Archive for December 19th, 2007
Filed under: Analyst upgrades and downgrades, Stocks to Sell, Green Stocks
I often find myself in agreement with my friend Tim Sykes. When I’m looking to make a trade, I often look at the chart and attempt to gauge the sentiment, just as he does. However, when I saw Sykes proclaim that LDK Solar (NYSE: LDK) had “further upside,” I had to give the opposite view.
I’m not going to try and concoct an argument against solar stocks. In fact, I’m sure solar technology will do huge things for the American energy crisis in years to come, but I know one thing after watching the market for several years — any sector or stock that gains a stubborn, cult-like following is probably going to end up suffering at some point in the future. The most cult-like stocks, in my opinion, are momentum stocks.
Don’t get me wrong, I play momentum stocks. However, I admit I’m just playing the greater fool game when I’m trading these stocks. In other words, I admit I’m just trying to be another person trying to pull money out of the market by buying an irrationally-priced asset and hoping to sell it at an even more irrational price. The problem comes when investors and traders come along and try to justify the valuation the stock is currently receiving. I’ve learned a lesson I’d like to share with momentum traders: don’t try to rationalize your buys by claiming the stock is ‘undervalued’ and looks long term, especially if that is way different from your normal decision making process that takes advantage of certain strengths you have cultivated over time.
Continue reading Stay away from LDK Solar
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Filed under: Apple Inc (AAPL), Newsletters, iPhone, Stocks to Buy, Best Stocks for 2008
For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
“My top conservative stock idea for 2008 is Apple Inc (NASDAQ: AAPL),” says Nate Pile, editor of Nate’s Notes. “Though the stock is likely to remain exceptionally volatile in the months ahead, we believe that shares of Apple will be trading significantly higher than they are today by the end of 2008.
“And, while most analysts and investors are continuing to focus on sales of iPods and iPhones as the primary catalysts for growth, we remain convinced that it will actually be the company’s computer division that provides the biggest upside surprises for investors over the next several quarters.
“After turning Apple’s fortunes around via the introduction of the iPod several years ago (and wooing a whole new generation of young computer users over to the Mac platform via the “coolness factor” associated with the iPod in the process), it appears that Steve Jobs is on the verge of duplicating the feat again.
“Only this time, he is doing it with an even more important group of potential customers — namely, corporate executives who, by all accounts, are loving their new iPhones just as much as college kids (and adults!) love their iPods.
Continue reading Best Stocks for 2008: More ‘buzz’ for Apple (AAPL)
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Filed under: Products and services, Google (GOOG)
 Google Inc. (NASDAQ: GOOG) has given me yet another reason to use its site: now you can get flight information through the Goog.
As expected, it’s easy to use. You simply type in the airline and flight number and presto — you can see if the plane is on-time or late (see the example to the right). It’s really cool stuff.
Interestingly enough, this may mean less traffic for travel sites, such as Expedia and Travelocity. But to continue its growth, Google needs to move new categories, right?
On this deal, Google has partnered with Conducive Technology, which is an enterprise solutions provider for the transportation industry. No doubt, this arrangement should get them some nice visibility.
For more on this feature, take a look at this post on the official Google blog.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates DealProfiles.com.
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Filed under: Bad news, Products and services, D.R.Horton (DHI), Toll Brothers (TOL), Housing, Federal Reserve
 For homebuilders like Hovnanian Enterprises Inc. (NYSE: HOV), Toll Brothers Inc. (NYSE: TOL) and D.R. Horton Inc. (NYSE: DHI), 2007 was a year to forget, and 2008 probably isn’t going to be that great either.
For Hovnanian, which today reported a fourfold increase in its fourth-quarter loss, times are going to be especially hard. The New Jersey company is selling off property at a furious pace, reducing its total land position by 47%, and will cut it further next year, according to Chief Financial Officer J. Larry Sorsby. During the fourth quarter, land sales rose to $64.15 million compared with $41.3 million a year earlier. Homebuilding revenue fell to $1.3 billion. Obviously, that’s a not a situation that’s sustainable for a company whose business is selling homes, not selling land. Shares of Hovnanian are down $2.09, or 24%, at last check to $6.45.
Continue reading When will the homebuilders’ misery end?
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Filed under: International markets, Market matters, Boeing Co (BA), United Technologies (UTX), S and P 500, Stocks to Buy, General Dynamics Corp (GD), Raytheon Company (RTN)
 In searching out investments for 2008 — what is likely to be a precarious stock market — I have been touting the defense industry for the last two months as one of the stories for next year in terms of growth and safety. A press release today noted: “The benchmark SPADE Defense Index (AMEX: DXS) currently has a year-to-date gain of 21.5%, nearly 20% better than the widely followed S&P500 broad-market index.”
Certainly this might have been expected in the aftermath of the September 11 tragedy, and given that the U.S remains at war in Iraq and Afghanistan. But this is just one aspect of the industry. Some companies like Boeing Co (NYSE: BA) are doing equally well in the private sector selling new planes and replacement parts for aging fleets.
Raytheon Co (NYSE: RTN) is heavily involved not just with airport security, but develops radar and monitoring systems for airport safety. This is of growing concern as the skies become more congested and airports more impacted.
United Technologies (NYSE: UTX) makes military helicopters that are also used for civilian fleets and fire fighting. UTX also is a world leader in the private sector owning Otis Elevator, Carrier Air Conditioning and more.
Continue reading Defense sector rolls over S&P 500 for 8th straight year
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Filed under: Options, SLM Corp (SLM)
 SLM Corp (NYSE: SLM) is recently down $4.68 to $24.19. SLM hosted a shareholder conference call this morning. SLM call option volume of 14,266 contracts compares to put volume of 8,780 contracts. SLM January option implied volatility of 88 is above its 26-week average of 42 according to Track Data, suggesting larger price movements.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
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Filed under: Corning Inc (GLW), Stocks to Buy
 Corning Inc. (NYSE: GLW), once a reliable but slow-growth kitchenware company, today represents one of the signature corporate transformation stories of the digital age.
Corning is one of the leading providers of fiber-optic cable, which, by the way, the company invented more than 30 years ago. Further, its substrates business did not draw Wall Street’s attention until technological advances enabled the price-competitive production of flat panel displays in flat panel televisions, desktop monitors and notebook computers.
Display technology currently accounts for about 43% of revenue, with analysts projecting solid revenue increases in the immediate years ahead. Or, in other words, as Samsung, Sharp and Sony (NYSE: SNE) go, so goes Corning, for the most part. Analysts also see impressive revenue gains for the company’s fiber-optic businesses, and its solid balance sheet and good cash flow add to GLW’s strong operational characteristics.
Continue reading Corning (GLW): Turnaround extraordinaire
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Filed under: Intel (INTC), Nokia Corp. (NOK), Sprint Nextel Corp (S), Stocks to Buy, Israel
Remember the January Effect? A phenomenon where stocks, especially small caps, rally from the end of December, through the first week of trading in January, as investors are able to buy into names that had been sold in order to recognize tax losses. This has been a forgotten strategy for investors over the last few years, but my hunch is that we will see it return stronger than ever this year. Why? Because some of these stocks have gotten crushed due to the market volatility since the summer, and their big losses were exaggerated by tax loss selling. Here are two picks that are poised to gain from the January Effect:
Federal Home Loan Mortgage Corp. (NYSE: FRE) - while not a small-cap, this stock nonetheless should be in store for a spike. The government-sponsored enterprise creates liquidity in the residential mortgage market by guaranteeing, purchasing, securitizing and investing in such loans. FRE has lost more than have of its value recently, and certainly part of that was caused by sellers looking for a loss.
Ceragon Networks (NASDAQ: CRNT) - The WiMax company has been in a downturn ever since it had trouble doing a secondary offering, which ended up being priced just before the announcement that Sprint/Nextel (NYSE: S) was exiting this WiMax network. Investors should look at this with a bit of perspective, as Intel (NASDAQ: INTC) and Nokia (NYSE: NOK) are all still forging ahead with the technology. My buddy Zack Miller has a nice analysis of this. Look for Ceragon to have a strong bounce over the next few weeks.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/19/07.
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Filed under: Earnings reports, Analyst upgrades and downgrades, Technical Analysis, Stocks to Buy
 In conveying goods from producer to consumer, protection of the product is always a primary concern. A leading manufacturer of containers used on the bulk shipping side of the equation is headquartered in Columbus, Ohio.
Greif Inc. (NYSE: GEF) produces containers and containerboard, mainly for bulk shippers in the chemical, food, petroleum, mineral, machinery and pharmaceutical industries. Products include drums, water bottles, pallets, corrugated containers and multiwall packaging. The firm also manages some 300,000 acres of North American timberland. The company maintains over 160 operating locations, in nearly fifty countries.
Greif pleased investors earlier in the month, when it reported Q4 EPS of $1.05. That was eight cents above the average Street estimate. Revenues rose 19.9 percent (y/y) to $882.3 million. Management also guided FY08 EPS to $3.80-4.00, versus consensus of $3.83. Deutsche Securities subsequently reiterated its “buy” rating on the shares and boosted its price target to $85.
Continue reading Greif Inc (GEF) shares forming a bullish ‘flag’ consolidation pattern
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