Author Archive

  • 30 Straight Days Above the 10-DMA
    , January 13th, 2011 at 1:24 pm

    Here’s a fascinating factoid I found via Sentiment Trader via ZeroHedge via Pragmatic Capitalist: The S&P 500 has closed above its 10-Day Moving Average for the last 30-straight trading sessions.

    That’s the longest streak since a 42-day run from February to April 2010. The longest I can find (my records go back to the 1930s) is a 59-day streak from November 1970 to February 1971.

    We’re about 15 points above the 10-DMA which means that this run may have some room to go, especially if volatility stays so low.

    Part of this, I think, is due to the market’s ultra-low volatility combined with a slow-motion rally. The S&P 500 has closed higher for 21 of the last 30 days and for 43 of the last 67 days.

  • What If Apple Were In the Dow?
    , January 13th, 2011 at 11:31 am

    In June 2009, the gatekeepers of the Dow Jones Industrial Average decided to put Cisco (CSCO) in the index in place of General Motors (GM). The guys at Bespoke wonder what would have happened if they had chosen Apple (AAPL) instead. The difference: 1,000 more points.

  • FBR’s Target for AFL = $69
    , January 13th, 2011 at 11:00 am

    I thought Aflac made it pretty clear that they were going to survive Europe’s troubles, but apparently FBR was late to get the word:

    Aflac is well positioned to weather credit losses in Europe and investors should take advantage of the discounted stock of the disability insure, an analyst said Thursday.

    FBR Capital Markets analyst Randy Binner upgraded Aflac’s shares to “Outperform” from “Market Perform,” and lifted the price target to $69 from $59. Binner said the stock has lagged its peer group by 14 percent in the last three months, likely on heightened concerns over European sovereign debt.

    Aflac’s exposure to debt holdings from Portugal, Ireland, Italy, Greece and Spain total $3.4 billion, or 34 percent of equity. Binner said the company has more than enough cash on hand, about $1.3 billion, to cover losses in even the most stressed scenarios.

    Additionally, the analyst still expects Aflac to buy back between 6 million and 12 million shares over the next two years, despite European losses.

  • Morning News: January 13, 2011
    , January 13th, 2011 at 7:41 am

    Stock Futures Flat Ahead of Jobless Data, Intel Results

    Trichet Faces `Annus Horribilis’ as Crisis Tests European Central Bank

    China Expands Yuan’s Role to Overseas Investment

    Indian Oil Margins May Fall on Rising Crude Oil Prices

    Another Asian Economic Power Just Hiked Rates To Fight Inflation

    Beige Book Shows Increased Activity

    1 Million Homes Repossessed in 2010

    AIG Readies for Recapitalization

    Auto Rebound Pays Dividend to Ford, GM Work Forces

    In Nielsen’s Public Offering, a Bellwether for Buyout Firms

    Paul Kedrosky: The Debt Ceiling and Gravity

    The Most Amazing Press Release Ever Written

    An Empty “Ghost town” – Ordos, China

  • Maria Bartiromo Interviews Jamie Dimon
    , January 12th, 2011 at 4:09 pm

    It’s a good interview. (One nitpick: He says he wants to reinstate the dividend. Um, Jamie…you already have one.)

  • Louis Navellier
    , January 12th, 2011 at 1:19 pm

    I want to give a shout-out to my good friend Louis Navellier. He has a great (and free) e-letter that you can sign up for here. I highly recommend it.

    Louis is one of Wall Street’s legends. He’s one of the original “quant guys.” Nowadays, Wall Street is full of number crunchers, but Louis was doing this kind of work long before everyone else was. Not only that, but he has an amazing track record to boot.

    His e-letter always has some interesting insight or take on the market that you can’t find anywhere else. If you want to see a sample, here’s his latest.

    To sign up, just follow this link.

  • S&P 500 = 1285
    , January 12th, 2011 at 1:10 pm

    Today is a busy day for me so I’m not doing much posting, but I will note that it’s another good day for stocks. The S&P 500 is up to 1285 which is another two-year high. The Buy List is also doing well and we just broke through the 4% mark for the year.

    The strength today seems to be coming from financials. JPMorgan Chase (JPM) will soon give us a better read of what’s going on. As I’ve said before, I’m expecting a big earnings beat. The Street expects 99 cents per share. I think they’ll report $1.10 or more. The earnings call is scheduled for Friday morning, so the press release may come as early as Thursday after the closing bell.

    You can also follow my incoherent ramblings insightful market analysis on Twitter and StockTwits.

  • Morning News: January 12, 2011
    , January 12th, 2011 at 8:06 am

    Bunds Drop as GDP Jumps, Stocks Climb; Portugal Bonds Drop After Auction

    US to Press China on Yuan, Economy Ahead of Hu Visit

    Treasuries Fall as Japan Pledge to Buy Europe’s Debt Stokes Risk Appetite

    Rising Chinese Inflation to Show Up in U.S. Imports

    Public Strongly Opposes Debt Ceiling Increase

    Housing’s Anemic Rebound Gives Little Boost to U.S. Economy

    Goldman’s 10 Best Stock Picks for 2011

    JPMorgan’s 13 Favorite Stocks for 2011

    ITT to Split, AIG to Sell Taiwan Unit

    That Guy Who Called the Big One? Don’t Listen to Him.

    StockTwits and Earnings: Smarter, Faster, Deeper

    10 Things I Learned Working With Jim Cramer

    True Grit Script

  • CWS Market Review – January 11, 2011
    , January 11th, 2011 at 5:16 pm

    I wanted to send out a note to bring you up to speed on today’s big news. Nicholas Financial ($NICK) put out a press release announcing that it is “evaluating possible strategic alternatives for the Company, including, but not limited to, the possible sale of the Company or certain of its assets, potential acquisition and expansion opportunities, and/or a possible debt or equity financing.”

    The company also disclosed that it has “received an unsolicited, non-binding indication of interest from a potential third-party acquirer.”

    In other words, the company is up for sale and someone is interested. This is great news and the stock responded by shooting up to $11.93 per share. That’s a nice 18.31% gain for the day. The stock got as high as $13.50 during the day.

    I’ve probably written more about Nicholas Financial than any other stock. Less than two years ago, it was going for $1.70 per share; now it’s at $11.93. All the while, I’ve been amazed at how cheap this stock was. Of course we need to qualify all this news-nothing is definite. They’ve merely disclosed some plans.

    If they do sell, I’m confident that NICK’s management will only sell for a good price. Obviously, I want a price as high as possible. Right now, I consider $14 to be fair but I don’t think it’s worth turning down any reasonable offer. Let’s stick with NICK and see how this plays out. I’m expecting another solid earnings report in a few weeks.

    The other good news came after the close yesterday when Stryker ($SYK) reported sales of $1.995 billion for the fourth quarter. That’s an increase of 8.8% from one year ago and it’s in line with what Wall Street was expecting. For the year, sales were $7.32 billion, up 8.9%.

    Stryker also said to expect full-year earnings (after charges) for 2010 to range between $3.31 and $3.33 per share which is slightly above their earlier guidance of $3.27 to $3.30 per share. That’s an increase of 12.2% to 12.9% over 2009′s EPS of $2.95.

    For 2011, Stryker said to expect earnings-per-share between $3.73 and $3.65. Wall Street had been expecting $3.64. The fourth-quarter earnings report will come out on January 25.

    This is very good news for Stryker and the stock rallied 6.03% today to close at $58. I should also stress that it’s very good to see our stocks give guidance for the next 12 months. Not many companies do that, so I take notice when high-quality companies do. I don’t expect the forecast to be perfect, but the company knows their business better than anyone else.

    Thanks to Nicholas and Stryker, our Buy List gained 1.52% for the day compared with 0.37% for the S&P 500. Eight trading days in, we’re beating the S&P 500 3.22% to 1.34%.

    Today was a great day for us. This is the kind of day that you get maybe once or twice a year, so let’s not lose our heads. We’re in for the long haul and what the market giveth, the marketh can taketh awayeth.

    The next big event for us is JPMorgan‘s ($JPM) earnings report. The conference call will be Friday morning so the earnings report may come out Thursday after the bell or on Friday morning. Wall Street currently expects JPM to earn 99 cents per share for the fourth quarter. I think the Street is way off here. I keep running the numbers and I have JPM earning at least $1.10 per share, maybe a lot more.

    There’s also a good chance the bank will announce a big dividend increase. Before the financial crisis, JPM paid a quarterly dividend of 38 cents per share. Once disaster hit, they cut it to five cents per share. In my opinion, JPM could bring their dividend up to 35 or 40 cents. They probably won’t go that high to allow them room for more dividend hikes later. But if they wanted to, they could.

    That’s all for now. I’ll have more market analysis for you in the next issue of CWS Market Review!

    Best – Eddy
    Best – Eddy

  • At 12:45
    , January 11th, 2011 at 12:46 pm

    NICK seems to be finding a home around $11.75ish.