• Yahoo Watch
    Posted by on April 18th, 2007 at 9:48 am

    After the close yesterday, Yahoo (YHOO) reported earnings of 10 cents a share, a penny below forecasts. The stock is down about 11% this morning.
    I think this is just the beginning. It looks like Panama has been completely overrated. I wish I could say I was surprised. I wouldn’t go near Yahoo until it’s at most $12 a share, which is about 60% below where it is now.
    The AP noted:

    ”When you sift through everything, there is not a whole lot to get excited about right now,” said Cantor Fitzgerald analyst Derek Brown.
    After subtracting advertising commissions, Yahoo’s revenue totaled $1.18 billion. That figure fell about $25 million shy of the average analyst projection.

    Interestingly, the AP story began:

    Investors were f – ) again until the Internet icon‘s disheartening first-quarter results ruined the mood.

    Texting has hit the big time. Although, many news outlets changed it to:

    Investors were falling in love with Yahoo Inc. again until the Internet icon’s disheartening first-quarter results ruined the mood.

    Soon, they may be working Ctrl+Alt+Del into their ledes.
    Seeking Alpha has a roundup of analysts’ reactions to Yahoo’s earnings.
    Business Week writes that Yahoo’s next search will be for a new CEO. The company quotes CFO Sue Decker:

    Chief Financial Officer Sue Decker attributed the decline to the phaseout of Microsoft’s search ad business and rising costs of driving traffic to Yahoo sites.

    That’s like saying “we attributed the decline to our lousy business model.”
    I say that Decker will replace Terry Semel before the summer is over.

  • Warren Buffett, Hell Inch Closer to Rendezvous
    Posted by on April 18th, 2007 at 7:48 am

    gp%5Bvm%20%3D0949f.jpg
    Fortune asks if Warren Buffett is “helping to support genocide in Darfur.”

    Berkshire has become a target of the divestment campaign because it owns 2.3 billion shares of PetroChina Co., a subsidiary of the state-controlled China National Petroleum Corp. (CNPC). CNPC has extensive operations in Sudan; it owns a major stake in Sudan’s national oil consortia.
    China and Sudan are engaged in a marriage of convenience. For its part, China gets oil – Beijing purchased more than half of Sudan’s oil exports in 2005. China’s growing demand for energy has led the Chinese to cultivate close relationships with many oil-rich African nations.
    In return, Sudan gets money, weapons and political backing from China. Because about 70 to 80 percent of Sudan’s oil revenue is funneled into its military, China’s oil assets in Sudan are “an undeniable and well-documented enabler of Khartoum’s genocidal policy in Darfur,” according to the Sudan Divestment Task Force.

    Hmm…seems like a bit of a stretch to me. I’m not so sure Warren can take the blame on this one. Now, about that annoying Cockney gecko….

  • Breaking: The S&P 500 Is in the Black for Millennium
    Posted by on April 17th, 2007 at 7:00 pm

    It took awhile, but the S&P 500 is now positive for the millennium. In your face, bears! It’s also up for the century. And decade! (All in one day, woo!)
    The S&P 500 closed today at 1471.48 which is just 0.15% higher than the December 31, 1999 close of 1469.25.
    That’s 7-1/4 years for 0.15%.
    Of course, the bad news is that inflation has increased by 22% since then. Meaning, today’s 1471.48 is more like 1206. But dividends have added about 12.5% (not much, but we’ll take it).
    But not all stocks are flat. The story of the decade, I mean millennium, is small-cap and value.
    Here’s a rundown of some major indexes since December 31, 1999:
    S&P 600 Small-Cap Value…………129.84%
    S&P 600 Small-Cap………………….115.01%
    S&P 400 Mid-Cap Value……………109.02%
    S&P 600 Small-Cap Growth……….98.15%
    S&P 400 Mid-Cap………………………97.07%
    S&P 400 Mid-Cap Growth…………..84.92%
    Dow Utilities……………………………..82.35%
    Dow Transports…………………………70.70%
    Morgan Stanley Cyclical……………..68.33%
    Russell 2000……………………………..64.23%
    Morgan Stanley Consumer………….36.02%
    S&P 500 Value………………………….29.95%
    Dow………………………………………….11.10% (29.03% w/divs)
    Russell 3000………………………………8.19%
    Wilshire 5000…………………………….7.95% (20.49% w/divs)
    Russell 1000………………………………4.60%
    S&P 500…………………………………….0.15%
    S&P 100………………………………….-15.04%
    S&P 500 Growth………………………-23.75%
    Nasdaq…………………………………….-38.15%
    Nasdaq 100……………………………..-50.51%
    Here’s how the 10 S&P 500 Industry Sectors have fared:
    Energy……………………………………..128.23%
    Financials…………………………………..52.87%
    Materials……………………………………50.94%
    Utilities……………………………………..46.96%
    Staples……………………………………..34.99%
    Healthcare…………………………………27.57%
    Industrials…………………………………20.99%
    Discretionary……………………………….3.97%
    Telecom……………………………………-48.75%
    Tech………………………………………..-54.70%

  • Johnson & Johnson’s Earnings
    Posted by on April 17th, 2007 at 11:48 am

    Last March, I wrote that shares of Johnson & Johnson (JNJ) looked cheap. Not a bad call. The stock was around $57 and today it’s up to $65. The company just reported very good earnings. J&J earned $1.16 a share (after charges) compared with analysts’ forecasts of $1.04. The company now sees 2007 earnings of $4.02 to $4.07 a share, compared with the Street’s forecast of $3.90.
    By the way, J&J was one of the final stocks cut from my 2007 Buy List.

  • Wall Strip Looks at Crocs (CROX)
    Posted by on April 17th, 2007 at 11:41 am


    Ugly shoes, but a nice looking chart. Call me a skeptic. I tend to shy away from fad-like products. There’s no accounting for taste. But I have to admit that the company, and the shares, have performed very well.

  • The Pound Hits $2
    Posted by on April 17th, 2007 at 10:40 am

    image459.png
    You know your currency is in rough shape when even the British pound is doing well against it. Today, the pound reached $2 for the first time in 15 years.
    By the way, that big plunge on the chart in 1992 is when Britain dropped out of the ERM. It’s believed that George Soros made over $1 billion that day.

  • JOSB’s Earnings
    Posted by on April 17th, 2007 at 10:08 am

    Here’s an interesting lesson on how irrational the stock market can be in the short-term. Last week, Bed Bath & Beyond’s (BBBY) stock fell after its earnings report. I follow that stock pretty closely and there wasn’t one single item in the earnings report that came as a surprise. It was basically what any reasonable person should have expected. Yet the shares opened Thursday morning much lower, and they’ve rallied almost continuously since then. Right now, BBBY is slightly above where it was before the earnings report. Looking back at what happened, it just doesn’t make much sense. This is why I try to caution investors against timing the market.
    Well, now a similar story has happened with Jos. A Bank Clothiers (JOSB). The company just reported terrific earnings of $2.36 a share, 11 cents more than Wall Street’s forecast. Yet the stock was hit last week on a poor sales report. Now the stock is higher than where it was before.
    One of the great things about investing is that doing absolutely nothing can work to your advantage.
    image%20460.png
    Unfortunately, the big jump in JOSB is being cancelled out by the fall in Fair Isaac (FIC).

  • Today’s CPI Report
    Posted by on April 17th, 2007 at 9:36 am

    image458.png
    The bad news is that consumer prices shot up last month. The good news is that it was largely due to rising energy costs. The core rate of inflation, which excludes food and energy costs, was up just 0.1%, less than the 0.2% expected by Wall Street.
    Last summer, Ben Bernanke set off a big rally when he said that the Federal Reserve sees core inflation (he uses the PCE) cooling off in 2007. It looks like the Fed was right.

  • From the Citigroup Conference Call
    Posted by on April 16th, 2007 at 7:04 pm

    Courtesy of Seeking Alpha:

    Mike Mayo – Deutsche Bank:
    And so do you think this quarter is an inflection point with all these savings ahead for this year?
    Chuck Prince: Well, I don’t like to predict anymore, Mike. People kind of throw my predictions in my face. I know you wouldn’t do that, but others do, and so I think I would just like to stay away from predictions for right now.

  • Fair Isaac Guides Lower. A Lot Lower.
    Posted by on April 16th, 2007 at 5:08 pm

    Ugh.

    Preliminary Second Quarter Fiscal 2007 Results
    The company expects to report second quarter revenues in the range of $200 to $202 million in second quarter of fiscal 2007 versus $208.2 million reported in the prior year period. This is lower than the second quarter revenue guidance of $215 million provided by the company last quarter. Net income for the second quarter of fiscal 2007 is expected to total in the range of $20 to $22 million, or $0.35 to $0.37 per diluted share, versus $27.0 million, or $0.40 per diluted share, reported in the prior year period. This is lower than the second quarter GAAP earnings per diluted share guidance of $0.48 provided last quarter.
    Revised Third Quarter and Full Year Fiscal 2007 Guidance
    Total revenues are expected to be $195 to $200 million for the third quarter of fiscal 2007 with GAAP earnings of approximately $0.33 to $0.38 per share. Full year fiscal 2007 revenue is now expected to be $795 to $805 million with GAAP earnings per diluted share of $1.55 to $1.65. The previously announced sale of our mortgage product line accounts for approximately $7 million to $8 million of the reduced revenue guidance. This full year fiscal 2007 guidance is lower than the guidance of $870 million in revenue and GAAP earnings per diluted share of $2.15 provided earlier by the company.

    The shares are down over 11% after hours.