Tag - Hos

Shippers keep showing up in the top small cap movers. Last week we saw FreeSeas (Nasdaq:FREE), Hornbeck Offshore Services (NYSE:HOS), and Genco Shipping & Trading (NYSE:GNK) putting up big gains. Most economists peg this to the ridiculously low shipping rates from earlier this year and to the boom in commodities trade in emerging markets.

Today's trading has another shipper leading the pack: TOP Ships, Inc. (Nasdaq:TOPS). The Athens, Greece based firm is up 41.4% to $3.24 in today's trading through press time (1:30 P.M. Eastern).

Look for other small cap shippers to "chart new territory" over the coming months as shipping rates increase and global trade gets back on track.

Another repeat for small cap gainers is Green Plains Renewable Energy (Nasdaq:GPRE). Green Plains gapped up yesterday from Friday's close and returned a nice 13% one day gain for investors. It hit $9.38 a little after 11:30 A.M. (Eastern) before falling back to $7.78, a 24.9% gain since yesterday's close.

(Special note: if you're looking for how to profit from all the shippers putting up double digit returns, check out my new report:  pro.smallcapinvestor.com/shipping ) 

Small cap losers for today include EXFO Electro-Optical Engineering (Nasdaq:EXFO), down 19.3%, on news of the recent quarter loss and guidance for the next quarter that revenues for Q3 2009 will come in below the forecasted range. Other decliners include Track Data (Nasdaq:TRACD) down 18%, NewStar Financial (Nasdaq:NEWS) down 15.3%, and Daktronics (Nasdaq:DAKT), maker of large screen displays and electronic scoreboards for stadiums and theaters down 14.1% on news of Q4 profits falling short of Street expectations and indications that any recovery will not be noticeable until 2011.

*****Perhaps you've heard the phrase "the sins of the father shall be visited on the son." Well, here's a case where that's definitely not true:

Yesterday, The Travelers (NYSE:TRV) insurance took the place of its parent Citigroup (NYSE:C) on the Dow Industrials Average.

Reuters reports that in 2002, when Citigroup spun off The Travelers, former Citigroup CEO and founder Sandy Weil said he wanted to focus on  "…important opportunities to invest our capital really on a global basis, in much more high-growth businesses."

Apparently that didn't work out too well for Citigroup. The Travelers, on the other hand, is being hailed as an icon of financial stability. Oh, the irony.

*****The Federal Highway Administration said that the number of miles driven collectively by Americans dropped another 3.1 billion miles in March 2009 from a year earlier.

3.1 billion is a big number. So if Americans are driving 3 billion fewer miles a month, it means 36 billion fewer miles a year. Sounds like a huge drop in demand for oil, right?

Well, we'd have to know how many miles are driven a year to be sure. And the article reporting this data conveniently left the total out. That meant I had to do more work…

In perusing the Federal Highway Administration website, I actually couldn't find the raw total miles for 2008. But I found the cumulative estimate made in December of 2008, so that will have to do. The number? 2.9 trillion miles!

Now that's a huge number. (To put it in perspective that would be 15,591 out and return trips to our Sun-it would be like if you travel to and from the sun 42 times day. This is NOT a small number.) And 3.1 billion a month, or even 36 billion a year, kind of pales in comparison, doesn't it?

*****I don't mean to dismiss how much demand destruction has impacted oil prices. But like any market, the oil market clearly over-corrected when it sent oil prices to $33 a barrel.

Have oil traders over-reacted in the opposite direction with oil at $68 a barrel. Maybe. But then again, there's a reason that oil traders are content to pay the lease rates on tankers to store unsold oil. They clearly believe they'll get higher prices later: much higher prices.

*****I discovered yesterday afternoon that the TradeMaster video from technical analyst Jason Cimpl didn't work quite right. So I'm going to make it up to you today by offering you Jason's latest video masterpiece.

This video features the two latest trades Jason issued for his TradeMaster Daily Stock Alerts readers. The two positions featured in the video were just bought yesterday. I will follow them here in Daily Profit so you don't miss Jason's sell signal if you choose to enter either of these trades.

You can view the video HERE.

Leading today's rally in small cap stocks is FreeSeas, Inc. (Nasdaq:FREE), a Greek based operator in international dry bulk shipping, on news that Q1 earnings of $0.29 per share beat analysts estimates by $0.04 or $0.24 per share. The company attributes much of this to the upward pricing in the Dry Bulk Index. Further statements from the company indicate management's expectation to achieve profitability throughout 2009. Shares are up 26% through morning and early afternoon trading to $2.76.

Other small caps in the shipping sector posting gains today include Hornbeck Offshore Services (NYSE:HOS) up 5.6%, Diana Shipping (NYSE:DSX) up 5.75%, and Genco Shipping (NYSE:GNK) up 6.7% for the day.

(Note: for more information about profitable shipping plays check out my new report, "3 Value Play Shipping Stocks to Navigate to Calmer Waters". You can find it HERE.)

Other small caps over 20% today (as of 1:30 P.M. Eastern) are from the healthcare sector with Exelixis (Nasdaq:EXEL) posting a 21.9% gain on news of it development partnership with heavyweight drugmaker Sanofi-Aventis to work on a cancer drug. The deal is expected to be worth $140 million upfront and eventually up to $1 billion. The other health sector leader, and in third place today, is Dynacq Healthcare (Nasdaq:DYII) currently trading at $3.37 on today's gains of 21%.

As of 1:30 P.M. Eastern the DJIA is up 0.90% to 8,374.73, the Nasdaq trails it just slightly bringing in a gain of 0.82% at 1,745.20, and the S&P 500 leads both with a 1.25% gain for trading to bring it to 904.20.

*****Yesterday, it was reported that median home prices fell to $209,700 from $246,400 in April 2008. That's a steep year-over-year correction, even though prices were up from March 2009.

Today, we hear that that new home sales posted a gain, though not as big as expected.

The housing market is bottoming. How long will the bottoming process take? Common sense would say it will take a while, probably a couple years, to work off the inventory and get current delinquent loans back on track.

Persistently high unemployment rates will not help speed the recovery in housing. But at least we're seeing signs that the housing market is stabilizing. We should expect to see swings in the data, one good month could easily be followed by a bad month. It will be interesting to see how much the stock market moves on housing data going forward. I would suspect that only extreme readings would move stocks significantly.

*****The Mortgage Bankers Association reported that 9% of mortgages are delinquent. Throw in mortgage holders that are in foreclosure and it's 12%. That's a huge percentage. It's also the highest since data was tracked, starting in 1972.

It's easy to see why the numbers are so ugly - as the unemployment rate rises, fewer can afford their mortgages. And in some areas of the country the unemployed can't move to find a job because they can't sell their home. So it's no wonder that more and more economists expect a "double-dip" of recession.

74 percent of economists responding to a National Association for Business Economics survey believe the U.S. economy will grow in the 3rd Quarter. But the growth won't be strong or lasting.

A growing number of economists, including Dr. "Doom" Nouriel Roubini, believe it's likely that the U.S. economy will go back into recession in the second half of 2010, when government stimulus wears off.

*****The economic recovery is facing two major speed bumps - rising energy prices and rising interest rates. As the economy recovers, energy prices will rise, soaking up excess household funds and leaving less for discretionary spending. We've seen oil prices practically double so far this year and OPEC has announced that it feels that RIGHT NOW oil should be valued at $80 a barrel: meaning another 27% from today's $63. That's going to hurt at the pump even more. Here at the Washington, D.C. offices we're already up 40% since December with a regional average of about $2.39.

As the government continuer to sell Treasury bonds to fund the budget shortfall (over $1 trillion for 2009, and counting) and pay for stimulus initiatives, bond yields will rise, making it more expensive for consumers to get a loan. That will affect the market for big-ticket items like cars and new appliances, not to mention homes.

*****All this will have important consequences for your investments for the foreseeable future. First and foremost, it will be important to follow sector trends. Energy will remain strong, but sectors like retail, housing and consumer goods will probably remain volatile. There will be some quick, isolated opportunities here and there in those sectors, but the broader trend is not positive.

Also, risk management will be critical to success. Investors should have exit strategies in place for their investments. This is not a time to be thinking "buy and hold." Rather, if you have gains, don't be afraid to take the money and run.

*****Speaking of taking your money…just this morning I advised my Top Stock Insights advisory service members to take their 19% gains on BlackRock, Inc. (NYSE:BLK) today. BlackRock was my feature recommendation for profiting from the Treasury's Public-Private Investment Program (PPIP) to remove toxic assets from banks' balance sheet.

Several important aspects of the plan have been removed, and I suspect Treasury Secretary Geithner will abandon it altogether soon. The PPIP is simply not going to work, and for many of the reasons I've stated here in Daily Profit.

First and foremost, banks simply don't want to sell. And Geithner blew his opportunity to gain some leverage over the banks through his "stress tests." And all the bailout money didn't exactly convince banks they were in danger of failure and needed to sell.

At least Top Stock Insights readers managed to turn a profit on Geithner's failed plan. Now, we're setting our sights on India. The recent election there has set the stage for massive economic reform and jumpstart to growth.

Despite a huge jump for Indian stocks in the wake of the election results, not many investors are considering India right now. But I think that gives us a distinct advantage as India could be one of the great growth stories this year and going into the next several years. If you're interested, you can find out how to get my Special Report 3 India Stocks Set to Soar in 2009 by clicking HERE.

Pyramid Oil Co. (Nasdaq:PDO), Seabridge Gold Inc. (Nasdaq:SA) and Pacific Premier Bancorp Inc. (Nasdaq:PPBI) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Torch Energy Royalty Trust (Nasdaq:TRU), Jacksonville Bancorp Inc. (Nasdaq:JAXB), Ohio Legacy Corp. (Nasdaq:OLCB), James River Coal Co. (Nasdaq:JRCC), Thermadyne Holdings Corp. (Nasdaq:THMD) and Hornbeck Offshore Services Inc. (Nasdaq:HOS).

Here are the biggest percentage losers among small caps:

On Thursday, we examined why the oil sector will be one of the most profitable sectors to round out 2008, and gained insight from Jason Votruba, vice president and co-portfolio manager of the UMB Scout Small Cap Fund, and Richard Wyman, vice president and senior oil and gas analyst at Canaccord Adams. Today, Votruba and Wyman name their favorite small-cap oil and gas stock picks.

Wyman favors oil and gas companies with an established land position, which he calls “scalable repeatable growth opportunity.” The analyst has “buy” ratings on ProEx Energy Ltd. (TSX:PXE), a natural gas unconventional player; Pearl Exploration and Production Ltd. (TSV:PXX), a heavy oil player; and Sterling Resources (TSV:SLG), an exploration and production company drilling in the U.K. sector of the North Sea and Romania. Wyman said Sterling is a bit riskier, but has an active drilling program.

Votruba is overweight energy in his portfolio, with energy comprising 20% to 25% of the fund manager’s diversified small-cap fund. This compares with the Russell 2000 (NYSE:IWM), for which energy composes 7%.

Among small-cap oil and gas companies, Votruba recommended oil and gas exploration and production company Swift Energy Company (NYSE:SFY). “[It’s] probably one of my favorite picks right now in the E&P. I see it as more of a lower risk play. It’s involved in lower-risk development, and not doing a lot of wild-cat exploration; it’s on their existing properties.” 

Swift Energy has had its obstacles. Investors rebuked the company in the past after management decided to commence operations in New Zealand — a move that boded poorly in retrospect. Management lost credibility with investors as a result, but Votruba thinks the company’s back on track. According to Votruba, Swift Energy has now surpassed both Chevron (NYSE:CVX) and Texaco as the largest oil producer in Louisiana.

However, the company did see production fall in the first quarter on account of production issues. Specifically, Swift began producing new wells that were shut down after pressure issues arose in a handful of the pipelines, which could cause damage to the oil wells.  But Votruba says he’s confident Swift will be able to get its wells operating again in 60 to 90 days, and thinks production will climb 30% in the . . .

After what seemed to be an ephemeral spring rally, stocks were pummeled last week with oil’s skyward climb, the Fed’s bleak outlook and unwelcoming economic data. However, once the credit kinks are worked out and the dust clears, small caps may be the place to park your money, according to Bill Greiner, chief investment officer for UMB Asset Management and UMB Bank, and chief economist for Scout Investment Advisors.

“There are a number of factors that have led me to believe that small-cap equities will probably do well going forward — and those factors center on how bad things are right now,” Greiner said in an interview with SmallCapInvestor.com.

Greiner points to economic indicators for signs of probable future success for small caps. First he examines consumer sentiment. According to the veteran investor, when you analyze the consumer sentiment data, you look at the trend over the last 30-year period. When the read on consumer sentiment has been below a level of 96, the following 12-month period of time small-cap companies have outperformed large cap companies by close to 1,000 basis points, Greiner said. The latest read on the consumer confidence index was below 76.

“When the consumer’s been this negative before, it’s been a great time to buy small-cap companies,” he said.

Next, Greiner looks at economic coincident indicators, a coincident economic indicator is one that moves at the same time the economy does. The latest read for coincident economic indicators overall was 0.56%. 

“The last time we were in this environment was back in the early 2000’s, right before the start of the big rally in stocks in general,” said Greiner. “That leads me to believe that small-cap companies are probably positioned relatively well.” 

According to Greiner, when coincident indicators have been at this stage historically, small-cap stocks on average generated returns of 25.6% for the next 12-month . . .