This Is When the Money Is Made (DTG, SLW, DYN, BAC, AIG, EDV, SOL)
With the market in apparent freefall for the past two plus weeks, confidence can be easily shaken and it can be difficult to even look at the tape. However, this is when the money is made. It’s going against the natural instinct to flee and instead buy when everyone else is selling; it’s picking up high-quality stocks that have been thrown out with the bathwater. Anything remotely cyclical has been obliterated, even if their end markets appear strong. The selling certainly might, or even is likely, to continue beyond today, which is why we recommend easing into stocks using a multi-buy dollar cost average strategy (investors can also use put selling to help dollar cost average as well). While there are risks, the panic selling has gotten out of hand and the decline in valuations have placed quite a number of stocks back in the deep discount bargain bin.
The Bond ETFs Index was the top performing tickerspy Index on the day, led by Vanguard Extended Duration ETF (EDV) with a 4% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with ReneSola (SOL) down -18%.
Stocks were beaten to a pulp, with the Dow plunging -635 points to 10,810. The S&P nosedived -80 points to close at 1,119, while the Nasdaq tumbled -175 points to 2,358. Oil fell -$5.57 to $81.31 a barrel, while gold jumped $61.40 to $1,713.20 an ounce.
In earnings news, shares of Dollar Thrifty Automotive Group (DTG) plunged -11.5% after the company’s second-quarter results missed Wall Street expectations. Dollar Thrifty said it earned $1.35 a share on an adjusted basis in the quarter on revenue of $395.1 million. Analysts were expecting a profit of $1.37 a share on revenue of $408.6 million. The company raised its full-year EBITDA guidance to $270-$290 million from $260-$285 million.
Shares of silver miner Silver Wheaton (SLW) fell -2.7% despite an impressive jump in second-quarter profits. For the quarter, Silver Wheaton earned $148.1 million, or 42 cents a share, compared with $15.3 million, or 4 cents a share, a year earlier as sales more than doubled to $194.8 million. Silver production jumped 5% to 6.2 million ounces. Twenty-two pros held Silver Wheaton in their portfolios at the end of Q1 and nearly 1,700 tickerspy members own the stock in their portfolios.
Shares of Dynegy (DYN) slid -11.0% after the company reported a bigger-than-expected second-quarter loss. The seller of electricity reported a second-quarter loss of -$116 million, or -95 cents per share, compared with a loss of -$191 million, or -$1.59 per share, a year earlier. Revenue jumped 36% to $326 million. Excluding mark-to-market gains and losses and other items, EBITDA dropped to $102 million from $124 million. Analysts were expecting a loss of -61 cents a share.
Shares of Bank of America (BAC) tumbled -20.1% after insurance giant American International Group (AIG) announced a $10 billion lawsuit against the largest U.S. bank by assets in an effort to recoup losses on mortgage bonds. AIG said it suffered its losses on $28 billion of investments. One hundred fifty pros held Bank of America in their portfolios at the end of Q1 and over 6,700 tickerspy members own the stock in their portfolios.
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