Tag -  HRZ 

The best performing small cap stocks on June 2nd. 

Stocks generally closed up higher today with the Dow and the S&P 500 continuing their upward momentum, but the Nasdaq closing down from yesterday's close. 

The Dow closed up 23.95 points to 9,093.24; the S&P was up 2.97 points to 979.26; while the Nasdaq closed down 7.64 points to 1,965.96 after at one point during the day trading down as far as 1,937.64.

The Russell 2000, the leading indicator for small-cap stocks, was up 1.99 points to close at 547.84.

 

Small-cap leadership was shown by Horizon Lines Inc. (NYSE:HRZ) up 35%. The Charlotte, North Carolina firm provides container shipping and logistics services focused primarily on foodstuffs, household goods, building materials, and auto parts. Horizon Lines handily beat street estimates: analysts had projected a Q2 EPS of $0.03 while the company actually reported $0.13. The company further reported that much of the difference was from workforce reductions and lower fuel costs.

 

Other small-cap gainers include Align Technology (Nasdaq:ALGN) up 21%; KKR Financial Holdings (NYSE:KFN) up 21%; and ArvinMeritor (NYSE:ARM) up 19%.

*****Wow. Huge rally for stocks yesterday. All the major indices have now broken above critical resistance levels. For the S&P 500, that level was 956.

 

The question for investors now: Is this a sustainable move, or are we experiencing some kind of a blow-off top?

 

The reason I ask should be obvious. Corporate earnings have come in better-than-expected virtually across the board so far. Only 16% of the S&P 500 that’s reported so far has missed expectations.

 

But we know that expectations were extremely low. And we also know that the rise in earnings we’ve seen is the result of cost-cutting. Only a handful of companies have indicated that revenues are rising. Cost-cuts are essentially a one-time thing. They don’t support improving earnings over the medium- or long-term.

 

Now, the recent rally certainly seems to be fueled by the expectation that companies have turned the corner to improved profitability. And while it’s possible that demand is returning, there’s virtually no evidence to support that.

 

*****Improved home sales numbers are the result of foreclosure pricing and improved bank profits are the result of accounting changes – these are short-term benefits. Auto sales aren’t improving, retail sales are mixed at best and, most importantly, unemployment is still on the rise.

 

So exactly why are stocks rallying?

 

It’s true that confidence in the economy and financial markets has improved. And the fact that companies are able to scratch some profit out of this hard-pan economy is good.

 

But let’s not ignore the bears. There can be no doubt that many short positions were initiated coming into earnings season. The indices were rolling over and oil prices, the key leading indicator for economic growth, were falling. When shorts are forced to cover, it provides fuel for higher prices. I have no doubt that shorts have been buying to cover their positions.

 

But that can only be part of the story…

 

*****Unfortunately, the rest of the story is yet to be written. The S&P 500 just closed above support at 956 for the first time yesterday. It’s going to need to prove it can stay above that level before this rally can be considered the “real deal.”

 

In the meantime, I've been using this strength to take some gains off the table. I took 65% and 20% on two stocks at SmallCapInvestor PRO. I took 17% gains on Activision (Nasdaq:ATVI) at Top Stock Insights And TradeMaster Daily Stock Alerts' Jason Cimpl took 11% on a quick trade in that service.

(Note: to find out more about the profits that Top Stock Insights readers are seeing, like ATVI, click here for information on our updated Predictions Issue. Readers are 11 for 14 for the year, or in baseball terms, batting .785. Not bad. Click here for more.)

In my view, taking profits is always good. But it is especially important when you're uncertain about what's going on in the stock market. Why continue to risk money when you've already got profits locked and the outcome is questionable?

*****The current bullishness seems to be based on the expectation/hope that the U.S. economy is bottoming right now. And that means growth may be ahead. Of course, that would be growth after a ridiculously deep contraction, but that's not really the point, not when that contraction has been pretty well priced in.

To illustrate the potential for the bulls, here's an easy to understand analysis by the Wall Street Journal. They're suggesting that we may be hitting bottom.

*****Finally, here's TradeMaster Daily Stock Alerts' Jason Cimpl and his weekly market forecast video. Click here to watch the video and find out why the market did what it did this week and more importantly, Jason's expectations for next week. Click this link to watch the video now or go to trademasterstocks.com/videoreport.

 

 

Best Regards,

Ian Wyatt  
Editor
SCI Daily

P.S. I've had a few emails from readers asking about financial advisors, and particularly how to check if they're giving good recommendations. I'm no auditor of advisors, but I can tell there are five funds they're probably not telling you about, and they should. Click here to find out more about these funds.

The Russell 2000 (NYSE:IWM) gave up early gains today to slip for the fourth consecutive week, finishing off the first month of the year with a sizable loss of 11.2%. Some of today’s small-cap gainers were Horizon Lines (Nasdaq:HRZN), Accuray (Nasdaq:ARAY) and Clearwater Paper (NYSE:CLW).

Other Market Watch highlights today included:

• The GDP report headline figure came in at minus 3.8%, which was much better than expected.
• Even though the number beat the projection, it was still the worst showing for the U.S. economy since 1982.
• The Chicago headline figure came in at 33.3, which was below the forecast of 34.9.
• The Goldman Sachs Analyst Index, a survey of Goldman’s equity analysts across a range of sectors, fell to an all-time low in January.
• The Dow fell 8.8% in January, while the S&P 500 was off 8.5%. This marked the worst start to the year in history for the stock market.
• Looking ahead to next week, we’ll see another full slate of reports starting out with the ISM Manufacturing Survey on Monday and then heading into the main event – Friday’s big monthly employment release.

Small Cap Gainers:

• Horizon Lines posted a surprise adjusted Q4 profit; shares rocketed 19%. See (NYSE:HRZ).
• Accuray climbed 26% after Q2 profit met estimates. See (Nasdaq:ARAY). 
• Clearwater Paper closed up over 11% after announcing Q4 and . . .

Small-cap stocks pushed higher into mid-session, supported by gains in airlines, retailers and energy stocks. Small-caps were firm relative to large-cap stocks which were pulled down by big financials and tech companies.Today's biggest small-cap gainers are Theravance Inc. (Nasdaq:THRX), Targanta Therapeutics Corp. (Nasdaq:TARG) and General Motors (NYSE:GM).

Other Market Watch highlights included:

• The U.S. dollar was down more than 1% against the euro, which also helped the tone in commodity stocks.  
• Crude oil prices pulled higher amid talk of OPEC cuts and the hijacking of a big Saudi oil freighter.  
• Financial shares continue to be a drag on large-cap indices, with the Financial SPDR Fund off about 2%.  
• The market was sharply divided today, with strong gains seen for several sectors, but big losses offsetting in other sectors, which had cumulative effect of keeping index movement relatively stable. 

Small Cap Gainers:

• Theravance Inc. climbed 15% as the company said that a skin infection drug showed capability to fight deadly bacteria See (Nasdaq:THRX).  
• Targanta Therapeutics Corp. jumped 34% on news that an FDA committee will review the firm’s new application for skin infections. See (Nasdaq:TARG).  
• General Motors Corp. is up about 11% as the automaker continues to benefit from expectations that the U.S. government will extend a helping hand to carmakers. See (NYSE:GM).  
• First stores open at Developers Diversified Realty's Homestead Pavilion late last week; shares up 8% today. See (NYSE:DDR).

Small Cap Losers:

• Central European Media Enterprises Ltd. slumped 21%, tumbling to fresh 52-week lows following analyst downgrades last week. See (Nasdaq:CETV).  
• Horizon Lines down nearly 10% following last week's news that the company would cut fuel surcharges by 5.5%. See (NYSE:HRZ).  
• Allied Capital Corporation down 12% today after analysts said last week that the company faces liquidity issues. See (NYSE:ALD).  
• Live Nation Inc. treads 16.4% lower today as recession fears continue to hurt the ticket industry. See (NYSE:LYV).

Small caps closed up nearly 5% today, marking the third consecutive higher close, which has not happened since Sept. 12. Today’s small-cap gainers are First Industrial Realty (NYSE:FR), Horizon Lines (NYSE:HRZ) and Conceptus, Inc. (Nasdaq:CPTS).

Other Market Watch highlights today included:

• Small caps show bottoming promise on daily studies, but will need a strong close Friday to suggest any decent reversal formation on weekly time frames.  
• Sectors doing well today included airlines, homebuilders and consumer staples.  
• Insurance, merchandise stores, casinos and leisure products companies all struggled today.  
• Crude oil prices were actually off $1.54 to $65.96 and the Commodity Research Bureau Index of 19 physical markets was down 2.8%.  
• Gas utilities, oil and gas storage and oil and gas drilling stocks were among the best-performing broad market sectors.  
• The market continues to nod with approval at the string of declines on inter-bank lending rates, which suggest that confidence is growing between banks on the lending front.  
• The GDP report released today marked the steepest contraction in seven years and reflected the first quarterly decline in consumer spending since 1991. 
• Economists are unanimously calling for things to get quite a bit worse in the fourth quarter.

Small Cap Gainers:

• Horizon Lines Inc. shares up 43%, trying to mount a comeback after sinking to 52-week lows a few days ago. See (NYSE:HRZ).  
• Conceptus, Inc. rallies 47%, also getting an earnings boost as the birth control firm saw net sales up 62%. See (Nasdaq:CPTS).  
• First Industrial Realty Trust Inc. soars 54% on solid quarterly earnings See (NYSE:FR).  
• Brazilian pulp and paper product company Votorantim Siderurgia maintains expansion plans, shares rise 21%. See (NYSE:VCP).  

Small Cap Losers:

• Polypore International reports Q3 results, company downgraded to "neutral." Shares plummet over 38%. See (NYSE:PPO).
• Protective Life Corp. careens 14.5% on higher-than-average volume. See (NYSE:PL).  
• Automotive supplier Lear Corp. swings to Q3 loss amid lower N. America, Europe auto output. Announces it will make more salaried job cuts. Shares down 10.4%. See (NYSE:LEA).  
• Mobile equipment maker Sauer-Danfoss sees a rise in Q3 profit, cuts FY08 earnings guidance. Shares are down 24%. See (NYSE:SHS).  

Small-cap stocks pushed higher Thursday, benefiting from money flow out of debt instruments and into equities amid hopes that credit markets are on the cusp of a recovery stirred by global rate cuts. The Russell 2000 (NYSE:IWM) closed up 23.30, or 4.75%, at 514.18, and is now down 33% for the year. The Dow is off 31% for 2008 and the S&P 500 is down 35%. This marked the third consecutive higher close for the Russell 2000, which has not happened since Sept. 12, or before the entire collapse took place. Looking ahead to Friday, the market hasn’t closed higher four consecutive trading sessions since May 30. The fact that small caps aggressively paced today’s rally reflected a more open investor stance on risk, as small caps were pummeled relative to the Dow on the way down in recent weeks.

Investors appeared to gather confidence when this morning’s GDP report came in a tad better than expected, which sparked a renewed appetite for riskier investment fare. The GDP headline figure came in at minus 0.3%, slightly better than the forecast for a slide of 0.5%. Still, this marked the steepest contraction in seven years and reflected the first quarterly decline in consumer spending since 1991. What’s more, economists are unanimously calling for things to get quite a bit worse in the fourth quarter.

However, news that the economy is struggling isn’t exactly fresh news, and investors appeared more confident that the worst of the picture is already priced into the recent collapse. Outside of a wild late slide Wednesday afternoon, intraday stock market gyrations have been a little less frantic and bewildering, and the movements seem a little more orderly, which could also help restore some confidence . . .

Small caps continue to trade in the green midday, though off their highs of the session, after GDP was not as bad as feared. Today’s small-cap gainers are Horizon Lines (NYSE:HRZ), First Industrial Realty Trust (NYSE:FR) and Sonic Automotive (NYSE:SAH).

Other Market Watch highlights today included:

• Advancers were leading decliners by nearly 6 to 1 on the Russell 2000 after the first hour of trading.  
• Norway also joined in on the rate cut fervor as countries around the world toss cheap money at businesses in a drive to thaw frozen credit lines.  
• Hong Kong shot up some 10% and Taiwan was up 6%, as those countries announced rate cuts following the Fed’s rate cut Thursday.  
• Stock markets around the world were in rally mode overnight, with the world stock index up 2.5%, powered by steep gains in some Asian markets.
• Crude oil futures trimmed overnight gains and were hovering near steady levels on the stock market opening.

Small Cap Gainers:

• Shares of shipping company Horizon Lines are up 51%. Goldman Sachs downgraded the stock on Monday to "sell" from "neutral." See (NYSE:HRZ).  
• Shares of First Industrial Realty Trust are up 27% as it reports Q3 profit drop and cuts dividend. See (NYSE:FR).  
• Sonic Automotive shares up 24% as it reports losses in Q3. See (NYSE:SAH).  
• Auto parts supplier Tenneco to cut 1,100 jobs as global auto sales slide. Shares are up 20%. See (NYSE:TEN).  

Small Cap Losers:

• Sauer-Danfoss misses on Q3 earnings, issues cautious outlook. See (NYSE:SHS). 
• Brocade and Foundry Networks to amend merger terms: Foundry's shareholders to receive $16.50 in cash for each share. See (Nasdaq:FDRY).
• Astronics posts decline in bottom-line on higher engineering, development spending, higher manufacturing costs. (Nasdaq:ATRO).  
• Polypore International beats on Q3 results, guides full year revenues below the Street, EPS straddle consensus. See (NYSE:PPO).  

Small-cap stocks extended the bear market collapse on Monday, setting fresh intraday and closing lows for the move as investor fear of risk amid a global meltdown took a toll on smaller companies. A positive surprise on new home sales helped take some of the edge off the bearish tone, but it wasn’t enough to douse a late flash of selling fire in the small-cap universe. The Russell 2000 (NYSE:IWM) closed down 22.72, or 4.82%, at 448.40, the lowest daily close since August 2003.

Small caps continue to be punished relative to their large-cap brethren as the bear market incites a “bigger is better” mentality among the few speculators willing to take on equity risk at this stage of the economic cycle. The Russell 2000 is now down 41% for 2008, while the Dow is off 38% and the S&P 500 is down 42%. Just a few weeks ago, the percentage spread favored the Russell over the Dow by more than 10 percentage points, but when the market went into collapse mode small caps suffered on a perception that they represent even riskier fare than big corporations.

Along that line of thought, it makes sense that when the market does find a bottom, it will probably take place first in the large-cap universe, then small caps will likely once again start to outperform on the way back up, just like they did once the market pulled out of the 2000 through 2001 economic recession. From a chart perspective, there are still no signs of a bottom in the Russell 2000, but it’s worth noting that even though small caps are at new move lows, the Dow and S&P 500 are still above the Oct. 10 trough (although the late collapse Monday put the S&P 500 on the doorstep of that low). There is also a powerful seasonal for major lows to be set in the month of October, and there are theories sprouting that once the month-end redemptions play out this final week of the month that bargain-hunters will be prominent . . .

Small-cap stocks climbed to an impressive rally Thursday, quickly putting aside any downward momentum from Wednesday’s historic collapse. Investors were picking through the rubble for bargains, and also appeared to be testing the waters for a potential bottom. Traders had to endure choppy waters as the market traded more than 3% on both sides of the ledger, buffeted about by mixed economic data. The Russell 2000 (NYSE:IWM) closed up 34.46, or 6.86%, at 536.57, rejecting an intraday slide to the second-lowest point in more than five years to notch the third-largest one-day gain of the year. The Russell is now off 30% for 2008, while the Dow is down 32% and the S&P 500 is off 35%.

One encouraging element of the recovery move today was that small caps paced the move over the Dow and S&P 500 – even when the market struggled in the midday time frame. In addition, today marked the most solid chart action that we have seen since this whole collapse kicked into gear in late September. The Russell had a decent test of the recent lows without violating the bottom, then closed strong, which is a positive signal. In addition, the market has now left twin long “wicks” on the major low testing days, which is a form of a double bottom. It should be noted that these signs are on daily charts, and it will take a more dynamic formation on weekly charts to support any bottoming theory at this stage of things.

Even investors playing for a bottom that don’t watch chart dynamics have their own story to hang a hat on right now. Some of those elements include: (a) signs that frozen credit markets are starting to thaw vis-à-vis the pullback in Libor rates; (b) various valuation tools suggest the market is a bargain; (c) a majority of market pundits believe that the market has either made the lows, or is close to the low, which means downside risk might not be that bad compared to upside gain; (d) governments around the world have poured hundreds of billions into financial systems, which will stabilize the market. And even though economic statistics are truly . . .

Small-cap stocks finished out the week with a flourish, riding a wave of surprisingly stout economic reports and a slide in crude oil prices to a solid advance Friday. The Russell 2000 (NYSE:IWM) closed up 7.95, or 1.13%, at 710.34. For the week, the small-cap benchmark rose 17.26 points, or 2.49%.

Coming into this week’s action, the economic calendar was quite tame and one would have expected earnings news and energy gyrations to dominate trading direction. While that played out early in the week, today’s session was actually influenced heavily by new home sales and durable goods – two reports that usually are quickly cast off by stock market traders for more influential input.

However, with earnings coming in on a mixed tone the market focused attention toward upside data surprises on durables and home sales, both of which topped analyst forecasts. The bullish surprise on the data front helped soothe investor worries about the consumer spending picture going forward.

As for the data itself, the durable goods report headline figure was reported up 0.8%, well above the median projection for a slide of 0.3%. It should be noted that durables figures can be volatile, the report is somewhat dated (June data) and even today’s rise was questioned in some corners as susceptible to reporting quirks. However, when the new home sales report came in at an annualized rate of 530,000 units, compared with a forecast of 500,000, it kept the economic naysayers in check. What’s more, the previous new home sales report was revised upward. Although it’s too soon to say that the housing market is bottoming, it was a welcome sign of good news just . . .

NB Capital Corp (Nasdaq:NBD), Horizon Lines (Nasdaq:HRZ) and SureWest Communications (Nasdaq:SURW) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: AngioDynamics Inc (Nasdaq:ANGO), James River Coal Co (Nasdaq:JRCC), Triumph Group (Nasdaq:TGI), TEAM Inc (Nasdaq:TISI), Endwave Corp (Nasdaq:ENWV) and Columbia Banking System Inc (Nasdaq:COLB).

Here are the biggest percentage gainers among small caps:

Horizon Lines Inc. (NYSE:HRZ) has gained 10% after announcing ahead of the opening its second-quarter earnings had beat analyst estimates, despite declining. For the quarter ended June 22, the Charlotte, N.C.-based company reported net income of $7.2 million, or $0.24 per share, compared with $9.6 million, or $0.28 a share, for the same period a year earlier. Revenues were $331 million versus $295.7 million for the year-ago quarter. Wall Street was expecting earnings per share of $0.21 on revenues of $332.4 million.

“Despite sharply rising fuel costs and volume softness related primarily to the ongoing recessionary business environment in Puerto Rico, we achieved a 13.8% increase in our adjusted earnings per share. We were able to effectively mitigate the impact of steep fuel cost increases in the quarter through a combination of conservation, strict vessel scheduling and fuel cost recovery measures. Additionally, we repaid $10 million in revolving debt during the quarter, further strengthening our financial position,” said chairman, president and CEO Chuck Raymond in a statement.

In today’s trading, shares of the container shipping company are at $9.84 at 10:02 a.m. ET, up $0.93 from Thursday’s close.

Horizon Lines, Inc. (NYSE:HRZ), Preferred Bank (Nasdaq:PFBC) and NetGear, Inc. (Nasdaq:NTGR) were among the new 52-week lows established during Friday's trading among companies with market capitalizations or values under $750 million.

Trailer Bridge, Inc. (Nasdaq:TRBR), VASCO Data Security International, Inc. (Nasdaq:VDSI) and Citizens Holding Co. (Nasdaq:CIZN) were also among the 52-week small-cap lows.

Here are today's 52-week small-cap lows:

Small-cap stocks began Friday’s trading session higher, but are skidding into the red after figures from the University of Michigan showed American consumer sentiment at a 26-year low. At 1:43 p.m. ET, the Russell 2000 (NYSE:IWM) was down 3.35, or 0.47%, at 713.72.

Among small caps, Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX) is up 30% after the Tarrytown, N.Y.-based company’s constipation drug won FDA approval. YRC Worldwide Inc. (Nasdaq:YRCW) is up about 29% after the transportation services company said early Friday that it expects second-quarter profit in-line with Wall Street expectations. Wilshire Bancorp, Inc. (Nasdaq:WIBC) is up 17% after the Los Angeles-based community bank posted first-quarter net income of $7.1 million, or $0.24 per share, compared with analysts’ expectation of earning $0.20 per share.

Among small-cap losers, shipping and logistics company Horizon Lines, Inc. (NYSE:HRZ) is down about 18% after cutting its 2008 forecast due to weakness in Puerto Rico. Acacia Research-Acacia Technologies (Nasdaq:ACTG) is down 18% after the Newport, Calif.-based company, which develops, acquires, licenses and enforces patented technologies, reported a first-quarter loss of $3.9 million, . . .

Acacia Research- Acacia Technologies (Nasdaq:ACTG), Horizon Lines, Inc. (NYSE:HRZ) and SiRF Technology Holdings Inc. (Nasdaq:SIRF) are among the biggest percentage losers in Friday's trading among companies with market capitalizations under $750 million.

EZCORP, Inc. (Nasdaq:EZPW), Bottomline Technologies (Nasdaq:EPAY) and Viad Corp. (NYSE:VVI)  are also among the top small-cap percentage losers.

Here are Friday's biggest percentage losers among small caps

Small-cap stocks pushed higher in early trading, but slipped into the red after sobering consumer sentiment figures from the University of Michigan. At 10:01 a.m. ET, the Russell 2000 (NYSE:IWM) was down 2.96, or 0.41%, at 714.12.

The University of Michigan’s consumer sentiment survey came in below expectations at 62.6% versus the median forecast of about 63.5%, and at 26-year lows, which appeared to spark a wave of selling across equities. The downside press after the Michigan numbers was a little surprising, because the survey seldom moves the market more than a few ticks. However, it may have simply been just an excuse for short-term longs to book profits ahead of the weekend instead of battling through key overhead chart resistance.

Once again, the market appeared to find initial buying interest on the back of earnings news, with American Express (NYSE:AXP) beating the forecast this morning, and climbing about 3% after the cash open. However, tech leader Microsoft (Nasdaq:MSFT) stumbled about 4% after the opening on sluggish earnings, so the news was mixed on some of the big name issues early today. Overseas stock market index products generated a nice rally, which provided a boost to investor psychology to start the session. European shares rose to three-week highs, while Japan’s Nikkei was up 2.3%.

President Bush held a very brief announcement about 15 minutes ahead of the stock market opening to let Americans know that their economic stimulus rebate checks were literally in the mail. The immediate response in stock futures trading . . .

Small-cap stocks charged higher Friday, giving beleaguered bulls a happy weekend sendoff. The Russell 2000 (NYSE:IWM) rose 13.07, or 1.85% to 721.07, the highest daily close since mid-February as investors embraced the latest batch of earnings numbers with open arms.

In a sense, it was a perfect storm of broad-based earnings reactions Friday, with Citigroup Inc. (NYSE:C) lifting financials, Google Inc. (Nasdaq:GOOG) fueling technology issues, and Caterpillar Inc. (NYSE:CAT) sparking buying interest in the manufacturing sector.

It perhaps took a little creativity on the part of investors to “spin” the Citigroup story into a positive one, as the company still reported massive debt write-downs and missed the earnings estimate. In essence, investors looked through the headline numbers and decided the story on Citigroup was headed toward happier times.

However, no such rose-colored glasses were needed for Google or Caterpillar. Google shot 20% — or about $90 bucks a share — as earnings topped estimates, and Caterpillar, which climbed about 8%, also beat their forecast despite sluggish economic conditions in the manufacturing sector in recent months. Just to add a little extra good vibes into the mix, another manufacturing giant, Honeywell International Inc. (NYSE:HON) also reported strong earnings and rose nearly 6% on the day.

April options expirations came into play today, and the market appeared to be out of position on the short side, which likely fueled the rally, said Nick Kalivas, vice president of financial research with MF Global, in a phone interview. In addition, “there . . .

Shipper of consumer and industrial items Horizon Lines, Inc. (NYSE:HRZ) confirmed this morning that it received a grand jury subpoena relating to an investigation of pricing practices of ocean carriers operating in Puerto Rico. The company said it does not expect the government inquiry to impact the service levels provided to its customers.

Shares lost 5%, or $0.71, to $13.99 at 12:20 p.m. ET. For detailed price information and recent news stories about Horizon Lines, click HRZ.