CenterState Banks, Sequenom and THQ lead small-cap volume in pre-market
Also included among the results: Micromet Inc. (Nasdaq:MITI), Cathay General Bancorp (Nasdaq:CATY), KapStone Paper and Packaging Corp. (Nasdaq:KPPC), Eagle Bulk Shipping Inc. (Nasdaq:EGLE), Harbin Electric Inc. (Nasdaq:HRBN) and Energy Conversion Devices Inc. (Nasdaq:ENER).
AXL Bucks Downward Market Movement and Gains 50% on Wednesday
Stocks closed down today in all of the major U.S. indices. The Dow closed down 25.92 points to end at 9,070.80; the Nasdaq ended at 1,967.76, down 7.75 points; and the S&P 500 moved downward 4.48 points to close at 975.44.
The Russell 2000 ended the day at 549.54, down 2.56 points.
Small-cap gainers were lead by American Axle & Manufacturing (NYSE:AXL) up 50% to close at $2.02. Other small-cap share price gainers Elron Electronic Industries (Nasdaq:ELRN) up 45%; McClatchy Company (NYSE:MNI) up 44%; and Conseco (NYSE:CNO) up 36%.
Small-cap decliners were lead by Frontier Financial Corp. (Nasdaq:FTBK) down 21% on announcing Q2 losses of $1.06 per share versus gains of $0.04 a year ago. Joining FTBK in leading decliners today were THQ (Nasdaq:THQI) down 19%; Alvarion (Nasdaq:ALVR) down 17%; and Ariad Pharmaceuticals (Nasdaq:ARIA) down 16%.
*****With the exception of the Nasdaq, the major indices finished yesterday with slight losses. And it looks like an even money bet whether they'll finish in the red today. We've seen an unlikely move over the last two weeks. The S&P 500 has made gains in 9 of the last 11 sessions and moved 11.3% higher. Volume hasn't been especially strong during this move, but it is summer. Volume is always a bit lighter in the summer.
It seems more and more strategist-types are looking for a pullback or correction for stocks. Yesterday, CNBC's Jim Cramer said he was expecting some red. Of course, Cramer makes so many calls it's hard to keep them all straight.
For the record, Cramer says he likes healthcare stocks, technology and financials, believe it or not. He says financials are so universally hated that they will be stronger than average in the event of a pullback. That's the "no one left to sell" theory.
I'm not so sure. The banks have been given time to earn their way back to health. And it could work. But a lot depends on the housing market. Many banks still carry toxic assets. And their reluctance to sell into Geithner's PPIP suggests they remain hopeful these assets will regain value. If they don't, it could be problematic. And then there's the commercial real estate situation we've been discussing.
******Did you know I'm about to publish my first book? The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks will hit the shelves on September 14.
In The Small Cap Investor, I share the proven techniques for uncovering the small cap companies poise for a huge run higher. My biggest success was apparel company True Religion (Nasdaq:TRLG). I recommended that stock to my readers at $1.13 a share. We sold it in 2008 for 2,216% gains. My techniques have also led my SmallCapInvestor PRO advisory service to a 93% win rate this year.
Now, I need your help. As part of the marketing plan for my book, we are holding a T-shirt contest. I want you to be the one who comes with the slogan for The Small Cap Investor: Secrets to Winning Big with Small Cap Stocks T-shirt.
Obviously, "Secrets to Winning Big with Small Cap Stocks" is taken. But slogan's like "I made a 142% on Gulfport Energy and all I got was this lousy T-shirt" or "Ian Wyatt: The Best Small Investor" are open.
We'll be holding the voting on the Small Cap Investor page on Facebook starting today and running through August 9th. You can leave your submissions there, or send them to tshirt@smallcapinvestor.com.
The winner will get their very own shirt plus a full-year subscription to SmallCapInvestor PRO. This should be a lot of fun. I hope you'll participate.
******China is in the news again. Overnight, the Shanghai Composite fell 5%, the biggest drop in eight months. Investors are nervous on reports that the Chinese government may be discussing clamping down on lending due to the potential for imbalances to occur.
Specifically, Bloomberg is reporting that the Chinese government is concerned that asset bubbles may be forming in the stock market and that inflation may be building.
Chinese stocks are reportedly trading at 35 times reported earnings. And that is expensive. But interestingly, the Chinese stocks in the SmallCapInvestor PRO portfolio are trading with Price-to-Earnings ratios between 8 and 11. That's much cheaper than most Chinese stocks, apparently, and one of the reasons we recommended them.
Of course, valuations won't keep our stocks from declining if the Chinese stock market takes a hit. But Chinese stocks are recovering today after last night's sell-off, so that's a good sign.
If you're interested in finding out more about the Chinese stocks in the SmallCapInvestor PRO portfolio click here to get a copy of the report.
*****Finally, Top Stock Insights reader took 35% gains yesterday on Chinese medical device maker called Mindray (NYSE:MR). I love the science fiction name, but couldn't resist taking the gains.
Best Regards,
Ian Wyatt
Editor
SCI Daily
THQ, BTU International and Washington Banking lead small-cap percentage losers
Also included among the results: Georgia Gulf Corp. (Nasdaq:GGC), Perry Ellis International Inc. (Nasdaq:PERY), A M Castle & Co. (Nasdaq:CAS), Timberland Co. (Nasdaq:TBL), Spartan Stores Inc. (Nasdaq:SPTN) and Epicor Software Corp. (Nasdaq:EPIC).
ViroPharma, P.F. Chang's China Bistro and Sequenom lead small-cap volume in pre-market
Also included among the results: Exelixis Inc. (Nasdaq:EXEL), Jazz Pharmaceuticals Inc. (Nasdaq:JAZZ), CardioNet Inc. (Nasdaq:BEAT), JAKKS Pacific Inc. (Nasdaq:JAKK), Energy Conversion Devices Inc. (Nasdaq:ENER) and THQ Inc. (Nasdaq:THQI).
Small-cap stocks open low; VTIV, GLBC, and COBK lead gainers
Other Market Watch highlights today included:
• The latest batch of monthly same-store sales reports are coming out could influence the retail sector in general throughout the day.
• The sobering weekly claims report that was released today shows that Americans aren’t just losing jobs, they are struggling to find new ones too.
• At 9:51 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.74, or 3.83%, at 510.81.
• The Bank of England stunned the market with a very aggressive rate cut of 150 basis points, pushing benchmark rates there to the lowest point in 53 years.
• The most numbing stat from this morning’s data was that the number of continuing claims rose 122,000 last week to 3.84 million, the highest level in more than 25 years.
Small Cap Gainers:
• inVentiv Health Q3 profit declines; reaffirms FY08 revenue guidance. Shares are soaring 43%. See (Nasdaq:VTIV).
• Shares of Global Crossing up over 18% as the company maintains outlook, sees Q3 sales rise 12%. See (Nasdaq:GLBC).
• Colonial Bankshares up 18% on higher-than-average volume. See (Nasdaq:COBK).
• H&E Equipment Services Inc. jumped 14% on solid earnings news. See (Nasdaq:HEES).
• Small-cap retailer Hot Topic reported same-stores sales rose 8.3% and raised guidance. Shares were up 8.6% this morning. See (Nasdaq:HOTT).
Small Cap Losers:
• Lakes Entertainment Inc. slumped 29%, plunging a day after earnings and also as a casino referendum in Ohio was defeated. See (Nasdaq:LACO).
• Entertainment software company THQ posts big 2Q loss, plans 250 layoffs. Shares down 25% in pre-market. See (Nasdaq:THQI).
• Shares of Citi Trends down 9% in pre-market after the company announces Q3 sales. See (Nasdaq:CTRN).
• Abercrombie & Fitch's Oct. comparable store sales decline 20%; shares trade over 7% lower in pre-market. See (NYSE:ANF).
Small caps down modestly as European rate cuts offset data gloom
Small-cap stocks opened lower, but quickly trimmed losses as enthusiasm fueled by another round of global rate cuts helped soothe the sting of yet another sobering batch of economic reports. At 9:51 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.74, or 3.83%, at 510.81.
The weekly claims report came in at 481,000, which was below the forecast of 475,000 and which included an upward revision for last week’s figure as well. The most sobering figure on the claims report was the continuing claims number, which was pegged at 3.84 million, the highest level in more than 25 years. Americans aren’t just losing jobs, they are struggling to find new ones too.
The weekly claims data often gets extra emphasis right in front of a monthly employment report, and neither the weekly claims figure or the ADP survey Wednesday have raised hopes for a bullish surprise on the monthly jobs report Friday morning. Just this morning, analysts at Goldman Sachs raised their projection for the decline in non-farm payrolls to 300,000 from 250,000 (the market consensus is minus 180,000). Goldman also was looking for the unemployment rate to climb to 6.4%, a jump of 0.3% from last month.
The market did gather some support from aggressive rate cuts overnight in Europe, with the Bank of England slashing rates by a whopping 150 basis points, which put their benchmark rates at the lowest point in some 53 years. In addition, the European Central Bank lowered rates by 50 basis points, and even the Swiss National Bank lowered rates. ECB President Jean-Claude Trichet said that the central bank will do what is needed to restore financial stability
Tech stocks paced early declines this morning, powered by a somber outlook . . .
DryShips, JA Solar Holdings and Zhongpin lead small-cap volume in pre-market
Also included among the results: CV Therapeutics Inc. (Nasdaq:CVTX), Solarfun Power Holdings Co Ltd. (Nasdaq:SOLF), i2 Technologies Inc. (Nasdaq:ITWO), THQ Inc. (Nasdaq:THQI), Clean Energy Fuels Corp. (Nasdaq:CLNE) and GT Solar International Inc. (Nasdaq:SOLR).
Here are the most actively traded companies among small caps:
NN , TNS and Sauer Danfoss among 52-week lows
Also included among the results: THQ Inc. (Nasdaq:THQI), Ohio Valley Banc Corp. (Nasdaq:OVBC), Kenexa Corp. (Nasdaq:KNXA), Eagle Bancorp Inc. (Nasdaq:EGBN), Orient Express Hotels Ltd. (Nasdaq:OEH) and Bridge Capital Holdings (Nasdaq:BBNK).
Here are the new 52-week lows among small caps:
Jakks Pacific: Not all fun and games
Getting toys to market isn’t child’s play, but Jakks Pacific Inc. (Nasdaq:JAKK) is one company that is winning this game.
Shares of the Malibu, Calif.-based company are closing in on the 52-week high of $31.42 seen last July, following a blowout holiday quarter. For investors, the question is whether they should add Jakks Pacific to their toy chest.
The toy industry has had its share of issues to deal with in the past year: a foundering economy, waning interest in non-tech wares, and safety concerns mostly over foreign-made items. Like most toymakers, most of Jakks Pacific’s goods are produced in Asia.
The gaggle of Wall Street analysts who follow Jakks Pacific have issued generally favorable opinions, with four of the nine polled by Thomson Financial having a “buy” or “strong buy” rating. The other five have it at “hold.” The median price target for Jakks is $31.50, and the current quarter is expected to yield $0.19 earnings per share, up 59% from a year earlier. Shares closed Friday at $28.14.
The top toy players are Mattel Inc. (NYSE:MAT), with $6 billion in 2007 revenue, and Hasbro Inc. (NYSE:HAS), at $3.8 billion in revenue. Jakks Pacific ranks third, with 2007 revenue of $857.1 million, a 12% increase from the year before. The company relies on three big customers: Wal-Mart Stores Inc. (NYSE:WMT), Target Corp. (NYSE: TGT) and privately held Toys “R” Us, accounting for a respective 19.3%, 14.5% and 14.1% of 2007 net sales.
Jakks be nimble, and Jakks be quick in locking up licensing deals with the hottest prospects to produce a related game, doll or toy.
Hannah Montana? Sure. NASCAR? Certainly. Toss in World Wrestling Entertainment Inc. (NYSE:WWE), SpongeBob SquarePants, old stars like Rocky, Barney and Pokemon, and the company seems to have a winning line-up. Jakks Pacific has also parlayed such names as Dirt Devil, Pizza Hut and McDonald’s into pretend-play products, while up-and-coming country star Taylor Swift, a Grammy nominee . . .
