01/02/14 - 02:58 PM EST
With the new year under way, let's get started with a look ahead and an audit of stocks on my Watch List. When you primarily fly red flags in an almost straight-up market -- which confuses brains in a bull market -- you just keep plowing ahead. I've been there, done that and doing it again. As longtime readers know, I don't make stock calls. I point out risk. And I don't view a story as having been proven right or wrong just because a stock rises or falls yesterday, today or even last year. (For that reason, I think it's an absurd measurement to judge investment managers on performance in a single 12-month period, but I digress.) Many of these stories can take time -- sometimes a long time -- to play out. They're not calls on the stock, but on risk that can get in the way of a stock. Rising stocks, especially in indiscriminate bull markets, can paper over any number of risks -- until they don't.READ FULL POST
12/19/13 - 02:47 PM EST
It may appear obvious to you, because you're an investor in a company whose shares have been pummeled. Maybe the past few quarters were horrible. Or maybe you're an employee, a former employee, a customer or a supplier. Everybody thinks they know who the year's worst CEO is -- or should be. Every year I go through this exercise of trying to determine who should be the worst CEO and who the runners up should be, and every year I anguish over it. I screen for bad performers looking at stock prices overlaid with various financial metrics. (My favorite is anything that shows growth, or lack thereof, though that can be skewed by acquisitions.)I solicit ideas from readers, social media followers and viewers. I consult with colleagues and analysts. I try to avoid being tempted by what might a good headline vs. who really deserves it.And then...I pick.READ FULL POST
12/16/13 - 04:35 PM EST
Yep, I know, with audited results Herbalife is free to do a big buyback, go private, whatever.BUT, in listening to Carl Icahn talk earlier today on CNBC about how the auditors somehow validate that Herbalife is a viable biz, all I could think: Let's not forget, the role of the auditor is to determine whether the numbers are audited in accordance with GAAP, not to weigh in on the bigger controversy, that is whether the company is operating an illegal pyramid scheme.And this re-audit of Herbalife's statements isn't because the company's numbers are suspect; instead, it arises because its former auditor had engaged in insider trading on Herbalife's stock.The company says there are no material changes in the audited reports, but it will be interesting to see just what changes there are. (Materiality, after all, is in the eyes of the beholder.)READ FULL POST
12/12/13 - 11:09 AM EST
Yet again names like Ulta Salon, Lululemon and Lumber Liquidators prove that the only thing that matters is when the company itself concedes that what was believed to be, isn't. That theme continues to rage through this Greater Fool's Theory market, as I have called it, leaving all who dare question the king looking like the joker ... until they aren't.That's something to think about as companies like Green Mountain continue to win favor in this super-caffeinated market, with the hype and hope of new products years out. A momentum-driven market like this rewards hype with the valuations of hope. It's perfect for the "buy on the rumor" pump, which can lead to valuations that for all but perfection leads to "sell on the news" dump.READ FULL POST
12/10/13 - 12:25 PM EST
Abercrombie & Fitch's board could learn a thing or two from the board at Lululemon, starting with getting one thing straight: The board controls the CEO, not the other way around -- no matter who the CEO is, how long he or she has been in the job or even if they founded the company. That's the moral of the story at Lululemon, where controversial founder Chip Wilson is stepping down as chairman in conjunction with the arrival of Laurent Potdevin, the president of Tom's Shoes, as CEO.The move comes as Lululemon, fresh from a CEO revolving door, attempts to revive its growth. Compare that with Abercrombie, where longtime CEO Michael Jeffries just received a year-long extension of his contract even though the company's growth and stock have been in freefall. READ FULL POST
12/09/13 - 09:52 AM EST
Every year this time I take nominations for the year's worst corporate CEO. I like to seek names from readers because, quite frankly, it helps spot names a screening process might miss. Not to mention that readers usually remember more than I do!Usually, there is no lack of choices and my email and social media feeds light up with names. But this year -- the various calls have been met mostly with, well, little in the way of new names. Is that because there are fewer bad CEOs? Nah. It's simpler than that: We're in a momentum-driven bull market, silly, and rising stock prices hide all sins.READ FULL POST
12/06/13 - 06:25 AM EST
Long before Ulta Salons' report of disappointing results Thursday, there were plenty of reasons to be wary: A revolving door of CFOs, including one who stayed just five weeks. A promotional CEO who left for something presumably better before his options granted -- and before the annual audit was completed. Ballooning inventory. And such things as concerns over aggressive accounting. Now even the company is conceding that even the sweetest perfume can't hide the bad odor seeping in from under the numbers. And I'm not talking about its revenue miss or surprising slice in guidance.READ FULL POST
12/04/13 - 01:32 PM EST
News that the FDA issued a Class 2 Recall against Intuitive Surgical may be more bark than bite. Since 2008 the FDA has issued five pages of recalls against the company. The FDA defines Class 2 recall as "a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote."The latest recall involves regarding friction with certain instrument arms, comes on the heels of growing controversy about robotic surgery involving the company's da Vinci system. Last year I did the documentary The Da Vinci Debate on CNBC.com.Intuitive calls the latest recall "a product correction."From its statement: "The company is taking this action after becoming aware that excessive friction within certain instrument arms could interrupt smooth instrument motion, which is felt as resistance by the surgeon. If a surgeon pushes through the resistance, the instrument could stall momentarily and then suddenly catch-up to the correct position."Stall momentarily? READ FULL POST
12/04/13 - 10:57 AM EST
Shortly after the J.C. Penney press release hit last night on how its post-Thanksgiving weekend sales were up 10% I tweeted: "JCP big comps for the holiday weekend but... against what? The company didn't issue post-t'giving #s a year ago, which likely were a bust." With the stock's pre-market decline this morning, it appears investors have come to realize the release was little more than a PR ploy that apparently has backfired.is this: While the company didn't give post-Thanksgiving sales last year they were sandwiched between -26% and -31% quarterly comps. Against that kind of performance, it isn't hard to show what appears to be a turnaround, especially with, as JCP put it in the press release, "compelling promotions." More recently, performance overall has improved, so anything in the plus column should not have been a surprise.The good news, I guess, is that the patient has a pulse. READ FULL POST
12/03/13 - 05:20 PM EST
Quentin Hardy's New York Times piece this morning about Google's aggressive push into cloud computing, with pricing to match, would not appear to be what the doctor ordered for Rackspace.As good as Rackspace's technology, marketing and customer service may be, the reality: The cloud (renting space on servers) is a commodity. Proof is in the pricing, and the big guys like Google, Microsoft, IBM and Amazon are more than willing to use it as a loss-leader. The impact gets buried in their results, but not Rackspace's, whose margins and growth are going the wrong direction. That's why its stock has been halved over the past year making me wonder: When does it reach a point that, for all that it does well -- not to mention its market share -- it gets bought up by one of the big guys? One hurdle may be valuation: It trades at 53-times trailing earnings; 48-times forward. But only 3.5-times sales. Value, of course, is in the eyes of the beholder. READ FULL POST
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.