Disclosure:

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

Subscribe in a reader

Here they are. Visit the site here:

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

Subscribe in a reader

Forget the 60’s, Bloggystyle, Credit Cards, Hmmm…

– Jane Genova has some fascinating thoughts on what matter in today’s world.

– It has been a while and I for one have missed this…

– Credit card companies keep finding ways to screw you if you are not careful.

– And you thought you had a shi**y job?

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

Since the turn of the century Citigroup has traded between 2.2 and 5.4 times its book value, usually around 3 times. It current price to book value? 1.16.

The market is essentially saying its expects Citi’s situation to deteriorate to the point its book value is decreased 60% from its current levels. That would bring the stock current price to book level inline with historic norms. Let’s talk dollars. Citi’s current book comes to about $172 billion or $24.36 a share. At 3 times that, the historical trading level, the stock would be trading at $73.08 a share. At 2 times book which is below the lowest level the stock has traded this century, the stock must rise to $48.72 or 69% higher than current levels.

At current prices, in order for Citi’s price to book to be in line with historical averages, Citi must shed $103 billion in book value. Am I the only one who cannot fathom that happening?

What does this mean? Citi’s book value will decrease after the next round of write-down’s is announced in January when earnings are released. That reduction will be a drop in the bucket of Citi’s actual worth. It also means that there is now a ton of upside in shares as they eventually drift back to normalized price to book values.

Punk Ziegel analyst Dick Bove said Wednesday he does not believe Citigroup needs to cut its dividend to retain cash and improve capital ratios. Instead he recommends the banks reduce assets to bolster capital ratios if necessary. “Citigroup will absorb its current earnings setbacks and then reconcentrate on its enormous earnings power,” Bove said. He went on the say on CNBC that Citi trading at these levels “was ridiculous”.

What else could Citi easily do? How about a stock dividend? I am enrolled in the DRIP program at Citi anyway so I get my dividends from them in shares anyway. Citi could easily take quarters 1 & 2, convert the cash dividend to a stock one and save itself $5 billion that would then pay for the second half of the years dividend. It would be a great way to keep shareholders happy and preserve capital while the credit market get sorted out.

Disclosure: Long Citi

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

Typically the Fed raises rates in order to slow growth in an effort to curb inflation. Are $100 a barrel oil (USO) prices doing that for them?

The Fed released the minutes from their last meeting Wednesday. While the market interpreted that last statement from them to mean the Fed was equally concerned about inflation and growth, today’s minutes would appear to say the Fed is more worried about growth. From the release:

“The Committee agreed that the statement to be released after this meeting should indicate that economic growth appeared to be slowing, reflecting the intensification
of the housing correction and some softening in business and consumer spending, and that strains in financial markets had increased. The characterization of the inflation situation could be largely unchanged from that of the previous meeting.

Members agreed that the resurgence of financial stresses in November had increased uncertainty about the outlook. Given the heightened uncertainty, the Committee decided to refrain from providing an explicit assessment of the balance of risks. The Committee agreed on the need to remain exceptionally alert to economic and financial
developments and their effects on the outlook, and members would be prepared to adjust the stance of monetary policy if prospects for economic growth or inflation were to worsen.”

Now, there is a saying on Wall St. that “nothing cures high prices like high prices”. The simple explanation of that is that as prices climb, demand decreases. As milk climbs to $5 a gallon, people buy less of it sand the price falls. As oil climbs to and then past $100 a barrel, people will decrease gas use and the use of products that are affected by the price of oil. That will slow the economy and that slowdown ought to crimp inflation that seemed to rise in December.

We have seen this begin to happen and gasoline demand has actually fallen recently and this holiday shopping season was less than spectacular.

If that is the thinking of the Fed, then they are free to lower rates at the next meeting to meet credit and liquidity concerns of banks like Bank of America (BAC) and Wells Fargo (WFC) and businesses and to ease the burden on home owners and consumers with credit cards.

Oil may be doing 1/2 the Fed’s job and for a short time it may enable the Fed to ease rates without increasing in inflation fears.

Hmmmm.

Disclosure: Long Oil (USO)

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

Friday’s Picks
Jeff Macke recommends Cypress Semiconductor (CY) $36.02

Guy Adami likes Intelb(INTC) $24.67

Tim Seymour prefers Tata Motors (TTM) $19.65

Jon Najarian says short Valero (VLO) Open $66.43

Thursday’s Results
Jeff Macke recommends shorting Bed Bath & Beyond (BBBY) Open $28.36 Close $27.40 GAIN

Guy Adami likes Intel (INTC) Open $25.35 Close $24.67 LOSS

Tim Seymour prefers Posco (PKX) Open $146.46 Close $147.74 GAIN

Jon Najarian recommends shorting KLA-Tencor (KLAC) Open $46.54 Close $45.81 GAIN

2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 0-1
Jon Najarian= 1-1
Jeff Macke= 1-0
Tim Seymore= 1-0
Guy Adami= 0-1

2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
Karen Finerman= 40-30 = 57%

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

It looks like Sherwin Williams (SHW) will finally get a court date in Rhode Island. Expect them to lose.

Jane Genova reports:

Tomorrow, January 4th, will be a day of hearings at Rhode Island Superior Court before Judge Michael Silverstein on the arguments presented by the lead paint defendants in four motions. The hearings begin at 9:30 AM.

Judge Silverstein has set aside the entire day for the four motions filed in December 2007 by Sherwin-Williams, which NL Industries (NL) and Millennium Holdings also joined. Specifically, those motions are:

* Motion to strike the state’s proposed lead paint abatement plan
* Motion for Clarification of procedures
* Motion to value DuPont (DD) settlement, determine appropriate offset and disgorge misallocated settlement funds
* Motion to stay abatement proceedings pending Cyanamid trial.

Why will they lose? Fortunately, it has nothing at all to do with the law. Silverstein all but directed the verdict obtained against the defendants and has essentially acted as a prosecutor throughout the trial. That being said, the defendants are in front of him arguing motions against an abatement plan he asked for and was fast tracked in accordance to his wishes and the disgorgement of a settlement he blessed.

Essentially the defendant are going through this dog a pony show to better determine and document the breadth of his incompetence and judicial malfeasance prior to their date with the RI Supreme Court or US Federal Court.

Should the defendants get ANY relief as a results of the hearings that is huge news. Other than that, same ole’ story…..

Disclosure:Long Sherwin Williams

↑ Grab this Headline Animator

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader

Web Privacy,Ebay Fraud, Dick’s,Mac’s

– Is privacy on the web finally here?

– Beware, at least Ebay is trying to fight it.

– This is a great store and just may be an even better stock.

– And the beat goes on for the Mac.

Donate to the ValuePlays Project for KIVA

 Subscribe in a reader