Research Takeaways, Week of July 18, 2011

Special Feature: The Obama Administration’s Assault on Freedom, Jobs, the Constitution, Capitalism, Business, Christians & Jews

Home Depot Co-Founder Blasts Obama: Even ‘Brain-Dead Economists’ Get It, July 22, 2011

“IBD: Why don’t more businesses speak out?

Marcus: They are frightened to death — frightened that they will have the IRS or SEC on them. In my 50 years in business, I have never seen executives of major companies who were more intimidated by an administration.”

Radical Roots of Obama’s Debt-Ceiling Crisis, July 18, 2011

“Obama’s radicalism lies not in a blindness to the danger of driving over the cliff of economic catastrophe. His radicalism lies in welcoming that catastrophe.” — Tom Tancredo

Wynn CEO Goes On Epic Anti-Obama Rant on Company Conference Call —, July 18, 2011

Morgan Stanley raised its price target and earnings estimates on Wynn Resorts (WYNN, $163.63) this morning (07/19/11). Maybe they realized that Tea Partiers will now be inclined to patronize Steve Wynn’s casinos now that Wynn was brave enough to be vocal about Obama. I wouldn’t buy at this price, as it revisits the 2007 highs, but I’d buy around $130. — Crista Huff

Obama’s Proposal: Increase Debt Extra $26B This Year, $83B Next Year, $2.7T Over, July 16, 2011

Obama Signs Agenda 21-Related Executive Order, June 22, 2011

* * * * *

Agricultural Chemicals

“India’s second tender in two weeks ended the recent nitrogen price correction.” — Morgan Stanley Research, July 18, 2011

Autos and Auto-Related Stocks

“We believe that the industry should have a decent 2Q result vs. hesitant expectations but the uncertain macroeconomic environment (jobless claims, sovereign credit) will likely compromise even the most confident 2H guidance. However, we are more positive than the market about a 2H recovery, which recently drove us to upgrade our industry view to Attractive. We prefer the OEMs, secular suppliers and tires over the cyclical suppliers and dealers stocks (in that order).” — Morgan Stanley Research, July 2011

Bank Stocks: M&T Bank (MTB) M&T Bank 2Q Profit Rose 71% on Improving Credit Quality, July 20, 2011

Crop Report: “Our index of crop condition dropped to 3.67, its lowest level since the end of May and down from 3.74 last week. 11% of the US corn crop is now rated “poor” or “very poor” by the USDA (versus 9% last week). Similarly, the soybean crop condition declined this week from 3.7 to 3.64, its lowest level of 2011 and down from 3.70 last week (with 10% of the crop now rated “poor”or “very poor” versus 8% last week).” — Morgan Stanley Research, July 22 2011

Food Stocks: Safeway (SWY) “SWY reported disappointing 2Q results, with both volumes and margins adversely impacted by inflation. As this is the first grocer to call out an inflation impact in 2011, this reinforces our volume and margin risk thesis we laid out for the grocery group in January. Given 2%+ inflation during the quarter, Safeway’s 0.5% ID sales growth implies volume growth decelerated from -0.5% in 1Q to-1.6% in 2Q. As we see food inflation building to 4-5% in 2H, we remain concerned that volume declines could get worse and ID sales growth could stay muted (below 1%). With negative volume growth in 6 of the last 7 quarters, if market share losses persist, Safeway may have to sharpen its pricing (posing margin risk). We remain Underweight on SWY shares.” — Morgan Stanley Research, July 22, 2011

Mid-Cap Bank Stocks

“During the first week of midcap bank earnings, the banks sold off sharply, but we believe it was due much more to macro factors rather than results. In fact, three of the four midcap banks that reported have beat expectations (the fourth was in line).” — Morgan Stanley Research, July 18, 2011

Technology Stocks

Apple (AAPL): “Key catalysts over the next six months include: 1) launch of Mac OS X Lion; 2) launch of iCloud (Fall 2011); 3) new iPhone with possible price cuts on older versions in September; 4)new iPad launch with possible price cut this Fall; and 5) improving component costs and manufacturing yields which put upward pressure on margins or at the very least offset the negative impact from revenue deferrals and lower iPhone/iPad prices.” — Morgan Stanley Research, July 20, 2011

Apple Shares Jump After Record, July 20, 2011

Microsoft (MSFT): MSFT appears to be stepping up licensing agreements related to its Android-based patents, announcing four deals in the past three weeks after an agreement with HTC last year.” — Morgan Stanley Research, July 18, 2011

Telecom Stocks: AT&T (T) “Results were in-line to better than expected in both wireline and wireless, yet the stock was a relative underperformer, underscoring how headline T-Mo news continues to drive performance. …  Although we understand that slower T-Mobile leasing activity in 2Q may represent a temporary drag on volumes, Verizon (VZ) and AT&T (T) should continue to represent a sustained source of growth.” — Morgan Stanley Research, July 22, 2011

Tobacco Stocks: Philip Morris International (PM)

“Added Japan Volume Could Add Another $0.06 to 2Q EPS” — Morgan Stanley Research, July 18, 2011

U.S. Debt: Weiss Ratings Downgrades United States Debt to, July 15, 2011

U.S. Equity Strategy: “Nearly 30% of S&P 500’s market capitalization has reported Q2 earnings, and the results have been generally positive. Reported earnings have outpaced consensus estimates by 3.8%, and only 7% have reported below consensus earnings. Similarly, reported revenues are beating the consensus by 3.0%. Earnings and revenue misses have been minimal thus far, but the market is punishing these misses more than it is rewarding beats—an asymmetry we have been calling for and we forecast will continue.” — Morgan Stanley Research, July 22, 2011

* * * *

Investment Disclaimer

Release of Liability: Through use of this website viewing or using you agree to hold and its employees harmless and to completely release and its employees from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur.

Goodfellow LLC and its employees are not paid by third parties to promote nor disparage any investment. Recommendations are based on hypothetical situations of what we would do, not advice on what you should do.

Neither Goodfellow LLC nor its employees are licensed investment advisors, tax advisors, nor attorneys. Consult with a licensed investment advisor and a tax advisor to determine the suitability of any investment.

The information provided herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. When information is provided herein from third parties — such as financial news outlets, financial websites, investment firms, or any other source of financial information – the reliability or completeness of such financial information cannot be guaranteed.

The information contained on this website is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. This is not an offer or solicitation for any particular trading strategy, or confirmation of any transaction. Statements made on the website are based on the authors’ opinions and based on information available at the time this page was published. The creators are not liable for any errors, omissions or misstatements. Any performance data quoted represents past performance and past performance is not a guarantee of future results. Investments always have a degree of risk, including the potential risk of the loss of the investor’s entire principal. There is no guarantee against any loss.

* * * *

Goodfellow LLC is a subscription-only stock market website. We strive to identify financially healthy companies in which traders and investors can buy shares and earn dividends and capital gains. See disclaimer for the risks associated with investing in the stock market. See your tax advisor for the tax consequences of investing. See your estate planning attorney to clarify beneficiary and inheritance issues associated with your assets.


Leave a Reply

Your email address will not be published. Required fields are marked *