Buzz Bits: Dow Moves Upward, Nasdaq Lags
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Earnings Report - MV News
- McKesson (MCK) repoerts 4Q EPS of $0.85 vs. $0.79 cons on revs of $24.2 bln vs. $23.9 bln cons
- Wynn Resorts (WYNN) reports 1Q EPS of $0.67 vs. $0.54 cons on revs of $635.3 mln vs. $553.68 mln cons.
- Fluor (FLR) reports 1Q EPS of $0.94 vs. $0.87 cons on revs of $3.64 bln vs. $3.57 bln cons.
Bell Buzz - Todd Harrison - 3:56 PM
Well, that was fun! What started out as a trooperesqe effort to shake off mas jet lag has ended with, well, a whole lotta nuttin', honey! I know there's always a bull market somewhere but from where I'm sitting, that bovine is currently nestled somewhere between my sheets and pillows.
Yeah, I know--I can hear the world's smallest violin playing too!
As I've almost chewed through my Sisyphusian inbox, I'm excited to deep dive back into the flickering ticks. My off-the-cuff sense is that the Minx has room to S&P 1530-50 but, despite the manic merger mania, there is more downside risk than most folks believe. Again, I'll offer that the annecdotal stuff, nonsensical as it is, historically marks tops, not bottoms.
With that, I'm gonna sharpen my craws for tonight's dinner with the savvy, soothsayin' Jeff Saut and his lovely and talented bride. If anyone is gonna beat some acumen into my crowded Keppe, Jeff is the man to do it. I sincerely hope you all had a fine session and, as always, your night puts it to shame.
Randoms - Fil Zucchi - 2:49 PM
- Energy infrastructure plays McDermott (MDR) and Foster Wheeler (FWLT) report this week and while they are both in the same space, they sit in very different places. MDR trades at industry multiples, and the low end of its historic range. This is the turtle of the two, and its performance will depend a lot on how fast the Power Generating Division (Babcock and Wilcox) can recoup from its brush with asbestos litigation. FWLT is the hare. It too trades at industry multiples but is WAY below its projected long term growth rate. That's a good thing, until I get paranoid and start wondering why this stock is so undervalued in an environment where LBO's and Private Equity have effectively written undervaluations out of existence. What am I missing? Keep an eye on how Fluor (FLR) reacts this afternoon after it reports, as a possible tell on the kind of crowd circling this group.
- Parker Drilling (PKD) is also up at bat this week. I got pulled into this one as the charts of many land drillers were perking up. "Nervous Pervis" is wondering why insiders sold meaningful chunks a couple of weeks ago.
- L-1 Systems (ID), one of Uber-Minyan Jeff Saut's long time faves also reports. I am staying long it, but the stock has had a heck of a run and the valuation is not for the value crowd.
- Speaking of insider sales, did you see 167,000 shares dump by the CEO of homie NVR, Inc. (NVR)? That's a $133 mln vote of no confidence in my book.
- Is FCStone (FCSX) ready already...for the next leg up?
Position in FCSX, ID, XHB, FWLT, MDR
They Gotta Have It - Jeff Macke - 12:42 PM
- Smith & Wollensky (SWRG) is moooooving on up as Patina Restaurant Group has raised its offer for the steak chain from $9.25 to $11 per share. The new bid tops Landry's (LNY) March offer of $9.75 which itself had been an effort to top Patina's original $9.25 bid. SWRG opened the year at 5.05 per share.
- Sure, it may seem like an ill-conceived feeding frenzy to get in a war over a tiny (STILL under $100-million) dining chain but just think of all the milk, corn and beef a place like SWRG has in inventory!
- I was running when I heard it, so it could have been the jack-rabbit thumping of my heart playing tricks on me, but I'm pretty sure the Oracle of Omaha said something to the effect of "Dow Jones (DJ) is cheap at $60... especially when you consider the psychic income derived from owning those assets" (italics added by me and my heart). Psychic income? Unless Dionne Warwick now works at DJ, Warren was either giving the Bancroft family free-advice or "diversifying" his dedication to the value game.
- Check out Wendy's (WEN) ramping on huge volume today. I have NO information as to why but it's worth putting on your radar in these leaky, M&A obsessed days.
Hedgers selling strength in Naz... - Bennet Sedacca - 11:28 AM
See the chart here. As many readers know, I track this data weekly. It is a combination of the position of 'smart money' hedging accounts position in the NDX futures. Since electronic or 'e-mini' futures are so popular now, I net out the combination of 'big contracts' or 'open outcry' and the e-mini in big contract terms.
I focus on the size (yes size matters) of their positioning but more importantly, the direction of their trading.
To me, they are clearly fading this rally after having bought in size the lows. Yep, that's why they call 'em smart money.
I will have a bigger picture look at this later in the week but am more intent on spending the day with my son who is back from his first year in college!
But I think this data is important. I am seeing early signs of it in the S&P as well. And they are adding to their 10 year short. More later...
Position in S&P 500 via SDS
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