The Insider Report

SFD, Smithfield Foods Inc scores 3 on our checklist

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Overall Score:3   Trading Chart +1                                               Smithfield is showing bullish RSI divergence but note the  correlation with lean hog futures which have fallen out of bed Analyst Opinion: 1 Barron’s made the bull case in an April 11th article, titled Can Smithfield Foods go Hog Wild? Strong Buy 5 Buy 4 Hold 6 Underperform 0 Strong Sell 0 Insider Buying: 1 There was significant insider buying in Sept 11.  Usually stocks are higher within six months.  SFD was … Read more

‘s Scandal A “No Issue” For Buffett

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In an interview earlier today with CNBC, Warren Buffet expressed very little concern over the super retailer’s recent issue with suspected bribery down in Mexico.  Although certainly a black eye for the management team, Buffett feels the situation is a representation of  bad choices made by a few rather than a deeper rooted issue of widespread poor practices.  Considering the retailer’s recent issues with workers unpaid overtime, legal issues with the treatment of women, and other socially based blemishes, I wouldn’t be so quick to dismiss this as a case of “a few bad apples.” (As of December 31, Berkshire’s … Read more

We are moving to a new server

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To our followers, we are busy posting on a new faster, more reliable server that will be live in less than 48 hours.  Until that time you will notice an absent of posts on the older server.  We’ll continue to tweet as there is a lot to tweet about with the market going back into risk on risk off mode.  Thanks for your patience and support.

Arthoscope scores 3 on our checklist but very undervalued.

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ARTC Arthoscope   This is a checklist I use to quickly come to a conclusion on a stock.  I score a stock, each line getting a 1, 0, or -1.  A stock that scored 1 on each line would be a perfect 10.  Buy it! Some of these items are quite subjective.  For example how would I score Cash Flow?  If a company’s cash flow is much lower than it’s reported earnings, that raises a flag and I would score it a -1.  If there are more insiders buying than selling, I would score it a 1.  If there are … Read more

Equity Fund Redemptions in April Are Largest in 17 Years – Bloomberg

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Here’s why April has been a challenging month for money managers.  I’ve felt like I’ve been swimming as hard as I can upstream all month just to stay even.     Equity Fund Redemptions in April Are Largest in 17 Years By Charles Stein – Apr 27, 2012 11:56 AM MT   Global investors this month pulled the most money from stock funds in any April in at least 17 years amid escalating concerns that Europe’s economy is faltering. Equity funds had net redemptions of $18.6 billion through April 25, according to data from EPFR Global, a research firm based … Read more

| Reuters

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Shell bullish on China shale gas One of my primary thesis is that American know how and technology for oil and gas drilling is way undervalued in the market.  The OIH is very cheap from fear of margin compressions due to the collapse in natural gas prices.  There is some truth to this in the short term but that ignore very bullish long term fundamentals. via Shell bullish on China shale gas | Reuters.

CHART OF THE DAY: Gundlach On Apple Vs. Google – Business Insider

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This is from Business Insider which if not particularly right is usually very interesting.  I personally disagree .  I do think Apple will spend some time basing before it takes off again and if I had to say where the basing would occur it would be around the just below the 200 day moving average at 525-575 but then again it could base around a nice round number like 600. Apple’s not going down in any meaningful way until someone comes up with better product(s) and so far everyone is copying them and not innovating.  Until there’s a real innovator, … Read more

Superior Energy Services, is it all a sector story? Score Zero

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This is a checklist I use to quickly come to a conclusion on a stock.  I score a stock, each line getting a 1, 0, or -1.  A stock  that scored 1 on each line would be a perfect 10.  Buy it! Some of these items are quite subjective.  For example how would I score Cash Flow?  If a company’s cash flow is much lower than it’s reported earnings, that raises a flag and I would score it a -1.  If there are more insiders buying than selling, I would score it a 1.  If there are no apparent catalysts … Read more

E.F. Hutton Breaks Silence – WSJ.com

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E.F. Hutton Breaks Silence Former Officials from the Old Brokerage Firm Look to Relaunch it Soon By AARON LUCCHETTI And BRETT PHILBIN I normally don’t blog about things that don’t have a prospect of making our readers money, but I couldn’t help myself.  This was a marquis firm that gave me my first job in the brokerage industry in 1987 (right after the crash).   A group of former officials from the old brokerage firm E.F. Hutton & Co. plan to start a new boutique financial-advisory firm under the same name. The group, led by former E.F. Hutton and Smith … Read more

Chesapeake discloses loans after Reuters report – Yahoo! Finance

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I remember back in 2008 I called the Company to ask them where Audbrey got all his money from that he used to buy massive amounts of stock in secondary offerings underwritten by Goldman Sachs.  I asked is the company loaning money to him?  They assured me they weren’t.  “Aubrey is rich,” they explained. “He has other sources of money.”  As it turns out they were less than candid.  Aubrey was borrowing money pledging his stock to buy more of it.  Talk about a guy trying to bluff down the world.  He lost and  I lost a lot of money in 2008 on … Read more

China Embraces Fracking in Seismically Active Province – Quakes to Follow?

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China Embraces Fracking in Seismically Active Province – Quakes to Follow? By John Daly | Sun, 26 February 2012 23:04 | 2   via China Embraces Fracking in Seismically Active Province – Quakes to Follow?. While hydraulic fracturing, more familiarly known as “fracking,” a technique used to liberate shale oil and natural gas deposits, is in many countries coming under increased scrutiny because of environmental concerns, China has decided to embrace the process as a way to develop indigenous energy reserves. While the U.S. is suffering from an overabundance, China and other emerging countries are well on their way to … Read more

Why Do You Hate The Oil Sector? And Yes, I Do Mean You..

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Watching SLB trade lower and lower is what I’m talking about.  Watching HES and HAL trade into the red is what I’m talking about. Watching BAS get crushed is what I’m talking about.  The market hates oil and oil service stocks.  Period.  Prices are high, these companies are making profits hand over fist, but demand for these companies simply isn’t there.  Despite SLB’s conference call, fracking still offers a major opportunity for these companies.  China is trying to sever their lifeline to coal, and shale drilling is the surgeon.  Sure natural gas is a big black eye, but this world … Read more

Sleep On This (TPX)

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Tempur-Pedic just got a taste of this ultra finicky market in a big way.  Earnings weren’t all that bad, but a slight change in guidance sent shares spiraling down almost 21% on the day.  The product is fantastic, it’s the only bed I’ve found to vastly improve my ability to sleep.  Just look at how many knockoff companies have emerged in the past year or so (although cheap, the quality is nowhere near as good).  It’s turned into a mini craze.  So does a slightly rockier outlook over the next few months merit the stock getting crushed?  I doubt it. … Read more

This Is Who Owns Apple

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These Apple charts from Business Insider are getting more and more interesting..  With all the headlines touting AAPL as hedge fund’s number one holding, it’s a bit startling to see how small a slice of the company they actually control.  Looks like wirehouse brokers couldn’t have found an easier story to pitch to their clients..   CHART OF THE DAY: Apple Stock Ownership – Business Insider.

NLY, Annaly Capital Management scores low inspire of being a Cramer have

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Overall Score: 1   Trading Chart: 1           Analyst Opinion: -1 Strong Buy 0 Buy 7 Hold 16 Underperform 0 Strong Sell 0 Insider Trading: 1 Large purchase Kevin Keyes on 8-8-11 of 50,000 shares at $17.13.  Numerous exercises without evidence of sales, quite bullish considering the negative tax implications of exercising stock and not selling sufficient amount to pay taxes. Management Discussion and Analysis: 0 Company is extremely vulnerable to changes in financial market conditions and liquidity in mortgage related assets The potential limiting / winding down of Fannie and Freddie will negatively impact securities … Read more

Someone Smarter Than You Just Sold All His AAPL

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Aswath Damodaran is what the investing world would call smart money.  As  a professor of finance at NYU, he wrote Damodaran On Valuation.  And yes, that means he wrote the book on valuation.  So when you hear that he just dumped AAPL from his portfolio with a cost basis of $5 a share, should you follow suit?  Price targets, valuations, and headlines aside, Aswath is simply following the most fundamental rule of investing: if you don’t like the stock, then just get out.  Now Aswath doesn’t have a problem with Apple, rather it’s with the type of people currently buying … Read more

Revision 5-19 Score is negative now.CALL, magicJack Vocal Tec Ltd Snapshot scores high at 7 of 10

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  Overall Score: 7 Trading Chart: 0 The chart is neutral to me at the moment.         Analyst Opinion: 1 Strong Buy 1 Buy 1 Hold 0 Underperform 0 Strong Sell 0   Insider Trading: 1 Recent insider buy at by Dir Ventor of 22,000 at $23.07 on 4/13/12 is a strong endorsement Management Discussion and Analysis: 1 Potential E911 regulation fees for nomadic VOIP providers Network Neutrality is key in the Company being able to provide it’s services to customers Change in contributions to USF will negatively impact net income Continued product and service innovation will … Read more

PMC, PharMerica Corporation will be proven right turning down $15 from Omnicare

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Overall Score: 3   Chart: 1 See chart Analyst Opinion: -1 Strong Buy 1 Buy 1 Hold 6 Underperform 0 Strong Sell 0   Insider Trading: 1   Management Discussion and Analysis: 0 Omnicare withdrew from their hostile takeover offer at $15 share after FTC moved to block the takeover Government and Regulation risk is high Shift from Branded to Generic drugs is resulting in accelerating margin compression Pharmacies are subject to federal and state laws regulating financial relationships with healthcare providers Pharmacies are licensed and are regulated under the DEA and FDA These laws and regulations may impact business … Read more

The New Share Class Warfare

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After hours and after earnings last night, Google (GOOG) announced a 2:1 share split.  However the split has an ulterior motive other than reducing the cost per share, as Google’s co-founders are also looking to revamp the corporate structure as a result.  With the split, a new share class will be formed other than the already existing Class A and Class B shares.  This new class will trade under a different symbol but will retain all the rights of the previous two share types, including the ability to collect any future dividends.  Here’s the catch though: ownership of these Class C … Read more

VRX, Valeant Pharmaceuticals remains a mystery. What does the CFO see?

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Overall Score:   Trading Chart: 0                         Analyst Opinion: 1 Strong Buy 5 Buy 10 Hold 3 Underperform 1 Strong Sell 0   Insider Trading:1 Insiders definitely see some potential here leading off with the CFO Schiller’s apprarent open market purchase of 27,800 at $53.64 between 3-1 and 3-12     Management Discussion and Analysis: 1 Government regulation risk is high Significant product liability risk 2012 guidance for revenue in the $3.1-$3.4bn range Company merged with Biovail in Sep 2010 Company claims 9% organic growth in 2011. Results are murky … Read more

CAKE, Cheesecake Factory is tasty but leaves one hungering for more

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Overall Score:0   Trading Chart: 0                         Analyst Opinion: 0 Strong Buy 5 Buy 5 Hold 17 Underperform 1 Strong Sell 0 Insiders: 1 Director Simon persistent buyer Management Discussion and Analysis: 0 Government and Health Safety Risk is High Comp sales rose 2% driven by increased traffic, and higher average checks which included pricing increases Cost of sales increased 60bps to 25.5% due to higher dairy and grocery prices International Expansion risk (22 stores over 5 years) which is concentrated in the MENA region 170 total restaurants, 11 … Read more

RYN, Rayonier Inc. Snapshot

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Overall Score: 6   Trading Chart: 1                   Analyst Opinion: 1 Strong Buy 3 Buy 2 Hold 2 Underperform 1 Strong Sell 0   Insider Trading: 1 Director Brown bought 17,000 shares at 44.26   Management Discussion and Analysis: 1 Sales benefited from price and volume increase in timber. Cellulose sales were strong with an increase in volume and price Absorbent materials sales were stagnant as higher prices offset lower volume Housing activity is a key driver for lumber demand Eastman Chemical (15%), Celanese (11%) and Nanton Cellulose (11%) are top 3 … Read more

FDP Fresh Del Monte Produce Snapshot

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Overall Score: 1 Chart: 1                       Analyst Opinion: -1 Strong Buy 1 Buy 0 Hold 4 Underperform 1 Strong Sell 0   Insiders: 1 CEO Amir Abu-Ghazela buys 100,000 shares at 22.59 between 3-1-12 and 3-6-12. Management Discussion and Analysis: 0    Government and Regulation Risk Natural Disaster Risk Sales rose slightly largely due to higher prices, partially offset by lower volumes Gross margins improved slightly because of higher sale prices, partially offset by higher fuel costs Higher SG&A expenses due mainly to increased selling and mkting expenses in South Europe Fuel … Read more

HAL, Halliburton Company Snapshot

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Overall Score: 6 Chart: 1                       Analyst Opinion: 1 Strong Buy 12 Buy 21 Hold 2 Underperform 0 Strong Sell 0  Insiders: 1 Director Gerber bought 30,000 shares at $36.84 Management Discussion and Analysis: 0 Government, Political, Environmental and Regulation Risk is very high Catastrophe / Accident Risk is high Sales rose significantly due to higher rig count and demand for services particularly in NA Operating Income increased due to improved demand and pricing particularly in the Completion and Production segment Corporate expenses increased due to higher legal expenses Demand … Read more

‘s One In Sand

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US Silica went public at the beginning of February.  And the first direct play on sand has been on a tear ever since. Up around 24%, SLCAs appreciation has been due to the rising demand for sand in the fracking process of extracting oil.  The fact that some of the larger resource companies have simply bought their own sand manufacturers bodes well for the company, in conjunction with a steadily rising demand for the product. Along with Heckmann Corp. (HEK), US Silica could be a nice indirect play on the US becoming a oil producing powerhouse.  It’s worth taking a … Read more

We Will See QE3. Just Not Until We Need It

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The notes from yesterday’s Fed meeting have managed to spur back-to-back down days in the market, seemingly all based on the lack of language hinting at an immediate round of Quantative Easing.  This market is hooked.  It fiends for stimulus injections, pitching a tantrum at the slightest hint of being denied what it assumes is “promised.” This reluctance to dole out yet another “dose,” this sign of maturity on the part of the Fed is a glimmer of hope that fiscal responsibility is on the horizon.  Over medicating is a self fulfilling prophecy, spiraling into the depths of physical reliance. … Read more

Why Are Oil Markets So Short Sighted?

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Other than the occasional headline, the Iran embargo is a distant memory.  And oil markets seemed to forget that an increasing oil reserve is a direct result of preparing for such an embargo.  Just because reserve levels happened to beat expectations (it’s not like analysts regularly and accurately deal with embargo situations anyways), is it reason for a 2% or more correction in USO?  I doubt it.