The Oxen Group's Instablog

Oxen Nightly - Dow Hits 12,000, Netflix Kills It, and Oxen Group Goes 4/5

Wed, 26 Jan 2011 23:39:53 -0500

Oxen Group Nightly - Jan. 26, 2011 (www.theoxengroup.com)

The markets made it slightly higher on Wednesday after spending most of the day even higher in the green, but the real story came in after hours with a great round of earnings headed up by Netflix (NFLX) and Qualcomm (QCOM). Intraday, the market hit 12,000 before faltering off that level. The market moved up after bullish news from President Obama that he wants to have lower tax rates for businesses at the same time curbing government spending (good luck!). Further, the Fed commented that they were not making any changes to their $600B bond-buying plan or changing borrowing rates.

The Dow finished up 8. The Nasdaq finished up 20. The S&P 500 finished up 5.5. Gold finished up nearly a point.

The Oxen Group performed exceptionally on the day. We were able to close a number of positions in the green and get solid earnings exposure in AH. We closed 3/4 of our position in Ryland Homes (RYL) before the close for a 3.5% gain. While earnings came out lackluster, the stock did not lose value in AH. We also closed our two-day Overnight Trade in Royal-Caribbean (RCL) before earnings as the stock gained over 3.5% from our entry yesterday. We also closed 3/4 of E*Trade (ETFC) for a 0.70% gain intraday, but earnings were weak in AH. The stock looks like it will open lower tomorrow, and we will close neutral. We also bought Netflix (NFLX) to start the day, but the stock trailed off the morning highs. We closed 3/4 of the position for a 1.5% loss. Yet, our entry at 185.20 is looking very solid after a great earnings report that has taken the stock over 200 in AH. We will close the stock tomorrow in the green. Our only major loss for the day was a 1.5% loss in our Short Sale Overnight Trade in MOLX that did not work out well after the stock was upgraded this morning.

On the Longtem Portfolio, we did not have any new positions today. Our solar group lost some value after a major run-up, but we have cashed in on gains for these stocks already. We did do an update on Trina Solar (TSL) and reiterated the stock as a Buy. We did, however, increase the price target to $39.

Moving into tomorrow, we are holding RUTH, a 1/4 position in ETFC, NFLX, and RYL. After the open, we will be down to our doubled position in RUTH only. Tomorrow, we will be able to reload on some new Midterm Trades that look good moving into next week's earnings and other positions.

Economic news was great today with new home sales leading the way. Sales came out at 329K versus the consensus expectations of 300K. This news helped our RYL position. Tomorrow, jobless claims and durable orders are on the docket, but earnings will rule.

In company news, earnings continue to rule the market. This evening, Netflix (NFLX) made quite a move with an EPS of 0.87 vs. 0.71 and a great subscriber base that beat expectations with over 2M new subscribers in Q4. Additionally, Qualcomm (QCOM) had excellent earnings with an EPS beat at 0.82 vs. 0.72. Tomorrow morning, AT&T (T), Caterpillar (CAT), Nokia (NOK), and Procter & Gamble (PG) our important earnings.

Articles for today:

The Oxen Report: Buy Pick in Movie Giant

Oxen Group Reiterates Buy on Trina Solar, Ups Price Target to $39

Guest Articles:

John Mason: China Leads the World…in Clean-Energy Power

Investment U: Emerging Market Healthcare Trend

Cartoon of the Day:

Quote of the Day:

"Based on my own personal experience -- both as an investor in recent years and an expert witness in years past -- rarely do more than three or four variables really count. Everything else is noise."

-- Marty Whitman

Visit us at www.theoxengroup.com. Email us at contact@theoxengroup.com or call us at 1.800.790.1160.

Good Investing!

Oxen Nightly - Dow Nears 12,000, Oxen Group Continues Winning Ways

Tue, 25 Jan 2011 00:38:53 -0500

The markets continued to shoot higher to start off this week after good news was released from a number of companies, and the Dow finished within 200 points of 12,000, which is the highest it has been since June 2008. Intel gave technicals a big catalyst when the company announced that they will raise their dividend. Further, the National Association for Business Economics commented that they are most optimistic about the economy and jobs coming back since December of 2007. Overall, though, the market showed great strength rebounding on bargains that have hit the market after a red finish to last week.

The Dow finished up 108. The Nasdaq finished down 21. The S&P 500 finished down 1.66. Gold finished neutral.

The Oxen Group finished the day well with a solid day trade in Ethan Allen Interiors (ETH) that worked for 2.1% intraday. The stock made a nice move off of our early morning entry with earnings looming. Some investors who held the stock into earnings were given a great report, and the stock rose over 9% in after hours. We, additionally, entered into four new positions today. We took a double position in Ruth's Hospitality (RUTH) as the stock looked poised to make a nice bounce after a two-week drop. We took another position in DryShips (DRYS) as the stock has dropped to levels it was at in November, and it looks poised for a bounce. We also entered two new plays of the week in E*Trade (ETFC) and Ryland Homes (RYL). Both stocks looked poised for big gains before earnings as we entered them today.

On the Longtem Portfolio, we were able to exit a 1/3 position in one of our holdings in Trina Solar (TSL). The Longterm Ratings Portfolio has now improved to 2% realized gains with our four exits thus far in the $46,000 Portfolio. We have 10/12 positions in the green. We, additionally, updated our Skechers story with a reiteration at Hold and dropped our price target from 28 to 24.

Moving into tomorrow, we are holding RUTH, DRYS, ETFC, and RYL. We will be hoping for some good news out of Consumer Confidence and the Housing Market Index as well as strong earnings to help keep this rally going. The buy up today on limited news was a great sign for the market.

Economic news was limited today to the Economics Board news, but tomorrow starts off a big week of economic news. Tomorrow, we see Consumer Confidence coming out and the NAHB Home Price Index. Both can have a nice impact on the markets. Yet, company news will be big.

In company news, earnings continue to rule the market. This evening, American Express announced their anticipated miss of 0.94 EPS vs. 0.97. Amgen beat estimates and saw revenue rise just 1% YOY. The pharma company was flat in AH. Zions (ZION) disappointed with their earnings, continuing a poor theme for the financials. These should be overshadowed, however, by tomorrow morning's big earnings from 3M, AK Steel, BlackRock, and Johnson & Johnson.

Articles for today:

The Oxen Report: Buy Pick in Small-Cap Home Goods Store

Premium Trade: Two Plays of the Week in the Housing Sector and Investment Sector

The Oxen Group Reiterates Hold Rating on Skechers, Drops Price Target from 28 to 24

Guest Articles:

John Mason: Banking is Changing – Look Out for Opportunities

Cartoon of the Day:

Quote of the Day:

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."

– Warren Buffett

Visit us at www.theoxengroup.com. Email us at contact@theoxengroup.com or call us at 1.800.790.1160.

Good Investing!

The Afternoon Snack: Portugal Brings Market Down, Bulls Bring It Up, Oxen Group Reloads

Mon, 10 Jan 2011 15:59:23 -0500

The market spent the day rebounding after an early drop on news that Portugal may be on the brink of its own European Union bailout. After a weak start to the day, things continued upwards led by tech as news from the CES conference started to price into the market, and investors started to buy up some companies that had become more undervalued in the recent weakness in the market. Additionally, the start of earnings season may have helped push the markets up throughout the day from lows as Alcoa kicks off Q4 earnings today.

The Dow finished up (). The Nasdaq finished up (). The S&P 500 finished up (). Gold finished (). Silver finished ().

On the economics front, news was limited, but this week is a big week for data. Coming out this week, we have wholesale inventories, export/import information, the Treasury Budget, the Fed's Beige Book, job claims, Producer Price Index, Consumer Price Index, Trade Balance, retail sales, industrial production, Michigan Consumer Sentiment, and business inventories. Yikes! That is a lot, and it is coupled with the start of a week full of earnings. Alcoa, JPMorgan, and Intel should be a nice barometer of what is to come in the industrial, financial, and tech side of things.

Company news was limited, but the anticipation of earnings is on the minds of everyone. Corporate deals started the week as DuPont bought a Danish food maker for $5.8B. Duke Energy Corp. bought out Progress Energy Inc. for $13B. More corporate dealings should be positive for the market as it is a sign that companies see demand and health returning to the economy. The big news is that Alcoa will report earnings tonight that are scheduled to be at 0.18 EPS. This is double over what the company did in Q3.

The Oxen Group performed well on the day. We were able to exit two positions in the green. We exited Gammon Gold (GRS) for a 1.4% gain at 7.88 after the company reported early guidance on Q4 at strong levels. We also exited a position in Advanced Semi (ASX) for a minute gain at 0.55% to help open up some cash to get involved with SuperValu (SVU).

Moving into tomorrow, we are holding positions in Bank of Ireland (IRE), Citigroup C, Intel (INTC), GFI Group (GFIG), and SuperValu (SVU). IRE and C need a positive day to make a rise as financials have beaten down over the past several trading sessions. INTC, GFIG, and SVU were new entries today. We are looking for INTC to move throughout the week as our Play of the Week. GFIG hit a bottom of a trading range today at 4.60, and we are looking for GFIG to move a solid 3-5% off this bottom. SVU is an Overnight Trade that looks solid for a nice gain after being undervalued into earnings.

On our Longterm Ratings Portfolio, we are looking very good at this point as the portfolio has increased in value by 5% since its inception at the end of December. Dean Foods (DF) is nearing a target exit at 10.07, and we are looking to sell one third of our position in the stock at that point.

Market buying once again on a dip today. Anticipation of earnings is high, and they will have a big impact on our direction moving forward.

That's it for today.

Good Investing!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The Afternoon Snack: Market Rebounds on Fed News, Big Day for Oxen Group

Tue, 04 Jan 2011 16:04:15 -0500

2011 continued to show strength as the market rebounded off midday lows to finish neutral. The major news on the day was that the Fed has announced they will continue $600B treasury bond buying program that is supposed to help jumpstart the economy by giving more money for the government to use for employment purposes. The market fell early as investors started to take profits on a number of overvalued equities, but the market rallied after the Fed minutes as investors were happy to hear that the Fed is continuing to pump money into the economy.

The Dow finished up 19. The Nasdaq finished down 10. The S&P 500 finished down 2. Gold finished down 43. Oil finished down 2.5.

On the economics front, there was positive news out from factory orders and auto sales. Factory orders rose in December to 0.7%, while consensus estimates were expected to be at -0.3%. Auto sales were on the upswing to finish out 2010, which is a positive sign for what may happen in 2011 as buyers continue to move back into big-ticket items.

Company news was very limited before the first major round of earnings in 2011 and in a couple weeks. Ford and General Motors announced that they saw sales rose 15% and 6%, respectively. Grocery stores were downgrade targets on Tuesday as the companies appear slightly overvalued moving into 2011.

The Oxen Group performed very well on the day. We entered four positions on the day, and we were able to exit four positions. In the morning Oxen Report, we recommended a position in USAT at 1.31 that we were able to quicklyturn for a 2.3% gain to exit at 1.34. We were able to exit our Buy Pick from yesterday in Urban Outfitters (URBN) for a 2.09% as the stock rallied after a Monday downgrade. We got out of half of our Dec. 30 Macy's position at 25.40 for a 0.80% gain as the stock was looking to move down. We also were able to exit SONC at 10.14 on average for 80% of the position, holding the rest into earnings.

Moving into tomorrow, we are holding positions in Macy's (M), RUTH, Sonic (SONC), and TAM. We reentered Macy's at 24.75 as the stock looked too weak moving into what could be a big day for retail tomorrow on December sales news. We picked up RUTH as it hit a low it has not seen in weeks at 4.59, and we are looking to exit at 4.68. We also picked up shares of SONC at lunchtime to play a late-day move. We exited 80% before the close, but we are 20% into earnings as the company looks underestimated and does not have a lot of downward movement left in it. Finally, we are still holding our Play of the Week in TAM. We are waiting for a Goldman Sachs upgrade to take shape. We have lowered our estimates to 24.62 for this one.

We had a really positive thing happen today. At the beginning of the day, I speculated for members that we would probably see this pulldown as a buying opportunity. We bought three new positions that have all gone green. The market is still very bullish, and we should use pullbacks as chances to reload on positions we like. Moving into tomorrow, we have important retail earnings. Those will be pretty crucial to tomorrow. I am expecting them to be positive.

That's it for today.

Good Investing!

David Ristau

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The Afternoon Snack: Light Trading Can’t Stop Bulls, Facebook IPO?, and Oxen Group Unveils Longterm Portfolio

Wed, 29 Dec 2010 15:49:42 -0500

The markets continued higher today on thin trading as the S&P 500 is looking to have its best December in two decades. There was no tremendous news that moved the markets. Rather, thin trading tends to harken momentum that is hard to overcome, and the market has continued to register positive momentum. Investors have continued to see positive data throughout December, which has allowed them to believe that next year's prospects should be strong. The dollar's decline helped the markets, but its decline is most likely due to positive movement on stocks.

The Dow finished up (). The Nasdaq finished up (). The S&P 500 finished up (). Gold finished (). Silver finished ().

On the economics front, there was no major data still out. Tomorrow, the market will get a bevy of data, however, from the pending home sales to crude oil inventories to jobless claims to the Chicago PMI. All pieces of data should have a major influence on the market. It will be interesting to see if disappointing news will be viewed as a buying opportunity or the badnews will hurt the markets significantly with a lot of overvalued and toppy equities.

In other company news, Facebook may have to debut its first IPO after SEC investigates its private trading and the shadow market that surrounds it. BJ's Wholesale (BJ) was up big today after news that the company may get a buyout bid from Leonard Green & Partners. Sears Holding (SHLD) announced that they will be launching an on-demand video service that they hope can rival Netflix. It sent shares up more than 6%.

The Oxen Group performed well on the day. We exited three positions (2 positive, 1 negative) and positioned ourselves into another position. We were able to make a quick 3.5% on our recommendation of Rightnow Tech (RNOW). After a large drop yesterday on a single trade, the stock was well undervalued. The company got an upgrade in addition to help their cause from Piper Jaffray. We were able to recommend entry at 21.99 and saw shares soar to 21.77 before exiting. We made another quick 3% with Bank of Ireland (IRE) as the stock went from 2.52 to 2.58 during the trading day per our recommendation. We lost 3%, however, on Ultrashort Proshares Real Estate ETF (SRS) as the ETF continued to fell.

Additionally, The Oxen Group launched its brand new Longterm Ratings Portfolio. The Portfolio is modeled off the Longterm Ratings that cover a number of companies. This portfolio has recommended positions in thirteen equities on a longterm outlook. Some of the companies involved include Baidu, shorting Green Mountain Coffee Roasters, Dean Foods, and Trina Solar. The Portfolio is the third for The Oxen Group, which also has a short-term Buy Pick portfolio and Short Portfolio.

Moving into tomorrow, we are holding positions in a Short Sale in SINA Corp. (SINA) that was entered at an average position of 70.42. This stock has been a narrow trading range that has not allowed for much movement. We are holding a mid-term position in GFI Group (GFIG) as well with an entry at 4.60, looking for a 3% gain before exit.

My take is that we have a big day coming into tomorrow. Bad news would tell a lot, while good news should continue a run up. If we receive bad news, it will be interesting to see how the market reacts. If we have a sharp decline without much bottoming intraday, that would be a bearish signal. My guess is that a 1% movement down will only create buying opportunities that will be quickly covered back up. We will see...

That's it for today.

Good Investing!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The Oxen Group Reiterates Hold Rating on Ryland Homes, Fair Value at $20

Mon, 27 Dec 2010 12:59:33 -0500

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.