Buzz Bits: Dow, Nasdaq Head Downward
Your daily Buzz & Banter highlights...
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Earnings Report - MV News
- Paychex (PAYX) reports 3Q EPS in-line of $0.35 on revs of $485.3 mln vs. $488.34 mln cons.
Bell Buzz - Todd Harrison - 3:41 PM
- No lift to Goldman and no improvement in breadth. Mr. Snapper, meet Mr. Soup.
- I hear it's beautiful outside. I'll tell ya, the greatest part of living on the East Coast is that you learn to appreciate the seasons.
- As go the piggies, so goes the poke. In that regard, keep close tabs on the BKX as it flirts and flaunts the 200-day moving average.
- Had a tough day? Keep it in perspective, Minyans. There's a difference between loss and loss.
- Fokker Kahn. Fokker Kahn.
- As it stands, the S&P has put in a lower high. Through objective eyes, that ain't bullish.
- Is it subject to change? Yep, this is the Minx, it's dynamic, ever-changing and multi-linear. That's why we follow our tells and, above all else, it's why discipline is such an integral part of the process.
- Fare ye well into the bell, Minyans, and we'll see YOU in the ayem.
position in spy
Cacooning Randoms - Jeff Macke - 2:08 PM
- Note the all-day strength in the video game space, especially in GameStop (GME) and Activision (ATVI). The former is up for the second straight day after CRUSHING estimates, the latter is rising on an upgrade and anticipation of Guitar Hero II and Spiderman.
- Need a couple more reasons for relative strength of the Stay at Home names? How about: gas at $3 per share, rumors of war and consumer free-time formerly reserved for "house flippin' and getting subprime loans?"
- Wal-Mart (WMT) to NYC: Drop Dead. WMT CEO Lee Scott says Manhattan isn't worth the effort. The city hasn't felt so rejected since the Ford Administration. Scott also announced that 2007 was "looking like a challenging year, with gas prices rising." Think how pessimistic the guy would be if he hadn't already made $22 million this year.
- Target (TGT) to Wal-Mart: We'll take Manhattan, thank you.
Love Serenades and New Flings - Vitaliy Katsenelson - 11:50 AM
I sang love serenades for Abbott Labs' (ABT) stock for a long time. Call me materialistic, but my love for stocks is not 'til death do us part,' it is conditional of fundamentals staying intact and of valuation - it has to be undervalued. Abbott Labs' fundamentals have improved over the last couple of years - it sold its medical device unit to General Electric (GE) at a great premium and it "stole" a stent business from Guidant playing on Boston Scientific's (BSX) urgent need to close the deal. Abbott's management have proven the company to be a very shrewd operator. However, Abbott did what any good stock will do at some point (hopefully) – it appreciated and became fully valued. Though I still love the company, I had to say goodbye to Abbott's stock. Hopefully, I'll be able to buy it in the future on my terms, at a lower price.
I found a new 'fling' - Glaxo Smithkline (GSK) – Abbott's worthy replacement. GSK reminds me of Abbot's stock about two years ago: decent (very similar to ABT) growth prospects ahead (earnings growth of about 7-8% a year) further helped by a growing industry, a strong balance sheet, great return on capital of close to 40%, fat 20% plus profit margins, and a competitive moat around its business that rivals the size of Lake Michigan. All that coupled with great valuation of about 14x earnings and 3.3% dividend yield. On top of all that it comes with an added bonus, its dividend is paid in pounds and converted to dollars – if the dollar decline continues (my expectation), its earnings and dividends will rise in US dollars.
Positions in ABT, GSK
Sometimes the market talks to you... - Lance Lewis - 11:36 AM
Anyone else notice how the word "Goldilocks" has suddenly been dropped from the equity bull lexicon without ceremony? For those that were awake, any hope of "Goldilocks" (and I stress the word "hope") died back in early November.
Let's see... Both in last week's FOMC and Heli-Ben's testimony today, the Fed admits that inflation remains a concern and that the housing bust poses a risk to the economy (keep in mind that this mantra of housing merely being a "risk" will continue until the Fed actually panics and cuts rates, which they will even though it will only stoke inflation even more).
What does that describe? Oh yea... STAGFLATION.
Note what the only two areas of strength in today's equity market are: oils and golds. Also note that the XOI oil index has taken out its February peak and is already diverging from the S&Ps to the upside. The gold shares are also beginning to diverge from the equity market, especially the juniors, where many have made new highs in recent days.
Hmm... For those that are listening, sometimes the market talks to you.
Position in gold shares
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