Company Description

Healthspring coordinates care plans through the Medicare Advantage market in Alabama, Florida, Illinois, Mississippi, Tennessee and Texas. The company also provides a national stand-alone Medicare prescription drug plan.

Healthspring Surprised by 22.22% in the Third Quarter

On Oct 29, Healthspring reported its third quarter results and easily beat the Zacks Consensus by 14 cents per share. Earnings per share were 77 cents compared to the Zacks Consensus Estimate of 63 cents. The company reported 53 cents in the year ago period.

Premium revenue rose 26% to $649.8 million compared to the year ago period. Membership in the Medicare Advantage jumped 19.4% compared to the year ago period and was up 15.1% even when compared with the end of 2008. Stand-alone PDP member also grew 11.6% compared to the third quarter of 2008.

As it said in its second quarter results, the company again emphasized that its Florida and Part-D operations have been outperforming.

Raised 2009 Guidance

Given that its Florida business continues to be strong, the company raised full year EPS guidance to the range of $2.30 to $2.40 from its prior guidance of $2.10 to $2.25.

It also is bullish on the number of members it expects under the Medicare Advantage program. The range has been adjusted higher to 188,000-189,000 from 186,000-188,000.

Zacks Consensus Estimates Rise

Given the raised guidance, analysts have moved to raise estimates. For the fourth quarter, the Zacks Consensus is up 3 cents to 62 cents in the last 30 days.

The full-year Zacks Consensus Estimate rose 7.8% to $2.34 from $2.17 per share just a month ago which is in the company's new guidance range. All 9 analysts raised in that time. Analysts expect 2009 earnings growth of 10.43%.

Analysts are optimistic about 2010, despite the ongoing uncertainty about healthcare reform. They boosted estimates for the full year by 16 cents to $2.22 per share.

Value Fundamentals

Healthspring is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of just 1.06. The company has a 5-year average return on equity (ROE) of 14.65%.

Zacks Investment Research

In the second quarter, NUE announced a net loss of $133.3 million, or 43 cents per diluted share. However, the performance is dismal compared to a net income of $734.6 million, or $2.31 per share, in the third quarter of 2008.

Losses in the quarter were driven by the negative impact of high-cost pig iron inventories of about $180 million, or 37 cents per share. However, the company claims that the consumption of the high-cost pig iron inventories was completed by the close of the quarter. Additionally, pre-operating and start-up costs of the new facilities increased 58% year over year to $47.1 million in the quarter. These costs are primarily related to the SBQ mill in Memphis, Tennessee; the Castrip project in Blytheville, Arkansas; and the proposed iron-making facility and galvanizing line in Decatur, Alabama.

Net sales plummeted 58% year over year to $3.12 billion, while increasing 26% over the previous quarter. Average sales price per ton increased 1% over the second quarter of 2009 and decreased 45% from the third quarter of 2008. Steel shipments were 5,114,000 tons in the quarter, up 24% over the second quarter of 2009 and down 24% from the third quarter of 2008.

The average scrap and scrap substitute cost per ton used in the quarter was $299, down 4% compared with $312 in the second quarter of 2009 and down 44% from $533 in the third quarter of 2008. Total energy costs decreased about $9 per ton from the second quarter of 2009, due to lower electricity and natural gas prices combined with the productivity benefits of increased utilization. Total energy costs decreased about $8 per ton year over year.

Nucor's liquidity has remained strong with $2.22 billion in cash and cash equivalents and short-term investments. Nucor's steel mill utilization rate increased from 46% in the previous quarter to 69% in the reported quarter.

The company expects earnings in the next quarter to benefit from a significant improvement in raw material costs. However, lower operating volumes/rates in both sheet and bar products could impact fourth quarter results negatively. We maintain our Neutral recommendation on the stock.

Cliffs expects the North American Iron Ore business segment to recognize sales volume of about 16 million tons in 2009, higher than the previous guidance of 13 million to 14 million tons. North American Iron Ore equity production volume in 2009 is expected to be 17 million tons, up from a prior projection of 15 million tons.

Cliffs also raised its 2009 expected sales volume for its North American Coal business segment to about 1.8 million short tons from a previous expectation of 1.5 million tons. North American Coal production volume is expected to be 1.8 million tons, up from a previous expectation of 1.3 million tons. Cliffs operates coal mines in West Virginia and Alabama.

The higher near-term volume outlook is in response to recent blast furnace restarts in North America and Europe and seasonal inventory rebuilding. On Sept 3, Cliffs subsidiary United Taconite in Minnesota announced its plans to ramp up production of iron ore pellets for the rest of 2009, with a moderate increase in steel demand in the last couple of months.
 
Cliffs plans to produce 15 million tons of iron ore in North America for the full year. It plans to increase production from this month through October. Mining operations will increase at the Thunderbird Mine in Eveleth, Minnesota this month and production will increase at the concentrator portion of the facility, located at the Fairland plant in Forbes, Minnesota in October. Line 1 furnace which was idled in October last year, is expected to start up fully in November.

The anticipated increase in production will allow more than 400 hourly workers to progress toward a 40-hour work week. United Taconite has been operating under a 32-hour work week since November 2008, when its operating furnaces in Hibbing and Eveleth were idled due to weak demand for iron ore in the steel making process.

Earlier in August, Cliffs’ wholly owned subsidiary Pinnacle Mining Company, LLC recalled about 100 employees at its Pinnacle and Green Ridge No. 1 mines in West Virginia with improvement in coal demand. The Pinnacle Complex includes the Pinnacle, Green Ridge1 and Green Ridge 2 mines and the Pinnacle Preparation Plant. Both the Pinnacle and Green Ridge 1 mines had halted production during Feb 2009. The production shutdown affected approximately 360 employees. The mines produce metallurgical coal for the steel industry.

The three-year old contract has been extended twice. Goodyear was in talks with USW in Cincinnati since June 8. The steelworkers were adamant throughout the negotiations about maintaining their job security. However, Goodyear did not disclose any details about the deal, especially on job cuts and plant closures.

Goodyear is focused on streamlining its operations by achieving cost reductions of $2.5 billion by 2009. Of this, the company already achieved $1.8 billion by the first half of the year. Goodyear anticipated that its master labor agreement with the USW will result in savings of $300 million in 2009.

A weak industry demand negatively affected Goodyear Tire’s results in the second quarter. The company reported a net loss of $221 million or 92 cents per share for the quarter versus earnings of $75 million or 31 cents per share in the same quarter last year. Total segment operating income plummeted 93% to $24 million from $330 million in the prior-year quarter. Sales were down 25% to $3.9 billion.

We continue to recommend the shares of Goodyear as Neutral with a target price of $19.

The new operating unit will provide support to Lockheed Martin's various projects. These  include the tri-national medium extended air defense system (MEADS) program led by Lockheed Martin Missiles and Fire Control, the land environment air picture provision (LEAPP) air defense program led by Lockheed Martin U.K  and the targets and countermeasures program of the Missile Defense Agency. It will also be in charge of the Battle Management Technology Center at North Alabama and the ground-based midcourse defense (GMD) operations and sustainment contract.

Shares of Lockheed Martin closed at $74.43 on Tuesday, trading at 9.9X trailing-12 month EPS. We presently have Neutral recommendation for the company.

We maintain a Neutral recommendation on the shares of Wells Fargo.

In July, Global reached an agreement with Colonial to buy the 21 branches, which have about $492 million in deposits and $440 million in loans. However, the deal had been invalidated by the takeover of Colonial by BB&T.

The Colonial deal is the biggest acquisition in BB&T’s history, creating the nation's eighth-largest financial holding company by deposits. Previously, BB&T had only three branches in Alabama. After the takeover, BB&T gained an additional 90 Colonial branches across the state and 204 branches in Florida, up from 107 offices previously.

BB&T has already started the integration process and expects merger and integration costs to total about $245 million. It anticipates about $170 million in annual pretax expense reductions.

The branches gained by BB&T in Nevada and Texas are outside its traditional business territory. Chances are that Global could get the branches in Nevada . However, BB&T has said that it would take time to decide about these branches.

According to Global, if it gets those branches, it would merge them with its Las Vegas arm, First Commerce Bank, and form a holding company, Western Liberty Bancorp.

Company Description

Strayer Education, an education services holding company, owns Strayer University and certain other assets. The company's mission is to make higher education achievable and convenient for working adults in today's economy.

Strayer offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health care, and public administration to more than 44,000 working adult students at 60 campuses in 12 states, Washington, D.C. and worldwide via the Internet.

Founded in 1892, Strayer University is accredited by the Middle States Commission on Higher Education.

Higher Estimates

The company has seen analysts boost forecasts. Analyst estimates for 2009 are at $6.99 per share, up from $6.95 over the past 60 days. For 2010, projections have been steady over the past 3 months at $8.61 per share.

Quarterly Results Reflect Solid Growth

The company posted record results in its fourth-quarter and full-year report. Earnings per share of $1.71 topped the year-prior $1.34 and beat the consensus estimate by a penny. Fourth-quarter revenues jumped 28% year-over-year to $114.3 million thanks to a 5% tuition increase.

"We are pleased with both our fourth quarter and year-end financial results," said Robert S. Silberman, Chairman and Chief Executive Officer of Strayer Education, Inc. "We had a successful start to 2009 with the opening of new campuses in Augusta, Georgia and Huntsville, Alabama. We look forward to our new campus openings for the 2009 spring term in three new Strayer markets: Allentown, Pennsylvania; Charleston, West Virginia; and Salt Lake City, Utah."

Higher Income

Strayer hiked its annual divided to $2 per share from $1.50 not too long ago. The new payout translates into a quarterly dividend of 50 cents per share, an increase from 37.5 cents.

The company's dividend yield of 1.2% stands above the industry average as most companies within Strayer's industry pay no income.

Favorable Industry Comparisons

Strayer boasts a return on equity (ROE) of 46%, surging past the industry average of 12%. Equally as impressive is the fact that Strayer's balance sheet shows no debt. Zacks Investment Research

Company Description

Genesis Energy operates as an energy master limited partnership ("MLP") which transports energy and refines products throughout Texas, Louisiana, Arkansas, Mississippi, Alabama and Florida. Its customers include the integrated oil companies as well as independent oil producers.

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The company has 4 business segments:

1. Pipeline Transportation Division which transports crude oil, carbon dioxide and natural gas
2. Refinery Services Division which processes sour gas streams to remove sulfur
3. Supply and Logistics Division which transports, stores and supplies energy products to customers
4. Industrial Gases Division which produces and supplies industrial gases like carbon dioxide and syngas.

14th Consecutive Quarterly Dividend Increase

As a MLP, Genesis Energy distributes a large portion of its income to unit holders. On Jan 8, the company announced a distribution payment for the quarter ended Dec 31, 2008 which rose 16% over the fourth quarter 2007. The 33 cents per common unit distribution is payable on Feb 13 for unitholders of record as of Feb 3.

Surprised on Third-Quarter Estimates by 19.05%

On Nov 6, Genesis Energy reported third-quarter 2008 earnings that beat analysts' estimates by 4 cents a share.

Net income jumped 535.29% to $10.8 million, or 25 cents per unit, from $1.7 million, or 7 cents, in the prior year. Analysts expected 21 cents. Third quarter 2007 only saw the impact of the Davison businesses for 2 months of that quarter.

The company saw no lasting effects from the 2 Gulf hurricanes during the quarter.

Solid Cash Position

Even with its large distributions, Genesis still has a strong cash position. At the end of the third quarter, the company had $170 million in cash and debt commitments.

Consensus Estimates Rise for 2008

Given the company's recent solid track record, covering analysts are fairly optimistic about the fourth-quarter 2008 and full-year 2008. Fourth-quarter estimates are up a penny in the last 30 days to 23 cents. 2008 consensus estimates rose 2 cents to 69 cents in the last 90 days.

For 2009, analysts are projecting 51.44% year-over-year earnings growth, with consensus estimates of $1.05 per unit.

Analysts are also bullish on long term growth, forecasting 20% earnings growth over the next 5 years.

GEL is scheduled to report fourth-quarter and full-year earnings on Feb 25.

Value Fundamentals

Genesis Energy is a Zacks #1 Rank (strong buy) stock. It has surprised on estimates 3 out of the last 4 quarters.

GEL is trading at only 7.4x forward earnings. It has a price-to-book of 0.71. Its PEG ratio is only 0.60. As an MLP, Genesis pays a quarterly distribution with a current spectacular yield of 11.80%.

"GEL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Guide to Hedge Funds in Alabama

Other Geographical Hedge Fund Guides Include:

• New York
• Connecticut
• Switzerland
• Cayman Islands
• Bermuda
• Texas
• San Francisco
• California
• London
• Washington D.C.
  
• New Jersey
• Chicago
• Boston

“There has been a lot of talk recently about Embarq wanting to be acquired,” Kagan told MarketWatch.com. “However, the financial crisis that is on the front page every day made finding a partner difficult. That may have lowered the price Embarq hoped to get. CenturyTel saw an opportunity and jumped in to acquire Embarq. Timing was on CenturyTel’s side in this deal.”

The all-stock deal – announced yesterday (Monday) – calls…

The index was dragged down by General Motors (NYSE:GM), which fell to a 58-year low as sales in Europe dried up.

This from Reuters:

The energy sector was the top drag on the Dow as the price of oil fell.

"We've got a disappointment that everything that's been done to date and everything that's being contemplated has not had any significant impact ... to reduce the credit freeze-up and it now looks like it's spread worldwide," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama.

"You've got investors concerned that the global slowdown that had been feared may be materializing, courtesy of the frozen credit markets."

PS.  Earlier today, Eric Roseman recommended investors hold reverse ETFs like Short Dow30 ProShares (AMEX:DOG) or Short S&P500 ProShares (AMEX:SH) in their portfolio. These funds are sitting on gains of 3.5% and 4.2% just in today's trading session

Rising prices and strong demand are pushing Cleveland Cliff's performance. Robust industrial growth in China and India has triggered demand for steel, resulting in higher demand for iron ore. Moreover, the merger with Alpha Natural Resources, Inc. (ANR) will help Cliffs to meet the increasing global demand for coal, consolidate the supplier base and generate substantial free cash flow.

However, this is offset by a weak production profile, rising energy costs and high customer concentration. As a result, we rate the shares a Hold with a target of $38, which is 5.5x our 2008 estimate.

Read the full analyst report on CLF

Discussions over the government bailout of the financial markets stalled late Thursday, when House Republicans said they would not participate in the passage of Paulson’s deal.

"At the end of the day, it’s a $700 billion bailout," Rep. Scott Garrett (R-NJ) told USA Today. "It puts the taxpayers on the hook."

A bipartisan group of negotiators Thursday expressed hope that a deal would pass sooner rather than later after discussions with Secretary Paulson led to an agreement in principle. That framework included $250 billion in immediate relief with another $100 billion available without congressional approval. The remaining $350 billion would be made available later with approval from congress.

The plan also included caps on compensation for company executives, which Paulson initially opposed. Rep. Frank on Sunday referred to lavish executive salaries and bonuses as a "perverse incentive" that encourages executives to take inappropriate or excessive risks in exchange for multi-million-dollar payouts, and therefore, part of the problem.

Paulson finally agreed yesterday, stating that “the American people are angry about executive compensation and rightfully so. We must find a way to address this in the legislation.”

Stock warrants, which would provide the Treasury with equity stakes in participating companies, were also included in the agreement.

“Right now the price of admission [to the proposed Treasury program] is zero,” Sen. Jack Reed, D-RI, said Tuesday. “It’s not inappropriate to demand that if they benefit from this transaction in the future … that they will share that benefit with the taxpayers who made the benefits possible."

After a late night meeting on Capitol Hill, however, it became apparent that House Republicans would not support Paulson’s plan, regardless of the stipulations.

House Financial Services Committee Chairman Barney Frank said no House Republican took part in negotiations, but that Rep. Spencer Bachus (R-Alabama) made a brief appearance to deliver a one-page statement that outlined the House GOP plan.

The GOP plan involves the creation of a mortgage-backed securities insurance fund, Bloomberg News reported. The holders of mortgage-backed securities would be charged premiums to finance this insurance. According to the plan’s outline, Wall Street participants would be forced to fund their own bailout by injecting private capital, which could be raised, in part, by suspending dividends. Measures such as these would be facilitated, the Republicans said, by the removal of “regulatory and tax barriers that are currently blocking private capital formation.”

The Republican plan also requires participating firms to disclose the value of mortgage-related assets currently on their books, a review of credit rating agencies, and an audit of failed companies to ensure their financial position was accurately portrayed.

After being confronted with stiff opposition from members of his own party, President Bush said in a speech Friday morning that he was optimistic a rescue package would be passed soon.

“There is no disagreement that something substantial should be done,” he said. “We are going to get a package passed. We will rise to the occasion.”

While Democrats hold a majority in the House of Representatives, Speaker of the House Nancy Pelosi has made it clear that she will not agree to a bill without the full support of Congress.

After talks at the White House crumbled Thursday night, Treasury Secretary Paulson reportedly knelt down in front of Pelosi and pleaded with the house speaker to not “blow up” the deal by withdrawing her party’s support.

“I didn’t know you were Catholic,” Rep. Pelosi reportedly retorted in reference to Paulson’s kneeling. She went on: “It’s not me blowing this up, it’s the Republicans.”

A comment, to which Paulson responded with a sigh saying: “I know. I know.”

Source: Republican Opposition to Paulson’s Bailout Plan Stalls Talks

Company Description

HealthSouth is a leading provider of outpatient surgery and rehabilitative services. The company operates through a network of inpatient and outpatient facilities across the U.S. As of Jun 30 HealthSouth has 93 inpatient rehabilitation hospitals, 6 long-term acute care hospitals, and 59 outpatient satellites. The company is head quartered in Birmingham, Alabama, has 16,000 employees, and a market cap of $1.7 billion.

Fantasctic Second-Quarter Results

On Aug 5 HealthSouth reported second-quarter income from continuing operations of $47.2 million, compared to just $4.7 million in the same period last year. The company said an increase in discharges and quarterly revenue were the main drivers. Discharges are up 5.6%, year over year.

Earnings per share were 17 cents, almost 3 times higher than analyst estimates, which averaged 6 cents. This is the first earnings surprise in the past 4 quarters and was good enough for the HealthSouth to raise its full-year guidance.

Bullish Guidance

The company issued and sold 8.8 million shares for approximately $150 million, which will be used to pay down debt, lowering interest expense. Consequently, HealthSouth increased its forecast for full-year 2008 EPS to between 50 and 55 cents, up from between 30 and 38 cents.

Analysts have also increased estimates for full-year 2009 to 74 cents per share, up from 67 cents. The higher estimates would yield a 51% year-over-year increase.

Expanding in Texas

HealthSouth has acquired 2 new facilities since its Aug 5 earnings announcement. The company finalized the purchase of a 30-bed facility in Arlington, Texas, in addition to a 38-bed hospital in Midland, Texas. The company now operates 14 locations in Texas.

The Chart

Shares of HLS pressed through a level of resistance just above $17, which is now established as a level of support. The stock is trading in a bullish trend since last bouncing off of that support level. Take a look at the chart below.

"HSRC" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

But they threw off their shackles on Friday. Dupont (DD), which fell 46 cents to $45.24 a day earlier, was up by 3.77% to $47.67. Keeping it company was Dow Chemical (DOW), the only one to have bucked the pullback on Thursday, with a surge of 4.16% to trade at $37.31.

But the stock to really watch out for is Olin Corp. (OLN) that climbed by 10.39% to $23.17 in spite of the announcement that caustic soda shipments from its plant in McIntosh, Ala., will be halted until further notice. Praxair, Inc. (PX) too scaled $85.98, up by 4.65%. Dow and Praxair are trading near their 200-Day Moving Average.

Also on the upswing were PPG Industries, Inc. (PPG), Ashland Inc. (ASH) and Air Products & Chemicals, Inc. (APD), all stocks that had tanked on Thursday. However, the biggest chemical maker, BASF (BASFY) was not so lucky, as it was down to $46.83 following a Bloomberg news that the company will cut down polystyrene production in Europe by 25% because of a fall in demand. Dow Chemical too had announced a 15% reduction in polystyrene production in Europe in June.

We believe the $147 million sale of CareCentrix is positive in terms of both lowering long-term debt and supporting the managementÂ’s stated growth via acquisition strategy of its core home care business. We retain a Hold rating at current levels.

The aging of the population and an increasing focus on healthcare cost containment underpins a shift towards lower-cost (and more convenient) solutions, such as home healthcare. Gentiva is well positioned to benefit from growth of the home healthcare industry through both its geographic reach and multiple service offering.

GentivaÂ’s strong balance sheet provides financial flexibility to pursue acquisitions and expansion into new markets or fund share repurchase activity. The company has recently initiated a number of productivity initiatives designed to contain administrative costs and foster internal growth, which if successful will cushion operating margins to any sudden changes to government-sourced revenues. The companyÂ’s purchase of Healthfield enhances operations and potentially improves efficiencies in Alabama, Georgia, North Carolina and Tennessee, while establishing a presence in the South Carolina market.

We have valued shares of GTIV on a forward price/earnings (P/E) basis, as well as a comparison to similar firms in the healthcare sector. Our revised price target of $29 is derived using a multiple of 20.4x FY08 EPS forecast of $1.42 (previously $1.38).

Read the full analyst report on GTIV

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Nearly 55% of Nucor’s steel sheet volumes are under long-term price contracts, which will provide the company a cushion against higher raw material costs. It had been able to successfully pass on higher raw material costs through a mechanism of steel surcharges, which helped the company maintain or even improve its operating margins. Going forward, we believe long-term price contracts will help Nucor to maintain its near-term profitability.

Nucor’s Castrip technology will structurally lower its cost of production and lead to meaningful long-term savings. This process also reduces the overall environmental impact of producing steel by generating significantly lower emissions.

The company had successfully implemented three raw material projects which are expected to put at Nucor’s disposal over 2.5 million metric tons of high-quality scrap substitutes per year. Recently, Nucor upgraded its furnace at its steel recycling mill in Tuscaloosa, Alabama. Subsequently, production from the plant increased 15%.

In the first quarter, the company commenced operations at the Utah building system facility, which has an annual capacity of 30,000 tons. Nucor increased its presence in the steel mills segment through greenfield projects including special bar quality mill in Memphis, Tennessee, which will have an estimated annual capacity of 850,000 tons.

Read the full analyst report on NUE