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1. PPI and Retail Sales
By David Sterman
8:32 a.m. EDT
After rising 0.2%, 0.4% and 0.2% in the prior three months, core producer prices (PPI) were flat in March, just below the 0.1% consensus. The year-over-year core price inflation rate was up 4.0% in February, but dropped to 3.8% in March. This is still higher than we need to see, but all signs still point to deflationary pressures and not inflationary ones.
Retail sales (excluding autos) fell 0.9%, compared to expectations of zero growth. Retail sales are likely to stay weak for quite a while as consumers continue to rebuild savings, so the best path to profit growth for many players will be a reduction in stores. A few more months of weak sales could leads to a fresh round of store closures -- which would be a real positive for the group.
2. JNJ Quarter
By Justin Ferayorni
9:04 a.m. EDT
Johnson & Johnson
posted a top-line miss and bottom-line beat on tight expense control. The consumer segment declined 5% in the U.S. -- J&J is seeing the same private-label competition as many of the consumer staples names. Medical devices looked OK, while pharma was weak as expected.
I'm interested to hear how the company grew Remicade in the quarter -- sales came in at $737 million up 9% in the U.S. Prescriptions were down nearly 20% in the first quarter. The company reiterated guidance for the year.
3. Not Everyone Is Bullish
By Chris Laudani
11:29 a.m. EDT
Helene, First Coverage has a software platform that sits between the sell side and the buy side. It collects, distributes and tracks actual, real-time investment recommendations that sell-side salespeople make to their clients. The system is used by 300 sell-side firms and over 1,000 sales people.
In a ruthlessly Darwinian process, the system weeds out poorly performing recommendations, sales people and firms. Many buy-side firms are directly allocating their trades and commissions to the best performers and dropping sales coverage from the poor performers. (Why would you trade with a firm that was sending you lousy stock picks?)
First Coverage aggregates all of the recommendations and publishes the results each week. The company has been collecting data for about two years.
The company claims the system has been amazingly accurate. For example, the week ending March 10, "buy" recommendations coming from the sell side rose 50%.
Right now, the sell side is decidedly bearish, telling the buy side to take profits.
The sell side is especially bearish on financials, consumer, industrials and energy. It's most bullish on telecom and health care.
The stocks receiving the most "buy" recommendations are:
4. Plenty of Upside Potential for Coal Stocks
By Gary Morrow
12:51 p.m. EDT
After a powerful bull market throughout the first half of 2008, coal stocks collapsed in early July along with the bulk of the energy sector. When the bottom was finally reached in November, companies like
had dropped over 80%.
What followed has been a long and uneventful consolidation over the last six months. Daily average volume in each of these names declined dramatically in early November as the stocks became fully sold off. This trend continued into early January, along with a narrowing of price activity, as the healthy bottoming process dragged on.
When this year began, volume picked up, sparking numerous brief rallies that quickly ran out of steam. Lower monthly highs were made in February and March, along with higher monthly lows, as price action continued to contract.
This ongoing process is forming what may become an important base. All three companies have a tremendous amount of ground to recover once a powerful breakout takes place. The stocks are not at that point yet but the technical picture for the coal sector has improved quite a bit over the last few weeks.
My favorite in the group is Arch. I have built a small long in the name this week and expect to add once the stock clears the March highs on a closing basis. At this point, the below-average volume over the last week is not confirming a significant breakout but the price action is positive.
There is quite a bit of potential upside in Arch, Massey and Consol, but it is too early to tell if they're ready to rally. For now the trio will be watched closely for signs of life.
5. If I Had Been Long/Short Dendreon Going Into Today...
By Paul Rubillo
1:33 p.m. EDT
Just wanted to respond to some readers who had asked me how I would have handled being short or long
into today's announcement. I would not be short a stock like DNDN by nature, but if I had been, I would have likely covered half my position at the open and taken the humble pie in the face. If the stock showed signs of holding strength, like it has done for the most part today, I would likely have covered the rest by now.
On the flip side, if I had been holding shares going into today, I would have automatically sold 25% at the open and then another 25% if the opening tick could not hold during the first 30 minutes of trading. From that point, I would be sitting with 50% of my position and just monitoring the stock's price movement throughout the rest of the day. If the shares fell more than 20% off the day's highs, I would be cashing in the rest of the chips.
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This article was written by a staff member of RealMoney.com.