Forest City Enterprises, Hiland Holdingsand Brown Shoe Company among 52-week lows
Also included among the results: Image Sensing Systems Inc. (Nasdaq:ISNS), Kenneth Cole Productions Inc. (Nasdaq:KCP), VeriFone Holdings Inc. (Nasdaq:PAY), Agree Realty Corp. (Nasdaq:ADC), Life Time Fitness Inc. (Nasdaq:LTM) and Hiland Partners LP (Nasdaq:HLND).
CBL & Associates, Starrett LS and Morgans Hotel Group among 52-week lows
Also included among the results: Seanergy Maritime Units (Nasdaq:SRG.U), Hiland Holdings GP LP (Nasdaq:HPGP), Trina Solar Ltd (Nasdaq:TSL), Ameristar Casinos Inc. (Nasdaq:ASCA), Louisiana-Pacific Corp. (Nasdaq:LPX) and Audiovox Corp. (Nasdaq:VOXX).
Here are the new 52-week lows among small caps:
Inergy Holdings, North American Energy Partners and Hiland Holdings among 52-week lows
Also included among the results: Flotek Industries Inc. (Nasdaq:FTK), Psychemedics Corp. (Nasdaq:PMD), Cheniere Energy Partners L P (Nasdaq:CQP), Cosan Ltd. (Nasdaq:CZZ), EZchip Semiconductor Ltd. (Nasdaq:EZCH) and Safe Bulkers Inc. (Nasdaq:SB).
Here are the new 52-week lows among small caps:
Red start to Friday on credit crunch worries, rising crude
Small-cap stocks opened sharply lower, pressured by a renewal of the credit crisis fears and reeling from a dramatic surge in crude oil that could crimp consumer spending habits and weigh on sentiment. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4.43, or 0.62%, at 715.12.
Financial shares sparked a wave of overnight selling after American International Group (NYSE:AIG) released earnings that disappointed investors and renewed concerns about debt write-downs among financial institutions. AIG tumbled 5% on the regular opening (which was better than the overnight showing), and the largest bank Citigroup (NYSE:C) was basically flat — also not as bad as overnight action — as the CEO spoke at an investor meeting.
There also was talk of asset allocation plays being back in vogue this morning, with investors shifting money away from equities and into treasury products. The old stock market adage “sell in May and go away” appeared to have a life this first full week of May trading.
In a Goldman Sachs research report released overnight, analysts say that the underlying shock of mortgage credit defaults is large and “still has a ways to go.” Although they say that some of the markets that have been beaten down will normalize and create positive spillover on sentiment in the broader economy, they said that excess housing supply, acceleration of home price declines and over leverage in the U.S. housing market will not go away anytime soon.
“We believe that such losses (from over leverage) imply further adverse surprises for balance sheets in parts of the financial sector, with correspondingly adverse effects on lending and economic activity. The focus of the pain is likely to shift away from subprime mortgages, where the markets are already discounting very large losses, to other residential mortgage debt, including prime mortgages. This is one reason why we are expecting a renewed slowdown in economic activity after the stimulus-fueled bounce in mid- to late 2008. In turn, it makes us fairly confident that . . .
Sector Watch: Energy infrastructure stocks
With global energy demand expected to rise 54% by 2025, accompanied by increasing oil prices, Gulf Island Fabrication, Inc. (Nasdaq: GIFI) and Hiland Holdings GP, LP (Nasdaq: HPGP) are benefiting from increased oil exploration activity and production spending by oil companies.
Gulf Island Fabrication builds drilling and production platforms that enable offshore oil exploration by energy companies. The company also constructs specialized structures used in off-shore production, such as jackets and decks for fixed production platforms and hulls and decks used for floating platforms, production storage and offloading vessels, offshore living quarters and tankers and barges. In addition, Gulf Island Fabrication provides offshore oilfield services such as connecting pipelines, lifting platform sections to be integrated into offshore ships, loading and offloading drilling rigs and production hulls, warehousing cargo and other materials.
The company operates fabrication yards in Louisiana and Texas and serves oilfield customers working in the Gulf of Mexico, Africa, the Middle East and the North Sea.
During the first nine months of 2007, Gulf Island Fabrication’s revenues improved 57% year-over-year to $371.8 million from $236.2 million and net income jumped 27% year-over-year to $22.3 million, or $1.56 per share, from $17.6 million, or $1.27 per share. Net income grew more slowly than revenues because of pass-through and contract labor costs Gulf Island Fabrication plans to pass on its customers.
So far in 2007, the company has increased cash dividend 33% to a $0.90 annualized rate. The outlook for the fourth quarter is equally as favorable: Gulf Island Fabrication ended the September quarter with a revenue backlog of $245.2 million and a labor backlog of approximately 2.7 million man-hours. Analysts expect this company to produce 35% growth this year, 28% growth next year and longer-term growth averaging 26% annually. Given this growth outlook, these shares appear reasonably priced at a nine times P/E multiple. My $35 target for Gulf Island Fabrication is above the closing price of $25.35 on Tuesday. The stock has traded between $24.88 and $39.37 over the last 52 weeks.
