Every afternoon (and morning) we provide an update on global market levels, company news, economic news, and hedge fund news. Stocks in focus today include; NVDA, GLE, GM, ETFC, GLE, DV, LGF, FIO, GM, CG
Post Market Update
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
- US: Dow: 13165.20 (-0.08%), S&P 500: 1402.80 (0.04%), NASDAQ: 3018.64 (0.25%)
- Europe: CAC: 3456.71 (0.53%), DAX: 6964.99 (-0.02%), FTSE: 5851.51 (0.10%).
- Asia-Pacific: Australia: 4308.30 (-0.10%), China: 2174.10 (0.60%), Hong Kong: 20269.47 (1.01%), India: 5322.95 (-0.28%), Japan: 8978.60 (1.09%).
- Metals: Gold: 1620.20 (0.26%), Silver: 28.10 (0.08%), Copper: 3.42 (0.10%)
- Energy: Crude Oil: 93.36 (0.01%), Natural Gas: 2.94 (0.41%)
- Commodities: Corn: 8.23 (0.89%), Soya Bean: 16.31 (3.16%), Wheat: 9.27 (1.48%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2306 (0.47%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5641 (0.10%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.5650 (0.18%)
- 10 year US Treasury: 1.688% (0.039)
Market and Economy News Update
U.S. markets end little changed: U.S. markets closed largely unchanged in lackluster trading on Thursday as a better-than-expected jobless claims report offset investor concerns about a worsening of Europe’s economy. The Dow Jones Industrial Average (INDEXDJX:.DJI) slid 10.45 points, or 0.08 percent, to finish at 13,165.19. The S&P 500 (INDEXSP:.INX) squeezed out a gain of 0.58 points, or 0.04 percent, to end at 1,402.80, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) gained 7.39 points, or 0.25 percent, to close at 3,018.64.
Oil prices rise: Oil prices rose on Thursday amid news of a tropical storm over Mexico and lower outlook for North Sea Brent crude production. Crude oil for September delivery gained 0.1 percent, to settle at $93.36 a barrel on the New York Mercantile Exchange. Brent oil for September settlement rose 1 percent to $113.22 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- General Motors Company (NYSE:GM) closed 1.3 percent higher after Chairman and Chief Executive, Dan Akerson, bought 25000 shares of the company’s stock at an average price of $20.35, increasing his stake by 10 percent, according to a recent U.S. regulatory filing.
- Online financial-services firm E Trade Financial Corporation (NASDAQ:ETFC) rallied 6.9 percent after its board ousted its Chief Executive Steven Freiberg and named its current chairman, Frank Petrilli, as interim chief executive.
- NVIDIA Corporation (NASDAQ:NVDA) reported second quarter earnings excluding items of 27 cents a share on revenue of $1.04 billion that easily beat estimates of earnings excluding items of 14 cents a share on $1.01 billion in revenue. The company also forecast better than expected current-quarter revenue.
- Department-store chain Nordstrom, Inc. (NYSE:JWN) reported a 11 percent decline in second quarter earnings to $156 million or 75 cents per share, from $175 million or 80 cents per share a year earlier. Sales excluding credit card revenue increased 7.4 percent to $2.92 billion. Analysts were expecting earnings of 74 cents a share on revenue of $2.96 billion. The Seattle-based retailer also raised its full-year profit and sales outlook.
- Integrys Energy Group, Inc. (NYSE:TEG) said second quarter net income increased 66 percent to $49.6 million, or 62 cents per share, from $29.9 million, or 37 cents per share, in the same quarter a year earlier. Adjusted net income for the quarter came in at 26 cents per share, while revenue fell 17 percent to $841.9 million. Analysts were looking for earnings of 38 cents a share on revenue of $1.72 billion.
- Tech company Ubiquiti Networks Inc (NASDAQ:UBNT) posted fourth quarter earnings of 30 cents a share that beat estimates for 29 cents a share, while revenue was in line with estimates. The company provided lower than expected current quarter earnings and revenue outlook.
- CareFusion Corporation (NYSE:CFN) reported fourth quarter earnings excluding items of 51 cents a share, 2 cents above the average analysts’ estimate. Revenue stood at $968 million, also beating Street estimates of $956 million. The medical-device company also forecast better than expected full-year earnings.
- For-profit education services provider Devry Inc. (NYSE:DV) reported fourth quarter earnings of 47 cents a share that beat estimates of 44 cents a share, while revenue for the quarter came in at $505.9 million, in line with expectations.
- Movie and TV studio Lions Gate Entertainment Corp. (NYSE:LGF) reported a first quarter loss excluding one-time items of 33 cents a share on revenue of $472 million. Analysts were expecting earnings of 9 cents a share on $448 million in sales.
- Cisco Systems, Inc. (NASDAQ:CSCO) ended 3.2 percent higher after analysts at Goldman Sachs added the networking company to its “conviction buy” list. Piper Jaffray also upgraded the tech bellwether to “overweight” from “neutral” and raised its price target to $22 from $20.
- Computer hardware and software systems company Fusion-IO, Inc. (NYSE:FIO) reported fourth quarter earnings excluding items of 9 cents a share on revenue of $107 million that easily beat the average analysts’ estimate of 4 cents a share on revenue of $96 million.
- Coal miner James River Coal Company (NASDAQ:JRCC) reported a second quarter loss of $25.8 million, or 74 cents a share that was lower than estimates of a loss of 78 cent a share. Revenue declined 21 percent to $277.4 million from $352 million a year earlier.
- Beauty-products company Elizabeth Arden, Inc. (NASDAQ:RDEN) reported fourth quarter profit excluding item of 28 cents per share that was much better than the average analysts’ estimate of 20 cents per share. Revenue for the quarter increased 5 percent to $265.5 million, also topping estimates of $264.1 million. The company also forecast full-year profit above Street expectations.
- Energy producer, trader, and distributor Exelon Corporation (NYSE:EXC) said it will sell its three coal-fired power plants in Maryland to Raven Power Holdings, a company owned by private equity firm Riverstone Holdings LLC, for $400 million.
- Defense contractor Alliant Techsystems Inc. (NYSE:ATK) jumped 7.1 percent, as higher defense sales helped the U.S. military’s largest ammunition maker report a first-quarter profit above analysts’ expectations. It also raised its full-year forecast.
Hedge Fund News Update
- A state judge in New York has rejected a motion by sports- car maker, Porsche Automobil Holding SE (ETR:PAH3) (FRA:PAH3) to dismiss a $1.4 billion-plus lawsuit brought by 26 hedge funds, including David Einhorn’s Greenlight Capital Inc. and Glenhill Capital LP, alleging fraud and unjust enrichment stemming from the company’s trading in Volkswagen AG (ETR:VOW) (FRA:VOW)’s shares in 2008, Reuters reported.
- Carlyle Group LP (NASDAQ:CG) has agreed to buy a majority stake in mutual fund and hedge fund manager, TCW Group Inc. from Societe Generale SA (EPA:GLE).
- York Capital Management’s flagship multi-strategy fund recorded gains of between 3.11 percent to 3.62 percent for the first seven months of the year, against a rise of 11.01 percent in the S&P 500 (INDEXSP:.INX).
Brokerage Upgrades and Downgrades on Thursday, August 09, 2012
- Baker Hughes Incorporated (NYSE:BHI) was raised to “buy” from “hold” by analysts at Societe Generale with a target price of $67.
- Beazer Homes USA, Inc. (NYSE:BZH) was lifted to “overweight” from “underweight” by analysts at JPMorgan Chase.
- Endologix, Inc. (NASDAQ:ELGX) was raised to “overweight” from “neutral” by analysts at Piper Jaffray with a target price of $16.
- Fuel Systems Solutions, Inc. (NASDAQ:FSYS) was upgraded to “buy” from “hold” by analysts at ThinkEquity with a target price of $19.
- Interpublic Group of Companies, Inc. (NYSE:IPG) was raised to “buy” from “neutral” by analysts at Nomura with a target price of $13.
- KB Home (NYSE:KBH) was lifted to “overweight” from “neutral” by analysts at JPMorgan Chase with a target price of $13.
- PulteGroup, Inc. (NYSE:PHM) was raised to “overweight” from “neutral” by analysts at JPMorgan Chase with a target price of $15.
- Rosetta Resources Inc. (NASDAQ:ROSE) was lifted to “market perform” from “underpeform” by analysts at Raymond James.
- StanCorp Financial Group, Inc. (NYSE:SFG) was raised to “equal weight” from “underweight” by analysts at Morgan Stanley.
- Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) was upgraded to “buy” from “hold” by analysts at Cantor Fitzgerald with a target price of $60.
- AuthenTec, Inc. (NASDAQ:AUTH) was downgraded to “market perform” from “outperform” by analysts at Raymond James.
- Forest Laboratories, Inc. (NYSE:FRX) was lowered to “neutral” from “overweight” by analysts at JPMorgan Chase with a target price of $37.
- Hospira, Inc. (NYSE:HSP) was cut to “neutral” from “overweight” by analysts at JPMorgan Chase with a target price of $38.
- Lexington Realty Trust (NYSE:LXP) was downgraded to “hold” from “buy” at Stifel Nicolaus.
- Mid-Con Energy Partners LP (NASDAQ:MCEP) was lowered to “neutral” from “outperform” by analysts at Robert W. Baird with a target price of $23.
- NetApp Inc. (NASDAQ:NTAP) was cut to “hold” from “buy” by analysts at Cantor Fitzgerald with a target price of $38.
- Select Medical Holdings Corporation (NYSE:SEM) was downgraded to “sector perform” from “outperform” by analysts at RBC Capital with a target price of $14.
- TreeHouse Foods Inc. (NYSE:THS) was downgraded by analysts at SunTrust from “buy” to “neutral.”
- United Microelectronics Corp (ADR) (NYSE:UMC) was cut by analysts at Sanford C. Bernstein from “market perform” to “underperform.”