Ockham Research's  Instablog

Analysts were expecting a pretty rough quarter from Alcoa (AA) with aluminum prices still low and industrial demand depressed.  Alcoa swung to a loss in the last quarter with at 28 cent per share deficit, and that number was expected to grow in the first quarter with consensus estimates predicting a 57 cent loss per share.  Revenue was expected to slow considerable to $4.08 billion, representing a 44.7% drop from last year.  Alcoa fell as much as 5% and finished the day down 2% for Tuesday's trading as traders feared the results would be even worse than forecast.

On CNBC's Mad Money, Jim Cramer has become more bullish over the last few weeks, and last week he even proclaimed that the bottom had been set.  While that would be great if he is right, we are not ready to shout from the roof tops just yet.  Last night he talked about his favorite speculative way to play the recovery.  He calls attention to a relatively small Taiwanese semiconductor company called Siliconware Precision Industries or SPIL.

Sanderson Farms (SAFM) is one of the premier poultry producing companies in the United States with $1.72 billion in sales last year.  However, as of this week's report we are downgrading Sanderson Farms to Overvalued.  The stock has enjoyed some significant appreciation recently as the stock is up nearly 15% in the last month.  Much of the recent momentum has centered around KeyBanc initiating coverage on Sanderson Farms as well as Tyson Foods (TSN).  The research note was pretty positive indicating that the analyst believe that the poultry business is due for a rebound.  The Keybanc analyst noted lower feed costs and a tendency for consumers to eat a home more often both should be positive for the stock.  Coverage of Sanderson Farms was initiated at a Buy rating, while Tyson was given a Hold.

News reports today are saying that talks between Sun Microsystems (JAVA) and IBM (IBM) have broken down, supposedly not over price.  According to the Wall Street Journal, talks broke down when the Sun board rejected the formal acquisition offer from IBM and sent notice that they had terminated the exclusivity of talks only with IBM.  Apparently the Sun board is split over whether to do the deal with the company's Chief Executive wanting to do the deal, but the company's co-founder and chairman Scott McNealy is opposed.