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Monthly Archives: May 2011

Flash: LinkedIn’s Market Cap Exceeds $8 Billion

To put this into perspective, here are some companies with market caps on the same level as the $15 million per year earner, LinkedIn.

No. Ticker Market Cap
49 LLL 8,970,000,000
50 RF 8,960,000,000
51 TIF 8,940,000,000
52 RYAAY 8,890,000,000
53 ALXN 8,880,000,000
54 SJM 8,850,000,000
55 MCO 8,830,000,000
56 RHT 8,800,000,000
57 RCL 8,800,000,000
58 CNC 8,800,000,000
59 FFIV 8,800,000,000
60 AUY 8,790,000,000
61 HOG 8,790,000,000
62 DTE 8,750,000,000
63 FTR 8,750,000,000
64 GPC 8,710,000,000
65 SNI 8,700,000,000
66 CMG 8,670,000,000
67 JCP 8,660,000,000
68 TAP 8,650,000,000
69 LZ 8,640,000,000
70 CX 8,620,000,000
71 SIRI 8,600,000,000
72 SLM 8,600,000,000
73 UAL 8,570,000,000
74 WDC 8,560,000,000
75 CBG 8,550,000,000
76 SIAL 8,520,000,000
77 AVGO 8,490,000,000
78 CIT 8,460,000,000
79 CRESY 8,460,000,000
80 BAP 8,310,000,000
81 OKS 8,310,000,000
82 ORLY 8,300,000,000
83 DNR 8,300,000,000
84 EGO 8,290,000,000
85 DVA 8,280,000,000
86 SHLD 8,250,000,000
87 RRC 8,250,000,000
88 CNA 8,200,000,000
89 MXIM 8,190,000,000
90 KEY 8,140,000,000
91 UNM 8,110,000,000
92 CNP 8,070,000,000
93 VAR 8,050,000,000
94 ESV 8,050,000,000
95 HRL 8,040,000,000
96 BX 8,030,000,000
97 WPI 7,990,000,000
98 PRGO 7,980,000,000
99 ROP 7,960,000,000
100 SRCL 7,950,000,000

Data provided by The PPT

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Dot Bomb Redux: LinkedIn

At current valuations, it is trading 520 times earnings. Great job Morgan Stanley.

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Japan officially in another recession

Japan’s economy shrank more than estimated in the first quarter after the March 11 earthquake and tsunami disrupted production and prompted consumers to cut back spending, sending the nation to its third recession in a decade.

Gross domestic product contracted an annualized 3.7 percent in the three months through March, following a revised 3 percent drop in the previous quarter, the Cabinet Office said today in Tokyo. The median forecast of 23 economists surveyed by Bloomberg News was for a 1.9 percent drop.

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Upgrades and Downgrades This Morning


GLUU – Glu Mobile initiated with a Buy at ThinkEquity

INCY – Incyte target raised to $25 from $23 at Oppenheimer

BMC – BMC Software target raised to $62 from $58 at Collins Stewart

TER – Teradyne assumed with a Buy at Citigroup

CHK – Chesapeake Energy upgraded at Lazard

SDT – SandRidge Mississippian Trust I initiated with a Perform at Oppenheimer

ANF – Abercrombie & Fitch target raised to $80 from $74 at Oppenheimer

CNW – Con-way upgraded to Buy at Stifel Nicolaus

BRS – Bristow Group upgraded to Outperform from Neutral at Credit Suisse

SODA – SodaStream 1Q results well ahead of expectations on strong sales; target raised to $60 at Oppenheimer

PRGO – Perrigo: Paddock deal looks even smarter with micro-k approval; no impact to F2011 numbers but nice early win – Needham

CMCSA- Comcast: Cable can continue to generate mid-single digit OCF growth – Wunderlich

JRJC – James River Coal initiated with a Buy at Deutsche Bank

SIX – Six Flags target raised to $84 at Oppenheimer

G – Genpact initiated with a Outperform at Oppenheimer

SXCI – SXC Health Solutions initiated with a Buy at Jefferies

NRP – Natural Resource upgraded to Buy from Neutral at UBS


INTC – Goldman downgrades the Semi Equipment sector to Cautious from Neutral

DE – Deere downgraded to Hold from Buy at Jefferies

SPLS – Staples and Office Max downgraded at Oppenheimer

EXLS – ExlService initiated with a Outperform at Oppenheimer

STP – Suntech Power downgraded to Neutral at Collins Stewart

NOA – North American Energy downgraded to Outperform from Strong Buy at Raymond James

VIT – VanceInfo Tech target lowered to $35 from $37 at Oppenheimer

SMT – Smart Tech downgraded to Neutral from Overweight at Piper Jaffray

AFL – AFLAC target lowered to $64 from $69 at FBR Capital

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Gapping Up and Down This Morning

Gapping Up

IRE +8.3%, WSTL +8.3%, HOTT +1.6%, OESX +13.6%, DB +1.9%, TOT +1.7%,LTD +1.3%, M +1% PETM +5.6%, SI +2%,

Gapping Down

KLAC -1.7%, INTC -2%, NTES -2%, AZO -1.9%,SMT -13.6%, AAP -7.3%, DTG -1.3%,MT -1.1%.ALKS -5.3%, ORBK -5%, CCSC -2.3%,

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A Lower Dollar Sets Up This Mornings Trade With Oil Higher

“(Reuters) – Gold pared some losses on Thursday as the euro edged up against the dollar and oil prices firmed but prices were still set for a daily decline as investors took their cue from currency markets.

Spot gold was bid at $1,494.69 an ounce at 1105 GMT, against $1,496.30 late in New York on Wednesday. U.S. gold futures for June delivery fell $2.4 to $1,493.5.

An early bounce in the euro helped gold to a session high near $1,500, with investors wary toward the dollar after minutes of a Federal Reserve meeting in April did not indicate the Fed was ready to start tightening policy any time soon.

“The resistance at $1,500-1,505 is getting increasingly formidable, and chances of gold breaking this in the near term seems to be grim,” said Pradeep Unni, senior analyst at Richcomm Global Services.

“Fed minutes revealed that the United States isn’t anywhere near a rate hike, and thus currency directions will be key,” he added. “Gains beyond $1,503 should be supported by a substantial drop in (dollar), which isn’t shown yet.”

Other commodities such as crude oil and base metals rose from the day’s lows as the dollar surrendered ground to the euro, although gains in the single European currency were tempered by concern about the euro zonedebt crisis.

Gold tends to track crude prices, as the metal is often bought as part of a basket of commodities in which oil is the dominant part, and because it is sometimes seen as a hedge against oil-led inflation.”

Full article

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What You Should Know About Silver

“There are some that since 2001 have doubted the bull market in precious metals.  In these past six weeks, however, everyone from former silver bulls to those who sell freeze dried chicken sh*t for a living are out shrieking the bears on the shriek factor. Do a google search and you will find hundreds upon hundreds of references to Hunt brother days. Bubble. Hunt Brothers. Suckers. Bubble. 1980. Bubble. Lose money. Bubble.

What the heck is going on???? Is the sky falling? Should we retreat?

Well, note that during every long, steady march up of a bull market, there are violent corrections down. And during every single one of these violent corrections, most of the media and many of the analysts will begin shrieking with fear or gloating with vengeance that the bull market is over. Read this editorial by Peter Schiff dated 2006 when silver corrected by 35% in 6 weeks. As you see, people were obviously shrieking that silver was in a bubble and now it was plummeting, popping and tumbling from I think it was $12 down to $9. No doubt Schiff will have received loads of hate mail from people who had ‘lost’ money by selling their silver after buying ‘at the bubble high’ on his recommendation. But without losers, there can be no winners in markets. It is because there are so many losers during a bull market that some can win. Their shrieks shake out even more losers, so the winners can win even more. Their loss is your gain….”

Full article

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Goldman Drops a Bomb on Intel

“The most dramatic call you’ll see today: A big fat SELL rating on Intel from Goldman Sachs.

A blue chip firm putting such a negative rating on a blue chip stock that’s been doing great always deserves some attention.

Here are the key points behind the rating from Goldman’s James Covello:

  • The 22% M/M growth in the stock post-earnings is way out of line.
  • Processor shipments are going to slow over the course of the year, in part because processors have been outselling PCS, and thus there’s a catch-up effect.
  • Due to average selling price declines and excess capacity, 2012 sales will be flat.
  • Increased competition from ARM-based processors in tablets will also hit the company.

In a related note, Goldman also has bearish commentary on the rest of the semiconductor industry:

  • Inventory at all notebook makers are growing.
  • 2010-2012 period is seeing huge capacity increases for the whole industry that will lead to oversupply.
  • During past cycles, equipment orders declined in each of the past two quarters following the cyclical peak.

The firm also downgraded KLA to Sell and Applied Materials to Neutral.

Read more: http://www.businessinsider.com/goldman-sachs-downgrades-intel-to-sell-2011-5#ixzz1MnXnIAiA

Full article

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Hedge Fund Mgr. David Murrin: Sell Dollar as U.S. Influence Ebbs

“The recent rally for the dollar will not last and should be used as a chance to short the greenback as America’s geopolitical influence ebbs away, according to David Murrin, a hedge fund manager and author of Breaking the Code of History

“US political influence ebbs by the day and unlike the UK, which handed the burden of empire to the US, America cannot pass on the responsibilities of being the West’s policeman to anyone.” said Murrin, who runs the Emergent Asset Management fund.

As President Barack Obama prepares to make a landmark speech on US policy in the Middle-East, Murrin said his decision to cut $400 billion from the defense budget was the wrong call.

“The commitment to cut $400 billion from the US defence budget at a time when the appraisal of the new Chinese J20 fighter as regional game changer in the strategic balance suggests that madness is infectious; he must have been spending too much time with (UK Prime Minister) David Cameron,” Murrin said.”

Full article

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Staples Reports a Flat Q and Guides Lower on U.S. Outlook

“The office supply retailer’s Q1 EPS was flat at 28 cents, falling 4 cents below projections, as efforts to gain market share with more sales staff and lower prices hit profits. Sales edged up 2% to $6.17 bil, also falling shy of expectations. Same-store sales slipped 1%. Staples (NASDAQ:SPLS – News) said it is having a hard time passing on price increases to contract customers who are resistant to absorbing such costs. It sees little improvement in the U.S. economy this year and cut its full-year EPS outlook to $1.35-$1.45, below views. Shares tumbled 15.4% to 16.63.”

Full report

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Sears Misses on Weak Sales in the U.S. and Canada

“NEW YORK (Reuters) – U.S. retailer Sears Holdings Corp (SHLD.O) reported a wider-than-expected quarterly loss as sales at its namesake stores plunged both at its home turf and in Canada.

Like rivals Wal-Mart Stores Inc (WMT.N), Home Depot Inc (HD.N) and Lowes Cos (LOW.N), Sears has seen demand for appliances fall after a government stimulus for energy-efficient models ended last year. Many U.S. shoppers continue to look for incentives to buy expensive items like washers and refrigerators.

Bad weather in many parts of the United States, Sears’ main market, also hurt sales of spring goods and kept shoppers away from stores.

The operator of Sears department stores and the Kmart discount chain has also faced criticism for relying too heavily on cost-cutting to boost profits rather than improving its merchandise mix and customer service.

Sales at the company have fallen every year since it was formed through the merger of Sears and Kmart in 2005.

Sears reported a net loss of $170 million, or $1.58 a share, for the first quarter ended on April 30, compared with a year-earlier net profit of $16 million, or 14 cents a share.

Excluding items, the loss was $1.39 a share, while analysts on average expected only a loss of $1.22, according to Thomson Reuters I/B/E/S.

In early May, Sears estimated the loss at $1.35 to $1.81 per share. It also reported a 3.6 percent drop in sales at its U.S. stores open at least a year, including a 5.2 percent decline for its namesake brand and 1.6 percent at Kmart.”

Full report

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A Look Into AIG’s Annual Report Will Make You Shake in Your Boots

“Look through the footnotes in American International Group Inc. (AIG)’s latest annual report, and you will see a long section analyzing the company’s ability to use past losses to offset future income-tax obligations.

The gist: AIG’s executives have gazed into their crystal ball and concluded that the company’s prospects don’t look good. That dim outlook may help explain why the U.S. Treasury Department seems so anxious to begin reducing its 92 percent stake in the bailed-out insurance company, after a 36 percent drop in AIG’s stock price this year.

The disclosures to watch here have to do with an item known asdeferred-tax assets. Typically these consist of tax- deductible losses and expenses carried forward from prior periods. Companies can use these to lower future tax bills.

Under generally accepted accounting principles, such carry- forwards are valuable only to companies that are profitable and paying income taxes. If a company doesn’t expect to fully use these assets, it’s required to record what’s called a valuation allowance on its balance sheet to reduce their carrying amount.”

Full article

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Chrysler Expected to Pay Back Loans From the U.S. and Canada

“Chrysler Group LLC plans to repay U.S. and Canadian government loans on May 24, clearing the way for Fiat SpA (F)to increase its ownership in the U.S. automaker, two people familiar with the plans said.

Chrysler, based in Auburn Hills, Michigan, is marketing as much as $7.5 billion of debt to repay the U.S. Treasury and Canadian governments for money loaned as part of its 2009 bankruptcy restructuring.

The automaker said last month it would repay the loans, allowing Fiat to exercise an option to increase its stake to 46 percent from 30 percent. The new debt is expected to price today, and three business days are planned to complete details before the money changes hands, said one of the people, who asked not to be identified because the plans are private.”

Full article

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European Markets Trade Higher on Glencore IPO and Fed Speak

“European stocks rose after the U.S. Federal Reserve signaledinterest rates will remain low and metal prices advanced on bets Chinese demand will escalate, boosting confidence in a global economic recovery. U.S. futures climbed and Asian shares fell.

Glencore International Plc advanced 1.8 percent on its first day of trading in London after it sold $10 billion of stock in an initial public offering. BP Plc (BP/) climbed 1.9 percent as BofA Merrill Lynch Global Research advised buying the shares. Pandora A/S, the Danish maker of jewelry, slumped 15 percent after saying it has lifted prices globally for the first time in its history because of rising silver and gold costs.

The Stoxx Europe 600 Index gained 0.9 percent to 280.57 at 10:58 a.m. in London. The gauge is still down 3.7 percent from this year’s high on Feb. 17 as a selloff in commodities and concern the debt crisis will derail the economic recovery overshadowed company profits and government stimulus measures. Futures contracts on the Standard & Poor’s 500 Index expiring next month rose 0.4 percent. The MSCI Asia Pacific Index dropped 0.3 percent.”

Full article

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