Filed under: Marketing and advertising, New York Times’A’ (NYT), Stocks to Sell

Predictably, shares of the New York Times Co. (NYSE: NYT) are down more than 2% today after Bank of America put a “sell” rating on the newspaper publisher, citing a potential downturn in advertising from luxury advertisers and from financial services companies in New York and Boston.

Analyst Joe Arns slashed his price target by 33% to $21 as he believes the company’s earnings before interest, taxes depreciation and amortizations could be 19% below Wall Street’s consensus forecasts assuming a “mild recession,” according to MarketWatch.

While I agree with Arns’ analysis, like most analysts he is a day late and a dollar short. Wall Street has put a “sell” rating on the stock a long time ago. Shares of the New York-based publisher are down more than 33% for the year even though the company posted BETTER-THAN-EXPECTED third quarter results. The stock trades under the $19.50 median target of analysts surveyed by Thomson Financial.

My hunch is that newspaper publishers are such a low priority for Wall Street firms that they could care less whether or not their ratings are the least bit timely.

Note: I have done freelance writing for the New York Times and Boston Globe.

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Filed under: Market matters, Bargain stocks

Super-investor William Ackman has a well-deserved reputation, but I have to admit being puzzled by his recent decision to raise his stake in bookstore chain Borders (NYSE: BGP) to 17.1%.

It’s a pretty classic contrarian bet. Borders has been hitting new lows of late on increasing losses and middling sales increases, but what does Ackman see here?

I have to tell you: I have no idea. Borders can’t compete with web-based retailers on price, and its big box bookstores have developed a Wal-Martesque reputation among a lot of book aficionados, who believe in supporting independent booksellers.

Of course, CD sales are in a terminal decline, and DVD sales will likely taper off at some point as new methods of delivery gain broader acceptance.

Some have suggested that Ackman is optimistic that Chinese-toy recalls will boost book sales for the holiday season. But I think Ackman is probably more long-term oriented, and wouldn’t be buying a 17% stake in a bet that the quarter will beat expectations.

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Filed under: Launches, Time Warner (TWX)

Rarely does any new online toy launch with features that seem better from those that were advertised in the mockups. But somehow, this next-generation dynamic quotes and company research site launched today by our parent, AOL Money & Finance, still blows me away. I’ve watched demos and made notes on large-format printouts of how it could be; I’ve listened to calls in which developers enumerated its benefits. I’m still giddy like a kid Christmas afternoon trying out her new toys, such as:

• Interactive charting. Sure, that could mean anything, but this is truly great. Hover your mouse over the chart to see the high, low, open, close and volume from the day in question, or see where earnings and dividends were announced. Compare with a competitor at the click of a mouse; add in any symbol to compare quickly (I wanted to compare two of my portfolio holdings, Apple Inc. (NASDAQ: AAPL) and Starbucks Corporation (NASDAQ: SBUX)). Clicking through to see seasonal performance shows trends (Apple often spikes at the end of November as investors anticipate holiday sales of gadgets and Macbooks and such).

Continue reading AOL Money & Finance launches new quotes experience

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Filed under: eBay (EBAY), Options

eBay (NASDAQ: EBAY) is recently up $1.67 to $34.19.

American Technology Research says: “We recommend that investors consider EBAY as a defensive play-the shares as attractively valued according to just about every traditional metric, EBAY offers insulation from a U.S. consumer spending slow-down via its substantial international exposure.”

EBAY December option implied volatility is at 33, January is at 38 and April is at 40. EBAY average option implied volatility over the last 26-weeks is 37 according to Track Data, suggesting decreasing near term risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Filed under: Market matters, Federal Natl Mtge (FNM), Personal finance, Housing

As expected, Freddie Mac (NYSE: FRE) announced a $6 billion preferred stock sale on Tuesday and told its investors that their dividends will be cut in half to just 25 cents so that it can hold on to enough cash to satisfy federal regulators. The dividend cut is Freddie’s first cut since the government-chartered enterprise became a public company in 1989.

Freddie hopes that the preferred stock sale will be enough of a cash infusion to offset losses from the subprime mortgage mess, or it could be forced to curtail future lending and sell off some of its portfolio of mortgages. If that happens the mortgage cash crunch already seen in the housing industry could get much worse. Private investors already have fled the market. If Freddie can’t play, then that puts the burden on Fannie Mae (NYSE: FNM), which also reported loses in the past quarter.

What will it mean to the market if Freddie has to cut back on lending? Less money will be available than there is now to buy mortgages on the secondary market. If banks that initially make the mortgage can’t sell it on the secondary market, then they will have to hold the mortgages in their own portfolios. By selling mortgages to the secondary market, which includes Freddie Mac, Fannie Mae, and whatever private investors or international banks are left to play in this volatile market, banks that initially loaned the money can then loan more money.

Continue reading Will Freddie’s $6 billion stock sale be enough?

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Filed under: Major movement, International markets, Forecasts, Products and services, Consumer experience, Middle East, Oil, Federal Reserve

It is hard to believe that just two days ago we were sitting here wondering if Monday would be the day we saw $100 a barrel for oil. Prices have been falling all week, and are moving sharply lower today following a bearish inventory report from the US Department of Energy.

Today’s report showed that last week oil inventories fell by 400,000 barrels. I have found two conflicting reports online where one showed analysts polled by Dow Jones were expecting to see a 500,000 barrel drop, and another article showed analysts expecting the 400,000 barrel decrease that we did see. Either way, the main point is that inventories did not drop more than expected, which is what is pushing prices lower.

Prices had already been showing signs of weakness earlier in the day on mixed messages from OPEC, and all week traders have been pushing prices lower on fears of an economic slowdown.

Continue reading Weekly inventory report pushes oil prices even lower

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Filed under: Deals, Private equity, News Corp’B’ (NWS), Dow Jones and Co (DJ), Technology

News Corp. (NYSE: NWS) reportedly is in talks to buy social networking site LinkedIn.

“A well-placed source has confirmed with us that these talks are serious,” writes VentureBeat’s Eric Eldon. “News Corp.’s strategy, from what we understand: Somehow integrate LinkedIn’s network with the Wall Street Journal as well as its other newspapers around the world, hopefully figuring out how to recoup News Corp.’s newspapers’ declining classified ad revenue in the process.”

The strategy makes sense. Plus, Murdoch is eager to bolster the company’s social networking business in the face of the rising popularity of MySpace. LinkedIn claims that 14 million professionals use it, representing every member of the Fortune 500. Its investors include Sequoia Capital, Greylock, the European Founders Fund and Bessemer Venture Partners.

As Murdoch has shown with the $5 billion acquisition of Dow Jones & Co. (NYSE: DJ), Murdoch is willing to pay up for something he wants and if shareholders benefit so much the better. Investors continue to be sour on the media sector and will be for a while considering the uncertainty surrounding advertising spending and the overall economy. Shares of News Corp., which recently said earnings were rising ahead of its forecasts, are down 3% this year.

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Filed under: Deals, Good news, Russia, Nokia Corp. (NOK), Options, Technical Analysis

Nokia Corp. (NYSE: NOK) shares are trading higher today after the company announced this morning that the Russian mobile operator MegaFon will offer a mobile e-mail service based on the Nokia Intellisync Wireless Email solution. The hosted service, which will be called MegaSync, will provide mobile e-mail, advanced attachment handling, calendar, contacts and other services to MegaFon’s customers. If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NOK.

After hitting a one-year low of $18.87 in January, the stock hit a one-year high of $42.22 this month. NOK opened this morning at $39.02. So far today, the stock has hit a low of $39.02 and a high of $39.56. As of 11:00, NOK is trading at $39.55, up $1.37 (3.6%). The chart for NOK looks bullish but deteriorating, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just 4 weeks as long as NOK is above $35 at December expiration. Nokia would have to fall by more than 11% before we would start to lose money.

Continue reading Nokia (NOK) higher on deal with Russian telecom carrier

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Filed under: Bad news, Housing

Existing home sales continued their downward spiral for the eighth consecutive month in October, the AP reported today based on a report from the National Association of Realtors. The 5.1% drop in the median price of a home sold compared to the same time a year ago is the biggest year-over-year price decline on record, according to the AP.

Of course, analysts blame this housing slump on the serious credit crunch, but we all know the housing bubble that burst has a lot to do with it too. Housing was in a bubble and as with all bubbles, prices went up much further than they realistically should have in many areas of the country. People who bought homes at the peak of the bubble are the hardest hit right now because their mortgages probably already are upside down (they owe more than the home is worth) if they bought in one of the hard-hit areas — California, Florida, Michigan and Nevada. Analysts don’t think this housing price drop is over. I’ve seen predictions of a drop of 10% to 30% in the next five years in some areas of the country. The hardest-hit areas already have seen a 30% drop or worse.

While I keep hearing people talk about subprime borrowers who default on their loans as idiots who should never have bought a home in the first place because they couldn’t afford the payments, the reality of the situation is that everyone is being hurt by the subprime mortgage mess, and even prime mortgages are now seeing strain. If something isn’t done to make it possible for people to save their homes from foreclosure, prices will only drop even more dramatically as more and more foreclosure homes are sold are fire-sale prices.

Continue reading Biggest existing homes sales price drop on record last month

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Filed under: International markets, Citigroup Inc. (C), Federal Reserve

The dollar rose to one-week highs against the world’s major currencies Wednesday, as currency traders took profits following extensive dollar declines over the past 10 weeks.

Traders said Abu Dhabi Investment Authority’s $7.5 billion investment in Citigroup (NYSE: C) contributed to the trading session’s pro-dollar sentiment, on the belief that deep-pocketed, patient global investors may be able to provide capital to help keep key credit markets liquid in the quarters ahead.

The dollar improved to $1.4768 against euro, to $2.0681 against the British pound, and to 109.70 yen against the Japanese yen.

Currency trader Andrew Resnick, formerly of Next Capital of New York, told BloggingStocks Wednesday that the dollar’s rise should not delude one into thinking there’s been a fundamental change in currency conditions:

“I see nothing changing structurally. We’ve got the U.S. trade deficit, a slowing U.S. economy, and the possibility of another rate cut by the Federal Reserve, so pressure will resume on the dollar,” Resnick said. “We may not see as many players in the carry trade, but the long-term bias remains dollar-lower.”

Continue reading U.S. dollar rises against major currencies

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