Tag - ARM

CKE Resturants Inc (Nasdaq:CKR), Arvinmeritor Inc (Nasdaq:ARM), Crocs Inc (Nasdaq:CROX) and Swquenom Inc (Nasdaq:SQNM) are among the most actively traded companies in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Xenoport Inc (Nasdaq:XNPT), Radian Group (Nasdaq:RDN), MGIC Inventory Corp (Nasdaq:MTG), STEC Inc (Nasdaq:STEC) and Omnivision Technologies Inc (Nasdaq:OVTI).

Willis Lease Finance Corp. (Nasdaq:WLFC), Stewardship Financial Corp. (Nasdaq:SSFN) and BlueLinx Holdings Inc. (Nasdaq:BXC) are among the biggest percentage losers in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Shore Bancshares Inc. (Nasdaq:SHBI), Smith & Wesson Holding Corp. (Nasdaq:SWHC), Flushing Financial Corp. (Nasdaq:FFIC), ArvinMeritor Inc. (Nasdaq:ARM), Tree.com Inc. (Nasdaq:TREE) and Midsouth Bancorp Inc. (Nasdaq:MSL).

ADC Telecommunications Inc. (Nasdaq:ADCT), WuXi PharmaTech Cayman Inc. (Nasdaq:WX) and Lydall Inc. (Nasdaq:LDL) are among the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Brigham Exploration Co. (Nasdaq:BEXP), Jazz Pharmaceuticals Inc. (Nasdaq:JAZZ), Internet Initiative Japan Depository Receipt (Nasdaq:IIJI), ArvinMeritor Inc (Nasdaq:ARM), China TransInfo Technology Corp. (Nasdaq:CTFO) and E House China Holdings Ltd. (Nasdaq:EJ).

ArvinMeritor Inc. (Nasdaq:ARM), Drew Industries Inc (Nasdaq:DW) and Isilon Systems Inc. (Nasdaq:ISLN) are among the biggest percentage gainers in Friday trading among companies with market capitalizations under $1 billion.

Also included among the results: Stone Energy Corp. (Nasdaq:SGY), Nanosphere Inc. (Nasdaq:NSPH), Genoptix Inc. (Nasdaq:GXDX), Glen Burnie Bancorp Inc. (Nasdaq:GLBZ), Tenneco Inc. (Nasdaq:TEN) and Gentiva Health Services Inc. (Nasdaq:GTIV).

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.

ILOG ADR (Nasdaq:ILOG), Headwaters Inc (Nasdaq:HW) and Gevity HR Inc (Nasdaq:GVHR) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Pzena Investment Management Inc (Nasdaq:PZN), UAL Corp (Nasdaq:UAUA), Modine Manufacturing Co (Nasdaq:MOD), ArvinMeritor Inc (Nasdaq:ARM), Meritage Homes Corp (Nasdaq:MTH) and Stepan Co (Nasdaq:SCL).

Here are the biggest percentage gainers among small caps:

Small cap stocks pushed higher in Tuesday afternoon, erasing some of Monday’s sizable drop as crude oil prices fell and investors digested a rise in consumer confidence. At 2:14 p.m. ET, the Russell 2000 (NYSE:IWM) was up 15.61, or 2.24%, at 711.72 while the Dow was up 176.60, or 1.59%, to 11,307.68.

The consumer confidence report clocked in at 51.9, which was above the forecast of 50 and which sparked a quick jump in the U.S. dollar while extending the morning rally in equities. Consumer spending makes up more than two-thirds of U.S. economic activity. Earlier this morning, investors reacted tepidly to the Case-Shiller Home Price Index, which slipped at a record pace to minus 15.8% in May.

Crude oil futures were pushing lower this afternoon, which provided some support to the stock market. In recent trading, crude oil fell $2.84 to $121.89 a barrel. OPEC president Chakib Khelil said that current prices for crude were “abnormal” and that prices could fall to $70 to $80 dollars in the long-term picture if the U.S. dollar strengthens and political tensions ease. The greenback was up this afternoon against both the euro and the yen.

Traders will keep a close watch on the financial arena again today following news overnight that Merrill Lynch (NYSE:MER) announced plans to write-down $5.7 billion in debt and raise $8.5 billion in capital through new stock sales. In the afternoon session, MER shares were up some 2%. Also within the financial spectrum, Citigroup (NYSE:C) was the target of negative analyst comments overnight, but is still up 2.75% this afternoon.

ArvinMeritor Inc. (NYSE:ARM) has gained 20% in today’s trading after reporting ahead of the opening that it had swung to a third-quarter profit. For the quarter ended June 30, net income was $44 million, or $0.60 per share, compared to a net loss of $70 million, or $0.99 per share, for the same period a year ago. Sales increased by $340 million to $2 billion.

“ArvinMeritor's favorable product, customer and geographic mix, combined with a dedicated focus across the company to implement and maintain cost reduction initiatives, drove strong results this quarter,” said Chip McClure, chairman, CEO and president, in a statement. 

Demand from overseas operations also helped lift the earnings out of the red, the truck and car parts manufacturer said. Shares are at $14.31 at 12:37 p.m. ET, up $2.37 from Monday’s close. The stock has ranged from $9.08 to $21.74 during the past year.

It’s been a long and sometimes rocky road for Hayes Lemmerz International (Nasdaq: HAYZ) since its founding companies manufactured wood-spoke wheels for Henry Ford’s Model T. The Northville, Mich.-based maker of steel and aluminum wheels has survived the decline of the Big Three automakers in Detroit and a Chapter 11 reorganization earlier this decade, and now seems on track to reap the benefits from its concentrated effort to restructure operations and restore profitability.

The company earlier this month announced solid gains in sales and earnings for the first fiscal quarter ended April 30, and said it was on target to reach full-year goals of $2.2 billion in sales and $200 million to $210 million in EBITDA, compared with $2.06 billion and $188.6 million in the year ended January 31.

Hayes Lemmerz is the global leader in supplying steel and aluminum wheels to passenger cars and steel wheels to commercial vehicles. It has had a laser focus in the past couple of years in positioning itself in the global automotive market and now realizes three-quarters of its sales outside the United States (and four-fifths of its wheel sales). While it still depends heavily on the Big Three in the Unites States, it has won virtually all the major European and Asian carmakers as customers as it shifts production to low-cost sites in Czech Republic, Turkey, Thailand and India.

At the same time, it has shut down and sold off non-core operations in the Unites States  and in general downsized the company, going from 43 facilities and 11,000 employees when it emerged from Chapter 11 in 2003 to 30 facilities and 8,500 employees now. Of those 30 facilities, only seven, with 1,500 employees, are in the Unites States – the remaining 23 facilities and 7,000 employees are spread among 13 foreign countries. Wheels, which represented two-thirds of sales in 2003, are projected to account for 84% in 2007. Other products include components for brakes and powertrains.

The company followed up its operational efforts with a successful capital restructuring this spring, raising $180 million in a rights offering, plus a $13 million direct investment by manager Deutsche Bank, to retire senior debt. It consolidated the rest of its debt in a $495 million syndicated loan and a $175 million euro-denominated note offering in Europe, so that the end result is to slash $24 million annually from its interest expense ($76 million in the past fiscal year), extend maturities (the earliest now is 2013), and better match its income streams.

It isn’t every day that analysts don’t budge from “hold” ratings on a company that exceeds—yet again—quarterly financial expectations, gets praise for execution and is capitalizing on growth potential.  But such is the case with Stoneridge, Inc. (NYSE: SRI), where dismal industry dynamics have analysts waiting patiently on the sidelines. 

And wait they will, for Stoneridge is steering clear of wreckage: it makes electrical and electronic components and systems for autos, medium to heavy trucks and agricultural and off-highway markets. As U.S. vehicle production dives, so do sales and profits for many who supply parts. A study released May 17 by BBK, an international business advisory firm in Southfield, Mich., said one-third of North American suppliers were at some level of financial distress. There are more headlines for hard times than there are profitable bottom lines.

Except for Stoneridge. Early this month, the Warren, Ohio-based company reported sales increased 3% to $185.0 million in the first quarter ended March 31. Net income rose to $0.21 per share, up from $0.16 per share for the same quarter last year—the fourth consecutive quarter in which the company beat earnings expectations.

Stoneridge also stayed with its 2007 earnings guidance of $0.45 to $0.55 per diluted share, which already includes expectations for a 25% to 35% decline in North American light vehicle and commercial vehicle production in 2007. In 2006, Stoneridge earned $0.63 per diluted share.

John Corey, CEO of Stoneridge, said on a conference call following release of the quarterly results that the vehicle market was trending toward the lower end of that production decline range of 25% to 35%. He indicated Stoneridge now looked for the drop in output to bottom out in the second half of the year, not the second quarter, as many had previously expected. There is also the question of whether European demand can continue strong later this year; Corey said high copper prices also could pressure Stoneridge’s performance in the third and fourth quarters, although the company has hedged one-third of its exposure.