As Nvidia Struggles, So Do AMD and Intel

Brian Pham submits:

If you've taken a peek at Nvidia's stock recently (NVDA) you may have noticed that it is trading at $11.82, down some 33% from a week ago, and down 66% from its 52 week high. What gives?

Last week Nvidia had a pre-earnings announcement warning that revenues and margins wouldn't meet analysts expectations. Its reason?

Temporary Solar Bottom? 3 Stocks That Look Like Bargains

David White submits:

Many of the solar stocks are now quite decently priced, and they are showing strength. The S&P500 recently returned to its low of 1250. Yet stocks such as LDK Solar (LDK), ReneSola (SOL), and Solarfun Power (SOLF) are significantly above their year lows. This is a good sign for the industry.

Still, these stocks are significantly off their more recent highs, so they look like bargains again. The reasons for their fall are many:

And the Oil Derby's Off...Way Off

Hard Assets Investor submits:

by Brad Zigler

Handicappers in the oil derby have been losing their shirts recently. You could hear the fabric tearing further this morning after the U.S. Energy Department released its latest inventory numbers.

Kroger & Wal-Mart: Falling Prices and Rising Profits

Wall Street Strategies submits:

It is no secret that the American consumer is pinched for cash in light of inflationary pressures, leaving them frustrated and even angry whenever they need to go to the store to purchase a good or service, or even just fill up their tank. It remains true, though, that consumers still have their needs and are very much still purchasing products and services, albeit in a thriftier manner.

Status Report: APP Pharmaceuticals - Fresenius

The M & A Researcher submits:

The acquisition of APP Pharmaceuticals, Inc. (APPX) by Fresenius looks to be fairly routine from a regulatory standpoint, as APPX's injectable products compete in an extremely robust market. Its primary competitors are major players such as Bedford, Baxter, Teva, and Hospira, all of which have increased their presence in the injectables market by acquiring APP's competitors in recent years (see this FTC Consent Order regarding Mayne/Hospira).

Of importance from a competitive perspective is the fact that Fresenius' Kabi unit offers a variety of "infusion therapies", but does not offer injectables pharmaceuticals similar to APPX's products, nor does its infusion products address the treatment areas (oncology, anti-infectives, critical care) of APPX. In short, there appears to be literally no competition issues associated with this combination.

Status Report: Puget Energy - Macquarie Infrastructure Partners

The M & A Researcher submits:

While the overall perception of the Puget Energy (PSD) - Macquarie Infrastructure Partners transaction remains highly negative, it must be pointed out at this time that: a) the Washington UTC settlement conferences are apparently proceeding without delay, and b) the companies have provided pro-consumer publicity for the transaction over the last few weeks. Both of these developments are considered significant with respect to moving this transaction towards the possibility of successful conclusion.

The UTC process is significant in that is have been, and remains, expected that the procedural schedule in this case will encounter some revisions and substantial delays. The fact that the settlement conferences have not been postponed suggests that the UTC staff is willing to start the negotiations despite the current posture of the staff against the transaction. This should be considered very tentative and essentially the preliminary stages of negotiations, but the lack of procedural schedule alteration must also be viewed as an overall positive at this stage. Naturally, the settlement conferences are subject to delays as the continue over the next two weeks.

Gold Appreciation Outshines Wall Street, Main Street

Michael J. Kosares submits:

Gold continues to shine as one of the best performing asset classes through the first half of 2008, according to the USAGOLD Annual Survey of Investments. Only the CRB index, which of course includes a gold component, outperformed gold itself over the past year. Arguably it was the latest surge in oil prices that allowed the broad measure of commodities to supplant gold from the number one position over the last month of the second quarter.

As encouraging as the coveted bottom of the survey chart is to the gold owner, the top of the chart is extremely troubling for most households. The two biggest losers are the asset classes where the vast majority of the net worth of most individuals is wrapped up, equities (stocks, mutual funds, 401ks, etc) and the family home.

Raymond James Analyst: Copper Equities Are Inexpensive

FP Trading Desk submits:

The performance of equities in the copper producer universe have underperformed the underlying commodity during the past few weeks, says Raymond James analyst Tom Meyer, pointing out in a research note the overall Price/Net Asset Value multiple of .7x was lower Wednesday than it was on May 30, when it stood at 0.78. Over the same period, the average copper price increased to $3.50 pound from $3.41 per pound.

The result, he says, is that, except for African Copper plc and Ivanhoe Mines Ltd. (IVN), almost all copper equities in his coverage universe are inexpensive. However, he highlights Quadra Mining Ltd. (QADMF.PK) and Inmet Mining Corp. (IEMMF.PK) as the “easier” names to own in the current environment of heightened uncertainty over deflation/inflation risks and concerns about global growth. “In our opinion, both companies offer value, longer dated project pipelines and favorable political risk profiles.”

ETF Update: Gold, Metals ETFs, Potash

Tom Lydon (ETF Trends) submits:

Gold ETF Making History

The largest gold ETF has been a real trailblazer lately.

The SPDR Gold Trust (GLD) is the most actively traded call option on the Chicago Board Options Exchange, reports Sophia Grene for the Financial Times. The news is remarkable because it’s only been a month since the options began trading.

Predicting the Future of a Troubled Business

Joe Ponzio submits:

A visitor just sent this email to me and I figured (as per his last line) that it would be better suited in a post rather than in a private email response. The question: Should I use the owner's margin on lowered sales as I project the intrinsic value of a company rather than sticking with historical growth and projections?

I will not take too much of your time. I'm valuing a company which sells durable goods (appliances) and it would seem like BDK is undervalued from 2007's FCF. Nevertheless, the idea that consumers might stop spending as much on these items gives me another reason to question my FV estimates.

The Art of Finding Fallen Angel Stocks

Joe Ponzio submits:

Folks — as you can imagine, I have been busy ripping through annual reports and financial statements like crazy. Hence the irregularity to my posting. Back in October of last year, I had a lot of time on my hands — the effects of a high market and few opportunities. That situation has reversed.

What am I looking for? The economy has been putting a squeeze on a lot of companies, slamming profit margins, revenues and earnings. When this happens, companies have to start shedding assets — human and physical — in an effort to return to normal levels of profitability. When profit margins are thin, the business' are at risk (think GM, Blockbuster). When profit margins are fat under normal conditions, the business is sound, even if it takes a substantial hit to sales.

Hedge Funds Living Up To Their Names

Larry MacDonald submits:

1.  Weren’t stocks suppose to be sure bets for the long term? That’s what some pundits are asking lately: the annualized gain (to June 30) in the S&P 500 is just 1.2% over the past 10 years. Hey, wait a minute, one might counter -- stocks still are good bets for the long run: the annualized gain in the S&P 500 over the past 20 years is 8.1% (add 1% to 2% for the total return calculation).

2.  During the first six months of 2008, the S&P/TSX Composite Index rose 4.6%. But the gain was narrowly based: without increases in Potash (65%), Encana (38%) and Canadian Natural Resources (39%) shares, the index would have risen only 0.1%. By comparison, the resource-light S&P 500 tumbled 12.8% over the first six months; the fall would have been a bit worse without Wal-Mart’s 18% appreciation.  Japan and France had some of the worse declines over the past year; their markets have plunged 26% and 27%, respectively.

Phil Fisher on Profit Margins

Joe Ponzio submits:

Phil Fisher laid out fifteen points to look for in a common stock; three of them are directly related to profit margins. Calculated as net income divided by revenue, the profit margin is a quick way to determine which companies in an industry are most efficient (i) relative to the competition, and (ii) as a whole.

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