Buzz Bits: Dow Slides, Nasdaq Holds On
Your daily Buzz & Banter highlights...
There's talk on the Street, it sounds so familiar. Great expectations, everybody's watching you... - Todd Harrison - 3:32 PM
Minyan Brian asks:
"The Street was long hard assets and short homebuilders and financials. This feels like a hedge fund unwind, eh?"
Might be, wabbit--although the action in the dollar has to be part of the discussion today. Still, as this lens---that "dollar vs. everything else" thing that we've been discussing--is so very important on so many levels, we need to keep an open mind with regard to what's pushing around the price action.
Hands over eyes---or eyes over hands---today is shaping up to be another snazzy session for equity bulls (sans hard asset plays). While the type of buyer (homies, piggies) will ultimately matter, it is inconsequential for those measured by today's bottom line. That's the beauty and the beast of this business, at the end of the session, the bottom line is black and white.
For my part, I've been doing a bit less after taking some lumps last week. I'll always put my best foot forward for ye faithful but sometimes my feel chills and the ability not to trade is as important as trading ability. Hey, I've got no secrets in this community. Sometimes right, sometimes wrong, always honest. At the end of the day, we've always got that going for us!
Fare ye well into the bell, Minyans, and have a most mindful night.
CIEN's Analyst Day and FRX Trade - Sean Udall - 12:35 PM
So far so good at Ciena's (CIEN) analyst day.The stock is surging on margin improvement and revenue confidence is boosting shares. Analysts are still quite negative on this name even after last quarter's huge beat on following guidance strength. I don't want to beat a dead horse as I've commented on CIEN many times since joining the 'Ville but I don't think the name is done rising on a longer term basis. For those that don't want to chase CIEN, other names in the group that are still quite cheap fundamentally and bouncing closer to year lows than highs include: Finisar (FNSR), JDS Uniphase (JDSU), Infinera (INFN) and Optium (OPTM).
I agree with the Forest Laboratories (FRX) upgrade. I added FRX today close to flat on the day. I like undervalued healthcare currently and FRX more than fits that description, though this is a trade and I'm looking for a move to the $42-45 level to exit or place trailing stops.
Positions in CIEN, FNSR, JDSU, INFN, OPTM and FRX.
Homie alert-positive for once... - Bennet Sedacca - 10:56 AM
As I mentioned in my previous Buzz, I think that homies could be nearing a bottom. We have certainly gone from greed to fear. What could put in a bottom?
Suppose you were Sam Zell. Or Warren Buffett. And you had a lot of dough.
So you look at one of these beat up builders and ask yourself, self, how can I make money from buying beat up assets'?
Clearly their balance sheets are garbage, but we all know that. What if you walked into Pulte (PHM) or KB Home (KBH), or Beazer (BZH)? They have 3 kinds of debt: Payroll, payables and debt. The payrolls have already been slashed. The payables have already been stretched. Which leaves the debt. If you pay it off, you have a lean, unleveraged company. Kooky? Perhaps. But it is possible.
Folks like Zell an Buffett make their livings doing things like this.
See the chart below. If we break that trend line, with all the shorts piled in, watch out for the mother of all squeezes.
Click to enlarge
Toy Stories - Jeff Macke - 10:25 AM
- Lost in the buzz over Wal-Mart's (WMT) price-cutting madness yesterday was the impact on the toy makers. Hasbro (HAS), LeapFrog (LF), Mattel (MAT) and Jakks Pacific (JAKK) all had big days. Two reasons: First, they've been beaten with an ugly stick. Second, lower prices mean more toys sold; regardless of what it does to WMT's margins.
- Palm (PALM) talking to Wall Street's hand today after reporting a genuinely unimpressive quarter and providing a matching forecast. No one, and I mean no one, was buying Palm because they thought this quarter was going to be great. Look for management to take down expectations all the way to the basement before the turn.
- The airlines are strong today, along with the homebuilders. Seems like a great selling opportunity.
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