Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of hospital and health-care facility operator Health Management Associates (NYSE: HMA ) swooned by as much as 12% earlier in the trading session following negative analyst comments about the sector last week.
So what: Today's move lower appears to be a carryover effect from last week when Citi analyst Gary Taylor downgraded eight hospital operators. His reasoning relates to the need for Congress to reduce the budget deficit and his assertion that Medicare is going to be one area that gets hit hard by spending cuts.
Now what: Shareholders of Health Management should at least feel some relief because their company was spared the ominous sell rating from Taylor. However, that didn't stop the analyst from downgrading four of the eight to sell. Until the 2012 elections are over, it's very difficult to tell what's going to happen with regard to future budget cuts. At just eight times forward earnings, Health Management appears cheap, but Medicare cuts would likely send the stock lower in a hurry. I'm more than happy being a spectator to the hospital sector at the moment.
Craving more input? Start by adding Health Management Associates to your free and personalized watchlist to keep up on the latest news with the company.
Saturday, February 18, 2012
Friday, February 17, 2012
The Art of Profit - SmartMoney.com
Selling fine art sure seems fabulous: hobnobbing with artists, jetting off to art fairs and talking with collectors about why those colored squiggles are so -- pause for effect -- resonant with meaning. But like many other discretionary markets, the $8.5 billion U.S. fine art business slipped into something of a blue period after the crash -- at least for the smaller-scale galleries, where some dealers report that sales have dropped by nearly half since 2008. Still, analysts say the worst is over, with sales expected to hold steady for the next several years.
Profiting from the art game, say industry veterans, is about identifying bankable talent, so staying up-to-date on the latest MFA shows at key art schools is a must. And while more than half of U.S. art sales happen in the Big Apple, experts say would-be gallery owners with smaller budgets can find opportunities in other cities and vacation spots. Insiders say investors can expect to spend at least $50,000 to get a midsize regional gallery off the ground, and, with luck, it could break even in three to five years. But in an iffy economy, says John Davis, owner of Davis and Cline Gallery in Ashland, Ore., those squiggles can be a tough sell: "It's difficult to close a deal on something nobody needs."
Profiting from the art game, say industry veterans, is about identifying bankable talent, so staying up-to-date on the latest MFA shows at key art schools is a must. And while more than half of U.S. art sales happen in the Big Apple, experts say would-be gallery owners with smaller budgets can find opportunities in other cities and vacation spots. Insiders say investors can expect to spend at least $50,000 to get a midsize regional gallery off the ground, and, with luck, it could break even in three to five years. But in an iffy economy, says John Davis, owner of Davis and Cline Gallery in Ashland, Ore., those squiggles can be a tough sell: "It's difficult to close a deal on something nobody needs."
Thursday, February 16, 2012
When Ivy Grads Pick Teaching Over Wall Street: Cohan
We are witnessing the decline andfall of the investment-banking profession as we have known itfor the past 40 years.
The evidence is everywhere. The increasing regulations onWall Street -- as required by the Dodd-Frank law and still beingwritten by the Federal Reserve, the Securities and ExchangeCommission, the Commodities Futures Trading Commission andothers agencies in the U.S. and Europe -- will require theremaining companies to increase their capital, curb their risk-taking and reduce their principal investing.
Aside from the fact that investing principal andproprietary risk-taking per se had nothing to do with the recentfinancial crisis -- and that the ability of Goldman Sachs GroupInc. (GS) to make a huge proprietary bet against the mortgage marketprobably helped saved the firm -- these new rules will greatlycurb Wall Street��s revenue and profitability at a time when thebusiness itself is suffering a severe slowdown. (What sunk WallStreet in 2008 was the seemingly more conventional business ofbeing a middleman for the manufacture, packaging and sale ofincreasingly risky mortgage-backed and other debt securities.)
Not being able to make those big proprietary bets when yousee them developing -- in effect, the closing of the casino thatWall Street has become over the past few decades -- willseverely limit bankers�� money-making opportunities. It will alsoprotect the rest of us when those big bets go wrong or areperceived to be too risky. (For every Goldman Sachs actingbrilliantly, there is an MF Global Holdings Ltd. actingfoolishly).
The slowdown in business, combined with the looming tradingcurbs, has resulted in job losses across Wall Street. MorganStanley (MS) recently announced it was firing 1,600 employees.Goldman Sachs has done its usual turn of eliminating the bottom10 percent of its workforce and a group of its long-servingpartners. Bank of America Corp. (BAC) announced that about 30,000employees would be chopped by the end of 2012, although a numberof the firm��s investment bankers lost their jobs in the pastmonth.
Yet those suffering the most are the foreign firms thatwere trying to break into Wall Street��s business. NomuraHoldings Inc. (8604) has pretty much scuttled its most recent WallStreet experiment (it bought Lehman Brothers Holding Inc.��sEuropean and Asian banking operations) and firms such as SocieteGenerale SA (GLE), UBS AG (UBSN), Credit Suisse Group AG (CSGN) and Royal Bank ofScotland Group Plc (RBS) are all cutting Wall Street bodies.
In November, Bloomberg News estimated that more than200,000 people who work in finance had already lost or wouldlose their jobs this year.
Not only will the head-count reduction on Wall Streetcontinue for the foreseeable future, but the vast sums overpaidto bankers and traders will inevitably continue to fall as well-- as many of them are finding out this bonus week. There issimply no easier and quicker way for Wall Street firms to keepup a modicum of profitability than by cutting pay for the peoplewho still work there. Needless to say, the inevitable decline inWall Street��s compensation will mean less tax revenue for NewYork City and New York State and fewer government services forthe rest of us (absent higher taxes).
According to a Dec. 21 article in New York Times, whereasin 2006 some 46 percent of Princeton graduates who had jobslined up after graduation went to Wall Street, four years laterthat number had fallen to 36 percent. At Harvard, in 2006, aquarter of the class got jobs in finance; by 2011, that numberhad fallen to 17 percent. At Yale, in 2006, 24 percent of thegraduates had jobs in finance and on Wall Street, while in 2010,the number of graduates going to Wall Street had fallen to 14percent.
The word around Goldman Sachs, I��m told, is that even thoseoffered a still highly coveted entry-level job at the firm arehaving second thoughts about taking it. More and more, banks arelosing talent to Teach for America, a fact that may turn out tobe one of the most heartening consequences of the financialcrisis.
(William D. Cohan, a former investment banker and theauthor of ��Money and Power: How Goldman Sachs Came to Rule theWorld,�� is a Bloomberg View columnist. The opinions expressedare his own.)
The evidence is everywhere. The increasing regulations onWall Street -- as required by the Dodd-Frank law and still beingwritten by the Federal Reserve, the Securities and ExchangeCommission, the Commodities Futures Trading Commission andothers agencies in the U.S. and Europe -- will require theremaining companies to increase their capital, curb their risk-taking and reduce their principal investing.
Aside from the fact that investing principal andproprietary risk-taking per se had nothing to do with the recentfinancial crisis -- and that the ability of Goldman Sachs GroupInc. (GS) to make a huge proprietary bet against the mortgage marketprobably helped saved the firm -- these new rules will greatlycurb Wall Street��s revenue and profitability at a time when thebusiness itself is suffering a severe slowdown. (What sunk WallStreet in 2008 was the seemingly more conventional business ofbeing a middleman for the manufacture, packaging and sale ofincreasingly risky mortgage-backed and other debt securities.)
Not being able to make those big proprietary bets when yousee them developing -- in effect, the closing of the casino thatWall Street has become over the past few decades -- willseverely limit bankers�� money-making opportunities. It will alsoprotect the rest of us when those big bets go wrong or areperceived to be too risky. (For every Goldman Sachs actingbrilliantly, there is an MF Global Holdings Ltd. actingfoolishly).
Signs of Withdrawal
There is little debate anymore that Wall Street had becomehighly dependent on its trading operations. Something like 90percent of Bear Stearns��s profits in the years leading up to itsMarch 2008 demise came from its trading and debt-originationactivities. The percentages are not that much different atGoldman Sachs, where in 2010 its traditional investment-bankingoperations generated only $1.3 billion of $12.9 bi! llion in pretax earnings, about 10 percent. All but $1 billion or so ofthe rest of Goldman��s pretax earnings came from its trading,lending and investing businesses.The slowdown in business, combined with the looming tradingcurbs, has resulted in job losses across Wall Street. MorganStanley (MS) recently announced it was firing 1,600 employees.Goldman Sachs has done its usual turn of eliminating the bottom10 percent of its workforce and a group of its long-servingpartners. Bank of America Corp. (BAC) announced that about 30,000employees would be chopped by the end of 2012, although a numberof the firm��s investment bankers lost their jobs in the pastmonth.
Yet those suffering the most are the foreign firms thatwere trying to break into Wall Street��s business. NomuraHoldings Inc. (8604) has pretty much scuttled its most recent WallStreet experiment (it bought Lehman Brothers Holding Inc.��sEuropean and Asian banking operations) and firms such as SocieteGenerale SA (GLE), UBS AG (UBSN), Credit Suisse Group AG (CSGN) and Royal Bank ofScotland Group Plc (RBS) are all cutting Wall Street bodies.
In November, Bloomberg News estimated that more than200,000 people who work in finance had already lost or wouldlose their jobs this year.
Not only will the head-count reduction on Wall Streetcontinue for the foreseeable future, but the vast sums overpaidto bankers and traders will inevitably continue to fall as well-- as many of them are finding out this bonus week. There issimply no easier and quicker way for Wall Street firms to keepup a modicum of profitability than by cutting pay for the peoplewho still work there. Needless to say, the inevitable decline inWall Street��s compensation will mean less tax revenue for NewYork City and New York State and fewer government services forthe rest of us (absent higher taxes).
Ivy League Doubts
The most reliable leading indicator of Wall Street��s futureprospects is the way recent graduates of Harvard, Princeton andYale -- supposedly our ! best and brightest -- choose to spendtheir time after graduating. For years, hordes of graduates fromthose schools beat a fast path to Wall Street. Now the road isfar more difficult to travel. For those who choose to make thejourney, there is the prospect of incurring the wrath and scornof fellow students who make up the various Occupy Wall Streetmovements -- a fact not likely to deter many -- and then thereare dimmer prospects for a job on Wall Street generally, whatwith the slowdown in business.According to a Dec. 21 article in New York Times, whereasin 2006 some 46 percent of Princeton graduates who had jobslined up after graduation went to Wall Street, four years laterthat number had fallen to 36 percent. At Harvard, in 2006, aquarter of the class got jobs in finance; by 2011, that numberhad fallen to 17 percent. At Yale, in 2006, 24 percent of thegraduates had jobs in finance and on Wall Street, while in 2010,the number of graduates going to Wall Street had fallen to 14percent.
The word around Goldman Sachs, I��m told, is that even thoseoffered a still highly coveted entry-level job at the firm arehaving second thoughts about taking it. More and more, banks arelosing talent to Teach for America, a fact that may turn out tobe one of the most heartening consequences of the financialcrisis.
(William D. Cohan, a former investment banker and theauthor of ��Money and Power: How Goldman Sachs Came to Rule theWorld,�� is a Bloomberg View columnist. The opinions expressedare his own.)
Wednesday, February 15, 2012
Munich Re ¨C Creating Lasting Value for Shareholders
Munich Re Group (MURGY) is one of the largest reinsurance and insurance companies in the world with headquarters in Munich, Germany. Reinsurance is insurance that is purchased by an insurance company (insurer) from another insurance company (reinsurer) as a means of risk management. The reinsurer and the insurer enter into an agreement which details the conditions upon which the reinsurer would pay the insurer��s losses (in terms of excess of loss or proportional to loss). The reinsurer is paid a reinsurance premium and the insurer issues insurance policies to its own policyholders.
The main reason for reinsurance is to transfer risk from the insurer to the reinsurer. Munch Re has more than 4,000 corporate clients (insurance companies) in approximately 160 countries. It assumes part of the risk covered by these insurance companies, as well as providing comprehensive advice on the insurance business. Munich Re��s primary insurance operations are mainly concentrated in the ERGO Insurance Group. ERGO writes all types of life and health insurance and most types of property and casualty insurance. Outside of Germany, ERGO is present in more than 30 countries around the world, servicing 40 million clients.
It is the objective of Munich Re management to analyze risks from every angle, and to assess and diversify them, thereby creating lasting value for shareholders, clients and employees. Their value-based management philosophy and focus on a sustained increase in Munich Re��s share price is most evident in their commitment to generating a 15% annual rate of return on risk adjusted capital (RORAC), consistent repurchasing of common stock, the payment of an attractive annual dividend to shareholders (6.25 euro) and an objective to keep their combined ratio (net expenses for claims relative to net earned premiums) as low a possible.
Nikolaus vom Bomhard, chairman of the board, recently commented, ��It [2011] was an exceptional accumulation of major losses (flood! s in Aus tralia, tsunami in Japan and earthquake in New Zealand), but that is precisely what reinsurance is for. After all, a well-developed and functioning reinsurance business and insurance program helps to overcome disasters of this scale. Primary insurance provides stable earnings and balances the burdens that occur in reinsurance due to high claims costs.��
Munich Re is an attractively priced global insurance business, selling at a discount to its tangible book value of approximately 100 euro, paying a dividend yield of 6.5% with a management that is committed to creating value for shareholders over time.
The main reason for reinsurance is to transfer risk from the insurer to the reinsurer. Munch Re has more than 4,000 corporate clients (insurance companies) in approximately 160 countries. It assumes part of the risk covered by these insurance companies, as well as providing comprehensive advice on the insurance business. Munich Re��s primary insurance operations are mainly concentrated in the ERGO Insurance Group. ERGO writes all types of life and health insurance and most types of property and casualty insurance. Outside of Germany, ERGO is present in more than 30 countries around the world, servicing 40 million clients.
It is the objective of Munich Re management to analyze risks from every angle, and to assess and diversify them, thereby creating lasting value for shareholders, clients and employees. Their value-based management philosophy and focus on a sustained increase in Munich Re��s share price is most evident in their commitment to generating a 15% annual rate of return on risk adjusted capital (RORAC), consistent repurchasing of common stock, the payment of an attractive annual dividend to shareholders (6.25 euro) and an objective to keep their combined ratio (net expenses for claims relative to net earned premiums) as low a possible.
Nikolaus vom Bomhard, chairman of the board, recently commented, ��It [2011] was an exceptional accumulation of major losses (flood! s in Aus tralia, tsunami in Japan and earthquake in New Zealand), but that is precisely what reinsurance is for. After all, a well-developed and functioning reinsurance business and insurance program helps to overcome disasters of this scale. Primary insurance provides stable earnings and balances the burdens that occur in reinsurance due to high claims costs.��
Munich Re is an attractively priced global insurance business, selling at a discount to its tangible book value of approximately 100 euro, paying a dividend yield of 6.5% with a management that is committed to creating value for shareholders over time.
Tuesday, February 14, 2012
'How to Be A Gentleman' Nears Cancellation
It looks like CBS'(CBS) new comedy How to be a Gentleman could be next on the list of cancelled shows.
According to reports, the network shut down production of the series, which stars Kevin Dillon and was created by David Hornsby. The remaining seven episodes will air on Saturday nights.
How to be a Gentleman premiered to mediocre ratings, and its second episode saw a 7% decline in viewers between 18 and 49 years old. If CBS pulls the plug on How to be a Gentleman, it will join The Playboy Club, Free Agents and H8R, which all were cancelled last week.
-Reported by Jeanine Poggi in New York.
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>To order reprints of this article, click here: Reprints
According to reports, the network shut down production of the series, which stars Kevin Dillon and was created by David Hornsby. The remaining seven episodes will air on Saturday nights.
How to be a Gentleman premiered to mediocre ratings, and its second episode saw a 7% decline in viewers between 18 and 49 years old. If CBS pulls the plug on How to be a Gentleman, it will join The Playboy Club, Free Agents and H8R, which all were cancelled last week.
-Reported by Jeanine Poggi in New York.
Follow TheStreet.com on Twitter and become a fan on Facebook.
>To order reprints of this article, click here: Reprints
US Airways Group Inc. Fourth Quarter Earnings Sneak Peek
US Airways Group, Inc. (NYSE:LCC) will unveil its latest earnings on Wednesday, January 25, 2012. US Airways Group is a holding company that operates a major network air carrier through its wholly owned subsidiaries US Airways, Piedmont, PSA, MSC, and Airways Assurance Limited.
US Airways Group, Inc. Earnings Preview Cheat Sheet.
Wall St. Earnings Expectations: The average estimate of analysts is for a loss of 2 cents per share, a swing from profit of 17 cents in the year earlier quarter. During the past three months, the average estimate has moved up from a loss of 30 cents. Between one and three months ago, the average estimate moved up. It has risen from a loss of 21 cents during the last month. Analysts are projecting profit to rise by 76.1% versus last year to 56 cents.
Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the third quarter, it reported net income of 50 cents per share against a mean estimate of profit of 47 cents per share. In the second quarter, it missed forecasts by 3 cents.
Wall St. Revenue Expectations: On average, analysts predict $3.14 billion in revenue this quarter, a rise of 7.9% from the year ago quarter. Analysts are forecasting total revenue of $13.04 billion for the year, a rise of 9.5% from last year’s revenue of $11.91 billion.
Analyst Ratings: Analysts are bullish on this stock with seven analysts rating it as a buy, none rating it as a sell and three rating it as a hold.
A Look Back: In the third quarter, profit fell 68.3% to $76 million (41 cents a share) from $240 million ($1.22 a share) the year earlier, but exceeded analyst expectations. Revenue rose 8.1% to $3.44 billion from $3.18 billion.
Key Stats:
Revenue has risen the past four quarters. Revenue rose 10.5% in the second quarter from the year earlier, climbed 11.7% in the ! first qu arter from the year-ago quarter and 10.7% in the fourth quarter of the last fiscal year.
Competitors to Watch: Delta Air Lines, Inc. (NYSE:DAL), AMR Corporation (NYSE:AMR), Southwest Airlines Co. (NYSE:LUV), JetBlue Airways Corp. (NASDAQ:JBLU), Alaska Air Group, Inc. (NYSE:ALK), United Continental Hldgs., Inc. (NYSE:UAL), Republic Airways Hldgs. Inc. (NASDAQ:RJET), AirTran Holdings, Inc. (NYSE:AAI), Hawaiian Holdings, Inc. (NASDAQ:HA), and Pinnacle Airlines Corp. (NASDAQ:PNCL).
Stock Price Performance: During November 18, 2011 to January 19, 2012, the stock price had risen $1.84 (41.6%) from $4.42 to $6.26. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 1, 2011 when shares rose for six-straight days, rising 23.5% (+94 cents) over that span. It saw one of its worst periods between July 7, 2011 and July 20, 2011 when shares fell for 10-straight days, falling 17.8% (-$1.49) over that span.
US Airways Group, Inc. Earnings Preview Cheat Sheet.
Wall St. Earnings Expectations: The average estimate of analysts is for a loss of 2 cents per share, a swing from profit of 17 cents in the year earlier quarter. During the past three months, the average estimate has moved up from a loss of 30 cents. Between one and three months ago, the average estimate moved up. It has risen from a loss of 21 cents during the last month. Analysts are projecting profit to rise by 76.1% versus last year to 56 cents.
Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the third quarter, it reported net income of 50 cents per share against a mean estimate of profit of 47 cents per share. In the second quarter, it missed forecasts by 3 cents.
Wall St. Revenue Expectations: On average, analysts predict $3.14 billion in revenue this quarter, a rise of 7.9% from the year ago quarter. Analysts are forecasting total revenue of $13.04 billion for the year, a rise of 9.5% from last year’s revenue of $11.91 billion.
Analyst Ratings: Analysts are bullish on this stock with seven analysts rating it as a buy, none rating it as a sell and three rating it as a hold.
A Look Back: In the third quarter, profit fell 68.3% to $76 million (41 cents a share) from $240 million ($1.22 a share) the year earlier, but exceeded analyst expectations. Revenue rose 8.1% to $3.44 billion from $3.18 billion.
Key Stats:
Revenue has risen the past four quarters. Revenue rose 10.5% in the second quarter from the year earlier, climbed 11.7% in the ! first qu arter from the year-ago quarter and 10.7% in the fourth quarter of the last fiscal year.
Competitors to Watch: Delta Air Lines, Inc. (NYSE:DAL), AMR Corporation (NYSE:AMR), Southwest Airlines Co. (NYSE:LUV), JetBlue Airways Corp. (NASDAQ:JBLU), Alaska Air Group, Inc. (NYSE:ALK), United Continental Hldgs., Inc. (NYSE:UAL), Republic Airways Hldgs. Inc. (NASDAQ:RJET), AirTran Holdings, Inc. (NYSE:AAI), Hawaiian Holdings, Inc. (NASDAQ:HA), and Pinnacle Airlines Corp. (NASDAQ:PNCL).
Stock Price Performance: During November 18, 2011 to January 19, 2012, the stock price had risen $1.84 (41.6%) from $4.42 to $6.26. The stock price saw one of its best stretches over the last year between November 23, 2011 and December 1, 2011 when shares rose for six-straight days, rising 23.5% (+94 cents) over that span. It saw one of its worst periods between July 7, 2011 and July 20, 2011 when shares fell for 10-straight days, falling 17.8% (-$1.49) over that span.
Sunday, February 12, 2012
Costco Wholesale Corporation price grew and Hit 12 months New High - NASDAQ:COST
Costco Wholesale Corporation (NASDAQ:COST) achieved its new 52 week high price of $88.68 where it was opened at $87.65 down -0.36 points or -0.41% by closing at $86.73. COST transacted shares during the day were over 2.62 million shares however it has an average volume of 2.41 million shares.
COST has a market capitalization $37.59 billion and an enterprise value at $34.29 billion. Trailing twelve months price to sales ratio of the stock was 0.42 while price to book ratio in most recent quarter was 3.15. In profitability ratios, net profit margin in past twelve months appeared at 1.64% whereas operating profit margin for the same period at 2.74%.
The company made a return on asset of 6.03% in past twelve months and return on equity of 13.12% for similar period. In the period of trailing 12 months it generated revenue amounted to $88.92 billion gaining $203.88 revenue per share. Its year over year, quarterly growth of revenue was 16.80% holding 10.60% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $5.61 billion cash in hand making cash per share at 12.95. The total of $2.32 billion debt was there putting a total debt to equity ratio 18.44. Moreover its current ratio according to same quarter results was 1.14 and book value per share was 27.64.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.73% where the stock current price exhibited up beat from its 50 day moving average price $83.61 and remained above from its 200 Day Moving Average price $80.67.
COST holds 433.36 million outstanding shares with 428.81 million floating shares where insider possessed 0.89% and institutions kept 80.60%.
COST has a market capitalization $37.59 billion and an enterprise value at $34.29 billion. Trailing twelve months price to sales ratio of the stock was 0.42 while price to book ratio in most recent quarter was 3.15. In profitability ratios, net profit margin in past twelve months appeared at 1.64% whereas operating profit margin for the same period at 2.74%.
The company made a return on asset of 6.03% in past twelve months and return on equity of 13.12% for similar period. In the period of trailing 12 months it generated revenue amounted to $88.92 billion gaining $203.88 revenue per share. Its year over year, quarterly growth of revenue was 16.80% holding 10.60% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $5.61 billion cash in hand making cash per share at 12.95. The total of $2.32 billion debt was there putting a total debt to equity ratio 18.44. Moreover its current ratio according to same quarter results was 1.14 and book value per share was 27.64.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.73% where the stock current price exhibited up beat from its 50 day moving average price $83.61 and remained above from its 200 Day Moving Average price $80.67.
COST holds 433.36 million outstanding shares with 428.81 million floating shares where insider possessed 0.89% and institutions kept 80.60%.
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