Macy’s Lands the “M” Ticker
Posted by Eddy Elfenbein on June 1st, 2007 at 9:58 am

On the NYSE, the most highly prized ticker symbols are the single-letter symbols. That’s only for the very elite.
The NYSE has always kept M and I open, and everyone assumed that was for Intel and Microsoft. Well, they apparently think they’re not going to win Microsoft over.
Today, Macy’s (M) starts trading under M.
Two weeks ago, the company changed its name from Federated Department Stores and it used to trade under FD.

207% Returns
Posted by Eddy Elfenbein on June 1st, 2007 at 9:52 am

Since 2001, this asset has increased from $195,000 to $600,000 today. What am I talking about?
New York City cab medallions.
(Hat Tip: Altucher & Stockerblog.)

Dell’s Earnings
Posted by Eddy Elfenbein on May 31st, 2007 at 11:20 pm

After the bell, Dell (DELL) reported earnings of 34 cents a share. Here’s a look at Dell’s quarterly results for the last 10 year. These stats, however, may change. The company hasn’t filed an earnings report in nearly a year.

Quarter…..Sales….Oper. Income…..EPS
1-97………$2,588………$198………..$0.0675
2-97………$2,814………$296………..$0.0725
3-97………$3,188………$346………..$0.085
4-97………$3,737………$397………..$0.10
1-98………$3,920………$429………..$0.11
2-98………$4,331………$483………..$0.12
3-98………$4,818………$539………..$0.14
4-98………$5,173………$595………..$0.15
1-99………$5,537………$600………..$0.16
2-99………$6,142………$694………..$0.19
3-99………$6,784………$650………..$0.18
4-99………$6,801………$513………..$0.16
1-00………$7,280………$625………..$0.19
2-00………$7,670………$736………..$0.22
3-00………$8,264………$818………..$0.25
4-00………$8,674………$589………..$0.18
1-01………$8,028………$588………..$0.17
2-01………$7,611………$545………..$0.16
3-01………$7,468………$544………..$0.16
4-01………$8,061………$594………..$0.17
1-02………$8,066………$590………..$0.17
2-02………$8,459………$677………..$0.19
3-02………$9,144………$758………..$0.21
4-02………$9,735………$809………..$0.23
1-03………$9,532………$811………..$0.23
2-03………$9,778………$840………..$0.24
3-03………$10,622…….$912………..$0.26
4-03………$11,512…….$981………..$0.29
1-04………$11,540…….$966………..$0.28
2-04………$11,706…….$1,006……..$0.31
3-04………$12,502…….$1,089……..$0.33
4-04………$13,457…….$1,187……..$0.37
1-05………$13,386…….$1,174……..$0.37
2-05………$13,428…….$1,173……..$0.38
3-05………$13,911…….$944………..$0.39
4-05………$15,183…….$1,246……..$0.43
1-06………$14,216…….$949………..$0.33
2-06………$14,094…….$605………..$0.22
3-06………$14,383…….$824………..$0.30
4-06………$14,402…….$801………..$0.30
1-07………$14,622…….$947………..$0.34

With Dell, the important number to watch is operating margin. That came in at 6.48%, which is improvement. In the late 1990s, Dell’s operating margins were often over 10% or 11%. In other words, the same amount of sales does nearly half the work. Last quarter, sales increased by 2.86% which is roughly in line with inflation.

The Buy List So Far
Posted by Eddy Elfenbein on May 31st, 2007 at 9:55 pm

Now that the first five months of 2007 are down, let’s look at how our Buy List is doing:

The red line is the Crossing Wall Street Buy List. The black line is the S&P 500.
The 20 stocks on the Buy List are up an average of 4.43% so far. That’s behind the S&P 500 which is up 7.92%. Neither figure includes dividends. The daily volatility of the Buy List is a tiny bit more than the S&P 500 (just 0.48%).
The Buy List was actually leading the S&P 500 up through early April. But the market’s big kick after that left the Buy List in the dust. The good news is that we’ve closed the gap a little in the past two weeks.

Wachovia to buy A.G. Edwards
Posted by Eddy Elfenbein on May 31st, 2007 at 11:52 am

Fresh from buying Golden West Financial, Wachovia (WB) is now buying A.G. Edwards (AGE) for $6.8 billion in cash and stock. This will create the second-largest U.S. retail brokerage.
In September 1974, you could have picked up shares of AGE for less than nine cents a share–after factoring many, many stock splits. The stock is currently trading around $87. That’s a gain of nearly 100,000%. Not bad.

Gates and Jobs Joint Appearance
Posted by Eddy Elfenbein on May 31st, 2007 at 10:41 am

I noticed this sentence in the San Jose Mercury‘s story on yesterday’s joint appearance by Bill Gates and Steve Jobs:

On a personal level, Jobs and Gates were good enough friends in the 1980s to double date occasionally and for Gates to leave friendly prank calls on Jobs’ answering machine.

Am I the only one who wants to hear the girls’ account of the evening?

Surowiecki on Chrysler
Posted by Eddy Elfenbein on May 31st, 2007 at 10:34 am

In the latest New Yorker, James Surowiecki looks at Cerebus’ purchase of Chrysler. He says that “legacy costs” are a problem, but not the only problem.

A 2006 report by the Harbour-Felax Group, a well-respected automotive-industry analyst, concluded that in 2005 Chrysler’s health-care costs were about eleven hundred dollars more per vehicle than Toyota’s. But even if that gap were closed Chrysler and other U.S. automakers would be far less profitable and would be growing more slowly than their foreign competitors. Ultimately, American manufacturers sell too few cars for too little money, and have to offer too many incentives—thousands in cash back or low-interest financing—on the vehicles they do manage to sell. That same Harbour-Felax report found that, on average, Japanese automakers’ profits for 2005 were twenty-nine hundred dollars more per vehicle sold in the U.S. than those of American automakers. And most of that profit comes not from lower production costs but from the Japanese automakers’ being able to charge more, because their cars are better designed and more reliable, and because their mix of products is smarter. Honda’s revenue per vehicle, for instance, was twenty-six hundred dollars more than Chrysler’s.

Q1 GDP grew by 0.6%
Posted by Eddy Elfenbein on May 31st, 2007 at 10:11 am

The government reported today that the economy grew by 0.6% (annualized) in the first three months of this year. Actually, if you want to be precise, it was 0.6496%, which nearly rounds to 0.7%. In any event, this is a sharp downward revision from the initial estimate of 1.3% growth.
Bloomberg reports:

Today’s revisions reflected a bigger trade deficit and fewer inventories than the government estimated last month. The trade deficit widened to an annual pace of $611.8 billion, subtracting 1 percentage point from GDP, twice as much as previously estimated.
Companies reduced stockpiles at a $4.5 billion rate last quarter compared with initial estimates of a $14.8 billion gain at an annual rate. The figures subtracted another percentage point from growth.
A jump in consumer spending last quarter was one of the few things that kept the expansion alive. The increase in spending, which accounts for about 70 percent of the economy, was revised up to an annual rate of 4.4 percent, the biggest gain in a year, from an initial estimate of 3.8 percent.

Over the last four quarters, the economy has grown by just 1.9%. The economy tends to be very trend like, meaning a weak quarter is usually followed by another weak quarter. We’ve now had four straight quarters of below-trend growth. But don’t count the economy out just yet. The Fed may start to lower rates soon. The weak dollar helps as well.

New High on the S&P 500
Posted by Eddy Elfenbein on May 30th, 2007 at 4:42 pm

It finally happened! The S&P 500 closed today at 1530.23, a new all-time high. It took seven years and two months to break the old high.

ISS votes Thumbs Down to Biomet Buyout
Posted by Eddy Elfenbein on May 30th, 2007 at 10:00 am

Great news this morning. Institutional Shareholder Services, the highly influential shareholder-advisory service, recommends voting against the Biomet (BMET) buyout offer.
It’s about time someone spoke out against this deal. I wrote an open letter against the offer back in December. Considering what a strong company Biomet is, the private equity offer of $44 a share is way too low. The important thing to remember is that shareholders have the right to overrule management, especially in important decisions like this. To be approved, the vote needs 75% support.