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(Best) AFG, ASEI, ICE (Worst) PFG, CBST, PRU from Better Trades
February 10, 2009
The markets traded deep into the red today, as investors remain concerned over the government’s proposed stimulus package that continues to be tweaked in order to pass on Capital Hill. This resulted in all the markets falling more than 3% in afternoon trading. More than 72% of the three major indices saw their stocks decline.
Top 3 Stocks
American Financial Group Inc. (AFG)
In sharp contrast to the market’s direction, there were a handful of market movers that defied the overall sentiment of investors today.
One such company was American Financial Group Inc. (AFG), which is coming off last night’s quarterly earnings report. Despite posting a decrease in year-over-year profits, shares of AFG surged during today’s session.
After the closing bell on Monday, AFG released their finding that showed a decline in 4Q profits, falling from $143.6M, or $1.21 per share, to $121.7M, or $1.04 per share, a decrease in earnings of more than 15%.
On average, analysts were looking for the insurance product provider to post earnings of $0.97 per share. AFG managed to increase their overall revenue figures from $1.036B to $1.103B, an advancement of just over 6%.
The stock traded higher throughout much of today’s session due largely to the company’s upwardly adjusted forecast for yearly earnings in 2009. With current expectations of earnings coming in between $3.70 and $4.00 per share, that is above the company’s previously stated range between $3.65 and $3.85 per share. Analysts are looking for yearly earnings of $3.55 per share.
Shares of AFG were up over 11% today, adding $2.10 to trade at $19.80 per share. Over the past year, shares of American Financial have been trading between $13.65 and $32.00 per share.
American Science & Engineering Inc. (ASEI)
In addition to AFG, another company withstanding the downward pressures of the markets today was American Science & Engineering Inc. (ASEI), which develops, produces, markets, sells and provides research and engineering services with respect to, X-ray inspection systems.
The company’s stock took off in trading today, shortly after announcing 3Q earnings results early Tuesday morning. With an increase in overall sales, due to higher demand in products and services, ASEI was able to post a gain in year-over-year earnings.
For the quarter, ASEI booked a profit of $10.06M, or $1.13 per share, in contrast to a profit of $4M, or $0.43 per share, an increase in quarterly profits of 151%. Meanwhile, overall revenues of the company sky rocketed as well, jumping more than 53%, from $42.62M to $65.29M.
Heading into the final hour of trading today, shares of ASEI were up $2.30, or 3%, to trade at $78.87 per share.
IntercontinentalExchange Inc. (ICE)
Last, but not least, another big mover in the down market today was IntercontinentalExchange Inc. (ICE), which also announced earnings before the opening bell this morning.
For the 4Q, ICE posted lower profits than the year before as charges related to bad investments in India weighed heavily on the company’s bottom-line. Posting net income of $48.9M, or $0.67 per share, that was more than 24% lower than last year’s profit of $64.7M, or $0.90 per share.
Yearly totals were also released this morning, as ICE managed to gain on last year’s profits, post annual income of $300.9M, or $4.17 per share, up 25% from 2007 net earnings of $240.6M, or $3.39 per share.
Although well below the stock’s yearly high of $167.28, shares of ICE did advance by $2.74, or 4.4%, to trade at $65.00 per share.
Worst 3 Stocks
Principal Financial Group Inc. (PFG)
Included in the demise was Principal Financial Group Inc. (PFG), which was battered in today’s trading session after reporting dismal earnings after the closing bell yesterday. In their report, PFG posted a net loss in the 4Q of $7.5M, or $0.03 per share, compared to a profit of $34.1M, or $0.13 per share a year ago.
Revenues were also down for the quarter, falling more than 12%, from $2.89B to $2.53B. Excluding a $188.9M capital loss during the period, PFG would have posted net income of $179M, or $0.69 per share. Analysts, on average, were looking for the financial company to post net earnings of $0.66 per share, excluding charges, on total sales of $2.69B.
By late afternoon, shares of PFG were down more than 32%, giving up $5.40 to trade at $11.71 per share. Over the past year, shares of PFG have traded between $8.78 and $61.41 per share.
Cubist Pharmaceuticals Inc. (CBST)
Another company being pummeled by today’s market fallout was Cubist Pharmaceuticals Inc. (CBST), which was hurt by earlier news that the company’s only marketed product, Cubicin, was being launched by Teva Pharmaceutical Industries Ltd (TEVA) at a lower cost.
Cubicin, which is the company’s antibiotic drug, was approved by the FDA in 2003, with its current patent remaining until 2019. Teva, based in Israel, filed an application early this morning citing that their generic drug does not conflict with Cubist’s drug. An infringement lawsuit against Teva is pending.
Before the closing bell, shares of CBST plunged more than 16%, falling $3.59 to trade at $18.66 per share.
Prudential Financial Inc. (PRU)
The other company to post double-digit percentage losses in today’s session was Prudential Financial Inc. (PRU), which was beating down on news of last week’s poor quarterly performance. Additionally, speculation within the financial markets as a whole continues to push stocks lower as the industry waits on approval of the President’s stimulus package.
The week before showed that PRU posted a 4Q loss of $1.64B, or $3.85 per share, versus a profit of $792M, or $1.75 per share. With write-offs totaling $1.32 per share, adjusted income still showed a loss of $878M, or $2.04 per share. Analysts were looking for a quarterly loss of $1.19 per share.
Looking ahead, the company reaffirmed their yearly outlook of earnings per share between $5.25 and $5.65. Despite posting gains after the company’s earnings report last week, today’s selling pressures were too much for the stock to overcome, as shares of PRU fell $4.78, or 15.7%, to trade at $25.60 per share.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
