Tag - Pg

I've found and interesting small cap company operating in the mobile technology industry - one that stood out from the pack because it has morphed two trends into one business model for those on the go.

But there's a catch: This microcap company is looking to make money by giving away their products.

Merger and acquisition activity is lifting the bid for many consumer stocks. In the past few weeks, Fortune Brands (NYSE: FO) said it would focus on its spirits business, including Jim Beam, and split off its consumer goods and sports products, making them ripe for acquisition. And an investor group headed by Kohlberg Kravis Roberts is looking to unlock the value in Del Monte Brands (NYSE: DLM), which it's acquiring for $5.3 billion.

Small caps are modestly rising this afternoon after large-cap benchmarks McDonald's (NYSE:MCD) and Procter & Gamble (NYSE:PG) lifted stocks from their morning descent. 

At 1:50 pm ET, the Russell 2000 (NYSE:IWM) was up 0.73%, the Dow was up 0.42% and the S&P 500 is 0.68% higher. 

Small caps on the move today include NxStage Medical Inc. (Nasdaq:NXTM), 30% higher after announcing a strategic business alliance with Asahi Kasei Kuraray Medical. Also on the rise are Pomeroy IT Solutions (Nasdaq:PMRY), up 28% after news broke the tech company would be acquired for $5.02 a share, and Internet Gold Golden Lines (Nasdaq:IGLD) is also 27% higher following a reported rise in Q1 profits. 

*****I was starting to think that Treasury Secretary Tim Geithner was secretly hoping that everyone had forgotten about his plan to remove toxic assets from bank balance sheets. But now he's out saying the Public-Private Investment Program (PPIP) should start in about six weeks. (Go ahead and mark your calendar now, in pencil, of course.) 

As you know, I'm not a big fan of Secretary Geithner. That's because, to me, he represents all that's wrong with how the government has dealt with the Wall Street banks, the likes of which nearly brought down our economy.  
He knew AIG (NYSE:AIG) was about to use TARP funds to pay bonuses and concluded there was nothing he could do. He knew AIG was about to pay Goldman Sachs (NYSE:GS) $12 billion out of TARP funds and again did nothing. He has consistently coddled the very companies that are in desperate need of tough love.  
And frankly, that's got me worried that Wall Street will go back to "business as usual" as soon as possible. Secretary Geithner has done nothing to stop it, and may even be encouraging a return to over-leverage by going to such great lengths to help these companies clean up their books.   

*****The big question surrounding the PPIP is how Secretary Geithner expects to get banks to sell their toxic assets. Banks believe these assets will regain value over time. And between government bailouts and stock sales (see Bank of America's (NYSE:BAC) $13.47 billion stock sale), banks are certainly going to operate under the assumption that they are well-enough capitalized to play the waiting game.  
It seems to me the "stress tests" were an ideal opportunity to force the banks to sell toxic assets. But Secretary Geithner chose to lob softballs, and now he has no leverage.  

Maybe he's got a plan. I sure hope so… 

*****As an investor and ruthless capitalist, I always look for profit opportunities in any situation. I might not like the outrageous stimulus spending coming from the government, but I'll darn well recommend the stocks that will benefit from government handouts. 

The PPIP is presenting a very nice profit opportunity for the companies that participate. That's because the Fed and Treasury will help finance-with your tax money, of course-any toxic asset sales. Companies that participate have an opportunity to make large profits with very little up front risk. It's a sweetheart deal, and I expect these stocks to move when investors realize what's going. I've prepared a Special Report on the subject and you can get it HERE. 

Small-cap stocks edged higher on the opening, underpinned by a GDP report that wasn’t as bad as feared and by a smattering of decent earnings reports on the small-cap front that lifted the Russell relative to the large-cap indices. But those early gains were trimmed as the market remains concerned about the economy and corporate profits. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was down 0.17, or 0.04%, at 453.07.

The quarterly GDP report came in at minus 3.8%, which was quite a bit better than feared: the pre-release forecast called for a slide of 5.3%. Even though the report showed less contraction than expected in the economy, this still marked the worst showing for the U.S. since 1982. In addition, consumer spending dropped for two consecutive quarters for the first time since 1990-1991 as people struggle with sinking home values, mounting job losses and stock market devaluation. There was some concern that the “upside” surprise on GDP only delays the pain, especially as corporate layoffs have escalated in January.

While the GDP report was the primary target on everyone’s radar this morning, there were also economic releases on the employment cost index (it rose 0.6%, about what was expected); the Chicago Purchasing Manager’s Survey; and the Michigan sentiment survey. The Chicago headline figure came in at 33.3, which was below the forecast of 34.9 and which marked a new cycle low for the reading on Midwest manufacturing. The market appeared to slide after the Chicago number came out. Meanwhile, the Michigan figure was at 61.2, relatively close to the projection of 61.9.

One measure of just how ugly things have become, the Goldman Sachs Analyst Index (GSAI), a survey of Goldman’s equity analysts across a range of sectors, . . .

U.S. stocks are expected to open flat to higher, with concerns about declines in Asian equities overnight and sloppy corporate profit reports countered by a better-than-expected tally on GDP. The Dow is called flat to 15 points higher, while the Russell 2000 (NYSE:IWM) is seen opening near steady levels at 453.25.

The GDP report headline figure came in at minus 3.8%, which was much better than expected. The consensus forecast was for a slide of 5.3%. Even though the number beat the projection, it was still the worst showing for the U.S. economy since 1982.

In overseas action, Europe was slightly lower ahead of the U.S. open, while Asian equities tumbled 1.6%, pulled down by losses in bank and tech stocks, even though Hong Kong shares were up 0.9% on hopes for rate cuts out of China.

On the U.S. corporate front, Amazon.com (Nasdaq:AMZN) and SunPower corp. (Nasdaq:SPWRA) beat the estimate and could attract buyers early today. However, as usual the bulk of the earnings news was less upbeat, with Proctor & Gamble Co. (NYSE:PG) coming in near the forecast, but with sloppy sales numbers. That same theme was seen for Honeywell International Inc. (NYSE:HON). Dow stock Caterpillar Inc. (NYSE:CAT) could be on the defensive following an analyst . . .

Small-cap stocks are expected to open higher, boosted by another sharp pullback in crude oil prices overnight and by an extension of the commodities market rout that took place Monday. The Russell 2000 (NYSE:IWM) was expected to open about 0.5% higher, which would translate to an open near 707.70.

Crude oil prices tumbled about $2 dollars a barrel during European trading, slipping below $119. Meanwhile, gold slipped to 6-weeks lows, platinum to 6-month lows and soybeans to 3-month lows. There is hope that this “burst” in the commodity rally will take an edge of inflation concerns. Certainly a downward thrust in crude oil prices would help lower gasoline prices at the pump, which could bolster consumer spending to retailers, and lower fuel costs would help margins for strapped airlines and package couriers.

After opening lower, the Russell 2000 (NYSE:IWM) remains shallowly in the red on thin trading in a shortened trading session amid a mixed jobs report, a lower-than-anticipated ISM services reading and climbing crude prices.

While the small-cap index remains in the red, the larger-cap indices are climbing higher late morning. At 11:52 a.m. ET, the Russell 2000 was down 2.25, or 0.33%, to 670.09, while the Dow was up 103.16, or 0.92%, to 11,318.67. Equity markets will close at 1 pm ET, ahead of the Independence Day Holiday.

The Labor Department reported before the opening that the unemployment rate remained steady at 5.5% in June from May, a hair higher than the forecasted decline to 5.4%. However, non-farm payrolls tumbled 62,000, which was lower than the median forecast for a decline of 50,000. Employers remain cautious amid high energy prices and a sluggish economy. Construction, manufacturing and financial services were among the areas hardest hit, while education and health services, leisure and hospitality, and government showed gains.

“The unemployment rate stayed higher in June after soaring in May. This suggests that May’s surge in joblessness was more of a catch-up to the slow rise in the prior six months than a seasonal adjustment difficulty. Regardless, over the past year the number of unemployed has increased by 1.5 million to 8.5 million and the unemployment rate has increased by one percentage point to 5.5%. In the post-World War II period, every time the unemployment rate has jumped by a full percentage point in the course of a year, the economy has slipped into recession,” Steven Wood, chief economist with Insight Economics, said in an email.

The ISM Non-Manufacturing Survey came in at 48.2, below the median forecast of 51.5. A reading below 50 signals contraction, while a reading above 50 signals expansion. In addition, the prices paid index was the highest since the . . .

Shares of ARYx Therapeutics Inc. (Nasdaq:ARYX) dropped more than 18% Thursday after the biopharmaceutical company announced late Wednesday that consumer goods giant The Procter & Gamble Company (NYSE:PG) had ended its collaboration with ARYx. The companies had been working on the development of a drug for chronic stomach problems. The drug, ATI-7505, was in late-stage development when Procter & Gamble exercised its option to end the partnership. ARYx said that patients currently involved in the study will be taken off the treatment during the next few weeks, and no new patients will be added.

Shares of Fremont, Calif.-based ARYx slipped more than 18% Thursday to $5.35 apiece, about $1.22 lower than Wednesday’s close.

Small-caps are continuing their upward assent midday, ahead of the Federal Reserve’s decision and after this morning’s GDP number was in positive territory.

At 1:14 p.m. ET, the Russell 2000 (NYSE:IWM) was up 5.01, or 0.70%, at 723.94, while the Dow had gained 117.4, or 0.91%, to 12,949.34.

The Federal Reserve’s Federal Open Market Committee two-day meeting concludes at 2:15 p.m. today in which the Fed is widely expected to trim the fed funds rate by 25 basis points. This would be the central bank’s seventh consecutive cut in the key interest rate since September when the Fed first began battling the credit tempest. Investors will pay close attention to the central bank’s commentary to see if the Fed will pause its monetary policy-loosening campaign to fend off inflation.

Much of today’s trading has been driven by the better-than-expected GDP number and corporate earnings.

This morning it was reported that the U.S. economy grew at a slothful 0.6%, just dodging negative growth — an “official” recession signal. GDP came in slightly better than the 0.5% economists had forecasted. While official definition of a recession definition is two consecutive quarters of negative GDP growth, the United States has experienced two quarters of extremely sluggish growth and the U.S. economy is clearly struggling as consumers grapple with tumbling housing values, rising energy and food costs and a soft labor market.

“Everyone has been finding holes in the positive GDP even before it came out and today's number showed much better consumer spending than what would think,” Andy Busch, global foreign exchange strategist for BMO Capital Markets, said in an email. “However, this data didn't include much of the March numbers. We know . . .

Small-cap stocks edged slightly higher this morning, bouncing off an overnight dip when this morning’s GDP report came in above expectations, and allowed investors skittish about a potential glut of recession headlines to breathe a sigh of relief. At 9:59 a.m. ET, the Russell 2000 (NYSE:IWM) was up 2.74, or 0.38%, at 721.66.

The Chicago Purchasing Manager’s Survey, out at 9:45 a.m. ET, was slightly above expectations at 48.3 and appeared to have very little impact on equity market trading.

After a recent lull in economic data, the numbers charge kicked into gear this morning, with GDP, ECI, Chicago Purchasing, and even ADP’s employment survey coming out. Although GDP was an important number, it’s just a warm-up for the FOMC announcement this afternoon. And just to prove the old axiom of “no rest for the weary,” the market will have to navigate through ISM Manufacturing numbers, Personal Income data and vehicle sales Thursday, then the big employment release Friday morning.

Let’s begin with the aforementioned GDP release. When it came out slightly better than forecast (up 0.6%), it missed the “official” recession gauge by being in positive territory (if you’re curious, the true official recession definition requires two consecutive negative-growth quarters). It’s worth noting that although GDP averted negative growth territory, we’ve still seen two quarters of extremely sluggish growth and the U.S. economy is clearly struggling as consumers deal with . . .

The Russell 2000 (NYSE: IWM) is unsteady following mixed economic news.

At 10:54 a.m. ET, the small-cap index was down 1.07 points, or 0.16%, to 685.11. The Dow Jones Industrial Average (INDU) had shed 44.45 points, or 0.36%, to 12,221.94.

Factory activity fell to 48.3 in February from 50.7 in January, the Institute for Supply Management reported after the start of trading. Economists were expecting to see a slightly steeper decline. Readings below 50 indicate a contraction.

“The manufacturing sector failed to grow during the month as the PMI fell below 50 percent, which indicates weaker performance in February when compared to January,” said Norman Ore, chair of the ISM’s Business Survey Committee, in a statement. “Manufacturers’ order backlogs continue to erode as the New Orders Index remained below 50 percent for the third consecutive month.”

Meanwhile, the U.S. Census Bureau reported after the opening that construction spending fell more than expected in January. The numbers show a 1.7% decline to a seasonally adjusted annual rate of $1.121 trillion. Private home construction led the way down, falling 3%.

Multinational and homegrown corporations haven awakened to the potential of the Chinese economy to impact their bottom lines. That's why companies large and small are investing in China, seeking to tap one of the most lucrative consumer markets in the world.
 
China's growing middle class and emerging affluent urbanites are more brand-conscious than most of their counterparts in the West, and advertisers are aggressively pushing their products and services to try to build brand equity and capitalize on new growth opportunities.
 
This is apparent not only in the flood of Western-style advertising messages on television and in magazines and newspapers, but in public spaces as well. Almost anywhere you go in China — from public transportation to bars to office buildings and hotel lobbies and elevators to airports — there are state-of-the-art video screens, from small LCD displays in taxi cabs to huge billboards on street corners, pushing everything from Procter & Gamble's (NYSE: PG) Crest toothpaste to General Motors Corp.'s (NYSE: GM) Cadillac Escalade SUVs.
 
One company responsible for bombarding the Chinese with these images is VisionChina Media Inc. (Nasdaq: VISN), which runs one of China's largest mass transportation mobile TV advertising networks. Through its subsidiary, China Digital Mobile Television Co., Ltd., VisionChina's network uses real-time mobile digital TV broadcasts to deliver advertising and content to would-be consumers in the People's Republic of China. The company's "out-of-home" network consists of 41,400 video displays on public transit buses and subway systems that reach some 26 million viewers each day in 15 of China's most prosperous cities. Founded in 2004, VisionChina debuted on the Nasdaq in December 2007 with an IPO that raised $108 million. It plans to use the proceeds to strengthen its existing network, to expand beyond the realm of public transport and to make strategic acquisitions.

The Russell 2000 (NYSE: IWM) posted a major loss today following news of a record loss at automaker General Motors and more credit fears. The small-cap index fell 25.81 points, or 3.22%, to 775.96. The Dow Jones Industrial Average (INDU) was down 360.92 points, or 2.64%, to 13,300.02.

On a year-to-date basis, the Russell 2000 has fallen 1.46%, while the Dow has added 6.62% and the S&P 500 has gained 4.17%.

The bearish tone was set before the start of trading, when General Motors Corp. (NYSE: GM) announced a stunning third-quarter net loss of $39 billion, or $68.85 per share, compared with a loss of $147 million, or $0.26 per share a year earlier. The Detroit-based automaker explained that its record loss was due to a one-time charge against deferred tax assets.

The small-cap futures were pointing down, and the Russell 2000 and the other major U.S. indices began the day in negative territory, with the sell-off picking up steam during the session.

Investors largely disregarded positive economic news, which came in the form of a surprise jump in productivity. The U.S. Labor Department announced that third-quarter productivity increased 4.9%, the fastest rate of growth in the last four years. Economists were expecting an increase of 2.5% following a downwardly revised rise of 2.2% in the second quarter.

The same report showed that unit labor costs, which are a key measure of inflation, declined 0.2% in the second quarter. That also defied economists, who were forecasting a rise of 0.8%.

Overall, manufacturing activity increased 4.6% in the third quarter, compared with a growth of 2.4% in the second quarter. Manufacturing is about 15% of the U.S. economy.

But Wall Street did not seem impressed.

The Russell 2000 (NYSE: IWM) futures are pointing down and the small-cap index will open in negative territory on news of a loss at General Motors.

Automaker General Motors Corp. (NYSE: GM) announced this morning that its third-quarter net loss was a stunning $39 billion, or $68.85 per share, compared with a loss of $147 million, or $0.26 per share a year earlier. The Detroit-based company explained that its huge loss was due to a one-time charge against deferred tax assets. GM has now lost all the deferred tax credits it accrued over the previous three years.

In economic news, the U.S. Labor Department reported that third-quarter productivity increased more than expected. Preliminary numbers show a rise of 4.9%, while economists were expecting an increase of 2.5%. That’s the fastest pace of growth in the last four years.

Productivity increased a downwardly revised 2.2% in the second quarter.

Interestingly, unit labor costs—a key measure of inflation—declined 0.2% in the second quarter. That also defied economists, who were forecasting a rise of 0.8%.

Here are the biggest percentage gainers and losers in pre-market trading among companies with a market cap between $100 million and $750 million:

Biggest percentage gainers:

• PeopleSupport Inc. (PSPT), up 15% on news of a larger third-quarter profit.
• DRD Gold Ltd. (DROOY), up 14%.
• CRM Holdings Ltd. (CRMH), up 10% on news of a rise in third-quarter profit.

Biggest percentage losers:

• Nastech Pharmaceutical Company Inc. (NSTK), down 28% on news it has reacquired teriparatide nasal spray for treatment of osteoporosis from its collaboration partner, Procter & Gamble Pharmaceuticals Inc. (PG).
• Sierra Wireless Inc. (SWIR) down 10% on news of a product launch in Japan.
• Lakes Entertainment Inc. (LACO) down 8% on news of a third-quarter net loss.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in the red due to news of poor earnings and concerns that interest rates will not fall. At 1:35 p.m. ET, the small-cap index had shed 2.78 points, or 0.34%, to 818.94. The Dow was off 40.88 points, or 0.29%, to 13,829.38.

Investors hoping for a sizeable drop in the U.S. Federal Reserve’s target interest rate may be disappointed, according to an article in The Wall Street Journal. The paper claims that policy makers, who kicked off their two-day meeting this morning, will likely either cut the federal funds rate 0.25% or leave it unchanged.

That was enough to scare away the bulls, and stocks opened in negative territory.

Contributing to the bearish mood was news that United States Steel Corp.’s (NYSE: X) third-quarter net income missed analysts’ projections by falling 35% due to costs associated with an acquisition.

Cincinnati, Ohio-based consumer goods giant The Procter & Gamble Co. (NYSE: PG) also had bad news to report, saying that its profit margin will come under pressure in the coming months due to higher energy costs.

 

Stocks are little changed this morning, as investors await news from the Federal Reserve this afternoon on interest rates.  Among small cap stocks, shares of Trio-Tech International (AMEX: TRT) are higher on news profit doubled, while Medis Technologies Ltd. (Nasdaq: MDTL) said its first-quarter loss increased.

At 11:25 a.m. ET the Russell 2000 had shed 0.67 points, or 0.08 percent, to 830.23.  The Dow Jones Industrial Average was up 3.01 points, or 0.02 percent, to 13,312.08.