Stock Focus: Western Refining (WNR)
Posted on June 17, 2008 - Filed Under Stocks | Leave a Comment
Western Refining, Inc., through its subsidiaries, operates as an independent crude oil refiner and marketer of refined products. In today’s rising crude market, you would think that all refining stocks would be performing well. Western Refining is the exception.
The problem is debt. WNR debt problems have caused the stock to fall almost 80% from its July 2007 highs and it has not reached bottom yet. At $13+ a share, Western Refining still trades at a significant premium to its peers on 2008 and 2009 EV/EBITA and Wall Street expects that a debt covenant will be broken in the coming weeks.
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Stock Focus: DreamWorks Animation
Posted on June 16, 2008 - Filed Under Stocks | Leave a Comment
DreamWorks Animation summer movie Kung Fu Panda is poised to become the company’s first non-shrek movie to gross over $200 million in domestic box office receipts. Is that good news for investors?
The DWA stock price already has Kung Fu Panda’s box office results built into it , and the next event that will potentially move the stock doesn’t come until November. On November 7th, DWA releases Madagascar 2: Escape 2 Africa and we anticipate that the stock will trade at current levels until then.
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Bulls vs Bears: Financial Stocks
Posted on June 9, 2008 - Filed Under Investing, Stocks | 4 Comments
There is quite a split opinion in Wall Street on the direction of financial stocks. The S&P Financial Sector exchange traded fund (XLF) is at the lows reached in March when the Bear Sterns fire sale was taking place.
Thomas Brown of bankstocks.com had an interesting piece last week on which he stated that the subprime mortgage losses is simple: most estimates, particularly of losses on loans originated in 2006 and 2007, are significantly too high . The reason why they’re too high is simple, too. They assume that last year’s credit performance will persist far into the future. Only it won’t.
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Consumers Heading to Discount Stores
Posted on June 6, 2008 - Filed Under Investing | Leave a Comment
When times are tough financially, American’s shopping habits change. During good times we shop at apparel and department stores like Limited and Saks. Same-store sales in May fell 6.5% at specialty apparel stores and 3.5% at department stores, said Michael Niemira, chief economist at the International Council of Shopping Centers. “The less discretionary the spending, the better the performance” he said.
When things get tougher we head to value stores like Wal-Mart, Target and Costco. Overall discounters and wholesalers had a a 4.1% same-store gain in May.
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Yahoo Board In Trouble
Posted on June 3, 2008 - Filed Under Stocks | Leave a Comment
Yahoo Inc set plans on Tuesday to hold its annual shareholder meeting on August 1 in the heart of Silicon Valley, setting the stage for a showdown with activist investor Carl Icahn, who is mounting a proxy fight for control of the company.
Earlier, The Wall Street Journal reported that Icahn, a billionaire investor, would seek to remove Jerry Yang as Yahoo chief executive, citing the company’s failure, so far, to reach a merger or partnership deal with Microsoft Corp.
Icahn has proposed an alternate slate of directors for Yahoo’s board, but had not directly targeted Yang over the breakdown in talks early this month for a $47.5 billion deal.
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Following The Money
Posted on June 2, 2008 - Filed Under Investing, Stocks | Leave a Comment
Investors Business Daily had a table over the weekend that showed the ten groups with the highest percent of their stocks at new highs. This is a pretty good indicator for where the action and momentum is in the market. The top ten groups are:
Transportation - Rail 36%
Metal Prds - Distribtr 20%
Household - Appliances 17%
Machinery - Gen Industrial 14%
Elec -Military Systems 13%
Machinery -Cnstr/Mng 13%
Containers 12%
Steel -Producers 11%
Retail/Wholesale - Food 11%
Medical-Hospitals 11%
I was shocked to see Household appliances on the list. With the economic slowdown, people, are not supposed to be buying appliances according to the media!
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