2008 February 13 | money blog

13 02 2008

Is Nintendo’s stock getting interesting again?

Posted by: in Stocks Money News

Filed under: Sony Corp ADR (SNE), Activision Inc (ATVI), Stocks to Buy

I used to own some of the Nintendo (OTC: NTDOY) ADRs that trade over-the-counter. I bought them last summer ahead of the holiday season at around $62 a share and sold the position last month for about $67 a share, intent on raising some cash in one of my accounts for better buying opportunities. I should have sold when the shares hit their 52-week high of approximately $78, but I didn’t — kills me, but I’ve moved on (I think).

But with the recent sharp drop in the shares, should investors be taking a look at Nintendo? I know I’ve been keeping an eye on the price action. Nintendo is definitely a major player this time around in the console cycle; Sony (NYSE: SNE) used to be king of the gamers, but now the sales/cultural buzz is definitely in the Mario-maker’s court. Not only is the Wii a major catalyst, but you have to respect the incredible popularity of the DS handheld system.

My gut is telling me that Nintendo hasn’t yet bottomed out. Identifying a bottom is a fool’s game, of course, but I’d like to see Nintendo develop a more stable base before I buy in again. For now, I own Activision (NASDAQ: ATVI) and Take-Two (NASDAQ: TTWO) as plays on the videogame growth story, but I am interested yet again in Nintendo.

Disclosure: Steven Mallas owns Activision and Take-Two, and is mulling a purchase in Nintendo.

Continue reading Intuitive Surgical’s technology is minimally invasive, maximally lucrative

13 02 2008

Intuitive Surgical’s technology is minimally invasive, maximally lucrative

Posted by: in Stocks Money News

Filed under: Stocks to Buy, Intuitive Surgical Inc (ISRG), Technology

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Intuitive Surgical. (Note: Intuitive Surgical is only for investors who can tolerate high risk.)

Intuitive Surgical (NASDAQ: ISRG) has developed the da Vinci Surgical System of software, hardware and optics that allows doctors to perform robotically-aided surgery from a remote console.

Analysts believe 2008 revenue will move substantially higher on instrument and accessories sales, pricing power and high-definition system upgrades. Yes, high definition is coming to surgery, too.

Longer term, analysts see Intuitive’s technology broadening to new surgical procedures. Margins remain massive and are likely to approach 75% in 2008. The Reuters F2008/F2009 EPS consensus estimates for ISRG are $5.05/$6.81.

Continue reading Hillary Clinton fading fast as Obama, McCain sweep Potomac primaries

13 02 2008

Hillary Clinton fading fast as Obama, McCain sweep Potomac primaries

Posted by: in Stocks Money News

Filed under: Politics, Presidential elections

Hillary Clinton’s chances of becoming the next president of the United States are fading fast.

Barack Obama swept the so-called Potomac primaries yesterday in Maryland, The District of Columbia, and Virginia, humiliating the New York senator by double-digit margins. On the Republican side, John McCain won a decisive victory over rival Mike Huckabee further cementing his front-runner status. The real story of the election, though, is the surging popularity of Obama.

The exit polls in the latest primaries probably are scaring the Clinton campaign to death. As The New York Times noted, “he received majority support from voters across all income and education levels, as well as across political ideologies, from those who described themselves as liberal, moderate and conservative Democrats. And independents, who were allowed to vote in Virginia’s Democratic primary and accounted for 2 in 10 voters there, supported Mr. Obama two to one over Mrs. Clinton.”

13 02 2008

Weekly mortgage applications decrease 3% on fewer purchases, refinancings

Posted by: in Stocks Money News

Filed under: Economic data, Housing

Mortgage applications decreased for the first week in six on a decline in both purchase and refinance activity, the Mortgage Bankers Association said today.

The Mortgage Bankers Association’s composite index decreased 2.1% last week to 1063.5 from 1086.6 a week earlier.

The refinance index decreased 3% to 4901.5 from 5054.0 the previous week and the seasonally adjusted purchase index decreased 0.3% to 403.9 from 405.3 one week earlier.

Meanwhile, the average rate for a 30-year fixed loan rose to 5.72% from 5.61% the prior week. The average rate for a 15-year fixed mortgage increased to 5.18% from 5.09%.

Economist Steve Affinito said mortgage rates remain relatively low, but mortgage activity is likely to remain sluggish for several quarters, as the sector resumes a more sustainable activity pace.

“Rates remain attractive, but with tougher underwriting standards and with just fewer people in the market for homes, mortgage activity will reflect the sector’s doldrums through at least Q3 of this year,” Affinito said. “And I must underscore it’s a borrower market that favors applicants with good credit histories.”

13 02 2008

Option update: Lowe’s and Home Depot elevated into EPS & outlook

Posted by: in Stocks Money News

Filed under: Home Depot (HD), Lowe’s Cos (LOW), Options

Lowe’s (NYSE: LOW) closed at $24.10 Tuesday.

LOW is expected to report Q4 EPS before the open on February 25.

LOW March option implied volatility of 46 is above its 26-week average of 37 according to Track Data, suggesting larger price movement.

Home Depot (NYSE: HD) closed at $28.38 Tuesday.

HD is expected to report Q4 before the market open on February 26.

HD March option implied volatility of 44 is above its 26-week average of 35, suggesting larger price movement.

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

13 02 2008

Delphi may not get money to exit Chapter 11

Posted by: in Stocks Money News

Filed under: Deals, Bad news, Annual meetings, General Motors (GM), Citigroup Inc. (C), JPMorgan Chase (JPM)

One of the nicest things about going into bankruptcy is coming back out. Unless, of course, no one will give you the money to start anew. Delphi, the large auto parts company, had $6.1 billion lined up to start business as a company out of Chapter 11, but the credit crunch is making that exit very difficult to fund.

JP Morgan (NYSE: JPM) and Citigroup (NYSE: C) were leading the group to supply Delphi with capital. But, they cannot lay-off some of the loans because hedge funds and other institutions don’t want the risky paper. GM (NYSE: GM), Delphi’s former parent might put up some of they money, but the car company may need its cash for making up loses at its North American operations.

The banks are not required to put up the money. According to The Wall Street Journal, “J.P. Morgan and Citigroup are bound only on a ‘best-efforts basis’ to arrange the loan.” In other words, they can dump the deal.

Raising money for a car parts company in the worst auto recession in two decade would be hard anyway. Perhaps Delphi should just stay in bankruptcy for a couple more years. The company might be better off.

Douglas A. McIntyre is an editor at 247wallst.com.

Continue reading Is Saint Warren a reinsurance sinner?

13 02 2008

Is Saint Warren a reinsurance sinner?

Posted by: in Stocks Money News

Filed under: Berkshire Hathaway (BRK.A), Amer Intl Group (AIG)

Warren Buffett, the most worshiped investor on the planet, is being accused of authorizing a sham reinsurance transaction to help American International Group (NYSE: AIG) cook its books. Meanwhile, more details of Buffett’s proposed reinsurance deal for the bond insurance industry suggests he has not lost any of his business savvy.

Bloomberg News reports that a lawyer for Ronald Ferguson, former General Re CEO, accused Buffett of approving a sham reinsurance transaction to help AIG cook its books. The trial suggests that in 2000 General Re aided phony accounting at AIG, and Buffett has so far been avoiding testifying in this trial.

Prosecutors claim the deal fraudulently helped AIG add $500 million in loss reserves, a crucial indicator of an insurer’s health. Ferguson, who reported to Buffett after Berkshire Hathaway (NYSE: BRK.A) bought General Re, is suggesting through his lawyer, Michael Horowitz, that Buffett knew details of the transaction and approved a $5 million fee that AIG paid to General Re.

Meanwhile, Buffett’s plan to rescue bond insurers through reinsurance would offer Berkshire an enormous profit.

13 02 2008

Option update: Blue Nile volatility at 126 as shares decline 27%

Posted by: in Stocks Money News

Filed under: Options

Blue Nile (NASDAQ: NILE), a leading online retailer of diamonds and jewelry, is recently down $14.64 (or over 27%) to $39.20 in pre-open trading.

NILE management indicated Q1 consumer spending on luxury goods is looking soft, and will likely impact future results.

RBCM has a target price of $55 on NILE. NILE over all option implied volatility of 126 it above its 26-week average of 65 according to Track Data, suggesting larger price movement.

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

13 02 2008

Google may have lost interest in Yahoo!

Posted by: in Stocks Money News

Filed under: Deals, Industry, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX), News Corp’B’ (NWS)

Depending on which measurement service regulators use, the No.1 and No.2 search companies could have 80% of the US market. The government might think that is a bit excessive.

Which is too say that the odds Yahoo! will lose its independence keep going up.

Douglas A. McIntyre is an editor at 247wallst.com.