Oil driller stocks have long been a favorite of hedge funds (and Karen Finerman of "Fast Money") and something of a proxy for expected movements in oil prices. During the huge oil spike last year, the Oil Service HOLDRs (ETF) (NYSE: OIH) Oil Services ETF shot the moon. Buyers bid up issues of the underlying companies based on expectations that persistent oil prices in excess of $100 per barrel would make exploration and extraction of hard to reach deposits financially viable.
rig posts
Drill Baby Drill? Maybe not really
Cramer on BloggingStocks: Irrational energy moves
A market driven by the price of oil -- good when it goes up and bad when it goes down -- is way too binary to profit from. Yet that's where we find ourselves and it is so counterintuitive as to be unnerving.
I think the fact that oil is struggling and failing to take out $60 is a good sign. The purchasing power of Americans is dependent upon jobs, expenses, psyche, interest rates and the stock market. We know that the stock market isn't our friend or our enemy, interest rates are still our friend, jobs are awful, and psyche seems like a push because the love for President Obama is still in the air.
Continue reading Cramer on BloggingStocks: Irrational energy moves
Cramer on BloggingStocks: 'Due' for a pullback ... but so what?
The too-far-too-fast police are out in full force today. Commodities have moved up too far too fast considering economic activity. Banks have moved up too much vs. nonperforming loans. Houses have moved up too fast considering foreclosures. And most important, stocks have moved up too fast vs. the fundamentals.
All of these, every one of these, are right. The problem is that they have been right for months. They were right when Bank of America (NYSE: BAC) (Cramer's Take) went from $3 to $6. They were right when BAC went from $6 to $9. And they were right again when, in a slew of upgrades, BAC went to $14.
Continue reading Cramer on BloggingStocks: 'Due' for a pullback ... but so what?
Cramer on BloggingStocks: The pain of being rational
TheStreet.com's Jim Cramer says it's hard not to capitulate when your clients demand irrationality.
When I was weighted short and we would have these seemingly endless days of rallying, it was the mornings that would get me. The mark-ups of the futures, the refusal of Asia or Europe to go down, the "tone." It was relentless.
Then I would get to the office and, after a long period in which all I heard were downgrades, I would be greeted by upgrades, where I would always scream, "Now? Now they upgrade Intel (NASDAQ: INTC) (Cramer's Take)?" Or, "He's putting Research In Motion (NASDAQ: RIMM) (Cramer's Take) on the list now, after this run?" Or, "Wells Fargo (NYSE: WFC) (Cramer's Take) goes from hold to buy? After it ran up 4 points? What is he thinking?"
When I was weighted short and we would have these seemingly endless days of rallying, it was the mornings that would get me. The mark-ups of the futures, the refusal of Asia or Europe to go down, the "tone." It was relentless.
Then I would get to the office and, after a long period in which all I heard were downgrades, I would be greeted by upgrades, where I would always scream, "Now? Now they upgrade Intel (NASDAQ: INTC) (Cramer's Take)?" Or, "He's putting Research In Motion (NASDAQ: RIMM) (Cramer's Take) on the list now, after this run?" Or, "Wells Fargo (NYSE: WFC) (Cramer's Take) goes from hold to buy? After it ran up 4 points? What is he thinking?"
Continue reading Cramer on BloggingStocks: The pain of being rational
Transocean (RIG): Drilling for deepwater gains
Energy sector specialist Elliott Gue sees opportunity in Transocean (NYSE: RIG), a leadin player in the deepwater drilling area. Here's the latest advice from The Energy Strategist.
"The market for deepwater rigs, however, has remained resilient and one drilling with direct leverage to deepwater rigs is US giant, Transocean, the world's largest offshore drilling company, with 136 rigs as well as ten under construction.
"Roughly 68 of those rigs are 'semisubmersibles,' and 39 are ultra-deepwater or deepwater rigs capable of drilling many of the complex plays being targeted around the world today.
Continue reading Transocean (RIG): Drilling for deepwater gains
Analyst upgrades, downgrades and initiations: AMZN, RS, JNJ, NFLX ...
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Analyst upgrades:- Citigroup upgraded Amazon.com (NASDAQ: AMZN) to Buy from Hold on expectations the company's top-line growth rate could be more sustainable than expected and its operating margins could recover given due to less retail discounting. The firm raised its price target on shares to $97 from $65.
- UBS upgraded King Pharmaceuticals (NYSE: KG) to Buy from Sell based on expectations that Sandoz will settle patent litigation regarding Skelaxin after last weeks settlement of Clarinex with Schering-Plough (SGP).
- Jefferies upgraded Reliance Steel (NYSE: RS) to Buy from Hold as it believes steel prices and demand are close to near-term bottoms. The firm raised its target on the stock to $44 from $25.
- Palm (NASDAQ: PALM) was raised to Buy from Neutral at Banc of America/Merrill.
- Nestle (OTC: NSRGY) was lifted to Neutral from Underweight at JP Morgan.
- Johnson & Johnson (NYSE: JNJ) was upgraded at Wachovia to Outperform from Market Perform.
Continue reading Analyst upgrades, downgrades and initiations: AMZN, RS, JNJ, NFLX ...
Transocean: Perhaps the most frustrating stock in the world
Of all the massive stock sell-offs during the financial crisis and recession, perhaps none has been more exasperating than Transocean (NYSE: RIG), the world's largest off-shore drilling company. Go figure RIG. Here was a company that had every fundamental running in its favor: demonstrated business model, competitive advantage in established and emerging markets, global trend as a support, large-cap operation.
Continue reading Transocean: Perhaps the most frustrating stock in the world
Cramer on BloggingStocks: Skeptical of oil drillers
TheStreet.com's Jim Cramer says the price of crude isn't high enough to reignite the oil drilling companies.
Crude's awesome and it's really pushing up the whole complex. The stocks of the oils and the oil drillers are powering higher even as drilling is going down hard. Is it possible that the integrateds are right and the drilling stocks are wrong? Or should they both be going up together?
I wrestle over this issue every day because one of the main reasons why oil is going up, besides the endless "dollar-going-down-oil-safe-haven" trade that the media loves to go out with in order to sound smart, is that the drilling around the world has been cut back dramatically. I think that a deal like Suncor (NYSE: SU) (Cramer's Take) and Petro-Canada (NYSE: PCZ) (Cramer's Take) is great for the oils. It makes me recognize that there is value here in the group. I also believe the demand is real.
Crude's awesome and it's really pushing up the whole complex. The stocks of the oils and the oil drillers are powering higher even as drilling is going down hard. Is it possible that the integrateds are right and the drilling stocks are wrong? Or should they both be going up together?
I wrestle over this issue every day because one of the main reasons why oil is going up, besides the endless "dollar-going-down-oil-safe-haven" trade that the media loves to go out with in order to sound smart, is that the drilling around the world has been cut back dramatically. I think that a deal like Suncor (NYSE: SU) (Cramer's Take) and Petro-Canada (NYSE: PCZ) (Cramer's Take) is great for the oils. It makes me recognize that there is value here in the group. I also believe the demand is real.
Continue reading Cramer on BloggingStocks: Skeptical of oil drillers
Earnings highlights: Walmart, Comcast, CVS, Sprint, Hormel, Priceline and more
Here are some highlights from this past week's earnings coverage from BloggingStocks:
- Apollo Group Inc. (NASDAQ: APOL) reported that Q4 revenue soared despite the recession.
- Baidu Inc. (NASDAQ: BIDU) posted strong annual revenue, but at a slowing growth rate.
- Career Education Corp. (NASDAQ: CECO) easily topped Q4 earnings expectations, lifting shares up.
- Comcast Corp. (NASDAQ: CMCSA) Q4 earnings beat expectations and it increased its dividend.
- CVS Caremark Corp. (NYSE: CVS) shares jumped after it reported higher earnings in Q4.
- Digital River Inc. (NASDAQ: DRIV) shares soared on better-than-expected Q4 earnings and revenue.
- Expedia Inc. (NASDAQ: EXPE) reported dismal results due to a huge good will write down.
- Goodyear Tire & Rubber Co. (NYSE: GT) posted a greater-than-expected Q4 net loss and announced job cuts.
- Hormel Foods Corp. (NYSE: HRL) exceeded Q1 earnings expectations due to the popularity of SPAM.
Continue reading Earnings highlights: Walmart, Comcast, CVS, Sprint, Hormel, Priceline and more
Diamond Offshore Drilling (DO) to be added to S&P 500
Diamond Offshore Drilling (NYSE: DO - option chain) shares have been just about flat today after Standard & Poor's (NYSE: MHP) announced that the company will be added to the S&P 500 Index on a date still to be determined, replacing Weatherford International Ltd. (NYSE: WFT). This usually causes a surge in stock value as all the ETFs that track the S&P 500 now have to rush to add DO positions. While DO is not rising today, it is also not falling sharply like the rest of the market, especially when compared to its peers like Transocean (NYSE: RIG), which just reported slowing earnings today and is down by more than 5%. If you think that DO won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on that stock.
Continue reading Diamond Offshore Drilling (DO) to be added to S&P 500
Cramer on BloggingStocks: This time around, bad is just bad
TheStreet.com's Jim Cramer says picking stocks -- or worse, picking a bottom -- remains a dangerous activity.
Sometimes it is so bad that it is BAD! Don't laugh at that seeming bit of counterintuitive logic. Every investment professional knows that because of the way economic cycles and central banks work, you are often looking for signs of such stress and negativity that it is so bad it is GOOD because of what the banks can do and what a bottom looks like.
This time it hasn't worked out that way. This time, what's bad is bad and getting worse. This weekend, David Carr in The New York Times wrote an excellent piece about the mistake of looking for a silver lining, something that news media does.
Sometimes it is so bad that it is BAD! Don't laugh at that seeming bit of counterintuitive logic. Every investment professional knows that because of the way economic cycles and central banks work, you are often looking for signs of such stress and negativity that it is so bad it is GOOD because of what the banks can do and what a bottom looks like.
This time it hasn't worked out that way. This time, what's bad is bad and getting worse. This weekend, David Carr in The New York Times wrote an excellent piece about the mistake of looking for a silver lining, something that news media does.
Continue reading Cramer on BloggingStocks: This time around, bad is just bad
Stock picks and pans for troubled times: CAT, MON, EL, ISRG, NTT, RIG, SIRI ...
Amazingly, this week is about to end with stock markets logging gains. Not grim earnings, not glum retail sales, not dismal car sales, nor even weaker-than-expected jobs report seemed able to put a dent in investors' hopes the stimulus bill would pass.And it's not even the Dow stocks that are leading the advances. As of noon today, the Dow was up about 3% for the week, while the S&P 500 gained about 4.5% and the Nasdaq composite soared some 7%. If you're sorry you didn't take part of this rally, and think perhaps there's more to come after the Senate finally approves the stimulus plan, then BloggingStocks contributors have some ideas for long-term holdings, as well as a few warnings:
Continue reading Stock picks and pans for troubled times: CAT, MON, EL, ISRG, NTT, RIG, SIRI ...
Transocean (RIG): A platform for profits?
"What's going on with Transocean (NYSE RIG), the owner of the world's biggest fleet of offshore drilling rigs?" asks Richard Moroney, a specialist in blue chip stocks.
In his Dow Theory Forecasts, he explains, "The shares plunged 67% - nearly $100 a share - in 2008, and we can't blame the usual suspects." Here, he explains why he continues to rate thes stock a "Focus List Buy" in his blue chip-focused advisory service.
"Poor operating performance? Wall Street expects 2008 per-share profits of $14.34, up 68%. Shaky future? Transocean is expected to grow per-share earnings 4% in 2009 and 10% annually over the next five years.
"Fundamentals eroding? Not at all. The balance sheet is sturdy and the backlog stout at $41 billion, or three times expected 2009 revenue. Rather, we see two chief contributors to Transocean's steep slide, and neither should jeopardize long-term prospects.
Analyst upgrades, downgrades and initiations: LEN, LEAP, BBBY, ENR, JPM
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Analyst upgrades:- Citigroup upgraded shares of Lennar (NYSE:LEN) to Buy from Hold on valuation as they believe the recent sell-off on concerns of fraud is overdone. The firm thinks the allegations made by Barry Minkow/Fraud Discovery Institute are unfounded and has an $11 target on shares.
- Merriman upgraded Nautilus Group (NYSE:NLS) to Neutral from Sell after meeting with management to reflect increased optimism on the company's turnaround.
- Baird upgraded Leap Wireless (NYSE:LEAP) to Outperform from Neutral based on valuation and strong subscriber trends.
- Transocean (NYSE:RIG) was added to Goldman's Conviction Buy List.
- Pearson PLC (NYSE:PSO) was raised to Neutral from Underweight at JP Morgan.
- Smith & Nephew (NYSE:SNN) was lifted to Outperform from Neutral at Credit Suisse.
- JP Morgan downgraded Bed Bath & Beyond (NASDAQ:BBBY) to Underweight from Neutral and lowered their target to $20 from $26 as they believe potential benefits from the Linens' N Things closing are being overstated and that the risk/reward is unfavorable at current levels.
- Keefe Bruyette downgraded Citizens Republic (NASDAQ:CRBC) to Market Perform from Outperform and cut their target to $3 from $7 to reflect the company's lower capital position.
- UBS downgraded Energizer (NYSE:ENR) to Sell from Neutral and lowered their target to $40 from $48 citing signs of a battery price war, Wal-Mart's (NYSE:WMT) reduction in space allocation, and the company's cuts in investment.
- Chevron (NYSE:CVX) was removed from Goldman's Conviction Buy List.
- MetroPCS (NYSE:PCS) was lowered to Sector Perform from Outperform at RBC Capital.
- Lincoln Electric (NASDAQ:LECO) was cut to Sell from Neutral at Piper Jaffray.
- Global Hunter believes Pep Boys (NYSE:PBY) is well-positioned to benefit from increased demand for replacement parts and maintenance services as new car purchases are deferred. Shares were initiated with a Buy rating and $5.50 target.
- Jefferies started Sanofi-Aventis (NYSE:SNY) with an Underperform rating and sees downside risk to the stock from the potential introduction of Lovenox generics in the U.S.
- Merriman assumed Alter Nrg (NYSE:ANRGF) with a Neutral rating and recommends waiting on the sidelines pending increased visibility on the company's gasification projects.
- JP Morgan (NYSE:JPM) was re-initiated with a Buy rating at Goldman. Shares were also added to Goldman's Conviction Buy List.
- Hudson City Bancorp (NYSE:HCBK) was assumed with an Overweight rating and $15 target at Barclays.
- DG FastChannel (NASDAQ:DGIT) was initiated at BWS Financial with a Strong Buy rating and $30 target.
Cramer on BloggingStocks: Decline is inevitable
A week ago it all seemed so inevitable. The bulls were in charge. The worst was over. I had to go on The Today Show, and I knew I would once again be asked about the call I made about how the stock market simply isn't going to be the place you want to invest in for money you really need, part of the radical re-evaluation of an asset class turned reckless, dangerous and joyless.
Worse, we had been up for four straight days, and there was a lot of that painful chatter about how "as goes January, so goes the year."
I found it all painful. This is a market that lets you divine no conclusions whatsoever about short-term performance of the market. It is true that we had solved the black holes of Wall Street, but Main Street's just beginning to haunt people, and that has the ability to derail Wall Street once again.
Continue reading Cramer on BloggingStocks: Decline is inevitable
U.S. Justice Department turns an eye on the telecoms
Serious Money: Three stocks that beat the market
Closing Bell: The wishy-washy return to Q3 (AA, DDUP, EMC, DNDN, CVX, FSLR, GS)
