Tag - Algn

The healthcare market is one of the strongest areas in the American economy. U.S. healthcare system costs have doubled over the past ten years. And I think they will double again in another 10 years.

And we know why it's increasing: the great population boom of the post WW2 era is now resulting in a retirement boom. But it's also a hip replacement boom. And a cardiac surgery boom.

But it's a healthcare boom as much as anything else. Some folks might decry this situation and point to rising health care spending in a debt laden country as proof that the sky is falling or the end of America is coming.

Stocks traded downward today with fresh worries about the economy. Stocks put in their steepest decline in six weeks with nearly all industries getting pulled down on investor concerns of consumer reluctance to spend. Indeed, American consumers have closed their wallets so tightly that the personal savings rate, as released by the Bureau of Economic Analysis, was over 5% at the end of Q2 2009. This contrasts to 1% at the beginning of the economic downturn.

The Dow closed down 186 to finish at 9,136 with Alcoa (NYSE:AA), American Express (NYSE:AXP), Caterpiller (NYSE:CAT), and DuPont (NYSE:DD) the leaders in the declining stock prices in the index.

The Nasdaq finished the trading session at 1,931, down 55 points and the S&P 500 finished at 980, down 24 points.

The Russell 2000, a composite of leading small-cap stocks, ended the day at 548, down 16 points.

Small-cap price leaders today include Align Technology (Nasdaq:ALGN), up 29%; Protalix BioTherapeutics, (Amex:PLX), up 11%; and CryoLife (NYSE:CRY), 10%.
 
*****30 Hour work week the new normal

Economic analysts were out in full force last week as headline data pointed to a recovery in employment. Although people may have started finding jobs, we question the quality of work being found by new workers.

After the Japanese financial crisis in the late 1980s, many of Japanese workers ended up working on temporary jobs that didn't have good salaries and benefits. Perhaps the U.S. is entering a similar phase.

Over the past year and a half companies have slashed budgets and expenses. Businesses are more likely to hire low cost temporary help until the economy starts to show significant changes. Part-time jobs usually have lower pay and part-time jobs don't have many of the benefits that full-time jobs have.

In past recessions, businesses would hang onto valued employees and many times increase their salary levels. This recession has proven different. There is a large number of highly educated people competing for menial jobs. This has given businesses an opportunity to hire skilled workers at bargain rates.

*****An insider's look at the housing numbers.

Inside Mortgage Finance sponsored a nationwide survey of 1,556 real-estate agents in mid-June. Their results bring up important data that contradicts many of the figures we have been reading in the past few weeks.
They unanimously acknowledge that the low end of the market is cranking. This area of the market is primarily driven by foreclosures, first-time buyers, and investors. The numbers show that near 43% of homebuyers are first-time homebuyers, 29% are current homeowners, and another 29% are investors. 
Unfortunately, their findings show that the high end of the market is dead. This area of the real estate market remains very weak because sellers are still in denial, existing homeowners aren't trading up, and there are fewer foreclosures and forced sales at the high end.

For those who already own houses, "affordability" is not a particularly meaningful measure of housing-market health. The main reason is because existing home owners cannot sell their current property at break-even levels, let alone a little profit.

*****No Inflation

Last week CPI came in about as expected. Although prices are rising slightly, CPI remains negative taking into account year over year changes.

A sign of confidence that U.S. inflation should remain under control is that foreign governments have been switching out of shorter-term U.S. government bills and into longer-dated bonds. Last week, when the U.S. government issued $75 billion in new bonds, 10-year notes made up the largest percentage since 2005.

*****Managed America

So there's where we are: shorter work weeks (read: less take-home pay), home values gone bust, homeowners stuck in their homes, and inflation initially non-existent. These are some of the themes I recently shared with investors in my Managed America: Investing in the New Economic Reality. During the presentation I shared with investors some of our top holding for the new economy and the strategies we'll employ for profits in the months and years ahead. The presentation is in replay mode and is open access (free): click HERE to watch now.

Regards,

Ian Wyatt
Editor
Small Cap Investor Daily

 

Align Technology Inc. (Nasdaq:ALGN), Pinnacle Airlines Corp. (Nasdaq:PNCL) and CryoLife Inc. (Nasdaq:CRY) are among the biggest percentage gainers in Monday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Jacksonville Bancorp Inc. (Nasdaq:JXSB), China Biotics Inc. (Nasdaq:CHBT), Herley Industries Inc. (Nasdaq:HRLY), RG Barry Corp. (Nasdaq:DFZ), LSB Corp. (Nasdaq:LSBX) and Cedar Fair, L.P. (Nasdaq:FUN).

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.

Align Technology Inc. (Nasdaq:ALGN), SonicWALL Inc. (Nasdaq:SNWL) and Healthways Inc. (Nasdaq:HWAY) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: China Sunergy Co Ltd. (Nasdaq:CSUN), CNinsure Inc. (Nasdaq:CISG), Exelixis Inc. (Nasdaq:EXEL), Energy Conversion Devices Inc. (Nasdaq:ENER), optionsXpress Holdings Inc. (Nasdaq:OXPS) and Interactive Brokers Group Inc. (Nasdaq:IBKR).

Bancorp Bank (Nasdaq:TBBK), America's Car-Mart Inc (Nasdaq:CRMT) and Methode Electronics Inc (Nasdaq:MEI) are among the biggest percentage gainers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Sonic Corp (Nasdaq:SONC), Measurement Specialties Inc (Nasdaq:MEAS), Codorus Valley Bancorp Inc (Nasdaq:CVLY), Align Technology Inc (Nasdaq:ALGN), FGX International Holdings Ltd (Nasdaq:FGXI) and Financial Institutions Inc (Nasdaq:FISI).

Hansen Medical Inc. (Nasdaq:HNSN), Heritage Commerce Corp. (Nasdaq:HTBK) and Insituform Technology Inc. (Nasdaq:INSU) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: IPC Holdings Ltd. (Nasdaq:IPCR), Align Technology Inc. (Nasdaq:ALGN), Silver Standard Resources Inc. (Nasdaq:SSRI), BankAtlantic Bancorp Inc. (Nasdaq:BBX), US Airways Group Inc. (Nasdaq:LCC) and Auburn National Bancorp Inc. (Nasdaq:AUBN).

Here are the biggest percentage gainers among small caps:

In one of the more jarring and widely anticipated stock market openings in history, small-cap stocks plummeted to fresh bear market lows while hitting the lowest point since August 2003. The freefall was precipitated by a collapse in overseas markets amid profit warnings in Asia, ongoing worries about a worldwide economic slowdown and talk of forced liquidation. Today’s small-cap gainers are Insituform Tech (Nasdaq:INSU), Align Technology (Nasdaq:ALGN) and Hittite Microwave (Nasdaq:HITT).

Other Market Watch highlights today include:

• We are heading toward one of the worst months in stock market history and while everyone seems to be trying to peg the bottom, there are no signs yet that one is in place.  
• The yield on benchmark 10-year notes was down more than 4%.   The yield on 30-year bonds tumbled to the lowest in history since the product issuance began back in 1977.
• With equity markets in panic liquidation mode and investors scrambling for a safe-haven outlet, demand for Treasury products has been extreme

Small Cap Gainers:

• Insituform Tech posted a 66% spike in Q3 EPS that beat the Street, as it made progress in its N. Am sewer rehabilitation operations. (Nasdaq:INSU). 
• Align Technology will cut 111 jobs; shares surge 20%. See (Nasdaq:ALGN).  
• Hittite Microwave up 4%, marginally ahead of the bell: posted Q3 EPS above the Street. See (Nasdaq:HITT).  
• Take-Two Interactive soaring 110% in pre-market trading, yet no fresh news.  See (Nasdaq:TTWO).  

Small Cap Losers:

• Avid Technology Inc. is down 25% following soft earnings news See (Nasdaq:AVID).  
• American River Bankshares tumble 22% on no fresh news. See (Nasdaq:AMRB).
• Central European Media Enterprises Ltd. is off 22%, sinking to fresh 52-week lows
See (Nasdaq:CETV).  
• Vimpelcom skids 21%, as rumors swirl that the CEO will resign. See (NYSE:VIP).  
• China Eastern Airlines Corp. Ltd. is down 17% and is another example of a firm that has collapsed from triple-digit stock values a year ago. See (NYSE:CEA). 

:CEA

Orthodontics manufacturer Align Technology Inc. (Nasdaq:ALGN) is off 15% in pre-market trading today after announcing after Tuesday’s close a decline in its second-quarter earnings. Net profit was $4 million, or $0.06 per share, compared to net profit of $13.6 million, or $0.19 per share, for the same quarter a year earlier. Net revenues for the quarter ended June 30 were $79.9 million, compared with $76.6 million for the same period a year ago. The company said it encountered challenges from the weak economy and dips in consumer spending. The Santa Clara, Calif.-based company said it would take measures to reduce operating expenses.

“As consumer spending has continued to soften, so has our outlook for revenue growth. As a result, we're reducing overall company spending and slowing headcount growth while preserving the important investments in strategic priorities. Unfortunately, valued employees will be affected, and those are decisions that the management team and I do not take lightly. These actions are only the first steps in actively reducing our cost structure and moving towards a financial model with greater operating leverage,” said Thomas M. Prescott, president and CEO, in a statement.

Ahead of the opening, shares are at $9.52, down $1.67 from Tuesday’s close.

Solarfun Power Holdings Co., Ltd. (Nasdaq:SOLF), Super Micro Computer, Inc. (Nasdaq:SMCI) and Silicon Motion Technology Corp. (Nasdaq:SIMO) are among the most actively traded companies in Wednesday's pre-market trading among those with market capitalizations under $750 million.

Salary.com, Inc. (Nasdaq:SLRY), Align Technology, Inc. (Nasdaq:ALGN) and DemandTec, Inc. (Nasdaq:DMAN) are also among the most actively traded small-cap companies in pre-market trading.

Here are the most actively traded small-cap companies in Wednesday's pre-market trading: