Posts Tagged ‘cnbc’
What is the Future of Hewett-Packard (HPQ)?
By Jared A Levy
On CNBC Monday, I shared my slightly positive sentiment towards Hewlett-Packard (NYSE:HPQ) stock in the wake of CEO Mark Hurd’s resignation. Granted, HP’s stock nearly doubled while Hurd was at the helm, but I am a firm believer that it was not Hurd and Hurd alone who caused this. The hardworking men and women of the company and the creative minds of the developers, marketing staff, design teams, and management (among many others) most likely played a major role in the firm’s success.
While Hurd was instrumental in several tactical acquisitions and I am sure had a long-term vision for the company to follow, I am also confident this vision has been shared not only with the board, but with other levels of management within the company. Any such vision should now be carried out even in Hurd’s absence. One issue I see with his departure would be the potential for a “too many cooks in the kitchen” type scenario, where everyone’s ideas pull the company in different directions, creating possibly inefficient situations.
Of course the recent deals that HPQ has put together (PALM, 3Com and EDS) are going to require some guidance to make them work, but I have confidence that a brilliant CEO – at a much lower price tag, by the way – should be able to not only integrate, but improve the overall business. HPQ still has momentum and finds its most direct competition from IBM. HP and IBM have been in competition for some time, with HP eclipsing IBM in revenue in 2006 (by $0.3 billion) and growing ever since.
Getting an Edge on Jim Cramer
by Jared Levy on July 6, 2010
For more than a year, I took Mad Money host Jim Cramer’s investing ideas and gave them a thumbs up or thumbs down according my own technical analysis and views. Here at OptionsHouse, it’s not about telling you what to do, but rather offering some strategies for you to explore based on your own individual opinions.
We all have a right to agree or disagree with Cramer and while I have great respect for the man, I can’t say that I am in full agreement with all of his recommendations. Furthermore, as options traders, we can take his thesis and augment it into acceptable risk for our individual personalities and risk tolerances.
Watching my DVR recording of Friday’s program, I actually liked what Cramer had to say about investing after the crash (I think this was taped earlier). He talked about the difference between trading and investing and how today’s market participants perhaps need to be an amalgam of the two. I happen to agree with Cramer’s suggestion that traders learn as much as they can about a company, although even with soup-to-nuts knowledge of a company and its business, you can still find yourself in a losing position. This is due to factors beyond the quality of a company’s product or their ability to sell that product or service to the public. Cramer noted this when he talked about a company’s stock price becoming “un-glued” from its fundamentals.
Earnings, Economic Data, and the Housing Sector: A Fast Money Post-Mortem
by Jared Levy on June 24, 2010
On Wednesday’s episode of Fast Money on CNBC, there were a ton of topics discussed and I wanted to clarify my thoughts and elaborate here (especially for topics I didn’t get to address in full on the air).
With the third-quarter earnings season ahead of us, let’s take a moment to reflect on the second quarter that is wrapping up. During the last reporting period, 480 stocks in the S&P 500 Index had reported as of Tuesday’s close. Out of these, 389 exceeded analysts’ consensus view, with overall net earnings growth of 54.15% year over year. This leaves the S&P index with a trailing price-to-earnings (P/E) ratio of 16.1 and assumes a forward P/E of 13.3, based on analysts’ expectations of $81 in net index earnings by this quarter next year.
While P/E ratios seem to be in a relatively neutral-to-low state looking forward, there are still issues to contend with, namely housing and unemployment.
According to a Fitch report from earlier this month:
- May Residential Mortgage Backed Securities (RMBS) delinquencies declined for the second straight month, following a steady four-year increase; this is a positive.
- For subprime: 44.8%, down from 45.2%
- For Alt-A (borrowers with less than full documentation and lower credit scores) 33.9% percent, down from 34.1%
- They did note, however, that “approximately nine percent of performing Alt-A loans and 37 percent of performing subprime loans are modified and have a substantial risk of re-default.” This is still a negative sign.
This week, we got the following data: