JT’s DAILY BLOG for Month Of May 2013
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 for Friday 05/31/2013 11:30 AM
Today started out with a computer disaster, as my laptop monitor has gone out. After much gnashing of teeth, I have managed to get a secondary monitor in place to serve as the primary, so I can function at a marginal level. So, better late than never, here is my daily update.
Stocks popped up at the open Thursday, then gradually tacked on further gains until around 2:30 PM, after which they declined steeply into the close. The end result was the major averages ended the day only modestly higher than where they ended the previous day. Still, it was a win for the bulls, even if not a convincing one. Overnight and into the day, Asian and European markets all posted declines, with the one exception being Japan, which posted a gain. U.S. stocks are mostly higher, with the exception of Energy and Precious Metals, which are trading in the red. The economic data release this morning regarding Personal Income and Spending was lower than predicted, indicating a stalling economy.
Several upgrades / downgrades of interest that have come out this morning are:
Statoil (STO) was upgraded from Neutral to OverWeight at HSBC Securities.
Greif (GEF, GEF.B) was initiated at Buy at Sidoti.
QR Energy LP (QRE) was downgraded from OverWeight to Neutral at JP Morgan.
Medtronic (MDT) was initiated at Neutral at Wedbush.
I will have to focus on a permanent solution to my computer problem in June, but for now, I just want to get through May.
1st Posting for Thursday 05/30/2013 10:30 AM
Running behind today even more than yesterday. Anyway, stocks stumbled through a down day Wednesday, with all of the major averages posting substantial declines. Per the futures and the initial half hour of trading, it looks so far like today will be a rebound day. That is in spite of some economic data that came out at 8:30 AM that was slightly worse than expected. Specifically, the Weekly Claims for Unemployment came in at 354K vs. 340K expected, and the revised 1st Quarter GDP came in at 2.4% vs. the 2.5% expected. Asian markets finished down except for India, and European markets are in the green at this hour, except for Spain. Gold is up this morning, as is Newmont Mining (NEM), the mining stock I just recommended on Seeking Alpha.
Several stocks I track received upgrades / downgrades today:
Spectra Energy Partners LP (SEP) was initiated at Hold at Tudor Pickering.
Spectra Energy (SE) was initiated at Accumulate at Tudor Pickering.
Frontier Communications (FTR) was initiated at OutPerform at BMO Capital, with a $5 price target.
CenturyLink (CTL) was initiated at OutPerform at BMO Capital.
Verizon (VZ) was initiated at OutPerform at BMO Capital.
AT&T (T) was initiated at OutPerform at BMO Capital. I guess it is safe to say that BMO is bullish on the telecom sector.
Raytheon (RTN) was upgraded from Sell to Neutral at Goldman.
Nortrop Grumman (NOC) was upgraded from Neutral to Buy at Goldman.
Pfizer (PFE) was initiated at Reduce at SunTrust.
Merck (MRK) was initiated at Neutral at SunTrust.
Statoil (STO) was upgraded from UnderPerform to Neutral at Credit Suisse.
Time to publish and see what is going on today with my stocks.
1st Posting for Wednesday 05/29/2013 10:00 AM
Running way behind this morning. U.S. stocks started out the week Monday morning with a significant advance, with the Dow Industrials up over 200 points early. As the day wore on, about half of the gain was given back, but still, by the closing bell, all of the major averages recorded healthy gains from the prior Friday’s close. Overnight, Asian stocks ended mixed, with Japan and Shanghai up modestly, the others down. European markets are all trading in the red at this hour, as the European trading day is about half an hour away from the close. U.S. futures were negative pre-market, and indeed the market has started off on a down note.
Only one upgrade / downgrade of interest has come out this morning, as Enerplus (ERF) was downgraded from OutPerform to Sector Perform at RBC Capital. The one time “granddaddy of the Canadian Trusts” has fallen from glory, no doubt, but is still paying out monthly dividends, and is in a turnaround mode.
My article on Newmont Mining (NEM) has been fairly well-received, with several comments from readers with an opinion on the stock.
1st Posting for Tuesday 05/28/2013 9:00 AM
Stocks did well to get back to even on Friday, or very nearly so, after an early decline. By the end of the session, the major averages were about back to where they ended Thursday, led by the venerable Dow Industrial average, which actually finished with a small gain. The week ended a string of weekly gains, closing lower than where it ended the prior Friday. Overnight, Asian markets rallied strongly. European markets are likewise in rally mode across the board at this hour. U.S. futures are up strongly, indicating a positive start is in store for the start of the holiday-shortened week.
Stocks on my lists receiving upgrades / downgrades this morning are:
GlaxoSmithKline (GSK) was upgraded from Hold to Buy at Deutsche Bank.
Public Service Enterprise Group (PEG) was upgraded to Neutral from UnderPerform at Credit Suisse.
Exelon (EXC) was downgraded from Buy to Hold at Deutsche Bank.
Several of my stocks will be going ex-dividend this week, two on Wednesday, and the rest on Thursday, as follows:
Molson Coors (TAP), yield 2.48%.
Prospect Capital (PSEC), yield 12.22%. PSEC is a monthly dividend payer.
Barrick Gold (ABX), yield 4.18%. ABX is a new addition to my Tier3 list.
McDonalds (MCD), yield 3.07%.
Kellogg (K), yield 2.73%.
NextEra Energy (NEE), yield 3.42%.
Realty Income (O), yield 3.94%. O is a monthly dividend payer.
Safety Insurance Group (SAFT), yield 4.53%.
Centurylink (CTL), yield 5.80%.
I have updated the prices, dividend rates, and yields as of Friday, 5/24/2013, on all of my stocks, Tiers1, 2, and 3. In many cases, I gave in to reality and updated my target prices for buys and sells, as well. A few other changes were made. I dropped Heinz (HNZ) from Tier1, since Warren Buffett will soon be eliminating the company from the publicly-traded stock universe. Also in Tier1, I changed the numbers to reflect the recent 2 for 1 stock split for Colgate Palmolive (CL). I eliminated Biomed Realty (BMR) from Tier2, which I had on the list for just a short time. When Josh Peters, editor of the Morningstar Dividend Investor, eliminated BMR from favor on his list, I had no reason to retain it. I added another small MLP to Tier3, Martin Midstream (MMLP), and I added four mining stocks now yielding over 4% to Tier3, not so much because of ultra-high yields, but because I consider them a speculative opportunity on a rebound in precious metals prices. The stocks are Newmont Mining (NEM), Barrick Gold (ABX), Freeport McMoran (FCX), and Pan American Silver (PAAS). Note that I consider these to be high risk, but with high potential for appreciation, if gold & silver prices stage any kind of recovery in the next several months. Buying in to these names is a classic bottom-fishing speculation, with a pretty decent dividend as in the meantime. Of course, the dividends will likely evaporate rapidly if gold & silver prices continue to drop, as will the share prices of these stocks – that is the risk.
I have a new article out on Seeking Alpha this morning on the preceding topic, focusing on Newmont Mining as a speculative opportunity. See the Published Articles Section for a link.
1st Posting for Friday 05/24/2013 9:00 AM
Stocks on Thursday threatened a dramatic decline, based on the pre-open index futures, but as the day wore on, the opening losses were mostly regained by the end of the day on the major averages. Still, the prior day sell off has not been overcome, at least not yet. With a three-day weekend looming, today may see further selling, as nervous traders want to enjoy the weekend secure in the knowledge that profits have been locked in. Overnight, Asian markets ended mixed, with Japan, Shanghai, and India up, Hong Kong and Singapore down. European markets are mostly trading in the red at this hour, with only France showing a small gain. U.S. futures are negative, with about an hour to go to the open. Durable Orders for April will be reported shortly.
I have noticed only one upgrade on my stocks this AM, as Procter & Gamble (PG) was upgraded from Neutral to Buy at UBS. The CEO was replaced this week.
A front page article on MarketWatch this morning highlighted the opportunity for “patient” investors in Gold and Silver mining stocks. Two of my three speculations were mentioned, Barrack Gold (ABX) and Pan American Silver (PAAS). These stocks are under pressure right now, no doubt, but are available at 2008 prices, which present a tremendous value compared to most other sectors.
1st Posting for Thursday 05/23/2013 9:00 AM
Stocks on Wednesday looked early on like a gangbuster rally was in store, with the Dow Industrials up by triple digits. All was well on through to the end of Bernanke’s prepared remarks. But then, under questioning, it slipped out that QE to infinity might be overstating it a bit, and the slide began. Then, with the release of the minutes from the latest Fed meeting at 2:00 PM, the sell off was on, as it became apparent that the current Fed policy was under serious review. The Dow Industrials was down by triple digits at 3:30 PM, after which a modest, partial recovery occurred into the close. The see saw ride ended with all of the major averages posting substantial declines. Overnight, Asian markets plunged after data from China showed a weakening economy. Japan was down 7%, Hong Kong over 2%, and the rest over 1%. European markets are likewise trading with sizeable losses at this hour, over 2% in Germany, France, and Italy, and over 1% in Britain and Spain. U.S. futures are negative by wide margins, indicating a down day is in store, at least at the start. The weekly Unemployment Claims data has come out, slightly better than expected, but the futures held the lows after the announcement. At 10:00 AM, New Home Sales for April will be reported.
Only two upgrades/ downgrades of interest to report this morning:
Johnson & Johnson (JNJ) was initiated at UnderPerform at Credit Suisse, with a price target of $73. The market price came within a penny of $90 yesterday before the sell off. Can you spell “over-valued”?
Realty Income (O) was downgraded from Neutral to Sell at Goldman, another case of a good company with an insanely over-valued stock price.
While not one of my stocks, Hewlett Packard (HPQ) reported surprisingly good earnings yesterday, and the stock has been rising since the report. This morning, Jeffries upgraded the stock to Hold from UnderPerform.
What is going on here: JNJ and O downgraded, and HPQ upgraded? It is all about valuations.
The bears appear to be in the saddle today, and they are ready to ride on, it seems.
1st Posting for Wednesday 05/22/2013 9:00 AM
The string of positive market returns on Tuesdays continued yesterday, with the streak now having extended to 19 Tuesdays in a row. The gains were not huge, but respectably modest. Gold and silver resumed their slide after a one day respite on Monday. Overnight, Asian markets ended mixed, with Japan and Singapore up, Hong Kong, Shanghai, and India down. European markets likewise are trading mixed at this hour, with Britain and Italy positive, Germany, France, and Spain negative. U.S. futures are positive. Existing Home Sales figures for April will be released at 10:00 AM, and Fed Chairman Bernanke will be testifying before Congress today. Depending upon what is said, the event could be market-moving.
Upgrades / downgrades out on my stocks this morning are:
Pepsico (PEP) was initiated at OutPerform at BMO Capital.
Coca Cola (KO) was initiated at Market Perform at BMO Capital.
Dr Pepper Snapple was also initiated at Market Perform at BMO Capital.
Roche Holdings AG (RHHBY) was upgraded from Neutral to Buy at Citigroup.
Vodafone (VOD) reported yesterday morning, which I did not know was coming. The company’s website had no information on it that I could see, even though the Dividend Investor weekly update stated VOD would be reporting Tuesday. Anyway, FQ4 organic service revenue was down 4.2%, which was in line, but represented the worst quarterly drop on record. An impairment charge of £1.8B in Italy was taken, bringing total impairments for Spain and Italy to £7.7B for the full year. Sales were down 4.2%, to £44.4B and core earnings were off 3.1%, to £13.3B. Adjusted operating profit beat estimates, rising 9.3% to £12B. The company said it will keep its 45% share of Verizon's dividend payment to shore up operations. It takes some analysis to determine what an ADR holder will receive from Vodafone’s announced dividend of 6.92 pence. Subject to error, I come up with around $1.05. One ADR equates to ten ordinary shares, and 1 British Pound equals 100 pence equals $1.51249 at today’s exchange rate. Doing the math, 6.92 pence per ordinary share, 1 ADR will receive 10 * .0692 * $1.51249 = $1.047, or $1.05 rounded to whole cents. The ex-dividend date has not been identified, at least that I can tell, but should be in early June.
Today will be an interesting day. Rumors have circulated that the Fed Chairman may be leaving in a few months. Perhaps today’s testimony will provide a clue.
1st Posting for Tuesday 05/21/2013 9:00 AM
Stocks gyrated above and below the flatline Monday, finally finishing the session slightly below it, as most of the major averages ended with small declines. The New York Composite Index, strongly influenced by energy stocks, was an exception, finishing with a small advance. Overnight, Asian markets ended mixed, with Japan and Shanghai up, Hong Kong, India, and Singapore down. European markets are mostly trading with losses at this hour, with only Britain holding on to positive territory, with a miniscule advance. There are no economic releases scheduled for today. U.S. futures are flat, with less than an hour to go to the open.
None of my stocks have received any analyst actions this morning.
Just as I was about to add to my positions in a couple of mining stocks yesterday, the sector turned around and the stocks advanced, along with the gold and silver ETFs, GLD and SLV. Pan American Silver (PAAS) goes ex-dividend tomorrow, so I will hold at least until then. Barrack Gold (ABX) will go ex-dividend on May 29th, so I plan to hold ABX at least that long. Newmont (NEM) will go ex-dividend on June 10. I actually plan to hold NEM for a longer time, maybe a year or two. I still believe these stocks offer value in a market that offers very little of that commodity at the moment. Just remember, these are speculations, not investments.
1st Posting for Monday 05/20/2013 9:00 AM
Stocks popped up at the open Friday, stabilized and held those gains until around 2:00 PM, then took off from there to still higher levels into the close. All of the major averages ended the day, and also the week, higher. Overnight, Asian markets ended with substantial gains, with India being the lone exception, ending with a modest decline. European markets are trading lower in most cases at this hour, with only Germany showing a modest advance. Italy and Spain are both down over 1%. There are no economic releases on tap today. U.S. futures are modestly negative, with less than an hour to go to the open.
Only one of my stocks has received any analyst attention this morning:
Northrop Grumman (NOC) was upgraded from Hold to Buy at Drexel Hamilton.
NOC was also upgraded by CRT Capital, from Sell to Fair Value.
Several of my stocks will be going ex-dividend this week:
ENI S P A (E), 5/20/2013, yield 5.39%. E is a semi-annual dividend payer. The yield is before foreign tax withholding of 20%.
ConocoPhillips (COP), 5/22/2013, yield 4.17%.
3M Co (MMM), 5/22/2013, yield 2.28%.
Johnson & Johnson (JNJ), 5/23/2013, yield 3.00%.
Northrop Grumman (NOC), 5/23/2013, yield 2.97%.
I apparently missed Statoil (STO) last week. The ex-dividend date for the annual dividend was Friday, 5/17/2013, per the Norwegian firm’s website. The yield is 4.77%, before foreign tax withholding of 25%. In my defense, the E*Trade “Snapshot” view still only shows last year’s ex-dividend date, coincidentally 5/17/2012, and I rely on that source for ex-dividend data.
None of my stocks are due to report this week.
As mentioned in earlier posts, I have speculated on a couple of mining stocks recently, Newmont (NEM), Barrick Gold (ABX), and Pan American Silver (PAAS). All three pay a dividend soon, in the 4% range. considering today’s depressed share prices. Of course, all three are vulnerable to declining gold, silver, and copper prices, and these dividends are not safe if precious metals continue to decline. The question is, how low can gold and friends go, with central banks worldwide depreciating their respective currencies to an extent not seen in my lifetime, and possible not ever seen before? I wish I knew the answer to that question, but since I don’t, I tip-toed into these positions very lightly, with just a few shares in each case. That approached has been vindicated over the past two weeks, as these stocks have fallen further over that time frame, giving me an opportunity to average down for a lower cost basis. I still believe these stocks will rise again “soon”, in less than a year, I hope. But what I have done in this case is definitely speculating, not investing. Look at a one to three year chart of these names vs. a typical blue chip, and if you seek “value”, they have it, unless you believe they are totally done for, which I don’t think is the case. I will grant that I have been early with this move, maybe way early. I should have waited for the bottom to be established before going in. Live and learn!
1st Posting for Friday 05/17/2013 8:45 AM
Stocks finally took a breather Thursday, as all of the major averages posted modest declines by the end of the day. The NASDAQ was the last to succumb, as Cisco Systems (CSCO) posted the biggest daily advance it has achieved since August 2011, which in turn bolstered the tech heavy NASDAQ stock average. Overnight, Asian markets mostly finished higher, with Shanghai leading the advance, up over 1%. Only Singapore finished down, with a tiny loss. European markets are all trading higher, as the European trading day moves past the half way point. Two economic releases are on tap for later on this morning, the latest University of Michigan Sentiment Indicator reading, and the composite of Leading Indicators for April. U.S. futures are positive, with less than an hour to go to the open.
None of my stocks have received any upgrades or downgrades so far today.
While silver managed to stabilize on Thursday, for one day at least, gold continued to decline. Pre-occupied with CSCO and the tech rally, I missed an early morning opportunity to add to my positions in Newmont (NEM), Barrick Gold (ABX), and Pan American Silver (PAAS). By the time I noticed what had happened, they had come up from the lowest levels, so I took no action. If it happens again, I will add to these positions, up to a pre-determined position size. I’m looking at these stocks as a speculation that may well require months to pay off, maybe even a year or more. These three firms have handled adverse conditions in the past, and I believe they will do so again, and survive to prosper once again. That is the essence of value investing, buy a beaten-down issue that can survive, and that has the potential to recover and advance when things improve.
1st Posting for Thursday 05/16/2013 9:30 AM
The stock rally that will not quit continued on Wednesday, defying some lackluster economic data announced early that same day. Overnight, Asian markets mostly registered gains, with only Japan printing a small decline. European markets are mixed at this hour, with Britain and Italy up slightly, while Germany, France, and Spain are in the red. Another dose of economic data has already come out this morning, with the Weekly Claims for Unemployment coming in a little higher than expected, and the CPI lower than expected. Still no inflation to speak of, at least per the official figures. U.S. futures are slightly negative for the blue chips, while the NASDAQ futures are positive.
I have only one upgrade / downgrade to report this AM, as Molson Coors (TAP) was upgraded from Hold to Buy at Stifel Nicolaus.
Now, on to earnings. Cisco Systems (CSCO) reported yesterday FQ3 EPS of $0.51, beating by two cents. Revenue was $12.2B, beating by $0.02B. While good, these results did not seem that extraordinary, but the stock exploded in after-hours trade, up nearly two dollars.
This morning, Wal-Mart (WMT) reported Q1 EPS of $1.14, missing by a penny. Revenue was $114.19B, up 3.9% Y/Y, missing by $2.23B.
I have entered small positions in two more beaten down mining stocks, Barrick Gold (ABX) and Pan American Silver (PAAS). This is undoubtedly speculation on my part, but I don’t believe gold and silver can stay down with every central bank world-wide doing all they can to depreciate their respective currencies. These stocks represent deep value, and they pay a respectable dividend while I wait. Of course, if things keep going South, these dividends will be at risk, so nothing is guaranteed. But if you seek out and buy value, you at least have a chance to make money. Another commodity play to consider is uranium, which means Cameco (CCJ). This issue has been in the dumpster since Fukishima, but sooner or later uranium prices, and CCJ, have to make a comeback. So far, it has been later, not sooner.
1st Posting for Wednesday 05/15/2013 8:45 AM
Stocks roared back to life on Tuesday after a muted start on Monday, with healthy gains being registered on all of the major averages. Overnight, Asian markets followed the U.S. lead, with all major markets posting gains, over 2% for India and Japan. European stocks are also mostly trading in the green at this hour, by more modest margins. Only Germany is in the red, and only by a very slim margin. U.S. futures are flat to slightly negative, as a deluge of economic data is about to be unleashed. On tap are the PPI for April, Empire Manufacturing for May, Industrial Production for April, and several other data points.
Only a couple of upgrades/ downgrades of interest have come out so far this morning:
Inergy (NRGY) was upgraded from Neutral to OverWeight at JP Morgan.
Unilever (UL) was upgraded from Neutral to Buy at Nomura.
The market might take a breather today after the strong rally on Tuesday. The action today will be influenced by the economic data, most of which will be out before the open. We will soon have the answer.
1st Posting for Tuesday 05/14/2013 9:00 AM
Stocks moved very little Monday, with a lackluster session ending with mostly small declines. Overnight, Asian markets ended mixed, with Japan, Hong Kong, and Shanghai posting losses, while India and Singapore posted gains. European markets are mixed at this hour, with both gains and losses limited to modest increments. U. S. futures are flat, with a slight positive bias. The only economic release of the day has already come out, as both Import Prices and Export Prices registered larger declines than expected.
I only have one analyst action to report this morning, as Diebold (DBD) was initiated at Neutral at Susquehanna.
Tuesdays have been up days more often than not in recent weeks. We will soon see if the pattern holds up this week.
1st Posting for Monday 05/13/2013 8:30 AM
Stocks threatened to close flat or slightly negative on Friday until a late day surge materialized, sending all of the major averages into plus territory for the day. The net result for the entire week was also a gain, so the stock rally is definitely still ongoing. Overnight, Asian markets mostly ended with declines, with Japan being an exception, posting a gain of more than 1%. European markets are trading in the red at this hour, but only by small margins in most cases. U.S. futures are negative, with about an hour to go to the open.
Economic releases for the day will be Retail Sales data for April at 8:30 AM, then Business Inventories for March at 10:00 AM.
Three of my stocks received analyst attention this morning:
Biomed Realty (BMR) was upgraded from Hold to Buy at Stifel Nicolaus.
Cisco Systems (CSCO) was upgraded from UnderPerform to Market Perform at FBR Capital.
Digital Realty (DLR) was upgraded from Hold to Buy at MLV Equity.
A number of my stocks will be going ex-dividend this week. They are listed as follows, by date:
Fifth Street Finance (FSC), yield 10.59%. FSC pays monthly.
Exelon (EXC), yield 3.47%. This will be the first dividend at the new lower rate.
MicroSoft (MSFT), yield 2.81%.
Chevron (CVX), yield 3.25%.
Emerson Electric (EMR), yield 2.83%.
Royal Dutch Shell PLC (RDS.B), yield 5.04%.
Smucker J M Co (SJM), yield 2.01%.
Diebold (DBD), yield 3.75%. Still waiting on the hire of a new CEO. The stock has actually gotten back above $30 recently, on no news that I have seen.
Gladstone Investment (GAIN), yield 8.28%. GAIN also pays monthly.
Main Street Capital (MAIN), yield 6.22%. MAIN pays monthly.
Walgreen (WAG), yield 2.26%.
Also, ENI S P A (E), the Italian oil company, will go ex-dividend 5/20/2013, and will be paying .54 Euro per ordinary share, which converts to around $1.40 per ADR, considering that each ADR equates to two ordinary shares, and the current Euro to U.S. Dollar exchange rate is one Euro equals 1.29770 U.S. Dollars. Of course, that exchange rate will change before the actual conversion for ADR holders occurs., but hopefully not by a lot. The payment represents the balance of the 2012 dividend. There is a substantial tax withholding of 20% on the payments. E pays twice a year, not necessarily in equal amounts, and the payments are not necessarily six months apart. In this case, the prior payment, the first for 2012, was for the same amount, in Euros at least, and with an ex-dividend date of 9/24/2012, was closer to eight months ago. To receive the dividend, ADR shares of E must be acquired before the week is done.
Only two of my stocks are scheduled to report earnings this week:
Cisco Systems (CSCO), 5/15/2013, after market hours.
Wal-Mart Stores (WMT), 5/16/2013, before market hours.
I will be adding Newmont Mining (NEM) to my Tier3 list soon. While not a high yield in the high singles and beyond like most others in Tier3, when it can be bought in the low $30’s, a yield of 4% results. Barring a huge slide in gold and copper prices from here, the dividend should be firm, and the stock has plenty of appreciation potential for patient holders. I have taken a small position recently, adding to it on declines below $33.
1st Posting for Friday 05/10/2013 9:30 AM
Stocks were positive Thursday until around 2:00 PM, after which they sold off, with the result being that the day ended with modest losses on the major averages, breaking the string of new highs being set. Asian markets ended higher, Japan up nearly 3%. European markets are mostly positive at the moment, with only Spain showing a loss. U.S. futures are positive.
Only one upgrade / downgrade to report this AM, as PennantPark (PNNT) was downgraded from OutPerform to Market Perform at FBR Capital.
None of my stocks have reported earnings since my prior posting. Today may be a slow day, with the only economic release being the Treasury Budget at 2:00 PM.
1st Posting for Thursday 05/09/2013 9:15 AM
The stock rally continued on Wednesday, although the gains were not as much as Tuesday. Overnight, Asian markets mostly declined, with the exception of Singapore, which managed a modest advance. European markets are all trading down so far, as the trading day on the Continent passes the half way mark. U.S. futures are negative, even though the Weekly Claims for Unemployment release, just out, was less than expected. None of my stocks were upgraded or downgraded this morning, so far.
Earnings reports that came out yesterday on my stocks are as follows:
Triangle Capital (TCAP) reported Q1 NII of $0.56, missing by a penny.
CenturyLink (CTL) reported Q1 EPS of $0.76, beating by seven cents. Revenue was $4.51B, down 2% Y/Y, in-line.
Energy Transfer Partners (ETP) reported Q1 EPS of $0.60, beating by thirteen cents. Revenue was $10.85B, up 720% Y/Y, beating by $1.45B.
Westar Energy (WR) reported Q1 EPS of $0.40, beating by nine cents. Revenue of $546.21M beat by $35.18M.
Energy Transfer Equity (ETE) Q1 EPS of $0.32, beating by six cents. Revenue was $11.18B, up 569% Y/Y, beating by $1.23B.
Fifth Street Finance (FSC) reported FQ2 EPS of $0.28, in-line. Revenue was $54.7M, beating by $0.65M.
PennantPark (PNNT) reported FQ2 NII of $0.25, missing by two cents.
This morning, Windstream (WIN) reported Q1 EPS of $0.10, missing by a penny. Revenue was $1.5B, down 2% Y/Y, missing by $0.03B.
Also this morning, Consolidated Communications (CNSL) reported Q1 EPS of $0.21, beating by seven cents. Revenue of $156.3M missed by $0.71M.
Today may be time for the rally to take a breather.
1st Posting for Wednesday 05/08/2013 8:45 AM
Ho Hum, another day, another new high for the Dow, and so it goes. Stocks continued to rally Tuesday, coming back to life after a sleepy session on Monday. Overnight, Asian markets likewise rallied, following the U.S. lead. European markets are similarly trading in the green on all five major bourses headlined by MarketWatch. U.S. futures are flat, with a positive bias. The only economic data scheduled to come out today is the weekly reading on oil inventories.
Three upgrades / downgrades of interest have come out on my stocks this morning:
Emerson Electric (EMR) was downgraded from OutPerform to Market Perform at Bernstein, citing that the company’s end markets remain under pressure.
Plains All American Pipeline (PAA) was downgraded from OutPerform to Neutral at Credit Suisse, on valuation.
Eaton (ETN) was initiated at OutPerform at Bernstein.
Earnings that came out Tuesday on my stocks were as follows:
Emerson (EMR) reported FQ2 EPS of $0.77, missing by a penny. Revenue of $5.92B missed by $0.11B.
Health Care REIT reported Q1 FFO of $0.91, beating by a penny. Gross Revenue was $633.9M.
Molson Coors Brewing (TAP) reported Q1 EPS of $0.30, missing by five cents. Revenue of $828.5M, up 19.8% Y/Y, missed by $25.66M.
Inergy (NRGY) reported Q1 EPS of a negative $0.04, missing by ten cents. Revenue of $450.4M beat by $68.25M.
Ares Capital (ARCC) reported Q1 EPS of $0.38, missing by a penny.
TICC Capital (TICC) reported Q1 NII of $0.24, missing by three cents.
Williams Partners (WPZ) reported Q1 EPS of $0.50. beating by a penny.
Solar Capital (SLRC) reported Q1 EPS of $0.81, beating by $0.23.
NGP Capital Resources (NGPC) reported Q1 EPS of $0.11, missing by three cents.
MarketWatch today has a headline article “Roubini says look out for a big market crash”, which may help to tone down the enthusiasm. One reason cited is that there is a major disconnect between Wall Street and Main Street as to the state of the economy, which remains weak.
Time to get ready to see if the party continues.
1st Posting for Tuesday 05/07/2013 9:00 AM
Stocks basically just marked time Monday, with the major averages registering minimal gains in all cases but one – the Dow Industrials, which posted a minimal loss. Volatility was extremely low, with n0 TICK readings above + 750, nor below – 750. Overnight, Asian markets rallied, finishing with substantial gains in Japan, Hong Kong, and India, and at least on the plus side in Shanghai and Singapore. European markets are likewise trading in the green at this hour. U.S. stock index futures are positive, with about an hour to go until the open. The only economic release scheduled for today is Consumer Credit for March, due out at 3:00 PM.
I have but two analyst actions to report this morning:
Cisco (CSCO) was initiated at OutPerform at Cowen.
Statoil (STO) was downgraded from OutPerform to Neutral at Exane BNP Paribas.
Turning now to earnings on my stocks, yesterday the following reports came out:
National Health Investors (NHI) reported Q1 FFO of $0.85, beating by five cents. Revenue of $28.1M beat by $0.93M.
Sysco (SYY) reported FQ2 EPS of $0.40, missing by four cents. Revenue of $10.9B, up 4% Y/Y, missed by $0.2B.
Frontier Communications (FTR) reported Q1 EPS of $0.05, missing by a penny. Revenue of $1.205B, down 5% Y/Y, missed by $15M. Free cash flow was $206M, down 19% Y/Y. The company reaffirmed 2013 free cash flow guidance of $825M-$925M, and capex guidance of $625M-$675M. Overall, not good, but it could have been worse. The company also announced the next dividend, which will continue at the $0.10 per share rate.
Plains All American Pipeline (PAA) reported Q1 EPS of $1.26, beating by $0.29. Revenue of $10.62B, up 15.2% Y/Y, missed by $800M.
Prospect Capital (PSEC) reported FQ3 NII of $0.26, missing by five cents.
Safety Insurance (SAFT) reported Q1 EPS of $0.91, beating by twelve cents. Revenue was $181.8M.
A number of additional reports have come out this morning. I will catch these up with my next posting.
1st Posting for Monday 05/06/2013 8:45 AM
U.S. markets continued to rally Friday, with the Dow Industrials breaking the 16K barrier intraday, and the S & P 500 breaking the 1600 level and holding it through to the closing bell. The catalyst was a better than expected Monthly Employment report, which not only came in better than expected, but saw upward revisions to the prior two months.
Overnight, Asian markets ended mostly higher, with only Japan posting a decline. European markets are exhibiting the other side of the coin, as most markets are trading in the red, with only Britain showing a gain. U.S. futures are flat, with a slight downward bias. There are no economic releases scheduled for today.
A few upgrades / downgrades on my stocks have come out this morning:
Intel (INTC) was upgraded from Market Perform to OutPerform at RBC Capital Markets.
American Capital Agency (AGNC) was downgraded from Buy to Neutral at Nomura.
Exelon (EXC) was downgraded from Buy to Neutral at ISI Group.
Kimco Realty (KIM) was downgraded from Buy to Neutral at Goldman.
A number of my stocks will be going ex-dividend this week:
Magellan Midstream Partners LP (MMP), yield 3.90%.
PVR Partners LP (PVR), yield 8.71%.
Inergy LP (NRGY), yield 5.20%.
QR Energy LP (QRE), yield 11.10%.
Boardwalk Pipeline Partners LP (BWP), yield 7.04%.
Entergy (ETR), yield 4.67%.
Spectra Energy Partners LP (SEP), yield 5.37%.
American Electric Power (AEP), yield 3.84%.
GlaxoSmithKline PLC (GSK), yield 4.58%.
Pfizer (PFE), yield 3.31%.
Wal-Mart Stores (WMT), yield 2.37%.
Unilever PLC (UL), yield 2.95%.
Amerigas Partners LP (APU), yield 7.37%.
Spectra Energy (SE), yield 3.94%.
Exterran Partners LP (EXLP), yield 6.82%.
United Parcel Service (UPS), yield 2.88%.
Exxon Mobil (XOM), yield 2.80%.
Earnings season continues this week. Stocks on my lists scheduled to report are listed following, by date. Releases are before market hours, unless otherwise noted.
Frontier Communications (FTR).
Plains All American Pipeline LP (PAA).
Prospect Capital (PSEC).
Safety Insurance Group (SAFT).
Energy Transfer Equity LP (ETE).
Ares Capital (ARCC).
Emerson Electric (EMR).
Health Care REIT (HCN).
Inergy LP (NRGY).
Molson Coors Brewing (TAP).
TICC Capital (TICC).
Williams Partners LP (WPZ).
Energy Transfer Partners LP (ETP).
Triangle Capital (TCAP).
Westar Energy (WR).
It will be interesting to see if the rally can continue this week. Many pundits who have been predicting a correction for what seems like months, have so far been wrong. Someday they will be right, but when, that is the question.
1st Posting for Friday 05/03/2013 9:00 AM
The see saw ride continued Thursday, as stocks rallied strongly following the prior day, equally strong decline. Asian markets ended mixed, with Hong Kong and Shanghai up, the latter over 1.4%, while Japan, India, and Singapore all declined. European markets are mostly trading in the green at this hour, with Italy being the only laggard, presenting a small loss. A full plate of economic data will be served up shortly, including the key Monthly Employment Report from the Department of Labor. Economists are looking for a jobs gain of around 155K.
Several of my stocks have received analyst actions this morning:
ONEOK Partners LP (OKS) was downgraded from Accumulate to Neutral at Global Hunter.
Annaly Capital (NLY) was downgraded from OverWeight to Equal Weight at Evercore.
Sysco (SYY) was downgraded from Hold to Sell at Cantor, citing valuation and weak industry growth, with a $28 price target, well below the current market. The downgrade to Sell seems extreme, although admittedly SYY has struggled in recent months.
Magellan Midstream Partners LP (MMP) was upgraded from Neutral to OutPerform at Credit Suisse.
Now for earnings. Reports from my stocks that have come out since my last posting are:
Kraft Foods (KRFT) reported Q1 EPS of $0.76, beating by twelve cents. Revenue of $4.55B, up 2.1% Y/Y, beat by $6M.
American Capital Agency (AGNC) reported a Q1 "comprehensive" loss, with a negative EPS of $1.57, which the firm said may not be comparable to profit estimates of $1.08. No kidding. It may not be comparable to anything anyone expected. Perhaps the long-predicted decline of the MREITs has begun.
Hercules Tech (HTGC) reported Q1 EPS of $0.30, beating by five cents.
Alliant Energy (LNT) reported Q1 EPS of $0.72, beating by eleven cents. Revenue of $859.6M beat by $94.24M.
Spectra Energy (SE) reported Q1 EPS of $0.51, beating by three cents. Revenue of $1.59B beat by $0.04B.
Buckeye Partners (BPL) reported Q1 EPS of $0.86, beating by thirteen cents. Revenue of $1.34B beat by $0.05B.
Spectra Energy LP (SEP) Q1 EPS of $0.45, beating by three cents. Revenue of $60.9M beat by $0.57M.
The Payroll Report has been released, claiming that the U.S. added 165K jobs in April, a bit over the forecast. The headline number that gets the most attention, the Unemployment Rate, fell from 7.6% to 7.5%. As many have pointed out, the rate would be much higher if not for the significant decline in labor force participation that has been ongoing since the turn of the century.
The market evidently liked the report, stock futures are indicating a strong start to the day is in store.
1st Posting for Thursday 05/02/2013 9:15 AM
U.S. stock markets declined convincingly on the first day of May, after a record setting April, with the major averages all down nearly 1%. Overnight, Asian markets followed the U.S. lead in Japan, Hong Kong, and Shanghai, but not in India and Singapore, both of which advanced around 1%. European markets are trading mixed at this hour, with Britain and Italy down, Germany, France, and Spain up. A plethora of economic releases due out at 8:30 will likely set the tone for today, even as the futures are positive ahead of the data.
Upgrades / downgrades out this AM on my stocks are:
Exelon (EXC) was downgraded from Buy to Hold at Wunderlich.
Williams Partners LP (WPZ) was downgraded from Buy to Neutral at BofA/Merrill.
Turning now to earnings, a few more of my stocks have reported:
Kimco Realty (KIM) reported Q1 FFO of $0.32, in-line. Revenue of $241.2M beat by $15M.
Annaly Capital (NLY) reported Q1 EPS of $0.47, beating by thirteen cents.
Sanofi (SNY) reported that Q1 business net income fell to €1.61B, down 12% Y/Y, or €1.22 per share, missing estimates. Revenue fell to €8.1B, missing by €200M.
BioMed Realty (BMR) reported Q1 FFO of $0.47, beating by nine cents. Revenue of $160.5M beat by $19.9M.
Royal Dutch Shell (RDS.B) reported Q1 EPS of $1.19.
Statoil (STO) posted 58% lower Q1 net profit Y/Y amid lower production volumes and prices. Adjusted earnings were NOK42.4B vs. NOK59.2B in the year-ago period.
Magellan Midstream LP (MMP) reported Q1 EPS of $0.51, beating by three cents. Revenue of $432.4M missed by $80.8M.
That’s it for earnings so far today.
I have a new article out on Seeking Alpha on Consumer Staples, which as a group have been probably the best-performing group since the first of the year. The article is an update on an earlier article published a year ago. A link is provided under the Published Articles selection from the main menu.
1st Posting for Wednesday 05/01/2013 9:30 AM
It did not start out that way, but the final day of April turned out to be yet another win for the bulls. Several of the major averages notched new closing highs by the end of the day. Overnight, Asian markets finished mixed, with Japan and Shanghai down, Hong Kong, India, and Singapore up. In Europe, Britain and Germany are trading in the green, while France, Italy, and Spain are in the red, as the European trading day passes the half way mark. U.S. futures are flat after a lower than expected ADP Employment reading, giving rise to concerns about the Monthly Employment data release coming up on Friday.
One additional upgrade / downgrade came out on my stocks after I posted yesterday, as MicroSoft (MSFT) was downgraded from Buy to Hold at Standpoint Research.
NextEra Energy (NEE) was downgraded today from Buy to Neutral at ISI Group.
Breitburn Energy Partners LP (BBEP) was also downgraded this morning from Buy to Neutral, at Citigroup.
Diebold (DBD), which came out with a terrible earnings report yesterday morning, did indeed take a hit in the day’s trading, but actually held up fairly well considering the news, declining just $0.86 by the close. The conference call said all the right things, but at this point, talk is cheap, I want to see some improvement. A new CEO has yet to be hired, and things are getting worse, not better, it seems.
Additional earnings reports released since yesterday’s posting are as follows:
ONEOK Partners LP (OKS) reported Q1 EPS of $0.42, which the company said may not be comparable to consensus $0.59. The 2013 net income guidance range of $790M-$870M was reaffirmed, as was the predicted distributable cash flow range of $910M-$1B.
AmeriGas Partners LP (APU) reported FQ2 EPS of $1.61, missing by ten cents. Revenue of $1.18B, up 2% Y/Y, missed by $120M.
Merck (MRK) reported Q1 EPS of $0.85, beating by five cents. Revenue of $10.67B missed by $0.42B.
Exelon (EXC) reported Q1 EPS of $0.70, beating by two cents. GAAP-Revenue of $6.08B missed by $0.12B.
MFA Financial (MFA) reported Q1 EPS of $0.20, missing by a penny.
Time to start a new month and see if the “Sell in May” theory has any adherents.