Tuesday Morning, August 28th
SITE NEWS
"Heart Attack Boosts Diabetes Risk": new article available at Ice Cold Stocks' "Investors Health Section.
Read it at http://icecoldstocks.com/investors_health/heart_diabetes.html
Two new articles are now available in the ICS Education section: "Bull 'n Bear Patterns" and "What is Technical Analysis?"
Read them here: http://icecoldstocks.com/education.html
Dow Stock News
Dow Jones News:
General Motors (GM) is still interested in taking a stake in Malayasia's flagship automaker Proton Holdings Bhd. (5304.KU), and has made a proposal to the government, a senior executive of the U.S. giant said Tuesday.
Kuwait Airways canceled a deal to buy $3 billion worth of 19 new Boeing Co. (BA) and Airbus planes from Aviation Lease & Finance Co. after the oil-rich Gulf state's government blocked the plan, Alafco said in a statement Tuesday. - MarketWatch
Caterpillar Inc. (CAT) announced today its intention to build state-of-the-art small and medium diesel engines in Wuxi, Jiangsu province, China. The engine campus in Wuxi fits into Caterpillar's comprehensive global engine strategy, and it is a key element in the rapid establishment of Caterpillar's proven business model in China. Caterpillar has signed a non-binding memorandum of understanding with the Wuxi National High-Tech Industrial Development Zone outlining a significant multi-year investment to develop and manufacture Perkins and Caterpillar branded engines in Wuxi. The first of the planned engine operations in Wuxi will focus on production of the Perkins 400 Series, the world-class and highly successful three and four-cylinder diesel engines.
The Wall Street Journal writes that HP (HPQ) is coming out with new printers to offset the sharing of documents and photos over the internet.
PG Procter & Gamble BMO Capital Markets Initiated at Outperform
Ice Man Stocks
Breakouts the Ice Man may consider trading:
SYNA - 42.75
Regular Trades the Ice Man may consider:
ATV - 14.85
IDXX - 109.50
IDSY - 12.25
Depressed stocks the Ice Man may buy:
MER - 71.15 Gap
LEH - 54.75 Gap
BTJ - 37 Gap
FCX - 81.30 Gap
BLK - 153.30 Gap
PJC - 47.60 Gap
BEN - 123.70 Gap
RATE - 37.30 Gap
AAPL - 127.60 Gap
GE - 37.20 Gap
TXI - 72.40
Breakdown Shorts:
CMG - has 96 downside Gap
TSL - has 37 downside Gap
Dollar Man Ideas:
CPSL - 4.30
CTDC - closed at the high
CORT - 3
JADE - 6.90
BBX - 9
EMMS - 6.50
Media Commentators
Cramer's Comments:
Bullish: GPS, KSS, AEO
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains August 28 includes:ITW, SUF, EAS, CORT, ACTU, CGDF ,MCRI, VLTR.
Several candidates for break out or short sell plays for at least short term gains by buying the break out (or selling the break down) on good volume and closing at least some on the first day.
CNBC Fast Money Review
Users Guide Volume 1:
How to Trade the News:
Adami: look at what the stock has been doing prior to the news especially at volume, look at the PE compared to the group and you might see the news is already in the stock
Macke: if the news is on the cover of Newsweek or many publications then its probably in the stock, look if the news is viable - does it really make a difference to the stock, and know when your trading has been bad and back away
Strazzini: how does this affect the stock individually as well as other stocks in the group, is this a big milestone like a new chip release
Bolling: one thing is clear that because of the liquidity in the market you can chase some of these stories for some profit which you couldn´t do 5- 10 years ago.
How to trade earnings announcements:
Besides some of the ideas about trading news, additionall you should consider:
Strazzini: look at who releases early in the cycle and how there numbers effect the stock and others in the group
Macke: must look for companies early in the earnings announcement cycle because later all the news is factored in.
Adami: If GS reports great numbers then all the brokers will, but this is not true for the Drug sector so you need to know your sector
Bolling: earnings in oil follow each other, if earnings in one are good then most likely the rest will follow
How to Trade Oil´s impact:
Bolling: if oil goes to $30 then we have a global slowdown and you want to be in cash, but if oil goes to $100 we have a boom and look to own Gold and direct names like CVX.
Macke: Look at year over year prices at the pump. Those increases can cause a strain on the consumer and could reflect in Retail numbers
Strazzini: for a large company in the chemicals like DD the dollar is as big as oil on earnings. Oil could effect as much as a 20% swing in a chemical companies earnings
Know your industry:
Retail:
Macke: higher Gas prices at the pump year over year is negative for Retailers
Tech:
Strazzini: Look for profitability especially at Average Selling Price (ASPs) - The higher the better, what happens in the is inventory rises so price decreases to unload the inventory which is why this becomes a cyclical market, lastly look at market share and is the industry growing or are people taking share from each other
Oil:
Bolling: look at the normal fundamentals, geopolitics, and weather
Industrials:
Adami: understand the supply chain, when BA gets a big contract know who else will benefit with orders
Financials:
Radigan:
Insurance: watch out that big storms are not always negative for this industry and the premium/loss number above 1 is important - this tracks how much money comes in vs. what they pay out
Banks: look at net interest margins - this tracks how much the bank makes on the interest they loan out and as the yield curve tightens so can this rate. Watch how certain banks handle this.
Brokers: “League’ Tables tells you who is bringing the most debt to market and doing the most underwriting
News and Events Digest
Breaking News
Warren Buffett's appetite for rail stocks continues as the billionaire raises his stake in Burlington Northern Santa Fe. Berkshire-Hathaway now owns nearly 14.8% of the No. 2 U.S. railroad company. - CNBC
Renewable energy company Environmental Power Corp. (EPG) filed with regulators on Monday to sell up to 4.5 million shares. - Reuters
UnitedHealth Group Inc. received conditional approval from state regulators Monday for its proposed $2.6 billion purchase of Sierra Health Services Inc., Nevada's largest health insurer. - AP
Human Genome Sciences Inc. (HGSI) will receive a $40 million milestone payment from Novartis AG (NVS) for the successful completion of a Phase II trial of Albuferon, a treatment for chronic hepatitis C. Human Genome, a Rockville, Md., genome sciences company, said milestone payments received under its Albuferon co-development and commercialization agreement now total $132.5 million. Additionally, Human Genome said it completed enrollment and initial dosing ahead of schedule in the first of two pivotal Phase III trials of Albuferon in combination with ribavirin. Phase III data is expected to be available in the fall of 2009. - MarketWatch
Media Summary:
According to Reuters, State Street (STT) faces $22 billion exposure to asset-backed commercial paper conduits, the off-balance sheet vehicles that have caused problems for rivals in recent weeks.
Reuters writes that social networks are drawing new investors as Classmates.com and Bebo.com consider IPOs.
The Wall Street Journal expects that Nasdaq (NDAQ) will have trouble selling its stake in the London Stock Exchange.
The New York Times writes that Macau is passing Las Vegas as the work capital of gambling as companies like Wynn and MGM Mirage open casinos there.
The FT writes that credit card defaults are rising in the US.
Barron's writes that Citi has dropped its rating on AMD (AMD).
M&A Activity:
Medco Health Solutions Inc. (MHS) has agreed to acquire diabetes-care provider PolyMedica Corp. (PLMD) in a $1.5 billion transaction, the companies announced. Terms call for Medco to pay $53 a share in cash for Wakefield, Mass.-based PolyMedica, shares of which ended Monday's dealings at $45.29. The transaction's expected to be "slightly accretive" to Medco in 2008, the Franklin Lakes, N.J.-based company said. A combined Medco-PolyMedica will serve 3.8 million diabetes patients under treatment. The parties expect to close on the deal late this year. Lazard and Deutsche Bank Securities served as financial advisors to Medco and PolyMedica, respectively. Sullivan & Cromwell and Weil Gotshal & Manges acted as the companies' respective legal counsel. - MarketWatch
Economic Data:
10:00 Consumer Confidence
2:00 FOMC minutes
Upgrades and Downgrades by Sector:
Brokers:
BSC, C, LEH - downgraded to Neutral at Merrill while GS and MS are Top Picks
Advertising
VCLK ValueClick Needham & Co Upgraded from Hold to Buy $27
Aerospace
LIMC Limco-Piedmont Stifel Nicolaus Initiated at Buy $15
Apparel
TRLG True Religion Brean Murray Price Target Raised Buy $22 to $24
Biotech
BMTI Biomimetic Therapeutics Wachovia Initiated at Outperform
LIFC LifeCell Wachovia Initiated at Outperform
Computer Software
WBSN Websense Jefferies & Co Upgraded from Underperform to Hold $19
TMWD Tumbleweed Comms Henley & Company Initiated at Speculative Buy $8
MENT Mentor Graphics Matrix Research Downgraded from Buy to Hold
Construction
NDSN Nordson BMO Capital Markets Price Target Raised Market Perform $50 to $52
CBI CB&I Stanford Research Downgraded from Hold to Sell
Foods
SYY Sysco Citigroup Initiated at Buy
Health-Beauty Prod
AVP Avon Products BMO Capital Markets Initiated at Outperform
Healthcare
OSIP OSI Pharm Lehman Brothers Upgraded from Underweight to Overweight
PLMD PolyMedica First Albany Price Target Raised Buy $49 to $50
CYH and UHS at FBR Initiated at Outperform
Household Goods
NWL Newell Rubbermaid BMO Capital Markets Initiated at Outperform
Internet Services
BIDU HAMR Price Target Raised $250
Major Pharmaceutical
NRMX Neurochem UBS Cut Price Target Sell $4.50 to $1
AVRX Avalon Pharma Susquehanna Financial Coverage Dropped Neutral
Mfg-Household Goods
SPC Spectrum Brands BMO Capital Markets Initiated at Outperform
Oil and Gas
OII Oceaneering Intl Stanford Research Downgraded from Buy to Hold
Recreation
ELY Callaway Golf Matrix Research Upgraded from Hold to Strong Buy
REITs
OHI Omega Health UBS Cut Price Target Neutral $18 to $15.50
Retail Trade
GPS Gap Inc Susquehanna Financial Upgraded from Neutral to Positive
Semiconductors
MXIM Maxim Integrated Banc of America Sec Downgraded from Buy to Neutral
Specialty Funds
MF MF Global Credit Suisse Initiated at Outperform $33
MF MF Global Lehman Brothers Initiated at Overweight
MF MF Global JP Morgan Initiated at Overweight
Telecommunications
IDSY I.D. Systems Dougherty & Company Price Target Raised Buy $11 to $13
JNPR Juniper Networks UBS Price Target Raised Neutral $29 to $35
Utilities
DTE DTE Energy KeyBanc Capital Mkts / McDonald Downgraded from Buy to Hold