• Akamai’s Back
    Posted by on May 3rd, 2006 at 9:20 am

    One of the hottest stocks from the Internet Craze is popular again. Akamai Technologies (AKAM) went public in 1999 at $26 a share. Within a few weeks, the stock soared to $327.
    The stock soon became as hated as much as it was loved. By 2002, it reached just 67 cents a share. But now the sun is shining again on Akamai. It was just added to the Nasdaq 100 index.

    Akamai has been telling the same basic business story since it went public: The company can manage Internet traffic for its customers with an army of computer servers placed strategically all over the world. Proprietary software and algorithms route heavy traffic to those other servers to shorten the trip or avoid jams when a customer’s online material is so hot everyone wants to see or hear it at the same time.
    Akamai’s business picked up and the stock story came back into favor thanks to the boom in broadband Internet service. Fast connections available to the masses have created an explosion of demand for audio and video services, containing much more digital information that has to be moved through the Internet’s electronic pipes.
    “Clearly we are all doing things that were a lot more difficult and tedious before we got broadband Internet,” says technology analyst Tony Ursillo of the Boston investment firm Loomis Sayles & Co., which owns Akamai stock. “That’s opened up the doors for a lot of this content to be available to a broader audience and driven additional needs by those content providers. It’s driven them straight into Akamai’s arms.”

  • New Five-Year High
    Posted by on May 2nd, 2006 at 5:50 pm

    We done it! The S&P 500 closed at 1,313.21. This is the highest close since February 15, 2001.
    Other indexes, however, like the Nasdaq have lagged a bit, so the Wilshire 5000 is still below its levels of two weeks ago. It’s hard to say what this means. The market may becoming more narrowly focused. Hey, it can’t be oil and rocks every day. Can it?

  • SEIC Beats Earnings
    Posted by on May 2nd, 2006 at 12:45 pm

    The market is recovering today from yesterday’s late-day sell-off. SEI Investments (SEIC) is doing well today. The company reported earnings of 54 cents a share, six cents better than estimates. Revenues jumped 49%. The stock is up to a new 52-week high today.
    UnitedHealth (UNH) said it’s going to resume its share buyback plan. The company is planning on buying 10% of its outstanding shares. As I’ve said many times before, I’d prefer to get the cash instead of having the companies repurchase its stock.
    The market is up today and positive earnings news from Verizon (VZ) and Archer Daniels Midland (ADM). (By the way, ADM has been a darn good stock for the past few years.)
    This is shaping up to be a good earnings on Wall Street. The thing about earnings expectations is that most companies are expected to beat expectations. Typically, about 57% of companies beat earnings expectations. This quarter, about 70% of companies are topping forecasts. Energy stocks fell sharply last Wednesday and Thursday, but seem to have made up lost ground very quickly.
    I also have to give a shout-out to Ed over at Daily Dose of Optimism. He’s been pounding the tables on TheStreet.com (TSCM), and he’s been right. Check out this chart. The stock is through $11 a share today.

  • UnitedHealth Announces Executive Pay
    Posted by on May 1st, 2006 at 6:15 pm

    Well, this isn’t a surprise:

    Health insurer UnitedHealth Group said Monday that it reduced pay packages and perks for its most senior executive and further reduced board compensation putting into effect a number of measures started in 2002.
    The company said it halted equity-based awards for such executives as William W. McGuire, chairman and chief executive, and Stephen J. Hemsley, president and chief operating officer.
    McGuire recently defended his billion-dollar stock option compensation against critics who pointed to the rising cost of health care.
    The plan also calls for dispensing with severance for the most senior executives in change-in-control transactions, and capping supplemental retirement plan benefits.
    Also, the board will take an immediate 40 percent cut in compensation, following a 20 percent cut in 2005.

    Nothing causes action like a falling share price.

  • Late Selling
    Posted by on May 1st, 2006 at 3:48 pm

    There went a good day. It all started just after 3 pm.
    mayone.bmp
    The financials are being hit the hardest.

  • Top 10 Industry Groups
    Posted by on May 1st, 2006 at 12:31 pm

    Here are the Top 10 Dow industry groups year-to-date:
    Steel…………………………….57.63%
    Precious Metals…………….51.25%
    Coal……………………………..37.09%
    Commercial Vehicles……..31.21%
    Oil Equipment……………….27.71%
    Nonferrous Metals…………27.05%
    Gambling………………………24.81%
    Business Training………….24.63%
    Waste & Disposal………….22.76%
    General Mining……………..22.25%

  • Sysco’s Earnings
    Posted by on May 1st, 2006 at 9:55 am

    Happy May Day!
    Wall Street is celebrating International Workers Day by having a strong opening. The S&P 500 is up to 1,316. In April, the S&P 500 closed three times at 1,311 and change, and no higher. If the market holds up, this will be another new high. Once again, energy stocks are leading the way.
    Sysco (SYY), one of our Buy List stocks, reported earnings today. The company earned 30 cents a share, including a four cent expense for stock options. The market was looking for 32 cents a share. Sales came in slightly better-than-expected. The stock is higher in early trading.

  • Junior Wall Street Wannabes
    Posted by on April 30th, 2006 at 11:57 am

    The NYT weighs in on the Plotkin/Pajcin case:

    Wall Street has often been plagued by insider trading scandals in the past, most spectacularly in 1980’s, when it ensnared some of the most powerful titans of finance. But the scheme that Mr. Pajcin and Mr. Plotkin are accused of involves the most junior of Wall Street wannabes.
    Indeed, its cast of characters would be more likely to be found appearing on “Jerry Springer” than the Wall Street program “Squawk Box.” They include Ms. Vujovic, an exotic dancer who earned $6,000 to $7,000 a night, according to a transcript of Mr. Pajcin’s bail hearing; Mr. Pajcin’s aunt, who was a retired seamstress in an underwear factory in Croatia; Mr. Plotkin’s father; a driver in Croatia; a wealthy investor in Germany; and a softball buddy from Brooklyn named Elvis.

  • John Kenneth Galbraith, 1908-2006
    Posted by on April 30th, 2006 at 7:43 am

    From the New York Times:

    He wrote two more major books in the 50’s dealing with economics, but both were aimed at a large general audience. Both were best sellers.
    In “The Great Crash 1929,” he rattled the complacent, recalled the mistakes of an earlier day and suggested that some were being repeated as the book appeared, in 1955. Mr. Galbraith testified at a Senate hearing and said that another crash was inevitable. The stock market dropped sharply that day, and he was widely blamed.
    “The Affluent Society” appeared in 1958, making Mr. Galbraith known around the world. In it, he depicted a consumer culture gone wild, rich in goods but poor in the social services that make for community. He argued that America had become so obsessed with overproducing consumer goods that it had increased the perils of both inflation and recession by creating an artificial demand for frivolous or useless products, by encouraging overextension of consumer credit and by emphasizing the private sector at the expense of the public sector. He declared that this obsession with products like the biggest and fastest automobile damaged the quality of life in America by creating “private opulence and public squalor.”

  • On Top of the World
    Posted by on April 29th, 2006 at 3:42 pm

    The Economist looks at Goldman Sachs (GS):

    By any measure, Goldman Sachs is a formidable company. The bank knocks the spots off its competitors, whether in pure “investment banking”, the traditional craft of underwriting and mergers and acquisitions in which it made its name, or in its new focus, trading for customers and its own account. Even compared with leaders in other industries, Goldman makes spectacular returns. Among its latest record-busting yardsticks was a 40% quarterly return on equity. The average pay-packet of its 24,000 staff last year was $520,000—and that includes a lot of assistants and secretaries.
    This makes the bank an easy target for populist politicians and tabloid newspapers. The real reason why Goldman should matter to outsiders is not because it is a manufacturer of millionaires (good luck to it); but because it stands at the centre of a two-decade-long transformation of the financial markets and a new approach to risk.