Tag - Vlgea

Ocwen Financial Corp. (Nasdaq:OCN), Optimer Pharmaceuticals Inc. (Nasdaq:OPTR) and Life Partners Holdings Inc. (Nasdaq:LPHI) are among the new 52-week highs in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Lannett Co Inc. (Nasdaq:LCI), Village Super Market Inc. (Nasdaq:VLGEA), Citizens Inc. (Nasdaq:CIA), SXC Health Solutions Corp. (Nasdaq:SXCI), Hot Topic, Inc. (Nasdaq:HOTT) and American Bancorp of New Jersey Inc. (Nasdaq:ABNJ).

Small-cap stocks fell hard this morning, pulled down by soft economic data, a global rout in equities, record lows in the U.S. dollar and a sobering outlook from central bank leaders. At 10:02 a.m. ET, the Russell 2000 (NYSE:IWM) was down 13.92, or 2.09%, at 650.59, the lowest level seen since March.

In Senate testimony this morning, Federal Reserve Chairman Ben Bernanke will address the economy and monetary policy. In a release of the advance text, Bernanke said that the financial markets remain under “considerable stress” and that consumer spending was likely to be “restrained” in coming quarters. The immediate response to the Bernanke text headlines was that stock markets extended the morning slide.

The stock market was already taking a beating in after-hours trading before a fresh batch of economic data came out on the weak side ahead of the opening. On the inflation front, the PPI headline figure came in at plus 1.8%, which was well ahead of the forecast for a rise of 1.3% and the year-over-year figure was a sobering plus 9.2%, the largest rise since June 1981. On the consumer spending ledger, the news was also dour, with June retail sales up just 0.1%, well down from the median forecast for a rise of 0.4% as car sales notched their biggest drop in more than two years. Even when excluding autos, June sales were up just 0.8%, which also missed the forecast for a rise of 1%.

Retail sales in May were strong, and although this month’s figure missed the estimate, it was still a decent number. The problem is that May and June sales were temporarily boosted by government stimulus checks and the strength is seen as temporary from most analysts. “Despite recent strength, consumers are slowly and grudgingly succumbing to job losses, high energy prices, the housing meltdown and the financial market turmoil,” Steven Wood, chief economist with Insight Economics, . . .

John Reese is founder and CEO of Validea.com and Validea Capital Management. His Validea newsletter uses a fascinating approach to stock selection. He screen stocks based on the investment criteria of the market’s most legendary investors.

In a recent special report on food stocks – and based on the strategies of Peter Lynch and James O'Shaughnessy -- the advisor has uncovered a trio of small-cap stocks: Village Supermarket Inc. (Nasdaq: VLGEA), MGP Ingredients Inc. (Nasdaq: MGPI) and Seneca Foods Corp. (Nasdaq: SENEA).

Reese explains, “Everybody eats. Sure, it sounds obvious, but it's the kind of thing that's important to remember when investing--particularly if you're still a little leery of where the economy's heading.”

“While people may hold off on buying new homes or cars or clothes when times get tough, the vast majority of us still head to the grocery store every week or so to buy food.

“Grocers, and the companies that supply them and other large-scale food operations, thus make for nice, reliable investments that are less subject to the waxing and waning of the economy than many other firms.”

In line with his overall bullish outlook on the food sector, Reese ran his screens, each of which, he notes, is based on the philosophy of a different Wall Street great. The stocks that pass this test, he suggests, are “good bets even if the economy heads south.”

“While larger grocer chains get more headlines, Village Supermarkets gets better reviews from my guru models,” Reese says.