The market was up today because we are due for a brief rally until we resume our fall in to the abyss like King Midas’ son Anchurus (only without saving the Earth) or like Alan Greenspan’s reputation.  The market has reached the point where some stocks have simply been oversold and with the lack of meaningful macro data and the beginning of earnings season, it should take less to get the market excited in the short term than it takes a teenage boy with a bad case of priapism to get excited.  We basically have a tired market that is succumbing to VIX (not unlike a tired Gay succumbs to Dix).  Today’s rally is being driven by State Street announcing they will beat earnings and by retail sales defying all logic, common sense, and income levels and being estimated to have grown at their fastest pace in 4 years.

The International Council of Shopping Centers (known more familiarly as ICSC or “Who?”) preannounced the results of the study they will release tomorrow, in affect scooping themselves in a strategic move to try to keep LeBron James’s choice of teams for free agency out of the news and to make the ICSC more of a household acronym than PETA, ROTC, and NAMBLA .  The ICSC remarked that retail sales “probably” came in at 3% to 4% growth for the month and will average 4% for the first five months of the year.  Of course you all might remember that the ICSC also said Teddy Ruxpin will “probably” make a huge comeback, Walmart shoppers “probably” understand that one size doesn’t fit all, and Lindsay Lohan will “probably” show up for her treatment any time now, so buyer beware.

Internationally, Europe has installed a cap on bank bonuses with bankers not allowed to take more than 30% of their bonuses in cash.  The remaining 70% will now be awarded in stock, gold, or the still beating hearts of freshly clubbed baby seals.  Europe bank stocks are also rallying because the rumor is that the haircuts they will have to take on Spanish bonds will be done by Ken Paves and not some dildo with a flowbee at Supercuts.  It was leaked that Spanish bonds will only be written down by 3% and not the presumed 10% to 20% some people estimated while German bonds will get no haircuts and thus will go for the Chrystal Gayle look.  In other international news, The Agricultural Bank of China raised $19.2B in their IPO yesterday which gives it a valuation richer than C, GS, or Christina Hendrick‘s bra.

In US stock news, STT is rallying the entire market as they expect to beat earnings guesses soundly by bringing in $.93 per share vs. guesses of $.72.  They also announced a $251 injection of capital to support certain trust funds managed by State Street Global Advisors that engage in securities lending and other types of fraud, I mean portfolio maintenance.  In theory, this “mitigates potential liability concerns” unless someone really wanted to sue them because there isn’t one financial services company that is not involved in shady activities.  In other stock news, Family Dollar dropped ~9% after beating quarterly analyst guesses but giving below consensus guidance.  Guidance was for $.46-$.51 per share next Q and guesses were for $.53 while CEO Howard Levine said “The environment remains challenging for consumers, and customers continue to buy close to need, that said, we are being conservative but think ultimately we will do well since we sell cheap shit and people can only afford cheap shit”  (though the last part of that quote could have bee made up).  The sell off seems overdone to Money McBags but he doesn’t follow FDO so he is not sure where comps are trading right now but at the high end their full year guidance is only $.01 below street guesses so either the whisper number on the street was much higher (and thus analysts as usual were scared to stick their necks out) or dropping 9% on guidance a Khagendra Thapa Maga nut hair below guesses is a buying opportunity.

In small cap news everything is up (well everything except for ZAGG).  KITD is finally rallying after yesterday when Money McBags said “This is the time to be building a position here even though the market is totally full of shit.  You wait for chances like this to buy good companies cheaply.”  Look, Money McBags knows he talks about this company as if they made blow jobs and caviar, but it is one of his biggest holdings and he thinks it has great long term potential and now it is just trading so fuck cheap that if you’re going to buy it, you should have a full position.  An interview with their CEO was posted yesterday by an industry follower and it is a great read for those trying to understand exactly what the company does, though it does get a bit technical.  For instance you learn of their expansive definition of an enterprise customer, their deeper-in-the stack, multi screen strategy (not to be confused with Lexington Steele’s “deeper in the sack, multi-scream” strategy), and that 40%-45% of their business deals with the back end side (which is similar to Alexis Texas as 45% of her work also deals with the back end side).

From a stock perspective, the CEO once again addresses the organic growth rate by saying it has been ~55% of their growth, he mentions that they are able to keep “virtually” all of acquired companies’ clients, and he talks about some of the stresses of being a public company especially when your stock is down 40% and investors are breathing down your neck and thus need to be coddled like the lovely Emanuelle Chriqui.  He also reaffirms that they will beat $75MM revenue guidance as with their last two acquisition they are near $100MM and says their goal for the next couple of years is to grow their global market share from 15%-20% to 50%.  Most interestingly, he talked about their last assrammingly dilutive equity raise where shareholders were treated like Mel Gibson at a gay pride parade by saying:

“The raise was driven by an unsolicited reverse inquiry from a large institutional investor. It was a tough decision to take in the money (given the resultant dilution), but ultimately we felt it was the right thing to do in that it allows management to focus on building our business without the distraction of frequently accessing the capital markets to finance future strategic moves.”

This was all very intersting stuff and while there wasn’t a ton of new information, it was nice to hear the story again and have guidance confirmed given the assawful stock action of the past month.  That said, Money McBags is calling bullshit on the $100MM revenue number.  Last month Money McBags made the argument that with the declining Euro and ~70% of their business non-US, the exchange rate should make their topline unattainable.  In fact, it could crush next year’s revenue as well.  The company currently has 23.3MM shares so ~210MM market cap and ~$57MM in cash (Money McBags believes those are the pro-forma numbers after their last equity raise and acquisition, but the cash figure may be closer to ~$30MM), so ~$150MM in enterprise value.  With the decline in the Euro, Money McBags estimated that next year’s EBITDA could be ~$20MM on the low end but in a best case scenario, he thinks they can earn ~$30MM EBITDA.  So even on a worst case scenario they are cheap and in a best case scenario, they are cheaper than a Kevin Federline autographed picture as they are trading at ~5x EBITDA with plenty of cash.  If you don’t have your position built yet, this is the time to get in.  It may drop a bit tomorrow after today’s run up, and it may drop a bit more with the market, but this is a solid opportunity to step in to this company as a longterm holding.

And remember WGP is on Facebook now and Twitter as Money McBags embraces social networking as if it were Lauren Conrad.