BetterTrades
(Best) BIDU, SOHU, HIGV (Worst) PHM, MCY, ASF from Better Trades
February 9, 2009
With today’s markets fluctuating between positive and negative territory, a few companies took advantage of that, while others were pummeled by internal news that pushed their stock’s price lower. Leading off were those that fared well during much of the trading session.
Top 3 Stocks
Baidu Inc. (BIDU)
The top earner in today’s trading, gaining $13.16, or 10.6%, to trade at $137.78 per share heading into the afternoon session.Often referred to as the “Chinese Google,” Baidu is still a relative new comer to the Internet boom. Only nine year old, the company has only been trading in the U.S. since August of 2005. Since their initial IPO of $66.00, shares of Baidu have reached as high as nearly $430 per share.
With a market cap of $4.7B, the company is still relatively small in comparison to Internet giant Google Inc. (GOOG), with a market cap nearing $120B. However, the company still remains profitable, with earnings per share of $2.45 in 2007, projected earnings of $4.68 this year, and estimates for nearly $6.00 per share the next, Baidu has taken the Chinese Internet market by storm.
Being a great growth company, today’s moves were purely speculative as no real news moved the stock’s price higher during the session.
Sohu.com Inc. (SOHU)
The second largest Chinese Internet company surged in trading today as well. Shortly after reporting 4Q earnings, the stock took off, gaining $3.56, or 7.8%, to trade at $49.16 per share in afternoon trading.
Posting quarterly income of $56.62M, or $1.45 per share, SOHU saw profits increase nearly three times that of last year’s 4Q profits. Revenues, meanwhile, were up over 86% from last year’s sales to come in at $121.57M. Analysts were looking for the Chinese Internet provider to post quarterly earnings of $1.16 per share on total revenues of $120.98M.
Looking ahead, SOHU is looking to post 1Q earnings in the range of $1.05 to $1.10 per share on overall sales totals between $111.5m and $115.5M. In the meantime, analysts are projecting 1Q earnings of $1.01 per share on revenues of $117.41M.
Furthermore, analysts from Oppenheimer recently upgraded SOHU stock from Perform to Outperform with a mean target price of just over $65 per share.
Hartford Financial Services (HIG)
Last, but not least, one of the nation's largest investment and insurance companies, Hartford Financial Services (HIG) jumped in Monday’s session, adding more than 17%, or $2.23 per share to trade at $14.92 heading into the close.
Today’s news of the state’s insurance commissioner’s office in Connecticut announcing that certain reserve requirements, and the possibility of allowing the company to change their accounting practices, may provide the insurance company more cash on hand.
After last month’s request to the state regulator’s office was denied to relieve the company from certain restrictions, today’s news comes as HIG seeks to change two specific accounting practices, one pertaining to variable annuities, the other to deferred taxes.
Coming off last week’s quarterly earnings report, HIG posted a net loss of $806M, or $2.71 per share in the 4Q, with a yearly loss totaling $2.75B, or $8.99 per share, the company had their long term senior debt ratings reduced by Moody’s, from A3 to Baa1.
Looking forward, the company is looking to record yearly earnings between $5.80 and $6.20 per share, with analysts looking for $6.08 per share. On a side note, in order for the company to help save money, HIG is reducing their quarterly dividends from $0.32 per share down to $0.05 per share, in hopes of saving $250M annually.
Worst 3 Stocks
ViroPharma Inc. (VPHM)
The other side of the coin brought massive intraday losses for several companies, with ViroPharma Inc. (VPHM) leading the way. As a leader in RNA virology and RNA antiviral drug discovery and development, ViroPharma is focused on drug development and discovery activities for viral diseases including viral meningitis, viral respiratory infection, pneumonia, hepatitis C and influenza.
Dire news, released this morning, revealed that the company’s late-stage trial of Maribavir, which is used as a prophylaxis in none marrow transplants, failed to meet its objective in preventing infections in transplant patients.
The failure of the drug had trading halted on shares of VPHM during the morning session. Upon resuming trade, shares were down 51.6%, or $6.30, to trade at $5.91 per share, its lowest level in more than three years. Shares of ViroPharma fell as low as $4.89 per share before rebounding slightly and have traded in a range between $8.10 and $15.16 per share over the past year.
Mercury General Corp. (MCY)
Another laggard in today’s trading comes from Mercury General Corp. (MCY), which is engaged in writing all risk classifications of automobile insurance in a number of states, principally California.
Before the markets opened, MCY announced quarterly earnings for their 4Q, which amounted to a loss as the company took massive hits on their bottom-line due to a decline in revenues and investment losses.
For the recent quarter, MCY posted a loss of $168.35M, or $3.07 per share, compared to a profit of $44.6M, or $0.81 per share from a year ago. Revenues for the period slipped 5% to $43.9M, which helped propel the company’s stock down more than 18% in afternoon trading, losing $7.51 to trade at $33.69 per share.
Administaff Inc. (ASF)
The final company to be hurt in trading today was Administaff Inc. (ASF), which is a leading personnel management company that serves as a full-service human resources department for small and medium-sized businesses throughout the United States.
The company’s shares were pushed lower during today’s session on news of a dismal 4Q earnings report. For the quarter, net income decreased from $13.3M, or $0.50 per share from a year ago, to $9.71M, or $0.39 per share, a decline in net earnings of nearly 27%.
Despite a nearly 6% increase in revenues, from $402.08M to $425.99M, the company’s operating expenses of $73.07M more than offsetting the company’s increase in overall sales. With that, shares of ASF were down more than 13% in today’s trading, falling $3.26 to trade at $20.40 per share.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
