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November 21, 2009

 
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  Big Gains Found Among Select Sectors in Wild Week for Markets
11/20/09 

The Dow is trending lower to end a week when through Wednesday’s close the bulls showed strength and resilience.

Most of Monday’s triple-digit gains for the Dow were erased yesterday, after the bulls rallied from lows to end the prior two sessions. With stocks headed south to end the week, a number of investors are left shaken by the volatility. In certain sectors, however, prudent stock picking led to outsized gains as investors bid up share values on optimism for future prospects.

The Home Furnishing Retailer Stocks Index advanced by 17% today on the back of a 20.4% surge by Kirkland’s (NADSAQ: KIRK), the bulk of which came during today’s session. The company turned a profit of $5.6 million or 27 cents a share during fiscal Q3 ended October 31, significantly better than last year’s -$1.5 million loss for the same period.

Williams Sonoma (WSM) was also a big winner this week, adding 11% after reporting a swing to profitability in its fiscal Q3 ended November 1. Pier 1 Imports (PIR) was second runner-up for the period, though it is paring weekly gains to less than 10% with a loss during today’s session.

The Chinese Solar Stocks Index soared ahead of the S&P 500 this week, and is now beating the benchmark by more than 12% over the last month. Investors flocked to the sector as company after company reported surging shipment volumes on strong demand for solar modules.

The group’s top performer, LDK Solar (LDK) is up by 25% for the week ahead of its pre-market earnings report on Monday. Other big winners include Solarfun Power Holdings (SOLF), Canadian Solar (CSIQ), and Trina Solar (TSL), which are all up by more than 10% in the last five sessions.

Components of the Agricultural Chemical and Fertilizer Stocks Index can thank CNBC stock picking guru Jim Cramer for a dose of optimism this week.

Cramer noted that the fertilizer market is finally “at a bottom worth playing.” If the call is accurate, that would certainly be good news for companies like Potash (POT), Monsanto (MON), and Mosaic (MOS). All three are up by more than 7% in the last five sessions, but China Green Agriculture (CGA) set the pace with a massive 27% weekly run.

For more on tickerspy’s top-performing Indexes visit tickerspy.com.

  Amid Gambling Slump in Vegas, a Massive Overseas Casino IPO
11/20/09 

Overall, it’s been a rough month for U.S.-listed casino stocks, but amid struggles in Las Vegas, a massive Macau operation is about to go on the block.

Las Vegas Sands (LVS) chairman and CEO Sheldon Adelson is set to raise as much as $3.4 billion in the Hong Kong IPO of Macau unit Sands China. The company will sell 1.87 billion shares as early as tomorrow, according to Bloomberg. With a forecasted price range of HK$10.38 to HK$13.88 each, high-end estimates would bring Sands China’s total market capitalization to approximately HK$110 billion.

Las Vegas Sands is currently the largest U.S.-listed casino operator in the Casino Stocks Index, with a total capitalization of $11 billion. Based on the current exchange rate, that’s more than -20% smaller than high-end estimates of the Macau unit.

Elsewhere in the casino sector stocks have gotten much cheaper over the last month. While a recent report from the Las Vegas Convention and Visitors Authority showed that Sin City traffic was up 3.3% year-over-year in September, a number of casino operators reported declines in gambling revenue in the third quarter.

Melco Crown Entertainment (MPEL), Monarch Casino & Resort (MCRI), and Boyd Gaming (BYD) have all slipped by more than -20% in the last month. Meanwhile, Isle of Capri Casinos (ISLE), Century Casinos (CNTY), and $3.1 billion MGM Mirage (MGM) have all slipped by 10% or more for the period.

Peripheral plays on the gambling segment in the Gaming and Slot-Machine Stocks Index haven’t fared much better. Bally Technologies (BYI) is the sector’s only component to remain positive on a one-month basis. International Game Technology (IGT) and WMS Industries (WMS) are down by more than -7% in just the last week.

While the outlook for casino stocks is still a bit hazy, the sector has gotten cheap relative to earnings. As of this writing, the Casino Stocks Index is one of the 30 cheapest tickerspy Indexes by P/E ratio with an average multiple of 14x.

Investors can track the Casino Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

  25% Market Share for Plug-Ins by 2020, Pessimism on Buffett’s Pick
11/20/09 

Forecasting the potential proliferation of electric vehicles is a tricky task for investors.

When legendary value investor and Berkshire Hathaway (NYSE: BRK-A, BRK-B) CEO Warren Buffett talks, Wall Street listens. But when legions of like-minded money managers and individual investors follow his moves, it sometimes inflates stock prices beyond what Buffett would have been willing to pay in the first place.

On Tuesday, analyst Chardan Capital Market advised clients that the Buffett factor may have lifted Chinese electric carmaker and battery company BYD (OTC: BYDDF) too far, too fast. “It’s time to get off this bus,” Chardan explained, according to a report by Bloomberg. “Given that electric vehicles remain years away from gaining meaningful penetration, we would recommend investors take profits.”

So how far away is meaningful market share for electric vehicles? Certainly no one can be sure, but the Electrification Coalition offered its opinion earlier this week. According to AutoBlog, the coalition calls for plug-ins to make up 25% of the market by 2020. Given that some components of the Energy Storage and Battery Technology Stocks Index are members, the group’s outlook could be an optimistic one, but an interesting mix of other companies are also represented.

There are currently 13 Electrification Coalition members, seven of which are managers of U.S.-listed companies. Battery maker A123 (AONE) and global power solutions company Johnson Controls (JCI) are both represented, as are shipper FedEx (FDX), chemical company Rockwood Holdings (ROC), wind energy products firm AeroVironment (AVAV), and power companies NRG Energy (NRG) and PG&E (PCG). Nissan Motor Company CEO Carlos Ghosn is another notable member.

While it could be some time before electric cars are commonplace, there is a major push for their development underway. Among the takeaways from President Barack Obama’s recent China visit was a U.S.-China Electric Vehicles Initiative, which among other things calls for joint standards of development and public education projects.

Investors looking to capitalize on future developments in the electric car market can do so via a number of auto-oriented players in the Energy Storage and Battery Technology Stocks Index. As of this writing the majority of Index components have been discounted by double-digit percentages over the last month.

  Earnings, Upgrades Power Solar Stocks on a Down Day
11/19/09 

More earnings reports meant more big gains for select Chinese solar stocks on Thursday.

We’re starting to sound like a broken record, but it seems Chinese solar stocks can’t disappoint with their third-quarter performance. This morning’s reports from Suntech Power Holdings (STP) and Trina Solar (TSL) provided further confirmation of a demand surge in the sector, and investors are bidding up select components by as much as 10%.

As a whole, the Chinese Solar Stocks Index is ticking higher on mixed performance from individual stocks.

Suntech announced a -30% decline in third-quarter earnings this morning, bringing in $29.8 million or 16 cents per American Depository Share (ADS). The EPS was double analysts’ 8-cent forecast, and the company lifted its full-year shipment guidance by 10%. Suntech chairman and CEO Dr. Zhengrong Shi added, “Looking forward, we expect the sales momentum to carry into the new year and see potential for at least 75% shipment growth in 2010.”

Meanwhile, Trina Solar saw its third-quarter profits increase by 25% to $40.1 million or $1.29 per ADS, well above analysts’ 84-cent consensus. The company shipped a record 123 megawatts of solar modules in Q3, and Trina’s management also expects further upside to end the year. “We are seeing even stronger demand in the fourth quarter, reflecting increasing brand recognition for our products and a further improvement in financing conditions,” explained CEO Jifan Gao in the press release.

While Suntech and Trina are among the day’s winners, Solarfun Power Holdings (SOLF) is setting the pace with a 10% run. The stock is now up by more than 35% in the last five sessions, accelerating after more than doubling the Street’s Q3 EPS estimates yesterday morning. Oppenheimer upgraded Solarfun to Outperform from Perform this morning with analysts citing limited downside in the event of worsened macro conditions, according to Reuters. Oppenheimer has a $10 price target on the stock.

Canadian Solar (NADSAQ: CSIQ) is also among the day’s top performers, adding 4% to its five-day 30% rally.

Today’s losers include Yingli Green Energy (YGE), Renesola (SOL), and LDK Solar (LDK), which is giving back -3% after a 20% spike during yesterday’s session. Still, the entire Chinese solar segment is in positive territory over the last week. All but JA Solar (JASO) are ahead by more than 10% for the period.

As of this writing, the Chinese Solar Stocks Index on top of tickerspy’s one-month Index performance rankings, up by 15%. It should be an interesting sector to watch through the end of the fourth quarter, and into 2010.

Investors can track the Chinese Solar Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

  Bond ETFs: Consistent Safety From Market Pullbacks
11/19/09 

Investors have options when stocks and commodities both sell off, and bond ETFs can be bought with a standard equity account.

Thanks to the proliferation of exchange-traded funds (ETFs), equity investors now have a suite of options to protect themselves against a stock market selloff. Everything from commodities to currencies can be played with ETFs, but on a day like today, when they’re all selling off into cash, bonds emerge as the favorite.

A chart of the Bond ETFs Index versus the S&P 500 shows that, while relatively unexciting on the upside, bonds were largely immune to losses experienced by other investment vehicles during the recession.

On a day like today, when the Dow sinks by triple-digits, many investors are likely left wishing they had hedged their bets. However a look at the Commodity ETFs Index shows that only leveraged short ETFs like the PowerShares DB Crude Double Short (NSYE: DTO) and PowerShares DB Gold Double Short (DZZ) are winners today – so much for precious metals as a safe haven.

Meanwhile, a number of Bond ETFs are ticking higher during today’s session. While top performers like Vanguard Extended Duration ETF (EDV), PowerShares Insured California Municipal Bond Portfolio (PWZ), and iShares Barclays 10-20 Year Treasury Bond Fund (TLH) are all up by less than 1% for the day, long-term investors are slowly but surely gaining on their investments with very low downside risk.

Over the last three months, the SPDR DB International Government Inflation-Protected Bond ETF (WIP), SPDR Barclays Capital International Treasury Bond ETF (BWX), and iShares JPMorgan Emerging Markets Bond Fund (EMB) have all appreciated by more than 5%. Meanwhile, only five of the Bond ETFs Index’s 49 components are negative for the period, two of them being the ProShares UltraShort 7-10 Year Treasury ETF (PST) and ProShares UltraShort 20+ Year Treasury ETF (TBT), which bet the reverse of the underlying bonds’ performance.

As of this writing, the Bond ETFs Index is one of the top-40 performing tickerspy Indexes over the last month.

For more on bond funds or a variety of other sector-based ETF Indexes visit tickerspy.com.

  Cramer’s Pick for Energy Trust Merger Musical Chairs
11/19/09 

Stock picking guru Jim Cramer found an energy trust that gives investors “multiple ways to win.”

Canadian energy trusts have been shaken up recently as investors digest the sector’s prospects sans a tax benefit that helped ensure big dividends. Certainly 2010 should be an interesting year for the stocks, as most of the trusts will likely convert to corporations ahead of a 2011 tax law change. Two of the largest Canadian energy trusts, Penn West (PWE) and Pengrowth (PGH) have already outlined their plans for conversion plans in anticipation of the new legislation.

Meanwhile, other trusts have opted to be bought out in lieu of changing structure. In October, we covered Korean National Oil’s acquisition of Harvest Energy Trust (HTE), which sent shares of the latter soaring by more than 30%.

A look at the Canadian Energy Trusts Index’s one-month performance comparison shows that the group is largely in negative territory, excluding Harvest, Penn West, and Enterra (ENT).

CNBC’s Jim Cramer has taken a liking to the sector’s worst performer over the last month, Baytex Energy Trust (BTE), which prior to Thursday’s opening bell had slipped by -4.5% for the period. Baytex offers investors “multiple ways to win,” explained Cramer during his Mad Money program Wednesday evening. The stock could be viewed as a buyout prospect given the wave of M&A activity in the sector, but in the meantime investors are collecting a healthy 5.6% dividend, which if reinvested could compound nicely given stable oil prices.

On the commodity itself, Cramer said, “I don’t want you buying crude. I want you buying Baytex.” Investors can see how that call plays out by comparing the performance of Baytex to one of the various oil ETFs like the PowerShares DB Oil Fund (DBO) or the United States Oil Fund (USO).

Provident Energy Trust (PVX) and Precision Drilling Trust (PDS), both valued at under $2 billion, would be an easy buy for any big oil company, as would micro-cap player Enterra, which has a market cap of less than $100 million. Of course the fact that other trusts have been scooped up by suitors by no means guarantees the option for others, so investors should be prepared to endure any structural changes that might occur ahead of the changing tax law.

The Canadian Energy Trusts Index has been a mainstay on tickerspy’s top-yielding Index rankings, with components currently paying an average 6.1% dividend. It will certainly be an interesting sector to watch throughout 2010.

Investors can track the Canadian Energy Trusts Index’s for performance trends and a suite of other metrics at tickerspy.com.

  Cramer Likes the Dry Bulk Rally, Ag Stocks Room to Run
11/18/09 

Former hedge fund manager and rapid-fire stock picking guru Jim Cramer turned has bullish on shippers and agricultural stocks.

In his daily blog post at BloggingStocks.com, Cramer had this to say to bulk shipping and agricultural stock investors: “You are now about to look like a genius again.” The sectors suffered during the recession, and despite some impressive rebounds from lows, components largely remain well below last year’s high water marks.

On bulk shipping rates Cramer said, “When I saw them this weekend I thought it was a mistake.” Perhaps he should have listened more closely to China Ocean Shipping (COSCO) researcher Kong Fanhua, who called an 80% rally for the Baltic Dry Index back in September. The bulk shipping benchmark has now surged well past the 4,000 target Fanhua said it could reach by the end of the year.

Meanwhile, the Dry Bulk Shipping Stocks Index has outperformed the S&P 500 by 12% in the last month.

Cramer noted DryShips (DRYS), Diana Shipping (DSX), as well as Shipping Stocks Index components Nordic American Tanker (NAT) and Frontline (FRO) among plays on the sector.

As for agricultural stocks, Cramer highlighted Agricultural Chemical and Fertilizer Stocks Index components Monsanto (MON) and Potash of Saskatchewan (POT), noting that the fertilizer sector is “at a bottom worth playing.” He called Deere (DE), which can be found in the Farming, Mining, and Construction Machine Stocks Index the most controversial ag stock in the bunch, but he thinks the stock has set itself up well to impress with next week’s earnings report.

For more on these stocks, and more than 250 other sector-based equity Indexes, visit tickerspy.com.

  Telecom Dividends, Please Hold
11/18/09 

Don’t let the recent tech focus fool you, some cellular stocks are among the highest yielding investments on the Street.

Recent telecom headlines are dominated by smartphone wars between Apple’s (AAPL) iPhone, which operates exclusively on AT&T’s (T) network in the U.S., Motorola’s (MOT) Droid, which runs on Verizon’s (VZ) network and Google’s (GOOG) Android operating system – and of course, let’s not forget about Research In Motion’s (RIMM) popular Blackberry handheld line, which has offerings on a variety of networks.

While short-term investors place bets on their favorite smartphone stocks, a number of investors are watching the fight from afar, collecting healthy dividends from a variety of telecom plays.

Components of the Domestic Telecom Stocks Index pay an average 6.4% dividend – better than all but five of tickerspy’s more than 250 sector-based stock Indexes.

Whether betting on the iPhone or the Droid, one can be sure to earn healthy dividends from either phone’s carrier. AT&T and Verizon both pay out yields upwards of 6%.

Other top-yielding domestic telecom plays include local providers Windstream (WIN), Quest Communications (Q), and Frontier Communications (FTR), whose networks cover between 14 and 24 states. The stocks all pay out more than 8.5% dividends.

International telecom investors can look to the Chinese Telecom Stocks Index for ideas. While the group’s average dividend pales in comparison to the domestic plays, Taiwanese player Chunghwa Telecom (NSYE: CHT) has a once yearly payout that this year amounted to a 6.4% yield.

For more on these Indexes, or all of tickerspy’s top-yielding Indexes visit tickerspy.com. As of this writing the top-10 sectors are all paying out more than 6% in dividends on average.

  Chinese Solar Stocks: The Street’s Best Sector Extends Gains
11/18/09 

Solar stocks are hot this week, and with more news to come, investors will have plenty to digest before the weekend.

Yesterday evening, LDK Solar (LDK) announced that it would sell a 15% stake in its Chinese polysilicon plant for approximately $219 million. The news sent shares up by 14% in after-hours trading as investors welcomed the additional cash. LDK chairman and CEO Xiaofeng Peng said the deal will, “significantly strengthen our financial position and increase our near-term operating flexibility.” The company will report its third-quarter numbers before the market opens on Monday.

Today’s spike will put LDK ahead of its Chinese Solar Stocks Index peers over the last week, but it is one of many to put up double-digit returns for the period. Before today’s opening bell, the sector was already outperforming the S&P 500 by 11% in the last month.

Solarfun Power Holdings (SOLF) is also up big today after more than doubling the Street’s third-quarter EPS expectations. Solarfun brought in $20.1 million or 37 cents a share in net income for the quarter, ahead of the 15-cent EPS consensus. Revenue for the period was $144.6 million, slightly less than the analysts’ $145.1 million expectation.

China Sunergy (CSUN) is moving higher today after reporting an adjusted loss in the third quarter. The company missed analysts’ 2-cent EPS estimate by a nickel after adjusting for a $9.7 million gain from foreign currency exchange and other one-time items. Still, investors seem pleased with the 60% spike in quarterly shipments.

According to a report by the Wall Street Journal, the structure of solar sales may change as some players look to engage directly with the consumer segment. Suntech Power Holdings (STP), China’s largest U.S.-listed solar player by market-cap, is among those to enlist and train an army of locally-owned installers. The plan is to eliminate the middle-man, a strategy that has worked for companies like Trane air-conditioners and Anderson windows, according to The Journal.

The Street will be paying close attention to third-quarter reports from Suntech and Trina Solar (TSL) tomorrow morning.

As of this writing, the Chinese Solar Stocks Index is on top of tickerspy’s one-week Index performance rankings, up by 10.7%. Canadian Solar (CSIQ) and Yingli Green Energy (YGE) are among other top performers for the period.

Investors can track the Chinese Solar Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

  China Goes Where the Wind Blows
11/17/09 

Chinese wind turbine company A-Power Energy Generation Systems (APWR) soared higher on Tuesday after announcing plans for an American expansion.

A-Power announced late yesterday evening that it signed a cooperation agreement with U.S. Renewable Energy Group (US-REG) to construct a production facility in the United States. Products build on U.S. turf will be used to capture market share in North and South America. A-Power director and COO John Lin said, “A-Power sees great opportunities in renewable energy in America and this state-of-the-art facility will be our first major step towards bringing clean, renewable energy to the world’s largest wind power country.” In October the company was the designated turbine supplier for a $1.5 billion, 600MW Texas wind farm.

As of this writing, the the Wind Energy Stocks Index is ahead fractionally on the day. It is currently lagging the S&P 500 by -2% over the last month.

American Superconductor Corporation (AMSC) is slipping by less than -1% today after announcing a $10 million follow-on order from China’s CSR Zhuzhou Electric Locomotive Research Institute. CSR-ZELRI will purchase electrical components for use in wind turbines made by AMSC subsidiary AMSC Windtec.

Broadwind Energy (BWEN) and A-Power are the sector’s top performers over the last five sessions, both up by more than 15%. Meanwhile, multi-billion dollar players Quanta Services (PWR) and Owens Corning (OC) are among laggards, down by -2% and -1% respectively for the period.

T. Boone Pickens still didn’t hold any U.S.-listed wind energy stocks among his BP Capital Management hedge fund’s top-15 U.S.-listed equity positions at the end of Q3. The billionaire oil tycoon turned wind energy proponent decided to add new stakes in domestic oil and gas companies Hess (HES), SandRidge Energy (SD), and McMoRan Exploration (MMP) in lieu of alternative energy plays.

As of this writing, the Wind Energy Stocks Index is one of the top-65 performing tickerspy Indexes over the last week, up by 3%.