Tag - GMTN

It was a bad day for stocks. The Dow Industrials was down 185 points or 1.9%. The S&P 500 lost 22 points, the Nasdaq lost 40 points and the Russell 2000 dropped 15 points or 2.65%. On a percentage basis, the Russell was the biggest loser, which is to be expected. Small cap stocks outperform on both the up and the downside.

Retractable Tech (AMEX:RVP) was the top small cap gainer today, jumping 103%. This move came on no news that I could find, but somebody knows something – volume was huge. 

Mining and oil company U.S. Energy Corp (Nasdaq:USEG) came in second with a more reasonable 22% move. Rounding out the top 5 were Anadys Pharmaceutical (Nasdaq:ANDS) up 19% Digital Angel (Nasdaq:DIGA) up 17%, and Alpha Pro Tech (AMEX:APT) up 13%.

Not a good day for some small cap biotech stocks. Acadia Pharmaceutical (Nasdq:ACAD) was the top loser with a gut-wrenching 65% decline. Builders FirstSource (Nasdaq:BLDR) also made the list with a 35% drop. Other notable losers include, Catalyst Pharmaceutical Partners (Nasdaq:CPRX) down 21%, Gander Mountain (Nasdaq:GMTN) down 18%, and AIG (NYSE:AIG), yes THAT AIG, down 18%.

*****Yesterday's headlines made it sound like the sky was falling after China's Shanghai Index sold off 6.7%. There's no doubt, bulls are a bit nervous and bears are getting a bit bolder. That's to be expected after a six month rally that's been remarkable in that there have been no corrections.

That's also why it's imperative to keep a cool head these days: there's a big difference between what the financial media is saying and what investors are doing.

If you didn't read the news yesterday and simply watched the S&P 500, you'd wonder what the excitement was all about. The S&P dropped right out of the gate, but quickly recovered and finished the day with a -0.8% loss.

Even Chinese stocks listed on U.S. exchanges made a nice recovery from the early weakness.

*****The reason U.S. stocks are shrugging off seemingly bad news is pretty simple. The government has guaranteed much of the risk for the financial markets. That's lead to a recovery for the U.S. economy. And it's widely expected that the U.S. economy is putting up decent growth numbers in the third quarter, which is now two-thirds over.

Oil's action yesterday is also telling. Yes, oil was down. It traded below $70 a barrel yesterday. But it's hard to call that bearish. After all, oil just hit a new high at $75 a few days ago. A little consolidation, or profit-taking is in order.

Frankly, the relatively small correction for oil prices seems bullish when you consider how important the China growth story is for oil prices. That could change, of course. But right now, there's' no reason to panic that the rally is over and the bear market is coming back.

*****The main concern for the bulls right now should be third quarter earnings. In my opinion, the low rate of revenue growth for corporations is the biggest threat to the Cash for Clunker Stock Rally.

According to Goldman Sachs, 46% of companies soundly beat earnings expectations in the second quarter. But only 23% did so with a healthy boost to revenues.

For the most part, earnings growth was a result of cost-cutting. And without a rise in revenues, there's no way for earnings to keep growing. Retail stocks will show this most clearly, as they are most dependent on consumer spending.

*****Before I finish for the day, I want to discuss Chinese stocks a little more. Yesterday, I mentioned that economist Andy Xie is calling the Shanghai Composite a bubble. And that may be.

But ever time I review the Chinese stocks that are in the SmallCapInvestor PRO (and believe me, I review them frequently), I'm encouraged by the low valuation and attractive growth prospects.

The highest forward P/E among them is 14.5. And the PEG ratios average around .5.

Now, it could be that aggressive lending in China is pumping revenues artificially, and that's showing up in P/E and PEG ratios. But SmallCapInvestor PRO Chinese stocks are well diversified between energy, biotech, commodity and technology. I'm not convinced that all of these stocks are being lifted by the same loose lending practices.

*****Also, I'm releasing a new micro-cap report to SmallCapInvestor PRO readers today. This report features my "best bet" micro-cap stocks to post triple-digit returns. If you'd like to get that report, or find out about the Chinese stocks we're holding, click here.  
 
Until tomorrow,

Ian Wyatt
Editor
Small Cap Investor daily

P.S. My book The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks is coming out on September 14 - visit www.smallcapbook.com to learn more. You can also follow me on http://twitter.com/ianwyatt 

Ian Wyatt is the Chief Investment Strategist of SmallCapInvestor.com and author of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks. You can learn more about his book and receive small-cap stock picks at www.smallcapbook.com.

Limelight Networks Inc. (Nasdaq:LLNW), Fuqi International Inc. (Nasdaq:FUQI) and BioDelivery Sciences International Inc. (Nasdaq:BDSI) are among the new 52-week highs in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: SIGA Technologies Inc. (Nasdaq:SIGA), Gander Mountain Co. (Nasdaq:GMTN), Virtus Investment Partners Inc. (Nasdaq:VRTS), Smith Micro Software Inc. (Nasdaq:SMSI), ShoreTel Inc. (Nasdaq:SHOR) and Kirklands Inc. (Nasdaq:KIRK).

Force Protection Inc. (Nasdaq:FRPT), Kirklands Inc. (Nasdaq:KIRK) and Cott Corp. (Nasdaq:COT) are among the new 52-week highs in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Calavo Growers Inc. (Nasdaq:CVGW), Fuqi International Inc. (Nasdaq:FUQI), SIGA Technologies Inc. (Nasdaq:SIGA), Carmike Cinemas Inc. (Nasdaq:CKEC), Gander Mountain Co. (Nasdaq:GMTN) and Orion Marine Group Inc. (Nasdaq:ORN).

Transcept Pharmaceuticals Inc. (Nasdaq:TSPT), ARCA biopharma Inc. (Nasdaq:ABIO) and Willis Lease Finance Corp. (Nasdaq:WLFC) are among the new 52-week highs in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Gander Mountain Co. (Nasdaq:GMTN), RehabCare Group, Inc. (Nasdaq:RHB), Orion Marine Group Inc. (Nasdaq:OMGI), BWAY Holding Co. (Nasdaq:BWY), Tree.com Inc. (Nasdaq:TREE) and Vanda Pharmaceuticals Inc. (Nasdaq:VNDA).

VNUS Medical Technologies Inc. (Nasdaq:VNUS), Virtus Investment Partners Inc. (Nasdaq:VRTS) and Gander Mountain Co. (Nasdaq:GMTN) are among the new 52-week highs in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: BioDelivery Sciences International Inc. (Nasdaq:BDSI), Cubic Corp. (Nasdaq:CUB), Seneca Foods Corp. (Nasdaq:SENEA), Orion Marine Group Inc. (Nasdaq:OMGI), Walter Investment Management Corp. (Nasdaq:WAC) and Ocwen Financial Corp. (Nasdaq:OCN).

The Russell 2000 (NYSE: IWM) posted a steep decline today on news of an unexpected decline in U.S. retail sales and a scare from the financial sector. The small-cap index tumbled 15.05 points, or 2.11%, to 697.43, its lowest closing level in more than one year. The Dow Jones Industrial Average (INDU) fell 277.04 points, or 2.17%, to 12,501.11.

On a year-to-date basis, the Russell 2000 is down 8.96%, while the Dow has lost 5.76% and the S&P 500 has retreated 5.95%.

The odds of a U.S. economic recession increased today and Wall Street responded with a major sell-off.

The bears dominated from the start of trading following news from the U.S. Census Bureau that retail sales in December fell 0.4%, defying expectations of a rise of 0.1%. Sales for November were revised down to a gain of 1% from an initially reported 1.2%.

Purchases excluding automobiles also surprised economists, falling 0.4% instead of posting an increase of 0.1%.

A pullback in consumer spending, which comprises about 70% of U.S. gross domestic product, is a scary development for an economy already besieged by stagnating home prices, higher energy costs and a tightening of credit.

So far this year we have seen the unemployment rate climb to 5% from 4.7% as hiring slowed down significantly in December 2007. It is perhaps not surprising then that on Monday credit card issuer American Express Co. (NYSE: AXP), announced that its card members have become more frugal.

The Russell 2000 (NYSE: IWM) futures are gaining ground again this morning as investors are cheering the Labor Department’s sanguine jobs report for the month of November.

For the month of November, Nonfarm payrolls grew by a better-than-expected 94,000 fueled by growth in the areas of  professional and technical services, health care and food services, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Economists were projecting jobs to grow by 70,000 from 166,000 jobs created in the month of October.

Employment, however, continued to languish in manufacturing and in several housing-related industries, including construction, credit intermediation and real estate.

The unemployment rate held at 4.7% percent, while the average hourly earnings rose by $0.08 over the month, the Labor Department reported as well.

Separately, investors brushed off downgrades by Merrill Lynch & Co., Inc. (NYSE: MER) to "sell" from "neutral" on American Express Company (NYSE: AXP), Capital One Financial Corp. (NYSE: COF) and Discover Financial Services (NYSE: DFS), noting that “deterioration in consumer credit and spending will continue to undermine the fundamentals of each and lead to share price declines.”

Investors are punishing shares of Gander Mountain Co. (Nasdaq: GMTN) after William Blair & Co. downgraded the specialty retailer of outdoor lifestyle products to “market perform” from “outperform” on what looks to be languishing economy and lackluster consumer discretionary outlook.

“Sales have remained vulnerable to weather trends and, overall, to the negative impact of a weakening economy on consumer discretionary spending, wrote William Blair analyst Bob Simonson in a research note today.

Despite the small cap’s legal battle triumph, which permitted the company to reenter the direct sales channel, coupled with successful efforts to enhance its management team and redirect its expansion program to southern markets with less volatile seasonal sales, the lackluster consumer spending outlook will take the forefront as the major driver behind the stock’s performance, according to Simonson.

“We suspect Gander’s same-store sales will struggle to achieve positive comparisons for at least several quarters, frustrating, at least temporarily, management’s turnaround plans and ability to convince investors that it is capable of achieving substantially higher margins and returns,” Simonson wrote.

Simsonson lowered his 2007 estimate to a loss of $0.05 per share from previously estimated earnings of $0.35 per share on account of a reduction in same-store sales to declines in a low- to mid-single-digit range from 3% to 5% gains in the second half. The consensus of eight analysts surveyed by Thomson Financial is for EPS of $0.02 per share.

The analyst also downwardly revised his third-quarter estimate to a loss of $0.02 per share from $0.21 per share, compared with $0.08 per share for the same quarter last year. Eight analysts surveyed by Thomson Financial are on average forecasting earnings of $0.06 per share

For fiscal 2008, Simonson said he believes consumer spending, especially for big ticket discretionary products and services, is likely to deteriorate even further making 2008 a tougher retailer environment than 2007. The analyst lowered his EPS estimate to $0.35 from $0.75. Eight analysts polled by Thomson Financial are projecting EPS of $0.26.

Shares of Gander Mountain (GMTN) lost $0.44, or 8.84%, to $4.54 at 1:21 p.m. Shares of Gander Mountain have been trading in the range of $4.30 to $16 for the past 52 weeks. 

Pinnacle Gas Resources, Inc. (Nasdaq: PINN), SCPIE Holdings Inc. (NYSE: SKP) and GoAmerica, Inc. (Nasdaq: GOAM) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage gainers:

New York & Company, Inc. (NYSE: NWY), Flamel Technologies S.A. (Nasdaq: FLML) and Protherics PLC (Nasdaq: PTIL) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $500 million.

Here are today's biggest percentage gainers:

Gander Mountain Co. (Nasdaq: GMTN), the nation's largest retail network of stores for hunting, fishing, boating, camping, marine and outdoor lifestyle products and services, reported fiscal second quarter results below Wall Street’s expectations.

For the three months ended August 4, the Saint Paul, Minn.-based company recorded a net loss of $9.7 million, or $0.48 per share, while seven analysts polled by Thomson Financial were expecting a loss of $0.16 per share on average. This compares with a net loss of $7.6 million, or $0.53 per share, in the second quarter of fiscal 2006.

Sales for the quarter increased 18.6% to $216.5 million from $182.5 million in the second quarter last year. Analysts were expecting sales of $202.23 million.

Computer hardware maker SBE, Inc. (Nasdaq: SBEI) is rising on heavy trading. Swedish mobile device developer Neonode received a large order from the Norwegian telecommunications company Telenor on Wednesday. SBE announced it’s merging with Neonode earlier in the year. The merger awaits shareholder approval until Aug. 10.

New Brunswick Scientific Co., Inc. (Nasdaq: NBSC) announced it is being taken private by the German laboratory products maker Eppendorf in a $110 million deal.

Solar cell products maker Amtech Systems, Inc. (Nasdaq: ASYS) said it’s booked $4.4 million in new orders.

These are the biggest percentage gainers in Wednesday's trading among companies with market capitalizations under $500 million:

The Russell 2000 (NYSE: IWM) and the Dow are higher following news of the latest corporate deal-making. At 11:37 a.m. ET the Russell 2000 was up 2.07 points, or 0.25%, to 839.55. The Dow Jones Industrial Average had added 59.42 points, or 0.44%, to 13,561.12.

Gander Mountain Co. (Nasdaq: GMTN), which operates retail stores specializing in outdoor lifestyle products and services, has won a long-standing dispute with rival Cabela’s Inc. (NYSE: CAB) over the right to use certain Gander Mountain trademarks in direct marketing, the St. Paul, Minn.-based firm said after Tuesday’s close. The decision is subject to an appeal. The stock is up $0.94, or 9%, to $11.03.

These are the biggest percentage losers among companies with market capitalizations under $500 million: