Ticker Shock: Chips Are Down for Nvidia; RIM Overreaches

Guys - are any of your wives hooked on the TV show, The Bachelor? Mine is, and I’ve got mixed feelings about it:  My wife glued to the television set gives me a few more personal hours, true. But do I want my wife checking out this good-looking guy a couple hours each week? Guess I'll opt for the personal time.

The Hang Seng was off more than 2% overnight while the Nikkei was closed on holiday. European stocks were moderately lower. And here in the US we are currently trading higher.

Here's what has my attention on this fine Wednesday morning:

Nvidia (NVDA):
 Last night after the close, the one-time high-flying California-based chip company disseminated its fourth-quarter numbers.

Man, I wish I had some good news here.

Unfortunately, excluding items it lost a hefty $0.18 a share, which was due south of the $0.09-a-share loss estimate I’m seeing. Its top line wasn’t exactly white-hot either. It's rev line came in at about $481.1 million, whereas analysts were looking for a smidge over $491 million.

The issue: Weak demand, pure and simple.

I feel like a broken record lately, but although I like the company, I can’t see a reason to get involved at this point. I think demand for graphics chips will eventually perk up, but I don't yet see a catalyst that tells me to get involved now.

Also, I’d point out that insiders haven’t apparently been bellying up to the bar lately, so why should I?

The bottom line here is that I’ll drop back 10 and punt. I’ll revisit the story in perhaps another month.

Toll Brothers (TOL):
 The big-name high-end homebuilder was out with some preliminary first-quarter data this morning.

Per the release:

“Home-building revenues were approximately $409.3 million (665 units), backlog was approximately $1.04 billion (1,647 units), and net (after cancellations) signed contracts were approximately $128.1 million (266 units). These totals represented declines of 51%, 56%, and 66%, respectively, in dollars, and 45%, 51% and 59%, respectively, in units, compared to FY 2008's first-quarter results.”

Not encouraging or surprising, I suppose.

If there was a bright spot (and maybe I’m reaching here), perhaps it was the following line that indicated a year-over-year improvement in cancellations: “In FY 2009's first quarter, the Company had 157 cancellations totaling approximately $115.0 million. This compared to 257 cancellations totaling $198.0 million in FY 2008's first quarter and 233 cancellations totaling $183.0 million in FY 2008's fourth quarter.”

I like this company - sincerely, I do. It has a fabulous reputation, and builds some of the most beautiful residential homes I’ve ever seen. However, based on this information, I don’t have the intestinal fortitude to hop aboard at this point. Plus, recent results from other homebuilders haven’t exactly built (pun intended) my confidence either.

I’ll keep it on my radar screen, though.