Archive for April, 2011

  • Becton Dickinson Drama
    , April 27th, 2011 at 4:01 pm

    I, for one, thought Becton Dickinson ($BDX) had a solid earnings report and good guidance news. The stock, however, freaked out all morning.

    Ben Graham used to say that in the short run the market is a voting machine, but in the long run it is a weighing machine.

  • Bernanke Live!
    , April 27th, 2011 at 2:17 pm

    Live Videos by Ustream

  • Three Stocks Up 20-Fold in Five Years
    , April 27th, 2011 at 1:27 pm

    I thought this was interesting. Smart Money lists five stocks that have risen 20-fold over the last five years.

    The stocks are: ($PCLN) +2,129%

    Green Mountain Coffee Roasters ($GMCR) +2,217%

    Baidu ($BIDU) +2,513%

    I should add that during that time, Priceline dropped over 68%, Green Mountain Coffee dropped nearly in half and Baidu fell by over 76%.

  • Today’s Fed Annoucement
    , April 27th, 2011 at 12:51 pm

    Same old, same old:

    Information received since the Federal Open Market Committee met in March indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March. Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

    To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter. The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.

    The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

    The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

  • J&J to Buy Synthes for $21.3 Billion
    , April 27th, 2011 at 9:10 am

    This is going to be a busy day for the market. After the close, we’re going to get earnings reports from AFLAC ($AFL) and Fiserv ($FISV). Also, the Federal Reserve will be wrapping up its meeting and Ben Bernanke will hold the Fed’s first-ever news conference.

    Also, it’s now official: Johnson & Johnson ($JNJ) is going to buy Synthes for $21.3 billion.

    Johnson & Johnson will buy Synthes for 159 Swiss francs per share — that’s 103.35 Swiss francs in JNJ stock and 55.65 francs in cash. Considering the size of J&J’s cash balance, I would have preferred they had used as much cash as possible.

    The deal still needs to be approved:

    It’s unclear whether Synthes’s public shareholders, many of whom now are aggressive hedge-fund traders who move in once a company is in play, will be satisfied with the price J&J is offering for market growth. Many have argued privately in recent days that Synthes is worth at least 165 francs a share.

    If completed, the Synthes purchase would be J&J’s largest acquisition to date. In 2006, it bought Pfizer Inc.’s consumer health-care business for $16.6 billion. Since then, the company, which has nearly $28 billion in cash and securities, has typically eschewed large deals in favor of a “string of pearls” approach, shelling out as much as a few billion dollars for companies. At the same time, J&J aims for dominant positions in its main markets of consumer products, pharmaceuticals and medical devices and diagnostics.

  • Morning News: April 27, 2011
    , April 27th, 2011 at 7:41 am

    Japan Debt Outlook Cut to Negative by S&P as Quake Rebuilding Adds to Debt

    Dollar Slips Before Fed Decision; Stocks Rise, Greek Bonds Drop

    Silver Steadies, Gold Perky Ahead of Fed Decision

    Crude Rises as Europe Economic Data Boost Demand Optimism, Pressure Dollar

    Johnson & Johnson to Buy Synthes for $21.3 Billion

    Barrick Gold to Buy Equinox for $7.66 Billion, Topping Offer by Minmetals

    Credit Suisse Braces For Second Shareholder Revolt Forecast Misses Estimates After Spending Growth

    Whirlpool’s First-Quarter Earnings Advance, Boosted by Energy Tax Credit

    Health Insurer WellPoint Raises Full-year View as Profit Beats

    BP’s Net Profit Rises

    Barclays Capital Profit Drops by 33% in ‘Challenging’ Market

    China’s Huawei Sees $100 Billion Revenue in 10 Years

    Paul Kedrosky: Sony: Massive Network Security Lapse

    Joshua Brown: re: Banner Ad Brain Drain

    Aflac Finds Its New Duck on the … Web

  • S&P 500 Earnings Are Tracking at $22.71
    , April 26th, 2011 at 10:28 pm

    Wendy Soong at Bloomberg has a nice summary of earnings season so far — and things are looking good.

    Of the 500 companies in the S&P 500, 193 have reported so far. Earnings are on track to come in at $22.71. Some context: On March 31st, Wall Street was expecting earnings of $22.13 so we’re ahead of expectations. For Q1 in 2010, the S&P 500 earned $19.38.

    For all of 2011, I’d say $100 is too high, but we might come very close. I think $97 or $98 is within reach.

    Well…unless something unexpected happens.

  • NICK = $13.25
    , April 26th, 2011 at 4:50 pm

    Earlier today I noted NICK’s volume surge. The stock had been rising all day but suddenly jumped in the last hour of trading. NICK got as high as $13.61 today before closing at $13.25.

    Total volume was 131,638 shares which is the busiest day in nearly three years.

  • Becton, Dickinson Beats and Guides Higher
    , April 26th, 2011 at 4:20 pm

    Becton, Dickinson ($BDX) just reported fiscal Q2 earnings of $1.38 per share which was eight cents more than expectations.

    The company also raised its full-year EPS guidance from the earlier range of $5.45 to $5.55 to a new range of $5.55 to $5.65.

    This revised guidance reflects the anticipated effects of favorable currency and operating efficiencies, partially offset by higher resin costs and the negative impact of the Japan earthquake and tsunami. Diluted earnings per share from continuing operations for fiscal year 2011 are expected to increase 12 to 14 percent over adjusted diluted earnings per share from continuing operations of $4.94, excluding the specified item, for fiscal year 2010. The specified item represents the aforementioned 2010 non-cash charge of $0.04 per share related to healthcare reform. On a currency-neutral basis, the Company expects diluted earnings per share from continuing operations to increase about 10 percent over adjusted diluted earnings per share in the prior-year period.

    If I’m reading the earnings report right, the revised guidance includes a loss of five cents per share due to the impact of the earthquake and tsunami.

    This is a very good report. The stock is up about $1 in the after-hours market.

  • Volume Surge at NICK
    , April 26th, 2011 at 3:06 pm

    So far, 105,000 shares have traded today. That’s about 10 times normal and it’s happening on no news. Another 53,700 shares traded yesterday.

    Today looks to be the highest volume day in nearly two years. Twice in the last month, the stock didn’t trade a single share all day.