Tag - Kft

During its five years of existence, this company's stock has risen 148 percent, while the iShares Dow Jones U.S. Consumer Goods Sector Index Fund (IYK) - of which it is a member - has risen just 6.3 percent.

That outperformance, from a typically slow growth sector, is worth taking a closer look at

Small caps are trading in a narrow range between positive and negative territory following a 50 basis point cut in the fed funds rate. At 2:33 p.m. ET, the Russell 2000 (NYSE:IWM) was up 1.64, or 0.34%, at 484.38.

The Federal Reserve concluded its two day federal open market committee meeting today with a widely expected 50-basis-point cut in the federal funds rate.

The Fed’s cut comes on the heels of a 0.27% rate cut in China. In Europe, the European Central Bank hinted that rate cuts are possible in the near-term. Rate cuts globally would help thaw the still tight credit markets around the world, easing the flow of credit.

Libor slipped for the 13th consecutive trading day, and commercial paper activity picked up dramatically following the Fed’s new program to purchase commercial paper. Evidence that the credit markets are showing signs of marginally loosening boosted the U.S. markets Tuesday and pushed overseas markets higher today.

In economic news, durable goods orders clocked in above expectations, with a gain of 0.8%, compared with the forecast for a drop of 1.1%. However, the favorable surprise couldn’t boost the market, as traders remain cautious on the dreary economic outlook...

After opening lower, small-cap stocks have continued their steady decent, as concerns surrounding the financial sector, a rebound in crude oil prices and dismal corporate earnings overshadowed the Senate’s passage of the housing bill. 

At 12:22 p.m. ET, the Russell 2000 (NYSE:IWM) was down 7.73, or 1.09%, to 702.61, while the Dow was down 125.46, or 1.1%, to 11,245.23.

Federal regulators seized two small banks over the weekend, which has cast a rain cloud over the financial sector today. The FDIC took over the First National Bank of Nevada and First Heritage Bank NA of California and sold the banks to Mutual Omaha Bank. Small banks dominated the list of largest percentage losers on the Nasdaq Exchange early this morning.

The bank seizures overshadowed the Senate’s passage of a housing bill on Saturday that creates a backstop for Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) should the mortgage lenders fall off a ledge. The legislation calls for an extension of a limitless line of credit for both firms for a year and a half and bestows authority to the Treasury department to purchase shares should the companies find themselves faced with insolvency.

Crude oil prices are pushing higher on the session, up $1.19 to $124 a barrel in midday action. The commodity is gaining ground on account of reports of attacks on oil pipelines in Nigeria and a fire at a Kuwait refinery.

Small-cap stocks edged lower a relatively quiet opening, as jitters about the financial arena and rising crude oil prices were countered by decent earnings news. At 10:00 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.71, or 0.52%, at 706.63.

Federal regulators seized a couple of small banks over the weekend, which cast a modest negative pall over the financial sector this morning. The FDIC took over the First National Bank of Nevada and First Heritage Bank NA of California and sold the banks to Mutual Omaha Bank. Small banks dominated the list of largest percentage losers on the Nasdaq Exchange early this morning.

Concerns about the health of the financial system pulled down the U.S. dollar, which was off about 0.2% against the euro and 0.1% versus the yen. Treasury prices also were on a bid on the bank failure news, but volume was light.

Crude oil prices were pushing higher early this morning, buoyed by reports of attacks on oil pipelines in Nigeria and a fire at a Kuwait refinery. Crude prices on the NYMEX were up nearly 1% in the morning trade, approaching $124.50 dollars a barrel.

While the crude oil pop and the bank failures were negative elements in play this morning for equities, the news didn’t exactly spark a firestorm of selling in stocks, and investors appeared to be waiting for a stronger directional bias to emerge.

It is a big week for earnings, with about 118 of the S&P 500 slated to report quarterly results. One of the key names this morning was Kraft Foods Inc. (NYSE:KFT), as the maker of Oreo cookies beat the forecast and was up about 2.5% shortly after the open.

One of the biggest percentage movers among large-caps this morning was Amgen Inc. (Nasdaq:AMGN), which jumped nearly 15% on news that a trial for an osteoporosis drug went well. Also, private equity firm Kohlberg Kravis Roberts & Co. announced plans for an IPO, which suggested to some that the market . . .

Small-cap stocks are expected to open near steady levels after a relatively tame overnight session. Concerns on the financial side of things could be countered by solid earnings news. The Russell 2000 (NYSE:IWM) was basically flat in after-hours trading, so an opening near Friday’s close in the 710 zone appears likely.

Even though Congress approved the rescue plan for government-sponsored mortgage firms Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) on Saturday, enthusiasm from that news was overcome by other news that regulators seized a couple of small U.S. banks this weekend.

Crude oil futures were up about $1 dollar a barrel heading toward the U.S. stock market opening, lifted by attacks on oil pipelines in Nigeria. Grains prices were also called solidly higher, so commodity price inflation will start the week out on a firm note.

On the earnings front, Kraft Foods Inc. (NYSE:KFT) topped the Street’s estimate and raised forward guidance, which sparked a 3% rally in the stock during overnight trading. There will be plenty of big name companies to study this week, . . .

Small-cap shares are expected to open higher, lifted by overseas gains in Europe and a stronger-than-forecast housing starts report that caused S&P 500 futures to rise about two handles. If the Russell 2000 (NYSE:IWM) matches the percentage climb in large-cap index products, then small caps should open near 745.

April housing starts were reported at an annual rate of 1.03 million units, up from 954,000 in March, and well above the forecast for 940,000. Permits also topped the analyst prediction.

Equity market overseas should be a supportive element in play for U.S. stocks this morning. European shares climbed to four-month highs overnight, rising about 1% on improved earnings outlooks and merger activity. Asia stock index products were mixed, with Japan down 0.2% and China down 0.3%

Crude oil futures jumped higher overnight, which could bolster some energy shares. However, rising crude oil prices remain a big concern for the overall market health because consumer pocketbooks are already stressed by record high pump . . .

If there was ever a situation that fits the Chinese saying “crisis brings opportunity,” the current eruption of safety concerns for China’s food industry may be it. With the problem as widespread as it is, there is a huge demand for products that are safe, and investing in those companies that can meet the demand will likely bring nice returns.

For the past few months, it seems that not a day goes by without scary news concerning China’s food. One day it is Chinese catfish, bass, eel and shrimp containing high levels of cancer-causing toxins. Another day it is toothpaste made from diethylene glycol—the poisonous chemical found in antifreeze. Even Chinese-made pet-food could not escape the wrath, with some animal feed containing melanie—an industrial chemical used to make plastics and fertilizer. 

Considering that China feeds 1.3 billion people every day, the incidents are still uncommon in the grand scheme of things. However, the problem is still a major one. China’s Health Ministry reported around 34,000 food-related illnesses in 2005, with at least 235 deaths—half of which were caused by poisonous chemicals in the food. The rest were from bacterial contamination and other causes. Total average daily caloric supply has jumped from 2,000 kcal per person in the 1970s, to around 3,000 kcal today, with the inclusion of more meats in the diet. The result is a booming food processing industry whose annual revenues rose 17% to $248 billion in 2005.

The obvious trend is that as Chinese consumers become wealthier, they will demand not only more food, but also safer food. This for sure will drive the development of a food safety infrastructure with big money to be spent. The Chinese State Food and Drug Administration announced in early August that China will step up its enforcement and spend 8.8 billion yuan (US$1.16 billion) to improve food and drug supervision by 2010.  

Monterey Gourmet Foods Inc. (Nasdaq: PSTA) has over the past 18 years transformed itself from a local purveyor of fresh pastas sold out of a Monterey, Calif., storefront to a publicly traded diversified prepared foods business that enjoys steadily growing revenues from a number of major food chains in the United States and abroad.

And investors have still not grasped its success. The Salinas, Calif., company’s stock established a 52-week low of $3.60 just last week, about six months after the year-high of $4.83 was put into place. On Wednesday Monterey closed at $3.65. 

Clearly, there have been some challenges over the past year, most notably an aggressive realignment in which sales and marketing operations for the company’s multiple brands were consolidated and manufacturing was streamlined. Costs associated with this realignment helped produce a $3.1 million net loss last year.

But the company is now generating quarterly profits and is projected to become profitable for all of 2007, suggesting that its consolidation costs are mostly behind it.
Two analysts who follow Monterey have a mean estimate for a $0.13 per share profit this year, compared with a loss last year of $0.19. They project revenues will grow to $105.5 million in 2007 and $118.8 million in 2008. The company’s revenues totaled $94.3 million last year, up from $85.3 million in 2005 and $65.2 million in 2004.

Earlier this month, Monterey reported a second quarter net profit of $464,000, or $0.03 per share, compared with $146,000, or $0.01 per share, a year earlier, and said revenues grew to $24.5 million from $23.1 million.

At first glance, eDiets.com Inc. (Nasdaq: DIET), an $88 million online diet and healthy lifestyle company, appears superbly positioned to capitalize on the trend of trying to lose weight using innovative diet programs in the digital age.
 
After all, there’s no shortage of potential customers: roughly two-thirds of Americans are overweight (30% of U.S. adults, or some 60 million people, are categorized as obese). At any given time, about a third of the U.S. population—over 70 million individuals—are on diets of one form or another.
 
The company has aggressively pursued Internet advertising and other traffic-generating methodologies, such as Web-based publications and video programs. Among its offerings: a dozen eNewsletters, an online magazine, Glee, which has articles by health, fitness and nutrition experts, and a library of videos featuring healthy food recipes. The company has also begun a push to pursue corporate licensing opportunities with its content and technology.
 
One thorn in the company's side is the fact that competition from large players with substantial marketing firepower like weight management company Jenny Craig, Weight Watchers International, Inc. (NYSE: WTW), NutriSystem Inc. (Nasdaq: NTRI) and Herbalife Ltd. (NYSE: HLF) is intensifying as these companies find more innovative ways to add to increase their revenues.