Tag - NYSE:ZQK

Friday's Top Performing Small Cap Stocks (AIRM, CASC, ZQK, SOLR, IPSU)

Every morning I wake up now I'm reminded that summer is essentially over, and we're entering the shoulder season here in the northeast. Some in Vermont call it stick season because soon the leaves will turn vibrant colors and fall to the ground, leaving only bare branches.

On this particular morning while considering what I could write about I began to reminisce about the summer months - and the companies discussed here in Small Cap Investor Daily. So I decided to revisit prior suggestions, and check out their returns since I wrote about these companies.

And I've got to say, I'm pretty pleased with the results. Of course, it's always easy for those of us who recommend stocks for a living to cherry pick the best results and only present those - while letting the 'losers' drift from our minds.

As I promised yesterday, I've got two potential small cap winners that could see shares move as the X-Games gets broadcast around the world. Let's jump right in... Extreme Small Cap #1: QuickSilver

Interest rate concerns and inflation worries put pressure on stocks today after the government's sale of $19 billion had a harder than usual time getting buyers. Investors seem concerned about the government's growing debt and that it could spur higher inflation and interest rates.

The Dow lost 24.04 points to close at 8,739.02; the Nasdaq shed 7.05 points to end the trading session at 1,853.08; and the S&P was down 3.28 points for 939.15.

Stocks comprising the Russell 2000, comprised of the 2,000 largest small-cap stocks, brought the index down to 523.41 on a loss of 4.52 points.

Today's small-cap gainers were lead by communications firm Atlantic Tele-Network (Nasdaq:ATNI) up 42.29% at $37.92. ATNI was up on news from yesterday's announcement to acquire wireless assets from Vodaphone (NYSE:VOD) and Verizon Communications (NYSE:VZ). Primarily doing business in the Caribbean, ATNI now picks up nearly a million wireless subscribers in the U.S. southeast and Illinois and Ohio. Because of regulatory requirements on Verizon to sell off some subscribers as part of its deal with Alltell, ATNI is substantially changed from a small operator overseas to a real player in the U.S. market.

Other small-cap leaders include one of yesterday's leaders, Satyam Computer Services (NYSE:SAY) up 35.7% after being rated "overweight" by an analyst from JP Morgan; American Axle & Manufacturing (NYSE:AXL), another of yesterday's leaders, up 25.7%; and Corel Corp. (Nasdaq:CREL) up 34.75%.

Decliners were lead by NCI Building Systems (NYSE:NCS) down 26.1% on worries over its reports of larger than expected Q2 losses. Shares were going for $3.16 at market close, down from an opening price of $3.80.

Other small-cap decliners include one of yesterday's leading gainers, Sequenom (Nasdaq:SQNM). Yesterday SQNM lead small-cap gainers with a 45.97% gain but today lead decliners by shedding 22.83% of its opening price to close at $4.09. And after shedding 20.17% off its price yesterday, Quiksilver (NYSE:ZQK) saw shares drop another 12.71%. So far this week investors holding shares in Quiksilver have endured a total loss of 27% since Friday's close.

*****"The worst is to come…"

That's what MetLife's (NYSE:MET) Chief Investment Officer Stephen Kandarian told Bloomberg this morning.

He was talking about commercial mortgage defaults. He notes that "[t]ypically there's a lag between when the economy softens and when the defaults actually occur."

Bloomberg also cites a study from Real Estate Econometrics LLC that forecasts default rates for commercial real estate may hit 4.1% by the end of the year.

What does commercial real estate have to do with an insurance company? Plenty…

*****Insurance companies take in cash in the form of the premiums we pay. They then invest that money in order to pay off claims down the road. As their investment returns compound, they profit.

But when their investments lose money, trouble starts. And trouble is exacerbated when insurance companies sell guaranteed returns to investors in the form of annuities.

The promise of annuities forces insurance companies to seek riskier investments to boost their returns. And many have turned to mortgage-backed securities to make more money.

Whoops.

*****MetLife has a $300 billion investment portfolio. That portfolio lost 23% in the first quarter of this year. Mr. Kandarian freely admits he's looking for higher returns to make up the losses. And he's looking at adding securities backed by commercial mortgages, in addition to continuing to originate loans to the commercial real estate sector.

It reminds me of the gambler, who after suffering a big loss, decides to start doubling down and taking more risks to win his money back. It usually doesn't end well.

Of course, what he should do is simply step away from the table. But MetLife and other insurers can't -- they have to make money to meet their obligations. It's not a sure thing, but I can imagine it ending poorly for some insurance companies.

As of press time, 4:00 P.M. Eastern, stocks on the broader indices were up. The Dow was down 2.49 points to 8,762, the Nasdaq up 17.73 points to 1,860.13, and the S&P 500 was up 3.22 points to 942.42.

The Russell 2000, the index tracking the 2,000 largest small cap stocks, was up 4.02 points, or 0.77%, to 528.57.

Leading today's small cap gainers was Sequenom (Nasdaq:SQNM) up 45.97%. Sequenom provides genetic analysis products for biomedical research, molecular medicine, and non-invasive prenatal testing. As I've been saying for the past couple weeks, the sector rotation to defensive stocks like biotech and healthcare has started.

Other small caps showing leadership today include Spreadtrum Communications (Nasdaq:SPRD) up 23.76%; Satyam Computer Services (NYSE:SAY) up 34.93% on surprising the market with profits from the December quarter; Movado Group (NYSE:MOV) up 25.8%; and American Axle & Manufacturing (NYSE:AXL) up 22.45% after having broken through it's 200 day moving average for the second time since over a year ago and despite reporting that it will encounter production shutdowns due to the bankruptcy proceedings of General Motors (OTC:GMGMQ.PK) and Chrysler.

Showing the wrong kind of leadership in today's session-that is, the biggest decliner-was youth fashion creator Quiksilver (NYSE:ZQK) shedding 20.17% off it's opening price to be at $2.88 at press time. Shares dropped precipitously after it was announced that Quiksilver's profit was a penny shy of analysts' estimates.

Other stocks with investors seeing red today include LCA-Vision (Nasdaq:LCAV), provider of LasikPlus, down 14.11%; famed golf equipment maker Callaway Golf (NYSE:ELY) down 15.8% on news of it's dividend cut from 7 cents per share to just one cent per share; CBL & Associates Properties (NYSE:CBL) down 12.8% after releasing its full year outlook below consensus expectations and announcing an offering of 50 million shares of common stock.

*****Bravo. The government's handling of the financial crisis and recovery should be recognized as a masterful performance. At least, so long as you don't look too deeply into the numbers…

Bernanke and Co. have managed to restore confidence to the point that economist Paul Krugman has joined the ranks of those who think we are only a couple months away from actual GDP growth.

And they've accomplished this remarkable feat by stringing investors along with one carrot after another…

*****The first carrot was bailouts and stimulus packages. There was a time when stimulus spending was going to save or create 3.5 million jobs. Now, states are wondering where the stimulus money is. And the president is now promising 600,000 jobs will be created by stimulus spending.

But layoffs have slowed considerably according to the most recent non-farm payroll report. And Americans, feeling more secure in their jobs, may not notice that stimulus jobs won't be there, even if they need them.

*****The Public-Private Investment Program (PPIP) was supposed to remove toxic assets from bank balance sheets. Never mind that the banks probably never had any intention of selling at fire-sale prices and investors weren't thrilled with paying unreasonable prices, no matter how much of the transaction would be funded by the Treasury.

Geithner's "stress tests" resulted in banks raising their capital bases. That has helped remove the incentive to dump those toxic assets. 

And as for the $74 billion banks have raised so far, do not misunderstand all the talk of "green shoots". These green shoots were not economic recovery per se. Rather, the green shoots were the banks stock prices shooting higher after accounting rule changes allowed them to show a profit where there was none.

In other words, the economic recovery is something akin to an illusion -- those inflated stock prices have allowed the banks to raise enough capital to appear healthy and last a little while longer…

*****Now that investors have breathed a sigh of relief that the problems with the auto industry are being resolved, the Chrysler sale to Fiat has been put on hold. Funny, I would swear a couple weeks ago, Chrysler would go bankrupt and millions would lose their job if Fiat didn't buy Chrysler right away.

*****And then there's TARP - the $700 billion boondoggle. Some banks have been asking to repay the money for months. But ever-sensitive to the all-important timing element of a good comedy, the Treasury has been unwilling to accept payment.

After all, why spoil the party by letting all the good news out at once? Why not wait until the rally is looking weak to release the news that, hey, maybe we'll accept TARP repayments after all? And maybe those payments will be more than anyone expects?

But let's make sure we string the announcement out as long as possible and let the threat of good news keep the bears at bay…

*****Of course, you can only fool all of the people for a while. Eventually, without a real pickup in economic activity, the millions of Americans who are barely keeping their head above water will sink. And then all the issues the "stress tests" glossed over (higher unemployment, rising foreclosure rate, etc.) will cripple the banks once again.

As economist Joseph Stiglitz of Columbia University recently told Bloomberg: "There's a chance that it might work...If it does, then they'll look like the brilliant general. But all these efforts also bank on the economy recovering and housing prices not falling too much further. Those are not safe assumptions."

P.S. I normally don't like to be the guy who says "I told you so", but for today I will. Back when the PPIP was first floated by the Treasury my diligent research in my Top Stock Insights advisory service spotted three stocks that would profit big time if the PPIP went through and profit modestly even if it did not. We did it. In a matter of weeks - not months or years - we profited on Legg Mason (NYSE:LM) for 8.16%, BlackRock (NYSE:BLK) for 9.1%, and AllianceBernstein (NYSE:AB) for 12.77%. Top Stock Insights readers booked these gains DESPITE the collapse of Geithner's PPIP plan. To find out how you can see steady and consistent gains no matter what happens, check out Top Stock Insights at http://www.topstockinsights.com/.

Shares of Quiksilver Inc. (NYSE:ZQK) climbed 8.6% this morning after the outdoor sports lifestyle company announced it had swung to a profit in its fiscal third quarter.
 
For the three months ended July 31, Huntington Beach, Calif.-based Quiksilver said after the market closed on Thursday that it earned $2.9 million, or $0.02 per share, compared to a net loss of $7.9 million, or $0.06 per share, in the year-ago period.
 
The firm said the results benefited from a higher proportion of revenue coming from Europe and from increased sales in its retail sales.
 
By late morning, Quiksilver is at $7.83, up $0.64 from Thursday's close. The stock has traded between $5.69 and $15.13 in the past year.
 
For detailed price information and news stories on Quiksilver, click ZQK.

SI International Inc. (Nasdaq:SINT), Talbots Inc. (Nasdaq:TLB) and Borders Group Inc. (Nasdaq:BGP) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Northern Dynasty Minerals Ltd. (Nasdaq:NAK), Quiksilver Inc. (Nasdaq:ZQK), Midwest Banc Holdings Inc. (Nasdaq:MBHI), TomoTherapy Inc. (Nasdaq:TOMO), Community Bankshares Indiana Inc. (Nasdaq:CBIN) and Chico's FAS Inc. (Nasdaq:CHS).

Here are the biggest percentage gainers among small caps:

Bill Martin is well known as the original founder of the Raging Bull, an early leader among financial online communities. Now, in addition to being a director for BankRate.com, he is also the founder of Indie Research, which publishes such sites as BullMarket.com.

His Bull Market Report is a daily investment service focused on identifying what he considers to be "great long-term growth, value, and income generating investments."

As part of a diversified, long-term portfolio Martin will often recommend small-cap stocks, such as one of his latest recommendations, Salary.com, Inc. (Nasdaq: SLRY), with a market cap of $140 million.

"Salary.com will be celebrating the one-year anniversary of its IPO and subsequent listing on the Nasdaq stock exchange,” he says. “It was around this same time that we originally looked at the company, telling investors to steer clear."

Since his first cautious assessment, the shares have ranged between $16.32 per share on the high side to Thursday’s closing price of $8.55.

Now, a year later, he has reexamined the shares. "With the stock price now significantly lower — over 40% lower — and top-line growth still strong, our opinion has changed," he says.

At its core, he notes, Salary.com provides Web-based software suites that help companies manage their employee compensation packages. "As its name suggests, the company helps clients determine employee salary and compensation through a variety of comparable databases, third-party data, and in-house data available from customers," Martin says.