Posts tagged BRLI
The market was up today despite the government lowering their forecast of Q2 GDP to 1.6%, down from the 2.4% they fabricated last month and likely up from the lower number they will make up next month in their “hold the shock and hope for no awe strategy.” Growth in the economy has now slowed to the pace of a 150 year old tortoise with MS and a hella bad case of hemorrhoids. Most of the downward revision was caused by government analysts incorrectly assuming that companies added more inventories than they actually did which wasn’t just a result of analysts being bad at their jobs but also being bad at math.
Inventories were originally reported to have grown by $75.7B, but actually only grew by $63.2B as iPhones and ramen noodles flew off the shelves while Gum Job Grannies stocks were not replenished. Some economists think the lower inventory number is a positive since if the economy grows, businesses will have to add workers to ramp up production, but then again some economists didn’t think we were even going to have a housing bubble (cough Art Laffer cough), while others spend their days eating paste, licking windows, and worshipping at the altar of John Maynard Keynes, so who really cares what they say. Sure, if the economy grows inventories will build, even if they were $15B higher that would happen, so the fact that companies held down inventories either means all of their forecasting models are wrong (possible) or real growth isn’t going to come back anytime soon. The good news Money McBags guesses is that economists guessed that the downward revision would be to 1.4% after they shook their Magic Eight Balls and asked if they’d marry Olivia Munn when they grew up, so GDP beating downwardly revised expectations is a positive.
Having a more positive affect on the market was Ben “Bennie B.” Bernanke taking time out from his schvitz at the annual Fed Symposium and Rodeo to address the economy (and Money McBags is told he addressed the economy with a simple “hello” before inviting it back to his room to jiggle its balance sheet a bit). Bennie B. said that the FOMC “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.” He then said those unconventional measures could include shifting the composition of the Fed’s bond portfolio, reducing the rate the Fed pays on bank reserves, or playing the fiddle on top of Capitol Hill while the economy burns, which wouldn’t fix the economy but would soothe his withered nerves.
Bennie B. also opined that “Central bankers alone cannot solve the world’s economic problems,” using the last four years of policy decisions as his case and point. Finally he said that deflation was not a significant risk and that “preconditions for a pickup of growth in 2011 appear to remain in place.”
Now look, Money McBags doesn’t want to drop a turd in everyone’s punchbowl here (unless it’s Gina Lynn‘s punchbowl and it’s not a turd he is dropping), but what the fuck are “preconditions?” That sounds more like BS gobbeldygook than “misremembering,” not having sexual relations, and “hiking the Appalachian Trail.” You know what? Money Mcbags is exhibiting the preconditions for a threesome with Kate Bosworth and Natalie Portman as he knows their names and knows exactly what will fit where, but that sure as fuck doesn’t mean it will happen (though if it does, Money McBags will keep it quiet for all of those involved, you hear that ladies? It’s the promise of discretion). Anyway, the economy is showing some made up “preconditions” for growth a year from now (until it doesn’t) which is about as reassuring as finding out your doctor got his degree from the University of Phoenix, so rally on, market, rally on.
In stock news, INTC cut their Q3 revenue and gross margin forecast, citing weaker consumer pc demand and “preconditions” for growth not being in their forecasting models. The stock traded up today on that bad news and as a result, the company is rumored to be taking guidance down even more just to keep the rally going. In other stock news, BA said their Dreamliner plane will be delayed by several weeks due to the lack of availability of the Rolls Royce engine it uses and continued air congestion causing it to wait on the runway for a gate to open up. Finally, JCG gave shitacular guidance and dropped 7% on a day when even WGO closed up. The company actually had a nice quarter, handily beating analyst guesses by growing top line by 14%, but they lowered full year guidance from $2.45 per share $2.25 to $2.35 per share and gave Q3 guidance of $.55 to $.60 per share which was below the Street’s $.71 EPS guess and a result of weaker spending trends and some fashion missteps such as lumberjack costumes and scratch and sniff jeggings. And last and most certainly least, Dell and HP continue to up their bids for 3Par in an attempt to show the market just how much they believe growth in their business has slowed.
In small cap news, just about everything was up today because unless you missed the memo (which was stapled to the back of the TPS report), the preconditions for growth are here. CTGX and KITD are bouncing off lows while EBIX continues to show strength until they fire their auditors again for the 4th time. Money McBags wanted to get to more of a deep dive on BRLI today but their 10Q was not out yet and he wanted to go over a few more details. The stock isn’t a home run and obviously could run in to some rough patches with people losing their work insurance, medicare dropping prices, or having collections made harder by no one having any money, but personalized medical testing remains a huge trend and the company continues to put up good numbers. The stock isn’t terribly cheap, but even if the economy double dips Nouriel Roubini’s balls in a recession teabag if you will, people are still going to get sick and doctors are still going to want to run more effective tests to limit their liabilities (or cure people, whichever). So if you have some time this weekend, take a look at BRLI as a longterm investment (and take a look at Catherine McNeil as a dong term assessment, and Money McBags has no idea what that means but it rhymes and it is late Friday afternoon, so it is what it is).
8/26/10 Midevening Report: Market continues to sag as it lost its benefits package and can no longer afford viagra
The market was down again today because it was open and because good news seems less likely than Nouriel Roubini going long FAS or Ron Paul posing as the centerfold for the Fed’s monthly newsletter (we hear his likes would be small government, long walks on the beach, and insanity). Investors anxiously await tomorrow’s latest reading on GDP (Money McBags has the under) and Ben Bernanke’s speech given from the Fed’s annual hoe down and jamboree retreat in Jackson Hole, Wyoming (which is nowhere near as spacious as Nikki Jackson’s hole, but the food is apparently much better). As the economy limps in to Q3 (or whatever is slightly slower than a limp, perhaps a crawl, a drag, or the lines at Amy Winehouse‘s kissing booth), economists (Money McBags would call them witch doctors but that would be an affront to a respectable field like black magic) are lowering their Q2 GDP guesses faster than Tiger Woods can lower his standards, so tomorrow could be one giant clusterfuck of a day.
The big news of the day was that new claims for unemployment fell by 31k to 473k, (or by only 27k if you use the non-upwardly revised 500k number that was reported last week, but why let details get in the way, like history text books in Texas). Either way Money Mcbags is sure it must be all lobster tails and blow jobs at the Fed retreat as this number beat analyst guesses of 490k and now fewer than half of a million people are newly unemployed (unless one rounds up, but rounding up is so archaic, like Wilford Brimley‘s prostate). So woo fucking hoo all the way around. That said, the number of people getting extended unemployment was up 302k to 5.84MM and the total number of people receiving unemployment checks is now ~10.3MM people which is more than the entire populations of Hungary, Bolivia, or Paris Hilton‘s pants. With the jobs situation continuing to deteriorate like Alan Greenspan’s reputation, the economy seems to be about as healthy as Ted Kennedy’s liver (and not because he was an alcoholic, but because he’s dead) and it’s not clear that the Fed has any more tricks up their sleeve to artificially postpone the downturn again.
Internationally, European markets got a bit of a scare when a Spanish court ruled that some tax revenue would not be able to be collected due to a flaw in the collections procedure (apparently tax collectors are not allowed to literally bend tax payers over while collecting their tithe). The union of tax collectors estimated that this could cause a loss of 5.1B Euros in revenue for the government and thus would severely hinder their ability to both cut the deficit and take Esther Canadas on a romantic holiday in the Balearic Islands while providing her with all the Spanish omelets she desires. The government responded by telling the union to shut the fuck and go back to sleeping during the work week as the number is not 5.1B euro and they’ll just refile anyway and collect any missed taxes later on. Also internationally, the GfK research institute in Germany said its forward-looking indicator for consumer confidence was up to 4.1 points from 4 points in August which gives the rest of the continent hope that a strong Germany can pull them out of this recession while also giving them all douche chills at the thought of a strong Germany (and Money McBags compares a strong Germany to a Hall and Oates reunion, he didn’t really like their work the first time around and sure as fuck doesn’t want it to happen again).
In the market, Dell and HP continue to up their bids for storage product supplier 3Par in a way to ensure that one of them will figuratively be able to offer their customers more places to properly store all of the junk in their trunks. This of course is coming at the same time that former HP CEO Mark Hurd is giving a big fuck you to the company by selling $30MM worth of stock. Now look, Money McBags is no Warren Buffett (and not just because he wasn’t dating and married at the same time for like 25 years, but also because he’s worth a smidge less than $1B), but when an outgoing CEO shitcans a fuckload of stock (which Money McBags realizes is a technical term, but please try to follow along) after leaving, it either means he thinks the company’s management bench is thinner than an anorexic butterfly or he is simply vindictive. Given than most CEO’s are driven by money, Money McBags’ interpretation of Mark Hurd’s stock sell off is not a positive for HP.
In small cap news, JAS put up a nice quarter, beating expectations with 4.4% same store sales growth as more people start knitting their own clothes and willy warmer‘s now that they can’t afford to buy those trendy jeggings from JOE’s jeans. The company earned $.20 of net income per share demolishing analyst guesses of $.02 per share and raised fiscal year 2011 guidance to $3.20 to $3.35 per share, up from the previous estimate of $2.95 to $3.10 per share, with analyst guesses for $3.23 per share. The company also said they they plan to open at least 50 new stores and to remodel at least 50 stores which means customers will be able to buy cheap shit in more convenient and nicer locations.
In other small cap news, a company Money McBags has been a fan of for a while, and yet has always been a bit too expensive, BRLI, put up a nice Q for like the bazzilionth time in a row. BRLI provides clinical laboratory testing for the Tri-sate area, for prisons, and for esoteric genetic conditions (and esoteric testing is more than just asking if you know who Eliphas Levi is or have heard of anthroposophy). The company had 25% top line growth and 26% EPS growth on a 7% increase in revenue per patient and a 17% increase in number of patients served while esoteric testing grew to 57% of revenues. And they did this all in the same Q that competitor Quest missed analyst earnings guesses and lowered their guidance. Money McBags will give this stock a more thorough poking tomorrow or Monday as he is strapped for time right now but it has grown 20% for like 10+ years and continues to perform as medicine is becoming more individualized and thus esoteric testing is becoming more the norm. Money McBags has to update his model but the stock is trading at likely around 15x his new numbers with a nice balance sheet and a real competitive advantage. It is worth doing work on this name.