• How Harley Could Roar Back
    Posted by on April 4th, 2007 at 7:58 am

    Michael Brush looks at the problems facing Harley (HOG):

    Harley-Davidson finances about half the motorcycles it sells. Now, many of those customers are having a hard time keeping up with payments — and the company is getting less for the Hogs it repossesses because used bike prices have been weakening.
    The problems may only get worse. As lending standards tighten because of concerns about low-end borrowers, sales growth could suffer. Somewhere between 10% and 15% of bikes sold last year were rolled out of the showrooms by subprime borrowers. Already, the company has taken 2007 earnings growth guidance down to 4%-6% — a hefty cut from the prior range of 11% to 17%.

    He thinks it could go back to $75 a share. We’ll find out more when earnings are announced on April 19. Due to the strike, I’m not expecting much, but the test will be whatever guidance the company gives.

  • Solengo Sues Dealbreaker
    Posted by on April 3rd, 2007 at 11:54 am

    Did you know POS Legal Action is an anagram of Solengo Capital?

    Solengo Capital Advisors ULC, a hedge fund company formed by a trader involved in one of the largest hedge-fund collapses ever, has sued a Web site for posting a copy of Solengo’s investor prospectus.
    The copyright lawsuit, filed in federal court in Manhattan, alleges the prospectus was posted in its entirety on Dealbreaker.com on Wednesday. The Web site’s publisher and editors refused to remove the document.
    The Greenwich, Conn.-based company’s complaint alleges the document was stamped “confidential” and contains the venture’s planned structure, trading and risk management platforms, offering information and biographies of its founders.
    “This proprietary information is integral to Solengo’s ability to gain an edge over competitors, standing in the marketplace and appeal to potential investors,” the lawsuit says. (Hey, they know how to use stock photos! Let’s invest.)
    Elizabeth Spiers, Dealbreaker’s publisher and founder; John Carney, the Web site’s editor in chief; and Bess Levin, a contributing editor, were all named as defendants. (Muffy??)
    Calls seeking comment from Spiers and the New York-based Web site’s general manager weren’t immediately returned Monday. A comment on the Web site attributed to Levin said that “writing ‘confidential’ on a document does not obligate DealBreaker or anyone else to keep your secrets secret.”
    Solengo was founded by Brian Hunter, a one-time star energy trader at shuttered hedge fund Amaranth Advisors LLC. Amaranth lost more than $6 billion in September, making it one of the largest hedge fund collapses in history.

    Naked Shorts has a PDF of the Legal Fun. One of Greg’s readers points out that Solengo’s lawyers, Kobre & Kim, are having some trouble with that principal/principle thing.

  • Europe tops US in stock market value
    Posted by on April 3rd, 2007 at 8:40 am

    Sacrebleu:

    Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets.
    Europe’s 24 stockmarkets, including Russia and emerging Europe, saw their capitalisation rise to $15,720bn (€11,819bn) at the end of last week, according to Thomson Financial data. That exceeded the $15,640bn market value of the US.
    The rise of the euro against the dollar, growth of east European markets such as Russia and stock market outperformance spurred by improving profitability have seen Europe close a long-held gap with the US. Ian Harnett at Absolute Strategy Research, who identified the move, said this marked a “seismic shift” in markets.

  • Trend Trading to Win
    Posted by on April 2nd, 2007 at 2:22 pm

    Hey buddy, wanna learn how to make a FORTUNE in the market? Of course you do. Listen to this guy, he turned a measly $33,000 into a MASSIVE $7 million in less than two years.
    That’s not all:

    On May 13, 2006, I traded LIVE at the MGM Hotel in Las Vegas in front of 100+ clients. I made over $139,000 that day. That’s real money, not some simulated trading portfolio.

    Um…May 13, 2006 was a Saturday. The markets were closed.
    (H/T: Howard Wallstrip Lindzon.)

  • Amphenol Splits 2-for-1
    Posted by on April 2nd, 2007 at 9:56 am

    No, Amphenol (APH) is not way down this morning. The shares just split 2-for-1. This means you now have twice as many shares at half the price.
    For record-keeping purposes, I’m adjusting the our buy price for APH from $62.08 to $31.04, and the number of shares will double from 805.4124 to 1610.8248.
    One other thing to note. The stock exchange will be closed this Friday for Good Friday. This is the one day of the year where most of the world is open and Wall Street is closed.

  • First Data Gets Private Equity Offer
    Posted by on April 2nd, 2007 at 9:51 am

    Is there still a reason for a stock exchange? Another great stock, First Data (FDC), has recieved a $29 billion private equity offer. The shares are up about ten-fold since it was spun off from American Express in 1992.
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    A note to investors: Pay attention when a good company (or country) spins off a business. You can often find great deals. Here’s Moody’s stock since it was spun off from Dun & Bradstreet. Here’s Corporate Executive Board since it was spun off from the Advisory Board Company. Last year, First Data spun off Western Union.

  • Questioning Malcolm Gladwell
    Posted by on April 1st, 2007 at 2:23 pm

    This is a long time coming. Fred Gardner takes aim at Malcolm Gladwell:

    Malcolm Gladwell is an influential New Yorker writer, the author of two best-sellers, “The Tipping Point” and “Blink.” In January the NYer published a Gladwell piece called “Open Secrets,” a convoluted defense of Enron’s management. Joe Nocera of the New York Times expressed surprise that the renowned Gladwell could write something so inaccurate and slanted.
    “Already ‘Open Secrets’ has been embraced by those who argue that the Enron prosecutions were an effort to ‘criminalize’ what amounted to flawed business decisions,” wrote Nocera. “The efforts to weaken Sarbanes-Oxley are also rooted in the idea that the country overreacted to Enron and the other corporate scandals. In effect, the central defense argument -that Enron didn’t really do anything illegal- has been given new life by Mr. Gladwell. And it isn’t remotely true.”

  • Slower Earnings Growth
    Posted by on March 31st, 2007 at 11:49 pm

    I think I’ve been too optimistic regarding earnings growth for this year. I thought there was a chance that profit growth could come in lower-than-expected, but now we’re seeing the proof.
    Jacqueline Doherty notes in Barron’s that on January 1, first-quarter earnings growth for the S&P 500 was estimated to be 8.7%. Today, it’s down to 3.8%. Since analysts tend to low-ball their forecasts, the results will probably be a bit better, perhaps around 7% or 8%.
    After that, however, things get hazy. For the second quarter, analysts see earnings growing by 4%, then 6.8% for the third quarter and 12.5% for the fourth quarter. I expect that the forecasts for third and fourth quarters will soon be pared back.
    The reason for the slower earnings growth can be blamed largely on just two sectors—the homebuilders and the autos:

    James Paulsen, chief investment strategist at Wells Capital Management, notes that 91% of real gross domestic product is growing by 4.3%. Only 9% of the economic is contracting by 10%–the part that is attracting all the attention.

    The good news is that even with lower earnings growth, the S&P 500 is still going for just 15.2 times 2007’s earnings.

  • Biomet’s CFO Resigns
    Posted by on March 31st, 2007 at 8:29 pm

    More backdating:

    Biomet Inc. said Friday its chief financial officer and another executive resigned after an internal inquiry found accounting errors related to stock option grants over the past 11 years.
    The company said it will have to restate its most recent annual report to reflect the disparity in the recorded expenses for stock option grants and the actual expenses for the grants, which totals about $50 million over 11 years, according to preliminary findings.

  • Asset Managers
    Posted by on March 30th, 2007 at 3:37 pm

    The old saying is true, it’s better to buy the stocks of asset managers than their funds.
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