Best. Stock. Name. Ever.
Posted by Eddy Elfenbein on May 13th, 2010 at 12:14 pm

I give you — Crazy Woman Creek Bancorp (CRZY)

Progressive +40,000%
Posted by Eddy Elfenbein on May 13th, 2010 at 11:34 am

Here’s another entry in our series, “boring but highly profitable stocks.” Today’s entry is Progressive (PGR) the auto insurance company.
Insurance stock? You’re thinking snores-ville right? Well, check this out. Thirty years ago you could have picked up a share for a split-adjusted price of five cents.

The gold line is the S&P 500. It’s barely visible in comparison.

Wendy’s Posts Loss
Posted by Eddy Elfenbein on May 13th, 2010 at 10:09 am

Now we know a little more about the turnaround at Wendy’s/Arby’s Group (WEN). The company just posted a loss for its first quarter (before charges). However, the company’s new focusing wasn’t fully implemented for the entire quarter.

Revenue at Arby’s restaurants fell 12 percent in the quarter.
The lackluster Arby’s showing weighed on overall results, as the owner of Wendy’s and Arby’s restaurants said Thursday that it lost $3.4 million, or a penny per share, for the three months ended April 4. That compares with a loss of $10.9 million, or 2 cents per share, last year.
Removing 3 cents per share in charges, profit was 2 cents per share.
Total revenue fell 3 percent to $837.4 million from $864 million.
Wall Street expected the Atlanta company to earn 1 cent per share on revenue of $835.2 million. The estimates of analysts surveyed by Thomson Reuters generally exclude one-time items.

The stock is down today about 3% although I don’t think the earnings report says much about WEN’s future. If this turnaround does work, it will take more time. On the other hand, we can see that this situation isn’t getting worse. I still view WEN as a highly speculative value stock.

You Can’t Be Serious
Posted by Eddy Elfenbein on May 12th, 2010 at 3:44 pm

TheStreet.com is reporting the rumor-that-won’t-die

Netflix is spiking as rumors surface yet again that Amazon is interested in acquiring the company. (BWAHAHAHA)
These rumors have surfaced many times over the last several years in regards to Netflix, most recently in January. Each time analysts have dismissed the claims. (Duh)
While anything is possible (note the Hewlett-Packard-Palm deal), Needham analyst Charles Wolf says it is unlikely.
“Amazon would not acquire Netflix for its by-mail business, which will eventually go away” he says. While Netflix has a terrific digital-streaming business, its library consists of mostly older films. It can’t offer new releases as they are available because it is too expensive.
Amazon, itself, has a streaming pay-per-view service for new releases, and it doesn’t seem like there is a barrier preventing Amazon to offer old movies, Wolf says. “So the company has little reason to buy Netflix.”

The rumor is moronic, yet the shares are up 7.5% today. Once again, welcome to Wall Street-istan!!

Sector Forecasts
Posted by Eddy Elfenbein on May 12th, 2010 at 1:41 pm

This is from S&P. Here are the full-year operating forecasts for the S&P 500 and each sector on March 31 and again two days ago, with the percent change:

You can see that the Financials have had the biggest improvement. The only sectors with lower forecasts are the defensive ones — Health Care, Staples and Utilities.
Here’s the same table but with 2011 forecasts and the first date in April 6.

Here’s a look at the P/E Ratios based on the 2010 and 2011 estimates:

Carney to CNBC.com
Posted by Eddy Elfenbein on May 12th, 2010 at 1:33 pm

Congratulations to John Carney formerly of Business Insider, formerly of DealBreaker who has joined cnbc.com. Guest of a Guest has the details:

Following a ignominious and unexpected exit from softcore porn slide show purveyor Business Insider, writer John Carney has a new gig. He’ll be reporting for duty soon as a senior editor at CNBC.com and will serve as on air commentator for the site. No word yet on which channels he’ll be frequenting but with those looks he could be a serious threat for money honeys all across NBC Universal properties.

The Argument for Stock-Picking
Posted by Eddy Elfenbein on May 12th, 2010 at 12:12 pm

Tadas Viskantas has an excellent article arguing that we’re entering the Golden Age of Stock-Picking.

Goldman Sachs! The Musical
Posted by Eddy Elfenbein on May 12th, 2010 at 10:46 am

The New Yorker spots a musical. Here’s a sample

CARL LEVIN (D-MICH):
I want to know what you knew
And exactly when you knew it
And why you all believed
You’d manage to get through it
FABRICE TOURRE:
We didn’t prey on our clients’ stupidity
We showed them our prices and offered liquidity
CARL LEVIN (D-MICH):
To you it may have been a game
To me it all seems pretty real
I mean to make you feel shame
For how you made this shitty deal
FABRICE TOURRE:
I’m not deceitful or conniving
Did you see the picture of me skydiving?

From the Department of No Surprise
Posted by Eddy Elfenbein on May 12th, 2010 at 10:38 am

An academic report:

Recent financial collapses have focused policymakers’ attention on the financial industry. To date, empirical studies have concentrated on corporate issuer activity, such as securities offerings and class actions. This paper makes a first step in studying SEC enforcement against investment banks and brokerage houses. This study suggests that the SEC favors defendants associated with big firms compared to defendants associated with smaller firms in three ways. First, SEC actions against big firms are more likely to involve exclusively corporate liability, with no individuals subject to any regulatory action. Second, the SEC is more likely to choose administrative rather than court proceedings for big-firm defendants, controlling for types of violation and levels of harm to investors. Third, within administrative proceedings, big-firm employees are likely to receive lower sanctions, notably temporary or permanent bars from the industry. To explain this gap, the paper first investigates whether big-firm violations are qualitatively different from small firms’ violations, but finds no support for this. This paper next explores two hypotheses that could explain a systematic bias in enforcement patterns: that constraints in bureaucratic resources weaken the SEC’s negotiating position towards big firms, and that SEC officials favor prospective employers.

Danaher Declares Split and Buyback
Posted by Eddy Elfenbein on May 12th, 2010 at 10:28 am

One of my rules is to never worry about what a former Buy List stock does. Just because it rallies doesn’t mean I was wrong to sell it. After all, the stock isn’t thinking about me.
I like to keep tabs on these stocks because they’re very good companies. A stock can turn from a good buy to a bad buy fairly quickly, but an excellent company usually remains so (though not always).
I’m still a big fan of Danaher (DHR) even though I decided to cut it loose from the Buy List at the end of last year. Danaher was on the Buy List from 2006 to 2009 and it did well for us.
The stock has continued to do well and that shouldn’t come as a surprise. They raised their Q1 outlook twice and Q2 once. The company beat earnings in January and again in April. The shares are currently up about 14% for the year.
Danaher is in the news today because they just announced a 2-for-1 stock split and a 10 million share buyback (moan). Since the company pays a very small dividend, this would have been a great time to give shareholders a little more cash-love.
Danaher is an excellent stock. But it would be a whole lot more excellenter about $15 cheaper.