There have been many lessons to learn from the "Great Recession." But while the message is often clear, we can't always muster the courage, discipline or consensus to act on these lessons.
The National Basketball Association (NBA) is about to enter its second season -- the playoffs. And for a Laker fan in Los Angeles, there is much to look forward to. However, the current NBA collective bargaining agreement will end and we will have to witness another battle between the billionaires and the millionaires.
Why can't the NBA learn from other businesses that have successfully maneuvered through economic turmoil to achieve profitability?
Continue reading Chasing Value: The NBA Should Learn from Others
The other shoe hit the fan Wednesday when Newcastle Investments (NCT), one of my up-and-down picks for the year announced the pricing for a 15 million common share stock offering -- six bucks! -- considerably lower than the 52-week high of $8.85 the stock reached last month.
NCT closed Wednesday March 23 at $6.02.
In making this move, management seeks to raise $85.6million for future investments and operations. This is the management that guided the company back from the grave. I know, since I bought in at 60 cents. But with 62 million shares outstanding, the 25% dilution is a huge move. What are they thinking?
Continue reading Chasing Value: Newcastle Shares Drop to Offering Level
General Motors (GM
- option chain
) stock is trading lower today after company CFO Chris Liddell announced his resignation effective April 1
. GM posted four straight profitable quarters under Liddell and successfully pulled off a major IPO after repairing massive accounting issues. GM said Treasurer Dan Ammann will replace Liddell. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GM.
This morning, GM opened at $31.47. So far today the stock has hit a high of $31.78 and a low of $30.95. As of 12:05, GM is trading at $31.51, down $0.74 (-2.3%). The chart for GM looks neutral and S&P
gives GM a neutral 3 STARS (out of 5) hold ranking.
Continue reading GM Announces Surprise CFO Resignation
When dealing with large companies, have you ever felt you were living through a scene from a Seinfeld episode?
In January Wells Fargo (WFC) completed a majority of its integration with Wachovia, and I fear it will take years working out the bugs in the system. I say this because I am a major client, shareholder and trader dealing with the company on numerous levels, and the past few weeks would be comedic if not so infuriating.
Continue reading Chasing Value: Wells Fargo, a Seinfeld Episode?
There is a very small (micro-cap) insurance company in Florida called Homeowners Choice, Inc. (HCII
) that I included among my stock picks
for 2011. My suggestion was made with some reservations, not because of it's growth potential, but because I was concerned that the write-up itself might impact the stock.
Yesterday, March 8, HCII reported it's 13th straight quarter of profitability with Q4 earnings of 27 cents per share versus anticipated earnings of 14 cents.
At the time of the initial post HCII was $8.08. It was $8.50 at today's opening and has been hovering around that mark most of the trading day. That equates to a 5.19% gain in 9 weeks (30% annualized).
Continue reading Chasing Value: Homeowners Choice Earnings, Another Great Quarter
Warren Buffett's Berkshire Hathaway (BRK.A) is sitting on $38 billion in cash. Buffett sent a 26-page letter to investors on Saturday, describing his forthcoming goals for this year. Some highlights of the letter are reported in Reuters.
First off, like many other large corporations Berkshire Hathaway has been hoarding cash. Now, Buffett feels that it's time to invest his bundle. He is actively searching for big deals. Reuters quotes him as saying: "Our elephant gun has been reloaded, and my trigger finger is itchy."
Continue reading Buffett's 'Trigger Finger Is Itchy' for Deals
We've oft heard the saying: "We must reinvent ourselves." This is the new mantra at eBay. According to chief executive John Donahoe: "Clearly, I hope you see that we are starting to play offense."
EBay (EBAY) has long been a dominant player in the e-commerce industry. Started in 1995, it has brought together buyers and sellers in an auction format. Now, 16 years later and highly successful, the company finds a new competitor in Amazon.com (AMZN), which is grabbing market share. In the meantime, eBay has acquired Paypal, as a wholly owned subsidiary. Paypal, an online payment service, helped to propel eBay's business transactions.
Continue reading A Makeover for eBay
Citigroup, Inc. (C) could have done better. Revenue from bond trading took a big hit. John Gerspach, Chief Financial Officer acknowledged that fixed income was weak and needs fixing.
Citi's profit was $1.3 billion compared with the year earlier loss of $7.6 billion. Revenue more than tripled to $18.4 billion from $5.4 billion a year ago. However it fell 11% from the third quarter. Citi has been aggressive in hiring more bankers causing expenses to rise. Earnings per share were four cents compared with a loss of 33 cents a year ago, as reported in the Wall Street Journal.
Continue reading Citigroup's Earnings Dragged Down by Bond Traders
"By now, everyone probably knows that Apple (AAPL) CEO Steve Jobs will be taking another medical leave of absence," says Geoffrey Seiler.
The editor of BullMarket.com explains, "We'd use the weakness in Apple shares to accumulate the stock. The last time Job took medical leave was in 2009 when the stock was trading in the mid $80s.
"Chief Operating Officer Tim Cook will take over the day-to-day operations while Jobs is on leave. Cook previously filled in for Jobs in 2004 when Jobs was battling pancreatic cancer and in 2009 when Jobs was recovering from a liver transplant.
Continue reading Apple (AAPL): Time to Accumulate
So it looks like COO Tim Cook will be in charge again over at Apple (AAPL). CEO Steve Jobs said Monday that he is taking another medical leave of absence, leaving responsibility for day-to-day decisions to Cook.
This is the third time Cook took up the reins, the first in 2004 when Jobs recovered from surgery for pancreatic cancer, and again in January through June of 2009 when Jobs had a liver transplant. Many people consider Cook to be Jobs's logical successor.
Continue reading Steve Jobs Takes Another Medical Leave
Advanced Micro Devices (AMD - option chain) stock is trading lower today after the company announced the resignation of CEO Dirk Meyer, naming Thomas Seifert interim CEO. Investors are surprised by this announcement, since Meyer took over AMD when the company was floundering and has since stabilized AMD. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AMD.
This morning, AMD opened at $8.77. So far today the stock has hit a high of $8.80 and a low of $8.35. As of 12:25, AMD is trading at $8.49, down $0.70 (-7.6%). The chart for AMD looks neutral and S&P gives AMD a neutral 3 STARS (out of 5) hold ranking.
Continue reading AMD CEO Steps Aside Suddenly
I have already gone on record this year saying that financial companies and insurance stocks are going to continue to rebound. In my previous two posts Chasing Value: 2011 Stock Picks -- 5 of 11 and Chasing Value: 2011 Stock Picks -- 6, 7, 8, 9, I included several financial institutions. Today I add an insurance company.
The industry got whacked hard for many reasons. For one, it makes a significant amount of profit by investing its float, and like every other investor, the industry lost a pile of money in the financial crisis. It was embroiled more directly than some industries, as several insurers are affiliated with banks. Finally the housing crisis meant disruption to payment streams by homeowners who were delinquent on more than their mortgages.
Continue reading Chasing Value: 2011 Stock Picks -- 10 and 11
Sources close to the social network Linkedln say it is planning to go public, as reported in Reuters. It has filed statements with the Securities and Exchange Commission. Owner Jeff Weiner told Reuters that he has selected Morgan Stanley (MS), Bank of America (BAC) and JP Morgan (JPM) as book runners. Book runners take the original stock offering and then resell it to retail clients.
Linkedln is a fast growing social networking site with 85 million viewers. Financial information is not available. Company revenues come from advertising. A source close to the company values it at about $2.2 billion.
Continue reading Social Network Linkedln to Go Public in 2011
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