Here are the largest aggregate insider purchases by dollar amount for the week ending yesterday.
1- RPC (RES)= $19,236,000
2- Equity One (EQY)= $12,157,000
3- Lion Gate Entertainment (LGF)= $4,677,000
4- Panera Bread (PNRA)= $3,595,000
5- Chesapeake Energy (CHK)= $3,344,000
6- Barnes & Noble (BKS)= $3,264,000
230 point up days make for a very short 52 week low list. My condolences if you made this one.
XNL Xethanol Corp
FOOD Vaughan Foods Inc
PWX Providence and Worcester Railroad
ALOY Alloy Inc
ARII American Railcar Inds Inc
CLZR Candela Laser Corporation
CGM Congoleum Corporation
HSOA Home Solutions Amer Inc
HEPH Hollis-Eden Pharmaceuticals
Has Maria gotten a new prescription from her doctor?
Am I the only one wondering what has gotten in CNBC’s Maria Bartiromo? Almost overnight she has gone from serious newscaster to a giddy pre-pubescent teenager at her first dance giggling and wiggling all over the place. I keep waiting for Dylan Rattigan to backhand her and tell her to get her shit together.
The skeptic in me thinks she got wind of the poll that the NY Post (I think it was them) ran that showed she painfully lagged the much younger Erin Burnett in popularity on the network. It would seem the “Money Honey” was old news and viewers en-mass were drawn to Burnett’s more playful banter with her co-hosts. Bartiromo, who is no dummy and broke ground in this medium must have decided that was the way to go and now is about as irritating as a human being can be. She is either off her Ritalin or is taking something quite effective at putting a whole lot of jump in her step.
Trying to watch her as she hops all over the place is like watching Paula Abdul during American Idol and unfortunately for Bartiromo, she is just about as coherent. While not a huge fan of Ratigan, I actually feel sorry for him. When she gets going now he just gets a blank stare on his face like a Labrador being read “War and Peace” as he wonders who the hell he pissed off to get this choice assignment. He looks like he is almost wishing to get assaulted by a bystander so he can get off camera with her. Poor bastard.
The real shame of it all? There was nothing wrong with Bartiromo to begin with. I For one appreciated her style and enjoyed her segments. Now, I keep hoping for a blackout when she is on. I swear to god if I hear her giggle one more time at absolutely nothing I am going to have a stroke.
It is painful watching someone fight the inevitable aging we all go through. she is not handling this well at all. Maria, go back to what you did before.
At least then you had your dignity…
How did the FTC lose this one? How?
First, bringing the suit to stop the Whole Food (WFMI) and Wild Oats (OATS) merger on “anti-trust” grounds was moronic especially when you consider the #1 “organic food” seller in the US after the merger is complete will not be the combined entity but will still be Wal-Mart (WMT). But, they filed it anyway so let’s go from there.
Then we had Whole Foods CEO John Mackey in what can only be described as an acid induced rant saying in an email to his board that the merger would help Whole Foods eliminate “almost forever” the threat that a rival could enter the organic space. He then went on to say the merger would allow for Whole Foods increase prices to customers and pressure suppliers (local farms) to lower costs. they email went even further to say that buying Wild Oats would help the company avoid “nasty price wars” in a number of markets and the deal would help deter a big chain such as Kroger from creating a competing natural-foods powerhouse.
Then, as if that was not enough. Mackey decided to join a Yahoo message board and continue the rants. He trashed Wild Oats in an attempt to lower it’s share price before the merger was announced. The posts are currently under investigation by the SEC and I would be suprised if he was not formally admonished for them.
In short, we have the CEO of a company in internal emails saying a proposed merger would help them raise consumer prices, pressure suppliers and eliminate potential competition. Isn’t that exactly what the FTC had to prove? How could they lose this one? To top it off, the FTC itself is currently under investigation because internal documents they released that should have had redacted information about Whole Foods “trade secrets” turn out to be, well, not redacted.
Not only will the FTC lose a case that Mackey handed them on a silver platter but they will end up getting sued and lose again in the process.
Whoever lead the charge on this one should be encouraged “to pursue other opportunities”.
Bernanke moved today and unlike the chorus of calls for a Fed Funds Rate cut we have heard, he moved both to calm markets and keep rates steady.
Saying, “Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.”
Then they said “To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee’s target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks’ usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained.”
What didn’t they do? Lower the Fed target rate so Bernanke keep pressure on inflation. What he DID do was lower the borrowing rate for banks so that currently tight credit markets will loosen. Lenders like Washington Mutual (WM), Countrywide (CFC) and Thornburg Mortgage (TMA) will now have the systemic liquidity they need to continue loaning and functioning.
The move is also significant because it signals to the market that the Fed will not bail out poor lending practices but will prevent the market from seizing due to it and will protect the innocent from being swept away by the turmoil.
Now there are plenty of folks out there saying “he listened to us and lowered rates” but the reality is just the opposite. Nobody called for this particular move and if anything, those folks calling for Bernanke to resist a Fed Funds rate cut are in the correct camp. He did not give in the the market and this is good. What is even better is that the market now can be assured he will move to prevent the “crash” everyone feared was inevitable but will not, and this is even more important, subsidize idiocy.
I have been saying since he was appointed based on his past statements and actions that he will go down ad the best Fed leader of my generation. Today’s action makes that case even stronger.
UPGRADES
CSK Auto CAO Kevin Dann Hold » Buy
Washington Mutual WM Punk, Ziegel & Co Mkt Perform » Buy
Ultrapertol ULTR UBS Neutral » Buy
Network Appliance NTAP AG Edwards Hold » Buy
Network Appliance NTAP Caris & Company Above Average » Buy
Navigant Consult NCI Piper Jaffray Market Perform » Outperform
Ansoft ANST Boenning & Scattergood Market Perform » Market Outperform
Terra Industries TRA Matrix Research Hold » Strong Buy
DOWNGRADES
Woodward Governor WGOV Matrix Research Buy » Hold
Acusphere ACUS Susquehanna Financial Positive » Neutral
Dover Downs Gaming DDE KeyBanc Capital Mkts / McDonald Buy » Hold
Meruelo Maddux MMPI UBS Neutral » Sell
More big names made the list today..
WYE Wyeth
WPSC Wheeling Pittsburgh Corp
THC Tenet Healthcare Corp
TYC Tyco
SHRP Sharper Image Corporation
SHOO Steven Madden Ltd
PFE Pfizer Inc
ODP Office Depot, Inc
NWL Newell Rubbermaid Inc
NMX Nymex Holdings Inc
MOT Motorola, Inc
MCO Moodys Corp
M Macys Inc
KSS Kohl’s Corporation
HRB H&R Block, Inc
HOG Harley-Davidson, Inc
HD Home Depot, Inc
FL Foot Locker Inc
CTAS Cintas Corporation
BX Blackstone Group L P
BC Brunswick Corporation
BBY Best Buy Co., Inc
AMGN Amgen Inc
AMD Advanced Micro Devices
If you are like me and have 20 or more years before you plan on touching your investments, times like this make you giddy.
The DOW is back down to 12,500 and now at levels seen since April and another day or two of this will give us levels back to November 2006. Why then is this great?
1- The economy is still strong and growing. Profits are still rising at a double digit rate and unemployment is at historically low levels. GDP for Q2 will be revised up and there is no recession on the horizon.
2- Cash rich companies are buying back shares in unprecedented numbers.
3- Over 50% of S&P 500 companies profits come from overseas where economies are surging.
What does it mean? The underlying fundamentals are strong which means eventually share prices are going to turn around. What we have is a credit problem and when traders cannot sell off this debt, they sell what they can which is shares companies like in Goldman Sachs (GS), Dow Chemical (DOW) and Altria (MO). I mean, if we look at it logically are the events of the last month going to stop people from smoking OR will it effect Altria’s balance sheet which is laughingly unlevered? No.
So, are my picks down? Yup, so what?!? Paper losses mean nothing to me, purchase prices do at this point in my investing career. Market disturbances like this that cause mis-pricing of equities like we see now are great for me. What I am busy doing now is lowering my cost basis for recent purchases like Goldman, Wal-Mart (WMT) and Citigroup (C). The last time I could have bought shares of Goldman and Dow Chemical at these levels was Sept. 2006, Citigroup , February of 2006 and you have to go back to March of 2006 to buy Sears Holdings (SHLD) at these prices. The sale price if Sears now is so low that Chairman Eddie Lampert is tripping over himself to buyback shares. He has bought as many shares back in the last month as he had almost the entire last year!
In short, the world is not coming to an end and the economy is still very strong. Keep buying…
You know, if Buffett and Lampert are buying more shares every quarter, why aren’t you?
“If lenders lent money that they are not going to get paid back, that’s their problem, frankly”, said Berkshire Hathaway’s (BRK.A)Warren Buffett yesterday. Finally, somebody gets it and is not calling for the Fed to bail lenders out.
Last week I said “The Fed will not bail out lenders that made dumb loans and now are in trouble. Bernanke is going to let the market work (as he should) and it is already taking care of things. Bad credit is harder to get, and hopefully credit standards return to what they should be. Both of these are good things long term.”
Back in March I posted abut the loose lending practices that have gotten lender in the mess they are in today. In it I detailed the “No Documentation” loan types that had proliferated the past few years and said:
“What is shocking is the justifications they give for those who these loans “may be right for”. You are buying a house, you are borrowing money from a bank to do so. The expectation is that you will need to have money to put down on it and actually be able to demonstrate an ability to pay the bank back. The phrase “take my word for it” should never enter the conversation. It did though and that is the genesis of the current situation. When buying a $500,000 house involved less paperwork than buying a Ford Escort, red flags ought to have been going up.
In 2005 and 2006 the number of both mortgage brokers and real estate agents hit historic highs. A mortgage is a commodity, give me a price and a rate and I will choose a broker. There is very little a broker can do to distinguish themselves from each other. With so many brokers and a limited number of qualified mortgage applicants, brokers had to find new applicants. The only place for them to go was the pool of people who under the current rules not only did not qualify for a mortgage would not receive credit from a bookie were they to ask. The new motto was “If they don’t fit under the current set of rules, change the rules”. So they did. What they failed to realize was, the rules were there for a reason, they worked. We are now realizing that people who do not want to provide proof of what they do for a living, how they earn income, what that income actually is or where their down payment is coming from are not doing so out of some symbolic “privacy concern”, but because what they are saying is quite frankly, bull. Who has trouble “verifying income”? Crack dealers? Illegal immigrants working under the table and not paying taxes? Contractors who cheat on their taxes? If you want my money, prove you can pay it back or take a walk and let the next person in line step up, unless of course the line is small, the others are just like you and we really need to give you the money… thus the mortgage industry dilemma the past few years. Like I have said more than a few times before, the surprise here is not that this happened, it is that it did not happen sooner.”
Maybe additional calmer heads will come out and stop calling on the Fed to bail out idiots and drown out the Jim Cramers of the world who are running around screeching like an 18 year old girl who got ketchup on their prom dress. Yes things may get worse but as Buffett also said yesterday “there will be real opportunities then”…
Translation? Get ready to buy
UPGRADES
Intel INTC Credit Suisse Underperform » Outperform
Commercial Metals CMC CIBC Wrld Mkts Sector Perform » Sector Outperform
MFA Mortgage MFA JP Morgan Neutral » Overweight
CBL & Assoc CBL JP Morgan Neutral » Overweight
Emergency Medical Services EMS Jefferies & Co Hold » Buy
Dril-Quip DRQ Jefferies & Co Hold » Buy
AEterna Zentaris AEZS RBC Capital Mkts Sector Perform » Outperform
MasterCard MA AG Edwards Hold » Buy
Universal Technical Institute UTI Sun Trust Rbsn Humphrey Neutral » Buy
JDS Uniphase JDSU BMO Capital Markets Underperform » Market Perform
Perot Systems PER Stifel Nicolaus Hold » Buy
Tessera Tech TSRA Matrix Research Hold » Buy
Koppers Holdings KOP Matrix Research Buy » Strong Buy
Penn Natl Gaming PENN Nollenberger Capital Neutral » Buy
DOWNGRADES
MFA Mortgage MFA Bear Stearns Outperform » Peer Perform
Thornburg Mortg TMA AG Edwards Hold » Sell
KKR Financial KFN Friedman Billings Outperform » Mkt Perform
Quest Diagnostics DGX Matrix Research Buy » Hold
Orbcomm ORBC Cowen & Co Outperform » Neutral
Midland Co MLAN KeyBanc Capital Mkts / McDonald Buy » Hold
Dow down 5% in 5 days……some big names are making the list now
WMT Wal-Mart Stores, Inc
USG USG Corporation
TE TECO Energy, Inc
SKX Skechers U S A Inc
SCT Scottish Re Group Limited
SCSS Select Comfort Corp
RAIL Freightcar Amer Inc
NWL Newell Rubbermaid Inc
NVS Novartis A G
MAS Masco Corporation
M Macys Inc
LIZ Liz Claiborne, Inc
LEH Lehman Brothers Holdings
HOG Harley-Davidson, Inc
FL Foot Locker Inc
DAL Delta Air Lines Inc Del
CHS Chico’s FAS Inc
CFC Countrywide Financial
BOW Bowater Incorporated
AMD Advanced Micro Devices
In mid May I wrote a post about selling my Citigroup shares to Sears Holdings (SHLD) Chairman and ESL leader Eddie Lampert.
In it I lamented the fact that I was thinking along the same lines as Lampert but did not stick to my guns and bailed on Citi (C) shares at the same time Lampert was buying them. I vowed not to make the same mistake again and re-entered my Citi position. This turned out to be a great test as recent events (has anyone heard anything about a credit market issue?) have caused my Citi position to drop from $54 to todays $45 (Lampert’s original entry price was estimated to be around $54 a share). Rather than cutting my losses last week (August 9th) I picked up more shares at $47.57 in part of my vow not to make the same mistake twice and I do not mind getting paid a 4.6% and growing dividend to wait. At the same time I picked up more Sears Holdings shares some 30% off it’s high from earlier this year at $130 and change.
I took a large amount of satisfaction in the news that Lampert boosted his stake in Citigroup by 63 percent during Q2. In a SEC filing, ESL Investments held 24.8 million Citigroup shares at the end Q2, up from 15.2 million shares during the first quarter. Compound this with the news of the additional $1.5 billion Sears share buyback plan announced Monday and it has been a very good couple weeks for my investment reasoning.
Since ESL was founded in 1988, Lampert has lost money only twice, in 1990 and 2002 (he followed the 2002 losses with 45% and 54% returns in 2003 and 2004) and has treated clients to annualized returns of 24%.
Based on his history, Lampert will not make any public proclamations about the job Citi CEO Chuck Prince is doing and whether or not he should keep it. He works behind the scenes and this is probably part of the reason he is almost always able to get the changes he wants enacted with little push back from management.
Time will tell how this works out I am very optimistic that based on his track record and my thinking along the same lines recently (after a very irritating lesson earlier in the year) that these investment will turn out very well indeed.
Here are the calls
UPGRADES
Fossil FOSL Piper Jaffray Market Perform » Outperform
Methanex MEOH CIBC Wrld Mkts Sector Underperform » Sector Perform
Wash. Federal WFSL Friedman Billings Mkt Perform » Outperform
Allegheny Tech ATI Davenport Buy » Strong Buy
A.M. Castle CAS Davenport Buy » Strong Buy
Carpenter Tech CRS Davenport Buy » Strong Buy
RF Micro Device RFMD Charter Equity Mkt Perform » Buy
Domtar UFS DA Davidson Neutral » Buy
Insituform Tech INSU Morgan Joseph Sell » Hold
OmniVision OVTI Pacific Growth Equities Neutral » Buy
Lexmark LXK FTN Midwest Sell » Neutral
Leap Wireless LEAP Stanford Research Hold » Buy
DOWNGRADES
Northstar Realty NRF Lehman Brothers Overweight » Equal-weight
Newcastle Investment NCT Lehman Brothers Overweight » Equal-weight
KKR Financial KFN Lehman Brothers Overweight » Equal-weight
Arbor Realty Trust ABR Lehman Brothers Overweight » Equal-weight
Thornburg Mortg TMA Citigroup Hold » Sell
UBS AG UBS Credit Suisse Outperform » Neutral
Daktronics DAKT Janco Partners Accumulate » Mkt Perform
Pope & Talbot POP DA Davidson Neutral » Underperform
Sirenza Micro SMDI Morgan Keegan Outperform » Mkt Perform
Haverty Furniture HVT Morgan Keegan Outperform » Mkt Perform
Thornburg Mortg TMA Piper Jaffray Market Perform » Underperform
Thornburg Mortg TMA Jefferies & Co Hold » Underperform
Avery Dennison AVY Matrix Research Hold » Sell
Here are todays calls and yesterday’s results
Wednesday’s Picks
Jeff Macke recommended covering if you’re short Home Depot (HD). Open $33.52
Pete Najarian told people to short Countrywide Financial (CFC). Open $24.46
For the second day in a row, Guy Adami thought investors should bet against the Dow by buying the Short Dow30 Proshares (DOG). Open $60.98
Tuesday’s Results
Jeff Macke thought investors should buy the Retail HOLDRS (RTH). Open $99.75 Close $96.41 Loss $3.34
Pete Najarian recommended shorting Countrywide Financial (CFC). Open $26.61 close $24.46 Gain $2.15
Guy Adami preferred to get short the whole DJIA by buying the Short Dow30 Proshares (DOG). Open $60.17 Close $60.98 Gain $.81
Eric Bolling liked streetTRACKS Gold Trust (GLD). Open $66.26 Close $66.29 Gain $.03
Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation week)
Adami= 14-11 Gain $25.92
Bolling= 9-11 Loss $15.26
John Najarian= 13-3 Gain $15.54
Macke= 20-14 Gain $3.62
Pete Najarian= 9-7 Gain $18.79
Seymore= 3-1 Gain $2.15
Finerman= 2-2 Gain $.88
Gilbert= 1-0 Gain $.29
Here is the list that hit a new 52 week low
TRB Tribune Company
TMA Thornburg Mortgage
TBL The Timberland Company
SNY Sanofi Aventis
SPLS Staples Inc
POP Pope & Talbot, Inc
PMI The PMI Group, Inc
NYT New York Times Company
NXXI Nutrition 21 Inc
NVS Novartis A G
MCO Moodys Corp
JOE St. Joe Company
DAL Delta Air Lines Inc Del
CTRN Citi Trends Inc
ALU Alcatel-Lucent