Yesterday, we got what is best described as Quantitative Easing 4 (QE4) from Bernanke's Fed and we have to applaud the man and his fellow Fed Board members for doing the heavy lifting in Washington to keep the economic situation from getting really ugly as the politicians have been absent from policy making over the past few years.
The Fed has taken considerable heat for all of this easing they have done, but we want readers to ask themselves where we would be if the Fed had simply sat on their hands and not assumed the leadership position while letting Washington's politicians create policy to get us out of the economic troubles we have faced over the past few years. We imagine you will have a greater appreciation for their actions after pondering that for a few minutes.
We have economic news due out today, and it is as follows:
Initial Claims - 375k
Continuing Claims - 3200k
Retail Sales - 0.4%
Retail Sales - ex Auto - 0.0%
PPI - -0.2%
Core PPI - 0.1%
Business Inventories - 0.4%
Asian markets finished mixed today:
All Ordinaries - up 0.02%
Shanghai Composite - down 1.02%
Nikkei 225 - up 1.68%
NZSE 50 - down 0.51%
Seoul Composite - up 1.38%
In Europe markets are lower this morning:
CAC 40 - down 0.11%
DAX - down 0.63%
FTSE 100 - down 0.26%
OSE - down 0.18%
Yesterday saw BlackBerry maker Research In Motion (RIMM) move above $13/share as chatter about the Blackberry 10 is picking up. We are hearing a lot about it from people who used to be BlackBerry users who have since switched to Droids and iPhones and have stumbled across pictures and stories on the web. There is definitely buzz building around the product and so long as the product is what the company says it is (with the features and capabilities we have been promised over the past year or so) then consumers could be enticed back - although it is rare that a technology company that loses its leadership position in an industry is able to gain it back once it has fallen behind. Watch for the shares to continue to rise into the launch of their new operating system and phone from the current $13.31/share.
Teva Pharmaceuticals (TEVA) shares had a rough day yesterday as they retreated $2.20 (5.28%) to close at $39.47/share on volume of 20.9 million shares after the new CEO laid out the plan for the company moving forward. Investors are skeptical that the company can grow organically in the near-term by their goal as they move from an acquisition strategy to a developmental one with a newfound strategy of focusing on creating drugs to treat just a few illnesses.
As the company organizes itself to prepare for this new growth strategy, the EPS growth will come from cost cutting and other measures to become more efficient with new drugs hopefully kicking in after that to drive both bottom and top line growth into the future. Investors need to remember that this is a company which loses patents in the next few years, so product development is going to be quite important not just for growth but for maintaining current results.
Investors saw Procter & Gamble (PG) shares hit a new 52-week high of $70.99/share yesterday before settling down to close at $70.76/share on volume of 8.4 million shares. P&G was a great growth stock which looked like it may have gotten off the track a few years back as the company consolidated its Gillette acquisition and seemed to have dropped the ball in other areas of the business. Lately though the shares have been strong and after the current run-up the shares are just off of all-time highs. We doubt that those will be taken out before the end of the year, however should they continue to deliver we think over the next quarter we could see shares trade at new all-time highs.
We had a bit of a blast from the past yesterday when we saw the news that Gilead had agreed to purchase YM Biosciences (YMI) for roughly $510 million or $2.95/share in cash. Years ago we almost bought shares in this small biotech for under $1 but never ended up pulling the trigger due to a few concerns with the business at the time. The company will provide Gilead with added exposure to the oncology market and it appears Gilead will move the company's main drug in development on the fast track for getting approved by putting money behind it and starting a Phase III trial shortly after the transaction is closed. Shares rose $1.25 (76.69%) to close at $2.88/share with volume surpassing 121 million shares on the news of the buyout.
We wanted to highlight Gulfport Energy (GPOR) here this morning, rather than in our commodities article, in order to present this stock to another audience who might otherwise not hear about it. Yes, it is a commodity stock, but it is also a growth story as well which is probably the more important of the two facts. For those unfamiliar with the company, it has drilled some of the best results to date in the Utica - and we are not just discussing a few wells here and there but every single one of their wells being monsters and in that premier group.
This has been what has pushed shares to these levels and what has enabled the stock to hit new 52-week highs, which it did once again yesterday. Oh, and by the way, yesterday's new 52-week high was also a new all-time high. This is going to be one of the big winners in the Utica and the shares are well on their way to our initial $50/share price target. We remain buyers on pullbacks.