Tag - Frz

The markets reversed yesterday's sell-off close up just slightly. The Dow closed at 9,539, up 30 points; the Nasdaq finished at 2,024, up 6 points; and the S&P 500 stood at 1,028, up just over 2 points. 

Stocks on the Russell 2000 finished up 3 points ending the day's session at 583, its highest close since October 2008. 

Advances lead declines by a margin of 3 to 2 on the NYSE; 5½ to 4 on the Amex; and 5 to 4 on the Nasdaq. 

Small-cap price gainers trading over one million shares include Willdan Group (Nasdaq:WLDN), up 120%; CAS Medical Systems (Nasdaq:CASM), up 84%; Nexstar Broadcasting Group (Nasdaq:NXST), up 38%; and Reddy Ice Holdings (NYSE:FRZ), up 35%. 

*****As if there had been any doubt, Fed Chief Ben Bernanke was nominated for a second term. This is a good move in my opinion. Especially now, switching horses midstream would seem like a dangerous move. Plus, my biggest gripes about the various stimulus plans and bailouts are with Congress, not the Fed.  

Congress is responsible for turning the bailouts into a cash-grab for their favorite constituents. Of course, some programs were necessary, like the efforts to modify mortgages to keep people in their homes. Even the Cash for Clunkers program helped automakers and dealers.

There's been some criticism that much of the rebate money in the Cash for Clunkers ended up going to foreign car makers. But Toyota, Honda and all the rest hire American workers to work in their U.S. based factories. And if Cash for Clunkers helps these companies keep workers on the payroll and off unemployment benefits, them it's a good thing.  

*****You gotta give economist Nouriel Roubini, aka Dr. Doom, credit for his consistency. Now that growth for the global economy is widely expected by economists, and home values are improving slightly, Roubini is now warning about the potential for another round of recession.  

To be fair, Roubini called the depths of the recession pretty accurately.
And even his double-dip recession scenario makes sense. He believes that food and energy prices are rising faster than demand should warrant. At some point, like oil at $100 a barrel, prices will further depress demand.  

Not only that, loose monetary policy will have to be tightened at some point. And it's likely that growth in the U.S. will only be in the 2% GDP growth range when the Fed is forced to raise rates.  

And, on top of that, unemployment is likely to remain high for a few years. That's a natural cap on demand and a big reason why GDP growth in the U.S. is expected to top out around 2%.  

Come to think of it, Roubini expectations sound a lot like mine. I call this situation "Managed America." And I'm currently focused on buying the companies that can grow in an environment of slow growth and weak demand. For more about Managed America and how you can profit form it, click HERE.  

*****If you're on the Preferred List, you love Goldman Sachs. But as an ordinary individual investor, you probably feel like Goldman represents all that's wrong with Wall Street.  

Regulators are investigating Goldman's practice of sharing short-term trading ideas with top clients that sometimes differ from the firm's stated fundamental stance.  
In other words, Goldman's analysts might tell top clients to short oil, even while Goldman is publicly bullish on prices.  

We all know that Wall Street's interests are rarely aligned with that of individual investors. This is just one more example of why it's critical that investors be careful out there.  

Best Regards,

Ian Wyatt
Editor
Small Cap Investor Daily

P.S. Speaking of Wall Street not looking out for your interests, yesterday I mentioned my Recovery Portfolio advisory service where I share with you what I'm investing in. I've put $100,000 of my own money on the line and share all my trades with readers. A bunch of you signed up yesterday to start profiting alongside me. If you missed yesterday's Small Cap Investor Daily or just want to learn more, CLICK HERE.

P.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.

Stocks are trading higher as of press time, 2:00 P.M. Eastern Time. The Dow was up 52 points at 9,331, the Nasdaq was up 15 points to 1,984, and the S&P 500 had pushed over 1,000 to 1,005, up 9 points.

The Russell 2000, the composite index of leading small-cap stocks, was at 565, up nearly 4 points.

Advancers lead decliners on all three major U.S. exchanges by a margin of 2 to 1 for the NYSE and AMEX and 5 to 4 on the Nasdaq.

Small-cap price gainers with over 1 million shares traded include Anika Therapeutics (Nasdaq:ANIK), up 36%; Reddy Ice Holdings (NYSE:FRZ), up 26%; and Renesola Limited (NYSE:SOL), up 18%.

*****"The question is not whether the dollar will weaken over time, but how it will weaken…"

That's what the CEO of bond giant PIMCO, Mohamed El-Erian, had to say as central bankers from around the world gather in Jackson Hole, Wyoming. They'll review the various strategies implemented to stave off the global financial crisis and discuss what they'll do as the world economy recovers.

In Ben Bernanke's case, we probably already know what he will, or won't, do. 

A student of the Great Depression, Bernanke understands how damaging a deflationary spiral can be. Spending slows, unemployment rises, businesses fail. And like a negative feedback loop, failing business leads to even higher unemployment and less spending.

Quite simply, Bernanke believes that, between inflation and deflation, inflation is easier to fight. So we should all expect Bernanke to allow, even invite, inflation to help rescue the U.S. economy.

*****Make no mistake, deflation is still a threat. So long as unemployment is on the rise, spending and prices will likely decline. And today's surprise jump in new unemployment claims should serve notice that, despite recent improvements in some unemployment numbers, the trend for unemployment numbers is still up.

The housing market has shown some improvement recently. But what will happen when the summer home-buying season ends? Inventories will rise, and any individual homeowners wanting to sell will be competing against fire sale foreclosure properties. Who's going to buy it seems likely that prices will be lower next spring? It's the sickening reverse of what we saw earlier this decade where people bid up home prices because they knew they needed to buy now before prices go higher. If they now believe prices will be lower in the future and they're not under some pressure to move, then they'll wait. And this will further drive down housing prices and will definitely continue to affect new home construction which will affect employment (negatively), and, well, you get the cycle.

*****It's widely believed that a weaker U.S. dollar will ultimately be good for the U.S. economy. That's because a weaker dollar makes U.S. exports more competitive. And the logic goes that more competitive exports could spark a revitalization of American manufacturing sector and put people back to work.

Of course, any such manufacturing renaissance will be funded by the deterioration of our wealth. In essence, the weak dollar will be a silent tax, a massive redistribution of wealth from the middle and upper class to the manufacturing sector.

What's more, the decline in purchasing power of the dollar is virtually unnoticeable. Unless of course, you travel overseas. The euro, currently fetching $1.42, could trade for $1.60 before the end of the year. It was as low as $0.90 earlier this decade.

No one will argue that a stronger manufacturing sector will be ultimately good for America. But it comes at a cost. The global playing field will level. And that means your investments will be the key to staying ahead of the game.

*****So whether you choose to subscribe to one of my advisory services and discover how we're beating the market and inflation investing in commodities or small cap stocks, or you prefer to stay with a trusted advisor or manage your own accounts, it is absolutely critical for your financial well-being that you remain diligent and keep the prevailing economic trends in mind when investing. While you can sometimes go against a trend and occasionally make a quick buck, the typical individual investor needs to follow the trends for long term portfolio profitability.

Until tomorrow,

Ian Wyatt
Editor
Daily Profit

P.S. Speaking of trends, have you been following what's happening China? After an enormous run-up since last fall Chinese stocks are pulling back. If you missed the last run-up this is you second chance to get it. I've recently added three high quality long term China-based holdings to my SmallCapInvestor.com PRO portfolio. To find out more about them and get the full research report CLICK HERE.

P.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.

Stocks finished lower today with the Dow ending seven straight trading sessions closing up. The Dow closed down 35 points to 8,881 while the Nasdaq was up 10 point to close at 1,926 and the S&P 500 edged lower by half a point to close at 954.

The Russell 2000 was up just over 3 points to close at 529.

Leading small-cap price gainers include Media General (NYSE:MEG) up 84% on news that its Q2 EPS was $0.90 versus an EPS loss of $25.12 last year. Much of the firm's gains were attributed to cost cutting measures and selling off a Panama City, Florida television station WMBB and Alexandria, Louisiana television station KALB. Both stations were purchased by Hoak Media.

Other small-cap gainers for today include Somaxon Pharmaceuticals (Nasdaq:SOMX) up 31%; Dynavax Technologies (Nasdaq:DVAX) up 24%; and Reddy Ice Holdings (NYSE:FRZ) up 22%.

Small-cap decliners include Hemispherex Biopharma (AMEX:HEB) down 27%; Aaron's Inc. (NYSE:AAN) down 14%; and Fuqi International (Nasdaq:FUQI) down 13% after announcing a proposed public offering of 4.5 million shares of common stock.

*****Fed Chief Ben Bernanke went before Congress yesterday to reassure lawmakers that he has an exit plan for his inflationary monetary policies. And apparently the markets were soothed by his plans, because everything rallied - bonds, stocks and the U.S. dollar. 

Most importantly, Bernanke has been pretty adamant that inflation is not a threat right now. Prices are still falling for homes and commercial real estate. Demand for oil is down. Unemployment is rising. None of these conditions suggests that more money will be entering the economy in the form of spending.  

What's his plan, you ask? He didn't say exactly. But it will involve higher interest rates and hopefully Treasury buybacks. 

*****Interestingly, Congress is very interested in problems with the commercial real estate market and what the Fed plans to do about them. Right now, $108 billion in commercial real estate is either in default, foreclosure or bankruptcy. That's the double the dollar amount since the start of the year.  

I'm not sure exactly what Bernanke can do about this. The Fed and the Treasury have made it possible for banks to make some money. That, in turn, will give the banks more ability to offset bad assets currently on their books and increase loss reserves for looming problems, like commercial real estate.  

But ultimately, we are seeing an actual deflationary spiral in the real estate sector. There's too much supply and not enough demand and prices are falling. Eventually, as we saw with my 7-Eleven story from yesterday, real estate will move from weak hands too small hands. But prices have to be attractive. Also, given my expectation that unemployment will remain high and the U.S. economy will grow weakly for a few years, it's highly likely that some real estate will simply remain dormant.  

*****Earnings season is rolling along. Apple (Nasdaq:AAPL) beat expectations handily. But the company guided revenues for the rest of the year slightly below consensus. I thought that might be a problem, but apparently not. The stock's up 4%, even after a 10% rally last week.  
 
 Yahoo! (Nasdaq:YHOO) and US Bancorp (NYSE:USB) have reversed early losses to trade in the green. After a long consolidation for stock prices, it looks like we might be breaking out for another upside move. But after the move we've seen over the last seven trading days, I can't help but to be a little skeptical.  
 
Best Regards,

Ian Wyatt
Editor
SCI Daily

After opening sharply lower, small caps continue to be rattled by Lehman Brothers’ weekend bankruptcy filing, Bank of America’s (NYSE:BAC) surprise acquisition of Merrill Lynch (NYSE:MER) and AIG’s unstable liquidity position. 

At 12:00 p.m. ET all indices remained in the red, though the Russell 2000 has come off its session lows. The small-cap index is down 14.12 or 1.96%, to 706.14, the Dow plunged 302.64, or 2.65%, to 11,119.35 and the tech laden Nasdaq fell 31.36, or 1.62%, to 2,224.67.

Financial jitters remain off the charts as stocks crumbled in light of the Federal Reserve’s decision to allow investment bank Lehman Brothers (NYSE:LEH) to fail. After a drawn out uphill battle against overexposure to subprime loans and a 94% plunge in share price this year, Lehman Brothers will close its doors.

“The U.S. government can’t and should not bail out every large financial institution that’s out there,” said BMO Capital’s Andy Busch. “Lehman had a lot of time to do everything in their power to show that this didn’t happen and they made the decision not to. The United States made the right decision not to be involved with that. At some point they needed to make the critical decision to do something like this … this doesn’t necessarily mean it’s a bottom to be formed for financial stocks, though it certainly takes us one step closer to that point. The ultimate harbinger is when housing prices end up bottoming.”

In line with Bank of America’s (NYSE:BAC) historical strategy, the financial services goliath bought strained, 94-year old Merrill Lynch for $50 billion in a surprise transaction over the weekend. The addition of Merrill gives the Charlotte, N.C.-based bank exposure to roughly every slice of the financial services industry. Shares of Merrill bolted 19% midday, while Bank of America's shares sold off 16%.

The future of Merrill and Lehman’s employees remains undecided. “The biggest losers in all this are the employees of Lehman, people who had had their life . . .

Reddy Ice Holdings Inc. (NYSE:FRZ) slid 12.4% to a new 52-week low this morning after the company announced it had suspended its quarterly cash dividends indefinitely and placed its executive vice president of sales and marketing on a leave of absence.

Dallas-based Reddy Ice said before the opening that no cash dividend will be declared for the period from July 1, 2008, to Sept. 30, 2008. The company had previously paid dividends at a rate of $1.68 per share on an annual basis.

The firm said the decision was “not taken lightly" and blamed weaker-than-expected operating results and costs related to ongoing antitrust investigations and related litigation.

Reddy also announced that Ben D. Key, the company's executive vice president of sales and marketing, has been placed on a paid leave of absence and relieved of his duties because he was found to have “likely violated company policies and is associated with matters that are under investigation.”

By mid-morning, Reddy Ice is at $6.87, down 12.4% from Friday’s close, after having reached as low as $6.32 earlier in the day. Previously, the stock had traded as low as 47.40 and as high as $29.50 during the past 52 weeks.

For detailed price information and news stories on Reddy Ice, click FRZ.

Seabridge Gold Inc. (Nasdaq:SA), Reddy Ice Holdings Inc. (Nasdaq:FRZ) and MAG Silver Corp. (Nasdaq:MVG) are among the new 52-week lows in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Affirmative Insurance Holdings Inc. (Nasdaq:AFFM), Macquarie Infrastructure Co. LLC (Nasdaq:MIC), Chindex International Inc. (Nasdaq:CHDX), Physicians Formula Holdings Inc. (Nasdaq:FACE), Trico Marine Services Inc. (Nasdaq:TRMA) and North Central Bancshares Inc. (Nasdaq:FFFD).

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

Royal Bank Pennsylvania (Nasdaq:RBPAA), CryptoLogic Ltd. (Nasdaq:CRYP) and Reddy Ice Holdings Inc. (Nasdaq:FRZ) are among the new 52-week lows in Thursday's trading among companies with market capitalizations under $1 billion.   

Also included among the results: China East Air (Nasdaq:CEA), Bancorp Bank (Nasdaq:TBBK), Physicians Formula Holdings Inc. (Nasdaq:FACE), Radiant Systems Inc. (Nasdaq:RADS), HMN Financial Inc. (Nasdaq:HMNF) and ExlService Holdings Inc. (Nasdaq:EXLS).        

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

China East Air (Nasdaq:CEA), TechTarget Inc. (Nasdaq:TTGT) and Reddy Ice Holdings Inc. (Nasdaq:FRZ) are among the new 52-week lows in Tuesday's trading among companies with market capitalizations under $1 billion.   

Also included among the results: China Cablecom Holdings (Nasdaq:CABL), Gilat Satellite Networks Ltd. (Nasdaq:GILT), Nashua Corp. (Nasdaq:NSHA), China Southern Airlines (Nasdaq:ZNH), CFS Bancorp Inc. (Nasdaq:CITZ) and Global Partners LP (Nasdaq:GLP).   

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

51Job Inc. (Nasdaq:JOBS), Orthofix International (Nasdaq:OFIX) and Reddy Ice Holdings Inc. (Nasdaq:FRZ) are among the new 52-week lows in Thursday's trading among companies with market capitalizations under $1 billion.  

Also included among the results: Hickory Tech Corp. (Nasdaq:HTCO), H&E Equipment Services Inc. (Nasdaq:HEES), Maxcom Telecom (Nasdaq:MXT), Arlington Tankers Ltd. (Nasdaq:ATB), MAG Silver Corp. (Nasdaq:MVG) and Sinclair Broadcast Group Inc. (Nasdaq:SBGI).   

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

Shares of Reddy Ice Holdings Inc. (NYSE:FRZ) hit a new 52-week-low today after the Dallas-based ice maker this morning posted decreased second-quarter earnings that widely missed at least one analyst’s estimate.

For the quarter ended June 30, Reddy earned $5.7 million, or $0.26 per share, compared with $10.6 million, or $0.48 per share, in the prior-year period. One analyst polled by Thomson First Call had estimated earnings of $0.51 a share for the quarter.

Included in the results are $4.6 million of costs related to ongoing antitrust investigations and related litigation.

Emergent BioSolutions Inc. (Nasdaq:EBS), Citi Trends Inc. (Nasdaq:CTRN) and 51Job Inc. (Nasdaq:JOBS) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $1 billion.      

Also included among the results: ExlService Holdings Inc. (Nasdaq:EXLS), Micrus Endovascular Corp. (Nasdaq:MEND), Perficient Inc. (Nasdaq:PRFT), Reddy Ice Holdings Inc. (Nasdaq:FRZ), Overhill Farms Inc. (Nasdaq:OFI) and Key Technology Inc. (Nasdaq:KTEC).       

Here are the biggest percentage losers among small caps:   

Small-cap stocks took it in the chin Wednesday, with retail stocks and financial shares falling out of favor with investors amid a gloomy economic environment and the ongoing credit crisis. The Russell 2000 (NYSE:IWM) lost 5.86, or 0.80%, to 730.71.

The S&P Retail Index crumbled nearly 2% to the second-lowest close since late March. Big-name department stores like Dillards (NYSE:DDS), JC Penney (NYSE:JCP), Nordstrom (NYSE:JWN), Kohls (NYSE:KSS), Macy’s (NYSE:M) and Sears (Nasdaq:SRLD) were all deep in the red

In the financial arena, the biggest percentage loser of the day was MF Global (NYSE:MF), the giant futures and commodities brokerage firm that was split off from Man Group last year. MF shares collapsed nearly 40%, shrinking its market cap down to about $945 million in the process. MF projected a significant decline in revenue and said it would raise $300 million to repay debt via $150 million in preference shares and another $150 million in convertible senior notes.

Although the steep freefall in MF shares was an attention grabber, the bears were active throughout the financial sector. In fact, late in the day seven of the top 10 percentage declines on the Nasdaq were either banks or financial firms. Tuesday’s slide in regional banks remained in play today, with Fifth Third Bancorp (Nasdaq:FITB) sinking nearly 20% after the firm said it would raise at least $2 billion in capital and slash dividends to help overcome credit losses.

The Dow slipped to the lowest daily close since mid-March, when the market was grappling with the collapse of Bear Stearns. For the recent move, the Dow peaked earlier than the Russell 2000, hitting a high on May 19 at 13,136. From the May 19 high to today’s low, the Dow is off 8.7%, while the Russell is only down 2.9% over that same time frame (although the Russell is off 4.8% from the early . . .

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) failed to hold mid-morning gains and slipped into negative territory, as investors’ concerns about weak job reports sent stocks plunging. Before the opening, the Labor Department reported that payrolls plunged a greater-than-expected 63,000 in February, heightening recession fears and causing gyrations early in the session.

The Russell 2000 shed 0.40%, or 2.67 points, to 660.11. The Dow Jones Industrial Average lost 1.22%, or 146.7 points, to 11,893.69.

Economists were forecasting an increase in payrolls of 25,000 for February. Today’s data come on the heels of a larger-than-anticipated decline in payrolls in January of 17,000.

The unemployment rate was essentially unchanged at 4.8%, compared with 4.9% in January. Economists were projecting the unemployment rate to edge up to 5%.

Average hourly earnings rose by $0.05, or 0.3%, over the month, according to the Labor Department.

The Federal Reserve’s statement this morning that it will increase the amount of loans it makes to banks failed to calm concerns and buoy the market. Specifically, the central bank augmented auctions of four-week funds to banks to $50 billion from its original $30 billion planned for March 10 and March 24. The Fed also said it will avail an additional $100 billion through repurchase agreements.

In a statement, Fed officials also stipulated that the central bank will continue auctions for at least six months, and would increase the size of such auctions further if needed.

Reddy Ice Holdings, Inc. (NYSE: FRZ) are in a freefall after the maker and distributor of packaged ice revealed that federal officials searched the company’s corporate office in Dallas. The execution of the search warrant was made by the Department of Justice’s Antitrust Division in connection with an investigation of the packaged ice industry. Reddy Ice Holdings is the largest U.S. manufacturer of packaged ice.

Reddy Ice initially disclosed that its offices were searched by the DOJ but declined to provide a reason. The initial stated prompted Wachovia to downgrade Reddy Ice shares to “market perform” from “outperform.” In a note to investors, Wachovia said shares will likely trade erratically until more details are available.

Reddy said it formed an independent committee to conduct an internal investigation.

In afternoon trading, FRZ shares are plunging to new year lows — down 35.79%, or $8.18, at $14.93. Over the last 52 weeks, shares have ranged from $11.73 to $32.31.