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Closing Bell: An almost recovery (AMD, AXP, DRYS, ETFC, FTNT, VVUS)

The markets were higher before the economic data came to ruin the party. CPI came in higher than PPI on the inflation front, but there was a real disappointment in housing starts considering that many were expecting gains there. Oil inventory contractions across the board failed to boost that market considerably. A late day rally looked like a positive close was in the cards, but the buying action was only so much.

Here were today's closing levels:

Dow 10,426.31 -11.11 (-0.11%)
S&P 500 1,109.79 -0.53 (-0.05%)
Nasdaq 2,193.14 -10.64 (-0.48%)

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Continue reading Closing Bell: An almost recovery (AMD, AXP, DRYS, ETFC, FTNT, VVUS)

Fed to chop gift card revenue stream

Retailers may lose a revenue lever to pull this upcoming holiday shopping season ... and it could be a big one. The number of shoppers expected to opt for gift cards rather than traditional purchased goods is likely to increase this year, as nobody wants to waste money on a loser present in a tough financial environment.

Gift cards make that problem go away, but flexibility isn't free. Retailers have tacked on a variety of fees to bring in a bit of extra cash from gift card sales, but if the U.S. Federal Reserve gets its way, these fees will be forced sharply lower.

Continue reading Fed to chop gift card revenue stream

American Express is in an uptrend

With American Express Co., (AXP), it's best to look down the field, i.e. think long-term, which is why I'm reiterating my Buy rating for the company, first recommended on April 27, 2009 at a price of $27.28. If you bought AXP in April, you're up about 51%.

As forecast, institutional investors (IIs) have looked right past AXP's likely double-digit revenue decline for 2009, to the probable sunnier skies in 2010. In the year ahead, charge-offs should continued to stabilize, amid slowing delinquencies.

Continue reading American Express is in an uptrend

Retailers offering new perks to encourage gift card giving

What's on your Christmas wish list? If the National Retail Federation is right, gift cards are probably holding a respectable place toward the top of the list. These little pieces of plastic are requested most this time of year, and they have the added perk of allowing people to get what they want instead of money wasted on presents that sucks. This trend may give retailers a hand this year, as they'll be able to keep their inventories down.

If shoppers are slow with the cash, retailers won't have to resort to just slashing prices as they had to last year to move product out the door. When the stuff on the shelves is cheap, gift cards aren't as attractive because there's a deal to be had! This year, if inventories are kept down, gift cards are more likely to move.

Continue reading Retailers offering new perks to encourage gift card giving

Was MasterCard's Q3 good or bad?

I've said on many occasions that I prefer MasterCard (NYSE: MA) to Visa (NYSE: V). No, I don't mean the card products themselves. I mean the stocks. I believe Visa has better brand equity associated with it, and I think it possesses a little more depth and fundamental prowess. However, both of these companies operate on the same basic economic model: collect fees on transactions, and don't take on loan risk. So, both MasterCard and Visa do offer compelling long-term investment theses.

And, even though there were some negative outlooks on MasterCard's latest earnings report, which was released Tuesday, I have to say that I didn't find the situation too disturbing. Revenues increased only 2%. The top line was inhibited by currency effects, but it's not like we haven't heard that story before. More importantly, MasterCard posted adjusted income of $3.48 per share, representative of a 40% increase over the adjusted income recorded a year ago.

Continue reading Was MasterCard's Q3 good or bad?

Visa charges through Q4 estimates, but future cash flow is the story

Visa (NYSE: V) is one of my favorite businesses on Wall Street. It should be an excellent long-term investment. People will always use branded credit cards, and Visa doesn't take a lot of risk. It simply collects a little of the spoils on each transaction. What a model!

According to TheStreet.com, Visa increased top-line sales by 10% in the fourth quarter, and expanded per-share profit by 28% to 74 cents, excluding certain items. Forecasts were for 72 cents per share.

Continue reading Visa charges through Q4 estimates, but future cash flow is the story

Quick opinions on some quarterly earnings: AXP, MRK, MCD, NYT, UP ...

A lot of earnings reports were issued last week. The market was busy sorting them all out. I'm going to take a fast look at several of the issuing companies.

American Express (NYSE: AXP): Don't leave home without it. Good advice for the card, perhaps, but what about the company? Should your portfolio leave home and forget this stock? I'd say so. It's not that American Express lost the earnings game. On the contrary, Bloomberg reported a beat. American Express earned 44 cents per share from continuing operations, adjusted. This was six pennies ahead of forecasts. Okay, I applaud such performance. And shares are way off the single-digit 52-week low. Thing is, I'm in love with another card business. Visa (NYSE: V). As I've stated before, I enjoy the beauty of Visa's lower-risk model. It doesn't have to put up with loan risk. Yes, the situation at American Express might be improving, but I'm not going to buy this one.

Continue reading Quick opinions on some quarterly earnings: AXP, MRK, MCD, NYT, UP ...

Analyst upgrades, downgrades and initiations: AXP, HAL, EL, MAT, CAT....

Analyst upgrades:
  • American Express (NYSE:AXP) was upgraded to Market Perform from Underperform at FBR Capital, as the firm sees limited near-term downside in the stock. The firm raised its target price on the shares to $37 from $25.
  • RBC Capital upgraded Estee Lauder (NYSE:EL) to Outperform from Sector Perform. Target to $44 from $34. UBS upgraded Nestle on expectations the company will begin returning cash to shareholders via buybacks and dividends.
  • Piper Jaffray raised Dicks Sporting (NYSE:DKS) to Neutral from Underweight following positive channel checks and raised its target on the shares to $28 from $18.
  • Sohu.com (NASDAQ:SOHU) was upgraded to Neutral from Sell by Pali Capital.
  • Halliburton (NYSE:HAL) was raised to Buy from Hold by Natixis.
  • Sunpower (NASDAQ:SPWRA) was upgraded to Neutral from Underperform at Macquarie.
  • China Automotive (NASDAQ:CAAS) was upgraded to Buy from Neutral at Merriman.

Continue reading Analyst upgrades, downgrades and initiations: AXP, HAL, EL, MAT, CAT....

Analyst upgrades, downgrades and initiations: AXP, CL, DLTR, PG, RIMM, UAUA ...

Analyst upgrades:

  • FBR Capital upgraded McAfee (NYSE: MFE) to Outperform from Market Perform after channel checks indicated the company's September quarter deal flow has been stronger than expected. FBR raised its target on shares to $50 from $41.
  • Thomas Weisel upgraded Adtran (NASDAQ: ADTN) to Overweight from Market Weight, citing increased wireless backhaul capex spending by Tier-1 carriers. The firm raised its target to $32 from $21.
  • RBC Capital upgraded Brunswick (NYSE: BC) to Outperform from Sector Perform as the firm thinks the company no longer has liquidity risk and can generate significant profits by 2012. The firm set a $17 target on the stock.
  • Bronco Drilling (NASDAQ: BRNC) was upgraded to Hold from Underperform at Jefferies.
  • LSI Corp. (NYSE: LSI) was upgraded to Buy from Hold at Deutsche Bank.
  • UBS upgraded U.S. Airways (NYSE: LCC) and UAL Corp. (NASDAQ: UAUA) to Buy from Neutral.

Continue reading Analyst upgrades, downgrades and initiations: AXP, CL, DLTR, PG, RIMM, UAUA ...

Discover surprises analysts in Q3

Discover Financial Services (NYSE: DFS), a credit card company that competes with Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AXP), released earnings for the third quarter on Thursday. The company put analysts to shame by posting a profit instead of a loss according to an article from Reuters.

The projection was for a loss of 12 cents per share. Discover actually made 52 cents per share of profit, once you exclude monies received from an antitrust settlement. Wow, that's what you call being way off the mark! The disparity surprised me, so I went to our very own earnings preview to see what we were reporting for an estimate. Sure enough, it stated the exact same expectation for a loss of 12 cents.

Continue reading Discover surprises analysts in Q3

American Express thwarts the naysayers

I'm Reiterating my Buy rating for American Express (NYSE: AXP), first recommended on April 27, 2009 at a price of $27.28. If you purchased American Express' shares then, you're up a modest 20% or so.

The pessimists regarding AXP have been off-the-mark. Don't misunderstand: we're still in an era of constrained credit with not enough capital (at least not enough capital deployed) for commercial operations, but credit market conditions are improving.

Continue reading American Express thwarts the naysayers

Analyst upgrades, downgrades and initiations: AMD, AXP, ACI, NOK, NRP, SYK, WPCS

Analyst upgrades:

  • Citigroup upgraded Advanced Micro (NYSE: AMD) to Buy from Hold and raised its target to $5.50 from $4.25 citing valuation and expectations for the company's competitive position and gross margins to improve.
  • Barclays upgraded American Express (NYSE: AXP) to Overweight from Equal Weight citing long-term earnings growth as the company benefits from declining charge-offs and credit costs. The firm has a $38 target on the stock.
  • JPMorgan upgraded Arch Coal (NYSE: ACI) to Overweight from Neutral and raised its target to $22 from $19 citing the FTC approval for the acquisition of Jacobs Ranch mine and valuation.
  • Bebe Stores (NASDAQ: BEBE) was upgraded to Overweight from Equal Weight at Stephens.
  • Cheesecake Factory (NASDAQ: CAKE) was upgraded to Neutral from Underweight at Piper Jaffray.
  • Ashland (NYSE: ASH) was upgraded to Buy from Hold at KeyBanc.

Continue reading Analyst upgrades, downgrades and initiations: AMD, AXP, ACI, NOK, NRP, SYK, WPCS

Cramer on BloggingStocks: A Citi, divided against itself, can prosper

TheStreet.com's Jim Cramer says this bank is the best call on the next leg of the market.

Citigroup's (NYSE: C) (Cramer's Take) plan to split itself into two banks -- the retail/service/investment bank and Citi Holdings, which would consist of (among other things) the household lending arm and the old special purpose vehicles -- will work if the government gives it time. It will work for the same reason the "Bankers Win Big in Toxic Pay Plan," article in The Wall Street Journal states: Much of what was thought to be worthless or worth pennies in Citi Holdings is really money good and will pay off when due.

That's how you can get the book value of Citigroup to go up, and given that Tier 1 capital has not been an issue -- they have a ton of it -- you are going to see book go up quarter after quarter.

Continue reading Cramer on BloggingStocks: A Citi, divided against itself, can prosper

Analyst upgrades, downgrades and initiations: AXP, FCX, FIG, JPM, LYG, RTP ...

Analyst upgrades:

  • Citigroup upgraded American Express (NYSE: AXP) to Buy from Hold and added the stock to its Top Picks Live list following the company's investor day. Citi believes American Express' credit trends are improving and raised its price target on shares to $36 from $28.
  • Janney Montgomery upgraded Gardner Denver (NYSE: GDI) to Buy from Neutral after meeting with management to reflect expectations for EPS growth in 2010 and valuation. The firm has a $38 target on the stock.
  • BofA/Merrill upgraded Freeport McMoRan (NYSE: FCX) to Buy from Underperform and raised its target to $87 from $49 based on strong copper fundamentals.
  • Cbeyond (NASDAQ: CBEY) was upgraded to Overweight from Equal Weight at Stephens.
  • Gibraltar Industries (NASDAQ: ROCK) was upgraded to Outperform from Neutral at Baird.
  • Fortress (NYSE: FIG) was upgraded to Outperform from Market Perform at Keefe Bruyette.

Continue reading Analyst upgrades, downgrades and initiations: AXP, FCX, FIG, JPM, LYG, RTP ...

Earnings highlights: Apple, Microsoft, Yahoo!, Bank of New York, Capital One ...

Here are some highlights from last week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Apple, Microsoft, Yahoo!, Bank of New York, Capital One ...

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Symbol Lookup
IndexesChangePrice
DJIA-14.2810,318.16
NASDAQ-10.782,146.04
S&P 500-3.521,091.38

Last updated: November 20, 2009: 08:26 PM

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