Fears are spreading in regards to economic growth worldwide, and that the EU may manage to mess up everything they have accomplished thus far. We continue to receive news from companies in the resources area indicating that a global slowdown may in fact be upon us, with all of this 'growth' simply manufactured inflation from central banks. That will be something to watch moving forward, but as we have stated we are bullish moving into the end of the year and it would take a lot more announcements from companies to change that view at this point.
We have economic news out today, it is as follows (data set - consensus).
- Case-Shiller 20-city Index - 0.8%
- Consumer Confidence - 63.0
- FHFA Housing Price Index - N/A
Looking at Asian markets we see markets are mixed:
- All Ordinaries - down 0.31%
- Shanghai Composite - down 0.19%
- Nikkei 225 - up 0.25%
- NZSE 50 - up 0.42%
- Seoul Composite - down 0.60%
In Europe markets are lower:
- CAC 40 - down 0.46%
- DAX - down 0.49%
- FTSE 100 - down 0.11%
- OSE - up 0.35%
OCZ Technology Group (OCZ) had a rough day yesterday with shares falling $0.20 (4.82%) to close at $3.95/share on volume of 4.4 million shares. We had been bearish on shares up until recently, when the CEO resigned to be precise, and the drop yesterday in no way changes our opinion on the outlook for the company. The company's shares should probably trade sideways until a new CEO is announced, and it is our opinion that the company will go out and find a tech veteran with supply chain management skills to take the helm. That is the best case for bulls, but even if investors get more of the same(in regards to the CEO) with the supply chain eventually fixing itself that would allow shares to rise as well. We continue to believe that shares at this level are a good speculation and will look to add shares to our retirement account after our next contribution at the end of the month.
Zynga (ZNGA) saw shares fall $0.295 (9.12%) on volume of 20.2 million shares and closing at $2.94/share. Shares fell in sympathy with Facebook after Barron's ran an article where they slammed the social network's shares based on valuation concerns. We have not been fans of Zynga since the IPO fiasco of the social network which it generates most of its revenues from, and that has been the correct trade. That has not changed as we view Zynga as nothing more than an overpriced call option on Facebook … sure you have a duration for as long as the company can stay solvent, but just because Facebook does well does not necessarily carry over to Zynga's business at all. We would continue to recommend that readers avoid shares and put their capital to better use.
JC Penney (JCP) has put together a string of down days now, with shares closing at $24.65/share after falling another $1.24 (4.79%) on strong volume of 9.7 million shares. Shares appear to be moving closer to their 52-week low, and as readers know that is where we believe that they should be. We are bullish quite a few names in the sector, but JC Penney is among a handful of names we really dislike based on their operating results and the strategy moving forward. Turnarounds in the sector take quite some time, and we think that time could be better spent investing elsewhere in the sector rather than trapping your capital in an entity which may or may not turn the corner at some point in the next 12-18 months.
Peregrine Pharmaceuticals (PPHM) got clobbered yesterday as the company announced that there were major discrepancies in the study which it only recently announced the results for. Investors saw shares fall $4.23 (78.48%) and closed at $1.16/share on volume of 68.4 million shares. Analysts came out and revised their price targets yesterday and many in the market are now thinking that bavituximab is not the cancer wonder drug they initially believed based off of the previously released results. There are ongoing trials here that the company says will not be affected, but we did voice some questions about this one and got a lot of negative feedback, but now it appears that we may have been onto something. These price levels for the shares do not interest us due to the news behind the drop, but we will continue to monitor the news flow coming out regarding the company to see if they are able to improve upon previously released results from dependable sources.
Questcor (QCOR) saw its shares lose more than 36% as 31.4 million shares were traded. The stock closed at $19.08 as federal regulators announced an inquiry into the company and numerous analysts lowered their ratings on the shares. The company has been a lightning rod recently as reports surfaced that they would face reimbursement issues for their drug Acthar, and news has only gotten worse for the company since then. The company did hit a new 52-week low yesterday in trading before bouncing back, but most analysts still have room to further lower their ratings and price targets on the shares and we would fully expect that moving forward.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.