BAGAKOAA Jan 18, 2010 The week ahead.
BAGAKOAA
Jan 18, 2010 The week ahead.
It was a great three day weekend and because I was attempting to have a life, (Football, golf, writing, movies, and a nice dinner with the wife.) I have not combed through Barons as of yet. Let’s take a look.
Tomorrow is a big reporting day. Citigroup C is reporting another loss tomorrow. They paid back their TARP funding and got an extremely favorable tax ruling from the IRS, but I don’t own the stock and do not know what the fundamentals are. The street estimate is -.32 cents as share and the Whisper Number – the one beat is -.27. My guess is -.25 but it still is considered valued at 5.50 a share, but I don’t get it.
CSX and Burlington report this week. I do not own them but like to hear how they do as it is a good tell on the economics here in the states. CSX is expected to come in at 76 cents a share but the big number to beat will be 78 cents a share. Burlington reports on Thursday and should come in about 1.22 a share. I can not find a whisper number on Burlington.
IBM reports tomorrow and I expect it to blow away estimates and the whisper number. ($3.47 and $3.76 respectively.) Again even if you don’t have skin in the game on this stock (and you should), listen to the call to get a feel about capital spending on office equipment, and enterprise software. I will go out on a limb here and peg their results at 4.14 a share. That would be huge, but it would not be as big a bounce in earnings that INTC had. That could drive the equity up to 138 very quickly. IBM is about 2.5 % of the Portfolio and is up 30.1%. There is an equal amount of March calls that are in the money.
Ebay reports on Wednesday but will have a difficult time keeping to the estimate of 40 cents a share.
GE and MCD report on Friday. I do not own either but I know a few of you do. GE is expected to bring in 26 cents a share and they really need to blow out 28 cents a share to make a statement. GE is hoping to spin-off the media division (NBC Universal) to Comcast, but that will not be reflected in this earnings call. The Leno debacle may ruin the sale anyway. It is impossible to think of a sector that they don’t compete in and in looking at the break up value of the company I can see and understand some of the valuations above the 25 dollar mark. I still don’t like the debt situation in GE Cap and they have more footnotes in their 10Ks than I have time to read. MCD has been leaking some good news about sales and with commodity prices just now starting rise we could assume their margins are in good shape. The will probably make and break their estimate of 1.02 a share. The whisper number is 1.04, and as usual they need to bow away those numbers to get a good kick to the stock. As I have mentioned in the past, this is a channeling stock, with the range between 52-62. It looks like that has shifted up to 54 to 64. If we break the 1/04 a share it should move toward the 64 price and then adjust down wards again. It is a nice stock to own and one of those that MIGHT qualify for the covered call sell strategy.
There is not a lot going on with economic news this week. The bank of Canada will not move its rates tomorrow. The State Street Confidence survey is out tomorrow. This is a technical survey not an attitudinal survey. It measures what institutional portfolios are doing with their money. There is not consensus figure related to this survey. It is what it is. My guess we will see more monies going into the equity market, a bullish trend.
Housing Starts and Producer Price Index reports on Wednesday. Look for a flat or slight increase in housing starts to the 579 thousand range. Builders are trying to manage their inventories ands are reluctant to build for the sake of building. The consensus for the PPI is flat. We might see a little increase in the energy sector but maybe not. And on Friday the Conference Boards Leading Economic indicator report comes out. Look for a little positive bump.
I’ll report back as the week goes on ad let you know how my guesses went.
In closing, you know I mentioned my attempt at making money in solar and got stung. Then I bought solar for the house and got stung. Solar is not going away but there are way too many horses to be on. Well if you are at the race track and you want to make a lot of money, get in the hay business. I initiated a position on a company that was explored on Friday on Bloomberg the company is Amtech Systems Inc. They make diffusion furnaces for many of the photovoltaic manufacturers. All of the companies need to fire their solar cells and many use Amtech Products. I will be running the numbers and let you know. ASYS like many other in the se4ctor are running at a loss, but have no debt. Do your homework, but this one looks like a good play in solar.
Salve Lucrum
Jan 18, 2010 The week ahead.
It was a great three day weekend and because I was attempting to have a life, (Football, golf, writing, movies, and a nice dinner with the wife.) I have not combed through Barons as of yet. Let’s take a look.
Tomorrow is a big reporting day. Citigroup C is reporting another loss tomorrow. They paid back their TARP funding and got an extremely favorable tax ruling from the IRS, but I don’t own the stock and do not know what the fundamentals are. The street estimate is -.32 cents as share and the Whisper Number – the one beat is -.27. My guess is -.25 but it still is considered valued at 5.50 a share, but I don’t get it.
CSX and Burlington report this week. I do not own them but like to hear how they do as it is a good tell on the economics here in the states. CSX is expected to come in at 76 cents a share but the big number to beat will be 78 cents a share. Burlington reports on Thursday and should come in about 1.22 a share. I can not find a whisper number on Burlington.
IBM reports tomorrow and I expect it to blow away estimates and the whisper number. ($3.47 and $3.76 respectively.) Again even if you don’t have skin in the game on this stock (and you should), listen to the call to get a feel about capital spending on office equipment, and enterprise software. I will go out on a limb here and peg their results at 4.14 a share. That would be huge, but it would not be as big a bounce in earnings that INTC had. That could drive the equity up to 138 very quickly. IBM is about 2.5 % of the Portfolio and is up 30.1%. There is an equal amount of March calls that are in the money.
Ebay reports on Wednesday but will have a difficult time keeping to the estimate of 40 cents a share.
GE and MCD report on Friday. I do not own either but I know a few of you do. GE is expected to bring in 26 cents a share and they really need to blow out 28 cents a share to make a statement. GE is hoping to spin-off the media division (NBC Universal) to Comcast, but that will not be reflected in this earnings call. The Leno debacle may ruin the sale anyway. It is impossible to think of a sector that they don’t compete in and in looking at the break up value of the company I can see and understand some of the valuations above the 25 dollar mark. I still don’t like the debt situation in GE Cap and they have more footnotes in their 10Ks than I have time to read. MCD has been leaking some good news about sales and with commodity prices just now starting rise we could assume their margins are in good shape. The will probably make and break their estimate of 1.02 a share. The whisper number is 1.04, and as usual they need to bow away those numbers to get a good kick to the stock. As I have mentioned in the past, this is a channeling stock, with the range between 52-62. It looks like that has shifted up to 54 to 64. If we break the 1/04 a share it should move toward the 64 price and then adjust down wards again. It is a nice stock to own and one of those that MIGHT qualify for the covered call sell strategy.
There is not a lot going on with economic news this week. The bank of Canada will not move its rates tomorrow. The State Street Confidence survey is out tomorrow. This is a technical survey not an attitudinal survey. It measures what institutional portfolios are doing with their money. There is not consensus figure related to this survey. It is what it is. My guess we will see more monies going into the equity market, a bullish trend.
Housing Starts and Producer Price Index reports on Wednesday. Look for a flat or slight increase in housing starts to the 579 thousand range. Builders are trying to manage their inventories ands are reluctant to build for the sake of building. The consensus for the PPI is flat. We might see a little increase in the energy sector but maybe not. And on Friday the Conference Boards Leading Economic indicator report comes out. Look for a little positive bump.
I’ll report back as the week goes on ad let you know how my guesses went.
In closing, you know I mentioned my attempt at making money in solar and got stung. Then I bought solar for the house and got stung. Solar is not going away but there are way too many horses to be on. Well if you are at the race track and you want to make a lot of money, get in the hay business. I initiated a position on a company that was explored on Friday on Bloomberg the company is Amtech Systems Inc. They make diffusion furnaces for many of the photovoltaic manufacturers. All of the companies need to fire their solar cells and many use Amtech Products. I will be running the numbers and let you know. ASYS like many other in the se4ctor are running at a loss, but have no debt. Do your homework, but this one looks like a good play in solar.
Salve Lucrum
posted by J.J. Phineaus at 9:20 PM
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