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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.



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Saturday, April 30, 2011

RIMM Disconnect OR Consumer Spending Issue

RIM RIMM consumer spendingThe latest news received in Mobility may have as much to do with gasoline as it does with product segment disruption driven by Apple's iPhone and Google's Android. If consumer caution has increased in mobile phones, then investors had better steer clear of Consumer Discretionary stocks for as long as gasoline is this high and threatening further inflation.


Relative tickers: Nasdaq: RIMM, Nasdaq: AAPL, NYSE: NOK, Nasdaq: MSFT, NYSE: HPQ, NYSE: MOT, NYSE: MSI, Nasdaq: QCOM, NYSE: ALU, Nasdaq: ACOM, Nasdaq: SPWRB, Nasdaq: SPWRA, Nasdaq: FFBH, Nasdaq: NTGR, Nasdaq: WEBM, Nasdaq: STBC, NYSE: LVB, Nasdaq: ASGN, NYSE: MXL, Nasdaq: TNAV, Nasdaq: GBLI, Nasdaq: SCEI, NYSE: NR, Nasdaq: AMTC, NYSE: DRL, NYSE: TGS, NYSE: N, NYSE: LFT, AMEX: AIM, Nasdaq: SWKS, NYSE: KEG, Nasdaq: ZNWAW, Nasdaq: INUV; Losers – Nasdaq: REGN, Nasdaq: USATW, NYSE: HRZ, Nasdaq: KVHI, Nasdaq: EDSWW, NYSE: SKH, Nasdaq: USAT, Nasdaq: SUNH, Nasdaq: INPH, Nasdaq: SPPI, Nasdaq: ENSG, Nasdaq: ROSA, Nasdaq: CNGL, NYSE: ZZ, Nasdaq: GDOT, Nasdaq: CTCT, Nasdaq: SURW, NYSE: IM, Nasdaq: GFRE, Nasdaq: DECK, Nasdaq: TGIS, Nasdaq: DRIV, NYSE: RAS


RIM (Nasdaq: RIMM) Disconnect OR Consumer Spending Issue?


prophetResearch in Motion (Nasdaq: RIMM) dropped 14% Friday. RIM was slammed by a downgrade and severe price target slashing by RBC Capital Markets. Unfortunately, that followed the company's forecast revision, which was the real catalyst for the stock's slide. RBC cut the stock to "Sector Perform" from "Top Pick," and reduced its price target to $55 from $90.


Really? Are you serious? Can a story change that much overnight? A $35 change to a $90 price target calls for some serious explaining, not just to the investors who followed the advice, but to the boss. We're talking about a reduction of forecast value to 61% of the estimate that stood a day prior. As an analyst, I understand that when dealing with high-technology, emerging growth companies, significant shifts can occur in value opportunity (keyword). This is why we use scenario and sensitivity analysis, to hedge against this kind of catastrophe - if the analyst was ever right in the first place or is even right currently. Analysts are employed to at least come close, and that $35 shave is better suited for Vegas than Wall Street.


The Operations

Research in Motion cut its first quarter profit outlook, and looks to be following the path of other Apple (Nasdaq: AAPL) iPhone and Android (Nasdaq: GOOG) competitors turned footstools. The list includes Palm (saved by HP (NYSE: HPQ)) and Nokia (NYSE: NOK). Motorola (NYSE: MOT, NYSE: MSI) is so long gone that we almost forgot to mention it, sort of like a rotary dial telephone, irrelevant.


RIM cut its May-ending Q1 profit forecast to a range of $1.30 - $1.37 a share, down from $1.47 to $1.55. Yahoo Finance (Nasdaq: YHOO) had the analysts' consensus EPS estimate for RIMM at $1.48, and the lowest mark at $1.40, so even the most pessimistic of analysts surveyed was too optimistic in reality. Before last week, I bet the analyst with the low estimate felt naked; he was probably even pressured by his boss to stay tighter to the consensus from which he bravely ventured. We hope he made sure to see the boss took notice of RIM's news.


One of the company's CEOs (seems one too many) said in the conference call that it was a margin issue hurting the bottom line, which he blamed on aged high-end product. That seems to show a misconception, or hopeful desperation. The view from inside a company is often completely different than from the outside. If we were at dinner tonight, and I was Apple, and my date was RIM, I would likely say, "It's not you RIM, it's me."


But what if it was neither?

Given Broadcom's bad news earlier in the week and RIM's news to close out the week, not to mention the ongoing saga at Nokia (NYSE: NOK), I would be looking to get out of all mobile telecommunications stocks today. When Broadcom analysts blamed BRCM's drop on general product demand slippage in mobility, we had our doubts, but BRCM's customer list does not mention Research in Motion.


I would take my view a step further even. I'm wavering from all Consumer Discretionary shares for as long as gasoline remains near current levels, while threatening to go higher. This mobility squeeze may have as much to do with gasoline as it has to do with Apple and Google disruption. If consumers are being more cautious with regard to what is now considered a non-discretionary spend in mobile phones, then how much closer to the vest will discretionary money be kept? We said last week that the old adage, "Sell in May and Walk Away" seemed to make good sense today. With regard to consumer discretionary shares, I think you can add an exclamation point to that.


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Article should interest investors in Apple (Nasdaq: AAPL), Nokia (NYSE: NOK), Microsoft (Nasdaq: MSFT), Google (Nasdaq: GOOG), Hewlett-Packard (NYSE: HPQ), Motorola (NYSE: MOT), Motorola Solutions (NYSE: MSI), QUALCOMM (Nasdaq: QCOM), Alcatel-Lucent (NYSE: ALU) . Friday's other most active stocks were led by: Gainers – Ancestry.com (Nasdaq: ACOM), SunPower (Nasdaq: SPWRB, SPWRA), First Federal Bancshares of Ark (Nasdaq: FFBH), Netgear (Nasdaq: NTGR), WebMediaBrands (Nasdaq: WEBM), State Bancorp (Nasdaq: STBC), Steinway Musical (NYSE: LVB), On Assignment (Nasdaq: ASGN), MaxLinear (NYSE: MXL), TeleNav (Nasdaq: TNAV), Global Indemnity (Nasdaq: GBLI), Sino Clean Energy (Nasdaq: SCEI), Newpark Resources (NYSE: NR), Ameritrans Capital (Nasdaq: AMTC), Doral Financial (NYSE: DRL), Transportadora de Gas (NYSE: TGS), Netsuite (NYSE: N), Longtop Financial (NYSE: LFT), Aerosonic (AMEX: AIM), Skyworks Solutions (Nasdaq: SWKS), Key Energy (NYSE: KEG), Zion Oil & Gas (Nasdaq: ZNWAW), Inuvo (Nasdaq: INUV); Losers – Regeneron (Nasdaq: REGN), USA Technologies (Nasdaq: USATW), Horizon Lines (NYSE: HRZ), KVH Industries (Nasdaq: KVHI), Exceed (Nasdaq: EDSWW), Skilled Healthcare (NYSE: SKH), USA Technologies (Nasdaq: USAT), Sun Healthcare Group (Nasdaq: SUNH), Interphase (Nasdaq: INPH), Spectrum Pharmaceuticals (Nasdaq: SPPI), The Ensign Group (Nasdaq: ENSG), iPath Short Extended Russell (Nasdaq: ROSA), China Nutrifruit (Nasdaq: CNGL), Sealy (NYSE: ZZ), Green Dot (Nasdaq: GDOT), Constant Contact (Nasdaq: CTCT), SureWest (Nasdaq: SURW), Ingram Micro (NYSE: IM), Gulf Resources (Nasdaq: GFRE), Deckers Outdoor (Nasdaq: DECK), Thomas Group (Nasdaq: TGIS), Digital River (Nasdaq: DRIV) and RAIT Financial (NYSE: RAS).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Thursday, April 28, 2011

Sell in May and Go Away

sell in May and go awayBad news emerged today on the jobs front, as Weekly Jobless Claims extended a deterioration trend. A few weeks ago, the rise above 400K new unemployment insurance filings looked like it might be associated with the threatening government shutdown. Now, it's looking like a trend, and one the market will not ignore. Add to that sluggish economic growth in the first quarter, sad consumer confidence, chaos and uncertainty globally and rising prices across the board, and perhaps that old adage, "Sell in May and Go Away," makes perfect sense today.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative stocks: NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: STT, NYSE: JNS, Nasdaq: TROW, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, Nasdaq: PAYX, NYSE: MAN, NYSE: RHI, Nasdaq: JOBS, NYSE: MWW, NYSE: KFY, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, Nasdaq: KELYA, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, NYSE: JOB, Nasdaq: TSTF


Sell in May and Go Away


geniusThe U.S. Department of Labor today reported a Weekly Jobless Claims count that caught everyone by surprise. New Unemployment Insurance Claim filings spiked by 25,000 in the period ending April 23, and moved comfortably above the psychological threshold of 400K, to 429K. Economists were certainly surprised by the increase, as Bloomberg noted the economists' consensus forecast at just 390K.


Just a couple of weeks ago, we speculated here that a threatening government shutdown might have driven many a rushed claim filer to get their paperwork in, or that it perhaps sped the government's processing of claims. Last week, we considered that the remnants of such action might still be at play. The increased claims count is definitely a trend now though, as the four-week moving average jumped above the dark mark, to 408,500. Thus, we have no farther to look than the economy for the culprit behind claims change.


Heading into April, all looked on the mend as far as the labor situation went. Reported unemployment had mystically improved once again, even after our adjustments which showed the real rate much higher than the reported level. Given April's trend, this month's Employment Situation Report might tell a different story, one that is better aligned with first quarter GDP data perhaps, which showed a soft gain of just 1.8%, short of the economists' consensus view for 2.0% based on Bloomberg data.


If so, then be sure that the market will not ignore such bad circumstance. Stock rise over the last several years has coincided with improved claims data, and it should likewise sink with it. The S&P 500 Index was up just fractionally Thursday, at about its 52-week high, but if the economy is indeed hitting a soft spot, that old saying, "Sell in May and Go Away," may certainly apply this year.


Since World War II, the performance of stocks in the period running from May through October has been relatively weak versus the November through April span. It would seem there are enough reasons for a superstitious investment community to buy into a continuation of trend this year. Thus, consider selling this May and going away to someplace without ticker tapes.


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Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX) and Kelly Services (Nasdaq: KELYA).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Pending Home Sales Show Solidly in March 2011

pending home salesThe National Association of Realtors regular monthly release, showing Pending Home Sales, indicates the continuation of improvement in the real estate market in March 2011. While growth was fragmented, and as activity remains just mildly positive, the realtor group affirmed its forecast for growth in housing in 2011.


Relative tickers: Nasdaq: ITIC, NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: SPG.


Pending Home Sales Show Solidly in March 2011


New York real estate agentsSlow and steady wins the race. The sprinting hare overexerts himself and tires, and the sure tortoise passes him lying in exhaustion. This is illustrated in every asset bubble, driven by hare-infatuated capital, and it was the case again in the housing bubble of the last decade. The good news is that the death of the hare is behind us and the tortoise is now making his way, progressing.


The National Association of Realtors' (NAR) Pending Home Sales Index increased by 5.1% over the revised lower February mark, reaching 94.1 in March. Still, this index and all other real estate metrics that have been recently reported show a level of activity short of the prior year; the Pending Home Sales Index was 11.4% below the 106.2 March 2010 mark. The NAR points out why, reminding investors that last spring's market was inflated by the deadline to qualify for the First Time Homebuyer Tax Credit. As we approach the summer-low comparables for real estate activity though, year-over-year comparisons should show improvement like the month-to-month comparisons reflect currently. Understanding this allows for the digestion of the NAR's full 2011 forecast for 5 to 10 percent existing home sales growth.


Monthly activity has been choppy, but as we look back at the change since last June, we find pending home sales have increased by 24%. A closer inspection of regional activity also serves to blur observation of general growth. The Northeast, which was burdened by heavy snowfall through January and into February, saw pending home sales slip 3.2% in March. Many theorize that the whole sales process, which includes prospective buyers walking through homes, was set aback by the extreme weather conditions this past winter. The Midwest, where weather again is certainly at issue, only saw a 3.0% increase in March. But in the West and South, where weather is more favorable and where the population of the nation tends to migrate, we saw better growth rates. The Pending Home Sales Index for the West rose by 3.1%, but is closer to prior year levels than any other region. In the South, growth spurted by 10.3% in March.


One troubling trend though is that the percentage of distressed property transactions is increasing, reaching about 40% last month. This serves to lower the average sale ticket, and weighs on overall pricing comparisons. However, these properties are also weeding themselves out of the market and serving to help place a floor for housing to grow from. On the positive, the weaker dollar resulting from Federal Reserve policy and other factors, serves to draw foreign demand for U.S. assets. Thus, while domestic demand is hampered by high unemployment and tighter lending standards, a wider door is opened to foreign investors.


In conclusion, this report serves as yet another signal that a floor in housing seems set. Barring further disruption to the economy, perhaps driven by rising fuel, food and other prices, or other unforeseen event, housing seems to offer opportune alternative investment.


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Editor's Note: Article should interest investors in Investors Title (Nasdaq: ITIC), Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO), Simon Property Group (NYSE: SPG).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Wednesday, April 27, 2011

EPS Movers - BA BRCM ROK

EPS movers April 27 2011 BA BRCM ROK

Our EPS Movers for April 27, 2011 highlights a positive driver at Boeing and negative news at Rockwell Automation and Broadcom. Being an old analyst, I could not help but add my feeling (or value added color) to the market moving news found here.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Today's EPS reporters included NYSE: AEA, Nasdaq: AFFX, NYSE: AFL, Nasdaq: AKAM, NYSE: ATI, NYSE: ALL, Nasdaq: ARII, Nasdaq: ARRS, NYSE: ARW, NYSE: ABG, NYSE: AIZ, NYSE: AVB, NYSE: AVY, Nasdaq: BIDU, NYSE: BHI, NYSE: ABX, NYSE: BP, NYSE: EAT, NYSE: COG, Nasdaq: CTIC, Nasdaq: CHRM, Nasdaq: CINF, NYSE: CIT, Nasdaq: CTXS, NYSE: COP, NYSE: GLW, Nasdaq: CSGP, NYSE: CS, NYSE: CCI, NYSE: DAN, Nasdaq: DEST, NYSE: DBD, Nasdaq: DCOM, NYSE: DPS, NYSE: DTE, NYSE: DUF, Nasdaq: EBAY, NYSE: ENR, NYSE: EFX, NYSE: ETH, NYSE: RE, Nasdaq: DAVE, Nasdaq: FISV, Nasdaq: FLEX, NYSE: FLS, NYSE: GD, Nasdaq: GERN, NYSE: HGR, NYSE: HES, NYSE: HMC, Nasdaq: ISIL, NYSE: IVZ, Nasdaq: IPCM, NYSE: JAH, Nasdaq: KALU, Nasdaq: KONA, NYSE: LAZ, NYSE: LNC, NYSE: LAD, NYSE: LIZ, Nasdaq: LOGI, NYSE: LZ, NYSE: LL, NYSE: MSO, NYSE: MHH, Nasdaq: MBFI, NYSE: MWV, NYSE: MCO, Nasdaq: MORN, NYSE: NOV, NYSE: NSC, NYSE: NOC, Nasdaq: NTRI, NYSE: OII, NYSE: OIS, NYSE: OC, NYSE: OI, NYSE: PH, Nasdaq: PFCB, NYSE: PX, NYSE: RA, NYSE: RGS, Nasdaq: SVVS, NYSE: SCG, NYSE: SEE, NYSE: SCI, NYSE: SKX, Nasdaq: SBUX, Nasdaq: SRCL, Nasdaq: SUPG, NYSE: SPN, Nasdaq: SUSQ, NYSE: TDY, NYSE: JNY, NYSE: TMO, NYSE: TRN, NYSE: TUP, NYSE: VAR, NYSE: WLP, NYSE: WHR, NYSE: WYN, Nasdaq: XLNX.


EPS Movers – BA BRCM ROK


By The Greek


Boeing


Boeing (NYSE: BA) climbed about 1% after the aerospace giant beat analyst expectations and affirmed both revenue and EPS guidance. Boeing earned $0.78 a share, beating analysts' expectations handily, as FactSet had the consensus at $0.70. All was not perfect though, as BA's revenue, at $14.9 billion, was short of analysts' expectations for $15.3 billion. The company's revenue shortfall derived from its commercial aircraft production, which missed expectations. Boeing's 777 deliveries were down from the prior year, but the company plans to up production to 7 per month, from 5 now, to make up for the difference. The company's military aircraft deliveries satisfied analysts. The company built up investor confidence by reaffirming its full year guidance, which calls for revenues of $68 to $71 billion and EPS of $3.80 to $4.00 per share. Boeing said it still expected to deliver its new 787 during the third quarter and its freighter version of its 747-8 in the middle of the year. Playing catch up ain't easy, and we've been hearing about the new jumbo jet for a long while now... In other words, my hopes are not high here.


Broadcom


Broadcom (Nasdaq: BRCM) dropped 12% after the company provided soft second quarter guidance tied to the mobility unit, an area of importance and the reason why several analysts favor the shares. Broadcom posted quarterly revenue of $1.82 billion, against the analysts' consensus forecast for $1.81 billion, according to Thomson Reuters data. The company posted adjusted quarterly income of $0.68 a share, versus the analysts' consensus for $0.59. At least two analysts came out to defend the shares, already rated buy by both firms (Lazard and Needham). The company said its revised guidance for the current quarter is for $1.75 billion to $1.85 billion in net revenue, and that matched poorly against the analysts' consensus, which sat at $1.9 billion. Some of the defensive chatter pointed to overall weakness in mobile phones; in other words, not Broadcom's fault, nor a market share issue. Still, when investors are banking on a certain level of sales and EPS, and the result is short, then the stock price will compensate as well. Of the three companies listed, though, this is the only one I'm somewhat positive about on weakness.


Rockwell Automation


Rockwell Automation (NYSE: ROK) lost 8.5% Wednesday after it cited Japan related supply chain issues, warning its full FY 11 could be affected. The maker of factory efficiency systems beat fiscal second quarter expectations, earning $1.14 a share, against an analysts' consensus estimate marked at $1.12 (Thomson Reuters). The company topped sales estimates too, making $1.46 billion, against estimates for $1.41 billion. The company has benefited this year by renewed corporate investment in manufacturing efficiency, and the company's shares had risen nearly 40% this year, and so there was little margin for error heading into the report. Investors had gotten used to the company raising guidance each quarter. What's ironic is that the company still raised the bottom end of its guidance range, but kept the ceiling the same (range: $4.40 to $4.60). That change left the analysts' consensus of $4.54 for the full year sitting naked above the middle of the company's guidance, and investors lost some enthusiasm. The company says some of its Japanese suppliers of lesser importance operate in nuclear troubled areas, and that while its inventory is okay for the current quarter, the end of this year and 2012 could be affected by any shortfall of supply. We call this the first shoe to drop, and the first is usually followed by a second...


The rest of the day's earnings reports highlighted Advance America (NYSE: AEA), Affymetrix (Nasdaq: AFFX), Aflac (NYSE: AFL), Akamai Technologies (Nasdaq: AKAM), Allegheny Technologies (NYSE: ATI), Allstate (NYSE: ALL), American Railcar (Nasdaq: ARII), ARRIS Group (Nasdaq: ARRS), Arrow Electronics (NYSE: ARW), Asbury Automotive (NYSE: ABG), Assurant (NYSE: AIZ), Avalonbay (NYSE: AVB), Avery Dennison (NYSE: AVY), Baidu (Nasdaq: BIDU), Baker Hughes (NYSE: BHI), Barrick Gold (NYSE: ABX), BP (NYSE: BP), Brinker International (NYSE: EAT), Cabot Oil and Gas (NYSE: COG), Cell Therapeutics (Nasdaq: CTIC), Charm Communications (Nasdaq: CHRM), Cincinnati Financial (Nasdaq: CINF), CIT Group (NYSE: CIT), Citrix Systems (Nasdaq: CTXS), ConocoPhillips (NYSE: COP), Corning (NYSE: GLW), Costar (Nasdaq: CSGP), Credit Suisse (NYSE: CS), Crown Castle (NYSE: CCI), Dana Holding (NYSE: DAN), Destination Maternity (Nasdaq: DEST), Diebold (NYSE: DBD), Dime Community Bancshares (Nasdaq: DCOM), Dr. Pepper Snapple (NYSE: DPS), DTE Energy (NYSE: DTE), Duff & Phelps (NYSE: DUF), eBay (Nasdaq: EBAY), Energizer (NYSE: ENR), Equifax (NYSE: EFX), Ethan Allen (NYSE: ETH), Everest Re (NYSE: RE), Famous Dave’s (Nasdaq: DAVE), Fiserv (Nasdaq: FISV), Flextronics (Nasdaq: FLEX), Flowserve (NYSE: FLS), General Dynamics (NYSE: GD), Geron (Nasdaq: GERN), Hanger Orthopedic (NYSE: HGR), Hess (NYSE: HES), Honda Motor (NYSE: HMC), Intersil (Nasdaq: ISIL), Invesco (NYSE: IVZ), IPC The Hospitalist (Nasdaq: IPCM), Jarden (NYSE: JAH), Kaiser Aluminum (Nasdaq: KALU), Kona Grill (Nasdaq: KONA), Lazard (NYSE: LAZ), Lincoln National (NYSE: LNC), Lithia Motors (NYSE: LAD), Liz Claiborne (NYSE: LIZ), Logitech (Nasdaq: LOGI), Lubrizol (NYSE: LZ), Lumber Liquidators (NYSE: LL), Martha Stewart (NYSE: MSO), Mastech (NYSE: MHH), MB Financial (Nasdaq: MBFI), Meadwestvaco (NYSE: MWV), Moody’s (NYSE: MCO), Morningstar (Nasdaq: MORN), National Oilwell Varco (NYSE: NOV), Norfolk Southern (NYSE: NSC), Northrop Grumman (NYSE: NOC), Nutrisystem (Nasdaq: NTRI), Oceaneering International (NYSE: OII), Oil States (NYSE: OIS), Owens Corning (NYSE: OC), Owens Illinois (NYSE: OI), Parker Hannifin (NYSE: PH), P.F. Chang’s China Bistro (Nasdaq: PFCB), Praxair (NYSE: PX), RailAmerica (NYSE: RA), Regis (NYSE: RGS), Savvis (Nasdaq: SVVS), SCANA (NYSE: SCG), Sealed Air (NYSE: SEE), Service Corp. (NYSE: SCI), Skechers (NYSE: SKX), Starbucks (Nasdaq: SBUX), Stericycle (Nasdaq: SRCL), Supergen (Nasdaq: SUPG), Superior Energy (NYSE: SPN), Susquehanna Bancshares (Nasdaq: SUSQ), Teledyne (NYSE: TDY), The Jones Group (NYSE: JNY), Thermo Fisher Scientific (NYSE: TMO), Trinity Industries (NYSE: TRN), Tupperware (NYSE: TUP), Varian Medical (NYSE: VAR), Wellpoint (NYSE: WLP), Whirlpool (NYSE: WHR), Wyndham Worldwide (NYSE: WYN), Xilinx (Nasdaq: XLNX) and more.


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Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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FOMC Monetary Policy Statement April 2011

FOMC monetary policy statement April 2011What follows is the verbatim monetary policy statement from the Federal Reserve's April Federal Open Market Committee (FOMC) meeting, released on April 27, 2011. We have not edited nor altered the information in any manner, and provide it here for your information.


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FOMC Monetary Policy Statement April 2011


Release Date: April 27, 2011

For immediate release

Information received since the Federal Open Market Committee met in March indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March. Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.


Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.


To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter. The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.


The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.


The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.


Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.


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Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Mortgage Activity Corrupted by Unholy FHA Premium Increase

mortgage activity FHA premium increaseMortgage activity declined through the week ended April 22. While the pre-Easter period is a spur for consumer spending, it's a drag on real estate and mortgage activity. However, an unholy hike in FHA premiums played an even more pivotal role in the drop-off.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative tickers: NYSE: BAC, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: PNC, NYSE: JPM, NYSE: BBT, NYSE: CIT, NYSE: BKU, Nasdaq: UBSI, NYSE: BK, Nasdaq: MBFI, NYSE: AF, NYSE: NYB, Nasdaq: HCBK, Nasdaq: PBCT, Nasdaq: FNFG, Nasdaq: CFFN, Nasdaq: WFSL, Nasdaq: ISBC, Nasdaq: NWBI, Nasdaq: STSA, NYSE: OCN, NYSE: FBC, NYSE: PFS, Nasdaq: COLB, Nasdaq: KRNY, Nasdaq: BRKL, Nasdaq: DCOM, Nasdaq: FFIC, Nasdaq: DNBK, OTC: FCNCA.PK, NYSE: SNV, Nasdaq: UBSI, Nasdaq: HMPR, Nasdaq: WSBC, Nasdaq: CHCO, Nasdaq: SASR, OTC: FCBN.OB, Nasdaq: SCBT, NYSE: WL, Nasdaq: WSFS, Nasdaq: SBSI, Nasdaq: STEL, Nasdaq: UBSH, Nasdaq: EGBN, Nasdaq: FBNC, Nasdaq: ABCB, Nasdaq: TBBK, Nasdaq: FCBC, Nasdaq: CCBG, Nasdaq: FISI, Nasdaq: NKSH, Nasdaq: CZNC, Nasdaq: CHFN, Nasdaq: SBCF, Nasdaq: TIBB, Nasdaq: AMNB, Nasdaq: UCBI, Nasdaq: MBRG, Nasdaq: HBOS, Nasdaq: ZION, Nasdaq: EWBC, NYSE: CYN, NYSE: BOH, Nasdaq: SIVB, Nasdaq: WABC, Nasdaq: CATY, Nasdaq: UMPQ, Nasdaq: GBCI, Nasdaq: PCBC, Nasdaq: PACW, NYSE: WAL, OTC: FBAK.OB, Nasdaq: FIBK, Nasdaq: NARA, Nasdaq: WCBO, Nasdaq: TCBK, Nasdaq: TBNK, Nasdaq: WCBO, Nasdaq: BMRC, Nasdaq: HAFC


Mortgage Activity Corrupted by Unholy FHA Premium Increase


banking analystThe Mortgage Bankers Association reported on mortgage activity for the week ending April 22, 2011. The period that encompasses Passover for Jews and Holy Week for Christians may be a spur for consumer spending, but it delays home shopping. Thus, mortgage activity carried an unnatural weight against it in this latest reporting period, especially since Good Friday was a holiday for many.


The MBA reported that its Market Composite Index of mortgage activity decreased by 5.6% on a seasonally adjusted basis. We would normally look toward Holy Week as the reason behind the decrease, but that's where analysis reveals there was an even more important factor at play last week.


Purchase Activity, or the index measuring mortgages taken out on home purchases, fell by 13.6% on a seasonally adjusted basis. Behind this, government sponsored purchase applications dropped 26.6%, as an increase in FHA premiums came into effect. Over recent weeks, informed home buyers moved to purchase before the premium hike, driving government purchase applications up 20% through the four weeks leading up to the change. Thus, some of the natural flow of activity was pulled forward and drawn out of this last week's activity and likely from several weeks to come.


The Refinance Index was far less active through the period, slipping 0.6% from the previous week. Contracted rates on 30-year and 15-year fixed rate mortgages were relatively unchanged through the period, decreasing to 4.8% (from 4.83%) and 4.03% (from 4.07%), respectively. The big drop-off in purchase activity helped to lift back up the refinance share of overall activity, to 61.6%, from 58.5%.


In conclusion, this latest bit of mortgage activity data is a weak resource for the forecasting of the real estate market. It was far too corrupted by nonrecurring factors, and the change in FHA premiums may affect several more weeks of activity.


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Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), BB&T (NYSE: BBT), CIT (NYSE: CIT), Bank United (NYSE: BKU), First Citizens (OTC: FCNCA.PK), Synovus (NYSE: SNV), United Bankshares (Nasdaq: UBSI), Hampton Roads Bankshares (Nasdaq: HMPR), WesBanco (Nasdaq: WSBC), City Holding (Nasdaq: CHCO), Sandy Spring (Nasdaq: SASR), First Citizens (OTC: FCBN.OB), SCBT Financial (Nasdaq: SCBT), Wilmington Trust (NYSE: WL), WSFS Financial (Nasdaq: WSFS), Southside Bancshares (Nasdaq: SBSI), Stellar One (Nasdaq: STEL), Union First Market (Nasdaq: UBSH), Eagle Bancorp (Nasdaq: EGBN), First Bancorp (Nasdaq: FBNC), Ameris (Nasdaq: ABCB), The Bancorp (Nasdaq: TBBK), First Community (Nasdaq: FCBC), Capital City (Nasdaq: CCBG), Financial Institutions (Nasdaq: FISI), National Bankshares (Nasdaq: NKSH), Citizens & Northern (Nasdaq: CZNC), Charter Financial (Nasdaq: CHFN), Seacoast Banking (Nasdaq: SBCF), TIB Financial (Nasdaq: TIBB), American National (Nasdaq: AMNB), United Community (Nasdaq: UCBI), Middleburg Financial (Nasdaq: MBRG), Heritage Financial (Nasdaq: HBOS), Zions Bancorp (Nasdaq: ZION), East West Bancorp (Nasdaq: EWBC), City National (NYSE: CYN), Bank of Hawaii (NYSE: BOH), SVB Financial (Nasdaq: SIVB), Westamerica (Nasdaq: WABC), Cathay General (Nasdaq: CATY), Umpqua (Nasdaq: UMPQ), Glacier Bancorp (Nasdaq: GBCI), Pacific Capital (Nasdaq: PCBC), PacWest (Nasdaq: PACW), Western Alliance (NYSE: WAL), First National Alaska (OTC: FBAK.OB), First Interstate Bancsystem (Nasdaq: FIBK), Nara (Nasdaq: NARA), West Coast (Nasdaq: WCBO), TriCo (Nasdaq: TCBK), Territorial (Nasdaq: TBNK), Washington Banking (Nasdaq: WCBO), Bank of Marin (Nasdaq: BMRC), Hanmi (Nasdaq: HAFC), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), United Bankshares (Nasdaq: UBSI), Bank of New York Mellon (NYSE: BK), MB Financial (Nasdaq: MBFI), Astoria Financial (NYSE: AF), New York Community (NYSE: NYB), Hudson City (Nasdaq: HCBK), People's United (Nasdaq: PBCT), First Niagra (Nasdaq: FNFG), Capitol Federal (Nasdaq: CFFN), Washington Federal (Nasdaq: WFSL), Investor’s Bancorp (Nasdaq: ISBC), Northwest Bankshares (Nasdaq: NWBI), Sterling Financial (Nasdaq: STSA), Ocwen (NYSE: OCN), Flagstar (NYSE: FBC), Provident (NYSE: PFS), Colombia Banking (Nasdaq: COLB), Kearny (Nasdaq: KRNY), Brookline (Nasdaq: BRKL), Dime Community (Nasdaq: DCOM), Flushing Financial (Nasdaq: FFIC), Danvers (Nasdaq: DNBK).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Home Prices Threaten to Pierce into Double Dip Territory

home prices threaten double-dipThat housing double-dip we warned of long ago, that is now so clearly visible, is near being officially declared. Case Shiller reported that its indices covering the nation's most major Metropolitan Statistical Areas (MSAs) were at the dark threshold that marks double-dip territory (base on price). That said, the price chart offers some hope, tempered though by active disruptive threats to underlying demand.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative tickers: NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ


Home Prices Threaten to Pierce into Double Dip Territory


New York City Real EstateCase Shiller, in conjunction with Standard & Poor's, reported that its price composite indices covering the nation's largest cities had each fallen 1.1% in February. The 10-City and 20-City Composites were 2.6% and 3.3% below prior year levels, respectively. Most intriguing was the fact that the 10-City Composite was just 1.5% higher than the trough set in April of 2009, and the 20-City Index was about there already. From peak to trough, with the peak set in June/July 2006, prices are down about 32.5%. Another month of decline and both indices could very likely mark a new trough, officially registering double-dip in price terms.


Prices are now about where they were in the summer of 2003, and the damage is widespread. Nineteen of the 20 MSAs Shiller measures saw price decrease during February. And if you are thinking it was a weather driven change, you would be wrong, since 14 MSAs recorded negative returns for six consecutive months or more. The trouble continues from light economic activity, high unemployment and the heaven burden of the flood of distressed properties weighing on real inventory.


That said, the chart seems to show sign of turn in price, and certainly spring demand is at play. Just a day before the pricing data release, New Home Sales were reported for March (more recent), and it showed an increase in the annual pace of sales to 300K. That was above economists' views, as was the Existing Home Sales pace reported last week.


Both data points still offered less than enthusing absolute levels of sales. Also, gasoline price increase, along with food and other goods, is undermining consumer demand even while prices for homes are falling and spring is dawning. The delicate balance could be thrown off by so many factors, not least of which is fuel pricing. So while it would appear that home prices are nearing a more natural bottom, these other disruptive factors remain capable of producing paradigm shift yet again. Under such circumstances, it's simply more difficult than usual to accurately forecast real estate recovery.


Yet, keep in mind that homebuilders shares should precede the broader recovery, and benefit from any turn in real estate sales. This is a point I've made regularly. However, a big problem arises from increasing market awareness of a sluggish recovery weighed by new constraints including rising food, fuel, commodity and other prices. Uncertainty is prominently positioned in the forecast for the years ahead. That could halt a homebuilder spurt in its tracks, or at least delay it until a more driving recovery emerges.


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Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Thursday, April 21, 2011

Jobless Claims Indicate Labor Stall

jobless claims indicate labor stallLast week, we tracked Weekly Initial Jobless Claims as they climbed above the important psychological threshold of 400K. While this week's report from the DOL showed claims eased from that level, it unfortunately illustrated a still troubling bump in claims trend. Last week, we theorized that the government shutdown threat may have played a role in pulling claims forward, and this week's data seems inconclusive in proving or disproving our theory.


Relative Tickers: NYSE: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.OB, OTC: PSRU.OB, OTC: CRRS.OB, NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, NYSE: DE, NYSE: TIF, NYSE: CO, NYSE: FRO


Jobless Claims Indicate Labor Stall


hot Greek menWeekly Initial Jobless Claims were reported for the week ending April 16 this morning. Claims eased from the prior week's revised mark of 416K, down to 403K. Unfortunately, that still pulled the four-week moving average of jobless claims higher by 2,250, to 399K.


This troubling trend, and the fact that claims have again found steady ground above the psychological threshold of 400K, could increasingly bother the stock market should it continue. The flow of jobless claims paralleled the action of the market in 2010. Of course, other economic improvements also coincided with and followed stock gains through the span, and we cannot say with certainty that deterioration in claims activity would harm stocks now. But it certainly makes logical sense that stocks would be depressed by deterioration in an already weak labor market.


Through the lagged April 9 period, insured unemployment stayed at 2.9%, where it was found the week before as well. Insured unemployment numbered 3,695,000, down 7,000 from the week before. However, the total number of unemployed Americans claiming benefits under all programs, including from unemployment insurance extensions, numbered 8.3 million.


In our last report covering weekly claims, we theorized that the prior week's bump up above 400K might have been tied to a rush of filers and the swift work of DOL employees to file paperwork ahead of the potential government shutdown. This week's data is somewhat inconclusive as to whether there was such an impact, as we would have looked for claims to have returned toward the 380K to 390K range as a result. Just 10K from that range, it's difficult to pass judgment either way.


It is not without possibility that the government shutdown factor combined with natural labor market softening, arising from global uncertainty, budget concern and rising resource pricing, to negatively impact weekly jobless claims. Gasoline prices especially have impacted consumer sentiment, and so hiring personnel at both large and small businesses would be expected to be tentative in progressing with growth now. We'll have to keep an eye on this report in the weeks ahead to discern if the trend is changing, and if labor gains are stalling.


The highest insured unemployment rates in the week ending April 2 were in Alaska (6.0 percent), Puerto Rico (5.0), Idaho (4.4), Oregon (4.4), Pennsylvania (4.3), Wisconsin (4.3), New Jersey (4.2), Rhode Island (4.2), California (4.1), Connecticut (4.1), and Montana (4.1).


The largest increases in initial claims for the week ending April 9 were in California (+25,646), North Carolina (+6,041), Kentucky (+5,202), Texas (+5,108), and Florida (+4,299), while the largest decreases were in Minnesota (-403), Iowa (-389), Maine (-55), and Wyoming (-9).


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Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Wednesday, April 20, 2011

March Housing Starts May Indicate the Long Awaited Turn

Real Estate

March Housing StartsIt appears the news we've long awaited may have arrived Tuesday - the start to some spring housing activity, if not recovery. Just a day after the NAHB's Housing Market Index indicated that builder sentiment was extremely negative in April, March Housing Starts and permitting activity told another story.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative tickers: NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ


March Housing Starts May Indicate the Long Awaited Turn


real estate analystWe intimated in our recent article Home Builder Sentiment Sinks in April that the home builder association's regular release is likely biased by the influence of the inclusion of many smaller, capital constrained builders, and also by political purpose. We found some vindication of this theory in Tuesday's release by the U.S. Census Bureau.


Housing Starts ran at an annual pace of 549K, 7.2% higher than February's revised pace of 512K (from 479K). March's Starts also caught economists by surprise, exceeding the consensus estimate of 525K compiled by Bloomberg. While the pace was certainly short of awesome, sitting 13.4% below the prior year period pace, it offered a glimpse of hope, if not a sign of something more. Single family starts improved by 7.7%, while multi-family property starts of five or more units increased by 14.7%. This is an understandable difference, given the increased tension against home ownership today.


There was even better news to be found in permitting activity, which is the forerunner of Starts. The pace of building permit authorizations jumped by 11.2% in March, to 594K. Bloomberg does not compile consensus estimates for permitting, but it would appear this result would also have beaten expectations. Still, this year's March compared poorly to the prior year level of activity, down 13.3% against last year. Permits for single family properties rose by 5.7%, while those for the construction of five units or more increased by 28%.


As we've indicated in the past, securities markets prefer change in direction and pace over absolute levels of activity, and so change in housing activity should be enough to drive real estate and construction related shares higher should a trend materialize.


The regional details of the report offered prospective information as well. The faster developing markets of the West and South saw solidly improving permitting activity, with the South rising 6.3% and West gaining 37.1% over February, after seasonal adjustment. The Midwest rose 6.9%, and the Northeast saw no change. As far as Starts went in March, the Midwest led all comers, with activity rising 32.3%. The Western portion of the nation marked strong starts up 27.6%. Starts were up 5.4% in the Northeast, but down 3.3% in the South. We again remind that permitting activity justly gets more attention from securities markets due to its prospective value.


In conclusion, I believe that builder confidence is not matching with real activity within the broader real estate market. There are signs of life. While demand for new construction is still burdened by the overhang of lender owned distressed property and foreclosures generally, as a seasoned equity analyst, I reiterate my recurring theme to you that the market will notice recovery early and begin rewarding homebuilder and housing related shares despite a new construction lag. That said, the broader economy remains vulnerable to the slightest of shocks, and is not without burdens, given the pressures of the budget deficit and also rising prices. So there is no clear buy signal free of risk, but a faint buy signal for risk takers.


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Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Monday, April 18, 2011

Home Builder Sentiment Sinks in April

home builder sentiment sinks in April 2011 The NAHB Housing Market Index Fell but it Should Not be Construed as the Overriding Barometer for Real Estate


The National Association of Home Builders (NAHB) today released its latest tally of home builder sentiment, and the news reported was not good, especially for the heart of the important spring selling season. However, it does not necessarily reflect poorly for real estate generally, nor does it condemn housing stocks even.


Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative tickers: NYSE: BAC, OTC: FMCC.OB, OTC: FNMA.OB, NYSE: GS, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: SRS, NYSE: URE, NYSE: IGR, NYSE: XIN, Nasdaq: RYHRX, Nasdaq: TRREX, NYSE: TOL, NYSE: HOV, NYSE: DHI, NYSE: BZH, NYSE: LEN, NYSE: KBH, NYSE: PHM, NYSE: NVR, NYSE: GFA, NYSE: MDC, NYSE: RYL, NYSE: MTH, NYSE: BHS, NYSE: SPF, NYSE: MHO, AMEX: OHB, NYSE: VNQ, NYSE: PNC, NYSE: JPM, Nasdaq: HOFT, NYSE: ETH, NYSE: PIR, NYSE: WSM, NYSE: HD, NYSE: LOW, AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Nasdaq: AVTR, NYSE: AIV, NYSE: EQR, NYSE: AVB, NYSE: UDR, NYSE: ESS, NYSE: CPT, NYSE: SNH, NYSE: BRE, NYSE: HME, NYSE: MAA, NYSE: ELS, NYSE: ACC, NYSE: CLP, Nasdaq: AGNC, NYSE: SUI, NYSE: AEC, NYSE: PMT and AMEX: TWO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ


Home Builder Sentiment Sinks in April


real estate marketThe home builders' association reported the NAHB/Wells Fargo Housing Market Index fell one point, to 16 in April. That reflects poorly for the voiced views of most home builders. However, using this index as a broad measure of the state of the real estate market would be a mistake. First of all, there is regional variation currently evidenced within this report, which should be expected at inflection point. Imagine taking a snow globe and rushing it downward to a sudden stop. You would find the "snow" inside unsettled, with some rising and some falling, rather than all rushing downward at once. The "globe" is in a situation of flux, from which broad direction is unclear. That's the state of the real estate market now. This report also does reflect the optimism that exists in some regions of the market.


The Southern Region of the nation basically drove the overall decline in sentiment, with the South falling four points to a regional index mark of 15. However, the congested Northeast saw improvement, gaining two points, to a mark of 20. The Midwest also rose, gaining two points to a slim mark of 14. The important Western region stuck at 17 in April. That said, the South represents the largest and most important new home market in the US currently, so weakness in the South still means a lot to the overall home building industry. Also, the absolute numbers reported here are all clearly weak. While that's important to home builders, change in direction and pace matter more to securities markets than absolute numbers in the determination of investment.


We remind readers that the NAHB includes the views of many small builders who face disadvantage now, given their more constrained capital situation. While large publicly traded builders are typically well capitalized, the smaller players, who are still aplenty, cannot get loans as easily today as they could five years ago. This index includes the small builder's views and is biased by them.


The NAHB lists the usual complaints from a builders' group that stands to benefit from government aid if its collective voice is loud enough. Some of these complaints are certainly true, and all of them carry weight though. These complaints include the effect of foreclosures on the appraisals of homebuyers making a trade up. Those homes for sale are burdened by the effect of foreclosure sales on a comparative pricing model. But the NAHB Chief Economist says "more foreclosures seem to be hitting the market," and that's just inaccurate. Just last week, RealtyTrac reported a 15% decline in first quarter foreclosure activity. It would be hard to fathom April being worse than the preceding months.


The NAHB reported that the index measuring current sales activity slipped one point, to 16. Even so, the measure of foot traffic of prospective buyers gained a point, to 13. However, the metric for the forward six month outlook fell sharply, shedding three points to a reading of 23. We expect this is directly related to rising uncertainty and creeping prices generally.


We believe that the most significant threat to this year's broadly anticipated housing recovery would be that caused by uncertainty with regard to the geopolitical situation and its impact on energy prices, namely gasoline. Gasoline is at a point now that it is affecting every consumption decision, especially those involving big ticket items like homes. Thus, while this data is not supportive of housing recovery on the surface, I'm not sure it should be expected to be an early indicator either.

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Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX, Avatar Holdings (Nasdaq: AVTR), Apartment Investment & Management (NYSE: AIV), Equity Residential (NYSE: EQR), Avalonbay Communities (NYSE: AVB), UDR Inc. (NYSE: UDR), Essex Property Trust (NYSE: ESS), Camden Property Trust (NYSE: CPT), Senior Housing Properties (NYSE: SNH), BRE Properties (NYSE: BRE), Home Properties (NYSE: HME), Mid-America Apartment (NYSE: MAA), Equity Lifestyle Properties (NYSE: ELS), American Campus Communities (NYSE: ACC), Colonial Properties (NYSE: CLP), American Capital Agency (Nasdaq: AGNC), Sun Communities (NYSE: SUI), Associated Estates (NYSE: AEC), PennyMac Mortgage (NYSE: PMT), Two Harbors (AMEX: TWO).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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Sunday, April 17, 2011

Spinach and Rice

New York Stories

Spinach and Rice

Wall Street Greek's Fine Arts Contributor and New York Stories Columnist Nicholas Zaharakos offers us a Lenten treat that's not at all lean on humor, sprinkled with the witty antics of his "good boy" brother John. Apparently Spinach and Rice was spiritually filling to the Zaharakos clan for years after one such meal. (In photo from left to right, Nicholas' Yiayia Eleni, brother John and mother Panagiota)


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Spinach and Rice


New York storiesIn the Greek Orthodox Lenten Season there are dietary restrictions that can vary with respect to their severity. Some people give up eating meat on certain days others sacrifice dairy products as well as their beloved olive oil, up until the day of The Resurrection. Usually, the fast is kept more ardently by the older ones. That was the case in my family. My grandmother who lived with us in Brooklyn, fasted strictly for the entire 40 days of lent. However, I with my four brothers and two sisters, were the recipients of my mother's ingenuity to keep us meatless.


This was the time when food that certainly seemed strange to an eight year-old appeared. I can remember suppers of sandwiches with peanut butter, jelly, sliced bananas, and apples; another combination, was cream cheese and cucumbers on rye bread. I never knew there were that many different kinds of beans in the world until Lent. They were used in the various soups, salads, and side dishes that were constantly on the table.


One dish that stands out in my memory because my older brother John just couldn't stand it was spinach and rice (Spanakorizo in Greek}. Now, John was considered by all to be a good boy. I believed this was so for one reason only, and that was that he was very quiet.


At one particular Lenten Supper, spinach and rice was the main course. My mother, knowing of John's intense dislike for what was being served, offered him an incentive. If he would eat a plate full of spinach and rice, she would give him Greek butter cookies covered with confectionary sugar (Kourabiethes in Greek) as a treat. If he didn't finish the spinach and rice, he would get no cookies. Mom was known to say what she meant.


We lived in a railroad flat of six very small rooms over a Laundromat and the IRT subway line on Nostrand Avenue. This should say a lot about the financial and social condition of our family of seven children, two parents, and my mother's mother (Yiayia Eleni). An elderly Italian couple, the Santella's occupied the one apartment above us.


Mr. Santella as far as I could tell, didn't have a first name. He was Mr. Santella to one and all. Another thing was I doubted if I would live to see the day that he would be without an unlit stub of a cigar clenched in his yellow teeth. In summer he wore sleeveless T-shirts which exposed faded tattoos on both his arms. Night and day he would shuffle around in slippers. In the cold months, Mr. Santella would keep the coal burner going.


The delivery of coal was a wondrous event for me. A dark truck would park near the cellar opening. A huge dusty man wearing a leathery apron would open a chute on the side of the truck into a big barrel where the shinny coal would spill with loud clunks. Then he would roll the barrel by using hand-over-hand to the cellar. It would be tipped into a metal chute that ran the length of the stairs into another barrel at the bottom. Mr. Santella would be behind that barrel to steady it. The sound of that coal streaming down was the same as bacon sizzling in a pan.


Summer or winter, Mr. Santella was always in and out of that cellar. My father said that he hid his money there. My mother would chuckle and say, "No, that's where he banks the coal at night." All I know for sure was that it was Mr. Santella who had the only key to those heavy metal doors. Now, back to that fateful day when mom gave John the spinach and rice to eat.


Greek cooking recipesOur dining room, which was used as my sister's bedroom at night, was right off the kitchen. My father and yiayia were never in time for supper. My father would still be working in the restaurant, and my yiayia would be hanging out with her friends who had lost their hot-dog stands when the Brooklyn Dodgers had left the year before. That was okay, because the table wasn't big enough for everyone at once. When mom served supper she was usually scurrying back and forth, and she depended on "the eyes in the back of her head," that she said she had, to know if we were getting out of hand.


I can still see the glow in my mother's eyes because she was so pleased that John's plate was clean. I still remember that she gave John three Kourabiethes when she only gave me two. Just as she finished making sure that everyone was served cookies, there was loud knocking on the door.


The door was in the kitchen, and when my mother opened it, I could see Mr. Santella standing there with his bald head covered with a greenish mash, but with his cigar still in his mouth. My mother's name was Panagiota in Greek, Bertha in English. To Mr. Santella then, it was, "Hey Bertina, looka what happened to me."


My mother had a very infectious nervous laugh, similar to that of Lou Costello of the Abbott and Costello comedy team. Also, once she starts it takes a long time for her to stop. At that point, we all abandoned the dining room and gathered around our mother giggling uncontrollably. The seven of us with the widest eyes possible turned back and forth between mom and Mr. Santella to see what would happen next.


My spunky mother managed to straighten up and waved her arms over her seven "ducklings" by her side and through tears of merriment exclaimed! "Hey Mr. Santella, looka what happened to me."


Mr. Santella, to his everlasting credit, threw up his hands and started to laugh too, and, without losing his cigar, he turned and started up the stairs to his apartment. My mother didn't stop giggling until she went back to the dining room and put the kourabiethes that she had given John back into the metal container. For you see, it was quiet John who was seated next to the open window directly over the cellar below.

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Relevant tickers include Smithfield Foods (NYSE: SFD), Brasil Foods SA (Nasdaq: BRFS), Tyson Foods (NYSE: TSN), Hormel (NYSE: HRL), Seaboard (NYSE: SEB), Pilgrim's Pride (NYSE: PPC), Sanderson Farms (Nasdaq: SAFM), Industrias Bachoco (NYSE: IBA), Balchem (Nasdaq: BCPC), Zhongpin (Nasdaq: HOGS), Bridgford Foods (Nasdaq: BRID), Sara Lee (NYSE: SLE), Pepsico (NYSE: PEP), Unilever NV (NYSE: UN), Unilever plc (NYSE: UL), General Mills (NYSE: GIS), Kellogg (NYSE: K), Campbell Soup (NYSE: CPB), ConAgra Foods (NYSE: CAG), Mead Johnson Nutrition (NYSE: MJN), J.M. Smucker (NYSE: SJM), McCormick (NYSE: MKC), Green Mountain Coffee (Nasdaq: GMCR), Ralcorp (NYSE: RAH), Del Monte (NYSE: DLM), Corn Products (NYSE: CPO), Flowers Foods (NYSE: FLO), Treehouse Foods (NYSE: THS), Gruma S.A.B. (NYSE: GMK), American Italian Pasta (Nasdaq: AIPC), Diamond Foods (Nasdaq: DMND), J&J Snack Foods (Nasdaq: JJSF), Lance (Nasdaq: LNCE), B&G Foods (NYSE: BGS), Seneca Foods (Nasdaq: SENEB), Smart Balance (Nasdaq: SMBL), Farmer Brothers (Nasdaq: FARM), John B. Sanfilippo (Nasdaq: JBSS), China Marine Food (Nasdaq: CMFO), MGP Ingredients (Nasdaq: MGPI), China Nutrition (Nasdaq: CNGL), Overhill Farms (AMEX: OFI), Omega Protein (NYSE: OME), Key Technology (Nasdaq: KTEC), Tasty Baking (Nasdaq: TSTY), Inventure Foods (Nasdaq: SNAK), Golden Enterprises (Nasdaq: GLDC), Kroger (NYSE: KR), Companhia Brasileiria (NYSE: CBD), Safeway (NYSE: SWY), Delhaize (NYSE: DEG), Whole Foods (Nasdaq: WFMI), SuperValu (NYSE: SVU), Casey's General Stores (Nasdaq: CASY), Ruddick (NYSE: RDK), Weis Markets (NYSE: WMK), Winn-Dixie (Nasdaq: WINN), Blue Square Israel (NYSE: BSI), Ingles Markets (Nasdaq: IMKTA), Village Super Market (Nasdaq: VLGEA), Pantry (Nasdaq: PTRY), Arden (Nasdaq: ARDNA), Susser (Nasdaq: SUSS), QKL Stores (Nasdaq: QKLS), Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Costco (Nasdaq: COST), BJ Wholesale (NYSE: BJ), Coca-Cola Hellenic (NYSE: CCH), OTE Telecom (NYSE: OTE), National Bank of Greece (NYSE: NBG), Darden (NYSE: DRI), Brinker (NYSE: EAT), Dryships (Nasdaq: DRYS), Navios Maritime Partners (NYSE: NMM), Navios Holdings (NYSE: NM), Tsakos Energy Navigation (NYSE: TNP), Genco Shipping (NYSE: GNK), Danaos (NYSE: DAC), Paragon Shipping (Nasdaq: PRGN), Top Ships (Nasdaq: TOPS).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.


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Thursday, April 14, 2011

Zipcar (NYSE: ZIP) Zips Out of the IPO Block

Movers & Shakers


Zipcar ZIPThursday's most active stocks were led by Zipcar (NYSE: ZIP), which zipped out of the blocks on its first day of trading. We take a closer look at this little winner.


Our founder earned clients a 23% average annual return over five years as an equity analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.


Relative Tickers: NYSE: ZIP, NYSE: HTZ, Nasdaq: SBAC, NYSE: WSC, NYSE: R, Nasdaq: RCII, NYSE: AER, Nasdaq: UHAL, NYSE: DTG, NYSE: URI, NYSE: CAR, NYSE: GMT, NYSE: TGH, NYSE: RRR, NYSE: TAL, NYSE: AYR, Nasdaq: MGRC, NYSE: CAP, Nasdaq: ELRC, NYSE: FLY, NYSE: BOX, Nasdaq: MRLN, Nasdaq: MIND, Nasdaq: WLFC, AMEX: ACY, Nasdaq: PEDH, NYSE: NEP, Nasdaq: ACOR, Nasdaq: CHINA, AMEX: BAA, Nasdaq: RPRX, Nasdaq: BCAR, Nasdaq: YRCW, Nasdaq: OTIV, NYSE: SVU, NYSE: CEU, NYSE: SCOK, Nasdaq: CIGX, Nasdaq: LLEN, Nasdaq: ONSM, Nasdaq: ESLR, Nasdaq: ADES, Nasdaq: QIHU, Nasdaq: OXBT, Nasdaq: COOL, Nasdaq: CBMX, Nasdaq: MOBI, Nasdaq: YOKU, Nasdaq: FFHL, Nasdaq: SGRP, Nasdaq: ENG, Nasdaq: STRM, Nasdaq: KONE, NYSE: KFS, Nasdaq: CALI, Nasdaq: PSOF, AMEX: CUO, Nasdaq: INUV, Nasdaq: PAAS, Nasdaq: CHMP, Nasdaq: RXII, Nasdaq: BBXT, Nasdaq: FFBH, NYSE: CBR, Nasdaq: PERF, Nasdaq: UFPI, NYSE: SRZ, NYSE: CDE, AMEX: STS, NYSE: LEE, Nasdaq: PFED, Nasdaq: RADA.


Zipcar (NYSE: ZIP) Zips Out of the IPO Block


equity analystZipcar priced its initial public offering (IPO) at $18 a share, which was the maximum it registered to reach. Demand for the shares proved even hotter on the open market, as the somewhat revolutionary rental car company intrigued seekers of disruptive technology.


If you don't understand why, look at the long-term charts of Netflix (Nasdaq: NFLX), Google (Nasdaq: GOOG), Amazon.com (Nasdaq: AMZN) and dare I forget, Apple (Nasdaq: AAPL). You know Wal-Mart (NYSE: WMT) and Home Depot (NYSE: HD) once fit into this group as well. The best fitting one word description for such deliverers of disruption is winner!


Zipcar calls itself a car-sharing company, but it looks to us like a rental car company with a novel idea. Zipcar members can rent a shared vehicle for as short as an hour, making them extremely convenient for city dwellers in need of a puddle jumper™ for a short hop, or move, or a date even. Whether Zipcar's novel approach allows it to steal more market share or not will depend on the strategic reactions of embedded renters, Hertz (NYSE: HTZ), Dollar Thrifty (NYSE: DTG) and Avis Budget (NYSE: CAR). Non-profit car-sharing programs are not going to be able to compete, based on capital constraints.


Zipcar has taken the hassle out of renting a vehicle. There's none of that nonsense about insurance or gasoline (sort of) to worry about. You're not going to run up the cost of rental by running a couple hours late either. Zipcar makes it easier, and Americans like easy. Therefore, it is the real deal as far as disruptive technology goes. And knowing the established firms all too well, it's my best guess they'll be late to change and so some will go by the way of Borders and Blockbuster.


And I disagree with some who say there are no barriers to entry and that there is therefore no first-mover advantage. Zipcar is established in the hearts, minds and parking lots of the college crowd, young Americans, adopters of new technology. Zipcar is in the limited space of metropolitan residential and commercial parking lots, like many of its established rivals, but ahead of any new entrant. It's got important locations locked up near mass transit hubs.


Brand loyalty is not likely strong with rental firms, at least not in my case from my personal dealings. In fact, I would like to stick it to a few by taking advantage of Zipcar, and I bet there are a lot of Americans who feel the same way. Haven't you ever booked a car with one unmentioned poorly run rental firm, and shown up to find a group of people like yourself all waiting for overbooked vehicles (Upper East Siders know exactly which place in the 80s I'm talking about)? It's happened to me more than once! Or, haven't you ever been charged an extra day for ten minutes by any of the established firms?


Trading in ZIP was not allowed to begin until after 11:00 AM, when the shares first traded hands on the open market at a price of $29, 61.1% above the IPO price. Pumped paper profits allured Zipcar shareholders to flip away, and so the shares eased lower from the open, closing at $28, still marking a 56% first day gain. Not a bad birthday zippy!


Zipcar raised over $174 million Thursday, which the company will put promptly to use in expansion efforts. Pre-IPO, ZIP only operated in 14 major metropolitan areas, and more than 230 college campuses across the U.S, U.K. and Canada. Hot market demand helped the stock close at a point that values the company over a billion dollars, based on market capitalization. That's a better opening day value then Amazon.com (Nasdaq: AMZN), which accomplished a market cap of $438 million.


The company is not yet profitable, though it boasts profitability within its early markets, which we assume include Boston, New York and Washington D.C. Therefore, we cannot compare it to industry rivals based on P/E or PEG based comparisons. We estimate it trades somewhere near 5.8X its 2010 sales. Hertz trades at 0.9 times its trailing twelve month sales, and the Rental and Leasing Services Industry trades at approximately 1.41X. The problem with this comparison, though, is that ZIP is an aggressive growth company, while the establishment operate like cash cows (fat slow ones). The established have been growing through merger recently, and we suspect they will be shrinking through market share purging.


Jim Cramer notes his observation of a day-two follow through for hot IPOs. I'm just looking at Zipcar for the first time this evening, and S-1s are long, and time is short ahead of the start of the third period of the Flyers / Sabres series opener. If we were going to spend a few more days on this, we would want to look at the market opportunity, which the S-1 indicates is growing pretty darn rapidly. In fact, the market growth rate is 44% annually, if my back of the envelope estimate is right and the third party forecaster found in the S-1 is right. The problem is that this is the projection for the entire market, and the company itself tempers the third party growth estimate to 26% annually (that's still hot), projecting the $3.3 billion market to mature in 2020 instead of 2016.


It would take a few days of data review, interviews, analysis, forecasts and estimates to develop a DCF model worthy of trust here. So, let's just say that at this level of familiarity with ZIP, I would not be a buyer here without some more due diligence, though I would have wanted in on the IPO (thanks a lot for remembering me Wall Street). You can make up for it with Flyers tickets. Analysts covering ZIP or corporate representatives are welcome to send me a report to look over so I might update my view.

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Article interests investors in Zipcar (NYSE: ZIP), Hertz (NYSE: HTZ), SBA Communications (Nasdaq: SBAC), Wesco (NYSE: WSC), Ryder (NYSE: R), Rent-A-Center (Nasdaq: RCII), Aercap (NYSE: AER), AMERCO (Nasdaq: UHAL), Dollar Thrifty (NYSE: DTG), United Rentals (NYSE: URI), Avis Budget (NYSE: CAR), GATX (NYSE: GMT), Textainer (NYSE: TGH), RSC Holdings (NYSE: RRR), TAL International (NYSE: TAL), Aircastle (NYSE: AYR), McGrath Rentcorp (Nasdaq: MGRC), CAI International (NYSE: CAP), Electro Rent (Nasdaq: ELRC), Fly Leasing (NYSE: FLY), SeaCube Container (NYSE: BOX), Marlin Business Services (Nasdaq: MRLN), Mitcham (Nasdaq: MIND), Willis Lease Finance (Nasdaq: WLFC) and AeroCentury (AMEX: ACY).


The day's other biggest gainers included Peoples Educational (Nasdaq: PEDH), China North East Petroleum (NYSE: NEP), Acorda Therapeutics (Nasdaq: ACOR), CDC Corp. (Nasdaq: CHINA), BANRO (AMEX: BAA), Repros Therapeutics (Nasdaq: RPRX), Bank of Carolinas (Nasdaq: BCAR), YRC Worldwide (Nasdaq: YRCW), On Track Innovations (Nasdaq: OTIV), SuperValu (NYSE: SVU), China Education Alliance (NYSE: CEU), SinoCoking Coal (NYSE: SCOK), Star Scientific (Nasdaq: CIGX), L&L Energy (Nasdaq: LLEN), Onstream Media (Nasdaq: ONSM), Evergreen Solar (Nasdaq: ESLR), ADA-ES (Nasdaq: ADES), Qihoo 360 (Nasdaq: QIHU), Oxygen Biotherapeutics (Nasdaq: OXBT), Majesco (Nasdaq: COOL), CombiMatrix (Nasdaq: CBMX), Sky-Mobi (Nasdaq: MOBI), Youku.com (Nasdaq: YOKU). The biggest losers included Fuwei Films (Nasdaq: FFHL), SPAR Group (Nasdaq: SGRP), ENGlobal (Nasdaq: ENG), Streamline Health (Nasdaq: STRM), Kingtone Wireless Info (Nasdaq: KONE), Kingsway Financial (NYSE: KFS), China Auto Logistics (Nasdaq: CALI), Pansoft (Nasdaq: PSOF), Continental Materials (AMEX: CUO), Inuvo (Nasdaq: INUV), Pan American Silver (Nasdaq: PAAS), Champion Industries (Nasdaq: CHMP), RXi Pharmaceuticals (Nasdaq: RXII), BankAtlantic (Nasdaq: BBXT), First Federal Bancshares of Ark (Nasdaq: FFBH), Ciber (NYSE: CBR), Perfumania (Nasdaq: PERF), Universal Forest (Nasdaq: UFPI), Sunrise Senior Living (NYSE: SRZ), Coeur d'Alene Mines (NYSE: CDE), Supreme Industries (AMEX: STS), Lee Enterprises (NYSE: LEE), Park Bancorp (Nasdaq: PFED) and Rada Electronics (Nasdaq: RADA).


Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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