BloggingStocks

An Unhappy Anniversary for Stocks
Today marks a rather depressing anniversary. On Oct. 9, 2007, major U.S. stock indexes closed at an all-time high. The broad S&P 500 index closed at 1,565.15. Today - on Oct. 8, 2008 - the S&P 500 closed at 984.94.
http://www.businessweek.com/investing/insights/blog/archives/2008/10/stocks_an_unhap.html?campaign_id=twxa

4 Great Companies on Sale
Not only are these big, steady stalwarts cheap, but also they will keep your money safe. The are eBay, 3M, Microsoft and AT&T.
http://www.kiplinger.com/columns/picks/archive/2008/pick1007.htm

Financial Crisis: Your 10 Most Pressing Questions Answered
Kiplinger tackles the most common and pressing queries about the impact the turmoil has had on everything from retirement accounts to mortgages to annuities.
http://www.kiplinger.com/columns/ask/archive/2008/q1008.htm

Get Ready For State Budget Cuts and Service Cuts
States and municipalities are facing their worst budget crunches in decades - and it's only going to get worse. This is forcing officials to raise taxes and fees, lay off workers and slash spending - cutting aid to hospitals, schools, Medicaid and more.
http://money.cnn.com/2008/10/09/news/economy/states_feel_the_pain/index.htm?postversion=2008100906

7 Ways to Save on Winter Heating Bills
Thanks to spiking fuel costs earlier this year, the average U.S. household will spend an additional 15% on home heating between October and March, or roughly $151 more than last year's bill of $986. Here's how to put the freeze on your home heating bills while still staying warm.
http://www.smartmoney.com/deal-of-the-day/index.cfm?story=7-Ways-to-Save-on-Winter-Heating-Bills

10 Great Places to Retire if You Are a Democrat or Republican
Some retirees want to live among members of their own political party. Here are 10 great retirement spots that have skewed heavily Democratic or Republican in the past two presidential elections. For Republicans try Cincinnati, Ohio, Ft. Worth, Texas, Hoover, Alabama, Idaho Falls, Idaho or Ogden, Utah. Democrats should look at Chicago, Illinois, Dearborn, Michigan, Maplewood, NJ, Pembroke Pines, Florida or San Mateo, California.
http://www.usnews.com/articles/business/best-places-to-retire/2008/10/08/10-great-places-to-retire-for-democrats-and-republicans.html?PageNr=1

Cheap Chic for the Holidays
The dire economic climate has analysts predicting that Americans will curb discretionary spending this fall and into the holiday season. Still, big-box stores from Target to JCPenney to Wal-Mart are presenting affordable fashion by big-name designers who usually sell their goods at upscale boutiques for hundreds or even thousands of dollars. Here, we compare the products-and prices-of designers' high-end goods and their inexpensive lines for the mass market.
http://images.businessweek.com/ss/08/10/1008_cheap_chic/index.htm?campaign_id=twxa

Will the Federal Mortgage Plan Help You?
Who is eligible for Hope for Homeowners? Bankrate takes an indepth look at the new federal housing bill and which homeowners it will aid.
http://www.bankrate.com/aol/news/mortgages/20081009-hope-homeowners-a1.asp

Will McCain's Mortgage Plan Work?
Presidential nominee Sen. John McCain proposed spending $300 billion to buy bad mortgages. Holden Lewis looks at its potential impact.
http://www.bankrate.com/aol/news/mortgages/20081009-McCain-mortgage-plan-a1.asp

Best Oatmeal
When it's time for oatmeal, good things come to those who wait. The more cooking required, we found, the more oaty the flavor and the less mushy the texture.
http://www.consumerreports.org/cro/food/food-shopping/breads-grain/cereals/oatmeal

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Closing Bell: Stocks rebound as Uncle Sam comes to rescue, maybe; ANF, HUN, INTC all up

Jon Ogg — 2008-09-30T16:15:00+00:00

Filed under: After the bell, Intel (INTC), Market matters, Abercrombie and Fitch (ANF), CMGI Inc (CMGI)

Volatility is becoming the market's new name. Much of yesterday's 700+ point drop in the DJIA was largely erased as the DJIA was up more than 400 points for most of the last hour today. The markets weren't driven by a bailout package. It was the BELIEF that a new passage would get passed by the weekend. Consumer confidence did come in stronger than expected, although the Conference Board noted that the data cut off date was September 23, before the last round of malaise hit.

Here were today's unofficial closing bell levels:
DJIA 10,862.61 (+497.16; +4.80%)
NASDAQ 2,082.33 (+98.60; +4.97%)
S&P500 1,163.93 (+57.54; +5.20%)
10YR T-NOTE 3.827% (+0.195)
52-WEEK LOWS
TOP UPGRADES, many moved here.
TOP DOWNGRADES

Abercrombie & Fitch Co. (NYSE: ANF) rose after an analyst upgrade this morning. The young adult clothing company was raised to an "Outperform" at FBR. With shares on a year low and having sold off nearly 60% and a P/E ratio of well under 10.0, that brought some interest from Wall Street. Shares were up over 11% at $39.70 in today's final minutes.

Huntsman Corp. (NYSE: HUN) was one monster mover today. A judge ruled that the private equity firms that walked away could not claim the material adverse change. Shares were up a whopping 70% at $12.59 in today's final minutes.

Intel Corporation (NASDAQ: INTC) rose on a call out of Piper Jaffray as one of several key technology upgrades. The firm raised its Neutral rating to a Buy rating with a $22.00 price target. Shares were up 6% at $18.36 in the final minutes of the trading day.

CMGI Inc. (NASDAQ: CMGI) is now ModusLink Global Solutions, Inc. (NASDAQ: MLNK). Shares actually rose over 12% to $10.00 by the final minutes of the trading day.

Conexant Systems Inc. (NASDAQ: CNXT) rose sharply after the communications chip company raised its guidance to EPS of $0.24 to $0.26 vs. $0.15 estimates. Imagine a chip company raising guidance in today's climate. Shares were up 42% at $4.10 in the final trading minutes today on more than 5-times volume.

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Analyst calls: INTC, DT, ANF, RIMM, WFC, FITB, TDW, ROK ...

Eric Buscemi — 2008-09-30T11:15:00+00:00

Filed under: Analyst upgrades and downgrades, Intel (INTC), Research in Motion (RIMM), Abercrombie and Fitch (ANF), Analyst initiations, Wells Fargo (WFC)

Analyst upgrades:

Piper upgraded Intel (NASDAQ: INTC) to Buy from Neutral to reflect the company's strong competitive position and low valuation. The firm does not expect Intel to miss Q3 estimates.
Goldman upgraded shares of Deutsche Telecom (NYSE: DT) to Buy from Neutral and added the stock to the Conviction Buy List as they believe the dividend is well covered.
Wachovia upgraded Landstar System (NASDAQ: LSTR) to Outperform from Market Perform on valuation and potential near-term catalysts from hurricane-related activities.
Abercrombie & Fitch (NYSE: ANF) was raised to Outperform from Market Perform at Friedman Billings.
Research in Motion (NASDAQ: RIMM) was upgraded at JMP Securities to Outperform from Market Perform.
Baird lifted Wells Fargo (NYSE: WFC) to Neutral from Underperform.

Analyst downgrades:

Jefferies downgraded VCA Antech (NASDAQ: WOOF) to Underperform from Buy as they believe reduced consumer spending and rising unemployment levels will hurt the company's hospital and lab volumes in FY09. The company's target was lowered to $25 from $35.
Oppenheimer downgraded shares of Total System (NYSE: TSS) to Perform from Outperform to reflect the challenging macro environment and the customer portfolio risk from bank consolidation.

Deutsche Bank cut ChipMOS (NASDAQ: IMOS) to Hold from Buy and lowered the target to $3.50 from $5 to reflect the company's weaker Q3 outlook.
Fifth Third Bancorp (NASDAQ: FITB) was lowered to Neutral from Outperform at Baird.
Goldman removed Air Products (NYSE: APD) from the Conviction Buy List.
Nymagic (NYSE: NYM) was downgraded to Underperform from Market Perform at Keefe Bruyette.

Analyst initiations:

Jesup & Lamont expects Tidewater (NYSE: TDW) to continue growing through both accretive acquisitions and increased newbuild spending over the next few years. Shares were assumed with a Buy rating and $110 target.
B. Riley initiated UCBH Holdings (NASDAQ: UCBH) with a Buy rating and $8 target and believes the company has been proactive in addressing its problems and that the pace of credit deterioration will slow.
Zumiez (NASDAQ: ZUMZ) was initiated with a Hold rating and $15 target at Roth Capital, citing the difficult macro environment, tough comps and potential brand dilution.
Societe Generale started Rockwell (NYSE: ROK) and Emerson Electric (NYSE: EMR) with Sell ratings and targets of $33 and $34, respectively.
Smith & Nephew (NYSE: SNN) was assumed with an Equal Weight rating at Morgan Stanley.
Digital Realty (NYSE: DLR) was initiated at Baird with an Outperform rating and $50 target.

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Before the bell: Recovery expected; NCC, AAPL, GOOG, GS, FNM, WAG, WFC, INTC ...

Melly Alazraki — 2008-09-30T08:14:00+00:00

Filed under: Before the bell, Major movement, Earnings reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Pfizer (PFE), Intel (INTC), Market matters, Walgreen Co (WAG), Citigroup Inc. (C), Circuit City Stores (CC), Federal Natl Mtge (FNM), Research in Motion (RIMM), Goldman Sachs Group (GS), Abercrombie and Fitch (ANF), Economic data, Wells Fargo (WFC), Financial Crisis

U.S. stock futures were much higher Tuesday morning, following Monday's historic record plunge of 777.7 points in the Dow after the House of Representatives failed to pass the proposed $700 billion bailout plan. Investors hope a similar rescue package would pass soon and will tune in to listen to President Bush at 8:45 a.m. EST. Meanwhile, across the globe, Europe bailed out another bank, but markets in Europe are mixed. Asian markets, which close earlier, recorded mostly large declines. Also on tap today is data from the housing sector and a measure of Chicago-area manufacturing and consumer confidence for September.

It is also quite possible many have come in to buy at these prices for at least a short-term gain. If the VIX volatility index is any indication, then stocks may climb in the next few weeks.

Of stocks in focus:

National City Corp. (NYSE: NCC), whose stock plunged over 63% Monday on overall weakness but also as Moody's Investors Service placed its senior debt rating of A3 on review for a possible downgrade, is bouncing back over ~~15%~~ 30% in pre-market trading.

Citigroup Inc. (NYSE: C), which MOnday agreed to acquire Wachovia's (NYSE: WB) banking business for a knock-down price of $2.16 billion, with help from the Federal Deposit Insurance Corp. is also seeing its stock recovering from the over11% drop Monday by about 5.5% in pre-market action.

Apple Inc. (NASDAQ: AAPL) - after leading a tech selloff Monday and setting a new 52-week low, AAPL shares are showing much of a rebound. Google Inc. (NASDAQ: GOOG), which closed at $381 Monday, is showing some signs of new life, bouncing over 3% to $394 in pre-market trade. Similarly RIM (NASDAQ: RIMM) is bouncing 3.8% this morning.

Goldman Sachs (NYSE: GS) - The Financial Times reported Goldman is seeking to purchase up to $50 billion in assets from pressured U.S. banks, supporting its status change into commercial banking. GS shares are up over 3.5% in pre-market trading after closing down over 12.5% Monday.

Mortgage finance giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are facing a federal grand jury investigation into their accounting practices. Critics have long questioned the companies' bookkeeping. FNM shares are rebounding nearly 9% in pre-market trade.

Microsoft (NASDAQ: MSFT), Google, Yahoo! (NASDAQ: YHOO) and other web firms won a copyright victory in Congress Friday regarding Orphan Works for works whose owners cannot be located. Companies will only have to make a "reasonably diligent" search to locate a copyright owner before using their work in media including the Internet, and limits compensation required for the use of an infringed work.

Walgreen Co.(NYSE: WAG) reported Monday its net income rose almost 12% from a year ago thanks to cutting expenses and despite a broad decline in consumer spending. Results were inline with estimates. Shares have not reacted much so far.

Pfizer Inc. (NYSE: PFE) - The Wall Street Journal reports Pfizer will abandon its heart disease medicine development efforts, which include its cholesterol-lowering drug Lipitor as part of a broad research reshuffling it plans to announce Tuesday. It may also abandon therapies for obesity and bone health, to focus on more-profitable areas, such as cancer.

Analyst calls:

Wells Fargo (NYSE: WFC) was upgraded at Robert W. Baird from Underperform to Neutral. WFC shares are up 5.5% in pre-market trade.
Circuit City (NYSE: CC) was downgraded by RBC Captial Markets from Sector Perform to Underperform.
Abercrombie & Fitch (NASDAQ: ANF) was upgraded by Friedman Billings from Market Perform to Outperform. Price target $45.
Intel Corporation (NASDAQ: INTC) was upgraded at Piper Jaffray from Neutral to Buy with a $22 price target. INTC shares are bouncing 3.6% in pre-market action.

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Before the bell: Further declines; MER downgraded, SNDK may be bought, BA, DELL, MO ...

Melly Alazraki — 2008-09-05T08:01:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Deals, Dell (DELL), Market matters, Advanced Micro Dev (AMD), Altria Group (MO), Boeing Co (BA), Ciena Corp (CIEN), Merrill Lynch (MER), Amer Intl Group (AIG), Abercrombie and Fitch (ANF), Economic data, Unilever ADR (UL), SanDisk Corp (SNDK)

U.S. stock futures are pointing to further declines following a rough session where the Dow plunged 344 points and ahead of the jobs report mostly feared to show weakness in the labor market. Non-farm payroll is expected to show a job loss of 75,000 but the unemployment remain unchanged. Meanwhile, international markets sank following U.S. markets. Also affecting mood this morning is Goldman's call to sell Merrill Lynch.

Goldman Sachs downgraded Merrill Lynch & Co. (NYSE: MER) to Sell from Neutral and added the firm to its conviction sell list. MER stock is plunging 6.6% in pre-market trading. Goldman said valuation and the likelihood of further write-downs are the reasons. Goldman also lowered its third-quarter EPS forecast to a loss of $5.75 a share.

SanDisk (NASDAQ: SNDK) shares are shooting up 26% in pre-market trading after Samsung Electronics said it may buy the flash memory maker. There are no concrete announcements or details as to price yet.

And at Boeing (NYSE: BA), the company continues to negotiate with labor leaders to avert an expensive strike it cannot afford. Negotiators and mediators are trying to work to avert the strike voted for by the union during the 48 hour extension.

Altria (NYSE: MO) is in advanced talks to buy smokeless tobacco maker UST (NYSE: UST) for more than $10 billion, The New York Times reported. Altria wants to expand its offering into the smokeless market. Shares of UST are up nearly 19% in pre-market trading.

Dell Inc. (NASDAQ: DELL) is planning to sell most or all of its factories around the world within the next 18 months as it tries to cut costs, overhaul its production model and improve profitability, The Wall Street Journal reported.

More analyst calls from Briefing.com and Street Insider:

Credit Suisse upgraded Ciena (NASDAQ: CIEN) from Underperform to Neutral, but Merrill Lynch downgraded Ciena from Buy to Neutral.
UBS upgraded Unilever (NYSE: UL) from Sell to Neutral.
Merrill Lynch downgraded Advanced Micro Devices (NYSE: AMD) from Neutral to Sell, citing valuation.
Morgan Stanley downgraded American International Group (NYSE: AIG) from Overweight to Equal Weight.
Citigroup downgraded Abercrombie (NYSE: ANF) from Buy to Sell.

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Abercrombie & Fitch (ANF) same store sales disappoint again

Brent Archer — 2008-09-04T13:46:00+00:00

Filed under: Major movement, Bad news, Industry, Abercrombie and Fitch (ANF), Options, Technical Analysis

Abercrombie & Fitch (NYSE: ANF - option chain) shares are dropping sharply today after the company reported an 11% drop in August same-store sales when analysts had been expecting a 7.9% decrease. Last month, July sales disappointed investors and we pointed out a potential trade with an annualized return over 35%. That trade is still looking good for expiration in two weeks. Today, we have another similar trade idea if you missed out on the last one and still think this stock won't be rising too far in the coming months

This morning, ANF opened at $51.39. So far today the stock has hit a low of $50.87 and a high of $53.00. As of 12:00, ANF is trading at $51.29, down $3.42 (-6.2%). The chart for ANF looked slightly bullish before today and S&P gives ANF a positive 5 STARS (out of 5) strong buy ranking.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in eleven weeks as long as ANF is below $65 at November expiration. Abercrombie would have to rise by more than 25% before we would start to lose money. Learn more about this type of trade here.

ANF hasn't been above $35 since June and has shown resistance around $55 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ANF.

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J. Crew Group's Q2 fails to impress; avoid the stock

Steven Mallas — 2008-08-27T10:35:00+00:00

Filed under: Earnings reports, Gap Inc (GPS), Abercrombie and Fitch (ANF)

J. Crew Group's (NYSE: JCG) stock is not a thing of beauty. The retailer's shares have been weak for a long time, and the latest quarterly numbers did nothing to change my mind about the stock's prospects.

For the second quarter, J. Crew, whose competitors include Abercrombie & Fitch (NYSE: ANF) and Gap (NYSE: GPS), reported a 10% increase in top-line sales. Not bad, I suppose. But I'll tell you what, there is some bad to come. Operating income went down 15%. Gross margin saw an unfortunate decline, dropping from 43.7% to 41%. And earnings per diluted share came in at 28 cents compared to last year's 32 cents per diluted share. That's a better than 12% drop.

Now, there is something to consider with the stats. The earnings release states that a systems upgrade in the direct-sales channel is affecting the results. In fact, there apparently were some costs related to the upgrades that were unexpected. Management says that this sum was equal to $3 million. In theory, these upgrades will help to position the company for long-term growth.

But do I really care at this time? No. Perhaps J. Crew is investing properly for the future. That doesn't mean, however, that the company is a great investment idea. In fact, the market doesn't seem enthralled by the J. Crew story at all. The stock has declined 11% in the past month, and 44% year-to-date. Over the one-year period, shareholders are looking at almost a 50% drop in value! That hurts.

Also, J. Crew has cut its guidance for the year to a range of somewhere between $1.44 and $1.54 in terms of earnings per diluted share. Previously, management was hoping to deliver between $1.70 and $1.75 per diluted share.

The economy is weak. J. Crew's numbers are weak (granted, sales weren't bad). Guidance is terrible. And the stock might be sending would-be buyers a strong message: stay away.

It's fun (at times) to be a contrarian investor, but the story has to be a good one, and there has to be some indication that one could reasonably feel confident about waiting for a turnaround. J. Crew just doesn't do it for me at this time. Maybe when the economy finally turns around things will improve for the company. For now, though, I'd have to believe there are better investment concepts out there.

Disclosure: I don't own shares in any company mentioned; positions can change at any time.

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Aeropostale (ARO) sees excellent growth in Q2 -- could it last?

Steven Mallas — 2008-08-22T09:07:00+00:00

Filed under: Earnings reports, Gap Inc (GPS), Abercrombie and Fitch (ANF)

Aeropostale (NYSE: ARO), a retailer whose colleagues include Abercrombie & Fitch (NYSE: ANF), Pacific Sunwear of California (NASDAQ: PSUN) and Gap (NYSE: GPS), issued its Q2 report on Thursday. The stock didn't do much after the numbers were made public despite reporting a very nice 21% increase in sales during Q2, and a whopping 63% jump in earnings per diluted share to 31 cents. Why such a blasé reaction? Well, the retailer was only able to match the expectations of Wall Street analysts, so that might offer some justification for the lack of a decisive bid.

I felt the same way after reading Aeropostale's earnings release as I did after perusing the stats behind GameStop's (NYSE: GME) recent quarter, thinking the company deserved at least a little excitement, especially when one considers that last year at this time, the mall chain saw a 4% contraction in same-store sales. Of course, there is one understandable difference between the GameStop situation and the Aeropostale scenario. GameStop's stock wasn't trading near a 52-week high, and Aeropostale's shares are. So, perhaps the market is perceiving that a lot of the good news is already priced in.

Aeropostale has done well this year. Its stock is up over 28%. Should that concern potential investors? Perhaps. After all, this is a mall retailer based on fashion and investors must consider that Aeropostale's current hot streak could cool. If that happens, the stock might end up retreating back to the lower end of its 52-week range. While there are any signs that such a retreat will happen, I only want to throw into the discussion the concept of fickleness among the youth.

If you really like Aeropostale and want to buy its stock, it might not be so bad to wait for a better price, in my opinion, to allow at least a little margin for error.

Disclosure: I don't own any company mentioned; positions can change at any time.

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Earnings highlights: Abercrombie, Macy's, Kohl's, Sirius, UBS, Wachovia and others

Trey Thoelcke — 2008-08-16T09:40:00+00:00

Filed under: Earnings reports, Sirius Satellite Radio (SIRI), Kohl's Corp (KSS), Wachovia Corp (WB), Abercrombie and Fitch (ANF), Nordstrom, Inc (JWN)

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

Abercrombie & Fitch Co. (NYSE: ANF) posted solid Q2 results despite touch economic conditions.
Apollo Management LP swung to a net loss on a write down and litigation, but is on track for an IPO.
Cree Inc. (NASDAQ: CREE) beat analysts' expectations and raised its revenue guidance.
Dr Pepper Snapple Group Inc. (NYSE: DPS) beat earnings estimates and raised its full-year guidance.
4Kids Entertainment Inc. (NYSE: KDE) widened its Q2 net loss more than analysts had anticipated.
Kohl's Corp. (NYSE: KSS) topped Q2 expectations and raised its full-year guidance.
Lions Gate Entertainment Corp. (NYSE: LGF) unexpectedly swung to a Q1 profit as revenues soared.
Macy's Inc. (NYSE: M) beat Q2 expectations despite lower sales, and warned of weakness ahead.
Napster Inc. (NASDAQ: NAPS) Q1 net loss matched the previous quarter and the year-ago loss.
Nordstrom Inc. (NYSE: JWN) beat Q2 expectations despite a drop in earnings and lowered its guidance.
Sirius XM Radio Inc. (NASDAQ: SIRI) CEO predicted post-merger earnings next year.
Thomson Reuters Corp. (NYSE: TRI) Q2 profit fell while revenue soared, but still missed estimates.
UBS (NYSE: UBS) dismal Q2 results were accompanied by speculation of breaking up the bank.
Wachovia (NYSE: WB) revised its Q2 loss to include auction rate securities settlements.

Also, Jim Cramer warns against bearishness on the financials and also suggests that the collapse of commodities will buoy earings.

For more highlights from this week, see: Wal-Mart, JCPenney, MBIA, Deere, Applied Materials and others

Upcoming quarterly reports include Lowe's (NYSE: LOW), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), Target (NYSE: TGT), La-Z-Boy (NYSE: LZB), Saks (NYSE: SKS), BJ's Wholesale (NYSE: BJ), Limited Brands (NYSE: LTD), Barnes & Noble (NYSE: BKS), Burger King (NYSE: BKC), Gap (NYSE: GPS), Heinz (NYSE: HNZ), and Intuit (NASDAQ: INTU).

Visit AOL Money & Finance for more earnings coverage.

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Abercombie reports solid results in tough environment

Zac Bissonnette — 2008-08-15T13:29:00+00:00

Filed under: Earnings reports, Abercrombie and Fitch (ANF)

A hot retailer reporting a 4% drop in second quarter profit in the face of a 4% decline in same-store sales might not seem like good news but, in a very tough retail climate, it's a sign of how well Abercrombie and Fitch (NYSE: ANF) is holding up.

The stock's up more than 2% on the company's second quarter earnings, released this morning. The highlights:

Revenue up 5% to $845.8 million.
Abercrombie and Fitch same-store sales up 3%. abercrombie (kids clothes) SSS down 11%; Hollister down 9%, RUEHL down 22%.
EPS down 1% to 87 cents on improved gross margins.

For a company to increase gross margins in the face of soaring commodity costs and timid consumer spending is extremely impressive, and a testament to the company's continued pricing power.

Investors have to be somewhat troubled by the performance of Hollister and the much-hyped RUEHL. Hollister may have been hurt because, as a lower-price point version of Abercrombie (Abercrombie won't call it that but that's what it is), its shoppers may be more sensitive to the economy. The huge plunge in same-store sales at Ruehl indicates that that brand might not have the great future people once thought it did -- but at less than 2% of the company's total sales, it won't drag anything down.

The stock has taken a beating with the rest of the retailers but, long-term, its prospects remain as strong as ever.

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Before the bell: Futures climb with dollar as oil declines; ADSK, KSS, JWN, ANF, JCP, MBI, ABK, MER ...

Melly Alazraki — 2008-08-15T08:18:00+00:00

Filed under: Before the bell, Earnings reports, Deals, Google (GOOG), Apple Inc (AAPL), Dell (DELL), Berkshire Hathaway (BRK.A), Market matters, Penney (J.C.) (JCP), Merrill Lynch (MER), Kohl's Corp (KSS), Abercrombie and Fitch (ANF), Economic data, Nordstrom, Inc (JWN), Oil, Union Pacific Corporation (UNP), MBIA Inc (MBI)

U.S. stock futures were higher Friday morning, indicating stock markets could possibly extend Thursday's rally as the dollar rose and oil prices fell further. The dollar continues to make gains on the back of growing evidence of global economic softness. Still, several economic readings are due out today, including the New York Empire State manufacturing index , capacity utilization and industrial production -- all before the opening bell.

Retail will be in focus today after two Kohl's Corp (NYSE: KSS) and Nordstrom (NYSE: JWN) reported late Thursday, and J.C. Penney (NYSE: JCP) and Abercrombie & Fitch (NYSE: ANF) are due to report before the opening bell.

Kohl's Corp shares could start higher as premarket indication has them trading 2.3% higher, while Nordstrom's are trading 4% lower in premarket action. Kohl's quarterly profit fell 12% from a year ago, but the retailer lifted its fiscal year profit forecast. Meanwhile, upper scale Nordstrom, reported a 21% drop in second-quarter profits and cut full year outlook.

ANF said second-quarter profit fell on lower sales of jeans and T-shirts and forecast full-year earnings per share that trailed some analysts' estimates. JCP also saw profit decline but beat estimates and issued lower guidance.

Autodesk (NASDAQ: ADSK) shares are trading 10% higher in premarket action after the design software maker reported stronger-than-forecast second-quarter earnings Thursday after the close.

Bond insurers MBIA (NYSE: MBI) and Ambac (NYSE: ABK) spiked 7.7% and 16.2% respectively premarket after Standard & Poor's affirmed its AA credit rating on the two companies and said further downgrades were unlikely.

Berkshire Hathaway (NYSE: BRK.A), the investment firm run by billionaire Warren Buffett, revealed a stake in the energy wholesaler NRG Energy (NYSE: NRG) and acquired additional shares of train operator Union Pacific (NYSE: UNP). NRG is climbing 5.7% in premarket trading.

Merrill Lynch (NYSE: MER) will institute a hiring freeze for the remainder of 2008, and will avoid paying UK taxes for decades after it charged $29 billion of losses to its London-based subsidiary, the Financial Times wrote.

Republic Services (NYSE: RSG) overnight rejected the takeover bid from Waste Management (NYSE: WMI), saying its proposed merger with Allied Waste Industries (NYSE: AW) is more favorable. It also is declining to have discussions and negotiations with Waste Management.

BuisnessWeek has an interesting article on the man Dell Inc. (NASDAQ: DELL) has put in charge of its entry to the digital entertainment market. The former Apple Inc. (NASDAQ: AAPL) executive will try to overtake Apple's dominant hold of the market.

The New York Times reports that T-Mobile will be the first carrier to offer a mobile phone powered by Google (NASDAQ: GOOG)'s Android software.

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Abercrombie & Fitch (ANF) done in by weak July sales

Brent Archer — 2008-08-07T14:45:00+00:00

Filed under: Major movement, Bad news, Abercrombie and Fitch (ANF), Options, Technical Analysis

Abercrombie & Fitch (NYSE: ANF - option chain) shares are tanking today after the company reported a 7 percent decline in same-store sales in July, much worse than the 1.4 percent decline expected by analysts. Apparently, suburban Moms and Dads decided that $100 jeans were not the correct place to spend their economic stimulus checks. Either that or they were finally turned off by the three-quarters naked models in the store windows. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ANF.

This morning, ANF opened at $52.13. So far today the stock has hit a low of $49.55 and a high of $52.72. As of 12:50, ANF is trading at $49.55, down 6.18 (-11.1%). The chart for ANF looks bearish but S&P gives ANF a positive 5 STARS (out of 5) strong buy ranking.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $65 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in six weeks as long as ANF is below $65 at September expiration. Abercrombie would have to rise by more than 20% before we would start to lose money. Learn more about this type of trade here.

ANF hasn't been above $65 since late June and has shown resistance around $56 recently. This trade could be risky if the economy stages a rebound, but even if that happens, the position above could be protected by reluctant shoppers who still have lingering worries about their wallets.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in ANF.

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Analyst calls: AMGN, EDS, OVTI, V, MVL, ANF, LULU, URBN ...

Eric Buscemi — 2008-07-29T11:31:00+00:00

Filed under: Analyst upgrades and downgrades, Hewlett-Packard (HPQ), Abercrombie and Fitch (ANF), Electronic Data Systems (EDS), Amgen Inc (AMGN), Analyst initiations, Urban Outfitters (URBN), Marvel Entertainment (MVL)

Analyst upgrades:

Citigroup upgraded shares of Amgen Inc. (NASDAQ: AMGN) to Buy from Hold and raised the target price to $70 from $50 following AMGN's better-than-expected Q2 results and positive Dmab results.
Credit Suisse upgraded Electronic Data Systems (NYSE: EDS) to Neutral from Underperform and expects the Hewlett-Packard (NYSE: HPQ) transaction to close at the $25/share price.

Analyst downgrades:

JP Morgan downgraded OmniVision (NASDAQ: OVTI) to Neutral from Overweight citing slowing growth and increased competition, as well as the impact on margins.
Constellation Energy (NYSE: CEP) was downgraded at Lehman to Equal Weight from Overweight.
International Game Tech (NYSE: IGT) was downgraded to Market Perform from Outperform at Wachovia.

Analyst initiations:

KeyBanc said Visa's (NYSE: V) strengths are its recurring revenue model, significant pricing power, no consumer credit risk, operating leverage, expense flexibility, and considerable free cash flow, among other reasons. The firm initiated shares with a Buy rating and $94 target.
Regal Entertainment (NYSE: RGC) was assumed at Caris with an Average rating and $18 target. The firm sees tough comps ahead for the company and does not expect any meaningful price increases.
Caris also initiated Marvel Entertainment (NYSE: MVL), as they are positive on the company's new financing vehicle. Shares were initiated with a Buy rating and $45 target.
Goldman initiated textile, apparel and footwear stocks. Aeropostale (NYSE: ARO) and Urban Outfitters (NASDAQ: URBN) were initiated with Buy ratings, Lululemon (NASDAQ: LULU) and Abercrombie & Fitch (NYSE: ANF) were started with Neutral ratings and American Eagle (NYSE: AEO) was initiated with a Sell rating.

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INSIDE Contactless - taking mobile to the next frontier

Tom Taulli — 2008-06-30T16:51:00+00:00

Filed under: Next big thing, Abercrombie and Fitch (ANF)

Last week, I had a chance to talk to Rémy de Tonnac, who is the CEO of INSIDE Contactless. He was certainly upbeat. After all, his firm recently snagged an investment from Samsung Ventures America. In fact, some of the other investors include biggies like Nokia Growth Partners and Motorola Ventures.

Although, it's been a long journey. That is, INSIDE has been building its platform - which allows for contactless microprocessors - over the past ten years. But yes, things are starting to pay off.

INSIDE is focused on the so-called near field communications (NFC), which is a standard for mobile systems. Essentially, the technology helps facilitate mobile payments - which is likely to be a huge market.

However, for this to happen, Rémy believes that NFC must leverage innovation on the handset. For example, suppose you use your phone to pay for subway rides. So, wouldn't it be cool to receive an SMS message if your pass was about to expire?

Or, suppose you get an alert about a favorite band that will be in town next week. Perhaps you can get a video preview and, of course, buy some tickets?

"NFC can do things in a better way," said Rémy. "More importantly, it can also allow for new things - creating real value for consumers."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Oil briefly nears $140 as market awaits word on Saudi production hike

Joseph Lazzaro — 2008-06-16T13:56:00+00:00

Filed under: Middle East, Abercrombie and Fitch (ANF), Commodities, Oil

Oil briefly rose to a record $139.89 per barrel Monday before pulling back after a fire cut North Sea output, Bloomberg News reported Monday.

Oil traded briefly at $139.89 -- an all-time high -- before pulling back to trade up $1.73 to $136.60 per barrel in Monday afternoon trading.

An field off Norway's coast was shut down after a fire broke out Sunday. StatoilHydro ASA's 150,000 barrel-per-day Oseberg oil and gas field off Norway's coast accounts for about 5% of Norway's output.

The other major energy commodities also rallied Monday at midday on the news. Heating oil jumped about 7 cents to $3.90 per gallon, unleaded gasoline added about 3 cents to $3.49 per gallon, and natural gas climbed 29 cents to $12.91 per million BTUs.

Oil market: Dueling arguments

Energy trader Jim Dietz told BloggingStocks Monday the oil market is "in a battle to define reality" between the oil bulls and bears.

"It's the most even-handed battle we've had in about three months. This time the bears have a chance, in my interpretation," Dietz said. "Oil is up now on the [Norway] fire and the dollar's decline but the bears are hanging in there on the likely production increase from Saudi Arabia. Right now, this is a tug of war and nothing has been resolved." Dietz added that he is currently flat, or has no open energy trading positions.

Saudi Arabia, the world's largest oil exporter, is expected to increase oil production next month by 500,000 barrels per day, according to analysts and traders who have been briefed by Saudi officials, The New York Times reported Saturday. Dietz said if the production increase is confirmed in the days / weeks ahead, oil is likely to head lower.

"An increase of 500,000 barrels is not much in terms of global daily production but it sends a signal that the Saudis will accelerate production increases and that they now believe the markets are not well supplied at current levels," Dietz said. "That will take a lot of the short-term longs out of the oil market."

Further, Dietz added that unknowns regarding specific Saudi oil operations -- the kingdom does not publish oil production or investment statistics -- will also create more fear among oil bulls, in his interpretation. Dietz said it's generally believed that Saudi Arabia has about 3-5 million barrels of spare capacity, but can only reach the top of that increased production total in about three years.

"If the Saudis in fact have the ability to increase production faster, that would change this market in a hurry, no question," Dietz said. "What the oil bulls fear is a production increase of 500,000 barrels, followed by the announcement of another production increase of 500,000 barrels later this year. That would cause some hedge funds to exit this market quickly. It's something that the bulls have to be concerned about."

Last week, Saudi Arabia summoned oil producers and consumers to a June 22 summit in Jeddah to address the cause(s) of oil's relentless price rise.

Saudi Arabian Oil Minister Ali al-Naimi said the summit will find a solution to "stabilize" oil prices he argues are "unjustified" by supply / demand fundamentals, Bloomberg News reported Friday. The price of oil has risen more than 100% in in the past year and is up more than 400% since 2000.

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Guess? (GES): Shares cycle in bullish 'flag'

Larry Schutts — 2008-06-09T15:58:00+00:00

Filed under: Earnings reports, Analyst upgrades and downgrades, Gap Inc (GPS), Abercrombie and Fitch (ANF), Technical Analysis, Stocks to Buy

Guess? Inc. (NYSE: GES) designs, markets, distributes and licenses a trendy, upscale collection of contemporary apparel, accessories and related consumer products. The company operates 391 retail stores in the United States and Canada and 607 retail stores outside of North America, of which 63 are directly owned. It also distributes products through department and specialty stores around the world. Competitors include Gap Inc. (NYSE GPS) and Abercrombie & Fitch (NYSE: ANF).

Guess? surprised investors last week, when it reported Q1 EPS of 51 cents and revenues of $489.2 million. Analysts had been looking for 46 cents and $451.6 million. The CEO noted that international expansion continued to yield strong results. Management also guided Q2 EPS to 47-49 cents (47 cent consensus), Q2 revenues to $455-$465 million ($456.27M consensus), FY09 EPS to $2.40-$2.48 ($2.44 consensus) and FY09 revenues to $2.03-$2.08 billion ($2.05B consensus). Brean Murray subsequently remarked that the firm's projections remained conservative on a number of levels. Wedbush Morgan reiterated its "buy" recommendation on the shares.

The stock popped on the news and then moved into a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Altogether, brokers recommend the issue with five "strong buys" and two "buys". Analysts expect a 23% average annual growth rate, through the next five years. The GES Sales Growth rate (29.44%), EPS Growth rate (34.21%), Operating Margin (17.58%), Return on Assets (18.96%), Return on Investment (27.46%) and Return on Equity (33.17%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 69% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past fifty-two weeks, it has traded between $30.00 and $57.20. A stop-loss of $37.60 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Analyst downgrades: ANF, CHU, TD, LFUS, LLTC, ABMD

Eric Buscemi — 2008-06-03T11:33:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Abercrombie and Fitch (ANF)

MOST NOTEWORTHY: Abercrombie & Fitch, China Unicom and Toronto Dominion were today's noteworthy downgrades:

Friedman Billings downgraded Abercrombie & Fitch (NYSE: ANF) to Market Perform from Outperform citing soft comps which could impact EPS expectations in 2H08 and SG&A investing.
China Unicom (NYSE: CHU) was downgraded to Neutral from Outperform at Credit Suisse and to Equal Weight from Overweight at Morgan Stanley as the company's phone asset sales garnered a lower-than-expected price.
RBC Capital downgraded Toronto Dominion (NYSE: TD) to Sector Perform from Outperform citing expense initiatives in domestic retail banking which are hurting operating leverage, loan losses in U.S. banking, and muted capital markets revenues.

OTHER DOWNGRADES:

William Blair cut Littelfuse (NASDAQ: LFUS) to Market Perform from Outperform.
Linear Tech (NASDAQ: LLTC) was downgraded at UBS to Neutral from Buy.
Abiomed (NASDAQ: ABMD) was lowered to Neutral from Positive at Susquehanna.

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Insider selling on Abercrombie & Fitch (ANF) a warning sign for bulls

Brent Archer — 2008-06-02T13:28:00+00:00

Filed under: Bad news, Insiders, Abercrombie and Fitch (ANF), Options, Technical Analysis

Abercrombie & Fitch (NYSE: ANF) shares have been slipping some of late. Recent insider selling is also flashing a warning for this stock. Over the past three months, insiders have sold $59.0 miilion worth of ANF stock. Insider selling has slowed its pace over the past few months, but it is still happening. A filing released on Saturday indicated that a director at the company sold 7800 shares of ANF, valued at over $500,000. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ANF.

After hitting a one-year high of $85.77 in October, the stock hit a one-year low of $66.05 in January. This morning, ANF opened at $72.72. So far today the stock has hit a low of $70.50 and a high of $72.72. As of 12:25, ANF is trading at $70.70, down $1.90 (-2.6%). The chart for ANF looks bullish but deteriorating, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $85 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 6.4% return in three months as long as ANF is below $80 at August expiration. ANF would have to rise by more than 21% before we would start to lose money.

ANF hasn't been above $85 by more than a few cents at all in the past year and has shown resistance around $78 recently. This trade could be risky if the company's earnings (due out in on 8/15) are a positive surprise, but even if that happens, this position could be protected by resistance ANF might find at its 200 day moving average, which is currently around $77.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ANF.

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Dress up your portfolio with this apparel stock (TRLG)

Timothy Sykes — 2008-05-27T11:11:00+00:00

Filed under: Gap Inc (GPS), Abercrombie and Fitch (ANF), Under Armour'A' (UA), Technical Analysis, Stock screen, Liz Claiborne (LIZ), Stocks to Buy, Recession

I know, I know, with the economy sputtering, why would you ever want to be invested in an apparel company that produces expensive jeans? Let alone have it recommended by a typically short-selling trader like me! But before I tell you the name of this stock that despite the obvious economic problems -- strong oil, weak housing and the dollar, mounting foreclosure, etc -- is sitting right near all-time highs, looking to break out, let's do a quick rundown of its competitors in the apparel retail space.

There's Polo Ralph Lauren Corp (NYSE: RL) and Lululemon Athletica (NASDAQ: LULU), which after substantial runups and crushing drops off their highs, have been trying to find their footing. Then there are steady downtrenders Under Armour Inc (NYSE: UA), American Eagle Outfitters (NYSE: AEO), Pacific Sunwear of California (NASDAQ: PSUN), Liz Claiborne Inc. (NYSE: LIZ) and Bebe Stores (NASDAQ: BEBE). And last but certainly not least, the stock-that's-gone-absolutely-nowhere-for-the-past-six-years-meaning-its-been-useless-for-both-longs-and-shorts The Gap Inc (NYSE: GPS).And the winner for best apparel company that deserves your hard earned cash is True Religion Apparel Inc. (NASDAQ: TRLG), which at $23.75, is only $1 off its all-time highs. Ever since this clothing/jeans maker surged from $1 to $25 in just 18 months back in 2004-2006, its stock has been basing between $15 and $25. All the while short sellers have piled on, shorting over 10 million shares of the company's 17 million float.

With its latest solid earnings report and increased guidance, the stock broke to new highs on strong volume, no doubt worrying more than a few of those shorts. Trading with only a forward P/E of 15, which should drop to 12 or so (once analysts update to include the latest numbers) and booming sales growth in excess of 45%, this could become one mother of a short squeeze play, ideally breaking past $30, or possibly even $40 per share. Even if this breakout is just a fakeout, the downside appears limited around only 30% -- so with an upside potential that's double the downside, this stock is a good buy risk-reward-wise.

And let us not forget, second place in this category goes to Abercrombie & Fitch Co. (NYSE: ANF), which after some impressive gains, has been consolidating rather well, especially given the environment.

Disclosure: Timothy Sykes has no positions in any stock mentioned

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.

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