We are upgrading Alkermes Plc (ALKS) to Outperform following the upwardly revised adjusted earnings guidance provided by the company for fiscal 2013. The guidance was boosted following the successful completion of the refinancing of Alkermes' previously outstanding senior secured bank debt. Alkermes has been performing well since the purchase of Elan's EDT unit last year, […]
Archives for October 2012
October 2012 - Page 4 of 20 - Money Morning - Only the News You Can Profit From
Election 2012 Means the Real Bernanke Bombshells Won't Fall Until December
If you were expecting big news from this week's Fed meeting it looks like you are going to be in for a long wait. This week's FOMC meeting was business as usual.
There was no change in interest rates, no change in the determination to keep rates low into 2015 and no change in the Fed's latest solution, otherwise known as QE infinity.
The truth is the real bombshells won't likely start until the Fed's next meeting in December. By then, the landscape could be completely changed.
With Election 2012 still at stake, it's who controls the Oval Office that matters most when it comes to Fed policy.
You'd never know that if all you did was watch the debates.
Ben Bernanke may well be the second most powerful person in the country, yet his name was never mentioned-not even once. Remarkably, monetary policy was completely absent from the debates.
Election 2012 and the Fed
That's true even though the two candidates differ substantially when it comes to the Federal Reserve.
For instance, Mitt Romney has repeatedly said he would not reappoint Ben Bernanke when the Fed chairman's current term ends in January 2014. Conversely, President Barack Obama has indicated his support for Bernanke and his easy money policies.
For that matter, Bernanke himself is in an open question. He may retire in January 2014 no matter who wins Election 2012.
However, at the December meeting one major thing will have changed: the time horizons of both investors and policymakers.
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Warren Buffett on Stocks, QE3 and the Deciding Factor in Election 2012
Legendary investor Warren Buffett appeared on CNBC's Squawk Box Wednesday morning to answer the biggest questions regarding the global economy, stocks, Election 2012, and more.
The CEO of Berkshire Hathaway (NYSE: BRK.A, BRK.B) remains confident that the U.S. is in better shape than other regions and he still believes the stock market is the best place for your money.
But with so much global uncertainty still swirling around, Buffett isn't ready to go on a buying spree.
Asked what investors should do, here's what Buffett had to say.
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Gold Prices in 2013: Where We'll Be in Six Months
Gold investors have enjoyed a bull market for more than 10 years.
In fact, the metal's string of annual gains is its longest winning streak in at least nine decades.
So it is hardly surprising that some investors are questioning whether the strong performance will continue for gold prices in 2013. Recent market activity shows a short-term pullback is on its way.
As Money Morning's Chief Investment Strategist Keith Fitz-Gerald explained today, "Many hedge funds and institutions are using gold to collateralize their marginable assets right now so one of the first things they're going to sell to raise cash when faced with a margin call is gold. They're also sitting on large profits that they'll immediately begin to take off the table in a sell-off. This will end up catching a lot of investors by surprise because they expect gold to take off when the stuff hits the fan."
But that doesn't mean the long-term 2013 gold price outlook is doomed.
Fitz-Gerald said gold will take off – "but only after it takes an initial hit."
In fact, Money Morning Global Resources Specialist Peter Krauth said gold could hit $2,200 by April or May.
Looking beyond the sell-off, here are three key drivers of gold prices in 2013.
Netflix (Nasdaq: NFLX): Time to Panic or Time to Buy?
When Netflix Inc. (Nasdaq: NFLX) reported earnings Tuesday, it beat estimates for both revenue and earnings per share – but the stock still slumped 12% yesterday.
The reason panicked investors dumped shares was because they learned that new subscribers in Netflix's domestic streaming business fell well short of management's aggressive guidance. Netflix predicted six months ago it would add 7 million streaming U.S. customers by the end of 2012, but it's now on pace to only add 5 million.
Now that NFLX stock is hovering around $60, is the market telling us that the Netflix growth story is over, and you should ditch shares like yesterday's sellers? Or are investors being handed a golden opportunity to buy Netflix at a bargain basement price?
To answer that, let's take a look at what's driving Netflix earnings.
Ameriprise Beats, Raises Dividend - Analyst Blog
Ameriprise Financial Inc.’s (AMP) third quarter 2012 operating earnings of $1.32 per share marginally beat the Zacks Consensus Estimate of $1.29. This was also favorable compared with the year-ago earnings of $1.19. Better-than-expected results were primarily driven by improved top line and a slight drop in operating expenses. Moreover, assets under management and administration showed […]
ANN Inc. - Aggressive Growth
ANN Inc. (ANN) has surpassed the Zacks Consensus Estimate for seven straight quarters with an average surprise of 11.1%. This specialty retailer of women’s clothing will report again in mid-November. Shares of this Zacks #1 Rank (Strong Buy) are up more than 40% year to date, thanks to bright prospects ahead with significant growth in […]
This New "Smart Bra" Could Save Your Life and Be Worth $2 Billion a Year
You need to hear Nedra Lindsay's story.
It's the tale about how a chance event saved her life and signaled the start of an exciting "biodata" investment story that may finally come to fruition in 2013.
It started in 1993, when Lindsay was just 24 year old nurse at an Ohio hospital.
She came across a flier about an experimental study of a new breast-cancer screening system. She nearly threw the paper away, because she didn't think the study applied to her.
After all, she was a good 15 years younger than the age at which most U.S. women begin getting mammograms (special chest X-rays designed to spot cancer in its early stages).
So she really had no reason to worry about breast cancer. She signed up anyway.
In the study, Lindsay tested an interesting wearable device – think of it as the type of sports bra a female runner might wear – that monitors vital health data. It works by using thousands of embedded sensors to check the heat of breast tissue and compare that with data about the correct temperature for healthy cells.
These thermal "fingerprints" are designed to detect cancer years before it would be large enough for a mammogram or self-exam to spot it.
Lindsay wore the bra for 24 hours, during which time it gathered data and sent it to her doctor.
The results were alarming. There was indeed abnormal tissue in her breasts. Three more costly tests confirmed it: She had a very aggressive form of cancer. The early detection helped her get early treatment.
But had she thrown that piece of paper away, Lindsay would most likely have been a cancer victim instead of a cancer survivor.
That's why today, at 45 years old, Lindsay is helping to spread the word about the small startup firm whose sensor-laden "smart bra" saved her life.
And here's the company that helped her beat cancer…
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How to Play Q4 Defense: Hedge Your Bets, Up Your Stops and Sell Your Gold
So far fourth quarter earnings have made a mockery of things.
Of the 20 S&P 500 companies that have provided Q4 guidance so far, 18 of them have guided lower, "slashing" their forecasts, according to Goldman Sachs and CNBC (as of Monday afternoon).
What's more, roughly one quarter of the reported earnings have come in flat to middling. According to Capital IQ, overall revenues are up only slightly at 0.34%.
Yet, for some reason the S&P 500 is only 3.89% off of its highs and is up 12.01% year-to-date through Wednesday afternoon.
Under the circumstances this suggests two things to me:
- There's a lot of volatility waiting in the wings; and,
- The near-term risk is to the downside.
First, let's tackle the volatility that's still in store; then we'll move on to what you can do to prepare for it.
The Q4 Earnings Story
So far this earnings season, roughly one quarter of the S&P 500 has already reported. That leaves the market with nearly 375 companies that have yet to spit out their numbers, roughly 150 alone this week.
Assuming the balance follows the pattern set so far, companies like Caterpillar Inc. (NYSE: CAT), Philip Morris International (NYSE: PM), and 3M Co. (NYSE: MMM) are going to show "respectable" (under the circumstances) numbers while talking about the "challenges" they see ahead.
Meanwhile, a few others, like DuPont (NYSE: DD) and United Technologies (NYSE: UTX), are going to reflect weakening earnings and revenue pressures leading to further cost-cutting as a means of protecting profits. These will include job cuts.
I also expect the bulk of the remaining companies will take the opportunity to lower their expectations — especially when you consider that 61% of the companies as of Monday afternoon missed revenue expectations.
The irony here is that 61% of the companies that have reported over the same period have also exceeded analysts' expectations.
Naturally the markets will punish those who missed even when what they should recognize is that the analysts were wrong yet again. But that's another story for another time.
What's important to understand is that top-tier company management is using this earnings season to accomplish three things.
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Forget Q4: Apple (Nasdaq: AAPL) Earnings Must Deliver in December
Even though Apple Inc.'s (Nasdaq: AAPL) earnings for Q4 aren't yet out – they'll be announced after Thursday's market close – the company is much more concerned with beating last year's spectacular December quarter, the company's fiscal first quarter.
Apple's Q1 earnings last year blew past all expectations. Apple earned $13.87 per share – more than doubling the profit from the year-earlier quarter — by selling a record 37 million iPhones and 11 million iPads.
And Apple is going to need the profits from every gadget it can sell if it hopes to top that benchmark.
That's why all eyes were focused on the long-anticipated iPad Mini yesterday (Tuesday), but the real story was the avalanche of product updates unleashed just in time to supercharge for its critical December quarter.
In addition to the Apple iPad Mini, the special event in San Jose, CA, included the surprise announcement of the fourth generation iPad, a revamp of the iMac and Mac Mini desktops, and a the upgrade of the 13-inch MacBook Pro laptop to a high-res Retina display.
"We're not taking our foot off the gas," said Apple CEO Tim Cook.
When taken together with the iPhone 5 launch and the upgrades to the iPod Touch and iPod Nano just last month, it adds up to an uncharacteristic bunching of product updates.
It means lots of fresh Apple gear in stores for the holidays, historically the company's biggest quarter of the year.
Why Apple (Nasdaq: AAPL) Needs Great Q1 Earnings
In a sense, Apple has become a victim of its own success.
The explosive growth of Apple earnings, driven by the explosive growth of iPhone sales (and that product's huge profit margins), has made huge earnings increases routine.
But Apple knows the tough comparisons to year-ago quarters will get Wall Street's attention.
And as Apple's growth rate slows, so will the rise of the stock.
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