If you are a close watcher of retail stocks, you have every right to throw up your hands in exasperation. With all of the distress taking place among consumers, who would have guessed that the back-to-school season would be so good? Some retailers, such as Abercrombie & Fitch (NYSE: ANF) and Limited Brands (NYSE: LTD), posted surprise double-digit gains in same store sales, while many others posted comps in the mid single-digits. Almost all of them were ahead of analysts’ forecasts.   Does this mean that we should take all of the gloom and… Read More

If you are a close watcher of retail stocks, you have every right to throw up your hands in exasperation. With all of the distress taking place among consumers, who would have guessed that the back-to-school season would be so good? Some retailers, such as Abercrombie & Fitch (NYSE: ANF) and Limited Brands (NYSE: LTD), posted surprise double-digit gains in same store sales, while many others posted comps in the mid single-digits. Almost all of them were ahead of analysts’ forecasts.   Does this mean that we should take all of the gloom and doom about consumers with a grain of salt? Yes. Does this mean that retail stocks have become a compelling buy? Yes. But not for the reasons you think, and only in the long-term context.  It may look as if we’re off to a strong rebound in retail spending. But one month’s data does not a trend make. October sales could just as easily be lackluster. Instead, the real reason to like retail stocks is the tremendous amount of earnings leverage they can garner from… Read More

Even as the high-profile spat between the United States and China over the too-cheap Chinese currency gets much press coverage, currency wars are brewing all over the place. And how these battles shake out will determine whether the global… Read More

Brazil is emerging as one of the great stories of the 21st century. Sound economic policies and abundant natural resources have led to sustained economic growth. And investors are racing to get in to this Samba party — the iShares Brazil (NYSE: EWZ) exchange-traded… Read More

It is the job of every Wall Street analyst (known as a “sell-sider”) to convince clients to buy stocks on their buy list. Those clients — hedge funds and mutual funds also known as “buy-siders” — give the ideas a listen, but often… Read More

As we’ve been discussing throughout the past six months, a range-bound market means you’re likely better off moving in and out of certain stocks and sectors as they prove timely. Buy-and-hold appears dead for now, although few have the ability to profit from very short-term trades either. Costco (Nasdaq: COST) highlights the value of a “mid-term trade.” In just six weeks, investors have made about +25% from this investment. Yet Wednesday’s quarterly report from this retailer tells us it’s time to “sell on the news.” Whenever you see… Read More

As we’ve been discussing throughout the past six months, a range-bound market means you’re likely better off moving in and out of certain stocks and sectors as they prove timely. Buy-and-hold appears dead for now, although few have the ability to profit from very short-term trades either. Costco (Nasdaq: COST) highlights the value of a “mid-term trade.” In just six weeks, investors have made about +25% from this investment. Yet Wednesday’s quarterly report from this retailer tells us it’s time to “sell on the news.” Whenever you see a stock make a solid move as Costco has, it leads you to wonder if business is trending well ahead of expectations. That’s why it makes sense to hang on and see how quarterly results fare. I’ve noticed solid upward moves in four other retail pays I track; Best Buy (NYSE: BBY), Leapfrog Enterprises (NYSE: LF), Office Depot (NYSE: ODP) and Casual Male (Nasdaq: CMRG). Is business improving for these firms, or is the recent spike in Costco and these other companies’ shares simply due to a re-rotation back into retail?… Read More

I have been chewing over our trading expert Mike Turner’s article this week, trying to get a handle on where the stock market can go from here. [Read Mike’s article here] Mike points out that September’s rally seemingly ignores the daunting economic hurdles we face. And his… Read More

As my colleague Mike Turner has noted, September was one for the record books. [Read Mike’s article here] And as Mike notes, it never hurts to play a little defense after such a good run. But in these markets, you’ll need to stay nimble. Coming earnings reports may just be good enough to keep the markets moving north, forestalling the moment when profit-taking dominates the action. With that in mind, let’s look at three companies that will report quarterly results in the next week or so. What they have to say about business… Read More

As my colleague Mike Turner has noted, September was one for the record books. [Read Mike’s article here] And as Mike notes, it never hurts to play a little defense after such a good run. But in these markets, you’ll need to stay nimble. Coming earnings reports may just be good enough to keep the markets moving north, forestalling the moment when profit-taking dominates the action. With that in mind, let’s look at three companies that will report quarterly results in the next week or so. What they have to say about business conditions may well set the trading tone for the rest of October and beyond. Aloca (NYSE: AA) On the first Monday in October, the Supreme Court kicks off a new term. And a few days after that, Alcoa always kicks off earnings season. For the past few years, Alcoa has set a somber tone as global demand for aluminum has been in a slump ever since Europe and the United States headed into the downturn. Yet I recently opined that a turn may be coming for Alcoa. [Read: “The Best… Read More

In recent weeks, stock market pundits have been wrestling with a curious phenomenon. Trading activity has fallen sharply, which these market-watchers presume to mean that investors have lost interest in stocks. Mom-and-pop investors have likely become more gun-shy this year. But the main culprit for lower trading volumes: Wall Street’s… Read More

With reward comes risk. That’s the painful lesson learned by biotech investors last month. Investors in Arena Pharma (Nasdaq: ARNA), Idenix Pharma (Nasdaq: IDIX), AMAG Pharma (Nasdaq: AMAG) and Vical (Nasdaq: VICL) all saw their investments plunge by nearly a fourth– or more — thanks to bad news on the drug approval front. Of the top four losers in the Russell 2000 last month, all are in biotech — an industry for which you’ve got to have a strong stomach. Company (Ticker) Recent Price September Loss 52-Week High 52-Week Low Catalyst Arena Pharma (Nasdaq: ARNA) $1.54 -76% $8.00 $1.51 FDA… Read More

With reward comes risk. That’s the painful lesson learned by biotech investors last month. Investors in Arena Pharma (Nasdaq: ARNA), Idenix Pharma (Nasdaq: IDIX), AMAG Pharma (Nasdaq: AMAG) and Vical (Nasdaq: VICL) all saw their investments plunge by nearly a fourth– or more — thanks to bad news on the drug approval front. Of the top four losers in the Russell 2000 last month, all are in biotech — an industry for which you’ve got to have a strong stomach. Company (Ticker) Recent Price September Loss 52-Week High 52-Week Low Catalyst Arena Pharma (Nasdaq: ARNA) $1.54 -76% $8.00 $1.51 FDA spurns company’s anti-obesity drug Idenix Pharma (Nasdaq: IDIX) $3.14 -48% $6.11 $1.81 Setback in Hepatitis C trials AMAG Pharma (Nasdaq: AMAG) $17.85 -32% $52.49 $16.70 Disappointing results for anemia drug Vical (Nasdaq: VICL) $2.21 -29% $4.43 $2.20 Poor results from blood-vessel growth drug Flagstar Bancorp (NYSE: FBC) $1.86 -26% $7.85 $2.91 False start on a capital raise Genoptix (Nasdaq: GXDX) $14.39 -20% $39.00 $13.51 Pre-announced tepid Q3 results Virginia Commerce Bank (Nasdaq: VCBI) $4.81 -17% $7.69 $3.01 Being acquired by Discover Arena looks unlikely to rebound, as the FDA made it clear that Arena’s weight-loss drug offered too… Read More

Of the 2,000 stocks that comprise the Russell 2000 Index, 10 of them rose by at least +50% in September. And half of those are the beneficiary of very generous buyout offers (while a sixth name rebuffed an… Read More