Ho fucking hum. Retail sales fell again in June as stores keep trying to charge money for products and people keep not having any. Sales dropped .5% in June, though if you exclude automobiles, sales only dropped .1%, and if you go one step further and exclude anything bought in a store other than ramen noodles and despair, sales would have doubled. It wasn't just auto sales that drove the numbers down though as furniture, building-materials, sporting goods, groceries, and especially Mel Gibson's career, saw weakness. This is in contrast to the ICSC's report last week where they broke out their crayolas and limited knowledge of cropping photos or using excel to put out an eyesore-ingly bad table showing that chain store sales were up 3% for the month. To Money McBags, that means people are skimping on more discretionary items and shifting their spend to staples and to stores with lower overheads that can offer deep discounts, of course, all of the data is made up anyway like leprechauns, unicorns, and Larry Craig's wife, so who really fucking knows.
That said, with the consumer remaining hesitant to spend on anything but lottery tickets and something called jeggings (which Money McBags thinks are a mixture of jeans, leggings, and awesomeness), the stimulus having worked most of its way through the system, and extended unemployment benefits on the same life support as George Steinbrenner, there is little about which to be excited (unless you live next door to Sofia Vergara, and if you do, Money McBags would be happy to quickly come over).
In other macro news, mortgage applications sunk to a 13 year low despite record low mortgage rates, declining house prices, and buy one get free specials at foreclosure auctions. Loan requests dropped by 3% with the federal tax break now over and frictional unemployment becoming less voluntary and more permanent thus causing the supply of people moving for work to shrink more than the attendance will for Yale's women's basketball games once Yoyo Greenfield graduates. Finally, the minutes from the last Fed meeting were released today with the Fed lowering their growth forecast for the first time in a year citing lackluster job growth and the creeping in of common sense. The continued struggles of the economy have them contemplating ways to stimulate the market again if data continues to worsen such as buying more assets, keeping rates low until the next bubble, or having Sara Jean Underwood man the Fed's discount window.
Internationally, word is leaking out that 11 banks may fail the european bank stress test including Germany's Commerzbank, Italy's Banco Popolare, and France's Banque de la Pret Merde. But Macquarie Securities director Alessandro Roccati tells us not to despair because "only 11" of the 46 banks will likely fail and 25% of handpicked banks failing a contrived test set up so that none of the banks would fail is only a minor problem, like the hole in the ozone layer, the oil spill in the Gulf, or John Edwards' Q score. In other international news, Singapore raised their growth guidance from 7% to 9% for 2010 to a whopping 15% citing their burgeoning biomedical production capabilities, strong growth in their electronics cluster, and a rise in demand for helicopters. Also helping the Singaporean economy was the opening of two casinos and influx of tourism for "cane your kid at work" day.
In stock news, INTC beat analyst guesses by reporting record revenue and giving guidance way above the street's guess for next Q. Revenue was up 43% and eps of $.51 easily beat analyst guesses of $.43 as the corporate PC upgrade cycle has finally begun since with fewer workers, companies actually need shit to work. INTC's Q has led a rally in large tech stocks such as CSCO, VMW, and MSFT as the upgrade cycle should benefit PC makers.
In small cap news, Money McBags wants to highlight CTGX once again. Now this is one of the stocks he puked out during the "flash crash" becuase it is less liquid than a corn shit and it only takes one fund with a margin call to sink the name, but long term the company should be fine. Money McBags broke the company down for all of you way back in February, but the quick summary is that they have two businesses, one is a boring crappy staffing and solutions business whereby they supply IBM with people to help map out and install servers (which sounds about as fun as dry humping Bea Arthur while being serenaded by the Charlie Daniels Band) and a health care services business which is growing and set to capture share in the electronic medical records market.
The reason Money McBags brings this company up today is that the federal government issued new rules yesterday that will reward doctors and hospitals for the “meaningful use” of electronic health records. The previous rules were a bit too onerous, like Ted Kennedy's designated driver or Susan Boyle's bikini waxer, but the new ones will allow for more hospitals and doctors to get started on EMR. The main point though is that the Department of Health and Human Services said that doctors and hospitals may receive up to $27B in funds to help install electronic medical records over the next 10 years and while Money McBags is not an accountant (though he plays one on April 15th), $27B is a lot of fucking money. Also, starting in 2015, hospitals and doctors will start facing fines and penalties under Medicare if they are not compliant and while doctors hate taking medicare patients because they can't set exorbitant prices for their inelastic demand service (you want your arm reattached? That will be $1MM and a five minute taint tickle, but with your good arm of course), those patients are becoming an increasingly large part of the health care business. Not only will hospitals be getting money to help install EMR and facing penalties if they don't, but as said prevously here, only 20% of doctors and 10% of hospitals already have EMR and there are only ~6 companies who can install them. So this is a big market that is being funded by the government and CTGX is one of only an Antonio Alfonseca handful of companies doing this.
CTGX has said their operating margins are 10%+ on an EMR project and that they last 2-3 years and bring in $2MM to $3MM per project annually so if they can do an incremental 20 projects a year (Money McBags thinks they are starting or working on ~11 right now) and get 10% margin (which may be low), that would translate to an incremental ~$.24 per share. Their guidance is for this year is ~$.50 eps so say their core business just maintains in 2011, that means they could earn ~$.75 on 50% eanrings growth, >20% top line growth, and they are currently trading at ~10x that number. There is a lot of Y2K about this business but installations should ramp up in 2011 and last for a good five to seven years so once this story hits, the stock should have some nice room to grow. Plus, their competence in installing EMR and the dearth of companies who do it combined with the oncoming demand which should be stronger than Andrew Jackson's hatred of Henry Clay or Faye Reagan's breath after a full day on the set of Cock Pigs, should make CTGX an acquisition target for a bigger company like IBM who wants to increase their presence in EMR.
The things to worry about with this company are the liquidity and their core IBM business going to shit since they have less control over that than Whoopi Goldberg does over her bladder or her face. That said, the company has an ok balance sheet and when EMR hits, there is no reason they shouldn't trade at 15x given the likely growth and that would make them an $11-$12 stock (and to be clear, management has not given any guidance on how many EMR projects they can do or what the margins will be other than at least 10%, so Money McBags is making his own estimates which could be too low or too high). You still have time on this name and as long as the core business is going to spit out ~$.50 eps annually, you have a cushion too, so take a look again and buy the dips.
And don't forget WGP is on Facebook and Twitter and if any of you know a good cheap web designer, shoot Money McBags an email at MoneyMcBags@gmail.com because its time to make WGP look better than something the ICSC or Ray Charles would produce (and that's not because Ray Charles was blind, but because he's dead).
Showing posts with label retail sales. Show all posts
Showing posts with label retail sales. Show all posts
Wednesday, July 14, 2010
Thursday, July 8, 2010
7/8/10 Midday Report: More bulls hit
The market jolted up on unemployment news this morning before remembering it had already gone up yesterday and thus quickly settled in like an environmentally friendly squatter in Al Gore's mansion. The big macro news is that new claims for unemployment dropped to 454k or some number higher than that depending on how much the (No) Labor Department manipulates/readjusts numbers next week. Money McBags is not a betting man (unless there is money to be won or young ladies to impress) but he is willing to wager that next week we learn that new claims for this week should have actually been 459k. Anyway, claims were down by 21k, unless you use the number the (No) Labor Department released last week of 472k (not the 475k they redjusted it to this week) and in that case claims were down 18k (though when this week's number gets manipulated up to ~459k, this week's drop will go down in the books as only a 13k drop, but whatever). Regardless of what the number actually was, it likely beat analyst guesses of 460k which would be great if 450k+ new unemployment claims didn't signal an economy less healthy than a Grilled Cheese Burger Melt topped with a spread of Crisco and Pam Anderson's hepatitis.
To be frank (and if Money McBags is going to be frank, he only hopes it is the awesomely named Frank AllCock and not Frank Stallone), the high unemployment rate and the inability of the global economy to bounce out of this is more confusing to Money McBags than a condom is to Shawn Kemp or the definition of securities fraud is to SEC promoted Meaghan Chung. Money McBags understands there are unkowns, half-knowns, and can't-knows in a dynamic global economy, but there are 15k+ PhDs of economics in just the US alone so either all of them are complete idiots or that degree is more worthless than the smallest Vietnamese dong. Seriously, how can we have all of these people who trained for years on this one specific topic not have any fucking answers?
For fucksake, a solar powered plane just flew for 26 consecutive hours and while Money McBags is not a heliologist (though he ardently studies Page 3 of The Sun), he is pretty sure for many of those hours the sun wasn't even fucking out. So let me get this straight. The human race can build something that goes 28k feet in the air and flies around for 26 hours, powered by nothing but the sun and will continue to fly when there is no fucking sun, and yet we can't figure out how to find jobs for 20MM people? WTF? Money McBags is officially announcing the death of the entire field of Economics until one of the 15k+ US PhDs can figure something the fuck out. What other discipline awards titles for studying theories that don't work and coming up with hypotheses that can't be proved? Just think about it. The profession of an economist is a more worthless calling than an Amish computer camp instructor or Heidi Montag's singing instructor. Anyway, the economy continues to struggle and economists continue to watch it melt as they are more helpless than a dyslexic trying to use a calculator set for reverse polish notation (as opposed to reverse polish cowboy).
In other US news, retailers announced same store sales and results were mixed despite discounts, warm weather, and a flurry of unconventional sales efforts including Sam's Cub making small business loans, Office Depot selling items for a penny, and Hot Topic giving away free canwiches with every purchase of a Twilight t-shirt. The Gap led the disappointments with flat sales compared to guesses of up 3.4% as apparently the late 1990s are officially over.
Internationally, the IMF raised their growth forecast from none to none +1, or 4.2% to 4.6% for 2010, whichever you prefer best. They also warned that risks of a calamity have increased faster than the popularity of the high school girl who puts out first and that growth will slow at the end of this year and next year. To quote the release:
“In the near term, the main risk is an escalation of financial stress and contagion, prompted by rising concern over sovereign risk, this could lead to additional increases in funding costs and weaker bank balance sheets, and hence to tighter lending conditions, declining business and consumer confidence, and abrupt changes in exchange rates.”
So no biggie, right? Sign me up for the 4.6% revised upwards growth, nothing to see here. Unfortunately the IMF was not so positive on US growth prospects estimating that growth will fall short of 3% annually for at least the next five years and urged the US to raise taxes, cut spending, and give Alice Eve her own 24 hour cable channel.
Also internationally, the ECB and the Bank of England held rates at historic lows in order to allow already toxic banks to continue to not lend to people and Greece approved a pension overhaul which will raise the retirement age to 65 from birth, will calculate retirement benefits on average pay rather than highest pay, and will cut annual vacation days from 365 to 340.
In US stock news GPS has a bit more than a gap in their strategy (one may call it a hole more gaping than whatever is in the Octomom's pants) as it is plunging like Lara Bingle's neckline. As mentioned earlier, their same store sales disapointed with Old Navy posting flat comps, Banana Republic up 6% after a 20% down in the year ago quarter, and The Gap seeing same store sales drop 3% on top of a 10% down comp. Wow, that is so bad that not even Johnnie Cochran would have defended it. Finally, tax preparer HRB was down ~7% to a 9 year low due to the surprising resignation of their CEO who claims he is about to get a CEO job at a bigger company and HRB should just write-off the losses anyway.
In small cap stocks, news is light today as investors wait for earnings and try not to panic sell everything as they think about the challenges of the economy and the illiquidity of most of these names. LHCG had its second strong day in a row after getting clobbered last week on news that competitors AFAM and AMED were being investigated for false medicare claims. Money McBags broke them down for you last week and thinks it is an ok entry point right now if you need some healthcare exposure. They are in a growing market, offer a superior service, and are relatively cheap for their growth. Sure they don't have control over the majorty of their pricing, sure they are a roll up story, and sure these companies have been dicier than a night in the Baghdad Hilton Suites, but people aren't getting any younger or healthier and hospitals aren't getting any bigger. So if you want a way to play the "we're all getting old and sick and can't pay for it" trend, this is a company to do that with and at a reasonable mulitple.
To be frank (and if Money McBags is going to be frank, he only hopes it is the awesomely named Frank AllCock and not Frank Stallone), the high unemployment rate and the inability of the global economy to bounce out of this is more confusing to Money McBags than a condom is to Shawn Kemp or the definition of securities fraud is to SEC promoted Meaghan Chung. Money McBags understands there are unkowns, half-knowns, and can't-knows in a dynamic global economy, but there are 15k+ PhDs of economics in just the US alone so either all of them are complete idiots or that degree is more worthless than the smallest Vietnamese dong. Seriously, how can we have all of these people who trained for years on this one specific topic not have any fucking answers?
For fucksake, a solar powered plane just flew for 26 consecutive hours and while Money McBags is not a heliologist (though he ardently studies Page 3 of The Sun), he is pretty sure for many of those hours the sun wasn't even fucking out. So let me get this straight. The human race can build something that goes 28k feet in the air and flies around for 26 hours, powered by nothing but the sun and will continue to fly when there is no fucking sun, and yet we can't figure out how to find jobs for 20MM people? WTF? Money McBags is officially announcing the death of the entire field of Economics until one of the 15k+ US PhDs can figure something the fuck out. What other discipline awards titles for studying theories that don't work and coming up with hypotheses that can't be proved? Just think about it. The profession of an economist is a more worthless calling than an Amish computer camp instructor or Heidi Montag's singing instructor. Anyway, the economy continues to struggle and economists continue to watch it melt as they are more helpless than a dyslexic trying to use a calculator set for reverse polish notation (as opposed to reverse polish cowboy).
In other US news, retailers announced same store sales and results were mixed despite discounts, warm weather, and a flurry of unconventional sales efforts including Sam's Cub making small business loans, Office Depot selling items for a penny, and Hot Topic giving away free canwiches with every purchase of a Twilight t-shirt. The Gap led the disappointments with flat sales compared to guesses of up 3.4% as apparently the late 1990s are officially over.
Internationally, the IMF raised their growth forecast from none to none +1, or 4.2% to 4.6% for 2010, whichever you prefer best. They also warned that risks of a calamity have increased faster than the popularity of the high school girl who puts out first and that growth will slow at the end of this year and next year. To quote the release:
“In the near term, the main risk is an escalation of financial stress and contagion, prompted by rising concern over sovereign risk, this could lead to additional increases in funding costs and weaker bank balance sheets, and hence to tighter lending conditions, declining business and consumer confidence, and abrupt changes in exchange rates.”
So no biggie, right? Sign me up for the 4.6% revised upwards growth, nothing to see here. Unfortunately the IMF was not so positive on US growth prospects estimating that growth will fall short of 3% annually for at least the next five years and urged the US to raise taxes, cut spending, and give Alice Eve her own 24 hour cable channel.
Also internationally, the ECB and the Bank of England held rates at historic lows in order to allow already toxic banks to continue to not lend to people and Greece approved a pension overhaul which will raise the retirement age to 65 from birth, will calculate retirement benefits on average pay rather than highest pay, and will cut annual vacation days from 365 to 340.
In US stock news GPS has a bit more than a gap in their strategy (one may call it a hole more gaping than whatever is in the Octomom's pants) as it is plunging like Lara Bingle's neckline. As mentioned earlier, their same store sales disapointed with Old Navy posting flat comps, Banana Republic up 6% after a 20% down in the year ago quarter, and The Gap seeing same store sales drop 3% on top of a 10% down comp. Wow, that is so bad that not even Johnnie Cochran would have defended it. Finally, tax preparer HRB was down ~7% to a 9 year low due to the surprising resignation of their CEO who claims he is about to get a CEO job at a bigger company and HRB should just write-off the losses anyway.
In small cap stocks, news is light today as investors wait for earnings and try not to panic sell everything as they think about the challenges of the economy and the illiquidity of most of these names. LHCG had its second strong day in a row after getting clobbered last week on news that competitors AFAM and AMED were being investigated for false medicare claims. Money McBags broke them down for you last week and thinks it is an ok entry point right now if you need some healthcare exposure. They are in a growing market, offer a superior service, and are relatively cheap for their growth. Sure they don't have control over the majorty of their pricing, sure they are a roll up story, and sure these companies have been dicier than a night in the Baghdad Hilton Suites, but people aren't getting any younger or healthier and hospitals aren't getting any bigger. So if you want a way to play the "we're all getting old and sick and can't pay for it" trend, this is a company to do that with and at a reasonable mulitple.
Wednesday, July 7, 2010
7/7/10 Midafternoon Report: Bulls hit
The market was up today because we are due for a brief rally until we resume our fall in to the abyss like King Midas' son Anchurus (only without saving the Earth) or like Alan Greenspan's reputation. The market has reached the point where some stocks have simply been oversold and with the lack of meaningful macro data and the beginning of earnings season, it should take less to get the market excited in the short term than it takes a teenage boy with a bad case of priapism to get excited. We basically have a tired market that is succumbing to VIX (not unlike a tired Gay succumbs to Dix). Today's rally is being driven by State Street announcing they will beat earnings and by retail sales defying all logic, common sense, and income levels and being estimated to have grown at their fastest pace in 4 years.
The International Council of Shopping Centers (known more familiarly as ICSC or "Who?") preannounced the results of the study they will release tomorrow, in affect scooping themselves in a strategic move to try to keep LeBron James's choice of teams for free agency out of the news and to make the ICSC more of a household acronym than PETA, ROTC, and NAMBLA . The ICSC remarked that retail sales "probably" came in at 3% to 4% growth for the month and will average 4% for the first five months of the year. Of course you all might remember that the ICSC also said Teddy Ruxpin will "probably" make a huge comeback, Walmart shoppers "probably" understand that one size doesn't fit all, and Lindsay Lohan will "probably" show up for her treatment any time now, so buyer beware.
Internationally, Europe has installed a cap on bank bonuses with bankers not allowed to take more than 30% of their bonuses in cash. The remaining 70% will now be awarded in stock, gold, or the still beating hearts of freshly clubbed baby seals. Europe bank stocks are also rallying because the rumor is that the haircuts they will have to take on Spanish bonds will be done by Ken Paves and not some dildo with a flowbee at Supercuts. It was leaked that Spanish bonds will only be written down by 3% and not the presumed 10% to 20% some people estimated while German bonds will get no haircuts and thus will go for the Chrystal Gayle look. In other international news, The Agricultural Bank of China raised $19.2B in their IPO yesterday which gives it a valuation richer than C, GS, or Christina Hendrick's bra.
In US stock news, STT is rallying the entire market as they expect to beat earnings guesses soundly by bringing in $.93 per share vs. guesses of $.72. They also announced a $251 injection of capital to support certain trust funds managed by State Street Global Advisors that engage in securities lending and other types of fraud, I mean portfolio maintenance. In theory, this "mitigates potential liability concerns" unless someone really wanted to sue them because there isn't one financial services company that is not involved in shady activities. In other stock news, Family Dollar dropped ~9% after beating quarterly analyst guesses but giving below consensus guidance. Guidance was for $.46-$.51 per share next Q and guesses were for $.53 while CEO Howard Levine said "The environment remains challenging for consumers, and customers continue to buy close to need, that said, we are being conservative but think ultimately we will do well since we sell cheap shit and people can only afford cheap shit" (though the last part of that quote could have bee made up). The sell off seems overdone to Money McBags but he doesn't follow FDO so he is not sure where comps are trading right now but at the high end their full year guidance is only $.01 below street guesses so either the whisper number on the street was much higher (and thus analysts as usual were scared to stick their necks out) or dropping 9% on guidance a Khagendra Thapa Maga nut hair below guesses is a buying opportunity.
In small cap news everything is up (well everything except for ZAGG). KITD is finally rallying after yesterday when Money McBags said "This is the time to be building a position here even though the market is totally full of shit. You wait for chances like this to buy good companies cheaply." Look, Money McBags knows he talks about this company as if they made blow jobs and caviar, but it is one of his biggest holdings and he thinks it has great long term potential and now it is just trading so fuck cheap that if you're going to buy it, you should have a full position. An interview with their CEO was posted yesterday by an industry follower and it is a great read for those trying to understand exactly what the company does, though it does get a bit technical. For instance you learn of their expansive definition of an enterprise customer, their deeper-in-the stack, multi screen strategy (not to be confused with Lexington Steele's "deeper in the sack, multi-scream" strategy), and that 40%-45% of their business deals with the back end side (which is similar to Alexis Texas as 45% of her work also deals with the back end side).
From a stock perspective, the CEO once again addresses the organic growth rate by saying it has been ~55% of their growth, he mentions that they are able to keep "virtually" all of acquired companies' clients, and he talks about some of the stresses of being a public company especially when your stock is down 40% and investors are breathing down your neck and thus need to be coddled like the lovely Emanuelle Chriqui. He also reaffirms that they will beat $75MM revenue guidance as with their last two acquisition they are near $100MM and says their goal for the next couple of years is to grow their global market share from 15%-20% to 50%. Most interestingly, he talked about their last assrammingly dilutive equity raise where shareholders were treated like Mel Gibson at a gay pride parade by saying:
"The raise was driven by an unsolicited reverse inquiry from a large institutional investor. It was a tough decision to take in the money (given the resultant dilution), but ultimately we felt it was the right thing to do in that it allows management to focus on building our business without the distraction of frequently accessing the capital markets to finance future strategic moves."
This was all very intersting stuff and while there wasn't a ton of new information, it was nice to hear the story again and have guidance confirmed given the assawful stock action of the past month. That said, Money McBags is calling bullshit on the $100MM revenue number. Last month Money McBags made the argument that with the declining Euro and ~70% of their business non-US, the exchange rate should make their topline unattainable. In fact, it could crush next year's revenue as well. The company currently has 23.3MM shares so ~210MM market cap and ~$57MM in cash (Money McBags believes those are the pro-forma numbers after their last equity raise and acquisition, but the cash figure may be closer to ~$30MM), so ~$150MM in enterprise value. With the decline in the Euro, Money McBags estimated that next year's EBITDA could be ~$20MM on the low end but in a best case scenario, he thinks they can earn ~$30MM EBITDA. So even on a worst case scenario they are cheap and in a best case scenario, they are cheaper than a Kevin Federline autographed picture as they are trading at ~5x EBITDA with plenty of cash. If you don't have your position built yet, this is the time to get in. It may drop a bit tomorrow after today's run up, and it may drop a bit more with the market, but this is a solid opportunity to step in to this company as a longterm holding.
And remember WGP is on Facebook now and Twitter as Money McBags embraces social networking as if it were Lauren Conrad.
The International Council of Shopping Centers (known more familiarly as ICSC or "Who?") preannounced the results of the study they will release tomorrow, in affect scooping themselves in a strategic move to try to keep LeBron James's choice of teams for free agency out of the news and to make the ICSC more of a household acronym than PETA, ROTC, and NAMBLA . The ICSC remarked that retail sales "probably" came in at 3% to 4% growth for the month and will average 4% for the first five months of the year. Of course you all might remember that the ICSC also said Teddy Ruxpin will "probably" make a huge comeback, Walmart shoppers "probably" understand that one size doesn't fit all, and Lindsay Lohan will "probably" show up for her treatment any time now, so buyer beware.
Internationally, Europe has installed a cap on bank bonuses with bankers not allowed to take more than 30% of their bonuses in cash. The remaining 70% will now be awarded in stock, gold, or the still beating hearts of freshly clubbed baby seals. Europe bank stocks are also rallying because the rumor is that the haircuts they will have to take on Spanish bonds will be done by Ken Paves and not some dildo with a flowbee at Supercuts. It was leaked that Spanish bonds will only be written down by 3% and not the presumed 10% to 20% some people estimated while German bonds will get no haircuts and thus will go for the Chrystal Gayle look. In other international news, The Agricultural Bank of China raised $19.2B in their IPO yesterday which gives it a valuation richer than C, GS, or Christina Hendrick's bra.
In US stock news, STT is rallying the entire market as they expect to beat earnings guesses soundly by bringing in $.93 per share vs. guesses of $.72. They also announced a $251 injection of capital to support certain trust funds managed by State Street Global Advisors that engage in securities lending and other types of fraud, I mean portfolio maintenance. In theory, this "mitigates potential liability concerns" unless someone really wanted to sue them because there isn't one financial services company that is not involved in shady activities. In other stock news, Family Dollar dropped ~9% after beating quarterly analyst guesses but giving below consensus guidance. Guidance was for $.46-$.51 per share next Q and guesses were for $.53 while CEO Howard Levine said "The environment remains challenging for consumers, and customers continue to buy close to need, that said, we are being conservative but think ultimately we will do well since we sell cheap shit and people can only afford cheap shit" (though the last part of that quote could have bee made up). The sell off seems overdone to Money McBags but he doesn't follow FDO so he is not sure where comps are trading right now but at the high end their full year guidance is only $.01 below street guesses so either the whisper number on the street was much higher (and thus analysts as usual were scared to stick their necks out) or dropping 9% on guidance a Khagendra Thapa Maga nut hair below guesses is a buying opportunity.
In small cap news everything is up (well everything except for ZAGG). KITD is finally rallying after yesterday when Money McBags said "This is the time to be building a position here even though the market is totally full of shit. You wait for chances like this to buy good companies cheaply." Look, Money McBags knows he talks about this company as if they made blow jobs and caviar, but it is one of his biggest holdings and he thinks it has great long term potential and now it is just trading so fuck cheap that if you're going to buy it, you should have a full position. An interview with their CEO was posted yesterday by an industry follower and it is a great read for those trying to understand exactly what the company does, though it does get a bit technical. For instance you learn of their expansive definition of an enterprise customer, their deeper-in-the stack, multi screen strategy (not to be confused with Lexington Steele's "deeper in the sack, multi-scream" strategy), and that 40%-45% of their business deals with the back end side (which is similar to Alexis Texas as 45% of her work also deals with the back end side).
From a stock perspective, the CEO once again addresses the organic growth rate by saying it has been ~55% of their growth, he mentions that they are able to keep "virtually" all of acquired companies' clients, and he talks about some of the stresses of being a public company especially when your stock is down 40% and investors are breathing down your neck and thus need to be coddled like the lovely Emanuelle Chriqui. He also reaffirms that they will beat $75MM revenue guidance as with their last two acquisition they are near $100MM and says their goal for the next couple of years is to grow their global market share from 15%-20% to 50%. Most interestingly, he talked about their last assrammingly dilutive equity raise where shareholders were treated like Mel Gibson at a gay pride parade by saying:
"The raise was driven by an unsolicited reverse inquiry from a large institutional investor. It was a tough decision to take in the money (given the resultant dilution), but ultimately we felt it was the right thing to do in that it allows management to focus on building our business without the distraction of frequently accessing the capital markets to finance future strategic moves."
This was all very intersting stuff and while there wasn't a ton of new information, it was nice to hear the story again and have guidance confirmed given the assawful stock action of the past month. That said, Money McBags is calling bullshit on the $100MM revenue number. Last month Money McBags made the argument that with the declining Euro and ~70% of their business non-US, the exchange rate should make their topline unattainable. In fact, it could crush next year's revenue as well. The company currently has 23.3MM shares so ~210MM market cap and ~$57MM in cash (Money McBags believes those are the pro-forma numbers after their last equity raise and acquisition, but the cash figure may be closer to ~$30MM), so ~$150MM in enterprise value. With the decline in the Euro, Money McBags estimated that next year's EBITDA could be ~$20MM on the low end but in a best case scenario, he thinks they can earn ~$30MM EBITDA. So even on a worst case scenario they are cheap and in a best case scenario, they are cheaper than a Kevin Federline autographed picture as they are trading at ~5x EBITDA with plenty of cash. If you don't have your position built yet, this is the time to get in. It may drop a bit tomorrow after today's run up, and it may drop a bit more with the market, but this is a solid opportunity to step in to this company as a longterm holding.
And remember WGP is on Facebook now and Twitter as Money McBags embraces social networking as if it were Lauren Conrad.
Thursday, June 3, 2010
6/3/10 Midevening Report: BP apologizes for oil spill while investors await market's apology for recent 12% drop
The market held steady today like the Universe according to Fred Hoyle or the unemployment rate over the past several months. Speaking of unemployment, jobs data came out in advance of tomorrow's already leaked positive government non farm payrolls report which will no doubt feature a birth/death model plug so large that it will be able to stop up even Jennifer Lopez's ample backside. Today's release by ADP showed that private firms added 55k jobs in May which was below the 70k guessed by economists. That said, 55k new jobs out of 20MM unemployed workers is so irrelevant it's like the Octomom and her likely cavernous hoohah getting any pleasure out of being boned by the late great He Ping Ping and his little ding ding. It's called a hot dog down a hallway my friends. Also, new claims for unemployment fell by 10k from 460k to 453k as the Labor Department apparently hired Dostoevsky's Underground Man as their accountant and he finally got his wishes of 2 x 2 not equalling 4. Last week Money McBags reported on the 14k drop in new claims to bring the number down to 460k, but the Labor Department went to work (pun intended) and recounted their made up estimates and have revised last week's new claims upwards to get to 463k which means claims dropped by 11k and not 14k last week. So that is how 460k - 10k = 453k. Money McBags eagerly awaits next week's made up number that will also test the limits of believability and mathematics like claiming Josie Maran isn't hot or trying to divide her awesomeness by zero. In other macro news, the ISM’s index of non-manufacturing businesses came in at 55.4 for the third month in a row which was below the median guess of 55.6 but still showed some expansion with the service sector going from flacid to half mast.
Internationally, markets in Europe rose before the open as economic data showed that Europe has yet to adopt the barter system even with the Euro on life support (though hopefully better life support than what Rue McClanahan was on). Markit's UK services purchasing managers index (and Money McBags dares you to say that 3 times quickly) rose to 55.4 in May which is strangely the same ordinal number that the ISM's US service sector index showed, so it's good to see that the US and UK are both goalseeking for the same numbers. Now Money McBags doesn't want to tell the governments how to collude, but perhaps they should use different fucking numbers when making shit up and make us at least attempt to use Benford's law to call BS. While the Markit number showed expansion, digging deeper showed a slow down of new business growth and employment which is as positive of a sign for the UK as the "narrow bridge, use caution"" sign was for Ted Kennedy. Finally, Japan's finance minister Naoto Kan, is said to be in the lead to become the new Prime Minister and who could be a better choice to run the world's second biggest economy than a guy who has twice had to resign positions for failing to make his pension fund payments (no really, he did). With judgment and ethics like that, Kan is said to be in discussions with the US to extradite Bernie Madoff and appoint him to the now vacant finance minister role.
In stock news, Moody's and Fitch cut their ratings on BP because apparently it wasn't obvious to the whole world that BP is fucked. Rumor is tomorrow the ratings agencies will be cutting ratings on Enron, New Century Financial, and Jimmie Walker's career. Also, retailers reported their monthly sales numbers and results were mixed and came in at 2.5% growth, .1% below guesses with weakness seen in the West. Surprisingly, Costco had one of the biggest misses, though they still grew 5%, as people are still buying cheap shit but apparently not as fast as expected, perhaps because they bumped into the top of their credit lines.
In small cap news today, JOEZ shot up 6% today on average volume and no news that Money McBags could find other than that they opened up a new store in Cincinatti last week. Wow. Really? You're selling premium priced fashionable jeans and the place you find to open your 13th store is Cincifuckingnatti? Really? What's wrong, was Des Moines? Too upscale? Opening up a Joe's Jeans in Cincinatti makes as much sense as Simona Halep's decision to become less top heavy (listen Simona, you're ranked 166th in the fucking world by the WTA, so here's a little hint: It's not the fucking boobs that are holding you back, it's that you're just not that good at tennis. So as long as your ground game blows, why not continue to highlight your volleys?). Now look, if Money McBags were in charge of strategy at JOEZ, first of all, he would strategize the operations guy out the fucking door since they have controlled costs as well as Al Gore controlled his son, or his marriage. Secondly, he wouldn't be opening any damn stores in Cincinatti or the entire state of Ohio until he had penetrated the entire East Coast, West Coast, and Amanda Seyfried. Heck, Money McBags would open a store in the deliciously named Butte, Montana before Cincinatti because where better to have a jeans store than Butte? That's some free marketing and strategy right there. Anyway, Money McBags is sticking with his $.13 to $.15 high end range for JOEZ' eps so he doesn't think it is terribly cheap in an environment where uncertainty is dominating which makes small growth stocks that are highly levered to consumer spend and fashion trends riskier than playing grab ass with a person suffering from a bad case of irritable bowel syndrome.
Internationally, markets in Europe rose before the open as economic data showed that Europe has yet to adopt the barter system even with the Euro on life support (though hopefully better life support than what Rue McClanahan was on). Markit's UK services purchasing managers index (and Money McBags dares you to say that 3 times quickly) rose to 55.4 in May which is strangely the same ordinal number that the ISM's US service sector index showed, so it's good to see that the US and UK are both goalseeking for the same numbers. Now Money McBags doesn't want to tell the governments how to collude, but perhaps they should use different fucking numbers when making shit up and make us at least attempt to use Benford's law to call BS. While the Markit number showed expansion, digging deeper showed a slow down of new business growth and employment which is as positive of a sign for the UK as the "narrow bridge, use caution"" sign was for Ted Kennedy. Finally, Japan's finance minister Naoto Kan, is said to be in the lead to become the new Prime Minister and who could be a better choice to run the world's second biggest economy than a guy who has twice had to resign positions for failing to make his pension fund payments (no really, he did). With judgment and ethics like that, Kan is said to be in discussions with the US to extradite Bernie Madoff and appoint him to the now vacant finance minister role.
In stock news, Moody's and Fitch cut their ratings on BP because apparently it wasn't obvious to the whole world that BP is fucked. Rumor is tomorrow the ratings agencies will be cutting ratings on Enron, New Century Financial, and Jimmie Walker's career. Also, retailers reported their monthly sales numbers and results were mixed and came in at 2.5% growth, .1% below guesses with weakness seen in the West. Surprisingly, Costco had one of the biggest misses, though they still grew 5%, as people are still buying cheap shit but apparently not as fast as expected, perhaps because they bumped into the top of their credit lines.
In small cap news today, JOEZ shot up 6% today on average volume and no news that Money McBags could find other than that they opened up a new store in Cincinatti last week. Wow. Really? You're selling premium priced fashionable jeans and the place you find to open your 13th store is Cincifuckingnatti? Really? What's wrong, was Des Moines? Too upscale? Opening up a Joe's Jeans in Cincinatti makes as much sense as Simona Halep's decision to become less top heavy (listen Simona, you're ranked 166th in the fucking world by the WTA, so here's a little hint: It's not the fucking boobs that are holding you back, it's that you're just not that good at tennis. So as long as your ground game blows, why not continue to highlight your volleys?). Now look, if Money McBags were in charge of strategy at JOEZ, first of all, he would strategize the operations guy out the fucking door since they have controlled costs as well as Al Gore controlled his son, or his marriage. Secondly, he wouldn't be opening any damn stores in Cincinatti or the entire state of Ohio until he had penetrated the entire East Coast, West Coast, and Amanda Seyfried. Heck, Money McBags would open a store in the deliciously named Butte, Montana before Cincinatti because where better to have a jeans store than Butte? That's some free marketing and strategy right there. Anyway, Money McBags is sticking with his $.13 to $.15 high end range for JOEZ' eps so he doesn't think it is terribly cheap in an environment where uncertainty is dominating which makes small growth stocks that are highly levered to consumer spend and fashion trends riskier than playing grab ass with a person suffering from a bad case of irritable bowel syndrome.
Friday, May 14, 2010
5/14/10 Midafternoon Report: Market loses again but Nets and Knicks still said to be interested
Oh shit, the market sunk today like Bernie Madoff's grandchildren's hopes and dreams or like a booze cruise captained by Joseph Hazelwood. Just when you thought investors had forgotten about Greece like John Edwards forgot about dignity (though perhaps he never had any) or Britney Spears forgot about underwear, it is back in the news bringing down the Euro. Fears remain that Greece won't be able to service its debt (and it won't, unless perhaps Julia Alexandratou does the servicing), that the Euro may be doomed (is everyone else riding out EUO with Money McBags?), and that Nia Vardalos will finally make a sequel to My Big Fat Greek Wedding. Making matters worse are that Sony warned that they may suffer a “significant impact” if Europe’s deficit spreads, Chinese Premier Wen Jiabao said the foundations for a worldwide recovery aren’t “solid” thanks to the continuing debt crisis and the foundations being made out of tofu (and not extra firm tofu, but the regular mushy shit) and paper (the paper of course being the dying Euro), and Hannah Hilton still remains "retired." Things are looking so bleak today that even the cheering of Alison Preston likely won't cure the markets (though Money McBags would still like to put his rah in her sis-boom-bah). One way to stop the debt contagion from spreading is to go all Weimar Republic and inflate the shit out of the Euro, another is to break up the EU and stop rewarding moral hazard which seems to be at what Gremany is now hinting. Breaking up the EU would not only allow Germany and its strong economy to avoid taxing its workers in order to save its freespending neighbors, but it would also allow Germans to practice their favorite past time of schadenfreude. It is scary out there today so take a deep breath and start booking your vacation to Paris because the Louvre is getting cheaper by the day.
In the US, the banking sector is taken a beating like it's 1986 and it just walked up to Mike Tyson and told him he talks like girl. Politicians finally seem to want to try to regulate the industry that gave poor people loans in order to sell those loans off to greedy rich people not paying attention and thus destroy the global economy. First off, credit card companies are taking it in the first bucket today (that was for all you credit card analysts out there) as the Senate voted on legislation to limit interchange fees. AXP, COF, MA, and V are all down 5% to 10% as a key source of their revenue appears to be drying up like Soul Glo-less jheri curls. Not only are politicians going after card issuers, but they are trying to fix the rating agencies by creating a middleman (or lucky pierre if you will) to determine who will rate bonds. This is a bassackward solution, but still better than having rating agencies bid for business and thus completely take objectivity out of just a little something called objectively rating fucking bonds. First of all, Money McBags doesn't know why any bonds need third party ratings. Investors should just do their fucking work themselves or rely on the sellside or fucking Yelp.com for all Money McBags cares. Most importantly though, the current system is more screwed up than Oedipus' sex life or Tori Spellings' face, so Money McBags applauds the baby fucking steps politicians are taking but it's a bit like showering before you bone a hooker because at the end of the day you're still going to get herpes. Finally, the SEC and NYAG are still going after banks who may have lied to ratings agencies about what they were actually putting in CDOs. Look, Money McBags has said this before, but they were all fucking complicit. Honestly, it would take about 3 minutes going through e-mails to convict every bank and every ratings agency of screwing the consumer like the consumer was walking home and hitched a ride on the the Bang Bus. It was a big shell game only the shell was the global economy and the game was gay chicken and no one flinched so we're all left with flacid cock in our hands. Be very wary of the financials space right now because if the government wants to be serious and prosecute, there will be no winners, like a Wilford Brimley-Kathy Bates sex tape.
As for macro news, US consumer sentiment was up in May and inline with analyst guesses as the average US consumer can't find Canada on a map, much less Greece, so it just proves that ignorance, and Madelyn Marie, are truly bliss. Also retail sales rose by .4% which beat analyst guesses of .2%. However, if autos, gas, and building materials are excluded, retail sales dropped .2%. Up .4%, down .2%, whatever, it's all rounding to Money McBags, but the point is, and Money McBags has to put this extrememly elegantly because he expects his readers all to be very cunning linguists, shit is still fucked up.
In stock news, it was what Money McBags calls an AC Green or a celibate day as shorts were up and longs were down. In addition to credit card issuers having their balances transfered, chipmaker Nvidia put up a big quarter but was down on a forecast more lacking than diction on an NBA studio show. The stock was down 10%+ as they guided to a 3% to 5% revenue decline for the upcoming quarter and analysts were guessing flat to moderately up revenue growth. Videogame makers are also all getting hit as an industry tracker showed the worst year over year sales decline since the Mario Brothers were implicated in the steroid ring and thus became a bit less "super." Software sales were down 23% and analysts were expected sales to rise, especially off of a week April number last year while hardware sales were down and amazing 37% as teenagers spent more time playing Scrabble on Facebook and learning to YoYo from the way ahead of his time K-Strass.
In small cap news, everything tumbled except sleepy Money McBags holding DFZ and IBKR. IBKR is a bit of an interesting play here as the CEO (who also owns 80% of the company) thinks there is $2 of eanrings power in his business but they face lumpy Qs as their market making business is always long volatility to hedge. Well guess what, unless you have been on the planet Melmac for the past week eating pussy, you are probably aware that volatility is spiking up and thus IBKR's long vol play should bring earnings back to their market making business. The company takes little balance sheet risk as they are making markets in listed options and hedging their exposures and they have a nice other business which is an online trading platform that is growing 20%+. This business has been more of a value trap than going to the backroom in a Vegas strip club (and as a word of advice, save the $150 and just get 7 lap dances), but this is the kind of environment where they should excel. So if you are itching for risk, this is one way to play the financials space relatively safely and with the trends going in your favor and it's still pretty cheap trading at only ~8.5x their earnings potential.
So enjoy your weekend and remember to tell a friend or 10,000 about When Genius Prevailed because the Money McBags's revolution is underway. And feel free to follow Money McBags on twitter.
In the US, the banking sector is taken a beating like it's 1986 and it just walked up to Mike Tyson and told him he talks like girl. Politicians finally seem to want to try to regulate the industry that gave poor people loans in order to sell those loans off to greedy rich people not paying attention and thus destroy the global economy. First off, credit card companies are taking it in the first bucket today (that was for all you credit card analysts out there) as the Senate voted on legislation to limit interchange fees. AXP, COF, MA, and V are all down 5% to 10% as a key source of their revenue appears to be drying up like Soul Glo-less jheri curls. Not only are politicians going after card issuers, but they are trying to fix the rating agencies by creating a middleman (or lucky pierre if you will) to determine who will rate bonds. This is a bassackward solution, but still better than having rating agencies bid for business and thus completely take objectivity out of just a little something called objectively rating fucking bonds. First of all, Money McBags doesn't know why any bonds need third party ratings. Investors should just do their fucking work themselves or rely on the sellside or fucking Yelp.com for all Money McBags cares. Most importantly though, the current system is more screwed up than Oedipus' sex life or Tori Spellings' face, so Money McBags applauds the baby fucking steps politicians are taking but it's a bit like showering before you bone a hooker because at the end of the day you're still going to get herpes. Finally, the SEC and NYAG are still going after banks who may have lied to ratings agencies about what they were actually putting in CDOs. Look, Money McBags has said this before, but they were all fucking complicit. Honestly, it would take about 3 minutes going through e-mails to convict every bank and every ratings agency of screwing the consumer like the consumer was walking home and hitched a ride on the the Bang Bus. It was a big shell game only the shell was the global economy and the game was gay chicken and no one flinched so we're all left with flacid cock in our hands. Be very wary of the financials space right now because if the government wants to be serious and prosecute, there will be no winners, like a Wilford Brimley-Kathy Bates sex tape.
As for macro news, US consumer sentiment was up in May and inline with analyst guesses as the average US consumer can't find Canada on a map, much less Greece, so it just proves that ignorance, and Madelyn Marie, are truly bliss. Also retail sales rose by .4% which beat analyst guesses of .2%. However, if autos, gas, and building materials are excluded, retail sales dropped .2%. Up .4%, down .2%, whatever, it's all rounding to Money McBags, but the point is, and Money McBags has to put this extrememly elegantly because he expects his readers all to be very cunning linguists, shit is still fucked up.
In stock news, it was what Money McBags calls an AC Green or a celibate day as shorts were up and longs were down. In addition to credit card issuers having their balances transfered, chipmaker Nvidia put up a big quarter but was down on a forecast more lacking than diction on an NBA studio show. The stock was down 10%+ as they guided to a 3% to 5% revenue decline for the upcoming quarter and analysts were guessing flat to moderately up revenue growth. Videogame makers are also all getting hit as an industry tracker showed the worst year over year sales decline since the Mario Brothers were implicated in the steroid ring and thus became a bit less "super." Software sales were down 23% and analysts were expected sales to rise, especially off of a week April number last year while hardware sales were down and amazing 37% as teenagers spent more time playing Scrabble on Facebook and learning to YoYo from the way ahead of his time K-Strass.
In small cap news, everything tumbled except sleepy Money McBags holding DFZ and IBKR. IBKR is a bit of an interesting play here as the CEO (who also owns 80% of the company) thinks there is $2 of eanrings power in his business but they face lumpy Qs as their market making business is always long volatility to hedge. Well guess what, unless you have been on the planet Melmac for the past week eating pussy, you are probably aware that volatility is spiking up and thus IBKR's long vol play should bring earnings back to their market making business. The company takes little balance sheet risk as they are making markets in listed options and hedging their exposures and they have a nice other business which is an online trading platform that is growing 20%+. This business has been more of a value trap than going to the backroom in a Vegas strip club (and as a word of advice, save the $150 and just get 7 lap dances), but this is the kind of environment where they should excel. So if you are itching for risk, this is one way to play the financials space relatively safely and with the trends going in your favor and it's still pretty cheap trading at only ~8.5x their earnings potential.
So enjoy your weekend and remember to tell a friend or 10,000 about When Genius Prevailed because the Money McBags's revolution is underway. And feel free to follow Money McBags on twitter.
Wednesday, April 14, 2010
4/14/10 Midafternoon Report: Market movin' on up, only a matter of time before it buys a dee-luxe apartment in the sky
Oh shit, it is on today like fucking Donkey Kong only this time Mario is not only going to save the Princess but he's going to get rich while doing so. The market is rallying like it's 1999 with positive earnings, positive macro data, and not a fucking peep out of those Greek assholes who keep trying to fuck things up by going bankrupt (You hear that Greece? Stay the fuck away from the market, put your hands on the car, and assume the position). On the day before tax day, the market is making investors forget about the dough they are handing over to Uncle Sam and instead focusing them on the dough they will have to hand over to Uncle Sam next year with all of their oh so sweet gains. Ahh, to be young and invested. The rally today was sparked by earnings from JPM and INTC who treated earnings like it was a cup and they were the two girls (and if you don't get that reference and have a very strong stomach and lenient internet rules, Money McBags begrudgingly recommends you google "two girls one cup," but don't say he didn't warn you). Along with positive earnings, macro data was so good Ben Bernanke was seen taking it out to lunch, playing a little footsie with it under the table, and then inviting it back to his hotel for a little regression analysis to make sure it was heteroskedastic.
US retail sales were up 1.6% in March over the previous month and up 7.4% from March of 2009 which beat economists' guesses. The beat was driven by car sales which were up 6.8% thanks to incentives such as tax breaks, low financing, and taint massages by Kelly Brook. Even with unemployment stuck at 9.7% like Keely Shaye Smith in a mudslide, consumers are spending because that is what they do. When the AIDS scare hit the porn scene in the 1980s, did that stop great films from being made? Maybe for a bit but now 20+ years later we're back to bareback ATM films with no worries by the performers about diseases. This is just like consumers coming back after the recession and levering up again because daddy needs his 60 inch tv. People have short memories (and Money McBags' short memories are mostly of He Ping Ping) and are generally optimistic so good news spurs them to repeat behaviors that may not be optimal for them in the long run. In other macro news, the CPI was up only.1% and was flat excluding food and energy (or you know, the things you actually need). The lack of an increase in CPI bodes well for the Federal Reserves' plan to keep interest rates low for an "extended period" as inflation looks like it will be pushed out for another few quarters until investors can actually finish counting all of the cash the US government printed (you all remember Money McBags' "Too big to count" hypothesis). The one small turd in the punchbowl today was that mortgage applications fell for the second straight week as people seem content to live in their current abodes and the game of flipping houses has finally passed like a painful kidney stone, Mickey Roarke's comeback, or one piece bathing suits.
On top of the good macro news, Bernanke was getting his Fed on today in front of Congress by saying that he doesn't plan to change any policy decisions but the recovery may be moderate due to high and prolonged unemployment, low construction demand, the poor fiscal condition of state and local governments, and Rasheed Wallace. Bernanke was quoted as saying about borrowing that "The decline in large part reflects sluggish loan demand and the fact that many potential borrowers no longer qualify for credit, both results of a weak economy." Luckily, banks have shorter memories than investors and it is only a matter of months before FICO 560 people are once again getting $500k loans to buy houses in states they don't work at variable interest rates. But hey, until then, rally on!!!!!!!
In stock news, JP Morgan beat estimates, grew income by 55%, and raised their outlook for the year. So fuck you right in the ear recession, you hear that (though maybe you won't hear it with a dick in your ear)? JPM earned $.74 per share which was $.10 above analyst guesses and revenue was $28.2B, ~$2B above guesses of $26.5B. While JPM's retail bank and customer card businesses are still struggling a bit, the investment bank blew it out thanks to strong fixed income trading. And if a weak retail business and strong fixed income trading don't bode well for the economy, then Money McBags didn't learn anything over these past few years. Oh wait, trading profits and a fuckshit consumer are exactly what got us in to this situation, ugh. But I guess there is something to say about the classics. CEO Jamie Dimon did say that “We continued to see delinquencies stabilize, and in some cases improve, in our credit portfolios,” which is a good sign, but then he added "and if they don't stabilize, we'll just create some complex products to trade with other banks and further boost our illusory profits." While Chase card may have struggled, at least the bad loans have been siphoned off into a holding company to separate the risk and to hopefully make investors forget about what happened and just concentrate on Chase's growth portfolio which won't need to be put in to it's own holding tank, until it does. In other stock news INTC crushed their quarter with eps coming in at $.43 which was well above last year's $.11 eps and revenue was up $3B to $10B. They also announced strong revenue guidance, an improving gross margin, and they will be hiring 1k to 2k people which will be their first new hires in 5 years, so take that unemployment rate. INTC's Q was so good that Money McBags may have to take it in to the bathroom and have a little time for himself with it while thinking about INTC's motherboards which are so sexy they can be considered MBILFs. Finally Apple announced that they are going to delay the iPad launch outside of the US because demand in the US has been stronger than the demand for accutane in Jessica Simpson's house or the female condom in Britney Spears' house.
In small cap news, AAPL's strong demand for the iPad could bode well for CRUS if CRUS actually has a chip in the iPad like they do the iPhone. The stock is reacting well today to the INTC blow out quarter and potentially the iPad news. Money McBags thinks they can earn $.73 next year but assumes only 12% topline growth so if their energy business can continue to come back and if their audio business just slows down a little from their current 80% growth rate, that number should be surpassed easier than a 3rd grader surpasses Kim Kardashian's reading level. The stock is now near $10, and remember Money McBags has been talking about CRUS since 1/12/10 when it was trading just under $8 and he mentioned he bought some on 1/29/10 when it had fallen below $7, so a >40% gain in 2+ months isn't too bad. Money McBags hopes you all joined him on this ride and have been able to take your lady friends (or man friends) out to many lobster tail and bj dinners. That said, they have $2 in cash so they are really trading at ~10x Money McBags admittedly cautious estimate for this year which is pretty fucking cheap for a company that sells a chip to the biggest fucking electronics seller/fad in the Universe. Also, JOEZ is rallying today after the huge sell off from their earnings. Money McBags is still on the sidelines here for reasons he has laid out over the past few days. Basically, if you're in the market today you can't lose, like flipping a two headed coin, having your brother be the Governor of the state you need to win in a contested election, or being Alexis Texas in a great ass contest. One stock that is down which Money McBags is going to start looking in to again is CKSW which produces the best logistics/scheduling software for fleets. The company announced a 15MM share shelf offering today which is really fucking odd since they only have 30MM shares outstanding so this would be hella dilutive if they actually went through with the full offering. Money McBags is going to look more in to this over the next few days as the company apparently has the best software, but a shelf like that is more perplexing than Jennifer Love Hewitt's career or an Amish computer camp.
US retail sales were up 1.6% in March over the previous month and up 7.4% from March of 2009 which beat economists' guesses. The beat was driven by car sales which were up 6.8% thanks to incentives such as tax breaks, low financing, and taint massages by Kelly Brook. Even with unemployment stuck at 9.7% like Keely Shaye Smith in a mudslide, consumers are spending because that is what they do. When the AIDS scare hit the porn scene in the 1980s, did that stop great films from being made? Maybe for a bit but now 20+ years later we're back to bareback ATM films with no worries by the performers about diseases. This is just like consumers coming back after the recession and levering up again because daddy needs his 60 inch tv. People have short memories (and Money McBags' short memories are mostly of He Ping Ping) and are generally optimistic so good news spurs them to repeat behaviors that may not be optimal for them in the long run. In other macro news, the CPI was up only.1% and was flat excluding food and energy (or you know, the things you actually need). The lack of an increase in CPI bodes well for the Federal Reserves' plan to keep interest rates low for an "extended period" as inflation looks like it will be pushed out for another few quarters until investors can actually finish counting all of the cash the US government printed (you all remember Money McBags' "Too big to count" hypothesis). The one small turd in the punchbowl today was that mortgage applications fell for the second straight week as people seem content to live in their current abodes and the game of flipping houses has finally passed like a painful kidney stone, Mickey Roarke's comeback, or one piece bathing suits.
On top of the good macro news, Bernanke was getting his Fed on today in front of Congress by saying that he doesn't plan to change any policy decisions but the recovery may be moderate due to high and prolonged unemployment, low construction demand, the poor fiscal condition of state and local governments, and Rasheed Wallace. Bernanke was quoted as saying about borrowing that "The decline in large part reflects sluggish loan demand and the fact that many potential borrowers no longer qualify for credit, both results of a weak economy." Luckily, banks have shorter memories than investors and it is only a matter of months before FICO 560 people are once again getting $500k loans to buy houses in states they don't work at variable interest rates. But hey, until then, rally on!!!!!!!
In stock news, JP Morgan beat estimates, grew income by 55%, and raised their outlook for the year. So fuck you right in the ear recession, you hear that (though maybe you won't hear it with a dick in your ear)? JPM earned $.74 per share which was $.10 above analyst guesses and revenue was $28.2B, ~$2B above guesses of $26.5B. While JPM's retail bank and customer card businesses are still struggling a bit, the investment bank blew it out thanks to strong fixed income trading. And if a weak retail business and strong fixed income trading don't bode well for the economy, then Money McBags didn't learn anything over these past few years. Oh wait, trading profits and a fuckshit consumer are exactly what got us in to this situation, ugh. But I guess there is something to say about the classics. CEO Jamie Dimon did say that “We continued to see delinquencies stabilize, and in some cases improve, in our credit portfolios,” which is a good sign, but then he added "and if they don't stabilize, we'll just create some complex products to trade with other banks and further boost our illusory profits." While Chase card may have struggled, at least the bad loans have been siphoned off into a holding company to separate the risk and to hopefully make investors forget about what happened and just concentrate on Chase's growth portfolio which won't need to be put in to it's own holding tank, until it does. In other stock news INTC crushed their quarter with eps coming in at $.43 which was well above last year's $.11 eps and revenue was up $3B to $10B. They also announced strong revenue guidance, an improving gross margin, and they will be hiring 1k to 2k people which will be their first new hires in 5 years, so take that unemployment rate. INTC's Q was so good that Money McBags may have to take it in to the bathroom and have a little time for himself with it while thinking about INTC's motherboards which are so sexy they can be considered MBILFs. Finally Apple announced that they are going to delay the iPad launch outside of the US because demand in the US has been stronger than the demand for accutane in Jessica Simpson's house or the female condom in Britney Spears' house.
In small cap news, AAPL's strong demand for the iPad could bode well for CRUS if CRUS actually has a chip in the iPad like they do the iPhone. The stock is reacting well today to the INTC blow out quarter and potentially the iPad news. Money McBags thinks they can earn $.73 next year but assumes only 12% topline growth so if their energy business can continue to come back and if their audio business just slows down a little from their current 80% growth rate, that number should be surpassed easier than a 3rd grader surpasses Kim Kardashian's reading level. The stock is now near $10, and remember Money McBags has been talking about CRUS since 1/12/10 when it was trading just under $8 and he mentioned he bought some on 1/29/10 when it had fallen below $7, so a >40% gain in 2+ months isn't too bad. Money McBags hopes you all joined him on this ride and have been able to take your lady friends (or man friends) out to many lobster tail and bj dinners. That said, they have $2 in cash so they are really trading at ~10x Money McBags admittedly cautious estimate for this year which is pretty fucking cheap for a company that sells a chip to the biggest fucking electronics seller/fad in the Universe. Also, JOEZ is rallying today after the huge sell off from their earnings. Money McBags is still on the sidelines here for reasons he has laid out over the past few days. Basically, if you're in the market today you can't lose, like flipping a two headed coin, having your brother be the Governor of the state you need to win in a contested election, or being Alexis Texas in a great ass contest. One stock that is down which Money McBags is going to start looking in to again is CKSW which produces the best logistics/scheduling software for fleets. The company announced a 15MM share shelf offering today which is really fucking odd since they only have 30MM shares outstanding so this would be hella dilutive if they actually went through with the full offering. Money McBags is going to look more in to this over the next few days as the company apparently has the best software, but a shelf like that is more perplexing than Jennifer Love Hewitt's career or an Amish computer camp.
Friday, April 9, 2010
4/9/10 Midafternoon Report: Greek bail out back on causing market to fly like Icarus (though hopefully not quite as close to the sun)
The markets are higher today as fears of a Greek blow up subside for about the 69th time which is one more time than Ben Bernanke has taken an "accomodative stance" for the market in the past two months (and Money McBags isn't quite sure what that means). In macro news, Retail sales were out yesterday and they posted their strongest monthly gains since the data started being collected in 2000 and since the introduction of the Snuggie. Sales were up 9.1% over March 2009 as people are feeling safe in their jobs and are now willing to once again run up their credit card debt and buy those Joe's jeans that fit so snugly (and Money McBags will get to JOEZ later with their 40% revenue growth that avoided falling to the bottom line like Gabrielle Sidibie avoided salads). Easter falling a week earlier this year helped boost sales a bit so retailers aren't quite ready to pop open the beluga and take the Dom off ice, but the number was much stronger than analyst guesses and bodes well for the recovery. A number of retailers including Target, Macy's, Ross Stores, and Vivid Video (ok, Money McBags is just speculating on the last one based on his consumer spend) said their results beat expectations which is more positive news on the strength of the consumer. In other macro news, US wholesale inventories rose .6% in February which was apparently well above guesses, while wholesale sales were up .8%. What is interesting is that wholesalers still only have 1.16 months of inventory on hand which means there is still a fuckload of restocking potential (or un-destocking potential for those who want to nit pick). Money McBags has doubted the path of the economy for quite some time because the labor market is still weaker than a sand in the face Charles Atlas (shout out to the over 70 crowd. All the ladies in the house yell "Arthritis."), but things look like they are legitimately getting better. Sure there could be more issues in Europe, and sure the S&P isn't hella cheap, and sure with earnings season kicking off next week companies are going to have to put up better results than GE when they used to manage earnings or Tiger Woods in a full of shit contest, but things seem like they have a worst plateaued. Money Mcbags got longer the market today, at least for the short run.
In international news, the Greek bailout plan is on again today which is less surprising than when Ricky Martin came out of the closet, when Colin Powell admitted there were no WMDs in Iraq, or when Jennifer Aniston's latest movie flopped. Greece still needs to raise around 15B euros by the end of next month which means they have to sell a whole lot of gyros and Julia Alexandratou sex tapes, but the rest of Europe will be buyers. The EU, IMF, and NAMBLA will not let Greece default and will issue them bilateral loans (which have all the benefits of lateral loans, only I am told the interest goes both ways). Look, Greece has been around for roughly 5k years since the Cyclades in the Bronze Age and has been through wars, revolutions, and prodigal son Yanni's musical career, and none of that was enough to bring them down so a few poorly written CDOs/subprime mortgages/bad loans are not going to be the demise of this once great country. It's not happening. There is more chance of Michelle Hunziker stopping by the When Genius Prevailed offices and handing out free ice cream sundaes than there is of Greece going bankrupt so buy anytime the market gets freaked out by Greek bond premiums shooting through the roof. In other Greek news, Fitch downgraded Greece's credit rating today just in time for the latest bail out, so again great timing by credit rating agencies who continue to have less credibility than Amy Winehouse's stylist and Greta Van Susteren's plastic surgeon.
In stock news, despite yesterday's strong retail sales report WMT announced a plan to lower prices in furthering their quest for world domination. With slowing same store sales, WMT is hoping lower prices will win back middle class customers, make them more competitive with grocery stores, and allow their shoppers to upgrade their wardrobes. In other stock news, PALM is mimicking their phones and flying through the roof (of course the roof their phones fly through is a sun roof as users forcibly and angrily chuck them out of their cars when the Pre's operating system crashes on them for like the 42nd time) on rumors of being acquired. A large scale PC maker is said to be interested in buying Palm's phone and technology because rather than being in just one ultra-competitive commodity business, they'd apparently like to be in two. A PC maker buying Palm makes a bit of strategic sense if there were no iPhone and blackberry, but given that the market is already saturated and with better products, a deal seems a bit implausible unless it is at bargain prices.
In small cap news, Money McBags bought more KITD today and is probably done buying for now unless it gets stupid cheap again. The stock is simply worth a fuckload more than it is trading for today so Money McBags is a bit less price sensitive than Richard Branson at a McDonalds. As discussed earlier, JOEZ announced their quarter last night and is selling off like their quarter created AIDS (and not regular AIDS, but AIDS of the anus). The stock is down 16% despite 40% top line growth because bottom line growth was non-existent (though showing a picture of Alice Eve would have caused Money McBags' bottom line to grow). JOEZ exhibited less leverage than the immortal He Ping Ping on a see saw with Kirstie Alley (and that's not just because He Ping Ping was only 29 inches tall, but because he's dead). JOEZ margins were essentially unchanged with gross margins coming in a bit worse at 49% from 50% and operating margins improving by less than 100bps. What hurt them most was their tax rate jumping from 15% to 47% as a result of NOLs running out and having to accont for an earnout from their acquisition of the Joe's business. Plus, they said they had an extra $700k in advertising expenses and a $150k expense from moving their headquarters, but even taking out that $850k in "one-time" expenses, that would have barely added back another penny. This business simply needs to figure out how to grow while managing expenses. As a quick exercise, do 25 jumping jacks. As a quicker exercise, assume the company grows sales 40% to $111MM for calendar 2010 (which is very aggressive, but work with me here). Then hit them with 50% gross margins (even though those might actually be getting worse as they are moving downstream in their pricing and products), 39% operating margins (which is what they were this Q absent the $850k "one-time" costs), hold interest and depreciation constant (though depreciation should grow as they open more stores), tax them at 46% (they said over time that should drop to 40%, but the earnout is over 7 years), and keep their diluted share count at 63MM. If you do all that and say Beetlejuice 3 times quickly, you get to earnings for the year of about $.07 per share. You see, that's the problem with running a low margin no leverage business, you're kind of fucked unless you can get scale quickly by ramping up sales faster than Lindsay Lohan snorts a dime bag. So if they can't get any leverage and earn $.07 per share in 2010, they are now trading at 40x that which is way too expensive for anything not involving Hannah Hilton putting her musical skills to use and playing Money McBags' rusty trombone. And remember, the exercise we just walked through assumes 40% topline growth which is huge. Now look, the company is doing a very good job of growing the top line and despite burning through $2MM of cash from operations, still has a decent balance sheet with $10MM cash and no debt, so it is possible they start figuring out how to manage the bottom line, that said, Money McBags is going to continue to take a pass on this until they fire the the Underpants Gnomes and figure out how to turn revenue into profit. Obviously a business growing top line at 40% has some good qualities, so it is worth monitoring, but unless Money McBags' math was wrong in the analysis he laid out above (and while Money McBags has an MBA in Finance and a BA in Economics, he is not a maffamatecian so often has to work it out with a pencil), the numbers don't make sense. If any of you have a better grip on the numbers, let Money McBags know because he wants to like this stock, but with crappy and unimproving margins, it's not clear he can.
And don't forget to enjoy your weekend.
In international news, the Greek bailout plan is on again today which is less surprising than when Ricky Martin came out of the closet, when Colin Powell admitted there were no WMDs in Iraq, or when Jennifer Aniston's latest movie flopped. Greece still needs to raise around 15B euros by the end of next month which means they have to sell a whole lot of gyros and Julia Alexandratou sex tapes, but the rest of Europe will be buyers. The EU, IMF, and NAMBLA will not let Greece default and will issue them bilateral loans (which have all the benefits of lateral loans, only I am told the interest goes both ways). Look, Greece has been around for roughly 5k years since the Cyclades in the Bronze Age and has been through wars, revolutions, and prodigal son Yanni's musical career, and none of that was enough to bring them down so a few poorly written CDOs/subprime mortgages/bad loans are not going to be the demise of this once great country. It's not happening. There is more chance of Michelle Hunziker stopping by the When Genius Prevailed offices and handing out free ice cream sundaes than there is of Greece going bankrupt so buy anytime the market gets freaked out by Greek bond premiums shooting through the roof. In other Greek news, Fitch downgraded Greece's credit rating today just in time for the latest bail out, so again great timing by credit rating agencies who continue to have less credibility than Amy Winehouse's stylist and Greta Van Susteren's plastic surgeon.
In stock news, despite yesterday's strong retail sales report WMT announced a plan to lower prices in furthering their quest for world domination. With slowing same store sales, WMT is hoping lower prices will win back middle class customers, make them more competitive with grocery stores, and allow their shoppers to upgrade their wardrobes. In other stock news, PALM is mimicking their phones and flying through the roof (of course the roof their phones fly through is a sun roof as users forcibly and angrily chuck them out of their cars when the Pre's operating system crashes on them for like the 42nd time) on rumors of being acquired. A large scale PC maker is said to be interested in buying Palm's phone and technology because rather than being in just one ultra-competitive commodity business, they'd apparently like to be in two. A PC maker buying Palm makes a bit of strategic sense if there were no iPhone and blackberry, but given that the market is already saturated and with better products, a deal seems a bit implausible unless it is at bargain prices.
In small cap news, Money McBags bought more KITD today and is probably done buying for now unless it gets stupid cheap again. The stock is simply worth a fuckload more than it is trading for today so Money McBags is a bit less price sensitive than Richard Branson at a McDonalds. As discussed earlier, JOEZ announced their quarter last night and is selling off like their quarter created AIDS (and not regular AIDS, but AIDS of the anus). The stock is down 16% despite 40% top line growth because bottom line growth was non-existent (though showing a picture of Alice Eve would have caused Money McBags' bottom line to grow). JOEZ exhibited less leverage than the immortal He Ping Ping on a see saw with Kirstie Alley (and that's not just because He Ping Ping was only 29 inches tall, but because he's dead). JOEZ margins were essentially unchanged with gross margins coming in a bit worse at 49% from 50% and operating margins improving by less than 100bps. What hurt them most was their tax rate jumping from 15% to 47% as a result of NOLs running out and having to accont for an earnout from their acquisition of the Joe's business. Plus, they said they had an extra $700k in advertising expenses and a $150k expense from moving their headquarters, but even taking out that $850k in "one-time" expenses, that would have barely added back another penny. This business simply needs to figure out how to grow while managing expenses. As a quick exercise, do 25 jumping jacks. As a quicker exercise, assume the company grows sales 40% to $111MM for calendar 2010 (which is very aggressive, but work with me here). Then hit them with 50% gross margins (even though those might actually be getting worse as they are moving downstream in their pricing and products), 39% operating margins (which is what they were this Q absent the $850k "one-time" costs), hold interest and depreciation constant (though depreciation should grow as they open more stores), tax them at 46% (they said over time that should drop to 40%, but the earnout is over 7 years), and keep their diluted share count at 63MM. If you do all that and say Beetlejuice 3 times quickly, you get to earnings for the year of about $.07 per share. You see, that's the problem with running a low margin no leverage business, you're kind of fucked unless you can get scale quickly by ramping up sales faster than Lindsay Lohan snorts a dime bag. So if they can't get any leverage and earn $.07 per share in 2010, they are now trading at 40x that which is way too expensive for anything not involving Hannah Hilton putting her musical skills to use and playing Money McBags' rusty trombone. And remember, the exercise we just walked through assumes 40% topline growth which is huge. Now look, the company is doing a very good job of growing the top line and despite burning through $2MM of cash from operations, still has a decent balance sheet with $10MM cash and no debt, so it is possible they start figuring out how to manage the bottom line, that said, Money McBags is going to continue to take a pass on this until they fire the the Underpants Gnomes and figure out how to turn revenue into profit. Obviously a business growing top line at 40% has some good qualities, so it is worth monitoring, but unless Money McBags' math was wrong in the analysis he laid out above (and while Money McBags has an MBA in Finance and a BA in Economics, he is not a maffamatecian so often has to work it out with a pencil), the numbers don't make sense. If any of you have a better grip on the numbers, let Money McBags know because he wants to like this stock, but with crappy and unimproving margins, it's not clear he can.
And don't forget to enjoy your weekend.
Friday, March 12, 2010
3/12/10 Midday Report: Macro data sending more mixed signals than a drunk married co-worker at a holiday party
The market was down in the morning with conflicting economic data having been released. Retail sales increased in February by .3% which easily beat estimates of a .2% decline (though the difference is so insignificant it could be contributed to a rounding error or some d-bag buying that one extra pair of Joes Jeans). Excluding auto sales, retail sales were up .8% which should give investors confidence that people will still buy shit even though they can't get jobs (and snowstorms in the Northeast didn't stop people from continuing to run down their savings either). Alternatively, making matters worse was the University of Michigan's consumer sentiment index coming in below expectations. The index came in at 72.5 (not 72.4 or 72.6 for those of you scoring at home) and was below last month's 73.6 and expectations of 74. Look, Money McBags continues to be befuddled by what any of those numbers mean. How much worse is 72.5 than 74? Really? If the number had been up just an additional 1.5 points then the market would have been fine. The consumer sentiment number seems more fictitious than Larry Craig's wife and more preposterous than someone with a constipation fetish (and I'm pretty sure that guy is not a mathematician even though he apparently likes to work things out with a pencil). So retail sales were good, but consumers apparently feel bad about spending on shit they can't afford. Welcome to America, no go buy a flat screen (that you can't afford).
In other news, apparently Janet Yellen, the current president of the Federal Reserve Bank of San Francisco (where everyday is funday) is set to take over for Donald Kohn as Ben Bernanke's #2 in charge after a strong showing in the swim suit competition. It was neck and neck between Yellen and Federal Reserve Bank of Boston president Eric Rosengren until Rosengren went for the hail mary by breaking out a thong and prancing down the runway to the Go-Gos "We've Got the Beat." In the end (both literally and figuratively), the thong worked against him. Yellen is said to be in favor of low rates, economic stimulus, and long walks on the beach. In her free time she studies the labor markets, authors economic texts, and makes a mean peach cobbler. She is also married to a Nobel Prize winning economist who won the award for his work on assymetric information, though he clearly understood the work better than the Nobel judges (and for you non-economics geeks out there, trust me, that was hella funny). So welcome to the job Janet, working directly under Benny B should be quite an experience, just ask Mrs. Bernanke (Oh! drumshot please).
In stock news Schwab warned that Q1 will fall short of Q4 as trading volume in February was down 14% and the company now expects to earn around $.10 per share which is below estimates of $.15. Most troubling is that trading volume was down despite February being the first month of lowered prices for small investors. This either says that trading is inelastic (which it is) and thus they should raise their prices (oligarchy be damned) or they should just keep prices where they are and start a monthly contest to stimulate trading. Money McBags would propose a contest where each time a trade is made, that person should get an entry in to an end of month drawing with the prize being a momentum day trading session with CNBC's Amanda Drury where she'll interpret your bollinger bands and show you how your wiener process can cause her some brownian motion (and yes Money McBags used that joke the other day, but it needed to be said twice). Look Money McBags knows Schwab has to lower prices in order to be competitive with other online brokers to bring customers in, not to actually stimulate trading, but still, the whole industry needs to either just make trading free, or stop lowering prices in their poorly played game of chicken. Online brokers are so bad at game theory they must think the Prisoner's Dilemma is whether the prisoner should pick up the soap or not once he has dropped it in the shower. In other news, POT raised their Q1 earnings guidance from $.70-$1.00 per share to $1.30-$1.50, well ahead of analysts $.94 estimates. The increased guidance was caused by a rebound in potash demand and higher-than-expected margins in nitrogen and phosphate, or to put it more simply, more people were buying the shit out of POT's nutrients at much higher prices. Money McBags has owned POT for quite some time as a way to diversify his portfolio (he found that simply reading The Biography of Frederick Douglass to his portfolio was not an effect diversyfing tool, though it did increase his portfolio's empathy) so he'll take the increased guidance.
In small cap news WILC finally placed their 3MM shares to raise $20MM of cash to go with the $26MM of cash they already have while diluting shareholders by 15% (or about what the stock is down today). The offering price was $6.05 so Money McBags is a fucking idiot for not selling yesterday when he told all of you readers he was a "Vern Troyer taint hair" away from selling. This company is Biz-fucking-zarre. We might as well hold on now until the phone call so Zwi can share his wisdom with us as to why a $70MM market cap company needs almost $50MM in cash and perhaps he'll also let us know why he includes discontinued operations in his quarterly earnings summaries. Money McBags is less happy about this share offering price than when he found out that that no talent assclown Mario Lopez was boning this chick (and Money McBags would love to be saved by her bells). IMAX is also trading down today after their big Q yesterday which may have triggered a momentary short squeeze while also likely triggering a few cases of epilepsy in those who actually sat through Avatar in 3D.
Money McBags is short on time today and will likely be short on time next week but will still try to pump out a daily market update. Stock analysis may just be lagging. Either way, join Money McBags on twitter and enjoy the weekend.
In other news, apparently Janet Yellen, the current president of the Federal Reserve Bank of San Francisco (where everyday is funday) is set to take over for Donald Kohn as Ben Bernanke's #2 in charge after a strong showing in the swim suit competition. It was neck and neck between Yellen and Federal Reserve Bank of Boston president Eric Rosengren until Rosengren went for the hail mary by breaking out a thong and prancing down the runway to the Go-Gos "We've Got the Beat." In the end (both literally and figuratively), the thong worked against him. Yellen is said to be in favor of low rates, economic stimulus, and long walks on the beach. In her free time she studies the labor markets, authors economic texts, and makes a mean peach cobbler. She is also married to a Nobel Prize winning economist who won the award for his work on assymetric information, though he clearly understood the work better than the Nobel judges (and for you non-economics geeks out there, trust me, that was hella funny). So welcome to the job Janet, working directly under Benny B should be quite an experience, just ask Mrs. Bernanke (Oh! drumshot please).
In stock news Schwab warned that Q1 will fall short of Q4 as trading volume in February was down 14% and the company now expects to earn around $.10 per share which is below estimates of $.15. Most troubling is that trading volume was down despite February being the first month of lowered prices for small investors. This either says that trading is inelastic (which it is) and thus they should raise their prices (oligarchy be damned) or they should just keep prices where they are and start a monthly contest to stimulate trading. Money McBags would propose a contest where each time a trade is made, that person should get an entry in to an end of month drawing with the prize being a momentum day trading session with CNBC's Amanda Drury where she'll interpret your bollinger bands and show you how your wiener process can cause her some brownian motion (and yes Money McBags used that joke the other day, but it needed to be said twice). Look Money McBags knows Schwab has to lower prices in order to be competitive with other online brokers to bring customers in, not to actually stimulate trading, but still, the whole industry needs to either just make trading free, or stop lowering prices in their poorly played game of chicken. Online brokers are so bad at game theory they must think the Prisoner's Dilemma is whether the prisoner should pick up the soap or not once he has dropped it in the shower. In other news, POT raised their Q1 earnings guidance from $.70-$1.00 per share to $1.30-$1.50, well ahead of analysts $.94 estimates. The increased guidance was caused by a rebound in potash demand and higher-than-expected margins in nitrogen and phosphate, or to put it more simply, more people were buying the shit out of POT's nutrients at much higher prices. Money McBags has owned POT for quite some time as a way to diversify his portfolio (he found that simply reading The Biography of Frederick Douglass to his portfolio was not an effect diversyfing tool, though it did increase his portfolio's empathy) so he'll take the increased guidance.
In small cap news WILC finally placed their 3MM shares to raise $20MM of cash to go with the $26MM of cash they already have while diluting shareholders by 15% (or about what the stock is down today). The offering price was $6.05 so Money McBags is a fucking idiot for not selling yesterday when he told all of you readers he was a "Vern Troyer taint hair" away from selling. This company is Biz-fucking-zarre. We might as well hold on now until the phone call so Zwi can share his wisdom with us as to why a $70MM market cap company needs almost $50MM in cash and perhaps he'll also let us know why he includes discontinued operations in his quarterly earnings summaries. Money McBags is less happy about this share offering price than when he found out that that no talent assclown Mario Lopez was boning this chick (and Money McBags would love to be saved by her bells). IMAX is also trading down today after their big Q yesterday which may have triggered a momentary short squeeze while also likely triggering a few cases of epilepsy in those who actually sat through Avatar in 3D.
Money McBags is short on time today and will likely be short on time next week but will still try to pump out a daily market update. Stock analysis may just be lagging. Either way, join Money McBags on twitter and enjoy the weekend.
Thursday, March 4, 2010
3/4/10 Midafternoon Report: Market to Greece: "Your bonds are the one that I want," just hope they don't leave "Tears on My Pillow"
The market is bouncing around today as initial jobless claims were out and they fell by 29k to 469k, almost exactly the 470k number that economists estimated proving the old adage that "even a broken economist is almost right once a decade." While the drop is positive, it didn't drop by as much as claims rose in the past two weeks which we were told was the result of "weather," an "administrative backlog," and "more people getting laid off than expected, stupid." Also, pending sales of existing homes fell by 7.6% in January as an extension of the government tax credit for first time home buyers failed to spur sales (and Money McBags went through this before, but any first time buyer thinking about purchasing a house rushed to buy before the tax credit ran out last year and thus extending the tax credit now is like if California had reinstated same sex marriage a month after repealing it. Anyone who wanted to get gay married had already done so, thus the remaining opportunity set was thinner than an aneroxic with food allergies.). All of the data will continue to be lumpy as unemployment still remains higher than River Phoenix at the Viper Room and more stagnant than the writing here at When Genius Prevailed (but give Money McBags a break, 1k words of dick jokes and market analysis a day is more draining than being slowly exsanguinated by baby leeches and more draining (and infinitely less fun) than a 12 hour hummer, but Money McBags digresses). In other macro news factory orders were up 1.7% last month and were slightly below estimates but still positive and driven once again by aircraft sales as people have to fly around the globe for job interviews.
In international news, Greece offered up 5 billion of euro denominated bonds or as antiquities dealers will call them in a mere 2 years, worthless relics. Greece claimed there was actually demand for another 2B euros worth of the bonds, and seeing as how they need to raise 20B euros, their decision to not offer the extra 2B fits right in with their previous budget management. If I need $20, why would I sell you $5 worth of my shit when I could sell you $7 worth of it, I mean it doesn't take Euclid to fucking figure out the math here (and yes Money McBags understands the interest payments, etc., but we're talking about a country that needs money like Lindsay Lohan needs a case of Valtrex and a hot shower.)? Meanwhile traders are seeking out the next Greece in Europe claiming that it is only logical another country would be close to collapse as for every Bear Stears there is a Lehman Brothers, for every American Home Mortgage there is a New Century Mortgage, and for every Disney World there is a Kingdom of the Little People. Greek workers remain on strike as they are apparently protesting that the government overpaid them for the past several years. Really a brilliant strategy, right up there with fully clothed strip clubs (and yes I am talking about you Manhattan) and the Segway.
In stock news, retail sales climbed in February from Heidi Montag's singing bad to Heidi Montag's acting bad (and that is a slight uptick if it isn't clear). Same store sales were up 4% beating analyst estimates by 1% or so, but that rise was off of a 4.7% drop last year we so shouldn't lose perspective, like an MC Esher painting. Most interestingly e-commerce sales were up 16% which should bode well for companies like ARTG, AMZN, and Vivid Video. Large cap stocks moving up today include Disney, Coke, and Boeing, all receiving analyst upgrades. Disney was upgraded by Bank of America-Merrill Lynch in anticipation of a strong advertising market, a strong film docket, and unemployment coming down thus making it easier for people to throw away money on a crappy amusement parks just so their kids can get an overpriced picture with a minimum wage worker dressed as Cinderella. A UBS analyst upgraded KO based on the sell-off after they purchased their bottler and after reading When Genius Prevailed on 2/25/10 while UBS also upgraded Boeing because apparently airlines want more planes sooner than later.
In small cap news, RICK continues to drop and is making Money McBags feel emptier than he does after making it rain for an hour at his local Rick's Cabaret. Kind readers, you all know Money McBags has been in RICK with you for this stimulating ride, and you all know of his $16 price target (which it bounced up to before collapsing like Taryn Thomas's anus after one too many cavity searches. And yes, read the wikipedia page, it really did), but we all have to remember that when momentum stocks go bad, they really go bad. Given that, and the fact that Money McBags thought their quarter was worse than a Dan Brown novel and their acquisition of VCGH could be a bit of a clusterfuck (and not in the literal sense, which would be good, but in the "oh shit, we paid what for that?" sense), Money McBags may be bailing on this momentarily and happily taking his profits. He will likely sit it out for a day or two, but if it pops up above $15 again, that will likely be his selling floor. In other small cap news, CRTX annonuced their earnings last night and put together a decent Q while maintaining their guidance. Money McBags broke down CRTX a bit in December as a potential big upside company that needed to show some results. Well this Q could be the start of those results as numbers were generally in-line with Curosurf coming in at $8MM in revenues for the 3 months which is a good sign. While their reporting still seems to be a bit lacking (I mean for fucksake, would it kill you to put a table comparing sales of each product and maybe not lump in Spectracef sales with Factive sales since no one gives a fuck about Spectracef?) and their sales of Factive were probably a bit on the low end since they combined with Spectracef for $3.6MM in revenue and Factive should have been around $3MM by itself, this company continues to trade at around 1x estimated sales. The company maintained their guidance of $115MM but their leading drugs continue to face headwinds so they need to be able to show strong sales of Factive and Curosurf. Money McBags has not had a chance to listen to the call, but the quarter didn't contain any obvious misses and the company is cheap. If you have some gambling money that you're itching to put into play, this is the kind of company it may be worth doing some work on because if they can maintain a $100MM+ revenue run rate, they should easily trade at 2x-3x that. Plus they have a nice cash balance remaining to continue their acquisition strategy. Not the best company in the world, but cheap with upside.
In international news, Greece offered up 5 billion of euro denominated bonds or as antiquities dealers will call them in a mere 2 years, worthless relics. Greece claimed there was actually demand for another 2B euros worth of the bonds, and seeing as how they need to raise 20B euros, their decision to not offer the extra 2B fits right in with their previous budget management. If I need $20, why would I sell you $5 worth of my shit when I could sell you $7 worth of it, I mean it doesn't take Euclid to fucking figure out the math here (and yes Money McBags understands the interest payments, etc., but we're talking about a country that needs money like Lindsay Lohan needs a case of Valtrex and a hot shower.)? Meanwhile traders are seeking out the next Greece in Europe claiming that it is only logical another country would be close to collapse as for every Bear Stears there is a Lehman Brothers, for every American Home Mortgage there is a New Century Mortgage, and for every Disney World there is a Kingdom of the Little People. Greek workers remain on strike as they are apparently protesting that the government overpaid them for the past several years. Really a brilliant strategy, right up there with fully clothed strip clubs (and yes I am talking about you Manhattan) and the Segway.
In stock news, retail sales climbed in February from Heidi Montag's singing bad to Heidi Montag's acting bad (and that is a slight uptick if it isn't clear). Same store sales were up 4% beating analyst estimates by 1% or so, but that rise was off of a 4.7% drop last year we so shouldn't lose perspective, like an MC Esher painting. Most interestingly e-commerce sales were up 16% which should bode well for companies like ARTG, AMZN, and Vivid Video. Large cap stocks moving up today include Disney, Coke, and Boeing, all receiving analyst upgrades. Disney was upgraded by Bank of America-Merrill Lynch in anticipation of a strong advertising market, a strong film docket, and unemployment coming down thus making it easier for people to throw away money on a crappy amusement parks just so their kids can get an overpriced picture with a minimum wage worker dressed as Cinderella. A UBS analyst upgraded KO based on the sell-off after they purchased their bottler and after reading When Genius Prevailed on 2/25/10 while UBS also upgraded Boeing because apparently airlines want more planes sooner than later.
In small cap news, RICK continues to drop and is making Money McBags feel emptier than he does after making it rain for an hour at his local Rick's Cabaret. Kind readers, you all know Money McBags has been in RICK with you for this stimulating ride, and you all know of his $16 price target (which it bounced up to before collapsing like Taryn Thomas's anus after one too many cavity searches. And yes, read the wikipedia page, it really did), but we all have to remember that when momentum stocks go bad, they really go bad. Given that, and the fact that Money McBags thought their quarter was worse than a Dan Brown novel and their acquisition of VCGH could be a bit of a clusterfuck (and not in the literal sense, which would be good, but in the "oh shit, we paid what for that?" sense), Money McBags may be bailing on this momentarily and happily taking his profits. He will likely sit it out for a day or two, but if it pops up above $15 again, that will likely be his selling floor. In other small cap news, CRTX annonuced their earnings last night and put together a decent Q while maintaining their guidance. Money McBags broke down CRTX a bit in December as a potential big upside company that needed to show some results. Well this Q could be the start of those results as numbers were generally in-line with Curosurf coming in at $8MM in revenues for the 3 months which is a good sign. While their reporting still seems to be a bit lacking (I mean for fucksake, would it kill you to put a table comparing sales of each product and maybe not lump in Spectracef sales with Factive sales since no one gives a fuck about Spectracef?) and their sales of Factive were probably a bit on the low end since they combined with Spectracef for $3.6MM in revenue and Factive should have been around $3MM by itself, this company continues to trade at around 1x estimated sales. The company maintained their guidance of $115MM but their leading drugs continue to face headwinds so they need to be able to show strong sales of Factive and Curosurf. Money McBags has not had a chance to listen to the call, but the quarter didn't contain any obvious misses and the company is cheap. If you have some gambling money that you're itching to put into play, this is the kind of company it may be worth doing some work on because if they can maintain a $100MM+ revenue run rate, they should easily trade at 2x-3x that. Plus they have a nice cash balance remaining to continue their acquisition strategy. Not the best company in the world, but cheap with upside.
Thursday, January 14, 2010
1/14/10 Midday Report: Market taunts macroeconomy, tells it to go back to its room until it comes out with a better number
The macro news today mostly missed expectations, but the market seems to be shrugging it off like an alcoholic shrugs off a jagermeister induced hangover (and that is by taking a massive dump and then getting back on the wagon). Retail sales were down .3% for the month of December, while expectations were for a .5% rise. The decline was led by consumer electronics sales which were down 2.8% as people remain happy with their 6 month old iPhones. Economists are now hoping that the introduction of Roxxxy will help stimulate electronics sales in the coming months (bad puns completely intended). Of course the main driver of the decline in consumer spend is that people still don't have jobs. 11k more people filed new claims for unemployment last week over the previous week, raising the number of newly employed to 440k which is almost the population of Wyoming or the number of movies from 1985 starring Ron Jeremy (and Money McBags maintains the tour de force known as Snatchbuckler has been overlooked by critics for way too long). The slight positive is that the four week average is trending down so as long as you chalk up the current weekly claims to volatitily and not a new trend, employment may be headed in the right direction, or at least not down.
One other interesting macro note is that business inventories rose for the second consecutive month, ticking up .4%. This is interesting because inventories could be moving back up just as consumer spend starts trickling back down. Since we know companies are as good at managing inventory and predicting future sales as Louisiana is at building levees or NBC is at running late night talk shows (and for the record, Money McBags was a fan of Conan O'Brien until he neutered himself to take over the Tonight Show), it would not be surprising to see the US reach excess inventory levels once again (cough, WGO, cough) if the job market remains as bleak as Octomom's vagina (seriously, you put 8 kids through one of those and nothing good can happen). The economy seems to have reached an inflection point as the magical supply and demand curves try to stop shifting and meet a happy equilibrium (and hopefully not a prisoner's dilemma non-pareto equilibrium), but there should be a concern that businesses build inventories back up too much and thus the recession falls back in on itself like a dying star and creates another economic black hole, or as it's called in the Spelling household, Tori.
In stock news today, the market eagerly awaits INTC's earnings tonight like Brian Dunkleman awaits another hit show and like Money McBags awaits Hayley Atwell's first nude scene (And Hayley, if you're reading this, and I know you are, could we at lest get a nip slip or a thong wearing upskirt?). Investors hope for a strong Q from INTC in order to keep the market momentum going. Also, CROX is up 12% as they are said to be doubling their sales force and stores in India. Crocs' representatives maintain Indian tastes are rapidly changing and are now only seven fads behind the US. They believe Crocs shoes are the perfect compliment to 30 year old Members Only jackets and will comfortably snuggle the feet of hardworking Indians as they watch reruns of Hawaii Five-O and wonder who shot JR.
One other interesting macro note is that business inventories rose for the second consecutive month, ticking up .4%. This is interesting because inventories could be moving back up just as consumer spend starts trickling back down. Since we know companies are as good at managing inventory and predicting future sales as Louisiana is at building levees or NBC is at running late night talk shows (and for the record, Money McBags was a fan of Conan O'Brien until he neutered himself to take over the Tonight Show), it would not be surprising to see the US reach excess inventory levels once again (cough, WGO, cough) if the job market remains as bleak as Octomom's vagina (seriously, you put 8 kids through one of those and nothing good can happen). The economy seems to have reached an inflection point as the magical supply and demand curves try to stop shifting and meet a happy equilibrium (and hopefully not a prisoner's dilemma non-pareto equilibrium), but there should be a concern that businesses build inventories back up too much and thus the recession falls back in on itself like a dying star and creates another economic black hole, or as it's called in the Spelling household, Tori.
In stock news today, the market eagerly awaits INTC's earnings tonight like Brian Dunkleman awaits another hit show and like Money McBags awaits Hayley Atwell's first nude scene (And Hayley, if you're reading this, and I know you are, could we at lest get a nip slip or a thong wearing upskirt?). Investors hope for a strong Q from INTC in order to keep the market momentum going. Also, CROX is up 12% as they are said to be doubling their sales force and stores in India. Crocs' representatives maintain Indian tastes are rapidly changing and are now only seven fads behind the US. They believe Crocs shoes are the perfect compliment to 30 year old Members Only jackets and will comfortably snuggle the feet of hardworking Indians as they watch reruns of Hawaii Five-O and wonder who shot JR.
Thursday, January 7, 2010
1/7/10 Midday Report: Low end retailers post good sales numbers as formerly rich learn to slum it
Before we get to the better than expected December sales numbers for most retailers, we need to address the macroeconomy (So hello macroeconomy, would you like some viagra for your slow growth?). Today's initial claims for unemployment came out and were slightly better than expectations (and all sources tend to agree about this, unlike yesterday's free for all where there was less agreement by news sources about expectations than there is typically agreement by Bjork's stylists). There were 434k newly filed claims, up only 1k from last week, so that is a slightly positive sign (though not as positive as this sign). However, analysts/economists/reporters/Bea Arthur are overlooking the fact that those who are unemployed are remaining unemployed for longer as claims for extended unemployment benefits climbed by 165k to 5.44MM (and I can understand how Bea Arthur overlooked this fact since she is not an economist, and dead, but the the others overlooking this puzzles me a bit). Anyway, the data has continued to show that those with jobs should become less worried and those without jobs should become more screwed as the chasm between the haves and have nots gets wider than Jessica Simpson's cleavage.
In other macro new today, China is raising a key interest rates as they move closer to admitting that inflation may be a problem (which is a bit like the first mate of the Titanic telling Edward Smith that the upcoming icebergs may case some slight turbulence). The dollar is bouncing up a bit on this news as gold and commodities tick down.
In stock news today, retail sales came out for the most part stronger than expectations and retailers, led by Sears, Macy's, The Limited Brands, and BJ's Wholesale Club, upped their earnings estimates. BJ's said they would have had double the 2.7% growth if not for the snowstorms in the Northeast and the computer viruses people got when inadvertently going to BJ.com (instead of the actual company website BJS.com) and learning it wasn't really the place to buy footlong packs of Tums (though it was the place to see many other things that were a foot long). Sears is having a huge day as KMart showed a 5.3% increase in sales thanks to toys and home goods and they raised Q4 estimaes to $3.36, much higher than analyst estimates of $2.75. Eddie Lampert hopes this can stave off the 2 year Blue Light Special on his SHLD shares.
It wasn't all champagne and hummers for the retail sector though as specialty retailer HOTT showed a 10% drop in same store sales as their market strategy may be reaching it's twilight (for those of you who don't follow HOTT, the last line is punny because they rely on sales of crappy t-shirts from that movie Twilight to drive business. Hit me up in the comments section if anything else needs explaining).
And in small cap news, CRTX came out today with revenue estimates for 2010 of $115MM, almost exactly what Money McBags said a few short days ago. In fact, Money said "this company could easily do $115MM of revenue in 2010 (maybe $130MM at the top end)." This new guidance looks like that $115MM may not be so easy as sales of their legacy generic drugs are likely falling faster than expectations, but the analyst on the street had $148MM in revene for 2010, so just remember who loves you (and I would toot my own here, but that job is being reserved for the lovely Olivia Munn). Either way, Money McBags' intial analysis holds. The stock is ridiculously cheap for a drug company, but you have to be a bit wary that they can grow given the decline of their legacy drugs and the yet to be proven future of the drugs they purchased. The stock could easily double from here since it is trading at less than 1.5x sales, but we're going to sit this one out until we get some more data.
In other macro new today, China is raising a key interest rates as they move closer to admitting that inflation may be a problem (which is a bit like the first mate of the Titanic telling Edward Smith that the upcoming icebergs may case some slight turbulence). The dollar is bouncing up a bit on this news as gold and commodities tick down.
In stock news today, retail sales came out for the most part stronger than expectations and retailers, led by Sears, Macy's, The Limited Brands, and BJ's Wholesale Club, upped their earnings estimates. BJ's said they would have had double the 2.7% growth if not for the snowstorms in the Northeast and the computer viruses people got when inadvertently going to BJ.com (instead of the actual company website BJS.com) and learning it wasn't really the place to buy footlong packs of Tums (though it was the place to see many other things that were a foot long). Sears is having a huge day as KMart showed a 5.3% increase in sales thanks to toys and home goods and they raised Q4 estimaes to $3.36, much higher than analyst estimates of $2.75. Eddie Lampert hopes this can stave off the 2 year Blue Light Special on his SHLD shares.
It wasn't all champagne and hummers for the retail sector though as specialty retailer HOTT showed a 10% drop in same store sales as their market strategy may be reaching it's twilight (for those of you who don't follow HOTT, the last line is punny because they rely on sales of crappy t-shirts from that movie Twilight to drive business. Hit me up in the comments section if anything else needs explaining).
And in small cap news, CRTX came out today with revenue estimates for 2010 of $115MM, almost exactly what Money McBags said a few short days ago. In fact, Money said "this company could easily do $115MM of revenue in 2010 (maybe $130MM at the top end)." This new guidance looks like that $115MM may not be so easy as sales of their legacy generic drugs are likely falling faster than expectations, but the analyst on the street had $148MM in revene for 2010, so just remember who loves you (and I would toot my own here, but that job is being reserved for the lovely Olivia Munn). Either way, Money McBags' intial analysis holds. The stock is ridiculously cheap for a drug company, but you have to be a bit wary that they can grow given the decline of their legacy drugs and the yet to be proven future of the drugs they purchased. The stock could easily double from here since it is trading at less than 1.5x sales, but we're going to sit this one out until we get some more data.
Monday, December 28, 2009
12/28/09 Midday Report: Light volume as the market tries to shed holiday pounds
The only real news today (other than that Nell Mcandrew is still hot) is that the extra day of shopping this year led to an increase in retail sales. Amazingly enough, analysts also found that an extra serving at dinner led to an increase in people gaining weight, an extra shot of Jager led to an increase in people throwing up, and an extra hour in a Bangkok brothel led to an increase in people getting AIDS (and Money McBags loves any city whose name is a verb followed by a noun). Retail sales were up 3.6% as retailers were better able to hold price and manage inventory, plus that whole extra day thing. Without the extra day, analysts estimate retail sales were up 1% to 4%, so throw your favorite dart at whatever number you prefer. Interestingly though and a positive sign, sales of electronics were up 6% as consumers still want their iPhones, netbooks, and Rabbit Habits.
In other market news, the street awaits Wednesday's treasury auction which has caused yields to increase and thus tempered market gains today and Israel raised their interest rates by another 25bps to fight off inflation. Israel also announced that if inflation continues to rise, they will either send the Mossad after it or simply have it's mother nag it to death. The rise in Israeli rates will increase the value of the shekel vs. the dollar which is good for Money McBags' favorite WILC though bad news for Americans planning on going on a kibbutz this summer.
In stock news, a tiny Money McBags watchlist stock, MBND, continues to rise after raising revenue estimates last week. MBND installs Direct TV across the country with a specialty in multi-dwelling units and recently rolled up a number of players to become the largest Direct TV installer. They finally worked out operating kinks last Q and earned $3.3MM of EBITDA and just guided to $260MM-$270MM of annual revenue. So as long as they don't fuck anything up (which they did in the 2Qs prior to this last one, so the leash is shorter than a midget's nut hairs), they should earn at least $14MM of EBITDA and they have only a $20MM market cap and ~$55MM EV. So they are trading at ~4x EV/EBITDA and <.1x revenues and that is if they realize no operating efficiencies. This is either a $6+ stock or a roll-up cluster fuck, but worth keeping an eye on and doing some research as Direct TV continues to grow and MBND could ramp with it now that they have their operational issues "under control" (at least until the next fuck up).
In other market news, the street awaits Wednesday's treasury auction which has caused yields to increase and thus tempered market gains today and Israel raised their interest rates by another 25bps to fight off inflation. Israel also announced that if inflation continues to rise, they will either send the Mossad after it or simply have it's mother nag it to death. The rise in Israeli rates will increase the value of the shekel vs. the dollar which is good for Money McBags' favorite WILC though bad news for Americans planning on going on a kibbutz this summer.
In stock news, a tiny Money McBags watchlist stock, MBND, continues to rise after raising revenue estimates last week. MBND installs Direct TV across the country with a specialty in multi-dwelling units and recently rolled up a number of players to become the largest Direct TV installer. They finally worked out operating kinks last Q and earned $3.3MM of EBITDA and just guided to $260MM-$270MM of annual revenue. So as long as they don't fuck anything up (which they did in the 2Qs prior to this last one, so the leash is shorter than a midget's nut hairs), they should earn at least $14MM of EBITDA and they have only a $20MM market cap and ~$55MM EV. So they are trading at ~4x EV/EBITDA and <.1x revenues and that is if they realize no operating efficiencies. This is either a $6+ stock or a roll-up cluster fuck, but worth keeping an eye on and doing some research as Direct TV continues to grow and MBND could ramp with it now that they have their operational issues "under control" (at least until the next fuck up).
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