Three Stocks That Have Behaved Like Tim Tebow
New Denver Broncos quarterback Tim Tebow has made a habit of finishing games strong after horrible starts. Here are three stocks that are doing the same thing.
Park-Ohio Holdings, Ocean Shore Holding and US Global Investors lead small-cap percentage losers
Also included among the results: Female Health Co. (Nasdaq:FHCO), La-Z-Boy Inc. (Nasdaq:LZB), Echelon Corp. (Nasdaq:ELON), Elbit Imaging Ltd. (Nasdaq:EMITF), Culp Inc. (Nasdaq:CFI) and SmartHeat Inc. (Nasdaq:HEAT).
Supertex, Navigant Consulting and Fuqi International lead small-cap percentage losers
Also included among the results: Cardinal Financial Corp. (Nasdaq:CFNL), Landrys Restaurants Inc. (Nasdaq:LNY), La-Z-Boy Inc. (Nasdaq:LZB), Parexel International Corporation (Nasdaq:PRXL), RTI International Metals Inc. (Nasdaq:RTI) and Taylor Capital Group Inc. (Nasdaq:TAYC).
FDA Warning on Zicam Pulls Down MTXX Almost 70%
Stocks started positive in morning trading, but quickly gave ground before the noon lunch hour Eastern time and never recovered. The Dow Jones Industrials were down 1.25% to close at 8,504; the Nasdaq closed down 1.11% at 1,796; and the S&P 500 shed 1.27% to end the day at 912.
Small-cap stocks, as measured by the Russell 2000 Index, fared worse, giving up 1.22% to close at 505.
Today's small-cap gainers were lead by STEC Inc (Nasdaq:STEC), a California-based memory chip maker, up 29%. STEC increased its Q2 financial outlook stating that improved sales of its ZeusIOPS solid-state drive product line had caused the company to revision its guidance. STEC now expects adjusted earnings of between 32 and 36 cents per share.
Other small-caps showing leadership include La-Z-Boy, (NYSE:LZB) up 22% on news that it returned to profitability in Q4 and beating analysts' EPS estimates; Merge Healthcare (Nasdaq:MRGE) up 17%; Alvarion (Nasdaq:ALVR) up 16%; and Satyam Computer Services (NYSE:SAY) up 16%.
Small-cap decliners were lead by Matrixx Initiatives (Nasdaq:MTXX) down 70% on receiving a warning from the U.S. Food and Drug Administration (FDA) to discontinue selling it's Zicam product and for consumer to stop using it immediately. The FDA has indicated that there have been 130 reported cases of people losing the sense of smell after using the products. Zicam is a leading product for preventing and minimizing the effects of the common cold when the patient uses the product at the first symptoms of a cold. The FDA action affects only the nasal swabs and gels and does not apply to the tablets or lozenges.
Although Matrixx is on record stating that the product does not cause a loss of smell the company has indicated that it will consider withdrawing the products in questions, which in total account for roughly 40 percent of its sales.
Other small-cap decliners include Myriad Pharmaceuticals (Nasdaq:MYRXV) down 32%; Magyar Bancorp (Nasdaq:MGYR) down 34%; A-Power Energy Generation Systems (Nasdaq:APWR) down 24% on news that first quarter earnings fell by nearly half; and two of yesterday's leaders: Jazz Pharmaceuticals (Nasdaq:JAZZ) down 17% and QEP (Nasdaq:QEPC) down 15%.
*****Jason Cimpl, technical analyst at TradeMaster Daily Stock Alerts, called yesterday's 2.5% drop on the S&P 500 to a tee. If you watched the video chart analysis from Jason that I included in Friday's Daily Profit, then you were ready for Monday's sell-off. I hope you were able to profit from it.
And bonus points to Jason for calling the closing level of the S&P within 2 points. I think Jason's video chart analysis will be a welcome addition to Daily Profit. Look for the next one in Friday's edition.
******If it weren't for gasoline, prices at the wholesale level would have fallen 0.1% in May. Still, prices are off 5% from this time last year. That's the biggest drop in 50 years. Is this good news?
Not for corporate profits, and so probably not for valuations. And not for the Fed, who's terrified of deflation. But for the crowd expecting runaway inflation because of a weaker dollar and rising interest rates, it might be.
It should be obvious that weak demand and high unemployment will keep a lid on prices in the short-term. Remember too that it took 18 months before rising oil prices really started to find their way into the prices of consumer goods, too. Right now, inflation expectations are just that - expectations.
Still, those expectations have helped oil and commodity prices run higher…
*****And inflation expectations aren't the only thing driving commodity prices higher. Demand from emerging markets, especially China and India, remains fairly strong. After all, these countries have money to spend to help re-inflate their economies.
Jason Cimpl will be discussing the outlook for inflation and commodity prices in a special video conference next Wednesday, June 24 at 6:00 P.M. It's totally free, and Jason will share his top gold stocks with attendees (yes, we see significant upside for certain gold stocks). This video conference is free of charge, you can sign up HERE.
*****The Ural mountain city of Yekaterinburg, Russia takes center stage in global economic news today. The BRIC countries--Brazil, Russia, India and China--are holding their first ever summit starting today. The U.S. is not invited.
That's because these emerging economic giants want more control over the global economy. And with a combined 42% of global currency reserves, they are in position to throw their weight around a little.
It's no secret that the U.S. depends on these countries to buy our Treasuries and fund our bailout and stimulus plans, not to mention our trade deficit. So the news that these countries will be discussing plans to diversify away from American bonds and buy IMF bonds is important for the U.S. dollar. Just last week Brazil pledged $10 billion purchase IMF bonds. That's a far cry from the day's when Brazil was synonymous with hyper-inflation and a poster child for coming to the developed world hat-in-hand.
But there's more to the story, especially with China. Some estimate that China has as much as $1.3 trillion of foreign reserves, most of it in dollars. And right now, China is putting that money to work stockpiling commodities and supporting its economy. So buying Chinese stocks, especially Chinese commodity stocks, is a great idea right now.
At SmallCapInvestor PRO, we just loaded up on Chinese stocks. I believe this is the one reliable growth story in the world today. I've got a Special Report ready with my top investment recommendations; you can get a copy HERE.
Pull Back Hits Energy Hardest in Wednesday's Trading
Small Caps putting up the biggest gains at press time (2:30 P.M. Eastern) include La-Z-Boy (NYSE:LZB) up 36.2% after an upgrade to strong buy from Raymond James, Atlas Pipeline Holdings (NYSE:AHD) up 30.2% after announcing a joint venture with Williams (NYSE:WMB) to expand Atlas's presence in Pennsylvania, Tivo (Nasdaq:TIVO) up 51.1%, Human Genome Sciences (Nasdaq:HGSI) up 16.7%, and Applied Signal Technology (Nasdaq:APSG) up 16%.
Big decliners include energy darling Valero (NYSE:VLO) down 18.3%, CVR Energy (NYSE:CVI) down 17.4%, Frontier Oil (NYSE:FTO) down 14.9% as crude oil inventories spike to 2.9 million barrels based on data from the U.S. Energy Information Administration.
Yesterday's darling stock, Green Plains Renewable Energy (Nasdaq:GPRE) was one of today's dogs lose 16.2% as volume slows from Monday and Tuesday's trading sessions.
As of press time (2:30 P.M. Eastern) all major indices are off with the S&P 500 leading the decline by a 2.0% drop, followed by the Dow sloughing off 1.5% and the Nasdaq down 1.4%. The Russell 2000 Index, comprised of the 2,000 largest small cap stocks was down 8.5 points, or 1.61% to 518.13.
*****Russia is grumbling. Seems they are not happy that rising debt, slow growth and record Treasury bond sales are dragging the U.S. dollar down. In fact, Russian president Medvedev is calling for some kind of global currency to replace the U.S dollar as the world's reserve currency. (Sound familiar? Like he's taking a page from the Chinese?)
In an interview with CNBC on Monday he said, "We need some kind of universal means of payment, which could create the basis of a future international financial system…"
Of course, this is a horrible idea. As one analyst put it, "It took decades for the euro to be established. I can only imagine how long it would take for the BRIC countries to put together a currency."
*****It's an investing truism that the financials always lead the stock market. Recall that it was bullish comments from Citigroup that kicked off this rally back in early march. And I'm sure nobody needs reminding that it was the financials that kicked off the worst bear market in 80 years.
When the S&P 500 and the Nasdaq blew through their 200-day moving averages on Monday, the financials were out in front. But today, even though the major indices finished with slight gains, many financials finished in the red.
American Express (NYSE:AXP) dropped nearly 5%. JP Morgan (NYSE:JPM) lost 4.46%. Wells Fargo (NYSE:WFC) lost 4% and Citigroup (NYSE:C) lost 4.88%.
Bank of America (NYSE:BAC) is about the only major financial stock to finish in the green, and that was a 1.7% gain. In fact, the Financials SPDR (AMEX:XLF) failed to make a new recovery high along with the Nasdaq and S&P 500.
So what gives? Why have the financials underperformed, and why were they weak today?
*****One clue comes from the Healthcare Select SPDR (AMEX:XLV). As you may know, healthcare stocks are considered defensive stocks. That's because their revenues are seen as being stable as healthcare is a necessary, as opposed to discretionary, expense.
In difficult markets, institutional investors will park their money in healthcare stocks as a way to maintain exposure, but lower risk.
If we compare the Healthcare SPDR XLV to the Financial SPDR XLF, we see an interesting divergence starting on May 8. Healthcare has been trending up since that date. And the Financial SPDR has been trending down. To me, this looks like sector rotation.
It appears that institutional investors are moving money out of aggressive financial investments and into defensive healthcare stocks. When the institutional investors start playing defense, individual investors should pay attention.
*****Technical analyst for TradeMaster Daily Stock Alerts, Jason Cimpl, thinks the rally has about another week before we start seeing some downside. And for good measure, he recommended that his readers take their 29% profits on Fushi Copperweld (Nasdaq:FSIN). This trade took less than 3 weeks. Nice job, Jason.
Jason is still holding the two stocks you may have learned about from the TradeMaster video I included in yesterday's Daily Profit. In case you entered either trade, you should know that Jason has recommended a stop loss for FXI at $35.15 and UNG at $12.60. If you missed the video, you can check it out HERE.
Small caps tumble 2.84%; BWEN, HEP and FBSS lead gainers
Small-cap stocks resumed the slide Tuesday, closing down 2.84%, unable to drift higher off soaring bank and financial stocks as worries about an economic slowdown put a damper on the consumer spending outlook and corporate profit projections. Small-cap gainers today included Broadwind Energy (OBB:BWEN), Holly Energy (NYSE:HEP) and Fauquier Bankshares (Nasdaq:FBSS). Other Market Watch highlights today included:
• Large-cap banks and financial institutions were the best performers today, boosted by news that the U.S. government will use $250 billion in taxpayer funds to purchase stock in select big banks.
• Treasury markets fell hard as the safe-haven push dulled amid strong gains in equities.
• At one point late Tuesday afternoon, the Russell was flirting with the third-largest one-day decline of 2008.
• The good news about the government buying big bank stocks was of little immediate solace to retailers, with the S&P Retail Index sinking nearly 4%.
• Crude oil futures turned lower, slipping about 2% back below $80 a barrel on concerns that a recession will demolish demand.
• BMO Capital’s Andy Busch told SmallCapInvestor.com that investors shouldn’t “get too excited by the upmove” today. “The Z factor,” or the unknown impact on companies’ sales or earnings, “will cap this rally as will the terrible . . .
Bank stocks soar, but small caps still swoon
Small-cap stocks resumed the slide Tuesday, unable to draft higher off soaring bank and financial stocks as worries about an economic slowdown put a damper on the consumer spending outlook and corporate profit projections. The Russell 2000 (NYSE:IWM) closed down 16.24, or 2.84%, at 554.65. At one point late in the afternoon, the Russell was flirting with the third-largest one-day decline of 2008, but forged a decent upside pop off the intraday low, leaving the Russell down 27.5% for the year. The Dow is off 29.8% for 2008, while the S&P 500 is down 32.0%.
Large-cap banks and financial institutions were the best performers today, boosted by news that the U.S. government will use $250 billion in taxpayer funds to purchase stock in select big banks. That news catapulted the market higher on the open, but within 30 minutes the opening gains in small caps had been given back as investors started to fret about the longer-term picture for the economy. In addition, hot money traders who caught part of the big bounce off the lows started to book profits, which helped stall upside momentum. Even with the sizable pullback in the overall market, the PHLX KBW Bank Index jumped 12%, while the Financial Select Sector SPDR Fund was up nearly 6%.
“Part of today’s sell-off looked to be the market taking protection against profit numbers. Samsung made cool comments on DRAM demand, which implies slowing PC sales and reduction in demand for technology,” Nick Kalivas, vice president of financial research with MF Global, said in an email interview with SmallCapInvestor.com.
Kalivas said that the higher open today was a “kiss of death” that invited selling because the banking bailout might help in the big picture, but does not change immediate economic conditions. And while the international viewpoint is . . .
LSI Industries, United Community Bancorp and Chindex International lead small-cap percentage losers
LSI Industries Inc. (Nasdaq:LYTS), United Community Bancorp (Nasdaq:UCBA) and Chindex International Inc. (Nasdaq:CHDX) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $1 billion.
Also included among the results: Eagle Bancorp Inc. (Nasdaq:EGBN), Omega Flex Inc. (Nasdaq:OFLX), BancTrust Financial Group Inc. (Nasdaq:BTFG), ECB Bancorp Inc. (Nasdaq:ECBE), Sucampo Pharmaceuticals Inc. (Nasdaq:SCMP) and La-Z-Boy Inc. (Nasdaq:LZB).
Here are the biggest percentage losers among small caps:
Financial, retail share woes spark small-cap slide
Small-cap stocks took it in the chin Wednesday, with retail stocks and financial shares falling out of favor with investors amid a gloomy economic environment and the ongoing credit crisis. The Russell 2000 (NYSE:IWM) lost 5.86, or 0.80%, to 730.71.
The S&P Retail Index crumbled nearly 2% to the second-lowest close since late March. Big-name department stores like Dillards (NYSE:DDS), JC Penney (NYSE:JCP), Nordstrom (NYSE:JWN), Kohls (NYSE:KSS), Macy’s (NYSE:M) and Sears (Nasdaq:SRLD) were all deep in the red
In the financial arena, the biggest percentage loser of the day was MF Global (NYSE:MF), the giant futures and commodities brokerage firm that was split off from Man Group last year. MF shares collapsed nearly 40%, shrinking its market cap down to about $945 million in the process. MF projected a significant decline in revenue and said it would raise $300 million to repay debt via $150 million in preference shares and another $150 million in convertible senior notes.
Although the steep freefall in MF shares was an attention grabber, the bears were active throughout the financial sector. In fact, late in the day seven of the top 10 percentage declines on the Nasdaq were either banks or financial firms. Tuesday’s slide in regional banks remained in play today, with Fifth Third Bancorp (Nasdaq:FITB) sinking nearly 20% after the firm said it would raise at least $2 billion in capital and slash dividends to help overcome credit losses.
The Dow slipped to the lowest daily close since mid-March, when the market was grappling with the collapse of Bear Stearns. For the recent move, the Dow peaked earlier than the Russell 2000, hitting a high on May 19 at 13,136. From the May 19 high to today’s low, the Dow is off 8.7%, while the Russell is only down 2.9% over that same time frame (although the Russell is off 4.8% from the early . . .
Sector Watch: Payment processing stocks
Like most things that go the way of the Internet, so, too, goes commerce. Forrester Research estimates that U.S. e-commerce revenues were at $259.1 billion last year, and are growing at nearly 60% annually. This bodes well for CyberSource Corporation (Nasdaq:CYBS) and CAM Commerce Solutions, Inc. (Nasdaq:CADA), two companies benefiting from the move to online commerce from in-person banking.
CyberSource provides electronic payment and risk-management tools for businesses processing orders over the Internet. Approximately 228,000 customers use CyberSource tools, including half the companies in the Dow Industrial Average.
The company offers CyberSource Advanced service for merchants who want to accept online payments via credit cards, corporate procurement cards, electronic checks and the Bill Me Later service. CyberSource Essentials allows merchants to process credit card payments via websites and also processes telephone, fax and mail order payments using a Web-based virtual terminal. The company’s enterprise software processing platform, CyberSource Payment Manager, can authorize and settle payments originating from multiple sales channels. The company’s tools for risk management include Managed Risk Service, which offers professional analysis, risk modeling and monitoring, and Advanced Fraud Screen, a risk-scoring tool for assessing fraud risk, authenticating payers, verifying delivery addresses, making tax payments and ensuring export regulatory compliance.
CyberSource has strategic alliances with most of the leading online payment processors including AmeriNet, Checkfree, FDC/Telecheck, 14 Commerce, PayPal and Visa USA.
With online fraud running rampant, demand for fraud-screening services is rising. Visa and MasterCard are now even requiring merchants to comply with a comprehensive list of payment card security standards to limit the threat of identity theft. Faced with these . . .
La-Z-Boy down after dropping Todd Oldham
La-Z-Boy Inc. (NYSE: LZB) shares are down after the furniture maker and retailer announced before the start of trading that it is ending its four-year partnership with fashion designer Todd Oldham. Current orders for Todd Oldham will be honored, the company said in a press release.
“The Todd Oldham by La-Z-Boy collection successfully drove awareness of the diverse La-Z-Boy product offering and enhanced our brand among younger, style-conscious customers,” Doug Collier, La-Z-Boy’s chief marketing officer, said in a statement.
The news came on the heels of a Friday announcement that Oldham was named the creative director for apparel retailer Gap, Inc.’s (NYSE: GPS) struggling Old Navy chain.
In morning trading, LZB shares are down $0.66, or 7.55%, at $8.08. Over the last 52 weeks, shares have ranged from $7.65 to $15.60.
La-Z-Boy to sell subsidiary
La-Z-Boy Inc. (NYSE: LZB), a furniture maker and retailer, announced before the opening bell that it reached an agreement to sell its subsidiary Clayton Marcus to Rowe Fine Furniture, Inc. The terms of the agreement were not disclosed.
Hickory, N.C.-based Clayton Marcus is a manufacturer of medium-priced casual furniture. Its products are distributed through independently owned retailers.
"While Clayton Marcus enjoys an excellent reputation in the market, the company does not fit with La-Z-Boy's overall long-term strategy,” La-Z-Boy’s CEO Kurt Darrow said in a statement. “We are confident that Rowe will be a synergistic owner for Clayton Marcus and that its customers will continue to be well serviced."
La-Z-Boy shares are flat in pre-market trading at $9.68.
