Beating The Stock Market » Stock market news

New Home Sales Report For July

billy — Fri, 28 Aug 2009 01:56:35 +0000

Yesterday the news came out that new home sales jumped 9.6% for the month of July. It was the fourth straight increase in sales. Sales rose to an annual rate of 433,000, up from June’s rate of 395,000. Many are saying that the bottom is definitely in and now is the time to buy, but is that really the case.
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Yes, sales are up more than 30% from the bottom in January, but nowhere near the peak of four years ago. Of course that’s was because of the inflated bubble that was created by the Fannie Mae and Freddie Mac sub-prime loans.
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So does this really mean that the bottom is in and we can expect the economy to turn around? I doubt it. Why I think that is because of the fact that the numbers are (I feel) are mis-leading. Many of the new home sales that have been happening in the last month or so were first-time home buyers. That’s because of the government’s incentive plan for first-time homeowners who qualify for an $8000 tax credit. That in itself is misleading on the fact of it’s a tax credit, not a rebate. Which means of you don’t have enough of tax liability, you won’t be able to write off all of the $8000.
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What does that mean for the industry? Well, home builders saw a jump in their stock price today, but will it be able to maintain those levels? I doubt that too. mainly because when the program will be terminated at the end of November. I believe the market will dry up again with sales. As it is, some builders have already seen a dip in home sales. In Arizona, A.F. Sterling Homes stated that sales in July stalled because the builder couldn’t guarantee the homes would be completed in time to qualify. The industry (real estate agents and builders) are really leaning on Congress to extend the the credit on the grounds of the sales could reverse from their current trend. As a matter of fact, Randy Agron, the vice president of A.F. Sterling Homes was quoted as saying “The real estate market is really a fragile thing. It’s not the right time to take (the tax credit) away”.
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With that in mind, do you really think the bottom is in? It has been proven in the past that when the government gets involved with trying to “save” the economy, it actually extends it by not letting the free market follow it’s natural course. With this program as well as the financial bailouts and “Cash For Clunkers”, we have three major industries being manipulated within the American economy.
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All I can say is…hang on, it’s going to be a bumpy ride.

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Solar Power Stocks Take A Beaten

billy — Tue, 25 Aug 2009 15:58:49 +0000

In the last week or so the solar power companies have been getting down graded from several different analysts. The reasons vary from one another, but the message is still the same… stay away from the sector. The alternative energy sector has made some good gains in recent months, but then again almost everything has made gains since the lows of March.
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The leaders in the sector have really taken a turn down from where they were just a few months ago. First Solar Inc. (FSLR:NASDAQ) was as low as $100 in March climbing nearly 100% to it recent high of over $200 in May and has really taken a beaten since then.
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That’s not the only solar companies that has fallen out of flavor with the analysts. Typically when the price of oil starts to rise, the alternative energy sector gets some headwinds because of the fact that it makes cost effective sense to invest in the solar and wind power stocks. The problem here seems to be that the competitiveness of the sector has gotten really tight causing companies to cut back on their own pricing to compete with others in their market. Each of these companies are trying to get a bigger market share and to do so, pricing and profit will be taking a back seat at the moment.
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Here at Beating The Stock Market, I’ve been very positive about the alternative energy sector and have made plenty of money in trading these stocks. When news like this comes out from several different sources, I tend to stay away from the sector. Too much negative views on a sector does not sit well for me and I will wait and see before I jump back on board with solar or wind power stocks.

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Agnico Eagle Mines Ltd (NYSE:AEM)

billy — Thu, 30 Jul 2009 19:31:48 +0000

Agnico Eagle Mines Ltd is up and running again today after they reported their second quarter earnings report. I’ve spoken about them in the past in regards to having a position and using a technique referred to as channel trading..
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Well so much for that idea now that the company has posted some good results and given some (in my opinion) great guidance. It will be some time before I’ll know what their new trading range will be. On top of all the news that AEM released, there have also been several analysts that raised the target price for Agnico Eagle.
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Yesterday when I saw the price dropping I put in a limit buy order at $52 per share. Unfortunately the low of the day was $52.17. I figured that I’ll just get the shares today at even a lower price, but when I was watching Mad Money with Jim Cramer, he had the CEO of Agnico Eagle on to discuss the report. I knew at that point the shares would go up in the pre-market and continue to do so throughout the day. So I had to put in a limit buy in for 54.00 (hoping that it would be a good bid) before the market opened and was lucky that it did trigger. I think we’ll see some great thing from this company in the next few quarters and I expect to make some great gains with this stock.
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Their two newest mines, Kittila and Lapa have achieved commercial production as well as their other mine Meadowbank and will be operational in the first quarter of 2010. If you haven’t jumped into Agnico Eagle Mines Ltd., do your research and maybe this can be a winner for you and your portfolio.
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Second quarter 2009 highlights include:
- Record Production – record gold production of 119,053 ounces. First gold poured at Pinos Altos in July
- Good Cost Performance – LaRonde, Goldex and Lapa achieve good
minesite cost performance
- Commercial Production At Lapa And Kittila – commercial production
achieved as of May 1 at both mines
- Remaining Two New Gold Mines On Schedule – Pinos Altos and Meadowbank remain on schedule for initial production in third quarter 2009 and first quarter 2010, respectively
- Growth profile bolstered – expected after-tax internal rate of return (“IRR”) of 76% at Goldex expansion and 17% at Pinos Altos expansion at Creston Mascota
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Happy trading.

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The Dow At 9000, Where Do We Go From Here?

billy — Fri, 24 Jul 2009 12:04:07 +0000

Who would have thought that this could have happened so soon? Either way, it was reached. The DOW close above 9000 (9069.29 to be exact). The S&P 500 has been on a tear, closing at 976.29. Lets not forget that the NASDAQ is now at 1973.60. The past two weeks of trading have been great for the markets.
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With that being said, what are we to expect in the coming weeks? If you’ve been listening to the talk on the street, you’ve heard both sides of the possibilities. “It’s only going to get higher” or “the markets are going to correct themselves”. Those are the only two choices.
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After listening to all the opinions that where flying today, I would have to agree that the markets are due for a correction. How can it not? I don’t know about you, but I don’t really see a reason to be all optimistic about the stock market. Add on to the fact that many traders and investors have made a lot of money in the last four months. There will be some profit taking very soon.
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With all the talk about health care and the Cap and Trade bill, if these two bills pass, corporations are going to find it hard to keep making the earnings that the investors want to see. The taxes that will be imposed onto these industries are going to break them as well as the country’s GDP.
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In the last few months I’ve made some great gains in the markets and I’m not willing to give them back anytime soon. At this time I’m sitting more than half my portfolio on the sidelines, while I wait for the other shoe to drop (and it will). Don’t get me wrong, I do believe that there will be some gains to be made in many other sectors and that’s why I’m watching the tech sector. They (tech sector) don’t have the government issues to deal with, like most of the others ones.
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Which ever way you plan on playing the markets in the coming weeks, do your due diligence.

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Update On NRG Energy Inc. (NYSE:NRG)

billy — Thu, 02 Jul 2009 14:42:37 +0000

What a difference a day makes. Last night I posted about NRG Energy Inc. (NYSE:NRG). A company that I’ve been trading for the last month or so. I’ve made some nice gains and I still feel the company’s stock will continue to rise considering the alternative energy needs in this country.
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Something that I did over look in the post is that NRG Energy is in a middle of a hostile take over bid from the country’s largest nuclear power company, Exelon (NYSE:EXC). In October, Exelon offered 0.485 of one of its shares for every NRG share. Many of the NRG investors were not pleased with the offer and stated that Exelon had to raise it’s bid for the independent power producer.
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News came out this morning that the company will raise it’s offer by about 12%. The issue is now is that NRG’s stock price has risen above the offering price from Exelon. So now Analyst are suggesting that it means that Exelon would most likely have to materially raise it’s bid to get NRG shareholders support.
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At the close of last night (July, 2009), Exelon’s stock price closed at $51.56, which puts it’s bid for NRG at $25.01 a share. NRG shares closed at $26.05 yesterday.
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NRG’s stock price opened Thursday at $25.30 and has dropped as low as $24.88. It has bounced back a little, but after today jobless claims and other economic data releases today. I don’t expect any stock to do really good today. We are going into a three day holiday weekend so let the rest of this eek play out on it’s on and see what bargains we’ll have next week.
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Happy Independence Day.

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Nuclear Energy Stocks

billy — Thu, 02 Jul 2009 03:34:07 +0000

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There are many different stocks out there that fall under the term “speculative”, of course that not really the case when it comes to the electric utility stocks. I just want to write about a sector that seems to be building up steam (literally and figuratively) later that needs to be addressed.
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A little over a month ago I started looking for a new speculative stock to trade (oppose to invest in) and I happen to stumble over a company that is in the electric utility sector, but because it is mainly a nuclear play, I thought it would be a decent opportunity. I looked around at other companies that are also trying to expand their nuclear plant output, but this one stuck in my mind.
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I invested a small amount (like I always do on speculative stocks) in the company after reading their earnings reports and reading the transcripts from their conference calls. Since then the stock price has moved up over 30% in just 5 weeks.
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What really made me think that I had to write a post on it, was the fact that the company was profiled on a CNBC special this week titled Nuclear Option. In the show there was a lot of positive talk about the use of nuclear power being used in this country. There hasn’t been a nuclear power plant built in the United States in over thirty years, but now there are two being built as I type this post. One in Texas and the other in Maryland.
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The company that I’m referring to is NRG Energy Inc. (NYSE:NRG). The company looks good to me and I will be buying more of it on the dips. I do expect it to lose some value because of profit takers as well as the overall market taking it down some as the DOW and the economy take a roller-coaster ride throughout the remaining part of the year. The chart looks healthy and with the price of oil expected to go back up, it will continue to rise.
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As with any stock you look to invest in or trade, you need to do your own research to see if it’s right for you.
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Happy Trading.

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Research In Motion (NASDAQ:RIMM)

billy — Fri, 19 Jun 2009 13:30:45 +0000

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Yesterday I spoke about building a position in Research In Motion (NASDAQ:RIMM). My first buy-in was at $76.25 when the price dropped. Share price opened this morning at $77.86 and within the first five minutes of trading, it was up to $78.40. Unfortunately that was as high as it would go. Minutes later it fell to $76.13, where it would continue to bounce within that range.
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Research In Motion was scheduled to release their first quarter earnings report after the closing bell today. I was looking for some more upward motion from other traders getting on board in expectation of RIMM beating the street.
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Shortly after the bell, RIMM released their report. RIMM earned $1.12 per share for the first quarter on revenue of $3.42 billion, compared with $482.5 million or 84 cents on revenue of $2.24 billion a year earlier. Included in the results were non-recurring items. $96.4 million relating to certain employee tax liabilities along with a gain of 175.1 million primarily as a result of the enactment of functional currency tax rules. While the analysts were only expecting $0.94 on revenue of $3.43 billion, RIMM earned $0.98 per share.
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What I didn’t expect was after the company beating expectation by $0.04, the stock dropped more than 6% in after market trading. By the time after hour trading was done, the stock moved back up to $76.06, just off by 0.5% from where it closed at 4:00pm today.
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One thing that I wish I was able to do was to buy more shares when it fell to $73 shortly after the release. In April, Rimm beat expectation by 7% and since then the stock price has moved up 55%. Today they beat it by more than 4% and it moved no where today. Many investors and traders were looking for more and the knee-jerk reaction was to sell. The more they were looking for was in RIMM’s second quarter guidance. RIMM”S range for earning in the next quarter is $0.94 to $1.03 per share on revenue of $3.45-$3.70 billion. The mean analyst estimate is for 97 cents on revenue of $3.61 billion. After the conference call, I guess people realized it wasn’t as bad as it originally sounded.
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With the information I have on this company, I believe that RIMM is still fundamentlly sound and will continue to grow. I will continue to buy into RIMM under $80, after that I will sit back and watch the gains from this great company with a fantastic product. The BlackBerry is a great smartphone with many different applications to do the things you want to do. As a matter of fact RIMM just released their latest BlackBerry model, the Tour, earlier this week.
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Jim Cramer doesn’t call this company one of the four horseman of the tech sector for nothing.

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The Stock Market Is Getting Ready For Another Run Up

billy — Wed, 17 Jun 2009 14:48:40 +0000

Here we are again going through another correction in the markets. The three indicies have dropped over the past week off their seven month high and I’m not surprised. Over the last three months the markets have been on a tear coming off their lows. I mentioned before about how the markets wouldn’t be able to continue these gains without some sort of correction and profit taking.
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Even though I’ve been waiting for this pull back for some time, I did expect it. I will say that the markets aren’t as weak as I thought. I no longer expect to see the DOW reach 7000 again. As a matter of fact I don’t think it will get below 7800.
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The word on the street is that there is a large amount of money sitting on the sidelines waiting to jump back in, which means that once investors and traders feel that the waters a safe enough to come back in, it will help the markets rebound even more. Yesterday I heard that many of the hedge fund managers are already invested in and that they don’t have much capital not isn’t in the markets. The report stated that they are concerned that they may miss the next surge in the markets and they don’t want to be caught sitting it out.
If that’s the case, it can also be said that if they get skittish and pull their money out to avoid another big loss, we will see the 7800 level on the DOW.
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I don’t think so on the latter issue because the housing market is showing signs of stabilization, as well as the financial sector. Jim Cramer last night even had a segment in regards to the housing bottom. Since last August he has been saying that the housing bottom would be around June 30th of this year. Well, he ripped the board down and said that after yesterday’s housing number were the third straight month that they have improved. Other indicators are looking good too.
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With that in mind, I will start building positions in the stocks that I’ve been watching for sometime. Over the next two weeks, I will be looking at Apple, JP Morgan, Research In Motion and Agnico Eagle Mines. Of course there are others that I do like, but I would want more of a pull back before jumping on board with them.
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If you’re looking to take advantage of some free advice from Jim Cramer (besides his TV show), Check out his Action Alerts program that he’s always mentioning on his show. I’ve been a member for over a year and find some sound information from him, along with some great picks. Follow the link for a two week free trial of his Action Alerts subscription.
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Finance, Energy And Politics, Oh My

billy — Wed, 10 Jun 2009 16:09:57 +0000

It seems that the stock market doesn’t react the way it should when important economic news is released. Over the last two months there has been negative news reports released that would normally cause the indicies to drop, but instead they have responded in the opposite manner.
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The same goes for the good news that is also released. Look at how the news came out yesterday about the billions of dollars that will be paid back by ten of the major banks. You would think that the news would make investors and traders want to invest in these companies, making the price rise, well it’s wasn’t the case. As a sidebar comment, It amazes me that the money isn’t being returned to the Fed’s, instead it will be held by the Treasury Department just in case it will be needed again. My opinion is that the money will be used in the department’s slush fund and never returned to the tax payer.
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The talk is out again about drilling in the Gulf of Mexico. The talks should have never halted. How are we to ever take control of our economy if we are depending on foreign countries to supply us with our energy needs? Oil is abundant in the gulf and we are not taking advantage of it, but I guess it’s OK since Russia is working with Cuba to drill in the gulf. That’s real good that they are doing so, this way they can also sell oil to us and we won’t be dependent on the Middle East. If you’re not sure, that last comment was a sarcastic one. Keep an eye on the alternative energy sector for some good gains. When oil gets above $70-$80 per barrel, solar and wind energy becomes more feasible and profitable as an investment.
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The politicians are not doing the job that they were sent to Washington to do. The spending in this country is way out of control and needs to be pulled back. The private sector has to take charge of their future. We can not expect the government to come to their rescue. If the company can’t make a profit, then it needs to close no matter how many people it will affect. In the long run, having the Federal government get involved will only hurt more than it would have originally.
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Keep your eyes on the stock market and be ready to raise capital (cash). I expect a pull back soon enough.

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Take Advantage Of The Stock Market

billy — Thu, 04 Jun 2009 15:49:20 +0000

I’ve been trading in the stock market for years now. Over those years I’ve learned to take advantage of opportunities when they’re presented to me. One of the biggest opportunities to be offered is when the stock market drops quite a few percentage points in one day or over a period of a week.
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Yesterday’s decline was one of those days to take advantage of, especially in the basic material sector. The sector has moved up majorly over the last two to three months. In some cases like Freeport McMoran (NYSE:FCX) and Allegheny Technologies (NYSE:ATI), they’re up 83% and 130% since their March lows. So when days like yesterday happen and most investor and traders are taking profits, you need to be ready to jump in to buy.
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Wednesday was clearly a profit-taking day. Of course the media was stating that it was because of the bad ADP Employment change report that came out, I beg to differ. Employment reports are always lousy near the end of a recession and during the turn-around period of the economy.
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So late yesterday afternoon I took advantage of some good buying opportunities. The first trade I made was to buy Agnico Eagle Mines (NYSE:AEM). After it was up to $64 in the last week, it took a dive yesterday to the low $58 range, where I decided to pick up some shares. At the time of writing this post, It has moved to $61.25. A gain of over 5% overnight.
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This is why you need to do research on not just the individual stocks, but also the market as a whole. I’ve been talking about the DOW going back down to the mid 7000 range and it seems that I may be wrong. Then again, it could still be coming, but the mood of the markets is more positive than negative. You can’t fight the markets, you need to ride out the current of the them to take advantage of days like yesterday. No one sector sells off like that in one day without having other investors jumping right in on the great buying opportunity.

Happy Trading.

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