December 31, 2012
Higher Feed Costs Hurt Cal-Maine Foods in Q2 Fiscal 2013
 Shares of Cal-Maine Foods, Inc. (CALM) are trading lower on Monday after the shell egg producer reported a 38.6 percent decline in second-quarter fiscal 2013 earnings, citing higher costs for primary feed costs and additional expenses related to recent acquisitions. The severe drought this summer months took corn prices to record highs, aiding in feed costs per dozen climbing 23.4 percent during the quarter compared to the year prior period. The Jackson, Mississippi-based company said that it expects costs to remain high throughout the remainder of the year. Net sales during the quarter increased by 13.3 percent to $328.9 million from $290.4 million in the second quarter the year prior as the number of dozens of eggs sold increased by 9.1% to 238.1 million. Average selling price for a dozen eggs increased by 4.0 percent in the recent quarter compared (more)…
Keep an Eye on These Five New Drugs in the First Quarter of 2013
 Some drug and biotech companies, including several industry leaders, hope to win US approvals for potential blockbuster treatments during the first three months of 2013. The Food and Drug Administration will make a number of decisions in the first quarter regarding market clearance for experimental medicines. Here are five potential drug approvals scheduled for that period and the reason they’re key to strategies for the companies who developed the therapies. The descriptions are listed in chronological order. The date represents the deadline for the FDA to make a ruling on each drug. Some of these dates can be delayed. January 21 Rytary for Parkinson’s disease is the lead drug candidate for the branded pharmaceutical division of Impax Laboratories (IPXL). Impax is a generic drug maker that’s looking to boost revenue with branded products. In October, the company said it expected (more)…
Stocks Under $10: Oil & Gas Field Services
 According to www.ValuEngine.com, the Oils-Energy sector is 3.1% undervalued, with the Oil & Gas Field Services industry trading at fair value. All eight of the stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots. DPDW – has been below $10 since the week of October 17, 2008. DVR – has been below $10 since the week of November 6, 2009. KEG – has only been below $10 since June 21, 2012. NOA – has been below $10 since the week of May 27, 2011. NR – has only been below $10 since January 11, 2012. TGE – has only been below $10 since July 23, 2012. TTI – has only been below $10 since February 29, 2012. WG – has been below $10 since the week of (more)…
Duff & Phelps Agrees to Sell Itself for $655 Million
 Putting the shoe on the other foot, Duff & Phelps Corp. (DUF) has apparently valued itself at $15.55 per share, or about $655.5 million. That is the price that that New York-based company agreed upon to be acquired by a consortium of organizations managed by private equity firm Carlyle Group LP (CG), Pictet & Cie, Stone Point Capital and Edmond de Rothschild Group. None of the acquiring entities will own greater than 35 percent of Duff & Phelps, according to a corporate statement. Duff & Phelps has built its reputation by providing valuation and merger advice to companies, the government and hedge funds. Amongst other things, the company was an advisor in the bankruptcy of Lehman Brothers. The $15.55 per share price tag is a 19.2 percent premium to Friday’s closing price of DUF. The agreement includes a “go shop” (more)…
Deal Tonight? But Rally a Fake Out!
 I still believe we will get the framework of a cliff “deal” by 10:45 tonight. Whether the market celebrates in anticipation today or Wednesday, I believe that rally would be a fake out pursuant to a slide in stock prices over the next 3 to 4 months. I would be more positive if the stock market were in a tailspin and down 12% from here as we approach the edge of the “cliff” tonight. Simply stated, I prefer buying in face of adversity when stocks are getting hammered, as was the case in early March 2009, but with the market only 3% off its December highs – the risks are too high. The perception has been over the last two years that this country cannot be governed. That is not a condition that drives stocks higher. Change that, and the (more)…
China Stocks End Strong Year Quietly
 China stocks ended 2012 quietly Monday with a tiny decline in thin, half-day trading before the New Years holiday in Hong Kong. But investors aren’t complaining after a 22.9% rise in the Hang Seng Index for the year. The fact that most of the gains came in the last four months of the year and the index hit year-high closes consistently in December reflects healthy momentum heading into 2013. The Hang Seng, which features numerous large Chinese counters, slipped 0.04% Monday to 22,657, and the index of Chinese companies gained 0.5% to 11,436. Despite the holiday closing Tuesday, the week looks eventful with U.S. fiscal cliff drama and the release of Chinese PMI manufacturing figures and U.S, employment numbers, said Jackson Wong, vice president of sales at Tanrich Securities He told Equities in an email that 2012 gains should extend (more)…
December 28, 2012
Harmful Protectionism in Eastern Europe
 Twenty-three years after the Iron Curtain’s fall, there’s a new dividing line in Eastern Europe: A sharp contrast in quality of life between those nations where free markets and free society have flourished, and those where the state keeps an iron grip. Free nations like the Czech Republic, Latvia and Estonia (to name but three) have grown and thrived, with the majority of the populace enjoying the fruits of capitalism. In more oppressed nations like Russia and Hungary, however, life hasn’t been nearly as sweet—and the more economic malaise sets in, the more their governments intervene, to the detriment of their citizens. Both nations were at it again this month, passing new protectionist measures that will only hurt their people. Hungary struck first, passing a constitutional amendment allowing “only Hungarian farmers” to purchase domestic farmland. On the surface, the law’s (more)…
Chicago PMI Continues to Lumber Higher in December
 The Chicago Purchasing Managers Index, also called the “Business Barometer,” rose from 50.4 in November to 51.6 in December, denoting business activity in the region increasing for the third consecutive month. Any reading above 50 indicates expansion. The index has by “lumbering along since September’s 3 year low,” according to today’s report by the Institute for Supply Management. Economists were expecting the Chicago PMI to nose upward to 51.0 for December. New orders climbed to 53.8 from 45.3 the month prior, representing their biggest advance in 19 months, to pace the Business Barometer higher. Although still showing increased activity, production slipped from 54.7 in November to 53.8 in December. Order backlogs contracted for the fifth straight month, dropping 2.7 to 46.9 in December. Employment was a heavy drag on the overall reading with a plunge from 55.2 in November to (more)…
Pending Home Sales Up Again in November
 Keeping in step with signs of the U.S. housing market is rising from the bottom, the National Association of Realtors said Friday that pending home sales rose again in November. Pending home sales, contracts to purchases houses that have not yet closed, have now risen for three consecutive months and reached the highest level since April 2010. The November reading of the NAR’s Pending Home Sale Index registered a 106.4, following a downwardly revised 5 percent climb to 104.6 in October. In April 2010, the index was at 111.3, pushed by buyers scurrying to use a home-buyer tax credit before it expired at the end of the month. The 1.7 percent increase in November topped economist predictions of a 1.0 percent climb. Year-over-year, pending home sales in November were up nearly 10 percent compared to November 2011. It was the (more)…
Don’t Buy “Cliff” Deal Rally – 2013 Rocky
 I have repeatedly warned readers not to buy the news of a deal that would prevent going over the fiscal cliff (sequester), explaining that a sharp rally would be followed (possibly the same day) by a plunge in stock prices. I have also held that I believe a last minute deal would be made at 10:45 December 31 on a framework of a deal, enough to avoid sequestration with details worked out by the new Congress in 2013. If sequestration is opted for, I said it would be intentional to enable Norquist Republicans the option of voting for tax decreases, rather than tax increases except for 2% of the high-end taxpayers. I also warned of Congressional brinkmanship in early 2013 over raising the debt ceiling which is expected to be hit shortly, but which can be extended for a couple (more)…
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