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Earnings highlights: Home Depot, Target, Sears, Campbell, Deere and more

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Home Depot, Target, Sears, Campbell, Deere and more

Analyst upgrades, downgrades and initiations: TGT, SWY, CSIQ, HOTT, MPEL, RIO, CPB, CVD and HGG

Analyst upgrades:
  • UBS upgraded Target (NYSE: TGT) to Buy from Neutral and raised its price target to $52 from $45 citing reduced inventories, some credit stability, and an improved back-to-school period.
  • Credit Suisse said concerns regarding Safeway's (NYSE: SWY) price position are overblown and that earnings risk is limited. The firm upgraded shares to Outperform from Neutral and raised the target price to $25 from $22.
  • Oppenheimer upgraded Canadian Solar (NASDAQ: CSIQ) to Outperform from Perform as it believes the story is underappreciated following the recent sector rally. The firm has a $14 price target on the stock.
  • CME Group (NASDAQ: CME) was upgraded to buy from Neutral at Goldman.
  • Freeport McMoRan (NYSE: FCX) was upgraded to Overweight from Neutral at JP Morgan.
  • Gilead Sciences (NASDAQ: GILD) was upgraded to Buy from Neutral at FTN Equity.

Continue reading Analyst upgrades, downgrades and initiations: TGT, SWY, CSIQ, HOTT, MPEL, RIO, CPB, CVD and HGG

Earnings highlights: Campbell, Sears, Home Depot, Nordstrom, Marvel and more

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Campbell, Sears, Home Depot, Nordstrom, Marvel and more

Safeway (SWY) Q4 earnings miss estimates

SWY logoSafeway (NYSE: SWY - option chain) stock is falling today after the company reported a fourth-quarter profit of $338 million, or 79 cents per share, missing analysts' projections of 81 cents per share. The grocery industry is generally expected to be a strong one during tough economic times, but the past few months have been hard on these stocks too. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SWY.

This morning, SWY opened at $19.83. So far today the stock has hit a low of $18.18 and a high of $19.84. As of 12:10, SWY is trading at $19.00, down $2.12 (-10.0%). The chart for SWY looks neutral and S&P gives SWY a 3 STARS (out of 5) hold ranking.

Continue reading Safeway (SWY) Q4 earnings miss estimates

Safeway: A frugality play, for the new era

Acting boldly in any stock market carries with it considerable risk. Acting boldly in this market, amid the U.S. recession and an unresolved toxic asset situation, and you're looking at a 30-40% haircut up ahead. (Or worse.)

Still, investors capable of tolerating risk would be wise to position themselves in a few defensive plays with decent upside potential. But let's make one thing clear: defensives with an upside are not, strictly speaking, conventional defensive plays. They carry more risk but, one could argue, that risk is reasonable, given the potential for the capital appreciation pop. With the above as a backdrop, grocery chain Safeway (NYSE: SWY) is worth a review.

Continue reading Safeway: A frugality play, for the new era

Cramer on BloggingStocks: Staggering losses of capital

TheStreet.com's Jim Cramer says big-caps are now mid-caps, mid-caps are now small-caps. The carnage is widespread and remarkable.

If you want revelations, go over the largest-cap companies right now vs. the ones that were the largest-cap last year at this time. The stocks, the losses, the changes, they are staggering.

First, the aggregate: The largest 100 companies a year ago were worth $8 trillion; they're now worth $5 trillion. That's a lot of missing trillions. In the day-to-day drudgery and decline, they seem largely unaccounted for until you look at each line item.

Continue reading Cramer on BloggingStocks: Staggering losses of capital

Stocks in the news: GS, GM, F, C, BBY, ADBE, CEG, BRK.A, BAC, AAPL ...

Goldman Sachs Group Inc. (NYSE: GS) is expected to report a fiscal fourth-quarter loss of $3.50-$3.73 a share according to different sources due to the falling value of many of its investments. The whisper number, however, may be worse, not to mention that future earnings and revenue are very much in jeopardy too due to the current climate which doesn't lend itself to people needing the services Goldman has to offer. Update: GS shares jumped over 5% after the bank said it lost $2.1 billion, or $4.97 a share during the fourth quarter.

General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler may be receiving strong signals from the White House that short-term help in the amount of $15 billion for the latter two is on the way. GM and Ford shares traded over 2% higher in premarket action.

Citigroup Inc. (NYSE: C)'s Japanese subsidiary said it will sell its Japanese trust banking unit to Mitsubishi UFJ Trust and Banking in an all-cash deal, valued at 25 billion yen ($277.6 million). The deal is expected to close around April 1. Citi shares were higher in premarket trade following the announcement. Citi also voiced upbeat view on Dubai.

Best Buy (NYSE: BBY) is also expected report earnings of 25 cents per share before the bell. Update: BBY profit fell, but it reaffirmed outlook; shares climb 6.5% in premarket trade. Adobe Systems Inc. (NASDAQ: ADBE) is due to report after the close and is expected to report profit of 58 cents a share for the latest quarter.

Continue reading Stocks in the news: GS, GM, F, C, BBY, ADBE, CEG, BRK.A, BAC, AAPL ...

Stock picks and pans for troubled times: DV, DLTR, BP, ATI, GE, C, MO, K, AAPL, CELG ...

Seems that even this shortened week was full of news and happenings, in the U.S. and around the world. With Citigroup Inc. (NYSE: C) being bailed out by the U.S. government at the beginning of the week and China announcing fiscal and monetary stimulus plans, the Dow industrials finished in positive territory four days in a row.

But as analysts and pundits, as well as each and every economic release -- in the U.S. and around the world -- remind us, we are not out of the woods yet and the rally has really been a bear-market rally.

Investors looking to take advantage of such rallies, or at least feel they hold stable long-term holdings, can search this week's BloggingStocks' contributors' picks:

Apollo Group (NASDAQ: APOL) and Devry Inc. (NYSE: DV) -- It's often been suggested that educators do well in times of recession and high unemployment as workers look to improve or change their education to get a better job. Leo Fasciocco thinks these two are poised for a breakout.

Dollar Tree Inc. (NASDAQ: DLTR) reported stronger-than-expected earnings this week and also hiked its forecast. Not surprisingly, cash-strapped consumers turn more and more to discounters. Dollar Tree may continue to benefit from the economic downturn and the stock could also experience a short-squeeze rally.

Continue reading Stock picks and pans for troubled times: DV, DLTR, BP, ATI, GE, C, MO, K, AAPL, CELG ...

Stay defensive: Invest in consumer staples

"If you're going to stay invested, you should look to defensive sectors," explain Ron Rowland and Brandon Clay, who point to consumer staples as a top pick for the current market environment.

In their Invest with an Edge, the advisors explain, "Perhaps the best way to stay defensive is with the Consumer Staples Select Sector SPDR (NYSE: XLP), an exchange traded fund.

"In a bear market, opportunities are usually limited to certain sectors. Surveying the investment horizon, we think the consumer staples sector has the best opportunity for growth in this economy.

"Regardless how the economy acts, people still eat. Consumers may not shop at Whole Foods, but they'll still buy groceries. Companies like Wal-Mart (NYSE: WMT) and Safeway (NYSE: SWY) will continue to rake in revenues from hungry customers.

"In addition, these companies should continue to receive additional revenue from consumers who normally shop at specialty stores, but can no longer afford to.

"Consumers may not be shopping at Sharper Image any more, but there are other creature comforts that will be difficult for Americans to abandon.

"Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) will still sell products during a prolonged downturn. In addition, companies providing toiletries and convenience like Procter and Gamble and CVS Pharmacy stand to do well during a shifty economy.

Continue reading Stay defensive: Invest in consumer staples

Supervalu disappoints Wall Street, is it still a buy?

Supervalu (NYSE: SVU), whose competitors include Kroger (NYSE: KR), Safeway (NYSE: SWY), and Wal-Mart (NYSE: WMT), reported results for its fiscal second quarter. Net sales unfortunately didn't budge much at all. They came in essentially flat at $10.2 billion. Earnings per share on an adjusted basis were $0.61. According to this article, the expectations were for $0.69 per share. So, as can be seen, Supervalu lost the analyst-expectations game by a wide margin. Last year's adjusted earnings were $0.64 per share. Not only are those numbers disappointing, but comps saw a decrease of over 1%. And the gross margin suffered as well.

So, we have an earnings miss, flat revenue growth, and a decline in the bottom line. What does all that add up to in terms of market reaction? The stock sees a bid. At the time I began writing this piece, it was up 2.5%. As I found with Kroger, the market may be looking at supermarket businesses as defensive plays. Of course, at the time I covered Kroger, that company's numbers were a lot better than Supervalu's.

However, last time I checked the stock before sending this piece in, it was becoming more volatile along with the market, moving from green to red in quick succession. Given the weak data, I can't say that I'd be considering Supervalu right now. It is true that people will continue to shop at supermarkets even during economic downturns, but I'd rather look at something the supermarket sells as opposed to the supermarket itself to get defensive. I'd rather align my portfolio with the stronger brand equity of perhaps a Kraft (NYSE: KFT) or a Procter & Gamble (NYSE: PG) than a Supervalu.

Disclosure: I don't own any company mentioned; positions can change at any time.

Earnings highlights: GE, IBM, Bank of America, Alcoa, Yum! Brands and others

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: GE, IBM, Bank of America, Alcoa, Yum! Brands and others

Before the bell: Stocks turn higher after rate cut; AA, AIG, COST, RIMM, YUM, BAC ...

U.S. stock futures turned higher Wednesday after the Federal Reserve, in a coordinated move with other central banks, cut rates by half a point to 1.5%, in an effort to help credit markets and boost financial markets. Before the rate cut, futures were lower as Wall Street was about to join global markets in a world-wide plunge that saw the Nikkei down 9.4% and European main markets down 5-6%. On the economic front, August pending home sales released later today might crimp the mood somewhat.

Alcoa Inc. (NYSE: AA) kicked off earnings season after the close Tuesday. The world's third-largest aluminum producer reported a 52% drop in third quarter profit as sharply lower aluminum prices and lower demand hurt results. AA shares are down 4% in pre-market trading.

American International Group Inc. (NYSE: AIG) -- in what could only be described as unbelievable nerve, days after the $85 billion federal bailout loan, AIG spent $440,000 on a posh California retreat for its executives that included spa treatments and much more. Lawmakers were enraged over the thousands of dollars AIG spent on executives even as the company was staving off bankruptcy. It seems it is morally bankrupt. AIG stock is recovering 5.4% this morning after the rate cut.

Continue reading Before the bell: Stocks turn higher after rate cut; AA, AIG, COST, RIMM, YUM, BAC ...

Safeway (SWY) misses, but still gets rewarded on Wall Street

When a stock comes in with earnings under analyst estimates, it usually gets punished. But in today's market any positive news is enough to keep shares in the green, and that is what we are seeing today with Safeway (NYSE: SWY) which is up strongly despite missing estimates for its third quarter.

First, let's get the bad news out of the way. Going into this morning's earnings announcement, analysts had been looking for earnings of 47 cents per share, but the company's actual earnings missed by a penny, with a reported 46 cents a share. With today's market environment, that in and of itself could have been enough to send shares crashing, but instead the stock is actually trading up 5.6% to $23.00, and earlier in the day was up as high as $23.75. Sounds crazy, but there is some good news to follow.

What the market is really interested in now is a company's forward looking estimate. Here the company showed real strength, and stood by its full year forecast of $2.25 to $2.35. Revenues during its third quarter were also strong, as the company showed revenues of $10.17 billion, verses estimates of $10.08 billion.

Continue reading Safeway (SWY) misses, but still gets rewarded on Wall Street

Look for smaller supermarkets and more 'local' markets ahead

Much of the U.S. economy -- save the oil/oil services sector -- is in a consolidation and right-sizing mode, or something resembling it. Retail chains, home builders, auto manufacturers etc. are all thinning their employee and production ranks, in anticipation of a period ahead with lighter demand. And most investors and readers all familiar with the consolidation in the investment banking sector.

Add another sector to the list: the grocery store sector. After more than a decade of building bigger and bigger stores (and superstores) retailers are experimenting with considerably smaller grocery stores that feature prepared meals in gourmet delis, and fresh produce, The New York Times reported Wednesday.

Safeway Inc. (NYSE: SWY) has opened a smaller-format store in Southern California, Jewel-Osco is building one in Chicago and Whole Foods Market, Inc. (NYSE: WFMI) is considering opening smaller stores, The Times reported.

Continue reading Look for smaller supermarkets and more 'local' markets ahead

Option Update: Safeway and SuperValu volatility elevated (KR, WMT, TGT)

Safeway (NYSE: SWY) closed at $26.34 Friday. SWY October option implied volatility of 39 is above its 26-week average of 35 according to Track Data, suggesting larger price movement.

SuperValu (NYSE: SVU) closed at $23.19 Friday. SVU October option implied volatility of 47 is above its 26-week average of 40, suggesting larger price movement.

Kroger (NYSE: KR) closed at $27.62 Friday. KR October option implied volatility of 32 is near its 26-week average, suggesting non-directional price risk.

Wal-Mart (NYSE: WMT) closed at $59.07 Friday. WMT is scheduled to report August sales on September 4. WMT September option implied volatility of 27 is near its 26-week average, suggesting non-directional price movement.

Target (NYSE: TGT) closed at $53.02 Friday. TGT is scheduled to report August sales on September 4. TGT October option implied volatility of 36 is below its 26-week average of 41, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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DJIA-223.328,280.74
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S&P 500-26.91896.42

Last updated: July 03, 2009: 10:32 PM

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