Tag - PLA

"Playboy Enterprises (NYSE:PLA) is a speculative stock, with plenty of potential but also downside risk," suggests Alex Green. In The Oxford Club, he eyes the firm's turnaround potential.

"When you consider that Playboy Enterprises has a market capitalization of a little over $100 million, you begin to see how undervalued this stock is.

"In 2006, Playboy opened an entertainment venue at the Palms Resort in Las Vegas, including a casino and nightclub. Early results are good given the current economy. The company is in the process of building its second such destination in Macau.

"Moreover, Playboy is under new management. Hugh Hefner’s daughter Christie – after struggling at the helm for years – finally stepped down last year. Jerome Kern is now interim Chairman and Chief Executive.

"Kern says the company will focus on licensing and casinos and cut the money-losing publication’s frequency, reduce its circulation, or raise prices. (Fortunately, publishing comprises less than a quarter of the company’s revenue base.)

"We’ve more than doubled our money in Playboy since we began recommending it a few months ago. However, selling at less than 40% of net sales, Playboy is essentially a value play and potential turnaround situation."
 

Small-cap stocks extended the morning slide into midday trading, as pressure from a weak economy continues to take a toll on commodity, retail and financial stocks, overshadowing even aggressive rate cuts out of Europe overnight. Today’s small-cap gainers are Lumber Liquidators' (NYSE:LL), Global Cash Access (NYSE:GCA) and American Equity's (NYSE:AEL).

Other Market Watch highlights today included:

• Thomson-Reuters October same-store sales index was off 0.7%, and they pegged today’s retail returns as the worst monthly results in a decade.  
• Energy exporters that depend on demand from big consumers were taking a beating, with the Energy Select Sector SPDR Fund down 5.5%. 
• The IMF said that developed economies were on track for a full-year contraction for the first time since World War II.  
• The malaise continued to bruise commodity markets, with crude oil prices tumbling toward $60 a barrel, or the lowest prices since March.  
• The Russell 2000 is down 2% in midday trading.  

Small Cap Gainers:

• Lumber Liquidators' income up 48% in Q3; shares soar 18%. See (NYSE:LL). 
•  Global Cash Access Holdings reports successful Q3 results; shares climb 25%. See (NYSE:GCA).  
• American Equity's Q3 2008 operating income increases 41%; shares pop over 33%. See (NYSE:AEL).   
• Global Crossing Ltd. rallied 19% as the IP solutions provider also got an earnings-related lift. See (Nasdaq:GLBC).
• Simcere Pharmaceutical Group reports rise in Q3 profit, reaffirms FY08guidance. Shares up 18%. See (NYSE:SCR).  

Small Cap Losers:

• LandAmerica dives 33% on delayed third-quarter earnings. See (NYSE:LFG).
• Georgia Gulf Corporation slips to loss in Q3; shares down 28%. See (NYSE:GGC).  
• SRA International down 26% on Cowen & Co. downgrade. See (NYSE:SRX).  
• Playboy Enterprises sees sharp ad sales drop, shares tumble 22%. See (NYSE:PLA).  

Small-cap stocks took a mild dip Friday, pressured by pre-weekend profit-taking from traders who were eager to cash in on the recent upswing, by jitters over sagging consumer sentiment and by soaring crude oil prices. The Russell 2000 (NYSE:IWM) closed down 2.21, or 0.30%, at 741.17. Despite the sloppy finish Friday, small-cap shares still notched the highest weekly close of 2008.

Small-cap shares have been a leading performer of late versus large-cap index products, reminiscent of the long bull market run from 2002 to 2007 in which small-cap products paced the way toward record highs. However, the Russell 2000 did close lower Friday while the S&P 500 was up slightly, which is a mild caution sign looking ahead to next week’s action.

In addition to the aforementioned profit-taking desire, the University of Michigan consumer sentiment survey tumbled to 28-year lows for the month of May when the data was released Friday morning. The lows underscore the fragility of the recent stock market rally, especially when consumer spending funds are crimped by soaring gasoline and food prices.

Crude oil took flight Friday, climbing to nearly $128 dollars a barrel. Although some energy stocks stand to benefit from higher crude prices, for the most part these record levels are seen as an overall negative to stocks because the economy is still powered by spending. Goldman Sachs, a key investment banking and research firm, on Friday raised its price targets on crude oil, which can only send shivers down the consumer spine – especially heading toward the start of the summer holiday driving season in the United States.

The stock market appeared to push through Friday’s “double witching” options expiration without too much volatility. Once the S&P 500 moved well past the concentrated strike at 1,400 late this week, it took away some of the excitement surrounding expirations.

Firstservice (Nasdaq:FSRV), Playboy Enterprises (Nasdaq:PLA) and Preferred Bank (Nasdaq:PFBC) are among the new 52-week lows in Friday's trading among companies with market capitalizations under $750 million.

TICC Capital Corp (Nasdaq:TICC), Taylor Capital Group Inc (Nasdaq:TAYC) and Imperial Capital Bancorp Inc (Nasdaq:IMP) are also among the new 52-week lows.

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

Inter Atlantic Financial Inc (AMEX:IAN), Collective Brands Inc (NYSE:PSS) and HMN Financial Inc (NYSE:HMNF) are among the new 52-week lows in Tuesday's trading among companies with market capitalizations under $750 million.

Playboy Enterprises Inc (Nasdaq:PLA), Interline Brands Inc (NYSE:IBI) and DSP Group Inc (NYSE:DSPG) are also among the new 52-week lows.

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

Playboy Enterprises, Inc. (NYSE: PLA) CEO Christie Hefner said the struggling adult entertainment company cannot provide guidance and is in the middle of important transitions. Hefner made the comments during a midday conference call.

“As we’re working through these transitional issues that include both the murkiness in publishing as well as the timing of traction in what we’re doing in digital, we don’t feel we have the visibility to be helpful yet,” Hefner said.

The chief executive said there is “untapped potential” in online and mobile media. She said Playboy plans to revamp its website with changes that will provide “meaningful growth” in the fourth quarter.

The company’s flagship magazine has been hurt by increasing postage, paper and ink costs, Hefner said, and the domestic magazine business remains “extraordinarily difficult.” The adult entertainment firm is offsetting domestic losses by launching higher-margin international editions, she said. Additionally, the cigarette company R. J. Reynolds is halting all print advertising in 2008, which Hefner said will eliminate about 20 ad pages from Playboy.

Playboy’s American television segment is facing challenges from “intensely competitive market made possible by the advent of on-demand technology.” The competition has led to a decline in market share.

“We’ve seen tremendous pressure on revenues caused by continuing declines in pay-per-view orders as cable operators have all but abandoned that delivery option in favor of delivery-on-demand,” Bob Meyers, Playboy’s president of media, said. “We will fight aggressively for every buy through a strong product lineup and improved scheduling in merchandising.”

Opportunity could be lurking in shares of small-cap New Frontier Media Inc. (Nasdaq: NOOF) after the stock was hammered recently in response to a weak earnings report.

Adult entertainment distributor New Frontier Media chose a bad time to report lackluster results. Amid an already skittish stock market, the small-cap company reported weaker-than-expected fiscal first quarter results on August 8, sending the stock tumbling. After putting together a solid 2006, New Frontier shares have now declined almost 40% year-to-date as investors have grown cautious about the company’s prospects.

While not nearly as well known as Playboy Enterprises, Inc. (NYSE: PLA), Boulder, Colo.-based New Frontier is a leader in the production and distribution of adult themed and general motion picture entertainment. Founded almost a decade ago, the company’s programming is today distributed by virtually every major cable and satellite TV operator via pay-per-view (PPV), video-on-demand (VOD) and emerging technologies like Internet Protocol TV (IPTV). All told, New Frontier’s programming collectively reaches 139 million households.

New Frontier entered the adult themed film production business with the acquisition of MRG Entertainment in February 2006 for $20 million in cash and stock. The MRG deal has expand New Frontier’s portfolio of higher margin, less explicit erotic content. New Frontier has also been able to leverage its existing distribution relationships for distributing MRG Entertainment’s content. It was MRG, though, that was a driver behind New Frontier’s recent weak earnings report.

The Russell 2000 and the Dow snapped a three day losing streak, despite a rough start on news of a decline in orders for durable goods. The Russell 2000 added 12.33 points, or 1.49%, to finish at 838.46. The Dow Jones Industrial Average gained 90.07 points, or 0.68%, to 13,427.73.

Trading got off to a sour start on news that orders for durable goods fell 2.8% to $213.02 billion in May, according to the U.S. Commerce Department. Economists were forecasting a drop of 1.1%. Durable goods are goods intended to last at least three years.

However, investors became bullish in the early afternoon, as the yield on the U.S. government’s 10-year Treasury fell.

The small-cap Russell 2000 index joined the other major U.S. indices in losing ground as investors consolidated their gains in anticipation of Wednesday’s meeting of the Federal Reserve.  Among specific small-cap stocks, Cutera, Inc. (Nasdaq: CUTR) said its net income missed expectations, while Playboy Enterprises Inc. (NYSE: PLA) reported a strong first quarter.

The Russell 2000 lost 0.97 points, or 0.12 percent, to 830.90.  The Dow Jones Industrial Average snapped its five-day winning streak, losing 3.90 points, or 0.03 percent, to 13,309.07.