JT’s DAILY BLOG for Month Of May 2012
Note: All previous month's posts are available in the archives, as noted above.
All postings for the month are available here, sorted in descending order - i.e. most recent at the top.
All times are Eastern Time - same as the NYSE
1st Posting Thursday, 5/31/2012 9:00 AM
Asian markets all closed down again, but European stocks are mostly trading higher, except for Spain, which is showing a modest loss. A heavy dose of economic data is due out at 8:30 AM, the Weekly Unemployment Claims data and the second estimate of Q1 GDP. Earlier this morning, the ADP Payrolls report indicated 133K jobs were added in May, less than the 157K expected.
The 8:30 AM data has just been released. The Weekly Claims for Unemployment came in at 383K vs. 368K expected. The Q1 GDP came in at 1.9%, as estimated, which is sub par, but better than a negative value. U.S. futures have pulled back since the release, now just barely registering positive for the blue chips, i.e., the Dow and the S&P 500, and slightly negative for the NASDAQ.
No upgrades/downgrades have come out today so far on stocks I track.
Today may be a slow trading day, as players await the all-important Monthly Employment data from the Department of Labor, due out tomorrow at 8:30 AM.
1st Posting Wednesday, 5/30/2012 8:30 AM Delayed 4:30 PM
Asian markets all finished down, European markets are all trading down, and U.S. futures are all down. It looks like a down day is in store. The reason is Euro concerns, as Italian and Spanish bond yields are up, and a new Greek poll indicates the party that rejects austerity may prevail in the June 17 elections, which would exacerbate the Euro crisis.
The only economic release scheduled for today is Pending Home Sales, to be released at 10:00 AM.
Only one upgrade/downgrade to report on stocks I track, as Plains All American Pipeline (PAA) was initiated at Neutral by Sterne Agee.
UPDATE 4:30 PM: I experienced a day-long Internet outage here in Oklahoma, apparently related to high winds, just as I was about to post the morning observances. Today was indeed a down day, as yesterday’s gain was taken back, with interest being charged to further rub salt in the wound. The Pending Home Sales figure was a surprise disappointment, which helped the Bears in regaining control. Further declines in oil prices caused the energy sector to sell off.
I may have missed some buy opportunities by being offline today, but chances are they will still be available tomorrow. I am looking at ConocoPhillips (COP) and Chevron (CVX) as coming into a range where I may start a new position.
1st Posting Tuesday, 5/29/2012 8:30 AM
Back home, back on schedule. Time to get serious and finish out the month.
Asian markets closed in the green across the board, supposedly on hopes of a policy response, ie. stimulus, by the Chinese authorities. In Europe, Britain, France, and Germany are trading modestly in the green, while Italy is modestly in the red, and Spain is significantly in the red, down over 2%. The problem is renewed concerns over the Spanish banking sector, as a major bank has requested government aid, and a recent data release showed retail sales in Spain fell nearly 10% in April. U.S. futures are positive at the moment. Economic data on tap for release today is the Case-Shiller 20 City Home Price Index, and an initial read on May Consumer Confidence. Of course, the “Big Kahuna” of economic releases, the monthly Unemployment Report, will be coming on Friday. The report will be scrutinized even more carefully than usual, if that is even possible, as the election season gets into high gear.
A couple of MarketWatch articles caught my eye this morning. First, for students of technical analysis, a new Trading Deck article by traders Elder and Lovvorn predicts that “This Bear Market Rally Is Living On Borrowed Time”. If you really need a shot of sobriety after the Memorial Day holiday, Paul Farrell’s latest column, “America’s New ‘Age of Austerity’ Starts Now” will give it to you, as he outlines his reasoning that a multi-year slump comparable to the 1930’s is in store.
Only one upgrade/downgrade has come out this morning on stocks I follow, as ConocoPhillips (COP) was upgraded from Neutral to Buy at Citigroup.
Barring geopolitical developments, it should be a slow week until Friday, as most market players await the latest monthly reading on Unemployment and the state of the labor market.
1st Posting Friday, 5/25/2012 9:30 AM
Back home at last in Austin, 3500 miles in 10 days will wear a person out. Asian markets ended mixed, with Japan, Hong Kong up, the rest down. European markets are all trading in the red. U.S. futures are modestly negative. The only economic release scheduled for today is the final University of Michigan Sentiment Reading. With a three day weekend coming up, there could be some selling today.
Upgrades/downgrades to report are:
Genuine Parts (GPC) was initiated at Hold by Wunderlich.
Illinois Tool Works (ITW) was upgraded from Neutral to Overweight at JP Morgan.
HJ Heinz (HNZ) was downgraded from OverWeight to Neutral at JP Morgan.
I missed reporting yesterday that HJ Heinz (HNZ) reported earnings of FQ4 EPS of $.81, beating estimates by two cents. Revenue of $3.05B, up 5.6% Y/Y, was in-line.
This week has not presented me with any buy opportunities that I cannot pass up, so far. My buy list has a number of stocks targeted, but only at much lower prices, including the three stocks above.
1st Posting Thursday, 5/24/2012 9:15 AM
Almost back on schedule, not home yet but close. Being on Central Time again helps. Asian markets ended mixed, with Japan and India up, the rest down. European markets are all trading with gains at the moment. U.S. futures backed away from slightly positive to flat after the 8:30 AM dose of economic data. Both the Unemployment Claims numbers and the Durable Goods numbers came in a little poorer than economists’ estimates, which dampened the mood slightly.
A couple of additional upgrades/downgrades from yesterday were:
Total Petroleum (TOT) was upgraded from Sell to Hold at Canaccord. Not exactly a ringing endorsement, but nevertheless an upgrade.
Waste Management (WM) was initiated at Hold by BB&T Capital Markets.
Today’s upgrades/downgrades of interest are:
Northrop Grumman (NOC) was upgraded from Sell to Neutral at Goldman.
Raytheon (RTN) was downgraded from Neutral to Sell at Goldman.
So far this week we have had a big up day (Monday) and two essentially flat days, although yesterday was a roller-coaster ride, with the Dow30 average down 200 points at one point, before closing with only a tiny loss. With two days to go, it still is not clear whether the correction of the last two weeks will resume or not.
Time to get ready.
1st Posting Wednesday, 5/23/2012 9:30 AM
Asian and European markets are all in the red, on economic concerns and the ever present Euro crisis. U.S. futures are indicating a negative opening. It appears that the correction we had been experiencing until this week is getting set to resume. The only economic data on tap is a couple of housing data points and the usual Wednesday oil inventory report. Oil dipped again yesterday, closing at $91.66, a new interim closing low.
Only a couple of upgrades/downgrades to report:
Old Republic (ORI) was upgraded from UnderPerform to Market Perform at Raymond James.
Williams Partners (WPZ) was upgraded from Market Perform to OutPerform at Wells Fargo.
A couple of omissions that I failed to report on the proper schedule are:
Ex-dividend dates this week were Northrop Grumman (NOC), 5/23/12, yielding 3.76%, and ENI S P A ADR (E), 5/21/2012, yielding 6.90%. In the case of E, note that it is a semi-annual dividend, and the yield is before foreign tax withholding.
Wal-Mart (WMT) reported earnings last week, on May 17. Q1 EPS was reported at $1.09, beating estimates by five cents. Revenue of $112.3B, up 8.6% Y/Y, beat by $1.8B. WMT has hit new highs since, apparently fully recovered from the “much ado about nothing” Mexican bribery scandal.
The hour draws near. Time to see if the correction has indeed returned.
1st Posting Tuesday, 5/22/2012 9:30 AM
Asian stocks finished with gains, with the exception of India, which had a substantial decline, possibly due to a serious railway accident in the news. European stocks are trading up substantially, as the leaders reaffirmed their commitment to unity and the Eurozone. U.S. futures are positive. It remains to be seen whether the correction is over, or just pausing for a day or two. With four trading days to go before the Memorial Day holiday weekend, we should know by then.
Only one upgrade/downgrade of note on stocks I follow came out this morning, as BreitBurn (BBEP) was initiated at Buy at MLV & Co.
I did take advantage of yesterday’s rally to sell a call against my shares of Pepsico (PEP). The call was October 2012 strike price $70, sold for $1.50. My cost basis is under $65, and with only a 3% yield, I wouldn’t feel too bad if the shares are called away. Of course, if the stock unexpectedly rockets up to $75 or $80, I won’t be so sanguine.
1st Posting Monday, 5/21/2012 11:00 AM
Still traveling, in the Pacific time zone, and running behind even later than usual this morning. Stocks continued the recent pattern Friday, opening in positive territory, then yielding to selling pressure as the day wore on, and finishing with a loss. The Facebook IPO was a success for the firm, as far as maximizing the proceeds for the benefit of the company. The market, however, is disappointed, as the shares are now trading below the IPO price. No one doubled their money on day1, which some had thought might happen.
Moving on to Monday, Asian stocks ended up mostly in positive territory, with only Hong Kong closing down. European stocks are also mostly positive, with only Italy and Spain in the red. U.S. futures were modestly positive before the open, and so far, one hour into the trading day, U.S. stocks have extended further into positive ground as the day has progressed. The latest news blurb out of the Group of 8 meeting in Chicago is that the group wants Greece to stay in the Euro. The question is, how? The Euro crisis will likely be a continuing soap opera for the next several years before the countries face up to the realities of the situation. So far, it doesn’t seem like that is occurring yet.
No economic releases are due out today. Only a couple of upgrades/downgrades to report:
Boeing (BA) was upgraded from Hold to Buy at Argus.
Kayne Anderson (KED) was downgraded from Buy to Hold at Stifel Nicolaus.
The decline in the price of crude oil from highs near $110 a couple of months ago to barely above $90 recently has caused nearly all energy-related stocks to go “on sale”. I have taken advantage of the opportunity, adding to positions of integrated oil majors TOT and RDS.B, and several MLPs. It may get worse before it gets better, with one article stating that crude could go down to $85 or so. If companies I like drop even further, I am prepared to add further to my positions.
Time to post, the day is 20% done already.
1st Posting Friday, 5/18/2012 10:00 AM
Stocks declined again yesterday, confirming that a correction is definitely in progress. The S and P 500 Index is down about 8% from the highs of early April. Yesterday saw a confluence of concerns, encompassing Europe, Asia, and weak U.S. economic data.
This morning, however, it is a brand new story, with the market all giddy over the Facebook IPO. Even though Asian and European markets are mostly down, at least there is no economic data scheduled for release to spoil the mood, and U.S. futures were modestly positive before the open. The open was indeed in the green, but after 15 minutes of trade, as I write this, it is by no means a foregone conclusion that today will stay positive.
The only ratings activity to report on stocks I follow is that Merck (MRK) had coverage initiated at Market Perform by BMO Capital.
I have seen several fills on what I thought were low-ball limit orders this week, taking advantage of the dip to add to positions. Stocks purchased were TOT, ERF, RDS.B, and KED, all energy-related firms reacting to the decline in oil prices, among other negative factors.
I have to keep reminding myself that a healthy correction is what I’ve been waiting for, so I can buy good stocks at bargain prices. Of course, bargains compared to recent highs don’t look like such great bargains when stocks keep going down. That’s why I never go “all in” at one time, but rather feed in capital gradually, so I can have some “dry powder” left, if even better bargains appear. It’s not easy, but for me, the only way to play it is cautiously and deliberately, carrying out a pre-defined plan to buy incrementally as buy targets are reached.
1st Posting Thursday, 5/17/2012 10:00 AM
Stocks began the day yesterday in the green, but could not hold it, as the day ended up with modest losses on all major averages. Crude oil closed at $93.16, and has lost over $10 the last couple of weeks.
Asian stocks finished mixed, with Hong Kong and Australia down, Japan, India, and Shanghai up. European markets are all trading in the red at the moment. U.S. futures are essentially flat, showing only a fractional positive bias. The weekly Unemployment Claims data released at 8:30 was in-line with economists’ projections. No upgrades/downgrades to report this morning on stocks I follow.
Today wraps it up for the Money Show in Vegas. I attended a provocative session on IRA’s and estate planning yesterday, which was very informative. The other session of interest was a discussion from Utility and MLP experts Elliot Gue and Roger Conrad. These guys specialize in this sector and they know their stuff. They have several newsletters that can be subscribed to at a reasonable cost, some of which I have subscribed to in the past. They allowed attendees to have access to their current issues, which I have downloaded, and will be digesting over the weekend.
I will be traveling to California and then back to Texas, then Oklahoma for the next ten days or so, and I will probably continue with only one posting per day until I return to my home port.
1st Posting Wednesday, 5/16/2012 10:15 AM
Stocks took another leg down yesterday. Per the headlines, it was the Greek crisis that caused the dissonance. My limit order to buy some more TOT was filled yesterday, at $43.90. TOT went down even more after that level was hit. I thought TOT was a buy when it went below $50.
Moving on, today Asian markets are all down, and by substantial amounts. European markets are trading mixed, with France, Germany, and Italy up, Britain and Spain down. U.S. futures indicated a positive open was in store, and so it came to be, as trading has now been under way for a couple of minutes, and the Dow30 Index is up 31 points. Economic data on housing Starts and Industrial production, which came out before the open, was modestly positive, helping give stocks an early boost.
A couple of upgrades/downgrades that came out this morning on stocks I track were:
Windstream (WIN) was upgraded from Hold to Buy at Stifel Nicolaus.
Pepsico (PEP) was upgraded from UnderPerform to OutPerform at CLSA.
The Money Show here in Vegas is fairly well-attended, but perhaps not quite as much as a couple I have attended in the past. This is my third one since 2007. Several companies are here, telling their story, among them Enerplus (ERF), the former Canadian Trust. ERF is down sharply the last few weeks, hurting from the low natural gas prices, which accounts for 50% of production. I bought at $18, and it closed yesterday below $15. I plan to add to my position soon if it stays down at these levels. The dividend is safe for the moment, but a cut, which the market seems to be pricing in, could occur, no doubt, if things don’t improve. When you buy an E&P company, the commodity risk is always present. Even if a cut occurs, I believe ERF is a good long-term buy at these levels.
None of the sessions so far have “blown me away” as far as revelations about companies or the market, but they have been interesting. The consensus of the experts so far is that Greece is likely to exit the EURO soon, and the EURO setup as now defined is doomed, but it could take years to play out the string, so don’t expect a quick resolution. As for the U.S. markets, a spring/summer correction is certainly likely, and in fact may be under way, but most of the traditional signs of a major bear market pending are absent. Thus, if a downswing occurs, it should be a buying opportunity, with a recovery likely by year-end. Of course, if too many think the same way, you can expect the unfolding reality to be different from the expectations.
I have a new article out on Seeking Alpha, on “Big Pharma” and the “Patent Cliff”. Go to the SA Articles selection for a link.
I will be off soon to attend day 2 of the Las Vegas Money Show. I’ll try to get another post out tonight, but no promises.
1st Posting Tuesday, 5/15/2012 9:15 AM
Asian markets closed mixed, with Hong Kong and India up, the others down. European markets are also trading in mixed fashion, with France and Germany up, the others down. A positive GDP number from Germany has improved the mood, with U.S. futures indicating a rebound at the open, following the triple digit Dow losing day yesterday. Several economic readings are on tap today, the most significant being CPI and Retail Sales. The CPI numbers came in as expected, 0% for CPI, 0.2% for Core CPI. Retail Sales fell a little short of expectations. The futures maintained their positive stance after the 8:30 AM release of data.
A couple of Upgrades/Downgrades of note are:
Ares Capital (ARCC) was upgraded during the day yesterday from Underweight to Equal Weight at Barclays.
McDonalds (MCD) was downgraded from OutPerform to Neutral at Cowen.
Total Petroleum (TOT) was upgraded from Neutral to Buy at UBS.
Statoil (STO) was also upgraded from Neutral to Buy at UBS.
Southern Company (SO) was upgraded from Hold to Buy at Jeffries.
I had a limit order to buy some more TOT yesterday, but missed it by pennies. I will resubmit today.
Not much to report on so far here at the Las Vegas Money Show, all that I’ve done so far is register and attend the keynote opening session. Today is a full day of sessions, so I will try to get an end-of-day posting out with a comment or two on what I may have learned of interest.
1st Posting Monday, 5/14/2012 10:00 AM
Well, here I am in Vegas, which is on Pacific time. Postings this week likely won’t get out until after the market starts – 9:30 AM New York time is early in the Pacific time zone.
Asian stocks ended mixed, with Japan, Australia up, the rest down. Europe exhibits no such inconsistency, as all markets are trading down. While academic by the time this will get posted, at this moment, with just a few minutes before the start, U.S. futures are indicating an opening swoon is in store. Turmoil in Greece, the JP Morgan loss, the resignation of Yahoo CEO over a questionable resume, all mixed together to create a negative environment to start the week.
Only two upgrades/downgrades to report, as R W Baird released new ratings on a number of utilities. Two utility stocks I follow, Alliant Energy (LNT) and NextEra Energy (NEE), both were upgraded from Neutral to OutPerform.
Stocks I track going ex-dividend this week are:
Consolidated Edison (ED), 05/14/202, yield 4.09%.
MicroSoft (MSFT), 05/15/2012, yield 2.57%.
Chevron (CVX), 05/16/2012, yield 3.51%.
3M Co (MMM), 05/16/2012, yield 2.72%.
Gladstone Investment Corp (GAIN), 05/16/2012, yield 8.26%, pays monthly.
ConocoPhillips (COP), 05/17/2012, yield 5.02%.
Main Street Capital (MAIN), 05/17/2012, yield 6.76%, pays monthly.
Statoil ASA ADR (STO), 05/17/2012, yield 4.44%, pays annually, so buy before 05/17 if you want the dividend this year.
The only earnings report on stocks I track will be WalMart (WMT), expected on 05/17/2012.
The Money Show here in Vegas starts this afternoon, with a line-up of keynote speakers, and the the various sessions and presentations run all day for the next few days, winding up on Thursday. I’ll post some observations as the week unfolds.
Final Posting Friday, 5/11/2012 4:45 PM
Stocks seemed to recover from the JPM news as the day wore on, but gradually lost ground, to end up with modest losses by the end of the day.
I found an article on MarketWatch from Mark Hulbert, “How Not To Pick a High-Yielding Stock”, to be an interesting read. In it, he examines the now somewhat discredited “Dogs of the Dow” investment approach, and compares it with the approach taken by a newsletter I subscribe to, Investment Quality Trends, which recommends only stocks that pass a rigorous screen, and then further recommends that they only be bought when they are yielding near their own historical highs. The article lauds the Investment Quality Trends approach, which I concur with.
A couple of final earnings results to report for this week are:
Prospect Capital (PSEC) reported yesterday after the close that FQ3 EPS was $.51, missing by four cents. PSEC gained $.18 today, closing at $10.92.
National Health Investors (NHI) reported yesterday after the close that normalized FFO for Q1 was $.77/share vs. $.70/share for the comparable prior period. The company updated the full year forecasted FFO to range from $3.05/share to $3.13/share. NHI lost $.43 today, closing at $49.06
I had listed Exterran Partners (EXLP) as due to report this week. EXLP actually reported on May 3rd, reporting Q1 EPS of $.11 vs. estimates of $.08. Revenue of $88.7M was in-line. EXLP is a new addition to my ultra-high yield Tier3 list. EXLP gained $.43 today, closing at $21.22 today.
I will be attending the Money Show in Las Vegas next week, so daily updates will probably be less regular. I may only be able to get postings out in the AM. I will also comment on any sessions attended that were notable.
1st Posting Friday, 5/11/2012 9:25 AM
Consistent is the status of all markets this morning. Consistent and down, as Asian markets all finished in the red, and European markets are all trading down as well. U.S. futures are indicating an opening swoon is in store. The situation is being helped along by the news that JP Morgan (JPM) has suffered a 2B trading loss on credit derivatives, which will be reflected in the next quarterly results. Jamie Dimon and JPM had been the stellar counterweights to the discredited mega banks Bank of America (BAC) and Citigroup (C), but this news definitely hurts that image.
Upgrades/downgrades of note coming out this morning are:
Windstream (WIN) was downgraded from Buy to Neutral at Citigroup.
Verizon (VZ) was upgraded from Neutral to OutPerform at Credit Suisse.
AT&T (T) was also upgraded from Neutral to OutPerform at Credit Suisse.
Coverage was resumed on Darden Restaurants (DRI) by Wells Fargo, at OutPerform.
Today is shaping up to be a day to look for buying opportunities. We seem to be having these types of days more and more these days.
Final Posting Thursday, 5/10/2012 4:45 PM
Stocks mostly registered modest gains today, with the exception of the NASDAQ, which declined fractionally, mainly because of a big sell off in Cisco Systems (CSCO). While CSCO’s numbers were decent, a gloomy outlook triggered the sell off.
Additional earnings to report are as follows:
Somehow, I had Sanofy (SNY) slated to report this week. Upon a search, I see that SNY reported on April 27 that Q1 profit was up 13% to 2.44B Euros, vs. the consensus of 2.20B Euros. Revenue was in-line. The company reiterated guidance, whereby profit was expected (and still is) to decline as much as 15% in 2012 from patent expirations. I had missed SNY’s report before today. SNY lost $.13 today, closing at $35.79.
Medical Properties Trust (MPW) reported Q1 EPS of $.10, beating by a penny. Revenue of $43.3M, up 26.5% Y/Y, beat by $5M. FFO rose to $22.5M from $20.4M. MPW declined $.11 today, closing at $9.25.
Windstream (WIN) reported Q1 EPS of $.13, missing by 1 cent. Revenue of $1.55B, up 51% Y/Y, was in-line. Other aspects of WIN’s report led to a 13% decline today, as WIN lost $1.17, closing at $10.09.
One more day to go, in what has seemed like a slow week.
1st Posting Thursday, 5/10/2012 9:15 AM
Asian markets finished mixed, with Shanghai and Australia up, Japan, India, and Hong Kong down. European markets are all trading in the green. U.S. futures are positive. The weekly Unemployment Report contained no surprises, and both Import and Export Prices came in under economists’ estimates.
Several of the stocks I track received upgrades/downgrades this morning:
Plains All American Pipeline LP (PAA) was upgraded from Buy to Conviction Buy at Goldman, with a price target of $100.
Total Petroleum (TOT) was upgraded from Accumulate to Buy at Tudor Pickering.
NuStar Energy LP (NS) was upgraded from Neutral to OutPerform at Credit Suisse.
3 M (MMM) was downgraded from OutPerform to Market Perform at Bernstein.
Sanofi (SNY) was initiated at Buy at Societe Generale.
TOT and NS have been hit hard the last few days as oil prices have declined, and both are at buy levels right now.
Final Posting Wednesday, 5/09/2012 6:00 PM
As anticipated, stocks declined today, with the Dow30 stock average coming close to suffering a triple-digit loss. For a time, it looked like the market was going to recover most of the initial early decline, but a late day selling surge sent the averages back down into the close.
A couple of notable earnings releases after the bell were:
Century Link (CTL) reported Q1 EPS of $.68, beating estimates by $.10. Revenue of $4.61B, up 3% Y/Y, was in-line. Projected Q2 and full-year revenue and EPS was generally in line with estimates. CTL declined $.04 today, closing at $38.13.
Westar Energy (WR) reported Q1 EPS of $.21, below the $.27 number posted in the comparable year-ago quarter. The press release noted that the 1st quarter of 2012 was the warmest in more than 50 years. WR lost two cents today, closing at $28.47.
In a final pass to see if any upgrades/downgrades of interest came out during the day today, one caught my eye:
Kinder Morgan Inc (KMI) was upgraded from Hold to Accumulate at Tudor Pickering.
By coincidence, I took advantage of a reduced price available today to add to my position in KMI, picking up shares at $34.05. I was only enticed into buying when, late in the day, I saw KMI approaching the $34 level. KMI stayed flat after I bought, ticking up a tiny bit to close at $34.08. KMI lost $.89 today from yesterday’s close, as all energy stocks were sold off hard today. So, I didn’t waste the down day. I have a short list of 25 or so stocks, with buy levels specified, but only KMI reached a buy level today.
1st Posting Wednesday, 5/09/2012 9:20 AM
Well, so far today, we have consistency, maybe even clarity, as all markets are down significantly. Asian markets closed down, European markets are trading down, and the U.S. futures are indicating a major swoon is in store for the U.S. markets.
The only upgrade/downgrade to report this morning is instead an initiation of coverage, as ConocoPhillips (COP) was reinstated at Neutral by Credit Suisse.
Time to review my buy list. Some of my low prices might be hit today. That’s when I am tested as an investor, laying out cash to buy when stocks are crashing. Unfortunately, that’s the only real way to make money in the end.
Final Posting Tuesday, 5/08/2012 7:00 PM
Today was a down day, but not by as much at the close as it was most of the way, as the Dow30 average went from being down nearly 200 points to close down only 76 points, finishing at 12932. The other major averages performed in a similar fashion.
I started out trying to sell a small holding in Sanofi (SNY), but my limit price was not reached. I have the annual dividend secured and a fair gain, so I’m ready to declare victory here and apply the funds somewhere else. I’ll try again tomorrow.
Additional earnings out today since this morning are:
Energy Transfer Partners LP (ETP) reported Q1 EPS of $4.35, which may not be comparable to the $.50 consensus estimate, as it included a large gain on deconsolidation. Revenue of $1.31B, down 22.6% Y/Y, missed by $480M. Distributable Cash Flow was $320.5M, a decrease of $16.7M from the comparable prior period.
Energy Transfer Equity (ETE) reported net income attributable to partners was $166.4M for Q1 2012, an increase of $77.8M over the comparable prior year period. Distributable Cash Flow was $130.7M, up from $125.8M for the prior year period.
Hercules Technology Growth Capital (HTGC) reported Q1 EPS of $.24, beating by a penny.
Ares Capital (ARCC) reported FQ2 EPS of $.38, missing by a penny.
Fifth Street Finance (FSC) reported net investment income for Q1 of $22.8M, or $.29 per share, vs. $16.6M, or $.27 per share, for the prior year comparison period. Net asset value per share was $9.87.
Tomorrow can’t come too soon, I’m weary of today.
1st Posting Tuesday, 5/08/2012 8:15 AM
Asian stocks ended mixed, with Australia and Japan up, China and India down. European markets are mostly trading in the red, with the exception of Spain, inexplicably positive. Maybe Spain is just happy to not be in the news for a couple of days. Overall, markets are taking a dim view of the recent European election results, as voters rejected austerity in France and Greece. U.S. futures are firmly in the red, with the European situation dominating the headlines. A minimal U.S. economic reporting week and a wind-down of earnings has yielded the news cycle to Europe, and the news from that quarter is universally bad, and unlikely to improve soon.
No upgrades/downgrades to report so far this morning. A couple or three earnings reports have come out:
Molson Coors (TAP) reported Q1 EPS of $.47, beating estimates by four cents. Revenue of $1.01B, up .1% Y/Y, beat by $300M.
Health Care REIT (HCN) reported Q1 EPS of $.87, in-line. Revenue of $436M, up 77% Y/Y, beat by $18M.
Statoil (STO) reported a Q1 net profit decline of 5.4%, to 15.12B kroner ($2.61B), which still beat estimates of 14.99 kroner. Revenue was up 34% to 194.8B kroner vs. estimates of 183.85B kroner. STO is trading down .2% in the premarket.
Time to get ready for the trading day.
Final Posting Monday, 5/07/2012 6:20 PM
U.S. stocks managed gains on all of the major averages except the Dow30, which was unduly impacted by declines in IBM and Caterpillar. The Dow closed with a modest loss. It certainly looked like it was going to be much worse early this morning, as the news of the European elections from Sunday was being digested.
Earnings out so far today on stocks I track were:
Sysco (SYY) reported FQ3 EPS of $.49, beating by five cents. Revenue of $10.5B was up 7.6% Y/Y. Not bad for a company struggling to maintain margins. SYY gained $.40 today, closing at $28.30.
Plains All American Pipeline LP (PAA) reported Q1 EPS of $1.58, beating by six cents. Revenue of $9.2B, up 20% Y/Y, beat by $.7B.
Frontier Communications (FTR) made a new 52-week low today after reporting a 10% decline in local and long distance wireline service revenue. Q1 EPS of $.05 missed estimates by one cent.
BreitBurn Energy Partners LP (BBEP) reported Q1 EPS of a negative $.76, which may not be comparable to consensus estimates of $.24. I sure hope so. Revenue of $59.1M, up 1.5% Y/Y, was in-line. BBEP lost $.31 today, closing at $17.65. The loss was from unrealized losses on commodity derivative instruments.
Overall, not a bad day in the markets today, especially considering the early morning outlook.
1st Posting Monday, 5/07/2012 9:00 AM
Asian markets mostly closed down, with India being the only gainer. European markets are trading in mixed fashion, with France, Italy, and Spain up, Germany and Britain down. U.S. futures are negative, although improved somewhat from early levels. European elections in France and elsewhere imply continued Eurozone turbulence, overshadowing the mostly positive earnings results we have seen thus far. The only economic data on tap is Consumer Credit, due out at 3:00 PM.
A couple of my stocks were slammed by early-morning downgrades, to start the week:
Alliant Energy (LNT) was downgraded from Buy to Neutral by Ladenburg.
Alliant Energy (LNT) was also downgraded from Buy to Neutral by Wunderlich.
Proctor & Gamble (PG) was downgraded from OutPerform to Market Perform at Wells Fargo.
A number of stocks I follow will be going ex-dividend this week:
Monday, May 7: Sanofi (SNY), yield 4.65%. This is an annual dividend. If you don’t already own it, you’ll have to wait another year to receive a dividend.
Tuesday, May 8: American Electric Power (AEP), yield 4.87%; Amerigas Partners LP (APU), yield 7.89%; Boardwalk Pipeline Partners LP (BWP), yield 7.62%; Entergy Corp (ETR), yield 5.10%; Olin Corp (OLN), yield 4.02%; Exterran Partners LP (EXLP), yield 9.26%. EXLP is a new addition to my Tier3 high-yield list.
Wednesday, May 9: Boeing (BA), yield 2.32%; Emerson Electric (EMR), yield 3.28%; Pfizer (PFE), yield 3.93%; Royal Dutch Shell PLC (RDS.B), yield 4.80%; Unilever PLC (UL), yield 3.64%; WalMart (WMT), yield 2.71%.
Thursday, May 10: United Parcel Service (UPS), yield 2.93%; Exxon Mobil (XOM), yield 2.70%; Buckeye Partners LP (BPL), yield 7.64%.
Friday, May 11: Exelon (EXE), yield 5.45%; Fifth Street Finance (FSC), yield 12.00%. FSC pays monthly.
The earnings parade continues for another week, with a number of the stocks I follow reporting:
Monday, May 7: Statoil ASA (STO), Plains All American Pipeline LP (PAA), Frontier Communications (FTR), BreitBurn Energy Partners LP (BBEP).
Tuesday, May 8: Energy Transfer Equity LP (ETE), Energy Transfer Partners LP (ETP), Health Care REIT (HCN), Molson Coors Brewing (TAP), Ares Capital (ARCC), Fifth Street Finance (FSC), Hercules Technology Growth Capital (HTGC).
Wednesday, May 9: Sanofi (SNY), Westar Energy (WR), CenturyLink Inc (CTL).
Thursday, May 10: National Health Investment Inc (NHI), Prospect Capital Corp (PSEC), WindStream Corp (WIN), Medical Properties Trust (MPW).
Friday, May 11: Exterran Partners LP (EXLP).
Early on, it appeared that a major swoon was in store, but now, with about 30 minutes to go to kickoff, it looks like stocks will open down only modestly.
Final Posting Friday, 5/04/2012 5:50 PM
Stocks reacted adversely to the disappointing Unemployment Report that came out today, as the new jobs component fell far short of what was expected. All of the major averages experienced significant declines.
Only one additional upgrade/downgrade on my stocks to pass on to viewers today, as Main Street Capital (MAIN) was downgraded from Buy to Neutral at Ladenburg, citing valuation.
A couple of final earnings releases for the week that came out during the day were as follows:
Otelco (OTT) reported decent results, but as noted, the issue is for how much longer, as a contract with Time-Warner that has accounted for over 10% of revenue won’t be renewed after this year. Management indicated that the company is reviewing all alternatives to recover from the loss. OTT is clearly in “survival mode”. The fact that management recognizes the gravity of the situation appears to have been well received, as the shares gained $.49 from yesterday’s close, and after trading as low as $5.10 early, recovered to close at $5.60.
Technology Investment Capital (TICC) reported Q1 EPS of $.27, which was in-line with estimates. TICC gained $.17 today, closing at $9.37.
PDL BioPharma (PDLI) reported Q1 EPS of $.29, beating by two cents. Revenue of $77.3M, down 7.2% Y/Y, was in-line. PDLI gained $.09 today, closing at $6.32.
Safety Insurance Insurance Group (SAFT) reported yesterday. Q1 EPS, fully diluted, was $1.13, which compared favorably to a loss for the comparable prior year period. SAFT gained $.97 today, closing at $40.97.
Even though stocks declined overall today, each of the above firms managed gains as they reported positive results.
Earnings will continue into next week, gradually subsiding except for a few stragglers. The troubled economy, politics, Eurozone problems, and geopolitical issues will all be waiting to vex stocks again next week, and continuing on through the end of the year and beyond, but for now, the decline is over for the moment. I’m sure Monday will see a number of “doom and gloom” articles come out, as always is the case after a down day and week. I can hardly wait!
1st Posting Friday, 5/04/2012 9:15 AM
Asian markets ended with mixed results, with the Nikkei and Shanghai up, the others down, India by nearly 2 per cent. European markets were also mixed, with Italy and Spain up, the others down. France and Greece both hold elections over the weekend, which will impact the Eurozone next week. U. S. futures are in the red following a disappointing monthly Unemployment report, with 115K jobs added when 162K jobs was the consensus economist forecast.
Only a couple of ratings changes to report this morning, on stocks I follow:
Enterprise Products Partners LP (EPD) had coverage assumed at Credit Suisse with an OutPerform rating.
MicroSoft had coverage resumed by Stifel Nicolaus, with a Buy rating.
Some early earnings news on my stocks this morning is as follows:
Exelon (EXC) reported Q1 EPS of $.85 this morning, beating by $.05. Revenue was $4.68 B, down 2.5% Y/Y.
Buckeye Partners LP (BPL) reported Q1 EPS of $.54, which may not be comparable to the consensus $.76. Revenue was in-line.
Alliant Energy (LNT) reported Q1 EPS of $.50, missing by $.14. Revenue of $765M, down 14% Y/Y, missed by $57M. If LNT dips on these less-than-stellar results, it may be a buy opportunity.
It is looking like a down day is coming.
Final Posting Thursday, 5/03/2012 5:15 PM
Stocks just could not catch a bid today, as all the major averages ended up with losses on a quiet day of trade. Volatility was low, but the trend was down all day.
Several more of my stocks released earnings today:
SCANA (SCG) reported Q1 EPS of $.93, missing by $.09. Revenue of $1.11B, down 13.6% Y/Y, missed by $170M. SCG lost $.10 on the day, closing at $45.87.
Inergy (NRGY) reported FQ2 EPS of $.31, which the company said may not be comparable to the consensus of a negative $.17. Revenue of $552M, down 8.1% Y/Y, beat by $6M. NRGY lost $.16 today, closing at $18.91.
Consolidated Communications (CNSL) reported Q1 EPS of $.18, missing by four cents. Revenue of $93.4M, down 2.1% Y/Y, beat by $1M. CNSL lost $.57 today, closing at $18.56. With a payout ratio of 178%, one has to wonder how long this rural telecom can continue to pay the current $.38 dividend, yielding 8.35%.
MFA Financial will now report earnings tomorrow, May 4th.
The market may be bracing for a downbeat employment report in the morning, getting a head start on a decline, perhaps. We shall soon see.
1st Posting Thursday, 5/03/2012 9:15 AM
Asian markets finished mostly to the downside, with only the Nikkei and Shanghai posting modest gains. By contrast, European markets are all in the green at this moment. U.S. futures have turned modestly positive after the mornings’ data dose. Unemployment Claims data was slightly better than expected, as was the preliminary Q1 reading on Productivity and Unit Labor Costs.
None of the stocks I track received any upgrades/downgrades so far today.
Triangle Capital (TCAP), a BDC I own, which is on my Tier3 list of high-yield stocks, reported last night, with Q1 EPS of $.49 in-line with estimates.
I expect a quiet market today, just marking time while waiting for tomorrow’s monthly reading on Unemployment from the Department of Labor.
Final Posting Wednesday, 5/02/2012 6:15 PM
Stocks started off on a down note, as the futures predicted, but slowly recovered most of the lost ground as the day wore on, with the blue-chip averages ending with modest losses, while the NASDAQ and small-cap Russell 2000 posted modest gains.
A couple of upgrades/downgrades that came out since this morning were:
ONEOK Partners L P (OKS) had coverage assumed by Credit Suisse with an OutPerform rating.
Kinder Morgan Inc (KMI) was upgraded from Neutral to OutPerform at Credit Suisse.
Earnings reported today by stocks I follow were:
Enterprise Products Partners (EPD) reported Q1 EPS of $.73. EPD stated that the results may not be comparable to estimates of $.57. Revenue of $11.3B, up 10.5% Y/Y, beat by $270M. EPD gained $.98 today, closing at $52.67.
Public Service Enterprise Group (PEG) reported Q1 EPS of $.97, beating by $.30. PEG lost $.08 today, closing at $31.39.
Magellan Midstream Partners (MMP) reported Q1 EPS of $.83, missing by $.09. Revenue of $443M, up 11.4% Y/Y, missed by $24M. MMP declined $.29 today, closing at $70.89.
American Capital Agency (AGNC) reported after the close that Q1 EPS was $2.66, and net interest income was $408M. Book value was reported at $29.06. AGNC ended the day about where it began, closing at $31.13.
Annaly Capital (NLY) reported after the bell that Q1 EPS was $.92, that the average interest rate spread was 171 bps, and that the leverage ratio was 5.8 to 1, both reduced from a year ago, good in the case of leverage, bad in the case of the interest rate spread. NLY declined $.12 today, closing at $16.29.
Nothing much is going to happen in the markets until the monthly Unemployment Report is released on Friday, barring some type of geopolitical event.
1st Posting Wednesday, 5/02/2012 9:15 AM
Asian markets mostly finished in plus territory, with India being an exception, closing out with a small loss. European markets are mostly trading down at the moment. U.S. futures took a tumble after the release of a disappointing ADP Employment report a few minutes ago, portending a negative start to the trading day.
Several new analyst ratings have come out this morning on stocks I follow:
ConocoPhillips (COP) was downgraded from Neutral to UnderPerform at BofA/Merrill.
Boardwalk Pipeline Partners L P (BWP) had coverage reinstated at Credit Suisse, with an OutPerform rating.
ConocoPhillips (COP) had coverage resumed at JP Morgan, with an OverWeight rating.
Raytheon (RTN) had coverage initiated at CRT Capital, with a Fair Value rating.
Lockheed Martin (LMT) had coverage initiated at CRT Capital, with a Sell rating.
Northrop Grumman (NOC)also had coverage initiated at CRT Capital with a Sell rating.
I suppose it is safe to say that CRT Capital does not believe that now is a good time to be buying defense stocks.
There will be lots of earnings to report on tonight – I will catch up on all of my stocks reporting today in the PM post.
Time to get ready for a down day – maybe there will be a buy opportunity or two.
Final Posting Tuesday, 5/01/2012 7:30 PM
Stocks kicked off the new month with a strong rally, although they did pull back from the apex reached at midday. Only the small-cap Russell 2000 index failed to show a gain today, declining 1 point. All of the other major indices finished with healthy gains. Among other positives, the ISM reading came in a little stronger than expected, which is as good of an excuse as any to stage a rally.
Before I get to earnings, a couple of upgrades/downgrades that came out today on stocks I follow are:
Energy Transfer Equity L P (ETE) was upgraded from Hold to Buy at Deutsche Bank.
Did I say a couple? Actually, ETE was the only one.
Now, moving on to earnings on stocks I track, there are a couple or three, or would you believe, five:
ONEOK Partners L P (OKS) reported Q1 EPS of $.91, beating by $.10. In spite of the good results, OKS declined $.35 today, closing as $55.41.
HCP Inc (HCP) reported Q1 EPS of $.67, beating by a penny. Revenue of $459M, up 38.6% Y/Y, missed by $3M. How can a 38% increase be a miss? Darn analysts, they just expect so much! HCP gained five cents today, closing at $41.50.
Emerson Electric (EMR) reported FQ2 EPS of $.74, missing by $.06. Revenue of $5.92B, up 1.1% Y/Y, missed by $80M. EMR fell $3.36 today, closing at $49.18. Investors were clearly displeased.
Pfizer (PFE) reported Q1 EPS of $.58, beating by a penny. Revenue of $15.4B, down 6.6% Y/Y, was in-line. PFE lost $.12 today, closing at $22.78.
Solar Capital (SLRC) reported earnings of $46.2M, or $1.26 per share, and a Net Asset Value increase of 3%, to 22.68. SLRC closed up a penny today, at $20.77. The BDC takes pains in its literature to note that it is not limited to investments in solar, but I suspect the stock has been hammered the last few weeks from “guilt by name association”, declining from nearly $24 in mid-February.
My new article on MLPs on Seeking Alpha has been well-received, with many encouraging comments. I swear, I did NOT post those comments under various pseudonyms, they all came from actual readers. In fact, I am so encouraged I’m going to start working on my next article, taking a look at “big pharma”. I go into my research with a serious negative bias. I hate the revolting drug ads, but at least they have to run through the litany of possible side effects. But, just like tobacco or fast food, I don’t let my personal bias’ interfere with making money; if my research determines a major drug company should be bought, so be it.
1st Posting Tuesday, 5/01/2012 9:30 AM
Most Asian and European markets were closed on May 1, as they marked the May Day Holiday. Japan and Britain were open, however, with the former ending down, and the latter ending up. Australia was also open, and finished in positive territory as well. U.S. futures are ever so slightly positive.
The major economic release scheduled for today is the monthly ISM Index, which reflects an industrial survey of purchasing managers, and is indicative of upcoming economic activity levels. The ISM Index can move the market, if it surprises either way.
I have a new article out this morning on Seeking Alpha, another installment in my “Yield, Value, etc.” series, this time focusing on Master Limited Partnerships (MLPs). This was a challenging topic, to say the least, but I believe I have assembled some useful information for investors contemplating an MLP investment. A link is available under the major menu option, “SA Articles”.
I’m sure tonight’s post will have some earnings data to report.