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.
Thursday, January 7, 2010
Wednesday, January 6, 2010
1/6/10 Midday Report: A flat market at your service (sector)
The news out today is that the service sector grew, but less than expectations, so now we know how Vern Troyer's parents felt. The ISM index of non-manufacturing jobs rose from 48.7 to 50.1 and anything over 50 signals expansion according to the arbitrary metrics measured by the index and the directionally correct economists who are paid to interpret them. This is the third time in four months the index has been over that oh so helpful 50 number (even if at 50.1 it was only over by a rounding error or a He Ping Ping nut hair, and yes that has been two "little person" jokes in the first paragraph so I am sure "Bridget the Midget" is anxiously waiting by her tiny phone). This is a marginally good sign for the economy, but not significant enough for anyone to break out the Dom Perignon or slush fund to pay for that special Hannah Hilton visit.
Also today, ADP released their forecast of job losses for the month of December which came in at 84k, worse than the expectations of 75k according to Bloomberg, but better than expectations of 90k losses according to CNBC. So for the tie breaker, we go to the always reliable New York Times who reports estimates were for 73k job losses. So there we have it, 2 out 3 news sources reporting the same data have a different spin on it. What say you Wall Street Journal? Oh, you have estimates of 90k, so job losses were better than expecations. So we're back to a tie and everyone knows, the tie goes to the runner. Anway, the point is no matter how you spin this number (though hopefully not on one of those old school sit'n spins, because Money McBags is out of barf bags after watching 10 seconds of Kathy Griffin on CNN New Year's Eve, and please CNN, make the bad lady go away. Wow, that was quick, but as long as you're granting wishes, can you have Franco-Nevada up their proposed buyout offer to ROY and give my phone number to Hayley Atwell?), it is directionally positive yet inconclusive as to where the economy is going. The number did reflect the fewest job losses according to ADP since March of 2008 (and if you can remember back that far, it was when Brett Favre first announced his retirement. I wonder what ever happened to that guy?), so yeah for us.
In stock news, gold and commodities continue to run as the Fed remains adamant that they will keep rates near zero until the next bubble, while news from Hershey's board is squirting out that they may decide to make a bid for Cadbury. And in the small cap universe, EBIX finally split yesterday and has continued to run after a sell off. Now EBIX's actual business is more confusing than giffen goods, a Higg's boson, or Dane Cook's popularity but they essentially try to build/buy networks to be part of every insurance transaction globally. The CEO's ego is bigger than Alexis Texas's voluptuous backside (and that is if she had elephantitus of the anus) and there is always something Enron/Satyam-ish to be concerned about when investing in a complex/hard to define business that shuns the street, relies on acquisitions, and has a cult following centered around their egotistical CEO, but the company has been growing rapidly, is developing networks which are extremely profitable to first movers, has had phenomenal returns, and is almost completely underfollowed by the street. Estimates are for them to earn at least $1.20 next year (though estimates are few and far between) and they are currenty trading at less 20x that (or is it fewer than 20x that? Can someone exhume William Safire and let me know?) since the street does not yet value them as a growing technology company, which they really are. Given that there is upside to that EPS number and their new goal is $200MM in reveune and 42% operating margins by Q4 2011 (which is admittedly a long way out and will require a number of acquisition for which they will probably have to raise more cash), the stock has room to move back up after an unwarranted sell off. Money McBags is an owner of EBIX, but do your own research because why would you trust a random guy on the internet, even if he is the preeminent dick joke teller and money maker in the world (though if you can clearly state what EBIX does in fewer than 5k words, please share with those in the group).
Also today, ADP released their forecast of job losses for the month of December which came in at 84k, worse than the expectations of 75k according to Bloomberg, but better than expectations of 90k losses according to CNBC. So for the tie breaker, we go to the always reliable New York Times who reports estimates were for 73k job losses. So there we have it, 2 out 3 news sources reporting the same data have a different spin on it. What say you Wall Street Journal? Oh, you have estimates of 90k, so job losses were better than expecations. So we're back to a tie and everyone knows, the tie goes to the runner. Anway, the point is no matter how you spin this number (though hopefully not on one of those old school sit'n spins, because Money McBags is out of barf bags after watching 10 seconds of Kathy Griffin on CNN New Year's Eve, and please CNN, make the bad lady go away. Wow, that was quick, but as long as you're granting wishes, can you have Franco-Nevada up their proposed buyout offer to ROY and give my phone number to Hayley Atwell?), it is directionally positive yet inconclusive as to where the economy is going. The number did reflect the fewest job losses according to ADP since March of 2008 (and if you can remember back that far, it was when Brett Favre first announced his retirement. I wonder what ever happened to that guy?), so yeah for us.
In stock news, gold and commodities continue to run as the Fed remains adamant that they will keep rates near zero until the next bubble, while news from Hershey's board is squirting out that they may decide to make a bid for Cadbury. And in the small cap universe, EBIX finally split yesterday and has continued to run after a sell off. Now EBIX's actual business is more confusing than giffen goods, a Higg's boson, or Dane Cook's popularity but they essentially try to build/buy networks to be part of every insurance transaction globally. The CEO's ego is bigger than Alexis Texas's voluptuous backside (and that is if she had elephantitus of the anus) and there is always something Enron/Satyam-ish to be concerned about when investing in a complex/hard to define business that shuns the street, relies on acquisitions, and has a cult following centered around their egotistical CEO, but the company has been growing rapidly, is developing networks which are extremely profitable to first movers, has had phenomenal returns, and is almost completely underfollowed by the street. Estimates are for them to earn at least $1.20 next year (though estimates are few and far between) and they are currenty trading at less 20x that (or is it fewer than 20x that? Can someone exhume William Safire and let me know?) since the street does not yet value them as a growing technology company, which they really are. Given that there is upside to that EPS number and their new goal is $200MM in reveune and 42% operating margins by Q4 2011 (which is admittedly a long way out and will require a number of acquisition for which they will probably have to raise more cash), the stock has room to move back up after an unwarranted sell off. Money McBags is an owner of EBIX, but do your own research because why would you trust a random guy on the internet, even if he is the preeminent dick joke teller and money maker in the world (though if you can clearly state what EBIX does in fewer than 5k words, please share with those in the group).
Tuesday, January 5, 2010
1/5/10 Midday Report: After 330 years, stock market proves Isaac Newton wrong: Gravity, schmavity. What goes down, must keep going up
The market continues it's latest rally despite at best mixed news today. The biggest news is that pending home sales dropped more than Dolly Parton's boobs have in the past 5 years (and for the record, she now calls them "anklets"). The 16% drop was more than the expectation of a 2% drop after a 3.7% gain last month. Of course the gain last month was due to the first time home buyer tax credit which stimulated the existing home sales market like Simona Halep once stimulated the WTA. The number today should not be shocking as when there are incentives for something, and then those incentives go away, that behavior does not always remain when it comes to a non-reflex behavior like Economics. You hear that Pavlov? You can keep ringing that bell, but I know there is no tax-incentive in the dish, so stop fucking with me and get me my $5k deduction while I lick my balls some more. On second thought, I'm just gonna keep doing this, so you can get me the deduction later. Arf. Therefore, it is not surprising that the initial sell-off in the morning based on this news has reversed.
The one real effect of the news though was the dollar falling again as optimism that the Fed will raise rates sooner rather than later is beginning to wane, like Alan Greenspan's misguided influence. This thought was reitirated yesterday at The Boar's Nest by Fed Governor and Bo and Luke's long lost and full chromosome having cousin, the lovely Elizabeth Duke. Ms. Duke was quoted as saying: "In the current environment, the FOMC continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." So perhaps Greenspan's influence isn't waning afterall, ugh. Duke then went on to say, "to quote my good friend Roscoe P. Coltrane, in time, the economy will be "Good, Good, Good.""
In market news, Ford has reached it's highest price since 2005 as traders anticipate Ford's December sales numbers which are being released today. A strong number will be very positive for the economy because if people are buying Ford's shitty cars, they will likely buy anything and thus discretionary spend will be back. Finally, Kraft upped their offer to buy Cadbury to the tune of issuing 370MM new shares in the proposed take over. This has drawn the ire of Warren Buffett who owns a 9.4% stake in Kraft. Buffet argued that issuing shares will dilute the already cheap Kraft stock at a price $6ish below where Kraft bought shares back themselves in 2007, will give Kraft a "blank check" to renegotiate the deal higher whenever they want, and will make him really really angry to the point that he will go to his room and not come out or talk to anyone until the company rejects the plan. The 78 year old Buffett was then heard to complain about those damn kids on his lawn, CBS's decision to take Matlock off the air, and the fact that dames no longer have yams like Eleanor Powell.
The one real effect of the news though was the dollar falling again as optimism that the Fed will raise rates sooner rather than later is beginning to wane, like Alan Greenspan's misguided influence. This thought was reitirated yesterday at The Boar's Nest by Fed Governor and Bo and Luke's long lost and full chromosome having cousin, the lovely Elizabeth Duke. Ms. Duke was quoted as saying: "In the current environment, the FOMC continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." So perhaps Greenspan's influence isn't waning afterall, ugh. Duke then went on to say, "to quote my good friend Roscoe P. Coltrane, in time, the economy will be "Good, Good, Good.""
In market news, Ford has reached it's highest price since 2005 as traders anticipate Ford's December sales numbers which are being released today. A strong number will be very positive for the economy because if people are buying Ford's shitty cars, they will likely buy anything and thus discretionary spend will be back. Finally, Kraft upped their offer to buy Cadbury to the tune of issuing 370MM new shares in the proposed take over. This has drawn the ire of Warren Buffett who owns a 9.4% stake in Kraft. Buffet argued that issuing shares will dilute the already cheap Kraft stock at a price $6ish below where Kraft bought shares back themselves in 2007, will give Kraft a "blank check" to renegotiate the deal higher whenever they want, and will make him really really angry to the point that he will go to his room and not come out or talk to anyone until the company rejects the plan. The 78 year old Buffett was then heard to complain about those damn kids on his lawn, CBS's decision to take Matlock off the air, and the fact that dames no longer have yams like Eleanor Powell.
Monday, January 4, 2010
1/4/10 Midday Report: It's 2010, yet the market is partying like it's 1999
Hide the women and children because the market is coming back with a vengeance, like Dirty Harry Callahan or Don Knotts on Three's Company. The market appears to be determined to show all of the traders who manufactured complex derivitaves such MBS, ABS, and plain BS, that financial engineering can only keep it down for so long as eventually people have to consume. The big news is that manufacturing continues to improve as inventories which were cut to bare bones minimums (and at a minimum, I would bone a bare Eva Wyrwal with my inventory) are now starting to be replenished. China's manufacuring grew the fastest it has grown in 5 years which is great news for the lead paint industry but bad news for infants. In the US, manufacturing grew faster than it has in 3 years according to the ISM. This increase was driven by the stimulus spend, inventory build back, and increased sales of electronics to replace those which were broken by being thrown against the wall in disgust as the market cratered. Along with China and the US, Europe also saw an increase in manufacturing to a 25 month high causing red light sales to cease across the red light district of Amsterdam.
While positive manufacturing data is certainly good for the global economy, there is still some negative news today putting the proverbial turd in the punch bowl or the circular reference in the excel model. The dollar is dropping again as commodities rally due to cold weather driving up oil prices (and shrinking up "geysers") and China's manufacturing prowess spurring inflation concerns. Additionally, US homebuilding fell to a 6 year low led by a 1.6% drop in private home building. Not included in the report though was that sales of cardboard boxes have spiked as foreclosees build new houses out of cheaper materials.
In stock news, Novartis has the vision to buy more ACL, financials are rallying (and as Money McBags has said many times over the past few weeks, they are getting free money right now so should have record profits), and Money McBags favorite TMRK is soaring. TMRK is in the colocation/hosting business along with RAX and EQIX. This sector should see strong growth in the future as more companies rely on virtualization and more and more data storage is outsourced. The larger global trend (other than reality TV, string theory proponents, and flash your co-workers Wednesdays) is cloud computing, where all of one's programs, files, and downloaded spankwire videos will be hosted in a "cloud," thus leaving the actual pc as just an interface. Just think about all of the data out there now and the exponential growth it will see as medical redords, MRIs, MP3s, videos, and other apps continue to multiply like rabbits after downing a week's supply of viagra. TMRK is one of the companies building facilities to host all of this data. It is currently the smallest public player in this sector, though the sector is consolidating with EQIX buying SDXC for around 10x 2010 EV/EBITDA, and it has typically traded at a discount to peers due to the size, illiquidity, and $300MMish net debt (and no that is not a typo, they have a ton of debt as colocation facilities don't grow on trees). Still their topline is growing 20% plus (though the growth rate has been declining as they build out new facilites, so there are some step function aspects to growth) and and they have 20% of their revenue coming from the government as they host various government websites. This government revenue gives them stability and they should be able to grow it as cyber security becomes more important and colocation actually decreases the security risks. The fact is, data storage and colocation demand is outpacing supply by at least a 2 to 1 ratio so while TMRK is not terribly cheap anymore, as it trades at 8.5x EV/EBITDA, the industry is growing and consolidating so this company should be a longterm winner, like Groucho Marx jokes and anything starring Olivia Munn.
While positive manufacturing data is certainly good for the global economy, there is still some negative news today putting the proverbial turd in the punch bowl or the circular reference in the excel model. The dollar is dropping again as commodities rally due to cold weather driving up oil prices (and shrinking up "geysers") and China's manufacturing prowess spurring inflation concerns. Additionally, US homebuilding fell to a 6 year low led by a 1.6% drop in private home building. Not included in the report though was that sales of cardboard boxes have spiked as foreclosees build new houses out of cheaper materials.
In stock news, Novartis has the vision to buy more ACL, financials are rallying (and as Money McBags has said many times over the past few weeks, they are getting free money right now so should have record profits), and Money McBags favorite TMRK is soaring. TMRK is in the colocation/hosting business along with RAX and EQIX. This sector should see strong growth in the future as more companies rely on virtualization and more and more data storage is outsourced. The larger global trend (other than reality TV, string theory proponents, and flash your co-workers Wednesdays) is cloud computing, where all of one's programs, files, and downloaded spankwire videos will be hosted in a "cloud," thus leaving the actual pc as just an interface. Just think about all of the data out there now and the exponential growth it will see as medical redords, MRIs, MP3s, videos, and other apps continue to multiply like rabbits after downing a week's supply of viagra. TMRK is one of the companies building facilities to host all of this data. It is currently the smallest public player in this sector, though the sector is consolidating with EQIX buying SDXC for around 10x 2010 EV/EBITDA, and it has typically traded at a discount to peers due to the size, illiquidity, and $300MMish net debt (and no that is not a typo, they have a ton of debt as colocation facilities don't grow on trees). Still their topline is growing 20% plus (though the growth rate has been declining as they build out new facilites, so there are some step function aspects to growth) and and they have 20% of their revenue coming from the government as they host various government websites. This government revenue gives them stability and they should be able to grow it as cyber security becomes more important and colocation actually decreases the security risks. The fact is, data storage and colocation demand is outpacing supply by at least a 2 to 1 ratio so while TMRK is not terribly cheap anymore, as it trades at 8.5x EV/EBITDA, the industry is growing and consolidating so this company should be a longterm winner, like Groucho Marx jokes and anything starring Olivia Munn.
Thursday, December 31, 2009
12/31/09 Midday Report: Let the New Year's party begin (Except for the 10% of you unemployed)
2009 finally ends tonight and what a year it has been. The market sunk to a low of 666 before being exorcised by a low quality rally and a bottle of jesus juice, the US goverment bailed out the financial system and printed enough money to make Bill Gates seem like a pauper, unemployment spiked to multi-year highs bringing back Great Depression slogans such as "Brother can you spare a dime?" and "What can we get for $10?" (the answer of course being "everything you want."), and Hannah Hilton announced her retirement sending Money McBags into a deep and prolonged depression of his own. It was a momentous year but that is in the past and as the year 2010 begins, we all need to refocus on the markets and follow the data closely because things aint so cheap out there anymore so mistakes can be made (though probably not as big as this mistake or this one).
In market news today, weekly unemployment claims came in lower than expected as companies build back inventory and try not to Scrooge people during the Christmas holiday. The 432k initial jobless claims were the lowest in a year and a half so there is some optimism. Of course, those filing for extended unemployment benefits rose by 200k to just under 5MM. That's right, 5MM people have been out of the work force or longer than their 6 months of unemployment checks, but there is nothing to see here. In actuality, we appear to be at an inflection point where the economy has bottomed and is stabilizing so there is hope for growth, of course, they said that in Japan in 1991 as well.
In stock news, not much is happening today. Financials are up a bit (and as always, remember they are raking in the dough right now with free money from the FED and people and businesses who need that money willing to pay a lot more for it than free), RICK is rising again as the weak dollar makes those $20 lap dances oh so much cheaper for the international crowd, and NLS may be providing us with a good entry point should we believe the analysis of whengeniusprevailed random message board posters (as always, buyer beware).
So a Happy New Year to all of you from Money McBags who will leave you with this one thought for 2010.
In market news today, weekly unemployment claims came in lower than expected as companies build back inventory and try not to Scrooge people during the Christmas holiday. The 432k initial jobless claims were the lowest in a year and a half so there is some optimism. Of course, those filing for extended unemployment benefits rose by 200k to just under 5MM. That's right, 5MM people have been out of the work force or longer than their 6 months of unemployment checks, but there is nothing to see here. In actuality, we appear to be at an inflection point where the economy has bottomed and is stabilizing so there is hope for growth, of course, they said that in Japan in 1991 as well.
In stock news, not much is happening today. Financials are up a bit (and as always, remember they are raking in the dough right now with free money from the FED and people and businesses who need that money willing to pay a lot more for it than free), RICK is rising again as the weak dollar makes those $20 lap dances oh so much cheaper for the international crowd, and NLS may be providing us with a good entry point should we believe the analysis of whengeniusprevailed random message board posters (as always, buyer beware).
So a Happy New Year to all of you from Money McBags who will leave you with this one thought for 2010.
Wednesday, December 30, 2009
12/30/09 Midday Report: The market mimics the Alabama school system as investors close their books until the New Year
With the year coming to a close, trading is thinner than a bulimic after a good gastric banding while market news is scarcer than Paris Hilton's panties or Bernie Madoff's investment returns. The only real market news out today is that the Chicago ISM was released and measured a whopping 60, though it is unclear what 60 is out of and what 60 actually means, but it was higher than estimates so that must be good. Apparently, readings over 50 signal expansion which means every time Bar Refaeli shows up on my screen, my pants would read about a 99 on the Chicago ISM scale. Directionally, the results point to manufacturing in the midwest gaining strength and could signal positive changes for the job market as long as you are looking for a job as a competitve eater, snow shoveler, or corrupt politician (Chicago's 3 big industries).
The dollar is also on a bit of a rally as people forget how much money the US printed and borrowed, thus sending metals prices down. Money McBags has talked about gold's Bubblicious rise in the past and we are now witnessing some sell off. Long term, gold still remains a good hedge, though not as good as wearing two condoms when in Thailand.
Finally, GMAC may need more money from the government to the tune of $3B to $3.5B as not only did they finance shitty cars, but they financed them shittily. As a result of this news, the financial services sector is down as the fear of more bad loans and bail outs is leaving a slight scent on the market (and that scent is a bit like a young skunk who has been urinated on and left to sleep with Amy Winehouse for a week). That said, remember, these banks are getting free money and lending it out for a heck of a lot more than free so they should be raking in the dough so there are still some good buys out there.
In stock news, Money McBags favorite WILC hit its 52 week high as the shekel increases vs. the dollar and companies (unlike overweight strippers and kleenex) just can't stay ridiculously cheap forever. Also there appears to be a sell off of momentum names in the weight loss space as NTRI and MED are dropping like Alan Greenspan's credibility. NTRI announced a $5MM impairment charge yesterday, MED's CEO is regstered as having sold shares, and these names have been flying higher than a coked up Ruppell's griffon so a sell off is not unexpected. Money McBags does recommend keeping an eye on NTRI as they have had solid returns, recently entered the diabetic market, and have new deals with WMT and Walgreens. The company is a solid cash flow generator and this country has more fat people than Tiger Woods has STDs, so their business has plenty of room to grow. It is worth following and waiting for the momentum buyers to finish selling.
The dollar is also on a bit of a rally as people forget how much money the US printed and borrowed, thus sending metals prices down. Money McBags has talked about gold's Bubblicious rise in the past and we are now witnessing some sell off. Long term, gold still remains a good hedge, though not as good as wearing two condoms when in Thailand.
Finally, GMAC may need more money from the government to the tune of $3B to $3.5B as not only did they finance shitty cars, but they financed them shittily. As a result of this news, the financial services sector is down as the fear of more bad loans and bail outs is leaving a slight scent on the market (and that scent is a bit like a young skunk who has been urinated on and left to sleep with Amy Winehouse for a week). That said, remember, these banks are getting free money and lending it out for a heck of a lot more than free so they should be raking in the dough so there are still some good buys out there.
In stock news, Money McBags favorite WILC hit its 52 week high as the shekel increases vs. the dollar and companies (unlike overweight strippers and kleenex) just can't stay ridiculously cheap forever. Also there appears to be a sell off of momentum names in the weight loss space as NTRI and MED are dropping like Alan Greenspan's credibility. NTRI announced a $5MM impairment charge yesterday, MED's CEO is regstered as having sold shares, and these names have been flying higher than a coked up Ruppell's griffon so a sell off is not unexpected. Money McBags does recommend keeping an eye on NTRI as they have had solid returns, recently entered the diabetic market, and have new deals with WMT and Walgreens. The company is a solid cash flow generator and this country has more fat people than Tiger Woods has STDs, so their business has plenty of room to grow. It is worth following and waiting for the momentum buyers to finish selling.
Tuesday, December 29, 2009
12/29/09 Midday Report: Consumers more confused than Alan Greenspan in a housing bubble
Data came out today showing a rise in consumer confidence for the second consecutive month, despite consumers rating their current situation as the worst since February 1983 (and to give you an idea about how long ago February 1983 was, Tennessee Williams was alive for most of the month, Case had yet to mix his chocolate with Shiller's peanut butter, Beat It was released as a single (and Michael Jackson was still black, and alive), and Hilary Scott was born and thus had yet to expertly fellate her first johnson). That's right, in the same report today, the consumer's expectations of wages and jobs fell to 26 year lows while consumer confidence rose. So it all makes perfect sense. Consumer confidence is rising, while falling to new lows at the same fucking time. Somewhere Kafka is happily sitting up in his grave and applauding while Zeno Cosini has his last cigarette.
Speaking of Case-Shiller, home prices in 20 cities rose for the 5th consecutive month, or they were flat, depending which news source you read of the exact same fucking data. And seriously, for you reporters out here, you're not reporting on the existential feeling of Antoine de Saint Exupery or the exact location of a quantum particle (and for the record, under my balls would be an acceptable enough guess) so how hard is it get the one number fact correct? Luckily, a third news source clears up any confusion by stating that home prices were up, but when adjusted for seasonality, they were flat. Who knew that one needed to hire someone from NAFA (where I am told they party until their valuation allowances reverse) just to read a simple news story.
In stock news, a Money McBags favorite, RICK continues rise (and it is from more than the table dance) while a Money McBags watchlist company, CRTX, gets some momentum. CRTX is a roll-up drug maker/supplier focused on the respiratory market who went public through a reverse merger last year. Since that time they have acquired the rights to a number of drugs while revamping their sales force and selling controlling interest in themselves to Italian pharma company Chiesi (in return for the rights to market one of Chiesi's drugs in the US and a lifetime supply of parmesan cheese). While trying to piece this company together, CRTX has seen their top selling drugs face increasing competition from generics (which they admit is happening and say is not unplanned, hence the acquisition of other drugs) and has disappointed the street (though only one analyst covers them and that analyst has been consistently too high, thus tripping quant funds' models when numbers come in low). The point is, this company could easily do $115MM of revenue in 2010 (maybe $130MM at the top end) and has a current market cap of around $145MM. Drug companies at a minimum should tade at 2x earnings, and more likely 3x to 4x. So if this company can just execute and fend off lost drug sales through their new drugs (Curosurf and Factive) while purchasing another underutilized drug or two, the stock could easily double from here. It definitely bears watching, as does the majestic Gracie Glam.
Speaking of Case-Shiller, home prices in 20 cities rose for the 5th consecutive month, or they were flat, depending which news source you read of the exact same fucking data. And seriously, for you reporters out here, you're not reporting on the existential feeling of Antoine de Saint Exupery or the exact location of a quantum particle (and for the record, under my balls would be an acceptable enough guess) so how hard is it get the one number fact correct? Luckily, a third news source clears up any confusion by stating that home prices were up, but when adjusted for seasonality, they were flat. Who knew that one needed to hire someone from NAFA (where I am told they party until their valuation allowances reverse) just to read a simple news story.
In stock news, a Money McBags favorite, RICK continues rise (and it is from more than the table dance) while a Money McBags watchlist company, CRTX, gets some momentum. CRTX is a roll-up drug maker/supplier focused on the respiratory market who went public through a reverse merger last year. Since that time they have acquired the rights to a number of drugs while revamping their sales force and selling controlling interest in themselves to Italian pharma company Chiesi (in return for the rights to market one of Chiesi's drugs in the US and a lifetime supply of parmesan cheese). While trying to piece this company together, CRTX has seen their top selling drugs face increasing competition from generics (which they admit is happening and say is not unplanned, hence the acquisition of other drugs) and has disappointed the street (though only one analyst covers them and that analyst has been consistently too high, thus tripping quant funds' models when numbers come in low). The point is, this company could easily do $115MM of revenue in 2010 (maybe $130MM at the top end) and has a current market cap of around $145MM. Drug companies at a minimum should tade at 2x earnings, and more likely 3x to 4x. So if this company can just execute and fend off lost drug sales through their new drugs (Curosurf and Factive) while purchasing another underutilized drug or two, the stock could easily double from here. It definitely bears watching, as does the majestic Gracie Glam.
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).
Thursday, December 24, 2009
12/24/09 Mid-Morning Report: It's Christmas Eve, can a jew get a table dance?
Yes Money McBags lights the menorah and it looks like the market wants him to get those table dances tonight as it is up again on positively mixed news. Durable goods orders rose, though missed expectations with weakness in autos and airplanes which is not suurprising since "Cash for Clunkers" went away like Tom DeLay's dignity. Taking out transportation, durable goods demand demolished estimates like Kirstie Alley demolishes her Christmas ham (and it is reasons like this that NTRI has been absolutely killing it lately). Orders were up 2% ex-transportation, led by demand for machinery, metals, computers, and stripper poles. The question remains whether this is real demand or just inventory build back, so we're trying to temper our excitement and make it last longer by just thinking about baseball.
In other positive market news today, initial jobless claims fell to their lowest level since September 2008 as eventually you run out of people to fire. So if you made it through and stayed employed this long, you might be ok, but if you're looking for a job, you may be fucked worse than the lovely Houston at her 620 man gangbang.
In stock news, Money McBags' long time favorite QCOR is up 20% on news that the FDA will give a ruling on Achtar for IS by June (and hopefully the ruling is more than just finding it delicious). Seeing as how it took QCOR about 3 years and several "do-overs" to get this filing accepted (and you'd think they were trying to prove P=NP with how long it took them to simply get a filing complete), this is positive news, but the FDA still has to approve this drug which is used by the majority of doctors anyway (so one would think it would be approved, but then again, one also thought Lindsay Lohan would have had a long and profitable career and Evolution would not have been contested in the 21st Century). Money McBags wouldn't be buying into this rally though. It seems more like short covering than anything because the company is still going through growing pains and there is some uncertainty to their medicare reimbursement as they currently have to pay more than they get from medicare and didn't reserve enough for late/non-payments last Q. The company is probably at a ~$.08-$.10 quarterly run rate right now, but they have cash and give back to shareholders through buybacks. They could have real upside if they continue to penetrate the MS market and can get on-label IS approval while overcoming the sticker shock from doctors/patients/insurance companies on the price of a vial of Achtar which currently runs at $23k a pop (and that is enough to cure spasms from MS/IS but create spasms from having to pay that price).
In other positive market news today, initial jobless claims fell to their lowest level since September 2008 as eventually you run out of people to fire. So if you made it through and stayed employed this long, you might be ok, but if you're looking for a job, you may be fucked worse than the lovely Houston at her 620 man gangbang.
In stock news, Money McBags' long time favorite QCOR is up 20% on news that the FDA will give a ruling on Achtar for IS by June (and hopefully the ruling is more than just finding it delicious). Seeing as how it took QCOR about 3 years and several "do-overs" to get this filing accepted (and you'd think they were trying to prove P=NP with how long it took them to simply get a filing complete), this is positive news, but the FDA still has to approve this drug which is used by the majority of doctors anyway (so one would think it would be approved, but then again, one also thought Lindsay Lohan would have had a long and profitable career and Evolution would not have been contested in the 21st Century). Money McBags wouldn't be buying into this rally though. It seems more like short covering than anything because the company is still going through growing pains and there is some uncertainty to their medicare reimbursement as they currently have to pay more than they get from medicare and didn't reserve enough for late/non-payments last Q. The company is probably at a ~$.08-$.10 quarterly run rate right now, but they have cash and give back to shareholders through buybacks. They could have real upside if they continue to penetrate the MS market and can get on-label IS approval while overcoming the sticker shock from doctors/patients/insurance companies on the price of a vial of Achtar which currently runs at $23k a pop (and that is enough to cure spasms from MS/IS but create spasms from having to pay that price).
Wednesday, December 23, 2009
12/23/09 Midday Report: Consumer confidence rises enough to spur consumers to still not buy new houses
Another day and more mixed data so Bulls and Bears can both rejoice (Yay!!! Things are getting better and Yay!! Things are staying crappy. See we can all get along, you hear that Israel and Palestine and Tiger and Elin?). US consumer confidence rose to 72.5 according to the Michigan Consumer Sentiment Index, though it was down from the preliminary reading of 73.4 just over a week ago. It's good to see even Michigan is adopting the Commerce's departments' "downward revision" strategy which Money McBags outlined for you yesterday. In addition to Consumer Sentiment rising to some undefined number, personal spending and incomes were up (though less than forecast) as the second derivative of unemployment has slowed and the economy has been stimulated from flaccid to almost semi-erect with all of the dollars the government has printed and strategically placed into their g-string.
But Bears don't worry because in contrast to the stronger consumer (though not as strong as estimates, Magnus ver Magnusson, or the odor from a Mickey Rourke corn shit), new home sales fell to a seven month low and dropped 11%. I'm no Robert Shiller (for fucksake I'm not even Karl Case) but when home foreclosures are at a record, why the fuck would anyone buy/build a new home when they can get an existing one for 70% of the price (and backing this sentiment up was the news from yesterday that existing home sales were up)? But fear not everyone, because Timothy Geithner says there will be no "second wave" financial crisis and we all know how good Treasury Secretaries have been with their predictions.
In stock news, newspapers are moving up (and that is not an error as bizarre as it seems, so there will be no retraction necessary) as a Wells Fargo analyst upgraded the sector from "underweight" to "equalweight" after sniffing four packages of glue, downing a fifth of Jack Daniels, and revving up the flux capacitor in his DeLorean and travelling back to the 1980s, thus forgetting about this little thing called the interfuckingnet. Along with that report, the analyst also predicted that New Coke will soar, Ishtar will revolutinize the movie industry, Teddy Ruxpin will be the best selling toy in history, and AIDS will be but a fleeting virus and thus he also downgraded CHD.
Tommorrow is a half day on the markets so get your trades in while you can and then enjoy your day off.
But Bears don't worry because in contrast to the stronger consumer (though not as strong as estimates, Magnus ver Magnusson, or the odor from a Mickey Rourke corn shit), new home sales fell to a seven month low and dropped 11%. I'm no Robert Shiller (for fucksake I'm not even Karl Case) but when home foreclosures are at a record, why the fuck would anyone buy/build a new home when they can get an existing one for 70% of the price (and backing this sentiment up was the news from yesterday that existing home sales were up)? But fear not everyone, because Timothy Geithner says there will be no "second wave" financial crisis and we all know how good Treasury Secretaries have been with their predictions.
In stock news, newspapers are moving up (and that is not an error as bizarre as it seems, so there will be no retraction necessary) as a Wells Fargo analyst upgraded the sector from "underweight" to "equalweight" after sniffing four packages of glue, downing a fifth of Jack Daniels, and revving up the flux capacitor in his DeLorean and travelling back to the 1980s, thus forgetting about this little thing called the interfuckingnet. Along with that report, the analyst also predicted that New Coke will soar, Ishtar will revolutinize the movie industry, Teddy Ruxpin will be the best selling toy in history, and AIDS will be but a fleeting virus and thus he also downgraded CHD.
Tommorrow is a half day on the markets so get your trades in while you can and then enjoy your day off.
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