About one year after the Lehman bankruptcy, we are getting rumors of more impending bankruptcies, this time from China.

The problem started last year when the price of oil dropped from $147 to $32 per barrel. Many companies use the futures markets to hedge their buying of oil. When prices skyrocket, they get scared and buy futures contracts for future delivery to lock in a price and to be assured of getting the product. So, some companies were buying oil at the height of the market last year. Companies that place hedges usually leave them on until delivery. What happened was that when the price of oil collapsed, these companies were still holding high-priced contracts. They saw the price plummet and took horrendous losses.

Continue reading China threatens to default on oil derivatives trades

China threatens to default on oil derivatives trades originally appeared on BloggingStocks on Sat, 12 Sep 2009 16:10:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Merriman initiated Bionovo Inc (NASDAQ: BNVI), with a Buy rating, as they believe shares are undervalued given the company's development pipeline and related intellectual property.
• Constant Contact Inc (NASDAQ: CTCT) was initiated with a Market Weight rating at Thomas Weisel. The company was also initiated with a Sector Outperformer and $30 target at CIBC, as they believe the company is well-positioned in the on-demand email marketing segment.
• Citigroup initiated Senorx Inc (NASDAQ: SENO) with a Hold rating and $12 target, citing competition concerns and their belief that infrastructure investments could delay profitability.
• BWS Financial said RemoteMDx Inc (OTC: RMDX) has been able to secure contracts that should result into larger follow-on orders as the TrackerPAL starts to have a history in real life scenarios. The firm started shares off with a Buy rating and $8.75 target.

• Bear resumed coverage of China Southern Airlines Company Limited (NYSE: ZNH) with an Underperform rating and China Eastern Airlines (NYSE: CEA) with a Peer Perform rating.
• Deutsche Bank initiated Seagate Technology (NYSE: STX) and Hutchinson Technology Incorporated (NASDAQ: HTCH) with Hold ratings and a $30 target and $26 target.

Analyst initiations: BNVI, CTCT, SENO and RMDX originally appeared on BloggingStocks on Mon, 12 Nov 2007 10:29:00 EST. Please see our terms for use of feeds.

No one would be particularly surprised that Chinese stocks traded on U.S. exchanges did well in the third quarter. The Shanghai Composite has doubled so far this year, and many stocks like Baidu (NASDAQ: BIDU), the China search engine, have made stunning gains.

In the third quarter, China Eastern Airlines (NYSE: CEA) moved up 112%. China Finance Online (NASDAQ: JRJC) ran up 282%. It is hard to imagine that the Chinese market can keep up this momentum, but analysts say that every quarter.

No one would find it odd that home builders and mortgage lenders were among the big losers in the quarter. Beazer Homes (NYSE: BZH) fell 66% to $8.25. Fremont General (NYSE: FMT), which has a subprime lending operation, fell 63.4% to $3.90. Mortgage lender Novastar Financial (NYSE: NFI) was down 68% to $8.87.

As retail sales fell, specialty store operations took a pounding. Gottschalks (NYSE: GOT) fell 63.5% to $4.34. And, Sharper Image (NASDAQ: SHRP) dropped 63.7% to $4.13.

The toughest part of the quarter is the realization the retail, housing, and mortgage shares could actually go lower during the October to December period.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Third quarter winners and losers originally appeared on BloggingStocks on Sat, 29 Sep 2007 10:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Singapore Airlines deal to buy 15.7% of China Eastern Airlines (NYSE: CEA), along with their parent Temasek Holding's 8.3% share, may be in jeopardy as Cathay Pacific Airways is said to also be interested in China Eastern, reported the Wall Street Journal.

• As a part of its annual report to be released this week, BHP Billiton Limited (NYSE: BHP) is expected to announce that it has uncovered potentially the largest gold reserves in the world at its South Australian Olympic Dam mine, reported the Herald Sun.
• According to the Washington Post, citing congressional investigators, the FBI is investigating technology company Unisys Corporation (NYSE: UIS) after it allegedly failed to detect "cyber break-ins traced to a Chinese-language Web site and then tried to cover up its deficiencies."
• The Telegraph reported that British bank Barclays (NYSE: BCS) is reportedly preparing to sell FirstPlus, one of its subprime consumer loan units, at a loss. Barclays is expected to obtain a price lower than GBP4.5B, the book value of the unit's loan portfolio.
• Microsoft Corporation (NASDAQ: MSFT) will tomorrow release its 'Halo 3' video game and the company expects over $150M in sales in the first 24 hours of its release, and a profit margin that could reach 90%, reported the Los Angeles Times.
• Housing slump or not, Home Depot Inc (NYSE: HD) CEO Frank Blake says there will be no large jobs cuts or store closings, reported the Associated Press.

Newspaper wrap-up: FBI investigating Unisys originally appeared on BloggingStocks on Mon, 24 Sep 2007 09:20:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Schering-Plough Corp (NYSE: SGP) was downgraded to Market Perform from Strong Buy at Raymond James, to Neutral from Overweight at HSBC and to Hold from Buy at AG Edwards on valuation.

• HSBC also cut Southwest Airlines Co (NYSE: LUV) to Neutral from Overweight.

• Capital One Financial (NYSE: COF) was cut to Market Perform from Outperform at Freidman Billings and to Neutral from Buy at Merrill Lynch following its first quarter miss.

• Stifel downgraded Robert Half International (NYSE: RHI) to Sell from Hold after its disappointing first quarter report.

• Stifel also cut Heartland Express Inc (NASDAQ: HTLD) to Hold from Buy on valuation.

• Jefferies downgraded shares of RightNow Technologies (NASDAQ: RNOW) to Hold from Buy with a $17 target. William Blair downgraded RightNow to Market Perform from Outperform based on the company's sales organization changes and weak bookings.

• Shares of CBRL Group, Inc (NASDAQ: CBRL) were downgraded at JP Morgan to Neutral from Overweight based on difficult near-term fundamentals and limited visibility.

• Baird cut HNI Corp (NYSE: HNI) to Underperform from Neutral.

• China Eastern Airlines (NYSE: CEA) was downgraded to Sell from Hold at Deutsche Bank.

• Brean Murray downgraded Genitope (NASDAQ: GTOP) to Sell from Hold.

• Sandler O'Neill downgraded shares of Capitol Bancorp Ltd (NYSE: CBC) to Sell from Hold.

Analyst downgrades 4-20-07: CBRL, COF, LUV and SGP downgraded today originally appeared on BloggingStocks on Fri, 20 Apr 2007 11:39:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Keefe Bruyette cut Accredited Home Lenders Holding Co (NASDAQ: LEND) to Underperform from Market Perform, saying the downturn in the subprime market raised liquidity concerns on the stock.

• RBC downgraded RadioShack Corp (NYSE: RSH) to Underperform from Sector Perform, explaining that cost cutting measures are largely complete and margin expansion estimates are too aggressive.

• Shuffle Master Inc (NASDAQ: SHFL) was downgraded to Hold from Buy at Jefferies, citing the lack of visibility into the company's placements and potential IP protection risk in Macau. Shuffle Master was also cut to Underperform from Peer Perform at Bear Stearns following the company's announcement that it will have to restate prior financial results.

• UBS downgraded shares of Marvell Technology Group (NASDAQ: MRVL) to Reduce from Buy, citing risks to HDD demand given upcoming launches by Apple (NASDAQ: AAPL) of NAND-based Video iPods. The analyst expects HDD weakness to phase in and not collapse, but sees limited growth in the HDD segment.

• Roth Capital cut WPT Enterprises, Inc (NASDAQ: WPTE) to Sell from Hold, citing valuation, reduced earnings expectations and execution risk related to bringing the online gaming business in house.

• China Eastern Airlines Corp (NYSE: CEA) was downgraded to Underweight from Equal Weight at Morgan Stanley.

• China GrenTech Corp (NASDAQ: GRRF) was downgraded to Neutral from Positive at Susquehanna.

• RBC cut Nova Chemicals Corp (NYSE: NCX) to Sector Perform from Outperform.

• Sandler downgraded shares of OceanFirst Financial (NASDAQ: OCFC) to Hold from Buy.

• Citigroup downgraded Dollar General Corp (NYSE: DG) to Hold from Buy.

Analyst downgrades 3-13-07: RadioShack & Marvell Technology downgraded today originally appeared on BloggingStocks on Tue, 13 Mar 2007 11:24:00 EST. Please see our terms for use of feeds.