Tag - Crn

Cornell Companies Inc. (Nasdaq:CRN), Synutra International Inc. (Nasdaq:SYUT) and BWAY Holding Co. (Nasdaq:BWY) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Provident Bankshares Corp. (Nasdaq:PBKS), First California Financial Group Inc. (Nasdaq:FCAL), Acme United Corp. (Nasdaq:ACU), Bridgford Foods Corp. (Nasdaq:BRID), and SI Financial Group Inc. (Nasdaq:SIFI).

Stocks continued their drop from the opening on a pullback in energy prices and on rumors that small-cap General Motors (NYSE:GM) may file bankruptcy.  Some of today’s small-cap gainers were Gevity HR (Nasdaq:GVHR), Weight Watchers International (NYSE:WTW) and Genesco, Inc. (NYSE:GCO).

Other Market Watch highlights today included:

• Investors are pulling their money out of equities and piling into bonds and gold.  
• The market is extremely anxious ahead of Friday's February Labor Department report that is likely to show the loss of hundreds of thousands of jobs. 
• Stocks across the board were falling today, with those in the banking sector posting some of the steepest losses.
• The bad news out this morning weighed on stocks, and included a survey release that showed nearly 12% of mortgage holders are behind on payments or are in foreclosure.

Small Cap Gainers:

• Gevity HR up 85% On TriNet deal at 97% premium. See (Nasdaq:GVHR). 
• Weight Watchers International is up 16% on heavier-than-average volume. See (NYSE:WTW).
• Genesco, Inc. is up 10% after reporting positive Q4 profit results. See (NYSE:GCO).  
• Cornell Companies is up 5% after reporting a rise in Q4 profit. See (NYSE:CRN). 

Small Cap Losers:

• Solutia subsidiary moves forward with patent infringement suit; shares fall 53%. See (NYSE:SOA).
• Jackson Hewitt Tax Service falls 44% after guiding below estimates. See (NYSE:JTX).  
• GE Railcar tells Greenbrier it wants fewer railcars; GBX shares fall 31%. See (NYSE:GBX).  

Stocks continued their drop from the opening on a pullback in energy prices and on rumors that small-cap General Motors (NYSE:GM) may file bankruptcy.

At 11:30, the Russell 2000 (NYSE:IWM) was down 16.96, or 4.57%, at 354.34, while the Dow is down 3.16% to 6,658.88, and the S&P 500 is down 3.69% to 686.60.

The bad news out this morning weighed on stocks, and included a survey release that showed nearly 12% of mortgage holders are behind on payments or are in foreclosure.

GM auditors have said they have “substantial doubt” as to whether the battered automaker has the ability to continue, and GM said they may have to seek bankruptcy protection if its huge restructuring plan falls through. GM shares slid over 16% and are now under $2 per share.

Small caps bucking the downward trend today include Weight Watchers International (NYSE:WTW), up 18 on heavier-than-average volume. Cornell Companies (NYSE:CRN) is up over 10% after reporting a rise in Q4 profit, and also reporting positive Q4 profit results was Genesco, Inc. (NYSE:GCO), up 10% on the news.

*****Wednesday's rally could have been stronger, though you can't really be surprised that investors aren't jumping head first back in the stock market. Volume appears to have been solid, but not outstanding.

The most encouraging aspect to Wednesday's rally was leadership. We got leadership from technology and oil. If investors are buying in anticipation of an economic recovery, then oil necessarily must trade higher. Because any uptick in economic activity means increased demand for oil. And with OPEC production cuts taking hold and recent reserve draw-downs, the oil market has to be tight. 

*****Jason Cimpl, analyst for TradeMaster Daily Stock Alerts, made 10% on the US Oil Trust ETF (USO) last week. And the USO position he recommended . . .

Hancock Holding Co. (Nasdaq:HBHC), Midsouth Bancorp Inc. (Nasdaq:MSL) and Cash America International Inc. (Nasdaq:CSH) are among the new 52-week highs in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Southern First Bancshares Inc. (Nasdaq:SFST), Webster Financial Corp. (Nasdaq:WBS), Princeton National Bancorp Inc. (Nasdaq:PNBC), United States Lime & Minerals Inc. (Nasdaq:USLM), Cornell Companies Inc. (Nasdaq:CRN) and VSE Corp. (Nasdaq:VSEC).

Shares of Cornell Companies (NYSE:CRN) are on a six-month prison break, and investors aren’t about to issue an all-points bulletin.

Since sinking to $15.69 on March 10, the stock of the Houston-based provider of correction, detention, education, rehabilitation and treatment services for adults and juveniles has been on the run to higher ground. Cornell’s shares hit a 52-week high of $28.42 on Aug. 14, and since then have traded slightly below that level, closing Thursday at $27.66.

Cornell Companies shares have gained about 19% in value this year, but other prison operators aren’t faring as well: larger competitors Corrections Corp. of America (NYSE:CXW) and Geo Group (NYSE:GEO) are down 11% and 15%, respectively.

Two analysts surveyed by Thomson Reuters have Cornell Companies rated “outperform,” although a third, Cooley May of Macquarie Research Equities (USA), issued a “neutral” rating and a $24 price target. The Thomson Reuters median price target is $31.

Kevin Campbell, senior analyst with Avondale Partners, raised his price target Aug. 11 to $31 from $28, while keeping his rating at “market outperform.” In a telephone interview, he noted that privately operated prisons are likely to continue to gain favor, and that Cornell has a strong pipeline for growth.

“There is a big disconnect between the supply of beds and the demand for beds,” Campbell said. “State prisons are operating at about 105% of capacity, and federal facilities are at 137% of capacity.” And with more than 2.3 million Americans incarcerated, Campbell said, “Given the current economic environment … it’s difficult to justify building more prisons if your other services, such as healthcare, . . .

RHI Entertainment Inc. (Nasdaq:RHIE), Primeenergy Corp. (Nasdaq:PNRG) and CombiMatrix Corp. (Nasdaq:CBMX) are among the new 52-week highs in Wednesday's trading among companies with market capitalizations under $1 billion.      

Also included among the results: Peapack Gladstone Financial Corp. (Nasdaq:PGC), Applied Signal Technology Inc. (Nasdaq:APSG), Omega Flex Inc. (Nasdaq:OFLX), Thermadyne Holdings Corp. (Nasdaq:THMD), Cornell Companies Inc. (Nasdaq:CRN) and Integral System Inc. (Nasdaq:ISYS).      

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

Small-cap stocks opened sharply lower, pressured by a renewal of the credit crisis fears and reeling from a dramatic surge in crude oil that could crimp consumer spending habits and weigh on sentiment. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4.43, or 0.62%, at 715.12.

Financial shares sparked a wave of overnight selling after American International Group (NYSE:AIG) released earnings that disappointed investors and renewed concerns about debt write-downs among financial institutions. AIG tumbled 5% on the regular opening (which was better than the overnight showing), and the largest bank Citigroup (NYSE:C) was basically flat — also not as bad as overnight action — as the CEO spoke at an investor meeting.

There also was talk of asset allocation plays being back in vogue this morning, with investors shifting money away from equities and into treasury products. The old stock market adage “sell in May and go away” appeared to have a life this first full week of May trading.

In a Goldman Sachs research report released overnight, analysts say that the underlying shock of mortgage credit defaults is large and “still has a ways to go.” Although they say that some of the markets that have been beaten down will normalize and create positive spillover on sentiment in the broader economy, they said that excess housing supply, acceleration of home price declines and over leverage in the U.S. housing market will not go away anytime soon.
 
“We believe that such losses (from over leverage) imply further adverse surprises for balance sheets in parts of the financial sector, with correspondingly adverse effects on lending and economic activity. The focus of the pain is likely to shift away from subprime mortgages, where the markets are already discounting very large losses, to other residential mortgage debt, including prime mortgages. This is one reason why we are expecting a renewed slowdown in economic activity after the stimulus-fueled bounce in mid- to late 2008. In turn, it makes us fairly confident that . . .

The Russell 2000 (NYSE: IWM) is in positive territory following news of a report that mortgage-related writedowns may come to an end. At 3:26 p.m. ET, the small-cap index had added 11.63 points, or 1.74%, to 678.94. The Dow Jones Industrial Average (INDU) was up 78.73 points, or 0.65%, to 12,188.97.

Writedowns stemming from the mess in the subprime mortgage sector could reach $285 billion, rating agency Standard & Poor’s said in a report after the start of trading. The same report claims that the end of writedowns is in sight for large financial institutions.

Also helping the bulls gain control of the session is news of a bill proposed by House Financial Services Committee chairman Barney Frank that would allow the U.S. Federal Housing Administration to insure and guarantee mortgages that have been written down by lenders. The legislation, which has not yet been voted on, seeks to lower the number of foreclosures.

The Russell 2000 opened with a big decline but confidently moved into the green at about 12 p.m. ET.

Cornell Companies, Inc. (NYSE: CRN) CFO John Nieser said several factors benefited the fourth quarter that the company does not expect to be repeated in the subsequent first quarter. The fourth quarter included certain property tax reductions that accounted for earnings of about $0.02 per share, medical expense during the fourth quarter cost about $0.02 per share and an effective tax rate of 39.6% provided a benefit of about $0.02 per share. Nieser made the comments during a midday conference call.

The Houston-based provider of correction and detention facilities for juveniles and adults said before Thursday’s opening in a press release that it expects first-quarter earnings in the range of $0.27 to $0.31 per share. Wall Street analysts expect earnings of $0.31 per share.

For the full year, Cornell forecast 2008 earnings of between $1.21 and $1.27 per share. Analysts project earning $1.27 per share. The guidance assumes expansion among several facilities, CEO James Hyman said.

Nieser said the 2008 guidance assumes an effective tax rate of approximately 43%. The guidance also reflects general and administrative expenses of about $25 million for the fiscal year.

Before Thursday’s opening, Cornell reported that its fourth-quarter net income rose 15% to $5.4 million, or $0.37 per share, compared with $4.7 million, or $0.33 per share, a year earlier. Analysts expected earnings of $0.31 per share.

Quarterly revenue declined to $92.1 million, from $94.1 million during the same period of 2006. Analysts anticipated $91.8 million in revenue.

Providing services for those in difficult straits doesn’t seem like a popular business, and it isn’t. But it can be a profitable one, particularly when handled by Providence Service Corp. (Nasdaq: PRSC).

Providence delivers privatized social services in clients’ homes or communities; the company does not own any hospitals, correction facilities, treatment centers or group homes. Providence seeks business through state and local government initiatives, offering foster care and home- and community-based service alternatives in adult and juvenile justice, corrections, welfare systems, and Medicaid. As it continues to find room for more services, the company moved into the in-home tutoring space, workforce development and private probation services markets through several acquisitions completed in 2006.

Since its founding in 1996, Providence has grown from 1,333 clients to more than 70,000 in 318 locations in 36 states and the District of Columbia. Headquartered in Tucson, Ariz., the company now has market capitalization of $348 million. 

Just this month, Providence began operating in Canada by buying workforce-trainer WCG International Consultants Ltd., a Victoria, British Columbia-based company. Providence sees Canada as a growth spot, considering the country’s liberal benefits—including those for job training—and robust economy. There also are few if any home-based providers in western Canada, CEO Fletcher McCusker said on the second quarter conference call earlier this month. The company looks for other opportunities in British Columbia and in other provinces.

In the United States, there’s good reason to expect more growth. The trend is toward privatization of government services, and larger numbers of people are becoming eligible for these services because of income, emotional or educational disabilities, or court orders.

The old adage “Crime doesn’t pay” may not apply to investment opportunities. Companies that provide protection and security services are profiting from robust demand for their wares. Vehicle theft deterrent systems are experiencing strong demand as a result of the rising costs associated with stolen vehicles and a high incidence of vehicle theft. According to crime statistics from the Federal Bureau of Investigation, in the United States a car is stolen every 25.5 seconds. In 2005 (the latest year for which data were available) more than 1.2 million vehicles were stolen. Contrary to popular belief, most auto thefts are carried out by professional criminals who typically target popular upscale vehicles. These vehicles are chosen because of the profits thieves can generate from stripping them down and selling their component parts in a large black market for stolen car parts. Vehicle theft is the most costly property crime in the United States, costing consumers more than $8.6 billion annually. Many stolen vehicles end up being sold outside the United States, which is the reason that nearly 40% of vehicle thefts occur near U.S. port cities or border communities.

Auto theft is not just a U.S. problem. According to the Insurance Bureau of Canada, more than 170,000 vehicles are stolen in Canada each year, costing auto insurers and their policyholders more than $600 million annually in payouts. Worldwide, Interpol statistics indicate that more than 3 million vehicles are stolen each year with an estimated value approaching $21 billion.

Motorcycle thefts are rising at an alarming rate, up 135% since 2000. A motorcycle is stolen in the United States every 7.5 minutes. Motorcycle thefts cost consumers over $434 million annually and the problem is exacerbated by very low vehicle recovery rates – only about 25%. Another growing problem is construction equipment theft which, according to the National Insurance Crime Bureau, costs this country over $1 billion per year.

LoJack Corp.

One of the best known names in theft deterrence devices is LoJack Corp. (NASDAQ: LOJN). LoJack is the global leader in devices for tracking and recovering stolen vehicles.