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business newsIrish Banks Are Back In The Green
By
Justin Sharon
Apr 01, 2011 4:45 pm
Allied Irish Banks and Bank of Ireland duked it out for the distinction of being their country's best performing big financial stock today.
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Irish Banks
That bacon flavored air supposedly wafting around at the moment might only be an April Fool’s joke but for a couple little PIIGS, the aroma this afternoon did undeniably contain the sweet smell of success. Dublin duo Allied Irish Banks plc (AIB) and Bank of Ireland (IRE) duked it out for the distinction of being their country’s best performing big financial stock today. Granted some may say that’s a decidedly dubious honor, akin to being the world’s tallest leprechaun, but few can quibble with respective share price increases of 20.42% and 22.29%. The sharp upward moves on what are admittedly still beleaguered and perilously low-priced stocks comes after stress tests of the nation’s banking sector revealed it requires an additional €24 billion ($34 billion) in cash, in addition to structural overhaul.
Yusuf Heusen, a senior sales trader at London’s IG Index, wrote in a note that “Consensus seems to be that there’s little to fear for the consequences of the stress tests on Irish banks.” Skeptics have argued that similar continental stress tests have previously been suspiciously easy to pass, but today at least the market appears to be relieved by the removal of an element of uncertainty. For Bank of Ireland, the Emerald Isle’s largest lender, investors are applauding its intention to escape the government’s grasp by raising €5.2 billion ($7.4 billion) in additional capital.
The ruling party also announced restructuring plans which would make Allied Irish and Bank of Ireland the country’s two biggest banks, a move long suffering bondholders have also widely welcomed. This onetime ‘Celtic tiger’ has suffered through a real rough time of it in recent years and insult was added to injury when Merrill Lynch, long known as the ‘Irish mafia’ on Wall Street, effectively sent its taxpayers a €106 billion bill in property-related losses. (Click here for Michael Lewis’ gripping account.) Ireland is overdue a change of luck but lost in today’s euphoria was the news of another sovereign-debt downgrade by Standard and Poor’s, the third ratings agency to do so. With both banks' shares still down about 80% in the past year even after today’s surge, it may yet be a bit premature to break open the piggy bank.
Please see Irish Stress Test Results Require 3.5 Billion Euros Less Than Expected.
Swisher Hygiene
Ireland’s best known businessman, Ryanair (RYAAY) CEO Michael O’Leary, is apparently deadly serious in his plans to charge passengers a fee to pee. But based on today’s solid 3.66% increase in shares of Swisher Hygiene, Inc. (SWSH), he may make more money by investing in this Charlotte, North Carolina based provider of sanitation solutions. The 25-year old company offers assorted facility services, including restroom bowl, urinal, and sink cleaning, in addition to germicide application and restocking of air-fresheners and soap dispensers. It’s a dirty job but a nation of neurotics is extremely grateful someone is doing it. (The “pinky pull” doorhandle technique employed by public restroom germaphobes once even made it all the way to page one of The Wall Street Journal.)
Swisher, which also offers rental and cleaning of floor mats and mops, operates via 78 either company-owned or franchised outfits in the US and Canada and serves industries including foodservice, hospitality, and healthcare. Today’s increase, which at one point made it one of the Nasdaq’s top 25 performing stocks on a percentage basis, followed an announcement they are acquiring Tennessee-based based Linen Services Plus. Steven R. Berrard, CEO of Swisher, said “We continue to gear up our presence in the linen, warewash, and laundry markets and the purchases are another step in rounding out our full service coverage.” No less a of heavyweight investor than H. Wayne Huizenga certainly isn’t throwing in the towel on Swisher, having acquired a majority interest in November 2004.
Also check out PHOTO: Architect Designs “World’s Coolest” Standalone Public Urinal.
Office Depot
Like Swisher, Office Depot, Inc. (ODP) was founded in 1986 and its shares certainly went down the toilet this afternoon. On a day the Dow hit a high for the year, this Boca-based business supply powerhouse nosedived 9.07% after announcing the restatement of 2010 financial results following an Internal Revenue Service rejection of its claim for an $80 million tax benefit. Accordingly the specialty retailer will now swing to a steep loss of $46 million, or $0.30 on an EPS basis, from last year’s previously reported $33 million profit. Investors are in an unforgiving fool-me-once mode -- something similar occurred at the company in 2007 -- and S&P equity research promptly cut their price target by a steep $1.50 to $3.50 on the sell rated stock, which was already underwater to the tune of about 40% in the past 52-weeks amid a still-sluggish macroeconomic environment.
Chief Financial Officer Mike Newman admitted “we are disappointed” by the development and added that the restatement will adversely impact first-quarter 2011 operating cash flow. For a firm which once passed up an ad that showed disorganization at work, Office Depot may need to get its own house in order.
Logitech International
Those good folks at Guinness (DEO) have spent their time this week trying to ascertain whether Smokey the cat, whose purr has been recorded at a Boeing-beating 92 decibels, is the world’s loudest. (Maybe the market is premature in saying Ireland is out of of the woods after all, based its on lost productivity alone.) Well, at least we now know why the feline was so content; the world’s biggest maker of mice made for easy prey today. Logitech International SA (LOGI), which also makes assorted other computer peripherals, wireless devices, and digital gadgets, imploded 18.86%. This after our headline downgrade lowered its outlook for fiscal 2011 operating income to the range of $140 million to $150 million, down from previous guidance of $170 million to $180 million. Sales forecasts have also been cut to between $2.35 billion to $2.37 billion, again well off prior expectations of $2.40 billion to $2.42 billion and also shy of Street estimates of $2.41 billion.
Such a preannouncement is highly unusual from the Apline outfit, which is normally run with the efficiency of a Swiss watch. The company referenced sluggish demand in its European retail segment as a reason for the shortfall. March is also invariably a seasonally weak quarter for margins, compounding the problem. One small sliver for optimists to cling to is that there does not appear to be any cannibalization occuring in tablets.
Mouse Movements May Influence Google Search Rankings has more.
Lasting through April 15, 100% of the donations made to The Ruby Peck Foundation for Children's Education will be channeled to the children of Japan as they attempt to find their footing following this natural disaster; and to kick off this drive, we'll pledge $5000 to get it started. Please do what you can, as it will add up, and thanks.
That bacon flavored air supposedly wafting around at the moment might only be an April Fool’s joke but for a couple little PIIGS, the aroma this afternoon did undeniably contain the sweet smell of success. Dublin duo Allied Irish Banks plc (AIB) and Bank of Ireland (IRE) duked it out for the distinction of being their country’s best performing big financial stock today. Granted some may say that’s a decidedly dubious honor, akin to being the world’s tallest leprechaun, but few can quibble with respective share price increases of 20.42% and 22.29%. The sharp upward moves on what are admittedly still beleaguered and perilously low-priced stocks comes after stress tests of the nation’s banking sector revealed it requires an additional €24 billion ($34 billion) in cash, in addition to structural overhaul.
Yusuf Heusen, a senior sales trader at London’s IG Index, wrote in a note that “Consensus seems to be that there’s little to fear for the consequences of the stress tests on Irish banks.” Skeptics have argued that similar continental stress tests have previously been suspiciously easy to pass, but today at least the market appears to be relieved by the removal of an element of uncertainty. For Bank of Ireland, the Emerald Isle’s largest lender, investors are applauding its intention to escape the government’s grasp by raising €5.2 billion ($7.4 billion) in additional capital.
The ruling party also announced restructuring plans which would make Allied Irish and Bank of Ireland the country’s two biggest banks, a move long suffering bondholders have also widely welcomed. This onetime ‘Celtic tiger’ has suffered through a real rough time of it in recent years and insult was added to injury when Merrill Lynch, long known as the ‘Irish mafia’ on Wall Street, effectively sent its taxpayers a €106 billion bill in property-related losses. (Click here for Michael Lewis’ gripping account.) Ireland is overdue a change of luck but lost in today’s euphoria was the news of another sovereign-debt downgrade by Standard and Poor’s, the third ratings agency to do so. With both banks' shares still down about 80% in the past year even after today’s surge, it may yet be a bit premature to break open the piggy bank.
Please see Irish Stress Test Results Require 3.5 Billion Euros Less Than Expected.
Swisher Hygiene
Ireland’s best known businessman, Ryanair (RYAAY) CEO Michael O’Leary, is apparently deadly serious in his plans to charge passengers a fee to pee. But based on today’s solid 3.66% increase in shares of Swisher Hygiene, Inc. (SWSH), he may make more money by investing in this Charlotte, North Carolina based provider of sanitation solutions. The 25-year old company offers assorted facility services, including restroom bowl, urinal, and sink cleaning, in addition to germicide application and restocking of air-fresheners and soap dispensers. It’s a dirty job but a nation of neurotics is extremely grateful someone is doing it. (The “pinky pull” doorhandle technique employed by public restroom germaphobes once even made it all the way to page one of The Wall Street Journal.)
Swisher, which also offers rental and cleaning of floor mats and mops, operates via 78 either company-owned or franchised outfits in the US and Canada and serves industries including foodservice, hospitality, and healthcare. Today’s increase, which at one point made it one of the Nasdaq’s top 25 performing stocks on a percentage basis, followed an announcement they are acquiring Tennessee-based based Linen Services Plus. Steven R. Berrard, CEO of Swisher, said “We continue to gear up our presence in the linen, warewash, and laundry markets and the purchases are another step in rounding out our full service coverage.” No less a of heavyweight investor than H. Wayne Huizenga certainly isn’t throwing in the towel on Swisher, having acquired a majority interest in November 2004.
Also check out PHOTO: Architect Designs “World’s Coolest” Standalone Public Urinal.
Office Depot
Like Swisher, Office Depot, Inc. (ODP) was founded in 1986 and its shares certainly went down the toilet this afternoon. On a day the Dow hit a high for the year, this Boca-based business supply powerhouse nosedived 9.07% after announcing the restatement of 2010 financial results following an Internal Revenue Service rejection of its claim for an $80 million tax benefit. Accordingly the specialty retailer will now swing to a steep loss of $46 million, or $0.30 on an EPS basis, from last year’s previously reported $33 million profit. Investors are in an unforgiving fool-me-once mode -- something similar occurred at the company in 2007 -- and S&P equity research promptly cut their price target by a steep $1.50 to $3.50 on the sell rated stock, which was already underwater to the tune of about 40% in the past 52-weeks amid a still-sluggish macroeconomic environment.
Chief Financial Officer Mike Newman admitted “we are disappointed” by the development and added that the restatement will adversely impact first-quarter 2011 operating cash flow. For a firm which once passed up an ad that showed disorganization at work, Office Depot may need to get its own house in order.
Logitech International
Those good folks at Guinness (DEO) have spent their time this week trying to ascertain whether Smokey the cat, whose purr has been recorded at a Boeing-beating 92 decibels, is the world’s loudest. (Maybe the market is premature in saying Ireland is out of of the woods after all, based its on lost productivity alone.) Well, at least we now know why the feline was so content; the world’s biggest maker of mice made for easy prey today. Logitech International SA (LOGI), which also makes assorted other computer peripherals, wireless devices, and digital gadgets, imploded 18.86%. This after our headline downgrade lowered its outlook for fiscal 2011 operating income to the range of $140 million to $150 million, down from previous guidance of $170 million to $180 million. Sales forecasts have also been cut to between $2.35 billion to $2.37 billion, again well off prior expectations of $2.40 billion to $2.42 billion and also shy of Street estimates of $2.41 billion.
Such a preannouncement is highly unusual from the Apline outfit, which is normally run with the efficiency of a Swiss watch. The company referenced sluggish demand in its European retail segment as a reason for the shortfall. March is also invariably a seasonally weak quarter for margins, compounding the problem. One small sliver for optimists to cling to is that there does not appear to be any cannibalization occuring in tablets.
Mouse Movements May Influence Google Search Rankings has more.
Lasting through April 15, 100% of the donations made to The Ruby Peck Foundation for Children's Education will be channeled to the children of Japan as they attempt to find their footing following this natural disaster; and to kick off this drive, we'll pledge $5000 to get it started. Please do what you can, as it will add up, and thanks.
No positions in stocks mentioned.
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