BetterTrades
(Best) PRU, LNC, SFY (Worst) N, WW, CONN from Better Trades
May 11, 2009
Coming off the third consecutive week in which the major indices posted gains, March proved to be the best month, with regards to percentage gains, in which the markets have seen since the 1930s. Over the past week, several companies made solid increases in their market share, while others were not as profitable during the markets push higher.
Top 3 Stocks
PRU - Prudential Financial Inc. $28.18 to $46.00 +63.2%
As one the biggest moving stocks over the past week, Prudential Financial, Inc. (PRU), one of the largest financial services institutions in the U.S., confirmed early last week that the company posted a loss, marking the eighth consecutive quarterly decline. Despite the loss, the companies stock gained market share as investors took into account a one-time charge.
Prudential provides a wide range of insurance, investment management and other financial products and services, while conducting their principal businesses through four divisions: U.S. Consumer, Employee Benefits, International and Asset Management. The company also conducts other activities in Corporate and Other operations and the Prudential name and “Rock” logo are among the most widely recognized in the U.S.
For the recent period, Prudential recorded a net loss of $5M, or $0.01 per share, compared to a profit of $68M, or $0.18 per share a year ago. Incurred in the loss, the company witnessed results greatly affected by a $666M pretax investment loss during the quarter, in addition to other related charges and adjustments. Overall revenues for the company were up for the quarter, climbing from $6.92B to $8.01B, an increase of nearly 16%.
Prudential saw assets under management slip 3% to $542B, while the company’s life insurance and annuity policies increased their revenues, jumping from a loss of $8M in the prior year to a profit of $19M. In the meantime, analysts were looking for the insurance and investment company to post earnings of $0.83 per share, excluding one-time charges, on total revenues of $6.58B.
Over the course of the week, shares of PRU jumped nearly $18 per share, gaining more than 63% in market value. During the past year, Prudential’s stock has traded within a range between $10.63 and $89.82 per share. With the company announcing their yearly guidance figures. Following a solid week in trading, shares of PRU reversed course to start the week off, falling more than 12%, or $5.67, to end the session at $40.33 per share.
LNC – Lincoln National Corp. $11.39 to $18.24 +60.1%
Lincoln National Corp. (LNC), operating as a holding company, conducts their business through multiple insurance and investment management dealings. Lincoln’s operations are divided into four business segments, Life Insurance and Annuities, Lincoln UK, Reinsurance and Investment Management. During last week’s trading sessions, the company’s stock surged in trading, despite the company’s quarterly performance reports.
For the 1Q, Lincoln National booked a net loss of $579M, or $2.27 per share, in sharp contrast to last year’s profit of $289M, or $1.10 per share. The loss for the period was a direct result of the company’s charges related to sour investment and derivatives. Included in those losses were charges of $600M, or $2.35 per share, goodwill charge within their annuity segment. Operating revenues for the company slipped as well, falling from $2.59B to $2.25B, a drop of more than 13%.
Further into the report, LNC witnessed deposits in their individual annuity segment fall more than 26% to $2.2B, while life insurance sales remained flat from last year’s totals of $54M. Within the company’s UK division, income fell by nearly half, from $11M to $6M, reflecting an unfavorable currency exchange rate.
Analysts, on average, were anticipating that the insurance and investment management company would post quarterly earnings of $0.71 per share, excluding charges, on total sales figures of $2.54B. When charges were removed from the company’s earnings report, final numbers showed a profit of $171M, or $0.66 per share.
As the overall markets turned negative to start the new trading week, shares of LNC followed suit. By the close of Monday’s trading session, shares of Lincoln National were down more than 9% or $1.66, to end the day at $16.58 per share. Over the past 52 weeks, LNC’s stock has ranged between $4.76 and $59.99 per share.
SFY – Swift Energy Co. $11.63 to $18.10 +55.6%
Rounding out the list of top weekly performers was Swift Energy Company (SFY). Swift currently engages in the development, exploration, acquisition, and operation of oil and gas properties with a primary focus on U.S. onshore natural gas reserves. The company made it known last week that their quarterly results came in lower than the previous year as weaker oil and gas prices weighed heavily on their bottom-line.
Swift Energy currently focuses on development and exploration in four core areas, Southern Texas, Eastern Texas, South-central Texas and Western Louisiana. For the company’s 1Q performance, Swift confirmed that the company booked a loss of $59.1M, or $1.91 per share, in contrast to the previous year’s profit of $48.4M, or $1.59 per share. The period included a write-down of $50M, or $1.61 per share related to several oil and gas properties that underwent testing at their drilling sites.
"Even though the weak commodity pricing environment has persisted, our first quarter 2009 production results were at the high end of our expectations," acknowledged Terry Swift, CEO of Swift Energy. "We accomplished a lot without spudding any new wells during the quarter. In South Texas, we brought online the first horizontal well ever drilled in the Olmos formation in South Texas, and made preparations to drill three additional wells of this type in the same area this year. Additionally, we have continued to expand our acreage positions in the area, which has grown our probable and possible reserves categories since year-end.”
Revenues, meanwhile, plunged during the quarter, slipping from $199M to $76.4M, a decline in sales of nearly 62%. On average, analysts within the industry were looking for Swift to post a quarterly loss of $0.38 per share on total revenues of $73.75M.
After posting gains of more than 55%, or $6.47 per share, throughout the previous week, shares of Swift Energy took its lumps by the close of Monday’s trading session. At the sound of the markets conclusion, SFY shares were down more than 7%, or $1.32, to end the day at $16.78 per share. Throughout the year, shares of SFY had traded as high as $68.54 per share and as low as $4.83 per share.
Worst 3 Stocks
N – NetSuite Inc. $13.99 to $10.18 -27.2%
Contrary to the weeks’ solid gains throughout the major exchanges, several companies did not fare as well in the marketplace as did other. One such company was NetSuite, Inc. (N), which is the leading provider of on-demand, integrated business management software for growing and midsize businesses.
With thousands of customers globally, NetSuite's online products and professional services, enable companies to manage all key business operations in a single hosted system, including customer relationship management, order fulfillment, inventory, accounting and finance, ecommerce; and Web site management.
In the company’s quarterly report, NetSuite posted a loss for the 1Q greater than that of their loss in the previous year’s 1Q. For the recent period, the company recorded a loss of $3.75M, or $0.06 per share, versus a loss of $2.03M, or $0.03 per share.
Chief Executive Officer, Zach Nelson made it known that the company, "continues to take market share and execute on our strategic initiatives of moving up market and extending the NetSuite platform."
Meanwhile, revenues advanced year-over-year, climbing from $34.12M to $41.6M, an increase of nearly 22%. Weighing on the company’s bottom-line, was an increase in total operating expenses, which jumped from $27.35M to $32.5M, an advance of nearly 19%.
Analysts, within the industry, were looking for the software service provider to post breakeven per share quarterly earnings on total revenues of $42M. Following the company’s report, an analyst at Piper Jaffray cut ratings on the stock from “neutral” to “sell,” with a new target price of $10 per share.
By the end of last week’s trading session, shares of NetSuite slipped more than 27% in market share, giving up more than $3 per share. At the start of the new trading week, shares of NetSuite added more than 9% by the close of Monday’s session, gaining $0.94 to finish at $11.12 per share. Over the course of a year, shares of NetSuite have traded between $5.43 and $23.07 per share.
WW – Watson Wyatt Worldwide Inc. $51.84 to $39.85 -23.1%
Also on the list of poor-performing stocks over the past week was Watson Wyatt Worldwide Corp. (WW), leading global human capital and financial management consulting firm that specializes in employee benefits, human capital strategies, technology solutions, and insurance and financial services. By late Friday of last week, shares of Watson Wyatt were down more than 23%, giving up nearly $12 per share, in reaction to the company’s 3Q earnings report.
For the recent period, the company posted net income of $40.6M, or $0.95 per share, down from the previous year’s 3Q profits of $42.5M, or $0.96 per share, a slip in earnings of more than 4%. The company’s results were affected grossly by an unfavorable exchange rate between the Dollar and the British pound, as well as with the Euro.
Meanwhile, Watson Wyatt’s quarterly sales figures slipped from $457.5M to $417M, a drop in revenues of nearly 9%. Within their sales totals, WW saw sales in their benefits segment fall 7% to $248M, while revenues from their human capital unit fell nearly 25% year-over-year, from $49M to $37M. Finally, the company’s sales within their investment consulting unit dipped more than 9%, from $43M to $39M.
On average, analysts were looking for the human resource and consulting firm to post quarterly earnings of $0.93 per share on total sales of $431.1M.
Looking ahead to the upcoming 4Q, Watson Wyatt expressed their projection of quarterly earnings between $0.65 and $0.70 per share on overall sales between $370M and $390M. Meanwhile, analysts are predicting WW’s 4Q earnings to come in at $0.87 per share on overall revenues of $421.01M.
Coming off a poor performance last week, the company’s stock traded mixed for much of Monday’s trading session before finishing in the green. At the close of the session, shares of WW closed higher, adding $1.08, or 2.7%, to close at $40.93 per share. During the past year, shares of Watson Wyatt have ranged between $32.56 and $62.00 per share.
CONN – Conns Inc. $15.68 to $12.19 -22.3%
Included on the list of worst performing stocks for the pervious week is Conns Inc. (CONN), which is a specialty retailer currently operating retail locations in Texas and Louisiana. The company sells major home appliances, a variety of consumer electronics and home theater products. Conns also sells home office equipment, lawn and garden products and bedding. In efforts to stay ahead of the retail curve, Conns continues to introduce additional product categories for the home in order to increase same store sales and to respond to their customers' product needs.
Throughout the prior week, shares of CONN plunged more than 22%, giving up more than $3 a share as a result of their 4Q earnings release that showed a decline in year-over-year profits. For the quarter, the company posted net income of $12.62M, or $0.56 per share, versus the previous year’s profits of $13.06M, or $0.57 per share, a decrease in earnings of more than 3%.
Conns’ net income was affected by a $4.5M decrease in interest paid on securitized assets. As for the company’s overall revenues, sales were up nearly 20%, climbing from $225.92M to $269.91M, as same store sales jumped 12.5% over last year’s performance. Analysts, on average, were looking for the specialty retailer to record quarterly earnings of $0.63 per share on overall revenues of $271.5M.
For the year, Conns reported net earnings of $25.69M, or $1.14 per share, compared to the previous year’s income of $39.68M, or $1.68 per share, a decline in profits of more than 35% as the retail sector remains a difficult environment amidst the current economic crunch. Annual sales for Conns came in at $890.8M, up more than 8% over last year’s tally of $824.12M. Analysts were looking for the company to post annual earnings of $1.21 per share with yearly sales of $893.05M
Looking ahead to the upcoming fiscal year, Conns is anticipating yearly earnings to range between $1.75 and $1.85 per share. In the meantime, analysts are projecting earnings of $1.65 per share.
At the close of Monday’s trading session, shares of CONN were up over 4%, adding $0.54, to finish the day at $12.73 per share. Over the past 52 weeks, shares of Conns have traded as high as $25.27 and as low as $4.64 per share.
2009 Better Trades Article
brought to you by
BRIAN MULLIN
