Stock Market News & Stocks to Watch from StraightStocks » Investing Lessons

Weak Dollar Boosts Commodities – So What’s Next?

Chris Vermeulen — Thu, 26 Nov 2009 04:30:56 +0000

Another fantastic week for precious metals as the US dollar continues its slide lower. Energy commodities like oil and natural gas are having some difficulty finding buyers. When commodities start to trend they become very profitable for those riding them up or down. But when a short term trend starts to virtually go straight up (parabolic) [...]

A-Power (Nasdaq:APWR) Breaking Out – We Are Writing Covered Calls

Small Cap Pulse — Wed, 25 Nov 2009 23:20:01 +0000

November 25, 2009 ndash; Back in December of 2008 we wrote that: ldquo;Power (Nasdaq:APWR). We are also long-term bullish on APWR, which, like LDK, continues to post solid financial results and favorable guidance. The stock is trading at about $3.76, down $0.54, or 12.56%, about 5.2x its trailing 12-month earnings, about 0.6x trailing 12-month sales, and about 0.98x book value. A-Power has amassed a backlog across its business of more than $1 billion, it has a solid balance sheet with no debt and cash of about $60 million, or $1.80 per share. The company has reaffirmed the fact that it expects to earn about $35 million this year, and $70 million next year. The stock is trading at 3.48x this yearrsquo;s earnings and 1.74x next yearrsquo;s earnings. At a modest 10x 2008 projected earnings, the stock would be trading at $10.86, a 188% premium to todayrsquo;s trading price.rdquo; Back then we talked with fund managers and analysts who seemed to generally be buying into the conventional wisdom, that, lsquo;where there is smoke there is fire.rsquo; The smart money was betting against the stock, saying that there must be some baggage that the Street just doesnrsquo;t know about that is driving the stock into the ground. We saw it is a relatively low-risk opportunity to buy low ndash; and did. We also recommended as much to our readers. This morning, the stock is breaking out on volume, up about 10% to $16 (up 325% since we wrote that piece in December). We remain long-term bullish on the company, which has continued to announce business that rationalizes the performance of the stock. However, given our general outlook on the broader markets, that they are totally overbought, we think a pullback could create some resistance to A-Powerrsquo;s stock at current levels, so we are writing some out of the money covered calls on the stock. We sold the March 20 2010 calls for $1.20, which, if you were buying the stock back in December would be reducing your cost average to about $2.60. We recently also took advantage of what we thought was short-term weakness in the stock, selling puts (December 7.5 2009 Puts) for $1.30 on August 18, which would have obligated us to purchase shares of A-Power at $7.50 (cost average of $6.20) if the stock was trading below $7.50 on expiration date coming up in December. It doesnrsquo;t look likely. Today, that position is in the profit by 92%. Our rationale for selling calls this morning on the stock into strength is a hedge against downside risk for the broader markets, which could translate into downward pressure for A-Powerrsquo;s stock, and also an opportunity to lower our cost average. By the way, we still like LDK (NYSE:LDK) which is the other stock mentioned in that December piece, which hasnrsquo;t performed as well over the same period, but has created several trading opportunities, as well as opportunities to establish attractively lower costs basis. Important Disclosure: This information is intended to assist investors.nbsp; The information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice.nbsp; Any such offer, if made, will only be made by means of a confidential prospectus or offering memorandum or management agreement.nbsp; It is not our intention tonbsp;state, indicate or imply in any manner that current or past results are indicative of future results or expectations.nbsp; As with all investments, there are associated risks and you could lose money investing.nbsp; Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment.

DrStockPick.com Stock Report! Most Active Stocks Wednesday Nov 25, 2009

Dr. Stock Pick — Wed, 25 Nov 2009 23:06:50 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! ************************************************************** Most Active NYSE Stocks Symbol Company Last Chng. %Chng. Volume C Citigroup Inc $4.17 -0.04 -0.95% 200,496,215 SPY SPDR S&P 500 ETF $111.38 +0.39 +0.35% 109,309,404 BAC Bank Of America Corporation $15.95 -0.15 -0.93% 97,121,340 EEM iShares MSCI Emerging Markets Index ETF $41.75 +0.48 +1.16% 56,184,504 GE General Electric Co $16.18 +0.06 +0.37% 48,115,390 IWM iShares Russell 2000 Index Fund $59.33 -0.01 -0.02% 47,634,274 XLF Financial Select Sector SPDR ETF $14.67 -0.03 -0.20% 44,080,496 PFE Pfizer Inc $18.59 +0.28 +1.53% 42,086,456 Q Qwest Communications International Inc $3.91 +0.13 +3.44% 38,244,893 FAZ Direxion Shs Etf Tr $19.65 +0.10 +0.51% 37,583,849 S Sprint Nextel Corp $3.84 +0.09 +2.40% 34,648,006 UNG United States Natural Gas ETF $9.56 +0.55 +6.10% 33,212,097 SNV Synovus [...]

How to Earn Putin Points and Survive in Russian Business

Robert Amsterdam — Wed, 25 Nov 2009 22:28:21 +0000

I was taken aback the other day to open up the Moscow Times website and find an glowing opinion article written by Brian Zimbler, a Moscow based lawyer of the firm Dewey & LeBoeuf. The article, which heaped praise upon...

VIP Falls Behind Expectations – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 22:00:13 +0000

VimpelCom (VIP) reported third-quarter 2009 earnings of 42 cents per ADS (based on an average exchange rate of 31.26 RUR/US$) that narrowly missed the Zacks Consensus Estimate of 44 cents. However, the result beat the year-ago earnings per ADS of 27 cents.

The second-largest Russian telecom carrier reported quarterly net income of RUR13.5 billion (US$432 million), more than double the net income of RUR6.5 billion (US$208 million) reported in the year-ago quarter. This significant year-over-year growth is largely attributable to foreign exchange gains from a strong Russian ruble versus the US dollar.

Operating revenue increased 3.5% year over year to RUR71.3 billion (US$2.3 billion) as growth across Russia, Kazakhstan, Uzbekistan and Tajikistan was partly offset by declines in Ukraine and Armenia. Revenue from the wireless operation was RUR60.7 billion (US$1.9 billion) while the fixed-line business generated revenue of RUR15.1 billion (US$483 million).

Reported OIBDA of RUR36 billion (US$1.2 billion) reflects a year-over-year growth of 7%, yielding an OIBDA margin of 50.4%. The annualized growth reflects the company’s ability to reduce costs amid the volatile economic environment. VimpelCom is pursuing various strategies to maximize cash flow through several cost-control measures.

The company’s total active cellular subscriber base grew by roughly 7.6 million year over year and by 1.7 million sequentially to 65.4 million. Its broadband subscriber base increased 11% sequentially to approximately 1.9 million.

On a geographic basis, revenue from Russia increased 4.1% year over year to RUR61.2 billion (US$1.9 billion), representing roughly 86% of the company’s total sales. Mobile subscriber base in Russia grew 13.2% year over year to 51 million. VimpelCom added 174,000 broadband subscribers during the quarter, bringing the total customer base to 1.83 million. The results were supported by a resurgent Russian economy.

Consolidated revenue from the CIS markets grew 3.9% year over year to RUR11.1 billion (US$355 million). Revenue from Kazakhstan (the largest CIS market) registered RUR5.4 billion (US$173 million), up 11.9% year over year. However, sales declined year over year in other key markets such as Ukraine (down 22.3%) and Armenia (down 3.4%).

During the quarter, VimpelCom spent RUR3.8 billion (US$122 million) in capital expenditures (CAPEX). The company has revised its CAPEX guidance reflecting a stronger ruble versus the dollar. VimpelCom expects CAPEX to be in the range of 10%-12% of its 2009 annual sales. The company plans to lift capital spending by at least 50% in 2010 to support 3G network expansion. VimpelCom’s 3G services currently cover all regions of Russia.

VimpelCom repaid debt worth US$690 million during the third quarter. The company successfully reduced its net debt to US$5.5 billion at the end of the quarter from $6.3 billion registered in the previous quarter.

In October 2009, the company’s two major shareholders Telenor and Altimo announced plans to merge their holdings in VimpelCom and Ukranian mobile operator Kyivstar to create a jointly owned telecom operator.

VimpelCom remains the second-largest wireless operator in Russia with over a 25% market share. Nevertheless, the company has a higher projected growth rate than its Russian peer Mobile Telesystems (MBT) as it continues to demonstrate the ability to succeed in emerging markets on the strength of sustained subscriber growth.

Besides maintaining its strong market position in the rapidly maturing Moscow metropolitan area, VimpleCom has successfully expanded into incipient Asian markets such as Vietnam and Cambodia. The company completed the commercial launch of its cellular operation in Cambodia in May 2009 under the Beeline brand. This was followed by the launch of wireless operation in Vietnam in July 2009. Moreover, VimpleCom recently signed an agreement to enter the Laos mobile market.

VimpelCom plans to cover more than two-third of Cambodia’s population by the end of 2009 and reach over 40 provinces and 41 million people in Vietnam by the end of January 2010. The relatively lower mobile penetration in these new Asian markets offers attractive growth opportunities for the company.
Read the full analyst report on "VIP"
Read the full analyst report on "MBT"
Zacks Investment Research

Putin’s Eye of the Tiger

Robert Amsterdam — Wed, 25 Nov 2009 21:46:42 +0000

Remember back when Vladimir Putin "saved" a group of journalists from a wild Amur tiger, dramatically shooting it on national television? It was probably his most imaginative PR stunt, at least up until he jumped into a submarine to visit...

J. Crew Beats Zacks Estimates – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 21:38:21 +0000

J. Crew Group Inc. (JCG), a multi-channel retailer of women's, men's and children's apparel, shoes and accessories across the U.S., has reported better-than-expected fiscal 2009 third quarter results with a net income of $43.9 million or 67 cents per share, compared to a net income of $19.0 million or 30 cents per share in the year-earlier quarter. The earnings also exceeded the Zacks Consensus Estimate by 9 cents.

The strong third quarter performance was primarily driven by a healthy sales growth across its segments. J. Crew Group is one of the few U.S. apparel retailers that witnessed robust sales growth during the quarter despite an overall weak economy. Total revenues increased 14.0% to $414.1 million from $363.1 million in the year-ago quarter, while same-store sales increased 8% year-over-year.

J. Crew Group attributes its strong sales to unique and differentiated merchandise, coupled with its tailor-made customer service. The merchandise margins of the company hit a historical high during the quarter, buoyed by stringent inventory management policies and a relatively positive outlook ahead of the upcoming holiday season. At quarter-end, inventories were $223.9 million compared to $250.1 million in the previous year. Inventory per square foot decreased 17% year-over-year.

Gross margin increased to 48.4% of revenues during the quarter from 41.6% in the year-ago period. Operating income increased to $75.2 million (18.2% of revenues) from $32.5 million (9.0% of revenues) in the third quarter of fiscal 2008. At quarter-end, J. Crew Group had cash and cash equivalents of $246.8 million versus $114.5 million in the year-earlier quarter.

With an improved performance during the quarter, the shares of the company rose 7% in after-hours trading. J. Crew Group currently expects its fourth quarter earnings in the range of 37 cents to 42 cents per share.
Read the full analyst report on "JCG"
Zacks Investment Research

PSFT, HZHI, CVAT, PWRM, HCEI, TAXS, CSRH, AQNM, Stocks at a Glance. DrStockPick.com Report!

Dr. Stock Pick — Wed, 25 Nov 2009 21:23:58 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday November 25, 2009 DrStockPick.com Stock Report! PSFT, HZHI, CVAT, PWRM, HCEI, TAXS, CSRH, AQNM ************************************************************** HCEI, Healthy Coffee International Inc., HCEI.PK HCEI is well positioned in the market place at the intersection of three mega-billion dollar industries: coffee, wellness and energy drinks, and has quickly established offices [...]

No Change in Deere’s Outlook – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 21:14:23 +0000

Earlier today, Deere & Company (DE) reported fiscal fourth quarter earnings of 23 cents per share (excluding goodwill impairment charges of 76 cents per share), which is well above the Zacks Consensus Estimate of 5 cents per share. However, quarterly earnings were down 72% year over year, primarily due to a double-digit decline in sales.

Quarterly revenue of $5.3 billion was down 28% from the prior-year period. Net sales from the company’s worldwide equipment operations dropped 30% year over year to $4.7 billion due to lower shipment and production volumes. Equipment net sales in the U.S. and Canada fell 26%, while the net sales outside the U.S. and Canada were down 35%.

Agriculture & Turf segment sales fell 26% due to lower shipment volumes, partially offset by improved price realization. The segment’s operating profit (excluding the goodwill impairment charge) was $389 million, compared to $460 million last year. Lower operating profit was driven by lower revenue, partially offset by a decline in raw material and SG&A expenses.

Sales in the Construction and Forestry segment were down 47%, reflecting a significant decline in shipment and production volumes. The segment posted operating profit of $2 million for the reported quarter, compared to $89 million last year. Lower shipment and production volumes were partially offset by improved price realization, lower raw-material costs and lower SG&A expenses.

For the full-year fiscal 2009, Deere posted net income of $2.84 per share, compared to previous-year EPS of $4.70 per share. Total sales for the year were down 19% at $23.1 billion, as farmers and other customers cut their spending under recessionary conditions.

Deere projects a 1% drop in for fiscal 2010, including a 10% drop in the first quarter. The company’s forecast assumes a favorable currency translation impact of approximately 1% for the year and about 3% for the first quarter. Net income for fiscal 2010 is forecasted at around $900 million.

Full-year (fiscal 2010) sales from the Agriculture & Turf business are forecasted to decline 4% with lower expected sales from the U.S., Canada, and European markets and higher sales from South America. Construction and Forestry segment sales are expected to increase by about 18% in fiscal 2010, driven by aggressive inventory reductions made in fiscal 2009 to align the company’s production with retail demand.

We maintain a Neutral recommendation on Deere.
Read the full analyst report on "DE"
Zacks Investment Research

Sprint Acquires Virgin Mobile USA – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 20:51:54 +0000

Sprint Nextel (S) has officially wrapped up its acquisition of prepaid wireless reseller Virgin Mobile USA (VM). This follows the approval of the transaction by the shareholders of Virgin Mobile USA, which is a joint-venture between UK’s Virgin Group and Sprint.

Virgin Mobile USA offers prepaid mobile services to roughly 5.2 million subscribers in the US. Prior to the acquisition, Sprint held a 13.1% stake in the entity. The Virgin brand, which is primarily targeted at youth culture, is very popular in the US among customers who cannot afford expensive long-term service contracts. Popularity of low-cost prepaid brands has grown as customers are increasingly switching to cheaper alternatives pressured by the recession.

Sprint announced its acquisition of Virgin Mobile USA for $483 million in July 2009. The deal was approved by the Federal Trade Commission, the US antitrust regulator, in August 2009. Per the agreement, the shareholders of Virgin Mobile USA will receive 1.3668 shares of Sprint for each share of Virgin Mobile USA. Sprint also committed to retire all outstanding debt (roughly $228 million) of the entity.

Sprint remains significantly challenged by the dismal economic environment which has contributed to the precipitous decline in subscriber base and revenues. On the other hand, the company’s larger peers Verizon (VZ) and AT&T (T) continue to expand their respective customer bases at a brisk rate.

Sprint is losing customers to its bigger rivals due to intense pricing pressure and technical problems associated with integrating its CDMA and iDEN wireless networks. The company’s core postpaid business is gradualy shrinking, as reflected by net loss of approximately 3 million customers in the first nine months of 2009.

In contrast, Sprint continues to register healthy growth in its prepaid subscriber base. The company’s $50 monthly unlimited prepaid plan continues to gain significant traction, facilitating prepaid subscriber retention and ARPU (average revenue per user) growth. To mitigate churn, Sprint has expanded this service plan across all of its existing wireless network platforms. The company’s Boost Mobile prepaid subsidiary currently offers prepaid services to 5.7 million customers in the US .

Moving forward, the prepaid wireless market will continue to serve as a significant growth catalyst for Sprint, helping it to offset the losses in the postpaid business. Acquisition of Virgin Mobile has further strengthened the company’s foothold in the fast-growing prepaid market as it leverages two complementary brands (Boost and Virgin) to target different customer demographics with distinctive service offerings.

The addition of the popular Virgin brand, enables Sprint to better compete with other established players in the prepaid segment such as MetroPCS (PCS), Leap Wireless (LEAP) and Deutsche Telekom’s (DT) US subsidiary T-Mobile USA.
Read the full analyst report on "S"
Read the full analyst report on "VM"
Read the full analyst report on "T"
Read the full analyst report on "VZ"
Read the full analyst report on "PCS"
Read the full analyst report on "LEAP"
Read the full analyst report on "DT"
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Omnicity Corp. (OMCY.OB) Ensuring Effective Support for Growing Customer Base

QualityStocks — Wed, 25 Nov 2009 20:37:37 +0000

Omnicity Corp., best known as the Midwest’s largest fixed Wireless Internet Service Provider, also provides a wide range of basic computer and networking services for both business and residential customers. These services have become increasingly important as the company rapidly expands its ISP base because customers generally prefer support from someone that can work directly [...]

Provenge Action Date Assigned – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 20:29:04 +0000

Recently, Dendreon Corp. (DNDN) announced that the U.S. Food and Drug Administration (FDA) has accepted the amended Biologics License Application (BLA) for Provenge, a therapeutic vaccine for the treatment of prostate cancer in men. The agency is expected to decide on whether to approve the drug by May 1, 2010.

The BLA, submitted on Nov 2, 2009, is based on the positive phase III IMPACT (IMmunotherapy for Prostrate AdenoCarcinoma Treatment) trial results announced in Apr. 2009.The multi-center, randomized, double-blind, placebo-controlled study, which enrolled 512 patients with metastatic androgen-independent prostate cancer, met its primary endpoint of improving overall survival compared to a placebo control.

If approved, Provenge would be the first product in the new therapeutic class known as active cellular immunotherapies. In development studies, Provenge boosted survival rates in men with advanced prostate cancer beyond any currently available treatments. Unlike traditional vaccines that prevent diseases, Provenge treats it by stimulating the body's own immune system to attack cancer cells. Dendreon plans to market Provenge in the U.S. on its own and is seeking partners for ex-U.S territories.

Prostate cancer is the most common non-skin cancer in the United States and the third most common cancer globally as per data from the American Cancer Society. The disease affects more than one million men in the United States .

We believe that approval of Provenge is critical for the financial performance of the company because the product has blockbuster potential and its successful commercialization could drive a company of Dendreon’s size to strong profitability.

The company plans to manufacture Provenge in its New Jersey facility. Furthermore, additional manufacturing facilities in Los Angeles and Atlanta will begin producing the drug in the second half of 2011.

Currently, we have an Outperform rating on Dendreon.

Read the full analyst report on "DNDN"
Zacks Investment Research

Clenergen Corp.’s (CRGE.OB) Management Leads Innovative Push into Renewable Energy

QualityStocks — Wed, 25 Nov 2009 20:22:44 +0000

Clenergen Corp. is approaching the renewable energy/biofuels sector from a unique perspective – an agronomy/ plantation standpoint rather than from a purely technical/engineering standpoint. Clenergen’s goal is produce high-density, short-rotation biomass (non-food) crops to use as feedstock for advanced gasification technologies to produce electricity. The company is led by an outstanding management group. Here is a [...]

Edison Gets Regulatory Approval – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 20:17:55 +0000

Edison International (EIX) bagged an approval from the California Public Utilities Commission (CPUC) to construction the Devers Palo Verde2 Transmission Line project in California. The project is being built by its subsidiary Southern California Edison (SCE). The $537 million, 150-mile long transmission line project, once completed, will be able transmit 1.2 GW of electricity from renewable sources to customers in Southern California.

The transmission line will connect SCE’s Devers Substation near Palm Springs to the company’s proposed Midpoint switchyard near Blythe, California. Additionally, SCE will build a 42-mile, 500-kilovolt transmission line between the Devers substation and its Valley substation in Riverside County as part of the project.

The transmission line project will provide the capability to meet generation developers’ request for interconnecting new renewable and conventional generation projects in the solar energy rich areas of Southeastern California. By providing these developers with the means to access markets in California, Arizona and other states in the Western region, the project will support these states’ efforts to meet their respective renewable portfolio targets.

The addition of transmission lines will enhance the distribution network of Edison International. In recent times, the company witnessed 14.7% lower revenue year-over-year to $3.7 billion from $4.3 billion.

Also, to reduce greenhouse gas emission and adhere to California’s renewable portfolio standard utilities operating in California are spending big money. California’s renewable portfolio standard requires utilities to generate 33% of power from renewable sources by fiscal 2020. PG&E Corporation (PCG) plans to invest around $13 billion in 2009 – 2011, while Sempra Energy (SRE) will invest $2.5 billion. Edison International’s subsidiary Southern California Edison is projecting capital expenditures for the period 2009 – 2013 in the range of $16.8 billion to $19.8 billion.

Edison International’s consistent performance through its solid base of stable utility operations, SCE rate hike, ongoing alternative energy projects, balance sheet strength, and a relatively cheap earnings-based valuation, partially offset by a stagnant economy, volatile gas prices, low-hedged power output and coal positions, as well as the recovery of capital expansion costs, support our modestly bullish outlook. Thus we reiterate our Neutral recommendation on the stock.
Read the full analyst report on "EIX"
Read the full analyst report on "SRE"
Read the full analyst report on "PCG"
Zacks Investment Research

Grigory Pasko: The Gulag Unconcious

Robert Amsterdam — Wed, 25 Nov 2009 20:16:38 +0000

The Swiss psychiatrist Carl Gustav Jung wrote : "He who has achieved a perception of reality is inevitably solitary" [This is a translation of the Russian version of Jung's essay "The Spiritual Problem of Modern Man". The standard English version...

Retail Industry – Industry Outlook

Zacks Market Commentaries — Wed, 25 Nov 2009 20:13:03 +0000

Upcoming Holiday Shopping Season

With a probable end in sight to a prolonged recession, American consumers are somewhat upbeat about the upcoming holiday shopping season. However, customers remain skeptical at the same time and intend to spend less, compared to previous years before the start of the recession.

According to a study by A.C. Nielsen, approximately 42% of American consumers plan to spend less this holiday shopping season, representing a 7% year-over-year rise in those who intend to spend less.

U.S. customers have undergone a fundamental change in how they spend their money. They are primarily focusing on value-for-money items throughout the holiday shopping season, especially traditional and essential gifts that are popular. As a result, traditional items such as toys, electronic goods and clothing are at the top of holiday shopping lists, and most consumers
intend to spend more on gift cards.

Consequently, it will be more of a challenge for the retail business to attract customers to their outlets and online stores. In view of lower discretionary income, consumers are currently more selective in their purchases. Trends are also showing a progressive shift in consumer research patterns before holiday shopping, and it is observed that more value shoppers are browsing and comparing the products on the Internet. Consumers are also resorting to social media to search for holiday shopping deals and coupons.

Therefore, online retailers that offer value in the retail business, including discount stores and savings clubs, will be more attractive to shoppers as they provide budget holiday shopping gifts, as well as flexible delivery options, shipping deals and gift-wrapping/eco-packaging services.

Most retail business also looks to be pushing up sales before ‘Black Friday,’ the day after the Thanksgiving Day holiday that marks the traditional kick-off of the holiday shopping season. Market research firm IBISWorld expects total retail business sales over Black Friday weekend to rise 2.8 % to $42.9 billion. It expects 76.9 million people to swarm into retail stores on Black Friday alone.

Retail business like The Gap (GPS) started offering discounts of 25%, while Wal-Mart and Target are offering online shoppers free or discounted shipping on most of the items. JC Penney (JCP) is also ramping up its Black Friday promotions.

OPPORTUNITIES

Most of the companies in the apparel, confectionery and cosmetics sector are expected to benefit from the holiday shopping season.

Leading apparel company Gap Inc. (GPS) recently reported strong quarterly earnings, boosted by sales at its low-price Old Navy chain. Gap is now focusing more on improving its business model by striking the right balance between its cost structure and merchandise by better aligning inventory with sales trends. The company is upbeat about its performance in the upcoming holiday shopping season, as management is focused on gaining market share by presenting a strong value proposition to customers across its brands.

The other leading retail business, Limited Brands (LTD) reported almost a 50% year-over-year increase in earnings during the fiscal 2009 third quarter. The company is confident about its strong performance during the holiday shopping season and has lined up holiday themes focused on offering core products and seasonal gifts.

The Hershey Company (HSY) also posted strong profits during the recently reported quarter. The company is making the required consumer investments for the upcoming holiday shopping season.

WEAKNESSES

There are certain companies that are still facing the brunt of the recession and reporting losses in the retail business.

Home Depot (HD) witnessed severe stress from declining retail business market fundamentals during the quarter, with challenging macroeconomic environment and weakness in the U.S. housing sector. Total sales decreased 8.0% year-over-year to $16.4 billion, while overall same-store sales decreased 6.9%.

Similarly, Abercrombie & Fitch Co. (ANF) reported relatively weak third quarter 2009 results with a net income of $38.8 million or 44 cents per share compared to a net income of $63.9 million or 72 cents per share in the year-earlier quarter. The year-over-year decline in results was primarily due to the continued economic downturn plaguing the retail business industry that has resulted in reduced consumer discretionary income and a cut in non-essential spending.

Sears Holdings (SHLD) reported total revenues of $10.2 billion during fiscal 2009 third quarter compared to $10.7 billion in the year-earlier quarter. The decrease in year-over-year retail business sales was primarily due to a decline in comparable store sales partially offset by the effect of foreign currency translation. Domestic comparable store sales decreased 2.3% during the quarter, with the Sears Domestic division accounting for a 4.6% decrease partially offset by a 0.5% increase in the Kmart division.

The Sears Domestic division was negatively affected by the decline in the housing industry coupled with a decrease in home electronics products. Although Sears managed to reduce its quarterly loss year-over-year, it reported a second consecutive quarterly loss for its retail business during the fiscal 2009 third quarter.Zacks Investment Research

Cephalon Settles Barr Challenge – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 20:01:31 +0000

Earlier this month, Cephalon Inc. (CEPH) announced that it has settled its patent infringement case with Barr Pharmaceuticals, which is now owned by Teva Pharmaceutical (TEVA). Barr was looking to market a generic version of Cephalon’s cancer pain management drug, Fentora.

As per the terms of the agreement, Barr has been granted a non-exclusive, royalty-free right to sell a generic version of Fentora in October 2018. However, if a generic version of Fentora enters the market prior to that date, Barr will be allowed to launch its generic version provided the other generic company does not enjoy marketing exclusivity. According to Cephalon, Fentora’s patent is not set to expire before 2019.

While we are pleased to hear about this settlement agreement with Barr, we note that another major generic player, Watson Pharmaceuticals (WPI), is also seeking to bring a generic version of Fentora to market.

A delay in the entry of generic competition would provide Cephalon with more time to develop Fentora for additional indications such as breakthrough pain and neuropathic pain, which would expand the market significantly.

Cephalon’s pain management franchise has been under significant pressure ever since generic competition for Actiq, the leading pain franchise product, entered the market in late 2006. While Amrix, also a Cephalon product, is performing well, we believe the pain franchise will remain under pressure going forward.

Competition for Fentora has increased with the entry of a new player, BioDelivery Sciences’ (BDSI) Onsolis. Meanwhile, Actiq could potentially face additional generic competition later this year/early next year. Finally, Amrix is also facing patent challenges.

We currently have a Neutral recommendation on Cephalon. We expect investor focus to remain on Cephalon’s emerging oncology pipeline, Amrix, and the conversion of patients to Nuvigil.
Read the full analyst report on "CEPH"
Read the full analyst report on "TEVA"
Read the full analyst report on "WPI"
Read the full analyst report on "BDSI"
Zacks Investment Research

Tough Times for Putin’s Popularity

Robert Amsterdam — Wed, 25 Nov 2009 20:01:04 +0000

Some poll numbers and commentary from Nikolai Petrov:Public trust in the work of Putin fell from a peak of 72 percent in mid-October to 65 percent on November 22, the lowest point since March, according to weekly poll figures posted...

Raven Beats, Retains Weak Outlook – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 19:46:58 +0000

Last week, Raven Industries Inc. (RAVN) reported fiscal third quarter results. The company posted earnings of 40 cents per share, beating the Zacks Consensus Estimate of 38 cents. However, quarterly earnings were 13% lower than last year due to the impact of economic downturn on the company’s top-line.

Quarterly sales declined 20% to $60.2 million from $75.5 million in the year-ago quarter due to lower sales at three of its four segments.

The Engineered Films Division reported a 30% decline in sales to $18.7 million, reflecting continued weakness in two of its major end markets (construction and energy). The company managed to partially offset the impact of lower sales by focusing on cost controls and productivity improvements in the division.

In the Applied Technology Division, sales fell 19% to $21.0 million due to lower volumes driven by uncertain economic conditions. Despite a cautious near-term outlook for farm equipment, Raven is pursuing opportunities to expand its market share in precision agriculture.

During the reported quarter, Raven acquired Ranchview Inc., a privately held Canadian start-up company. Ranchview develops products that use cellular networks instead of radio systems that are typically used to deliver RTK (Real Time Kinematic) corrections to GPS enabled equipment. The company said that this product line is a natural extension and fits well with Raven’s strategy of improving the movement and use of data in agriculture. This acquisition is expected to contribute to Raven’s earnings in fiscal 2010.

Further, Raven Industries Inc. and SST Software Inc. have announced that they would build on their strategic alliance, with Raven buying a minority ownership position in SST. Earlier, in the second quarter, Raven and SST announced a strategic alliance to provide customers with simple, more efficient ways to move and manage information in the precision agriculture market.

In the Electronic Systems Division, sales of $15.7 million for the quarter were down 13% compared to the prior-year period due to lower sales volumes, unfavorable product mix, and a supply chain breakdown. Airlines have delayed or pushed back orders to aircraft manufacturers due to weak passenger traffic and shipping volumes.

Quarterly sales in the Aerostar segment were up 9% at $5.4 million due to higher U.S. Army parachute sales. In October, Aerostar won a $12.2 million five-year, IDIQ (indefinite delivery indefinite quantity) contract for the production of US Army T-11 personnel parachutes. With the MC-6 Special Forces parachute contract coming to an end in January 2010, the T-11 contract came in at a good time for the company. The $12 million generated over the next year from T-11 will replace the MC-6 revenue and help Aerostar's operating income, margins and overall profitability.

With three out of four segments facing a bleak near-term outlook, we expect Raven’s sales to remain at distressed levels over the next few quarters.
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Zacks Investment Research

Durable Goods Orders Drop – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 19:31:17 +0000

Durable Goods Orders Drop

In October, new durable goods orders fell by 0.6%, partially reversing a 2.0% rise in September, which in turn was a partial reversal of a 2.7% decline in August. Year to date, new durable goods orders are 23.0% below the level for the first ten months of last year.

If we exclude the extremely volatile Transportation sector, new durable goods orders fell 1.3% after rising 1.8% last month. Transportation equipment includes jetliners, and one new order for a 787 from Boeing (BA) can easily swamp lots of new durable goods orders for smaller ticket items. It was mostly the Boeing order book that partially saved the day for total new durable goods orders, as orders for non-defense aircraft surged by 50.8% in the month. Last month they were up a modest 1.1%, but in August they plunged 44.0%.

Clearly if you want to make heads or tails out of this data, it is a good idea to exclude the Transportation sector. The first graph (from http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/durord.htm) shows total new orders for durable goods on a year-over-year basis. While we are still deep in negative territory, it looks like we have turned the corner (note that the graphs do not include this month’s data, however; October 2008 was an awful month for new orders, so when updated the graphs should show further improvement).

However, most of the decline stems from fewer new durable goods orders from the Pentagon, another area that can be very volatile from month to month. Excluding defense, new durable goods orders actually rose by 0.4% in October after rising 1.8% in September and falling 2.7% in August. Regardless of what you include or exclude, though, on a longer-term year-to-date basis, the numbers are still very ugly, and show that we have a lot of ground to make up.

Excluding Transportation, year-to-date orders are down 20.4%, and excluding defense, orders are down 24.4%. Defense is in fact the only area to see an increase in durable goods orders on a year-to-date basis, with total defense capital goods orders up 1.0% and defense aircraft orders up 8.8%. Non-defense aircraft orders, on the other hand, are down 59.4% on a year-to-date basis, even including the huge surge this month.

In a positive sign for the economy, new durable goods orders for non-defense capital goods -- a very good proxy for business investment spending on equipment and software -- rose by 1.2% in October following a 3.2% increase in September. On a year-to-date basis, though, they are down 27.6%. Still it shows that business investment might be starting to come back.

However, that number does include the non-defense aircraft, since planes are the main capital good of an airline. If aircraft are excluded to get to what is known as "core capital goods," orders fell by 2.9% in October, reversing a 2.6% increase in September, and down 21.0% on a year-to-date basis. The second graph, (also from http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/durord.htm) shows the history of core capital goods spending. As with total orders, it looks like we have turned the corner, but have a lot of ground to make up.

One area that has seen solid increases in durable goods orders for each of the last three months is primary metals, which are sort of at the base of the food chain, and might be signaling better times ahead. In the short term it is good news for firms like Alcoa (AA), U.S. Steel (X) and Freeport McMoRan (FCX). This month they rose by 3.6%, following increases of 2.6% and 1.2% in September and August, respectively.

That area, though, has an especially large amount of ground to make up, as even with the increases in durable goods orders for each of the last three months, orders are still down 39.6% on a year-to-date basis. Three months in a row of solid gains makes it look like the rebound is a trend, and not a short-term aberration, though.

On the other hand, Computer orders, which had held up reasonably well on a year-to-date basis -- down "just" 15.1% year to date -- have started to turn south, dropping in two of the last three months. In October they dropped by 7.2%, following a 0.3% increase last month and a 3.1% decline in August. Thus, the high tech rebound might be less robust than many have been hoping for.

All in all, I would rate this durable goods orders report as a negative -- not a disaster, but not nearly as positive as the other economic reports that we got today.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market beating Zacks Strategic Investor service.
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Zacks Investment Research

Boston Scientific’s New Product – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 19:31:05 +0000

Boston Scientific Corp. (BSX) recently received 510(k) clearance from the U.S. Food and Drug Administration (FDA) and CE Mark approval to market its WallFlex Fully Covered Esophageal Stent in the U.S. and Europe. The new product is used for the treatment of malignant esophageal strictures (obstructions) caused by tumors in patients with resectable or non-resectable esophageal cancer.

With the new approval, Boston’s complete portfolio of WallFlex Stent family of self-expanding metal stents is now available in the U.S. , Europe and other international markets. The company had earlier received approval for marketing the WallFlex Partially Covered Esophageal Stent in U.S. and Europe in 2008.

The WallFlex Fully and Partially Covered Stents prevent tumor ingrowth by using a proprietary Permalume silicone covering. This also reduces the impaction of food. It is seen that patients suffering from esophageal cancer may have difficulties in swallowing, even while consuming liquids. The WallFlex Esophageal Stent prevents this by re-establishing patency (openness) of the esophagus. This in turn makes life easier for patients.

We think that the unique features of the WallFlex Fully Covered Stents are likely to make them widely acceptable amongst surgeons. This will boost demand for these stents which will increase the company’s top-line.

Boston Scientific is a manufacturer of medical devices and products used in a broad range of interventional medical specialties. The company faces significant competition across its product portfolio. The primary competitors include Johnson & Johnson (JNJ), Medtronic Inc. (MDT), Abbott Laboratories (ABT) and St. Jude Medical Inc. (STJ).
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Xinyu Hengdeli To Open 30 New Stores In Greater China In 2010

China Retail News — Wed, 25 Nov 2009 19:30:43 +0000

Hong Kong-listed luxury watch retailer Xinyu Hengdeli has announced plans to open at least 30 new stores in Greater China in 2010. According to Zhang Yuping, the chairman of Xinyu Hengdeli, the company has achieved its goal of opening 20 new stores in Greater China in 2009 and the company currently has 250 retail outlets in [...]

Sanofi Expands REGN Agreement – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 19:14:00 +0000

Sanofi-Aventis (SNY) recently extended and expanded its antibody collaboration with biopharmaceutical company, Regeneron Pharmaceuticals, Inc. (REGN). The companies had initially entered into a collaboration agreement in 2007, which was scheduled to expire in 2012.

Under the extended agreement, Sanofi will increase its annual funding commitment by $60 million to $160 million from 2010. Moreover, the agreement will now extend through 2017 with Sanofi having the option to extend the program for an additional three years.

The companies are looking to move four-five antibodies into clinical development every year. In addition to using its VelocImmune technology, Regeneron will also utilize its next generation technologies related to antibody generation for the development of antibodies under the collaboration.

Under the existing collaboration, four VelocImmune human antibodies are in clinical development, and the companies have filed for permission to move a fifth antibody into clinical development.

The extension of the agreement is in-line with Sanofi’s goal of focusing on new approaches to strengthen its R&D portfolio. Sanofi has been looking at several options to grow revenues given the high exposure of many of its leading franchises to generic risk. The generic risk to Lovenox is the most concerning and, if it were to materialize, would cause significant problems for Sanofi. Meanwhile, Plavix continues to face generic erosion in some parts of Europe.

Sanofi is looking to grow revenues through partnering deals and acquisitions in order to help plug revenue holes left by patent expirations. The recently concluded third quarter saw the company entering into licensing and collaboration agreements with Merrimack and Wellstat Therapeutics. Sanofi also signed an agreement to acquire French pharmaceutical company, Fovea.

Sanofi has also been focusing on the highest growth and most promising development programs. We expect Sanofi to continue look to contain operating costs in order to grow earnings in the face of weakening sales of some of its biggest products.
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Zacks Investment Research

Is Russia Experiencing a Change of Heart on Iran?

Robert Amsterdam — Wed, 25 Nov 2009 19:13:07 +0000

Writing at the New Republic, Michael Crowley scrounges deep down in the evidence bin for an argument on Russia's Iran policy:In recent weeks, Barack Obama's foreign policy has been derided by critics who say he has almost nothing to show for his first 10...

Emerson Beats Zacks Consensus – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 18:59:41 +0000

Emerson Electric Co. (EMR) reported fourth-quarter earnings per share from continuing operations of 67 cents per share, higher than the Zacks Consensus Estimate of 60 cents.

Sales for the fourth quarter ended September 30, 2009 of $5.3 billion, a decrease of 21% from the $6.7 billion for the same period last year. Underlying sales in the quarter declined 20%, which excludes a 2% unfavorable impact from currency exchange rates and a 1% positive impact from acquisitions. Sequentially, fourth quarter sales improved 4.6% versus the third quarter, showing revenue stabilization for the second consecutive quarter.

Process Management sales decreased 13% in the fourth quarter versus the prior year quarter. This included a 13% underlying sales decline, a 3% unfavorable impact from currency translation and a 3% favorable impact from acquisitions.

Industrial Automation sales were down 36% in the fourth quarter, compared to the fourth quarter of 2008. Underlying sales decreased by 37%, the System Plast and Trident Power acquisitions added 3% and currency subtracted 2%.

In the fourth quarter, Network Power reported a sales decline of 22%, with underlying sales down 20% and currency and acquisitions subtracting 1% each.

Climate Technologies sales decreased 10% in the quarter, moderating from higher percentage declines in the previous two quarters. Underlying sales declined 10%, currency subtracted 2% and acquisitions added 2%.

Sales in the Appliance and Tools segment decreased 22% in the quarter, with consumer related product demand continuing to show signs of stabilization.

Gross profit margin improved 110 basis points compared to the prior year quarter, and 200 basis points over the third quarter of 2009. Pretax earnings margin for the fourth quarter was 12.3% versus 14.9% in the fourth quarter of 2008 and 10.7% in the third quarter of 2009.

In fiscal 2009, operating cash flow was $3.1 billion and capital expenditures were $531 million, resulting in strong free cash flow (operating cash flow less capital expenditures) of $2.6 billion. Cash and equivalents were $1.8 billion with long-term debt at $3.3 billion and shareowners’ equity at $9.1 billion.

Underlying sales for fiscal 2010 are expected to be down 5% to 7%. First quarter underlying sales are expected to be down 17% to 20%. Operating profit margin for fiscal year 2010 is expected to be flat to slightly down.

Emerson Electric Co., a diversified global technology company, engages in designing and supplying product technology and delivering engineering services to various industrial and commercial, and consumer markets worldwide. The company operates through five segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools. The company was founded in 1890 and is based in St. Louis, Missouri. Major competitors include ABB Ltd. (ABB), General Electric Co. (GE) and Hitachi Ltd. (HIT).

We currently have a Neutral recommendation on EMR.
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Zacks Investment Research

Zacks.com featured expert Kevin Matras highlights: Nelnet, Inc., Nu Skin Enterprises, Inc., Perrigo Company, Tech Data Corp. and Williams Partners L.P. – Press Releases

Kevin Matras — Wed, 25 Nov 2009 18:57:50 +0000

Chicago, IL – November 25, 2009- Kevin Matras goes over a Relative Price Strength Screen for all markets. Stocks in this week’s article include Nelnet, Inc. (NYSE: NNI), Nu Skin Enterprises, Inc. (NYSE: NUS), Perrigo Company (NASDAQ: PRGO), Tech Data Corp. (NASDAQ: TECD) and Williams Partners L.P. (NYSE: WPZ).

Screen of the Week written by Kevin Matras of Zacks Investment Research:

Over the last few weeks, I have found myself screening for stocks with the best Relative Price Changes in an effort to determine whether a stock is good or not.

Of course earnings growth and valuations are important. But if a stock is simply not responding, or worse, going down, something's wrong. Or at the very least, it's just simply not ready to move higher.

Using the relative price strength will always put the outperformers on your list in both good times and bad.

In this week's screen, I'm looking for relative price change winners that also have the fundamentals to potentially make these gains continue into the future.

For the rest of this Screen of the Week article, please visit Zacks.com at: http://www.zacks.com/commentary/12861/

Start looking for value stocks in new ways with this week's screen. Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don't wait for the market to get better before you decide to do better. Start learning how to be a better trader today: http://at.zacks.com/?id=5529

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=5531

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Zacks Investment Research

Spending Growth Rises as Inflation Seems Manageable to Fed Despite Job Market

QualityStocks — Wed, 25 Nov 2009 18:47:38 +0000

Several recent data points indicate consumer confidence is on the mend, promising signs of an economic recovery. The Commerce Department reported today a 0.7% rise in consumer spending for last month, which is a good turnaround from the 0.6% decline in September. With income also up 0.2%, marking the second month of rising income, and [...]

PPL Plant Granted License Approval – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 18:44:52 +0000

Recently, PPL Corp.’s (PPL) Susquehanna nuclear power plant received a 20-year extension of the operating licenses for both reactors at the plant. The Nuclear Regulatory Commission (NRC) approved extension of the license for Unit 1 to 2042 and for Unit 2 to 2044.

NRC’s decision to extend the licenses is based on thorough safety and environmental reviews of PPL's application submitted in September 2006. NRC’s review process included a series of public meetings, onsite inspections, written requests for extra information from the staff, and an additional review by the Advisory Committee on Reactor Safeguards, which is an independent body of nuclear technical experts that advises the NRC commissioners.

After three years of intensive review, the NRC concluded that no safety or environmental concerns would prevent license renewal and that PPL had effectively demonstrated the ability to manage the effects of aging on plant equipment and systems.

Renewal of the licenses also means PPL Susquehanna will continue to generate well-paying jobs and a high level of community involvement and support.

PPL Corp. is working towards increasing electricity generation at the Susquehanna plant through its four-year project, which began in 2008 and will extend till 2011. The project focuses on improved and cost-effective generation of electricity from existing sources that emit no greenhouse gases. The bi-unit plant produces enough electricity to power about 2 million homes.

The Susquehanna plant, located in Luzerne County about seven miles north of Berwick, is owned jointly by PPL Susquehanna LLC and Allegheny Electric Cooperative Inc. and is operated by PPL Susquehanna.
Read the full analyst report on "PPL"
Zacks Investment Research

Long Term Evolution (LTE): How to Join the Race for the Next Dominant Broadband Technology

Investment U — Wed, 25 Nov 2009 18:35:47 +0000

Long Term Evolution (LTE): How to Join the Race for the Next Dominant Broadband Technology by Sheena Martin, Contributing Editor Wednesday, November 25, 2009 Over the past five years, an incredible new technology has gained momentum and is set to make its debut imminently. And as always, early investors are likely to enjoy the greatest [...]

Allot Loss Narrows – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 18:29:29 +0000

Allot Communications Ltd. (ALLT) reported loss from continuing operations of 4 cents per share, compared to the Zacks Consensus Estimate of a loss of 11 cents per share. This excludes the impairment of auction rate securities from the GAAP operating loss.

Total revenues for the third quarter of 2009 reached $10.8 million, a 10% increase from the $9.8 million of revenues reported in the third quarter of 2008 and an 8% increase from the $10.0 million of revenues reported in the second quarter of 2009.

Allot's growth continues to be driven primarily from its leadership position in the mobile market. Since the time the company initially announced the frame agreement with a Tier 1 mobile operator group, it has received an additional $7.6 million in orders, bringing total orders from this customer to approximately $12.6 million to date. Ability to provide a solution that enables mobile operators to meet the rapidly increasing demand for data services, coupled with its expertise in implementing complex, large scale projects have been key factors for Allot's success in this market.

During the quarter, the company received initial orders for its new Sigma and AC-5000 products and concluded 11 large deals with service providers, of which 2 represented new customers and 9 represented expansion deals. The AC-5000 provides an optimal solution for bandwidth maximization and managed services for both large enterprise and small service providers.

Cash, cash equivalents, deposits and investments in marketable securities totaled $52.8 million. Shareowners’ equity was $60 million with no long-term debt.

Allot Communications Ltd. provides Internet protocol service optimization solutions for DSL, wireless and mobile broadband carriers, cable operator service providers, and enterprises in Europe, the Middle East, Africa, the Americas, Asia, and Oceania. The company, utilizing its deep packet inspection (DPI) technology, transforms broadband pipes into smart networks that create the visibility, security, application control, and subscriber management to manage Internet service delivery and guarantee quality of experience (QoE). Major competitors are Blue Coat Systems Inc. (BCSI) and Cisco Systems Inc. (CSCO).

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FDIC Fund in the Negative – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 18:22:20 +0000

In its quarterly report on the banks, issued on Tuesday, the Federal Deposit Insurance Corporation (FDIC) said that the deposit insurance fund used to protect customer accounts dropped by $18.6 billion during the third quarter of 2009 to a deficit of $8.2 billion, while banks earned only $2.8 billion as loan defaults continued to hurt bank balance sheets. The agency said that the decline in the insurance fund was due primarily to an additional $21.7 billion set aside by the FDIC during the quarter for additional bank failures.

While the state of the economy is showing signs of recovery, there are lingering concerns related to the banking industry. As the industry has to tolerate bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures.

In the third quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 552 from 416 in the second quarter. This is the highest since 1993. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost about $100 billion over the next four years.

In order to replenish the depleting fund, the FDIC board recently mandated the U.S. banks to pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government as soon as it is necessary to replenish the deposit insurance fund. The FDIC also has access to the Treasury Department credit line of up to $500 billion.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of bank failures has significantly stretched the regulator’s deposit insurance fund.

Most of the taxpayer-provided money was provided to financial institutions through the Troubled Asset Relief Program (TARP) as these are the backbone of the economy, and they were the primary victims of the recession. However, we continue to see more bank failures, with the tally reaching 124 so far this year. During the third quarter alone, 50 institutions failed, bringing the total number of failures in the first nine months of 2009 to 95.

The failure of Washington Mutual last year was the largest in U.S. banking history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), BB&T Corporation (BBT) and Regions Financial (RF).

According to the FDIC, banks set aside $62.5 billion to cover deteriorating loans during the third quarter, down 7.1% from the prior quarter. Though current signals indicate that the economy may stabilize, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "JPM"
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Zacks Investment Research

Virgin Media Opt for TiVo Platform – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 18:13:16 +0000

Virgin Media Inc. (VMED), the UK 's leading entertainment and communications company, has entered into a strategic agreement with TiVo Inc. (TIVO) under which the latter will develop next-generation TV platform for Virgin Media that will support broadband video services and applications. However, financial term of this deal has not been declared so far.

Virgin Media is systematically upgrading its content delivery network to support large-scale IP traffic. For that the company is desperately trying to introduce hybrid transport gateways that can manage RF and IP-based video content. TiVo will develop a converged television and broadband interactive interface for Virgin Media's upcoming next generation high definition set top boxes. Virgin Media will introduce the new set top boxes in mid-2010.

Under the mutually exclusive agreement, TiVo will become the exclusive provider of middleware and user interface software for Virgin Media's next generation set top boxes. On the other side, Virgin Media will become the exclusive distributor of TiVo services and technology in the U.K.

In our view, Virgin Media is in the early stages of a turnaround, poised to generate strong free cash flow and improved EPS in fiscal 2010. A new management team is re-branding the product, formerly notorious for poor customer service, and rolling out digital services to expand ARPU, reduce churn and slow its market share drain from the onslaught of new entrants into the company’s markets.

Recent financial results reflected the nascent turnaround of Virgin Media, with growth in net subscribers and revenue generating users. The company had 37,000 net new additions to its television service, and 39,000 net new additions to its broadband offering. It added a net 8,100 cable customers. We believe collaboration with TiVo will enable Virgin Media to offer next-generation high-speed TV and broadband services in the U.K.
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FDA Nod for Gen-Probe Assay – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 17:57:50 +0000

Recently, Gen-Probe Inc. (GPRO) announced that it has received the green light from the U.S. Food and Drug Administration (FDA) to market ProParaflu Plus assay. The assay, developed by Prodesse, a wholly-owned subsidiary of Gen-Probe, is a molecular test for detecting and differentiating parainfluenza 1, 2, and 3 viruses that cause lower respiratory tract infections.

The assay makes use of real-time polymerase chain reaction to identify parainfluenza 1, 2, and 3 viruses from nasal swabs. Since it utilizes the same internal control as Prodesse's other tests for respiratory infectious diseases, a single nucleic acid extract can be tested with any combination of its other products which have received FDA clearance - ProFlu Plus, Pro hMPV Plus and ProFlu-ST.

As a reminder, ProFlu Plus received FDA approval in 2008 for detecting and differentiating influenza A and B viruses and respiratory syncytial virus (RSV). Pro hMPV Plus got FDA clearance in the same year to detect human metapneumovirus. ProFlu-ST is available for use under an FDA emergency use authorization in CLIA (Clinical Laboratory Interstate Act) high complexity laboratories for the diagnosis of 2009 H1N1 influenza virus.

We believe that the addition of ProFlu Plus to Gen-Probe’s already established product portfolio of molecular tests for respiratory infectious diseases further enhances its reputation in the field of molecular diagnostics. It will aid doctors in the accurate identification of parainfluenza virus infections, particularly when the prevalence of other viruses is on the higher side. Management further stated that results from tests using the company’s assays can be obtained within three hours as against a week taken by culture-based methods to come out with a result.

Gen-Probe Inc., a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid testing (NAT) products that are used for the diagnosis of human diseases and for screening donated human blood. The utilization of the NAT technology has enabled the company to obtain FDA approvals for more than 40 products that detect a wide variety of infectious microorganisms such as strep throat, pneumonia and fungal infections. The company competes with players like Abbott Laboratories (ABT) and Roche (RHHBY).
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New Home Sales Rise! – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 17:57:16 +0000

In a very positive sign for the economy, new home sales rose by 6.2% in October to a seasonally adjusted annual rate of 430,000. This far exceeded consensus expectations for an annual new home sales rate of just 404,000. While new home sales are just a small fraction of total homes sales -- on Monday, it was reported that Existing Homes Sales were at an annual rate of 6.1 million -- new home sales pack a much bigger punch for the economy.

That is because they feed right into residential investment, which is a direct componenet of GDP. The economic effect of existing home sales is indirect and more muted, and mostly related to the fact that people tend to redecorate after they move into a new (for them) place. The rise in October new home sales also put new home sales in positive territory on a year-over-year basis for the first time in a long, long time. The first graph below (from http://www.calculatedriskblog.com/) is based on the actual, not seasonally adjusted new home sales numbers. On that basis, the last time we saw a year-over-year increase in new home sales was December 2005, so this is quite the milestone.

However, the increase in new home sales was not widespread regionally. All of the increase and then some came from the South, which is by far the largest of the four regions when it comes to housing. There, sales surged by 23.2% on the month and were up 8.4% year over year. As a result, Dixie was responsible for 56.7% of all home sales in October, up from 48.9% in September.

New home sales fell in every other region of the country for the month. Worst hit was the Midwest, where new home sales plunged 20.0% and are now 11.1% below year-ago levels. The Northeast and the West both registered 5.1% declines on the month in new home sales. On a year-over-year basis, the West is doing slightly better, with new home sales up 8.4% while in the Northeast new home sales are up 5.7% from a year ago.

In even better news, inventories dropped by 4.4% on the month to 239,000, and are down by 37.1% from a year ago. Combined with the faster sales pace, this has dropped the months supply metric down to 6.7 months from 7.4 month in September -- and from 11.1 months a year ago. This puts us with in spitting distance of a normal level of inventories relative to sales, which is about 6 months.

During the bubble years inventory levels tended to hover around 4 months, but I doubt that we will be returning to those levels. In January, that metric topped out at 12.4 months as sales hit their low for the cycle on a seasonally adjusted basis of just 329,000. That puts new home sales up 30.7% from the bottom. That is a very nice rebound, but it was off a very low base.

New home sales peaked in mid-2005 at an annual rate of almost 1.4 million. It will be a very long time before we see those levels again. On the other hand, the big homebuilders like Lennar (LEN) and D.R. Horton (DHI) have been very cautious on starting new homes. In October, starts fell by 10.6% and were down 30.7% year over year. If these companies continue to be cautious, we might get back down to that 4.0 months of supply level sooner than I think.

Still, in the third quarter, residential investment turned into a net positive for GDP growth after 15 consecutive quarters of being a drag on growth. It looks like it is off to a good start for adding to growth in the fourth quarter as well.

Historically, housing starts and new home sales have been a key driver in pulling us out of recessions. While given the low base, the percentage gains could look very strong, the absolute level of new home sales is likely to stay low relative to history.

As the third of the graphs from http://www.calculatedriskblog.com/) shows, even with the rebound in new home sales, we are still at around the lows set in previous downturns. My best guess is that we will get back to about the 600,000 level for new home sales by the end of 2010. That will be a major factor in making 2010 a positive economic growth year, but will leave us far below the boom levels in new home sales. That seems to be about the normal level over time for the country, although the population has been growing over the time covered by the graph.

Still, the huge spike is housing during the boom years managed to pull forward demand for many years. Demand that has been pre-satisfied does not get pent up.

This was a very good report on a very important part of the economy.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market beating Zacks Strategic Investor service.
Read the full analyst report on "LEN"
Read the full analyst report on "DHI"
Zacks Investment Research

General Dynamics Bags Army Contract – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 17:42:10 +0000

General Dynamics Corp. (GD) received a $2.2 billion contract from the U.S. army to supply 724 light armored vehicles to Canada. The U.S. Army TACOM Life Cycle Management Command, in support of the U.S. Army Security Assistance Command (USASAC), has awarded the contract to General Dynamics Land Systems, Canada. General Dynamics Land Systems is a business unit of General Dynamics. The contract was signed through the Canadian Commercial Corporation, a Crown Agency of the Canadian Government.

Vehicles provided under this contract will be the LAV II version, a 300 horsepower 8x8 vehicle with a gross vehicle weight of up to 32,000 lbs (14,500 kg). The vehicles will be produced in 10 different variants. Vehicle deliveries are set to begin in the month of April 2011.

The contract will maintain the status quo of the Combat Systems segment to be the revenue growth leader in the first nine months of fiscal 2009. The segment’s organic growth rate was 22% in the recent quarter and 17% in the first nine months of fiscal 2009.

The multibillion dollar contract also maintained its brisk pace in order booking of General Dynamics. In the recent quarter, the company took the total backlog to $66.2 billion, compared to the $60.5 billion figure in the year-ago quarter.

General Dynamics engages in mission-critical information systems and technologies; land and expeditionary combat vehicles, armaments and munitions; shipbuilding and marine systems; and business aviation. The company operates through four segments − Information Systems & Technology (IS&T), Combat Systems, Marine Systems, and Aerospace.

We view General Dynamics as a well-run company that is likely to continue to deliver on expectations driven by strong revenue growth, margin expansion and cash flow generation. Strong defense outlays should further improve the company’s outlook for shareholders while an increasing funded backlog and an improving balance sheet signal additional positive factors for the company. We maintain our Neutral recommendation on the shares.
Read the full analyst report on "GD"
Zacks Investment Research

Spending Up, Savings Rates Down – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 17:35:33 +0000

In October, personal income rose by 0.2%, the fourth month in a row of increases. Disposable personal income, or income after taxes, increased by 0.4% -- also the fourth consecutive rise. This induced people to open up their wallets and spend.

Personal consumption expenditures rose by 0.7%, reversing a 0.6% decline in September. The September decline was largely a hangover from the end of the Cash for Clunkers program. In August, at the height of the program, personal spending surged 1.3%.

The bigger increase in spending than in disposable income means that the savings rate went down, falling to 4.4% from 4.6% in September. As the graph below (from http://www.calculatedriskblog.com/) shows, savings rates have risen dramatically during this recession, but it started at such a low level that it is still far below where it has been for most of our post-war history. Recently, though, savings rates started to head back down.

Declining savings rates will help economic growth in the short term, but in the long-term it is disastrous to have low savings rates. It is sort of like having a Thanksgiving feast, but doing so using your seed corn. You are full and bloated now, but will be starving in the future. In absolute numbers, personal savings rate were annualized at $490.3 billion, down from 510.4 billion in September.

Thus the best position to be in is to have high but falling savings rates. Unfortunately, the laws of mathematics tell you that such a situation cannot continue indefinitely, but as long as savings rates are going down, the economy gets an artificial boost. If you start with high enough initial savings rates, the process can continue for a long time.

A very good argument could be made that a big part of our economic growth, not just for the last decade, but for the last three decades, has been due to a secular decline in savings rates. The long decline in savings rates has corresponded with an increase in the consumer as a percentage of GDP to an all-time record of 71.08% in the third quarter.

Back when savings rates peaked in the third quarter of 1981, the consumer represented only 61.82% of the economy. If we cannot generate enough savings domestically to fund investment, we have to import the savings. This is the flip side of the trade deficit.

Over that same time period, net exports as a percentage of GDP moved from -0.24% to -2.82% in the third quarter. The low point for net exports was the fourth quarter of 2005 when it hit -6.13%. The decline in savings rates since May seems to be playing a role in the recent economic rebound.

Normally savings rates will rise during a recession and then fall as the economy recovers. However we are exiting this recession with the need to still further increase savings rates. This will be one of the key reasons why this economic rebound will be far more muted than previous recoveries, particularly recoveries from previous deep recessions.

Instead, worldwide growth is likely to be led by countries that have room to reduce their savings rates. Chief among those is China, where personal savings rates are north of 40%. Over time, Chinese consumption will grow, and U.S. consumption will remain stagnant or even decline, even as U.S. income recovers as we try to rebuild our savings.

Investments that benefit from the rise of the Chinese consumer are going to be very big long-term winners. Unfortunately, most of the big Chinese ADR’s are not particularly consumer focused. One good way of playing this trend, though, is through the Claymore China Small Cap ETF (HAO), which has the highest exposure to the consumer sectors of any Chinese ETF. Wal-Mart (WMT) also has a growing presence in China, but is far from a pure play there. While in the short term, U.S. based retailers have pared inventory to very low levels and might do OK this Holiday season, in the long term, the need to increase savings rates will act as a brake on their growth.

The destruction of housing equity has put even more pressure on individuals to boost their savings rates, although the rebound in the stock market since March has eased the pressure somewhat. Still, people save because they want to be able to consume in the future, and those needs such as retirement or a child’s education have not gone away -- just the money people thought they had to fund those needs have.

For too long, people substituted asset appreciation for actual savings (spending less than you earn). When assets started to depreciate instead of appreciate they were left without the funds to meet those future needs. People would consume first, and then pay later -- in other words, consumer-based on debt.

Now consumer credit is contracting, and the credit card companies like Capital One (COF) and American Express (AXP) face mounting delinquencies. The asset appreciation also funded outright consumption rather than just being a substitute for putting money in the bank. Houses were treated like they came equipped with an ATM as the newest kitchen appliance. During the housing boom, mortgage equity withdrawal regularly exceeded 6% of disposable personal income. That game is over and it is not likely to come back.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market beating Zacks Strategic Investor service.
Read the full analyst report on "HAO"
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Zacks Investment Research

Nokia-Siemens Suffers Setbacks – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 17:24:42 +0000

Nokia Siemens Network, the 50-50 joint venture between Nokia Corp. (NOK) and Siemens AG (SI) continues to suffer setbacks one after one. Severe economic recession has forced the telecom carriers to significantly reduce their capital expenditures and network upgrade plans throughout the world. This situation has resulted in a huge fall in the top-line of almost all the major telecom equipment manufacturers globally. However, we believe Nokia Siemens Network (NSN) is suffering the major part of it.

The company is the second largest telecom infrastructure developer of the world with 20% market share. Despite this, it has a very limited presence in the most lucrative North American markets. NSN first tried to enter this market in a big way by means of purchasing the lucrative CDMA assets of now bankrupt Nortel Network. But it lost the game to the world’s largest telecom infrastructure developer L.M. Ericsson AB (ERIC), which commands 32% of global market.

In November 2009, NSN again bids for Nortel’s Metro Ethernet Network assets but failed to the higher bids provided by Ciena Corp. (CIEN). Successive failure of NSN for two major network assets of Nortel has raised serious doubt regarding the company’s near-term business potential in the North American region.

Meanwhile NSN failed to clinch a deal with Telenor ASA (TELN) in Norway for the latter’s strategic network upgrade contract. Telenor will replace its entire mobile infrastructure in Norway with radio access equipment from Huawei Technologies Co. Ltd. Proximus, the mobile services wing of Belgian telecom operator Belgacom SA is the latest addition to NSN’s pathetic performance. Proximus plans to replace its entire radio access networks across GSM, UMTS, as well as LTE, with Huawei Technologies' SingleRAN base stations. The base stations that will be replaced are from NSN.

Telecom infrastructure and related services market is likely drop by 5% -10% in 2009 compared to the previous year. Management of NSN has already predicted that the company will lose its global market share more than that was earlier estimated. In the third quarter of 2009, the company generated Euro 2.8 billion in revenues, down 21% year over year and also down 14% sequentially. Gross margin was 28.2%, compared to 30.8% in the same quarter of the previous year. Operating loss was Euro 1.2 billion compared to an operating loss of Euro 1 million in the prior-year quarter. In the same quarter, the company expensed Euro 908 million as goodwill impairment.
Read the full analyst report on "NOK"
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Read the full analyst report on "ERIC"
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Read the full analyst report on "TELN"
Zacks Investment Research

OM Group Enters Oversold Territory – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 17:17:54 +0000

OM Group Inc.’s (OMG) share price has entered into oversold territory with a stochastic value of 17.77. Analysts have been increasing their estimates on the company’s full-year earnings, sending the Zacks Consensus Estimate up by 32 cents over the past month to 85 cents per share. OM Group is a Zacks #2 Rank (“Buy") company.
"OMG" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Bearish MACD for Outdoor Channel – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 17:12:56 +0000

Outdoor Channel Holdings Inc.’s (OUTD) MACD indicator has moved into bearish territory with a reading of -0.1741. The Zacks #4 Rank (“Sell") stock declined more than 2% to $5.93 in afternoon trade. The Zacks Consensus Estimate on the company’s full-year earnings has reduced by 2 cents over the past month to 9 cents per share.
"OUTD" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Jacobs Grabs Another Contract – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 17:09:35 +0000

Jacobs Engineering Group Inc. (JEC) received a contract from a major oil and gas company for engineering of its thermal facility located near Lac la Biche, Alberta, Canada. However, the contract value is not disclosed.

Jacobs will perform EDS and detailed engineering and procurement services for the 40,000 barrel-per-day in-situ oil sands central processing facility. Engineering activities will begin in December 2009 with 40% or more of the engineering executed from Jacobs' Mumbai, India, office.

This project is expected to strengthen the company’s position as a leader in the in-situ industry. Jacobs is one of the world's largest and most diverse providers of technical, professional, and construction services.

With annual revenues exceeding $12 billion, Jacobs is one of the world's largest and most diverse providers of technical, professional and construction services. Its major competitors are Foster Wheeler AG (FWLT) and Fluor Corp. (FLR).

The company’s diversification in terms of markets, geography and services will continue to facilitate future growth. Moreover, Jacobs’ cost focus puts it in a dominant position to expand margins under difficult economic circumstances.

Jacobs is among those infrastructure stocks that may benefit from the coming construction boom. Looking forward, as banks get healthy and are willing to lend and the next round of stimulus begins, investors can expect infrastructure projects to increase. Looking ahead, management expects full-year 2010 earnings per share to be in a range of $2.00 to $2.60.
Read the full analyst report on "JEC"
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Zacks Investment Research

Armstrong World Enters Oversold Territory – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 17:05:59 +0000

Armstrong World Industries Inc.’s (AWI) share price has entered into oversold territory with a stochastic value of 16.80. The Zacks Consensus Estimate on the company’s full-year earnings has increased by 30 cents over the past month to $1.42 per share. Armstrong World Industries is a Zacks #1 Rank (“Strong Buy") company.
"AWI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

DrStockPick.com Stock Report! 11/25/09, JPM, PSFT, SCOR, WWPW, HON, GTWO

Dr. Stock Pick — Wed, 25 Nov 2009 16:59:03 +0000

Bullish MACD for Spartech – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 16:58:40 +0000

Spartech Corp.’s (SEH) MACD indicator has crossed over to bullish territory with a reading of 0.0651. The Zacks #1 Rank (“Strong Buy") stock increased more than 1% to $11.50 in morning trade. The Zacks Consensus Estimate on the company’s earnings for the year ending October 2010 has climbed 4 cents over the past month to 82 cents per share.
"SEH" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Hormel Foods’ Heartening Results – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 16:54:39 +0000

Yesterday, Hormel Foods Corp. (HRL) reported heartening performance for the fourth quarter and fiscal year 2009.

During the fourth quarter of 2009, the company reported EPS of 77 cents, up 54% from 50 cents per share in the same quarter of 2008. It was also above the Zacks Consensus Estimate of 52 cents per share. However, revenues decreased 10% year over year and reached $1.68 billion. Volume was also down 3% from the fourth quarter of 2008.

Part of this substantial decrease is attributable to the planned reduction of turkeys at Jennie-O Turkey Store segment, decreased sales revenue due to lower commodity prices in pork and turkey complexes, greater promotional spending, continuing weak food service sales environment, the loss of Carapelli Olive Oil sales and some additional intentional product rationalization.

Grocery Products operating profit was up 12% year over year; while volume and revenue was down 7% and 12% respectively. Refrigerated Foods operating profit was up 23%; volume was up 1%, however sales was down 9%. Jennie-O Turkey Store operating profit was up 6%, while volume was down 6% and sales was down 10%. Specialty Foods operating profit was up 9%, volume was down 8% and sales were down 12%.

During full year of fiscal 2009, EPS of $2.53 was up 22% from $2.08 per share in 2008. Revenue of $6.53 billion was down 3% from 2008. Overall volume was down 3%. Grocery Products operating profit was up 9% from 2008, while volume was down 3% and sales were down 2%. Refrigerated Foods operating profit was up 7%. However, volume was down 1% and revenue was down 2%. Jennie-O Turkey Store operating profit was up 11%, while both volume and sales were was down 3%. Specialty Foods operating profit was down 2%, volume was down 12% and sales were down 11%.

Having returned to more normal earnings growth levels this year, management is confident in its ability to continue to enhance the bottom line. The company intends to tackle the challenge of a continued weak economy and reduced consumer spending, and expect to restore top-line growth on an annualized basis in 2010. Thus, the company expects EPS to be in the range of $2.63 to $2.73 in the fiscal 2010 up from a previous view of $2.60 to $2.70. The company also said it now expects to make $1 billion in operating cash flow for the year, versus a prior expectation of $850 million to $900 million.
Read the full analyst report on "HRL"
Zacks Investment Research

HCEI, Healthy Coffee International Projects Seven Figure per Month Sales by November 2010

Dr. Stock Pick — Wed, 25 Nov 2009 16:48:21 +0000

Raytheon Bags Navy Contract – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 16:37:57 +0000

Raytheon Company (RTN) bagged a $241 million U.S. Navy contract to deliver open architecture software capability for the Zumwalt-class destroyer (DDG 1000). Under the contract, software development will support the integration of human-computer- interface components for the ship's engineering machinery controls and damage control systems.

Specifically, Raytheon will deliver computer graphical user interfaces and a technical data manager capability to control Zumwalt's ship propulsion, integrated power, auxiliary and damage control systems. The effort will also include support to land-based and shipboard testing of these subsystems.

Work on this contract modification will be performed at Raytheon’s Integrated Defence Systems Headquarters, Tewksbury, Massachusetts, and at the Seapower Capability Center, Portsmouth, Rhode Island.

The contract will boost the backlog of the Raytheon Integrated Defense Systems segment. In the recently reported quarter, segmental backlog was stagnant at $9.8 billion compared to $9.9 billion as of year-end fiscal 2008.

Raytheon is the one of the largest aerospace and defense companies in the U.S. It boasts of a well-diversified line of military products, including missiles, radars, sensors, surveillance and reconnaissance equipment, communication and information systems, naval systems, air traffic control systems and technical services.

We continue to view Raytheon as one of the best positioned among the large-cap defense primes due to its non-platform-centric focus, strong order bookings and order backlog, strong cash flow generation, and focus on shareholder value. We maintain our market Outperform recommendation on the shares. Defense contractors with significant exposure to high-cost platform programs include Lockheed Martin (LMT), Northrop Grumman Corporation (NOC), and General Dynamics Corporation (GD).
Read the full analyst report on "RTN"
Read the full analyst report on "LMT"
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Zacks Investment Research

Using Put Options: How to Grab Discounts and Instant Money Everyday

Investment U — Wed, 25 Nov 2009 16:20:23 +0000

Using Put Options: How to Grab Discounts and Instant Money Everyday by Lee Lowell, Stock and Commodity Option Specialist Wednesday, November 25, 2009: Issue #1145 Forget Black Friday. The stock market has 3,000 items on sale – and ready to give you cash back… instantly. Over the past few weeks, I’ve discussed how you could have sold [...]

Using Put Options: How to Grab Discounts and Instant Money Everyday

Investment U — Wed, 25 Nov 2009 16:20:23 +0000

First Solar Sells Solar Project – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 16:20:11 +0000

First Solar Inc. (FSLR) announced that it would sell the 21 MW solar energy project that it has developed and constructed in Blythe, California, to NRG Energy Inc. (NRG). First Solar will provide operations and maintenance services at Blythe under a long-term contract with NRG Energy. This is second sale by First Solar, recently in October 2009 the company sold a 20 MW solar power project in Ontario to the Canadian oil pipeline company – Enbridge Inc. (ENB).

Located in Riverside County about 200 miles east of Los Angeles, the Blythe project is California's first and largest utility-scale photovoltaic (PV) solar generation facility, and among the largest in North America. Construction on the project began in September 2009 and is expected to be fully completed by year-end fiscal 2009. Once fully completed, the Blythe project when will generate over 45,000 megawatt-hours of electricity annually. The solar generation reduces over 12,000 tons of carbon dioxide emission per year, the equivalent of taking 2,200 cars off the road. The construction of this project has created 175 green jobs.

Electricity from the plant will be sold to Edison International’s (EIX) subsidiary Southern California Edison under a 20-year power purchase agreement. California based utilities such as Edison International is spending big money to reduce greenhouse gas emission and adhere to California’s renewable portfolio standard. First Solar is also developing 1,300 MW of PV solar projects in California and the Southwest.

Based in Phoenix, Arizona, First Solar designs, manufactures and sells solar electric power modules using a proprietary thin film semiconductor technology. The company's solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. It sells its products to project developers, system integrators and operators of renewable energy projects primarily in Europe with a distinct focus on Germany. First Solar also focuses on designing and deploying commercial solar projects for utilities in the United States.

First Solar enjoys a distinct cost advantage over its peers due its reliance on low cost thin-film cells. However, the advantage is ebbing fast due to falling polysilicon prices. First Solar’s growth potential and that of the solar industry in the aggregate requires a prudent long-term focus on technological enhancements, capacity build-out and cost minimization. Balancing all the three aspects would be an uphill task. Competition in the field is becoming tougher day by day for U.S. solar players such as First Solar, who have missed out on Government doles unlike its Chinese counterparts including Suntech Power Holdings Company Ltd (STP) and ReneSola Ltd (SOL). We maintain our market Neutral recommendation on the shares.
Read the full analyst report on "FSLR"
Read the full analyst report on "NRG"
Read the full analyst report on "ENB"
Read the full analyst report on "EIX"
Read the full analyst report on "STP"
Read the full analyst report on "SOL"
Zacks Investment Research

Stock Guru Featured Company: Quasar Aerospace Industries, Inc. (QASP.PK)

QualityStocks — Wed, 25 Nov 2009 16:10:41 +0000

Quasar Aerospace Industries, Inc. is the holding company for a group of aviation related entities that strengthens the company through their union. Quasar is focused on retaining the individual corporate cultures of their wholly owned subsidiaries while reaping the synergistic benefit of their combined union. Quasar Aircraft Company (QAC) is a Nevada corporation owned by the [...]

Stock Bond Price Returns vs Total Returns

Richard Shaw — Wed, 25 Nov 2009 16:09:10 +0000

Price return is one thing, and total return is another. Most securities charts show price performance. Total return for yielding securities is greater than price return, because it considers both price changes and investment income. Because some securities are yielding and some are not, and because some securities have low yields while others have high yields, [...]

Human Genome Begins Trial – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 16:05:11 +0000

Recently, Human Genome Sciences, Inc. (HGSI) and Aegera Therapeutics announced the initiation of dosing in a phase I clinical trial to evaluate the safety and tolerability of its lead inhibitor-of-apoptosis protein (IAP), HGS1029, as monotherapy in patients with advanced lymphoid tumors.

An additional phase I clinical trial of the compound is being conducted to evaluate its safety and tolerability in patients with advanced solid tumors. Earlier in December 2007, Human Genome acquired exclusive worldwide rights (excluding Japan) to develop and commercialize HGS1029 and other IAPs from Aegera Therapeutics.

The primary objectives of the phase I open-label, dose-escalation study include the evaluation of safety and tolerability of HGS1029 as monotherapy in patients with advanced lymphoid tumors and selection of a recommended dose for further studies. In addition, secondary objectives include studying possible anti-tumor activity and determining the compound’s pharmacokinetic profile. The drug is to be administered as a 15-minute intravenous infusion once weekly for 3 consecutive weeks followed by a week off.

Although this is good news for the company, the candidate being in the initial stage has a long way to go before commercialization. Hence the company’s prime focus is towards the commercialization of its two lead drugs, Benlysta (belimumab), being developed with GlaxoSmithKline (GSK) for lupus and Zalbin (albinterferon alfa-2b) for hepatitis C. Both the candidates have successfully completed phase III development. While Human Genome plans to submit marketing applications for Benlysta in the US, Europe and other regions in the first half of 2010, the submission of global marketing applications for Zalbin has been planned to be done by the year end.

Earlier this month, Human Genome received a huge boost when Benlysta met its primary endpoint in BLISS-76, a pivotal phase III study, through 52 weeks. This is the second phase III trial in seropositive patients with systemic lupus erythematosus (SLE). Positive results from the first trial, BLISS-52, were announced earlier this year. However, the BLISS-76 study is in progress and will continue for 24 more weeks. Additional data will be available following completion of the full 76-week study period.

Even though we are optimistic about the prospects of Benlysta, which could be a blockbuster on approval, the product is not likely to receive approval before 2011. We maintain a Neutral rating on the stock.
Read the full analyst report on "HGSI"
Read the full analyst report on "GSK"
Zacks Investment Research

Stock Guru Featured Company: DecisionPoint Systems, Inc. (DNPI.OB)

QualityStocks — Wed, 25 Nov 2009 16:01:01 +0000

DecisionPoint is focused on developing enterprise wireless and mobile computing solutions for customers’ needs. In short, they bring the field workers into office in real time. Crucial information and transactions are immediately transmitted, improving accuracy and efficiency for the client. The enterprise mobile computing industry has standardized several key technologies over the past several years [...]

Wake Forest Bancshares, Inc. (WAKE) Reports Profitable Fiscal Year

QualityStocks — Wed, 25 Nov 2009 15:57:57 +0000

Wake Forest Bancshares, Inc. reported net income of $180,000, or $0.16 per share, in the fiscal year ending September 30, 2009. The bank earned $1.0 million, or $0.87 per share, in fiscal 2008. Wake Forest Bancshares, Inc. attributed the weaker results to lower net interest margins, and an increase in net charge offs due to [...]

Rahaxi, Inc. (RHXI.OB) Reports Increase in Hardware Revenue and a Reduction in Quarterly Loss

QualityStocks — Wed, 25 Nov 2009 15:56:00 +0000

Rahaxi Inc., an international card payments processor and technology company, today reported financial results for the three month period ended September 30, 2009. The company reported a significant increase in hardware-related revenues during that three month period. These revenues came in at $397,193 versus $163,273 in the prior period, an increase of about 143%. The company [...]

Medtronic Beats Zacks Estimate – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 15:48:19 +0000

Medtronic, Inc. (MDT) reported second-quarter of fiscal 2010 earnings per share of 77 cents, compared to the Zacks Consensus Estimate of 74 cents and the year-ago earnings per share of 67 cents.

Sales
Total revenues in the reported quarter increased 8% year over year to $3.838 billion. Growth was witnessed across all the seven business segments. Cardiac Rhythm Disease Management (CRDM) revenues increased 3% year over year to $1.278 billion, driven by strong demand for the company’s implantable cardioverter defibrillators (ICDs). Spinal revenues increased 4% year over year to $862 million. Growth was fueled by higher demand for Kyphon and Biologics products.

CardioVascular revenues increased 17% year over year to $696 million. An increase in revenues can be attributed to strong sales growth across the company’s Coronary, Endovascular and Structural Heart Disease divisions.

Higher demand for Medtronic’s Endeavor Drug-eluting Stent in Japan also fueled growth in this segment. Neuromodulation revenues increased 12% year over year to $384 million, primarily due to higher sales of Activa PC, RC Deep Brain Stimulation systems and InterStim Therapy.

Diabetes, Surgical Technologies and Physio-Control revenues also increased 10%, 5%, and 25% year over year to $300 million, $224 million, and $94 million, respectively.

On a geographic basis, U.S. sales contributed 60% of total revenues and increased approximately 5% year over year. International sales increased 12% year over year.

Margins
Gross margin in the reported quarter increased 70 basis points (bps) year over year to roughly 76.0%. Research and development expenses as a percentage of sales increased 50 bps year over year to 9.6%. Selling, general and administrative expenses as a percentage of sales declined 90 bps year over year to 34.5%.

Balance Sheet & Cash Flow
Medtronic ended the quarter with cash, cash equivalents and short-term investments of roughly $1.542 billion, a decline of approximately 8% in the first half of the fiscal year. The company had an outstanding long-term debt of $6.368 billion at the end of the second quarter. Cash flow from operations was $781 million for the quarter.

Outlook
Medtronic raised its earnings per share guidance for fiscal 2010. For the year, earnings per share are expected in the range of $3.17 to $3.22, compared to the prior guidance of $3.10 to $3.20. The company also reiterated its constant currency revenue growth forecast in the range of 5% to 8%.

Medtronic is one of the world’s leading medical technology companies, specializing in implantable and interventional therapy devices and products. The company’s main competitors are St. Jude Medical (STJ) and Boston Scientific Corporation (BSX).
Read the full analyst report on "MDT"
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Zacks Investment Research

NuEarth Corp. (NUEC.PK) Offering Clean Technologies and Products to meet Rising Environmentally Friendly Chemicals Demand

QualityStocks — Wed, 25 Nov 2009 15:48:04 +0000

NuEarth Corp. provides biodegradable products and clean technologies for various industries, including agriculture, agro-forestry, water and soil remediation, beach/dune restoration, water desalinization and energy conservation. The company’s technologies span a broad spectrum of applications, including agricultural supplement testing, qualification and certification, machine tool lubrication and cooling, soil enhancing, rehabilitation and reclamation, and road construction and [...]

11-25-09 Daily Small Cap Market News and Stock Highlights from SmallCapVoice.com

Stuart T. Smith — Wed, 25 Nov 2009 15:43:20 +0000

Stocks are lightly higher after stronger-than-expected data on the labor market The number of workers filing claims for jobless benefits fell by a surprisingly large amount in the last week to the lowest level in more than a year, the government said. In addition, U.S. personal spending rose 0.7 percent in October, while durable goods orders unexpectedly [...]

HZHI, Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products is Opening the Door to a Multi Million Dollar Industry for Horizon Health International

Dr. Stock Pick — Wed, 25 Nov 2009 15:41:25 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! ************************************************************** HZHI, Horizon Health International Corp., HZHI.PK Horizon Health International Corp. Enters Into an Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products, Opening the Door to a Multi Million Dollar Industry The market for mobility devices is [...]

Zacks Releases Four Powerful ”Buy” Stocks: DeVry Inc., Tupperware Brands Corporation, MicroStrategy Inc. and Jinpan International Limited – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 15:30:30 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Four free stock picks are being made available today on Zacks.com. The industry’s leading independent research firm highlights one Zacks #1 Rank Strong Buy or a Zacks #2 Rank Buy stock for each of the four main styles of investing: Aggressive Growth, Growth & Income, Momentum, and Value.

The four highlighted picks are: DeVry Inc. (DV), Tupperware Brands Corporation (TUP), MicroStrategy Inc. (MSTR) and Jinpan International Limited (JST).

Today, Zacks is promoting its ''Buy'' stock recommendations. Four daily picks are offered free at http://at.zacks.com/?id=5607

Zacks #1 Rank Stocks have nearly tripled the S&P 500 since 1988, producing an average annual return of +26%. Performance has been notable even during volatile and down times. For example, during the last bear market, 2000-2002, the market tumbled -37.6% – but Zacks #1 Rank stocks gained +43.8%.

Here is a summary of today's selected stocks that are now highly rated by Zacks:

Aggressive Growth – DeVry Inc. (DV)
DeVry Inc. continues to top estimates and the Zacks Consensus Estimate is on the rise.

Zacks Guide to Aggressive Growth Investing (free!): http://at.zacks.com/?id=4309

Growth & Income – Tupperware Brands Corporation (TUP)
Tupperware Brands Corporation stacks up well against the market, outpacing the S&P 500 by more than 150% over the past year. The company also continues to see a bullish Zacks Consensus Estimate.

Zacks Guide to Growth & Income Investing (free!): http://at.zacks.com/?id=4310

Momentum – MicroStrategy Inc. (MSTR)
MicroStrategy Inc. recently jumped higher after the company reported better than expected Q3 earnings. Estimates are also on the rise, with the next-year estimate projecting 13% earnings growth.

Zacks Guide to Momentum Investing (free!): http://at.zacks.com/?id=4311

Value – Jinpan International Limited (JST)
Jinpan International Limited is taking advantage of worldwide interest in wind energy as international sales rose 40% in the third quarter. The company is trading with a forward P/E of 11.67.

Zacks Guide to Value Investing (free!): http://at.zacks.com/?id=4312

How to Regularly Access Picks from the Zacks Rank Discovery for Free: http://at.zacks.com/?id=5607

Underlying the four free stock picks is a simple truth that first appeared in a Financial Analysts Journal article published in 1979. Leonard Zacks, a Ph.D. in Mathematics from M.I.T. found that "earnings estimate revisions are the most powerful force impacting stock prices." Zacks #1 Rank is awarded to a stock when analysts sharply upgrade their estimates of what the company will earn.

Today, Zacks is promoting its stock recommendations by offering four daily picks free to those who register at http://at.zacks.com/?id=5607

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

More Free Stock Picks

Each weekday, new Zacks #1 Rank or Zacks #2 Rank stock picks are released on the free email newsletter, Profit from the Pros. Investors are invited to register for their free subscription at http://at.zacks.com/?id=5642

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks.com

Aggressive Growth Stocks:
Contact: Bill Wilton
Phone: 312-265-9277

Growth & Income Stocks:
Contact: Alex Kolb
Phone: 312-265-9149

Momentum Stocks:
Contact: Michael Vodicka
Phone: 312-265-9226

Value Stocks:
Contact: Tracey Ryniec
Phone: 312-265-9232

Email: pr@zacks.com
Visit: www.zacks.com

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Zacks Investment Research

Omnicell’s New Product – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 15:30:15 +0000

Omnicell, Inc. (OMCL) recently launched a new product, Omnicell 14.0 with Anywhere RN, a software solution used in conjunction with Omnicell's automated medication dispensing cabinets to ensure safe, efficient and accessible medication management throughout the hospital. South Jersey Healthcare Regional Medical Center has already implemented the new product for its hospital.

Anywhere RN enables nurses to review medication orders from any hospital computer or workstation and select profiled medications for issue from an Omnicell automated dispensing cabinet. Nurses may also utilize the new product to record medication waste and queue return transactions. Anywhere RN is the industry’s first software solution to offer such facilities.

Anywhere RN substantially increases the nurses' ability to access patient medications in a safer and more efficient manner. This is evident at South Jersey Healthcare Regional Medical Center where time spent at the automated medication dispensing cabinet was lowered by 33%. The new product also optimizes patient safety by reducing the number of interruptions that occur during the medication administration process.

We think that the new product will increase Omnicell’s top-line. Omnicell is a leading provider of systems and software solutions, primarily focusing on end-to-end automation solutions for the medication-use process.

Omnicell’s products are primarily purchased by hospitals and nursing homes which are presently grappling with the current economic scenario of weak credit markets, rising expenses, higher unemployment, and erosion of wealth.
Read the full analyst report on "OMCL"
Zacks Investment Research

Warning! Warning! This is not good news

Andrew Snyder — Wed, 25 Nov 2009 15:22:27 +0000

pBaltimore #8212; (a href="http://www.todaysfinancialnews.com" target="_blank"TFN/a): Did you feel it? Just a couple of hours ago, you went into debt for another $106. You never signed any paperwork or agreed to it – a handful of unelected officials took care of that for you – but you’re now on the hook for at least another Franklin./p pEarlier today, the Treasury auctioned off yet another chunk of American debt. This time it offered seven-year bonds to the tune of $32 billion. In all, the nation will go in hock for yet another $118 billion this week. /p pIt may sound like a lot, but it’s just another busy week of financing Washington for Geithner and his crew./p pWhile so many of us in the financial punditry business#8230;/p

Nov 25: Initial Claims Below 500k – Economic Highlights

Zacks Market Commentaries — Wed, 25 Nov 2009 15:15:32 +0000

Initial Claims dropped down to 466,000 for the week ending 11/21, better than the expected decrease to 496,700, following a revised level of 501,000 from the previous week. This is the first week since January 3rd where weekly filings fell below 500,000. The 4-week moving average was 496,500, a decrease of 16,500 from the previous week’s revised average of 513,000. Seasonally adjusted insured unemployment from the prior week, ending on 11/14, was 5,423,000, a decrease of 190,000 from the preceding week's revised level. Seasonally adjusted insured unemployment rate from the week ending on 11/14, was 4.1%, down by 0.2% from the prior week.

Personal Income for the month of October increased significantly, by $30.1 billion during the month, or by 0.2%, as was expected, and currently stands at the $12,142.9 billion seasonally adjusted level, following a 0.2% increase in September. Net of taxes, Disposable Personal Income increased by $45.7 billion, or 0.4 percent, in October, compared with an increase of $21.3 billion, or 0.2 percent in September. With the increase in incomes, Personal Consumption Expenditures increased by 0.7%, up $47.2 billion, to a seasonally adjusted annual flow of $10,166.7, better than the expected increase of 0.6%, after a decrease to the same effect in September, revised upward from an originally reported 0.5% decrease. With the increase in spending higher than the increase in income, the Personal Savings Rate decreased to 4.4% in October, from its September level of 4.6%.

Durable Orders decreased by 0.6%, $1.0 billion, during October to $166.2 billion, contrary to the expected increase of 0.6% gain, following a 2.0% increase in September and a 2.6% decrease in August. Machinery had the largest decrease, by 8.0%, $1.9 billion, to $21.8 billion, after two consecutive monthly increases. Over the past 12 months, Durable Orders have dropped by 23.0%.

Upcoming Releases
ISM Manufacturing Index (12/01 at 10:00 AM EST)
Construction Spending (12/01 at 10:00 AM EST)
Pending Home Sales (12/01 at 10:00 AM EST)
Fed’s Beige Book (12/02 at 2:00 PM EST)

Zacks Investment Research

Shire Drug Seeks EU Nod – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 15:14:51 +0000

Shire plc (SHPGY) continues to make progress with its Gaucher disease candidate, velaglucerase alfa. The company recently submitted a marketing authorization application (MAA) to the European Medicines Agency (EMEA) for velaglucerase alfa for the treatment of type I Gaucher disease. The company has already asked for approval in other markets like the U.S. and Canada.

Shire is seeking an accelerated review of the MAA. Given the shortage in supply of Genzyme’s (GENZ) Cerezyme, which is the leader in the treatment of patients with Gaucher disease, the Committee for Medicinal Products for Human Use (CHMP) has accepted Shire’s request.

Accordingly, the review time has been reduced by 60 days to 150 days with the review scheduled to commence in December. Once approved and launched commercially, velaglucerase alfa will compete directly with Cerezyme. Shire is currently providing the treatment free of cost to patients. As a reminder, Genzyme is facing problems with the supply of Cerezyme due to the temporary shutdown of its Allston manufacturing plant. While manufacturing has resumed, Genzyme will be in a position to supply new lots of Cerezyme from late November.

In order to make up for the shortage in supply of Cerezyme, the U.S. Food and Drug Administration (FDA) had approached Shire and another company, Protalix Biotherapeutics Ltd. (PLX), to come up with treatment protocols for their Gaucher disease candidates. The FDA accepted both treatment protocols, which means that the drugs are available for the treatment of Gaucher patients prior to their commercialization.

We believe the temporary availability of velaglucerase alfa will give physicians the opportunity to become familiar with the product prior to its commercial launch. Moreover, positive results from a head-to-head study comparing velaglucerase alfa with Cerezyme could help the former gain share from Cerezyme.

While we expect a response from the European regulatory authority on the approval status of velaglucerase alfa in the first half of 2010, a response from the FDA should be out by Feb 28, 2010.
Read the full analyst report on "SHPGY"
Read the full analyst report on "GENZ"
Read the full analyst report on "PLX"
Zacks Investment Research

Initial Jobless Claims Plunge – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 15:01:16 +0000

Initial Jobless Claims Plunge

This week initial jobless claims for unemployment insurance plunged by 35,000 to 466,000. Actually, considering that last week’s number of initial jobless claims was revised down to 501,000 from 505,000, one could argue that the decline in initial jobless claims was more like 39,000. This brought the four-week moving average of initial jobless claims (a better number to watch due to the weekly volatility of the numbers) down to 496,500, a decline of 16,500.

We are now 162,250 below the peak for initial jobless claims set back in April for the four-week average. This is also the first time in over a year that the four-week average has fallen below the 500,000 mark.

Despite the improvement in initial jobless claims, as the graph below (from http://www.calculatedriskblog.com/) shows, we are still above the peak set in the last recession, and just about at the same level set at the peak of the 1991 recession. The good news though, relative to the last two recessions, is that the initial jobless claims numbers are showing no sign of forming a high plateau. That could have some very good implications for the job market.

However, the core of the problem in the labor market this time around is not that layoffs are that abnormally high, but that hiring is abnormally low. (See It's the Lack of Job Creation, Stupid!) and that once a job is lost, there is a much larger percentage than historically that it will have been lost for good, rather than a temporary layoff. (see Permanent vs. Temporary Lay-Offs).

The good news did not stop with the initial jobless claims data. Regular state level continuing initial jobless claims for unemployment insurance fell by 190,000 to 5.423 million. Those claims run out after 26 weeks. After that, people are moved to federally funded extended initial jobless claims (part of the Stimulus Package), so the continuing claims number does not tell the whole story.

Combining the two largest of the Federal programs, there are an additional 4.179 million people who are getting unemployment benefits. That figure, though, also declined this week, falling by 18,250.

Since the extended benefit program was recently extended, it seems that this is actual good news -- news that some people are actually finding new jobs, rather than simply running out of time for even the extended benefit program. That is very good news indeed. People with new jobs are going to have a much more upbeat view of the world. They are much more likely to go out and shop at Wal-Mart (WMT) or Target (TGT) this holiday season. From the point of view of the nation’s retailers, this news could not have come at a better time.

Still, this is no time to get complacent on the jobs front. We still have an unemployment rate of 10.2%, and as of October, we were still losing about 200,000 jobs a month. Further, once people have lost their jobs they are staying unemployed for longer than ever before, or at least since records of unemployment duration have been kept. (see More on Unemployment Duration). I’m sure it was worse in the Depression, but the data cannot tell us exactly how much worse.

Things are moving in the right direction, according to the initial jobless claims data. This is the best news we have seen on the employment front in a very long time, and gives us something to be thankful for tomorrow.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience, he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market-beating Zacks Strategic Investor service.
Read the full analyst report on "WMT"
Read the full analyst report on "TGT"
Zacks Investment Research

Happy Thanksgiving from the MarketClub Team

Trading School — Wed, 25 Nov 2009 15:00:50 +0000

Happy Thanksgiving from Bob, Brad, Lindsay, and Melissa - all part of the MarketClub team dedicated to helping you achieve your goals. On behalf of the MarketClub Team, we would like to extend a heartfelt ‘thank you’ for entrusting us with your business. .

Magna Bags GM Contract – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 15:00:00 +0000

Magna International (MGA) has reported that it has won a contract to make the new generation of frames for General Motors’ (MTLQQ) full-size light-duty pickups and sport utility vehicles despite their disputed relationship over the Opel deal. According to Magna, the new third generation of frames would replace GMT 900, which is the frame for Chevrolet’s Suburban, Tahoe and Silvarado models.

Magna will manufacture the frames at its Cosma unit in St. Thomas, Ontario, and the Saltillo plant in Mexico. The St. Thomas plant has been manufacturing frames for General Motors (hereafter, GM) since 1999 and the Saltillo plant currently builds the GMT 900. The Canadian auto parts maker has not disclosed the value of the deal. Magna’s relationship with GM has suffered over the former’s acquisition of the Opel/Vauxhall business in Europe from the latter.

GM had granted a preliminary approval to sell a 55% stake in Opel to Magna, backed by Russia’s Sberbank. However, the Detroit-based automaker scrapped the deal recently in order to retain the unit. GM had been in a dilemma while choosing Magna as the preferred bidder for Opel. The German Government preferred Magna as it had promised not to close any of the four Opel plants in the state.

The Magna deal was supported by a €1.5 billion ($2.15 billion) German Government-backed bridge loan. However, GM was afraid of losing Opel's technology to the Russian car industry. Thus, if Magna had won the deal, GM may have lost Russia’s increasingly important market for its models, such as Chevrolet. Secondly, it also feared losing the Opel engineers, who are integral to GM's overall strategy.

Magna and Sberbank were planning to manufacture Opel cars in Russia with the biggest automaker in the nation – Gaz Group – jointly owned by the tycoon Oleg Deripaska and Avtovaz (partly owned by France’s Renault).
Read the full analyst report on "MGA"
Read the full analyst report on "MTLQQ"
Zacks Investment Research

How and Why China Will Flood the Gold Market

Contrarian Profits — Wed, 25 Nov 2009 14:58:29 +0000

The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year's meltdown in the stock market, people believe it. After all, Chinese citizens don't receive government retirement money... and they don't have company pension plans like people in many other countries do.

Yes the future deficits are worrisome

James Hamilton — Wed, 25 Nov 2009 14:58:07 +0000

Paul Krugman ([1], [2], [3]) has been arguing vigorously that U.S. budget deficits are no cause for concern. I see things differently.

One of the arguments that Krugman makes is that, although the U.S. debt-to-GDP ratio is expected to double over a short period, the higher level would still be substantially below those currently observed in Italy and Japan, and only modestly above that of Belgium. Paul suggests that if these countries can run up debts of this magnitude without serious repercussions, so can the United States.

Source: Paul Krugman.

But European politics may not import all that well to this side of the Atlantic. Receipts of the U.S. federal government have never exceeded 21% of U.S. GDP, even at the height of World War II. A permanent move to taxation levels significantly above that would require a major shift in the political landscape, for which I see no consensus of support. To me that implies that any spending trajectory inconsistent with the long-established U.S. norm may be headed for a political brick wall.

Federal receipts and outlays as a percentage of GDP, 1970-2008 and 2009 estimates. Data source: OMB.

One of the ways I have suggested for personalizing this issue stems from the observation that $1 trillion is approximately the total personal income tax receipts collected by the U. S. federal government in 2006. So, to calculate what another trillion in deficits means for me personally, I take the amount I paid in federal income taxes that year and double it; $10 trillion in new debt will require 10 years at that higher rate to pay off. It's going to be a real problem for any politician who tries to service the growing debt burden by raising taxes. That's why I see troubles ahead for managing the federal cash flow.

But Paul feels I'm using an inappropriate metric:

Jim gets scary numbers about the debt burden by assuming that we'll have to pay off the debt in 10 years. But why would we have to do that? Again, the lesson of the 1950s-- or, if you like, the lesson of Belgium and Italy, which brought their debt-GDP ratios down from early 90s levels-- is that you need to stabilize debt, not pay it off; economic growth will do the rest.

Normally, you'd think that putting off repaying a debt does not make it any smaller. The federal government can (with my wallet) pay the trillion today, or it can wait 10 years to pay one trillion plus 10 years' interest, or wait 20 years to pay one trillion plus 20 years' interest. The present value of the service cost on one trillion dollars in debt is exactly one trillion dollars today, no matter how long you put off paying. My comments on how much a trillion really is are perfectly appropriate for discussion of any repayment timetable.

Perhaps Paul is suggesting that there may be a potential free lunch available from postponing payment in this case, arising from the fact that the economy's growth rate has historically exceeded the government's cost of borrowing. If I put off paying another year, with interest the amount I owe grows 2% in real terms, but my income grows 3%, so things get easier the longer I put it off.

Let me go on the record as favoring the consumption of truly free lunches. If everything the government buys really is free, then by all means, let's have them buy more, and more, and more, and rather than double my taxes, let's cut taxes all the way to zero. Unfortunately, I expect that Paul would agree with me that in fact there is a limit to just how much we can count on supersizing this particular happy meal. At least I know that he entertained such concerns, as Scrivener and Verdon note, when in March of 2003, Paul contemplated the implications of the debt-to-GDP ratio that was then reaching 40%:

we're looking at a fiscal crisis that will drive interest rates sky-high.... But what's really scary... is the looming threat to the federal government's solvency.

What I presume was producing Paul's concerns in 2003, and is giving rise to my concerns today as well, is the fact that the low cost of government borrowing relative to the economic growth rate-- which could produce the apparent free-lunch calculus-- is predicated on the historical political equilibrium, which Paul worried might not be continued after 2003, and I certainly worry might not be continued after 2009. Specifically, I would suggest that the low borrowing cost that the U.S. government traditionally faced was very much attributable to the responsible management of the debt. Once that responsibility becomes called into question, the U.S. will cease to enjoy that privilege. This kind of problem gets messier, not neater, the longer you put it off. And that's why you might not want to assume that an apparent free snack can be scaled up to an unlimited feast.

Which brings me to Paul's third argument:

Right now, however, the bond market seems notably unworried by deficits. Long-term interest rates are low; inflation expectations are contained (too well contained, actually, since higher expected inflation would be helpful). No problem, right?

Alas, I'm getting the sense that the Obama administration is intimidated all the same. We've got the president telling Fox News that he's worried about a double-dip recession if he doesn't reduce the deficit soon-- as opposed to the concern I and other have that he'll have a double dip if he doesn't provide more support. (And why is Obama talking to Fox News, btw?) And the buzz is that admin economic officials are telling him that the bond market needs to be appeased, even though rates are low.

This is truly amazing. It's one thing to be intimidated by bond market vigilantes. It's another to be intimidated by the fear that bond market vigilantes might show up one of these days, even though you're currently able to sell long-term bonds at an interest rate of less than 3.5%.

Paul is absolutely right that, at the moment, we're observing an amazing willingness of investors and foreign central banks to lend to the U.S. Treasury. On Monday the Treasury successfully auctioned $44 billion in 2-year notes paying the lowest yield on record, and last week the nominal yields on some bills on the secondary market actually turned negative-- people paying for the privilege of being able to lend to the government. So if the government were to borrow another dollar today, invest in anything with a positive rate of return, and repay the sum in two years, it would indeed be a great deal.

Those remarkably low yields at the moment in my mind are a result of a flight to safety. Many people are afraid to hold anything other than treasuries until there's some more clarity to the economic and financial landscape. It's not so much a market vote in favor of the U.S. Treasury as it is a market vote against everything else.

But the question before us is, what will the situation be another two years down the road, when the government will need to go back to bond markets to roll over the debt it issued on Monday along with new debt to cover the several trillion added to the federal debt between now and then? Krugman's position is that we should trust the term structure of interest rates to give us the answer. If markets anticipate an explosion of short-term interest rates a few years down the road, why is anyone today buying the longer term debt at such low yields?

If you thought that there is some chance that treasury yields will only rise slightly over the next few years, but also some risk of solvency problems and a panic flight from the dollar, what you might want to do is to take a long position in treasuries hedged with a long position in commodities. I agree with Paul that the long-term treasury yields are hard to reconcile with a market worried about the solvency risk. But I would add that the run-ups we've seen in commodity prices are hard to reconcile with a market sold on the deflation scare. What I see is investors buying both bonds and commodities, suggesting that people are spreading their money across a variety of strategies to be in position for several alternative scenarios from here.

Is it possible that some time within the next five years, the U.S. Treasury will run an auction in which there are not enough bids to roll over the debt? My answer is yes.

For other thoughtful perspectives, see Brad DeLong, Carlo Cottarelli, Dean Baker, Tyler Cowen, and Free Exchange.

According to Fed, Super-Low Rates Could Lead to a Speculative Bubble

QualityStocks — Wed, 25 Nov 2009 14:57:16 +0000

In an effort to fuel the nation’s economic recovery, super-low interest rates are not expected to be strong enough to decrease the unemployment rate, and according to the Fed, could feed a new speculative bubble. Not only could record-low interest rates lead to excessive risk-taking in the financial markets, but they could also cause consumers, [...]

Innovative Food Holdings, Inc. (IVFH.OB) Announces Record Sales for October – Management Comments on Third Quarter Results

QualityStocks — Wed, 25 Nov 2009 14:53:52 +0000

Innovative Food Holdings, Inc., in partnership with one of the largest foodservice distributors in the nation, providing the highest quality gourmet food products to professional chefs throughout the United States, recently announced recorded sales for October, totaling approximately $745,000. Sales in October reflect the best month of sales in Innovative Food Holdings’ operating history. Sam [...]

TAXS, TaxMasters, Inc. – Form 10-Q- Results for the Nine Months Ended September 30, 2009 Versus the Nine Months Ended September 30, 2008, Shows Revenues Increased 87.5%

Dr. Stock Pick — Wed, 25 Nov 2009 14:45:58 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday November 25, 2009 DrStockPick.com Stock Report! ************************************************************** TAXS, TaxMasters, Inc., TAXS.OB TAXS is the IRS tax relief company. Federal tax debt is serious and the IRS is a terrifying opponent for anyone with tax problems. TAXS deals with the IRS every day and they are familiar with [...]

D.R. Horton’s Loss Widens – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 14:45:00 +0000

D.R. Horton (DHI) has revealed a net loss of $231.9 million or 73 cents per share for the fourth quarter of its fiscal 2009 ended Sep 30, 2009, as the homebuilding industry faced several challenges such as rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence.

The loss was worse than the Zacks Consensus Estimate loss of 27 cents per share. However, the results were considerably better than $799.9 million or $2.53 per share reported in the same quarter a year ago. D.R. Horton generated a revenue of $1 billion during the quarter, lower than the year-ago level by 42%.

Homes closed totaled 4,810, compared to 6,961 homes closed in the same quarter of fiscal 2008. For the full year, D.R. Horton showed a net loss of $545.3 million or $1.72 per share compared to $2.6 billion or $8.34 per diluted share in fiscal 2008. Revenue for the fiscal plummeted 45% to $3.6 billion. Homes closed totaled 16,703 compared to 26,396 homes closed in the prior fiscal. D.R. Horton had cash and cash equivalents of $1.9 billion as on Sep 30, 2009.

The net homebuilding debt to total capitalization ratio stood at 36.3% at the end of the fiscal year. In fiscal 2009, D.R. Horton had a net cash flow from operating activities of $1.14 billion. Meanwhile, capital expenditures totaled $6.2 million during the period. D.R. Horton is the largest national builder, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.

The company’s operations are spread over 77 metropolitan markets in 27 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the U.S. We continue to recommend the shares of the company as Neutral.
Read the full analyst report on "DHI"
Zacks Investment Research

eDoorways Corp. (EDWY.PK) Announces Success of Social Media Marketing Campaign

QualityStocks — Wed, 25 Nov 2009 14:30:23 +0000

eDoorways Corp., a web-based consumer problem-solving gateway, lifestyle information source, and online business-to-consumer marketplace, announced today that it has exceeded 20,000 followers on its Twitter campaign. The company has plans to incorporate the use of Twitter and other social media outlets as part of its initial support strategy when the SOLVE doorway version “Beta 1.0″ [...]

Merck’s Relief in Texas – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 14:30:00 +0000

Although Merck (MRK) is aiming to close the Vioxx chapter, it is far from over. The company’s long list of cases is still pending. Recently, Merck received a favorable ruling in a district court of Texas. The judge dismissed all claims in a lawsuit related to Vioxx filed on behalf of the State of Texas that sought a refund for money spent on the drug and granted Merck's motion for summary judgment.

A summary judgment is a determination made by a court in a civil litigation, without a full trial. In addition to the Texas case, there are several other similar lawsuits filed by state attorney generals throughout the country. A similar trial filed against Merck by the Louisiana Attorney General is scheduled to begin in the federal court in New Orleans on April 2010.

Earlier this year, in another lawsuit, Merck had agreed to pay $80 million to settle 190 outstanding claims regarding Vioxx, a blockbuster drug that catered to a huge arthritis and pain-relief market for nearly five years in the US. Merck had to withdraw the drug from the market in 2004. The withdrawal followed a finding which revealed increased risk of heart attack for long-term users of the medicine.

In November 2007, the company agreed to pay $4.85 billion to settle several personal-injury lawsuits from former Vioxx users who held the drug responsible for causing heart attacks or strokes. Although the Texas decision is a relief for Merck, many investigations are still pending regarding Vioxx. Any unfavorable outcome of such lawsuits may affect the company’s financials.

Moreover, various researches have shown that heart risk associated with Vioxx could have been detected before the drug’s withdrawal from the market, had the data been openly available. We believe disclosure of such findings may make things more difficult for the company. However, we are Neutral on the stock.
Read the full analyst report on "MRK"
Zacks Investment Research

Company News for November 25, 2009 – Corporate Summary

Zacks Market Commentaries — Wed, 25 Nov 2009 14:24:47 +0000

• J Crew Group (NYSE:JCG) wowed investors with sharply better-than-expected third quarter earnings of 67 cents a share, versus 30 cents a year ago, and ahead of Zacks estimates of 58 cents a share. Revenues of $414.1 million exceeded last year's $363.1 million and beat projections of $406.6 million. The firm expects fourth quarter earnings of 37 cents to 42 cents a share

• Goldman Sachs (NYSE:GS) increased its six-month price target for Amazon.com (NASDAQ:AMZN) from $125 to $146, maintaining its "buy" rating. Goldman said it believed online discount wars have added to its traffic flow, generating revenue gains. Fourth quarter estimates were raised from $8.9 to $9.1 billion

• Piper Jaffray (NYSE:PJC) reiterated its "overweight" rating on Dollar Tree (NASDAQ:DLTR), lifting its price target to $60 from $57, its fourth quarter estimates to $1.38 from $1.30, and its 2010 projection to $3.82 from $3.71

• Tiffany (NYSE:TIF) reported better-than-expected earnings of 33 cents a share, 9 cents above Zacks projections, on revenues of $598 million versus Zacks estimates of $575 million. For 2010 the firm projected $1.88 to $1.98 a share versus estimates of $1.77

• Deere (NYSE:DE) reported fiscal fourth quarter earnings of 23 cents a share, 20 cents above Zacks projections, on revenues of $4.73 billion, which bested estimates of $4.44 billion. However, for 2010, the firm expects a sales decline of 1%

• TiVo (NASDAQ:TIVO) reported an inline third quarter loss of 6 cents on revenues of $56.9 million, ahead of the $48 million expected

Zacks Investment Research

Stock Market News for November 25, 2009 – Market News

Zacks Market Commentaries — Wed, 25 Nov 2009 14:22:33 +0000

U.S. stocks closed lower Tuesday, paring deeper losses, as economic concerns kept investors on tenterhooks. However, the markets managed to contain losses as a brighter forecast from the Federal Reserve assured investors about the sustainability of the recovery. Also, a weaker dollar helped shares of commodity-related and industrial companies.

The markets only gathered steam in the afternoon after the Fed released minutes from its latest meeting. While pledging to keep interest rates at record low levels, the Fed policymakers, however, noted record low interest rates could lead to excessive risk-taking in financials markets. Nevertheless, the Fed raised its outlook for economic growth during the second half of this year, but said unemployment levels will remain high. The Fed lowered its unemployment estimates to 9.3%-9.7% in 2010 from 9.5%-9.8%, noting the economy continues to improve.

On Tuesday, the Dow Jones industrial average fell 17.24 points, or 0.2%, to 10,433.71. The Standard & Poor’s 500-stock index fell 0.59 points, or 0.1%, to 1,105.65, and the Nasdaq composite index fell 6.83 points, or 0.3%, to 2,169.18. The CBOE Vix index dropped to its lowest in fourteen months, off 3.3% to 20.47. On the NYSE volume dropped to 0.952 billion shares, with declining issues ahead of advancing shares by an eight to seven margin.

Tuesday saw volatile and a low volume trading, a trend that is likely to continue through the holiday-shortened week. All financial markets are closed Thursday for Thanksgiving.

On Tuesday, healthcare companies helped offset drops in financial and industrial shares. Medtronic Inc. (NYSE:MDT) jumped more than 7% after the medical device maker reported a surprise 59% increase in its quarterly profit and raised its full-year outlook. Shares in the company rose $2.94, or 7.3%, to $43.25.

Among financial companies, JPMorgan Chase (NYSE:JPM) led the declining issues in the Dow average, falling 1.9% to $42.48. Bank of America (NYSE:BAC) fell 1.2% to $16.10, while Morgan Stanley (NYSE:MS) dropped 1.5% to $32.12. Fifth Third Bancorp (NYSE:FITB) fell 1.6% to $10.01.

Safe-haven assets such as Treasuries and gold prices rose. Treasuries performed well after the $42 billion auction in 5-year notes received a strong response. Gold prices hit a fresh record close for the eighth consecutive day, closing up $1.90 at $1165.50 per ounce.

Zacks Investment Research

China Gengsheng Materials (CHGS.OB) Renews Major Contracts with Three Steel Producers

QualityStocks — Wed, 25 Nov 2009 14:21:11 +0000

One company that has been catching the attention of small-cap investors is China Gengsheng Materials. China Gengsheng is known for developing and marketing a broad range of industrial material product and has grown into a market leader by offering state-of-the-art customized solutions. Today, the young company made the announcement that they have renewed full service contracts [...]

Manulife Buys Stake, Raises Equity – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 14:15:00 +0000

Manulife Financial Corporation (MFC) has agreed to purchase a 49% stake in ABN AMRO TEDA Fund Management Co. for US$156 million in cash. The joint venture will be named Manulife TEDA Fund Management Co. Ltd. It will offer traditional retail and institutional asset management services in the Chinese market. Established in 2002, ABN AMRO TEDA Fund Management currently has assets of US$3.8 billion under management.

The 51% stake is owned by Northern International Trust, part of Tianjin TEDA Investment Holding Co., a company owned by Tianjin city in China. Manulife expects to complete the stake purchase in the first quarter of 2010. The company also expects this transaction to add to its earnings in the first year.

Manulife is also bolstering its capital position with a $2.5 billion common equity raise. The company recently announced that it has agreed to issue common shares to a syndicate of underwriters for an aggregate price of C$2.5 billion (US$2.37 billion) at C$19 each in a "bought deal" public offering in Canada. Manulife also intends to retire roughly $1 billion of outstanding debt under its credit facility with Canadian chartered banks using other cash resources of the company.

We believe that the stake purchase and equity offering are a strategic fit. The buying of the 49% stake will help the company to expand its business significantly in China. This equity raise would enable the company to significantly strengthen its capital position and to have access to the highest level of capital since it went public. Additionally, the company would have the flexibility to make meaningful acquisitions and explore growth opportunities.
Read the full analyst report on "MFC"
Zacks Investment Research

NCR Rolls Out New Products – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 14:00:00 +0000

NCR Corporation (NCR) has introduced a patented two-sided thermal (2ST) printing technology standard, to be made available on all NCR SelfServ 20- and 30-series ATMs in North America. This is expected to strengthen NCR’s grip on the self-service ATM market in the region. Management expects the new two-side printer installations to double from the current installed base in retail, financial and other industries.

It also stated that the company had secured orders for installations of 2ST printer installations from many North American financial institutions. NCR is also installing the device for BNZ, one of New Zealand’s largest financial institutions.

This apart, NCR, in joint collaboration with Evolution Robotics Retail (ERR) announced that ERR’s LaneHawk, used by grocers to eliminate most losses from the basket, will come with NCR Advanced Checkout Solution (ACS) software and NCR SelfServ Checkout solution.

According to ERR, LaneHawk combines video along with some object recognition technology, which helps to identify items left in the bottom of checkout baskets during checkout. These items generally remain unnoticed and cause losses averaging $3,500 per lane each year.

Approximately 50,000 NCR ACS machines have been installed in different merchandise locations and the company expects that the enhanced version will generate greater demand. On the other hand, the third quarter results of NCR were not encouraging, as the company generated revenue of $1.14 billion in the quarter, a decline of 18.0% from $1.37 billion in the year-ago quarter.

The company also witnessed revenue declines across all its geographic regions. Results were negatively impacted by global economic conditions, which has negatively impacted the global financial services, retail and hospitality industries.

Although the company expects demand to strengthen in the near future, we feel that demand for these enhanced products will take time to rebound, as the financial institution and the retail industry players are resorting to aggressive cost control and delaying the adoption of any new technology.
Read the full analyst report on "NCR"
Zacks Investment Research

Muscle Flex, Inc. (MFLI.PK) Details Its Initial Television Media Advertising Campaign for the Beagle StepFit Pedometer

QualityStocks — Wed, 25 Nov 2009 13:55:22 +0000

Muscle Flex Inc. announced early this morning that it is providing investors with details regarding the initial television advertising campaign for the Beagle StepFit(TM) Pedometer. The initial test advertising campaign will begin on December 7 and run nationally over several cable stations. Muscle Flex plans to run 1 and 2 minute Beagle StepFit spots distributed [...]

Fed Gives Clear Message – Analyst Blog

Dirk Van Dijk — Wed, 25 Nov 2009 13:44:59 +0000

The minutes of the Federal Reserve meeting of November 3rd and 4th were released yesterday. The clear message of the minutes is that short-term rates are going to stay very low for a long time to come. Below is the summary of the participants' view of the economy, and my translation/commentary/analysis of it interspersed.

"In the meeting participants’ discussion of the economic situation and outlook, they agreed that the incoming data and information received from business contacts suggested that economic activity was picking up as anticipated, with output continuing to expand in the fourth quarter."

I agree that we will see positive economic growth in the fourth quarter -- perhaps not very robust growth, but it will be comfortably on the right side of zero.

"A number of factors were expected to support near-term growth: Business inventories were being brought into better alignment with sales, and the pace of inventory runoff was slowing; activity in the housing sector appeared to be turning up, and house prices seemed to be leveling out or beginning to rise by some measures; consumer spending appeared to be rising even apart from the effects of fiscal incentives to purchase autos; the outlook for growth abroad had improved since earlier in the year, auguring well for U.S. exports; and U.S. and global financial market conditions, while roughly unchanged over the intermeeting period, were substantially better than earlier in the year."

Changes in inventories were a substantial drag on growth in the fourth quarter of last year through the second quarter, but that started to turn around in the third quarter. In fact, except for the drawdown in inventories, economic growth would have been a positive 0.7% in the second quarter, rather than the negative 0.7% we saw. In the third quarter, rebuilding of inventories added 0.87 points of the 2.80 total growth. In other words, if inventories had remained unchanged, growth would have been less than 2.0%.

As for consumer spending, the rebound has been muted outside of autos, although it is up rather than down. Over the long term I’m not sure that's such a good thing, but for the time being we need the consumer to wake up.

The U.S. is not going to be leading the world out of this downturn, China is. However, economic growth is not a zero-sum game, and if places like China are growing, that is good for the U.S. economy. Even though the dollar has not changed relative to the Yuan, the falling dollar will still help our exports, since we are often competing against the Europeans and the Japanese when we sell into places like China. A week dollar makes Boeing (BA) more competitive versus Airbus, and General Electric (GE) well positioned relative to Siemens (SI).

"Above-trend output growth in the third quarter was a welcome development. Moreover, the upturn in real GDP appeared to reflect stronger final demand and not just a slower pace of inventory decumulation.

"While these developments were positive, participants noted that it was not clear how much of the recent firming in final demand reflected the effects of temporary fiscal programs to support the auto and housing sectors, and some participants expressed concerns about the ability of the economy to generate a self-sustaining recovery without government support."

Well, we learned yesterday that the output growth in the third quarter was closer to trend than above trend, but the Fed did not have that data at the time of the meeting. I share the concern about the ability of the economy to generate a self-sustaining recovery. We still need the training wheels. Without the stimulus, the economy would probably still be headed south.

"Nonetheless, participants expected the recovery to continue in subsequent quarters, although at a pace that would be rather slow relative to historical experience, particularly the robust recoveries that followed previous steep downturns. Such a modest pace of expansion would imply only slow improvement in the labor market next year, with unemployment remaining high. Indeed, participants noted that business contacts continued to report plans to be cautious in hiring and capital spending even as demand for their products increased."

The Fed members are masters of understatement. Normally when you have a sharp and deep recession, you have a big snap back. It is not unusual to see at least one quarter where growth exceeds 6% coming out of a recession. I see very little chance of that happening this time around. If we can sustain growth rates like we saw in the second quarter of 2.8% for all of 2010, I would count that as a major victory.

Coming out of previous recessions, the consumer was a much smaller part of the economy, and had room to expand. I don’t see that as the case this time, with the consumer at a record 71% of the economy. The savings rate was also much higher coming out of previous recessions,and had room to fall -- not true this time around. Business investment actually continued to fall in the third quarter, even as the rest of the economy was growing, mostly due to a 15.1% plunge in spending on non-residential structures. That alone shaved 0.55 points from economic growth.

Spending on Equipment and Software did pick up a little bit (up 2.3% in 3Q, adding 0.15 points to growth), and the software side of that could be helped by the new Windows operating system from Microsoft (MSFT).

"Nonetheless, economic growth was expected to strengthen during the next two years as housing construction continued to rise and financial conditions improved further, leading to more-substantial increases in resource utilization in product and labor markets."

Yes, housing will probably see some rebound, since it is near a record low share of the economy (set in the second quarter). However, we have too many housing units in the country, so it does not make a lot of sense to be building more of them. We need to see more household formation.

That means we need more jobs -- jobs that will get recent college graduates out of their parents' basements and into houses or apartments of their own. Jobs that will allow people who are now living on their friends' couches to get their own places. That presents a bit of a chicken-and-the-egg problem, since historically housing is one of the key areas lifting us out of recessions.

"Most participants now viewed the risks to their growth forecasts as being roughly balanced rather than tilted to the downside, but uncertainty surrounding these forecasts was still viewed as quite elevated. Downside risks to growth included the continued weakness in the labor market and its implications for income growth and consumer confidence, as well as the potential for credit availability to remain relatively tight for consumers and some businesses."

I still see the risks as being tilted to the downside, mostly for the factors that the Fed cites here.

"In this regard, some participants noted the difficulty that smaller, bank-dependent firms were having in securing financing. The CRE sector was also considered a downside risk to the forecast and a possible source of increased pressure on banks.

"On the other hand, consumer spending on items other than autos had been stronger than expected, which might be signaling more underlying momentum in the recovery and some chance that the step-up in spending would be sustained going forward. In addition, growth abroad had exceeded expectations for some time, potentially providing more support to U.S. exports and domestic growth than anticipated."

I suspect that with banks pulling in credit card lines, that the strength in consumer spending outside of autos (and autos was artificially helped by Cash for Clunkers) will prove to be ephemeral. I would also note that after the Fed meeting we got a downward revision to September retail sales and the October retail sales were decidedly mediocre.

I fully agree that the growth abroad is a major positive force for the U.S. economy. The weaker dollar will also be beneficial in that regard. However, the economy that seems to be leading the world out of this slump, China, seems most interested in importing basic materials. While there are many U.S. based firms that produce those materials, such as Freeport McMoRan (FCX), their actual operations are located mostly abroad, so the effect on the U.S. economy will be muted.

If, on the other hand, Chinese demand for steel leads to an increase in demand for iron ore from Vale (VALE) in Brazil, that might end up stimulating Brazilian demand for U.S. goods. So then, Chinese growth would have an effect on U.S. growth, even if some of it is indirect.

There is much more in the minutes, if you want to read them in their entirety, you can read them here.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience, he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market-beating Zacks Strategic Investor service.
Read the full analyst report on "BA"
Read the full analyst report on "GE"
Read the full analyst report on "SI"
Read the full analyst report on "MSFT"
Read the full analyst report on "VALE"
Read the full analyst report on "FCX"
Zacks Investment Research

Gold – getting in while the bull’s still hot

Contrarian Profits — Wed, 25 Nov 2009 13:36:39 +0000

Theo Casey, Investment Director of emThe Fleet Street Letter/em and member of emThe Right Side/em editorial team, discusses the merits of gold, the bull's run, and how to get in on the action.

DrStockPick.com Stock Report! Wednesday Nov 25, 2009 (Upgrades/Downgrades)

Dr. Stock Pick — Wed, 25 Nov 2009 13:32:00 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! ************************************************************** Stocks Upgraded Today Company Ticker Brokerage Firm Ratings Change Price Target Hospitality Props HPT Stifel Nicolaus Hold » Buy $22 Advisory Board ABCO First Analysis Sec Equal-Weight » Overweight $30 Vistaprint VPRT Citigroup Hold » Buy Energy XXI EXXI Jefferies & Co Underperform » Hold $1 » $2 Stocks Downgraded Today Company Ticker Brokerage Firm Ratings Change Price Target NRG Energy NRG UBS Buy » Neutral $33 » $26 Gran Tierra Energy GTE Wunderlich Buy » Hold $6 Lukoil LUKOY Citigroup Buy » [...]

Zacks Bull and Bear of the Day Highlights: MEMC Electronic Materials, Inc., Energy Transfer Partners, Ford, Whirlpool and Wal-Mart – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 13:31:53 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Zacks Equity Research highlights MEMC Electronic Materials, Inc. (WFR) as the Bull of the Day and Energy Transfer Partners (ETP) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ford (F), Whirlpool (WHR) and Wal-Mart (WMT).

Full analysis of all these stocks is available at http://at.zacks.com/?id=5506

Here is a synopsis of all five stocks:

Bull of the Day:

MEMC Electronic Materials, Inc. (WFR) produces the raw material wafers used by semiconductor manufacturers in the production of integrated circuits (ICs).

The decision to supply wafers to the solar industry paid huge rewards in 2007 and 2008, as demand for polysilicon raced ahead of supply. The Solar business and the 300mm business are both high-margin products. The spot price of polysilicon has been slashed from a peak of $400 per/kg to the $60-$70 per/kg range.

The stock is significantly undervalued. We are reiterating our Buy rating on the shares of WFR.

Bear of the Day:

Our Underperform recommendation on Energy Transfer Partners (ETP) units takes into account the bearish outlook for pipeline operators. While the partnership's liquidity position is sound, we continue to believe that the near- to medium-term outlook for its natural gas gathering and processing business remains weak.

Weighed down by these factors, Energy Transfer posted a third-quarter 2009 loss. The partnership's low growth and seasonal propane business also remain a major liability, in our view.

Given these headwinds, we expect Energy Transfer units to be under pressure in the medium- to long-term. The partnership's discounted valuation relative to the pipeline MLP group reflects its heightened risk profile.

CVAT, Cavitation Technologies Filed Three New PCT Patent Applications – Grass Roots Research Initiates Coverage With $2.04 Price Target

Dr. Stock Pick — Wed, 25 Nov 2009 13:25:11 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! ************************************************************** CVAT, Cavitation Technologies Inc, CVAT.OB CVAT is a “Green-Tech” company, established in 2006 to become a world leader in the development of new cutting edge technologies for the vegetable oil refining, renewable fuel, petroleum, water treatment, wastewater sanitation, food [...]

Zacks Analyst Blog Highlights: Salesforce.com, CA Inc., BMC Software, Microsoft and Oracle – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 13:16:38 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Salesforce.com (CRM), CA Inc. (CA), BMC Software (BMC), Microsoft (MSFT) and Oracle (ORCL).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Salesforce Partners with CA & BMC

Salesforce.com (CRM) entered into a number of strategic alliances that are expected to enhance the cloud computing service and solutions offered by it.

The first among these strategic alliances is with enterprise IT management company CA Inc. (CA). This partnership is expected to deliver agile development management in the cloud on the Force.com platform.

The CA Agile Planner on the Force.com site is targeted at small businesses and enterprises alike. The service is intended to accelerate development timelines while gaining control and visibility over all of the development initiatives. This innovative product will result in reduced time to market.

The second in the list is the agreement with BMC Software (BMC). This strategic alliance is expected to deliver BMC’s industry-leading IT management solutions on the Force.com platform. The joint offering is expected to address the overwhelming customer demand for critical service desk function and processes that are delivered through the cloud computing platform.

This new product is intended to help customers simplify and automate their IT process and at the same time fetch a quick return on their investment. These new collaborations are expected to help the company strengthen its position in the cloud computing market and attract additional customers by providing enhanced solutions.

Salesforce reported better than expected third quarter results, exceeding the Zacks Consensus EPS estimate. The company reported revenue of $330.5 million, an increase of 20.0% from the year-ago quarter and and over the guided range of $323-324 million. These encouraging numbers are illustrative of the fact that the company is constantly creating value for itself and its shareholders. We expect Saleforce to continue with the same trend going forward.

Although the company is growing exponentially in the cloud computing segment, Salesforce is expected to face stiff competition from big companies such as Microsoft (MSFT) and Oracle (ORCL).

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Zacks Analyst Blog Highlights: Citigroup Inc., Intuit Inc., ENI S.p.A, BP plc and Royal Dutch Shell – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 13:10:28 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Citigroup Inc. (C), Intuit Inc. (INTU), ENI S.p.A (E), BP plc (BP) and Royal Dutch Shell (RDS.A).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Citi Expects Strong Economic Growth

Citigroup Inc. (C) forecasts strong economic growth in many countries in 2010. But although the company expects several countries to experience economic growth, it predicts that the growth will be somewhat uneven.

According to the annual report of Citi’s Investment Research and Analysis group, though growth will be strong and even across major economies in the beginning of the year, it will be uneven later. Citi expects Asia, excluding Japan, to experience sustained economic growth. Though the U.S. is expected to see fairly strong economic growth, the recovery will be more gradual in Europe and Japan.

Citi also upgraded its 2010 gross domestic product forecasts for the U.S., Japan, the U.K., Australia, New Zealand, Hong Kong, Korea, Argentina, Hungary, Poland, the Czech Republic and Turkey.

The report also suggested that Central Banks are unlikely to hike key interest rates through the next year. However, credit availability is expected to remain restricted at least for a year or two as banks seek to raise additional capital under regulatory pressure. Also, inflation on a global basis appears to be controlled. Additionally, countries will need to achieve fiscal sustainability to post strong economic growth.

Disappointing Forecast at Intuit

Intuit Inc. (INTU) recently reported results for the first quarter. Revenues increased 2% to $493 million, driven by growth in core businesses.

Revenues from Financial Institutions segment increased 7% while Employee Management Solutions Payroll service increased 9%.

Loss per share came in at 10 cents, much better than the Zacks Consensus Estimate of a loss of 22 cents per share, mainly due to cost control activities undertaken by the management. The company had postponed some of its marketing costs for the quarter.

During the quarter, the company repurchased $300 million worth of stock in the quarter, and the board has now approved a new repurchase program of $600 million. Intuit ended the quarter with more than $1 billion in cash and investments.

Going forward, management expects revenues between $3.3 billion and $3.43 billion in fiscal 2010, up 4% – 8%. Earnings per share are projected between 29 cents and 32 cents. Revenues for the second quarter are projected between $800 million and $835 million, up 1% – 6%. Earnings per share are expected to come between 15 cents and 18 cents.

The forecast was much lower than the street estimates, leading to a 2% fall in share price after the results were announced. On the conference call, management stated that the company is yet to find a significant improvement in business sentiment among small business customers who use the company’s flagship products such as QuickBooks software and Turbo Tax programs.

ENI Buys Uganda Blocks

ENI S.p.A (E) entered into a definitive agreement with Heritage Oil to buy the latter’s 50% interest in blocks 1 and 3A in Uganda . Total consideration for the contract is $1.35 billion. The contract also provides an additional consideration of $150 million, either in cash or in kind, on fulfillment of certain conditions in the future.

The company was pursuing an approach of sustainable development through its expertise and technologies in the African continent. And this transaction is part of this development strategy.

Located in the Lake Albert basin, blocks 1 and 3A have resources of more than 1 billion barrels of oil equivalent. Of this, nearly 70% has already been discovered with approximately 28 wells drilled in the area. The agreement is subject to approval by the competent authorities.

Eni has been producing in the African continent for a long time. The company is currently acting as an operator in many oil-producing countries such as Angola, Ghana, Nigeria, the Republic of Congo, Gabon and Mozambique. Total production per day from these regions currently amounts to about 450,000 barrels of oil equivalent.

Eni’s upstream portfolio spreads over a number of fields in several countries. Its lower reliance on a handful of large fields, both in its existing portfolio and its future growth pipeline, is in contrast to the growth profile of BP plc (BP) and Royal Dutch Shell (RDS.A), both of which are heavily dependent on the delivery of a few key projects.

In addition, Eni’s lack of exposure in the refining and marketing space is also a significant positive in the current compressed margin environment, in our view. We, however, believe that all these positives are already reflected in its valuation. As such, we recommend a Neutral rating for the stock.

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Zacks Analyst Blog Highlights: Affiliated Computer Services Inc., Xerox Corp., Expedia Inc., Orbitz Worldwide and Priceline.com – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 13:00:53 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Affiliated Computer Services Inc. (ACS), Xerox Corp. (XRX), Expedia Inc. (EXPE), Orbitz Worldwide (OWW) and Priceline.com (PCLN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Settlement in Xerox-ACS Merger

Affiliated Computer Services Inc. (ACS) announced that the complaint filed by ACS shareholders regarding its merger with Xerox Corp. (XRX) has been resolved. The plaintiffs have temporarily withdrawn their motion for an injunction to block the deal.

The lawsuit was filed in October in Dallas County, Texas as Xerox was struggling to convince its shareholders to approve the deal.

The plaintiffs agreed to drop the lawsuit only if ACS’s Board of Directors received a better proposal than Xerox’s current bid and Xerox did not force ACS’s Chairman Darwin Deason to exercise his voting power in favor of the Xerox acquisition. The previous agreement called for Mr. Deason to cast half his votes in favor of the Xerox bid. He controls 44% of the votes at ACS.

Xerox has also decided not to force ACS to hold a shareholder meeting to vote on the Xerox transaction, and if requested by the Xerox’s shareholders ACS will terminate the Merger Agreement. Xerox also said that a pension fund has dropped a lawsuit over the purchase of ACS. However, a separate shareholder class action lawsuit is still pending in Delaware.

In September, Xerox agreed to acquire Affiliated in a cash and stock transaction valued at $6.4 billion ($63.11 per ACS share in cash and Xerox stock). Affiliated shareholders will receive $18.60 in cash and 4.935 shares of Xerox for each ACS share. Xerox will also assume $2 billion of ACS’s debt and issue $300 million of convertible preferred stock to ACS shareholders.

Downgrading Expedia to Neutral

We are downgrading shares of Expedia Inc. (EXPE) from Outperform to Neutral.

The company reported strong results in the last quarter, but continued to benefit from promotional inventories provided by its hotel partners. When results are stripped off the benefits of promotional activities, a softer demand environment could become evident.

We also do not expect the company to report better than seasonal sales growth in the current quarter.

The company has sacrificed booking fees this year, which is telling on the average daily rates (ADRs). Therefore, ADRs could be the metric to watch rather than room nights at this point of time.

We are also concerned about the incidence of transient occupancy taxes. Although municipalities and governments have decided that they will recover occupancy taxes from hotels if they lose out to online travel companies, we note that Expedia has already lost in Georgia and the company is slated to pay out $55 million to the City of San Francisco.

A fresh suit has now been filed by Florida, and for the first time the company has been charged under the Florida Deceptive and Unfair Trade Practices Act. Five Florida counties have decided to charge Expedia, as well as other online travel companies such as Orbitz Worldwide (OWW), Priceline.com (PCLN) and Travelocity for recovery of transient occupancy taxes. The company made a hefty provision in the June quarter, but we fear that this could be insufficient if the cases continue. Fines of this magnitude have the potential to develop into a constant drain on cash.

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Zacks Investment Research

Energy Investors: Investorideas.com Renewable Energy Stocks, Natural Gas Stocks Directory, Oil and Gas Stock Directory All Available in PDF Format

Dawn Van Zant — Wed, 25 Nov 2009 13:00:00 +0000

POINT ROBERTS, Wash., Delta B.C., November 24, 2009 - www.InvestorIdeas.com, a leading investor research portal specialized in sector investing, covering renewable energy, natural gas stocks and oil and gas stocks has created directories in all three sectors in PDF format for energy investors. The directories were previously only available in full by login access to Investor Ideas Premium Members.

U.S. Department of Energy Announces $24 Million Smart Grid Stimulus Grant Award to Beacon Power (Nasdaq: BCON)

Dawn Van Zant — Wed, 25 Nov 2009 13:00:00 +0000

TYNGSBORO, Mass - November 25, 2009 - Beacon Power Corporation (Nasdaq: BCON), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity

Cleantech Investing Tools, How to Play it Green

Dawn Van Zant — Wed, 25 Nov 2009 13:00:00 +0000

POINT ROBERTS, Wash., Delta B.C. - November 25, 2009 - www.InvestorIdeas.com, a leading online global investor resource, with a primary focus on environment, water and renewable energy investing, updates its green investor tools.

Green Investor News – Quantum Technologies (NASDAQ:QTWW) to Acquire Schneider Power (TSX VENTURE:SNE)

Dawn Van Zant — Wed, 25 Nov 2009 13:00:00 +0000

IRVINE, CALIFORNIA and TORONTO, ONTARIO - November 25, 2009 - Quantum Fuel Systems Technologies Worldwide Inc. (NASDAQ:QTWW) and Schneider Power Inc. (TSX VENTURE:SNE) today announced the signing of a definitive business combination agreement under which Quantum has agreed to acquire in a stock-for-stock exchange all of the outstanding common shares of Schneider Power.

Zacks Analyst Blog Highlights: Bank of America, MGIC, Fannie Mae, Freddie Mac and Hewlett-Packard – Press Releases

Zacks Market Commentaries — Wed, 25 Nov 2009 12:53:57 +0000

For Immediate Release

Chicago, IL – November 25, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Bank of America (BAC), MGIC (MTG), Fannie Mae (FNM), Freddie Mac (FRE) and Hewlett-Packard (HPQ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

Home Prices Continue to Rise

It is encouraging to see home prices rise. If this continues, some of the people in underwater houses (meaning with a mortgage more than the value of the house) might just see the flood recede and regain some positive equity in the house. This would greatly reduce the number of foreclosures in the future. It would make it an economically rational thing for people to pay their mortgages again. As it stands today in big areas of the country, it isn’t.

As a result, mortgage delinquencies have been skyrocketing, and eventually those delinquencies will lead to foreclosures. That could reignite a vicious circle, where the foreclosed houses flood the market, once again depressing prices, which causes more people to think there are better places to put their money than paying their mortgages.

Rising home prices have the potential to turn that into a virtuous cycle. To the extent that happens, it has very positive implications for the entire mortgage complex, from the big banks like Bank of America (BAC) to the mortgage insurance firms like MGIC (MTG) to the wards of the state, Fannie Mae (FNM) and Freddie Mac (FRE).

However, I fear that the increase in home prices is only temporary. That it is the product of extraordinary government efforts to prop up home prices, and that those efforts can not be sustained forever. These include the tax credit (recently expanded to include move up buyers), which is scheduled to end at the end of April, and the Fed’s program of buying up $1.25 Trillion in mortgage-backed paper to manipulate mortgage rates lower. They should finish up their purchases by the end of March.

HP Revenue Down, EPS In-Line

Hewlett-Packard (HPQ) reported fourth quarter EPS of $1.14, exceeding the Zacks Consensus Estimate by a penny.

Revenue for the quarter came in at $30.8 billion, a decrease of 8.0% from the $33.6 billion reported in the year-ago period and down 5.0% on constant currency basis.

Revenue fell across all businesses, including servers and data storage systems, software, PCs and printers. The Americas reported a 3.0% decline in revenue to $13.6 billion. Revenue declined 17.0% in Europe, the Middle East and Africa (EMEA) to $11.7 billion and 1.0% in the Asia Pacific to $5.4 billion. Revenue from China increased more than 20% from the year-ago quarter.

International markets accounted for 64% of total revenue in the fourth quarter, with revenue in the BRIC countries (Brazil, Russia, India and China) declining 4.0% on a year-over-year basis and accounting for 10.0% of total HP revenue.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Zacks Investment Research

PSFT, PowerSafe Announces Its Selection by NASA for Two Small Business Innovation Research Projects

Dr. Stock Pick — Wed, 25 Nov 2009 12:18:08 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday November 25, 2009 DrStockPick.com Stock Report! PSFT, Powersafe Technology Corp., PSFT.PK ************************************************************** POWERSAFE ANNOUNCES ITS SELECTION BY NASA FOR TWO SMALL BUSINESS INNOVATION RESEARCH PROJECTS NEW YORK—(CRWENEWSWIRE) PowerSafe Technology Corporation (PSFT), announced that two Small Business Innovation Research (SBIR) projects submitted by its wholly owned subsidiary Amplification Technologies [...]

Zacks #5 Rank Additions for Wednesday – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 12:14:23 +0000

Here are the stocks added to the Zacks #5 Rank ("strong sell") List today:

First Security Group Inc (FSGI)
Iconix Brand Group Inc (ICON)
Mosaic Co (MOS)
National Retail Properties Inc (NNN)
Navigators Group Inc (NAVG)
Prudential PLC (PUK)
Psychiatric Solutions Inc (PSYS)
St Jude Medical Inc (STJ)

View the entire Zacks #5 Rank List
"FSGI" Free Stock Analysis: Buy? Sell? Hold?
"ICON" Free Stock Analysis: Buy? Sell? Hold?
"MOS" Free Stock Analysis: Buy? Sell? Hold?
"NNN" Free Stock Analysis: Buy? Sell? Hold?
"NAVG" Free Stock Analysis: Buy? Sell? Hold?
"PUK" Free Stock Analysis: Buy? Sell? Hold?
"PSYS" Free Stock Analysis: Buy? Sell? Hold?
"STJ" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Zacks #1 Rank Additions for Wednesday – Zacks Tale of the Tape

Zacks Market Commentaries — Wed, 25 Nov 2009 12:05:14 +0000

Here are the stocks added to the Zacks #1 Rank ("strong buy") List today:

Cia de Bebidas das Americas (ABV)
Archer-Daniels-Midland Co (ADM)
Apple Inc (AAPL)
Banco Santander Chile (SAN)
Benchmark Electronics Inc (BHE)
Beneficial Mutual Bancorp Inc (BNCL)
Bway Holding Co (BWY)
Carrols Restaurant Group Inc (TAST)
China Green Agriculture Inc (CGA)
Cirrus Logic Inc (CRUS)
Cognex Corp (CGNX)
Conceptus Inc (CPTS)
Crosstex Energy Inc (XTXI)
Cymer Inc (CYMI)
Delphi Financial Group Inc (DFG)
Dorman Products Inc (DORM)
Drew Industries Inc (DW)
Elbit Systems Ltd (ESLT)
Encore Capital Group Inc (ECPG)
EnerNOC Inc (ENOC)
Euronet Worldwide Inc (EEFT)
Franklin Resources Inc (BEN)
Green Mountain Coffee Roasters Inc (GMCR)
Hawk Corp (HWK)
Ingram Micro Inc (IM)
Inter Parfums Inc (IPAR)
International Bancshares Corp (IBOC)
Keryx Biopharmaceuticals Inc (KERX)
KMG Chemicals Inc (KMGB)
Lumber Liquidators Inc (LL)
MeadWestvaco Corp (MWV)
Merchants Bancshares Inc (MBVT)
Newport Corp (NEWP)
Nu Skin Enterprises Inc (NUS)
New York Times Co (NYT)
Odyssey HealthCare Inc (ODSY)
Omnova Solutions Inc (OMN)
Opnet Technologies Inc (OPNT)
OSI Systems Inc (OSIS)
Penske Auto Group Inc (PAG)
Plum Creek Timber Co Inc (PCL)
PolyOne Corp (POL)
Quaker Chemical Corp (KWR)
Regal-Beloit Corp (RBC)
Scientific Learning Corp (SCIL)
Solarfun Power Holdings Co Ltd (SOLF)
Starbucks Corp (SBUX)
Steiner Leisure Ltd (STNR)
Steinway Musical Instruments (LVB)
Tech Data Corp (TECD)
TeleTech Holdings Inc (TTEC)
Teradata Corp (TDC)
Ticketmaster Entertainment Inc (TKTM)
Toro Co (TTC)
Travelzoo Inc (TZOO)
Trimas Corp (TRS)
United America Indemnity Ltd (INDM)
Virage Logic Corp (VIRL)
Vivo Participacoes SA (VIV)
Vonage Holdings Corp (VG)
WABCO Holdings Inc (WBC)

Of Roller Coasters and Mortgages

Justice Litle Editorial Director Taipan Publishing Group — Wed, 25 Nov 2009 12:00:00 +0000

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DrStockPick.com Stock Report! 11/25/09, STM, CSRH, HLIT, SOLF, OBAS, CIMT

Dr. Stock Pick — Wed, 25 Nov 2009 11:35:43 +0000

PWRM, INCY, DrStockPick.com Stock Report! Power 3 Medical Products Inc. and Incyte Corp

Dr. Stock Pick — Wed, 25 Nov 2009 11:29:40 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! PWRM, INCY ************************************************************** PWRM, Power 3 Medical Products Inc, PWRM.OB PWRM is a leading bio-medical company engaged in the commercialization of neurodegenerative disease and cancer biomarkers, pathways, and mechanisms of diseases through the development of diagnostic tests and drug targets. PWRM’s patent-pending [...]

Stock Market News & Stocks to Watch from StraightStocks » Investing Lessons

Weak Dollar Boosts Commodities – So What’s Next?

A-Power (Nasdaq:APWR) Breaking Out – We Are Writing Covered Calls

DrStockPick.com Stock Report! Most Active Stocks Wednesday Nov 25, 2009

How to Earn Putin Points and Survive in Russian Business

VIP Falls Behind Expectations – Analyst Blog

Putin’s Eye of the Tiger

J. Crew Beats Zacks Estimates – Analyst Blog

PSFT, HZHI, CVAT, PWRM, HCEI, TAXS, CSRH, AQNM, Stocks at a Glance. DrStockPick.com Report!

No Change in Deere’s Outlook – Analyst Blog

Sprint Acquires Virgin Mobile USA – Analyst Blog

Omnicity Corp. (OMCY.OB) Ensuring Effective Support for Growing Customer Base

Provenge Action Date Assigned – Analyst Blog

Clenergen Corp.’s (CRGE.OB) Management Leads Innovative Push into Renewable Energy

Edison Gets Regulatory Approval – Analyst Blog

Grigory Pasko: The Gulag Unconcious

Retail Industry – Industry Outlook

Cephalon Settles Barr Challenge – Analyst Blog

Tough Times for Putin’s Popularity

Raven Beats, Retains Weak Outlook – Analyst Blog

Durable Goods Orders Drop – Analyst Blog

Boston Scientific’s New Product – Analyst Blog

Xinyu Hengdeli To Open 30 New Stores In Greater China In 2010

Sanofi Expands REGN Agreement – Analyst Blog

Is Russia Experiencing a Change of Heart on Iran?

Emerson Beats Zacks Consensus – Analyst Blog

Zacks.com featured expert Kevin Matras highlights: Nelnet, Inc., Nu Skin Enterprises, Inc., Perrigo Company, Tech Data Corp. and Williams Partners L.P. – Press Releases

Spending Growth Rises as Inflation Seems Manageable to Fed Despite Job Market

PPL Plant Granted License Approval – Analyst Blog

Long Term Evolution (LTE): How to Join the Race for the Next Dominant Broadband Technology

Allot Loss Narrows – Analyst Blog

FDIC Fund in the Negative – Analyst Blog

Virgin Media Opt for TiVo Platform – Analyst Blog

FDA Nod for Gen-Probe Assay – Analyst Blog

New Home Sales Rise! – Analyst Blog

General Dynamics Bags Army Contract – Analyst Blog

Spending Up, Savings Rates Down – Analyst Blog

Nokia-Siemens Suffers Setbacks – Analyst Blog

OM Group Enters Oversold Territory – Zacks Tale of the Tape

Bearish MACD for Outdoor Channel – Zacks Tale of the Tape

Jacobs Grabs Another Contract – Analyst Blog

Armstrong World Enters Oversold Territory – Zacks Tale of the Tape

DrStockPick.com Stock Report! 11/25/09, JPM, PSFT, SCOR, WWPW, HON, GTWO

Bullish MACD for Spartech – Zacks Tale of the Tape

Hormel Foods’ Heartening Results – Analyst Blog

HCEI, Healthy Coffee International Projects Seven Figure per Month Sales by November 2010

Raytheon Bags Navy Contract – Analyst Blog

Using Put Options: How to Grab Discounts and Instant Money Everyday

Using Put Options: How to Grab Discounts and Instant Money Everyday

First Solar Sells Solar Project – Analyst Blog

Stock Guru Featured Company: Quasar Aerospace Industries, Inc. (QASP.PK)

Stock Bond Price Returns vs Total Returns

Human Genome Begins Trial – Analyst Blog

Stock Guru Featured Company: DecisionPoint Systems, Inc. (DNPI.OB)

Wake Forest Bancshares, Inc. (WAKE) Reports Profitable Fiscal Year

Rahaxi, Inc. (RHXI.OB) Reports Increase in Hardware Revenue and a Reduction in Quarterly Loss

Medtronic Beats Zacks Estimate – Analyst Blog

NuEarth Corp. (NUEC.PK) Offering Clean Technologies and Products to meet Rising Environmentally Friendly Chemicals Demand

11-25-09 Daily Small Cap Market News and Stock Highlights from SmallCapVoice.com

HZHI, Exclusive Agreement With Exmovere Holdings Inc., for Mobility Aid and BioSensor Products is Opening the Door to a Multi Million Dollar Industry for Horizon Health International

Zacks Releases Four Powerful ”Buy” Stocks: DeVry Inc., Tupperware Brands Corporation, MicroStrategy Inc. and Jinpan International Limited – Press Releases

Omnicell’s New Product – Analyst Blog

Warning! Warning! This is not good news

Nov 25: Initial Claims Below 500k – Economic Highlights

Shire Drug Seeks EU Nod – Analyst Blog

Initial Jobless Claims Plunge – Analyst Blog

Happy Thanksgiving from the MarketClub Team

Magna Bags GM Contract – Analyst Blog

How and Why China Will Flood the Gold Market

Yes the future deficits are worrisome

Source: Paul Krugman.

Federal receipts and outlays as a percentage of GDP, 1970-2008 and 2009 estimates. Data source: OMB.

According to Fed, Super-Low Rates Could Lead to a Speculative Bubble

Innovative Food Holdings, Inc. (IVFH.OB) Announces Record Sales for October – Management Comments on Third Quarter Results

TAXS, TaxMasters, Inc. – Form 10-Q- Results for the Nine Months Ended September 30, 2009 Versus the Nine Months Ended September 30, 2008, Shows Revenues Increased 87.5%

D.R. Horton’s Loss Widens – Analyst Blog

eDoorways Corp. (EDWY.PK) Announces Success of Social Media Marketing Campaign

Merck’s Relief in Texas – Analyst Blog

Company News for November 25, 2009 – Corporate Summary

Stock Market News for November 25, 2009 – Market News