F1Q10 (Qtr End 9/27/2009) Earnings Call

November 5, 2009 5:15 pm ET

Last week we published a visual view of price range probability cones for several securities (SPY, FXI, TLT and UUP). This article builds on the concepts in that article and provides a tabular view of the same kind of data for twenty-seven asset categories.

The two tables below show the maximum and minimum price change that statistics would suggest are probable over the 21 trading days after October 9 (last Friday), based on 21 days (1 month) and on 63 days (3 months) of historical price volatility.

F4Q09 Earnings Call

August 25, 2009 5:15 pm ET

Given the global economic instability, population trends, environmental, political and social challenges ahead; we are looking at a rapidly evolving requirement for the next ten years or more of increasing sustainable energy solutions.

Note the closing summary analysis, that provides details to these shifts coupled with the increasing price of oil from aging fields in the months and years ahead enabling the growth of sustainable energy sectors as supported by research data including from the EPA, DOE, and International Energy Agency, 2009.

Despite a sluggish forecast for the overall high-tech industry in the near term, alternative energies technologies are expected to grow at a 40% annual rate through 2012, and semiconductors used in these applications will see a comparable growth, according to a report Semiconductors for Alternative Energy Technologies: Opportunities and Markets, recently published by The Information Network.

This is the Fourth Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

We've already covered:

Despite a sluggish forecast for the overall high-tech industry in the near term, alternative energies technologies are expected to grow at up to a 40% annual rate through 2012, and semiconductors used in these applications will see a comparable growth.

Renewable, alternative energy technologies continue to grab the attention of private industries and world governments. Semiconductors are used in these technologies to convert the energy or power to something functional, such as converting solar energy into electricity.

F2Q09 (Qtr End 12/31/08) Earnings Call Transcript

These data were collected during the last phase of the recent bull market, and I was wondering what, if any, differences there would be between M&A data collected in bear markets. To that end, I looked at 36 takeovers collected between the end of June through the end of last December. (I tried to collect every takeover that I saw, but I'm sure my list is probably not complete.) The data is summarized in the table below. (Click to enlarge.)

Editor’s Note from EnergyTechStocks.com: In keeping with its policy to be solely a news source, this EnergyTechStocks.com article is presented for information purposes only.

Everyone knows the legend of Warren Buffett. EnergyTechStocks.com believes that 10 years from now, Josh Landess will be clean energy’s investing legend.

At the beginning of each calendar year, I sit down and see how my expenses have tracked over the past year. I make a table and a pie chart to show my wife. She is always amazed at how much goes to taxes, though the new amazement is what it takes to put children through college. We spend some time discussing plans for the next year. Since my wife is not money-oriented (not a big spender, and focused on teaching the children) this gives her a quick way to get reoriented in our financial situation.

After that, I look at investment income. 2008 was an unusual year for me in this way: it was the first year in my working life that my net worth fell. Though painful, at age 48, I’m grateful that I have had a good past.

This is the Third Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13Fs here. We've already covered:

• Timothy Barakett's Atticus Capital
• Whitney Tilson's T2 Partners
• Peter Thiel's Clarium Capital
• Bill Ackman's Pershing Square
• Bret Barakett's Tremblant Capital
• John Paulson's Paulson & Co
• David Einhorn's Greenlight Capital
• Dan Loeb's Third Point
• Paul Tudor Jones' Tudor Investment Corp

Next up, we have Moore Capital Management, ran by Louis Bacon. Moore, named after Bacon's middle name, is a $10 billion global macro set of hedge funds. The next few funds we will be covering are global macro oriented funds, which is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital , and Andreas Halvorsen's Viking Global. Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.

Conditions in the chip business continue to get worse. In fact, Friedman Billings Ramsey analyst Craig Berger this morning writes that “trends are worsening faster than we can cut estimates.” Well, not really. This morning, Berger chopped estimates and target prices for 10 stocks; he also downgraded Linear Technology (LLTC) and Maxim Integrated (MXIM) to Underperform from Market Perform, while lowering National Semiconductor to Market Perform from Outperform.

“Visibility is not stabilizing or improving but rather deteriorating further,” creating “additional downside risk or limited upside return in a stabilizing market.” He says that the global credit crunch has caused chip customers to reduce inventory in order to hoard cash. Berger notes that chip companies that recognize revenue on sell-in to the channel, rather on sell-through, are likely to see a more severe hit to revenue.

• Job loss lookout. Non-farm payrolls are expected to decline for the tenth straight month this morning (8:30 AM, website). Economists estimate the U.S. economy shed 200,000 jobs in October, which would be the current downturn's worst month, outdoing September's -159K reading. The last time losses exceeded 200K in a month was March 2003. Some economists think the 27,000-strong Boeing (BA) strike could push October's count to -250K; while still within 50K of the consensus, a worse-than-expected figure "will add to the view that the economy is entering a deep slowdown, a deep recession," John Herrmann from Herrmann Forecasting says.
• More begging from the Big Three. General Motors (GM), Ford (F) and Chrysler, with a combined H1 loss of $28.6B, are angling for $50B in federal loans as they face the worst market conditions in 25 years. The loan would be split into $25B to be spent on healthcare and $25B of general liquidity that could be delivered in different ways, including short-term borrowing from the Fed. In exchange, the automakers would take steps such as granting stock warrants. Top execs from all three firms had a 'positive' meeting with House Speaker Nancy Pelosi yesterday though no promises were made. Separately, the Bush administration told automakers they would soon have access to a previously approved $25B package of low-interest loans.
• Mom-and-Pop investors face GMAC junk. GMAC (GKM), the primary lender to General Motors (GM) customers, might leave thousands of individuals holding as much as $15B of junk-rated debt unless it can find a way to quickly pay off its bills and raise its credit rating. GMAC has issued billions of dollars of debt, called SmartNotes, to retail investors over the last decade, and had targeted many older investors and retirees seeking safe and reliable interest income. Though the auto and home lender has paid off the debts as they've matured, SmartNotes due July 2020 have already lost about 2/3 of their value as GMAC, with $7.9B in losses since mid-2007, faces growing skepticism about its ability to survive. In the case of bankruptcy, the $15B of outstanding SmartNotes would be treated as senior unsecured debt, meaning investors would recover an average of $0.40 on the dollar.
• South Korea cuts rates, again. South Korea lowered its interest rates for the third time in four weeks, hoping an aggressive round of rate cuts will prevent the economy from slipping into its first recession in a decade. The 25 basis points cut brings the country's key interest rate to 4.0%, its lowest level since 2006. Bank of Korea's Governor Lee Seong Tae says he's prepared to "take bigger actions if necessary." South Korea's won and Kospi stock index rose after the cut.
• Wells raises cash, market hopes. Wells Fargo (WFC) successfully raised $11B in a public stock offering yesterday to help finance its purchase of Wachovia (WB). The shares were sold at $27 each, 6.2% below the stock's Nov. 6 price of $28.77. The sale's success, coming on a day when the S&P 500 fell 5% and the Dow Jones lost 4.9%, showed capital markets are beginning to thaw and is expected to send a positive message to other companies considering public financing.
• Citi readies for more layoffs. In the latest round of job cuts, Citigroup (C) is preparing a list of employees who will be laid off from a division including investment banking as the company tries to reduce its workforce by 9,100 employees before next October. It has already cut around 23,000 positions this year. Since the credit crisis began, U.S. financial firms have shed tens of thousands of jobs, a trend that looks likely to continue for the foreseeable future.
• AIG sales advancing. AIG's (AIG) asset sales are finally beginning to pick up some momentum. Sources say the struggling insurer is expected to reach deals by the end of the year to sell an equipment insurer and its U.S. personal lines unit, potentially valued between $5-7B. It's also making progress on the sale of a smaller business, Hartford Steam Boiler Inspection and Insurance Co. AIG has previously said it plans to keep its U.S. property-casualty, foreign general insurance businesses and an ownership interest in its foreign life operations but sell the rest.
• Fed may restructure AIG loan. Federal officials are looking into options to ease the financial strain on AIG (AIG), including changing the terms of its $85B government loan. Sources say officials may reduce the interest rate on AIG's loan or extend the duration of the two-year facility, or may choose to backstop AIG's credit-default swaps contracts. AIG's current loan terms are fairly steep at 8.5% on money it isn't borrowing and 8.5% plus three-month Libor (currently 2.39%) on money it draws down, especially compared to the 5% interest charged to banks and firms covered by the $700B TARP program.
• CDS market gains support. Under pressure from investors and regulators to make credit-default swaps [CDS] trading more transparent, a group of Wall Street dealers line up to support a new electronic marketplace for CDS. Nine banks, including Credit Suisse (CS), JPMorgan Chase (JPM) and Goldman Sachs (GS), plan to use an online platform operated by TradeWeb LLC (in which the banks hold minority stakes) to trade certain types of CDS with investors including hedge funds, foreign central banks and pension funds. Despite the hesitancy of some banks to switch to an exchange for fear of reduced profits, most Wall Street firms are readying to clear their CDS trades through a central exchange by the end of the year.
• Microsoft's Verizon grab. Microsoft (MSFT) is trying to steal a deal with Verizon Wireless (VZ) away from rival Google (GOOG). Google has been negotiating with Verizon for months to make its search engine the default on Verizon phones. Sources say Microsoft has offered sweetened deal terms to make its own search service the default instead. Microsoft is also offering more generous revenue sharing and a guarantee of substantially higher payments. After failing to acquire Yahoo (YHOO) earlier this year, Microsoft has been putting together a new plan to fight Google, and Google's recent distraction over a failed Yahoo ad partnership provided Microsoft with the opportunity to poach the search service deal. Verizon is considering both offers and has not yet made a final decision.
• No MSFT bid for Yahoo. Microsoft (MSFT) CEO Steve Ballmer said emphatically that his company will not make a renewed bid for Yahoo (YHOO). His comments come after Yahoo CEO Jerry Yang said yesterday that Yahoo, which spent months dodging Microsoft's bid, is now Microsoft's best option. Yang said he remains open to selling Yahoo at the right price, adding "people who know me know I don't have an ego about remaining independent versus not remaining independent." Ballmer left room open for future partnerships based on the two companies' search engines, but was definitive on the point that Microsoft does not plan to acquire Yahoo. With no Microsoft bid in sight and its Google partnership dead on arrival, Yahoo has reached what many analysts conclude is a strategic dead-end.
• Fed lending. Borrowing from the Federal Reserve's discount window declined for the third week in a row, as primary dealers and commercial banks scaled back. Average daily borrowing dropped to $359.01B from $388.81B the week before. On Wednesday, borrowing dipped below the $347B mark.
• Chain store sales. Nearly 60% of chain stores reported October sales even worse than already-weak forecasts. As a result, many retailers are now resorting to bigger discounts and earlier promotions to try to salvage what they can from the holiday shopping season. One notable exception was Wal-Mart (WMT). Its wallet-friendly reputation drew consumers from pricier retailers, helping same-store sales rise 2.4%, far better than its prediction of 1-2%.
• Monster index. Monster's Employment Index for October ended a two month run of mild growth, dropping down 10 points to 150. The index is down 20% Y/Y as online recruitment activity continues to decline at the onset of Q4.
• Productivity and costs. Nonfarm Productivity was up 1.1% in Q3, more than the 0.7% economists expected, but down from Q2's 3.6% jump. Unit labor costs were up a better-than-expected 3.6% (+3% consensus), after falling 0.1% last quarter.
• Jobless claims. Initial Jobless Claims of 481K are a drop worse than the 477K economists expected, and down 4K from last week's revised 485K. 4-week average of 477K is unchanged.

Earnings: Friday Before Open

• Ford (F): Q3 EPS of -$1.31 misses by $0.37. Revenue of $32.1B vs. $28.35B.. Says it burned $7.7B in cash over the quarter, and will cut 10% of its North American workforce. "We expect the marketplace to remain extraordinarily challenging." (PR)
• LifePoint Hospitals (LPNT): Q3 EPS of $0.60 misses by $0.01. Revenue of $675M (+5.3%) vs. $683M. (PR)
• Sprint Nextel (S): Q3 EPS of $0.00 misses by $0.03. Revenue of $8.82B (-12.2%) in-line. Expects continued pressure on post-paid subscribers in Q4. (PR)

Earnings: Thursday After Close

• 99 Cents Only Stores (NDN): FQ2 EPS of $0.03 beats by $0.04. Revenue of $317M (+9.1%) vs. $302M. Shares +4.4%. (PR)
• AES Corp. (AES): Q3 EPS of $0.25 misses by $0.03. Revenue of $4.34B (+24.7%) vs. $3.69B. Sees full-year EPS of $1.07 vs. $1.15. (PR)
• Assured Guaranty (AGO): Q3 EPS of $0.28 misses by $0.20. Revenue of $149M (+71.8%) vs. $125M. (PR)
• Avis Budget Group (CAR): Q3 EPS of $0.55 misses by $0.04. Revenue of $1.7B (-1%) in-line. (PR)
• Blockbuster (BBI): Q3 EPS of -$0.11 beats by $0.05. Revenue of $1.2B (-2.7%) vs. $1.27B. Shares +1.5%. (PR)
• CB Richard Ellis Group (CBG): Q3 EPS of $0.27 beats by $0.04. Revenue of $1.3B (-12.9%) vs. $1.18B. Shares +1.4%. (PR)
• CDC Corp. (CHINA): Q3 EPS of -$0.07 misses by $0.09. Revenue of $104M (+5.5%) vs. $101M. Shares +5.1%. (PR)
• Disney (DIS): FQ4 EPS of $0.43 misses by $0.06. Revenue of $9.45B (+5.8%) in-line. Lower operating income was driven by a decrease in domestic operations. Shares -4.2%. (PR)
• Fairpoint Communications (FRP): Q3 EPS of $0.19 vs. consensus of $0.06. Revenue of $328M (-13.8%) vs. $339M. (PR)
• Fluor (FLR): Q3 EPS of $1.01 beats by $0.10. Revenue of $5.67B (+38.4%) vs. $5.8B. Sees full-year EPS of $3.70-3.80 vs. $3.52. Shares +9.5%. (PR)
• Genworth Financial (GNW): Q3 EPS of $0.51 misses by $0.04. Revenue of $2.17B (-24.6%) vs. $3.07B. Suspends share repurchase and earnings outlook. Shares -10.8%. (PR)
• GT Solar (SOLR): FQ2 EPS of $0.19 beats by $0.05. Revenue of $140M (+71.4%) vs. $127M. Sees FQ3 EPS of $0.23-0.25 vs. $0.27 and revenue of $190-200M vs. $228M. Shares +10.5%. (PR)
• Hansen Natural (HANS): Q3 EPS of $0.54 beats by $0.01. Revenue of $285M (+15.3%) in-line. (PR)
• Heelys (HLYS): Q3 EPS of $0.03 misses by $0.04. Revenue of $23.8M (-52.3%) vs. $27.1M. Shares +6.9%. (PR)
• International Rectifier (IRF): FQ1 EPS of -$0.06 in-line. Revenue of $244.5M (-8.2%) vs. $219M. Sees FQ2 revenue of $160-190M vs. $208.5M. Shares -4.6%. (PR)
• Limelight Networks (LLNW): Q3 EPS of -$0.01 beats by $0.02. Revenue of $33.1M (+9.2%) vs. $31.2M. Sees Q4 revenue of $33-34M vs. $32.9M. Shares +5.1%. (PR)
• Live Nation (LYV): Q3 EPS of $1.41 vs. consensus of $0.44. Revenue of $1.59B (+9%) in-line. (PR)
• Macrovision (MVSN): Q3 EPS of $0.09 misses by $0.13. Revenue of $112M (+146.1%) vs. $154M. (PR)
• Nvidia (NVDA): Q3 EPS of $0.20 beats by $0.08. Revenue of $898M (-19.5%) in-line. Gross margin of 41.9% vs. 39.6%. Shares +10.2%. (PR)
• Plains Exploration & Production (PXP): Q3 EPS of $4.50 vs. consensus of $1.63. Revenue of $719M (+140.7%) vs. $714M. Shares (PR)
• Priceline.com (PCLN): Q3 EPS of $2.39 beats by $0.29. Revenue of $562M (+34.6%) vs. $547M. Shares +7.9%. (PR)
• Public Storage (PSA): Q3 FFO of $1.37 beats by $0.09. Revenue of $344M (+2.4%) vs. $417M. Declares special dividend of $0.60/share. (PR)
• Qualcomm (QCOM): FQ4 EPS of $0.63 beats by $0.03. Revenue of $3.33B vs. $2.86B. Sees FQ1 EPS of $0.46-0.50 vs. $0.61 and revenue of $2.3-2.5B vs. $2.91B. "As a result of the credit crisis and the economic uncertainty, our guidance reflects slower end- market device growth for 2009 than previously anticipated..." Shares -1.7%. (PR)
• SandRidge Energy (SD): Q3 EPS of $0.17 beats by $0.01. Revenue of $334M (+117.4%) vs. $281M. Shares +6.1%. (PR)
• Skyworks Solutions (SWKS): FQ4 EPS of $0.21 beats by $0.01. Revenue of $233M (+22.1%) vs. $226M. Shares +11.5%. (PR)
• Tenaris (TS): Q3 EPS of $0.97 beats by $0.14. Revenue of $3.12B (+28.1%) vs. $3.23B. (PR)
• True Religion Apparel (TRLG): Q3 EPS of $0.64 beats by $0.17. Revenue of $79.4M (+64%) vs. $65.8M. Shares +9.15%. (PR)
• VeriSign (VRSN): Q3 EPS of $0.28 beats by $0.02. Revenue of $246M (+14%) vs. $239M. (PR)

Today's Markets

• Asia markets closed mostly up. Nikkei -3.5% to 8,583. Hang Seng +3.3% to 14,243. Shanghai +1.7% to 1,748. BSE +2.4% to 9,964.
• In Europe: London +1.9%. Paris +0.9%. Frankfurt +1.1%.
• U.S. futures have pared back earlier gains ahead of the payroll number. Dow +0.82% to 8771. S&P +0.94% to 913. Nasdaq +1.73%. Crude +2.29% to $62.22. Gold +1% to $739.60.

Friday's Economic Calendar

• 8:30 Non-farm payrolls
  10:00 Pending Home Sales
  10:00 Wholesale Inventories
  3:00 PM Consumer Credit
• Notable earnings before Friday's open: DISCA, F, LPNT, RRI, S, TTI, WIN, WR
• Notable earnings after Friday's close: BID, ED

Seeking Alpha editor Eli Hoffmann contributed to this post.

F1Q09 (Qtr End 09/30/08) Earnings Call Transcript

For your Friday amusement, here’s a list of companies that had significant premium takeover bids on the table, but rejected them as too low.

• Yahoo (YHOO): Microsoft (MSFT) bid $31, and might have gone higher. The board said no. Yahoo’s current stock price: $12.
• SanDisk (SNDK): Samsung bid $26, and might have gone higher. The board said no. SanDisk’s current stock price: $8.14.
• Take-Two (TTWO): Electronic Arts (ERTS) bid $25.74, and almost certainly would have gone higher. The board said no. Current TTWO stock price: $11.55.
• International Rectifier (IRF): Vishay (VSH) bid $23, and in a friendly deal might have gone higher. But the board said no. Current IRF price: $13.30
• Cablevision (CVC): This one is flipped on its head. Management last year offered to take the company private at $36.26 a share; holders rejected the offer as too low. Current CVC price: $14.69.

One Day at a Time - Excelon's (EXC), NRG Energy (NRG), Take Two (TTWO), International Rectifier (IRF), Diebold (DBD), United Technologies (UTX)

Joe Mezrich, of Nomura Securities International, coined the term "cheap losers" for stocks selling at a cheap price-to-book-value ratio and a recently depressed stock price. In the four bear markets since 1974, cheap losers far outpaced S&P 500 gains during the ensuing recoveries. From the July 2002 market bottom, the S&P rose 17% while cheap losers gained 54%. In today's market, many value stocks have taken their worst hits in decades, but this may mean a bunch of stocks that have become cheap losers are approaching the limit of their downward slide.

It looks like International Rectifier Corp. (IRF), for the time being at least, will continue its 51-year history as an independent company.

Chipmaker Vishay Intertechnology Inc. (VSH) on Monday gave up its chase of the power management component maker, saying it would abandon its $1.7 billion bid for International Rectifier after failing to win seats on the target's board.

The cat fight between Vishay Intertechnology Inc. (VSH) and International Rectifier Corp. (IRF) appears destined to continue until the last vote is counted at IRF's annual meeting on Friday. Vishay was on the offensive again yesterday, issuing an open letter to IRF shareholders criticizing the company for refusing to discuss a possible acquisition.

Vishay on Monday said it would consider raising its current $23 a share, $1.7 billion offer for IRF if the power management component maker would enter into negotiations with it and could show it was worth a higher price. International Rectifier responded by calling the offer "illusionary," and a "ploy" designed to gain favor with its shareholders. It again hammered on Vishay for not having cash or financing to fund an acquisition.