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VIDEOTicker Shock: Five Reasons Why AMD's Upcoming Earnings Look Grim
Monday's top stories and stocks with potential to move.
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My souvenir: a nice sunburn.
Asian stocks rose overnight. The Hang Seng was up a hefty 3.7%. The Nikkei was closed on holiday. European stocks were in positive territory earlier this morning, too. And here in the US, we're currently trading higher.
Here’s what I’m seeing this morning:
Advanced Micro Devices (AMD):
On Tuesday, the California chip company is due to release its second-quarter earnings. Some quick thoughts:
1. The Street is looking for a second-quarter loss of $0.48. It could beat that number, but so what? Have you looked at the red ink these guys are expected to generate in 2009 and 2010?
2. I’m not saying a comeback is impossible, but from an investment standpoint, I don’t see the company playing on the same field as its much larger rival Intel (INTC) anytime soon.
3. At $4 or so, it’s just not going to receive loving from me. I assume many analysts and traders feel the same way.
4. With insiders apparently sitting on their hands, why should I belly up?
5. If I were asked to sum up my feelings on the stock, I could do so in one word: indifferent.
Sorry, AMD bulls, but the company is going to have to show me the money and prove me wrong before I take a glass-half-full approach. I’ve been burned one too many times.
Mattel (MAT):
On Friday, the toy company came out with its second-quarter results. It earned $0.06 a share in the period, whereas analysts had been looking for the company to merely break even.
Some thoughts:
1. To its credit, it cut a bunch of costs out of the equation, which helped goose the results. But in order for me to warm to this situation, I'm going to need to see some life on the top line. Note that revenues were down 19% in the period.
2. That being said, the situation is hard to ignore, because it's expected to still turn in $1.16 a share this year and $1.41 next, which implies an expected growth rate of more than 20%.
3. When this whole economy mess turns around and folks start dropping coin on toys like the used to, Mattel is well positioned to ring the register.
4. The question is, what’s the reason to get involved right now? Waiting for the economy to turn isn't necessarily reason enough.
5. Insiders -- toying around with the idea of buying some shares?
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