BetterTrades
(Best) CSTR, MA, MFE (Worst) CPG, SVNT, LPHI from Better Trades
February 13, 2009
The markets are staging a modest uptick in trading today, following a mixed session yesterday, as investors await news from the world’s finance ministers that will shed some light on how to go about fixing the world’s economy.
Despite the teetering of the markets, in-and-out of positive territory, there were a handful of companies that posted solid gains in today’s session, heading into the close of the week.
Top 3 Stocks
Coinstar Inc. (CSTR)
Leading the way for companies gaining in the markets today is Coinstar Inc. (CSTR), which operates a national network of self-service coin-counting machines in the U.S., the U.K., and Canada. On news of a positive quarterly report, released after the close on Thursday, shares of CSTR jumped more than 20% during the session.
Recording a profit of $4.2M, or $0.15 per share, that was in sharp contrast to last year’s net loss of $37.2M, or $1.34 per share. Total sales surged during the period, climbing from $133.3M a year ago to $261M, an increase of nearly 96%.
On average, analysts were looking for Coinstar to book a quarterly profit of $0.16 per share on overall revenues of $258.9M. CSTR added guidance for fiscal 2009, and expects to post overall revenues between $1.2B and $1.3B, up from the previously stated $1B.
Heading into afternoon trading, shares of CSTR were up $5.25, or 23.4%, to trade at $27.87 per share. Over the past year, CSTR has traded in a range of $15.71 to $38.90 per share.
MasterCard Inc. (MA)
One of the most well known companies in the world, MasterCard Inc. (MA), saw its stock post solid gains throughout the day on recent news of an upgrade in their stock’s projected performance.
Providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide, MasterCard stock was upgraded by Cowen & Co. analysts, from “underperform” to “outperform,” a two-notch advance. Citing stronger and sustainable price trends, analysts also believe that MA will reduce operating expenses in order to combat the economic turmoil.
With credit card revenues continuing to increase, along with advertising costs declining, earnings per share are expected to grow by 20% in the coming quarters. By late afternoon, shares of MA were up nearly 2.5%, adding $3.75, to trade at $165.69 per share.
McAfee Inc. (MFE)
Another mover in today’s market, McAfee Inc. (MFE), who creates best-of-breed computer security solutions that prevent intrusions on networks and protect computer systems from the next generation of blended attacks and threats, jumped on news of a solid posting of 4Q quarter results late Thursday evening.
For the 4Q, McAfee posted net earnings of $45.4M, or $0.29 per share, versus last year’s profit of $12.2M, or $0.07 per share. Revenues jumped nearly 19% year-over-year, from $356.5M to $424M. Excluding certain one-time charges, MFE posted earnings of $82.5M, or $0.53 per share. Analysts were looking for the computer security maker to post earnings of $0.53 per share on total sales of $421M.
MFE also offered forward-looking guidance today, expecting 1Q earnings between $0.46 and $0.50 per share on sales between $440M and $460M. Analysts are looking for 1Q results to come in at $0.50 per share with total revenues of $424M.
Inching closer to the closing bell, share of MFE were up nearly 5% during the session, gaining $1.47 to trade at $31.64 per share.
Worst 3 Stocks
Cabot Oil & Gas Corp. (CPG)
As the markets turned negative mid-morning, several stocks went down with them. Included in those was Cabot Oil & Gas Corp. (CPG), which is an independent oil and gas company engaged in the exploration, development, acquisition and exploitation of oil and gas properties located in the U.S.
Although the company posted an increase in 4Q profits Thursday evening, from $42.05M, or $0.43 per share, to $43.07M, or $0.42 per share, the company’s stock retreated in today’s trading session. The company managed to post new records in 2008 in reserves, production and earnings.
However, with the current economic condition within the oil industry, companies are not able to sustain last year’s pricing models. Cabot has already reassessed their production guidance downward along with reducing their drilling forecasts for the upcoming year.
Savient Pharmaceuticals Inc. (SVNT)
Furthermore, Savient Pharmaceuticals Inc. (SVNT), a specialty pharmaceutical company with expertise in developing, manufacturing, and marketing human health care products for niche and wider markets, saw their stock tumble in today’s trading, following a review extension on the company’s gout drug, Krystexxa.
In a statement from the FDA late Thursday, the agency confirmed the report that Savient’s drug caused some concerns in relation to the cardiovascular effects the drug had in its trial phase. Today’s news now leaves the drug’s future to be determined by the FDA on July 30, instead of April 30.
Based upon today’s events, shares of Savient plummeted in trading, losing nearly 20% of its value by late afternoon. The stock dropped $1.42 to trade at $5.89 per share. Over the past year, SVNT has traded between $2.80 and $28.42 per share.
Life Partners Holding Inc. (LPHI)
The final company mentioned that had a tough time in trading today is Life Partners Holding Inc. (LPHI), which is a licensed provider of viatical and senior settlements, collectively referred to as life settlements.
The catalyst to today’s shortfall in trading was a recent comment made by an analyst that the company’s fees were “egregious and non-sustainable” and that investors should take heed. Within the industry, the average company receives a 6% commission form the services provided, however, LPHI charges a 14.4% fee for their services.
On top of that, investors of life settlements usually have an internal rate of return (IRR) that ranges between 9% and 13%. Life Partners has been said to promise their investors an unheard of 16% IRR.
Just two years ago, the company was trading as an OTCBB stock, having never traded above $10. In the last year, shares have fluctuated between $12.07 and $45.07per share. Today’s session saw shares of LPHI plunge more than 21%, losing $6.19 to trade at $22.51.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
