An excellent interpretative report by Bloomberg News Friday summarized the two-edged sword nature of continued U.S. productivity growth, and it's one investors should review.

Here's the low-down:

U.S. worker productivity, which increased 1.3% in the third quarter, is creating even-more-lean U.S. corporations. Productivity has also risen at an impressive 3.4% annualized rate over the past five quarters.

Continue reading U.S. Productivity, Increased Efficiency Continue to Aid Corporate Bottom Lines

U.S. Productivity, Increased Efficiency Continue to Aid Corporate Bottom Lines originally appeared on BloggingStocks on Wed, 24 Nov 2010 18:00:00 EST. Please see our terms for use of feeds.

The tail-end summer heat has been heavily attributable to the mergers and acquisitions blaze. Companies are putting their cash to work on public companies fetching discounted equity prices in a market environment favoring safety (e.g., gold and bonds).

Recently, Hewlett-Packard (HPQ) edged out Dell (DELL) for the 3Par deal award. With an eye toward the future, HP displayed their powerful desire to own a piece of the data storage and cloud computing pie. Since Dell ended empty-handed, it's only a matter of time before the next stock is a tech heavyweight's prime target.

Continue reading Is Brocade the Next 3Par?

Is Brocade the Next 3Par? originally appeared on BloggingStocks on Wed, 08 Sep 2010 12:40:00 EST. Please see our terms for use of feeds.

In this week's (November 9) Preview Section of Barron's (subscription required) I was surprised to find that on Wednesday (11/9) it is noted that Computer Sciences (CSC), Applied Materials (AMAT), and Macy's (M) reported "profits." How do they know this?

On other days they refer to the "earnings" of various companies reporting. Perhaps I am splitting hairs, perhaps it is editorial haste (like you might find on our site), or perhaps there is no difference in some people's minds? From my perspective there is a difference between earnings and profits. Every quarter, public companies report their earnings. They do not always report a profit.

Continue reading Sunday Funnies: Barron's predicting profits?

Sunday Funnies: Barron's predicting profits? originally appeared on BloggingStocks on Sun, 08 Nov 2009 18:40:00 EST. Please see our terms for use of feeds.

Good news: profits are back. Bad news: it hurts like hell to get them.

With Q2 reports starting to come in, several high-profile companies have turned in positive results, and a few -- like Caterpillar (NYSE: CAT), IBM (NYSE: IBM), Pfizer (NYSE: PFE), 3M (NYSE: MMM), and Lowe's (NYSE: LOW) -- have even upped the ante for the rest of the year.

Expectations were low, making the outcomes look surprisingly strong. According to a Thomson Reuters, a third of the biggest companies in the United States that have turned in their Q2 results, and 76% of them have beaten analyst expectations. Less than a fifth of them are losing money.

Continue reading Profits are up, but for how long?

Profits are up, but for how long? originally appeared on BloggingStocks on Sun, 26 Jul 2009 11:40:00 EST. Please see our terms for use of feeds.

Quarterly earnings could be up year-over-year by the fourth quarter. A low threshold for improvement, as a result of last year's Q3 financial meltdown, could set the stage for the appearance of a recovery, but the ride from here to there will be a difficult one.

Data from Bloomberg and S&P suggests that profits for stocks comprising the S&P 500 Index may be down 21% next quarter. It's still a double-digit blow, but a better result than Q2's estimated 34% -- and far ahead of Q1's 60% year-over-year fall in profits. The driver of a recovery, however concealed by low expectations, is likely to be a combination of unemployment and consumer spending. Last month, we saw unemployment reach a 26-year high, putting obvious constraints on purchasing.

Continue reading Q2 to be tough on earnings, but some improvement

Q2 to be tough on earnings, but some improvement originally appeared on BloggingStocks on Mon, 06 Jul 2009 09:30:00 EST. Please see our terms for use of feeds.

Last night it was reported by Reuters, following up on an interview in the Financial Times (subscription required) that James Hackett, chairman and chief executive of independent oil and gas company Anadarko Petroleum (NYSE: APC) said, "Washington's energy and environmental policy risks plunging the United States into an economic tailspin that could make it the world's cleanest third world country."

Seems he is not partial to the global warming crowd as indicated by his statement that "The histrionic and maniacal focus on carbon dioxide is intellectually repugnant to me," but how does he really feel?

Continue reading US: The world's cleanest third world country

US: The world's cleanest third world country originally appeared on BloggingStocks on Tue, 14 Apr 2009 12:50:00 EST. Please see our terms for use of feeds.

This should be the new mantra for all investors: show me the money. In other words, companies can talk all they want about cutting costs or new products or turning the corner or slicing dividends. What investors need to see is profits. Until those start showing up, investors will mostly stay on the sidelines.

There's plenty of talk, very little proof, that stocks might be able to do better. We've seen a decent rally lately. There's piles of cash at venture firms or equity funds, just sitting, waiting to pounce on bargains. But until that money is put to work, it's all talk, no action. Until institutions start moving their money into this market by buying stocks or outright purchases of companies, many individual investors will be interested observers, not participants. They want to see money move from the bench into the game. Then they'll follow suit.

Continue reading Comfort Zone Investing: Show me the money!

Comfort Zone Investing: Show me the money! originally appeared on BloggingStocks on Sat, 21 Mar 2009 10:30:00 EST. Please see our terms for use of feeds.

Continue reading So you want to know what a 'growth-recession' looks like? Look around

So you want to know what a 'growth-recession' looks like? Look around originally appeared on BloggingStocks on Fri, 01 Aug 2008 16:21:00 EST. Please see our terms for use of feeds.

Continue reading YouTube was costly -- has it become RubeTube?

YouTube was costly -- has it become RubeTube? originally appeared on BloggingStocks on Mon, 07 Jul 2008 14:02:00 EST. Please see our terms for use of feeds.

The revised statistic is a substantial increase from the preliminary 4.9% Q3 productivity increase announced by the department a month ago.

"All in all, it's a great productivity number for the quarter, which leads to a good annualized rate," economist David H. Wang told BloggingStocks Wednesday. "This will relieve some inflationary pressure in the economy, and also give the Federal Reserve some leeway regarding interest rates. The Fed can now see that labor is not adding that much to inflationary pressures in the U.S. economy."

Over the past 12 months non-farm business productivity has increased 2.7%, the largest four-quarter gain since late 2004. During Q3, manufacturing productivity increased 5%, while non-financial productivity gained 4.2%.

Economic Analysis: The high Q3 productivity stat is good news for the economy, employers, and employees. With high productivity, the U.S. economy can grow rapidly without inflation, easing pressure to raise prices. This simultaneously means worker productivity per hour is rising, which usually leads to raises, higher real incomes, and higher living standards. After registering productivity giants that averaged 2.5% per year for 1996-2005, productivity had slowed to about 1% in 2006. With the revised Q3 2007 stat, there's now additional evidence that productivity has resumed advancing at an impressive rate.

U.S. productivity surges 6.3% in Q3 originally appeared on BloggingStocks on Wed, 05 Dec 2007 11:05:00 EST. Please see our terms for use of feeds.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX up .27 to 10.59.

New Century Financial Corp. NYSE: NEW implied volatility bid up as NEW sells off on restatement. New Century Fin'l, a real estate investment trust, providing mortgage products to borrowers nationwide, is recently down $8.72 to $21.45. New Century Fin'l announced it will have to restate operating results for the first three quarters of 2006. Merrill Lynch downgraded NEW to Sell, Jeffries lowered to Hold & Friedman Billings downgraded NEW to Underperform. NEW March option implied volatility of 69 is above its 26-week average of 42 according to Track Data, suggesting larger price risks.

H&R Block-NYSE:HRB April option implied volatility & put volume elevated on hedging. H&R Block is recently down $.30 to $24.54. Soleil said on 2/7/07 "we rate H&R Block Buy; $29 price target. We believe Block is close to entraining sale of the company (whole or in parts)." H&R Block call option volume of 2,945 contracts compares to put volume of 42,299 contracts. HRB April option implied volatility of 33 is above its 26-week average of 26 according to Track Data, suggesting larger price fluctuations.

Option volume leaders today were: Cisco-(NASDAQ-CSCO), Akamai (NASDAQ: AKAM), Bristol Meyers Squibb (NYSE: BMY) and Apple Computer (NASDAQ: AAPL).

Daily Option Update - February 8, 2007 originally appeared on BloggingStocks on Thu, 08 Feb 2007 15:50:00 EST. Please see our terms for use of feeds.

ExxonMobil Corporation (NYSE:XOM) made headlines reporting an annual profit of $39.5 billion. So what?!

So what if a company capitalized at $440 billion earns less than 10% profit. Suppose you bought the entire company "lock, stock and barrel"; wouldn't you expect to make far greater than that? You would be taking on a massive amount of responsibility and risk! Currency risk, political risk (you go deal with Putin in Russia and Chavez in Venezuela, or worse in Iraq or Iran or Africa), workman's comp for oil derricks in the Gulf Coast and elsewhere, environmental risk, government regulation -- the list is endless.

When I invest, my anticipation is at least a 10% return. Who in the entire investment world would do this, unless of course you were buying bonds paying 5% to 7% without any work. The 70-year stock market average is about 10%.

There is nothing wrong with Exxon Mobil's profit, given its size. It would be sad if they could not make 10%, and consider that they only made this with very high oil prices! If the profits were so high and prospects so good, why isn't there a run on the stock?

Continue reading $39.5 billion ExxonMobil profits: no big deal

$39.5 billion ExxonMobil profits: no big deal originally appeared on BloggingStocks on Wed, 07 Feb 2007 17:35:00 EST. Please see our terms for use of feeds.

I've been waiting for Yahoo! Inc. (NASDAQ:YHOO) to do something, anything to create some manner of tangible credibility within my thinking. You see, it's not enough for me if a company is just piling up dollars. Yeah, dollars are good and mega profits are exciting but right or wrong, I require more than that to get a good feeling about any company.

I've seen profits dry up quickly from companies which thought they were sitting pretty. I want to see lively management making powerful strides to establish a dominant position. I want to see experimentation, pushing of boundaries, innovation with existing infrastructure, disregard of the status quo. These are some of the things which earn my increased attention to a company.

Continue reading Yahoo! finally pushed me off the fence.

Yahoo! finally pushed me off the fence. originally appeared on BloggingStocks on Wed, 24 Jan 2007 14:20:00 EST. Please see our terms for use of feeds.

Shortly after the market closed today, Yahoo! posted its first quarter report. It was not too much of a surprise for those of us who follow tech stocks, but Yahoo!'s profits fell to $160 million, or 11 cents a share, from $195 million, or 13 cents a year ago.

Profits down by $35 million?! Yah-ouch!

What does this mean for the rest of the tech stocks like eBay and Google? Well, my guess is that as its competitors fall, so too will the rest of the sector.

So is this, in the words of eBay, a "Buy-It-Now" item?

Well, I guess we'll just have to wait until the official announcement tomorrow after the bell. I don't know about you, but I'm not going to be holding my breath on this one.

eBay 1Q report predictions: Buy it now? originally appeared on BloggingStocks on Tue, 18 Apr 2006 18:17:00 EST. Please see our terms for use of feeds.

Microsoft software, concert tickets, and now porn for your iPod? originally appeared on BloggingStocks on Wed, 12 Apr 2006 12:48:00 EST. Please see our terms for use of feeds.