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Closing Bell: Taking Back the Bernanke Loss from Yesterday (WFC, GDOT, USO, GS, ACF, DELL)

A rise in jobless claims was trumped by a housing number that was not so bad. There was also a rise in oil prices after NOAA released the path of Tropical Depression Three, revealing that it could be a threat to the Gulf of Mexico oil infrastructure. Regardless of the market move, this was another light-volume trading day. Ben Bernanke's testimony acted as a wash between yesterday and today because his lack of growth stance yesterday was negated today with more certain comments about new tools for the FOMC to use to counter a slowdown.

Here were today's unofficial closing bell levels:

Dow 10,345.76 +225.23 (2.23%)
S&P 500 1,093.66 +24.07 (2.25%)
Nasdaq 2,245.89 +58.56 (2.68%)

Top Analyst Calls

Continue reading Closing Bell: Taking Back the Bernanke Loss from Yesterday (WFC, GDOT, USO, GS, ACF, DELL)

Analyst Calls: GS, HCN, NLY, YHOO, GILD, BBG, WLL, JOYG, BUCY

Analyst upgrades:
  • Keefe Bruyette upgraded Goldman Sachs (GS) to Outperform from Market Perform with a $190 price target following the company's Q2 results. The firm believes the company's settlement with the SEC removes an overhang on shares.
  • Stifel Nicolaus upgraded Health Care REIT (HCN) to Buy from Hold based on valuation and added shares to the Stifel REIT Income List. The firm has a $47 target on the stock.
  • FBR Capital upgraded Annaly Capital (NLY) to Outperform from Market Perform citing the company's surprise dividend increase. The firm has a $20 target on the stock.
  • Devon Energy (DVN) was upgraded to Overweight from Equal Weight at Barclays.
  • Overseas Shipholding (OSG) was upgraded to Overweight from Underweight at JP Morgan.
  • Cintas (CTAS) was upgraded to Neutral from Underperform at Baird.

Continue reading Analyst Calls: GS, HCN, NLY, YHOO, GILD, BBG, WLL, JOYG, BUCY

Chasing Value: Shocked By Toxic Stock and Still Finding Deals

Yesterday I was shocked by the response to a poll I conducted in this very same column where I suggested that six out-of-favor stocks were a buy and would out perform the over all market. The results left me puzzled for several reasons.

For one thing I have been blogging for Aol. for over four years and I cannot remember an occasion that there was so much unanimity on anything before. I expected approximately equal votes for each of four possible responses to my question, and an appreciable number that might think I was off my rocker. Instead, I was jolted to a new reality when 84% of the respondents agreed that the six toxic stocks would outperform.

The six stocks are Bank of America (BAC), Citigroup (C), General Electric (GE), BP p.l.c. (BP), Goldman Sachs (GS) and Transocean (RIG). I thought I was taking a contrarian position and based on recent market activity that would seem to be the case. This raises another question. If my readers are any reflection of the market, how could the market move in the opposite direction of such overwhelming sentiment?

Continue reading Chasing Value: Shocked By Toxic Stock and Still Finding Deals

Goldman Sachs Second-Quarter Earnings Fall

Among the flurry of earnings announced this morning is banking behemoth Goldman Sachs (GS). The embattled firm announced that its second-quarter earnings fell to 78 cents per share. The bank was negatively impacted by its $550 million settlement with the Securities and Exchange Commission. GS also took a negative hit from a U.K. payroll tax.

Taking the two aforementioned charges out of the equation, GS would have earned $2.75 per share, easily topping the consensus estimate of $2.08. The problem is that those penalties cost the company dearly.

Continue reading Goldman Sachs Second-Quarter Earnings Fall

Chasing Value: Buying a Toxic Portfolio -- BP, RIG, C, GS, BAC and GE

Unless you are the ultimate contrarian, Friday was not a good day for the stock market. While there are always plenty of great companies to invest in, I've chosen a group of stocks that everyone else actually hates.

The stock market was none too pleased with the earnings reports from Bank of America (BAC), Citigroup (C) and General Electric (GE). I was quite surprised that the trio, which are the most heavily traded stocks on the market, jolted investors as they did. I think all three are a buy.

Not to leave out any of the recently orphaned stocks, let's add three more bad boys to the picture: BP (BP), Goldman Sachs (GS) and Transocean (RIG). They have been hurt by the misdeeds of management, which resulted in crushing blows to shareholders. These three stocks are very scary: The prospects for a turnaround remain bleak in most everyone's eyes, with little chance of the negative headlines or business improvement changing the outlook anytime soon. Could the timing be right to buy these monsters too?

Continue reading Chasing Value: Buying a Toxic Portfolio -- BP, RIG, C, GS, BAC and GE

Analyst Calls: GS, JPM, BHP, HES, VVUS, SNE, PG, MGM, HUM

Analyst upgrades:
  • Oppenheimer upgraded Goldman Sachs (GS) to Outperform from Perform following the company's $550M settlement with the SEC. Opco has a $213 price target for Goldman shares. BofA/Merrill upgraded Goldman Sachs to Buy from Neutral and raised its price target to $182 from $160.
  • Wells Fargo upgraded JP Morgan (JPM) to Outperform from Market Perform following the company's Q2 results citing valuation and lower credit costs. The firm keeps a valuation range for shares of $48-$51.
  • Goldman upgraded Murphy Oil (MUR) to Buy from Neutral and has a $61 price target on the stock. The firm cites Murphy's Eagle Ford growth and valuation for the upgrade.
  • Precision Cast (PCP) was upgraded to Outperform from Neutral at Credit Suisse.
  • Pride International (PDE) was upgraded to Buy from Hold at Jefferies.
  • BHP Billiton (BHP) was upgraded to Overweight from Neutral at HSBC.

Continue reading Analyst Calls: GS, JPM, BHP, HES, VVUS, SNE, PG, MGM, HUM

Goldman Settles with the SEC for $550 Million

If you are familiar with Securities and Exchange Commission cases, you will recognize this boilerplate settlement. By "boilerplate" I mean that Goldman Sachs (GS) is fined, but neither admits nor denies any of the charges.

Goldman settled for a measly $550 million. This amounts to about a week's worth of trading. Goldman further got regulators to drop all fraud charges and settle for a lower charge, which said the marketing material for collateralized debt obligations(CDOs) "contained incomplete information."

Continue reading Goldman Settles with the SEC for $550 Million

Options Update: Goldman Sachs Shares Rally into SEC Announcement

Goldman Sachs Group, Inc. (GS) is recently trading at $148.97 in after hours trading, above its close of $145.22. The SEC is expected to make a significant announcement today today concerning GS. GS is expected to announce Q2 EPS on July 20. GS total option volume today was 200K contracts. August put option implied volatility is at 39, October is at 38; near its six-month average of 37, according to Track Data, suggesting non-directional price movement

BP plc (BP) rallied 9% to $39.44 after saying oil flow stopped as part of the well integrity test. BP call option volume of 226K contracts compares to put volume of 144K. BP August put option implied volatility is at 59, below a level of 68 from July 15 according to Track Data, suggesting less risk.

Update is by Stock Specialist Paul Foster of theflyonthewall.com

Analyst Calls: AON, AMED, C, GS, HEW, ITW, JPM, MS, PPDI, TLB, URBN ...

Analyst Upgrades

  • Deutsche Bank upgraded Illinois Tool Works (ITW) to buy from hold, citing valuation and the company's strong revenue performance. The firm has a $60 price target for shares.
  • Goldman upgraded PPD Inc. (PPDI) to buy from hold and raised its price target to $31 from $28. The firm expects strong top line growth and bookings momentum for the upgrade.
  • Stifel Nicolaus upgraded Insituform Technologies (INSU) to buy from hold based on higher estimates for sewer rehab and energy. The firm has a $31 target on the stock.
  • Patterson-UTI Energy (PTEN) was upgraded to overweight from equal weight at Morgan Stanley.
  • Wisconsin Energy (WEC) and Northeast Utilities (NU) were upgraded to buy from neutral at UBS.
  • Rockwell Collins (COL) was upgraded to buy from neutral at BofA/Merrill.

Continue reading Analyst Calls: AON, AMED, C, GS, HEW, ITW, JPM, MS, PPDI, TLB, URBN ...

Analyst Calls: AMAT, AMRI, BP, BUCY, DB, FDO, GS, ISIL, THO ...

Analyst Upgrades

  • Soleil upgraded Thor Industries (THO) to buy from hold after the company said its accounting review will not lead to changes to previously taken accounting positions. The firm raised its target for shares to $45 from $28.
  • Citigroup upgraded Family Dollar (FDO) to buy from hold, citing valuation and its positive view on the dollar store industry. The firm upped its target for shares to $47 from $44.
  • Wells Fargo upgraded Albany Molecular (AMRI) to outperform from market perform, citing valuation and a stabilizing core business.
  • Goldman Sachs (GS) upgraded to overweight from neutral at JPMorgan.
  • Patterson-UTI Energy (PTEN) was upgraded to equal weight from underweight at Barclays.
  • BP (BP) was raised to buy from hold at RBS.

Continue reading Analyst Calls: AMAT, AMRI, BP, BUCY, DB, FDO, GS, ISIL, THO ...

Tesla IPO: Hot Stock or Portfolio Shock?

The long awaited Initial Public Offering (IPO) of Tesla Motors (TSLA) stock hit the market at $17.00 a share and it is up in a down market, trading between $18 and $19 throughout Tuesday morning.

I say stay away. First and foremost, investors should take note of the fact that most IPO's end up as losing propositions. In the case of Tesla, which lost over $55.7 million last year and will lose more this year, the bleeding has just begun.

The car manufacturing business is very capital intensive and Tesla only hopes to stem the tide in 2012 when it projects a production run of 20,000 Model S all electric sedans for $50,000 each.

Continue reading Tesla IPO: Hot Stock or Portfolio Shock?

Goldman Sachs Looking at an Image Makeover?

The Wall Street Journal has been all over Goldman Sachs (GS) during the past couple of days. First the firm was given an extension to respond to the SEC's lawsuit involving disclosures concerning a collaterlized debt obligation related to subprime mortgages. The previous deadline for a response was Monday, but U.S. District Judge Barbara Jones gave GS until July 19 to answer the SEC. According to the SEC, GS did not tell investors that Paulson & Co. helped select the underlying portfolio for a hedge fund.

Continue reading Goldman Sachs Looking at an Image Makeover?

Serious Money: Buffett Looking Beyond Our Borders -- Part 3

There are many places that Warren Buffett may choose to invest Berkshire Hathaway (BRK.A / BRK.B) capital. At the same time you can be sure there are places he will not set foot. It is not likely he will invest anywhere that does not have a vibrant, well-established stock market with a stable government. So, Mr. Hugo Chavez in Venezuela will not likely see any capital deployed from the likes of "my pal Warren" any time soon.

As a matter of fact, I would put the chances at slim of any South American country, besides Brazil, getting a look at all. Brazil is just too big and too vibrant to ignore. I would rule out Africa entirely except for indirect investments in oil and minerals through large conglomerates. The closest thing in the region would be Israel, at the furthest western reaches of Asia. He has already invested there and there is a high probability he would again. Investors from most of Europe and Asia have done the same, although many would rather not discuss it.

He has also invested in China, Great Britain, South Korea, and Switzerland. I would expect more money to be plowed into all of them again without reservation if the right deal materialized.

Continue reading Serious Money: Buffett Looking Beyond Our Borders -- Part 3

Serious Money: Buffett Looking Beyond Our Borders -- Part 2

Warren BuffettTrying to figure out what Warren Buffett will invest in next is no small task. Although, you can bet it will not be small. In fact, he may try to acquire whole companies because anything else might not move the needle when it comes to increasing shareholder value at Berkshire Hathaway (BRK.A / BRK.B).

This post is a follow up to Serious Money: Buffett Looking Beyond Our Borders, where I concluded that Buffett will seek an opportunity to invest in a company that is paying a dividend and has a very easy to understand product or service that will not become obsolete any time soon.

Continue reading Serious Money: Buffett Looking Beyond Our Borders -- Part 2

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Symbol Lookup
IndexesChangePrice
DJIA-1.2210,465.94
NASDAQ+3.012,254.70
S&P 500+0.071,101.60

Last updated: August 01, 2010: 01:47 AM

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