The Mosaic Company (NYSE: MOS) is a Plymouth, Minnesota-based producer and marketer of concentrated phosphate and potash crop nutrients for the worldwide agriculture industry.
Mosaic will announce its second-quarter financial results next week. For the first quarter, the company posted total phosphate sales volumes of 3.1 million tons, and total potash sales volumes of 1.7 million tons. The company’s gross margin was 23% in the first quarter. It posted a net income of $297.7 million, or $0.67 per share.
For the second quarter, the company expects total phosphate sales volumes to come in between 3.3 million and 3.6 million tones and total potash sales volumes to come in between 1.6 million and 1.9 million tons.
The Mosaic stock has a 52-week range of $37.68-$74.25. Year-to-date, the stock is up 18.95%.
The Dow Chemical Company (NYSE: DOW) is a Midland, Michigan-based company engaged in the manufacture and sales of chemicals, plastic materials, agricultural and services, and other specialized products and services.
Earlier this month, Dow announced that it plans to build a new Propylene Glycol Plant in Thailand. The company said that it plans to build a plant with production capacity of up to 150 KTA.
Earlier this month, Dow also declared a quarterly dividend of $0.15 per share. The dividend will be payable on January 28, 2011, to shareholders of record on December 31, 2010.
The Dow Chemical stock has a 52-week range of $22.42-$34.50. Year-to-date, the stock is up 23.34%.
Agrium Inc. (NYSE: AGU) is a Calgary, Canada-based retailer of agricultural products and services in the U.S., Argentina, Chile and Uruguay. The company is also engaged in the worldwide production and wholesale marketing of nutrients for agricultural and industrial markets.
Earlier this month, Agrium announced that it successfully completed its acquisition of AWB Limited at a price of $1.50 per share in cash.
The Agrium stock has a 52-week range of $47.96-$89.69. Year-to-date, the stock is up 39.27%.
Friday, February 4, 2011
CARBO Ceramics Inc. (CRR): Zacks Rank Buy
CARBO Ceramics Inc. (NYSE: CRR - News) remains one hot company as it wrapped up the best year in the company's history in 2010. This Zacks #1 Rank (strong buy) recently surprised on the Zacks Consensus Estimate for the 4th quarter in a row which sent shares soaring to new highs.
CARBO is the world's largest supplier of ceramic proppant for fracturing oil and gas wells. With natural gas prices in the dumps, its customers have been moving towards oily, liquid-rich plays especially in the major shale areas in North America.
Revenue Jumped 33% in the Fourth Quarter
On Jan 27, CARBO reported its fourth quarter results and blew by the Zacks Consensus Estimate by 17%. Earnings per share were 91 cents compared to the consensus of 78 cents.
Revenue climbed $29.5 million to $119.6 million. Proppant sales volume rose 20% to 332 million pounds. Breaking it down by geographic segment, proppant sales volume rose 17% in North America (excluding Mexico) and 37% in the international segment compared to the fourth quarter of 2009.
'Exiting the third quarter, we witnessed continued momentum in proppant sales,' said President and CEO Gary Kolstad.
'The up tick in horizontal fracturing in oil bearing reservoirs, coupled with our traditionally strong footprint in gas driven plays, caused sales volume resilience in a quarter that historically shows seasonal weakness,' he added.
The company started operations on the third 250 pound production line at the Toomsboro, Georgia facility. It will be completing that line and completing the fourth line by the end of 2011.
The Outlook for 2011 Looks Bright
The company is bullish about 2011 as industry activity levels remain high even though natural gas prices are low. CARBO continues to see a shift in activity to oily, liquid-rich plays which is where its proppant comes into play.
It is ramping up production at several of its facilities. CARBO started site preparation for a second resin coating line at its New Iberia facility which will increase resin coating capacity to 400 million pounds annually from the current capacity of 100 million.
Zacks Consensus Estimates Move Higher
Not surprisingly given the solid quarter, Zacks Consensus Estimates have moved sharply higher since the earnings announcement.
The 2011 Zacks Consensus Estimate jumped 14 cents to $4.20 per share. That is earnings growth of 22.5% compared to 2010, which was already a record year.
The party is expected to continue into 2012 with the Zacks Consensus rising to $5.33 from $4.96 in the last week, as 4 estimates moved higher and 1 lower in that time.
That is another 27% earnings growth.
Valuations In Line With Peers
CARBO is not a cheap stock. It is trading at 27x forward estimates which is much more expensive than the S&P 500 at 14x.
However, its peers are also trading at 27x so it is in line with their valuations.
Shares At 10-Year Highs
Shares have been in a strong rally for the last 2 years and the recent earnings results have pushed shares to yet another 10 year high.
This Week's Momentum Zacks Rank Buy Stocks
CF Industries Holdings, Inc. (NYSE: CF - News) continues to trade strong, recently hitting a new multi-year high at $149.65 as agriculture prices remain in elevated territory. With a bullish growth projection and discounted valuation, this Zacks #1 rank stock is a solid momentum player. Read the full article.
Holly Corporation (NYSE: HOC - News) jumped to a Zacks #1 Rank (Strong Buy) thanks to an influx of upward estimate revisions. The outlook for HOC has been steadily improving, as has the share price. Read the full article.
With millions of smartphones and tablets expected to be sold in 2011, wireless technology is hot. InterDigital, Inc. (NasdaqGS: IDCC - News) expects to report a strong fourth quarter on Feb 23. Shares of this Zacks #1 Rank (strong buy) have soared in the last 6 months. Read the full article.
CARBO is the world's largest supplier of ceramic proppant for fracturing oil and gas wells. With natural gas prices in the dumps, its customers have been moving towards oily, liquid-rich plays especially in the major shale areas in North America.
Revenue Jumped 33% in the Fourth Quarter
On Jan 27, CARBO reported its fourth quarter results and blew by the Zacks Consensus Estimate by 17%. Earnings per share were 91 cents compared to the consensus of 78 cents.
Revenue climbed $29.5 million to $119.6 million. Proppant sales volume rose 20% to 332 million pounds. Breaking it down by geographic segment, proppant sales volume rose 17% in North America (excluding Mexico) and 37% in the international segment compared to the fourth quarter of 2009.
'Exiting the third quarter, we witnessed continued momentum in proppant sales,' said President and CEO Gary Kolstad.
'The up tick in horizontal fracturing in oil bearing reservoirs, coupled with our traditionally strong footprint in gas driven plays, caused sales volume resilience in a quarter that historically shows seasonal weakness,' he added.
The company started operations on the third 250 pound production line at the Toomsboro, Georgia facility. It will be completing that line and completing the fourth line by the end of 2011.
The Outlook for 2011 Looks Bright
The company is bullish about 2011 as industry activity levels remain high even though natural gas prices are low. CARBO continues to see a shift in activity to oily, liquid-rich plays which is where its proppant comes into play.
It is ramping up production at several of its facilities. CARBO started site preparation for a second resin coating line at its New Iberia facility which will increase resin coating capacity to 400 million pounds annually from the current capacity of 100 million.
Zacks Consensus Estimates Move Higher
Not surprisingly given the solid quarter, Zacks Consensus Estimates have moved sharply higher since the earnings announcement.
The 2011 Zacks Consensus Estimate jumped 14 cents to $4.20 per share. That is earnings growth of 22.5% compared to 2010, which was already a record year.
The party is expected to continue into 2012 with the Zacks Consensus rising to $5.33 from $4.96 in the last week, as 4 estimates moved higher and 1 lower in that time.
That is another 27% earnings growth.
Valuations In Line With Peers
CARBO is not a cheap stock. It is trading at 27x forward estimates which is much more expensive than the S&P 500 at 14x.
However, its peers are also trading at 27x so it is in line with their valuations.
Shares At 10-Year Highs
Shares have been in a strong rally for the last 2 years and the recent earnings results have pushed shares to yet another 10 year high.
This Week's Momentum Zacks Rank Buy Stocks
CF Industries Holdings, Inc. (NYSE: CF - News) continues to trade strong, recently hitting a new multi-year high at $149.65 as agriculture prices remain in elevated territory. With a bullish growth projection and discounted valuation, this Zacks #1 rank stock is a solid momentum player. Read the full article.
Holly Corporation (NYSE: HOC - News) jumped to a Zacks #1 Rank (Strong Buy) thanks to an influx of upward estimate revisions. The outlook for HOC has been steadily improving, as has the share price. Read the full article.
With millions of smartphones and tablets expected to be sold in 2011, wireless technology is hot. InterDigital, Inc. (NasdaqGS: IDCC - News) expects to report a strong fourth quarter on Feb 23. Shares of this Zacks #1 Rank (strong buy) have soared in the last 6 months. Read the full article.
Caterpillar Has Stellar 2010
Caterpillar Inc. (NYSE: CAT - News) ended fiscal 2010 on a promising note coming off a very challenging 2009. The company’s fourth quarter adjusted EPS increased almost four fold to $1.47 and fiscal 2010 adjusted EPS almost doubled to $4.15 from the prior-year comparable periods.
The upbeat results were augured by ever-increasing demand for mining and construction equipment that drove sales.
Both the fourth quarter and fiscal year EPS outperformed the respective Zacks Consensus Estimates of $1.27 and $4.01. Caterpillar also whizzed past its guided range of $3.80 to $4.00 for fiscal 2010.
The adjusted EPS for both the prior-year comparable periods excluded redundancy costs. Including redundancy costs, fourth quarter fiscal 2010 EPS was quadrupled from 36 cents reported in the year-ago quarter while fiscal 2010 EPS was almost three times the $1.43 reported in the prior year.
Revenues in the quarter were $12.8 billion, a 62% jump from $7.9 billion in the year-ago period and well above the Zacks Consensus Estimate of $11.4 billion. Region wise, North America led the pack with a growth of 78%, followed by Latin America, Asia-Pacific and EAME markets posting impressive growth rates of 59%, 55% and 49%, respectively.
For fiscal 2010, revenues upped 31% year over year to $42.6 billion, outperforming the Zacks Consensus Estimate of $40 billion by a good margin. The reported revenue was also higher than the company’s guided revenue range of $41 million to $42 billion.
For the full year, Latin America led the results with a 58% climb, followed by Asia Pacific, North America, and EAME markets increasing 43%, 30% and 13%, respectively.
Cost of goods sold increased 60% year over year to $9.3 billion in the quarter but, as a percentage of revenue, declined 110 basis points to 73%. Selling, general and administrative (SG&A) expenses increased 18% to $1,109 million in the quarter and, as a percentage of revenues, improved 320 basis points to 8.7%.
Consequently, gross margin increased 110 basis points to 27% and operating margin expanded 850 basis points to 10.1% in the quarter.
Segment Performance
Machinery sales surged 88% to $8.6 billion in the quarter due to higher end-user demand and the absence of dealer inventory reductions seen in 2009. The segment posted an operating profit of $705 million in stark contrast to a loss of $123 million in the year-ago quarter.
Higher sales volume, which included the impact of an unfavorable mix of products, and improved price realization were partially offset by higher SG&A, research and development (R&D) expenses and manufacturing costs.
Engines sales increased 36% to $3.57 billion primarily driven by higher sales of engines for electric power, petroleum and industrial applications. Increased price realization was offset by a negative currency translation impact. The segment’s operating profit increased a whopping 123% year over year to $539 million.
Increased sales volume, which included the impact of an unfavorable mix of products, and improved price realization were partially offset by higher SG&A and R&D expenses.
Financial Products revenues dipped 6% to $666 million due to lower average earning assets. The segment’s operating profit went up 62% to $102 million.
The increase was driven by a $26 million decrease in the provision for credit losses at Cat Financial, a $23 million favorable change from returned or repossessed equipment and a $13 million favorable impact due to lower claims experienced at Cat Insurance, partially offset by a $14 million unfavorable impact from lower average earning assets and $11 million due to incentive pay.
Financial Position
Caterpillar had cash and cash equivalents of $3.59 billion on the balance sheet as of December 31, 2010, up from $2.3 billion as of September 30, 2010. The company generated net cash from operating activities of $5 billion from operating activities in fiscal 2010 compared with $6.5 billion in the prior year.
Machinery and Engines’ debt-to-capital ratio improved to 34.8% as of December 31, 2010compared with 39.1% as of September 30, 2010 and 47.2% as of December 31, 2009.
Looking to 2011
Caterpillar expects its sales to cross the $50 billion mark in fiscal 2011. This translates into a 17% year-over-year growth from sales of $42.6 billion recorded in fiscal 2010. Developing countries are expected to maintain their growth trajectory along with improving economies in North America and Europe.
Strong demand for mining products and the need for dealers to add to inventories and replenish rental fleet are expected to be accretive to 2011 sales. The company however admitted that these increases might be marred by small declines in later cycle industries, such as turbines and marine engines.
The company expects the world economy to grow more than 3.5% in 2010 driven by a growth of 6.5% from developing economies. The Asia-Pacific economy should grow 7.5% in 2011. Caterpillar forecasts a growth of 4.5% in Latin America and more than 5% growth in Africa/Middle East, and the CIS in 2011. The U.S economy is expected to grow about 3.5% in 2011 and Europe to post a 2% growth.
Earnings per share are expected to be near $6.00, suggesting 45% year-over-year growth from the 2010 figure of $4.15. The EPS growth is expected to be driven by higher sales volume, improvement in price realization, comparatively flat material costs, somewhat offset by unfavorable product mix, higher manufacturing costs, SG&A and R&D expense, higher taxes and bridge financing costs associated with the Bucyrus acquisition.
If Caterpillar accomplishes this lofty target, 2011 will be a milestone year for the company with the highest EPS in its history, topping the prior record of $5.66 set in 2008.
During the year, Caterpillar made a number of announcements to enhance its capacity for key products like mining trucks and excavators, which include three new facilities in the United States and significantly five outside the United States. Caterpillar plans to expend about $3 billion in capital expenditures, with more than half earmarked to be spent in the United States.
During 2010 Caterpillar announced three significant acquisitions — Electro-Motive Diesel Inc, Motoren-Werke Mannheim Holding GmbH and Bucyrus International Inc. (NasdaqGS: BUCY - News). The 2011 guidance includes the impact of the Electro-Motive Diesel Inc. deal but excludes the acquisitions of the other two as these are yet to close.
Our Take
Caterpillar’s strong brand name, pricing power and global dealer network put it in a vantage position to capitalize on the growing need for infrastructure development worldwide. We believe Caterpillar’s expansion plans of opening new facilities and furthering existing operations, particularly in emerging markets, will boost its long-term potential. Furthermore, its biggest acquisition to date, Bucyrus, will not only enhance its product line and increase its presence in the emerging markets, but also strengthen its position as the #1 mining equipment manufacturer in the U.S.
We currently have a Zacks #2 Rank (short-term Buy recommendation) on the stock.
Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base. The company operates three divisions – Machines, Engines and Financial Products. Caterpillar competes with CNH Global NV (NYSE: CNH - News), Komatsu Ltd. (Other OTC: KMTUF.PK - News) and Volvo AB (Other OTC: VOLVY.PK - News) but is way ahead of its peers.
The upbeat results were augured by ever-increasing demand for mining and construction equipment that drove sales.
Both the fourth quarter and fiscal year EPS outperformed the respective Zacks Consensus Estimates of $1.27 and $4.01. Caterpillar also whizzed past its guided range of $3.80 to $4.00 for fiscal 2010.
The adjusted EPS for both the prior-year comparable periods excluded redundancy costs. Including redundancy costs, fourth quarter fiscal 2010 EPS was quadrupled from 36 cents reported in the year-ago quarter while fiscal 2010 EPS was almost three times the $1.43 reported in the prior year.
Revenues in the quarter were $12.8 billion, a 62% jump from $7.9 billion in the year-ago period and well above the Zacks Consensus Estimate of $11.4 billion. Region wise, North America led the pack with a growth of 78%, followed by Latin America, Asia-Pacific and EAME markets posting impressive growth rates of 59%, 55% and 49%, respectively.
For fiscal 2010, revenues upped 31% year over year to $42.6 billion, outperforming the Zacks Consensus Estimate of $40 billion by a good margin. The reported revenue was also higher than the company’s guided revenue range of $41 million to $42 billion.
For the full year, Latin America led the results with a 58% climb, followed by Asia Pacific, North America, and EAME markets increasing 43%, 30% and 13%, respectively.
Cost of goods sold increased 60% year over year to $9.3 billion in the quarter but, as a percentage of revenue, declined 110 basis points to 73%. Selling, general and administrative (SG&A) expenses increased 18% to $1,109 million in the quarter and, as a percentage of revenues, improved 320 basis points to 8.7%.
Consequently, gross margin increased 110 basis points to 27% and operating margin expanded 850 basis points to 10.1% in the quarter.
Segment Performance
Machinery sales surged 88% to $8.6 billion in the quarter due to higher end-user demand and the absence of dealer inventory reductions seen in 2009. The segment posted an operating profit of $705 million in stark contrast to a loss of $123 million in the year-ago quarter.
Higher sales volume, which included the impact of an unfavorable mix of products, and improved price realization were partially offset by higher SG&A, research and development (R&D) expenses and manufacturing costs.
Engines sales increased 36% to $3.57 billion primarily driven by higher sales of engines for electric power, petroleum and industrial applications. Increased price realization was offset by a negative currency translation impact. The segment’s operating profit increased a whopping 123% year over year to $539 million.
Increased sales volume, which included the impact of an unfavorable mix of products, and improved price realization were partially offset by higher SG&A and R&D expenses.
Financial Products revenues dipped 6% to $666 million due to lower average earning assets. The segment’s operating profit went up 62% to $102 million.
The increase was driven by a $26 million decrease in the provision for credit losses at Cat Financial, a $23 million favorable change from returned or repossessed equipment and a $13 million favorable impact due to lower claims experienced at Cat Insurance, partially offset by a $14 million unfavorable impact from lower average earning assets and $11 million due to incentive pay.
Financial Position
Caterpillar had cash and cash equivalents of $3.59 billion on the balance sheet as of December 31, 2010, up from $2.3 billion as of September 30, 2010. The company generated net cash from operating activities of $5 billion from operating activities in fiscal 2010 compared with $6.5 billion in the prior year.
Machinery and Engines’ debt-to-capital ratio improved to 34.8% as of December 31, 2010compared with 39.1% as of September 30, 2010 and 47.2% as of December 31, 2009.
Looking to 2011
Caterpillar expects its sales to cross the $50 billion mark in fiscal 2011. This translates into a 17% year-over-year growth from sales of $42.6 billion recorded in fiscal 2010. Developing countries are expected to maintain their growth trajectory along with improving economies in North America and Europe.
Strong demand for mining products and the need for dealers to add to inventories and replenish rental fleet are expected to be accretive to 2011 sales. The company however admitted that these increases might be marred by small declines in later cycle industries, such as turbines and marine engines.
The company expects the world economy to grow more than 3.5% in 2010 driven by a growth of 6.5% from developing economies. The Asia-Pacific economy should grow 7.5% in 2011. Caterpillar forecasts a growth of 4.5% in Latin America and more than 5% growth in Africa/Middle East, and the CIS in 2011. The U.S economy is expected to grow about 3.5% in 2011 and Europe to post a 2% growth.
Earnings per share are expected to be near $6.00, suggesting 45% year-over-year growth from the 2010 figure of $4.15. The EPS growth is expected to be driven by higher sales volume, improvement in price realization, comparatively flat material costs, somewhat offset by unfavorable product mix, higher manufacturing costs, SG&A and R&D expense, higher taxes and bridge financing costs associated with the Bucyrus acquisition.
If Caterpillar accomplishes this lofty target, 2011 will be a milestone year for the company with the highest EPS in its history, topping the prior record of $5.66 set in 2008.
During the year, Caterpillar made a number of announcements to enhance its capacity for key products like mining trucks and excavators, which include three new facilities in the United States and significantly five outside the United States. Caterpillar plans to expend about $3 billion in capital expenditures, with more than half earmarked to be spent in the United States.
During 2010 Caterpillar announced three significant acquisitions — Electro-Motive Diesel Inc, Motoren-Werke Mannheim Holding GmbH and Bucyrus International Inc. (NasdaqGS: BUCY - News). The 2011 guidance includes the impact of the Electro-Motive Diesel Inc. deal but excludes the acquisitions of the other two as these are yet to close.
Our Take
Caterpillar’s strong brand name, pricing power and global dealer network put it in a vantage position to capitalize on the growing need for infrastructure development worldwide. We believe Caterpillar’s expansion plans of opening new facilities and furthering existing operations, particularly in emerging markets, will boost its long-term potential. Furthermore, its biggest acquisition to date, Bucyrus, will not only enhance its product line and increase its presence in the emerging markets, but also strengthen its position as the #1 mining equipment manufacturer in the U.S.
We currently have a Zacks #2 Rank (short-term Buy recommendation) on the stock.
Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base. The company operates three divisions – Machines, Engines and Financial Products. Caterpillar competes with CNH Global NV (NYSE: CNH - News), Komatsu Ltd. (Other OTC: KMTUF.PK - News) and Volvo AB (Other OTC: VOLVY.PK - News) but is way ahead of its peers.
Tuesday, December 1, 2009
Better Buy: Caterpillar or Deere ?
Today's matchup is Caterpillar (NYSE: CAT) vs. Deere (NYSE: DE). Using five short-of-scientific-but-carefully chosen criteria, let's determine which is the better buy according to the numbers:
Round 1: Cheapness
Advantage: Deere. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).
Round 2: Growth
Advantage: Deere. Growth here is the trailing 5-year EPS growth rate. This trailing earnings growth helps put notoriously optimistic Wall Street projections in perspective.
Round 3: Operations
Advantage: Deere. Net margins shows the percentage of revenue that hits the bottom line. The more similar the business models, the more relevant the comparison.
Round 4: Balance sheet
Advantage: Deere. As with net margins, the debt-to-capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).
Round 5: CAPS rating
Advantage: Deere. A company’s CAPS rating is our community’s opinion of the stock. Deere has a slightly greater numerical CAPS rating than Caterpillar (even though they have the same number of stars). You can get more information on your stocks -- and our community’s opinions of those stocks -- by clicking over to CAPS.
Each of these five rankings need more context -- like, how these companies stack up against key competitors such as CNH Global (NYSE: CNH) and Illinois Tool Works (NYSE: ITW). But these basic numbers suggest that Deere is a better buy. What do you think? Let us know in the comments section below.
Round 1: Cheapness
Advantage: Deere. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).
Round 2: Growth
Advantage: Deere. Growth here is the trailing 5-year EPS growth rate. This trailing earnings growth helps put notoriously optimistic Wall Street projections in perspective.
Round 3: Operations
Advantage: Deere. Net margins shows the percentage of revenue that hits the bottom line. The more similar the business models, the more relevant the comparison.
Round 4: Balance sheet
Advantage: Deere. As with net margins, the debt-to-capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).
Round 5: CAPS rating
Advantage: Deere. A company’s CAPS rating is our community’s opinion of the stock. Deere has a slightly greater numerical CAPS rating than Caterpillar (even though they have the same number of stars). You can get more information on your stocks -- and our community’s opinions of those stocks -- by clicking over to CAPS.
Each of these five rankings need more context -- like, how these companies stack up against key competitors such as CNH Global (NYSE: CNH) and Illinois Tool Works (NYSE: ITW). But these basic numbers suggest that Deere is a better buy. What do you think? Let us know in the comments section below.
Top Takes from Real Money
The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.
TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial. 1. Markets Today
By Marc Chandler
7:52 a.m. EST
Global equity markets are higher as concerns about Dubai World continue to recede after Dubai indicated the loan package being negotiated will be about half the size ($26 billion) originally expected. That and the softer yen helped boost the Nikkei 2.4% and bring total gains since Friday's Dubai-induced drop to 5.4%.
Elsewhere, consumer and technology shares led China, Hong Kong and South Korean bourses higher. European bourses are up, with PMI manufacturing data helping boost industrials, which together with financials are lifting the DAX and CAC by about 2% in morning trading.
The FTSE 100 is up 1.7% helped by basic materials and financials while early indications suggest U.S. markets will open higher. Today's developments have not helped UAE equity markets, which are still down, falling 3.6% to 6.4% today.
No positions.
--------------------------------------------------------------------------------
2. Potash Price Target Increased
9:54 a.m. EST
Fertilizer stocks are sharply higher today on a price upgrade for Potash (POT Quote). I've been bullish on fertilizer for over a year now as the economics of the businesses look very compelling going forward: You can defer but you cannot avoid fertilizer application. After loading up a couple of years ago, farmers are nearing inventory depletion, which means they will buy at market prices. Second, more people plus less arable land equals more fertilizer needed to feed them. And the best part is that names like POT, Mosaic (MOS Quote), Agrium (AGU Quote) and CF Industries (CF Quote) are quality blue-chip-type companies that are quite cheap on a forward-looking basis.
3. Gold
By Timothy Collins
12:12 p.m. EST I'm taking a small position in the December 119 puts on the SPDR Gold Trust (GLD Quote) for $3.25 or better. GLD has become very extended from its 20- and 50-day moving averages, and I don't expect gold to plummet, but I suspect a short-term pullback from this $1,200 level may happen. I wouldn't expect GLD to go below $112.50, but that area is my target for a pullback.
Short GLD via puts.
TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today. To see all that RealMoney offers, click here for a free trial. 1. Markets Today
By Marc Chandler
7:52 a.m. EST
Global equity markets are higher as concerns about Dubai World continue to recede after Dubai indicated the loan package being negotiated will be about half the size ($26 billion) originally expected. That and the softer yen helped boost the Nikkei 2.4% and bring total gains since Friday's Dubai-induced drop to 5.4%.
Elsewhere, consumer and technology shares led China, Hong Kong and South Korean bourses higher. European bourses are up, with PMI manufacturing data helping boost industrials, which together with financials are lifting the DAX and CAC by about 2% in morning trading.
The FTSE 100 is up 1.7% helped by basic materials and financials while early indications suggest U.S. markets will open higher. Today's developments have not helped UAE equity markets, which are still down, falling 3.6% to 6.4% today.
No positions.
--------------------------------------------------------------------------------
2. Potash Price Target Increased
9:54 a.m. EST
Fertilizer stocks are sharply higher today on a price upgrade for Potash (POT Quote). I've been bullish on fertilizer for over a year now as the economics of the businesses look very compelling going forward: You can defer but you cannot avoid fertilizer application. After loading up a couple of years ago, farmers are nearing inventory depletion, which means they will buy at market prices. Second, more people plus less arable land equals more fertilizer needed to feed them. And the best part is that names like POT, Mosaic (MOS Quote), Agrium (AGU Quote) and CF Industries (CF Quote) are quality blue-chip-type companies that are quite cheap on a forward-looking basis.
3. Gold
By Timothy Collins
12:12 p.m. EST I'm taking a small position in the December 119 puts on the SPDR Gold Trust (GLD Quote) for $3.25 or better. GLD has become very extended from its 20- and 50-day moving averages, and I don't expect gold to plummet, but I suspect a short-term pullback from this $1,200 level may happen. I wouldn't expect GLD to go below $112.50, but that area is my target for a pullback.
Short GLD via puts.
Fertilizer War Rages: CF, Terra, Agrium
NEW YORK (TheStreet) -- CF Industries(CF Quote) said Tuesday that its investment bank, Morgan Stanley(MS Quote), will extend the deadline on its acquisition financing to Dec. 31, as the fertilizer maker continues to pursue its hostile takeover bid for rival Terra Industries(TRA Quote).
The extension on the funding, previously set to expire Nov. 30, was expected. Deerfield, Ill.-based CF, which successfully pushed three sympathetic directors onto Terra's board last month, has faced a defiant Terra. For its part, Terra, of Sioux City, Iowa, has refused to negotiate with its suitor, at least until CF brings a better price to the table. The Morgan Stanley financing comprises a $2.5 billion loan, which would cover more than 78% of the cash portion of CF's current offer. The bid calls for CF to pay $32 in cash and 0.1034 CF shares for each of the 99.83 million Terra shares outstanding.
CF continued in its attempt to apply pressure to Terra, saying in the press release announcing the extension that "it does not have any right to extend the financing commitments beyond December 31 unless a merger agreement with Terra is signed by that date."
Also in the press release, CF's chief executive, Stephen Wilson, said the vote at Terra's annual meeting signaled that its shareholders "want a sale of Terra in the near term and that the price we have offered forms the basis for final negotiations." He went on, "This has been confirmed to us in recent conversations with Terra stockholders. We are committed to moving forward with the acquisition of Terra."
The extension on the funding, previously set to expire Nov. 30, was expected. Deerfield, Ill.-based CF, which successfully pushed three sympathetic directors onto Terra's board last month, has faced a defiant Terra. For its part, Terra, of Sioux City, Iowa, has refused to negotiate with its suitor, at least until CF brings a better price to the table. The Morgan Stanley financing comprises a $2.5 billion loan, which would cover more than 78% of the cash portion of CF's current offer. The bid calls for CF to pay $32 in cash and 0.1034 CF shares for each of the 99.83 million Terra shares outstanding.
CF continued in its attempt to apply pressure to Terra, saying in the press release announcing the extension that "it does not have any right to extend the financing commitments beyond December 31 unless a merger agreement with Terra is signed by that date."
Also in the press release, CF's chief executive, Stephen Wilson, said the vote at Terra's annual meeting signaled that its shareholders "want a sale of Terra in the near term and that the price we have offered forms the basis for final negotiations." He went on, "This has been confirmed to us in recent conversations with Terra stockholders. We are committed to moving forward with the acquisition of Terra."
Materials Stocks Moving the Markets Higher
International Paper, Newmont Mining, Allegheny Technologies and U.S. Steel are clustered at the top of the S&P materials sector which is leading the broader markets higher after the open. The entire sector is up 1.3% versus 0.9% for the S&P 500 as a whole. The materials universe seems to be benefiting a bit from a bit of weakness in the U.S. greenback.
Subscribe to:
Posts (Atom)
