Tag - NYSE:DPZ

The recession took away America's appetite for eating out. Yet it seems like the one affordable luxury for many families watching their pennies is pizza. A favorite for both young and old, pizza parlors have tried to keep their prices under control so that a family of four can enjoy a meal for around 20 bucks.

Many restaurants suffered greatly during the economic downturn. But for the most part the bigger pizza chains pulled through - often by way of discounting through coupons and plenty of in-your-face advertising..

One of the larger U.S. chains, Pizza Hut, is owned by international conglomerate Yum! Brands (NYSE: YUM). But two of the bigger and best-known pizza purveyors are actually small-cap stocks: Domino's Pizza (NYSE: DPZ) and Papa John's International (Nasdaq: PZZA).

The markets were up today sloughing off yesterday's losses. The down closed up 57 points to 8,504. The Nasdaq gained 11 points to close at 1,845 and the S&P 500 gained 4 points to close at 923 after hitting resistance at 932 in morning trading and slowly sliding back down.

The Russell 2000, moved up just under 2% for the day to close at 517. The Russell 2000 represents the 2,027 small cap companies and contains well known companies like 1-800 Flowers.com (Nasdaq:FLWS), BankRate.com (Nasdaq:RATE), and Dominos Pizza (NYSE:DPZ). The Russell 2000 Index is up 50.7% since the market's nadir on March 9, 2009.

Small-cap gainers were lead by Oshkosh Corporation (NYSE:OSK), up 27% after the Pentagon announced that the firm's new blast resistant, off-road ground force vehicles were the "clear winners" in a multi-billion dollar competition. Oshkosh won the bid to build 2,244 vehicles for a deal worth $1.06 billion. The company beat out defense industry heavyweights including BAE Systems (LSE:BA.L) and General Dynamics (NYSE:GD).

A very exciting small-cap gainer today was LogMeIn (Nasdaq:LOGM), up 25% on it's IPO. LogMeIn is an on-demand connectivity specialty service firm whose product allows computer users to access files and services on one of their computers from another computer across the Internet.

For example, workers can access files resident on their office computers from home without having to attach to a corporate network or have their files stored on network servers. LogMeIn's services are primarily directed to small and medium-sized businesses.

Other gainers included Ivanhoe Mines (NYSE:IVN), up 23%; Northeast Bancorp (Nasdaq:NBN), up 23%; and ShengdaTech (Nasdaq:SDTH), up 19% after being upgraded by Roth Capital to a Buy rating from a Hold.

Small-cap decliners were lead by CardioNet (Nasdaq:BEAT), down 41% on news that the company slashed its profit and revenue outlook for 2009. The Pennsylvania-based maker of wireless heart-monitoring devices revised its profits to a range of 30 cents to 35 cents from earlier forecasts of 69 cents to 73 cents. Investors punished the company by unloading shares started right the open and continuing through the day. Shares tumbled to $9.57 from Tuesday's close of $16.32.

Rounding out the small-cap decliners were Repros Therapeutics (Nasdaq:RPRX), down 31% after being downgraded by Wedbush Morgan and Ladenburg Thalmann; Spartan Motors (Nasdaq:SPAR), down 27%, and Immersion Corporation (Nasdaq:IMMR), down 23%.

*****Earnings season is right around the corner. It seems that expectations are pretty low. I've read a few commentaries that suggest that estimates are low enough that companies should be able to meet them. Of course, what corporate America has to say about the future will be important.

Of course, I'll be watching the banks closely.

*****A lot has gone right for the banks lately. Changes to accounting rules have allowed them enough breathing room to operate. Mortgage loan modifications have brought in fees. And trading activities have even helped some banks to boost profits.

Still, I believe there's another banking shoe to drop.

As I reported yesterday, foreclosure sales are the majority of home sales these days. And when a bank sells a foreclosed home, it is a realized loss. That's as opposed to a non-performing loan or a foreclosed home that has yet to be sold, which can be counted as an asset.

Further exacerbating this is that banks are not realizing as much profit on those sales of foreclosed homes as they're all flooding the market with them and thus driving down prices.

So I expect to see higher losses affecting banks' earnings in the future. These losses may not show up in the earnings season that's about to begin, but they are looming.

*****It was reported today that mortgage applications fell 19% last week, another sign that foreclosures are driving the market. It also reinforces the point that once foreclosure sales slow, there may well be little demand for traditional home sales to pick up the slack.

Rising interest rates and still-falling home values are also impacting new mortgage applications. It's a buyers market, and there's no reason to rush in when prices are falling and loan costs are rising.

*****Bloomberg is reporting that 20 million of the 93 million homes, condos and co-ops in the U.S. are underwater as of March 31, 2009. Somebody will take these losses at some point, whether it's the homeowner, the bank or the government/taxpayer or a combination of any or all of the three.

******We know that sub-prime mortgages were a major source of non-performing loans and foreclosures. Now, prime mortgages are in trouble. In his morning missive to his traders, TradeMaster Daily Stock Alerts' Jason Cimpl had this to say:

Delinquencies on prime mortgages soared in the first quarter of this year. Delinquency rates on prime mortgages, the least risky category, were 661,914, a jump from 250,986 a year earlier. Two thirds of all mortgages in the U.S. are prime mortgages, so any percentage increase in delinquencies represents a huge absolute number of delinquent mortgages. Here is more proof that banks are in for a tough few years as they must monitor their loan portfolios even closer and suffer write-offs. If prime mortgages start going south in a big way, look for banks to stiffen lending standards even more. Either way, this will have a negative impact on their bottom line numbers

The evidence is building that the economy is nowhere near out of the woods. And we can also see that banks will be facing serious problems ahead. As I said yesterday, investors should be on their toes.

Also, we're not recommending downside positions on banks - yet. But that time will come, and there will be a lot of money to be made.

*****I'm giving my staff the day off on Friday. There will be no Daily Profit that day. And I've cajoled Jason into giving us his video chart analysis tomorrow, so we have that to look forward to tomorrow…

If you can't wait, check out Jason's video from last week and get a special opportunity to try his TradeMaster service. Click here.

 

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 . . .

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 . . .

Shiloh Industries Inc. (Nasdaq:SHLO), Domino's Pizza Inc. (Nasdaq:DPZ) and Unitil Corp. (Nasdaq:UTL) are among the new 52-week lows in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: California First National Bancorp (Nasdaq:CFNB), Teche Holdings Company (Nasdaq:TSH), Reading International Inc. (Nasdaq:RDI), Data Domain Inc. (Nasdaq:DDUP), TM Entertainment and Media Inc. (Nasdaq:TMI) and GHL Acquisition Units (Nasdaq:GHQ.U).

Here are the new 52-week lows among small caps:

After initially spiking out of the gate on the government’s plan to unfreeze credit markets by directly injecting capital in banks and guaranteeing loans between banks, the Russell 2000 has steadily descended into the red midday, as traders locked in profits from Monday’s goliath rally. Small-cap gainers today included National City Corp. (NYSE:NCC), Aegon China Insurance (NYSE:AEG) and ChinaTransInfo Technology (Nasdaq:DGLY). Other Market Watch highlights today included:

• Treasury markets were falling hard as the safe-haven push dulled amid strong gains in equities.
• The weakest sectors in today's trading are iron & steel and real estate operations/services. Insurance is one of the day's strongest.
• California-based communications equipment maker JDS Uniphase is the day's most active small cap. Shares are down 12.4% to $6.36.
• The dollar is mixed against the euro and the yen midday and gold is off $2 per troy ounce to $839.
• 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 . . .

After initially spiking out of the gate on the government’s plan to unfreeze credit markets by directly injecting capital in banks and guaranteeing loans between banks, the Russell 2000 has steadily descended into the red midday, as traders locked in profits from Monday’s goliath rally.

At 12:21 p.m. ET, the Russell 2000 (NYSE:IWM) was down 7.05, or 1.23%, at 563.66. The Russell continues to lag the Dow; however, the tech laden Nasdaq remains down double fold.

Building on Monday’s colossal gains, small caps opened higher following news that the U.S. will take Europe’s lead and directly inject capital into troubled banks, while also temporarily guaranteeing newly issued debt by banks. The government said it will also provide insurance for all non-interest-bearing accounts.

Also under the Treasury’s voluntary Capital Purchase Program, the government will purchase $250 billion in preferred shares of banks who elect to participate in the Treasury’s program by November 14. Thus far, nine major banks have said they will participate in the program. Commenting on the direct investment in financial entities, President Bush Tuesday said, the administration’s steps were “not intended to take over the free market but to preserve it.”

Financial firms remain in the green midday, with Morgan Stanley (NYSE:MS) up 20%, Citigroup Inc. (NYSE:C) up 17%, Bank of America Corp. (NYSE:BAC) up 14% and Goldman Sachs (NYSE:GS) up 13% leading the way.

“I would caution that the world is not going back to where it was before September,” Andy Busch, global foreign exchange strategist for BMO Capital Markets, said in an email. “The freeze has meant that the outlook for the economy has soured and we're still not sure by how much. Call it the Z factor. This means that no one can be sure the impact on companies’ sales or earnings. The market was assessing a very negative outcome by selling equities down as far as they did prior to the US/global actions.  Now, we have had a massive rally as the market anticipates brighter times ahead. Don't get too excited by the upmove. The Z factor will cap this rally as will the terrible economic numbers that will come out over the next 6 weeks.”  ...

Energy Solutions Inc. (Nasdaq:ES), Domino's Pizza Inc. (Nasdaq:DPZ) and NewStar Financial Inc. (Nasdaq:NEWS) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Winmark Corp. (Nasdaq:WINA), HSN Inc. (Nasdaq:HSNI), Innospec Inc.(Nasdaq:IOSP), Lear Corp. (Nasdaq:LEA), YRC Worldwide Inc. (Nasdaq:YRCW) and 3D Systems Corp. (Nasdaq:TDSC).

Here are the biggest percentage losers among small caps:

Bluegreen Corp (Nasdaq:BXG), UAL Corp (Nasdaq:UAUA) and Preferred Bank (Nasdaq:PFBC) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Sierra Bancorp (Nasdaq:BSRR), ATA Inc (Nasdaq:ATAI), Omnicell Inc (Nasdaq:OMCL), Domino's Pizza Inc (Nasdaq:DPZ), Babcock & Brown Air Ltd (Nasdaq:FLY) and Community Bancorp (Nevada) (Nasdaq:CBON).

Here are the biggest percentage gainers among small caps:

After a rocky morning for small caps, stocks edged higher, lifted by plunging crude prices and gains in consumer and retail companies. At 12:46 p.m. ET, the Russell 2000 (NYSE:IWM) was up 8.85, or 1.27%, at 706.48.

The price of crude oil sank $5 per barrel to $126 at mid-session to a six-week low. Weather forecasts predicted Tropical Storm Dolly will likely miss oil fields and refineries along the Gulf Coast. Previous reports warned the storm would come close to the area, possibly disrupting oil production.

Airline companies jumped on the news with Continental Airlines Inc. (NYSE:CAL) and JetBlue Airways Corporation (Nasdaq:JBLU) soaring more than 20% as the fuel costs showed the first signs of decreasing.

Financial stocks took a hit today after the Congressional Budget Office said it could cost the government as much as $25 billion to help troubled Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). Congress will vote this week on whether Fannie and Freddie will receive government assistance. U.S. Treasury Secretary Henry Paulson said today that action must be taken to boost consumer confidence while strengthening the housing market.

Mortgage losses brought down Wachovia Corporation (NYSE:WB), which posted an unexpected second-quarter loss today of $8.9 billion and announced plans to eliminate 6,350 workers. Investors took solace in the fact that $6.1 billion of that was from a goodwill impairment charge.

Among broad market sectors on the rise are airline transportation; recreational activities; accident and health insurance; and home improvement retailers. Heading downward are coal; oil and gas operations; computer hardware; and computer storage devices.

Small caps leading the pack include Bluegreen Corporation (NYSE:BXG), which is up 90% today’s trading after announcing ahead of the opening its plans . . .

Domino's Pizza, Inc. (NYSE:DPZ) hit an all-time low Friday at $10.58 per share with volume soaring to more than 800,000 shares. The Ann Arbor-Mich.-based pizza delivery company said there were inaccurate reports circulating that said Domino’s had been downgraded by investment bank J.P. Morgan. Domino’s was working Friday to have corrections issued, the company said. At midday Friday, the stock was at $11.62, down $0.17 or 1.4% from Thursday’s close.

Small-cap stocks opened lower, slightly trimmed losses after the Consumer Confidence report came out at 10:00 a.m. ET, but then retreated right back to pre-release levels. The report showed an upward revision to the March report, which provided a brief bid to the market, but it was not enough to catch hold (at least immediately). At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 1.84, or 0.25%, at 723.53.

The Consumer Confidence report was pegged at 62.3 in April, which was in line with the forecast of 62, but the March number was revised upward to 65.9 versus 64.5. Still, the April figure was the lowest in five years.

Next on line … President Bush is slated to hold a press conference at 10:30 a.m. ET, where he is expected to talk about the economy.

The opening action was soft in line with overnight declines on a dip in European shares as Deutsche Bank posted its first quarterly loss in five years, and French tire company Michelin tumbled 9% on sloppy earnings.

Large-cap companies influencing trade this morning included drug company Merck & Co. (NYSE:MRK), which was down 7% on news that the FDA rejected a new cholesterol drug. From an overall stock market picture, the news had a somewhat muted impact, because it lifted Merck competitor Abbott Labs (NYSE:ABT) by 4%. In addition, Visa (NYSE:V) posted decent earnings ahead of the opening, but the financial firm was down 3% in early action.

The S&P 500 stalled approaching the 1,400 level on the latest push upward, and that key figure resistance will be closely watched through the rest of the week’s major economic events. In the Russell 2000, the market yesterday climbed . . .