Buzz Bits: Dow, Nasdaq Drop Slightly
Your daily Buzz highlights...
Earnings Report - MV News
Symantec (SYMC) reports 1Q non-GAAP EPS of $0.21 vs. $0.18 cons on revs of $1.3 bln vs. $1.24 bln cons.
Sanmina-SCI (SANM) delays EPS results due to options review, but reports revs of $2.71 bln vs. $2.73 bln cons.
LSI Logic (LSI) reports 2Q EPS of $0.10 ex-items vs. $0.09 cons on revs of $489.6 mln vs. $486.9 mln cons.
Bring it Home Buzz - Todd Harrison - 3:39 PM
- I agree with Bennet that Elmer's ARM's twisting was an eye-popping gaffe. I hope it was a gaffe as the alternative view (that he knew what he was doing) is entirely more disturbing.
- Add the brokers (XBD -1%) as a ponential fly in the upside ointment. But, relatively speaking, they're house flies as opposed to the trannies (-3%) and retailers (-2%), which look more like Jeff Goldblum.
- I'm gonna make some sales (trading exposure) as a function of discipline although my M.O. remains very much in play.
- I'm just a poor boy, I need no sympathy....but I do need bed rest. Despite a steady diet of Theraflu, Cold-Eze, Zicam and Chicken Soup, I'm fading fast. How bad do I feel? Put it this way--I'm cancelling this week's edition of Succofest! Better now than August 12th, I figure...
- On that note--and with a conscious nod to the overnight earnings, I'm gonna flip lids and tend to biz. I sincerely hope that you had a profitable session and that you're night is the definition of mindful.
- May peace be with you.
Mini-Minyan Mailbag - Neal Dingmann - 2:42 PM
Do you have an opinion on the substantial disconnect that recently occurred between the relationship of Halliburton (HAL) to the OIH index?
The reason for the recent disconnect is largely because of HAL's Engineering & Construction subsidiary KBR. While KBR makes up 44% of overall sales, it accounts for only 1% of income because of KBR's terrible margins. Most recently HAL said that KBR had a $148 million charge from a project in Nigeria and HAL said it was now not going to IPO KBR but will do a tax free spin.
Dandruff Alert in Gold Shares - Adam Michael - 12:28 PM
I see the dandruff in Gold that Fil noted earlier…but I like the way the gold shares have been acting. Yesterday, the shares finished strong in the face of a stronger dollar so I have to wonder if perhaps they might lead the metal if we get another leg up.
Some of my favorites (Yamana Gold (AUY), Golden Star Resources (GSS), Kinross Gold (KGC)) have nice looking "reverse H/S" patterns over the past 2-3 months and are fast approaching their necklines. I would like to see a volume pickup on any breakout (if and when).
Will we have to see the Durable Goods Orders number on Thursday or Preliminary GDP number on Friday before a big move (in either direction??). Things I'd like to know…
Position in AUY, GSS, KGC
Trannies continued to get HAMMERED. Is this important? Yes. Period. - Bennet Sedacca - 11:45 AM
The economy is 70% consumer driven, right? So we ought to focus, forgetting yesterday's backwards looking confidence number, on consumer SECTORS. Like which ones?
Retail, trannies, tech, 3M (MMM), housing. I am sure I have missed some. This speaks to a weak consumer. The charts are absolutely gross in these sectors. Oh yeah, throw small cap and submerging markets too.
What's holding it up? Financials and late cycle industries. What goes up? Pharma. EVERY DAY. And health care.
I mentioned the double top the other day here in the trannies and now they are ready to crack. I have always thought UPS was perhaps the best company in the WORLD (they even have a triple A credit rating) so it will spread to others IMHO. Look at the chart of trannies now. Would you buy this?? Not with my money. No way. No how. The consumer will stop spending soon, I think, because they have to, not because they want to.
Call it 'social Darwinism' for those that overspent. But the 'Creep' of the Wall Street is making a move. Jeez, I wish I could be more positive. Hope to see all of you on that side soon, and MIM, soon!
position in PJP, PPH, Vanguard Health Care
Walgreens Nearing an All-Time High - Brian Gilmartin - 9:49 AM
Attached is the chart of Walgreens (WAG) showing its approach towards its August 10th, 2005 all-time high of $49.01.
The December, 2000 high for WAG for $45.56 so I thought the breakout last summer would lead to a nice run for the stock, but whether it's WAG's large-cap status, it's growth characteristics or the Medicare Part D confusion, the stock has been consolidating within the $40's for the last year.
Since May the stock is up over 20%, and is now approaching a key resistance level.
Fundamentals remain very good: we will get July comp's for WAG sometime next week.
Position in WAG
GM's Numbers - John Succo - 9:33 AM
Wow is it tough to tear through GM's numbers. With GAAP write-offs so large, like for the employee buyout program, the company could throw the kitchen sink into its "operating" numbers and it would be hard to notice.
The company, in its reported "adjusted EPS" of $2.03 compared to consensus of $.55 (this is the number everyone is shouting hurray about), is not really correct. Much of this number is "kitchen sink": they had large gains from less warranty claims (there were less lemons sold for this quarter; this will balance out over time) and pension gains. The real number we come up with to compare to consensus $0.55 is $1.
This improvement is due to you guessed it...cost savings from reduced employee benefits.
We know the company is doing a great deal in cost reduction. That along with Nissan/Renault rumors (it is becoming clearer that this alliance is not doing that great) has driven the stock to these levels.
For our part we still see GM sales declining, improvements in costs continuing, but risks remaining high.
Position in GM
What you need to know... - Jon Doctor J Najarian - 8:05 AM
Amazon.com Net Misses – Results for Amazon's (AMZN) 2Q earnings show a drop of 58 Percent on promotions like free shipping despite a revenue jump of 22%. Shares are down 12% to $29.50 in the pre market. Ouch!
Hewlett-Packard Buying Mercury Interactive For $4.5 Billion – Mercury Interactive (MERQ) had sales of $843 million in 2005, so this acquisition will nearly double Hewlett Packard's (HPQ) annual software revenue to more than $2 billion. HPQ is paying a 33% premium above where MERQ shares closed.
3M (MMM) 2Q Earnings Miss Lowered Warning! The diversified manufacturer earned $882 million, or $1.15 a share, in the latest quarter, up 17% from $754 million, or 98 cents a share, a year ago. That was on the low end of their warning two weeks ago.
Position in AMZN
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